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Transcript of Hmpro 08
www.homepro.co.th
Continued Growth
A n n u a l R e p o r t 2 0 0 8
Home Product Center Plc. 96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000
Tel. (66) 02-832-1000 Fax. (66) 02-832-1400
Ho
meP
ro l A
n n u a l R e p o r t 2 0 0 8
Rangsit 02-958-5699
Rattanathibet 02-921-2400
Fashion Island 02-947-6365
Future Mart 02-689-0844
Seri Center 02-746-0377
The Mall Bangkae 02-454-9299
The Mall Korat 044-28-8345
Ratchadaphisek 02-641-2900
Ploenchit 02-655-3400
Phuket 076-25-5189
Chiangmai 053-85-1229
Ramkhamhaeng 02-735-4999
Rama II 02-895-6555
Prachachuen 02-955-5888
Latphrao 02-983-7444
Pattaya 038-36-0422
Chaengwatthana 02-962-6955
Had Yai 074-46-9055
Ratchapruk 02-423-3222
Suvarnabhumi 02-325-1200
Hua Hin 032-52-6000
Samui 077-23-1900
Phitsanulok 055-28-9009
Khonkaen 043-36-5365
Udonthani 042-30-9000
Suratthani 077-48-9199
Petchkasem 02-444-4699
Chonburi 038-78-5111
Ekamai-Ramindra 02-933-5000
Rayong 038-80-9333
Ayutthaya 035-23-6655
Chiangmai-Hangdong 053-44-7939
Krabi 075-81-0499
Phuket-Chalong 076-60-2399
Khao Yai 044-32-8799
1
12th
year HomePro continuous growth
Contents 2 Message from the Chairman
3 Message from the Managing Director
15 General Information
18 Financial Information
19 Nature of Business
22 Risk Factors
24 Shareholding Structure
25 Organization Chart
26 Management
40 Corporate Governance
46 Internal Control
47 Dividend Policy
47 Related Transactions
50 Financial Analysis and Business
Operation Results
54 Report of Board of Directors’
Responsibilities in the Financial Statements
55 Audit Committee’s Report
57 Independent Auditor’s Report
58 Financial Statements
By our unceasing determination to
develop products and services, Homeprocould maintain leading position in
Thailand’s home improvement market
in selling goods and providing complete
range of service relating construction,
addition, renovation, refurbishing of home
and building. Along with store expansion
continuously, most eff ective space
allocation and continuous new product
assortment, we believe we can provide
value for money and highest satisfaction
to home lover. This in turn could sustain
our steady growth and to be excellent
and professional in providing complete
range of service.
22
(Mr. Anant Asavabhokhin)Chairman
Message from the Chairman
Dear Shareholders and Stakeholders,
With the domestic political uncertainty and the US economic crisis which aff ected the European Union and expanded
throughout the world caused the slowdown in the domestic and global consumer confi dence. In addition, the export as the
main income of Thailand severely decreased till the Gross Domestic Products or GDP in 2008 became decreasingly diminished.
The GDP was up 6% in the fi rst quarter of the year but down to 5.3% in the second quarter, 2.6% in the third quarter, and fi nally
-4.9% in the last quarter. Thus, in 2008, the GDP met only 2.6%.
However, the Company’s strength in terms of policy making, consistency in effi cient management, capability enhancement
and product advantages over competitors, the ongoing quests for business opportunity i.e. to increase new branches, develop
service patterns, effi ciency improvement as well as to apply appropriate marketing strategies, this contributed to HomePro’s
sales volume and net profi t in 2008 to increase by 16.29% and 35.06%, respectively.
Despite HomePro had negative same store sales growth in 2007, the Company could turn around same store sales growth
to be positive at 6.6% in 2008 in addition to sales of new store opening in 2008 and sales from HomePro “Expo”.
As for the year 2009, there is inevitable that the Thai economy will be seriously aff ected by the world’s tumbled economy
together with unsettle political situation. This may cause the slowdown in GDP and may lead to the negative one, followed
by unemployment and the lack of consumer confi dence. However, the Company has prepared the plans and strategies to
maintain its continuous growth in sales volume and net profi t. In addition, to achieve this, the cooperation between the
Company’s employees, business partners and shareholders, including trust and support from the Company’s customers is the
essence of all.
Eventually, the Company would like to take this opportunity to express its gratitude to all supports of the Company’s
activities in every respect and hope to receive such good cooperation and support. The Company is committed to operate
and develop its business to prosperity for the highest benefi t of shareholders, business partners, customers, and more than
5,000 employees of the Company all over the country.
“…the Company has prepared the plans and strategies
to maintain its continuous growth in sales and profi t.”
33 (Mr. Khunawut Thumpomkul)
Managing Director
Message from Managing Director
Dear Shareholders and Stakeholders,
Through out the year 2008, Thailand experienced political uncertainty situation, economic crisis, infl ux of both domestic
and international problems, however, the business under the brand of HomePro; “One Stop Shopping home Center”, went
on with stability. The Company’s earnings healthy with sales volume increased by 16.29% and net profi t increased by 35.06%
which was the result of the increase of same store sales growth, opening the new branches, HomePro EXPO event, the increase
of sales proportion of house brand products, the increase of rental revenues, including advertising and in store promotion fees
and other service fees.
In 2008, the Company expanded 3 more branches in Ayutthaya Branch, Krabi Branch, and the second branch of HomePro
in Chiang Mai-Dong Branch. Thus, in 2008, there were 33 branches. And in 2009, the Company plans to increase another 2-4
branches such as in Phuket-Chalong which is the second branch in Phuket, and Khaoyai, which is also the second branch in
Nakorn Ratchasrima, etc.
HomePro EXPO event was an accomplished marketing strategy which was entrusted by business alliance to join in the
event. The event held 2 times in March and October, and contributed satisfactory sales volume and unexpectedly attracted
our customers.
In addition, the Company enhanced the effi ciency of internal management to strengthen capability and competitive
advantage, either in terms of products to meet the demand of customers, increasing house brand proportion, increasing
effi ciency in supply chain and measure to reduce the operation cost.
The Company also focuses on improving service continuously by establishing Customer Satisfaction department to
inspect and improve our service standard in every branch. Our core objective is to maximize customer satisfaction; including
HomeCare Service which off ers checking and cleaning home appliances services covering more areas in the country; Quick
Service which focuses on installation, repair, and improvement. Moreover, the Company also values the importance of products
and services, as well as sales promotions that meet the demand of target group by applying the strategy of Customer Relations
Management (CRM) to create highest satisfaction of customer and enhance brand loyalty with the introduction of Home Card.
Home Card customer database allows HomePro to analyze and study its customer spending behavior in order to present
products and sales promotions to meet highest customer satisfaction and brand loyalty.
The Company is also aware the importance of social responsibility. In 2008, “Kid Toilets” project was continually operated by
refurbishing and/or building hygiene and good sanitary toilets to the elementary schools. Recently, the Company has already
operated the project in 12 provinces, in total 49 schools, and 526 toilets and the project will be continued in 2009. In addition,
the Company also has a plan to set up a Computer Laboratory project to several schools.
From such success, the Company would like to thank you to shareholders, customers, vendors and to all employees for
their determination in hard working and do hope that the shareholders and business parties will continue giving us kind
support.
“…the Company also values theimportance of products and services,
as well as sales promotions that meet the demand of target group…”
55
Store ExpansionHomePro branches cover all home lovers area
To emphasize the proven of continuous store expansion, for home lover market of the 2008 policy, we had launched more
3 new branches in Ayutthaya, Krabi and Chiangmai-Hangdong, the second branch in Chiangmai, which is received a great
respond from our customers. At the end of year 2008, we have 33 branches in total, leading to the net gross profi t increasing
from previous year and we still intend to continuously expand new stores in the future. All this for supporting home lover
demand in all over area in Thailand.
Kids Zone @ Market VillageArea expansion value increasing for family lover
As the company’s aim to manage the existing area to be the most effi ciency with opportunity to continuously support
market demand. We have expanded area in the 3rd fl oor of the Hua Hin Market Village Shopping Mall in Prachuab KhiriKhan
Province to be “Kids Market”. To fulfi ll shopping mall to be a center of home lover family, to respond demanding trend and to
pamper children with improving kid development facilities such as Toys R us, playland, Galaxy including tools, utensils, cloths,
toy shop item which are leader brand names and support customer demand for technological admirer by open IT market, the
center of computer, mobile and all kind of computer tools agent. In the future, HomePro prepares to co-operate with other
alliance for another step of being the center of merchandise which complete fulfi ll every demand of home lover family.
66
Private Brand ProductsContinuous being in the mind of customers
To support customer demand, we have launched new products of House Brand group for more 2 brands, those are : “Estetik”
high quality of rubber tree wood and MDF wood kitchen set and “Parno” drain tools under concept of “Only at HomePro”. By
2008, we possess good quality and design of House brand product for 10 brands with more than 1,000 items. This enhanced,
HomePro achieved the profi t and strong growth continuously.
77
HomePro Champion 2nd year To emphasize for being leader of HomePro in the Home improvement business, especially for varieties of home products
and to create inspiration by putting budget for 12 millions baht to conduct competition “HomePro Champion 2nd year” to
make an opportunity for home lover to participate the decorate competition under the concept of “Small Space Great Idea”
and this year, the people who were interested in the competition is excessively increasing from last year and also there was
broadcasting in “Modern Home” program on TV channel 5
The 7-8th HomePro ExpoA great time of returning profi t and worth to customers
During the down time of economic, HomePro reverses trend by establishing the year greatest household product
events. The 7-8th HomePro Expo is to celebrate 12th year anniversary, and to return the profi t to consumers with maximum
discount up to 80% to support our continuous business growth. The area was expanded from 3 halls to 4 halls with totaling
area more than 27,000 square meters. And to develop format of the exhibition to be more complete, new products and new
business alliance are invited to join the events. This is to support customer’s decision and resulting in sales growth increasing
more than ever.
99
Customer SatisfactionAspire of most customer satisfaction
Because voice of customer is always important and valuable, so we pay attention to information keeping by having sector
for research and analyze for every customer demand for solve the problem, quality development and improve of product
and service regularly under “Customer Relationship Management Program” in order to achieve the goal in making customer
satisfaction.
Home CareThink about Home, Think about HomePro
HomePro has shown of potential in being leader of Home product retail business as “One Stop Shopping” continuously,
not only for merchandising but also marketing strategy in professionally before and after sales service through Home Care
service especially for look after electric appliances and home tools service of 14 lists. HomePro also push forward by expand
strategy in service of Home Service to install, look after and repair household equipment. HomePro also enhance sending
continuously information service to home lover about products, services and new promotions.
1111
Employee DevelopmentEmployee potential development support
HomePro continuously is aware of employee potential development, for the skill in depth, knowledge of product and customer
service. This is to build a harmony working culture, to be unique of employee, to have one goal in development for strong
growth with full effi ciency and for best customer service. Besides we have expanded training service to customer in home
product usage, installation and repairing, garden decoration, feng shui (Chinese belief of how to locate a building) etc. by
themselves (Do-It-Yourself ) at HomePro.
1313
Kid‘s Toilet“Kid’s toilet” To look after society.
In 2008, HomePro continuously drove “Kid’s toilet project” with determination to improve quality of life and sanitation of toilet
usage for student. The Company supports employee to participate the project to realize of society responsibility though
applying to be a volunteer to build toilets in the school where HomePro branches are located. In 2008, HomePro has expanded
the project in 6 provinces i.e. Ayutthaya, Chiangmai, Krabi, Phuket, Songkla, Samui Island in Suratthani province. Since beginning
of project in December 2006, HomePro has operated for 49 schools in 14 provinces with over 526 toilets in total.
Save the EarthStop Global warming
Global warming is a serious problem globally which HomePro aware of and expects employee to concern about environment,
thus internal activity has conducted such as reducing power consumption campaign, by encouraging employee to use
staircase instead of using elevator. Everytime of using staircase will be recorded by counting number of trees. And then
employee volunteers “HomePro Jai-Asa” bring the gotten number of trees to grow for the king in Reforestation Project to
Honour His Majesty the King in Samutsongkram Province. Besides, employee has been supported to installation NGV by
providing employee loan to save the energy cost.
15
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, American International Assurance Co., Ltd. and the Sarasin family. 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 fi rst branch of the Company operating in September
1996. As of 31 December 2008, the Company has 33 branches in total, of which 17 branches are located in Bangkok and its vicinity and
another 16 branches in upcountry provinces, which the location creates convenient access to customers. There were 3 newly
opened branches in 2008, i.e. Ayutthaya, Chiangmai - Hangdong, and Krabi.
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 sale of goods and provision of complete services relating to construction,
addition, refurbishment, renovation of houses and residence places
Registration No. Bor Mor Jor. 665
Registered Capital 1,986,468,146 Shares
Paid-up Capital 1,933,610,600 Shares
G e n e r a l I n f o r m a t i o n
Information of company in which Home Product Center Plc. holds shares from 10 percent up
Name Market Village Co., Ltd
Location 234/1 Petchk asem 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
16
1. Rangsit 161/2 Moo 2, Phaholyothin Road, Prachathipat, Thunyaburi, 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. 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., Tambon Nai Muang, Amphoe Muang, Nakhon Ratchasima 30000
8. Ratchadaphisek 125 Ratchadaphisek Road, Dindang, Dindang, Bangkok 10320
9. Ploenchit 55 Wave Place Building, Wireless Rd., Lumpenee, Pathumwan, Bangkok 10330
10. Phuket 104 Moo 5 Tambon Rasada, Amphoe Muang, Phuket 83000
11. Chiangmai 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, Rama 2 Rd., 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 (Bangna) 99/28 Moo 1, Tambon Rachatawa, Amphoe Bangplee, Samutprakarn 10540
21. Hua Hin 234/1 Petchkasem Rd., Tambon Hua-Hin, 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, Khon Kaen 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, Petchkasem Rd., Nongkhangplu , Nong Kham , Bangkok 10160
28. Chonburi 15/16 Moo 3, Tambon Huykapi, Amphoe Muang Chonburi, 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 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
B r a n c h e s I n f o r m a t i o n
17
Auditor
Name Ernst & Young Offi ce Limited
Address 33rd Floor, Lake Rajada Offi ce Complex, 193/136-137 Rajadapisek Rd., Klongtoey, Bangkok 10110
Telephone (66) 02-264-0777
Facsimile (66) 02-264-0789-90
Financial Advisor
Name TMB Bank Public Company Limited
Address 3000 Phaholyothin Rd., Chomphon, Chatuchak, Bangkok 10900
Telephone (66) 02-299-2592
Facsimile (66) 02-299-2568
Legal Counsel
Name Wissen & Co Ltd.
Address 8th Floor Offi ce # 3801, BB Building, 54 Sukhumvit 21 (Asoke) Rd., Klongtoey-Nua, Wattana, Bangkok 10110
Telephone (66) 02-259-2627
Facsimile (66) 02-259-2630
Share Registrar
Name Thailand Securities Depository Co., Ltd.
Address 4th, 6-7th fl oor Stock Exchange of Thailand Building, 62 Ratchadaphisek Rd., Klongtoey, Bangkok 10110
Telephone (66) 02-229-2800
Facsimile (66) 02-359-1262-3
Representative of Debenture Holder
• Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2005
Name Siam Commercial Bank Public Company Limited
Address 9 Ratchadapisek Rd., Jatujak, Bangkok 10900
Telephone (66) 02-230-6295
Facsimile (66) 02-230-6093
• Amortizing Debentures of Home Product Center Plc. 1/2008 and Unsubordinated and Unsecured Debentures
of Home Product Center Plc. 2/2008
Name TMB Bank Public Company Limited
Address 3000 Phaholyothin Rd., Chomphon, Chatuchak, Bangkok 10900
Telephone (66) 02-264-0777
Facsimile (66) 02-264-0789-90
I n f o r m a t i o n o f t h e R e f e r r a l s
18
Total Assets 13,369.07 12,274.28 11,813.90 13,318.38 12,225.94 11,763.88
Total Liabilities 8,412.86 7,950.81 7,975.46 8,373.62 7,908.43 7,925.81
Equity 4,956.21 4,323.48 3,838.44 4,944.76 4,317.50 3,838.06
Sales 18,540.27 15,943.28 14,223.72 18,541.73 15,943.90 14,224.33
Total Revenues 19,824.19 17,015.21 15,103.81 19,743.97 16,934.30 15,010.35
Net Profi t 959.42 710.38 600.55 953.95 704.78 598.63
Earning per Share (Baht) 0.50 0.37 0.58 0.49 0.37 0.58
Dividend per Share (Baht) - 0.18 0.12 - 0.18 0.12
Paid-up Capital (Million Shares) 1,933.61 1,924.92 1,919.82 1,933.61 1,924.92 1,919.82
Financial Ratio
Liquidity Ratio
Liquidity Ratio (time) 0.62 0.56 0.81 0.61 0.56 0.80
Profi tability Ratio
Gross Profi t (%) 23.70 22.96 22.84 23.70 22.97 22.84
Profi t from Operation (%) 8.01 7.24 7.12 7.98 7.21 7.11
Net Profi t (%) 4.84 4.17 3.98 4.83 4.16 3.99
Return on Equity (%) 20.68 17.41 18.87 20.60 17.28 18.80
Operation Effi ciency Ratio
Return on Assets (%) 7.48 5.90 5.80 7.47 5.88 5.81
Financial Analysis Ratio
Debts to Equity Ratio (time) 1.70 1.84 2.08 1.69 1.83 2.07
Interest Coverage Ratio (time) 22.35 12.36 8.95 21.91 12.19 8.68
Item
Consolidated Financial Statements Separate Financial Statements
2008 2007 2006 2008 2007 2006
Item
Consolidated Financial Statements Separate Financial Statements
2008 2007 2006 2008 2007 2006
F i n a n c i a l I n f o r m a t i o n
(Unit : Million Baht)
19
Vision To maintain as the leader of home center business in Thailand, and to increase branches to cover the home center business in
South East Asia.
Mission 1. To off er the most valuable of products, services, and prices to customers, to be the fi rst at customer’s mind on home products.
2. To cooperate with our business alliance in trying to increase effi ciency which leads to increasing of mutual benefi ts.
3. To give the importance and will develop personnel to have working effi ciency and responsibility to customers.
4. To manage professionally according to the good governance, and to create good relationship to society and community.
5. To seek for new business opportunity for the future and to create reasonable value added to interested persons.
Nature Financial Ratio re 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
residence places as 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. Selling the home improvement products, by having 3 groups
• Hard Line 1 e.g. group of construction material, home improvement accessories, bathroom and sanitary ware.
• Hard Line 2 e.g. group of kitchenware, electrical appliances, electrical equipment and lighting.
• Soft Line e.g. group of bedding and household decorative goods.
2. Providing relevant services, beginning from giving advice and information being useful to make a decision to purchase goods,
customer is capable to choose the goods and best fi ts the purpose of using. Moreover, the Company has also arranged types of
services to facilitate customer. i.e. goods delivery, installation and repairing, fi nding the contractor and expertise team, cleaning the
home appliance and sanitation utensil (Home Care), designing service for planning to decorate or improve parts of the house with
computer, computerized colour mixing, goods ordering for specifi c case, changing or returning of goods, demonstrate D.I.Y
(Do It Yourself ) and Workshop, etc.
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. It commenced operation on the project “Hua-Hin Market Village” which is located at Petchkasem Road, Amphoe
Hua-Hin, Prachaubkirikhan. This has been opened in the fi rst quarter of 2006.
N a t u r e o f B u s i n e s s
20
Revenue Structure Revenue of Company and subsidiaries consist of sales revenue and other revenues. Total structure of revenue can be classifi ed by the
line of products as follows:
Supply of Products The Company acquired products by:
1. Purchase order. The Company made the purchase order of products categorized by product lines in line with groups of products
from both domestic and overseas manufacturer or sales agent, which the Company mainly emphasized on quality and variety of products.
Currently, the Company acquires products from more than 800 manufacturers and sales agents which, throughout the time,
there were always 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 ordered manufacturing of both Private Brand and House Brand from both domestic and over-
seas manufacturer. The Company will initially select the manufacturer by considering factors including being certifi ed of manufacturing
standard, reputation, quality of service providing and types of harmonized operation. Moreover, the Company has also visited the factory
and inspected products in order to ensure the overall quality.
Market and Competitive Condition Currently, the Company is the leader in the retail business of goods relating to housing together with the provision in full range of
complete services. As for competitors, the Company has classifi ed 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.
• Global House operates the business of selling products in the form of warehouse store. Products include construction
materials, decorative goods, tools, equipment to be used for construction, addition, decoration of house and garden. It is
managed by the Siam Global House Plc. There are currently 7 branches in operation.
1. Revenue from retailing
• Hard Line 11 7,782.2 39.3 6,792.3 39.9 6,157.7 40.8
• Hard Line 22 7,520.9 37.9 6,395.8 37.6 5,523.0 36.6
• Soft Line3 2,998.9 15.1 2,502.5 14.7 2,152.9 14.3
2. Revenue from project sales4 238.3 1.2 252.7 1.5 390.1 2.6
Total revenues from sales 18,540.3 93.5 15,943.3 93.7 14,223.7 94.2
3. Other income5 1,283.9 6.5 1,071.9 6.3 880.1 5.8
Total 19,824.2 100.0 17,015.2 100.0 15,103.8 100.0
Item
2008 2007 2006
Amount % Amount % Amount %
Remarks 1. Hard Line1 is group of construction material, home improvement accessories, bathroom and sanitary ware
2. Hard Line2 is group of kitchenware, electrical appliances, electrical equipment and lighting
3. Soft Line3 is group of bedding and household decorative goods.
4. Revenue from project sales4 is from the purchase of project owners which cannot be categorized per product lines.
5. Other income5 is revenue from rental of space, in-store promotion fee etc.
(Unit : Million Baht)
21
However, the Company believes that this business still has plenty potential and marketing opportunities and that the
increase of this business operator will stimulate the consumers to know more and more rapidly change their behavior to
purchase products from the Modern Trade as Home Center.
2. Specialty Store, such as retail businesses who focus on selling specifi c goods as follows:
• Ceramic, Sanitary ware, and Kitchen ware stores i.e. Boonthavorn, Grand Home Mart.
• Furniture and Home decoration store i.e. Index Living Mall
• Retail store that sells only construction materials i.e. Cement Thai Home Mart.
• Other Specialty Stores
3. Operators of large retail business in the group of Hypermarket, these businesses mainly aim at selling of consumer products and
edible products, not home products. There may be some groups of products are overlap sold but having diff erent customer target.
22
R i s k F a c t o r s
The Company separately explains the risk factors which may aff ect to the operation of business as follows:
1. Business Risk In the beginning period of year 2008, the overall economic situation has slightly improved in accordance with the clearer politic
situation after the election and the forming of the government. For the fi rst half year of 2008, the domestic economy has slightly expanded,
the purchasing power of consumer has not much yet recovered, oil price and concern over rising of living cost. These have caused the
change in consumer behavior, by changing to buy cheaper products and being more careful on spending.
In the second half of the year, consuming of private sector was still stable but slowdown when compared with the fi rst half of the
year. This was a result of the increase of products prices and unstable politic situation caused by the consecutively severe congregation.
The Company has continually followed the economic and political situation in order to plan and fi nd measures and strategies to
prevent the risks that may occur, in order to be able to operate the business and to successfully reach the planned target.
1.1 Inventory
As of the 31st December 2008, 31st December 2007, and 31st December 2006, the Company had net Inventory equal of Baht
2,728.08 Million, Baht 2,547.57 Million, and Baht 2,495.68 Million respectively. The average inventory turnover periods were 67 days,
74 days, and 77 days. The decrease of inventory turnover period refl ects the success in adopting of marketing strategy and the
developing of the 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 year
2006, the Company has expanded space of the distribution center. As of 31st December 2008, the total area was 40,000 square
meters, in order to be capable to support the increase of branches in the future and to manage inventory more effi ciently.
1.2 Investment
As of 31st December 2008, the Company had branches in operation of totaling 33 branches, 3 new branches in 2008, i.e.
Ayutthaya branch, Chiangmai-Hangdong, and Krabi.Since the Company has policy to continuingly increase branches, there may
be a risk regarding the result of performance of new branches that may not be as forecasted. This will aff ect the result of the total
operation. The Company avoids the risk by analyzing the investment return before every decision making to invest, and preparing
the action plan, annual budget, and follow up the operation result and progress plan every month when the new branch has
operated. This will facilitate that the Company will be capable to set the plan to handle with the risk and to solve problems which
may be occurred 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 the 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 suff er 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 was sold products to for cash, the group of contractor and project owner is customer
who was sold products to by credit term. The major sale revenue comes from retail customer. As in year 2008 the proportion of cash
sales was 98.7% to total sales. For the year 2007 and 2006, the proportion was at 98.4% and 97.3%. It can be seen that the proportion
of credit sales of the Company has decreased overtime. However, for the credit sales, the Company will consider only project that
23
has reliable fi nancial status, which the company has analyzed the result of operation and fi nancial status or having the contractor
place with a letter of guarantee as security against debt payment, etc.
As of 31st December 2008, 31st December 2007, and 31st December 2006, the Company has accounts receivable of Baht
160.63 Million, Baht 164.37 Million, and Baht 162.09 Million, being credit card debtor of Baht 34.06 Million, Baht 48.13 Million, and
Baht 37.73 Million respectively. The allowance for doubtful bad debts was set to be approximate Baht 25.64 Million, Baht 20.79
Million, and Baht 25.24 Million, which the management have already estimated the debt repayment period and have evaluated
fi nancial status of each debtor. The Company believes that the allowance for doubtful bad debts has been set suffi ciently and
appropriately.
2. Competitive Risk The Company operates a retail business relating to houses and residential places where there are both direct and indi-
rect competitors, such as retailing shops, department stores, specialty stores, and general small retail shops. The Company has
diff erentiated itself by focusing on distribution of variety of products and provision of complete range of services for construction, repairing,
decoration, and addition. Also, the Company provides team of experts for several kinds of system work such as electrical system, plumbing,
and relating installation, etc.
Besides, the Company has been concentrated on strengthening effi ciency of internal management to support capability and
advantages against competitors both locally and internationally in the future.
3. Legal Risk The laws which are relevant and may cause a risk to business operation are as follows:
1. The Bangkok Metropolis Town Planning Law
Announced on 16th May 2006, having objectives to be a guidance on the development of Bangkok Metropolis and to
support the expansion in the future. If there will be modifi cation of the town planning in the future, the Company will not be aff ected from
this limitation, because the Company had put its investment to cover almost all areas of Bangkok. It is being, on the other hand, seen that it
is a restriction to business expansion of competitor, which is a benefi t to the Company.
2. The Trade Competition Act
In 2006, the Trade Competition Commission has adopted its resolution on the Guideline for Unfair Trade Practices in the Whole-
sale/Retail Business, by virtue of the Trade Competition Act B.E. 2542 into 8 ways as follows:
1. Unfair fi xing the prices.
2. Unfair requesting for economic benefi t.
3. Unfair returning of goods.
4. Unfair using 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 has aff ected 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 specifi c and clearer.
3. Draft Wholesale and Retail Business Act
The draft Wholesale and Retail Business Act which has not yet been passed the consideration of the National Legislative As-
sembly. Currently, the Wholesale/Retail observation and development Commission has been established to consider the draft Act which
is not yet clear in enforcement, but if such Act will pass the consideration there shall be an eff ect to the every big modern retail business. If
such is eff ective to the type of Company’s business, it may be useful as it limits the business expansion of new comer, and there will be only
left with the old competitors under the same legal framework.
24
S h a r e h o l d i n g S t r u c t u r e
1. Land and Houses Public Company Limited 571,865,745 29.71
2. Quality Houses Public Company Limited 401,081,274 20.84
3. American International Assurance Company Limited 97,842,182 5.08
4. Mr. Niti Osathanuklor 93,863,150 4.88
5. Thai NVDR Company Limited 80,959,265 4.21
6. Goldman Sachs International 63,689,800 3.31
7. Mr. Manit Udomkunnatum 60,619,372 3.15
8. SOMERS (UK) LIMITED 33,000,000 1.71
9. HSBC (Singapore) Nominees PTE Limited 30,004,580 1.56
10. Chase Nominees Limited 26,664,952 1.39
11. Others 465,390,102 24.18
Rank Name of natural person / Juristic Person No. of Shares % of total Paid-upshares
The List of top 10 major shareholders, as of the closing of registration 23rd April 2008, consists of:
Foreign Limit Foreign shareholders are capable to hold shares and appear their names on the Company’s asset registration of totaling not exceed-
ing 30% of the issued shares and paid up. As of 30th December 2008, the shares of the Company held by foreigner was at approximately
19%.
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%
1. Mr. Anant Asavabhokhin Land and Houses Plc. Chairman
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 Land and Houses Plc. Director
Representative of ShareholdersName - Surname Position
25
Internal Audit Department
Senior Vice PresidentBusiness Development
Senior Vice PresidentHuman Resource and
Central Service
Senior Vice PresidentInformation Technology
Senior Vice PresidentAccounting, Treasury and Legal
Senior Vice PresidentMerchandising - Hard Line
Senior Vice PresidentMerchandising - Soft Line
Senior Vice PresidentMerchandising -
Home Electronic Product
Senior Vice PresidentInternational Purchasing
Senior Vice PresidentOperation
Senior Vice PresidentMarketing
Senior Vice PresidentDistribution Center
O r g a n i z a t i o n C h a r t
Nomination andRemuneration Committee
Board of Directors
Managing Director
Executive Directors Audit Committee
26
M a n a g e m e n t
1. Mr. Anant Asavabhokhin Chairman
2. Mr. Pong Sarasin Director
3. Mr. Rutt Phanijphand Director
4. Mr. Joompol Meesook Director
5. Mr. Apichat Natasilapa Director
6. Mrs. Suwanna Buddhaprasart Director
7. Mr. Manit Udomkunnatum Director
8. Mr. Naporn Soonthornchitcharoen Director
9. Mr. Khunawut Thumpomkul Director
10. Mr. Apilas Osatananda Independent Director
11. Mr. Thaveevat Tatiyamaneekul Independent Director
12. Mr. Chanin Roonsumran Independent Director
Remark : The board of directors’ secretary is Ms. Wannee Junthamongkol, Senior Vice President - Accounting, Treasury and Legal.
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 3 Independent Directors, 1 Director who is management, and 8 Non-
Executive Directors, as follows:
Name - Surname Position
Authorized Signatory Directors on the Company
1. Mr. Anant Asavabhokhin 5. Mr. Manit Udomkunnatum
2. Mr. Joompol Meesook 6. Mr. Naporn Soonthornchitcharoen
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 specifi ed 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.
27
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 business, whether for
his/her benefi ts or other person(s) benefi ts unless it is notifi ed 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 affi liates.
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 fi rst:
• 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 fi nancial statements’ net tangible assets.
• The acquisition or disposition of core assets with value more than 50% of the latest fi nancial statements’ assets.
9. In the event of tie votes, the Chairman of the Board will have a casting vote.
Defi nition 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 qualifi cations of the Inde
pendent Director are as follows:
1. Hold share not more than 1% of paid up capital of the Company, affi liates company, joint company, associated company,
including the shares held by the related person.
2. Being independent either directly or indirectly of both fi nancial and management of the Company or joint company or
major shareholders of the Company, and having no benefi t 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
benefi t or interest will not aff ect 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, affi liate 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:
28
1. Mr. Manit Udomkunnatum Chairman of the Executive Director
2. Mr. Naporn Soonthornchitcharoen Executive Director
3. Mr. Khunawut Thumpomkul Executive Director
4. Mr. Rutt Phanijphand Executive Director
1. Mr. Apilas Osatananda Chairman of the Audit Committee
2. Mr. Thaveevat Tatiyamaneekul Audit Committee
3. Mr. Chanin Roonsumran Audit Committee
Remark : The Audit Committee’s secretary is Mr. Nitat Aroontippaitoon, Vice President – Internal Audit.
1. Death
2. Resignation
3. Lacking of qualifi cations 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
2. Sub - Committees consist of 3 sets of directors i.e. Executive Directors, Audit Committee, and Nomination and Remuneration
Committee, detail is as follows:
2.1 Executive Directors
Roles and Responsibilities
1. To consider and screen the issue required primary decision marking prior to be proposed for the Board of Directors’ approval.
2. To consider investment, branches expansion, annual budget allocation and propose the strategies plan to the Board of Directors.
Terms of holding offi ce
1. Executive Directors shall retire when
1.1 Completion of term
1.2 Leaving from being the Director of the Company
1.3 Resignation
1.4 Death
1.5 The Board of Director has resolution to leave from the position.
2. In case of resigning, the resignation letter shall be submitted to the Chairman of the Company not less than 30 days
in advance, which shall be approved by the Board of Director.
3. In case of any vacancy other than by rotation, the Board of Directors shall appoint person who is qualifi ed to be
Executive Director, in order to fi ll up number of directors as stipulated in the regulations by the Board of Directors.
2.1 Audit Committee consists of:
Name - Surname
Name - Surname
Position
Position
29
Roles and Responsibilities
1. Review the fi nancial statement of the company to be appropriately made and accurate according to the Generally Accepted
Accounting Principle with suffi cient disclosure.
2. Review that the Company has proper and effi cient internal control and internal audit system.
3. Review that the Company shall comply with laws regarding securities and Stock Exchange, regulations of the Stock Exchange of
Thailand or laws relating to business of the Company.
4. Consider the related transaction or transaction that may have confl ict of interest to be in compliance with relevant laws
and regulations.
5. Review that the Company has proper and effi ciency risk management system.
6. Review and jointly consider with the auditor the fi nancial 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, in
cluding to consider result of annual performance of the chief of internal audit.
9. Consider and approve regulations of internal audit offi ce.
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 notifi ed by the auditor of the Company. In case the auditor fi nds doubtful be havior that the
director, manager or person who is responsible for the operation of the Company has committed an off ence as stipulated in the
Securities and Stock Exchange Act (The 4th Issue) B.E. 2551, and report the result of preliminary examination to the Offi ce of the
Securities Exchange Commission and auditor of the Company within 30 days from the date receiving notifi cation 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 fi nancial report of the Company.
16.2 Opinion in relation to suffi ciency 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 confl ict 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 offi ce
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
30
1. Mr. Rutt Phanijphand Chairman of the Nomination and Remuneration Committee
2. Mr. Chanin Roonsumran Nomination and Remuneration Committee
3. Mr. Apichat Natasilapa Nomination and Remuneration Committee
Remark : The Nomination and Remuneration Committee’s secretary is Mr. Thee Phromphol, Senior Vice President – Human Resource and Central Service.
3.3 Resignation
3.4 Death
3.5 Lacking of qualifi cation to be an Audit Committee under this regulations or by the rules of the Stock Exchange of Thailand.
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 to acknowledge.
5. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualifi ed to be an Audit
Committee in order to fi ll 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 for acknowledgement.
2.3 Nomination and Remuneration Committee consists of:
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 benefi ts 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 benefi ts 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 fi t 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 benefi ts 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 offi ce
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.
Name - Surname Position
31
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.
3. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualifi ed to be the Nomination and
Remuneration Committee, in order to fi ll 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 nomi-
nated 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 qualifi cation 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 2008, there were 4 Directors who must be retired by rotation as follows: 1. Mr. Anant Asavabhokhin 2. Mr. Pong Sarasin 3. Mr. Khu-
nawut Thumpomkul and 4. Mr. Apichat Natasilapa. The Nomination and Remuneration Committee’s Meeting no. 1/2551 on 7th February
2008, having considered the qualifi cation, experience and capability, and the past performance, proposed to re-appoint all 4 directors as the
Directors of the Company, to the Board of Directors of the Company. And then in the annual general shareholders meeting of year 2008, the
meeting has resolution to re-appoint all directors to their positions 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 cover 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 punishment 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.
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 au
thority, 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 specifi c work, which must be under the rules, regulations, or
order that the Board of Directors or as imposed by the Company.
32
1. Mr. Khunawut Thumpomkul Managing Director
2. Mr. Vathunyu Visuthikosol Senior Vice President Business Development
3. Mr. Anuchar Jitjaturunt Senior Vice President Merchandising - Hard Line
4. Ms. Jarusopha Thumkathikanon Senior Vice President Merchandising - Soft Line
5. Ms. Tharathip Trimankhong Senior Vice President International Purchasing
6. Mr. Weerapun Ungsumalee Senior Vice President Operation
7. Mr. Thee Phromphol Senior Vice President Human Resource and Central Service
8. Ms. Jariya Sorathorn Senior Vice President Merchandising - Home Electric Products
9. Mr. Nat Jarlitchana Senior Vice President Marketing
10. Mr. Chaiyuth Karunyasopon Senior Vice President Distribution Center
11. Mr. Hanchai Laowpanitchakorn Senior Vice President Information Technology
12. Ms. Wannee Juntamongkol Senior Vice President Accounting, Treasury and Legal
Name - Surname Position Department
However, the Managing Director is unable to approve transaction that himself or person who may have confl ict 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 notifi ed 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 consists of:
33
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e B
oar
d o
f D
ire
cto
rs
Qu
alit
y C
on
stru
ctio
n P
rod
uct
s P
lc.
Co
nst
ruct
ion
Su
pp
lies
Ch
ula
lon
gko
rn U
niv
ers
ity
Ban
gko
k C
hai
n H
osp
ital
Plc
. H
osp
ital
-
Dir
ect
or
Ce
rtifi
cati
on
Pro
gra
m
19
85
- P
rese
nt
Ch
airm
an o
f th
e B
oar
d o
f D
ire
cto
rs
Lan
d a
nd
Ho
use
s P
lc.
Pro
pe
rty
De
velo
pm
en
t
(DC
P)
20
04
and
Ch
ief
Exe
cuti
ve O
ffi c
er
1
98
3 -
Pre
sen
t D
ire
cto
r Q
ual
ity
Ho
use
s P
lc.
Pro
pe
rty
De
velo
pm
en
t
81
-
Ph
.D. (
Ho
n.)
Bu
sin
ess
Ad
min
istr
atio
n
0.2
2
- 1
99
5 -
Pre
sen
t D
ire
cto
r H
om
e P
rod
uct
Ce
nte
r P
lc.
Re
tail
Ho
me
Imp
rove
me
nt
C
hu
lalo
ng
korn
Un
ive
rsit
y
2
00
0 -
Pre
sen
t C
hai
rman
of T
he
Bo
ard
of
Dir
ect
or
Thai
Nam
thip
Ltd
. C
arb
on
ate
d s
oft
dri
nk
1
99
6 -
Pre
sen
t C
hai
rman
of T
he
Bo
ard
of
Dir
ect
or
Shan
gri
-La
Ho
tel P
lc.
Ho
tel
Dir
ect
or
Tara
rom
En
terp
rise
Plc
. P
rop
ert
y d
eve
lop
me
nt
1
99
4 -
Pre
sen
t D
ire
cto
r Q
ual
ity
Co
nst
ruct
ion
Pro
du
cts
Plc
. C
on
stru
ctio
n S
up
plie
s
R
oja
na
Ind
ust
rial
Par
k P
lc.
Pro
pe
rty
de
velo
pm
en
t
Sa
mm
ako
rn P
lc.
Pro
pe
rty
de
velo
pm
en
t
1
99
0 -
Pre
sen
t D
ire
cto
r C
row
n s
eal
Plc
. C
row
n c
ap m
anu
fact
uri
ng
Dir
ect
or
Asi
an P
rop
ert
y D
eve
lop
me
nt
Plc
. P
rop
ert
y d
eve
lop
me
nt
61
-
M.S
. in
Bu
sin
ess
Ad
., -
- 2
00
1 -
Pre
sen
t D
ire
cto
r,
Ho
me
Pro
du
ct C
en
ter
Plc
. R
eta
il H
om
e Im
pro
vem
en
t
F
ort
Hay
s K
ansa
s St
ate
Un
ive
rsit
y,
C
hai
rman
of
the
No
min
atio
n
H
ays,
Kan
sas,
USA
.
and
Re
mu
ne
rati
on
Co
mm
itte
e
-
Bac
he
lor
De
gre
e o
f Sc
ien
ce
an
d E
xecu
tive
Dir
ect
or
K
ase
tsar
t U
niv
ers
ity
20
06
- P
rese
nt
Dir
ect
or
and
Au
dit
Co
mm
itte
e
IRP
C P
lc.
Petr
och
em
ical
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
2
00
5 -
Pre
sen
t D
ire
cto
r
Lan
d a
nd
Ho
use
Ban
k R
eta
il P
lc.
Fin
anci
al in
stit
uti
on
D
ire
cto
r A
ccre
dit
atio
n P
rog
ram
and
Ch
ief
Exe
cuti
ve D
ire
cto
r
(
DA
P)
20
03
Ind
ep
en
de
nt
Dir
ect
or
Ban
pu
Plc
. En
erg
y
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
2
00
1 -
Pre
sen
t D
ire
cto
r P
resi
de
nt
Q
ual
ity
Ho
use
s P
lc.
Pro
pe
rty
De
velo
pm
en
t
D
ire
cto
r A
ccre
dit
atio
n P
rog
ram
and
Ch
ief
Exe
cuti
ve O
ffi c
er
(
DC
P)
20
05
Dir
ect
or
Q.H
. In
tern
atio
nal
Co
., Lt
d. (
BV
I) O
vers
eas
pro
pe
rty
de
velo
pm
en
t
2
00
4 -
20
05
Ex
ecu
tive
Dir
ect
or
Kru
ng
Th
ai B
ank
Plc
. Fi
nan
cial
inst
itu
tio
n
2
00
3 -
20
04
A
ud
it C
om
mit
tee
** A
t th
e p
rese
nt,
Mr.
An
ant
is
th
e d
ire
cto
r o
f 5
list
ed
co
mp
anie
s
an
d 5
no
n-l
iste
d c
om
pan
ies
wh
ich
ar
e n
ot
do
ing
bu
sin
ess
co
mp
leti
ng
w
ith
th
e C
om
pan
y.
** A
t th
e p
rese
nt,
Mr.
Pon
g is
th
e d
ire
cto
r o
f 7
list
ed
co
mp
anie
s
an
d 7
no
n-l
iste
d c
om
pan
ies
wh
ich
ar
e n
ot
do
ing
bu
sin
ess
co
mp
leti
ng
w
ith
th
e C
om
pan
y.
** A
t th
e p
rese
nt,
Mr.
Ru
tt is
th
e d
ire
cto
r o
f 4
list
ed
co
mp
anie
s
an
d 2
no
n-l
iste
d c
om
pan
ies
wh
ich
ar
e n
ot
do
ing
bu
sin
ess
co
mp
leti
ng
w
ith
th
e C
om
pan
y.
Nam
e - S
urna
me
Age
Prop
or-
tiona
lof
sha
re in
Com
pany
%
Fam
ilyre
latio
nshi
p w
ithth
e m
anag
e-m
ent
Mr.
An
ant
Asa
vab
ho
khin
Ch
airm
an
Mr.
Pon
g S
aras
in
Dir
ect
or
Mr.
Ru
tt P
han
ijph
and
Dir
ect
or
Exe
cuti
ve D
ire
cto
r
and
Ch
airm
an o
f th
e N
om
inat
ion
and
Re
mu
ne
rati
on
Co
mm
itte
e
B O
A R
D O
F D
I R E
C T
O R
S I
N F
O R
M A
T I O
N A
S O
F D
E C
E M
B E
R 3
1 ,
2 0
0 8
34
Dur
ing
Posi
tion
Expe
rienc
e in
5 y
ears
Educ
atio
nCo
mpa
ny N
ame
Type
of B
usin
ess
Nam
e - S
urna
me
Age
Prop
or-
tiona
lof
sha
re in
Com
pany
%
Fam
ilyre
latio
nshi
p w
ithth
e m
anag
e-m
ent
59
-
MB
A
Tham
mas
at U
niv
ers
ity
0.0
3
- 1
99
5 -
Pre
sen
t D
ire
cto
r H
om
e P
rod
uct
Ce
nte
r P
lc.
Re
tail
ho
me
ce
nte
r
-
BS.
AR
CH
, F.E
.U.,
Ph
ilip
pin
es
20
04
- P
rese
nt
Dir
ect
or
Q-C
on
Eas
tern
Co
., Lt
d
Co
nst
ruct
ion
su
pp
lies
man
ufa
ctu
rin
g
-
BS.
CE,
F.E
.U.,
Ph
ilip
pin
es
20
02
- P
rese
nt
Dir
ect
or
Ce
ntr
e P
oin
t M
anag
em
en
t C
o.,
Ltd
B
uild
ing
man
age
me
nt
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
1
99
7 -
Pre
sen
t D
ire
cto
r Q
.H. I
nte
rnat
ion
al C
o.,
Ltd
(B
VI)
Ove
rse
as p
rop
ert
y d
eve
lop
me
nt
D
ire
cto
r A
ccre
dit
atio
n P
rog
ram
Dir
ect
or
Har
bo
urv
iew
Co
., Lt
d
Ho
tel i
n o
vers
eas
(
DA
P)
20
04
1
99
4 -
Pre
sen
t D
ire
cto
r Q
ual
ity
Co
nst
ruct
ion
Pro
du
cts
Plc
. C
on
stru
ctio
n s
up
plie
s m
anu
fact
uri
ng
Dir
ect
or
Cas
a C
o.,
Ltd
. P
rop
ert
y d
eve
lop
me
nt
1
99
2 -
Pre
sen
t D
ire
cto
r Q
.H M
anag
em
en
t C
o.,
Ltd
P
rop
ert
y d
eve
lop
me
nt
1
98
8 -
Pre
sen
t D
ire
cto
r
Qu
alit
y H
ou
se P
lc.
Pro
pe
rty
de
velo
pm
en
t
and
Ad
viso
r o
f P
resi
de
nt
and
Ch
ief
Exe
cuti
ve D
ire
cto
r
51
-
MB
A,
- -
20
01
- P
rese
nt
Dir
ect
or
and
No
min
atio
n
Ho
me
Pro
du
ct C
en
ter
Plc
. R
eta
il H
om
e Im
pro
vem
en
t
U
niv
ers
ity
of
Sou
the
rn C
alifo
rnia
and
Re
mu
ne
rati
on
Co
mm
itte
e
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
1
99
9 -
Pre
sen
t D
ire
cto
r A
IGG
IC (
Thai
lan
d)
Ltd
. In
vest
me
nt
con
sult
ant
D
ire
cto
r A
ccre
dit
atio
n P
rog
ram
(
DA
P)
20
04
53
-
MB
A
Ch
ula
lon
gko
rn U
niv
ers
ity
- -
20
03
- P
rese
nt
Dir
ect
or
Ho
me
Pro
du
ct C
en
ter
Plc
. R
eta
il H
om
e Im
pro
vem
en
t
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
2
00
5 -
Pre
sen
t D
ire
cto
r La
nd
an
d H
ou
se R
eta
il B
ank
Plc
. Fi
nan
cial
inst
itu
tio
n
D
ire
cto
r A
ccre
dit
atio
n P
rog
ram
2
00
3 -
Pre
sen
t D
ire
cto
r Q
.H M
anag
em
en
t C
o.,
Ltd
O
vers
eas
Pro
pe
rty
De
velo
pm
en
t
(
DA
P)
20
04
2
00
0 -
Pre
sen
t D
ire
cto
r C
en
tre
Po
int
Man
age
me
nt
Co
., Lt
d
Bu
ildin
g M
anag
em
en
t
Dir
ect
or
Q.H
. In
tern
atio
nal
Co
., Lt
d
Pro
pe
rty
De
velo
pm
en
t
Dir
ect
or
and
Se
nio
r Vic
e P
resi
de
nt
Qu
alit
y H
ou
se P
lc.
Pro
pe
rty
De
velo
pm
en
t
** A
t th
e p
rese
nt,
Mr.
Joo
mp
ol i
s
th
e d
ire
cto
r o
f 3
list
ed
co
mp
anie
s
an
d 7
no
n-l
iste
d c
om
pan
ies
wh
ich
ar
e n
ot
do
ing
bu
sin
ess
co
mp
leti
ng
w
ith
th
e C
om
pan
y.
** A
t th
e p
rese
nt,
Mr.
Ap
ich
at is
th
e d
ire
cto
r o
f 1
list
ed
co
mp
any
an
d 2
no
n-l
iste
d c
om
pan
ies
wh
ich
ar
e n
ot
do
ing
bu
sin
ess
co
mp
leti
ng
w
ith
th
e C
om
pan
y.
** A
t th
e p
rese
nt,
Mrs
. Su
wan
na
is
th
e d
ire
cto
r o
f 2
list
ed
co
mp
anie
s
an
d 6
no
n-l
iste
d c
om
pan
ies
wh
ich
ar
e n
ot
do
ing
bu
sin
ess
co
mp
leti
ng
w
ith
th
e C
om
pan
y.
Mr.
Joo
mp
ol
Me
eso
ok
Dir
ect
or
Mr.
Ap
ich
at N
atas
ilpa
Dir
ect
or
and
No
min
atio
n
and
Re
mu
ne
rati
on
Co
mm
itte
e
Mrs
. Su
wan
na
Bu
dd
hap
rasa
rt
Dir
ect
or
35
Dur
ing
Posi
tion
Expe
rienc
e in
5 y
ears
Educ
atio
nCo
mpa
ny N
ame
Type
of B
usin
ess
Nam
e - S
urna
me
Age
Prop
or-
tiona
lof
sha
re in
Com
pany
%
Fam
ilyre
latio
nshi
p w
ithth
e m
anag
e-m
ent
63
-
Seco
nd
ary
3.1
6
- 2
00
0 -
Pre
sen
t D
ire
cto
r an
d
Ho
me
Pro
du
ct C
en
ter
Plc
. R
eta
il H
om
e Im
pro
vem
en
t
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
Ch
airm
an
D
ire
cto
r A
ccre
dit
atio
n P
rog
ram
of
the
Exe
cuti
ve C
om
mit
tee
(
DA
P)
20
04
2
00
4 -
Pre
sen
t D
ire
cto
r L.
U. K
. Co
.,Ltd
. M
anag
em
en
t Se
rvic
e
2
00
3 -
Pre
sen
t D
ire
cto
r R
. L. P
. Co
.,Ltd
. H
old
ing
2
00
2 -
Pre
sen
t D
ire
cto
r P
hu
ket
Re
sort
Clu
b C
o.,
Ltd
. H
ote
l
Dir
ect
or
Ph
uke
t Pa
ton
g C
lub
Co
.,Ltd
. H
ote
l
2
00
1 -
Pre
sen
t C
hai
rman
U
SI H
old
ing
Co
.,Ltd
. H
old
ing
of
the
Exe
cuti
ve C
om
mit
tee
Dir
ect
or
Than
ano
nse
e C
o.,
Ltd
H
old
ing
2
00
0 -
Pre
sen
t D
ire
cto
r R
ang
sit
Pla
za C
o.,
Ltd
D
ep
artm
en
t St
ore
74
-
Ph
.D. I
n A
gri
cult
ura
l Te
chn
olo
gy
- -
20
01
- P
rese
nt
Ind
ep
en
de
nt
Dir
ect
or
an
d
Ho
me
Pro
du
ct C
en
ter
Plc
. R
eta
il H
om
e Im
pro
vem
en
t
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
Ch
airm
an o
f th
e A
ud
it C
om
mit
tee
D
ire
cto
r A
ccre
dit
atio
n P
rog
ram
1
99
6 -
Pre
sen
t C
hai
rman
To
kyo
Le
asin
g
Leas
ing
(
DA
P)
20
04
51
-
MB
A
Nat
ion
al In
stit
ute
of
1.3
5
- 1
99
5 -
Pre
sen
t D
ire
cto
r, E
xecu
tive
Dir
ect
or
H
om
e P
rod
uct
Ce
nte
r P
lc.
Re
tail
Ho
me
Imp
rove
me
nt
De
velo
pm
en
t A
dm
inis
trat
ion
and
Man
agin
g D
ire
cto
r
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
Dir
ect
or
Ce
rtifi
cati
on
Pro
gra
m
(DC
P)
20
01
50
-
MB
A
Tham
mas
art
Un
ive
rsit
y -
- 1
99
5 -
Pre
sen
t D
ire
cto
r an
d E
xecu
tive
Dir
ect
or
Ho
me
Pro
du
ct C
en
ter
Plc
. R
eta
il H
om
e Im
pro
vem
en
t
-
Bac
he
lor
of
Civ
il En
gin
ee
rin
g
20
05
- P
rese
nt
Dir
ect
or
Lan
d a
nd
Ho
use
Ban
k R
eta
il P
lc.
Fin
anci
al in
stit
uti
on
Ch
ian
gm
ai U
niv
ers
ity
20
02
- P
rese
nt
Dir
ect
or
and
Se
nio
r Vic
e P
resi
de
nt
La
nd
an
d H
ou
se P
lc.
Pro
pe
rty
de
velo
pm
en
t
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
1
99
5 -
Pre
sen
t D
ire
cto
r La
nd
an
d H
ou
se N
ort
h-E
ast
Co
.,Ltd
. P
rop
ert
y d
eve
lop
me
nt
Dir
ect
or
Ce
rtifi
cati
on
Pro
gra
m
D
ire
cto
r La
nd
an
d H
ou
se N
ort
h C
o.,L
td.
Pro
pe
rty
de
velo
pm
en
t
(DC
P)
20
05
1
99
5 -
20
04
D
ire
cto
r A
sse
ts P
lus
Secu
riti
es
Plc
. M
utu
al f
un
d
- T
hai
Inst
itu
te o
f D
ire
cto
rs A
sso
ciat
ion
1
99
4 -
Pre
sen
t D
ire
cto
r Q
ual
ity
Co
nst
ruct
ion
Pro
du
cts
Plc
. C
on
stru
ctio
n s
up
plie
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Pre
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ain
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spit
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lc.
Ho
spit
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DA
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20
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rese
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Mr.
Man
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sin
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co
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w
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Ap
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w
ith
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pan
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** A
t th
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Mr.
Kh
un
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th
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r th
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pan
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nly
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Dir
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cuti
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Mr.
Ap
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tho
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Dir
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and
Exe
cuti
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36
Dur
ing
Posi
tion
Expe
rienc
e in
5 y
ears
Educ
atio
nCo
mpa
ny N
ame
Type
of B
usin
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Nam
e - S
urna
me
Age
Prop
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Com
pany
%
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latio
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p w
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Pro
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dvi
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Fin
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CM
) 2
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20
03
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Hu
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sura
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lc.
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Pre
sen
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pe
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Ind
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Cre
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Plc
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inst
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mu
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min
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om
mit
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1
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6 -
Pre
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om
mit
tee
** A
t th
e p
rese
nt,
Mr.
Thav
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vat
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th
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cto
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co
mp
any
an
d 1
no
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om
pan
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sin
ess
co
mp
leti
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w
ith
th
e C
om
pan
y.
** A
t th
e p
rese
nt,
Mr.
Ch
anin
is
th
e d
ire
cto
r o
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list
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co
mp
anie
s
an
d 1
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d c
om
pan
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hic
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ar
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ot
do
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bu
sin
ess
co
mp
leti
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w
ith
th
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om
pan
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vat
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ane
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Ind
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Ch
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No
min
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and
Re
mu
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rati
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Co
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37
Dur
ing
Posi
tion
Expe
rienc
e in
5 y
ears
Educ
atio
nCo
mpa
ny N
ame
Type
of B
usin
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Nam
e - S
urna
me
Age
Prop
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latio
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me
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sin
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Imp
rove
me
nt
Re
tail
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ula
lon
gko
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ity
Ms.
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uso
ph
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49
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nio
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niv
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ai C
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age
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p 2
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Ho
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Pro
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en
ter
Plc
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om
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pro
vem
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in
So
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Wo
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20
05
- 2
00
7
Vic
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resi
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nt
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Ho
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Pro
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ter
Plc
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pro
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Th
amm
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Un
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2
00
2 -
20
05
V
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Pre
sid
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Op
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n
Ho
me
Pro
du
ct C
en
ter
Plc
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pro
vem
en
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eta
il
Mr.
Nat
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ritc
han
a 4
8
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BA
, K
ase
tsar
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niv
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ity
0.0
6
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00
6 -
Pre
sen
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nio
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Ho
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Pro
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Plc
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pro
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20
05
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H
om
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rod
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Ce
nte
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lc.
Ho
me
Imp
rove
me
nt
Re
tail
Mr.
Ch
aiyu
th K
aru
nya
sop
on
5
0
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ach
elo
r o
f Fa
cult
y o
f Fi
nan
ce,
-
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Jul 2
00
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Pre
sen
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nio
r Vic
e P
resi
de
nt
Ho
me
Pro
du
ct C
en
ter
Plc
. H
om
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pro
vem
en
t R
eta
il
R
amkh
amh
aen
g U
niv
ers
ity
20
06
- J
un
20
07
G
M -
Co
ntr
act
Log
isti
cs
DH
L Ex
el S
up
ply
Ch
ain
Th
aila
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Lo
gis
tics
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rvic
es
2
00
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on
trac
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gis
tics
Ex
cel L
og
isti
cs (
Far-
East
) Lt
d.
Log
isti
cs S
erv
ice
s
2
00
2 -
20
04
O
pe
rati
on
& IT
Dir
ect
or
Dav
ids
Dis
trib
uti
on
(Th
aila
nd
) Lt
d.
Log
isti
cs S
erv
ice
s
Mr.
Han
chai
Lao
wp
anit
chak
orn
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4
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ach
elo
r o
f Fa
cult
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f C
om
me
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-
20
07
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rese
nt
Sen
ior V
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Pre
sid
en
t H
om
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rod
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nte
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lc.
Ho
me
Imp
rove
me
nt
Re
tail
an
d A
cco
un
tan
cy,
20
06
- 2
00
7
SAP
Man
age
r D
KSH
(Th
aila
nd
) C
o.,L
td.
Co
nsu
me
r G
oo
ds
Wh
ole
sale
Ch
ula
lon
gko
rn U
niv
ers
ity
20
05
P
roje
ct M
anag
er
(IT)
Stan
dar
d C
har
tere
d B
ank
Co
mm
erc
ial B
ank
2
00
4 -
20
05
SA
P C
on
sult
ant
& T
rain
er
- C
om
pu
ter
Soft
war
e C
on
sult
ing
2
00
2 -
20
04
Se
rvic
e M
anag
er
Mic
roso
ft (
Thai
lan
d)
Ltd
. C
om
pu
ter
Soft
war
e
Ms.
Wan
ne
e J
un
tam
on
gko
l 4
4
- M
BA
, Sa
sin
Gra
du
ate
Inst
itu
te o
f
0.0
3
- M
ar 2
00
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Pre
sen
t Se
nio
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Pro
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ter
Plc
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om
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pro
vem
en
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il
Bu
sin
ess
Ad
min
istr
atio
n o
f
2
00
4 -
Mar
20
05
A
sso
ciat
e D
ire
cto
r -
Fin
ance
Th
ain
ox
Stai
nle
ss P
lc.
Stai
nle
ss S
tee
l Pro
du
cer
Ch
ula
lon
gko
rn U
niv
ers
ity
1
99
9 -
20
03
A
sso
ciat
e D
ire
cto
r -
Fin
ance
C
olg
ate
- P
alm
oliv
e (
Thai
lan
d)
Co
.,Ltd
. C
on
sum
er
Pro
du
cts
M A
N A
G E
M E
N T
I N
F O
R M
A T
I O N
A
S O
F D
E C
E M
B E
R 3
1 ,
2 0
0 8
38
1. Mr. Anant Asavabhokhin Chairman of the Board of Directors -
2. Mr. Pong Sarasin Director -
3. Mr. Rutt Phanijphand Director, Executive Director and Chairman of -
the Nomination and Remuneration Committee
4. Mr. Joompol Meesook Director -
5. Mr. Apichat Natasilpa Director and Nomination and Remuneration Committee -
6. Mrs. Suwanna Buddhaprasart Director -
7. Mr. Manit Udomkunnatum Director and Chairman of the Executive Directors -
8. Mr. Naporn Soonthornchitcharoen Director and Executive Director -
9. Mr. Khunawut Thumpomkul Director, Executive Director and Chairman of
Managing Director the Board of Directors
10. Mr. Apilas Osatananda Independent Director and Chairman of Audit Committee -
11. Mr. Thaveevat Tatiyamaneekul Independent Director and Audit Committee -
12. Mr. Chanin Roonsumran Independent Director, Audit Committee and -
Nomination and Remuneration Committee
13. Mr. Vathunyu Visuthikosol Senior Vice President Director
14. Mr. Anuchar Jitjaturunt Senior Vice President -
15. Ms. Jarusopha Thumkathikanon Senior Vice President -
16. Ms. Tharathip Trimankhong Senior Vice President -
17. Mr. Weerapun Ungsumalee Senior Vice President -
18. Mr. Thee Phromphol Senior Vice President Director
19. Ms. Jariya Sorathorn Senior Vice President -
20. Mr. Nat Jarlitchana Senior Vice President -
21. Mr. Chaiyuth Karunyasopon Senior Vice President -
22. Mr. Hanchai Laowpanitchakorn Senior Vice President -
23. Ms. Wannee Juntamongkol Senior Vice President Director
Detail of Directors and Management who are Authorized to Control Subsidiary
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 other
special directors, i.e. Audit Committee Meeting, Executive Committee Meeting, Nomination and Remuneration Committee Meeting.
On 9th April 2008, the Shareholders Meeting of 2008 has a resolution to grant the annual remuneration of not exceeding Baht
10 million and bonus to the directors of not exceeding Baht 3.5 million. Detail of remuneration payment is as follows:
1. Monthly Remuneration
• Chairman Baht 70,000 / person / month
• Director Baht 35,000 / person / month
2. Remuneration for Meeting
• Chairman Baht 25,000 / person / attendance
• Director Baht 15,000 / person / attendance
3. Remuneration for Meeting of the sub-committee*
• Chairman Baht 25,000 / person / attendance
• Director Baht 15,000 / person / attendance
Remark : The Remuneration of the sub-committee is paid for each time only when attending the meeting
Market Village Co., Ltd. Home Product Center Plc.Name - Surname
39
1. Mr. Anant Asavabhokhin 1,140,000 - - - 538,462 1,678,462
2. Mr. Pong Sarasin 570,000 - - - 269,231 839,231
3. Mr. Rutt Phanijphand 600,000 135,000 - 75,000 269,231 1,079,231
4. Mr. Joompol Meesook 585,000 - - - 269,231 854,231
5. Mr. Apichat Natasilapa1 570,000 - - 45,000 269,231 884,231
6. Mrs. Suwanna Buddhaprasart 570,000 - - - 269,231 839,231
7. Mr. Manit Udomkunnatum 600,000 200,000 - - 269,231 1,069,231
8. Mr. Naporn Soonthornchitcharoen 600,000 135,000 - - 269,231 1,004,231
9. Mr. Khunawut Thumpomkul 2 600,000 135,000 - - 269,231 1,004,231
10. Mr. Apilas Osatananda 585,000 - 300,000 - 269,231 1,154,231
11. Mr. Thaveevat Tatiyamaneekul 600,000 - 180,000 - 269,231 1,049,231
12. Mr. Chanin Roonsumran 600,000 - 180,000 45,000 269,231 1,094,231
Total 7,620,000 605,000 660,000 165,000 3,500,000 12,550,000
Remarks : 1. Mr. Apichat Natasilapa, an authorized person of the American International Assurance Company Limited, received remuneration in the name
the American International Assurance Company 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.
Remark : Number of branches show total numbers of branches in operation and branches that are to be operated
Number of Employees 31 Dec. 2008 31 Dec. 2007 31 Dec. 2006
Head Offi ce (persons) 1,232 1,174 1,041
Branches (persons) 3,662 2,838 2,756
Total (persons) 4,894 4,012 3,797
Number of Branches 35 32 29
Name – Surname Total (Baht)
Meeting Allowances
Board of Director
Executive Director
Audit Committee
Nomination and Remuneration
Committee
Pension
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 2007 and 2008 consisted of salary, bonus, and other remunerations for the total amount
of Baht 41.5 million and Baht 45.2 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 2006-2008.
On December 31, 2008, the Company had a total of 4,894 permanent employees with related expenses of Baht 1,272.30 Million.
40
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 effi ciently and eff ectively 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 cover-
ing 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
notifi ed the rules and supplementary documents on the web site of the Company since 20th December 2007. However,
shareholders may submit such question until 30th January 2008.
• 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 2008, the Company has arranged for Mr. Chanin Runsamran 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
specifi ed 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 Com-
pany 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 Offi ce 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.
• The Company has notifi ed to the executive to restrain from the purchase and sale of securities of the Company 1 month before
disclosing of fi nancial statements or inside information to the public, and the disclosure of material information to other person
is not allowed and such has been notifi ed via e-mail every quarter.
C o r p o r a t e G o v e r n a n c e
41
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 benefi ts to all parties, in order to build the
long-term success.
Shareholders Shareholders and interest person may fi le 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 fi ling complaint in relation to violation of laws or
ethics, accounting doubt, internal controlling, etc. Such information shall be sent to the offi ce 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 specifi c and clearer.
Staff The Company realizes that staff is an important factor for the success of business operation. The Company then has policy of
fair treatment in providing opportunity, appointment and removal, and development of capability which since the past the
Company has treated its staff as follows:
1. The Company has fairly given remuneration and welfares e.g. annual health check up, cost of medical care, clothes, and
recreational activities i.e. internal sport activity, arranging of merit making on the birthday month, and etc.
2. Establishing the Provident Fund
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 for the amount of 2% of the total salary of the Company
• 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 effi ciency of personnel to be able to perform their work more eff ectively.
4. Giving opportunity to staff to express opinion or complain on unjust issues via e-mail to the Managing Director.
42
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 fi nd 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 policy to support social activity by creating the project to support the activity that may benefi t the
community and society as follows:
1. Computer Laboratory Project. To create opportunity for primary school student in learning through internet which have
been delivered for 3 provinces totaling of 4 schools.
2. School Kid’s Toilet. Project. The Company has joined with business partner to build and develop hygienic condition of
toilet for the remote schools in upcountry, and foster the correct direction of use. Up to 2008, the Company has built toilets
in 12 provinces 49 schools totaling 526 bathrooms.
The Company has planned to complete both projects in every province the Company has branches.
The Company also concerns about the safety on working of the staff . The Company has given additional knowledge about
safety for fi re, chemical, electricity or other danger that may be occurred while working, which has covered more than that has been
prescribed by law.
For the environment, the Company has the ventilation system and waste water treatment which have been better than the
standard, regulations stipulated by law, and has given knowledge and arranged activity to promote the economical use of natural
resources to the staff .
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 fi nancial reports and material information that
aff ect 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 offi ce 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 specifi ed 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 notifi ed 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 qualifi cation to be the director
before the Company will send a notice calling for the meeting through web site.
43
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 2008.
One on One meeting The Company has arranged for the shareholders and institution investors from overseas to meet as One
and Company visit on One meeting for business activities totaling 42 times.
Moreover, the Company also has the project to take the group of shareholders, retail investors, group of
young investors under the program of the Stock Exchange and analyst to visit, to understand the busi
ness operation of the Company.
Road show In 2008, the Company has met the investors outside the offi ce for both domestic and abroad as follows:
1. Having met foreign investors as arranged by Financial Institution in Thailand twice.
2. Meeting with institution investors of both domestic and international as arranged by the Stock
Exchange in the Thailand Focus event once.
3. Joining the Conference and road show and having met with foreign institution investors in
Singapore and Hong Kong for 3 times.
Making statement The Company has made the press conference twice about the annual report on business operation of
and relationship year 2007 and direction to operate business in 2008, and report the result of operation for the fi rst 6
with the media. months of 2008 to the media, and at the same time, the Company has as well prepared the Press Release
for the media.
And for the past year, the Company has arranged for the special interview with the executive twice,
through the Money Channel in relation to the total tendency of business operation of the Company.
5. Board Responsibilities Board of Directors of the Company consists of 12 persons as follows:
1. Directors who are Executive Director for 4 persons.
2. Directors who are Non-Executive Director for 5 persons.
3. Independent Directors and Audit Committee for 3 persons.
• 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 effi ciency and
eff ectiveness. 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, suffi ciency of
the disclosure of information and the reliability of fi nancial report, Corporate Governance and internal control of the Company which
have details of obligations as specifi ed 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.
44
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 benefi ts 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 fi rst 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 2008, there was no arrangement of such fi rst 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 fi xing 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 2008, the Company had 12 times of Board of Directors Meeting and the meeting of Sub-Committee i.e. 9 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:
1. Mr. Anant Asavabhokhin 12 / 12
2. Mr. Pong Sarasin 10 / 12
3. Mr. Rutt Phanijphand 12 / 12 9 / 9 3 / 3
4. Mr. Joompol Meesook 11 / 12
5. Mr. Apichat Natasilapa 10 / 12 3 / 3
6. Mrs. Suwanna Buddhaprasart 10 / 12
7. Mr. Manit Udomkunnatum 12 / 12 8 / 9
8. Mr. Naporn Soonthornchitcharoen 12 / 12 9 / 9
9. Mr. Khunawut Thumpomkul 12 / 12 9 / 9
10. Mr. Apilas Osatananda 11 / 12 12 / 12
11. Mr. Thaveevat Tatiyamaneekul 12 / 12 12 / 12
12. Mr. Chanin Roonsumran 12 / 12 12 / 12 3 / 3
Name – Surname
Attendance / Number of all meetings (times)
Board of Director Executive Director Audit Committee
Nomination and Remuneration
Committee
45
• 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 Com
pany 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.
• 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.
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 .
Moreover, there was a proposal to appoint the auditor to evaluate effi ciency of internal accounting control of the Company
which the resolution of the shareholders in 2008, approved to appoint the auditor from Ernst & Young Co., Ltd., by
Mrs. Nongrak Pumnoi, an auditor License number 4172 as the auditor of the Company and its subsidiaries for the year 2008.
46
On February 5, 2009, the Board of Directors, Audit Committee and management evaluated the Company’s internal control system.
The evaluation was done on the following fi ve criteria:
1. Organization and Environment The Board of Directors opines that the Company has clear organization chart and has specifi ed scope of authority, responsibility of
each department in writing, having specifi ed clear target of business operation which is measurable, which the setting of the target and
work plan the management and each executive of each fi eld 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 the policy, working rules, and Code of Conduct in relation to Ethics, the Company shall occasionally consider to change it to be
appropriate to the changing situation, by considering the laws and regulations and the eff ect that may be occurred to the interest person.
Beside causing the fair result to every part, it is also an obstruction of possibility for the occurrence of fraud.
2. Risk Management The Board of Directors opines that the group of executives has regularly considered and evaluated the risks that may aff ect the result
of operation of the Company, by specifying operation plan of every year and fi xed 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 notifi ed 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 specifi ed 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 informa-
tion 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 sup-
plement to records properly. The Company hired Brambles (Thailand) Co., Ltd., a document retaining company, as the document keeper
with the appropriate controlling system.
5. Monitoring 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.
In case there is an internal audit, the Company has required the internal auditor to report the result directly to the Board of Directors
or the Audit Committee, in order for the auditor to perform its duties independently and propose the auditing report in open manner.
Apart form this, the Company’s auditor, Mrs. Nonglak Pumnoi, the auditor with certifi ed license no. 4172 of Ernst & Young Offi ce Co.,
Ltd, as the auditor of the Company for the year end on December 31, 2008 has given her comment on the assessment of the effi ciency of the
internal control of the Company’s accounting that no signifi cant weak points were found in the internal audit system on the accounting.
I n t e r n a l C o n t r o l
47
D i v i d e n d P o l i c y
Dividend 2005 2006 2007
Baht per share 0.20 0.12 0.18
1. Land and Houses Plc. and subsidiary
• Being a major shareholder of the Sale of goods 10,460 9,293 Such value was the
Company by holding 29.71% of total Account Receivable 2,261 1,708 appropriate selling price as
paid-up capital, as of April 23, 2008. it was the same as the
• With 2 co-directors : market price which the
1. Mr. Anant Asavabhokhin Company sales to the other
2. Mr. Naporn Soonthornchitcharoen manufacturers or sellers.
2. Quality Houses Plc. and subsidiary
• Being a major shareholder of the Sale of goods 871 2,702 Such value was the
Company by holding 20.84% of total Account Receivable 66 336 appropriate selling price as
paid-up capital, as of April 23, 2008. it was the same as the
• With 4 co-directors : market price which the
1. Mr. Rutt Phanijphand Company sales to the other
2. Mr. Anant Asavabhokhin manufacturers or sellers.
3. Mrs. Suwanna Buddhaprasart
4. Mr. Joompol Meesook
R e l a t e d T r a n s a c t i o n s
Remark : 1. The Company increased its registered capital from Baht 977,343,641 to Baht 1,938,146,860, as resolved by an Extraordinary Shareholders
Meeting No. 1/2549 on October 31, 2006.
2. The Company increased its registered capital from Baht 1,938,146,860 to Baht 1,988,546,860 as resolved by 2008 Annual Shareholders Meeting
on April 4, 2008.
Name of Company / Nature of relationship TransactionAmount (Thousand Baht)
31 Dec 08 31 Dec 07
Audit Committee and Management’s opinion
The Company has the policy to pay dividend to shareholders not less than 40% of the net profi t of each year. However, the
consideration for dividend payment will take other factors into account such as result of operation and fi nancial 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 2005 – 2007 is as follows:
During the years, the Company and its subsidiary had signifi cant business transactions with related parties, which have been con-
cluded on commercial terms and bases agreed upon in the ordinary course of business between the Company and those companies.
As of December 31, 2008 and 2007, the Company had outstanding balance with the related transaction, which can be summarized
as follows:
48
3. Land and Houses Retail Bank Plc.
• With co-shareholders: Interest income 1,647 270 The Company received the
1. Land and Houses Plc. Deposit with fi nancial institution 435,140 134 interest with the same rate
2. Quality Houses Plc. as other customers of the
• With co-directors: bank, such rate was a
1. Mr. Anant Asavabhokhin normal rate of other banks
2. Mr. Rutt Phanijphand and fi nancial institutions.
3. Mr. Naporn Soonthornchitcharoen
4. Mrs. Suwanna Buddhaprasart
4. Quality Construction Products Plc.
and subsidiary
• Land and Houses Plc. and Purchase of goods 5,329 1,423 Such value was the
Quality House Plc. are the major Other Receivable 6 3 appropriate purchase price
shareholders of Quality Construction Trade Accounts Payable 2,264 20 because it was the same
Products Plc. by holding 31.41% market price which the
and 24.33% respectively, Company could purchase
as of February 20, 2008. from other manufacturers or
• With 4 co-directors: sellers.
1. Mr. Anant Asavabhokhin
2. Mr. Pong Sarasin
3. Mr. Naporn Soonthornchitcharoen
4. Mr. Joompol Meesook
5. Quality Houses Property Fund
• With co-shareholders
1. Quality Houses Plc. Rental and service expenses 18,575 16,747 Such value was generated
2. Land and Houses Plc. Other Payable 1,307 1,661 from the transactions of rent
Rental guarantee deposit 3,000 3,000 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 benefi t 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.
Name of Company / Nature of relationship TransactionAmount (Thousand Baht)
31 Dec 08 31 Dec 07
Audit Committee and Management’s opinion
49
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.
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 specifi cation 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 confl ict of benefi t, or
may have confl ict 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 infor-
mation 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 fi nancial statement audited by the Auditor of the Company.
50
F i n a n c i a l A n a l y s i s and B u s i n e s s O p e r a t i o n R e s u l t s
Overview of Business Operation Results During the last 3 years, economy of the country has been aff ected by various factors including political uncertainties, problems from
natural disaster, increase in oil price, and decrease of consumer confi dence. These all have eff ects to almost every business sector, including
retail business.
The Company realized the above factors and looked for measures and strategies for appropriate use. This can be seen from the
Company’s operation result which still maintained the growth over previous year.
The forced factors of the Company’s operation results were the increase of branches from 26 branches in 2006 to 30 branches in
2007 and 33 branches in 2008, sales growth increase of the newly opened branches, effi ciency of inventory cost management, revenue from
space rental services business, revenues of HomePro EXPO, etc.
Operating Result Comparing the result of operation for year ended 31st December 2008 to the same period of year 2007.
1. Revenue from Sales
In 2008, the Company and its subsidiary generated the revenue from sales of Baht 18,540.27 million, increased from year
2007 by Baht 2,597.00 million or 16.29%. The increase was mainly driven by the sales of the newly opened branches during 2007 to
2008, and from the sales from HomePro EXPO in the 1st and 4th quarter of the year.
2. Other Revenues
In 2008, the Company and its subsidiary generated other revenues of Baht 1,283.91 million, increased from 2007 by Baht
211.98 million or 19.77%, from the following transactions:
• Revenue from rental and service fee, increased from the previous year by Baht 55.91 million, from space rental revenue of
Rayong branch which has operated in December 2006, from the HomePro EXPO No. 7 and 8, and from rental business of its
subsidiary.
• Other Revenues of Baht 517.72 million, increased from the previous year by Baht 156.07 million, revenue from advertising
fee, support fee of promotional activities from business partners, service fee in relating to sales of goods and other revenues
of its subsidiary.
3. Cost of Sales and Gross Profi t Margin
In 2008, the Company and its subsidiary had the cost of sales of Baht 14,146.73 million, increased from the previous year by
1,864.50 million or 15.18%, which was the result of the increase of sales.
The Company had gross profi t of Baht 4,393.54 million, increased from the previous year of Baht 732.50 million. The gross
profi t margin as percent to sales was 23.70%, moved up from the previous year of 22.96%.
The increase of gross profi t was resulted by the increase in effi ciency of inventory management system as well as 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 and private brand products.
51
4. Selling and Administrative Expenses
In 2008, the Company and its subsidiary had selling and administrative expenses amounted to Baht 4,191.90 million,
increased from the previous year by Baht 613.27 million or 17.14%. The proportion as percent to sales increased from 22.45% to
22.61%, details of expenses in each group are as follows:
• Selling expenses of Baht 3,382.11 million, being expenses for branches, operation and distribution unit, increased by
Baht 466.70 million from expense on salary and remuneration, space rental and service fee of newly opened branches in
2008, transportation fee, expenses on sales promotion, and depreciation.
• Administrative expenses of Baht 779.48 million, mostly being expenses of Head Offi ce, increased by Baht 171.27 million
from the expenses of salary and remuneration, consultation, tax, and fees.
• Other expenses amounted to Baht 30.31 million, decreased by Baht 24.70 million.
5. Financial Expenses
Financial Expenses of year 2008 were Baht 175.12 million, decreased from the previous year by Baht 40.71 million or 23.25%.
The proportion as percent to sales decreased from 1.10% to 0.72%, which the major factor was driven by the decrease of paid
interest from partial payment of long-term loan and the lower of interest rate.
6. Net Profi t
For the result of operation in 2008, the Company and its subsidiary had net profi t of Baht 959.42 million, increased from the
previous year by Baht 249.04 million or 35.06 %. The increase of net profi t 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 profi t to sales to
move up from 4.46% to 5.17%.
7. Return on Equity
As of 31st December 2008 and 31st December 2007, the Company and its subsidiary had return on equity of 20.68% and
17.41% respectively. The increase of return on equity in 2008 was caused by the increase in profi tability in 2008.
Financial Status Comparing fi nancial status as at 31st December 2008 and 31st December 2007.
1. Net Assets
As at 31st December 2008, the Company and its subsidiary had total assets of Baht 13,369.07 million, increased from
31st December 2007 by Baht 1,094.78 million or 8.92%. The growth of asset value was from the change of signifi cant transactions
as follows:
• Cash and cash equivalents increased by Baht 368.71 million which was from the increase in bank deposit received from
issuance of debenture and outstanding cash at branches at the year end date.
• Net inventory increased by Baht 180.51 million, which was a result from inventory for new branches.
• Net Property, plant and equipment, and net leasehold rights and software totaling increased by Baht 497.13 million or
5.54%, which was from the investment in new store expansion in year 2008 and 2009 and net off accumulated
dapreciation.
• Other assets increased by Baht 48.43 million.
52
Not yet Due 127.42 129.11 125.32 122.59
Past Due:
• Up to 6 months 16.66 17.49 14.05 16.96
• 6 – 12 months 0.01 - 0.01 -
• Over12 months 16.52 17.77 16.52 17.77
Total 160.63 164.37 155.91 157.32
Transactions31 Dec 2008 31 Dec 2007 31 Dec 2008 31 Dec 2007
Consolidated Financial Statement Separate Financial Statement
(Unit : Million Baht)
Accounts Receivable
As of December 31, 2008, the Company and its subsidiary had total net accounts receivable of Baht 134.98 million,
decreased by Baht 8.60 million or 5.99% from December 31, 2007. The details on due period of accounts receivable can be
summarized according to the schedule as following:
As of December 31, 2008, the Company and its subsidiary had overdue accounts receivable exceeding 12 months of
Baht 16.52 million, which was partly from the debtors who had diffi culty relating to their operation aff ected by the economic
situation in 1997. However, the Company had already proceeded with lawsuits and set provisions for bad debts. As of
December 31, 2007 and December 31, 2008, the Company set allowance for doubtful bad debts for the said debtors of Baht
20.78 million, and Baht 25.64 million, respectively.
2. Liabilities
As of December 31, 2008, total liabilities of the Company and its subsidiary were Baht 8,412.86 million increased from
2007 by Baht 462.05 million or 5.81%, which was from the change of the following crucial transactions:
• Overdraft funds and short-term loan from fi nancial institution were decreased for Baht 430.18 million.
• Accounts Payable was increased for Baht 490.80 million which was from the increase according to sales.
• Repayment of hire-purchase agreements and repayment of loan at the amount of Baht 408.46 million.
• Debenture - net was increased for Baht 550 million.
• Accrued expenses increased by Baht 141.82 million and deposit received for goods increased by Baht 56.25 million,
which the major factor was from increase in deposit of HomePro EXPO and increase in cost of promotional activities.
• Other debts were increased for Baht 61.82 million.
3. Shareholder Equipment
As of December 31, 2008, the shareholder equity was Baht 4,956.21 million, increased from December 31, 2007 by Baht
632.73 million or 14.63% which the increase was from following transactions:
• Issuance of paid-up ordinary shares at the amount of Baht 8.69 million, increased from the conversion of the warrant
under ESOP scheme No.2, 3 and 4.
• Retained earning was increased by Baht 612.93 million, which increased from the net profi t in year 2008 at the
amount of Baht 959.42 million and payment of dividend in year 2007 at the amount of Baht 346.49 million.
4. Capital Structure
As of December 31, 2008, the Company and its subsidiary had Total Debt to Equity ratio at 1.70 times, decreased from
December 31, 2007 at 1.84 times, as a result of the repayment of short-term loan and long-term loan, repayment of
Debenture, and the increase of retained earnings.
53
Transactions2008 2007 2008 2007
Consolidated Financial Statement Separate Financial Statement
Cash from operating activities 2,263.24 1,652.22 2,243.58 1,650.47
Cash from investing activities (1,279.21) (1,154.88) (1,278.02) (1,150.91)
Cash from fi nancing activities (615.32) (432.23) (605.32) (422.23)
Net increase (decrease) in cash 368.71 65.11 360.24 77.33
(Unit : Million Baht)
Liquidity Summary of cash fl ow statement as of December 31, 2008 compared to the same period of 2007.
As of December 31, 2008, the Company and its subsidiary’s cash and cash equivalents were Baht 603.79 million, net increased from
December 31, 2007 by Baht 368.71 million, which derived from the following activities:
1. Net cash from operating activities of Baht 2,263.24 million which were received from the net profi t of Baht 959.42 million,
depreciation and amortization of Baht 728.27 million, including change of current assets and current liabilities e.g. accounts
payable increased by Baht 490.78 million, deposit received for goods increased by Baht 56.25 million, accrued expenses
increased by Baht 136.93 million, other transactions increased by Baht 192.56 million, net cash paid for inventory, increased by
Baht 239.88 million, and other receivables increased by Baht 61.09 million.
2. Net cash paid for investing activities of Baht 1,279.21 million which was paid for investment in fi xed asset for new store expansion
in 2008 for the amount of Baht 1,012.40 million, computer software for Baht 31.15 million, and investment in the leasehold rights
for new branch opening in year 2008 and 2009 for Baht 236.53 million.
3. Net cash used in fi nancing activities of Baht 615.32 million received from the issuance of debenture of Baht 1,130 million,
including the increase of ordinary shares from the conversion of warrant of employee (ESOP – W2, W3 and W4) amounted to
Baht 19.80 million, the repayment of short-term loan and long-term loan of Baht 430.18 million and Baht 400 million respectively,
the repayment for debenture of Baht 580 million, and payment of dividend from the profi t in the year 2007 for Baht 346.49 million.
Liquidity Ratio
As of 31st December 2008, the liquidity ratio of the Company and its subsidiary was at 0.62 times, increased from 31st
December 2007 at 0.56 times due to the increase of current assets which was higher than the current liabilities.
• Total current asset increased by Baht 582.62 million, major cause was the allowance for stock obsolescence increased by
Baht 180.51 million and the cash and cash equivalents increased by Baht 368.71 million.
• Total current liabilities increased by Baht 395.86 million, the major cause of the increase was from the increase of
accounts payable of Baht 490.80 million, debenture which to be matured within 1 year at the amount of Baht 160 million
and the increase of accrued expenses of Baht 141.82 million.
Auditing Fee According to the minutes of the annual general shareholders meeting in 2008, which resolved to appoint the Auditors of Ernst &
Young Offi ce Co., Ltd as the Company’s auditor of year 2008, with the fee of Baht 2,400,000.
The actual audit fee of year 2008 includes auditing fee for the Company and its subsidiary at the amount of Baht 2,250,000 and other
services fee at the amount of Baht 100,000, totaling Baht 2,350,000.
54
R e p o r t o f B o a r d o f D i r e c t o r s ’ R e s p o n s i b i l i t i e s i n t h e F i n a n c i a l S t a t e m e n t s
Dear Shareholders
The accompanying consolidated fi nancial statements of Home Product Center Public Company Limited and subsidiaries 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, suffi cient to
maintain the assets and to protect from fraud, and is responsible for the fi nancial report of the Company and its subsidiary in order to ensure
that it shows the actual result of operation, fi nancial status, and cash fl ows. There have been proper recording of accurate and complete
accounting information. Preparing of the fi nancial 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 suffi cient signifi cant information in the
supplementary to the fi nancial statements
(Mr. Anant Asavabhokhin)
Chairman
(Mr. Khunawut Thumpomkul)
Managing Director
55
A u d i t C o m m i t t e e’ s R e p o r t
Dear Shareholders
The Audit Committee consists of 3 independent directors being Mr. Apilas Osatanon, as Chairman, Mr. Thaveevat Tatiyamaneekul and
Mr. Chanin Roonsumran, as directors, having the duty to examine the reliability of fi nancial statement.
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 suffi cient fi nancial report, have effi cient corporate governance and internal control system, have the com-
pliance with relevant laws and regulations, have monitored the transaction which may have confl ict of interest in order to be in compliance
with the relevant rules and regulations and to earn the utmost benefi ts to the company, as well as the selection and proposing the opinion
for appointment of the external auditor.
For the year 2008, 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 essence of the work having
been performed can be summarized as follows:
Essence of the Work Performed in year 2008
1. Having considered the review, improvement and amendment to the charter of the Audit Committee to be consistent with the
Announcement of the Stock Exchange of Thailand regarding the Qualifi cation and Scope of the Proceeding of the Audit Committee
of year 2008.
2. Having considered and review the quarterly fi nancial report of the company and the annual fi nancial statements before such were
disclosed to the Stock Exchange of Thailand and the Offi ce of the Securities and Stock Exchange Commission, which such was made
in the agenda of the review of the fi nancial report of the company.
3. Having considered the selection and nomination of company’s external 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.
4. Having convened with the external auditor for 4 times for considering the guidelines for the performance and scope for the
proceeding to examine the accounting, for the review of the audit plan, for the result of the audit and recommendation in order to
ensure that the audit of the fi nancial 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.
5. Having had the meeting with the Offi ce 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 2008, the audits were made to evaluate the suffi ciency and effi ciency 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 eff ectiveness and effi ciency to the
internal control system.
6. 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.
7. Having considered the disclosure of information, inter and related transactions and the transaction which may have confl icts of
interest.
8. Having made the evaluation of the suffi ciency 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.
56
A u d i t C o m m i t t e e’ s R e p o r t ( c o n t i n u e d )
The Audit Committee has the following opinion;
1. The fi nancial report of the Company is reliable, accurate and complete according to the generally accepted accounting principle
and has suffi ciently and timely disclosed material information.
2. The company has suffi cient and effi cient internal control system, risks management system, system of operational control of the
management, 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 fi nancial statements are independent, have no relation or
transaction which may cause confl icts 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 effi cient and transparent.
5. The entering into the transaction with related business or the entering into the transaction which may have confl icts of interest have
been made in accordance with the law, the rules of the Stock Exchange of Thailand, with appropriate reason for the utmost benefi ts
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)
Chairman of the Audit Committee
57
I n d e p e n d e n t A u d i t o r ‘ s R e p o r t
To the Shareholders of Home Product Center Public Company Limited
I have audited the accompanying consolidated balance sheets of Home Product Center Public Company Limited and its subsidiary
as at 31 December 2008 and 2007, the related consolidated statements of income, changes in shareholders’ equity and cash fl ows for
the years then ended, and the separate fi nancial statements of Home Product Center Public Company Limited for the same years. These
fi nancial statements are the responsibility of the Company’s management as to their correctness and the completeness of the presentation.
My responsibility is to express an opinion on these fi nancial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the fi nancial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the fi nancial statements. An audit also includes
assessing the accounting principles used and signifi cant estimates made by management, as well as evaluating the overall fi nancial statement
presentation. I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the fi nancial statements referred to above present fairly, in all material respects, the fi nancial position of Home Product
Center Public Company Limited and its subsidiary and of Home Product Center Public Company Limited as at 31 December 2008 and 2007,
and the results of their operations and cash fl ows for the years then ended, in accordance with generally accepted accounting principles.
Nonglak Pumnoi
Certifi ed Public Accountant (Thailand) No. 4172
58
Assets
Current assets
Cash and cash equivalents 9 603,788,150 235,075,012 579,894,685 219,650,478
Trade accounts receivable - net 6, 9 134,983,014 143,581,753 130,267,530 136,533,570
Inventories - net 7 2,728,078,526 2,547,568,876 2,728,078,526 2,547,568,876
Value added tax receivable 11,263,216 43,003,697 11,263,216 43,003,697
Other receivables 9 297,520,307 236,434,479 304,448,556 237,221,877
Other current assets 70,844,841 58,191,986 58,369,602 40,119,196
Total current assets 3,846,478,054 3,263,855,803 3,812,322,115 3,224,097,694
Non-current assets
Investment in subsidiary 8 - - 4,999,300 4,999,300
Property, plant and equipments - net 10 8,613,170,787 8,339,581,890 8,602,413,768 8,326,000,801
Computer software - net 11 130,162,250 116,144,593 130,155,574 116,136,972
Leasehold rights - net 12 722,963,659 513,439,644 722,963,659 513,439,644
Property foreclosed 4,174,122 4,174,122 4,174,122 4,174,122
Rental guarantee deposits 9 38,390,882 34,618,986 38,390,882 34,618,986
Other non-current assets 13,731,996 2,469,082 2,964,574 2,469,082
Total non-current assets 9,522,593,696 9,010,428,317 9,506,061,879 9,001,838,907
Total assets 13,369,071,750 12,274,284,120 13,318,383,994 12,225,936,601
The accompanying notes are an integral part of the fi nancial statements.
B a l a n c e s h e e t sAs at 31 December 2008 and 2007
Note2008 2007 2008 2007
Consolidated fi nancial statements Separate fi nancial statements
(Unit : Baht)
59
The accompanying notes are an integral part of the fi nancial statements.
B a l a n c e s h e e t s ( c o n t i n u e d )As at 31 December 2008 and 2007
Liabilities and shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans
from fi nancial institutions 13 124,823,805 555,000,000 124,823,805 555,000,000
Trade accounts payable 9 3,697,157,646 3,206,355,160 3,692,452,199 3,202,571,172
Current portion of liabilities under
fi nancial lease agreements 14 9,295,721 12,935,623 9,295,721 12,935,623
Short-term loans from related party 9 - - 60,000,000 50,000,000
Current portion of debentures 15 660,000,000 500,000,000 660,000,000 500,000,000
Current portion of long-term loans 16 300,000,000 400,000,000 300,000,000 400,000,000
Payables from purchases of assets 113,838,115 142,470,097 113,838,115 142,470,097
Accrued expenses 380,940,852 239,122,621 365,069,614 218,636,515
Corporate income tax payable 166,962,762 136,842,786 166,962,762 136,842,786
Advances received from customers 443,928,321 387,675,054 443,928,321 387,675,054
Other payables 9 1 98,309,742 153,505,090 187,111,688 147,232,610
Other current liabilities 108,293,461 73,788,395 106,646,011 72,058,688
Total current liabilities 6,203,550,425 5,807,694,826 6,230,128,236 5,825,422,545
Non-current liabilities
Liabilities under fi nancial lease
agreements - net of current portion 14 5,470,378 10,289,163 5,470,378 10,289,163
Debentures - net of current portion 15 890,000,000 500,000,000 890,000,000 500,000,000
Long-term loans - net of current portion 16 675,000,000 975,000,000 675,000,000 975,000,000
Rental received in advance 26.2 542,793,413 564,403,473 542,793,413 564,403,473
Other non-current liabilities 96,046,295 93,418,356 30,228,946 33,317,801
Total non-current liabilities 2,209,310,086 2,143,110,992 2,143,492,737 2,083,010,437
Total liabilities 8,412,860,511 7,950,805,818 8,373,620,973 7,908,432,982
Note2008 2007 2008 2007
Consolidated fi nancial statements Separate fi nancial statements
(Unit : Baht)
60
Shareholders’ equity
Share capital 17, 18
Registered share capital
1,986,468,146 ordinary shares
of Baht 1 each
(2007: 1,988,546,860 ordinary shares
of Baht 1 each) 1,986,468,146 1,988,546,860 1,986,468,146 1,988,546,860
Issued and paid-up share capital
1,933,610,600 ordinary shares
of Baht 1 each
(2007: 1,924,920,422 ordinary shares
of Baht 1 each) 1,933,610,600 1,924,920,422 1,933,610,600 1,924,920,422
Share premium 566,804,398 555,694,063 566,804,398 555,694,063
Retained earnings
Appropriated - statutory reserve 19 178,400,000 130,700,000 178,400,000 130,700,000
Unappropriated 2,277,393,938 1,712,162,281 2,265,948,023 1,706,189,134
Equity attributable to the
Company’s shareholders 4,956,208,936 4,323,476,766 4,944,763,021 4,317,503,619
Minority interest - equity attributable to
minority shareholders of subsidiary 2,303 1,536 - -
Total shareholders’ equity 4,956,211,239 4,323,478,302 4,944,763,021 4,317,503,619
Total liabilities and shareholders’ equity 13,369,071,750 12,274,284,120 13,318,383,994 12,225,936,601
B a l a n c e s h e e t s ( c o n t i n u e d )As at 31 December 2008 and 2007
Note2008 2007 2008 2007
Consolidated fi nancial statements Separate fi nancial statements
(Unit : Baht)
The accompanying notes are an integral part of the fi nancial statements.
61
I n c o m e s t a t e m e n t sFor the years ended 31 December 2008 and 2007
Note2008 2007 20072008
Consolidated fi nancial statements Separate fi nancial statements
(Unit : Baht)
The accompanying notes are an integral part of the fi nancial statements.
Revenues
Sales income 9 18,540,272,456 15,943,275,956 18,541,729,829 15,943,895,012
Rental and service income 9 610,121,551 554,214,345 506,108,373 455,765,862
Other income 9 673,791,205 517,723,315 696,128,323 534,636,075
Total revenues 19,824,185,212 17,015,213,616 19,743,966,525 16,934,296,949
Expenses
Cost of sales 9 14,146,727,776 12,282,229,303 14,146,727,776 12,282,229,303
Selling expenses 9 3,382,111,383 2,915,410,490 3,313,373,594 2,845,773,538
Administrative expenses 9 779,478,902 608,212,551 773,920,598 602,363,491
Other expenses 30,307,413 55,003,706 30,211,710 55,000,282
Total expenses 18,338,625,474 15,860,856,050 18,264,233,678 15,785,366,614
Income before fi nancial cost and
corporate income tax 1,485,559,738 1,154,357,566 1,479,732,847 1,148,930,335
Financial cost 9 (134,409,118) (175,117,118) (136,022,575) (177,349,787)
Income before corporate income tax 1,351,150,620 979,240,448 1,343,710,272 971,580,548
Corporate income tax (391,730,900) (268,864,300) (389,764,087) (266,804,807)
Net income for the year 959,419,720 710,376,148 953,946,185 704,775,741
Net income attributable to:
Equity holders of the parent 959,418,953 710,375,364 953,946,185 704,775,741
Minority interests of the subsidiary 767 784
959,419,720 710,376,148
Earnings per share 21
Basic earnings per share
Net income attributable to equity
holders of the parent 0.50 0.37 0.49 0.37
Diluted earnings per share
Net income attributable to equity
holders of the parent 0.49 0.37 0.49 0.36
62
Cash fl ows from operating activities
Net income before tax 1,351,150,620 979,240,448 1,343,710,272 971,580,548
Adjustments to reconcile net income before tax to
net cash provided by (paid for) operating activities:
Depreciation and amortisation 728,267,920 657,085,722 724,353,707 653,931,534
Allowance (reversal) for doubtful accounts 4,857,895 (4,455,502) 4,857,895 (4,455,502)
Allowance for stock obsolescence 59,375,259 41,041,011 59,375,259 41,041,011
Loss from sales of assets 4,635,329 12,003,705 4,539,626 12,000,281
Allowance for impairment of assets 20,540,000 43,000,000 20,540,000 43,000,000
Unrealised exchange losses - net 24,532 215,390 24,532 215,390
Interest expenses 124,228,618 169,082,407 125,960,878 171,383,736
Income from operating activities before changes in
operating assets and liabilities 2,293,080,173 1,897,213,181 2,283,362,169 1,888,696,998
Decrease (increase) in operating assets
Trade accounts receivable 3,740,844 (2,279,166) 1,408,145 (628,468)
Inventories (239,884,909) (92,931,781) (239,884,909) (92,931,781)
Value added tax receivable 31,740,481 36,926,450 31,740,481 36,926,450
Rental guarantee deposit (3,771,896) (7,410,833) (3,771,896) (7,410,833)
Other receivables (61,085,828) (20,808,713) (67,226,679) (16,358,013)
Other current assets (8,911,590) 18,937,136 (18,250,406) 19,744,137
Other non-current assets (11,262,914) (688,435) (495,492) (688,435)
Increase (decrease) in operating liabilities
Trade accounts payable 490,777,954 128,751,886 489,856,495 127,943,828
Other payables 44,804,652 (749,768) 39,879,078 (946,697)
Advances received from customers 56,253,267 96,105,971 56,253,267 96,105,971
Accrued expenses 136,930,241 20,163,668 141,545,107 17,260,163
Other current liabilities 34,505,066 14,497,200 34,587,323 14,622,984
Rental received in advance (21,610,060) (22,670,843) (21,610,060) (22,670,843)
Other non-current liabilities 2,627,939 (23,818,857) (3,088,855) (22,762,696)
Cash from operating activities 2,747,933,420 2,041,237,096 2,724,303,768 2,036,902,765
Cash paid for interest expenses (119,402,301) (169,202,046) (121,134,561) (171,503,374)
Cash paid for corporate income tax (365,290,516) (219,813,535) (359,582,436) (214,931,754)
Net cash fl ows from operating activities 2,263,240,603 1,652,221,515 2,243,586,771 1,650,467,637
S t a t e m e n t s o f c a s h f l o w sFor the years ended 31 December 2008 and 2007
2008 2007 2008 2007
Consolidated fi nancial statements Separate fi nancial statements
(Unit : Baht)
The accompanying notes are an integral part of the fi nancial statements.
63
Cash fl ows from investing activities
Decrease in current investment - 525,000,000 - 525,000,000
Acquisition of software (31,147,714) (27,269,454) (31,147,714) (27,269,454)
Acquisition of leasehold rights (236,526,147) (2,506,000) (236,526,147) (2,506,000)
Proceeds from sales of assets 871,793 7,031,140 868,411 7,030,061
Acquisition of assets (1,012,403,732) (1,657,141,623) (1,011,215,449) (1,653,167,416)
Net cash used in investing activities (1,279,205,800) (1,154,885,937) (1,278,020,899) (1,150,912,809)
Cash fl ows from fi nancing activities
Increase (decrease) in bank overdrafts
and short-term loans from fi nancial institutions (430,176,195) 555,000,000 (430,176,195) 555,000,000
Increase in short-term loans from related party - - 120,000,000 10,000,000
Repayment of short-term loans from related party - - (110,000,000) -
Increase in long-term loans - 100,000,000 - 100,000,000
Decrease in liabilities under fi nancial
lease agreements (8,458,687) (10,891,985) (8,458,687) (10,891,985)
Increase in debentures 1,130,000,000 - 1,130,000,000 -
Repayment of debentures (580,000,000) - (580,000,000) -
Repayment of long-term loans (400,000,000) (851,000,000) (400,000,000) (851,000,000)
Converted warrants to share capital 19,800,513 5,102,018 19,800,513 5,102,018
Dividend paid (346,487,296) (230,438,927) (346,487,296) (230,438,927)
Net cash used in fi nancing activities (615,321,665) (432,228,894) (605,321,665) (422,228,894)
Net increase in cash and cash equivalents 368,713,138 65,106,684 360,244,207 77,325,934
Cash and cash equivalents at beginning of year 235,075,012 169,968,328 219,650,478 142,324,544
Cash and cash equivalents at end of year 603,788,150 235,075,012 579,894,685 219,650,478
Supplemental cash fl ows information: -
Non-cash items consist of
Decrease in payables from purchases of assets 28,631,982 82,005,015 28,631,982 82,005,015
S t a t e m e n t s o f c a s h f l o w s ( c o n t i n u e d )For the years ended 31 December 2008 and 2007
2008 2007 20072008
Consolidated fi nancial statements Separate fi nancial statements
(Unit : Baht)
The accompanying notes are an integral part of the fi nancial statements.
64
Balance as
at 31 December 2006 1,919,818,404 555,694,063 95,400,000 1,267,525,844 3,838,438,311 752 3,838,439,063
Net income for the year - - - 710,375,364 710,375,364 784 710,376,148
Dividend paid (Note 24) - - - (230,438,927) (230,438,927) - (230,438,927)
Unappropriated retained
earnings transferred to
statutory reserve - - 35,300,000 (35,300,000) - - -
Converted warrants to
share capital 5,102,018 - - - 5,102,018 - 5,102,018
Balance as
at 31 December 2007 1,924,920,422 555,694,063 130,700,000 1,712,162,281 4,323,476,766 1,536 4,323,478,302
Balance as
at 31 December 2007 1,924,920,422 555,694,063 130,700,000 1,712,162,281 4,323,476,766 1,536 4,323,478,302
Net income for the year - - - 959,418,953 959,418,953 767 959,419,720
Dividend paid (Note 24) - - - (346,487,296) (346,487,296) - (346,487,296)
Unappropriated retained
earnings transferred to
statutory reserve - - 47,700,000 (47,700,000) - - -
Converted warrants to
share capital 8,690,178 11,110,335 - - 19,800,513 - 19,800,513
Balance as
at 31 December 2008 1,933,610,600 566,804,398 178,400,000 2,277,393,938 4,956,208,936 2,303 4,956,211,239
Appropriated- statutory
reserve
Total equityattributable to
the parent’s shareholders
Share premium
S t a t e m e n t s o f c h a n g e s i n s h a r e h o l d e r s ’ e q u i t yFor the years ended 31 December 2008 and 2007
Issued andpaid-up
share capital TotalUnappropriated
Retained earnings
Equity attributable to the parent’s shareholders
Consolidated fi nancial statements
(Unit : Baht)
Minority interest - equity
attributableto minority of shareholders
subsidiary
The accompanying notes are an integral part of the fi nancial statements.
65
Appropriated- statutory
reserve
Sharepremium
Balance as at 31 December 2006 1,919,818,404 555,694,063 95,400,000 1,267,152,320 3,838,064,787
Net income for the year - - - 704,775,741 704,775,741
Dividend paid (Note 24) - - - (230,438,927) (230,438,927)
Unappropriated retained earnings
transferred to statutory reserve - - 35,300,000 (35,300,000) -
Converted warrants to share capital 5,102,018 - - - 5,102,018
Balance as at 31 December 2007 1,924,920,422 555,694,063 130,700,000 1,706,189,134 4,317,503,619
Balance as at 31 December 2007 1,924,920,422 555,694,063 130,700,000 1,706,189,134 4,317,503,619
Net income for the year - - - 953,946,185 953,946,185
Dividend paid (Note 24) - - - (346,487,296) (346,487,296)
Unappropriated retained earnings
transferred to statutory reserve - - 47,700,000 (47,700,000) -
Converted warrants to share capital 8,690,178 11,110,335 - - 19,800,513
Balance as at 31 December 2008 1,933,610,600 566,804,398 178,400,000 2,265,948,023 4,944,763,021
S t a t e m e n t s o f c h a n g e s i n s h a r e h o l d e r s ’ e q u i t yFor the years ended 31 December 2008 and 2007
Issued andpaid-up
share capitalTotal
Unappropriated
Retained earnings
Separate fi nancial statements
(Unit : Baht)
The accompanying notes are an integral part of the fi nancial statements.
66
2007
Percent
2007
Percent
2007
Percent
2008
Percent
2008
Percent
2008
Percent
Market Village company Limited 99.99 99.99 Thailand 0.47 0.44 1.16 1.26
Space
Rental
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 materials for construction, repair and maintenance 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 Decem-
ber 2008, the Company has a total of 33 branches (2007: 30 branches) located in Bangkok and other provinces.
2. Basis of preparation 2.1 The fi nancial statements have been prepared in accordance with accounting standards enunciated under the Accounting
Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notifi cation of the
Department of Business Development dated 14 September 2001, issued under the Accounting Act B.E. 2543.
The fi nancial statements in Thai language are the offi cial statutory fi nancial statements of the Company. The fi nancial statements in
English language have been translated from such fi nancial statements in Thai language.
The fi nancial 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 fi nancial statements include the fi nancial statements of the Company (“the Company”) and the following
subsidiary (“the subsidiary”):
N o t e s t o c o n s o l i d a t e d f i n a n c i a l s t a t e m e n t sFor the years ended 31 December 2008 and 2007
Company’s name Nature ofbusiness
Percentage ofshareholding
Country ofincorporation
Assets as apercentage
to the consolidatedtotal assets as at
31 December
Revenues as a percentage
to the consolidated total revenues for the
years ended31 December
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 fi nancial statements of the subsidiary are prepared for the same reporting period as the parent company, using
consistentsignifi cant accounting policies.
d) Material balances and transactions between the Company and its subsidiary have been eliminated from the consolidated
fi nancial 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.
2.3 The separate fi nancial statements, which present investment in subsidiary presented under the cost method, have been prepared
solely for the benefi t of the public.
67
3. Adoption of new accounting standards 3.1 Accounting standards which are eff ective for the current year
The Federation of Accounting Professions has issued Notifi cation No. 9/2550, 38/2550 and 62/2550 mandating the use of new
accounting standards as follows.
TAS 25 (revised 2007) Cash Flow Statements
TAS 29 (revised 2007) Leases
TAS 31 (revised 2007) Inventories
TAS 33 (revised 2007) Borrowing Costs
TAS 35 (revised 2007) Presentation of Financial Statements
TAS 39 (revised 2007) Accounting Policies, Changes in Accounting Estimates and Errors
TAS 41 (revised 2007) Interim Financial Reporting
TAS 43 (revised 2007) Business Combinations
TAS 49 (revised 2007) Construction Contracts
TAS 51 Intangible Assets
These accounting standards become eff ective for the fi nancial statements for fi scal years beginning on or after 1 January 2008.
The management has assessed the eff ect of these standards and believes that TAS 43 and TAS 49 are not relevant to the business of the
Company, while TAS 25, TAS 29, TAS 31, TAS 33, TAS 35, TAS 39, TAS 41 and TAS 51 do not have any signifi cant impact on the fi nancial
statements for the current year.
3.2 Accounting standards which are not eff ective for the current year
The Federation of Accounting Professions has also issued Notifi cation No. 86/2551 mandating the use of the following new
accounting standards.
TAS 36 (revised 2007) Impairment of Assets
TAS 54 (revised 2007) Non-current Assets Held for Sale and Discontinued Operations
These accounting standards will become eff ective for the fi nancial statements for fi scal years beginning on or after 1 January
2009. The management has assessed the eff ect of these accounting standards and believes that they will not have any signifi cant impact on
the fi nancial statements for the year in which they are initially applied.
4. Signifi cant accounting policies 4.1 Revenue recognition
Sales of goods Sales of goods are recognized when the signifi cant risks and rewards of ownership of the goods have passed to the buyer.
Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances.
Rendering of services Service revenue is recognized when services have been rendered taking into account the stage of completion.
Rental income Rental income under operating leases is recognized over the lease period.
Interest income Interest income is recognized on an accrual basis based on the eff ective interest rate.
68
4.2 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand, cash at bank, 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 realizable 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 realizable value.
Volume incentives received from the supplier are accounted for as a reduction of inventory purchases and recognized in
income statements when the related inventory is sold.
4.5 Investment
Investment in subsidiary is accounted for in the separated fi nancial statements using the cost method.
4.6 Property, plant and equipment/Depreciation
Land is stated at cost. Buildings and equipment are stated at cost amount less accumulated depreciation and allowance for l
osson 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 - lease periods but not over useful lives
Computer equipment - 3 - 10 years
Furniture, fi xtures and offi ce equipment - 5 - 10 years
Motor vehicles - 5 years
Depreciation is included in determining income.
No depreciation is provided on land and land improvement, and assets under installation and under construction.
4.7 Intangible assets
Intangible assets are measured at cost. Following initial recognition, intangible assets are carried at cost less any
accumulated amortization and any accumulated impairment losses (if any).
Intangible assets with fi nite lives are amortized 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 amortization period and the
amortization method of such intangible assets are reviewed at least at each fi nancial year end. The amortization expense
is charged to the income statement.
4.8 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 signifi cant
infl uence over the Company, key management personnel, directors and offi cers with authority in the planning and direction of
the Company’s operations.
69
4.9 Long-term leases
Leases of equipment and motor vehicles which transfer substantially all the risks and rewards of ownership are classifi ed as
fi nance leases. Finance leases are capitalized 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 fi nance 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 fi nance leases is depreciated over the useful life of the asset.
4.10 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.
4.11 Impairment of assets
At each reporting date, the Company performs impairment reviews in respect of the properly, plant and equipment and
other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment
loss is recognized 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 fl ows are discounted to their
present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks
specifi c 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, refl ects 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 recognized in the income statement.
4.12 Employee benefi ts
Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognized as expenses when
incurred.
4.13 Provisions
Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable that an
outfl ow of resources embodying economic benefi ts will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation.
4.14 Income tax
Income tax is provided in the accounts based on taxable profi ts determined in accordance with tax legislation.
70
5. Signifi cant accounting judgments and estimates The preparation of fi nancial 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
aff ect reported amounts and disclosures and actual results could diff er. Signifi cant judgments and estimates are as follows:
Leases
In determining whether a lease is to be classifi ed as an operating lease or fi nance lease, the management is required to use
judgment regarding whether signifi cant risk and rewards of ownership of the leased asset has been transferred, taking into
consideration terms and conditions of the arrangement.
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 profi le of outstanding debts and the prevailing economic condition.
Fair value of fi nancial instruments
In determining the fair value of fi nancial 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 fi nancial 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.
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 diff erent estimates and assumptions could aff ect the amounts of
marketing promotion expenses and adjustments to this expense may therefore be required in the future.
71
The outstanding balances of trade accounts receivable as at 31 December 2008 and 2007 are aged as follows:
Age of receivables
Not yet due 127,421,935 129,111,298 125,318,455 122,589,168
Past due:
Up to 6 months 16,664,851 17,488,329 14,052,847 16,962,275
6 - 12 months 14,724 - 14,724 -
Over 12 months 16,524,910 17,767,637 16,524,910 17,767,638
Total 160,626,420 164,367,264 155,910,936 157,319,081
Less: Allowance for doubtful accounts (25,643,406) (20,785,511) (25,643,406) (20,785,511)
Trade accounts receivable - net 134,983,014 143,581,753 130,267,530 136,533,570
Inventories 3,342,685,675 3,049,137,812
Less: Allowance for stock obsolescence (82,484,623) (61,590,238)
Net 3,260,201,052 2,987,547,574
Less: Inventories - repaid its cost when sold (437,617,125) (354,273,297)
Purchase discount (94,505,401) (85,705,401)
Inventories - net 2,728,078,526 2,547,568,876
7. Inventories
6. Trade accounts receivable
Trade accounts receivable 110,092,951 98,643,757 105,430,492 91,595,574
Check returned receivable 16,474,985 17,593,572 16,474,985 17,593,572
Credit card and coupon receivable 34,058,484 48,129,935 34,005,459 48,129,935
Total 160,626,420 164,367,264 155,910,936 157,319,081
Less: Allowance for doubtful accounts (25,643,406) (20,785,511) (25,643,406) (20,785,511)
Trade accounts receivable - net 134,983,014 143,581,753 130,267,530 136,533,570
2008
2008
2008
2007
2007
2007
2008
2008
2007
2007
Consolidated fi nancial statement
Consolidated fi nancial statement
Consolidated and separate fi nancial statements
Separate fi nancial statement
Separate fi nancial statement
(Unit : Baht)
(Unit : Baht)
(Unit : Baht)
72
8. Investment in subsidiary
Subsidiary
Market Village Company Limited 5,000,000 5,000,000 99.99 99.99 4,999,300 4,999,300 - -
Transactions with subsidiary company
(eliminated from consolidated
fi nancial statements)
Sale of goods - - 1,457,373 619,057 Market price
Rental and service income - - 118,957,492 106,898,021 Baht 9.5 - 11.0 million per month
for 2008 and Baht 6.5 - 9.4 million
per month for 2007
Other income - - 22,742,904 21,573,366 Percentage of core revenue
Service income - - 6,872,228 4,062,079 Actual cost
Interest expenses - - 1,732,260 2,301,329 3.40 - 4.25 percent per annum
(2007: 3.40 - 5.15 percent per annum)
Transactions with related companies
Sale of goods 11,331,640 11,994,808 11,331,640 11,994,808 Market price
Interest income 1,647,215 269,551 1,647,215 269,551 0.75 - 3.00 percent per annum
(2007: 0.50 percent per annum)
Purchase of goods 5,328,940 1,422,527 5,328,940 1,422,527 Market price
Rental and service expenses 18,575,202 16,747,295 18,575,202 16,747,295 Percentage of sales
2008 2008 20082007 2007 20072008(Percent)
2007(Percent)
Separate fi nancial statement
Paid-up capital Shareholding percentage Cost Dividend receivedduring the year
(Unit : Baht)
(Unit : Baht)
9. Related party transactions During the years, the Company and its subsidiary had signifi cant business transactions with related parties. Such transactions, which are
summarized 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.
2008 2007 2008 2007
Consolidatedfi nancial statement
Separatefi nancial statement Pricing policy
73
Consolidatedfi nancial statement
Separatefi nancial statement
Bill of exchanges and deposits with fi nancial institution
Land and Houses Retail Bank Plc.(1) 435,139,799 133,705 435,139,799 113,705
Trade accounts receivable
Land and Houses Plc. and subsidiaries(2) 2,261,237 1,708,202 2,261,237 1,708,202
Quality Houses Plc. and subsidiaries(2) 66,457 335,594 66,457 335,594
Market Village Co., Ltd. (eliminated from consolidated fi nancial statements) - - 177,860 131,821
Total 2,327,694 2,043,796 2,505,554 2,175,617
Other receivables
Quality Construction Products Plc. and subsidiaries(1) 6,420 3,210 6,420 3,210
Market Village Co., Ltd. (eliminated from consolidated fi nancial statements) - - 6,928,250 6,025,498
Total 6,420 3,210 6,934,670 6,028,708
Rental guarantee deposits
Quality Houses Property and Loans Funds(1) 3,000,000 3,000,000 3,000,000 3,000,000
Trade accounts payable
Quality Construction Products Plc. and subsidiaries(1) 2,263,542 20,801 2,263,542 20,801
Short-term loans from related party
Market Village Co., Ltd. (eliminated from consolidated fi nancial statements) - - 60,000,000 50,000,000
Other payables
Quality Houses Property and Loans Funds(1) 1,307,185 1,660,870 1,307,185 1,660,870
As at 31 December 2008 and 2007, the Company had the following outstanding balances with related parties: -
Relationship with the related companies
(1) has common shareholders
(2) the major shareholders
During the year 2008, movement in the balances of short-term loans from related party were as follows:
Subsidiary
Market Village Company Limited 50,000,000 120,000,000 (110,000,000) 60,000,000
(Unit : Baht)
(Unit : Baht)
20082008 20072007
As at1 January 2007
As at31 December 2008
During the year
Increase Decrease
74
Short-term loans from related party
The Company has received unsecured loans of Baht 60 million (2007: Baht 50 million) from subsidiary, on which interest is payable
on a monthly basis at a rate of 3.40 - 4.25 percent per annum. The loans are repayable at call.
Directors and management’s remuneration
During the year 2008, the Company and its subsidiary paid salaries, bonus, meeting allowance and gratuities to their directors and
management totaling Baht 12.55 million (2007: Baht 10.77 million).
In addition, during the year 2008 the Company has allocated 5,750,000 warrants (2007: 1,897,500 warrants) to the directors who
are the management of the Company and subsidiary without charge. The details of the warrants are presented in Note 18 to the fi nancial
statements.
10. Property, plant and equipment
Consolidated fi nancial statement
Cost:
As at 31 December 2007 2,226,314,998 6,063,352,525 246,609,302 1,587,594,457 30,383,285 53,454,683 10,207,709,250
Additions 137,700,504 58,571,821 32,891,213 153,796,616 7,637,991 593,173,605 983,771,750
Disposals - (1,984,550) (11,430,066) (14,154,443) (426,916) - (27,995,975)
Transfers in (out) 16,369,492 143,963,059 12,115,614 81,798,868 680,300 (254,927,333) -
As at 31 December 2008 2,380,384,994 6,263,902,855 280,186,063 1,809,035,498 38,274,660 391,700,955 11,163,485,025
Accumulated depreciation:
As at 31 December 2007 - 863,559,037 177,874,646 767,961,522 15,732,155 - 1,825,127,360
Depreciation for the year - 347,268,809 47,122,644 283,068,574 6,675,704 - 684,135,731
Depreciation on disposals - (535,589) (10,240,233) (11,286,116) (426,915) - (22,488,853)
As at 31 December 2008 - 1,210,292,257 214,757,057 1,039,743,980 21,980,944 - 2,486,774,238
Allowance for impairment loss:
As at 31 December 2007 13,000,000 30,000,000 - - - - 43,000,000
Increase during the year - 20,540,000 - - - - 20,540,000
As at 31 December 2008 13,000,000 50,540,000 - - - - 63,540,000
Net book value:
31 December 2007 2,213,314,998 5,169,793,488 68,734,656 819,632,935 14,651,130 53,454,683 8,339,581,890
31 December 2008 2,367,384,994 5,003,070,598 65,429,006 769,291,518 16,293,716 391,700,955 8,613,170,787
Depreciation for the year: (as included in administrative expenses)
2007 616,616,695
2008 684,135,731
Land and landimprovement
Buildings andbuilding
improvement
Computerequipment
Motorvehicles
Assets underinstallationand under
construction
Total
(Unit : Baht)
FurnitureFixtures
and offi ceequipment
75
Separate fi nancial statements
Cost:
As at 31 December 2007 2,226,314,998 6,062,706,808 246,447,879 1,572,046,900 29,786,239 51,198,248 10,188,501,072
Additions 137,700,504 58,571,821 32,833,434 152,933,112 7,637,991 592,906,605 982,583,467
Disposals - (1,984,550) (11,430,066) (13,997,382) (426,916) - (27,838,914)
Transfers in (out) 16,369,492 143,963,059 12,115,614 79,275,433 680,300 (252,403,898) -
As at 31 December 2008 2,380,384,994 6,263,257,138 279,966,861 1,790,258,063 37,677,614 391,700,955 11,143,245,625
Accumulated depreciation:
As at 31 December 2007 - 863,532,449 177,831,650 762,632,857 15,503,315 - 1,819,500,271
Depreciation for the year - 347,204,237 47,078,279 279,383,652 6,556,295 - 680,222,463
Depreciation on disposals - (535,589) (10,240,233) (11,228,140) (426,915) - (22,430,877)
As at 31 December 2008 - 1,210,201,097 214,669,696 1,030,788,369 21,632,695 - 2,477,291,857
Allowance for impairment loss:
As at 31 December 2007 13,000,000 30,000,000 - - - - 43,000,000
Increase during the year - 20,540,000 - - - - 20,540,000
As at 31 December 2008 13,000,000 50,540,000 - - - - 63,540,000
Net book value:
31 December 2007 2,213,314,998 5,169,174,359 68,616,229 809,414,043 14,282,924 51,198,248 8,326,000,801
31 December 2008 2,367,384,994 5,002,516,041 65,297,165 759,469,694 16,044,919 391,700,955 8,602,413,768
Depreciation for the year: (as included in administrative expenses)
2007 613,463,453
2008 680,222,463
Land and landimprovement
Buildings andbuilding
improvement
Computerequipment
Motorvehicles
Assets underinstallationand under
construction
Total
(Unit : Baht)
FurnitureFixtures
and offi ceequipment
As at 31 December 2008, the Company had vehicles and equipment under fi nance lease agreements with net book values amounting
to Baht 34 million.
As at 31 December 2008, certain plant and equipment items have been fully depreciated but are still in use. The original cost of those
assets amounted to approximately Baht 440.2 million (2007: Baht 197.5 million) (The Company only: Baht 440.2 million, 2007: Baht 197.5
million).
As at 31 December 2008, the Company has mortgaged buildings and leasehold rights net book value of Baht 576.5 million (Note 12)
(2007: Baht 603.6 million) to secure credit facilities from banks, as described in Notes 13 and 16.
76
11. Computer software
12. Leasehold rights
Cost
Balance as at 31 December 2007 179,658,574 179,649,118
Acquisitions during the year 31,147,714 31,147,714
Balance as at 31 December 2008 210,806,288 210,796,832
Accumulated amortization
Balance as at 31 December 2007 63,513,981 63,512,146
Amortization for the year 17,130,057 17,129,112
Balance as at 31 December 2008 80,644,038 80,641,258
Net book value
Balance as at 31 December 2007 116,144,593 116,136,972
Balance as at 31 December 2008 130,162,250 130,155,574
Cost
Balance as at 31 December 2007 624,925,311
Acquisitions during the year 236,526,147
Balance as at 31 December 2008 861,451,458
Accumulated amortization
Balance as at 31 December 2007 111,485,667
Amortization for the year 27,002,132
Balance as at 31 December 2008 138,487,799
Net book value
Balance as at 31 December 2007 513,439,644
Balance as at 31 December 2008 722,963,659
13. Bank overdrafts and short-term loans from fi nancial institutions
2008 2007
Short-term loans from fi nancial institutions 3.55 - 4.00 124,823,805 555,000,000
Interest rate
(percent per annum)
(Uni t: Baht)
(Unit : Baht)
(Unit : Baht)
Consolidated fi nancial statement
Consolidated and separate fi nancial statements
Consolidated and separate fi nancial statements
Separate fi nancial statement
77
As at 31 December 2008, the Company had short-term loans in the form of promissory notes totaling Baht 124.8 million (2007: Baht
555.0 million) from two fi nancial institutions and a fi nancial institution, respectively. The loans carry interest at rate of 4.00% per annum (2007:
3.55% per annum) and are not secured. The loans are repayable at call.
As at 31 December 2008 and 2007, the Company had overdraft lines from banks totaling Baht 130 million and Baht 105 million, respec-
tively, and other credit facilities amounting to Baht 4,677 million and Baht 5,342 million, respectively, some of which are secured by leasehold
rights and construction (Notes 10 and 12).
14. Liabilities under fi nancial lease agreements
15. Debentures Debentures of the Company consist of:
2008 20082007 2007
Liabilities under fi nancial lease agreements 9,951,132 14,109,140 5,847,324 10,800,138
Less: Deferred interest expense (655,411) (1,173,517) (376,946) (510,975)
Net 9,295,721 12,935,623 5,470,378 10,289,163
Portion due within one year Portion due over one year
2008 20082007 2007
Unsecured Debentures # 1/2548
Series 1 - 500,000 - 500,000,000
Series 2 500,000 500,000 500,000,000 500,000,000
Unsecured debentures
#1/2551 500,000 - 420,000,000 -
#2/2551 630,000 - 630,000,000 -
Total 1,630,000 1,000,000 1,550,000,000 1,000,000,000
Less: Current portion (660,000,000) (500,000,000)
Debentures - net of current portion 890,000,000 500,000,000
TotalLess than 1 year
Future minimum lease payments 9.95 5.84 15.79
Deferred interest expenses (0.65) (0.37) (1.02)
Present value of future minimum lease payments 9.30 5.47 14.77
1-5 years
(Unit : Baht)
Consolidated and separate fi nancial statements
Consolidated and separate fi nancial statements
The Company has entered into the fi nance 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.
Finance lease agreements are non-cancelable.
As at 31 December 2008, Future minimum lease payments required under the fi nance lease agreements were as follows:-
Number of debentures (Unit) Amount (Baht)
(Unit : Baht)
78
At the Extraordinary Meeting of shareholders No. 1/2003 held on 25 April 2003, the shareholders passed a resolution approving the Com-
pany’s issue debentures in an amount of not more than Baht 2,000 million, or the equivalent in foreign currency, to be off ered to the public
or individuals or institutional investors in one or several trances. On 17 March 2005, the Company issued Baht 1,000 million of debentures
as detailed below.
“ The Unsubordinated and Unsecured
Debentures of
Home Product Center Plc.
No. 1/2005 Series 2 Due 2009 “
“ The Unsubordinated and Unsecured
Debentures of
Home Product Center Plc.
No. 1/2005 Series 1 Due 2008”
Name of debentures
Name of debentures
Amounts Baht 500 million Baht 500 million
Term 3 years 4 years
Issue date 17 March 2005 17 March 2005
Interest rate 5.00 percent per annum 5.40 percent per annum
Interest payment schedule Quarterly in March, June, September Quarterly in March, June, September
and December and December
Principal repayment On the redemption date of 17 March 2008 On the redemption date of 17 March 2009
Covenants Maintenance of debt to equity ratios Maintenance of debt to equity ratios
and restrictions on dividend payment and restrictions on dividend payment
Amount Baht 500 million
Term 3 years
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 ratios
In March 2008, the Company repaid Baht 500 million unsecured debentures #1/2548 series 1 in full to the debentures holders.
On 4 April 2007, the Annual General Meeting of Shareholders for the year 2007 approved the Company’s issue of debentures in an
amount of not more than Baht 2,000 million, or the equivalent in another currency. The debentures must have a tenor of no less than 3 years
and no more than 10 years.
On 2 May 2008, the Company issued Baht 500 million of debentures, as detailed below.
“The Principal paid by installment Debentures ofHome Product Center Plc.
No. 1/2008 Due 2011”
79
Name of debentures
Amount Baht 630 million
Term 3 years
Issue date 21 November 2008
Interest rate 5.50% per annum
Interest payment schedule Quarterly in November, February, May and August
Principal repayment On the redemption date of 21 November 2011
Covenants Maintenance of debt to equity ratios and restrictions on dividend payment
“The unsubordinated and unsecured debentures of Home Product Center Plc.
No. 2/2008 due 2011”
On 21 November 2008, the Company issued Baht 630 million of debentures, as detailed below.
16. Long-term loans Details of the Company’s long-term loans are as follows: -
2008 2007
No. Principal Outstanding balances Terms of payment (per installment/month)
Interest Rate
1 1,500,000,000 975,000,000 1,275,000,000 Baht 25 million *
2 100,000,000 - 100,000,000 Baht 33 million **
Total 975,000,000 1,375,000,000
Less: Current portion (300,000,000) (400,000,000)
Long-term loans - net of current portion 675,000,000 975,000,000
* At 4.15% - 6.00% per annum and from 2010 onwards at MLR
** At MLR minus an agreed margin
(Unit : Baht)
Consolidated and separate fi nancial statements
1. The Company has pledged assets and leasehold rights to secure the loans (Note 10 and 12).
2. On 8 June 2007, the Company entered into a Baht 2,000 million loan agreement with a bank. The loans will be repaid in monthly
installments of not less than Baht 33 million each, within 78 months, and are subject to interest at MLR minus an agreed margin.
The loans are secured (in the form of a negative pledge) by some of the Company’s real estate and leasehold rights.
On 28 July 2008, the Company and bank jointly amended the loan agreement to decrease the limit on the facility from Baht 2,000 million
to Baht 845 million. As at result, the Company has the unutilized portion of the facility amounts to Baht 745 million.
The Company has to comply with certain covenants stipulated in the loan agreement such as the maintenance of certain debt to equity ratio.
80
17. Share capital 17.1 On 4 April 2007, the Annual General Meeting of Shareholders approved a Baht 50,400,000 increase in the Company’s registered
share capital, from Baht 1,938,146,860 to Baht 1,988,546,860, through an issue of ordinary shares of Baht 1 each; and the
Company’s amendment of clause 4 of its memorandum of association.
17.2 On 9 April 2008, the Annual General Meeting of Shareholders approved a Baht 2,078,714 decrease in the Company’s registered
share capital, in respect of expiration of ESOP-W1 totaling 987,487 units.
Reconciliation of number of ordinary shares
Registered share capital
Number of ordinary shares at beginning of year 1,988,546,860 1,938,146,860
Increase in registered share capital due to issuing ESOP-W4 - 50,400,000
Decrease in registered share capital due to expiration of ESOP-W1 (2,078,714) -
Number of ordinary shares at end of year 1,986,468,146 1,988,546,860
Issued and paid-up share capital
Number of ordinary shares at beginning of year 1,924,920,422 1,919,818,404
Increase from the exercise of
ESOP-W1, ESOP-W2, ESOP-W3 and ESOP-W4 8,690,178 5,102,018
Number of ordinary shares at end of year 1,933,610,600 1,924,920,422
For the years ended 31 December
18. Warrants In September 2004, the Company proceeded with the fi rst issue of warrants to (ESOP-W1) the employees in accordance with a resolution
of the Annual General Meeting of Shareholders for the year 2004. It issued a total of 15,000,000 warrants, and one warrant can be exercised
to purchase 1 ordinary share at a price of Baht 1 each, with exercise dates every three months and a term of 3 years.
In February 2006, the Company proceeded with the second issue of warrants (ESOP-W2) to the employees, in accordance with the
resolution of the Annual General Meeting of Shareholders for the year 2005. It issued a total of 7,000,000 warrants, and each warrant can be
exercised to purchase 1 ordinary share at a price of Baht 1 each, with exercise dates every three months and a term of 3 years.
As a result of the Company’s allotment of 7,000,000 ordinary share warrants to employees (ESOP-W2), the exercise ratio of the fi rst issue of
warrants to purchase ordinary shares to employees (ESOP-W1) was adjusted such that 1 warrant can be exercised to purchase 1.006 ordinary
shares at a price of Baht 1 per share, eff ective from 28 February 2006 onwards.
In October 2006, the Company resolved to increase its share capital and this aff ected the exercise of the fi rst and second issues of war-
rants allotted to the employees of the Company (ESOP-W1 and W2) as follows:
• One warrant of the fi rst issue of warrants allotted to employees of the Company (ESOP-W1) can be exercised to purchase 1.811
ordinary shares at a price of Baht 1 per share.
• One warrant of the second issue of warrants allotted to employees of the Company (ESOP-W2) can be exercised to purchase 1.800
ordinary shares at a price of Baht 1 per share.
2008 2007
(Unit : Shares)
81
On 2 April 2007, the Company issued 15,000,000 warrants (ESOP-W3) to its employees in accordance with the resolution passed by the
2006 Annual General Meeting of Shareholders. Each warrant can be exercised to purchase one ordinary share at a price of Baht 1, and the
exercise dates are every three months and a term of 3 years. The issue of ESOP-W3 has eff ected the exercise of ESOP-W1 and ESOP-W2 as
follows: -
• One warrant of the fi rst issue of warrants allotted to employees of the Company (ESOP-W1) can be exercised to purchase 1.822
ordinary shares at a price of Baht 1 per share.
• One warrant of the second issue of warrants allotted to employees of the Company (ESOP-W2) can be exercised to purchase 1.811
ordinary shares at a price of Baht 1 per share.
On 23 May 2008, the Annual General Meeting of the Shareholders for the year 2007 approved the Company’s issue of 50,000,000 warrants
(ESOP-W4) to its employees. Each warrant can be exercised to purchase 1 ordinary share, and has a term of 5 years, with no more than 20%
of the issued warrants to be exercised each year. The exercise price is calculated at a 20% discount on the 30-day average closing price of the
Company’s shares. The issue of ESOP-W4 has aff ected the exercise of ESOP-W2 and ESOP-W3 as follows: -
• One warrant of the issue of warrants allotted to employees of the Company (ESOP-W2) can be exercised to purchase 1.823 ordinary
shares at a price of Baht 1 per share.
• One warrant of the issue of warrants allotted to employees of the Company (ESOP-W3) can be exercised to purchase 1.007 ordinary
shares at a price of Baht 1 per share.
The holders of the warrants have exercised their rights as summarized below.
Exercised date
Number of exercised warrants
ESOP-W1
(Units)
ESOP-W2
(Units)
ESOP-W3
(Units)
ESOP-W4
(Units)
Number ofshares fromexercise ofwarrants(Shares)
Value of ordinary
shares fromexercise ofwarrants
(Baht)
Paid-up capital Date of registration
with theMinistry ofCommerce
(Shares) (Baht)
Beginning balance
1 January 2007 13,511,689 6,951,800 - - - - 1,919,818,404 1,919,818,404 -
28 February 2007 279,396 - - - 505,982 505,982 1,920,324,386 1,920,324,386 7 March 2007
30 May 2007 182,528 30,000 3,872,816 - 4,259,711 4,259,711 1,924,584,097 1,924,584,097 11 June 2007
31 August 2007 38,900 - 237,550 - 308,425 308,425 1,924,892,522 1,924,892,522 12 September 2007
30 November 2007 - - 27,900 - 27,900 27,900 1,924,920,422 1,924,920,422 11 December 2007
29 February 2008 - - 60,000 - 60,000 60,000 1,924,980,422 1,924,980,422 12 March 2008
30 May 2008 - - 4,679,142 3,482,200 8,194,003 8,194,003 1,933,174,425 1,933,174,425 12 June 2008
31 August 2008 - - 111,845 246,100 358,722 358,722 1,933,533,147 1,933,533,147 11 September 2008
30 November 2008 - - 76,915 - 77,453 77,453 1,933,610,600 1,933,610,600 9 December 2008
Total 14,012,513 6,981,800 9,066,168 3,728,300
Number of issued warrants 15,000,000 7,000,000 15,000,000 50,000,000
Number of
exercised warrants (14,012,513) (6,981,800) (9,066,168) (3,728,300)
Number of expired warrants (987,487) - - -
Number of
unexercised warrants - 18,200 5,933,832 46,271,700
82
19. 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 after deducting accumulated defi cit brought forward (if any), until the reserve reaches 10 percent of the
registered capital. The statutory reserve is not available for dividend distribution.
20. Expenses by nature Signifi cant expenses by nature are as follow:
2008 2008 20082007 2007 2007
Employee remuneration 1,272 1,011 1,272 1,011
Premises expenses 789 700 741 652
Depreciation and amortization 728 657 724 654
Sales promotion and operation support expenses 1,156 1,005 1,143 986
Financial costs 134 175 136 177
Income tax 392 269 390 267
Changes in inventories of fi nished goods 294 125 294 125
21. 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.
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 plus the weighted average number of ordinary shares which would need to be issued to convert all dilutive potential
ordinary shares into ordinary shares. The calculation assumes that the conversion took place either at the beginning of the period or on the
date the potential ordinary shares were issued.
The following table sets forth the computation of basic and diluted earnings per share:
Consolidated fi nancial statementsFor the years ended 31 December
Net income (Baht)Weighted average numberof ordinary shares (shares)
Earnings per share (Baht)
Basic earnings per share
Net income attributable to equity
holders of the parent 959,418,953 710,375,364 1,929,865,525 1,922,860,405 0.50 0.37
Eff ect of dilutive potential ordinary shares - - 10,697,835 10,853,626
Diluted earnings per share
Net income of ordinary shareholders
assuming the conversion of warrants to
ordinary shares 959,418,953 710,375,364 1,940,563,360 1,933,714,031 0.49 0.37
(Unit : Million Baht)
2008 2007 2008 2007
Consolidated fi nancial statement Separate fi nancial statement
83
2008 2008 20082007 2007 2007
Separate fi nancial statementsFor the years ended 31 December
Net income (Baht)Weighted average numberof ordinary shares (shares) Earnings per share (Baht)
Basic earnings per share
Net income attributable to equity
holders of the parent 953,946,185 704,775,741 1,929,865,525 1,922,860,405 0.49 0.37
Eff ect of dilutive potential ordinary shares - - 10,697,835 10,853,626
Diluted earnings per share
Net income of ordinary shareholders
assuming the conversion of warrants to
ordinary shares 953,946,185 704,775,741 1,940,563,360 1,933,714,031 0.49 0.36
22. 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
materials for construction, repair and maintenance 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 profi ts and assets as refl ected in these fi nancial statements pertain to the aforementioned
trading industry and geographic area.
23. 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
2008, the Company contributed Baht 23.98 million (2007: Baht 20.86 million) to the fund.
24. Dividend paid Dividends declared during the years 2008 and 2007 consisted of the followings: -
Approved by Total dividendsDividendper share
Paid on
Final dividend from 2006 Annual General Meeting
retained earnings of the shareholders on 4 April 2007 230.44 0.12 27 April 2007
Final dividend from 2007 Annual General Meeting
retained earnings of the shareholders on 9 April 2008 346.49 0.18 8 May 2008
84
25. Commitments and contingent liabilities 25.1 As at 31 December 2008 and 2007, the Company has commitments totaling Baht 75.90 million and Baht 116.18
million, respectively, to a bank and fi ve fi nancial institutions in respect of guarantees provided for leasing, purchases of goods or hire
of work, as bonds with State Enterprise.
25.2 As at 31 December 2008, the Company has commitments under letters of credit opened with two commercial banks,
amounting to USD 1.99 million (2007: three commercial banks amounting to USD 2.40 million).
26. Commitments under long-term lease agreements 26.1 Long-term lease agreements - as lease
a) The Company has entered into eight land lease agreements. The terms of the agreements are generally between 26 to 30
years and they are non cancelable, except with the consent of the counterparties.
As at 31 December 2008, future minimum lease payments required under these non-cancellable operating leases contracts
were as follows:
Payable within: Million Baht
1 year 39.5
2 to 5 years 179.0
Thereafter 946.4
1,164.9
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 2008, future minimum lease payments required under these non-cancellable operating leases contracts
were as follows:
Payable within: Million Baht
1 year 80.3
2 to 5 years 343.9
Thereafter 1,423.2
1,847.4
26.2 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 contract values amounting to Baht 640.49 million. The terms of the agreements are until 2033 -
2036. The Company recognizes this income systematically on a straight-line basis over the useful lives of the leaseholds.
The outstanding balance of rental received in advance as of 31 December 2008 was Baht 542.8 million (2007: Baht 564.4 million).
85
27. Financial instruments 27.1 Financial risk management
The Company’s fi nancial instruments, as defi ned under Thai Accounting Standard No. 48 “Financial Instruments: Disclosure and
Presentations”, principally comprise cash and cash equivalents, trade accounts receivable, other receivables, short-term loans, debentures
and long-term loans. The fi nancial risks associated with these fi nancial 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
fi nancial 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 fi nancial institutions, short-term loans,
debentures and long-term loans. However, since the Company’s fi nancial assets and some of its fi nancial liabilities bear fl oating
interest rates and some of fi nancial liabilities bear fi xed interest rates which are close to the market rate, the interest rate risk is
expected to be minimal.
Signifi cant fi nancial assets and liabilities as at 31 December 2008, classifi ed by type of interest rate, are summarized in the
table below, with those fi nancial assets and liabilities that carry fi xed interest rates further classifi ed based on the maturity date,
or the repricing date if this occurs before the maturity date.
Fixed interest rates
Within1 year
Over1-5 years
Over5 years
Floatinginterest rate
Non-interestbearing
Interest rate(% p.a.)Total
Financial assets
Cash and cash equivalent 435,000,000 - - 40,594,238 128,193,912 603,788,150 0.75 - 3.00
Financial liabilities
Bank overdraft and short-term
loans from fi nancial institutions 124,823,805 - - - - 124,823,805 4.00
Debentures 660,000,000 890,000,000 - - - 1,550,000,000 4.00 - 5.50
Long-term loans 300,000,000 675,000,000* - - - 975,000,000 6.00
1,084,823,805 1,565,000,000 - - - 2,649,823,805
* Long-term loans of Baht 550 million being installed during 2010 to 2012 with fl oating interest rate at MLR.
Consolidated fi nancial statement
(Unit : Baht)
86
Financial assets
Cash and cash equivalent 435,000,000 - - 17,467,548 127,427,137 579,894,685 0.75 - 3.00
Financial liabilities
Banks overdraft and short-term
loans from fi nancial institutions 124,823,805 - - - - 124,823,805 4.00
Short-term loans from
related party 60,000,000 - - - - 60,000,000 3.40 - 4.25
Debentures 660,000,000 890,000,000 - - - 1,550,000,000 4.00 - 5.50
Long-term loans 300,000,000 675,000,000* - - - 975,000,000 6.00
1,144,823,805 1,565,000,000 - - - 2,709,823,805
Average exchange rate as at 31 December 2008(Baht per dollar)
Foreign currency Financial liabilities (Dollar)
USD 10,363 35.0824
* Long-term loans of Baht 550 million being installed during 2010 to 2012 with fl oating interest rate at MLR.
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 fi nancial liabilities denominated in foreign currencies as at 31 December 2008 are summarized below.
27.2 Fair values of fi nancial instruments
Since some of the Company’s fi nancial assets and liabilities are short-term in nature and loans bear interest at rates close
to market rate or fl oating interest rates, their fair value is not expected to be materially diff erent 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 fi nancial instrument or by
using an appropriate valuation technique, depending on the nature of the instrument.
(Unit : Baht)
Fixed interest rates
Within1 year
Over1-5 years
Over5 years
Floatinginterest rate
Non-interestbearing
Interest rate(% p.a.)Total
Separate fi nancial statement
87
Leasehold right and computer software - net - 629,584,237
Leasehold right - net 116,144,593 -
Computer software - net 513,439,644 -
Leasehold right and computer software - net - 629,576,616
Leasehold right - net 116,136,972 -
Computer software - net 513,439,644 -
Reclassifi ed
Reclassifi ed
Previously reported
Previously reported
28. Capital management The primary objectives of the Company and its subsidiary capital management are to ensure that it has an appropriate fi nancing
structure and preserves the ability to continue its business as a going concern.
As at 31 December 2008, total debt to equity ratio in the consolidated fi nancial statements is 1.70:1 (the separate fi nancial statements:
total debt to equity ratio is 1.69:1).
29. Subsequent event On 19 February 2009, the Meeting of the Company’s directors passed a resolution to propose the following matters to the meeting of
shareholders.
29.1 The Company paying a dividend of 1,934 million shares at Baht 0.35 each, totaling Baht 676.7 million, to its shareholders.
29.2 The Company increasing its share capital from Baht 1,986,468,146 to Baht 2,001,199,838 to support the exercise of warrant to
be allocated to employees of the Company (ESOP-W4) for which the exercise rights are to be adjusted.
30. Reclassifi cation Certain amounts in the fi nancial statements for the year ended 31 December 2007 have been reclassifi ed to conform to the current
year’s classifi cation but with no eff ect to previously reported net income or shareholders’ equity. The reclassifi cations are as follow:
(Unit : Baht)
(Unit : Baht)
Consolidated fi nancial statement
Separate fi nancial statement
31. Approval of fi nancial statements These fi nancial statements were authorized for issue by the Company’s Board of Directors on 19 February 2009.
88
Mr.Pong Sarasin
Director
Mr.Anant Asavabhokhin
Chairman
Mr.Manit Udomkunnatum
Director and Chairman of the Executive Directors
Mr.Joompol Meesook
Director
Mr. Naporn Soonthornchitcharoen
Director and Executive Director
Mr. Khunawut Thumpomkul
Director, Executive Director and Managing Director
Board of Directors
Mr. Chanin Roonsumran
Independent Director, Audit Committee and Nomination and Remuneration Committee
Mrs.Suwanna Buddhaprasart
Director
Mr.Rutt Phanijphand
Director, Executive Director and Chairman of the Nomination
and Remuneration Committee
Mr.Apichat Natasilpa
Director and Nomination and Remuneration Committee
Mr. Apilas Osatanon
Independent Director andChairman of the Audit Committee
Mr. Thaveevat Tatiyamaneekul
Independent Director and Audit Committee
www.homepro.co.th
Continued Growth
A n n u a l R e p o r t 2 0 0 8
Home Product Center Plc. 96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000
Tel. (66) 02-832-1000 Fax. (66) 02-832-1400
Ho
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ro l A
n n u a l R e p o r t 2 0 0 8
Rangsit 02-958-5699
Rattanathibet 02-921-2400
Fashion Island 02-947-6365
Future Mart 02-689-0844
Seri Center 02-746-0377
The Mall Bangkae 02-454-9299
The Mall Korat 044-28-8345
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Phuket 076-25-5189
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