ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Message from
the Board of Directors
Thailand’s economy in 2012 expanded 5.5% on private consumption and investment. Coupled with improvement in consumer confidence and brisk housing demand, the property market effectively recovered from the 2011 flood disaster. Early in the year, property sale at heavily-flooded areas slumped as buyers delayed decision, fearing another strike in 2012. Demand was clearly shifted towards condominiums, leading to the launch of more (high-rise) condominium projects. In the first half of 2012 (January-June), 36,300 new condominium units hit the market, 270% above13,400 low-rise units. In the second half, confidence in low-rise development among consumers and developers recovered. The government’s clear plans towards short-term and long-term flood prevention convinced them that Bangkok and peripheral provinces will not again experience a disaster like in 2011. This allowed the industry’s annualized sale to rise above the pre-disaster level.
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At Property Perfect Public Company Limited, the flood-prevention plans were drawn up to restore customers’ confidence, allowing us to register a 13% increase in consolidated sale revenue to Bt9,094 million. Of total, low-rise projects contributed Bt7,489 million and high-rise Bt1,181 million, or 82% and 13%. Contributing the rest was land sale (Bt148 million) and hotel business (Bt276 million). In the fourth quarter, the Company consolidated the operating results of Share Group (SG). The 69.01%-owned subsidiary, set up for property and hotel business development in Japan, bought Kiroro Resort from Mitsui Fudosan Resort Company Limited. The ski resort in Sapporo on Hokkaido Island covers 292 rai in total area, locating two hotels (buildings) with 422 rooms. The purchase included all properties in the hotels and ski equipment.
that boast modern look and usable space efficiency. The Company was consequently recognised as an outstanding developer, through the “Thailand Property Awards 2012” for the Perfect Masterpiece Rattanathibet project. In the year, Perfect Place Rangsit was also named an outstanding private development project (single house). In the condominium segment, the MOFF design (Maximum of Flexible Function) was introduced in the middle of the year, as the first-of-its-kind innovation for high-rise development. Having been warmly welcomed, the design differentiates the Company’s products from others’ by increasing usable space through the ceiling as high as 4 meters against the conventional 2.4- meter height. Another good news is after the par split from Bt6 to Bt1 and rights offering, the Company’s share-trading liquidity increased and that earned it a The Company maintains its focus place on the list of the Stock Exchange on low-rise and high-rise development, of Thailand’s top 100 companies enticing new buyers with new designs (SET100).
In 2013, the government’s approval for the Bt2.2 trillion infrastructure investment, over 80% of which or Bt1.6 trillion earmarked for rail development, will directly send a positive impact on the Company’s land bank. Under the government’s plan, concrete development plans of several mass transit lines are unveiled. The Company’s land bank, encompassing 2,200 rai along mass transit routes in Bangkok and peripheral provinces, could locate new development projects with combined value of up to Bt71,000 million. The Company will maintain its focus on opening new projects along mass transit routes. The Company is convinced that low-rise housing demand will resume, as both developers and consumers are assured of no future flood disaster. Plus, unclear details of the new City Plan will affect the cost of land for high-rise development. Condominium demand is expected to fall due to higher unit prices. Meanwhile, the low interest rates and higher purchasing power will benefit the
real estate industry as a whole. The Company plans a total of 21 projects with combined value of Bt27,550 million; 15 single-house and townhouse projects worth Bt18,350 million, and 6 condominium projects worth Bt9,200 million. Some will be located in new locations like Krungthep Kreetha, Chaeng Wattana, Pattanakarn, Bangna, Prachachuen and Phetkasem. In light of higher purchasing power of provincial residents and greater transport convenience, the Company plans expansion to provinces, initially with a condominium project in Hua Hin and a detached housing project in Chiang Mai. On top of this, the Company is committed to further launching distinguished home and condominium designs to highlight modern look and space efficiency. Meanwhile, construction quality will be enhanced through the increase of prefab works from 50% to 70%, which should speed up the construction works and allow quicker transfers and income realization. This will also address the
acute labor shortage. On behalf of the Board of Directors, we wish to extend gratitude to all shareholders, customers, investors, business partners, and financial institutions who have thrown positive supports to the Company. Thanks also go to all executives and employees who patiently and devotedly completed their tasks throughout the past year.
Dr.Tawatchai Nakata Chairman
Mr. Chainid Ngow-sirimanee Chief Executive Officer
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Company Information Name Head Office Type of Business
No. of Paid-up Share Par Value Paid-up Capital
04
: Property Perfect Public Company Limited : 17th Flr., Vorasombat Bldg. 100/1 Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-247-3328 : Real Estate Development, with focus on housing development for sale in Greater Bangkok under brands as follow; w Maneerin Lake Park w Perfect Park w Perfect Place w Perfect Masterpiece w The Metro w The Villa w Modi Villa w Metro Park w Metro Sky w The Sky w iCondo w Uniloft : 5,641,047,963 Shares (31 December 2012) : Baht 1 : Baht 5,641,047,963
Investment in Other Companies Name and Address
Estate Perfect Co., Ltd. 100/1 Vorasombat Bldg., 17th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-246-0733 Bright Development Bangkok Co., Ltd. 100/1 Vorasombat Bldg., 17th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-246-0733 Residence Number Nine Co., Ltd. 100/1 Vorasombat Bldg., 17th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-246-0733 Property Perfect International Pte. Ltd. 1 Raffles Place, #28-02 One Raffles Place, Singapore 048616 We Retail Public Company Limited (Formerly Name: Daidomon Group Plc.) 100/1 Vorasombat Bldg., 17th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-246-0733 U & I Construction Bangkok Co., Ltd. 100/89 Vongvanich B Bldg., 27th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-246-2095 Fax. 02-246-2020 Perfect Sport Club Co., Ltd. 100/52 Vongvanich B Bldg., 19th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-645-1406-8 Fax. 02-645-1409 Uniloft Service (Thailand) Co., Ltd. 100/1 Vorasombat Bldg., 17th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-246-0733 Perfect Prefab Co., Ltd. 100/1 Vorasombat Bldg., 10th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-246-0733
Registered Capital (MB)
Percentage Paid-up of Capital (MB) Investment
Type of Business
1,200
1,200
100%
Real Estate Development
1,000
1,000
100%
Real Estate Development
1,000
1,000
100%
Real Estate Development
1 (SGD)
1 (SGD)
100 %
4,132
3,996
91.05%
100
100
100%
Oversea Real Estate Development Real Estate Development Shopping Center and Commercial Area Real Estate Construction
5
5
100%
Manage Fitness and Clubhouse
0.1
0.1
99.70%
Service Apartment
10
2.5
51%
Manufacturer and Install Prefab Structures
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Name and Address
Registered Capital (MB)
2,230 Krungtep Land Plc. 100/1 Vorasombat Bldg., 21st Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-645-0960-3 Fax. 02-645-0380 40 Real Service Co., Ltd. 100/9 Soi Ta-it Rattanayhibet Road, Nonthaburi Tel. 02-594-4001-5 Fax. 02-594-4021 500 Centrepoint Shopping Mall Co., Ltd.* (Subsidiary of We Retail Plc.) 100/1 Vorasombat Bldg., 17th Flr., Rama IX Road, Huaykwang, Bangkok. Tel. 02-245-6640-7 Fax. 02-246-0733 923 (JPY) Share Group Co., Ltd.* (Subsidiary of Property Perfect International Pte.Ltd.) 30-3, Sarugaku-cho, Shibuya-ku, Tokyo, Japan Kabushiki Kaisha Kiroro Associates Co., Ltd.* (Subsidiary of Share Group Co., Ltd.) 128-1 Toklwa, Akaigawa-mura, Yoichigun, Hokkaido, Japan *The subsidiary indirectly owed by the company.
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2,460 (JPY)
Percentage Paid-up of Capital (MB) Investment
Type of Business
1,780
20.22%
Real Estate Development
22.5
19%
Home Service
400.2
91.05%
Real Estate Development
252 (JPY)
69.01%
750 (JPY)
69.01%
Real Estate Development and Hotel Business in Japan Hotel Management
Financial
Information
Consolidate
The Company Only
2012 2012 2011 2010 Financial Position (Unit : Million Baht) Total Assets 25,872 21,569 18,600 17,318 Project Development Cost and Land for Development 21,674 13,317 11,711 11,027 Total Liabilities 17,567 13,692 11,766 10,551 Shareholders’ Equity 8,305 7,877 6,834 6,767 Operation Results (Unit : Million Baht) Sales 9,094 6,231 5,618 7,462 Total Revenue 9,272 6,456 5,812 7,586 Gross Margin 3,273 2,401 2,113 2,434 Net Income 178 366 331 538 Financial Ratio Return on Total Revenue (%) 1.92 5.66 5.69 7.09 Return on Equity (%) 2.27 4.97 4.86 8.15 Return on Total Asset (%) 0.76 1.82 1.84 3.54 Current Ratio 1.99 1.30 1.35 2.22 Quick Ratio 0.16 0.10 0.12 0.41 Per Share Data (Unit : Baht) Net Income per share 0.04 0.07 0.07 0.68 Dividend 0.03 0.03 0.04 0.33 Book value 1.47 1.40 1.45 8.59 Note: The company split par from Bt6 to Bt1 on 6 May 2011.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Nature of
Business Background and Major Milestones Property Perfect Public Company Limited was established on 14 August 1985 by the group of Maneeya Estate’’s operators, with initial registered capital of Bt300,000. On 19 October 1993, the company was registered as a public company and on 1 June in the same year, it was listed on the Stock Exchange of Thailand in the Property Sector. Following the 1997 financial crisis, the company like other local developers suffered dearly. The Company entered into the business rehabilitation process and on 19 June 2002, the stock resumed trading on the Stock Exchange of Thailand in “Property” Sector. The Company exited the business rehabilitation process on the Central Bankruptcy Court’s approval dated 12 April 2004. As of 31 December 2011, the company repaid all debts to creditors under the rehabilitation plan. The company has extensively expanded the business and undergone capital increases and reduction. As of 31 December 2012, the company’s registered capital stood at Bt5,961.16million or 5,961.16 million shares at Bt1 par value while the paid-up capital totaled Bt5,641.04 million or 5,641.04 million shares at Bt1 par value. ( The company registered a change in the par value from Bt6 a share to Bt1 on 6 May 2011). Major events in the past 5 years 2007: w Subscribe to capital-increase shares of Krungthep Land Public Company Limited (Krungthep Land), to maintain its stake. The company was allocated 6,000,000 shares at Bt10 apiece or Bt60,000,000. w Set up a new subsidiary, Bright Development Bangkok Company Limited, to develop Metro Sky Ratchada, with registered capital of Bt1 million, consisting of 10,000 shares (Par Bt100). The company owns 99.94% w Set up Centrepoint Shopping Mall Company Limited to develop shopping malls on land leased to the company and sub-leased to a foreign partner, which has been in the retail development business. The joint venture is registered with Bt1 million capital (10,000 shares at Bt100 par), owned 59.95% by the company and 40% by Timberline Investment Pte. Ltd.
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2008:
w Establish Property Perfect Fund (the fund), with unit trusts worth Bt520 million. The proceeds were used to w w w w
2009: 2010:
buy land and 64 units of 2-storey single houses. Five-year minimum revenue guarantee is offered to the fund. Cancel the issuance of remaining convertible debentures worth US$15 million, approved at the 1/2005 extraordinary shareholder meeting on 19 September 2005. Cancel the issuance and allocation of 39,000,000 shares, reserved for the exercise of warrants issued to directors and/or employees under the ESOP scheme. Reduce the registered capital from Bt6,213.56 million to Bt5,589.56 million, by the cancellation of 931.59 shares (Bt6 par value). Increase the registered capital from Bt5,589.56 million to Bt6,552 million, by the issuance of 160.40 million shares (Bt6 par value) for the conversion of convertible debentures as approved at the shareholder meeting.
w Invest Bt499 million for 4,990,000 capital-increase shares (Bt100 par value) of Bright Development Bangkok Company Limited, a subsidiary, to maintain the stake in the subsidiary.
w Appoint one more independent director, resulting in the number of 5 independent directors and increasing w w w w
the number of Board’s members to 12. Invest Bt200 million for 20 million capital-increase shares (Bt10 par value) of Estate Perfect Company Limited (Estate) to maintain the stake. Cancel the joint venture with Timberline Investment Pte. Ltd, which holds 40% in Centrepoint Shopping Mall Company Limited. The company bought 4,000 shares, at Bt100 apiece or a total of Bt400,000, which increased its stake in Centrepoint Shopping Mall Company Limited to 99.99%. Increase Centrerpoint Shopping Mall Company Limited’s registered capital from Bt1 million (10,000 shares at Bt100 par value) to Bt500 million. Only 30% of the registered capital is paid-up, or Bt150.7 million. This required the company’s investment of Bt149.7 million. Acquire the 100% stake in Residence Number Nine Company Limited, for the ownership of Residence Number Nine Company Limited’s land.
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ANNUAL REPORT 2012
2011:
w Invest Bt500 million in new shares of Bright Development Company Limited (100%-owned subsidiary), which w w w w w w w w w
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PROPERTY PERFECT PUBLIC COMPANY LIMITED
increased capital to Bt1,000 million. Establish U I Construction Bangkok Company Limited to provide construction services, with registered capital of Bt100 million (Bt50 million paid-up). Appoint eight persons to the new executive committee, effective on 26 February 2011. Appoint an independent director to replace the one who tendered resignation. Cancel the reserve of common shares and accordingly reduce the registered capital by Bt1,772.43 million. Split par from Bt6 to Bt1. Increase capital by issuing new common shares. Establish an affiliate , namely Perfect Prefab Company Limited, with registered capital of Bt10 million (Bt2.5 million paid-up). Establish Uniloft Service (Thailand) Company Limited as a subsidiary, with registered capital of Bt100,000. Increase Perfect Sport Club Company Limited’s registered capital by Bt4 million to Bt5 million, to finance the investment in True Coffee shops inside the projects’ clubs.
w Acquire capital-increase shares of Daidomon Group Public Company Limited, offered through a private w 2012:
placement, and tender for the remaining shares through a mandatory tender offer. Dispose all shares held in Centrepoint Shopping Mall Company Limited to Daidomon Group Public Company Limited at the price of Bt400.2 million. We Retail paid for the shares through its capital-increase shares.
w Approve the issuance of warrants for existing shareholders who subscribed for the Company’s rights offering w w w w w w
shares, as approved by shareholders at the 29 April 2011 annual meeting. Approve the allocation of new shares, as endorsed by the 2011 shareholders meeting on 29 April 2011. Win the Stock Exchange of Thailand’s selection as one of stocks for SET100 calculation Invest in Japan through subsidiary Property Perfect International Pte Ltd (PPI), which bought 69.01% shares in Share Group Co.,Ltd. (SG) and its assets, Kiroro Resort on Hokkaido Island. The assets cover a 292-rai land plot, 2 hotel buildings with 422 rooms, hotel fixtures, and ski equipment. Appoint the replacement for a resigning independent director. Pay an additional sum for U I Construction Bangkok Co.,Ltd., worth Bt50 a share, for new shares which raised the wholly-owned subsidiary’s capital to Bt100 million. Approve the purchase of 363,912,024 We Retail Public Company Limited, a subsidiary, offered at Bt1.10 apiece or a total of Bt400,303,226.40. The new shares boosted the Company’s stake in We Retail to 727,824,048 shares or 91.05%.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Overall Business of the Group The company and subsidiaries operate in the property development business, with the focus in single houses and condominiums in the Greater Bangkok. Consolidated revenue from the sale of vertical and horizontal residential development projects as of 31 December 2012 are as follows;
Real Estate Development Units
Construction Business Units
Retail Business Units
Services-Oriented Units
Property Perfect Public Company Limited
100.00% U&I Construction Bangkok Co.,Ltd.
91.05% We Retail Plc.*
100.00% Perfect Sport Club Co.,Ltd. ****
100.00% Estate Perfect Co.,Ltd.
51.00% Perfect Prefab Co.,Ltd.
100.00% Centrepoint Shopping Mall Co., Ltd.*
100.00% Uniloft Service (Thailand) Co.,Ltd.
100.00% Property Perfect International Co.,Ltd.
69.01% Share Group
69.01% Kabushiki Kaisha Kiroro Associales Co., Ltd.
20.22% Krungtep Land Plc.**
51.00% Riverside Homes Development Co.,Ltd.***
100.00% Bright Development Bangkok Co.,Ltd. 100.00% Residence Number Nine Co.,Ltd.
Note:
* Not operational yet ** Details in shareholder section *** Develop “The Pano” condominium. The remaining 49% stake is owned by a Singaporean group, represented by Fraser (Thailand) Pte Ltd. **** Rename form Perfect Satellite Service Co., Ltd.
The company’s investment in subsidiaries and affiliates can be put into 4 main categories as Real Estate Development , Construction Business Units and Services ,Retail Business Unit and Service-Oriented Units.
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Property Development Units The company and subsidiaries are mainly involved with the property development for sale. The projects involve the development of single detached houses, townhouses, and condominiums. The company and subsidiaries normally put the construction of designed houses in the hands of contractors, but the construction process will be inspected by in-house engineers and architects at all stages. The company has ventured into construction business, through the establishment of a subsidiary which mainly serves the company and subsidiaries, to help reduce the construction cost. This is on top of the contracts with outside construction companies. The Company also set up new subsidiaries to support the development of community malls, office buildings and commercial properties and to invest in the property development business overseas. Details are as follows;
Property Perfect PuÏlic Company ³imited The Company Developing housing estates and condominiums. As of 31 December 2012, a total of 33 projects are under development with outstanding value of Bt28,658 million.
Estate Perfect Co. ³td. SuÏsidiary Estate Perfect Company Limited, (“Estate”) is located at 100/1 Varasombat Bldg., Floor 17th, Rama IX Road, Huay Khwang, Bangkok. It was established in 1994, to develop single houses and townhouses. Its new projects will be of small scale, with focus on potential locations. Sale of Estate’s 5 projects is underway, and the remaining value of the unsold units is Bt3,153million. They are Perfect Place Sukhumvit 77-Suvarnabhumi, Perfect Park Suvarnabhumi phases 1 and 2, The Villa Ramintra-Outer-Ring, Modi Vill(Townhome) Ladkrabang and Modi villa Pinklao-Outer-Ring As of 31 December 2009, Estate was registered with Bt1,000 million of capital, all paid-up, consisting of 100 million shares at Bt10 par value. The company owns the entire 100% stake. Estate is now capitalized at Bt1,200 million, following the Board of Directors’ resolution in January 2010 to raise the capital from Bt1,000 million to Bt1,200 million. In January 2013, the company then issued 20,000,000 new shares at Bt10 par while the paid-up capital totaled Bt,200 million. The company now owns 100% of Estate. Estate’s 4 directors are: Name Position 1. Mr.Chainid Ngow-Sirimanee Director 2. Mr.Pramote Rermyindee Director 3. Mr.Pornswat Katechulasriroj Director 4. Mr.Nantachart Kliebphipat Director
Bright Development Bangkok Co. ³td. SuÏsidiary Bright Development Bangkok Co.,Ltd. (“Bright”) is Located at 100/1 Vorasombat Building (17th flr), Rama IX Road, Huay Kwang, Bangkok, Bright Development was established on 2007 for condominium development. Bright Development is capitalized at Bt1 million. As of 31 December 2009, Bright’s registered capital increased by Bt499 million to Bt500 million from Bt1 million. In February 2011, Bright approved to raise the capital from Bt500 million to Bt1,000 million, all paid up. The company holds 100% in Bright. In 31 December 2012, there were 9 selling projects, of which remaining value is Bt5,958 million - Metro Sky Ratchada, iCondo Ngamwongwan phase1-2, iCondo Sukhapiban 2, iCondo Sukhumvit 105, and iCondo Sukhumvit 103, iCondo Petchkasem 39 , iCondo Kaset and Metro Sky Kaset.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Bright embarked on the project to develop premium dormitories, specifically for students, under “Uniloft” brand. The project to create “extraordinary campus living” experience focuses on famous universities. At present, it is developing two Uniloft projects which are valued at Bt1,200 million – Uniloft near Chiangmai University in Chiang Mai and Uniloft near Mahidol University in Salaya, Nakhon Pathom. As both will gain from rental revenue, the company has a plan to sell the projects to a property fund, which should be established in 2013 In 2013, Bright plans 3 condominium projects: one iCondo worth Bt2,000 million and two Uniloft-condominiums near universities with combined value of Bt2,000 million. Bright’s 4 directors are; Name Position 1. Mr.Chainid Ngow-Sirimanee Director 2. Mr.Pramote Rermyindee Director 3. Mr.Pornswat Katechulasriroj Director 4. Mr.Wicharn Siriwetwarawut Director
Residence NumÏer Nine Company ³imited . SuÏsidiary Residence Number Nine Company Limited (“Residence”) is located at 100/1 Vorasombat Building (17th flr), Rama IX Road, Huay Kwang, Bangkok, is capitalized at Bt1,000 million with 10 million shares at Bt100 par value. Owned 100% by the company, Residence focuses on low-rise residential development. Established in 2008 and In January 2010 , Residence becomes a subsidiary as the company. It is capitalized at Bt1,0000 million or 100% from old shareholders at Bt507 million. Residence’s original shareholders had no connection with the company or the transaction. Residence was taken over as the company planned to develop single houses and townhouses on a 170-rai plot in Bang Buathong, Nonthaburi, which is the only piece of asset of Residence. Residence’s 3 projects are now marketed - The Villa Bangbuathong ,Perfect Park Bangbuathong which are duplex house and single house in Bangbuathong area. And Modi Villa Ladkrabang project which comprise single houses, duplex houses and townhouses. - with combined remaining value of Bt1,784 million.
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In 2013, Residence Plan to launch a new project: Modi Villa Bangbauthong worth Bt1,080 million. Residence’s 3 directors are: Name Position 1. Mr.Wicharn Siriwetwarawut Director 2. Mr.Sanpetch Sukkasem Director 3. Mr.Pornchai Ketlek Director
Property Perfect International Pte.³td. SuÏsidiary Property Perfect International Pte.Ltd. (PPI), located at 1 Raffles Place, #28-02 One Raffles Place, Singapore 048616, established on 12 July 2012, has paid-up capital of 1 Singapore dollar. Owned 100% by the Company, PPI will invest in overseas property development business. At the 4/2012 meeting on 27 August 2012, the Board of Directors approved PPI’s investment in Share Group Co.,Ltd. (SG)’s common shares. Established in Japan, SG operates a property development and hotel businesses in Japan. The 8,200 capital-increase shares were bought at 9,033 yen apiece or a total of 74,070,600 yen (see detail on financial statement note No.13), approximately Bt29,998,593 (at the exchange rate of 100 yen for Bt40.50). PPI also bought 3,200 shares from SG’s existing shareholders at the same price for a total of 28,905,600 yen, approximately Bt11,706,768. The 11,400 shares cost about Bt41,705,361 in total. After the recapitalization, SG’s capital rose to 923,070,000 yen (30,000 common shares). Of that, 252,173,640 yen (16,520 shares) were paid up, showing PPI’s 69.01% stake in SG. PPI’s 3 directors are: Name Position 1. Dr. Tawatchai Nakata Director 2. Mr. Chainid Ngow-Sirimanee Director 3. Mr. Chong Weiyi Director
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Share Group Co. ³td. SuÏsidiary of Property Perfect International Pte. ³td. Share Group Co.,Ltd. (SG), located at 30-3, Sarugaku-cho, Shibuya-ku, Tokyo, Japan, is incorporated under the Japanese law for the investment in property development and hotel business. Its registered capital is 923,070,000 yen (30,000 common shares) while 252,173,640 yen (16,520 shares are paid up). PPI’s holding of 11,400 shares represent 69.01%. At the 4/2012 meeting on 27 August 2012, the Board of Directors approved SG’s investment in all shares of and loan claims against Kabushiki Kaisha Kiroro Associates Co.,Ltd. (KA), from Mitsui Fudosan Resort Co.,Ltd. The 100% shares were bought at the cost of 1 yen, or approximately Bt0.4050 (at the exchange rate of 100 yen for Bt40.50) . Claims on the loan to KA are bought from Mitsui Fudosan Co.,Ltd at the cost of 160,000,000 yen or Bt64,800,000. The claims cover the principal of 1,300,000,000 yen and interest of 599,058 yen, or a total of 1,300,599,058 yen or Bt526,742,619. The Board also approved SG’s purchase of Kiroro Resort from Mitsui Fudosan Resort Co.,Ltd for about Bt490 million. Kiroro Resort is a ski resort on Hokkaido, Japan, owning a 292rai land plot, a 422-room hotel (with average 60% occupancy rate), and ski equipment. Plus transfer taxes of about Bt280 million, the purchase cost a total of approximately Bt770 million. The Company plans development on the 292-rai land plot on Hokkaido, Japan thanks to its business potential. The investment plan is under study. After the transaction, late 2012 the Company took control of the operations of 422-room Kiroro Resort. Later, Thai Airways International operated 3 weekly flights to Sapporo, Hokkaido, and a Hokkaido tourism promotion article was published in THAI’s Sawasdee Magazine’s September 2012 edition. After the takeover, a press conference was hosted to announce the new owner of Kiroro Resort. With the plan to shed no employee, the transaction attracted Japanese media attention as well as attention from the Tokyo Stock Exchange. For a professional management, the Company is in the process of appointing a world-class operator for the property and devising the appropriate management strategies. SG’s 6 directors are: Name Position 1. Dr. Tawatchai Nakata Director 2. Mr. Chainid Ngow-Sirimanee Director
16
3. Mr. Jesd Jesdpiyawong Director 4. Mr. Hajime Mori Director 5. Mr. Seiichi Mizuno Director 6. Mr. Kelly Tanagumi Miyashita Director
²aÏushiki ²aisha ²iroro ¨ssociates Co. ³td. ²¨ SuÏsidiary of Share Group Co. ³td. Kabushiki Kaisha Kiroro Associates Co., Ltd. (“KA”) located at 128-1, Tokiwa, Akaigawa-mura, Yoichigun, Hokkaido, Japan, is incorporated under the Japanese law for the investment in hotel management. Its registered capital is 2,460,000,000 yen (2,000 common shares) while 750,000,000 yen or Bt303,750,000 (610 shares) are paid up. After reorganized investment by Share Group Co., Ltd. (SG) (Detail as above). SG owns the entire 100% stake. KA’s 3 directors are: Name Position 1. Mr. Chainid Ngow-Sirimanee Director 2. Mr. Hajime Mori Director 3. Mr. Mikikazu Sakurai Director
²rungthep ³and PuÏlic Company ³imited ¨ffiliate Krungthep Land Public Company Limited (“Krungthep Land”), was established in 1984, located at 100/1 Vorasombat Building (21st flr.), Rama IX Road, Huay Kwang, Bangkok. Krungthep Land is a property development company focusing on Bangkok and peripheral provinces. In 2004, the company raised the registered capital form Bt500 million to Bt1,000 million and changed the par value from Bt100 to Bt10, in preparation for business expansion. In July 2004, it forged equity participation with Fraser Neave from Singapore, through Fraser (Thailand) Pte. Ltd, to develop The Pano - a condominium project by the Chao Phraya River. The condominium on Rama III Road is developed by Riverside Homes Development Company Limited. On 14 July 2005, Krungthep Land was transformed to a public company and in November 2005 it raised the capital from Bt1,000 million to Bt1,700 million. Fraser Neave from Singapore, through Fraser (Thailand) Pte. Ltd, then bought 50 million new shares or 33% of total. This reduced Property Perfect Public Company Limited’s stake to 20%. On 22 November 2006, there was a resolution to reduce Krungthep Land’s registered capital from Bt1,700 million to Bt1,500 million, and then to raise the capital from Bt1,500 million to Bt2,100 million. New shares were issued to existing shareholders at the price of Bt10 apiece. Krungthep Land’s shareholders at the 1/2007 extraordinary meeting approved the capital reduction from Bt2,100 million to Bt1,780 million. They also approved the Bt450 million capital increase, through the issuance of 45 million shares at Bt10 par to accommodate warrant exercise. This increased the registered capital to Bt2,230 million. Krungthep Land’s shareholders at the 1/2008 extraordinary meeting approved the issuance of US dollar-denominated convertible debentures at the value of Bt623.25 million, for sale to foreign investors. On 31 January 2008, the debentures were issued to Asia Investment International Limited, through the underwriting by Lombard Investment Inc.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
In 2010, the company issued name-bearing secured unsubordinated bonds worth Bt1,000 million, to institutional investors or high networth investors. The bond issue, with trustee, was rated “AA+” by Fitch Ratings (Thailand) Company Limited. In November 2011, Krungthep Land amended the issuance criteria to allow a call option. It redeemed all the bonds in December 2011. (See detail on financial statement note No.14) Krungthep Land is capitalized at Bt2,230 million (paid-up at Bt1,780 million or 178 million shares at Bt10 par value). The company owns 20.22% in the company. Shareholders of Krungthep Land are as follows: Shareholders No. of shares % of total 1.Fraser (Thailand) Pte. Ltd. 72,000,000 40.45 2.Property Perfect Plc. 35,999,964 20.22 3.Dr.Bichit Rattakul 5,000,000 2.81 4.Mr.Wichai Thongtang 15,000,000 8.43 5.Mrs.Nualla-or Khunphlin 15,000,000 8.43 6.Mrs.Nada Nimkiatkhachorn 14,500,000 8.15 7.Mrs.Porntip Hembree 20,000,000 11.24 8.Minor shareholders 500,036 0.28 Total 178,000,000 100.00 Krungthep Land’s board of directors consists 12 members as follows: Name Position 1. Dr.Bichit Rattakul Chairman 2. Mr.Thongchai Kunakornporamat Director, Chief Executive Officer 3. Mrs.Uraiwan Bhatarakarnt Director, Executive director 4. Mr.Chan Kin Fai Director, Executive director /1 5. Mr.Chainid Ngow-Sirimanee Director 6. Ms.Wilawan Leongnarktongdee Director 7. Mr.Seang Fuke Seng Director 8. Mr.Chia khong Shoong Director 9. Mr.Lim Ee Seng Director 10. Mr.Prasong Vararattanakul Director, Independent director, Chairman of Audit Committee 11. Mr.Keangkai Jiwanant Director, Independent director, Audit Committee 12. Mrs.Anchalee Chavanit Director, Independent director, Audit Committee Note : /1 Mr. Chainid Ngow-Sirimanee is a director of the company and he is a director of Krungthep Land as the company owns a 20.22% in the Krungthep Land. Mr. Chainid is a shareholder and a director of (1) Property Perfect Public Company Limited who holds 46,900,000 shares or 0.83% as of 31 December 2012 in the company and (2) a shareholder of Thai Property Public Company Limited (formerly Rattana Real Estate Public Company Limited), who owns 29,362,500 shares or 1.04% as of 31 December 2012 in Thai Property. His shareholding in Thai Property is a personal matter and has no connection with Property Perfect Public Company Limited.
18
Construction Business Unit
U I Construction Bangkok Company ³imited U I Construction Bangkok Company Limited (“U I”), is located at 100/89 Vongvanich Building Floor 27, Rama IX Road, Huay Kwang, Bankgok. Established in April 2011, it has Bt100 million in registered capital, consisting 1 million shares (Bt100 par value). Owning 100%, the Company initially paid 50% of the capital and paid the remaining half in November 2012. Paid-up capital is now Bt100 million. U I’s main objective is to offer services to construct single houses, duplex houses, townhouses and condominiums for the company and subsidiaries. As it will be securing direct contracts from the group, this will promise construction flexibility for the group and allow the company a better management on supply chain. The company also select sub-contractor to control the construction cost and construction period, as well as ensure effective control on the construction volume and quality. U I’s 3 directors are; Name Position 1. Mr. Manit Yukkasemwong Director 2. Mr. Thamrong Plookchitsom Director 3. Mr. Sumeth Suwajanakorn Director
Perfect PrefaÏ Company ³imited Perfect Prefab Company Limited (“Perfect Prefab”) is located at 100/1 Vorasombat Building Floor 10th, Rama IX Road, Huay Kwang, Bangkok. Established in June 2011, it has Bt10 million in registered capital, with Bt2.5 million paid-up. The company owns 51% in Perfect Prefab, and the rest is held by Centre of Standard Precast Company Limited – which has experience in this business and has supplied prefab materials to the group for over 5 years owns 49% in the company. The partner has no connection whatsoever with the company. The company established to manufacturer and install prefab structures, which are parts of single houses, townhouses and project fences, as well as condominiums. The automated production system is to ensure no effect from labor shortage. The company expects to benefit from the joint venture’s prefab technology. It now manufactures prefab materials for the Company’s projects, with the capacity to supply materials for the construction of 800 housing units per year. Perfect Prefab’s 5 directors are; Name Position 1. Mr. Wicharn Siriwetwarawut Director 2. Mr. Vorasak Chakrapiyanant Director 3. Mr. Vichaya Watananukit Director 4. Mr. Phuwit Phaengsuk Director 5. Mr. Kongsak Kaewsuriyathamrong Director
19
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Retail Ïusiness unit
¾e Retail PuÏlic Company ³imited SuÏsidiary We Retail Public Company Limited (“We Retail”) is located at 100/1 Vorasombat Building Floor 17th , Rama IX Road, Huay Kwang, Bangkok. Formerly named Daidomon Group Public Company Limited, the company was renamed on 24 November 2011. Its business objective is to develop a shopping centre, office buildings and commercial rental projects. It is capitalized at Bt4,131,549,100 million, with Bt2,065,774,550 paid-up or 413,154,910 shares at Bt5 par value. The company bought We Retail’s 363,818,182 shares at Bt1.10 apiece or a total of Bt400.2 million, through a swap with shares of Centrepoint Shopping Mall Company Limited (Centrepoint)of which paid-up capital stood at Bt400.2 million. The share swap on 16 December 2011 allowed the company to hold 88.06% in We Retail, while the remaining 11.94% is held by existing shareholders. In effect, Centrepoint Shopping Mall Co., Ltd. turned to a subsidiary of We Retail. The high stake in We Retail forced the company to make a mandatory tender offer for the remaining shares of We Retail at Bt1.14 a share. The tender offer ran from 4 January 2012 to 7 February 2012. At the end, We Retail’s shareholders offered to sell 93,842 shares or 0.02%. This increased the company’s stake in We Retail to 88.08%, or 363,912,024 shares. As the company bought We Retail’s shares at Bt1.10 apiece, through a swap with shares of Centrepoint. The transaction was based on We Retail’s book value after the restructuring (We Retail’s book value plus book value of Center Point and We Retail after capital increase) plus a slight premium. The transaction should benefit the company in the following ways; 1) The company can operate the shopping mall, office building and commercial rental development business through a unit which is clearly separated from the company’s residential development business. 2) As We Retail is listed on the Stock Exchange of Thailand, it could mobilize funds to efficiently finance the development projects. We Retail’s shareholders at the meeting on 11 November 2011 approved the Bt776,973,092 capital increase, through a right offering. No more than 413,154,910 shares (Bt5 par value) were issued to existing shareholders at the ratio of 1 old share for one new share at Bt1.10 apiece. The recapitalization took place during 2 July 2012 and 6 July 2012, with the subscription for 386,170,664 shares for Bt424,787,730.40. We Retail’s registered capital is boosted to Bt4,131,549,100, with 826,309,820 common shares (Bt5 par value), with Bt3,996,627,870 paid-up or 799,325,574 shares at Bt5 par value. After the recapitalization, the Company holds 727,824,048 shares in We Retail, or 91.05%. The plan to develop three open shopping complexes, under the community mall concept, is under a study and preparation process for 3 locations - the East and West of Bangkok as well as on Ramintra Road. Branded as Metro East Town, Metro West Town and Metro Up Town, they will have combined space of 93,127 square meters on total area of 39 rai. The malls are expected to open late 2014. We Retail’s 7 directors are; Name Position 1. Dr.Tawatchai Nakhata Chairman /1 Director and Deputy Chairman 2. Mr.Chainid Ngow-Sirimanee 3. Mr.Kampol Tatiyawee Director and Chief Executive Officer 4. Mr.Pramote Rermyindee Director 5. Mr.Cherdsak Kookiatnunt Independent Director, Chairman of Audit Committee 6. Mr.Chaiyakorn Boonlop Independent Director, Audit Committee 7. Mr.Sukpoj Chotikawanitch Independent Director, Audit Committee
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Centrepoint Shopping Mall Co. ³td. Centrepoint SuÏsidiaries of ¾e Retail Plc. Centrepoint Shopping Mall Co.,Ltd.(“Centrepoint”) is located at 100/1 Vorasombat Building 17th flr., Rama IX Road, Huay Kwang, Bangkok. Established in December 2007 . it was capitalized at Bt1,000,000, at Bt100 apiece ,all paid-up. Centrepoint focuses on commercial development like shopping malls and rental office building. The company owns 59.99% in Centrepoint, and owning the other 40% is Timberline Investments Pte. Ltd. (100%-owned by Arangannal S/O Kathamuthu which has no connection with the company) The Board of Directors meeting on January 2010 approved the purchase of 4,000 shares or 40% of Centre point from Timberline Investments Pte. Ltd, which increased the company’s shares to 100%, to turn Centrepoint into a subsidiary. The Board also approved the capital increase in the subsidiary by Bt499 million from Bt1 million. Centrepoint’s registered capital is now Bt500 million and the paid-up capital by Bt30 apiece or a total of Bt149.7 million was paid-up. This raised Centre point’s paid-up capital to Bt150.7 million. In September 2011, additional Bt30-apiece payment for new shares was called, to raise the capital by Bt149.7 million. Another Bt20-apiece payment was called in October 2011 for a total of Bt99.8 million. These raised the subsidiary’s paid-up capital to Bt400.20 million. Then, the Board approved the sell-out of all 5 million shares in Centrepoint to Daidomon Group Public Company Limited worth Bt400.20 million on 16 December 2011, turning Centrepoint into a subsidiary of Daidomon Group. In return, Daidomon Group issued shares accounting for 88.06% to the Company. (Centrepoint was renamed to V Retail Public Company Limited on 24 November 2011). Centrepoint owns the leasing rights of a land plot on the east side of Ratchapisek Road, planned for the development of a closed shopping mall and an office building. In August 2012, it won the leasing right for an opposite land plot on the west side of Ratchapisek Road, which is planned for the development of a closed shopping mall. The feasibility study of the investment plan is underway. Centrepoint ’s 2 directors are: Name Position 1. Mr.Chainid Ngow-Sirimanee Director 2. Mr.Pramote Remyindee Director
21
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Services-oriented units
Perfect Sport CluÏ Company ³imited Perfect Sport Club Company Limited (“Perfect sport Club”) is located at 100/52 Vongvanich B Building (19th flr.), Rama IX Road, Huay Kwang, Bangkok, was established in February 2003. it was capitalized at Bt1 million. In September 2011, The company resolved to raise the registered capital by Bt4,000,000 to Bt5,000,000, through the issuance of 40,000 new shares at Bt100 par value. The capital is fully paid-up. It is 100% owned by the company. It aims to use the new capital to buy True Coffee franchise and open the coffee shop at the sport clubs, as part of its business plan. Formerly called Perfect Satellite Services Company Limited, Perfect Sport Club operates fitness clubs and sport clubs of the group. At present, 13 sport clubs exist. Perfect Sport Club ’s 5 directors are: Name Position 1. Mr.Phairat Senachak Director 2. Ms.Rassamee Metavikul Director 3. Mr.Nantachart Kiebpipat * Director 4. 2,Lt. Pratomporn Nakata Director 5. Mr.Krittapas Pongpakawat Director Note: Mr. Nantachart Kliebphipat appointed to a director replaced Mr. Tongchai Piyasantiwong, who resigned on October 2012
22
Uniloft Service Thailand Company ³imited Uniloft Service (Thailand) Company Limited (“Uniloft Service”) is located at 100/1 Vorasombat Building Floor 17th , Rama IX Road, Huay Kwang, Bangkok. Established in July 2011, it has Bt100,000 in registered capital. It is 99.70% owned by the company. Uniloft Service operates a serviced apartment and management services for the group’s real estate projects Uniloft’s 3 Directors are: Name Position 1. Mr.Saranyu Ngow-Sirimanee Director 2. Mr.Natthaphon Sueb-Am Director 3. Mr.Prathompob Intr-Bumrong Director Total revenue structure from sales Ïy product type The company’s main revenue derives from sales of land and houses, most of which are single-detached houses. The company’s revenue structure over the past three years were as follows: Consolidated financial statements 2012 2011 2010 MB. % MB. % MB. %
Revenue from sales of land and houses 7,489.5 Revenue from sales of condominium units 1,180.6 Revenue from sales of land held for development 147.9 Revenue from Hotel Business 275.7 Other revenues Receivable interest 11.2 Revenue from deposits 8.9 Reversal of allowance for loss on diminution in value of projects Revenue from bargain negotiation 38.9 Others 118.9 Total revenue 9,271.6
80.8 % 12.7 % 1.6 % 3.0 %
6,925.7 1,074.2 81.4 -
84.2% 13.1% 1.0% -
7,002.7 777.7 835.5 -
80.5% 8.9% 9.6% -
0.1 % 0.1 %
9.9 8.5
0.1% 0.1%
7.3 4.3
0.1% -
0.4 % 1.3 % 100.0%
37.0
0.5%
-
-
84.1 8,220.8
1.0% 100.0%
76.4 8,703.9
0.9% 100.0%
During 2010-2012, the company’s consolidated land and house sale revenue accounted for 80.5%, 84.2% and 80.8% of total revenue, respectively. Revenue from condominium sale accounted for 8.9%, 13.1% and 12.7% of total revenue, respectively. And revenue from sales of land held for development accounted for 9.6%, 1.0% and 1.6% of total revenue, respectively. In the fourth quarter of 2012, the Company invested in an overseas hotel business unit, which generated Bt275.7 million in income. The consolidated account also showed repatriation of income - Bt58 million, Bt25 million and Bt28 million, respectively during 2010-2012 - from affiliated, which was included in “Profit before financial expense and corporate tax” item
23
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
House and condominium sale revenue from various projects are as follows; ³and and Houses Sales Revenue Structure Ïy Product Type Project
Product Type
Brand “Perfect Masterpiece” Maneeya Masterpiece Exclusive Zone SDH Perfect Masterpiece Ekamai-RamIntra SDH Perfect Masterpiece Rattanathibet SDH Perfect Masterpiece Ramkhamhaeng -Suvarnnabhumi SDH Perfect Masterpiece Rama IX SDH Perfect Masterpiece Ratchapruek SDH Perfect Masterpiece Ramkhamhaeng SDH Perfect Masterpiece Rangsit SDH Perfect Masterpiece Sukhumvit 77** SDH Brand “Perfect Place” Perfect Place Rattanathibet SDH/Land Perfect Place Rattanathibet Phase1 SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (The Private Zone) SDH Perfect Place Rattanathibet Phase 2 SDH Perfect Place Ratchapruek SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (2) SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (The Lake Zone) SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (The Lake Zone2) SDH Perfect Place Rangsit SDH Perfect Place Ramkhamhaeng-Suvarnabhumi (Exclusive zone) SDH Perfect Place Sukhumvit 77-Suvarnabhumi** SDH Brand “Maneerin” and “Perfect Park” Maneerin Lake Park Ratchapruek -Tiwanon SDH/Land Maneerin Park 2 Rangsit SDH Perfect Park Ramkhamhaeng-Suvarnabhumi SDH Perfect Park Rama V- Bangyai SDH Perfect Park Rangsit SDH
24
2012 MB.
2011 %
MB.
2010 %
MB.
%
6 285
4%
43 99 177
1% 1% 3%
284 320
4% 4%
1,125 249 453 187 186
15% 3% 6% 3% 3%
859 107 27
12% 2% -
84 928 12 66
1% 14% 1%
13
-
69
1%
58 163
1% 2%
533 620 280
7% 8% 4%
49 434 579 268
1% 6% 8% 4%
94 528 493 139
1% 7% 7% 2%
31
-
133
2%
338
5%
150
2%
76 46
1% 1%
-
-
51 505
1% 7%
415
6%
503
7%
92 4 539 102
1% 7% 2%
128 2 5 601 113
2% 9% 2%
231 663 -
3% 10% -
Project
Perfect Park Suvarnabhumi ** Perfect Park Bangbuathong *** Brand “The Villa” / “The Metro” / “Modi Villa” The Villa Rattanathibet The Metro RamaIX The Metro Sathorn The Villa Ramkhamhaeng-Suvarnabhumi** The Villa Ramintra Outer-Ring ** Modi Villa Townhome Ladkrabang ** Modi Villa Ladkrabang-Suvarnabhumi** Modi Villa Pinklao-Outer Ring** The Villa Bangbuathong *** Other Maneeya 4 Nantana Garden Teparak Nantana Garden1 Changwattana Perfect Place phase 2-3 Ramkhamhaeng-Suvarnabhumi Maneerin Masterpiece Rangsit Bright Shophouse Ramkhamhaeng**** Total Revenue from the Sale of land and houses
Product Type
2012 MB.
2011 %
MB.
2010 %
MB.
%
SDH SDH
373 205
5% 3%
323 273
5% 4%
285 -
4% -
TH TH TH TH TH TH TH TH TH
322 364 58 57 281 24 26 102 213
4% 5% 1% 1% 4% 1% 3%
295 595 266 375 310 243
4% 7% 4% 5% 5% 4%
595 438 480 202 60 38
9% 6% 7% 3% 1% 1%
SDH TH TH Land
-
-
12 3 1 -
-
1
-
SDH SDH SDH
30 15 8 7,489
100%
6,926
100%
7,003
100%
Remark : SDH = Single Detached House, TH = Townhouse, Land = Land ** Developed by 100%-owned subsidiary Estate Perfect Co., Ltd . *** Developed by 100%-owned subsidies Residence Number Nine Co., Ltd. **** Developed by 100%-owned subsidies Bright Development Bangkok Co., Ltd.
25
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
As shown in the balance sheet, sales revenue of Property Perfect in 2010-2012are Bt5,849million, Bt4,960million and Bt5,509million, respectively. In the same period, subsidiaries’ revenue are Bt1,154million , Bt1,965million and Bt 1,980 million, respectively. Sales of Condominium Units Revenue Structure Ïy Product type Project
Brand “Metro Park” Metro Park Sathorn Brand “Metro Sky” Metro Sky Ratchada**** Total Revenue from the Sale of Condominium Units
Product Type
2012 MB.
2011 %
MB.
2010 %
CONDO
574
48.6%
579
53.9%
CONDO
606
51.4%
495
46.1%
1,180 100.0%
1,074 100.0%
MB.
%
778 100.0% -
-
778 100.0%
Note: Condo = Condominium **** Developed by Bright Development Bangkok Co. ,Ltd, 100% owned by the Company.
Revenue from sales of condominium units presented in the consolidated financial statements came from total revenue from projects developed by Property Perfect Public Company Limited in 2010-2012 are Bt778million, Bt579million and Bt574million, respectively. in 2006. In 2011-2012, subsidiaries’ revenue are Bt495million and Bt606million, respectively.
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Shareholder Structure
and Management
1. Shareholder Major shareholders A) The first 10 largest shareholders as of 31 December 2012 are; Rank
1 2 3 4 5 6 7 8 9 10
Name
SOMERS (U.K.) LIMITED/1 JAPAN ASIA GROUP LIMITED /2 Natee International Law Office Company Limited /3 Mrs.Sumalee Ongjarit Andaman Long Beach Resort Co., Ltd. /4 Miss Sumonmas Lipisuntorn Finansa Life Assurance Co.,Ltd. /5 Mr.Pramote Remyindee Mr.Denchai Pinkarnjanapaibool Mr.Vidhya Nativivat
No. of shares
%
600,000,000 560,358,439 291,494,374 228,481,874 187,402,900 158,400,000 121,415,000 80,310,000 78,000,000 75,000,000
10.64 9.93 5.17 4.05 3.32 2.81 2.15 1.42 1.38 1.33
Data from Thailand Securities Depository Co.,Ltd. Note /1
Somers (U.K.) Limited is a juristic entity registered in the UK, according to the information from Hong Kong Shanghai Banking Corporation (Thailand), the custodian. None of the Company’s executives or parties related to the Company and subsidiaries is connected to Somers (U.K.) Limited. Aside, Somers (U.K.) Limited has no share or establishes any connection with the Company’s subsidiaries.
/2
Japan Asia Group Company Limited emerges as a shareholder, as the creditor in the Rehabilitation Plan converted debts to equity in line with the Rehabilitation Plan. Japan Asia Group Limited is registered in the British Virgin Islands, a sovereign territory of the United Kingdom, operating financial services and investment. Under the British Virgin laws, the information of shareholders, registered capital and operating results of companies incorporated there is available only to authorized director, which in the case of Japan Asia Group Limited is Star Mark Enterprises Limited. In quest for the information on its shareholders, the company learns that Japan Asia Group Company Limited’s ultimate shareholder is Mrs. Wai Ching Chung, a resident of Hong Kong, the People’s Republic of China. There is no connection between Japan Asia Group Limited and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship.
27
ANNUAL REPORT 2012 /3
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Natee International Law Office Company Limited emerged as a shareholder, as a lawful representative of a creditor in the Rehabilitation Plan. Before the plan was terminated (the plan exit), the company was required to issue common shares to creditors entitled to debt to equity conversion as debt repayment. Then, Lowe’s Partner Investment Company Limited and Glorybye Associates Company Limited filed petitions to the Central Bankruptcy Court, saying that they own debt claims of a creditor which was entitled for the issued shares and asking for the court’s judgment. The company thus assigned Natee International Law Office to represent the creditor. The law office was instructed to place the allocated shares at the Court. The shares would be given to the ultimate representative upon the Court’s decision on the case. Natee International Law Office provides legal and accounting services. On 25 October 2005, the Central Bankruptcy Court resolved that Glorybye Associates Company Limited was the lawful representative and entitled to the shares. The case is under an appeal process and is not yet through. Glorybye Associates Company Limited as such does not appear as a shareholder of the company as it has not yet received the shares from the Court. Glorybye Associates Company Limited is registered in Samoa as an investment company, having United Continental Investors Limited as a director and executive. There is no connection between Glorybye Associates Company Limited and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship. Until 31 January 2012, the shareholder remains on the list.
/4
Andaman Longbeach Resort Company Limited is 100% owned by Resort Holding Company Limited, which is in turned owned 45% by Wahkit Finance Limited. Property Perfect Public Company Limited was informed by Andaman Longbeach Resort (Andaman)’s management that its indirect major shareholder, Wahkit Finance Limited, has no connection with Japan Asia Group Limited and/or MJL Intertrade Company Limited and/or Natee International Law Office Limited. Other shareholders of Resort Holding are Mr. Methee Tanmanatrakul (45%) and Mr. Chaiwat Aswintrangkul (10%). Mr Methee and Mr. Chaiwat are authorized to sign obligations involving Andaman and Resort Holding. There is no connection between Andaman and the company in terms of major shareholders, directors or executives. There is no “nominee account” relationship. (Mrs. Vipa Tanmanatrakul owns 1,123,200 shares of Property Perfect Public Company Limited in her personal account, which is not included in Andaman’s shareholding.)
/5
Finansa Life Insurance Company Limited is a Thai company which purchased the Company’s shares. None of the Company’s executives or parties related to the Company and subsidiaries is connected to Finansa Life Insurance Company Limited. Finansa Life Insurance Company Limited does not hold a share or establishes any connection with the Company’s subsidiaries.
B) Impact on shares or voting rights from NVDR As of 31 December 2012, Thai NVDR Company Limited holds 46,298,356 shares of the company, or 0.82% of paid-up common shares. As no voting right is given to Thai NVDR (except in the case of delisting from the Stock Exchange of Thailand), at the shareholder meeting, shareholders in general enjoy a 0.83% increase in voting rights. For the latest information on shares held by Thai NVDR, go to the exchange’s website at www.set.or.th 2. Management Management Structure The company’s management structure contains one board of directors and five subcommittees. They are directors, Audit Committee, Nominating Committee, Remuneration and Human Resources Committee, Risk Management Committee and Executive Board. Details are as follows:
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1. The Board of Directors As of 31 December 2012, the board consists of 12 directors as follow: No. 1 2 3 4 5 6 7 8 9 10 11 12
Name Title Dr.Tawatchai Nakhata Chairman Mr.Virayuk Puntupetch Deputy Chairman and Independent Director Mr.Chainid Ngow-Sirimanee Director and Chief Executive Officer Mr.Phairat Senachack Director Mr.Vidhya Nativivat Director Ms.Sirirat Wongwattana Director Mr.Ooi Boon Aun Director Dr.Somsak Toruksa Director / Independent Director and Audit Committee Dr.Thamnoon Ananthothai Director / Independent Director and Audit Committee Mrs.Nuanual Swasdikula-Na-Ayudhaya Director / Independent Director Mr.Krish Follett Director / Independent Director and Chairman of Audit Committee Mr.Anuwat Maytheewibulwut * Director / Independent Director
With Mr. Pramote Rermyindee as secretary of the board Note: *Mr. Anuwat Maytheewibulwut appointed in accordance with a resolution of the company’s Board of Directors 5/2012 on 12 November 2012 replace to Mr. Wanchai Thanittiraporn who resigned on 21 September 2012.
29
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Authorised directors Authorized signatory directors are1) Dr.Tawatchai Nakhata and Mr.Chainid Ngow-Sirimanee are duly authorized to sign documents and affix the company’s seal.2) Any one of the following directors - Dr.Tawatchai Nakhata or Mr.Chainid Ngow-Sirimanee - is authorized to co-sign documents with one the these directors - Mr.Phairat Senachack or Miss Sirirat Wongwattana - and affix the company’s seal. 3) Dr.Tawatchai Nakhata or Mr.Chainid Ngow-Sirimanee or Mr.Phairat Senachack or Ms.Sirirat Wongwattana can sign and affix the company’s seal on the matters involving; (1) Commerce Ministry and related units (2) Revenue Department and related units (3) Lands Department and related units (4) Department of Public Works and Town Country Planning and related units (5) Bangkok Metropolitan Administration, Pattaya City and related units (6) Municipality, provincial administrative organizations and tambon administration organizations (7) Government agencies, or state enterprises or private organizations involved in the provision of water, electricity, telephone, postal and internet services, which are to approve service transfers, down payments settlement, down payment return, and down payment transfers. The shareholders meeting or the Board can identify the directors with the authority to sign and affix the company’s seal. Board of Directors’ authority and scope of responsibility The Board of Directors is authorized to make decisions and ensure that the company’s operations follow the objectives, regulations, shareholders’ resolutions and legal conditions. Its authority does not cover the decisions which must be approved by shareholders as prescribed by the Securities and Exchange Commission and the Stock Exchange of Thailand. Under the company’s regulations, the Board of Directors is authorized to appoint the executive board which will monitor the daily operations of the company under the guidelines and budget approved by the Board of Directors and handle other tasks bestowed by the Board of Directors. The executive board can approve the decisions within its power granted by the Board of Directors or have to propose the issues beyond its power for the Board of Directors’ consideration. The regulations also empower the Board of Directors to appoint other officers or other working committees to assist the executive board.
30
2. Audit Committee As of 31 December 2012, the Audit Committee consists of 3 independent directors. No. Name Title 1 Mr.Krish Follett Chairman of the Audit Committee 2 Dr.Somsak Toruksa Auditing Committee 3 Dr.Thamnoon Ananthothai Auditing Committee With Ms.Doungporn Rermyindee as the secretary.
Note: * Possessing expertise in accounting (See biography of directors, executives and authorized individuals)
Audit Committee’s authority and scope of responsibility 1. Supervise the company’s operations to ensure honesty, transparency, and responsibility to shareholders. 2. Ensure that the executive board and executives handle their responsibilities in an accurate, complete and standard manner. 3. Ensure the accuracy, sufficiency, and credibility of the financial results, as well ensure the accurate and sufficient disclosure through coordination with external auditors and executives who take responsible for preparing quarterly and yearly financial statements as requested by the company’s board of directors and/ or the executive board. 4. Ensure appropriate and effective internal control, through the coordination with the internal auditors and auditors. 5. Appoint the auditor and set the auditor fee, which must be approved by the shareholders and based on reliability and adequacy of human resources, audit job volume made by the audit firm and experience of staffs who are in charge of the company’s accounting audit. 6. Make sure that the company follows the legal conditions set by the Securities and Exchange Commission, the Stock Exchange of Thailand and other related agencies. 7. Prevent conflicts of interest through the inspection of the transactions of the company with connected parties and through coordination with the auditor as well as consider disclosing accurate and adequate information for connected transactions and any transactions that might cause conflicts of interest. 8. Prepare the audit committee’s report and disclose the report in the annual report, which includes at least following issues. w Opinion related to prepare the company’s financial reports and accurate and reliable information disclosure. w Opinion concerning to sufficiency of the company’s internal control system. w Reasons that the company’s auditor is appropriate for another term appointment. w Opinion to comply with the Securities and Exchange Act, the Stock Exchange of Thailand’s rules and laws relevant to the company’s business. w Other reports that should be acknowledged by shareholders and investors under scope of duty and responsibility assigned by the company’s directors.
31
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
9. Review the internal control’s reports. 10. Review the internal control’s findings. If finding or suspecting of any misconduct, or the insufficiency of the internal control, they must ask for the Board of Directors’ judgment. 11. Review the internal control’s inspection and the auditor’s recommendations, and follow through the improvements. 12. Authorize to examine, audit, call executive directors, executives, advisors, and accounting auditors to attend meeting to acknowledge information and seek independent opinions from other professional advisors if necessary to achieve in tasks under responsibility. 13. Perform other tasks assigned by the company’s board such as review of financial and risk management policy, and business ethics conducted by executives. The audit committee has a three-year term and it will be elected by the company’s board when their terms are ended by rotation. Independent Directors’ qualifications Independent directors must meet qualifications set by the Securities and Exchange Commission’s announcement at Kor Jor.28/2008 governing asking for permission and approving newly issued share offering, and audit committee qualifications required by the Stock Exchange of Thailand’s regulations. 3. The Director Nominating Committee The Director Nominating Committee consisted of 3 persons as of 31 December 2012. No. Name Title 1 Dr.Somsak Toruksa Chairman of the Nominating Committee 2 Mrs.Nuanual Swasdikula-Na-Ayudhaya Nominating Committee 3 Mr.Vidhya Nativivat Nominating Committee With Mr. Pramote Rermyindee as secretary Nominating Committee’s scope of authority and responsibility 1. Review the individuals who are fit to be the company’s directors and nominate the list to the board of directors and/or present the list to shareholders for official appointment. 2. In reviewing the individuals’ qualifications, the committee must consider their expertise, knowledge, ability and relevant experiences to ensure that the individuals’ qualifications would be useful for the company’s operations. Besides, the committee must consider that the nominations follow the legal framework particularly when it involves the nominations for independent directors and the audit committee members. 3. In selecting independent directors and the audit committee members, the committee must take into account; (a) The nominated individuals must hold no more than 1% of the paid-up capital of the company, affiliates or subsidiaries. The percentage is inclusive of the shareholding of related individuals - their spouses and underage children. (b) The nominated persons must not be related to the company’s executives or major shareholders. (c) The appointed persons must not have conflicts of interest, directly or indirectly, in terms of finances or management of the company and affiliates. They must not be the company’s major shareholders.
32
(d) The nominated persons must have no any relationship with the company and associates in ways of vested interest, or financial or management benefit at present and over the past two years before appointed as independent directors. Such relations include w Being directors who take part in the company’s management, employees, staff members, advisers who receives a regular salary, or control authorities. w Being professional service providers such as auditors, legal Consultants, financial advisors or price appraisers. w Having business relationship such as buy/sell goods, provide asset buy or sell service, give or receive financial assistance etc. (e) In case that the nominated persons serve as independent directors of other companies in the group, they must disclose such information and remuneration received from those companies. (f) The nominated persons must not seat as any director in other listed companies in the group. 4. The appointed persons must be able to work and present their views with independence, free from the control from executives or major shareholders as well as their relatives. Director Selection Committee’s authority, duty and responsibility could not be transferred to others in a way that those who are authorized by the committee can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or subsidiaries, or he/she has vested interest with exception that those transactions are regarded as normal course of business with the clear scope. To present the selected persons to the board of directors, the Selection Committee must nominate only those who will fill the available director seats. Except when the committee members could not reach an agreement, they are allowed to present all the nominated names to the board for their consideration.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
4. The Remuneration and Human Resources Committee The Remuneration and Human Resources Committee consisted of 3 persons as of 31 December 2012. No. Name Title 1 Mr.Virayuk Puntupetch Chairman of the Remuneration Committee 2 Mr.Krish Follett The Remuneration Committee 3 Mr.Vidhya Nativivat The Remuneration Committee With Mr. Pramote Rermyindee as secretary. The Remuneration and Human Resources Committee’s scope of authority and responsibility 1. Consider the company’s policies and criteria in paying the Chief Operation Officer, directors, and the company’s advisors. 2. Consider the annual salary, annual pay increase, and the interim pay increase, as well as other benefits to award all employees. 3. Consider the employment terms, regulations, and penal clauses which should be appropriate and fair. 4. The committee will report directly to the board of directors, to whom they will explain and answer all questions regarding the pays for employees at all levels. Remuneration and Human Resources Committee’s authority, duty and responsibility could not be transferred to others in a way that those who are authorized by the committee can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or subsidiaries, or he/she has vested interest with exception that those transactions are regarded as normal course of business with the clear scope.
34
5. Risk Management Committee Risk Management Committee consisted of 4 persons as of 31 December 2012. No. Name Title 1 Mrs.Nuanual Swasdikula-Na-Ayudhaya Chairman of Risk Management Committee 2 Mr.Boonliam Luangnakthongdee Risk Management Committee 3 Dr.Thamnoon Ananthothai Risk Management Committee 4 Mr.Chirdsak Kukiattinun Risk Management Committee With Dr.Theerathorn Tharachai as Secretary Risk Management Committee’s scope of authority and responsibility. 1. Review and present risk management policy and acceptable risk to the company’s board for approval. 2. Supervise development and practice throughout organization to comply with risk management framework. 3. Review risk management reports to monitor important risks and proceed to ensure that the organization has sufficient and appropriate risk management. 4. Present risk of the company in overall picture, and sufficiency of internal control system to manage risk in all important aspects to the company’s board. 5. Provide suggestion about risk management to the company and revise any information concerning risk management system development. 6. Authorizes to appoint the company’s risk evaluation and monitoring working group. 7. Perform other tasks about risk management assigned by the company’s board
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
6. Executive Board Executive Board contains 8 individuals, as of 31 December 2012. No. Name Title 1 Dr.Tawatchai Chief Executive Director (Authorized Signatory Directors) Nakhata 2 Mr.Chainid Ngow-Sirimanee Deputy Chief Executive Director (Authorized signatory Directors)) 3 Mr.Phairat Senachack Executive Director (Authorized signatory Directors) 4 Ms.Supee Reodecha Executive Director 5 Mr.Wicharn Siriwetwarawut Executive Director 6 Mr.Pornswat Katechulasriroj Executive Director 7 Mr.Wongsakorn Prasitvipat Executive Director 8 Ms.Sirirat Wongwattana Executive Director and Secretary (Authorized signatory Directors) Executive Committee’s authority and scope of responsibility* 1. Run the company’s daily operations under the guidelines set by the Board of Directors and within the scope of rules and regulations, as well as the company’s objectives and regulations. They are barred from transactions related to project opening and investment, not related to the company’s core business. 2. Appoint high-ranking executives to manage the company. 3. Set the annual budget for the Board of Directors’ approval. 4. Consider investment projects for the Board of Directors’ approval. 5. Review and approve land acquisition worth over Bt200 million but not more than Bt800 million. The amount must not exceed the sum approved by the Board. Any approved land purchase must be attached with the preliminary development plan and project feasibility, for the Board’s consideration. 6. Consider and approve borrowings and the financing of normal transactions. w Project financing - approved the project financing worth not over Bt1,000 million per project, excluding infrastructure guarantee w Working capital – approved the borrowing of no more than Bt800 million for the working capital 7. Prepare, recommend and set business strategies for the Board of Directors. 8. Consider and approve the corporate marketing and public relations plans. 9. Evaluate the company’s performance in terms of asset management and financial management to ensure efficiency and effectiveness. 10. Conduct other tasks assigned by the Board of Directors. Notably, the executive board has no authority in handing its power to any member or others to approve a connected transaction (as prescribed by the Securities and Exchange Commission) or a transaction which could pose conflicts of interest with the company or subsidiaries with exception of approval for normal course of business transactions as policy and criteria resolved by the board of directors under the Securities and Exchange Act, and the Stock Exchange of Thailand’s regulations, announcements and instructions or rules. Note: * Revised by Board’s resolutions at the 5/2009 meeting on 14 August 2009
36
7. Chief Executive Officer* Chief Executive Officer is the highest authority in the company’s management. perform duties and report operating performance to the Executive Committee, Board of Directors and shareholders as follows : 1. Set policies, direction, and strategies for the company’s business operation. 2. Set business planning, budget and authority of the company’s internal units which up to management department to seek the board’s approval. 3. Manage normal course of business activities under policies set by the company’s board, laws, conditions, regulations, memorandum of association, and the company’s rules. 4. Appointed Management Board, advisor and other directors to give advices concerning the company’s management. 5. Review and approve land acquisition worth no more than Bt500 million. The purchase must be notified to the Executive Committee, to proceed with the registration at the Lands Department. 6. Perform other tasks assigned by the company’s board. Chief Executive Officer authority, duty and responsibility could not be transferred to others in a way that those who are authorized by Chief Executive Officer can approve transactions that might lead to conflicts of interest (as defined in the Securities and Exchange Commission’s announcement) with the company or the subsidiaries and affiliates, or he/she has vested interest with exception that those transactions are regarded as normal course of business as policies and principles set by the company’s board, in compliance with laws governing securities and stock exchange, regulations, announcements, instructions or rules of the Stock Exchange of Thailand. Note: * Revised by Board’s resolutions at the 1/2010 meeting on 22 January 2010.
8. Executives The company’s executive team consisted of 8 members as of 31 December 201, as defined in the Securities and Exchange Commission’s announcement Name Title 1 Mr.Chainid Ngow-Sirimanee Chief Executive Officer 2 Mr.Pramote Rermyindee Company Secretary 3 Mr.Wicharn Siriwetwarawut Deputy Chief Operating Officer 1 4 Mr.Pornswat Katechulasriroj Deputy Chief Operating Officer 2 5 Mr.Wongsakorn Prasitvipat Deputy Chief Business Development Officer 6 Ms.Supee Reodecha Deputy Chief Financial Officer 7 Ms.Sirirat Wongwattana Deputy Chief Supporting Officer 8 Mr.Surasak Vacharapongpreecha Assistant Chief Financial Officer
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Meeting allowances of the company’s board and 4 units of subcommittees in 2011-2012. Board of Directors Name Dr.Tawatchai Nakhata Mr.Virayuk Puntupetch* Mr.Chainid Ngow-Sirimanee Dr.Somsak Toruksa * Dr.Thamnoon Ananthothai * Mr.Phairat Senachack Mr.Vidhya Nativivat Ms.Sirirat Wongwattana Mr. David Bryce Van Oppen ** Mr.Ooi Boon Aun Mrs.Nuanual Swasdikula-Na-Ayudhaya* Mr.Krish Follett * Mr.Wanchai Thanittiraporn * , *** Mr.Anuwat Maytheewibulwut* , **** Mr.Pramote Rermyindee Mr.Boonliam Luangnakthongdee Mr.Chirdsak Kukiattinun
Total Note:
2012
2011
6 6 6 6 6 6 5 6 5 6 6 4 2 5
7 7 7 6 6 7 7 7 1 7 7 6 4 7
6 * ** ***
****
7
Audit Remuneration Nominating Risk Committee Committee Committee Management Committee 2012
9 9
2011
2012
2011
1
1
8 8 1
9
9
8
8
1
1
1
1
1
1
1
2012
2011
1
1
1
1
1
1
1
1
1
1
2012
2011
8
8
8
8
7 7 8
8 8 8
Independent Directors Mr.David Bryce Van Oppen resigned as a director on 26 February 2011 Mr.Wanchai Thanittiraporn Appointed to director and independent director on 29 April 2011. And resigned from director and independent director on 21 September 2012. Anuwat Maytheewibulwut appointed to director and independent director accordance of the board of company at the 5/2012 meeting on 12 November 2012.
Director and Executive Nomination The selection committee exists to nominate individuals as the company’s directors. The Selection Committee will shortlist qualified persons and submit the nominations to the Board of Directors or the shareholders meeting for the appointment. The Selection Committee places the knowledge, ability and experiences on top priority in completing the nomination, as the qualifications must support the company’s operations. (As specified by the scope of authority and responsibility of the Selection Committee, in nominating company directors).
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Components and appointment of directors The company’s Board of Directors contains at least 5 members and at least a half of the board members must reside in the Kingdom. In voting for directors at the shareholders meeting, one share is equivalent to one vote. Each shareholder is obliged to cast all votes for one or more persons, but they cannot ration votes for particular persons. Majority votes count in the voting. In case of equal votes, it is to be decided by chairman of the meeting. At annual shareholder meeting, one third of directors must end their term. If the number of directors cannot be divided into three portions, the number of resigned directors must be as close as the one-third ratio. Directors are barred from operating a similar business which competes against the company’s business, or being a partner of a partnership, a partner without limit in a limited partnership, or a director of any juristic body that operates in competition against the company, unless shareholders are notified of the fact before the appointment. Directors must immediately notify the company if taking any part in contracts with the company or when the holding of shares or debentures issued by the company or subsidiaries increases or decreases. . Dividend policy of the company and suÏsidiaries The Board of Directors approved at the 5/2007 meeting a change in the dividend policy, which earlier set the dividend payout ratio at 50% of after-tax profits as approved by the shareholders meeting. The change followed the alteration in the accounting measure, which is based on the cost method rather than the equity method. The Company’s dividend payment ratio was changed to 50% of the non-consolidated net profits after legal reserves. The ratio is also set in accordance with the Company’s financial status, liquidity, investment plans and other factors related to the operations. The company’s subsidiaries have dividend payout policy of at least 50% of unconsolidated net profit after deducting legal reserve. Besides, financial position, liquidity, business expansion and other factors related to the company’s management are also taken into dividend payment consideration.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Board of Directors 1. Dr.Tawatchai Nakhata Chairman Chief Executive Director
2. Mr.Chainid Ngow-Sirimanee Chief Executive Officer Deputy Chief Executive Director Director
8. Mr.Phairat Senachack
Director Executive Director Consultant of Chief Executive Officer
. Mr.²rish ollett
Director Independent Director Chairman of Audit Committee Remuneration Committee
3. Mr.Virayuk Puntupetch
Deputy Chairman Independent Director 10. Mr.Ooi Bun ¨un Chairman of the Remuneration Committee Director
4. Dr.Somsak Toruksa
Director Independent Director Audit Committee Chairman of Nominating Committee
11. Mr. ¨nuwat MaytheewiÏulwut Director Independent Director
12. Ms.Sirirat ¾ongwattana
Director Executive Director Deputy Chief Supporting Officer
5. Mr.Vidhya Nativivat
Director Nominating Committee Remuneration Committee
13 Mr.Pramote Rermyindee
. Dr.Thamnoon ¨nanthothai Director Independent Director Audit Committee Risk Management Committee
. Mrs.Nuanual Swasdikula-Na-¨yudhaya Director Independent Director Chairman of Risk Management Committee Nominating Committee
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Company Secretary
1
2
3
4
5
6
7
8
9
100
11
12
13
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Organization Chart Property Perfect PuÏlic Company ³imited and suÏsidiary Chief ¨dvisor to the Board of Directors Board Of Directors Nominating Committee Executive Committee
Risk Management Committee
Chief Executive Officer CEO
¨udit Committee
Internal ¨udit
¨dvisors to the Chief Executive Officer
Operating Group 1 COO 1
Operating Group 2 COO 2
Business Development Group CBO
Deputy Chief Operating Officer 1
Deputy Chief Operating Officer 2
Deputy Chief Business Development Officer
¨ssistant Chief Operating Officer 1
¨ssistant Chief Operating Officer 2
¨ssistant Chief Business Development Officer
Project Management Division Zone 1
Project Management Division - The Villa
Project Planning Division
Project Management Division Zone 2
Project Management Division - iCondo
Design Project Development Division
Project Management Division Zone 3
Project Management Division - Uniloft
¨dvertising Division
Project Management Division Zone 4
Projects Planning and Development Division iCondo Uniloft
PuÏlic Relations and Corporate Communication Division
Project Management Division Zone 5
Construction Management Division - The Villa
Sales Management Division
Construction Management Division
Construction Management Division - iCondo Uniloft
³egal Procedure Ownership Transfer Division
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Remuneration Committee
Company Secretary Office of the Chief Executive Officer
³egal
Research Business Development Division Product Development Quality Control Division
inancial Group CO
Supporting Group CSO
Deputy Chief inancial Officer
Deputy Chief Supporting Officer
¨ssistant Chief inancial Officer
¨ssistant Chief Supporting Officer
inance Treasury Division
Investor Relation Information System Division
¨ccounting Division
und Management and DeÏenture Division
Budgeting Division
General ¨dministration Division Human Resources Division
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Project’s Information
Project of Property Perfect Plc. and SuÏsidiary on 31 DecemÏer 2012.
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Perfect Masterpiece 1. Perfect Masterpiece RattanatiÏet Phase 1-3 Time to Develop 2007-2017 Product Single Detached House Total Units 344 Total Project Value 4,525 Million Baht Remaining Units 188 Remaining Project Value 2,918 Million Baht 2. Perfect Masterpiece Rama IX Time to Develop 2008-2013 Product Single Detached House Total Units 284 Total Project Value 3,635 Million Baht Remaining Units 15 Remaining Project Value 230 Million Baht 3. Perfect Masterpiece Ratchapruek Time to Develop 2011-2013 Product Single Detached House Total Units 42 Total Project Value 620 Million Baht Remaining Units 13 Remaining Project Value 240 Million Baht 4. Perfect Masterpiece Rangsit Time to Develop 2011-2013 Product Single Detached House Total Units 33 Total Project Value 639 Million Baht Remaining Units 24 Remaining Project Value 421 Million Baht 5. Perfect Masterpiece Ramkhamheang Time to Develop 2011-2013 Product Single Detached House Total Units 65 Total Project Value 1,170 Million Baht Remaining Units 42 Remaining Project Value 648 Million Baht
Perfect Place 6. Perfect Place RattanatiÏet Time to Develop 2005-2015 Product Single Detached House Total Units 963 Total Project Value 4,532 Million Baht Remaining Units 232 Remaining Project Value 1,164 Million Baht 7. Perfect Place Ratchapruek Time to Develop 2009-2013 Product Single Detached House Total Units 391 Total Project Value 2,280 Million Baht Remaining Units 6 Remaining Project Value 35 Million Baht 8. Perfect Place Rangsit Time to Develop 2011-2013 Product Single Detached House Total Units 114 Total Project Value 545 Million Baht Remaining Units 81 Remaining Project Value 338 Million Baht 9. Perfect Place Ramkhamhaeng-SuvarnaÏhumi 2 Time to Develop 2010-2014 Product Single Detached House Total Units 282 Total Project Value 1,500 Million Baht Remaining Units 157 Remaining Project Value 810 Million Baht 10. Perfect Place Sukhumvit77-SuvarnaÏhumi Time to Develop 2004-2014 Product Single Detached House Total Units 945 Total Project Value 5,563 Million Baht Remaining Units 82 Remaining Project Value 485 Million Baht
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Perfect Park Maneerin 11. Maneerin ³ake Park Ratchapruek-Tiwanon Time to Develop 2003-2013 Product Single Detached House Total Units 702 Total Project Value 3,100 Million Baht Remaining Units 58 Remaining Project Value 254 Million Baht 12. Perfect Park RamaV-Bangyai Phase1-5 Time to Develop 2006-2015 Product Single Detached House, Duplex House Total Units 1,633 Total Project Value 5,324 Million Baht Remaining Units 538 Remaining Project Value 1,735 Million Baht 13. Perfect Park SuvarnaÏhumi Phase 1-2 Time to Develop 2007-2014 Product Single Detached House Total Units 503 Total Project Value 2,080 Million Baht Remaining Units 160 Remaining Project Value 663 Million Baht 14. Perfect Park Rangsit Time to Develop 2010-2014 Product Single Detached House Total Units 165 Total Project Value 608 Million Baht Remaining Units 111 Remaining Project Value 392 Million Baht 15. Perfect Park BangÏuathong Time to Develop 2010-2014 Product Single Detached House Total Units 403 Total Project Value 1,536 Million Baht Remaining Units 274 Remaining Project Value 1,044 Million Baht
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The Villa Modi Villa 16. The Villa RattanatiÏet Time to Develop 2006-2013 Product Townhouse, Duplex House Total Units 1,427 Total Project Value 3,497 Million Baht Remaining Units 219 Remaining Project Value 712 Million Baht 17. The Villa Ram-Indra Time to Develop 2010-2013 Product Townhouse Total Units 295 Total Project Value 700 Million Baht Remaining Units 14 Remaining Project Value 43 Million Baht 18. The Villa BangÏuathong Time to Develop 2010-2013 Product Townhouse Total Units 301 Total Project Value 660 Million Baht Remaining Units 75 Remaining Project Value 167 Million Baht 19. Modi Villa ³adkraÏang Time to Develop 2012-2016 Product Single Detached House, Duplex House Total Units 190 Total Project Value 600 Million Baht Remaining Units 182 Remaining Project Value 573 Million Baht 20. Modi Villa Town Home ³adkraÏang Time to Develop 2012-2016 Product Townhouse Total Units 472 Total Project Value 900 Million Baht Remaining Units 459 Remaining Project Value 876 Million Baht 21. Modi Villa Pinklao-Outer Ring Time to Develop 2012-2014 Product Single Detached House, Townhouse Total Units 492 Total Project Value 1,200 Million Baht Remaining Units 378 Remaining Project Value 1,086 Million Baht
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ANNUAL REPORT 2012
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PROPERTY PERFECT PUBLIC COMPANY LIMITED
Metro Park 22. Metro Park Sathorn Phase 1-3 Time to Develop 2005-2014 Product Condominium Total Units 4,612 Total Project Value 8,213 Million Baht Remaining Units 1,024 Remaining Project Value 1,792 Million Baht Metro Sky The Sky 23. The Sky Sukhumvit Time to Develop 2012-2015 Product Condominium Total Units 743 Total Project Value 3,300 Million Baht Remaining Units 270 Remaining Project Value 2,446 Million Baht 24. Metro Sky ²aset Time to Develop 2012-2014 Product Condominium Total Units 730 Total Project Value 1,700 Million Baht Remaining Units 252 Remaining Project Value 603 Million Baht 25. The Sky Ratchada Time to Develop 2012-2015 Product Condominium Total Units 1,028 Total Project Value 3,720 Million Baht Remaining Units 779 Remaining Project Value 2,844 Million Baht 26. Metro Sky Phahonyothin Time to Develop 2013-2015 Product Condominium Total Units 1,382 Total Project Value 4,100 Million Baht Remaining Units 761 Remaining Project Value 3,628 Million Baht iCondo 27. iCondo Ngamwongwan 1 Time to Develop 2011-2013 Product Condominium Total Units 364 Total Project Value 445 Million Baht Remaining Units 88 Remaining Project Value 81 Million Baht
28. iCondo SukapiÏan 2 Time to Develop 2011-2013 Product Condominium Total Units 658 Total Project Value 914 Million Baht Remaining Units 217 Remaining Project Value 286 Million Baht 29. iCondo Sukhumvit 105 Time to Develop 2011-2013 Product Condominium Total Units 1,384 Total Project Value 1,952 Million Baht Remaining Units 811 Remaining Project Value 1,144 Million Baht 30. iCondo Sukhumvit 103 Time to Develop 2011-2014 Product Condominium Total Units 840 Total Project Value 1,368 Million Baht Remaining Units 416 Remaining Project Value 672 Million Baht 31. iCondo Ngamwongwan 2 Time to Develop 2012-2013 Product Condominium Total Units 398 Total Project Value 559 Million Baht Remaining Units 173 Remaining Project Value 242 Million Baht 32. iCondo ²aset Time to Develop 2012-2013 Product Condominium Total Units 181 Total Project Value 281 Million Baht Remaining Units 4 Remaining Project Value 7 Million Baht 33. iCondo Phet²asem 39 Time to Develop 2012-2013 Product Condominium Total Units 404 Total Project Value 541 Million Baht Remaining Units 59 Remaining Project Value 79 Million Baht Note.* Subsidiary’s Project (Estate Perfect Co.,Ltd.) ** Subsidiary’s Project (Residence Number Nine Co.,Ltd.) *** Subsidiary’s Project (Bright Development Bangkok Co.,Ltd.)
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ANNUAL REPORT 2012
MAP
50
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Marketing and
Competition Marketing (1) Product Strategies Design w Low Rise Residential Units The company applies data from the research and development department in designing to best respond to customer preferences. The company’s product design covers single detached houses, Duplex house and townhouses - with focus on the look and usable space to fit the new lifestyle as well as Thailand’s weather condition. The design team works with leading architecture firms in creating new innovative features - having the design, usable space and cost-efficiency as the priorities which serve demand and lifestyle meet different demand of customers. The company has introduced new brands in response to consumers’ preferences in terms of home designs, space and trends as follow.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
S-Series is for Perfect Masterpiece Brand’s target, with the modern, spacious and full-function designs for all family members. Its highlights are the Leisure Room that connects the house with the lush and private garden and the upper-floor Garden Patio, the outdoor space that can be modified into a floating garden or a private party venue. Coming with this are the vast parking space for 3-4 vehicles. V-Series is for Perfect Place Brand’s target, luring them with the modern design that compliments the spacious living concept highlighted by high ceilings and wide glass panels in the living room and master bedroom and garden-linked patio. It fits the lifestyle of the new generation to whom health and environment comes into play. C-Series design was launched for Perfect Park and Perfect Place brands to improve the urban lifestyle features as following : w Cool lifestyle Meeting the requirements of all lifestyles of new families, with more open space for all members’ activities. w Click design Outstanding new functions for maximum space utilization, hidden in modern interior and exterior designs. w Convenience function All corners are designed for different functions and usable space designs, which fit well and serve demand and more energy-saving. w City location Various accesses to the city area through expressways, Airport Rail Link, Purple Line electric train and Red Line electric train The design has received warm welcome and continually boosted sale revenue even at times of falling demand. Perfect Masterpiece Rattanathibet project was recognized as an outstanding developer, through the “Thailand Property Awards 2012”. And Perfect Place Rangsit was also named an outstanding private development project (single house) of 2012.
52
w
High Rise Residential Units The company has created the following condominium brands, according to target groups. Metro Park, low Rise condominium, near the city center and along the electric train route. The project’s price tag is between Bt1.2-Bt3 million per unit. Metro Sky, high-rise condominium, to lure home buyers looking for city units near the electric train routes. The units are priced between Bt2.0-Bt5.0 million per unit. The Sky, in 2012, the company launched new project in the name of “The Sky’” to cash in on rising demand for condominiums and to expand the client base towards the premium segment. The high-rise condominium brand will target the new generation who seeks different products for their unique lifestyles. The condominiums will be completed with high-quality materials and offer a variety facilities. The units will be designed for maximum space utilization. The units will be priced in the range of Bt2.5-Bt9 million. In 2012, “MO))” was launched, highlighting the 4-meter-high ceiling and new space in the air. Invented for high-rise living, the new design is offered through Metro Sky and The Sky condominium brands iCondo, by Bright Development Bangkok Company Limited (subsidiary). The low-rise condominium is designed to principally satisfy customers who seek accommodations in the city area or near the city area with convenient access to electric trains and expressways. The condominium is priced Bt1.0-Bt2.0 million. Uniloft, a new premium dormitory project by Bright Development Bangkok Company Limited (Subsidiary). This would be rented to students under the “Extraordinary Campus Living” concept, with the aim to raise the dormitory standards for students who show greater demand for well-managed accommodations near universities. The company plans to sell the entire project to a property fund, targeting investors who seek constant and stable returns. In 2013, the company plans Uniloft Condominium development projects in response to demand for near-university accommodation. The company and subsidiaries’ condominiums will draw customers mainly with the larger-than-required central area for the comfortable lifestyle. The condominiums will possess the single house project’s ambience, fully equipped with a swimming pool, a fitness center and quality security system.
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ANNUAL REPORT 2012
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PROPERTY PERFECT PUBLIC COMPANY LIMITED
Community Mall The property market is cladded with large-sized developers who possess unlimited financing for the competition and complimentary project developments. In raising development’s added value, the Company focuses on the environment inside and outside the projects. From a research study on new-generation lifestyle, community malls are a factor to quicken buyers’ decision, while serving as a source of long-term revenue. The Company plans community malls near its projects in potential areas, coming with different sizes. In 2013, The plan to develop three community mall - at the East zone on Sukhumvit77 road with Branded as Metro East Town, Metro West Town at Western zone on Kalaprapruek road and Metro UP Town on Ramintra Road, they will have combined space of 93,127 square meters on total area of 39 rai. The malls are expected to open late 2014.
Construction Quality w Conventional System The company controls construction works quality, by having contractors complete the designed works with quality materials within the specified period. The construction pattern and methods are jointly formulated to meet the company’s standards. w Prefabrication System, Skeleton )rame and Tunnel )ormwork Foreseeing construction-related problems like labor shortage, an increase in construction cost and the longer construction period, the Company plans the capacity expansion for the prefabrication, skeleton frame and tunnel formwork production. This will concurrently address the above problems and support the Company’s business expansion, by shortening the construction period from 6-8 months to 4-5 months. Construction quality is not compromised by the approach, as materials are mainly supplied by SCG Building Materials Company Limited to ensure durability, strength and beauty. To control the procurement cost, the Company resorts to bulk purchases.
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w
The company struck a partnership with Siam Cement Public Company Limited (SCG), whereby both jointly introduced a house completed by the innovative Modular system. As a choice to customers, the “SCG HEIM innovative House” is designed to enhance the quality of life through modern technology, high-quality materials and precise quality assessment. The alternative for innovation-centric customers is first available as part of premium-grade projects. In selling land and house, the Company focuses on offering finished houses, which match the need of customers who want to move in immediately after purchases. They can view the complete units before making a decision. Within 1 month after purchases, the units can be transferred to customers who can immediately move in. Environment Impact Assessment Aside from enticing designs, functions and reasonable prices, the Company pays attention to the project planning, environmental management, infrastructure system, security system and after-sale services for customers’ maximum benefits. The Company has also hosted activities for major festivals, where its customers can meet neighbors and nurture their good relationship. With the focus, the company won EIA Monitoring Award from the Natural Resources and Environment Ministry for three consecutive years. The three projects received the awards, In 2005-2007,Perfect Place Rattanathibet, Perfect Place Ramkhamhaeng phase 1 In 2006 - 2008, Perfect Place Ramkhamhaeng phase 2 and 3 In addition, the company provides public gardens, lakes, large and perfect club houses and shops in the club house areas to facilitate customers. The company has teamed up with business partners to open their shops in the club house areas such as Black Canyon, True coffee, Clark Hatch Fitness Center, V Shop and 108-Shop Convenience stores. These facilities differentiate the company’s projects from others’, creating the friendly ambience to residents who have warmly welcomed the concept.
(2) Pricing The company has policy to set prices based on the economic condition, market demand and competition. These factors are jointly considered with costs, locations, project types and market conditions when compared with competitors. There are several guidelines for price setting such as setting higher price than rivals but better designs, and environmental and convenient facilities. The company has offered various project types and prices starting from aBt1.0 million to the luxurious projects with prices in a range of Bt9 million up to serve different demand as follows :
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
The table described residence prices by brand Type
1.0 – 2.0
2.0 – 3.0
Pricing (Unit: Million Baht) 3.0 – 4.0 4.0 – 5.0 5.0 – 9.0
9.0 up
9.0 MB. up 4.0 - 9.0 MB. 2.8 - 5.0 MB. Single Detached House and Duplex House
1.7 - 3.5 MB.
3.5 - 5.0 MB.
Townhouse
1.7 - 3.0 MB.
1.5 - 3.0 MB. 2.0 - 5.0 MB. 2.5 - 9.0 MB. 1.0 - 2.0 MB.
Condominium
56
1.0 - 1.2 MB.
(3) Place Location The company’s projects are mostly located in high-potential locations, set along the electric train routes or new roads as. w In the North and West of Bangkok, The projects will be located on main roads along the Purple Line route (Bang Sue-Bang Yai), Red Line (Bang Sue-Rangsit) and Pink Line (Kharai-Min Buri), which include Ratchaphruek, Chaiyaphruek, Rattanathibet, Kanchanapisek, Nonthaburi Bridge -Bang Buathong road and Rangsit-Pathum Thani roads. These encompass roads linking to important area as Rama 4 Bridge (crossing the Chao Phraya River) and roads that link Ratchaphruek and Kanchanapisek roads which link area from Chaengwattana road to Kanchanapisek road. Ratchaphruek Road is being expanded from 6 lanes to 10. With proximity to the second-stage expressway and the new express way Sri Rath-Outer Ring which aside from shopping centers like Central West Gate Bang Yai, Central Chaengwattana, Central Rattanathibet, Future Park Rangsit and The Crysta shopping center. w In the East, New projects will be located on main roads along the Airport Rail Link, the Pink Line (Kharai Min Buri), and Orange Line (Talingchan-Min Buri). Near Suvarnabhumi Airport, the main roads include Ramkhamhaeng road, Sukhumvit 77 road and Romklao road, promising linkages to the Motor Way towards Chon Buri and Pattaya in the East and the Eastern outer ring road towards North and South of Bangkok. w
Urban City projects are in business areas like near Motor way, Airport Rail Link, BTS and MRT subway as well as the routes which running and to be opened soon. They are mostly up-scale housing units (Perfect Masterpiece), 3-storey townhouses (The Metro) and condominium (Metro Park, Metro Sky, The Sky, iCondo).
(4) Promotion Advertising & Place The company has applied the integrated communications as newspaper, TV Scoop, radio spot, Billboard, Direct mail etc, in selling the products. Mass media is exploited for the one-time advertisement to advertise a number of projects to target customers in lower advertising cost. Complimenting the strategy is the direct marketing, whereby a specific media is chosen for a particular target group and a particular campaign, marketing events and customer relationship management (CRM) to take care of existing customers. The Perfect Friend Club is launched to thank existing customers who introduce the projects to their friends, as a means to effectively reach out to target customers at a low cost. The ratio of units sold under the scheme has been significantly rising, thanks to clients’ recommendations to their friends and relatives.
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The company has been offensive in terms of marketing activities. It is reaching out to customers through website, social media (Facebook and Twitter), and specialized activities for customers visiting the websites of the company and subsidiaries. Through new applications, communication channels are extended to cover smart phones and tablets, to ensure convenient and fast access to the Company’s marketing information. Through the warmlywelcomed Perfect Card membership, it also builds a communication linkage with customers to promote the company’s products. The company has devised unique promotions for particular groups of target customers with realization of their different preferences, to speed up their buying decision process. The strategies take into account economic environment at a certain period. For example, for customers seeking a complete house, with help from leading financial institutions, they are offered with low-interest loans, an extended borrowing period, and the step installment program. Through cooperation with leading furniture makers, the company offers customers a chance to buy a house with furniture at special prices, to help them save shopping time and reduce the need for an interior design. Special furniture prices also save their money, as loans for furniture purchase often carry higher interest rate than mortgage loans. (5) Brand Building Strategies The company’s brand has been differentiated from competitors’. The Brand DNA is created under the “Happy Living” concept, to underline the company’s focus in creating the new living standards for all residing in the Property Perfect projects. Happy Living contains 4 main happiness-supporting components w House (Happy with Perfect 4uality) Residing in high-quality houses, which are well-designed for maximized functions and pleasant look as well as for energy saving and environmental friendly purposes. The construction works are closely and thoroughly monitored and applied modern technology like the prefabrication which ensures short construction period but standard quarter. All the units are also subjected to the QC Pass system before delivery to customers. w Security (Happy with Peace of Mind) Deriving from maximum security. Through cooperation with Thai Secom Pitakkij Co., Ltd. (SECOM), a leader security system provider in Japan, the trustworthy Home Security system is designed for all projects to cover from the entrance, guard booths and the overall projects’ space to customers’ home. w Lifestyle (Happy with Healthy Lifestyle) Property Perfect is more than just a home. Here, activities are created to meet customers’ lifestyles. The projects are fully equipped with facilities like a giant club house, where fitness, swimming pools, gyms, shops and other services. The central area is also open for relaxing and exercising purposes as well as family activities, something that they need not to find outside the projects.
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w
Green Environment (Happy with )riendly Environment) Near-nature environment is provided, with the larger central space which offers floral trees and large lakes for cool living amid fresh air. The company believes that a successful brand is built upon customers’ good experiences, which will lead to the company’s sustainable image. The construction works, design and project planning are thus properly designed, along with emphasis on environment management, infrastructure and security inside the projects. Activities are also hosted for better relationships among residents, to create a warm community and happy environment to all residents. Favorable communities spark words of mouths among residents of the company ’s projects, which is a sustainable way to build brand.
Competition Housing market growth momentum from 2012, buoyed by consumer confidence in the economy and political stability and growing awareness on trade and investment opportunities promised by the Asean Economic Community (AEC) in the next two years, is expected to continue in 2013. Also supportive to further expansion are the government’s infrastructure policies that encompass the mass transit system, the expressway network, high-speed trains and the flood prevention system. The economic condition is favorable for the industry, with low-interest policy, the Bt300 minimum wage, and the Bt15,000 minimum salary for graduates. This is despite some external and internal negative factors like the euro-zone public debt, the US economic prospect, the Bank of Thailand’s loan-to-value regulations to limit single-house mortgage loans at 95% of value. The single-house LTV regulations, enforced first in the condominium segment, take effect this year. However, positive factors weigh more on purchasing power than negative factors. Competition in 2013 and beyond is expected to intensify, mostly by large-sized developers’ extension of the range of products to cover all segments of buyers. They are fully ready to adapt marketing strategies, while strengthening the branding recognition aside from product positioning for greater loyalty and sale revenue in the long term. Facing a sharp increase in construction costs, developers are compelled to focus more on prefabrication technology to ensure prompt delivery. Functional designs are adjusted in light of smaller space, to ensure affordability in preferred locations.
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Real Estate
Market Conditions and Outlook
37% In 2012, the number of completed residential units in Bangkok and peripheral provinces increased by 37%
19%
In 2012, the overall newly-launched units increased by 19% while combined value rose by 17%.
31% In 2012, supply absorption also rose accordingly. Combined sale value advanced by 31%.
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The real estate industry in 2012 staged a strong recovery from 2011 when the industry was hit hard by the flood disaster. Fears on a reoccurrence took a toll on the industry in the first half, but the annualized demand and supply advanced despite a slight fall in the low-rise segment. Compared to 2011, the number of completed residential units in Bangkok and peripheral provinces increased by 37% while the number of residential transfers rose by 3% and the value went up by 12%. In the Greater Bangkok, condominium projects showed a greater portion of newly-launched projects while new low-rise unit launches slightly declined. The overall newly-launched units increased by 19% while combined value rose by 17%. Supply absorption also rose accordingly. Combined sale value advanced by 31%. Coupled with a huge growth in provincial sales, this reflected the improvement in the real estate industry. Thailand’s economy expanded by 6.4% in 2012, rebounding from the 0.1% growth in 2011 (Source: The Office of National Economic and Social Development Board) thanks to positive improvement in global economy and higher domestic private consumption and investment on the back of government policies - for example, the minimum wage hike and an increase in civil servant salary, the rice-pledging scheme, the first-car buyer scheme, the firsthome buyer scheme as well as the gradual cuts in corporate tax rates. While these boosted domestic spending, public consumption and investment played a role in buoying the economy.
Aside from domestic economic rebound, the real estate industry enjoyed an improvement in other fronts - political stability, low interest rates and importantly progress on new and extended mass-transit routes. Directly propelling the industry include the first-home buyer scheme which gives tax credits worth 10% of the value of houses priced no more than Bt5 million; Government Housing Bank’s first-home scheme which offers the 3-year zero interest rate for the purchases of houses priced no more than Bt1 million; upto Bt100,000 tax deduction on post-flood residential rehabilitation; Bank of Thailand’s soft loan scheme which offers five-year 3% fixed rate loans to flood victims; and Government Housing Bank’s relief measures for flood victims. In the first half of 2012, consumers were rather concerned with the reoccurrence of a flood disaster, which led to a decline in sale of low-rise projects which are mostly located in flood-affected areas. In contrast, this was a factor that increased demand for condominium units. The brisk demand for low-rise units returned when there was no sign of another disaster in 2012. Residential transfers in the Greater Bangkok reached 156,300 units in 2012, up by 3.3% from 2011. Low-rise transfers covered 89,636 units, down by only 1.6%; transfers of condominium units - which accounted for 43% of total transfers increased by 10.6% to 66,681 units. (Source: Government Housing Bank’s Real Estate Information Center) In 2012,The value of transferred units in the Greater Bangkok advanced 12% from 2011 to Bt357,147 million. Of total, the value of transferred low-rise units rose 9% to Bt221,473 million, while that of condominium units went up by 16% to Bt135,671 million. (Source: Government Housing Bank’s Real Estate Information Center) The number of complete units in the Greater Bangkok increased by 31% from 2011 to 107,490 units in 2012. Of total, low-rise units accounted for 42,774, down by 9% on year; while the number of condominium units - accounting for 60% of total - spiked by 86% to 64,716 units. (Source: Government Housing Bank’s Real Estate Information Center) The sharp spike was mainly the result of new projects along new and extended mass-transit routes No. of registered residential units in Greater Bangkok during 1995-2012 (by category) 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Single detached house Duplexhouse
48,909 44,877 41,305 23,985 17,469 23,128 24,041 24,973 34,592 44,248 46,643 42,764 38,705 34,618 28,998 31,687 31,813 31,193 1,089
791 1,009
196
178
539
227
80 1,144
945
678
965 1,556 2,296 1,138 1,520 1,462 1,192
Townhouse/ Shophouse
61,944 60,373 43,480 11,895 2,319 2,728 5,062 7,011 12,950 15,418 13,858 17,421 17,837 14,616 11,116 13,767 13,847 10,389
Condominium
66,911 70,575 62,837 30,978 9,063 6,679 4,650 5,118 7,399 8,439 10,534 18,607 17,432 34,049 53,725 59,919 34,734 64,716
Total
178,853176,616148,631 67,054 29,029 33,074 33,980 37,182 56,085 69,050 71,713 79,757 75,530 85,579 94,977106,893 81,856107,490
Source: Government Housing Bank’s Real Estate Information Center
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Graphic 1: No. of registered units in Greater Bangkok during 1995-2012 (by category)
200,00
150,00
100,00
50,000
Source: Government Housing Bank’s Real Estate Information Center
On the supply side, developers picked up speed in introducing condominium projects and postponed the launch of low-rise projects. A total of 100,151 units were launched in 2012, up by 19% from 2011. (Source: Agency for Real Estate Affairs) The 62,548 condominium units, accounting for 62% of total new units against 49% in 2011, represented a 50% increase from 2011. Meanwhile, the number of new single houses decreased by 24% to 12,720 units, while that of townhouses rose slightly by 2.8% to 22,503 units. The townhouses were mostly introduced in the second and third quarters. Newly-launched units in 2011 and 2012 Single detached house Duplex House Townhouse Condominium Total
2011
2012
Changes%
16,824 3,782 21,872 41,492 83,970
12,720 2,380 22,503 62,548 100,151
-24.39% -37.07% 2.88% 50.75% 19.27%
Source: Agency for Real Estate Affairs
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Graphic 2: Comparative number of newly-launched units during 2011-2012 (by category)
2011 2012
16,824
3,782
21,872
41,492
83,970
12,720
2,380
22,503
62,548
100,151
Change%
-24.39%
-37.07%
2.88%
50.75%
19.27%
Real estate market in 2012 : In the year, 13,300 single houses were sold, down by 14% from 2011, but inventory at the end of the year shrunk by 2% from 2011 to 38,778 units due to the delay of most projects. In the year, 23,539 units of townhouse were sold, up by 2% from 2011, but inventory also declined by 3% to 38,617 units due to tight supply and demand. In the year, sold condominiums increased by 73% from 2011 to 65,215 units, but end-year inventory declined by 6% from 2011 to 40,853 units. Though the number of newly-launched condominium units went up, the number of sold units outpaced the rate, resulting in a drop in the inventory. (Source: Agency for Real Estate Affairs) Nevertheless, this represented the booking. Data on the construction and transfers is to be monitored. Overall, the residential supply and demand is quite balanced, resulting a low risk in high inventory or oversupplies. In 2013,Thailand’s economy is expected to expand by 4.5-5.5%. (Source: The Office of National Economic and Social Development Board) The forecast is based on the assumption that domestic demand will remain buoyant, while improvement in the global economic recovery is expected. The interest rate is expected to remain low, against relatively-normal inflation, while the baht tends to appreciate further which will affect the export sector. Higher purchasing power and consumer confidence is believed to boost the real estate market in 2013. Trend of Real Estate Marketing in 2013, Riding on consumer confidence, the real estate market is expected to chalk up continued growth. Demand for low-rise units should return after buyers delayed their purchase decision in the past year. Condominium should further enjoy a brisk demand for units along new transport routes and major business areas, supported by favorable factors like the construction of new and extended mass transit routes which boost both demand and supply in new locations. Provincial demand will rise in provinces which experience high growth in industrial and tourism income and provinces which are the strategic points of cross-border trade and logistics. Low interest rate and competitive property and mortgage loan businesses are on the plus side for consumers.
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However, if the pace of housing price adjustment surpasses real demand, this could lead to sale contraction. Another risk factor concerns the high number of units to be completed in each year. Some of bought units could be re-sold, creating excess supply. Vice versa, a price increase will force buyers to make a quicker decision and encourages the launch of new projects in suburban areas. Small-sized units will be in higher demand, due to the current consumer behavior and purchasing power as well as an increase in land prices and construction costs. Developers themselves are focusing on the development of small units and adjusting to the construction cost. Supply and demand of small units like condominium, duplex house and townhouse will rise. Demand of single houses will remain strong, but the growth rate depends on the economic growth and consumer confidence as well as the expansion of transport routes - new roads, expressways and river bridges. Importantly, the completion and construction of new mass-transit routes will drive up the demand. Meanwhile, growing residential demand in provinces could represent a new opportunity for all developers.
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Other Information Financial structure The company’s securities 1. Common shares Accounting year
Registered capital - Value (Bt) - No. of shares Registered capital - Value (Bt) - No. of shares - Par value (Bt. /Shares)
31 Dec.2009
31 Dec.2010
31 Dec. 2011 31 Dec. 2012
6,552,000,000 1,092,000,000
6,552,000,000 1,092,000,000
5,961,161,256 5,961,161,256
5,961,161,256 5,961,161,256
4,726,329,720 787,721,620 6.00
4,726,344,720 787,724,120 6.00
4,726,456,320 4,726,456,320 1.00
5,641,047,963 5,641,047,963 1.00
As of 31 December 2009 , the company’s registered capital stood at Bt6,552,000,000 (1,092,000,000 shares at Bt6 par value) and paid-up capital totaled Bt4,726,329,720 (787,721,620 shares at Bt6 par value). As of 31 December 2010, the company’s registered capital totaled Bt6,552,000,000 (1,092,000,000 shares at Bt6 par value) and paid-up capital totaled Bt4,726,344,720 (787,724,120 shares at Bt6 par value). The paid-up capital increased Bt15,000 following the exercise of warrants (for 2,500 shares at Bt6 apiece) in December. The new shares were registered with the Commerce Ministry on 11 January 2010. On 29 April 2011, the shareholder resolutions are as follows; 1. To cancel 160,405,804 common shares, Bt6 par value, totaling Bt962,434,824. 2. To cancel 135,000,000 common shares, Bt6 par value, totaling Bt810,000,000. 3. To reduce the registered capital from Bt6,552,000,000 (1,092,000,000 common shares, Bt6 par value), to Bt4,779,565,176 (796,594,196 common shares, Bt6 par value), by cancelling shares as in Resolutions No. 1 and 2. 4. To change the par value from Bt6 to Bt1. 5. To increase the registered capital from Bt4,779,565,176 (4,779,565,176 shares, Bt1 par value) to Bt5,961,161,256 (5,961,161,256 shares, Bt1 par value) through the issuance of 787,730,720 shares, at Bt1 par value to existing shareholders. A number of 393,865,360 new shares, at Bt1 par value, will also be reserved for warrant exercise. (Details in No.2 of Warrants) As of 31 December 2011, the company’s registered capital stood at Bt5,961,161,256 (5,961,161,256 shares with Bt1 par value),from 30 December 2010, following the reduction of capital by Bt1,772,434,824 (295,405,804 shares with Bt6 par value) per Resolutions No. 1, 2 and 3. to Bt4,779,565,176 (796,594,196 shares with Bt6 par) through the cancellation of unallocated common shares. The company also raised the registered capital per Resolutions No. 4 and 5, to Bt5,961,161,256 (5,961,161,256 shares at Bt1 par). Paid-up capital increased to Bt4,726,456,320 (4,726,456,320 shares at Bt1 par), resulting from the exercise of warrants worth Bt39,600 (39,600 shares at Bt1 par) in December 2010 and the exercise of warrants worth Bt72,000 in June 2011 (72,000 shares at Bt1 par). The company registered the capital increase with the Commerce
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Ministry following the warrant exercises on 13 January 2011 and 11 July 2011, respectively. As of 31 December 2012, the Company’s registered and paid-up capital rose to Bt5,641,047,963 ( 5,641,047,963 shares at Bt1 par value). This follows the capital increase of Bt787,730,720 (through the issuance of 787,730,720 at Bt1 par value) as well as the exercise of warrants (PF-W2) in June and November 2012 worth Bt52,928,322 (for 52,928,322 shares at Bt1 par value) and the exercise of warrants PF-W3) in September 2012 worth Bt73,932,601 (for 73,932,601 shares at Bt1 par value). The new shares were registered with the Ministry of Commerce on 29 June 2012, 6 July 2012 and 12 October 2012, respectively. 2. Warrants Free warrants to right offering subscribers: Shareholders at the annual meeting on 29 April 2011 approved the issuance of free warrants to existing shareholders who subscribe for capital-increase shares at the ratio of one warrant to every 2 new shares subscribed. (Detail is in No.1 Common Shares). Detail is as follow; No. of warrants 393,865,360 units Maturity 3 years from issue date Exercise date Last working day of each quarter Exercise price 1 baht Exercise ratio 1:1 To date, the company has not yet issued the warrants. Warrants A number of 393,865,295 warrants are allocated to right-offering subscribers. The warrants were listed on the Stock Exchange of Thailand on 18 July 2012 and started trading on 1 August 2012. The warrants were issued on 18 July 2012 and will expire on 18 July 2015. In September 2012, the Company received the Bt73,932,601 advance payment for the exercise of 73,932,601 warrants (for 73,932,601 shares at Bt1 par value). The Company registered the new shares worth Bt73,932,601 with the Ministry of Commerce on 12 October 2012. 3. Debentures Details of outstanding debentures as of 31 December 2012 are as follows; (A) Partially-collateralized debentures #1/2010* Specific name : Partially-collateralized debentures of Property Perfect Public Company Limited #1/2010, maturing in 2013 Type : Holder-bearing, partially-collateralized debentures, with trustee No. of debentures : 1,500,000 units Face value : 1,000 Baht Issue size : Bt1,500 million Offering method : Public offering to the general public and institutional investors Issue date : 26 February 2010 Maturity : 3 years from issue date Maturity date 26 February 2013 Interest rate : Fixed 5.9% per annum Interest payment schedule : 26 February, 26 May, 26 August and 26 November of every year throughout the debentures’ life. Principal payment : Principal payment maturity date, 26 February 2013
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Early redemption Other significant condition Credit rating Trustee Registrar Secondary Market
: : : : : :
None Debt to equity ratio must be maintained at no more than 1.75:1 “BBB/Stable” by Tris Rating Co., Ltd. TMB Bank Public Company Limited TMB Bank Public Company Limited Thai Bond Market Association
* Redemption on 26 February 2013. (B) Secured debentures #3/2010 Specific name : Secured debentures of Property Perfect Public Company Limited #3/2010, maturing in 2013 Type : Holder-bearing, secured debentures with trustee No. of debentures : 1,000,000 units Face value : 1,000 Baht Issue size : Bt1,000 million Offering method : Public offering to the general public and institutional investors Issue date : 18 November 2010 Maturity : 3 years from issue date Maturity date : 18 November 2013 Interest rate : Fixed 5.8% per annum Interest payment schedule : 18 November, 18 February, 18 May and 18 August of every year throughout the debentures’ life. Principal payment : Principal payment maturity date, 18 November 2013 Early redemption : None Other significant condition : Debt to equity ratio must be maintained at no more than 2:1 Credit rating : “BBB-/Stable” by Tris Rating Co., Ltd. Trustee : Thanachart Bank Public Company Limited Registrar : Thanachart Bank Public Company Limited Secondary Market : Thai Bond Market Association
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(C) Partially-collateralized debentures # 1/2012 (1) Specific name : Partially-collateralized debentures of Property Perfect Public Company Limited #1/2012 (1), maturing in 2014 Type : Unsecured holder-bearing debentures with trustee No. of debentures : 500,000 units Face value : 1,000 Baht Issue size : Bt 500 million Offering method : Public offering to the general public and institutional investors Issue date : 15 March 2012 Maturity : 2 years from issue date Maturity date 15 March 2014 Interest rate : Fixed 5.35 % per annum Interest payment schedule : 15 March, 15 June, 15 September and 15 December of every year throughout the debentures’ life. Principal payment : Principal payment maturity date, 15 March 2014 Early redemption : None Other significant condition : Debt to equity ratio must be maintained at no more than 2:1 Credit rating : “BBB Stable” by Tris Rating Co., Ltd. Trustee : Thanachart Bank Public Company Limited Registrar : Bank of Ayudthaya Public Company Limited Secondary Market : Thai Bond Market Association (D) Partially-collateralized debentures # 1/2012, (2 ) Specific name : Partially-collateralized debentures of Property Perfect Public Company Limited #1/2012 (2), maturing in 2015 Type : Unsecured holder-bearing debentures with trustee No. of debentures : 2,000,000 units Face value : 1,000 Baht Issue size : Bt 2,000 million Offering method : Public offering to the general public and institutional investors Issue date : 15 March 2012 Maturity : 3 years from issue date Maturity date 15 March 2015 Interest rate : 5.35% per annum in 1st-2nd years and 6.25% per annum in 3nd year (Average 5.65 % per annum ) Interest payment schedule : 15 March, 15 June, 15 September and 15 December of every year throughout the debentures’ life. Principal payment : Principal payment maturity date, 15 March 2015 Early redemption : None Other significant condition : Debt to equity ratio must be maintained at no more than 2:1 Credit rating : “BBB Stable” by Tris Rating Co., Ltd. Trustee : Bank of Ayudthaya Public Company Limited
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Registrar Secondary Market
: Thanachart Bank Public Company Limited : Thai Bond Market Association
(E) Short-term debentures # 1/2012(1) Specific name : Short-term debentures of Property Perfect Public Company Limited #1/2012 (1), maturing on 5 April 2013 Type : Unsecured holder-bearing debentures with trustee No. of debentures : 800,000 units Face value : 1,000 Baht Issue size : Bt 800 million Offering method : Public offering to the general public and institutional investors Issue date : 9 August 2012 Maturity : 239 Days from issue date Maturity date 5 April 2013 Interest rate : Fixed 4.75 % per annum Interest payment schedule : Principal payment maturity date, 5 April 2013 Principal payment : None Early redemption : Debt to equity ratio must be maintained at no more than 2:1 Other significant condition : “BBB- Stable” by Tris Rating Co., Ltd. Registrar : Bank of Ayudthaya Public Company Limited Trustee : Thai Bond Market Association (F) Short-term debentures # 1/2012 (2) Specific name : Short-term debentures of Property Perfect Public Company Limited #1/2012 (2), maturing on 6 May2013 Type : Unsecured holder-bearing debentures with trustee No. of debentures : 1,000,000 units Face value : 1,000 Baht Issue size : Bt 1,000 million Offering method : Public offering to the general public and institutional investors Issue date : 9 August 2012 Maturity : 270 Days from issue date Maturity date 6 May 2013 Interest rate : Fixed 4.85 % per annum Interest payment schedule : Principal payment maturity date, 6 May 2013 Principal payment : None Early redemption : Debt to equity ratio must be maintained at no more than 2:1 Other significant condition : “BBB- Stable” by Tris Rating Co., Ltd. Registrar : Bank of Ayudthaya Public Company Limited Trustee : Thai Bond Market Association
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(G) Partially-collateralized debentures # 2/2012 Specific name : Partially-collateralized debentures of Property Perfect Public Company Limited #2/2012, maturing in 2015 Type : Unsecured holder-bearing debentures with trustee No. of debentures : 3,000,000 units Face value : 1,000 Baht Issue size : Bt 3,000 million Offering method : Public offering to the general public and institutional investors Issue date : 9 November 2012 Maturity : 3 years from issue date Maturity date 9 November 2015 Interest rate : Fixed 5.45% per annum Interest payment schedule : 9 February, 9 May, 9 August and 9 November of every year throughout the debentures’ life. Principal payment : Principal payment maturity date, 9 November2015 Early redemption : None Other significant condition : Debt to equity ratio must be maintained at no more than 2:1 Credit rating : “BBB Stable” by Tris Rating Co., Ltd. Trustee : Bang of Ayudthaya Public Company Limited Registrar : Thanachart Bank Public Company Limited Secondary Market : Thai Bond Market Association 4. Bills (bill of exchange and promissory notes) As of 31 December 2012, the Company’s outstanding bills were valued at Bt589.06 million.
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71
Timing
Director Specialist Expert for Debt Management Director Director Director Assistant to Country Executive Director of SEA Group
1996 - 2000 1994 - 1998 1994 1989 1986 1979 -1980
w Certificate in Executive Program, Harvard University, USA.
Government Officer Inspectors-General / Director Deputy Director / Director
Deputy Chairman / Chairman of The Remuneration Committee Chairman of Audit Committee Director / Independent Director Retired Government officer Government Officer
Chief Executive Officer/Deputy Executive Director Director Director Director Director Director
Chief Executive Director Chairman Chairman of Remuneration Committee Managing Director Fellow Member Consultant Engineer/ Managing Director Head of Construction Research Section
Designation
2004 2000 - 2004 1998 - 2000
0.000% 2010 - Present 2007- April 2010 2007- Present 2006 2004 - 2006
0.831% 1985 - Present 2007 - Present 2007 - Present 2002 - Present 1999 - Present 1995 - Oct. 2010
0.001 % 2008 - Present 1992 - Present 2005 - 2009 1995 - Present 1995 - Present 1984 - 1995 1978 - 1984
Equity Holding
Career experience within the past 5 years
w Certificate in Stock Market Development Program Securities and Exchange Commission, Washington DC, USA
3 Mr.Virayuk Puntupetch 66 w Master of Science Deputy Chairman / w Bachelor of Arts (Political Science), Independent Director / w Certificate in Financial Policy Analysis Program Chairman of The Remuneration Committee International Monetary Fund, Washington DC, USA.
58 w Bachelor of Laws Chulalongkorn University w Thai Barrister-at-Law Thai Bar Association
2 Mr.Chainid Ngow-Sirimanee Chief Executive Officer/ Deputy Chief Executive Director/ Authorized Signatory Directors
Academic Qualifications
65 w Ph.D. University of Illinois w Audit Committee Program (ACP) 13/2006 ; Director Accreditation Program (DAP) 52/2006 ; Thai Institute of Directors; IOD
Age
1 Dr.Tawatchai Nakhata Chairman / Chief Executive Director/ Authorized Signatory Directors
Name-Title
Person of the Company Management and Authorized
Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited The Secretariat of the Prime Minister Office Government Officials in Charge of International Trade Affairs The Office of Thai Trade Representative Government Officials of Prime Minister’s Office Ministry of Finance / Vayupak Fund Fiscal Policy Office / Office of General Administration for 33rd Annual Meeting of the Board of Governors of Asian Development Bank Office of the Neighboring Countries Economic Development Cooperation Fund Fiscal Policy Office Saving & Investment Policy Division, Fiscal Policy Office Capital Market Development Policy Division, Fiscal Policy Office Financial and Financial Institution Policy Division, Fiscal Policy Office World Bank - Washington DC, USA.
Property Perfect Public Company Limited Bright Development Bangkok Co., Ltd. / Property Development Centrepoint Shopping Mall Co., Ltd. / Property Development Krungthep Land Public Company Limited / Property Development Estate Perfect Company Limited / Property Development Thai Property Public Company Limited / Property Development (Formerly known as “Rattana Real Estate Public Company Limited”)
Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited Ceda Co., Ltd. / Structural engineering design service The Engineering Institute of Thailand Ceda Co., Ltd. / Structural engineering design service Public Works Department, Ministry of the Interior
Company / Business Type
72
7 Mr.Phairat Senachack Director / Executive Director / Consultant of Chief Executive Officer / Authorized Signatory Directors
63 w Mini MBA Thammasat University w Bachelor of Business Administration Assumption University w Director Certification Program (DCP)74/2006, w Director Accreditation Program (DAP)30/2004; Thai Institute of Directors(IOD)
55 w Ph.D., International Management, 0.000% 2010 - Present Walden University, Naples, Florida USA. 2005 - Present w A.C.A. Certificate, American Accreditation Council for Accountancy, USA. 2008 - Present w M.B.A., Management, The University 2007 - Present of Sarasota, Florida, USA. 2007 - Present w B.A., Accountancy & Management, 2006 - Present Eckerd College-St. Petersburg, USA. 2005 - Present w Audit Committee Program(ACP) 10/2005, 2004 - Present Director Accreditation Program(DAP) 48/2005, 2001 - Present Director Certification Program (DCP) 70/2006, 2001 - Present The Role Of The Chairman Program(RCP) 14/2006 1997 - Present Understanding the Fundamental of Financial 2002 - 2003 Statement (UFS) 7/2007; Thai Institute of 1998 - 2002 Directors. (IOD)
6 Dr.Thamnoon Ananthothai Director / Independent Director / Audit Committee / Risk Management Committee
1996 - 2010
0.000 % 2011 - Present
1986 - Present
1.330% 2004 - Present
1993 - Presen
58 w Master of Laws, The George Washington University, USA w Bachelor of Laws, Thammasat University w Director Accreditation Program(DAP)77/2005; Thai Institute of Directors(IOD)
Timing
0.000 % 2010 - Present 1998 - Present
Equity Holding
5 Mr.Vidhya Nativivat Non Executive Director / Nominating Committee/ Remuneration Committee
Academic Qualifications
61 w Ph.D., Laws, Ramkhamhaeng University w Master of Laws, Ramkhamhaeng University w Audit Committee Program (ACP) 13/2006 ; Director Accreditation Program (DAP) 52/2006 ; Thai Institute of Directors(IOD)
Age
4 Dr.Somsak Toruksa Director / Independent Director / Audit Committee / Chairman of Nominating Committee
Name-Title
Director /Executive Director / Consultant of Chief Executive Officer Director / Executive Director / Deputy Chief Operating Officer
Risk Management Committee Director / Independent Director / Audit Committee Director / Audit Committee Vice Chairman/Chairman of Audit Committee Director / Chairman of the Audit Committee Director / Chairman of the Audit Committee Director / Audit Committee Executive Director Executive Board Member / Sub-Committee Director of The Investment Management Sub-Committee Director of Economic Sector Sub-Committee Dean of College of Business Administration Managing Director/ President & CEO
Non Executive Director / Nominating Committee / Remuneration Committee Managing Director
Chairman of Nominating Committee Director / Independent Director / Audit Committee Managing Director
Designation
Career experience within the past 5 years
Property Perfect Public Company Limited
Property Perfect Public Company Limited
The Federation of Thai Industries. Dhurakij Pundit University / University DBS Thai Danu Securities Limited / Securities
Bangkok University / University Better World Green Public Company Limited IFS-Capital (Thailand) Public Company Limited Eastern Printing Public Company Limited Ua Withaya Public Company Limited Merchant Partners Securities Limited Clearing House of The Agricultural Futures Exchange of Thailand The National Social Security Fund.
Property Perfect Public Company Limited Property Perfect Public Company Limited
Bunchong and Vidhya Law Office Ltd. / Law
Property Perfect Public Company Limited
Somsak Toruksa Law Office Co., Ltd. / Law
Property Perfect Public Company Limited Property Perfect Public Company Limited
Company / Business Type
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
73
Academic Qualifications
54 w B.A. Business Administration, National University of Singapore.
Age
64 w MBA, Thammasat University w Bachelor of Economic , Thammast University w Advanced Management Program, Harvard Business School, Boston, USA.
61 w Master of Public Administration Science, Chulalongkorn University w Bachelor of Laws ,Second Class Honours , Chulalongkorn University
10 Mr.Krish Follett Director / Independent Director / Chairman of Audit Committee / Remuneration Committee
11 Mr.Anuwat Maytheewibulwut Director / Independent Director
9 Mrs.Nuanual Swasdikula-Na-Ayudhaya 63 w Bachelor of Laws , Thammasat University Director / w Thai Barrister-at-Law Thai Bar Association Independent Director / Chairman of Risk Management Committee / Nominating Committee
8 Mr.Ooi Bun Aun Non Executive Director
Name-Title
Timing
Director/ Independent Director / Chairman of Audit Committee / Remuneration Committee Director/ Independent Director / Chairman of Audit Committee Assistant Governor, Operation Division Senior Director of Internal Audit Department Senior Director of Audit 1 Dept. for Finance Control 1 Division Director of Reorganization Department Director of Operation Division, Northeastern Region Office Assistant Director of Electronics Financial Transactions Center Assistant Director of Northern Region Office Establish Unit Director of Capital Market Audit Division Chief of Special Department in Financial Institution Supervision in Practice
Nominating Committee Director / Independent Director / Chairman of Risk Management Committee Executive Vice President Senior Manager for Commercial Finance and Construction Finance Commercial Finance Manager Industrial and Commercial Finance Manager Business Development Manager
Non Executive Director Financial & Management Consultancy Managing Director Honorary Executive Director Group Vice Chairman and President
Designation
0.000% 2012 - Present Director / Independent Director Apr. 2012 - Sep. 2012 Deputy Permanent Secretary 2008 - Mar.2012 Director General Nov.2008 - Nov. 2011 Independent Director 2006 - 2008 Governor of Samut Prakarn Province 2005 - 2006 Governor of Samut Songkhram Province 2004 - 2005 Governor of Phangnga Province
2008 - 2009 2004 - 2008 2002 - 2004 2000 - 2002 1998 - 2000 1996 - 1998 1995 - 1996 1992 - 1995 1991 - 1992
2010 - Present
0.000% 2010 - Present
1996 - 2008 1994 - 1996 1992 - 1994 1991 - 1992 1990 - 1991
0.000 % 2010 - Present 2009 - Present
0.000 % 2008 - Present 2007 - Present 2004 - 2006 1996 - 2006 2003 - 2004 1998 - 2003
Equity Holding
Career experience within the past 5 years
Property Perfect Public Company Limited Ministry of Interior (MOI) Department of Land, Ministry of Interior PTT Public Company Limited Samut Prakarn Province, Ministry of Interior Samut Songkhram Province, Ministry of Interior Phangnga Province, Ministry of Interior
Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Bank of Thailand Security and Exchange Commission Bank of Thailand
Amanah Leasing Public Company Limited
Property Perfect Public Company Limited
TMB Bank Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited TMB Bank Public Company Limited
Property Perfect Public Company Limited Property Perfect Public Company Limited
Property Perfect Public Company Limited East Asset Alliance Limited.(“EAAL�) Depfa Investment Bank Ltd, Hong Kong. Republic of Cyprus in Special Administrative Regions, Hong Kong, China. The Group Subsidiary of Standard Bank Asia Ltd. TCC. (Thai Beverage Group and Companies)
Company / Business Type
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Academic Qualifications
51 w M.A. of Science- Finance, university of Houston – Clear lake, Texas, USA. w B.A. of Science , Economics& Business Administration-Finance, Kasetsart University
Age
Asst. Chief Financial Officer Property Perfect Public Company Limited Executive Director / Accounting Division Director Property Perfect Public Company Limited Executive Director / Accounting Division Deputy Director Property Perfect Public Company Limited
Property Perfect Public Company Limited Property Perfect Public Company Limited
0.091 % 2008 - Present 2005 - 2007 1993 - 2004
2008 - 2010 1993 - 2007
Estate Perfect Co., Ltd. Property Perfect Public Company Limited Property Perfect Public Company Limited
Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited Property Perfect Public Company Limited Baanpan Engineering & Holding Co., Ltd. Estate Perfect Co., Ltd.
Asst. Chief Business Development Officer Research and Business Development Director Executive Director / Deputy Chief Business Development Officer Asst. Chief Operating Officer Director of Design & Project Development Division
Executive Director / Deputy Chief Financial Officer Asst. Chief Financial Officer Executive Director / Finance & Treasury Director Executive Director / Deputy Chief Operating Officer 1 Asst. Chief Operating Officer Managing Director Executive Director / Deputy Chief Operating Officer 2
Property Perfect Public Company Limited Research Dept. / BFIT Securities Limited / Securities BOA Asset Management company limited / Securities Bank of Asia Public Company Limited / Securities Property Perfect Public Company Limited Ordinary Partnership, Thammathit Law Office / Law Sapthamrong Securities Limited / Financial Institution Sri Nakorn Credit Foncier Limited / Financial Institution
Property Perfect Public Company Limited
Property Perfect Public Company Limited
Company / Business Type
2009 - 2010 2008 – 2009 0.013% 2011- Present
2011 - Present 2008 – 2010 2002 - 2008 2011 - Present 2003 - 2010 1995 – 2003 2011 - Present
Director/ Executive Director& Secretary of Executive / Deputy Chief Supporting Officer 2008 - 2010 Director/ Executive Director& Secretary of Executive / Assistant Chief Business Development Officer 2003-2007 Director of Investor Relation & Information System Division 2000-2003 Head of Research 1999-2000 Sub- Marketing Director 1998-1999 Asst. Director of Provident Fund Dept. 1.424% 1998 – Present Company Secretary 1992 – Present Partner Manager 1994 - 1997 Executive Director 1993 Executive Director
Designation
Note : No.12, Mr. Anuwat Maytheewibulwut appointed to director and independent director on 12 November 2012 replace to Mr.Wanchai Thanittiraporn who resigned from director and independent director on 21 September 2012.
17. Mr.Wongsakorn Prasitvipat 52 w MBA. Chulalongkorn University w Bachelor of Architect Chulalongkorn Executive Director / University Deputy Chief Business Development w Real Estate Course (RECU#10) ChulaOfficer longkorn University 18 Mr.Surasak Vacharapongpreecha 49 w MBA Thammasat University w Bachelor of Accountancy Thammasat Asst. Chief Financial Officer University w Certified Public Accountant
13 Mr.Pramote Rermyindee Company Secretary
Timing
0.000 % 2011 - Present
Equity Holding
59 w Bachelor of Laws Chulalongkorn University w Thai Barrister-at-Law Thai Bar Association w Graduate Diploma in Business Law Thammasat University w Director Certification Program(DCP) 69/2006 w Director Accreditation Program (DAP) 43/2005 Finance for Non-Finance Director; Thai Institute of Directors.(IOD) 0.000 % 14 Ms.Supee Reodacha 53 w MBA Roosevelt University, USA w Bachelor of Economic Executive Director / Thammasat University Deputy Chief Financial Officer 0.018% 15 Mr.Wicharn Siriwetwarawut 52 w MBA. Chulalongkorn University w Bachelor of Civil Engineer Chulalongkorn Executive Director / University Deputy Chief Operating Officer 1 0.000 % 16 Mr.Pornswat Katechulasriroj 46 w Bachelor of Engineer , King Mongkut’s Institute of Technology Ladkrabang Executive Director / Deputy Chief Operating Officer 2
12 Ms.Sirirat Wongwattana Director / Executive Director / Deputy Chief Supporting Officer / Authorized signatory directors
Name-Title
Career experience within the past 5 years
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
Details of Positions Details of directors, executive directors and directors of Property Perfect Plc., subsidiary company and affiliates as of 31 December 2012.
11. 12. 13. 14. 15. 16. 17. 18.
*, / *, / *, / @ //, /// //, /// //, /// //, /// ///
/
/
/
/
/
/
/
KL
/
UST
PSC
PFP
U&I
CenterPoint
We Retail
Residence
Bright
X
KA
X,XXX *, XX /, //, /// /, //, /// *, / *, / / /, //, /// /
SG
Dr.Tawatchai Nakhata Mr.Virayuk Puntupetch Mr.Chainid Ngow-Sirimanee Mr.Phairat Senachack Dr.Somsak Torukraksa Dr.Thamnoon Ananthothai Mr.Vidhya Nativivat Ms.Sirirat Wongwattana Mr.Ooi Boon Aun Mrs.Nuanual SwasdikulaNa-Ayudhaya Mr.Krish Follett Mr.Wanchai Thanittriporn Mr.Pramote Rermyindee Ms.Supee Reodecha Mr.Wicharn Siriwetwarawut Mr.Pornswat Katechulasriroj Mr.Wongsakorn Prasitvipat Mr.Surasak Vacharapongpreecha
PPI
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
ESTPF
name
Associated Company
Subsidiary Company
Company
PF
Company ‘ s name
/
/
/
/
/
/
/ /
/ /
/ /
Note : : No.12, Mr. Anuwat Maytheewibulwut appointed to director and independent director on 12 November 2012 replace Mr.Wanchai Thanittiraporn who resigned from director and independent director on 21 September 2012.
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ANNUAL REPORT 2012 1. PF ESTPF Bright Residence We retail Centrepoint U&I PFP PSC UST PPI SG KA KL 2. X XXX / ///
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PROPERTY PERFECT PUBLIC COMPANY LIMITED
= Property Perfect Public Company Limited = Estate Perfect Company Limited = Bright Development Bangkok Company Limited = Residence Number Nine Co., Ltd. = We Retail Public Company limited = Centerpoint Shopping Mall Company Limited = U&I Construction Bangkok Co., Ltd. = Perfect Prefab Co., Ltd. = Perfect Sport Club Co., Ltd. = Uniloft Service (Thailand) Co., Ltd. = Property Perfect International Pte.Ltd. = Share Group Co., Ltd. = Kabushiki Kaisha Kiroro Associates Co., Ltd. = Krungthep Land Public Company Limited = Chairman = Chief Executive Director = Director = Executive
XX * // @
= Deputy Chairman = Independent Director = Executive Director = Company Secretary
Executives’ remuneration Financial benefits The company has in place a committee to consider remunerations. The committee is responsible for drafting the policy and criteria for the remuneration of chief executive officer, directors, and the company’s advisors. It also takes charge in setting the annual pay increase and interim salary adjustment, as well as other benefits to reward the contribution from executives and employees. Under its responsibility is also the regulations on employment, code of conduct and appropriate and fair punishment clauses. A) Director remuneration Meeting allowances and director fees paid out by the company in 2011and 2012 are as follows: ( Unit: Million Baht)
2012 Name
Dr.Tawatchai Nakata Mr.Virayuk Puntupetch
Position
Chairman / Chief Executive Director Deputy Chairman / Chairman of Remuneration Committee Mr.Chainid Ngow-Sirimanee Chief Executive Officer and DeputyChief Executive Director Dr.Somsak Toruksa Director / Audit Committee / Chairman of the Nominating Committee Dr. Thamnoon Ananthothai * Director / Audit Committee / Risk Management Committee Mr.Phairat Senachak Director / Executive Director Mr.Vidhya Nativivat Director / Nominating Committee / Remuneration Committee Ms.Sirirat Wongwattana Director / Executive Director Mr.David Bryce Van Oppen Director Mr.Ooi Boon Aun Director Mrs.Nuanual Swasdikula-Na Director/ Nominating committee / -Ayudhaya * Chairman of Risk Management Committee Mr.Krish Follett* Director/ Chairman of Audit Committee Mr.Wanchai Thanittiraporn ** Director Mr.Anuwat Maytheewibulwut Director Mr.Pramote Rermyindee Company Secretary Mr.Boonliam Luangnakthongdee Risk Management Committee Mr.Chirdsak Kukiattinun Risk Management Committee Miss.Somsri Kiattirarat Assistance Company Secretary Total
2011
Meeting Meeting Allowance Pension Allowance Pension
0.600 0.470
-
0.700 0.530
1.200 0.650
0.300
-
0.350
0.650
0.620
-
0.590
0.650
0.810
-
0.780
0.650
0.300 0.310
-
0.350 0.410
0.650 0.650
0.300 0.250 0.730
-
0.350 0.050 0.350 0.780
0.650 0.650 0.650
0.780 0.200 0.100 0.210 0.210 6,190
-
0.730 0.200 0.240 0.240 6.650
0.6500.450 0.400 0.400 8,950
Note ( Some directors, aside from meeting allowance, are receiving salaries as executives and members of the Executive Board)
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PROPERTY PERFECT PUBLIC COMPANY LIMITED
resigned from director on 26 February 2011. resigned from director and independent director on 12 September 2011. Winning shareholders’ approval as director and independent director at 5/2012 shareholder meeting on 12 November 2012.
B.) The remunerations for the executivesboard members and executive directors in 2010-2012. Details are as follows: Types of expenses
Amount (person) Salary Bonus/ Others Total * **
2011** (Bt. million)
2010 (Bt. million)
10 46.38 3.96 50.34
10 35.81 3.50 39.31
13 64.27 4.55 68.82
Consisting of welfare, social security fund, and contribution to the provident fund paid by the company and employees at the rate of 3-10% of salary The remunerations for directors and executives in organization chart on1 January 2011.
B) Other payments - None
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2012** (Bt. million)
Corporate governance The Board of Directors recognized the value of good corporate governance, in enhancing transparency, the company’s competitiveness, trust from shareholders, investors and other stakeholders, and the long-term business merits. Stakeholders and society’s benefits were taken into account. The company has followed through the 5 sections of corporate governance practices as prescribed by the Stock Exchange of Thailand as follow: Section 1: Shareholders’ rights The Board of Directors emphasized shareholders’ rights and ensured equitable treatment to all, as prescribed in the company’s rules and regulations and relevant laws. Shareholders hold the rights to attend annual meetings, the rights to appoint their proxy to vote at the meetings, the rights to vote on the appointment or removal of individual directors, the rights to cast votes in significant matters, the rights to dividend, the rights to raise opinions and questions at the meetings, and the rights to sufficient and timely information. The Board sets the annual shareholder meeting (AGM) once a year, within 4 months after the end of each accounting year. If necessary, an extraordinary shareholder meeting will be called where shareholders can vote on issues which could affect their interests, or legal issues which need shareholders’ approval. In organizing the AGM, the Board puts forward the shareholders’ rights. Invitation containing agenda in details and the Board’s opinions was dispatched at least 15 days prior to the meeting date, with the proxy form, the list of independent directors and proxy advice. With timely information, shareholders can make decisions prior to the meeting date or could appoint independent directors as their proxy. The AGM was published in daily newspapers for at least 3 consecutive days and at least 3 days ahead of the meeting. The meeting details and agenda were also posted on the company’s website 30 days before the meeting, so that shareholders or investors can submit their questions in advance. During the meeting, the Board facilitates shareholders’ attendance and voting, and refrains from any actions which will limit their attendance. All shareholders are given full freedom to raise their questions and opinions. Section 2: Equitable Treatment to Shareholders The company values equitable shareholder treatment. Shareholders’ rights are covered in the corporate governance policy and all are treated in a fair manner through these measures: w The process to organize AGM is transparent and efficient, in line with the company’s rules and regulations and relevant laws. Shareholders are given fair chance to raise opinions and questions, with sufficient time allocation. w Shareholders are asked to review and vote on directors on the individual basis, and to approve the directors’ remuneration, auditor’s appointment, auditor fee and other agenda as described in the meeting invitation. w Ballots are issued for all agenda. w Shareholders-cum-executives are barred from proposing extra agenda without notifying others in advance, so that all shareholders have sufficient time in reviewing details of each agenda. w Shareholders who cannot attend the meeting can appoint independent directors or other persons as their proxy, who will cast votes on behalf of them. The company’s proxy form is designed to allow shareholders to state their voting opinions. w The meeting is thoroughly recorded. The meeting minutes contain all significant information like the resolutions and votes, questions, explanations and opinions raised.
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ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
w Measures against insider trading among directors and executives are in place. All must report their shareholding, as well as the holdings of spouses and under-aged children. They must report on any change in the shareholdings, after acquisition, disposal or transfer, to the Securities and Exchange Commission under the Securities and Exchange Act BE2535’s Article 59, within 3 days after the acquisition, disposal or transfer. w In place are the measures and procedure in approving transactions with possible conflict of interest or connected transactions, with full compliance with the Stock Exchange of Thailand’s regulations on connected transactions, for the equitable benefits of shareholders. Moreover, the Audit Committee also thoroughly screened connected transactions and transactions with possible conflict of interest, before submission to the Board, as required by the SET. Section 3: Stakeholders’ rights The company realizes the significance of all stakeholders - shareholders, employees, customers, competitors, creditors (suppliers and contractors), relevant government agencies, society and environment. The policies are geared towards fairness to all groups of stakeholders as follow: Shareholders The company is concerned about transparency in important information disclosure to all shareholders accurately, completely and timely through channels including the SET’s electronic media, the company’s website, announcement in newspapers, press releases and written notices. Employees The company, through the Remuneration Committee, provides the appropriate pay structure for employees, as well as the systematic promotion process for fairness to all. A manual is issued to all employees, notifying them all of eligible welfares. The provident fund is in place for all employees. Customers The company has determined to not only quality construction but also code of conducts by taking care and responsible for customers, offering quality and standard services, and solving customer complaints or providing advices as the earliest. Competitors The company has adhered to good competition rules and avoided dishonest practices to destroy competitors. Creditors Product distributors - The company has a clear period for placing invoice and check payment after handing over/ inspecting works, informs contractors before they are hired and proceed payment to be in line with regulations strictly to ensure confidence of creditors. Contractors - The company has a criteria for contractor selection to have efficient contractors and offer them equal opportunity. The company has set fair price as the reference. Even though prices of some items are greater than agreed prices, the company can maintain the average price on par with the market price. Occasionally, the company has taken
80
degree of difficulty of working condition into account for pricing and authorised each hiring sub-committee to consider the matter properly based on objectives and success in transparent procurement. To ensure contractors’ confidence and let them growth along with the company, the company has stated the clear construction progress and fair construction payment installment, inspection, and invoice placing in agreements with contractors for equal treatment, and set payment period in compliance with the company’s regulations. Social and environmental activities The Company realizes the importance of social responsibility and participation in social development. Environmental responsibility is also the top priority, to ensure the quality of life for customers, surrounding communities and the general public. Social activities Property Perfect holds it as a policy to support projects and activities for public benefits, under its commitment towards social development and social responsibility. The Company took the lead in restoring a building of Numprasong Withaya School in Bang Kruay, Nonthaburi. Restoring the building devastated by 2011 flood is part of the “Restoring flooded schools, Building relationships with communities” project under the initiative of the Thai Listed Companies Association and Thai Stock Market Flood Relief Fund. Aside from restoration, the Company also awarded scholarships to all classes. The Company integrated social responsibility into the marketing activities. At the launch of iCondo Sukhumvit 103 project, the Company gave away Bt1,030 for each unit booked and raised Bt123,600. This amount was presented to the Chaipattana Foundation, to assist its flood relief projects. The Company hosted the “Alms-giving” for three consecutive years, to mobilize funds for Luang Phor Alongkot Phonlamuk of Wat Phra Baht Nam Phu in Lop Buri. Project residents took part in donating necessary items, food and medical supplies for HIV patients under the temple’s care. To commemorate His Majesty’s birthday on 5 December 2012, the Company joined hands with Thai Red Cross Society organized a blood donation in recognition of His Majesty’s kindness. Company employees and project residents joined the activity. Environmental activities Property Perfect is committed to promote awareness in environmental conservation and restoration. “Perfect Green Day” was hosted to take project residents to Khlong Kone, Samut Songkhram, for a coastal ecology study and mangrove forest reforestation.
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Section 4: Information Disclosure and Transparency The Board puts emphasis on information disclosure and transparency, with sufficient information released to all stakeholders and measures to ensure the disclosure of accurate, complete and credible information in a timely manner for equal access. Key financial information is sufficiently disclosed in the financial statements, in line with the regulations. They are disclosed via the SET system and the company’s website. The financial statements are reviewed/audited, with unconditional opinions from the auditor and the Board’s approval before the release to shareholders. The Board also expresses its responsibility for the financial statements in the annual report. The company discloses significant financial and non-financial information through the SET system and the company’s website, for accurate, complete, equitable, fair, transparent and timely dissemination to the general public. The Investors Relations and Information Technology Unit is in charge of the dissemination and communicate with local and foreign shareholders, investors, stock analysts accurately, equitably and timely. Investors can contact the Investor Relations Unit for the company’s information at Tel: 0-2247-7500, Fax: 0-2247-7399, e-mail: santirak@pf.co.th, or www.pf.co.th/ir. The Board discloses its role and scope of responsibility as well as those of sub-committees, as well as the number of meetings each director attended under item “Management”. Remuneration of the directors and top executives are shown in item “Directors’ Remuneration”. The company has pursued the Stock Exchange of Thailand’s rules and regulations governing connected transactions or acquisition and disposal of assets of listed companies, whichever is the case. Besides the company has set policies and guidelines to prohibit executives and related persons from using inside information for their own interests. The company has regarded an importance of efficient internal control system for both executives and operational levels. Practices of operational staff and executives are determined and clearly written. The company has set up an internal audit office to exclusively take responsible for efficient operational examination. The internal audit reports the result directly to the Audit Committee. 5. Board of Director’s Responsibility Board of directors’ structure The company requires independent directors account for at least one third of all directors, or at least 3. At present, the company’s board of directors consists of 12 experienced, knowledgeable and capable directors as follows: w Executive director 4 persons w Non-executive director 2 persons w Independent director 6 persons The chairman does not serve as the CEO, to segregate their supervisory and executive roles. All directors possess full independence in giving opinions. Much emphasis is placed on the opinions of the independent directors. In any issue that draws any suggestions or disagreement from independent directors will be reviewed for transparency.
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The Board abides by the minimum requirements of the SEC and SET in formulating independent directors criteria. 1. They must hold no more than 1% of all voting shares in the company, subsidiaries, affiliates, or in the companies which are major shareholders or have controlling power over the company. The shareholding includes that of those related to the particular independent director. 2. They must not have been or are not involved in the management, or employees, wage earners, or advisors on the payroll, or controlling persons of the company, its subsidiaries, affiliates, or equivalent companies, or juristic persons now and at least 2 years before their appointment as independent directors. Former civil servants for advisors of government agencies which are major shareholders or controlling persons are not included. 3. They are not related by blood or registration as parents, spouses, siblings, or children, spouses of any of the children to members of the management, major shareholders, those exercising control, or those about to be nominated as members of the management or controlling entities over the company or subsidiaries. 4. Have absolutely no vested interests in the company, its subsidiaries, affiliates, or major shareholders or controlling entities of the company, which could obstruct their independent judgment. They are not either a significant shareholder or a controlling shareholder who has business relationship with the company, subsidiaries, affiliates now and at least 2 years before their appointment. 5. They do not serve as the auditor of the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant shareholder (with over 10 per cent of voting shares including connected persons’) of the company, controlling entities, or a partner of the audit firm of which auditors perform their jobs on the company, subsidiaries, affiliates, the parent companies or controlling entities at least 2 years before their appointment 6. They do not serve as a professional service provider, including legal or financial services of which fees more than Baht2 million per year are levied on the company, subsidiaries, affiliates, the parent company, or controlling entities, or a significant, controlling shareholder or a partner of the professional service provider at least 2 years before their appointment. 7. They are not appointed to represent the directors of the company, major shareholders, or shareholders who are related to major shareholders. 8. They do not operate a company with the similar nature to and significant competition with the company, subsidiaries or affiliates, or hold a significant ownership in a partnership or act as a director with management power, employees, wage earners and advisor on payroll, or hold over 1% of voting shares of other companies which operate in the same industry or present significant competition against the company or subsidiaries. 9. Have no other characteristics that could bar the expression of their free views on the company’s operations. Sub-Committees The Board has appointed directors accordingly to their credentials to support the supervisory role and enhance supervisory efficiency. Five sub-committees are established with clear role and scope of responsibility consists of Audit Committee, Nominating Committee for directors, Remuneration and Human Resources Committee ,Risk Management Committee and Executive Board. The five sub-committees carry out their tasks in a transparent manner. Details of their names and scope of responsibility are included in item “Management Structure”.
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ANNUAL REPORT 2012
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Responsibilities of the Board of Directors The Board consists of knowledgeable, capable, skilled and experienced persons who realize their roles and responsibilities, which resulted in efficient operations. The Board takes part in formulating the vision, mission, strategies, goals, business plans and resource allocation, to ensure the management’s efficient and effective implementation. The Board values good corporate governance, to enhance transparency and the company’s competitiveness. To instill trust among shareholders, investors and all stakeholders, there is the written corporate governance policy which is reviewed once a year to fit the environment, business direction and international standards. The Code of Conduct is in place so that employees perform in accordance with the corporate governance policy. To prevent conflicts of interest or connected transactions, the Board assigned sub-committees with clear segregation of roles. There are policies, code of practices and the procedure to approve transactions which might carry conflict of interest, as guidelines to executives, employees and relevant parties. Such cover the criteria in endorsing connected transactions, the use of inside information and information disclosure. The Board also demands the management to regularly assess business risks and formulate risk preventing and mitigation measures, and report them to the Board. These include the risks that may affect the company’s performance, as specified in item “Risk Factors”. Board Meetings The Board holds quarterly meetings, aside from extra meetings as necessary, with clear and prepared agenda, to review the quarterly results as well as monitor progress. The chairman and CEO will jointly review the issues, before brining them up to the Board’s meetings. Each director is allowed to propose their own agenda. In each meeting, the chairman allocates sufficient and ample time for discussion. Meeting minutes are written and the minutes, approved by the Board, are stored for inspection by the Board and relevant parties. The minutes of the board of directors and sub-committees in 2009 are in “Management” Section. Board of Directors’ self assessment Executive directors conduct a quarterly evaluation to assess performance in part of their responsibility and the performance evaluation is presented to the company’s Board of Directors to compare with performance in the past. Remuneration The company has appointed the Remuneration and Human Resource Committee to consider remuneration principles and policies for Chief Executive Officer, directors and advisors and determine bonus, salary adjustment annually and during the year, and other benefits to staff in each level. Remuneration determination is based on experience, duty and scope of responsibility, and compare with other companies in the same industry (see details in heading remuneration of directors and management). Directors and Management improvement The company is concerned about the importance of Directors and Management improvement for management succession in the future.
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The company is aware of the importance of human resources in management level by organizing training “Real Estate Business Management”, contents of which include real estate knowledge, law, finance, accounting and good corporate governance to prepare the company’s high-level executives for being directors in the future. For the company’s directors, they participated in trainings held by Thai Institute of Directors and aimed to develop and support directors to take practices of good corporate governance in organization. Surveillance on use of inside information The company has policy to prohibit directors and management from directly and indirectly using inside information for their own benefits. Directors, management and employees who learn about the company’s financial information must not exploit the information one month before announcement of such information to the public. The company informs directors, management and staff mentioned above to avoid trading the company’s securities before the financial statements are disclosed to the public. It also explains directors and management about duties in reporting their holding and change in holding in the company’s securities to the SEC as stipulated in article 59 and punishment in article 275 of the Securities and Exchange Act B.E 2535. The company has also stipulated discipline penalty for the company’s staff who breach the company’s rules and regulations or announcement as stated in rules and regulations governing staff’s operating practices. Human Resources Number of staffs and Employee Remuneration The company and subsidiaries’ No. of employees and remuneration, which consist of salary, bonus, welfare, overtime pay, allowances and provident fund contribution, are as follows: (The amount is excluding that of directors and executives)
Number of staffs Employee Remuneration
31 December 2012
31 December 2011
813 persons Bt495.61 million
800 persons Bt398.06 million
Human resource development policy The company places emphasis on human resource development. Through the HR development policy, the company demonstrates its dedication in enhancing employees’ value. Learning programs are created internally, to promote their knowledge and capability so that they can perform duty efficiently and lead the company towards quality product development for society.
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Reference Auditors
Legal Advisor
Share Registrar
Property Valuation
86
Miss Siriporn Aueanankul Ernst & Young Office Limited 33rd Floor, Lake Rajada Office Complex 193/136-137 New Rajadapisek Road, Bangkok 10110 Tel. 0-2264-0777, 0-2661-6190 Fax. 0-2264-0790, 0-2661-9192 Banchong and Vidhya Law Office 33/35, 33/39-40 Wallstreet Tower 9th Flr. Surawong Road, Kwaeng Suriyawongse ,Bangrak, Bangkok 10500 Tel. 0 2236-2334 Fax. 0 2236-3916 Thailand Securities Depository Co., Ltd. 4th , 6th -7th Flr. ,The Stock Exchange of Thailand Bldg., 62 Ratchadaphisek Road, Klongtoey ,Bangkok 10110 Tel. 0-2359-1200 -1 Fax. 0-2359-1259 Agency for real estate affairs Co., Ltd . 10 Nonsi Rd., Nonsi, Yannawa, Bangkok 10120 Tel.0-2295-3905 Fax. 0-2295-1154 Brooke Real Estate Limited Unit 2005-6, The Millennia Tower 20th Fl., 62 Langsuan Road, Lumpini, Pathumwan, Bangkok 10330 Tel. 0-2652-6300 Fax.0-2652-639 Thai Property Appraisal Lynn Phillips Co., Ltd. 121/47-48 RS Tower Building, 11th Floor, Rachadaphisek Rd., Dindaeng, Bangkok 10320 Tel : 0-2641-2128-32 Fax : 0-2641-2134
87
-
-
-
30
40
-
738
Property Perfect International Pte.Ltd./ Overseas Property Investment We Retail Public Company Limited / Real Estate Development
Perfect Prefab Company Limited / Manufacturer and install Prefab Structures Subsidiaries, indirectly owned Centrepoint Shopping Mall Company Limited / Real Estate Development
-
144
855
946
2111 (MB)
Residence Number Nine Company Limited / Real Estate Development
Subsidiary Estate Perfect Company Limited / 1,102 Real Estate Development Bright Development Bangkok Company 1,207 Limited / Real Estate Development
Company / Type of Business
2012 (MB.) Shareholding
Shareholding
The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. The company’s executive (Mr.Pramote Rermyindee) is a director. The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. The company’s executives (Mr.Pramote Rermyindee and Mr.Wicharn Siriwetwarawut ) are directors . Estate’s director and executive (Mr.Pornswat Katechulasriroj) is a director. The company’s executive (Mr.Wicharn Siriwetwarawut) is a director. The company’s employees (Mr.Pornchai Ketlek and Mr.Sanphet Sukkasem) are directors . The company Director (Dr.Tawatchai Nakata) is a director. The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. The company Director (Dr.Tawatchai Nakata) is a director. The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. The company’s executive (Mr. Pramote Rermyindee) is a director. The company’s executive (Mr.Wicharn Siriwetwarawut) is a director . The company’s employee (Dr.Vorasak Chakrapiyanant) is a director.
Relationship
24 - We Retail Plc. holds 100%. - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director . - The company holds 91.05 %- The company’s executive (Mr.Pramote Rermyindee) is a director . in We Retail Plc.
- - The company holds 100%. - - The company holds 91.05%. - - The company holds 51%. -
- - The company holds 100%. -
461 - The company holds 100%. 798 - The company holds 100%. -
2010 (MB)
1. Transactions of the company with subsidiaries, affiliates and related companies. 1.1 Loans The Company loans to subsidiaries for land purchases and business expansion as well as working capital. Details are as follows;
Connected Transactions
88 -
2 2 1 1
Subsidiaries, indirectly owned Centrepoint Shopping Mall Company Limited / Real Estate Development
Interest Received
Perfect Prefab Company Limited / Interest Received/ Manufacturer and Install Prefab Structures.Interest Receivables 2
-
7 5
Interest Received/ Residence Number Nine Interest Company Limited / Receivables Real Estate Development Property Perfect International Pte.Ltd./Interest Received/ Interest Overseas Property Investment Receivables
-
40 29
58 20
Interest Received/ Interest Receivables
Bright Development Bangkok Company Limited / Real Estate Development
66 16
32 45
2011 (MB.)
Interest Received/ Interest Receivables
Subsidiary Estate Perfect Company Limited / Real Estate Development
Company / Type of Business
2012 Transactions (MB.)
1
-
-
-
21 12
25 13
2010 (MB.)
- We Retails Plc. hold 100%- The company’s director and executive - The company holds (Mr.Chainid Ngow-Sirimanee) is a director . 91.05% in We Retails Plc.- The company’s executive (Mr.Pramote Rermyindee) is a director
- The company holds 100%.- The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. - The company’s executives (Mr.Pramote Rermyindee and Mr.Wicharn Siriwetwarawut) are directors . - Estate’s director and executive (Mr.Pornswat Katechulasriroj) is a director. - The company holds 100%.- The company’s executive (Mr.Wicharn Siriwetwarawut) is a director. - The company’s employees (Mr. Pornchai Ketlek and Mr. Sanphet Sukkasem) are directors - The company holds 100%.- The company Director (Dr.Tawatchai Nakata) is a director. - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. - The company holds 51%. - The company’s executive (Mr.Wicharn Siriwetwarawut) is a director - The company’s employee (Dr. Vorasak Chakrapiyanant) is a director.
- The company holds 100%.- The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. - The company’s executive (Mr.Pramote Rermyindee) is a director.
Shareholding
Relationship Management
1.2 Interest received and interest receivables Loans to subsidiaries carry the interest rate equivalent to 0.25-1 percentage point above the Company’s average financing cost, except for the loan to PPI which is charged at 1%. Details are as follows;
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
89
Revenue from Land Sale /Cost of Land
* = The company project’s roads ** = Leasing Rights
Subsidiaries, indirectly owned Centrepoint Shopping Mall Company Revenue from Limited / Real Estate Development Leasing Rights / Cost of Land Leasing Rights.
Bright Development Bangkok Company Revenue from Limited / Real Estate Development Land Sale / Cost of land
Subsidiary Estate Perfect Company Limited / Real Estate Development
Company / Type of Business Transactions
-
-
-
-
-
-
1
-
2*
2011 (MB.)
-
2012 (MB.)
65
65**
12
12
16
15
2010 (MB.)
- We Retails Plc. - The company’s director and executive hold 100%. (Mr.Chainid Ngow-Sirimanee) is a director . - The company holds - The company’s executive 91.05% in We Retails Plc. (Mr.Pramote Rermyindee) is a director.
- The company holds 100%.- The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. - The company’s executive (Mr.Pramote Rermyindee) is a director. - The company holds 100%.- The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. - The company’s executives (Mr.Pramote Rermyindee and Mr.Wicharn Siriwetwarawut ) are directors - Estate’s director and executive (Mr.Pornswat Katechulasriroj) is a director.
Shareholding
Relationship Management
1.3 Revenue from land sale/land leasing rights and cost As a normal business transaction, the Company sold land and leasing rights to subsidiaries for property development at the mutually-agreed prices. Road space in the Company’s projects are sold to subsidiaries, allowing the Company not to register the roads as public utilities. The space could not be sold to others. Details are as follows;
90 -
Affiliates Krungthep Land Public Company Limited / Land Real Estate Development Purchases 122
-
2011 (MB.)
-
5*
2010 (MB.)
- The company holds 20.22%
- The company holds 100%.
Shareholding
- The company’s director and executive (Mr. Chainid Ngow-Sirimanee) is a director.
- The company’s executive (Mr.Wicharn Siriwetwarawut) is a director. - The company’s employees (Mr.Pornchai Ketlek and Mr.Sanphet Sukkasem) are directors .
Relationship Management
Transactions
Subsidiary Perfect Sport Club Company Limited /Administrative Clubhouse Management Cost / Trade Creditors
Company / Type of Business
14 1
3
2011 (MB.)
15
2012 (MB.)
1
13
2010 (MB.)
- The company holds 100%.
Shareholding
- The company’s director and executive (Mr.Phairat Senachack) is a director - Estate’s executive (Mr.Nantachart Kliebphipat) is a director - The company’s employees (Miss Rassamee Methavikul and Mr. Kritpas Pongpakawat) are directors.
Relationship Management
1.5 Construction cost, administrative cost and trade creditors. - The Company awarded subsidiaries the contracts to manage clubs and golf courses inside the Company’s projects, paying them the mutually-agreed management fee. - The Company contracted related companies to produce and install prefab materials for the Company’s projects. Details are as follows;
* = Land locating the company project’s roads.
9
Subsidiary Residence Number Nine Company Limited / Land Real Estate Development Purchases
2012 Company / Type of Business Transactions (MB.)
1.4 Land purchases - The Company bought land from subsidiaries for property development accordingly to a normal business agreement, at the mutually-agreed prices. The Company is also obliged to buy road space in subsidiaries’ projects, to control the number of outside users. - The Company bought land from affiliated for property development accordingly to a normal business agreement, at the price not higher than the evaluation prices set by SEC-certified appraisers. Details are as follows;
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
91
Transactions
156 18 9
38 15 4
2011 (MB.)
-
-
-
2010 (MB.)
- Perfect Prefab - No individual with conflict of interest holds shares or Co., Ltd holds 49% sits in the board of directors - The company holds 51% in Perfect Prefab Co. , Ltd.
Shareholding
Relationship Management
Subsidiary Bright Development Bangkok Company Limited / Real Estate Development Subsidiaries, indirectly owned Share Group Co., Ltd./ Hotel Business
Company / Type of Business
2
-
8
2011 (MB.)
2
2012 (MB.)
-
2
2010 (MB.)
- The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director - The company’s executive (Mr.Pramote Rermyindee) is a director. - Estate’s director and executive (Mr.Pornswat Katechulasriroj) is a director.
Management
- PPI holds 69.01% - The company Director (Dr.Tawatchai Nakata) is a director. - The company holds 100% in PPI.- The company’s director and executive (Mr. Chainid Ngow-Sirimanee) is a director. - The company’s executive (Mr.Jesd Jesdpiyawong) is a director.
- The company holds 100%.
Shareholding
Relationship
1.6 Advance payments and other debtors - The Company transferred an advance payment for the land locating Metro Sky Ratchada to Bright, a subsidiary set up to develop the project, at the value equivalent to the actual price. - The Company approved an advance payment to SG. Details are as follows;
Related Companies Center of Standard Precast Co., Ltd. / Construction Manufacturer and Install Prefab Cost/ Structures. Advances to Contractor / Trade creditors
Company / Type of Business
2012 (MB.)
92 1,864 3,815 1,194
2,103
5,019
1,054
2011 (MB.) Shareholding
930 - The company holds 100%
2,035 - The company holds 100%. 2,310 - The company holds 100%
2010 (MB.)
-
We Retail Plc. loans to Centrepoint Shopping Mall Co., ltd. for payment on land leasing rights.
Connected transactions of subsidiaries
Company / Type of Business
250
2012 (MB.)
-
2011 (MB.)
-
2010 (MB.) Lender
Company / We Retail Plc. / Real Estate Development Centrepoint Shopping Mall Co., Ltd. / Type of Real Estate Development Business Shareholding - The company holds 91.05% - We Retail Plc . holds 100% - The company holds. 91.05% in We Retail Plc. Relationship - The company Director - The company’s director and executive (Dr.Tawatchai Nakata) is a director. (Mr.Chainid Ngow-Sirimanee) is a director - The company’s director and executive - The company’s executive (Mr.Chainid Ngow-Sirimanee) is a director (Mr.Pramote Rermyindee) is a director.¤ - The company’s executive (Mr. Pramote Rermyindee) is a director.
Details
Involved parties Borrower
The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director The company’s executive (Mr.Pramote Rermyindee) is a director. The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director The company’s executive (Mr.Pramote Rermyindee) is a director. Estate’s director and executive (Mr.Pornswat Katechulasriroj) is a director. The company’s executive (Mr.Wicharn Siriwetwarawut) is a director. The company’s employees (Mr.Pornchai Ketlek and Mr. Sanphet Sukkasem) are directors
Relationship Management
2. Connected transactions of subsidiaries and subsidiaries’ transactions with related companies. 2.1 Loans Connected borrowings among subsidiaries are as follows;
Subsidiary Estate Perfect Company Limited / Real Estate Development Bright Development Bangkok Company Limited / Real Estate Developmentq Residence Number Nine Company Limited / Real Estate Development
Company / Type of Business
2012 (MB.)
1.7 Guarantees The Company guarantees loans to subsidiaries, charging no fees on the wholly-owned companies. Details are as follows;
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
93
2012 (MB.)
629
108
Company / Type of Business
PPI. loans working capital to SG.
SG. loans working capital to KA.
-
-
2011 (MB.)
-
-
2010 (MB.) Lender
Share Group Co., Ltd / Hotel Business
Borrower
- PPI holds 69.01% - The company holds 100% in PPI. Relationship - The company Director - The company Director (Dr.Tawatchai Nakata) is a director. (Dr.Tawatchai Nakata) is a director. - The company’s director and executive - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director (Mr.Chainid Ngow-Sirimanee) is a director - The company’s executive (Mr.Jesd Jesdpiyawong) is a director. Company / Share Group Co., Ltd ./ Hotel Business Kabushiki Kaisha Kiroro Associates Co., Ltd./ Type of Hotel Mangement Business Shareholding - PPI holds 69.01% - SG holds 100% - The company holds 100% in PPI - PPI holds 69.01% in SG - The company holds 100% in PPI Relationship - The company Director - The company’s director and executive (Dr.Tawatchai Nakata) is a director. (Mr.Chainid Ngow-Sirimanee) is a director - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director - The company’s executive (Mr.Jesd Jesdpiyawong) is a director.
Company / Property Perfect International Pte.Ltd./ Type of Overseas Property Investment Business Shareholding - The company holds 100%.
Details
Involved parties
94
PPI’s interest charge on SG Interest Received /Interest Receivables
Connected transactions with subsidiaries We Retail’s interest charge Interest Received on Centrepoint Shopping /Interest Mall Co., Ltd. Receivables
Transactions
2 2
4 4
2012 (MB.)
-
-
2011 (MB.)
-
-
2010 (MB.)
Involved parties Lender Borrower
Company / We Retail Plc./ Real Estate Development Centrepoint Shopping Mall Co., Ltd. / Type of Real Estate Development Business Shareholding - The company holds 91.05% - We Retail Plc . holds 100% - The company holds 91.05% in We Retail Plc Relationship - The company Director - The company’s director and executive (Dr.Tawatchai Nakata) is a director. (Mr.Chainid Ngow-Sirimanee) is a director. - The company’s director and executive - The company’s executive (Mr.Chainid Ngow-Sirimanee) is a director (Mr.Jesd Jesdpiyawong) is a director. - The company’s executive (Mr.Jesd Jesdpiyawong) is a director. Company / Property Perfect International Pte.Ltd./ Share Group Co., Ltd /Hotel Business Type of Oversea Property Investment. Business Shareholding - The company holds 100%. - PPI holds 69.01% - The company holds 100% in PPI Relationship - The company Director - The company Director (Dr.Tawatchai Nakata) is a director (Dr.Tawatchai Nakata) is a director. - The company’s director and executive - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director (Mr.Chainid Ngow-Sirimanee) is a director. . - The company’s executive (Mr.Jesd Jesdpiyawong) is a director.
Details
2.2 Interest received and interest receivables - We Retail Plc. charges Centrepoint Shopping Mall Co., ltd. for the loan at 5% per annum. - PPI charges SG for the loan at 1% per annum and SG charges KA at 1%. Details are as follows;
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
95
3 3
-
2011 (MB.)
-
2010 (MB.)
Connected transactions with subsidiaries - SG leases KA assets for Leasing Fee hotel business operations Debtor
Transactions
34 11
2012 (MB.)
-
2011 (MB.)
-
2010 (MB.)
Details
Involved parties Lender
-
Relationship
- The company Director (Dr.Tawatchai Nakata) is a director. - The company’s director and executive . (Mr.Chainid Ngow-Sirimanee) is a director - The company’s executive (Mr.Jesd Jesdpiyawong) is a director.
-
Shareholding - PPI holds 69.01% - The company holds 100% in PPI
SG holds 100% PPI holds 69.01% in SG The company holds 100% in PPI The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director
Kabushiki Kaisha Kiroro Associates Co., Ltd./ Hotel Management
Borrower
SG holds 100% PPI holds 69.01% in SG. The company holds 100% in PPI The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director
Company / Share Group Co., Ltd /Hotel Business Type of Business
Details
Involved parties Lessor
Borrower
Kabushiki Kaisha Kiroro Associates Co., Ltd./ Hotel Management
Relationship - The company Director (Dr.Tawatchai Nakata) is a director. - The company’s director and executive . (Mr.Chainid Ngow-Sirimanee) is a director - The company’s executive (Mr.Jesd Jesdpiyawong) is a director.
Company / Share Group Co., Ltd./Hotel Business Type of Business Shareholding - PPI holds 69.01% - The company holds 100% in PPI
2.3 Asset leasing - SG leases KA assets for hotel business operations. Details are as follows;
SG’s interest charge on KA Interest Received / Interest Receivables
Transactions
2012 (MB.)
96 2
-
- Estate Perfect Co., Ltd. Value of Contract/ 35 awards a house construction Construction Cost / 15 contract to U&I Advance Payment 4 Contractor -
2
2011 2010 (MB.) (MB.)
2
Connected transactions with subsidiaries - Estate Perfect Co., Ltd. Administrative awarded Perfect Sport Club Cost Co., Ltd. a contract to operate sport clubs inside its housing projects,
Transactions
2012 (MB.)
Shareholding Relationship
Company / Type of Business
Company / Type of Business Shareholding Relationship
Details
Perfect Sport Club Company Limited / Clubhouse Management
Contractor
- The company holds 100% - The company holds 100% - The company’s director and executive - The company’s employee (Mr.Chainid Ngow-Sirimanee) is a director (Mr. Manit Yukkasemwong) is a director. - The company’s executive (Mr. Pramote Rermyindee) is a director.
- The company holds 100% - The company holds 100% - The company’s director and executive - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director (Mr. Phairat Senachack) is a director. - The company’s executive - Estate’s executive (Mr. Pramote Rermyindee) is a director. (Mr.Nantachart Kliebphipat) is a director - The company’s employees (Miss Rassamee Methavikul and Mr. Kritpas Pongpakawat) are directors. Estate Perfect Company Limited / U & I Construction Bangkok Co., Ltd./ConReal Estate Development struction Business
Estate Perfect Company Limited / Real Estate Development
Involved parties Employer
2.4 Construction cost, administrative cost and trade creditors Subsidiaries awarded contracts to other subsidiaries for the management of their projects’ clubs and golf courses, in return for mutually-agreed monthly fees. Subsidiaries awarded contracts to other subsidiaries for the construction of houses and condominiums under the mutually-agreed monthly cost. Subsidiaries’ charges on others’ use of hotel Subsidiaries contracted related companies for the production and installation of prefab materials in their projects at the mutually-agreed prices. Details are as follows;
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
97
Value of Contract / Construction Cost/ Advance Payment Contractor / Trade Creditors
Service Value
- Bright Development Bangkok Co., Ltd. awards a condominium construction contract to U&I
- KA charges SG for hotel use
- Residence Number Nine Value of Contract / co., Ltd. awards a house Construction Cost construction contract to U&I
Transactions
-
17
42
1
500 68 1
-
-
-
-
-
2011 2010 (MB.) (MB.)
896 696 39
4 1
2012 (MB.) Contractor
The company Director (Dr.Tawatchai Nakata) is a director. The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director - The company’s executive (Mr.Jesd Jesdpiyawong) is a director.
PPI holds 69.01% The company holds 100% in PPI
Share Group Co., Ltd /Hotel Business
The company holds 100% The company’s employee (Mr. Manit Yukkasemwong) is a director.
- The company holds 100% - The company holds 100% - The company’s executive - The company’s employee (Mr.Wicharn Siriwetwarawut) is a director. (Mr. Manit Yukkasemwong) is a - The company’s employees (Mr. Pornchai director. Ketlek and Mr. Sanphet Sukkasem) are directors Bright Development Bangkok Company U & I Construction Bangkok Co., Ltd./ Limited / Real Estate Development Construction Business
Residence Number Nine Company Limited /U & I Construction Bangkok Co., Ltd./ Real Estate Development Construction Business
- The company holds 100% - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. - The company’s executive (Mr. Pramote Rermyindee) is a director. - Estate’s director and executive (Mr.Pornswat Katechulasriroj) is a director. Company / Type Kabushiki Kaisha Kiroro Associates Co., Ltd./ of Business Hotel Management Shareholding - SG holds 100% - PPI holds 69.01% in SG - The company holds 100% in PPI Relationship - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. -
Company / Type of Business Shareholding Relationship
Company / Type of Business Shareholding Relationship
Details
Involved parties Employer
98
Residence Number Nine Value of Contract / 6 Co., Ltd. contracts Center Construction Cost/ 10 Precast Co., Ltd.to produce Trade Creditors and install prefab materials for its project
Transactions of the company with related companies. Estate Perfect Co., Ltd. Value of Contract/ 20 contracts Center Precast Construction Co., Ltd. to produce and Cost/ 30 install prefab materials for Advance its project Payment/ Contractor 2 Trade Creditor
Transactions
2012 (MB.)
2
4
26 -
29 1
28 -
44 16 2
25
35
2011 2010 (MB.) (MB.)
Relationship
Company / Type of Business Shareholding
Relationship
Company / Type of Business Shareholding
Details
Center of Standard Precast Co., Ltd. / Manufacturer and Install Prefab Structures.
Contractor
- Perfect Prefab Co., Ltd. Holds 49% - The company holds 51% in Perfect Prefab Co., Ltd. - The company’s executive No individual with conflict of interest (Mr.Wicharn Siriwetwarawut) is a director.holds shares or sits in the board of - The company’s employees directors. (Mr. Pornchai Ketlek and Mr. Sanphet Sukkasem) are directors .
- The company holds 100%
- Perfect Prefab Co., Ltd. Holds 49% - The company holds 51% in Perfect Prefab Co., Ltd. - The company’s director and executive No individual with conflict of interest (Mr.Chainid Ngow-Sirimanee) is a director.holds shares or sits in the board of - The company’s executive directors. (Mr. Pramote Rermyindee) is a director. Residence Number Nine Company Limited Center of Standard Precast Co., Ltd. / / Real Estate Development Manufacturer and Install Prefab Structures
- The company holds 100%
Estate Perfect Company Limited / Real Estate Development
Involved parties Employer
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
99
39
-
2011 (MB.)
-
2010 (MB.) Details
Creditor
Involved parties Debtor
* Established in February 2013
Chiang Mai Development co., Ltd. */ Real Estate Development
subsidiaries Uniloft (Thailand) Co., Ltd. / Service Apartment
Company / Type of Business
- The company holds 100%
- The company holds 99.70%
Shareholding
- The company’s employees (Mr. Sarunyu Ngow-Sirimanee and Mr.Natthaphon Sueb-Am) are directors . - Estate’s employees (Mr.Prathompob Intr-Bumrong) is a director. - The company’s director and executive (Mr.Chainid Ngow-Sirimanee) is a director. - The company’s executive (Mr. Pramote Rermyindee) is a director.
Relationship Management
None
None
Transactions
Company / Kabushiki Kaisha Kiroro Associates Share Group Co., Ltd /Hotel Business Type of Co., Ltd./Hotel Management Business Shareholding - SG holds 100% - PPI holds 69.01% - PPI holds 69.01% in SG - The company holds 100% in PPI - The company holds in PPI 100% Relationship - The company’s director and - The company Director executive (Dr.Tawatchai Nakata) is a director. (Mr.Chainid Ngow-Sirimanee) - The company’s director and executive is a director. (Mr.Chainid Ngow-Sirimanee) is a director . - The company’s executive (Mr.Jesd Jesdpiyawong) is a director. 3. Information on other subsidiaries and joint ventures which made no connected transactions with the Company and subsidiaries during the year
Connected transactions with subsidiaries KA made an advance Advance Payment payment on operating expense to SG
Transactions
2012 (MB.)
2.5 Advance payments, other debtors - KA made an advance payment to SG, in the following detail.
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Risk Factors 1. Risk from access to funding and debt repayment ability The flood disaster in 2011 effectively convinced some home buyers to delay their purchases particularly for projects in affected areas, while financial institutions toughened rules on lending particularly to property developers, affecting their access to funding and debt repayment ability. In the period, the Company assisted customers in protecting their bought units from flood in all affected projects. Such assistance followed after the water receded, giving them the assurance. In the post-crisis period, the company set out a clear policy towards short-term and long-term flood prevention plans for existing and new projects, allowing the company to witness new sales and property transfers and to honor debt repayment obligations. The company accordingly maintains trust among financial institutions, which keeps risk on access to funding at the low level. The company holds it as the policy to maintain the debt to equity and funding structure in appropriate levels, aside from nurturing relationship with financial institutions. 2. Risk from interest rate volatility As borrowing to finance project development and the operations is necessary, the interest rate has a direct impact on the company’s funding cost. The company is now subjected to the minimum loan rate (MLR) or lower. To mitigate the risk from interest rate volatility, the company resorts to the issuance of long-term debentures with fixed rate, to refinance partial loans which are subjected to the floating rate and carry higher interest cost. Bill of exchange with low interest is also issued, to maintain the interest cost at the appropriate level. The interest volatility should slightly affect demand, as mortgage loans tend to carry a long maturity. Changes in the interest rates will thus slightly influence the monthly installments. Moreover, most buyers have savings for down payments. The company is also in the position to offer special interest rates, in cooperation with commercial banks. The vast range of product prices, set accordingly to real demand, should also reduce the impact from such volatility on buyers. 3. Risk from guarantees to subsidiaries The company extended the guarantee against loans to three 100%-owned subsidiaries: (1) Estate Perfect Company Limited, (2) Bright Development Bangkok Company Limited, and (3) Residence Number Nine Company Limited. The total loan guarantee amounted to Bt8,174.7million as of 31 December 2012. The company could incur risks from the loan guarantees if the subsidiaries cannot honor principal and interest repayments to their creditors in specified period. However, the subsidiaries need such loans and credit facilities to finance their property development projects, which are their major business. The company has closely monitored the subsidiaries’ business operations. As of 31 December 2012, the three subsidiaries are developing 17projects with combined value of Bt24,719million. The projects should generate sufficient profits and cash flow for the subsidiaries’ debt repayments. As such, the risk from the guarantee is at a low level.
100
4. Risk from higher working capital requirement The Company requires working capital to finance construction works on the policy to sell finished single houses and townhouses, which delays the realization of revenue. This may result in a risk on financial liquidity. Yet, the Company puts in place the working capital management policy to reduce the risk. Presale is also available for booking before project launch, on top of the sale of finished units. Presale helps limit risks from the inability to sell finished units and presale revenue convinces financial institutions of the potential of new projects, which supports new loan extension to the Company. The requirement for higher working capital in line with business expansion has not compromised the company’s debt financing ability. Presale strengthens the working capital needed to finance the construction works, while the Company is able to tap additional loans from financial institutions. Condominium development is capital-intensive, as investment depends on the development area, the project size and height. In managing the investment, the Company puts condominium development into two categories - low-rise and high-rise. Low-rise construction period lasts 8-12 months, against 18-24 months of high-rises. Construction works are set to be in line with marketing activities, revenue realization and financial institutions’ funding. As of 31 December 2012, the Company and subsidiaries’ available credit facilities stood at Bt9,825 million. The Company has the system in place to monitor sale activities and construction, to ensure that inventories can support marketing activities. 5. Risk from construction cost volatility To cope with an increase in single-house construction cost, the Company has increased the ratio of precast construction and emphasized on supply chain management. Shortening construction period and securing key materials, steel and cement from manufacturers have helped reduce the volatility. The Company devises 2 strategies to manage risks associated with construction condominium cost. For low-rise development, U&I Construction Bangkok Company Limited was established to manage the construction, with focus on supply chain and sub-contractors to keep construction cost and construction period under control. It also supervises the construction in terms of quantity and quality. For high-rise development, a turnkey construction contract is signed with a major contractor, to allow efficient cost management. 6. Risk from shortage of quality contractors The Company has placed focus on participating contractors. The Company allocates the construction works in line with the contractors’ ability, while ensuring punctual payments and other assistance. The Company also opens its doors to welcome new contractors, ready to help strengthen their ability to ensure a sufficient number of contractors for the company’s expansion. The company now seeks services from over 100 contractors, small to large sizes. The company takes into account their qualifications and price quotations before awarding the contracts. The delivery period is clearly set, which helps limit the company’s troubles with contractors. Moreover, the company has constantly ensured that the volume of construction works to the contractors is in an appropriate level. The company also builds up a supply chain to ensure constant supplies of construction materials to the contractors, aside from training. The company also ranks contractors accordingly to their performance and considers adjustments of construction cost in line with market levels and construction material prices. The
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process is fair and accountable, to create cooperation between the company and contractors. The risk from contractor quality control thus barely emerges. The Asean Econommic Community could lead to labor shortage. To address this, Perfect Prefab Company Limited was established in 2011, to manufacture and install the prefabricated structure and parts for single houses, townhouses and project fences. They also manufacture construction parts for condominium development, which through the prefab technology helps reduce the construction period and number of workers required. U&I Construction Bangkok Company Limited (U&I) was also established to handle the construction of the Company and subsidiaries’ detached house, duplex house, townhouse and condominium projects, to ensure flexibility in construction management. U&I’s main focus is on the supply chain and sub-contractors, to keep construction costs and construction period under control as well as monitor the quantity and quality of construction works. The Company is convinced that these will help limit risks on the shortage of quality contractors. 7. Risk from higher competition in the residential market The industry is facing fiercer competition, reflecting through the increase of most developers’ sale and administrative cost. The competition tends to involve large-sized developers, which have continually witnessed bigger market shares. This partly results from their ability to cope with market volatility in the past few years, deriving from economic and political instability as well the floods in 2011. Large developers also demonstrate higher business potential and are capable of raising funds from various sources, thanks to greater confidence among investors and financial institutions. Large-sized developers with sufficient funding have contributed to fierce competition in the market. On this recognition, the Company has emphasized on research and development to enhance competitiveness. In focus are the locations, types of projects, home/condominium designs, usable space and value for money. Pricing, ranging from Bt1 million to Bt40 million, is determined accordingly to the brands. Another focus is on creating new communities that promote neighbor relationship, in line with Thai culture. Activities hosted for customers during holidays and religious festivals to preserve the Thai culture have won warm welcome. Clubs, swimming pools and lakeside parks also help create the green and leisure atmosphere for all project residents and their evening activities, under the “Happy Living” concept. These are on top of the 24-hour security system. The company also cooperates with financial institutions to increase purchasing power and reduce installment burden 8. Risk from flood disaster The flood disaster late 2011 changed the Thai property market landscape. Condominium demand spiked early 2012, while demand for low-rise single houses and townhouses slowed down, pending for the government’s remedial policies and developers’ long-term prevention measures to regain consumer confidence. Developers’ measures to handle the flood were also taken into account, as buyers expect a repeat of the disaster. Buyers now pay more attention to locations, the infrastructure system and home designs. Assisting project residents during the flood and after the flood, the company realized the scale of damage. Measures are devised to prevent future disasters. The fence lines are redesigned to withstand water from outside the projects. The sewage system was improved while water pumps are located at various spots of the projects. The construction sites of new projects are leveled up. Data late 2012 showed that these measures have rebuilt confidence among buyers and established trust in the company’s projects at all locations.
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9. Risk from global economic crisis The global economy has been on the positive development, following the stimulus measures in the US and the euro zone. More foreign capital has been flowing into the Thai bond and equity market, as well as the property market. Under the condition, Thailand is forced to maintain low interest rates, not to attract more capital inflows. Low rates maintain private companies’ borrowing cost and encourage household consumption. The property market has witnessed higher demand and prices. On the negative side, the baht appreciates against US dollar which will pressure the export sector while asset price stability could be ruined. Provided that the US economic recovery is stronger than expected, funds could flow back to the country. The Thai government has accordingly devised measures to cope with the reversal of funds and mitigate related impacts. The company has paid attention to all details of the development. A thorough study and planning is in place in light of foreseeable risks, before an investment decision is made. Thus, impacts should be kept at the low level. 10. Risk from foreign exchange volatility The company loaned to a subsidiary in Japan, through a subsidiary established overseas to operate in property development and hotel business in Japan. On the agreement to baht-denominated repayment, the subsidiary is exposed a foreign exchange risk. To accommodate the risk, the subsidiary has bought a forward contract
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Explanation and Analysis of
Financial and Operating Results Property Perfect Public Company Limited’s consolidated financial and operating results for year 2010-2012 were as follows: Subsidiary Establishment In 2007-2010 In 2007, The company established Bright Development Bangkok Company Limited with a registered capital of Bt1 million, for the development of Metro Sky Ratchada. It raised the capital to Bt500 million in March 2010. In this year Bright introduced iCondo brand for condominium project .In 2011 develop Uniloft brand for dormitory .In March 2011, registered capital raised to Bt1,000 million .The company now holds 100% of the registered and paid-up capital. The company established a joint venture with Singapore’s Timberline Investments Pte. Ltd, a shopping complex developer. Centrepoint Shopping Mall Co.,Ltd. was established with a registered capital of Bt1 million, held 59.99% of the registered and paid-up capital by the company, to handle commercial development like shopping malls and office buildings. On 22 January 2010, the Board approved the company’s purchase of all shares from Timberline Investments Pte. Ltd. (amounting to 400,000 shares at Bt100 par value). After the acquisition, the company owns 99.99% in Centrepoint. The Board also approved the plan to raise Centrepoint’s registered capital from Bt1 million to Bt500 million. As 30% of capital is paid up, the paid-up capital is now Bt150.7 million. w In March 2010, the company bought a 100% stake in Residence Number Nine Co., Ltd., which was capitalized at Bt1,000 million, from its shareholders at the cost of Bt507 million, to expand its residential development business. w In April 2010, Estate Perfect Co., Ltd., a wholly-owned subsidiary, raised the capital from Bt1,000 million to Bt1,200 million entirely shouldered by the company. In 2011 In April, the company established U & I Construction Bangkok Company Limited with registered capital of Bt100 million, Bt50 million paid-up. The company holds 100% in U & I, which operates construction service business. In June, the company established Perfect Prefab Company Limited with registered capital of Bt10 million, 25% paid-up. The company owns 51% in Perfect Prefab, which is a manufacturer and installer of prefab construction materials. In July, Uniloft Service (Thailand) Company Limited was established with registered capital of Bt100,000, fully paid-up. The company owns 100% in Uniloft Service which operates in the apartment industry. In November, Perfect Sport Club Company Limited, 100% owned by the company, raised the capital from Bt1 million to Bt5 million. The company fully subscribed to new shares.
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In December 2011, the company acquired We Retail Public Company Limited’s 363,818,182 newly-issued shares (par Bt5), at Bt1.10 apiece or a total of Bt400,200,000.20. This accounted for a 88.06% stake. Then, the company sold all 5,000,000 shares (paid-up for Bt400,200,000.20) in Centrepoint Shopping Mall Company Limited to We Retail Public Company Limited, at the paid-up value. We Retail Public Company Limited. Under the reverse takeover, the Company considers that it has maintained the holding. Under the deal, Centrepoint issued shares in return for the shares of We Retail. The cost of the business consolidation is based on the fair value of Centrepoint, calculated by an independent financial advisor in line with accounting revaluation. The fair value is Bt58.7 million higher than the fair value of We Retail’s identifiable assets and liabilities. Minus the Bt12.6 million equity of Centrepoint’s non-controlling shareholders, the differential of Bt46.1 million is shown as “Differential of subsidiary’s share swap”, under the other elements of shareholders’ equity item. Events in 2012 and major development w In February 2012, the Company bought additional 93,842 shares of We Retail Public Company Limited from other shareholders through the mandatory tender offer, which increased the holding from 88.06% to 88.08%. In July 2012, the Company invested Bt400.3 million for We Retail’s capital-increase shares to maintain its holding while non-controlling shareholders invested Bt24.5 million. As the non-controlling shareholders’ subscription was below their combined holdings, the Company saw its holding in We Retail rise from 88.08% to 91.5%. w In June 2012, the Company issued and offered 787.73 million new shares to existing shareholders at Bt1 apiece or a total of Bt787.73 million. The new shares were registered with the Commerce Ministry on 29 June 2012. w In July 2012, the Company issued and offered 393,865,295 free warrants (PF-W3) to existing shareholders at the ratio of 1 warrant for every 2 newly subscribed shares. The warrants have 3 years of maturity from the issuance date. The exercise ratio is 1:1, at the price at Bt1 apiece. w In July 2012, We Retail Public Company Limited issued 386,170,664 shares (Bt5 par value) and sold the shares to existing shareholders at Bt1.10 apiece or a total of Bt424,787,730. The Company subscribed for the new shares accordingly to its holding. w We Retail’s board of directors at the 6/2012 meeting on 11 July 2012 approved Centrepoint Shopping Mall Company Limited’s entering into a land leasing contract with a company. The 30-year contract will take effect from 1 January 2015 to 31 December 2044, carrying the leasing fee of Bt739.9 million and annual fee of Bt1,785 million - or a total of Bt2,524.9 million (excluding the Bt202.5 million compensation specified in the contract).
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Hotel business investment in Japan w In July 2012, the Company established Property Perfect International Pte.Ltd. in Singapore. Established on 12 July, the wholly-owned subsidiary is to invest in overseas business. Its paid-up capital is 1 Singapore dollar (1 share at 1 Singapore dollar). The Company has approved a Bt100 million loan to the subsidiary. w On 16 July 2012, Property Perfect International Pte.Ltd. (PPI) invested Bt99.60 million through a share purchase and loan to Share Group Co.,Ltd. (SG), which is incorporated in Japan to invest in real estate and hotel business in the country. PPI bought 4,100 newly-issued shares at 6,022 yen apiece or a total of 24.7 million yen, approximately Bt10 million. Its holding in SG is 49.64%. w On 8 August 2012, PPI bought 4,100 right-offering shares of SG at 12,044 yen apiece or 49.4 million yen in total, approximately Bt20 million. (Its holding is maintained at 49.64%). w PPI and SG signed the contract to buy shares, loan claims and assets of Kiroro Resort (KA) on 18 July 2012. Details are as follow: a) All shares from KA existing shareholders at 1 yen, or approximately Bt0.3903. b) Claims on loans to KA from existing shareholders. Plus interest, the loans worth 1,300.6 million yen (1,300 million yen principal and 0.6 million interest) are purchased at 160 million yen or approximately Bt62.4 million. c) Kiroro Resort’s assets cover a land plot, a hotel and equipment worth about 1,040.0 million yen or approximately Bt405.9 million. As specified in the contract, PPI and SG must place 240 million yen (Bt96.4 million) as the down payment. On 4 October 2012, SG completed the transaction. Consolidated operating results - consolidated financial statements The Company and subsidiaries launched a number of projects in the past 3 years. In 2010, the combined number of projects reached 11: 3 single house projects, 3 townhouse projects, and 5 condominium projects. In 2011, the number of new projects was 5, entirely focusing on single house development. In 2012, 8 new projects were launched, covering 1 single house project and 7 condominium projects. The number of Company and subsidiaries’ projects under development is 47. In the fourth quarter of 2012, the Company bought a business in Japan, holding 69.01%. This investment is revealed in two categories - property and hotel development.
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Consolidated Operating Results
Sales revenue The company realizes sales of land and house and condominium units as revenues in statements of income when ownership rights are transferred to buyers. In 2010, the consolidated revenue from land and house sale totaled Bt7,002.70 million, up Bt1,929.28 million from 2009, thanks to higher sales and the higher number of projects that could generate revenue. Revenue from sale of Metro Park Sathorn project at Bt777.73 million dropped 0.74% from 2009. In 2010, the company also earned Bt835.49 million from land sale, accounting for 9.69% of sale revenue. In 2011, the company registered the consolidated land and house sale revenue worth Bt6,925.68 million, down 77.02% from 2010. In the first nine months, the consolidated sale revenue increased by Bt877 million from the same period a year earlier. The fourth-quarter figure dropped due to the flood disaster in the Central region, including Bangkok, Nonthaburi and Pathum Thani which heavily plunged demand. In the quarter, the consolidated revenue was only Bt1,148.60 million, compared to Bt2,102.62 million in the same period a year earlier. In the quarter, the company reaped Bt1,074.15 million from condominium sale, up by Bt296.43 million from the same period a year ago, partially driven by revenue from Metro Sky Ratchada, a project by a subsidiary, which increased the number of revenue-generating projects from 1 to 2. Land sale revenue however dropped from Bt835.49 million to Bt81.42 million, or by Bt754.07 million from 2010 when it sold a land plot to a university worth Bt823.27 million. Sale revenue in 2011 thus totaled Bt8,081.25 million, down by Bt535.11 million or 6.21% from 2010. In 2012, the consolidated land and house sale revenue reached Bt7,489.49 million, upby Bt563.81 million or 8.14% from 2011. Flood disaster in the Central part of Thailand that affected Bangkok, Nonthaburi and Pathum Thani in the fourth quarter of 2011 caused severe contraction in the industry and recovery was witnessed in the second quarter of 2012. The 2011 revenue thus contracted from the 2010 level. Condominium sale revenue at Bt1,180.64 million however increased by Bt106.49 million or 9.91% from the previous year, thanks to the realization of income from the Metro Sky Ratchada project which started generating income in the fourth quarter of 2011. In the year, the Company and subsidiaries generated revenue from 2 condominium projects, from 1 in 2011. Land sale revenue increased by Bt66.44 million from Bt81.42 million to Bt147.86 million, due to the sale of land to a university worth Bt108.6 million. Sale revenue in the year reached Bt8,817.99 million, an increase of Bt736.74 million or 9.12% from the previous year. The consolidated sale revenue by project during 2010-2012 is available in the table showing revenue structure by product.
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Cost of sales and gross margin Calculation of costs of land and house sales and condominium units, which is the company’s and subsidiaries’ main cost, takes into account all project development costs that estimated to arise proportionately to land sold (and also actual costs) and the costs of sales are realized after the company books revenue from the sale of a particular unit. The above project development costs are presented at net cost from provision of losses from a write-down in project value. The cost covers the price of land, designs, infrastructure, construction and related interest. In 2010, the consolidated sale cost of the company and subsidiaries was as follows: w The sale cost of land and house sale totaled Bt4,606.86 million, up Bt1,092.61 million or 31.09% from the previous year. The cost accounted for 65.79% of sale revenue, down from 69.27% in 2009. w The sale cost of condominium units totaled Bt496.70 million, down Bt55.24 million or 10.01% from the previous year. The sale cost accounted for 63.87 million of sale revenue, down from 70.90% in 2009. w The sale cost of land totaled Bt695.76 million. The sale cost of land totaled Bt 83.28% of sale revenue. In 2011, the consolidated sale cost of the company and subsidiaries was as follows: w Cost of land and house sales totaled Bt4,365.93 million, down Bt240.93 million or 5.23% from the previous year. The amount represented 63.04% of sale revenue, down from 65.79% in 2010. w Cost of condominium totaled Bt727.72 million, up Bt231.02million or 46.51% from the previous year. Sale cost accounted for 67.75% of sale revenue, which was above 63.87% in 2010. w The sale cost of land totaled Bt55.27 million. The sale cost of land totaled Bt 67.88% of sale revenue. In 2012, the consolidated sale cost of the company and subsidiaries was as follows w Cost of land and house sales totaled Bt4,748.08 million, up Bt382.15million or 8.75% from the previous year. The amount represented 63.40% of sale revenue, a few changed from 63.04% in 2011. w Cost of condominium totaled Bt778.02million, up Bt50.30million or 6.91% from the previous year. Sale cost accounted for 65.90% of sale revenue, which was down 67.75% in 2011. w Land sale cost at Bt102.92 million showed an increase of Bt47.65 million from the previous year. The cost accounted for 69.60% of sale revenue.
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In 2010, the consolidated gross margin from land and house sale increased from 30.73% to 34.21%, due to higher sale prices as well as the realization of revenue from projects with higher gross margin. The gross margin of condominium units also increased to 36.13% while that of land was 16.27%. In 2011, the consolidated gross margin from land and house sale increased from 34.21% to 36.96%, due to higher sale prices as well as the realization of revenue from projects with higher gross margin. The gross margin of condominium units down from 36.15% to 32.25%. while that of land was 32.12%. In 2012, the Company and subsidiaries’ gross profit margin on land and house sale was 36.60%, nearly unchanged from 36.96% in the previous year. The condominium gross margin however increased from 32.25% to 34.10%, due to a price adjustment. Gross margin on land sale was at 30.40%.
Other revenue Most of other revenue came from utilities, Club House management fee, and confiscated down payments. During 2010 and 2012, other revenue on the consolidated basis totaled Bt87.98 million, Bt139.52 million and Bt131.90 million, respectively. In 2011, the company reverted Bt37.037 million of debt to income, under the debt rehabilitation plan.
Selling and administrative expenses In 2010, the consolidated sale and administrative cost as well as executives’ allowances totaled Bt1,756.14 million, up Bt721.56 million or 69.74% from 2009. Sale cost increased by Bt479.41 million as the special business tax and transfer fees went up by Bt233.56 million, as the tax reduction to 0.01% was raised back to the normal level of 3.3% on 28 March 2010. The advertising, public relations and marketing expenses rose by Bt233.40 million while the administrative cost increased by Bt233.40 million. As the company was prepared to launch new projects particularly in the second half of 2010, it shouldered higher employee and management expenses as well as higher executive pays by Bt18.75 million. In 2011, sale and administrative cost on the consolidated basis totaled Bt1,995.41 million, up by Bt239.27 million or 13.62 % from 2010. Sale cost increased Bt169.24million, thanks to the Bt68.50 million increase in the special business tax and transfer fee. The advertising, public relations and marketing cost also increased by Bt97.90 million. Meanwhile, administrative cost also increased by Bt70.02million, partly driven by flood-protection spending. In 2012, sale and administrative cost on the consolidated basis totaled Bt2,337.81 million, up Bt342.40 million or 17.16 % from 2011. Sale cost increased by Bt138.23 million, thanks to the Bt28.61 million increase in the special business tax and transfer fee in line with higher transfers. The advertising and marketing cost also increased by Bt109.62 million due to the launch of more projects, particularly condominium ones. Meanwhile, administrative cost also increased by Bt204.17 million due to higher expenses on employees and project management in line with new project launches. Expenses on flooded projects’ rehabilitation in the fourth quarter of 2011 also added up the expenses.
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Other expenses The company in 2008 sold 64 units of land and houses with a combined value of Bt510 million to Property Perfect Fund. Under the agreement, the Company agrees to guarantee the minimum revenue of the fund (rental and service revenues before deducting expenses) at Bt55 million for a period of five years, ending 31 December 2012. The minimum guarantee payment is due on 31 July and 31 January of the years specified in the contract. However, the amount of guaranteed revenue depends on the ratio of the value of the outstanding properties to the value of the properties in which the Fund initially invested, as determined by an appraisal company for the purpose of the initial investment. The company has estimated provision for loss from such guarantee at the present value of the cash flows which it expects to pay to the fund with a total of Bt73.8 million, and recorded it as a separate item under the heading of “loss arising from minimum revenue guarantee� in the income statements. In 2009, the company booked Bt9.4 million losses from minimum return guarantee as expense, as the rental revenue under Property Perfect Fund was below expectation. In 2010, the company booked Bt35.60 million losses from the minimum return guarantee as expense, which was Bt26.18 million higher from 2009. In 2011, the company booked Bt33.59million losses from the minimum return guarantee as expense, which was Bt2.01million down from 2010. In 2012, the Company booked Bt32.76 million as loss from the minimum revenue guarantee, as the fund’s revenue was below estimates. The minimum guarantee clause (based on rents and service fees before expenses) ended on 31 December 2012.
Financial expenses In 2009 to 2011 amounted to Bt465.09million, Bt417.22million and Bt527.32million, respectively. It comprises interest expenses, expenses for provision for unconverted debentures according to maturity of the unsubordinated debentures, write-off premium on debentures and financial charges. Interest expenses during 2010 to 2012 amounted to Bt318.26million, Bt393.48million and Bt464.14million, respectively. The interest expenses also increased in 2012 due to the acquisition of new land plots for future low-rise and high-rise development as well as the investment in the overseas hotel mentioned above. Expenses for provision for unconverted debentures according to maturity of the unsubordinated debentures and write-off premium on debentures in 2010 was Bt67.60million .In 2011, there was no expense, as the unsubordinated convertible debentures were entirely redeemed in November 2010. Financial fees during 2010-2012 stood at Bt79.23million, Bt23.74 million and Bt63.18million, respectively. The amount rose sharply in 2010 due to the increase in issued debt instruments like debentures and bill of exchange. In 2010, it also shouldered a Bt26 million cost for the early redemption of some debentures. Financial fees in 2012 derived from the debenture issuance early March, the seeking of a short-term loan in the second quarter, and the debenture issuance in August and November. In the year, the financial fees increased in line with the fund mobilization size.
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Hotel business In the fourth quarter of 2012, the Company invested in a hotel business in Japan, holding 69.01% in the business. The venture generated Bt275 million revenue and Bt46 million as other venue gross margin total Bt84 million, against operating expense of Bt168 million and foreign exchange loss of Bt95 million. This resulted in a loss of Bt134 million. However, the foreign exchange loss is covered by a forward contract, struck with a commercial bank late 2012.
Net profits (of both businesses) The consolidated net profits during 2010-2012 are as follows: Unit: Million Baht
Net profit Shareholders’ equity Subsidiaries’ non-controlling shareholders’ equity
2012
2011
2010
178.37 233.81 (55.44)
488.00 488.13 (0.13)
550.44 550.44 -
In 2010, the consolidated net profit stood at Bt550.44 million, up Bt150.69 million or 37.69% from the previous year, due to the higher land and house sale as well as higher gross margin. Moreover, it earned Bt835 million from land sale. Still, sale and administrative cost as well as other expenses went up in line with business expansion. In 2011, the consolidated net profit totaled Bt488.00 million, down by Bt62.44 million or 11.34% from the previous year. Despite lower sale revenue, the gross profit margin pushed up the profit margin. It is noted that sale and administrative expense increased in line with business expansion, as well as flood protection actions in the fourth quarter. Meanwhile, a cut in special business tax from 3.3% to 0.1% was terminated on 28 March 2010. This required the company to pay the special business tax at 3.3% in 2011. The 2012 consolidated net profit totaled Bt178 million, inclusive of the Bt233.81 million profit for the Company’s shareholders and Bt55.44 million loss of subsidiaries’ non-controlling shareholders. This is down by Bt310 million or 63.45% from the previous year. Of total decrease, local property business contributed Bt176 million while the overseas hotel business contributed Bt134 million. The Company’s shareholders equity of Bt233.81 million showed a decrease by Bt254.32 million, resulting from the Bt257 million increase in profit margin against the Bt342.40 million increase in sale and administrative cost following the launch of new projects particularly condominiums which demanded higher advertising and marketing cost. Moreover, the higher number of projects under management raised the headcount and administrative cost. The Company also shouldered a cost in rehabilitating projects suffering from the 2011 flood, the Bt110.10 million increase in financial expenses, Bt24 million decrease in tax income, and Bt81 million loss from the hotel business.
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Financial Status Overall Picture of Financial Status Table presented consolidated financial status (Unit :Million Baht)
As of 31 December 2012 As of 31 December 2011 As of 31 December 2010
Assets
Liabilities
25,872.03 21,364.02 19,728.93
17,566.84 13,974.33 12,554.50
Shareholders’ equity
8,305.19 7,389.69 7,174.43
Assets The consolidated assets stood at Bt19,728.93million, Bt21,364.02million and Bt25,872.03million during 2010 and 2012, respectively. In 2010 -2012 assets increased Bt5,252.19million ,Bt1,635.09 million and Bt4,508.01million ,respectively, as the company acquired additional land for the development of condominium, townhouse and rental dormitory, the leasing right for the land reserved for closed shopping mall development, and the hotel business in Japan. Of all assets as of 31 December 2012, ranked No.1 was the project development cost of Bt13,389.89 million which accounted for 51.78%. Following are land bank worth Bt8,283.84 million (32.03%); advance payment for land purchases worth Bt379.82 million (1.47%); land, building and equipment worth Bt1,095.37 million (4.24%); cash and equivalents worth Bt960.26 million (3.71%) and investment in joint venture worth Bt522.93 million (2.02%). The structure is in line with the group’s operations. Details are as follows; Project development cost (Unit : Million Baht)
2012
Company - unconsolidated Subsidiaries Total*
6,888.74 6,501.15 13,389.89
2011
51.45% 48.55% 100.00%
2010
Company - unconsolidated Subsidiaries Total*
6,749.27 3,373.73 10,123.00
8,403.30 4,565.43 12,968.73
64.80% 35.20% 100.00%
2009
66.67% 33.33% 100.00%
7,151.91 1,556.80 8,708.71
82.12% 17.88% 100.00%
Note * Project development cost in consolidated financial statements as of 31 December 2009 and 2012
w
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The company’s unconsolidated development cost in 2009 slightly increased by Bt66.67 million. In 2010, it dropped by Bt402.64 million, as some was transferred to the sale cost while new projects were carried out by subsidiaries. In 2011, the cost increased by Bt1,654.03 million, due to more new projects. In 2012, the cost dropped by Bt1,514.56 million as the sum booked as sale cost surpassed the development cost. The development cost as of 31 December 2012 totaled Bt6,888.74 million. It’s the net value after the Bt45.81 million provision against possible drop in project value. The sum was set aside accordingly to the accounting standard, as accounting value of the projects exceed independent appraisers’ evaluation prices.
w
Project development costs of the company’s subsidiaries were as follows: - Estate Perfect Company Limited, with 7 projects under development, booked the development cost of Bt1,824.88 million as of 31 December 2012. It includes the Bt0.67 million provision against possible decrease in project value. - Bright Development Company Limited, with 13 projects under development, showed the development cost of Bt3,392.36 million as of 31 December 2012. - Residence Number Nine Company Limited, with 3 projects under development, showed the development cost of Bt866.96 million as of 31 December 2012. - We Retail Company Limited showed the development cost of Bt124.38 million as of 31 December 2012. - Centrepoint Shopping Mall Company Limited showed the development cost of Bt246.83 million as of 31 December 2012. Net land bank (Unit : Million Baht)
2012
Company - unconsolidated Subsidiaries Total*
6,428.47 1,855.37 8,283.84
2011
77.60% 22.40% 100.00%
3,307.18 1,744.83 5,052.01
2010
Company - unconsolidated Subsidiaries Total*
4,277.59 1,215.39 5,492.98
65.46% 34.54% 100.00% 2009
77.87% 22.14% 100.00%
2,713.86 909.78 3,623.64
74.89% 25.11% 100.00%
Note * Net land bank mentioned in financial statements at 31 December 2010 and 2012.
-
The company’s and subsidiaries’ net land held for development at the end of 2009-2012 had value of Bt3,623.64million, Bt5,492.98 million, Bt5,052.01 million and Bt8,283.84 million, respectively. The costs incorporated land costs, land development costs, construction costs, capitalized interest, less transferred to costs of sales, land transferred to settle debts under rehabilitation plan and allowance for loss on depreciation of land held for development. In 2010 -2012, the provision for possible depreciation of land bank stood at Bt104.00million, Bt112.2million and Bt113.2 million, respectively. Since 31 December 2010, the company has accumulated on new land plot to serve both low-rise and hand-rise development. The company and subsidiaries will consider reverting land bank to book as project development cost only when the development starts - for example, when the land is being cleared or when development plan is plotted.
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Advance payment for land purchase (Unit: Million Baht)
2012
Company - unconsolidated Subsidiaries Total*
260.51 119.31 379.82
2011
68.59% 31.41% 100.00%
439.90 296.68 736.58
2010
Company - unconsolidated Subsidiaries Total*
348.55 206.09 554.64
59.72% 40.28% 100.00% 2009
62.84% 37.16% 100.00%
79.02 49.76 128.78
61.36% 38.64% 100.00%
Note: * Cash and equivalents as appeared in consolidated financial statements as of 31 December 2009-2012.
Advance payment for land purchase is the deposit given to landlords or agents commissioned to accumulate land for the company. Once the land purchase was completed the deposit will be booked as the project development cost or in land bank category. Advance payment of the company and subsidiaries as of 31 December 2012 totaled Bt379.8 million. - Deposits to many landlords under land purchase contracts, signed jointly by landlords and agents, totaling Bt163.2million: Bt45.2million placed by the company and Bt118.0million by subsidiaries. - Advance payment to land-aggregation agents, with pending land purchase agreements, totaled Bt216.76 million: Bt215.3 million belonging to the Company (Bt20.7 million and Bt105 million paid to employees and executives who acted as agents, respectively), and Bt1.3 million belonging to subsidiaries. The combined value of signed land purchase contracts as of 31 December 2009-2012totaled Bt452.4 million, Bt2,658.5 million, and Bt2,974.4 million and Bt980.9 million, respectively. Land, building and equipment - net (Unit: Million Baht)
2012
Company - unconsolidated Subsidiaries Total*
212.15 883.22 1,095.37
2011
19.37% 80.63% 100.00%
235.08 93.55 328.63
2010
Company - unconsolidated Subsidiaries Total*
252.48 59.53 312.01
71.53% 28.47% 100.00% 2009
80.92% 19.08% 100.00%
290.68 51.01 341.69
85.07% 14.93% 100.00%
Note: * Land, building and equipment-net as shown in the consolidated financial statements as of 31 December 2009-2012
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-
In October 2012, the Company bought a hotel business in Japan which owns land, building and equipment worth Bt707 million. Cash and Equivalents (Unit: Million Baht)
2012
Company - unconsolidated Subsidiaries Total*
547.64 412.62 960.26
2011
57.03% 42.97% 100.00%
851.73 283.07 1,134.80
2010
Company - unconsolidated Subsidiaries Total*
1,585.30 432.55 2,017.85
75.06% 24.94% 100.00% 2009
78.56% 21.44% 100.00%
668.54 72.05 740.59
90.27% 9.73% 100.00%
- Note: * Cash and equivalents as appeared in consolidated financial statements as of 31 December 2009-2012.
Investments in associates In 2005, Investments worth Bt300 million in Krungthep Land Public Company Limited represented a 20% stake in Krungthep Land Plc. (as of 31 December 2005, Krungthep Land’s paid-up capital was Bt1,500 million) and the Board of Directors’ meeting on 18 January 2007 approved the company to subscribe to Krungthep Land’s 6,000,000 capital increased shares at the par value of Bt10 each totaling Bt60 million to retain its shareholding ratio. On 16 November 2007, Krungthep Land’s 1/2007 extraordinary shareholders meeting resolved to decrease the registered capital from Bt2,100,000 million to Bt1,780,000,000 by canceling 32,000,000 unissued shares at the par value of Bt10 each for Bt320,000,000. The meeting also approved the recapitalization of Bt450,000,000 from Bt1,780,000,000 to Bt2,230,000,000 by issuing 45,000,000 capital increased shares at the par value of Bt10 each to reserve for exercise of convertible debentures. On 31 January 2008, Krungthep Land issued 188,806 units of 5-year, name-registered, unsecured convertible debentures with a face value of USD 100 or total value of USD 18,880,600, to an overseas company. In accordance with the conditions of the convertible debentures resolved by Krungthep Land’s Extraordinary General Meeting of shareholders No.1/2008 on 14 January 2008, Krungthep Land is to pay interest semi-annually at a rate of not exceeding 3% per annum or a dividend yield (whichever is higher) only in years in which Krungthep Land declares a dividend based on the conditions of the convertible debentures and mature on 31 January 2013. They are convertible upon the listing of Krungthep Land’s shares on the Stock Exchange of Thailand (SET) or the Market for Alternative Investment (MAI), or one year from the issue date (whichever is earlier), at a conversion price of Bt13.85 per a common share, on quarterly basis. In case that no interest is paid until the maturity date, Krungthep Land is to redeem the outstanding convertible debentures at a price equal to 1.311651 times in the baht equivalent of the face value. Such redemption is subject to change dependent upon the interest payment made during the life of the debentures.
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In November 2011, Krungthep Land amended the condition to allow early redemption of its convertible debentures, at the value equivalent to the baht-denominated value of the convertibles plus interest of 5.5% per annum, calculated from the issuance date to the redemption date. The interest is added into the principal every six months. In December 2011, Krungthep Land completed the early redemption. This allowed the company to book Bt7.5 million, under the equity method. This is shown under Item “Equity composure of unsubordinated convertibles”, in other components of shareholders’ equity. On 9 January 2013, Krungthep Land’s shareholders at the 1/2013 meeting approved: a) The listing of Krungthep Land on the Stock Exchange of Thailand. b) The reduction of registered capital by Bt450 million from Bt2,230 million to Bt1,780 million, by cancelling 45 million unallocated shares (Bt10 par value) c) The split of par value from Bt10 to Bt1, which boosts the number of shares from 178 million to 1,780 million d) The increase in registered capital by Bt620 million from Bt1,780 million to Bt2,400 million, through the issuance of 620 million shares at Bt1 par value. Of total, Bt500 million shares are reserved for the initial public offering and no more than 120 million shares for the offering to directors, executives and employees. Any share left over from the allocation to directors, executives and employees will be included in the portion reserved for the initial public offering. Under the equity method, the company booked Bt3.00 million, Bt57.89 million, Bt24.98 million and Bt27.80 million as profits from subsidiaries in the consolidated financial statements for years 2009-2012, respectively. Investment in joint ventures, under the equity method, totaled Bt419.74 million, Bt477.62 million, Bt495.13 million and Bt522.93 during the years 2009-2012, respectively. Other guarantee obligations The company guaranteed financial institutions’ loans to subsidiaries worth totally Bt8,174.72 million: Bt2,102.64 million to Estate Perfect Company Limited; Bt5,018.58 million to Bright Development Bangkok Company Limited; and Bt1,053.50 million to Residence Number Nine Company Limited. The company is not yet obligated to show responsibility for the guarantees as the subsidiaries are still honoring their debts.
116
Asset quality Trade debtors and other debtors Real Estate Business The company and subsidiaries have policy to realize revenue from sales of land and houses, land, and condominium units only when ownership rights are transferred to buyers. Thus, the company and subsidiaries record down payment and installments as liabilities in the item of deposits and clients’ advance payment. The overdue installments are booked in the item of trade debtors. In 31 December 2012, consolidated trade receivables totaled Bt22.51 million and consolidated allowance for doubtful debts for debtors who unpaid for over 12 months worth Bt0.2million. The Company also set aside full provisions against loans more than 12 months overdue, which brought down the net consolidated trade receivables to Bt22.31 million or 0.09% of total assets. The Company is convinced that the provisions are sufficient under the current circumstance. For clients who fail to pay the debts for 6 months or longer, the company has contacted them to honor their obligations and some cases have been brought to court. The company believes that the allowance for doubtful debts is sufficient under the present circumstance. Hotel business Following the acquisition of a hotel business in Japan on 4 October 2012, outstanding trade receivables as of 31 December 2012 totaled Bt118.56 million. These are no more than 3 months overdue. Other debtors Other debts at Bt4.34 million was down by Bt7.87 million from 31 December 2011, when total other debts were Bt12.21 million.
Debtors with overdue payment for land A university has not yet paid Bt15.5 million for the land it purchased and was transferred. The Company has approached the university for the payment. The Company has also placed a Bt100 million sum with the university, to guarantee the construction of roads and infrastructure as specified in the contract. The Company did not set aside provision against the remaining loan, on confidence that it will be paid in full.
Liquidity Statements of cash flow between 2010 and 2012 were as follows: Item
2012
Cash flow from operating activities 383.29 Cash flow from investment activities (3,894.65) Cash flow from financing activities 3,329.13 Lower difference on financial statement translation 7.70 Net cash flow increase (decrease) (174.54)
2011
(Unit: Million Baht)
(103.06) (2,142.21) 1,362.21 (883.05)
2010
414.10 (3,169.06) 4,032.23 1,277.27
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The consolidated cash flow from operating activities in 2010 totaled Bt414.10 million, partly thanks to the Bt835 million sale of a land plot which boosted the net cash flow to Bt1,277.27 million. In 2011, the Company showed negative cash flow from operating activities, at Bt103.06 million, due to the launch of new projects by the Company and subsidiaries which included the i-Condo condominium brand and Uniloft rental dormitory brand. In the year, transfers contracted in the fourth quarter due to flood disaster. In 2012, the cash flow position returned positive, at Bt383.10 million, partly due to the post-flood recovery. While revenue increased, labor shortage resulted in a delay in construction which lowered cash payments as well as inventory. Cash flow from investment activities has been in the negative area, totaling Bt3,169.06 million, Bt2,142.21 million and Bt3,894.65 million during 2010-2012, respectively . Due to the company’s land bank purchases to prepare for the company’s projects. Details as follow: - In 2010, investing activities concerned advance payment for land purchase and land purchases worth totally Bt2,697.91 million, cash payment of Bt352.18 million for common shares in a company priced at Bt507 million, deposits containing guarantee obligations worth Bt17.04 million, and leasehold rights worth Bt64.03 million. - In 2011, as part of investment activities, advance payments were made for new land plots totaling Bt2,077.66 million, aside from Bt16.49 million deposit which contains guarantee obligation, and Bt88.97 million payment for land, building and equipment. - In 2012, investing activities covered the advance payments for new land as well as leasing rights worth totally Bt3,298.09 million; net cash payments on overseas investment worth Bt408.47 million; and payments for building and equipment worth Bt185.89 million. Cash flow from financing activities in 2010 covered the net issuance of Bt4,768.38 million debentures, net long-term loans of Bt296.65 million, net issuance of additional B/Es worth Bt682.17 million, the redemption of Bt1,083.07 million convertible debentures, the redemption of P/Ns worth Bt355.0 million, repayment to directors’ Bt80 million advance payment, and Bt196.90 million dividend payment. In 2011, cash flow from financing activities were boosted by a Bt1,694.13 million long-term loan, while the net increase in bill of exchange and promissory note topped Bt728 million. An amount of Bt800 million was spent to redeem debentures, while dividend payment in the year reached Bt259.92 million. In 2012, cash flow from financing activities totaled Bt3,329.13 million, covering the net increase in debentures by Bt3,881.26 million, net loan increase by Bt1,029.11 million, and Bt787.73 million capital increase. The Company also earned Bt73.93 million from the exercise of warrants (PF-W3) into 73.93 million shares at the price of Bt1 apiece; as well as Bt0.09 million from the exercise of warrants (PF-W) into 52.93 million shares at the price of Bt0.00167 apiece. The net value of B/Es and P/Ns dropped by Bt2,253.94 million. Dividend payment totaled Bt189.05 million. Dividend payment The company has paid dividends as follows: - For the 2009 performance, shareholders received Bt0.25 per share, totaling Bt196.90million, as of 27 May 2010. - For the 2010 performance, shareholders received Bt0.33 per share, totaling Bt259.92million, as of 27 May 2011. - For the 2011 performance, shareholders received Bt0.04 per share, totaling Bt189.05million, as of 25 May 2012.
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Source of Funds
Liabilities As of 31 December 2012, consolidated liabilities reached Bt17,566.84 million (Bt13,692.19 million belonging to the company and Bt3,874.65 million to subsidiaries), up Bt3,592.51 million from 31 December 2011. Major changes are as follows; - Net increase in debentures of Bt3,912.94 million, loans Bt1,029.11 million, trade receivables and others Bt620.02 million, customers’ down payment and advance payment Bt136.17 million, and reserves for employees’ long-term benefits Bt41.37 million. - Minus Bt2,003 million B/E redemption and Bt210.94 million P/N redemption. The consolidated debt structure as of 31 December 2012 consisted of debentures, 55.22% of total; long-term loans, 29.36%; bill of exchange, 8.87%, and promissory notes, 3.35%. Details are as follows; Debentures As of 31 December 2012, outstanding secured debentures, of which principal is to be paid in full on maturity date, totaled Bt9,800.00million (Bt9,700.86 million net, inclusive of advance insurance fee ). All debentures were issued by the company to finance land purchase, increase working capital and repay loans. Details of the debentures are as follows; Secured/unsecured debentures issued by Property Perfect Public Company Limited Value (Million Baht)
Issue Date
Partially collateralized debentures#1/2010, 1,498.302 26 Feb. Bt1,500 million, 2010 interest 5.90% per annum, payable every 3 months Secured debentures#3/2010, 1,000.000 18 Nov. Bt1,000 million, 2010 interest 5.80% per annum, payable every 3 months Partially collateralized debentures#1/2012(1). 495.502 15 Mar. Bt 500 million, 2012 interest 5.35% per annum, payable every 3 months Partially collateralized debentures#2/2012(2). 1,971.560 15 Mar. Bt2,000 million, interest 5.35% per annum 2012 in first two years and 6.25% in the third year, payable every 3 months
Maturity Date
Condition
26 Feb. - The ratio of total loans1 2013 to shareholders’ equity must not exceed 1.75:1 18 Nov. - The ratio of collateral against 2013 outstanding debenture value must be maintained at 1:1 - The ratio of total loans1 to shareholders’ equity must not exceed 2:1 15 Mar. - The ratio of total loans2 2014 to shareholders’ equity must not exceed 2:1 15 Mar. - The ratio of total loans2 2015 to shareholders’ equity must not exceed 2:1
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Value (Million Baht)
Unsecured short-term bonds #1/2012(1) 800.000 Bt800 million, interest 4.75% per annum, payable on redemption Unsecured short-term bonds #1/2012(1) 1,000.000 Bt1,000 million, interest 4.85% per annum, payable on redemption Partially-collateralized debentures #2/2012 2,935.491 Bt3,000 million, interest 5.45% per annum, payable every 3 months Total 9,700.855
Issue Date
Maturity Date
Condition
9 Aug. 2012
5 Apr. - The ratio of total loans2 to 2013 shareholders’ equity must not exceed 2:1
9 Aug. 2012
6 May - The ratio of total loans2 to 2013 shareholders’ equity must not exceed 2:1
9 Nov. 2012
9 Nov. - The ratio of total loans2 to 2015 shareholders’ equity must not exceed 2:1
Note 1
“Net liabilities” refers to liabilities in the balance sheets, inclusive of financial obligations and other debts which may occur from loan guarantees, oval or other obligations to other individuals or juristic entities which do not appear in the balance sheets but in the Notes. Yet, the liabilities do not cover the obligations to financial institutions’ papers, issued as guarantee for the development of property or infrastructure or other utilities involved. Net liabilities were less cash and equivalents as shown in the balance sheets, but included deposit accounts which are used as guarantees. 2
“Total loans” refer to all interest-bearing or discounted liabilities appearing in the consolidated statement. This include financial obligations to be incurred by the issuer’s guarantee and similar obligations to individuals or juristic entities which do not appear in the consolidated financial statements but appear in the Note. This excludes obligations related to the obtaining of financial institutions’ letter of guarantee for land or infrastructure development or related activities. “Total loans” are minus cash and equivalents as shown in the consolidated financial statements, including deposits placed as collaterals with any party. For clarity on this, the “total loans” exclude trade receivables, advance income or loans which bear no interest cost.
In 2012, the Company redeemed debentures at maturity: (a) Secured debentures #2/2010, Bt1,000 million, issued on 9 September 2010 and mature on 9 March 2012. (b) Secured debentures #2/2010(2), Bt800 million, issued on 14 August 2009 and mature on 14 August 2012. (c) Unsecured debentures #4/2010, Bt1,500 million, issued on 18 August 2010 and mature on 18 November 2012. As of 31 December 2012, the Bt1,500 million debenture issue, mature on 26 February 2013, demands the total loans to shareholders’ equity not more than 1.75:1, which is higher than prescribed. The debentures were redeemed in February 2013.
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w Long-term loans As of 31 December 2012, outstanding long-term loans totaled Bt5,157.03 million: Bt2,713.99 million belonging to the company and Bt2,443.04 million to subsidiaries. The loans are used to finance property project development. Details are as follows; Unit (Million Baht)
31 December 2012 Company Subsidiaries
Long-term loans Minus - amount due within 1 year Long-term loans (Net) Unit (Million Baht)
Total
Company Subsidiaries
Total
2,713.99 2,443.04 5,157.03 368.12 193.92 562.04 2,345.87 2,249.12 4,594.99
2,399.90 1,728.02 4,127.92 223.14 413.98 637.12 2,176.76 1,314.04 3,490.80
31 December 2010
31 December 2009
Company Subsidiaries
Long-term loans Minus - amount due within 1 year Long-term loans (Net)
31 December 2011
Total
815.86 1,617.93 2,433.79 815.86 1,617.93 2,433.79
Company Subsidiaries
1,865.03 148.68 1,716.35
Total
272.11 2,137.14 45.54 194.22 226.57 1942.92
In addition, the company guaranteed loans extended by financial institutions to subsidiaries with a combined amount of Bt8,174.7 million. As of 31 December 2012, an Bt820 million loan contract - with outstanding debt value of Bt63.3 million - demanded the total loan to shareholders’ equity above the level specified in the contract. However, the loan was settled in February 2013. Promissory notes 1) Of Bt549.06 million outstanding P/Ns, Bt333.42 million belonged to the Company and Bt215.64 million to subsidiaries. The interest rate is based on the minimum overdraft rate (MOR). They will mature in May and June 2012. The P/Ns are backed by the group’s land and buildings. The P/Ns requires the group to maintain the debt to equity ratio at no more than 2:1. As of 31 December 2012, the ratio was above the agreed level. However, under the contract, the Company and subsidiaries have six months to bring down the ratio to the agreed level. 2 A subsidiary’s 4 P/Ns, worth Bt10,000,000 each (non-existence in 2011), were issued on a bank’s guarantee, to cover leasing fee. Each P/N will be issued one year after the previous.
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ANNUAL REPORT 2012
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Shareholders’ equity As of 31 December 2011 The consolidated shareholders’ equity totaled Bt7,389.69 million as of 31 December 2011, an increase by Bt215.25 million from 2010. Much of the increase was attributed to the Bt488.0 million net profit minus Bt259.9 million dividend for the 2010 operating year, paid in May 2011. The shareholder’s equity consisted of Bt4,726.46 million paid-up capital, the share loss of Bt20.68 million, the Bt7.29 million unrealized loss from share loss possibly deriving from a change in investment value, Bt223.10 million profit provision, the Bt2,475.70 million unallocated net profit, the Bt5.86 million premium from an investment in a subsidiary deriving from the purchase of shares above the subsidiary’s book value on the transaction date, a differential from share swaps with subsidiaries worth Bt46.09 million, and Bt44.36 million interests of parties without no controlling power. As of 31 December 2011, the outstanding number of warrants issued to creditors with uncollateralized loans stood at 8.85 million units. During the year, the par value was changed from Bt6 to Bt1. This increased the exercise ratio of the warrants to six shares at the price of Bt0.00167 per share. The warrants can be exercised on the last day of every second and fourth quarter during the 10 years from the fourth quarter of 2002. As of 31 December 2012 Consolidated shareholders’ equity as of 31 December 2012 totaled Bt8,305.19 million, up by Bt915.50 million from 31 December 2011. The increase mainly resulted from the Bt787.73 million recapitalization, the Bt0.09 million exercise of 52.93 million warrants (PF/W) at Bt0.00167 apiece, the Bt73.93 million exercise of 73.93 million warrants (PF/W) at Bt1 apiece, and the Bt178.37 million net profit, minus Bt189.06 million dividend payment. Structure of shareholders’ equity - Paid-up capital, Bt5,641.05 million (Bt1 par value) - Share loss, (Bt73.52 million) - Share loss from translation of investment, (Bt2.77 million) - Accumulated profit set aside as legal reserves, Bt241.60 million - Unallocated accumulated profit, Bt2,501.96 million - Share loss from change in holdings in subsidiaries (Bt8.78 million) - Difference from subsidiaries’ share swaps (Bt46.09 million) - Difference from exchange exposure translation (Bt17.11 million) - Subsidiaries’ non-controlling shareholders’ equity, Bt34.63 million
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Warrants (PF-W2) In 2012, a number of 8,821,387 warrants (PF-W2) were exercised for 52,928,322 shares, at the price of Bt0.00167 apiece or a total of Bt88,390. The warrants were issued to unsecured creditors. Each can be exercised for 6 shares, at the price of Bt0.00167 apiece. The exercise is scheduled for the last day of the second and fourth quarters during the 10-year period, starting from the fourth quarter of 2002. The remaining 30,089 warrants were expired on 6 November 2012. Warrants (PF-W3) In July 2012, the Company issued free warrants (PF-W3) to existing shareholders who subscribed for capital-increase shares, at the ratio of 1 warrant for two new shares. Total 393,865,295 warrants were issued with the 1:1 exercise ratio at the price of Bt1 per share. The warrants can be exercised on the last day of every quarter throughout the 3-year period, starting from the issuance date. In September, 73,932,601 warrants were exercised and 319,932,694 warrants are remaining. No warrant was exercised in December 2012. Debt to equity ratio The debt to equity ratio in 2010 was 1.75 times, before rising to 1.89 times and 2.12 times in 2011 and 2012, respectively, due to the investment in land, leasing rights and business expansion in many areas. The investment in a hotel business in Japan in the fourth quarter of 2012 also contributed to the increase in total debts.
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Report of
Independent Auditor To the Shareholders of Property Perfect Public Company Limited I have audited the accompanying consolidated financial statements of Property Perfect Public Company Limited and its subsidiaries, which comprise the consolidated statements of financial position as at 31 December 2012, and comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Property Perfect Public Company Limited for the same period. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Property Perfect Public Company Limited and its subsidiaries and of Property Perfect Public Company Limited as at 31 December 2012, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards. Siraporn Ouaanunkun Certified Public Accountant (Thailand) No.3844 Ernst & Young Office Limited Bangkok: 28 February 2013
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Statements of financial position
Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Consolidated financial statements As at As at
(Unit: Baht)
Separate financial statements As at As at
Note 31 December 2012 31 December 2011 31 December 2012 31 December 2011
Assets Current assets Cash and cash equivalents Trade and other receivables Account receivable - land Inventories Project development costs Advances to contractor - related party Advances to contractors - unrelated parties Other current assets Total current assets Non-current assets Restricted deposits Loans to related companies Retention per agreement Investments in subsidiaries Investment in associate Other long-term investments Land held for development Advances for purchases of land Property, plant and equipment Leasehold rights Other non-current assets Total non-current assets Total assets
7 960,262,043 1,134,799,368 8 145,206,328 20,656,592 9 15,478,938 46,436,938 10 31,581,748 11 13,389,889,827 12,968,728,043 6
547,643,468 74,587,375 15,478,938 6,888,742,770
851,725,365 86,531,346 46,436,938 8,403,303,415
18,117,218
14,537,627
17,518,704
58,995,231 45,836,553 142,646,588 63,964,980 14,758,606,860 14,298,539,692
44,563,796 43,627,292 7,629,181,266
37,349,061 37,214,674 9,480,079,503
14,546,157
12 66,395,657 34,982,088 25,987,569 34,982,088 6 - 3,260,371,778 1,801,123,102 9 100,000,000 100,000,000 100,000,000 100,000,000 13 - 3,152,442,193 2,702,032,399 14 522,931,889 495,128,627 359,999,240 359,999,240 15 55,557,480 51,038,480 55,557,480 51,038,480 16 8,283,843,179 5,052,013,687 6,428,473,069 3,307,183,526 17 379,815,318 736,576,762 260,509,016 439,895,448 18 1,095,365,141 328,629,254 212,151,153 235,079,041 19 445,633,939 167,069,743 43,239,771 46,459,663 163,875,652 100,038,693 41,528,847 42,483,515 11,113,418,255 7,065,477,334 13,940,260,116 9,120,276,502 25,872,025,115 21,364,017,026 21,569,441,382 18,600,356,005
The accompanying notes are an integral part of the financial statements.
125
ANNUAL REPORT 2012
'(U
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Statement of financial position (continued) Property Perfect Public Company Limited and its subsidiaries As at 31 December 2012
Consolidated financial statements As at As at
(Unit: Baht)
Separate financial statements As at As at
Note 31 December 2012 31 December 2011 31 December 2012 31 December 2011
Liabilities and shareholders’ equity Current liabilities Trade and other payables Current portion of notes payable Bills of exchange payable Current portion of debentures Current portion of long-term loans Deposits and cash received in advance Income tax payable Provisions Other current liabilities Total current liabilities Non-current liabilities Notes payable - net of current portion Debentures, net of current portion Long-term loans, net of current portion Provision for long-term employee benefits Other non-current liabilities Total non-current liabilities Total liabilities
20 1,558,819,881 21 559,060,000 22 23 4,298,302,318 25 562,036,434 8 305,117,100 28,158,885 27 98,368,947 7,409,863,565
746,628,635 333,420,000 4,298,302,318 368,122,615 48,920,078 24,898,653 40,158,623 5,860,450,922
589,416,152 800,000,000 2,003,000,000 3,300,000,000 223,140,265 70,639,583 3,538,865 10,906,710 33,023,942 7,033,665,517
21 30,000,000 23 5,402,553,013 2,487,911,686 5,402,553,013 2,487,911,686 25 4,594,991,519 3,490,795,708 2,345,870,689 2,176,757,288 26 65,634,096 24,263,062 37,707,004 19,138,150 63,797,200 50,664,144 45,609,473 48,516,144 10,156,975,828 6,053,634,600 7,831,740,179 4,732,323,268 17,566,839,393 13,974,327,138 13,692,191,101 11,765,988,785
The accompanying notes are an integral part of the financial statements.
126
929,794,991 800,000,000 2,003,000,000 3,300,000,000 637,121,107 168,946,207 22,299,221 10,906,710 48,624,302 7,920,692,538
nit: Baht) Statement of financial position (continued) Property Perfect Public Company Limited and its subsidiaries As at 31 December 2012
Consolidated financial statements As at As at
(Unit: Baht)
Separate financial statements As at As at
Note 31 December 2012 31 December 2011 31 December 2012 31 December 2011
Shareholders’ equity Share capital 28 Registered 5,961,161,256 ordinary shares of Baht 1 each 5,961,161,256 5,961,161,256 5,961,161,256 5,961,161,256 Issued and fully paid 5,641,047,963 ordinary shares of Baht 1 each (2011: 4,726,456,320 ordinary shares of Baht 1 each) 5,641,047,963 4,726,456,320 5,641,047,963 4,726,456,320 Share discount 28 (73,524,495) (20,684,563) (73,524,495) (20,684,563) Retained earnings Appropriated - statutory reserve 30 241,600,000 223,100,000 241,600,000 223,100,000 Unappropriated 2,501,961,382 2,475,701,940 2,070,899,803 1,912,787,453 Other components of shareholders’ equity (40,534,712) (59,240,133) (2,772,990) (7,291,990) Equity attributable to owners of the Company 8,270,550,138 7,345,333,564 7,877,250,281 6,834,367,220 Non-controlling interests of the subsidiaries 34,635,584 44,356,324 Total shareholders’ equity 8,305,185,722 7,389,689,888 7,877,250,281 6,834,367,220 Total liabilities and shareholders’ equity 25,872,025,115 21,364,017,026 21,569,441,382 18,600,356,005
The accompanying notes are an integral part of the financial statements.
127
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Statement of comprehensive income Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Consolidated financial statements
Separate financial statements
2012
2011
2012
2011
7,489,487,517
6,925,678,155
5,509,032,871
4,960,323,321
1,180,639,172 147,862,988 275,660,442
1,074,153,593 81,422,149 -
574,347,519 147,862,987 -
579,403,500 78,517,149 -
11,192,421 8,931,502
9,933,194 8,527,837
143,484,475 4,749,713
82,522,898 5,227,065
38,925,120 118,935,739 9,271,634,901
37,037,390 84,020,801 8,220,773,119
76,418,882 6,455,896,447
37,037,390 68,719,990 5,811,751,313
4,748,080,260 778,020,729 102,920,272 191,351,316 1,088,277,852 1,418,477,908 27 32,758,774 94,687,967 8,454,575,078
4,365,927,265 727,715,800 55,267,156 918,792,177 1,076,622,076 33,595,455 7,177,919,929
3,375,257,224 351,611,981 102,920,272 694,765,698 916,010,092 32,758,774 5,473,324,041
3,071,967,647 381,774,982 51,379,305 617,807,522 815,109,030 33,595,455 4,971,633,941
817,059,823 27,803,262
1,042,853,190 24,982,516
982,572,406 -
840,117,372 -
Note
Revenues Revenues from sales of land and houses Revenues from sales of residential condominium units Revenues from sales of land Revenues from hotel operations Other income Interest income Revenues from forfeiture of down payments Revenue from reversal of creditors per rehabilitation plan Gain on a bargain purchase Others Total revenues Expenses Cost of sales of land and houses Cost of sales of residential condominium units Cost of sale of land Cost of hotel operations Selling expenses Administrative expenses Loss arising from minimum revenue guarantee loss on exchange Total expenses Profit before share of income from investment in associate, finance cost and income tax expenses Share of income from investment in associate
20 13
14
The accompanying notes are an integral part of the financial statements.
128
(Unit: Baht)
Statement of comprehensive income (continued) Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Note
Profit before finance cost and income tax expenses Finance cost Profit before income tax expenses Income tax expenses Profit for the year Other comprehensive income: Gain (loss) on changes in value of available-for-sale investments Other comprehensive income for the year Total comprehensive income for the year Profit (loss) attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries Total comprehensive income attributable to: Equity holders of the Company Non-controlling interests of the subsidiaries Earnings per share Basic earnings per share Profit attributable to equity holders of the Company Diluted earnings per share Profit attributable to equity holders of the Company
(Unit: Baht)
Consolidated financial statements
Separate financial statements
2012
2011
2012
2011
844,863,085 527,320,230 317,542,855 (139,175,583) 178,367,272
1,067,835,706 417,217,839 650,617,867 (162,618,562) 487,999,305
982,572,406 506,464,066 476,108,340 (110,441,385) 365,666,955
840,117,372 410,384,128 429,733,244 (98,994,170) 330,739,074
4,519,000 4,519,000
(3,743,300) (3,743,300)
4,519,000 4,519,000
(3,743,300) (3,743,300)
182,886,272
484,256,005
370,185,955
326,995,774
233,814,047 (55,446,775) 178,367,272
488,129,353 (130,048) 487,999,305
365,666,955
330,739,074
238,333,047 (55,446,775) 182,886,272
484,386,053 (130,048) 484,256,005
370,185,955
326,995,774
0.0453
0.1033
0.079
0.0700
0.048
0.1021
0.0701
0.0692
32
The accompanying notes are an integral part of the financial statements.
129
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Cash flow statement
Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Cash flows from operating activities Profit before tax Adjustments to reconcile profit before tax to net cash provided by (paid from) operating activities: Share of income from investment in associate Depreciation and amortisation Amortisation of prepaid expenses Amortisation of deferred debenture issuing costs Unrealised loss on exchange Rental received in advance recognition Loss on impairment of investment (reversal) Reversal of creditors per rehabilitation plan Loss arising from minimum revenue guarantee Loss on sales of property, plant and equipment Gain on a bargain purchase Dividend income Provision for long-term employee benefits Interest income Interest expenses Profit from operating activities before changes in operating assets and liabilities Decrease (increase) in operating assets Trade and other receivables Account receivable - land Inventories Project development costs Advances to contractors Other current assets Other non-current assets
Separate financial statements
2012
2011
2012
2011
317,542,855
650,617,867
476,108,340
429,733,244
(27,803,262) 89,507,365 34,457,851 31,683,644 94,687,967 (4,226,670) (154,598) 32,758,774 3,398,281 (38,925,120) (4,184,356) 29,409,448 (11,192,421) 464,139,451
(24,982,516) 64,677,464 43,260,169 9,696,460 (4,162,138) 198,012 (37,037,390) 33,595,455 49,437 (4,555,205) 24,263,062 (9,933,194) 393,475,697
52,415,701 22,924,142 31,683,644 (4,226,670) (154,598) 32,758,774 611,528 (4,184,356) 22,434,274 (143,484,475) 443,899,666
49,994,713 24,017,785 9,696,460 (4,128,646) 198,012 (37,037,390) 33,595,455 38,272 (4,555,205) 19,138,150 (82,522,898) 386,694,786
1,011,099,209
1,139,163,180
930,785,970
824,862,738
(86,554,433) 30,958,000 (9,417,813) 157,670,342 (9,587,617) (87,798,722) (10,022,178)
(901,999) (178,591,346) 63,685,288 (57,598,210) (22,412,361)
(21,736,428) 30,958,000 1,324,121,843 (4,233,658) (29,182,162) 954,670
3,238,828 409,034,729 41,901,793 (35,922,453) (3,464,699)
The accompanying notes are an integral part of the financial statements.
130
(Unit: Baht)
Consolidated financial statements
Cash flow statement (continued) Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
(Unit: Baht)
Consolidated financial statements
Separate financial statements
2012
2012
2011
2011
Increase (decrease) in operating liabilities Trade and other payables 348,075,284 (350,306,756) 186,223,110 (317,031,110) Deposits and cash received in advance 136,170,893 97,243,848 (21,719,505) 40,117,044 Cash paid for minimum revenue guarantee (36,607,637) (34,559,500) (36,607,637) (34,559,500) Other current liabilities (39,451,842) (2,709,976) (40,396,229) (5,435,753) Other non-current liabilities (7,219,929) 1,233,495 1,320,000 1,200,000 Net cash from operating activities 1,397,313,557 654,245,663 2,320,487,974 923,941,617 Cash paid for interest expenses (861,306,894) (688,772,981) (697,947,497) (568,850,632) Cash paid for corporate income tax (166,507,862) (150,638,289) (89,081,590) (95,455,305) Cash received for interest income 13,485,571 7,215,381 12,380,784 5,940,946 Return of withholding tax 301,594 74,891,519 74,537,729 Net cash from (used in) operating activities 383,285,966 (103,058,707) 1,545,839,671 340,114,355 Cash flows from investing activities Decrease (increase) in restricted deposits (31,105,007) (16,493,710) 8,994,519 (16,493,710) Increase in loans to related companies - (1,489,248,677) (995,573,930) Cash received for interest income 164,784,089 2,280,589 Cash received for dividend income 4,184,356 4,555,205 4,184,356 4,555,205 Cash received from purchase of investment in subsidiary (Note 13) 36,825,599 Net cash paid for purchase of investment in subsidiary (Note 13) (408,467,940) - (450,409,795) (304,875,043) Increase in non-controlling interests of the subsidiary 24,484,504 1,225,007 Increase in land held for development (2,817,032,919) (1,574,376,722) (2,286,640,375) (695,526,906) Increase in advances for purchases of land (234,443,385) (503,287,285) (172,637,084) (280,017,971) Increase in leasehold rights (246,618,000) (1,790,081) Increase in property, plant and equipment (185,891,041) (88,973,509) (27,660,880) (40,265,449) Proceeds from sales of property, plant and equipment 239,422 106,907 239,422 106,907 Net cash used in investing activities (3,894,650,010) (2,142,208,589) (4,248,394,425) (2,325,810,308) The accompanying notes are an integral part of the financial statements.
131
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Cash flow statement (continued) Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Consolidated financial statements
Separate financial statements
2012
2012
Cash flows from financing activities Increase (decrease) in note payable (250,940,000) Increase (decrease) in bills of exchange payable (2,003,000,000) Increase in long-term loans 1,029,111,138 Increase (decrease) in debentures 3,881,260,000 Increase in ordinary shares 861,751,711 Dividend paid (189,054,605) Net cash from financing activities 3,329,128,244 Decrease in translation adjustment 7,698,475 Net decrease in cash and cash equivalents (174,537,325) Cash and cash equivalents at beginning of year 1,134,799,368 Cash and cash equivalents at end of year 960,262,043 Supplemental cash flow information Non-cash transactions Transfer advances for purchases of land to project development 591,204,830 Transfer land held for development to project development costs 766,701,101 Transfer project development costs to land held for development 642,600,206 Transfer property, plant and equipment to project development costs 4,068,286 Transfer leasehold rights to project development costs 7,484,680 Issue promissory notes to purchase leasehold rights 40,000,000 Settle land held for development with loan to related company Settle increased share capital with loan to related company and interest receivable -
The accompanying notes are an integral part of the financial statements.
132
(Unit: Baht)
2011
2011
725,000,000 (466,580,000) 3,000,000 (2,003,000,000) 1,694,128,085 314,095,751 (800,000,000) 3,881,260,000 861,751,711 (259,915,006) (189,054,605) 1,362,213,079 2,398,472,857 (883,054,217) (304,081,897) 2,017,853,585 851,725,365 1,134,799,368 547,643,468
725,000,000 3,000,000 1,584,035,141 (800,000,000) (259,915,006) 1,252,120,135 (733,575,818) 1,585,301,183 851,725,365
321,351,923
352,023,515
188,834,673
2,241,778,627
-
1,811,924,360
-
642,600,206
-
10,735,369 7,483,791 -
542,010 -
10,735,369 -
-
30,000,000
-
-
-
500,000,000
133
- 223,100,000 2,475,701,940 (7,291,990)
Balance - as at 31 December 2011 4,726,456,320 (20,684,563)
- 488,129,353 (3,743,300)
-
- (259,915,006)
The accompanying notes are an integral part of the financial statements.
17,000,000 (17,000,000)
-
-
-
-
-
-
-
-
-
-
(186) 120
66 206,100,000 2,264,487,593 (3,548,690)
Unappropriated
-
-
-
-
-
-
-
120
-
-
-
-
-
(3,743,300) 484,386,053
(7,476,716) (7,476,716) - (259,915,006)
Total shareholders’ equity
-
-
-
(130,048) 484,256,005
- (7,476,716) - (259,915,006)
(1,605,573)
120
- 7,174,431,058
Equity attributable to non-con trolling interests of the subsidiaries
(Unit: Baht)
- (46,091,945) (5,856,198) (59,240,133) 7,345,333,564 44,356,324 7,389,689,888
-
-
-
Total equity attributable to shareholders of the Company
(1,928,172) 7,174,431,058
Total other components of shareholders’ equity
- (46,091,945) (46,091,945) 44,486,372
-
- (5,856,198)
- (46,091,945)
-
- (7,476,716) -
-
-
- 7,476,716
Deficit from the changes in the ownership interests in subsidiaries
Other components of equity
Exchange differences Deficit on on translation of Difference changes financial Unsubordinated resulting in value of statements convertible from share swap available-for-sale in foreign debentures between the investments currency equity component subsidiaries
Other comprehensive income
Balance - as at 1 January 2011 4,726,344,720 (20,573,149) Additional ordinary shares as a result of warrant exercised (Note 28) 111,600 (111,414) Share subscriptions received in advance Increase in non-controlling interests of the subsidiary (Note 13) Decrease in Unsubordinated convertible debentures-equity component (Note 14) Dividend paid (Note 35) Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve -
Issued and fully paid share capital
Consolidated financial statements Equity attributable to the parent’s shareholders
Retained earnings
Share subscriptions received Statutory reserve Share discount in advance
Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Statement of changes in shareholders’equity
134
-
-
-
-
-
-
-
18,500,000 (18,500,000)
- (189,054,605) - 233,814,047
-
-
-
-
- 17,107,305 4,519,000 -
-
-
- 241,600,000 2,501,961,382 (2,772,990) 17,107,305
-
-
-
-
-
-
-
-
-
-
-
-
Unappropriated
Total other components of shareholders’ equity
Total equity attributable to shareholders of the Company
Equity attributable to non-con trolling interests of the subsidiaries
Total shareholders’ equity
(Unit: Baht)
-
-
-
-
-
-
-
- (2,920,884)
-
-
- 18,320,647
(2,920,884) 27,405,388
74,020,991
18,320,647
24,484,504
74,020,991
-
-
-
-
17,107,305 17,107,305 17,107,305 - (189,054,605) - (189,054,605) 4,519,000 238,333,047 (55,446,775) 182,886,272
-
(2,920,884)
-
- (46,091,945) (8,777,082) (40,534,712) 8,270,550,138 34,635,584 8,305,185,722
-
-
-
-
-
- (46,091,945) (5,856,198) (59,240,133) 7,345,333,564 44,356,324 7,389,689,888 - 787,730,720 - 787,730,720
Deficit from the changes in the ownership interests in subsidiaries
Other components of equity
Exchange differences Deficit on on translation of Difference changes financial Unsubordinated resulting in value of statements convertible from share swap available-for-sale in foreign debentures between the investments currency equity component subsidiaries
Other comprehensive income
- 223,100,000 2,475,701,940 (7,291,990) -
The accompanying notes are an integral part of the financial statements.
Balance - as at 31 December 2012 5,641,047,963 (73,524,495)
Increase in non-controlling interests from purchase of subsidiary (Note 13) Increase in exchange differences on translation of financial statements in foreign currency (Note 13) Dividend paid (Note 35) Total comprehensive income for the year Unappropriated retained earnings transferred to statutory reserve
Balance - as at 1 January 2012 4,726,456,320 (20,684,563) Increase in ordinary shares (Note 28) 787,730,720 Additional ordinary shares as a result of warrant exercised (Note 28) 126,860,923 (52,839,932) Effect from the change in shareholding in subsidiary (Note 13) -
Issued and fully paid share capital
Consolidated financial statements Equity attributable to the parent’s shareholders
Retained earnings
Share subscriptions received Share discount in advance Statutory reserve
Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Statement of changes in shareholders’equity (continued)
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
135
(73,524,495)
-
-
-
(52,839,932)
-
(20,684,563)
(20,684,563)
-
-
-
-
(111,414)
(20,573,149)
Share discount
The accompanying notes are an integral part of the financial statements.
5,641,047,963
-
Unappropriated retained earnings transferred to statutory reserve
Balance - as at 31 December 2012
-
Total comprehensive income for the year
126,860,923
Additional ordinary shares as a result of warrant exercised (Note 28)
-
787,730,720
Increase in ordinary shares (Note 28)
Dividend paid (Note 35)
4,726,456,320
-
Unappropriated retained earnings transferred to statutory reserve
Balance - as at 1 January 2012
-
Total comprehensive income for the year
4,726,456,320
-
Dividend paid (Note 35)
Balance - as at 31 December 2011
-
111,600
4,726,344,720
Share subscriptions received in advance
Additional ordinary shares as a result of warrant exercised (Note 28)
Balance - as at 1 January 2011
Issued and fully paid share capital
-
-
-
-
-
-
-
-
-
-
-
120
(186)
66
241,600,000
18,500,000
-
-
-
-
223,100,000
223,100,000
17,000,000
-
-
-
-
206,100,000
2,070,899,803
(18,500,000)
365,666,955
(189,054,605)
-
-
1,912,787,453
1,912,787,453
(17,000,000)
330,739,074
(259,915,006)
-
-
1,858,963,385
(2,772,990)
-
4,519,000
-
-
-
(7,291,990)
(7,291,990)
-
(3,743,300)
-
-
-
(3,548,690)
Deficit on changes in value of available-for-sale investments
(2,772,990)
-
4,519,000
-
-
-
(7,291,990)
(7,291,990)
-
(3,743,300)
-
-
-
(3,548,690)
Total other components of shareholders’ equity
Other components of equity Other comprehensive income
Separate financial statements
Share Retained earnings subscriptions Statutory reserve Unappropriated received in advance
Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
Statement of changes in shareholders’equity (continued)
7,877,250,281
-
370,185,955
(189,054,605)
74,020,991
787,730,720
6,834,367,220
6,834,367,220
-
326,995,774
(259,915,006)
120
-
6,767,286,332
Total shareholders’ equity
(Unit: Baht)
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Notes to consolidated financial
Property Perfect Public Company Limited and its subsidiaries For the year ended 31 December 2012
1. General information Property Perfect Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in the property development and hotel operation. The registered office of the Company is at 100/1 Vorasombat Building, 17th Floor, Rama 9 Road, Huaykwang, Bangkok. 2. Basis of preparation 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2012, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of the Company (“the Company”) and the following subsidiary companies (“the subsidiaries”): Company’s name
Subsidiaries directly owned by the Company Estate Perfect Company Limited Perfect Sport Club Company Limited Bright Development Bangkok Company Limited Residence Number Nine Company Limited U&I Construction Bangkok Company Limited Perfect Prefab Company Limited
Nature of business
Country of Percentage of incorporation shareholding 2012 2011 % %
Property development Thailand Clubhouse management Thailand Property development Thailand Property development Thailand Construction service Thailand Producing and assembling Thailand prefabricated building system Uniloft Service (Thailand) Company Limited Apartment service Thailand We Retail Public Company Limited Property development, shopping Thailand mall and commercial areas Property Perfect International Pte Ltd. Holding company Singapore Subsidiaries indirectly owned by the Company Centrepoint Shopping Mall Company Limited Property development, shopping Thailand mall and commercial areas Share Group Co., Ltd. Hotel operations Japan Kabushiki Kaisha Kiroro Associates Co., Ltd. Hotel management Japan
136
100.00 100.00 100.00 100.00 100.00 51.00
100.00 100.00 100.00 100.00 100.00 51.00
99.70 91.05
99.70 88.06
100.00
-
91.05
88.06
69.01 69.01
-
b) Subsidiaries are fully consolidated as from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company. d) The assets and liabilities in the financial statements of overseas subsidiary companies are translated to Baht using the exchange rate prevailing on the end of reporting period, and revenues and expenses translated using monthly average exchange rates. The resulting differences are shown under the caption of “Exchange differences on translation of financial statements in foreign currency” in the statements of changes in shareholders’ equity. e) Material balances and transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements. f) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position. g) On 25 February 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the establishment of U&I Construction Bangkok Company Limited, to engage in the provision of construction service. Such company has a registered share capital of Baht 100 million (1 million ordinary shares with a par value of Baht 100 each), 50% paid up and the Company held a 100% interest. This company was established on 5 April 2011. h) On 12 May 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the establishment of Perfect Prefab Company Limited to engage in producing and assembling prefabricated building system. Such company has a registered share capital of Baht 10 million (1 million ordinary shares with a par value of Baht 10 each), 25% paid up and the Company held a 51% interest. This company was established on 16 June 2011. i) On 26 July 2011, a meeting of the Company’s Board of Directors passed a resolution to ratify the establishment of Uniloft Service (Thailand) Company Limited to engage in apartment service. Such company has a registered share capital of Baht 100,000 (1,000 ordinary shares with a par value of Baht 100 each), 100% paid up and the Company held a 100% interest. This company was established on 21 July 2011. j) On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve subscription to no more than 363,818,182 newly issued ordinary shares of We Retail Public Company Limited (“We Retail”) (formerly known as “Daidomon Group Public Company Limited”), equal to 88.06% of the total shares sold, at Baht 1.10 per share, and to approve the sale of all 5,000,000 ordinary shares in Centrepoint Shopping Mall Company Limited (“Centrepoint”) held by the Company, or 100% of the total shares of that company. The Company will receive payment for ordinary shares in We Retail through the transfer of the newly issued ordinary shares of We Retail. On 16 December 2011, the Company completed the above transactions and as a result is the major shareholder of We Retail, with a controlling interest of 88.06%. Therefore, the Company included the financial statements of We Retail Public Company Limited in its consolidated financial statements as from16 December 2011 onwards. On 9 February 2012, the Company acquired 93,842 ordinary shares of We Retail from outside shareholders,
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increasing its shareholders in that company from 88.06% to 88.08% In July 2012, the Company invested Baht 400.3 million in additional ordinary shares of We Retail in proportion to its existing shareholding and non-controlling interests invested Baht 24.5 million in additional ordinary shares of We Retail. However, some of non-controlling interests have not invested the additional shares in proportion to their existing shareholdings. As a result, the Company’s shareholding in this company increased from 88.08% to 91.05% k) On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the sale of all 5,000,000 ordinary shares that the Company held in Centrepoint, or 100% of that company (Centrepoint had paid-up share capital amounting to Baht 400,200,000 including shares paid-up in October 2011) to We Retail. The Company will receive payment through the transfer of the newly issued ordinary shares of We Retail. As a result, the Company’s shareholding indirectly held through We Retail decreased to 88.06% as at 31 December 2011. In accordance with the Company acquiring ordinary shares of We Retail, and the Company and non-controlling interests investing in additional ordinary shares of We Retail, resulting in the Company’s shareholding in We Retail increasing from 88.06% to 91.05%. As a result, the Company’s shareholding in Centrepoint, indirectly held through We Retail, also increased from 88.06% to 91.05% as at 31 December 2012. I) On 14 August 2012, a meeting of the Company’s Board of Directors passed a resolution to ratify the establishment of a subsidiary, Property Perfect International Pte. Ltd. (“PPI”) in Singapore, to operate as a holding company. Such company is to have a paid up share capital of SGD 1 (1 ordinary share with a par value of SGD 1 each), with the Company holding a 100% interest. The subsidiary was established on 12 July 2012. m) On 27 August 2012, a meeting of the Company’s Board of Directors passed a resolution to acquire 11,400 ordinary shares of SG, incorporated in Japan, to manage the property development and hotel operations in Japan. The Company will have 69.01% of shareholding in Share Group Co., Ltd. (“SG”). In addition, the meeting of the Company’s Board of Directors passed a resolution to approve SG acquiring all of 610 ordinary shares from the existing shareholders of Kabushiki Kaisha Kiroro Associates Co., Ltd.. The details are discussed in Note 13 to the financial statements. 2.3 The separate financial statements, which present investments in subsidiaries and associate under the cost method, have been prepared solely for the benefit of the public. 3. New accounting standards not yet effective The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) Financial Reporting Standard TFRS 8 Accounting Standard Interpretations: SIC 10 SIC 21 SIC 25
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Income Taxes Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates Operating Segments Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders
The Company’s management believes that these accounting standards will not have any significant impact on the financial statements for the year when they are initially applied, except for the following accounting standard TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the stipulated guidelines. The management of the Company expects the adoption of this accounting standard to have the effect of increasing the Company and its subsidiaries’ brought-forward retained earnings and other components of shareholders’ equity of the year 2013 by approximately Baht 328.0 million (the Company only: approximately Bath 164.5 million). In addition, the Federation of Accounting Professions has issued Notification No. 30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of accounting treatment guidance and accounting standard interpretations as follows Effective date 1 January 2013
Accounting Treatment Guidance for Transfers of Financial Assets Accounting Standard Interpretation SIC 29 Service Concession Arrangements: Disclosures 1 January 2014 Financial Reporting Standard Interpretations TFRIC 4 Determining whether an Arrangement contains a Lease1 January 2014 TFRIC 12 Service Concession Arrangements 1 January 2014 TFRIC 13 Customer Loyalty Programmes 1 January 2014 The management of the Company has assessed the effect of these standards and believes that Accounting Treatment Guidance for Transfers of Financial Assets, SIC 29, TFRIC 4 and TFRIC 12 are not relevant to the business of the Company. Management is still evaluating the first-year impact to the financial statements of the adoption of TFRIC 13 and has yet to reach a conclusion. 4. Significant accounting policies 4.1 Revenue recognition Revenues from sales of land and houses/residential condominium units/land Revenues from sales of land and houses/residential condominium units/land are recognised as revenues when the ownership has been transferred to the buyer. Revenue from hotel operations Revenue from hotel operations mainly comprises room sales, food and beverage sales and revenue from auxiliary activities. Sales are the invoiced value, excluding value added tax, of goods supplied and services rendered after deducting discounts. Interest income Interest income is recognised on an accrual basis based on the effective interest rate. Dividends Dividends are recognised when the right to receive the dividends is established. 4.2 Cost of sales of land and houses/residential condominium units/land In determining the cost of sales of land and houses/residential condominium units/land, the anticipated total development costs (after recognising the costs incurred to date) are attributed to units already sold on the basis of the salable area and then recognised as costs in profit or loss.
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4.3 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions. 4.4 Trade accounts receivable Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging. 4.5 Inventories Inventories are valued at the lower of cost (first-in, first-out method) and net realisable value. 4.6 Project development costs칙 Project development costs are valued at the lower of cost and net realisable value. Project development costs consist of the costs of land, land development, construction, land lease and related interest. 4.7 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they are incurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 4.8 Advances for purchases of land Advances for purchases of land will be recognised as part of land costs when the title to the related land is transferred to the Company. 4.9 Property, plant and equipment and depreciation Property, plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the estimated useful lives Office buildings and clubhouses Hotel buildings Hotel building improvements Furniture and equipment Tools and equipment Motor vehicles Others
10 and 20 years 5 to 41 years 2 to 30 years 5 years 5 years 5 years 5 years
Depreciation is included in determining income. No depreciation has been provided on land and construction in progress.
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An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset is included in profit or loss when the asset is derecognised. 4.10 Leasehold rights and amortisation Leasehold right is stated at cost less accumulated amortization and allowance for loss on impairment of assets (if any). Amortisation of leasehold right is calculated by reference to its cost on a straight-line basis over the leasehold period. Amortisation is included in determining income and is capitalised as part of project costs for leasehold rights of project under development. 4.11 Investments a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss. b) Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in comprehensive income, and will be recorded in profit or loss when the securities are sold. c) Investments in non-marketable equity securities, which the Company classified as other investments, are stated at cost net of allowance for loss on impairment (if any). d) Investment in associate is accounted for in the consolidated financial statements using the equity method. e) Investments in subsidiaries and associate are accounted for in the separate financial statements using the cost method. The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of unit trusts is determined from their net asset value. The weighted average method is used for computation of the cost of investments. In the event the Company reclassifies investments from one type to another, such investments will be readjusted to their fair value as at the reclassification date. The difference between the carrying amount of the investments and the fair value on the date of reclassification are recorded in profit or loss or recorded as other components of shareholders’ equity, depending on the type of investment that is reclassified. On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss. 4.12 Goodwill Goodwill is initially recorded at cost, which equals to the excess of cost of business combination over the fair value of the net assets acquired. If the fair value of the net assets acquired exceeds the cost of business combination, the excess is immediately recognised as gain in profit or loss. 4.13 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company. They also include associate and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors and officers with authority in the planning and direction of the Company’s operations.
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4.14 Long-term leases Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the lease period. The assets acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease period. Leases of property, plant or equipment which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term. 4.15 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in determining income. 4.16 Impairment of assets At the end of each reporting period, the Company performs impairment reviews in respect of the property, plant and equipment whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal. An impairment loss is recognised in profit or loss. In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal, which exceeds the carrying amount that would have been determined, is treated as a revaluation increase.
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4.17 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined benefit plans The Company and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company. The fund’s assets are held in a separate trust fund and the Company’s contributions are recognised as expenses when incurred. Defined benefit plans The Company has obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company treats these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary and the overseas subsidiary’s management based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised as income or expenses when the net cumulative unrecognised actuarial gains and losses at the end of the previous reporting period exceed 10% of the defined benefit obligation at that date. These gains or losses are recognised over the expected average remaining working lives of the employees participating in the plan. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy as an expense on a straight-line basis over up to five years from the date of adoption. 4.18 Provisions Provisions are recognised when the Company has a present obligation as a result of a past event, they are probable that outflow of resources embodying economic benefits will be required to settle the obligation, and reliable estimate can be made of the amount of the obligation. 4.19 Income Tax Income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. 5. Significant accounting judgments and estimates The preparation of financial statements in conformity with financial reporting standards at times requires management to make subjective judgements and estimates regarding matters that are inherently uncertain. These judgements and estimates affect reported amounts and disclosures; and actual results could differ from these estimates. Significant judgements and estimates are as follows. Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement.m
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Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial instruments. Impairment of equity investments The Company treats available-for-sale investments and other investments as impaired when there has been a significant or prolonged decline in the fair value below their cost or where other objective evidence of impairment exists. The determination of what is “significant” or “prolonged” requires judgement of the management. Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of the Company’s plant and equipment and to review estimate useful lives and residual values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. Project development costs estimation In recognising revenue from real estate sales, the Company needs to estimate all project development costs, including land costs, land improvement costs, design costs, construction costs, and borrowing costs for construction. The management estimates these costs based on their business experience and revisit the estimation on a periodical basis or when the actual costs incurred significantly vary from the estimation. Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. Provision for loss arising from minimum revenue guarantee In recording provision for loss arising from minimum revenue guarantees, the management estimates the cost of the expenses expected to be incurred as a result of providing minimum revenue guarantees based on the present value of the cash flows to be paid to the Fund, calculated on the basis of assumptions that are appropriate to the current operating results and circumstances of the Fund. The estimate is reviewed whenever circumstances changes. Litigations The Company and its subsidiary have contingent liabilities as a result of litigations. The Company’s and its subsidiary’s management has used judgement to assess the results of the litigations and believes that no loss will result. Therefore no contingent liabilities are recorded as at the end of reporting period.
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6. Related party transactions During the years, the Company and its subsidiaries had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties. (Unit: Million Baht)
Consolidated financial statements
Transactions with subsidiaries (Eliminated from the consolidated financial statements) Revenues from sales of land and house Interest income Purchase of land Clubhouse management expenses Transaction with associate Purchase of land Transaction with related company Cost of construction of houses
Separate financial statements
2012
2011
2012
2011
Transfer pricing policy
-
-
133 9 15
2 74 14
By agreement 1.00% - 7.38% per annum By agreement By agreement
-
122
-
122
By agreement
79
110
38
69
By agreement
As at 31 December 2012 and 2011, the balances of the accounts between the Company and those related companies are as follows:
Other receivables - related parties (Note 8) Advance - subsidiary Interest receivable - subsidiaries Total other receivables - related parties Advances to contractor - related party Related company (related by mutual shareholders) Total advances to contractor - related party Trade and other payables - related parties (Note 20) Subsidiary Related companies (related by mutual shareholders) Total and other payables - related parties
(Unit: Thousand Baht)
Consolidated financial statements
Separate financial statements
2012
2011
2012
2011
-
-
9,378 42,901 52,279
1,500 74,289 75,789
14,546 14,546
18,117 18,117
14,538 14,538
17,519 17,519
5,734 5,734
15,122 15,122
2,546 3,598 6,144
1,251 9,358 10,609
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Loans to related parties As at 31 December 2012 and 2011, the balance of loans between the Company and those related companies and the movement are as follows: (Unit: Thousand Baht)
Loans to related parties
Estate Perfect Co., Ltd. Bright Development Bangkok Co., Ltd. Residence Number Nine Co., Ltd. Perfect Prefab Co., Ltd. We Retail Public Company Limited Property Perfect International Pte. Ltd. Total
Separate financial statements Balance as at Increase Decrease Balance as at 31 December during during 31 December Related by 2011 the year the year 2012
Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary
945,977 855,146 1,801,123
630,000 (474,400) 785,000 (433,435) 192,000 (47,581) 40,000 30,000 737,665 2,414,665 (955,416)
1,101,577 1,206,711 144,419 40,000 30,000 737,665 3,260,372
Directors’ and management’s benefits During the years ended 31 December 2012 and 2011, the Company and its subsidiaries had employee benefit expenses payable to their directors and management as below.
Short-term employee benefits Post-employment benefits Total
(Unit: Million Baht)
Consolidated financial statements 2012 2011
Separate financial statements 2012 2011
69.9 7.0 76.9
51.1 4.9 56.0
56.3 6.4 62.7
44.0 4.3 48.3
Guarantee obligations with related parties The Company has outstanding guarantee obligations with its related parties, as described in Note 36.5 a) to the financial statements. 7. Cash and cash equivalents
Cash Bank deposits Bill of exchange Total
(Unit: Thousand Baht)
Consolidated financial statements 2012 2011
Separate financial statements 2012 2011
5,743 954,519 960,262
2,744 544,899 547,643
2,556 682,243 450,000 1,134,799
1,613 400,112 450,000 851,725
As at 31 December 2012, bank deposits in saving accounts, fixed deposits and bill of exchange carried interests between 0.00 and 0.875% per annum (2011: between 0.25 and 3.00% per annum).
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8. Trade and other receivables/Deposits and cash received in advance Trade receivable balances as at 31 December 2012 and 2011 are detailed below. Real estate business Consolidated financial statements 2012 2011
Total value of contracts signed Percentage of total project sale value Installments due Less: Cash received Installments receivable Less: Allowance for doubtful debts Accounts receivable at transfer date, net
(Unit: Thousand Baht)
Separate financial statements 2012 2011
86,354,890 60.50 78,755,165 (78,732,657) 22,508 (200)
73,122,867 64.99 69,801,004 (69,782,962) 18,042 (9,593)
70,262,099 72.62 68,387,072 (68,364,564) 22,508 (200)
63,681,714 72.48 62,177,548 (62,159,506) 18,042 (9,593)
22,308
8,449
22,308
8,449
Deposits and cash received in advance as at 31 December 2012 and 2011 are detailed below. Consolidated financial statements 2012 2011
Installments due Less: Accumulated sale recognition Deposits and cash received in advance
78,755,165 (78,450,048) 305,117
(Unit: Thousand Baht)
Separate financial statements 2012 2011
69,801,004 (69,632,058)
68,387,072 (68,338,152)
62,177,548 (62,106,908)
168,946
48,920
70,640
As at 31 December 2012 and 2011, trade and other receivables were classified by aging as follows.
Trade receivables - real estate business Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total Less: Allowance for doubtful debts
(Unit: Thousand Baht)
Consolidated financial statements 2012 2011
Separate financial statements 2012 2011
14,575 7,733 200 22,508 (200)
14,575 7,733 200 22,508 (200)
979 470 16,593 18,042 (9,593)
979 470 16,593 18,042 (9,593)
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Trade receivable - real estate business, net Trade receivables - hotel business Aged on the basis of due dates Not yet due Past due Up to 3 months 3 - 6 months 6 - 12 months Over 12 months Total Trade receivable - hotel business Trade receivable, net Other receivables Advance - related party Interest receivable - related party Interest receivable Other receivables Total other receivables Trade and other receivables, net
(Unit: Thousand Baht)
Consolidated financial statements 2012 2011 22,308 8,449
Separate financial statements 2012 2011 22,308 8,449
118,560 118,560 118,560 140,868
8,449
22,308
8,449
4,338 4,338
2,293 9,915 12,208
9,378 42,901 52,279
1,500 74,289 2,293 78,082
145,206
20,657
74,587
86,531
9. Account receivable - land Accounts receivable - land consist of the following: a) An account receivable from the sale of land to a university. The Company has already transferred ownership of the land to such university in June 2012. The Company deposited cash amounting Baht 100 million to that university as a guarantee of road and utility construction in accordance with details in the agreement. As at 31 December 2012, the Company had the outstanding balance of the account receivable of Baht 15.5 million (2011: Baht 15.5 million). The Company is pursuing collection of the debtor. b) An account receivable from the sale of land to another university. As at 31 December 2012, the Company had no outstanding balance of the account receivable (2011: Baht 31.0 million).
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10. Inventories (Unit: Thousand Baht)
Consolidated financial statements Reduce cost to net Cost realisable value Inventories - net 2012 2011 2012 2011 2012 2011
Food and beverage Other goods and supplies Total
48,692 35,991 84,683
-
(41,658) (11,443) (53,101)
-
7,034 24,548 31,582
-
11. Project development costs Consolidated financial statements 2012 2011
Land and construction developed Land and construction under development Total Less: Reduce cost to net realisable value Net
3,388,488 10,047,890 13,436,378 (46,488) 13,389,890
2,956,676 10,059,622 13,016,298 (47,570) 12,968,728
(Unit: Thousand Baht)
Separate financial statements 2012 2011
2,324,261 4,610,295 6,934,556 (45,813) 6,888,743
2,051,036 6,398,953 8,449,989 (46,686) 8,403,303
The Company’s and its subsidiaries’ project land and construction thereon with a net book value of Baht 10,152.1 million as at 31 December 2012 (2011: Baht 9,685.2 million), have been mortgaged with financial institutions as collateral for credit facilities, guarantees and debentures. During the year ended 31 December 2012, the Company and its subsidiaries included borrowing costs of Baht 390.9 million as cost of “Project development costs” (Separate financial statements: Baht 249.4 million) (2011: Baht 312.2 million (Separate financial statements: Baht 197.7 million)). Interest is charged at rate of 5.50% - 7.75% per annum (2011: 4.55% - 7.63% per annum). 12. Restricted deposits These represent fixed deposits pledged with the banks to secure credit facilities.
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13. Investments in subsidiaries Details of investments in subsidiaries as presented in separate financial statements are as follows: Company’s name
Estate Perfect Company Limited Perfect Sport Club Company Limited Bright Development Bangkok Company Limited Residence Number Nine Company Limited U&I Construction Bangkok Company Limited Perfect Prefab Company Limited Uniloft Service (Thailand) Company Limited We Retail Public Company Limited Property Prefect International Pte. Ltd. Total
Paid-up capital 2012 2011
1,200,000 5,000 1,000,000 1,000,000 100,000 2,500 100 3,996,628 -
1,200,000 5,000 1,000,000 1,000,000 50,000 2,500 100 2,065,775 -
Shareholding percentage 2012 2011 % %
100.00 100.00 100.00 100.00 100.00 51.00 99.70 91.05 100.00
100.00 100.00 100.00 100.00 100.00 51.00 99.70 88.06 -
(Unit: Thousand Baht)
Cost 2012
2011
738,459 738,459 5,000 5,000 999,999 999,999 507,000 507,000 100,000 50,000 1,275 1,275 100 100 800,610 400,200 3,152,443 2,702,033
Perfect Sport Club Company Limited On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve an increase in the registered share capital of Perfect Sport Club Company Limited, from Baht 1 million (10,000 ordinary shares with a par value of Baht 100 each) to Baht 5 million (50,000 ordinary shares with a par value of Baht 100 each) by offering the additional shares to the current shareholders in proportion to their existing holdings (The Company paid up the additional share capital in October 2011). Bright Development Bangkok Company Limited On 25 February 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the increase in the registered share capital of Bright Development Bangkok Company Limited from Baht 500 million (5 million ordinary shares with a par value of Baht 100 each) to Baht 1,000 million (10 million ordinary shares with a par value of Baht 100 each). The Company held all shares (The Company paid up the additional share capital in March 2011). U&I Construction Bangkok Company Limited On 25 February 2011, meetings of the Company’s Board of Directors passed a resolution to approve the establishment of a subsidiary, U&I Construction Bangkok Company Limited, to engage in the provision of construction service. Such company has a registered share capital of Baht 100 million (1 million ordinary shares with a par value of Baht 100 each), 100% paid up and the Company held a 100% interest. This company was established on 5 April 2011. On 26 October 2012, U&I Construction Bangkok Company Limited called up the remaining uncalled portion of its share capital of Baht 50.0 million (999,997 ordinary shares with a value of Baht 50 each). Perfect Prefab Company Limited On 12 May 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the establishment of Perfect Prefab Company Limited to engage in producing and assembling prefabricated building system. Such company has a registered share capital of Baht 10 million (1 million ordinary shares with a par value of Baht 10 each), 25% paid up and the Company held a 51% interest. This company was established on 16 June 2011.
150
Uniloft Service (Thailand) Company Limited On 26 July 2011, a meeting of the Company’s Board of Directors passed a resolution to ratify the establishment of Uniloft Service (Thailand) Company Limited to engage in apartment service. Such company has a registered share capital of Baht 100,000 (1,000 ordinary shares with a par value of Baht 100 each), 100% paid up and the Company held a 100% interest. This company was established on 21 July 2011. We Retail Public Company Limited (Formerly known as “Daidomon Group Public Company Limited”) On 29 September 2011, a meeting of the Company’s Board of Directors passed the following significant resolutions. a) Approved subscription to no more than 363,818,182 newly issued ordinary shares of We Retail Public Company Limited (“We Retail”), equal to 88.06% of the total shares sold, which are to be issued and offered to the Company on a private placement basis at Baht 1.10 per share. The meeting also approved the purchase of not more than 49,336,728 ordinary shares of We Retail from its existing shareholders through a mandatory tender offer. The mandatory tender offer will commence after increase in the paid-up capital through the issue of new ordinary shares to be offered to the Company has been registered with the Ministry of Commerce. b) Approved the sale of all 5,000,000 ordinary shares in Centrepoint Shopping Mall Company Limited (“Centrepoint”) held by the Company, or 100% of the total shares of that company (Centrepoint has the paid-up share capital amounting to Baht 400,200,000 including shares paid-up in October 2011) to We Retail. The Company will receive payment for ordinary shares in Centrepoint through the transfer of the newly issued ordinary shares of We Retail, under the transaction described in a) above. On 16 December 2011, the Company completed the above transactions and as a result is the major shareholder of We Retail, with a controlling interest of 88.06%. Therefore, the Company included the financial statements of We Retail Public Company Limited in its consolidated financial statements as from 16 December 2011 onwards. The transaction is a reverse takeover. The Company treated the transaction as if, in order to maintain the shareholding structure of the combined entities at the same equity interest before the reverse acquisition, Centrepoint had to issue ordinary shares to exchange for ordinary shares of We Retail. The cost of the business combination is thus the fair value of Centrepoint’s number of equity interests, which was calculated by an independent financial advisor using the Adjusted Book Value Approach. The remaining balance of approximately Baht 46.1 million represented the consideration exceeds the fair value of the identifiable assets and liabilities of We Retail of approximately Baht 58.7 million, net of the non-controlling interest of Centrepoint of approximately Baht 12.6 million, presented as “Difference resulting from share swap between subsidiaries” in other components of shareholders’ equity. Fair value of the identifiable assets and liabilities as at the acquisition date of investment in subsidiary can be summarised below. (Unit: Thousand Baht) Cash and cash equivalents 36,826 Trade and other receivables 9,914 Other current assets 743 Other non-current assets 2,901 Trade and other payables (47,318) Other current liabilities (3,749) Other non-current liabilities (2,148) Total net assets (2,831) Less: Non-controlling interest of We Retail (338) Total (2,493) Non-controlling interest of Centrepoint (43,599) Difference resulting from share swap between subsidiaries (46,092)
151
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
On 9 February 2012, the Company acquired 93,842 ordinary shares of We Retail from outside shareholders, increasing its shareholders in that company from 88.06% to 88.08%. In July 2012, the Company invested Baht 400.3 million in additional ordinary shares of We Retail in proportion to its existing shareholding and non-controlling interests invested Baht 24.5 million in additional ordinary shares of We Retail. However, some of non-controlling interests have not invested the additional shares in proportion to their existing shareholdings. As a result, the Company’s shareholding in this company increased from 88.08% to 91.05%. The Company recorded the effect of the change in the ownership interests in subsidiary in other components of equity. The change in the ownership interests in subsidiary was detailed below. (Unit: Thousand Baht) Non-controlling interests investing in additional ordinary shares of We Retail 24,485 Less: Non-controlling interests of subsidiary adjusted (27,406) Deficit from the change in the ownership interests in subsidiary (2,921) Centrepoint Shopping Mall Company Limited On 12 November 2009 and 22 January 2010, meetings of the Company’s Board of Directors passed the following significant resolutions: a) Approved the purchase of the remaining shares of Centrepoint Shopping Mall Company Limited (“Centrepoint”) held by a company, for a total consideration of Baht 400,000 (4,000 ordinary shares with a value of Baht 100 each). This increased the Company’s shareholding in Centrepoint from 59.99% to 100.00% as a result. (The Company purchased the shares in April 2010). The excess of the acquisition price over the attributable net book value of this subsidiary at acquisition date, amounting to Baht 5.9 million, was therefore recorded in shareholders’ equity under the caption of “Excess of investment in subsidiary arising as a result of additional purchase of investment in the subsidiary at a price higher than the net book value of the subsidiary at the acquisition date”. b) Approved an increase in the registered share capital of Centrepoint, from Baht 1 million (10,000 ordinary shares with a par value of Baht 100 each) to Baht 500 million (5 million ordinary shares with a par value of Baht 100 each). The Company holds all shares and paid the called up portion (30%) of the additional share capital, amounting to Baht 149.7 million, in April 2010. Subsequently, the Company paid a further called up portion (30%) of the additional share capital, amounting to Baht 149.7 million, in September 2011 and an additional called up portion (20%) of the additional share capital, amounting to Baht 99.8 million, in October 2011. On 29 September 2011, a meeting of the Company’s Board of Directors passed a resolution to approve the sale of all 5,000,000 ordinary shares that the Company held in Centrepoint, or 100% of that company (Centrepoint had paid-up share capital amounting to Baht 400,200,000 including shares paid-up in October 2011) to We Retail. The Company will receive payment through the transfer of the newly issued ordinary shares of We Retail. As a result, the Company’s shareholding indirectly held through We Retail decreased to 88.06% as at 31 December 2011. In accordance with the Company acquiring ordinary shares of We Retail, and the Company and non-controlling interests investing in additional ordinary shares of We Retail, resulting in the Company’s shareholding in We Retail increasing from 88.06% to 91.05%. As a result, the Company’s shareholding in Centrepoint, indirectly held through We Retail, also increased from 88.06% to 91.05% as at 31 December 2012. Property Perfect International Pte Ltd. (“PPI”) On 14 August 2012, a meeting of the Company’s Board of Directors passed a resolution to ratify the establishment of a subsidiary, PPI in Singapore, to operate as a holding company. Such company is to have a paid up share capital of SGD 1 (1 ordinary share with a par value of SGD 1 each), with the Company holding a 100% interest. The subsidiary was established on 12 July 2012.
152
Share Group Co., Ltd. (“SG”) and Kabushiki Kaisha Kiroro Associates Co., Ltd. (“KA”) (subsidiaries indirectly held by the Company) On 27 August 2012, a meeting of the Company’s Board of Directors passed a resolution to acquire 11,400 ordinary shares of SG, incorporated in Japan, to manage the property development and hotel operations in Japan. The Company will have 69.01% of shareholding in SG. The details are as follows: a) On 18 July 2012, PPI acquired the 4,100 ordinary shares at a price of Yen 6,022 each, for a total of Yen 24.7 million b) On 8 August 2012, PPI acquired the 4,100 additional ordinary shares at a price of Yen 12,044 each, for a total of Yen 49.4 million. c) On 7 November 2012, PPI acquired the 3,200 additional ordinary shares from the existing shareholders of SG, at a price of Yen 9,033 each, for a total of Yen 28.9 million. In addition, on 27 August 2012, a meeting of the Company’s Board of Directors passed a resolution to SG acquiring all of ordinary shares and receiving claims on loans of KA and properties of Kiroro Resort. The Company and SG signed the share and purchase agreement of ordinary shares, claims on loans and properties of Kiroro Resort, as detailed below. a) All of 610 ordinary shares from the existing shareholders at a price of Yen 1 (100% shareholding) b) Claims on loans to KA from the existing shareholders totaling Yen 1,450 million at a price of Yen 160 million c) Kiroro resort’s properties, consisting of land, Hotel and equipment totaling Yen 1,040.0 million The Company and SG completed this transaction on 4 October 2012. In this regards, the Company has loans to SG through PPI to complete the transaction by Baht 549.8 million, equivalent to Yen 1,377.0 million. Fair value of the identifiable assets and liabilities as at the acquisition date and transaction completed date of subsidiary can be summarised below. (Unit: Thousand Yen) Cash and cash equivalents 356,782 Trade and other receivables 101,705 Inventories 55,951 Other current assets 63,580 Property, plant and equipment 1,901,323 Deferred tax assets (net of deferred tax liability of Yen 302,232 thousand) 34,727 Other non-current assets 12,085 Trade and other payables (783,317) Other current liabilities (125,124) Other non-current liabilities (96,153) Total net assets 1,521,559 Less: Fair value of non-controlling interests (46,249) 1,475,310 Consideration transferred (1,377,047) Gain on a bargain purchase 98,263 Consideration transferred 1,377,047 Less: Cash and cash equivalents (356,782) (1) 1,020,265 Net cash paid for purchase of investment in subsidiaries
153
ANNUAL REPORT 2012
(1)
PROPERTY PERFECT PUBLIC COMPANY LIMITED
Equivalent to Baht 408.5 million
Gain on a bargain purchase of Yen 98 million, equivalent to Baht 39 million, was calculated from difference among the aggregate of the consideration transferred to acquire the above assets and properties, the fair value of the acquirer’s previously held equity interest in the acquiree and the net identifiable assets acquired of SG and KA as at the date the control is obtained. The Company recorded the gain on a bargain purchase in the consolidated statement of comprehensive income for the current year. In this regards, the existing shareholders have taken into account for the taxes in Japan and transaction costs in setting the selling price based on. In addition, the fair value of non-controlling interests represented values agreed by the existing shareholders for this transaction. The Company had transaction costs relating to business combination of Yen 63 million, equivalent to Baht 24 million and recorded the transaction costs under administrative expenses in the consolidated statement of comprehensive income for the current year. The results of operations of its subsidiaries for the period as from 5 October 2012 to 31 December 2012 were detailed below. (Unit: Thousand Yen) 727,354 7,119 110,039 (462,991) (82,472) (484,242) (249,842) (11,353) (446,388)
Revenues from hotel operations Interest income Other income Cost of hotel operations Selling expenses Administrative expenses Loss on exchange Finance cost Loss for the period(1) (1) Equivalent to Baht 169.2 million 14. Investment in associate 14.1 Details of associate:
(Unit: Thousand Baht)
Consolidated financial statements
Share of income
Company’s name
Carrying from investment in Nature of Country of Shareholding amounts based associate business incorporation percentage on equity method during the year 2012 2011 2012 2011 2012 2011 (%) (%)
Krungthep Land Property Public Company Limited development Thailand Total
154
20.22
20.22 522,932 495,129 27,803 24,983 522,932 495,129 27,803 24,983
(Unit: Thousand Baht)
Company’s name
Krungthep Land Public Company Limited Total
Country of Nature of business incorporation
Property development
Thailand
Separate financial statements Shareholding percentage Cost 2012 2011 2012 2011 (%) (%)
20.22
20.22 359,999 359,999 359,999 359,999
14.2 Summarised financial information of associate Financial information of the associated company is summarised below: (Unit: Million Baht)
Total revenues Paid-up Total assets Total liabilities for the years capital as at as at as at ended Company’s name 31 December 31 December 31 December 31 December 2012 2011 2012 2011 2012 2011 2012 2011
Krungthep Land Public Company Limited
1,780 1,780 7,285 7,263 4,162 4,314
2,308
2,335
Profit for the years ended 31 December 2012 2011
151
129
In accordance with a resolution of the Extraordinary General Meeting of Shareholders No. 1/2008 held on 14 January 2008, on 31 January 2008, Krungthep Land Public Company Limited (“Krungthep Land”) issued and offered 188,806 units of 5-year, name-registered, unsecured convertible debentures with a face value of USD 100 or a total value of USD 18,880,600, to the overseas company. In accordance with the conditions of the convertible debentures, Krungthep Land is to pay interest semi-annually at a rate of not exceeding 3% per annum or a dividend yield (whichever is higher) only in years in which Krungthep Land declares a dividend based on the conditions of the convertible debentures and mature on 31 January 2013. They are convertible upon the listing of Krungthep Land’s shares on the Stock Exchange of Thailand or MAI, or one year from the issue date (whichever is earlier), at a conversion price of Baht 13.85 per ordinary share, on a quarterly basis. If no interest payment is made until the maturity date, Krungthep Land is to redeem the outstanding convertible debentures at a price equal to 1.311651 times the baht equivalent of the face value, with such redemption subject to change dependent upon the interest payment made during the life of the debentures. In November 2011, Krungthep Land amended the condition that Krungthep Land can redeem the convertible debentures before the maturity date. The early redemption value equals to the Baht equivalent of the face value and the interest of 5.5% per annum of the Baht equivalent of the face value calculated from the issuance date to redemption date. The interest is compounded every 6 months. Subsequently in December 2011, Krungthep Land redeemed all of convertible debentures before the maturity. The Company therefore recorded the reversal of equity of Krungthep Land amounting to approximately Baht 7.5 million which was presented under the heading of “Unsubordinated convertible debentures - equity component” in other components of equity.
155
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
On 9 January 2013, the Extraordinary Shareholders’ Meeting of Krungthep Land No. 1/2556 passed the following resolutions a) Approve the listing of Krungthep Land’s ordinary shares on the Stock Exchange of Thailand. b) Approve the decrease the registered capital of Krungthep Land of Baht 450 million from the registered capital of Baht 2,230 million to Baht 1,780 million by writing-off the remaining 45 million unsold shares with a par value of Baht 10 per share. c) Approve the change in the share par value of Krungthep Land by decreasing the par value from Baht 10 to Baht 1 each, resulting in an increase in the number of Krungthep Land’s shares from 178 million shares to 1,780 million shares with a par value of Baht 1 each. d) Krungthep Land approves the increase in the registered capital of Krungthep Land of Baht 620 million from Baht 1,780 million to Baht 2,400 million by issuing new ordinary shares with a par value of Baht 1 per share, not exceeding 500 million shares, to offer to the public (Initial Public Offering). Krungthep Land also offers shares with a par value of Baht 1 per share, not exceeding 120 million shares, to directors, executives and employees of Krungthep Land. If Krungthep Land has remaining shares from the offer to directors, executives and employees of Krungthep Land, Krungthep Land will offer them to the public (Initial Public Offering). 15. Other long-term investments (Unit: Thousand Baht)
Consolidated and separate financial statements 2012 2011
Available-for-sale securities Investments in property funds Less: Allowance for change in value Other investment Domestic non-marketable equity security Other long-term investments, net
54,055
54,055
(2,773)
(7,291)
51,282
46,764
4,275 4,275 55,557
4,275 4,275 51,039
16. Land held for development The land held for development with a net book value of Baht 3,412.0 million as at 31 December 2012 (2011: Baht 2,304.6 million) has been mortgaged with the financial institutions as collateral for credit facilities, guarantees and debentures.
156
17. Advances for purchases of land Consolidated financial statements 2012 2011
Balance as at 31 December 2011 Increase during the year Title of plots of land transferred during the year Balance as at 31 December 2012
736,577 234,443 (591,205) 379,815
(Unit: Thousand Baht)
Separate financial statements 2012 2011
554,641 503,287 (321,351)
439,895 172,637 (352,023)
348,550 280,180 (188,835)
736,577
260,509
439,895
Approximately Baht 163.2 million (2011: Baht 651.4 million) (Separate financial statements: Baht 45.2 million (2011: Baht 354.7 million)) of the above balance represented advances paid to landowners by the Company and its subsidiaries under agreements to purchase and to sell land already signed with the landowners by agents, the Company and its subsidiaries. The remaining advances, amounting to approximately Baht 216.7 million (2011: Baht 85.2 million) (Separate financial statements: Baht 215.3 million (2011: Baht 85.2 million)), have been paid to agents in acquiring land (Baht 20.7 million and Baht 105.0 million paid to an agents who are employee and management of the Company, respectively) and agreements to purchase and to sell land are still in the process of being signed with the landowners. As at 31 December 2012, the Company and its subsidiaries were contracted to purchase and to sell land amounting to Baht 980.9 million (2011: Baht 2,974.4 million) (Separate financial statements: Baht 323.9 million (2011: Baht 1,304.2 million)).
157
158
Cost 1 January 2011 Additions Transfer to project development costs Disposals Transfer in (out) 31 December 2011 Additions Transfer from (to) project development costs Disposals/written-off Acquisitions of subsidiaries during the year Translation adjustment Transfer in (out) 31 December 2012 Accumulated depreciation 1 January 2011 Depreciation for the year
291,581 -
(7,235) 284,346 16,443
(820) (1,289)
7,093 305,773
116,163 29,425
59,494 -
-
59,002 (6,196) 112,300
-
-
434,975 (45,680) 391,442
-
2,127
-
-
172,543 (18,120) 162,903
-
8,480
-
142,025 24,265
290,171 (30,473) 549,661
887 (31,309)
(2,232) 253,387 66,998
211,277 44,342
642 3,646
89,061
(3,526) (14)
687 38,093 54,508
1,050 36,356
Tools and equipment
34,713 1,565
27,853 (2,925) 71,286
(889)
40,030 7,217
40,021 9
Motor vehicles
Consolidated financial statements
Office Hotel Furniture buildings and Hotel building and clubhouses buildings improvements equipment
59,494 -
Land
18. Property, plant and equipment
-
(7,093) 30,555
(298) -
(3,500) (687) 8,5463 29,400
4,517 8,216
Construction in progress
34,232 2,523
6,413 (674) 36,107
(311) (11,039)
41,000 718
40,949 51
Others
327,775 61,424
990,957 (104,068) 1, 749,068
(4,068) (44,540)
(10,735) (2,232) 724,896 185,891
648,889 88,974
Total
(Unit: Thousand Baht)
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
159
8,546 30,555
36,278 2,368 25,243 (887) (2,634) 60,368 3,752 10,918
Depreciation on disposals (2,032) 31 December 2011 145,588 164,258 4,288 Depreciation for the year 30,070 4,440 4,359 34,487 9,018 Acquisitions of subsidiaries during the year 23 212,519 Depreciation on disposals (1,546) (30,387) (3) Translation adjustment (287) (284) (22,511) 31 December 2012 174,112 4,153 4,098 358,366 13,303 Allowance for impairment 1 January 2011 1,112 3,032 Increase during the year 5,396 3,704 Decrease during the year (1,112) (3,032) 31 December 2011 5,396 3,704 31 December 2012 5,396 3,704 Net book value 31 December 2011 54,098 135,054 89,129 33,805 31 December 2012 106,904 127,957 387,269 158,805 191,295 75,758 Depreciation for the years 2011 (included in administrative expenses) 2012 (Baht 12.2 million included in cost of hotel operations and the balance included in administrative expenses)
Construction in progress
Motor vehicles
Land
Tools and equipment
Office Hotel Furniture buildings and Hotel building and clubhouses buildings improvements equipment
Consolidated financial statements
4,245 5,905
-
(8,081) (17) 30,202
36,755 1,545
Others
61,424 86,287
328,629 1,095,366
4,144 9,100 (4,144) 9,100 9,100
237,785 (40,904) (25,733) 644,602
(2,032) 387,167 86,287
Total
(Unit: Thousand Baht)
Cost 1 January 2011 Additions Transfer to project development costs Disposals 31 December 2011 Additions Transfer from (to) project development costs Disposals Transfer in (out) 31 December 2012 Accumulated depreciation 1 January 2011 Depreciation for the year Depreciation on disposals 31 December 2011 Depreciation for the year Depreciation on disposals 31 December 2012
160 249,213 (7,235) 241,978 3,169 (820) (1,289) 7,093 250,131 102,113 25,576 127,689 25,861 (1,546) 152,004
59,494 59,494 59,494 -
Land
124,213 19,114 (1,819) 141,508 22,211 (30,355) 133,364
171,872 32,049 (1,964) 201,957 20,382 887 (31,197) 192,029 32,104 578 32,682 866 (883) 326,665
33,668 33,668 3,430 (883) 36,215 -
3,687 8,216 (3,500) 8,403 72 (298) (7,093) 1,084
Separate financial statements Office buildings Furniture and Motor Construction and clubhouses equipment vehicles in progress
26,172 1,516 27,688 259 (8,080) 19,867
28,246 28,246 608 (311) (8,345) 20,198
Others
284,602 46,784 (1,819) 329,567 49,197 (40,864) 337,900
546,180 40,265 (10,735) (1,964) 573,746 27,661 (542) (41,714) 559,151
Total
(Unit: Thousand Baht)
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
161
59,368 58,665
3,032 3,704 (3,032) 3,704 3,704 110,585 94,423
986 3,550
8,403 1,084
1,639 331
-
Others
46,784 49,197
235,079 212,151
4,144 9,100 (4,144) 9,100 9,100
Total
As at 31 December 2012, certain plant and equipment items had been fully depreciated but were still in use. The gross carrying amount (before deducting accumulated depreciation and allowance for impairment loss) of those assets amounted to approximately Baht 253.4 million (2011: Baht 172.8 million) (Separate financial statements: Baht 127.0 million (2011: Baht 152.2 million)).
Allowance for impairment 1 January 2011 1,112 Increase during the year 5,396 Decrease during the year (1,112) 31 December 2011 5,396 31 December 2012 5,396 Net book value 31 December 2011 54,098 31 December 2012 54,098 Depreciation for the years as included in administrative expenses 2011 2012
Land
Separate financial statements Office buildings Furniture and Motor Construction and clubhouses equipment vehicles in progress
(Unit: Thousand Baht)
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
19. Leasehold rights
Cost 1 January 2011 Additions 31 December 2011 Additions 31 December 2012 Accumulated amortisation 1 January 2011 Amortisation for the year 31 December 2011 Amortisation for the year 31 December 2012 Allowance for impairment 31 December 2011 31 December 2012 Net book value 31 December 2011 31 December 2012 Amortisation for the years 2011 (Consolidated financial statements: Baht 4.8 million included in project development costs and the balance in administrative expenses and separate financial statements: included in administrative expenses) 2012 (Consolidated financial statements: Baht 4.8 million included in project development costs and the balance in administrative expenses and separate financial statements: included in administrative expenses)
(Unit: Thousand Baht)
Consolidated financial statements
Separate financial statements
410,800 1,790 412,590 286,618 699,208
92,000 92,000 92,000
47,645 8,031
42,329 3,211
55,676
45,540
8,054 63,730
3,220 48,760
189,844
-
189,844
-
167,070 445,634
46,460 43,240
8,031
3,211
8,054
3,220
The details of the leasehold right are as follows: The Company Leasehold rights to approximately 4 rai of land of which the Company subleased for the remainder of the lease period. The sublessee made an advance payment and paid annual rental at rates stipulated in the contract. The Company recognises the advance lease payment over the period of the sublease contract. We Retail Public Company Limited (“We Retail�) On 15 November 2012, We Retail entered into a memorandum to transfer leasehold rights to land of the Crown Property Bureau with an individual, whereby We Retail is to pay a consideration of Baht 50 million (We Retail paid Baht 10 million and
162
issued 4 promissory notes of Baht 10 million each avaled by a bank, each payable one year apart counting from date of the agreement to transfer the leasehold rights). Currently, We Retail is in the process of arranging the transfer of the leasehold rights. Centrepoint Shopping Mall Company Limited (“Centrepoint”) a) Leasehold rights to approximately 7 rai of land under a lease agreement with a term of 26 years and 8 months, running from 8 April 2010 to 31 December 2036. Centrepoint is to pay an annual rental at the rates stipulated in the agreement. b) On 23 August 2012, Centrepoint entered into a land sublease agreement with a company, with a lease term of 30 years, running from 1 January 2015 to 31 December 2044. Centrepoint is to pay an upfront fee of approximately Baht 739.9 million (Centrepoint paid Baht 229.1 million on the agreement date and will issue promissory notes avaled by a bank on the lease registration date, within 31 October 2012. These promissory notes mature on 31 July 2013 and 31 July 2014 and are for Baht 255.4 million each) and annual fees totaling Baht 1,785.0 million, for a total of Baht 2,524.9 million (not including the compensation for losses of approximately Baht 202.5 million stipulated in the agreement). Subsequently, on 30 October 2012, Centrepoint amended the agreement to postpone the registration of the leasehold rights to 30 April 2013. 20. Trade and other payables
(Unit: Thousand Baht)
Consolidated financial statements 2012 2011
Trade account payable - related company Trade accounts payable - unrelated companies Account payable - forward contracts Account payable - Land Amounts due to related companies Creditors per rehabilitation plan Retention Accrued interest expenses Accrued expenses Other payables Total trade and other payables
5,734 936,406 6,496 9,512 55,850 85,446 449,482 9,894 1,558,820
15,122 536,773 23,757 9,027 40,238 92,245 212,633 929,795
Separate financial statements 2012 2011
3,598 476,628 2,546 28,774 83,424 151,659 746,629
9,358 314,975 23,757 1,251 26,309 88,054 125,712 589,416
During the year 2011, the Company recorded the reversal of creditors per rehabilitation plan amounting to Baht 37.0 million since the opinion of the Company’s legal advisor was that these debts had expired. The Company presented this amount under the heading of “Revenue from reversal of creditors per rehabilitation plan” in the statement of comprehensive income. The balance of creditors per the rehabilitation plan belongs to We Retail Public Company Limited (“We Retail”), which is subject to interest at a rate of 7.50% per annum, is a liability that arose due to a fire. We Retail will pay the creditors per the rehabilitation plan not more than Baht 5.0 million when the comptroller issues an order holding We Retail responsible for the fire, and We Retail will claim this amount from its insurance company. We Retail has not yet received compensation from the insurance company since the comptroller is in the process of considering the case.
163
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
21. Note payable
Notes payable Less: Current portion Notes payable - net of current portion
(Unit: Thousand Baht)
Consolidated financial statements 2012 2011
Separate financial statements 2012 2011
589,060 (559,060)
800,000 (800,000)
333,420 (333,420)
800,000 (800,000)
30,000
-
-
-
The details of the note payables are as follows: The Company The promissory note of Baht 333.4 million (2011: Baht 800.0 million) is subject to interest at a rate of the minimum overdraft rate (MOR) and are to be repaid within May and June 2013. The promissory notes are secured by the mortgage of parts of the Company’s Project land. The promissory note includes a covenant regarding the Group’s debt to equity ratio not exceeding 2.00:1, with debt and equity calculated based on total debts and equity in the consolidated financial statements. As at 31 December 2012, the ratio was higher than the ratio stipulated in the agreement. However, the agreement stipulates that the Group has a period of 6 months to remedy the ratio. Estate Perfect Company Limited The promissory note of Baht 215.6 million (2011: Nil) is subject to interest at a rate of the minimum overdraft rate (MOR) and are to be repaid within June 2013. The promissory notes are secured by the mortgage of parts of Estate’s Project land and the guarantee provided by the Company The promissory note includes a covenant regarding the Group’s debt to equity ratio not exceeding 2.00:1, with debt and equity calculated based on total debts and equity in the consolidated financial statements. As at 31 December 2012, the ratio was higher than the ratio stipulated in the agreement. However, the agreement stipulates that the Group has a period of 6 months to remedy the ratio. We Retail Public Company Limited The 4 promissory notes were avaled by a bank, Baht 10 million each (2011: Nil) and each is repayable every one year after each is due in order to pay the leasehold right, as discussed in Note 19 to the financial statements. 22. Bills of exchange payable The bills of exchange are subject to interest at a rate of 4.55 - 4.95% per annum and during the year 2012, the Company repaid the bills of exchange in full amount.
164
23. Debentures
(Unit: Thousand Baht)
Consolidated and separate financial statements 2012 2011
Secured debentures No. 2/2009#2 Secured debentures No. 1/2010 Secured debentures No. 2/2010 Secured debentures No. 3/2010 Unsecured debentures No. 4/2010 Secured debentures No. 1/2012#1 Secured debentures No. 1/2012#2 Unsecured debentures No. 1/2012#1 Unsecured debentures No. 1/2012#2 Secured debentures No. 2/2012 Total Less: Current portion Debentures - net of current portion
1,498,302 1,000,000 495,502 1,971,560 800,000 1,000,000 2,935,491 9,700,855 (4,298,302)
800,000 1,487,912 1,000,000 1,000,000 1,500,000 5,787,912 (3,300,000)
5,402,553
2,487,912
The debentures are detailed as follows: a) On 14 August 2009, the Company issued and offered 800,000 secured debentures No. 2/2009#2 with a par value of Baht 1,000 each, or a total value of Baht 800 million. The debentures mature on 14 August 2012, bear interest at a rate of 6% per annum and are secured by the mortgage of parts of the Company’s and subsidiary’s project land and construction. As at 31 December 2012, the Company had no outstanding balance for the debentures (2011: Baht 800 million). b) On 26 February 2010, the Company and offered 1,500,000 secured debentures No. 1/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,500 million. The debentures mature on 26 February 2013, bear interest at a rate of 5.9% per annum and are secured by the letter of guarantee provided by a financial institution of Baht 975 million. As at 31 December 2012, the Company had outstanding balance of Baht 1,498 million for the debentures (2011: Baht 1,488 million). c) On 9 September 2010, the Company issued and offered 1,000,000 secured debentures No. 2/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,000 million. The debentures mature on 9 March 2012, bear interest at a rate of 5.5% per annum and are secured by the mortgage of parts of the Company’s and subsidiary’s project land and construction. As at 31 December 2012, the Company had no outstanding balance for the debentures (2011: Baht 1,000 million). d) On 18 November 2010, the Company issued and offered 1,000,000 secured debentures No. 3/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,000 million. The debentures mature on 18 November 2013, bear interest at a rate of 5.8% per annum and are secured by the mortgage of parts of the Company’s project land and construction. As at 31 December 2012, the Company had outstanding balance of Baht 1,000 million for the debentures (2011: Baht 1,000 million).
165
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
e) On 18 November 2010, the Company issued and offered 1,500,000 unsecured debentures No. 4/2010 with a par value of Baht 1,000 each, or a total value of Baht 1,500 million. The debentures mature on 18 November 2012, bear interest at a rate of 6.5% per annum. As at 31 December 2012, the Company had no outstanding balance for the debentures (2011: Baht 1,500 million). f) On 15 March 2012, the Company issued and offered 500,000 secured debentures No. 1/2012#1 with a face value of Baht 1,000 each, or a total value of Baht 500 million. The debentures mature on 15 March 2014, bear interest at a rate of 5.35% per annum and are secured by a letter of guarantee provided by a financial institution of Baht 300 million. As at 31 December 2012, the Company had outstanding balance of Baht 496 million for the debentures (2011: Nil). g) On 15 March 2012, the Company issued and offered 2,000,000 secured debentures No. 1/2012#2 with a face value of Baht 1,000 each, or a total value of Baht 2,000 million. The debentures mature on 15 March 2015, bear interest at a rate of 5.35% per annum during the first and second years, and 6.25% per annum during the third year and are secured by a letter of guarantee provided by a financial institution of Baht 1,200 million. As at 31 December 2012, the Company had outstanding balance of Baht 1,972 million for the debentures (2011: Nil) h) On 9 August 2012, the Company issued and offered 800,000 unsecured debentures No. 1/2012#1 with a face value of Baht 1,000 each, or a total value of Baht 800 million. The debentures mature on 5 April 2013, bear interest at a rate of 4.75% per annum. As at 31 December 2012, the Company had outstanding balance of Baht 800 million for the debentures (2011: Nil). i) On 9 August 2012, the Company issued and offered 1,000,000 unsecured debentures No. 1/2012#2 with a face value of Baht 1,000 each, or a total value of Baht 1,000 million. The debentures mature on 6 May 2013, bear interest at a rate of 4.85% per annum. As at 31 December 2012, the Company had outstanding balance of Baht 1,000 million for the debentures (2011: Nil). j) On 9 November 2012, the Company issued and offered 3,000,000 secured debentures No. 2/2012 with a face value of Baht 1,000 each, or a total value of Baht 3,000 million. The debentures mature on 9 November 2015, bear interest at a rate of 5.45% per annum and are secured by a letter of guarantee provided by a financial institution of Baht 1,800 million. As at 31 December 2012, the Company had outstanding balance of Baht 2,935 million for the debentures (2011: Nil). Under the debenture agreement, there are normal covenants relating to various matters as required in the normal course of business. Debentures amounting to Baht 1,500 million, which mature on 26 February 2013, include a covenant regarding the net debt to equity ratio not exceeding 1.75:1. The ratio is higher than the ratio stipulated in the agreement, but the Company redeemed the debentures in full in February 2013. 24. Unsubordinated convertible debentures The Annual General Meeting of the Company’s shareholders held on 29 April 2011 passed a resolution to approve the cancellation of the issue and offer of not more than USD 30 million of unsubordinated convertible debentures, or the equivalent of not more than Baht 1,000 million as previously approved by the Extraordinary General Meeting of the Company’s shareholders No.1/2008 held on 20 June 2008.
166
167
-
-
-
-
63.3
1) A facility of Baht 1,000.0 million
2) A facility of Baht 670.0 million
3) A facility of Baht 1,631.0 million
4) A facility of Baht 1,157.3 million
5) A facility of Baht 820.0 million
Interest rate
Repayment period
105.1 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. The Company made payments in full in 2012. 118.0 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 60% of the selling price. which is not to be less than the amount informed to the bank. The Company made payments in full in 2012. 115.5 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price. which is not to be less than the amount informed to the bank. The Company made payments in full in 2012. 200.4 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the bank. The Company made payments in full in 2012. 187.9 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. The Company made payments in full in February 2013.
Balance 2012 2011 (Million Baht)
25. Long-term loans The Company Long-term loans consist of loans granted by three financial institutions under the following credit facilities.
The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
The mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
Security
168
26.2
-
393.5
126.0
176.0
-
304.8
6) A facility of Baht 900.0 million
7) A facility of Baht 344.3 million
8) A facility of Baht 933.0 million
9) A facility of Baht 679.0 million
10) A facility of Baht 198.0 million
11) A facility of Baht 320.0 million
12) A facility of Baht 650.0 million
Interest rate
Repayment period
210.2 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within October 2016. 83.1 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 65% of the selling price. The Company made payments in full in 2012. 434.0 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 65% of the selling price. Any remaining balance is to be repaid within October 2016. 126.0 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price. Any remaining balance is to be repaid within May 2014. 176.0 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 80% of the selling price. Any remaining balance is to be repaid within June 2014. 133.0 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. The Company made payments in full in 2012. 510.7 Interest at a rate tied to the Repaying each time a consdominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within October 2013
Balance 2012 2011 (Million Baht)
The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction.
The guarantee of the mortgage of part of the Company’s project land and construction.
Security
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
169
327.2
172.8
281.8
217.0
1.0
15) A facility of Baht 900.0 million
16) A facility of Baht 400.0 million
17) A facility of Baht 900.0 million
18) A facility of Baht 1,701.4 million
19) A facility of Baht 370.0 million
Interest rate
Repayment period
- Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price. Any remaining balance is to be repaid within October 2015. - Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 65% of the selling price. Any remaining balance is to be repaid within February 2015. - Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price. Any remaining balance is to be repaid within April 2016. - Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 75% of the selling price. Any remaining balance is to be repaid within May 2015. - Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 60% of the selling price. Any remaining balance is to be repaid within January 2018. - Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 70% of the selling price. Any remaining balance is to be repaid within January 2018. - Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price. Any remaining balance is to be repaid within October 2015.
2,345.9 2,176.8
2,714.0 2,399.9 (368.1) (223.1)
174.4
14) A facility of Baht 450.0 million
Total Less: Current portion Long-term loans net of current portion
450.0
13) A facility of Baht 450.0 million
Balance 2012 2011 (Million Baht)
The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction. The guarantee of the mortgage of part of the Company’s project land and construction.
Security
170
-
-
55.0
106.2
110.0
1) A facility of Baht 560.0 million
2) A facility of Baht 720.0 million
3) A facility of Baht 385.0 million
4) A facility of Baht 450.0 million
5) A facility of Baht 343.0 million
-
-
41.5
165.8
91.3
Balance 2012 2011 (Million Baht)
Repayment period
Security
Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from The guarantee of the Company and the minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price, which mortgage of part of the subsidiary’s is not to be less than the amount informed to the bank. Any project land and construction. remaining balance is to be repaid within November 2015.
Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from The guarantee of the Company and the minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price, which mortgage of part of the subsidiary’s is not to be less than the amount informed to the bank. Any project land and construction. remaining balance is to be repaid within July 2015.
Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from The guarantee of the Company and the minimum loan rate (MLR) mortgage, at a rate of not less than 70% of the selling price, which mortgage of part of the subsidiary’s is not to be less than the amount informed to the bank. Any project land and construction. remaining balance is to be repaid within September 2016.
Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from The guarantee of the Company and the minimum loan rate (MLR) mortgage, at a rate of not less than 70% of the selling price, which mortgage of part of the subsidiary’s is not to be less than the amount informed to the bank. The project land and construction. subsidiary made payments in full in 2012.
Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from The guarantee of the Company and the minimum loan rate (MLR) mortgage, at a rate of not less than 75% of the selling price, which mortgage of part of the subsidiary’s is not to be less than the amount informed to the bank. The project land and construction. subsidiary made payments in full in 2012.
Interest rate
The subsidiaries Long-term loans consist of loans granted by four financial institutions under the following credit facilities.
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
171
174.3
-
116.7
214.9
441.2
89.8
6) A facility of Baht 480.0 million
7) A facility of Baht 870.0 million
8) A facility of Baht 184.0 million
9) A facility of Baht 401.2 million
10) A facility of Baht 775.1 million
11) A facility of Baht 515.4 million
Interest rate
Repayment period
- Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within May 2016. 414.0 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. The subsidiary made payments in full in 2012. 38.9 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within June 2013. 82.2 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within February 2015. 178.3 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within July 2015. 89.8 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within October 2014.
Balance 2012 2011 (Million Baht)
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
The guarantee of the mortgage of part of the subsidiary’s project land and construction.
Security
172
198.6
186.5
97.8
29.6
259.1
44.8
43.7
12) A facility of Baht 198.6 million
13) A facility of Baht 211.3 million
14) A facility of Baht 370.3 million
15) A facility of Baht 305.0 million
16) A facility of Baht 1,632.0 million
17) A facility of Baht 218.0 million
18) A facility of Baht 194.2 million
Interest rate
Repayment period
Security
157.1 Interest at a rate tied to the It is to be repaid monthly at Baht 2.3 million as from January 2013. The guarantee of the Company and the minimum loan rate (MLR) Any remaining balance is to be repaid within December 2022 mortgage of part of the subsidiary’s project land and construction. 51.4 Interest at a rate tied to the It is to be repaid monthly at Baht 2.5 million as from January 2013. The guarantee of the Company and the minimum loan rate (MLR) Any remaining balance is to be repaid within December 2022 mortgage of part of the subsidiary’s project land and construction. 57.4 Interest at a rate tied to the It is to be repaid monthly at Baht 4.5 million as from January 2013. The guarantee of the Company and the minimum loan rate (MLR) Any remaining balance is to be repaid within December 2022 mortgage of part of the subsidiary’s project land and construction. 29.6 Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, The guarantee of the Company and the minimum loan rate (MLR) at a rate of not less than 70% of the selling price, which is not to mortgage of part of the subsidiary’s be less than the amount informed to the bank. Any remaining project land and construction. balance is to be repaid within March 2015. - Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, The guarantee of the Company and the minimum loan rate (MLR) at a rate of not less than 70% of the selling price , which is not to mortgage of part of the subsidiary’s be less than the amount informed to the bank. Any remaining project land and construction. balance is to be repaid within May 2017. - Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, The guarantee of the Company and the minimum loan rate (MLR) at a rate of not less than 70% of the selling price , which is not to mortgage of part of the subsidiary’s be less than the amount informed to the bank. Any remaining project land and construction. balance is to be repaid within July 2015. - Interest at a rate tied to the Repaying each time a condominium unit is redeemed from mortgage, The guarantee of the Company and the minimum loan rate (MLR) at a rate of not less than 70% of the selling price , which is not to mortgage of part of the subsidiary’s be less than the amount informed to the bank. Any remaining project land and construction. balance is to be repaid within October 2014.
Balance 2012 2011 (Million Baht)
ANNUAL REPORT 2012 PROPERTY PERFECT PUBLIC COMPANY LIMITED
173
-
200.0
44.3
2,443.0 (193.9)
20) A facility of Baht 260.0 million
21) A facility of Baht 670.0 million
22) A facility of Baht 228.5 million
Total Less: Current portion Long-term loans net of current portion
Interest rate
Repayment period
- Interest at a rate tied to the Repaying each time a condominium unit is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 70% of the selling price , which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within November 2014. 60.6 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the bank. The subsidiary made payments in full in 2012. 242.1 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 65% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within April 2014. 28.0 Interest at a rate tied to the Repaying each time a plot of land with house is redeemed from minimum loan rate (MLR) mortgage, at a rate of not less than 70% of the selling price, which is not to be less than the amount informed to the bank. Any remaining balance is to be repaid within September 2015. 1,728.0 (414.0)
2,249.1 1,314.0
30.5
19) A facility of Baht 108.9 million
Balance 2012 2011 (Million Baht)
The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction. The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction. The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction. The guarantee of the Company and the mortgage of part of the subsidiary’s project land and construction.
Security
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
The outstanding long-term loans are as follows:
Long-term loans Less: Current portion Long-term loans - net of current portion
(Unit: Thousand Baht)
Consolidated financial statements 2012 2011
Separate financial statements 2012 2011
5,157,028 (562,036)
4,127,917 (637,121)
2,713,993 (368,123)
2,399,897 (223,140)
4,594,992
3,490,796
2,345,870
2,176,757
The loan agreements contain normal covenants relating to various matters as required in the normal course of business. As at 31 December 2012, the long-term credit facilities of the Company and its subsidiary which have not been drawn down amounted to Baht 9,825.0 million (2011: Baht 6,856.0 million). A credit facility agreement of Baht 820 million, under which the outstanding balance was Baht 63.3 million as at 31 December 2012, includes a covenant regarding the debt to equity ratio. The ratio as at period end is higher than the ratio stipulated in the agreement, but the Company repaid this loan in full in February 2013. 26. Provision for long-term employee benefits Provision for long-term employee benefits as at 31 December 2012, which is compensations on employees’ retirement, was as follows: (Unit: Thousand Baht)
Consolidated Separate financial statements financial statements 2012 2011 2012 2011
Defined benefit obligation at beginning of year Current service cost Interest cost Benefits paid during the year Increase from purchase of subsidiary (Note 13) Actuarial loss Defined benefit obligation at end of year Unrecognised actuarial loss Unrecognised transitional provisions Provisions for long-term employee benefits at end of year
174
83,050 10,324 3,429 (3,865) 15,827 11,533 120,298 (10,573) (44,091) 65,634
73,484 6,476 3,090 83,050 (58,787) 24,263
64,289 7,532 2,761 (3,865) 10,196 80,913 (9,343) (33,863) 37,707
56,439 5,306 2,544 64,289 (45,151) 19,138
Long-term employee benefit expenses included in the profit or loss was as. Consolidated financial statements 2012 2011
Current service cost Interest cost Actuarial loss recognised during the year Transitional liability recognised during the year Total expense recognised in profit or loss
(Unit: Thousand Baht)
Separate financial statements 2012 2011
10,324 3,429 960 14,696
6,476 3,090 14,697
7,532 2,761 853 11,288
5,306 2,544 11,288
29,409
24,263
22,434
19,138
Line items under which such expenses are included in selling and administrative expenses. Principal actuarial assumptions at the valuation date were as follows: Consolidated financial statements (% per annum) 2.0%, 3.5% 5.0% - 7.0% 0.0% - 22.9%
Discount rate Future salary increase rate Staff turnover rate
Separate financial statements (% per annum) 3.5% 5.0% - 7.0% 0.0% - 22.9%
Amounts of defined benefit obligation for the current and previous four periods are as follows: (Unit: Thousand Baht)
Defined benefit obligation Experience adjustments arising on the plan liabilities Consolidated Separate Consolidated Separate financial statements financial statements financial statements financial statements
Year 2012 Year 2011 Year 2010 Year 2009 Year 2008
120,298 83,050 73,484 59,703 48,995
80,913 64,289 56,439 49,092 40,286
4,638 -
4,051 -
175
ANNUAL REPORT 2012
PROPERTY PERFECT PUBLIC COMPANY LIMITED
27. Provisions
(Unit: Thousand Baht)
Consolidated and separate financial statements
Balance as at 1 January 2011 Revise provision for loss arising from minimum revenue guarantee Adjust amounts to be paid Total Less: Paid for minimum revenue guarantee Balance as at 31 December 2011 Revise provision for loss arising from minimum revenue guarantee Adjust amounts to be paid Total Less: Paid for minimum revenue guarantee Balance as at 31 December 2012
12,740 33,595 (868) 45,467 (34,560) 10,907 32,759 (7,058) 36,608 (36,608) -
Minimum revenue guarantee for the Fund On 28 February 2008, the Company entered into an agreement to transfer the Company’s properties to Property Perfect Property Fund (“the Fund”), for a total consideration of Baht 510 million. Under the agreement, the Company agrees to guarantee minimum annual revenue for the Fund (rental and service revenues before deducting expenses) of Baht 55 million for a period of five years, expiring on 31 December 2012. The guaranteed payment is due within 31 January and 31 July of each year in accordance with conditions as stipulated in the agreement. However, the amount of guaranteed revenue depends on the ratio of the value of the outstanding properties to the value of the properties in which the Fund initially invested, as determined by an appraisal company for the purpose of the initial investment. During the current year, the Company revised provision for loss from such guarantee by Baht 32.8 million (2011: Baht 33.6 million) and recorded it as a separate item under the heading of “Loss arising from minimum revenue guarantee” in the statement of comprehensive income. 28. Share capital/Share discount The Annual General Meeting of the Company’s shareholders held on 29 April 2011 passed the following significant resolutions. a) Approved the cancellation of Baht 962,434,824 ordinary shares (160,405,804 ordinary shares with a par value of Baht 6 each) as reserved for the conversion of the debentures to ordinary shares. b) Approved the cancellation of Baht 810,000,000 ordinary shares (135,000,000 ordinary shares with a par value of Baht 6 each) as reserved for the conversion of the debentures to ordinary shares, as previously approved by the Extraordinary General Meeting of the Company’s shareholders No.1/2005 held on 19 September 2005. c) Approved the reduction of the registered share capital from Baht 6,552,000,000 (1,092,000,000 ordinary shares with a par value of Baht 6 each) to Baht 4,779,565,176 (796,594,196 ordinary shares with a par value of Baht 6 each) by canceling unissued shares of the Company as described in a) and b).
176
d) Approved the change of the par value of the Company’s ordinary shares from Baht 6 to Baht 1 per share. e) Approved increase in the registered share capital from Baht 4,779,565,176 (4,779,565,176 ordinary shares with a par value of Baht 1 each) to Baht 5,961,161,256 (5,961,161,256 ordinary shares with a par value of Baht 1 each) by issuing 787,730,720 ordinary shares with a par value of Baht 1 each to offer to the Company’s existing shareholders and issuing 393,865,360 ordinary shares with a par value of Baht 1 each to be reserved for the exercise of the warrants as described in Note 29 to the financial statements. The Company registered the reduction of the registered share capital, change of the par value of the Company’s ordinary shares and increase in the registered share capital with the Ministry of Commerce on 4 May 2011, 6 May 2011 and 9 May 2011, respectively. As at 31 December 2011, the Company’s issued and paid up share capital has increased to Baht 4,726,456,320 (4,726,456,320 ordinary shares of Baht 1 each), with totaling Baht 39,600 (6,600 ordinary shares of Baht 6 each (for comparative purposes, this has been adjusted to 39,600 ordinary shares of Baht 1 each in accordance with the change in par value of the ordinary shares)) and Baht 72,000 (72,000 ordinary shares of Baht 1 each) being the result of the exercise of warrants in December 2010 and June 2011, respectively. The Company registered increase in its capital with the Ministry of Commerce on 13 January 2011 and 11 July 2011, respectively. Subsequently, the Annual General Meeting of the Company’s shareholders held on 27 April 2012 passed a resolution to approve increase in the registered share capital from Baht 4,779,565,176 (4,779,565,176 ordinary shares with a par value of Baht 1 each) to Baht 5,961,161,256 (5,961,161,256 ordinary shares with a par value of Baht 1 each) by issuing 787,730,720 ordinary shares with a par value of Baht 1 each to offer to the Company’s existing shareholders and issuing 393,865,360 ordinary shares with a par value of Baht 1 each to be reserved for the exercise of the warrants as described in Note 29 to the financial statements. In this regards, this resolution has been approved by the Annual General Meeting of its shareholders on 29 April 2011. However, the Company was unable to issue and offer the additional share capital. Therefore, the Company proposed this resolution to the Annual General Meeting of its shareholders for re-consideration. As at 31 December 2012, the Company’s issued and paid up share capital has increased to Baht 5,641,047,963 (5,641,047,963 ordinary shares of Baht 1 each), as a result of the issue of Baht 787,730,720 of additional ordinary shares with a par value of Baht 1 each, Baht 52,928,322 of ordinary shares with a par value of Baht 1 each being the result of the exercise of warrants (PF-W2) in June and November 2012 and Baht 73,932,601 ordinary shares with a par value of Baht 1 each being the result of the exercise of warrants (PF-W3) in September 2012. The Company registered the increase in its capital with the Ministry of Commerce on 29 June 2012, 6 July 2012 and 12 October 2012, respectively. The Company’s share discount is detailed below. (Unit: Thousand Baht)
Consolidated and separate financial statements
Balance as at 31 December 2011 Increase from conversion of warrants (PF-W2) Balance as at 31 December 2012
(20,685) (52,839) (73,524)
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29. Warrants The warrants are detailed as follows: Outstanding as at 31 December 2011 Issued during the year Exercised during the year Expired during the year Outstanding as at 31 December 2012
PF-W3 Units
PF-W2 Units
393,865,295 (73,932,601) -
8,851,476 (8,821,387) (30,089)
319,932,694
-
PF-W2 Following the change in the par value of the Company’s ordinary shares, as discussed in Note 28 to the financial statements, one warrant (PF-W2) can be converted to six ordinary shares at an exercise price of Baht 0.00167 per share and have an exercise period of 10 years from the issue date, 7 November 2002, with stipulated exercise dates of the end of the second and the fourth quarter of each year. For comparative purposes, the change in the par value of the Company’s ordinary shares is adjusted as if the share spilt had occurred at the beginning of the earliest period reported. In June 2011, the Company received advance subscription of Baht 0.00167 per share to 72,000 of the additional ordinary shares arising from the exercise of the warrants (PF-W2), a total of Baht 120. The Company registered the resulting increase of Baht 72,000 in its capital with the Ministry of Commerce on 11 July 2011. In June 2012, the Company received advance subscription of Baht 0.00167 per share to 6,616,392 of the additional ordinary shares arising from the exercise of the warrants (PF-W2) of 1,102,732 units, a total of Baht 11,049. The Company registered the resulting increase of Baht 6,616,392 in its capital with the Ministry of Commerce on 6 July 2012. In November 2012, the Company received advance subscription of Baht 0.00167 per share to 46,311,930 of the additional ordinary shares arising from the exercise of the warrants (PF-W2) of 7,718,655 units, a total of Baht 77,341. The remaining warrants expired on 6 November 2012. PF-W3 The Annual General Meeting of the Company’s shareholders held on 27 April 2012 passed a resolution to approve the issue of the warrants to the Company’s existing shareholders (PF-W3) in a ratio of 1 warrant for every 2 new ordinary shares to be offered to the Company’s existing shareholders as described in Note 28 to the financial statements, without specifying the offer price. Details are as follows: No. of warrants granted (Units) Life of warrants Exercisable Exercise price per 1 ordinary share (Baht) Exercise ratio (warrant to ordinary share)
393,865,360 3 years from the issue date Last business day of each quarter from the issue date 1.00 1:1
In July 2012, the Company issued 393,865,295 warrants to the Company’s existing shareholders (PF-W3). In September 2012, the Company received advance subscription of Baht 1 per share to 73,932,601 of the additional ordinary shares arising from the exercise of the warrants (PF-W3) of 73,932,601 units, a total of Baht 73,932,601. The Company registered the resulting increase of Baht 73,932,601 in its capital with the Ministry of Commerce on 12 October 2012.
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30. Statutory reserve Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory reserve at least 5% of its net profit after deducting accumulated deficit brought forward (if any), until the reserve reaches 10% of the registered capital. The statutory reserve is not available for dividend distribution. 31. Expenses by nature Significant expenses by nature are as follows: (Unit: Thousand Baht)
Consolidated financial statements 2012 2011
Salaries, wages and other employee benefits Depreciation and amortisation Rental expenses from operating lease agreements Specific business tax and transfer fees Marketing expenses Project management expenses Loss arising from minimum revenue guarantee Transaction costs of business combination (Note 13) Loss on exchange Real estate development during the year Changes in real estate projects Finance cost
Separate financial statements 2012 2011
684,228 485,640 430,644 89,512 64,677 52,416 132,942 61,554 42,414 341,541 312,932 240,003 678,895 569,224 422,662 266,052 195,567 200,512 32,759 33,595 32,759 23,893 94,688 8,891,142 7,241,449 5,187,083 (3,652,991) (2,404,760) (1,606,729) 918,191
729,439
755,899
365,667 49,995 39,796 215,633 369,682 151,711 33,595 3,991,022 (683,617) 608,101
32. Earnings per share Basic earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year, after adjusting the number of ordinary shares in issue during the year 2011 in proportion to the change in the number of shares as a result of the change in par value from Baht 6 each to Baht 1 each as discussed in Note 28 to the financial statements. The number of ordinary shares is adjusted as if the share spilt had occurred at the beginning of the earliest period reported. Diluted earnings per share is calculated by dividing profit for the year attributable to equity holders of the Company (excluding other comprehensive income) by the weighted average number of ordinary shares in issue during the year plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary shares were issued and adjusts the number of ordinary shares in issue during the year 2011 plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential ordinary shares into ordinary shares in proportion to the change in the number of shares as a result of the change in par value from Baht 6 each to Baht 1 each as discussed in Note 28 to the financial statements. The number of ordinary shares is adjusted as if the share spilt had occurred at the beginning of the earliest period reported. The following table sets forth the computation of basic and diluted earnings per share:
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Consolidated financial statements Profit for the year
Weighted average number of ordinary shares
2012
2012
2011
Earnings per share
2011
Thousand Thousand Thousand Thousand Baht Baht shares shares
Basic earnings per share Profit attributable to equity holders of the Company 233,814 Effect of dilutive potential ordinary shares Warrants PF-W2 Warrants PF-W3 Diluted earnings per share Profit of ordinary shareholders assuming the conversion of dilutive potential ordinary shares 233,814
488,129
5,157,473
4,726,421
-
42,285 16,258
53,042 -
488,129
5,216,016
4,779,463
2012
2011
Baht
Baht
0.0453
0.1033
0.0448
0.1021
Separate financial statements Profit for the year
Weighted average number of ordinary shares
2012
2012
2011
2011
Thousand Thousand Thousand Thousand Baht Baht shares shares
Basic earnings per share Profit attributable to equity holders of the Company 365,667 Effect of dilutive potential ordinary shares Warrants PF-W2 Warrants PF-W3 Diluted earnings per share Profit of ordinary shareholders assuming the conversion of dilutive potential ordinary shares 365,667
330,739
5,157,473
4,726,421
-
42,285 16,258
53,042 -
330,739
5,216,016
4,779,463
Earnings per share
2012
2011
Baht
Baht
0.0709
0.0700
0.0701
0.0692
33. Financial information by segment The Company’s and its subsidiaries’ business operations involve 4 principal segments: property development, construction, service and hotel. These operations are mainly carried on both in Thailand and overseas. Below is the consolidated financial information of the Company and its subsidiaries for the years ended 31 December 2012 and 2011 by segment.
180
(Unit: Million Baht)
Domestic
Overseas
Property Elimination of development Construction Service Hotel inter-segment segment segments segments segment revenues Consolidation 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
Revenue from external customers 8,835 8,142 Intersegment revenues - 715 65 Total revenues 8,835 8,142 715 65 Segment operating profit 3,198 2,942 40 5 Unallocated income and expenses: Interest income Revenue from reversal of creditors per rehabilitation plan Gain on a bargain purchase Other income Selling expenses Administrative expenses Loss arising from minimum revenue guarantee Loss on exchange Share of income of associate Financial cost Income tax expenses Non-controlling interests of the subsidiaries Profit for the year
17 17 -
15 15 -
276 276 84
(8) (52) 9,103 8,090 - (732) (80) - (740) (132) 9,103 8,090 - (40) (5) 3,282 2,942 11 39 119 (1,088) (1,418) (33) (95) 28 (527) (139) 55 234
10 37 84 (919) (1,077) (34) 25 (417) (163) 488
(Unit: Million Baht)
Domestic Property development segment
Overseas Elimination of
Hotel inter-segment revenues Consolidation segment 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011 Construction segment
Service segment
Property, plant and equipment 288 306 98 20 2 3 707 Project development cost 13,423 12,969 4 5 (37) Land held for development 8,284 5,052 Unallocated assets Total assets Transfer prices between business segments are as set out in Note 6 to the financial statements.
- 1,095
329
(5) 13,390 12,969 -
8,284 3,094
5,052 3,014
25,863 21,364
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34. Provident fund The Company, its subsidiaries and their employees have jointly established provident funds in accordance with the Provident Fund Act B.E. 2530. The Company, its subsidiaries and their employees contributed to the fund monthly at the rate of 3 - 10% of basic salary. The fund, which is managed by Kasikorn Asset Management will be paid to employees upon termination in accordance with the fund rules. During the current year, the Company and its subsidiaries contributed Baht 25.2 million (2011: Baht 22.6 million) (Separate financial statements: Baht 20.0 million (2011: Baht 18.2 million)) to the fund. 35. Dividends Total dividends Dividend per share
Approved by
Final dividend for 2011 Annual General Meeting of the shareholders on 27 April 2012 Baht 189.1 million Final dividend for 2010 Annual General Meeting of the shareholders on 29 April 2011 Baht 259.9 million (1)
Baht 0.0401) Baht 0.055(1)
For comparative purpose, the dividend per share for 2010 was recalculated on the change of the par value of the Company’s ordinary shares from Baht 6 to Baht 1 per share.
36. Capital commitments As at 31 December 2012, the Company and its subsidiaries had commitments as follows: 36.1 Capital commitments a) The Company and its subsidiaries had outstanding commitments of approximately Baht 1,869.0 million (2011: Baht 1,418.7 million) in respect of construction contracts of land and house projects and residential condominium units of which the Company and its subsidiaries had already entered into contracts with subcontractors. b) The Company and its subsidiaries had outstanding capital commitments of approximately Baht 817.7 million in (2011: Baht 2,323.0 million) respect of purchases of land. c) The subsidiary had outstanding capital commitments of approximately Baht 13.8 million (2011: Baht 15.6 million) in respect of land lease for real estate development. d) The subsidiary had outstanding commitments of approximately Baht 62.7 million (2011: Baht 29.4 million) in respect of a design contract for a shopping center and office project and consulting contract. 36.2 Operating lease commitments The Company and its subsidiary have entered into several lease agreements in respect of the lease of land, vehicles, advertising board, office space, condominium and various services. The terms of the agreements are generally between 1 and 5 years. Operating lease agreements are non-cancellable. As at 31 December 2012, future minimum lease payments required under these non-cancellable operating lease contracts were as follows. (Unit: Million Baht)
As at 31 December 2012 2011
Payable: Less than 1 year 2 to 5 years
182
69.1 48.7
59.7 20.9
During the year ended 31 December 2012, the Company and its subsidiaries recognised rental expenses of Baht 339.3 million (2011: Baht 258.1 million) (Separate financial statements: Baht 189.6 million (2011: Baht 189.0 million)). The rental expenses included the rental from operating leases of condominiums which the Company sold to the unrelated persons amounting to Baht 93.8 million and leased back under the agreements for 2 years, Baht 9,571 per month. Currently, the Company had not subleasing revenues. 36.3 Long-term service commitments a) The Company has entered into clubhouse management agreements with its subsidiary. Under the conditions of these agreements, the Company is to pay monthly service fees as stipulated in the agreements. The fees for the year 2012 amounting to approximately Baht 14.8 million (2011: Baht 13.8 million) were recognised as expenses. b) The subsidiary has entered into consultation agreements in respect of the real estate project, effective from July 2011 to December 2013. Under the conditions of the agreements, the subsidiary is to pay Baht 0.6 million per month. 36.4 Other commitment The subsidiary had outstanding capital commitments in respect of two land sublease agreements. In accordance with the first agreement, the subsidiary is to pay monthly fee up to December 2036 at the rate as stipulated in the agreement. In accordance with the second agreement, the subsidiary is to pay the remaining upfront fee amounting to approximately Baht 510.8 million within 31 July 2013 and 2014 at Baht 255.4 million each, and the annual fee from 1 January 2015 until 31 December 2044 at the rate as stipulated in the agreement. 36.5 Guarantees a) The Company has guaranteed bank credit facilities of its subsidiaries amounting to Baht 8,174.7 million (2011: Baht 6,872.4 million). b) As at 31 December 2012, there were outstanding bank guarantees of approximately Baht 4,906.6 million (2011: Baht 1,788.0 million) issued by the banks on behalf of the Company and its subsidiaries in respect of certain performance bonds as required in the normal course of business. These included letters of guarantee amounting to Baht 631.6 million (2011: Baht 813.0 million) to guarantee the public utilities and Baht 4,275 million (2011: Baht 975.0 million) to guarantee the debentures. 37. Litigations Outstanding litigations as at 31 December 2012 are detailed below. a) The Company was sued by 88 residents of one project with claims totaling Baht 111 million for damages as a result of breach of contract, accusing the Company of fraud, and claiming depreciation of land and houses at a rate of 16% of the current price. The cases are currently being considered by the Court of First Instance. The management of the Company believe that the Company will not incur significant losses as a result of these cases, because the grounds on which the residents are suing, with the accusation of fraud, are not credible facts. Moreover, the period for buying the houses expired more than 10 years ago and the statute of limitations for legal action over cases of fraud has expired. Finally, some of the residents did not buy the land and houses directly from the Company, but from a previous owner who was a customer of the Company. They therefore cannot cite fraud. b) A subsidiary (Estate Perfect Company Limited) has been sued by a contractor with a claim for payment of construction costs amounting to Baht 7.5 million. However, the subsidiary countersued the contractor for the return of moneys amounting to Baht 8.4 million, since the subsidiary paid for more construction than was delivered to the subsidiary by the contractor. The court dismissed the case and ordered the plaintiff to pay Baht 0.1 million to the subsidiary, but the
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plaintiff appealed and the Appeals Court reversed the decision of the Court of First Instance and ordered the subsidiary to pay the plaintiff Baht 6.7 million plus interest at a rate of 7.5% per annum from 30 August 2007 until settlement is made, but with interst calculated up to the date of the lawsuit not to exceed Baht 0.8 million. The subsidiary has appealed to the Supreme Court, which is currently considering the case. Nevertheless, the subsidiary has not set aside provision for losses resulting from this event, since the decision of the Appeals Court differed substantially from that of the Court of First Instance, and it can be seen as a decision made on a different factual basis from that of the Court of First Instance, which is the court that examines the evidence. The subsidiary therefore takes the view that it would be appropriate to hear the opinion of the Supreme Court, which will finalise the case. However, the subsidiary believes that it will suffer no significant loss as a result of this litigation. c) A subsidiary (Estate Perfect Company Limited) has been sued by a customer seeking compensation of approximately Baht 7.7 million for infringement of the plaintiff’s rights. The court of first instance dismissed the lawsuit brought against the subsidiary but the plaintiff appealed this order. Currently, the lawsuit is being considered by the appeals court. However, the subsidiary believes that it will suffer no significant loss as a result of this litigation. d) On 18 November 2011, the Central Bankruptcy Court ordered the termination of the rehabilitation plan of a subsidiary, We Retail Public Company Limited, since the subsidiary had completely complied with the rehabilitation plan. However, the subsidiary still has debts per rehabilitation plan amounting to Baht 9 million, which is a liability resulting from a fire. The subsidiary will pay not more than Baht 5.0 million of this liability when the comptroller issues an order holding the subsidiary responsible for the fire, and will claim this amount from its insurance company. Currently, the subsidiary has not received this amount from its insurance company since the comptroller is still considering the case. 38. Financial instruments 38.1 Financial risk management The Company’s and its subsidiaries’ financial instruments, as defined under Thai Accounting Standard No.107 “Financial Instruments: Disclosure and Presentations”, principally consist of the following. -
Financial assets Cash and cash equivalents Trade accounts receivable Advances Account receivable - land Retention per agreement Advances to contractors Restricted deposits Loans to related companies Other long-term investments Advances for purchases of land
-
Financial liabilities Trade accounts payable Account payable - forward contracts Notes payable Bills of exchange payable Creditors per rehabilitation plan Amounts due to related companies Deposits and cash received in advance Debentures Long-term loans Deposits and cash received in advance for sublease agreement
The financial risks associated with these financial instruments and how they are managed is described below. Credit risk The Company and its subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, advances, account receivable - land and loans. The Company and its subsidiaries manage the risk by adopting
184
appropriate credit control policies and procedures and therefore do not expect to incur material financial losses. In addition, the Company and its subsidiaries do not have high concentration of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts receivable, advance, account receivable - land and loans as stated in the statement of financial position. Interest rate risk The Company and its subsidiaries are exposed to interest rate risk relating primarily to their cash at banks, loans, notes payable, bills of exchange payable, creditors per rehabilitation plan, debentures and long-term loans. However, since most of the Company’s and its subsidiaries’ financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal. Significant financial assets and liabilities classified by type of interest rates are summarised in the table below on the maturity date or, the repricing date if this occurs before the maturity date. (Unit: Million Baht)
As at 31 December 2012 Consolidated financial statements Fixed interest rates Floating NonWithin 1-5 Over interest interest rate bearing 1 year years 5 years Total
Financial assets Cash and cash equivalents Trade accounts receivable Account receivable - land Retention per agreement Advances to contractors Restricted deposits Other long-term investments Advances for purchases of land
40.0 40.0
Financial liabilities Trade accounts payable Account payable - forward contracts Notes payable Creditors per rehabilitation plan 9.5 Deposit and cash received in advance Debentures 4,298.3 Long-term loans Deposits and cash received in advance for sublease agreement 4,307.8
Interest rate (% p.a.)
23.8 23.8
-
866.8 2.6 869.4
93.5 140.9 15.5 100.0 73.5 55.6 379.8 858.8
960.3 0.00 - 0.88 140.9 15.5 100.0 73.5 66.4 1.95 - 2.50 55.6 379.8 1,792.0
5,402.6 -
-
549.1 5,157.0
942.1 6.5 40 305.1 -
942.1 6.5 589.1 MOR 9.5 7.5 305.1 9,700.9 4.75 - 5.80 5,157.0 MLR
-
-
-
45.6
45.6
5,402.6
-
5,706.1
1,339.3
16,755.8
-
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(Unit: Million Baht)
As at 31 December 2011 Consolidated financial statements Fixed interest rates Floating NonWithin 1-5 Over interest interest 1 year years 5 years rate bearing Total
Financial assets Cash and cash equivalents Trade accounts receivable Account receivable - land Retention per agreement Advances to contractors Restricted deposits Other long-term investments Advances for purchases of land
450.0 450.0
Financial liabilities Trade accounts payable Notes payable 800.0 Bills of exchange payable 2,003.0 Creditors per rehabilitation plan 9.0 Accounts payable - land Deposit and cash received in advance Debentures 3,300.0 Long-term loans Deposits and cash received in advance for sublease agreement 6,112.0
186
Interest rate (% p.a.)
-
-
682.2 35.0 717.2
2.6 22.3 46.4 100.0 63.9 51.0 736.6 1,022.8
1,134.8 22.3 46.4 100.0 63.9 35.0 51.0 736.6 2,190.0
0.25 - 3.00 0.25 - 0.75 -
-
-
-
551.9 23.8
551.9 800.0 2,003.0 9.0 23.8
7.50 4.55 - 4.95 7.50 -
2,487.9 -
-
4,127.9
168.9 -
168.9 5,787.9 4,127.9
4.65 - 6.50 MLR
-
-
-
48.5
48.5
2,487.9
-
4,127.9
793.1
13,520.9
-
(Unit: Million Baht)
As at 31 December 2012 Separate financial statements Fixed interest rates Floating NonWithin 1-5 Over interest interest rate bearing Total 1 year years 5 years
Financial assets Cash and cash equivalents Trade accounts receivable Advances Retention per agreement Advances to contractors Restricted deposits Loans to related companies Other long-term investments Advances for purchases of land
-
23.8 -
-
544.9 2.2 3,260.3 -
2.7 22.3 9.4 100.0 59.1 55.6 260.5
547.6 22.3 9.4 100.0 59.1 26.0 3,260.3 55.6 260.5
-
23.8
-
3,807.4
509.6
4,340.8
-
-
333.4
480.2 -
480.2 333.4
-
2.5
2.5
5,402.6 -
-
2,714.0
48.9 -
48.9 9,700.9 2,714.0
-
-
-
45.6
45.6
5,402.6
-
3,047.4
577.2
13,325.5
Financial liabilities Trade accounts payable Notes payable Amounts due to related companies Deposits and cash received in advance Debentures 4,298.3 Long-term loans Deposits and cash received in advance for sublease agreement 4,298.3
-
Interest rate (% p.a.)
0.13 - 0.88 1.95 1.00 - 7.38 -
MOR 4.75 - 5.80 MLR -
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(Unit: Million Baht))
As at 31 December 2011 Separate financial statements Fixed interest rates Floating NonWithin 1-5 Over interest interest rate 1 year years 5 years bearing Total
Financial assets Cash and cash equivalents Trade accounts receivable Advance Account receivable - land Retention per agreement Advances to contractors Restricted deposits Loans to related companies Other long-term investments Advances for purchases of land
450.0 -
-
-
400.1 35.0 1,801.1 -
1.6 8.4 1.5 46.4 100.0 54.9 51.0 439.9
851.7 0.25 - 3.00 8.4 1.5 46.4 100.0 54.9 35.0 0.25 - 0.75 1,801.1 5.19 - 5.82 51.0 439.9 -
450.0
-
-
2,236.2
703.7
3,389.9
-
-
-
324.3 23.8 1.3
324.3 800.0 7.5 2,003.0 4.55 - 4.95 23.8 1.3 -
2,487.9 -
-
2,399.9
70.6 -
70.6 5,787.9 4.65 - 6.50 2,399.9 MLR
-
-
-
48.5
48.5
2,487.9
-
2,399.9
468.5
11,459.3
Financial liabilities Trade accounts payable Note payable 800.0 Bills of exchange payable 2,003.0 Accounts payable - land Amounts due to related companies Deposits and cash received in advance Debentures 3,300.0 Long-term loans Deposits and cash received in advance for sublease agreement 6,103.0
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Interest rate (% p.a.)
-
Foreign currency risk The subsidiary’s exposure to foreign currency risk arises from borrowing from the Company that are denominated in foreign currency. The transaction is planned to settle in the foreseeable future. The subsidiary seeks to reduce this risk by entering into forward exchange contracts when it considers appropriate. The forward contracts mature within one year. Foreign exchange contracts outstanding are summarised below. As at 31 December 2012 Foreign currency Bought amount Contractual exchange rate Contractual Bought maturity date (Million) (Yen per 1 Baht) 2.8010 - 2.8425 29 March and 27 December 2013 Baht 636
38.2 Fair value of financial instruments Since the majority of the Company’s and its subsidiaries’ financial assets and liabilities are short-term or have interest rates close to the market rates, the fair values of these financial assets and liabilities are not expected to differ materially from the amounts presented in the statement of financial position. A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using and appropriate valuation technique, depending on the nature of the instrument. 39. Capital management The primary objective of the Company’s capital management is to ensure that it has appropriate capital structure in order to support its business and maximise shareholder value. As at 31 December 2012, the Group’s debt-to-equity ratio was 2.12:1 (2011: 1.89:1) and the Company’s was 1.74:1 (2011: 1.72:1). 40. Events after the reporting period On 14 January and 28 February 2013, meetings of the Company’s Board of Directors passed the following significant resolutions a) Approved purchasing properties of Property Perfect Fund from One Asset Management Limited for a total of Baht 505 million. b) Approved the guarantee of loan from banks of subsidiaries. c) Approved proposing of the payment of a dividend of Baht 0.033 per share, totaling Baht 186.2 million (based on the number of ordinary shares in issue at present) in respect of the year 2012 income. d) Approved the issue and offer of long-term debentures, in an amount not exceeding Baht 6,000 million, having maturity of not more than 5 years and short-term debentures, in an amount not exceeding Baht 2,000 million. e) Ratify the establishment of Chiangmai Development Company Limited to engage in the property development. Such company has a registered share capital of Baht 200 million (2 million ordinary shares with a par value of Baht 100 each), 100% paid up and the Company held a 100% interest. This Company was established on 18 February 2013.
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On 22 February 2013, a meeting of Board of Directors of We Retail Public Company Limited (“We Retail”) passed the following significant resolutions: a) Approved entering into a land lease agreement with Estate Perfect Company Limited, with a lease term of 30 years, running from 1 January 2014 to 31 December 2043. We Retail is to pay an upfront fee of Baht 60 million and annual fees totaling Baht 152.3 million, for a total of Baht 212.3 million. b) Approved a borrowing from a parent company of Baht 500 million, repayable within 3 years. c) Approved a decrease in the registered share capital from Baht 4,131,549,100 to Baht 3,996,627,870 by canceling 26,984,246 unissued ordinary shares with a par value of Baht 5 each. d) Approved an increase in the registered share capital by Baht 2,500 million from Baht 3,996,627,870 to Baht 6,496,627,870 by issuing 500 million ordinary shares with a par value of Baht 5 each. e) Approved allocating up to 500 million ordinary shares with a par value of Baht 5 on a pro rata basis to We Retail’s existing shareholders (right offering) in a ratio of 5 new shares for every 8 existing shares at a price of Baht 1.10 each. Fractional shares will be ignored. 41. Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 28 February 2013.
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The Board of Directors’
responsibilities for financial reports Property Perfect Public Company Limited’s and subsidiaries’ financial statements are prepared in compliance with accounting standard stipulated in the Accounting Professions Act B.E.2547, presented in accordance with the requirements in the Development of Business Department’s announcement on 14 September 2001 regarding in the Accounting ACT.B.E.2543, and adjusts accounting practices to be in line with the Federation of Accounting Professions Notification 9/2007, 38/2007 and 62/2007 concerning the accounting standard. The Board of Directors has appointed the Audit Committee comprising non-executive directors to take responsible for financial reports to follow the account standard and related regulators, disclose adequate and on-time information, and have internal control system to supervise internal control activities and the Audit Committee’s Opinions in the Audit Committee’s reports shown in the annual report The Board of Directors takes responsible for Property Perfect’s and its subsidiaries’ financial reports prepared to ensure that financial position, revenue, expense and cash flow are presented accurately and reasonably. The Board of Directors prepares accurate and complete accounting records to maintain assets, and internal control system to prevent fraudulent irregularities activities. The Board of Directors has selected the appropriated and constantly practical accounting policy in preparing the financial reports to reflect the company’s actual performance in compliance with the Generally Accepted Accounting principles and adequate information disclosure in notes to financial statements. Auditor expresses opinions on Property Perfect’s and subsidiaries’ financial statements in auditors’ report.
Dr.Tawatchai Nakata Chairman
Chainid Ngow-sirimanee Chief Executive Officer
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Audit Committee Report 2012 Dear valued shareholders Property Perfect Public Company Limited’s Audit Committee comprises three independent directors – having Mr.Krish Follett as Chairman, and Mr. Somsak Toruksa and Dr. Thamnoon Ananthothai as directors. Miss Duangporn Roemyindi, director of the internal audit office, was appointed the committee’s secretary. In 2012, the Audit Committee followed through the Audit Committee Charter, which was endorsed by the Board. It organized 9 meetings to review financial information, connected transactions between the company and subsidiaries affiliates and related companies and the performance of the internal audit office. It had one meeting to discussions with the auditor for the exchange of views on the company’s internal control and accounting. The Audit Committee’s major activities can be summarized as below: 1) To review quarterly and yearly financial statements, and yearly consolidated financial statements for the year 2012 The Audit Committee reviewed the financial statements, every time with the presence of executives for explanatory purposes. It also had a meeting with the auditor, for an updated opinion on the company’s internal control and accounting, to ensure that the financial statements were prepared appropriately, and in compliance with the Generally Accepted Accounting Principles and other related regulations. The committee also has duty to assure accounting system’s accuracy and reliability and sufficient and on-time information disclosure in financial statements to benefit investors and financial statements users in making investment decision. All paper document involved in the reviews of financial statements and the internal control was completely stored, for examination of all involved. 2) To review connected transactions The Audit Committee reviewed the connected transactions of the Company, subsidiaries, joint ventures and related companies, to ensure that the Company took into account the necessity and appropriateness of such connected transactions and put the Company’s interests as the top priority. It ensures that the transactions comply with the specified criteria and are properly and sufficiently disclosed. It also reviewed the necessary financial assistance to finance subsidiaries’ project development and business expansion as well as subsidiaries’ planned overseas investment. 3) To review risk management The Audit Committee comprehensively reviewed the enterprise risk management efficiency, taking into account reports and explanation from the Risk Management Committee through regular opinion exchange with the Risk Management Committee. This was to ensure that the Company maintains risks at acceptable levels and achieves business goals. The Audit Committee also advised the internal control unit on the upgrade of its plan in line with the Company’s risk management, to ensure that the internal control covers enterprise risks - a key element to pave way for the Company’s achievements. The Audit Committee also made proposals on the risk management of the Company’s overseas subsidiaries, suggesting the setting of clear strategic objectives and monitoring framework to encompass risk management, KPI, internal control and human resources. It also suggested the forward contract, to limit exposure to foreign exchange volatility. 4) To review good governance issues Audit Committee ensured that the company’s information disclosure is in line with the Securities and Exchange Act and other laws related to the company’s business operations, for the confidence among shareholders and investors.
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5) To review evaluation of internal control system Audit Committee reviews in the way of COSO as to whether the company’s internal control system is appropriate, to achieves its objectives in using resources efficiently and effectively, and has a preventive system to reduce mistakes, damages and deplete the company’s resources as well as whether the financial statements is reliable. The committee also reviews the auditor’s comments on the internal control and reports the review to the Board of Directors. 6) To review internal audit The Audit Committee endorsed the internal control unit’s annual risk-based audit plan; acknowledged the annual 2012 internal audit assessment report; and ensured the efficient and effective internal audit for acceptable risks and changing environment. Audit Committee ensured that the company improved its operations in line with suggestions on significant issues stated in the internal audit assessment report. Audit Committee also devised plans for the transformation from operational audit approach to risk-based audit approach, to come up with efficient and effective advice for the management. It also evaluates the performance of the Internal Control Office director, to ensure his independence and compliance to the plan and professional requirements. 7) To review the company’s monitoring and operating performance evaluation system Audit Committee reviews the company’s performance to ensure that the company follows the targets and adjusts operation to be accordance with the changed situation. The committee supports the company to determine clearer performance evaluation and indicators and enhance the internal control become a part of normal practice of management. 8) To conduct self-assessment Audit Committee carried out self-assessment in many aspects including the number of meetings, scope of power, internal control, financial reporting, compliance to rules and regulations, coordination with the auditor, the supervision and improvement of internal control, in order to improve its operations and reporting to the Board. 9) To screen auditor Audit Committee selected the auditor upon on the auditor’s independence and defined the appropriate fee. The decision was forwarded to the Board and later submitted to the shareholder meeting for approval. Ernst & Young Office Company Limited was appointed as the auditor for year 2013. 10) To advise and give recommendations to the executive committee Audit Committee examined and gave advice to the executive committee on finance, accounting and legal, to assure that the company achieves the designated business goals. It also advised on the renovation of the Group’s hotel in Japan and marketing strategies. Audit Committee constantly reports resolutions of all meetings to the Board of Directors, independently practices assigned tasks on behalf of the Audit Committee with knowledge and competence, and gives suggestions straightly and appropriately for interests of the company, shareholders and other stakeholders.
Mr. Krish Follett Chairman of the Audit Committee 28 February 2013
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Auditor Fee
Accuracy Sanctification Form The fiscal year end on 31 December 2012
Item
Payer
Auditor
Fee
Audit Fee 1 2 3
Property Perfect Public Company Limited Estate Perfect Co.,Ltd. Perfect Sport Club Co.,Ltd. (Formerly : Perfect Satellite Services Co.,Ltd.)
Ernst & Young Co. ,Ltd Ernst & Young Co. ,Ltd Ernst & Young Co. ,Ltd
1,850,000 600,000 100,000
4 5 6 7 8 9 10
Bright Development Bangkok Co.,Ltd. Centre Point Shopping Mall Co.,Ltd. Residence Number Nine Co.,Ltd. U & I Construction Bangkok Co.,Ltd. Perfect Prefab Co.,Ltd. Uniloft Service (Thailand) Co.,Ltd. We Retail Public Company Limited Total fee
Ernst & Young Co. ,Ltd Ernst & Young Co. ,Ltd Ernst & Young Co. ,Ltd Ernst & Young Co., Ltd Ernst & Young Co .,Ltd Ernst & Young Co. ,Ltd Ernst & Young Co. ,Ltd
370,000 120,000 200,000 250,000 120,000 80,000 880,000 4,570,000
Other fees
1
Property Perfect Public Company Limited Total Other fees Total fee
Ernst & Young Co. ,Ltd
1,724,500 1,724,500 6,294,500
The above information is Accurate. I certify there is no other service I know of that the company and subsidiaries awarded to me, my auditing firm, and individuals or companies connected to me. Inaccurate Note: …………………………………………………………………………………………………… ……………………………………………………………………………………………………………………………………………… To improve the above information (if any), I affirm the accuracy of all information in this form that shows the audit fee and other service fee that the company and subsidiaries pay to me, my auditing firm, and individuals or companies connected to me.
Miss. Siraporn Ouaanunkun Ernst & Young Co.,Ltd. Auditor of Property Perfect Public Company Limited
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