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Annual Report 2011
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รายงานประจำป 2554บริษัท ดิ เอราวัณ
กรุป จำกัด (มหาชน)
Annual Report 2011 l The Erawan Group Public Company Limited
A
First line For 30 yearwe have been committed to “integrity”, a quality which is fundamental and vital to our stable growth.
Todaywe strive to be a leader in the hotel investment and development business while enhancing our core values for a long term sustainable growth.
MISSIONTo continue growing quality hotel portfolio in Thailand which optimize values to shareholders as well as other stakeholders.
Core Values “SPICE”• System “Systematic management approach to enhance eff iciency as well as to lessen reliance on individuals”• People “Competent workforce with dedication to further learning and continual improvement”• Information “Accurate, adequate, and up-to-date database for the purpose of management and decision-making”• Culture “Sound corporate culture to support sustainable growth”• Environment “Being a good, responsible corporate citizen by taking care of all stakeholders including community and environment”
VISION 2015To become Thailand’s leading hotel developer and investor.
B
SUCCESS WITH INTEGRITY
First lineFor 30 year
we have been committed to “integrity”, a quality which is fundamental and vital to our stable growth.
Todaywe strive to be a leader in the hotel investment and development business while enhancing our core values for a long term sustainable growth.
MISSIONTo continue growing quality hotel portfolio in Thailand which optimize values to shareholders as well as other stakeholders.
Core Values “SPICE”• System “Systematic management approach to enhance eff iciency as well as to lessen reliance on individuals”• People “Competent workforce with dedication to further learning and continual improvement”• Information “Accurate, adequate, and up-to-date database for the purpose of management and decision-making”• Culture “Sound corporate culture to support sustainable growth”• Environment “Being a good, responsible corporate citizen by taking care of all stakeholders including community and environment”
VISION 2015To become Thailand’s leading hotel developer and investor.
MISSIONMISSIONTo continue growing quality hotel To continue growing quality hotel portfolio in Thailand which optimize portfolio in Thailand which optimize values to shareholders as well as other values to shareholders as well as other stakeholders.stakeholders.
Core Values Core Values “SPICE”“SPICE”•• SSystemystem “Systematic management approach to enhance “Systematic management approach to enhance e efff f fff ff iciencyiciency as well as to lessen reliance on individuals” as well as to lessen reliance on individuals”iciencyiciency as well as to lessen reliance on individuals”iciencyiciency•• PPeopleeople “Competent workforce with dedication to further “Competent workforce with dedication to further learning and continual improvement” learning and continual improvement”•• IInformationnformation “Accurate, adequate, and up-to-date database “Accurate, adequate, and up-to-date database for the purpose of management and decision-making” for the purpose of management and decision-making”•• CCultureulture “Sound corporate culture to support sustainable growth” “Sound corporate culture to support sustainable growth”•• EEnvironmentnvironment “Being a good, responsible corporate citizen “Being a good, responsible corporate citizen by taking care of all stakeholders including community by taking care of all stakeholders including community and environment” and environment”
VISION 2015VISION 2015To become Thailand’s leading To become Thailand’s leading hotel developer and investor.hotel developer and investor.
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02345346
03
SUCCESS WITH INTEGRITY
Our Capital Structure & Management
2011 in REVIEW
Financial Highlights The Erawan Group Public Company Limited
04 05Financial Highlights
(Unit : Thousand Baht)
Description
DescriptionRevenues from Operations
Total Revenues
Gross Profit
EBITDA
Net Profit (Loss)
Total Assets
Total Liabilities
Total Shareholders’ Equity
Equity Attributable to Company’s Shareholders
Paid - up Share Capital
Number of Paid - Up shares (Thousand shares)
Par Value Per Share (Baht)
Earning Per Share (Baht)
Dividend Per Share (Baht)
Book Value Per share (Baht)
Signif icant Financial RatioCurrent Ratio (Times)
Quick Ratio (Times)
Liquidity Ratio (Cash Flow Basis) (Times)
Gross Profit Ratio (%)
Net Profit Margin (%)
Return on Total Assets (%)
Return to Equity (%)
Debt to Equity Ratio (Times)
Interest Bearing Debts to Equity Ratio (Times)
Interest Coverage Ratio (Times)
2009
3,149,033
3,191,623
1,658,132
782,991
(229,411)
13,288,817
9,749,858
3,538,959
3,406,397
2,244,779
2,244,779
1
(0.10)
-
1.52
0.52
0.27
0.38
52.66%
n/a
n/a
n/a
2.76
2.42
2.38
2011
3,755,544
4,487,232
1,965,740
1,635,878
491,325
12,237,865
8,468,390
3,769,475
3,588,610
2,244,779
2,244,779
1
0.22
-
1.60
0.53
0.40
0.66
52.34%
10.95%
3.90%
14.62%
2.25
2.00
2.35
2010
3,321,248
3,364,328
1,677,912
804,829
(275,017)
12,949,266
9,676,317
3,272,950
3,130,975
2,244,779
2,244,779
1
(0.12)
-
1.39
0.41
0.27
0.63
50.52%
n/a
n/a
n/a
2.96
2.63
2.70
EBITDA
1,207
1,011
782805
1,636
0
200
400
600
800
1,000
1,200
1,400
1,600
(Unit : Thousand Baht)
Operating Income
2007 2008 2009 2010 2011
3,194 3,3773,149 3,321
3,756
0
1,000
2,000
3,000
4,000
Net Profit/(Loss)
402
79
491
(229)(275)
0
250
500
Financial Highlights The Erawan Group Public Company Limited
04 05Financial Highlights
(Unit : Thousand Baht)
Description
DescriptionRevenues from Operations
Total Revenues
Gross Profit
EBITDA
Net Profit (Loss)
Total Assets
Total Liabilities
Total Shareholders’ Equity
Equity Attributable to Company’s Shareholders
Paid - up Share Capital
Number of Paid - Up shares (Thousand shares)
Par Value Per Share (Baht)
Earning Per Share (Baht)
Dividend Per Share (Baht)
Book Value Per share (Baht)
Signif icant Financial RatioCurrent Ratio (Times)
Quick Ratio (Times)
Liquidity Ratio (Cash Flow Basis) (Times)
Gross Profit Ratio (%)
Net Profit Margin (%)
Return on Total Assets (%)
Return to Equity (%)
Debt to Equity Ratio (Times)
Interest Bearing Debts to Equity Ratio (Times)
Interest Coverage Ratio (Times)
2009
3,149,033
3,191,623
1,658,132
782,991
(229,411)
13,288,817
9,749,858
3,538,959
3,406,397
2,244,779
2,244,779
1
(0.10)
-
1.52
0.52
0.27
0.38
52.66%
n/a
n/a
n/a
2.76
2.42
2.38
2011
3,755,544
4,487,232
1,965,740
1,635,878
491,325
12,237,865
8,468,390
3,769,475
3,588,610
2,244,779
2,244,779
1
0.22
-
1.60
0.53
0.40
0.66
52.34%
10.95%
3.90%
14.62%
2.25
2.00
2.35
2010
3,321,248
3,364,328
1,677,912
804,829
(275,017)
12,949,266
9,676,317
3,272,950
3,130,975
2,244,779
2,244,779
1
(0.12)
-
1.39
0.41
0.27
0.63
50.52%
n/a
n/a
n/a
2.96
2.63
2.70
EBITDA
1,207
1,011
782805
1,636
0
200
400
600
800
1,000
1,200
1,400
1,600
0
(Unit : Thousand Baht)
Operating Income
2007 2008 2009 2010 2011
3,194 3,3773,149 3,321
3,756
0
1,000
2,000
3,000
4,000
00
Net Profit/(Loss)
402
79
491
(229)(275)
0
250
500
Hotel and Resorts PortfolioThe Erawan Group Public Company Limited
Chairman ReviewThe Erawan Group Public Company Limited
Bangkok
Phuket
Pattaya
Huahin
Samui
Pattaya
ibis PattayaHoliday Inn Pattaya
Huahin
ibis Hua Hin (Opened January 2012)
Samui
Renaissance Koh Samui Resort and Spa
ibis Samui Bophut
Phuket
ibis Phuket Kataibis Phuket PatongThe Naka Island, a Luxury Collection Resort & Spa, Phuket
Mr. Prakit PradipasenChairman of the Board of Directors
Excellent CGR Report 2009-2011
Bangkok
Grand Hyatt Erawan Bangkok
JW Marriott Bangkok Courtyard by Marriott Bangkok
ibis Bangkok Sathorn ibis Bangkok Riversideibis Bangkok Nana
Mercure Bangkok Siam and ibis Bangkok Siam (Under development)
First line
06 Hotel and Resort Portfolio
Hotel and Resorts PortfolioThe Erawan Group Public Company Limited
Chairman ReviewThe Erawan Group Public Company Limited
Bangkok
Phuket
Pattaya
Huahin
Samui
Pattaya
ibis PattayaHoliday Inn Pattaya
Huahin
ibis Hua Hin (Opened January 2012)
Samui
Renaissance Koh Samui Resort and Spa
ibis Samui Bophut
Phuket
ibis Phuket Kataibis Phuket PatongThe Naka Island, a Luxury Collection Resort & Spa, Phuket
Mr. Prakit PradipasenChairman of the Board of Directors
Excellent CGR Report 2009-2011
Bangkok
Grand Hyatt Erawan Bangkok
JW Marriott Bangkok Courtyard by Marriott Bangkok
ibis Bangkok Sathorn ibis Bangkok Riversideibis Bangkok Nana
Mercure Bangkok Siam and ibis Bangkok Siam (Under development)
07
SUCCESS WITH INTEGRITY
In 2011, Thailand welcomed as many as 19 million tourist arrivals, the highest ever in its history. This represented a tremendous growth of 20 percent, which was also the highest increase in South East Asia.The figurewas impressiveconsidering the factthat a number of tourists fell in Q4 of the year due to thecountry’sdevastatingfloodintheCentralincludingBangkok and its vicinity.
At ERAWAN, we continue to commit to build our business and organization for long-term sustainable growth. In 2011, we successfully implemented our plans set forth in the five-year Master Plan (2011-2015)andrecordedBaht491millioninnetprofitthisyear. Our commitment to transparency and good corporate governance has been well recognized. This year we received an “Excellent” rating for corporate governance from the Corporate Governance Report of Thai Listed Companies 2011 survey organized by the Thai Institute of Directors for the third consecutive year. We were also rated “Excellent” for our Annual General Meeting from the Stock Exchange of Thailand for the fourth consecutive year. As we have always given a priority to risk management while putting in place a comprehensive contingency plan to protect the interests of all stakeholders, during the country’s major flood in late 2011,wemanaged to effectivelyprotect our properties in all risk areas. Plans were successfully formulated in advance and implemented to safeguard our properties, customers, suppliers and ourstaff.At theother front, tohelp floodvictims,wedonated fund and items via the Thai Listed Companies
Association, public and private agencies and other relief organizations. Our staff also voluntarily extended direct assistance to affected communities. For our own staff suffering from the flood, we provided shelters and financial assistance to help them get back to normalcy as soon as possible.
We are deeply committed to the business philosophy of honesty and integrity. At ERAWAN, we believe that only success with integrity will make the business sustainable in the long run.
First line
08 ChiefExecutiveOfficerReview
Chief Executive Off icer ReviewThe Erawan Group Public Company Limited
Although 2011 was another year that Thailand’s
hotel business and tourism industry were to confront
with an unexpected, this time natural-made, event as
thecountrysufferedthedisastrousfloodinlate2011,
we managed to grow our revenue by 13 percent
fromthepreviousyear,bringingournetprofittoBaht
491 million, thanks largely to our three strategies as
follows:
Our hotel growth strategy designed to expand
and diversify our hotel portfolio to serve customers at
all levels and to be strategically present in Thailand’s
key destinations yielded a good result. Our gross
revenue from the hotel business jumped more than
50 percent when compared to what we achieved in
2006 despite lower incomes from our two established
luxury hotels in Bangkok along with the hotel industry
which have been affected by a series of unexpected
situations and intensified competitions. At present,
we own 14 hotels with total of 3,512 hotel rooms.
Our initiative to build an economy hotel chain under
the international ibis brand as one of our key strategic
direction has proven to be a right move. Our hotels
in the economy segment has not only been well
received by domestic and international markets but
alsodirectlybenefits fromawaveofgrowingtourists
from RIC countries such as China, Russia and India.
Our midscale hotels which currently include Holiday
Inn Pattaya and Courtyard by Marriott Bangkok have
also been warmly welcomed by both corporate and
leisure customers. The success of our expansion is
clearly a result of an ongoing internal development of
our resources. Over the years, we managed to secure
land banks in the right locations to develop various
projects as planned while controlling our investment
costs to save almost Baht 500 million from the
original budget. That’s why our investment projects
still yield a projected long-term return although the
tourism and hotel industry suffered from one after
another devastating events during the past three to
four years. As for projects which were slower-than-
expected in generating an expected return, we have
closely monitored and continuously put in a plan for a
turnaround. The key event last year on this front was
when we changed hotel management operator for our
resort at Koh Naka, Phuket in July 2011. The resort,
which has resumed its operation since November
Holiday Inn Pattayaibis Huahin The Naka Island, a Luxury Collection Resort & Spa, Phuket
09
SUCCESS WITH INTEGRITY
ChiefExecutiveOfficerReview
2011, has shown significant operating improvement
and expected to generate positive EBITDA in 2012.
A strategy designed to reinforce shareholders’
returns by selling the assets to recognize its market
values introduced in late 2010 was aimed to yield an
appropriateandrecurringprofitstoourshareholders.
As hotel investment is long term and requires some
times before a net profit can be generated, this
strategy will be an important tool to generate short-
termprofitsforourshareholders.Lastyear,westarted
implementing the strategy when we sold the Pleonchit
CenterOfficeBuildingtoapropertyfundandrecorded
a difference between a net sales price and a book
value of thebuilding as our net profit in 2011. This
significantly increased our dividend capability for
our shareholders compared to a period when there
had been no asset disposal. We plan to continue
implementing this strategy as time and opportunity
prevails.
We believe that the two aforementioned strategies,
when implementing simultaneously, will create a
balanceofboth short- and long-termbenefits to our
shareholders.
Our third strategy aimed to strengthen a
sustainable growth. This strategy will allow us to
continue upgrading and enhancing our resources,
internal systems, database to support decision-
making, corporate culture and the pursuit of corporate
governance while balancing optimal interests of all
stakeholders including the environment and the
community we live in. All of this has been critical
success factors to help us survive through crisis after
crisis from 2008 up to the present and we strongly
believe that these fundamentals will continue to be
the platform for our sustainable growth in the long run.
With Thailand’s competitiveness and its potential
as a tourism and business center in the region as well
as the operations guided by our visionary strategies,
we are confident that we will be able to generate
returns to shareholders and benefits to other
stakeholders while continue to play important role in
boosting the standard of Thailand’s hotel industry.
Mr. Kasama PunyaguptaChiefExecutiveOfficer
First line
10 President’s Report
President’s ReportThe Erawan Group Public Company Limited
(A) 2011 Prof it & Loss OverviewTheyearof2011wasagoodyearforhotelbusinessandtourismindustryofThailandregardlesstheflood
situation in Thailand in the fourth quarter of 2011. The overall tourist arrivals in 2011 were historically high at 19 million, a 20percent growth from2010, and the highest growth in the region. This onceagain reaffirmed the
strong fundamental of Thailand’s tourism industry. In 2011 we completed the implementation of strategies set forth in our 5-yr Master Plan (2011-2015) as
follows:Hotel Growth Strategy
• Webeganconstructionof threenewhotels inHuaHinandBangkokasplanned. Our ibisHuaHin with 200 room inventory was already opened on January 16, 2012 while the Mercure Bangkok Siam and ibis Bangkok Siam with total 380 rooms are scheduled to open in 4Q12. This will increase our
room inventory from 3,312 at the end of 2011 to 3,892 at the end of 2012. Enhancing Return Strategy
• AspartofAssetMonetizationprogram,on1stApril2011,wesoldandtransferredoneofourrental properties, Ploenchit Center building with leasehold right of land where the building is situated at total transactionvalueofBaht1,423milliontoPrimeOfficeLeaseholdPropertyFundsetupbyathirdparty, SCB Asset Management. We recorded net gains from this disposal of asset at Baht 664 million in 2Q11. Net proceeds was partially used to prepay long term loan of Baht 460 million while the remaining
balance has been reserved to support our expansion plan.
• AspartofAssetImprovementprogram,inJuly2011,weenteredtheagreementwithStarwoodHotels
& Resorts Worldwide Inc., a global leading hotel operator, to manage our property under the brand
“A Luxury Collection”. This partnership and additional brand will further strengthen our current hotel
portfolio which already in partnership with world-class hotel operators such as Hyatt, Marriott, Accor
and IHG and also broaden the brands platform for our hotel expansion. We rebranded our resort to
“The Naka Island, a Luxury Collection Resort & Spa, Phuket” which reopened in November 2011
resultinginsignificantimprovementofoccupancyandRevPARcomparedtothesameperiodlastyear. Additionally, to support the company growth strategy and allow the company to maintain the capital structure
at appropriate level, on 26th April 2011, the Company’s Annual General Meeting for the year 2011 resolved to approve the issuance of warrants to be given without cost to the existing shareholders not exceeding 224,477,900 units(detailsgivenintheNotificationtotheStockExchangeofThailandon19thMay2011).Thesewarrantswerelistedand tradedon theStockExchangeofThailandon27thMay2011(detailsgiven in theNotification to the
11
SUCCESS WITH INTEGRITY
President’s Report
Stock Exchange of Thailand on 25th May 2011) and the issuance and offering of 35,743,099 ordinary shares to employees of the Company to motivate the employees to drive the performance towards the success of the strategic objectives set forth in the 5-yr Master Plan (see Note 24 in the Financial Statement).
Our total operating income in 2011 was recorded at Baht 3,756 million, a 13% increase from the same period last year, despite the absence of 9-month income from Ploenchit Center which we divested in the second quarter of 2011. Our income from hotel operation increased 21% from the same period last year to record at Baht3,536milliondespitetheslow-downfromthefloodsituationinthefourthquarterof2011andtheabsenceof 3-month income from Naka resort in Phuket which was closed for rebranding during August-October. Total income including the gains from disposal of Ploenchit Center was recorded at Baht 4,487 million, a 33% increase andEBITDArecordedatBaht1,636million,a103%increasefromlastyear.Afterthedeductionoffinancecost,non-cashdepreciation, and tax,we recordeda netprofit ofBaht 491million, compared to a net loss ofBaht275 million in 2010.
Grand Hyatt Erawan BangkokCourtyard by Mariott Bangkok
First line
12
IncomeIn line with our diversification strategy, the composition of our total income has changed in 2011.
Our “Midscale Hotels” and “Economy Hotels” segment contributed more income to the group while income from rental properties decreased from the divestment of Ploenchit Center to property fund in the second quarter of
2011. Details illustrated in the table below.
Baht Million 2010 2011 Changes
Hotels’ Operating Income
Rental and Service Income
2,930
391
3,536
219
+21%
- 44%
Total Operating Income 3,321 3,756 +13%
Gain from Disposal of Asset
Other Income
-
43
664
67
N.A.
+56%
Total Income 3,364 4,487 +33%
Operating Expenses (2,559) (2,851) +11%
EBITDA 805 1,636 +103%
Depreciation & Amortization (684) (646) -6%
Operating Profit 121 990 +716%
Finance Costs (361) (407) +13%
Pre-Tax Profit/(Loss) (293) 584 N.A.
Taxes
Minority Interest
(20)
(16)
(53)
(39)
+169%
+148%
Net Profit/(Loss) (275) 491 N.A.
E.P.S (0.12) 0.22 N.A.
*Details are explained in later section of this report
President’s Report
13
SUCCESS WITH INTEGRITY
20102009
Baht Million
0
500
1,000
2,500
3,000
3,500
4,000
4,500
1,500
2,000
172
143
3,3643,192
2011
132
4,487
Midscale Hotels
Luxury Resorts
Luxury Hotels
Economy HotelsRental Properties
Other Income
+ 5%+ 33%
2009 2010 2011
Btm % total Btm % total Btm % total
Luxury Hotels
Luxury Resorts
Midscale Hotels
Economy Hotels
1,997
182
272
297
62.6%
5.7%
8.5%
9.3%
1,848
206
449
428
54.9%
6.1%
13.3%
12.7%
2,110
220
631
576
47.0%
4.9%
14.1%
12.8%
Income from hotel properties
Income from rental properties
2,748
401
86.1%
12.6%
2,930
391
87.1%
11.6%
3,536
219
78.8%
4.9%
Other income
Gains from sales of Asset
43
-
1.3%
-
43
-
1.3%
-
67
664
1.5%
14.8%
Total 3,192 100.0% 3,364 100.0% 4,487 100.0%
President’s Report
First line
14
Operating performance from all properties in 2011 as follows:
Hotel Business Our income from hotel operations increased 21% from the same period last year to record at Baht 3,536
million in 2011. Room revenue which generated approximately 56 percent to total revenue produced 23% growth in 2011. Food and beverage revenue, a 38 percent of income from hotel business, also increased 15% from 2010.
Hotel revenue breakdown by type of income in 2010 and 2011 are listed below.
Baht Million
0
500
1,000
2,500
3,000
3,500
4,000
1,500
2,000
2010 2011
1,600
1,170
160
1,969
1,347
220
0
Room RevenueFood and Beverage RevenueOther Operations
Luxury Hotels Our two luxury hotels in Bangkok, Grand Hyatt Erawan Bangkok Hotel and JW Marriott Hotel Bangkok
recordedahigher incomein2011despitetheinterruptionfromfloodinthefourthquarter in2011.Theaverageoccupancy increased from 60 percent to 68 percent, with a RevPAR improvement of 13%. Room revenue
increased 12% and food and beverage revenue increased 11% from the same period last year.
President’s Report
15
SUCCESS WITH INTEGRITY
Luxury Resorts We have two luxury resorts; both demonstrated good improvement this year.Our Renaissance Koh Samui Resort and Spa closed with 11 % higher occupancy resulted in a 13 % growth
of RevPAR and room revenues. For our luxury resort in Phuket, we rebranded it from “Six Senses Sanctuary” to “A Luxury Collection” and
renamed the resort to “The Naka Island, a Luxury Collection Resort & Spa, Phuket” with aim to optimize its financial return. The rebrandingwhich transformed the resort fromawellnessdestination to a luxurypool villaresort has allowed it to capture the broader market demand. The resort closed for rebranding from August 2011 and reopened on 1 November 2011. As a result, it achieved a better performance in 2011 with the average occupancy increased 2% and RevPAR increased 3% from the same period last year.
In total, income from our four luxury hotels increased 13% from previous year to Baht 2,330 million in 2011.
Midscale Hotels We have 2 hotels under the midscale segment, Courtyard by Marriott Bangkok and Holiday Inn Pattaya.
This segment was our highest income growth in 2011 at 41% above 2010. Total revenue was recorded at Baht 631 million with room revenue increased 46% and food and beverage revenue increased 30% from last year.
The average occupancy increased 20% and the average RevPAR increased 46% from 2010.
Economy Hotels
Our hotel properties under this segment are all under “ibis” brand. At the end of 2011, we had total of 7
economyhotelswithtotalof1,704rooms.Thefirstfouribishotels,namelyibisPhuketPatong,ibisPattaya,ibis
Bangkok Sathorn and ibis Samui Bophut , were opened in the second half of 2008. We added ibis Bangkok
Nana and ibis Phuket Kata in 2009 and ibis Bangkok Riverside in November 2010. Our 8th ibis, ibis Hua Hin was
recently opened in January 2012 and our 9th ibis, ibis Bangkok Siam will be opened in December 2012.
This segment also shown the strong growth in 2011 with the occupancy grew by 10% resulting in a 16%
growth in RevPAR from the same period last year. Our seven ibis hotels generated Baht 576 millions of
aggregated revenues, representing a growth of 35% from the same period last year with majority of their revenues
came from room sales. Food and beverages also increased 46% from 2011.
President’s Report
First line
16
(Baht Million)
0
500
1,000
2,500
1,500
2,000
2010 2011Luxury
2010 2011Midscale
2010 2011Economy
ibis PattayaHoliday Inn PattayaThe Naka Island, a Luxury CollectionResort & Spa, Phuket
Revenue breakdown by segments in 2010 and 2011 are listed below.
President’s Report
17
SUCCESS WITH INTEGRITY
Rental PropertiesAt the end of 2011, we have only Erawan Bangkok, the high-end retail shopping centers located adjacent
to Grand Hyatt Erawan Bangkok Hotels, which continued to generate steady rental income. The average occupancy recorded at 89%, a 3% increase from last year which leading to a 10% increase in total income.
The combined income from rental business (including those from shops in Grand Hyatt Erawan Hotel’s arcade) in 2011 was Baht 291 million representing a decrease of 44% from last year due to the absence of
income from Ploenchit Center which we divested in April 2011.
(Baht Million)
0
500
1,000
2,500
3,000
1,500
2,000
2010 2011Bangkok
2010 2011Non-Bangkok
Revenue breakdown by destinations in 2010 and 2011 are listed below.
President’s Report
First line
18
Profit from OperationsOur Earnings before Interest, Tax, Depreciation and Amortization (“EBITDA”) recorded at Baht 1,636 million
in 2011, with normalized EBITDA (excluding gain from asset disposal) to record at Baht 972 million, a 21% growth from 2010. We also recorded a higher EBITDA margin of 25 percent in 2011 vs. 24 percent in 2010. Our Depreciation and Amortization (“D&A”) decreased by Baht 38 million from last year to record at Baht 646 million for 2011 mainly from the absence of Ploenchit Center which we divested in April 2011. With the said EBITDA above, our Earnings before Interest and Tax (“EBIT”) stood at Baht 990 million for 2011 with normalized EBIT
(excluding gain from asset disposal) to record at Baht 326 million, a 169% increase from 2010.
Finance CostsTotal interest expenses recorded at Baht 407 million in 2011. The increase came mainly from the
recognition of interest expenses from new hotel opened in 4Q10 in our P&L which recorded only 2 months in 2010 but 12 months in 2011 and the increasing interest rates. The market interest rates increased approximately 1.1% from 2010 while our average cost of funding (combined both short term and long term loans) increased
approximately 0.9% from last year to 5.4% in 2011.
Gains from Asset Sale In 2011, we recorded a gain of Baht 664 million from the divestment of Ploenchit Center Building to Prime
Off ice Leasehold Property Fund in 2Q11.
JW Marriott Bangkok
President’s Report
19
SUCCESS WITH INTEGRITY
37%ibis Huahin
11%The Naka Island 22%
Others Hotels
5%Rental Properties & Others
25%Mercure & ibis Bangkok Siam
(B) Financial Status
Capital Expenditure We recorded Baht 544 million of capital expenditure during the year which mainly for i) ibis Hua Hin project
which already opened in January 2012, ii) Mercure Bangkok Siam and ibis Bangkok Siam project which will be opened in December 2012 and iii) the rebranding of our resort at Koh Naka Phuket and the normal maintenance for our existing properties. Sources of funding to support this capital expenditure were our cash flow from operations and project loans. With improving performance of our hotels and rental properties, we generated Baht 991millionofoperatingcashflowbeforechangesinoperatingassetsandliabilitiesin2011.Wealsoadditionallygenerated Baht 1,352 million of net proceeds from the divestment of Ploenchit Center in April 2011 of which the funds were used to 1) prepay Baht 460 million mortgage loan related Ploenchit Center, 2) repay scheduled
long-term debt and reduce short-term loan, and 3) fund our investments.
The breakdown of 2011 capital expenditure by asset type as follows:
President’s Report
First line
20
Our total assets decreased from Baht 12,950 million at the end of 2010 to Baht 12,238 million as of
31 December 2011 as a result of annual depreciation of our assets and the divestment of Ploenchit Center.
Our total interest-bearing debts declined from Baht 8,599 million to Baht 7,499 million and our total liabilities
decreased from Baht 9,676 million to Baht 8,468 million, from the end of 2010 to the end of 2011. This is mainly
due to scheduled principal repayment of long term loan in 2011 and the prepayment of mortgaged loan of
PloenchitCenter.Withadditionalprofitsfortheyear,ourshareholderequitiesincreasedfromBaht3,273million
to Baht 3,769 million.
Our total liabilities-to-equity ratio positively improved from 2.9 times at the end of 2010 to 2.2 times at the
endof 2011withnet interestbearingdebt-to-equityof 1.9 times.Withnetprofitgenerated in2011, theBoard
of Director proposed to the Annual General Meeting in 2012 to consider the dividend payment of Baht 0.08
per share representing a 37% payout ratio.
Mrs. Kamonwan WipulakornPresident
President’s Report
Report of the Audit Committee to Shareholder 21
SUCCESS WITH INTEGRITY
Report of the Audit Committee to ShareholderThe Erawan Group Public Company Limited
To Shareholders of The Erawan Group Public Company Limited,
TheAuditCommittee, consisting of three independentdirectorswithqualifications as announcedby the
Stock Exchange of Thailand and whose terms are three years each, performed its duties within its scopes of
responsibility and as entrusted by the Board of Directors. In 2011, the Audit Committee met four times to consider
the following:
1. Toreviewthequarterlyfinancialstatementsandthe2011financialstatementswhereitexchangedviews
withtheauditor,ExecutiveVicePresidentandChiefFinancialOfficerandtheinternalauditortodetermine
thatthefinancialstatementsoftheCompanyanditssubsidiarieswerehavingaccurateandcomplete
information deserved to be trusted and were in line with the Generally-Accepted Accounting Principles,
theSET’sannouncementsandtheSEC’snotifications.
2. To evaluate an adequacy of the internal control system to see if the Company had an appropriate internal
control system that well responded to its business, as well as a way and mean to take care of its properties
and to prevent the Company from suffering damages. The evaluation was conducted through the internal
auditor’s report, the auditor’s report and through inquiries with the management. So far, no material defect
hasbeenfound.Asaresult,theCompany’sinternalcontrolsystemisperceivedtobeefficientandadequate.
3. Toreviewconnectedtransactionsorconflictofinterestandtodiscloseinformationofthesetransactions
toseeiftheywerenormal,reasonableandwasforthebestbenefitstotheCompanywhileincompliance
with the authorities’ rules and regulations.
4. To give advice and approve the annual auditing plan; to acknowledge and submit an internal auditing
result to the Board of Directors; to review an annual budget and to supervise and evaluate the Internal
Audit Department’s performance.
The Audit Committee, having reviewed the 2012 auditor and the soundness of the auditing fee, eventually
proposed to the Board of Directors to seek the Annual General Meeting’s approval to appoint Mr.Charoen
Phosamritlert, CPA No. 4068 and/or Miss Vannaporn Jongperadechanon, CPA No. 4098 and/or Mr. Vichien
Thamtrakul,CPA No.3183ofKPMGPhoomchaiAuditLtd.astheCompany’sauditor.
Mr. Sansern Wongcha-umChairman of the Audit Committee
21 February 2012
Report of the Board’s Responsibility in the Financial Statements
First line
22
Report of the Board’s Responsibility in the Financial StatementsThe Erawan Group Public Company Limited
TheBoardofDirectorswasresponsibleforthefinancialstatementsofTheErawanGroupPublicCompany
Limitedanditssubsidiaries.ThefinancialstatementwasdoneaccordingtotheGenerally-AcceptedAccounting
Principles in Thailand where an appropriate accounting policy was chosen and implemented. In addition, discretion
was exercised, the best estimates were selected and adequate information was disclosed in Notes to Financial
Statement.
The Board of Directors appointed the Audit Committee, which consisting of 3 independent directors,
to responsible for auditing the company’s financial statements and to evaluate the internal control system
forefficiency.TheAuditCommittee’sopinioninthismatterwasinReportoftheAuditCommitteetoShareholder.
In this regard, the Board of Directors is of the opinion that the Company’s internal control system is proven
satisfactory and contributes to the Company’s credibility as of 31st December 2011.
Mr. Prakit PradipasenChairman of The Board of Directors
Mrs. Kamonwan WipulakornPresident
23
SUCCESS WITH INTEGRITY
ABOUT ERAWAN
Corporate Prof ile
First line
24
Corporate Prof ileThe Erawan Group Public Company Limited
Courtyard by Marriott Bangkok
2007
Holiday Inn Pattaya
2009
Grand Hyatt Erawan Bangkok Hotel
1991JW Marriott Hotel Bangkok
1997
7 ibis Hotels
2008-2010
Erawan Bangkok
2004
Established on 29 December 1982and continue to develop various real-estate (Hotels and Rental Properties) over the past
30 years
1985
Amarin Plaza 1985
The Company was founded
1988
Registeredon Stock Exchange
of Thailand
1991
Grand Hyatt Erawan Bangkok Hotel
1997
JW Marriott Hotel Bangkok
2007
Amarin Plaza Sold
Courtyard by Marriott Bangkok Hotel
2009
Holiday Inn Pattaya
2 ibis Hotels : ibis Bangkok Nana and ibis Phuket Kata
2010
ibis Bangkok Riverside
2008
Six Senses Sanctuary Phuket 4 ibis Hotels : ibis Phuket Patong, ibis Pattaya, ibis Bangkok Sathorn and ibis Samui Bophut
2005
Renaissance Koh Samui Resort and Spa
1994
Converted in to a Public Company
1996
Ploenchit Center
2004
Erawan Bangkok
Ploenchit Center Sold; Erawan’s Subsidiary, Erawan Commercial Management Co.,Ltd, continues to manage the building
The Naka Island, a Luxury Collection Resort and Spa Phuket; rebranded from Six Senses Sanctuary Phuket
2011
Corporate Profile 25
SUCCESS WITH INTEGRITY
Corporate Prof ileThe Erawan Group Public Company Limited
Courtyard by Marriott Bangkok
2007
Holiday Inn Pattaya
2009
Grand Hyatt Erawan Bangkok Hotel
1991JW Marriott Hotel Bangkok
1997
7 ibis Hotels
2008-2010
Erawan Bangkok
2004
Established on 29 December 1982and continue to develop various real-estate (Hotels and Rental Properties) over the past
30 years
1985
Amarin Plaza 1985
The Company was founded
1988
Registeredon Stock Exchange
of Thailand
1991
Grand Hyatt Erawan Bangkok Hotel
1997
JW Marriott Hotel Bangkok
2007
Amarin Plaza Sold
Courtyard by Marriott Bangkok Hotel
2009
Holiday Inn Pattaya
2 ibis Hotels : ibis Bangkok Nana and ibis Phuket Kata
2010
ibis Bangkok Riverside
2008
Six Senses Sanctuary Phuket 4 ibis Hotels : ibis Phuket Patong, ibis Pattaya, ibis Bangkok Sathorn and ibis Samui Bophut
2005
Renaissance Koh Samui Resort and Spa
1994
Converted in to a Public Company
1996
Ploenchit Center
2004
Erawan Bangkok
Ploenchit Center Sold; Erawan’s Subsidiary, Erawan Commercial Management Co.,Ltd, continues to manage the building
The Naka Island, a Luxury Collection Resort and Spa Phuket; rebranded from Six Senses Sanctuary Phuket
2011
Current Business Operations
First line
26
Current Business OperationsThe Erawan Group Public Company Limited
The company and its subsidiaries’ core businesses are investment and development of diversified hotel properties across Thailand’s key destinations. Currently, the company owns 13 hotels and operates other business including retail space rental, and management of office building.
Hotels and Resorts
Grand Hyatt Erawan BangkokSegment : Luxury HotelNumber of rooms : 380 roomsLocation : Rajdamri Road, Bangkok, CBD.Remaining on the current lease : 30 yearswww.bangkok.grand.hyatt.com
The Naka Island, a Luxury Collection Resort & Spa, PhuketSegment : Luxury Resort and spaNumber of rooms : 67 pool villas Location : Koh Naka Yai, Phuketwww.nakaislandphuket.com
JW Marriott Hotel BangkokSegment : Luxury HotelNumber of rooms : 441 rooms Location : Sukhumvit Soi 2, Bangkok, CBD.Remaining on the current lease : 33 years www.marriott.com/bkkdt
Renaissance Koh Samui Resort and SpaSegment : Luxury ResortNumber of rooms : 45 deluxe rooms and 33 pool villasLocation : Lamai Beach, Koh Samui, Surat Thaniwww.marriott.com/usmbr
Holiday Inn PattayaSegment : Midscale Hotel Number of rooms : 367 rooms Location : Pattaya Sai 1 Road, Chon Buriwww.holidayinn.com/pattaya
Courtyard by Marriott BangkokSegment : Midscale Hotel Number of rooms : 316 roomsLocation : Rajdamri Road, Bangkok, CBD.Remaining on the current lease : 26 yearswww.courtyard.com/bkkcy
ibis Phuket Patong Segment : Economy HotelNumber of rooms : 258 roomsLocation : Patong Beach, Phuketwww.ibishotel.com
ibis Phuket Kata Segment : Economy HotelNumber of rooms : 258 roomsLocation : Kata Beach, Phuketwww.ibishotel.com
Current Business Operations 27
SUCCESS WITH INTEGRITYCurrent Business OperationsThe Erawan Group Public Company Limited
The company and its subsidiaries’ core businesses are investment and development of diversified hotel properties across Thailand’s key destinations. Currently, the company owns 13 hotels and operates other business including retail space rental, and management of office building.
Hotels and Resorts
Grand Hyatt Erawan BangkokSegment : Luxury HotelNumber of rooms : 380 roomsLocation : Rajdamri Road, Bangkok, CBD.Remaining on the current lease : 30 yearswww.bangkok.grand.hyatt.com
The Naka Island, a Luxury Collection Resort & Spa, PhuketSegment : Luxury Resort and spaNumber of rooms : 67 pool villas Location : Koh Naka Yai, Phuketwww.nakaislandphuket.com
JW Marriott Hotel BangkokSegment : Luxury HotelNumber of rooms : 441 rooms Location : Sukhumvit Soi 2, Bangkok, CBD.Remaining on the current lease : 33 years www.marriott.com/bkkdt
Renaissance Koh Samui Resort and SpaSegment : Luxury ResortNumber of rooms : 45 deluxe rooms and 33 pool villasLocation : Lamai Beach, Koh Samui, Surat Thaniwww.marriott.com/usmbr
Holiday Inn PattayaSegment : Midscale Hotel Number of rooms : 367 rooms Location : Pattaya Sai 1 Road, Chon Buriwww.holidayinn.com/pattaya
Courtyard by Marriott BangkokSegment : Midscale Hotel Number of rooms : 316 roomsLocation : Rajdamri Road, Bangkok, CBD.Remaining on the current lease : 26 yearswww.courtyard.com/bkkcy
ibis Phuket Patong Segment : Economy HotelNumber of rooms : 258 roomsLocation : Patong Beach, Phuketwww.ibishotel.com
ibis Phuket Kata Segment : Economy HotelNumber of rooms : 258 roomsLocation : Kata Beach, Phuketwww.ibishotel.com
Current Business Operations
First line
28
ibis Bangkok Nana Segment : Economy HotelNumber of rooms : 200 roomsLocation : Sukhumvit Soi 4, Bangkok, CBD.Remaining on the current lease : 27 yearswww.ibishotel.com
ibis Bangkok Riverside Segment : Economy HotelNumber of rooms : 266 roomsLocation : Charoennakorn Road, Chaophraya River,BangkokRemaining on the current lease : 23 yearswww.ibishotel.com
ibis Samui BophutSegment : Economy HotelNumber of rooms : 205 rooms Location : Bophut Beach, Koh Samui, Surat Thaniwww.ibishotel.com
Segment : Economy HotelNumber of rooms : 213 roomsLocation : Rama IV Road, Bangkok, CBD.Remaining on the current lease : 27 yearswww.ibishotel.com
ibis Bangkok Sathorn
ibis Hua HinSegment : Economy HotelNumber of rooms : 200 roomsLocation : Hua Hin, Prachuap Khiri Khan(Opened January 2012)
Properties Under Development
Mercure Bangkok Siam ibis Bangkok SiamSegment : Midscale and Economy HotelNumber of room : 380 roomsLocation : Siam Square, shopping area next to BTS National Stadium Station, Bangkok, CBD.Remaining on the current lease : 31 years
ibis PattayaSegment : Economy HotelNumber of rooms : 259 rooms Location : Pattaya Sai 2 Road, Chon Buriwww.ibishotel.com
Current Business Operations 29
SUCCESS WITH INTEGRITY
ibis Bangkok Nana Segment : Economy HotelNumber of rooms : 200 roomsLocation : Sukhumvit Soi 4, Bangkok, CBD.Remaining on the current lease : 27 yearswww.ibishotel.com
ibis Bangkok Riverside Segment : Economy HotelNumber of rooms : 266 roomsLocation : Charoennakorn Road, Chaophraya River,BangkokRemaining on the current lease : 23 yearswww.ibishotel.com
ibis Samui BophutSegment : Economy HotelNumber of rooms : 205 rooms Location : Bophut Beach, Koh Samui, Surat Thaniwww.ibishotel.com
Segment : Economy HotelNumber of rooms : 213 roomsLocation : Rama IV Road, Bangkok, CBD.Remaining on the current lease : 27 yearswww.ibishotel.com
ibis Bangkok Sathorn
ibis Hua HinSegment : Economy HotelNumber of rooms : 200 roomsLocation : Hua Hin, Prachuap Khiri Khan(Opened January 2012)
Properties Under Development
Mercure Bangkok Siam ibis Bangkok SiamSegment : Midscale and Economy HotelNumber of room : 380 roomsLocation : Siam Square, shopping area next to BTS National Stadium Station, Bangkok, CBD.Remaining on the current lease : 31 years
ibis PattayaSegment : Economy HotelNumber of rooms : 259 rooms Location : Pattaya Sai 2 Road, Chon Buriwww.ibishotel.com
Current Business Operations
First line
30
Retail Shops (up-scale) : 6,849 sq.m. Location : Adjacent to Grand Hyatt Erawan Hotel Rajdamri Road, Bangkok, CBD.Remaining on the current lease : 30 yearswww.erawanbangkok.com
Ploenchit CenterPloenchit CenterOwner: Prime Office Leasehold Property Fund Owner: Prime Office Leasehold Property Fund (managed by The Erawan Group PLC)(managed by The Erawan Group PLC)
Office Building : 42,590 sq.m. Location : Sukhumvit Road Bangkok, CBD.
Rental PropertiesRental Properties
Erawan Bangkok Erawan Bangkok Erawan Bangkok Retail Shops (up-scale) : 6,849 sq.m. Retail Shops (up-scale) : 6,849 sq.m.
Rental PropertiesRental PropertiesRental Properties
31
SUCCESS WITH INTEGRITY
Our Business StrategyThe Erawan Group Public Company Limited
The Erawan Group’s Third-Party Hotel Management Partners
Our Business Strategy
Core Business Strategies as follows;
1. Existing Properties: Maximizing value through continuous improvement and effective management.
2. FutureProjects:Developingawell-diversifiedhoteland/orresortportfoliotomeetdiversecustomers’needs
to diversify risks and yield appropriate returns.
3. Ensuring stability and sustainable growth of the organization through development of systems, human
capitals, core competencies, information database for decision making, and core corporate culture.
Third-Party Hotel Management Company Selection Policy: Third-Party Hotel Management Companies selected
tomanageourpropertiesareInternationalhoteloperatorswithreputableprofile,andmanagementexperience.
Criteria for hotel Brand selection is based on expertise of Management Company and suitability of the Brand for
the property.
First line
32 Our Shareholders and Management
Our Shareholders and ManagementThe Erawan Group Public Company Limited
Shareholders
As at 31st December 2011, the company’s paid up capital is Baht 2,244,779,001 divided into 2,244,779,001 ordinary shares at par value 1 Baht per share. Top ten shareholders holding the highest number of shares as of 31st December 2011 are as follows:
1. Mr. Sukakarn Wattanavekin 379,185,716 16.89%
2. City Holding Co., Ltd. 210,481,318 9.38%
3. Mrs.Wansamorn Wannamethee 131,611,349 5.86%
4. Mitr Phol Sugar Co., Ltd. 131,353,314 5.85%
5. MBK Company Limited 130,937,938 5.36%
6. SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) 120,222,500 5.36%
7. Mr. Isara Vongkusolkit 101,257,910 4.51%
8. Miss Jintana Kanjanakumnerd 83,296,177 3.71%
9. PAN-ASIA SUGAR FUND LIMITED 73,000,000 3.25%
10. Mr. Supol Wattanavekin 58,698,916 2.61%
Total top ten shareholders holding 1,420,045,138 62.78%
Vongkusolkit Group 871,994,642 39 %
Wattanavekin Group 709,907,357 31 %
Total major shareholders 1,581,901,999 70 %
Thai Institution Investor and Foreign Institution Investor 239,354,501 14 %
MBK Company Limited Group 141,468,738 6 %
Company’s executives 16,330,705 1 %
Others 192,094,692 9 %
Total 2,244,779,001 100 %
Investor will be able to see the updated shareholders list from the Company’s website at www.TheErawan.com before the Annual General Shareholders’ Meeting. Detail Groups of Major Shareholders are as follows:
Shareholder’s name Number of shares % of total shares
Major Shareholders Number of shares % of total shares
First line
Our Shareholders and Management 33
SUCCESS WITH INTEGRITY
Management Structure
The Board of directors consists of thirteen (13) directors, the Board has appointed four committees namely: The Audit Committee (AC), The Investment Committee (IC), The Nominating and Corporate Governance Committee (NCG) and The Management Development and Compensation Committee (MDC).
Directors that represent the major shareholders are as follows:
1. Mr. Vitoon Vongkusolkit Vongkusolkit Group
2. Mr. Chanin Vongkusolkit Vongkusolkit Group
3. Mr. Gavin Vongkusolkit Vongkusolkit Group
4. Mr. Supol Wattanavekin Wattanavekin Group
5. Mrs. Panida Thepkanjana Wattanavekin Group
1. Mr. Prakit Pradipasen Chairman of the Board and Independent Director
• MasterofBusinessAdministration(MBA)Wayne State University, Michigan, U.S.A.
2. Mr. Sansern Wongcha-um Independent Director and Chairman of the Audit Committee
• MasterDegreeofBusinessEconomicsUniversity of Bridgeport, Connecticut, U.S.A.
3. Assoc. Prof. Manop Bongsadadt
Independent Director and Member of the Audit Committee
• MasterofArchitecture(M.Arch),Kansas State University, U.S.A.
4. Mr. Dej Bulsuk Independent Director and Member of the Audit Committee
• BachelorofBusinessAdministrationThammasat University
5. Mr. Banyong Pongpanich Independent Director • MasterofBusinessAdministration(MBA)Sasin Graduate Institute of Business Administration of Chulalongkorn University
6. Mr. Ekasith Jotikasthira Independent Director • MasterofBusinessAdministration(MBA)Sasin Graduate Institute of Business Administration of Chulalongkorn University
7. Mr. Vitoon Vongkusolkit Director • BachelorofScienceChulalongkorn University
Director’s Names Groups of Major Shareholders
Name Title Education
First line
34 Our Shareholders and Management
8. Mr. Supol Wattanavekin Director • MasterofBusinessAdministration(Executive) (EMBA) Sasin Graduate Institute of Business Administration of Chulalongkorn University
9. Mr. Chanin Vongkusolkit Director • MasterofBusinessAdministration(Finance) St. Louis University, Missouri, U.S.A.
10. Mrs. Panida Thepkanjana Director • MasterofBusinessAdministration(MBA)Sasin Graduate Institute of Business Administration of Chulalongkorn University
• MasterofLaws,ChulalongkornUniversity• Barrister-at-Law.TheInstituteofThai Bar Association
11. Mr. Gavin Vongkusolkit Director • MasterofBusinessAdministration(Finance) The University of Sydney
12. Mr. Kasama Punyagupta Chief Executive Officer • MasterofBusinessAdministration(International Business) University of Bridgeport, Connecticut, U.S.A.
13. Mrs. Kamonwan Wipulakorn President • MasterofBusinessAdministration (Finance), Western Illinois University, USA.
Authority to sign on behalf of the CompanyTwo of the following four directors namely, Mr. Vitoon Vongkusolkit or Mrs. Panida Thepkanjana or Mr. Kasama
Punyagupta or Mrs.Kamonwan Wipulakorn, shall jointly sign a document together.
Dividend PolicyApproximately35percentofthenetprofitsoftheconsolidatedfinancialstatementsafterdeductionofallkind
ofreservesasspecifiedbylawandtheCompany(withadditionalconditions)
Company Secretary: Miss Kanokwan Thongsiwarugs
Name Title Education
First line
Our Shareholders and Management 35
SUCCESS WITH INTEGRITY
Roles and Responsibilities of the Board of Directors and the CommitteeBoard of Director’s Roles and Responsibilities are:
1. To manage the Company according to the laws, the Objects in Detail, the Articles of Association and resolutions of the Shareholders’ Meeting with integrity and prudence for the Company’s interests.
2. To determine the company’s visions, obligations and business policy. 3. To review the business development plans to increase potential of itself. 4. To consider budgets to maximum the business’s economic values and for better returns to shareholders. 5. To formulate the compensation policy and a succession plan of executives. 6. To supervise and develop risk assessment. 7. To supervise and develop the Company’s corporate governance compliance. 8. To supervise and set up an internal control and an internal audit system. 9. To take care of interests of both major and minor shareholders so that they can equally exercise and
maintain their interests while accessing accurate and complete information with transparence and accountability.
10. To appoint committees in order to determine scopes of work and monitor their performances. 11. To performance evaluation’s executives and the HR development policy.
Term of Directors3 years each term. At the Annual General Meeting (AGM), one-third of all directors shall resign by rotation.
The resigning directors may be re-elected.
The Audit Committee consists of three members as follows:
1. Mr. Sansern Wongcha-um Chairman 2. Assoc. Prof. Manop Bongsadadt Member of the Committee 3. Mr. Dej Bulsuk Member of the Committee
Audit Committee’s Roles and Responsibilities are: 1. To review an annual financial statement already audited by auditors and to ensure that it meets the
generally-accepted accounting principles; to consider and screen financial information together with the Financial and Risk Management Committee and the auditors before releasing it to the third party.
2. To consider and select, propose for appointment and determine auditor’s fees and met four times a year with the auditors.
3. To review material problems and obstacles the auditor may come across while performing his duty and to settle differences between the auditor and the management.
4. To review the appropriateness and effectiveness of the internal control system and internal audit systems are in place according to international standards. 5. To set up a defensive work system for business units in the company to increase operation efficiency
and effectiveness. 6. To review an annual internal audit plan proposed by the Internal Audit Office. To provide opinion on the
consideration of performance, appointment, removal, and remuneration of the Company’s internal auditor.
First line
36 Our Shareholders and Management
7. To promote and support the development of a financial reporting system that meets the international standards.
8. To control company’s compliance with the laws on Securities and Exchange and other legislations relating to its business.
9. To determine fraud prevention measures and review results of a corruption inspection report. 10. To review the accuracy and effectiveness of information technology relating to the internal control
system; to offer advice for roles and regular updates. 11. To consider the Company’s information disclosure in case of connected transactions or transactions
which may involve conflict of interest to ensure that all are correct, sound and carried out in a normal course of business.
12. To prepare the Audit Committee’s report to be signed by chairman of the Committee and disclosed it in the Company’s annual report.
13. To act otherwise as required by the laws or entrusted by the Board of Directors; when performing along its scopes of work, the Audit Committee shall be empowered to order President and Chief Executive Officer, senior executives, heads of department or related staff to provide their opinions, participate in meeting or submit documents deemed necessary or relevant.
Term of Audit Directors:3 years each term.
The Investment Committee consists of seven members as follows: 1. Mr. Vitoon Vongkusolkit Chairman 2. Mr. Banyong Pongpanich Member of the Committee 3. Mr. Supol Wattanavekin Member of the Committee 4. Mr. Chanin Vongkusolkit Member of the Committee 5. Mrs. Panida Thepkanjana Member of the Committee 6. Mr. Kasama Punyagupta Member of the Committee 7. Mrs. Kamonwan Wipulakorn Member of the Committee
The Investment Committee’s Roles and Responsibilities are: 1. To supervise and approve investment projects and divestment transactions as set out in the Company’s
master plan. The Committee’s responsibilities shall include preliminary approvals of project feasibility, financialreturns,andreviewofrisksassociatedwiththeprojectincludingfinancingandrelevantlegalcommitmentsandproposedtotheBoardofDirector forfinalapproval.
2. Toassessandformulateasystematic,clear-cutandefficientriskmanagementplan. 3. To supervise and monitor risk assessment tasks as well as to adjust and develop the risk management on a regular basis.
Term of Investment Directors:3 years each term.
The Nominating and Corporate Governance Committee consists of four members as follows: 1. Mr. Prakit Pradipasen Chairman 2. Mrs. Panida Thepkanjana Member of the Committee 3. Mr. Chanin Vongkusolkit Member of the Committee 4. Mr. Gavin Vongkusolkit Member of the Committee
First line
Our Shareholders and Management 37
SUCCESS WITH INTEGRITY
Nominating and Corporate Governance Committee’s roles and responsibilities are: 1. Todetermine theBoardofDirectors’compositionandqualificationof itsmembersaswellasmembers of board committees. 2. To nominate candidates for the Board of Directors and member of board committees. 3. To determine the Remuneration of Directors. 4. To propose corporate governance policies and guidelines to the Board of Directors and to review and update such policies and guidelines on ongoing basis. 5. To evaluate the Board of Directors and each committee’s performance and to ensure that the Board of Directors and management’s operations are being conducted within corporate governance policies and guidelines. 6. To promote knowledge acquisition for the Company’s nature of business, regulations, and strategy.
Term of Nominating and Corporate Governance Director:
3 years each term.
The Management Development and Compensation Committee consists of four members as follows:
1. Mr. Supol Wattanavekin Chairman 2. Mr. Vitoon Vongkusolkit Member of the Committee 3. Mr. Banyong Pongpanich Member of the Committee 4. Mr. Ekasith Jotikasthira Member of the Committee
Management Development and Compensation Committee’s roles and responsibilities are:
1. To assess and evaluate performances; to determine annual remunerations and a compensation structureofPresidentandChiefExecutiveOfficerwhileofferinghimanadviceregardingremunerations of senior executives. 2. ToconsideraplantodevelopskillsandcompetencyofPresidentandChiefExecutiveOfficerNominees (in case of change). 3. TodeterminesignificantHRpolicies i.e.andstructureofstaff’s remunerations forAnnualRemunerations and Budgeting, Rewards (bonus), etc. 4. To consider an allocation of the Employees Share Options Program (ESOP) in case such allocation exceeds 5 percent of the program’s shares.
Term of Management Development and Compensation Directors:
3 years each term.
Independent Directors, who account for 46 percent of the Company’s Board of Directors, consist of:
1. Mr. Prakit Pradipasen Independent Director 2. Mr. Sansern Wongcha-um Independent Director 3. Assoc. Prof. Manop Bongsadadt Independent Director 4. Mr. Dej Bulsuk Independent Director 5. Mr. Banyong Pongpanich Independent Director 6. Mr. Ekasith Jotikasthira Independent Director
First line
38 Our Shareholders and Management
The Company’s Executives consist of:
1. Mr.KasamaPunyagupta ChiefExecutiveOfficer 2. Mrs. Kamonwan Wipulakorn President 3. Mr.KrailuckAsawachatroj ExecutiveVicePresidentandChiefFinancialOfficer 4. Mr. Petch Krainukul Executive Vice President 5. Mrs. Varisara Gerjarusak Executive Vice President 6. Mr. Apichan Mapaisansin Assistant Executive Vice President 7. Mr. Suchai Wuthworachairung Assistant Executive Vice President 8. Miss Pakinee Pramtade Senior Vice President 9. Mr. Viboon Chaisutyakorn Vice President
Duties and Authorities of Chief Executive Officer (CEO)
1. To formulate the Company’s Vision and Mission. 2. To formulate the Company’s business plans and strategies to achieve Vision set forth for the Company.
3. To formulate development plans for the Company’s top executives and be responsible for succession plansoftheCompany’sChiefExecutiveOfficerandPresident. 4. Be responsible for the Company’s long term strategic direction and expansion plans. 5. To provide advice to President for the Company’s overall management.
Duties and Authorities of President
1. To formulate the Company’s business plan and strategy in accordance with the Company’s Vision and Mission. 2. To formulate the Company’s annual budget and allocate required resources to achieve annual goal. 3. Tomanagehumanresourcesincludingrecruiting,settingcompensations,welfareandbenefits,setting evaluation methods, appointing, removing and transferring staff and issuing rules, regulations and announcements as deemed appropriate.
4. To set forth management structure, determine roles, duties and approval authorities.5. Todevelopvarioussystemstoensureeffectiveandefficientoperations.
6. To build and nurture corporate cultures to achieve long term sustainable growth. 7. To develop skills, knowledge and employee competency in accordance with the Company’s business plan. 8. Todevelopvalidandsufficientdatabasestosupportdecisionmaking. 9. Torepresentandpromotecorporateimageandprofiletopublic. 10. To develop good corporate governance and ensure good practice throughout both at company and employee’s level.
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Our Shareholders and Management 39
SUCCESS WITH INTEGRITY
Duties and Responsibilities of Company Secretary The Company Secretary shall have duties and responsibilities that are no fewer than what the Securities and
Exchange Act (No. 4) B.E. 2551 and/or other related laws, rules and regulations have stipulated. This includes:1. TosupporttheBoardtoperformitsfiduciarydutieswithintegrityandcareasanormalpersonmaydo
in the same situation; to offer advice to directors, the Management and staff to ensure compliances to the laws, rules and regulations of the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) and other relevant legislations.
2. To supervise the internal auditing, the internal control system, compliance to the principle of good corporate governance and to be a center in compiling risk management plans.
3. Tocoordinatemattersrelatingtodirectorssuchaschangesofqualifications,changesofrolesandduties,termsofofficesofcommittees,resignationonrotation,resignationpriortoaduetermandappointmentof new directors.
4. Tospecifyandinformaplacewhereimportantdocumentsofthefirmarekeptandtodiscloserelatedinformation based on duties and responsibilities to the SEC.
5. To monitor the Management’s performances to ensure good practices. 6. To prepare enough annual reports for distribution to shareholders and related persons. 7. To review invitation letters to the Annual General Meeting of Shareholders and the Extraordinary General
Meeting of Shareholders, adequacy of documents, supporting documents and information disclosure to the meeting and minutes of the meeting.
8. To disclose related information under the Secretary’s duties and responsibilities to the SET.
The Company’s Articles of Association of the Nomination of DirectorsClause 18 the Shareholders’ Meeting shall elect directors according to the following rules and procedures:
18.1 Chairman of the Meeting shall propose names and work experiences of nominees submitted by the Board of Directors for approval.
18.2 Each shareholder shall have voting rights equal to the number of shares he holds. 18.3 An election of director may be done by voting either one or several persons as director as
the Shareholders’ Meeting deems appropriate. However, each shareholder must exercise all of his voting rights existed under Clause 18.2 for each director. Dividing votes to a particular nominee is not permitted.
18.4 Those receiving the highest votes in a sequent order shall be elected as directors for an available number of directors. Should those elected in a subsequent order enjoy equal votes which however exceed the number of the existing directors, Chairman of the Meeting shall have a casting vote.
Clause 48 A resolution of the Shareholders’ Meeting shall consist of the following votes: 48.1 In a normal case, majority votes of shareholders who attend the meeting (either by themselves
or by proxy) and exercise their votes shall be considered a resolution.
Shareholding of the Board of Directors and Management40
1. Mr. Prakit Pradipasen
2. Mr. Sansern Wongcha-um
3. Assoc. Prof. Manop Bongsadadt
4. Mr. Dej Bulsuk
5. Mr. Banyong Pongpanich
6. Mr. Ekasith Jotikasthira
7. Mr. Vitoon Vongkusolkit
8. Mr. Supol Wattanavekin
9. Mr. Chanin Vongkusolkit
10. Mrs. Panida Thepkanjana
11. Mr. Gavin Vongkusolkit
12. Mr. Kasama Punyagupta
13. Mrs. Kamonwan Wipulakorn
14. Mr. Krailuck Asawachatroj
15. Mr. Petch Krainukul
16. Mrs. Varisara Gerjarusak
17. Mr. Apichan Mapaisansin
18. Mr. Suchai Wuthworachairung
19. Miss Pakinee Pramtade
20. Mr. Viboon Chaisutyakorn
Chairman of the Board of Directors
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Director
Director
Director
Director
Director
Chief Executive Off icer
President
Executive Vice President andChiefFinancialOfficer
Executive Vice President
Executive Vice President
Assistant ExecutiveVice President
Assistant ExecutiveVice President
Senior Vice President
Vice President
150,058
-
319,729
660,000
-
-
11,457,870
58,698,916
5,493,550
3,797,416
97,213
9,999,999
-
-
839,082
-
1,000,000
1,745,716
-
1,088,697
150,058
-
319,729
660,000
3,001,500
-
11,457,870
58,698,916
5,493,550
3,797,416
97,213
11,510,211
-
-
839,082
-
1,000,000
1,825,716
-
1,088,697
-
-
-
-
(3,001,500)
-
-
-
-
-
-
(1,510,212)
-
-
-
-
-
(80,000)
-
-
Shareholding of the Board of Directors and ManagementThe Erawan Group Public Company Limited
Note: From report of securities held by the Company’s directors as of 31st December 2011
TitleNameOrdinary Share (Units)
31 Dec.2011 31 Dec.2010 +(-)
Hotel Industry
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42
Hotel IndustryThe Erawan Group Public Company Limited
Trend of the Tourism IndustryThailand tourism industry had clearly shown its strength and potential in the year 2011. Despite being
adverselyaffectedbythefloodduringthehighseasoninthelastquarter,annualinternationaltouristarrivalshadreached19.1millionarrivals*,up20percentfrom2010.Thefigurewaswellsurpassed16–17millionarrivals,a forecasted number by Tourism Authority of Thailand (TAT) at the beginning of 2011, but it was below a mid-yearrevisedforecastof19.5millionarrivals.Domestictourism,however,tookagreaterimpactfromthefloodas local tourism shrink to show 100 million* trips for the year, less than a projection by Kasikorn Research Center of 105 million trips. Nevertheless, income from tourism, international and local combined, soared 8 percent to reachanoutstandinglevelofmorethan1trillionBaht.Thisfirmdevelopmentin2011wasdrivenbymanyfactorsespecially from political stability, growth in Asian economy leading to growth in Asian tourists, sharp increase inRussianvisitors,andconstantmarketingactivitiesbyTATsuchastradeshowstostimulatetouristconfidenceandstrengthentheimageofThailandtourism.Thestrengthofthetourismindustrywasalsoreflectedbyasurveyresult of Travel & Leisure Magazine’s, which readers voted Bangkok as number one for World’s Best City Award 2011, the same position for two consecutive years.
2004
Million Arrivals
10
12
14
20
16
18
2005 2006 2007 2008 2009Political Unrest
& Flu Pandemic
PoliticalUnrest
FloodCrisis
AirportClosure
Coup D'etat
Tsunami
2010 2011 E 2012 F
Growth (%)Number of International Tourist Arrivals
+16%
+19%
-1%
+5%
+1%
+13%
+20%
+8%
-3%
Sources: TAT; Ministry of Tourism and Sports; Department of Tourism
* Preliminary information from TAT in January 2012
Hotel Industry 43
SUCCESS WITH INTEGRITY
Holiday Inn Pattaya
During the first quarter of 2011, foreign tourist arrivals continued itsmomentum from the last quarter of
2010 showing 5.4 million arrivals, the best performing quarter of the year. Chinese, Russian, and Indians showed
significantgrowth fromthesamequarter lastyear.Secondquarterstilldemonstratedstrong touristconfidence,
as international arrivals saw a tremendous 54 percent growth from same period last year, a period with political
riots in Bangkok CBD. Despite political uncertainty during pre- and post-election periods in the third quarter,
internationalarrivalsstill increasedby28percentcomparedwith2010.However, thefloodduringthefourth
which devastated many areas particularly in the Northern and Central regions of Thailand as well as parts of
Bangkok urged many foreign governments to issue Travel Warnings to their citizens not to visit affected areas
withinThailand.SuchTravelWarningsalongwith thenews footageof floodedDonMuangAirport,andseveral
tourist attractions greatly impacted the number of international tourist arrivals to Bangkok area due to many trip
cancellations.Tourismsituationatothermajortouristdestinations,unaffectedbyflood,suchasPhuket,Samui,and
Chiang Mai, had received no adverse impact from the Warnings and the news because of the rising popularity in
commutingbycharteredflightsanddirectflightsdirectlytosuchresortdestinations.Intotal,internationalarrivals
during the last quarter dropped 9 percent compared with last year to 4.3 million arrivals.
Hotel Industry
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44
As regards todomestic tourismduring2011, thesituationappearedpromisingduring the firsthalfof theyearasdomestictripsincreased2percentcomparedwithsameperiodlastyear.However,thefloodadverselyimpacted the tourism industry during the last quarter of the year. Even though, countless Bangkok residences evacuatedfromthefloodedareastostayataccommodationsinnearbydestinationssuchasPattayaandHuaHin,the momentum of domestic tourism during such high season was greatly deteriorated especially during the festiveperiod. Number of domestic trips dropped 5% from 2010 and less than its forecasted numbers to report an annual figureof100milliontrips.
Thailand tourism industry in 2012 is expected to continue its positive trend and show concrete growth in terms of both number of tourist arrivals and income from tourism. Major positive factors contributing to its continued growth include strong Asian economy leading to greater number of Asian tourists, as well as the steady expansionof low-costairlinesintermsofmorefrequentflights,moreroutes,andmore airporthubs.In2012,tourists from China, Russia, and India (RIC), which currently contribute 18 percent of total international tourist arrivals,willplayasignificant role instimulatingThailandtourism industry.TATandtheTourismCouncilofThailand(TCT)expect internationaltouristarrivalstogrowby8–10percentwhichwillbringthefiguretoastaggering20.5 – 20.8million*Preliminary forecast fromTAT in January 2012 arrivals for 2012. As regards to marketing strategies, TAT will promote Thailand under the campaign “Amazing Thailand: Always Amazes You” to build up its strengths as a valued destination offering memorable travel experience to differentiate Thailand from other tourist destinations.
2004
Million trips
50
60
70
100
110
80
90
2005 2006 2007 2008 2009Political Unrest
& Flu Pandemic
Political Unrest
Flood Crisis
Airport Closure
Coup D'etat
Tsunami
2010 2011 E 2012 F
Growth (%)Domestic Tourist Trips
+8%+6%
+2% +1% +2% +3%
+17%
-1%
+7%
5050
Sources: TAT; Ministry of Tourism and Sports; Department of Tourism
*Preliminary forecast from TAT in January 2012
Hotel Industry 45
SUCCESS WITH INTEGRITY
For domestic tourism, TAT is fully committed to stimulate the industry back from a slump starting with a conceptofvolunteertourismintheregionsthatexperiencedfloodinthelastquarterof2011andthecampaign“Travel with a New Heart for a Sustainable Thailand” will be launched to stimulate 2012 domestic tourism. In addition, TCT expects domestic tourism to fully recover in the second quarter, particularly during Songkran Festival and school holiday. However, the degree of tourism recovery depends largely on restoration of tourist attractions and tourist services as well as the effectiveness of marketing activities to stimulate Thai tourists. Domestic tourist trips are expected to reach 107.48 million trips or grow by 7 percent from 2011, according to TAT.
Regarding new international- and regional-chain hotel supply, it is expected that many luxury and mid-scale hotels will commence their business in 2012, especially in Bangkok that several luxury and mid-scale hotels opened their doors since middle of 2011 and the opening will continue throughout 2012. This growing new supplyin luxury and mid-scale segments tends to lead to intense competition within the segments since the highest contributing and fastest-growing tourist source markets, the RIC, have a tendency to travel as tour series groups and accommodate at economy hotels.
Nonetheless, Thailand tourism industry is still a robust and prospective industry. Long-lasting tourism reputation; sincere Thai hospitality; variety and beauty of cultural and natural attractions, and value-for-money all contributes to Thailand as a competitive tourism product. In addition, sharp increase in number of Asian tourists and the travel behavior to travel more in neighboring countries will become main factors contributing to long-term sustainability of Thailand tourism industry.
Renaissance Koh Samui Resort & Spa
Risk Factors 46
Risk FactorsThe Erawan Group Public Company Limited
Our company has the Investment Committee (“IC”) to supervising and managing policies, plans and investment projects approved by the Board. The Committee also ensures that the firm has a systematic, distinct and effective risk management system. Each head of department are responsible to analyze and formulate with the strategies to manage or mitigate the risks. Risks associated with our operations are:
1. Risk Management: Dependence of Third-party Hotel managementThe company has no policy to manage hotels by ourselves. International hotel operators are hired to utilize
their reputations, experiences and expertise in managing and administering our hotels. These hotel operators include Hyatt International, Marriott International, Accor Hotels, InterContinental Hotels Group, and Starwood Hotels & Resorts Worldwide. The operators we have selected are amongst the world’s largest operators with proven track records, tested systems, reputations, and strong financial positions. Therefore, we believe that, even though hotel management agreements are of long-term nature and could exposed the company to the risk that brand reputations and operators’ capabilities to compete may decline during the contracted period, the possibilities of such deterioration of performances is minimal. Furthermore, all hotel management agreements with the hotel operators include termination for non-performance clause in case hotel performances have constantly not reached desired level. This clause, therefore, allows the company to appoint another international hotel operator to take over the management of the property.
2. Risk from Declining Demand and Increasing SupplyThe unbalanced situation of supply and demand could cause an intense competition in the hotel market,
which may affect company’s income and operating profit. However, the company hires different highly-experienced hotel management operators to manage our properties base on their expert market segments. Such hotel operators can provide competitive advantage such as, wide-range of customer base to ensure certain level of demand, and proactive crisis management under unpredictable situation. Furthermore, the company has always been proactive in reestablishing and introducing new hotel competitive strengths as well as continuously manages its expenses to stay at the minimum. In addition, a strategy to diversify investment portfolio to luxury, mid-scale and economy hotels in various tourist destinations help to mitigate this demand-supply risk effectively.
3. External Risk Factors Impacting Company’s Assets and Business OperationsExternal risk factors such as natural disaster, terrorism or political unrest that may have an impact on
company’s properties and business operations are unpredictable and uncontrollable. However, the company has set certain emergency standard procedures based on international standard to reduce adverse impacts from such unpredictable events. For example, crisis management at different hotel properties during the flood, which was established according to the severity of each location, including constructing flood barriers to defend important sites of the hotels, preparation of food, beverages, and other consumer products, preparation of power generator, and temporarily close high-risk property and transfer hotel guests to other low-risk properties. Standard procedures to manage political unrest risks have also been implemented, including restricted access to and from properties, setup barriers within vicinity, and evacuation in accordance with international standard. Furthermore,
Risk Factors 47
SUCCESS WITH INTEGRITY
all hotel properties of the company are covered under all-risk, business interruption, and terrorism insurances to cover the aforementioned damages should they have direct impact to any of the properties.
4. External Risk Factors Affecting Hotel Business Performance External risk factors affecting hotel business performance, such as natural disaster, political unrest or
epidemic, are beyond company’s control and prevention. Such external factors could cause sudden drop in number of international tourist arrival, which will have a direct impact on hotel revenue and net income. Nevertheless, precedent events have shown a pattern that these adverse impacts are short-lived, around 3 - 9 months, depending on severity. The company’s risk management strategies to handle these external factors are to haveaflexibilityandresponsivenessinoursystems.Salesandmarketingactivitiesareflexibleforfastreactiontomarketcondition,whileproactivecostmanagementpoliciesallowthecompanytoberesilientindifficultperiods.
5. Interest rate risk Interest rate risk, which is a result of changes of market rates in the future, will affect our operating results
andcashflow.Forthepurposeoffinancialriskmitigationinlightofinterestuptrend,theCompanyconvertedaportionoflongtermloanfromfloatingratesintofixedrates.Asof31st December 2011, approximately 34 percent of our long term loans were subject to a fixed rate and 66 percent were subject to a floating interest rate. Ourfloating-ratetermloansapplyaMinimumLendingRate(MLR),a6-monthFixedDepositRateand12-monthFixed Deposit Rate as a benchmark.
6. Human Resources Risk Loss of executive management or key personnel of the company is also considered a risk for the company.
However, human resources development and management is one of the key priorities of the company. Over the past years, the company has recruited employees and managements in rapid growth departments and provides continuous training and development to existing employees. More importantly, the company has implemented a 3-layersuccessionplanfromPresidentandChiefExecutiveOfficerdowntoVicepresidentlevelwhichsupervisedby the Management Development and Compensation Committee (“MDC”) and Executive Vice President of each departmentrespectively.Inaddition,withaprofessionallyrunstructure,thecompanyoperatesunderanefficientsystem and do not rely on sole capability or decision-making of a single individual. Authority has been decentralized to various level employees under the supervision of the Board of Directors. These structures of management will help reduce risk from loss of key personnel.
In addition, key corporate cultures including “Team spirit” and “With integrity”, will also attract capable professionalswith integrity to join thecompany.Lastly,competitivecompensationandbenefits,bonusschemewhich links to corporate strategy map as well as long term stock option plan for executive management and employees also creates commitment and loyalty to employees which will help them to work more efficiently. This compensation structure will also help to retain quality employees with the company.
Good Coporate Governance Award
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48
Good Corporate Governance AwardThe Erawan Group Public Company Limited
Year 2011 • “Excellent” AGM Assessments Program
Project: AGM Assessments Program 2011
• “Excellent” CGR Report 2011
Project: Corporate Governance Report of Thai Listed Companies
•Nomination to “Excellent CSR Awards 2011”
Project: SET Awards 2011
Excellent CGR Report 2009 - 2011
Year 2005-2010 •“2nd Quartile Year 2005” (Top rating = 1st Quartile), Project: Corporate Governance Report of Thai Listed Companies •“good”AGMAssessmentsProgram,Project:AGMAssessmentsProgram2006 • “verygood”CGRReport2006,Project:CorporateGovernanceReportofThaiListedCompanies • “verygood”AGMAssessmentsProgram,Project:AGMAssessmentsProgram2007 •BoardoftheYearforDistinctivePractices2006/2007,Project:BoardoftheYearAwards2006 • “verygood”CGRReport2008,Project:CorporateGovernanceReportofThaiListedCompanies • “Excellent”AGMAssessmentsProgram,Project:AGMAssessmentsProgram2008 • “Excellent”CGRReport2009,Project:CorporateGovernanceReportofThaiListedCompanies • “Excellent”AGMAssessmentsProgram,Project:AGMAssessmentsProgram2009 • 1in3Nominationto“IRExcellent”Awards2009,Project:SETAwards2009 • “ExcellentrecognizedasGoodExample”AGMAssessmentsProgram,Project:AGMAssessmentsProgram2010 •“Excellent”CGRReport2010,Project:CorporateGovernanceReportofThaiListedCompanies • “Excellent”IRAwards2010,Project:SETAwards2010 •Nominationto“ExcellentCSRAwards2010”,Project:SETAwards2010
Year 2011Year 2011 • • “Excellent” AGM Assessments Program“Excellent” AGM Assessments Program
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50 Corporate Governance Policy
The Erawan Group Plc. (ERW) is managed on the principle of good corporate governance. The business is run in compliance with the laws and on the basis of the Business Code of Conduct where information is disclosed in a transparent and straightforward manner. We have also put in place efficient auditing mechanisms. We operate our business by taking into consideration our responsibility in every aspect to shareholders and stakeholders, the structure of our Board of Directors, supervision mechanisms and efficient management responsibility. Aside from complying with the OCED’s best practices, we also implement other best practices normally practiced overseas; for example, The Erawan Group have set up four sub-committees to help supervising each task or the fact that our board consists of as much as 46 percent of Independent Directors out of the entire board. With regard to corporate governance, The Erawan Group has set up the Nominating and Corporate Governance Committee (NCG) to regularly review and update corporate governance policies and practices so the company will continue to have up-to-date criteria that it can be actually implemented. To comply with the policy, the Chief Executive Officer and President has been directed to promote corporate governance among staff of all levels.
The President requires the Code of Conduct be made for employees of all levels as a clear guideline for practices under the corporate governance policy. Two Town Hall meetings a year are held to promote understanding in this subject matter. Besides, we also aim to do our success with integrity, which is one of the four values set as our corporate culture. We also ensure that staff understands the concept of Social Corporate Responsibility (CSR) where business is run by properly taking into consideration the interest of all stakeholders whether they are customers, suppliers, shareholders, creditors, employees, the society or the environment. The Erawan Group regularly conducts an opinion survey of stakeholders. Results of the survey are used to improve business efficiency and to be one of the factors evaluating our staff performances annually.
How we started our CSR?It started at the corporate leader who had the right understanding of the CSR framework. The CSR core
is to be responsible in one’s own duty and to treat all stakeholders whether they are shareholders, employees, their families, customers, creditors, suppliers, competitors, government, the society and industrial counterparts with respect and sincerity.
Today, when people heard about CSR, they tend to think of corporate activities held for the benefit of the community, society and the environment. This can be donations for various forms of campaigns to sponsoring a sports event to building schools to the less fortunate students or even promoting the use of green products. In short, any social project aims to return something good to the society we live in is considered a CSR project. While this is right, this aspect of CSR is only a minor part of the overall CSR activity.
Beyond this activity is the fact that for a company to set up a policy, work plan or strategy, it must take into consideration direct and indirect effects to other stakeholders and the company must not focus at shareholders’ profits alone and only. In short, the Board of Directors must come up with a policy that achieves a right balance of corporate social responsibility to everyone and this policy must function not only during a good time when the business enjoys profits but also when the company confronts the crisis.
At ERAWAN, we believe that CSR is our path to sustainable success. The reason is because CSR is a key factor that makes our organization accepted by all stakeholders and it’s something that makes them want to
Corporate Governance PolicyThe Erawan Group Public Company Limited
SUCCESS WITH INTEGRITY
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Corporate Governance Policy 51
associate with us. For example, to retain good staff, The Erawan Group must start first by making them happy to come to work. Likewise, customers must be satisfied and wish to come back for our service times after time. Suppliers are glad to deal with us due to the way we do our business frankly while our decisions are made on the basis of facts and not the kickbacks or anything along that line. Minor and major shareholders are confident that they will get access to equal and direct information during the good and bad business time. Creditors are confident in the transparency of the information they receive from us as well as The Erawan Group accountability for debt payment, legal compliance as well as accurate tax record and payment. If every organization is able to take a good care of all stakeholders, the society and the economy will benefit as a whole. As such, one can see that social contribution projects are only a small part of the CSR. The organization will not achieve CSR if it continues to take advantage of other stakeholders.
At ERAWAN we have committed to the CSR concept for more than six years. We started first by making sure that there was a right understanding of the issue in our organization. One of our questions was how everyone can naturally incorporate CSR in their daily life without taking so much effort. That’s why we made it one of our four the Erawan mottos considered our DNA. In addition, an important factor of our corporate strategy is to take into consideration the satisfaction of all stakeholders when interacting with us and this very factor became one of the criteria to evaluate our staff during the Balance Score Card process, which results in the overall assessment of everyone’s performance in the organization. Creating awareness and accountability for all stakeholders is a time-consuming process and cannot be forced to happen overnight. Only when everyone in the organization witnesses by his own that something good out of his practice actually happens to the organization, then, he will be confident and feel like pursuing it. Only then that everyone will communicate on the same basis. We are confident and committed to this path as we believe that it’s the right path although the result cannot be felt in the short term. The end result is not merely an accolade or an award but it must really exist and can be felt by everyone in the organization. Those interacting with us can feel it by their heart without any publicity because in the end, all stakeholders who feel good after interacting with us will be the best and most effective publicity vehicle in the whole world to tell the rest who we really are.
Social and environmental projects in 2011
Despite various problems Thailand faced during the past few years which forced us to confront with a series of unexpected crises, we continue to carry out our corporate activities for communities and the society. As the Company sets to spend 0.5 percent of our net profit for corporate contributions, which is not much in monetary term, we intend to maximize our corporate projects, which could be carried out on an ongoing basis and are measurable, to answer most to the needs of relevant communities. We encourage staff, their families and the public to participate in our activities as a good citizen of the society. Most important of all, our social activities are not part of a publicity campaign. In our view, corporate contributions are what we do and expect nothing in return. Giving back to the society within our means is what we want to do despite the crisis. Of all corporate contribution activities, we divide them in four groups as follows.
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52 Corporate Governance Policy
1. Tourism-related activities
1.1 The Welcome Guide to Thailand: The project has taught English to taxi drivers without charge since 2008. So far, we have organized 10 classes and trained 295 taxi drivers. Aimed to enhance English-speaking skills to taxi drivers, the project has been well-received and more classes have been requested. In 2011, three classes were held and one was organized at ibis Bangkok Riverside hotel. For the remaining 2 times, the Company currently collaborates with AOT Public Company Limited, who operates national airports, to hold English classes to taxi drivers of the International Suvarnabhumi Airport. The training was organized at the airport’s fire station.
1.2 Traditional gift to celebrate the Thai New Year: To continue the tradition of the Thai New Year, in 2011, we came up with a corporate gift with meaningful messages distributed to our corporate
customers when we sought their blessings on this auspicious occasion.
2. Community activities
2.1 The Erawan Group for Flood Victims Project: As Thailand suffered the country’s worst flood in its 50-year history, we provided money and necessary items through various channels. Details are as follows.
• Assistance to our staff: we provided temporary shelters without charge for staff whose homes were under water. They were later given money to help renovating their homes and resume their life.
• The public: The Company offered hotel rooms to the public at a special rate during flood until the situation returned to normal. • Cash donation: We donated Baht 500,000 via the Association of Listed Companies’s flood victim assistance project • Cash and Food box donation: The Erawan Group donated 620,000 Baht to “Krob Krua Kao” Channel 3 to assist with flood relief operation. The donation included 200,000 Baht cash and 420,000 Baht worth of 14,000 food boxes. The company daily delivered 500 food boxes to the
news station for 28 days during 3-30 November, 2012 • Survival kit donation: The Company distributed survival kits to the Sakae Temple Community, Ayutthaya Province, through the Support Service Department of the Royal Thai Army; and the Ladkrabang Community through the Ladkrabang District Office. • One-to-One assistance: The Erawan Group offered a tricycle for Ms. Son Daengsa-ard to help her start making a living again. We also financed construction materials for Mr. Sukchai Pansapsan of Wangnoi District, Ayutthaya Province to repair his home. The two were selected by TV Burapha Co., Ltd, who picked them from various flood victim candidates for their unique dedications to other community members although they, too, suffered from the flood. • Participation in the Beautiful Thailand Project: On December 4, 2011, we participated in the Beautiful Thailand project held by the Tourism Authority of Thailand (TAT) at Ayutthaya Province to restore the old capital suffering vast damage from the flood.
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Corporate Governance Policy 53
2.2 The Nice & Neat Surrounding Project: In 2011-2012, together with other businesses in Rachaprasong area and the Pathumwan District Office, we renovated and will continue to renovate a traffic island section from Rachaprasong Road to the Chidlom Intersection. The project, which is designed to keep our neighborhood clean and beautiful, is currently ongoing. 2.3 The Love Charity Project: Set to provide education opportunities for needy children, the project built
a library for the Ban Koh Naka School, the only school on the Naka Yai Island, Phuket Province, in 2011. Children now get access to books and computers from the library.
3. Energy-saving and environmental projects
3.1 The Trash for Egg Project: To promote waste recycling, we have collaborated with Recycle Wongpanich Group Co., Ltd. to buy recycled waste at the Pleonchit Center Building. The waste came from our staff, customers, suppliers and the public frequenting the building who exchanged their trash for eggs. The objective is to reduce the amount of garbage while promoting effective use of resource. So far, the project has been warmly received as the volume of recycled trash has significantly increased that we currently sell approximately one ton of recycled trash a month from once every two months a while ago. We also increase recycled waste drop-off locations inside the building and educate the public how to better separate waste.
3.2 The Erawan Let’s Green Project is to educate staff and tenants of the Ploenchit Center Building how to effectively separate and recycle waste through a training hosted by Dr Somthai Wongcharoen, Chairman of Recycle Wongpanich Group Co., Ltd.
4. The Thai Elephant Conservation Project To prevent the Thai elephants, our symbolic and beloved animal, from extinction, The Erawan Group has
sponsored the project since 2005 through various forms. Between 2010-2011, together with the Return Elephants to the Nature Foundation, we planted trees and built small reservoirs at the Sub Langka Wildlife Sanctuary, Lopburi Province. The activity, which continued for two consecutive years, aimed to create an abundant habitat for elephants. The project was overwhelming participated by our staff, their family members, taxi drivers who attended the Welcome Guide to Thailand Project and other volunteers.
All activities mentioned above were carried out with transparency. They were monitored and measured for possibilities to enhance their efficiency. What staff and participants got from these projects was getting awareness in this subject. While we intended to do our best in these activities, there was room to improve. So far, a unit, which reports directly to the Chief Executive Officer and President, has been set up to monitor and coordinate these projects for everyone’s benefit.
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54 Corporate Governance Policy
Corporate Contributions
We believe that our staff has a public mind and that’s why mobilizing participation from our staff is not difficult. We offer an opportunity for staff to express ideas, propose a project either of their interest or viable under our policy framework, participate in an activity on a voluntary basis and solicit participation from the wider public. The activity should not be limited to our staff but rather open to all stakeholders. Everyone is doing this because we are happy to do it together. While this commitment is beautiful, the very important thing is how to induce all stakeholders to participate in this corporate contribution projects.
Good Corporate Governance can be divided into nine areas as follows:
1. Code of ConductWe have announced a policy to conduct our business based on the principles of good corporate governance.
In 2005, we combined the best practices and the Code of Conduct, which not only were in line with our corporate strategy, but were also practicable, into our Code of Conduct manual. The manual was updated in 2008, which was indeed a significant move based on our motto of “Success with Integrity”. The updated Code of Conduct has been distributed to executive officers and staff for implementation to ensure our success with integrity and also to promote our corporate culture and ethical performances. Our Code of Conduct is now posted in our website at http://www.TheErawan.com, a mechanism to ensure that our executive officers and staff commit to their responsibilities to all stakeholders, communities, the society and the environment.
2. Qualifications, Structure, Duties and Responsibilities of the Board and the ManagementNot only qualifications of our directors are in line with the SET’s requirements but they are also much more
intensive. Director’s term of office is three years each term with clear scopes of work and with power being balanced between non-executive directors. Half of the Board’s entire members are independent non-executive directors. The Board consists of Chairman of the Board, who is an independent Director and different person from the Chief Executive Officer where their roles, authority and responsibilities are clearly separated to maintain balance between managing and supervising the company. In addition, there are five other independent directors, five non-executive directors and two executive directors (Chief Executive Officer and President). The total number is 13.
The Board has appointed four different committees in a move to clearly define duties and responsibilities. The Board also has a policy to promote rotation among directors to sit at different committees for appropriate timeframe and on appropriate occasions. Chairman of a committee has a duty to submit a clear-cut policy of his committee to the Board. Every committee must appoint a secretary, who will coordinate with directors and the Management to ensure that the policy is translated into action. In addition, the secretary must also record minutes of meeting in writing. The committees include the following:
The Audit Committee (AC): The entire Audit Committee consists of independent Directors and at least three members, who must have adequate accounting knowledge to be responsible for auditing the company’s financial statements and its internal control system and to monitor the company’s risk management practices on a regular basis. In addition, the Audit Committee will also review the independence of the company’s Internal Audit Unit; approve appointment, transfer or termination of supervisor who works as its secretary; review legal compliance;
ล้อม
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Corporate Governance Policy 55
select, appoint and propose an auditor and auditor’s fees and review the auditing and disclose information about connected transactions to meet the criteria in an accurate and transparent manner.
The Investment Committee (IC) (Name change from Financial and Risk Management Committee (FRC)):
This Committee consists of no fewer than seven directors and is responsible for supervising and managing policies, plans and investment projects approved by the Board. The Committee also ensures that the firm has a systematic, distinct and effective risk management system.
The Nominating and Corporate Governance Committee (NCG): This Committee consists of no fewer than four members. Its chairman shall be an independent non-executive director while the remaining two members are non-executive directors. The Committee is responsible for reviewing the structure of the Board, setting qualifications of a particular position, reviewing and recruiting experts to become our directors as well as assessing the Board’s performances and other committees appointed by the Board. The Nominating and Corporate Governance Committee also sees that directors, executive officers and staff of all levels comply with the Good Corporate Governance practices and Code of Conduct.
The Management Development and Compensation Committee (MDC): The Committee, consisting of no fewer than four non-executive directors, is responsible for proposing development policies, assessing knowledge and skills of and compensations to new President and Chief Executive Officer, writing a senior management succession plan and reviewing the company’s HR development policy.
The Board also appoints the company’s Secretary to perform duties as stipulated by the Securities and Exchange Act, No. 4, B.E. 2551 and/or other relevant legislations. The Secretary also monitors and coordinates with the Board, the Management and related internal and external parties.
3. Qualification of Directors
Principles: The Board of Directors should consist of members with a variety of knowledge and experiences, whether it
is in finance, economy, management, business administration, marketing and service, tourism and law. The idea is to ensure that together, they can formulate a right policy for the development of hotel and resort business while having specialized skills, ability to see things in a big picture and enough independence to audit the Management in a balancing manner. The Board of Directors has two significant roles; namely, supporting the Management on the basis of the Good Corporate Governance and formulate a strategy to achieve our business goals.
General Qualifications:1. Director should possess a variety of knowledge and experiences while being a professional with an
ethical mind. 2. Director should fully understand his obligations and practices with a commitment to create long-term
values to the business and shareholders. 3. Director should have enough time to perform his duties effectively.4. Director should be able to assess himself and is ready to notify the Board of Directors upon change or
if there is anything that prevents him from performing his job effectively.
First line
56 Corporate Governance Policy
Director’s Term of Office and Retirement Criteria
1. Director shall be in office three years each term. The Board may nominate a director for shareholders to re-elect him/her after his term ends by reviewing his performances on an annual basis. The term of a committee’s member is also three years each term.
2. Director shall retire when he/she is fully 75 years old effective from the day following the Annual General Meeting of Shareholders. The calculation will start after the day the director is fully 75 years old.
Specific Qualifications:Chairman of the Board of Directors: aside from the duties mentioned above, Chairman will have extra
duties; namely, (1) acting as chairman of the Board of Directors’ meeting; (2) exercising a casting vote in case of tie at the Board of Directors’ meeting; (3) calling for the meeting of the Board of Directors; and (4) acting as chairman of the Shareholders’ Meeting. As a result, qualifications of the Chairman will be slightly different from those of other directors as follows:
• Chairman must be Non-Executive Director (NED). • Chairman must not be involved in a day-to-day management, be an auditor, or others such as a legal
consultant; nor shall he be employee, staff, advisor receiving monthly salary or a person with controlling power of the company, affiliated company, associated company, auditing company, or be a person who may have conflict of interest without having to have interest or stakes in such manner.
Executive Director • Director who is also Chief Executive Officer (CEO) is advised not to become director in more than three
other listed companies.
Independent Director• Independent Director shall hold less than 1 percent of the total shares with voting rights in a company,
its affiliated company, associated company or any other person with possible conflicts of interest (including shares held by related persons).• Independent Director must not be involved in the management and is currently not being and has never
been employee, staff, advisor enjoying monthly income or person with controlling power of the company, its affiliated company, associated company and auditing company; nor shall he be a person with conflict of interest without having to have any interest or stake in such manner for no less than two years.
• An Independent Director shall have neither blood nor registered relationship as a father, mother, spouse, sibling and children including spouse of children of executive officers, major shareholders, persons with controlling authority or anyone to be nominated as an executive officer or a person with controlling power of the company or its subsidiary.
• An Independent Director shall have no business relationship with the company during the previous two years. Details are as follows:
- No relationship as a provider of professional service including being an auditor (in any case), or of other professions such as being a legal consultant, a financial advisor or an asset appraiser with an
annual transaction value exceeding Baht 2 million. - A business and trade relationship including normal transactions, renting or leasing of property, transactions relating to assets and services and giving or getting financial assistance with a transaction value from Baht 20 million or 3 percent of the Company’s NTA, whichever is lower. This however shall include values of all retroactive transactions during at least the six previous months prior to the latest transaction.
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Corporate Governance Policy 57
• AnIndependentDirectorshallpossessnoothercharacteristicthatpreventshim/herfromexpressinghisopinionindependently.
• IndependentDirectormustattendatleastoneofthefollowingcoursesheldbytheThaiInstituteofDirectors(IOD);namely,DirectorsCertificationProgram(DCP)orDirectorsAccreditationProgram(DAP)orAuditCommitteeProgram(ACP)
Member of the Audit Committee• He/sheshallbeanIndependentDirectorappointedbytheBoardorShareholders.• He/sheshallnotbeadirectorentrustedbytheBoardtomakeanydecisionwithregardtoabusinessofthecompany,itsparentcompany,subsidiary,affiliate,subsidiaryofthesamelevelorotherentitiesthatmayhaveaconflictof interest.
• HisdutiesmustnotbefewerthanwhatisstipulatedbytheSET.
Transactions with Possible Effects to Independence
• BeingauthorizedtoapprovetransactionsorsigningtobindtheCompany,toexemptcollectivedecision.• Attendingameetingorvotinginamatterhehasaninterestoraconflictof interesttherein.
Prohibited Characteristics Directors and executive officersmust possess noqualifications that are conflictingwith the company’s
requirements and announcementsmadeby theSECand theSET.Additional information canbe read in thecompany’swebsite.
4. Rules and Responsibility of the Board of Directors and the ManagementTheBoardofDirectorsdeterminespoliciesandpracticesforthemanagement,whichincludeimportanttasks
ofanexecutive.Inaddition,theBoardalsoallowsthemanagementtoformulateamanagementpolicybasedontheCompany’sobjectivesandmissions,whichwillbesubjecttotheBoard’sapproval.
TheBoardofDirectorsalsosetstohaveitsIndependentDirectorsmeetingeveryyearsothatalldirectorsmeetthemanagement.
5. Board of Directors’ MeetingThecompanysetsthenumberoftheBoard’smeetingsandthemeetingsofitscommitteesbyscheduling
themand lettingdirectorsand relevantpartiesknowabout them inadvance throughout theyear. Independentdirectors’meetingwas held on November 29, 2011 prior to the Board of Directors’ Meeting No. 7/2554to allow them to freelyexchange their viewpoints. In addition, theBoardconvened itsNo.8/2554meetingonDecember20,2011without the presence of Chief ExecutiveOfficer, whowas the highestmanagementofficer, todiscussoperationperformancesandannualbudget.
In2011,theCompanyorganized8BoardofDirectors’meeting,4AuditCommittee’smeetings,6FinancialandRiskManagementCommittee’smeetings(namechangedtotheInvestmentCommittee),2NominatingandCorporateGovernanceCommittee’smeetingsand2ManagementDevelopmentandCompensationCommittee’smeetings.Minutes ofmeetingwere recorded inwriting at each and everymeeting and kept at theOffice of Secretary and on a data server so that officers can conveniently access the database.Details ofmeeting
attendanceofdirectorsareinthefollowingtable:
58 Corporate Governance Policy
Nam
eTi
tleTe
rm
Tim
es o
f at
tend
ance
/Num
ber
of T
otal
atte
ndan
ce
Boar
d of
D
irect
ors
Audi
t C
omm
ittee
Inve
stm
ent
Com
mitt
ee(F
inan
cial
and
Risk
M
anag
emen
t Co
mm
ittee
)
Nom
inat
ing
and
Corp
orat
e G
over
nanc
e C
omm
ittee
Man
agem
ent
Dev
elop
men
t an
d Co
mpe
nsat
ion
Com
mitt
ee
1. M
r. Pr
akit
Prad
ipas
enC
hairm
anAp
r. 20
09 –
201
2*7/
8-
-2/
2-
2. M
r. Sa
nser
n W
ongc
ha-u
mIn
depe
nden
t dire
ctor
Apr.
2009
– 2
012*
7/8
4/4
--
-
3. A
ssoc
. Pro
f. M
anop
Bon
gsad
adt
Inde
pend
ent d
irect
orAp
r. 20
09 –
201
2*8/
84/
4-
--
4. M
r. D
ej B
ulsu
kIn
depe
nden
t dire
ctor
Apr.
2009
– 2
012*
7/8
3/4
--
-
5. M
r. Ba
nyon
g Bo
ngpa
nich
Inde
pend
ent d
irect
orAp
r. 20
10 –
201
36/
8-
4/6
-2/
2
6. M
r. Ek
asith
Jot
ikas
thira
Inde
pend
ent d
irect
orAp
r. 20
11 –
201
46/
8-
--
1/1
7. M
r. Vi
toon
Von
gkus
olki
tD
irect
orAp
r. 20
11 –
201
48/
8-
6/6
-2/
2
8. M
r. Su
pol W
atta
nave
kin
Dire
ctor
Apr.
2010
– 2
013
8/8
-5/
6-
2/2
9. M
r. C
hani
n Vo
ngku
solk
itD
irect
orAp
r. 20
10 –
201
36/
8-
5/6
2/2
-
10. M
rs. P
anid
a Th
epka
njan
aD
irect
orAp
r. 20
11 –
201
48/
8-
5/6
2/2
-
11. M
r. Kr
isda
Mon
thie
nvic
hien
chai
**D
irect
orAp
r. 20
10 –
201
36/
7-
--
-
12. M
r. G
avin
Von
gkus
olki
t**D
irect
orD
ec. 2
011
– 20
131/
1-
--
-
13. M
r. Ka
sam
a Pu
nyag
upta
Chi
ef E
xecu
tive
Offic
erAp
r. 20
11 –
201
47/
8-
6/6
--
14. M
rs. K
amon
wan
Wip
ulak
orn
Pres
iden
tAp
r. 20
11 –
201
45/
5-
--
-
perc
ent o
f dire
ctor
s’ a
ttend
ed90
%92
%86
%10
0%10
0%
Rem
afk
*
To
pro
pose
the
Annu
al G
ener
al M
eetin
g of
Sha
reho
lder
s on
Tue
sday
24th
Apr
il 20
12, t
o re
appo
int 4
dire
ctor
s w
ho re
tire
by ro
tatio
n to
suc
ceed
for a
noth
er te
rm.
** O
n 29
th N
ovem
ber 2
011,
Mr.
Kris
da M
onth
ienv
ichi
ench
ai a
n au
thor
ized
dire
ctor
resi
gned
from
the
dire
ctor
of t
he B
oard
and
the
Boar
d ap
poin
ted
Mr.
Gav
in V
ongk
usol
kit a
s th
e ne
w
d
irect
or e
ffect
ive
on 1
st D
ecem
ber 2
011.
Tim
es o
f A
tten
danc
e 20
11
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First line
Corporate Governance Policy 59
BOD Structure& Component
82%
Rule duties & Responsibility
BOD’s Meeting DirectorFiduciary Duty
Relations withExecutive
Management
Directors’improvement &ManagementDevelopment
84% 84% 82% 81%79%
6. Evaluation of the Board’s PerformancesWe evaluate performances of our Board annually. Twelve directors conduct a self-evaluation and an evaluation
of the entire board independently before sending evaluation results to the Nominating and Corporate Governance Committee for further assessment. Evaluation results are used to improve and develop directors and work processes according to the guidelines recommended by the SET and Institute of Thai Directors.
Based on such evaluation, 82 percent of assessors agreed that the structure and components of directors were appropriate and that there were enough independent directors to achieve a balanced power. 84 percent agreed that the Board understood its independence in making decisions without being influenced by anyone. Meanwhile, 84 percent agreed that matters regarding the number of meetings, acknowledgement when the meeting would be held and the getting of documents in advance was getting much better than before. 82 percent agreed that every director shall bear the fiduciary duties of overseeing the management of the company that it operates in the best interests of the shareholders, for whom the director is responsible. 81 percent agreed that there was a good relationship with the Management Team and directors could directly discuss with the President and Chief Executive Officer. 79 percent agreed about better self-development among directors, better understanding about business and their duties and responsibilities. Details are in the following:
First line
60 Corporate Governance Policy
7. Nomination of Directors and Executives
The Board entrusts the Nominating and Corporate Governance Committee to draft a clear nomination policy and process for directors. This refers to a process to initially check a nominee’s qualifications to ensure that his are in compliance with director’s qualifications; a selection and courting process of a nominee to be our director; a nomination process to the Board or shareholders and a reviewing process of director being re-nominated. An individual evaluation of a director’s performances while in the office will be used to support the consideration.
Furthermore, the selection was independently conducted without being subject to anyone’s influence. The President and Chief Executive Officer conducted a two-hour orientation session and arranged for a management team to meet the new director so that he learned about the company, got access to corporate information and strategic plans.
The Board designated the Management Development and Compensation Committee to recruit and formulate a succession plan of executives; namely, President and Chief Executive Officer, to ensure continued performances and to avoid business disruption.
8. Remunerations of the Board of Directors and Management
The Board entrusts several committees to formulate a compensation plan for directors, executives and staff as follows:
The Nominating and Corporate Governance Committee has a duty to formulate a compensation policy of directors where it is to review the soundness of compensations being paid on an annual basis on the basis of directors’ scopes of duties as well as their roles and responsibilities and the Company’s financial status and operation results vis-à-vis others in a similar business enjoying the same amount of revenues. Compensations will be paid in two types: meeting allowances (retainer fees or attendance fees) and bonuses. Director entrusted as a committee’s member shall receive additional compensations based on his additional responsibilities and this will be submitted to the Annual General Meeting of Shareholders for approval on an annual basis.
The Management Development and Compensation Committee evaluates performances of President and Chief Executive Officer based on four aspects; namely, finance, customer satisfaction, internal process and HR and corporate development, as part of a review of his compensation and annual compensation. Together with President and Chief Executive Officer, the Committee formulates a policy to pay executives and Staffs based on the nature of their work.
The President and Chief Executive Officer reviews annual compensations of executives based on a formulated policy through two evaluation processes; namely, (1) Balance Score Card (BSC) evaluation, which reviews strategic significances of each department vis-à-vis corporate strategy through a linkage that will eventually trigger corporate-level strategies to lower levels; namely, from corporate strategy, to departmental and section strategies;
SUCCESS WITH INTEGRITY
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Corporate Governance Policy 61
and (2) Competency Skill Behavior (CSB) evaluation, where behaviors that support corporate culture will be evaluated. Supervisors will evaluate each individual. Some of the evaluation will be based upon the company’s policies; others upon something else, depending on criteria set by department supervisors. To ensure effective evaluation and to access information from co-workers of various levels, the assessment is conducted from every direction. In this regard, supervisors will evaluate their supervisees and vice versa. In addition, staff of all levels is encouraged to conduct a self-evaluation. Results of both BSC and CSB evaluations are used to allocate the company’s overall returns to departments, sections and units.
Remunerations in cash for the year ending 31st December 2011 totaled Baht 36,547,295.45:1. Remunerations of directors of the Company’s Board of Directors and Committees totaled Baht 4,461,250.00 2. Remunerations of directors of the Company’s subsidiary totaled Baht 1,575,000.00 3. Remunerations, which were total wages of the nine (9) executives paid by the Company and its subsidiaries,
totaled Baht 29,490,519.53 4. Provident fund of the executives under item 3 above totaled Baht 1,020,525.92
Remunerations of the Board of Directors and the Committees
First line
62
Rem
ark:
* O
n 29
th N
ovem
ber 2
011,
Mr.
Kris
da M
onth
ienv
ichi
ench
ai a
n au
thor
ized
dire
ctor
resi
gned
from
the
dire
ctor
of t
he B
oard
and
the
Boar
d ap
poin
ted
Mr.
Gav
in V
ongk
usol
kit
as th
e ne
w d
irect
or e
ffect
ive
on 1
st D
ecem
ber 2
011.
Rem
uner
atio
ns in
cas
h fo
r th
e ye
ar e
ndin
g 31
st D
ecem
ber
2011
Nam
eTi
tle
Com
pens
atio
n in
cas
h fo
r m
embe
r of
the
Com
mitt
ee
Tota
l
(Bah
t/yea
r)Bo
ard
of
Dire
ctor
sAu
dit
Com
mitt
ee
Inve
stm
ent
Com
mitt
ee(F
inan
cial
and
Risk
M
anag
emen
t Co
mm
ittee
)
Nom
inat
ing
and
Cor
pora
te
Gov
erna
nce
Com
mitt
ee
Man
agem
ent
Dev
elop
men
t and
C
ompe
nsat
ion
Com
mitt
ee
1.
Mr.
Prak
it Pr
adip
asen
Cha
irman
300,
000
--
30
,000
-
330,
000
2.
Mr.
Sans
ern
Won
gcha
-um
Inde
pend
ent d
irect
or24
0,00
0
100,
000
--
-
340,
000
3.
Asso
c. P
rof.
Man
op B
ongs
adad
tIn
depe
nden
t dire
ctor
240,
000
80
,000
--
-
320,
000
4.
Mr.
Dej
Bul
suk
Inde
pend
ent d
irect
or24
0,00
0
60,0
00-
--
30
0,00
0
5.
Mr.
Bany
ong
Pong
pani
chIn
depe
nden
t dire
ctor
240,
000
-
180,
000
-
22,5
00
442,
500
6.
Mr.
Ekas
ith J
otik
asth
iraIn
depe
nden
t dire
ctor
240,
000
--
-
11,2
50
251,
250
7.
Mr.
Vito
on V
ongk
usol
kit
Dire
ctor
240,
000
-
240,
000
-
22,5
00
502,
500
8.
Mr.
Supo
l Wat
tana
veki
nD
irect
or24
0,00
0-
18
0,00
0-
30
,000
45
0,00
0
9.
Mr.
Cha
nin
Vong
kuso
lkit
Dire
ctor
240,
000
-
180,
000
22
,500
-
442,
500
10. M
rs. P
anid
a Th
epka
njan
aD
irect
or24
0,00
0-
18
0,00
0
22,5
00-
44
2,50
0
11.
Mr.
Krisd
a M
onth
ienv
ichi
ench
ai*
Dire
ctor
220,
000
--
--
22
0,00
0
12. M
r. G
avin
Von
gkus
olki
t*D
irect
or 2
0,00
0-
--
-
20,0
00
13. M
r. Ka
sam
a Pu
nyag
upta
Chi
ef E
xecu
tive
Offic
er24
0,00
0-
Do
not g
et p
aid
as E
xecu
tive
--
24
0,00
0
14. M
rs. K
amon
wan
Wip
ulak
orn
Pres
iden
t16
0,00
0-
Do
not g
et p
aid
as E
xecu
tive
--
16
0,00
0
Tota
l3,
100,
000
24
0,00
0
960,
000
75
,000
86
,250
4,
461,
250
Remunerations for the Board of Directors and the committees in the year ending 31st December 2011The Erawan Group Public Company Limited
Corporate Social Responsibility
SUCCESS WITH INTEGRITY
63
Corporate Social Responsibility (CSR)The Erawan Group Public Company Limited
9. Corporate Social Responsibility (CSR)Corporate Social Responsibility, shortly called CSR, is one of the Erawan Plc.’s major business strategies.
We truly believe that CSR will guide our business while let us be accountable to shareholders, staff, suppliers, creditors, the society, the environment and neighboring communities where our properties are located. To ensure that everyone here understands the same thing, we have determined CSR guidelines and principles for those involved as follows.
Duties and Responsibilities of the Board to ShareholderThe Board of Directors takes into consideration shareholders’ rights without limiting only to their fundamental
rights as stipulated by laws. This refers to their rights to trade or transfer shares, to share the company’s profits, to adequately receive the company’s information, to attend meetings to vote at shareholders’ meeting in order to either appoint or remove directors and to appoint auditors and discuss important matters affecting the company. In this regards, important matters can range from allocating dividends to formulating or amending rules and regulations and the Memorandum of Association, increasing or reducing capital and approving special transactions. The Board of Directors also supervises to ensure that meeting’s time, date, place and meeting agendas are given to shareholders; that relevant documents and information required for making decisions at a meeting are available to shareholders, that shareholders are notified of applicable rules at the meeting, that voting procedures are not too complicated and that a meeting location is convenient and not expensive for shareholders to attend the meeting.
The Board of Directors has allowed shareholders to propose agendas of the Annual General Meeting of Shareholders in advance prior to the meeting date. Clear rules and regulations in doing so have been posted in the company’s website to facilitate shareholders. Shareholders may submit a document to propose potential meeting agendas by January 31 of every year. The Board encourages shareholders to use Proxy Form B so that shareholders can determine a voting direction as there are names and information of six Independent Directors who can be alternative proxy for shareholders. In addition, the information must be posted in the Company’s website at least 30 days prior to the meeting. Documents must also be sent to shareholders in advance enough for them to study prior to the meeting.
During the Meeting, the Company treats every procedure equally. No agendas are shortened, deleted or alternated. This is especially the case of an agenda to appoint directors where shareholders are entitled to vote for directors individually upon enough information. All ballots featuring yes, no and abstention votes are duly kept as evidence.
At every the shareholders’ meeting, Chairman of the Board, Chairman of the Committees, Directors, Chief Executive Officer, President and Chief Financial Officer (CFO) attend the meeting to allow shareholders to express their views and ask questions about relevant matters to the meeting. During the past 5 years (2007-2011), the entire Board attended the meeting to allow shareholders to ask questions in an adequate fashion, which however did not delay the meeting. In addition, Q&A sessions, resolutions adopted at the meeting and votes received at each agenda were properly recorded in writing in the Company’s minutes of meeting and posted at the Company’s website within 14 days from the shareholders’ meeting date.
Aside from the Board’s responsibilities to shareholders as mentioned above, the Board also formulates a Corporate Social Responsibility policy, which includes responsibilities to shareholders as follows.
Corporate Social Responsibility
First line
64
Responsibilities to Shareholders
1. To manage the Company in a way that will turn it into a quality corporation committed to integrity while creating sustainable strength and growth for shareholders in the long run.
2. To perform our job with thorough care and competency as a business may do under the same situation.
3. To perform our duty with integrity and to fairly treat both major and minor shareholders for the benefit of
all relevant parties.
4. To manage the Company’s properties in a manner that avoids their depreciation.5. To report the Company’s status and operation results regularly, accurately and completely based on
existing facts.6. To prevent the Company’s confidential information from being improperly disclosed to the third party.7. To avoid doing anything that may lead to a conflict of interest against the Company without any advanced
notice.8. To respect the rights and to equally treat all shareholders, whether they are executive or non-executive
shareholders, and foreign shareholders.
Responsibility to Investor RelationsThe Erawan Group Plc. sets up the Investor Relations (IR) Department as a center to provide complete company
information to retail and institutional investors, shareholders, analysts and the public sector. Contacts can be made directly at the Company’s office or visit us at www.TheErawan.com. Inquiries can also be made through [email protected].
We conduct an Investor Relations IR Survey to gauge satisfaction in relation to our information disclosure at least once a year. In 2011, we conducted the survey by distributing questionnaires to analysts at the Quarterly Meeting held in November 2011, and also the last meeting of the year. All respondents were within a target group. More than 50 percent of the respondents had monitored our information for no less than 3 years. 85.11 percent of the respondents said they were satisfied with the information.
Responsibility of the right to access information of stakeholders We give all stakeholders an access to information. We also determine guidelines and practices for our
executive officers and staff to encourage their fair and equal interactions with all stakeholders. We also allow stakeholders to directly contact the Board, the Audit Committee and the Nominating and Corporate Governance Committee for their valuable suggestions that will not only benefit but also add more values to our management at our office, No. 2, Ploenchit Center Building, 6th Floor, Sukhumvit Road, Klongtoey District, Bangkok; or at the Office of Corporate Governance, email: [email protected]. All information is treated confidential and will be
directly forwarded to the Board.
Corporate Social Responsibility
SUCCESS WITH INTEGRITY
65
Responsibilities to Employees1. To determine an appropriate structure of remunerations in line with market rates, staff’s competency and
responsibilities and their work performances through three levels of strategic assessments; namely, corporate strategy, department strategy and division strategy. The Competency Skill Behavior Assessment
will be carried out in a 360-degree manner where supervisor will assess supervisees and vice versa and where everyone will have a self-evaluation at all levels.
2. To provide appropriate welfare and other benefits such as accident insurance to staff and executives working out of the office, health insurance and allowances for healthcare services as an out-patient, annual
health check-up and coffee & tea corner for staff. 3. To ensure staff’s Understanding about their professional roles and responsibilities as well as their career goals, to provide an opportunity for staff to grow professionally and to acknowledge and recognize
staff’s work.4. Award and punishment will be conducted based on the concept of right and wrong and with integrity.5. To ensure workplace safety, health and sanitation.6. To have a clear and efficient working system that allows staff to exercise their knowledge and competency
while supporting their knowledge enhancement and recognizing their participation role.7. To promote the Code of Conduct to staff to help them duly understand and fully comply with the Code.8. To comply with all the rules and regulations relating to labor laws and staff welfare.9. To avoid action considered unfair and illegitimate that may affect staff’s advancement and job security
while respecting an individual’s rights.
Responsibilities to Customers1. To set up a pricing policy considered fair and appropriate.2. To treat all business deals equally without treating anyone more favorably where every deal is considered
conducted on an arm’s length basis.3. To procure and improve the procurement process considered appropriate and meeting business conditions.4. To execute a fair contract with customers. (without depriving a customer of his benefits)5. To disclose related and beneficial information accurately, completely and in time without any distortion.6. To keep customer’s confidential information secret as if it is the Company’s own information and not using it for the Company’s own benefit.7. Not demanding, receiving from or not giving any illicit profit to customers.
Corporate Social Responsibility
First line
66
Responsibilities to Suppliers and Creditors1. To offer a fair competition environment where the procurement and hiring process of goods and services
is carried out properly, transparently and efficiently. This will include finalizing price negotiations, making quotations, bidding methods, special methods and procurement methods for government agencies and state enterprises. Questionnaire will be regularly issued to ask for opinions about the Company’s bid participation in order to regularly improve its procurement and hiring process of goods and services.
2. Avoid specify a particular product or choosing a particular product intentionally unless otherwise there is an enough reason to do so. In case of change of products or specifications of the product, suppliers must be informed. If necessary, a new price quotation must be submitted. An original supplier must be given an opportunity to equally offer his quotation.
3. Choose a quality supplier who is really interested in doing the job. Avoid inviting suppliers just to have enough participating suppliers as stated in a regulation. All bidders are to receive the same written
details, information and conditions. If notified verbally, they shall receive a written confirmation later.4. Executives or staff involving in the procurement or hiring process must disclose information and/or their
personal relationship as well as that of their spouses or closed relatives or a personal relationship with a particular bidder that may directly result in an opaqueness of their job. They shall also exercise their responsibility by not attending a decision-making process when a particular supplier is chosen.
5. Not demanding and receiving gifts, favors or treats unless otherwise on appropriate occasions; refrain from having a special relationship with suppliers so much so that others may believe it may lead to an unfair treatment especially if it makes other suppliers misunderstand, refuse to participate in quoting prices or spread ill words that damages the Company’s reputation.
6. To prepare a fair contract and to comply with an agreement executed with suppliers and creditors. In case the Company is unable to comply with its contract, negotiate with suppliers/creditors without
delay to find a solution and to prevent further damage.7. To refrain from doing anything that will prevent suppliers from paying tax to the state.8. To disclose related and beneficial information accurately, completely and in time without distortion.
Responsibilities to Social and EnvironmentThe Erawan Group formulates a clear-cut policy for social, community and environmental causes. It plans to
implement “The Erawan Group for the Society and the Environment” project, to which the Board has already approved to allocate 0.5 percent of its annual net profit as a social contribution. Of the entire budget, 50 percent will be spent for the benefits of communities closed to the Company’s properties whereas the other 50 percent will be spent for the benefit of the society in general.
Responsibilities to Suppliers and CreditorsResponsibilities to Suppliers and Creditors1.1. To offer a fair competition environment where the procurement and hiring process of goods and services To offer a fair competition environment where the procurement and hiring process of goods and services
SUCCESS WITH INTEGRITY
First line
Internal Control 67
Internal ControlThe Erawan Group Public Company Limited
In 2011, the Board of Directors convened eight times at which the Audit Committee attended every time to give opinions about an adequacy and soundness of the internal control system. The Audit Committee summarized and reported internal audit activities to the Board of Directors on February 28, 2012 and the Board of Directors expressed the same opinions as the Audit Committee in this matter, which can be summarized as follows:
1. Internal Control System and Internal Auditing The Audit Committee has direct responsibilities to supervise the company’s internal control system in every
aspect, whether it is finance and accounting, legal compliance and compliance to relevant rules and regulations. The Audit Committee formulates auditing mechanisms to ensure effective balance of power. There is also the Internal Audit Department to audit performances of all departments based on a risk-based auditing plan and to offer advice on how to set up a good internal control system.
The Audit Committee has duties to review auditing plans; to control and supervise the Internal Auditing Department’s independence; to approve appointment, transfer and termination of the Internal Auditing Department’s supervisor and to ensure that the Internal Auditing Department remains independent. The Committee must also make sure that the Department can perform its auditing functions and balance the existing power according to the prevailing standards. The Department is to directly report its auditing work to the Audit Committee at least once each quarter to ensure that the company’s internal control and internal auditing work is conducted in a thorough manner and will not damage shareholders.
2. Protection of InformationOne of our priorities is focused at the use of our internal information and the prevention of our directors
and executives from using internal information for their benefit or the so-called abusing self-dealing. This applies specifically to internal information not yet disclosed to the public or information that may affect our corporate strategy, business, trade negotiations and share prices, which, if abused, not only means that our shareholders are taken advantage of but it can damage shareholders in general. That’s why we have set our Executives Ethic Standards as a practice with heavy penalties in case of violations or intended violation of the 10 practices stated in the Code of Conduct under the topic of “Executives Ethical Standards”
We also allow different levels of staff to get access to different types of internal information based mainly on their responsibilities and duties. Disciplinary actions are stated in our Work Regulations under the topic of “Disciplinary Actions and Penalties.” For example, Clause 3.2 Re: Disciplines with regard to confidentiality and corporate profits prohibits employees to “seek inappropriate benefit from the company or others relating to the company. Employees are prohibited to conduct personal business or to work for others in an identical or similar business as the company’s although the work may be performed outside the company’s office hours”. With regard to disciplinary actions and punishment, the company will normally appoint a disciplinary action committee to conduct an investigation and to ensure fairness to accused staff.
In In 2011, the Board of Directors convened eight times at which the Audit Committee attended every time to 2011, the Board of Directors convened eight times at which the Audit Committee attended every time to give opinions about an adequacy and soundness of the internal control system. The Audit Committee summarized give opinions about an adequacy and soundness of the internal control system. The Audit Committee summarized and reported internal audit activities to the Board of Directors on February 28, 2012 and the Board of Directors and reported internal audit activities to the Board of Directors on February 28, 2012 and the Board of Directors
First line
68 Internal Control
3. Conf lictflof interestThe Erawan Group requires an approval from either the Audit Committee or the Board, as the case may be,
when conducting a transaction that may cause a possible conflict of interest. In addition, details of transactions with possible conflict of interest during the past year and their values are disclosed while explanations and reasons for the transactions are clearly stated in the Annual Report. The Erawan Group requires its executive directors involving in the transaction to disclose the information and/or types of relationship not only of his own, but also of his spouse, closed relatives as well as personal relationship with any bidder for transparency purpose to the Office of the Corporate Governance. In addition, director shall abstain from voting and/or not be part of the decision-making process.
Connected transactions are shown in the Notes to Financial Statements and connected transactions table. All transactions were reasonable and were considered normal transactions. They were conducted for the company’s ultimate benefit. Connected transaction had already been reviewed by the Audit Committee and/or the Board on an arm’s length basis that they were in compliance with our requirements and rules and regulations of the SEC and the SET and that they were not against accounting standards Re: Disclosure of information in relation to connected persons or transactions.
In 2011 The Erawan Group has the other connected transaction in addition to the items mentioned above
as follows. All transactions were reasonable and were normal transactions.
• Mitr Phol Sugar Group of Companies
Revenue from Hotel Operation Baht 4,535,370.63
Receivables at end of period Baht 1,003,442.02
• Banpu Plc. Group of Companies
Revenue from Hotel Operation Baht 4,005,337.84
Receivables at end of period Baht 332,859.00
• Pacific World (Thailand) Ltd.
Revenue from Hotel Operation Baht 4,305,437.52
Receivables at end of period Baht 651,500.00
Connected Transactions
SUCCESS WITH INTEGRITY
69
Connected transactionsThe Erawan Group Public Company Limited
Con
nect
ed tr
ansa
ctio
ns b
etw
een
busi
ness
es w
ith th
e fo
llow
ing
rela
tions
hips
wer
e ex
ecut
ed;
1. C
hai T
alay
Hot
el C
o., L
td.
(H
yatt
Rege
ncy
Hua
Hin
Hot
el)
Ty
pe o
f bus
ines
s: h
otel
s
Nat
ure
of re
latio
nshi
p:
• M
rs. P
anid
a Th
epka
njan
a, d
irect
or, i
s a
clos
ed re
lativ
e to
Mrs
. Wan
sam
orn
W
anna
met
hee
and
Khun
ying
Nat
thik
a
Wat
tana
veki
n, a
re a
utho
rized
dire
ctor
of
Cha
i Tal
ay C
o., L
td.
• W
atta
nave
kin
Gro
up h
olds
31
perc
ent o
f th
e C
ompa
ny’s
sha
res.
2. M
itr P
hol S
ugar
Gro
up o
f Com
pani
es
Type
of b
usin
ess:
sug
ar fa
ctor
ies
N
atur
e of
rela
tions
hip:
•
Mr.
Vito
on V
ongk
usol
kit a
nd M
r. C
hani
n Vo
ngku
solk
it, th
e C
ompa
ny’s
dire
ctor
s,
ar
e au
thor
ized
dire
ctor
and
dire
ctor
of
M
itr P
hol S
ugar
Co.
, Ltd
. •
Vong
kuso
lkit
Gro
up h
olds
39
perc
ent i
n th
e C
ompa
ny’s
sha
res.
3. B
ualu
ang
Secu
ritie
s Pu
blic
Com
pany
Lim
ited
Ty
pe o
f bus
ines
s: O
ther
finan
cial
inte
rmed
iatio
n
Nat
ure
of re
latio
nshi
p:•
Mr.
Sans
ern
Won
gcha
-um
, Ind
epen
tden
t di
rect
or, i
s C
hairm
an o
f the
Boa
rd o
f
Bual
uang
Sec
uriti
es P
ublic
Com
pany
Li
mite
d
Agre
emen
t to
leas
e of
fice
spac
e an
d th
e se
rvic
e ag
reem
ent w
ith
The
Eraw
an H
otel
Pub
lic C
ompa
ny
Lim
ited
• Re
ntal
and
ser
vices
inco
me
• Re
ceiva
bles
at e
nd o
f per
iod
Agre
emen
t to
rent
Plo
ench
it Ce
nter
’s sp
ace,
3-y
ear l
ease
ag
reem
ent.
• Re
ntal
and
ser
vices
inco
me
• Re
ceiva
bles
at e
nd o
f per
iod
• Pa
yabl
es o
f ren
t dep
osits
Agre
emen
t to
rent
Plo
ench
it Ce
nter
’s sp
ace,
3-y
ear l
ease
agr
eem
ent.
• Re
ntal
and
ser
vices
inco
me
• Re
ceiva
bles
at e
nd o
f per
iod
• Pa
yabl
es o
f ren
t dep
osits
Pric
e ag
reed
was
a m
arke
t pric
e co
mpa
red
to s
pace
in n
earb
y ar
eas
and
not l
ower
than
the
pric
e of
fere
d to
ot
her t
enan
ts o
r ser
vice
use
rs b
ased
on
the
busi
ness
sta
ndar
ds.
A m
ajor
tena
nt, t
he a
gree
d pr
ice
was
not
low
er th
an th
e av
erag
e pr
ice
agre
ed w
ith o
ther
tena
nts
base
d on
th
e bu
sine
ss s
tand
ards
.
Pric
e ag
reed
was
a m
arke
t pric
e co
mpa
red
to s
pace
in n
earb
y ar
eas
and
not l
ower
than
the
pric
e of
fere
d to
oth
er te
nant
s ba
se o
f the
bus
ines
s st
anda
rd.
2,46
8,88
4.44
243,
106.
48
45,1
31,8
80.5
41,
209,
192.
219,
037,
920.
83
2,15
3,75
7.60
19,3
50.9
549
7,17
4.40
4,30
1,90
2.18
44
8,94
0.39
11,7
21,4
76.3
9 -0-
-0-
547,
226.
90 -0-
-0-
Des
crip
tion
Pers
on/e
ntity
with
pos
sibl
e co
nflic
t of
inte
rest
and
nat
ure
of re
latio
nshi
pTr
ansa
ctio
n va
lue
(Bah
t)
20
10
2011
Pric
ing
polic
y an
d th
e Au
dit C
omm
ittee
’s o
pini
ons
Connected Transactions
First line
70
Necessity and Soundness of Connected TransactionsIn case the Company signs an agreement or conducts a connected transaction with a subsidiary company,
affiliate, related company and/or the third party, The Erawan Group will consider the necessity and soundness of such contract based mainly on The Erawan Group interests.
Approval Measures or Procedures of Connected TransactionsIf the Company is to execute a contract or if there is any connected transaction between itself and its
subsidiary, affiliate, related company, the third party and/or anyone with possible conflicts of interest, the Board of Directors requires The Erawan Group for the purpose of its benefits, to comply with the rules stated in the Stock Exchange of Thailand’s (SET) Announcement Re: Information disclosure and practices of listed companies in connected transactions. Meanwhile, prices and other conditions shall be as if the transaction is at an arm’s length where directors or staff having an interest in such transaction must not participate in any approval process.
Policy or Outlook for Future Connected Transactions
-None-
Note: Item No. 2 and No. 3 are not considered connected transactions as the Company terminated a rental
agreement with the Mitr Phol Group of Companies and Bualuang Securities Public Company Limited after we had sold the Ploenchit Center Building to the Prime Office Leasehold Property Fund on April 1, 2011. Our status has changed from the building owner and landlord to a building manager since. As a result, all rental activities relating to the office building including any consideration to rent the Pleonchit Center’s space and at what price are subject to the Fund’s approval. The two businesses have entered an office space rental agreement with the Prime Office Leasehold Property Fund accordingly.
First line
72 Audit Report of Certified Public Accountant
To the Shareholders of The Erawan Group Public Company Limited
I have audited the accompanying consolidated and separate statements of financial position as at 31
December 2011 and 2010, and the related statements of comprehensive income, changes in equity and cash
flows for the years then ended of The Erawan Group Public Company Limited and its subsidiaries, and of
The Erawan Group Public Company Limited, respectively. The Company’s management is responsible for the
correctness and completeness of information presented in these financial statements. My responsibility is to
express an opinion on these financial statements based on my audits.
I conducted my audits in accordance with generally accepted auditing standards. Those standards require
that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation.
I believe that my audits provide a reasonable basis for my opinion.
In my opinion, the consolidated and separate financial statements referred to above present fairly, in all
material respects, the financial positions as at 31 December 2011 and 2010 and the results of operations and
cash flows for the years then ended of The Erawan Group Public Company Limited and its subsidiaries, and of
The Erawan Group Public Company Limited, respectively, in accordance with Financial Reporting Standards.
As explained in notes 2 and 3 to the financial statements, with effect from 1 January 2011 the Company
has adopted certain new and revised financial reporting standards. The consolidated and separate financial
statements for the year ended 31 December 2010 have been restated accordingly.
Audit Report of Certi f ied Public AccountantThe Erawan Group Public Company Limited
Vannaporn JongperadechanonCertified Public Accountant
Registration No. 4098
KPMG Phoomchai Audit Ltd.
Bangkok
28 February 2012
73
SUCCESS WITH INTEGRITY
Audit Fee
Audit FeeThe Erawan Group Public Company Limited
In 2011, the audit fee paid to the external auditor of KPMG Phoomchai Audit Limited was Baht 3,855,000 (The Erawan Group Plc. Baht 2,300,000 and the Company’s subsidiary Bath 1,555,000). The Company did not pay any non audit fee to the auditor, the auditor’s office, and person or company related to the auditor and the auditor’s office. The fee was excluding the out of pocket expenses.
The accompanying notes are an integral part of these financial statements.
74
First line
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
(Restated) (Restated)
Assets
Current assets
Cash and cash equivalents
Trade accounts receivable
Inventories
Advances - construction
Value added tax refundable
Other current assets
6
5, 7
8
5, 9
450,196,331
134,393,606
52,821,584
37,644,306
39,362,933
56,894,127
220,384,384
148,046,349
72,898,210
15,023,839
50,625,364
49,537,238
140,711,404
74,702,818
9,229,593
36,525,750
-
19,268,382
93,907,272
79,207,822
28,045,046
13,905,283
-
15,882,989
Total current assets 771,312,887 556,515,384 280,437,947 230,948,412
Non-current assets
Investments in subsidiaries
Investment in associate
Investments in other related parties
Long-term loans to subsidiaries
Property, plant and equipment
Land held for development
Leasehold rights for land and buildings
Intangible assets
Deposits for lease of land, building and equipment
Other non-current assets
10
11
12
5
13, 16
14
15, 16
17
16
18
-
338,271
2,486,924
-
9,493,559,805
104,236,832
1,604,762,025
46,482,693
120,625,917
94,059,935
-
338,271
2,571,029
-
10,151,618,552
104,206,832
1,793,652,235
60,833,747
204,341,948
75,188,645
2,301,159,871
338,271
1,913,031
1,393,545,475
5,711,589,259
-
806,148,906
29,960,745
115,328,049
33,903,134
2,299,159,881
338,271
1,975,973
1,080,774,007
6,242,901,679
-
963,996,368
39,744,993
202,314,317
28,655,926
Total non-current assets 11,466,552,402 12,392,751,259 10,393,886,741 10,859,861,415
Total assets 12,237,865,289 12,949,266,643 10,674,324,688 11,090,809,827
Statements of f inancial position The Erawan Group Public Company Limited and its Subsidiaries As at 31 December 2011 and 2010
The accompanying notes are an integral part of these financial statements.
75
First line
SUCCESS WITH INTEGRITY
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
(Restated) (Restated)
Liabilities and equity
Current liabilities
Short-term loans from financial institutions
Trade accounts payable
Accounts payable - construction
Current portion of hire purchase payable
Current portion of long-term loans from financial institutions
Other current liabilities
19
5, 20
19
19
21
76,100,000
175,335,257
81,217,056
1,718,148
695,250,000
415,667,650
195,700,000
211,897,440
40,952,783
819,440
573,750,000
347,060,195
76,100,000
81,730,311
60,668,752
1,718,148
515,250,000
170,492,635
195,700,000
90,083,357
20,235,144
819,440
403,750,000
151,375,348
Total current liabilities 1,445,288,111 1,370,179,858 905,959,846 861,963,289
Non-current liabilities
Hire purchase payable
Long-term loans from a subsidiary
Long-term loans from financial institutions
Accounts payable for land leasehold rights
Deposits from lessees
Deferred income
Employee benefit obligations
19
5, 19
19
16
16, 22
23
3,458,178
-
6,727,667,051
180,000,000
42,222,972
26,481,927
43,271,996
621,197
-
7,829,517,051
360,000,000
100,677,747
15,320,798
-
3,458,178
45,438,032
4,357,900,000
180,000,000
40,031,238
26,481,927
17,543,228
621,197
38,860,995
5,314,750,000
360,000,000
99,232,325
15,320,798
-
Total non-current liabilities 7,023,102,124 8,306,136,793 4,670,852,603 5,828,785,315
Total liabilities 8,468,390,235 9,676,316,651 5,576,812,449 6,690,748,604
Statements of f inancial position (Continued)The Erawan Group Public Company Limited and its Subsidiaries As at 31 December 2011 and 2010
The accompanying notes are an integral part of these financial statements.
76
First line
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
(Restated) (Restated)
Liabilities and equity
Equity
Share capital
Authorised share capital
24
2,505,000,000 2,244,779,001 2,505,000,000 2,244,779,001
Issued and paid-up share capital
Premium on shares
Employee stock options
Other components of equity
Retained earnings
Appropriated
Legal reserve
Unappropriated
25
24
25
2,244,779,001
358,142,539
4,920,510
(433,287)
115,108,000
866,092,809
2,244,779,001
358,142,539
-
(596,603)
79,608,000
449,041,861
2,244,779,001
358,142,539
4,920,510
(352,802)
103,158,000
2,386,864,991
2,244,779,001
358,142,539
-
(405,036)
67,658,000
1,729,886,719
Equity attributable to equity holders of the Company
Non-controlling interests
3,588,609,572
180,865,482
3,130,974,798
141,975,194
5,097,512,239
-
4,400,061,223
-
Total equity 3,769,475,054 3,272,949,992 5,097,512,239 4,400,061,223
Total liabilities and equity 12,237,865,289 12,949,266,643 10,674,324,688 11,090,809,827
Statements of f inancial position (Continued) The Erawan Group Public Company Limited and its Subsidiaries As at 31 December 2011 and 2010
The accompanying notes are an integral part of these financial statements.
77
First line
SUCCESS WITH INTEGRITY
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
(Restated) (Restated)
Income
Revenues from hotel operations
Rental of units in buildings and
service income
Gain on disposal of Ploenchit Center
Net foreign exchange gain
Dividend income
Interest income
Other income
5
16
5
5
5, 27
3,536,263,159
219,280,684
664,330,168
2,568,225
-
6,180,234
58,609,269
2,929,914,482
391,333,097
-
3,573,512
982,813
411,737
38,112,615
1,779,980,257
178,537,866
664,330,168
-
-
65,880,663
54,760,908
1,545,898,978
384,011,760
-
1,232,838
18,085,498
39,065,891
35,810,011
Total income 4,487,231,739 3,364,328,256 2,743,489,862 2,024,104,976
Expenses
Cost of hotel operations
Cost of rental of units in buildings
and service
Depreciation and amortisation
Selling expenses
Administrative expenses
Finance costs
5
28
5, 29, 30
5, 32
1,700,519,759
89,284,570
645,511,741
250,743,365
810,805,775
406,682,214
1,488,413,277
154,922,380
683,504,716
214,081,725
702,081,688
360,761,571
788,462,200
66,843,864
352,611,758
143,427,913
415,900,378
267,486,417
705,452,776
159,636,076
404,735,841
118,441,023
375,311,892
245,184,988
Total expenses 3,903,547,424 3,603,765,357 2,034,732,530 2,008,762,596
Profit (loss) before income
tax expense
Income tax expense 33
583,684,315
(53,469,379)
(239,437,101)
(19,866,597)
708,757,332
-
15,342,380
-
Profit (loss) for the year 530,214,936 (259,303,698) 708,757,332 15,342,380
Statements of comprehensive incomeThe Erawan Group Public Company Limited and its SubsidiariesFor the years ended 31 December 2011 and 2010
The accompanying notes are an integral part of these financial statements.
7878
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
(Restated) (Restated)
Other comprehensive income (loss)
Net change in fair value of
available-for-sale investments 163,316 (405,505) 52,234 (296,893)
Other comprehensive income (loss)
for the year, net of income tax 163,316 (405,505) 52,234 (296,893)
Total comprehensive income (loss) for the year 530,378,252 (259,709,203) 708,809,566 15,045,487
Profit (loss) attributable to:
Equity holders of the Company
Non-controlling interests
491,324,648
38,890,288
(275,016,542)
15,712,844
708,757,332
-
15,342,380
-
Profit (loss) for the year 530,214,936 (259,303,698) 708,757,332 15,342,380
Total comprehensive income (loss)
attributable to:
Equity holders of the Company
Non-controlling interests
491,487,964
38,890,288
(275,422,047)
15,712,844
708,809,566
-
15,045,487
-
Total comprehensive income (loss) for the year 530,378,252 (259,709,203) 708,809,566 15,045,487
Earnings (loss) per share
Basic earnings (loss) per share (in Baht) 34 0.22 (0.12) 0.32 0.01
Diluted earnings per share (in Baht) 0.22 - 0.32 -
Statements of comprehensive income (Continued) The Erawan Group Public Company Limited and its SubsidiariesFor the years ended 31 December 2011 and 2010
The
acco
mpa
nyin
g no
tes
are
an in
tegr
al p
art o
f the
se fin
anci
al s
tate
men
ts.
79
SUCCESS WITH INTEGRITY
Stat
emen
ts o
f ch
ange
s in
equ
ityTh
e Er
awan
Gro
up P
ublic
Com
pany
Lim
ited
and
its S
ubsi
diar
ies
For t
he y
ears
end
ed 3
1 D
ecem
ber 2
011
and
2010
(Uni
t: in
Bah
t)
Not
e
Con
solid
ated
fina
ncia
l st
atem
ents
Issu
ed a
nd
paid
-up
shar
e
capi
tal
Shar
e
prem
ium
Empl
oyee
stoc
k
optio
ns
Reta
ined
ear
ning
sO
ther
co
mpo
nent
s of
eq
uity
Equi
ty
attri
buta
ble
to
equi
ty h
olde
rs
of th
e
Com
pany
Non
-
cont
rollin
g
inte
rest
s
Tota
l equ
ity
Lega
l
rese
rve
Una
ppro
-
pria
ted
Unr
ealis
ed
surp
luse
s
(defi
cits
) of
fair
valu
e ch
ange
s
on in
vest
men
t
Bala
nce
at 1
Jan
uary
201
0 C
ompr
ehen
sive
inc
ome
(loss
) fo
r th
e ye
ar
Profi
t (lo
ss)
O
ther
com
preh
ensi
ve lo
ssD
ivid
end
Tran
sfer
to le
gal r
eser
ve35
25
2,24
4,77
9,00
1 - - - -
358,
142,
539 - - - -
- - - - -
78,8
40,0
00 - - -
768,
000
724,
826,
403
(275
,016
,542
) - -(7
68,0
00)
(191
,098
) -(4
05,5
05) - -
3,40
6,39
6,84
5
(275
,016
,542
)(4
05,5
05) - -
132,
562,
362
15,7
12,8
44 -
(6,3
00,0
12) -
3,53
8,95
9,20
7
(259
,303
,698
)(4
05,5
05)
(6,3
00,0
12) -
Bala
nces
at
31 D
ecem
ber
2010
2,24
4,77
9,00
1
358,
142,
539
-79
,608
,000
449,
041,
861
(596
,603
)3,
130,
974,
798
141,
975,
194
3,27
2,94
9,99
2
Bala
nce
at 3
1 D
ecem
ber
2010
- a
s re
porte
d Im
pact
of c
hang
es in
acc
ount
ing
polic
ies
32,
244,
779,
001 -
358,
142,
539 -
- -79
,608
,000
-44
9,04
1,86
1 (3
8,77
3,70
0)(5
96,6
03) -
3,13
0,97
4,79
8 (3
8,77
3,70
0)14
1,97
5,19
4 -3,
272,
949,
992
(38,
773,
700)
Bala
nce
at 1
Jan
uary
201
1 -
rest
ated
Em
ploy
ee s
tock
opt
ions
Co
mpr
ehen
sive
inco
me
(loss
) fo
r th
e ye
ar
Profi
t
Oth
er c
ompr
ehen
sive
inco
me
Tran
sfer
to le
gal r
eser
ve
24 25
2,24
4,77
9,00
1 - - - -
358,
142,
539 - - - -
-4,
920,
510 - - -
79,6
08,0
00 - - -
35,5
00,0
00
410,
268,
161 -
491,
324,
648 -
(35,
500,
000)
(596
,603
) - -16
3,31
6 -
3,09
2,20
1,09
8 4,
920,
510
491,
324,
648
163,
316 -
141,
975,
194 -
38,8
90,2
88 - -
3,23
4,17
6,29
2 4,
920,
510
530,
214,
936
163,
316 -
Bala
nce
at 3
1 D
ecem
ber
2011
2,24
4,77
9,00
135
8,14
2,53
94,
920,
510
115,
108,
000
866,
092,
809
(433
,287
)3,
588,
609,
572
180,
865,
482
3,76
9,47
5,05
4
The
acco
mpa
nyin
g no
tes
are
an in
tegr
al p
art o
f the
se fin
anci
al s
tate
men
ts.
8080
Stat
emen
ts o
f ch
ange
s in
equ
ity (
Con
tinue
d)Th
e Er
awan
Gro
up P
ublic
Com
pany
Lim
ited
and
its S
ubsi
diar
ies
For t
he y
ears
end
ed 3
1 D
ecem
ber 2
011
and
2010
(Uni
t: in
Bah
t)
Not
e
Sepa
rate
fina
ncia
l st
atem
ents
Issu
ed a
nd
paid
-up
shar
e
capi
tal
Shar
e pr
emiu
mEm
ploy
ee s
tock
optio
ns
Reta
ined
ear
ning
sO
ther
co
mpo
nent
s of
eq
uity
Tota
l equ
ity
attri
buta
ble
to
equi
ty h
olde
rs
of th
e C
ompa
nyLe
gal r
eser
veU
napp
ropr
iate
d
Unr
ealis
ed
surp
luse
s (d
efici
ts) o
f fai
r va
lue
chan
ges
in in
vesm
ents
Bala
nce
at 1
Jan
uary
201
0 C
ompr
ehen
sive
inc
ome
(loss
) fo
r th
e pe
riod
Pr
ofit
O
ther
com
preh
ensi
ve lo
ss
Tran
sfer
to le
gal r
eser
ve25
2,24
4,77
9,00
1 - - -
358,
142,
539 - - -
- - - -
66,8
90,0
00 - -
768,
000
1,71
5,31
2,33
9
15,3
42,3
80 -
(768
,000
)
(108
,143
) -(2
96,8
93) -
4,38
5,01
5,73
6
15,3
42,3
80
(296
,893
) -
Bala
nces
at
31 D
ecem
ber
2010
2,24
4,77
9,00
135
8,14
2,53
9-
67,6
58,0
00
1,72
9,88
6,71
9 (4
05,0
36)
4,40
0,06
1,22
3
Bala
nce
at 3
1 D
ecem
ber
2010
- a
s re
porte
dIm
pact
of c
hang
es in
acc
ount
ing
polic
ies
32,
244,
779,
001 -
358,
142,
539 -
- -67
,658
,000
-1,
729,
886,
719
(1
6,27
9,06
0)(4
05,0
36) -
4,40
0,06
1,22
3(1
6,27
9,06
0)
Bala
nce
at 1
Jan
uary
201
1 -
rest
ated
Em
ploy
ee s
tock
opt
ions
C
ompr
ehen
sive
inco
me
for
the
perio
d
Profi
t
Oth
er c
ompr
ehen
sive
inco
me
Tran
sfer
to le
gal r
eser
ve
24 25
2,24
4,77
9,00
1 - - - -
358,
142,
539 - - - -
-4,
920,
510 - - -
67,6
58,0
00 - - -
35,5
00,0
00
1,71
3,60
7,65
9 -
708,
757,
332 -
(35,
500,
000)
(405
,036
) - -52
,234
-
4,38
3,78
2,16
34,
920,
510
708,
757,
332
52,2
34 -
Bala
nce
at 3
1 D
ecem
ber
2011
2,24
4,77
9,00
135
8,14
2,53
94,
920,
510
103,
158,
000
2,38
6,86
4,99
1 (3
52,8
02)
5,09
7,51
2,23
9
The accompanying notes are an integral part of these financial statements.
81
SUCCESS WITH INTEGRITY
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
(Restated) (Restated)
Cash flows from operating activities
Profit (loss) for the year
Adjustments for
Depreciation and amortisation
Doubtful debts expense (reversal)
Unrealised (gain) loss from increase in
value of investment in related company
Employee benefit obligations
Employee stock options
Loss on non-refundable withholding tax
deducted at source
Transfer rental deposits and deferred
income to income
Transfer advance received from customers to income
Dividend income
Interest income
Gain on sale of Ploenchit Center
(Gain) loss on disposal of property, plant and
equipment, intangible assets and leasehold rights
Finance costs
Income tax expense
530,214,936
645,511,741
331,466
89,011
6,754,843
4,920,510
376,795
(951,500)
(560,950)
-
(6,180,234)
(664,330,168)
14,788,536
406,682,214
53,469,379
(259,303,698)
683,504,716
717,106
(18,638)
-
-
3,794,537
(5,343,191)
(1,368,177)
(982,813)
(411,737)
-
(286,337)
360,761,571
19,866,597
708,757,332
352,611,758
101,432
-
3,405,062
4,920,510
-
(951,501)
(560,951)
-
(65,880,663)
(664,330,168)
3,424,534
267,486,417
-
15,342,380
404,735,841
(914,539)
-
-
-
3,302,220
(5,343,191)
(1,368,177)
(18,085,498)
(39,065,891)
-
(200,787)
245,184,988
-
991,116,579 800,929,936 608,983,762 603,587,346
Statements of cash f lowsThe Erawan Group Public Company Limited and its SubsidiariesFor the years ended 31 December 2011 and 2010
The accompanying notes are an integral part of these financial statements.
82
First line
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
(Restated) (Restated)
Changes in operating assets and liabilities
Trade accounts receivable
Inventories
Advances - construction
Value added tax refundable
Other current assets
Deposits for lease of land, building, and equipment
Other non-current assets
Trade accounts payable
Employee benefit obligations paid
Other current liabilities
Deposits from lessees
13,199,848
20,076,625
(22,620,467)
11,262,430
7,030,448
(6,283,969)
(14,598,129)
(36,562,187)
(2,256,547)
60,624,065
(58,085,426)
(4,284,401)
5,349,251
19,593,673
147,376,418
(6,267,833)
26,998,281
15,790,124
(18,786,899)
-
(3,245,963)
3,770,476
4,282,143
18,815,452
(22,620,467)
-
(740,203)
(3,013,733)
14,245,875
(8,353,046)
(1,832,244)
19,571,515
(32,349,811)
(2,735,763)
5,747,357
867,392
78,120,621
1,952,884
25,907,656
12,906,147
14,982,351
-
344,593
3,743,384
Cash generated from operating activities
Income tax paid
962,903,270
(34,943,819)
987,223,063
(52,837,616)
596,989,243
(19,493,080)
745,423,968
(14,450,821)
Net cash from operating activities 927,959,451 934,385,447 577,496,163 730,973,147
Cash flows from investing activities
Investments in other related parties
Investments in subsidiary
Short-term loans to a subsidiary
Proceeds from short-term loans to a subsidiary
Long-term loans to subsidiaries
Proceeds from long-term loans to subsidiaries
Acquisition of property, plant and equipment
Acquisition of leasehold rights for land and buildings
Acquisition of intangible assets
Net proceeds from sale of Ploenchit Center
Proceeds from sales of property, plant and
equipment, and intangible assets
Dividend received
Interest received
158,409
-
-
-
-
-
(537,963,906)
(700,859)
(5,484,071)
1,352,047,347
1,295,972
-
6,180,234
347,271
-
-
-
-
-
(488,502,754)
(156,279,790)
(8,544,905)
-
3,850,275
982,812
411,737
115,176
(1,999,990)
-
-
(348,218,296)
37,989,571
(399,806,077)
-
(2,388,829)
1,352,047,347
1,438,404
-
63,337,920
252,494
-
(184,861,134)
184,861,134
(457,451,218)
123,433,352
(170,188,057)
(150,000,000)
(3,511,734)
-
6,299,303
18,085,498
38,055,372
Net cash from (used in) investing activities 815,533,126 (647,735,354) 702,515,226 (595,024,990)
Statements of cash f lows (Continued)The Erawan Group Public Company Limited and its SubsidiariesFor the years ended 31 December 2011 and 2010
The accompanying notes are an integral part of these financial statements.
83
First line
SUCCESS WITH INTEGRITY
Statements of cash f lows (Continued)The Erawan Group Public Company Limited and its SubsidiariesFor the years ended 31 December 2011 and 2010
(Unit: in Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
(Restated) (Restated)
Cash flows from financing activities
Repayment of short-term loans from financial institutions
Finance lease payments
Short-term loans from a subsidiary
Repayment of short-term loans from a subsidary
Long-term loans from a subsidiary
Repayment of long-term loans from a subsidary
Long-term loans from financial institutions
Repayment of long-term loans from financial institutions
Finance costs paid
Dividend paid to non-controlling interests
(119,600,000)
(3,733,312)
-
-
-
-
-
(980,350,000)
(409,997,318)
-
(11,500,000)
(1,130,340)
-
-
-
-
209,200,000
(168,650,000)
(365,373,909)
(6,300,012)
(119,600,000)
(3,733,312)
143,470,578
(143,470,578)
85,466,073
(78,889,036)
-
(845,350,000)
(271,100,982)
-
43,500,000
(1,130,340)
11,027,304
(11,027,304)
31,646,562
(47,917,357)
139,000,000
(162,400,000)
(246,574,309)
-
Net cash used in financing activities (1,513,680,630) (343,754,261) (1,233,207,257) (243,875,444)
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at 1 January
229,811,947
220,384,384
(57,104,168)
277,488,552
46,804,132
93,907,272
(107,927,287)
201,834,559
Cash and cash equivalents at 31 December 6 450,196,331 220,384,384 140,711,404 93,907,272
Non-cash transactions
Offsetting rental deposit received from lessees with accounts receivable
Vehicles purchased under hire purchase contract
Acquisition of plant and equipment, intangible assets and leasehold rights for land and buildings for which payment has yet to be made
121,429
7,469,000
(37,630,162)
4,016,134
1,449,000
38,086,089
121,429
7,469,000
(40,433,608)
4,016,134
1,449,000
18,911,350
Notes to the financial statements848484
Name of the entity Type of businessCountry of
incorporation
Ownership interest (%)
2011 2010
Direct subsidiariesErawan Hotel Public Company Limited
Erawan Chaophraya Company Limited
Erawan Rajdamri Company Limited
Erawan Phuket Company Limited
Erawan Samui Company Limited
Erawan Naka Company Limited
The Reserve Company Limited
Erawan Commercial Management
Company Limited
Hotel
Hotel
Hotel
Hotel
Hotel
Land owner
Real estate development
Management
service
Thailand
Thailand
Thailand
Thailand
Thailand
Thailand
Thailand
Thailand
72.59
95.77
99.99
99.99
99.99
99.99
99.99
99.99
72.59
95.77
99.99
99.99
99.99
99.99
99.99
-
Indirect subsidiariesErawan Hotel Public Company Limited
Erawan Chaophraya Company Limited
Hotel
Hotel
Thailand
Thailand
1.05
4.22
1.05
4.22
AssociateRajprasong Development Company Limited Service Thailand 48.00 48.00
Notes to the f inancial statementsThe Erawan Group Public Company Limited and its SubsidiariesFor the years ended 31 December 2011 and 2010
These notes form an integral part of the financial statements.
The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 28 February 2012.
1. General information
The Erawan Group Public Company Limited, the “Company”, is incorporated in Thailand and has its registered office at 2 Sukhumvit Road, Klong Toey Subdistrict, Klong Toey District, Bangkok. The Company has 10 branches in Bangkok, Cholburi, Phuket, Surathani and Prajuabkirikhan.
The Company was listed on the Stock Exchange of Thailand in June 1994.
The principal businesses of the Company are engaged as a holding company with investments in various companies, engaged in hotel business, and in building rental business. Details of the Company’s subsidiaries and associate as at 31 December 2011 and 2010 were as follows:
Notes to the financial statements 85
SUCCESS WITH INTEGRITY
85
SUCCESS WITH INTEGRITY
TFRS Topic
TAS 1 (revised 2009)
TAS 2 (revised 2009)
TAS 7 (revised 2009)
TAS 8 (revised 2009)
TAS 10 (revised 2009)
TAS 16 (revised 2009)
TAS 17 (revised 2009)
TAS 18 (revised 2009)
TAS 19
TAS 23 (revised 2009)
TAS 24 (revised 2009)
TAS 26
TAS 27 (revised 2009)
TAS 28 (revised 2009)
TAS 33 (revised 2009)
TAS 34 (revised 2009)
TAS 36 (revised 2009)
TAS 37 (revised 2009)
TAS 38 (revised 2009)
TAS 40 (revised 2009)
TFRS 2
TIC 31
Presentation of Financial Statements
Inventories
Statement of Cash Flows
Accounting Policies, Changes in Accounting Estimates and Errors
Events after the Reporting Period
Property, Plant and Equipment
Leases
Revenue
Employee Benefits
Borrowing Costs
Related Party Disclosures
Accounting and Reporting by Retirement Benefit Plans
Consolidated and Separate Financial Statements
Investments in Associates
Earnings per Share
Interim Financial Reporting
Impairment of Assets
Provisions, Contingent Liabilities and Contingent Assets
Intangible Assets
Investment Property
Share-based Payment
Revenue - Barter Transactions Involving Advertising Services
2. Basis of preparation of the f inancial statements
(a) Statement of compliance
The financial statements are prepared in accordance with Thai Financial Reporting Standards (TFRS) and guidelines promulgated by the Federation of Accounting Professions (“FAP”), applicable rules and regulations of the Thai Securities and Exchange Commission.
During 2010 and 2011, the FAP issued the following new and revised TFRS relevant to the Group’s operations and effective for accounting periods beginning on or after 1 January 2011:
Notes to the financial statements868686
The adoption of these new and revised TFRS has resulted in changes in the Group’s accounting policies.The effects of these changes are disclosed in note 3.
In addition to the above new and revised TFRS, the FAP has issued during 2010 a number of other new and revised TFRS which are expected to be effective for financial statements beginning on or after 1 January 2013 and have not been adopted in the preparation of these financial statements. These new and revised TFRS are disclosed in note 40.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis.
(c) Presentation currency
The financial statements are prepared and presented in Thai Baht. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest million unless otherwise stated.
(d) Use of estimates and judgements
The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected.
Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is included in the following notes:
Note 23 Measurement of defined benefit obligations
3. Changes in accounting policies
(a) Overview
From 1 January 2011, consequent to the adoption of new and revised TFRS as set out in note 2, the Group has changed its accounting policies in the following areas:
• Presentation of financial statements• Accounting for property, plant and equipment• Accounting for employee benefits
Notes to the financial statements 87
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(b) Presentation of financial statements
From 1 January 2011, the Group has adopted TAS 1 Presentation of Financial Statements (Revised 2009).Under the revised standard, a set of financial statements comprises:
• Statement of financial position;• Statement of comprehensive income;• Statement of changes in equity;• Statement of cash flows; and• Notes to the financial statements.
As a result, the Group presents all owner changes in equity in the statement of changes in equity and all non-owner changes in equity in the statement of comprehensive income. Previously, all such changes
were included in the statement of changes in equity.
Details of the new accounting policies adopted by the Group and the impact of the changes on the
financial statements are included in notes 3(b) to 3(d) below. Other new and revised TFRS did not have any
impact on the accounting policies, financial position or performance of the Group. The impact of the changes
on the financial statements for the years ended 31 December 2011 is summarized as follows:
(Unit: in thousand Baht)
Consolidatedfinancial statements
Separatefinancial statements
Note 2011 2011
Statement of financial position
Equity at 31 December 2010 - as reported
TAS 19 Employee benefits 3(d)
3,272,950
(38,774)
4,400,061
(16,279)
Equity at 1 January 2011 3,234,176 4,383,782
Statement of comprehensive income for the year ended
31 December 2011
Decrease in profit before income tax as a result of the
adoption of:
TAS 19 Employee benefits 3(d)
(6,754)
(3,404)
Increase in income tax expense - -
(Decrease) in profit (6,754) (3,404)
For the year ended 31 December 2011
Notes to the financial statements888888
Comparative information has been re-presented so that it also is in conformity with the revised standard.
Since the change in accounting policy only impacts presentation aspects, there is no impact on reported
profit or earnings per share.
(c) Accounting for property, plant and equipment
From 1 January 2011, the Group has adopted TAS 16 (revised 2009) Property, Plant and Equipment in
determining and accounting for the cost and depreciable amount of property, plant and equipment.
The principal changes introduced by the revised TAS 16 and affecting the Group are that;
(i) the depreciation charge has to be determined separately for each significant part of an asset.
(ii) in determining the depreciable amount, the residual value of an item of property, plant and
equipment has to be measured at the amount estimated receivable currently for the asset if the
asset were already of the age and in the condition expected at the end of its useful life.
Further more, the residual value and useful life of an asset have to be reviewed at least at each
financial year-end.
The changes have been applied prospectively in accordance with the transitional provisions of the
revised standard, which no material impact on the profit and earnings per share for the year ended
31 December 2011.
(d) Accounting for employee benefits
From 1 January 2011, the Group has adopted TAS 19 Employee Benefits.
Under the new policy, the Group’s obligation in respect of post-employment benefits is - retirement benefit
recognised in the financial statements based on calculations performed annually by a qualified actuary using
the projected unit credit method. Previously, this obligation was recognised as and when payments were made.
The Group’s and the Company’s liability for retirement benefit employee benefit obligations as at
1 January 2011 has been determined to be Baht 39 million and Baht 16 million, respectively. The Group
has opted to record the entire amount of this liability as an adjustment to retained earnings as at 1 January
2011, in accordance with the transitional provisions of TAS 19. The impact on the 2011 financial statements
was as follows:
Notes to the financial statements 89
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(Unit: in thousand Baht)
Consolidatedfinancial statements
Separatefinancial statements
2011 2011
Statement of financial position as at 1 January 2011(Increase) in employee benefit obligations (38,774) (16,279)
(Decrease) in unappropriated retained earnings (38,774) (16,279)
Statement of comprehensive income for the year ended 31 December 2011Increase in employee expenses resulting in:
(Increase) in cost of hotel operations and cost of rental of units in buildings and service
(Increase) in selling expenses
(Increase) in administrative expenses
(3,044)
(410)
(3,300)
(1,568)
(71)
(1,765)
(Decrease) in profit (6,754) (3,404)
(Decrease) in earnings per share:
- Basic earnings per share (in Baht)
(0.0030)
(0.0015)
4. Signif icant accounting policies
The accounting policies set out below have been applied consistently to all periods presented in these financial statements except as explained in note 3, which addresses changes in accounting policies.
(a) Basis of consolidation
The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interests in associate.
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Losses applicable to non - controlling interests in a subsidiary are allocated to non - controlling interests even if doing so causes the non - controlling interests to have a deficit balance.
Notes to the financial statements909090
Associate
Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity.
Investments in associates are accounted for in the consolidated financial statements using the equity method (equity-accounted investees) and are recognised initially at cost. The cost of the investment includes transaction costs.
The consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of associates, after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associate are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(b) Foreign currency transactions
Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.
(c) Cash and cash equivalents
Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits and highly liquid short-term investments.
(d) Trade and other accounts receivable
Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts.
The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.
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(e) Inventories
Inventories are stated at the lower of cost (the weighted average method) and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale.
(f) Investments
Investments in subsidiaries and associate
Investments in subsidiaries and associate in the separate financial statements of the Company are accounted for using the cost method.
Investment in associate in the consolidated financial statements is accounted for using the equity method.
Investments in equity securities
Marketable equity securities, other than those securities held for trading or intended to be held to maturity, are classif ied as being available-for-sale investments. Available-for-sale investments are, subsequent to initial recognition, stated at fair value, and changes therein, other than impairment losses on available-for-sale monetary items, are recognised directly in equity. Impairment losses are recognised in prof it or loss. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in profit or loss.
(g) Property, plant and equipment
Recognition and measurement
Owned assets
Lands are stated at cost. Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Cost also may include transfers from other comprehensive income of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised
net within other income in profit or loss.
Notes to the financial statements929292
Leased assets
Leases in terms of which the Group substantially assumes all the risk and rewards of ownership are
classified as finance leases. Equipment and vehicles acquired by way of finance leases is capitalised at the
lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less
accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges
and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the
liability. Finance charges are charged directly to the profit or loss.
Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow to the
Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The
costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.
Depreciation
Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other
amount substituted for cost, less its residual value.
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each
component of an item of property, plant and equipment. The estimated useful lives are as follows:
Building and improvements 5 - 40 years
Furniture, fixtures and equipment 5 - 10 years
Vehicles 5 years
See Note 37 to the financial statements for changes in the estimated useful lives from 1 January 2010.
No depreciation is provided on freehold land or assets under construction.
Depreciation methods, useful lives and residual values are reviewed at each financial year-end and
adjusted if appropriate.
Operating equipment consists of linen, crockery, glass, silver and kitchen utensils purchased to meet the
normal requirements of the hotel operations have been regarded as a base stock and subsequent purchases
are expended when incurred.
Notes to the financial statements 93
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(h) Leasehold rights
Leasehold rights are stated at cost less accumulated amortisation and impairment losses.
Amortisation
Leasehold rights are amortised on a straight-line basis over the terms of the leases.
(i) Intangible assets
Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.
Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally is recognised in profit or loss as incurred.
Amortisation
Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value.
Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.
The estimated useful lives for the current and comparative periods are as follows:
Computer softwares 5 - 10 years
Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
(j) Impairment
The carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in profit or loss. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence
Notes to the financial statements949494
that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in profit or loss even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in profit or loss is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in profit or loss.
Calculation of recoverable amount
The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value.
The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less cost to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.
Reversals of impairment
An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognized in profit or loss. For available-for-sale financial assets that are equity securities, the reversal is recognised in other comprehensive income.
Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
(k) Trade, construction and other accounts payable
Trade, construction and other accounts payable are stated at cost.
(l) Employee benefits
Provident fund
The Group has a provident fund for its employees. The Group’s contributions are made to match with the contributions from employees and are recorded as expenses on an accrual basis.
Short-term employee benefits
The Group recognized the commitments of short-term employee benefits as expenses when employee rendered services.
Provision for retirement benefits
Notes to the financial statements 95
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The Group’s net obligation in respect of long-term employee benefits (Legal Severance Payment) is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The discount rate is the yield at the reporting date on government bonds. The calculation is performed using the projected unit credit method.
Share-based payments
The grant-date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reflect the actual number of awards for which the related service and non-market vesting conditions are expected to be met.
The fair value of the amount payable to employees in respect of share appreciation rights, which are settled in cash, is recognised as an expense with a corresponding increase in liabilities, over the period that the employees become unconditionally entitled to payment. The liability is remeasured at each reporting date and at settlement date. Any changes in the fair value of the liability are recognised as personnel expenses in profit or loss.
(m) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.
(n) Revenue
Revenue excludes value added taxes and is arrived at after deduction of trade discounts.
Revenue from hotel operations
Hotel revenues from room, food and beverages and other services are recognised when the rooms are occupied, food and beverages are sold and the services are rendered.
Rental and services income
Rental and services income from units in office buildings and shopping center are recognised in profit or loss on an accrual basis.
Dividend income
Dividend income is recognised in profit or loss on the date the Group’s right to receive payments is established.
Interest income
Interest income is recognised in profit or loss as it accrues
Notes to the financial statements969696
(o) Deferred income
The Company recognises deferred rental income as income on a straight-line basis over the terms of the leases.
(p) Finance costs
Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, losses on disposal of available-for-sale financial assets, dividends on preference shares classified as liabilities, fair value losses on financial assets at fair value through profit or loss, impairment losses recognised on financial assets (other than trade receivables), and losses on hedging instruments that are recognised in profit or loss.
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
(q) Lease payments
Payments made under operating leases are recognised in profit or loss on a systematic basis over the term of the lease and on a straight-line method for leases begin on or after 1 January 2008 unless another systematic basis is more representative of the time pattern of the user’s benefit. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease.
Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.
(r) Income tax
Income tax expense on the profit or loss for the year comprises current tax. Current is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
(s) Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all potential dilutive ordinary shares, which comprise convertible notes and share options granted to employees.
5. Related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
Notes to the financial statements 97
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Name of entitiesCountry of
incorporation/ nationality
Nature of relationships
Erawan Hotel Public Company LimitedErawan Chaophraya Company LimitedErawan Rajdamri Company LimitedErawan Phuket Company LimitedErawan Samui Company LimitedErawan Naka Company LimitedThe Reserve Company LimitedErawan Commercial Management Company LimitedRajprasong Development Company Limited
Rajprasong Square Company LimitedChai Talay Hotel Company Limited
Panel Plus Company LimitedPetro Green Company LimitedMitr Phol Sugar Company LimitedPhu Khieo Bio-Energy Company LimitedBanpu Public Company LimitedThe Syndicate of Thai Hotels & Tourists Enterprises Limited
Kiatnakin Bank Public Company LimitedPacific World (Thailand) LimitedEastern Sugar and Cane Company Limited
ThailandThailandThailandThailandThailandThailandThailandThailand
Thailand
ThailandThailand
ThailandThailandThailandThailandThailandThailand
ThailandThailandThailand
Subsidiary, 72.59% direct shareholding Subsidiary, 95.77% direct shareholding Subsidiary, 99.99% direct shareholding Subsidiary, 99.99% direct shareholding Subsidiary, 99.99% direct shareholding Subsidiary, 99.99% direct shareholding Subsidiary, 99.99% direct shareholding Subsidiary, 99.99% direct shareholding
Associate, 48.00% direct shareholding, some common directorsRelated company, 23.29% direct shareholdingRelated company, director is closed relative to a Company’s directorRelated company, some common directorsRelated company, some common directorsRelated company, some common directorsRelated company, some common directorsRelated company, some common directorsRelated company, some common directors
Related company, some common directorsRelated company, some common directorsRelated company, some common directors
The pricing policies for particular types of transactions are explained further below:
Relationships with related parties were as follows:
Transactions Pricing policies
SubsidiariesInterest income
Dividend incomeUtilities incomeRental and service expensesInterest expenses
At the rate of 4.84% - 5.48% per annum (2010: at the rate of 4.15% - 4.53% per annum) According to the shareholders’ approvalContractually agreed pricesBaht 17 million per annumAt the rate of 4.84% - 5.48% per annum (2010: at the rate of 4.15% - 4.53% per annum)
Notes to the financial statements989898
(Unit: in thousand Baht)
Year ended 31 December
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Subsidiaries
Interest income
Dividend income
Utilities income
Rental and service expenses
Interest expenses
-
-
-
-
-
-
-
-
-
-
62,521
-
2,348
16,376
3,134
38,940
17,350
1,918
16,264
1,874
Other related parties
Rental and services income
Utilities income
Other service income
Land rental
Management fee
15,467
1,163
14,037
12,519
1,000
45,551
4,264
5,667
10,920
1,000
11,165
1,163
9,981
-
1,000
43,082
4,264
5,073
-
1,000
Key management personnel compensation
Short-term employee benefit
Post-employment benfits
Share-based payment
37,604
618
2,584
35,154
-
-
36,029
618
2,584
33,354
-
-
Total key management personnel compensation 40,806 35,154 39,231 33,354
Significant transactions for the years ended 31 December 2011 and 2010 with related parties were as follows:
Transactions Pricing policies
AssociateManagement fee
Other related parties
Rental and services income
Utilities income
Other service income
Land rental
At cost - allocated in proportion to shareholding
Baht 350 - 560 per square meter per month
(2010: Baht 308 - 583 per square meter per month) depending on location
Contractually agreed prices
Fair price under the best conditions
Baht 14 million per annum
Notes to the financial statements 99
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Balances as at 31 December 2011 and 2010 with related parties were as follows:
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Trade accounts receivable from related parties
Subsidiaries
Erawan Hotel Public Company Limited
Erawan Rajdamri Company Limited
Erawan Samui Company Limited
Erawan Phuket Company Limited
-
-
-
-
-
-
-
-
154
1,556
608
56
126
880
328
-
Other related parties
Mitr Phol Sugar Company Limited
Banpu Public Company Limited
Petro Green Company Limited
Panel Plus Company Limited
Phu Khieo Bio-Energy Company Limited
Chai Talay Hotel Company Limited
Pacific World (Thailand) Limited
Eastern Sugar and Cane Company Limited
Other companies
743
333
260
-
-
449
652
-
-
986
442
63
727
19
243
438
292
55
743
333
260
-
-
-
444
-
-
986
342
63
727
19
-
438
-
55
Total 2,437 3,265 4,154 3,964
Other receivable - related partySubsidiary
Erawan Chaophraya Company Limited - - 598 746
Prepaid expense - related partyOther related party
The Syndicate of Thai Hotels & Tourists
Enterprises Limited 7,060 5,460 - -
Notes to the financial statements100
(Unit: in thousand Baht)
Loans to related parties
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Short-term loansSubsidiary
At 1 January
Increase
Decrease
-
-
-
-
-
-
-
-
-
-
184,861
(184,861)
At 31 December - - - -
Long-term loansSubsidiaries
At 1 January
Increase
Decrease
-
-
-
-
-
-
1,080,774
348,218
(35,447)
745,746
457,451
(122,423)
At 31 December - - 1,393,545 1,080,774
Movements during the years ended 31 December 2011 and 2010 of loans to related parties were as follows:
(Unit: % per annum) (Unit: in thousand Baht)
Loans to related partiesInterest rate
Consolidatedfinancial statements
Separatefinancial statements
2011 2010 2011 2010 2011 2010
Long-term loans Subsidiaries
Erawan Samui Company Limited
Erawan Naka Company Limited
Erawan Phuket Company Limited
Erawan Chaophraya Company Limited
Erawan Commercial Management
Company Limited
The Reserve Company Limited
5.48
5.48
5.48
5.48
5.48
5.48
4.53
4.53
4.53
4.53
-
4.53
-
-
-
-
-
-
-
-
-
-
-
-
114,354
19,798
854,522
238,709
3,779
162,383
79,316
20,036
598,568
228,740
-
154,114
- - 1,393,545 1,080,774
Notes to the financial statements 101
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(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Trade accounts payable - related parties
Subsidiaries
Erawan Samui Company Limited
Erawan Rajdamri Company Limited
Erawan Hotel Public Company Limited
Erawan Chaophraya Company Limited
-
-
-
-
-
-
-
-
10
125
281
543
-
-
257
30
- - 959 287
Other payable - related partyErawan Commercial Management
Company Limited
Erawan Chaophraya Company Limited
-
-
-
-
309
45
-
23
- - 354 23
(Unit: % per annum) (Unit: in thousand Baht)
Loans from a related partyInterest rate
Consolidatedfinancial statements
Separatefinancial statements
2011 2010 2011 2010 2011 2010
Long-term loans Subsidiary
Erawan Rajdamri Company Limited 5.48 4.53 - - 45,438 38,861
Notes to the financial statements102
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Cash on hand
Cash at banks
Highly liquid short-term investments
8,499
236,298
205,399
7,559
194,741
18,084
3,183
130,199
7,329
3,684
90,223
-
Total 450,196 220,384 140,711 93,907
Cash and cash equivalents of the Group as at 31 December 2011 and 2010 were denominated in Thai Baht.
6. Cash and cash equivalents
Movements during the years ended 31 December 2011 and 2010 of loans from related parties were as
follows:
(Unit: in thousand Baht)
Loans from a related party
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Short-term loans Subsidiary
At 1 January
Increase
Decrease
-
-
-
-
-
-
-
143,471
(143,471)
-
11,027
(11,027)
At 31 December - - - -
Long-term loansSubsidiary
At 1 January
Increase
Decrease
-
-
-
-
-
-
38,861
85,466
(78,889)
55,132
31,646
(47,917)
At 31 December - - 45,438 38,861
Notes to the financial statements 103
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7. Trade accounts receivable
(Unit: in thousand Baht)
Note
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Related parties
Other parties
5 2,437
134,229
3,265
146,722
4,154
71,867
3,964
76,460
Total
Less allowance for doubtful accounts
136,666
(2,272)
149,987
(1,941)
76,021
(1,318)
80,424
(1,216)
Net 134,394 148,046 74,703 79,208
Doubtful debts expenses (reversal) for the year 331 717 101 (914)
(Unit: in thousand Baht)
Consolidatedfinancial statements
Separatefinancial statements
2011 2010 2011 2010
Related parties
Outstanding:
Less than 3 months
3 - 6 months
6 - 12 months
2,430
5
2
3,265
-
-
4,147
5
2
3,964
-
-
2,437 3,265 4,154 3,964
Other parties
Outstanding:
Less than 3 months
3 - 6 months
6 - 12 months
Over 12 months
126,337
7,009
815
68
141,574
4,127
949
72
69,252
1,732
815
68
73,482
1,957
949
72
Less allowance for doubtful accounts
134,229
(2,272)
146,722
(1,941)
71,867
(1,318)
76,460
(1,216)
131,957 144,781 70,549 75,244
Net 134,394 148,046 74,703 79,208
Aging analyses for trade accounts receivable were as follows:
Trade accounts receivable of the Group as at 31 December 2011 and 2010 were denominated in Thai Baht.
Notes to the financial statements104
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Food and beverage
Operating suppliess
Real estate for sale
Others
31,242
12,225
-
9,355
32,801
15,365
17,684
7,048
7,108
1,583
-
539
9,118
989
17,684
254
Total 52,822 72,898 9,230 28,045
8. Inventories
(Unit: in thousand Baht)
Note
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Other advances
Prepaid expenses
Other receivables
Undue input value added tax
Others
5
5
526
26,401
1,522
5,618
22,827
1,240
24,009
1,577
9,735
12,976
326
9,158
681
4,964
4,139
322
9,083
843
3,843
1,792
Total 56,894 49,537 19,268 15,883
9. Other current assets
Notes to the financial statements 105
SUCCESS WITH INTEGRITY
(Uni
t: %
)(U
nit:
in m
illion
Bah
t)(U
nit:
in th
ousa
nd B
aht)
Sepa
rate
fina
ncia
l st
atem
ents
Ow
ners
hip
Inte
rest
Paid
-up
capi
tal
Cos
t met
hod
Impa
irmen
tAt
cos
t - n
etD
ivid
end
inco
me
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
Com
pany
’s n
ame
Eraw
an H
otel
Publ
ic Co
mpa
ny L
imite
d
Eraw
an C
haop
hray
a Co
mpa
ny L
imite
d
Eraw
an R
ajdam
ri Co
mpa
ny L
imite
d
Eraw
an P
huke
t Com
pany
Lim
ited
Eraw
an S
amui
Com
pany
Lim
ited
Eraw
an N
aka
Com
pany
Lim
ited
The
Rese
rve
Com
pany
Lim
ited
Eraw
an C
omm
ercia
l Man
agem
ent
Co
mpa
ny L
imite
d
72.5
9
95.7
7
99.9
9
99.9
9
99.9
9
99.9
9
99.9
9
99.9
9
72.5
9
95.7
7
99.9
9
99.9
9
99.9
9
99.9
9
99.9
9 -
119.
50
71.0
0
450.
00
550.
00
330.
00
7.50
1.00
2.00
119.
50
71.0
0
450.
00
550.
00
330.
00
7.50
1.00
-
819,
710
68,0
00
451,
291
582,
001
376,
858
300
1,00
0
2,00
0
819,
710
68,0
00
451,
291
582,
001
376,
858
300
1,00
0 -
- - - - - - - -
- - - - - - - -
819,
710
68,0
00
451,
291
582,
001
376,
858
300
1,00
0
2,00
0
819,
710
68,0
00
451,
291
582,
001
376,
858
300
1,00
0 -
- - - - - - - -
17,3
50
- - - - - - -
Tota
l2,
301,
160
2,29
9,16
0-
-2,
301,
160
2,29
9,16
0-
17,3
50
10.
Inve
stm
ents
in s
ubsi
diar
ies
Inve
stm
ents
in s
ubsi
diar
ies
as a
t 31
Dec
embe
r 201
1 an
d 20
10, a
nd d
ivid
end
inco
me
from
thos
e in
vest
men
ts fo
r the
yea
rs th
en e
nded
wer
e as
follo
ws:
Dur
ing
the
first
qua
rter o
f 201
1, th
e C
ompa
ny in
vest
ed in
99.
99%
of E
raw
an C
omm
erci
al M
anag
emen
t Com
pany
Lim
ited
as a
sub
sidi
ary
com
pany
.
Notes to the financial statements106
(Uni
t: %
)(U
nit:
in m
illion
Bah
t)(U
nit:
thou
sand
Bah
t)
Con
solid
ated
fina
ncia
l st
atem
ents
Ow
ners
hip
inte
rest
Paid
-up
capi
tal
Cos
t met
hod
Equi
ty m
etho
dIm
pairm
ent
At e
quity
- n
etD
ivid
end
inco
me
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
Asso
ciat
e
Rajp
raso
ng D
evel
opm
ent
C
o., L
td.
48.0
048
.00
1.00
1.00
338
338
338
338
--
338
338
--
(Uni
t: %
)(U
nit:
in m
illion
Bah
t)(U
nit:
thou
sand
Bah
t)
Sepa
rate
fina
ncia
l st
atem
ents
Ow
ners
hip
inte
rest
Paid
-up
capi
tal
Cos
t met
hod
Impa
irmen
tAt
cos
t - n
etD
ivid
end
inco
me
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
Asso
ciat
e
Rajp
raso
ng D
evel
opm
ent
Co.
, Ltd
.48
.00
48.0
01.
001.
0033
833
8-
-33
833
8-
-
11.
Inve
stm
ent
in a
ssoc
iate
Dur
ing
the
year
, the
Com
pany
did
not
rec
ord
its s
hare
s in
the
oper
atin
g re
sult
of in
vest
men
ts in
ass
ocia
te in
the
cons
olid
ated
fina
ncia
l
stat
emen
ts b
ecau
se it
fou
nd t
hat
the
amou
nt w
as im
mat
eria
l.
Inve
stm
ents
in a
ssoc
iate
as
at 3
1 D
ecem
ber 2
011
and
2010
, and
div
iden
d in
com
e fro
m th
e in
vest
men
t for
the
year
s th
en e
nded
wer
e as
follo
ws:
Notes to the financial statements 107
SUCCESS WITH INTEGRITY
12. Investments in other related parties
The following summarised financial information on associated company which have not been accounted
for using the equity method but have not been adjusted for the percentage of ownership held by the Group:
(Unit: %) (Unit: in thousand Baht)
Ownership interest
Total assets
Total liabilities
Total revenues
Net loss
2011
Rajprasong Development Co., Ltd. 48.00 2,233 228 2,000 (482)
2010
Rajprasong Development Co., Ltd. 48.00 1,772 248 2,005 (477)
(Unit: %) (Unit: in thousand Baht)
Equity interestConsolidated
financial statements
2011 2010 2011 2010
Related companiesRajprasong Square Co., Ltd.
The Asia Recovery 2 Fund
Less allowance for change in value
23.29
0.26
23.29
0.17
206
2,784
(503)
206
2,942
(577)
Total 2,487 2,571
(Unit: %) (Unit: in thousand Baht)
Equity interestSeparate
financial statements
2011 2010 2011 2010
Related companiesRajprasong Square Co., Ltd.
The Asia Recovery 2 Fund
Less allowance for change in value
23.29
0.13
23.29
0.13
206
2,060
(353)
206
2,174
(405)
Total 1,913 1,975
Notes to the financial statements108
(Uni
t: in
thou
sand
Bah
t)
Con
solid
ated
fina
ncia
l st
atem
ents
Land
Build
ing
and
impr
ovem
ents
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Cos
t
At 1
Jan
uary
201
0
Addi
tions
Adju
stm
ents
Tran
sfer
s
Dis
posa
ls
1,55
2,98
9
3,22
4 - -
(3,0
14)
9,39
2,29
3
48,9
54
(1,1
38)
337,
909
(6,2
49)
2,00
9,40
5
33,7
31
(287
)
62,0
91
(25,
029)
33,8
64
2,96
8 - -
(1,3
57)
215,
494
6,91
6 -
7,67
1 -
142,
830
354,
801
(5,2
16)
(411
,077
) -
13,3
46,8
75
450,
594
(6,6
41)
(3,4
06)
(35,
649)
At 3
1 D
ecem
ber
2010
and
1
Janu
ary
2011
Addi
tions
Adju
stm
ents
Tran
sfer
s
Dis
posa
ls
1,55
3,19
9 - - - -
9,77
1,76
9
18,5
03
(2,0
32)
47,5
28
(1,0
47,2
30)
2,07
9,91
1
36,0
03
1,44
3
22,4
28
(28,
090)
35,4
75
7,95
3 -
2,71
8
(4,5
34)
230,
081
1,02
7 -
13,9
61
(8,6
60)
81,3
38
522,
977
(3,1
52)
(88,
367) -
13,7
51,7
73
586,
463
(3,7
41)
(1,7
32)
(1,0
88,5
14)
At 3
1 D
ecem
ber
2011
1,55
3,19
98,
788,
538
2,11
1,69
541
,612
236,
409
512,
796
13,2
44,2
49
13.
Prop
erty
, pla
nt a
nd e
quip
men
t
Notes to the financial statements 109
SUCCESS WITH INTEGRITY
(Uni
t: in
thou
sand
Bah
t)
Con
solid
ated
fina
ncia
l st
atem
ents
Land
Build
ing
and
impr
ovem
ents
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Dep
reci
atio
n
At 1
Jan
uary
201
0
Dep
reci
atio
n ch
arge
for
the
year
Adju
stm
ents
Dis
posa
ls
- - - -
2,23
4,86
9
334,
008
(12)
(5,0
71)
1,15
6,39
9
235,
641 -
(22,
707)
14,4
99
5,96
9 -
(1,2
93)
- - - -
- - - -
3,40
5,76
7
575,
618
(12)
(29,
071)
At 3
1 D
ecem
ber
2010
and
1
Janu
ary
2011
Dep
reci
atio
n ch
arge
for
the
year
Adju
stm
ents
Dis
posa
ls
- - - -
2,56
3,79
4
297,
880
(181
)
(380
,160
)
1,36
9,33
3
239,
604
187
(23,
801)
19,1
75
7,40
7 -
(4,0
39)
- - - -
- - - -
3,95
2,30
2
544,
891 6
(408
,000
)
At 3
1 D
ecem
ber
2011
-2,
481,
333
1,58
5,32
322
,543
--
4,08
9,19
9
Notes to the financial statements110
(Uni
t: in
thou
sand
Bah
t)
Con
solid
ated
fina
ncia
l st
atem
ents
Land
Build
ing
and
impr
ovem
ents
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Net
boo
k va
lue
At 1
Jan
uary
201
0
Ow
ned
asse
ts
Asse
ts u
nder
fina
nce
leas
es
1,55
2,98
9 -
7,15
7,42
4 -
852,
956 50
19,3
65
-
215,
494 -
142,
830 -
9,94
1,05
8 50
1,55
2,98
97,
157,
424
853,
006
19,3
6521
5,49
414
2,83
09,
941,
108
Tran
sact
ions
elim
inat
ed o
n co
nsol
idat
ion
365,
383
10,3
06,4
91
At 3
1 D
ecem
ber
2010
and
1 J
anua
ry 2
011
Ow
ned
asse
ts
Asse
ts u
nder
fina
nce
leas
es
1,55
3,19
9 -
7,20
7,97
5 -
710,
578 -
15,0
44
1,25
6
230,
081 -
81,3
38
-
9,79
8,21
5
1,25
6
1,55
3,19
97,
207,
975
710,
578
16,3
0023
0,08
181
,338
9,79
9,47
1
Tran
sact
ions
elim
inat
ed o
n co
nsol
idat
ion
352,
148
10,1
51,6
19
At 3
1 D
ecem
ber
2011
Ow
ned
asse
ts
Asse
ts u
nder
fina
nce
leas
es
1,55
3,19
9 -
6,30
7,20
5 -
526,
372 -
12,7
90
6,27
9
236,
409 -
512,
796 -
9,14
8,77
1
6,27
9
1,55
3,19
96,
307,
205
526,
372
19,0
6923
6,40
951
2,79
69,
155,
050
Tran
sact
ions
elim
inat
ed o
n co
nsol
idat
ion
338,
510
9,49
3,56
0
Notes to the financial statements 111
SUCCESS WITH INTEGRITY
(Uni
t: in
thou
sand
Bah
t)
Con
solid
ated
fina
ncia
l st
atem
ents
Not
eLa
ndBu
ildin
g an
d im
prov
emen
ts
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Dep
reci
atio
n fo
r th
e ye
ar
2010
Elim
inat
ed
575,
618
13,0
24
588,
642
2011
Elim
inat
ed
544,
891
13,6
39
558,
530
Fina
nce
cost
s ca
pita
lised
Fina
nce
cost
s ca
pita
lised
dur
ing
2010
Rate
s of
inte
rest
cap
italis
ed d
urin
g 20
10
(M
LR-1
.50
% p
er a
nnum
)
Fina
nce
cost
s ca
pita
lised
dur
ing
2011
Rate
s of
inte
rest
cap
italis
ed d
urin
g 20
11
(M
LR-1
.50
% p
er a
nnum
)
32 32
- -
- -
- -
- -
- -
4,26
4
3,41
3
4,26
4
3,41
3
The
gros
s am
ount
of t
he G
roup
’s fu
lly d
epre
ciat
ed p
lant
and
equ
ipm
ent t
hat w
as s
till i
n us
e as
at 3
1 D
ecem
ber 2
011
amou
nted
to B
aht 1
,106
milli
on (
2010
: Bah
t 924
.7 m
illion
).
Notes to the financial statements112
(Uni
t: in
thou
sand
Bah
t)
Sepa
rate
fina
ncia
l st
atem
ents
Not
eLa
ndBu
ildin
g an
d im
prov
emen
ts
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Cos
t
At 1
Jan
uary
201
0
Addi
tions
Adju
stm
ents
Tran
sfer
s
Dis
posa
ls
1,23
7,56
3 - - -
(3,0
13)
5,68
3,18
3
36,0
67
(904
)
63,7
12
(6,2
34)
953,
878
22,3
18
(287
)
7,03
0
(16,
841)
15,2
49
1,45
0 - -
(1,2
46)
111,
648
2,72
0 -
35
-
63,7
12
80,8
09
(5,2
15)
(70,
804) -
8,06
5,23
3
143,
364
(6,4
06)
(27)
(27,
334)
At 3
1 D
ecem
ber
2010
and
1
Janu
ary
2011
Addi
tions
Adju
stm
ents
Tran
sfer
s
Dis
posa
ls
1,23
4,55
0 - - - -
5,77
5,82
4
7,69
5 -
675
(1,0
47,2
25)
966,
098
18,3
54
-
646
(22,
543)
15,4
53
7,50
7 - -
(3,9
13)
114,
403
660 - -
(668
)
68,5
02
414,
261
(3,1
53)
(1,3
21) -
8,17
4,83
0
448,
477
(3,1
53) -
(1,0
74,3
49)
At 3
1 D
ecem
ber
2011
1,23
4,55
04,
736,
969
962,
555
19,0
4711
4,39
547
8,28
97,
545,
805
Dep
reci
atio
n
At 1
Jan
uary
201
0
Dep
reci
atio
n ch
arge
for
the
year
Adju
stm
ents
Dis
posa
ls
- - - -
1,15
3,24
6
208,
943
(12)
(5,0
64)
444,
701
136,
320 -
(14,
928)
7,66
9
2,29
9 -
(1,2
46)
- - - -
- - - -
1,60
5,61
6
347,
562
(12)
(21,
238)
At 3
1 D
ecem
ber
2010
and
1
Janu
ary
2011
Dep
reci
atio
n ch
arge
for
the
yea
r
Dis
posa
ls
- - -
1,35
7,11
3
167,
220
(380
,157
)
566,
093
134,
296
(18,
664)
8,72
2
3,50
0
(3,9
07)
- - -
- - -
1,93
1,92
8
305,
016
(402
,728
)
At 3
1 D
ecem
ber
2011
-1,
144,
176
681,
725
8,31
5-
-1,
834,
216
Notes to the financial statements 113
SUCCESS WITH INTEGRITY
(Uni
t: in
thou
sand
Bah
t)
Sepa
rate
fina
ncia
l st
atem
ents
Not
eLa
ndBu
ildin
g an
d im
prov
emen
ts
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Cos
t
At 1
Jan
uary
201
0
Addi
tions
Adju
stm
ents
Tran
sfer
s
Dis
posa
ls
1,23
7,56
3 - - -
(3,0
13)
5,68
3,18
3
36,0
67
(904
)
63,7
12
(6,2
34)
953,
878
22,3
18
(287
)
7,03
0
(16,
841)
15,2
49
1,45
0 - -
(1,2
46)
111,
648
2,72
0 -
35
-
63,7
12
80,8
09
(5,2
15)
(70,
804) -
8,06
5,23
3
143,
364
(6,4
06)
(27)
(27,
334)
At 3
1 D
ecem
ber
2010
and
1
Janu
ary
2011
Addi
tions
Adju
stm
ents
Tran
sfer
s
Dis
posa
ls
1,23
4,55
0 - - - -
5,77
5,82
4
7,69
5 -
675
(1,0
47,2
25)
966,
098
18,3
54
-
646
(22,
543)
15,4
53
7,50
7 - -
(3,9
13)
114,
403
660 - -
(668
)
68,5
02
414,
261
(3,1
53)
(1,3
21) -
8,17
4,83
0
448,
477
(3,1
53) -
(1,0
74,3
49)
At 3
1 D
ecem
ber
2011
1,23
4,55
04,
736,
969
962,
555
19,0
4711
4,39
547
8,28
97,
545,
805
Dep
reci
atio
n
At 1
Jan
uary
201
0
Dep
reci
atio
n ch
arge
for
the
year
Adju
stm
ents
Dis
posa
ls
- - - -
1,15
3,24
6
208,
943
(12)
(5,0
64)
444,
701
136,
320 -
(14,
928)
7,66
9
2,29
9 -
(1,2
46)
- - - -
- - - -
1,60
5,61
6
347,
562
(12)
(21,
238)
At 3
1 D
ecem
ber
2010
and
1
Janu
ary
2011
Dep
reci
atio
n ch
arge
for
the
yea
r
Dis
posa
ls
- - -
1,35
7,11
3
167,
220
(380
,157
)
566,
093
134,
296
(18,
664)
8,72
2
3,50
0
(3,9
07)
- - -
- - -
1,93
1,92
8
305,
016
(402
,728
)
At 3
1 D
ecem
ber
2011
-1,
144,
176
681,
725
8,31
5-
-1,
834,
216
(Uni
t: in
thou
sand
Bah
t)
Sepa
rate
fina
ncia
l st
atem
ents
Land
Build
ing
and
impr
ovem
ents
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Net
boo
k va
lue
At 1
Jan
uary
201
0
Ow
ned
asse
ts
Asse
ts u
nder
fina
nce
leas
es
1,23
7,56
3 -
4,52
9,93
7 -
509,
127 50
7,58
0 -
111,
648 -
63,7
12
-
6,45
9,56
7 50
1,23
7,56
34,
529,
937
509,
177
7,58
011
1,64
863
,712
6,45
9,61
7
At 3
1 D
ecem
ber
2010
and
1
Janu
ary
2011
Ow
ned
asse
ts
Asse
ts u
nder
fina
nce
leas
es
1,23
4,55
0 -
4,41
8,71
1 -
400,
005 -
5,47
5
1,25
6
114,
403 -
68,5
02
-
6,24
1,64
6
1,25
6
1,23
4,55
04,
418,
711
400,
005
6,73
111
4,40
368
,502
6,24
2,90
2
At 3
1 D
ecem
ber
2011
Ow
ned
asse
ts
Asse
ts u
nder
fina
nce
leas
es
1,23
4,55
0 -
3,59
2,79
3 -
280,
830
-
4,45
3
6,27
9
114,
395 -
478,
289 -
5,70
5,31
0
6,27
9
1,23
4,55
03,
592,
793
280,
830
10,7
3211
4,39
547
8,28
95,
711,
589
Notes to the financial statements114
(Uni
t: in
thou
sand
Bah
t)
Sepa
rate
fina
ncia
l st
atem
ents
Not
eLa
ndBu
ildin
g an
d im
prov
emen
ts
Furn
iture
, fix
ture
s an
d eq
uipm
ent
Vehi
cles
Ope
ratin
g eq
uipm
ent
Asse
ts
unde
r co
nstru
ctio
nTo
tal
Fina
nce
cost
s ca
pita
lised
Fina
nce
cost
s ca
pita
lised
dur
ing
2010
Rate
s of
inte
rest
cap
italis
ed d
urin
g 20
10
(M
LR -
1.5
0 %
per
ann
um)
32-
--
--
1,79
91,
799
Fina
nce
cost
s ca
pita
lised
dur
ing
2011
Rate
s of
inte
rest
cap
italis
ed d
urin
g 20
11
(M
LR -
1.5
0 %
per
ann
um)
32-
--
--
3,41
33,
413
The
gros
s am
ount
of
the
Com
pany
’s f
ully
dep
reci
ated
pla
nt a
nd e
quip
men
t th
at w
as s
till i
n us
e as
at
31 D
ecem
ber
2011
am
ount
ed t
o Ba
ht
431
milli
on (
2010
: Bah
t 411
.7 m
illion
).
Notes to the financial statements 115
SUCCESS WITH INTEGRITY
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Land cost
Development expense
95,382
8,855
95,382
8,825
-
-
-
-
Total 104,237 104,207 - -
(Unit: in thousand Baht)
Consolidated financial statements
Leasehold rights for land
Leasehold rights for buildings
Total
Cost
At 1 January 2010
Additions
Disposals
Adjustment
1,021,781
150,000
-
5,237
1,210,828
3,279
(768)
(1,483)
2,232,609
153,279
(768)
3,754
At 31 December 2010 and 1 January 2011
Additions
Disposals
1,177,018
-
(191,540)
1,211,856
700
-
2,388,874
700
(191,540)
At 31 December 2011 985,478 1,212,556 2,198,034
Amortisation
At 1 January 2010
Amortisation for the year
Disposal
Adjustment
301,833
26,875
-
1,998
212,858
47,884
(768)
-
514,691
74,759
(768)
1,998
At 31 December 2010 and 1 January 2011
Amortisation for the year
Disposal
330,706
19,887
(69,671)
259,974
48,285
-
590,680
68,172
(69,671)
At 31 December 2011 280,922 308,259 589,181
14. Land held for development
15. Leasehold rights for land and buildings
Notes to the financial statements116
(Unit: in thousand Baht)
Separate financial statements
Leasehold rights for land
Leasehold rights for buildings
Total
Cost
At 1 January 2010
Additions
845,645
150,000
278,481
-
1,124,126
150,000
At 31 December 2010 and 1 January 2011
Disposal
995,645
(191,540)
278,481
-
1,274,126
(191,540)
31 December 2011 804,105 278,481 1,082,586
(Unit: in thousand Baht)
Consolidated financial statements
Leasehold rights for land
Leasehold rights for buildings
Total
Net book value
At 1 January 2010
Eliminated
719,948 997,970 1,717,918
(4,992)
1,712,926
At 31 December 2010 and 1 January 2011
Eliminated
846,312 951,882 1,798,194
(4,542)
1,793,652
At 31 December 2011
Eliminated
704,556 904,297 1,608,853
(4,091)
1,604,762
Notes to the financial statements 117
SUCCESS WITH INTEGRITY
(Unit: in thousand Baht)
Separate financial statements
Leasehold rights for land
Leasehold rights for buildings
Total
Amortisation
At 1 January 2010
Amortisation for the year
210,689
22,776
56,299
20,366
266,988
43,142
At 31 December 2010 and 1 January 2011
Amortisation for the year
Disposal
233,465
15,612
(69,671)
76,665
20,366
-
310,130
35,978
(69,671)
31 December 2011 179,406 97,031 276,437
Net book value
At 1 January 2010
At 31 December 2010 and 1 January 2011
At 31 December 2011
634,956
762,180
624,699
222,182
201,816
181,450
857,138
963,996
806,149
(Unit: in thousand Baht)
Consolidated
financial statements
Separate
financial statements
2011 2010 2011 2010
Amortisation for the year
Less Capitalised amortisation
Eliminated
68,172
-
(450)
74,759
(381)
(450)
35,978
-
-
43,142
-
-
Amortisation included in statements of income 67,722 73,928 35,978 43,142
16. Sale of Ploenchit Center to property fund
On 1 April 2011, the Company sold and transferred Ploenchit Center Building including fixtures and
equipments and leasehold right for land where the building is located with remaining lease of approximately
13 years 10 months to Prime Office Leasehold Property Fund at the price of Baht 1,423.1 million. Costs of
leasehold right for land, building, equipment, net other assets and selling expenses amounting to Baht 758.8
million. The net profit is included in the statement of comprehensive income of Baht 664.3 million.
Notes to the financial statements118
(Unit: in thousand Baht)
Computer software
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Cost
At 1 January
Additions
Transfers
Disposals
Adjustments
150,775
3,731
1,733
(8,946)
-
143,189
5,115
3,322
(44)
(807)
102,680
2,389
-
(8,946)
-
99,233
3,556
25
(44)
(90)
At 31 December 147,293 150,775 96,123 102,680
Amortisation
At 1 January
Amortisation charge for the year
Disposals
89,941
19,259
(8,390)
69,049
20,936
(44)
62,935
11,617
(8,390)
48,947
14,032
(44)
At 31 December 100,810 89,941 66,162 62,935
Net book value
At 1 January
At 31 December
60,834
46,483
74,140
60,834
39,745
29,961
50,286
39,745
17. Intangible assets
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Advance payment
Withholding tax deducted at source
59,194
34,866
45,647
29,542
-
33,903
-
28,656
Total 94,060 75,189 33,903 28,656
18. Other non-current assets
Notes to the financial statements 119
SUCCESS WITH INTEGRITY
(Unit: in thousand Baht)
Note
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Current
Short-term loans from financial institutions
secured
Current portion of long-term loans from
financial institutions secured
Current portion of hire purchase payable
76,100
695,250
1,718
195,700
573,750
819
76,100
515,250
1,718
195,700
403,750
819
773,068 770,269 593,068 600,269
Non-currentLong-term loans from financial
institutions secured
Long-term loans from related parties
unsecured
Hire purchase payable
5
6,727,667
-
3,458
7,829,517
-
621
4,357,900
45,438
3,458
5,314,750
38,861
621
6,731,125 7,830,138 4,406,796 5,354,232
Total 7,504,193 8,600,407 4,999,864 5,954,501
19. Interest - Bearing liabilities
The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities and hire purchase payable, as at 31 December were as follows:
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Within one year
After one year but within five years
After five years
771,350
4,323,000
2,404,667
769,450
4,192,250
3,637,267
591,350
3,255,938
1,147,400
599,450
3,151,111
2,202,500
Total 7,499,017 8,598,967 4,994,688 5,953,061
Notes to the financial statements120
Under the loan agreements, the Group has to comply with certain covenants and restrictions e.g. the percentage of shareholding of the major shareholders, changes in directors, guarantees to loans of aval to promissory notes of any persons or any companies, dividend payments, merger or consolidation with any companies, and maintenance of certain financial ratios.
During the year 2010, the Company and certain subsidiaries were approved by various financial institutions to extend the due date of principal loan repayment which fall due in 2010 to commence in 2011. In addition, the Company and certain subsidiaries were approved by those financial institutions to extend the principal loan repayment period for another 1 - 6 years.
Secured interest-bearing liabilities as at 31 December were secured on the following assets:
As at 31 December 2011 the Group and the Company had unutilised credit facilities of totalling Baht
1,011.3 million and Baht 900 million, respectively (2010: Baht 441.3 million and Baht 250 million, respectively).
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Property, plant and equipment - net
Leasehold rights for land - net
7,886,399
686,942
8,611,172
677,546
4,891,501
624,698
5,541,237
612,180
Total 8,573,341 9,288,718 5,516,199 6,153,417
20. Trade accounts payable
Trade accounts payable of the Group as at 31 December 2011 and 2010 were denominated entirely in Thai Baht.
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
Note 2011 2010 2011 2010
Related parties
Other parties
5 -
175,335
-
211,897
959
80,771
287
89,796
Total 175,335 211,897 81,730 90,083
Notes to the financial statements 121
SUCCESS WITH INTEGRITY
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Management, royalty, marketing
and other fees payable - hotel business
Retention
Advances from customers
Value added tax payable
Accrued expenses
Income tax payable
Deposits received - hotel business
Others
19,098
58,619
18,973
11,547
124,350
42,506
87,330
53,245
25,358
65,957
23,709
14,852
100,542
9,468
56,656
50,518
9,230
15,350
4,477
5,565
70,228
-
36,374
29,269
10,099
13,457
6,775
8,160
58,569
-
24,232
30,083
Total 415,668 347,060 170,493 151,375
21. Other current liabilities
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Leasehold rights - building,
service and equipment - other parties
Less accumulated amortisation
28,000
(1,518)
56,720
(41,399)
28,000
(1,518)
56,720
(41,399)
Net book value 26,482 15,321 26,482 15,321
Amortisation included in statements of income
for the year 1,518 2,814 1,518 2,814
22. Deferred income
Notes to the financial statements122
(Unit: in thousand Baht)
Consolidated financial statements Separate financial statements
31 December 2011 31 December 2010 31 December 2011 31 December 2010
Statement of financial position
obligations for:
Long-term employee benefits 43,272 - 17,543 -
43,272 - 17,543 -
(Unit: in thousand Baht)
For the years ended 31 DecemberConsolidated financial statements Separate financial statements
2011 2010 2011 2010
Statement of comprehensive income charge:
Long-term employee benefits
6,754 - 3,404 -
6,754 - 3,404 -
The Group adopted TAS 19 - Employee Benefits with effect from 1 January 2011; the effect on the financial statements is discussed in note 3 (d).
The Group recorded the entire amount of the transitional obligation as at 1 January 2011, totaling Baht 39 million for the Group and Baht 16 million for the Company, as an adjustment to retained earnings as at 1 January 2011.
Long-term employee benefits
The Group operate defined benefit plans based on the requirement of Thai Labour Protection Act B.E. 2541 (1998) to provide retirement benefits to employees based on pensionable remuneration and length of service.
Movement in the present value of the defined benefit obligations: (Unit: in thousand Baht)
For the years ended 31 DecemberConsolidated financial statements Separate financial statements
2011 2010 2011 2010
Defined benefit obligations at 1 January
Benefits paid
Current service costs and interest
Transferred to subsidiary
38,774
(2,256)
6,754
-
-
-
-
-
16,279
(1,832)
3,404
(308)
-
-
-
-
Employee benefit obligations at 31 December 43,272 - 17,543 -
23. Employee benef it obligations
Notes to the financial statements 123
SUCCESS WITH INTEGRITY
(Unit: in thousand Baht)
For the years ended 31 DecemberConsolidated financial statements Separate financial statements
2011 2010 2011 2010
Cost of hotel operations and cost of rental
of units in buildings and service
Selling expenses
Administrative expenses
(3,044)
(410)
(3,300)
-
-
-
(1,508)
(73)
(1,823)
-
-
-
Total (6,754) - (3,404) -
The expense is recognised in the following line items in the statement of comprehensive income:
(Unit: %)
Consolidated/Separate financial statements
31 December 2011
Discount rate
Future salary increases
4.7
3.5 – 5.0
Principal actuarial assumptions at the reporting date:
Assumptions regarding future mortality are based on published statistics and mortality tables.
(Unit: thousand shares / in thousand Baht)
Par value per share (in Baht)
2011 2010
Number Amount Number Amount
AuthorisedAt 1 January
ordinary shares
increase in shares capital
1
1
2,244,779
260,221
2,244,779
260,221
2,244,779
-
2,244,779
-
At 31 December
ordinary shares 1 2,505,000 2,505,000 2,244,779 2,244,779
Issued and paid-up
At 1 January
ordinary shares 1 2,244,779 2,244,779 2,244,779 2,244,779
At 31 December
ordinary shares 1 2,244,779 2,244,779 2,244,779 2,244,779
24. Share capital
Notes to the financial statements124
At the annual general meeting of the shareholders of the Company held on 26 April 2011, the shareholders approved the following matters;
(a) The issuance of new warrants to existing shareholders not exceeding 224,477,900 units and the issuance of ordinary shares to reserve for the conversion of the warrants.
(b) The issuance and offering of 35,743,099 ordinary shares to employees of the Group.
(c) To increase the authorised share capital by issuing ordinary shares of not exceeding 260,220,999 shares at a par value of Baht 1 each to reserve for the conversion of warrants and for the rights to purchase ordinary shares, in the Company by the employees of the Group.
(d) Dividend omission for the year 2010 as a result of loss from operation for the year 2010 of the Group.
Increase in authorised shares capital
The Company registered increased authorised share capital of Baht 260,220,999 with the Ministry of Commerce on 6 May 2011.
Employee Stock Option Plan (ESOP)
During the year 2011, the Company issued stock option plan of 32,093,099 share options for the Group’s employees. The period of the plan shall not exceed 5 years from grant date on 10 June 2011. The offering shall be completed within 30 December 2015.
The Company has recorded the approximate fair value of the rights granted through the plan based on the binomial model. The fair value was separately calculated into 4 vesting periods as follows:
No. Exercise period Number of exercised share Exercise price
1
2
3
4
1 January 2012 - 30 December 2015
1 January 2013 - 30 December 2015
1 January 2014 - 30 December 2015
1 January 2015 - 30 December 2015
10% of total allocated share
20% of total allocated share
30% of total allocated share
40% of total allocated share
2.90
3.00
3.10
3.20
Based on the assumptions, the share price of Baht 2.44 at grant date, volatility rate of 24.7%, 5-year term of plan and risk free interest rate of 3.75%, the average fair value of the stock options among the 4 periods was from Baht 0.42 to Baht 0.51 per unit.
The Company recorded the fair value of Baht 4.92 million over the period that the employees become entitled to the options in the statements of comprehensive income for the year ended 31 December 2011 and in equity as at 31 December 2011.
Notes to the financial statements 125
SUCCESS WITH INTEGRITY
25. Additional paid-in capital and reserve
Share premium
Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription
monies received in excess of the par value of the shares issued to a reserve account (“share premium”).
Share premium is not available for dividend distribution.
Reserves comprise:
Appropriations of profit and/or retained earnings
Legal reserve
Section 116 of the Public Companies Act B.E. 2535 Section 116 requires that a public company shall
allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve
account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised
capital. The legal reserve is not available for dividend distribution.
Other components of equity
Currency translation differences Fair value changes in available-for-sale investments
The fair value changes in available-for-sale investments account within equity comprises the cumulative
net change in the fair value of available-for-sale investments until the investments are derecognised or
impaired.
26. Segment reporting
Segment information is presented in respect of the Group’s business and geographic segments. The
primary format, business segments, is based on the Group’s management and internal reporting structure.
Inter-segment pricing is determined on mutually agreed terms.
Warrant
During the year 2011, the Company issued warrants to existing shareholders, with details as follows:
Number of warrants 224,477,528 units Conversion ratio The existing shareholders at the ratio of 10 ordinary shares per 1 unit of warrant Exercise price Baht 2.80 Term of warrant 2 years and 7 months (18 May 2011 - 17 December 2013)
Notes to the financial statements126
Segment results, assets and liabilities include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items mainly comprise interest or dividend-earning
assets and revenue, interest-bearing loans, borrowings and expenses, and corporate assets and expenses.
Business segments
The Group comprises the following main business segments:
Segment 1 Building rental business
Segment 2 Hotel business
Geographic segments
Management considers that the Group operates in a single geographical area, namely in Thailand, and
has, therefore, only one major geographical segment.
Business segments results in the consolidated financial statements for the years ended 31 December
2011 and 2010 were as follows:
(Unit: in million Baht)
Building rental business
Hotelbusiness Eliminations Total
2011 2010 2011 2010 2011 2010 2011 2010
Revenues from external
Inter - segment revenues
219
21
391
20
3,536
-
2,930
-
-
(21)
-
(20)
3,755
-
3,321
-
Total revenues 240 411 3,536 2,930 (21) (20) 3,755 3,321
Segment profit
Unallocated income and expenses:
Other income
Depreciation and amortisation
Selling expenses
Administrative expenses
Finance costs
Income tax
Net profit attribute to
non-controlling interests
91 138 280 41 (13) (13) 358
732
(6)
(3)
(91)
(407)
(53)
(39)
166
43
(7)
(1)
(80)
(361)
(20)
(15)
Profit (loss) for the year 491 (275)
Notes to the financial statements 127
SUCCESS WITH INTEGRITY
(Unit: in million Baht)
Building rental business
Hotelbusiness
Unallocated assets
Eliminations Total
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Inventories Property, plant and equipment Leasehold rights for land and buildings Land held for development Other assets
-
21
181
-
712
326
53
9,103
1,494
55
9,070
1,547
-
68
-
18
55
-
-
302
(71)
-
315
(79)
53
9,494
1,604104983
73
10,152
1,794104826
Total assets 12,238 12,949
Business segment financial position in the consolidated financial statements as at 31 December 2011 and 2010 were as follows:
(Unit: in million Baht)
Building rental business
Hotelbusiness
Unallocated assets
Eliminations Total
2011 2010 2011 2010 2011 2010 2011 2010 2011 2010
Interest-bearing borrowings Account payable for land leasehold rights Other liabilities
-
-
475
180
8,631
180
8,976
180
307
-
268
-
(1,439)
-
(1,120)
-
7,499
180789
8,599
360717
Total liabilities 8,468 9,676
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Income from property tax Gain from sale of fixed assets Others
2,789549
55,271
7,834286
29,993
2,708253
51,800
7,704201
27,905
Total 58,609 38,113 54,761 35,810
27. Other income
Notes to the financial statements128
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Employee benefit expenses Management and other fee Repair and maintenance expenses Others
306,825173,061
70,838260,082
269,640168,299
39,358224,785
194,69999,61527,83193,755
183,82995,20121,32874,954
Total 810,806 702,082 415,900 375,312
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
ManagementSalaries, wages and other benefits Employee stock option plan
38,2222,584
35,154-
36,6472,584
33,354-
40,806 35,154 39,231 33,354
Other employeesSalaries, wages and other benefits Employee stock option plan
926,1902,337
779,388-
444,3112,337
387,693-
928,527 779,388 446,648 387,693
Total 969,333 814,542 485,879 421,047
29. Administrative expenses
30. Employee benef it expenses
28. Selling expenses (Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Marketing expenses Employee benefit expenses
164,60586,138
155,61158,471
112,40631,022
101,79816,643
Total 250,743 214,082 143,428 118,441
Notes to the financial statements 129
SUCCESS WITH INTEGRITY
(Unit: in thousand Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Salaries and wages and other employee benefits Costs of food and beverage Rental expenses
969,333556,040
44,150
814,542462,068
47,037
485,879257,434
20,143
421,047231,104
31,326
(Unit: in thousand Baht)
Note
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Interest expense: Related parties Financial institutions Amortisation of transaction costs capitalised
5 -410,095
-
-363,477
1,549
3,134267,765
-
1,874245,080
31
410,095 365,026 270,899 246,985
Less: amounts included in the cost of qualifying assets: - capitalised as cost of assets under construction 13 (3,413) (4,264) (3,413) (1,800)
Net 406,682 360,762 267,486 245,185
32. Finance costs
Defined contribution plans
The defined contribution plans comprise provident funds established by the Group for its employees. Membership to the funds is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 3 % to 10 % of their basic salaries and by the Group at rates ranging from 3 % to 10 % of the employees’ basic salaries. The provident funds are registered with the Ministry of Finance as juristic entities
and are managed by a licensed Fund Managers.
31. Expenses by nature
The financial statement includes an analysis of expenses by function. Expenses by nature disclosed in
accordance with the requirements of various TFRS were as follow:
Notes to the financial statements130
(Unit: in thousand Baht / thousand shares)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Profit (loss) attributable to ordinary
shareholders of the Company (basic) 491,325 (275,017) 708,757 15,342
Weighted average number of ordinary shares
outstanding (basic) 2,244,779 2,244,779 2,244,779 2,244,779
Earnings (loss) per share (basic) (in Baht) 0.22 (0.12) 0.32 0.01
33. Income tax expense
Income tax reduction - current
Royal Decree No. 387 B.E. 2544 dated 5 September 2001 grants companies listed on the Stock Exchange of Thailand a reduction in the corporate income tax rate from 30% to 25% for taxable profit not exceeding Baht 300 million for the five consecutive accounting periods beginning on or after enactment. Listed companies that received income tax reduction under this Royal Decree are also eligible to continue the period of tax reduction under Royal Decree No. 475 but not beyond the 2010 accounting period ending on or after 31 December 2010.
The current tax expense in the consolidated and separate statements of comprehensive income is not equal the amount determined by applying the Thai corporation tax rate to the accounting profit for the year principally because:
(a) unutilised tax losses brought forward from previous years have been utilised during the year to set-off against the current year’s tax charge.
(b) the different treatment for accounting and taxation purposes of certain items of income and expenses.
(c) losses suffered by certain subsidiaries cannot be set-off against the profits of other subsidiaries for tax purposes.
34. Earnings (loss) per share
Basic earnings (loss) per share
The calculations of basic earnings (loss) per share for the years ended 31 December 2011 and 2010 were based on the profit (loss) for the year attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding during the years as follows:
Notes to the financial statements 131
SUCCESS WITH INTEGRITY
35. Dividends
At the annual general meeting of the shareholders of a subsidiary held on 5 April 2010, the shareholders approved the appropriation of dividends of Baht 0.30 per share, amounting to Baht 23.9 million. The dividend was paid to shareholders on 4 May 2010
(Unit: in thousand Baht / thousand shares)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Profit attributable to ordinary
shareholders of the Company (basic)
Effect of warrant
Effect of ESOP
491,325
-
-
-
-
-
708,757
-
-
-
-
-
Profit attributable to ordinary shareholders of
the Company (diluted) 491,325 - 708,757 -
Weighted average number of ordinary
shares outstanding (basic)
Effect of warrant
Effect of ESOP
2,244,779
-
-
-
-
-
2,244,779
-
-
-
-
-
Weighted average number of ordinary
shares outstanding (diluted) 2,244,779 - 2,244,779 -
Loss per share (diluted) (in Baht) 0.22 - 0.32 -
Diluted earnings per share
The calculations of diluted earnings per share for the year ended 31 December 2011 were based on the profit for the year attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding during the periods after adjusting for the effects of all dilutive potential ordinary shares as follows:
Notes to the financial statements132
(Unit: % per annum) (Unit: in thousand Baht)
Separate financial statements
Effective interestrate
Within1 year
After 1 year but within 5 years
After5 years
Total
2011Loans receivable - related parties 5.48 - 1,393,545 - 1,393,545
2010Loans receivable - related parties 4.53 - 1,080,774 - 1,080,774
36. Financial instruments
Financial risk management policies
The Group is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The Group does not hold or issue derivative financial instruments for speculative or trading purposes.
Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved.
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Group defines as result from operating activities divided by total shareholders’ equity, excluding non-controlling interests and also monitors the level of dividends to ordinary shareholders.
Interest rate risk
Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s operations and its cash flows because loan interest rates are mainly floating or fixed. The Group is primarily exposed to interest rate risk from its borrowings (Note 19). The Group mitigates this risk by ensuring that the majority of its borrowings are close to the market rate.
The effective interest rates of loans receivable as at 31 December and the periods in which the loans receivable mature or re-price were as follows:
Notes to the financial statements 133
SUCCESS WITH INTEGRITY
(Unit: % per annum) (Unit: in thousand Baht)
Consolidated financial statements
Effective interest rate
Within1 year
After 1 year but within 5 years
After5 years
Total
2011Loans payable - financial institutions
5, MLR-1.50, MLR- 2.00, 6-month fixed deposit rate + 2.00 771,350 5,501,500 1,226,167 7,499,017
2010Loans payable - financial institutions
5, MLR-1.50, MLR- 2.00, 6-month fixed deposit rate + 2.00 769,450 4,192,250 3,637,267 8,598,967
(Unit: % per annum) (Unit: in thousand Baht)
Separate financial statements
Effective interest rate
Within1 year
After 1 year but within 5 years
After5 years
Total
2011Loans payable - related party Loans payable - financial institutions
5.48 5, MLR-1.50, MLR- 2.00, 6-month fixed deposit rate + 2.00
-
591,350
45,438
4,116,500
-
241,400
45,438
4,949,250
Total 591,350 4,161,938 241,400 4,994,688
2010Loans payable - related party Loans payable - financial institutions
4.53 5, MLR-1.50, MLR- 2.00, 6-month fixed deposit rate + 2.00
-
599,450
38,861
3,112,250
-
2,202,500
38,861
5,914,200
Total 599,450 3,151,111 2,202,500 5,953,061
The effective interest rates of interest-bearing financial liabilities as at 31 December and the periods in which those liabilities mature or re-price were as follows:
Notes to the financial statements134
During the year 2011, the Company entered into interest rate swap contracts with a local financial institution for long-term loans in Baht with principal amounts of totaling Baht 2,512 million, which will swap interest at float interest rates to fixed interest rates as stipulated in the contracts. The terms of each contract are approximately 4 years, expiring on 31 December 2014.
Interest rate swap contracts protect the Group from movements in interest rates. Any differential to be paid or received on an interest rate swap contract is recognised as a component of finance costs over the period of the contract.
The fair values of interest rate swap contracts as at 31 December 2011 and 2010 are as follows:
Foreign currency risk
The Group operates mainly in Baht currency. Accordingly, the Company does not have material foreign currency risk.
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. However, due to the large number of parties comprising the Group’s customer base, Management does not anticipate material losses from its debt collection.
Liquidity risk
The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.
Determination of fair values
For financial assets and liabilities which have short-term maturity and long-term loans which carrying interest approximate to the market rate, their carrying amounts in the balance sheet approximate their fair value. The Company and its subsidiaries do not consider the fair value of financial assets and liabilities which have fixed interest rate over 1 year which is not significant when compare to the total loan amount.
(Unit: in thousand Baht)
Consolidated and Separate financial statements
Fair values
31 December 2011 31 December 2010
Interest rate swap contracts 15,656 16,479
Notes to the financial statements 135
SUCCESS WITH INTEGRITY
A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument.
37. Changes in estimates
Starting from 1 January 2010, the Company and certain subsidiaries have changed estimated useful lives of their building and building improvements from 30 years to 40 years. The effect of the change on the financial statements of the Group and the Company for the year ended 2010 was to decrease loss for the period by Baht 20.09 million. (Separate financial statements: increase profit Baht 6.71 million) respectively, and loss per share decreased by Baht 0.008 per share (Separate financial statements: earnings per share
increased by Baht 0.002 per share).
38. Commitments with non-related parties(Unit: in million Baht)
Consolidated financial statements
Separate financial statements
2011 2010 2011 2010
Capital commitmentsContracted but not provided 603.1 305.1 541.8 248.2
Operating lease commitmentsWithin one year After one year but within five years After five years
16.312.9
0.3
33.82.8
-
7.94.4
-
13.20.9
-
Total 29.5 36.6 12.3 14.1
Long-term lease commitmentsWithin one year After one year but within five years After five years
32.6155.8
1,853.8
46.5213.9
2,669.5
12.974.1
1,567.0
27.3135.5
1,852.9
Total 2,042.2 2,929.9 1,654.0 2,015.7
Other commitmentsGuarantee for bank credit facilities Bank guarantees
75023.2
75030.1
75014
75021.5
Total 773.2 780.1 764.0 771.5
Notes to the financial statements136
Long-term agreements
The Company and its subsidiaries have entered into several long-term lease agreements and several service agreements with third parties, local companies, overseas companies, and Government organizations as follows:
Long-term lease agreements
Erawan Rajdamri Company Limited entered into a building lease agreement with a Government organisation covering a term of thirty years, commencing 1 July 1987, whereby the subsidiary has to pay monthly rental at the rate for each year as specified in the agreement. However, on 9 January 2006 the subsidiary entered into the Building Renovation and Land and Renovated Building Lease Agreement. Under the terms of this agreement, the subsidiary is to pay remuneration of Baht 70.0 million, which had already been paid to the lessor, and monthly rental at the rate stipulated for each year, for a term of thirty years commencing 1 January 2008.
Erawan Hotel Public Company Limited has an agreement with a related company to lease land for a term of thirty years up to the year 2021, renewable for another twenty years. The subsidiary is to pay land rental charges of Baht 14.1 million per annum (2010: 10.9 million per annum), and the land rental charge may be adjusted every ten years. Upon the expiration of the agreement, the ownership of buildings and building improvements on the leased land, including equipment, furniture and tools necessary for hotel operations, will be transferred to the lessor.
Erawan Ploenchit Company Limited entered into two lease agreements for the leasehold rights to land on which its hotel building and office building are situated from the lessor. Ownership of all structures constructed on the leased land, including that of equipment, furniture and tools which are vital to the project’s operation, will be transferred to the lessor upon the termination of the agreements. The subsidiary is to pay land rental charges of Baht 24.3 million (for the year 2005 - 2014) per annum and the land rental charge may be adjusted every ten years. The term of the leases is a period of 30 years up to the year 2025. Under the terms of the lease agreements, the subsidiary shall assume obligation to pay the following leasehold rights and deposits for rental.
1. Leasehold rights amounting to Baht 360.0 million. The subsidiary will pay this amount within the 30th
year of the lease and is recorded as part of “Accounts payable for land leasehold rights” in the balance sheets.
2. Deposits for rental amounting to Baht 180.0 million. The subsidiary has made the full payment of the deposits, which will be refunded in the 30th year and are presented as part of “Deposits for lease of land, building and equipment” in the balance sheets.
As at 24 December 2002, Erawan Ploenchit Company Limited entered into an agreement to lease part of the land on which the hotel building is located for extend the period of agreement which allows the lessee to extend the term of the lease upon expiration of the agreement. The subsidiary was granted an extension of the term of the lease by 20 years as from 24 January 2025 to 23 January 2045 and is to pay rental of Baht 216.1 million, which had already been paid to the lessor.
Notes to the financial statements 137
SUCCESS WITH INTEGRITY
In addition to the above mentioned rental, the subsidiary also has a commitment to make the following rental payments:
Rental from 2025 to 2034 at the greater of Baht 44.7 million per annum or an amount determined based on an average of the consumer price index of Thailand.
Rental from 2035 to 2045 at the greater of Baht 89.4 million per annum or an amount determined based on an average of the consumer price index of Thailand.
On 1 January 2008, the subsidiary has transferred all commitments according to these agreements to the Company.
On 1 April 2002, Erawan Ploenchit Company Limited entered into a land lease agreement with third party for periods of 22 years and 10 months up to the year 2025. Under the agreement, the subsidiary agrees to pay rental totaling Baht 32.8 million, in three installments. The subsidiary had already paid the first and second installments of Baht 23.2 million and the remaining Baht 9.6 million will be repaid in 2025. In addition, the subsidiary is to pay a land rental charge of Baht 0.8 million per annum for the first three years, and such charge is then to be adjusted every ten years. Upon the expiration of the agreement, the ownership of all structures erected on the leased land, together with equipment, furniture and tools which are vital to the operation, are to be transferred to the lessor. On 1 January 2008, the subsidiary has transferred all commitments according to this agreement to the Company. On 1 April 2011, the Company sold and transferred Ploenchit Center Building to Prime Office Leasehold Property Fund.
Erawan Chaophraya Company Limited entered into an agreement to lease land from a foundation for the purpose of land development and building construction. Under the terms of the agreement, the subsidiary is to pay rental charges of Baht 100,000 per month commencing 1 November 2004, and the rental charge may be adjusted every 10 years. The term of the lease is a period of 30 years up to the year 2034. The agreement is renewable upon its termination. In this regard, the subsidiary will have to give notice of its intention in writing to the lessor at least 1 year, and not more than 2 years in advance. Ownership of buildings and all structures constructed on the leased land will be transferred to the lessor upon the termination of the agreement.
On 9 June 2006, the Company entered into a land lease agreement with an unrelated party for a period of 30 years up to the year 2038. Under the terms of this agreement, the Company is to pay lease remuneration of Baht 25.0 million. The Company had already paid this remuneration. In addition, the Company is to pay a land rental charge of Baht 1.2 million per annum for the first three years, and such charge is then to be adjusted every 3 years. Upon the expiration of the agreement, the ownership of all constructures erected on the leased land, together with equipment which are unremovable, are to be transferred to the lessor.
On 29 March 2007, the Company entered into a land lease agreement with an unrelated party for a period of 30 years up to the year 2039. Under the terms of this agreement, the Company is to pay lease remuneration of Baht 53.0 million. The Company had already paid this remuneration. In addition, the Company is to pay a land rental charge of Baht 0.4 million per annum for the first three years, and such charge is then to be adjusted every 3 years. Upon the expiration of the agreement, the ownership of all constructures erected
on the leased land, together with equipment which are unremovable, are to be transferred to the lessor.
Notes to the financial statements138
On 19 March 2010, the Company entered into a land lease agreement with 2 local companies for a period of 30 years up to the year 2043. Under the term of this agreement, the Company is to pay lease remuneration of Baht 150.0 million. The Company had already paid this remuneration. Upon the expiration of the agreement, the ownership of all constructures erected on the leased land, together with equipment which are unremovable, are to be transferred to the lessor.
Hotel management agreements
On 24 February 1988, Erawan Hotel Public Company Limited entered into agreements with various companies in the Hyatt International Corporation Limited Group (HYATT) whereby HYATT will provide necessary hotel construction and management services to the subsidiary. Under the terms of the agreements, the subsidiary is committed to pay a management fee, license fee, and a share of marketing expenses to HYATT, at the rates indicated in the agreements. The term of the management agreement is for twenty years, counting from commencement of hotel operations, to be extended for at least 10 years, dependent upon certain conditions as specified in the agreement.
On 29 October 2010, Erawan Hotel Public Company Limited entered into amendment agreement with Hyatt to amend certain conditions in the agreement. The subsidiary agreed to extend the term of the management agreement for another 9.5 years and extended for at least 10 years, dependent upon certain conditions as specified in the agreement.
On 3 February 1994, Erawan Ploenchit Company Limited entered into an agreement with Marriott Worldwide Corporation Group (“Marriott”) to appoint the Marriott as management of the subsidiary’s hotel.The subsidiary also made agreements with Marriott relating to the hotel operations. Under the terms of the agreements, the subsidiary is committed to pay remuneration to Marriott at the rates, terms and basis specified in the agreements. The hotel management agreement will be terminated on 31 December 2032. On 1 January 2008, the subsidiary transferred all commitments under these agreements to the Company.
On 4 July 2005, Erawan Rajdamri Company Limited and Erawan Samui Company Limited entered into management agreements with Marriott Group (“Marriott”), to appoint the Marriott to manage the subsidiaries’ hotel as a standardised Courtyard by Marriott and Renaissance hotel. Under the terms of the agreements, the subsidiaries are committed to pay remuneration to Marriott in accordance with the rates, terms and basis specified in the agreements. The terms of the hotel management agreements is to be for 30 years, counting from commencement of hotel operations, and is to be extendible for a further period of at least 10 years, dependent upon the fulfillment of certain conditions specified in the agreements.
In December 2005, the Company entered into agreement with Intercontinental Hotels Group to manage hotel under the brand Holiday Inn which located at Pattaya. Under the term of the agreements, the Company is committed to pay remuneration in accordance with the rates, terms and basis specifies in the agreements. The terms of the hotel management agreement is to be for 15 years, counting from commencement of hotel operations, and is to be extendible for a further period of at least 5 years, dependent upon the fulfillment of certain as conditions specified in the agreements.
Notes to the financial statements 139
SUCCESS WITH INTEGRITY
During June 2006 to March 2008, the Company and Erawan Chaopraya Company Limited entered into agreements with Accor Group to manage 10 hotels of the Company and a subsidiary under the brand ibis which located in Thailand. Under the term of the agreements, the Company and a subsidiary are committed to payremuneration in accordance with the rates, terms and basis specifies in the agreements. The terms of the hotel management agreement is to be for 15 years, counting from commencement of hotel operations, and is to be extendible for a further period of at least 5 years, dependent upon the fulfillment of certain conditions specified in the agreements. On 1 July 2009, the contract was extended from 15 to 20 years.
A subsidiary, Erawan Phuket Company Limited agreed with the group of Six Senses Company in termination of their management services agreements in July 2011 and entered into management services agreements with the group of Starwood that will provide resort management services to the subsidiary under the terms of the agreements. The subsidiary is committed to pay management fees at the rates indicated in the agreements. The agreements will be expired in December 2032 with an option to extend for further period, dependent upon certain as conditions specified in the agreements.
39. Contingent liabilities
Litigations and dispute
a) During the year 2008, a customer, who had rented a rental building, sued the Company for the return of a deposit for the lease of a building, which the Company had deducted against overdue payments for electricity amounting to approximately Baht 1.3 million. On 28 December 2010, the first instance court had dismissed the case. At present, the case is in the process of appeal court. However, the Company expects that there will be no significant impact to the Company as a result of the case.
b) In 2009, a subsidiary submitted a statement of claim to the Alternative Dispute Resolution Office, Arbitration Institute to consider the dispute with a contractor to pay for compensation arising from al leged breach of a construction contract. The contractor submitted a statement of defense and counter claim to the Arbitration Institute as well. The dispute is in the arbitration process and has not been finalised. Consequently, the subsidiary cannot estimate the impact as a result of the dispute.
40. Thai Financial Reporting Standards (TFRS) not yet adopted
The Group has not adopted the following new and revised TFRS that have been issued as of the reporting date but are not yet effective. The new and revised TFRS are expected to become effective for annual financial periods beginning on or after 1 January in the year indicated in the following table.
TFRS Topic Year effective
TAS 12TAS 21 (revised 2009)
Income TaxesThe Effects of Changes in Foreign Exchange Rates
20132013
Management is presently considering the potential impact of adopting and initially applying these new and revised TFRS on the consolidated and separate financial statements.
Notes to the financial statements140
41. Reclassif ication of accounts
Certain accounts in the 2010 financial statements have been reclassified to conform to the presentation in the 2011 financial statements. These reclassifications have principally been made following changes in accounting policies consequent to the adoption of new or revised TFRS as disclosed in note 3. Other significant reclassifications were as follows:
(Unit: in thousand Baht)2010
Consolidated financial statements
Separate financial statements
Before reclass.
Reclass. After reclass.
Before reclass.
Reclass. After reclass.
Statement of financial position
Property, plant and equipment
Land held for development
Other current assets
Other non-current assets
Other current liabilities
10,255,826
-
95,184
30,703
(348,221)
(104,207)
104,207
(45,647)
44,486
1,161
10,151,619
104,207
49,537
75,189
(347,060)
6,242,902
-
15,883
28,656
(151,375)
-
-
-
-
-
6,242,902
-
15,883
28,656
(151,375)
- -
Statement of comprehensive income
Administrative expenses
Director remuneration
666,928
35,154
35,154
(35,154)
702,082
-
341,958
33,354
33,354
(33,354)
375,312
-
- -
Corporate Information 141
SUCCESS WITH INTEGRITY
Corporate InformationThe Erawan Group Public Company Limited
The Erawan Group Public Company Limited Registration No. 0107537001943
Head OfficePloenchit Center,6th Floor 2 Sukhumvit Road, Kwang Klongtoey, Khet Klongtoey, Bangkok 10110 ThailandTelephone: 66 (0) 2257 4588Fax: 66 (0) 2257 4577
Branch 1Erawan Bangkok,494 Ploenchit Road, Kwang Lumpini, Khet Phathumwan, Bangkok 10330 ThailandTelephone: 66 (0) 2250 7777Fax: 66 (0) 2250 7788
Branch 2JW Marriott Hotel Bangkok,4 Sukhumvit Road, Kwang Klongtoey, Khet Klongtoey, Bangkok 10110 ThailandTelephone: 66 (0) 2656 7700Fax: 66 (0) 2656 9831
Branch 3ibis Patong Phuket,10 Chalermphrakiat Road, Patong, Kata, Phuket 83150 ThailandTelephone: 66 (0) 7630 3888Fax: 66 (0) 7630 3889
Branch 4ibis Pattaya,463/79 Pattaya Sai 2 Road, Nongprue, Bang Lamung, Chon Buri 20150 ThailandTelephone: 66 (0) 3841 8188Fax: 66 (0) 3841 8189
Branch 5ibis Samui Bophut197 Rob Koh Road, Bophut, Koh Samui, Surat Thani 84320 ThailandTelephone: 66 (0) 7791 4888Fax: 66 (0) 7791 4889
Branch 6ibis Bangkok Sathorn,29/9 Soi Ngam Duphli, Rama IV Road, Kwang Thung Mahamek, Khet Sathorn, Bangkok 10120 ThailandTelephone: 66 (0) 2610 5188Fax: 66 (0) 2610 5189
Branch 7ibis Bangkok Nana,41 Soi Sukhumvit 4, Sukhumvit Road, Kwang KlongToey, Khet KlongToey, Bangkok 10110 ThailandTelephone: 66 (0) 2667 5888Fax: 66 (0) 2667 5889
Branch 8Holiday Inn Pattaya,463/68 Pattaya Sai 1 Road, Nongprue, Bang Lamung, Chon Buri 20150 ThailandTelephone: 66 (0) 3872 5555Fax: 66 (0) 3872 5556
Branch 9ibis Phuket Kata,88/8 Kata Road, Karon, Muang Phuket Phuket 83100 ThailandTelephone: 66 (0) 7636 3488Fax: 66 (0) 7636 3489
Branch 10ibis Hua-Hin,73/5 Moobaan Nongkae, Hua-HinPrachuap Khirikhan 77110 ThailandTelephone: 66 (0) 3261 0388Fax: 66 (0) 3261 0389
Home Pagewww.TheErawan.com
Corporate Information142
Type of Business Invest and develop hotel properties strategically located to match travelers’ different demand.
Company’s Capital as at 31 December 2011 Registered Capital 2,505,000,000 Baht : 2,505,000,000 ordinary shares at par value 1 Baht/share. Paid-Up Capital 2,244,779,001 Baht : 2,244,779,001 ordinary shares at par value 1 Baht/share. Other References
Registrar of Ordinary Shares Thailand Securities Depository Co., Ltd. No. 62 Rachadapisek Road, Klongtoey, Bangkok 10110 Thailand Telephone: 66 (0) 2359 1200-02 Fax: 66 (0) 2359 1259
Auditor Mr. Charoen Phosamritlert Certificate Public Accountant (Thailand) No. 4068
Ms. Vannaporn Jongperadechanon Certificate Public Accountant (Thailand) No. 4098
Mr. Vichien Thamtrakul Certificate Public Accountant (Thailand) No. 3183
KPMG Phoomchai Audit Ltd. 48th Floor, Empire Tower 195 South Sathorn Road, Bangkok 10120 Thailand Telephone: 66 (0) 2677 2000 Fax: 66 (0) 2677 2222
Corporate Information 143
SUCCESS WITH INTEGRITY
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The Erawan Group Public Company Limited6th Floor, Ploenchit Center, 2 Sukhumvit Road, Kwang Klongtoey, Khet Klongtoey, Bangkok 10110 ThailandTelephone: 66 (0) 2257 4588Fax: 66 (0) 2257 4577www.TheErawan.com
Hotel Business
Grand Hyatt Erawan Bangkok Hotel494 Ploenchit Road, Pathumwan, Bangkok 10330 ThailandTelephone: 66 (0) 2254 1234Fax: 66 (0) 2254 6267www.bangkok.grand.hyatt.com
JW Marriott Hotel Bangkok4 Sukhumvit Road, Soi 2, Klongtoey, Bangkok 10110 ThailandTelephone: 66 (0) 2656 7700Fax: 66 (0) 2656 7711www.marriott.com/bkkdt
Renaissance Koh Samui Resort and Spa208/1 Moo 4, Maret, Laem Nan Beach, Koh Samui, Suratthani 84310 ThailandTelephone: 66 (0) 7742 9300Fax: 66 (0) 7742 9333www.marroitt.com/usmbr
The Naka Island, a Luxury CollectionResort and Spa, Phuket32 Moo 5, Paklok, Thalang, Phuket 83110 ThailandTelephone: 66 (0) 7637 1400Fax: 66 (0) 7637 1401www.nakaislandphuket.com
Courtyard by Marriott Bangkok155/1 Soi Mahadlekluang 1, Rajdamri Road, Bangkok 10330 ThailandTelephone: 66 (0) 2690 1888Fax: 66 (0) 2690 1899www.courtyard.com/bkkcy
Holiday Inn Pattaya463/68 Pattaya Sai 1 Road, Nongprue, Bang Lamung, Chonburi 20150 ThailandTelephone: 66 (0) 3872 5555Fax: 66 (0) 3872 5556www.holidayinn.com/pattaya
ibis Patong Phuket10 Chalermphrakiat Road, Patong, Katu, Phuket 83150 ThailandTelephone: 66 (0) 7630 3888Fax: 66 (0) 7630 3889www.ibishotel.com
ibis Pattaya463/79 Pattaya Sai 2 Road, Nongprue, Bang Lamung, Chonburi 20150 ThailandTelephone: 66 (0) 3841 8188Fax: 66 (0) 3841 8189www.ibishotel.com
ibis Samui Bophut197 Rob Koh Road, Bophut, Koh Samui, Surat Thani 84320 ThailandTelephone: 66 (0) 7791 4888Fax: 66 (0) 7791 4889www.ibishotel.com
Corporate Information144
ibis Bangkok Sathorn29/9 Soi Ngam Duphli, Rama IV Road, Kwang Thung Mahamek, Khet Sathorn, Bangkok 10120 ThailandTelephone: 66 (0) 2610 5188Fax: 66 (0) 2610 5189www.ibishotel.com
ibis Bangkok Nana41 Sukhumvit Soi 4, Sukhumvit Road, Kwang Kloengteoy, Khet Klongtoey, Bangkok 10110 ThailandTelephone: 66 (0) 2667 5888Fax: 66 (0) 2667 5889www.ibishotel.com
ibis Phuket Kata88/8 Kata Road, Karon, Muang Phuket, Phuket 83100 ThailandTelephone: 66 (0) 7636 3488Fax: 66 (0) 7636 3489www.ibishotel.com
ibis Bangkok Riverside27 Soi Charoennakorn 17, Charoennakorn Road, Banglamphulang, Klongsan, Bangkok 10600 ThailandTelephone: 66 (0) 2805 9888Fax: 66 (0) 2805 9889www.ibishotel.com
ibis Hua-Hin73/15 Moobaan Nongkae, Hua-HinPrachuap Khirikhan 77110 ThailandTelephone: 66 (0) 3261 0388Fax: 66 (0) 3261 0389www.ibishotel.com
Rental Property
Erawan Bangkok494 Ploenchit Road, Pathumwan, Bangkok 10330 ThailandTelephone: 66 (0) 2250 7777Fax: 66 (0) 2250 7788www.erawanbangkok.com
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The Erawan Group Public Company Limited6 Floor, Ploenchit Center, 2 Sukhumvit Road, Klongtoey, Bangkok 10110, ThailandTel.: 66 (0) 2257 4588 Fax: 66 (0) 2257 4577Reg. No. 0107537001943
www.TheErawan.com
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