hemaraj land and development public company limitedhemraj.listedcompany.com/misc/2008en.pdf · to...

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บรษิทั เหมราชพฒันาทีด่นิ จำกดั (มหาชน) Hemaraj Land And Development Public Company Limited ชัน้ 18 อาคารยเูอม็ทาวเวอร ์เลขที ่9 ถนนรามคำแหง สวนหลวง กรงุเทพมหานคร 10250 โทรศพัท ์: 66-2719-9555 โทรสาร : 66-2719-9546-7 18th FL., UM Tower, 9 Ramkhamhaeng Rd., Suangluang, Bangkok 10250 THAILAND Tel : 66-2719-9555 Fax : 66-2719-9546-7

e-mail : [email protected], [email protected] www.hemaraj.com, www.theparkresidence.co.th Registration No. : BORMORJOR.0107536000676 ทะเบียนเลขที่ : บมจ.0107536000676

บรษิทั เหมราชพฒันาทีด่นิ จำกดั (มหาชน) Hemaraj Land And Development Public Company Limited

08Annual Reportรายงานประจำปี 2551

1 CorporateVision,Mission&Strategy

2 FinancialHighlights

3 MessagefromtheBoardofDirectors

4 InformationofBoardofDirectors

AndManagement

10 TheCompany’sBusinessProfile

12 Major/SignificantEventsin2008

19 Economic&CompetitiveCondition

20 ManagementAnalysis

23 ManagementStructure

32 GoodCorporateGovernance

40 ReportonResponsibilitiesoftheBoard

ofDirectorsTowardstheFinancialReportoftheyear

41 AuditCommittee’sReport

43 IndependentCertifiedPublicAccountants’Report

44 FinancialStatements

54 NotestoFinancialStatements

94 Shareholding&OrganizationStructure

95 GeneralInformation

97 OtherReferences

98 จุดเด่นทางการเงิน

99 สาส์นจากคณะกรรมการบริษัทฯ

100 ข้อมูลของคณะกรรมการ และคณะผู้บริหาร

106 ลักษณะการดำเนินธุรกิจ

108 เหตุการณ์ที่สำคัญในปี 2551

115 ภาวะเศรษฐกิจและการแข่งขัน

116 บทรายงานและการวิเคราะห์ของฝ่ายบริหาร

119 โครงสร้างการจัดการ

129 การปฏิบัติตามหลักการกำกับดูแลกิจการที่ดี

138 รายงานความรับผิดชอบของคณะกรรมการ

ในการจัดทำรายงานทางการเงินประจำปี 2551

139 รายงานของคณะกรรมการตรวจสอบ

141 รายงานของผู้สอบบัญชีรับอนุญาต

142 งบการเงิน

152 หมายเหตุประกอบงบการเงิน

193 โครงสร้างผู้ถือหุ้นและโครงสร้างองค์กร

194 ข้อมูลทั่วไปของบริษัทฯ

196 บุคคลอ้างอิงอื่นๆ

สารบัญ Contents

Hemaraj Land And Development Public Company Limited

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Annual Report 2008Annual Report 2008

CORPORATE VISION, MISSION & STRATEGY

Corporate Vision To create long-term shareholder value achieved through focused appropriate strategic, business, governance, and financial disciplines.

This long-term value can be realized by demonstrating and communicating respect for our customers, shareholders, employees, and stakeholders while consistently behaving in a manner that is communally, ethically, and environmentally responsible.

Mission To be “The World Class Developer in Thailand”

Hemaraj Strategy 1. Developing complementary property, utility and infrastructure customer solutions that have predictable growing revenue and

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



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Annual Report2008

Total Assets Total Liabilities

INDUSTRIAL LAND SALES

OPERATING REVENUE NET INCOME

TOTAL ASSETS AND TOTAL LIABILITES

Total Rental Property and Services Total Sale of Property

Total Industrial Estate Revenue Total Utilities Revenue Net Income bef Extra items Extra. Items

Year Year

Year Year

(Rai) (Milion Baht)

(Milion Baht) (Milion Baht)

Key Financial Figures

(Million Baht) 2006 2007 2008

Sales and Services Revenue 3,817 5,179 4,581 Total Industrial Estate Revenue 1,014 2,158 2,854 Total Utilities Revenue 658 721 924 Total Rental Property and Services 246 356 422 Total Sale of Property 1,898 1,944 382 Total Revenue 4,079 5,238 4,983 Gain from Extraordinary Items 86 - - Net Income 1,191 1,164 1,342 Total Assets 11,453 13,897 13,712 Total Liabilities 4,368 6,279 5,574 Total Shareholder’s Equity 7,085 7,618 8,138 Earning Per Share (Baht) 0.16 0.12 0.14 Par (Baht) 1.00 0.40 0.40

Key Financial Ratios

2006 2007 2008

Current Ratio (Times) 6.23 2.40 2.35 Net Debt to Equity (Times) 0.45 0.75 0.57 Return on Assets 11 % 8 % 10 % Return on Equity 18 % 15 % 17 % Net Profit Margin 22 % 22 % 27 % Earnings per Share [Baht] 0.16 0.13 0.14 Earnings per Share [Baht]-fully diluted 0.15 0.12 0.14 Book Value per Share (Baht) 0.78 0.81 0.87 No. of Shares Outstanding 9,036.93 9,354.21 9,381.84 (Million Shares) No. of Warrants Outstanding 672.46 355.18 327.55 (Million Shares)

Financial Highlights


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Annual Report 2008

We are pleased to report that Hemaraj Land And Development Public Company Limited finished 2008 with Total Net

income of Baht 1,342 million, an increase of Baht 178 million or 15%. Total Revenue was Baht 4,982 million

compared with Baht 5,238 million for the same period of 2007, representing a 4% decrease. With anticipated lower

residential revenue in 2008 (3% of operating revenue) compared to 2007 (43% of operating revenue), our growth

from a broad revenue base of industrial estates, utilities, and property replaced much of this.

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

reported 2008 Year-end Total Assets of Baht 13,712 million including Baht 932 million in cash. Total Liabilities were

Baht 5, 574 million with Total Shareholders Equity of Baht 8,138 million. The Net Debt to Equity ratio was 0.57 to 1

times.

We also led the market in industrial estates sales (or rental) with 1,621 rai (648 acres) recorded in the Year 2008, the

highest sale in the company history. Suzuki Motors, and other leading companies selected Hemaraj industrial

estates with 60 contracts (another record), 27 new customers and 33 project expansions from existing customers in

2008. So by all accounts 2008 was a record year of achievement. Hemaraj’s 6 industrial estates of 32,000 rai

(12,800 acres) include 394 distinct global customers, 584 contracts, with estimated USD 15 billion of customer

investment and comprises a petrochemical cluster as well as the “Detroit of the East” automotive cluster with over

131 distinct auto customers to date.

Having said that, the end of 2008 and in 2009 to date have seen unprecedented turmoil in the financial markets

globally, a dramatic drop in consumption, and subsequently drops in production levels for manufacturers with

disruptions in key areas of our customer base, namely automotive and petrochemical. Compared to our 1998

experience, on the positive side we are much stronger financially with a broader revenue base. The negative part is

the impact of export markets, which have now firmly been established in Thailand for automotive and other sectors.

We have prepared our business and financial plans, as best we can, for the short-term disruption in the market due

to severe global conditions.

We believe the long-term fundamentals for Thailand and our business model will remain attractive. As companies

reset demand expectations over the coming years, they will shift production to strategic locations based on cost

currency and market access, these being factors favoring Thailand. Infrastructure investment and industrial cluster

opportunities will continue to drive automotive, petrochemical, and other industrial sector investment in Thailand long

term, particularly at Hemaraj’s “Detroit of the East” automotive cluster in the Eastern Seaboard.

Hemaraj is positioned in these uncertain times still to increased broadened revenue opportunities as markets globally

start to settle and to recover over the next years. Hemaraj will continue significant investments in utilities including

power with our Gheco-One IPP power project and other recurring utility income. We also have a strong balance

sheet for acquisition and expansion opportunities. However, we also need to be cautious to manage the risk profile

of the company in this period particularly and in order to optimize predictable returns to shareholders. The

Management and the Board of Directors are grateful to our stakeholders for entrusting us with this responsibility.

Message from the Board of Directors

Mr. Chavalit Sethameteekul Chairman of the Board

of Directors 17 March 2009

Mr. David R. Nardone President & Chief Executive Officer 17 March 2009


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Annual Report2008

Information of Board of Directors and Management of Hemraj Land And Development Public company Limited

Mr. Chavalit Sethameteekul

Chairman of the Board, Member of Nomination and Remuneration Committee

Age: 61 Years

Education / IOD Trainning: 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 and DCP Certificates from the Thai Institute of Directors Association (IOD)

Kellog School of Management, “StrategicThinking and Executive Action” (Kellogg School of Management, Evanston, Illinois, Campus of Northwestern University, USA)

Present Positions:

• Chief Executive Officer Sriracha Harbour PCL. • Director Office of The Council of State • Director The Thai BAR

Previous Positions: • Director General, The Customs Department, Ministry of Finance • Deputy Permanent Secretaries 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

% Hemaraj Stock Held as of 31/12/2008: 0.00%

Mr. Thongchai Srisomburananont

Director, Chairman of the Executive Committee Member of Nomination and Remuneration Committee

Age: 56 Years

Education : Junior High School, Rojseri-Anusorn School

Present Positions: • Director Hemaraj International Co., Ltd. • Director Eastern Industrial Estate Co., Ltd. • Director Eastern Pipeline Services Co.,Ltd. • Director The Park Residence Co., Ltd. • Director Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. • Director Hemaraj Water Co., Ltd. • Director SME Factory Co., Ltd. • Director Leave Smart Co., Ltd. • Director H-Phoenix Property Co.,Ltd • Director Eastern Seaboard Industrial Estate (Rayong) Co.,Ltd. • Director Hemaraj Clean Water Co.,Ltd.


Board of Directors


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Annual Report 2008

Mr. David Richard Nardone

Director and Executive Director

Age: 53 Years

Education / IOD Trainning: MBA, Northeastern University, Boston, USA DCP Certificate from The Thai Institute of Directors Association (IOD)

Present Positions: • Chairman Elyo-H Facilities Management Ltd. • Chairman Eastern Pipeline Services Co.,Ltd. • Chairman H-Construction Management and Engineering Co.,Ltd • Director The Park Residence Co., Ltd. • Director and Executive Director Eastern Seaboard Industrial Estate (Rayong) Co.,Ltd. • Director Eastern Industrial Estate Co.,Ltd. • Director Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. • Director Hemaraj International Co., Ltd. • Director H-International (BVI) Co., Ltd. • Director Hemaraj Water Co., Ltd. • Director SME Factory Co., Ltd. • Director Rayong Industrial Land Co., Ltd. • Director S I L Industrial Land (Saraburi) Co., Ltd. • Director GHECO-One Co., Ltd. • Director H-Phoenix Property Co.,Ltd • Director Hemaraj Clean Water Co.,Ltd.


Mr. Sudhipan Charumani

Independent Director, Chairman of the Audit Committee, Chairman of the Nomination and Remuneration Committee

Age: 65 Years

Education / IOD Trainning: Institute of Chartered Accountants in England and Wales DAP,DCP and Audit Committee Certificates from The Thai Institute of Directors Association (IOD)

Present Positions:

• Director Vasupak Associates Co., Ltd.


Mr. Peter John Edmondson

Independent Director, Member of the Audit Committee

Age: 59 Years

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

Present Positions: • Investor Consultant Private Sector



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Annual Report2008

Mr. Vivat Jiratikarnsakul

Director and Executive Director

Age: 53 Years

Education / IOD Trainning: Bachelor of Sanitary, Faculty of Engineering, Chulalongkorn University

DAP and DCP Certificates from The Thai Institute of Directors Association (IOD)

Present Positions: • Director Eastern Industrial Estate Co.,Ltd. • Director and Executive Director Eastern Seaboard Industrial Estate (Rayong) Co.,Ltd. • Director Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. • Director Elyo-H Facilities Management Ltd. • Director H-Construction Management and Engineering Co.,Ltd • Director The Park Residence Co., Ltd. • Director Eastern Pipeline Services Co.,Ltd. • Director Hemaraj International Co., Ltd. • Director H-International (BVI) Co., Ltd. • Director Hemaraj Water Co., Ltd. • Director SME Factory Co., Ltd. • Director and Executive Director Rayong Industrial Land Co., Ltd. • Director and Executive Director S I L Industrial Land (Saraburi) Co., Ltd. • Director GHECO-One Co., Ltd. • Director H-Phoenix Property Co.,Ltd • Director Hemaraj Clean Water Co.,Ltd.


Mrs. Punnee Worawuthichongsathit

Independent Director, Member of the Audit CommitteeMember of the Good Corporate Governance Committee

Age: 57 Years

Education / IOD Trainning: Master in Accounting, Chulalongkorn University DAP,DCP and Audit Committee Certificates from The Thai Institute of Directors Association (IOD)

Present Positions: • Independent Director/ TT&T PCL. Member of the Audit Committee • Independent Director/ The Brooker Group PCL. Member of the Audit Committee



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Annual Report 2008

Mr. Vikit Horrungruang

Director

Age: 38 Years

Education / IOD Trainning: MBA, Finance, Northeastern University, USA DCP Certificate from The Thai Institute of Directors Association (IOD)

Present Positions: • 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 • Managing Director Phromnares Co.,Ltd.


Ms. Pattama Horrungruang

Director and Executive Director, Member of the Good Corporate Governance Committee

Age: 47 Years

Education / IOD Trainning: MBA, Thammasat University

DAP and DCP Certificates from The Thai Institute of Directors Association (IOD)

Present Positions: • Director Eastern Industrial Estate Co.,Ltd. • Director Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. • Director and Executive Director Eastern Seaboard Industrial Estate (Rayong) Co.,Ltd. • Director The Park Residence Co., Ltd. • Director Elyo-H Facilities Management Co., Ltd • Director Hemaraj Water Co., Ltd. • Director SME Factory Co., Ltd. • Director Eastern Pipeline Services Co.,Ltd. • Director H-Phoenix Property Co.,Ltd • Director Hemaraj Clean Water Co.,Ltd. • Director GHECO-One Co.,Ltd. • Director CA-Post (Thailand) Co.,Ltd.


Mr. Somphong Wanapha

Independent Director, Chairman of the Good Corporate Governance Committee

Age: 65 Years

Education / IOD Trainning: MBA, Finance, Michigan State University, USA (Royal Thai Government Scholarship)

DCP Certificate from The Thai Institute of Directors Association (IOD)

Present Positions: • Chairman of the Government Savings Bank Audit committee • Chairman of the Prasit Patana PCL. Audit committee • 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. Previous Position : • Secretary General Thailand Board of Investment


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Annual Report2008

2 4

8 7 6

1 3

10 11 12 13 14 15 5 9

1. Mr. David Richard Nardone Age 53

Education MBA, Northeastern University, Boston, USA Position at Hemaraj Director / Executive Director / President / Chief Executive Officer Year Joined Hemaraj 1993Hemaraj Stock Held as of 31/12/2008: 0.44%

2 Mr. Vivat Jiratikarnsakul Age 53

Education Bachelor of Sanitary, Faculty of Engineering, Chulalongkorn University Position at Hemaraj Director / Executive Director / Senior Vice President / Executive Vice President Year Joined Hemaraj 1989Hemaraj Stock Held as of 31/12/2008: 0.09%

3 Ms. Pattama Horrungruang Age 47

Education MBA, Thammasat University Position at Hemaraj Director / Executive Director / Senior Vice President / Chief Financial Officer Year Joined Hemaraj 2003Hemaraj Stock Held as of 31/12/2008: 0.00%

4 Mr.Sunthorn Kongsunthornkitkul Age 58

Education Bachelor of Engineering, Chulalongkorn University Position at Hemaraj Vice President Year Joined Hemaraj 2007Hemaraj Stock Held as of 31/12/2008: 0.00%

5 Mr.Preeprem Malasitt Age 57

Education MBA, Northern Illinois University, USA Position at Hemaraj Director - IE Training Center and New Projects Year Joined Hemaraj 2007Hemaraj Stock Held as of 31/12/2008: 0.00%

6 Mr. Sirisak Kijruksa Age 48

Education Bachelor of Accounting, Bangkok University Position at Hemaraj Director - Accounting and Legal Year Joined Hemaraj 1990Hemaraj Stock Held as of 31/12/2008: 0.00%

7 Mr. Khamhoung Ratsamany Age 42

Education MBA, Bangkok University Position at Hemaraj Director - Water & Small Power Project Planning Year Joined Hemaraj 1995Hemaraj Stock Held as of 31/12/2008: 0.00%

8 Ms. Ladda Rojanavilaivudh Age 41

Education MBA, Bangkok University and MA, Nara Women University, Nara, Japan Position at Hemaraj Director - Industrial Customer Development Year Joined Hemaraj 2001Hemaraj Stock Held as of 31/12/2008: 0.00%

9 Ms. Anchalee Parsertchand Age 39

Education MBA, Assumption University and MA, Japanese, Keio University, Tokyo, Japan

Position at Hemaraj Director - Industrial Customer Development Year Joined Hemaraj 2001Hemaraj Stock Held as of 31/12/2008: 0.00%

10 . Ms. Somjai Wachiraha Age 48

Education Bachelor of Business Administration, General Affairs, Ramkhamhaeng University Position at Hemaraj Director - Finance Year Joined Hemaraj 1990Hemaraj Stock Held as of 31/12/2008: 0.00%

11. Ms. Jinnapat Tongviseskul Age 39

Education MBA, Economic & Administration, Chulalongkorn University Position at Hemaraj Director - Residential Customer Development Year Joined Hemaraj 1993Hemaraj Stock Held as of 31/12/2008: 0.00%

12. Ms. Chantana Hinkaew Age 39

Education MBA, University of Nottingham, UK Position at Hemaraj Director - Corporate Marketing Year Joined Hemaraj 2004Hemaraj Stock Held as of 31/12/2008: 0.00%

13. Mr. Apichat Trongsukson Age 44

Education MBA, Nida University Position at Hemaraj Assistant Director - Information System & Services Year Joined Hemaraj 1994Hemaraj Stock Held as of 31/12/2008: 0.00%

14 . Mr. Tanin Subboonrueng Age 45

Education MBA, Business Administration, Assumption University Position at Hemaraj Director - Industrial Estate Development Year Joined Hemaraj 1996Hemaraj Stock Held as of 31/12/2008: 0.00%

15. Mr. Paopitaya Smutrakalin Age 38

Education MS, Finance, Drexel University, Philadelphia, USA Position at Hemaraj Director - Corporate Planning & Investor Relations Year Joined Hemaraj 1996Hemaraj Stock Held as of 31/12/2008: 0.00%

Mr. Niphone Harnpatanapanich Age 51

Education MBA, Chulalongkorn University Position at Hemaraj Director - Residential Project Planning Year Joined Hemaraj 2003Hemaraj Stock Held as of 31/12/2008: 0.00% (Not in the picture)

Ms. Prattana Kijjanon Age 45

Education MBA, Thammasat University Position at Hemaraj Director - Procurement Year Joined Hemaraj 2008Hemaraj Stock Held as of 31/12/2008: 0.00% (Not in the picture)

Management

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Annual Report 2008

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Hemaraj Land And Development Plc.

Hemaraj International Co.,Ltd.

H-International (BVI) Co., Ltd.

Eastern Industrial Estate Co.,Ltd.

Eastern Pipeline Services Co.,Ltd.

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

H-Construction Management and Engineering Co.,Ltd

The Park Residence Co., Ltd.

Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd.

Hemaraj Water Co., Ltd.

SME Factory Co., Ltd.

H-Phoenix Property Co., Ltd.

Hemaraj Clean Water Co., Ltd.

Elyo-H Facilities Management Ltd.

Rayong Industrial Land Co., Ltd.

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

GHECO-One Co., Ltd.

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�0


Annual Report2008

Celebrating the twenty years in 2008, Hemaraj has its strongest operating and financial condition ever.

With the vision of Mr. Sawasdi Horrungruang, Founder and Chairman of Advisors to the Board of Directors

of Hemaraj, the company has been a key contributor to Thailand’s industrial development since 1988

through the “Detroit of the East” automotive cluster and downstream petrochemical and industrial clusters.

As Hemaraj enters its third decade, it has continued to serve the society and build its future on three

key pillars: Industrial Estates, Utilities and Property customer solutions while maintaining the principle of

sustainable development for environment and communities.

1 Industrial Estates

Being among the first operators of industrial estates in Thailand with one industrial estate at the

start, Hemaraj now has six locations totaling over 31,000 rai of land (13,000 acres): Hemaraj Chonburi

Industrial Estates for steel, power and others, Hemaraj Eastern Industrial Estate (Map Ta Phut) for

petrochemical and steel industries, Eastern Seaboard Industrial Estate (Rayong) and Hemaraj Eastern

Seaboard Industrial Estate, the famous auto cluster, and S I L Industrial Land and Rayong Industrial Land.

Hemaraj’s industrial estates have attracted 394 distinct customers, comprising over 580 industrial

estate or building contracts. The 131 automotive customers include OEM manufacturers such as Ford,

Mazda, GM and Suzuki. In 2008, Hemaraj has continued to be no. 1 market leader in industrial estates

sales (or rental) with the company’s record high at 1,621 rai (648 acres) from 60 contracts, 27 new

customers and 33 project expansions from existing customers which includes 21 new SME factories

contracts signed with 16 new factory rentals and 6 factory sales.

Hemaraj’s Industrial Estates as of December 31, 2008

Industrial Estates Location BOI Zone Gross Area No. of No. of Land Sales/ Industrial Land (rai) Customers Contracts in 2008 (rai)

1. Hemaraj Chonburi Industrial Estate Chonburi 2 3,993 50 76 6

2. Hemaraj Eastern Industrial Estate Rayong* 3 3,473 39 51 13

3. Eastern Seaboard

Industrial Estate (a) Rayong* 3 8,628 214 350 397

4. Hemaraj Eastern Seaboard Rayong* 2 and 3 8,163 23 31 1,029

Industrial Estate /Chonburi

5. SIL Industrial Land (b) Saraburi 2 3,619 48 55 135

6. Rayong Industrial Land (b) Rayong* 3 3,438 20 21 41

Total 31,314 394 584 1,621

Note: (a) 60:40 Joint Venture with Siam Food Products Plc.

(b) 25:75 Joint Venture with Cementhai Property (2001) Plc., a subsidiary of The Siam Cement Plc.

* with BOI Zone 3 grandfathered privilege until 2009

The Company’s Business Profile

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Annual Report 2008

2 Utilities

2.1 Industrial Estate: Presently the largest private supplier of clarified and treated potable water to

industrial users with the capacity of 150,000 cubic meters per day, 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.

2.2 Power:

- GHECO-One Company Limited, a 35/65 Joint Venture in a 660 MW IPP with Thailand’s largest

private power provider of 1,670 MW, Glow Energy, a Suez Energy Group, formally named Tractebel,

Belgium to supply power to Electricity Generating Authority of Thailand (EGAT).

- Hemaraj holds 5% equity in Glow IPP, the 713 MW IPP Power Project locating in Hemaraj

Chonburi Industrial Estate.

2.3 Water:

- Hemaraj Water Company Limited: a 100% subsidiary company to develop and manage Water

Resources to provide treated water to industrial operators.

- Hemaraj Clean Water Company Limited: a 100% subsidiary company to produce and distribute

the industrial water to supply the industrial operators in the Industrial Estates.

2.4 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.

- Elyo-H Facilities Management Limited: a 40/60 Joint Venture with Suez Energy and Teo Hong

Silom to provide utility and facility management services to industrial customers. Major customers are

ESSO, Shell, Caltex, GE Plastic, Glow IPP, Glow SPP, Toyoda, Vinythai, Lite On and Saint-Gobain Sekurit.

- Eastern Pipeline Services Company Limited: a 100% subsidiary company to provide piping

distribution for Chemical, Stream and Industrial Gas for Heavy Industrial Users with a total investment of

Baht 200 million.

- H-Construction Management and Engineering Company Limited: a 100% subsidiary company

to provide design, construction supervision, project and construction management services.

3 Property

3.1 SME Factories for Rent and Sales:

Hemaraj designs and develops turnkey and expandable SME factories sizing from 750 square

meters to 7,500 square meters for rent and sales located in both General Industrial Zone and Duty Free

Zone in multiple industrial estates/zones of Hemaraj. H-Construction Management and Engineering,

Hemaraj’s subsidiary company, also manages the utility and fit-out requirements to fit customers needs. This

rental of SME factories provides customers flexibility on investment and financing as well as a growth path

to larger buildings or developed land as their business expands. Hemaraj has built 115 units with over

245,800 square meters to date in its multiple industrial estate locations.

3.2 Selective Property:

- H-Phoenix Property Company Limited: a 100% subsidiary company for commercial property

lease or sale and management with a registered capital of Baht 800 million and Baht 785 million paid-up

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Annual Report2008

j Industrial Estate Land Sales

As another successful year, Hemaraj has continued to be no. 1 market leader in industrial estates sales

(or rental) with the company’s record high at 1,621 rai (648 acres) from 60 contracts, 27 new customers and

33 project expansions from existing customers which includes 22 new SME factories contracts signed with

16 new factory rentals and 6 factory sales in 2008. Suzuki Motor Corporation, a leading car manufacturer,

purchased 421 rai (165 acres) at Hemaraj Eastern Seaboard Industrial Estate (Hemaraj ESIE) , or the Detroit

of the East II in Rayong to be used for the construction of Suzuki’s Eco-car manufacturing and CKD kit

assembly plant.

Total industrial customers are 394 distinct new customers with 582 contracts and 131 automotive

customers representing some USD 15 billion of customer investment.

j GHECO-One PPA Signing and Project Financing

GHECO-One, in which Hemaraj holds 35% signed an agreement for project financing of USD 460

million and Baht 9,960 million for its 660 MW IPP Power Project. The project was granted EIA

(Environmental Impact Assessment) approval on 15 May 2008 and entered into a 25 years Power Purchase

Agreement with EGAT (Electricity Generating Authority of Thailand) on 10 September 2008.

The IPP project will be financed in US Dollars by seven international banks: Sumitomo Mitsui Banking

Corporation, Standard Chartered Bank, KfW, Fortis Bank, KBC, Bank of Tokyo-Mitsubishi UFJ and Calyon.

Financing in Thai Baht will be provided by Kasikornbank and Bank of Ayudhya. The equity contribution of

Baht 13,500 million to the project will be funded 65% by Glow Group and 35% by Hemaraj.

The GHECO-One coal-fired IPP power plant project, which began construction preparation in July, is

scheduled to have its commercial operation in November 2011. The Korean contractor, Doosan, is the EPC

Contractor for this project.

The IPP project will benefit Thailand by providing higher fuel diversification and lower electricity prices.

It will also benefit local communities, who will see NOx and SO2 emissions reduced. The project is

environmentally friendly, using highly sophisticated and supercritical technology with advanced emission

control system and high fuel efficiency. Glow will also invest in technology to reduce the emission levels from

existing plants, so that the total NOx and SO2 emission levels (both actual and maximum) in Map Ta Phut

will be lower than current levels after the new IPP becomes operational. The net result will be an

improvement in the overall air quality in Map Ta Phut.

The project will also enter into a contractual commitment to contribute additional funds, around Baht

100 million per year, to support local community development. The fund will contribute to education, health

care, employment, improvements in the standard of living, and social development for the communities

surrounding the estates.

j Hemaraj Clean Water Co., Ltd.

On June 30, 2008, Hemaraj has established a subsidiary called Hemaraj Clean Water Company

Limited (HCW) to produce and distribution of industrial water to industrial customers both inside and outside

Hemaraj’s industrial estates. HCW has total registered capital of Baht 645 million and Hemaraj holds

99.99% of its total capital. The investment shall increase the efficiency of industrial water services to the

customers and enhance the revenue growth. In addition, this establishment is part of company’s strategy to

invest in water business.

Major/Significant Events in 2008

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Annual Report 2008

j The PARK CHIDLOM and CNBC Award

The Park Chidlom won the Best High Rise Development Thailand – Five Star Award of the prestigious

CNBC Asia Pacific Property Awards 2008.

The CNBC Asia Pacific Awards is part of the CNBC International

Property Awards established since 1995. The awards are now

established as the premier programme recognizing excellence in its field

and the biggest in the world.

The award is given to “The Park Chidlom” based on the quality of the project’s concept, architecture,

interiors, construction, overall developments and marketing.

j Major Customer Development

Suzuki Purchases 412 Rai at Hemaraj Eastern Seaboard Industrial Estate for Eco-car Production Base

Suzuki Motor Corporation, a leading car manufacturer, signed an

agreement to purchase land of 412 rai at Hemaraj Eastern Seaboard

Industrial Estate or the Detroit of the East II. The land will be used for the

construction of Suzuki’s BOI promoted Eco-car manufacturing and CKD

kit assembly plant, scheduled to commence operation in 2010. The total

value of investment is Baht 9.5 billion.

Bitumen Rents SME Factory at Hemaraj Chonburi Industrial Estate

Bitumen Bales (Laem Chabang) Co., Ltd. signed a contract to rent

an SME factory at Hemaraj Chonburi Industrial Estate. The factory will

package bitumen in polymer film with a production capacity of 600-

1,000 metric ton per day for 100% export to Vietnam, Laos, Myanmar,

Cambodia and Southern China.

Muangmaichromium Purchases Land at Hemaraj’s Eastern Seaboard Industrial Estate (Rayong)

Mungmaichromium Co., Ltd., one of the leading providers of

plating services for metal corrosion prevention, signed a contract to

purchase land for a factory at the Eastern Seaboard Industrial

Estate (Rayong). The factory will provide Electro Zinc plating and

Electro Zinc Tin Plating services with a capacity of Line Rack Auto

300,000 pieces per day, Line Barrel Auto 30 ton per day and

Electro Deposition Painting (EDP) 100,000 pieces per day. With an

aim to support the auto industry in Thailand, which is one of the world’s key auto manufacturing bases, the

plant will have an investment of Baht 250 million and will start operation in 2009.

Thai Rayon Purchases Land at S I L Industrial Land (Saraburi)

Thai Rayon Public Company Limited, the pioneer manufacturer of

Viscose Rayon Staple Fibre in Thailand and one of the largest exporter

in the world, signed a contract to purchase 20 rai of land for its CS2

factory expansion at S I L Industrial Land (Saraburi). At present, Thai

Rayon produces viscose fibres for textile and non-woven industry at a

capacity of 110,000 MT per annum for domestic consumption and

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Annual Report2008

export to China, Pakistan, South Korea, Turkey, Brazil, Canada, Malaysia, Philippines, U.S.A. and European

countries. A substantial quantity of Sodium Sulphate is also being produced as a co-product with a capacity

82,500 MT per annum mainly for domestic consumption. Fuserashi Purchases Land at Hemaraj Eastern Seaboard Industrial Estate

Fuserashi Co., Ltd., leading Japanese manufacturer of fasteners, signed

a contract to purchase 21 rai of land for its factory at Hemaraj Eastern

Seaboard Industrial Estate. The factory will produce fasteners and cold

forging products for various areas, especially in automotive industry at a

capacity of 200 tons per month in the initial stage.

Nippon Steel & Sumikin Welding Purchases Land at Eastern Seaboard Industrial Estate (Rayong)

Nippon Steel & Sumikin Welding (Thailand) Co., Ltd. (NSSW), a leading

manufacturer of welding materials and machines from Japan, signed a

contract to purchase 12 rai of land for its factory at the Eastern Seaboard

Industrial Estate (Rayong). NSSW Thailand has a registered capital of Baht

200 million, 88 percent of which is held by Japanese shareholders and 12

percent by Thai shareholders. The factory will produce welding solid wire at a

capacity of 570 ton per month.

Ebro Valves Purchases Additional Land at Hemaraj Chonburi Industrial Estate

Ebro Valves (Thailand) Co., Ltd., a manufacturer of butterfly valves

and valve components, signed a contract to purchase an additional piece

of land in Hemaraj Chonburi Industrial Estate, Chonburi. EBRO Valves

(Thailand) Co., Ltd is currently producing approx. 330,000 pieces of valves

and valve bodies per year for mainly export to Europe. The company will

expand its manufacturing and storage facilities on a 4.5 rai plot of land to

meet growing demands.

Max (Thailand)’s Expansion at Eastern Seaboard Industrial Estate (Rayong)

Aiming at establishing a solid foundation for further production expansion and increasing the

company’s competitiveness, Max (Thailand) Co., Ltd., signed a contract to purchase SME factory at the

Free Zone of Eastern Seaboard Industrial Estate (Rayong).

A 100% subsidiary of MAX CO., LTD., Japan’s leading manufacturer of Nailers, Max (Thailand) started

operation by renting SME factory in ESIE Free Zone in August 2005. After years of success, the company

decides it is time to invest on its own production facility. SME Factories for Rent and Sale of Hemaraj is a

flexible option for manufacturers. Customers who would like to start a business at low risk can simply rent a

factory first and purchase it later on, or choose to buy land and build their own factory in Hemaraj’s industrial

estate.

The factory has been manufacturing high-quality Nailers

with a capacity of 100,000 units per year. This is for mainly

export to America and Europe. With addition of series of new

products, the company has established a strong base for

expansion in the second half of the year 2008 and is well

prepared to be the supply base in Thailand under global

competition.

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Annual Report 2008 Autoconsol Chooses Hemaraj’s Industrial Estate for Production Base

Autoconsol (Thailand) Co., Ltd., Taiwanese manufacturer of steel

box for auto part logistic, signed a contract to lease a SME Factory at

Eastern Seaboard Industrial Estate (Rayong). A 100 % owned by

Taiwanese investors with a registered capital of Baht 37 million, the

factory will produce steel box and inner support at a capacity of 20,000 and 60,000 sets per year

respectively.

U-Shin’s Expansion at Hemaraj Eastern Seaboard Industrial Estate

U-Shin (Thailand) Co., Ltd., a leading Japanese manufacturer of key set

and heater control, signed a contract for purchasing additional land of 36.6 rai

at Hemaraj Eastern Seaboard Industrial Estate. The land will be used for its

new factory to produce automobile key-set, heater control and latches for

future sales expansion. The product will be mainly supplied to Honda, AAT, MMth, Suzuki, Isuzu, GM.

j Major News and Social Contributions

Hemaraj Presents Bomb and Drug Locator and Mobile Phone Signal Jammer to the First Army Region

Hemaraj together with alliances, led by Mr. Sawasdi Horrungruang (6th

from left), Chairman of Advisors to the Board of Directors of Hemaraj,

presented 15 sets of bomb and drug locator and 3 sets of mobile phone

signal jammer worth Baht 20 million to the First Army Region for use in the

Army’s operation in the three southernmost provinces of Thailand. The

presentation was presided over by First Army Region Commander Prayut Chanocha (middle).

US Ambassador and AMCHAM Visit Hemaraj’s Industrial Estates

The American Chamber of Commerce in Thailand (AMCHAM) recently

organized a trip to Eastern Seaboard with the US Ambassador, H.E. Eric G.

John, as the guest of honour. The trip participants had a chance to visit

Map Ta Phut Petrochemical Complex, Hemaraj’s “Detroit of the East”:

Eastern Seaboard Industrial Estate (Rayong) and Hemaraj Eastern Seaboard Industrial Estate.

Hemaraj Announces Record Business Success and Gives Full-Board Scholarships in Celebration of its 20th Anniversary

In November 2008, Hemaraj organized a press conference to announce its record year of business

success and future outlook on the occasion of its 20th Anniversary celebration. In commemoration of the

occasion, the company has awarded five additional full-board scholarships worth a total of Baht 2 million to

five students from Rayong province to pursue education at vocational college and university levels.

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Annual Report2008

Hemaraj & AMCHAM Continue “Adopt A School” Program in Map Ta Phut, Rayong

Hemaraj and its customers in cooperation with the AMCHAM Thailand Charitable Foundation handed

over capital improvements and learning tools worth Baht 350,000 to 6 schools around Hemaraj Eastern

Industrial Estate (Map Ta Phut) area under the “Adopt A School” Program.

The schools and centers which received the benefit are Wat Map Chalood, Ban Nong Fab, Nikom 6,

Chak Pak Kood, Nikom2 and Rayong Pittayakom. The “Adopt A School” Program is one of several

Hemaraj’s Corporate Social Responsibility (CSR) programs, which has been implemented for over 10 years.

Hemaraj Organizes Environmental Field Trip for Students from Rayong

Hemaraj arranged environmental field trip for teachers and students from Wat Map Chalood and Ban

Nong Fab schools, Rayong province to visit Siam Ocean World and participate in a presentation entitled

“Global Warming” organized by Coral and Coastal Conservation Foundation at Krungsri Imax Theatre, Siam

Paragon. Aimed at raising the public awareness on the critical issue, the session features a lecture on global

warming by Dr Thorn Thamrongna-wasawadi followed by a documentary film “THE APLS”

Hemaraj & Samitivej Sriracha Hospital Jointly Provide Mobile Medical Service to Communities in Rayong

Hemaraj in cooperation with Samitivej Sriracha Hospital organized a

free-of-charge mobile medical unit for local communities surrounding

Hemaraj’s Eastern Seaboard Industrial Estate (Rayong). The medical

services include blood sugar and fat levels checking, general health check-ups

and consultation from medical experts. The activity is organized annually as

part of Hemaraj’s continuous Corporate Social Responsibility program.

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

Hemaraj in coordination with customers and alliances in its industrial

estates distributed school kits, school backpacks and sport equipment to

12,500 students in 37 schools in Rayong and Chonburi provinces under its

Annual School Contribution Program. The project is part of Hemaraj’s

social contribution activities, which has been continuously implemented for

over 10 years.

Hemaraj Donates Baht 1,000,000 for Earthquake Relief in China

Hemaraj presented the donation of Baht 1,000,000 to Mr. Zhang

Guoqing, Minister-Counselor, Deputy Chief of Mission at the Embassy of

the People’s Republic of China in Thailand to assist the victims from the

devastated earthquake in the Sichuan province, People’s Republic of China.

Hemaraj Skill Training Center in Eastern Seaboard IE Ready for Full Service

Hemaraj organized a road show to invite manufacturers and workers in

Rayong and Chonburi to enroll in the skill training courses of Hemaraj Skill

Training Centre. Located in Hemaraj’s Eastern Seaboard Industrial Estate

(Rayong), the Center is ready to provide practical work courses such as basic

skill training, welding, metal work techniques, autocad, industrial habit

orientation, tailor-made courses on demand, etc. The program also includes a

fast track Higher Vocational Certificate with relevant work experience

transferable into credits in 3 majors: Electronics, Production Technology and Logistics. This is to enhance

skill and career path of workers with M.3, M.6 or Lower Vocational Certificate.

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Annual Report 2008

In cooperation with the Vocational Education Commission and the Department of Skill Development,

the Skill Training and Development Centre was established as part of Hemaraj’s efforts to support the

country’s strategic industrial development by boosting skills and knowledge of those already in employment

and those about to enter the manufacturing sector

Hemaraj Announces Sponsorship to Chonburi Football Club and Land Donation and Scholarship to Sugar Mill School, Rayong

Hemaraj announced and presented a three-year sponsorship to

Chonburi Football Club worth a total of Baht 18 Million (funding of Baht 6

Million a year). On the same occasion, a donation of 1.5 rai of land worth

Baht 1 million in Pluak Daeng District and 10 scholarships worth Baht

50,000 (Baht 5,000 each) to needy students with excellent academic

records were also presented to Sugar Mill School in Rayong province.

Hemaraj Presents Scholarships to Students of Sugar Mill School, Rayong Province

Hemaraj presented 10 scholarships worth Baht 50,000 (Baht 5,000

each) to needy students with excellent academic records in Sugar Mill

School, Rayong province.

24-hrs Ambulance Service For Customers in Hemaraj’s Industrial Estates

Hemaraj in cooperation with Samitivej Sriracha Hospital has expanded

its ambulance service to 24 hours x 365 days to serve the immediate needs

of people working for day and night shifts in the Eastern Seaboard Industrial

Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate and Hemaraj

Chonburi Industrial Estate. The service is part of Hemaraj’s program in

providing value added services to customers operating in its industrial estates

Hemaraj and AMCHAM Organized Dedication Day for Adopt-A-School “Train The Trainers” Program

Hemaraj in cooperation with the AMCHAM Thailand Charitable Foundation organized a Dedication Day

for Adopt-A-School “Train The Trainers” program in recognition of the successful participation of directors

and teachers from 40 primary schools located around Eastern Seaboard.

Initiated in September this year under the annual Adopt-A-

School project, the program comprises field trips and workshops

aiming at providing the participants with innovative skills on holistic

approach teaching based on a highly-successful program

implemented at Lamplaimat Pattana School in Buri Ram Province

established by Population and Community Development Association

(PDA) and James Clark Foundation. The school was evaluated by The University of Tasmania in Australia

for its efficient teaching and learning method that is of the same level of international schools. Customers of Hemaraj-EIE Support Adopt-A-School “Train The Trainers” Program

Hemaraj organized a “Train-the-Trainers” program for teachers in

Rayong Province. The training is part of the “Adopt A School” project which

is a Corporate Social Responsibility (CSR) program under the cooperation

between Hemaraj Land And Development Plc. and AMCHAM Thailand

Charitable Foundation. Until now 200 teachers have been trained under the

program.

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Annual Report2008

On the same occasion customers of Hemaraj Eastern Industrial Estate (Map Ta Phut) also donated

cash to support the “Adopt-A-School -Train The Trainers” program for training teachers for schools in

Rayong and Chonburi provinces.

Hemaraj held Drawing and Essay Contests

As part of its 20th anniversary celebration, Hemaraj held a drawing contest entitled “Hemaraj,

Community and Environment” for students in level 4-6 primary schools and an essay contest entitled

“Hemaraj and Community” for students in level 1-3 secondary schools with an aim to provide the students

around the Eastern Seaboard with creative skills. Entries for the contests include 400 paintings and essays

from 22 schools.

Hemaraj Selected for “Beautiful Gardens in Industrial Estate” Book

Hemaraj was selected among 40 beautiful gardens to be published in “Beautiful Gardens in Factories

and Industrial Estates” book – volume 1. The project is initiated by the Thai Industrial Estate Foundation

(TIEF) and the Industrial Estate Authority of Thailand (IEAT) under the concept “Clean and Green” with the

objective to raise awareness among factories and industrial estate developers towards the importance and

value of green areas in environmental conservation. A portion of the proceeds from the book after deduction

of expenses will be presented to His Majesty the King on the Auspicious Occasion of His Majesty the King’s

80th Birthday Anniversary.

j 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.

Besides focusing on environmental management, Hemaraj also encourages companies in the estates to

become aware of the significance of environmental care and community relations. Hence, the Safety 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 Environmental Training

Program for Youth, internal and external Emergency Practice among the estates and the communities

nearby. Since year 2000, Hemaraj has been practicing and managing environmental related projects and

has received the Environmental Management System: ISO 14001.

Through 2008, Hemaraj achieved respectable collaborations from companies within the estates to

constantly manage and care for the environment around the industrial estates and the communities near by.

To prevent any environmental issues including wastewater, polluted air and industrial waste, which may

effect to the community, all parties in the estate run their business by the rules and regulations. The

environmental management programs within the industrial estates were efficiently conducted with the

verifications from government and independent agencies all through the year. Regarding the emergency

responses, Hemaraj has improved the measurement to conduct proper response by enhancing the

communication systems and providing advanced training courses to the safety team to be able to effectively

react to all circumstances by all means.

Hemaraj sees 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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Annual Report 2008

% GDP % Capacity Utilization

Rai

6.2

4.5

5.14.9

3.0

Thailand Industrial Property Market Baht : Million

Total Vehicles & Parts Petrochemical

BOI Application Approvals

3,236

2,6952,865

4,6174,170

601 571

373

744

500

The 2008 Thai economy forecasted to grow only 3.0% compared to 4.9% in 2007. It is mostly due to

shrink in domestic consumption, global economic slow down and the closedown of major airports, which

greatly affected transportation of goods as well as tourists towards the end of the year.

In 2008, the Private Consumption Index expanded only by 2.5% while Manufacturing production

continued to grow by 5.3% and the capacity utilization rate decreased to 69.3%. For the year 2008, the

Private Investment Index grew by 4.3%. Export volumes for Thailand were increased to US$ 175.3 billion, a

16.8% increase, while Imports increased by 26.4% to US$ 175.0 billion. Current account ended the year

with a minus of US$ -0.1 billion. The balance of payments was US$ 24.6 billion significantly increased from

last year’s surplus of US$ 17.1 billion.

The industrial property market sector decreased 13%, from 4,812 rai in 2007 to 4,170 in 2008. The

Board of Investment (BOI) project approval significantly decreased to Baht 500 billion compared with Baht

745 billion in 2007, or 33% decrease. The number of projects approved was 1,253 projects, a 7% decrease

from 2007.

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

one-ton pickups and small passenger cars, with the production has reached 1.39 million vehicles in 2008.

Domestic vehicle sale in 2008 was 614,078 vehicles and 775,652 vehicles for export. In 2008, automotive

export was Thailand’s No. 1 export with 10.4% of total export value.

Source: Bank of Thailand, February 2009, Board of Investment, January 2009

CB Richard Ellis, Quarter 4, 2008

Economic & Competitive Condition

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Annual Report2008

Management Analysis j Operating Performance

For the Year 2008, Hemaraj reported Total Net Income of Baht 1,342.0 million, or an increase of Baht

178.4 million or 15% compared with the same period of 2007. This was partially due to the Year 2008

included dividends and profits from associated companies of Baht 73.6 million, the reversal of specific tax

and transfer fee accruals of Baht 248.2 million from previous quarters due to the announce decrease in

specific business tax and transfer fee from the Government Announcement, and a lower income tax

compared to the same period of prior year.

For the Year 2008, Hemaraj’s Total Revenue was Baht 4,982.5 million compared with Baht 5,238.1

million for the same period of 2007, representing a 5% decrease. Total Operating Revenue from core

businesses was Baht 4,581.4 million, a 12% decrease from the same period of 2007. Industrial Estate Land

Sales for the Year 2008, including Profit from Associated Industrial Estate, were a record Baht 2,853.9

million, or a 32% increase. There is an additional Baht 1,209 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 and representing sales that will be recognized primarily over the next 3 to 18

months.

Industrial Estate Sales were #1 Market Share 20081 (3 years running) with 1,621 rai (648-acres), with

60 contracts, 27 new customers and expansion from 33 existing customers.

Total Utilities Revenue including industrial estate utilities, profit dividend from power utilities associates,

and other utilities and services fees increased to Baht 924.0 million, an increase of 28%. Total Rent Revenue

including SME factory rental, pipe-rack rental, and commercial office rental increased to Baht 421.7 million,

an increase of 28%. Sale of Property including SME factory sales, residential sales and other land/property

sales decreased to Baht 381.8 million from Baht 1,944.0 million, an 80% decrease somewhat anticipated

due to residential prior year percent completion.

j Financial Status

The consolidated Balance Sheet in 2008 is summarized as follows.

Total Assets in 2008 were Baht 13,712 million, a 1% increase from Baht 13,897 million in 2007. Total

Current Assets in 2008 were Baht 8,171 million compared to Baht 10,611 million in 2007, or a decrease of

23%. This includes Cash on Hand of Baht 932 million, Account Receivable of Baht 1,229 million and Land

held for Real Estate development of Baht 5,930 million.

Other Assets were Baht 5,540 million in 2008. This includes Land held for commercial purposes not

under development of Baht 315 million, assets for rent of Baht 2,041 million, and long-term investment in

other companies of Baht 569 million. Long term investment includes the 25% holding in S I L Industrial Land

Co., Ltd., a joint investment with the company in Siam Cement Group and 35% holding in Gheco-One, a

joint investment with Glow Energy (GDF Suez) of which Baht 2,059 million deposited for future equity

commitment.

Total Liabilities in 2008 were Baht 5,575 million an 11% decrease from Baht 6,279 million in 2007. The

decrease was mainly from reduced cash liabilities and the increased of deferred income.

1 Source: CB Richard Ellis

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Annual Report 2008

Total Shareholders Equity in 2008 was Baht 8,138 million versus Baht 7,618 million in 2007, or a 7%

increase due to the Net Operating Profit of 2008, the dividend payment, and the exercise of the warrants.

During the Year 2008, 27.62 million units of warrants were exercised to common shares. As of December

31, 2008, there were 9,381.84 million common shares and 327.54 million warrants outstanding. The 2007

Net Debt to Equity ratio was at 0.57 to 1.

j 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, oil price, interest rates, land cost, construction cost, delays in

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

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

systematic monitoring and analytical measurement to prevent and to minimize such risks. 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.

The current global economic downturn will significantly impact on the company’s business in the short

term with a reduction in capacity needs and hence in industrial estate demand from new and expansion

customers. There is also an increased risk and softness in SME Factory rental due to decrease in demand

or delayed programs, utility demand reduced slightly as production utilization has dropped, while customers

reduce pipeline and inventory positions.

However, industrial development is in place, broad revenue cushions this impact, and strong balance

sheet minimize 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 companies

financial management.

An appropriate and sufficient source of funds with a reasonable cost of capital and appropriate

financial structure will support the company’s competitiveness. Since the economic crisis, the company’s

financial structure has been continuously strengthening resulting in improving in net debt to equity ratio. In

2008 the net debt to equity ratio was 0.57 to 1 times with cash balance of Baht 932 million. With a strong

balance sheet and a lower debt level, high level of cash on hands, no foreign currency debts, broader

lending sources, and A- TRIS company rating, these will provide the company more flexibility to grow the

business expansion, yet to minimize the financial risks.

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Annual Report2008

Risk from Automotive and Petrochemical Customers

The company has 179 customers from automotive (131) and petrochemical (48) sectors out of 394

customers, or 45% 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. The company 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 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.

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 2008, Gheco-One has obtained Environmental Impact Assessment (EIA)

approval from Office of National Environmental Policy (ONEP), 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

end of 2011. In addition, Gheco-One signed the foreign exchange rate swap, interest swap, and various

contracts on matching currency of lending with costs and revenue streams and interest rate swaps in order

to minimize those risks.

��


Annual Report 2008

j Board of Directors

As of December 31, 2008, 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 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/Good

Corporate Governance Committee

7. Mr. Vivat Jiratikarnsakul Director/Executive Director

8. Ms. Pattama Horrungruang Director/Executive Director/Good Corporate

Governance Committee

9. Mr. Somphong Wanapha Independent Director/Chairman of the Good

Corporate Governance Committee

10. Mr. Vikit Horrungruang** Director

With Mr. Sirisak Kijraksa as Company Secretary

Note: *Mr.Chavalit Sethameteekul has been appointed to be the Board of Directors on April 29,

2008

**Mr. Vikit Horrungruang has been appointed to be the Board of Directors to replace the

resigned Director on June 6, 2008

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 one 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.

Management Structure

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Annual Report2008

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 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.

j Executive Committee

As of December 31, 2008, 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

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Annual Report 2008

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.

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.

j Audit Committee

As of December 31, 2008, Audit Committee consists of 3 members as follows:

1. Mr. Sudhipan Charumani Audit Committee Chairman

2. Mr. Peter John Edmondson Audit Committee Member

3. Mrs. Punnee Worawuthichongsathit Audit Committee Member

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

the Company’s Board of Directors:

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

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

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Annual Report2008

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

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. j Corporate Governance Committee

As of December 31, 2008, the Good Corporate Governance Committee consists of 3 members as follows:

1. Mr. Somphong Wanapha Good Corporate Governance Chairman

2. Mrs. Punnee Worawuthichongsathit Good Corporate Governance Member

3. Ms. Pattama Horrungruang Good Corporate Governance Member

The 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 to the

Board of Directors for consideration. The Corporate Governance Committee has 3 years period and may be

re-elected to assume the same position.

j Nomination and Remuneration Committee

As of December 31, 2008, 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

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Annual Report 2008

1. Mr. David Richard Nardone President & Chief Executive Officer 2. Mr. Vivat Jiratikarnsakul Executive Vice President 3. Ms. Pattama Horrungruang Senior Vice President & Chief Financial Officer 4. Mr. Sunthorn Kongsunthornkitkul Vice President - Industrial Estate Operations 5. Mr. Tanin Subboonrueng Director - Industrial Estate Development 6. Mr. Sirisak Kijraksa Director - Accounting and Legal 7. Ms. Somjai Wachiraha Director - Finance 8. Mr. Niphone Harnpatanapanich Director - Residential Project Planning 9. Mr. Khamhoung Ratsamany Director - Water & Small Power Project Planning 10. Mr. Paopitaya Smutrakalin Director - Corporate Planning and Investor Relations 11. Ms. Jinnapat Tongviseskul Director - Residential Customer Development 12. Ms. Ladda Rojanavilaivudh Director - Industrial Customer Development 13. Ms. Anchalee Parsertchand Director - Industrial Customer Development 14. Ms. Chantana Hinkaew Director - Corporate Marketing 15. Mr. Preeprem Malasitt Director - IE Training Center and New Projects 16. Ms. Prattana Kijjanon * Director - Procurement 17. Mr. Apichat Trongsukson Assistant Director - Information System & Services

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 Board of Directors has appointed the Nomination Committee to be the Nomination and

Remuneration Committee since May 2009 to 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.

j Company Management The Company Management consists of

Note : *Being appointed on August 18, 2008

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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Annual Report2008

j Remuneration for Directors and Management 1. Total remuneration for the 11 Directors in 2008 was Baht 16,922,037 (Baht 16,675,000 in 2007), being Board and Committee Meeting Fees and being Compensations, as per following individual details:

Name Position Directors’ Remuneration (Baht) Meeting Fees Compensations Total

1. Mr. Sawasdi Horrungruang* Chairman of Board of Directors 210,000 1,085,166 1,295,166 / Chairman of Executive and Nomination Committee 2. Mr. Chavalit Sethameteekul** Chairman of Board of Directors 235,000 956,045 1,191,045 / Nomination and Remuneration Committee 3. Mr. Thongchai Director / Chairman of Executive 250,000 1,934,891 2,184,891 Srisomburananonta*** Committee / Nomination and Remuneration Committee 4. Mr. Sudhipan Independent Director/Chairman of 445,000 1,000,000 1,445,000 Charumani Audit Committee/ Chairman of Nomination and Remuneration Committee 5. Mr. David Richard Director/ Member of Executive 245,000 1,750,000 1,995,000 Nardone Committee 6. Mr. Peter John Independent Director/ Audit Committee 260,000 1,000,000 1,260,000 Edmondson 7. Mrs. Punnee Independent Director/ Audit 445,000 1,000,000 1,445,000 Worawuthichongsathit Committee and GCG Committee 8. Mr. Vivat Jiratikarnsakul Director/ Executive Committee 245,000 1,750,000 1,995,000 9. Ms. Pattama Horrungruang Director/ Executive Committee 325,000 1,750,000 2,075,000 and GCG Committee 10. Mr. Somphong Wanapha Director/ Chairman 365,000 1,000,000 1,365,000 of GCG Committee 11. Mr. Vikit Horrungruang**** Director 105,000 565,935 670,935 Total 3,130,000 13,792,037 16,922,037

* Mr. Sawasdi Horrungruang resigned from the Board of Directors on June 6, 2008

** Mr. Chavalit Sethameteekul has been appointed to be the Board of Directors on April 29, 2008 and to be the Chairman of the

Board of Directors and Nomination and Remuneration Director on June 6, 2009

*** Mr. Thongchai Srisomburananonta has been appointed to be the Chairman of Executive Committee on June 6, 2009

**** Mr. Vikit Horrungruang has been appointed to be the Board of Directors on June 6, 2009

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

provident fund contributions for 20 persons in 2008 was Baht 135,039,250.

Necessity and Soundness of Connected Transactions

The connected transactions between the Company and its subsidiary companies, affiliated companies,

related companies and/or the third party are the normal course of business which will be considered based

on the market prevailing rate and will be approved by the Board of Executive Directors or Board of

Directors, on a case by case basis. In addition, the transactions will be reviewed by the Audit Committee in

compliance with the rules stated by the Stock Exchange of Thailand (SET), Securities and Exchange

Commission (SEC), as well as Thai Accounting Standards in relation to information disclosure and practices

of listed companies in connected transactions, announced by the Federation of Accounting Profession.

��


Annual Report 2008

Audit Committee’s Opinion in relation with Connected Transactions

By having considered and reviewed the disclosure of related-party transactions among the Company

and its group with the Company’s internal auditor and the Management, the Committee convinced that the

disclosure of the connected transactions was adequate, correct and in compliance with related laws and

the regulations of SET, SEC, the Company’s objective, and Thai Accounting Standards in relation to

information disclosure and practices of listed companies in connected transactions, announced by the

Federation of Accounting Profession.

Approval Measures or Procedures of Connected Transactions

All future connected transactions will be considered and approved by the Management, Board of

Executive Directors, Board of Directors, or Shareholders’ Meeting, whichever the case maybe, and will be

conducted as part of the normal course of business according to the Company’s rules and regulations.

Meanwhile, prices and other conditions shall be as if the transaction is made with the third party where

directors or staff with an interest in such transaction must not participate in the approval process. The

transactions will be audited and reviewed by external auditor, internal auditor, and the Audit Committee of

the Company. The Company shall disclose the transaction details in compliance with related laws and the

regulations of SET, SEC, the Company’s objective, and Thai Accounting Standards in relation to information

disclosure and practices of listed companies in connected transactions, announced by the Federation of

Accounting Profession.

In compliance with Securities and Exchange Act (Amended) effective in 2008, the Company has added

the rules in relation with the connected transactions which are the normal course of business as follows:

1. For any future connected transaction between the Company and its subsidiary companies,

affiliated companies, related companies, directors, management, and/or the third party which is a

normal course of business, the Management can approve the said transaction by having the terms

and conditions the same as part of the normal course of business in the same manner as the

Company will conduct with the third party without having any influence from directors,

management, or related persons.

2. The Company shall summarize the list of connected transactions which has the size larger than

3% of Net Tangible Asset and shall present to the Board of Directors every quarter.

�0


Annual Report2008

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Annual Report 2008C

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��


Annual Report2008

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:-

j 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.

j 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.

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Annual Report 2008

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

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.

j 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

Provide equitable and appropriate compensation to the employee and 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. , emphasize on development of

knowledge, ability and skill of employee by promotion them to attend the training, seminar both within and

outside the company to enhance their skill, expertise and ability to efficiently perform their duties.

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.

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Annual Report2008

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

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 02-719-9546-47

1.3 E-mail : [email protected]

2. Direct E-mail the Chairman of the Audit Committee

E-mail : [email protected]

j 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.

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Annual Report 2008

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.

j 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 independent.

- Directors who are not Management

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.

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 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.

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Annual Report2008

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.

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;

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;

��


Annual Report 2008

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 importance 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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Annual Report2008

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 2008, the Company held 7 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.

��


Annual Report 2008

Note: * Being appointed to be the Board of Directors on April 29, 2008 and being appointed to be the

Chairman of the Board of Directors, Nomination and Remuneration Committee on June 6, 2008

** Being appointed to be the Board of Directors to replace the resigned Director on June 6, 2008

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.

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.

Name of Director Board of Audit Committee Nomination and Good Corporate Directors Remuneration Governance Committee Committee

Mr. Chavalit Sethameteekul* 5/7 - 1/1 -

Mr. Thongchai Srisomburananonta 6/7 - 2/2 -

Mr. David Richard Nardone 7/7 - - -

Mr. Sudhipan Charumani 7/7 4/4 2/2 -

Mr. Peter John Edmondson 4/7 4/4 - -

Mrs. Punnee Worawuthichongsathit 7/7 4/4 - 4/4

Mr. Vivat Jiratikarnsakul 7/7 - - -

Ms. Pattama Horrungruang 7/7 - - 4/4

Mr. Somphong Wanapha 7/7 - - 4/4

Mr. Vikit Horrungruang** 3/4 - - -

40


Annual Report2008

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 2008 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

2008 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

2008 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.Chavalit Sethameteekul)

Chairman of the Board of Directors

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

(Mr.David Richard Nardone)

President & CEO

41


Annual Report 2008

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 2008 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 President & CEO upon

requests. Moreover, the Audit Committee also arranged time to meet with the internal and external auditors without

executives of the Company being present.

The activities of the Audit Committee covered the following areas:

1) Review of the interim and annual financial statements of 2008 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.

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 that it is effective and independent. 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.

Audit Committee Report

42


Annual Report2008

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 of 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.

6) Considering the appointment of external auditors and their remuneration for the year 2009, 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 the present external audit firm, A.M.T. & Associates, on all counts. The Audit Committee thus

recommended appointing Mrs. Natsarak Sarochanunjeen (Certified Public Accountant registration number

4563), the 2008 external auditor, or Professor Kesree Narongdej (Certified Public Accountant registration

number 76) of A.M.T. & Associates to serve as the Company’s external auditor for the financial year ended

31 December 2009 at the same remuneration of Bath 1,130,000 as in 2008.

The Audit Committee further agreed to recommend the appointment of Mrs. Natsarak Sarochanunjeen or Professor

Kesree Narongdej or Mr.Chaiyuth Angsuwithaya (Certified Public Accountant registration number 3885) or Mr.

Somchai Kanjanawongpaisarn (Certified Public Accountant registration number 3428), each being attached to

A.M.T. & Associates, to serve as the external auditor of the Company’s subsidiaries for the 2009 financial year at a

remuneration of Baht 2,700,000, as opposed to Baht 2,480,000+ Baht 120,000 (on a new subsidiary) in 2008.

The 2009 increment of Baht 100,000 represents a full-year fee addition on the new subsidiary company.

The present and proposed external auditors had 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 correctly disclosed financial and operational information, had

appropriate and effective internal control and audit and risk management, complied with laws, regulations and

obligations, and disclosed connected transactions correctly. Moreover, the Company followed Good Corporate

Governance principles with adequacy, transparency and reliability, obtaining a “very good” CG scoring from the

2008 survey results, as indicated in the National CG Committee’s Corporate Governance Report on Thai Listed

Companies 2008.

Sudhipan CharumaniChairman of the Audit Committee

14th March 2009

43


Annual Report 2008

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, 2008 and 2007, 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.

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.

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, 2008 and 2007, the results of their operations,

and cash flows for the years then ended in conformity with generally accepted accounting principles.

INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS’ REPORT

(NATSARAK SAROCHANUNJEEN)

C.P.A (THAILAND)

Registration No. 4563

A.M.T. & ASSOCIATES

Bangkok, Thailand

February 27, 2009

44


Annual Report2008

CURRENT ASSETS

Cash and cash equivalents 6 931,687,150.06 574,523,599.97 415,108,255.26 288,663,892.18

Temporary investments -

marketable securities, net 373,145.70 1,700,432.90 373,145.70 1,700,432.90

Trade account receivables

Related parties, net 7 3,439,229.67 2,044,937.25 13,774,159.51 4,098,122.54

Other parties, net 7 133,273,867.96 159,676,762.25 5,389,105.90 24,434,805.45

Unbilled completed work 7 1,096,127,916.22 3,793,106,100.30 878,770,811.03 3,013,341,436.92

Short - term loans and advance

to related parties 5 - 15,092,491.00 318,299,331.75 518,071,710.11

Inventory 11,760,000.00 13,440,000.00 11,760,000.00 13,440,000.00

Cost of real estate developments, net 9, 30 and 31 5,930,412,764.03 6,010,082,614.92 1,723,431,903.75 1,538,827,695.73

Other current assets

Receivable from sales of investment - 20,092,203.04 - 20,092,203.04

in associate

Revenue department receivable 34,082,554.44 7,467,135.34 - 94,086.01

Others 30,409,817.45 13,981,583.66 16,029,121.53 5,946,439.17

Total Current Assets 8,171,566,445.53 10,611,207,860.63 3,382,935,834.43 5,428,710,824.05

NON - CURRENT ASSETS

Deposit at financial institution

with commitment 6 and 30 2,059,901,000.00 - 2,059,901,000.00 -

Investments in subsidiaries 5, 10 and 30 - - 3,172,095,185.50 2,666,595,178.50

Investments in associates 2, 5, 10, 30 and 31 424,844,687.27 318,857,313.58 373,149,970.00 294,749,970.00

Other long - term investments

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

Other parties, net 11, 30 and 31 142,783,002.50 142,783,002.50 142,500,002.50 142,500,002.50

Assets for rent, net 12 and 30 2,041,393,509.47 1,975,306,705.08 94,913,361.33 71,588,495.21

Property, plant and equipment, net 13 and 30 383,552,587.67 359,979,562.97 108,402,629.04 118,865,306.60

Other non - current assets

Leasehold land and land held

for commercial purposes, net 14 and 30 314,936,500.00 326,136,500.00 314,936,500.00 326,136,500.00

Sinking fund, net 15 and 31 80,657,572.33 70,629,550.24 22,744,797.82 24,275,335.74

Deposit for land purchase 31 - 32,829,875.00 - 32,829,875.00

Advance for provincial electricity

authority - 3,091,926.04 - -

Advance payment for right 31 78,422,355.20 40,367,551.44 78,422,355.20 40,367,551.44

Others 12,777,715.89 13,891,120.11 3,079,107.04 4,282,740.19

Total Non - Current Assets 5,540,768,930.33 3,285,373,106.96 6,370,144,908.43 3,722,190,955.18

TOTAL ASSETS 13,712,335,375.86 13,896,580,967.59 9,753,080,742.86 9,150,901,779.23

BAHT

CONSOLIDATED FINANCIAL SEPARATE FINANCIAL

STATEMENTS STATEMENTS

ASSETS NOTE 2008 2007 2008 2007

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

AS AT DECEMBER 31, 2008 AND 2007

BALANCE SHEETS

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

45


Annual Report 2008



BALANCE SHEETS (CONTINUED)

BAHT



LIABILITIES AND SHAREHOLDERS EQUITY NOTE 2008 2007 2008 2007


CURRENT LIABILITIES

Short-term loans from financial institutions 16 1,135,000,000.00 360,000,000.00 1,135,000,000.00 360,000,000.00

Trade account payables

Related parties 3,214,198.02 2,359,803.00 1,601,336.32 9,180,182.60

Other parties 324,094,734.68 254,330,125.96 38,636,444.15 61,028,846.07

Current portion of long - term loans 18 338,840,336.05 1,950,309,653.56 50,000,000.00 1,624,389,595.86

Current portion of long - term loans

by scheduled transfer 18 127,248,706.25 475,650,952.75 - -

Short - term loans and advance

from related parties 5 40,000,000.00 79,904,000.00 791,043,299.32 62,322,215.22

Other current liabilities

Unearned income and

income received in advance 8 1,026,433,466.02 245,416,077.94 41,340,342.66 25,695,423.29

Accrued interest expenses 19,485,905.16 6,030,914.41 19,158,767.08 4,761,613.05

Accrued expenses 70,478,254.94 40,416,464.81 53,493,707.42 19,448,070.35

Other account payables 8,020,309.51 21,438,638.40 135,554.95 1,075,716.52

Accrued income tax 27 284,559,588.47 359,837,412.55 248,172,689.92 297,368,693.10

Withholding tax payable 50,994,493.31 24,879,448.27 43,489,403.03 15,429,301.15

Accrued specific business

tax and transfer fee 1.3 344,768.73 276,915,585.03 1,326,513.32 188,713,620.87

Dividend payable 22 7,918,739.08 284,359,629.93 7,918,718.79 284,359,602.03

Others 47,462,576.35 35,867,021.66 20,359,393.43 8,972,495.54

Total Current Liabilities 3,484,096,076.57 4,417,715,728.27 2,451,676,170.39 2,962,745,375.65

NON - CURRENT LIABILITIES

Long - term loans and advance

from related party 5 and 17 - - 1,113,099,456.01 1,100,492,996.21

Other long - term loans, net 18 1,852,938,254.68 1,584,565,172.31 900,000,000.00 -

Other non - current liabilities

Retention payables 121,957,853.99 171,782,956.78 70,016,521.44 90,731,508.78

Guarantee received 99,902,309.54 89,045,738.26 5,693,737.90 4,634,100.00

Deferred leasehold right income

Related party, net 5 - - 60,847,791.80 -

Other parties, net 7,187,076.27 8,559,584.31 - -

Others 8,646,273.78 6,904,823.29 4,840,404.21 5,101,420.92

Total Non - Current Liabilities 2,090,631,768.26 1,860,858,274.95 2,154,497,911.36 1,200,960,025.91

Total Liabilities 5,574,727,844.83 6,278,574,003.22 4,606,174,081.75 4,163,705,401.56

46


Annual Report2008

SHAREHOLDERS’ EQUITY

Share capital - Baht 0.40 par value

Authorized share capital

Common stocks 15,000,000,000

shares 19 and 20 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 9,381,841,029 19 and 20 3,752,736,411.60 3,741,684,198.40 3,752,736,411.60 3,741,684,198.40

shares for the year 2008 and

9,354,210,496 shares

for the year 2007

Warrants 21 927,637.64 1,005,898.58 927,637.64 1,005,898.58

Premium (discount) on common stocks, net 20 475,608,366.36 478,762,877.78 475,608,366.36 478,762,877.78

Unrealized gain (loss) from changes

in carrying amount of available-

for-sale securities 94,558.36 (31,738,154.44) 94,558.36 (31,738,154.44)

Translation of financial statements differences (28,991,779.31) (28,663,381.84) - -

Retained earnings

Appropriated - legal reserve 22 467,851,405.48 422,722,610.39 348,743,645.21 307,571,646.27

Unappropriated 3,086,271,483.08 2,492,758,503.82 568,796,041.94 2,165,184,969.11

Less : Cumulative effect of the 1.2 - - - (1,675,275,058.03)

change in accounting policy

Total Equity of Parent

Company’s Shareholders 7,754,498,083.21 7,076,532,552.69 5,146,906,661.11 4,987,196,377.67

Minority interest 383,109,447.82 541,474,411.68 - -

Total Shareholders’ Equity 8,137,607,531.03 7,618,006,964.37 5,146,906,661.11 4,987,196,377.67

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 13,712,335,375.86 13,896,580,967.59 9,753,080,742.86 9,150,901,779.23

BAHT



NOTE 2008 2007 2008 2007



BALANCE SHEETS (CONTINUED)


47


Annual Report 2008


FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007

STATEMENTS OF INCOME

BAHT



NOTE 2008 2007 2008 2007


REVENUES

Sales of land 2,847,735,037.85 2,157,681,530.63 9,779,258.16 148,966,118.04

Sales of pre-fabricated factory 235,544,864.33 122,062,087.20 - -

Sales of condominium 146,294,588.36 1,821,177,934.37 146,294,588.36 1,821,177,934.37

Services income 5 1,262,353,860.48 1,051,380,639.99 131,966,051.13 141,236,228.91

Other income

Adjustment of accrual for transfer 1.3 248,230,298.22 - 166,726,760.20 -

fee and specific business tax

Income from increase of salable area 23 76,667,807.84 - 76,667,807.84 -

Interest income 5 46,558,419.42 11,505,002.58 53,441,456.93 72,332,550.92

Management income 5 24,491,748.25 13,835,652.31 56,451,665.04 40,514,866.58

Commission income 5 - 49,678.09 82,313,577.59 759,365.12

Dividend income 10 46,151,176.28 601,003.50 1,019,860,459.99 246,683,070.67

Gain from sales of

investments in subsidiary 5 and 10 - - 1,124,998.95 -

Gain on exchange rate - - - 52,686,647.39

Reversal of impairment on asset - 25,181,324.26 - 25,181,324.26

Others 48,485,658.63 34,687,964.41 10,315,897.03 8,949,785.62

Total Revenues 4,982,513,459.66 5,238,162,817.34 1,754,942,521.22 2,558,487,891.88

EXPENSES

Cost of land sales 1,611,439,703.38 1,216,826,292.54 5,829,511.85 119,958,933.42

Cost of pre-fabricated factory sales 158,112,098.31 90,466,295.81 - -

Cost of condominium sales 251,726,411.10 1,078,807,895.20 252,037,103.51 1,078,807,895.20

Cost of services 5 645,157,478.29 623,024,022.35 95,236,445.75 96,481,678.86

Selling and administrative expenses 5 500,667,089.46 590,427,607.31 294,917,133.10 291,127,082.93

Director remuneration 24 29,312,037.00 25,425,000.00 16,922,037.00 16,675,000.00

Other expenses

Share option cancellation expenses 40,000,000.00 - 40,000,000.00 -

Written-off deposit for land purchase 31 32,829,875.00 - 32,829,875.00 -

Loss from sales of investments

in other companies 31,840,000.00 8,744,993.66 16,840,000.00 13,423,248.04

Provision for loss on diminution in value of

leasehold land and land held for

commercial purposes 14 11,200,000.00 - 11,200,000.00 -

Loss on exchange rate 59,095.25 2,393.07 27,272,674.01 -

Total Expenses 3,312,343,787.79 3,633,724,499.94 793,084,780.22 1,616,473,838.45

48


Annual Report2008

BAHT



NOTE 2008 2007 2008 2007


FOR THE YEARS ENDS DECEMBER 31, 2008 AND 2007

STATEMENTS OF INCOME (CONTINUED)


PROFIT BEFORE FINANCE COSTS AND

INCOME TAX EXPENSES 1,670,169,671.87 1,604,438,317.40 961,857,741.00 942,014,053.43

FINANCE COSTS 5 (136,958,468.93) (71,747,742.83) (138,417,762.25) (54,126,682.80)

SHARE OF PROFITS (LOSS) FROM

INVESTMENTS FOR USING THE

EQUITY METHOD - ASSOCIATES 2 and 10 28,587,363.69 (579,715.14) - -

PROFIT BEFORE INCOME TAX EXPENSES 1,561,798,566.63 1,532,110,859.43 823,439,978.75 887,887,370.63

INCOME TAX EXPENSES 27 (98,139,254.60) (282,395,420.22) - (168,974,741.30)

NET PROFIT 1,463,659,312.03 1,249,715,439.21 823,439,978.75 718,912,629.33

Profit attributable to:

Equity holders of the parent 1,342,023,623.30 1,163,640,401.48 823,439,978.75 718,912,629.33

Minority interests 121,635,688.73 86,075,037.73 - -

1,463,659,312.03 1,249,715,439.21 823,439,978.75 718,912,629.33

BASIC EARNINGS PER SHARE 28

Net profit attributable to equity

holders of the parent 0.14 0.13 0.09 0.08

Weighted average number of

ordinary shares (shares) 9,373,466,783 9,180,778,313 9,373,466,783 9,180,778,313

DILUTED EARNINGS PER SHARE 28

Net profit attributable to equity

holders of the parent 0.14 0.12 0.09 0.08

Weighted average number of

ordinary shares (shares) 9,615,635,613 9,446,760,281 9,615,635,613 9,446,760,281

49


Annual Report 2008

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198.

40

1,00

5,89

8.58

47

8,76

2,87

7.78

(3

1,73

8,15

4.44

) 30

7,57

1,64

6.27

2,

165,

184,

969.

11

(1,6

75,2

75,0

58.0

3)

4,98

7,19

6,37

7.67

HE

MA

RA

J L

AN

D A

ND

DE

VE

LOP

ME

NT

PU

BLI

C C

OM

PAN

Y L

IMIT

ED

AN

D I

TS S

UB

SID

IAR

IES

FO

R T

HE

YE

AR

S E

ND

S D

EC

EM

BE

R 3

1, 2

008

AN

D 2

007

STA

TEM

ENTS

OF

CH

AN

GES

IN

SH

AR

EHO

LDER

S’ E

QU

ITY

SEPA

RA

TE F

INA

NC

IAL

STA

TEM

ENTS

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.

50


Annual Report2008

BA

HT

E

qui

ty o

f P

aren

t

C

om

pan

ny’s

Sha

reho

lder

s

U

nrea

lized

g

ain

(loss

) fro

m

ch

ang

es in

Tr

ansl

atio

n o

f

To

tal

Issu

ed a

nd

P

rem

ium

(dis

coun

t) c

arry

ing

amou

nt o

f Fi

nanc

ial

Ret

aine

d e

arni

ngs

E

qui

ty o

f p

aren

t

pai

d-u

p

o

n co

mm

on

av

aila

ble

-fo

r-sa

le

stat

emen

ts

Ap

pro

pri

ated

C

om

pan

y’s

min

ori

ty

N

OT

E

shar

e ca

pit

al

War

rant

s st

ock

s, n

et

secu

riti

es

diff

eren

ces

leg

al r

eser

ve

U

nap

pro

pri

ated

S

hare

hold

ers

inte

rest

To

tal

Beg

inni

ng b

alan

ce a

s of

Jan

uary

1, 2

008

3,74

1,68

4,19

8.40

1,

005,

898.

58

478,

762,

877.

78

(31,

738,

154.

44)

(28,

663,

381.

84)

422,

722,

610.

39

2,49

2,75

8,50

3.82

7,

076,

532,

552.

69

541,

474,

411.

68

7,61

8,00

6,96

4.37

Unr

ealiz

ed lo

ss fr

om c

hang

es in

car

ryin

g

am

ount

of

avai

labl

e-fo

r-sa

le s

ecur

ities

-

-

-

31,8

32,7

12.8

0

-

-

-

31,8

32,7

12.8

0

-

31,8

32,7

12.8

0

Tran

slat

ion

of fi

nanc

ial s

tate

men

ts d

iffer

ence

s

-

-

-

-

(3

28,3

97.4

7)

-

-

(328

,397

.47)

-

(3

28,3

97.4

7)

Net

loss

not

reco

gniz

ed in

the

stat

emen

ts

of

inco

me

-

-

-

31,8

32,7

12.8

0

(328

,397

.47)

-

-

31

,504

,315

.33

-

31

,504

,315

.33

Net

pro

fit

-

-

-

-

-

-

1,

342,

023,

623.

30

1,34

2,02

3,62

3.30

12

1,63

5,68

8.73

1,

463,

659,

312.

03

App

ropr

iate

d -

lega

l res

erve

22

-

-

-

-

-

45

,128

,795

.09

(4

5,12

8,79

5.09

) -

-

-

Div

iden

d pa

id

22

-

-

-

-

-

-

(7

03,3

81,8

48.9

5)

(703

,381

,848

.95)

-

(7

03,3

81,8

48.9

5)

Incr

ease

in m

inor

ity

-

-

-

-

-

-

-

-

63

.00

63

.00

Div

iden

d fr

om s

ubsi

diar

ies

paid

to m

inor

ity

-

-

-

-

-

-

-

-

(2

80,0

00,7

15.5

9)

(280

,000

,715

.59)

Exe

rcis

e of

war

rant

21

11

,052

,213

.20

(7

8,26

0.94

) (3

,154

,511

.42)

-

-

-

-

7,

819,

440.

84

-

7,81

9,44

0.84

End

ing

bala

nce

as o

f Dec

embe

r 31

, 200

8

3,

752,

736,

411.

60

927,

637.

64

475,

608,

366.

36

94,5

58.3

6

(28,

991,

779.

31)

467,

851,

405.

48

3,08

6,27

1,48

3.08

7,

754,

498,

083.

21

383,

109,

447.

82

8,13

7,60

7,53

1.03

Beg

inni

ng b

alan

ce a

s of

Jan

uary

1, 2

007

9,03

6,92

7,49

5.00

1,

904,

573.

51

(4,9

07,1

70,1

83.0

3)

(33,

382,

780.

88)

(27,

893,

720.

65)

386,

776,

978.

92

2,01

2,20

2,53

5.49

6,

469,

364,

898.

36

615,

495,

614.

25

7,08

4,86

0,51

2.61

Unr

ealiz

ed lo

ss fr

om c

hang

es in

car

ryin

g

am

ount

of

avai

labl

e-fo

r-sa

le s

ecur

ities

-

-

-

1,64

4,62

6.44

-

-

-

1,64

4,62

6.44

-

1,

644,

626.

44

Cur

renc

y tr

ansl

atio

n di

ffere

nces

-

-

-

-

(769

,661

.19)

-

-

(7

69,6

61.1

9)

-

(769

,661

.19)

Net

loss

not

reco

gniz

ed in

the

stat

emen

ts

of

inco

me

-

-

-

1,64

4,62

6.44

(7

69,6

61.1

9)

-

-

874,

965.

25

-

87

4,96

5.25

Net

pro

fit

-

-

-

-

-

-

1,

163,

640,

401.

48

1,16

3,64

0,40

1.48

86

,075

,037

.73

1,

249,

715,

439.

21

App

ropr

iate

d -

lega

l res

erve

22

-

-

-

-

-

35

,945

,631

.47

(3

5,94

5,63

1.47

) -

-

-

Div

iden

d pa

id

22

-

-

-

-

-

-

(647

,138

,801

.68)

(6

47,1

38,8

01.6

8)

-

(647

,138

,801

.68)

Incr

ease

in m

inor

ity

-

-

-

-

-

-

-

-

12

2.50

12

2.50

Div

iden

d fr

om s

ubsi

diar

ies

paid

to m

inor

ity

-

-

-

-

-

-

-

-

(1

60,0

96,3

62.8

0)

(160

,096

,362

.80)

Cap

ital d

ecre

ase

durin

g th

e ye

ar

19 a

nd 2

0 (5

,588

,265

,057

.60)

-

5,

588,

265,

057.

60

-

-

-

-

-

-

-

Exe

rcis

e of

war

rant

s

21

293,

021,

761.

00

(898

,674

.93)

(2

02,3

31,9

96.7

9)

-

-

-

-

89,7

91,0

89.2

8

-

89,7

91,0

89.2

8

End

ing

bala

nce

as o

f Dec

embe

r 31

, 200

7

3,

741,

684,

198.

40

1,00

5,89

8.58

47

8,76

2,87

7.78

(3

1,73

8,15

4.44

) (2

8,66

3,38

1.84

) 42

2,72

2,61

0.39

2,

492,

758,

503.

82

7,07

6,53

2,55

2.69

54

1,47

4,41

1.68

7,

618,

006,

964.

37

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.

HE

MA

RA

J L

AN

D A

ND

DE

VE

LOP

ME

NT

PU

BLI

C C

OM

PAN

Y L

IMIT

ED

AN

D I

TS S

UB

SID

IAR

IES

FO

R T

HE

YE

AR

S E

ND

S D

EC

EM

BE

R 3

1, 2

008

AN

D 2

007

STA

TEM

ENTS

OF

CH

AN

GES

IN

SH

AR

EHO

LDER

S’ E

QU

ITY

CO

NSO

LID

ATE

D F

INA

NC

IAL

STA

TEM

ENTS

51


Annual Report 2008



STATEMENTS OF CASH FLOWS

BAHT



NOTE 2008 2007 2008 2007

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit 1,463,659,312.03 1,249,715,439.21 823,439,978.75 718,912,629.33

Adjustments to reconcile net profit to

net cash provided by (used in)

Allowance for doubtful accounts 873,263.23 1,010,564.13 324,524.59 568,292.05

Share of (profits) losses from investments

for using the equity method

- associates 2 and 10 (28,587,363.69) 579,715.14 - -

Adjustment of accrual for transfer fee

and specific business tax 1.3 (248,230,298.22) - (166,726,760.20) -

Income from increase of salable area 23 (76,667,807.84) - (76,667,807.84) -

Provision (reversal) of impairment

on assets 14 11,200,000.00 (25,181,324.26) 11,200,000.00 (25,181,324.26)

Loss (gain) on exchange rate - - 26,280,259.80 (52,689,040.46)

Loss (gain) from sales of equipment (159,394.64) (687,843.60) (93,040.50) (164,484.98)

Donation of equipment 3,130,012.50 - - -

Gain from sales of investments in

subsidiary 5 and 10 - - (1,124,998.95) -

Loss from sales of investments in

other companies 31,840,000.00 8,744,993.66 16,840,000.00 13,423,248.04

Depreciation of assets 12 and 13 151,261,750.36 114,082,042.37 22,149,038.99 16,536,231.40

Amortization of sinking fund 15 4,538,071.32 3,983,477.23 1,530,537.92 1,587,993.23

Provision for maintenance (1,842,288.86) 19,650,148.10 2,931,114.79 -

Dividend income 10 (46,151,176.28) (601,003.50) (1,019,860,459.99) (246,683,070.67)

Written-off deposit for land purchase 31 32,829,875.00 - 32,829,875.00 -

Realization of deferred leasehold right

income - related party 5 - - (1,252,208.20) -

Realization of deferred leasehold right

income - others (1,372,508.04) (1,372,508.10) - -

Finance costs 5 136,958,468.93 71,747,742.83 138,417,762.25 54,126,682.80

Income tax expenses 27 98,139,254.60 282,395,420.22 - 168,974,741.30

1,531,419,170.40 1,724,066,863.43 (189,782,183.59) 649,411,897.78

Decrease (increase) in operating assets :

Account receivables - related parties (1,394,292.42) (173.56) (9,676,036.97) (1,027,200.00)

Account receivables - other parties 25,529,631.06 (70,896,110.89) 18,721,174.96 (16,796,941.56)

Unbilled completed work 2,696,978,184.08 (2,056,690,183.82) 2,134,570,625.89 (1,527,852,870.60)

Inventory 1,680,000.00 (13,440,000.00) 1,680,000.00 (13,440,000.00)

Cost of real estate developments 143,539,830.66 29,893,882.22 (126,652,140.24) 66,727,385.68

Other current assets (37,838,600.14) (1,416,357.98) (9,988,596.35) (1,244,601.22)

Deposit for land purchase - 128,500,000.00 - 128,500,000.00

Other non - current assets (34,866,850.26) (28,433,435.96) (36,851,170.61) (43,895,107.36)


52


Annual Report2008



STATEMENTS OF CASH FLOWS (CONTINUED)

Increase (decrease) in operating liabilities :

Trade account payables - related parties 854,395.02 582,576.87 (7,578,846.28) 8,970,372.72

Trade account payables - other parties 69,764,608.72 (73,696,747.89) (22,392,401.92) (54,885,766.16)

Unearned income and income

received in advance 781,017,388.08 106,175,051.93 15,644,919.37 11,784,491.15

Accrued expenses 30,061,790.13 14,025,559.09 34,045,637.07 6,440,708.06

Other account payables (25,767,875.93) 6,689,180.00 (940,161.57) 4,885,910.47

Accrued specific business tax and transfer fee (28,340,518.08) 143,133,164.46 (20,660,347.35) 80,160,444.11

Other current liabilities 39,552,888.59 (18,074,019.72) 36,515,884.98 (6,087,370.14)

Retention payables (38,675,555.75) 62,250,168.66 (20,714,987.34) 29,128,782.85

Guarantee payable 12,056,571.28 22,841,490.76 1,059,637.90 (471,000.00)

Deferred leasehold right income - - 62,100,000.00 -

Other non - current liabilities 1,741,450.49 (652,560.33) (261,016.71) 212,416.44

Cash Provided by (Used in) Operating Activities 5,167,312,215.93 (25,141,652.73) 1,858,839,991.24 (679,478,447.78)

Cash paid for finance costs (237,530,395.22) (244,640,123.80) (122,095,880.58) (112,836,034.36)

Cash paid for corporate income tax (177,604,754.67) (122,140,641.25) (49,196,003.18) (34,292,578.64)

Net Cash Provided by (Used in) Operating Activities 4,752,177,066.04 (391,922,417.78) 1,687,548,107.48 (826,607,060.78)

BAHT



NOTE 2008 2007 2008 2007


53


Annual Report 2008

CASH FLOWS FROM INVESTING ACTIVITIES

Cash received from sales of the

investments in securities 1,320,000.00 1,483,320.00 1,320,000.00 1,483,320.00

(Increase) decrease in short - term loans

and advance to related parties 15,092,491.00 (3,953,069.51) 261,346,325.07 986,423,081.51

Increase in investments in subsidiaries - - (580,499,937.00) (1,276,749,877.50)

Increase in investments in associate (78,400,000.00) (76,055,970.00) (78,400,000.00) (76,055,970.00)

Cash received from sales of investment

in subsudiary - - 76,124,928.95 -


in associate 20,092,203.04 - 20,092,203.04 -


in other company - - 15,000,000.00 -

Dividend received from subsidiaries - - 912,185,340.02 631,787,665.10

Dividend received from associate 999,990.00 64,535,851.92 999,990.00 64,535,851.92

Dividend received from other companies 46,151,176.28 604,010.50 45,101,183.26 79,014.00

Increase in deposit at financial institution

with commitment 30 (2,059,901,000.00) - (2,059,901,000.00) -

Cash received from sales of building

and equipment 163,813.08 687,848.60 97,457.94 164,485.98

Increase in building and equipment (73,158,645.14) (93,174,398.89) (8,578,792.23) (73,836,372.01)

Increase in assets for rent (44,072,620.14) (829,024,245.01) (766,916.00) (12,369,311.50)

Increase in sinking fund (14,566,093.41) (9,055,503.39) - -

Net Cash Provided by (Used in)

Investing Activities (2,186,278,685.29) (943,952,155.78) (1,395,879,216.95) 245,461,887.50

CASH FLOWS FROM FINANCING ACTIVITIES

Increase (decrease) in short-term loans

from financial institutions 775,000,000.00 (20,000,000.00) 775,000,000.00 (20,000,000.00)

Increase (decrease) in short - term loans

and advance from related parties (39,904,007.61) (26,800,000.00) 719,842,159.76 4,246,175.28

Decrease in long - term loans from related party - - (13,673,800.00) (100,000.00)

Increase (decrease) in other long - term loans (1,691,498,481.64) 1,167,080,792.66 (674,389,595.86) 478,989,595.86

Proceeds from exercise of warrants 7,819,440.84 89,791,089.28 7,819,440.84 89,791,089.28

Cash paid for dividend 22 (979,822,732.19) (368,583,724.65) (979,822,732.19) (368,583,724.65)

Dividend paid to minority interest (280,000,715.59) (80,192,334.90) - -

Cash received from minority interest 63.00 122.50 - -

Net Cash Provided by (Used in)

Financing Activities (2,208,406,433.19) 761,295,944.89 (165,224,527.45) 184,343,135.77

Translation of financial statements differences (328,397.47) (769,661.19) - -

Increase (decrease) in cash and cash

equivalents, net 357,163,550.09 (575,348,289.86) 126,444,363.08 (396,802,037.51)

Cash and cash equivalents, beginning

of periods 574,523,599.97 1,149,871,889.83 288,663,892.18 685,465,929.69

Cash and cash equivalents, end of periods 6 931,687,150.06 574,523,599.97 415,108,255.26 288,663,892.18



STATEMENTS OF CASH FLOWS (CONTINUED)

BAHT



NOTE 2008 2007 2008 2007


54


Annual Report2008



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:

NOTES TO FINANCIAL STATEMENTS

Company Name Industrial Estate Site Location

Hemaraj Land and Development Plc. Hemaraj Chonburi Sriracha district, Chonburi province

Eastern Industrial Estate Co., Ltd. Hemaraj Eastern (Map Ta Phut) Muang district, Rayong province

Eastern Seaboard Industrial Estate

(Rayong) Co., Ltd. Eastern Seaboard (Rayong) Pluak Daeng district, Rayong province

Hemaraj Eastern Seaboard

Industrial Estate Co.,Ltd. Hemaraj Eastern Seaboard Pluak Daeng district, Rayong province

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

located at Chidlom Road, Bangkok.

3. 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.

1.2 The change in accounting policy

In 2007, the Company had changed its accounting policy for its investments in subsidiaries and associates in

the separate financial statements from the equity method to the cost method in accordance with the Accounting

Standard No.44 “Consolidated and Separate Financial Statements” (revised 2007). The change in accounting

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

effect of the change in accounting policy net as of December 31, 2007 and 2006 of approximately Baht

1,675.28 million and Baht 2,178.31 million, respectively in the Company’s separate financial statements.

Such change in accounting policy affects only the accounts related to investments in subsidiaries and associates

in the Company’s separate financial statements with no effect to the consolidated financial statements of the

Company and its subsidiaries.

55


Annual Report 2008

1.3 Transfer fee and specific business tax

Due to the Royal Decree issued pursuant to the Revenue Code relating to the reduction of tax (No. 472) B.E.

2551, 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

to reduce specific business tax from 3.3% to 0.11% and reduce registration fees for transfer real estates from

2% to 0.01% for registration made during March 28, 2008 until March 27, 2009, the Company and subsidiaries

have revised effect from such measures by making adjustment of accrual for transfer fee and specific business

tax in statements of income for the year ended December 31, 2008 in the amount of Baht 248.23 million

(separate financial statement : Baht 166.73 million).

1.4 Adoption of new accounting standards

The Federation of Accounting Professions (FAP) has issued Notifications No. 86/2551 regarding Thai Accounting

Standards, and this has been published in the Royal Gazette. The Notifications mandate the use of the

Accounting Standards (Revised 2007) in place of the previous versions, which are cancelled. Accounting

Standards (revised version) which are not effective for the current period are as follows:

Accounting Standards No. 36 Impairment of Assets (revised 2007)

Accounting Standards No. 54 Non-current Assets Held for Sale and Discontinued Operations

(revised 2007)

These accounting standards will become effective for the financial statements for fiscal years beginning on or

after 1 January 2009.

However, the management has assessed the effect of these revised accounting standards and believes that they

will not have any significant impact on the financial statements for the period in which they are initially applied.

2. BASIS OF CONSOLIDATED FINANCIAL STATEMENT PRESENTATION 2.1 Basis for preparation 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 2007 financial statements have been reclassified to conform to the 2008 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, 2007. There have been no

significant changes in the composition of the Group during the current period.

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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Annual Report2008

MILLION BAHT

2008 2007

Elyo-H Facilities Management Limited 2.76 2.01

SIL Industrial Land Company Limited

(Consolidated financial statements) 6.14 0.31

Glow Hemaraj Energy Company Limited - (2.68)

GHECO - One Company Limited 19.69 (0.22)

Total 28.59 (0.58)

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.

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

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

57


Annual Report 2008

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 recognized 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.

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.

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.

58


Annual Report2008

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.

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%.

59


Annual Report 2008

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.

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.

Diluted earnings per share is computed by dividing net income attributable to ordinary shareholders for the

year, as adjusted for the effect of dilutive ordinary shares, by the weighted average number of ordinary shares

paid up and issued during the year plus the number of dilutive ordinary shares.

4. SIGNIFICANT ACCOUNTING JUDGEMENTS 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.

60


Annual Report2008

Subsidiaries Eastern Industrial Estate Company Limited Industrial Estate Development Common shareholders 99.99 99.99 and co-directors Eastern Seaboard Industrial Estate Industrial Estate Development ,, 60.00 60.00 (Rayong) Company LimitedHemaraj Eastern Seaboard Industrial Industrial Estate Development ,, 99.99 99.99 Estate Company Limited Eastern Pipeline Services Company Pipe Rack Rental ,, 99.99 99.99 Limited H-International (BVI) Company Limited Holding Company ,, 100.00 100.00Hemaraj International Limited Holding Company ,, 100.00 100.00H-Construction Management and Design and Construction ,, 99.99 99.99 Engineering Company Limited Supervision ServiceThe Park Residence Company Limited Real Estate Development and ,, 99.99 99.99 Service Management Hemaraj Water Company Limited Water Resources Development ,, 99.99 99.99 and Management SME Factory Company Limited Sale and Lease of Factory ,, 99.99 99.99H - Phoenix Property Company Limited Condominium office ,, 99.99 99.99 for sales, rent and services Hemaraj Clean Water Company Limited Produce and distribute the ,, 99.99 - industrial water Associates Elyo-H Facilities Management Limited Facilities Management Service Common shareholders 39.99 39.99 and co-directors GHECO - One Company Limited Electricity and Power Generation ,, 35.00 35.00SIL Industrial Land Company Limited Industrial Estate Development ,, 25.00 25.00Rayong Industrial Land Company Limited Industrial Estate Development ,, 25.00 25.00

PERCENTAGE OF HOLDING

COMPANY NAME TYPE OF BUSINESS RELATIONSHIP 2008 2007

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:

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Annual Report 2008

Related Companies Sriracha Harbor Public Company Limited Port Service and Transportation Common shareholder 6.40 6.40 and co-directors Eastern Fluid Transport Company Limited Pipe Rack Maintenance ,, 15.00 15.00Steel Top Company Limited Steel Manufacturer and Distributor Co-directors - - Siam Food Products Public Processing Agriculture Producer Co-investors - - Company Limited Teo Hong Silom Company Limited Facilities Management Service ,, - - Cementhai Property (2001) Public Holding Company ,, - - Company Limited Cementhai Holding Company Limited Holding Company ,, - - Glow Energy Public Company Limited Energy ,, - - Glow IPP2 Holding Company Limited Holding Company ,, - - Elyo South East Asia Pte Ltd. * Energy ,, - - Related Person - Directors - -

PERCENTAGE OF HOLDING

COMPANY NAME TYPE OF BUSINESS RELATIONSHIP 2008 2007

Changed from former co-investor, Tractabel Asia Company Limited to Elyo South East Asia Plc Ltd.

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

Assets

Short - term loans and advance to related parties: Subsidiaries: Eastern Industrial Estate Company Limited - - 110,000 - Dividend receivable Eastern Seaboard Industrial Estate) - - 148,075 128,444 5%-10% of contract price (Rayong Company Limited and 5% of service income received and dividend receivable Hemaraj Eastern Seaboard Industrial - - - 335,643 MLR - 0.50%, MLR Estate Company Limited H-Construction and Engineering - - 10,074 2,536 MLR - 0.50% Company Limited Hemaraj Water Company Limited - - - 1 - SME Factory Company Limited - - 38,720 36,356 MLR - 0.50% Hemaraj Clean Water Company Limited - - 9,030 - Dividend receivable H - Phoenix Property Company Limited: - - 2,400 - Dividend receivableAssociates: Elyo-H Facilities Management Company - 92 - 92 - Limited SIL Industrial Land Company Limited - 15,000 - 15,000 MLR – 1.00%Related company : Sriracha Harbor Public Company Limited * 11,355 11,355 11,355 11,355 Rate as mentioned in business reorganization plan Total 11,355 26,447 329,654 529,427 Less Allowance for doubtful debts (11,355) (11,355) (11,355) (11,355) Net - 15,092 318,299 518,072

THOUSAND BAHT

CONSOLIDATED SEPARATE

FINANCIAL STATEMENTS FINANCIAL STATEMENTS INTERCOMPANY

2008 2007 2008 2007 TERM

62


Annual Report2008

* The Company provided the provision for doubtful debt in full amount as the Company’s basis. This company

entered into the Business Reorganization Plan under the Bankruptcy Court, and now is under the process of the

Business Reorganization Plan. The Company has not yet adjusted the provision for the receivable under the Business

Reorganization Plan and will adjust accordingly when obtaining the settlement from it as the Plan.

Balance of assets with related parties and its movement for the year 2008 were as follows:

THOUSAND BAHT

As of 31st During the year As of 31st

December, 2007 Increase Decrease December, 2008

Consolidated financial statements Short - term loans and advance to related parties:

Associates 15,092 1,288,839 (1,303,931) - Related company 11,355 114 (114) 11,355 Total 26,447 1,288,953 (1,304,045) 11,355Less Allowance for doubtful debts (11,355) - - (11,355) Net 15,092 1,288,953 (1,304,045) -Separate financial statements Short - term loans and advance to related parties:

Subsidiaries 502,980 1,169,514 (1,354,195) 318,299 Associates 15,092 1,288,839 (1,303,931) - Related company 11,355 114 (114) 11,355 Total 529,427 2,458,467 (2,658,240) 329,654Less Allowance for doubtful debts (11,355) - - (11,355) Net 518,072 2,458,467 (2,658,240) 318,299

Short - term loans and advance from related parties: Subsidiaries: Eastern Seaboard Industrial Estate - - 74,345 - Advance (Rayong) Company Limited Eastern Industrial Estate Company - - 311,824 - MLR – 0.50% Limited Hemaraj Eastern Seaboard Industrial - - 310,085 - MLR – 0.50% Estate Company Limited Hemaraj Water Company Limited - - 56,715 57,039 MLR - 0.50%, MLR Eastern Pipeline Services Company - - 10,821 5,283 MLR - 0.50% Limited H - Phoenix Property Company Limited - - 27,253 - MLR - 0.50%Related company : Siam Food Products Public Company 40,000 79,904 - - Dividend payable Limited Total 40,000 79,904 791,043 62,322 Long - term loans from related party:

Liabilities

THOUSAND BAHT

CONSOLIDATED SEPARATE INTERCOMPANY

FINANCIAL STATEMENTS FINANCIAL STATEMENTS

2008 2007 2008 2007 TERM

63


Annual Report 2008

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.

Balance of Liabilities with related parties and its movement for the year 2008 were as follows:

Long - term loans from related party :Subsidiary: H-International (BVI) Company Limited - - 1,113,099 1,100,493 -Deferred leasehold right income: Subsidiary: Hemaraj Clean Water Company Limited

Deferred leasehold right income - - 62,100 - Rate mutually agreed Less Accumulated amortization - - (1,252) - between both parties Deferred leasehold right - - 60,848 - income, net

Consolidated financial statements Short - term loans and advance from related parties 79,904 280,000 (319,904) 40,000Separate financial statements Short - term loans and advance from related parties:

Subsidiaries 62,322 1,289,544 (560,823) 791,043 Long - term loans from related party:

Subsidiary 1,100,493 12,606 - 1,113,099

THOUSAND BAHT

As of 31st During the year As of 31st

December, 2007 Increase Decrease December, 2008

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

Service income 1.01 1.93 6.91 0.92 Market priceInterest income 29.95 0.97 38.71 65.96 MLR - 1%, MLR – 0.5%, MLR, 4.85% and 5.25%Commission and Management Income 24.49 12.87 138.77 41.27 5% - 10% of contract price and 5% of service

income receivedCost of service 10.47 10.49 1.15 1.47 Market priceFinance costs - - 24.42 5.68 MLR – 0.50% and MLRDeferred leasehold right income - - 1.25 - Rate mutually agreed between both partiesGain from sell of investment in subsidiary - - 1.12 - Rate mutually agreed

between both partiesGain from Sell of other long term investment - - 15.00 - Rate Mutually agreed between both parties

MILLION BAHT



2008 2007 2008 2007 COST POLICY

THOUSAND BAHT



2008 2007 2008 2007 TERM

64


Annual Report2008

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



2008 2007 2008 2007

Cash and deposits at financial institutions 931,592 574,431 415,091 288,648

Current investments - Time deposits 95 93 17 16

Deposit with commitment 2,059,901 - 2,059,901 -

Total 2,991,588 574,524 2,475,009 288,664

Less Deposit with commitment (2,059,901) - (2,059,901) -

Cash and Cash Equivalents 931,687 574,524 415,108 288,664

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

THOUSAND BAHT



2008 2007 2008 2007

Related parties

Service receivables

Accrued service income 10,844 9,450 13,774 4,098

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

Service receivables, net 3,439 2,045 13,774 4,098

Trade Account Receivables - Related Parties, net 3,439 2,045 13,774 4,098

Other parties

Service receivables

Accrued service income 100,922 98,887 23,317 29,323

Less Allowance for doubtful accounts (21,089) (20,786) (18,028) (17,722)

Service receivables, net 79,833 78,101 5,289 11,601

Real estate sales contracts receivables

Total value of contracts signed 28,585,410 25,743,375 7,797,118 7,760,510

Installments due 27,194,982 20,560,720 6,918,365 4,643,553

Less Installments received (27,141,541) (20,479,144) (6,918,265) (4,630,719)

Installments receivables, net 53,441 81,576 100 12,834

Trade Account Receivables -Other Parties, net 133,274 159,677 5,389 24,435

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Annual Report 2008

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

THOUSAND BAHT



2008 2007 2008 2007

Accumulated amount recognised as revenue on

percentage of completion basis 27,359,896 24,144,971 7,793,443 7,639,691

Less Installments due (27,194,982) (20,560,720) (6,918,365) (4,643,553)

Net 164,914 3,584,251 875,078 2,996,138

The balance comprises :

Unbilled completed work 1,096,128 3,793,106 878,770 3,013,341

Unearned income (931,214) (208,855) (3,692) (17,203)

Net 164,914 3,584,251 875,078 2,996,138

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

Accrued service income

Less than 3 months 79,833 78,101 5,289 11,601

Over 3 months to 6 months 304 165 62 -

Over 6 months to 12 months 246 516 124 338

Over 12 months 20,539 20,105 17,842 17,384

Total 100,922 98,887 23,317 29,323

Less Allowance for doubtful accounts (21,089) (20,786) (18,028) (17,722)

Accrued service income, net 79,833 78,101 5,289 11,601

Real estate sale contracts receivables

Less than 3 months 53,441 81,576 100 12,834

Over 3 months to 6 months - - - -

Over 6 months to 12 months - - - -

Over 12 months - - - -

Total real estate sale contracts receivables 53,441 81,576 100 12,834

Trade Account Receivables - Other Parties, net 133,274 159,677 5,389 24,435

THOUSAND BAHT



2008 2007 2008 2007

For the allowance for doubtful accounts of related party receivables and other parties, which obtain facility

services in the industrial estate, are provided and charged by the Company. With the economic crisis in 1997 in

Thailand, these companies have encountered with operation problem and the Company provided the provision

for doubtful debt in full amount as the Company’s basis. Consequently, these companies entered into the Debt

Restructure under CDRAC or Business Reorganization Plan under the Bankruptcy Court. The Company has

not yet adjusted the provision for these receivables under the Business Reorganization Plan until obtaining the

settlement as the Plan or debt restructure from each receivable.

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Annual Report2008

THOUSAND BAHT



2008 2007 2008 2007

THOUSAND BAHT



2008 2007 2008 2007

Balance of Allowance for doubtful accounts and its movement for the years ended December 31, were as

follows:

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 20,786 20,045 17,722 17,154

Additional allowance during the year 873 1,010 325 568

Received during the year (570) (269) (19) -

Ending balance 21,089 20,786 18,028 17,722

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

Unearned income

Land and condominium sale contracts (14,311,290) (7,767,685) (226,132) (590,772)

Less Installments received 14,182,426 7,582,764 226,245 590,134

Installments receivables (128,864) (184,921) 113 4,362

Less Deferred income 1,060,078 393,776 3,579 12,841

Unearned income 931,214 208,855 3,692 17,203

Land sales deposit - 6,342 - 6,342

Income received in advance – service and rental 95,219 30,219 37,648 2,150

Total Unearned Income and

Income Received in Advance 1,026,433 245,416 41,340 25,695

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Annual Report 2008

THOUSAND BAHT



2008 2007 2008 2007

9. COST OF REAL ESTATE DEVELOPMENTS, NETAs at December 31, cost of real estate developments, net consisted of:

Land cost under developments 7,133,557 6,843,533 1,648,684 1,648,529

Project development costs 12,802,091 11,406,604 4,253,991 3,825,291

Capitalized finance costs 2,513,350 2,398,806 746,020 739,066

Additional utility costs 7,788 7,722 7,581 7,437

Advance for constructions 13,562 78,246 1,636 65,972

Advance for land purchases 386,579 128,500 148,500 128,500

Total 22,856,927 20,863,411 6,806,412 6,414,795

Less Accumulated costs transferred to cost of land sales (15,373,255) (13,528,343) (4,892,368) (4,711,025)

Accumulated costs transferred to assets for rent (1,409,421) (1,181,147) (46,774) (21,104)

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

Cost of Real Estate Developments, net 5,930,413 6,010,083 1,723,432 1,538,828

Capitalized finance costs for the year ended

December 31 included in

cost of real estate developments 114,544 171,495 6,954 58,101

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

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

Eastern Seaboard Industrial Estate Company Limited is as follows:-

Valuation Stated in the Financial Statements

As at December 31, 2008 and 2007, 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, 2008 and 2007, 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 persons.

68


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Lim

ited

(5)

100.

00

100.

00

99.9

9 99

.99

- -

- 75

.00

107.

46

108.

25

21.0

0 -

S

ME

Fac

tory

Com

pany

Lim

ited

(6)

37.0

0 37

.00

99.9

9 99

.99

- -

37.0

0 37

.00

37.2

5 39

.58

3.33

-

H

– P

hoen

ix P

rope

rty

Com

pany

Lim

ited

(7)

785.

00

785.

00

99.9

9 99

.99

- -

785.

00

785.

00

787.

77

782.

91

2.40

-

H

emar

aj C

lean

Wat

er C

ompa

ny L

imite

d (8

) 58

0.50

-

99.9

9 -

- -

580.

50

- 59

3.81

-

9.03

-

Inve

stm

ents

in S

ubsi

diar

ies

- -

3,17

2.10

2,

666.

60

5,98

1.20

4,

905.

09

973.

76

751.

64

(1

) In

200

7, th

e C

ompa

ny h

ad p

aid

the

shar

e ca

pita

l inc

reas

e to

Hem

araj

Eas

tern

Sea

boar

d In

dust

rial E

stat

e C

ompa

ny L

imite

d in

the

tota

l am

ount

of B

aht 4

05 m

illion

.

(2

) 74

.99%

dire

ctly

hel

d by

the

Com

pany

and

25%

indi

rect

ly h

eld

by E

aste

rn In

dust

rial E

stat

e C

ompa

ny L

imite

d.

(3

) H

-Int

erna

tiona

l (B

VI)

Com

pany

Lim

ited

was

regi

ster

ed in

the

Brit

ish

Virg

in Is

land

s (U

S. c

urre

ncy

is u

sed

for

busi

ness

ope

ratio

n).

(4

) H

emar

aj In

tern

atio

nal L

imite

d w

as r

egis

tere

d in

the

Cay

man

Isla

nds

(US

. cu

rren

cy is

use

d fo

r bu

sine

ss o

pera

tion)

. Th

e C

ompa

ny o

btai

ned

the

info

rmat

ion

from

the

fina

ncia

l sta

tem

ents

whi

ch w

ere

prep

ared

by

the

subs

idia

ry’s

man

agem

ent

and

wer

e no

t au

dite

d by

an

audi

tor.

Nev

erth

eles

s, it

s to

tal a

sset

s an

d ne

t pr

ofit

pres

ente

d in

the

fina

ncia

l sta

tem

ents

wer

e im

mat

eria

lity

to t

he c

onso

lidat

ed

finan

cial

sta

tem

ents

.

(5

) 99

.99%

indi

rect

ly h

eld

by H

emar

aj C

lean

Wat

er C

ompa

ny L

imite

d (In

200

7, 7

4.99

% d

irect

ly h

eld

by th

e C

ompa

ny a

nd 2

5% in

dire

ctly

hel

d by

Eas

tern

Indu

stria

l Est

ate

Com

pany

Lim

ited.

)

In 2

007,

the

Com

pany

and

Eas

tern

Indu

stria

l Est

ate

Com

pany

Lim

ited

had

paid

up

the

exis

ting

shar

e ca

pita

l and

the

sha

re c

apita

l inc

reas

e to

Hem

araj

Wat

er C

ompa

ny L

imite

d in

the

tot

al a

mou

nt o

f

Bah

t 75

milli

on.

In 2

008,

the

Com

pany

and

Eas

tern

Indu

stria

l Est

ate

Com

pany

Lim

ited

had

sold

inve

stm

ent

in H

emar

aj W

ater

Com

pany

Lim

ited

tota

lly 1

0 m

illion

sha

res

to H

emar

aj C

lean

Wat

er C

ompa

ny L

imite

d fo

r

Bah

t 10.

15 p

er s

hare

.

(6

) In

200

7, th

e C

ompa

ny h

ad p

aid

up th

e ex

istin

g sh

are

capi

tal a

nd th

e sh

are

capi

tal i

ncre

ase

to S

ME

Fac

tory

Com

pany

Lim

ited

in th

e to

tal a

mou

nt o

f Bah

t 36.

75 m

illion

.

(7

) In

200

7, th

e C

ompa

ny h

ad e

stab

lishe

d H

– P

hoen

ix P

rope

rty

Com

pany

Lim

ited,

whi

ch h

ad th

e in

itial

cap

ital s

hare

in th

e am

ount

of B

aht 5

0 m

illion

and

had

pai

d th

e sh

are

capi

tal i

ncre

ase

to H

– P

hoen

ix

Pro

pert

y C

ompa

ny L

imite

d, in

the

tota

l am

ount

of B

aht 7

35 m

illion

. The

Com

pany

pai

d fo

r ca

pita

l in

the

tota

l am

ount

of B

aht 7

85 m

illion

from

the

regi

ster

ed c

apita

l of B

aht 8

00 m

illion

.

(8

) In

200

8, th

e C

ompa

ny h

ad e

stab

lishe

d H

emar

aj C

lean

Wat

er C

ompa

ny L

imite

d, w

hich

had

the

regi

ster

ed c

apita

l in

the

amou

nt o

f Bah

t 645

milli

on, a

nd h

ad p

aid

up fo

r sh

are

capi

tal t

o H

emar

aj C

lean

Wat

er C

ompa

ny L

imite

d, in

the

tota

l am

ount

of B

aht 5

80.5

0 m

illion

of B

aht 9

eac

h.

10. I

NV

ES

TM

EN

TS

IN S

UB

SID

IAR

IES

AN

D A

SS

OC

IAT

ES

As

at D

ecem

ber

31, t

he C

ompa

ny’s

inve

stm

ents

usi

ng th

e eq

uity

met

hod

wer

e as

follo

ws:

Inve

stm

ents

(Mill

ion

Bah

t)

C

om

pan

y P

aid

-up

Cap

ital

P

erce

ntag

e o

f sh

ares

C

ons

olid

ated

fina

ncia

l S

epar

ate

fina

ncia

l N

et b

oo

ked

val

ue in

the

D

ivid

end

fo

r th

e ye

ar

(Mill

ion

Bah

t)

held

by

the

Co

mp

any

st

atem

ents

(a

t C

ost

) p

ort

ion

of

inve

stm

ents

en

ded

Dec

emb

er 3

1,

(P

erce

nt)

2008

2007

20

08

20

07

2008

2007

20

08

20

07

2008

2007

20

08

20

07

69


Annual Report 2008In

vest

men

ts in

sub

sidi

arie

s an

d as

soci

ates

(con

tinue

d)

Inve

stm

ents

(Mill

ion

Bah

t)

C

om

pan

y P

aid

-up

Cap

ital

P

erce

ntag

e o

f sh

ares

C

ons

olid

ated

fina

ncia

l S

epar

ate

fina

ncia

l N

et b

oo

ked

val

ue in

the

D

ivid

end

fo

r th

e ye

ar

(Mill

ion

Bah

t)

held

by

the

Co

mp

any

st

atem

ents

(a

t C

ost

) p

ort

ion

of

inve

stm

ents

en

ded

Dec

emb

er 3

1,

(P

erce

nt)

2008

2007

20

08

20

07

2008

2007

20

08

20

07

2008

2007

20

08

20

07

Ass

ocia

tes:

Com

mon

sha

reho

lder

s an

d co

-dire

ctor

s

Ely

o-H

Fac

ilitie

s M

anag

emen

t Lim

ited

50.0

0 50

.00

39.9

9 39

.99

22.9

4 21

.19

20.0

0 20

.00

22.9

4 21

.19

1.00

-

GH

EC

O –

One

Com

pany

Lim

ited

(9)

324.

00

100.

00

35.0

0 35

.00

132.

87

34.7

8 11

3.40

35

.00

132.

87

34.7

8 -

-

SIL

Indu

stria

l Lan

d C

ompa

ny L

imite

d

500.

00

500.

00

25.0

0 25

.00

269.

03

262.

89

239.

75

239.

75

258.

06

251.

92

- -

Ray

ong

Indu

stria

l Lan

d C

ompa

ny L

imite

d (1

0)

1,00

0.00

1,

000.

00

25.0

0 25

.00

- -

- -

- -

- -

In

vest

men

ts in

Ass

ocia

tes

424.

84

318.

86

373.

15

294.

75

413.

87

307.

89

1.00

-

Tota

l Inv

estm

ents

42

4.84

31

8.86

3,

545.

25

2,96

1.35

6,

395.

07

5

,212

.98

974.

76

751.

64

Div

iden

d in

com

e fo

r th

e ye

ars

ende

d D

ecem

ber

31

S

ubsi

diar

ies

pres

ente

d in

the

stat

emen

t of

chan

ges

in s

hare

hold

ers’

equ

ity

- (5

05.0

3)

S

ubsi

diar

ies

pres

ente

d in

the

stat

emen

t

of in

com

e

97

4.76

24

6.61

O

ther

com

pani

es p

rese

nted

in th

e st

atem

ent

of in

com

e

45

.10

0.07

Tota

l

1,

019.

86

246.

68

(9

) 35

% d

irect

ly h

eld

by th

e C

ompa

ny in

GH

EC

O –

One

Com

pany

Lim

ited.

In 2

008,

the

Com

pany

had

pai

d th

e sh

are

capi

tal i

ncre

ase

to G

HE

CO

– O

ne C

ompa

ny L

imite

d, in

the

tota

l am

ount

of B

aht 7

8.40

milli

on to

mai

ntai

n th

e ex

istin

g pr

opor

tion

of s

hare

hold

ing

stru

ctur

e.

In 2

007,

the

Com

pany

had

inve

sted

in G

HE

CO

– O

ne C

ompa

ny L

imite

d, w

hich

had

the

initi

al c

apita

l sha

re in

the

am

ount

of B

aht

10 m

illion

and

the

Com

pany

had

pai

d th

e sh

are

capi

tal i

ncre

ase

to

GH

EC

O–

One

Com

pany

Lim

ited,

in th

e to

tal a

mou

nt o

f Bah

t 35

milli

on.

(1

0)

25%

dire

ctly

hel

d by

the

Com

pany

in S

IL In

dust

rial L

and

Com

pany

Lim

ited

that

has

hel

d 99

.99%

in R

ayon

g In

dust

rial L

and

Com

pany

.

70


Annual Report2008

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

Investments in related parties

Sriracha Harbor Public Company Limited 15,000 15,000 - 75,300

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

Total 16,500 16,500 - 75,300

Less Provision for impairment loss on investments (15,000) (15,000) - (75,300)

Other Long-term Investments - Related Parties, net 1,500 1,500 - -

Others

Glow IPP Company Limited

(Formerly : Bowin Power 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

THOUSAND BAHT



2008 2007 2008 2007

In 2008, the Company had sold investment in Sriracha Harbor Public Company Limited totally 15 million shares to

Eastern Pipeline Services Company Limited for Baht 1 per share and Eastern Pipeline Services Company Limited

had set up provision for impairment loss on investment for Baht 15 million.

71


Annual Report 200812

. AS

SE

TS

FO

R R

EN

T, N

ET

A

s at

Dec

embe

r 31

, 200

8 an

d 20

07, a

sset

s fo

r re

nt, n

et c

onsi

sted

of:

Con

solid

ated

fina

ncia

l sta

tem

ents

La

nd (*

) 32

6,86

6 48

,447

(3

3,78

8)

341,

525

- -

- -

326,

866

341,

525

B

uild

ings

(*)

1,76

9,25

5 21

3,61

5 (1

13,5

62)

1,86

9,30

8 22

4,87

5 91

,033

(1

3,19

6)

302,

712

1,54

4,38

0 1,

566,

596

B

uild

ing

impr

ovem

ents

12

,410

2,

938

(1,2

11)

14,1

37

4,46

9 1,

511

(129

) 5,

851

7,94

1 8,

286

Fu

rnitu

re a

nd fi

xtur

e -

476

2,36

9 2,

845

- 21

7 -

217

- 2,

628

P

ipe

rack

17

9,18

4 -

23,4

87

202,

671

84,4

02

12,0

50

- 96

,452

94

,782

10

6,21

9

C

onst

ruct

ion

in p

rogr

ess

1,33

8 38

,289

(2

3,48

7)

16,1

40

- -

- -

1,33

8 16

,140

Tota

l 2,

289,

053

303,

765

(146

,192

) 2,

446,

626

313,

746

104,

811

(13,

325)

40

5,23

2 1,

975,

307

2,04

1,39

4

Sep

arat

e fin

anci

al s

tate

men

ts

La

nd (*

) 28

,582

4,

158

- 32

,740

-

- -

- 28

,582

32

,740

B

uild

ings

(*)

49,3

85

21,5

12

- 70

,897

6,

483

3,10

1 -

9,58

4 42

,902

61

,313

B

uild

ing

impr

ovem

ents

11

7 76

7 -

884

13

11

- 24

10

4 86

0

Tota

l 78

,084

26

,437

-

104,

521

6,49

6 3,

112

- 9,

608

71,5

88

94,9

13

C

ons

olid

ated

S

epar

ate

fi

nanc

ial s

tate

men

ts

fina

ncia

l sta

tem

ents

20

08

20

07

2008

2007

Dep

reci

atio

ns w

hich

incl

uded

in s

tate

men

ts o

f inc

ome

for

the

year

s en

ded

Dec

embe

r 31

:

Cos

t of s

ervi

ces

104,

811

83

,243

3,

112

2,

210

Cha

nges

in C

ost

Cha

nges

in A

ccum

ulat

ed D

epre

ciat

ion

N

et B

oo

k Va

lue

Dis

po

sal/

Dis

po

sal/

B

egin

ning

A

dd

itio

n Tr

ansf

er

End

ing

B

egin

ning

D

epre

ciat

ion

Tran

sfer

E

ndin

g

Beg

inni

ng

End

ing

(Uni

t : T

hous

and

Bah

t)

(*

) Lan

d an

d B

uild

ings

wer

e tr

ansf

erre

d fro

m re

al e

stat

e de

velo

pmen

t cos

t.

A

s at

Dec

embe

r 31

, 200

8 an

d 20

07, t

he a

sset

s fo

r re

nt o

f the

Com

pany

and

the

sub

sidi

arie

s ha

s be

en m

ortg

aged

as

colla

tera

l for

loan

s fro

m lo

cal fi

nanc

ial i

nstit

utio

ns

and

othe

r pe

rson

s.

72


Annual Report2008

13. P

RO

PE

RT

Y, P

LAN

T A

ND

EQ

UIP

ME

NT,

NE

T

As

at D

ecem

ber

31, 2

008

and

2007

, pro

pert

y, p

lant

and

equ

ipm

ent,

net c

onsi

sted

of:

Con

solid

ated

fina

ncia

l sta

tem

ents

La

nd

4,57

9 -

- 4,

579

- -

- -

4,57

9 4,

579

B

uild

ings

and

str

uctu

re

128,

939

188

6,08

2 13

5,20

9 35

,082

7,

893

- 42

,975

93

,857

92

,234

B

uild

ing

impr

ovem

ents

5,

271

2,27

0 -

7,54

1 3,

769

946

- 4,

715

1,50

2 2,

826

Fu

rnitu

re, fi

xtur

e an

d eq

uipm

ent

158,

370

20,5

64

431

179,

365

89,8

18

14,6

85

(199

) 10

4,30

4 68

,552

75

,061

Ve

hicl

es

79,6

43

26,0

22

(1,4

69)

104,

196

50,0

95

11,9

10

(1,4

69)

60,5

36

29,5

48

43,6

60

R

aw w

ater

pip

e 40

,180

7,

330

(3,1

30)

44,3

80

3,66

2 2,

536

- 6,

198

36,5

18

38,1

82

R

eser

voir

26,3

15

- -

26,3

15

356

3,24

6 -

3,60

2 25

,959

22

,713

P

otab

le w

ater

pro

duct

ion

syst

em 1

00,5

06

- -

100,

506

1,98

9 5,

236

- 7,

225

98,5

17

93,2

81

C

onst

ruct

ion

in p

rogr

ess

11,1

14

19,9

33

(9,8

65)

21,1

82

- -

- -

11,1

14

21,1

82

To

tal

554,

917

76,3

07

(7,9

51)

623,

273

184,

771

46,4

52

(1,6

68)

229,

555

370,

146

393,

718

Le

ss R

eser

ve fo

r im

pairm

ent l

oss

of a

sset

s *

(1

0,16

6)

(10,

166)

P

rope

rty,

Pla

nt a

nd E

quip

men

t, ne

t

35

9,98

0 38

3,55

2

Cha

nges

in C

ost

Cha

nges

in A

ccum

ulat

ed D

epre

ciat

ion

N

et B

oo

k Va

lue

Dis

po

sal/

Dis

po

sal/

B

egin

ning

A

dd

itio

n Tr

ansf

er

End

ing

B

egin

ning

D

epre

ciat

ion

Tran

sfer

E

ndin

g

Beg

inni

ng

End

ing

(Uni

t : T

hous

and

Bah

t)

73


Annual Report 2008

Cha

nges

in C

ost

Cha

nges

in A

ccum

ulat

ed D

epre

ciat

ion

N

et B

oo

k Va

lue

Dis

po

sal/

Dis

po

sal/

B

egin

ning

A

dd

itio

n Tr

ansf

er

End

ing

B

egin

ning

D

epre

ciat

ion

Tran

sfer

E

ndin

g

Beg

inni

ng

End

ing

(Uni

t : T

hous

and

Bah

t)

Sep

arat

e fin

anci

al s

tate

men

ts

La

nd

2,98

3 -

- 2,

983

- -

- -

2,98

3 2,

983

B

uild

ings

and

str

uctu

re

88,8

74

- -

88,8

74

14,4

76

5,72

5 -

20,2

01

74,3

98

68,6

73

B

uild

ing

impr

ovem

ents

3,

212

270

- 3,

482

2,77

2 38

5 -

3,15

7 44

0 32

5

Fu

rnitu

re, fi

xtur

e an

d eq

uipm

ent

69,9

51

4,53

5

337

7

4,82

3

4

8,70

0

6,32

9

(1)

55,

028

21,

251

19,

795

Ve

hicl

es

46,7

75

3,63

3

(

1,46

9)

4

8,93

9

3

0,57

9

6,19

7

(

1,46

9)

3

5,30

7

1

6,19

6

1

3,63

2

R

aw w

ater

pip

e 6,

008

-

-

6,00

8

2,61

3

401

-

3,

014

3,

395

2,

994

C

onst

ruct

ion

in p

rogr

ess

926

142

(3

44)

724

-

-

-

-

9

26

724

Tota

l 21

8,72

9

8,5

80

(

1,47

6)

2

25,8

33

9

9,14

0

1

9,03

7

(

1,47

0)

1

16,7

07

1

19,5

89

1

09,1

26

Le

ss R

eser

ve fo

r im

pairm

ent l

oss

of a

sset

s *

(7

24)

(724

)

P

rope

rty,

Pla

nt a

nd E

quip

men

t, ne

t

11

8,86

5 10

8,40

2

C

ons

olid

ated

S

epar

ate

fi

nanc

ial s

tate

men

ts

fina

ncia

l sta

tem

ents

20

08

20

07

2008

2007

Dep

reci

atio

ns w

hich

incl

uded

in s

tate

men

ts o

f inc

ome

for

the

year

s en

ded

Dec

embe

r 31

:

C

ost o

f ser

vice

s 22

,046

10,6

86

1,71

8

663

S

ellin

g an

d ad

min

istr

ativ

e ex

pens

es

24,4

06

20

,154

17

,319

13,6

64

To

tal D

epre

ciat

ion

for

the

year

s 46

,452

30,8

40

19,0

37

14

,327

Cos

t of t

he p

rope

rty,

pla

nt a

nd e

quip

men

t whi

ch h

ave

been

fully

dep

reci

ated

but

are

stil

l in

use

105,

876

89

,755

60

,418

51,6

06

*

R

eser

ve fo

r im

pairm

ent l

oss

of a

sset

s is

pro

vide

d fo

r th

e ce

ased

con

stru

ctio

n in

pro

gres

s.

A

s at

Dec

embe

r 31

, 20

08 a

nd 2

007,

the

land

with

bui

ldin

g an

d st

ruct

ure

of t

he C

ompa

ny a

nd t

he s

ubsi

diar

ies

has

been

mor

tgag

ed a

s co

llate

ral f

or lo

ans

from

loca

l

finan

cial

inst

itutio

ns.

74


Annual Report2008

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:

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) (234,496) (245,696) (234,496)

Leasehold Land and Land Held for Commercial 314,937 326,137 314,937 326,137

Purposes, net

THOUSAND BAHT



2008 2007 2008 2007

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, 2008 and 2007, 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 31 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.

75


Annual Report 2008

Sinking Fund 173,643 159,077 52,405 52,405

Less Accumulated amortization (92,985) (88,447) (29,660) (28,130)

Sinking Fund, net 80,658 70,630 22,745 24,275

THOUSAND BAHT



2008 2007 2008 2007

16. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS Short-term loans from local financial institutions

As at December 31, 2008 and 2007, the Company had short-term loans from 3 local financial institutions in the

amount of Baht 1,135 million and Baht 360 million, respectively, with interest rate as at December 31, 2008 ranging

between 3.70% to 6.25% per annum. (2007 : 4.20% to 6.50% per annum)

Bank overdraft

As at December 31, 2008 and 2007, the Company and its subsidiaries have overdraft credit limit from local financial

institutions in the amount of Baht 140 million. The interest rate is charged at MOR and MOR+0.50% per annum.

Such overdraft is guaranteed by the mortgage portion of land in the projects of real estate development of the

Company and its subsidiaries.

17. LONG-TERM LOANS FROM RELATED PARTY As at December 31, 2008, the Company had loans from H-International (BVI) Company Limited, an oversea

subsidiary, amounting to USD 21.96 million and Baht 342.58 million (2007 : USD 22.46 million and Baht 339.31

million) which did not have the maturity date and the interest charge.

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

76


Annual Report2008

18. O

TH

ER

LO

NG

-TE

RM

LO

AN

S

As

at D

ecem

ber

31, o

ther

long

-ter

m lo

ans

cons

iste

d of

:

Hem

araj

Lan

d an

d D

evel

opm

ent P

ublic

Com

pany

Lim

ited

A. L

oan

from

loca

l com

mer

cial

ban

k co

nsis

ted

of:

A.1

1,

800

(*)

June

200

4 -

Rep

aym

ent w

hen

mor

tgag

e ar

e re

leas

ed a

t E

nd o

f mon

th

Year

1: 3

.85,

-

1,62

4.39

June

200

8 60

% o

f con

dom

iniu

m c

ontr

act v

alue

but

not

Year

2-3

: MLR

-1.7

5,

le

ss th

an B

aht 5

3,00

0 pe

r sq

uare

met

er. T

he

Ye

ar 4

: MLR

–1.5

0

de

bt m

ust b

e fu

lly re

paid

with

in 4

yea

rs s

ince

th

e fir

st d

raw

dow

n.

A.2

45

0 Ju

ne 2

008

– 28

qua

rter

ly in

stal

lmen

ts, c

omm

enci

ng fr

om th

e E

nd o

f mon

th

Year

1-2

: MLR

-1.5

0 45

0.00

-

Dec

embe

r 20

15

9th

mon

th a

fter

the

first

dra

wdo

wn.

Year

3-4

: MLR

-1.1

25,

In

stal

lmen

t 1-1

2 : B

ath

12.5

0 m

illion

eac

h;

Ye

ar 5

: MLR

–1.0

0

In

stal

lmen

t 13-

20 :

Bat

h 15

.00

milli

on e

ach;

In

stal

lmen

t 21-

27 :

Bat

h 22

.50

milli

on e

ach;

and

In

stal

lmen

t 28

: rep

aid

all r

emai

ning

bal

ance

A.3

50

0 (*

) D

ecem

ber

2008

16

qua

rter

ly in

stal

lmen

ts, c

omm

enci

ng fr

om M

arch

201

0. E

nd o

f mon

th

MLR

+0.

50

500.

00

-

-Dec

embe

r 20

13

Inst

allm

ent 1

-8 :

Bat

h 12

.50

milli

on e

ach;

In

stal

lmen

t 9-1

2 : B

ath

37.5

0 m

illion

eac

h; a

nd

In

stal

lmen

t 13-

16 :

Bat

h 62

.50

milli

on e

ach.

Tota

l 2,

750

950.

00

1,62

4.39

Lo

an c

ond

itio

n

B

alan

ces

C

red

it li

ne

Inte

rest

pay

men

t

(Mill

ion

Bah

t)

(M

illio

n B

aht)

C

red

it p

erio

d

Pri

ncip

al r

epay

men

t Te

rm

Int

eres

t ra

te p

er

2008

2007

annu

m (%

)

(*

) Cur

rent

por

tion

of lo

ng t

erm

loan

s in

the

sep

arat

e fin

anci

al s

tate

men

ts fo

r th

e ye

ars

then

end

ed D

ecem

ber

31, 2

008

and

2007

is B

aht

50 m

illion

and

Bah

t 1,

624.

39

milli

on, r

espe

ctiv

ely.

77


Annual Report 2008

Lo

an c

ond

itio

n

B

alan

ces

C

red

it li

ne

Inte

rest

pay

men

t

(Mill

ion

Bah

t)

(M

illio

n B

aht)

C

red

it p

erio

d

Pri

ncip

al r

epay

men

t Te

rm

Int

eres

t ra

te p

er

2008

2007

annu

m (%

)

Eas

tern

Sea

boar

d In

dust

rial E

stat

e (R

ayon

g) C

ompa

ny L

imite

d

A.

Loan

from

loca

l com

mer

cial

ban

ks c

onsi

sted

of:

A.1

30

0 D

ecem

ber

2003

R

epay

men

t on

the

date

of m

ortg

age

rele

ased

, E

nd o

f mon

th

Year

1-3

: MLR

-2.0

0,

151.

06

151.

06

- D

ecem

ber

2008

no

t les

s th

an B

aht 0

.28

milli

on p

er r

ai.

Ye

ar 4

-5: M

LR-1

.00

A.2

12

1 M

arch

200

5 -

60 m

onth

s in

stal

lmen

ts, B

aht 2

.02

milli

on e

ach,

E

nd o

f mon

th

Year

1-3

: -

45.9

8

Mar

ch 2

011

com

men

cing

from

the

13th

mon

th a

fter

the

first

12

mon

th fi

xed

dr

awdo

wn,

and

the

rem

aini

ng w

ill be

repa

id in

the

last

de

posi

t +2.

75,

pe

riod.

In c

ase

of m

ortg

age

of la

nd a

nd b

uild

ings

is

Ye

ar 4

onw

ards

:

re

leas

ed, m

inim

um B

aht 6

,000

per

squ

are

met

er w

ill be

12

mon

th fi

xed

re

paid

.

de

posi

t +3.

75

A.3

50

Ju

ly 2

005

-

60 m

onth

s in

stal

lmen

ts, B

aht 0

.84

milli

on e

ach,

E

nd o

f mon

th

Year

1-2

: MLR

-1.7

5,

20.7

2 30

.74

July

201

1 co

mm

enci

ng fr

om th

e 13

th m

onth

afte

r th

e fir

st

Ye

ar 3

-4: M

LR-1

.25,

dr

awdo

wn,

and

the

rem

aini

ng w

ill be

repa

id in

the

Ye

ar 5

-6: M

LR-1

.00

la

st p

erio

d.

A.4

20

0 A

ugus

t 200

6 -

R

epay

men

t on

the

date

of m

ortg

age

rele

ased

, not

less

E

nd o

f mon

th

Year

1-2

: MLR

-1.0

0,

- 15

3.67

Aug

ust 2

011

than

50%

of l

and

sellin

g pr

ice,

but

not

less

than

Bah

t

Year

3-5

: MLR

-0.5

0

1.

25 m

illion

per

rai

.

A.5

86

A

ugus

t 200

6 -

Rep

aym

ent o

n th

e da

te o

f mor

tgag

e re

leas

ed, n

ot le

ss

End

of m

onth

Ye

ar 1

-2: M

LR-1

.00,

-

66.9

2

Aug

ust 2

011

than

50%

of l

and

sellin

g pr

ice,

but

not

less

than

Bah

t

Year

3-5

: MLR

-0.5

0

1.

1 m

illion

per

rai

A.6

63

A

pril

2006

-

60 m

onth

s in

stal

lmen

ts, B

aht 1

.05

milli

on e

ach,

E

nd o

f mon

th

Year

1-2

: MLR

-1.5

0,

- 48

.64

Apr

il 20

12

com

men

cing

from

the

13th

mon

th a

fter

the

first

Year

3-4

: MLR

-1.0

0,

dr

awdo

wn,

and

the

rem

aini

ng w

ill be

repa

id in

the

last

Year

5-6

: MLR

-0.7

5

pe

riod.

In c

ase

of m

ortg

age

rele

ased

, lan

d no

t les

s th

an

B

aht 0

.25

milli

on p

er r

ai, c

onst

ruct

ion

not l

ess

than

Bah

t

6,

000

per

squa

re m

eter

.

A.7

12

0 Ju

ne 2

006

- Q

uart

erly

inst

allm

ents

, Bah

t 7.5

milli

on e

ach,

E

nd o

f mon

th

Year

1-2

: MLR

-1.0

0,

- 59

.81

June

201

1 co

mm

enci

ng fr

om g

race

per

iod.

In c

ase

of m

ortg

age

Ye

ar 3

-5: M

LR-0

.50

re

leas

ed, n

ot le

ss th

an 5

0% o

f lan

d se

lling

pric

e, b

ut n

ot

le

ss th

an B

aht 0

.24

milli

on p

er r

ai.

78


Annual Report2008

A.8

80

D

ecem

ber

2006

-

Qua

rter

ly in

stal

lmen

ts, B

aht 5

milli

on e

ach,

com

men

cing

E

nd o

f mon

th

Year

1: M

LR-1

.00,

35

.73

55.7

3

Dec

embe

r 20

11

from

the

15th

mon

th a

fter

the

first

dra

wdo

wn.

Year

2: M

LR-0

.75,

Ye

ar 3

: MLR

-0.5

0,

Ye

ar 4

-5: M

LR

A.9

25

5 Ju

ly 2

007

– 48

mon

ths

inst

allm

ents

, Bah

t 5.3

2 m

illion

eac

h,

End

of m

onth

Ye

ar 1

-2: M

LR-1

.00,

62

.68

136.

51

July

201

2 co

mm

enci

ng fr

om th

e m

onth

of g

race

per

iod.

In c

ase

Ye

ar 3

-5: M

LR-0

.50

of

mor

tgag

e re

leas

ed, l

and

not l

ess

than

Bah

t 1 m

illion

pe

r ra

i, co

nstr

uctio

n no

t les

s th

an B

aht 6

,000

per

sq

uare

met

er.

A.1

0 17

5 S

epte

mbe

r 20

08

25 q

uart

erly

inst

allm

ents

, Bah

t 7.0

milli

on e

ach,

E

nd o

f mon

th

MLR

-1.5

0

125.

00

-

– S

epte

mbe

r 201

5 co

mm

enci

ng fr

om th

e 13

th m

onth

afte

r th

e fir

st

dr

awdo

wn

and

the

rem

aini

ng w

ill be

repa

id in

the

last

pe

riod.

In c

ase

of m

ortg

age

rele

ased

, lan

d no

t les

s th

an

7

0% o

f sel

ling

pric

e an

d no

t les

s th

an B

aht 1

.0 m

illion

pe

r ra

i, co

nstr

uctio

n no

t les

s th

an B

aht 8

,000

per

sq

uare

met

er.

B.

Loan

s fro

m o

ther

per

sons

con

sist

ed o

f:

B.1

63

M

arch

200

8 -

Qua

rter

ly in

stal

lmen

ts, B

aht 3

milli

on e

ach,

E

nd o

f mon

th

MLR

-0.8

75 o

f 57

.00

-

Mar

ch 2

011

co

mm

enci

ng fr

om S

epte

mbe

r 20

08.

K

asik

ornb

ank

Plc

.

B.2

30

N

ovem

ber

2008

-

One

tim

e pa

ymen

t at t

he m

atur

ity d

ate

of th

e E

nd o

f mon

th

5.50

30

.00

-

May

200

9 pr

omis

sory

not

e.

Nov

embe

r 20

07 -

O

ne ti

me

paym

ent a

t the

mat

urity

dat

e of

the

End

of m

onth

M

LR-0

.75

of

- 30

.00

May

200

8 pr

omis

sory

not

e.

K

asik

ornb

ank

Plc

.

B.3

14

N

ovem

ber

2007

-

One

tim

e pa

ymen

t at t

he m

atur

ity d

ate

E

nd o

f mon

th

MLR

-0.7

5 of

-

14.0

0

May

200

8 of

the

prom

isso

ry n

ote.

Kas

ikor

nban

k P

lc.

B.4

6

Nov

embe

r 20

07 -

May

200

8 O

ne ti

me

paym

ent a

t the

mat

urity

dat

e

End

of m

onth

M

LR-0

.75

of

- 6.

00

of

the

prom

isso

ry n

ote.

Kas

ikor

nban

k P

lc.

Tota

l 1,

563

48

2.19

79

9.06

Lo

an c

ond

itio

n

B

alan

ces

C

red

it li

ne

Inte

rest

pay

men

t

(Mill

ion

Bah

t)

(M

illio

n B

aht)

C

red

it p

erio

d

Pri

ncip

al r

epay

men

t Te

rm

Int

eres

t ra

te p

er

2008

2007

annu

m (%

)

79


Annual Report 2008

Lo

an c

ond

itio

n

B

alan

ces

C

red

it li

ne

Inte

rest

pay

men

t

(Mill

ion

Bah

t)

(M

illio

n B

aht)

C

red

it p

erio

d

Pri

ncip

al r

epay

men

t Te

rm

Int

eres

t ra

te p

er

2008

2007

annu

m (%

)

Hem

araj

Eas

tern

Sea

boar

d In

dust

rial E

stat

e C

ompa

ny L

imite

d

A.

Loan

from

loca

l com

mer

cial

ban

k co

nsis

ted

of:

A.1

80

0 D

ecem

ber

2005

-

Rep

aym

ent o

n th

e la

nd ti

tle d

eed

tran

sfer

dat

e, n

ot le

ss

End

of m

onth

M

LR-1

.00

31

3.44

68

0.54

Dec

embe

r 20

10

than

50%

of s

ale

cont

ract

pric

e, b

ut n

ot le

ss th

an B

aht

1

milli

on p

er r

ai. T

he d

ebt m

ust b

e fu

lly re

paid

with

in

5

year

s si

nce

the

first

dra

wdo

wn.

A.2

24

5 Ju

ne 2

007

– R

epay

men

t on

the

land

title

dee

d tr

ansf

er d

ate,

not

less

E

nd o

f mon

th

MLR

-1.0

0 23

7.76

23

7.76

June

201

2

th

an 5

0% o

f sal

e co

ntra

ct p

rice,

but

not

less

than

Bah

t

1

milli

on p

er r

ai o

r 2

year

s gr

ace

perio

d, 1

2 qu

arte

rly

in

stal

lmen

ts, B

aht 2

0.42

milli

on e

ach,

com

men

cing

from

y

ear

3. T

he d

ebt m

ust b

e fu

lly re

paid

with

in 5

yea

rs

si

nce

the

cont

ract

dat

e.

B.

Loan

s fro

m o

ther

com

pany

con

sist

ed o

f:

B.1

80

0 N

ovem

ber

2004

-

Rep

aym

ent o

n th

e la

nd ti

tle d

eed

tran

sfer

dat

e at

Bah

t E

nd o

f mon

th

Ave

rage

MLR

+1.

00 o

f 27

9.53

42

5.58

Nov

embe

r 20

11

0.

20 m

illion

per

rai

or

10 in

stal

lmen

ts e

very

6 m

onth

s,

K

asik

ornb

ank

Plc

.,

B

aht 8

0 m

illion

eac

h, c

omm

enci

ng fr

om M

ay 2

007.

Ban

gkok

Ban

k P

lc.

an

d K

rung

thai

Ban

k P

lc.

Tota

l 1,

845

83

0.73

1,

343.

88

80


Annual Report2008

Lo

an c

ond

itio

n

B

alan

ces

C

red

it li

ne

Inte

rest

pay

men

t

(Mill

ion

Bah

t)

(M

illio

n B

aht)

C

red

it p

erio

d

Pri

ncip

al r

epay

men

t Te

rm

Int

eres

t ra

te p

er

2008

2007

annu

m (%

)

Eas

tern

Indu

stria

l Est

ate

Com

pany

Lim

ited

A.

Loan

from

loca

l com

mer

cial

ban

k co

nsis

ted

of:

A.1

35

4 D

ecem

ber

2006

–

Rep

aym

ent w

hen

mor

tgag

e ar

e re

leas

ed a

t 50

% o

f E

nd o

f mon

th

Year

1-2

: MLR

-1.0

0,

- 17

2.35

Dec

embe

r 20

10

land

con

trac

t val

ue b

ut n

ot le

ss th

an B

aht 5

,000

per

Year

3 o

nwar

ds:

sq

uare

wah

. The

deb

t mus

t be

fully

repa

id w

ithin

4 y

ears

MLR

–0.5

0

si

nce

the

cont

ract

sig

ned

date

.

Tota

l 35

4

- 17

2.35

Hem

araj

Wat

er C

ompa

ny L

imite

d

A.

Loan

from

loca

l com

mer

cial

ban

k co

nsis

ted

of:

A.1

80

D

ecem

ber

2006

–

60 m

onth

s in

stal

lmen

ts, B

aht 1

.34

milli

on e

ach,

E

nd o

f mon

th

Year

1-2

: MLR

-0.5

0,

56.1

0 70

.85

Dec

embe

r 20

12

com

men

cing

from

the

13th

mon

th a

fter

the

cont

ract

Year

3 o

nwar

ds:

si

gned

dat

e, a

nd th

e re

mai

ning

will

be re

paid

in th

e la

st

M

LR–0

.25

pe

riod.

Tota

l 80

56.1

0 70

.85

Gra

nd to

tal

6,59

2

2,31

9.02

4,

010.

53

Less

C

urre

nt p

ortio

n of

oth

er lo

ng-t

erm

loan

s

(3

38.8

4)

(1,9

50.3

1)

Cur

rent

por

tion

of lo

ng -

term

loan

s by

sch

edul

ed tr

ansf

er *

(127

.25)

(4

75.6

5)

Oth

er lo

ng-t

erm

loan

s, n

et

1,

852.

93

1,58

4.57

Suc

h ot

her

long

-ter

m lo

ans

are

guar

ante

ed b

y th

e m

ortg

age

of m

ost o

f lan

d in

the

real

est

ate

deve

lopm

ent p

roje

cts

and

ass

ets

for r

ent o

f the

Com

pany

and

its

subs

idia

ries.

*

Cur

rent

por

tion

of lo

ng -

ter

m lo

ans

by s

ched

uled

tra

nsfe

r is

est

imat

ed f

rom

the

loan

s pa

ymen

ts t

o th

e fin

anci

al in

stitu

tions

for

the

land

titl

e de

ed t

o be

tra

nsfe

rred

in

acco

rdan

ce w

ith th

e lo

ans

cont

ract

s.

81


Annual Report 2008

19. SHARE CAPITAL The Extraordinary General Meeting of Shareholders of Hemaraj Land and Development Public Company Limited No.

1/2007 on September 11, 2007 had resolved the decrease of the registered capital by reducing the registered capital

from Baht 15,000,000,000 and paid-up capital Baht 9,189,289,495 to registered capital Baht 6,000,000,000 and

paid-up capital Baht 3,675,715,798 by reducing the existing par value from Baht 1.00 to Baht 0.40 per share.

On September 27, 2007, the Company registered to increase the paid-up capital to be in total Baht 9,313,775,096

after the warrants exercise which was more than earlier approved by the Extraordinary General Meeting of Shareholders

No. 1/2007 and after reduction of registered capital, the paid-up capital was Baht 3,725,510,038.40.

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

2007

20. PREMIUM (DISCOUNT) ON COMMON STOCKS, NET On April 27, 2007, the Federation of Accounting Professions had issued the Announcement No. 8/2007 regarding the

accounting record to compensate the deficit of the public company limited to comply with the accounting standard

conceptual framework that defines the conservatism principles, the concepts of capital and capital maintenance

for the purpose to maintain the capital in full value and to fairly present the financial statements. On September 11,

2007, the resolutions of the Extraordinary General Meeting of Shareholders No. 1/2007 to process the decrease

of the registered share capital and paid up share capital by reducing the existing par value from Baht 1.00 to Baht

0.40 per share. The purpose of the reduction is to use the premium in excess of par value to eliminate the current

and future discount on common stock, which had no effect on the Company’s number of shares and book value

per share. The Company had recorded the decrease of the capital and shares discount in the amount of Baht

5,588.27 million.

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

2007

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.

82


Annual Report2008

Accordingly, the Extra-Ordinary Meeting of Shareholders held on October 16, 2003 had passed the resolution

of the adjustments of the Company’s par value, resulting in the exercise ratio changing from 1 : 1.05918 to be

one warrant exercisable to 10.5918 ordinary shares at the exercise price of Baht 0.283 per share. According to

the SEC’s Notification regarding guideline relating to adjustments of the exercise price/ratio of warrants, it allows

the Company to adjust the number of warrants rather than to adjust the exercise ratio. Therefore, the Company

chose to adjust the number of warrants which resulting that the number of warrants increased from 427,084,638

to 4,527,831,794. Consequently, the warrants had the same exercise ratio at one warrant exercisable to purchase

one ordinary share at Baht 0.283 per share.

As at December 31, 2008 and 2007 there were outstanding 327,547,899 and 355,178,432 units of unexercised

warrants, respectively.

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, 2008 and 2007, the Company had allocated profit amount of Baht 41.17 million and Baht

35.95 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, 2008, the subsidiaries had allocated profit amount of Baht 3.96 million as a statutory

reserve.

Dividend

Dividend paid Dividend

Dividend Approved by (Million Baht) per share Payment date

2008

Dividend from the profit of year 2007 The 2008 Annual General 375.03 0.040 May 15, 2008

Meeting of Shareholders

on April 29, 2008

Interim dividend for year 2008 The Board of Directors’ Meeting 328.35 0.035 December

on November 13, 2008 12,2008

Total dividend paid during year 2008 703.38 0.075

2007

Dividend for the profit of year 2006 The 2007 Annual General Meeting 366.53 0.040 May 15, 2007

of Shareholders on April 27, 2007

Interim dividend for year 2007 The Board of Directors’ Meeting 280.61 0.030 January 23, 2008

on December 24, 2007

Total dividend paid during year 2007 647.14 0.070

23. INCOME FROM INCREASE OF SALABLE AREA In 2008, the Company has recorded income from the increase of the change from utility area to salable area

approved by Industrial Estate Authority of Thailand, in amount of Baht 76.67 million. The effect of this change has

been presented in the statements of income.

83


Annual Report 2008

MILLION BAHT

2008 2007

Hemaraj Land and Development Public Company Limited 16.92 16.67

Eastern Seaboard Industrial Estate (Rayong) Company Limited 12.39 8.75

Total 29.31 25.42

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

Estate (Rayong) Company Limited, Eastern Pipeline Services Company Limited, H - Construction Management

and Engineering Company Limited and H - Phoenix Property Company Limited, jointly established the provident

fund under the Provident Fund Act B.E. 2530, named “Hemaraj Provident Fund”, to provide membership for their

employees. According to regulations of the fund, member and the Company contributes 4% - 10% of employees’

monthly salaries, depending on the working period. Members are entitled to their whole contributions plus net

benefit thereon, and the Company’s contributions plus benefits thereon at the rates, depending on their working

period. The provident fund is managed by Tisco Asset Management Company Limited. During 2008 and 2007,

the Company and the above subsidiaries had contributed to provident fund in the total amount of Baht 8.41 million

and 7.39 million (Separate financial statements: Baht 3.85 million and Baht 3.36 million), respectively.

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

MILLION BAHT



2008 2007 2008 2007

Changes in cost of real estate developments 79.67 109.83 (184.60) 137.54

Investment in cost of real estate developments 2,089.69 2,255.75 461.19 1,003.12

Capitalized finance costs 114.03 171.35 6.95 58.10

Investment in cost of real estate developments

and capitalized (262.11) (150.83) (25.67) -

Employee related expenses 245.95 226.20 111.80 87.67

Depreciation and amortization 155.80 118.07 23.68 18.12

Transfer fee and specific business tax 9.54 193.24 0.90 99.86

Share option cancellation expenses 40.00 - 40.00 -

Written-off deposit for land purchase 32.83 - 32.83 -

Loss from sales of investments in other companies 31.84 8.74 16.84 13.42

Provision for loss on diminution in value of

real estate development cost 11.20 - 11.20 -

Loss (gain) from exchange rate 0.06 0.01 27.27 (52.69)

24. 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:

84


Annual Report2008

MILLION BAHT



2008 2007 2008 2007

Corporate income tax in compliance with the

accounting purposes 98.14 282.40 - 168.97

Corporate income tax in compliance with the

Revenue Code 279.12 119.45 153.86 12.93

27. CORPORATE INCOME TAX The Company recorded corporate income tax according to the accounting purposes on the basis of a percentage

of completion basis for recognition of real estate sales and compute the corporate income tax in compliance with

the Revenue Code on the basis of installments due. Corporate income tax as presented in the statements of income

is, therefore, complied with matching concept.

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

28. EARNINGS PER SHARE COMPUTATION Earnings per share computation in the consolidated and the separate financial statements for the years ended

December 31, consisted of:

CONSOLIDATED FINANCIAL STATEMENTS

Weighted average

Net profit number of ordinary shares Earnings per share

2008 2007 2008 2007 2008 2007

Thousand Baht Thousand Baht Thousand Shares Thousand Shares Baht Baht

Basic earnings per share

Net profit 1,342,024 1,163,640 9,373,467 9,180,778 0.14 0.13

The effect of potential ordinary shares from

warrants

Number of shares that would have been

issued without consideration on the

average fair value of ordinary shares in

excess of the exercise price 242,169 265,982

Diluted earnings per share

Net profit attributable to ordinary

shareholders in case of all warrants

being exercised 1,342,024 1,163,640 9,615,636 9,446,760 0.14 0.12

85


Annual Report 2008

SEPARATE FINANCIAL STATEMENTS

Weighted average

Net profit number of ordinary shares Earnings per share

2008 2007 2008 2007 2008 2007

Thousand Baht Thousand Baht Thousand Shares Thousand Shares Baht Baht

Basic earnings per share

Net profit 823,440 718,913 9,373,467 9,180,778 0.09 0.08

The effect of potential ordinary shares

from warrants

Number of shares that would have been

issued without consideration on the

average fair value of ordinary shares in

excess of the exercise price

Diluted earnings per share 242,169 265,982

Net profit attributable to ordinary

shareholders in case of all warrants

being exercised 823,440 718,913 9,615,636 9,446,760 0.09 0.08

86


Annual Report2008

29. B

US

INE

SS

SE

GM

EN

T IN

FOR

MAT

ION

A

s of

Dec

embe

r 31

, bus

ines

s se

gmen

t inf

orm

atio

n in

the

cons

olid

ated

bal

ance

she

ets

clas

sifie

d by

dom

estic

and

ove

rsea

s bu

sine

ss w

as a

s fo

llow

s:

Cos

t of r

eal e

stat

e de

velo

pmen

ts, n

et

5,93

0.41

-

- 5,

930.

41

6,01

0.08

-

- 6,

010.

08

Leas

ehol

d la

nd a

nd la

nd h

eld

for

co

mm

erci

al p

urpo

ses,

net

31

4.94

-

- 31

4.94

32

6.14

-

- 32

6.14

Ass

ets

for

rent

, net

1,

919.

03

122.

36

- 2,

041.

39

1,87

9.19

96

.12

- 1,

975.

31

Pro

pert

y, p

lant

and

equ

ipm

ent,

net

272.

34

111.

22

- 38

3.56

26

1.24

98

.74

- 35

9.98

Oth

er a

sset

s 4,

862.

03

173.

60

6.41

5,

042.

04

5,17

2.62

51

.95

0.50

5,

225.

07

Tota

l Ass

ets

13,2

98.7

5 40

7.18

6.

41

13,7

12.3

4 13

,649

.27

246.

81

0.50

13

,896

.58

MIL

LIO

N B

AH

T

2008

2007

Do

mes

tic

O

vers

eas

Do

mes

tic

O

vers

eas

R

eal E

stat

e

Oth

ers

Ho

ldin

g C

om

pan

y

Tota

l

Rea

l Est

ate

O

ther

s H

old

ing

Co

mp

any

Tota

l

87


Annual Report 2008

The

oper

atio

n in

form

atio

n of

the

cons

olid

ated

sta

tem

ents

of i

ncom

e, fo

r th

e ye

ars

ende

d D

ecem

ber

31, c

lass

ified

by

dom

estic

and

ove

rsea

s bu

sine

ss w

ere

as fo

llow

s:

MIL

LIO

N B

AH

T

2008

2007

Do

mes

tic

O

vers

eas

Do

mes

tic

O

vers

eas

R

eal E

stat

e

Oth

ers

Ho

ldin

g C

om

pan

y

Tota

l

Rea

l Est

ate

O

ther

s H

old

ing

Co

mp

any

Tota

l

Sal

es o

f lan

d

2,84

7.74

-

-

2,

847.

74

2,15

7.68

-

- 2,

157.

68

Sal

es o

f pre

-fab

ricat

ed fa

ctor

ies

2

35.5

4

-

-

235.

54

122.

06

- -

122.

06

Sal

es o

f con

dom

iniu

ms

1

46.2

9

-

-

146.

29

1,82

1.18

-

- 1,

821.

18

Ser

vice

inco

me

9

82.5

3

279.

83

-

1,26

2.36

92

2.37

12

9.01

-

1,05

1.38

Inco

me

from

incr

ease

of s

alab

le a

rea

76.6

7

-

-

76.6

7

- -

- -

Tota

l Sal

es a

nd S

ervi

ces

inco

me

4,

288.

77

279.

83

-

4,56

8.60

5,

023.

29

129.

01

- 5,

152.

30

Pro

fit (l

oss)

from

ope

ratio

ns

1,

205.

20

171.

68

(8.2

2)

1,36

8.66

1,

539.

96

27.9

6 (1

5.16

) 1,

552.

76

Oth

er in

com

e

165

.12

0

.56

-

16

5.68

60

.12

0.37

0.

19

60.6

8

Loss

on

sale

s of

inve

stm

ent

(

16.8

4)

(15.

00)

-

(31.

84)

(8.7

4)

- -

(8.7

4)

Adj

ustm

ent o

f acc

rual

for

tran

sfer

fee

an

d sp

ecifi

c bu

sine

ss ta

x

248

.23

-

-

24

8.23

-

- -

-

Loss

on

exch

ange

rat

e

(0

.06)

-

-

(0

.06)

-

- -

-

Sha

re o

ptio

n ca

ncel

latio

n ex

pens

es

(40.

00)

-

-

(40.

00)

- -

- -

Pro

visi

on fo

r lo

ss o

n di

min

utio

n in

val

ue

of

leas

ehol

d la

nd a

nd la

nd h

eld

for

co

mm

erci

al p

urpo

ses

(

11.2

0)

-

-

(11.

20)

- -

- -

Rev

ersa

l of i

mpa

irmen

t los

s on

ass

ets

- -

- -

25.1

8 -

- 25

.18

Sha

re o

f pro

fit (l

oss)

from

inve

stm

ents

for

us

ing

the

equi

ty m

etho

d -

asso

ciat

es

28.5

9

-

-

28.5

9

(0.5

8)

- -

(0.5

8)

Dire

ctor

rem

uner

atio

n

(29

.31)

-

-

(2

9.31

) (2

5.43

) -

- (2

5.43

)

Fina

nce

cost

s

(132

.71)

(4

.24)

-

(1

36.9

5)

(69.

41)

(2.3

4)

- (7

1.75

)

Inco

me

tax

expe

nses

(82

.62)

(1

5.52

) -

(9

8.14

) (2

82.4

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- -

(282

.40)

Pro

fit (l

oss)

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r ta

x

1,33

4.40

13

7.48

(8

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1,

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66

1,23

8.70

25

.99

(14.

97)

1,24

9.72

Net

pro

fit o

f min

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inte

rest

(121

.64)

(86.

08)

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pro

fit

1,

342.

02

1,

163.

64

88


Annual Report2008

30. PLEDGED ASSETS As of December 31, 2008, pledged assets were as follows:

Hemaraj Land and Development Public Company Limited

1. Time deposit of Baht 2,059.90 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 partial land and attachments have been mortgaged as collateral for loans from local commercial banks

and financial institutions and is in the process of withdrawing the pledged assets.

3. 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.

4. 11.34 million ordinary shares of GHECO - One Company Limited have been pledged with the lender secured

for loan obtained by that company.

5. 14.25 million ordinary shares of Glow IPP Company Limited have been pledged with the lender secured for

loan obtained by that company.

6. 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 partial land has been mortgaged as collateral for long-term loans from a local commercial bank.

Eastern Seaboard Industrial Estate (Rayong) Company Limited

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

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

commercial bank.

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

related persons.

Hemaraj Eastern Seaboard Industrial Estate Company Limited

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

bank.

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

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.

31. COMMITMENTS UNDER AGREEMENTS As of December 31, 2008, 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.

89


Annual Report 2008

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 acquired 5% investment in the amount of Baht 142.5 million in Glow IPP Company Limited and

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

Thailand.

2. The Company has commitment under construction and infrastructure contracts for the Company’s condominium

project, with the remaining commitment balance amounting to Baht 5.20 million.

3. The Company has commitment from entering a repurchase and resale contract in a project according to the

land transferred for debt settlement with a financial institution in amount of Baht 257.00 million. The Company

has already paid Baht 148.50 million deposits.

4. The Company has commitment from entering a purchase and sale contract in a project in amount of Baht

328.30 million. The Company has already paid Baht 32.83 million deposits. In 2008, the Company had written-

off the deposit for land purchase in the amount of Baht 32.83 million because of the expiration of such land

purchase and sale contract.

5. In 2007, the Company has entered the partnership agreement to purchase golf member to support the

marketing activities of the company with the remaining commitment balance amounting to Baht 38.23 million.

Such memberships have to be transferred within 3 years from the contract date.

6. The Company acquired 35% investment in the amount of Baht 114 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.

The total project cost of GHECO-One Company Limited is estimated at Baht 38,991 million or USD 1,170

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 2,259.90 million to guarantee the joint venture agreement of the Company

and the Company shall pledge the ordinary shares of GHECO-One Company Limited with the lender secured

for this project loan.

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

90


Annual Report2008

fee to Hemaraj Land and Development Public Company Limited based on revenues from sales of land, public utility

service providing and lease of factories.


The Company has commitment under construction contracts to construct pre-fabricated factories and utilities

system, with the remaining commitment balance amounting to Baht 171.85 million.

Eastern Pipeline Services Company Limited

The Company has commitment under construction contracts to construct utilities system, with the remaining

commitment balance amounting to Baht 5.64 million.

Hemaraj Clean Water Company Limited

The Company has commitment under construction contracts to construct utilities system, with the remaining

commitment balance amounting to Baht 5.78 million.

32. COMMITMENTS AND CONTINGENT LIABILITIES As of December 31, 2008, 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 3,084 million. (Separate financial statements : Baht 2,134

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 9.05 million. (Separate financial statements : Baht 1.15

million)

4. The Company and its subsidiaries have obligations 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 438.43 million. (Separate financial

statements : Baht 222.73 million).

33. THE EXTRAORDINARY GENERAL MEETING OF SHAREHOLDERS RESOLUTION ABOUT DEBENTURES

The Extraordinary General Meeting of Shareholders of Hemaraj Land and Development Public Company Limited

no 1/2550 on September 11, 2007 had resolved to issue and sale of debentures with the primary details as follows was

approved:

Primary Details

Type : Secured or unsecured debentures with/without trustee.

Denomination : Thai Baht and/or any other currencies.

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

Term : Up to 10 years from the date of issue.

91


Annual Report 2008

Offering : Public offering and/or private placement and/or offering to institutional investors

in one or several tranches from time to time pursuant to the relevant notifications

of the Securities and Exchange Commission.

Early redemption : The early redemption of debentures is an option for both the debenture holders

and the Company (as the issuer) this is subject to the terms and conditions of each

offering.

Other details and conditions relating to the issue and offer of debentures, such as type, number of debentures to

be offered in each tranche, term, offering method, face value, purpose and use of process, offering price, interest

rate, and interest payment shall be determined at the discretion of the Board of Directors.

34. PROMOTIONAL PRIVILEGES The Company and its 5 subsidiaries have been granted promotional certificates under the Investment Promotion

Act, B.E. 2520 as follows:

Hemaraj Land and Development Public Company Limited A. 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 Limited A. 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 Eastern Seaboard Industrial Estate (Rayong) Company Limited A. 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

Area/units obtained Major Privileges

Date obtained for promotional Exemption from Reduction of 50% of

for promotional privilege privilege corporate income corporate income tax

tax (***) (****)

92


Annual Report2008


A. Industrial Estate Business

A.1 May 22, 1997 1,407 Rai 8 years 5 years



A.4 September 26, 1996 1,332 Rai 8 years 5 years

A.5 January 11, 2008 1,500 Rai 8 years 5 years

B. 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

Hemaraj Water Company Limited

A. Utility and Other Services Business

A.1 October 25, 2005 12.27 million cubic meters 8 years 5 years

SME Factory Company Limited

A. 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.

Area/units obtained Major Privileges

Date obtained for promotional Exemption from Reduction of 50% of

for promotional privilege privilege corporate income corporate income tax

tax (***) (****)

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

businesses as follows:

Consolidated financial statements

Revenue from sales

Lands 2,836,588.83 1,613,954.57 11,146.21 543,726.96 2,847,735.04 2,157,681.53

Industrial factories 111,123.86 88,769.96 124,421.00 33,292.13 235,544.86 122,062.09

Condominiums - - 146,294.59 1,821,177.93 146,294.59 1,821,177.93

Service income 507,264.65 414,357.85 755,089.21 637,022.79 1,262,353.86 1,051,380.64

Total 3,454,977.34 2,117,082.38 1,036,951.01 3,035,219.81 4,491,928.35 5,152,302.19

Separate financial statements

Revenue from sales

Lands - - 9,779.26 148,966.12 9,779.26 148,966.12

Industrial factories - - - - - -

Condominiums - - 146,294.59 1,821,177.93 146,294.59 1,821,177.93

Service income - - 131,966.05 141,236.23 131,966.05 141,236.23

Total - - 288,039.90 2,111,380.28 288,039.90 2,111,380.28

THOUSAND BAHT

BOI NON-BOI TOTAL

2008 2007 2008 2007 2008 2007

93


Annual Report 2008

35. 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.

36. SUBSEQUENT EVENTS The Board of Directors’ Meeting of Hemaraj Land and Development Public Company Limited No. 1/2009 held

on February 27, 2009 recommended payment of a final dividend of another Baht 0.035 per share , including the

interim payment of Baht 0.035 per share , the total dividend for 2008 is Baht 0.07 per share to be considered and

approved at the Annual General Meeting of Shareholders of the Company.

37. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved by the Company’s Board of Directors on February 27, 2009.

94


Annual Report2008

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

1 Credit Agricole (Suisse) SA, Singapore Branch 872,406,389 9.30

2 Miss Phenpunnee Horrungruang 802,080,000 8.55

3 Nomura Singapore Limited - Customer Segregated Account 601,634,500 6.41

4 EFG Bank 586,500,000 6.25

5 Thai NVDR CO., LTD. 428,372,370 4.57

6 Mr. Sombat Tepsatist 419,991,800 4.48

7 Chase Nominees Limited 42 419,698,727 4.47

8 Mrs. Kanokkarn Siriratanapan 371,496,400 3.96

9 Chase Nominees Limited 1 336,172,395 3.58

10 Quam Securities Nominee (Singapore) PTE LTD 332,700,000 3.55

Top Ten of Hemaraj Land and Development’s Shareholders as at 28/11/08

Industrial Customer

Development

I.E. Operations

I.E.Development

Water Project

Planning

Information Sys &

Services

CorporatePlanning

& Investor Relations

Corporate Marketing

ResidentialPlanning

Residential Customer

Development

Residential Development

FinanceAccount& Legal

Procurement***

Sharehlders

Board of Directors

Executive Committee

President & CEO

Audit Committee

Internal Audit

Senior Vice PresidentExecutive Vice

President

Nominating Committee

Good Corporate Governance Committee

***From August 2008.

Shareholding & Organization Structure

95


Annual Report 2008

General Information

Paid Revenue (Mil. Baht) Name Address Nature of Capital % of Business (Mil.Baht) Investment 2008 % 2007 % 2006 %

Hemaraj Land And Development 18th Floor, UM Tower, Industrial Estates, 3,753 649.00 13% 2,166.82 41% 2,203.93 54%

Public Company Limited 9 Ramkhamhaeng Rd., Utilities and Property

Registration No. Bormorjor Suanluang, Developer

0107536000676 Bangkok 10250, Thailand

Share Capital 15,000,000,000 shares Tel.(662) 719-9555

Issued 9,381,841,029 shares Fax (662) 719-9546-7

www.hemaraj.com

E-mail: [email protected]

Subsidiary Companies

Hemaraj International Limited (1) Scotia Centre, 4th Floor Holding Company 0.03 100

P.O.Box 2804, George Town,

Grand Cayman, Cayman

Islands

H-International (BVI) Company Romasco Place, Holding Company 0.08 100 - 0% 0.19 0% 0.46 0%

Limited (2) Wickhams Cay 1,

P.O. Box 3140,

Road Town, Tortola

British Virgin Islands.

Eastern Industrial Estate 18th Floor, UM Tower, Industrial Estate Developer 400 99.99 899.58 18% 1,309.81 25% 794.75 20%

Company Limited 9 Ramkhamhaeng Road,

Suanluang, Bangkok 10250,

Thailand

Eastern Pipeline Services 18th Floor, UM Tower, Pipe Rack Rental 100 99.99 67.51 1% 49.78 1% 46.21 1%

Company Limited(3) 9 Ramkhamhaeng Road,

Suanluang,Bangkok 10250,

Thailand

Eastern Seaboard Industrial Estate 18th Floor, UM Tower, Industrial Estate Developer 358 60 1,216.06 24% 909.94 17% 993.51 24%

(Rayong) Company Limited 9 Ramkhamhaeng Road,


Thailand

H-Construction Management 18th Floor, UM Tower, Engineering Project 17.15 99.99 34.12 1% 51.33 1% 6.00 0%

and Engineering Company Limited 9 Ramkhamhaeng Road, and Construction Service

Suanluang,Bangkok 10250,

Thailand

The Park Residence Company Limited 18th Floor, UM Tower, Property Development and 0.25 99.99 5.64 0% 3.27 0% 1.65 0%

9 Ramkhamhaeng Road Marketing and Service

Suanluang,Bangkok 10250, Management

Thailand

Hemaraj Eastern Seaboard Industrial 18th Floor, UM Tower, Industrial Estate Developer 1,000 99.99 1,847.48 37% 675.97 13% 8.32 0%

Estate Company Limited 9 Ramkhamhaeng Road,


Thailand

Hemaraj Water Company Limited (4) 18th Floor, UM Tower, Industrial Water Utility 100 99.99 94.39 2% 28.27 1%

9 Ramkhamhaeng Road,


Thailand

SME Factory Company Limited 18th Floor, UM Tower, Factory for Sale and Rental 37 99.99 4.09 0% 2.06 0%



Thailand

H-Phoenix Property Company Limited 18th Floor, UM Tower, Office for Sale and Rental 785 99.99 80.28 2% 40.72 1%



Thailand

Hemaraj Clean Water Company 18th Floor, UM Tower, Produce and distribute 580.50 99.99 84.36 2%

Limited (5) 9 Ramkhamhaeng Road, the industrial water


Thailand

96


Annual Report2008

Associated Companies (8)

Elyo-H Facilities Management Limited 107/1 Moo 4, Eastern Facilities Management 50 40 2.76 0% 2.01 0% 2.30 0%

Seaboard Industrial Estate Services

(Rayong), Pluakdeang,

Rayong, Thailand

Rayong Industrial Land 1 Siam Cement Road, Industrial Estate Developer 1,000 25 -6.50 0% -0.61 0% 20.57 1%

Company Limited (6) Bangsue Bangkok 10800,

Thailand

S I L Industrial Land (Saraburi) 111 Moo 7, Nong Pla Mao Industrial Estate Developer 500 25 12.64 0% 0.92 0% 3.29 0%

Company Limited Sub-District Nong Khae

District, Saraburi

18140, Thailand

Glow Hemaraj Energy 195 Empire Tower, Electricity and Power - - - 0% -2.68 0% -1.84 0%

Company Limited (7) 38th Floor Park Wing, Generation

South Sathorn Road

Bangkok 10120, Thailand

GHECO-One Company Limited 195 Empire Tower, Electricity and Power 324 35 19.69 0% -0.22 0%

38th Floor Park Wing, Generation

South Sathorn Road


Related Companies

Eastern Fluid Transport 618 Nimom Makkasan Road Management and 10 15

Company Limited Makkasan, Ratchthewi Maintenance

Bangkok 10400, Thailand of Pipe Rack

Glow IPP Company Limited 195 Empire Tower,

38th Floor Park Wing, Electricity and Power 2,850 5

South Sathorn Road Generation


Total Revenue : Hemaraj Land And Development PLC. and Subsidiaries 5,011.10 100% 5,237.58 100% 4,079.15 100%

Remark

1) Incorporated in the Cayman Islands

2) Incorporated in the Territory of the British Virgin Islands

3) Held 74.99 % directly and 25% indirectly through Eastern Industrial Estate Company Limited

4) Held 99.99 % indirectly through Hemaraj Clean Water Company Limited ( In 2007, 74.99% directly and 25% indirectly through Eastern Industrial Company Limited )

5) In 2008 Hemaraj had established Hemaraj Clean Water Company Limited, which had the registered capital in the amount of Baht 645 million and had paid up for share capital in

the amount of Baht 580.50 million

6) Held 25% direct in S I L Industrial Land (Saraburi) Company Limited and also S I L held 99.99% in Rayong Industrial Land Company Limited

7) On 15 October 2007 Hemaraj sold all shares in Glow Hemaraj Energy Company Limited to Glow Energy Public Company Limited

8) In 2008 ,2007 Share of (profits) losses from investments by using the equity method in Associated Companies was presented as an expenses in Statement of Income

Paid Revenue (Mil. Baht) Name Address Nature of Capital % of Business (Mil.Baht) Investment 2008 % 2007 % 2006 %

97


Annual Report 2008

Share Registrar Thailand Securities Depository Co., Ltd.

62 The Stock Exchange of Thailand Bldg. 4th Floor

6-7th Floor, Rachadapisek Road, Klongtoey


Tel. 0-2229-2800

Fax. 0-2654-5599

Auditor A.M.T & Associates

491/27 Silom Plaza, Silom Road, Bangruk

Silom Road, Bangruk


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

Fax 0-2237-2133

- Mrs. Natsarak Sarochanunjeen CPA No. 4563

Attorney Allen & Overy (Thailand) Co., Ltd.

130 Sindhorn Building III, 22nd Floor, Wireless Road


Tel. 0-2263-7600

Fax. 0-2263-7699

Financial Advisor Per Project

Other References

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บรษิทั เหมราชพฒันาทีด่นิ จำกดั (มหาชน) Hemaraj Land And Development Public Company Limited ชัน้ 18 อาคารยเูอม็ทาวเวอร ์เลขที ่9 ถนนรามคำแหง สวนหลวง กรงุเทพมหานคร 10250 โทรศพัท ์: 66-2719-9555 โทรสาร : 66-2719-9546-7 18th FL., UM Tower, 9 Ramkhamhaeng Rd., Suangluang, Bangkok 10250 THAILAND Tel : 66-2719-9555 Fax : 66-2719-9546-7

e-mail : [email protected], [email protected] www.hemaraj.com, www.theparkresidence.co.th Registration No. : BORMORJOR.0107536000676 ทะเบียนเลขที่ : บมจ.0107536000676

บรษิทั เหมราชพฒันาทีด่นิ จำกดั (มหาชน) Hemaraj Land And Development Public Company Limited

08Annual Reportรายงานประจำปี 2551

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