hemraj : annual report 2010 en

รายงานประจำปี 2553 บริษัท เหมราชพัฒ

นาที่ดิน จำกัด (มหาชน) Annual R

eport 2010 Hem

araj Lan

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t Public C

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บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน) Hemaraj Land And Development Public Company Limited

รายงานประจำปี 2553 Annual Report 2010

U

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บริษัท เหมราชพัฒนาที่ดิน จำกัด (มหาชน) ชั้น 18 อาคารยูเอ็มทาวเวอร์ เลขที่ 9 ถนนรามคำแหง สวนหลวง กรุงเทพมหานคร 10250 ประเทศไทย โทรศัพท์ : 66-2719-9555 โทรสาร : 66-2719-9546-7 ทะเบียนเลขที่ : บมจ.0107536000676

Hemaraj Land And Development Public Company Limited 18th FL., UM Tower, 9 Ramkhamhaeng Rd., Suangluang, Bangkok 10250 THAILAND Tel : 66-2719-9555 Fax : 66-2719-9546-7 Registration No. : BORMORJOR.0107536000676

e-mail : [email protected], [email protected] www.hemaraj.com, www.theparkresidence.co.th

roperty

I ndustrial estates

tilities

สารบัญ Contents

02 จุดเด่นทางการเงิน

03 สาส์นจากคณะกรรมการบริษัทฯ

04 ข้อมูลของคณะกรรมการและคณะผู้บริหาร

09 ลักษณะการดำเนินธุรกิจและโครงสร้างธุรกิจ

13 เหตุการณ์ที่สำคัญในปี 2553

23 ภาวะเศรษฐกิจและการแข่งขัน

24 บทรายงานและการวิเคราะห์ของฝ่ายบริหาร

27 โครงสร้างการจัดการ

32 การปฏิบัติตามหลักการกำกับดูแลกิจการที่ดี

39 รายงานความรับผิดชอบของคณะกรรมการ

ในการจัดทำรายงานทางการเงินประจำปี 2553 40 รายงานของคณะกรรมการตรวจสอบประจำปี 2553

42 รายงานของผู้สอบบัญชีรับอนุญาต

43 งบการเงิน

53 หมายเหตุประกอบงบการเงิน

96 โครงสร้างผู้ถือหุ้นและโครงสร้างองค์กร

97 รายการระหว่างกัน

100โครงสร้างการลงทุนและรายได้ของบริษัท บริษัทย่อย และบริษัทร่วม

96 ข้อมูลการดำรงตำแหน่งของกรรมการและผู้บริหาร ในบริษัท บริษัทย่อยและบริษัทร่วม

103ค่าตอบแทนของผู้สอบบัญชี

104บุคคลอ้างอิงอื่นๆ

105Financial Highlights

106 Message from the Board of Directors

107 Information of Board of Directors and Management

112 The Company’s Business Profile and Business Structure

116 Major/Significant Events in 2010

126 Economic & Competitive Condition

127Management Analysis

130 Management Structure

135 Good Corporate Governance

142 Report on Responsibilities of the Board of Directors Towards the Financial Report of the Year 2010

143 Audit Committee Report for 2010

145Independent Certified Public Accountants’ Report

146 Financial Statements

156 Notes to Financial Statements

199 Shareholding & Organization Structure

200 Transactions with Related Parties

204 Holding Structure and Revenue of the Company, Subsidiaries and Associated Companies

206 Information of Directors and Management in Company, Subsidiaries and Associated Companies

207The Remuneration of the Auditor of Company

208 Other References

Corporate Vision, Mission & Strategy

Corporate Vision, Mission & Strategy

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

Mission “To Develop World Class Industrial Estates Utilities and Property Customer Solutions”

Hemaraj Strategy 1. Developing industrial estate, utility, and property solutions

that have predictable growing revenue and superior profit opportunities in order to optimize shareholder value.

2. Leveraging complementary management expertise in property, utilities infrastructure and environmental competence.

3. Utilizing company financial resources selectively for competing investment opportunities.

Financial Highlights

KEY FINANCIAL FIGURES

(MillionBaht) 2008 2009 2010Current Ratio (Times) 2.35 2.42 5.27

Net Debt to Equity (Times) 0.57 0.51 0.66

Return on Assets 8% 4% 5%

Return on Equity 13% 6% 11%

Net Profit Margin 27% 26% 30%

Earnings per Share (Baht) 0.14 0.06 0.13

Earnings per Share (Baht) -

fully diluted 0.14 0.06 0.13

Book Value per Share (Baht) 0.87 0.87 0.94

No. of Shares Issued and Paid

(Million Shares) 9,381.84 9,705.19 9,705.19

No. of Warrants Outstanding

(Million Shares) 327.55 - -

Note : *Internal Reclassification

Operating Revenue* 4,714 2,229 4,220

Total Industrial Estate Revenue* 2,854 704 1,501

Total Utilities Revenue* 922 1,026 1,472

Total Rental Property

and Services* 480 515 480

Total Sale of Property* 459 (15) 766

Total Revenue 4,983 2,223 4,020

Net Income 1,342 575 1,216

Cash 932 910 3,517

Total Assets 13,712 13,680 18,715

Total Debts/Loans 3,454 4,023 8,011

Total Liabilities 5,574 5,222 9,577

Total Shareholder’s Equity 8,138 8,458 9,138

Earning Per Share (Baht) 0.14 0.06 0.13

Par (Baht) 0.40 0.40 0.40

KEY FINANCIAL RATIOS 2008 2009 2010

OPERATING REVENUE

Million Baht 2008 2009 2010

459 480

922

2,854 515

1,026

704

(-15)

Year

Total Sale of Property Total Rental Property and Services

Total Utilities Revenue Total Industrail Estate Revenue

6,000

5,000

4,000

3,000

2,000

1,000

0

-1000

4,714

2,229

NET INCOME

Million Baht 2008 2009 2010 Year

1,342

575

1,216 1,400

1,200

1,000

800

600

400

200

0

NET DEBT TO EQUITY

Time 2008 2009 2010 Year

0.57 0.51

0.66

TOTAL ASSETS AND TOTAL LIABILITIES

Million Baht 2008 2009 2010 Year

Total Assets Total Liabilities

20,000

15,000

10,000

5,000

0

5,574 5,222

9,577

13,680 13,712

18,715 1.00

0.75

0.50

0.25

0.00

4,220

480

1,472

1,501

766

รายงานประจํ าปี 2553 • Annual Report 2010

105

Message From The Board Of Directors

Mr.DavidR.NardonePresident & Chief Executive Officer

10 March 2011

Mr.ChavalitSethameteekulChairman of the Board of Directors

10 March 2011

We are pleased to report that Hemaraj Land And Development Public Company Limited finished 2010 with Total Net income of Baht 1,215.9 million, an increase of 111% from the same period of 2009. This also reflected unrealized currency gains of Baht 394 million. Total Revenue was Baht 4,020.2 million compared with Baht 2,223 million for the same period of 2009, representing an 81% increase. The Year 2010 reflected the overall return of industrial investment to markets with stronger competitive conditions and significantly to Thailand. This was due to access to growing markets, the need for cost and currency competitiveness, as well as for consolidation opportunities. Industrial estates sales, with weakness in the chemical sector and continued strong demand in the automotive sector reflected 930 rai (372 acres) sold or rented in 2010. This includes the new Ford Motor Company regional manufacturing plant of 468 rai (187 acres) at Hemaraj Eastern Seaboard Industrial Estate “Detroit of the East” automotive cluster earlier in 2010. We believe the industrial opportunities partially reflect the 65 % automotive production growth, to a record 1,645,000 vehicles for 2010 (#13 global for 2010), from depressed levels in 2009. There are new automotive plants under construction and new product initiatives underway among the various automotive original equipment manufacturers and automotive suppliers. Thailand has provided an improving investment climate and predictable rules of law enforcement mitigating lingering political risk factors. However, the government has been less deliberate in the protection of investor fairness particularly in regard to the new Environmental Health Impact Assessment requirements where EHIA approvals are still in process. The opportunity is for Thailand to benefit from the investment growth and consolidation of production to strategic locations. Industrial cluster opportunities will continue for automotive, petrochemical, and other industrial sectors long term, particularly at Hemaraj’s “Detroit of the East” automotive cluster in the Eastern Seaboard. Therefore, we feel that the positioning in our industrial business model will remain attractive. Our strategic business plan entails significant capital commitments and opportunities while broadening our strong liquid financial position. This includes the investment in our 35% shareholding in the Gheco-One IPP independent power project under construction as well as recurring power, factory, and other utility investments. In 2010, we completed the share acquisition of the remaining 75% shares in SIL Industrial Land and Rayong Industrial Land from a subsidiary of the Siam Cement Group. Financially, Hemaraj has maintained a strong balance sheet and cash flexibility to fund these plans. Hemaraj reported 2010 Year-end Total Assets of Baht 18,715 million including Baht 4,283 million in cash and cash deposits. Total Liabilities were Baht 9,577 million with Total Shareholder Equity of Baht 9,138 million. The Net Debt to Equity ratio remains below our target of 1 to 1 times being at 0.66 to 1 times. On financial sources, in 2010 we raised Baht 6 billion in corporate unsecured fixed interest rate bonds (some with stepped interest rates) with tenors of from 3 to 9 years. This enhances the sources breadth and predictability of funding for our business at a time when interest rates are at historical low rates. Hemaraj has strived to continuously improve our comprehensive good corporate governance principles by welcoming the significant commitments obligations and responsibilities that companies have toward all stakeholders. We are proud that our commitment, dedication and action have been recognized with the ‘Excellent’ 5 logo corporate governance rating by the Thai Institute of Directors again in 2010 while acknowledging that we still have more to accomplish. The Hemaraj strategic, business, financial, and governance plans that we outline reflect improving market and investment opportunities. We continue to develop industrial estate utility and property solutions that have predictable growing revenue and superior profit opportunities in order to optimize long-term shareholder value. The Management and the Board of Directors of Hemaraj Land And Development Public Company Limited are grateful to our stakeholders for entrusting us with this responsibility.


106

Mr.ChavalitSethameteekulChairman of the Board of Director, Member of Nomination and Remuneration Committee

Mr.SudhipanCharumaniIndependent DirectorChairman of the Audit CommitteeChairman of the Nomination and Remuneration Committee

Information of Board of Directors and Management

Board Of Directors Age: 64 Years Education /IODTrainning: M.B.S. (Political Science), Thammasart University, Bangkok Certificate class 40, National Defence College of Thailand Barrister at Law, Institute of Legal Education of Thai BAR LL.B..(Hons), Thammasart University, Bangkok DAP 6/2003 and DCP 74/2006, Thai Institute of Directors Association (IOD) Kellog School of Management, “Strategic Thinking and Executive Action” (Kellogg School of Management, Evanston, Illinois, Campus of Northwestern University, USA)

PresentPositions:

• Chief Executive Officer Sriracha Harbour PCL.

PreviousPositions: • Director General The Customs Department, Ministry of Finance • Deputy Permanent Secretary Ministry of Finance • Inspectors General Ministry of Finance • Deputy Director General The Excise Department, Ministry of Finance • Chairman The Board of Small Business Credit Guarantee Corporation • Vice Chairmen The Board of Metropolitan Electricity Authority • Vice President The Board of Airports of Thailand Public Compay Limited • Vice President The Board of TOT Public Company Limited • Director Office of The Council of State • Director The Thai BAR

%HemarajStockHeldasof31/12/2010: 0.00%

Age: 67 Years

Education/IODTrainning: Institute of Chartered Accountants in England and Wales ACP 6/2005, DAP 2/2003, DCP 57/2005, MIA 3/2008, MIR 4/2008, QFR 3/2006, RCC 8/2009,

DCP Re 2/2009, Thai Institute of Directors Association (IOD) PresentPositions:

• Director Vasupak Associates Co., Ltd.

PreviousPositions:

• Director Union Textile Industries Co.,Ltd .

• Director Union Thread Industries Co.,Ltd



107

Mr.ThongchaiSrisomburananont

DirectorChairman of the Executive Committee

Member of Nomination and Remuneration Committee

Mr.DavidRichardNardone

Director and Executive DirectorPresident

Mr.VivatJiratikarnsakul

Director and Executive DirectorExecutive Vice President

Age: 58 Years

Education/IODTrainning: Junior High School, Rojseri-Anusorn School DAP 77/2009, Thai Institute of Directors Association (IOD) PresentPositions: • Subsidiary Companies Chairman and Director in 12 Subsidiary Companies of Non-Listed SET Companies • Other Companies • Director Live Smart Co., Ltd. • Director Ruamruedee Capital Co.,Ltd

PreviousPositions:

• Director Pan Sanitary Co.,Ltd. • Director Private Business


Age: 55 Years

Education/IODTrainning: MBA, Northeastern University, Boston, USA DCP 57/2005, Thai Institute of Directors Association (IOD) PresentPositions:• Subsidiary Companies Chairman and Director in 14 Subsidiary Companies of Non-Listed SET Companies • Associated Companies • Vice Chairman GHECO-One Co., Ltd. • Chairman Cofely (Thailand) Co.,Ltd. • Director Houay Ho Thai Co., Ltd. • Director Houay Ho Power Co., Ltd.


Age: 55 Years

Education/IODTrainning: Bachelor of Sanitary, Faculty of Engineering, Chulalongkorn University DAP 2/2003 and DCP 38/2003, Thai Institute of Directors Association (IOD)

PresentPositions: • Subsidiary Companies Director in 14 Subsidiary Companies of Non-Listed SET Companies • Associated Companies • Director GHECO-One Co., Ltd. • Director Cofely (Thailand) Co.,Ltd. • Director Houay Ho Thai Co., Ltd. • Director Houay Ho Power Co., Ltd. %HemarajStockHeldasof31/12/2010: 0.09%


108

Mr.PeterJohnEdmondsonIndependent DirectorMember of the Audit Committee

Mrs.PunneeWorawuthichongsathitIndependent DirectorMember of the Audit CommitteeMember of the Corporate Governance Committee

Age: 61 Years

Education: Bachelor of Science in Chemistry (Honor), University of Sheffield, England

PresentPositions:

• Investor Consultant Private Sector

PreviousPositions:

• Manager West Merchant Bank Singapore • Director Standard Charter Merchant Bank Singapore • Senior Manager The Arab Investment Company, Riyadh and Bahrain • Manager Williams & Glyn’s Bank


Age: 59 Years Education/IODTrainning: Master in Accounting, Chulalongkorn University ACP 2/2004, DAP 2/2003, DCP 38/2003, MFM 1/2009, MFR 5/2007, MIA 1/2007, MIR 2/2008, QFR 1/2006, RCC 7/2008, DCP Re 2/2009, Thai Institute of Directors Association (IOD) CPA Certificate, Thailand CIA Certificate, The Institute of Internal Auditors of USA CPIA, QIA Certificates, The Institute of Internal Auditors of Thailand Chartered Director

PresentPositions: • Independent Director/ • Member of the Audit Committee The Brooker Group PCL. • Independent Director/• Member of the Audit Committee Thai Wacoal Public Co.,Ltd • Independent Director/ • Member of the Audit Committee Monotechnology Co.,Ltd • Director Boon-Korn Co.,Ltd • Director - Tax Accounting Federation of Accounting Professions, under The Royal Patronage of His Majesty the King • Director - Tax Department Board of Trade of Thailand

PreviousPositions: • Independent Director/ • Member of the Audit Committee GM Multimedia Public Co.,Ltd



109

Ms.PattamaHorrungruang

Director and Executive DirectorSenior Vice President

Member of the Corporate Governance Committee

Mr.SomphongWanaphaIndependent Director

Chairman of the Corporate Governance Committee

Mr.VikitHorrungruangDirector

Member of the Audit Committee

asof31/12/2010: 0.00%

Age: 67 Years

Education/IODTrainning: MBA, Finance, Michigan State University, USA (Royal Thai Government Scholarship) ACP 13/2006, DCP 62/2005, MFM 1/2009, MFR 9/2009,

MIA 5/2009, MIR 6/2009, RCP 17/2007, DCP Re 2/2009, Thai Institute of Directors Association (IOD) PresentPositions: • Chairman of the Audit committee Prasit Patana PCL. • Chairman Erawan Textile Co.,Ltd • Chairman of the Audit committee SECOM Co.,Ltd

PreviousPosition: • Chairman of the Audit committee Government Savings Bank • Chairman Executive Board on M.B.A. Program, Thammasat University • Chairman Public Warehouse Organization, Ministry of Commerce • Director State Enterprise Performance agreement Evaluation Committee,Ministry of Finance • Director Sahapatana Interholding PCL. • Secretary General Thailand Board of Investment


Age: 49 Years

Education/IODTrainning: MBA, Thammasat University DAP 1/2003, DCP 55/2005, RCC 9/2009, Thai Institute of Directors Association (IOD)

PresentPositions: • Subsidiary Companies Director in 11 Subsidiary Companies of Non-Listed SET Companies • Associated Companies • Director Cofely (Thailand) Co.,Ltd. • Director GHECO-One Co., Ltd. • Director Houay Ho Thai Co., Ltd. • Other Companies • Director CA-Post (Thailand) Co.,Ltd

%HemarajStockHeld

Age: 40 Years

Education/IODTrainning: MBA, Finance, Northeastern University, USA DCP 64/2005, DCP Re 2/2009, Thai Institute of Directors Association (IOD)

PresentPositions:

• Managing Director Sriracha Harbour PCL.

• Deputy Managing Director T.C.Exhibition Co.,Ltd.

• Director Suntec Metal Co.,Ltd.

• Director Flaming Property Co.,Ltd.

• Director Eastern Enterprise Co.,Ltd.

• Director CA-Post (Thailand) Co.,Ltd

PreviousPosition:

• Director Phromnares Co.,Ltd.

• Executive Vice President Neo Step Co.,Ltd.



110

17 10 8 5 14 16 4 2 1 3 9 11 12 15 6 13

Management 1.Mr.DavidRichardNardone Age55EducationMBA, Northeastern University, Boston, USA PositionatHemarajDirector / Executive Director / President / Chief Executive Officer YearJoinedHemaraj 1993 Hemaraj Stock Held as of 31/12/2010: 0.43%

2.Mr.VivatJiratikarnsakul Age55EducationBachelor of Sanitary, Faculty of Engineering, Chulalongkorn University PositionatHemarajDirector / Executive Director/ Executive Vice President YearJoinedHemaraj1989 Hemaraj Stock Held as of 31/12/2010: 0.09%

3.Ms.PattamaHorrungruang Age49EducationMBA, Thammasat University PositionatHemarajDirector / Executive Director / Senior Vice President / Chief Financial Officer YearJoinedHemaraj 2003 Hemaraj Stock Held as of 31/12/2010: 0.00%

4.Mr.SunthornKongsunthornkitkul Age60EducationBachelor of Mechanical Engineering, Chulalongkorn University PositionatHemarajVice President - Industrial Estate Operations YearJoinedHemaraj 2007 Hemaraj Stock Held as of 31/12/2010: 0.00%

5.Mr.PreepremMalasitt Age58EducationMBA, Northern Illinois University, USA PositionatHemarajDirector - IE Training Center and New Projects YearJoinedHemaraj 2007 Hemaraj Stock Held as of 31/12/2010: 0.00%

6.Mr.SirisakKijraksa Age50EducationBachelor of Accounting, Bangkok University PositionatHemarajDirector - Accounting and Legal YearJoinedHemaraj 1990 Hemaraj Stock Held as of 31/12/2010: 0.00%

7.Mr.KhamhoungRatsamany Age44EducationMBA, Bangkok University PositionatHemarajDirector - Small Power YearJoinedHemaraj 1995 Hemaraj Stock Held as of 31/12/2010: 0.00%

8.Ms.LaddaRojanavilaivudh Age43EducationMBA, Bangkok University and MA, Nara Women University, Nara, Japan PositionatHemarajDirector - Industrial Customer Development YearJoinedHemaraj 2001 Hemaraj Stock Held as of 31/12/2010: 0.00%

9.Ms.AnchaleeParsertchand Age41EducationMBA, Assumption University and MA, Japanese, Keio University, Tokyo, Japan PositionatHemarajDirector - Industrial Customer Development YearJoinedHemaraj 2001 Hemaraj Stock Held as of 31/12/2010: 0.00%

10.Ms.SomjaiWachiraha Age50EducationBachelor of Business Administration, General Affairs, Ramkhamhaeng University PositionatHemarajDirector - Finance YearJoinedHemaraj 1990 Hemaraj Stock Held as of 31/12/2010: 0.00%

11.Ms.JinnapatTongviseskul Age41EducationMBA, Economic & Administration, Chulalongkorn University PositionatHemarajDirector - Residential Customer Development YearJoinedHemaraj 1993 Hemaraj Stock Held as of 31/12/2010: 0.00%

12.Ms.ChantanaHinkaew Age41EducationMBA, University of Nottingham, UK and MA, Thammasat University PositionatHemarajDirector - Corporate Marketing YearJoinedHemaraj 2004 Hemaraj Stock Held as of 31/12/2010: 0.00%

13.Mr.ApichatTrongsukson Age46EducationMBA, Nida University and MS (Computer), Mahidol University PositionatHemarajAssistant Director - Information System & Services YearJoinedHemaraj 1994 Hemaraj Stock Held as of 31/12/2010: 0.00%

14.Mr.TaninSubboonrueng Age47EducationMBA, Business Administration, Assumption University PositionatHemarajDirector - Industrial Estate Development YearJoinedHemaraj 1996 Hemaraj Stock Held as of 31/12/2010: 0.00%

15.Mr.PaopitayaSmutrakalin Age40EducationMS, Finance, Drexel University, Philadelphia, USA PositionatHemarajDirector - Corporate Planning & Investor Relations YearJoinedHemaraj 1996 Hemaraj Stock Held as of 31/12/2010: 0.00%

16.Mr.NiphoneHarnpatanapanich Age54EducationMBA, Chulalongkorn University PositionatHemarajDirector - Residential Project Planning YearJoinedHemaraj 2003 Hemaraj Stock Held as of 31/12/2010: 0.00%

17.Ms.PrattanaKijjanon Age46EducationMBA, Thammasat University PositionatHemarajDirector - Procurement YearJoinedHemaraj 2008 Hemaraj Stock Held as of 31/12/2010: 0.00%


111

The Company’s Business Profile and Business Structure

Location BOIZones TotalArea(Rai) KeyEstateSpecializationH-ESIE Pluak Daeng, Rayong II, III, Free Zone 8,126 Auto Manufacturing, Auto PartsESIE Pluak Daeng, Rayong II, III, Free Zone 8,628 Auto Manufacturing, Auto PartsHEIE Map Ta Phut, Rayong III 3,546 Chemical, Petrochemical, Steel, Cogeneration PowerHCIE Bowin, Chonburi II, Free Zone 3,993 Electronics, Steel, PowerRIL Ban Khai, Rayong III 3,438 Light Chemical, ConsumerSIL Nong Khae, Saraburi II 3,619 Building Material, ElectronicsTotal 31,350

Hemaraj has continued to be Thailand’s leading developer of Industrial Estates, Utilities, and Property Customer Solutions since 1988. The “Detroit of the East” Automotive Cluster in the Eastern Seaboard is the most significant automotive cluster in Thailand where Ford, Mazda, General Motors, Auto Alliance (a joint venture between Ford and Mazda), Suzuki and over 140 automotive manufacturers from all over the world have selected Hemaraj’s Industrial Estates as their strategic locations for their investment in Thailand. Situated at the prime location to the National Petrochemical Complex, Map Ta Phut Deep Sea Port in Rayong and Laem Chabang Deep Sea Port in Chonburi, Hemaraj’s Industrial Estates have become clusters for Petrochemical and other Industrial as well for over 20 years. By offering the developed industrial land, utilities, ready built factories for rent and sale, quality industrial services, and an integrated logistics and supply chain in 6 industrial estates and industrial lands, mostly located in Eastern Seaboard of Thailand, Hemaraj’s Industrial Estates have also focused on the environmental management through policies and plans. With the success of E=MC2 (Environmental Monitoring and Control Center) and achievements in ISO 14001, ISO 9001:2000, the Best Environmental Management EIA awards, and 5 or “Excellent” corporate governance recognition rating of Thai Listed Companies 2010, Hemaraj has been chosen as the industrial estate model for practicing ECO industrial town from IEAT in 2010.

Industrial Estates Hemaraj has developed and managed 4 Industrial Estates and 2 Industrial Lands with a combined land area of 31,350 rai (13,000 acres), 426 distinct customers, 148 automotive customers from 223 contracts, 643 land or factory contracts with the total investment more than US$ 20 billion and over 80,000 employees.

1. Hemaraj Eastern Seaboard Industrial Estate (H-ESIE) 2. Eastern Seaboard Industrial Estate (ESIE) 3. Hemaraj Eastern Industrial Estate (HEIE) 4. Hemaraj Chonburi Industrial Estate (HCIE) 5. Rayong Industrial Land (RIL) 6. SIL Industrial Land (SIL)


112

Utilities Industrial Estate: the largest private supplier of clarified and treated potable water to industrial users with the capacity of 165,000 cubic meters per day and 96,000 cubic meters per day for waste water treatment. Hemaraj provides dependable utility solutions to industrial customers and manages the industrial estate property and private utilities to allow customers to optimize their efforts in

manufacturing. All Hemaraj’s industrial estates have received the Best Environmental Management EIA awards from the Ministry of Sciences, Technology and Environment and are ISO 14001, ISO 9001:2000 certified.

Power: - GHECO-One Company Limited, a 35/65 Joint Venture in a 660 MW IPP with Thailand’s largest private power provider, Glow Energy, GDF Suez Energy Group, formally named Tractebel, Belgium to supply power to Electricity Generating Authority of Thailand (EGAT). The Gheco-One Project has obtained EIA approval on 15 May 2008 and is under construction with a schedule to have its commercial operation in early 2012.

- Hemaraj holds 5% equity in Glow IPP, the 713 MW IPP Power Project locating in Hemaraj Chonburi Industrial Estate in operation since 2001. - Hemaraj holds 12.75% in Hydro Power Plant Project, Houay Ho Power in Laos People’s Democratic Republic by holding shares in Houay Ho Thai Company Limited, whose shareholders are Hemaraj and Glow group. Houay Ho Power is a company operating a 152 megawatt Hydro Power Plant business in Laos People’s Democratic Republic under a 30 years concession from the Laos Government. Water: - Hemaraj Water Company Limited: a 100% subsidiary company to develop and manage Water Resources and to provide treated water to industrial factories. - Hemaraj Clean Water Company Limited: a 100% subsidiary company to produce and distribute the industrial water to supply the industrial factories in the Industrial Estates. Other Utilities and Services: Utilities and Industrial Services assist the customers in benefiting from the shared resources and utility expertise of Hemaraj and its global partners. These capabilities extend beyond Hemaraj’s industrial estates and leverage technical resources. - Cofely (Thailand) Limited (Previousely Elyo-H Facilities Management): a 40/60 Joint Venture with GDF Suez Energy and Teo Hong Silom to provide utility and facility management services to industrial customers. Major customers are ESSO, Glow, Lite On, Saint-Gobain Sekurit, Thai German Ceramic, Siam Ceramic Group Industry. - Eastern Pipeline Services Company Limited: a 100% subsidiary company to provide piping distribution for Chemical, Steam and Industrial Gas for Heavy Industrial Users with a total investment of Baht 200 million.


113

- H-Construction Management and Engineering Company Limited: a 100% subsidiary company to provide design, construction supervision, project and construction management services. Property Ready Built Factories for Rent and Sales: Hemaraj designs and develops turnkey RBF factories, with clear span layout, no column in the middle, and expandable options sizing from 500 square meters to 8,000 square meters for rent and sales located in both General Industrial Zone and Duty Free Zone in multiple industrial estates/zones of Hemaraj. Ready Built Factories provides customers flexibility on investment and financing as well as a growth path to larger buildings or developed land as their business expands. H-Construction Management and Engineering, Hemaraj’s subsidiary company, also manages the utility and fit-out requirements to fit customers needs. Hemaraj has built 125 units with over 276,000 square meters to date in its multiple industrial estate locations.

Selective Property: - H-Phoenix Property Company Limited: a 100% subsidiary company for commercial property lease or sale and management with a registered capital and paid-up of Baht 480 million. H-Phoenix has acquired the majority ownership of office units in UM Tower and additional adjacent freehold land area of 2 rai 3 ngan 55.2 square wah (1,155.2 square wah or 4,620.8 square meters). UM Tower is a 31-storey juristic office building, set on two rai of land with a total net lettable or salable area of 35,500 square meters. The building is located at 9 Ramkhamhaeng Road, which is close to the expressway, airport, linking the Eastern Seaboard, and downtown as well as next to the Airport Express Station which started operating in 2010. The current occupancy rate is approximately 75%. The adjacent land will provide Hemaraj with future property development opportunities. - The Park Chidlom, an exclusive Bangkok luxury high-rise condominium residence under the lifestyle concept of “a symphony in living’ with the highest international standards in the most convenient Bangkok city location. The Park Chidlom, set on five and one half rai, has two residential towers: the 35-storey Somkid Tower and the 28-storey Chidlom Tower, with a total of 218 units comprising 87,000 gross square meters and 53,299 net square meters. In 2008, The Park Chidlom won the Best High Rise Development Thailand - Five Star Award of the prestigious CNBC Asia Pacific Property Awards 2008 held in Singapore.


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Major/Significant Events in 2010

Industrial Estate Land Sales After the economic slowdown in 2009, Hemaraj sees the ongoing recovery of economic activities in major manufacturing sectors and the global economic revival return in 2010, particularly in Automotive and Industrial Investment in emerging market and significantly Thailand. Supporting by the market growth, competitiveness, and consolidation opportunities, industrial estates sales (or rentals) reflected 930 rai (372 acres) sold in 2010 with a continued strong demand in the automotive sector. Reinforced the success of Hemaraj’s automotive cluster “Detroit of the East” and extended the 16-year relationship, Ford Motor Company chose Hemaraj Eastern Seaboard Industrial Estate for their new plant expansion in Thailand of 468 rai (187 acres) in earlier 2010. From 41 contracts, 19 new customers and 22 project expansions from existing customers, total industrial customers are now 426 distinct new customers with 643 contracts including 148 automotive customers with 223 automotive contracts.

Hemaraj Acquires Remaining 75% of SIL Industrial Land Shares from Siam Cement Hemaraj has completed the acquisition of the remaining 75% shares in SIL Industrial Land Co., Ltd. from Cementhai Holding Co., Ltd., a subsidiary of The Siam Cement Public Company Limited. The value of the share acquisition is approximately Baht 763.7 million in addition to the assumption by Hemaraj of the shareholder loan to SIL of Baht 380 million. Hemaraj used its own internal cash sources in the acquisition. SIL Industrial Land Co., Ltd. (SIL) is an industrial park development with its SIL location in Saraburi, Thailand and its wholly owned subsidiary Rayong Industrial Land Co., Ltd. (RIL) location being in Rayong, Thailand. SIL has a gross land area of 3,619 rai with an estimated remaining sellable area of 1,064 rai as of June 30, 2010. RIL has a gross land area of 3,438 rai with an estimated remaining sellable area of 1,711 rai as of June 30, 2010.

Hemaraj Joins Hand with CAT to Provide Ultra High Speed Telecom to Its Customers On January 22, 2010, Hemaraj has signed an MOU with CAT Telecom Public Company Limited to kick off its Bt600-million “Ultra High Speed Telecommunications Network” project.


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• Itakura Jitsugyo Purchases SME Factory at Hemaraj Eastern Seaboard Industrial Estate Itakura Jitsugyo Company Limited signed an agreement to purchase SME Factory for its plant at Hemaraj Eastern Seaboard Industrial Estate. The plant will assemble automotive glass for Suzuki Automobile Manufacturing (Thailand) Co., Ltd.

Managed and implemented by CAT, the project is destined to upgrade telecommunications infrastructure across Hemaraj’s industrial estates and at its UM Tower to ensure higher efficiency, reliability and availability to the needs of existing and prospective entrepreneurs and investors. Under the MOU, CAT will provide the industrial estates and the headquarters building with an access to ultra high speed communications network, using the country’s first FTTF (Fiber-to-the-Factory) platform. This is Thailand’s fist FTTF (Fiber To The Factory) architecture to industrial estates TRIS Rating Affirms Company Rating at “A-” and Revised Outlook to “Stable” On August 6, 2010, TRIS Rating Co., Ltd has affirmed the company rating of Hemaraj at “A-” and has revised the rating outlook to “stable” from “negative”. The rating continues to reflect the company’s proven record in industrial estate development, growing base of recurring income from utilities services and its healthy balance sheet. The “stable” outlook reflects the ongoing recovery of economic activities in major manufacturing sectors and the expected global economic review which will subsequently lead to growing demand for industrial property. However, the political uncertainty and the Map Ta Phut problem remain rating concerns. The increasing contribution from the utilities services and rental businesses are expected to provide more reliable cash flow streams for Hemaraj to counterbalance the fluctuations in industrial land sales. In addition, TRIS Rating expects the company to continue its conservative business policy and be able to maintain the debt to capitalization ratio below its stated policy of 50%. Hemaraj received “Excellent” Corporate Governance Hemaraj receives the ‘Excellent’ corporate governance recognition level in the Corporate Governance Report of Thai listed Companies in 2010 (CGR). Hemaraj achieves the ‘Excellent’ recognition level in the Rights of Shareholders, Role of Stakeholders, and Disclosure and Transparency categories. The company earns the ‘Very Good’ and ‘Good’ levels of recognition in the Equitable Treatment of Shareholders and Board Responsibilities categories, respectively. Major Customer Development

• Hemaraj Congratulates Ford Motor on New Plant’s Stone Laying Hemaraj congratulated Ford Motor Company Thailand at the Foundation Stone Laying ceremony for Ford’s new manufacturing plant located on 468 rai (187 acres) in Hemaraj Eastern Seaboard Industrial Estate. The occasion also marked the 15-year automotive relationship developing the “Detroit of the East” between Ford and Hemaraj. Ford announced a US$450 million or 15 billion baht investment to construct the new state-of-the-art passenger car facility, which will start operation in 2012 with an initial production capacity of 150,000 units per year.


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• KC Altech Purchases Hemaraj SME Factory at Eastern Seaboard Industrial Estate (Rayong)

KC Altech (Thailand) Co., Ltd. signed an agreement with Hemaraj to purchase SME Factory for its plant at Eastern Seaboard Industrial Estate (Rayong). With a registered capital of Baht 37 million, the plant will produce Aluminum Tube mainly for supply to LG Electronics (Thailand) Co., Ltd. and Halla Climate Control Thailand Co., Ltd.

• DaikyoNishikawa (Thailand) Purchases 14 Rai in Hemaraj ESIE for Plant Expansion DaikyoNishikawa (Thailand) Co., Ltd., one of the largest plastics manufacturers in Japan purchased additional land of 14 rai in Hemaraj Eastern Seaboard Industrial Estate for its plant expansion. The company last year opened a factory on a 25 rai piece of land in the industrial estate to produce automotive plastic parts for supply to Auto Alliance (Thailand) Co., Ltd.

• Chalybs Cylinders Purchases 70 Rai at Hemaraj’s Eastern Seaboard Industrial Estate (Rayong) Chalybs Cylinders Limited, a leading high-pressure gas cylinder from Italy recently signed an agreement with Hemaraj to purchase land of 70 rai at Eastern Seaboard Industrial Estate (Rayong) for its first plant in Thailand. The factory will manufacture CNG Cylinders for Natural Gas Vehicles with a capacity of 200,000 cylinders per year, scheduled to commence operation in 2011. The total value of investment is 2 Billion Baht.

• M&T Purchases Land for Expansion at Eastern Seaboard Industrial Estate (Rayong) M&T Allied Technologies Co., Ltd., a key supplier of auto parts for Japanese car brands, signed a contract with Hemaraj to purchase additional land of 5 rais for its factory expansion in Eastern Seaboard Industrial Estate (Rayong). M&T is a manufacturer of Shift Lever and Spare Tire Carrier. The land purchase is in line with the company’s plan to increase its production to serve the world’s top leading vehicle brands such as Toyota, Isuzu, Honda, Ford, Mazda and Suzuki.


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• Katoen Natie (Thailand) to Expand Factory at Hemaraj Eastern Seaboard Industrial Estate Katoen Natie (Thailand) Co., Ltd. - a leader in value-added logistics services provider from Belgium signed a contract to buy 65-rai land at Hemaraj Eastern Seaboard Industrial Estate. The purchased land is for the expansion of its factory which will provide various logistics services including warehousing, inventory management through Professional Warehouse Management System, packaging and labeling, pre and sub-assembly, Supply in Line Sequence (SILS) logistics, Supply Chain Management, and On-site logistics.

• Eurokera (Thailand) Leases Ready-Built Factory in Hemaraj Eastern Seaboard Industrial Estate Eurokera (Thailand) Co., Ltd – a leading manufacturer of heat-resistant ceramic glass from France-signed a contract to lease a ready-built factory in Hemaraj Eastern Seaboard Industrial Estate (Hemaraj ESIE). The new plant will produce ceramic glass for kitchen appliances. The factory will be operational in 2011.

• Narumi (Thailand) Purchases Ready- Built Factory in Eastern Seaboard Industrial Estate (Rayong) Narumi (Thailand) Co., Ltd., a leading manufacturer of automotive door handle from Japan, signed a contract to purchase a ready-built factory in Eastern Seaboard Industrial Estate (Rayong). With a registered capital of 100 million baht, the company will produce automotive door handle for supply to Mitsubishi Laem Chabang with a capacity of 2 million pieces per year.

• Bolwell Holdings (Thailand) Purchases Ready-Built Factory at Hemaraj ESIE Bolwell Holdings (Thailand) Co., Ltd., a leading composite mouldings manufacturer from Australia signed an agreement to buy a ready-built factory at Hemaraj Eastern Seaboard Industrial Estate. The company will produce composite mouldings at a maximum capacity of 75,000 pieces per year for 100% export.


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• Minoru (Thailand) Purchases Ready- Built Factory in Eastern Seaboard Industrial Estate (Rayong) Minoru (Thailand) Co., Ltd.-a Japanese manufacturer of Auto Parts - signed a contract to purchase land and ready-built factory in Eastern Seaboard Industrial Estate (Rayong). The new plant will produce A/C Ducts, Spoilers, HVAC Cases at a capacity of 350,000 pieces/month for supply to automotive manufacturers and primary parts suppliers.

• Sang Chareon Eastern Galvanize Purchases 21 Rai at Hemaraj Chonburi Industrial Estate Sang Chareon Eastern Galvanize Co., Ltd - a Thai galvanizing service provider - signed a contract to buy land at Hemaraj Chonburi Industrial Estate. The purchased 21 rai of land is for a new factory which will provide services of galvanizing cast on steel finishing under the registered capital of 25 million Baht.

• Tanaka Ai Industries (Thailand) Expands Factory in Hemaraj’s Eastern Seaboard Industrial Estate (Rayong) Tanaka Ai Industries (Thailand) Co., Ltd, a Japan-based company specialized in slitting and rewinding of non-woven fabrics, signed a contract to purchase additional 12 rai (4.8 acres) of land for its second plant in Eastern Seaboard Industrial Estate (Rayong). With the new expansion Tanaka Ai (Thailand)’s manufacturing facilities will now cover a total area of 92 rai (36.8 acres) in Hemaraj’s ESIE.

Hemaraj to Communities

• Hemaraj, VEC and OBEC to Proceed with “Industrial Skill Training” for Secondary School Students in Rayong and Chonburi Ms. Narisara Chavaltanpipat, Deputy Minister of Education presided over the MOU signing ceremony between Hemaraj Land And Development Public Company Limited, Office of the Vocational Education Commission (VEC) and Office of The Basic Education Commission (OBEC) to organize “Industrial Skill Training Project” for students from extended schools under the Chonburi Educational Service Office Area 3 and Rayong Educational Service Office Area 1. The objective of the project is to equip the students with industrial skills essential for their future employment including elementary electricity class for Mathayom 2 students and industrial hygiene and safety class for Mathayom 3. It also helps broaden students’ perspectives on vocational education that gives them a promising career alternative, particularly in response to the requirements of the industrial sector. Seven schools in areas around Hemaraj’s industrial estates in Rayong and Chonburi provinces have been selected to participate in the first phase of the project.


120

• Hemaraj Donates Baht 6.6 Million for Haiti Earthquake Relief H.E. Suthep Thaugsuban, Deputy Prime Minister and Mr. Virachai Virameteekul, Minister Attached to the Prime Minister’s Office received cash donation of over 6.6 million baht from Hemaraj Land And Development Plc. at the Government House to support the government’s Haitian Earthquake Relief Efforts.

• Hemaraj Awarded AMCHAM’s CSR 2010 Excellence Recognition Hemaraj was awarded The American Chamber of Commerce (AMCHAM) Corporate Social Responsibility 2010 Excellence Recognition. The award intends to raise CSR awareness and share best practices among AMCHAM’s member companies. For more than 20 years, Hemaraj has committed to be a good corporate citizen by practicing good governance and implementing various sustainable social projects.

• Hemaraj’s Tree Planting at Eastern Seaboard Industrial Estate (Rayong) Hemaraj organized Tree Planting activity to expand green areas in the Eastern Seaboard Industrial Estate together with corporate members in the industrial estate and community leaders planted 1,000 trees during the event.

• Hemaraj Organizes “Art Camp” Heamraj organized “Art Camp” - a continuous art workshop program for students. Since the first workshop in 2009, Hemaraj has invited art experts from Inspire Sight Art & Culture Center to give basic principles and knowledge about arts through fun hands-on activities. During the workshop, art is also related to environment and local culture to help enhance students’ skill in arts and instill a feeling of pride and gratitude towards their hometown.


121

• Hemaraj and Schools in Rayong and Chonburi Take Big Step Forward for Holistic Learning Approach Hemaraj, in collaboration with AMCHAM Thailand Charitable Foundation (ATCF), held a seminar and exhibition on “Holistic Learning Approach” at ESIE Plaza 1, Eastern Seaboard Industrial Estate, Rayong The event was organized to complement the “Train the Trainers” primary teachers training program. Exhibits and presentations at the seminar and exhibition include project details, administration strategies, and useful experiences from the six pilot schools in the program. Students’ work under the project were also on display. The event ends with the recruitment of more schools into 2010 training scheme which will be continuously supported by Hemaraj and ATCF.

• Safety Club of Hemaraj EIE Organized Social Responsibility Activity The Eastern Safety and Environmental Club (ESEC) of Hemaraj Eastern Industrial Estate (Map Ta Phut) in cooperation with The Industrial Estate Authority of Thailand (IEAT), launched “ESEC Day in School” campaign at Wat Mapchalood School, Rayong. The campaign is aimed at raising awareness of safety in schools. At the event, representatives of factories in the estate maintained trench and drainage covers as well as pathway marks for more safety.

• Hemaraj Supports Chonburi Football Club at Thailand Premier League 2010 Hemaraj, a major sponsor of Chonburi Football Club, participated in a Press Conference announcing Thailand Premier League 2010 which will be held from 13th March to - 30th October 2010. Under a three-year sponsorship agreement worth a total of Baht 18 Million, Hemaraj has been providing cash support of 6 million baht per year to Chonburi Football Club since 2008.

• S I L Industrial Land Awarded “CSR-DIW” Mr. Vitoon Simachokedee, Permanent Secretary, Ministry of Industry presented CSR-DIW (Corporate Social Responsibility, Department of Industrial Work) certifying plague to Mr. Sunthorn Kongsunthornkitkul, Vice President of S I L Industrial Land Co., Ltd. after passing the coaching and verifying seminar by Management System Certification Institute (Thailand) (MASCI). Managed by Hemaraj Land And Development Plc. S I L is one of the two companies in Saraburi receiving the CSR-DIW.


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• Hemaraj Provides Free Optical Check-up for Community Mobile Medical Unit from Hemaraj joined Health Fair 2010 organized by Tasith Subdistrict Administration, Rayong Province. During the fair, Hemaraj provided free optical check-up and eyeglasses to villagers.

• IEAT and Plants in Map Ta Phut Signed Agreement to Promote Local Income Generation in Rayong

The Industrial Estate Authority of Thailand (IEAT) in cooperation with The Federation of Thai Industries (FTI) and Map Ta Phut Plant Manager Club (PMC) signed a collaborative agreement in an attempt to promote income generation in Rayong. Under this effort, all participating businesses and manufacturers including their non-resident staff in Map Ta Phut are encouraged to transfer their vehicle and house registrations to Rayong in order that the province collects more business, motor vehicle and individual income taxes. So far business operators have agreed to transfer registration of more than 1,500 cars to Rayong as part of their social responsibility.

• Hemaraj Supported Water Relief in Pluakdaeng, Rayong Hemaraj in cooperation with the Disaster Prevention and Relief Office, Pluakdaeng Subdistrict Administrative Organisation (Aor Bor Tor Pluakdaeng), Rayong distributed water to communities in Pluakdang area affected by draught situation. The quantity of water released from March to May totals 1,400 cubic meters

• Hemaraj 2010 Annual Contribution to 51 Schools in Rayong and Chonburi Hemaraj, in cooperation with customers and alliances of its industrial estates, distributed school kits and sport equipment to over 13,700 students in 51 schools in Rayong and Chonburi provinces under its Annual School Contribution Program. The project is part of Hemaraj’s social contribution activities, which have been continuously implemented for over 12 years.


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Environmental Care Hemaraj Land And Development Plc. maintains the environmental policy in developing the industrial estates by emphasizing on land development as well as increasing the infrastructure service capacities& performance. Besides focusing on environmental management, Hemaraj also encourages companies in the estates to become aware of the significance of environmental care and community relations. Aim to the best result for all stakeholders, the Safety &Environment Clubs are where members from companies in the estates join to share the same objective in caring for the environment. All through the year, the clubs conducted several activities including Environment, Health and Safety activities for members and communities. Internal and external Emergency Drills were conducted frequently as well among the estates and the communities nearby as one of the major activity. Besides, Hemaraj has been practicing and managing environmental related projects and has received the Environmental Management System Certification: ISO 14001, and EIA awards

• Hemaraj Donates One Million Baht for Flood Relief Hemaraj’s SIL Industrial Land (Saraburi) donated 1,000,000 Baht to Mr. Thavorn Prommechai, Saraburi Provincial Governor for flood relief in Saraburi Province.

• Hemaraj Joins Eco-Industrial Estate Development Initiative

Hemaraj was chosen as one of the pioneers to implement eco-industrial estate development initiative . An MOU signing was held between the Industrial Estate Authority of Thailand (IEAT), Department of Industrial Works, Ministry of Industry and selective industrial estate developers to declare their commitment for sustainable eco-industrial estate development in Thailand at an event entitled “Next Step of Eco-Industrial Estate Development in Thailand” recently organized by the Ministry of Industry at BITEC.

• Hemaraj Helps Maab Chalude Community Fire Fighting Team of Hemaraj in cooperation with Sriracha Green Point Co., Ltd. recently helped Maab Chalude Community and Huey Pong Housing Estate nearby Hemaraj Eastern Industrial Estate (Map Ta Phut) clean venue for Mother’s Day Fair 2010. Hemaraj supplied 5,000 liters of water for the cleaning.


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Year 2010 is the years that Hemaraj integrate a lot of program on environmental and social activities from existing projects and also establishing a lot of new program during the year for better quality of environment, health and safety of people around the estates. After we have success the E=MC2, Environmental Monitoring and Control Center, in 2009 together with a lot of friendly environmental & social programs, Hemaraj again been chosen as the model for practicing ECO industrial town from IEAT in 2010 which is the main policy of IEAT to target all estate become sustainable developing estate within year 2014. CSR (Corporate Social Responsibility) is another significant tool that Hemaraj use to integrate the efficiency of managing environmental and social part. A lot of CSR programs have been conducted thought the year. In 2010, we have started seeking collaboration for the co-CSR program with our strategic partners tangibly through their professional, experience and authority to help integrating better environmental and social solution for all stakeholders. Hemaraj also commit for the transparent environmental monitoring and participating from communities nearby, we have conducted the public hearing from communities and concerned parties as part of the mitigation plan set up during the starting of the new developed area. Hemaraj foresees the significance in maintaining the environment care projects. From day one, Hemaraj believes in the principle of sustainable co-existing of environment and community and this is our promise to the public.


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GPD

2005

4.5

10.0

8.0

6.0

4.0

2.0

0.0

-2.0

-4.0

%

5.1 4.9

3.0

-2.3

2006 2007 2008 2009

7.8

2010

% Capacity Utilization

2000

%

2002 2004 2006 2008

Total Automotive Petrochemical

110

100

90

80

70

60

50

40

30

20

10

2010

BOI Application Approvals

2005

571

2006 2007 2008 2009

800

700

600

500

400

300

200

100

0

373

744

500 491

Baht : Billion

281

2010

3,546

Thailand Industrial Property Market

2005

3,236

2006 2007 2008 2009

5,000

4,000

3,000

2,000

1,000

0

2,865

4,617 4,170

900

Rai

1 Rai = 1,600 Square Meters or 0.4 Acres Source: Bank of Thailand, March 2012, Board of Investment, January 2010

2010

The 2010 Thai economy is forecasted to grow by 7.8% compared to -2.3% in 2009. The factors attributed to the growth are from the export volume of goods and services, following the steady economic recovery of major trading partners in Asia and new market economies in particular even though there were the strong Baht and flood problems in the latter half of 2010. In 2010, the Private Consumption Index increased by 5.9% from the better employment situation, higher farm price, and rising consumer confidence following the resolution of the political turmoil. Manufacturing Production Index increased by 3.9% and the capacity utilization rate increased to 63.4%. For the year 2010, the Private Investment Index increased by 17.6%. Export volumes for Thailand were increased to US$ 195.3 billion, a 28% increase, while Imports increased by 37% to US$ 179.6 billion, especially Raw Materials & Intermediate Goods and Capital Goods increased by 42% and 27%, respectively. Current account ended the year with a surplus of US$ 14.8 billion. The balance of payments was US$ 31.3 billion. The industrial property market sector increased 294% from 901 rai in 2009 to 3,622 rai in 2010. In 2010, Hemaraj sold 930 rai of industrial land, or equivalent to 26% of total market share. The Board of Investment (BOI) project approval significantly increased to Baht 491 billion compared with Baht 281 billion in 2009, or 75% increase. The number of projects approved was 1,566 projects, a 56% increase from 2009. Thailand still remained a regional production hub in the ASEAN automotive industry, particularly for one-ton pickups and small passenger cars. In 2010, the vehicle production reduced to 1.645 million vehicles from 999,378 vehicles in 2009, a 65% increase. Domestic vehicle sale in 2010 was 800,357 vehicles and 896,065 vehicles for export. In 2010, automotive export was 10% of total export value.

Economic & Competitive Condition


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Management Analysis

Operating Performance For the Year 2010, Hemaraj reported Total Net Income of Baht 1,215.9 million, or an increase of 111% compared with the same period of 2009. The increase of Net Income for the Year 2010 was due to increases in industrial land sales, industrial estate utilities, the rental and sale of ready built factories and residential condominiums as well as profits from associates (significantly unrealized currency translation gain of Baht 394 million related to power) in comparison to the same period of the prior year. Earnings per-share was 0.125 Baht per share, representing an increase of 105% from the same period of 2009. For the Year 2010, Hemaraj’s Total Revenue was Baht 4,020.2 million compared with Baht 2,222.7 million for the same period of 2009, representing an 81% increase. Total Operating Revenue from core businesses was Baht 4,219.7 million, an 89% increase from the same period of 2009. Industrial Estate Land Sales for Year 2010 including Profit from Associates. Industrial Estate Land Sales were Baht 1,501.0 million, or a 113% increase. There is an additional Baht 788 million in deferred revenue from Industrial Estate Land Sales not recognized to date, based on the percent completion method from 3 industrial estate new phase developments though the Thailand accounting method is changing for revenue recognition in 2011. Total Utilities Revenue including industrial estate utilities, dividend from power/utilities associates, and other utilities & services fees increased to Baht 1,472.4 million in total, an increase of 43%. The industrial estate utilities have increased 26% to Baht 967.7 million, from stronger water demand and the consolidation of Hemaraj Saraburi Industrial Land and Hemaraj Rayong Industrial Land in Quarter 4, 2010. Lower capacity payments from chemical business reflected a decrease in Other Utilities and Service Fees by 79%. Total Rental Revenue including ready built factory rental, pipe-rack rental, commercial office rental and others decreased to Baht 480.4 million in total, a decrease of 7% which reflected by lower construction management fees by 64%. However, the rental revenue from ready built factory, piperack, commercial office and other rental property increased 13% from stronger rental demand. Sale of Property including ready built factory sales and residential sales increased from no residential sales in 2009 to Baht 766 million, a 5312% increase. Financial Status The consolidated Balance Sheet in 2010 is summarized as follows. Total Assets in 2010 were Baht 18,715 million, a 37% increase from Baht 13,681 million in 2009. Total Current Assets in 2010 were Baht 11,202 million compared to Baht 7,684 million in 2009, or a increase of 46%. This includes Cash on Hand of Baht 3,517 million, Account Receivable of Baht 561 million and Land held for Real Estate development of Baht 7,046 million. Other Assets were Baht 7,513 million in 2010. This includes Land held for commercial purposes not under development of Baht 315 million, assets for rent of Baht 2,021 million, and long-term investment in other companies of Baht 3,479 million. Long term investment includes, 5% direct holding in a 713 MW gas-fired power plant Glow IPP Co., Ltd., 51% holding in Houay Ho Thai Co., Ltd. which holds 25% in 152 MW Hydro Power Project in People Democratic Republic of Laos, and 35% holding in 660 MW coal-fire power plant Gheco-One of which Baht 766 million deposited for future equity commitment. All power projects are the joint investments with Glow Energy Plc. (GDF Suez). Total Liabilities in 2010 were Baht 9,577 million an 82% increase from Baht 5,222 million in 2009. The increase was mainly from the issuance of unsecured Baht Bonds of Baht 6,000 million in 2010 to retire short term commercial papers and to fund the future project development i.e. power and properties projects.


127

Total Shareholders Equity in 2010 was Baht 9,138 million versus Baht 8,459 million in 2008, or an 8% increase due to the Net Operating Profit of 2010, the dividend payment, and growing operating revenue from a broader revenue mix. As of December 31, 2009, there were 9,705.19 million common shares outstanding. The 2010 Net Debt to Equity ratio was at 0.66 to 1. Risk Factors & Others External Risks The company faces investment and management risks associated with Thai government and Bank of Thailand policies as well as external political and economic environment in neighboring and other countries. In addition Foreign Direct Investment, inflation, oil price, interest rates, land cost, construction cost, and shortages of skilled labor are factors that could affect the company businesses. The company is aware of the risks and effects associating with such factors and tries to have a systematic monitoring and analytical measurement to prevent and to minimize such risks at the acceptable level when comparing to the expected return. The Board of Directors and Management have also implemented the business strategy with appropriate adjustments based on the situation as witnessed from broadened operating revenue and improved profit margins. Increases in revenue from industrial estates utilities and rental, which are recurring and predictable, have balanced our revenue structure. Our multiple-locations industrial estates with a high percentage of repeat customers and the niche selective property projects have also reduced our risk profile. However, industrial development is in place, broad revenue cushions this impact, and strong balance sheet minimizes disruption.

Financial Risks The operating performance, financial status, economic environment in Thailand and other countries, access to financial and capital market, foreign exchange and interest rates are risk factors to the company’s financial management. An appropriate and sufficient source of funds with a reasonable cost of capital and appropriate financial structure will support the company’s competitiveness. Since the economic crisis, the company’s financial structure has been continuously strengthening resulting in improving in net debt to equity ratio. In 2010 the net debt to equity ratio was 0.66 to 1 times with cash balance of Baht 3,517 million. With a strong balance sheet and a lower debt level, high level of cash on hands, no foreign currency debts, and broader lending sources, these will provide the company more flexibility to grow the business expansion, yet to minimize the financial risks.

Risk from Automotive and Petrochemical Customers The company has 197 customers from automotive (148) and petrochemical (49) sectors out of 426 customers, or 46% of total customers. The company will be affected from the slowdown of investment from these sectors both revenue from land sales and other related revenue. The company is aware of such factors and has benefited from these clusters, but it is also expanding our customer base in different sectors such as electronic, energy, steel, construction materials, etc. so that the company will not entirely depend on one or two sectors. In Quarter 4, 2010, the company acquired 75% of shares in Saraburi Industrial Land and Rayong Industrial Land from Siam Cement Group which have total area of more than 7,000 rai and expanded our customer base into various sectors. The company also tracks and analyzes the customer mix and demographic on a regular basis and adjusts our strategy accordingly.

Risk from investing in Independent Power Producer (IPP) The company has invested in Independent Power Producer (IPP) project in Gheco-One Company limited with Glow Energy. This is in line with our strategy to broaden our revenue by selectively pursuing superior profit opportunities from complementary businesses to increase the predictability and sustainability of the longer-term revenue stream. Risk from changes of rules, regulations, and government policy, delay of construction, financing risk, risk from environmental impact, risk from raw material sourcing, risk from sole customer, foreign exchange risk, and interest rate risk are risks involved the project and the material change in such factors could materially affect the project’s performance as well as the company’s.


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The company is aware of the risk from such factors by having a feasibility study as well as the sensitivity analysis cover all areas and considering together with the attractiveness of the project, including the return which is recurring and predictable throughout the project life after the commercial operation. This project will be developed and managed by Glow Energy (GDF Suez), Thailand’s leading private power producer. As of December 2010, Gheco-One has obtained Environmental Impact Assessment (EIA) approval from Office of National Environmental Policy (ONEP) and under the process for applying the Environmental and Health Impact Assessment (EHIA), signed Power Purchase Agreement (PPA) with Electricity Generating Authority of Thailand (EGAT), signed Coal Supply Agreements (CSA) with suppliers, secured Project Financing from lenders, and signed the Engineering Procurement Contract (EPC) with contractor. The project is under construction and planned for the commercial operation date (COD) by Quarter 1, 2012 In addition, Gheco-One signed the foreign exchange rate swap, interest swap, coal cost forward contract, and various contracts on matching currency of lending with costs and revenue streams and interest rate swaps in order to minimize those risks. The construction of GHECO-One as of December 31, 2010 was88% complete.

Risk from the Map Ta Phut Effect In September 2009, the Central Administrative Court issued an injunction to 8 government agencies to suspend the 76 projects in Map Ta Phut temporarily until actions made in compliance with the Constitution of The Kingdom of Thailand 2550 Article 67 (2). In December 2009, the Supreme Administrative Court revised the injunction and suspended the projects which are under the 11 categories of projects or activities that may have severe impacts on the community with respect to the Notice of the Ministry of Natural Resources and Environment dated August 31, 2010 and their licenses were issued after the Constitution B.E. 2550 until appropriate actions are made in compliance with the Constitution of The Kingdom of Thailand 2550 Article 67 (2). The related government agencies, private sector, and the community have been participating to issue the framework, guidelines, as well as the rules and regulations in compliance with Article 67 (2) of the Constitution to be appropriate and fair to all parties for those projects that may have severe impacts on the community and subject to the EHIA. Although, none of Hemaraj’s industrial estate project is subject to the EHIA, the company also set up a special team to work closely with related government agencies and community to provide necessary information and fully cooperates with them in order to resolve this conflict. In longer term, the company’s strategy is to broaden the revenue base into businesses, which have growing, and predictable revenue stream such as utilities business. In 2010, the company had operating revenue from non-industrial land sales as much as 63% of Total Operating Revenue.


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Management Structure

Board of Directors As of December 31, 2010, Board of Directors consists of 10 members as follows: 1. Mr. Chavalit Sethameteekul Chairman of the Board of Directors/ Nomination and Remuneration Committee 2. Mr. Thongchai Srisomburananonta Director/ Chairman of the Executive Committee/ Nomination and Remuneration Committee 3. Mr. David Richard Nardone Managing Director/ Executive Director 4. Mr. Sudhipan Charumani Independent Director/ Chairman of the Audit Committee/ Chairman of the Nomination and Remuneration Committee 5. Mr. Peter John Edmondson Independent Director/ Audit Committee 6. Mrs. Punnee Worawuthichongsathit Independent Director/ Audit Committee/ Corporate Governance Committee 7. Mr. Vivat Jiratikarnsakul Director/ Executive Director 8. Ms. Pattama Horrungruang Director/ Executive Director/Corporate Governance Committee 9. Mr. Somphong Wanapha Independent Director/ Chairman of the Corporate Governance Committee 10. Mr. Vikit Horrungruang Director With Mr. Sirisak Kijraksa as Company Secretary The Company’s Board of Directors consists of 4 Independent Directors who have qualifications according to such prescribed in regulation of SET and SEC as follows: (1) holding shares not exceeding 0.5 per cent of the total number of voting rights of the company, its parent company, subsidiary, affiliate or juristic person which may have conflicts of interest, including the shares held by related persons of the independent director; (2) neither being nor having been an executive director, employee, staff, or advisor who receives salary, or a controlling person of the company, its parent company, subsidiary, affiliate, same-level subsidiary or juristic person who may have conflicts of interest unless the foregoing status has ended not less than two years prior to the date of application filing with the Office; (3) not being a person related by blood or registration under laws, such as father, mother, spouse, sibling, and child, including spouse of the children, executives, major shareholders, controlling persons, or persons to be nominated as executive or controlling persons of the company or its subsidiary; (4) not having a business relationship with the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest, in the manner which may interfere with his independent judgement, and neither being nor having been a major shareholder, non-independent director or executive of any person having business relationship with the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest unless the foregoing relationship has ended not less than two years prior to the date of application filing with the Office. The term “business relationship” includes any normal business transaction, rental or lease of immovable property, transaction relating to assets or services or grant or receipt of financial assistance through receiving or extending loans, guarantee, providing assets as collateral, including any other similar actions, which result in the applicant or his counterparty being subject to indebtedness payable to the other party in the amount of three percent or more of the net tangible assets of the applicant or twenty million Baht or more, whichever is lower. The amount of such indebtedness shall be calculated according to the


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calculation method for value of connected transactions under the Notification of the Board of Governors of the Stock Exchange of Thailand Re: Disclosure of Information and Act of Listed Companies Concerning the Connected Transactions mutatis mutandis. The combination of such indebtedness shall include indebtedness taking place during the course of one year prior to the date on which the business relationship with the person commences; (5) neither being nor having been an auditor of the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest, and not being a major shareholder, non-independent director, executive or partner of an audit firm which employs auditors of the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest unless the foregoing relationship has ended not less than two years from the date of application filing with the Office; (6) neither being nor having been any professional advisor including legal advisor or financial advisor who receives an annual service fee exceeding two million Baht from the company, its parent company, subsidiary, affiliate or juristic person who may have conflicts of interest, and neither being nor having been a major shareholder, non-independent director, executive or partner of the professional advisor unless the foregoing relationship has ended not less than two years from the date of application filing with the Office; (7) not being a director who has been appointed as a representative of the company’s director, major shareholder or shareholders who are related to the company’s major shareholder; (8) not having any characteristics which make him incapable of expressing independent opinions with regard to the company’s business affairs.

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

Term of the Board of Directors In every Annual Ordinary Meetings, 1/3 of the board of directors shall be resigned. In case it is undividable, the resigned director must be as close to 1/3 and such resigned director may be re-elected to assume the same position. Executive Committee As of December 31, 2010, Executive Committee consists of 4 members as follows: 1. Mr. Thongchai Srisomburananonta Chairman of the Executive Committee 2. Mr. David Richard Nardone Executive Committee Member 3. Mr. Vivat Jiratikarnsakul Executive Committee Member 4. Ms. Pattama Horrungruang Executive Committee Member The Executive Committee has been assigned by the Board of Directors to help formulate the Company’s operation policy and strategies, to supervise and to ensure that such approved policy and strategies are followed through with responsibilities, integrity and care, and in line with relevant rules of law, the Company’s rules, as well as the Board of Directors and Shareholders approval.

Scope of the Executive Committee’s Authority and Responsibility 1. To screen and review business plans, investment plans, together with the relevant budgets, as prepared by the Management, prior to submitting the said data to the Board of Directors for consideration and approval. 2. To monitor, supervise and control the Company’s work progress, in order to ensure that the Company’s operations are in line with what the authorizing or assigning Board would expect.


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3. To consider granting permission to commence important activities, as well as to authorize payments in excess of Management authority, in accordance with the Company’s authorization rules and the approved budgets. 4. To set the Company’s organization chart, authority of the Management, the remuneration policy and salary structure of the Company for Board consideration. 5. To assign one or more specific persons to act on behalf of the Executive Committee, or to revoke such assignments as the Executive Committee may consider appropriate. 6. To perform any other tasks, as assigned by the Board of Directors. The above-stated scope of authority would not apply where a vested interest or a conflict of interest concerning a related-party transaction under SEC regulations is at issue. In such a case, the Executive Committee would need to refer the matter to the Board of Director or to a Shareholders’s Meeting, as the case may be, for consideration and approval, unless appropriate pre-set permission is already in evidence. Audit Committee As of December 31, 2010, Audit Committee consists of 3 members as follows: 1. Mr. Sudhipan Charumani Audit Committee Chairman who has knowledge and experiences to audit Company’s financial statements 2. Mr. Peter John Edmondson Audit Committee Member 3. Mrs. Punnee Worawuthichongsathit Audit Committee Member who has knowledge, and experiences to audit Company’s financial statements The Audit Committee Charter endows the Audit Committee with the following duties and responsibilities to the Company’s Board of Directors: 1. To review that the Company’s financial reports are correct and sufficient; 2. To review that the Company has appropriate and efficient internal control and internal audit system; to determine an internal audit unit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of an internal audit unit or any other unit in charge of an internal audit; 3. To review that the Company complies with laws relating to securities and securities markets, as well as with SET’s rules and regulations and any other laws relating to the Company’s business; 4. To consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year; 5. To review the Connected Transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Exchange’s regulations, and are reasonable and for the highest benefit of the Company; 6. To prepare, and to disclose in the Company’s annual report, an audit committee’s report which must be signed by the audit committee’s chairman and consist of at least the following information; - An opinion on the accuracy, completeness and creditability of the Company’s financial

report, - An opinion on the adequacy of the Company’s internal control system, - An opinion on the compliance with the law on securities and exchange, the Exchange’s

regulations, or the laws relating to the Company’s business, - An opinion on the suitability of an auditor, - An opinion on the transactions that may lead to conflicts of interests, - The number of the audit committee meeting, and the attendance of such meeting by each

committee member, - An opinion or overview comment received by the audit committee from its performance of

duties in accordance with the charter, and - Other transactions which, according to the audit committee’s opinion, should be know to

the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s board of directors; and


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7. To report the Audit Committee’s performance to the Company’s Board of Directors at least on a quarterly basis; 8. To perform any other work that the Audit Committee agrees to, as may be assigned by the Company’s Board of Directors. The Audit Committee has 3 years period and may be re-elected to assume the same position. Corporate Governance Committee As of December 31, 2010, the Corporate Governance Committee consists of 3 members as follows: 1. Mr. Somphong Wanapha Corporate Governance Chairman 2. Mrs. Punnee Worawuthichongsathit Corporate Governance Member 3. Ms. Pattama Horrungruang Corporate Governance Member The Corporate Governance Committee shall consider and propose practical guidelines and advices of Good Corporate Governance according to the SET and SEC’s regulations including other institutions. The Company has set the Corporate Governance Policies including business ethics according to the advices from the Corporate Governance Committee who has considered, edited and proposed to the Board of Directors. The company’s Corporate Governance Policy and Business Ethics has been approved by The Board of Directors and become effective already. The Corporate Governance Committee has 3 years period and may be re-elected to assume the same position. Nomination and Remuneration Committee As of December 31, 2010, the Nomination and Remuneration Committee consists of 3 members as follows: 1. Mr. Sudhipan Charumani Nomination and Remuneration Committee Chairman 2. Mr. Chavalit Sethameteekul Nomination and Remuneration Committee Member 3. Mr. Thongchai Anankusri Nomination and Remuneration Committee Member The Nomination and Remuneration Committee handles preliminary selections, as well as to compile relevant data, of suitable candidates for Board’s formal consideration. A short list of suitable Director candidates, together with relevant background information, would be submitted in advance by current directors and/or shareholders for formal consideration in the Board meeting. Such a meeting would first concentrate on the Company’s specific requirements, before proceeding to discuss each candidate in depth on issues of reputation, experience, reliability, known ability and vision, as well as other relevant aspects. Those chosen by the Board would have their names proposed to the forthcoming Shareholders’ Meeting for consideration and approval. The Nomination and Remuneration Committee shall determine the compensation of the Board of Directors and Directors in Sub-Committees for the Board of Directors and the Annual General Meeting of Shareholder’s consideration and approval. Such compensation proposal would be based on the general market trend, information obtained from the Stock Exchange of Thailand, individual responsibility levels and work results, as well as on the Company’s actual performance and prevailing financial strength. The Nomination and Remuneration Committee has 3 years period and may be re-elected to assume the same position. Company Management The Company Management consists of The President & CEO has the responsibility in assigning each management member with appropriate duties and authority in order to enable the Company to implement its policy and strategies, together with its business plans, in an efficiently effective manner and in accordance with the targets and budgets as determined or approved by the Board and/or the Executive Committee.


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Remuneration for Directors and Management 1. Total remuneration for the 10 Directors in 2010 was Baht XX,XXX,XXX (Baht 15,795,000 in 2009), being Board and Committee Meeting Fees and being Compensations, as per following individual details:

2. Total remuneration for the Company’s Executives and Management by way of salaries, bonuses, and provident fund contributions for 19 persons in 2010 was Baht XXX.XX million.

กรรมการ ตำแหน่ง ค่าตอบแทน(บาท) เบี้ยประชุม ค่าตอบแทน รวม กรรมการ 1.นายชวลิตเศรษฐเมธีกุล ประธานกรรมการ/กรรมการสรรหาและ

พิจารณาผลตอบแทน

2.นายธงชัยศรีสมบูรณานนท์ กรรมการ/ประธานกรรมการบริหาร/

กรรมการสรรหาและพิจารณาผลตอบแทน

3.นายสุทธิพันธุ์จารุมณี กรรมการอิสระ/ประธานกรรมการตรวจสอบ/

ประธานกรรมการสรรหาและพิจารณา

ผลตอบแทน

4.นายเดวิดริชาร์ดนาร์โดน กรรมการ/กรรมการบริหาร

5.นายปีเตอร์จอห์นเอ็ดมันสัน กรรมการอิสระ/กรรมการตรวจสอบ

6.นางพรรณีวรวุฒิจงสถิต กรรมการอิสระ/กรรมการตรวจสอบ/

กรรมการบรรษัทภิบาล

7.นายวิวัฒน์จิรัฐติกาลสกุล กรรมการ/กรรมการบริหาร

8.นางสาวปัทมาหอรุ่งเรือง กรรมการ/กรรมการบริหาร/

กรรมการบรรษัทภิบาล

9.นายสมพงษ์วนาภา กรรมการ/ประธานกรรมการบรรษัทภิบาล

10.นายวิกิจหอรุ่งเรือง กรรมการ

รวม


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Good Corporate Governance

Hemaraj Land and Development Plc., subject to the awareness on the importance of good corporate governance, have thus adopted Good Corporate Governance of the Stock Exchange of Thailand (SET) as practical guidelines and tried to continuously improve those perfect practices to achieve good standards, efficiency and transparency in our business operation and enhance confidence to all shareholders, investors and other related parties based on important contents as follows:- Rights of the Shareholders The company have well realized to safeguard rights and benefits of the shareholders by effectively operating our business to build permanent growth and provide suitable remuneration to the shareholders including to encourage the shareholders to exercise their rights in the Shareholders’ Meeting and shall not infringe nor prejudice the shareholders’ rights whatsoever. All shareholders shall be invited to join in Annual Ordinary Meeting or Extraordinary Meeting (if any) as the company shall serve invitation letter and related agendas for consideration prior to all Meetings. The shareholders, as the investors are entitled to vote according to the number of shares holding and each of them shall exercise all votes to conclude the resolution and maintain their benefits and comment toward important decisions, such as, profit allocation and dividend payment, appointment of auditor, prescription of compensation and election the Board of Directors, amendment of Articles of Association and increasing of capital, etc. All shareholders are entitled to receive correct, open, sufficient and update information. The shareholder can appoint any person as its proxy to join in the meeting as deemed appropriate or may appoint Chairman of Audit Committee who is an independent director according to the instruction of the Securities and Exchange Commission (SEC). In such meeting, the company shall provide the shareholders an equal opportunity to inquire company-related business as deemed reasonable. It is the duties and responsibilities of Board of Directors and related senior Managements to join in each Shareholders’Meeting to jointly clarify related details of the agendas and answer all inquiries of the shareholders. In case of it is necessary and unable to join in the meeting, notice must be given to the Chairman of the Board or Office of the Secretary of the company in advance. Equitable treatment of shareholders The company have emphasized and overseen to maintain equitable treatment of shareholders. To ensure a clear and transparent process while enabling the Company to tangibly observe corporate governance, allowing minor shareholders to propose in advance the agenda items for the AGM and nominate directors, criteria were established for proposals made by minor shareholders to identify items that are truly beneficial to the Company and choose qualified individuals as directors who efficiently perform their roles for the best interest of the Company and stakeholders and also through the Company’s web site. All shareholders shall be invited to join in all Ordinary or Extraordinary Meetings. The company shall serve the shareholders invitation letter and related agendas for consideration in advance especially before the Ordinary Shareholders’ Meeting which shall be held once a year within April. The company shall not add any important agenda without advance notice to the shareholders to enable the shareholders to study supporting information before making any decision. Any shareholder unable to personally join in the meeting, the company shall deliver Power of Attorney according to the form prescribed by Ministry of Commerce to such shareholder along with invitation letter to enable such shareholder to assign its proxy to join in the meeting on its behalf. In this regard, the company shall propose name and information of at least one independent director of the company as additional option of the shareholder. The shareholder is entitled to vote according to the number of share holding and each of them must exercise all votes to conclude resolution and maintain benefit of the investor for transparency and traceability. For voting in important agenda, the company shall give voting cards equal to the number of


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agendas to the shareholders upon registration. After the question is satisfactorily answered, the shareholder shall vote on the card of such agenda, the cards shall be gathered and counted by the independent person for transparency. The company have correctly, adequately and clearly recorded Minutes of Meeting for material content and after submitting to SET and SEC sent to the shareholder after 14 days of the Meeting and further publicized such minutes on company’s website. The company have prescribed written guidelines to maintain and safeguard internal information related to the good corporate governance for fairness to the shareholders and to prevent the directors, employees and related persons, such as, spouse, under legal age child and nominee from using internal information which is an important content on changing of share price and still undisclosed to the public to sell and purchase share. In this regard, pursuant to the Securities and Exchange Act, B.E. 2535, the directors and Managements must report the possession of company’s securities upon first admission and further report all securities transaction to SEC within 3 working days and the company shall compile such report as agendas to regularly inform the Board of Directors’ Meeting. Roles of the Stakeholders The company have realized to the rights of all groups of stakeholders, i.e. from shareholder, employee, customer, debtor, supplier and competitor, environment and society and government agencies to receive appropriate care of rights and free from any infringement according to related laws or agreements by prescribing rules on treatment of stakeholders in each group as follows:-

Shareholders Disclosure of important information both related to financial and non-financial to the shareholder correctly, adequately, equally and in time via several channels, such as, company’s website, newspaper advertising or written letter, etc.

Employees The company value every of its employees with its consideration that they are worthy resource without discrimination, providing a good safety working environment, provide them to know policy and their entitled welfare by producing employee manual to prescribe working rules and regulations, group health insurance manual, group life insurance, life provident fund, etc.. Moreover, it also emphasizes on development of knowledge, ability and skill of employee by providing of a budget for them to attend annually training in order to enhance their efficiency and develop their skill, expertise and ability to perform their duties effectively.

Customers Concern on the customer’s satisfaction and strictly comply with contract or agreed conditions and attentively solve all problems claimed or suggested by the customers.

Creditor, Supplier and Competitor Comply with good competition rules, such as, comply with terms and conditions of the contract, do not take any trading advantage nor exploit benefit by giving false or untrue information nor use dishonest method to destroy the competitor.

Environment and Society The company have environmental policy to develop industrial estate which is the company’s major business simultaneously with environmental conservation according to the environmental management standard ISO 14001. In social respect, the company have policy to promote participation with other social organizations, communities and neighboring establishments in education, safety, fire prevention and others, such as, to establish scholarship project to the community schools, company visitation program and establishment of security center and fire prevention for group of companies.

Government agencies Comply with related laws, rules, regulations and official stipulations including also good cooperation with government agencies. The company emphasized to strictly comply with environmental laws and standards by prescribing all managements and employees to strictly observe and perform their duties according to the rules, regulations, laws, policies, requirements and standards related to the quality, safety, occupational health and


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environment. In addition, the company also publicized to build knowledge and understanding on procedures and precautions for correct practice, free from danger to the health, property and environment . Moreover, the company also developed, reviewed and corrected thereof, strongly and continuously shared the responsibility to the safety, occupational health and environment of the society, using natural resources for optimal benefit with awareness to the important of environment and safety of related stakeholders including to promote social activities to conserve environment and develop living quality permanently. Moreover, the Company provides channel to report any misconduct directly to the board of directors through the Company’s website or any issue can be sent directly as follows: 1. Direct submission to the Company Secretary’s office 1.1 Telephone number 02-719-9555 1.2 Facsimile number 02-719-95646-47 1.3 E-mail : [email protected] 2. Direct E-mail the Chairman of the Audit Committee E-mail : [email protected] Disclosure of Information and Transparency The company have disclosed financial information and other information related to business and operating result in correct, sufficient, regular, update and credible manner via the Stock Exchange in the Annual Information Form (Form 56-1) and Annual Report (56-2) and on www.hemaraj.com and [email protected] both in update Thai and English version to enable the investor to clearly know and/or study about the company. In addition, the senior management also held seminar between senior management and investment facilitator, analyst and economic reporter both domestic and abroad regularly and invite all interesting parties from several important sectors to visit industrial estate of the company. In addition, the company also established “Investor Relation” unit to directly publicize information beneficial to the investors, shareholders, related parties, general publics, financial institute and securities analysts. Important information of the company is consisted of financial and non-financial information, particularly, the financial statements of the company has been reviewed/audited from the auditor that it is correct in according to the general certified accounting principles and duly approved from the Audit Committee/Board of Directors before disclosing to the shareholders. The Board of Directors have disclosed their responsibilities toward such financial report in the annual report. For the disclosure of non-financial information, the company have disclosed interrelated items, discussion of management and risk management including good corporate governance report in annual report and Form 56-1 and company’s website. The company have disclosed details of roles and responsibilities of Board of Director, sub-committee, frequency of the Meeting and frequency of participation of each director, comment of the Board on business operation and also disclosed compensation payment policy for directors and senior managements in the annual disclosure form (form 56-1) and annual report of the company. Responsibilities of the Board of Directors Structure of the Board of Directors The Board of Directors can be divided into groups characterized by qualification prescribe in regulation of SET and SEC as follows: - Directors who are Management groups - Directors who are not Managment - Directors who are independent. At least 1/3, but not less than 3 members, of the Board of Directors must be independent directors. Presently, the Company has 10 directors, consisted of the directors who are not Management 6 persons of which 4 persons are independent directors. The Board of Directors shall assume their positions for 3 years whereby 1/3 directors shall be resigned in every Annual Ordinary Meetings. In case it is undividable, the resigned director must be as close to 1/3 and such resigned director may be re-elect to assume the same position.


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The Company have prescribed qualification of independent director who have well knowledge in Finance, Economic, Accounting, public administration and other field of businesses suitable as standard factors to safeguard benefit of the shareholders and others. Additionally, to have qualification according to such prescribed in regulation of SET and SEC. The Company have policy to allow the director to assume as director in other companies as deemed appropriate. In case of being the director in the same business, information about position of each director must be disclosed to the shareholders. The Company have policy to allow the director to assume as director in the listed companies not exceed 5 (five) companies. And in case of being the director in the same business, the information about position of each director must be disclosed to the shareholders. The Company do not allow Chief Executive Officer or senior management to assume the same position in other companies at too high degree until resulting inefficient performance. In case of being the chief executive officer or senior management in other companies in the same business, information about position of each director must be disclosed to the shareholders. The Company have clearly separated Chairman of the Board, the Chief Executive Officer and their duties. The Company has appointed a Company Secretary to provide advices on legal aspect, rules and regulations of SEC, SET and other laws which should be known and coordinate to comply with resolution of the Board and oversee activities of the Board.

Roles and Responsibilities of the Board of Directors The roles and responsibilities of the Board of Directors are as prescribed by the relevant laws, rules and regulations while the roles and responsibilities of the committees are also clearly defined. This allows the Board and the committees to review and provide appropriate advice within the scope of its roles and responsibilities. The roles and responsibilities of the Company’s Board of Directors are as follows: - The Company’s directors must be knowledgeable, capable and experienced. They must also have an interest in the business of the company in which they are directors, as well as having honesty and integrity in conducting such businesses. - The Directors must perform their duties with honesty and care according to the relevant laws, The SET’s and SEC’s roles and regulation as well as with good corporate governance principles. They must also protect the rights of the Company, in addition to being accountable to the Company’s shareholders. - The Board of Directors’ prime responsibility is to formulate corporate vision, overall policies and major strategies with ability, integrity and care, so as to achieve continuous and long lasting benefits for the Shareholders. This responsibility includes effective control and supervision of the Management to assure that Board instructions are put into practice with efficiency and in line with relevant rules of law and supervising authorities’ regulations, with the Company’s own requirements, as well as with good corporate governance principles. The Board of Directors may appoint or designate any committees or others to perform their roles on behalf of the Board of Directors as well as cancel or change or overrule the roles under their consideration. - The Board of Directors must manage to have effective internal control system and internal audit system.

Sub-committee The Board of Directors can set committees to assist in the study and screening of some specific tasks on behalf of the board. The qualifications and scope of work of each sub-committee will be defined. The company have therefore appointed sub-committees as follows: - - The Executive Committee, presently consisted of 4 directors, has been assigned by the Board of Directors to help formulate the Company’s operation policy and strategies, and to supervise and ensure that such approved policy and strategies are followed through by the Management with efficiency and safety, so that the Company successfully attains its desired goals. - Audit Committee, having duties and responsibilities to the Board of Directors, as follows:- 1. To review that the Company’s financial reports are correct and sufficient; 2. To review that the Company has appropriate and efficient internal control and internal audit systems;


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3. To review that the Company complies with laws relating to securities and securities markets, as well as with SET’s rules and regulations and any other laws relating to the Company’s business; 4. To consider, select and propose the appointment of the Company’s statutory auditor and to propose his professional fees; 5. To consider whether the Company discloses correct and adequate information with regards to third party transactions or any transactions with a conflict-of-interest tendency; 6. To include in the Company’s annual report the Audit Committee’s own review result, expressing opinion on the Company’s internal control system, as well as on the preparatory procedure and data disclosure of the financial statements. This review report shall be signed by the audit committee chairman; 7. To report the Audit Committee’s performance to the Company’s Board of Directors at least on a quarterly basis; 8. To participate in the appointment, removal, work assessment and remuneration granting of the internal auditor; and 9. To perform any other work that the Audit Committee agrees to, as may be assigned by the Company’s Board of Directors. - The Nomination and Remuneration Committee, consisted of 3 directors, having duties and responsibilities as follows: - As Nomination role, to assist in identifying qualified individuals to be nominated as a Director and Chief Executive Officer based on appropriate criterion for approval by the Company’s Board of Directors and/or the General Meeting of Shareholders, as the case may be. As Remuneration role, to study, evaluate and propose the remuneration of Board of Directors and to propose to be approved by the Annual General Shareholders Meeting. - The Corporate Governance Committee, consisted of 3 directors, to consider and propose practical guidelines and advices of good corporate governance according to the SET and SEC’s regulations to Board of Directors.

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

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

Conflict of Interest: The Company’s Board of Directors and Management have been acknowledged and realized the importance of legal and ethical conflict of interest and related transactions guidelines. The company has disclosed, in accordance with the regulations of Stock Exchange of Thailand, such information, detail and reason/necessity, if any in the company’s Annual Report and the 56-1 Form. The Company further uses the Audit Committee, internal auditors, external auditors, and external lawyers to review compliance. Additionally, in case of any normal businesses or supporting normal business transactions in the future, therefore, the Board of Directors have approved in principle that the management could approve those above transactions, which must be a transaction with the same commercial terms as those an the company would agree with any unrelated counterparty under the similar circumstances, on the basis of commercial negotiation and without any dependent interest resulted from the status of the director, executive or related person according to the Securities and Exchange Act (No.4) B.E. 2551.

Internal controlling system and internal audit: The Company is aware of the inportance of internal control system and establishes the Company’s internal control system to be applied adequately and appropriately for operations in order to protect any potential damages to the Company. The audit committee is responsible to review that the Company has appropriate and efficient internal control and internal audit systems. Through its basic quarterly discussions with the outsourced professional internal Auditor, the experienced External Auditor, and appropriate Management representatives, the Audit Committee, whose members are also well acquainted with accounting and financial issues, is confident that the Company, together with its subsidiaries, are equipped with a dependable system of internal control, of which the outsourced internal audit function constitutes an important integral part. Such review has been reported for Board acknowledgement subsequent to each quarterly meeting of the Audit Committee.


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Risk Management The Board of directors gives high priority to the risk management by assign the Company to consistently evaluate company risk factors and analyze the impacts on those risks and implement the measures to counter those risks and regularly report to the Board of directors.

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

The Board of Directors’ Meeting The Board shall prescribe Meeting date in advance which shall be held at least 4 times a year to certify quarterly financial statement of the company. In this regard, the Audit Committee shall review the accuracy and completeness of information disclosed in financial statements and further report to the Board of Directors on quarterly basis. In addition to those above mentioned Meetings, the company also holds the meetings to consider business operations as deemed necessary including in urgent matters if necessary. In each meeting, the Chairman of the Board and Chief Executive Officer shall jointly consider several matters to be included in the agendas. For other matters, each director can propose the matter as he deemed important and necessary to the meeting. The company shall serve invitation letter, agendas and supporting details to the Board for consideration in advance before each meeting. For matter of nondisclosure agendas shall be discussed in the Meeting. The Chairman of Board of Directors shall allocate times for the Management to propose its concerned matter and the directors shall sufficiently, carefully and thoroughly debate all problems and allow the Board to carefully discreet all issues included in the Meeting. The Board shall invite senior executives to join in the Meeting to provide information, details and additional information related to those problems to enable the Meeting to know all adequate information. The company allows non-management independent directors to hold the meeting to jointly discuss all possible issues without participation of the Management. During the period from January to December 2010, the Company held 5 Board of Directors’ Meetings of both regular and emergency natures which most Board of Directors attended the Meetings except on urgent business or on the oversea business trips. Name of Director Board of Audit Nomination and Good Corporate Directors Committee Remuneration Governance Committee Committee

Mr. Chavalit Sethameteekul 5/5 - 1/1 - Mr. Thongchai Srisomburananonta 5/5 - 1/1 - Mr. David Richard Nardone 5/5 - - - Mr. Sudhipan Charumani 5/5 4/4 1/1 - Mr. Peter John Edmondson 5/5 4/4 - - Mrs. Punnee Worawuthichongsathit 5/5 4/4 - 2/2 Mr. Vivat Jiratikarnsakul 5/5 - - - Ms. Pattama Horrungruang 5/5 - - 2/2 Mr. Somphong Wanapha 5/5 - - 2/2 Mr. Vikit Horrungruang 5/5 - - -

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


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In order to prepare the personnel who can take action on behalf of the manager director/president of operating staff who are unable to perform the duty or seek out of its terms including minimize the risk or impact of the discontinuance to the company’s management performance, the Company has prepare the plan to inherit the position including with the setting up the training, and knowledge and capacity development for the director to have understanding, experiences and readiness to execute the work by the person who has appropriate qualification as appointed to be selected in such position.

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

Directors and Managements Development The Board of Directors has policy to promote training and education to the directors, audit committee, management, secretary and employee of the company about corporate governance, business ethics and compliance with quality management system standard ISO 9001:2000 to continuously improve their performances. The company shall, especially, promote the directors and secretary to attend several training courses of Institute of Directors. The company will provide director manual that included all important information about nature and business operation of the company for new director to study and as guidelines for proper implementation.


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The Board of Directors of Hemaraj Land and Development Public Company Limited realizes its role and responsibility as the Directors of a listed company in supervising the Company to have the Financial Reports of year 2010 to present sufficient in materiality, relevant and transparent financial and accounting information. Appropriate accounting policies have been put in place and adhered to on a consistent basis according to the generally accepted accounting principle while due consideration has been placed on the process of preparing the Company’s and the Consolidated fiscal year 2010 financial statements including other information that have been included in the annual report of this year. The Audit Committee, who is appointed by the Company’s Board of Directors, comprising of independent directors fully qualified in accordance with the requirement of the Stock Exchange of Thailand have reviewed and ensure accuracy and sufficiency of the financial report including accurate and complete disclosure of connected transactions or transactions with possible conflict of interests. Also, to have sufficient and effective internal control and internal audit system, risk management and appropriate corporate governance and to be compliance with the requirement of the Stock Exchange of Thailand and relevant rules and regulations. The Company’s Board of Directors is of the opinion that the financial statements and financial reports for the year 2010 of the Company and the Subsidiaries, which have been reviewed by the Audit Committee in conjunction with the management, and audited by the Company’s auditors, reflect accurate financial position, operational results and cash flow status as appropriate in material aspect in accordance with consistent appropriate accounting policies and with generally accepted accounting standards, according to relevant rules and regulations.

(Mr.David Richard Nardone) (Mr.Chavalit Sethameteekul) President & CEO Chairman of the Board of Directors

Report on Responsibilities of the Board of Directors Towards the Financial Report of the year 2010


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The Audit Committee of Hemaraj Land And Development Public Company Limited has the following independent non-executive directors as its members: 1) Mr. Sudhipan Charumani Audit Committee Chairman 2) Mr. Peter J. Edmondson Audit Committee Member 3) Mrs. Punnee Worawuthichongsathit Audit Committee Member The Audit Committee members are qualified in accordance with the rules and regulations for Audit Committees, as issued by the Securities and Exchange Commission and the Stock Exchange of Thailand. The Audit Committee has fulfilled its responsibilities according to the scope and duties assigned by the Board of Directors in compliance with its Charter and official regulations. Four formal Audit Committee meetings were held in respect of its 2010 financial year duties. By invitation, such meetings were also attended by the internal and external auditors, as well as by members of the company management, inclusive of the Chief Financial Officer, with occasional participations by the Chief Executive Officer and the Company’s external legal council upon requests. Moreover, the Audit Committee also arranged time to meet with the internal and external auditors without executives of the Company being present. Two such meetings were officially arranged at mid-year and at year-end respectively, with informal consultations additionally held as deemed necessary. The activities of the Audit Committee covered the following areas:

1. Review of the interim and annual financial statements of 2010 to verify that the statements were accurate and complete, and that relevant supporting financial information was disclosed. The review was conducted with input from the management and the external auditors. The Audit Committee and external auditors agreed that the financial statements were correct and had been prepared in accordance with generally accepted accounting principles. It should be hereby mentioned that as a Thai listed public company, the Company at 2010 year-end was in the process of assessing the impact on itself from the Federation of Accounting Professionals of Thailand’s new sets of accounting standards, which would be applied from the 2011 financial year onwards, in conjunction with international practice.

2. Review of the internal control system in order to verify that the system was appropriate and effective in meeting its objectives. The review was conducted with input from the internal auditors, coupled with discussions with the external auditors, which did not reveal any significant weaknesses or deficiencies. The Audit Committee and both the internal and external auditors are of the view that the prevailing internal control system meets the requirements of the SET and SEC, and are adequate to safeguard assets and provide sufficient disclosure of information.

3. Review of the internal audit function to ensure its effectiveness and independence. The internal audit function is conducted by a reputable outsourced audit firm. Work is performed in accordance with a program jointly studied and approved on a continuing basis by the Audit Committee, together with the management . The internal auditors report their findings to both the Audit Committee and the management on a quarterly basis, and the Audit Committee believes that the internal audit function of the Company is appropriate, effective and independent.

4. Review of compliance with the Securities and Exchange Acts, other relevant laws and SEC-SET regulations, as well as the Company’s own rules and obligations to external parties. This review, which was performed by the Audit Committee members, with contracted assistance from the internal auditors, did not find any significant instances of non-compliance.

5. Review of, and giving opinion on, connected transactions and transactions potentially giving rise to conflicts of interest, together with the aspect of information disclosure on such transactions in compliance with the regulations of the SET and SEC. The Audit Committee and both the internal and external auditors were of the opinion that such transactions had fully and appropriately been disclosed in the financial statements and notes thereto, and were reasonable, of a normal business nature, as well as being beneficial to the Company.

Audit Committee Report for 2010


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6 Considering the appointment of external auditors and their remuneration for the year 2011, and recommending such to the Board of Directors for submission to the Shareholders’ Annual General Meeting. Having considered past performance, independence and remuneration issues, the Audit Committee was satisfied with audit personnel of the present external audit firm, A.M.T. & Associates, on all counts. The Audit Committee thus recommended that the 2010-external-auditor Mrs. Natsarak Sarochanunjeen (Certified Public Accountant registration number 4563), or Professor Kesree Narongdej (Certified Public Accountant registration number 76) or Mr.Sumit Khuapiboon (Certified Public Accountant registration number 4885), all of A.M.T. & Associates, be appointed the Company’s external auditor for the financial year ending 31st December 2011 at a remuneration of Bath 1,240,000. This represented a Baht 110,000 increment from the 2009-2010 levels, due largely to increased consolidation work volume resulting from the acquisition of 3 new subsidiary companies. The Audit Committee also agreed to recommend the appointment of Mrs. Natsarak Sarochanunjeen or Professor Kesree Narongdej or Mr.Sumit Khuapiboon or Mr.Chaiyuth Angsuwithaya (Certified Public Accountant registration number 3885) or Mr. Somchai Kanjanawongpaisarn (Certified Public Accountant registration number 3428), each of A.M.T. & Associates, to serve as the external auditor of the Company’s subsidiaries for the 2011 financial year at a remuneration of Baht 3,400,000. This denoted a Baht 700,000 increase from the 2009-2010 levels, due mostly to the addition of the 3 newly acquired subsidiaries. The present and proposed external auditors have no family, financial interest, employment, investment or business relationship with the Company or any of its subsidiaries, other than in the normal course of audit business. In summary, the Audit Committee, in the course of discharging its Chartered responsibilities as assigned by the Board of Directors, found that the Company had presented its financial and operational information in a true and fair manner, had appropriate and effective internal controls and audit and risk management, had complied with laws, regulations and obligations, and had disclosed connected transactions correctly. Moreover, the Company continued to emphasize good corporate governance principles, and received a top-classification score in the National CG Committee’s 2010-reports in respect of its AGM conducting, as well as and its comparative CG standing, amongst Thai listed companies.

Sudhipan Charumani

Chairman of the Audit Committee 12th March 2011


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To the Shareholders of Hemaraj Land and Development Public Company Limited I have audited the consolidated balance sheets of Hemaraj Land and Development Public Company Limited and its subsidiaries as of December 31, 2010 and 2009, and the related consolidated statements of changes in shareholders’ equity, income and cash flows for the years then ended. I have also audited the financial statements for the same periods of Hemaraj Land and Development Public Company Limited. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. As described in note 10 to the financial statements, I have not audited the financial statements of two subsidiaries (on October 1, 2010, the Company acquired additional investment from 25% to 100%) which were included in the consolidated financial statements for the year ended December 31, 2010. The financial statements for those two subsidiaries reflect total assets as of December 31, 2010 of Baht 1,499.92 million, and total revenues from October 1, 2010 to December 31, 2010 of Baht 29.42 million. The financial statements of those subsidiaries have been audited by other auditor whose reports have been furnished to me, and my report, insofar as it relates to the amounts for those subsidiaries included in the consolidated financial statements for the year ended December 31, 2010, are based solely on the reports of the said auditor. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion. Based on my audits and other auditor’s report as mentioned in the first paragraph, in my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hemaraj Land and Development Public Company Limited and its subsidiaries and of Hemaraj Land and Development Public Company Limited as of December 31, 2010 and 2009, the results of their operations, and cash flows for the years then ended in conformity with generally accepted accounting principles. Without qualifying opinion to the above financial statements, I draw attention on the matter as discussed in note10.2 to financial statements that on October 1, 2010, the Company acquired additional investment in two associates from 25% to 100% resulting in changing those two associates to subsidiaries. As a result, the Company’s consolidated financial statements have already included those two subsidiaries’ balance sheets as of December 31, 2010 and statements of income from October 1, 2010 to December 31, 2010. On October 1, 2010, the Company’s payment of Baht 763.69 million for the additional investment acquisition of those two subsidiaries resulted in a gain from a bargain purchase presenting a profit of Baht 145.41 million in the consolidated statements of income for the year ended December 31, 2010.

(Natsarak Sarochanunjeen) C.P.A (THAILAND) Registration No. 4563 A.M.T. & ASSOCIATES Bangkok, Thailand February 28, 2011

Independent Certified Public Accountants’ Report


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Balance SheetsHemaraj Land and Development Public Company Limited and Its SubsidiariesAs at December 31, 2010 and 2009

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

BAHT

CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS ASSETS NOTE 2010 2009 2010 2009

CURRENT ASSETS

Cash and cash equivalents 6 3,516,614,394.23 909,430,084.97 3,001,237,078.14 525,127,783.23

Temporary investments -

marketable securities, net 755,798.96 600,342.36 755,798.96 600,342.36

Trade account receivables

Related parties, net 7 70,620.40 2,286,088.44 34,258,661.43 29,175,393.14

Other parties, net 7 195,246,817.85 132,980,476.01 17,634,387.72 9,268,004.19

Unbilled completed work 7 365,485,061.27 215,482,928.21 78,960,609.00 63,380,832.09

Short - term loans and advance

to related parties 5 5,629,016.44 5,627,942.47 1,033,768,366.76 724,452,492.75

Inventory 11,040,000.00 11,520,000.00 11,040,000.00 11,520,000.00

Cost of real estate developments, net 9, 28 and 29 7,046,528,352.61 6,371,980,818.17 1,486,393,762.01 1,884,398,188.52

Other current assets

Revenue department receivable 41,282,628.25 2,171,777.95 31,045,720.45 -

Interest receivables 456,968.67 4,340,592.42 456,968.67 4,340,592.42

Others 18,754,961.58 28,019,473.20 6,192,868.10 8,067,948.54

Total Current Assets 11,201,864,620.26 7,684,440,524.20 5,701,744,221.24 3,260,331,577.24

NON - CURRENT ASSETS

Deposit at financial institution

with commitment 6 and 28 766,176,577.64 2,059,901,000.00 766,176,577.64 2,059,901,000.00

Investments in subsidiaries 5, 10 and 28 - - 3,935,034,591.50 2,931,595,206.50

Investments in associates 2.2, 5, 10, 28 and 29 3,479,385,280.15 763,408,020.52 2,988,869,244.04 640,369,244.04

Other long - term investments

Related parties, net 11 1,500,000.00 1,500,000.00 - -

Other parties, net 11, 28 and 29 142,783,002.50 142,783,002.50 142,500,002.50 142,500,002.50

Assets for rent, net 12 and 28 2,021,019,844.15 2,077,394,869.55 85,720,072.77 91,324,397.16

Property, plant and equipment, net 13 and 28 574,087,219.51 440,117,205.76 91,494,979.75 94,123,951.27

Other non - current assets

Leasehold land and land held

for commercial purposes, net 14 and 28 314,936,500.00 314,936,500.00 314,936,500.00 314,936,500.00

Sinking fund, net 15 and 29 80,309,310.50 82,359,744.69 19,683,721.98 21,214,259.95

Advance payment for right 109,890,841.22 106,937,302.50 109,890,841.22 106,937,302.50

Others, net 23,436,191.39 6,891,466.15 20,277,429.05 2,935,055.66

Total Non - Current Assets 7,513,524,767.06 5,996,229,111.67 8,474,583,960.45 6,405,836,919.58

TOTAL ASSETS 18,715,389,387.32 13,680,669,635.87 14,176,328,181.69 9,666,168,496.82


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BAHT

CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS LIABILITIES AND SHAREHOLDERS’ EQUITY

NOTE 2010 2009 2010 2009

CURRENT LIABILITIES

Short-term loans from financial

institutions 16 - 450,000,000.00 - 450,000,000.00

Trade account payables

Related parties 4,073,977.41 2,921,314.93 893,241.35 6,991,431.36

Other parties 209,246,369.23 216,492,490.17 11,478,466.91 9,479,728.02

Current portion of long - term loans 20 and 28 656,428,432.70 719,483,965.00 353,750,750.00 389,805,500.00

Current portion of long -

term loans by scheduled transfer 20 and 28 93,505,125.00 311,641,440.00 17,343,625.00 244,885,250.00


from related parties 5 - 267,394,103.76 - 237,394,103.76

Short - term loans from other

parties and other persons 17 and 28 30,000,000.00 450,000,000.00 - 420,000,000.00

Other current liabilities

Unearned income and income

received in advance 8 861,882,623.30 599,683,192.77 11,704,688.88 20,178,712.02

Accrued interest expenses 65,027,324.08 5,204,181.87 64,841,907.67 4,895,318.17

Accrued expenses 49,174,322.08 29,329,504.66 28,697,289.89 18,032,693.99

Other account payables 5,276,024.15 6,815,234.01 1,178,616.39 1,155,885.37

Accrued income tax 26 48,511,027.84 62,921,742.41 - 44,636,676.76

Revenue department payable 19,955,087.37 12,562,607.03 10,920,832.41 6,872,793.47

Accrued specific business tax

and transfer fee 18,864,315.28 - 4,602,959.37 -

Dividend payable 22 8,143,925.76 6,425,129.06 8,143,684.77 6,424,825.22

Others 57,270,784.05 24,164,497.25 9,103,066.41 10,814,358.09

Total Current Liabilities 2,127,359,338.25 3,165,039,402.92 522,659,129.05 1,871,567,276.23

NON - CURRENT LIABILITIES

Debentures 18 6,000,000,000.00 - 6,000,000,000.00 -

Other long - term loans, net 20 and 28 1,230,982,991.68 1,859,139,214.38 975,000,000.00 1,135,114,750.00

Long - term loans and advance

from related party 5 and 19 - - 988,693,397.33 1,058,559,125.42

Other non - current liabilities

Retention payables 71,274,799.45 78,731,424.74 20,352,439.61 27,869,881.94

Guarantee received 120,712,702.01 96,831,540.63 3,529,000.00 5,169,050.00

Deferred leasehold right income

Related party, net 5 - - 55,879,791.88 58,363,791.84

Other parties, net 15,049,613.35 16,987,857.64 - -

Others 11,379,029.85 5,353,007.81 9,766,447.31 2,705,526.11

Total Non - Current Liabilities 7,449,399,136.34 2,057,043,045.20 8,053,221,076.13 2,287,782,125.31

TOTAL LIABILITIES 9,576,758,474.59 5,222,082,448.12 8,575,880,205.18 4,159,349,401.54

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

As at December 31, 2010 and 2009



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Balance Sheets (Continued)Hemaraj Land and Development Public Company Limited and Its SubsidiariesAs at December 31, 2010 and 2009

BAHT

CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS LIABILITIES AND SHAREHOLDERS’ EQUITY

NOTE 2010 2009 2010 2009

SHAREHOLDERS’ EQUITY

Share capital - Baht 0.40 par value

Authorized share capital

Common stocks

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

Issued and paid-up share capital

Common stocks

9,705,186,191 shares 3,882,074,476.40 3,882,074,476.40 3,882,074,476.40 3,882,074,476.40

Premium (discount) on

common stocks, net 438,704,620.10 438,704,620.10 438,704,620.10 438,704,620.10

Unrealized gain (loss) from changes in

carrying amount of

available-for-sale securities 477,211.62 321,755.02 477,211.62 321,755.02

Translation of financial statements

differences (32,062,345.83) (30,268,955.06) - -

Retained earnings

Appropriated - legal reserve 22 588,247,395.00 535,664,645.14 409,930,799.66 378,570,532.18

Unappropriated 3,894,949,609.59 3,265,337,687.05 869,260,868.73 807,147,711.58

Total Equity of Parent

Company’s Shareholders 8,772,390,966.88 8,091,834,228.65 5,600,447,976.51 5,506,819,095.28

Minority interest 366,239,945.85 366,752,959.10 - -

Total Shareholders’ Equity 9,138,630,912.73 8,458,587,187.75 5,600,447,976.51 5,506,819,095.28

TOTAL LIABILITIES AND

SHAREHOLDERS’ EQUITY 18,715,389,387.32 13,680,669,635.87 14,176,328,181.69 9,666,168,496.82



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Statements of IncomeHemaraj Land and Development Public Company Limited and Its Subsidiaries

For the years ended December 31, 2010 and 2009

BAHT

CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS NOTE 2010 2009 2010 2009

REVENUES

Sales of land 1,486,183,484.53 688,618,386.66 183,832,522.11 1,199,909.36

Sales of pre-fabricated factory 272,175,113.80 42,776,200.00 - -

Sales of condominium 493,722,496.82 (57,472,769.71) 493,722,496.82 (57,472,769.71)

Services income 5 1,433,175,676.88 1,375,831,672.83 156,492,200.34 156,260,762.96

Other income

Gain from bargain purchase 10.2 145,408,440.80 - - -

Interest income 5 77,485,444.44 73,798,505.45 91,418,172.49 83,133,604.49

Management income and commission fee 5 23,963,966.83 33,184,365.20 77,376,177.91 67,000,593.60

Dividend income 10 64,616,271.82 35,966,583.35 611,335,485.52 695,536,334.94

Gain on exchange rate - 30,122.33 69,584,941.05 33,984,147.92

Others 23,488,593.78 29,968,823.69 14,408,142.11 13,134,084.21

Total Revenues 4,020,219,489.70 2,222,701,889.80 1,698,170,138.35 992,776,667.77

EXPENSES

Cost of land sales 964,293,216.18 385,271,928.68 134,577,533.91 335,239.42

Cost of pre-fabricated factory sales 178,643,192.87 35,654,970.94 - -

Cost of condominium sales 270,623,225.07 (20,538,302.18) 270,623,225.07 (14,418,302.18)

Cost of services 5 841,585,894.74 789,102,263.82 111,243,024.42 125,621,493.82

Selling expenses 122,262,065.63 59,537,781.15 55,816,021.13 32,975,439.02

General and administrative expenses 421,696,408.84 334,114,552.48 258,139,889.74 193,565,634.31

Director remuneration 23 24,690,000.00 24,335,000.00 16,150,000.00 15,795,000.00

Total Expenses 2,823,794,003.33 1,607,478,194.89 846,549,694.27 353,874,504.39

PROFIT BEFORE SHARE OF PROFITS

FROM INVESTMENTS IN ASSOCIATES 1,196,425,486.37 615,223,694.91 851,620,444.08 638,902,163.38

SHARE OF PROFITS FROM

INVESTMENTS IN ASSOCIATES 2.2 and 10 421,954,962.86 80,619,045.21 - -

PROFIT BEFORE FINANCE COSTS

AND INCOME TAX EXPENSES 1,618,380,449.23 695,842,740.12 851,620,444.08 638,902,163.38

FINANCE COSTS 5 (284,069,552.72) (143,753,206.61) (268,467,016.80) (144,660,125.59)

PROFIT BEFORE INCOME TAX EXPENSES 1,334,310,896.51 552,089,533.51 583,153,427.28 494,242,037.79

INCOME TAX EXPENSES 26 (46,896,960.95) 46,793,493.91 44,051,922.26 102,295,701.62

NET PROFIT 1,287,413,935.56 598,883,027.42 627,205,349.54 596,537,739.41

Profit attributable to:

Equity holders of the parent 1,215,926,597.31 575,238,626.43 627,205,349.54 596,537,739.41

Minority interests 71,487,338.25 23,644,400.99 - -

1,287,413,935.56 598,883,027.42 627,205,349.54 596,537,739.41

BASIC EARNINGS PER SHARE

Net profit attributable to equity holders

of the parent 0.13 0.06 0.06 0.06

Weighted average number of ordinary

shares (shares) 9,705,186,191 9,482,856,164 9,705,186,191 9,482,856,164



149

Stat

emen

ts o

f Cha

nges

in

Shar

ehol

ders

’ Equ

ity

Hem

araj

Lan

d an

d Dev

elop

men

t Pu

blic C

ompa

ny L

imited

and

Its

Sub

sidi

arie

sFo

r Th

e Yea

rs E

nded

Dec

embe

r 31

, 201

0 And

200

9

Sepa

rate

Fin

ancial

Sta

tem

ents

BAH

T

Unr

ealiz

ed g

ain

(loss

) fro

m cha

nges

Ret

aine

d ea

rnin

gs

Pr

emiu

m

in c

arry

ing

Una

ppro

pria

ted

Issu

ed a

nd

(d

isco

unt)

amou

nt o

f

Ret

aine

d

pa

id-u

p

on

com

mon

av

aila

ble-

for-

sale

App

ropr

iate

d ea

rnin

gs -

NOTE

sh

are

capi

tal

War

rant

s stoc

ks, n

et

secu

ritie

s lega

l res

erve

Una

ppro

pria

ted

Tota

l

Beg

inni

ng b

alan

ce a

s of

Jan

uary

1, 2

010

3,88

2,07

4,47

6.40

-

438,

704,

620.

10

321,

755.

02

378,

570,

532.

18

807,

147,

711.

58

5,50

6,81

9,09

5.28

Unr

ealiz

ed g

ain

from

cha

nges

in

carr

ying

am

ount

of av

aila

ble-

for-

sale

sec

uritie

s

- -

- 15

5,45

6.60

-

- 15

5,45

6.60

Net

pro

fit

-

- -

- -

627,

205,

349.

54

627,

205,

349.

54

App

ropr

iate

d - le

gal re

serv

e

22

- -

- -

31,3

60,2

67.4

8 (3

1,36

0,26

7.48

) -

Div

iden

d pa

id

22

- -

- -

- (5

33,7

31,9

24.9

1)

(533

,731

,924

.91)

End

ing

bala

nce

as o

f Dec

embe

r 31

, 201

0

3,

882,

074,

476.

40

- 43

8,70

4,62

0.10

47

7,21

1.62

40

9,93

0,79

9.66

86

9,26

0,86

8.73

5,

600,

447,

976.

51

Beg

inni

ng b

alan

ce a

s of

Jan

uary

1, 2

009

3,75

2,73

6,41

1.60

92

7,63

7.64

47

5,60

8,36

6.36

94

,558

.36

348,

743,

645.

21

568,

796,

041.

94

5,14

6,90

6,66

1.11

Unr

ealiz

ed g

ain

from

cha

nges

in

carr

ying

am

ount

of av

aila

ble-

for-

sale

sec

uritie

s

- -

- 22

7,19

6.66

-

- 22

7,19

6.66

Net

pro

fit

-

- -

- -

596,

537,

739.

41

596,

537,

739.

41

App

ropr

iate

d - le

gal re

serv

e

22

- -

- -

29,8

26,8

86.9

7 (2

9,82

6,88

6.97

) -

Div

iden

d pa

id

22

- -

- -

- (3

28,3

59,1

82.8

0)

(328

,359

,182

.80)

Exe

rcise

of w

arra

nt

21

129,

338,

064.

80

(927

,637

.64)

(3

6,90

3,74

6.26

) -

- -

91,5

06,6

80.9

0

End

ing

bala

nce

as o

f Dec

embe

r 31

, 200

9

3,

882,

074,

476.

40

- 43

8,70

4,62

0.10

32

1,75

5.02

37

8,57

0,53

2.18

80

7,14

7,71

1.58

5,

506,

819,

095.

28

The

acco

mpa

nyin

g no

tes

to fin

ancial

sta

tem

ents

are

an

inte

gral

par

t of

the

se s

tate

men

ts.


150

Stat

emen

ts o

f Cha

nges

in

Shar

ehol

ders

’ Equ

ity

Hem

araj

Lan

d an

d Dev

elop

men

t Pu

blic C

ompa

ny L

imited

and

Its

Sub

sidi

arie

sFo

r th

e ye

ars

End

ed D

ecem

ber

31, 2

010

and

2009

CONSO

LIDATE

D F

INANCIA

L ST

ATE

MENTS

BAH

T

Equ

ity

of P

aren

t Com

pany

’s S

hare

hold

ers

Un

real

ized

gain

Prem

ium

(lo

ss) f

rom

chan

ges i

n

Tran

slatio

n of

Tota

l

Issu

ed a

nd

(d

iscou

nt)

carr

ying

am

ount

of

finan

cial

Reta

ined

ear

ning

s Eq

uity

of P

aren

t

paid

-up

on

com

mon

av

ailab

le-for

-sale

sta

tem

ents

Appr

opria

ted

Com

pany

’s

Min

ority

NO

TE

shar

e cap

ital

War

rant

s sto

cks,

net

secu

rities

di

ffere

nces

leg

al re

serv

e Un

appr

opria

ted

Shar

ehold

ers

inte

rest

Tota

l

Begi

nnin

g ba

lanc

e as

of J

anua

ry 1

, 201

0

3,8

82,07

4,476

.40

- 43

8,704

,620.1

0 32

1,755

.02

(30,2

68,95

5.06)

53

5,664

,645.1

4 3,2

65,33

7,687

.05

8,091

,834,2

28.65

36

6,752

,959.1

0 8,4

58,58

7,187

.75

Unre

alize

d ga

in fr

om ch

ange

s in

carr

ying

am

ount

of a

vaila

ble-

for-

sale

secu

rities

- -

- 15

5,456

.60

- -

- 15

5,456

.60

- 15

5,456

.60

Tran

slatio

n of

fina

ncia

l sta

tem

ents

diff

eren

ces

- -

- -

(1,79

3,390

.77)

- -

(1,79

3,390

.77)

- (1

,793,3

90.77

)

Tran

sact

ion n

ot re

cogn

ized

in th

e st

atem

ents

of i

ncom

e

- -

- 15

5,456

.60

(1,79

3,390

.77)

-

(1,63

7,934

.17)

- (1

,637,9

34.17

)

Net p

rofit

- -

- -

- -

1,215

,926,5

97.31

1,2

15,92

6,597

.31

71,48

7,338

.25

1,287

,413,9

35.56

Appr

opria

ted

- leg

al re

serv

e

22

- -

- -

- 52

,582,7

49.86

(5

2,582

,749.8

6)

- -

-

Divi

dend

pai

d

22

- -

- -

- -

(533

,731,9

24.91

) (5

33,73

1,924

.91)

- (5

33,73

1,924

.91)

Incr

ease

in m

inor

ity

-

- -

- -

- -

- 19

0.00

190.0

0

Divi

dend

from

sub

sidia

ries

paid

to m

inor

ity

-

- -

- -

- -

- (7

2,000

,541.5

0)

(72,0

00,54

1.50)

Endi

ng b

alan

ce a

s of

Dec

embe

r 31,

2010

3,882

,074,4

76.40

-

438,7

04,62

0.10

477,2

11.62

(3

2,062

,345.8

3)

588,2

47,39

5.00

3,894

,949,6

09.59

8,7

72,39

0,966

.88

366,2

39,94

5.85

9,138

,630,9

12.73

Begi

nnin

g ba

lanc

e as

of J

anua

ry 1

, 200

9

3,7

52,73

6,411

.60

927,6

37.64

47

5,608

,366.3

6 94

,558.3

6 (2

8,991

,779.3

1)

467,8

51,40

5.48

3,086

,271,4

83.08

7,7

54,49

8,083

.21

383,1

09,44

7.82

8,137

,607,5

31.03

Unre

alize

d ga

in fr

om ch

ange

s in

carr

ying

am

ount

of a

vaila

ble-

for-

sale

secu

rities

- -

- 22

7,196

.66

- -

- 22

7,196

.66

- 22

7,196

.66

Curr

ency

tran

slatio

n di

ffere

nces

- -

- -

(1,27

7,175

.75)

- -

(1,27

7,175

.75)

- (1

,277,1

75.75

)

Tran

sact

ion n

ot re

cogn

ized

in th

e st

atem

ents

of i

ncom

e

- -

- 22

7,196

.66

(1,27

7,175

.75)

-

(1,04

9,979

.09)

- (1

,049,9

79.09

)

Net p

rofit

- -

- -

- -

575,2

38,62

6.43

575,2

38,62

6.43

23,64

4,400

.99

598,8

83,02

7.42

Appr

opria

ted

- leg

al re

serv

e

22

- -

- -

- 67

,813,2

39.66

(6

7,813

,239.6

6)

- -

-

Divi

dend

pai

d

22

- -

- -

- -

(328

,359,1

82.80

) (3

28,35

9,182

.80)

- (3

28,35

9,182

.80)

Decr

ease

in m

inor

ity

-

- -

- -

- -

- (2

1.00)

(2

1.00)

Divi

dend

from

sub

sidia

ries

paid

to m

inor

ity

-

- -

- -

- -

- (4

0,000

,868.7

1)

(40,0

00,86

8.71)

Exer

cise

of w

arra

nts

21

12

9,338

,064.8

0 (9

27,63

7.64)

(3

6,903

,746.2

6)

- -

- -

91,50

6,680

.90

- 91

,506,6

80.90

Endi

ng b

alan

ce a

s of

Dec

embe

r 31,

2009

3,882

,074,4

76.40

-

438,7

04,62

0.10

321,7

55.02

(3

0,268

,955.0

6)

535,6

64,64

5.14

3,265

,337,6

87.05

8,0

91,83

4,228

.65

366,7

52,95

9.10

8,458

,587,1

87.75

The

acco

mpa

nyin

g no

tes

to fi

nanc

ial s

tate

men

ts a

re a

n in

tegr

al p

art o

f the

se s

tate

men

ts.


151

Statements of Cash FlowsHemaraj Land and Development Public Company Limited and Its SubsidiariesFor the years ended December 31, 2010 and 2009

BAHT


CASH FLOWS FROM OPERATING ACTIVITIES

Net profit 1,287,413,935.56 598,883,027.42 627,205,349.54 596,537,739.41

Adjustments to reconcile net profit

to net cash provided by (used in)

Allowance for doubtful accounts (711,471.08) 1,356,103.56 (2,321,838.54) 1,558,600.82

Share of profits from

investments in associates 2.2 and 10 (421,954,962.86) (80,619,045.21) - -

Gain on exchange rate - - (69,765,728.09) (33,915,610.59)

Gain from sales of equipment (155,622.85) (1,862,605.82) (62,165.91) (775,697.93)

Donation of equipment - 2,957,619.47 - 2,957,619.47

Depreciation of assets 12 and 13 181,033,182.68 169,960,500.15 20,567,024.34 22,015,880.53

Amortization of sinking fund 15 5,405,121.69 5,077,961.10 1,530,537.97 1,530,537.87

Provision for maintenance 5,139,627.04 4,639,857.92 (4,117,754.34) 74,522.47

Provision for withholding tax

deduct at source - 1,942,929.98 - -

Adjustment of retention payable - (1,002,190.75) - (1,002,190.75)

Gain from bargain purchase 10.2 (145,408,440.80) - - -

Dividend income 10 (64,616,271.82) (35,966,583.35) (611,335,485.52) (695,536,334.94)

Realization of deferred leasehold

right income - related party 5 - - (2,483,999.96) (2,483,999.96)

Realization of deferred leasehold

right income - others (1,938,244.29) (1,372,508.09) - -

Finance costs 5 284,069,552.72 143,753,206.61 268,467,016.80 144,660,125.59

Income tax expenses 26 46,896,960.95 (46,793,493.91) (44,051,922.26) (102,295,701.62)

1,175,173,366.94 760,954,779.08 183,631,034.03 (66,674,509.63)

Decrease (increase) in

operating assets :

Account receivables -

related parties 2,215,468.04 1,153,141.23 (5,083,268.29) 75,184,227.10

Account receivables -

other parties (61,554,870.76) (1,062,711.61) (6,044,544.99) (5,437,499.11)

Unbilled completed work (150,002,133.06) 880,644,988.01 (15,579,776.91) 815,389,978.94

Inventory 480,000.00 240,000.00 480,000.00 240,000.00

Cost of real estate developments (577,393,989.22) (459,654,295.91) 398,004,426.51 (159,799,082.31)

Other current assets 8,609,102.85 31,511,183.52 5,758,704.19 3,620,580.57

Other non - current assets (17,375,492.51) (24,571,627.54) (20,295,912.11) (28,370,895.92)



152

BAHT


Increase (decrease) in operating liabilities :

Trade account payables - related parties 1,152,662.48 (292,883.09) (6,098,190.01) 5,390,095.04

Trade account payables - other parties (7,246,120.94) (107,602,244.51) 1,998,738.89 (29,156,716.13)

Unearned income and income received

in advance 262,199,430.53 (426,750,273.25) (8,474,023.14) (21,161,630.64)

Accrued expenses 19,844,817.42 (41,148,750.28) 10,664,595.90 (35,461,013.43)

Other account payables (1,539,209.86) (1,205,075.50) 22,731.02 1,020,330.42

Accrued specific business tax

and transfer fee 18,864,315.28 (344,768.73) 4,602,959.37 (1,326,513.32)

Other current liabilities 35,359,140.10 (55,196,533.84) 6,454,501.60 (46,213,436.35)

Retention payables (7,456,625.29) (42,224,238.50) (7,517,442.33) (41,144,448.75)

Guarantee payable 23,881,161.38 (3,070,768.91) (1,640,050.00) (524,687.90)

Other non - current liabilities 6,026,022.04 (3,293,265.97) 7,060,921.20 (2,134,878.10)

Cash Provided by (Used in)

Operating Activities 731,237,045.42 508,086,654.20 547,945,404.93 463,439,900.48

Cash paid for finance costs (262,120,974.13) (216,739,384.17) (213,856,490.67) (168,649,632.28)

Cash paid for corporate income tax (98,124,729.95) (176,395,007.35) (31,630,474.95) (101,240,311.54)

Net Cash Provided by (Used in)

Operating Activities 370,991,341.34 114,952,262.68 302,458,439.31 193,549,956.66

CASH FLOWS FROM INVESTING ACTIVITIES

Increase in short - term loans and

advance to related parties (1,073.97) (5,627,942.47) (170,901,112.95) (580,658,648.28)

Decrease (increase) in investments

in subsidiaries 10.2 - - (763,689,385.00) 240,499,979.00

Cash received from subsidiaries

acquisition 10.2 34,730,597.00 - - -

Increase in investments in associate (2,307,937,010.11) (267,219,274.04) (2,588,250,000.00) (267,219,274.04)

Dividend received from subsidiaries - - 395,889,729.30 737,774,717.85

Dividend received from associates 13,914,713.34 9,274,986.00 13,914,713.34 9,274,986.00

Dividend received from other companies 64,616,271.82 35,966,583.35 63,116,281.82 34,916,590.35

Decrease in deposit at financial

institution with commitment 1,293,724,422.36 - 1,293,724,422.36 -

Cash received from sales of building

and equipment 2,189,085.94 1,862,616.82 2,095,628.00 775,700.93

Increase in building and equipment (181,197,186.79) (113,031,157.23) (14,367,190.52) (4,170,972.61)

Increase in assets for rent (33,279,183.30) (70,326,192.15) - -

Increase in sinking fund (3,354,687.50) (6,780,133.46) - -


Investing Activities (1,116,594,051.21) (415,880,513.18) (1,768,466,913.65) 171,193,079.20

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

For the years ended December 31, 2010 And 2009



153

Statements of Cash Flows (Continued)Hemaraj Land and Development Public Company Limited and Its SubsidiariesFor the years ended December 31, 2010 And 2009

BAHT


CASH FLOWS FROM FINANCING ACTIVITIES

Decrease in short-term loans from

financial institutions (450,000,000.00) (685,000,000.00) (450,000,000.00) (685,000,000.00)

Increase in debentures 18 6,000,000,000.00 - 6,000,000,000.00 -

Decrease in short - term loans from

other parties and other persons 17 (420,000,000.00) 420,000,000.00 (420,000,000.00) 420,000,000.00

Increase (decrease) in short - term

loans and advance

from related parties (232,058,040.39) 222,058,040.39 (232,058,040.39) (550,557,892.42)

Decrease in long - term loans

from related party - - (100,000.00) (20,624,720.00)

Increase (decrease) in other long -

term loans (909,348,070.00) 601,237,322.40 (423,711,125.00) 819,805,500.00

Proceeds from exercise of warrants - 91,506,680.90 - 91,506,680.90

Cash paid for dividend 22 (532,013,065.36) (329,852,792.82) (532,013,065.36) (329,853,076.37)

Dividend paid to minority interest (102,000,604.35) (40,000,868.71) - -

Cash received (paid) from minority

interest 190.00 (21.00) - -


Financing Activities 3,354,580,409.90 279,948,361.16 3,942,117,769.25 (254,723,507.89)

Translation of financial statements

differences (1,793,390.77) (1,277,175.75) - -

Increase (decrease) in cash and

cash equivalents, net 2,607,184,309.26 (22,257,065.09) 2,476,109,294.91 110,019,527.97

Cash and cash equivalents,

beginning of years 909,430,084.97 931,687,150.06 525,127,783.23 415,108,255.26

Cash and cash equivalents, end of years 6 3,516,614,394.23 909,430,084.97 3,001,237,078.14 525,127,783.23



154

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

For the years ended December 31, 2010 and 2009

BAHT


SUPPLEMENTAL CASH FLOWS INFORMATION:

OPERATING ACTIVITIES, INVESTING

ACTIVITIES AND FINANCING ACTIVITIES

NOT AFFECTING CASH

The increase in proportion of investment

in subsidiaries

Increase in investments in subsidiaries (280,312,989.89) - - -

Decrease in investments in associates 280,312,989.89 - - -

Increase in cash and cash equivalents, end

of period from the increase in proportion

of investment in subsidiaries on

acquisition date

Increase in cash and cash equivalents,

end of period (30,710,983.77) - - -

Increase in account receivables -

related parties (3,460.79) - - -

Increase in account receivables -

other parties (20,447,958.91) - - -

Increase in cost of real estate developments (1,410,856,508.61) - - -

Increase in other current assets (2,308,721.53) - - -

Increase in building and equipment (35,394,695.05) - - -

Increase in other non - current assets (197,792.30) - - -

Increase in trade account payables -

related parties 2,483,782.80 - - -

Increase in trade account payables -

other parties 7,823,643.95 - - -

Increase in accrued expenses 5,369,662.81 - - -

Increase in other account payables 724,800.43 - - -

Increase in accrued specific business tax

and transfer fee 345,637.30 - - -

Increase in accrued income tax 9,311,645.70 - - -

Increase in other current liabilities 16,846,075.27 - - -

Increase in retention payables 107,305.00 - - -

Increase in guarantee payable 166,650.00 - - -

Increase in short - term loans from

related party 380,000,000.00 - - -

Increase in retained earnings 576,740,917.70 - - -



155

Notes to Financial StatementsHemaraj Land and Development Public Company Limited and Its Subsidiaries For the years ended December 31, 2010 and 2009

1. GENERAL INFORMATION

1.1 General matter

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

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

1. Industrial estate development projects located in the Eastern Seaboard of Thailand

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

Company Name Industrial Estate Site Location

Hemaraj Land and Development Plc. Hemaraj Chonburi Sriracha district, Chonburi province Eastern Industrial Estate Co., Ltd. Hemaraj Eastern Muang district, (Map Ta Phut) Rayong province Eastern Seaboard Industrial Estate Eastern Seaboard Pluak Daeng district, (Rayong) Co., Ltd. (Rayong) Rayong province Hemaraj Eastern Seaboard Industrial Hemaraj Eastern Pluak Daeng district, Estate Co.,Ltd. Seaboard Rayong province

2. Industrial zone development projects

The projects are operating under the names of 2 subsidiaries as follows: Company Name Industrial Zone Site Location

Hemaraj Saraburi Industrial Land Hemaraj Saraburi Nongkae district, Company Limited (Formerly known as Saraburi province “SIL Industrial Land Company Limited”) Hemaraj Rayong Industrial Land Hemaraj Rayong Ban kai district, Company Limited (Formerly known as Rayong province “RIL Industrial Land Company Limited”)

3. A condominium for sales being developed by the Company in the project name of The Park Chidlom, located at Chidlom Road, Bangkok.

4. Service business related to the mentioned industrial estates consisting of service providing for public utilities, office building and prefabricated factory for sale and lease, land rental, commercial plaza rental, pipe rack rental in Industrial Estates, building contractor and others.

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


156

1.2 The Central Administrative Court ordered to suspend the construction of 76 projects in Rayong Province

Reference is made to the injunction of the Central Administrative Court, ordering 8 government authorities to order the temporary suspension of the projects or activities altogether 76 projects in Rayong Province until the Court renders a judgment or an order otherwise except the projects or activities which had received the permits before the effectiveness of the Constitution of Thailand B.E.2550 and the projects or activities which are not required the Environmental Impact Assessment (EIA) according to the Declaration of the Ministry of Natural Resources and Environment dated June 16, 2009. On December 2, 2009, the Supreme Administrative Court has an order amending the injunction order of the Central Administrative Court’s the temporary suspension of the 76 projects to release 11 projects from such suspension and remain other 65 projects suspended in which if the suspending 65 projects have an operation under Constitutional Law of Thailand B.E. 2550 section 67 paragraph 2, the effected projects could submit a motion to release from such temporary suspension. In January 2010, one of the subsidiary’s project which is effected from the court order, had requested the Industrial Estate Authority of Thailand (IEAT) to consider whether the obtaining of Industrial Estate permission for these expansion land from IEAT since September 2006 are considered to be such permission by the government allowing according to the specific law, which means that such project has obtained the permission before the Constitution Announcement (B.E. 2550) as the Central Administrative Court’s order in December 2009, and it was informed by IEAT that the Company is the one who has obtained the permission in the mean of Administrative Court’s consideration.

On 2 September 2010, the Central Administrative Court has rendered a judgement. In case any projects or activities which received the permit license after the effective date of Constitution of Thailand of the year 2007 and have been in the list of seriously harmful projects or activities effecting to local community according to Ministry of Natural Resource and Environment announcement dated August 31, 2010, and have not yet conducted completely in term of the Section 67 Paragraph 2 of Constitution of Thailand of the year 2007, such projects or activities would be withdrawn the permit license. The injunction order of the Central Administrative Court shall end on the date of judgment except those harmful projects or activities as mentioned above, which the injunction order shall continue to be in effect until the case is final or until the Supreme Administrative Court will order otherwise.

As the result of the Central Administrative Court’s order and the letter of IEAT was informed that as 2 expansion project of the Company’s group were not within those projects in the meaning of seriously harmful projects impacting to local community according to Ministry of Natural Resource and Environment dated August 31, 2010, therefore, it shall be able to procede normally.

1.3 Adoption of new accounting standards

In May 2009, the Federation of Accounting Professions (FAP) has issued Notifications No. 12/2552 regarding the renumbering of Thai Accounting Standards to match correspondingly with the International Accounting Standards. Therefore the numbers of Thai Accounting Standards as used in these financial statements are corresponding to those according to this notification.

During the current year, the Federation of Accounting Professions (FAP) has issued a number of revised and new accounting standards which have been published in the Royal Gazette as follows :

1) An accounting standard which is effective for the current year as follows :

Framework for the Preparation and Presentation of Financial Statements (revised 2009)


157

However, the management has considered the effect of this accounting standard that it does not have any significant effect on the financial statements for the current year.

2) Accounting standards and financial reporting standards which are not effective for the current year as follows :

Effective date

Accounting Standard No. 1 (revised 2009) Presentation of Financial Statements January 1, 2011

Accounting Standard No. 2 (revised 2009) Inventories January 1, 2011

Accounting Standard No. 7 (revised 2009) Statement of Cash Flows January 1, 2011

Accounting Standard No. 8 (revised 2009) Accounting Policies, Changes in January 1, 2011

Accounting Estimates and Errors

Accounting Standard No. 10 (revised 2009) Events after the Reporting Period January 1, 2011

Accounting Standard No. 11 (revised 2009) Construction Contracts January 1, 2011

Accounting Standard No. 12 Income Taxes January 1, 2013

Accounting Standard No. 16 (revised 2009) Property, Plant and Equipment January 1, 2011

Accounting Standard No. 17 (revised 2009) Leases January 1, 2011

Accounting Standard No. 18 (revised 2009) Revenue January 1, 2011

Accounting Standard No. 19 Employee Benefits January 1, 2011

Accounting Standard No. 20 (revised 2009) Accounting for Government Grants and January 1, 2013

Disclosure of Government Assistance

Accounting Standard No. 21 (revised 2009) The Effects of Changes in January 1, 2013

Foreign Exchange Rates

Accounting Standard No. 23 (revised 2009) Borrowing Costs January 1, 2011

Accounting Standard No. 24 (revised 2009) Related Party Disclosures January 1, 2011

Accounting Standard No. 26 Accounting and Reporting by January 1, 2011

Retirement Benefit Plans

Accounting Standard No. 27 (revised 2009) Consolidated and Separate January 1, 2011

Financial Statements

Accounting Standard No. 28 (revised 2009) Investments in Associates January 1, 2011

Accounting Standard No. 29 Financial Reporting in January 1, 2011

Hyperinflationary Economies

Accounting Standard No. 31 (revised 2009) Interests in Joint Ventures January 1, 2011

Accounting Standard No. 33 (revised 2009) Earnings per Share January 1, 2011

Accounting Standard No. 34 (revised 2009) Interim Financial Reporting January 1, 2011

Accounting Standard No. 36 (revised 2009) Impairment of Assets January 1, 2011

Accounting Standard No. 37 (revised 2009) Provisions, Contingent Liabilities and January 1, 2011

Contingent Assets

Accounting Standard No. 38 (revised 2009) Intangible Assets January 1, 2011

Accounting Standard No. 40 (revised 2009) Investment Property January 1, 2011

Financial Reporting Standard No. 2 Share - based Payments January 1, 2011

Financial Reporting Standard No. 3 (revised 2009) Business Combinations January 1, 2011

Financial Reporting Standard No. 5 (revised 2009) Non - current Assets Held for Sale January 1, 2011

and Discontinued Operations

Financial Reporting Standard No. 6 Exploration for and Evaluation of January 1, 2011

Mineral Resources

Financial Reporting Interpretation No. 15 Agreements for the Construction of January 1, 2011

Real Estate


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The Company will apply the related Accounting Standards, Financial Reporting Standards and Financial Reporting Interpretation on the effective date, except for the Financial Reporting Standard No. 3 (revised 2009) that the Company early applied before the effective date. The management of the Company has considered that

1. Accounting Standard No. 20 (revised 2009), Accounting Standard No. 31 (revised 2009), Financial Reporting Standard No. 2 and Financial Reporting Standard No. 6 are not relevant to the Company’s business.

2. Accounting Standard No. 12, Accounting Standard No. 16 (revised 2009), Accounting Standard No. 18 (revised 2009), Accounting Standard No. 19, Accounting Standard No. 40 (revised 2009) and Financial Reporting Interpretation No. 15 are still considered the effect to the financial statements for the year in which they are initially applied.

3. The other Accounting Standards and Financial Reporting Standards are considered not having material effect on the financial statements.

1.4 Transfer fee and specific business tax

The Royal Decree issued pursuant to the Revenue Code relating to the reduction of tax (No. 472 B.E. 2551 and No. 488 B.E. 2552), Announcement of Interior Ministry relating to collection of fees for registration and transfer pursuant to the Land Law in case of the promotion of sale and purchase of real estates according to the criteria set by the cabinet and Announcement of Interior Ministry relating to the collection of fees for registration of condominium unit in case of the promotion sale and purchase of condominium unit according to the criteria set by the cabinet declare to reduce specific business tax from 3.3% to 0.11% for registration made during March 28, 2008 until March 28, 2010 and reduce registration fees for transfer real estates from 2% to 0.01% % for registration made during March 28, 2008 until June 30, 2010.

2. BASIS OF CONSOLIDATED FINANCIAL STATEMENT PRESENTATION

2.1 Basis for preparation of financial statements

The financial statements of the company have been prepared in accordance with generally accepted accounting standards including related interpretations and guidelines promulgated by the Federation of Accounting Professional.

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

Certain amounts in the 2009 financial statements have been reclassified to conform to the 2010 financial statement presentation, without effect on previously reported net profit and shareholders’ equity.

2.2 Basis for preparation and presentation of consolidated financial statements

The consolidated financial statements incorporate the financial statements of the Company and its majority owned directly and indirectly (over 50% of their paid-up capital) in subsidiaries and are prepared on the same basis as the consolidated financial statements for the year ended December 31, 2009.

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

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


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MILLION BAHT

2010 2009

Cofely (Thailand) Company Limited * 3.63 3.60

(Formerly known as “Elyo-H Facilities Management Limited”)

Hemaraj Saraburi Industrial Land Company Limited ** 14.81 14.85

(Formerly known as “SIL Industrial Land Company Limited”)

(Consolidated financial statements) (Note 10)

GHECO - One Company Limited ** 393.51 74.25

Houay Ho Thai Company Limited ** 10.01 (12.08)

(Consolidated financial statements)

Total 421.96 80.62

* Based on the information from the financial statements which were provided by the management and

were not audited by an auditor. ** Based on the information from the financial statements which were audited by other auditors. 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1 The measurement bases used in preparing the financial statements

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

3.2 Cash and cash equivalents

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

3.3 Temporary investments

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

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

3.4 Trade account receivables and allowance for doubtful accounts

Trade account receivables are stated at net realizable value. The Company and subsidiaries provide allowance for doubtful accounts for estimated losses that may incurred in collection of receivables. The allowance for doubtful accounts is generally considered from collection experience and aging analysis.

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

3.5 Inventories

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

3.6 Cost of real estate developments

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


160

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

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

3.7 Capitalization of borrowing costs

Borrowing costs are expensed in the period in which they are incurred, except borrowing costs of long term loan and loan from other parties in relation to the cost of real estate should be treated as part of the cost of the relevant assets. Capitalization should cease when substantially all of the activities necessary to prepare the asset for its intended use or sale are completed and should be suspended during periods in which active development is interrupted. The Company and its subsidiaries will recognize impairment loss when the carrying amount of an asset exceeds its recoverable amount.

3.8 Investments and loans Investments

A. Investments in subsidiaries and associates are recorded by using the cost method in the separate financial statements. Investments in associates are recorded by using equity method in the consolidated financial statements.

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

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

Loans

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

3.9 Assets for rent

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

3.10 Property, plant and equipment

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

3.11 Leasehold right and land held for commercial purposes

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

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

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


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3.12 Sinking fund

The Company and its subsidiaries have recorded a fund for the major maintenance and replacement of utilities systems and facilities for the customers in the industrial estate, under the joint operating agreements with the Industrial Estate Authority of Thailand (“IEAT”) to be Deferred Sinking Fund and has recorded amortization to be cost of services by the straight-line method over 20 years of useful lives.

3.13 Deferred interest expense on hire-purchase agreement

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

3.14 Impairment of assets

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

3.15 Unearned income and income received in advance

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

3.16 Employee benefits

Salaries, wages, bonuses, contributions to the social security fund and provident fund and other benefits are recognized as expenses when incurred.

The Company and its subsidiaries do not recognize liabilities in respect of employee benefit potentially payable under the Thai Labour Law.

3.17 Deferred leasehold right income

Deferred leasehold right income represents leasehold right received from rental of land, building, pipe rack and leasehold right income to produce and distribute the industrial water which are recognized as revenue over the period of rental contract.

3.18 Revenue and expense recognition

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

A. Recognition of revenue and cost of land sales

Revenue from land sales are recognized upon signing of contract and receiving of installments by the percentage of completion method, using the ratio of actual development costs incurred to total estimated development costs for each projects excluding land cost. Cost of sales is calculated from the realized sales contracts based on the ratio of total estimated project costs to total estimated project sales of each projects.

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


162

B. Recognition of revenue and cost of pre-fabricated factory sales

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

C. Recognition of revenue and cost of condominium sales

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

D. Recognition of income and cost of services

Income and cost of services are recognised on the accrual basis. Service income represents income received from providing of public utilities, potable water, raw water and reused water, waste water treatment processing, additional work in building construction and rental services in respect of land, commercial plaza, warehouse, factory, resident and pipe rack to the Industrial Estate, training center and business center. Cost of services represents cost incurred from providing of such services.

Revenue and cost from mini and micro pre-fabricated factory construction are recognized upon signing of contract and receiving of installments by the percentage of completion method.

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

E. Other incomes and expenses.

Other incomes, selling and administration expense, finance costs and other expenses are recognized on the accrual basis.

3.19 Accounts in foreign currency

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

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

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

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

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

B. Other foreign currency transactions occurring during the year are converted into Baht at the rates prevailing on the dates of the transactions. Assets and liabilities at the end of the year are converted into Baht at the rates of exchange on that date.

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


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3.20 Corporate income tax

Corporate income tax is recognized on the accrual basis.

3.21 Earnings per share

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

4. SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles

requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ.

5. TRANSACTIONS WITH RELATED PARTIES The Company has certain transactions with its related parties. Significant balances and inter-

company transactions are eliminated from the consolidated financial statements. Such transactions, which have been concluded on the term and the basis agreed between the relevant parties. Certain loans between each party are related to the business jointly operated.

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

PERCENTAGE OF HOLDING COMPANY NAME TYPE OF BUSINESS RELATIONSHIP 2010 2009

Subsidiaries

Eastern Industrial Estate Company Limited Industrial Estate Development Common 99.99 99.99

shareholders

and co-directors

Eastern Seaboard Industrial Estate Industrial Estate Development ,, 60.00 60.00

(Rayong) Company Limited

Hemaraj Eastern Seaboard Industrial Industrial Estate Development ,, 99.99 99.99

Estate Company Limited

Hemaraj Saraburi Industrial Land Industrial Estate Development ,, 99.99 -

Company Limited (Formerly known as

“SIL Industrial Land Company Limited”)

Hemaraj Rayong Industrial Land Industrial Estate Development ,, 99.99 -


“RIL Industrial Land Company Limited”)

Eastern Pipeline Services Company Limited Pipe Rack Rental ,, 99.99 99.99

H-International (BVI) Company Limited Holding Company ,, 100.00 100.00

Hemaraj International Limited Holding Company ,, 100.00 100.00

H-Construction Management and Design and Construction ,, 99.99 99.99

Engineering Company Limited Supervision Service

The Park Residence Company Limited Real Estate Development ,, 99.99 99.99

and Service Management

Hemaraj Water Company Limited Water Resources Development ,, 99.99 99.99

and Management


164

PERCENTAGE OF HOLDING COMPANY NAME TYPE OF BUSINESS RELATIONSHIP 2010 2009

SME Factory Company Limited Sell and Lease of Factory Common 99.99 99.99

shareholders

and co-directors

H - Phoenix Property Company Limited Condominium office ,, 99.99 99.99

for sales, rent and services

Hemaraj Clean Water Company Limited Produce and distribute ,, 99.99 99.99

the industrial water

Associates

Cofely (Thailand) Company Limited Facilities Management Common 39.99 39.99

(Formerly known as “Elyo-H Facilities Service shareholders

Management Limited”) and co-directors

GHECO - One Company Limited Electricity and Power ,, 35.00 35.00

Generation

Hemaraj Saraburi Industrial Land Industrial Estate Development ,, - 25.00


“SIL Industrial Land Company Limited”)

Hemaraj Rayong Industrial Land Industrial Estate Development ,, - 25.00


“RIL Industrial Land Company Limited”)

Houay Ho Thai Company Limited Holding Company ,, 51.00 51.00

Houay Ho Power Company Limited Electricity and Power ,, 12.75 12.75

Generation

Related Companies

Sriracha Harbor Public Company Limited Port Service and Common 6.40 6.40

Transportation shareholder

and co-directors

Eastern Fluid Transport Company Limited Pipe Rack Maintenance ,, 15.00 15.00

Steel Top Company Limited Steel Manufacturer Relationship through - -

and Distributor director

Siam Food Products Public Company Processing Agriculture Co-investors - -

Limited Producer

Teo Hong Silom Company Limited Facilities Management Service ,, - -

Cementhai Holding Company Limited Holding Company ,, - -

Glow Energy Public Company Limited Energy ,, - -

Glow IPP2 Holding Company Limited Holding Company ,, - -

Cofely South East Asia Pte Ltd. Energy ,, - -


165

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

ASSETS THOUSAND BAHT

CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS INTERCOMPANY

2010 2009 2010 2009 TERM


to related parties:

Subsidiaries:

Eastern Industrial Estate - - 110,684 - MLR - 0.50% and

Company Limited dividend receivable

Eastern Seaboard Industrial Estate - - 4,270 55,138 Advance and

(Rayong) Company Limited dividend receivable

Hemaraj Eastern Seaboard Industrial - - 124,000 321,169 MLR - 0.50% and

Estate Company Limited dividend receivable

Hemaraj Saraburi Industrial Land - - 380,000 - MLR - 0.50%

Company Limited (Formerly known

as “SIL Industrial Land Company

Limited”)

Eastern Pipeline Services Company - - 30,778 20,067 MLR - 0.50% and

Limited dividend receivable

SME Factory Company Limited - - 29,192 27,268 MLR - 0.50%

Hemaraj Clean Water Company Limited - - 128,940 24,353 MLR - 0.50% and

dividend receivable

H - Phoenix Property Company Limited - - 220,275 270,829 MLR - 0.50%

Associates:

Cofely (Thailand) Company Limited 5,629 5,628 5,629 5,628 MLR

(Formerly known as “Elyo-H

Facilities Management Limited”)

Related company :

Sriracha Harbor Public Company 11,355 11,355 11,355 11,355 Rate as mentioned

Limited * in business

reorganization plan

Total 16,984 16,983 1,045,123 735,807

Less Allowance for doubtful debts (11,355) (11,355) (11,355) (11,355)

Net 5,629 5,628 1,033,768 724,452

• Sriracha Harbor Public Company Limited’s balance had incurred since 1997 affected from the economic

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


166

Balance of assets with related parties and its movement for the year 2010 were as follows: THOUSAND BAHT

As of 31st During the year As of 31st

December, 2009 Increase Decrease December, 2010

Consolidated financial statements

Short - term loans and advance to related parties:

Associates (1) 5,628 394,305 (394,304) 5,629

Related company 11,355 113 (113) 11,355

Total 16,983 394,418 (394,417) 16,984

Less Allowance for doubtful debts (11,355) - - (11,355)

Net 5,628 394,418 (394,417) 5,629

Separate financial statements

Short - term loans and advance to related parties:

Subsidiaries 718,824 1,198,125 (888,810) 1,028,139

Associates 5,628 394,305 (394,304) 5,629

Related company 11,355 113 (113) 11,355

Total 735,807 1,592,543 (1,283,227) 1,045,123

Less Allowance for doubtful debts (11,355) - - (11,355)

Net 724,452 1,592,543 (1,283,227) 1,033,768

(1) The movement during the year 2010 of associates included loan to Hemaraj Saraburi Industrial Land

Company Limited (HSIL) in the amount of Baht 380 million (Note 10.2), interest income in the amount of Baht 0.39 million and dividend income in the amount of Baht 13.91 million.

Liabilities THOUSAND BAHT


2010 2009 2010 2009 TERM


from related parties:

Related company :

Glow Company Limited (1) - 237,394 - 237,394 MLR – 2%

Siam Food Products Public - 30,000 - - Dividend payable

Company Limited

Total - 267,394 - 237,394

Long - term loans from related party:

Subsidiary:

H-International (BVI) Company Limited - - 988,693 1,058,559 -

Deferred leasehold right income:

Subsidiary:

Hemaraj Clean Water Company Limited (2)

Deferred leasehold right income - - 62,100 62,100 Rate mutually

agreed

Less Accumulated amortization - - (6,220) (3,736) between both

parties

Deferred leasehold right income, net - - 55,880 58,364


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(1) The company had entered into the Short Term Loan Agreement with Glow Company Limited for the purpose of acquisition and subscription of share capital increase in Houay Ho Thai Company Limited (51% share holding) which is already repaid in 2010.

(2) The Company and its 3 subsidiaries have entered into 25-year leasehold right contracts, in the total amount of Baht 559 million, for production and distribution of industrial water with Hemaraj Clean Water Company Limited (a subsidiary).

Balance of Liabilities with related parties and its movement for the year 2010 were as follows: THOUSAND BAHT

As of 31st During the year As of 31st

December 2009 Increase Decrease December 2010


Short - term loans and advance from related parties:

Related parties 267,394 74,399 (341,793) -


Short - term loans and advance from related parties:

Subsidiaries - 467,153 (467,153) -

Related parties 237,394 2,399 (239,793) -

Long - term loans from related party:

Subsidiary 1,058,559 - (69,866) 988,693

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


2010 2009 2010 2009 COST POLICY

Service income 1.02 0.01 14.59 11.53 Market price

Interest income 0.50 0.25 24.28 10.66 MLR – 0.5% and

MLR

Commission and 23.13 33.18 76.54 67.00 5% - 10% of

management income contract price

and 5% of service

income received

Cost of service 13.15 12.18 1.27 1.21 Market price

Finance costs 2.40 5.34 2.92 24.24 MLR – 2.00% and

MLR – 0.50%

Deferred leasehold right income - - 2.48 2.48 Rate mutually

agreed between

both parties


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6. CASH AND CASH EQUIVALENTS For the purpose of preparation of the statements of cash flows in accordance with the relevant

Accounting Standard, as of December 31, cash and cash equivalents consisted of: THOUSAND BAHT

CONSOLIDATED SEPARATE FINANCIAL STATEMENTS FINANCIAL STATEMENTS 2010 2009 2010 2009

Cash and deposits at financial institutions 563,033 904,334 247,737 525,111

Current investments - Time deposits 2,953,581 5,096 2,753,500 17

Deposit at financial institutions with commitment 766,177 2,059,901 766,177 2,059,901

Total 4,282,791 2,969,331 3,767,414 2,585,029

Less Deposit at financial institutions with

commitment (766,177) (2,059,901) (766,177) (2,059,901)

Cash and cash equivalents 3,516,614 909,430 3,001,237 525,128

7. TRADE ACCOUNT RECEIVABLES, NET As of December 31, trade account receivables, net consisted of: THOUSAND BAHT


Related parties

Service receivables

Accrued service income - Subsidiaries - - 34,259 26,907

Accrued service income - Related parties 7,476 9,691 - 2,268

Accrued service income 7,476 9,691 34,259 29,175

Less Allowance for doubtful accounts (7,405) (7,405) - -

Service receivables, net 71 2,286 34,259 29,175

Trade account receivables - related parties, net 71 2,286 34,259 29,175

Other parties

Service receivables

Accrued service income 156,579 107,211 34,892 28,854

Less Allowance for doubtful accounts (22,116) (22,445) (17,257) (19,586)

Service receivables, net 134,463 84,766 17,635 9,268

Real estate sales contracts receivables

Total value of contracts signed 31,001,064 28,859,504 8,414,177 7,879,676

Installments due 30,616,442 28,294,718 8,335,266 7,690,249

Less Installments received (30,555,658) (28,246,504) (8,335,266) (7,690,249)

Installments receivables, net 60,784 48,214 - -

Trade account receivables - other parties, net 195,247 132,980 17,635 9,268


169

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


Accumulated amount recognised as revenue on

percentage of completion basis 30,214,752 27,998,012 8,413,334 7,736,000

Less Installments due (30,616,442) (28,294,718) (8,335,266) (7,690,249)

Net (401,690) (296,706) 78,068 45,751

The balance comprises :

Unbilled completed work 365,485 215,483 78,961 63,381

Unearned income (767,175) (512,189) (893) (17,630)

Net (401,690) (296,706) 78,068 45,751

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


Accrued service income

Less than 3 months 134,463 84,766 17,635 9,268

Over 3 months to 6 months 2,383 868 - 526

Over 6 months to 12 months 199 1,423 - 1,357

Over 12 months 19,534 20,154 17,257 17,703

Total 156,579 107,211 34,892 28,854

Less Allowance for doubtful accounts (22,116) (22,445) (17,257) (19,586)

Accrued service income, net 134,463 84,766 17,635 9,268

Real estate sale contracts receivables

Less than 3 months 60,784 48,214 - -

Over 3 months to 6 months - - - -

Over 6 months to 12 months - - - -

Over 12 months - - - -

Total real estate sale contracts receivables 60,784 48,214 - -

Trade account receivables - other parties, net 195,247 132,980 17,635 9,268

For the allowance for doubtful accounts of related party receivables in the amount of Baht 7.40

million and other parties in the amount of Baht 16.71 million, which obtain facility services in the industrial estate, are provided and charged by the Company. With the economic crisis in 1997 in Thailand, these companies have encountered with operation problem and the Company provided the provision for doubtful debt in full amount as the Company’s basis. Consequently, these companies entered into the Debt Restructure under CDRAC or Business Reorganization Plan under the Bankruptcy Court. The Company has not yet adjusted the provision for these receivables under the Business Reorganization Plan until obtaining the settlement as the Plan or debt restructure from each receivable.


170

Trade account receivables, net (Continued) Balance of Allowance for doubtful accounts and its movement for the years ended December 31, were

as follows: THOUSAND BAHT


Related parties

Beginning balance 7,405 7,405 - -

Additional allowance during the year - - - -

Received during the year - - - -

Ending balance 7,405 7,405 - -

Other parties

Beginning balance 22,445 21,089 19,586 18,028

Additional allowance during the year 4,853 2,353 - 1,944

Received during the year (5,182) (997) (2,329) (386)

Ending balance 22,116 22,445 17,257 19,586

8. UNEARNED INCOME AND INCOME RECEIVED IN ADVANCE As of December 31, unearned income and income received in advance consisted of: THOUSAND BAHT


Unearned income

Sales contracts value (9,407,409) (10,834,878) (211,459) (211,459)

Less Installments received 9,236,825 10,739,822 211,509 225,509

Installments receivables (170,584) (95,056) 50 14,050

Less Deferred income 920,998 607,245 843 3,580

Unearned income 750,414 512,189 893 17,630

Deposit for real estate 23,917 2,000 7,156 2,000

Income received in advance – service and rental 87,552 85,494 3,656 549

Total unearned income and

income received in advance 861,883 599,683 11,705 20,179


171

9. COST OF REAL ESTATE DEVELOPMENTS, NET As at December 31, cost of real estate developments, net consisted of: THOUSAND BAHT


Land cost under developments 8,757,844 7,682,741 1,909,333 1,909,333

Project development costs 14,476,996 13,491,101 4,293,424 4,285,231

Capitalized finance costs 2,604,139 2,571,601 750,000 750,000

Additional utility costs 7,192 7,751 7,022 7,581

Advance for constructions 22,236 3,023 154 1,150

Total 25,868,407 23,756,217 6,959,933 6,953,295

Less Accumulated costs transferred to cost

of land sales (17,101,081) (15,729,303) (5,282,927) (4,878,285)

Accumulated costs transferred to assets for rent (1,576,960) (1,511,095) (46,774) (46,774)

Accumulated costs transferred for debt settlement (143,838) (143,838) (143,838) (143,838)

Cost of real estate developments, net 7,046,528 6,371,981 1,486,394 1,884,398

Capitalized finance costs for the year ended

December 31 included in

cost of real estate developments 32,538 64,041 - 4,125

Information of cost of real estate developments of Hemaraj Land and Development Public Company

Limited, Eastern Industrial Estate Company Limited, Eastern Seaboard Industrial Estate (Rayong) Company Limited, Hemaraj Eastern Seaboard Industrial Estate Company Limited, Hemaraj Saraburi Industrial Land Company Limited, Hemaraj Rayong Industrial Land Company Limited and SME Factory Company Limited is as follows:-

Valuation Stated in the Financial Statements As at December 31, 2010 and 2009, cost of real estate developments is stated at the lower of cost and

net realisable value for the projects in the same area.

Obligation of Assets As at December 31, 2010 and 2009, the portion of land in the projects of the Company and the

subsidiaries has been mortgaged as collateral for loans from local financial institutions, other companies and other person.


172

10.

INVEST

MENTS

IN S

UBSI

DIA

RIE

S AND A

SSOCIA

TES

10

.1

Inve

stm

ents

in

subs

idia

ries

and

ass

ocia

tes

As

at D

ecem

ber

31, t

he C

ompa

ny’s inv

estm

ents

in

subs

idia

ries

and

ass

ocia

tes

wer

e as

fol

lows:

In

vest

men

ts (M

illio

n Bah

t)

Pa

id-u

p Ca

pita

l Pe

rcen

tage

of sh

ares

hel

d Con

solid

ated

fin

ancial

Se

para

te fin

ancial

Net

boo

ked

valu

e in

the

Div

iden

d fo

r th

e ye

ar e

nded

(M

illio

n Ba

ht)

by the

Com

pany

(Pe

rcen

t)

stat

emen

ts

stat

emen

ts (at

Cos

t)

port

ion

of in

vest

men

ts

Dec

embe

r 31

,

Com

pany

20

10

2009

20

10

2009

20

10

2009

20

10

2009

20

10

2009

20

10

2009

Subs

idia

ries

: Com

mon

sha

reho

lder

s

and

co-

dire

ctor

s

Ea

ster

n In

dust

rial

Est

ate

Com

pany

Lim

ited

400.

00

400.

00

99.9

9 99

.99

- -

400.

00

400.

00

493.

04

515.

85

87.0

0 46

2.00

Ea

ster

n Se

aboa

rd Ind

ustr

ial E

stat

e

(Ray

ong)

Com

pany

Lim

ited

358.

00

358.

00

60.0

0 60

.00

- -

214.

80

214.

80

549.

36

550.

13

108.

00

60.0

0

H

emar

aj E

aste

rn S

eabo

ard

Indu

strial

Esta

te C

ompa

ny L

imite

d 1,

000.

00

1,00

0.00

99

.99

99.9

9 -

- 1,

080.

96

1,08

0.96

2,

224.

18

2,07

6.97

24

8.90

50

.00

H

emar

aj S

arab

uri I

ndus

tria

l Lan

d

Com

pany

Lim

ited

(*) (F

orm

erly

kno

wn

as “

SIL

Indu

strial

Lan

d

Com

pany

Lim

ited”

) (1

) 50

0.00

-

99.9

9 -

- -

1,00

3.44

-

1,01

5.01

-

- -

H

emar

aj R

ayon

g In

dust

rial

Lan

d

Com

pany

Lim

ited

(*) (

Form

erly

kno

wn

as

“RIL

Indu

stria

l Lan

d Co

mpa

ny L

imite

d”) (

2)

1,00

0.00

-

99.9

9 -

- -

- -

1,00

7.29

-

- -

Ea

ster

n Pi

pelin

e Se

rvice

s Co

mpa

ny L

imite

d (3)

100.

00

100.

00

99.9

9 99

.99

- -

56.3

4 56

.34

83.1

6 10

8.85

23

.25

17.5

9

H

-Int

erna

tiona

l (BV

I) C

ompa

ny L

imite

d (4

) 0.

08

0.08

10

0.00

10

0.00

-

- 0.

07

0.07

99

7.48

1,

074.

29

- -

H

emar

aj Int

erna

tiona

l Lim

ited

(5)

0.03

0.

03

100.

00

100.

00

- -

0.03

0.

03

0.03

0.

03

- -

H

-Con

stru

ctio

n M

anag

emen

t an

d

Engi

neer

ing

Com

pany

Lim

ited

17.1

5 17

.15

99.9

9 99

.99

- -

17.1

5 17

.15

16.6

5 17

.86

- -

Th

e Pa

rk R

esid

ence

Com

pany

Lim

ited

0.25

0.

25

99.9

9 99

.99

- -

0.25

0.

25

1.92

1.

34

0.90

5.

00

H

emar

aj W

ater

Com

pany

Lim

ited

(6)

100.

00

100.

00

99.9

9 99

.99

- -

- -

126.

04

118.

15

- -

SM

E Fa

ctor

y Co

mpa

ny L

imite

d 37

.00

37.0

0 99

.99

99.9

9 -

- 37

.00

37.0

0 36

.02

37.2

1 -

0.05

H

- P

hoen

ix P

rope

rty

Com

pany

Lim

ited

(7)

480.

00

480.

00

99.9

9 99

.99

- -

480.

00

480.

00

484.

88

483.

57

2.40

6.

40

H

emar

aj C

lean

Wat

er C

ompa

ny L

imite

d 64

5.00

58

0.50

99

.99

99.9

9 -

- 64

5.00

64

5.00

66

8.36

66

3.72

63

.85

50.3

1

In

vest

men

ts in

sub

sidi

arie

s

-

- 3,

935.

04

2,93

1.60

7,

703.

42

5,64

7.97

53

4.30

65

1.35

* Th

e fina

ncia

l st

atem

ents

of

thos

e 2

subs

idia

ries

wer

e au

dite

d by

oth

er a

uditor

. Th

e co

nsol

idat

ed f

inan

cial

sta

tem

ents

as

at D

ecem

ber

31, 20

10 o

f th

e co

mpa

ny inc

lude

d th

e fina

ncia

l st

atem

ent

of t

hose

2

subs

idia

ries

with

the

tota

l as

sets

as

at D

ecem

ber

31, 2

010

in the

am

ount

of Bah

t 1,

499.

92 m

illio

n an

d th

e to

tal re

venu

e as

fro

m O

ctob

er 1

, 201

0 to

Dec

embe

r 31

, 201

0 in

the

am

ount

of Bah

t 29

.42

mill

ion.


173

IN

VEST

MENTS

IN S

UBSI

DIA

RIE

S AND A

SSOCIA

TES

(Con

tinu

ed)

In

vest

men

ts (M

illio

n Bah

t)

Pa

id-u

p Ca

pita

l Pe

rcen

tage

of sh

ares

hel

d Con

solid

ated

fin

ancial

Se

para

te fin

ancial

Net

boo

ked

valu

e in

the

Div

iden

d fo

r th

e ye

ar e

nded

(M

illio

n Ba

ht)

by the

Com

pany

(Pe

rcen

t)

stat

emen

ts

stat

emen

ts (at

Cos

t)

port

ion

of in

vest

men

ts

Dec

embe

r 31

,

Com

pany

20

10

2009

20

10

2009

20

10

2009

20

10

2009

20

10

2009

20

10

2009

Asso

ciat

es: C

omm

on sha

reho

lder

s and

co-d

irector

s

Co

fely

(Th

aila

nd) C

ompa

ny L

imite

d

(For

mer

ly k

nown

as “

Elyo

-H F

acili

ties

Man

agem

ent Li

mite

d”)

50.0

0 50

.00

39.9

9 39

.99

26.9

7 25

.14

20.0

0 20

.00

26.9

7 25

.15

1.80

1.

40

H

emar

aj S

arab

uri I

ndus

tria

l Lan

d

Com

pany

Lim

ited

(For

mer

ly k

nown

as

“SIL

Indu

stria

l Lan

d Co

mpa

ny L

imite

d”) (

1)

- 50

0.00

-

25.0

0 -

276.

01

- 23

9.75

-

265.

03

10.5

0 7.

87

H

emar

aj R

ayon

g In

dust

rial

Lan

d Co

mpa

ny

Lim

ited

(For

mer

ly k

nown

as “

RIL

Indu

strial

Lan

d Co

mpa

ny L

imite

d”) (2

) -

1,00

0.00

-

25.0

0 -

- -

- -

- -

-

GH

ECO –

One

Com

pany

Lim

ited

(8)

7,71

9.00

32

4.00

35

.00

35.0

0 3,

188.

88

207.

12

2,70

1.65

11

3.40

3,

188.

88

207.

12

- -

H

ouay

Ho

Thai

Com

pany

Lim

ited

(9)

527.

69

527.

69

51.0

0 51

.00

263.

53

255.

14

267.

22

267.

22

285.

39

277.

17

1.62

-

H

ouay

Ho

Power

Com

pany

Lim

ited

(9)

50.0

0 50

.00

12.7

5 12

.75

- -

- -

- -

- -

(Mill

ion

USD

) (M

illio

n USD

)

In

vest

men

ts in

ass

ocia

tes

3,47

9.38

76

3.41

2,

988.

87

640.

37

3,50

1.24

77

4.47

13

.92

9.27

Tota

l inv

estm

ents

3,

479.

38

763.

41

6,92

3.91

3,

571.

97

11,2

04.6

6 6,

422.

44

548.

22

660.

62

Divide

nd in

com

e fo

r the

yea

rs e

nded

Dec

embe

r 31

Su

bsid

iaries

53

4.30

65

1.35

As

sociat

es

13.9

2 9.

27

Oth

er c

ompa

nies

63

.12

34.9

2

Tota

l

611.

34

695.

54

(1)

In 2

010,

the

Com

pany

has

pai

d fo

r in

vest

men

t ac

quisitio

n in

Hem

araj

Sar

abur

i In

dust

rial

Lan

d Com

pany

Lim

ited

(H

SIL)

to

Cem

enth

ai H

oldi

ng C

ompa

ny L

imited

(CH

C) in

the

am

ount

of Bah

t 76

3.69

mill

ion

(Not

e 10

.2).

(2)

99.9

9% ind

irec

tly

held

by

Hem

araj

Sar

abur

i In

dust

rial

Lan

d Com

pany

Lim

ited

. (3

) 74

.99%

direc

tly

held

by

the

Com

pany

and

25%

ind

irec

tly

held

by

Eas

tern

Ind

ustr

ial Est

ate

Com

pany

Lim

ited

. (4

) H

-Int

erna

tion

al (

BVI) C

ompa

ny L

imited

was

reg

iste

red

in t

he B

ritish

Virgi

n Is

land

s (U

S. c

urre

ncy

is u

sed

for

busine

ss o

pera

tion

). No

Thai

inc

ome

tax

has

been

acc

rued

for

und

istr

ibut

ed n

et inc

ome

of t

he

over

seas

sub

sidi

ary,

sin

ce the

net

inc

ome

are

inte

nd to

be r

etai

ned

by the

sub

sidi

ary

for

rein

vest

men

t pu

rpos

es.

(5)

Hem

araj

Int

erna

tion

al L

imited

was

reg

iste

red

in the

Cay

man

Islan

ds (US.

cur

renc

y is u

sed

for

busine

ss o

pera

tion

). Th

e Com

pany

obt

aine

d th

e in

form

atio

n fr

om the

fin

ancial

sta

tem

ents

whi

ch w

ere

prep

ared

by

the

sub

sidi

ary’

s m

anag

emen

t an

d wer

e no

t au

dite

d by

an

audi

tor. N

ever

thel

ess, i

ts t

otal

ass

ets

and

net

prof

it p

rese

nted

in

the

fina

ncia

l st

atem

ents

wer

e im

mat

eria

lity

to t

he c

onso

lidat

ed f

inan

cial

st

atem

ents

.


174

(6) 99.99% indirectly held by Hemaraj Clean Water Company Limited (7) In 2009, H – Phoenix Property Company Limited had called for fully paid up capital and registered to decrease share capital to

Baht 480 million. (8) 35% directly held by the Company in GHECO – One Company Limited. In 2010, the Company had paid the share capital increase to GHECO – One Company Limited, in the total amount of Baht 2,588.25

million to maintain the existing proportion of shareholding structure. (9) 51% directly held by the Company in Houay Ho Thai Company Limited that has held 25% in Houay Ho Power Company Limited, a

company registered in Lao People’s Democratic Republic (US. currency is used for business operation). The Company did not include the financial statements of Houay Ho Thai Company Limited in the consolidated financial statements since the Company is the strategic partner. Other investor has capability to operate the power plant and provides financial support for the Company to invest in Houy Ho Thai Company Limited which was already repaid in 2010.

10.2 Acquisition

On October 1, 2010, the Company has paid for 75% investment acquisition in Hemaraj Saraburi Industrial Land Company Limited (HSIL) to Cementhai Holding Company Limited (CHC) in the amount of Baht 763.69 million, resulting in shareholding from previous 25% to 99.99% investment in HSIL. HSIL held 99.99% investment in Hemaraj Rayong Industrial Land Company Limited (HRIL) resulting in the Company to be parent company of both HSIL and HRIL. As a result, the Company’s consolidated financial statements have already included those two subsidiaries’ balance sheets as of December 31, 2010 and statements of income from October 1, 2010 to December 31, 2010.

In addition to the investment by exercising the option to acquire the remaining shares of 75%, the Company granted loan to HSIL in the amount of Baht 380 million in order to repay the long term loan to CHC.

On October 1, 2010, the Company’s payment of Baht 763.69 million for the additional investment acquisition of those two subsidiaries resulted in a gain from a bargain purchase presenting a profit of Baht 144.15 in the consolidated statements of income for the year ended December 31, 2010. The details of the acquisitions were as follows:

(Unit : Thousand Baht)

Net fair value of assets and liabilities Assets Cash and cash equivalents 34,731 Trade account receivables 19,452 Cost of real estate developments 1,504,000 Other current assets 2,091 Property, plant and equipment, net 52,909 Other non - current assets 25 1,613,208 Liabilities Trade account payables 10,343 Short - term loans from related parties 380,000 Accrued income tax 10,778 Other current liabilities 22,676 423,797 Net assets value 1,189,411 Cash paid for acquisition and fair value of equity as held before acquisition Fair value of equity as held before acquisition ( 25%) 280,314 Cash paid for acquisition on October 1, 2010 (75%) 763,689 1,044,003 Gain from bargain purchase 145,408

INVESTMENTS IN SUBSIDIARIES AND ASSOCIATES (Continued)


175

The 2 subsidiaries contributed consolidated revenues of Baht 29.32 million and consolidated net loss of Baht 1.87 million to the Consolidated financial statement of the company for the period from October 1, 2010 to December 31, 2010. If the acquisition had occurred on January 1, 2010, consolidated revenue and consolidated net profit for the year ended December 31, 2010 of 2 subsidiaries would have been Baht 252.57 million and Baht 92.23 million respectively.

11. OTHER LONG - TERM INVESTMENTS, NET As at December 31, other long-term investments, net consisted of: THOUSAND BAHT


Investments in related parties

Sriracha Harbor Public Company Limited 15,000 15,000 - -

Eastern Fluid Transport Company Limited 1,500 1,500 - -

Total 16,500 16,500 - -

Less Provision for impairment loss on investments (15,000) (15,000) - -

Other long-term investments - related parties, net 1,500 1,500 - -

Others

Glow IPP Company Limited 142,500 142,500 142,500 142,500

Other company 1,000 1,000 - -

Total 143,500 143,500 142,500 142,500

Less Provision for impairment loss on investment (717) (717) - -

Other long-term investments - others, net 142,783 142,783 142,500 142,500

Other long-term investments, net 144,283 144,283 142,500 142,500


176

12.

ASS

ETS

FOR R

ENT,

NET

As

at D

ecem

ber

31, 2

010

and

2009

, ass

ets

for

rent

, net

con

sist

ed o

f:

(U

nit : T

hou

sand

Bah

t)

Cha

nges

in

Cos

t Cha

nges

in

Acc

umul

ated

Dep

reciat

ion

Net

Boo

k Val

ue

Dispo

sal/

Dispo

sal/

Beg

inni

ng

Add

itio

n Tr

ansf

er

End

ing

Beg

inni

ng

Dep

reciat

ion

Tran

sfer

End

ing

Beg

inni

ng

End

ing

Con

solid

ated

fin

ancial

sta

tem

ents

La

nd (*)

38

8,52

4 -

(2,1

44)

386,

380

- -

- -

388,

524

386,

380

Bui

ldin

gs (*)

1,

917,

051

- 20

,381

1,

937,

432

392,

263

96,3

38

(9,8

06)

478,

795

1,52

4,78

8 1,

458,

637

Bui

ldin

g im

prov

emen

ts

13,4

37

944

(145

) 14

,236

7,

220

1,58

8 (2

8)

8,78

0 6,

217

5,45

6

Fu

rnitur

e an

d fixt

ure

3,40

7 58

2 -

3,98

9 89

1 78

1 -

1,67

2 2,

516

2,31

7

Pi

pe r

ack

242,

064

31,7

54

25,0

40

298,

858

111,

754

18,8

74

- 13

0,62

8 13

0,31

0 16

8,23

0

Con

stru

ctio

n in

pro

gres

s 25

,040

-

(25,

040)

-

- -

- -

25,0

40

-

Ass

ets

for

rent

, net

2,

589,

523

33,2

80

18,0

92

2,64

0,89

5 51

2,12

8 11

7,58

1 (9

,834

) 61

9,87

5 2,

077,

395

2,02

1,02

0

Sepa

rate

fin

ancial

sta

tem

ents

La

nd (*)

32

,740

-

(891

) 31

,849

-

- -

- 32

,740

31

,849

Bui

ldin

gs (*)

70

,897

-

(1,3

24)

69,5

73

13,1

29

3,52

6 (1

81)

16,4

74

57,7

68

53,0

99

Bui

ldin

g im

prov

emen

ts

884

- -

884

68

44

- 11

2 81

6 77

2

Ass

ets

for

rent

, net

10

4,52

1 -

(2,2

15)

102,

306

13,1

97

3,57

0 (1

81)

16,5

86

91,3

24

85,7

20

Con

solid

ated

Se

para

te

fina

ncia

l st

atem

ents

fina

ncia

l st

atem

ents

20

10

2009

20

10

2009

Dep

reciat

ions

whi

ch inc

lude

d in

sta

tem

ents

of in

com

e fo

r th

e ye

ars

ende

d Dec

embe

r 31

:

Cos

t of

ser

vice

s

11

7,58

1 11

3,49

4 3,

570

3,58

9

(*)

Land

and

Bui

ldin

gs w

ere

tran

sfer

red

from

rea

l es

tate

dev

elop

men

t co

st.

As

at D

ecem

ber

31, 2

010

and

2009

, the

ass

ets

for

rent

of th

e Com

pany

and

the

sub

sidi

arie

s ha

ve b

een

mor

tgag

ed a

s co

llate

ral fo

r lo

ans

from

loc

al fin

ancial

ins

titu

tion

s an

d ot

her

pers

on.


177

13.

PROPE

RTY

, PLA

NT

AND E

QUIP

MENT,

NET

As

at D

ecem

ber

31, 2

010

and

2009

, pro

pert

y, p

lant

and

equ

ipm

ent, n

et c

onsist

ed o

f:

(U

nit : T

hou

sand

Bah

t)

Cha

nges

in

Cos

t Cha

nges

in

Acc

umul

ated

Dep

reciat

ion

Net

Boo

k Val

ue

Dispo

sal/

Dispo

sal/

Beg

inni

ng

Add

itio

n (*

) Tr

ansf

er

End

ing

Beg

inni

ng D

epre

ciat

ion

(*)

Tran

sfer

End

ing

Beg

inni

ng

End

ing

Con

solid

ated

fin

ancial

sta

tem

ents

La

nd

4,

579

1,42

0 -

5,99

9 -

- -

- 4,

579

5,99

9

Bui

ldin

gs a

nd s

truc

ture

13

8,81

5 73

,229

44

,373

25

6,41

7 51

,054

53

,571

-

104,

625

87,7

61

151,

792

Bui

ldin

g im

prov

emen

ts

8,87

6 37

3,16

5 2,

583

384,

624

5,65

1 36

8,77

7 -

374,

428

3,22

5 10

,196

Fu

rnitur

e, fix

ture

and

equ

ipm

ent

196,

738

277,

936

3,86

5 47

8,53

9 12

1,89

9 28

1,50

5 -

403,

404

74,8

39

75,1

35

Veh

icle

s 96

,803

17

,765

(4

19)

114,

149

65,9

50

16,5

25

(419

) 82

,056

30

,853

32

,093

Raw

wat

er p

ipe

129,

167

13,2

81

74,3

09

216,

757

12,6

29

11,4

33

- 24

,062

11

6,53

8 19

2,69

5

Res

ervo

ir

26,3

15

- -

26,3

15

6,83

3 3,

230

- 10

,063

19

,482

16

,252

Po

tabl

e wat

er p

rodu

ctio

n sy

stem

10

0,50

6 -

- 10

0,50

6 12

,446

5,

222

- 17

,668

88

,060

82

,838

Con

stru

ctio

n in

pro

gres

s 24

,946

11

7,43

7 (1

25,1

30)

17,2

53

- -

- -

24,9

46

17,2

53

To

tal

726,

745

874,

233

(419

) 1,

600,

559

276,

462

740,

263

(419

) 1,

016,

306

450,

283

584,

253

Le

ss

Res

erve

for

im

pairm

ent lo

ss o

f as

sets

*

(1

0,16

6)

(10,

166)

Prop

erty

, pla

nt a

nd e

quip

men

t, n

et

440,

117

574,

087

• In

clus

ive

of a

sset

s fr

om a

cqui

sition

in

cost

of Bah

t 71

3.46

mill

ion

and

accu

mul

ated

dep

reciat

ion

of B

aht 67

6.81

mill

ion.

In

case

of ex

clus

ive

of s

uch

asse

ts, fo

r th

e ye

ar e

nded

Dec

embe

r 31

, 201

0, the

add

itio

nal

cons

olid

ated

ass

ets

was

Bah

t 16

0.77

mill

ion

and

cons

olid

ated

dep

reciat

ion

was

Bah

t 63

.45

mill

ion.


178

Pr

oper

ty, p

lant

and

equ

ipm

ent, n

et (co

ntin

ued)

(Unit: Thou

sand

Bah

t)

Cha

nges

in

Cos

t Cha

nges

in

Acc

umul

ated

Dep

reciat

ion

Net

Boo

k Val

ue

Dispo

sal/

Dispo

sal/

Beg

inni

ng

Add

itio

n Tr

ansf

er

End

ing

Beg

inni

ng

Dep

reciat

ion

Tran

sfer

End

ing

Beg

inni

ng

End

ing

Sepa

rate

fin

ancial

sta

tem

ents

La

nd

2,

983

- -

2,98

3 -

- -

- 2,

983

2,98

3

Bui

ldin

gs a

nd s

truc

ture

88

,874

-

- 88

,874

25

,907

5,

716

- 31

,623

62

,967

57

,251

Bui

ldin

g im

prov

emen

ts

3,48

2 -

- 3,

482

3,29

0 54

-

3,34

4 19

2 13

8

Fu

rnitur

e, fix

ture

and

equ

ipm

ent

78,1

66

3,02

6 -

81,1

92

61,4

72

6,16

8 -

67,6

40

16,6

94

13,5

52

Veh

icle

s 44

,927

11

,341

-

56,2

68

36,2

32

4,65

8 -

40,8

90

8,69

5 15

,378

Raw

wat

er p

ipe

6,00

8 -

- 6,

008

3,41

5 40

0 -

3,81

5 2,

593

2,19

3

Con

stru

ctio

n in

pro

gres

s 72

4 -

- 72

4 -

- -

- 72

4 72

4

Tota

l 22

5,16

4 14

,367

-

239,

531

130,

316

16,9

96

- 14

7,31

2 94

,848

92

,219

Le

ss

Res

erve

for

im

pairm

ent

lo

ss o

f as

sets

*

(724

) (7

24)

Pr

oper

ty, p

lant

and

equ

ipm

ent, n

et

94

,124

91

,495

Con

solid

ated

Se

para

te

fina

ncia

l st

atem

ents

fina

ncia

l st

atem

ents

20

10

2009

20

10

2009

Dep

reciat

ions

whi

ch inc

lude

d in

sta

tem

ents

of in

com

e fo

r th

e ye

ars

ende

d Dec

embe

r 31

:

Cos

t of

ser

vice

s

41

,488

32

,399

2,

021

1,90

5

Se

lling

and

adm

inistr

ativ

e ex

pens

es

21,9

65

24,0

67

14,9

75

16,5

22

To

tal Dep

reciat

ion

for

the

year

s

63

,453

56

,466

16

,996

18

,427

Cos

t of

the

pro

pert

y, p

lant

and

equ

ipm

ent whi

ch h

ave

been

ful

ly d

epre

ciat

ed b

ut a

re s

till

in u

se

763,

692

113,

859

81,4

38

65,8

30

* Res

erve

for

im

pairm

ent lo

ss o

f as

sets

is

prov

ided

for

the

cea

sed

cons

truc

tion

in

prog

ress

.

As

at D

ecem

ber

31, 2

010

and

2009

, the

lan

d with

build

ing

and

stru

ctur

e of

the

Com

pany

and

the

sub

sidi

arie

s ha

ve b

een

mor

tgag

ed a

s co

llate

ral fo

r lo

ans

from

loc

al fin

ancial

ins

titu

tion

s.


179

14. LEASEHOLD LAND AND LAND HELD FOR COMMERCIAL PURPOSES, NET As at December 31, leasehold land and land held for commercial purposes, net consisted of: THOUSAND BAHT


Land bank 10,201 10,201 10,201 10,201

Land cost of projects suspended from developments 1,135,711 1,135,711 1,135,711 1,135,711

Suspended development project costs 268,452 268,452 268,452 268,452

Capitalized finance costs 556,119 556,119 556,119 556,119

Leasehold land 77,077 77,077 77,077 77,077

Total 2,047,560 2,047,560 2,047,560 2,047,560

Less Accumulated cost of sales (841,514) (841,514) (841,514) (841,514)

Accumulated costs transferred for debt

settlement (645,413) (645,413) (645,413) (645,413)

Loss on projects evaluation (245,696) (245,696) (245,696) (245,696)

Leasehold land and land held for commercial

purposes, net 314,937 314,937 314,937 314,937

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

Valuation Stated in the Financial Statements In 2008, the leasehold land and land held for commercial purposes have been appraised by an

independent appraisal company which caused diminution from assets appraisal in 2006. The Company recorded such decline as “Provision for loss on diminution in value of real estate development cost” amounting to Baht 11.20 million in statements of income for the year ended December 31, 2008.

Obligation of Assets As at December 31, 2010 and 2009, portion of land in the projects of the Company and the

subsidiaries has been mortgaged as collateral for loans from local financial institutions. 15. SINKING FUND, NET As disclosed in the Note 29 to the financial statements, the Company and its subsidiaries had

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


180

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


Sinking Fund 183,777 180,423 52,405 52,405

Less Accumulated amortization (103,468) (98,063) (32,721) (31,191)

Sinking fund, net 80,309 82,360 19,684 21,214

16. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS

Short-term loans from local financial institutions As at December 31, 2009, the Company had short-term loans from several local financial institutions

in the amount of Baht 450 million, with interest rate as at December 31, 2009 ranging between 4.40% to 5.375% per annum.

Bank overdraft As at December 31, 2010 and 2009, the Company and its subsidiaries have overdraft credit limit from

local financial institutions in the amount of Baht 160 million and Baht 140 million, respectively. The interest rate is charged at MOR and MOR+0.50% per annum. Such overdraft is guaranteed by the mortgage on partial land and structure in the projects of real estate development of the Company and its subsidiaries.

17. SHORT-TERM LOANS FROM OTHER PARTIES AND OTHER PERSONS As at December 31, short-term loans from other parties and other persons consisted of: THOUSAND BAHT


Bill of exchange discounted at 2.90-3.75 %

without collateral

- Other parties - 380,000 - 380,000

- Other persons - 40,000 - 40,000

Promissory note at 4.75% - 5.50% interest rate

- Other person 30,000 30,000 - -

Total short-term loans from other parties

and other persons 30,000 450,000 - 420,000


181

18. Debentures In 2010, the Company had issued unsubordinated and unsecured debentures in the amount of Baht

6,000 million (6,000,000 units at Baht 1,000 each) with principal amount of Baht 1,000 by private placement, institution investors and high net worth individual as follows:-

No. Date Maturity date Interest rate Amount (Thousand Baht)

1/2010 March 5, 2010 March 5, 2013 4.50% 450,000 2/2010 April 8, 2010 April 8, 2013 4.50% 562,000 April 8, 2010 April 8, 2014 4.90% 400,000 3/2010 May 25, 2010 May 25, 2013 4.50 % 150,000 May 25, 2010 May 25, 2015 Year 1-3 : 4.90%, 1,500,000 Year 4 : 5.80% and Year 5 : 6.50% 4/2010 July 21, 2010 July 21, 2017 Year 1-3 : 4.90%, 2,300,000 Year 4-6 : 6.00% and Year 7 : 6.50% 5/2010 October 5, 2010 October 5, 2019 Year 1-3 : 4.90%, 638,000 Year 4-6 : 6.00%, Year 7 : 6.50% and Year 8-9 : 6.75%Total 6,000,000 19. LONG-TERM LOANS AND ADVANCE FROM RELATED PARTY As at December 31, 2010, the Company had loans and advance from H-International (BVI) Company

Limited, an oversea subsidiary, amounting to USD 21.66 million and Baht 332.38 million (2009 : USD 21.66 million and Baht 332.48 million) which do not have the maturity date and the interest charge.


182

20.

OTH

ER L

ONG-T

ERM

LOANS

As

at D

ecem

ber

31, o

ther

lon

g-te

rm loa

ns c

onsist

ed o

f:

Lo

an c

ondi

tion

Bal

ance

s

Inte

rest

pay

men

t (M

illio

n Bah

t)

Cre

dit lin

e

Inte

rest

rat

e

(M

illio

n Bah

t)

Cre

dit pe

riod

Pr

incipa

l re

paym

ent

Term

pe

r an

num

(%

) 20

10

2009

Hem

araj

Lan

d an

d Dev

elop

men

t Pu

blic C

ompa

ny L

imited

A.

Loan

fro

m loc

al c

omm

ercial

ban

k co

nsiste

d of

:

A.1

45

0 Ju

ne 2

008

-

28 q

uart

erly

ins

tallm

ents

, com

men

cing

fro

m the

9th

End

of m

onth

Yea

r 1-

2: M

LR-1

.50,

35

0.00

40

0.00

Dec

embe

r 20

15

mon

th a

fter

the

first

dra

wdo

wn.

Yea

r 3-

4: M

LR-1

.125

,

Inst

allm

ent 1-

12 : B

ath

12.5

0 m

illio

n ea

ch;

Yea

r 5:

MLR

–1.

00

Inst

allm

ent 13

-20

: Bat

h 15

.00

mill

ion

each

;

Inst

allm

ent 21

-27

: Bat

h 22

.50

mill

ion

each

; and

Inst

allm

ent 28

: r

epai

d al

l re

mai

ning

bal

ance

A.2

50

0 Dec

embe

r 20

08 -

16 q

uart

erly

ins

tallm

ents

, com

men

cing

fro

m M

arch

201

0.

End

of m

onth

M

LR+0

.50

450.

00

500.

00

Dec

embe

r 20

13

Inst

allm

ent 1-

8 : B

ath

12.5

0 m

illio

n ea

ch;

Inst

allm

ent 9-

12 : B

ath

37.5

0 m

illio

n ea

ch; a

nd

Inst

allm

ent 13

-16

: Bat

h 62

.50

mill

ion

each

.

A.3

70

0 M

arch

200

9 -

Rep

aym

ent whe

n m

ortg

age

of c

ondo

min

ium

is

rele

ased

. End

of m

onth

Yea

r 1

MLR

-1.0

0,

328.

75

589.

81

M

arch

201

2

Yea

r 2

MLR

-0.7

5,

Yea

r 3

MLR

-0.5

0

A.4

43

6 Dec

embe

r 20

09 -

six-

mon

th ins

tallm

ents

, com

men

cing

fro

m the

13r

d

End

of m

onth

M

LR

- 28

0.00

Dec

embe

r 20

14

mon

th a

fter

the

first

dra

wdo

wn.

Inst

allm

ent 1

: Bat

h 92

.00

mill

ion

each

;

Inst

allm

ent 2-

7 : B

ath

53.0

0 m

illio

n ea

ch;

Inst

allm

ent 8

: Bat

h 13

.00

mill

ion

each

; and

Inst

allm

ent 9

: rep

aid

all re

mai

ning

bal

ance

Or

repa

ymen

t whe

n m

ortg

age

of lan

d is r

elea

sed.


183

Oth

er lon

g-te

rm loa

ns (co

ntin

ued)

Loan

con

dition

Bal

ance

s

Inte

rest

pay

men

t (M

illio

n Bah

t)

Cre

dit lin

e

Inte

rest

rat

e

(M

illio

n Bah

t)

Cre

dit pe

riod

Pr

incipa

l re

paym

ent

Term

pe

r an

num

(%

) 20

10

2009

A.5

1,

000

Not

yet

sta

rted

Si

x-m

onth

ins

tallm

ents

, com

men

cing

fro

m the

13r

d

End

of m

onth

M

LR

- -

th

e firs

t dr

awdo

wn

mon

th a

fter

the

first

dra

wdo

wn.

Inst

allm

ent 1

: Bat

h 20

8.00

mill

ion

each

;

Inst

allm

ent 2-

7 : B

ath

122.

00 m

illio

n ea

ch;

Inst

allm

ent 8

: Bat

h 30

.00

mill

ion

each

; and

Inst

allm

ent 9

: rep

aid

all re

mai

ning

bal

ance

Or

repa

ymen

t whe

n m

ortg

age

of lan

d is r

elea

sed.

A.6

33

2 Fe

brua

ry 2

010

- One

tim

e re

paym

ent on

the

60t

h m

onth

after

the

first

End

of m

onth

M

LR

17.3

4 -

Fe

brua

ry 2

015

draw

down.

Or

repa

ymen

t whe

n m

ortg

age

of lan

d

is r

elea

sed.

A.7

80

0 Dec

embe

r 20

10 -

Qua

rter

ly ins

tallm

ents

, com

men

cing

fro

m the

yea

r 20

12.

End

of m

onth

M

LR –

1.5

0 20

0.00

-

M

arch

201

7 Yea

r 20

12 : Ins

tallm

ent Bat

h 38

.50

mill

ion

each

;

Yea

r 20

13-2

015

: Ins

tallm

ent Bat

h 43

.25

mill

ion

each

;

Yea

r 20

16 : Ins

tallm

ent Bat

h 31

.75

mill

ion

each

; and

Yea

r 20

17 : r

epai

d al

l re

mai

ning

bal

ance

Or

repa

ymen

t whe

n m

ortg

age

of lan

d is r

elea

sed.

To

tal

4,21

8 (*

)

1,

346.

09

1,76

9.81

(*)

Cur

rent

por

tion

of lo

ng ter

m loa

ns in

the

sepa

rate

fin

ancial

sta

tem

ents

for

the

yea

rs the

n en

ded

Dec

embe

r 31

, 201

0 an

d 20

09 is

Bah

t 35

3.75

mill

ion

and

Bah

t 38

9.81

mill

ion,

res

pect

ivel

y.

Cur

rent

por

tion

of lo

ng - ter

m loa

ns b

y sc

hedu

led

tran

sfer

in

the

sepa

rate

fin

ancial

sta

tem

ents

for

the

yea

rs the

n en

ded

Dec

embe

r 31

, 201

0 an

d 20

09 is

Bah

t 17

.34

mill

ion

and

Bah

t 24

4.89

mill

ion,

res

pect

ivel

y.


184

Oth

er lon

g-te

rm loa

ns (co

ntin

ued)

Loan

con

dition

Bal

ance

s

Inte

rest

pay

men

t (M

illio

n Bah

t)

Cre

dit lin

e

Inte

rest

rat

e

(M

illio

n Bah

t)

Cre

dit pe

riod

Pr

incipa

l re

paym

ent

Term

pe

r an

num

(%

) 20

10

2009

Eas

tern

Sea

boar

d In

dust

rial

Est

ate

(Ray

ong)

Com

pany

Lim

ited

A.

Loan

fro

m loc

al c

omm

ercial

ban

ks c

onsist

ed o

f:

A.1

30

0 Ja

nuar

y 20

09 -

Qua

rter

ly ins

tallm

ents

, Bah

t 12

.00

mill

ion

each

,

End

of m

onth

M

LR-0

.75

55.0

6 10

3.06

Dec

embe

r 20

11

com

men

cing

fro

m M

arch

200

9. O

r re

paym

ent whe

n

mor

tgag

e of

lan

d is r

elea

sed.

Dec

embe

r 20

03 -

Rep

aym

ent whe

n m

ortg

age

of lan

d is r

elea

sed.

End

of m

onth

Yea

r 1-

3: M

LR-2

.00,

Dec

embe

r 20

08

Yea

r 4-

5: M

LR-1

.00

A.2

50

Ju

ly 2

005

- 60

mon

ths

inst

allm

ents

, Bah

t 0.

84 m

illio

n ea

ch,

End

of m

onth

Yea

r 1-

2: M

LR-1

.75,

0.

69

10.7

0

Ju

ly 2

011

com

men

cing

fro

m the

13t

h m

onth

after

the

first

Yea

r 3-

4: M

LR-1

.25,

draw

down,

and

the

rem

aini

ng w

ill b

e re

paid

in

the

Yea

r 5-

6: M

LR-1

.00

last

per

iod.

A.3

80

Dec

embe

r 20

06 -

Qua

rter

ly ins

tallm

ents

, Bah

t 5

mill

ion

each

, com

men

cing

End

of m

onth

Yea

r 1:

MLR

-1.0

0,

- 15

.73

Dec

embe

r 20

11

from

the

15t

h m

onth

after

the

first

dra

wdo

wn.

Yea

r 2:

MLR

-0.7

5,

Yea

r 3:

MLR

-0.5

0,

Yea

r 4-

5: M

LR

A.4

17

5 Se

ptem

ber

2008

-

25 q

uart

erly

ins

tallm

ents

, Bah

t 7.

0 m

illio

n ea

ch,

End

of m

onth

M

LR-1

.50

90.0

0 11

8.00

Se

ptem

ber

2015

co

mm

encing

fro

m the

13t

h m

onth

after

the

first

draw

down

and

the

rem

aini

ng w

ill b

e re

paid

in

the

last

period

. Or

repa

ymen

t whe

n m

ortg

age

of lan

d an

d

cons

truc

tion

is

rele

ased

.

B.

Loan

s fr

om o

ther

per

sons

con

sist

ed o

f:

B.1

63

M

arch

200

8 -

Qua

rter

ly ins

tallm

ents

, Bah

t 3

mill

ion

each

, com

men

cing

End

of m

onth

M

LR-0

.875

of

18.0

0 45

.00

M

arch

201

1

from

Sep

tem

ber

2008

.

Kas

ikor

nban

k Pl

c.

To

tal

668

163.

75

292.

49


185

Oth

er lon

g-te

rm loa

ns (co

ntin

ued)

Loan

con

dition

Bal

ance

s

Inte

rest

pay

men

t (M

illio

n Bah

t)

Cre

dit lin

e

Inte

rest

rat

e

(M

illio

n Bah

t)

Cre

dit pe

riod

Pr

incipa

l re

paym

ent

Term

pe

r an

num

(%

) 20

10

2009

Hem

araj

Eas

tern

Sea

boar

d In

dust

rial

Est

ate

Com

pany

Lim

ited

A.

Loan

fro

m loc

al c

omm

ercial

ban

k co

nsiste

d of

:

A.1

80

0 Dec

embe

r 20

05 -

Rep

aym

ent whe

n m

ortg

age

of lan

d is r

elea

sed.

End

of m

onth

M

LR-1

.00

151.

35

228.

30

Dec

embe

r 20

10

A.2

24

5 Ju

ne 2

007

- 2

year

s gr

ace

period

, qua

rter

ly ins

tallm

ents

, Bah

t 20

.42

End

of m

onth

M

LR-1

.00

115.

24

196.

92

Ju

ne 2

012

mill

ion

each

, com

men

cing

fro

m y

ear

3. T

he d

ebt m

ust

be ful

ly r

epai

d withi

n 5

year

s sinc

e th

e co

ntra

ct d

ate.

Or

repa

ymen

t whe

n m

ortg

age

of lan

d is r

elea

sed.

A.3

24

5 Nov

embe

r 20

08 -

24 q

uate

rly

instal

lmen

ts, B

aht 12

.09

mill

ion

each

, com

men

cing

End

of m

onth

M

LR-1

.00

125.

73

232.

91

Nov

embe

r 20

15

from

the

13t

h m

onth

after

con

trac

t da

te. O

r re

paym

ent

whe

n m

ortg

age

of lan

d an

d co

nstr

uction

is

rele

ased

.

To

tal

1,29

0

39

2.32

65

8.13

Eas

tern

Ind

ustr

ial Est

ate

Com

pany

Lim

ited

A.

Loan

fro

m loc

al c

omm

ercial

ban

k co

nsiste

d of

:

A.1

30

0 M

ay 2

009

- 12

qua

terly

inst

allm

ents

, Bah

t 37

.50

mill

ion

each

. Or

End

of m

onth

Yea

r 1

MLR

-1,

54.8

1 12

9.81

M

ay 2

012

repa

ymen

t whe

n m

ortg

age

of lan

d is r

elea

sed.

Yea

r 2-

3 M

LR-0

.75

To

tal

300

54.8

1 12

9.81

Hem

araj

Wat

er C

ompa

ny L

imited

A.

Loan

fro

m loc

al c

omm

ercial

ban

k co

nsiste

d of

:

A.1

80

Dec

embe

r 20

06 -

60 m

onth

s in

stal

lmen

ts, B

aht 1.

34 m

illio

n ea

ch,

End

of m

onth

Yea

r 1-

2: M

LR-0

.50,

23

.94

40.0

2

Dec

embe

r 20

12

com

men

cing

fro

m the

13t

h m

onth

after

the

con

trac

t sign

ed

Yea

r 3

onwar

ds:

date

, and

the

rem

aini

ng w

ill b

e re

paid

in

the

last

per

iod.

MLR

–0.

25

To

tal

80

23.9

4 40

.02

Gra

nd tot

al

6,55

6

1,

980.

91

2,89

0.26

Less

Cur

rent

por

tion

of ot

her

long

-ter

m loa

ns

(6

56.4

3)

(719

.48)

Cur

rent

por

tion

of lo

ng - ter

m loa

ns b

y sc

hedu

led

tran

sfer

*

(93.

50)

(311

.64)

Oth

er lon

g-te

rm loa

ns, n

et

1,23

0.98

1,

859.

14

Such

oth

er lon

g-te

rm loa

ns a

re g

uara

ntee

d by

the

mor

tgag

e of

mos

t of

lan

d in

the

rea

l es

tate

dev

elop

men

t pr

ojec

ts a

nd a

sset

s fo

r re

nt o

f th

e Com

pany

and

its

sub

sidi

arie

s.

* Cur

rent

por

tion

of lo

ng - ter

m loa

ns b

y sc

hedu

led

tran

sfer

is

estim

ated

fro

m the

loa

ns p

aym

ents

to

the

fina

ncia

l in

stitut

ions

for

the

lan

d title

deed

to

be tra

nsfe

rred

in

acco

rdan

ce w

ith

the

loan

s co

ntra

cts.


186

21. WARRANTS According to the resolutions of the Annual General Meeting of Shareholders dated April 30, 1999, the

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

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

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

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

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

As at September 30, 2009, there were outstanding 4,202,737 units of unexercised warrants which is no longer being registered security in the Stock Exchange of Thailand since September 16, 2009 and can no longer be exercised.

22. STATUTORY RESERVE AND DIVIDEND

Statutory Reserve of the Company Under the Public Limited Company Act B.E. 2535, the Company is required to set aside as a

statutory reserve at least 5% of its net profit after deducting accumulated deficit brought forward (if any) until the reserve reaches 10% of the registered share capital. The statutory reserve is not available for dividend distributions.

As at December 31, 2010 and 2009, the Company had allocated profit amount of Baht 31.36 million and Baht 29.83 million, respectively as a statutory reserve.

Statutory Reserve of the Subsidiaries Under the Civil and Commercial Code, the subsidiaries are required to set aside as a statutory

reserve at least 5% of its net profit every dividend declaration until the reserve reaches 10% of the registered share capital. The statutory reserve is not available for dividend distributions.

As at December 31, 2010 and 2009, the subsidiaries had allocated profit amount of Baht 21.22 million and Baht 37.98 million as a statutory reserve, respectively.


187

Dividend Dividend paid Dividend

Dividend Approved by (Million Baht) per share Payment date

2010

Interim dividend for The Board of Directors’ Meeting 242.58 0.025 September 8, 2010

year 2010 held on August 10, 2010

Dividend from the profit of The Board of Directors’ Meeting 291.15 0.030 May 17, 2010

year 2009 held on February 26, 2010 and

the 2010 Annual General

Meeting of Shareholders on

April 29, 2010

Total dividend paid during

year 2010 533.73 0.055

2009

Dividend from the profit The Board of Directors’ Meeting 328.36 0.035 May 15, 2009

of year 2008 on February 27, 2009 and the

2009 Annual General Meeting

of Shareholders on April 29, 2009

Total dividend paid during

year 2009 328.36 0.035

23. DIRECTORS’ REMUNERATION For the years ended December 31, directors’ remuneration consisting of meeting fee and annual

compensation of director and sub-committee were as follows: MILLION BAHT

2010 2009

Hemaraj Land and Development Public Company Limited 16.15 15.80

Eastern Seaboard Industrial Estate (Rayong) Company Limited 8.54 8.54

Total 24.69 24.34

24. PROVIDENT FUND The Company and its 5 subsidiaries which are Eastern Industrial Estate Company Limited, Eastern

Seaboard Industrial Estate (Rayong) Company Limited, Eastern Pipeline Services Company Limited, H - Construction Management and Engineering Company Limited and H - Phoenix Property Company Limited, jointly established the provident fund under the Provident Fund Act B.E. 2530, named “Tisco Secured Fixed Income Fund”, to provide membership for their employees. According to regulations of the fund, member and the Company contributes 4% - 10% of employees’ monthly salaries, depending on the working period. Members are entitled to their whole contributions plus net benefit thereon, and the Company’s contributions plus benefits thereon at the rates, depending on their working period. The provident fund is managed by Tisco Asset Management Company Limited. During 2010 and 2009, the Company and the above subsidiaries had contributed to provident fund in the total amount of Baht 9.53 million and 9.01 million (Separate financial statements: Baht 4.35 million and Baht 4.09 million), respectively.


188

The 2 subsidiaries which are Hemaraj Saraburi Industrial Land Company Limited and Hemaraj Rayong Industrial Land Company Limited, jointly established the provident fund under the Provident Fund Act B.E. 2530, named “Management of The Siam Cement Public Company Limited Provident Fund and Cement Thai Group Provident Fund”, to provide membership for their employees. According to regulations of the fund, member and the Company contributes 3% - 10% of employees’ monthly salaries, depending on the working period. Members are entitled to their whole contributions plus net benefit thereon, and the Company’s contributions plus benefits thereon at the rates, depending on their working period. The provident fund is managed by ING Asset Management Company Limited. During 2010, the above 2 subsidiaries had contributed to provident fund in the total amount of Baht 0.14 million.

25. EXPENSE BY NATURE The major expenses by nature for the years ended December 31, were as follows: MILLION BAHT


Changes in cost of real estate developments (674.55) (385.37) 398.00 (160.97)

Investment in cost of real estate developments 2,085.53 800.89 7.20 142.76

Capitalized finance costs 32.54 64.04 - 4.12

Investment in cost of real estate developments

and capitalized (29.96) (79.17) - -

Employee related expenses 240.21 216.31 118.24 105.41

Depreciation and amortization 186.44 175.04 22.10 23.55

Transfer fee and specific business tax 62.41 1.32 13.14 (0.06)

Consulting fee 81.42 18.60 70.05 11.98

Loss (gain) from exchange rate 0.17 (0.03) (69.58) (33.98)

26. CORPORATE INCOME TAX The Company and its subsidiaries record corporate income tax for real estate business according to

the accounting principle on basis of the percentage of completion for recognition of real estate sales and cost, and compute the corporate income tax in compliance with the Revenue Code on the basis of installments due. The company and subsidiaries will review the difference at the end of fiscal year. Corporate income tax for the years ended December 31, were as follows:

MILLION BAHT


Corporate income tax in compliance with

the accounting purposes 46.90 (46.79) (44.05) (102.30)

Corporate income tax in compliance with

the Revenue Code 68.28 87.90 - 34.32


189

27. BUSI

NESS

SEGM

ENT

INFO

RM

ATI

ON

As

of D

ecem

ber

31, b

usin

ess

segm

ent in

form

atio

n in

the

con

solid

ated

bal

ance

she

ets

clas

sified

by

dom

estic

and

over

seas

bus

ines

s was

as

follo

ws:

M

ILLIO

N B

AH

T

20

10

2009

Dom

estic

Ove

rsea

s Dom

estic

Ove

rsea

s

Hol

ding

Hol

ding

Rea

l Est

ate

Oth

ers

Com

pany

To

tal

Rea

l Est

ate

Oth

ers

Com

pany

To

tal

Cos

t of

rea

l es

tate

dev

elop

men

ts, n

et

7,04

6.53

-

- 7,

046.

53

6,37

1.98

-

- 6,

371.

98

Leas

ehol

d la

nd a

nd lan

d he

ld for

co

mm

ercial

pur

pose

s, n

et

314.

94

- -

314.

94

314.

94

- -

314.

94

Ass

ets

for

rent

, net

1,

852.

79

168.

23

- 2,

021.

02

1,92

2.04

15

5.35

-

2,07

7.39

Prop

erty

, pla

nt a

nd e

quip

men

t, n

et

280.

46

293.

63

- 57

4.09

24

4.19

19

5.93

-

440.

12

Oth

er a

sset

s 8,

610.

57

134.

66

13.5

9 8,

758.

82

4,34

0.96

11

4.72

20

.56

4,47

6.24

Tota

l Ass

ets

18,1

05.2

9 59

6.52

13

.59

18,7

15.4

0 13

,194

.11

466.

00

20.5

6 13

,680

.67


190

Bus

ines

s se

gmen

t in

form

atio

n (con

tinu

ed)

Th

e op

erat

ion

info

rmat

ion

of t

he c

onso

lidat

ed s

tate

men

ts o

f in

com

e, f

or t

he y

ears

end

ed D

ecem

ber

31, clas

sified

by

dom

estic

and

over

seas

bus

ines

s wer

e as

fo

llows:

M

ILLIO

N B

AH

T

20

10

2009

Dom

estic

Ove

rsea

s Dom

estic

Ove

rsea

s

Hol

ding

Hol

ding

Rea

l Est

ate

Oth

ers

Com

pany

To

tal

Rea

l Est

ate

Oth

ers

Com

pany

To

tal

Sale

s of

lan

d 1,

486.

18

- -

1,48

6.18

68

8.62

-

- 68

8.62

Sale

s of

pre

-fab

rica

ted

fact

orie

s 27

2.18

-

- 27

2.18

42

.78

- -

42.7

8

Sale

s of

con

dom

iniu

ms

493.

72

- -

493.

72

(57.

47)

- -

(57.

47)

Serv

ice

inco

me

921.

79

511.

38

- 1,

433.

17

952.

01

423.

82

- 1,

375.

83

Tota

l Sa

les

and

Serv

ices

inc

ome

3,17

3.87

51

1.38

-

3,68

5.25

1,

625.

94

423.

82

- 2,

049.

76

Prof

it (lo

ss) fr

om o

pera

tion

s 52

2.88

36

8.66

(5

.20)

88

6.34

16

7.82

30

5.14

(5

.25)

46

7.71

Oth

er inc

ome

188.

46

1.09

-

189.

55

172.

32

0.60

-

172.

92

Gai

n fr

om b

arga

in p

urch

ase

145.

41

- -

145.

41

- -

- -

Gai

n (lo

ss) on

exc

hang

e ra

te

(0.1

8)

- -

(0.1

8)

0.03

-

- 0.

03

Direc

tor

rem

uner

atio

n (2

4.69

) -

- (2

4.69

) (2

5.44

) -

- (2

5.44

)

Shar

e of

pro

fit fr

om inv

estm

ents

for

us

ing

the

equi

ty m

etho

d - as

sociat

es

421.

95

- -

421.

95

80.6

2 -

- 80

.62

Fina

nce

cost

s (2

82.1

8)

(1.8

9)

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(140

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(2

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-

(143

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Inco

me

tax

expe

nses

(2

5.85

) (2

1.05

) -

(46.

90)

62.4

0 (1

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0

Prof

it (lo

ss) af

ter

tax

945.

81

346.

81

(5.2

0)

1,28

7.41

31

6.81

28

7.32

(5

.25)

59

8.88

Net

pro

fit at

trib

utab

le to

min

ority

inte

rest

s

(71.

49)

(2

3.64

)

Net

pro

fit at

trib

utab

le to

equi

ty h

olde

rs o

f th

e pa

rent

1,

215.

92

57

5.24


191

28. PLEDGED ASSETS As of December 31, 2010, pledged assets were as follows:

Hemaraj Land and Development Public Company Limited 1. Time deposit of Baht 766.18 million has been pledged as collateral against shareholders’

agreement of the Company with financial institution for the project of GHECO - One Company Limited.

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

3. 221.34 million ordinary shares of GHECO - One Company Limited have been pledged with the lender secured for loan obtained by that company.

4. 14.25 million ordinary shares of Glow IPP Company Limited have been pledged with the lender secured for loan obtained by that company.

5. The partial land and attachments have been mortgaged as collateral for loans from local commercial banks and financial institution.

6. The Company had mortgaged their residential condominium in the Company’s project as collateral for the Company’s loan from a local commercial bank.

7. The Company had mortgaged their condominium office units as collateral for the Company’s loan from a local commercial bank.

Eastern Industrial Estate Company Limited The Company’s majority land has been mortgaged as collateral for long-term loans from a local

commercial bank.

Eastern Seaboard Industrial Estate (Rayong) Company Limited 1. Time deposit of Baht 0.05 million has been pledged as security for public utility services. 2. The majority of the Company’s land and pre-fabricated factories has been mortgaged as

collateral for overdrafts and loans from one commercial bank. 3. Partial land and micro pre-fabricated factories of the company have been mortgaged as

collateral for loans from other person.

Hemaraj Eastern Seaboard Industrial Estate Company Limited The Company’s partial land and pre-fabricated factories has been mortgaged as collateral for the

Company and Parent company’s long-term loans from local commercial bank.

H - Phoenix Property Company Limited The Company had mortgaged their condominium office units as collateral for the Parent company’s

loan from a local commercial bank.

Hemaraj Saraburi Industrial Land Company Limited The Company had mortgaged the majority of land as collateral for the Parent company’s loan from a

local commercial bank.

Hemaraj Rayong Industrial Land Company Limited The Company had mortgaged the majority of land as collateral for the Parent company’s loan from a

local commercial bank.


192

29. COMMITMENTS UNDER AGREEMENTS As of December 31, 2010, commitments under agreements were as follows: The Company and its subsidiaries have participated in the establishment industrial estate with the

Industrial Estate Authority of Thailand (“IEAT”) as the joint operation agreements as follows: 1) Hemaraj Chonburi Industrial Estate in Phase 1 and Phase 2 according to the joint operation

agreements dated July 5 and December 29, 1989 respectively. On October 31, 2001, the Company entered into the amendment to such joint operation agreements with IEAT. On March 29, 2005, the Company combined such agreement into one joint operation agreement.

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

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

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

The major conditions are summarized as follows: 1) The Company shall provide utilities systems and facilities to the entrepreneurs in the

industrial estate with payment of expenses on its participation in the procedures to the IEAT. 2) The Company shall not transfer assets, component part and equipment as well as utilities

systems and facilities to the IEAT. 3) The Company shall provide a fund for the maintenance and construction of utilities systems

and facilities in the industrial estate (“Sinking Fund”).

Hemaraj Land and Development Public Company Limited 1. The Company’s investment in the amount of Baht 142.5 million in Glow IPP Company Limited

and has to maintain the 5% investment ratio to comply with the conditions with Electricity Generating Authority of Thailand.

2. The Company acquired 35% investment in the amount of Baht 2,701.65 million in GHECO-One Company Limited. The Company has commitment to pay for capital increase and grant loan to that company in proportion to the shareholders’ participation. GHECO-One Company Limited entered into a power sale and purchase agreement (PPA) with EGAT on September 10, 2008 where GHECO-One shall supply all its electricity production to EGAT for 25 years from the Commercial Operation Date (COD) under the IPP Program. In addition, GHECO-One Company Limited had pledged the bid bond of USD 10 million to guarantee the bidding with Electricity Generating Authority of Thailand. The electricity generating plant is in the process of construction and guarantee by the Company in the portion of investment.

The total project cost of GHECO-One Company Limited is estimated at USD 1,170 million or Baht 38,991 million which require investment from shareholders in the amount of approximately Baht 13,500 million. The Company has commitment to invest in proportion to the shareholders’ participation 35% being Baht 4,750 million. GHECO-One Company Limited is funded by local and international financial institutions of approximately of USD 460 million and Baht 9,960 million with the condition that the Company shall provided deposit or bank letter of credit in the amount of Baht 966.18 million to guarantee the joint venture agreement of the Company for the unpaid capital and the Company shall pledge the ordinary shares of GHECO-One Company Limited with the lender secured for this project loan.

Eastern Industrial Estate Company Limited The Company has commitment under construction and infrastructure contracts utilities system, with

the remaining commitment balance amounting to Baht 127.33 million.


193

Eastern Seaboard Industrial Estate (Rayong) Company Limited The Company has obligations, under a joint-investment agreement with Hemaraj Land and

Development Public Company Limited and another company, that the company has to pay commission on sales of land and management fee to Hemaraj Land and Development Public Company Limited based on revenues from sales of land, public utility service providing and lease of factories.

Hemaraj Eastern Seaboard Industrial Estate Company Limited The Company has commitment under construction contracts to construct pre-fabricated factories and

utilities system, with the remaining commitment balance amounting to Baht 211.33 million.

Hemaraj Clean Water Company Limited The Company has commitment under construction contracts in utilities system, with the remaining

commitment balance amounting to Baht 7.20 million.

SME Factory Company Limited The Company has commitment under construction contracts to construct pre-fabricated factories,

with the remaining commitment balance amounting to Baht 69.68 million. 30. COMMITMENTS AND CONTINGENT LIABILITIES As of December 31, 2010, commitments and contingent liabilities consisted of: 1. The Company and its subsidiaries have entered into land sale and purchase contracts, which

the contract term requires the Company and its subsidiaries to contingently liable to repay deposits and installments in the event that buyers are unable to obtain satisfactory approvals from the Board of Investment and/or the IEAT to set up their operations.

2. The Company and its subsidiaries have obligation regarding guarantee of the loan agreement of the Company and its subsidiaries in the total credit line of Baht 7,032 million. (Separate financial statements : Baht 2,434 million)

3. The Company and its subsidiaries have obligations regarding guarantee of the hire purchase agreements of its related companies in the total credit line of Baht 4.03 million. (Separate financial statements : Baht 0.67 million)

4. The Company and its subsidiaries have obligations regarding guarantee and under condition of the letters of guarantee issued by the banks for their performance under the joint operation agreements with the Industrial Estate Authority of Thailand, their compliance with the agreement made with the Customs House in the free tax area, the construction of utilities under land sale contract, the construction of utility and power substation, and their performance under the raw water purchase agreement and others in the total amount of Baht 833.36 million. (Separate financial statements : Baht 212.20 million).

5. The Company has a dispute with a contractor (the “Claimant”) who has submitted the dispute to the Thai Arbitration Institute for claiming of outstanding payment of works in the amount of Baht 82 million and other expenditures including the damage for loss of benefit in business in the amount of Baht 510 million, in which the Company is not the defaulting party and has no outstanding payment of works as claimed by the Claimant. In the other way, the Claimant was not able to perform the agreed works described by the contractor agreement. As the company has submitted the defense and claim for the compensation and the advance payment which the company had paid more than amount under the contractor agreement to Thai Arbitration Institute.


194

31. PROMOTIONAL PRIVILEGES The Company and its 7 subsidiaries have been granted promotional certificates under the Investment

Promotion Act, B.E. 2520 as follows: Date obtained Area/units obtained Major Privileges

for promotional for promotional Exemption from corporate Reduction of 50% of

privilege privilege income tax (***) corporate income tax (****)

Hemaraj Land and Development Public Company LimitedA. Industrial Estate Business A.1 December 29, 1988 1,500 Rai 7 years (*) 5 years (*) A.2 February 15, 1990 2,000 Rai 7 years (*) None A.3 July 25, 2001 1,282 Rai 7 years (**) NoneB. Industrial Factory Development Business B.1 June 21, 2000 11 Units 7 years (*) None

Eastern Industrial Estate Company LimitedA. Industrial Estate Business A.1 May 8, 1989 626 Rai 5 years (*) 5 years (*) September 23, 1992 1,850 Rai 8 years (*) 5 years (*) (Extension) A.2 November 27, 2002 1,240 Rai 8 years 5 years A.3 March 17, 2009 576 Rai 8 years 5 years

Eastern Seaboard Industrial Estate (Rayong) Company LimitedA. Industrial Estate Business A.1 June 21, 1995 2,063 Rai 8 years (*) 5 years (*) August 9, 1996 1,532 Rai 8 years (*) 5 years (*) (Extension) A.2 October 27, 1997 2,466 Rai 8 years (*) 5 years July 31, 2000 325 Rai 8 years (*) 5 years (Extension) A.3 July 25, 2001 716 Rai 7 years None A.4 December 8, 2004 1,020 Rai 8 years 5 years A.5 October 17, 2007 520 Rai 8 years 5 yearsB. Industrial Factory Development Business B.1 January 19, 2000 22 Units 8 years (*) 5 years B.2 June 21, 2000 13 Units 8 years (*) 5 years B.3 November 29, 2000 12 Units 8 years (*) 5 years B.4 January 16, 2002 51 Units 8 years 5 years B.5 March 27, 2002 22 Units 8 years 5 years B.6 September 7, 2006 6 Units 8 years 5 years B.7 March 23, 2007 7 Units 8 years 5 years


195

Promotional privileges (continued) Date obtained Area/units obtained Major Privileges

for promotional for promotional Exemption from corporate Reduction of 50% of

privilege privilege income tax (***) corporate income tax (****)

Hemaraj Eastern Seaboard Industrial Estate Company LimitedA. Industrial Estate Business A.1 May 22, 1997 1,407 Rai 8 years 5 years A.2 May 22, 1997 1,375 Rai 8 years 5 years A.3 May 22, 1997 1,485 Rai 8 years 5 years A.4 September 26, 1996 1,653 Rai 8 years 5 years A.5 January 23, 2008 1,500 Rai 8 years 5 yearsB. Industrial Factory Development Business B.1 August 14, 2007 13 Units 8 years 5 years B.2 December 29, 2008 1 Unit 8 years 5 years B.3 December 30, 2009 1 Unit 8 years 5 years B.4 December 30, 2009 1 Unit 8 years 5 years B.5 December 30, 2009 1 Unit 8 years 5 years B.6 January 4, 2010 1 Unit 8 years 5 years

Hemaraj Saraburi Industrial Land Company LimitedA. Industrial Zone A.1 November 21, 1991 1,450 Rai 7 years (*) - A.2 August 25, 1994 1,200 Rai 7 years (*) - A.3 April 27, 2005 890 Rai 7 years -

Hemaraj Rayong Industrial Land Company LimitedA. Industrial Zone A.1 January 26, 1996 1,600 Rai 8 years (*) 5 years (*) A.2 August 16, 2000 520 Rai 8 years (*) 5 years A.3 March 14, 2001 1,343 Rai 8 years 5 years

Hemaraj Water Company LimitedA. Utility and Other Services Business A.1 October 25, 2005 12.27 million 8 years 5 years cubic meters

SME Factory Company LimitedA. Industrial Factory Development Business A.1 May 21, 2007 3 Units 7 years None

* Major Privilege was expired. ** Major Privilege still not started because the Company has not earned the revenues yet. *** Starting from the first revenue recognised date. **** Starting from the exemption from corporate income tax is expired.


196

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

THOUSAND BAHT

BOI NON-BOI TOTAL

2010 2009 2010 2009 2010 2009


Revenue from sales

Lands 1,245,492.96 653,624.67 240,690.52 34,993.72 1,486,183.48 688,618.39

Industrial factories 213,538.48 42,776.20 58,636.63 - 272,175.11 42,776.20

Condominiums - - 493,722.50 (57,472.77) 493,722.50 (57,472.77)

Service income 514,389.41 551,466.54 918,786.27 824,365.13 1,433,175.68 1,375,831.67

Total 1,973,420.85 1,247,867.41 1,711,835.92 801,886.08 3,685,256.77 2,049,753.49


Revenue from sales

Lands - - 183,832.52 1,199.91 183,832.52 1,199.91

Industrial factories - - - - - -

Condominiums - - 493,722.50 (57,472.77) 493,722.50 (57,472.77)

Service income - - 156,492.20 156,260.76 156,492.20 156,260.76

Total - - 834,047.22 99,987.90 834,047.22 99,987.90

32. FINANCIAL INSTRUMENTS

Risk Management Policy Exposure to interest rate and currency risk arises in normal course of the Hemaraj Group’s business.

These are subject to the risk of market rates changing subsequent to the transaction date. The Hemaraj Group’s policy on interest rate risk and currency risk hedging is as follows: A. Maintaining proportions of domestic and foreign borrowings; B. Borrowing loans at fixed and floating interest rates; C. Pledging assets as collateral against loans. The Hemaraj Group has no policy to speculate on or engage in the trading of any off-balance-sheet

derivative financial statements.

Fair Value of Financial Instruments Except as disclosed in Note 3 to the financial statements, fair value of significant financial

instruments consists of: A. Fair value of cash and cash equivalents, deposits for investment, account receivables, bank

overdrafts and loans from financial institutions, account payables and accrued expenses are approximately equal to the carrying amount because of short maturity of these instruments.

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

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


197

33. SUBSEQUENT EVENTS The Board of Directors’ Meeting of Hemaraj Land and Development Public Company Limited No. 1/

2011 held on February 28, 2011 recommended payment of a final dividend of another Baht 0.03 per share, including the interim payment of Baht 0.025 per share, the total dividend for 2010 is Baht 0.055 per share to be considered and approved at the Annual General Meeting of Shareholders of the Company.

34. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved by the Company’s Board of Directors on February 28,

2011.


198

Top Ten of Hemaraj Land and Development’s Shareholders as at 25/8/10

No. Major Shareholders No. of Shares % of Total Issued Share

1 Miss Phenpunnee Horrungruang 1,068,725,770 11.01

2 Chase Nominees Limited 42 871,192,312 8.98

3 Credit Agricole (Suisse) SA, Singapore Branch 849,906,389 8.76

4 Nomura Singapore Limited – Customer Segregated Account 643,484,500 6.63

5 EFG Bank 617,377,000 6.36

6 Mrs. Kanokkarn Siriratanapan 437,910,100 4.51

7 Mr. Sombat Tepsatist 417,567,600 4.30

8 Mr. Abdhulor Kanda 407,954,200 4.20

9 Miss Kanda Korakochsakulwong 374,782,700 3.86

10 Thai NVDR Company Limited 368,914,221 3.80

Board of Directors

Nominating CommitteeAudit Committee

Corporate Governance Committee

Executive Committee

President & CEO

Internal Audit

Executive Vice President Senior Vice President

Shareholders

Industrial Customer

Development

Industrial Estate

Operations

Information System & Services

Small Power and Water

Project Planning

Corporate Planning

& Investor Relations

Corporate Marketing

Residential Customer

Development

ResidentialProject

Planning

Accounting & Legal ProcurementFinance

Industrial Estate

Development

Shareholding & Organization Structure


199

Tran

sact

ions

with

Relat

ed P

arties

Th

e Nec

essity

and

Rea

sona

blen

ess

of R

elat

ed T

rans

action

s du

ring

the

yea

r

The

rela

ted

tran

sact

ions

am

ong

the

com

pany

and

its

sub

sidi

arie

s, a

ffili

ated

com

pani

es, re

late

d co

mpa

nies

and

/or

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third

part

y ge

nera

lly a

re f

rom

nor

mal

co

urse

of

busine

sses

whi

ch t

he p

rice

of

the

tran

sact

ion

will

be

cons

ider

ed b

ased

on

the

reas

onab

le a

nd f

air

mar

ket

prev

ailin

g ra

te a

nd t

he c

ompa

ny’s r

ules

and

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gula

tion

s. T

he t

rans

action

s will

be

cons

ider

ed a

nd a

ppro

ved

by t

he B

oard

of

Direc

tors

, Exe

cutive

Com

mitte

e or

top

man

agem

ent

as t

he c

ase

may

be, inc

ludi

ng t

o be

re

view

ed b

y th

e Aud

it C

omm

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com

plia

nce

with

the

rule

s st

ated

by

the

Stoc

k Exc

hang

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Tha

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(SE

T), Se

curities

and

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mission

(SE

C),

as w

ell as

Th

ai A

ccou

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anda

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elat

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to inf

orm

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and

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noun

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by the

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ccou

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.

1. A

ssoc

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pani

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1.

1 Cof

ely

(Tha

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pany

- T

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olds

39.

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1,

017

33

3

13

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- Th

e Com

pany

pro

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s Utilit

ies

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tilit

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3 Com

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200

9, the

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as

a - L

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acco

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late

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inv

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Des

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ting

in

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being

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here

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thi

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Com

pany

’s

po

licy

for join

t ve

ntur

e in

vestm

ent.

Nam

es o

f Com

pany

with

Des

crip

tion

of

Tran

sact

ions

(Uni

t: T

hous

and

Bah

t)

Des

crip

tion

Nec

essity

/ O

pini

on

Rel

ated

Tra

nsac

tion

s Rel

atio

nshi

p Se

rvice

Inte

rest

Com

mission

Cos

t of

Fi

nanc

ial

of

Aud

it C

omm

itte

e

In

com

e In

com

e an

d Se

rvice

Cos

ts

Man

agem

ent

In

com

e


201

Nam

es o

f Com

pany

with

Des

crip

tion

of

Tran

sact

ions

(Uni

t: T

hous

and

Bah

t)

Des

crip

tion

Nec

essity

/ O

pini

on

Rel

ated

Tra

nsac

tion

s Rel

atio

nshi

p Se

rvice

Inte

rest

Com

mission

Cos

t of

Fi

nanc

ial

of

Aud

it C

omm

itte

e

In

com

e In

com

e an

d Se

rvice

Cos

ts

Man

agem

ent

In

com

e

2. R

elat

ed C

ompa

nies

: 2.1

Srirac

ha H

arbo

r Pu

blic

- Th

e Com

pany

holds

6.40%

113

In

199

6, the

Com

pany

as a

- T

he lo

an a

mou

nt is

a res

ult

Com

pany

Lim

ited

- T

here

are

2 C

ompa

ny’s D

irec

tors

,

Shar

eholde

r (15%

holdi

ng) p

rovide

d

from

the

loan

gra

nted

as de

em

Po

rt S

ervice

s an

d Tr

ansp

orta

tion

M

r. V

ikit

Hor

rung

ruan

g an

d

Bah

t 20

mill

ion

loan

. Dur

ing

the

ne

cess

ary

at tha

t tim

e an

d th

e

M

r.Cha

valit

Set

ham

etee

kul,

1997

crisis, S

rira

cha

Har

bor was

Relat

ed C

ompa

ny h

as b

een

who

are

the

Exe

cutiv

e Direc

tors

unab

le to

repa

y th

e de

bt a

nd w

ent

op

erat

ed u

nder

the

in

the

Relat

ed C

ompa

ny.

un

der th

e re

habi

litat

ion

plan

.

Reh

abili

tatio

n Pl

an.

The

repa

ymen

t pl

an follows th

e

Reh

abili

tatio

n Pl

an (in

200

3).

- Th

e Com

pany

has

ful

ly res

erve

d

th

e to

tal a

mou

nt o

f do

ubtful

acco

unt ac

cord

ing

to the

Com

pany

’s p

roce

dure

s. H

owev

er,

th

e Com

pany

has

not

adjus

ted

the

re

serv

e un

der th

e re

habi

litat

ion

plan

whi

ch w

ill b

e ad

justed

upo

n

re

ceivin

g from

the

deb

tor.

Acc

ordi

ng to

the

reha

bilit

ation

plan

, the

Com

pany

will

rec

eive

s

th

e in

tere

st a

t th

e ra

te o

f 1%

p.a.

an

d th

e pr

incipa

l will

be

repa

id in

fu

ll with

in 1

0 ye

ars.


202

Nam

es o

f Com

pany

with

Des

crip

tion

of

Tran

sact

ions

(Uni

t: T

hous

and

Bah

t)

Des

crip

tion

Nec

essity

/ O

pini

on

Rel

ated

Tra

nsac

tion

s Rel

atio

nshi

p Se

rvice

Inte

rest

Com

mission

Cos

t of

Fi

nanc

ial

of

Aud

it C

omm

itte

e

In

com

e In

com

e an

d Se

rvice

Cos

ts

Man

agem

ent

In

com

e

2.2

Glow C

ompa

ny L

imite

d - T

he C

ompa

ny h

as jo

intly

inve

sted

2,

399

- Th

e Com

pany

rai

sed

shor

t - I

nter

est Rat

e at

the

Mar

ket

Power

Bus

ines

s

in p

ower

pro

jects with

Glow.

term

loa

n fr

om G

low

Rat

e of

MLR

-2%

for th

e pu

rpos

e of

acq

uisition

and

subs

crip

tion

of sh

are

capi

tal

in

crea

se in

Hou

ay H

o Th

ai

Com

pany

Lim

ited

(51

% sh

are

hold

ing)

whi

ch is

an H

oldi

ng

Com

pany

in

Hou

ay H

o Hyd

ro

Po

wer

Pro

ject

in

Laos

. The

loa

n

was

due

and

ful

ly rep

aid

in 2

010.

Polic

y an

d App

rova

l P

roce

dure

s of

Rel

ated

Tra

nsac

tion

s in

the

fut

ure

Fu

ture

rel

ated

tra

nsac

tion

s will

be

cond

ucte

d as

par

t of

nor

mal

cou

rse

of b

usin

esse

s of

whi

ch t

he p

rice

will

be

cons

ider

ed b

ased

on

the

reas

onab

le a

nd f

air

mar

ket

prev

ailin

g ra

te a

nd t

he c

ompa

ny’s r

ules

and

reg

ulat

ions

. Th

e tr

ansa

ctio

ns w

ill b

e co

nsid

ered

and

app

rove

d by

the

Man

agem

ent

in e

ach

leve

l, Exe

cutive

Com

mitte

e, B

oard

of Direc

tor, o

r Sh

areh

olde

r’s

Mee

ting

, whi

chev

er the

cas

e m

aybe

acc

ordi

ng to

the

Com

pany

’s r

ules

and

reg

ulat

ions

. Direc

tors

or

staf

f with

an int

eres

t in

suc

h tr

ansa

ctio

n sh

all no

t be

allo

wed

to

part

icip

ate

in t

he a

ppro

val pr

oces

s. I

n ad

dition

, th

e tr

ansa

ctio

n will

be

revi

ewed

by

cert

ifie

d ex

tern

al a

uditor

, 3r

d pa

rty

inte

rnal

aud

itor

, an

d th

e Aud

it C

omm

itte

e of

the

com

pany

. Th

e co

mpa

ny s

hall

disc

lose

the

tra

nsac

tion

det

ails in

com

plia

nce

with

rela

ted

law a

nd the

reg

ulat

ion

of the

St

ock

Exc

hang

e of

Tha

iland

(SE

T), Se

curities

and

Exc

hang

e Com

mission

(SE

C),

and

Thai

Acc

ount

ing

Stan

dard

s in

rel

atio

n to

inf

orm

atio

n di

sclo

sure

and

pra

ctices

of

liste

d co

mpa

nies

in

conn

ecte

d tr

ansa

ctio

ns, a

nnou

nced

by

the

Fede

ration

of Acc

ount

ing

Prof

ession

.


203

Hem

araj

Lan

d And

Dev

elop

men

t 18

th F

loor

, UM

Tow

er,

Indu

strial

Est

ates

, Utilit

ies

3,88

2

1,13

3.78

26

%

240.85

11

%

649.00

13

%

Publ

ic C

ompa

ny L

imited

9

Ram

kham

haen

g Rd.

, Sua

nlua

ng,

and

Prop

erty

Dev

elop

er

Reg

istr

ation

No. B

orm

orjor 01

0753

6000

676

Ban

gkok

102

50, T

haila

nd

Sh

are

Cap

ital

15,00

0,00

0,00

0 sh

ares

Te

l.(66

2) 7

19-9

555

Is

sued

9,705

,186

,191

sha

res

Fax

(662

) 71

9-95

46-7

www.h

emar

aj.com

E-m

ail:

inve

st@he

mar

aj.com

Subs

idia

ry C

ompa

nies

Hem

araj

Int

erna

tion

al L

imited

(1)

Sc

otia

Cen

tre, 4

th F

loor

Hol

ding

Com

pany

0.03

10

0

P.

O.B

ox 2

804, G

eorg

e To

wn,

Gra

nd C

aym

an, C

aym

an Islan

ds

H-Int

erna

tion

al (BVI) C

ompa

ny L

imited

(2)

Rom

asco

Pla

ce, W

ickh

ams

Cay

1,

Hol

ding

Com

pany

0.08

10

0 -

0%

-

0%

-

0%

P.O. B

ox 3

140, R

oad

Town,

Tor

tola

British

Virgi

n Is

land

s.

Eas

tern

Ind

ustr

ial Est

ate

Com

pany

Lim

ited

18

th F

loor

, UM

Tow

er,

Indu

strial

Est

ate

Dev

elop

er

400

99.99

336.97

8%

81

9.66

36

%

899.58

18

%

9 Ram

kham

haen

g Roa

d, S

uanl

uang

,

Ban

gkok

102

50, T

haila

nd

Eas

tern

Pip

elin

e Se

rvices

Com

pany

Lim

ited

(3)

18th F

loor

, UM

Tow

er,

Pipe

Rac

k Ren

tal

100

99.99

94.45

2%

75

.38

3%

67

.51

1%

9

Ram

kham

haen

g Roa

d, S

uanl

uang

,

Ban

gkok

102

50, T

haila

nd

Eas

tern

Sea

boar

d In

dust

rial

Est

ate

18th F

loor

, UM

Tow

er,

Indu

strial

Est

ate

Dev

elop

er

358

60

663.70

15

%

317.37

14

%

1,21

6.06

24

%

(R

ayon

g) C

ompa

ny L

imited

9

Ram

kham

haen

g Roa

d, S

uanl

uang

,

Ban

gkok

102

50, T

haila

nd

H-C

onst

ruct

ion

Man

agem

ent

18th F

loor

, UM

Tow

er,

Des

ign

and

Con

stru

ctio

n 17

.15

99.99

12.02

0%

23

.09

1%

34

.12

1%

and

Eng

inee

ring

Com

pany

Lim

ited

9

Ram

kham

haen

g Roa

d, S

uanl

uang

, an

d Su

perv

isio

n Se

rvice

Ban

gkok

102

50, T

haila

nd

Th

e Pa

rk R

esid

ence

Com

pany

Lim

ited

18

th F

loor

, UM

Tow

er,

Rea

l Est

ate

Dev

elop

men

t

0.25

99

.99

3.31

0%

7.43

0%

5.64

0%

9

Ram

kham

haen

g Roa

d, S

uanl

uang

, an

d Se

rvice

Man

agem

ent

Ban

gkok

102

50, T

haila

nd

Hem

araj

Eas

tern

Sea

boar

d In

dust

rial

18

th F

loor

, UM

Tow

er,

Indu

strial

Est

ate

Dev

elop

er

1,00

0 99

.99

1,24

2.93

28

%

300.24

13

%

1,84

7.48

37

%

Est

ate

Com

pany

Lim

ited

9

Ram

kham

haen

g Roa

d, S

uanl

uang

,

Ban

gkok

102

50, T

haila

nd

Hem

araj

Wat

er C

ompa

ny L

imited

(4)

18

th F

loor

, UM

Tow

er,

Wat

er R

esou

rce

Dev

elop

men

t 10

0 99

.99

185.11

4%

14

7.71

6%

94

.39

2%

9

Ram

kham

haen

g Roa

d, S

uanl

uang

, an

d M

anag

emen

t

Ban

gkok

102

50, T

haila

nd

SM

E F

acto

ry C

ompa

ny L

imited

18

th F

loor

, UM

Tow

er,

Fact

ory

for Sa

le a

nd R

enta

l

37

99.99

1.31

0%

21

.13

1%

4.09

0%

9

Ram

kham

haen

g Roa

d, S

uanl

uang

,

Ban

gkok

102

50, T

haila

nd

H-P

hoen

ix P

rope

rty

Com

pany

Lim

ited

18

th F

loor

, UM

Tow

er,

Office

for Sa

le a

nd R

enta

l

480

99.99

96.32

2%

91

.60

4%

80

.28

2%

9

Ram

kham

haen

g Roa

d, S

uanl

uang

,

Ban

gkok

102

50, T

haila

nd

Hem

araj

Clean

Wat

er C

ompa

ny L

imited

(5)

18

th F

loor

, UM

Tow

er,

Prod

uce

and

dist

ribu

te the

64

5 99

.99

220.91

5%

17

8.24

8%

84

.36

2%

9

Ram

kham

haen

g Roa

d, S

uanl

uang

, in

dust

rial

wat

er

Ban

gkok

102

50, T

haila

nd

Hem

araj

Sar

abur

i In

dust

rial

Lan

d

111

Moo

7, N

ong

Pla

Mao

Sub

-Distr

ict

Indu

strial

Est

ate

Dev

elop

er

500

99.99

21.92

1%

Com

pany

Lim

ited

*

Non

g Kha

e Distr

ict,

Sara

buri

(F

orm

erly

kno

wn

as “

SIL

Indu

strial

Lan

d

1814

0, T

haila

nd

Com

pany

Lim

ited

” )

Nam

e Add

ress

Nat

ure

of B

usin

ess

Paid

Rev

enue

(M

il. B

aht)

Cap

ital

%

of

(Mil.

Bah

t) In

vest

men

t 20

10

%

2009

%

20

08

%

Hol

ding

Str

uctu

re a

nd R

even

ue o

f Th

e Com

pany

, Sub

sidi

arie

s an

d Ass

ocia

ted

Com

pani

es


204

Nam

e Add

ress

Nat

ure

of B

usin

ess

Paid

Rev

enue

(M

il. B

aht)

Cap

ital

%

of

(Mil.

Bah

t) In

vest

men

t 20

10

%

2009

%

20

08

%

Hem

araj

Ray

ong

Indu

strial

Lan

d 18

th F

loor

, UM

Tow

er,

Indu

strial

Est

ate

Dev

elop

er

1,00

0 99

.99

7.49

0%

Com

pany

Lim

ited

*(6

) 9

Ram

kham

haen

g Roa

d, S

uanl

uang

,

(For

mer

ly k

nown

as “

RIL

Ind

ustr

ial La

nd

Ban

gkok

102

50, T

haila

nd

Com

pany

Lim

ited

” )

Ass

ocia

ted

Com

pani

es (9)

Cof

ely

(Tha

iland

) Com

pany

Lim

ited

. 10

7/1

Moo

4, E

aste

rn S

eabo

ard

Facilit

ies

Man

agem

ent Se

rvices

50

40

3.63

0%

3.60

0%

2.76

0%

(For

mer

ly k

nown

as “

Ely

o-H F

acili

ties

In

dust

rial

Est

ate

(Ray

ong)

,

Man

agem

ent Li

mited

” )

Plua

kdea

ng, R

ayon

g, T

haila

nd

Hem

araj

Sar

abur

i In

dust

rial

Lan

d 11

1 M

oo 7

, Non

g Pl

a M

ao S

ub-D

istr

ict

Indu

strial

Est

ate

Dev

elop

er

500

25

13.67

0%

3.55

0%

12

.64

0%

Com

pany

Lim

ited

(7)

Non

g Kha

e Distr

ict,

Sara

buri

(F

orm

erly

kno

wn

as “

SIL

Indu

strial

Lan

d

1814

0, T

haila

nd

Com

pany

Lim

ited

” )

Hem

araj

Ray

ong

Indu

strial

Lan

d

18th F

loor

, UM

Tow

er,

Indu

strial

Est

ate

Dev

elop

er

1,00

0 25

1.14

0%

11

.30

1%

(6

.50)

0%

Com

pany

Lim

ited

(6)

9

Ram

kham

haen

g Roa

d, S

uanl

uang

,

(For

mer

ly k

nown

as “

RIL

Ind

ustr

ial La

nd

Ban

gkok

102

50, T

haila

nd

Com

pany

Lim

ited

” )

GHECO-O

ne C

ompa

ny L

imited

19

5 Em

pire

Tow

er, 3

8th F

loor

Ele

ctricity

and

Pow

er

7,71

9 35

39

3.51

9%

74

.25

3%

19

.69

0%

Pa

rk W

ing, S

outh

Sat

horn

Roa

d Gen

erat

ion

Ban

gkok

101

20, T

haila

nd

Hou

ay H

o Th

ai C

ompa

ny L

imited

10

/ 1

90-1

93 ,

Tren

dy T

ower

, 26th

Floor

, Hol

ding

Com

pany

52

7.69

51

(0

.10)

0%

(0

.19)

0%

So

i Su

khum

vit 13

, Suk

hum

vit Roa

d,

Kwae

ng K

long

toey

nua,

Khe

t W

atta

na,

Ban

kok

Hou

ay H

o Po

wer

Com

pany

Lim

ited

(8)

P.

O.B

ox 5

464, N

ong

Bon

e Roa

d Ele

ctricity

and

Pow

er

50

12.75

10.10

0%

(1

1.89

) -1

%

Ban

e Fa

i, Xay

setta

Distr

ict,

Vie

ntia

ne

Gen

erat

ion

(M

illio

n USD

)

La

o Pe

ople’s D

emoc

ratic Rep

ublic

Relat

ed C

ompa

nies

Eas

tern

Flu

id T

rans

port

Com

pany

Lim

ited

61

8 Nim

om M

akka

san

Roa

d M

anag

emen

t an

d

10

15

Mak

kasa

n, R

atch

thew

i M

aint

enan

ce o

f Pi

pe R

ack

Ban

gkok

104

00, T

haila

nd

Glow IPP

Com

pany

Lim

ited

19

5 Em

pire

Tow

er, 3

8th

Floo

r Ele

ctricity

and

Pow

er

2,85

0 5

Park

Win

g, S

outh

Sat

horn

Roa

d Gen

erat

ion

Ban

gkok

101

20, T

haila

nd

To

tal Rev

enue

: H

emar

aj L

and

And

Dev

elop

men

t PL

C. a

nd S

ubsidi

arie

s

4,44

2.17

10

0%

2,30

3.32

10

0%

5,01

1.10

10

0%

Rem

ark

1) In

corp

orat

ed in

the

Cay

man

Islan

ds

2) In

corp

orat

ed in

the

Terr

itor

y of

the

British

Virgi

n Is

land

s 3)

Held

74.99

% d

irec

tly

and

25%

ind

irec

tly

thro

ugh

Eas

tern

Ind

ustr

ial Est

ate

Com

pany

Lim

ited

4)

Held

99.99

% ind

irec

tly

held

by

Hem

araj

Cle

an W

ater

Com

pany

Lim

ited

5)

In

200

9, H

emar

aj C

lean

Wat

er C

ompa

ny L

imited

had

cal

led

for fu

lly p

aid

up cap

ital

.( In

200

8 Hem

araj

had

est

ablis

hed

Hem

araj

Clean

Wat

er C

ompa

ny L

imited

, whi

ch h

ad the

reg

iste

red

capi

tal in

the

am

ount

of Bah

t 64

5 m

illio

n

an

d ha

d pa

id u

p fo

r sh

are

capi

tal in

the

am

ount

of Bah

t 58

0.50

mill

ion)

6)

99

.99%

ind

irec

tly

held

by

Hem

araj

Sar

abur

i In

dust

rial

Lan

d Com

pany

Lim

ited

. 7)

In

201

0 Th

e co

mpa

ny h

as p

aid

for in

vest

men

t ac

quisitio

n in

Hem

araj

Ind

ustr

ial La

nd C

ompa

ny L

imited

(HSI

L) to

Cem

enth

ai H

oldi

ng C

ompa

ny L

imited

(CHC)

8) 51

% d

irec

tly

held

by

the

Com

pany

in

Hou

ay H

o Th

ai C

ompa

ny L

imited

tha

t ha

s he

ld 2

5% in

Hou

ay H

o Po

wer

Com

pany

Lim

ited

, a com

pany

reg

iste

red

in L

ao P

eopl

e’s

Dem

ocra

tic Rep

ublic

(US.

cur

renc

y is u

sed

for bu

sine

ss o

pera

tion

).

9) In

2008

Sha

re o

f (p

rofits

) loss

es fro

m inv

estm

ents

by

usin

g th

e eq

uity

met

hod

in A

ssoc

iate

d Com

pani

es w

as p

rese

nted

as

an e

xpen

ses

in S

tate

men

t of

Inc

ome

* Th

e co

nsolid

ated

fin

ancial

sta

tem

ent as

at Dec

embe

r 31

, 201

0 of

the

com

pany

inc

lude

d th

e to

tal re

venu

e of

tho

se 2

sub

sidi

aries

as fro

m O

ctob

er 1

, 201

0 to

Dec

embe

r 31

, 201

0


205

Hemaraj Land And Development Plc.

Nam

e

SU

BSI

DIA

RY C

OM

PANIE

S ASS

OCIA

TED C

OM

PANIE

S

1M

r.Ch

aval

itSe

tham

etee

kul

/,X

2M

r.Su

dhip

anC

haru

man

i/

3M

r.Th

ongc

hai

Sr

isom

bura

nano

nt

/,//

X

/,//

X

/X

X

X

X

X

/

X

X

4M

r.Dav

idR

icha

rdN

ardo

ne

/,//

//,

///

X

/X

//

//

//

//

/X

//

5M

r.Vi

vatJi

ratik

arns

akul

/,

///

/,//

//

//

//

//

//

//

//

//

6M

r.Pe

terJo

hnE

dmon

dson

/

7M

rs.P

unne

e

W

oraw

uthi

chon

gsat

hit

/

8M

s.P

atta

ma

Hor

rung

ruan

g/,

///

/,//

//

/

//

//

//

//

/

9M

r.So

mph

ong

Wan

apha

/

10M

r.Vi

kitHor

rung

ruan

g/

11M

rS

unth

orn

Ko

ngsu

ntho

rnki

tkul

/ /

12M

r.Kh

amho

ung

Rats

aman

y

/

13M

r.Ta

nin

Subb

oonr

ueng

/

14M

r.Si

risak

Kijr

aksa

/

Eastern Industrial Estate Co., Ltd.

Eastern Seaboard Industrial Estate (Rayong) Co., Ltd

Hemaraj Eastern Seaboard Industrial Estate Co., Ltd.

Eastern Pipeline Services Co., Ltd.

The Park Residence Co., Ltd.

H-Construction Management and Engineering Co., Ltd

Hemaraj Water Co., Ltd.

SME Factory Co., Ltd.

H-Phoenix Property Co., Ltd.

Hemaraj Clean Water Co., Ltd.

H-International (BVI) Co., Ltd.

Hemaraj International Co., Ltd.

Hemaraj Saraburi Industrial Land (Saraburi) Co., Ltd.

Hemaraj Rayong Industrial Land Co., Ltd.

GHECO-One Co., Ltd.

Cofely (Thailand) Co., Ltd.

Not

es:

/ =

Direc

tor

X =

Cha

irm

an /

/ =

Exe

cutive

Direc

tor

Houay Ho Thai Co., Ltd.

Houay Ho Power Co., Ltd.

INFO

RMAT

ION

OF D

IREC

TORS

AND

MAN

AGEM

ENT

IN C

OMPA

NY, S

UBSI

DIAR

IES

AND

ASSO

CIAT

ED C

OMPA

NIES


206

Audit Fee The company and its subsidiary(ies) has made a payment for Audit Fee to A.M.T. Associates which it is the regular office of the auditor(s) in the latest accounting year in the total amount money of 4.10 Million Baht and Audit Fee of subsidiaries were audit by other auditor amount money of 0.50 Million Baht.

Non-Audit Fee The company and its subsidiary(ies) has made a payment for Non-Audit Fee of other services such as service fee of the provision of BOI’s report to A.M.T. Associates which it is the regular office of the auditor(s) in the latest accounting year in the total amount money of 110,000 Baht.

The remuneration of the Auditor of company


207

Other References

Share Registrar

Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Bldg. 4th Floor 6-7th Floor, Rachadapisek Road, Klongtoey Bangkok 10110, Thailand Tel. 0-2229-2800 Fax 0-2654-5427 Auditor

Mrs. Natsarak Sarochanunjeen CPA No. 4563 A.M.T & Associates 491/27 Silom Plaza, Silom Road, Bangruk Silom Road, Bangruk Bangkok 10500, Thailand Tel. 0-2234-1676, 0-2234-1678 Fax 0-2237-2133 Attorney

Allen & Overy (Thailand) Co., Ltd. 130 Sindhorn Building III, 22nd Floor, Wireless Road Bangkok 10330, Thailand Tel. 0-2263-7600 Fax 0-2263-7699

Financial Advisor

Per Project


208

hemraj : annual report 2010 en

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