REBUILD
‘A strong foundation leads to sustainability’. Rebuild Foundation
is the first step in our 3-step business plan for achieving our goal
which is restoring profitability in 2015. The plan consists of 1)
Rebuild Foundation, 2) Unlocking Value, and 3) Growth Diversification.
Following the company’s business plan, the 2013 year of Rebuild
Foundation, the company focused on investing in human capital and
strengthening employees’ competency by promoting their creativity
and inspiration through stylish office and decorative facilities,
investing in a computer system as well as accounting software, and
rebranding the corporate image to pave the way for future growth
and prosperity as a leader in the real estate development market.
REBUILD
FOUNDATION
G
OOD GOVERNANCE
O
PEN - MINDED
L
EARNING ORGANIZATION
D
RIVE FOR EXCELLENCE
ทำ�ง�นอย่�งโปร่งใส
ต้องเปิดใจไม่ปกปิด
เรียนรู้อย่�งเป็นมิตร
ร่วมกันคิดพร้อมก้�วไกล
Mission Corporate
Information Financial Highlights
Board of Directors Message from the
Chairman Message from the President
Report of the
Audit Committee Policy and Overviews of Business Operations Business Structure of Golden Land Group
Nature of Business Corporate Social
Responsibilities Policy Management Discussion and Analysis
Risk Factors
Organization Structure
Corporate
Governance Policy
Report Of The Board Of Directors’ Responsibilities For Financial Statements
General Information of The Subsidiaries Companies Annual Financial Statements and Auditor’s Report of Certified Public Accountant Capital Structure and
Shareholders
Management Structure
Internal Controls and Risk Management
Dividend Payment Policy
Board of Directors and Executives Connected Transactions
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Attachment
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Content
Corporate Information
To be a leading real estate developer in residential & commercial areas both locally and internationally
Vision
Corporate Information
Company Name Golden Land Property Development Public Company Limited
Symbol for Trading GOLD
Type of Business Real Estate and Property Development Company Registration 0107537002273
Registered Capital Baht 16,382,133,790 as at January 7, 2014 Paid-up Capital Baht 12,763,072,610 as at January 7, 2014 Registered Shares 1,638,213,379 ordinary shares as at January 7, 2014 (Ordinary Share)
Issued Shares 1,276,307,261 ordinary shares as at January 7, 2014 (Ordinary Share)
Par Value Baht 10 per share
Other Security Warrants of Golden Land Property Development Public Company Limited No. 1 (GOLD-W1)
The total warrants of 504,065,655 units (GOLD-W1) have been listed in the Stock Exchange of Thailand.
No. of remaining warrants as of December 27, 2013 – 361,906,118 units Head Office 36th Floor, Sathorn Square Office Tower,
98 North Sathorn Road, Silom, Bangrak, Bangkok 10500
Tel. : 0-2620-6200
Fax : 0-2620-6222
Website : www.goldenlandplc.co.th
E-mail : ir@goldenlandplc.co.th
Other References
Investor Relations Mr. Khumpol Poonsonee Tel. : 0-2620-6200 Fax : 0-2620-6222
E-mail : ir@goldenlandplc.co.th Registrar Thailand Securities Depository Co., Ltd. (Share and Warrant) 62 The Stock Exchange of Thailand Building,
Rachadapisek Road, Klongtoey, Klongtoey, Bangkok 10110 Tel. : 0-2229-2800
Fax : 0-2654-5427 Call Center : 0-2229-2888 Website : http://www.tsd.co.th
Auditor KPMG Phoomchai Audit Limited
48th Floor, Empire Tower, 195 South Sathorn Road, Yannawa, Sathorn, Bangkok 10120
Tel. : 0-2677-2000 Fax : 0-2677-2222
Mr. Nirand Lilamethwat (Certified Public Account No. 2316) or Mr. Supot Singhasaneh (Certified Public Account No. 2826) or Ms. Nittaya Chetchotiros (Certified Public Account No. 4439) or Ms. Vipavan Pattavanvivek (Certified Public Account No. 4795) Investors can obtain additional information about the securities issuer in its Annual Registration Statement (Form 56-1) in the website of The Securities and Exchange Commission (www.sec.or.th) or in its corporate website www.goldenlandplc.co.th.
Financial Highlights
Financial Highlights
Golden Land Property Development PLC and the Subsidiary Companies
Financial Ratios as at 31 December
Financial Highlights
Financial Ratios
1 Liquidity Ratio
Current ratio 1.39 0.73 1.29
Quick ratio 0.19 0.24 0.54
Cash flow liquidity ratio (time) -0.56 -0.05 0.05
Accounts receivable turnover ratio 13.12 18.98 25.45
Average collection period (day) 27.44 18.97 14.34
Inventory turnover ratio (time) 0.38 0.75 0.30
Average sales period (day) 945.51 478.33 1,215.16
Accounts payable turnover ratio 5.62 4.71 4.12
Average payment period (day) 64.02 76.44 88.56
Cash cycle (day) 1,036.96 573.74 1,140.94
2 Profitability Ratio
Gross profit margin (%) 29% 25% 29%
Net profit margin (%) -27% -34% -22%
Return on equity (%) -7% -9% -4%
3 Efficiency Ratio
Return on total assets (%) -4% -5% -2%
Return on fixed assets (%) -22% -30% -1%
Assets turnover ratio 0.13 0.14 0.10
4 Financial Policy Ratio
Long-term loan to equity ratio (time) 0.55 0.56 0.51
Debt to equity ratio (time) 1.09 0.93 0.89
5 Data per Share
Book value (Baht) 4.84 5.43 6.66
Earning per share (Baht) -0.35 -0.49 -0.23
6 Growth Rate Total assets (%) 8% -8% 15% Total liabilities (%) 16% -7% -8% Sales -5% 53% -43% Operating expenses -20% 58% -19% Net loss -27% 145% -22% 2011 (1) 2012 (2) 2013
(1) Calculation based on previous year financial statement.
(2) Calculation based on restated financial statement compared to this year financial statement for the year ended 31 December 2013.
(1) Based on previous year financial statement.
(2) Based on restated financial statement compared to this year financial statement for the year ended 31 December 2013.
Financial Status
2013 2012 (2) 2011 (1)
(Restated) Total Assets 12,580 11,697 12,683 Total Liabilities 6,693 5,757 5,988 Registered Capital 16,382 16,382 16,382 Paid-up Capital 12,679 11,341 11,341 Shareholder’s Equity 5,887 5,940 6,695Operating Performance
2013 2012 (2) 2011 (1)
(Restated) Total Revenues 1,594 1,681 1,144Total Costs and Expenses 1,972 2,272 1,422
Loss for the Year (454) (618) (253)
Unit : Million Baht
Unit : Million Baht
Unit : Million Baht
Total Revenues Total Costs and Expenses Net Profit (Loss)
2013 2012 2011 0 1 -1 2 3 1,594 1,972 (454) 1,681 2,272 (618) 1,144
Unit : Million Baht
Total Assets Total Liabilities Registered
Capital Paid-upCapital Shareholder’sEquity
2013 2012 2011 0 2 4 6 8 10 12 14 16 18 12,580 16,382 16,382 16,382 6,693 12,679 5,887 11,697 5,757 11,341 5,940 11,341 6,695 12,683 5,988 1,422 (253)
Board of Directors
Board of Directors
A. Mr. Wanchai Sarathulthat Chairman of the Board B. Mr. Panot Sirivadhanabhakdi Vice Chairman C. Mr. Thapana Sirivadhanabhakdi Director D. Mr. Chotiphat Bijananda Director E. Mr. Sithichai Chaikriangkrai Director F. Mr. Weerawong Chittmittrapap Director G. Mr. Chainoi Puankosoom Director H. Mr. Udom Puasakul Director I. Mr. Thanapol Sirithanachai Director Audit Committee
F. Mr. Weerawong Chittmittrapap Chairman of
Audit Committee
G. Mr. Chainoi Puankosoom Audit Committee Member H. Mr. Udom Puasakul Audit Committee Member Compensation and Nominating Committee
A. Mr. Wanchai Sarathulthat Chairman of
Compensation
and Nominating Committee
B. Mr. Panot Sirivadhanabhakdi Compensation and
Nominating Committee Member
G. Mr. Chainoi Puankosoom Compensation and
Nominating Committee Member
Executive Committee
B. Mr. Panot Sirivadhanabhakdi Chairman of
Executive Committee
E. Mr. Sithichai Chaikriangkrai Executive Committee I. Mr. Thanapol Sirithanachai Executive Committee J. Mr. Somboon Wasinchutchawal Executive Committee K. Mr. Saenphin Sukhee Executive Committee L. Mr. Khumpol Poonsonee Executive Committee
A B C D E F G H I J K L
A B C D E F G H I J K L
Board of Directors Board of Directors
Message from the Chairman
Message from the President
2013 was the first full year that the executive board which had been newly appointed by the current shareholders of Golden Land Property Development PLC had taken responsibility of the Company’s management after a major reorganization of its shareholder structure towards the end of 2012.
According to our commitment to return the Company’s operational performance to profitability by 2015, the past year’s achievement proved to be a first march towards our important corporate plan of the “three golden steps”, known as the “Rebuild Foundation”, in which our management has focused its first year activities towards sustainable development by reviewing its corporate setup, regrouping its business assets into “core assets” and “non-core assets”, and shaping its investment direction and operational strategy. The Company recognizes the importance of its human resources development, computer system upgrade, and professional competency enhancement. It undertakes its organizational rebranding to support a proactive campaign on public awareness. It also promotes value improvement and adding value schemes to its ongoing development projects while prudently planning for its future investment projects. All of these efforts aim to encourage a timely generation and recognition of revenues.
In 2013, the Company reported over Baht 1,500 million in revenues, comprising incomes from property management which include office buildings and service apartments, as well as sales of residential homes. Heavy interest costs and sales expenses for the year pushed the Company’s operation into net loss. The loss, however, should only be momentary and the Company believes that the launching of new low-rise residential projects during this coming year will significantly benefit its business and promptly turn the Company’s performance into profitability.
In 2014, the Company will follow the second step of its “three golden steps”, known as the “Unlocking Value” or adding value creation to its investments by
(1) Beginning its property development in the prominent area on the corner of Rama IV Road and Ratchadapisek Road. This development will be a commercial complex named FYI Center which will house office space, a shopping center, and hotel.
(2) Improving general facilities at Sathorn Square Building aiming to induce full occupancy. (3) Sale of non-core assets.
(4) Launching new low-rise residential developments including single homes and townhouses. The development will be managed by our subsidiary, Golden Land Residence Co., Ltd. which is established to oversee and manage the Company’s low-rise projects.
Another notable scheme that shall be undertaken in 2014 alongside the above mentioned strategy will be the “Unlocking Human Capital” or employee competency enrichment plan which shall focus on additional professional training and improvement of the workplace environment. This strategy aims to reinforce the Company’s organizational culture under our “GOLD” value which represents the abbreviations of G – Good Governance, O – Open-minded, L – Learning Organization, D – Drive for Excellence. Such values shall encourage the corporate personnel to march in unity towards a stable and sustainable future.
The Company recognizes and appreciates the hard work and dedication of its staff at all levels that have enhanced positive improvements to its operations and performance during the past year, and provided a solid foundation for a prosperous future. As the President of Golden Land Property Development PLC I therefore would like to thank all parties who have supported the Company and hope for further continued supports from our shareholders and stakeholders so that the Company can success-fully carry on its targeted mission to be a market leader in the property sector.
Following the shareholder restructure of Golden Land Property Development PLC towards the end of 2012 in which Univentures PLC became its major shareholder, the newly appointed Board of Directors and management then targeted on a return to profitability by 2015 as - the company has quality assets that can possibly enhance higher added value and yield good investment return.
In 2013, the real estate industry in Thailand has expanded across the board in all sections in comparison to 2012. The expansion contributed largely from business enthusiasm on anticipated prospects provided by the upcoming regional economic integration of the ASEAN Economic Community in 2015. Strengthening in the Bangkok office rental market is evidenced by a continued expansion in rental demand for Grade A office spaces in the past years. Demand for residential housing in the Bangkok Metropolitan Region, which also includes Bangkok and its five adjacent provinces, remains strong with an increase in transfer of property rights compared to the past years.
The expansion in real estate demand in the Bangkok Metropolitan Region and the growth in public investments, particularly in transportation infrastructure, aiming to accommodate increasing economic activities brought on by the upcoming ASEAN economic integration, are two main influences that benefit the local real estate industry both in the short run and the long run. Our company is ready to respond to such opportunities by developing its commercial and residential properties, both low-rise and high-rise developments, to welcome increased demand from both foreign and domestic buyers. We are also confident that the launching of our low-rise residential developments this year will be well accepted.
Lastly, on behalf of the Board of Directors of Golden Land Property Development PLC, I would like to express my sincere thanks to all our shareholders who have always supported our operations. I would also like to reiterate the commitments of the Board, our management, and our staff on all levels to work together under the principles of corporate ethics, transparency, and good governance to enhance the best and sustainable results for our Company.
Mr. Thanapol Sirithanachai
President
Mr. Wanchai Sarathulthat
Chairman of the Board
Message from the President Message from the Chairman
Report of the Audit Committee
The Audit Committee of Golden Land Property Development PLC composes of three Independent Directors, who are Mr. Weerawong Chittmittrapap, the Chairman of the Audit Committee; Mr. Udom Puasakul and Mr. Chainoi Puankosoom, the Members of the Audit Committee.
In 2013, the Audit Committee held four meetings to perform its duties as prescribed by the regulations of the Stock Exchange of Thailand, and under the scope of responsibilities assigned by the Company’s Board of Directors. Summary of the Committee’s actions are as follows:
1. Review of financial statements: The Committee aims to assure that the Company’s financial statements represent a “true and fair view”, and provide adequate information disclosure. It therefore oversaw the reviews of the Company’s quarterly and annual financial statements, significant accounting policies, changes that occurred during the year as well as their current and future impacts, material irregularities, remarks from independent auditors and internal auditors, as well as arranged discussions with the Company’s executives and auditors on the scope, method and time frame of the audit. In the opinion of the Audit Committee, the financial status and the performance of the Company are presented to conform to generally accepted accounting principles, with fair disclosure of information, and there is no irregularity that may generate any material impact on the financial statements.
2. Review of connected transactions: The Committee intends to assure the rationality of such transactions and their maximized benefits to the Company, as well as their compliance with laws and regulations of the Stock Exchange of Thailand. In the opinion of the Audit Committee, the Company’s connected transactions involve no conflicts of interest and are undertaken in the ordinary course of business, with acceptable rationality and no irregularity. 3. Review and proposition of the appointment of the external auditor: The Committee provides its recommendations
based on the consideration and circumstances of independence, professional proficiency, experiences, as well as the audit fee, and proposes such to the Company’s Board of Directors for consideration and further submission to the Annual General Meeting of the Shareholders 2013 for approval.
Report of the Audit Committee
Mr. Weerawong Chittmittrapap
Chairman of Audit Committee
4. Review of the internal control system: The Committee reassures that the Company has appropriate and effective internal control and internal audit systems. In the opinion of the Audit Committee, the Company’s internal control system is appropriate, adequate and efficient. The review of the internal control system also revealed no material concern on matters that may cause any operational impacts.
5. Supervision of internal audit: The Committee reviewed and approved the internal audit plan, the appointment and transfer of the senior internal auditing executive, and the appropriate number of internal audit personnel. It also ensured that the internal auditing function achieved the degree of independence necessary to effectively carry out the audit plan as targeted and in conformity with generally accepted international standards. 6. Review of legal compliance: The Committee reviewed the Company’s compliance with laws on securities and
stock exchange, regulations of the Stock Exchange of Thailand, as well as other laws relating to the business of the Company. The reviews indicated no outcome that could lead to any findings of material noncompliance with and/or any breach of applicable laws, rules and regulations.
7. Report of the Audit Committee: The Committee oversaw the preparation of the report signed by the Chairman of the Audit Committee and presented in the Company’s Annual Report as per the Stock Exchange of Thailand’s requirements.
8. Review and revision of the Audit Committee Charter: The Committee assessed the appropriateness of the Audit Committee Charter and resolved that the prescribed scope of duties therein should be maintained. 9. Other assignments: The Committee prepared its reports and submitted them to the Company’s Board of Directors
on a quarterly basis, and also provided the reviews of the Company’s financial statements and financial reports, as well as the performances of the internal auditing function, to the Company’s Board of Directors in its 2013 annual report.
10. Report of questionable transactions: The Committee has a duty to report to the Company’s Board of Directors if and when it has detected any questionable transaction or action with potentially significant impact on the financial status and the performance of the Company. In the past year there were neither situations nor circumstances that indicated any threat of such occurrences.
To summarize, the Audit Committee is of the opinion that the Company has reported true, complete and accurate financial statements that were audited by a qualified and independent external audit team who ensured that the audit process is efficient. The Company has an appropriate and adequate risk management scheme, with a proper internal control system, and sufficiently maintains good corporate governance that assures transparency and accountability. The internal auditing function is adequately independent in performing its audit tasks. The connected transactions or transactions that may pose a conflict of interest are monitored in compliance with applicable laws and related stock exchange regulations.
Policy and Overviews of Business Operations
Policy and Overviews of Business Operations Business Structure of Golden Land Group
In 2013, Golden Land Property Development PLC set its corporate visions and missions in its three year business plan to return the Company’s operational performance to profitability by 2015, and having a clear vision “to be a market leader in real estate development business for residential projects and commercial high rise buildings, both domestically and internationally”. It also launched a corporate plan of the “Three Golden Steps”, known as the (1) Rebuild Foundation, (2) Unlocking Value, and (3) Growth Diversification.
2013 was the first year that the newly appointed Executive Board, under the current shareholder structure of the Company took office and fully engaged in the corporate work, following the changes in the major shareholder structure during the end of 2012. The Company’s management also set a goal towards integrated and sustainable development and defined 2013 as the year of transformation. The transformation included adjustments in corporate foundation, starting with regrouping its business assets into “Core Assets” and “Non-core Assets”, and shaping its investment direction and operational strategy. It also promoted value improvement and added value schemes to its ongoing development projects while prudently planning for its future developments to encourage successful sales closure, and timely recognition of sales revenues. The new low-rise residential developments of the Company have been developed and managed by Golden Land Residence Co., Ltd., a subsidiary of the Company newly established to be responsible for residential development projects.
In addition, the Company also emphasized on management of its existing properties, particularly commercial buildings for rental; both in terms of office space rental and service apartments. The target was to increase occupancy rates, and promote long-term revenue flow from rental activities. Nevertheless the Company still faced operational losses caused mainly by the burden of interest expenses and sales expenses. The management had streamlined its financial structure to encourage a stronger financial position and adequacy of liquidity for core activity investments, particularly an increase in investment proportion of low-rise residential developments which is an essential element for the revitalization of earnings within the planned timeframe.
As for its organizational culture, the Company focused on human resources development, by enhancing staff competency under its corporate culture of “GOLD” value which represents the abbreviations of G – Good Governance, O – Open-minded, L – Learning Organization, D – Drive for Excellence. Such values also promote corporate unity. During the year, the Company reorganized its work processes, relocated its head office, and decorated its workplace to motivate staff inspiration and creativity. It also made additional investments in upgrading its computer and accounting systems, undertaking organizational rebranding to enhance its corporate image and public recognition. All of these were undertaken to form a better foundation for its future of continued sustainable growth and its stable steps to become a “Sustainable Market Leader” in the real estate development business.
Business Structure of Golden Land Group
Golden Land Property Development PLC
Single Detached Housing Projects
Baan Chang Estate Co., Ltd.
(Paid-up Capital – THB 30 Million) Golden Property Services Co., Ltd.
(Paid-up Capital – THB 1 Million)
Golden Land (Mayfair) Co., Ltd.
(Paid-up Capital – THB 11 Million)
United Homes Co., Ltd.
(Paid-up Capital – THB 550 Million) Gold Property Fund (Lease Hold)
(Paid-up Capital – THB 2,060 Million)
Grand Mayfair Co., Ltd.
(Paid-up Capital – THB 12 Million)
Sathorn Thong Co., Ltd.
(Paid-up Capital – THB 154 Million) Golden Land Polo Ltd.(Paid-up Capital – THB 1 Million)
Grand Paradise Property Co., Ltd.
(Paid-up Capital – THB 1 Million)
MSGL Property Co., Ltd.
(Paid-up Capital – THB 100 Thousand)
Golden Habitation Co., Ltd.
(Paid-up Capital – THB 5 Million) Sathorn Supsin Co., Ltd.(Paid-up Capital – THB 245 Million)
Walker Homes Co., Ltd.
(Paid-up Capital – THB 1 Million) Ascott Groupfrom Singapore
Ritz Village Co., Ltd.
(Paid-up Capital – THB 100 Million) Baan Jearanai Co., Ltd.(Paid-up Capital – THB 20 Million)
Golden Land Residence Co., Ltd.
(Paid-up Capital – THB 50 Million) Other Group
Public North Sathorn Realty Co., Ltd.
(Paid-up Capital – THB 639 Million)
North Sathorn Hotel Co., Ltd.
(Paid-up Capital – THB 1,100 Million)
Narayana Pavilion Co., Ltd.
(Paid-up Capital – THB 475 Million) CBD Commercial and
Hotel Projects
Authorized Capital - THB 16,382.13 million Issued and
Paid-Up Capital - THB 12,763.07 million
Property Development Property Advisory Service
Information as of January 7, 2014
80% 100% 100% 40% 50% 67% 50% 25% 25%Istithmar World Group from Dubai
CBD Residential and Service Apartment Projects
100% 100% 100% 100% 100% 20% 33% 100% 100% 100% 100% 100% 60% 50% 100% 50% 50%
Revenue from sale of real estate :
Revenue from rental and services :
Revenue from golf course operation :
Nature of Business
List of the ongoing projects of the Company and its subsidiary companies as at the end of the year 2013 :
Income structure of the Company and its subsidiary companies
Nature of Business Nature of Business
Project
Products or services
Single detached housing projects 622.23 39.0 842.00 50.1 491.36 43.0
CBD residential projects - - 3.88 0.2 87.19 7.6
Other projects - - - - 4.27 0.4
Service apartment 409.02 25.7 396.04 23.6 355.66 31.1
Office building 486.12 30.5 347.07 20.7 61.84 5.4
Others 25.82 1.6 31.65 1.9 53.49 4.7
Panorama golf and country club 22.17 1.4 22.76 1.3 22.37 2.0
Other income :
Investment income 14.15 0.9 23.38 1.4 35.39 3.1
Management fee income 8.25 0.5 5.81 0.3 14.40 1.2
Others 6.11 0.4 8.30 0.5 17.89 1.5 Total 1,593.87 100.0 1,680.89 100.0 1,143.86 100.0 2013 MB % % 2011 MB 2012 MB %
Type of project
Operated by
1. Golden Legend Single detached house United Homes Co., Ltd. & Ritz Village Co., Ltd. 2. Golden Nakara Single detached house United Homes Co., Ltd. & Ritz Village Co., Ltd. 3. Golden Heritage Single detached house United Homes Co., Ltd. & Ritz Village Co., Ltd. 4. Grande Monaco Single detached house United Homes Co., Ltd. &
Grand Paradise Property Co., Ltd.
5. Golden Village Single detached house and Baan Chang Estate Co., Ltd.
residential high-rise
6. Baan Suan Suay Single detached house Sathorn Thong Co., Ltd.
7. Golden Avenue – Single detached house and Golden Land Residence Co., Ltd.
Changwattana-Tiwanon Townhouse
8. Mayfair Marriott Service apartment Grand Mayfair Co., Ltd.
9. The Ascott Sathorn Bangkok Service apartment Sathorn Supsin Co., Ltd.
10. Sky Villas Residential high-rise Sathorn Supsin Co., Ltd.
11. W Bangkok Hotel North Sathorn Hotel Co., Ltd. (associated company)
12. Goldenland Building Office building Narayana Pavilion Co., Ltd.
13. Sathorn Square Office Tower Office building North Sathorn Realty Co., Ltd.
14. Inchcape Ramkamhaeng Office building (closed) and Golden Land Property Development PLC
warehouse
15. FYI Center Office and hotel building Golden Land Property Development PLC
(in progress)
16. Panorama Golf and Country Club Land allotment, resort and Golden Land Property Development PLC (Original : Voyage Panorama) golf course
Single Detached Housing Projects :
CBD Residential / Service Apartment and Hotel Projects :
CBD Commercial Projects :
Nature of Business
Nature of Business of the Company, its
Subsidiaries, and its Affiliates
The Company’s business is real estate developments which can be classified into two core areas, as follows:
(1) Residential Projects
(2) Commercial High Rise Buildings
Residential project
In 2013 the Company maintained its policy strategy on low-rise residential developments for sales; namely single-detached houses, townhouses, and home offices. Ongoing projects of which their sales and developments were carried on from the past years included:
Golden Heritage
The project, located on Ratchaphruek Road near Sathorn Bridge, has a total site area of 154-2-25.6 rai with 212 land plot units. The housing designs have a well-blended combination of Classic Grand Italian–cum–Modern Architecture style. During the year, sales and transfers of housing continued to flow, and presently all units have been sold out.
Golden Legend
The project, located on Kalpapruek Road, has a total site area of 142-1-22 rai with 272 land plot units. The housing design concept is based on the Mediterranean Villa style. At present only 17 plots remain unsold. The Company expects to close project sales in 2014.
Golden Nakara
The project, located on Rama IX Road in the eastern side of Bangkok, near the Ban Thap Chang Airport Rail Link Station, has convenient and easy access to Bangkok Motorway. It has a total site area of 106-1-35.1 rai with 247 land plot units. The Company expects to close project sales mid 2014.
Grande Monaco
The project, near the Eastern Ring Road and Bang Na-Trad Highway, is located on the eastern side of Bangkok. It has a total site area of 64-1-41.9 rai with 181 land plot units. The Company expects to close project sales mid 2014.
Golden Village
The project is located at Tambol Ban Chang, Amphoe Ban Chang, Rayong Province. It is a mixed-use development with a combination of residential housing namely single-detached houses and townhouses with commercial shop houses in the same project site. The Company has been revising its marketing plan for sales of housing and land plots and aims to close project sales mid 2014.
In addition, the Company has also further expanded its business to the low-rise housing development segment under the management of Golden Land Residence Co., Ltd., a subsidiary of the Company established to be responsible for all its new low-rise developments. In the fourth quarter of 2013, the company launched the sales of its new project -
Golden Avenue
Tiwanon-Chaengwattana Project
which is located in Soi Sukaprachasan 3 on Tiwanon Road. It has a total site area of 51-2-95.3 rai with 411 land plot units, comprising 90 units of single-detached houses and 321 units of townhomes. The Company plans to continually launch new projects in the coming years.Club House
Lapis
Turquoise
Topaz
Commercial High Rise Building
With regards to its commercial high rise building segment, the Company plans to build up management efficiency and quality improvement to enhance higher occupancy and rental rate. These actions shall enable the Company to recurrently recognize its continuously increased sales. At present the Company is developing the following commercial high rise buildings and operates the following service apartments, hotel and office buildings:
Sathorn Square
It is a 40-storey commercial office building for rent with a rental area of over 73,000 square meters, located in the heart of the central business district, at the Sathorn - Narathivas intersection with direct passage link to the Chong Nonsi BTS Skytrain Station. The Sathorn Square Office Tower has a unique architectural design. Each floor space is designed to provide more open space, with no pillars, and increased flexibility in space usage and open floor office designs.
The Ascott Sathorn Bangkok and Sky
Villas
A modern style service apartment building situated amid the central business district of Sathorn Road, near the Chong Nonsi BTS Skytrain Station. This 35-storey building houses 177 service apartment units, managed by the Ascott Group Limited, a leading serviced residence and hotel operator from Singapore. The 21st to 35th floor of the building locates the “Sky Villas” the luxurious and exclusive residential high-rise apartments decorated by renowned interior designers.
Mayfair Marriott Executive Apartment
It is one of the most luxurious service apartment buildings in Bangkok, with a 25-storey height. It also has a hotel operation license. The Company sold its leasehold for the building to the Gold Property Fund (in which one-third of the shares belong to the Company). The building houses 164 apartment units, with various sizes ranging from 1 to 3 bedrooms, and managed by the Marriott International, Inc, a “global brand” hotel chain and leading hotel management company. The building is located in the middle of Soi Langsuan, not far from the BTS Skytrain Station and adjacent to Lumpini Park which is one of the famous parks within the Bangkok central business district.
Nature of Business Nature of Business
Golden Land Building
The project is an 8-storey building with one underground floor, with a total rental space of about 11,000 square meters, located near the main shopping area of central Bangkok with shopping places such as Gaysorn Shopping Centre, Central World, and Central Chidlom, as well as famous nearby hotels such as Centara Grand at Central World Hotel, Four Seasons Hotel, Grand Hyatt Erawan, and InterContinental Hotel. The building is only a few minutes walk from the Chidlom and Ratchadamri BTS Skytrain Stations. The building is also designed to afford the occupants increased adaptability and greater design flexibility.
Additionally, in 2013 the Company began its development plan for a new commercial high-rise building project at the corner of the Rama IV – Ratchadapisek intersection (Soi Pai-sing-to). This project will be an office building– cum–hotel complex under name
FYI Center
. It has a land plot area of 8 Rai and shall be completed by 2017.Market and Competition
Residential Project
In 2013, the overall industry condition of the residential market expanded, judging from the growth in the number of house registrations in all areas of the Bangkok Metropolis and its vicinity which added up to 117,900 units, or an increase of 5.5%, categorized into Self Built Residences of 21,240 units, or a decline of 2.9% from 2012 (which was 21,850 units), and Developer Built of 96,660 units, or an increase of 7.4% from 2012 (which was 89,538 units).
Condominiums remained the highest growing segment among the newly launched projects in 2013, with a total launch of approximately 84,250 units from 180 projects, followed by townhouses of approximately 28,047 units from 144 projects, and single-detached houses of approximately 12,789 units from 99 projects.
Given the high number of developers in the current market place, competition is evidently severe. Consumer behavior and purchase decision processes are increasingly more rationalized and reflective. The Company has therefore set the following competitive strategies:
Design and Product Strategy
Due to the diversified characteristics of consumer demands at different pricing and brand-levels, consumer behavior research becomes essential and the Company has paid continual attention to study the behavior of different client categories to apply such understandings and outcomes to develop better products and satisfaction for its clients.
Additionally, the Company also focuses on offering more than the normal expectations, whether in space utilization functions, conditions of development sites and its surroundings, or in other innovations which are better than competitors in the same market area. Its products represent a uniqueness of an appropriate pricing for an “Affordable Stylish Living”.
Source: Agency for Real Estate Affairs Company Limited. Unit : Unit 140,000 120,000 100,000 80,000 60,000 40,000 20,000 2551 67,791 57,604 116,791 85,800 102,080 131,550 +29% 2552 2553 2554 2555 2556 0 Single Detached 10%
Semi Single Detached 3% Commercial Building 2%
Condominium 64%
Townhouse 21% Nature of Business
Number of Units Launched in 2008 – 2013
Real Estate Development Project in 2013
Location Strategy
The Company recognizes the importance of its project locations, which should provide the right solutions to different consumer groupings, and match up with its land purchase criteria. Most of the Company’s developments are situated in promising locations, in and within the main business districts or prominent neighborhoods, with convenient accessibility to the heart of the city, and also to infrastructures. The Company projects are generally scattered around the Bangkok Metropolitan area and its vicinity.
Pricing Strategy
It is the Company’s policy to set its pricings as signals and incentives for consumers, to motivate them to buy, and to offer worth and value of the items purchased. Pricings are determined to suit economic conditions and market competition, as well as other factors such as costs, locations, development styles, market conditions, and product competitors. It is also concerned about value for money and competitive pricing, while concentrating on aspects such as better design and function, desirable surroundings and completely equipped facilities, etc.
Marketing Strategy
It is the Company’s policy to use various media channels and a combination thereof to disseminate information on its developments and projects to the best accessibility of its clientele and general consumers. Those channels include:
1) Billboard ads and billboard signs
2) Mass media such as radio, newspaper, and magazines 3) Trade show & marketing booths in shopping malls and Home & Interiors Exhibitions
4) Mobile SMS to target groups during its sales promotion periods and other corporate events
5) Internet and other social media such as its corporate website: www.goldenlandplc.co.th, Facebook, Instagram, as well as Web Banner on main real estate websites and target groups frequently visited websites.
6) Customer word of mouth and recommendation from existing clients in the Company’s organized events such as “Member Gets
Member”. Table: Products Classified by Brands and Price Level
Categories
Brands
Price Level
Single
Detached House PrestigeGolden SDH 3 Fl. = 6-8 MB Single & Semi
Detached House GoldenVillage SDH 2 Fl. = 3.5-6 MB
Townhouse Golden
City TH 3 Fl. = 3-5 MB
Townhouse Golden
Town TH 2 Fl. = 2-3 MB Mix Product
(SDH + TH) GoldenAvenue Follow Core Categories Nature of Business
Product Cost Management Strategy
The Company manages its own construction work, by dividing the tasks into different phases such as foundation work, plaster work, constructing ensembles, flooring and roofing etc. The Company hires experienced contractors with expertise to undertake the construction tasks and manages the contractions by sending its own teams including engineers and foremen to monitor the construction work to ensure its standards and conformity with prescribed specifications. As the Company procures its own material supply, it is able to efficiently manage and control the construction costs.
After-Sales Services Strategy
The Company develops consumer confidence in the quality of its construction work and high-standard products. It also provides relevant warranties for different components of a project such as:
5 year quality warranty on building structure, effective from the official transfer date
year house warranty on quality, effective from the official transfer date, for problems such as workmanship, electrical system, and water supply, etc.
The Company’s target market is middle income customer groups; mostly living in the vicinity of its project site, as well as some customers from different areas. It also classifies its product brands according to needs of target customers. Its product branding also reflects different levels of pricings. These brands are listed as follows:
As for distribution channels, as the Company’s products are classified as “High Involvement Products” its distribution strategy therefore needs to be aligned with their nature and product types which can be summarized as follows:
1. On-site Sales Activities : Sales are made by the Company’s own sales forces or sales teams who are well trained under the Company’s prescribed “Service Standards”. These sales personnel are stationed and make selling at the estate sales offices in each of the development sites.
2. Other Sales Activities : Sales are undertaken outside estate sales offices and the development sites. Sales activities are made and supported by marketing teams. Marketing activities include organizing of marketing booths in shopping malls and exhibitions related to real estate, to promote selling or to invite customers for site visits for closing sales deals.
The Company maintains a policy on site acquisition, but does not maintain vacant properties for land bank purposes. Upon its interest to develop and construct any projects, the Company shall perform relevant feasibility studies, market research, competitor and competitive analysis, as well as surveys based on demand and needs of target customers of the potential development sites. Then it will start its land procurement process either by direct acquisition from the property owners or through arrangements with property agents. Comparison of offering prices with appraisal values or market prices will be used to assure that the price of the acquired land is reasonable.
On project development, the Company also oversees its construction management tasks and procures its own material supply. After the Company’s Procurement Department obtains details of required materials, it normally contacts each material producer to carry out a price survey and get price quotations.
Usually the Company receives a rather high discount on the construction materials purchased in a large quantity or volume. Once the volumes and prices are concluded with producers of the materials, the Company shall place its order for such materials via their supply agents for direct delivery to the Company’s development sites. As the Company maintains good relationships with the construction material producers and their supply agents, it is able to order any desirable amounts of materials upon demand.
Additionally, the Company also applies new construction technologies in building its single-detached houses and townhouses, such as tunnel form and precast concrete construction technology for wall panels.
As for environmental impacts, the Company always pays attention to the importance of environmental issues and possible impact on the surroundings of the nearby communities of its estate development sites. It thus applies strict precautions to design details of various systems in its projects to assure that all these systems are in place, well-functioning, and able to render protection against any environmental problems and any impacts to surroundings of the nearby communities.
Commercial High Rise Building
In general, the market of commercial high rise buildings for rent, particularly office buildings, shows signs of continued growth. Demand for office space rental and rental rates remain strong with possible upward movements, especially for Grade A office buildings in the Central Business Districts along the BTS skytrain lines or nearby MRT stations. The government’s economic stimulus policies have also contributed to such growths. Registrations of new companies have risen whilst the business of companies that are already registered are also expanding. There is a tendency for foreign companies to set up new offices in Thailand to accommodate the upcoming regional economic integration of the ASEAN Economic Community.
Market competition for office building for rent is quite strong with available rental spaces of 8.09 million square meters, and 0.45 million square meters under construction, 7.27 million square meters are already occupied, being an 89.8% overall space. The occupancy rate has been continually increasing since 2009.
Focusing on Grade A office buildings, the occupancy rate increased to 90.1% (with 1.1 million square meters, out of a total 1.23 million square meters, already occupied). The average rental rate is as high as Baht 810 per square meter, the highest ever obtained in the market. At present, though competition in this market segment is not so severe, there are other demanding tasks such as daily services and monitoring, renovation requirements to maintain the locations, availability of full services and basic facilities, and good security systems.
Nature of Business
The Company presently has two office buildings for rent namely Golden Land Building, and Sathorn Sqaure Office tower, both located near BTS Skytrain Stations with convenient access to transportation. Golden Land Building and Sathorn Sqaure Office Tower currently have an average occupancy rate of over 90% and 70% respectively.
In 2013 the Company continually renovated and improved the building quality of Sathorn Sqaure, aiming to increase the occupancy rate. The building is a superior prime office building in the heart of the Bangkok central business district, a prominent business neighborhood with direct access to a skytrain station. It is equipped with eco-friendly controls system such as a VAV (Variable Air Volume) air conditioning system and CO2 Detector, an adjustment feature to fine tune fresh air circulation according to carbon dioxide value. All these factors have enabled the Company to be awarded the “LEED Gold Certification” on 3 April 2013.
The building has 18 high-speed elevators (3 zones) in service. The interior design for the floor plan makes use of column-free and large open spaces, with a height of 2.95 meter floor ceiling that allows the access of natural light on each floor and improved interior surroundings with panorama city view of Bangkok. The building twenty-four hour security is comprised of access control system which controls access to elevators round-the-clock, CCTV, entry alarm etc. Utilities such as service lines electric, telephone, and cable lines are well provided. There are five underground floors for parking with a car park guidance system to monitor parking space occupancy and guide drivers to the closest available parking space.
The target market for Sathorn Square Office Tower Project covers both domestic and international corporate tenants of over 500 leading firms. The tenants mostly desire the superior marketing image of being in the heart of the Bangkok CBD, with a direct access to mass transportation especially to BTS skytrain, an energy efficient and eco-friendly workplace environment and flexible and “open concept” office landscape floor plan.
The Company’s marketing strategy for office space rental includes working closely with leading real estate agencies, providing them with updated and required information needed by potential
tenants, and keeping regular follow-ups with the clients. For building quality improvement, in 2013, the Company building renovation plans included the rebranding of its Sathorn Square Office Tower Project by changing the building logo & signage, redecorating the surrounding landscape to be in accord with the rebranding concept. Activities and exhibitions were arranged using both internal and external spaces of the buildings to promote a bonding relationship with the building tenants, particularly during the festive seasons. Other actions comprised organizing press conferences to promote the buildings, regular checking and monitoring the building systems and building management, and improvement of communications via internet and other social media etc.
As for environmental impacts, the Company arranged to have relevant designing and advisory on such matters, as well as obtaining related approvals/ licenses including the submission the approval of an Environmental Impact Assessment Report (EIA Report) prior to its request for any building construction license. It also undertook measures and procedures as prescribed in its EIA Report to assure the mitigation of construction impacts to surrounding communities. The buildings were designed and constructed to enhance energy conservation according to the international guidance standard of “LEED (Leadership in Energy and Environment Design)” certificated by USGBC. The Sathorn Square Office Tower Project, for example, represents a new innovation in building design and construction that focuses on an environmentally conscious design; with installations of a variable air volume controlled air conditioning system, non-chemical chilled-water air-conditioning system, and application of energy-efficient T5 light bulbs (T5 Fluorescent Lamp) for electricity saving etc. Nature of Business
Corporate Social Responsibilities Policy
Golden Land Property Development PLC and its subsidiaries
& affiliates pay attention to social development and mutual assistance. Social and community development indicates the sustainable strength of an economy, thus the Company has a policy to support social activities by constructing its products, being residential dwellings, that do no pollute community environment and avoid the spread of pollution. It also promotes the improvement of the surrounding areas and encourages community development efforts in neighborhood of its development sites. These actions enable it to sustain the beneficial coexistence between the Company, its surrounding communities and society as a whole. The Company has following practice guidance:
1) Survey, inspect, and assess community conditions as well as surrounding environment in the areas both close by and further away from its development sites, to assure that they are impacted by the Company’s business operations or its future developments, and if they are, to what extent. The information acquired will be use to set proper measures for prevention, improvement, and remedial actions that could reassure against any potential direct or indirect impacts and harm to such communities, surroundings, and society.
2) Support volunteer activities relating to community and society development by means of cooperative efforts in preserving the environment for such areas to be clean, and safe for peaceful cohabitation. It also supports communities and society to have adequate supply of basic infrastructure such as educational equipment, trash bins, and roads etc., to sufficiently service dwellers in such communities and society.
3) Support and participate in social services such as arrangement of activities to promote good deeds and actions etc.
Operation Policy under Environmental Standards
1) Arrange to have a proper environmental administrative system, together with the administration of the residential construction project, with consistent follow-up and assessment of such administrations, as well as studying of environmental protection and preservation methods such as the ecological system, global warming, pollution etc.
Corporate Social Responsibilities Policy Corporate Social Responsibilities Policy
2) Apply technologies and a production process that meets the environmental standards, and ensure that pollutants are reduced and treated before they are released back into nature.
3) Efficient use of natural resources, with concern over energy-saving measures and encouragement of natural resources recycle.
4) Develop goods/services that do not cause any environmental impacts, and are safe to use.
5) Provide employees and the general public with information on environmental impact, safety, and hygiene.
6) Encourage client's awareness on environmental cautions about the use of the Company’s products and services.
7) Provide knowledge and training for employees on environmental issues, safety, and hygiene. Prepare emergency plans for any environmental problems that may occur, as well as arrange to have a proper system to immediately report to the supervisory authority upon any occurrence of such environmental problems.
8) The Company supports and encourages its stakeholders namely customers, trade counterparties, employees, as well as society and the communities around its development projects and its office to be aware of and concern over the importance of the environment, and motivate them to assist the Company in its environmental conservation efforts towards sustainable development in all aspects.
Practice Guidelines on Creating Awareness
and Instilling Ethical Behavior on Environment
1) Promote and provide relevant knowledge on the environment to employees such as energy-saving equipment and choices of clean energy that cause no harm to the environment.
2) Promote staff activities that encourage their motivation and cooperation in saving natural resources, maximizing beneficial use of energy, as well learning how to reduce, reuse, and recycle such as using electronic paper instead of ordinary paper, and reusing the blank back side of all paper.
3) Distribution of knowledge and information on energy conservation to employee and homebuyers through newsletters with topics such as how to save energy in the home.
Additionally, the Company also pays attention to promoting social services and educational activities such as donation of school equipment, sport equipment, and scholarships to the teachers and students of Raja-Prachanukhro School 47, Tambol Sampraya, Amphoe Cha-am, Phetchaburi.
Corporate and Personnel Competency
Development Activities
Golden Land Property Development PLC and its subsidiaries
& affiliates realize that corporate competency needs to be developed along with business operations. The Company thus focuses on efficiently developing its corporate competency, upgrading its competitive advantage, while promoting transparency, honesty, and accountability, in accordance with the management principles for international standard organization. These goals can be achieved through staff professionalism development, a modern IT system, and corporate image management. The Company intends to build up its workforce to efficiently and effectively achieve its business performances towards sustainable growth.
Training and Proficiency & Competency
Development
Staff training and development is an important tool for creation of knowledge, capability, and attitude for all levels of personnel to gear up the organization towards success, excellence, and sustainability. The Company provides opportunities for staff to learn and be trained, aiming to enhance all aspects of quality in human resources
development to suit the direction of its corporate growth. It arranges to provide both internal and external training programs for staff, and pays attention to monitoring, performing skill assessments, and applying new knowledge for work benefits.
Application of technology for work management in the organization
1. Internal Communication
The Company recognizes the importance of staff communication as the foundation of good workplace relationships. It thus applies communication technology to facilitate the sharing of information in a timely, accurate and expediting manner such as Email, Social Network, Facebook, Employee self-service (ESS) which is a web-based application that provides employees with access to and protection of their personal records, and other details, as well as digital media channels such as SMS, and Line.
2. Learning Organization
The Company recognizes that sustainable development is a development that allows employees to learn and grow continually, under different circumstances, consistently, and suitable with everyday life. It thus applies new technology to facilitate knowledge dissemination and knowledge sharing within the organization to continually build up corporate core competencies and motivate its corporate members towards continuous learning and improvement. These actions include posting work-related knowledge and business-related tactics on the corporate website, implementation of an intranet system as an internal communication channel and information network for employees to express views, exchange information, ask or answer questions, and discuss internal issues, etc.
As previously mentioned, the Company focuses on a continual human resource development, that covers aspects such as promotion of corporate value and culture, creation of good workplace environment, teamwork building, quality of living, work-life balance, equitable treatment, and appropriate fringe benefits. It also promotes and encourages staff to abide by transparency, accountability, good governance, as well as pays attention to factors such as open-minded conversation, common communication, learning organization, continual knowledge sharing, professionalism, and drive for excellence. To achieve all these targets, the Company has launched various activities and programs such as:
Corporate Social Responsibilities Policy
Training: MS Office (Tricks of Outlook and Power Point)
Training: Communication
Team Building: GOLD CAMP 2013
Training:
Tactics to Success in Construction Work
Training:
Work Achievements and Satisfaction
Training:
Business Taxes for Real Estate, Home
& Condominium Sales
Activity: RUN FOR GOLD
In addition to the training organized by the Company, it also provides opportunities for staff to choose to attend seminars or external training courses arranged by private or public institutions for proficiency development in the issues related to work and their interests.
Corporate Culture
Golden Land Property Development PLC and its subsidiaries
& affiliates realize that it is an important duty in business to excel and grow towards sustainability under the ever changing environment of globalization. Human resource development is a major corporate mission. The Company thus fosters its corporate culture of “GOLD” value to motivate and inspire its human resources to apply this value to their work and their interactions with coworkers, clients, and corporate stakeholders. The “GOLD” value represents the following abbreviations of:
1) Risk factor relating to operation
Residential Project
There are four main risk factors which are:
1) Operational risk: In the past, the Company’s residential developments were large size projects with an average plot size of 70 sq. wah. Target customers were high-income homebuyers. The applied construction method were a masonry and brickwork plastering technique which requires up to 12-15 months in construction time. The long construction period exposes a developer to delivery risks as well as dependency on labors which further induces other potential risks such as labor
shortage, wage fluctuations, and other operating
risks linked to management of construction contracts and contractors. This year the Company has targeted to develop low-rise residential projects such as single detached house and townhouse for middle-income and lower middle-income
homebuyers, as well as change its home struction method from masonry and brickwork plastering technique to precast construction for houses and tunnel form construction for townhouses. These newly applied construction techniques only require 3-4 months of construction time and less labor, thereby lowering completion and delivery risks, as well as risks relating to labor shortage. Nevertheless, the Company is still exposed to risks relating to production of precast concrete and supply of precast moldings; which need
specifications, undisrupted supply, appropriate
design choices, and cost management. The Company perceives that this segment is a good market niche with gap in the market, but requires affordable pricing, appropriate design, suitable materials. Thus, instead of using a traditional general contractor, it oversees architectural design and construction management tasks, directly hires subcontractors, procures its own material supply,
and manages efficiency in purchasing plans that
match accordingly with the annual sales target of each particular year.
Risk Factors
Risk Factors
2) Risks relating to market and selling: The Company’s target customers are those with purchase budgets for a housing price between 2-6 million Baht. The Company therefore focuses on the development projects that offer products such as townhouses, as well as small single-detached houses and semi-detached houses, which have a large customer base, and also more competition. The Company needs to focus on better locations, facilities & functions, and surroundings, as well as competitive pricing. It also oversees marketing and selling aspects of the projects, by performing surveys on locations and market conditions before making its land acquisition decision, then choosing appropriate products that match market demand, cautiously
estimating potential sales that reflect reality, building
customer database for marketing and sales analysis aiming to better identify its target customers and to properly match products to target groups, and proposing suitable sales promotion.
3) Financial risks: Precast and tunnel form constructions are applied for cost control purposes. Product designs are undertaken simultaneously with estimations of construction costs for overall infrastructure and housing units. Selection of appropriate material choices and stock controls are required. Choices of substitute materials for same price levels need to be assured for cost controls. Construction planning, and
appropriate cost layouts that match with sales targets are required to properly canvass applicable
financial projections and to correctly impose mitigation measures for relevant financial risks.
4) Management risks: Divided into two scopes of duties: 1. Project Development Teams: Development
sites need to be managed in such a way so as not to create problems to surrounding
neighborhood and communities. Products are
Management Discussion and Analysis
Management Discussion and Analysis
1. Operating results
1.1 Revenues
The Company had total revenues of Baht 1,593.87 million, Baht 87.02 million decreasing from last year. Resulting from decrease in ownership transfer of housing projects Baht 223.65 million due to the Company still could not recognized revenues from new housing project under development and reducing in number of housing units in existing projects. And increase Baht 146.20 million in revenue from rental and services; mainly from
Sathorn Square Office Tower project which still
have about 25% of unoccupied rentable areas.
1.2 Expenses
The Company had total expenses of Baht 1,972.43 million, Baht 299.76 million decreasing from last year. The changes were mainly from the following reasons:
- Cost of real estate sales decreased Baht 152.86 million, along with the decreasing sales. - Cost of rental and services increased Baht
42.78 million, mainly from Sathorn Square Office
Tower project.
- Selling expenses was Baht 28.27 million lower than last year, due to decrease of selling expenses of the housing and Sathorn Square
Office Tower projects.
- Administrative expenses down Baht 125.07 million due to Baht 101.25 million decrease in provision on litigation, Baht 40.16 million decrease in asset devaluation, Baht 33.91 million decrease
in termination benefit and Baht 7.49 million decrease in specific business tax, whereas Baht
80.70 million increase in bad and doubtful debt expenses.
- Finance costs decreased Baht 37.23 million as a
result of the refinance loan as interest rate down.
1.3 Income tax expense
The Company had Baht 6.95 million income tax expense mainly due to net decreasing of deferred tax assets.
The Company recorded net loss attributable to the equity holders in the amount of Baht 430.43 million for this year, Baht 135.82 million decreases from last year.
2. Financial position as of 31 December
2013
2.1 Assets
The Company had total assets of Baht 12,579.54 million, Baht 882.67 million increasing from 2012 mainly from real estate projects under development.
The Company invested in five new housing projects.
2.2 Liabilities and Equity
The Company had total liabilities of Baht 6,692.67 million, Baht 935.66 million increasing from 2012.
Due to increasing from long-term loan from financial
institutions amount Baht 1,050.94 million to support new investments in housing projects. On the other
hand current portion of long-term loan from financial
institutions decreased Baht 1,100.20 million, which the Company paid by borrowed from short-term
loan from financial institutions Baht 865 million. And
trade accounts payable increased Baht 92.77 million as a result of increase in land development and construction cost.
Equity attributable to equity holders of the Company was Baht 6,131.86 million, net decreased Baht 29.26 million from 2012. Due to the operating loss during this year Baht 430.43 million and cash proceed Baht 401.17 million from exercising warrant.
to meet quality standards, with construction carried out according to the building’s
design. Standard specifications of construction
materials, and selling processes are clearly
defined. Customers are well-informed about
relevant warrantees & guarantees to enhance
buyer confidence. After-sales services are well
in place, and able to help build a better understanding for customers.
2. Project Support Teams: Work schedules must be accordingly set to well support and be in line with project development plans
to enhance efficiency in project management.
5) Risks relating to site acquisition:
1. Risk relating to an inability to purchase the target plot of land: The Company may fail to get the target plot of land it so desires due to various reasons such as:
- Other competing buyers bid a higher price or offer better conditions.
- Land owners increase the selling prices, to be much higher than earlier proposed. - The Company cannot materialize an
acquisition of connected land plots sufficient
enough to create a promising site for its planned development due to the fact that some landowners have changed their sale terms or other parties may have already made purchase arrangements with some of the landowners.
2. Risk relating to a purchasing error: Though the Company has already set a clear process on land acquisition, and has completed a check list prior to a submission of acquisition request to the Company’s Executive Board for approval, The Company also rechecks all relevant details before making any deposits on such land purchase, errors and unexpected problems can arise such as different interpre tations made by different government agencies involved on land utilization conditions, or an inability to thoroughly investigate the land prior to the completion of the purchase contracts etc. In an event that such an error occurs, the Company has set a remedial measure which
involves an adjustment of the development plan to suit the land site and its utilization conditions to minimize any potential loss or impact to the Company, or to avoid such loss and impact. 3. Risk relating to an ability to achieve its sales target set for the invested project on the purchased land site, and to obtain the expected return target for such investments: The Company controls this risk by analyzing market situations on market demand and supply of other developers’ inventories in each area to update its marketing database in the real estate sector, as well as continually updating its information on the changes in property prices in various locations. This helps the Company to adjust its development directions to better and properly respond to prevailing market conditions and economic environment. All the aforementioned measures assure that the Company can properly mitigate the risks relating to site acquisition.
6) Risks relating to land allocation process and land allocation laws:
This risk relates to the ability to achieve the set development plan with no obstacles regarding regulations, laws, or rules. The Company controls this risk by cautiously reviewing current and applicable prescribed regulations, laws, and rules relating to the land allocation process, as well as those which shall be enacted in the near future such as urban land use regulations, building construction regulations, land allocation regulations, and municipal and district rules, all of which have impacts on project developments. The reviews also include land ownership investigations, as well as other transfers and assignments performed in relation to the land plots. Following this, the Company shall start its conceptual layout plan on the land plot which also takes into account all these legal and regulatory aspects to assure that the outcome is in line with the Company’s intention before making any land acquisition.
Risk Factors
Commercial High Rise Building
The Company develops commercial projects by leasing land in promising downtown locations from its owners, most of which are on a 30 year lease term plus an additional 30 year lease option thereafter. The lands are used for developments
of commercial high rise buildings such as office
buildings, hotels or service apartments. These developments may have a risk factor namely high investment costs. The Company expects the long-term returns from the rental incomes. In a normal condition of continual economic growth and increasing preferences on urban lifestyle as per proven international trends, demand for commercial high rise buildings also expand, which will have a positive drive on an increase in rental rates. However, in this development segment, the Company needs to be cautious and strictly comply with all prescribed conditions in the lease agreement, whilst also maintaining the utmost
efficiency in financial management planning,
effective controls of its costs of funds, as well as proper mentoring of loan sources and interest rate administration. During the construction phrase, investment costs should be well managed and
