HEMRAJ : Annual Report 2001

ANNUAL REPORT 2001HEMARAJ LAND AND DEVELOPMENT

Plublic Company Limited1



2001 Summary

Million Baht

Sales and Service Income

Total Revenue

Net Income

Total Assets

Total Liabilities

Shareholders’ Equity

Earning Per Share (Baht)

Financial Ratio

Year

Current Ratio

Net Debt to Equity

Return on Total Assets (%)

Return on Equity (%)

Net Profitability Ratio (%)

Book Value per Share (Baht)





Message from the Board of Directors

Hemaraj Land And Development Public Company Limited financial and

operating results reflect slightly improving economic conditions in Thailand.

For 2001, Hemaraj reported a Net Loss of Baht 493 million, or a loss

of Baht 6.97 per share, on Total Revenue of Baht 1,258 million. The Net

Loss was substantially due to foreign exchange, the provision of legal

reserves, and a high level of interest in comparison to the revenue.

The overall Thailand industrial property market in 2001 increased

modestly. The Hemaraj performance was disappointing as sales of 261

Rai from 22 new customers were primarily from Eastern Seaboard

Industrial Estate and the automotive industry. Petrochemical investment

remains dormant.

The economic conditions continue to constrain the company’s ability

to generate cash flow consistent with the maturity of a high level of debt

obligations. Thus many of the debt obligations are under restructuring.

We were successful in the subscription of a rights issue after the close of

the year, raising Baht 283 million in limited new capital in January of 2002.

The strategy of infrastructure development is to generate recurring and

complementary income enhancing and balancing the cyclical nature of

our industrial estate development. Over time these will provide a more

predictable revenue stream.

With deep regret, our Vice-Chairman colleague and friend Khun Prateep

Trilohaka passed away after an illness in March of 2002. His leadership will

continue to invigorate and inspire us. Our thoughts are with his family.

The support of our shareholders, management, employees, customers,

creditors, and business partners remain encouraging. I would like to

express our appreciation on behalf of the Board of Directors.

Respectfully submitted,

(David R. Nardone)President & Chief Executive Officer

28 March 2002

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EconomicChartsSource : Bank of Thailand, NESDB





Economic & Competitive Conditions

In 2001, the Thailand economy was continuously impacted by theslowdown of global economies, particularly of the country’s trading partnerssuch as US, EU, and Japan, which resulted in the declines in level of FDI andexport growth. The terrorist attack has further dampened the US economyas well as increased the global worries.

For 2001, the GDP growth index was projected to rise by 1.5 to 1.6percent from the previous year. Manufacturing production growth rose by only1.3 percent with capacity utilization at 54 percent. Many industries especiallyelectronics and computer were directly affected by the slowdown of globaldemand. However, automobile, auto parts, and agricultural product showedan increase in production from the previous year. The Private ConsumptionIndex increased 3.4 percent from a year earlier. Exports in dollar termsdecreased by (6.9) percent. However, imports also decreased by (2.8)percent from the 2000 level. The inflation rate remains stable and low at 1.6percent for the year.

The Board of Investment (BOI) project approvals were 820 projectsapproved representing an investment value of Baht 266 billion in 2001, aslight declined of 4.2% from the previous year. Sales in Thailand of IndustrialLand (source CB Richard Ellis) are estimated at 2,264 rai for 2001, a 50 percentincrease from the previous year.

The automotive market, initially dependant on domestic sales of 590,000vehicles in 1996 dropping to the low of domestic sales of 144,000 vehiclesin 1998, is now stronger and more balanced. In 2001, the modest recoverycontinued with domestic sales of 297,000 vehicles along with 180,000vehicle exports.

The economic prospects for Thailand remain promising with agriculture,electronics, automotive, and tourism generating considerable foreign currencyearnings. The new government’s fiscal and monetary measures of deficitspending such as Village Fund Project, temporary debt moratorium forfarmers, the People’s Bank Project, and the Universal Health Care Schemehave played the major roles to stimulate the domestic consumption.





Nature of Business

Industrial Estate FocusHemaraj has concentrated on the industrial estate development in the Eastern Seaboard Region since the

beginning of the Eastern Seaboard Development Program. The Eastern Seaboard Area has a concentrated infrastructuredevelopment to support the investors with the petrochemical complex, liquid and bulk ports, new highways, deep seacontainer ports, electricity substations & generations, water supply, communications, international airports, anduniversities, schools and communities, etc.

Hemaraj’s three industrial estates have been developed to support the industrial development namely; ChonburiIndustrial Estate (Bo Win), Eastern Industrial Estate (Map Ta Phut) and Eastern Seaboard Industrial Estate (Rayong).All three industrial estates are jointly managed with the Industrial Estate Authority of Thailand and receive promotionprivileges from the Office of the Board of Investment in the total area of 6,000 acres (15,000 rai).

The infrastructure development of each industrial estate is supporting to the various types of industry. Hemarajprovides and manages the infrastructure on site such as waste water treatment, water supply, in some caseselectricity, communications, as well as services of steam, demineralized water, facilities and maintenance services, andsupporting mini and micro factories for small and medium enterprises (SMEs). All services enhance the customersachieving the lowest long-term cost of ownership.

In 2001, the company’ s environmental achievements continued. The Chonburi Industrial Estate was the recipientof the Best Environmental Management, EIA Award by the Minister of Science Technology and Environment.The Eastern Seaboard Industrial Estate was the recipient of the Best Environmental Management, EIA Award in 1998and 2000. The Eastern Industrial Estate was also the recipient of the EIA Award in 2000. The three industrial estateswere awarded the ISO 14001 Certification by BVQI. These will further enhance the efficiency of Hemaraj’s for thebeneficiary of customers and communities.

Chonburi Industrial Estate (Bo Win) is designed for the steel mills, auto parts, electronics, building materialsand general industries. There is an export processing zone for export-oriented industry and ready build factoryMini factories. The project area is 4,905 Rai with Phase I and II completed, Phase III is under limited development.

Eastern Industrial Estate (Map Ta Phut) is located in the Map Ta Phut Petrochemical Complex and designedfor customers mainly from steel, petrochemical, and chemical industries. The infrastructure is designed to serve heavyindustries requiring a high water, wastewater, and power capabilities including optional utility services such as steam,private power, and demineralized water. Glow Co.,Ltd subsidiary co-generation power plant (Industrial Power) anda de-mineralized water plant (Industrial Water) are on site. The provision of a pipe rack distribution network is availablethrough subsidiary Eastern Pipeline Services.

Eastern Seaboard Industrial Estate (Rayong), a 60/40 joint venture with Siam Food Products PLC,development started in 1995 for automotive and auto parts, building materials, metal processing, consumer goods,electronics, and medium industries. The area of 6,992 Rai is located in Pluak Daeng, Rayong in close proximity to theChonburi coastal infrastructure, container port, and human and recreational resources.

The Eastern Seaboard Industrial Estate (Rayong) has become one of the most integrated automotive industrialestates in the world and dubbed the ‘‘ Detroit of the East ’’. ESIE is home to AutoAlliance (Ford & Mazda Joint Venture),General Motors, along with 6 Toyota group and over 55 automotive related companies to date including glass, plastics,metal processing, steel service centers, forging, chemical and other related activities. This is the heart of integratedautomotive suppliers in Thailand.





InfrastructureGLOW Company Limited (formerly known as H-Power) was formed in 1997 by Hemaraj for the purpose

of investing in power projects within the context of the privatization of power to the Electricity Generating Authorityof Thailand (EGAT). In September of 1997, Hemaraj partnered equally H-Power with Tractebel S.A., the Belgianelectricity and gas utility. In the first quarter of 2000, Hemaraj reduced its stake in H-Power in order to fund the BowinPower IPP project, with Tractebel subsequently holding 75.001% and Hemaraj 24.999%. H-Power’s registeredcapital is Baht 1,330 million.

Established since November 1994, the GLOW subsidiary Industrial Power Company (IP) project is a gas firedco-generation power plant designed to generate a capacity of 124.4 MW (net electricity) and 100 tons per hour ofsteam segregated into two phases. IP’s facility provides 110 MW of electricity to EGAT under the Small PowerProducer (SPP) program and both electricity, steam, and demineralized water to industrial customers. The plant islocated in Hemaraj’s Eastern Industrial Estate, with a total investment of Baht 4,500 million.

Bowin Power Company Limited, GLOW subsidiary, is developing a 713 MW natural gas-fired Alstromcombined cycle power plant under EGAT’s Independent Power Producers (IPP) program. Bowin Power is located inHemaraj’s Chonburi Industrial Estate. Bowin Power signed a 25 year Power Purchase Agreement (PPA) with EGATand a 25 year Gas Supply Agreement (GSA) with the Petroleum Authority of Thailand (PTT) in 1997. The commercialoperation date in supplying power to the EGAT is scheduled to the end of 2002. The project cost is approximately USD390 million with project finance completed on July 14, 2001. The IPP projects were included by EGAT inthe indexing of the power capacity tariff to 90% of the fluctuations of the U.S. Dollar after the Baht floatationin July 1997.

Elyo-H Facilities Management Limited is the joint venture company of Hemaraj, Elyo group of France(a Tractebel subsidiary and part of the worldwide Suez group) and Teo Hong Silom Group (a well known group ofsupplier/ engineering contractor). Elyo-H FM was registered in July 2000 at Eastern Seaboard Industrial Estate (Rayong).Elyo-H FM was established to serve manufacturer’s need for outsourcing Facilities Management Maintenance andutility management services.

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Shareholding Structure & Management

Top Ten Hemaraj Land And Development’s Shareholders as at 28 December, 2001 (The closing date of share register book)

Sun Tech Group Public Company Limited

Mr. Thongchai Srisomburananonta

Mr. Sawasdi Horrungruang

Mr. Sumrit Eahchotipanij

Miss Nuchanart Horrungruang

Gamma Capital Fund

Asset Management Corporation

Thailand Securities Depository Co., Ltd. (Local)

Mr. Thavorn Anankusri

Mr. Apichad Ngoenyoo

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Board of Directors

1. Mr. Sawasdi Horrungruang Chairman of the Board of Director 6. Mr. David Richard Nardone Director

2. Mr. Thongchai Srisomburananonta Director 7. Mr. Peter John Edmondson Independent Director

3. Mr. Thavorn Anankusri Director 8. Mrs. Punnee Worawuthichongsathit Independent Director

4. Mr. Prateep Trilohaka Director 9. Mr. Vivat Jiratikarnsakul Director

5. Mr. Sudhipan Charumani Independent Director

- The Board of Directors has the authority and duty to manage the Company in accordance with the laws, objects and Articles of Association,

including the resolutions of the shareholders’ meeting.

The Audit Committee

1. Mr. Sudhipan Charumani Chairman of the Audit Committee 2. Mr. Peter John Edmondson Member

3. Mrs. Punnee Worawuthichongsathit Member

- The Audit Committee of the Company has the scope of duties and responsibilities, and shall report to the Company’s board of directors as follows:

1. to conduct a review so that the Company has correct and sufficient financial reports;

2. to conduct a review so that the Company has appropriate an efficient internal control and internal audit;

3. to conduct a review so that the Company compiles with the law concerning securities and exchange, the regulations of the Stock

Exchange or the laws relating to the Company’s business;

4. to consider, select and nominate the Company’s auditor and to propose his professional fees;

5. to consider the disclosure information of the Company in case where there is a connected party transaction which may have a

conflict of interest in a correct and complete manner;

6. to prepare business review of the audit committee to be disclosed in the Company’s annual report including providing opinions

concerning the preparation and disclosure information process in a financial report and opinions about the Company’s internal

control system. The report shall be signed by a Chairman of the audit committee;

7. to report the audit committee’s operation to the Company’s Board of Directors at least on quarterly basis;

8. to co-ordinate providing opinions for consideration of the appointment and removal, work performance and professional fees of an internal auditor; and

9. to perform any other acts as may be assigned by the Company’s Board of Directors with the approval of the audit committee.

The Executive Committee

1. Mr. Sawasdi Horrungruang Chairman of the Board of Director 4. Mr. Prateep Trilohaka Vice Chairman of the Board

2. Mr. Thongchai Srisomburananonta Vice Chairman of the Board 5. Mr. David Richard Nardone Executive Director

3. Mr. Thavorn Anankusri Vice Chairman of the Board 6. Mr. Vivat Jiratikarnsakul Executive Director

The Executive Directors shall have the duty as assigned by the Board of Directors to supervise the business of the Company.

The Management

1. Mr. David Richard Nardone President & Chief Executive Officer 5. Mr. Sirisak Kijraksa Deputy Director-Accounting

2. Mr. Vivat Jiratikarnsakul Executive Vice President 6. Ms. Somjai Wachiraha Deputy Director-Finance

3. Mr. Khamhoung Ratsamany Director - Industrial Estate Operations 7. Ms. Jinnapat Tongviseskul Manager- Marketing

4. Mr. Tanin Subboonrueng Director-Development 8. Mr. Paopitaya Smutrakalin Manager-Planning and information Systems

- The Management shall have the duty as assigned by the Managing Director to supervise the business of the Company.

Director and Management Selection Procedure

The procedure of selection for appointment as director shall be deliberated by the Board of Directors for the Shareholders’ Meeting approval. The

management selection is the responsibility of the President & CEO.

Directors’ Remuneration

Monetary remuneration

In 2001, the total remuneration for 9 directors was Baht 21,032,000.00.

In 2001, the total remuneration for 10 management was Baht 43,092,798.07

Business Supervision

The Company’s Board of Director has shown responsibility in compliance with the proper Code of Best Practice for Directors of List Companies in

accordance with the guidelines established by The Stock Exchange of Thailand for the confidence of shareholders, investors and other related

parties.

Insider Trading Controls

The Company informed all executives about the Notification of SET Concerning Rules, Procedures, and Disclosure of securities holdings. With

such rules, the Company will always be aware of the securities holdings of any executive.

Internal Controls

The Board of Directors believes that the current internal control and inspection of the Company and its subsidiaries are sufficient and appropriate.

The Company determines to continually develop our internal control and inspection.





Connected Transactions

Connected Transactions1. The approved connected transactions which have arisen during last year were the loans amount of Baht 95 million from various creditors

including related process of the directors of its subsidiaries. The said loans were used to fund Mini and Micro factory project with interest rate

TFB.MLR+1% and collateralized by industrial land parcels and some mini and micro factories.

2. The company approved the shareholder’s loan of Baht 30,000,000 to the subsidiary. The loan would bear interest at the rate of MLR plus one

percent payable on a monthly basis and the principal would be repayable in full within 18 months from the date on which the loan is given.

Risk Factors /

Hemaraj Land And Development PLC., a leading developer of industrial estates and infrastructure services, has developed the Chonburi Industrial Estate (Bo-Win),CIE, the Eastern Industrial Estate (Map Ta Phut), EIE, and the Eastern Seaboard Industrial Estate (Rayong), ESIE, to provide world leading industrialists with the higherstandard of products and services. The company has realized the importance of industrial services and aimed to be responsible for society and environment byimplementing the ISO 14001 as the environmental management policy together with the land development. The policy will be a governance of the utilities and infrastruc-ture management in order to prevent the environmental concern and whereby to fully utilize the natural resources.The company has determined to implement the environmental policy for 3 Industrial Estates as follows:

1. To strictly follow the environmental rules and regulations;2. To prevent and improve the utilities management to reduce pollution of waste water, air emission (CIE only), garbage, and chemical toxic which will damage to the environment.3. To continuously and constantly release the environmental policy and knowledge to the company’s employees and public;4. To continuously develop, review, and amend the environmental management;5. To co-operate with government and industrial entrepreneurs for preventing and controlling the pollution discharge such as waste water, dust and fumes

(CIE only), air emission (CIE and EIE only), odor (EIE only) and garbage in respect to the prevailing laws, including preparing the contingency plan; and6. To reduce energy loss or energy reservation.

Therefore, the company management will fully support on the implementation and operation of the working group to achieve the above goals.

Environmental Policy (ISO 14001) /

Risk FactorsRisk from Foreign Exchange

As of December 31, 2001, Hemaraj Land And Development Public Company Limited has USD nominated liabilities of USD 50.13 million.

The changes of foreign exchange between Baht and USD will directly effect to local currency book value of these debts.





Financial Results

The 2001 consolidated financial results continue to reflect the slow recovery of the Thailand economy as well as

the slowdown of the global economies.

Industrial land sales for 2001, being from the sale of 261 rai and 22 new customers, were Baht 569 million.

This represents an increase in sales of 63 % compared Baht 348 million in sales from 179 rai and 16 new customers

in 2000. Service Income from Utilities and Rental Income of Mini Factories increased to Baht 368 million in 2001,

reflecting an increase of 63 % compared to Baht 281 million in 2000.

Total Revenue in 2001 were Baht 1,258 million versus Baht 818 million in 2000, a 54% increase overall. The Net

Loss for 2001 was Baht (493) million, as compared to the 2000 Net Loss of Baht (852) million.

In 2001, the company realized a loss on foreign exchange of Baht 47 million and an increase in the provision for

a contingent liability by Baht 158 million, and a loss in an affiliated company, Glow Company Limited of Baht 303 million

mostly due to foreign exchange. In 2001, the company successfully restructured the joint management agreements

with IEAT, which resulted in a gain of Baht 222 million.

The consolidated Balance Sheet in 2001 is summarized as follows.

Total Assets in 2001 were Baht 6,129 million, a 8.4% decrease from Baht 6,689 million in 2000. Total Current

Assets in 2001 were Baht 2,927 million compared to Baht 2,949 million in 2000. Land held for Real Estate

development in 2001 were Baht 2,401 million, reduced from Baht 2,668 million due to the land sold.

Other Assets include Investments and Loans of Baht 456 million being primarily Baht 27 million for shares

in affiliate Glow Company Limited and Baht 401 million for a shareholder loan to Glow. Assets for Rent including

Minifactories and pipe rack were Baht 411 million. Land held for commercial purposes not under development were

Baht 1,757 million.

Total Liabilities in 2001 were Baht 4,952 million, a 2.7 % decrease from Baht 5,089 million in 2000.

Shareholders Equity in 2001 were Baht 665 million versus Baht 1,134 million in 2000.

The Extraordinary General Meeting of Shareholders No.1/2544 which being held on 28th December 2001

approved an increase of the registered capital from Baht 3,270 million to Baht 10,000 million, divided into 1,000 million

common shares. This included 283.163 million new shares reserved for the 4 to 1 Right Issues, 331.758 million

new shares included reserved for the adjustment of the exercise ratio of the warrants as a result of the Right Issues,

and 159.782 million new shares reserved for Private Placement.





Audit Committee,s Report

The Audit Committee of Hemaraj Land And Development PLC. was set upin accordance with the resolution of the Extraordinary General Meeting ofShareholders No. 1/1999.

At present, the Committee comprises three independent directors as follows:Mr. Sudhipan Charumani (Committee Chairman

and Independent Director)Mr. Peter J. Edmondson (Independent Director)Mrs. Punnee Worawuthichongsathit (Independent Director)

During the year 2001, the Committee continued to monitor the quarterlyfinancial statements of the Company, check compliance with relevant rules andregulations, review the effectiveness of internal controls and consider thedisclosure of information.

To accomplish these objectives, the Committee met quarterly and discussedinputs from Company management, the Company’s external auditors, external legaladvisers and internal auditors. An independent firm of accountants, reportingdirectly to both the Committee and the Management, commenced work asinternal auditors in March 2000, under an audit program covering the Companyand the local subsidiaries. During the year 2001, the internal audit work donecovered the review of the quarterly financial statements and various aspects of theCompany’s internal controls and systems, relating to both operational andaccounting issues. Particular emphasis was placed on the procedures for makingand receiving payments, and the handling control and transfer of legal and landtitle documents. The audit work did not reveal any significant error or systematicweakness, other than mistakes of a minor nature, although it is noted that approvalauthority is heavily vested in senior management.

The management letter prepared by the external auditors contained anumber of points relating to Company procedures and records. The letter hasbeen reviewed by the Management and the Audit Committee, and wherenecessary corrective actions are being taken. There is also an ongoing need thatthe Company’s junior staff attend periodic development courses to ensure a highstandard of professional competence. Additionally certain improvements havebeen made to the presentation of the financial statements with a view to providinggreater transparency, with full co-operation from Company management.

Apart from general accounting aspects, the Committee particularly reviewedthe Company’s related party transactions, contingent liabilities and outstandinglegal cases, and are of the view that disclosures are adequate, and wherenecessary, appropriate provisions have been made. To the best of the Committee’sknowledge, the financial statements appearing in the Company Annual Report forthe year ended 31 December 2001 are fair and accurate.

Lastly the Committee has recommended to the Board of Directors, forproposal to the Annual General Meeting of Shareholders, that KPMG Audit(Thailand) be re-appointed as the Company’s external auditors for the financialyear ending 31 December 2002, at an appropriate remuneration to be agreed upon.

(Sudhipan Charumani)Chairman of the Audit Committee

March 18, 2002

Auditor’s Report

To the Shareholders of Hemaraj Land and Development Public Company Limited:

I have audited the consolidated balance sheets of Hemaraj Land and Development Public Company Limited and subsidiaries as at December 31, 2001 and 2000, and the related consolidated statements of income, changes in shareholders’ equity, deficit and cash flows for each of the years then ended, and the separate financial statements of Hemaraj Land and Development Public Company Limited for the same periods. The Company’s management are responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial positions as at December 31, 2001 and 2000, of Hemaraj Land and Development Public Company Limited and subsidiaries, and the consolidated results of their operations and their cash flows for each of the years then ended, and the separate financial positions as at December 31, 2001 and 2000 and separate results of operations and cash flows of Hemaraj Land and Development Public Company Limited for the same periods, in conformity with generally accepted accounting principles.

2

Without qualifying my opinion, I draw attention to Note 1 to the financial statements. The operations of Hemaraj Land and Development Public Company Limited (“the Company”) and subsidiaries may continue to be influenced by the economic conditions in Thailand and the Asia Pacific Region in general. I also draw attention to Note 17 and Note 18 to the financial statements. Due to the liquidity constraints, the Company has failed to make payments of the principal of the restructuring loans and related interest payable, which were due, and also repayments of the convertible bonds for which the bondholders sought redemption, in accordance with their rights, on September 9, 1998, and all related interest payables due since September 9, 1998. The management have informed me that they have been in the process of negotiating for debt restructuring of which up to date of my report, the results have not yet been determined. In addition, I draw attention to Note 23 to the financial statements. The Company, as a guarantor, has provided reserve for possible loss from lawsuit and as a co-borrower also provided reserve for possible loss from pledge of securities, of which the actual losses could differ from such reserves.

Nirand Lilamethwat Certified Public Accountant Registration Number 2316

KPMG Audit (Thailand) Limited Bangkok, February 15, 2002

Consolidated The CompanyASSETS 2001 2000 2001 2000

Baht Baht Baht Baht

CURRENT ASSETS Cash on hand and at banks (Notes 3, 5 and 28) 110,095,240.80 97,703,036.61 9,421,079.91 4,862,865.74 Deposits for investment (Notes 3 and 6) 243,545,208.78 - - - Short-term investments Time deposits (Notes 3, 5, 7 and 28) 45,862,010.17 46,800,300.04 546,145.54 2,489,663.54 Investments in securities, net (Notes 3, 7 and 28) 281,463.20 240,343.20 281,463.20 240,343.20 Total Short-Term Investments, net 46,143,473.37 47,040,643.24 827,608.74 2,730,006.74 Accounts receivable, net (Notes 3 and 8) 94,661,357.71 100,499,261.46 2,601,567.27 3,591,003.06 Accounts receivable - related parties, net (Note 3) 3,747,449.43 4,348,465.24 134,933.34 1,311,422.26 Short-term loans and advance to related parties (Notes 4 and 30) 92,490.98 - 49,893,336.63 33,760,899.69 Cost of real estate developments, net (Notes 3, 9, 12, 28 and 30) 2,401,101,203.89 2,668,722,974.31 563,388,615.11 796,467,836.93 Other current assets Prepaid expenses 9,710,552.01 14,174,694.58 4,328,778.39 8,141,289.77 Advance payments 1,544,329.74 1,826,858.71 706,667.24 1,201,329.21 Others 16,587,985.52 8,429,969.91 5,308,228.21 3,474,744.24 Total Other Current Assets 27,842,867.27 24,431,523.20 10,343,673.84 12,817,363.22 Total Current Assets 2,927,229,292.23 2,942,745,904.06 636,610,814.84 855,541,397.64 INVESTMENTS AND LOANS, NET Related parties (Notes 3, 4, 10, 28, 30 and 31) Investments, net (Notes 1 and 16) 53,642,453.71 352,235,705.82 2,304,276,208.73 2,611,861,396.15 Loans, net 401,438,316.73 803,012,101.70 681,715,624.64 986,072,155.78 Total Related Parties 455,080,770.44 1,155,247,807.52 2,985,991,833.37 3,597,933,551.93 Other company (Notes 3 and 10) 1,000,000.00 1,000,000.00 - - Total Investments and Loans, net 456,080,770.44 1,156,247,807.52 2,985,991,833.37 3,597,933,551.93 LEASEHOLD LAND AND LAND HELD FOR COMMERCIAL PURPOSES, NET (Notes 3, 11, 28 and 30) 1,756,630,823.35 1,759,215,660.17 1,483,204,155.56 1,486,215,922.38 ASSETS FOR RENT, NET (Notes 3, 9, 12 and 28) 411,690,093.69 297,477,020.09 96,108,804.13 100,237,140.21 PROPERTY, PLANT AND EQUIPMENT, NET (Notes 3 and 13) 186,262,277.53 244,479,007.75 21,277,052.65 59,057,373.85 OTHER ASSETS Advances to the Provincial Electricity Authority (Note 14) 14,772,372.02 55,446,472.02 - - Sinking fund (Notes 15 and 30) 360,334,752.82 221,599,905.16 147,485,209.96 69,048,180.80 Goodwill (Notes 3 and 16) - 1,061,428.91 - - Withholding tax 12,627,801.04 8,799,971.37 6,781,555.28 3,813,307.26 Deposits and others (Note 3) 3,532,774.89 1,986,645.20 1,549,280.73 1,036,217.66 Total Other Assets 391,267,700.77 288,894,422.66 155,816,045.97 73,897,705.72 Total Assets (Note 35) 6,129,160,958.01 6,689,059,822.25 5,379,008,706.52 6,172,883,091.73

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS AS AT DECEMBER 31, 2001 AND 2000

See notes to financial statements3

Consolidated The CompanyLIABILITIES AND SHAREHOLDERS' EQUITY 2001 2000 2001 2000

Baht Baht Baht Baht

CURRENT LIABILITIES Bank overdrafts and loans from financial institutions (Notes 3 and 28) 40,014,994.15 37,738,780.53 39,818,436.38 37,724,634.26 Loans under debt restructuring negotiation plan (Notes 17, 21 and 28) 535,369,822.95 130,822,739.72 535,369,822.95 130,822,739.72 Convertible bonds (Notes 3, 18, 22 and 24) 1,272,091,374.63 1,245,705,910.48 1,272,091,374.63 1,245,705,910.48 Other loan - 40,000,000.00 - 40,000,000.00 Accounts payable 91,267,946.07 53,534,268.15 5,035,221.43 8,527,972.02 Accounts payable - the Industrial Estate Authority of Thailand (Notes 15 and 30) 60,424,059.85 377,839,056.76 37,163,348.98 243,057,747.75 Income received in advance (Notes 3 and 19) 134,747,575.70 178,080,244.29 1,627,578.38 1,829,778.89 Current portion of loans from directors and related persons (Notes 4, 20 and 28) 102,765,000.00 - - - Current portion of long-term liabilities (Notes 21 and 28) 71,546,663.10 177,488,679.85 54,850,847.45 71,287,289.03 Current portion of guaranteed bonds (Notes 3, 18, 22, 28 and 31) 213,305,681.75 20,105,558.79 - - Short-term loans and advances from related parties (Note 4) - 11,011,803.65 32,133,632.59 - Other current liabilities Accrued interest expense (Notes 3, 17, 18, 20 and 21) 450,670,487.21 352,702,315.57 433,673,359.09 332,708,438.18 Accrued directors' remuneration (Note 26) 38,302,321.66 23,771,859.99 23,901,648.00 15,145,000.00 Account payable - buildings purchase agreement (Note 13) - 11,774,605.00 - 11,774,605.00 Others 118,533,851.20 52,853,290.26 30,359,140.05 32,100,998.74 Total Other Current Liabilities 607,506,660.07 441,102,070.82 487,934,147.14 391,729,041.92 Total Current Liabilities 3,129,039,778.27 2,713,429,113.04 2,466,024,409.93 2,170,685,114.07 DUE TO AND LOANS FROM RELATED PARTIES (Notes 4 and 18) 1,518,141.40 1,518,141.40 1,465,073,953.01 1,828,118,970.73 LOANS FROM DIRECTORS AND RELATED PERSONS (Notes 4, 20 and 28) 182,235,000.00 63,000,000.00 - -LONG-TERM LIABILITIES (Notes 17, 21 and 28) 497,942,497.16 1,174,997,471.44 237,574,640.00 654,472,570.68 GUARANTEED BONDS (Notes 3, 18, 22, 28 and 31) 547,742,527.01 689,292,030.81 - -OTHER LIABILITIES Reserve for possible loss from lawsuit (Note 23) 128,399,460.21 128,399,460.21 128,399,460.21 128,399,460.21 Reserve for possible loss from pledge of securities (Note 23) 393,897,945.95 235,500,000.00 393,897,945.95 235,500,000.00 Retention payable 21,394,814.05 15,276,502.21 1,400,841.46 1,121,705.35 Deferred right of use income (Note 3) 23,476,487.83 25,021,782.38 - - Others 25,967,167.79 42,265,112.50 21,195,000.00 21,195,000.00 Total Other Liabilities 593,135,875.83 446,462,857.30 544,893,247.62 386,216,165.56 Total Liabilities 4,951,613,819.67 5,088,699,613.99 4,713,566,250.56 5,039,492,821.04

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIESBALANCE SHEETS AS AT DECEMBER 31, 2001 AND 2000


Consolidated The Company2001 2000 2001 2000

LIABILITIES AND SHAREHOLDERS' EQUITY (continued) Baht Baht Baht Baht

SHAREHOLDERS' EQUITY Share capital (Notes 24, 25 and 32) Authorised share capital 327,000,000 shares, Baht 10 par value 3,270,000,000.00 3,270,000,000.00 3,270,000,000.00 3,270,000,000.00 Issued and fully paid-up share capital 70,790,777 shares 707,907,770.00 707,907,770.00 707,907,770.00 707,907,770.00 Warrants (Notes 24 and 25) 14,150,594.80 14,150,594.80 14,150,594.80 14,150,594.80 Paid-in capital Premium on share capital (Notes 24 and 25) 997,245,113.20 997,245,113.20 997,245,113.20 997,245,113.20 Retained earnings (deficit) Appropriated - legal reserve 210,491,426.19 210,491,426.19 95,340,462.07 95,340,462.07 Deficit ############## (867,892,536.37) ############## (752,741,572.25) Unrealised gain (loss) from changes in carrying amount of available-for-sale securities (Notes 3 and 7) 343.20 (21,476.80) 343.20 (21,476.80) Adjustments from financial statement translations (Note 3) 96,769,229.20 71,509,379.67 96,769,229.20 71,509,379.67

665,442,455.96 1,133,390,270.69 665,442,455.96 1,133,390,270.69 Minority interests 512,104,682.38 466,969,937.57 - - Total Shareholders' Equity 1,177,547,138.34 1,600,360,208.26 665,442,455.96 1,133,390,270.69 Total Liabilities and Shareholders' Equity 6,129,160,958.01 6,689,059,822.25 5,379,008,706.52 6,172,883,091.73


Consolidated The Company2001 2000 2001 2000Baht Baht Baht Baht

REVENUES (Note 3) Sales of land (Notes 4 and 33) 534,376,366.40 317,184,816.99 202,200.51 9,244,510.04 Sales of pre-fabricated factory (Note 33) 35,000,000.00 30,338,600.00 - - Service income (Notes 4 and 33) 368,438,026.21 280,986,571.10 50,057,753.26 40,596,315.43 Other incomes Reserve for loss on projects revaluation over demand (Notes 9 and 11) - 62,956,510.22 - 62,956,510.22 Reversal of reserve for loss on investment in a subsidiary company - 59,999,300.00 - - Interest income (Note 4) 61,009,038.49 58,945,801.34 97,054,669.04 59,790,975.38 Commission and management income (Notes 4 and 30) - - 44,247,102.46 6,631,398.93 Gain on revision of the Joint Operation Agreements (Note 30) 222,484,297.89 - 174,340,328.09 - Others (Note 4) 37,059,647.65 7,855,649.96 8,926,661.98 10,285,898.22 Total Other Incomes 320,552,984.03 189,757,261.52 324,568,761.57 139,664,782.75 Total Revenues 1,258,367,376.64 818,267,249.61 374,828,715.34 189,505,608.22 EXPENSES (Note 3) Cost of land sales 400,555,992.06 185,343,144.45 63,224,412.64 9,791,535.28 Cost of pre-fabricated factory sales 19,932,827.66 17,704,539.55 - - Cost of services (Notes 12, 13 and 26) 248,284,243.91 209,420,565.01 35,750,789.80 28,414,066.50 Selling and administrative expenses (Notes 13, 16, 26, 29 and 30) 161,838,766.07 143,572,892.70 71,012,443.38 71,074,170.51 Interest expense (Notes 4, 18, 20, 21 and 22) 220,901,540.64 271,330,891.24 145,544,472.85 182,280,118.03 Directors' remuneration (Note 26) 86,359,884.71 51,065,821.75 31,601,045.73 16,979,443.81 Other expenses Share of loss in subsidiary companies (Note 4) - - 9,812,343.93 111,571,778.32 Share of loss in associated companies (Note 4) 303,873,252.11 138,280,335.23 303,873,252.11 138,280,335.23 Loss on exchange rate 46,979,254.04 301,209,850.03 22,936,505.17 163,525,127.82 Reserve for loss of possessory right over the land and and office building (Note 13) 25,181,324.26 - 25,181,324.26 - Reserve for possible loss from pledge of securities (Note 23) 158,397,945.95 235,500,000.00 158,397,945.95 235,500,000.00 Others 10,165,993.27 84,086,843.02 723,663.78 84,086,843.02 Total Other Expenses 544,597,769.63 759,077,028.28 520,925,035.20 732,964,084.39 Total Expenses 1,682,471,024.68 1,637,514,882.98 868,058,199.60 1,041,503,418.52 LOSS BEFORE INCOME TAX (424,103,648.04) (819,247,633.37) (493,229,484.26) (851,997,810.30)INCOME TAX (Notes 3 and 33) (8,239,103.41) (956,257.31) - -LOSS BEFORE MINORITY INTERESTS (432,342,751.45) (820,203,890.68) (493,229,484.26) (851,997,810.30)MINORITY INTERESTS (60,886,732.81) (31,793,919.62) - -NET LOSS (Note 35) (493,229,484.26) (851,997,810.30) (493,229,484.26) (851,997,810.30)BASIC LOSS PER SHARE (Notes 3 and 27) (6.97) (12.04) (6.97) (12.04)

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF INCOME

FOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000



SHARE CAPITAL Ordinary share (Notes 24, 25 and 32) Beginning balance 707,907,770.00 707,659,770.00 707,907,770.00 707,659,770.00 Increase during year - 248,000.00 - 248,000.00 Decrease during year - - - - Ending balance 707,907,770.00 707,907,770.00 707,907,770.00 707,907,770.00 WARRANTS (Notes 24 and 25) Beginning balance 14,150,594.80 14,153,074.80 14,150,594.80 14,153,074.80 Increase during year - - - - Decrease during year - (2,480.00) - (2,480.00) Ending balance 14,150,594.80 14,150,594.80 14,150,594.80 14,150,594.80 PAID-IN CAPITAL Premium on share capital (Notes 24 and 25) Beginning balance 997,245,113.20 997,242,633.20 997,245,113.20 997,242,633.20 Increase during year - 2,480.00 - 2,480.00 Decrease during year - - - - Ending balance 997,245,113.20 997,245,113.20 997,245,113.20 997,245,113.20 RETAINED EARNINGS (DEFICIT) Appropriated Legal reserve Beginning balance 210,491,426.19 210,491,426.19 95,340,462.07 95,340,462.07 Increase during year - - - - Decrease during year - - - - Ending balance 210,491,426.19 210,491,426.19 95,340,462.07 95,340,462.07 Deficit Beginning balance (867,892,536.37) (15,894,726.07) (752,741,572.25) 99,256,238.05 Net loss for the year (493,229,484.26) (851,997,810.30) (493,229,484.26) (851,997,810.30) Ending balance ############## (867,892,536.37) ############## (752,741,572.25)UNREALISED GAIN (LOSS) FROM CHANGES IN CARRYING AMOUNT OF AVAILABLE-FOR-SALE SECURITIES (Notes 3 and 7) Beginning balance (21,476.80) (5,120,938.00) (21,476.80) (5,120,938.00) Increase during year - - - - Decrease during year 21,820.00 5,099,461.20 21,820.00 5,099,461.20 Ending balance 343.20 (21,476.80) 343.20 (21,476.80)ADJUSTMENTS FROM FINANCIAL STATEMENT TRANSLATIONS (Note 3) Beginning balance 71,509,379.67 (77,152,682.90) 71,509,379.67 - Change during year 25,259,849.53 148,662,062.57 25,259,849.53 71,509,379.67 Ending balance 96,769,229.20 71,509,379.67 96,769,229.20 71,509,379.67

665,442,455.96 1,133,390,270.69 665,442,455.96 1,133,390,270.69

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITYFOR THE YEARS ENDED DECEMBER 31, 2001 AND 2000


Statements of Changes in Shareholders' Equity (continued) Consolidated The Company

2001 2000 2001 2000Baht Baht Baht Baht

MINORITY INTERESTS Beginning balance 466,969,937.57 435,176,017.95 - - Increase during year 60,886,750.31 31,793,919.62 - - Decrease during year - dividend (15,752,005.50) - - - Ending balance 512,104,682.38 466,969,937.57 - - Total Shareholders' Equity 1,177,547,138.34 1,600,360,208.26 665,442,455.96 1,133,390,270.69



UNAPPROPRIATED RETAINED EARNINGS (DEFICIT) Beginning balance (867,892,536.37) (15,894,726.07) (752,741,572.25) 99,256,238.05 Less Appropriated income prior year: Legal reserve - - - - Dividend - - - - Net loss for the year (493,229,484.26) (851,997,810.30) (493,229,484.26) (851,997,810.30) Total Deficit ############## (867,892,536.37) ############## (752,741,572.25)APPROPRIATED RETAINED EARNINGS Legal reserve 210,491,426.19 210,491,426.19 95,340,462.07 95,340,462.07 Total Appropriated Retained Earnings 210,491,426.19 210,491,426.19 95,340,462.07 95,340,462.07 Total Deficit ############## (657,401,110.18) ############## (657,401,110.18)

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF DEFICIT




CASH FLOWS FROM OPERATING ACTIVITIES Net loss (493,229,484.26) (851,997,810.30) (493,229,484.26) (851,997,810.30) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Allowance for doubtful accounts 5,315,976.67 11,109,646.56 2,925,804.11 8,835,471.22 (Gain) loss on exchange rate (8,885,465.77) (45,431,021.87) (554,660.25) 4,559,404.28 Reserve for loss on projects revaluation over demand - (62,956,510.22) - (62,956,510.22) Share of loss in subsidiary companies - - 9,812,343.93 111,571,778.32 Share of loss in associated companies 303,873,252.11 138,280,335.23 303,873,252.11 138,280,335.23 Impairment loss on investments - 38,053,680.00 - 38,053,680.00 Loss on sale of investments - 46,033,163.02 - 46,033,163.02 Reversal of reserve for loss on investment in a subsidiary company - (59,999,300.00) - - (Gain) on sales of equipment (1,720,746.06) (2,192,556.32) (1,119,728.42) (1,765,893.80) Depreciation and amortisation 39,742,917.30 34,952,644.63 12,200,505.14 11,669,451.61 Impairment loss on construction in progress 10,165,993.27 - 723,663.78 - Reserve for loss of possessroy right over the land and office building 25,181,324.26 - 25,181,324.26 - Amortisation of goodwill 1,061,428.91 1,592,143.12 1,061,428.91 1,592,143.12 Increase in provision for convertible bond redemption 26,385,464.15 164,311,957.89 26,385,464.15 164,311,957.89 (Gain) on revision of the Joint Operation Agreements (222,484,297.89) - (174,340,328.09) - Increase in provision for guaranteed bond redemption 58,242,525.18 50,614,493.88 - - Reserve for possible loss from pledge of securities 158,397,945.95 235,500,000.00 158,397,945.95 235,500,000.00 Amortisation of deferred right of use income (9,905,094.55) (2,869,153.07) - - Increase in minority interests 60,886,750.31 31,793,919.62 - - Changes in operating assets and liabilities (Increase) decrease in accounts receivable 1,742,935.12 (61,908,154.13) (715,360.28) (2,615,505.84) (Increase) in accounts receivable - related parties (619,992.23) (5,795,935.11) (44,519.12) (5,539,489.34) (Increase) decrease in cost of real estate developments (27,323,022.56) 132,982,403.88 62,973,000.14 3,569,721.23 (Increase) decrease in prepaid expenses 5,244,614.82 (8,997,962.01) 4,170,378.88 (5,303,380.69) (Increase) decrease in advance payments 282,528.97 (49,393.87) 494,661.97 (158,486.14) (Increase) decrease in other current assets (5,417,978.32) 4,155,976.85 (217,403.27) 380,041.47 (Increase) in withholding tax (3,827,829.67) (2,717,064.55) (2,968,248.02) (1,219,620.51) (Increase) decrease in deposits and others (727,456.09) 4,939,291.77 (48,373.31) 5,465,252.33 Increase (decrease) in accounts payable 37,733,677.92 (42,554,318.43) (3,492,750.59) (10,257,890.72) Increase (decrease) in accounts payable - the Industrial Estate Authority of Thailand (42,545,147.64) 14,101,787.30 (18,736,106.04) 16,859,678.61 Increase (decrease) in income received in advance (44,555,741.73) 4,992,230.83 (202,200.51) 712,133.83 Increase in accrued interest expense 97,968,171.64 106,902,619.22 100,964,920.91 106,398,776.65 Increase in accrued directors' remuneration 14,530,461.67 23,771,859.99 8,756,648.00 15,145,000.00 Increase (decrease) in other current liabilities 53,356,182.56 (823,476.66) (8,649,886.69) (6,823,761.70) Increase (decrease) in retention payable 6,118,311.84 (4,597,298.91) 279,136.11 71,576.70 Increase in deferred right of use income 8,359,800.00 8,116,320.00 - - Increase (decrease) in other liabilities (16,297,944.71) 14,322,752.50 - - Net Cash Provided by (Used in) Operating Activities 37,050,061.17 (86,362,729.16) 13,881,429.50 (39,628,783.75)

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIESSTATEMENTS OF CASH FLOWS



Statements of Cash Flows (continued)Consolidated The Company


CASH FLOWS FROM INVESTING ACTIVITIES (Increase) in cash deposited for investment (243,545,208.78) - - - (Increase) in short-term investments in securities (19,300.00) - (19,300.00) - (Increase) decrease in short-term loans and advances to related parties (92,490.98) - (16,132,436.94) 10,125,688.86 (Increase) in investments in related parties (5,280,000.00) (1,600,000.00) (5,529,982.50) (1,600,000.00) Cash received from sale of investments - 432,492,335.83 - 432,492,335.83 Dividend received from a subsidiary company - - 23,627,994.50 - (Increase) decrease in loans to related parties 410,459,250.74 (529,153,474.88) 393,131,043.41 49,953,671.92 (Increase) in leasehold land and land held for commercial purposes (426,930.00) (265,903.20) - (265,903.20) (Increase) in assets for rent (177,091.14) (177,029.58) - - Cash received from sales of equipment 2,880,815.10 2,237,447.20 1,134,587.85 1,802,867.76 (Increase) in building and equipment (14,271,980.95) (5,673,204.77) (1,542,962.09) (1,693,479.28) Decrease in advances to the Provincial Electricity Authority 40,674,100.00 91,568,292.90 - 5,104,223.14 (Increase) in sinking fund (13,527,751.02) (812,129.43) - (7,544,613.69) Net Cash Provided by (Used in) Investing Activities 176,673,412.97 (11,383,665.93) 394,668,944.23 488,374,791.34

CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in bank overdrafts and loans from financial institutions 2,276,213.62 (12,304,062.23) 2,093,802.12 3,916,725.48 (Decrease) in other loan (40,000,000.00) - (40,000,000.00) - Increase (decrease) in short-term loans and advances from related parties (11,011,803.65) (29,582,260.27) 32,133,632.59 (320,905,982.94) (Decrease) in due to and loans from related parties - - (371,375,823.24) (121,017,453.29) Increase in loans from directors and related person 222,000,000.00 63,000,000.00 - - (Decrease) in long-term liabilities (378,449,907.80) (103,103,249.22) (28,787,289.03) (17,645,423.52) Cash paid for guaranteed bond redemption (21,861,666.55) (19,764,072.86) - - Cash received from exercise of warrants - 248,000.00 - 248,000.00 Dividend paid to minority interests (15,752,005.50) - - - Net Cash (Used in) Financing Activities (242,799,169.88) (101,505,644.58) (405,935,677.56) (455,404,134.27)Adjustments from financial statement translations 40,529,610.06 241,091,418.84 - -Net increase (decrease) in cash and cash equivalents 11,453,914.32 41,839,379.17 2,614,696.17 (6,658,126.68)Cash and cash equivalents at January 1, 2001 and 2000 (Notes 3 and 5) 88,734,800.25 28,440,499.67 1,914,444.59 1,183,642.60 Cash at banks pledged as collateral at January 1, 2001 and 2000 (Notes 3 and 5) 55,768,536.40 74,223,457.81 5,438,084.69 12,827,013.36 Cash at banks pledged as collateral at December 31, 2001 and 2000 (Notes 3, 5 and 28) (46,897,628.56) (55,768,536.40) (546,145.54) (5,438,084.69)Cash and cash equivalents at December 31, 2001 and 2000 (Notes 3 and 5) 109,059,622.41 88,734,800.25 9,421,079.91 1,914,444.59


Statements of Cash Flows (continued)Consolidated The Company


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid during the years for: Interest expense 87,397,596.43 133,623,658.04 44,283,164.36 66,434,730.86 Income tax 8,495,602.54 3,396,019.10 2,968,248.02 1,219,620.48

2001 Consolidated financial statements: - During the year, the Company and 2 subsidiaries have entered into car hire-purchase agreements with total carrying amount of Baht 11.03 million. - During the year, the Company has transferred land in its industrial estate with the cost of Baht 137.6 million (the fair value of Baht 222.41 million) to the Industrial Estate Authority of Thailand as disclosed in Notes 9, 15 and 30 to the financial statements. The Company's financial statements: - During the year, the Company has entered into car hire-purchase agreements with total carrying amount of Baht 6.16 million. - During the year, the Company has transferred land in its industrial estate with the cost of Baht 137.6 million (the fair value of Baht 222.41 million) to the Industrial Estate Authority of Thailand as disclosed in Notes 9, 15 and 30 to the financial statements.

2000 Consolidated financial statements: - During the year, the Company and a subsidiary had entered into car hire-purchase agreements with total carrying amount of Baht 8.58 million. The Company's financial statements: - During the year, the Company had entered into car hire-purchase agreements with total carrying amount of Baht 5.75 million. - During the year, the Company received, by way of transfer, loans to an associated company in the approximate amount of Baht 734.7 million from an overseas subsidiary company. This transaction was equally recorded as asset and liability in the Company's financial statements on the date of transaction.


13

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 AND 2000

NOTE 1 - ECONOMIC ENVIRONMENT AND BASIS OF FINANCIAL STATEMENT PRESENTATION

Economic Environment The operations of Hemaraj Land and Development Public Company Limited (“the Company”) and its subsidiaries (“Hemaraj Group”) may continue to be influenced for the foreseeable future by the economic conditions in Thailand and the Asia Pacific Region in general. The financial statements of the Company and its subsidiaries reflect the management’s current assessment of the impact of current economic conditions on the financial positions of the Company and its subsidiaries. However, actual results could differ from the management estimates. Basis of Financial Statement Presentation The financial statements of the Company and its subsidiaries have been presented in accordance with the Ministerial Regulation No.7 (B.E. 2539), under the Public Company Limited Act, B.E. 2535 and in conformity with generally accepted accounting principles practiced in Thailand. They have been prepared in the Thai language as required by Thai law and regulatory requirements and have been translated into English for the convenience of the reader. The consolidated financial statements for the years ended December 31, consist of the financial statements of Hemaraj Land and Development Public Company Limited and subsidiaries as follows:

Type of Business Holding of Interest (%) 2001 2000

Eastern Industrial Estate Company Limited Industrial Estate 99.99 99.99 Eastern Seaboard Industrial Estate (Rayong) Company Limited Industrial Estate 60.00 60.00 Eastern Pipeline Services Company Limited Pipe Rack Rental 99.99 99.99 H-International (BVI) Company Limited* Holding Company 100.00 100.00 Hemaraj International Limited** Holding Company 99.99 99.99 H-Construction Management and Engineering and Construction Engineering Company Limited*** Supervision Services 99.99 -

* An overseas subsidiary, for which KPMG British Virgin Islands issued the unqualified auditors’ reports dated January 29, 2002 and January 12, 2001, respectively.

** An overseas subsidiary, based on information from the financial statements, which were provided by the management and were not audited.

*** Established in the third quarter of 2001, based on information from the financial statements, which were audited by another auditor.

Significant intercompany transactions are eliminated from the consolidated financial statements.

In addition, the consolidated and the Company’s financial statements for years ended December 31, include portions of gain (loss) from associated companies, based on information from the financial statements, which were provided by the management and were not audited or were audited by other auditors, as follows:

14

Economic environment and basis of financial statement presentation (continued) 2001

(Amounts:Million Baht) Glow Company Limited (formerly: H-Power Company Limited)* (301.45) Elyo-H Facilities Management Limited ** (2.42) 2000

(Amounts:Million Baht) Elyo-H Facilities Management Limited* (0.45) Pinago Services Limited** 0.35 * Based on information from the financial statements, which were audited by other auditors. ** Based on information from the financial statements, which were provided by the management and were not audited.

NOTE 2 - GENERAL INFORMATION

On August 15, 1988, the Company was incorporated under the Civil and Commercial Code of Thailand and was subsequently listed on the Stock Exchange of Thailand and transformed as a Public Company Limited on July 10, 1992 and July 12, 1993, respectively.

The Company, which is the parent company of Hemaraj Group, operates its business as an industrial estate developer with 3 industrial estate development projects located in the Eastern Seaboard of Thailand. The projects are operating under the joint operation agreements with the Industrial Estate Authority of Thailand, in the names of the Company and its 2 subsidiaries as follows:

Company Name Industrial Estate Site Location Hemaraj Land and Development Plc. Chonburi Industrial Estate (Bor-Win) Sriracha district, Chonburi province Eastern Industrial Estate Co., Ltd. Eastern Industrial Estate (Map Ta Phut) Muang district, Rayong province Eastern Seaboard Industrial Estate Eastern Seaboard Industrial Pluak Daeng district, Rayong province (Rayong) Co., Ltd. Estate (Rayong)

In addition, the Company has jointly invested in an electricity power production project with an overseas energy expert under the name Glow Group (formerly: “H-Power Group”), which was authorised by the Electricity Generating Authority of Thailand to construct an electricity and steam power plant with the 125 MW production capacity, which is under construction. Currently, the Glow Group is still in the process of constructing the independent power plant with 713 MW production capacity, which is expected to be completed and operating in the year 2002.

Hemaraj Group’s headquarters is located at 18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suan Luang, Bangkok 10250.

As at December 31, 2001, Hemaraj Group employs 145 staff.

15

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Measurement Bases Used in Preparing the Financial Statements Other than those disclosed in other topics and other notes to the financial statements, the financial statements are prepared on the historical cost basis. Estimation Preparation of financial statements in conformity with generally accepted accounting principles requires the management to make the estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and also the disclosures of contingent assets and liabilities at balance sheet date. However, actual results may differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents represent cash on hand and at banks net of cash at banks pledged as collateral.

Short-Term Investments Available-for-sale securities consist of investments in marketable securities, which are stated at fair value net of accumulated impairment loss on investments.

Unrealised gain or loss from changes in carrying amount of available-for-sale securities is included under shareholders’ equity.

Impairment loss on investments is included in the statement of income.

Accounts Receivable Accounts receivable consist of land sale contracts receivable which represent the amount of contract prices net of installments received and deferred income, and service receivables which are shown net of allowance for doubtful accounts for billings overdue by more than 90 days.

Cost of Real Estate Developments Cost of real estate developments consists of land costs, development costs and capitalised interest on loans for development project including advances and deposits for construction costs. These costs are transferred to cost of sales when revenue from sales is recognised.

Cost of real estate developments is stated at the lower of aggregate cost and net realisable value.

Loss on project revaluation is included in the statement of income.

Capitalisation of Borrowing Costs Interest expense and fees on long-term loans and loan from directors and related person for development projects are capitalised to cost of real estate developments. The capitalisation will be suspended or ceased when the development projects are interrupted or completed.

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Summary of significant accounting policies (continued)

Investments and Loans Investments - Investments in subsidiary and associated companies are recorded using the equity method.

- General investments represent investments in related and other companies which are stated at cost net of accumulated impairment loss on investments.

Impairment loss on investments is included in the statement of income.

Loans Allowance for doubtful accounts is an estimate of those amounts which may prove to be uncollectible, based on a review of the current status and the ability of receivables to repay.

Leasehold Land and Land Held for Commercial Purposes Leasehold land and land held for commercial purposes consists of land leasehold, land costs, development costs and capitalised interest on loans of undeveloped projects and projects which were suspended from development.

Leasehold land and land held for commercial purposes is stated at the lower of aggregate cost and net realisable value.

Loss on projects revaluation is included in the statement of income.

Assets for Rent Assets for rent are stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 15 years for pipe rack and 20 years for building.

Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 5 years for equipment and 20 years for building.

Goodwill Goodwill represents the excess of acquisition cost over net assets of investments in subsidiary companies at the date of acquisition, and is being amortised over a ten-year period as from September 1991.

Deferred Interest on Hire Purchase Agreements Deferred interest on hire purchase agreement is amortised over the period of hire purchase agreements.

Income Received in Advance Income received in advance represents the amounts received from land sale and purchase contracts over the amount of revenues, which are recognised using the percentage of completion method, and service income received in advance.

Deferred Right of Use Income Deferred right of use income represents right of use fee received on rental of land, building and pipe rack, and is recognised as revenue over the period of rental contract.

17

Summary of significant accounting policies (continued)

Revenue and Expense Recognition Other than those disclosed in other topics, revenue and expense recognition are as follows:

- Revenue and Cost of Land Sales Revenue from land sales is recognised upon signing of contract and receiving of deposits by the percentage of completion method, using the ratio of actual development costs incurred to total estimated development cost excluding land cost. Cost of sales is total estimated development costs proportionately recognised by the percentage of revenue recognition, using the ratio of accumulated revenue recognition to total estimated project revenues.

Total estimated revenues and development costs of each project are to be revised when they do not reflect total revenues and costs that expected to be incurred.

During 2001, the Company and its subsidiaries have revised estimated revenues and development cost for each project in order to reflect the amount that expected to be incurred, which has generally effected to the revenue and cost recognition.

- Revenue and Cost of Pre-fabricated Factory Sales (Eastern Seaboard Industrial Estate (Rayong) Company Limited) Revenue and cost of pre-fabricated factory sales are recognised upon signing of sale contract.

- Service Income and Cost of Services Service income and cost of services are recognised on the accrual basis. Service income represents income received from providing public utilities, tap water, raw water, wastewater processing, garbage collection services, construction services and rental services in respect of land, shop house, warehouse, factory and pipe rack to the Industrial Estate. Cost of services represents cost incurred from providing of such services. The recognition of income from public utilities service is ceased when the receivables cease their business operations and are in troubling to make payments.

- Gain from Conditional Debt Release Agreements. (Hemaraj Land and Development Public Company Limited and Eastern Pipeline Services Company Limited) Portions of long-term loans under the Conditional Debt Release Agreements and related interest payable, which would be forgiven, are to be recognised as revenue in the statement of income upon the completion of debt repayments.

- Other Incomes and Expenses Other incomes and expenses are recognised on the accrual basis.

18

Summary of significant accounting policies (continued) Accounts in Foreign Currency - The financial statements of an overseas subsidiary company are translated into Baht for consolidation purposes

using rates of exchange as follows: - Assets and liabilities are translated at the exchange rate ruling at the end of the year. - Revenues and expenses are translated at average exchange rates. - Share capital is translated at the exchange rate ruling on the transaction date. Adjustments from translation of foreign financial statements are included under shareholders’ equity.

- Convertible bonds and related transactions are translated into Baht using rates of exchange as follows: - Convertible bonds are translated into Baht at the forward rate of exchange stated in the Bond prospectus. - The provision for convertible bond redemption is converted into Baht at the rates stated in the Bond

prospectus. - Accrued interest expense on convertible bonds is translated into Baht at the rate of exchange at the end of the

year. Adjustments from translation are included in the statement of income.

- Other foreign currency transactions occuring during the year are converted into Baht at the rates prevailing on the dates of the transactions. Assets and liabilities at the end of the year are converted into Baht at the rates of exchange on that date. Gain or loss on translation is included in the statement of income.

Corporate Income Tax Corporate income tax for each year is recognised on the accrual basis, which is base on the taxable profit (loss) for the year. Loss per Share Basic loss per share is computed by dividing net loss attributable to ordinary shareholders for the year by the weighted average number of ordinary shares outstanding during the year. Diluted loss per share is computed by dividing net loss attributable to ordinary shareholders for the year, as adjusted for the effect of dilutive potential ordinary shares, by the weighted average number of ordinary shares outstanding during the year plus the number of potential ordinary shares.

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NOTE 4 - TRANSACTIONS WITH RELATED PARTIES The Company has certain transactions with its related parties. Intercompany terms are determined at the maximum rate of 5% of contract price for commission on sales, maximum of 5% of service income received for management fees and 7% - 12.50% for interest on loans relating to business operation and expansion, of which the recognition of interest income is ceased when overdue more than 180 days. Related parties, which have transactions with the Company, are as follows:

Company Name Type of Business Relationship Holding of Interest by the Company at December 31, 2001 (%) Subsidiary Companies Eastern Industrial Estate Company Limited Industrial Estate Co. shareholders 99.99 and management Eastern Seaboard Industrial Estate (Rayong) Company Limited Industrial Estate ,, 60.00 Eastern Pipeline Services Company Limited* Pipe Rack Rental ,, 99.99* H-International (BVI) Company Limited Holding Company ,, 100.00 Hemaraj International Limited Holding Company ,, 99.99 H-Construction Management and Engineering Engineering and Construction Company Limited Supervision Services ,, 99.99 Associated Companies

Glow Company Limited (formerly: H-Power Company Limited) Holding Company Co. shareholders 24.99 and directors Industrial Power Company Limited** Electricity and Steam ,, 24.99** Power Generation Bowin Power Company Limited** Independent Power Producer ,, 24.99** H-Infra Company Limited** Holding Company ,, 24.99** Operation Power Services Company Limited** Energy Consulting ,, 24.99** Industrial Water Supply Company Limited** Industrial Water Supply ,, 24.99** Pinago Services Limited** Holding Company ,, 24.99** Elyo-H Facilities Management Limited Facilities Management Services ,, 39.99

Related Companies Sriracha Harbor Public Company Limited Port Services Co. shareholders 9.54 and directors N.T.S. Steel Group Public Company Limited Steel Manufacturer and Distributor ,, 0.76 Nakornthai Strip Mill Public Company Limited Steel Manufacturer and Distributor ,, 1.39 Sun Tech Group Public Company Limited Agriculture and Scrap Steel Business ,, - Metal Star Company Limited Cut-to-length Steel Stretching Steel and Sales Co. directors - Benz BMB Company Limited Automotive Sales and Service ,, - Standard Inter Trade Company Limited Automotive Sales and Service ,, - Tractebel S.A. Energy Joint investor - Related Persons - Directors and

shareholders -

* Indirect holding by Eastern Industrial Estate Company Limited ** Indirect holding by Glow Company Limited (formerly: H-Power Company Limited)

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Transactions with related parties (continued)

As at December 31, balances with related parties, which are shown in the balance sheets, are as follows:

(Amounts:Million Baht) Intercompany Consolidated The Company Terms 2001 2000 2001 2000 Assets Advances to: - Subsidiary company Eastern Seaboard Industrial Estate (Rayong) Company Limited Accrued commission and management income - - 49.80 25.03 Maximum 5% of contract price and 5% of service income received Advance payments - - - 8.73 - - Associated Company Elyo-H Facilities Management Limited Advance payments 0.09 - 0.09 - - Total 0.09 - 49.89 33.76 Loans to: - Subsidiary companies Eastern Industrial Estate Company Limited Loans and accrued interest income - - 280.28 166.47 Interest rate 12.5% Eastern Seaboard Industrial Estate (Rayong) Company Limited Promissory note and accrued interest income - - - 16.59 Interest rate MLR - Associated Company Glow Company Limited (formerly: H – Power Company Limited) Loans and accrued interest income - 803.01 - 803.01 Interest rate 8% - Related Company Tractebel S.A. Loans and accrued interest income 401.43 - 401.43 - Interest rate LIBOR + 2% Sriracha Harbor Public Company Limited Loans and accrued interest income, net 0.01 - 0.01 - Interest rate 1% - MLR Total 401.44 803.01 681.72 986.07

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(Amounts:Million Baht) Intercompany Consolidated The Company Terms 2001 2000 2001 2000

Liabilities Short-term loans and advances from: - Subsidiary company Eastern Seaboard Industrial Estate (Rayong) Company Limited Advance received - - 32.13 - - - Related company Siam Food Public Company Limited Loans and accrued interest expense - 11.01 - - Interest rate MLR Total - 11.01 32.13 - Loans from: - Subsidiary company H-International (BVI) Company Limited Loans from repurchase of convertible bonds - - 1,010.14 1,034.60 - Other loans - - 453.41 792.00 -

- Related company

Other loan 1.52 1.52 1.52 1.52 - Total 1.52 1.52 1,465.07 1,828.12

Loans from directors and related persons 285.00 63.00 - - Interest rate MLR+1%

For the years ended December 31, transactions with related parties included in the statements of income are as follows:

(Amounts:Million Baht) Intercompany Consolidated The Company Terms 2001 2000 2001 2000 Revenues Revenue from sales of land 0.20 5.76 0.20 5.76 Service income 30.59 39.64 0.31 7.55 Interest income 56.91 47.45 97.00 58.93 Interest rate 7% - 12.5% Commission and - - 44.25 6.63 Maximum 5% of contract price management income and 5% of service income received Other income - 0.53 2.96 8.34

Expenses Cost of services 4.75 - 1.34 - Interest expense 17.99 3.73 - 0.08 Interest rate MLR - 12.5%

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Transactions with related parties (continued) As at December 31, 2001, the Company’s long-term investments in related parties are as follows:

Paid-up Holding of Investments Company Type of Business Relationship Capital Interest Cost Net Change in Equity Equity

(Million Baht) (%) (Million Baht) (Million Baht) (Million Baht)

Subsidiary Companies Eastern Industrial Estate Company Limited Industrial Estate Co. shareholders And management 400.00 99.99 400.00 105.04 505.04 Eastern Seaboard Industrial Estate (Rayong) Company Limited Industrial Estate ,, 358.00 60.00 214.80 549.07 763.87 Eastern Pipeline Services Company Limited* Pipe Rack Rental ,, 60.00 99.99 - (24.88) (24.88) H-International (BVI) Company Limited Holding Company ,, 0.08 100.00 0.08 1,007.97 1,008.05 Hemaraj International Limited Holding Company ,, 0.03 99.99 0.03 0.01 0.04 H-Construction Management and Engineering Engineering and Construction Company Limited Supervision Services ,, 0.25 99.99 0.25 (0.24) 0.01

Associated Companies

Glow Company Limited (formerly: H-Power Company Limited) Holding Company Co. shareholders and directors 1,283.75 24.99 301.25 (274.31) 26.94 Elyo-H Facilities Management Limited Facilities Management Services ,, 17.20 39.99 6.88 (2.87) 4.01

Related Company

Sriracha Harbor Public Company Limited Port Services ,, 1,572.75 9.54 21.20 - 21.20 Total 944.49 1,359.79 2,304.28

* Indirect holding by Eastern Industrial Estate Company Limited

Additional information - H-International (BVI) Company Limited was registered in the British Virgin Islands (US. currency used for business operation). - Hemaraj International Limited was registered in the Cayman Islands (US. currency used for business operation). - During the year 2001, no dividend was received from subsidiary, associated and related companies except for a dividend from Eastern Seaboard Industrial Estate (Rayong) Company Limited amounting to Baht 23.63 million.

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As at December 31, 2000, the Company’s long-term investments in related parties are as follows:

Paid-up Holding of Investments Company Type of Business Relationship Capital Interest Cost Net Change in Equity Equity

(Million Baht) (%) (Million Baht) (Million Baht) (Million Baht)

Subsidiary Companies Eastern Industrial Estate Company Limited Industrial Estate Co. shareholders And management 400.00 99.99 400.00 68.22 468.22 Eastern Seaboard Industrial Estate (Rayong) Company Limited Industrial Estate ,, 358.00 60.00 214.80 483.47 698.27 Eastern Pipeline Services Company Limited* Pipe Rack Rental ,, 60.00 99.99 - (21.49) (21.49) H-International (BVI) Company Limited Holding Company ,, 0.08 100.00 0.08 1,116.00 1,116.08 Hemaraj International Limited Holding Company ,, 0.03 99.99 0.03 0.01 0.04

Associated Companies

H-Power Company Limited Holding Company Co. shareholders and directors 1,205.00 24.99 301.25 27.14 328.39 Elyo-H Facilities Management Limited Facilities Management Services ,, 4.00 39.99 1.60 (0.45) 1.15

Related Company

Sriracha Harbor Public Company Limited Port Services ,, 1,572.75 9.54 21.20 - 21.20 Total 938.96 1,672.90 2,611.86

* Indirect holding by Eastern Industrial Estate Company Limited

Additional information - H-International (BVI) Company Limited was registered in the British Virgin Islands (US. currency used for business operation). - Hemaraj International Limited was registered in the Cayman Islands (US. currency used for business operation). - During the year 2000, no dividend was received from subsidiary, associated and related companies.

24

Transactions with related parties (continued) Hemaraj Land and Development Public Company Limited

Share Transfer Agreement According to the resolution passed by the Board of Directors’ Meeting No. 1/2000 dated February 8, 2000, the Company entered into a share transfer agreement with Tractebel S.A. (“Tractebel”), an overseas business cooperation company and transferred its 33.25 million shares in Glow Company Limited (formerly: H-Power Company Limited) (“Glow”), an associated company, to Tractebel. All remunerations from such transaction were funded to Glow for Bowin Power Plant Project development under the condition of conversion into share capital of such company in the future.

The decrease in the Company’s interest in Glow from 49.99% to 24.99% and Baht 46.03 million loss are results of the above transaction.

Restructuring Agreement Later in 2001, the Company entered into a restructuring agreement with Tractebel as resolved by the 3/2001 Board of Directors' Meeting held on November 30, 2001. According to the agreement condition, the Company shall sell to Tractebel the whole amount of loan to Glow and a part of the proceeds shall be used to purchase shares of Bowin Power Company Limited and to make payments for the shares of Glow for the portion not yet fully paid.

NOTE 5 - CASH AND CASH EQUIVALENTS

As at December 31, cash and cash equivalents consisted of:

(Amounts:Baht) Consolidated The Company

2001 2000 2001 2000 Cash on hand and at banks 110,095,240.80 97,703,036.61 9,421,079.91 4,862,865.74 Short-term investments - time deposits 45,862,010.17 46,800,300.04 546,145.54 2,489,663.54 Less Cash at banks pledged as collateral (46,897,628.56) (55,768,536.40) (546,145.54) (5,438,084.69) Cash and Cash Equivalents, net 109,059,622.41 88,734,800.25 9,421,079.91 (1,914,444.59)

NOTE 6 - DEPOSITS FOR INVESTMENT

H-International (BVI) Company Limited

Deposits for investment as at December 31, 2001 represent deposits with an overseas investment adviser in the amount of USD 5.5 million under the Non-Discretionary Investment Advisory Agreement dated September 18, 2001, which aim at investment in assets and investments overseas.

According to the agreement condition, the investment adviser shall provide investment advisory service and act as representative of the Company to enter into transactions associated with assets as assigned by the Company. The Company has commitment to pay the investment advisory fee on a yearly basis.

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NOTE 7 - SHORT-TERM INVESTMENTS As at December 31, short-term investments consisted of:

(Amounts:Baht) Consolidated The Company 2001 2000 2001 2000

Time deposits 45,862,010.17 46,800,300.04 546,145.54 2,489,663.54 Current investments classified as available-for-sale securities - Equity securities - Nakornthai Strip Mill PCL. 35,000,000.00 35,000,000.00 35,000,000.00 35,000,000.00 - N.T.S. Steel Group PCL. 3,053,680.00 3,053,680.00 3,053,680.00 3,053,680.00 - Other companies and unit trusts 281,120.00 261,820.00 281,120.00 261,820.00 38,334,800.00 38,315,500.00 38,334,800.00 38,315,500.00 Less Allowance for revaluation of investments 343.20 (21,476.80) 343.20 (21,476.80) Accumulated impairment loss on investments (38,053,680.00) (38,053,680.00) (38,053,680.00) (38,053,680.00) Current Investments, net 281,463.20 240,343.20 281,463.20 240,343.20 Total Short-term Investments, net 46,143,473.37 47,040,643.24 827,608.74 2,730,006.74

NOTE 8 - ACCOUNTS RECEIVABLE

As at December 31, accounts receivable consisted of:


2001 2000 2001 2000 - Land sale contracts receivable Land sale contracts 588,557,742.00 693,977,180.00 3,487,425.00 3,487,425.00 Less Installments received (506,757,435.17) (573,283,531.50) (2,152,293.25) (1,700,000.00) Installments receivable 81,800,306.83 120,693,648.50 1,335,131.75 1,787,425.00 Less Deferred income (17,283,369.12) (34,873,237.19) - - Land Sale Contracts Receivable, net 64,516,937.71 85,820,411.31 1,335,131.75 1,787,425.00

- Service receivables Accrued service income 42,783,482.01 23,222,943.53 6,693,280.07 5,525,626.54 Less Allowance for doubtful accounts (12,639,062.01) (8,544,093.38) (5,426,844.55) (3,722,048.48) Service Receivables, net 30,144,420.00 14,678,850.15 1,266,435.52 1,803,578.06 Accounts Receivable, net 94,661,357.71 100,499,261.46 2,601,567.27 3,591,003.06

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Accounts receivable (continued)

As at December 31, 2001, installments receivable and accrued service income classified by aging are as follows: (Amounts:Baht)

Consolidated The Company Installments receivable Undue installments 65,565,175.08 100,000.00 Less than 3 months 300,000.00 300,000.00 Over 3 months to 12 months 847,706.75 847,706.75 Over 12 months - - Installments paid on date of transfer of title deed 15,087,425.00 87,425.00 Total Installments Receivable 81,800,306.83 1,335,131.75

Accrued service income

Less than 3 months 30,999,058.73 2,114,142.27 Over 3 months to 6 months 1,658,629.34 265,932.48 Over 6 months to 12 months 1,445,622.50 422,307.66 Over 12 months 8,680,171.44 3,890,897.66 42,783,482.01 6,693,280.07 Less Allowance for doubtful accounts (12,639,062.01) (5,426,844.55) Service Receivables, net 30,144,420.00 1,266,435.52

NOTE 9 - COST OF REAL ESTATE DEVELOPMENTS

As at December 31, cost of real estate developments consisted of:


2001 2000 2001 2000 Land cost - under development 2,743,483,013.06 2,734,943,807.49 850,138,396.25 850,138,396.25 Development project costs 4,583,426,163.66 4,344,739,704.07 1,011,027,781.54 1,117,452,735.84 Interest capitalised 1,795,803,915.78 1,754,709,732.51 654,411,655.58 654,411,655.58 Additional utility cost 7,053,939.15 10,615,481.83 7,053,939.15 10,615,481.83 Advance for construction costs 7,418,663.13 - - - 9,137,185,694.78 8,845,008,725.90 2,522,631,772.52 2,632,618,269.50

Less Accumulated costs transferred to cost of land sales (6,252,139,293.55) (5,949,306,433.63) (1,714,174,131.42) (1,728,678,288.09)

Accumulated costs transferred to be assets for rent (346,348,315.83) (226,979,317.96) (107,472,144.48) (107,472,144.48) Accumulated costs transferred to pay the Industrial Estate Authority of Thailand (137,596,881.51) - (137,596,881.51) - 2,401,101,203.89 2,668,722,974.31 563,388,615.11 796,467,836.93 Less Loss on projects revaluation - - - - Cost of Real Estate Developments, net 2,401,101,203.89 2,668,722,974.31 563,388,615.11 796,467,836.93

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Cost of real estate developments (continued)

Hemaraj Land and Development Public Company Limited Eastern Industrial Estate Company Limited Eastern Seaboard Industrial Estate (Rayong) Company Limited

Valuation Stated in the Financial Statements Cost of real estate developments is stated at the lower of aggregate cost and net realisable value for which during the year 1999, the Company and the 2 subsidiaries had obtained appraisal by an appraisal firm and had recognised loss from appraisal in the statements of income. Subsequently, during the year 2000, the cost of real estate developments has been re-appraised which cause the higher appraised value than the previous appraised value.

Obligation of Assets as at December 31, 2001 The majority of land in the projects of the Company and the 2 subsidiaries has been mortgaged as collateral for loans from local financial institutions and the other part has been mortgaged as collateral for the issue of the US$ 19.2 million Guaranteed Bonds of an overseas subsidiary company.

Capitalisation of Borrowing Costs Consolidated For the years ended December 31, 2001 and 2000, interest expenses are capitalised to the cost of real estate developments in the approximate amounts of Baht 41.09 million and Baht 33.39 million, respectively.

The Company The Company has ceased interest capitalisation since January 1, 1999.

Assets Transfer for Debt Repayment (Hemaraj Land and Development Public Company Limited) During 2001, the Company transferred the land in its industrial estate with the cost of Baht 137.60 million (the fair value of Baht 222.41 million) to the Industrial Estate Authority of Thailand to pay debts of the Company and a subsidiary company and as a fund in accordance with the amendment to the joint operation agreements dated October 31, 2001 as disclosed in Note 15 and Note 30 to the financial statements.

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NOTE 10 - INVESTMENTS AND LOANS

As at December 31, investments and loans consisted of:


2001 2000 2001 2000 Investments and loans - related parties, consisted of: - Investments Investments in subsidiary and associated companies 30,947,427.71 329,540,679.82 2,283,081,208.73 2,590,666,396.15 General investments in related companies 76,800,026.00 76,800,026.00 75,300,000.00 75,300,000.00 107,747,453.71 406,340,705.82 2,358,381,208.73 2,665,966,396.15 Less Accumulated impairment loss on investments (54,105,000.00) (54,105,000.00) (54,105,000.00) (54,105,000.00) Total Investments, net 53,642,453.71 352,235,705.82 2,304,276,208.73 2,611,861,396.15

- Loans and accrued interest income Subsidiary companies - - 280,277,307.91 183,060,054.08 Associated companies - 803,012,101.70 - 803,012,101.70 Related companies 434,302,590.35 32,864,273.62 412,793,412.26 11,355,095.53 434,302,590.35 835,876,375.32 693,070,720.17 997,427,251.31 Less Allowance for doubtful accounts (32,864,273.62) (32,864,273.62) (11,355,095.53) (11,355,095.53) Total Loans, net 401,438,316.73 803,012,101.70 681,715,624.64 986,072,155.78 Total Investments and Loans - Related Parties, net 455,080,770.44 1,155,247,807.52 2,985,991,833.37 3,597,933,551.93

Investments in other company General investments in equity securities 1,000,000.00 1,000,000.00 - - Total Investments in Other Company 1,000,000.00 1,000,000.00 - - Total Investments and Loans 456,080,770.44 1,156,247,807.52 2,985,991,833.37 3,597,933,551.93

Details of investments in subsidiary, associated and related companies are shown in Note 4 to the financial statements.

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NOTE 11 - LEASEHOLD LAND AND LAND HELD FOR COMMERCIAL PURPOSES As at December 31, leasehold land and land held for commercial purposes consisted of:

(Amounts:Baht) Consolidated The Company 2001 2000 2001 2000 Land bank 10,201,000.00 10,201,000.00 10,201,000.00 10,201,000.00 Land cost of projects suspended from development 1,406,046,811.19 1,406,046,811.19 1,134,937,492.95 1,134,937,492.95 Suspended development project costs 268,526,849.22 271,111,686.04 266,499,451.72 269,511,218.54 Interest capitalized 556,408,618.16 556,408,618.16 556,118,666.11 556,118,666.11 Leasehold land 77,077,105.71 77,077,105.71 77,077,105.71 77,077,105.71 2,318,260,384.28 2,320,845,221.10 2,044,833,716.49 2,047,845,483.31 Less Loss on projects revaluation (561,629,560.93) (561,629,560.93) (561,629,560.93) (561,629,560.93) Leasehold Land and Land Held for Commercial Purposes, net 1,756,630,823.35 1,759,215,660.17 1,483,204,155.56 1,486,215,922.38

Hemaraj Land and Development Public Company Limited and Eastern Industrial Estate Company Limited

Valuation Stated in the Financial Statements Leasehold land and land held for commercial purposes is stated at the lower of aggregate cost and net realisable value for which during the year 1999, the Company and the subsidiary had obtained appraisal by an appraisal firm and had recognised loss from appraisal in the statements of income. Subsequently, during the year 2000, leasehold land and land held for commercial purposes has been re-appraised which cause the higher appraised value than the previous appraised value.

Obligation of Assets as at December 31, 2001 The majority of land in the projects of the Company and the subsidiary has been mortgaged as collateral for loans from local financial institutions and the other part has been mortgaged as collateral for the issue of the US$ 19.2 million Guaranteed Bonds of an overseas subsidiary company.

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NOTE 12 - ASSETS FOR RENT

As at December 31, 2001 and 2000, assets for rent consisted of: (Amounts:Million Baht) Changes in Cost Changes in Accumulated Depreciation Net Book Value Beginning Addition Sale/Written off Transfer Ending Beginning Depreciation Sale/Written off Transfer Ending Beginning Ending

Consolidated Land 45.44* - - 19.61 65.05* - - - - - 45.44 65.05 Building 181.96* 0.18 - 98.45 280.59* 11.80 10.27 - - 22.07 170.16 258.52 Pipe rack 102.51 - - 14.01 116.52 20.63 7.77 - - 28.40 81.88 88.12 Total 329.91 0.18 - 132.07 462.16 32.43 18.04 - - 50.47 297.48 411.69

The Company Land 25.20* - - - 25.20* - - - - - 25.20 25.20 Building 82.27* - - - 82.27* 7.23 4.13 - - 11.36 75.04 70.91 Total 107.47 - - - 107.47 7.23 4.13 - - 11.36 100.24 96.11

Consolidated - As at December 31, 2001 and 2000, portions of land and building for rent, which have been transferred from the cost of real estate developments, were in the accumulated amounts of Baht

345.04* million and Baht 226.98* million, respectively. - Depreciation of building and pipe rack for the year ended December 31, 2001 is included in cost of services. The Company - As at December 31, 2001 and 2000, portion of land and building for rent, which has been transferred from the cost of real estate developments, was in the accumulated amount of Baht 107.47*

million. - Depreciation of building for the year ended December 31, 2001 is included in cost of services.

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NOTE 13 - PROPERTY, PLANT AND EQUIPMENT As at December 31, 2001 and 2000, property, plant and equipment consisted of: (Amounts:Million Baht)

Changes in Cost Changes in Accumulated Depreciation Net Book Value Costs of Fully Beginning Addition Sale Transfer Ending Beginning Depreciation Sale Transfer Ending Beginning Ending Depreciated Assets Consolidated Land 17.28 - - - 17.28 - - - - - 17.28 17.28* - Building and structure 202.41 1.02 - - 203.43 32.83 9.42 - - 42.25 169.58 161.18* 0.16 Building improvements 1.42 2.37 - - 3.79 1.42 0.06 - - 1.48 - 2.31 1.42 Office equipment and furniture and fixture 58.61 10.56 (0.66) - 68.51 41.09 5.76 - - 46.85 17.52 21.66 33.04 Vehicles 28.58 11.03 (5.21) - 34.40 15.81 5.08 (4.05) - 16.84 12.77 17.56 10.27 Construction in progress 24.31 0.32 - (14.01) 10.62 - - - - - 24.31 10.62** - Raw water pipe 3.66 - - - 3.66 0.64 0.24 - - 0.88 3.02 2.78 -

Total 336.27 25.30 (5.87) (14.01) 341.69 91.79 20.56 (4.05) - 108.30 244.48 233.39 44.89 Less Reserve for impairment loss of assets - (10.17)** Less Reserve for possible loss of title

of land and office building - (36.96)* Property, Plant and Equipment, net 244.48 186.26

The Company Land 2.93 - - - 2.93 - - - - - 2.93 2.93* - Building and structure 45.35 - - - 45.35 9.70 1.62 - - 11.32 35.65 34.03* 0.16 Building improvements 1.42 0.14 - - 1.56 1.42 - - - 1.42 - 0.14 1.42 Office equipment and furniture and fixture 36.48 1.40 (0.66) - 37.22 27.23 2.39 - - 29.62 9.25 7.60 24.43 Vehicles 11.96 6.16 (0.42) - 17.70 4.61 2.88 (0.40) - 7.09 7.35 10.61 1.98 Construction in progress 0.86 - - - 0.86 - - - - - 0.86 0.86** - Raw water pipe 3.66 - - - 3.66 0.64 0.24 - - 0.88 3.02 2.78 - Total 102.66 7.70 (1.08) - 109.28 43.60 7.13 (0.40) - 50.33 59.06 58.95 27.99 Less Reserve for impairment loss of assets - (0.72)** Less Reserve for possible loss of title

of land and office building - (36.96)* Property, Plant and Equipment, net 59.06 21.27

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Property, plant and equipment (continued) Consolidated For the year ended December 31, 2001, depreciation of building and equipment are included in selling and administrative expenses and cost of services in the amounts of Baht 13.36 million and Baht 7.20 million, respectively. The Company For the year ended December 31, 2001, Depreciation of building and equipment are included in selling and administrative expenses and cost of services in the amounts of Baht 6.85 million and Baht 0.28 million, respectively. Hemaraj Land and Development Public Company Limited During 2001, the Company has provided reserve for loss of the possessory right over the land and office building in the amount of Baht 25.18 million as the management of the Company view that the Company may not receive transfer of such possessory right. The Company has already instituted a case to the court.

NOTE 14 - ADVANCES TO THE PROVINCIAL ELECTRICITY AUTHORITY

As at December 31, advances to the Provincial Electricity Authority in the consolidated financial statements consisted of:

(Amounts:Baht) 2001 2000

Eastern Industrial Estate Company Limited 7,413,611.12 7,431,711.12 Eastern Seaboard Industrial Estate (Rayong) Company Limited 7,358,760.90 48,014,760.90 Total 14,772,372.02 55,446,472.02

The 2 companies had advanced to the Provincial Electricity Authority for transmission line construction costs supporting electricity in their industrial estates under the condition of recovering those costs without interest, by way of receiving installments in the period not less than 3 years from the date of using the line to transmit electricity to the industrial estates. The installments are being made at the maximum rate of 30% of monthly electricity fees that the Provincial Electricity Authority charges to entrepreneurs in the industrial estates.

NOTE 15 - SINKING FUND As at December 31, sinking fund in the consolidated and the Company’s financial statements consisted of: (Amounts:Baht)

2001 2000 Hemaraj Land and Development Public Company Limited 147,485,209.96 69,048,180.80 Eastern Industrial Estate Company Limited 76,189,031.83 29,418,964.35 Eastern Seaboard Industrial Estate (Rayong) Company Limited 136,660,511.03 123,132,760.01 Total 360,334,752.82 221,599,905.16

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Hemaraj Land and Development Public Company Limited and Eastern Industrial Estate Company Limited As disclosed in Note 30 to the financial statements, both companies entered into the amendment to the joint operation agreements with the Industrial Estate Authority of Thailand (“IAET”) dated October 31, 2001, specifying that both companies shall provide a fund for the maintenance and construction of utilities system and facilities in the industrial estates (“the Fund”). Both companies had transferred the land and cash to the Fund in the amount as stated in the agreements and transferred the right of disbursement to IEAT for use according to the objectives. Income or returns arising from the Fund will be contributed to the Fund. Eastern Seaboard Industrial Estate (Rayong) Company Limited The company has entered into the joint operation agreements with the IEAT dated September 4, 1996 for the Eastern Seaboard (Rayong) Industrial Estate development project and dated February 28, 1997 for the expansion area. According to the conditions of such agreements, the company was obliged to establish a fund by way of opening, and transferring a withdrawal right to the IEAT, a time deposit with a commercial bank in the name of the fund for maintaining and constructing utility systems in its industrial estate. All benefits arising have been contributed to the fund.

NOTE 16 - GOODWILL Goodwill represents the excess of acquisition cost over net assets of investments in subsidiary companies at the date of acquisition in the amount of Baht 15,921,431.39, and is being amortised over a ten-year period as from September 1991.

NOTE 17 - LOANS UNDER DEBT RESTRUCTURING NEGOTIATION PLAN

Hemaraj Land and Development Public Company Limited As at December 31, 2001, loans under debt restructuring negotiation plan consisted of: - Long-term loan in the amount of Baht 130.82 million, which had previously been restructured on March 31, 1999

with a financial institution that was subsequently closed down in accordance with a notice of the Ministry of Finance. Subsequent to the above event, the Company has ceased the payments of interest payable. As a result, the whole amount of loan is subject to immediate payment in accordance with the condition of the loan restructuring agreement. As at December 31, 2001, interest payable is in the amount of Baht 125.76 million. Currently, the loan is under supervision of the Financial Institutions Development Fund while the Company’s management is planning for debt restructuring negotiations again.

- During 2001, the Company has failed to pay the principal and interest payable of Baht 20 million and Baht 40.21 million, respectively on long-term loans from a commercial bank with the principal of Baht 404.55 million, which were previously restructured on September 30, 1998 and September 28, 2000. As a result, the whole amount of loans is subject to immediate payment in accordance with the condition of the loan restructuring agreement. Currently, the Company’s management are negotiating for the extension of debt repayments with the bank, the results of which have not yet been determined.

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NOTE 18 - CONVERTIBLE BONDS

Hemaraj Land and Development Public Company Limited The US$ 60 million convertible bonds, issued on September 9, 1993, bear interest at the rate of 3.5 percent per annum, net of withholding tax, payable annually commencing on September 9, 1994, and will be redeemed on September 9, 2003.

On September 10, 1993, a resolution was passed by the Board of Directors Meeting No.11/1993 to approve the Company to manage funds from convertible bonds in the amount of Baht 1,512.18 million for developing land for commercial purposes and to record the interest from convertible bonds as a part of land development cost.

Conversion and Option for Redemption As from December 9, 1993 up to August 9, 2003, each convertible bond may be converted into 135 fully paid ordinary shares of the Company. Such conversion rate may be changed as a result of the issue of warrants and the offering of ordinary shares as disclosed in Note 25 and Note 32 to the financial statements, respectively. At present, the Company is under process of giving notice to the trustee and the bondholders for the new conversion rate.

The convertible bonds may be redeemed, in whole or in part, by the Company as from September 9, 1996 at varying percentages of the principal amount from 109.28 percent to 116.50 percent. At the option of the bondholders, the Company must redeem such convertible bonds on September 9, 1998 at 116.50 percent of principal amount.

Repurchase of Convertible Bonds During 1998 and 1997, an overseas subsidiary repurchased part of the Company’s convertible bonds. According to the Bond prospectus, the repurchased convertible bonds shall be cancelled forthwith. As at December 31, 2001 and 2000, repurchased convertible bonds were in the approximate amounts of US$ 30.34 million, which were shown as loan from repurchase of convertible bonds.

Remaining Convertible Bonds and Provision for Convertible Bond Redemption As at December 31, 2001 and 2000, the remaining convertible bonds were in the amount of US$ 24.02 million (Baht 605.25 million). The Company has based the provision for redemption of the remaining convertible bonds. As at December 31, 2001 and 2000, the Company had reserved provision for convertible bond redemption in the approximate amounts of Baht 666.84 million and Baht 640.46 million, respectively, and included these amounts within convertible bonds. Default in Convertible Bond Redemption and Payment of Interest The Company failed to redeem the convertible bonds which the bondholders sought redemption in accordance with their rights on September 9, 1998, and failed to meet payments of interest on convertible bonds which were due on September 9, 2001, 2000, 1999 and 1998 in the total amount of US$ 3.96 million (Baht 175.46 million). As at December 31, 2001, accrued interest on convertible bonds totaled US$ 4.27 million (Baht 189.28 million). To date, the Company’s management have been in the process of negotiation to restructure debts, the results of which has not yet been determined. On April 28, 2000, the resolution was passed by the Annual General Meeting of Shareholders giving approval for the Company to change some conditions of convertible bonds for convenience of debt restructuring, based on the result of negotiation for debt restructuring.

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NOTE 19 - INCOME RECEIVED IN ADVANCE

As at December 31, income received in advance consisted of: (Amounts:Baht)

Consolidated The Company 2001 2000 2001 2000 Land sale contracts receivable Land sale contracts 7,829,931,177.93 7,133,496,397.93 111,087,500.00 111,087,500.00 Less Installments received (7,739,937,982.01) (7,127,284,595.93) (111,087,500.00) (111,087,500.00) Less Deferred income (224,740,771.62) (184,292,046.29) (1,627,578.38) (1,829,778.89) Income Received in Advance (134,747,575.70) (178,080,244.29) (1,627,578.38) (1,829,778.89)

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NOTE 20 - LOANS FROM DIRECTORS AND RELATED PERSONS Eastern Seaboard Industrial Estate (Rayong) Company Limited As at December 31, loans from directors and related persons consisted of: Credit Line Credit Conditions Interest Payment Balances (Million Baht) Period Term Total Principal Repayment Period Rate (Million Baht) Installments (%) 2001 2000

a. Loan from director in term November 2000 MLR+1% of of promissory note with To Thai Farmers grace period of 1 year 80.00 April 2003 Quarterly 4 Monthly Bank Plc. 80.00 24.00

b. Loan from 3 shareholders in term of

promissory note with grace period of 1 year - Under the agreement dated 110.00 November 2000 Quarterly 4 Monthly MLR+1% of 110.00 39.00

October 31, 2000 To Thai Farmers April 2003 Bank Plc.

- Under the agreement dated 30.00 May 2001 Quarterly 12 Monthly MLR+1% of 30.00 -

May 2, 2001 To Thai Farmers July 2005 Bank Plc.

- Under the agreement 65.00 August 2001 Quarterly 12 Monthly MLR+1% of 65.00 -

Dated May 3, 2001 To Thai Farmers September 2005 Bank Plc. 285.00 285.00 63.00 Less Current portion of loan from

directors and related persons (102.77) - Loans from Director and Related Persons, net

Total of the first 3 periods, which approximates 25% of principal of each promissory note will, after grace period, be repaid equally for each period and the remaining will be repaid in the last period. Total of the first 3 periods, which approximates 25% of principal of each promissory note will, after grace period, be repaid equally for each period and the remaining will be repaid in the last period. Approximately 8.33% of principal of each promissory note will be equally repaid for each period, after grace period Approximately 8.33% of principal of each promissory note will be equally repaid for each period, after grace period.

182.23 63.00

The Company obtained loans from its director and related persons for financing the construction of micro pre-fabricated factories and mini pre-fabricated factories for sale and rent. Part of land and factories has been mortgaged as collateral for such loans.

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NOTE 21 - LONG-TERM LIABILITIES As at December 31, long-term liabilities consisted of: (Amounts:Million Baht) Current Repayment Condition Balances Credit Line Credit Principal Repayment Interest Payment Consolidated The Company (Million Baht) Period Installment Term Total Term Rate 2001 2000 2001 2000 Amount Installments (%) (Million Baht)

Hemaraj Land and Development Public Company Limited Loans from 2 local banks and 3 local finance companies 1) Loan with credit line of Baht 1,200 million, to be repaid within 3 years as from September 28, 1994. Payment, when no mortgage, is at the rate of 60% of transferred land price. The interest rate is MLR+1% per annum. According to the results of debt restructuring on September 30, 1998, the credit line is changed to Baht 228.25 million and extended to be repaid in 4 years within Payment is made, when no mortgage, September 28, 2001. Payment is made under the old policy. at the rate of 65% of the transferred The interest rate is MLR per annum, payable monthly. September 28, 2000 land price and at the minimum annual Subsequently, on September 28, 2000 the latest debt to rate as specified in the agreement, restructuring negotiation is reached. 107.55 December 30, 2005 commencing in 2001 Monthly MLR 107.55 107.55 107.55 107.55 2) Loan with credit line of Baht 297 million and grace period of 18 months, which changed from promissory note from debt restructuring on September 30, 1998, to be repaid within Payment is made, when no mortgage, 14 quarters from June, 2000 to September, 2003. at the rate of 65% of the transferred The interest rate is MLR per annum, payable monthly. September 28, 2000 land price and at the minimum annual Subsequently, on September 28, 2000 the latest debt to rate as specified in the agreement, restructuring negotiation is reached. 297.00 December 30, 2005 commencing in 2001 Monthly MLR 297.00 297.00 297.00 297.00 3) Loan in the amount of Baht 150 million, to be repaid within 12 quarters, in 3 years from 1996. The interest rate is MLR+1% per annum. According to the results of debt restructuring on December 14, 1998, the credit line is changed to Baht 75 million and extended to be repaid in 5 years within 10.00 December 2003, commencing on December 14, 2001. November 29, 2001 Commencing Subsequently, on November 29, 2001, the latest debt to in December restructuring negotiation is reached. 75.00 September 30, 2004 2002 Quarterly 8 Monthly MLR 75.00 75.00 75.00 75.00

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Long-term liabilities (continued) (Amounts:Million Baht) Current Repayment Condition Balances Credit Line Credit Principal Repayment Interest Payment Consolidated The Company (Million Baht) Period Installment Term Total Term Rate 2001 2000 2001 2000 Amount Installments (%) (Million Baht)

4) Loan with credit line of Baht 100 million and grace period of 36 months, which was changed from promissory note, is to be repaid within December, 2003 commencing on December 14, 2001. November 29, 2001 12.50 Subsequently, on November 29, 2001, the latest debt to Commencing in restructuring negotiation is reached. 100.00 September 30, 2004 December 2002 Quarterly 8 Monthly MLR 100.00 100.00 100.00 100.00 5) Loan in the amount of Baht 110 million, to be repaid within 20 months as from February 13, 1996. The interest rate is MLR+0.5% per annum. According to the results of debt restructuring on June 24, 1998, the principal was extended to be repaid on December 20, 1998 and the interest rate was changed to MLR per annum. Subsequently, according to the results of debt restructuring on March 31, 1999, the principal is changed to Baht 130.82 million, of which Baht 20.82 million changed from March 31, 1999 liability arising from guarantee of promissory note. to Minimum The first installment due on January 31, 2001. 130.82 December 28, 2001 11.00 Monthly 12 Monthly MLR+1 to 1.5 130.82 130.82 130.82 130.82 6) Loan under the Conditional Debt Release Agreement dated July 31, 2000, the original principal of Baht 172 million is to be repaid totaling Baht 86.93 million, of which Baht 12.62 million was repaid at beginning of the agreement. The remaining July 31, 2000 Baht 74.31 million is to be repaid as described in current to Minimum repayment condition. The first installment due on July 31, 2000. 172.00 December 31, 2002 2.87 Monthly 30 Monthly 11.75 117.42 146.21 117.42 146.21 Total 882.37 827.79 856.58 827.79 856.58 Eastern Industrial Estate Company Limited Loan from a local bank with credit line of Baht 93 million and grace period of 18 months, which was changed from promissory note from debt restructuring on September 30, 1998, Payment is made, when no mortgage, to be repaid within 6 quarters from June, 2000 to September, 2001. at the rate of 70% of the transferred The interest rate is MLR per annum, payable monthly. February 6, 2002 land price and at the minimum annual Subsequently, on August 30, 2000 and February 6, 2002 the debt to rate as specified in the agreement, restructuring negotiations are reached. 93.00 December 30, 2004 commencing in 2002. Monthly MLR 93.00 93.00 - - Total 93.00 93.00 93.00 - -

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Long-term liabilities (continued) (Amounts:Million Baht) Current Repayment Condition Balances Credit Line Credit Principal Repayment Interest Payment Consolidated The Company (Million Baht) Period Installment Term Total Term Rate 2001 2000 2001 2000 Amount Installments (%) (Million Baht)

Eastern Seaboard Industrial Estate (Rayong) Company Limited Loans from 2 local banks, consisted of: 1) Loan with credit line of Baht 550 million, repayable within March, 2000 Repayable as titles are transferred at 50% March, 2000, subsequently, extended to March 2001. to of land contract price and the outstanding Latest, the repayment term is extended to within March 2003. 550.00 March, 2003 amount repayable within March, 2003. Monthly MLR 160.20 412.66 - - 2) Loan in the amount of Baht 230 million, repayable within July, 2000. Subsequently, it was extended to July, 2001. - - 90.36 - - Total 550.00 160.20 503.02 - - Eastern Pipeline Services Company Limited Loan from a finance company with credit line of Baht 50 million, to be repaid over 72 months from April 30, 1998 to March 31, 2004. The interest rate is MLR+1% per annum, payable monthly. The loan had been put up for sale by FRA. Subsequently, according to the Conditional Debt Release Agreement, which the Company entered into it with a Mutual Fund on July 31, 2000, the original principal is to be repaid totaling Baht 20.57 million, of which Baht 2.90 million was paid at beginning of the agreement. The remaining Baht 17.67 July 31, 2000 million is to be repaid as described in current repayment to Minimum condition. The first installment due on July 31, 2000. 50.00 December 31, 2002 0.68 Monthly 30 Monthly 11.75 23.86 30.71 - - Total 50.00 23.86 30.71 - - Total Long-Term Liabilities 1,575.37 1,104.85 1,483.31 827.79 856.58 Less Portions under debt restructuring negotiation plan (535.37) (130.82) (535.37) (130.82) Less Current portions of long-term liabilities shown under current liabilities (71.54) (177.49) (54.85) (71.29) Long-Term Liabilities, net 497.94 1,175.00 237.57 654.47

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Long-term liabilities (continued) The above liabilities are variously collateralised. Hemaraj Land and Development Public Company Limited - Portions of long-term loans under the Conditional Debt Release Agreement and related interest payable

totaling Baht 162.98 million, which would be forgiven, are to be recognised as revenue in the statement of income upon the completion of debt repayments.

- As at December 31, 2001, long-term loans of the Company under debt restructuring negotiation plan as described in Note 17 to the financial statements represent loans, of which payments of principal and interest were defaulted, and are under the process of negotiating for debt restructuring.

Eastern Pipeline Services Company Limited Portions of long-term loan under the Conditional Debt Release Agreement and related interest payable totaling Baht 32.08 million, which would be forgiven, are to be recognised as revenue in the statement of income upon the completion of debt repayments.

NOTE 22 - GUARANTEED BONDS H-International (BVI) Company Limited On September 25, 1998, a resolution was passed by the Board of Directors Meeting No. 5/1998 to approve the company to issue, in two tranches, US$ 19.2 million Guaranteed Bonds to a foreign commercial bank which had acquired part of the convertible bonds issued by Hemaraj Land and Development Public Company Limited. The principal amounts are US$ 11.5 million for the first tranche and US$ 7.7 million for the second tranche, to be repaid within 2005 in 8 semi-annual installments, with the first installment due on March 31, 2002. The interest rates (net of withholding tax) are 1% per annum and 5% per annum, respectively, payable quarterly as from December 31, 1998. On September 30, 1998, the company issued the first tranche of Guaranteed Bonds in the amount of US$ 11.5 million in the acquisition of 7,700 convertible bonds (US$ 7.7 million) issued by Hemaraj Land and Development Public Company Limited, which were held by the referred bank, at a price of US$ 8.47 million. Subsequently, the company issued the second tranche of Guaranteed Bonds in the amount of US$ 7.7 million for its working capital. Provision for Guaranteed Bond Redemption Provision for Guaranteed Bond redemption is calculated over the period of the Guaranteed Bonds and included in Guaranteed Bonds. As at December 31, 2001 and 2000, provision for Guaranteed Bond redemption were in the amounts of US$ 2.23 million (Baht 98.88 million) and US$ 1.42 million (Baht 61.49 million), respectively. Collateral - Hemaraj Land and Development Public Company Limited has co-operated with 2 related companies to guarantee

the issue of Guaranteed Bonds. These companies have obligations to comply with terms and conditions of the issue of Guaranteed Bonds.

- Investments in ordinary shares and certain land of a related company have been used as collateral for the issue of Guaranteed Bonds.

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Guaranteed bonds (continued)

Other Conditions of Guaranteed Bonds - The Guaranteed Bonds are not capable of being quoted, listed or ordinarily dealt in any stock exchange, over-the-

counter or other organised securities market and may not be transferred to any person other than to a related company of the registered holder.

- The Guaranteed Bonds may be redeemed early in whole or in part and the company is mandated to redeem part of the bonds when the mortgaged land is sold. The redemption price is being calculated to give a yield of 7% - 9% per annum from the issuing date to redemption date.

As at December 31, portions of the Guaranteed Bonds classified by redemption period after such dates to maturity are as follows: (Amounts:Million Baht) 2001 2000 Redemption Period Redemption Price Book Value Redemption Price Book Value Within 1 year 222.05 213.31 21.19 20.11 Over 1 year to 2 years 226.24 201.32 217.26 193.19 Over 2 years to maturity 436.25 346.42 648.23 496.10 Total 884.54 761.05 886.68 709.40

NOTE 23 - RESERVE FOR POSSIBLE LOSS FROM LAWSUITS AND RESERVE FOR POSSIBLE LOSS FROM PLEDGE OF SECURITIES

Hemaraj Land and Development Public Company Limited

- A lawsuit relating to the obligation under guarantee, filed against the Company requiring it to indemnify the amount of Baht 128 million, has been under consideration of the primary court. The Company has reserved the maximum loss that may arise from this case in the financial statements.

- On June 7, 2000, a resolution was passed at the Board of Directors’ Meeting No. 4/2000 approving the Company to provide reserve for possible loss from pledge of securities in the total amount of Baht 235.50 million, according to the securities pledged agreements, against loans to 2 related companies with the credit lines of Baht 105 million and Baht 130.50 million, based on the consideration regarding failure to make loan repayment and substantial doubt about their ability to continue as a going concern.

Subsequently, in the third quarter of 2001, the Company provided an additional reserve in the amount of Baht 158.40 million, based on the consideration regarding the lawsuit, which has been filed against the Company as a co-borrower, requiring it to indemnify the total amount of Baht 484.10 million. However, the Company’s management believes that the maximum loss that the Company would be responsible for would not exceed said reserve.

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NOTE 24 - SHARE CAPITAL

The Extraordinary General Meeting of Shareholders No. 1/2001 of Hemaraj Land and Development Public Company Limited held on December 28, 2001 approved the Company to proceed its authorised share capital summarised as follows:

- Decrease authorised share capital, from authorised share capital of Baht 3,270,000,000 to authorised share capital of Baht 2,252,967,250, consisting of 225,296,725 ordinary shares of Baht 10 par value, by way of revoking 101,703,275 unissued ordinary shares (including ordinary shares allocated to accommodate the exercise of the right of convertible bonds of 51,234,425 shares, with the remaining 13,000,000 ordinary shares to accommodate the exercise of right of convertible bonds) of Baht 10 par value, amounting to Baht 1,017,032,750, and to adapt Clause 4 of the Company’s Memorandum of Association to conform with this resolution. The Company registered the decrease of its authorised share capital with the Ministry of Commerce on January 2, 2002.

- Increase authorised share capital by Baht 7,747,032,750, from authorised share capital of Baht 2,252,967,250 to authorised share capital of Baht 10,000,000,000, divided into 1,000,000,000 ordinary shares of Baht 10 par value, by issuing authorised 774,703,275 ordinary shares of Baht 10 par value, and to adapt Clause 4 of the Company’s Memorandum of Association to conform with the resolution. The Company registered the increase of its authorised share capital with the Ministry of Commerce on January 3, 2002.

- Allocation of the increased ordinary shares is as follows: 1. 283,163,108 shares for offering to the existing shareholders at the rate of 1 existing share to 4 new shares of

Baht 1 each; 2. 159,782,075 shares for offering via private placement in accordance with the Notification of the Securities

and Exchange Commission No. Kor Jor. 12/2543 regarding request for permission and permission to offer newly issued shares at the offering price of not lower than Baht 3; and

3. 331,758,092 shares to accommodate the exercise of the right of warrant holders to purchase ordinary shares in addition to the existing allocation. The ordinary shares allocated to accommodate the exercise of the right of warrant holders to purchase ordinary shares total 473,264,040 shares.

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NOTE 25 - WARRANTS

Hemaraj Land and Development Public Company Limited

- Issue of Warrants and Registering as Listed Securities According to the resolutions of the Annual General Meeting of Shareholders dated April 30, 1999, the Company issued 141,531,150 warrants to the existing shareholders and specific investors, at the unit price of Baht 0.1. Total cash received from offer of warrants was in the approximate amount of Baht 14.15 million. The Company registered its warrants with the Stock Exchange of Thailand (“SET”) as listed securities and the warrants were approved by the SET to be listed securities from December 15, 1999 onwards.

- Condition of Warrants Old Condition Warrants are to be exercised within the period of 5 years from the issuing date, in the ratio of 1 new share for each warrant, at a price of Baht 10 per share.

Revised Condition The Extraordinary General Meeting of Shareholders No. 1/2001 of the Company held on December 28, 2001 approved the extension of exercised period to 10 years from the issuing date, which will end within September 30, 2009 and the adjustment of exercised price to Baht 3 per share.

NOTE 26 - DIRECTORS’ REMUNERATION AND PERSONNEL EXPENSES

For the years ended December 31, directors’ remuneration included in the consolidated and the Company’s financial statements consisted of:

(Amounts:Million Baht) 2001 2000

Hemaraj Land and Development Public Company Limited 31.60 16.98 Eastern Seaboard Industrial Estate (Rayong) Company Limited 4.35 3.08 H-International (BVI) Company Limited 50.41 31.01 Total 86.36 51.07

For the years ended December 31, personnel expenses included in selling and administrative expenses and cost of services in the statements of income are as follows:

(Amounts:Million Baht) 2001 2000

Consolidated statements of income 63.43 60.97 The Company’s statements of income 26.27 23.75

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NOTE 27 - LOSS PER SHARE COMPUTATION

For the years ended December 31, loss per share computation in the consolidated and the Company’s financial statements consisted of:

2001 2000 Net Loss for the Year Number Loss per Share Net Loss for the Year Number Loss per Share (Baht) of Shares (Baht) (Baht) of Shares (Baht) (Share) (Share)

Basic loss per share Net loss attributable to ordinary shareholders (493,229,484.26) 70,790,777 (6.97) (851,997,810.30) 70,781,772 (12.04)

The effect of potential ordinary shares Convertible bonds - Adding back the expenses that will be saved on

the conversion of convertible bonds (net of income tax 25% for 2001 and 30% for 2000) 54,950,158.35 154,340,558.41

- Increase in ordinary shares under conversion of convertible bonds** 3,254,033 3,254,033

Warrants - Number of shares that would have been issued

for no consideration as the average fair value of ordinary shares exceeds the exercise price 280,095,044 32,150,501

Loss per share after adjustment by the effect of potential ordinary shares

Net loss attributable to ordinary shareholders in case of convertible bonds being converted

and all warrants being exercised (438,279,325.91) 354,139,854 (1.24) (697,657,251.89) 106,186,306 (6.57)

**Conversion ratio may be changed as disclosed in Note 18 to the financial statements.

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For the years ended December 31, 2001 and 2000, loss per share after adjustment by the effect of potential ordinary shares is not shown in the statements of income since the amounts resulting from the effect of potential ordinary shares are lower than basic loss per share.

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NOTE 28 - PLEDGED ASSETS

As at December 31, 2001, pledged assets are as follows:

Hemaraj Land and Development Public Company Limited - Time deposits of approximately Baht 0.54 million have been pledged to local banks against letters of guarantee

issued to the Communication Authority of Thailand, the Provincial Electricity Authority, the Industrial Estate Authority of Thailand and other companies.

- Investments in 10 million ordinary shares of Nakornthai Strip Mill Public Company Limited, a related company, have been used as collateral for loans from a financial institution.

- Investments in 9,999,994 ordinary shares of Eastern Industrial Estate Company Limited, a subsidiary company, have been used as collateral for the issue of Guaranteed Bonds of an overseas subsidiary company.

- Investments in 15 million ordinary shares of Sriracha Harbor Public Company Limited, which is a related company, have been used as collateral for loans obtained by 2 related companies from financial institutions.

- The majority of land and attachments have been mortgaged as collateral for loans from local financial institutions.

Eastern Industrial Estate Company Limited - Time deposit of approximately Baht 19.25 million has been pledged to local banks against security given for

performance under sale contracts and utility construction.

- All of the company’s land for development and the majority of its land held for commercial purposes have been mortgaged as collateral for long-term loans from a local commercial bank and the issue of Guaranteed Bonds of an overseas related company.

- Investments in 599,993 ordinary shares of Eastern Pipeline Services Company Limited, a subsidiary company, have been used as collateral for a loan issued by a financial institution to that subsidiary.

Eastern Seaboard Industrial Estate (Rayong) Company Limited - Time deposit of approximately Baht 25.96 million has been pledged to local banks against security given for

performance under sale contracts and utility services.

- The majority of the company’s land has been mortgaged as collateral for overdrafts and loan from 2 commercial banks.

- Land, mini and micro pre-fabricated factories of the company have been mortgaged as collateral for loans from directors and related persons.

H-International (BVI) Company Limited - Saving deposit of approximately US$ 0.03 million (Baht 1.14 million) has been reserved for payment of

Guaranteed Bond interest.

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NOTE 29 - PROVIDENT FUND

Hemaraj Land and Development Public Company Limited Eastern Industrial Estate Company Limited Eastern Seaboard Industrial Estate (Rayong) Company Limited Eastern Pipeline Services Company Limited The Company and the 3 subsidiaries jointly established the provident fund under the Provident Fund Act B.E. 2530, named “Hemaraj Provident Fund”, to provide membership for their employees. According to regulations of the fund, members are required to make contributions at the rate of 4% of their monthly salaries while the Company and the subsidiaries will also make contributions at the rate of 4% - 8% of such salaries, depending on the length of work. Members are entitled to the companies’ contributions plus net benefit thereon, depending on their working period.

The provident fund is managed by a commercial bank as the fund manager, and therefore does not appear in the balance sheet.

NOTE 30 - COMMITMENTS

As at December 31, 2001, commitments are as follows:

Hemaraj Land and Development Public Company Limited - The Company has participated in the establishment project of Chonburi Industrial Estate (Bor Win) in Phase 1

and Phase 2 with the Industrial Estate Authority of Thailand ("IEAT") according to the joint operation agreement dated July 5 and December 29, 1989, respectively. Later on October 31, 2001, the Company entered into the amendment to such joint operation agreement with IEAT. The major conditions are summarised as follows:

1. The Company shall provide utilities systems and facilities to the entrepreneurs in the industrial estate with payment of expenses on its participation in the procedures to the IEAT.

2. The Company shall not transfer assets, component part and equipment as well as utilities systems and facilities to the IEAT.

3. The Company shall provide a fund for the maintenance and construction of utilities systems and facilities in the industrial estate ("the Fund").

The Company transferred the land and cash to pay expenses on its participation in the procedures and made transfer to the Fund. The profit from the amendment to the joint operation agreement amounted to Baht 174.34 million.

- The Company and another company (the Co-investor) have jointly invested in 2 associated companies, Glow Company Limited (formerly: H-Power Company Limited) and Bowin Power Company Limited. Subsequently, the Co-investor has entered into an agreement with the financial institutions, which are the lenders, in order to guarantee the Company in proportionate support of the capital increase of these two associated companies, according to the condition of the Financial Agreement. The Company has also entered into the Reimbursement Agreement with the Co-Investor whereas it is obliged to reimburse the Co-Investor for guarantee expenses with the condition of providing the Co-Investor options to purchase its investment in share capital of Glow Company Limited, proportionately on unpaid expenses, in case it could not pay such expenses. This may effect the holding of interest in the future, further to the discussion in Note 4 to the financial statements.

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Commitments (continued) Eastern Industrial Estate Company Limited The Company has participation in the establishment project of Eastern Industrial Estate (Map Ta Phut) with the IEAT according to the joint operation agreement dated December 27, 1989. Later on October 31, 2001, the Company entered into the amendment to such cooperation agreement with IEAT. The major conditions are summarized as follows:

1. The Company shall provide utilities systems and facilities to the entrepreneurs in the industrial estates with payment of expenses on its participation in the procedures to the IEAT.

2. The Company shall not transfer assets, component part and equipment as well as utilities systems and facilities to the IEAT.

3. The Company shall provide a fund for the maintenance and construction of utilities systems and facilities in the industrial estate ("the Fund").

The Company transferred the land and cash to pay expenses on its participation in the procedures and made transfer to the Fund. The profit from the amendment to the joint operation agreement amounted to Baht 48.14 million.

Eastern Seaboard Industrial Estate (Rayong) Company Limited - The company has a liability, under a joint-investment agreement with Hemaraj Land and Development

Public Company Limited and another company, to pay commission to Hemaraj Land and Development Public Company Limited based on revenues from sales of land, public utility service providing and lease of factory.

- The company has commitment under construction contracts with 2 contractors to construct mini and micro pre-fabricated factory, phase II, amounting to Baht 48.57 million.

- The company has commitment under construction contracts with 2 contractors to construct a utilities system phase II B and phase 4, amounting to Baht 110.03 million.

- The company has commitment under service agreement with a related company in obtaining the maintenance of utility system service from such company, amounting to Baht 5.67 million.

NOTE 31 - COMMITMENTS AND CONTINGENT LIABILITIES

As at December 31, 2001, commitments and contingent liabilities consisted of:

Hemaraj Land and Development Public Company Limited - The Company has guaranteed a subsidiary company’s loan amounting to Baht 50 million, and has co-operated

with 2 subsidiaries to guarantee the issue of the US$ 19.20 million Guaranteed Bonds of an overseas subsidiary company.

- The Company has obligations, under condition of the letters of guarantee issued by the banks for its performance under the joint operation agreements with the IEAT, the construction of utilities under land sale contract, and its performance under the raw water purchase agreement and others, as well as the letters of guarantee issued by the banks for the performance of its associated company under the power plant construction agreement with the Electricity Generating Authority of Thailand, in the total amount of Baht 72.90 million.

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Commitments and contingent liabilities (continued) Eastern Industrial Estate Company Limited - The company has entered into land sale and purchase contracts. Under the terms of the contracts, the company is

contingently liable to repay deposits and installments in the event that buyers are unable to obtain satisfactory approval from the Board of Investment and/or the IEAT to set up operations and, consequently, obliged to cancel contracts.

- The company has co-operated with 2 related companies to guarantee the issue of the US$ 19.20 million Guaranteed Bonds of an overseas related company.

- The company has obligation regarding guarantee of the hire purchase agreements of its 2 related companies in the total credit line of Baht 14.28 million.

- The company has obligations, under condition of the letters of guarantee issued by the banks for its performance under the joint operation agreement with the IEAT, the construction of utility and power substation in its industrial estate, and others in the total amount of Baht 188.21 million.

Eastern Seaboard Industrial Estate (Rayong) Company Limited - The company has entered into land sale and purchase contracts. Under the terms of the contracts, the company is

contingently liable to repay deposits and installments in the event that buyers are unable to obtain satisfactory approval from the Board of Investment and/or the IEAT to set up operations and, consequently, obliged to cancel contracts.

- The company has obligation, under condition of the letters of guarantee issued by banks to guarantee its performance under the joint operation agreement with the IEAT, the construction of utility, transmission lines and power station in its industrial estate, and others in the total amount of Baht 224.33 million.

Eastern Pipeline Services Company Limited The company has co-operated with 2 related companies to guarantee the issue of the US$ 19.20 million Guaranteed Bonds of an overseas related company.

NOTE 32 - SUBSEQUENT EVENTS During January 14-18, 2002, Hemaraj Land Development Public Company Limited issued 283,163,108 ordinary shares to the existing shareholders at the rate of 1 existing share to 4 new shares of Baht 1 each. The total proceeds amounted to Baht 283.16 million, which will be used as working capital of the Company.

NOTE 33 - PROMOTIONAL PRIVILEGES The Company and its 2 subsidiary companies have been granted promotional certificates under the Investment Promotion Act, B.E. 2520 as follows: Hemaraj Land and Development Public Company Limited Industrial Estate Business A. On December 29, 1988, obtaining the first promotional certificate for the development area of 1,500 Rais; and B. On February 15, 1990, obtaining the second promotional certificate for the development area of 2,000 Rais.

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Promotional privileges (continued)

Major Privileges A. Exemption from corporate income tax on net income derived from the promoted business for a period of 7 years

as from the date when revenues are first earned. B. Reduction of 50% of the normal rate of corporate income tax on net income derived from the promoted business

for 5 years from the expiry date under condition A. The promotion period under condition A expired and the Company is currently in the promotion period under condition B.

Eastern Industrial Estate Company Limited

Industrial Estate Business A. On May 8, 1989, obtaining the first promotional certificate for the development area of 626 Rais; and B. On September 23, 1992, obtaining the second promotional certificate for the development area of 1,850 Rais.

Major Privileges A. Exemption from corporate income tax on net income derived from the promoted business from the date when

revenues are first earned as follows: - 5 years for the first promotional certificate. - 8 years for the second promotional certificate.

B. Reduction of 50% of the normal rate of corporate income tax on net income derived from the promoted business for 5 years from the expiry date under condition A.

The promotion period under condition A expired and the company is currently in the promotion period under condition B.

Eastern Seaboard Industrial Estate (Rayong) Company Limited

A. Industrial Estate Business A1 On June 21, 1995, obtaining the promotional certificate for the development area of 2,063 Rais, which

subsequently, extended to be 3,595 Rais on August 9, 1995. A2 On October 27, 1997, obtaining the promotional certificate for the development area of 2,466 Rais.

B. Industrial Factory Development Business B1 On January 19, 2000, obtaining the promotional certificate for the development of industrial factories for

sale and rent, 17 units for micro factory and 5 units for mini factory. B2 On June 21, 2000, obtaining the promotional certificate for the development of industrial factories for sale

and rent, 6 units for micro factory and 7 units for mini factory. B3 On January 26, 2001, obtaining the promotional certificate for the development of industrial factories for

sale and rent, 1 unit for micro factory and 11 units for mini factory.

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Promotional privileges (continued)

Major Privileges A. Exemption from corporate income tax on net income derived from the promoted business for a period of 8 years

as from the date when revenues are first earned. B. Reduction of 50% of the normal rate of corporate income tax on net income derived from the promoted business

for 5 years from the expiry date of 8 years after the date when revenues of each business are first earned.

C. Double deduction of transportation expenses, electricity expenses and water supply expenses is allowed for 10 years from the date when the revenues are first earned.

For the years ended December 31, domestic revenues are classified into the promoted and the non-promoted businesses as follows: (Amounts:Million Baht)

The promoted The non-promoted Total 2001 2000 2001 2000 2001 2000

Consolidated Revenue from sales of land 534.17 311.43 0.20 5.75 534.37 317.18 Revenue from sales of pre-fabricated factory 35.00 - - 30.34 35.00 30.34 Service income 234.59 218.42 133.85 62.57 368.44 280.99 Total 803.76 529.85 134.05 98.66 937.81 628.51 The Company Revenue from sales of land - 3.49 0.20 5.75 0.20 9.24 Service income 13.24 15.23 36.82 25.37 50.06 40.60 Total 13.24 18.72 37.02 31.12 50.26 49.84

NOTE 34 - FINANCIAL INSTRUMENTS

Risk Management Policy Exposure to interest rate and currency risk arises in the normal course of the Hemaraj Group’s business. These are subject to the risk of market rates changing subsequent to transaction date.

The Hemaraj Group’s policy on interest rate risk and currency risk hedging is as follows:

- Maintaining proportions of domestic and foreign borrowings denominated in USD currency at 45% and 55%, respectively;

- Borrowing loans at fixed and floating interest rates in proportions of 60% and 40%, respectively; - Mobilizing fund from directors and shareholders; and - Pledging assets as collateral against loans.

The Hemaraj Group has no policy to speculate on or engage in the trading of any off-balance-sheet derivative financial statements.

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Financial instruments (continued) Fair Value of Financial Instruments Except as disclosed in Note 3 to the financial statements, fair value of significant financial instruments consists of: - Fair value of cash and cash equivalents, deposits for investment, accounts receivable, bank overdrafts and loans

from financial institutions, accounts payable and accrued expenses approximates the carrying amount because of short maturity of these instruments.

- Fair value of short-term investments in available-for-sale securities is equal to the carrying amount. - Fair value of short-term loans and advances to related parties, loans to related parties, short-term loans and

advances from related parties, due to and loans from related parties could not be determined since the repayment period is not determined.

- Fair value of convertible bonds, loans under debt restructuring negotiation plan and related interest payable could not be determined since the conditions of payments have not yet been determined.

- Fair value of the restructured domestic loans could not be determined due to uncertainty of payment under the conditions of debt restructuring agreements.

- Fair value of Guaranteed Bonds, which is computed by giving the discount rates to each installment, is equal to the carrying amount.

Sensitivity Analysis In managing interest rate and currency risks, the Hemaraj Group aims to reduce the short-term impact of fluctuations on their operations. However, permanent changes in foreign exchange and interest rates will have an impact on their operations in the long run. For the year ended December 31, 2001, significant sensitivity analysis consisted of: - Based on the balances as at December 31, 2001 of financial assets and liabilities with floating interest rate, it is

estimated that a general change of one percentage point in interest rate will cause a change in the consolidated and the Company’s operations in the amounts of Baht 4.91 million and Baht 3.42 million, respectively.

- Based on the balances as at December 31, 2001 of financial assets and liabilities denominated in USD currency, it is estimated that, a general change of one percentage point in exchange rate of Baht against USD from the exchange rate as at December 28, 2001 will cause a change in the consolidated and the Company’s financial positions and operations in the amounts of Baht 15.01 million and Baht 15.06 million, respectively. The Hemaraj Group has no hedging agreement against exposure to foreign currency risk from financial assets and liabilities.

- The changes in some conditions of convertible bonds, which is subject to the outcome of negotiation with the representative of convertible bondholders and the adjustment to the conversion ratio of convertible bonds will affect the portion of debt-to-equity swap and shareholding structure.

- Energy joint venture agreement with a co-investor may affect the Company’s shareholding in an associated company.

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Financial instruments (continued)

Interest Rate of Significant Financial Assets and Financial Liabilities

Significant financial assets and financial liabilities included in the consolidated balance sheets, classified by period of interest rate revision or due date, whichever is earlier, from December 31, are as follows:

(Amounts:Million Baht, except interest rate) Within 1 year More than 1 year Non-Interest Bearing Total Average Interest Rate (%) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 Financial Assets Cash on hand and cash at banks 109.88 90.09 - - 0.21 7.61 110.09 97.70 - - Deposits for investment 243.55 - - - - - 243.55 - - - Short-term investments - Time deposits 45.86 46.80 - - - - 45.86 46.80 - - Short-term investments in available-for-sale securities, net - - - - 0.28 0.24 0.28 0.24 - - Accounts receivable, net - - - - 94.66 100.50 94.66 100.50 - - Accounts receivable - related parties, net - - - - 3.75 4.35 3.75 4.35 - - Advances and loans to related parties, net 398.04 - - - 3.48 - 401.52 - - - Long-term investments in other company - - - - 1.00 1.00 1.00 1.00 - - Advances to the Provincial Electricity Authority - - - - 14.77 55.45 14.77 55.45 - - Total Financial Assets 797.33 136.89 - - 118.15 169.15 915.48 306.04 Financial Liabilities A. Baht Currency Bank overdrafts 40.01 37.74 - - - - 40.01 37.74 - - Loans under debt restructuring process 535.37 130.82 - - - - 535.37 130.82 21.41 30.00 Other loan - 40.00 - - - - - 40.00 13.11 11.16 Accounts payable - - - - 91.27 53.53 91.27 53.53 - - Accounts payable - the Industrial Estate Authority of Thailand 58.72 359.81 - - 1.70 18.03 60.42 377.84 - - Due to and loans from related parties - 11.01 - - 1.52 1.52 1.52 12.53 - 7.96 Loans from directors and related person 285.00 63.00 - - - - 285.00 63.00 8.33 8.88 Long-term liabilities with fixed interest rate 40.05 35.63 101.24 141.29 - - 141.29 176.92 11.75 11.75 Long-term liabilities with floated interest rate 428.20 1,175.56 - - - - 428.20 1,175.56 7.30 8.41 Total 1,387.35 1,853.57 101.24 141.29 94.49 73.08 1,583.08 2,067.94

B. US Dollar Currency

Convertible Bonds with fixed interest rate 1,272.09 1,245.71 - - - - 1,272.09 1,245.71 3.50 3.50 Guaranteed Bonds with fixed interest rate 213.31 20.11 547.74 689.29 - - 761.05 709.40 7.00-9.00 7.00-9.00 Total 1,485.40 1,265.82 547.74 689.29 - - 2,033.14 1,955.11 Total Financial Liabilities 2,872.75 3,119.39 648.98 830.58 94.49 73.08 3,616.22 4,023.05

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Financial instruments (continued)

Interest Rate of Significant Financial Assets and Financial Liabilities

Significant financial assets and financial liabilities included in the Company’s balance sheets, classified by period of interest rate revision or due date, whichever is earlier, from December 31, are as follows:

(Amounts:Million Baht, except interest rate) Within 1 year More than 1 year Non-Interest Bearing Total Average Interest Rate (%) 2001 2000 2001 2000 2001 2000 2001 2000 2001 2000 Financial Assets Cash on hand and cash at banks 9.34 4.50 - - 0.08 0.36 9.42 4.86 - - Short-term investments - Time deposits 0.55 2.49 - - - - 0.55 2.49 - - Short-term investments in available-for-sale securities, net - - - - 0.28 0.24 0.28 0.24 - - Accounts receivable, net - - - - 2.60 3.59 2.60 3.59 - - Accounts receivable - related parties, net - - - - 0.13 1.31 0.13 1.31 - - Short-term loans, advances and long-term loans to related parties, net 398.05 16.59 264.09 166.47 69.47 33.76 731.61 216.82 10.61 10.23 Total Financial Assets 407.94 23.58 264.09 166.47 72.56 39.26 744.59 229.31

Financial Liabilities A. Baht Currency Bank overdrafts 39.82 37.72 - - - - 39.82 37.72 - - Loans under debt restructuring process 535.37 130.82 - - - - 535.37 130.82 21.41 30.00 Other loan - 40.00 - - - - - 40.00 13.11 11.16 Accounts payable - - - - 5.04 8.53 5.04 8.53 - - Accounts payable - the Industrial Estate Authority of Thailand 37.16 243.06 - - - - 37.16 243.06 - 15.00 Short-term loans, advances and long-term loans to related parties - - - - 1,497.20 1,828.12 1,497.20 1,828.12 - - Long-term liabilities with fixed interest rate 32.35 28.79 85.07 117.42 - - 117.42 146.21 11.75 11.75 Long-term liabilities with floated interest rate 175.00 579.55 - - - - 175.00 579.55 7.30 8.41 Total 819.70 1,059.94 85.07 117.42 1,502.24 1,836.65 2,407.01 3,014.01

B. US Dollar Currency Convertible Bonds with fixed interest rate 1,272.09 1,245.71 - - - - 1,272.09 1,245.71 3.50 3.50 Total Financial Liabilities 2,091.79 2,305.65 85.07 117.42 1,502.24 1,836.65 3,769.10 4,259.72

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NOTE 35 - SEGMENT INFORMATION

As at December 31, assets in the consolidated balance sheets classified by domestic and overseas businesses are as follows:

(Amounts:Million Baht)

2001 2000 Domestic Overseas Total Domestic Overseas Total Industrial Estate Others Holding Company Industrial Estate Others Holding Company

Cost of real estate developments 2,401.10 - - 2,401.10 2,668.72 - - 2,668.72 Leasehold land and land held for commercial purposes 1,756.63 - - 1,756.63 1,759.22 - - 1,759.22 Assets for rent 323.57 88.12 - 411.69 215.59 81.88 - 297.47 Property, plant and equipment, net 186.26 - - 186.26 230.46 14.02 - 244.48 Other assets 1,048.76 4.37 320.35 1,373.48 1,709.03 2.31 7.83 1,719.17 Total Assets 5,716.32 92.49 320.35 6,129.16 6,583.02 98.21 7.83 6,689.06

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Segment information (continued) For the years ended December 31, operations in the consolidated statements of income classified by domestic and overseas businesses are as follows:

(Amounts:Million Baht) 2001 2000 Domestic Overseas Total Domestic Overseas Total Industrial Estate Others Holding Company Industrial Estate Others Holding Company Sales of land 534.37 - - 534.37 317.18 - - 317.18 Sales of pre-fabricated factory 35.00 - - 35.00 30.34 - - 30.34 Service income 350.28 18.16 - 368.44 264.58 16.41 - 280.99 Total Sales and Service Income 919.65 18.16 - 937.81 612.10 16.41 - 628.51

Gain (loss) from operations 111.82 (3.69) (0.93) 107.20 68.21 5.02 (0.77) 72.46 Other incomes 319.23 0.98 0.34 320.55 159.60 - 30.16 189.76 Interest expense (161.31) (1.35) (58.24) (220.90) (215.90) (4.81) (50.62) (271.33) Directors’ remuneration (35.95) - (50.41) (86.36) (20.06) - (31.01) (51.07) Share of loss in associated companies (303.87) - - (303.87) (138.28) - - (138.28) Loss on exchange rate (22.94) - (24.04) (46.98) (163.53) - (137.68) (301.21) Reserve for loss of possessory right over

the land and office building (25.18) - - (25.18) - - - - Reserve for possible loss from pledge of securities (158.40) - - (158.40) (235.50) - - (235.50) Impairment loss on investments - - - - (38.05) - - (38.05) Loss on sale of investments - - - - (46.03) - - (46.03) Impairment loss on construction in progress (10.17) - - (10.17) - - - - Income tax (8.23) - - (8.23) (0.96) - - (0.96) Gain (loss) before minority interests (295.00) (4.06) (133.28) (432.34) (630.50) 0.21 (189.92) (820.21) Minority interests (60.89) (31.79) Net loss 493.23) (852.00)

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NOTE 36 - RECLASSIFICATION OF ACCOUNTS Certain accounts in the financial statements for the year ended December 31, 2000 have been reclassified to conform with the presentation in the financial statements for the year ended December 31, 2001.

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The Executive Committee and Management

Mr. Sawasdi Horrongruang Honorary Doctorate Degree, Bachelor Degree of Business Since Director T H K Real Estate

Chairman of The Board of Director Administration Humanity Faculty Burapha University Since Chairman of The Associate Thai Industrial Association

Mr. Thongchai Srisomburananonta - Since - -

Vice Chairman of The Board

Mr. Thavorn Anankusri - Since - -

Vice Chairman of The Board

Mr. Prateep Trilohaka Bachelor Degree Faculty of Economics Since - -

Vice Chairman of The Board Thammasat University

Mr. Sudphipan Charumani

Chairman of Audit Committee Chater Accountant Institutes Since - -

MBA Northeastern University

Boston, M.A.

Mr. David Richard Nardone Since - -

President & CEO

Mr. Peter John Edmondson

Audit Committee Since

Mrs. Punnee Worawuthichongsathit Bachelor of Accounting (Honours) Since - -

Audit Committee Chulalongkorn University

Mr. Vivat Jiratikarnsakul Bachelor of Sanitary Faculty of Engineering Since - -

Executive Vice President Chulalongkorn University

University of Waterloo, Waterloo,

on Bachelor of Applied Science in

Mechanical Engineering,

Mr. Khamhoung Ratsamany MBA from Bangkok University Since - -

Director - Industrial Estate Operations Nationality

Canada

Mr. Tanin Subboonrueng MBA, Business Administration Since - -

Director - Development Assumption University

Mr. Sirisak Kijraksa Bachelor of Accounting Since - -

Deputy Director - Accounting Bangkok University

Ms. Somjai Wachiraha Bachelor of Business Administration, Since - -

Deputy Director - Finance General Affairs Ramkhamhaeng University

Ms. Jinnapat Tongviseskul MBA, Economic & Administration Since - -

Marketing Manager Chulalongkorn University

Mr. Paopitaya Smutrakalin MS Finance Since - -

Planning & Information System Manager

HEMRAJ : Annual Report 2001

Documents

Transcript of HEMRAJ : Annual Report 2001