HomePro AR2010_Eng.indd

Transcription

Annual Report 2010
Moving forward to Service Excellence
www.homepro.co.th
Shop.homepro.co.th
Home Product Center Plc.
96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000 Telephone (66) 02-832-1000 Fax (66) 02-832-1400
Greater Bangkok :
Chaengwatthana
Ekamai-Ramindra
Fashion Island
Future Mart
Latphrao
Lumlukka
Petchkasem
Ploenchit
Prachachuen
Rama II
Ramkhamhaeng
02-962-6955
02-933-5000
02-947-6365
02-689-0844
02-983-7444
02-997-4800
02-444-4699
02-655-3400
02-955-5888
02-895-6555
02-735-4999
Rangsit
Ratchadaphisek
Ratchapruk
Rattanathibet
Seri Center
Sukhaphiban 3
Suvarnabhumi (Bangna)
The Mall Bangkae
02-958-5699
02-641-2900
02-423-3222
02-921-2400
02-746-0377
02-976-9114
02-325-1200
02-454-9299
Central :
Ayutthaya
Hua Hin
Nakhonpathom
035-23-6655
032-52-6000
034-21-3200
North :
East :
Chiangmai
053-85-1229
Chiangmai-Hangdong 053-44-7939
Phitsanulok
055-28-9009
Chonburi
Pattaya
Rayong
North-East :
Had Yai
Krabi
Nakhonsitammarat
Phuket
Phuket-Chalong
Samui
uratthani
038-78-5111
038-36-0422
038-80-9333
South :
Khao Yai
Khonkaen
Nakhonratchasima
044-32-8799
043-36-5365
(Bypass 2)
044-28-2550
044-28-8345
042-30-9000
The Mall Korat
Udonthani
074-46-9055
075-81-0499
075-32-4740
076-25-5189
076-60-2399
077-23-1900
077-48-9199
Loving home by homepro
Annual Report 2010
Board of Directors
HomePro
is the leading home improvement retailer in Thailand.
We operate 40 stores nationwide, providing product
range cover 60,000 items with complete services
as One Stop Shopping to attain
highest customer satisfaction.
Sales
Net Profit
+18.4%
Total Assets
+44.9%
+2,718MB
New
5 Branches
Mr. Anant Asavabhokhin
Mr. Pong Sarasin
Mr. Manit Udomkunnatum
Chairman
Independent Director
Director and Chairman
of Executive Directors
Mr. Rutt Phanijphand
Mr. Apilas Osatananda
Director, Executive Director and Chairman of
the Nomination and Remuneration Committee
Independent Director and
Chairman of the Audit Committee
Mr. Thaveevat Tatiyamaneekul
and Audit Committee
24,073
16,592
20,329
1,638
18,540
13,873
40
13,369
12,274
15,944
33
1,131
35
30
Mr. Chanin Roonsamrarn
Mr. Apichat Natasilpa
Mr. Khunawut Thumpomkul
Independent
depe de t Director,
Director,Audit
ecto ,Audit
ud t Committee
Co
ttee
and Nomination and Remuneration Committee
Director and Nomination and
Remuneration Committee
Director, Executive Director
Director
and Managing Director
959
710
2007 2008 2009 2010
2010 retail sales increased
by 18.4% to
Baht 24,073 million.
2007 2008 2009 2010
NPAT increased
by 44.9% to
Baht 1,638 million.
2007 2008 2009 2010
Total assets increased
from investment in
property of 5 new stores.
2007 2008 2009 2010
Lumlukka, Sukhaphiban 3,
Nakhonpathom,
Nakhonratchasima and
Nakhonsitammarat
Mr. Naporn Soonthornchitcharoen
Mr. Joompol Meesuk
Mrs. Suwanna Buddhaprasart
Director and Executive Director
Director
Director
Contents
2
3
12
15
16
18
21
22
23
36
42
43
43
46
50
51
53
54
Message from the Chairman
Message from the Managing Director
General Information
Financial Information
Nature of Business
Risk Factors
Shareholding Structure
Organization Chart
Management
Corporate Governance
Internal Control
Dividend Policy
Related Transactions
Financial Analysis and Business Operation Results
Report of Board of Directors’ Responsibilities in
the Financial Statements
Audit Committee’s Report
Independent Auditor’s Report
Financial Statements
1
Message from the Chairman
Dear Shareholders and Stakeholders,
The year 2010 marked the actual start to Thailand economic recovery. After the world
economic crisis in 2008, the export value had driven the expansion of Thai economy and the
consumer confidence index, raising 2010 Gross Domestic Product (GDP) growth above 7%.
With the aforementioned economic situation, in 2010, HomePro successfully achieved
sales goal with the expansion of gross sales up to 18%, and net profits increase up to 43%,
resulting from the business foundation which the Company has strongly established in terms
of the expansion of the branch network, the increase in efficiency of internal management,
improvement of the competencies and advantage over the competitors in the aspect
of merchandises, increased efficiency of cost management, and the development of
the feature of services including relevant marketing strategy.
For 2011, while the economy of Thailand has been expected to maintain growth, there
remains to be many noted vulnerabilities such as the financial crisis in Europe, political situation
of Thailand, and business competition. Therefore, the Company has prepared a work plan
including different strategies to achieve its goals. It is necessary to depend on the efforts and
determination of all employees in every department; cooperation of all shareholders including
the support of the trade partners; trusting and acceptance from all groups of customers of the
“
The Company has
prepared a work plan
including
different strategies to
achieve its goals
Company.
Finally, the Company wishes to thank those who have supported the business of the
Company in every aspect and hopefully the Company could continue to receive your cordial
cooperation and support. The Company has committed to operate and develop the business to
be prosperous for maximum benefits of the shareholders, trade partners, customers and more
than 6,000 employees of the Company.
”
(Mr. Anant Asavabhokhin)
Chairman
2
Message from the Managing Director
Dear Shareholders and Stakeholders,
In 2010, many favorable economic factors indicated a positive sign such as the local and
international economic recovery and the increase of local consumer confidence which led to the
expansion of Thailand’s Gross Domestic Products (GDP) of more than 7%, driving the Company’s
operating results to reach satisfactory level with an increase of the sales volume by 18% and net
profit by 44%. The increases came from the sales growth of the existing branches, opening of new
branches, HomePro Expo, an increase of Private Brand products, service efficiency enhancement,
advertising and sales promotion revenue, and other services revenues.
In 2010 the Company had expanded five more branches: the Nakornpathom, Nakhonratchasima,
a third branch of Home Pro in Nakhonratchasima Province, Lamlukka, Sukhaphiban 3 and
Nakhonsitammarat. There were a total 40 service branches in 2010. In 2011 the Company plans
to expand approximately 4-5 more branches including a renovation of the existing branches in
order to enhance the spending atmosphere. Furthermore, in 2010, the Company continuously
improved its efficiency, particularly in the IT systems, by reimplementing the latest version of the
SAP system including the Company’s entire database structure in order to reduce the duplication
of information, operate with efficiency, and be able to access information that is used to
accurately formulate the strategy of the Company.
With 6 years of continuous operation, HomePro EXPO was a highly successful sales exhibition
and continued to grasp the interest of our customers beyond the expectation. Both events in the
periods of March and October were able to reach the satisfactory sales target. The Company
remains focused on a continuous development of service excellence with the principal goal to
deliver maximum satisfaction to customers. We also developed services under the title Home
Service to serve designing aspect in the 3 dimensional system or 3D Design, and HomeCare
to deliver services in improvement, modification and maintenance by experienced technicians.
Moreover, the Company has focused on sales promotions to accommodate the demands of the
target groups, together with the introduction of an additional sales channel via the E-Commerce
system which is expected to fully operate in 2011.
In addition, the Company is proud to be a socially responsible citizen, continuously create
activities to give back to our community. In 2010 the Company had collaborated with the
Department of Health to raise the hygienic level of toilets under the operation of the Kid’s Toilets
Project by improving and/or constructing additional 219 safe and hygienic toilets for elementary
schools. As of today, the Company has implemented the project in 16 provinces, 60 schools,
with the total of 745 toilettes. At the same time, the Company has organized the One Hundred
Thousand Tree Planting Project within three years to preserve the nature of the mangrove forest
at Bangpu Recreation Center, Royal Thai Army in Samutprakarn Province. Regarding the flood
“
The Company
remains focused on
a continuous
development of
services with the
principal goal to deliver
maximum satisfaction
to customers
”
situation in 2010, we along with business alliances had offered a discount of 50% on the products
that victims need to rebuild their homes. Furthermore, we made donations to help victims and
invited our customers to donate at HomePro’s branches nationwide.
Subsequent to these successes, the Company wishes to thank all employees for the
determination in their work and hopefully our shareholders and trade partners would continue to
cordially support the operation of the Company’s business in the future.
(Mr. Khunawut Thumpomkul)
Managing Director
3
Business Expansion
Store Expansion
HomePro has expanded 5 new branches in 2010. There are 2 branches
in Greater Bangkok; Lumlukka and Sukhaphiban 3, and another 3 branches
in upcountry; Nakornpathom, Nakhonratchasima (the third outlet in
this province) and Nakhonsithammarat.
4
HomePro Expo
HomePro, together with our business alliances, Financial Institutions, and more than 300 manufacturers and distributors have cooperated to hold HomePro Expo No.11 and 12. The company reached total sales of more than 1,200
million baht. In addition, the activity of the fourth HomePro Champion Contest offered an opportunity for home lovers
to join interior design competition under the given themes to win prizes worth over 200,000 Baht.
5
Product Mix Expansion
6
Product Mix Expansion
Aside from diversifying the product
assortment which has been supported by our local business partners,
in 2010 the company has continuously developed Private Brand with
the core objective to create customer
value. We selected quality products
with reasonable price by evaluating
customer demands and behaviors.
This not only maintained our customer
base, but also differentiates us from
the competitor. To date, we have a
total of 36 private brands and over
1,000 items.
7
Service Expansion
Home Service Nationwide
Home Service is our service for home lovers that includes 3D system design and HomeCare consisting
of Installation Service, Maintenance Service and Home Improvement Service which are based on our true
understanding of customer needs. The customers will be served from our professional technicians who have
the knowledge in their jobs and related products. Moreover, they can help customers accurately control
budget and time. Having customers’ acceptance, HomePro has extended Home Service to all 40 branches
nationwide.
Installation Service
Home Improvement Service
Maintenance Service
Customer Satisfaction through
HomePro Call Center 02-831-6000
Because increasing Customer Satisfaction is one of our
core objectives, in 2010, HomePro has moved forward to
develop the Call Center system to facilitate news and
information for customer. We use Information Technology,
Telecommunications and Customer Relation Management
to provide information, follow up, check and respond, and
also coordinate with the related unit to solve customers’
problems promptly.
8
Benefit Expansion
Privileges for home lovers
HomeCard and Professional Card
In 2010, HomePro has launched new privilege card under the name of
“Professional Card” for the project owners, contractors, architects, engineers,
interior designers and other technicians. The customers with the card will get
a discount for purchasing the general product or service, or get a special discount
for purchasing the hard line product such as construction materials, hand tools
and equipments etc. Every purchase made with the card will accumulate points
to redeem a cash equivalent for use on the next purchase. Besides that, the
customers also get other privileges such as joining the workshop.
HomePro Visa
HomePro has launched a new privileged design “HomePro Visa credit card”
that offers discounts for buying HomePro’s products and service, a gasoline
purchase discount, accumulating flight mileage etc., under the concept “Fill your
house, fulfill your lifestyle”.
9
Corporate Social Responsibility (CSR)
Kids’ Toilet
At the end of 2010, HomePro contributed a total
745 restrooms to 60 schools in 16 provinces
nationwide, under the Kids’ Toilets Project which
received national public toilet standard from
the Department of Health, the Ministry of Public
Health.
10
Plant Growth
Under the “HomePro helps to reduce
global warming” project, HomePro has
the objective to plant 100,000 Avicennia
marina and LamPu trees within 3 years
at Bangpu Recreation Center, Royal Thai
Army in Samutprakarn Province. In 2010,
HomePro carried out the reforestation in
May and September.
Computer Lab
Under the “School Computer Lab Project”, in
January 2010, we provided computers together with
equipment installation to Baan Boong Toey School,
Mhoo Si sub-district, Pak Chong district, Nakhonratchasima Province.
Flood Help
With social responsibility, HomePro strives to help and support
the community in any chance. Regarding the flood situation
in 2010, we along with business alliances had offered a discount
of 50% on the products that victims need to rebuild their homes.
Furthermore, we made donations to help victims and invited
our customers to donate at HomePro’s branches nationwide.
11
General Information
Home Product Center Public Company Limited was established on June 27, 1995 with the initial registered capital of
Baht 150 million, being a joint venture between Land and Houses Group and American International Assurance Co., Ltd.
The Company has been listed on the Stock Exchange of Thailand since October 30, 2001.
The Company was established with an objective to operate a retail business in home improvement segment by selling
goods and providing complete range of services relating to construction, addition, renovation of buildings, houses, and
residence places under the trade name of “HOMEPRO” which is the Company’s trademark. Rangsit branch is the first branch of
the Company operating in September 1996. As of 31 December 2010, the Company has 40 branches in total, of which
19 branches are located in Bangkok and its vicinity and another 21 branches in upcountry provinces. There were 5 newly
opened branches in 2010, i.e. Nakhonpathom, Nakhonratchasima, Lumlukka, Sukhaphiban 3 and Nakhonsithammarat.
Information of Home Product Center Public Company Limited
Location
96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000
Telephone
(66) 02-832-1000
Facsimile
(66) 02-832-1400
Website
www.homepro.co.th
Type of Business
selling goods and providing complete range of services relating to construction, addition,
refurbishment, improvement of buildings, houses, and residence places as One Stop Shopping
Registration No.
Bor Mor Jor. 665
Registered Capital
4,426,605,527 shares
Paid-up Capital
4,352,991,862 shares
Information of company in which Home Product Center Plc. holds shares from 10 percent up
12
Name
Market Village Co., Ltd
Location
234/1 Petchkasem Road, Tambon Hua Hin, Amphoe Hua Hin, Prachaub Kirikhan Province 77110
Telephone
(66) 032-61-8888
Facsimile
(66) 032-61-8800
Type of Business
management of leasing space together with provision of facilities services
Number of Issued Shares
50,000 ordinary shares at par value of Baht 100
Number of Held Shares
49,993 shares
Branches Information
1. Rangsit
161/2 Moo 2, Phaholyothin Rd., AmphoeThunyaburi, Pathumthanee 12130
2. Rattanathibet
6/1 Moo 6, Tambon Saothonghin, Amphoe Bangyai, Nonthaburi 11140
3. Fashion Island
587, 589 Ramindra Road, Khannayao, Bangkok 10230
4. Future Mart
295 Rama 3 Rd., Bangkholeam, Bangkholeam, Bangkok 10120
5. Paradise Park (Formerly Seri Center)
61 Srinakarin Rd., Nongbon, Praves, Bangkok 10260
6. The Mall Bangkae
275 Moo 1, Petchkasem Rd., North Bangkae, Bangkae, Bangkok 10160
7. The Mall Korat
1242/2 Mittraphap Rd., Amphoe Muang, Nakhon Ratchasima 30000
8. Ratchadaphisek
125 Ratchadaphisek Rd., Dindang, Dindang, Bangkok 10320
9. Ploenchit
55 Wave Place Building, Wireless Rd., Pathumwan, Bangkok 10330
10. Phuket
104 Moo 5, Tambon Rasada, Amphoe Muang, Phuket 83000
11. Chiangmai
21. Hua Hin
234/1 Petchkasem Rd., Amphoe Hua-Hin, Prachuabkhirikhan 77110
22. Samui
1/7 Moo 6, Tambon Bophut, Amphoe Kho Samui, Suratthani 84320
23. Phitsanulok
959 Moo 10, Tambon Aranyik, Amphoe Muang, Phitsanulok 65000
24. Khonkaen
177/98 Moo 17, Tambon Naimuang, Amphoe Muang, Khonkaen 40000
25. Udonthani
89/20 Moo 9, Soi Bannonglek, Tambon Markkang, Amphoe Muang,
Udonthani 41000
26. Suratthani
9/1 Moo 3, Tambon Makham Tia, Amphoe Muang, Suratthani 84000
27. Petchkasem
28 Moo 11, Nongkhangplu , Nong Kham , Bangkok 10160
28. Chonburi
15/16 Moo 3, Tambon Huykapi, Amphoe Muang, Chonburi 20000
29. Ekamai-Ramindra
14/12 Moo 8, Latphrao, Latphrao, Bangkok 10310
30. Rayong
560 Sukhumvit Rd., Tambon Noenphra, Amphoe Muang, Rayong 21000
31. Ayutthaya
94 Moo 4, Chiang mai-Lampang Rd., Tambon Nong Pa Kruang, Amphoe Muang,
Chiangmai 50000
12. Ramkhamhaeng
647/19 Ramkhamhaeng (Sukhaphibal 3) Rd., Huamark, Bangkapi, Bangkok 10240
13. Rama II
45/581 Moo 6, Samaedam, Bangkhunthien, Bangkok 10150
14. Prachachuen
96/27 Moo 9, Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000
15. Latphrao
669 Latphrao Rd., Chompol, Chatuchak, Bangkok 10900
16. Pattaya
333 Moo 9, Tambon Nongprue, Amphoe Banglamung, Chonburi 20260
17. Chaengwatthana
113 Moo 5, Tambon Pakkret, Amphoe Pakkret, Nonthaburi 11120
18. Had Yai
677 Petchkasem Rd., Tambon Had Yai, Amphoe Had Yai, Songkhla 90110
19. Ratchapruk
82 Moo 2, Tambon Bang Khun Kong, Amphoe Bang Kruai , Nonthaburi 11130
20. Suvarnabhumi
99/28 Moo 1, Tambon Rachatawa, Amphoe Bangplee, Samutprakarn 10540
80 Moo 2, Tambon Bangrod, Amphoe Bangpain, Ayutthaya 13160
32. Chiangmai – Hangdong
433/4-5 Moo 7, Tambon Mae-Hiya, Amphoe Muang, Chiangmai 50100
33. Krabi
349 Moo 11, Tambon Krabinoy, Amphoe Muang, Krabi 81000
34. Phuket – Chalong
61/10 Moo 10, Tambon Chalong, Amphoe Muang, Phuket 83130
35. Khao Yai
288 Moo 11, Tambon Nong Nam Daeng, Amphoe Pakchong, Nakhonratchasima 30130
36. Nakhonpathom
752/3 Petchkasem Rd., Tambon Huai-Charakhe , Amphoe Muang, Nakhonpathom 73000
37. Nakhonratchasima
384 Mittraphap Rd., Amphoe Muang, Nakhonratchasima 30000
38. Lumlukka
99 Moo.6, Tambon Buengkhamphroi, Amphoe Lumlukka, Pathumthanee 12150
39. Sukhaphiban 3
101 Ramkhamheng Rd. (Sukhaphiban 3), Minburi, Minburi, Bangkok 10510
40. Nakhonsithammarat
89 Nakhon-Pakpanang Rd., Amphoe Muang, Nakhonsithammarat 80000
13
Information of the referrals
Auditor
Ernst & Young Office Limited
33rd Floor, Lake Rajada Office Complex, 193/136-137 Ratchadaphisek Rd., Klongtoey, Bangkok 10110
Tel. (66) 02-264-0777
Fax. (66) 02-264-0789-90
Share Registrar Thailand Securities Depository Co., Ltd.
4th, 6-7th floor Stock Exchange of Thailand Building, 62 Ratchadaphisek Rd., Klongtoey, Bangkok 10110
Tel. (66) 02-229-2800
Legal Counsel
Fax. (66) 02-359-1262-3
Wissen & Co Ltd.
8th Floor Office # 3801, BB Building, 54 Sukhumvit 21 (Asoke) Rd., Klongtoey-Nua, Wattana, Bangkok 10110
Tel. (66) 02-259-262
Fax. (66) 02-259-2630
Representative of Debenture Holder
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2008 (Amortization type) and
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 2/2008
TMB Bank Plc.
3000 Phaholyothin Rd., Chomphon, Jatujak, Bangkok 10900
Tel. (66) 02-264-0777
Fax. (66) 02-264-0789-90
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2009 and
CIMB Thai Bank Plc.
44 Langsuan Rd., Lumpini, Patumwan, Bangkok 10330
Tel. (66) 02-626-7503-4
02-626-7218
Fax. (66) 02-626-7542
02-626-7587
Siam Commercial Bank Plc.
9 Ratchadapisek Rd., Jatujak, Bangkok 10900
Tel. (66) 02-256-2323-7
14
Fax. (66) 02-256-2406
Financial Information
(Unit : Million Baht)
Item
Consolidated Financial
2010
2009
2008
Separate Financial Statements
2010
2009
2008
Total Assets
16,591.99
13,872.83
13,369.07
16,543.68
13,824.31
13,318.38
Total Liabilities
10,353.78
8,662.91
8,412.86
10,332.80
8,630.51
8,373.62
Equity
6,238.21
5,209.92
4,956.21
6,210.88
5,193.81
4,944.76
Sales
24,072.76
20,329.12
18,540.27
24,073.78
20,330.43
18,541.73
Total Revenues
25,914.90
21,799.09
19,824.19
25,816.76
21,710.98
19,743.97
1,638.43
1,130.88
959.42
1,627.21
1,126.22
953.95
0.38
0.26
0.50
0.37
0.26
0.49
0.186
0.212
0.35
0.186
0.212
0.35
4,352.99
3,703.93
1,933.61
4,352.99
3,703.93
1,933.61
Net profit
EPS (Baht)
Dividend per share (Baht)*
Paid-up Capital (Million Shares)*
Remark :
In the Extraordinary Shareholders’ Meeting No. 1/2010 held on 4th October 2010, the meeting approved for the payment of interim dividends
at the rate of 0.186 Baht/share by dividing into cash dividends at the rate of 0.0193 Baht/share and stock dividend at the rate of 0.1667 Baht/share.
The meeting
also approved the increase of the registered capital for the amount of 632.39 million shares in order to support the payment of stock
dividends and the execise of warrant under the employee stock option plan No. 4 (ESOP 4).
Financial Ratio
Item
Consolidated Financial
2010
2009
2008
Separate Financial Statements
2010
2009
2008
Liquidity Ratio
Liquidity ratio (time)
0.77
0.67
0.62
0.76
0.66
0.61
Gross Profit (%)
25.01
24.27
23.70
25.01
24.28
23.70
Profit from Operation (%)
10.00
8.57
8.01
9.94
8.54
7.98
6.32
5.19
4.84
6.30
5.19
4.83
28.62
22.25
20.68
28.54
22.22
20.60
10.76
8.30
7.48
10.72
8.30
7.47
1.66
1.66
1.70
1.66
1.66
1.69
33.89
27.56
22.37
33.32
27.14
21.91
Profitability Ratio
Net Profit (%)
Return on equity (%)
Operation Efficiency Ratio
Return on assets (%)
Financial Analysis Ratio
Debts to Equity ratio (time)
Interest coverage ratio (time)
15
Nature of Business
Vision
To be the leader of home center business in Thailand and South East Asia.
Mission
1. We will offer the value in terms of products, services, and prices to our customers, to be the first on customer’s mind.
2. We will collaborate with our business alliance to improve efficiency which leads to increasing of mutual benefits.
3. We will give the importance to and develop personnel to have working efficiency and responsibility to customers.
4. We will manage professionally according to the good governance, and to build good relationship with society and community.
5. We will seek new business opportunity for the future and to create reasonably incremental value for associated parties.
Nature of Business of Home Product Center Public Company Limited
The Company was established with objective to operate a retail business in home improvement segment by selling
goods and providing complete range of services relating to construction, addition, refurbishment, renovation, improvement of
buildings, houses, and residential places through One Stop Shopping Home Center under the trade name of “HomePro” which
is the Company’s trademark. Presently, the Company has the nature of business as follows;
1. Providing home improvement products, by having 3 groups
Hard Line 1
Hard Line 2
Soft Line
Construction material, Home improvement
Kitchenware, Electrical appliances,
Bedding and Household
accessories, Bathroom and Sanitaryware
Electrical equipment and Lighting
decorative goods
To provide the services relating to retail business
Due to most of the Company’s products having instruction details and working process which customers need to
understand, the Company has provided various kinds of related services by giving consultation and useful information for
customers to make decision to select the products that mostly match the usage objectives. In addition, the Company has
provided HomeCare services, including installation service, repairing, and maintenance of equipments, electrical appliance,
system work, painting service, tile service etc., product delivery service, technician and contractor selection and placement
service, products exchange service, as well as arranging DIY demonstration (Do It Yourself) and workshop for customers etc.
2. To provide space rental service for retail tenant stores
The Company has arranged for its rental space in some branches to provide the service for retail tenant shops. At the
sametime, the Company has developed the format of its branches so called HomePro Village which operates the business
in the form of full service shopping center. Inside the project, in addition to HomePro’s branch, there are areas of shopping
center in which most of tenants consist of supermarkets, restaurants, banks, bookstores, and IT shops etc.
As of December 31, 2010, the Company has a total of 4 branches in the format of HomePro Village: Suvannabhumi
branch, Hua Hin branch, Phuket-Chalong branch and Ratchapruk branch.
Nature of Business of Subsidiary
Market Village Co., Ltd. (“Market Village”) was incorporated, on May 26, 2005, located at 234/1 Petchkasem Road,
Tambon Hua-Hin, Amphoe Hua-Hin, Prachaubkirikhan Province, in which Home Product Center Plc. holds 99.99% of total
shares. Presently, its registered capital is Baht 5 million. Market Village was formed with objectives to manage rental space
for Home Product Center Plc., and to provide utilities services to tenants. In the first quarter of 2006, it commenced
operation on the “Hua-Hin Market Village” project which is located at Petchkasem Road, Amphoe Hua-Hin, Prachaubkirikhan.
16
Revenue Structure
Revenue of Company and subsidiaries consist of sales revenue and other revenues. Total structure of revenue can be classified
by the line of products as follows:
2010
Item
Amount
2009
%
Amount
2008
%
Amount
%
1. Revenue from retailing
- Hard Line 1
10,108.3
39.0
8,604.1
39.5
7,782.2
39.3
- Hard Line 2
9,742.3
37.6
8,123.0
37.3
7,520.9
37.9
3,989.4
15.4
3,428.9
15.7
2,998.9
15.1
232.7
0.9
173.1
0.8
238.3
1.2
24,072.8
92.9
20,329.1
93.3
18,540.3
93.5
1,842.1
7.1
1,470.0
6.7
1,283.9
6.5
25,914.9
100.0
21,799.1
100.0
19,824.2
100.0
- Soft Line
2. Revenue from project sales
1
Total Revenue from Sales
3. Other incom 2
Total
Remark
1. Revenue from project sales is from the purchase of project owners which cannot be categorized per product lines.
2. Other income is revenue from rental of space, in-store promotion fee etc.
Supply of Products
The Company sources products by:
1. Purchase order. The Company makes the purchase order of products categorized by product lines from both domestic
and overseas manufacturer or sales agent, in which the Company mainly emphasizes on quality and variety of products.
Currently, the Company sources products from more than 700 manufacturers and sales agents which, throughout the
time, provided good support and cooperation, in terms of advertisement, public relation, joint sale promotion, joint planning of sale
strategies, support and joining new branch to be opened.
2. Make to order. The Company orders manufacturing of Private Brand and House Brand from both domestic and overseas
manufacturer. The Company will initially select the manufacturer by considering factors including being certified of manufacturing
standard, reputation, quality of service and types of harmonized operation. Moreover, the Company also visits the factory and
inspects products in order to ensure the overall quality.
Market and Competitive Condition
The Company is the leader in home improvement retailing which offers a full range of complete services. As for competitors,
the Company has classified other operators who sell goods in similar nature as follows:
1. Operators of Home Center
•
HomeWorks is a retail business unit of home products in Central Retail Corporation Group of Companies. There are
currently 7 branches in operation.
•
Global House operates the business of selling products in the form of warehouse store. Products include construction
materials, decorative goods, tools, equipments to be used for construction, addition, decoration of house and garden.
It is managed by the Siam Global House Plc. There are currently 11 branches in operation.
However, the Company believes that this business still has plenty of potential and marketing opportunities and that the
increase of such business operators will help stimulate consumers familiarity and more rapidly change their behavior to purchase
products from Modern Trade home centers.
17
2. Specialty Store. Retail businesses who focus on selling specific goods as follows:
•
Ceramic, Sanitaryware, and Kitchenware stores i.e. Boonthavorn, Grand Home Mart.
•
Furniture and Home decoration stores i.e. Index Living Mall
•
Retail stores that sell only construction materials i.e. Cement Thai Home Mart, Thai Watsadu.
•
Other Specialty Stores.
3. Operators of large retail business in the group of Hypermarket. These businesses mainly aim at selling of consumer goods
and edible products, not home products. While some groups of products sold may overlap, their main customer targets
are different.
Risk Factors
The Company separately explains the risk factors which may affect the operations of business as follows:
1. Business Risk
Although the economic situation throughout the year 2010 had confronted many unfavorable factors such as uncertainty of
the world economy, local political instability, fluctuation of the Thai Baht and fund flow, and several natural calamities, the Thai
economy expanded by more than 7% due to the increase of export and services which was in line with the economic recovery of
important trading partner countries as well as the continuous recovery of the local demand. All of these factors had shown their
effects in the second half of the year.
The overall retail business in 2010 had a fair expansion which followed the better economic situation, more stable political
situation, the government’s economic stimulus policy, and salary increase of all government sectors. As a result, the consumers
had regained their confidence in the economy, employment, and future income.
The Company, however, has closely kept abreast of the economic and political situation in order to plan and find measures
and strategies to prevent the risks that may occur, and to operate the business so as to successfully reach the planned target.
1.1
Inventory
As of the 31st December 2010, 2009, and 2008, the Company had net Inventory equal of Baht 3,714.23 million, Baht
2,905.14 million, and Baht 2,728.08 million respectively. The average inventory turnover periods of 2010 and 2009 were at
66 days, and of 2008 was at 67 days. The decrease in inventory turnover period reflects the success in adopting a marketing
strategy and our developing capability of inventory management.
However, the Company has been continuingly attempting to increase the turnover of Inventory, whether by developing
of service quality of sale persons, continual sales promotion, improving products display and internal appearance of branches,
regularly adding new products to the store, including attempting to reduce the volume storing level. For the reduction of inventory
in 2006, the Company has expanded space of the distribution center. As of 31st December 2010, the total area amounted to
44,000 square meters and the Company also plans to expand the distribution center area, in order to be capable of supporting
the increase of branches in the future and to manage inventory more efficiently.
2.2
Investment
As of 31st December 2010, the Company has branches in operation totaling 40 branches. It has expanded 5 new branches
in 2010. There are 2 branches in Greater Bangkok; Lumlukka and Sukhaphiban 3, and another 3 branches in upcountry;
Nakhonpathom, Nakhonratchasima (the third outlet in this province) and Nakhonsithammarat.
18
Since the Company has a policy to continuously increase branches, there may be a risk with respect to the result
of performance of new branches that may not be as forecasted. This will affect the result of the overall operation. The Company
avoids the risk by analyzing the investment return before every investment decision, and preparing the action plan and annual
budget. When a new branch starts operating, the results of operations and progress plan are being followed up on a monthly
basis. This will facilitate the Company to set the plan for handling the risk and to solve problems which may occur in
timely manner.
1.3
Operation
The Company has the risk of loss or damage of property due to the operation of the sale personnel, and has set up a work
unit to handle with such risk, that is Loss Prevention Unit, which is responsible for laying preventive and safety system against
various risks of the Company including the risk that the employees may incur from the operation.
1.4
Accounts Receivable
The Company has divided the customers into 2 groups: retail customer and group of contractor and project owner.
The retail customer is customer at store who purchases products by cash, the group of contractor and project owner is customer
who purchases products by credit term. The major sales revenue comes from retail customer. As in 2010 the proportion of
cash sales was 99.0% to total sales. For 2009 and 2008, the proportion was at 99.1% and 98.7%. However, for the credit
sales, the Company will consider only project that has reliable financial status, which the company has analyzed the result of
operation and financial status or having the contractor place with a letter of guarantee as security against debt payment, etc.
As of 31st December 2010, 2009, and 2008, the Company has accounts receivable of Baht 164.02 million, Baht 144.58
million, and Baht 160.63 million, being credit card debtor of Baht 80.44 million, Baht 65.55 million, and Baht 34.06 million
respectively. The allowance for doubtful bad debts was set to be approximately Baht 2.65 million, Baht 5.40 million, and Baht
25.64 million, which the management have already estimated the debt repayment period and have evaluated financial status
of each debtor. The Company believes that the allowance for doubtful bad debts has been set sufficiently and appropriately.
2. Competitive Risk
The Company operates a retail business with products relating to houses and residential places where there are both direct
and indirect competitors such as retailing shops, department stores, specialty stores, and general small retail shops. The Company
has differentiated itself by focusing on offering a variety of products and complete range of services for construction, repairing,
decoration, and addition. Also, the Company provides a team of experts for several kinds of system work such as electrical system,
plumbing, and related installation, etc.
Furthermore, the Company has concentrated on strengthening efficiency of internal management in order to improve, its
capability and advantages against both local and international competition in the future.
3. Legal Risk
The laws which are relevant and may cause a risk to business operation are as follows:
3.1
The Bangkok Metropolis Town Planning Law
Announced on 16th May 2006, with objectives to be a guidance on the development of Bangkok Metropolis and
to support the expansion in the future. If there shall be modification of the town planning in the future, the Company will not
be affected from this limitation, as the Company had put its investment to cover almost all areas of Bangkok. On the other
hand, it is being seen as a restriction on business expansion of competitor, which is a benefit to the Company.
3.2
The Trade Competition Act
In 2006, the Trade Competition Commission has adopted its resolution on the Guideline for Unfair Trade Practices in
the Wholesale/Retail Business, by virtue of the Trade Competition Act B.E. 2542 into 8 ways as follows:
19
1. Unfair price fixing.
2. Unfair request for economic benefit.
3. Unfair returning of goods.
4. Unfair use of agreement of sell on consignment.
5. Coercion to Purchase or to pay for service fee.
6. Unfair use of personnel of manufacturer/vendor.
7. Refusing to accept products by order/customized made as its own private brand, or of House Brand.
8. Other unfair practices.
Such 8 clauses of Guideline for unfair trade practices have affected the modern retail business. However, in order to perform
the business in conjunction with the above announcement, the Company has agreed with its business partner in
amending the agreement to be more specific and clearer.
At present, the Thai Chamber of Commerce has made a new draft amendment of guide line, which is now under
negotiation between the Thai Chamber of Commerce and the Retailers Association in order to find a fair solution among the
manufacturers and the wholesalers and retailers.
3.3
Anti – Dumping and Countervailing Act B.E. 2542 (1999)
At present, the Company has imported many categories of goods from overseas. In 2010, there will be also a reduction
in import duty for goods imported from a country that is a party in the Agreement on Economic Cooperation. Therefore,
according to the agreement, a manufacturer in Thailand may possibly file complaint regarding dumping.
20
Shareholdering Structure
The first ten shareholders
holding the shares on the closing date as of October 15, 2010 having paid-up registered capital in the total of 3,728,518,496
shares consists of:
Rank
Name of natural person / Juristic Person
1.
Land and Houses Public Company Limited
2.
No. of Shares
% of total Paid-up shares
1,128,118,175
30.26
Quality Houses Public Company Limited
759,959,070
20.38
3.
American International Assurance Company Limited
185,900,145
4.99
4.
Mr. Niti Osathanuklor
178,339,985
4.78
5.
Thai NVDR Company Limited
161,942,217
4.34
6.
116,126,806
3.11
7.
BNP PARIBAS SECURITIES SERVICES LUXEMBOURG
72,420,800
1.94
8.
HSBC (Singapore) Nominees PTE Limited
54,518,702
1.46
9.
52,441,480
1.41
48,087,430
1.29
970,663,686
26.03
10. Sarasin Co., Ltd.
11. Others
Remark:
The above table shows the number of shares before the distribution of interim stock dividend on 29 October 2010, which the Company has distributed
to shareholders whose names appeared on the closing date of the registration book on 15 October 2010, at the rate of the existing 6 shares per 1 share
of stock dividend.
Foreign Limit
Foreign shareholders are capable to hold shares and appear their names on the Company’s asset registration of totaling
not exceeding 30% of the issued shares and paid up. As of 30th December 2010, the shares of the Company held by foreigner
was at approximately 15%.
Director who is representative of the group of major shareholders
These following directors are the representative of major shareholders which hold shares of the Company at more than 20%
Name - Surname
Representative of Shareholders
Position
Land and Houses Plc.
Chairman
1.
Mr. Anant
Asavabhokhin
2.
Mr. Rutt
Phanijphand
Quality Houses Plc.
Director
3.
Mr. Joompol
Meesook
Quality Houses Plc.
Director
4.
Mrs. Suwanna
Buddhaprasart
Quality Houses Plc.
Director
5.
Mr. Naporn
Soonthornchitcharoen
Director
21
Organization Chart
Board of Directors
Nomination and
Remuneration Commitee
Executive Directors
Audit Commitee
Managing Director
Internal Audit Department
Senior Vice President
Merchandising - Hard Line and
International Business
Business Development
Merchandising - Soft Line
Human Resource and Loss Prevention
Merchandising Home Electric Product
and The Power
International Merchandising and
Sanitaryware and Tile product
Operation
Marketing
Distribution Center
22
Information Technology
Accounting Treasury and Legal
Management
The structure of Company’s management consists of the Board of Directors, Sub-Committees, and Executive Directors.
There are 3 sets of the Sub-Committees i.e. Executive Director, Audit Committee, and Nomination and Remuneration
Committee, having details as follows:
1. Board of Directors has totaling 12 persons, consisting of 4 Independent Directors, 1 Director who is management,
and 7 Non-Executive Directors, as follows:
Position
Name - Surname
1. Mr. Anant
Asavabhokhin
Chairman
2. Mr. Rutt
Phanijphand
Director, Executive Director and Chairman of the Nomination and Remuneration Committee
3. Mr. Joompol
Meesook
Director
4. Mr. Apichat
Natasilapa
Director and Nomination and Remuneration Committee
5. Mrs. Suwanna
Buddhaprasart
Director
6. Mr. Manit
Udomkunnatum
Director and Chairman of the Executive Director
7. Mr. Naporn
8. Mr. Khunawut
Thumpomkul
Director, Executive Director and Managing Director
9. Mr. Pong
Sarasin
10. Mr. Apilas
Osatananda
Independent Director and Chairman of the Audit Committee
11. Mr. Thaveevat
Tatiyamaneekul
Independent Director and Audit Committee
12. Mr. Chanin
Roonsamrarn
Independent Director, Audit Committee and Nomination and Remuneration Committee
Remark : The company secretary is Ms. Wannee Juntamongkol, Senior Vice President - Accounting, Treasury and Legal.
Authorized Signatory Directors on the Company
1. Mr. Anant
Asavabhokhin
5. Mr. Manit
Udomkunnatum
2. Mr. Joompol
Meesook
6. Mr. Naporn
3. Mr. Apichat
Natasilapa
7. Mr. Khunawut
Thumpomkul
4. Mrs. Suwanna
Buddhaprasart
Two of the seventh authorized signatory Directors are to co sign with the company’s stamp.
Roles and Responsibilities of the Board of Directors
1. To manage the Company, in compliance with the Company’s objectives and Articles of Association and the lawful
resolutions of shareholders’ meeting, and has power to perform any act specified in Memorandum of Association.
2. The Board has power to appoint directors as the Executive Directors in a number as determined by the Board,
comprising of Chief Executive Director, Deputy Chief Executive Directors, who will perform any tasks designated by
the Board of Directors.
3. The Board may appoint any person(s) to operate the Company’s businesses under the supervision of the Board or
empower the said person(s) to have power as deemed suitable by the Board. At the time deemed appropriate by
the Board, the Board may revoke, cancel, or change the said power.
4. The Board must hold a meeting at least once every 3 months.
5. The directors must not operate the business of the same nature as and being in competitive with the Company’s
business or be a partner of the ordinary partnership, or be a partner with unlimited liabilities of the limited partnership or
be a director of a private company or other companies of the same nature as and being in competition with the Company’s
23
business,whether for his/her benefits or other person(s) benefits unless it is notified to the shareholders’ meeting prior
to the resolution for his/her appointment.
6. The director must immediately inform the Company if he/she has direct or indirect stake in any contract or even
holds shares or debentures in the Company and its affiliates.
7. The director, who has interest in any issue, shall have no right to vote on that issue.
8. Investment propositions concerning store expansion or high value non-routine investments except for the following
issues must be approved by shareholders first:
• Matters that laws and regulations of the Securities and Exchange Commission (SEC) and the Stock Exchange
of Thailand (SET) require the resolutions from the Shareholder’s Meeting.
• The related transaction being worth more than 3% of the latest financial statements’ net tangible assets.
• The acquisition or disposition of core assets with value more than 50% of the latest financial statements’ assets.
9. In the event of tie votes, the Chairman of the Board will have a casting vote.
Definition of Independent Director
“Independent Director” means the director who is independent in expressing his opinion to the operation of the Company,
must be a person who has no involvement or interest to the result of operation either directly or indirectly. The qualifications of
the Independent Director are as follows:
1. Hold share not more than 1% of paid up capital of the Company, affiliates company, joint company, associated company,
including the shares held by the related person.
2. Being independent either directly or indirectly of both financial and management of the Company or joint company or
major shareholders of the Company, and having no benefit or interest in such manner within 2 years before being
appointed as the Independent Director, unless the Board of Director has carefully considered and see that such
participation in having benefit or interest will not affect the duty performing and the independence in giving an opinion.
3. Must not be the Director who has been appointed as the representative to maintain the interest of the Director of
the Company, major shareholders, or shareholders who are related to the major shareholders of the Company.
4. Must not participate in management and must not be employee, staff or consultant who receives regular salary in
the Company, affiliate company, joint company, company or major shareholder of the Company.
5. Must not be related person or relatives of the executive or major shareholders of the Company.
6. Capable to perform his duty and express opinion or report result of duty performing as assigned by the Board of Directors,
freely and not under the control of the Executive or major shareholders of the Company, including related person
or close relatives of such person.
7. No other character that causes the inability to give opinion to operation of the Company independently.
Terms of the Director of the Company
According to every Annual General Shareholders Meeting, the directors shall retire from the position of one third,
the directors who have been longest in position shall retire. A retiring director is eligible for re-election, and beside the
retirement, the directors may leave from his position when:
1. Death
2. Resignation
3. Lacking of qualifications or possess prohibited character under Section 68 of the Public Company Act B.E. 2535
4. The Shareholders Meeting resolved to dismiss under Section 76 of the Public Company Act B.E. 2535
5. Dismissal ordered by the Court
24
6. Review and jointly consider with the auditor the financial report, remarks and suggestions.
7. Consider, select, propose to appoint person who is independent to be an auditor of the Company and propose remuneration
of the auditor to the Board of Directors of the Company.
8. Consider the independence of internal audit unit, also approve the appointment, relocation and termination of employment,
including to consider result of annual performance of the chief of internal audit.
9. Consider and approve regulations of internal audit office.
10. Consider and approve annual internal audit plan including to consider the scope of audit and audit plan of internal audit
and the auditor of the Company, in order to have supportive connections.
11. Harmonize the understanding into the same line between Audit Committee, management, Internal Auditor and
External Auditor.
12. Review and consider the result of audit reporting and recommendation.
13. Review and amend the regulations of Audit Committee usually once a year to be up to date and appropriate with the
environment of organization.
14. Carry on examination of the matters notified by the auditor of the Company. In case the auditor finds doubtful behavior
that the director, manager or person who is responsible for the operation of the Company has committed an offence as
stipulated in the Securities and Stock Exchange Act (The 4th Issue) B.E. 2551, and report the result of preliminary
examination to the Office of the Securities Exchange Commission and auditor of the Company within 30 days from
the date receiving notification from the auditor.
15. Perform any other act as stipulated by law or the Board of Directors of the Company under approved by the
Audit Committee.
16. Making report on the directing and supervising of the business activities of the Audit Committee, by disclosing it in the
annual report of the Company, which such report must be signed by the Chairman of the Audit Committee and must
consist of minimum information as follows:
16.1 Opinion in relation to accuracy, completeness, reliability of the financial report of the Company.
16.2 Opinion in relation to sufficiency of internal control system of the Company.
16.3 Opinion in relation to the compliance with the law of Securities and Stock Exchange and regulations of the
Stock Exchange or law relating to business of the Company.
16.4 Opinion in relation to the appropriate of the External auditor.
16.5 Opinion in relation to the transaction that may have a conflict of interest.
16.6 Number of the Audit Committee’s meeting, and the attending to the meeting of each Audit Committee.
16.7 Overview opinion or remarks that the Audit Committee have received from performing his duty under the charter.
16.8 Other information that the shareholders and general investors ought to know, under the scope of duty and
responsibility which have been assigned by the Board of Directors of the Company.
Terms of holding office
1. Taking position for 3 years of each time, including additional appointment and removal from Audit Committee.
2. In case retire from position, such person may be re-appointed.
3. Audit Committee shall leave from the position when:
3.1
Completion of term
3.2
Leave from being a director of the Company
3.3
Resignation
3.4
Death
3.5
Lacking of qualification to be an Audit Committee under this regulations or by the rules of the Stock Exchange
of Thailand.
26
3.6
The Board of Director has resolution to remove from the position.
4. In case of resigning, the resignation letter shall be submitted to the Chairman of the Company not less than 30 days
in advance, the approval shall be made by Board of Directors who shall then send copy of resignation letter to the Stock
of Exchange of Thailand.
5. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualified to be an Audit
Committee in order to fill up the number of Audit Committee as stipulated in regulations. Persons who will be appointed
as the Audit Committee shall be in position only for the time period remaining of the former Audit Committee, and
shall inform the Stock of Exchange of Thailand.
2.3 Nomination and Remuneration Committee consists of:
Name - Surname
Position
1. Mr. Rutt
Phanijphand
Chairman of the Nomination and Remuneration Committee
2. Mr. Chanin
Roonsamrarn
Nomination and Remuneration Committee
3. Mr. Apichat
Natasilapa
Remark:
On January 10, 2011, the Nomination and Remuneration Committee No. 1/2011 has a resolution to appoint Mr. Nitat Aroontippaitoon,
Senior Vice President - Human Resource and Loss Prevention, to be the Nomination and Remuneration Committee’s secretary.
Roles and Responsibilities
1. Select persons who deserve to be nominated as the new Directors, or select of Managing Director.
2. Determine the procedures and regulations on selection of Directors or Managing Director to ensure the transparency.
3. Set up the procedures and criterions of paying which have been fair and proper remuneration and other benefits to the
Board of Directors and Sub-Committee appointed by the Board of Directors, and then propose to the Shareholders
meeting for approval.
4. Consider and guide on determining remuneration and other benefits concerning duty and responsibility of the
Managing Director including consider the criterions and evaluation of operation in order to determine annual remuneration
from the operation.
5. Review the structure of criterions of remuneration on items 3 and 4 to fit with duty, responsibility, operation result of
the Company, and harmonized with market condition.
6. Consider salary budget, annual merit increase and annual reward, welfare, including other benefits of personnel of the
Company and its subsidiary.
7. Prepare operation report presenting to the Board of Directors at least once a year. Set up policy of overall Employee Stock
Option Plan as proposed by the Managing Director.
8. Perform other duties as assigned by the Board of Directors.
Terms of holding office
1. Nomination and Remuneration Committee shall leave from the position when
1.1 Completion of term
1.2 Leave from being a Director of the Company
1.3 Resignation
1.4 Death
1.5 The Board of Director has resolution to remove from position.
2. In case of the resigning, the resignation letter shall be submitted to the Chairman of the Company of not less than 30 days
in advance, approved by the Board of Directors.
27
3. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualified to be the
Nomination and Remuneration Committee, in order to fill up the number as stipulated in the regulations by the Board
of Directors.
Selection of Directors
The Company appointed the Nomination and Remuneration Committee to determine selection of appropriate person to
be nominated as the Director or Managing Director, by considering persons who have knowledge, capability and experience
as required by the Company, and must not have the prohibited qualification under the rules of the Securities Exchange
Commission and Stock Exchange of Thailand, the relevant laws, rules or other regulations., upon approval, the Nomination
and Remuneration Committee will propose to the Shareholders Meeting in order to be adopted for the appointing as the
Directors of the Company.
Criteria of vote to appoint the Company’s Director in the Shareholders Meeting:
1. Each Shareholder has the vote equivalent to one vote per one share held.
2. Each Shareholder shall use all of his/her voting rights under item 1 to elect one person or more persons as the Director,
but is not capable to share his/her varied voting rights to any person.
3. A person, who receives highest votes gradually order would be elected as director subject to the number of Directors
allowed to be elected in such meeting. In the event of persons who have been elected in the lower order have received
equal votes but there will be over the number of allowed or elected Directors in such election, the Chairman of such
Meeting shall have a casting vote.
In 2010, there were 4 Directors who must be retired by rotation as follows: 1. Mr. Joompol Meesook 2. Ms. Suwanna
Buddhaprasart 3. Mr. Thaveevat Tatiyamaneekul and 4. Mr. Chanin Roonsamrarn. The Nomination and Remuneration Committee,
having considered in accordance with the criteria of selection, viewed that all 4 directors have the qualifications required
according to the Public Limited Company Act B.E. 2535 and also have knowledges, abilities, and experiences in business relating
to the Company’s operation. In this regard, such matter has been proposed through the resolution of the board of directors of
the Company in order to be presented as an agenda in the Annual General Meeting of Shareholders of 2010 in which the meeting,
then, has approved to re-appoint the said directors to their office for another term.
Roles and Responsibilities of Managing Director
As resolved in the Board of Directors Meeting no. 7/2544 on 21st June 2001 and the Board of Directors Meeting
no. 9/2544 on 16th August 2001, the Managing Director who has authority to manage the Company as assigned by the Board
of Directors and shall strictly and carefully manage the Company according to the framework or budget approved by the Board
of Directors, and maintain the best interest of the Company and shareholders. Authorization of the Directors also covers other
matters as follows:
1. Daily Operation and, management of the Company.
2. Approval of expense on operation, expense of selling and administrative and capital expenditure according to the budget
approved by the Board of Directors, however, not including the loan and guarantee.
3. Filling the post, appointing, removing, relocating, promoting, reducing or cutting salary or wages, disciplinary punishmen
to the staff and employees, and order the staff and employee to leave from position according to the regulations as
stipulated by the Board of Directors.
28
4. Other operation as assigned by the Board of Directors, by having following authorities:
• Having authority to administrate under the objectives, regulations, policy, rules, order, and resolution of the Board
of Directors meeting and the resolution of the Shareholders Meeting.
• Having authority to operate and enter into juristic act, agreement, order or any letter for contacting with the government
authority, State Enterprise, and other person, including authorities to act as necessary and proper in order to succeed
on the above mentioned acts.
• Having authority to appoint other person to be proxy to act on specific work, which must be under the rules, regulations,
or order that the Board of Directors or as imposed by the Company.
However, the Managing Director is unable to approve transaction that himself or person who may have conflict of interest
in any other ways with the Company or its subsidiary.
Secretary of the Company
On 20th March 2008, the Board of Directors has resolution to appoint Ms. Wannee Juntamongkol as the Secretary
of the Company in order to comply with the “Securities and Stock Exchange Act (4th Issue) B.E. 2551”. The Company
has already notified the name and place to retain documents of the Company to the Securities and Exchange Commission
on 26th August 2008.
Authority of Secretary of the Company
1. Facilitate for activities of the Board of Directors.
2. Follow up and coordinate with relevant person in order to be in compliance with the resolution of the Board of Directors,
and closely report the result of such operation.
3. Arrange and maintain documents as follows:
• Director registration.
• Notice calling for the Board of Directors Meeting, Minutes of the Board of Directors Meeting, and the Annual Report
of the Company.
• Notice calling for the Shareholders Meeting and Minutes of the Shareholders Meeting.
4. Maintain the report on interests which have been reported by the directors or executives.
5. Manage other matters as stipulated by the Capital Market Supervisory Board.
3. Management as December 31, 2010 consists of:
Name - Surname
Position
Department
1.
Mr. Khunawut
Thumpomkul
Managing Director
2.
Mr. Vathunyu
Visuthikosol
Business Development
3.
Mr. Anuchar
Jitjaturunt
Merchandising - Hard Line and International Business
4.
Ms. Jarusopha Thumkathikanon
Merchandising - Soft Line
5.
Ms. Tharathip
Trimankhong
International Purchasing and Sanitaryware and Tile product
6.
Mr. Weerapun
Ungsumalee
Operation
7.
Ms. Jariya
Sorathorn
Merchandising - Home Electric Product and The Power
8.
Mr. Nat
Jaritchana
Marketing
9.
Mr. Chaiyuth
Karunyasopon
Distribution Center
10. Mr. Hanchai
Laowpanitchakorn
Information Technology
11. Mr. Nitat
Aroontippaitoon
Human Resource and Loss Prevention
12. Ms. Wannee
Juntamongkol
Accounting, Treasury and Legal
29
30
-
(DAP) 2004
** At the present, Mr. Apichat is the director
competing with the Company.
companies which are not doing business
of 1 listed company and 2 non-listed
Director Accreditation Program
- Thai Institute of Directors Association
- MBA, University of Southern California
and Remuneration Committee
Director and Nomination
(DCP) 2008
Director Certification Program
-
-
1999 - Present
2001 - Present
1992 - 2010
1993 - 2010
1994 - 2010
Director
Director
Director and Nomination
Director
Chief Executive Director
Director and Advisor of President and
Director
Director
Director
1995 - 2010
(DAP) 2004
Director
Director
1997 - 2010
Director
Director
Director
2004 - 2010
- BS.CE, F.E.U., Philippines
** At the present, Mr. Joompol is the director
for the Company only.
2006 - 2010
2001 - Present
- BS.ARCH, F.E.U., Philippines
53
0.03
Co., Ltd
Millennium Microtech (Thailand)
Pine Bridge (Thailand) Limited
Q.H Management Co., Ltd
Quality House Plc.
Casa Co., Ltd.
Quality Construction Products Plc.
Q.H. International Co., Ltd.
Harbourview Co., Ltd
Q.H. International Co., Ltd (BVI)
Q-Con Eastern Co., Ltd
Centre Point Management Co., Ltd
Q.H. International Co., Ltd.
Director
- MBA Thammasat University
Quality Houses Plc.
Director President and Chief Executive Officer
Banpu Plc.
Land and House Retail Bank Plc.
IRPC Plc.
LH Financial Group Plc.
(DCP) 2005
Chairman of the Executive Director
Director and
Audit Committee’s Director
Executive Director
Chairman of the Compensation Committee
2001 - Present
2005 - Present
2006 - 2009
Director, Chairman of the Nomination
and Remuneration Committee and
Quality Houses Plc.
Bangkok Chain Hospital Plc.
Q-Con Eastern Co., Ltd.
Company Name
(DAP) 2003
Kasetsart University
2009 - Present
2001 - Present
Director
Mr. Joompol Meesook
3 listed companies and 3 non-listed
** At the present, Mr. Rutt is the director of
62
Hays, Kansas, USA.
- Bachelor Degree of Science
Chairman of the Nomination and
- M.S. in Business Ad.,
Fort Hays Kansas State University,
Chairman of the Board of Directors
Director
1983 - Present
1985 - Present
1994 - Present
2004 - Present
2005 - Present
1995 - Present
Position
(DCP) 2004
-
-
During
Experience in 5 years
and Chief Executive Officer
-
0.15
ProporFamily
tional relationship
of share in with the
Company manage%
ment
As of December 31, 2010
Chulalongkorn University
- Bachelor of Civil Engineering
Illinois Institute of Technology, USA
- M.S. Industrial Engineering,
- M.B.A. Thammasat University
Education
Director Executive Director and
of 5 listed companies and 7 non-listed
** At the present, Mr. Anant is the director
63
60
Chairman
Age
Name - Surname
Bord of Directors Information
Semiconductor packaging
Investment consultant
Home improvement retailing
Project after-sale service
Property development
Construction supplies manufacturing
Hotel in overseas
Overseas property development
Building management
Building management
Energy
Financial institution
Energy
Hospital
Construction supplies
Type of Business
31
the director for the Company only.
** At the present, Mr. Khunawut is
Managing Director
Director, Executive Director and
companies which are doing business
** At the present, Mr. Naporn is the director
companies which are doing business
53
Director
2000 - Present
Director
Director and Senior Vice President
Director
(DCP) 2001
Development Administration
- MBA National Institute of
(DAP) 2004
1995 - Present
1994 - Present
1994 - Present
Managing Director
Director, Executive Director and
Director
Director
Director
1995 - 2004
1995 - Present
2002 - Present
2005 - Present
Director
2001 - 2010
1995 - Present
Chairman of the Executive Committee
Director
Director
Director
Chairman of the Executive Committee
Bangkok Chain Hospital Plc.
Assets Plus Securities Plc.
Land and House North Co.,Ltd.
Land and House North-East Co.,Ltd.
Land and House Plc.
Rangsit Plaza Co., Ltd
Thananonsee Co., Ltd
USI Holding Co.,Ltd.
Phuket Patong Club Co.,Ltd.
Phuket Resort Club Co., Ltd.
R. L. P. Co.,Ltd.
The Confidence Co., Ltd.
Director
Director and
Q.H. International Co., Ltd
Quality House Plc.
Q.H. Management Co., Ltd
Casa Ville Co., Ltd.
Idea Fitting Co., Ltd.
Company Name
Director
Director and Senior Vice President
Director
Director
Director
Director
Director
Position
2001 - Present
2002 - Present
2003 - Present
2000 - Present
2000 - Present
2003 - Present
2005 - Present
2010 - Present
2003 - Present
Director
-
-
-
-
(DCP) 2005
1.41
-
3.11
-
During
Chiangmai University
- Bachelor of Civil Engineering
- MBA Thammasart University
(DAP) 2004
- Secondary
(DAP) 2004
(DCP) 2007
- MBA Chulalongkorn University
Education
** At the present, Mr. Manit is the director
52
66
56
Age
Director and
Mr. Manit Udomkunatum
** At the present, Mrs. Suwanna is the director
Director
Name - Surname
ProporFamily
tional relationship
Company manage%
ment
Hospital
Mutual fund
Department store
Holding
Holding
Hotel
Hotel
Holding
Building management
Project after-sale service
Interior design and Furnished
Type of Business
32
Chairman, Chief Executive Director
Independent Director, Audit Committee and
Chairman of Executive Dirctor
Independent Director and Audit Committee
Chairman
company which are not doing business
The Role of Chairman (RCM) 2002
1986 - Present
1996 - 2009
Nomination Committee
Remuneration Committee and
Independent Director, Audit Committee,
Remuneration and Nomination Committee
Independent Director, Audit Committee and
Remuneration Director
Director, Human Resource and
Director and Chief Executive Director
2003 - Present
(DCP) 2002
2002 - 2009
2005 - Present
1989 - Present
2001 - Present
1996 - 2009
2001 - Present
Asian Property Development Plc.
Director
Thai Reinsurance Plc.
The Siam Industrial Credit Plc.
Insurance Plc.
The Siam Commercial Samaggi
SICCO Advisor Co., Ltd.
SICCO Securities Plc.
Star Fashion (2008) Co., Ltd
Tokyo Leasing
Insurance
Insurance
Financial advisor
Securities
Apparel manufacture and distributor
Leasing
Crown cap manufacturing
Crown seal Plc.
Director
1990 - Present
Sammakorn Plc.
Hotel
Soft drink distribution
Type of Business
Rojana Industrial Park Plc.
Director
1994 - Present
Tararom Enterprise Plc.
Shangri-La Hotel Plc.
Director
Director
Chairman of the Board of Director
Thai Namthip Ltd.
Company Name
1994 - 2010
1996 - Present
Director
Chairman of the Board of Director
** At the present, Mr. Chanin is the director
-
1995 - Present
2000 - Present
Position
-
-
-
-
During
Kansas, USA.
-
-
0.22
ProporFamily
tional relationship
Company manage%
ment
Audit Committee and Nomination
Independent Director,
ness competing with the Company.
listed company which are not doing busi-
- MBA, Fort Hays State University
(DAP) 2004
director of 1 listed company and 1 non-
** At the present, Mr. Thaveevat is the
62
- Primary
Audit Committee
the director for the Company only.
(DAP) 2004
- Ph.D. In Agricultural Technology
- Ph.D. (Hon.) Business Administration
Education
65
76
83
Age
** At the present, Mr. Apilas is
** At the present, Mr. Pong is the director
Mr. Pong Sarasin
Name - Surname
33
46
47
51
50
48
52
50
52
46
45
46
Mr. Anuchar Jitjaturant
Ms. Jarusopha Thumkathikanon
Ms. Tharathip Trimankhong
Mr. Weerapun Ungsumalee
Ms. Jariya Sorathorn
Mr. Nat Jaritchana
Mr. Chaiyuth Karunyasopon
Mr. Hanchai Laowpanitchakorn
Mr. Nitat Aroontippaitoon
Ms. Wannee Juntamongkol
Age
Mr. Vathunyu Visuthikosol
Name - Surname
Business Administration of
- MBA, Sasin Graduate Institute of
Development Administration
0.06
-
2004 - Mar 2005
Mar 2005 - Present
2005 - 2010
Finance Director
Vice President - Internal Audit
Service Manager
2010 - Present
2002 - 2004
-
SAP Consultant & Trainer
2004 - 2005
- MBA National Institute of
Project Manager (IT)
SAP Manager
2005
0.06
Operation & IT Director
2002 - 2004
GM - Contract Logistics
2005
2007 - Present
GM - Contract Logistics
2006 - Jun 2007
Vice President - Marketing
Jul 2007 - Present
1999 - 2005
Vice President - Operation
2006 - Present
Vice President - The Power
2002 - 2005
Director
2005 - 2007
Sep 2007 - Present
2001 - Sep 2005
Sep 2005 - Present
2000 - Present
2003 - Present
2002 - Present
2002 - Present
Position
-
-
-
-
-
-
-
-
-
During
2006 - 2007
0.02
0.01
0.08
0.07
0.04
0.24
0.07
0.14
0.08
ProporFamily
tional relationship
Company manage%
ment
As of December 31, 2010
and Accountancy,
- Bachelor of Faculty of Commerce
Ramkhamhaeng University
- Bachelor of Faculty of Finance,
- MBA, Kasetsart University
in Social Work, Thammasat University
- Master’s Degree Program
Asian Institute of Technology
- Master of Engineering,
- Junior High School
of Commerce
The University of The Thai Chamber
- Bachelor of Faculty of Economics,
Business Administration of
- MBA, Sasin Graduate Institute of
- MBA, Georgia State University, USA.
Education
Management Information
Thainox Stainless Plc.
Microsoft (Thailand) Ltd.
-
Standard Chartered Bank
DKSH (Thailand) Co., Ltd.
Davids Distribution (Thailand) Ltd.
Excel Logistics (Far-East) Ltd.
DHL Exel Supply Chain Thailand
Solution Delivery
Company Name
Stainless steel producer
Computer software
Computer software consulting
Commercial bank
Consumer goods wholesale
Logistics services
Logistics services
Logistics services
Computer consulting
Type of Business
Detail of Directors and Management who are Authorized to Control Subsidiary
Name - Surname
Market Village Co., Ltd.
(Subsidiary)
1.
Mr. Anant
Asavabhokhin
2.
Mr. Rutt
Phanijphand
Director
-
3.
Mr. Joompol
Meesook
Director
-
4.
Mr. Apichat
Natasilpa
Director
-
5.
Mrs. Suwanna
Buddhaprasart
Director
-
6.
Mr. Manit
Udomkunnatum
Director
-
7.
Mr. Naporn
Director
-
8.
Mr. Khunawut
Thumpomkul
Director and Managing Director
9.
Mr. Pong
Sarasin
-
10. Mr. Apilas
Osatananda
-
11. Mr. Thaveevat
Tatiyamaneekul
-
12. Mr. Chanin
Roonsamrarn
-
13. Mr. Vathunyu
Visuthikosol
Director
14. Mr. Anuchar
Jitjaturunt
-
15. Ms. Jarusopha Thumkathikanon
-
16. Ms. Tharathip
Trimankhong
-
17. Mr. Weerapun
Ungsumalee
-
18. Ms. Jariya
Sorathorn
-
19. Mr. Nat
Jaritchana
-
20. Mr. Chaiyuth
Karunyasopon
-
21. Mr. Hanchai
Laowpanitchakorn
-
22. Mr. Nitat
Aroontippaitoon
-
23. Ms. Wannee
Juntamongkol
Director
24. Mr.Thee
Phromphol
-
Director
Remark: Mr. Thee Phromphol has retired from work since 1 January 2011, and the Company has appointed Mr. Nitat Aroontippaitoon to replace him.
Remuneration for the Directors and the Executives
1. Remuneration for the Directors
Basis of remuneration for the Directors are remuneration for giving advice on any matters to working team of the Company
and fees for the meeting, which the Company normally has at least the Board of Directors Meeting once a month,
and the Meeting of sub-committees, i.e. Audit Committee Meeting, Executive Committee Meeting, Nomination and
Remuneration Committee Meeting.
The Nomination and Remuneration Committee and the Company’s board of directors have considered to specify
the remuneration for directors by relying on the Company’s overall operating results, the payment of dividends to shareholders,
obligations and responsibilities of each committee. For the criteria of remuneration payment, the Company will base on the same
criteria as used for the payment of the director’s remuneration of the Company which operates in the same type of business.
On 7th April 2010, the Shareholders Meeting of 2010 has a resolution to grant the annual remuneration not exceeding
Baht 12 million and pension to the directors not exceeding Baht 11 million. Details of remuneration payment are as follows:
1. Monthly Remuneration
34
•
Chairman
Baht 70,000 / person / month
•
Director
2. Remuneration for Meeting
for the Board of Directors Meeting and Sub-Committee Meeting which shall be paid
according to the number of meeting attendance.
•
Chairman
•
Director
Meeting Allowances
Name – Surname
1. Mr. Anant
Asavabhokhin
2. Mr. Pong
Board of
Director
Executive
Director
Audit
Committee
Nomination and
Remuneration
Committee
Pension
Total
(Baht)
1,015,000
-
-
-
1,692,308
2,707,308
Sarasin
570,000
-
-
-
846,154
1,416,154
3. Mr. Rutt
Phanijphand
585,000
180,000
-
75,000
846,154
1,686,154
4. Mr. Joompol
Meesook
600,000
-
-
-
846,154
1,446,154
5. Mr. Apichat
Natasilapa 1
600,000
-
-
45,000
846,154
1,491,154
6. Mrs. Suwanna
Buddhaprasart
600,000
-
-
-
846,154
1,446,154
7. Mr. Manit
Udomkunnatum
570,000
275,000
-
-
846,154
1,691,154
8. Mr. Naporn
585,000
135,000
-
-
846,154
1,566,154
9. Mr. Khunawut
Thumpomkul 2
600,000
180,000
-
-
846,154
1,626,154
10. Mr. Apilas
Osatananda
600,000
-
300,000
-
846,154
1,746,154
11. Mr. Thaveevat
Tatiyamaneekul
585,000
-
180,000
-
846,154
1,611,154
12. Mr. Chanin
Roonsamrarn
600,000
-
180,000
45,000
846,154
1,671,154
7,510,000
770,000
660,000
165,000
11,000,000
20,105,000
Total
Remark : 1. Mr. Apichat Natasilapa, an authorized person of the American International Assurance Company Limited, received remuneration in the name of
Pine Bridge (Thailand) Limited.
2. Mr. Khunawut Thumpomkul, holding the position of Director and Managing Director, received compensation as the meeting allowance and Director’s
fee. However, salary and bonus were included in the remuneration of the Executive.
2. Remuneration for the Executives
The Company has criteria on the making of payment of the remuneration to the Executives by considering from
knowledge, capability, experience, and performance, and by comparing with other companies in the same industry.
Remuneration of 12 Executives for the year 2009 and 2010 consisted of salary, bonus, and other remunerations for the
total amount of Baht 50.3 million and Baht 54.9 million respectively. Moreover, the Executives of the Company have also
received other remunerations in form of warrant to buy ordinary shares of the Company.
Human Resources
Detail of numbers of employee during year 2008 - 2010.
Number of Employees
31 Dec 2010
31 Dec 2009
31 Dec 2008
Head Office
1,547
1,420
1,232
Branches
4,426
3,849
3,662
Total (persons)
5,973
5,269
4,894
40
36
35
Number of Branches
Remark: The number of employees in each year already includes some of employees of the branches which will be opened next year.
On December 31, 2010, the Company had a total of 5,973 permanent employees with related expenses of
Baht 1,786 million.
35
Corporate Governance
The Board of Directors realizes the importance of Corporate Governance and believes that the good Corporate Governance
is the crucial factor for business operation, in order to efficiently and effectively manage the business to have stability, continuous
growth and fairness to all stakeholders. From such reasons, the Board of Directors stipulates the Corporate Governance Policy,
having content covering the important principle on the rights of shareholders, equitable treatment to shareholders, considering
to the roles of interest person, disclosure of information and transparency, and responsibility of the Directors, in order to be
guideline for managing business to achieve the company’s objectives and goal that have been set according to business
policy sticking to correctness and transparency. The policy of Corporate Governance of the Company is disclosed at
www.homepro.co.th/ir/investor_th.html
1. Rights of Shareholders
The Board of Directors of the Company gives the importance to the right of shareholders by not performing any act that violates
or lessens the rights, and to facilitate the exercise of rights on various matters. It is then the guideline of operation is set in order to
ensure that shareholders that they will be protected under the basic rights as follows:
•
The Company gives an opportunity to the shareholders to propose agenda and propose the name list to be appointed as
directors, including to pass question about the Company in the shareholders meeting in advance, which the company has
notified the rules and supplementary documents on the web site of the Company since 1st December 2010. However,
shareholders may submit such question until 31st January 2011.
•
The Company has delivered the notice calling for the meeting with information, documentation supplement to each
agenda with proxy to shareholders 7 days prior to the meeting date, or as stipulated by law of both Thai and English
language, including the Company’s Articles of Association in relation to the Shareholders Meeting and casting of vote.
•
In case the shareholders are unable to attend the meeting, they may give proxy to the Independent Directors in
casting the vote instead or may indicate their own vote. In 2010, the Company has arranged for Mr. Chanin Roonsamrarn
to be the proxy director.
•
Prior to the meeting commencement, the Board of Directors will explain to the shareholders to acknowledge the rights
under the Articles of Association of the Company, the proceeding of the meeting, casting the vote, including the giving of
the rights to shareholders to raise questions and express opinion equally.
•
After the meeting, the Company will notify the meeting minutes to the Stock Exchange of Thailand (SET) within the time
frame specified by the SET, together with detail of voting result in each agenda. Generally, the meeting minutes will be
reported to the SET within 14 days and also publicized it on web site of the Company.
2. Equitable Treatment of Shareholders
The Company, being aware of the importance, ensures that the every shareholder, whether executive shareholders,
non-executive shareholders, and foreign shareholders should receive equitable and fair treatment.
The Company has policy to prevent the use of inside information which is prescribed in the ethic handbook, and has disclosed
to staff, executive, and director of the Company. The policy and method to control executive in private use of internal information
of the Company are as follows:
•
Provide knowledge to executive in each department in relation to duty that executive shall report the holding of
securities of the Company and penalty under the Securities and Stock Exchange Act B.E. 2535 and under the regulations
of the Stock Exchange of Thailand.
•
The Company has required the executive to report the change of securities holding to the Office of Securities and Stock
Exchange Commission under Section 59 of the Securities and Stock Exchange Act B.E. 2535, and delivered copy of such
report to the Company on the same day as sending to the Securities and Stock Exchange Commission.
36
•
The Company has notified to the executive to restrain from the purchase and sale of securities of the Company 1 month
before disclosing of financial statements or inside information to the public, and the disclosure of material information to
other person is not allowed and such has been notified via e-mail every quarter.
However, if there is the violation of regulations mentioned above, the Company will proceed with discipline punishment as
appropriate as the case may be.
3. Roles of Stakeholders
The Company has stipulated the regulations for the interest person in the “Handbook of Business Ethic” of the Company in order
to ensure that the Company will comply with in order to provide the rights to interest person under the relevant laws, whether the
shareholder, staff, customer, business partner, community, society, and environment. Moreover, the Company has also strengthen
cooperation with the interest person in each groups in order to be able to ensure business sustainability with the fair benefits to all
parties, in order to build the long-term success.
Shareholder
Shareholders and interest person may file complaint, or communicate or notify matters relating to the Company through
the director or audit committee at www.homepro.co.th/ir/investor_th.html
•
Communication with the Director of the Company. In case requiring for notifying or communicating in relation to
operation of the Company, by such information will be sent to the Managing Director.
•
Communication with the Audit Committee. In case requiring for filing complaint in relation to violation of laws or
ethics, accounting doubt, internal controlling, etc. Such information shall be sent to the office of internal audit of the
Company in order to be compiled and proposed to the Audit Committee for further consideration.
Business Partner
The Company complies with the Trade Competition Act according to the resolution of the Trade Competition
Commission in year 2006, announced to be as Guideline for Unfair Trade Practices in the Wholesale/Retail Business by
virtue of the Trade Competition Act B.E. 2542.
To be able to operate business according to the above announcement, the Company has mutually agreed with
business partner to amend the provision of the agreement to be more specific and clearer.
Employee
The Company realises that the employees are significant resource for achieving the business goals. The Company
cannot sustain and grow with strength if the personnel have not been developed and promoted. In order to achieve the
vision and commitment of the Company, the Company has a clear and determined policy in the development of personnel
by supporting and developing all personnel to have quality, knowledge and ability up to highest capability of them, and to grow
simultaneously with the Company. The Company’s personnel shall have their opportunity and get support to learn and
to develop to be a good capable and decent person, to have higher effectiveness, and to be ready to take any change in
the future. This also includes the policy to provide the fairness on compensation, career advancement, promotion and transfer,
in which, throughout the time, the Company has looked after its employees on significant issues as follows:
1. The Company has looked after its employees by ensuring that they receive fair and appropriate compensation based
on their duties and responsibilities and also be able to compete in the labor market. Moreover, the Company has
provided welfares such as annual physical check-up, medical treatment fee, accident insurance, employee uniform,
emergency fund assistance in case of natural disaster and has also arranged for activities to enhance the happiness
in their working life i.e. “HomePro Jai Aar Sar” Program which encourages the employees to join activities for providing
benefits to community, to arrange for company sport competition, to arrange for the merit making ceremony in their
own month ot birth etc.
37
2. Providing the provident fund in order for the employees to have saving for retirement.
3. The Company gives the importance to the developing of knowledge, all kind of capabilities of staff for knowledge
on products, standard on work performing, providing service, management, including attitude and team work. The
Company has promoted its staff as follows:
• Allocating budget in personnel development appropriately and sufficiently for employees at every level.
• Teaching and Learning course have always been updated.
• Set up the DIY workshop center, having knowledge skilled expert and in each group of products.
• Set up Learning Center to each branch for new staff for self learning
• Having the Individual Development Program in order to develop personnel as the Talent Group to be promoted
to the higher position, to be ready to support the expansion of the Company.
• Promote the personnel to pursue education in the bachelor and master degree, and set up scholarship for
studying English language in order to increase efficiency of personnel to be able to perform their work more
effectively.
Customer
The Company aims to operate business on the basis of highest satisfactory of customer and in order to operate according
to the objectives, the Company has policy and procedures to customer as follows:
1. Strictly deliver goods and provide service under the conditions as agreed with customer. In case of the inability to
comply with the conditions, the Company will notify customer in order to find the solution.
2. Giving information and suggestion about the products and services, including relevant commercial terms correctly,
completely, not exaggeratedly which may cause misunderstanding to the customer.
3. Giving opportunity for customer to suggest or complain about the products and services, including servicing of staff
or any inconvenience that customer has experienced via website; www.homepro.co.th/cs/ccm.asp
Community, Society and Environment
The Company has a policy to support social activity by creating projects that may benefit the community and society
as follows:
1. “Computer Lab Construction” project, provides primary school students an opportunity to learn via the internet.
In 2010, HomePro provided computers together with equipment installation to Baan Boong Toey School, Mhoo Si
sub-district, Pak Chong district, Nakhonratchasima Province.
2. “The Kids’ Toilet” project, received cooperation from the Department of Health, the Ministry of Public Health, and the
Office of the Basic Education Commission, the Ministry of Education to examine the standard and provide additional
improvement till most of the toilets in the project passed the national standard or HAS (Healthy Accessibility and
Safety). At the end of 2010, HomePro contributed a total 745 restrooms to 60 schools in 16 provinces nationwide.
3. “HomePro helps reduce global warming” project, it was started in 2009 under the objective of Avicennia marina
and Lampu forestation of 100,000 trees within 3 years at BangPu Education Center of the Royal Thai Army in Samut
Prakarn Province.
4. “Flood Victim Support”, regarding the flood situation in 2010, the Company along with business alliances had
offered a discount on the products that victims need to rebuild/ repair their homes. Furthermore, donations are
made to help victims and invited our customers to donate at HomePro’s branches nationwide.
38
4. Disclosure and Transparency
The Board of Directors has given the importance to the disclosure of information which are accurate, complete, transparent,
in timely manner, and equitably distributed to the investor and stakeholders to acknowledge, of both financial reports and material
information that affect the value of the Company’s Securities which will be disclosed through the publication of the Stock Exchange
of Thailand and web site of the Company.
The Company has the Investor Relationship office to be responsible for giving information and hearing to opinion of shareholders and investor regularly, by contacting Mr. Rakpong Aroonwatdhana, Tel. 02-832-1416 or via e-mail at [email protected]
Furthermore, the Company has also specified the opportunity to communicate and activities between shareholders, investors and
high rank executive of the Company, apart from the Annual Shareholders Meeting as follows:
Web Site
The Company has presented the operational result, annual report, annual transactions information
56-1 form, minutes of shareholders meeting, news about the Company, news notified to the Stock
Exchange, webcast, documentations supplemented to the analyst meeting and contact channel, and
also distribute information of the Company in relations to Corporate Governance, Board of Directors
and Executives Chart, shareholding structure. To facilitate and provide equal opportunity in searching
information, such have been prepared in both Thai and English version.
The shareholders, investors, and interested person of the Company may express opinion and propose
additional agenda to the meeting and propose the person who has qualification to be the director
before the Company will send a notice calling for the meeting through web site.
Analyst Meeting
The Company has arranged for the meeting for the analyst and investors, including shareholders
who are interested in disclosing the operational result on every quarter for 4 times in 2010.
One on One
All through 2010, the Company opened the opportunity to analysts, shareholders and institutional
meeting and
investors both domestic and international to meet with the executives of the Company, including
Company visit
conference calls, in order to answer the questions relating to the operations of business for the total of
78 times, and also had the opportunity to welcome group of people for their company visit of 4 times.
Road Show
In 2010, the Company attended the conference and Road show as arranged of both domestic and
international totaling 11 times as follows,
1. Having met foreign investors as arranged by Financial Institution in Thailand for 3 times
2. Joining the Conference and Roadshow in England, Singapore, Malaysia and Hong Kong for 8 times.
Press Conference
The Company has made the press conference twice about the annual report on business operation
and Media
in 2009 and direction to operate business in 2010, and report the result of operation for the first
Relationship
6 months of 2010 to the media. At the same time, the Company has as well prepared the Press
Release for the media.
Besides, Mr. Khunnawut Thumponkul, Managing Director of the Company has given his interview
to television program of Money Channel, and other medias in the matter relating to industrial trends
and the business direction of the Company. And, also he joined as a co-lecturer to student taking
the course of TLCA Executive Development Program (EDP), the 6th Class, organized by the Thai
Listed Companies Associations, the Stock Exchange of Thailand and Capital Market Academy on
15 October 2010.
39
5. Board Responsibilities
Board of Directors of the Company consists of 12 persons as follows:
1. 4 Executive Directors
2. 4 Non-Executive Directors
3. 4 Independent Directors in which 3 of 4 directors are in the position of Audit Committee.
Responsibilities
The Board of Directors has participated in determining the Company’s policy, goal, business plan, and budget of the Company,
as well as ensuring that the management has operated according to the plan and budget with efficiency and effectiveness.
The Chairman of the Company, President of Executive Committee, and Managing Directors of the Company are not the same
persons. Moreover, there are obviously separation of roles and duty to control and management, in order to balance the power
and create transparency for work performing.
The Company has appointed the Audit Committee who are Independent Directors to review the accuracy, sufficiency of
the disclosure of information and the reliability of financial report, Corporate Governance and internal control of the Company which
have details of obligations as specified in “Clause 9 management of duty of the Audit Committee”.
In case there was transaction that was not under normal course of business of the Company, the Board of Directors of
the Company has duty to consider such transaction, in which there shall be Independent Director in the meeting as well.
The Company has the Nomination and Remuneration Committee to set the procedures and rules on selecting the Director of
the Company, and set the period of remuneration or other benefits which is fair and reasonable and present to the shareholders
meeting for consideration.
To promote every parties to perform their duty according to assigned responsibility with transparency, the Company has
prepared the policy of Corporate Governance, handbook of ethic, and code of conduct on ethics of Directors, the management,
and staff in order for the relevant persons to comply with the guideline in performing assignment of the Company honestly, and
to follow up with the compliance of the guideline regularly, including to stipulate discipline penalty.
First orientation and giving knowledge in the business of the Company to the new Director
The Company has policy to provide the first orientation for the new directors, in order to acknowledge the roles, duty, and
responsibility, including giving knowledge, understanding of business and operating in any part of the Company, which is to prepare
the readiness to perform duty of the Directors. Due to the Company has no new Directors in 2010, there was no arrangement of
such first orientation.
The Board of Directors Meeting
The Board of Directors of the Company and Executive Directors shall have regular meeting every month and may have special
extra meeting as necessary. There shall be fixing the date and time of the meeting in advance for the whole year, and there shall
be sending of the notice calling for meeting with agenda of the meeting approximately 7 days in advance for the Directors to be
prepared.
In 2010, the Company had 12 times of Board of Directors Meeting and the meeting of Sub-Committee i.e. 12 times of
Executive Directors meeting, 12 times of Audit Committee meeting, and 3 times of Nomination and Remuneration
Committee meeting, details of attending the Board of Directors meeting and other sub-committee meetings are as follows:
40
Attendance / Number of all meetings (times)
Name – Surname
1. Mr. Anant
Board of Directors
Asavabhokhin
Executive Directors
Audit Committee
7 / 12
2. Mr. Pong
Sarasin
10 / 12
3. Mr. Rutt
Phanijphand
11 / 12
4. Mr. Joompol
Meesook
12 / 12
5. Mr. Apichat
Natasilapa
12 / 12
12 / 12
3/3
3/3
6. Mrs. Suwanna Buddhaprasart
12 / 12
7. Mr. Manit
Udomkunnatum
10 / 12
11 / 12
8. Mr. Naporn
11 / 12
9 / 12
9. Mr. Khunawut
Thumpomkul
12 / 12
12 / 12
10. Mr. Apilas
Osatananda
12 / 12
12 / 12
11. Mr. Thaveevat Tatiyamaneekul
11 / 12
12 / 12
12. Mr. Chanin
12 / 12
12 / 12
Roonsamrarn
Nomination and
3/3
Evaluation of the work performance of the Managing Directors
The Company has the Nomination and Remuneration Committee to propose opinion to the Board of Directors of the
Company in consideration of setting the annual Key Performance Indicators (KPI) to be used in evaluation of work performance of
the Managing Director, such KPI shall be in accordance with the goal of the Company for both short term and long term.
Succession plan of the High rank of Executive
The Company has prepared the succession plan to prepare in the event the executive is unable to perform his duty, by
having initiatively structured the replacement of the low rank of executive in the level of branch manager already. The plan for
mid-level executive and high-rank executive are in progress, which this will to ensure that the operation of the Company
can be continued.
Risk management by Executive
The Company has policy of risk management, group of management shall jointly consider and analyze risk factors
both external and internal the organization, by having meeting every 2 weeks and following up the situation that is
a cause of risk closely, and notifying to the relevant staff for acknowledgement and to comply with the stipulated
measurement of risk management.
Forming the Internal Audit Department
In order to promote the procedures of good governance, the Company has formed an internal audit to review and followed
up the result of work performing to the Management, by performing its work independently, and reporting the result of the
operation to the Audit Committee directly and regularly.
Moreover, there was a proposal to appoint the auditor to evaluate efficiency of internal accounting control of the Company
which the resolution of the shareholders in 2009, approved to appoint the auditor from Ernst & Young Co., Ltd., by
Mrs. Gingkarn Atsawarangsalit, an auditor License number 4496 as the auditor of the Company and its subsidiaries for the
year 2010.
41
Internal Control
On February 16, 2011, the Board of Directors, Audit Committee and management evaluated the Company’s internal control
system. The evaluation was done on the following five criteria:
1. Organization and Environment
The Board of Directors opines that the Company has clear organization chart and has specified scope of authority,
responsibility of each department in writing, having specified clear target of business operation which is measurable, which
the setting of the target and work plan the management and each executive of each field of work have jointly considered and
set the business target and the strategy of operation by using the result of operation in the past years as the basic information.
It is then ensured to be properly and shall be able to achieve the target.
For our policy, operating regulation, and provision relating to ethics (Code of Conduct), the Company has specified such
in the business ethics manual in order for directors, executives, and employees in all departments to use as a guideline for operation.
Regarding this business ethics manual, the Company has provided such in consideration of relevant laws and regulations including
the effects which may occur to interested parties.
2. Risk Management
The Board of Directors opines that the group of executives has regularly considered and evaluated the risks that may affect
the result of operation of the Company, by specifying operation plan of every year and fixed to have meeting in every 2 weeks in
order to follow up the result of operation, and the risk factors closely for setting management method and for controlling the risk
to be at the acceptable level, and notified relevant staff to be aware of and to comply with the measurement of risk management.
3. Controlling
The Board of Directors opines that the Company has specified the scope of authority, approval credit limit of executive in
each level clearly in writing, and completely separate duty and responsibility for approval work, account booking and information
technology, and the looking after of property separately in order to examine each other. In case the Company has entered into
transactions with the major shareholders, director, executive, or relevant persons, the Company shall propose such transaction
through the Audit Committee Meeting and complete such transaction as if such were made with outsider.
4. Information Technology and Communication System
The Board of Directors opines that the Company has prepared the notice calling for the Board of Directors Meeting,
stating information and details of agenda to the meeting, including summary of information to the Board of Directors for
consideration of at least 7 days before the meeting, and has made the complete minutes of the Board of Directors meeting
which may be referable, and such can be used to examine the appropriateness in performing the duty of the Director.
The Company has selected the accounting policy that is generally accepted in accounting principle, and retained
documents supplement to records properly. The Company hired Brambles (Thailand) Co., Ltd., a document retaining company,
as the document keeper with the appropriate controlling system.
5. Mornitoring
The Board of Directors opines that the Company has added an agenda on monitoring the result of operation every month,
in order to notify to the Board of Directors and to propose suggestions for work performing. For operation plan and budget,
the Company will make and review them every half year.
The Company regularly conducts and audit by internal control system to ensure the compliance with the policy. There are
two levels of internal control and compliance policies; namely (1) self-inspection between inter- related departments according
to the good internal compliance; and (2) there are inspection and evaluation processes responsible by internal audit department.
The internal auditor must report directly to the Board of Directors or the Audit Committee so that the internal auditors can perform
their duties independently and accurately.
Apart from this, the Company’s auditor, Mrs. Gingkarn Atsawarangsalit, the auditor with certified license no. 4496 of
Ernst & Young Office Co., Ltd, as the auditor of the Company for the year end on December 31, 2010 has given her
comment on the assessment of the efficiency of the internal control of the Company’s accounting that no significant weak
points were found in the internal audit system on the accounting.
42
Dividend Policy
The Company has the policy to pay dividend to shareholders not less than 40% of the net profit of each year. However,
the consideration for dividend payment will take other factors into account such as result of operation and financial status of
the Company, Liquidity, Expansion of Business and other factors relating to the management of the Company. Each dividend
payment is required to obtain approval from shareholders and Board of Directors.
Dividend payment during 2008 – 2010 is as follows:
Dividend
2008
2009
2010
Baht per Share
0.35
1.161
0.1862
Remark : 1. The Company paid dividends from the 2009 profit totaling 1.16 Baht/share by dividing into the interim divided payment from
the first 6 months operation of 1 Bath/share consisting of cash dividend of 0.10 Baht/share and stock dividend at the rate of
10 existing shares per 9 stock dividend or equivalent to 0.90 Baht/share, according to the resolution of the Extraordinary General
Meeting of Shareholders No. 1/2009, and the dividend payment from the last 6 months operation of another 0.16 Baht/share
according to the resolution of the Annual General Meeting of Shareholders 2010.
2. October 29, 2010, the Company paid interim dividends at the rate of 6 existing shares per 1 stock dividend or equivalent
to 0.186 Baht/share by dividing into cash dividends at the rate of 0.0193 Baht/share and stock dividends at the rate of 0.1667
Baht/share according to the resolution of the Extraordinary General Meeting of Shareholders No. 1/2010.
Related Transaction
In 2010, the Company and its subsidiary had significant business transactions with related parties, which have
been concluded on commercial terms and bases agreed upon in the ordinary course of business between the Company
and those companies.
As of December 31, 2010 and 2009, the Company had outstanding balance with the related transaction, which can be summarized as follows:
Amount
Name of Company / Nature of relationship
Transaction
(Thousand Baht)
31 Dec 10
31 Dec 09
Audit Committee and
Management’s opinion
1. Land and Houses Plc. and subsidiaries
-
Being a major shareholder of the Company
Sales income
8,478
3,755
by holding 30.26% of total paid-up capital,
Account Receivable
2,363
432
Being a major shareholder of the Company
Sales income
3,021
617
by holding 20.38% of total paid-up capital,
Account Receivable
959
142
as of October 15, 2010.
-
With 2 co-directors
1. Mr. Anant Asavabhokhin
2. Mr. Naporn Soonthornchitcharoen
Such value was the
appropriate selling price
as it was the same as
the market price which
the Company sales to
the other manufacturers
or sellers.
2. Quality Houses Plc. and subsidiaries
-
as of October 15, 2010.
-
With 4 co-directors:
1. Mr. Rutt Phanijphand
Such value was the
appropriate selling price
as it was the same as
the market price which
the Company sales to
the other manufacturers
or sellers.
4. Mr. Joompol Meesook
43
Amount
Name of Company / Nature of relationship
Transaction
(Thousand Baht)
31 Dec 10
31 Dec 09
Audit Committee and
Management’s opinion
3. Land and Houses Retail Bank Plc.
-
With 2 co-shareholders:
Interest income
1. Land and Houses Plc.
Deposit with financial
2. Quality Houses Plc.
-
institution
5,703
1,809
1,196,575
677,977
547
1,411
2. Mr. Rutt Phanijphand
The Company received
the interest with the
same rate as other
customers of the bank,
such rate was a normal
rate of other banks and
financial institutions.
4. Quality Construction Products Plc.
and subsidiaries
-
Land and Houses Plc. is the co-shareholder.
Purchase of goods
-
Other Receivable
3
3
Trade Accounts Payable
-
162
17,645
17,918
3. Mr. Joompol Meesook
Such value was the
appropriate purchase
price because it was
the same market price
which the Company
could purchase from
other manufacturers or
sellers.
5. Quality Houses Property Fund
-
With 2 co-shareholders
1. Quality Houses Plc.
2. Land and Houses Plc.
44
Rental and service
expenses
Other Payable
1,436
1,302
Rental guarantee deposit
3,000
3,000
Such value was
generated from the
transactions of rent
and services fee
for the space in the
Wave Place building.
The Audit Committee
opined that such price
was calculated from the
appropriate rate.
Necessity and Appropriate Reason of Transaction
The connected transaction made was necessary and reasonable to create the highest benefit to the Company. The
Audit committee concluded that such was in accordance with business and the general ordinary course of received and
paid consideration by and from the Company was fair.
Measure/Procedure of Approval of Connected Transaction
The connected transaction being made at present and expectedly in the future, e.g. sales of goods to Land and Houses
Plc. and Quality Houses Plc., purchase of goods from Quality Construction Products Plc., renting space in the Wave Place
building of Land and Houses Property Fund and Deposit transaction with Land and Houses Retail Bank Plc.
For the sale of goods transaction, the Company determined the price according to the market price which was the
price that buyer could buy them from other manufacturers or sellers. Generally, the specification and price of goods would be
determined earlier. For the purchase of goods transactions, the Company purchased them at the market price which it could to
purchase from other manufacturers or sellers. The Audit Committee considered the connected transactions and concluded that
the Company received and paid remuneration in the fair price according to the general ordinary course of business.
Policy or Tendency of Inter-Transaction
The Company has policy to specify the trade conditions for entering into inter-transaction to be as normal business
operation. Price of products to be sold shall be prescribed at the level that can be competed to other vendors.
As for Inter-transaction that may be occurred in the future, the Board of Directors shall comply with the laws on
Securities and Stock Exchange, and Regulations, Announcement, Order, or Regulations of Stock Exchange of Thailand, and
including compliance with the regulations on disclosure of information of connected transaction and acquiring or disposing of
material assets of the Company or the Subsidiary.
However, if there will be inter-transactions of the Company or its subsidiary occurred to person who may have conflict of
benefit, or may have conflict of interest in the future, the Company shall have the Audit Committee give the opinion on necessity
and appropriateness for such transactions. In case the Audit Committee is not skillful in considering the inter-transactions that
may be occurred, the Company shall arrange for an Independent expert or auditor of the Company to give opinion on such
inter-transactions in order to bring such information to supplement for the decision making of the Board of Directors or
shareholders as the case may be. However, the Company shall disclose inter-transactions in the note of the financial
statement audited by the Auditor of the Company.
45
Financial Analysis and Business Operation Results
Overview of Business Operation Results
Although the economic situation throughout the year 2010 had confronted many unfavorable factors such as uncertainty
of the world economy, local political instability, fluctuation of the Thai Baht and fund flow, and several natural calamities, the Thai
economy expanded by more than 7% due to the increase of export and services which was in line with the economic recovery of
important trading partner countries as well as the continuous recovery of the local demand. All of these factors had shown their
effects in the second half of the year.
The overall retail business in 2010 had a fair expansion which followed the better economic situation, more stable political
situation, the government’s economic stimulus policy, and salary increase of all government sectors. As a result, the consumers
had regained their confidence in the economy, employment, and future income.
The Company, however, has closely kept abreast of the economic and political situation in order to plan and find measures
and strategies to prevent the risks that may occur, and to operate the business so as to successfully reach the planned target.
For the Company operation result in 2010, sales, total revenues and net profit are still growing from the previous year due
to many driving factors such as an increase in the number of branches, same store sales growth, sales of new stores, efficiency
of inventory management, revenues from space rental business, and revenues from HomePro Expo etc.
Operating Result
Comparing the results of operation for the year ended 31st December 2010 to the same period of year 2009.
1. Revenue from Sales
In 2010, the Company and its subsidiary generated revenue from sales of Baht 24,072.76 million, increased
from the previous year by Baht 3,743.64 million or 18.42%. The increase was mainly driven by the same store sales
growth, sales of the newly opened branches in 2010, and sales from HomePro EXPO in the 1st and 4th quarter of
the year.
2. Other Revenues
In 2010, the Company and its subsidiary generated other revenues of Baht 1,842.15 million, increased from 2009
by Baht 372.17 million or 25.32%. The proportion as percent to sales increased from 7.23% to 7.65%. The details of
increase are as follows:
• Revenue from rental and service, increased by Baht 83.46 million, from space rental revenue of HomePro
Village branch and HomePro EXPO No. 11 and 12.
• Other Revenues, increased by Baht 288.71 million, revenue from advertising fee, support fee of promotional
activities from business partners, service fee related to sales of goods.
3. Cost of Sales and Gross Profit Margin
In 2010, the Company and its subsidiary had the cost of sales of Baht 18,052.22 million, increased from the
previous year by 2,657.15 million or 17.26%, which was the result of the increase of sales.
The Company had gross profit of Baht 6,020.53 million, increased from the previous year of Baht 1,086.49 million.
The gross profit margin as percent to sales was 25.01%, moved up from the previous year of 24.27%.
The increase of gross profit was a result of the increase in efficiency of inventory management system as well as
the increase in volume discount of order in the large quantity. As a result, the increase rate of cost of good sold is less
than the increase rate of gross margin. The gross margin has also increased by the increase in sales volume of house
brand products.
4. Selling and Administrative Expenses
In 2010, the Company and its subsidiary had selling and administrative expenses amounted to Baht 5,456.17
million, increased from the previous year by Baht 793.90 million or 17.03%. The proportion as percent to sales slightly
decreased from 22.93% to 22.67%. The details of expenses in each group are as follows:
46
• Selling expenses of Baht 4,493.71 million, being expenses for branches, operation and distribution unit,
increased by Baht 674.43 million from expenses on salaries, cost of transportation and cost of service,
maintenance, expenses of HomePro Expo event and pre-opening expenses.
• Administrative expenses of Baht 915.74 million, mostly being expenses of Head Offi ce, increased by
Baht 134.85 million from expenses on salary and remuneration, consultation, tax, and fees.
• Other expenses amounted to Baht 46.72 million, decreased by Baht 15.38 million.
5. Financial Expenses
Financial Expenses of year 2010 were Baht 103.49 million, decreased from the previous year by Baht 9.64 million
or 8.52%. The proportion as percent to sales decreased from 0.56% to 0.43%, which was mainly driven by the
decrease of paid interest from partial payment of long-term loan and the lower interest rate.
6. Net Profit
For the result of operation in 2010, the Company and its subsidiary had net profit of Baht 1,638.43 million,
increased from the previous year by Baht 507.55 million or 44.88 %. The increase of net profit was caused by the increase
of sales and other revenues, together with the decrease of cost of sales and decrease of interest payment. These made
the proportion of net profit to sales to move up from 5.56% to 6.81%.
7. Return on Equity
The return on equity as of 31st December 2010 was 28.62%, increased from the previous year of 22.25%.
The increase shows that the Company has the ability to generate earnings from shareholders’ equity more efficiently.
Financial Status
Comparing financial status as at 31st December 2010 and 31st December 2009
1. Net Assets
As at 31 st December 2010, the Company and its subsidiary had total assets of Baht 16,591.99 million,
increased from 31st December 2009 by Baht 2,719.16 million or 19.60%. The growth of asset value was due to the change
of significant transactions as follows:
• Cash and cash equivalents increased by Baht 570.91 million which was from the increase in bank deposit
received from issuance of debenture during the Year and outstanding cash at branches at the year end date.
• Net inventory increased by Baht 809.09 million, which was a result of the increase in number of new
branches in 2010.
• Other receivables increased by Baht 130.61 million, which was from the support fee of promotional activities
and other service fee.
• Net Property, plant and equipment, and net leasehold rights and software totaling increased by Baht 1,128.71
million or 11.87%, which was from the investment in new store expansion in 2010 and 2011.
• Other assets increased by Baht 79.84 million.
Accounts Receivable
As of December 31, 2010, the Company and its subsidiary had total net accounts receivable of Baht 164.02 million,
increased from the previous year by Baht 19.43 million or 13.44%. The outstanding balances are aged as follows:
47
Unit : MB
Age of receivables
Not yet Due
Consolidated Financial Statement
31 Dec 2010
31 Dec 2009
Separate Financial Statement
31 Dec 2010
31 Dec 2009
143.40
133.07
140.42
130.67
20.82
11.80
18.99
9.52
-
0.04
-
-
2.45
5.07
2.45
5.07
166.67
149.98
161.87
145.26
Past Due:
- Up to 6 months
- 6 - 12 months
- Over 12 months
Total
As of December 31, 2010, the Company and its subsidiary had overdue accounts receivable exceeding 12 months
of Baht 2.45 million, decreased from the previous year more than 50%, which was partly from the debtors who had
difficulty relating to their operation affected by the economic situation in 1997. However, the Company had already
proceeded with lawsuits and set provisions for bad debts. As of December 31, 2009 and December 31, 2010,
the Company set allowance for doubtful bad debts for the said debtors of Baht 5.40 million, and Baht 2.65 million,
respectively.
2. Liabilities
As of December 31, 2010, total liabilities of the Company and its subsidiary were Baht 10,353.78 million increased
from 2009 by Baht 1,690.87 million or 19.52%, which was from the change of the following crucial transactions:
• Accounts Payable was increased by Baht 719.94 million which was from the increase products order
according to sales growth.
• Debenture-net was increased by Baht 1,540 million, during the middle of the Year, there were redemption
of Baht 160 million. Also, there were issuances of unsubordinated and unsecured debentures for Baht 1,700
million, in which Baht 730 million will mature within 1 year in 2011.
• Repayment of the long-term loan to the Commercial Bank for Baht 980.32 million
• Other debts were increased by Baht 411.25 million.
3. Shareholders’ equity
As of December 31, 2010, shareholders’ equity was Baht 6,238.21 million, increased from the previous year
by Baht 1,028.29 million or 19.74% which the increase was from following transactions:
• The issued and paid-up ordinary share was increased by Baht 649.07 million due to the payment of stock
dividend in October 2010. Also, another part of issued and paid-up ordinary share was increased from
the exercise of right under warrants to purchase ordinary shares of employee No. 3 and 4 for the total of Baht
27.65 million.
• Share premium was increased by Baht 27.49 million.
• Retained earning was increased by Baht 351.73 million by dividing into the appropriated retained
earnings for statutory reserve of Baht 81.40 million and the unappropriated retained earnings of Baht
270.33 million.
4. Capital Structure
The capital structure of the Company as of 31st December 2010 consisted of the Company’s debt for the total
of Baht 10,353.78 million and the shareholders equity in the total of Baht 6,238.21 million. In this regard, if such amount
is calculated as the total amount of debt to shareholder equity ratio, it will be equivalent to 1.66 which is equal to the
previous year. The ratio shows that the proportion of the Company’s Capital Structure is the same with the previous year.
48
Liquidity
Summary of cash flow statement as of December 31, 2010 compared to the same period of 2009.
Unit : MB
Transactions
Consolidated Financial Statement
2010
Cash from operating activities
2,624.55
Cash from investing activities
Cash from financing activities
Net increase (decrease) in cash
2009
Separate Financial Statement
2010
2009
2,454.23
2,605.17
2,445.17
(2,005.68)
(900.96)
(2,004.84)
(899.96)
(47.96)
(1,310.73)
(32.96)
(1,300.73)
570.91
242.54
567.37
244.48
As of December 31, 2010, the Company and its subsidiary’s cash and cash equivalents were Baht 1,417.24 million,
net increased from December 31, 2009 by Baht 570.91 million, which derived from the following activities:
1. Net cash from operating activities of Baht 2,624.55 million which were received from the net profit before changes
in operating assets and liabilities of Baht 2,726.38 million, and working capital increased from changes in operating
assets and liabilities e.g. inventories increased by Baht 873.59 million, other receivables increased by Baht 130.60
million, other current assets increased by Baht 74.80 million, trade accounts payable increased by Baht 719.93 million,
accrued expenses increased by Baht 91.19 million, and other liabilities increased by Baht 166.04 million.
2. Net cash used for investing activities totaled Baht 2,005.68 million which such amount was the investment in the
asset for the expansion of branches in 2010 for the total of Baht 1,791.15 million, the computer software for
the total of Baht 57.68 million, and the leasehold right for the total of Baht 160.08 million.
3. Cash received from financing activities, net used in the total of Baht 47.96 million in which such amount was
derived from the issuance of debenture for Baht 1,700 million, repayment of the debenture for Baht 160 million
and repayment of the long-term loan for Baht 980.32 million and for the payment of dividend of Baht 665.11 million.
Liquidity Ratio
As of December 31, 2010, the Company and its subsidiaries have current assets in the total of Baht 5,889.46
million and current liabilities in the total of 7,634.17 million. In this regard, such amount can be calculated into liquidity ratio
of 0.77 times which was increased from the previous year’s ratio of 0.10 times.
The liquidity ratio of the Company and its subsidiaries as of December 31, 2008, 2009, and 2010 was at 0.62 times,
0.67 times, and 0.77 times. Such continuous increase in ratio shows our increase in ability to reduce short-term debt.
Auditing Fee
According to the minutes of the annual general shareholders meeting in 2010, which resolved to appoint the Auditors
of Ernst & Young Office Co., Ltd as the Company’s auditor of 2010, with the fee of Baht 2,400,000.
The actual audit fee for 2010 includes auditing fee for the Company and its subsidiary at the amount of Baht 2,400,000
and other services fee at the amount of Baht 100,000, totaling Baht 2,500,000.
49
Report of Board of Directors’ Responsibilities in
the Financial Statements
Dear Shareholders
The company consolidated financial statements of Home Product Center Public Company Limited and its
subsidiary have been prepared in conformity with the requirements of the Public Company Act B.E. 2535 (1992), the
Securities and Exchange Act B.E. 2535 (1992), the Announcement of the Department of Commercial Registration
dated September 14, 2001, and the accounting standards prescribed by the Federation of Accounting Professions.
The Board of Directors had an opinion that the company’s overall internal control system is at satisfactory
level, sufficient to maintain the assets and to protect from fraud, and is responsible for the financial report of
the Company and its subsidiary in order to ensure that it shows the actual result of operation, financial status, and
cash flows. There have been proper recording of accurate and complete accounting information. Preparing of
the financial reports has been considered of selecting appropriate accounting policy and regularly in compliance
with the general accepted accounting standard, and there has been disclosing of sufficient significant information in
the supplementary to the financial statements.
(Mr. Anant Asavabhokhin)
Chairman
50
(Mr. Khunawut Thumpomkul)
Managing Director
Audit Committee’s Report
Dear Shareholders
The Audit Committee of the Company consists of 3 independent directors who have abilities, qualifications and
independent according to the regulations of the Stock Exchange of Thailand by having Mr. Apilas Osatananda,
as Chairman, Mr. Thaveevat Tatiyamaneekul and Mr. Chanin Roonsamrarn, as directors, having the duty to examine
the reliability of financial statement.
For the year 2010, the Audit Committee has performed the duty according to the scope of responsibility as
stipulated in the charter of the Audit Committee and according to the assignment from the Company’s Board of
Directors. There were 12 meetings which at each meeting all the directors attended, and the auditor was invited to
attend for the agenda which was relevant.
The Audit Committee has the duty and responsibility as assigned by the Board of Directors, which includes
the review for the company in order to have the accurate and sufficient financial report, have efficient internal
control system and corporate governance, have the compliance with relevant laws and regulations, have monitored
the transaction which may have conflict of interest in order to be in compliance with the relevant rules and regulations
and to earn the utmost benefits to the company, as well as the selection and proposing the opinion for appointment
of the external auditor.
Essence of the Work Performed in year 2010
1. Having considered and review the quarterly financial report of the company and the annual financial state
ments before such were disclosed to the Stock Exchange of Thailand and the Office of the Securities and Stock
Exchange Commission, which such was made in the agenda of the review of the financial report of the company.
2. Having considered the selection and nomination of company’s independent auditor and determination of
the remuneration to propose to the Company’s Board of Directors for the request for approval from the meeting
of shareholders.
3. Having convened with the independent auditor for 4 times for considering the guidelines for the performance
and scope for the proceeding to examine the accounting, for the result of the audit and recommendation in
order to ensure that the audit of the financial statement has been made completely and appropriately according
to the standard of accounting audit, which the meeting with the auditor had no attendance of the management.
4. Having had the meeting with the Office of Internal Audit for the operation and scope of proceeding, the review
of examination plan in order to ensure that the internal audit has been made completely and appropriately
according to the standard of internal audit, which for the year 2010, the audits were made to evaluate
the sufficiency and efficiency of the internal control system of the Company and its subsidiary. In general,
and there was an acknowledgement of the report on the result of the audit and following up of the
improvement and correction according to the recommendations in order to cause more effectiveness
and efficiency to the internal control system.
5. Having reviewed the performance to be in compliance with the laws on Securities and Stock Exchange, the
rules of the Stock Exchange or the laws relevant to the business proceeding of the company.
6. Having considered the disclosure of information, inter and related transactions and the transaction which
may have conflicts of interest.
7. Having made the evaluation of the sufficiency and appropriateness of the internal control system which
covers the matter of organization and environment, risks management, the operation control of the management,
information technology and communication, and tracking system.
51
The Audit Committee has the following opinion;
1. The financial report of the Company is reliable, accurate and complete according to the generally accepted
accounting principle and has sufficiently and timely disclosed material information.
2. The company has sufficient and efficient internal control system, risks management system, system of operational
control, and the tracking system.
3. The Company has not performed any act in violation to the laws on Securities and Stock Exchange, the rules of
the Stock Exchange or the laws relevant to the business of the Company.
4. The appointed external auditor has experience for the work, and has coverage network and is acceptable both
in the country and overseas, which such causes the standard of the company’s audits to be in the international
level. Also, every auditor and the person who were assigned to sign to certify the financial statements
are independent, have no relation or transaction which may cause conflicts of interest with the Company. This can
be ensured that the accounting audits were made completely and appropriately according to the accounting
standard and were efficient and transparent.
5. The entering into the transaction with related business or the entering into the transaction which may have
conflicts of interest have been made in accordance with the law, the rules of the Stock Exchange of Thailand, with
appropriate reason for the utmost benefits for the Company, and have no indication or other observations to imply
any abnormal circumstance.
6. The Audit Committee has performed the duty completely, correctly and independently, according to the Charter
that the Audit Committee has prescribed with good cooperation from every party.
(Mr. Apilas Osatananda)
52
Independent Auditor’s Report
To the Shareholders of Home Product Center Public Company Limited
I have audited the accompanying consolidated balance sheet of Home Product Center Public Company Limited
and its subsidiary as at 31 December 2010, the related consolidated statements of income, changes in shareholders’
equity and cash flows for the year then ended, and the separate financial statements of Home Product Center
Public Company Limited for the same year. These financial statements are the responsibility of the management of
the Company and its subsidiary as to their correctness and the completeness of the presentation. My responsibility is
to express an opinion on these financial statements based on my audit. The consolidated financial statements of Home
Product Center Public Company Limited and its subsidiary, and the separate financial statements of Home Product
Center Public Company Limited for the year ended 31 December 2009, as presented herein for comparative purposes,
were audited by another auditor in our firm who expressed an unqualified opinion on those statements under her
report dated 18 February 2010.
I conducted my audit in accordance with generally accepted auditing standards. Those standards require that
I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement 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 Home Product Center Public Company Limited and its subsidiary and of Home Product Center Public Company
Limited as at 31 December 2010, and the results of their operations and cash flows for the year then ended in
accordance with generally accepted accounting principles.
Gingkarn Atsawarangsalit
Certified Public Accountant (Thailand) No. 4496
53
Balance Sheets
As at 31 December 2010 and 2009
(Unit : Baht)
Consolidated financial statements
Note
2009
2010
Separate financial statements
2010
(Restated)
2009
(Restated)
Assets
Current assets
Cash and cash equivalents
7, 12
1,417,245,111
846,330,829
1,391,744,140
824,376,948
Trade accounts receivable - net
8, 12
164,019,004
144,584,882
159,220,872
139,866,504
3,714,231,755
2,905,138,033
3,714,231,755
2,905,138,033
28,231,172
303,776
28,231,172
-
478,399,129
347,794,276
480,832,986
350,048,810
87,334,310
63,747,426
80,232,000
58,154,929
5,889,460,481
4,307,899,222
5,854,492,925
4,277,585,224
Inventories - net
10
Value added tax receivable
Other receivables - net
9, 12
Other current assets
Total current assets
Non-current assets
Investment in subsidiary
11
-
-
4,999,300
4,999,300
Property, plant and equipments - net
13
9,672,822,674
8,710,587,478
9,668,997,414
8,703,030,061
Computer software - net
14
130,201,480
92,115,899
129,864,210
92,110,169
Leasehold rights - net
15
831,392,108
702,999,498
831,392,108
702,999,498
4,174,122
4,174,122
4,174,122
4,174,122
47,700,842
37,821,322
47,700,842
37,821,322
16,238,088
17,230,349
2,056,352
1,595,201
Total non-current assets
10,702,529,314
9,564,928,668
10,689,184,348
9,546,729,673
Total assets
16,591,989,795
13,872,827,890
16,543,677,273
13,824,314,897
Property foreclosed
Rental guarantee deposits
12
Other non-current assets
The accompanying notes are an integral part of the financial statements.
54
Balance Sheets (Continued)
(Unit : Baht)
Note
2009
2010
2010
2009
(Restated)
(Restated)
Liabilities and shareholders’ equity
Current liabilities
Trade accounts payable
12
4,936,826,558
4,216,890,094
4,930,933,267
4,211,189,025
financial lease agreements
17
4,598,239
3,539,452
4,598,239
3,539,452
Short-term loans from related party
12
-
-
85,000,000
70,000,000
Current portion of debentures
19
730,000,000
160,000,000
730,000,000
160,000,000
Current portion of long-term loans
20
-
486,240,000
-
486,240,000
Payables from purchases of assets
186,444,811
119,219,458
186,444,811
119,219,458
Accrued expenses
518,499,518
422,114,603
501,302,666
404,673,798
Corporate income tax payable
313,024,859
247,190,722
313,024,859
247,190,722
Advances received from customers
471,439,028
430,697,315
471,439,028
430,697,315
254,731,780
197,239,903
248,156,063
191,781,208
218,604,858
165,356,564
216,348,822
163,453,254
7,634,169,651
6,448,488,111
7,687,247,755
6,487,984,232
17
6,905,501
5,635,594
6,905,501
5,635,594
Debentures - net of current portion
19
2,000,000,000
1,030,000,000
2,000,000,000
1,030,000,000
Long-term loans - net of current portion
20
-
494,080,000
-
494,080,000
Provision for employee benefits
18
76,786,033
63,515,819
76,786,033
63,515,819
Rental received in advance
499,498,041
521,145,727
499,498,041
521,145,727
Other non-current liabilities
136,421,226
100,042,095
62,361,347
28,144,671
2,719,610,801
2,214,419,235
2,645,550,922
2,142,521,811
10,353,780,452
8,662,907,346
10,332,798,677
8,630,506,043
Current portion of liabilities under
Other payables
12
Other current liabilities
Total current liabilities
Non-current liabilities
Liabilities under financial lease
agreements - net of current portion
Total non-current liabilities
Total liabilities
55
Balance Sheets (Continued)
(Unit : Baht)
Note
2010
2009
2010
2009
(Restated)
(Restated)
Shareholders’ equity
Share capital
21, 22
Registered share capital
4,426,605,527 ordinary shares of Baht
1 each (2009: 3,794,213,851 ordinary
shares of Baht 1 each)
4,426,605,527
3,794,213,851
4,426,605,527
3,794,213,851
4,352,991,862
3,703,926,216
4,352,991,862
3,703,926,216
621,806,886
594,317,420
621,806,886
594,317,420
316,800,000
235,400,000
316,800,000
235,400,000
946,606,069
676,273,953
919,279,848
660,165,218
6,238,204,817
5,209,917,589
6,210,878,596
5,193,808,854
4,526
2,955
-
-
6,238,209,343
5,209,920,544
6,210,878,596
5,193,808,854
16,591,989,795
13,872,827,890
16,543,677,273
13,824,314,897
Issued and paid-up share capital
4,352,991,862 ordinary shares of Baht
1 each (2009: 3,703,926,216 ordinary
shares of Baht 1 each)
Share premium
Retained earnings
Appropriated - statutory reserve
23
Unappropriated
Equity attributable to the Company’s
shareholders
Minority interest - equity attributable to
minority shareholders of subsidiary
Total shareholders’ equity
Total liabilities and shareholders’ equity
56
Income Statements
For the years ended 31 December 2010 and 2009
(Unit : Baht)
Note
2010
2009
2010
(Restated)
2009
(Restated)
Revenues
Sales income
Rental and service income
Other income
Total revenues
24,072,755,450
20,329,115,960
24,073,781,310
20,330,434,724
767,698,279
684,236,990
641,854,232
572,842,217
1,074,447,671
785,735,252
1,101,125,208
807,702,375
25,914,901,400
21,799,088,202
25,816,760,750
21,710,979,316
18,052,220,987
15,395,071,205
18,052,220,987
15,395,071,205
4,493,709,519
3,819,276,323
4,405,352,452
3,740,567,347
836,282,688
709,946,423
841,147,954
705,554,421
79,459,900
70,950,247
79,459,900
70,950,247
46,720,978
62,097,147
46,674,253
62,035,902
23,508,394,072
20,057,341,345
23,424,855,546
19,974,179,122
2,406,507,328
1,741,746,857
2,391,905,204
1,736,800,194
(103,492,795)
(113,129,135)
(104,539,836)
(114,485,389)
2,303,014,533
1,628,617,722
2,287,365,368
1,622,314,805
(664,583,692)
(497,738,690)
(660,153,584)
(496,099,245)
1,638,430,841
1,130,879,032
1,627,211,784
1,126,215,560
1,638,429,270
1,130,878,380
1,627,211,784
1,126,215,560
1,571
652
1,638,430,841
1,130,879,032
0.38
0.26
0.37
0.26
0.37
0.26
0.37
0.26
Expenses
Cost of sales
Selling expenses
Administrative expenses
Management benefit expenses
12
Other expenses
Total expenses
Income before financial cost and
corporate income tax
Financial cost
Income before corporate income tax
Corporate income tax
Net income for the year
Net income attributable to:
Equity holders of the parent
Minority interests of the subsidiary
Earnings per share
25
Basic earnings per share
Net income attributable to equity
holders of the parent
Diluted earnings per share
Net income attributable to equity
holders of the parent
57
Statements of cash flows
(Unit : Baht)
2010
2010
2009
(Restated)
2009
(Restated)
Cash flows from operating activities
Net income before tax
2,303,014,533
1,628,617,722
2,287,365,368
1,622,314,805
860,458,906
804,523,182
856,264,684
800,383,504
Reversal allowance for doubtful accounts
(2,754,168)
(11,245,058)
(2,754,168)
(11,245,058)
Allowance for stock obsolescence
64,498,619
59,219,925
64,498,619
59,219,925
Loss from sales of assets
11,147,490
2,658,249
11,100,767
2,597,003
Assets written-off, net
39,891,005
2,752,544
39,891,005
2,752,544
Allowance for impairment of assets
32,698,000
57,000,000
32,698,000
57,000,000
3,864
76,352
3,864
76,352
Interest expenses
99,825,120
110,975,824
101,046,449
112,514,434
Provision for employee benefits
15,198,214
11,979,050
15,198,214
11,979,050
3,423,981,583
2,666,557,790
3,405,312,802
2,657,592,559
(16,685,000)
24,242,894
(16,605,246)
24,245,788
(873,592,341)
(236,279,432)
(873,592,341)
(236,279,432)
Value added tax receivable
(27,927,396)
10,959,440
(28,231,172)
11,263,216
(9,879,520)
569,560
(9,879,520)
569,560
(130,599,807)
(59,273,969)
(130,779,130)
(54,600,254)
(23,586,884)
7,097,415
(22,077,071)
214,673
3,280,505
1,369,372
(461,151)
1,369,373
719,932,600
519,656,096
719,740,378
518,660,474
Other payables
57,491,877
(1,069,839)
56,374,855
4,669,520
40,741,713
(26,830,710)
40,741,713
(26,830,710)
Accrued expenses
91,190,947
104,080,618
91,434,900
102,511,051
53,072,642
(6,803,407)
52,719,916
(7,059,267)
(21,647,686)
(21,647,686)
(21,647,686)
(21,647,686)
Payment of employee benefits
(1,928,000)
-
(1,928,000)
-
Other non-current liabilities
36,379,131
3,995,800
34,216,676
(2,084,275)
3,320,224,364
2,986,623,942
3,295,339,923
2,972,594,590
(94,631,152)
(110,016,181)
(95,852,481)
(111,554,791)
(601,037,799)
(422,378,455)
(594,319,447)
(415,871,285)
2,624,555,413
2,454,229,306
2,605,167,995
2,445,168,514
Adjustments to reconcile net income before tax
to net cash provided by (paid for) operating
activities:
Depreciation and amortisation
Unrealised exchange losses - net
Income from operating activities before changes
in operating assets and liabilities
Decrease (increase) in operating assets
Trade accounts receivable
Inventories
Other receivables
Other current assets
Other non-current assets
Increase (decrease) in operating liabilities
Trade accounts payable
Rental received in advance
Cash from operating activities
Cash paid for interest expenses
Cash paid for corporate income tax
Net cash flows from operating activities
58
Statements of cash flows (Continued)
(Unit : Baht)
2010
2010
2009
2009
(Restated)
(Restated)
Cash flows from investing activities
Acquisition of computer software
(57,679,118)
(23,846,186)
(57,331,067)
(23,846,186)
Acquisition of leasehold rights
(160,076,067)
(9,347,368)
(160,076,067)
(9,347,368)
Proceeds from sales of assets
3,219,510
1,125,744
3,216,711
1,119,505
Acquisition of assets
(1,791,147,760)
(868,891,001)
(1,790,652,684)
(867,884,386)
Net cash flows used in investing activities
(2,005,683,435)
(900,958,811)
(2,004,843,107)
(899,958,435)
-
(124,823,805)
-
(124,823,805)
Increase in short-term loans from related party
-
-
15,000,000
25,000,000
Repayment of short-term loans from related party
-
-
-
(15,000,000)
Increase in long-term loans
-
745,000,000
-
745,000,000
2,328,694
(5,591,053)
2,328,694
(5,591,053)
1,700,000,000
300,000,000
1,700,000,000
300,000,000
Repayment of debentures
(160,000,000)
(660,000,000)
(160,000,000)
(660,000,000)
Repayment of long-term loans
(980,320,000)
(739,680,000)
(980,320,000)
(739,680,000)
55,139,056
45,816,199
55,139,056
45,816,199
(665,105,446)
(871,449,157)
(665,105,446)
(871,449,157)
Net cash flows used in financing activities
(47,957,696)
(1,310,727,816)
(32,957,696)
(1,300,727,816)
Net increase in cash and cash equivalents
570,914,282
242,542,679
567,367,192
244,482,263
Cash and cash equivalents at beginning of year
846,330,829
603,788,150
824,376,948
579,894,685
1,417,245,111
846,330,829
1,391,744,140
824,376,948
has been paid
67,225,353
5,381,343
67,225,353
5,381,343
Stock dividends
621,416,056
1,752,012,439
621,416,056
1,752,012,439
Cash flows from financing activities
Decrease in bank overdrafts and short-term loans
from financial institutions
Increase (decrease) in liabilities under financial
lease agreements
Increase in debentures
Converted warrants to share capital
Dividend paid
Cash and cash equivalents at end of year
Supplemental cash flows information:
Non-cash items consist of
Purchases of equipment for which no cash
59
60
-
statutory reserve
Balance as at 31 December 2010
21
28
Unappropriated retained earnings transferred to
28
Dividend paid
4,352,991,862
27,649,590
-
-
621,416,056
-
Total income for the year
Stock dividends
-
3,703,926,216
Balance as at 31 December 2009 - as restated
for provision for employee benefits
-
3,703,926,216
Balance as at 31 December 2009 - as previously reported
6
3,703,926,216
Cumulative effect of the change in accounting policy
18,303,177
-
-
statutory reserve
Unappropriated retained earnings transferred to
28
Dividend paid
1,752,012,439
28
Stock dividends
1,933,610,600
-
6
1,933,610,600
Issued and
paid-up
share capital
Net income for the year (restated)
Note
621,806,886
27,489,466
-
-
-
-
-
594,317,420
-
594,317,420
594,317,420
27,513,022
-
-
-
-
-
566,804,398
-
566,804,398
Share
premium
316,800,000
-
81,400,000
-
-
-
-
235,400,000
-
235,400,000
235,400,000
-
57,000,000
-
-
-
-
178,400,000
-
178,400,000
Appropriated
- statutory
reserve
946,606,069
-
(81,400,000)
(665,281,098)
(621,416,056)
1,638,429,270
1,638,429,270
676,273,953
(63,515,819)
739,789,772
676,273,953
-
(57,000,000)
(871,449,157)
(1,752,012,439)
1,130,878,380
1,130,878,380
2,225,857,169
(51,536,769)
2,277,393,938
Unappropriated
Retained earnings
6,238,204,817
55,139,056
-
(665,281,098)
-
1,638,429,270
1,638,429,270
5,209,917,589
(63,515,819)
5,273,433,408
5,209,917,589
45,816,199
-
(871,449,157)
-
1,130,878,380
1,130,878,380
4,904,672,167
(51,536,769)
4,956,208,936
Total equity
attributable to
the parent’s
shareholders
4,526
-
-
-
-
1,571
1,571
2,955
-
2,955
2,955
-
-
-
-
652
652
2,303
-
2,303
Minority
interest - equity
attributable to
minority
shareholders
of subsidiary
6,238,209,343
55,139,056
-
(665,281,098)
-
1,638,430,841
1,638,430,841
5,209,920,544
(63,515,819)
5,273,436,363
5,209,920,544
45,816,199
-
(871,449,157)
-
1,130,879,032
1,130,879,032
4,904,674,470
(51,536,769)
4,956,211,239
Total
(Unit : Baht)
Equity attributable to the parent’s shareholders
Statements of changes in shareholders’ equity
61
3,703,926,216
21
28
Dividend paid
Unappropriated retained earnings transferred to statutory reserve
28
4,352,991,862
27,649,590
-
-
621,416,056
-
Stock dividends
-
3,703,926,216
-
3,703,926,216
18,303,177
-
-
1,752,012,439
6
28
Dividend paid
Unappropriated retained earnings transferred to statutory reserve
28
Stock dividends
-
1,933,610,600
-
-
6
1,933,610,600
Issued and paid-up
share capital
Net income for the year (restated)
Note
621,806,886
27,489,466
-
-
-
-
-
594,317,420
-
594,317,420
594,317,420
27,513,022
-
-
-
-
-
566,804,398
-
566,804,398
316,800,000
-
81,400,000
-
-
-
-
235,400,000
-
235,400,000
235,400,000
-
57,000,000
-
-
-
-
178,400,000
-
178,400,000
Appropriated
- statutory reserve
919,279,848
-
(81,400,000)
(665,281,098)
(621,416,056)
1,627,211,784
1,627,211,784
660,165,218
(63,515,819)
723,681,037
660,165,218
-
(57,000,000)
(871,449,157)
(1,752,012,439)
1,126,215,560
1,126,215,560
2,214,411,254
(51,536,769)
2,265,948,023
Unappropriated
Retained earnings
6,210,878,596
55,139,056
-
(665,281,098)
-
1,627,211,784
1,627,211,784
5,193,808,854
(63,515,819)
5,257,324,673
5,193,808,854
45,816,199
-
(871,449,157)
-
1,126,215,560
1,126,215,560
4,893,226,252
(51,536,769)
4,944,763,021
Total
(Unit : Baht)
Share premium
Statements of changes in shareholders’ equity
Notes to consolidated financial statements
1. Corporate information
Home Product Center Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand.
Its major shareholders are Land and Houses Plc. and Quality Houses Plc., which were incorporated in Thailand. The Company is
principally engaged in the trading of a complete range of goods and materials for construction, addition, refurbishment and renovation
of buildings and residences, and provision for related services, together with space rental. Its registered address is 96/27 Moo 9,
Tambol Bangkhen, Amphur Muang, Nonthaburi. As at 31 December 2010, the Company has a total of 40 branches operating in
Bangkok and other provinces (2009: 35 branches).
2. Basis of preparation
2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting
Profession Act B.E. 2547, except for the Thai Accounting Standard No. 19 regarding “Employee Benefits”, which the
Company had early adopted before the date of enforcement.
The presentation of the financial statement has been made in compliance with the stipulations of the Notification of the
Department of Business Development dated 30 January 2009, issued under the Accounting Act B.E. 2543.
The financial statements in Thai language are the official statutory financial statements of the Company. The financial
statements in English language have been translated from the Thai language financial statements.
The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting
policies.
2.2 Basis of consolidation
a) The consolidated financial statements include the financial statements of the Company (“the Company”) and the
following subsidiary (“the subsidiary”):
Company’s name
Nature of
business
Country of
incorporation
Space
rental
Thailand
Percentage of
shareholding
Assets as a percentage
to the consolidated total
assets as at 31 Dec
Revenues as a percentage
to the consolidated total
revenues for the years
ended 31 Dec
2010
2009
2010
2009
2010
2009
Percent
Percent
Percent
Percent
Percent
Percent
99.99
99.99
0.34
0.40
1.09
1.20
b) Subsidiary is fully consolidated as from the date of acquisition, being the date on which the Company obtains control,
and continue to be consolidated until the date when such control ceases.
c) The financial statements of the subsidiary are prepared using the same significant accounting policies as the Company.
d) Material balances and transactions between the Company and its subsidiary have been eliminated from the consolidated
financial statements.
e) Investment in the subsidiary as recorded in the Company’s books of account is eliminated against the equity of the
subsidiary.
f)
Minority interest represents the portion of net income or loss and net assets of the subsidiary that is not held by the
Company and is presented separately in the consolidated income statement and within equity in the consolidated
balance sheet.
62
2.3 The separate financial statements, which present investment in subsidiary presented under the cost method, have been
prepared solely for the benefit of the public.
3. Adoption of new accounting standards
During the current year, the Federation of Accounting Professions issued a number of revised and new accounting standards
as listed below.
a)
Accounting standards that are effective for fiscal years beginning on or after 1 January 2011 (except Framework for the
Preparation and Presentation of Financial Statements, which is immediately effective):
Framework for the Preparation and Presentation of Financial Statements (revised 2009)
b)
TAS 1 (revised 2009)
Presentation of Financial Statements
Inventories
Statement of Cash Flows
Accounting Policies, Changes in Accounting Estimates and Errors
Events after the Reporting Period
Construction Contracts
Property, Plant and Equipment
Leases
Revenue
TAS 19
Employee Benefits
Borrowing Costs
Related Party Disclosures
TAS 26
Accounting and Reporting by Retirement Benefit Plans
Consolidated and Separate Financial Statements
Investments in Associates
TAS 29
Financial Reporting in Hyperinflationary Economies
Interests in Joint Ventures
Earnings per Share
Interim Financial Reporting
Impairment of Assets
Provisions, Contingent Liabilities and Contingent Assets
Intangible Assets
Investment Property
TFRS 2
Share-Based Payment
TFRS 3 (revised 2009)
Business Combinations
TFRS 5 (revised 2009)
Non-current Assets Held for Sale and Discontinued Operations
TFRS 6
Exploration for and Evaluation of Mineral Resources
TFRIC 15
Agreements for the Construction of Real Estate
Accounting standards that are effective for fiscal years beginning on or after 1 January 2013:
TAS 12
Income Taxes
Accounting for Government Grants and Disclosure of Government Assistance
The Effects of Changes in Foreign Exchange Rates
63
The Company’s management believes that these accounting standards will not have any significant impact on the financial
statements for the year when they are initially applied, except for the following accounting standards which management expects
the impact on the financial statements in the year when they are adopted.
TAS 12 Income Taxes
This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount
of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the
stipulated guidelines.
At present, the management is evaluating the impact on the financial statements in the year when this standard is adopted.
TAS 23 (revised 2009) Borrowing Costs
This accounting standard requires entities to capitalize borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset as part of the cost of that asset. Currently, the Company elected to expense such borrowing
costs when incurred. The change in this accounting policy will be applied for borrowing costs incurred on or after 1 January 2011.
4. Significant accounting policies
4.1 Revenue recognition
Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the goods have
passed to the buyer. Sales are recorded based on the selling prices after deducting discounts and allowances.
Rendering of services Service revenue is recognised when services have been rendered taking into account the stage
of completion.
Rental income Rental income under operating leases is recognised over the lease period.
Interest income Interest income is recognised on an accrual basis based on the effective interest rate.
4.2 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity
of three months or less and not subject to withdrawal restrictions.
4.3 Trade accounts receivable
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the
estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences
and analysis of debt aging.
4.4 Inventories
Inventories are valued at the lower of cost (moving average cost method) and net realisable value.
Volume incentives received from the supplier are accounted for as a reduction of the value of inventory and recognised
in income statement when the related inventory is sold.
4.5 Investment
Investment in subsidiary is accounted for in the separated financial statements using the cost method.
64
4.6 Property, plant and equipment/Depreciation
Land is stated at cost, buildings and equipment are stated at cost less accumulated depreciation, and less allowance for
loss on impairment of assets (if any).
Depreciation of plant and equipment is calculated by reference to their costs, on the straight-line basis over the following
estimated useful lives:
Buildings
-
20 years
Buildings on lease land and building improvement
-
useful lives but not over lease periods
Computer equipment
-
3 - 10 years
Furniture, fixtures and office equipment
-
5 - 10 years
Motor vehicles
-
5 years
Depreciation is included in determining income.
No depreciation is provided on land and assets under installation and under construction.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
4.7 Intangible assets
Intangible assets are initially recognised at cost. Following the initial recognition, the intangible assets are carried at cost
less any accumulated amortisation and any accumulated impairment losses (if any).
Intangible assets (computer software) with finite lives are amortised on a systematic basis over the economic useful life
(10 years) and tested for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year
end. The amortisation expense is charged to the income statement.
4.8 Leasehold rights and amortisation
Leasehold rights are stated at cost less accumulated amortisation. The Company amortises leasehold rights on a
straight-line basis over the leasehold period.
The amortisation is included in determining income.
4.9 Borrowing costs
Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial
period of time to get ready for its intended use are recognised as an expense when incurred.
4.10 Related party transactions
Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or
indirectly, or which are under common control with the Company.
They also include individuals which directly or indirectly own a voting interest in the Company that gives them significant
influence over the Company, key management personnel, directors and officers with authority in the planning and direction
of the Company’s operations.
65
4.11 Long-term leases
Leases of equipment and motor vehicles which transfer substantially all the risks and rewards of ownership are classified
as finance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of
the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other long-term
payables, while the interest element is charged to the income statements over the lease period. The equipment and motor
vehicles acquired under finance leases are depreciated over the useful life of the assets.
Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.
4.12 Foreign currencies
Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rates ruling at
the balance sheet date.
Gains and losses on exchange are included in determining income.
4.13 Impairment of assets
At each reporting date, the Company performs impairment reviews in respect of the properly, plant and equipment and
other assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss
is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell
and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation
model is used. These calculations are corroborated by a valuation model that, based on information available, reflects
the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between
knowledgeable, willing parties, after deducting the costs of disposal.
An impairment loss is recognised in the income statement.
In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no
longer exist or may have decreased, the Company estimates the asset’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a
reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset in prior years. Such reversal is recognised in the income statement.
4.14 Employee benefits
Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses
when incurred.
The provision for employee retirement benefits is calculated by estimating the amount of future benefit earned by employees
in return for service provided to the Company in the current and future periods, using the actuarial valuation. Such benefits
are discounted to determine the present value. The reference point for setting the discount rate is the yield rate of
government bonds as at the reporting date. The calculation is performed by a qualified actuary using the Projected Unit
Credit Method.
66
When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is
recognised in the income statement on a straight-line basis over the average period until the benefits become vested.
Any actuarial gains or losses are recognised in the statement of income in the period in which they arise.
4.15 Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.
4.16 Income tax
Income tax is recognised using the income tax payable method, calculated based on taxable profits determined in
accordance with tax legislation.
5. Significant accounting judgments and estimates
The preparation of financial statements in conformity with generally accepted accounting principles at times 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. Significant judgments and estimates are as follows:
Leases
In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to
use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking
into consideration terms and conditions of the arrangement.
Allowance for damaged goods
In determining an allowance for damaged goods due to loss or deterioration, the management needs to exercise judgment
in making estimates based upon the condition of goods and the duration such goods have remained in stock.
Allowance for doubtful accounts
In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon,
among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition.
Fair value of financial instruments
In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are
not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these
models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial
instruments.
Property plant and equipment/Depreciation
In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives
and salvage values of the Company’s plant and equipment and to review estimate useful lives and salvage values when there
are any changes.
In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and
record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying cost.
This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review.
67
Marketing promotion expenses
Marketing promotion expenses arise in respect of advertising and promotional activities, including various sales promotion
activities that are undertaken when the Company has already sold merchandise but still has obligations to customers to make
payment related to such sales promotion in the future. Certain transactions are estimates based on experience and comparison
with various information available in the related market. However, the use of different estimates and assumptions could affect
the amounts of marketing promotion expenses and adjustments to this expense may therefore be required in the future.
Pension and post-retirement benefits
Pension and post-retirement benefit costs are based on actuarial calculations. Inherent within these calculations are
assumptions as to salary increases and discount rate, among others.
6. Change in accounting policy
During the current year, the Company hired an independent actuarial company to assess the value of provision for employee
retirement benefits using the Projected Unit Credit Method, in order to reflect such value appropriately. The Company applied the
change retrospectively, by adjusting provision of Baht 63.5 million against retained earnings brought forward of the year 2010, and
restating the financial statements for the year 2009 as though such provision had always been recorded. As a result, net income
in the consolidated and separate financial statements for the year ended 31 December 2009 decreased by Baht 12.0 million.
The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the
change in accounting policy for provision for employee benefits” in the statements of changes in shareholders’ equity.
7. Cash and cash equivalents
(Unit : Baht)
2010
Cash
2009
2010
2009
86,922,003
60,264,352
86,191,705
59,686,438
135,323,108
111,066,477
110,552,435
89,690,510
Bills of exchange
1,195,000,000
675,000,000
1,195,000,000
675,000,000
Total
1,417,245,111
846,330,829
1,391,744,140
824,376,948
Bank deposits
As at 31 December 2010, bank deposits in saving accounts and bills of exchange carried interests between 0.25 and 1.60
percent per annum (2009: between 0.50 and 2.85 percent per annum).
8. Trade accounts receivable
(Unit : Baht)
2010
2010
2009
84,015,217
79,645,437
79,217,085
74,973,931
Check returned receivable
2,211,537
4,788,722
2,211,537
4,788,722
80,441,476
65,549,071
80,441,476
65,502,199
166,668,230
149,983,230
161,870,098
145,264,852
(2,649,226)
(5,398,348)
(2,649,226)
(5,398,348)
164,019,004
144,584,882
159,220,872
139,866,504
Credit card and coupon receivable
Total
Less: Allowance for doubtful accounts
68
2009
The outstanding balances of trade accounts receivable as at 31 December 2010 and 2009 are aged as follows:
(Unit : Baht)
2010
2009
2010
2009
Age of receivables
Not yet due
143,397,176
133,064,836
140,420,729
130,671,318
20,816,374
11,801,713
18,994,689
9,520,286
-
43,433
-
-
2,454,680
5,073,248
2,454,680
5,073,248
166,668,230
149,983,230
161,870,098
145,264,852
(2,649,226)
(5,398,348)
(2,649,226)
(5,398,348)
164,019,004
144,584,882
159,220,872
139,866,504
Past due:
Upto 6 months
6 - 12 months
Over 12 months
Total
9. Other receivables
Other receivables mainly consist of receivables from sale support operation and area rental and related service receivables.
The outstanding balances of other receivables as at 31 December 2010 and 2009 are aged as follows:
(Unit : Baht)
2010
2009
2010
2009
Age of receivables
Not yet due
169,956,341
122,516,249
172,390,198
124,770,783
304,083,566
222,275,208
304,083,566
222,275,208
1,971,495
3,083,936
1,971,495
3,083,936
11,382,681
8,918,883
11,382,681
8,918,883
487,394,083
356,794,276
489,827,940
359,048,810
(8,994,954)
(9,000,000)
(8,994,954)
(9,000,000)
478,399,129
347,794,276
480,832,986
350,048,810
Past due:
Up to 6 months
6 - 12 months
Over 12 months
Total
10. Inventories
(Unit : Baht)
Consolidated and separate financial statements
2010
Inventories
Less: Allowance for stock obsolescence
Net
Less: Inventories - repaid its cost when sold
Purchase discount
Inventories - net
2009
4,559,357,759
3,613,453,916
(149,360,727)
(112,301,165)
4,409,997,032
3,501,152,751
(566,259,876)
(495,509,317)
(129,505,401)
(100,505,401)
3,714,231,755
2,905,138,033
69
11. Investment in subsidiary
(Unit : Baht)
Paid-up capital
2010
Shareholding percentage
2009
Subsidiary
Market Village Company Limited
5,000,000
5,000,000
2010
2009
(Percent)
(Percent)
99.99
99.99
Dividend received
during the year
Cost
2010
2009
4,999,300
4,999,300
2010
2009
-
-
12. Related party transactions
During the years, the Company and its subsidiary had significant business transactions with related parties. Such transactions,
which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed
upon between the Company and those related parties.
(Unit : Baht)
Consolidated
financial statements
Separate
2010
2010
2009
Pricing policy
2009
Transactions with subsidiary company
(eliminated from the consolidated
financial statements)
Sales of goods
-
-
1,025,860
1,318,764 Market price
Rental and service income
-
- 146,311,429 138,894,845 Baht 11.7 - 12.3 million per month
for 2010 (Baht 10.9 - 11.7 million per
month for 2009)
Other income
-
-
27,671,890 24,293,934 Percentage of core revenue
Service income
-
-
9,277,234
Service expense
-
-
603,020
Interest expenses
-
-
1,221,329
7,558,230 Actual cost
64,540 Market price
1,538,610 1.50 - 1.85 percent per annum
(2009: 1.50 - 4.00 percent per annum)
Transactions with related companies
Sales of goods
11,499,285
4,371,699
11,499,285
Interest income
5,702,548
1,809,526
5,702,548
1,809,526 0.25 - 1.60 percent per annum
(2009: 0.75 - 2.85 percent per annum)
Purchases of goods
Rental and service expenses
547,100
1,410,774
17,645,175 17,918,221
547,100
17,645,175 17,918,221 Percentage of sales but not less
than a minimum rate
70
As at 31 December 2010 and 2009, the Company had the outstanding balances with related parties which had been included
in the following accounts:
(Unit : Baht)
2010
2009
2010
2009
1,196,574,649
677,976,592
1,196,574,649
677,976,592
2,363,253
432,460
2,363,253
432,460
959,041
141,868
959,041
141,868
-
-
124,190
81,800
3,322,294
574,328
3,446,484
656,128
3,210
3,210
3,210
3,210
-
-
2,433,857
2,254,534
3,210
3,210
2,437,067
2,257,744
3,000,000
3,000,000
3,000,000
3,000,000
-
161,918
-
161,918
-
-
85,000,000
70,000,000
1,436,038
1,302,452
1,436,038
1,302,452
-
-
13,977
-
1,436,038
1,302,452
1,450,015
1,302,452
Bill of exchanges and deposits with financial institution
(included in cash and cash equivalents)
Land and Houses Retail Bank Plc. (1)
Land and Houses Plc. and subsidiaries (2)
Quality Houses Plc. and subsidiaries (2)
(eliminated from the consolidated financial statements)
Total
Other receivables
Quality Construction Products Plc. (3)
Total
Quality Houses Property Fund(1)
Trade account payable
Quality Construction Products Plc.(3)
Short-term loans from related party
Other payables
Quality Houses Property Fund(1)
Total
Relationship with the related companies
(1) has common shareholders
(2) the major shareholders
(3) has common directors
During the year 2010, movements in the balances of short-term loans from related party were as follows:
(Unit : Baht)
As at
31 Dec 2009
During the year
Increase
As at
31 Dec 2010
Decrease
Subsidiary
70,000,000
15,000,000
-
85,000,000
The Company has received unsecured loans of Baht 85 million on which interest is payable on a monthly basis at a rate of
1.50 - 1.85 percent per annum (2009: 1.50 - 4.00 percent per annum). The loans are repayable at call.
71
Directors and management’s benefits
In 2010, the Company and its subsidiary had salaries, bonus, meeting allowance and gratuities of their directors and
management recognised as expenses totaling Baht 79.46 million (2009: Baht 70.95 million).
13. Property, plant and equipment
(Unit : Baht)
Land and land Buildings and
improvement
building
improvement
Computer
equipment
Furniture,
fixtures and
office
equipment
Assets under
installation
and under
construction
2,380,384,994
7,200,605,936
307,060,222
1,981,422,476
41,964,035
99,117,491
12,010,555,154
97,469,176
83,646,056
45,512,958
299,361,183
7,947,553
1,324,436,187
1,858,373,113
-
(75,769,581)
(16,439,486)
(107,943,786)
(6,331,808)
-
(206,484,661)
4,302,000
526,948,245
11,028,913
156,436,536
-
(698,715,694)
-
2,482,156,170
7,735,430,656
347,162,607
2,329,276,409
43,579,780
724,837,984
13,662,443,606
As at 31 December 2009
-
1,616,665,539
252,826,116
1,325,845,362
27,090,659
-
3,222,427,676
Depreciation for the year
-
446,961,250
39,670,440
314,482,694
7,434,872
-
808,549,256
-
(40,828,948)
(16,424,483)
(91,308,221)
(6,032,348)
-
(154,594,000)
-
2,022,797,841
276,072,073
1,549,019,835
28,493,183
-
3,876,382,932
13,000,000
64,540,000
-
-
-
-
77,540,000
Increase during the year
-
53,598,000
-
-
-
-
53,598,000
Decrease during the year
-
(17,900,000)
-
-
-
-
(17,900,000)
13,000,000
100,238,000
-
-
-
-
113,238,000
31 December 2009
2,367,384,994
5,519,400,397
54,234,106
655,577,114
14,873,376
99,117,491
8,710,587,478
31 December 2010
2,469,156,170
5,612,394,815
71,090,534
780,256,574
15,086,597
724,837,984
9,672,822,674
Motor
vehicles
Total
Cost:
Additions
Disposals and written-off
Transfers in (out)
Accumulated depreciation:
Depreciation on disposals
and written-off
Allowance for impairment loss:
Net book value:
72
2009 (Baht 714.4 million included in selling expenses, and the balance in administrative expenses)
756,319,116
808,549,256
(Unit : Baht)
Assets under
installation
and under
construction
Land and land Buildings and
improvement
building
improvement
Computer
equipment
Furniture,
fixtures and
office
equipment
2,380,384,994
7,199,960,219
306,812,940
1,961,881,890
41,366,990
99,117,491
11,989,524,524
97,469,176
83,646,056
45,391,909
299,098,418
7,947,553
1,324,324,925
1,857,878,037
-
(75,769,581)
(16,439,486)
(107,723,277)
(6,331,809)
-
(206,264,153)
4,302,000
526,948,245
11,028,913
156,436,536
-
(698,715,694)
-
2,482,156,170
7,734,784,939
346,794,276
2,309,693,567
42,982,734
724,726,722
13,641,138,408
-
1,616,509,808
252,675,868
1,313,145,786
26,623,001
-
3,208,954,463
-
446,896,679
39,582,207
310,575,360
7,317,300
-
804,371,546
-
(40,828,948)
(16,424,483)
(91,137,236)
(6,032,348)
-
(154,423,015)
-
2,022,577,539
275,833,592
1,532,583,910
27,907,953
-
3,858,902,994
13,000,000
64,540,000
-
-
-
-
77,540,000\
Increase during the year
-
53,598,000
-
-
-
-
53,598,000
-
(17,900,000)
-
-
-
-
(17,900,000)
13,000,000
100,238,000
-
-
-
-
113,238,000
31 December 2009
2,367,384,994
5,518,910,411
54,137,072
648,736,104
14,743,989
99,117,491
8,703,030,061
31 December 2010
2,469,156,170
5,611,969,400
70,960,684
777,109,657
15,074,781
724,726,722
9,668,997,414
Motor
vehicles
Total
Cost:
Additions
Disposals and written-off
Transfers in (out)
Accumulated depreciation:
Depreciation on disposals
and written-off
Allowance for impairment loss:
Net book value:
752,180,384
804,371,546
As at 31 December 2010, the Company had vehicles and equipment under finance lease agreements with net book values
amounting to Baht 15.2 million (2009: Baht 15.4 million).
As at 31 December 2010, certain plant and equipment items have been fully depreciated but are still in use. The gross
carrying amount (before deducting accumulated depreciation) of those assets amounted to approximately Baht 859.2 million
(2009: Baht 512.6 million) (The separate financial statements: Baht 858.9 million, 2009: Baht 512.6 million).
As at 31 December 2009, the Company had mortgaged buildings and leasehold rights (Note 15) with net book value of
Baht 625.4 million to secure credit facilities from banks. In November 2010, the Company released the pledged assets in full,
as discussed in Note 20
73
14. Computer software
(Unit : Baht)
Consolidated
Separate
Cost
31 December 2009
234,652,474
234,643,018
Acquisitions during the year
57,679,118
57,331,067
Written-off during the year
(6,296,962)
(6,296,962)
286,034,630
285,677,123
31 December 2009
99,536,575
99,532,849
Amortisation for the year
20,873,036
20,856,524
Amortisation on written-off
(4,576,461)
(4,576,460)
115,833,150
115,812,913
31 December 2009
43,000,000
43,000,000
(3,000,000)
(3,000,000)
31 December 2010
40,000,000
40,000,000
31 December 2009
92,115,899
92,110,169
31 December 2010
130,201,480
129,864,210
31 December 2010
Accumulated amortisation
31 December 2010
Allowance for impairment loss
Net book value
15. Leasehold rights
(Unit : Baht)
Consolidated and Separate financial statements
Cost
31 December 2009
870,798,826
Acquisitions during the year
160,076,067
Written-off during the year
31 December 2010
(870,573)
1,030,004,320
Accumulated amortisation
31 December 2009
Amortisation for the year
Amortisation on written-off
31 December 2010
167,799,328
31,036,614
(223,730)
198,612,212
Net book value
74
31 December 2009
702,999,498
31 December 2010
831,392,108
16. Bank overdrafts and short-term loans from financial institutions
As at 31 December 2010 and 2009, the Company had overdraft lines from banks totaling Baht 175 million and Baht 155
million, respectively, and other credit facilities amounting to Baht 4,203 million and Baht 3,929 million, respectively.
17. Liabilities under financial lease agreements
(Unit : Baht)
Portion due within one year
2010
Liabilities under financial lease agreements
Less: Deferred interest expense
Net
2009
Portion due over one year
2010
2009
5,145,326
3,996,042
7,429,996
5,995,160
(547,087)
(456,590)
(524,495)
(359,566)
4,598,239
3,539,452
6,905,501
5,635,594
The Company has entered into the finance lease agreements with leasing companies for rental of motor vehicles and
equipment for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms of the agreements are
generally between 3 to 5 years.
As at 31 December 2010, Future minimum lease payments required under the finance lease agreements were as follows:
(Unit : Baht)
Less than 1 year
Future minimum lease payments
Deferred interest expenses
Present value of future minimum lease payments
1 - 5 years
Total
5.15
7.43
12.58
(0.55)
(0.52)
(1.07)
4.60
6.91
11.51
18. Provision for employee benefits
Movements in the defined benefit obligation for the year ended 31 December 2010 are summarised below.
(Unit : Baht)
2010
2009
Defined benefit obligation at the beginning of year
63,515,819
51,536,769
Current service cost
12,212,971
9,556,822
Interest cost
2,985,243
2,422,228
Benefits paid
(1,928,000)
-
Defined benefit obligation at the end of year
76,786,033
63,515,819
75
The amounts recognised in the income statements for the year ended 31 December 2010 and 2009 are as follows:
(Unit : Baht)
2010
Current service cost
2009
12,212,971
9,556,822
2,985,243
2,422,228
15,198,214
11,979,050
Selling expenses
3,991,941
3,596,118
Administrative expenses
8,224,174
5,690,985
Management benefit expenses
2,982,099
2,691,947
Interest cost
Total benefit expenses
Benefit expenses recognised in:
Principal actuarial assumptions at the valuation date were a discount rate 4.7% per annum, a future salary increase rate of
6.7% - 7.2% per annum, and an inflation rate of 2.0% per annum.
19. Debentures
(Unit : Baht)
Number of debentures (Unit)
2010
2553
2009
2552
Amount (Baht)
2010
2553
2009
2552
Unsecured debentures
#1/2008
500,000
500,000
100,000,000
260,000,000
#2/2008
630,000
630,000
630,000,000
630,000,000
#1/2009
300,000
300,000
300,000,000
300,000,000
#1/2010
700,000
-
700,000,000
-
#2/2010
1,000,000
-
1,000,000,000
-
3,130,000
1,430,000
2,730,000,000
1,190,000,000
(730,000,000)
(160,000,000)
2,000,000,000
1,030,000,000
Total
Less: Current portion
Debentures - net of current portion
76
Details of the Company’s debentures are as follows:
1. The Principal paid by installment of the Unsubordinated and Unsecured Debentures of Home Product Center Plc.
No. 1/2008 Due 2011
Name of debentures
“The Principal paid by installment of the Unsubordinated and Unsecured Debentures of
Home Product Center Plc. No. 1/2008 Due 2011”
Amount
Baht 500 million
Term
3 years, starting from date of issuance
Issue date
2 May 2008
Interest rate
4.00% per annum
Interest payment schedule
Quarterly in February, May, August and November
Principal repayment
12 quarterly payments totaling Baht 40 million each (the last of Baht 60 million),
starting 2 August 2008 and with the last payment due on 2 May 2011
Covenants
Maintenance of debt to equity ratio
During 2010, the Company repaid the principal of debenture amounting to Baht 40 million per each installment,
totalling Baht 160 million, as stipulated in the terms of repayment of the above debentures, to the debenture holders.
2. The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No.2/2008 Due 2011.
Name of debentures
“The Unsubordinated and Unsecured Debentures of Home Product Center Plc.
No. 2/2008 due 2011”
Amount
Baht 630 million
Term
Issue date
21 November 2008
Interest rate
5.50% per annum
Quarterly in November, February, May and August
Principal repayment
On the redemption date of 21 November 2011
Covenants
Maintenance of debt to equity ratio and restriction on dividend payment
On 8 April 2009, the Annual General Meeting of the shareholders of the Company passed resolution approving the
cancellation of debentures which previously approved for issuance and has not yet been offered at the amount of
Baht 1,870 million, and the issuance and offering of debt instruments, details are as follows:
•
The issuance and offering of bills of exchange and/or short-term debentures of which the maturity date shall not
exceed 270 days from the date of issuance, in the amount of not exceeding Baht 2,000 million.
•
The issuance and offering of long-term debentures of which the maturity date shall not exceed 10 years from the date
of issuance, in the amount of not exceeding Baht 4,000 million.
77
3. The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 1/2009 due 2012
Name of debentures
No. 1/2009 due 2012”
Amount
Baht 300 million
Term
Issued date
1 October 2009
Interest rate
4.00% per annum
Quarterly in January, April, July and October, starting from 1 January 2010 and with the last
payment due on 2 October 2012
Principal repayment
On the redemption date of 2 October 2012
Covenants
4. During 2010, the Company issued the Unsubordinated and Unsecured Debentures of Home Product Center Plc.,
to be sold to institutional investor and/or major investor, in accordance with a resolution of the Annual General Meeting
of the Company held on 8 April 2009. Details are as follows: 4.1 The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 1/2010 due 2013
Name of debentures
No. 1/2010 due 2013”
Amount
Baht 700 million
Term
Issued date
8 January 2010
Interest rate
3.65% per annum
Quarterly in January, April, July and October, starting from 8 April 2010 and with the last payment
due on 8 January 2013
Principal repayment
On the redemption date of 8 January 2013
Covenants
4.2 The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 2/2010 due 2013
Name of debentures
No. 2/2010 due 2013”
Amount
Baht 1,000 million
Term
Issued date
25 June 2010
Interest rate
3.00% per annum
Semi-annually in June and December, starting from 25 December 2010 and with the last payment
due on 25 June 2013
Principal repayment
On the redemption date of 25 June 2013
Covenants
78
20. Long-term loans
Details of the Company’s long-term loans are as follows:
(Unit : Baht)
No.
Principal
Outstanding balances
2010
2009
Terms of payment
(per month)
Interest Rate
1
1,500,000,000
-
675,000,000
Baht 25.00 million
*
2
845,000,000
-
305,320,000
Baht 15.52 million
**
Total
-
980,320,000
Less: Current portion
-
(486,240,000)
Long-term loans - net of current portion
-
494,080,000
* At 4.15% - 4.25% per annum and from June 2010 onwards at MLR
** At MLR minus an agreed margin
1)
The Company had pledged its assets and leasehold rights to secure loans (facility #1) (Note 13 and 15).
2)
On 8 June 2007, the Company entered into a Baht 2,000 million loan agreement with a commercial bank (facility #2).
The loans would be repaid within 78 monthly installments of not less than Baht 33 million each, and were subject to
interest at the MLR minus the agreed margin. The loans were secured by a negative pledge over some of the Company’s
assets and certain leasehold rights.
On 28 July 2008, the Company and the bank jointly amended the loan agreement to decrease the facility from Baht
2,000 million to Baht 845 million. On 5 February 2009, the Company and the bank jointly amended certain conditions
of use of loan facilities, including the term of repayment. The term of loan repayment had been changed from monthly
payment in the amount of not less than Baht 33.00 million, within 61 months to monthly payment in the amount of not
less than Baht 15.52 million, within 48 months. In September 2009, the Company had utilised the long-term loan facility in full.
3)
The Company had to comply with certain covenants stipulated in the loan agreements such as the maintenance of
debt to equity ratio.
In 2010, the Company repaid the loan principals of facility # 1 and facility # 2 in full and released the assets pledged
against these loans.
79
21. Share capital
As discussed in Note 22, in 2010, the holders of the warrants of the Company exercised the warrants as follows:
Ordinary shares
(Shares)
Exercise price
(Baht/share)
259,650
508,133
1.000
508,133
9,480
18,551
1.000
18,551
- The first quarter
2,265,025
4,376,019
2.059
9,010,391
- The second quarter
7,107,309
13,830,789
2.044
28,270,176
- The third quarter
3,010,695
5,858,788
2.044
11,975,386
- The fourth quarter
1,346,244
3,057,310
1.752
5,356,419
13,998,403
27,649,590
2010
Warrants
(Unit)
Amount
(Baht)
ESOP-W3
- The first quarter
- The second quarter
ESOP-W4
Total
55,139,056
As discussed in the above matter, the number of ordinary shares, the paid-up share capital and premium on ordinary shares
are increased as follows:
Number of
ordinary shares
(Thousand shares)
Paid-up
share capital
(Thousand Baht)
Premium on
ordinary shares
(Thousand Baht)
Registered share capital
At the beginning of the year
3,794,213.9
Increase in registered share capital to support the payment
of a stock dividend and exercising of the rights of the warrants
At the end of the year
632,391.6
4,426,605.5
Issued and paid-up share capital
At the beginning of the year
Increase in capital from exercising of the rights of the warrants
Increase in capital from a payment of stock dividend
At the end of the year
3,703,926.2
3,703,926.2
594,317.4
27,649.6
27,649.6
27,489.5
621,416.1
621,416.1
-
4,352,991.9
4,352,991.9
621,806.9
On 19 August 2010, the Meeting of the Board of Directors of the Company approved the following resolutions which were
proposed to the Extraordinary General Meeting of the shareholders for approval on 4 October 2010:
1. The following allocations of the Company’s retained earnings and interim dividend payment:
- Allocation of 5% of net income of January 2010 through June 2010, amounting to Baht 35.20 million, to the
statutory reserve.
- Payment of a stock dividend not exceeding 622.64 million shares with a par value of Baht 1.00 each, or a total of Baht
622.64 million, to the Company’s shareholders. The rate of payment is 1 dividend share for every 6 existing shares, or
Baht 0.1667 per share. Any existing shareholdings, after such allocation, with less than 10 shares are to receive a cash
dividend of Baht 0.1667 per share.
80
- Payment of a cash dividend of Baht 0.0193 per share, or not exceeding a total of Baht 72.10 million.
The total dividend was to be paid at a rate of Baht 0.186 per share within 29 October 2010.
2. Approval of the cancellation of the allocation of the ordinary shares from the exercise of the warrants allotted to employees
of the Company (ESOP-W3) for which the exercise rights expired in April 2010 and reallocation of the remaining ordinary
shares to be reserved for adjusting the rights of the warrants allotted to employees of the Company (ESOP-W4).
3. Approval of a Baht 632.39 million increase in registered capital, from Baht 3,794.21 million to Baht 4,426.61 million,
by issuing an additional 632.39 million ordinary shares with a par value of Baht 1.00 each. The meeting approved the
following allocations of the shares:
- 622.64 million shares allocated to support the payment of a stock dividend.
- 9.75 million shares reserved for the exercise of the warrants allotted to employees of the Company (ESOP-W4),
of which the conversion rights will be adjusted when the stock dividend is paid.
In October 2010, the Company paid a cash dividend of Baht 71.96 million and allocated 621.42 million ordinary shares
for stock dividend payment. It registered the increase in its paid-up share capital to Baht 4,349.94 million with the Ministry of
Commerce on 21 October 2010. In addition, the Company filed an application with the Stock Exchange of Thailand (SET) to register
the additional 621.42 million shares as listed securities. The SET approved the trading of the additional shares through the stock
market to be effective from 28 October 2010. The Board of Directors is to consider and propose to the next shareholders’ meeting
the allocation of the remaining shares from the above stock dividend payment.
As of the date of the financial statements, the Company has recorded the Baht 621.42 million stock dividends paid,
at its par value, as issued and paid-up share capital under the caption of shareholders’ equity.
The Company registered the increase in its paid-up share capital to Baht 4,352.99 million with the Ministry of commerce
on 8 December 2010.
22. Warrants
Details of the warrants of the Company which were issued without charge, are as follows: -
Type of
warrant
Issue to
ESOP-W3
Directors and employees
of the Company
ESOP-W4
Number of
warrants issued
(Units)
Period of
warrant
Exercise price
per share
Exercise ratio
per 1 warrant
2 April 2007
15,000,000
3 years
Baht 1.00
1 ordinary shares
23 May 2008
50,000,000
5 years
Baht 3.98
1 ordinary shares
Issuance date
of warrant
Directors and employees
of the Company and
its subsidiary
During 2008, the Company had issued ESOP-W4 to the Company’s and subsidiary’s employees. The issue of ESOP-W4 has
affected the exercise of ESOP-W3 as follows:
Type of warrant
Exercise price per share
ESOP-W3
Baht 1.00
Exercise ratio per 1 warrant
1.007 ordinary shares
81
According to the resolution of the Annual General Meeting of Shareholders dated on 8 April 2009, that approve the Company
to pay dividend at the rate of more than 55% of net income after income tax in 2008. As a result, the Company had to adjust the
exercise price and exercise ratio the warrants allotted to employees of the Company (ESOP-W3 and ESOP-W4) in accordance
with the prospectus for the offering of warrants as detailed of follows:
Type of warrant
ESOP-W3
Baht 1.000
ESOP-W4
Baht 3.912
The adjusted exercise prices and exercise ratios of ESOP-W3 and ESOP-W4 were effective from 16 April 2009.
According to the resolution of the Extraordinary General Meeting of the shareholders of the Company dated 29 September
2009, that approve the Company to pay the interim dividend to the shareholders in the amount of 1,752.0 million ordinary
shares. As a result, the Company needs to adjust the right of the warrants allotted to the employees of the Company (ESOP-W3
and ESOP-W4) in accordance with the prospectus for the offering of warrants in respect of the condition to adjust the right
of warrants and the changes in prices.
Type of warrant
ESOP-W3
Baht 1.000
ESOP-W4
Baht 2.059
The adjusted exercise prices and exercise ratios of ESOP-W3 and ESOP-W4 were effective from 12 October 2009.
According to the resolution of the Annual General Meeting of Shareholders dated on 7 April 2010, that approve the
Company to pay dividend at the rate of more than 55% of net income after income tax in 2009. As a result, the Company had to
adjust the exercise price and exercise ratio of the warrants allotted to employees of the Company (ESOP-W4) in accordance
with the prospectus for the offering of warrants as detailed below.
Type of warrant
ESOP-W4
Baht 2.044
The adjusted exercise prices and exercise ratios of ESOP-W4 were effective from 12 April 2010.
According to the resolution of the Extraordinary General Meeting of the shareholders of the Company dated 4 October 2010,
that approve the Company to pay an interim stock dividend to the shareholders of a total of not more than 622.64 million ordinary
shares. As a result, the Company needs to adjust the rights of the warrants allotted to the employees of the Company (ESOP-W4)
in accordance with the condition in the prospectus for the offering of warrants to adjust the rights of warrants and changes in prices.
Type of warrant
ESOP-W4
Baht 1.752
The adjusted exercise prices and exercise ratios of ESOP-W4 are effective from 12 October 2010.
During 2010, the movements of warrants of the Company are as follows:
(Unit : Unit)
Type of warrant
82
Number of warrants
outstanding as at
31 December 2009
Number of
warrants exercised
during the year
Number of
warrants expired
during the year
Number of warrants
outstanding as at
31 December 2010
ESOP-W3
580,931
(269,130)
(311,801)
-
ESOP-W4
36,148,625
(13,729,273)
-
22,419,352
23. Statutory reserve
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory
reserve at least 5 percent of its net income, until the reserve reaches 10 percent of the registered capital. The statutory reserve is
not available for dividend distribution.
24. Expenses by nature
Significant expenses by nature are as follows:
2010
Employee remuneration
2009
2010
2009
1,786
1,437
1,786
1,437
Premises expenses
918
820
918
820
Depreciation and amortisation
860
805
856
800
Sales promotion and operation support expenses
974
784
946
758
Financial costs
103
114
105
114
Tax expenses
727
558
722
557
(917)
(265)
(917)
(265)
Changes in finished goods
25. Earnings per share
Basic earnings per share is calculated by dividing the net income for the year by the weighted average number of ordinary
shares in issue during the year, after adjusting the number of ordinary shares in proportion to the change in the number of shares
as a result of the increase in share capital arising from the issue of a stock dividend of 621.42 million shares on 21 October 2010,
as discussed in Note 21. The number of ordinary shares of the prior year has been adjusted as if the stock dividend had been
issued at the beginning of the earliest period reported.
Diluted earnings per share is calculated by dividing net income for the year by the weighted average number of ordinary shares
in issue during the year, after adjusting the number of ordinary shares in proportion to the change in the number of shares as a result
of the increase in share capital arising from the issue of a stock dividend, as discussed in the above paragraph, plus the weighted
average number of ordinary shares that would need to be issued to convert all dilutive potential ordinary shares into ordinary shares.
The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary
shares were issued.
The following table sets forth the computation of basic and diluted earnings per share:
Weighted average number of
ordinary shares (shares)
Net income (Baht)
2010
2009
2010
(Restated)
2009
Earnings
per share (Baht)
2010
(Restated)
2009
(Restated)
Net income attributable to equity holders
of the parent
Effect of dilutive potential ordinary shares
1,638,429,270
1,130,878,380
4,339,764,479
4,313,635,897
-
-
48,535,285
48,733,170
1,638,429,270
1,130,878,380
4,388,299,764
4,362,369,067
0.38
0.26
0.37
0.26
Net income of ordinary shareholders
assuming the conversion of warrants
to ordinary shares
83
Seperate financial statements
Weighted average number of
ordinary shares (shares)
Net income (Baht)
2010
2009
2010
2009
(Restated)
Earnings
per share (Baht)
2010
(Restated)
2009
(Restated)
Net income attributable to equity holders
of the parent
1,627,211,784
1,126,215,560
4,339,764,479
4,313,635,897
-
-
48,535,285
48,733,170
1,627,211,784
1,126,215,560
4,388,299,764
4,362,369,067
Effect of dilutive potential ordinary shares
0.37
0.26
0.37
0.26
Net income of ordinary shareholders
assuming the conversion of warrants
to ordinary shares
26. Financial information by segment
The majority of the operations of the Company and subsidiary involve the business segments of trading of a complete range
of goods and materials for construction, addition, refurbishment and renovation of buildings and residences, and provision of
related services, together with space rental (as having revenue and assets less than 10 percent of total revenue and total assets
of all segments) and are carried on in a single geographic area, Thailand. As a result, all revenues, operating profits and assets as
reflected in these financial statements pertain to the aforementioned trading industry and geographic area.
27. Provident fund
The Company and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E.
2530. Both employees and the Company contributed to the fund monthly at the rate of 3 - 5 percent of basic salary. The fund,
which is managed by American International Assurance Co., Ltd., will be paid to employees upon termination in accordance with
the fund rules. During the year 2010, the Company contributed Baht 34.25 million (2009: Baht 30.24 million) to the fund.
28. Dividend paid
Approved by
Total
dividends
(Million Baht)
Dividend
per share
(Baht)
Paid on
Interim stock dividend
for 2010
Meeting of the Board of Directors on 19 August 2010 and
Extraordinary General Meeting of the shareholders on
4 October 2010
621.42
0.1667
29 October 2010
Interim dividend for 2010
Meeting of the Board of Directors on 19 August 2010 and
4 October 2010
71.96
0.0193
29 October 2010
Final dividend for 2009
Annual General Meeting of the shareholders on 7 April 2010
593.32
0.1600
30 April 2010
Interim stock dividend
for 2009
29 September 2009
1,752.01
0.9000
27 October 2009
Interim dividend for 2009
29 September 2009
194.67
0.1000
27 October 2009
Annual General Meeting of the shareholders on 8 April 2009
676.78
0.3500
28 April 2009
Final dividend for 2008
84
29. Commitments and contingent liabilities
29.1 As at 31 December 2010 and 2009, the Company had commitments totaling Baht 89.16 million and Baht 66.65 million,
respectively, to commercial banks in respect of guarantees provided for leasing, purchases of goods or hire of work, as
bonds with State Enterprise.
29.2 As at 31 December 2010, the Company had commitments under letters of credit opened with two commercial banks,
amounting to USD 3.99 million (2009: USD 3.53 million).
30. Commitments under long-term lease agreements
30.1 Long-term lease agreements - as lessee
a) The Company has entered into 16 land lease agreements. The terms of the agreements are generally between 24 to
30 years and they are non cancelable, except with the consent of the counterparties.
As at 31 December 2010, future minimum lease payments required under these operating leases contracts were
as follows:
Million Baht
Payable within:
1 year
48.01
2 to 5 years
Thereafter
221.92
1,144.35
1,414.28
b) The Company has entered into 17 lease agreements to lease commercial space. The terms of the agreements are
generally between 17 to 30 years and they are not cancelable, except with the consent of the counterparties.
As at 31 December 2010, future minimum lease payments required under these operating leases contracts were
as follows:
Million Baht
Payable within:
1 year
84.67
2 to 5 years
Thereafter
363.70
1,236.38
1,684.75
30.2 Long-term lease agreements - as leaser
The Company has entered into seven agreements with two companies to lease and sub-lease parts of premises in 5
branches for periods of 29-30 years, with a total of rental received in advance amounting to Baht 640.0 million. The
terms of the agreements are until 2033 - 2036. The Company recognises this income systematically on a straight-line
basis over the useful lives of the leaseholds.
The outstanding balance of rental received in advance, net of recognised rental income, as of 31 December 2010
was Baht 521.2 million (2009: Baht 556.4 million).
85
31. Financial instruments
31.1 Financial risk management
The Company’s financial instruments, as defined under Thai Accounting Standard No. 107 “Financial Instruments:
Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable and other
receivables, trade accounts payable and other payables, short-term loans and debentures. The financial risks associated
with these financial instruments and how they are managed is described below.
Credit risk
The Company is exposed to credit risk primarily with respect to trade accounts receivable and other receivable.
The Company manages the risk by adopting appropriate credit control policies and procedures and therefore does not
expect to incur material financial losses. In addition, the Company does not have high concentrations, of credit risk since it
has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts
receivable and others receivable as stated in the balance sheet.
Interest rate risk
The Company’s exposure to interest rate risk relates primarily to its deposits with financial institutions, short-term
loans and debentures. However, since the Company’s financial assets and some of its financial liabilities bear floating
interest rates and some of financial liabilities bear fixed interest rates which are close to the market rate,
the interest rate risk is expected to be minimal.
Significant financial assets and liabilities as at 31 December 2010, classified by type of interest rate, are summarised
in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on
the maturity date, or the repricing date if this occurs before the maturity date.
Fixed interest rates
Floating
interest rate
(Baht)
Non- interest
bearing
Total
Interest rate
(% p.a.)
Within 1 year
Over 1-5 years
1,195,000,000
-
34,843,680
187,401,431
1,417,245,111
0.25 - 1.60
730,000,000
2,000,000,000
-
-
2,730,000,000
3.00 - 5.50
Financial assets
Financial liabilities
Debentures
Fixed interest rates
Floating
interest rate
(Baht)
Non- interest
bearing
Total
Interest rate
(% p.a.)
Within 1 year
Over 1-5 years
1,195,000,000
-
10,075,107
186,669,033
1,391,744,140
0.25 - 1.60
85,000,000
-
-
-
85,000,000
1.50 - 1.85
730,000,000
2,000,000,000
-
-
2,730,000,000
3.00 - 5.50
815,000,000
2,000,000,000
-
-
2,815,000,000
Financial assets
Financial liabilities
Short-term loans from
related party
Debentures
86
Foreign currency risk
The Company’s exposure to foreign currency risk arises mainly from good purchase transactions that are denominated
in foreign currencies. The Company has not entered into forward exchange contracts to hedge this risk.
The balances of financial liabilities denominated in foreign currencies as at 31 December 2010 are summarised below.
Foreign currency
Financial liabilities (Dollar)
Average exchange rate as at 31 December 2010
(Baht per dollar)
USD
488,141
30.2963
31.2 Fair values of financial instruments
Since some of the Company’s financial assets and liabilities are short-term in nature and debentures bear
interest at rates close to market rate, their fair value is not expected to be materially different from the amounts
presented in the balance sheets.
A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable,
willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial
instrument or by using an appropriate valuation technique, depending on the nature of the instrument.
32. Capital management
The primary objective of the Company’s capital management is to ensure that it has an appropriate financial structure
and preserves the ability to continue its business as a going concern.
The Company manages its capital position with reference to its debt-to-equity ratio in order to comply with a condition
in the stipulations of debentures, which requires the Company to maintain a debt-to-equity ratio of not more than 1.75:1.
No changes were made in the objectives, policies or processes during the years end 31 December 2010 and 2009.
33. Subsequent event
On 16 February 2011, the Meeting of the Board of Directors of the Company approved the dividend payment from
operating results of July 2010 to December 2010 as follows.
-
Payment of a stock dividend to the Company’s shareholders. The rate of payment is 1 dividend share for every
6 existing shares, or Baht 0.1667 per share.
-
Payment of a cash dividend of Baht 0.0193 per share.
The total dividend is to be paid at a rate of Baht 0.186 per share within 29 April 2011.
However, the Company’s Board of Directors’ meeting, held on 19 August 2010, approved the resolution to pay interim
dividend to the shareholders as stock dividend of Baht 0.1667 per share and cash dividend of Baht 0.0193 per share. This
was proposed to the Extraordinary General Meeting of the shareholders and approved on 4 October 2010. The dividend was
paid on 29 October 2010. Such interim dividend per share after adjusting the issuance of interim stock dividend would be
Baht 0.1594 per share.
As a result, total dividend per share for the year 2010 is Baht 0.3454 per share.
The above dividend payment will be proposed to the Annual General Meeting of the Company’s shareholders for approval.
87
34. Reclassification
Certain amounts in the financial statements for the year ended 31 December 2009 have been reclassified to conform
to the current year’s classification but with no effect to previously reported net income or shareholders’ equity except for
the effect of the change in accounting policy discussed in Note 6. The reclassifications are as follows:
(Unit : Baht)
As reclassified
As previously reported
144,584,882
128,785,030
347,794,276
356,794,276
Accrued expenses
422,114,603
365,409,521
430,697,315
423,897,463
165,356,564
222,061,646
(Unit : Baht)
As reclassified
As previously reported
139,866,504
124,066,652
350,048,810
359,048,810
Accrued expenses
404,673,798
347,968,716
430,697,315
423,897,463
163,453,254
220,158,336
35. Approval of financial statements
These financial statements were authorised for issue by the Company’s Board of Directors on 16 February 2011.
88
Board of Directors
HomePro
is the leading home improvement retailer in Thailand.
We operate 40 stores nationwide, providing product
range cover 60,000 items with complete services
as One Stop Shopping to attain
highest customer satisfaction.
Sales
Net Profit
+18.4%
Total Assets
+44.9%
+2,718MB
New
5 Branches
Mr. Pong Sarasin
Chairman
Director and Chairman
of Executive Directors
Director, Executive Director and Chairman of
the Nomination and Remuneration Committee
and Audit Committee
24,073
16,592
20,329
1,638
18,540
13,873
40
13,369
12,274
15,944
33
1,131
35
30
Independent
depe de t Director,
Director,Audit
ecto ,Audit
ud t Committee
Co
ttee
and Nomination and Remuneration Committee
Director and Nomination and
Director, Executive Director
Director
and Managing Director
959
710
2007 2008 2009 2010
2010 retail sales increased
by 18.4% to
Baht 24,073 million.
2007 2008 2009 2010
NPAT increased
by 44.9% to
Baht 1,638 million.
2007 2008 2009 2010
Total assets increased
from investment in
property of 5 new stores.
2007 2008 2009 2010
Lumlukka, Sukhaphiban 3,
Nakhonpathom,
Nakhonratchasima and
Nakhonsitammarat
Mr. Joompol Meesuk
Director
Director
Annual Report 2010
www.homepro.co.th
Shop.homepro.co.th
96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000 Telephone (66) 02-832-1000 Fax (66) 02-832-1400
Greater Bangkok :
Chaengwatthana
Ekamai-Ramindra
Fashion Island
Future Mart
Latphrao
Lumlukka
Petchkasem
Ploenchit
Prachachuen
Rama II
Ramkhamhaeng
02-962-6955
02-933-5000
02-947-6365
02-689-0844
02-983-7444
02-997-4800
02-444-4699
02-655-3400
02-955-5888
02-895-6555
02-735-4999
Rangsit
Ratchadaphisek
Ratchapruk
Rattanathibet
Seri Center
Sukhaphiban 3
Suvarnabhumi (Bangna)
The Mall Bangkae
02-958-5699
02-641-2900
02-423-3222
02-921-2400
02-746-0377
02-976-9114
02-325-1200
02-454-9299
Central :
Ayutthaya
Hua Hin
Nakhonpathom
035-23-6655
032-52-6000
034-21-3200
North :
East :
Chiangmai
053-85-1229
Chiangmai-Hangdong 053-44-7939
Phitsanulok
055-28-9009
Chonburi
Pattaya
Rayong
North-East :
Had Yai
Krabi
Nakhonsitammarat
Phuket
Phuket-Chalong
Samui
uratthani
038-78-5111
038-36-0422
038-80-9333
South :
Khao Yai
Khonkaen
Nakhonratchasima
044-32-8799
043-36-5365
(Bypass 2)
044-28-2550
044-28-8345
042-30-9000
The Mall Korat
Udonthani
074-46-9055
075-81-0499
075-32-4740
076-25-5189
076-60-2399
077-23-1900
077-48-9199
Loving home by homepro
Annual Report 2010

HomePro AR2010_Eng.indd

Transcription

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