hmpro: annual report 2010
DESCRIPTION
Home Products Center Public Company LimitedTRANSCRIPT
Annual Report 2010
An
nual Rep
ort 2010
Home Product Center Plc.96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000 Telephone (66) 02-832-1000 Fax (66) 02-832-1400
Movin
g forw
ard to Service Excellen
ce
www.homepro.co.th
Shop.homepro.co.th
Loving home by homepro
Moving forward to Service Excellence
Greater Bangkok : Rangsit 02-958-5699 North : East : Chaengwatthana 02-962-6955 Ratchadaphisek 02-641-2900 Chiangmai 053-85-1229 Chonburi 038-78-5111 Ekamai-Ramindra 02-933-5000 Ratchapruk 02-423-3222 Chiangmai-Hangdong 053-44-7939 Pattaya 038-36-0422 Fashion Island 02-947-6365 Rattanathibet 02-921-2400 Phitsanulok 055-28-9009 Rayong 038-80-9333 Future Mart 02-689-0844 Seri Center 02-746-0377 South : Latphrao 02-983-7444 Sukhaphiban 3 02-976-9114 North-East : Had Yai 074-46-9055 Lumlukka 02-997-4800 Suvarnabhumi (Bangna) 02-325-1200 Khao Yai 044-32-8799 Krabi 075-81-0499 Petchkasem 02-444-4699 The Mall Bangkae 02-454-9299 Khonkaen 043-36-5365 Nakhonsitammarat 075-32-4740 Ploenchit 02-655-3400 Central : Nakhonratchasima Phuket 076-25-5189 Prachachuen 02-955-5888 Ayutthaya 035-23-6655 (Bypass 2) 044-28-2550 Phuket-Chalong 076-60-2399 Rama II 02-895-6555 Hua Hin 032-52-6000 The Mall Korat 044-28-8345 Samui 077-23-1900 Ramkhamhaeng 02-735-4999 Nakhonpathom 034-21-3200 Udonthani 042-30-9000 uratthani 077-48-9199
HomePro is the leading home improvement retailer in Thailand.
We operate 40 stores nationwide, providing product
range cover 60,000 items with complete services
as One Stop Shopping to attain
highest customer satisfaction.
2010 retail sales increased
by 18.4% to
Baht 24,073 million.
NPAT increased
by 44.9% to
Baht 1,638 million.
Total assets increased
from investment in
property of 5 new stores.
Lumlukka, Sukhaphiban 3,
Nakhonpathom,
Nakhonratchasima and
Nakhonsitammarat
Board of Directors
Mr. Anant Asavabhokhin
Chairman
Mr. Pong Sarasin
Independent Director
Mr. Rutt Phanijphand
Director, Executive Director and Chairman of the Nomination and Remuneration Committee
Mr. Manit Udomkunnatum
Director and Chairmanof Executive Directors
Mr. Naporn Soonthornchitcharoen
Director and Executive Director
Mr. Apilas Osatananda
Independent Director andChairman of the Audit Committee
Mr. Thaveevat Tatiyamaneekul
Independent Director and Audit Committee
Mr. Joompol Meesuk
Director
Mrs. Suwanna Buddhaprasart
Director
Mr. Chanin Roonsamrarn
Independent Director,Audit Committee and Nomination and Remuneration Committee
Mr. Apichat Natasilpa
Director and Nomination and Remuneration Committee
Mr. Khunawut Thumpomkul
Director, Executive Directorand Managing Director
20092007 2008 2010
15,944
30
3335
40
20092007 2008 2010 20092007 2008 2010 20092007 2008 2010
Mr. Rutt Phanijphand
Director, Executive Director and Chairman of
of Executive Directors
Mr. Thaveevat Tatiyamaneekul
Independent Director
+18.4%Sales Total Assets New
+44.9%Net Profit
+2,718MB 5 Branches
Mr. Chanin Roonsamrarn
Independent Director,depe de t ecto ,Audit Committee ud t Co tteeand Nomination and Remuneration Committee
the Nomination and Remuneration Committee Chairman of the Audit Committee
Mr. Apichat Natasilpa
Director and Nomination andDirector and Nomination and Remuneration Committee
Mr. Khunawut Thumpomkul
Director Executive DirectorDirector, Executive Directorand Managing Director
and Audit Committee
18,540
20,329
24,073
959
710
1,131
1,638
12,27413,369
13,873
16,592
Contents
2 Message from the Chairman
3 Message from the Managing Director
12 General Information
15 Financial Information
16 Nature of Business
18 Risk Factors
21 Shareholding Structure
22 Organization Chart
23 Management
36 Corporate Governance
42 Internal Control
43 Dividend Policy
43 Related Transactions
46 Financial Analysis and Business Operation Results
50 Report of Board of Directors’ Responsibilities in
the Financial Statements
51 Audit Committee’s Report
53 Independent Auditor’s Report
54 Financial Statements1
(Mr. Anant Asavabhokhin)
Chairman
Dear Shareholders and Stakeholders,
The year 2010 marked the actual start to Thailand economic recovery. After the world
economic crisis in 2008, the export value had driven the expansion of Thai economy and the
consumer confi dence index, raising 2010 Gross Domestic Product (GDP) growth above 7%.
With the aforementioned economic situation, in 2010, HomePro successfully achieved
sales goal with the expansion of gross sales up to 18%, and net profi ts increase up to 43%,
resulting from the business foundation which the Company has strongly established in terms
of the expansion of the branch network, the increase in effi ciency of internal management,
improvement of the competencies and advantage over the competitors in the aspect
of merchandises, increased efficiency of cost management, and the development of
the feature of services including relevant marketing strategy.
For 2011, while the economy of Thailand has been expected to maintain growth, there
remains to be many noted vulnerabilities such as the fi nancial crisis in Europe, political situation
of Thailand, and business competition. Therefore, the Company has prepared a work plan
including different strategies to achieve its goals. It is necessary to depend on the efforts and
determination of all employees in every department; cooperation of all shareholders including
the support of the trade partners; trusting and acceptance from all groups of customers of the
Company.
Finally, the Company wishes to thank those who have supported the business of the
Company in every aspect and hopefully the Company could continue to receive your cordial
cooperation and support. The Company has committed to operate and develop the business to
be prosperous for maximum benefi ts of the shareholders, trade partners, customers and more
than 6,000 employees of the Company.
Message from the Chairman
The Company has prepared a work plan
includingdifferent strategies to
achieve its goals
“
”
2
(Mr. Khunawut Thumpomkul)
Managing Director
Dear Shareholders and Stakeholders,
In 2010, many favorable economic factors indicated a positive sign such as the local and
international economic recovery and the increase of local consumer confi dence which led to the
expansion of Thailand’s Gross Domestic Products (GDP) of more than 7%, driving the Company’s
operating results to reach satisfactory level with an increase of the sales volume by 18% and net
profi t by 44%. The increases came from the sales growth of the existing branches, opening of new
branches, HomePro Expo, an increase of Private Brand products, service effi ciency enhancement,
advertising and sales promotion revenue, and other services revenues.
In 2010 the Company had expanded fi ve more branches: the Nakornpathom, Nakhonratchasima,
a third branch of Home Pro in Nakhonratchasima Province, Lamlukka, Sukhaphiban 3 and
Nakhonsitammarat. There were a total 40 service branches in 2010. In 2011 the Company plans
to expand approximately 4-5 more branches including a renovation of the existing branches in
order to enhance the spending atmosphere. Furthermore, in 2010, the Company continuously
improved its effi ciency, particularly in the IT systems, by reimplementing the latest version of the
SAP system including the Company’s entire database structure in order to reduce the duplication
of information, operate with effi ciency, and be able to access information that is used to
accurately formulate the strategy of the Company.
With 6 years of continuous operation, HomePro EXPO was a highly successful sales exhibition
and continued to grasp the interest of our customers beyond the expectation. Both events in the
periods of March and October were able to reach the satisfactory sales target. The Company
remains focused on a continuous development of service excellence with the principal goal to
deliver maximum satisfaction to customers. We also developed services under the title Home
Service to serve designing aspect in the 3 dimensional system or 3D Design, and HomeCare
to deliver services in improvement, modifi cation and maintenance by experienced technicians.
Moreover, the Company has focused on sales promotions to accommodate the demands of the
target groups, together with the introduction of an additional sales channel via the E-Commerce
system which is expected to fully operate in 2011.
In addition, the Company is proud to be a socially responsible citizen, continuously create
activities to give back to our community. In 2010 the Company had collaborated with the
Department of Health to raise the hygienic level of toilets under the operation of the Kid’s Toilets
Project by improving and/or constructing additional 219 safe and hygienic toilets for elementary
schools. As of today, the Company has implemented the project in 16 provinces, 60 schools,
with the total of 745 toilettes. At the same time, the Company has organized the One Hundred
Thousand Tree Planting Project within three years to preserve the nature of the mangrove forest
at Bangpu Recreation Center, Royal Thai Army in Samutprakarn Province. Regarding the fl ood
situation in 2010, we along with business alliances had offered a discount of 50% on the products
that victims need to rebuild their homes. Furthermore, we made donations to help victims and
invited our customers to donate at HomePro’s branches nationwide.
Subsequent to these successes, the Company wishes to thank all employees for the
determination in their work and hopefully our shareholders and trade partners would continue to
cordially support the operation of the Company’s business in the future.
Message from the Managing Director
The Companyremains focused on
a continuousdevelopment of
services with theprincipal goal to deliver maximum satisfaction
to customers
“
”
3
Business Expansion
4
Store ExpansionHomePro has expanded 5 new branches in 2010. There are 2 branches
in Greater Bangkok; Lumlukka and Sukhaphiban 3, and another 3 branches
in upcountry; Nakornpathom, Nakhonratchasima (the third outlet in
this province) and Nakhonsithammarat.
HomePro ExpoHomePro, together with our business alliances, Financial Institutions, and more than 300 manufacturers and distribu-
tors have cooperated to hold HomePro Expo No.11 and 12. The company reached total sales of more than 1,200
million baht. In addition, the activity of the fourth HomePro Champion Contest offered an opportunity for home lovers
to join interior design competition under the given themes to win prizes worth over 200,000 Baht.
5
Product Mix Expansion
6
Product Mix ExpansionAside from diversifying the product
assortment which has been sup-
ported by our local business partners,
in 2010 the company has continu-
ously developed Private Brand with
the core objective to create customer
value. We selected quality products
with reasonable price by evaluating
customer demands and behaviors.
This not only maintained our customer
base, but also differentiates us from
the competitor. To date, we have a
total of 36 private brands and over
1,000 items.
7
Service Expansion
Home Service NationwideHome Service is our service for home lovers that includes 3D system design and HomeCare consisting
of Installation Service, Maintenance Service and Home Improvement Service which are based on our true
understanding of customer needs. The customers will be served from our professional technicians who have
the knowledge in their jobs and related products. Moreover, they can help customers accurately control
budget and time. Having customers’ acceptance, HomePro has extended Home Service to all 40 branches
nationwide.
Customer Satisfaction throughHomePro Call Center 02-831-6000 Because increasing Customer Satisfaction is one of our
core objectives, in 2010, HomePro has moved forward to
develop the Call Center system to facilitate news and
information for customer. We use Information Technology,
Telecommunications and Customer Relation Management
to provide information, follow up, check and respond, and
also coordinate with the related unit to solve customers’
problems promptly.
Installation Service
Home Improvement Service
Maintenance Service
8
Benefi t ExpansionPrivileges for home lovers
HomeCard and Professional CardIn 2010, HomePro has launched new privilege card under the name of
“Professional Card” for the project owners, contractors, architects, engineers,
interior designers and other technicians. The customers with the card will get
a discount for purchasing the general product or service, or get a special discount
for purchasing the hard line product such as construction materials, hand tools
and equipments etc. Every purchase made with the card will accumulate points
to redeem a cash equivalent for use on the next purchase. Besides that, the
customers also get other privileges such as joining the workshop.
HomePro VisaHomePro has launched a new privileged design “HomePro Visa credit card”
that offers discounts for buying HomePro’s products and service, a gasoline
purchase discount, accumulating fl ight mileage etc., under the concept “Fill your
house, fulfi ll your lifestyle”.
9
Corporate Social Responsibility (CSR)
Kids’ ToiletAt the end of 2010, HomePro contributed a total
745 restrooms to 60 schools in 16 provinces
nationwide, under the Kids’ Toilets Project which
received national public toilet standard from
the Department of Health, the Ministry of Public
Health.
10
Plant GrowthUnder the “HomePro helps to reduce
global warming” project, HomePro has
the objective to plant 100,000 Avicennia
marina and LamPu trees within 3 years
at Bangpu Recreation Center, Royal Thai
Army in Samutprakarn Province. In 2010,
HomePro carried out the reforestation in
May and September.
Computer LabUnder the “School Computer Lab Project”, in
January 2010, we provided computers together with
equipment installation to Baan Boong Toey School,
Mhoo Si sub-district, Pak Chong district, Nakhonrat-
chasima Province.
Flood HelpWith social responsibility, HomePro strives to help and support
the community in any chance. Regarding the fl ood situation
in 2010, we along with business alliances had offered a discount
of 50% on the products that victims need to rebuild their homes.
Furthermore, we made donations to help victims and invited
our customers to donate at HomePro’s branches nationwide.
11
Home Product Center Public Company Limited was established on June 27, 1995 with the initial registered capital of
Baht 150 million, being a joint venture between Land and Houses Group and American International Assurance Co., Ltd.
The Company has been listed on the Stock Exchange of Thailand since October 30, 2001.
The Company was established with an objective to operate a retail business in home improvement segment by selling
goods and providing complete range of services relating to construction, addition, renovation of buildings, houses, and
residence places under the trade name of “HOMEPRO” which is the Company’s trademark. Rangsit branch is the fi rst branch of
the Company operating in September 1996. As of 31 December 2010, the Company has 40 branches in total, of which
19 branches are located in Bangkok and its vicinity and another 21 branches in upcountry provinces. There were 5 newly
opened branches in 2010, i.e. Nakhonpathom, Nakhonratchasima, Lumlukka, Sukhaphiban 3 and Nakhonsithammarat.
Information of Home Product Center Public Company Limited
Location 96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000
Telephone (66) 02-832-1000
Facsimile (66) 02-832-1400
Website www.homepro.co.th
Type of Business selling goods and providing complete range of services relating to construction, addition,
refurbishment, improvement of buildings, houses, and residence places as One Stop Shopping
Registration No. Bor Mor Jor. 665
Registered Capital 4,426,605,527 shares
Paid-up Capital 4,352,991,862 shares
Information of company in which Home Product Center Plc. holds shares from 10 percent up
Name Market Village Co., Ltd
Location 234/1 Petchkasem Road, Tambon Hua Hin, Amphoe Hua Hin, Prachaub Kirikhan Province 77110
Telephone (66) 032-61-8888
Facsimile (66) 032-61-8800
Type of Business management of leasing space together with provision of facilities services
Number of Issued Shares 50,000 ordinary shares at par value of Baht 100
Number of Held Shares 49,993 shares
General Information
12
Branches Information
1. Rangsit
161/2 Moo 2, Phaholyothin Rd., AmphoeThunyaburi, Pathumthanee 12130
2. Rattanathibet
6/1 Moo 6, Tambon Saothonghin, Amphoe Bangyai, Nonthaburi 11140
3. Fashion Island
587, 589 Ramindra Road, Khannayao, Bangkok 10230
4. Future Mart
295 Rama 3 Rd., Bangkholeam, Bangkholeam, Bangkok 10120
5. Paradise Park (Formerly Seri Center)
61 Srinakarin Rd., Nongbon, Praves, Bangkok 10260
6. The Mall Bangkae
275 Moo 1, Petchkasem Rd., North Bangkae, Bangkae, Bangkok 10160
7. The Mall Korat
1242/2 Mittraphap Rd., Amphoe Muang, Nakhon Ratchasima 30000
8. Ratchadaphisek
125 Ratchadaphisek Rd., Dindang, Dindang, Bangkok 10320
9. Ploenchit
55 Wave Place Building, Wireless Rd., Pathumwan, Bangkok 10330
10. Phuket
104 Moo 5, Tambon Rasada, Amphoe Muang, Phuket 83000
11. Chiangmai 94 Moo 4, Chiang mai-Lampang Rd., Tambon Nong Pa Kruang, Amphoe Muang,
Chiangmai 50000
12. Ramkhamhaeng
647/19 Ramkhamhaeng (Sukhaphibal 3) Rd., Huamark, Bangkapi, Bangkok 10240
13. Rama II
45/581 Moo 6, Samaedam, Bangkhunthien, Bangkok 10150
14. Prachachuen
96/27 Moo 9, Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000
15. Latphrao
669 Latphrao Rd., Chompol, Chatuchak, Bangkok 10900
16. Pattaya
333 Moo 9, Tambon Nongprue, Amphoe Banglamung, Chonburi 20260
17. Chaengwatthana
113 Moo 5, Tambon Pakkret, Amphoe Pakkret, Nonthaburi 11120
18. Had Yai
677 Petchkasem Rd., Tambon Had Yai, Amphoe Had Yai, Songkhla 90110
19. Ratchapruk
82 Moo 2, Tambon Bang Khun Kong, Amphoe Bang Kruai , Nonthaburi 11130
20. Suvarnabhumi
99/28 Moo 1, Tambon Rachatawa, Amphoe Bangplee, Samutprakarn 10540
21. Hua Hin
234/1 Petchkasem Rd., Amphoe Hua-Hin, Prachuabkhirikhan 77110
22. Samui
1/7 Moo 6, Tambon Bophut, Amphoe Kho Samui, Suratthani 84320
23. Phitsanulok
959 Moo 10, Tambon Aranyik, Amphoe Muang, Phitsanulok 65000
24. Khonkaen
177/98 Moo 17, Tambon Naimuang, Amphoe Muang, Khonkaen 40000
25. Udonthani 89/20 Moo 9, Soi Bannonglek, Tambon Markkang, Amphoe Muang,
Udonthani 41000
26. Suratthani
9/1 Moo 3, Tambon Makham Tia, Amphoe Muang, Suratthani 84000
27. Petchkasem
28 Moo 11, Nongkhangplu , Nong Kham , Bangkok 10160
28. Chonburi
15/16 Moo 3, Tambon Huykapi, Amphoe Muang, Chonburi 20000
29. Ekamai-Ramindra
14/12 Moo 8, Latphrao, Latphrao, Bangkok 10310
30. Rayong
560 Sukhumvit Rd., Tambon Noenphra, Amphoe Muang, Rayong 21000
31. Ayutthaya
80 Moo 2, Tambon Bangrod, Amphoe Bangpain, Ayutthaya 13160
32. Chiangmai – Hangdong
433/4-5 Moo 7, Tambon Mae-Hiya, Amphoe Muang, Chiangmai 50100
33. Krabi
349 Moo 11, Tambon Krabinoy, Amphoe Muang, Krabi 81000
34. Phuket – Chalong
61/10 Moo 10, Tambon Chalong, Amphoe Muang, Phuket 83130
35. Khao Yai 288 Moo 11, Tambon Nong Nam Daeng, Amphoe Pakchong, Nakhonratchasima 30130
36. Nakhonpathom
752/3 Petchkasem Rd., Tambon Huai-Charakhe , Amphoe Muang, Nakhonpathom 73000
37. Nakhonratchasima
384 Mittraphap Rd., Amphoe Muang, Nakhonratchasima 30000
38. Lumlukka
99 Moo.6, Tambon Buengkhamphroi, Amphoe Lumlukka, Pathumthanee 12150
39. Sukhaphiban 3
101 Ramkhamheng Rd. (Sukhaphiban 3), Minburi, Minburi, Bangkok 10510
40. Nakhonsithammarat
89 Nakhon-Pakpanang Rd., Amphoe Muang, Nakhonsithammarat 80000
13
Auditor Ernst & Young Offi ce Limited
33rd Floor, Lake Rajada Offi ce Complex, 193/136-137 Ratchadaphisek Rd., Klongtoey, Bangkok 10110
Tel. (66) 02-264-0777 Fax. (66) 02-264-0789-90
Share Registrar Thailand Securities Depository Co., Ltd.
4th, 6-7th fl oor Stock Exchange of Thailand Building, 62 Ratchadaphisek Rd., Klongtoey, Bangkok 10110
Tel. (66) 02-229-2800 Fax. (66) 02-359-1262-3
Legal Counsel Wissen & Co Ltd.
8th Floor Offi ce # 3801, BB Building, 54 Sukhumvit 21 (Asoke) Rd., Klongtoey-Nua, Wattana, Bangkok 10110
Tel. (66) 02-259-262 Fax. (66) 02-259-2630
Information of the referrals
Representative of Debenture Holder
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2008 (Amortization type) and
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 2/2008
TMB Bank Plc.
3000 Phaholyothin Rd., Chomphon, Jatujak, Bangkok 10900
Tel. (66) 02-264-0777 Fax. (66) 02-264-0789-90
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2009 and
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2010
CIMB Thai Bank Plc.
44 Langsuan Rd., Lumpini, Patumwan, Bangkok 10330
Tel. (66) 02-626-7503-4 Fax. (66) 02-626-7542
02-626-7218 02-626-7587
The Unsubordinated and Unsecured Debentures of Home Product Center Plc. 2/2010
Siam Commercial Bank Plc.
9 Ratchadapisek Rd., Jatujak, Bangkok 10900
Tel. (66) 02-256-2323-7 Fax. (66) 02-256-2406
14
Item Consolidated Financial Separate Financial Statements
2010 2009 2008 2010 2009 2008
Item Consolidated Financial Separate Financial Statements
2010 2009 2008 2010 2009 2008
(Unit : Million Baht)
Total Assets 16,591.99 13,872.83 13,369.07 16,543.68 13,824.31 13,318.38
Total Liabilities 10,353.78 8,662.91 8,412.86 10,332.80 8,630.51 8,373.62
Equity 6,238.21 5,209.92 4,956.21 6,210.88 5,193.81 4,944.76
Sales 24,072.76 20,329.12 18,540.27 24,073.78 20,330.43 18,541.73
Total Revenues 25,914.90 21,799.09 19,824.19 25,816.76 21,710.98 19,743.97
Net profi t 1,638.43 1,130.88 959.42 1,627.21 1,126.22 953.95
EPS (Baht) 0.38 0.26 0.50 0.37 0.26 0.49
Dividend per share (Baht)* 0.186 0.212 0.35 0.186 0.212 0.35
Paid-up Capital (Million Shares)* 4,352.99 3,703.93 1,933.61 4,352.99 3,703.93 1,933.61
Financial Information
Financial Ratio
Liquidity Ratio
Liquidity ratio (time) 0.77 0.67 0.62 0.76 0.66 0.61
Profi tability Ratio
Gross Profi t (%) 25.01 24.27 23.70 25.01 24.28 23.70
Profi t from Operation (%) 10.00 8.57 8.01 9.94 8.54 7.98
Net Profi t (%) 6.32 5.19 4.84 6.30 5.19 4.83
Return on equity (%) 28.62 22.25 20.68 28.54 22.22 20.60
Operation Effi ciency Ratio
Return on assets (%) 10.76 8.30 7.48 10.72 8.30 7.47
Financial Analysis Ratio
Debts to Equity ratio (time) 1.66 1.66 1.70 1.66 1.66 1.69
Interest coverage ratio (time) 33.89 27.56 22.37 33.32 27.14 21.91
Remark : In the Extraordinary Shareholders’ Meeting No. 1/2010 held on 4th October 2010, the meeting approved for the payment of interim dividends
at the rate of 0.186 Baht/share by dividing into cash dividends at the rate of 0.0193 Baht/share and stock dividend at the rate of 0.1667 Baht/share.
The meeting also approved the increase of the registered capital for the amount of 632.39 million shares in order to support the payment of stock
dividends and the execise of warrant under the employee stock option plan No. 4 (ESOP 4).
15
Nature of Business
VisionTo be the leader of home center business in Thailand and South East Asia.
Mission1. We will offer the value in terms of products, services, and prices to our customers, to be the fi rst on customer’s mind.
2. We will collaborate with our business alliance to improve effi ciency which leads to increasing of mutual benefi ts.
3. We will give the importance to and develop personnel to have working effi ciency and responsibility to customers.
4. We will manage professionally according to the good governance, and to build good relationship with society and community.
5. We will seek new business opportunity for the future and to create reasonably incremental value for associated parties.
Nature of Business of Home Product Center Public Company Limited The Company was established with objective to operate a retail business in home improvement segment by selling
goods and providing complete range of services relating to construction, addition, refurbishment, renovation, improvement of
buildings, houses, and residential places through One Stop Shopping Home Center under the trade name of “HomePro” which
is the Company’s trademark. Presently, the Company has the nature of business as follows;
1. Providing home improvement products, by having 3 groups
To provide the services relating to retail business
Due to most of the Company’s products having instruction details and working process which customers need to
understand, the Company has provided various kinds of related services by giving consultation and useful information for
customers to make decision to select the products that mostly match the usage objectives. In addition, the Company has
provided HomeCare services, including installation service, repairing, and maintenance of equipments, electrical appliance,
system work, painting service, tile service etc., product delivery service, technician and contractor selection and placement
service, products exchange service, as well as arranging DIY demonstration (Do It Yourself) and workshop for customers etc.
2. To provide space rental service for retail tenant stores
The Company has arranged for its rental space in some branches to provide the service for retail tenant shops. At the
sametime, the Company has developed the format of its branches so called HomePro Village which operates the business
in the form of full service shopping center. Inside the project, in addition to HomePro’s branch, there are areas of shopping
center in which most of tenants consist of supermarkets, restaurants, banks, bookstores, and IT shops etc.
As of December 31, 2010, the Company has a total of 4 branches in the format of HomePro Village: Suvannabhumi
branch, Hua Hin branch, Phuket-Chalong branch and Ratchapruk branch.
Nature of Business of Subsidiary Market Village Co., Ltd. (“Market Village”) was incorporated, on May 26, 2005, located at 234/1 Petchkasem Road,
Tambon Hua-Hin, Amphoe Hua-Hin, Prachaubkirikhan Province, in which Home Product Center Plc. holds 99.99% of total
shares. Presently, its registered capital is Baht 5 million. Market Village was formed with objectives to manage rental space
for Home Product Center Plc., and to provide utilities services to tenants. In the fi rst quarter of 2006, it commenced
operation on the “Hua-Hin Market Village” project which is located at Petchkasem Road, Amphoe Hua-Hin, Prachaubkirikhan.
Hard Line 1 Hard Line 2 Soft Line
Construction material, Home improvement
accessories, Bathroom and Sanitaryware
Kitchenware, Electrical appliances,
Electrical equipment and Lighting
Bedding and Household
decorative goods
16
Revenue Structure Revenue of Company and subsidiaries consist of sales revenue and other revenues. Total structure of revenue can be classifi ed
by the line of products as follows:
Item
2010 2009 2008
Amount % Amount % Amount %
1. Revenue from retailing
- Hard Line 1 10,108.3 39.0 8,604.1 39.5 7,782.2 39.3
- Hard Line 2 9,742.3 37.6 8,123.0 37.3 7,520.9 37.9
- Soft Line 3,989.4 15.4 3,428.9 15.7 2,998.9 15.1
2. Revenue from project sales 1 232.7 0.9 173.1 0.8 238.3 1.2
Total Revenue from Sales 24,072.8 92.9 20,329.1 93.3 18,540.3 93.5
3. Other incom 2 1,842.1 7.1 1,470.0 6.7 1,283.9 6.5
Total 25,914.9 100.0 21,799.1 100.0 19,824.2 100.0
Remark 1. Revenue from project sales is from the purchase of project owners which cannot be categorized per product lines.
2. Other income is revenue from rental of space, in-store promotion fee etc.
Supply of Products The Company sources products by:
1. Purchase order. The Company makes the purchase order of products categorized by product lines from both domestic
and overseas manufacturer or sales agent, in which the Company mainly emphasizes on quality and variety of products.
Currently, the Company sources products from more than 700 manufacturers and sales agents which, throughout the
time, provided good support and cooperation, in terms of advertisement, public relation, joint sale promotion, joint planning of sale
strategies, support and joining new branch to be opened.
2. Make to order. The Company orders manufacturing of Private Brand and House Brand from both domestic and overseas
manufacturer. The Company will initially select the manufacturer by considering factors including being certifi ed of manufacturing
standard, reputation, quality of service and types of harmonized operation. Moreover, the Company also visits the factory and
inspects products in order to ensure the overall quality.
Market and Competitive Condition The Company is the leader in home improvement retailing which offers a full range of complete services. As for competitors,
the Company has classifi ed other operators who sell goods in similar nature as follows:
1. Operators of Home Center
• HomeWorks is a retail business unit of home products in Central Retail Corporation Group of Companies. There are
currently 7 branches in operation.
• Global House operates the business of selling products in the form of warehouse store. Products include construction
materials, decorative goods, tools, equipments to be used for construction, addition, decoration of house and garden.
It is managed by the Siam Global House Plc. There are currently 11 branches in operation.
However, the Company believes that this business still has plenty of potential and marketing opportunities and that the
increase of such business operators will help stimulate consumers familiarity and more rapidly change their behavior to purchase
products from Modern Trade home centers.
(Unit : Million Baht)
17
Risk Factors
The Company separately explains the risk factors which may affect the operations of business as follows:
1. Business Risk Although the economic situation throughout the year 2010 had confronted many unfavorable factors such as uncertainty of
the world economy, local political instability, fl uctuation of the Thai Baht and fund fl ow, and several natural calamities, the Thai
economy expanded by more than 7% due to the increase of export and services which was in line with the economic recovery of
important trading partner countries as well as the continuous recovery of the local demand. All of these factors had shown their
effects in the second half of the year.
The overall retail business in 2010 had a fair expansion which followed the better economic situation, more stable political
situation, the government’s economic stimulus policy, and salary increase of all government sectors. As a result, the consumers
had regained their confi dence in the economy, employment, and future income.
The Company, however, has closely kept abreast of the economic and political situation in order to plan and fi nd measures
and strategies to prevent the risks that may occur, and to operate the business so as to successfully reach the planned target.
1.1 Inventory
As of the 31st December 2010, 2009, and 2008, the Company had net Inventory equal of Baht 3,714.23 million, Baht
2,905.14 million, and Baht 2,728.08 million respectively. The average inventory turnover periods of 2010 and 2009 were at
66 days, and of 2008 was at 67 days. The decrease in inventory turnover period refl ects the success in adopting a marketing
strategy and our developing capability of inventory management.
However, the Company has been continuingly attempting to increase the turnover of Inventory, whether by developing
of service quality of sale persons, continual sales promotion, improving products display and internal appearance of branches,
regularly adding new products to the store, including attempting to reduce the volume storing level. For the reduction of inventory
in 2006, the Company has expanded space of the distribution center. As of 31st December 2010, the total area amounted to
44,000 square meters and the Company also plans to expand the distribution center area, in order to be capable of supporting
the increase of branches in the future and to manage inventory more effi ciently.
2.2 Investment
As of 31st December 2010, the Company has branches in operation totaling 40 branches. It has expanded 5 new branches
in 2010. There are 2 branches in Greater Bangkok; Lumlukka and Sukhaphiban 3, and another 3 branches in upcountry;
Nakhonpathom, Nakhonratchasima (the third outlet in this province) and Nakhonsithammarat.
2. Specialty Store. Retail businesses who focus on selling specifi c goods as follows:
• Ceramic, Sanitaryware, and Kitchenware stores i.e. Boonthavorn, Grand Home Mart.
• Furniture and Home decoration stores i.e. Index Living Mall
• Retail stores that sell only construction materials i.e. Cement Thai Home Mart, Thai Watsadu.
• Other Specialty Stores.
3. Operators of large retail business in the group of Hypermarket. These businesses mainly aim at selling of consumer goods
and edible products, not home products. While some groups of products sold may overlap, their main customer targets
are different.
18
Since the Company has a policy to continuously increase branches, there may be a risk with respect to the result
of performance of new branches that may not be as forecasted. This will affect the result of the overall operation. The Company
avoids the risk by analyzing the investment return before every investment decision, and preparing the action plan and annual
budget. When a new branch starts operating, the results of operations and progress plan are being followed up on a monthly
basis. This will facilitate the Company to set the plan for handling the risk and to solve problems which may occur in
timely manner.
1.3 Operation
The Company has the risk of loss or damage of property due to the operation of the sale personnel, and has set up a work
unit to handle with such risk, that is Loss Prevention Unit, which is responsible for laying preventive and safety system against
various risks of the Company including the risk that the employees may incur from the operation.
1.4 Accounts Receivable
The Company has divided the customers into 2 groups: retail customer and group of contractor and project owner.
The retail customer is customer at store who purchases products by cash, the group of contractor and project owner is customer
who purchases products by credit term. The major sales revenue comes from retail customer. As in 2010 the proportion of
cash sales was 99.0% to total sales. For 2009 and 2008, the proportion was at 99.1% and 98.7%. However, for the credit
sales, the Company will consider only project that has reliable fi nancial status, which the company has analyzed the result of
operation and fi nancial status or having the contractor place with a letter of guarantee as security against debt payment, etc.
As of 31st December 2010, 2009, and 2008, the Company has accounts receivable of Baht 164.02 million, Baht 144.58
million, and Baht 160.63 million, being credit card debtor of Baht 80.44 million, Baht 65.55 million, and Baht 34.06 million
respectively. The allowance for doubtful bad debts was set to be approximately Baht 2.65 million, Baht 5.40 million, and Baht
25.64 million, which the management have already estimated the debt repayment period and have evaluated fi nancial status
of each debtor. The Company believes that the allowance for doubtful bad debts has been set suffi ciently and appropriately.
2. Competitive Risk The Company operates a retail business with products relating to houses and residential places where there are both direct
and indirect competitors such as retailing shops, department stores, specialty stores, and general small retail shops. The Company
has differentiated itself by focusing on offering a variety of products and complete range of services for construction, repairing,
decoration, and addition. Also, the Company provides a team of experts for several kinds of system work such as electrical system,
plumbing, and related installation, etc.
Furthermore, the Company has concentrated on strengthening effi ciency of internal management in order to improve, its
capability and advantages against both local and international competition in the future.
3. Legal Risk The laws which are relevant and may cause a risk to business operation are as follows:
3.1 The Bangkok Metropolis Town Planning Law
Announced on 16th May 2006, with objectives to be a guidance on the development of Bangkok Metropolis and
to support the expansion in the future. If there shall be modifi cation of the town planning in the future, the Company will not
be affected from this limitation, as the Company had put its investment to cover almost all areas of Bangkok. On the other
hand, it is being seen as a restriction on business expansion of competitor, which is a benefi t to the Company.
3.2 The Trade Competition Act
In 2006, the Trade Competition Commission has adopted its resolution on the Guideline for Unfair Trade Practices in
the Wholesale/Retail Business, by virtue of the Trade Competition Act B.E. 2542 into 8 ways as follows:
19
1. Unfair price fi xing.
2. Unfair request for economic benefi t.
3. Unfair returning of goods.
4. Unfair use of agreement of sell on consignment.
5. Coercion to Purchase or to pay for service fee.
6. Unfair use of personnel of manufacturer/vendor.
7. Refusing to accept products by order/customized made as its own private brand, or of House Brand.
8. Other unfair practices.
Such 8 clauses of Guideline for unfair trade practices have affected the modern retail business. However, in order to perform
the business in conjunction with the above announcement, the Company has agreed with its business partner in
amending the agreement to be more specifi c and clearer.
At present, the Thai Chamber of Commerce has made a new draft amendment of guide line, which is now under
negotiation between the Thai Chamber of Commerce and the Retailers Association in order to fi nd a fair solution among the
manufacturers and the wholesalers and retailers.
3.3 Anti – Dumping and Countervailing Act B.E. 2542 (1999)
At present, the Company has imported many categories of goods from overseas. In 2010, there will be also a reduction
in import duty for goods imported from a country that is a party in the Agreement on Economic Cooperation. Therefore,
according to the agreement, a manufacturer in Thailand may possibly fi le complaint regarding dumping.
20
1. Land and Houses Public Company Limited 1,128,118,175 30.26
2. Quality Houses Public Company Limited 759,959,070 20.38
3. American International Assurance Company Limited 185,900,145 4.99
4. Mr. Niti Osathanuklor 178,339,985 4.78
5. Thai NVDR Company Limited 161,942,217 4.34
6. Mr. Manit Udomkunnatum 116,126,806 3.11
7. BNP PARIBAS SECURITIES SERVICES LUXEMBOURG 72,420,800 1.94
8. HSBC (Singapore) Nominees PTE Limited 54,518,702 1.46
9. Mr. Khunawut Thumpomkul 52,441,480 1.41
10. Sarasin Co., Ltd. 48,087,430 1.29
11. Others 970,663,686 26.03
The fi rst ten shareholders holding the shares on the closing date as of October 15, 2010 having paid-up registered capital in the total of 3,728,518,496
shares consists of:
Name of natural person / Juristic Person
Name - Surname
Rank No. of Shares
Representative of Shareholders
% of total Paid-up shares
Position
Remark: The above table shows the number of shares before the distribution of interim stock dividend on 29 October 2010, which the Company has distributed
to shareholders whose names appeared on the closing date of the registration book on 15 October 2010, at the rate of the existing 6 shares per 1 share
of stock dividend.
Shareholdering Structure
Foreign Limit Foreign shareholders are capable to hold shares and appear their names on the Company’s asset registration of totaling
not exceeding 30% of the issued shares and paid up. As of 30th December 2010, the shares of the Company held by foreigner
was at approximately 15%.
Director who is representative of the group of major shareholdersThese following directors are the representative of major shareholders which hold shares of the Company at more than 20%
1. Mr. Anant Asavabhokhin Land and Houses Plc. Chairman
2. Mr. Rutt Phanijphand Quality Houses Plc. Director
3. Mr. Joompol Meesook Quality Houses Plc. Director
4. Mrs. Suwanna Buddhaprasart Quality Houses Plc. Director
5. Mr. Naporn Soonthornchitcharoen Land and Houses Plc. Director
21
Internal Audit Department
Senior Vice PresidentMerchandising - Hard Line and
International Business
Senior Vice PresidentMerchandising - Soft Line
Senior Vice PresidentOperation
Senior Vice PresidentMarketing
Senior Vice PresidentDistribution Center
Senior Vice PresidentMerchandising Home Electric Product
and The Power
Senior Vice PresidentInternational Merchandising and
Sanitaryware and Tile product
Senior Vice PresidentBusiness Development
Senior Vice PresidentHuman Resource and Loss Prevention
Senior Vice PresidentInformation Technology
Senior Vice PresidentAccounting Treasury and Legal
Nomination andRemuneration Commitee
Board of Directors
Managing Director
Executive Directors Audit Commitee
Organization Chart
22
The structure of Company’s management consists of the Board of Directors, Sub-Committees, and Executive Directors.
There are 3 sets of the Sub-Committees i.e. Executive Director, Audit Committee, and Nomination and Remuneration
Committee, having details as follows:
1. Board of Directors has totaling 12 persons, consisting of 4 Independent Directors, 1 Director who is management,
and 7 Non-Executive Directors, as follows:
Position
1. Mr. Anant Asavabhokhin Chairman
2. Mr. Rutt Phanijphand Director, Executive Director and Chairman of the Nomination and Remuneration Committee
3. Mr. Joompol Meesook Director
4. Mr. Apichat Natasilapa Director and Nomination and Remuneration Committee
5. Mrs. Suwanna Buddhaprasart Director
6. Mr. Manit Udomkunnatum Director and Chairman of the Executive Director
7. Mr. Naporn Soonthornchitcharoen Director and Executive Director
8. Mr. Khunawut Thumpomkul Director, Executive Director and Managing Director
9. Mr. Pong Sarasin Independent Director
10. Mr. Apilas Osatananda Independent Director and Chairman of the Audit Committee
11. Mr. Thaveevat Tatiyamaneekul Independent Director and Audit Committee
12. Mr. Chanin Roonsamrarn Independent Director, Audit Committee and Nomination and Remuneration Committee
Remark : The company secretary is Ms. Wannee Juntamongkol, Senior Vice President - Accounting, Treasury and Legal.
Management
Authorized Signatory Directors on the Company
1. Mr. Anant Asavabhokhin 5. Mr. Manit Udomkunnatum
2. Mr. Joompol Meesook 6. Mr. Naporn Soonthornchitcharoen
3. Mr. Apichat Natasilapa 7. Mr. Khunawut Thumpomkul
4. Mrs. Suwanna Buddhaprasart
Two of the seventh authorized signatory Directors are to co sign with the company’s stamp.
Roles and Responsibilities of the Board of Directors
1. To manage the Company, in compliance with the Company’s objectives and Articles of Association and the lawful
resolutions of shareholders’ meeting, and has power to perform any act specifi ed in Memorandum of Association.
2. The Board has power to appoint directors as the Executive Directors in a number as determined by the Board,
comprising of Chief Executive Director, Deputy Chief Executive Directors, who will perform any tasks designated by
the Board of Directors.
3. The Board may appoint any person(s) to operate the Company’s businesses under the supervision of the Board or
empower the said person(s) to have power as deemed suitable by the Board. At the time deemed appropriate by
the Board, the Board may revoke, cancel, or change the said power.
4. The Board must hold a meeting at least once every 3 months.
5. The directors must not operate the business of the same nature as and being in competitive with the Company’s
business or be a partner of the ordinary partnership, or be a partner with unlimited liabilities of the limited partnership or
be a director of a private company or other companies of the same nature as and being in competition with the Company’s
Name - Surname
23
business,whether for his/her benefi ts or other person(s) benefi ts unless it is notifi ed to the shareholders’ meeting prior
to the resolution for his/her appointment.
6. The director must immediately inform the Company if he/she has direct or indirect stake in any contract or even
holds shares or debentures in the Company and its affi liates.
7. The director, who has interest in any issue, shall have no right to vote on that issue.
8. Investment propositions concerning store expansion or high value non-routine investments except for the following
issues must be approved by shareholders fi rst:
• Matters that laws and regulations of the Securities and Exchange Commission (SEC) and the Stock Exchange
of Thailand (SET) require the resolutions from the Shareholder’s Meeting.
• The related transaction being worth more than 3% of the latest fi nancial statements’ net tangible assets.
• The acquisition or disposition of core assets with value more than 50% of the latest fi nancial statements’ assets.
9. In the event of tie votes, the Chairman of the Board will have a casting vote.
Defi nition of Independent Director
“Independent Director” means the director who is independent in expressing his opinion to the operation of the Company,
must be a person who has no involvement or interest to the result of operation either directly or indirectly. The qualifi cations of
the Independent Director are as follows:
1. Hold share not more than 1% of paid up capital of the Company, affi liates company, joint company, associated company,
including the shares held by the related person.
2. Being independent either directly or indirectly of both fi nancial and management of the Company or joint company or
major shareholders of the Company, and having no benefi t or interest in such manner within 2 years before being
appointed as the Independent Director, unless the Board of Director has carefully considered and see that such
participation in having benefi t or interest will not affect the duty performing and the independence in giving an opinion.
3. Must not be the Director who has been appointed as the representative to maintain the interest of the Director of
the Company, major shareholders, or shareholders who are related to the major shareholders of the Company.
4. Must not participate in management and must not be employee, staff or consultant who receives regular salary in
the Company, affi liate company, joint company, company or major shareholder of the Company.
5. Must not be related person or relatives of the executive or major shareholders of the Company.
6. Capable to perform his duty and express opinion or report result of duty performing as assigned by the Board of Directors,
freely and not under the control of the Executive or major shareholders of the Company, including related person
or close relatives of such person.
7. No other character that causes the inability to give opinion to operation of the Company independently.
Terms of the Director of the Company
According to every Annual General Shareholders Meeting, the directors shall retire from the position of one third,
the directors who have been longest in position shall retire. A retiring director is eligible for re-election, and beside the
retirement, the directors may leave from his position when:
1. Death
2. Resignation
3. Lacking of qualifi cations or possess prohibited character under Section 68 of the Public Company Act B.E. 2535
4. The Shareholders Meeting resolved to dismiss under Section 76 of the Public Company Act B.E. 2535
5. Dismissal ordered by the Court
24
6. Review and jointly consider with the auditor the fi nancial report, remarks and suggestions.
7. Consider, select, propose to appoint person who is independent to be an auditor of the Company and propose remuneration
of the auditor to the Board of Directors of the Company.
8. Consider the independence of internal audit unit, also approve the appointment, relocation and termination of employment,
including to consider result of annual performance of the chief of internal audit.
9. Consider and approve regulations of internal audit offi ce.
10. Consider and approve annual internal audit plan including to consider the scope of audit and audit plan of internal audit
and the auditor of the Company, in order to have supportive connections.
11. Harmonize the understanding into the same line between Audit Committee, management, Internal Auditor and
External Auditor.
12. Review and consider the result of audit reporting and recommendation.
13. Review and amend the regulations of Audit Committee usually once a year to be up to date and appropriate with the
environment of organization.
14. Carry on examination of the matters notifi ed by the auditor of the Company. In case the auditor fi nds doubtful behavior
that the director, manager or person who is responsible for the operation of the Company has committed an offence as
stipulated in the Securities and Stock Exchange Act (The 4th Issue) B.E. 2551, and report the result of preliminary
examination to the Offi ce of the Securities Exchange Commission and auditor of the Company within 30 days from
the date receiving notifi cation from the auditor.
15. Perform any other act as stipulated by law or the Board of Directors of the Company under approved by the
Audit Committee.
16. Making report on the directing and supervising of the business activities of the Audit Committee, by disclosing it in the
annual report of the Company, which such report must be signed by the Chairman of the Audit Committee and must
consist of minimum information as follows:
16.1 Opinion in relation to accuracy, completeness, reliability of the fi nancial report of the Company.
16.2 Opinion in relation to suffi ciency of internal control system of the Company.
16.3 Opinion in relation to the compliance with the law of Securities and Stock Exchange and regulations of the
Stock Exchange or law relating to business of the Company.
16.4 Opinion in relation to the appropriate of the External auditor.
16.5 Opinion in relation to the transaction that may have a confl ict of interest.
16.6 Number of the Audit Committee’s meeting, and the attending to the meeting of each Audit Committee.
16.7 Overview opinion or remarks that the Audit Committee have received from performing his duty under the charter.
16.8 Other information that the shareholders and general investors ought to know, under the scope of duty and
responsibility which have been assigned by the Board of Directors of the Company.
Terms of holding offi ce
1. Taking position for 3 years of each time, including additional appointment and removal from Audit Committee.
2. In case retire from position, such person may be re-appointed.
3. Audit Committee shall leave from the position when:
3.1 Completion of term
3.2 Leave from being a director of the Company
3.3 Resignation
3.4 Death
3.5 Lacking of qualifi cation to be an Audit Committee under this regulations or by the rules of the Stock Exchange
of Thailand.
3.6 The Board of Director has resolution to remove from the position.26
1. Mr. Rutt Phanijphand Chairman of the Nomination and Remuneration Committee
2. Mr. Chanin Roonsamrarn Nomination and Remuneration Committee
3. Mr. Apichat Natasilapa Nomination and Remuneration Committee
4. In case of resigning, the resignation letter shall be submitted to the Chairman of the Company not less than 30 days
in advance, the approval shall be made by Board of Directors who shall then send copy of resignation letter to the Stock
of Exchange of Thailand.
5. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualifi ed to be an Audit
Committee in order to fi ll up the number of Audit Committee as stipulated in regulations. Persons who will be appointed
as the Audit Committee shall be in position only for the time period remaining of the former Audit Committee, and
shall inform the Stock of Exchange of Thailand.
2.3 Nomination and Remuneration Committee consists of:
PositionName - Surname
Remark: On January 10, 2011, the Nomination and Remuneration Committee No. 1/2011 has a resolution to appoint Mr. Nitat Aroontippaitoon,
Senior Vice President - Human Resource and Loss Prevention, to be the Nomination and Remuneration Committee’s secretary.
Roles and Responsibilities
1. Select persons who deserve to be nominated as the new Directors, or select of Managing Director.
2. Determine the procedures and regulations on selection of Directors or Managing Director to ensure the transparency.
3. Set up the procedures and criterions of paying which have been fair and proper remuneration and other benefi ts to the
Board of Directors and Sub-Committee appointed by the Board of Directors, and then propose to the Shareholders
meeting for approval.
4. Consider and guide on determining remuneration and other benefits concerning duty and responsibility of the
Managing Director including consider the criterions and evaluation of operation in order to determine annual remuneration
from the operation.
5. Review the structure of criterions of remuneration on items 3 and 4 to fi t with duty, responsibility, operation result of
the Company, and harmonized with market condition.
6. Consider salary budget, annual merit increase and annual reward, welfare, including other benefi ts of personnel of the
Company and its subsidiary.
7. Prepare operation report presenting to the Board of Directors at least once a year. Set up policy of overall Employee Stock
Option Plan as proposed by the Managing Director.
8. Perform other duties as assigned by the Board of Directors.
Terms of holding offi ce
1. Nomination and Remuneration Committee shall leave from the position when
1.1 Completion of term
1.2 Leave from being a Director of the Company
1.3 Resignation
1.4 Death
1.5 The Board of Director has resolution to remove from position.
2. In case of the resigning, the resignation letter shall be submitted to the Chairman of the Company of not less than 30 days
in advance, approved by the Board of Directors.
27
3. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualifi ed to be the
Nomination and Remuneration Committee, in order to fi ll up the number as stipulated in the regulations by the Board
of Directors.
Selection of Directors
The Company appointed the Nomination and Remuneration Committee to determine selection of appropriate person to
be nominated as the Director or Managing Director, by considering persons who have knowledge, capability and experience
as required by the Company, and must not have the prohibited qualifi cation under the rules of the Securities Exchange
Commission and Stock Exchange of Thailand, the relevant laws, rules or other regulations., upon approval, the Nomination
and Remuneration Committee will propose to the Shareholders Meeting in order to be adopted for the appointing as the
Directors of the Company.
Criteria of vote to appoint the Company’s Director in the Shareholders Meeting:
1. Each Shareholder has the vote equivalent to one vote per one share held.
2. Each Shareholder shall use all of his/her voting rights under item 1 to elect one person or more persons as the Director,
but is not capable to share his/her varied voting rights to any person.
3. A person, who receives highest votes gradually order would be elected as director subject to the number of Directors
allowed to be elected in such meeting. In the event of persons who have been elected in the lower order have received
equal votes but there will be over the number of allowed or elected Directors in such election, the Chairman of such
Meeting shall have a casting vote.
In 2010, there were 4 Directors who must be retired by rotation as follows: 1. Mr. Joompol Meesook 2. Ms. Suwanna
Buddhaprasart 3. Mr. Thaveevat Tatiyamaneekul and 4. Mr. Chanin Roonsamrarn. The Nomination and Remuneration Committee,
having considered in accordance with the criteria of selection, viewed that all 4 directors have the qualifi cations required
according to the Public Limited Company Act B.E. 2535 and also have knowledges, abilities, and experiences in business relating
to the Company’s operation. In this regard, such matter has been proposed through the resolution of the board of directors of
the Company in order to be presented as an agenda in the Annual General Meeting of Shareholders of 2010 in which the meeting,
then, has approved to re-appoint the said directors to their offi ce for another term.
Roles and Responsibilities of Managing Director
As resolved in the Board of Directors Meeting no. 7/2544 on 21st June 2001 and the Board of Directors Meeting
no. 9/2544 on 16th August 2001, the Managing Director who has authority to manage the Company as assigned by the Board
of Directors and shall strictly and carefully manage the Company according to the framework or budget approved by the Board
of Directors, and maintain the best interest of the Company and shareholders. Authorization of the Directors also covers other
matters as follows:
1. Daily Operation and, management of the Company.
2. Approval of expense on operation, expense of selling and administrative and capital expenditure according to the budget
approved by the Board of Directors, however, not including the loan and guarantee.
3. Filling the post, appointing, removing, relocating, promoting, reducing or cutting salary or wages, disciplinary punishmen
to the staff and employees, and order the staff and employee to leave from position according to the regulations as
stipulated by the Board of Directors.
28
4. Other operation as assigned by the Board of Directors, by having following authorities:
• Having authority to administrate under the objectives, regulations, policy, rules, order, and resolution of the Board
of Directors meeting and the resolution of the Shareholders Meeting.
• Having authority to operate and enter into juristic act, agreement, order or any letter for contacting with the government
authority, State Enterprise, and other person, including authorities to act as necessary and proper in order to succeed
on the above mentioned acts.
• Having authority to appoint other person to be proxy to act on specifi c work, which must be under the rules, regulations,
or order that the Board of Directors or as imposed by the Company.
However, the Managing Director is unable to approve transaction that himself or person who may have confl ict of interest
in any other ways with the Company or its subsidiary.
Secretary of the Company
On 20th March 2008, the Board of Directors has resolution to appoint Ms. Wannee Juntamongkol as the Secretary
of the Company in order to comply with the “Securities and Stock Exchange Act (4th Issue) B.E. 2551”. The Company
has already notifi ed the name and place to retain documents of the Company to the Securities and Exchange Commission
on 26th August 2008.
Authority of Secretary of the Company
1. Facilitate for activities of the Board of Directors.
2. Follow up and coordinate with relevant person in order to be in compliance with the resolution of the Board of Directors,
and closely report the result of such operation.
3. Arrange and maintain documents as follows:
• Director registration.
• Notice calling for the Board of Directors Meeting, Minutes of the Board of Directors Meeting, and the Annual Report
of the Company.
• Notice calling for the Shareholders Meeting and Minutes of the Shareholders Meeting.
4. Maintain the report on interests which have been reported by the directors or executives.
5. Manage other matters as stipulated by the Capital Market Supervisory Board.
3. Management as December 31, 2010 consists of:
1. Mr. Khunawut Thumpomkul Managing Director
2. Mr. Vathunyu Visuthikosol Senior Vice President Business Development
3. Mr. Anuchar Jitjaturunt Senior Vice President Merchandising - Hard Line and International Business
4. Ms. Jarusopha Thumkathikanon Senior Vice President Merchandising - Soft Line
5. Ms. Tharathip Trimankhong Senior Vice President International Purchasing and Sanitaryware and Tile product
6. Mr. Weerapun Ungsumalee Senior Vice President Operation
7. Ms. Jariya Sorathorn Senior Vice President Merchandising - Home Electric Product and The Power
8. Mr. Nat Jaritchana Senior Vice President Marketing
9. Mr. Chaiyuth Karunyasopon Senior Vice President Distribution Center
10. Mr. Hanchai Laowpanitchakorn Senior Vice President Information Technology
11. Mr. Nitat Aroontippaitoon Senior Vice President Human Resource and Loss Prevention
12. Ms. Wannee Juntamongkol Senior Vice President Accounting, Treasury and Legal
Position DepartmentName - Surname
29
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hokh
in
60
- M
.B.A
. Tham
masat
Univ
ers
ity
0.1
5
- 1995 -
Pre
sent
Chairm
an o
f th
e B
oard
of D
irecto
rs
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
C
hairm
an
-
M.S
. In
dustr
ial E
ngin
eering,
2005 -
Pre
sent
Chairm
an o
f th
e B
oard
of D
irecto
rs
Land
and
House R
eta
il B
ank P
lc.
Fin
ancia
l institu
tion
Illin
ois
Institu
te o
f Te
chnolo
gy,
US
A
2004 -
Pre
sent
Chairm
an o
f th
e B
oard
of D
irecto
rs
Q-C
on E
aste
rn C
o.,
Ltd
. C
onstr
uctio
n s
up
plie
s m
anufa
ctu
ring
-
Bachelo
r of C
ivil
Engin
eering
1994 -
Pre
sent
Chairm
an o
f th
e B
oard
of D
irecto
rs
Qualit
y C
onstr
uction P
rod
ucts
Plc
. C
onstr
uction s
up
plie
s
Chula
longkorn
Univ
ers
ity
Bangkok C
hain
Hosp
ital P
lc.
Hosp
ital
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
1985 -
Pre
sent
Chairm
an o
f th
e B
oard
of D
irecto
rs
Land
and
Houses P
lc.
Pro
pert
y d
eve
lop
ment
Directo
r C
ert
ifi cation P
rogra
m
and
Chie
f E
xecutive
Offi
cer
(DC
P) 2004
1983 -
Pre
sent
Directo
r Q
ualit
y H
ouses P
lc.
Pro
pert
y d
eve
lop
ment
M
r. A
pic
hat
Nat
asilp
a 53
- M
BA
, U
niv
ers
ity
of S
outh
ern
Calif
orn
ia
- -
2001 -
Pre
sent
Directo
r and
Nom
ination
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
irecto
r and
Nom
ination
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
and
Rem
unera
tion C
om
mitte
e
and
Rem
unera
tion C
om
mitte
e
D
irecto
r A
ccre
ditation P
rogra
m
1999 -
Pre
sent
Directo
r P
ine B
rid
ge (Thaila
nd
) Lim
ited
In
vestm
ent
consultant
(D
AP
) 2004
D
irecto
r M
illenniu
m M
icro
tech (Thaila
nd
)
Sem
icond
ucto
r p
ackagin
g
C
o.,
Ltd
M
r. Jo
om
po
l M
eeso
ok
62
- M
BA
T
ham
masat
Univ
ers
ity
0.0
3
- 2001 -
Pre
sent
Directo
r H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
irecto
r
- B
S.A
RC
H, F.
E.U
., P
hilip
pin
es
2006 -
2010
Directo
r C
entr
e P
oin
t M
anagem
ent
Co.,
Ltd
B
uild
ing m
anagem
ent
-
BS
.CE
, F.
E.U
., P
hilip
pin
es
2004 -
2010
Directo
r Q
-Con E
aste
rn C
o.,
Ltd
C
onstr
uction s
up
plie
s m
anufa
ctu
ring
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
1997 -
2010
Directo
r Q
.H.
Inte
rnational C
o.,
Ltd
(B
VI)
Ove
rseas p
rop
ert
y d
eve
lop
ment
Directo
r A
ccre
ditation P
rogra
m
D
irecto
r H
arb
ourv
iew
Co.,
Ltd
H
ote
l in o
vers
eas
(D
AP
) 2004
1995 -
2010
Directo
r Q
.H.
Inte
rnational C
o.,
Ltd
.
Pro
pert
y d
eve
lop
ment
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
1994 -
2010
Directo
r Q
ualit
y C
onstr
uction P
rod
ucts
Plc
. C
onstr
uction s
up
plie
s m
anufa
ctu
ring
Directo
r C
ert
ifi cation P
rogra
m
1993 -
2010
Directo
r C
asa C
o.,
Ltd
. P
rop
ert
y d
eve
lop
ment
(D
CP
) 2008
D
irecto
r and
Ad
visor
of P
resid
ent
and
Q
ualit
y H
ouse P
lc.
Pro
pert
y d
eve
lop
ment
Chie
f E
xecutive
Directo
r
1992 -
2010
Directo
r Q
.H M
anagem
ent
Co.,
Ltd
P
roje
ct
after-
sale
serv
ice
M
r. R
utt
Pha
nijp
hand
63
- M
.S. in
Busin
ess A
d.,
- -
2001 -
Pre
sent
Directo
r, C
hairm
an o
f th
e N
om
ination
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
irecto
r E
xecutive
Directo
r and
Fort
Hays
Kansas S
tate
Univ
ers
ity,
and
Rem
unera
tion C
om
mitte
e a
nd
C
hairm
an o
f th
e N
om
ination a
nd
H
ays
, K
ansas, U
SA
.
Executive
Directo
r
R
em
unera
tion C
om
mitte
e
-
Bachelo
r D
egre
e o
f S
cie
nce
2009 -
Pre
sent
Chairm
an o
f th
e E
xecutive
Directo
r LH
Fin
ancia
l Gro
up
Plc
. Fin
ancia
l institu
tion
Kasets
art
Univ
ers
ity
2006 -
2009
Ind
ep
end
ent
Directo
r a
nd
IRP
C P
lc.
Energ
y
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
A
ud
it C
om
mitte
e’s
Directo
r
Directo
r A
ccre
ditation P
rogra
m
2005 -
Pre
sent
Directo
r and
Land
and
House R
eta
il B
ank P
lc.
Fin
ancia
l institu
tion
(DA
P) 2003
C
hairm
an o
f th
e E
xecutive
Directo
r
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
In
dep
end
ent
Directo
r a
nd
B
anp
u P
lc.
Energ
y
D
irecto
r C
ert
ifi cation P
rogra
m
C
hairm
an o
f th
e C
om
pensation C
om
mitte
e
(DC
P) 2
005
2001 -
Pre
sent
Directo
r P
resid
ent
and
Chie
f E
xecutive
Offi
cer
Qualit
y H
ouses P
lc.
Pro
pert
y d
eve
lop
ment
Directo
r Q
.H.
Inte
rnational C
o.,
Ltd
. B
uild
ing m
anagem
ent
** A
t th
e p
resent,
Mr. R
utt
is t
he d
irecto
r of
3
liste
d
co
mp
an
ies
an
d
3
no
n-l
iste
d
com
panie
s w
hic
h are
not
doin
g b
usin
ess
com
peting w
ith t
he C
om
pany.
** A
t th
e p
resent,
Mr. J
oom
pol i
s the d
irecto
r
for
the C
om
pany
only.
** A
t th
e p
resent,
Mr. A
pic
hat is
the d
irecto
r
of
1
liste
d
co
mp
any
and
2
no
n-l
iste
d
co
mp
anie
s w
hic
h a
re n
ot
do
ing
busin
ess
co
mp
eting
with t
he C
om
pany.
** A
t th
e p
resent,
Mr. A
nant
is t
he d
irecto
r
of
5
liste
d
com
panie
s
and
7
non-lis
ted
com
panie
s
whic
h a
re n
ot
doin
g b
usin
ess
com
peting w
ith t
he C
om
pany.
30
Nam
e -
Surn
am
eA
ge
Ed
ucation
Pro
por-
tional
of share
in
Com
pany
%
Fam
ily
rela
tionship
with
the
manage-
ment
Exp
erience in
5 y
ears
Durin
gPo
sitio
nC
om
pany
Nam
eTy
pe o
f B
usin
ess
M
rs. S
uwan
na B
udd
hap
rasa
rt
56
- M
BA
C
hula
longkorn
Univ
ers
ity
- -
2003 -
Pre
sent
Directo
r H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
irecto
r
- T
hai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
2010 -
Pre
sent
Directo
r Id
ea F
itting C
o.,
Ltd
.
Inte
rior
desig
n a
nd
Furn
ished
D
irecto
r C
ert
ifi cation P
rogra
m
2005 -
Pre
sent
Directo
r Land
and
House R
eta
il B
ank P
lc.
Fin
ancia
l institu
tion
(DC
P) 2007
2003 -
Pre
sent
Directo
r C
asa V
ille C
o.,
Ltd
. P
rop
ert
y d
eve
lop
ment
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
D
irecto
r Q
.H.
Managem
ent
Co.,
Ltd
P
roje
ct
after-
sale
serv
ice
Directo
r A
ccre
ditation P
rogra
m
2000 -
Pre
sent
Directo
r and
Senio
r V
ice P
resid
ent
Qualit
y H
ouse P
lc.
Pro
pert
y d
eve
lop
ment
(DA
P) 2004
D
irecto
r Q
.H.
Inte
rnational C
o.,
Ltd
B
uild
ing m
anagem
ent
Directo
r The C
onfi d
ence C
o.,
Ltd
. P
rop
ert
y d
eve
lop
ment
M
r. M
anit
Ud
om
kuna
tum
66
- S
econd
ary
3.1
1
- 2000 -
Pre
sent
Directo
r a
nd
H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
irecto
r and
- T
hai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
C
hairm
an o
f th
e E
xecutive
Com
mitte
e
C
hairm
an o
f th
e E
xecutive
Directo
r
D
irecto
r A
ccre
ditation P
rogra
m
2003 -
Pre
sent
Directo
r R
. L.
P.
Co.,
Ltd
. H
old
ing
(D
AP
) 2004
2002 -
Pre
sent
Directo
r P
huket
Resort
Clu
b C
o.,
Ltd
. H
ote
l
Directo
r P
huket
Pato
ng C
lub
Co.,
Ltd
. H
ote
l
2001 -
Pre
sent
Chairm
an o
f th
e E
xecutive
Com
mitte
e
US
I H
old
ing C
o.,
Ltd
. H
old
ing
2001 -
2010
Directo
r Thananonsee C
o.,
Ltd
H
old
ing
2000 -
Pre
sent
Directo
r R
angsit P
laza
Co.,
Ltd
D
ep
art
ment
sto
re
M
r. N
apo
rn S
oo
ntho
rnch
itcha
roen
52
- M
BA
Tham
masart
Univ
ers
ity
- -
1995 -
Pre
sent
Directo
r and
Executive
Directo
r H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
irecto
r and
Executive
Directo
r
- B
achelo
r of C
ivil
Engin
eering
2005 -
Pre
sent
Directo
r Land
and
House R
eta
il B
ank P
lc.
Fin
ancia
l institu
tion
C
hia
ngm
ai U
niv
ers
ity
2002 -
Pre
sent
Directo
r and
Senio
r V
ice P
resid
ent
Land
and
House P
lc.
Pro
pert
y d
eve
lop
ment
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
1995 -
Pre
sent
Directo
r Land
and
House N
ort
h-E
ast
Co.,
Ltd
. P
rop
ert
y d
eve
lop
ment
Directo
r C
ert
ifi cation P
rogra
m
D
irecto
r Land
and
House N
ort
h C
o.,
Ltd
. P
rop
ert
y d
eve
lop
ment
(DC
P) 2005
1995 -
2004
Directo
r A
ssets
Plu
s S
ecurities P
lc.
Mutu
al f
und
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
1994 -
Pre
sent
Directo
r Q
ualit
y C
onstr
uction P
rod
ucts
Plc
. C
onstr
uction s
up
plie
s
D
irecto
r A
ccre
ditation P
rogra
m
1994 -
Pre
sent
Directo
r B
angkok C
hain
Hosp
ital P
lc.
Hosp
ital
(DA
P) 2004
M
r. K
huna
wut
Thu
mp
om
kul
53
- M
BA
N
ational I
nstitu
te o
f 1.4
1
- 1995 -
Pre
sent
Directo
r, E
xecutive
Directo
r and
H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
irecto
r, E
xecutive
Directo
r and
D
eve
lop
ment
Ad
min
istr
ation
M
anagin
g D
irecto
r
M
anagin
g D
irecto
r
- T
hai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
D
irecto
r C
ert
ifi cation P
rogra
m
(DC
P) 2001
** A
t th
e p
resent,
Mr. M
anit is t
he d
irecto
r
of
1 lis
ted
co
mp
an
y an
d 1
4 n
on
-lis
ted
co
mp
an
ies
wh
ich
are
d
oin
g
bu
sin
ess
com
peting w
ith t
he C
om
pany.
** A
t th
e p
resent,
Mr. N
ap
orn
is t
he d
irecto
r
of
4 l
iste
d c
om
pan
ies a
nd
9 n
on
-lis
ted
co
mp
an
ies
wh
ich
are
d
oin
g
bu
sin
ess
co
mp
etin
g w
ith
th
e C
om
pan
y.
** A
t th
e p
resen
t, M
r. K
hu
naw
ut
is
the d
irecto
r fo
r th
e C
om
pan
y o
nly
.
** A
t th
e p
rese
nt, M
rs. S
uw
anna is
the d
irecto
r
of
2
liste
d
co
mp
anie
s
and
7
non-lis
ted
com
panie
s
whic
h a
re n
ot
doin
g b
usin
ess
com
peting w
ith t
he C
om
pany.
31
Nam
e -
Surn
am
eA
ge
Ed
ucation
Pro
por-
tional
of share
in
Com
pany
%
Fam
ily
rela
tionship
with
the
manage-
ment
Exp
erience in
5 y
ears
Durin
gPo
sitio
nC
om
pany
Nam
eTy
pe o
f B
usin
ess
M
r. P
ong
Sar
asin
83
- P
h.D
. (H
on.) B
usin
ess A
dm
inis
tration
0.2
2
- 1995 -
Pre
sent
Directo
r H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
In
dep
end
ent
Directo
r
C
hula
longkorn
Univ
ers
ity
2000 -
Pre
sent
Chairm
an o
f th
e B
oard
of D
irecto
r Thai N
am
thip
Ltd
. S
oft d
rink d
istr
ibution
1996 -
Pre
sent
Chairm
an o
f th
e B
oard
of D
irecto
r S
hangri-L
a H
ote
l Plc
. H
ote
l
Directo
r Ta
raro
m E
nte
rprise P
lc.
Pro
pert
y d
eve
lop
ment
1994 -
2010
Directo
r Q
ualit
y C
onstr
uction P
rod
ucts
Plc
. C
onstr
uction s
up
plie
s
1994 -
Pre
sent
Directo
r R
oja
na Ind
ustr
ial P
ark
Plc
. P
rop
ert
y d
eve
lop
ment
S
am
makorn
Plc
. P
rop
ert
y d
eve
lop
ment
1990 -
Pre
sent
Directo
r C
row
n s
eal P
lc.
Cro
wn c
ap
manufa
ctu
ring
Directo
r A
sia
n P
rop
ert
y D
eve
lop
ment
Plc
. P
rop
ert
y d
eve
lop
ment
M
r. A
pila
s O
sata
nand
a 76
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h.D
. In
Agricultura
l Technolo
gy
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2001 -
Pre
sent
Ind
ep
end
ent
Directo
r a
nd
H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
In
dep
end
ent
Directo
r and
- T
hai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
C
hairm
an o
f th
e A
ud
it C
om
mitte
e
C
hairm
an o
f th
e A
ud
it C
om
mitte
e
D
irecto
r A
ccre
ditation P
rogra
m
1996 -
2009
Chairm
an
Tokyo
Leasin
g
Leasin
g
(DA
P) 2004
M
r. C
hani
n R
oo
nsam
rarn
62
- M
BA
, F
ort
H
ays
Sta
te U
niv
ers
ity
-
- 2005 -
Pre
sent
Ind
ep
end
ent
Directo
r, A
ud
it C
om
mitte
e a
nd
H
om
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
In
dep
end
ent
Directo
r,
K
ansas, U
SA
.
Nom
ination a
nd
Rem
unera
tion C
om
mitte
e
A
ud
it C
om
mitte
e a
nd
Nom
ination
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
2002 -
2009
Chairm
an, C
hie
f E
xecutive
Directo
r S
ICC
O S
ecurities P
lc.
S
ecurities
and
Rem
unera
tion C
om
mitte
e
D
irecto
r C
ert
ifi cation P
rogra
m
and
Rem
unera
tion C
om
mitte
e
(D
CP
) 2002
D
irecto
r and
Chie
f E
xecutive
Directo
r S
ICC
O A
dvi
sor
Co.,
Ltd
.
Fin
ancia
l ad
visor
-
Thai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
2003 -
Pre
sent
Directo
r, H
um
an R
esourc
e a
nd
The S
iam
Com
merc
ial S
am
aggi
Insura
nce
The R
ole
of C
hairm
an (R
CM
) 2002
R
em
unera
tion D
irecto
r In
sura
nce P
lc.
1996 -
2009
Ind
ep
end
ent
Directo
r, A
ud
it C
om
mitte
e a
nd
The S
iam
Ind
ustr
ial C
red
it P
lc.
Fin
ancia
l institu
tion
Rem
unera
tion a
nd
Nom
ination C
om
mitte
e
1986 -
Pre
sent
Ind
ep
end
ent
Directo
r, A
ud
it C
om
mitte
e,
Thai R
ein
sura
nce P
lc.
In
sura
nce
Rem
unera
tion C
om
mitte
e a
nd
Nom
ination C
om
mitte
e
M
r. T
have
evat
Tat
iyam
anee
kul
65
- P
rim
ary
-
- 2001 -
Pre
sent
Ind
ep
end
ent
Directo
r and
Aud
it C
om
mitte
e
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
In
dep
end
ent
Directo
r and
- T
hai I
nstitu
te o
f D
irecto
rs A
ssocia
tion
1989 -
Pre
sent
Chairm
an o
f E
xecutive
Dircto
r S
tar
Fashio
n (2008) C
o.,
Ltd
A
pp
are
l manufa
ctu
re a
nd
dis
trib
uto
r
A
ud
it C
om
mitte
e
D
irecto
r A
ccre
ditation P
rogra
m
(DA
P) 2004
** A
t th
e p
resent,
Mr. P
ong i
s t
he d
irecto
r
of
6
liste
d
com
panie
s
and
5
non-lis
ted
com
panie
s
whic
h a
re n
ot
doin
g b
usin
ess
com
peting w
ith t
he C
om
pany.
** A
t th
e p
resen
t, M
r. T
haveevat
is th
e
directo
r of
1 lis
ted
com
pany
and
1 non-
liste
d c
om
pany
whic
h a
re n
ot
doin
g b
usi-
ness c
om
peting w
ith t
he C
om
pany.
** A
t th
e p
resent,
Mr. C
hanin
is t
he d
irecto
r
of
3
liste
d
com
pany
and
1
non-lis
ted
com
pany
w
hic
h are
not
doin
g b
usin
ess
com
peting w
ith t
he C
om
pany.
** A
t th
e p
resent,
Mr. A
pila
s is
the d
irecto
r fo
r th
e C
om
pany
only.
32
M
r. V
ath
unyu
V
isuth
ikosol
46
- M
BA
, G
eorg
ia S
tate
Univ
ers
ity,
US
A.
0.0
8
- 2002 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
M
r. A
nuchar
Jitja
tura
nt
47
- M
BA
, S
asin
Gra
duate
Institu
te o
f
0.1
4
- 2002 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
B
usin
ess A
dm
inis
tration o
f
C
hula
longkorn
Univ
ers
ity
M
s. Jaru
sop
ha Thum
kath
ikanon
51
- B
achelo
r of Faculty
of E
conom
ics,
0.0
7
- 2003 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
The U
niv
ers
ity
of The T
hai C
ham
ber
of C
om
merc
e
M
s. Thara
thip
Trim
ankhong
50
- J
unio
r H
igh S
chool
0.2
4
- 2000 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
M
r. W
eera
pun U
ngsum
ale
e
48
- M
aste
r of E
ngin
eering,
0.0
4
- S
ep
2005 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
A
sia
n Institu
te o
f Te
chnolo
gy
2001 -
Sep
2005
Directo
r
Solu
tion D
eliv
ery
C
om
pute
r consultin
g
M
s. Jariya
S
ora
thorn
52
- M
aste
r’s D
egre
e P
rogra
m
0.0
7
- S
ep
2007 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
in
Socia
l Work
, T
ham
masat
Univ
ers
ity
2005 -
2007
Vic
e P
resid
ent
- The P
ow
er
2002 -
2005
Vic
e P
resid
ent
- O
pera
tion
M
r. N
at
Jaritc
hana
50
- M
BA
, K
asets
art
Univ
ers
ity
0.0
8
- 2006 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
1999 -
2005
Vic
e P
resid
ent
- M
ark
eting
M
r. C
haiy
uth
K
aru
nya
sop
on
52
- B
achelo
r of Faculty
of Fin
ance,
0.0
1
- Jul 2
007 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
R
am
kham
haeng
Univ
ers
ity
2006 -
Jun 2
007
GM
- C
ontr
act
Logis
tics
DH
L E
xel S
up
ply
Chain
Thaila
nd
Logis
tics s
erv
ices
2005
GM
- C
ontr
act
Logis
tics
Excel L
ogis
tics (Far-
East) L
td.
Logis
tics s
erv
ices
2002 -
2004
Op
era
tion &
IT D
irecto
r D
avi
ds D
istr
ibution (Thaila
nd
) Ltd
. Logis
tics s
erv
ices
M
r. H
anchai
Laow
panitchakorn
46
- B
achelo
r of Faculty
of C
om
merc
e
0.0
2
- 2007 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
and
Accounta
ncy,
2006 -
2007
SA
P M
anager
DK
SH
(Thaila
nd
) C
o.,
Ltd
. C
onsum
er
good
s w
hole
sale
C
hula
longkorn
Univ
ers
ity
2005
Pro
ject
Manager
(IT)
Sta
nd
ard
Chart
ere
d B
ank
Com
merc
ial b
ank
2004 -
2005
SA
P C
onsultant
& T
rain
er
- C
om
pute
r softw
are
consultin
g
2002 -
2004
Serv
ice M
anager
Mic
rosoft (Thaila
nd
) Ltd
. C
om
pute
r softw
are
M
r. N
itat
Aro
ontip
paitoon
45
- M
BA
N
ational I
nstitu
te o
f 0.0
6
- 2010 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
D
eve
lop
ment
Ad
min
istr
ation
2005 -
2010
Vic
e P
resid
ent
- In
tern
al A
ud
it
M
s. W
annee Junta
mongkol
46
- M
BA
, S
asin
Gra
duate
Institu
te o
f
0.0
6
- M
ar
2005 -
Pre
sent
Senio
r V
ice P
resid
ent
Hom
e P
rod
uct
Cente
r P
lc.
Hom
e im
pro
vem
ent
reta
iling
B
usin
ess A
dm
inis
tration o
f
2004 -
Mar
2005
Fin
ance D
irecto
r Thain
ox S
tain
less P
lc.
Sta
inle
ss s
teel p
rod
ucer
Chula
longkorn
Univ
ers
ity
Nam
e -
Surn
am
eA
ge
Ed
ucation
Pro
por-
tional
of share
in
Com
pany
%
Fam
ily
rela
tionship
with
the
manage-
ment
Exp
erience in
5 y
ears
Durin
gPo
sitio
nC
om
pany
Nam
eTy
pe o
f B
usin
ess
Man
agem
ent
Info
rmat
ion
As
of D
ecem
ber
31
, 20
10
33
Name - Surname Home Product Center Plc.Market Village Co., Ltd.
(Subsidiary)
Detail of Directors and Management who are Authorized to Control Subsidiary
1. Mr. Anant Asavabhokhin Chairman of the Board of Directors
2. Mr. Rutt Phanijphand Director -
3. Mr. Joompol Meesook Director -
4. Mr. Apichat Natasilpa Director -
5. Mrs. Suwanna Buddhaprasart Director -
6. Mr. Manit Udomkunnatum Director -
7. Mr. Naporn Soonthornchitcharoen Director -
8. Mr. Khunawut Thumpomkul Director and Managing Director Chairman of the Board of Directors
9. Mr. Pong Sarasin Independent Director -
10. Mr. Apilas Osatananda Independent Director -
11. Mr. Thaveevat Tatiyamaneekul Independent Director -
12. Mr. Chanin Roonsamrarn Independent Director -
13. Mr. Vathunyu Visuthikosol Senior Vice President Director
14. Mr. Anuchar Jitjaturunt Senior Vice President -
15. Ms. Jarusopha Thumkathikanon Senior Vice President -
16. Ms. Tharathip Trimankhong Senior Vice President -
17. Mr. Weerapun Ungsumalee Senior Vice President -
18. Ms. Jariya Sorathorn Senior Vice President -
19. Mr. Nat Jaritchana Senior Vice President -
20. Mr. Chaiyuth Karunyasopon Senior Vice President -
21. Mr. Hanchai Laowpanitchakorn Senior Vice President -
22. Mr. Nitat Aroontippaitoon Senior Vice President -
23. Ms. Wannee Juntamongkol Senior Vice President Director
24. Mr.Thee Phromphol - Director
Remark: Mr. Thee Phromphol has retired from work since 1 January 2011, and the Company has appointed Mr. Nitat Aroontippaitoon to replace him.
Remuneration for the Directors and the Executives
1. Remuneration for the Directors
Basis of remuneration for the Directors are remuneration for giving advice on any matters to working team of the Company
and fees for the meeting, which the Company normally has at least the Board of Directors Meeting once a month,
and the Meeting of sub-committees, i.e. Audit Committee Meeting, Executive Committee Meeting, Nomination and
Remuneration Committee Meeting.
The Nomination and Remuneration Committee and the Company’s board of directors have considered to specify
the remuneration for directors by relying on the Company’s overall operating results, the payment of dividends to shareholders,
obligations and responsibilities of each committee. For the criteria of remuneration payment, the Company will base on the same
criteria as used for the payment of the director’s remuneration of the Company which operates in the same type of business.
On 7th April 2010, the Shareholders Meeting of 2010 has a resolution to grant the annual remuneration not exceeding
Baht 12 million and pension to the directors not exceeding Baht 11 million. Details of remuneration payment are as follows:
1. Monthly Remuneration
• Chairman Baht 70,000 / person / month
• Director Baht 35,000 / person / month
34
2. Remuneration for the Executives
The Company has criteria on the making of payment of the remuneration to the Executives by considering from
knowledge, capability, experience, and performance, and by comparing with other companies in the same industry.
Remuneration of 12 Executives for the year 2009 and 2010 consisted of salary, bonus, and other remunerations for the
total amount of Baht 50.3 million and Baht 54.9 million respectively. Moreover, the Executives of the Company have also
received other remunerations in form of warrant to buy ordinary shares of the Company.
Name – Surname
Meeting Allowances
PensionBoard of Director
Audit Committee
Executive Director
Nomination and
Remuneration
Committee
Total
(Baht)
1. Mr. Anant Asavabhokhin 1,015,000 - - - 1,692,308 2,707,308
2. Mr. Pong Sarasin 570,000 - - - 846,154 1,416,154
3. Mr. Rutt Phanijphand 585,000 180,000 - 75,000 846,154 1,686,154
4. Mr. Joompol Meesook 600,000 - - - 846,154 1,446,154
5. Mr. Apichat Natasilapa 1 600,000 - - 45,000 846,154 1,491,154
6. Mrs. Suwanna Buddhaprasart 600,000 - - - 846,154 1,446,154
7. Mr. Manit Udomkunnatum 570,000 275,000 - - 846,154 1,691,154
8. Mr. Naporn Soonthornchitcharoen 585,000 135,000 - - 846,154 1,566,154
9. Mr. Khunawut Thumpomkul 2 600,000 180,000 - - 846,154 1,626,154
10. Mr. Apilas Osatananda 600,000 - 300,000 - 846,154 1,746,154
11. Mr. Thaveevat Tatiyamaneekul 585,000 - 180,000 - 846,154 1,611,154
12. Mr. Chanin Roonsamrarn 600,000 - 180,000 45,000 846,154 1,671,154
Total 7,510,000 770,000 660,000 165,000 11,000,000 20,105,000
Remark : 1. Mr. Apichat Natasilapa, an authorized person of the American International Assurance Company Limited, received remuneration in the name of
Pine Bridge (Thailand) Limited.
2. Mr. Khunawut Thumpomkul, holding the position of Director and Managing Director, received compensation as the meeting allowance and Director’s
fee. However, salary and bonus were included in the remuneration of the Executive.
Human Resources Detail of numbers of employee during year 2008 - 2010.
On December 31, 2010, the Company had a total of 5,973 permanent employees with related expenses of
Baht 1,786 million.
Head Offi ce 1,547 1,420 1,232
Branches 4,426 3,849 3,662
Total (persons) 5,973 5,269 4,894
Number of Branches 40 36 35
Remark: The number of employees in each year already includes some of employees of the branches which will be opened next year.
2. Remuneration for Meeting for the Board of Directors Meeting and Sub-Committee Meeting which shall be paid
according to the number of meeting attendance.
• Chairman Baht 25,000 / person / month
• Director Baht 15,000 / person / month
Number of Employees 31 Dec 2010 31 Dec 2009 31 Dec 2008
35
Corporate Governance
The Board of Directors realizes the importance of Corporate Governance and believes that the good Corporate Governance
is the crucial factor for business operation, in order to effi ciently and effectively manage the business to have stability, continuous
growth and fairness to all stakeholders. From such reasons, the Board of Directors stipulates the Corporate Governance Policy,
having content covering the important principle on the rights of shareholders, equitable treatment to shareholders, considering
to the roles of interest person, disclosure of information and transparency, and responsibility of the Directors, in order to be
guideline for managing business to achieve the company’s objectives and goal that have been set according to business
policy sticking to correctness and transparency. The policy of Corporate Governance of the Company is disclosed at
www.homepro.co.th/ir/investor_th.html
1. Rights of Shareholders The Board of Directors of the Company gives the importance to the right of shareholders by not performing any act that violates
or lessens the rights, and to facilitate the exercise of rights on various matters. It is then the guideline of operation is set in order to
ensure that shareholders that they will be protected under the basic rights as follows:
• The Company gives an opportunity to the shareholders to propose agenda and propose the name list to be appointed as
directors, including to pass question about the Company in the shareholders meeting in advance, which the company has
notifi ed the rules and supplementary documents on the web site of the Company since 1st December 2010. However,
shareholders may submit such question until 31st January 2011.
• The Company has delivered the notice calling for the meeting with information, documentation supplement to each
agenda with proxy to shareholders 7 days prior to the meeting date, or as stipulated by law of both Thai and English
language, including the Company’s Articles of Association in relation to the Shareholders Meeting and casting of vote.
• In case the shareholders are unable to attend the meeting, they may give proxy to the Independent Directors in
casting the vote instead or may indicate their own vote. In 2010, the Company has arranged for Mr. Chanin Roonsamrarn
to be the proxy director.
• Prior to the meeting commencement, the Board of Directors will explain to the shareholders to acknowledge the rights
under the Articles of Association of the Company, the proceeding of the meeting, casting the vote, including the giving of
the rights to shareholders to raise questions and express opinion equally.
• After the meeting, the Company will notify the meeting minutes to the Stock Exchange of Thailand (SET) within the time
frame specifi ed by the SET, together with detail of voting result in each agenda. Generally, the meeting minutes will be
reported to the SET within 14 days and also publicized it on web site of the Company.
2. Equitable Treatment of Shareholders The Company, being aware of the importance, ensures that the every shareholder, whether executive shareholders,
non-executive shareholders, and foreign shareholders should receive equitable and fair treatment.
The Company has policy to prevent the use of inside information which is prescribed in the ethic handbook, and has disclosed
to staff, executive, and director of the Company. The policy and method to control executive in private use of internal information
of the Company are as follows:
• Provide knowledge to executive in each department in relation to duty that executive shall report the holding of
securities of the Company and penalty under the Securities and Stock Exchange Act B.E. 2535 and under the regulations
of the Stock Exchange of Thailand.
• The Company has required the executive to report the change of securities holding to the Offi ce of Securities and Stock
Exchange Commission under Section 59 of the Securities and Stock Exchange Act B.E. 2535, and delivered copy of such
report to the Company on the same day as sending to the Securities and Stock Exchange Commission.
36
• The Company has notifi ed to the executive to restrain from the purchase and sale of securities of the Company 1 month
before disclosing of fi nancial statements or inside information to the public, and the disclosure of material information to
other person is not allowed and such has been notifi ed via e-mail every quarter.
However, if there is the violation of regulations mentioned above, the Company will proceed with discipline punishment as
appropriate as the case may be.
3. Roles of Stakeholders The Company has stipulated the regulations for the interest person in the “Handbook of Business Ethic” of the Company in order
to ensure that the Company will comply with in order to provide the rights to interest person under the relevant laws, whether the
shareholder, staff, customer, business partner, community, society, and environment. Moreover, the Company has also strengthen
cooperation with the interest person in each groups in order to be able to ensure business sustainability with the fair benefi ts to all
parties, in order to build the long-term success.
Shareholder
Shareholders and interest person may fi le complaint, or communicate or notify matters relating to the Company through
the director or audit committee at www.homepro.co.th/ir/investor_th.html
• Communication with the Director of the Company. In case requiring for notifying or communicating in relation to
operation of the Company, by such information will be sent to the Managing Director.
• Communication with the Audit Committee. In case requiring for fi ling complaint in relation to violation of laws or
ethics, accounting doubt, internal controlling, etc. Such information shall be sent to the offi ce of internal audit of the
Company in order to be compiled and proposed to the Audit Committee for further consideration.
Business Partner
The Company complies with the Trade Competition Act according to the resolution of the Trade Competition
Commission in year 2006, announced to be as Guideline for Unfair Trade Practices in the Wholesale/Retail Business by
virtue of the Trade Competition Act B.E. 2542.
To be able to operate business according to the above announcement, the Company has mutually agreed with
business partner to amend the provision of the agreement to be more specifi c and clearer.
Employee
The Company realises that the employees are signifi cant resource for achieving the business goals. The Company
cannot sustain and grow with strength if the personnel have not been developed and promoted. In order to achieve the
vision and commitment of the Company, the Company has a clear and determined policy in the development of personnel
by supporting and developing all personnel to have quality, knowledge and ability up to highest capability of them, and to grow
simultaneously with the Company. The Company’s personnel shall have their opportunity and get support to learn and
to develop to be a good capable and decent person, to have higher effectiveness, and to be ready to take any change in
the future. This also includes the policy to provide the fairness on compensation, career advancement, promotion and transfer,
in which, throughout the time, the Company has looked after its employees on signifi cant issues as follows:
1. The Company has looked after its employees by ensuring that they receive fair and appropriate compensation based
on their duties and responsibilities and also be able to compete in the labor market. Moreover, the Company has
provided welfares such as annual physical check-up, medical treatment fee, accident insurance, employee uniform,
emergency fund assistance in case of natural disaster and has also arranged for activities to enhance the happiness
in their working life i.e. “HomePro Jai Aar Sar” Program which encourages the employees to join activities for providing
benefi ts to community, to arrange for company sport competition, to arrange for the merit making ceremony in their
own month ot birth etc.
37
2. Providing the provident fund in order for the employees to have saving for retirement.
3. The Company gives the importance to the developing of knowledge, all kind of capabilities of staff for knowledge
on products, standard on work performing, providing service, management, including attitude and team work. The
Company has promoted its staff as follows:
• Allocating budget in personnel development appropriately and suffi ciently for employees at every level.
• Teaching and Learning course have always been updated.
• Set up the DIY workshop center, having knowledge skilled expert and in each group of products.
• Set up Learning Center to each branch for new staff for self learning
• Having the Individual Development Program in order to develop personnel as the Talent Group to be promoted
to the higher position, to be ready to support the expansion of the Company.
• Promote the personnel to pursue education in the bachelor and master degree, and set up scholarship for
studying English language in order to increase effi ciency of personnel to be able to perform their work more
effectively.
Customer
The Company aims to operate business on the basis of highest satisfactory of customer and in order to operate according
to the objectives, the Company has policy and procedures to customer as follows:
1. Strictly deliver goods and provide service under the conditions as agreed with customer. In case of the inability to
comply with the conditions, the Company will notify customer in order to fi nd the solution.
2. Giving information and suggestion about the products and services, including relevant commercial terms correctly,
completely, not exaggeratedly which may cause misunderstanding to the customer.
3. Giving opportunity for customer to suggest or complain about the products and services, including servicing of staff
or any inconvenience that customer has experienced via website; www.homepro.co.th/cs/ccm.asp
Community, Society and Environment
The Company has a policy to support social activity by creating projects that may benefi t the community and society
as follows:
1. “Computer Lab Construction” project, provides primary school students an opportunity to learn via the internet.
In 2010, HomePro provided computers together with equipment installation to Baan Boong Toey School, Mhoo Si
sub-district, Pak Chong district, Nakhonratchasima Province.
2. “The Kids’ Toilet” project, received cooperation from the Department of Health, the Ministry of Public Health, and the
Offi ce of the Basic Education Commission, the Ministry of Education to examine the standard and provide additional
improvement till most of the toilets in the project passed the national standard or HAS (Healthy Accessibility and
Safety). At the end of 2010, HomePro contributed a total 745 restrooms to 60 schools in 16 provinces nationwide.
3. “HomePro helps reduce global warming” project, it was started in 2009 under the objective of Avicennia marina
and Lampu forestation of 100,000 trees within 3 years at BangPu Education Center of the Royal Thai Army in Samut
Prakarn Province.
4. “Flood Victim Support”, regarding the fl ood situation in 2010, the Company along with business alliances had
offered a discount on the products that victims need to rebuild/ repair their homes. Furthermore, donations are
made to help victims and invited our customers to donate at HomePro’s branches nationwide.
38
4. Disclosure and Transparency The Board of Directors has given the importance to the disclosure of information which are accurate, complete, transparent,
in timely manner, and equitably distributed to the investor and stakeholders to acknowledge, of both fi nancial reports and material
information that affect the value of the Company’s Securities which will be disclosed through the publication of the Stock Exchange
of Thailand and web site of the Company.
The Company has the Investor Relationship offi ce to be responsible for giving information and hearing to opinion of share-
holders and investor regularly, by contacting Mr. Rakpong Aroonwatdhana, Tel. 02-832-1416 or via e-mail at [email protected]
Furthermore, the Company has also specifi ed the opportunity to communicate and activities between shareholders, investors and
high rank executive of the Company, apart from the Annual Shareholders Meeting as follows:
Web Site The Company has presented the operational result, annual report, annual transactions information
56-1 form, minutes of shareholders meeting, news about the Company, news notifi ed to the Stock
Exchange, webcast, documentations supplemented to the analyst meeting and contact channel, and
also distribute information of the Company in relations to Corporate Governance, Board of Directors
and Executives Chart, shareholding structure. To facilitate and provide equal opportunity in searching
information, such have been prepared in both Thai and English version.
The shareholders, investors, and interested person of the Company may express opinion and propose
additional agenda to the meeting and propose the person who has qualifi cation to be the director
before the Company will send a notice calling for the meeting through web site.
Analyst Meeting The Company has arranged for the meeting for the analyst and investors, including shareholders
who are interested in disclosing the operational result on every quarter for 4 times in 2010.
One on One All through 2010, the Company opened the opportunity to analysts, shareholders and institutional
meeting and investors both domestic and international to meet with the executives of the Company, including
Company visit conference calls, in order to answer the questions relating to the operations of business for the total of
78 times, and also had the opportunity to welcome group of people for their company visit of 4 times.
Road Show In 2010, the Company attended the conference and Road show as arranged of both domestic and
international totaling 11 times as follows,
1. Having met foreign investors as arranged by Financial Institution in Thailand for 3 times
2. Joining the Conference and Roadshow in England, Singapore, Malaysia and Hong Kong for 8 times.
Press Conference The Company has made the press conference twice about the annual report on business operation
and Media in 2009 and direction to operate business in 2010, and report the result of operation for the fi rst
Relationship 6 months of 2010 to the media. At the same time, the Company has as well prepared the Press
Release for the media.
Besides, Mr. Khunnawut Thumponkul, Managing Director of the Company has given his interview
to television program of Money Channel, and other medias in the matter relating to industrial trends
and the business direction of the Company. And, also he joined as a co-lecturer to student taking
the course of TLCA Executive Development Program (EDP), the 6th Class, organized by the Thai
Listed Companies Associations, the Stock Exchange of Thailand and Capital Market Academy on
15 October 2010.
39
5. Board Responsibilities Board of Directors of the Company consists of 12 persons as follows:
1. 4 Executive Directors
2. 4 Non-Executive Directors
3. 4 Independent Directors in which 3 of 4 directors are in the position of Audit Committee.
Responsibilities
The Board of Directors has participated in determining the Company’s policy, goal, business plan, and budget of the Company,
as well as ensuring that the management has operated according to the plan and budget with effi ciency and effectiveness.
The Chairman of the Company, President of Executive Committee, and Managing Directors of the Company are not the same
persons. Moreover, there are obviously separation of roles and duty to control and management, in order to balance the power
and create transparency for work performing.
The Company has appointed the Audit Committee who are Independent Directors to review the accuracy, suffi ciency of
the disclosure of information and the reliability of fi nancial report, Corporate Governance and internal control of the Company which
have details of obligations as specifi ed in “Clause 9 management of duty of the Audit Committee”.
In case there was transaction that was not under normal course of business of the Company, the Board of Directors of
the Company has duty to consider such transaction, in which there shall be Independent Director in the meeting as well.
The Company has the Nomination and Remuneration Committee to set the procedures and rules on selecting the Director of
the Company, and set the period of remuneration or other benefi ts which is fair and reasonable and present to the shareholders
meeting for consideration.
To promote every parties to perform their duty according to assigned responsibility with transparency, the Company has
prepared the policy of Corporate Governance, handbook of ethic, and code of conduct on ethics of Directors, the management,
and staff in order for the relevant persons to comply with the guideline in performing assignment of the Company honestly, and
to follow up with the compliance of the guideline regularly, including to stipulate discipline penalty.
First orientation and giving knowledge in the business of the Company to the new Director
The Company has policy to provide the fi rst orientation for the new directors, in order to acknowledge the roles, duty, and
responsibility, including giving knowledge, understanding of business and operating in any part of the Company, which is to prepare
the readiness to perform duty of the Directors. Due to the Company has no new Directors in 2010, there was no arrangement of
such fi rst orientation.
The Board of Directors Meeting
The Board of Directors of the Company and Executive Directors shall have regular meeting every month and may have special
extra meeting as necessary. There shall be fi xing the date and time of the meeting in advance for the whole year, and there shall
be sending of the notice calling for meeting with agenda of the meeting approximately 7 days in advance for the Directors to be
prepared.
In 2010, the Company had 12 times of Board of Directors Meeting and the meeting of Sub-Committee i.e. 12 times of
Executive Directors meeting, 12 times of Audit Committee meeting, and 3 times of Nomination and Remuneration
Committee meeting, details of attending the Board of Directors meeting and other sub-committee meetings are as follows:
40
Attendance / Number of all meetings (times)
Name – SurnameBoard of Directors Audit CommitteeExecutive Directors
Nomination and
Remuneration Committee
1. Mr. Anant Asavabhokhin 7 / 12
2. Mr. Pong Sarasin 10 / 12
3. Mr. Rutt Phanijphand 11 / 12 12 / 12 3 / 3
4. Mr. Joompol Meesook 12 / 12
5. Mr. Apichat Natasilapa 12 / 12 3 / 3
6. Mrs. Suwanna Buddhaprasart 12 / 12
7. Mr. Manit Udomkunnatum 10 / 12 11 / 12
8. Mr. Naporn Soonthornchitcharoen 11 / 12 9 / 12
9. Mr. Khunawut Thumpomkul 12 / 12 12 / 12
10. Mr. Apilas Osatananda 12 / 12 12 / 12
11. Mr. Thaveevat Tatiyamaneekul 11 / 12 12 / 12
12. Mr. Chanin Roonsamrarn 12 / 12 12 / 12 3 / 3
Evaluation of the work performance of the Managing Directors
The Company has the Nomination and Remuneration Committee to propose opinion to the Board of Directors of the
Company in consideration of setting the annual Key Performance Indicators (KPI) to be used in evaluation of work performance of
the Managing Director, such KPI shall be in accordance with the goal of the Company for both short term and long term.
Succession plan of the High rank of Executive
The Company has prepared the succession plan to prepare in the event the executive is unable to perform his duty, by
having initiatively structured the replacement of the low rank of executive in the level of branch manager already. The plan for
mid-level executive and high-rank executive are in progress, which this will to ensure that the operation of the Company
can be continued.
Risk management by Executive
The Company has policy of risk management, group of management shall jointly consider and analyze risk factors
both external and internal the organization, by having meeting every 2 weeks and following up the situation that is
a cause of risk closely, and notifying to the relevant staff for acknowledgement and to comply with the stipulated
measurement of risk management.
Forming the Internal Audit Department
In order to promote the procedures of good governance, the Company has formed an internal audit to review and followed
up the result of work performing to the Management, by performing its work independently, and reporting the result of the
operation to the Audit Committee directly and regularly.
Moreover, there was a proposal to appoint the auditor to evaluate effi ciency of internal accounting control of the Company
which the resolution of the shareholders in 2009, approved to appoint the auditor from Ernst & Young Co., Ltd., by
Mrs. Gingkarn Atsawarangsalit, an auditor License number 4496 as the auditor of the Company and its subsidiaries for the
year 2010.
41
Internal Control
On February 16, 2011, the Board of Directors, Audit Committee and management evaluated the Company’s internal control
system. The evaluation was done on the following fi ve criteria:
1. Organization and Environment
The Board of Directors opines that the Company has clear organization chart and has specifi ed scope of authority,
responsibility of each department in writing, having specifi ed clear target of business operation which is measurable, which
the setting of the target and work plan the management and each executive of each fi eld of work have jointly considered and
set the business target and the strategy of operation by using the result of operation in the past years as the basic information.
It is then ensured to be properly and shall be able to achieve the target.
For our policy, operating regulation, and provision relating to ethics (Code of Conduct), the Company has specifi ed such
in the business ethics manual in order for directors, executives, and employees in all departments to use as a guideline for operation.
Regarding this business ethics manual, the Company has provided such in consideration of relevant laws and regulations including
the effects which may occur to interested parties.
2. Risk Management
The Board of Directors opines that the group of executives has regularly considered and evaluated the risks that may affect
the result of operation of the Company, by specifying operation plan of every year and fi xed to have meeting in every 2 weeks in
order to follow up the result of operation, and the risk factors closely for setting management method and for controlling the risk
to be at the acceptable level, and notifi ed relevant staff to be aware of and to comply with the measurement of risk management.
3. Controlling
The Board of Directors opines that the Company has specifi ed the scope of authority, approval credit limit of executive in
each level clearly in writing, and completely separate duty and responsibility for approval work, account booking and information
technology, and the looking after of property separately in order to examine each other. In case the Company has entered into
transactions with the major shareholders, director, executive, or relevant persons, the Company shall propose such transaction
through the Audit Committee Meeting and complete such transaction as if such were made with outsider.
4. Information Technology and Communication System
The Board of Directors opines that the Company has prepared the notice calling for the Board of Directors Meeting,
stating information and details of agenda to the meeting, including summary of information to the Board of Directors for
consideration of at least 7 days before the meeting, and has made the complete minutes of the Board of Directors meeting
which may be referable, and such can be used to examine the appropriateness in performing the duty of the Director.
The Company has selected the accounting policy that is generally accepted in accounting principle, and retained
documents supplement to records properly. The Company hired Brambles (Thailand) Co., Ltd., a document retaining company,
as the document keeper with the appropriate controlling system.
5. Mornitoring
The Board of Directors opines that the Company has added an agenda on monitoring the result of operation every month,
in order to notify to the Board of Directors and to propose suggestions for work performing. For operation plan and budget,
the Company will make and review them every half year.
The Company regularly conducts and audit by internal control system to ensure the compliance with the policy. There are
two levels of internal control and compliance policies; namely (1) self-inspection between inter- related departments according
to the good internal compliance; and (2) there are inspection and evaluation processes responsible by internal audit department.
The internal auditor must report directly to the Board of Directors or the Audit Committee so that the internal auditors can perform
their duties independently and accurately.
Apart from this, the Company’s auditor, Mrs. Gingkarn Atsawarangsalit, the auditor with certifi ed license no. 4496 of
Ernst & Young Offi ce Co., Ltd, as the auditor of the Company for the year end on December 31, 2010 has given her
comment on the assessment of the effi ciency of the internal control of the Company’s accounting that no signifi cant weak
points were found in the internal audit system on the accounting.
42
Baht per Share 0.35 1.161 0.1862
The Company has the policy to pay dividend to shareholders not less than 40% of the net profi t of each year. However,
the consideration for dividend payment will take other factors into account such as result of operation and fi nancial status of
the Company, Liquidity, Expansion of Business and other factors relating to the management of the Company. Each dividend
payment is required to obtain approval from shareholders and Board of Directors.
Dividend payment during 2008 – 2010 is as follows:
Remark : 1. The Company paid dividends from the 2009 profi t totaling 1.16 Baht/share by dividing into the interim divided payment from
the fi rst 6 months operation of 1 Bath/share consisting of cash dividend of 0.10 Baht/share and stock dividend at the rate of
10 existing shares per 9 stock dividend or equivalent to 0.90 Baht/share, according to the resolution of the Extraordinary General
Meeting of Shareholders No. 1/2009, and the dividend payment from the last 6 months operation of another 0.16 Baht/share
according to the resolution of the Annual General Meeting of Shareholders 2010.
2. October 29, 2010, the Company paid interim dividends at the rate of 6 existing shares per 1 stock dividend or equivalent
to 0.186 Baht/share by dividing into cash dividends at the rate of 0.0193 Baht/share and stock dividends at the rate of 0.1667
Baht/share according to the resolution of the Extraordinary General Meeting of Shareholders No. 1/2010.
In 2010, the Company and its subsidiary had significant business transactions with related parties, which have
been concluded on commercial terms and bases agreed upon in the ordinary course of business between the Company
and those companies.
As of December 31, 2010 and 2009, the Company had outstanding balance with the related transaction, which can be sum-
marized as follows:
Name of Company / Nature of relationship Transaction 31 Dec 10 31 Dec 09
Amount(Thousand Baht) Audit Committee and
Management’s opinion
Dividend Policy
Related Transaction
Dividend 2008 2009 2010
1. Land and Houses Plc. and subsidiaries
- Being a major shareholder of the Company Sales income 8,478 3,755
by holding 30.26% of total paid-up capital, Account Receivable 2,363 432
as of October 15, 2010.
- With 2 co-directors
1. Mr. Anant Asavabhokhin
2. Mr. Naporn Soonthornchitcharoen
Such value was the
appropriate selling price
as it was the same as
the market price which
the Company sales to
the other manufacturers
or sellers.
2. Quality Houses Plc. and subsidiaries
- Being a major shareholder of the Company Sales income 3,021 617
by holding 20.38% of total paid-up capital, Account Receivable 959 142
as of October 15, 2010.
- With 4 co-directors:
1. Mr. Rutt Phanijphand
2. Mr. Anant Asavabhokhin
3. Mrs. Suwanna Buddhaprasart
4. Mr. Joompol Meesook
Such value was the
appropriate selling price
as it was the same as
the market price which
the Company sales to
the other manufacturers
or sellers.
43
Name of Company / Nature of relationship Transaction 31 Dec 10 31 Dec 09
Amount(Thousand Baht) Audit Committee and
Management’s opinion
3. Land and Houses Retail Bank Plc.
- With 2 co-shareholders: Interest income 5,703 1,809
1. Land and Houses Plc. Deposit with fi nancial
2. Quality Houses Plc. institution 1,196,575 677,977
- With 4 co-directors:
1. Mr. Anant Asavabhokhin
2. Mr. Rutt Phanijphand
3. Mr. Naporn Soonthornchitcharoen
4. Mrs. Suwanna Buddhaprasart
4. Quality Construction Products Plc.
and subsidiaries
- Land and Houses Plc. is the co-shareholder. Purchase of goods 547 1,411
- With 3 co-directors: Other Receivable 3 3
1. Mr. Anant Asavabhokhin Trade Accounts Payable - 162
2. Mr. Naporn Soonthornchitcharoen
3. Mr. Joompol Meesook
5. Quality Houses Property Fund
- With 2 co-shareholders Rental and service
1. Quality Houses Plc. expenses 17,645 17,918
2. Land and Houses Plc. Other Payable 1,436 1,302
Rental guarantee deposit 3,000 3,000
The Company received
the interest with the
same rate as other
customers of the bank,
such rate was a normal
rate of other banks and
fi nancial institutions.
Such value was the
appropriate purchase
price because it was
the same market price
which the Company
could purchase from
other manufacturers or
sellers.
S u c h v a l u e w a s
generated from the
transactions of rent
a n d s e r v i c e s f e e
for the space in the
Wave Place building.
The Audit Committee
opined that such price
was calculated from the
appropriate rate.
44
Necessity and Appropriate Reason of Transaction The connected transaction made was necessary and reasonable to create the highest benefi t to the Company. The
Audit committee concluded that such was in accordance with business and the general ordinary course of received and
paid consideration by and from the Company was fair.
Measure/Procedure of Approval of Connected Transaction The connected transaction being made at present and expectedly in the future, e.g. sales of goods to Land and Houses
Plc. and Quality Houses Plc., purchase of goods from Quality Construction Products Plc., renting space in the Wave Place
building of Land and Houses Property Fund and Deposit transaction with Land and Houses Retail Bank Plc.
For the sale of goods transaction, the Company determined the price according to the market price which was the
price that buyer could buy them from other manufacturers or sellers. Generally, the specifi cation and price of goods would be
determined earlier. For the purchase of goods transactions, the Company purchased them at the market price which it could to
purchase from other manufacturers or sellers. The Audit Committee considered the connected transactions and concluded that
the Company received and paid remuneration in the fair price according to the general ordinary course of business.
Policy or Tendency of Inter-Transaction The Company has policy to specify the trade conditions for entering into inter-transaction to be as normal business
operation. Price of products to be sold shall be prescribed at the level that can be competed to other vendors.
As for Inter-transaction that may be occurred in the future, the Board of Directors shall comply with the laws on
Securities and Stock Exchange, and Regulations, Announcement, Order, or Regulations of Stock Exchange of Thailand, and
including compliance with the regulations on disclosure of information of connected transaction and acquiring or disposing of
material assets of the Company or the Subsidiary.
However, if there will be inter-transactions of the Company or its subsidiary occurred to person who may have confl ict of
benefi t, or may have confl ict of interest in the future, the Company shall have the Audit Committee give the opinion on necessity
and appropriateness for such transactions. In case the Audit Committee is not skillful in considering the inter-transactions that
may be occurred, the Company shall arrange for an Independent expert or auditor of the Company to give opinion on such
inter-transactions in order to bring such information to supplement for the decision making of the Board of Directors or
shareholders as the case may be. However, the Company shall disclose inter-transactions in the note of the financial
statement audited by the Auditor of the Company.
45
Financial Analysis and Business Operation Results
Overview of Business Operation Results
Although the economic situation throughout the year 2010 had confronted many unfavorable factors such as uncertainty
of the world economy, local political instability, fl uctuation of the Thai Baht and fund fl ow, and several natural calamities, the Thai
economy expanded by more than 7% due to the increase of export and services which was in line with the economic recovery of
important trading partner countries as well as the continuous recovery of the local demand. All of these factors had shown their
effects in the second half of the year.
The overall retail business in 2010 had a fair expansion which followed the better economic situation, more stable political
situation, the government’s economic stimulus policy, and salary increase of all government sectors. As a result, the consumers
had regained their confi dence in the economy, employment, and future income.
The Company, however, has closely kept abreast of the economic and political situation in order to plan and fi nd measures
and strategies to prevent the risks that may occur, and to operate the business so as to successfully reach the planned target.
For the Company operation result in 2010, sales, total revenues and net profi t are still growing from the previous year due
to many driving factors such as an increase in the number of branches, same store sales growth, sales of new stores, effi ciency
of inventory management, revenues from space rental business, and revenues from HomePro Expo etc.
Operating Result Comparing the results of operation for the year ended 31st December 2010 to the same period of year 2009.
1. Revenue from Sales
In 2010, the Company and its subsidiary generated revenue from sales of Baht 24,072.76 million, increased
from the previous year by Baht 3,743.64 million or 18.42%. The increase was mainly driven by the same store sales
growth, sales of the newly opened branches in 2010, and sales from HomePro EXPO in the 1st and 4th quarter of
the year.
2. Other Revenues
In 2010, the Company and its subsidiary generated other revenues of Baht 1,842.15 million, increased from 2009
by Baht 372.17 million or 25.32%. The proportion as percent to sales increased from 7.23% to 7.65%. The details of
increase are as follows:
• Revenue from rental and service, increased by Baht 83.46 million, from space rental revenue of HomePro
Village branch and HomePro EXPO No. 11 and 12.
• Other Revenues, increased by Baht 288.71 million, revenue from advertising fee, support fee of promotional
activities from business partners, service fee related to sales of goods.
3. Cost of Sales and Gross Profi t Margin
In 2010, the Company and its subsidiary had the cost of sales of Baht 18,052.22 million, increased from the
previous year by 2,657.15 million or 17.26%, which was the result of the increase of sales.
The Company had gross profi t of Baht 6,020.53 million, increased from the previous year of Baht 1,086.49 million.
The gross profi t margin as percent to sales was 25.01%, moved up from the previous year of 24.27%.
The increase of gross profi t was a result of the increase in effi ciency of inventory management system as well as
the increase in volume discount of order in the large quantity. As a result, the increase rate of cost of good sold is less
than the increase rate of gross margin. The gross margin has also increased by the increase in sales volume of house
brand products.
4. Selling and Administrative Expenses
In 2010, the Company and its subsidiary had selling and administrative expenses amounted to Baht 5,456.17
million, increased from the previous year by Baht 793.90 million or 17.03%. The proportion as percent to sales slightly
decreased from 22.93% to 22.67%. The details of expenses in each group are as follows:
46
• Selling expenses of Baht 4,493.71 million, being expenses for branches, operation and distribution unit,
increased by Baht 674.43 million from expenses on salaries, cost of transportation and cost of service,
maintenance, expenses of HomePro Expo event and pre-opening expenses.
• Administrative expenses of Baht 915.74 million, mostly being expenses of Head Offi ce, increased by
Baht 134.85 million from expenses on salary and remuneration, consultation, tax, and fees.
• Other expenses amounted to Baht 46.72 million, decreased by Baht 15.38 million.
5. Financial Expenses
Financial Expenses of year 2010 were Baht 103.49 million, decreased from the previous year by Baht 9.64 million
or 8.52%. The proportion as percent to sales decreased from 0.56% to 0.43%, which was mainly driven by the
decrease of paid interest from partial payment of long-term loan and the lower interest rate.
6. Net Profi t
For the result of operation in 2010, the Company and its subsidiary had net profi t of Baht 1,638.43 million,
increased from the previous year by Baht 507.55 million or 44.88 %. The increase of net profi t was caused by the increase
of sales and other revenues, together with the decrease of cost of sales and decrease of interest payment. These made
the proportion of net profi t to sales to move up from 5.56% to 6.81%.
7. Return on Equity
The return on equity as of 31st December 2010 was 28.62%, increased from the previous year of 22.25%.
The increase shows that the Company has the ability to generate earnings from shareholders’ equity more effi ciently.
Financial Status Comparing fi nancial status as at 31st December 2010 and 31st December 2009
1. Net Assets
As at 31st December 2010, the Company and its subsidiary had total assets of Baht 16,591.99 million,
increased from 31st December 2009 by Baht 2,719.16 million or 19.60%. The growth of asset value was due to the change
of signifi cant transactions as follows:
• Cash and cash equivalents increased by Baht 570.91 million which was from the increase in bank deposit
received from issuance of debenture during the Year and outstanding cash at branches at the year end date.
• Net inventory increased by Baht 809.09 million, which was a result of the increase in number of new
branches in 2010.
• Other receivables increased by Baht 130.61 million, which was from the support fee of promotional activities
and other service fee.
• Net Property, plant and equipment, and net leasehold rights and software totaling increased by Baht 1,128.71
million or 11.87%, which was from the investment in new store expansion in 2010 and 2011.
• Other assets increased by Baht 79.84 million.
Accounts Receivable As of December 31, 2010, the Company and its subsidiary had total net accounts receivable of Baht 164.02 million,
increased from the previous year by Baht 19.43 million or 13.44%. The outstanding balances are aged as follows:
47
Consolidated Financial Statement Separate Financial Statement
Not yet Due 143.40 133.07 140.42 130.67
Past Due:
- Up to 6 months 20.82 11.80 18.99 9.52
- 6 - 12 months - 0.04 - -
- Over 12 months 2.45 5.07 2.45 5.07
Total 166.67 149.98 161.87 145.26
Unit : MB
As of December 31, 2010, the Company and its subsidiary had overdue accounts receivable exceeding 12 months
of Baht 2.45 million, decreased from the previous year more than 50%, which was partly from the debtors who had
diffi culty relating to their operation affected by the economic situation in 1997. However, the Company had already
proceeded with lawsuits and set provisions for bad debts. As of December 31, 2009 and December 31, 2010,
the Company set allowance for doubtful bad debts for the said debtors of Baht 5.40 million, and Baht 2.65 million,
respectively.
2. Liabilities
As of December 31, 2010, total liabilities of the Company and its subsidiary were Baht 10,353.78 million increased
from 2009 by Baht 1,690.87 million or 19.52%, which was from the change of the following crucial transactions:
• Accounts Payable was increased by Baht 719.94 million which was from the increase products order
according to sales growth.
• Debenture-net was increased by Baht 1,540 million, during the middle of the Year, there were redemption
of Baht 160 million. Also, there were issuances of unsubordinated and unsecured debentures for Baht 1,700
million, in which Baht 730 million will mature within 1 year in 2011.
• Repayment of the long-term loan to the Commercial Bank for Baht 980.32 million
• Other debts were increased by Baht 411.25 million.
3. Shareholders’ equity
As of December 31, 2010, shareholders’ equity was Baht 6,238.21 million, increased from the previous year
by Baht 1,028.29 million or 19.74% which the increase was from following transactions:
• The issued and paid-up ordinary share was increased by Baht 649.07 million due to the payment of stock
dividend in October 2010. Also, another part of issued and paid-up ordinary share was increased from
the exercise of right under warrants to purchase ordinary shares of employee No. 3 and 4 for the total of Baht
27.65 million.
• Share premium was increased by Baht 27.49 million.
• Retained earning was increased by Baht 351.73 million by dividing into the appropriated retained
earnings for statutory reserve of Baht 81.40 million and the unappropriated retained earnings of Baht
270.33 million.
4. Capital Structure
The capital structure of the Company as of 31st December 2010 consisted of the Company’s debt for the total
of Baht 10,353.78 million and the shareholders equity in the total of Baht 6,238.21 million. In this regard, if such amount
is calculated as the total amount of debt to shareholder equity ratio, it will be equivalent to 1.66 which is equal to the
previous year. The ratio shows that the proportion of the Company’s Capital Structure is the same with the previous year.
Age of receivables31 Dec 2010 31 Dec 201031 Dec 2009 31 Dec 2009
48
Transactions
Cash from operating activities 2,624.55 2,454.23 2,605.17 2,445.17
Cash from investing activities (2,005.68) (900.96) (2,004.84) (899.96)
Cash from fi nancing activities (47.96) (1,310.73) (32.96) (1,300.73)
Net increase (decrease) in cash 570.91 242.54 567.37 244.48
Unit : MB
20102010 20092009
As of December 31, 2010, the Company and its subsidiary’s cash and cash equivalents were Baht 1,417.24 million,
net increased from December 31, 2009 by Baht 570.91 million, which derived from the following activities:
1. Net cash from operating activities of Baht 2,624.55 million which were received from the net profi t before changes
in operating assets and liabilities of Baht 2,726.38 million, and working capital increased from changes in operating
assets and liabilities e.g. inventories increased by Baht 873.59 million, other receivables increased by Baht 130.60
million, other current assets increased by Baht 74.80 million, trade accounts payable increased by Baht 719.93 million,
accrued expenses increased by Baht 91.19 million, and other liabilities increased by Baht 166.04 million.
2. Net cash used for investing activities totaled Baht 2,005.68 million which such amount was the investment in the
asset for the expansion of branches in 2010 for the total of Baht 1,791.15 million, the computer software for
the total of Baht 57.68 million, and the leasehold right for the total of Baht 160.08 million.
3. Cash received from fi nancing activities, net used in the total of Baht 47.96 million in which such amount was
derived from the issuance of debenture for Baht 1,700 million, repayment of the debenture for Baht 160 million
and repayment of the long-term loan for Baht 980.32 million and for the payment of dividend of Baht 665.11 million.
Liquidity Ratio As of December 31, 2010, the Company and its subsidiaries have current assets in the total of Baht 5,889.46
million and current liabilities in the total of 7,634.17 million. In this regard, such amount can be calculated into liquidity ratio
of 0.77 times which was increased from the previous year’s ratio of 0.10 times.
The liquidity ratio of the Company and its subsidiaries as of December 31, 2008, 2009, and 2010 was at 0.62 times,
0.67 times, and 0.77 times. Such continuous increase in ratio shows our increase in ability to reduce short-term debt.
Auditing Fee According to the minutes of the annual general shareholders meeting in 2010, which resolved to appoint the Auditors
of Ernst & Young Offi ce Co., Ltd as the Company’s auditor of 2010, with the fee of Baht 2,400,000.
The actual audit fee for 2010 includes auditing fee for the Company and its subsidiary at the amount of Baht 2,400,000
and other services fee at the amount of Baht 100,000, totaling Baht 2,500,000.
Liquidity Summary of cash fl ow statement as of December 31, 2010 compared to the same period of 2009.
Consolidated Financial Statement Separate Financial Statement
49
Report of Board of Directors’ Responsibilities inthe Financial Statements
Dear Shareholders
The company consolidated fi nancial statements of Home Product Center Public Company Limited and its
subsidiary have been prepared in conformity with the requirements of the Public Company Act B.E. 2535 (1992), the
Securities and Exchange Act B.E. 2535 (1992), the Announcement of the Department of Commercial Registration
dated September 14, 2001, and the accounting standards prescribed by the Federation of Accounting Professions.
The Board of Directors had an opinion that the company’s overall internal control system is at satisfactory
level, suffi cient to maintain the assets and to protect from fraud, and is responsible for the fi nancial report of
the Company and its subsidiary in order to ensure that it shows the actual result of operation, fi nancial status, and
cash fl ows. There have been proper recording of accurate and complete accounting information. Preparing of
the fi nancial reports has been considered of selecting appropriate accounting policy and regularly in compliance
with the general accepted accounting standard, and there has been disclosing of suffi cient signifi cant information in
the supplementary to the fi nancial statements.
(Mr. Anant Asavabhokhin) (Mr. Khunawut Thumpomkul)
Chairman Managing Director
50
Dear Shareholders
The Audit Committee of the Company consists of 3 independent directors who have abilities, qualifi cations and
independent according to the regulations of the Stock Exchange of Thailand by having Mr. Apilas Osatananda,
as Chairman, Mr. Thaveevat Tatiyamaneekul and Mr. Chanin Roonsamrarn, as directors, having the duty to examine
the reliability of fi nancial statement.
For the year 2010, the Audit Committee has performed the duty according to the scope of responsibility as
stipulated in the charter of the Audit Committee and according to the assignment from the Company’s Board of
Directors. There were 12 meetings which at each meeting all the directors attended, and the auditor was invited to
attend for the agenda which was relevant.
The Audit Committee has the duty and responsibility as assigned by the Board of Directors, which includes
the review for the company in order to have the accurate and suffi cient fi nancial report, have effi cient internal
control system and corporate governance, have the compliance with relevant laws and regulations, have monitored
the transaction which may have confl ict of interest in order to be in compliance with the relevant rules and regulations
and to earn the utmost benefi ts to the company, as well as the selection and proposing the opinion for appointment
of the external auditor.
Essence of the Work Performed in year 2010
1. Having considered and review the quarterly fi nancial report of the company and the annual fi nancial state
ments before such were disclosed to the Stock Exchange of Thailand and the Offi ce of the Securities and Stock
Exchange Commission, which such was made in the agenda of the review of the fi nancial report of the company.
2. Having considered the selection and nomination of company’s independent auditor and determination of
the remuneration to propose to the Company’s Board of Directors for the request for approval from the meeting
of shareholders.
3. Having convened with the independent auditor for 4 times for considering the guidelines for the performance
and scope for the proceeding to examine the accounting, for the result of the audit and recommendation in
order to ensure that the audit of the fi nancial statement has been made completely and appropriately according
to the standard of accounting audit, which the meeting with the auditor had no attendance of the management.
4. Having had the meeting with the Offi ce of Internal Audit for the operation and scope of proceeding, the review
of examination plan in order to ensure that the internal audit has been made completely and appropriately
according to the standard of internal audit, which for the year 2010, the audits were made to evaluate
the suffi ciency and effi ciency of the internal control system of the Company and its subsidiary. In general,
and there was an acknowledgement of the report on the result of the audit and following up of the
improvement and correction according to the recommendations in order to cause more effectiveness
and effi ciency to the internal control system.
5. Having reviewed the performance to be in compliance with the laws on Securities and Stock Exchange, the
rules of the Stock Exchange or the laws relevant to the business proceeding of the company.
6. Having considered the disclosure of information, inter and related transactions and the transaction which
may have confl icts of interest.
7. Having made the evaluation of the suffi ciency and appropriateness of the internal control system which
covers the matter of organization and environment, risks management, the operation control of the management,
information technology and communication, and tracking system.
Audit Committee’s Report
51
The Audit Committee has the following opinion;
1. The fi nancial report of the Company is reliable, accurate and complete according to the generally accepted
accounting principle and has suffi ciently and timely disclosed material information.
2. The company has suffi cient and effi cient internal control system, risks management system, system of operational
control, and the tracking system.
3. The Company has not performed any act in violation to the laws on Securities and Stock Exchange, the rules of
the Stock Exchange or the laws relevant to the business of the Company.
4. The appointed external auditor has experience for the work, and has coverage network and is acceptable both
in the country and overseas, which such causes the standard of the company’s audits to be in the international
level. Also, every auditor and the person who were assigned to sign to certify the financial statements
are independent, have no relation or transaction which may cause confl icts of interest with the Company. This can
be ensured that the accounting audits were made completely and appropriately according to the accounting
standard and were effi cient and transparent.
5. The entering into the transaction with related business or the entering into the transaction which may have
confl icts of interest have been made in accordance with the law, the rules of the Stock Exchange of Thailand, with
appropriate reason for the utmost benefi ts for the Company, and have no indication or other observations to imply
any abnormal circumstance.
6. The Audit Committee has performed the duty completely, correctly and independently, according to the Charter
that the Audit Committee has prescribed with good cooperation from every party.
(Mr. Apilas Osatananda)
Chairman of the Audit Committee
52
To the Shareholders of Home Product Center Public Company Limited
I have audited the accompanying consolidated balance sheet of Home Product Center Public Company Limited
and its subsidiary as at 31 December 2010, the related consolidated statements of income, changes in shareholders’
equity and cash fl ows for the year then ended, and the separate fi nancial statements of Home Product Center
Public Company Limited for the same year. These fi nancial statements are the responsibility of the management of
the Company and its subsidiary as to their correctness and the completeness of the presentation. My responsibility is
to express an opinion on these fi nancial statements based on my audit. The consolidated fi nancial statements of Home
Product Center Public Company Limited and its subsidiary, and the separate fi nancial statements of Home Product
Center Public Company Limited for the year ended 31 December 2009, as presented herein for comparative purposes,
were audited by another auditor in our fi rm who expressed an unqualifi ed opinion on those statements under her
report dated 18 February 2010.
I conducted my audit in accordance with generally accepted auditing standards. Those standards require that
I plan and perform the audit to obtain reasonable assurance about whether the fi nancial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in
the fi nancial statements. An audit also includes assessing the accounting principles used and signifi cant estimates
made by management, as well as evaluating the overall fi nancial statement presentation. I believe that my audit provides
a reasonable basis for my opinion.
In my opinion, the fi nancial statements referred to above present fairly, in all material respects, the fi nancial position
of Home Product Center Public Company Limited and its subsidiary and of Home Product Center Public Company
Limited as at 31 December 2010, and the results of their operations and cash fl ows for the year then ended in
accordance with generally accepted accounting principles.
Gingkarn Atsawarangsalit
Certifi ed Public Accountant (Thailand) No. 4496
Independent Auditor’s Report
53
Balance SheetsAs at 31 December 2010 and 2009
54
(Unit : Baht)
Note
Consolidated fi nancial statements
20102010 2009
(Restated)
2009
(Restated)
Separate fi nancial statements
The accompanying notes are an integral part of the financial statements.
Assets
Current assets
Cash and cash equivalents 7, 12 1,417,245,111 846,330,829 1,391,744,140 824,376,948
Trade accounts receivable - net 8, 12 164,019,004 144,584,882 159,220,872 139,866,504
Inventories - net 10 3,714,231,755 2,905,138,033 3,714,231,755 2,905,138,033
Value added tax receivable 28,231,172 303,776 28,231,172 -
Other receivables - net 9, 12 478,399,129 347,794,276 480,832,986 350,048,810
Other current assets 87,334,310 63,747,426 80,232,000 58,154,929
Total current assets 5,889,460,481 4,307,899,222 5,854,492,925 4,277,585,224
Non-current assets
Investment in subsidiary 11 - - 4,999,300 4,999,300
Property, plant and equipments - net 13 9,672,822,674 8,710,587,478 9,668,997,414 8,703,030,061
Computer software - net 14 130,201,480 92,115,899 129,864,210 92,110,169
Leasehold rights - net 15 831,392,108 702,999,498 831,392,108 702,999,498
Property foreclosed 4,174,122 4,174,122 4,174,122 4,174,122
Rental guarantee deposits 12 47,700,842 37,821,322 47,700,842 37,821,322
Other non-current assets 16,238,088 17,230,349 2,056,352 1,595,201
Total non-current assets 10,702,529,314 9,564,928,668 10,689,184,348 9,546,729,673
Total assets 16,591,989,795 13,872,827,890 16,543,677,273 13,824,314,897
Balance Sheets (Continued)
As at 31 December 2010 and 2009
55
(Unit : Baht)
Note
Consolidated fi nancial statements
20102010 2009
(Restated)
2009
(Restated)
Separate fi nancial statements
The accompanying notes are an integral part of the financial statements.
Liabilities and shareholders’ equity
Current liabilities
Trade accounts payable 12 4,936,826,558 4,216,890,094 4,930,933,267 4,211,189,025
Current portion of liabilities under
fi nancial lease agreements 17 4,598,239 3,539,452 4,598,239 3,539,452
Short-term loans from related party 12 - - 85,000,000 70,000,000
Current portion of debentures 19 730,000,000 160,000,000 730,000,000 160,000,000
Current portion of long-term loans 20 - 486,240,000 - 486,240,000
Payables from purchases of assets 186,444,811 119,219,458 186,444,811 119,219,458
Accrued expenses 518,499,518 422,114,603 501,302,666 404,673,798
Corporate income tax payable 313,024,859 247,190,722 313,024,859 247,190,722
Advances received from customers 471,439,028 430,697,315 471,439,028 430,697,315
Other payables 12 254,731,780 197,239,903 248,156,063 191,781,208
Other current liabilities 218,604,858 165,356,564 216,348,822 163,453,254
Total current liabilities 7,634,169,651 6,448,488,111 7,687,247,755 6,487,984,232
Non-current liabilities
Liabilities under fi nancial lease
agreements - net of current portion 17 6,905,501 5,635,594 6,905,501 5,635,594
Debentures - net of current portion 19 2,000,000,000 1,030,000,000 2,000,000,000 1,030,000,000
Long-term loans - net of current portion 20 - 494,080,000 - 494,080,000
Provision for employee benefi ts 18 76,786,033 63,515,819 76,786,033 63,515,819
Rental received in advance 499,498,041 521,145,727 499,498,041 521,145,727
Other non-current liabilities 136,421,226 100,042,095 62,361,347 28,144,671
Total non-current liabilities 2,719,610,801 2,214,419,235 2,645,550,922 2,142,521,811
Total liabilities 10,353,780,452 8,662,907,346 10,332,798,677 8,630,506,043
(Unit : Baht)
Note
Consolidated fi nancial statements
20102010 2009
(Restated)
2009
(Restated)
Separate fi nancial statements
The accompanying notes are an integral part of the financial statements.
Shareholders’ equity
Share capital 21, 22
Registered share capital
4,426,605,527 ordinary shares of Baht
1 each (2009: 3,794,213,851 ordinary
shares of Baht 1 each) 4,426,605,527 3,794,213,851 4,426,605,527 3,794,213,851
Issued and paid-up share capital
4,352,991,862 ordinary shares of Baht
1 each (2009: 3,703,926,216 ordinary
shares of Baht 1 each) 4,352,991,862 3,703,926,216 4,352,991,862 3,703,926,216
Share premium 621,806,886 594,317,420 621,806,886 594,317,420
Retained earnings
Appropriated - statutory reserve 23 316,800,000 235,400,000 316,800,000 235,400,000
Unappropriated 946,606,069 676,273,953 919,279,848 660,165,218
Equity attributable to the Company’s
shareholders 6,238,204,817 5,209,917,589 6,210,878,596 5,193,808,854
Minority interest - equity attributable to
minority shareholders of subsidiary 4,526 2,955 - -
Total shareholders’ equity 6,238,209,343 5,209,920,544 6,210,878,596 5,193,808,854
Total liabilities and shareholders’ equity 16,591,989,795 13,872,827,890 16,543,677,273 13,824,314,897
Balance Sheets (Continued)
As at 31 December 2010 and 2009
56
(Unit : Baht)
Note
Consolidated fi nancial statements
20102010 2009
(Restated)
2009
(Restated)
Separate fi nancial statements
The accompanying notes are an integral part of the financial statements.
Revenues
Sales income 24,072,755,450 20,329,115,960 24,073,781,310 20,330,434,724
Rental and service income 767,698,279 684,236,990 641,854,232 572,842,217
Other income 1,074,447,671 785,735,252 1,101,125,208 807,702,375
Total revenues 25,914,901,400 21,799,088,202 25,816,760,750 21,710,979,316
Expenses
Cost of sales 18,052,220,987 15,395,071,205 18,052,220,987 15,395,071,205
Selling expenses 4,493,709,519 3,819,276,323 4,405,352,452 3,740,567,347
Administrative expenses 836,282,688 709,946,423 841,147,954 705,554,421
Management benefi t expenses 12 79,459,900 70,950,247 79,459,900 70,950,247
Other expenses 46,720,978 62,097,147 46,674,253 62,035,902
Total expenses 23,508,394,072 20,057,341,345 23,424,855,546 19,974,179,122
Income before fi nancial cost and
corporate income tax 2,406,507,328 1,741,746,857 2,391,905,204 1,736,800,194
Financial cost (103,492,795) (113,129,135) (104,539,836) (114,485,389)
Income before corporate income tax 2,303,014,533 1,628,617,722 2,287,365,368 1,622,314,805
Corporate income tax (664,583,692) (497,738,690) (660,153,584) (496,099,245)
Net income for the year 1,638,430,841 1,130,879,032 1,627,211,784 1,126,215,560
Net income attributable to:
Equity holders of the parent 1,638,429,270 1,130,878,380 1,627,211,784 1,126,215,560
Minority interests of the subsidiary 1,571 652
1,638,430,841 1,130,879,032
Earnings per share 25
Basic earnings per share
Net income attributable to equity
holders of the parent 0.38 0.26 0.37 0.26
Diluted earnings per share
Net income attributable to equity
holders of the parent 0.37 0.26 0.37 0.26
Income StatementsFor the years ended 31 December 2010 and 2009
57
(Unit : Baht)
Consolidated fi nancial statements
20102010 2009
(Restated)
2009
(Restated)
Separate fi nancial statements
The accompanying notes are an integral part of the financial statements.
Statements of cash fl owsFor the years ended 31 December 2010 and 2009
58
Cash fl ows from operating activities
Net income before tax 2,303,014,533 1,628,617,722 2,287,365,368 1,622,314,805
Adjustments to reconcile net income before tax
to net cash provided by (paid for) operating
activities:
Depreciation and amortisation 860,458,906 804,523,182 856,264,684 800,383,504
Reversal allowance for doubtful accounts (2,754,168) (11,245,058) (2,754,168) (11,245,058)
Allowance for stock obsolescence 64,498,619 59,219,925 64,498,619 59,219,925
Loss from sales of assets 11,147,490 2,658,249 11,100,767 2,597,003
Assets written-off, net 39,891,005 2,752,544 39,891,005 2,752,544
Allowance for impairment of assets 32,698,000 57,000,000 32,698,000 57,000,000
Unrealised exchange losses - net 3,864 76,352 3,864 76,352
Interest expenses 99,825,120 110,975,824 101,046,449 112,514,434
Provision for employee benefi ts 15,198,214 11,979,050 15,198,214 11,979,050
Income from operating activities before changes
in operating assets and liabilities 3,423,981,583 2,666,557,790 3,405,312,802 2,657,592,559
Decrease (increase) in operating assets
Trade accounts receivable (16,685,000) 24,242,894 (16,605,246) 24,245,788
Inventories (873,592,341) (236,279,432) (873,592,341) (236,279,432)
Value added tax receivable (27,927,396) 10,959,440 (28,231,172) 11,263,216
Rental guarantee deposits (9,879,520) 569,560 (9,879,520) 569,560
Other receivables (130,599,807) (59,273,969) (130,779,130) (54,600,254)
Other current assets (23,586,884) 7,097,415 (22,077,071) 214,673
Other non-current assets 3,280,505 1,369,372 (461,151) 1,369,373
Increase (decrease) in operating liabilities
Trade accounts payable 719,932,600 519,656,096 719,740,378 518,660,474
Other payables 57,491,877 (1,069,839) 56,374,855 4,669,520
Advances received from customers 40,741,713 (26,830,710) 40,741,713 (26,830,710)
Accrued expenses 91,190,947 104,080,618 91,434,900 102,511,051
Other current liabilities 53,072,642 (6,803,407) 52,719,916 (7,059,267)
Rental received in advance (21,647,686) (21,647,686) (21,647,686) (21,647,686)
Payment of employee benefi ts (1,928,000) - (1,928,000) -
Other non-current liabilities 36,379,131 3,995,800 34,216,676 (2,084,275)
Cash from operating activities 3,320,224,364 2,986,623,942 3,295,339,923 2,972,594,590
Cash paid for interest expenses (94,631,152) (110,016,181) (95,852,481) (111,554,791)
Cash paid for corporate income tax (601,037,799) (422,378,455) (594,319,447) (415,871,285)
Net cash fl ows from operating activities 2,624,555,413 2,454,229,306 2,605,167,995 2,445,168,514
(Unit : Baht)
Consolidated fi nancial statements
20102010 2009
(Restated)
2009
(Restated)
Separate fi nancial statements
The accompanying notes are an integral part of the financial statements.
Statements of cash fl ows (Continued)
For the years ended 31 December 2010 and 2009
59
Cash fl ows from investing activities
Acquisition of computer software (57,679,118) (23,846,186) (57,331,067) (23,846,186)
Acquisition of leasehold rights (160,076,067) (9,347,368) (160,076,067) (9,347,368)
Proceeds from sales of assets 3,219,510 1,125,744 3,216,711 1,119,505
Acquisition of assets (1,791,147,760) (868,891,001) (1,790,652,684) (867,884,386)
Net cash fl ows used in investing activities (2,005,683,435) (900,958,811) (2,004,843,107) (899,958,435)
Cash fl ows from fi nancing activities
Decrease in bank overdrafts and short-term loans
from fi nancial institutions - (124,823,805) - (124,823,805)
Increase in short-term loans from related party - - 15,000,000 25,000,000
Repayment of short-term loans from related party - - - (15,000,000)
Increase in long-term loans - 745,000,000 - 745,000,000
Increase (decrease) in liabilities under fi nancial
lease agreements 2,328,694 (5,591,053) 2,328,694 (5,591,053)
Increase in debentures 1,700,000,000 300,000,000 1,700,000,000 300,000,000
Repayment of debentures (160,000,000) (660,000,000) (160,000,000) (660,000,000)
Repayment of long-term loans (980,320,000) (739,680,000) (980,320,000) (739,680,000)
Converted warrants to share capital 55,139,056 45,816,199 55,139,056 45,816,199
Dividend paid (665,105,446) (871,449,157) (665,105,446) (871,449,157)
Net cash fl ows used in fi nancing activities (47,957,696) (1,310,727,816) (32,957,696) (1,300,727,816)
Net increase in cash and cash equivalents 570,914,282 242,542,679 567,367,192 244,482,263
Cash and cash equivalents at beginning of year 846,330,829 603,788,150 824,376,948 579,894,685
Cash and cash equivalents at end of year 1,417,245,111 846,330,829 1,391,744,140 824,376,948
Supplemental cash fl ows information:
Non-cash items consist of
Purchases of equipment for which no cash
has been paid 67,225,353 5,381,343 67,225,353 5,381,343
Stock dividends 621,416,056 1,752,012,439 621,416,056 1,752,012,439
Sta
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3
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3,9
26
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6
59
4,3
17
,42
0
23
5,4
00
,00
0
739,7
89,7
72
5,2
73,4
33,4
08
2,9
55
5,2
73,4
36,3
63
C
um
ula
tive
effect
of th
e c
hange in
accounting p
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y
for
pro
visio
n for
em
plo
yee b
enefi t
s
6
- -
- (6
3,5
15,8
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(63,5
15,8
19)
- (6
3,5
15,8
19)
B
alan
ce a
s at
31
Dec
emb
er 2
009
- as
res
tate
d
3
,70
3,9
26
,21
6
59
4,3
17
,42
0
23
5,4
00
,00
0
676,2
73,9
53
5,2
09,9
17,5
89
2,9
55
5,2
09,9
20,5
44
N
et
incom
e for
the y
ear
- -
- 1,6
38,4
29,2
70
1,6
38,4
29,2
70
1,5
71
1,6
38,4
30,8
41
To
tal i
nco
me
for
the
year
- -
- 1,6
38,4
29,2
70
1,6
38,4
29,2
70
1,5
71
1,6
38,4
30,8
41
S
tock d
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end
s
28
6
21
,41
6,0
56
-
- (6
21,4
16,0
56)
- -
-
D
ivid
end
paid
2
8
- -
- (6
65,2
81,0
98)
(665,2
81,0
98)
- (6
65,2
81,0
98)
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nap
pro
priate
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eta
ined
earn
ings t
ransfe
rred
to
sta
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ry r
eserv
e
- -
81
,40
0,0
00
(8
1,4
00,0
00)
- -
-
C
onve
rted
warr
ants
to s
hare
cap
ital
21
2
7,6
49
,59
0
27
,48
9,4
66
-
- 55,1
39,0
56
- 55,1
39,0
56
B
alan
ce a
s at
31
Dec
emb
er 2
010
4
,35
2,9
91
,86
2
62
1,8
06
,88
6
31
6,8
00
,00
0
946,6
06,0
69
6,2
38,2
04,8
17
4,5
26
6,2
38,2
09,3
43
60
Sta
tem
ents
of
chan
ges
in s
hare
hold
ers’
equ
ity F
or t
he y
ears
end
ed 3
1 D
ecem
ber
20
10
and
20
09
Issued
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-up
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Note
Ap
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pro
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dTo
tal
Share
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miu
m
Sep
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te fi n
ancia
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tem
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Reta
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ings
(Unit : Bah
t)
The
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tegral p
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ncial sta
temen
ts.
B
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ce a
s at
31
Dec
emb
er 2
008
- as
pre
vio
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rep
ort
ed
1,9
33,6
10,6
00
566,8
04,3
98
178,4
00,0
00
2,2
65,9
48,0
23
4,9
44,7
63,0
21
C
um
ula
tive
effect
of th
e c
hange in
accounting p
olic
y
fo
r p
rovi
sio
n for
em
plo
yee b
enefi t
s
6
- -
- (5
1,5
36,7
69)
(51,5
36,7
69)
B
alan
ce a
s at
31
Dec
emb
er 2
008
- as
res
tate
d
1,9
33,6
10,6
00
566,8
04,3
98
178,4
00,0
00
2,2
14,4
11,2
54
4,8
93,2
26,2
52
N
et
incom
e for
the y
ear
(resta
ted
)
- -
- 1,1
26,2
15,5
60
1,1
26,2
15,5
60
To
tal i
nco
me
for
the
year
- -
- 1,1
26,2
15,5
60
1,1
26,2
15,5
60
S
tock d
ivid
end
s
28
1,7
52,0
12,4
39
- -
(1,7
52,0
12,4
39)
-
D
ivid
end
paid
28
- -
-
(871,4
49,1
57)
(871,4
49,1
57)
U
nappro
pria
ted reta
ined e
arn
ings
transf
err
ed to s
tatu
tory
rese
rve
-
- 57,0
00,0
00
(57,0
00,0
00)
-
C
onve
rted
warr
ants
to s
hare
cap
ital
18,3
03,1
77
27,5
13,0
22
- -
45,8
16,1
99
B
alan
ce a
s at
31
Dec
emb
er 2
009
3,7
03,9
26,2
16
594,3
17,4
20
235,4
00,0
00
660,1
65,2
18
5,1
93,8
08,8
54
B
alan
ce a
s at
31
Dec
emb
er 2
009
- as
pre
vio
usly
rep
ort
ed
3,7
03,9
26,2
16
594,3
17,4
20
235,4
00,0
00
723,6
81,0
37
5,2
57,3
24,6
73
C
um
ula
tive
effect
of th
e c
hange in
accounting p
olic
y
fo
r p
rovi
sio
n for
em
plo
yee b
enefi t
s
6
- -
- (6
3,5
15,8
19)
(63,5
15,8
19)
B
alan
ce a
s at
31
Dec
emb
er 2
009
- as
res
tate
d
3,7
03,9
26,2
16
594,3
17,4
20
235,4
00,0
00
660,1
65,2
18
5,1
93,8
08,8
54
N
et
incom
e for
the y
ear
- -
- 1,6
27,2
11,7
84
1,6
27,2
11,7
84
To
tal i
nco
me
for
the
year
- -
- 1,6
27,2
11,7
84
1,6
27,2
11,7
84
S
tock d
ivid
end
s
28
621,4
16,0
56
- -
(621,4
16,0
56)
-
D
ivid
end
paid
28
- -
- (6
65,2
81,0
98)
(665,2
81,0
98)
U
nappro
pria
ted reta
ined e
arn
ings
transf
err
ed to s
tatu
tory
rese
rve
-
- 81,4
00,0
00
(81,4
00,0
00)
-
C
onve
rted
warr
ants
to s
hare
cap
ital
21
27,6
49,5
90
27,4
89,4
66
- -
55,1
39,0
56
B
alan
ce a
s at
31
Dec
emb
er 2
010
4,3
52,9
91,8
62
621,8
06,8
86
316,8
00,0
00
919,2
79,8
48
6,2
10,8
78,5
96
61
1. Corporate information
Home Product Center Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand.
Its major shareholders are Land and Houses Plc. and Quality Houses Plc., which were incorporated in Thailand. The Company is
principally engaged in the trading of a complete range of goods and materials for construction, addition, refurbishment and renovation
of buildings and residences, and provision for related services, together with space rental. Its registered address is 96/27 Moo 9,
Tambol Bangkhen, Amphur Muang, Nonthaburi. As at 31 December 2010, the Company has a total of 40 branches operating in
Bangkok and other provinces (2009: 35 branches).
2. Basis of preparation
2.1 The fi nancial statements have been prepared in accordance with accounting standards enunciated under the Accounting
Profession Act B.E. 2547, except for the Thai Accounting Standard No. 19 regarding “Employee Benefi ts”, which the
Company had early adopted before the date of enforcement.
The presentation of the fi nancial statement has been made in compliance with the stipulations of the Notifi cation of the
Department of Business Development dated 30 January 2009, issued under the Accounting Act B.E. 2543.
The fi nancial statements in Thai language are the offi cial statutory fi nancial statements of the Company. The fi nancial
statements in English language have been translated from the Thai language fi nancial statements.
The fi nancial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting
policies.
2.2 Basis of consolidation
a) The consolidated fi nancial statements include the fi nancial statements of the Company (“the Company”) and the
following subsidiary (“the subsidiary”):
Notes to consolidated fi nancial statements For the years ended 31 December 2010 and 2009
b) Subsidiary is fully consolidated as from the date of acquisition, being the date on which the Company obtains control,
and continue to be consolidated until the date when such control ceases.
c) The fi nancial statements of the subsidiary are prepared using the same signifi cant accounting policies as the Company.
d) Material balances and transactions between the Company and its subsidiary have been eliminated from the consolidated
fi nancial statements.
e) Investment in the subsidiary as recorded in the Company’s books of account is eliminated against the equity of the
subsidiary.
f) Minority interest represents the portion of net income or loss and net assets of the subsidiary that is not held by the
Company and is presented separately in the consolidated income statement and within equity in the consolidated
balance sheet.
Company’s name
2009 200920092010 20102010
Nature of
business
Country of
incorporation
Percentage of
shareholding
Assets as a percentage
to the consolidated total
assets as at 31 Dec
Revenues as a percentage
to the consolidated total
revenues for the years
ended 31 Dec
Space Percent Percent Percent Percent Percent Percent
Market Village Co., Ltd. rental Thailand 99.99 99.99 0.34 0.40 1.09 1.20
62
2.3 The separate fi nancial statements, which present investment in subsidiary presented under the cost method, have been
prepared solely for the benefi t of the public.
3. Adoption of new accounting standards
During the current year, the Federation of Accounting Professions issued a number of revised and new accounting standards
as listed below.
a) Accounting standards that are effective for fi scal years beginning on or after 1 January 2011 (except Framework for the
Preparation and Presentation of Financial Statements, which is immediately effective):
Framework for the Preparation and Presentation of Financial Statements (revised 2009)
TAS 1 (revised 2009) Presentation of Financial Statements
TAS 2 (revised 2009) Inventories
TAS 7 (revised 2009) Statement of Cash Flows
TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors
TAS 10 (revised 2009) Events after the Reporting Period
TAS 11 (revised 2009) Construction Contracts
TAS 16 (revised 2009) Property, Plant and Equipment
TAS 17 (revised 2009) Leases
TAS 18 (revised 2009) Revenue
TAS 19 Employee Benefi ts
TAS 23 (revised 2009) Borrowing Costs
TAS 24 (revised 2009) Related Party Disclosures
TAS 26 Accounting and Reporting by Retirement Benefi t Plans
TAS 27 (revised 2009) Consolidated and Separate Financial Statements
TAS 28 (revised 2009) Investments in Associates
TAS 29 Financial Reporting in Hyperinfl ationary Economies
TAS 31 (revised 2009) Interests in Joint Ventures
TAS 33 (revised 2009) Earnings per Share
TAS 34 (revised 2009) Interim Financial Reporting
TAS 36 (revised 2009) Impairment of Assets
TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets
TAS 38 (revised 2009) Intangible Assets
TAS 40 (revised 2009) Investment Property
TFRS 2 Share-Based Payment
TFRS 3 (revised 2009) Business Combinations
TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued Operations
TFRS 6 Exploration for and Evaluation of Mineral Resources
TFRIC 15 Agreements for the Construction of Real Estate
b) Accounting standards that are effective for fi scal years beginning on or after 1 January 2013:
TAS 12 Income Taxes
TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance
TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates
63
The Company’s management believes that these accounting standards will not have any signifi cant impact on the fi nancial
statements for the year when they are initially applied, except for the following accounting standards which management expects
the impact on the fi nancial statements in the year when they are adopted.
TAS 12 Income Taxes
This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount
of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the
stipulated guidelines.
At present, the management is evaluating the impact on the fi nancial statements in the year when this standard is adopted.
TAS 23 (revised 2009) Borrowing Costs
This accounting standard requires entities to capitalize borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying asset as part of the cost of that asset. Currently, the Company elected to expense such borrowing
costs when incurred. The change in this accounting policy will be applied for borrowing costs incurred on or after 1 January 2011.
4. Signifi cant accounting policies
4.1 Revenue recognition
Sales of goods Sales of goods are recognised when the signifi cant risks and rewards of ownership of the goods have
passed to the buyer. Sales are recorded based on the selling prices after deducting discounts and allowances.
Rendering of services Service revenue is recognised when services have been rendered taking into account the stage
of completion.
Rental income Rental income under operating leases is recognised over the lease period.
Interest income Interest income is recognised on an accrual basis based on the effective interest rate.
4.2 Cash and cash equivalents
Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity
of three months or less and not subject to withdrawal restrictions.
4.3 Trade accounts receivable
Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is provided for the
estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences
and analysis of debt aging.
4.4 Inventories
Inventories are valued at the lower of cost (moving average cost method) and net realisable value.
Volume incentives received from the supplier are accounted for as a reduction of the value of inventory and recognised
in income statement when the related inventory is sold.
4.5 Investment
Investment in subsidiary is accounted for in the separated fi nancial statements using the cost method.
64
4.6 Property, plant and equipment/Depreciation
Land is stated at cost, buildings and equipment are stated at cost less accumulated depreciation, and less allowance for
loss on impairment of assets (if any).
Depreciation of plant and equipment is calculated by reference to their costs, on the straight-line basis over the following
estimated useful lives:
Buildings - 20 years
Buildings on lease land and building improvement - useful lives but not over lease periods
Computer equipment - 3 - 10 years
Furniture, fi xtures and offi ce equipment - 5 - 10 years
Motor vehicles - 5 years
Depreciation is included in determining income.
No depreciation is provided on land and assets under installation and under construction.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are expected
from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.
4.7 Intangible assets
Intangible assets are initially recognised at cost. Following the initial recognition, the intangible assets are carried at cost
less any accumulated amortisation and any accumulated impairment losses (if any).
Intangible assets (computer software) with fi nite lives are amortised on a systematic basis over the economic useful life
(10 years) and tested for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and the amortisation method of such intangible assets are reviewed at least at each fi nancial year
end. The amortisation expense is charged to the income statement.
4.8 Leasehold rights and amortisation
Leasehold rights are stated at cost less accumulated amortisation. The Company amortises leasehold rights on a
straight-line basis over the leasehold period.
The amortisation is included in determining income.
4.9 Borrowing costs
Borrowing costs directly attributable to the acquisition or construction of an asset that necessarily takes a substantial
period of time to get ready for its intended use are recognised as an expense when incurred.
4.10 Related party transactions
Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or
indirectly, or which are under common control with the Company.
They also include individuals which directly or indirectly own a voting interest in the Company that gives them signifi cant
infl uence over the Company, key management personnel, directors and offi cers with authority in the planning and direction
of the Company’s operations.
65
4.11 Long-term leases
Leases of equipment and motor vehicles which transfer substantially all the risks and rewards of ownership are classifi ed
as fi nance leases. Finance leases are capitalised at the lower of the fair value of the leased assets and the present value of
the minimum lease payments. The outstanding rental obligations, net of fi nance charges, are included in other long-term
payables, while the interest element is charged to the income statements over the lease period. The equipment and motor
vehicles acquired under fi nance leases are depreciated over the useful life of the assets.
Operating lease payments are recognised as an expense in the income statement on a straight line basis over the lease term.
4.12 Foreign currencies
Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rates ruling at
the balance sheet date.
Gains and losses on exchange are included in determining income.
4.13 Impairment of assets
At each reporting date, the Company performs impairment reviews in respect of the properly, plant and equipment and
other assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss
is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell
and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash fl ows are
discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time
value of money and the risks specifi c to the asset. In determining fair value less costs to sell, an appropriate valuation
model is used. These calculations are corroborated by a valuation model that, based on information available, refl ects
the amount that the Company could obtain from the disposal of the asset in an arm’s length transaction between
knowledgeable, willing parties, after deducting the costs of disposal.
An impairment loss is recognised in the income statement.
In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no
longer exist or may have decreased, the Company estimates the asset’s recoverable amount. A previously recognised
impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable
amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a
reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment
loss been recognised for the asset in prior years. Such reversal is recognised in the income statement.
4.14 Employee benefi ts
Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised as expenses
when incurred.
The provision for employee retirement benefi ts is calculated by estimating the amount of future benefi t earned by employees
in return for service provided to the Company in the current and future periods, using the actuarial valuation. Such benefi ts
are discounted to determine the present value. The reference point for setting the discount rate is the yield rate of
government bonds as at the reporting date. The calculation is performed by a qualifi ed actuary using the Projected Unit
Credit Method.
66
When the benefi ts of a plan are improved, the portion of the increased benefi t relating to past service by employees is
recognised in the income statement on a straight-line basis over the average period until the benefi ts become vested.
Any actuarial gains or losses are recognised in the statement of income in the period in which they arise.
4.15 Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that an
outfl ow of resources embodying economic benefi ts will be required to settle the obligation, and a reliable estimate can
be made of the amount of the obligation.
4.16 Income tax
Income tax is recognised using the income tax payable method, calculated based on taxable profi ts determined in
accordance with tax legislation.
5. Signifi cant accounting judgments and estimates
The preparation of fi nancial statements in conformity with generally accepted accounting principles at times requires management
to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect
reported amounts and disclosures and actual results could differ. Signifi cant judgments and estimates are as follows:
Leases
In determining whether a lease is to be classifi ed as an operating lease or fi nance lease, the management is required to
use judgment regarding whether signifi cant risk and rewards of ownership of the leased asset has been transferred, taking
into consideration terms and conditions of the arrangement.
Allowance for damaged goods
In determining an allowance for damaged goods due to loss or deterioration, the management needs to exercise judgment
in making estimates based upon the condition of goods and the duration such goods have remained in stock.
Allowance for doubtful accounts
In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon,
among other things, past collection history, aging profi le of outstanding debts and the prevailing economic condition.
Fair value of fi nancial instruments
In determining the fair value of fi nancial instruments that are not actively traded and for which quoted market prices are
not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these
models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of fi nancial
instruments.
Property plant and equipment/Depreciation
In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives
and salvage values of the Company’s plant and equipment and to review estimate useful lives and salvage values when there
are any changes.
In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and
record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying cost.
This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review.
67
(Unit : Baht)
Cash 86,922,003 60,264,352 86,191,705 59,686,438
Bank deposits 135,323,108 111,066,477 110,552,435 89,690,510
Bills of exchange 1,195,000,000 675,000,000 1,195,000,000 675,000,000
Total 1,417,245,111 846,330,829 1,391,744,140 824,376,948
2010
Consolidated fi nancial statements Separate fi nancial statements
20102009 2009
(Unit : Baht)
2010
Consolidated fi nancial statements Separate fi nancial statements
20102009 2009
Trade accounts receivable 84,015,217 79,645,437 79,217,085 74,973,931
Check returned receivable 2,211,537 4,788,722 2,211,537 4,788,722
Credit card and coupon receivable 80,441,476 65,549,071 80,441,476 65,502,199
Total 166,668,230 149,983,230 161,870,098 145,264,852
Less: Allowance for doubtful accounts (2,649,226) (5,398,348) (2,649,226) (5,398,348)
Trade accounts receivable - net 164,019,004 144,584,882 159,220,872 139,866,504
Marketing promotion expenses
Marketing promotion expenses arise in respect of advertising and promotional activities, including various sales promotion
activities that are undertaken when the Company has already sold merchandise but still has obligations to customers to make
payment related to such sales promotion in the future. Certain transactions are estimates based on experience and comparison
with various information available in the related market. However, the use of different estimates and assumptions could affect
the amounts of marketing promotion expenses and adjustments to this expense may therefore be required in the future.
Pension and post-retirement benefi ts
Pension and post-retirement benefi t costs are based on actuarial calculations. Inherent within these calculations are
assumptions as to salary increases and discount rate, among others.
6. Change in accounting policy
During the current year, the Company hired an independent actuarial company to assess the value of provision for employee
retirement benefi ts using the Projected Unit Credit Method, in order to refl ect such value appropriately. The Company applied the
change retrospectively, by adjusting provision of Baht 63.5 million against retained earnings brought forward of the year 2010, and
restating the fi nancial statements for the year 2009 as though such provision had always been recorded. As a result, net income
in the consolidated and separate fi nancial statements for the year ended 31 December 2009 decreased by Baht 12.0 million.
The cumulative effect of the change in accounting policy has been presented under the heading of “Cumulative effect of the
change in accounting policy for provision for employee benefi ts” in the statements of changes in shareholders’ equity.
7. Cash and cash equivalents
As at 31 December 2010, bank deposits in saving accounts and bills of exchange carried interests between 0.25 and 1.60
percent per annum (2009: between 0.50 and 2.85 percent per annum).
8. Trade accounts receivable
68
(Unit : Baht)
2010
Consolidated fi nancial statements Separate fi nancial statements
20102009 2009
Age of receivables
Not yet due 169,956,341 122,516,249 172,390,198 124,770,783
Past due:
Up to 6 months 304,083,566 222,275,208 304,083,566 222,275,208
6 - 12 months 1,971,495 3,083,936 1,971,495 3,083,936
Over 12 months 11,382,681 8,918,883 11,382,681 8,918,883
Total 487,394,083 356,794,276 489,827,940 359,048,810
Less: Allowance for doubtful accounts (8,994,954) (9,000,000) (8,994,954) (9,000,000)
Other receivables - net 478,399,129 347,794,276 480,832,986 350,048,810
(Unit : Baht)
Consolidated and separate fi nancial statements
2010 2009
Inventories 4,559,357,759 3,613,453,916
Less: Allowance for stock obsolescence (149,360,727) (112,301,165)
Net 4,409,997,032 3,501,152,751
Less: Inventories - repaid its cost when sold (566,259,876) (495,509,317)
Purchase discount (129,505,401) (100,505,401)
Inventories - net 3,714,231,755 2,905,138,033
(Unit : Baht)
2010
Consolidated fi nancial statements Separate fi nancial statements
20102009 2009
Age of receivables
Not yet due 143,397,176 133,064,836 140,420,729 130,671,318
Past due:
Upto 6 months 20,816,374 11,801,713 18,994,689 9,520,286
6 - 12 months - 43,433 - -
Over 12 months 2,454,680 5,073,248 2,454,680 5,073,248
Total 166,668,230 149,983,230 161,870,098 145,264,852
Less: Allowance for doubtful accounts (2,649,226) (5,398,348) (2,649,226) (5,398,348)
Trade accounts receivable - net 164,019,004 144,584,882 159,220,872 139,866,504
The outstanding balances of trade accounts receivable as at 31 December 2010 and 2009 are aged as follows:
9. Other receivables
Other receivables mainly consist of receivables from sale support operation and area rental and related service receivables.
The outstanding balances of other receivables as at 31 December 2010 and 2009 are aged as follows:
10. Inventories
69
(Unit : Baht)
2010 2010 2010 20102009 2009 2009 2009
Separate fi nancial statements
Paid-up capital Shareholding percentage CostDividend received
during the year
Subsidiary (Percent) (Percent)
Market Village Company Limited 5,000,000 5,000,000 99.99 99.99 4,999,300 4,999,300 - -
2010
Consolidated
fi nancial statements
Separate
fi nancial statements Pricing policy
20102009 2009
(Unit : Baht)
Transactions with subsidiary company
(eliminated from the consolidated
fi nancial statements)
Sales of goods - - 1,025,860 1,318,764 Market price
Rental and service income - - 146,311,429 138,894,845 Baht 11.7 - 12.3 million per month
for 2010 (Baht 10.9 - 11.7 million per
month for 2009)
Other income - - 27,671,890 24,293,934 Percentage of core revenue
Service income - - 9,277,234 7,558,230 Actual cost
Service expense - - 603,020 64,540 Market price
Interest expenses - - 1,221,329 1,538,610 1.50 - 1.85 percent per annum
(2009: 1.50 - 4.00 percent per annum)
Transactions with related companies
Sales of goods 11,499,285 4,371,699 11,499,285 4,371,699 Market price
Interest income 5,702,548 1,809,526 5,702,548 1,809,526 0.25 - 1.60 percent per annum
(2009: 0.75 - 2.85 percent per annum)
Purchases of goods 547,100 1,410,774 547,100 1,410,774 Market price
Rental and service expenses 17,645,175 17,918,221 17,645,175 17,918,221 Percentage of sales but not less
than a minimum rate
70
11. Investment in subsidiary
12. Related party transactions
During the years, the Company and its subsidiary had signifi cant business transactions with related parties. Such transactions,
which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed
upon between the Company and those related parties.
(Unit : Baht)
Increase
During the year As at
31 Dec 2010
As at
31 Dec 2009Decrease
Subsidiary
Market Village Co., Ltd. 70,000,000 15,000,000 - 85,000,000
(Unit : Baht)
2010
Consolidated fi nancial statements Separate fi nancial statements
20102009 2009
Bill of exchanges and deposits with fi nancial institution
(included in cash and cash equivalents)
Land and Houses Retail Bank Plc. (1) 1,196,574,649 677,976,592 1,196,574,649 677,976,592
Trade accounts receivable
Land and Houses Plc. and subsidiaries (2) 2,363,253 432,460 2,363,253 432,460
Quality Houses Plc. and subsidiaries (2) 959,041 141,868 959,041 141,868
Market Village Co., Ltd.
(eliminated from the consolidated fi nancial statements) - - 124,190 81,800
Total 3,322,294 574,328 3,446,484 656,128
Other receivables
Quality Construction Products Plc. (3) 3,210 3,210 3,210 3,210
Market Village Co., Ltd.
(eliminated from the consolidated fi nancial statements) - - 2,433,857 2,254,534
Total 3,210 3,210 2,437,067 2,257,744
Rental guarantee deposits
Quality Houses Property Fund(1) 3,000,000 3,000,000 3,000,000 3,000,000
Trade account payable
Quality Construction Products Plc.(3) - 161,918 - 161,918
Short-term loans from related party
Market Village Co., Ltd.
(eliminated from the consolidated fi nancial statements) - - 85,000,000 70,000,000
Other payables
Quality Houses Property Fund(1) 1,436,038 1,302,452 1,436,038 1,302,452
Market Village Co., Ltd.
(eliminated from the consolidated fi nancial statements) - - 13,977 -
Total 1,436,038 1,302,452 1,450,015 1,302,452
Relationship with the related companies (1) has common shareholders (2) the major shareholders (3) has common directors
71
As at 31 December 2010 and 2009, the Company had the outstanding balances with related parties which had been included
in the following accounts:
During the year 2010, movements in the balances of short-term loans from related party were as follows:
The Company has received unsecured loans of Baht 85 million on which interest is payable on a monthly basis at a rate of
1.50 - 1.85 percent per annum (2009: 1.50 - 4.00 percent per annum). The loans are repayable at call.
Consolidated fi nancial statements
Land and land
improvement
Buildings and
building
improvement
Computer
equipment
Furniture,
fi xtures and
offi ce
equipment
Motor
vehicles
Assets under
installation
and under
construction
Total
(Unit : Baht)
Cost:
As at 31 December 2009 2,380,384,994 7,200,605,936 307,060,222 1,981,422,476 41,964,035 99,117,491 12,010,555,154
Additions 97,469,176 83,646,056 45,512,958 299,361,183 7,947,553 1,324,436,187 1,858,373,113
Disposals and written-off - (75,769,581) (16,439,486) (107,943,786) (6,331,808) - (206,484,661)
Transfers in (out) 4,302,000 526,948,245 11,028,913 156,436,536 - (698,715,694) -
As at 31 December 2010 2,482,156,170 7,735,430,656 347,162,607 2,329,276,409 43,579,780 724,837,984 13,662,443,606
Accumulated depreciation:
As at 31 December 2009 - 1,616,665,539 252,826,116 1,325,845,362 27,090,659 - 3,222,427,676
Depreciation for the year - 446,961,250 39,670,440 314,482,694 7,434,872 - 808,549,256
Depreciation on disposals
and written-off - (40,828,948) (16,424,483) (91,308,221) (6,032,348) - (154,594,000)
As at 31 December 2010 - 2,022,797,841 276,072,073 1,549,019,835 28,493,183 - 3,876,382,932
Allowance for impairment loss:
As at 31 December 2009 13,000,000 64,540,000 - - - - 77,540,000
Increase during the year - 53,598,000 - - - - 53,598,000
Decrease during the year - (17,900,000) - - - - (17,900,000)
As at 31 December 2010 13,000,000 100,238,000 - - - - 113,238,000
Net book value:
31 December 2009 2,367,384,994 5,519,400,397 54,234,106 655,577,114 14,873,376 99,117,491 8,710,587,478
31 December 2010 2,469,156,170 5,612,394,815 71,090,534 780,256,574 15,086,597 724,837,984 9,672,822,674
Depreciation for the year
2009 (Baht 714.4 million included in selling expenses, and the balance in administrative expenses) 756,319,116
2010 (Baht 773.3 million included in selling expenses, and the balance in administrative expenses) 808,549,256
72
Directors and management’s benefi ts
In 2010, the Company and its subsidiary had salaries, bonus, meeting allowance and gratuities of their directors and
management recognised as expenses totaling Baht 79.46 million (2009: Baht 70.95 million).
13. Property, plant and equipment
Separate fi nancial statements
Land and land
improvement
Buildings and
building
improvement
Computer
equipment
Furniture,
fi xtures and
offi ce
equipment
Motor
vehicles
Assets under
installation
and under
construction
Total
(Unit : Baht)
Cost:
As at 31 December 2009 2,380,384,994 7,199,960,219 306,812,940 1,961,881,890 41,366,990 99,117,491 11,989,524,524
Additions 97,469,176 83,646,056 45,391,909 299,098,418 7,947,553 1,324,324,925 1,857,878,037
Disposals and written-off - (75,769,581) (16,439,486) (107,723,277) (6,331,809) - (206,264,153)
Transfers in (out) 4,302,000 526,948,245 11,028,913 156,436,536 - (698,715,694) -
As at 31 December 2010 2,482,156,170 7,734,784,939 346,794,276 2,309,693,567 42,982,734 724,726,722 13,641,138,408
Accumulated depreciation:
As at 31 December 2009 - 1,616,509,808 252,675,868 1,313,145,786 26,623,001 - 3,208,954,463
Depreciation for the year - 446,896,679 39,582,207 310,575,360 7,317,300 - 804,371,546
Depreciation on disposals
and written-off - (40,828,948) (16,424,483) (91,137,236) (6,032,348) - (154,423,015)
As at 31 December 2010 - 2,022,577,539 275,833,592 1,532,583,910 27,907,953 - 3,858,902,994
Allowance for impairment loss:
As at 31 December 2009 13,000,000 64,540,000 - - - - 77,540,000\
Increase during the year - 53,598,000 - - - - 53,598,000
Decrease during the year - (17,900,000) - - - - (17,900,000)
As at 31 December 2010 13,000,000 100,238,000 - - - - 113,238,000
Net book value:
31 December 2009 2,367,384,994 5,518,910,411 54,137,072 648,736,104 14,743,989 99,117,491 8,703,030,061
31 December 2010 2,469,156,170 5,611,969,400 70,960,684 777,109,657 15,074,781 724,726,722 9,668,997,414
Depreciation for the year
2009 (Baht 714.4 million included in selling expenses, and the balance in administrative expenses) 752,180,384
2010 (Baht 773.3 million included in selling expenses, and the balance in administrative expenses) 804,371,546
73
As at 31 December 2010, the Company had vehicles and equipment under fi nance lease agreements with net book values
amounting to Baht 15.2 million (2009: Baht 15.4 million).
As at 31 December 2010, certain plant and equipment items have been fully depreciated but are still in use. The gross
carrying amount (before deducting accumulated depreciation) of those assets amounted to approximately Baht 859.2 million
(2009: Baht 512.6 million) (The separate fi nancial statements: Baht 858.9 million, 2009: Baht 512.6 million).
As at 31 December 2009, the Company had mortgaged buildings and leasehold rights (Note 15) with net book value of
Baht 625.4 million to secure credit facilities from banks. In November 2010, the Company released the pledged assets in full,
as discussed in Note 20
(Unit : Baht)
Separate
fi nancial statements
Consolidated
fi nancial statements
Cost
31 December 2009 234,652,474 234,643,018
Acquisitions during the year 57,679,118 57,331,067
Written-off during the year (6,296,962) (6,296,962)
31 December 2010 286,034,630 285,677,123
Accumulated amortisation
31 December 2009 99,536,575 99,532,849
Amortisation for the year 20,873,036 20,856,524
Amortisation on written-off (4,576,461) (4,576,460)
31 December 2010 115,833,150 115,812,913
Allowance for impairment loss
31 December 2009 43,000,000 43,000,000
Decrease during the year (3,000,000) (3,000,000)
31 December 2010 40,000,000 40,000,000
Net book value
31 December 2009 92,115,899 92,110,169
31 December 2010 130,201,480 129,864,210
(Unit : Baht)
Consolidated and Separate fi nancial statements
Cost
31 December 2009 870,798,826
Acquisitions during the year 160,076,067
Written-off during the year (870,573)
31 December 2010 1,030,004,320
Accumulated amortisation
31 December 2009 167,799,328
Amortisation for the year 31,036,614
Amortisation on written-off (223,730)
31 December 2010 198,612,212
Net book value
31 December 2009 702,999,498
31 December 2010 831,392,108
74
14. Computer software
15. Leasehold rights
(Unit : Baht)
Future minimum lease payments 5.15 7.43 12.58
Deferred interest expenses (0.55) (0.52) (1.07)
Present value of future minimum lease payments 4.60 6.91 11.51
Less than 1 year 1 - 5 years Total
(Unit : Baht)
2010 2010
Portion due within one year
Consolidated and separate fi nancial statements
Portion due over one year
2009 2009
Liabilities under fi nancial lease agreements 5,145,326 3,996,042 7,429,996 5,995,160
Less: Deferred interest expense (547,087) (456,590) (524,495) (359,566)
Net 4,598,239 3,539,452 6,905,501 5,635,594
(Unit : Baht)
Consolidated and separate fi nancial statements
20092010
Defi ned benefi t obligation at the beginning of year 63,515,819 51,536,769
Current service cost 12,212,971 9,556,822
Interest cost 2,985,243 2,422,228
Benefi ts paid (1,928,000) -
Defi ned benefi t obligation at the end of year 76,786,033 63,515,819
75
18. Provision for employee benefi ts
Movements in the defi ned benefi t obligation for the year ended 31 December 2010 are summarised below.
16. Bank overdrafts and short-term loans from fi nancial institutions
As at 31 December 2010 and 2009, the Company had overdraft lines from banks totaling Baht 175 million and Baht 155
million, respectively, and other credit facilities amounting to Baht 4,203 million and Baht 3,929 million, respectively.
17. Liabilities under fi nancial lease agreements
The Company has entered into the fi nance lease agreements with leasing companies for rental of motor vehicles and
equipment for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms of the agreements are
generally between 3 to 5 years.
As at 31 December 2010, Future minimum lease payments required under the fi nance lease agreements were as follows:
(Unit : Baht)
Consolidated and separate fi nancial statements
2010 2009
Current service cost 12,212,971 9,556,822
Interest cost 2,985,243 2,422,228
Total benefi t expenses 15,198,214 11,979,050
Benefi t expenses recognised in:
Selling expenses 3,991,941 3,596,118
Administrative expenses 8,224,174 5,690,985
Management benefi t expenses 2,982,099 2,691,947
2553 25532552 2552
(Unit : Baht)
2010 2010
Number of debentures (Unit)
Consolidated and separate fi nancial statements
Amount (Baht)
2009 2009
Unsecured debentures
#1/2008 500,000 500,000 100,000,000 260,000,000
#2/2008 630,000 630,000 630,000,000 630,000,000
#1/2009 300,000 300,000 300,000,000 300,000,000
#1/2010 700,000 - 700,000,000 -
#2/2010 1,000,000 - 1,000,000,000 -
Total 3,130,000 1,430,000 2,730,000,000 1,190,000,000
Less: Current portion (730,000,000) (160,000,000)
Debentures - net of current portion 2,000,000,000 1,030,000,000
76
The amounts recognised in the income statements for the year ended 31 December 2010 and 2009 are as follows:
Principal actuarial assumptions at the valuation date were a discount rate 4.7% per annum, a future salary increase rate of
6.7% - 7.2% per annum, and an infl ation rate of 2.0% per annum.
19. Debentures
Amount Baht 500 million
Term 3 years, starting from date of issuance
Issue date 2 May 2008
Interest rate 4.00% per annum
Interest payment schedule Quarterly in February, May, August and November
Principal repayment 12 quarterly payments totaling Baht 40 million each (the last of Baht 60 million),
starting 2 August 2008 and with the last payment due on 2 May 2011
Covenants Maintenance of debt to equity ratio
“The Principal paid by installment of the Unsubordinated and Unsecured Debentures of
Home Product Center Plc. No. 1/2008 Due 2011”Name of debentures
Amount Baht 630 million
Term 3 years, starting from date of issuance
Issue date 21 November 2008
Interest rate 5.50% per annum
Interest payment schedule Quarterly in November, February, May and August
Principal repayment On the redemption date of 21 November 2011
Covenants Maintenance of debt to equity ratio and restriction on dividend payment
“The Unsubordinated and Unsecured Debentures of Home Product Center Plc.
No. 2/2008 due 2011”Name of debentures
77
Details of the Company’s debentures are as follows:
1. The Principal paid by installment of the Unsubordinated and Unsecured Debentures of Home Product Center Plc.
No. 1/2008 Due 2011
During 2010, the Company repaid the principal of debenture amounting to Baht 40 million per each installment,
totalling Baht 160 million, as stipulated in the terms of repayment of the above debentures, to the debenture holders.
2. The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No.2/2008 Due 2011.
On 8 April 2009, the Annual General Meeting of the shareholders of the Company passed resolution approving the
cancellation of debentures which previously approved for issuance and has not yet been offered at the amount of
Baht 1,870 million, and the issuance and offering of debt instruments, details are as follows:
• The issuance and offering of bills of exchange and/or short-term debentures of which the maturity date shall not
exceed 270 days from the date of issuance, in the amount of not exceeding Baht 2,000 million.
• The issuance and offering of long-term debentures of which the maturity date shall not exceed 10 years from the date
of issuance, in the amount of not exceeding Baht 4,000 million.
Amount Baht 300 million
Term 3 years, starting from date of issuance
Issued date 1 October 2009
Interest rate 4.00% per annum
Interest payment schedule Quarterly in January, April, July and October, starting from 1 January 2010 and with the last
payment due on 2 October 2012
Principal repayment On the redemption date of 2 October 2012
Covenants Maintenance of debt to equity ratio and restriction on dividend payment
“The Unsubordinated and Unsecured Debentures of Home Product Center Plc.
No. 1/2009 due 2012”Name of debentures
Amount Baht 700 million
Term 3 years, starting from date of issuance
Issued date 8 January 2010
Interest rate 3.65% per annum
Interest payment schedule Quarterly in January, April, July and October, starting from 8 April 2010 and with the last payment
due on 8 January 2013
Principal repayment On the redemption date of 8 January 2013
Covenants Maintenance of debt to equity ratio and restriction on dividend payment
“The Unsubordinated and Unsecured Debentures of Home Product Center Plc.
No. 1/2010 due 2013”Name of debentures
Amount Baht 1,000 million
Term 3 years, starting from date of issuance
Issued date 25 June 2010
Interest rate 3.00% per annum
Interest payment schedule Semi-annually in June and December, starting from 25 December 2010 and with the last payment
due on 25 June 2013
Principal repayment On the redemption date of 25 June 2013
Covenants Maintenance of debt to equity ratio and restriction on dividend payment
“The Unsubordinated and Unsecured Debentures of Home Product Center Plc.
No. 2/2010 due 2013”Name of debentures
78
3. The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 1/2009 due 2012
4. During 2010, the Company issued the Unsubordinated and Unsecured Debentures of Home Product Center Plc.,
to be sold to institutional investor and/or major investor, in accordance with a resolution of the Annual General Meeting
of the Company held on 8 April 2009. Details are as follows: -
4.1 The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 1/2010 due 2013
4.2 The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 2/2010 due 2013
(Unit : Baht)
2010
Outstanding balancesNo. Interest Rate
Terms of payment
(per month)
Consolidated and separate fi nancial statements
2009
Principal
* At 4.15% - 4.25% per annum and from June 2010 onwards at MLR
** At MLR minus an agreed margin
1 1,500,000,000 - 675,000,000 Baht 25.00 million *
2 845,000,000 - 305,320,000 Baht 15.52 million **
Total - 980,320,000
Less: Current portion - (486,240,000)
Long-term loans - net of current portion - 494,080,000
79
20. Long-term loans
Details of the Company’s long-term loans are as follows:
1) The Company had pledged its assets and leasehold rights to secure loans (facility #1) (Note 13 and 15).
2) On 8 June 2007, the Company entered into a Baht 2,000 million loan agreement with a commercial bank (facility #2).
The loans would be repaid within 78 monthly installments of not less than Baht 33 million each, and were subject to
interest at the MLR minus the agreed margin. The loans were secured by a negative pledge over some of the Company’s
assets and certain leasehold rights.
On 28 July 2008, the Company and the bank jointly amended the loan agreement to decrease the facility from Baht
2,000 million to Baht 845 million. On 5 February 2009, the Company and the bank jointly amended certain conditions
of use of loan facilities, including the term of repayment. The term of loan repayment had been changed from monthly
payment in the amount of not less than Baht 33.00 million, within 61 months to monthly payment in the amount of not
less than Baht 15.52 million, within 48 months. In September 2009, the Company had utilised the long-term loan facility in full.
3) The Company had to comply with certain covenants stipulated in the loan agreements such as the maintenance of
debt to equity ratio.
In 2010, the Company repaid the loan principals of facility # 1 and facility # 2 in full and released the assets pledged
against these loans.
Paid-up
share capital
(Thousand Baht)
Premium on
ordinary shares
(Thousand Baht)
Number of
ordinary shares
(Thousand shares)
ESOP-W3
- The fi rst quarter 259,650 508,133 1.000 508,133
- The second quarter 9,480 18,551 1.000 18,551
ESOP-W4
- The fi rst quarter 2,265,025 4,376,019 2.059 9,010,391
- The second quarter 7,107,309 13,830,789 2.044 28,270,176
- The third quarter 3,010,695 5,858,788 2.044 11,975,386
- The fourth quarter 1,346,244 3,057,310 1.752 5,356,419
Total 13,998,403 27,649,590 55,139,056
2010Warrants
(Unit)
Exercise price
(Baht/share)
Ordinary shares
(Shares)
Amount
(Baht)
On 19 August 2010, the Meeting of the Board of Directors of the Company approved the following resolutions which were
proposed to the Extraordinary General Meeting of the shareholders for approval on 4 October 2010:
1. The following allocations of the Company’s retained earnings and interim dividend payment:
- Allocation of 5% of net income of January 2010 through June 2010, amounting to Baht 35.20 million, to the
statutory reserve.
- Payment of a stock dividend not exceeding 622.64 million shares with a par value of Baht 1.00 each, or a total of Baht
622.64 million, to the Company’s shareholders. The rate of payment is 1 dividend share for every 6 existing shares, or
Baht 0.1667 per share. Any existing shareholdings, after such allocation, with less than 10 shares are to receive a cash
dividend of Baht 0.1667 per share.
80
21. Share capital
As discussed in Note 22, in 2010, the holders of the warrants of the Company exercised the warrants as follows:
As discussed in the above matter, the number of ordinary shares, the paid-up share capital and premium on ordinary shares
are increased as follows:
Registered share capital
At the beginning of the year 3,794,213.9
Increase in registered share capital to support the payment
of a stock dividend and exercising of the rights of the warrants 632,391.6
At the end of the year 4,426,605.5
Issued and paid-up share capital
At the beginning of the year 3,703,926.2 3,703,926.2 594,317.4
Increase in capital from exercising of the rights of the warrants 27,649.6 27,649.6 27,489.5
Increase in capital from a payment of stock dividend 621,416.1 621,416.1 -
At the end of the year 4,352,991.9 4,352,991.9 621,806.9
ESOP-W3 Baht 1.00 1.007 ordinary shares
Type of warrant Exercise price per share Exercise ratio per 1 warrant
Issue toType of
warrant
Issuance date
of warrant
Number of
warrants issued
(Units)
Period of
warrant
Exercise price
per share
Exercise ratio
per 1 warrant
ESOP-W3 Directors and employees
of the Company 2 April 2007 15,000,000 3 years Baht 1.00 1 ordinary shares
ESOP-W4 Directors and employees
of the Company and 23 May 2008 50,000,000 5 years Baht 3.98 1 ordinary shares
its subsidiary
81
- Payment of a cash dividend of Baht 0.0193 per share, or not exceeding a total of Baht 72.10 million.
The total dividend was to be paid at a rate of Baht 0.186 per share within 29 October 2010.
2. Approval of the cancellation of the allocation of the ordinary shares from the exercise of the warrants allotted to employees
of the Company (ESOP-W3) for which the exercise rights expired in April 2010 and reallocation of the remaining ordinary
shares to be reserved for adjusting the rights of the warrants allotted to employees of the Company (ESOP-W4).
3. Approval of a Baht 632.39 million increase in registered capital, from Baht 3,794.21 million to Baht 4,426.61 million,
by issuing an additional 632.39 million ordinary shares with a par value of Baht 1.00 each. The meeting approved the
following allocations of the shares:
- 622.64 million shares allocated to support the payment of a stock dividend.
- 9.75 million shares reserved for the exercise of the warrants allotted to employees of the Company (ESOP-W4),
of which the conversion rights will be adjusted when the stock dividend is paid.
In October 2010, the Company paid a cash dividend of Baht 71.96 million and allocated 621.42 million ordinary shares
for stock dividend payment. It registered the increase in its paid-up share capital to Baht 4,349.94 million with the Ministry of
Commerce on 21 October 2010. In addition, the Company fi led an application with the Stock Exchange of Thailand (SET) to register
the additional 621.42 million shares as listed securities. The SET approved the trading of the additional shares through the stock
market to be effective from 28 October 2010. The Board of Directors is to consider and propose to the next shareholders’ meeting
the allocation of the remaining shares from the above stock dividend payment.
As of the date of the fi nancial statements, the Company has recorded the Baht 621.42 million stock dividends paid,
at its par value, as issued and paid-up share capital under the caption of shareholders’ equity.
The Company registered the increase in its paid-up share capital to Baht 4,352.99 million with the Ministry of commerce
on 8 December 2010.
22. Warrants
Details of the warrants of the Company which were issued without charge, are as follows: -
During 2008, the Company had issued ESOP-W4 to the Company’s and subsidiary’s employees. The issue of ESOP-W4 has
affected the exercise of ESOP-W3 as follows:
ESOP-W3 580,931 (269,130) (311,801) -
ESOP-W4 36,148,625 (13,729,273) - 22,419,352
Number of warrantsoutstanding as at
31 December 2009
Number of warrantsoutstanding as at
31 December 2010
Number ofwarrants exercised
during the year
Number ofwarrants expiredduring the year
(Unit : Unit)
Type of warrant
ESOP-W4 Baht 2.044 1.946 ordinary shares
Type of warrant Exercise price per share Exercise ratio per 1 warrant
ESOP-W4 Baht 1.752 2.271 ordinary shares
Type of warrant Exercise price per share Exercise ratio per 1 warrant
Type of warrant Exercise price per share Exercise ratio per 1 warrant
ESOP-W3 Baht 1.000 1.030 ordinary shares
ESOP-W4 Baht 3.912 1.017 ordinary shares
Type of warrant Exercise price per share Exercise ratio per 1 warrant
ESOP-W3 Baht 1.000 1.957 ordinary shares
ESOP-W4 Baht 2.059 1.932 ordinary shares
82
According to the resolution of the Annual General Meeting of Shareholders dated on 8 April 2009, that approve the Company
to pay dividend at the rate of more than 55% of net income after income tax in 2008. As a result, the Company had to adjust the
exercise price and exercise ratio the warrants allotted to employees of the Company (ESOP-W3 and ESOP-W4) in accordance
with the prospectus for the offering of warrants as detailed of follows:
The adjusted exercise prices and exercise ratios of ESOP-W3 and ESOP-W4 were effective from 16 April 2009.
According to the resolution of the Extraordinary General Meeting of the shareholders of the Company dated 29 September
2009, that approve the Company to pay the interim dividend to the shareholders in the amount of 1,752.0 million ordinary
shares. As a result, the Company needs to adjust the right of the warrants allotted to the employees of the Company (ESOP-W3
and ESOP-W4) in accordance with the prospectus for the offering of warrants in respect of the condition to adjust the right
of warrants and the changes in prices.
The adjusted exercise prices and exercise ratios of ESOP-W3 and ESOP-W4 were effective from 12 October 2009.
According to the resolution of the Annual General Meeting of Shareholders dated on 7 April 2010, that approve the
Company to pay dividend at the rate of more than 55% of net income after income tax in 2009. As a result, the Company had to
adjust the exercise price and exercise ratio of the warrants allotted to employees of the Company (ESOP-W4) in accordance
with the prospectus for the offering of warrants as detailed below.
The adjusted exercise prices and exercise ratios of ESOP-W4 were effective from 12 April 2010.
According to the resolution of the Extraordinary General Meeting of the shareholders of the Company dated 4 October 2010,
that approve the Company to pay an interim stock dividend to the shareholders of a total of not more than 622.64 million ordinary
shares. As a result, the Company needs to adjust the rights of the warrants allotted to the employees of the Company (ESOP-W4)
in accordance with the condition in the prospectus for the offering of warrants to adjust the rights of warrants and changes in prices.
The adjusted exercise prices and exercise ratios of ESOP-W4 are effective from 12 October 2010.
During 2010, the movements of warrants of the Company are as follows:
Basic earnings per share
Net income attributable to equity holders
of the parent 1,638,429,270 1,130,878,380 4,339,764,479 4,313,635,897 0.38 0.26
Effect of dilutive potential ordinary shares - - 48,535,285 48,733,170
Diluted earnings per share
Net income of ordinary shareholders
assuming the conversion of warrants
to ordinary shares 1,638,429,270 1,130,878,380 4,388,299,764 4,362,369,067 0.37 0.26
Consolidated fi nancial statements
Weighted average number of
ordinary shares (shares)Net income (Baht)
2010 2010 20102009(Restated)
2009(Restated)
2009(Restated)
Earnings
per share (Baht)
(Unit : Million Baht)
2010
Consolidated fi nancial statements Separate fi nancial statements
20102009 2009
Employee remuneration 1,786 1,437 1,786 1,437
Premises expenses 918 820 918 820
Depreciation and amortisation 860 805 856 800
Sales promotion and operation support expenses 974 784 946 758
Financial costs 103 114 105 114
Tax expenses 727 558 722 557
Changes in fi nished goods (917) (265) (917) (265)
83
23. Statutory reserve
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to a statutory
reserve at least 5 percent of its net income, until the reserve reaches 10 percent of the registered capital. The statutory reserve is
not available for dividend distribution.
24. Expenses by nature
Signifi cant expenses by nature are as follows:
25. Earnings per share
Basic earnings per share is calculated by dividing the net income for the year by the weighted average number of ordinary
shares in issue during the year, after adjusting the number of ordinary shares in proportion to the change in the number of shares
as a result of the increase in share capital arising from the issue of a stock dividend of 621.42 million shares on 21 October 2010,
as discussed in Note 21. The number of ordinary shares of the prior year has been adjusted as if the stock dividend had been
issued at the beginning of the earliest period reported.
Diluted earnings per share is calculated by dividing net income for the year by the weighted average number of ordinary shares
in issue during the year, after adjusting the number of ordinary shares in proportion to the change in the number of shares as a result
of the increase in share capital arising from the issue of a stock dividend, as discussed in the above paragraph, plus the weighted
average number of ordinary shares that would need to be issued to convert all dilutive potential ordinary shares into ordinary shares.
The calculation assumes that the conversion took place either at the beginning of the year or on the date the potential ordinary
shares were issued.
The following table sets forth the computation of basic and diluted earnings per share:
Seperate fi nancial statements
Weighted average number of
ordinary shares (shares)Net income (Baht)
Earnings
per share (Baht)
2010 2010 20102009(Restated)
2009(Restated)
2009(Restated)
84
Basic earnings per share
Net income attributable to equity holders
of the parent 1,627,211,784 1,126,215,560 4,339,764,479 4,313,635,897 0.37 0.26
Effect of dilutive potential ordinary shares - - 48,535,285 48,733,170
Diluted earnings per share
Net income of ordinary shareholders
assuming the conversion of warrants
to ordinary shares 1,627,211,784 1,126,215,560 4,388,299,764 4,362,369,067 0.37 0.26
26. Financial information by segment
The majority of the operations of the Company and subsidiary involve the business segments of trading of a complete range
of goods and materials for construction, addition, refurbishment and renovation of buildings and residences, and provision of
related services, together with space rental (as having revenue and assets less than 10 percent of total revenue and total assets
of all segments) and are carried on in a single geographic area, Thailand. As a result, all revenues, operating profi ts and assets as
refl ected in these fi nancial statements pertain to the aforementioned trading industry and geographic area.
27. Provident fund
The Company and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E.
2530. Both employees and the Company contributed to the fund monthly at the rate of 3 - 5 percent of basic salary. The fund,
which is managed by American International Assurance Co., Ltd., will be paid to employees upon termination in accordance with
the fund rules. During the year 2010, the Company contributed Baht 34.25 million (2009: Baht 30.24 million) to the fund.
28. Dividend paid
Approved byTotal
dividends
(Million Baht)
Dividend
per share
(Baht)
Paid on
Interim stock dividend
for 2010
Interim dividend for 2010
Final dividend for 2009
Interim stock dividend
for 2009
Interim dividend for 2009
Final dividend for 2008
Meeting of the Board of Directors on 19 August 2010 and
Extraordinary General Meeting of the shareholders on
4 October 2010
Meeting of the Board of Directors on 19 August 2010 and
Extraordinary General Meeting of the shareholders on
4 October 2010
Annual General Meeting of the shareholders on 7 April 2010
Extraordinary General Meeting of the shareholders on
29 September 2009
Extraordinary General Meeting of the shareholders on
29 September 2009
Annual General Meeting of the shareholders on 8 April 2009
29 October 2010
29 October 2010
30 April 2010
27 October 2009
27 October 2009
28 April 2009
0.1667
0.0193
0.1600
0.9000
0.1000
0.3500
621.42
71.96
593.32
1,752.01
194.67
676.78
Payable within:
1 year 48.01
2 to 5 years 221.92
Thereafter 1,144.35
1,414.28
Million Baht
Payable within:
1 year 84.67
2 to 5 years 363.70
Thereafter 1,236.38
1,684.75
Million Baht
30.2 Long-term lease agreements - as leaser
The Company has entered into seven agreements with two companies to lease and sub-lease parts of premises in 5
branches for periods of 29-30 years, with a total of rental received in advance amounting to Baht 640.0 million. The
terms of the agreements are until 2033 - 2036. The Company recognises this income systematically on a straight-line
basis over the useful lives of the leaseholds.
The outstanding balance of rental received in advance, net of recognised rental income, as of 31 December 2010
was Baht 521.2 million (2009: Baht 556.4 million).
85
29. Commitments and contingent liabilities
29.1 As at 31 December 2010 and 2009, the Company had commitments totaling Baht 89.16 million and Baht 66.65 million,
respectively, to commercial banks in respect of guarantees provided for leasing, purchases of goods or hire of work, as
bonds with State Enterprise.
29.2 As at 31 December 2010, the Company had commitments under letters of credit opened with two commercial banks,
amounting to USD 3.99 million (2009: USD 3.53 million).
30. Commitments under long-term lease agreements
30.1 Long-term lease agreements - as lessee
a) The Company has entered into 16 land lease agreements. The terms of the agreements are generally between 24 to
30 years and they are non cancelable, except with the consent of the counterparties.
As at 31 December 2010, future minimum lease payments required under these operating leases contracts were
as follows:
b) The Company has entered into 17 lease agreements to lease commercial space. The terms of the agreements are
generally between 17 to 30 years and they are not cancelable, except with the consent of the counterparties.
As at 31 December 2010, future minimum lease payments required under these operating leases contracts were
as follows:
Financial assets
Cash and cash equivalents 1,195,000,000 - 34,843,680 187,401,431 1,417,245,111 0.25 - 1.60
Financial liabilities
Debentures 730,000,000 2,000,000,000 - - 2,730,000,000 3.00 - 5.50
Consolidated fi nancial statements
Fixed interest rates
Within 1 year Over 1-5 years
Floatinginterest rate
(Baht)
Interest rate(% p.a.)
Non- interestbearing Total
Separate fi nancial statements
Fixed interest rates
Within 1 year Over 1-5 years
Floatinginterest rate
(Baht)
Interest rate(% p.a.)
Non- interestbearing Total
Financial assets
Cash and cash equivalents 1,195,000,000 - 10,075,107 186,669,033 1,391,744,140 0.25 - 1.60
Financial liabilities
Short-term loans from
related party 85,000,000 - - - 85,000,000 1.50 - 1.85
Debentures 730,000,000 2,000,000,000 - - 2,730,000,000 3.00 - 5.50
815,000,000 2,000,000,000 - - 2,815,000,000
86
31. Financial instruments
31.1 Financial risk management
The Company’s fi nancial instruments, as defi ned under Thai Accounting Standard No. 107 “Financial Instruments:
Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts receivable and other
receivables, trade accounts payable and other payables, short-term loans and debentures. The fi nancial risks associated
with these fi nancial instruments and how they are managed is described below.
Credit risk
The Company is exposed to credit risk primarily with respect to trade accounts receivable and other receivable.
The Company manages the risk by adopting appropriate credit control policies and procedures and therefore does not
expect to incur material fi nancial losses. In addition, the Company does not have high concentrations, of credit risk since it
has a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of trade accounts
receivable and others receivable as stated in the balance sheet.
Interest rate risk
The Company’s exposure to interest rate risk relates primarily to its deposits with fi nancial institutions, short-term
loans and debentures. However, since the Company’s fi nancial assets and some of its fi nancial liabilities bear fl oating
interest rates and some of financial liabilities bear fixed interest rates which are close to the market rate,
the interest rate risk is expected to be minimal.
Signifi cant fi nancial assets and liabilities as at 31 December 2010, classifi ed by type of interest rate, are summarised
in the table below, with those financial assets and liabilities that carry fixed interest rates further classified based on
the maturity date, or the repricing date if this occurs before the maturity date.
USD 488,141 30.2963
Foreign currency Financial liabilities (Dollar)Average exchange rate as at 31 December 2010
(Baht per dollar)
87
Foreign currency risk
The Company’s exposure to foreign currency risk arises mainly from good purchase transactions that are denominated
in foreign currencies. The Company has not entered into forward exchange contracts to hedge this risk.
The balances of fi nancial liabilities denominated in foreign currencies as at 31 December 2010 are summarised below.
31.2 Fair values of fi nancial instruments
Since some of the Company’s fi nancial assets and liabilities are short-term in nature and debentures bear
interest at rates close to market rate, their fair value is not expected to be materially different from the amounts
presented in the balance sheets.
A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable,
willing parties in an arm’s length transaction. The fair value is determined by reference to the market price of the fi nancial
instrument or by using an appropriate valuation technique, depending on the nature of the instrument.
32. Capital management
The primary objective of the Company’s capital management is to ensure that it has an appropriate fi nancial structure
and preserves the ability to continue its business as a going concern.
The Company manages its capital position with reference to its debt-to-equity ratio in order to comply with a condition
in the stipulations of debentures, which requires the Company to maintain a debt-to-equity ratio of not more than 1.75:1.
No changes were made in the objectives, policies or processes during the years end 31 December 2010 and 2009.
33. Subsequent event
On 16 February 2011, the Meeting of the Board of Directors of the Company approved the dividend payment from
operating results of July 2010 to December 2010 as follows.
- Payment of a stock dividend to the Company’s shareholders. The rate of payment is 1 dividend share for every
6 existing shares, or Baht 0.1667 per share.
- Payment of a cash dividend of Baht 0.0193 per share.
The total dividend is to be paid at a rate of Baht 0.186 per share within 29 April 2011.
However, the Company’s Board of Directors’ meeting, held on 19 August 2010, approved the resolution to pay interim
dividend to the shareholders as stock dividend of Baht 0.1667 per share and cash dividend of Baht 0.0193 per share. This
was proposed to the Extraordinary General Meeting of the shareholders and approved on 4 October 2010. The dividend was
paid on 29 October 2010. Such interim dividend per share after adjusting the issuance of interim stock dividend would be
Baht 0.1594 per share.
As a result, total dividend per share for the year 2010 is Baht 0.3454 per share.
The above dividend payment will be proposed to the Annual General Meeting of the Company’s shareholders for approval.
(Unit : Baht)
Consolidated fi nancial statements
As reclassifi ed As previously reported
Trade accounts receivable - net 144,584,882 128,785,030
Other receivables - net 347,794,276 356,794,276
Accrued expenses 422,114,603 365,409,521
Advances received from customers 430,697,315 423,897,463
Other current liabilities 165,356,564 222,061,646
(Unit : Baht)
Separate fi nancial statements
As reclassifi ed As previously reported
Trade accounts receivable - net 139,866,504 124,066,652
Other receivables - net 350,048,810 359,048,810
Accrued expenses 404,673,798 347,968,716
Advances received from customers 430,697,315 423,897,463
Other current liabilities 163,453,254 220,158,336
88
34. Reclassifi cation
Certain amounts in the fi nancial statements for the year ended 31 December 2009 have been reclassifi ed to conform
to the current year’s classifi cation but with no effect to previously reported net income or shareholders’ equity except for
the effect of the change in accounting policy discussed in Note 6. The reclassifi cations are as follows:
35. Approval of fi nancial statements
These fi nancial statements were authorised for issue by the Company’s Board of Directors on 16 February 2011.
HomePro is the leading home improvement retailer in Thailand.
We operate 40 stores nationwide, providing product
range cover 60,000 items with complete services
as One Stop Shopping to attain
highest customer satisfaction.
2010 retail sales increased
by 18.4% to
Baht 24,073 million.
NPAT increased
by 44.9% to
Baht 1,638 million.
Total assets increased
from investment in
property of 5 new stores.
Lumlukka, Sukhaphiban 3,
Nakhonpathom,
Nakhonratchasima and
Nakhonsitammarat
Board of Directors
Mr. Anant Asavabhokhin
Chairman
Mr. Pong Sarasin
Independent Director
Mr. Rutt Phanijphand
Director, Executive Director and Chairman of the Nomination and Remuneration Committee
Mr. Manit Udomkunnatum
Director and Chairmanof Executive Directors
Mr. Naporn Soonthornchitcharoen
Director and Executive Director
Mr. Apilas Osatananda
Independent Director andChairman of the Audit Committee
Mr. Thaveevat Tatiyamaneekul
Independent Director and Audit Committee
Mr. Joompol Meesuk
Director
Mrs. Suwanna Buddhaprasart
Director
Mr. Chanin Roonsamrarn
Independent Director,Audit Committee and Nomination and Remuneration Committee
Mr. Apichat Natasilpa
Director and Nomination and Remuneration Committee
Mr. Khunawut Thumpomkul
Director, Executive Directorand Managing Director
20092007 2008 2010
15,944
30
3335
40
20092007 2008 2010 20092007 2008 2010 20092007 2008 2010
Mr. Rutt Phanijphand
Director, Executive Director and Chairman of
of Executive Directors
Mr. Thaveevat Tatiyamaneekul
Independent Director
+18.4%Sales Total Assets New
+44.9%Net Profit
+2,718MB 5 Branches
Mr. Chanin Roonsamrarn
Independent Director,depe de t ecto ,Audit Committee ud t Co tteeand Nomination and Remuneration Committee
the Nomination and Remuneration Committee Chairman of the Audit Committee
Mr. Apichat Natasilpa
Director and Nomination andDirector and Nomination and Remuneration Committee
Mr. Khunawut Thumpomkul
Director Executive DirectorDirector, Executive Directorand Managing Director
and Audit Committee
18,540
20,329
24,073
959
710
1,131
1,638
12,27413,369
13,873
16,592
Annual Report 2010
An
nual Rep
ort 2010
Home Product Center Plc.96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000 Telephone (66) 02-832-1000 Fax (66) 02-832-1400
Movin
g forw
ard to Service Excellen
ce
www.homepro.co.th
Shop.homepro.co.th
Loving home by homepro
Moving forward to Service Excellence
Greater Bangkok : Rangsit 02-958-5699 North : East : Chaengwatthana 02-962-6955 Ratchadaphisek 02-641-2900 Chiangmai 053-85-1229 Chonburi 038-78-5111 Ekamai-Ramindra 02-933-5000 Ratchapruk 02-423-3222 Chiangmai-Hangdong 053-44-7939 Pattaya 038-36-0422 Fashion Island 02-947-6365 Rattanathibet 02-921-2400 Phitsanulok 055-28-9009 Rayong 038-80-9333 Future Mart 02-689-0844 Seri Center 02-746-0377 South : Latphrao 02-983-7444 Sukhaphiban 3 02-976-9114 North-East : Had Yai 074-46-9055 Lumlukka 02-997-4800 Suvarnabhumi (Bangna) 02-325-1200 Khao Yai 044-32-8799 Krabi 075-81-0499 Petchkasem 02-444-4699 The Mall Bangkae 02-454-9299 Khonkaen 043-36-5365 Nakhonsitammarat 075-32-4740 Ploenchit 02-655-3400 Central : Nakhonratchasima Phuket 076-25-5189 Prachachuen 02-955-5888 Ayutthaya 035-23-6655 (Bypass 2) 044-28-2550 Phuket-Chalong 076-60-2399 Rama II 02-895-6555 Hua Hin 032-52-6000 The Mall Korat 044-28-8345 Samui 077-23-1900 Ramkhamhaeng 02-735-4999 Nakhonpathom 034-21-3200 Udonthani 042-30-9000 uratthani 077-48-9199