HMPRO: Annual Report 2009

Sustainable GrowthHomePro Annual Report 2009

Total HOME Solution

2No.of Stores

at Phuket-Chalong and Khao Yai

Branches

Total Asset

Increasing from investmentin property of 2 new stores.

+497 MB

Sales

to 20,329 million baht.

+9.6%

to 1,143 million baht.

+19%Net Profit

18,540

15,944

14,224

20,3292009

2008

2007

2006

959

710

601

1,1432009

2008

2007

2006

13,369

12,274

11,814

13,8662009

2008

2007

2006

33

30

26

352009

2008

2007

2006

HomePro is the leading home improvement retailer in Thailand.We operate 35 stores nationwide, providing product range cover 60,000 items with complete services as One Stop Shopping to attain highest customer satisfaction.

Total Home Solution 1

Contents

2 Message from the Chairman

3 Message from the Managing Director

11 General Information

14 Financial Information

15 Nature of Business

17 Risk Factors

20 Shareholding Structure

21 Organization Chart

22 Management

37 Corporate Governance

43 Internal Control

44 Dividend Policy

44 Related Transactions

47 Financial Analysis and Business

Operation Results

52 Report of Board of Directors’

Responsibilities in

the Financial Statements

53 Audit Committee’s Report

55 Independent Auditor’s Report

56 Financial Statements

Total Home Solution2

(Mr. Anant Asavabhokhin)Chairman

Dear Shareholders and Stakeholders,

The year 2009 was another year of challenge for every business sector as a result of the US economic crisis which began in 2008 and affected all over the world until it reached the lowest point in 2009. Although the economic trend has begun to rebound in the second half of the year, the effects of the declineof consumer confidence in spending and the decline in export market, which is the staple income of the country, have reduce in the rate of expansion of the Gross Domestic Product or GDP for 2009 to negative 2.3%.

However, due to our concrete foundation built through the steady increase in efficiency of internal management, improvement of the competencies and advantage over the competitors in the aspect of merchandises, increased efficiency of management of cost of sales, continual expansion of the branches, development of the feature of services including relevant marketing strategy; in 2009 HomePro managed to reach the expanded gross sale of 9.65% and hadthe rate of expanded gross profits increased up to 19.12%, where same storesales growth had expanded up to 5.1% together with the gross sale of newbranches including the organization of the HomePro EXPO.

For the year 2010, even though the signal of the rebound has been brighter and the confidence of the consumers has significantly increased, the economicpicture of the world remain fragile, considering the internal political situations of the country in particular. Therefore, the Company has prepared a work plan including different strategies to maintain the continual increase in the rate of expansion of the gross sales and profits. Hence, it is necessary to depend onthe efforts and determination of all employees; cooperation of all shareholders including the support of the trade partners; trusting and acceptance from all groups of customers of the Company.

Finally, the Company wishes to thank those who have supported the business of the Company in every aspect and hopefully the Company could continue toreceive your cordial cooperation and support. The Company has committed to operate and develop the business to be prosperous for maximum benefits of the shareholders, trade partners, customers and more than 5,000 employees of the Company all over the country.

“ The Companyhas committed tooperate and developthe business to be prosperous formaximum benefits ofthe shareholders, partners, customers and our employees ”

Message from the Chairman


(Mr. Khunawut Thumpomkul) Managing Director

Dear Shareholders and Stakeholders,

Despite the Gross Domestic Product (GDP) of negative 2.3% in 2009 which had reflected the difficulties for Thailand in confronting the hazardous economic problems, internal and external political problems, the business of the Companyhas been progressing steadily with the results at a satisfactory level. Our salesincreased by 9.65% and profits increased by 19.12% resulting from the growth of the sales of the existing branches, the opening of new branches, organizationof the HomePro EXPO, adjustment of the product groups, improvement of theoperational efficiency, management of costs, income from the space rental alongwith revenues from advertisement and support of promotional activities and other services.

In 2009 the Company had expanded two more branches: the Phuket-Chalong Branch, a second branch of Home Pro in Phuket Province and the Khao Yai Branch, a second branch in Nakonratchasima Province. Consequently, there were a total 35 service branches in 2009. In 2010 the Company plans to expand approximately 4-5 more branches including a renovation of the existing branches in order to enhance the spending atmosphere.

The organization of the HomePro EXPO was a highly successful marketing strategy and continued to be supported by our trade partners who provided their ever strong support to the event. Both events in the periods of March and October were able to reach the satisfactory sales target and grasp the interestof the customer groups beyond the expectation.

The Company remains focusing on a continuous development of services with the principal goal to deliver maximum satisfaction to the customer. In 2009 the Company had developed services under Home Service to serve designing aspect in the 3 dimensional system or 3D Design, and “HomeCare” to deliver services in improvement, modification and maintenance by experienced technicians.Moreover, the Company has also focused on the presentation of merchandises and services including sale promotions to accommodate the demands of the target groups based on the analysis and research of a spending behavior through the Home Card database together with the introduction of an additional saleschannel via the E-Commerce system.

In addition, the Company is proud to be a socially responsible citizen, continuously create activities to return to our community. In 2009 the Companyhad collaborated with the Department of Health to raise the hygienic level oftoilets under the operation of the Kid’s Toilets Project by improving and/or constructing a safe and hygienic toilets for elementary schools in 12 provinces, totaling 49 schools with 526 toilets in order to meet the public toilet standardsat the national level of the Department of Health (Healthy Accessibility and Safety : HAS) and to be lastingly managed and maintained. At the same time, the Company has organized the One Hundred Thousand Tree Planting Project within three years to preserve the nature of the mangrove forest at the Bang Puseaside forest and also has a plan to continuously build a computer laboratoryfor various schools.

Subsequent to these successes, the Company wishes to thank all employeesfor the determination in their hard work and wishfully our shareholders and tradepartners would continue to cordially support the operation of the Company’s business in the future.

“ The Company has continued toconsistently increase the internal efficiencyto leverage the competency and the competitive advantage ”

Message from Managing Director


Home ServiceServices for home lovers

Our true understanding of the customers’

actual needs helps us develop and create a variety

of products and services.

Home Care The three services for home lovers consist of :

Installation Service provides services on installatione/moving/solving problems involving electricity

work, plumbing, flooring, sanitary ware and

kitchen appliances installation. Maintenance Service provides checking and cleaning of

electrical appliances such as air condition or

washing machine. Home Improvement Service provides home renovation and furnishing based

on customer requirements such as exterior and

interior painting.

3D Design HomePro provides advice to homeowners

to prepare them before making improvements

to any bathroom or kitchen by starting from

design, material selection, furniture

positioning, tile pattern arraying

for floor and wall, etc.

We SERVEour customers


Continuing to serve the needs of customers,

HomePro has developed Customer Relation

Management program to collect the information

on customer spending behavior and offer relevant

products and services through sales promotions.

In addition, HomePro has launched HomeCard for

Happy Home Rewards accumulation to increase

purchase value for cardholders. The cardholders

also have a privilege to receive discount products

and services, and other benefits such as joining

workshops, etc. HomeCard has been well accepted

among customers since its inception. In 2009,

HomePro had more than 300,000 members in

the program.

Home Card Privileges for home lovers


Store ExpansionMore and more networks for home lovers

HomePro has continued expanding its

branches to increase channels providing service to

home lovers. In 2009, the results of operations for

the existing branches, along with the continuous

increase in purchasing power of local customers,

prompted HomePro to open two more branches:

Phuket-Chalong branch, the second branch in

Phuket province under the concept of HomePro

Village, a complete small shopping center; and

also Kao Yai branch, the second branch in Nakorn

Ratchasima Province. At present, HomePro has a

network of 35 branches for home lovers.

Providing more choices to customers, HomePro

has developed products under its very own brands

with good quality at reasonable prices. Until now,

the Company has 14 Private Brands of more than

1,000 products, enhancing the Company’s net

profit growth continuously.

Private Brand ProductsAn alternative choice of quality products with good value for money

We DRIVEour business


The 9th-10th HomePro Expo Original Home Improvement Event

The success of the 9th - 10th HomePro Expo with

the total sales volume more than Baht 1,000 million

had been well accepted by customers for well

managed and standardized events as well as the

sales promotions which met the needs of customers.

This was driven by the cooperation of business

alliances, financial institutions, and more than

300 manufacturers and suppliers. In addition, the

activity of the third HomePro Champion Contest in

the 10th HomePro Expo offered an opportunity for

home lovers to join interior design competition under

the given themes. The competition received a lot of

attention from participants. This proved HomePro

to be the leader of the Home Improvement business,

particularly with its variety of products and creation

of customer inspiration.


Health Promotion Throughout 2009, HomePro had utilized the Kids’

Toilet Project to place an emphasis upon raising toilet

sanitation standard within 49 schools, totaling 526 rest-

rooms in 12 provinces in order to receive national public

toilet standard or HAS (Healthy Accessibility and Safety).

The project received cooperation from the Department

of Health, the Ministry of Public Health, and the Office

of the Basic Education Commission, the Ministry of Edu-

cation to examine the standard and provide additional

improvement till most of the toilets in the project passed

the national standard.

Environment Conservation With “HomePro helps reduce global warming”

project, HomePro has the objective of Avicennia marina

and LamPu forestation of 100,000 trees within 3 years at

Bangpu Education Center of the Royal Thai Army in Samut

Prakarn Province.

Education SupportIn 2009, through “Computer lab construction” project,

HomePro provided computers together with equipment

installation to Jao Pho Luang Uppatham 7 School in Mae

Rim District, Chiang Mai province.

We SERVEour communityAwareness of being the Good CitizenCorporate Social Responsibility Activities


We have placed our focus on staff potentiality

development. In 2009, the Company had enhanced

internal strength by focusing on creating happiness

as well as good corporate culture among its staff

through the improvement of corporate environment,

basic welfare, and corporate activities such as

performing meritorious deeds” in birth month

activity, health camping activity, social contribution

activity, etc. The Company believes that being

happy and having internal strength will lead our

employees to work efficiently and provide the

service that bring highest customer satisfaction.

We VALUEour employeesThe Heart of the CompanyHaving a Knowledgeable Team with Service Mind.


Total HOME Solution


Home Product Center Public Company Limited was established on June 27, 1995 with the initial registered

capital of Baht 150 million, being a joint venture between Land and Houses Group and American International

Assurance Co., Ltd. The Company has been listed on the Stock Exchange of Thailand since October 30, 2001.

The Company was established with an objective to operate a retail business in home improvement segment by

selling goods and providing complete range of services relating to construction, addition, renovation of buildings,

houses, and residence places under the trade name of “HOMEPRO” which is the Company’s trademark. Rangsit

branch is the first branch of the Company operating in September 1996. As of 31 December 2009, the Company

has 35 branches in total, of which 17 branches are located in Bangkok and its vicinity and another 18 branches

in upcountry provinces, which the location creates convenient access to customers. There were 2 newly opened

branches in 2009, i.e. Phuket – Chalong, and Khao Yai.

Information of Home Product Center Public Company Limited

Location 96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000

Telephone 66(0) 2832-1000

Facsimile 66(0) 2832-1400

Website www.homepro.co.th

Type of Business selling goods and providing complete range of services relating to construction,

addition, refurbishment, improvement of buildings, houses, and residence places

as One Stop Shopping

Registration No. Bor Mor Jor. 665

Registered Capital 3,794,213,851 Shares

Paid-up Capital 3,703,926,216 Shares

Information of company in which Home Product Center Plc. holds shares from 10 percent up

Name Market Village Co., Ltd

Location 234/1 Petchkasem Road, Tambon Hua Hin, Amphoe Hua Hin,

Prachaub Kirikhan Province 77110

Telephone 66(0) 3261-8888

Facsimile 66(0) 3261-8800

Type of Business management of leasing space together with provision of facilities services

Number of Issued Shares 50,000 ordinary shares at par value of Baht 100

Number of Held Shares 49,993 shares

General Information


Branches Information

1. Rangsit

Pathumthanee 12130

2. Rattanathibet 6/1 Moo 6, Tambon Saothonghin, Amphoe Bangyai, Nonthaburi 11140

3. Fashion Island 587, 589 Ramindra Road, Khannayao, Bangkok 10230

4. Future Mart 295 Rama 3 Rd., Bangkholeam, Bangkholeam, Bangkok 10120

5. Seri Center 61 Srinakarin Rd., Nongbon, Praves, Bangkok 10260

6. The Mall Bangkae 275 Moo 1, Petchkasem Rd., North Bangkae, Bangkae, Bangkok 10160

7. The Mall Korat 1242/2 Mittraphap Rd., Amphoe Muang, Nakhon Ratchasima 30000

8. Ratchadaphisek 125 Ratchadaphisek Rd., Dindang, Dindang, Bangkok 10320

9. Ploenchit 55 Wave Place Building, Wireless Rd., Pathumwan, Bangkok 10330

10. Phuket 104 Moo 5, Tambon Rasada, Amphoe Muang, Phuket 83000

11. Chiangmai 94 Moo 4, Chiang mai-Lampang Rd., Tambon Nong Pa Kruang, Amphoe Muang, Chiangmai 50000

12. Ramkhamhaeng 647/19 Ramkhamhaeng (Sukhaphibal 3) Rd., Huamark, Bangkapi, Bangkok 10240

13. Rama II 45/581 Moo 6, Samaedam, Bangkhunthien, Bangkok 10150

14. Prachachuen 96/27 Moo 9, Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000

15. Latphrao 669 Latphrao Rd., Chompol, Chatuchak, Bangkok 10900

16. Pattaya 333 Moo 9, Tambon Nongprue, Amphoe Banglamung, Chonburi 20260

17. Chaengwatthana 113 Moo 5, Tambon Pakkret, Amphoe Pakkret, Nonthaburi 11120

18. Had Yai 677 Petchkasem Rd., Tambon Had Yai, Amphoe Had Yai, Songkhla 90110

19. Ratchapruk 82 Moo 2, Tambon Bang Khun Kong, Amphoe Bang Kruai, Nonthaburi 11130

20. Suvarnabhumi (Bangna) 99/28 Moo 1, Tambon Rachatawa, Amphoe Bangplee, Samutprakarn 10540

21. Hua Hin 234/1 Petchkasem Rd., Amphoe Hua-Hin, Prachuabkhirikhan 77110

22. Samui 1/7 Moo 6, Tambon Bophut, Amphoe Kho Samui, Suratthani 84320

23. Phitsanulok 959 Moo 10, Tambon Aranyik, Amphoe Muang, Phitsanulok 65000

24. Khonkaen 177/98 Moo 17, Tambon Naimuang, Amphoe Muang, Khonkaen 40000

25. Udonthani 89/20 Moo 9, Soi Bannonglek, Tambon Markkang, Amphoe Muang, Udonthani 41000

26. Suratthani 9/1 Moo 3, Tambon Makham Tia, Amphoe Muang, Suratthani 84000

27. Petchkasem 28 Moo 11, Nongkhangplu, Nong Kham, Bangkok 10160

28. Chonburi 15/16 Moo 3, Tambon Huykapi, Amphoe Muang, Chonburi 20000

29. Ekamai-Ramindra 14/12 Moo 8, Latphrao, Latphrao, Bangkok 10310

30. Rayong 560 Sukhumvit Rd., Tambon Noenphra, Amphoe Muang, Rayong 21000

31. Ayutthaya 80 Moo 2, Tambon Bangrod, Amphoe Bangpain, Ayutthaya 13160

32. Chiangmai - Hangdong 433/4-5 Moo 7, Tambon Mae-Hiya, Amphoe Muang, Chiangmai 50100

33. Krabi 349 Moo 11, Tambon Krabinoy, Amphoe Muang, Krabi 81000

34 .Phuket - Chalong 61/10 Moo 10, Tambon Chalong, Amphoe Muang, Phuket 83130

35. Khao Yai 288 Moo 11, Tambon Nong Nam Daeng, Amphoe Pakchong, Nakhonratchasima 30130


Information of the referrals

Auditor Ernst & Young Office Limited

33rd Floor, Lake Rajada Office Complex, 193/136-137 Ratchadaphisek Rd., Klongtoey,

Bangkok 10110

Tel. (66) 02-264-0777 Fax. (66) 02-264-0789-90

Share Registrar Thailand Securities Depository Co., Ltd.

4th, 6-7th floor Stock Exchange of Thailand Building, 62 Ratchadaphisek Rd., Klongtoey,

Bangkok 10110

Tel. (66) 02-229-2800 Fax. (66) 02-359-1262-3

Legal Counsel Wissen & Co Ltd.

8th Floor Office # 3801, BB Building, 54 Sukhumvit 21 (Asoke) Rd., Klongtoey-Nua, Wattana,

Bangkok 10110

Tel. (66) 02-259-2627 Fax. 66) 02-259-2630

Representative of Debenture Holder Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2005

Siam Commercial Bank Plc.

9 Ratchadaphisek Rd., Jatujak, Bangkok 10900

Tel. (66) 02-230-6295 Fax.(66) 02-230-6093

Amortizing Debentures of Home Product Center Plc. 1/2008 and

Unsubordinated and Unsecured Debentures of Home Product Center Plc. 2/2008

TMB Bank Plc.

3000 Phaholyothin Rd., Chomphon, Jatujak, Bangkok 10900

Tel. (66) 02-264-0777 Fax. (66) 02-264-0789-90

Unsubordinated and Unsecured Debentures of Home Product Center Plc. 1/2009

CIMB Thai Bank Plc.

44 Langsuan Rd., Lumpini, Patumwan, Bangkok 10330

Tel. (66) 02-626-7503-4 02-626-7218 Fax. (66) 02-626-7542 02-626-7587


th September 2009, the meeting approved for the payment of interim dividends at the rate of 1 Baht/ share by dividing into cash dividends at the rate of 0.10 Baht/ share and stock dividend at the rate of 0.90 Baht/ share. The meeting also approved the increase of the registered capital for the amount of 1,797.62 millions shares in order to support the payment of stock dividends and the exercise of the employee stock option plan No. 4 (ESOP 4) according to the warrant.

Item

Consolidated Financial Statements Seperate Financial Statements 2009 2008 2007 2009 2008 2007

(Unit : MB)

Financial Information

Total Assets 13,866.03 13,369.07 12,274.28 13,817.52 13,318.38 12,225.9413,817.52 13,866.03

Total Lisbilities 8,592.59 8,412.86 7,950.81 8,560.19 8,373.62 7,908.438,560.19 8,592.59

Equity 5,273.44 4,956.21 4,323.48 5,257.32 4,944.76 4,317.50 5,257.32 5,273.44

Sales 20,329.12 18,540.27 15,943.28 20,330.43 18,541.73 15,943.9020,330.43 20,329.12

Total Revenues 21,799.09 19,824.19 17,015.21 21,710.98 19,743.97 16,934.3021,710.98 21,799.09

Net profit 1,142.86 959.42 710.38 1,138.19 953.95 704.781,138.19 1,142.86

EPS (Baht) 0.31 0.50 0.37 0.31 0.49 0.37 0.31 0.31

Dividend per share (Baht) 1.00 0.35 0.18 1.00 0.35 0.181.00 1.00

Paid-up Capital (Million Shares) 3,703.93 1,933.61 1,924.92 3,703.93 1,933.61 1,924.923,703.93 3,703.93

Financial Ratio

Liquidity Ratio Liquidity Ratio (time) 0.67 0.62 0.56 0.66 0.61 0.55 0.66 0.67

Profitability Ratio Gross Profit (%) 24.27 23.70 22.96 24.28 23.70 22.9724.28 24.27

Profit from Operation (%) 8.62 7.96 7.20 8.59 7.93 7.17 8.59 8.62

Net Profit (%) 5.24 4.84 4.17 5.24 4.83 4.165.24 5.24

Return on equity (%) 22.34 20.68 17.41 22.31 20.60 17.2822.31 22.34

Operation Efficiency Ratio Return on assets(%) 8.39 7.48 5.90 8.39 7.47 5.88 8.39 8.39

Financial Analysis Ratio Debts to Equity ratio (time) 1.63 1.70 1.84 1.63 1.69 1.83 1.63 1.63

Interest coverage ratio (time) 27.60 22.37 12.36 27.14 21.91 12.1927.14 27.60

Item

Consolidated Financial Statements Seperate Financial Statements 2009 2008 2007 2009 2008 2007


Vision To maintain HomePro’s position as the leader of home center business in Thailand, and to expand branch

network to cover the home center business in South East Asia.

Mission 1. To offer the best value in terms of products, services, and prices to our customers, to be the first on

customer’s mind when it comes to home products.

2. To collaborate with our business alliance in an effort to improve efficiency which leads to increasing of

mutual benefits.

3. To give the importance to and develop personnel to have working efficiency and responsibility to customers.

4. To manage professionally according to the good governance, and to build good relationship with society

and community.

5. To seek new business opportunity for the future and to create reasonably incremental value for associated

parties.

Nature of Business of Home Product Center Public Company Limited The Company was established with objective to operate a retail business in home improvement segment by

selling goods and providing complete range of services relating to construction, addition, refurbishment, renovation,

improvement of buildings, houses, and residential places through One Stop Shopping Home Center under the trade

name of “HomePro” which is the Company’s trademark. Presently, the Company has the nature of business as follows;

1. Providing home improvement products, by having 3 groups

To provide the services relating to retail business Due to most of the Company’s products having instruction details and working process which customers

need to understand, the Company has provided various kinds of related services by giving consultation and

useful information for customers to make decision to select the products that mostly match the usage

objectives. In addition, the Company has provided HomeCare services, including installation service, repairing,

and maintenance of equipments, electrical appliance, system work, painting service, tile service etc.,

product delivery service, technician and contractor selection and placement service, products exchange

service, as well as arranging DIY demonstration (Do It Yourself) and workshop etc.

2. To provide space rental service for retail tenant stores The Company has arranged for its rental space in some branches to provide the service for retail

tenant shops. At the same time, the Company has developed the format of its branches so called HomePro

Village which operates the business in the form of full service shopping center. Inside the project, in

addition to HomePro’s branch, there are areas of shopping center in which most of tenants consist of

supermarkets, restaurants, banks, bookstores, and IT shops etc.

As of December 31, 2009, the Company has a total of 3 branches in the form of HomePro Village:

Suvannabhumi branch, Hua Hin branch, and Phuket-Chalong branch.

Hard Line 1 Hard Line 2 Soft Line

Construction material, Home

improvement accessories,

Bathroom and Sanitaryware

Kitchenware, Electrical

appliances, Electrical

equipment and Lighting

Bedding and Household

decorative goods

Nature of Business


Nature of Business of SubsidiaryMarket Village Co., Ltd. (“Market Village”) was incorporated, on May 26, 2005, located at 234/1 Petchkasem

Road, Tambon Hua-Hin, Amphoe Hua-Hin, Prachaubkirikhan Province, in which Home Product Center Plc. holds

99.99% of total shares. Presently, its registered capital is Baht 5 million. Market Village was formed with objectives

to manage rental space for Home Product Center Plc., and to provide utilities services to tenants. In the first

quarter of 2006, it commenced operation on the “Hua-Hin Market Village” project which is located at Petchkasem

Road, Amphoe Hua-Hin, Prachaubkirikhan.

Revenue StructureRevenue of Company and subsidiaries consist of sales revenue and other revenues. Total structure of revenue

can be classified by the line of products as follows:

Supply of Products The Company sources products by:

1. Purchase order. The Company makes the purchase order of products categorized by product lines from

both domestic and overseas manufacturer or sales agent, in which the Company mainly emphasizes on quality

and variety of products.

Currently, the Company sources products from more than 800 manufacturers and sales agents which,

throughout the time, provided good support and cooperation, in terms of advertisement, public relation, joint sale

promotion, joint planning of sale strategies, support and joining new branch to be opened.

2. Make to order. The Company orders manufacturing of Private Brand and House Brand from both domestic

and overseas manufacturer. The Company will initially select the manufacturer by considering factors including being

certified of manufacturing standard, reputation, quality of service and types of harmonized operation. Moreover,

the Company also visits the factory and inspects products in order to ensure the overall quality.

Item

2009 2008 2007 Amount % Amount % Amount %

Unit: MB

1. Revenue from retailing

• Hard Line 1 8,604.1 39.5 7,782.2 39.3 6,792.3 39.9

• Hard Line 2 8,123.0 37.3 7,520.9 37.9 6,395.8 37.6

• Soft Line 3,428.9 15.7 2,998.9 15.1 2,502.5 14.7

2. Revenue from project sales1 173.1 0.8 238.3 1.2 252.7 1.5

Total Revenue from Sales 20,329.1 93.3 18,540.3 93.5 15,943.3 93.7

3. Other income2 1,470.0 6.7 1,283.9 6.5 1,071.9 6.3

Total 21,799.1 100.0 19,824.2 100.0 17,015.2 100.0

Remark 1. Revenue from project sales is from the purchase of project owners which cannot be categorized per product lines. 2. Other income is revenue from rental of space, in-store promotion fee etc.


Market and Competitive Condition The Company is the leader in home improvement retailing which offers a full range of complete services. As

for competitors, the Company has classified other operators who sell goods in similar nature as follows:

1. Operators of Home Center • HomeWorks is a retail business unit of home products in Central Retail Corporation Group of Companies.

There are currently 9 branches in operation.

• Global House operates the business of selling products in the form of warehouse store. Products include

construction materials, decorative goods, tools, equipments to be used for construction, addition,

decoration of house and garden. It is managed by the Siam Global House Plc. There are currently

8 branches in operation.

However, the Company believes that this business still has plenty of potential and marketing opportunities

and that the increase of such business operators will help stimulate consumers familiarity and more rapidly change

their behavior to purchase products from Modern Trade home centers.

2. Specialty Store. Retail businesses who focus on selling specific goods as follows:

• Ceramic, Sanitaryware, and Kitchenware stores i.e. Boonthavorn, Grand Home Mart.

• Furniture and Home decoration stores i.e. Index Living Mall

• Retail stores that sell only construction materials i.e. Cement Thai Home Mart, Thai Watsadu.

• Other Specialty Stores.

3. Operators of large retail business in the group of Hypermarket. These businesses mainly aim at selling of

consumer goods and edible products, not home products. While some groups of products sold may overlap, their

main customer targets are different.

The Company separately explains the risk factors which may affect the operations of business as follows:

1. Business Risk In the face of economic downturn since the end of 2008 along with the effects from the world economic crisis

and the H1N1 flu outbreak, the economy sharply decelerated in 2009. Moreover, there were political conflicts and

violence situation in the three southern border provinces.

The overall retail and wholesale business in the first half of 2009 contracted due to the slowdown of consumer

spending in almost every product category, except for the goods in food section which was slightly increased. For the

second half of the year, the overall domestic economy adjusted in a better direction. Consumers had more confidence

in the economy and began to spend more. The important factors came from the government’s economic stimulus

measures such as Cheque Chuay Chart project, Allowance for Elderly project, Thai Khem Khang project, and other

economic stimulus measures which resulted in the increase in consumer purchasing power and the improvement

of spendings in the retail and wholesale business accordingly.

The Company, however, has closely kept abreast of the economic and political situation in order to plan and

find measures and strategies to prevent the risks that may occur, and to operate the business so as to successfully

reach the planned target.

Risk Factors


1.1 Inventory As of the 31st December 2009, 31st December 2008, and 31st December 2007, the Company had net Inventory

equal of Baht 2,905.14 Million, Baht 2,728.08 Million, and Baht 2,547.57 Million respectively. The average inventory

turnover periods were 66 days, 67 days, and 74 days. The decrease in inventory turnover period reflects the success

in adopting a marketing strategy and our developing capability of inventory management.

However, the Company has been continuingly attempting to increase the turnover of Inventory, whether by

developing of service quality of sale persons, continual sales promotion, improving products display and internal

appearance of branches, regularly adding new products to the store, including attempting to reduce the volume

stocking level. For the reduction of inventory in 2006, the Company has expanded space of the distribution center.

As of 31st December 2009, the total area amounted to 40,000 square meters, in order to be capable of supporting

the increase of branches in the future and to manage inventory more efficiently.

1.2 Investment As of 31st December 2009, the Company had branches in operation totaling 35 branches. The new branches

in 2009 were Phuket-Chalong and Khao-Yai in Nakhon Ratchasima.

Since the Company has a policy to continuously increase branches, there may be a risk with respect to the

result of performance of new branches that may not be as forecasted. This will affect the result of the overall

operation. The Company avoids the risk by analyzing the return on investment before every investment decision,

and preparing the action plan and annual budget. When a new branch starts operating, the results of operations

and progress plan are being followed up on a monthly basis. This will facilitate the Company to set the plan for

handling the risk and to solve problems which may occur in timely manner.

1.3 Operation The Company has the risk of loss or damage of property due to the operation of the sale personnel, and has

set up a work unit to handle with such risk, that is Loss Prevention Unit, which is responsible for laying preventive

and safety system against various risks of the Company including the risk that the employees may incur from the

operation.

1.4 Accounts Receivable The Company has divided the customers into 2 groups: retail customer and group of contractor and project

owner. The retail customer is customer at store who purchases products by cash, the group of contractor and project

owner is customer who purchases products by credit term. The major sales revenue comes from retail customer.

As in 2009 the proportion of cash sales was 99.2% to total sales. For 2008 and 2007, the proportion was at 98.7%

and 98.4%. It can be seen that the proportion of credit sales of the Company has decreased overtime. However,

for the credit sales, the Company will consider only project that has reliable financial status, which the company

has analyzed the result of operation and financial status or having the contractor place with a letter of guarantee

as security against debt payment, etc.

As of 31st December 2009, 31st December 2008, and 31st December 2007, the Company has accounts receivable

of Baht 143.18 Million, Baht 160.63 Million, and Baht 164.37 Million, being credit card debtor of Baht 65.55 Million,

Baht 34.06 Million, and Baht 48.13 Million respectively. The allowance for doubtful bad debts was set to be approximately

Baht 14.40 Million, Baht 25.64 Million, and Baht 20.79 Million as of 31st December 2009, 31st December 2008,

and 31st December 2007 respectively, which the management have already estimated the debt repayment period

and have evaluated financial status of each debtor. The Company believes that the allowance for doubtful bad

debts has been set sufficiently and appropriately.


2. Competitive Risk The Company operates a retail business with products relating to houses and residential places where there

are both direct and indirect competitors such as retailing shops, department stores, specialty stores, and general

small retail shops. The Company has differentiated itself by focusing on offering a variety of products and complete

range of services for construction, repairing, decoration, and addition. Also, the Company provides a team of experts

for several kinds of system work such as electrical system, plumbing, and related installation, etc.

Furthermore, the Company has concentrated on strengthening efficiency of internal management in order to

improve, its capability and advantages against both local and international competition in the future.

3. Legal Risk The laws which are relevant and may cause a risk to business operation are as follows:

1. The Bangkok Metropolis Town Planning Law Announced on 16th May 2006, with objectives to be a

guidance on the development of Bangkok Metropolis and to support the expansion in the future. If there shall be

modification of the town planning in the future, the Company will not be affected from this limitation, as the

Company had put its investment to cover almost all areas of Bangkok. On the other hand, it is being seen as

a restriction on business expansion of competitor, which is a benefit to the Company.

2. The Trade Competition Act In 2006, the Trade Competition Commission has adopted its resolution on

the Guideline for Unfair Trade Practices in the Wholesale/Retail Business, by virtue of the Trade Competition

Act B.E. 2542 into 8 ways as follows:

1. Unfair price fixing.

2. Unfair request for economic benefit.

3. Unfair returning of goods.

4. Unfair use of agreement of sell on consignment.

5. Coercion to Purchase or to pay for service fee.

6. Unfair use of personnel of manufacturer/vendor.

7. Refusing to accept products by order/customized made as its own private brand, or of House Brand.

8. Other unfair practices.

Such 8 clauses of Guideline for unfair trade practices have affected the modern retail business. However,

in order to perform the business in conjunction with the above announcement, the Company has agreed with

its business partner in amending the agreement to be more specific and clearer.

3. Draft Wholesale and Retail Business Act The Cabinet has accepted the principle of the draft Wholesale

and Retail Business Act and has also considered the draft proposed by the Trade Representative. However, the

Cabinet have submitted such draft to the Juridicial Counsel for its consideration in order to propose the draft to

the House of Representatives accordingly. In this regard, if the Act is approved, it will affect all major modern

retailers. And also, if the Act is enforced on the Company’s business, it may be an advantage on the Company

due to the fact that the Act will limit the expansion of new incoming business. Therefore, there will be

competition among the original competitors under the same parameters of the laws.

4. Anti-Dumping and Countervailing Act B.E. 2542 (1999) At present, the Company has imported some

categories of goods from overseas. In 2010, there will be also a reduction in import duty for goods imported

from a country that is a party in the Agreement on Economic Cooperation. Therefore, according to the agreement,

a manufacturer in Thailand may possibly file complaint regarding dumping.


Shareholdering Structure

1. Land and Houses Public Company Limited 584,594,145 30.03584,594,145

2. Quality Houses Public Company Limited 412,244,774 21.18412,244,774

3. American International Assurance Company Limited 97,842,182 5.0397,842,182

4. Mr. Niti Osathanuklor 93,863,150 4.8293,863,150

5. Thai NVDR Company Limited 69,124,269 3.5569,124,269

6. Mr. Manit Udomkunnatum 61,119,372 3.1461,119,372

7. SOMERS (UK) LIMITED 50,365,000 2.5950,365,000

8. HSBC (Singapore) Nominees PTE Limited 46,026,580 2.3646,026,580

9. Mr. Khunawut Thumpomkul 26,564,049 1.3626,564,049

10. Sarasin Co., Ltd. 25,309,174 1.3025,309,174

11. Others 479,629,542 24.64479,629,542

Remark The table shows the number of shares before the payment of interim stock dividend on October 27, 2009.

Foreign Limit Foreign shareholders are capable to hold shares and appear their names on the Company’s asset registration

of totaling not exceeding 30% of the issued shares and paid up. As of 30th December 2009, the shares of the

Company held by foreigner was at approximately 17%.

Director who is representative of the group of major shareholders These following directors are the representative of major shareholders which hold shares of the Company at more

than 20%

No. Name - Surname Representative of Position Shareholders

1. Mr. Anant Asavabhokhin Land and Houses Plc. ChairmanLand and Houses Plc.

2. Mr. Rutt Phanijphand Quality Houses Plc. DirectorQuality Houses Plc.

3. Mr. Joompol Meesook Quality Houses Plc. DirectorQuality Houses Plc.

4. Mrs. Suwanna Buddhaprasart Quality Houses Plc. DirectorQuality Houses Plc.

5. Mr. Naporn Soonthornchitcharoen Land and Houses Plc. DirectorLand and Houses Plc.

The first ten shareholders holding the shares on the closing date as of October 15, 2009 having paid-up

registered capital in the total of 1,946,682,237 shares consisting of:

Rank Name of natural person / Juristic Person No. of Shares % of total Paid-up shares


Internal Audit Department

Senior Vice PresidentBusiness Development

Senior Vice PresidentHuman Resource and CentralService

Senior Vice PresidentInformation Technology

Senior Vice PresidentAccounting, Treasury and Legal

Senior Vice PresidentMerchandising - Hard Line

Senior Vice PresidentMerchandising - Soft Line

Senior Vice PresidentMerchandising – Home Electric Product

Senior Vice PresidentInternational Merchandising

Senior Vice PresidentMarketing

Senior Vice PresidentOperation

Senior Vice PresidentDistribution Center

Nomination and Remuneration Commitee

Board of Directors

Managing Director

Executive Directors Audit Committee

Organization Chart


Management

The structure of Company’s management consists of the Board of Directors, Sub-Committees, and Executive

Directors. There are 3 sets of the Sub-Committees i.e. Executive Director, Audit Committee, and Nomination and

Remuneration Committee, having details as follows:

1. Board of Directors has totaling 12 persons, consisting of 4 Independent Directors, 1 Director who is

management, and 7 Non-Executive Directors, as follows:

Authorized Signatory Directors on the Company

1. Mr. Anant Asavabhokhin 5. Mr. Manit Udomkunnatum

2. Mr. Joompol Meesook 6. Mr. Naporn Soonthornchitcharoen

3. Mr. Apichat Natasilapa 7. Mr. Khunawut Thumpomkul

4. Mrs. Suwanna Buddhaprasart

Two of the seventh authorized signatory Directors are to co sign with the company’s stamp.

Roles and Responsibilities of the Board of Directors

1. To manage the Company, in compliance with the Company’s objectives and Articles of Association and

the lawful resolutions of shareholders’ meeting, and has power to perform any act specified in Memorandum

of Association.

2. The Board has power to appoint directors as the Executive Directors in a number as determined by the

Board, comprising of Chief Executive Director, Deputy Chief Executive Directors, who will perform any

tasks designated by the Board of Directors.

3. The Board may appoint any person(s) to operate the Company’s businesses under the supervision of the

Board or empower the said person(s) to have power as deemed suitable by the Board. At the time deemed

appropriate by the Board, the Board may revoke, cancel, or change the said power.

1. Mr. Anant Asavabhokhin Chairman

2. Mr. Rutt Phanijphand Director, Executive Director and Chairman of the Nomination

and Remuneration Committee

3. Mr. Joompol Meesook Director

4. Mr. Apichat Natasilapa Director and Nomination and Remuneration Committee

5. Mrs. Suwanna Buddhaprasart Director

6. Mr. Manit Udomkunnatum Director and Chairman of the Executive Director

7. Mr. Naporn Soonthornchitcharoen Director and Executive Director

8. Mr. Khunawut Thumpomkul Director, Executive Director and Managing Director

9. Mr. Pong Sarasin Independent Director

10. Mr. Apilas Osatananda Independent Director and Chairman of the Audit Committee

11. Mr. Thaveevat Tatiyamaneekul Independent Director and Audit Committee

12. Mr. Chanin Roonsamrarn Independent Director, Audit Committee and Nomination

and Remuneration Committee

No. Name – Surname Position

Remark : 1. Mr. Pong Sarasin has been appointed as the independent director by the resolution of the Board of Directors No. 10/2009, on September 17, 2009.

2. The company secretary is Ms. Wannee Junthamongkol, Senior Vice President - Accounting, Treasury and Legal.


4. The Board must hold a meeting at least once every 3 months.

5. The directors must not operate the business of the same nature as and being in competitive with the

Company’s business or be a partner of the ordinary partnership, or be a partner with unlimited liabilities

of the limited partnership or be a director of a private company or other companies of the same nature

as and being in competition with the Company’s business, whether for his/her benefits or other person(s)

benefits unless it is notified to the shareholders’ meeting prior to the resolution for his/her appointment.

6. The director must immediately inform the Company if he/she has direct or indirect stake in any contract

or even holds shares or debentures in the Company and its affiliates.

7. The director, who has interest in any issue, shall have no right to vote on that issue.

8. Investment propositions concerning store expansion or high value non-routine investments except for the

following issues must be approved by shareholders first:

• Matters that laws and regulations of the Securities and Exchange Commission (SEC) and the Stock

Exchange of Thailand (SET) require the resolutions from the Shareholder’s Meeting.

• The related transaction being worth more than 3% of the latest financial statements’ net tangible assets.

• The acquisition or disposition of core assets with value more than 50% of the latest financial statements’

assets.

9. In the event of tie votes, the Chairman of the Board will have a casting vote.

Definition of Independent Director

“Independent Director” means the director who is independent in expressing his opinion to the operation of

the Company, must be a person who has no involvement or interest to the result of operation either directly or

indirectly. The qualifications of the Independent Director are as follows:

1. Hold share not more than 1% of paid up capital of the Company, affiliates company, joint company,

associated company, including the shares held by the related person.

2. Being independent either directly or indirectly of both financial and management of the Company or joint

company or major shareholders of the Company, and having no benefit or interest in such manner within

2 years before being appointed as the Independent Director, unless the Board of Director has carefully

considered and see that such participation in having benefit or interest will not affect the duty performing

and the independence in giving an opinion.

3. Must not be the Director who has been appointed as the representative to maintain the interest of the

Director of the Company, major shareholders, or shareholders who are related to the major shareholders

of the Company.

4. Must not participate in management and must not be employee, staff or consultant who receives regular

salary in the Company, affiliate company, joint company, company or major shareholder of the Company.

5. Must not be related person or relatives of the executive or major shareholders of the Company.

6. Capable to perform his duty and express opinion or report result of duty performing as assigned by the

Board of Directors, freely and not under the control of the Executive or major shareholders of the Company,

including related person or close relatives of such person.

7. No other character that causes the inability to give opinion to operation of the Company independently.


Name - Surname Position

Terms of the Director of the Company

According to every Annual General Shareholders Meeting, the directors shall retire from the position of one

third, the directors who have been longest in position shall retire. A retiring director is eligible for re-election, and

beside the retirement, the directors may leave from his position when:

1. Death

2. Resignation

3. Lacking of qualifications or possess prohibited character under Section 68 of the Public Company Act B.E. 2535

4. The Shareholders Meeting resolved to dismiss under Section 76 of the Public Company Act B.E. 2535

5. Dismissal ordered by the Court

2. Sub - Committees consist of 3 sets of directors i.e. Executive Directors, Audit Committee, and

Nomination and Remuneration Committee, detail is as follows:

2.1 Executive Directors

Roles and Responsibilities

1. To consider and screen the issue required primary decision marking prior to be proposed for the Board of

Directors’ approval.

2. To consider investment, branches expansion, annual budget allocation and propose the strategies plan to

the Board of Directors.

Terms of holding office

1. Executive Directors shall retire when

1.1 Completion of term

1.2 Leaving from being the Director of the Company

1.3 Resignation

1.4 Death

1.5 The Board of Director has resolution to leave from the position.

2. In case of resigning, the resignation letter shall be submitted to the Chairman of the Company not less

than 30 days in advance, which shall be approved by the Board of Director.

3. In case of any vacancy other than by rotation, the Board of Directors shall appoint person who is qualified

to be Executive Director, in order to fill up number of directors as stipulated in the regulations by the

Board of Directors.

1. Mr. Manit Udomkunnatum Chairman of the Executive Director

2. Mr. Naporn Soonthornchitcharoen Executive Director

3. Mr. Khunawut Thumpomkul Executive Director

4. Mr. Rutt Phanijphand Executive Director



Remark : The Audit Committee’s secretary is Mr. Nitat Aroontippaitoon, Vice President – Internal Audit.

1. Mr. Apilas Osatananda Chairman of the Audit Committee

2. Mr. Thaveevat Tatiyamaneekul Audit Committee

3. Mr. Chanin Roonsumran Audit Committee

2.2 Audit Committee consists of:


1. Review the financial statement of the company to be appropriately made and accurate according to the

Generally Accepted Accounting Principle with sufficient disclosure.

2. Review that the Company has proper and efficient internal control and internal audit system.

3. Review that the Company shall comply with laws regarding securities and Stock Exchange, regulations of

the Stock Exchange of Thailand or laws relating to business of the Company.

4. Consider the related transaction or transaction that may have conflict of interest to be in compliance with

relevant laws and regulations.

5. Review that the Company has proper and efficiency risk management system.

6. Review and jointly consider with the auditor the financial report, remarks and suggestions.

7. Consider, select, propose to appoint person who is independent to be an auditor of the Company and

propose remuneration of the auditor to the Board of Directors of the Company.

8. Consider the independence of internal audit unit, also approve the appointment, relocation and termination

of employment, including to consider result of annual performance of the chief of internal audit.

9. Consider and approve regulations of internal audit office.

10. Consider and approve annual internal audit plan including to consider the scope of audit and audit plan

of internal audit and the auditor of the Company, in order to have supportive connections.

11. Harmonize the understanding into the same line between Audit Committee, management, Internal auditor

and External auditor.

12. Review and consider the result of audit reporting and recommendation.

13. Review and amend the regulations of Audit Committee usually once a year to be up to date and

appropriate with the environment of organization.

14. Carry on examination of the matters notified by the auditor of the Company. In case the auditor finds

doubtful behavior that the director, manager or person who is responsible for the operation of the

Company has committed an offence as stipulated in the Securities and Stock Exchange Act (The 4th Issue)

B.E. 2551, and report the result of preliminary examination to the Office of the Securities Exchange

Commission and auditor of the Company within 30 days from the date receiving notification from the auditor.

15. Perform any other act as stipulated by law or the Board of Directors of the Company under approved by

the Audit Committee.

16. Making report on the directing and supervising of the business activities of the Audit Committee, by

disclosing it in the annual report of the Company, which such report must be signed by the Chairman of

the Audit Committee and must consist of minimum information as follows:

16.1 Opinion in relation to accuracy, completeness, reliability of the financial report of the Company.

16.2 Opinion in relation to sufficiency of internal control system of the Company.



16.3 Opinion in relation to the compliance with the law of Securities and Stock Exchange and regulations

of the Stock Exchange or law relating to business of the Company.

16.4 Opinion in relation to the appropriate of the External auditor.

16.5 Opinion in relation to the transaction that may have a conflict of interest.

16.6 Number of the Audit Committee’s meeting, and the attending to the meeting of each Audit Committee.

16.7 Overview opinion or remarks that the Audit Committee have received from performing his duty

under the charter.

16.8 Other information that the shareholders and general investors ought to know, under the scope of duty

and responsibility which have been assigned by the Board of Directors of the Company.


1. Taking position for 3 years of each time, including additional appointment and removal from Audit Committee.

2. In case retire from position, such person may be re-appointed.

3. Audit Committee shall leave from the position when:


3.2 Leave from being a director of the Company

3.3 Resignation

3.4 Death

3.5 Lacking of qualification to be an Audit Committee under this regulations or by the rules of the Stock

Exchange of Thailand.

3.6 The Board of Director has resolution to remove from the position.

4. In case of resigning, the resignation letter shall be submitted to the Chairman of the Company not less than

30 days in advance, the approval shall be made by Board of Directors who shall then send copy of resignation

letter to the Stock of Exchange of Thailand.

5. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualified to

be an Audit Committee in order to fill up the number of Audit Committee as stipulated in regulations. Persons

who will be appointed as the Audit Committee shall be in position only for the time period remaining of the

former Audit Committee, and shall inform the Stock of Exchange of Thailand.

2.3 Nomination and Remuneration Committee consists of:

Remark: The Nomination and Remuneration Committee’s secretary is Mr. Thee Phromphol, Senior Vice President - Human Resource and Central Service.

1. Mr. Rutt Phanijphand Chairman of the Nomination and Remuneration Committee

2. Mr. Chanin Roonsumrarn Nomination and Remuneration Committee

3. Mr. Apichat Natasilapa Nomination and Remuneration Committee




1. Select persons who deserve to be nominated as the new Directors, or select of Managing Director.

2. Determine the procedures and regulations on selection of Directors or Managing Director to ensure the

transparency.

3. Set up the procedures and criterions of paying which have been fair and proper remuneration and other

benefits to the Board of Directors and Sub-Committee appointed by the Board of Directors, and then

propose to the Shareholders meeting for approval.

4. Consider and guide on determining remuneration and other benefits concerning duty and responsibility of

the Managing Director including consider the criterions and evaluation of operation in order to determine

annual remuneration from the operation.

5. Review the structure of criterions of remuneration on items 3 and 4 to fit with duty, responsibility, operation

result of the Company, and harmonized with market condition.

6. Consider salary budget, annual merit increase and annual reward, welfare, including other benefits of

personnel of the Company and its subsidiary.

7. Prepare operation report presenting to the Board of Directors at least once a year. Set up policy of overall

Employee Stock Option Plan as proposed by the Managing Director.

8. Perform other duties as assigned by the Board of Directors.


1. Nomination and Remuneration Committee shall leave from the position when


1.2 Leave from being a Director of the Company

1.3 Resignation

1.4 Death

1.5 The Board of Director has resolution to remove from position.

2. In case of the resigning, the resignation letter shall be submitted to the Chairman of the Company of not

less than 30 days in advance, approved by the Board of Directors.

3. In case of any vacancy other than by rotation, the Board of Director shall appoint person who is qualified

to be the Nomination and Remuneration Committee, in order to fill up the number as stipulated in the

regulations by the Board of Directors.

Selection of Directors

The Company appointed the Nomination and Remuneration Committee to determine selection of appropriate

person to be nominated as the Director or Managing Director, by considering persons who have knowledge,

capability and experience as required by the Company, and must not have the prohibited qualification under the

rules of the Securities Exchange Commission and Stock Exchange of Thailand, the relevant laws, rules or other

regulations., upon approval, the Nomination and Remuneration Committee will propose to the Shareholders Meeting

in order to be adopted for the appointing as the Directors of the Company.

Criteria of vote to appoint the Company’s Director in the Shareholders Meeting:

1. Each Shareholder has the vote equivalent to one vote per one share held.

2. Each Shareholder shall use all of his/her voting rights under item 1 to elect one person or more persons

as the Director, but is not capable to share his/her varied voting rights to any person.


3. A person, who receives highest votes gradually order would be elected as director subject to the number

of Directors allowed to be elected in such meeting. In the event of persons who have been elected in the

lower order have received equal votes but there will be over the number of allowed or elected Directors

in such election, the Chairman of such Meeting shall have a casting vote.

In 2009, there were 4 Directors who must be retired by rotation as follows: 1. Mr. Naporn Soonthornchit-

charoen 2. Mr. Rutt Phanijphand 3. Mr. Manit Udomkunnatum and 4. Mr. Apilas Osatanon. The Nomination and

Remuneration Committee, having considered in accordance with the criteria of selection, viewed that all 4 directors

have the qualifications required according to the Public Limited Company Act B.E. 2535 and also have knowledges,

abilities, and experiences in business relating to the Company’s operation. In this regard, such matter has been

proposed through the resolution of the board of directors of the Company in order to be presented as an agenda

in the Annual General Meeting of Shareholders of the Year 2009 in which the meeting, then, has approved to

re-appoint the said directors to their office for another term.

Roles and Responsibilities of Managing Director

As resolved in the Board of Directors Meeting no. 7/2544 on 21st June 2001 and the Board of Directors Meet-

ing no. 9/2544 on 16th August 2001, the Managing Director who has authority to manage the Company as as-

signed by the Board of Directors and shall strictly and carefully manage the Company according to the framework

or budget approved by the Board of Directors, and maintain the best interest of the Company and shareholders.

Authorization of the Directors also covers other matters as follows:

1. Daily Operation and, management of the Company.

2. Approval of expense on operation, expense of selling and administrative and capital expenditure according

to the budget approved by the Board of Directors, however, not including the loan and guarantee.

3. Filling the post, appointing, removing, relocating, promoting, reducing or cutting salary or wages, disciplinary

punishment to the staff and employees, and order the staff and employee to leave from position according

to the regulations as stipulated by the Board of Directors.

4. Other operation as assigned by the Board of Directors, by having following authorities:

• Having authority to administrate under the objectives, regulations, policy, rules, order, and resolution

of the Board of Directors meeting and the resolution of the Shareholders Meeting.

• Having authority to operate and enter into juristic act, agreement, order or any letter for contacting

with the government authority, State Enterprise, and other person, including authorities to act as

necessary and proper in order to succeed on the above mentioned acts.

• Having authority to appoint other person to be proxy to act on specific work, which must be under

the rules, regulations, or order that the Board of Directors or as imposed by the Company.

However, the Managing Director is unable to approve transaction that himself or person who may have

conflict of interest in any other ways with the Company or its subsidiary.

Secretary of the Company

On 20th March 2008, the Board of Directors has resolution to appoint Ms. Wannee Juntamongkol as the

Secretary of the Company in order to comply with the “Securities and Stock Exchange Act (4th Issue) B.E. 2551”.

The Company has already notified the name and place to retain documents of the Company to the Securities and

Exchange Commission on 26th August 2008.


Name - Surname Position Department

Authority of Secretary of the Company

1. Facilitate for activities of the Board of Directors.

2. Follow up and coordinate with relevant person in order to be in compliance with the resolution of the

Board of Directors, and closely report the result of such operation.

3. Arrange and maintain documents as follows:

• Director registration.

• Notice calling for the Board of Directors Meeting, Minutes of the Board of Directors Meeting, and the

Annual Report of the Company.

• Notice calling for the Shareholders Meeting and Minutes of the Shareholders Meeting.

4. Maintain the report on interests which have been reported by the directors or executives.

5. Manage other matters as stipulated by the Capital Market Supervisory Board.

3. Management consists of:

1. Mr. Khunawut Thumpomkul Managing Director

2. Mr. Vathunyu Visuthikosol Senior Vice President Business Development

3. Mr. Anuchar Jitjaturunt Senior Vice President Merchandising - Hard Line

4. Ms. Jarusopha Thumkathikanon Senior Vice President Merchandising - Soft Line

5. Ms. Tharathip Trimankhong Senior Vice President International Merchandising

6. Mr. Weerapun Ungsumalee Senior Vice President Operation

7. Mr. Thee Phromphol Senior Vice President Human Resource and Central Service

8. Ms. Jariya Sorathorn Senior Vice President Merchandising - Home Electric Products

9. Mr. Nat Jaritchana Senior Vice President Marketing

10 Mr. Chaiyuth Karunyasopon Senior Vice President Distribution Center

11. Mr. Hanchai Laowpanitchakorn Senior Vice President Information Technology

12. Ms. Wannee Juntamongkol Senior Vice President Accounting, Treasury and Legal


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ion

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mitt

ee

- Ba

chelor

Deg

ree

of Scien

ce

2009

- P

rese

nt

Cha

irman

of E

xecu

tive

Dire

ctor

LH

Fin

ancial G

roup

Plc.

Fina

ncia

l ins

titut

ion

Ka

setsar

t Unive

rsity

20

06 - P

rese

nt

Dire

ctor

and

Aud

it Com

mitt

ee

IRPC

Plc.

Petroc

hem

ical

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

20

05 - P

rese

nt

Dire

ctor

and

Chief

Exe

cutiv

e Di

rector

La

nd a

nd H

ouse

Ban

k Re

tail Plc.

Fina

ncia

l ins

titut

ion

Di

rector

Acc

redita

tion

Prog

ram

Inde

pend

ent D

irector

Ba

npu

Plc.

Ener

gy

(D

AP) 20

03

2001

- P

rese

nt

Dire

ctor

Pre

side

nt a

nd

Qua

lity Ho

uses

Plc.

Prop

erty d

evelop

men

t

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Chief

Exe

cutiv

e Offi

cer

Di

rector

Cer

tificat

ion

Prog

ram

Dire

ctor

Q.H

. Int

erna

tiona

l Co.

, Ltd

. (BV

I)

Ove

rsea

s pr

oper

ty d

evelop

men

t(D

CP)

200

5

Mr.

Joom

pol

Meeso

ok

60

- MBA

Tha

mm

asat

Unive

rsity

0.03

-

2001

- P

rese

nt

Dire

ctor

Ho

me

Prod

uct C

ente

r Plc.

Hom

e im

prov

emen

t ret

ailin

g

Dire

ctor

- BS

.ARC

H, F.E.U

., Ph

ilipp

ines

20

06 - P

rese

nt

Dire

ctor

Cen

tre

Point M

anag

emen

t Co.

, Ltd

Bu

ildin

g m

anag

emen

t

- BS

.CE, F.E.U

., Ph

ilipp

ines

20

04 - 201

0 Di

rector

Q-C

on Eas

tern

Co.

, Ltd

Con

stru

ction

supp

lies m

anuf

actu

ring

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

19

97 - P

rese

nt

Dire

ctor

Q.H

. Int

erna

tiona

l Co.

, Ltd

(BV

I)

Ove

rsea

s pr

oper

ty d

evelop

men

t

Di

rector

Acc

redita

tion

Prog

ram

Dire

ctor

Ha

rbou

rview C

o., L

td

Hote

l in

over

seas

(D

CP)

200

8

19

95 - P

rese

nt

Dire

ctor

Q.H

. Int

erna

tiona

l Co.

, Ltd

.

Prop

erty d

evelop

men

t

1994

- 201

0 Di

rector

Qua

lity Con

stru

ction

Prod

ucts P

lc.

Con

stru

ction

supp

lies m

anuf

actu

ring

1993

- P

rese

nt

Dire

ctor

Ca

sa C

o., L

td.

Prop

erty d

evelop

men

t

Di

rector

and

Adv

isor

of P

reside

nt a

nd

Qua

lity Ho

use

Plc.

Prop

erty d

evelop

men

t

Chief

Exe

cutiv

e Di

rector

1992

- P

rese

nt

Dire

ctor

Q.H

Man

agem

ent C

o., L

td

Projec

t afte

r-sa

le ser

vice

Boar

d of

Dire

ctor

s In

form

atio

n as

of D

ecem

ber 3

1, 200

9

** At th

e pr

esen

t, M

r. An

ant i

s th

e di

rector

of

5 li

sted

com

panies

and

7 n

on-list

ed

com

panies

which

are

not

doi

ng bus

ines

s co

mpe

ting with

the

Com

pany

.

** At the

pre

sent

, M

r. Ru

tt is th

e di

rector

of

5 li

sted

com

panies

and

2 n

on-list

ed

com

panies

which

are

not

doi

ng bus

ines

s co

mpe

ting with

the

Com

pany

.

** At th

e pr

esen

t, Mr.

Joom

pol is t

he d

irector

of 2

listed

com

panies

and

6 n

on-list

ed

com

panies

which

are

not

doi

ng bus

ines

s co

mpe

ting with

the

Com

pany

.

** At th

e pr

esen

t, Mr.

Apicha

rt is

the

dire

ctor

of 1

listed

com

panies

and

2 n

on-list

ed

com

panies

which

are

not

doi

ng bus

ines

s co

mpe

ting with

the

Com

pany

.

Mr. A

picha

t Na

tasilp

a52

- MBA

, Unive

rsity

of S

outh

ern

Califor

nia

- -

2001

- P

rese

nt

Dire

ctor

and

Nom

inat

ion

Hom

e Pr

oduc

t Cen

ter P

lc.

Hom

e im

prov

emen

t ret

ailin

g

Dire

ctor

and

Cha

irman

of

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

and

Remun

erat

ion

Com

mitt

ee

the

Nom

inat

ion

and

Remun

erat

ion

Di

rector

Acc

redita

tion

Prog

ram

19

99 - P

rese

nt

Dire

ctor

Pi

ne B

ridge

(Th

ailand

) Lim

ited

Inve

stm

ent c

onsu

ltant

Com

mitt

ee

(D

AP) 20

04

Di

rector

Millen

nium

Micro

tech

Sem

icon

ductor

pack

agin

g

(Tha

iland

) Co.

, Ltd

**

Nam

e -

Surn

ame

Age

Educ

atio

n

Prop

or-

tiona

l of

sh

are

inCo

mpa

ny

%

Fam

ilyre

latio

nshi

p w

ith th

e m

anag

e-m

ent

Expe

rienc

e in

5 y

ears

Durin

gPo

sitio

nCo

mpa

ny N

ame

Type

of B

usin

ess


Mrs.

Suwa

nna

Budd

hapra

sart

54

- MBA

Chu

lalong

korn

Unive

rsity

-

- 20

03 - P

rese

nt

Dire

ctor

Ho

me

Prod

uct C

ente

r Plc.

Hom

e im

prov

emen

t ret

ailin

gDi

rector

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

20

05 - P

rese

nt

Dire

ctor

La

nd a

nd H

ouse

Ret

ail B

ank Plc.

Fina

ncia

l ins

titut

ion

Di

rector

Cer

tificat

ion

Prog

ram

20

03 - P

rese

nt

Dire

ctor

Ca

sa V

ille

Co.

, Ltd

. Pr

oper

ty d

evelop

men

t

(D

CP)

200

7

20

00 - P

rese

nt

Dire

ctor

and

Sen

ior V

ice

Pres

iden

t Qua

lity Ho

use

Plc.

Prop

erty d

evelop

men

t

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Dire

ctor

Q.H

. Int

erna

tiona

l Co.

, Ltd

Pr

oper

ty d

evelop

men

t

Di

rector

Acc

redita

tion

Prog

ram

Dire

ctor

Cen

tre

Point M

anag

emen

t Co.

, Ltd

Bu

ildin

g m

anag

emen

t

(D

AP) 20

04

Di

rector

Th

e Con

fiden

ce C

o., L

td.

Prop

erty d

evelop

men

t

Mr. M

anit

Udo

mkun

atum

64

- Se

cond

ary

3.14

-

2000

- P

rese

nt

Dire

ctor

an

d

Hom

e Pr

oduc

t Cen

ter P

lc.

Hom

e im

prov

emen

t ret

ailin

gDi

rector

and

Exe

cutiv

e Di

rector

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Cha

irman

of t

he Exe

cutiv

e Com

mitt

ee

Di

rector

Acc

redita

tion

Prog

ram

20

04 - P

rese

nt

Dire

ctor

L. U

. K. C

o.,Ltd

. Man

agem

ent s

ervice

(D

AP) 20

04

2003

- P

rese

nt

Dire

ctor

R.

L. P

. Co.

,Ltd

. Ho

ldin

g

2002

- P

rese

nt

Dire

ctor

Ph

uket

Res

ort C

lub

Co.

, Ltd

. Ho

tel

Di

rector

Ph

uket

Pat

ong Club

Co.

,Ltd

. Ho

tel

2001

- P

rese

nt

Cha

irman

of t

he Exe

cutiv

e Com

mitt

ee

USI Ho

ldin

g Co.

,Ltd

. Ho

ldin

g

Di

rector

Th

anan

onse

e Co.

, Ltd

Ho

ldin

g

2000

- P

rese

nt

Dire

ctor

Ra

n gsit P

laza

Co.

, Ltd

De

partm

ent s

tore

Mr. N

aporn

Soo

nthorn

chitch

aroen

51

- MBA

Tha

mm

asar

t Unive

rsity

-

- 19

95 - P

rese

nt

Dire

ctor

and

Exe

cutiv

e Di

rector

Ho

me

Prod

uct C

ente

r Plc.

Hom

e im

prov

emen

t ret

ailin

gDi

rector

and

Exe

cutiv

e Di

rector

- Ba

chelor

of C

ivil En

gine

erin

g

2005

- P

rese

nt

Dire

ctor

La

nd a

nd H

ouse

Ban

k Re

tail Plc.

Fina

ncia

l ins

titut

ion

Chian

gmai U

nive

rsity

20

02 - P

rese

nt

Dire

ctor

and

Sen

ior V

ice

Pres

iden

t

Land

and

Hou

se P

lc.

Prop

erty d

evelop

men

t

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

19

95 - P

rese

nt

Dire

ctor

La

nd a

nd H

ouse

Nor

th-E

ast C

o.,Ltd

. Pr

oper

ty d

evelop

men

t

Di

rector

Cer

tificat

ion

Prog

ram

Dire

ctor

La

nd a

nd H

ouse

Nor

th C

o.,Ltd

. Pr

oper

ty d

evelop

men

t

(D

CP)

200

5

19

95 - 200

4 Di

rector

As

sets P

lus Se

curit

ies Plc.

Mut

ual fun

d

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

19

94 - P

rese

nt

Dire

ctor

Qua

lity Con

stru

ction

Prod

ucts P

lc.

Con

stru

ction

supp

lies

Di

rector

Acc

redita

tion

Prog

ram

19

94 - P

rese

nt

Dire

ctor

Ba

ngko

k Cha

in H

ospita

l Plc.

Hosp

ital

(D

AP) 20

04

Mr. K

huna

wut

Thum

pomk

ul52

- MBA

Nat

iona

l Ins

titut

e of

1.39

-

1995

- P

rese

nt

Dire

ctor

Exe

cutiv

e Di

rector

and

Ho

me

Prod

uct C

ente

r Plc.

Hom

e im

prov

emen

t ret

ailin

gDi

rector

, Exe

cutiv

e Di

rector

and

Deve

lopm

ent A

dminist

ratio

n

Man

agin

g Di

rector

Man

a gin

g Di

rector

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Di

rector

Cer

tificat

ion

Pro g

ram

(D

CP)

200

1

Boar

d of

Dire

ctor

s In

form

atio

n as

of D

ecem

ber 3

1, 200

9

Nam

e -

Surn

ame

Age

Educ

atio

n

Prop

or-

tiona

l of

sh

are

inCo

mpa

ny

%

Fam

ilyre

latio

nshi

p w

ith th

e m

anag

e-m

ent

Expe

rienc

e in

5 y

ears

Durin

gPo

sitio

nCo

mpa

ny N

ame

Type

of B

usin

ess

** At th

e pr

esen

t, Mrs.

Suwan

na is th

e dire

ctor

of 2

listed

com

panies

and

7 n

on-list

ed

com

panies

which

are

not

doi

ng bus

ines

sco

mpe

ting with

the

Com

pany

.

** At the

pre

sent

, Mr.

Man

it is

the

dire

ctor

of 1 listed

com

panies

and

16 no

n-lis

ted

com

panies

which

are

not

doi

ng bus

ines

sco

mpe

ting with

the

Com

pany

.

** At th

e pr

esen

t, Mr.

Nap

orn

is th

e dire

ctor

of 4 listed

com

panies

and

10 no

n-lis

ted

com

panies

which

are

not

doi

ng bus

ines

sco

mpe

ting with

the

Com

pany

.

** At th

e pr

esen

t, M

r. Kh

unaw

ut is

the

dire

ctor

for t

he C

ompa

ny o

nly.


Mr. P

ong

Saras

in 82

- Ph

.D. (

Hon.

) Bu

sine

ss A

dmin

istra

tion

0.22

-

1995

- P

rese

nt

Dire

ctor

Ho

me

Prod

uct C

ente

r Plc.

Hom

e im

prov

emen

t ret

ailin

g

Inde

pend

ent D

irector

Chu

lalong

korn

Unive

rsity

20

00 - P

rese

nt

Cha

irman

of T

he B

oard

of D

irector

Th

ai N

amth

ip Ltd

. So

ft dr

ink distrib

ution

1996

- P

rese

nt

Cha

irman

of T

he B

oard

of D

irector

Sh

angr

i-La

Hot

el P

lc.

Hote

l

Di

rector

Ta

raro

m Ent

erpr

ise

Plc.

Prop

erty d

evelop

men

t

1994

- P

rese

nt

Dire

ctor

Qua

lity Con

stru

ction

Prod

ucts P

lc.

Con

stru

ction

supp

lies

Roja

na Ind

ustria

l Par

k Plc.

Prop

erty d

evelop

men

t

Sam

mak

orn

P lc.

Prop

erty d

evelop

men

t

1990

- P

rese

nt

Dire

ctor

Cro

wn

sea l P

lc.

Cro

wn

cap

man

ufac

turin

g

Di

rector

As

ian

Prop

erty D

evelop

men

t Plc.

Prop

erty d

evelop

men

t

Mr.

Apila

s Os

atana

nda

75

- Ph

.D. I

n Ag

ricultu

ral T

echn

olog

y -

- 20

01 - P

rese

nt

Inde

pend

ent D

irector

an

d Ho

me

Prod

uct C

ente

r Plc.

Hom

e im

prov

emen

t ret

ailin

g

Inde

pend

ent D

irector

and

- T h

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Cha

irman

of t

he A

udit

Com

mitt

ee

Cha

irman

of t

he A

udit

Com

mitt

ee

Di

rector

Acc

redita

tion

Prog

ram

19

96 - 200

9 Cha

irman

To

kyo

Leas

ing

Leas

ing

(D

AP) 20

04

Mr.

Thav

eeva

t Ta

tiyam

anee

kul

64

- Pr

imar

y -

- 20

01 - P

rese

nt

Inde

pend

ent D

irector

and

Ho

me

Prod

uct C

ente

r Plc.

Hom

e im

prov

emen

t ret

ailin

g

Inde

pend

ent D

irector

and

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Au

dit C

omm

ittee

Au

dit C

omm

ittee

Di

rector

Acc

redita

tion

Pro g

ram

19

89 - P

rese

nt

Cha

irman

of E

xecu

tive

Dircto

r Star

Fas

hion

Co.

, Ltd

Ap

pare

l man

ufac

ture

and

dist

ribut

or

(D

AP) 20

04

Mr.

Chan

in Ro

onsam

rarn

62

- MBA

, For

t H

ays Stat

e Un

iver

sity

- -

2005

- P

rese

nt

Inde

pend

ent D

irector

, Aud

it Com

mitt

ee

Hom

e Pr

oduc

t Cen

ter P

lc.

Hom

eim

prov

emen

t ret

ailin

g

Inde

pend

ent D

irector

,

Ka

nsas

, USA

.

and

Nom

inat

ion

and

Remun

erat

ion

Au

dit C

omm

ittee

and

Nom

inat

ion

- Th

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Com

mitt

ee

and

Remun

erat

ion

Com

mitt

ee

Di

rector

Cer

tificat

ion

Pro g

ram

20

02 - 200

9 Cha

irman

, Chief

Exe

cutiv

e Di

rector

SI

CCO

Sec

uriti

es P

lc.

Secu

rities

(D

CP)

200

2

and

Remun

erat

ion

Com

mitt

ee

- T h

ai Ins

titut

e of

Dire

ctor

s As

sociat

ion

Di

rector

and

Chief

Exe

cutiv

e Di

rector

SI

CCO

Adv

isor

Co.

, Ltd

.

Fina

ncia

l adv

isor

Th

e Ro

le o

f Cha

irman

(RC

M) 20

02

2003

- P

rese

nt

Dire

ctor

, Hum

an R

esou

rce

and

The

Siam

Com

mer

cial Sam

aggi

Insu

ranc

e

Re

mun

erat

ion

Dire

ctor

In

sura

nce

Plc.

1996

- 200

9 In

depe

nden

t Dire

ctor

, Aud

it Com

mitt

ee

The

Siam

Ind

ustria

l Cre

dit P

lc.

Fina

ncia

l ins

titut

ion

an

d Re

mun

erat

ion

and

Nom

inat

ion

Com

mitt

ee

1986

- P

rese

nt

Inde

pend

ent D

irector

, Aud

it Com

mitt

ee,

Thai R

eins

uran

ce P

lc.

Insu

ranc

e

Re

mun

erat

ion

Com

mitt

ee a

nd

Nom

inat

ion

Com

mitt

ee

Boar

d of

Dire

ctor

s In

form

atio

n as

of D

ecem

ber 3

1, 200

9

** At the

pre

sent

, M

r. Po

ng is

the

dire

ctor

of

7 li

sted

com

panies

and

5 n

on-list

ed

com

panies

which

are

not

doi

ng bus

ines

s co

mpe

ting with

the

Com

pany

.

** At th

e pr

esen

t, M

r. Ap

ilas is

the

dire

ctor

for t

he C

ompa

ny o

nly.

** At th

e pre

sent

, Mr. Th

avee

vat is th

e dire

ctor

of 1

listed

com

panies

and

1 n

on-list

ed

com

panies

which

are

not

doi

ng bus

ines

s co

mpe

ting with

the

Com

pany

.

** At th

e pr

esen

t, M

r. Cha

nin is th

e di

rector

of 3

list

ed c

ompa

nies

which

are

not

doin

g bu

sine

ss c

ompl

etin

g with

the

Com

pany

.Nam

e -

Surn

ame

Age

Educ

atio

n

Prop

or-

tiona

l of

sh

are

inCo

mpa

ny

%

Fam

ilyre

latio

nshi

p w

ith th

e m

anag

e-m

ent

Expe

rienc

e in

5 y

ears

Durin

gPo

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Detail of Directors and Management who are Authorized to Control Subsidiary

Remuneration for the Directors and the Executives1. Remuneration for the Directors

Basis of remuneration for the Directors are remuneration for giving advice on any matters to working

team of the Company and fees for the meeting, which the Company normally has at least the Board of

Directors Meeting once a month, and the Meeting of sub-committees, i.e. Audit Committee Meeting, Executive

Committee Meeting, Nomination and Remuneration Committee Meeting.

The Nomination and Remuneration Committee and the Company’s board of directors have considered

to specify the remuneration for directors by relying on the Company’s overall operating results, the payment

of dividends to shareholders, obligations and responsibilities of each committee. For the criteria of remuneration

payment, the Company will base on the same criteria as used for the payment of the director’s remuneration

of the Company which operates in the same type of business.

Name - Surname Home Product Center Plc. Market Village Co., Ltd. (Subsidiary)

1. Mr. Anant Asavabhokhin Chairman of the Board of Directors -

2. Mr. Rutt Phanijphand Director -

3. Mr. Joompol Meesook Director -

4. Mr. Apichat Natasilpa Director -

5. Mrs. Suwanna Buddhaprasart Director -

6. Mr. Manit Udomkunnatum Director -

7. Mr. Naporn Soonthornchitcharoen Director -

8. Mr. Khunawut Thumpomkul Director Chairman of the Board of Directors

9. Mr. Pong Sarasin Independent Director -

10. Mr. Apilas Osatananda Independent Director -

11. Mr. Thaveevat Tatiyamaneekul Independent Director -

12. Mr. Chanin Roonsamrarn Independent Director -

13. Mr. Vathunyu Visuthikosol Senior Vice President Director

14. Mr. Anuchar Jitjaturunt Senior Vice President -

15. Ms. Jarusopha Thumkathikanon Senior Vice President -

16. Ms. Tharathip Trimankhong Senior Vice President -

17. Mr. Weerapun Ungsumalee Senior Vice President -

18. Mr. Thee Phromphol Senior Vice President Director

19. Ms. Jariya Sorathorn Senior Vice President -

20 Mr. Nat Jaritchana Senior Vice President -

21. Mr. Chaiyuth Karunyasopon Senior Vice President -

22. Mr. Hanchai Laowpanitchakorn Senior Vice President -

23. Ms. Wannee Juntamongkol Senior Vice President Director


Name - Surname

Meeting Allowances

Pension Total(Baht) Board of

DirectorExecutive Director

Audit Committee

Nominationand

RemunerationCommittee

1. Mr. Anant Asavabhokhin 1,115,000 - - - 1,076,923 2,191,9231,076,923

2. Mr. Rutt Phanijphand 615,000 180,000 - 100,000 538,462 1,433,462538,462

3. Mr. Joompol Meesook 615,000 - - - 538,462 1,153,462538,462

4. Mr. Apichat Natasilapa1 615,000 - - 45,000 538,462 1,198,462538,462

5. Mrs. Suwanna Buddhaprasart 615,000 - - - 538,462 1,153,462538,462

6. Mr. Manit Udomkunnatum 600,000 300,000 - - 538,462 1,438,462538,462

7. Mr. Naporn Soonthornchitcharoen 600,000 165,000 - - 538,462 1,303,462538,462

8. Mr. Khunawut Thumpomkul2 615,000 180,000 - - 538,462 1,333,462538,462

9. Mr. Pong Sarasin 540,000 - - - 538,462 1,078,462538,462

10. Mr. Apilas Osatananda 615,000 - 300,000 - 538,462 1,453,462538,462

11. Mr. Thaveevat Tatiyamaneekul 615,000 - 165,000 - 538,462 1,318,462538,462

12. Mr. Chanin Roonsamrarn 600,000 - 180,000 60,000 538,462 1,378,462538,462

Total 7,760,000 825,000 645,000 205,000 7,000,000 16,435,000 7,000,000

On 8th April 2009, the Shareholders Meeting of 2009 has a resolution to grant the annual remuneration

not exceeding Baht 12 million and pension to the directors not exceeding Baht 7 million. Details of remuneration

payment are as follows:

1. Monthly Remuneration

• Chairman Baht 70,000 /person/ month

• Director Baht 35,000 /person/ month

2. Remuneration for Meeting for the Board of Directors Meeting and Sub-Committee Meeting whichg

shall be paid according to the number of meeting attendance.

• Chairman Baht 25,000 /person/ month

• Director Baht 15,000 /person/ month

Remark : 1. Mr. Apichat Natasilapa, an authorized person of the American International Assurance Company Limited, received remuneration in the name the

American International Assurance Company Limited, which was renamed to Pine Bridge (Thailand) Limited in October 2009.

2. Mr. Khunawut Thumpomkul, holding the position of Director and Managing Director, received compensation as the meeting allowance and Director’s

fee. However, salary and bonus were included in the remuneration of the Executive.


On December 31, 2009, the Company had a total of 5,269 permanent employees with related expenses of

Baht 1,437 million.

Number of Employees 31 Dec 2009 31 Dec 2008 31 Dec 2007

Head Office 1,420 1,232 1,174

Branches 3,849 3,662 2,838

Total (persons) 5,269 4,894 4,012

Number of Branches 36 35 32

2. Remuneration for the Executives

The Company has criteria on the making of payment of the remuneration to the Executives by considering

from knowledge, capability, experience, and performance, and by comparing with other companies in the same

industry.

Remuneration of 12 Executives for the year 2008 and 2009 consisted of salary, bonus, and other remunerations

for the total amount of Baht 45.2 million and Baht 50.3 million respectively. Moreover, the Executives of the Company

have also received other remunerations in form of warrant to buy ordinary shares of the Company.

Human Resources Detail of numbers of employee during year 2007-2009.

Remark: The number of employees in each year already includes some of employees of the branches which will be opened next year.


Corporate Governance

The Board of Directors realizes the importance of Corporate Governance and believes that the good Corporate

Governance is the crucial factor for business operation, in order to efficiently and effectively manage the business

to have stability, continuous growth and fairness to all stakeholders. From such reasons, the Board of Directors

stipulates the Corporate Governance Policy, having content covering the important principle on the rights of

shareholders, equitable treatment to shareholders, considering to the roles of interest person, disclosure of

information and transparency, and responsibility of the Directors, in order to be guideline for managing business to

achieve the company’s objectives and goal that have been set according to business policy sticking to correctness

and transparency. The policy of Corporate Governance of the Company is disclosed at www.homepro.co.th/ir/

investor_th.html

1. Rights of Shareholders The Board of Directors of the Company gives the importance to the right of shareholders by not performing

any act that violates or lessens the rights, and to facilitate the exercise of rights on various matters. It is then the

guideline of operation is set in order to ensure that shareholders that they will be protected under the basic rights

as follows:

• The Company gives an opportunity to the shareholders to propose agenda and propose the name list to

be appointed as directors, including to pass question about the Company in the shareholders meeting in

advance, which the company has notified the rules and supplementary documents on the web site of the

Company since 12th December 2008. However, shareholders may submit such question until 30th January 2009.

• The Company has delivered the notice calling for the meeting with information, documentation supplement

to each agenda with proxy to shareholders 7 days prior to the meeting date, or as stipulated by law of

both Thai and English language, including the Company’s Articles of Association in relation to the Shareholders

Meeting and casting of vote.

• In case the shareholders are unable to attend the meeting, they may give proxy to the Independent

Directors in casting the vote instead or may indicate their own vote. In 2009, the Company has arranged

for Mr. Chanin Roonsamrarn to be the proxy director.

• Prior to the meeting commencement, the Board of Directors will explain to the shareholders to acknowledge

the rights under the Articles of Association of the Company, the proceeding of the meeting, casting the

vote, including the giving of the rights to shareholders to raise questions and express opinion equally.

• After the meeting, the Company will notify the meeting minutes to the Stock Exchange of Thailand (SET)

within the time frame specified by the SET, together with detail of voting result in each agenda. Generally,

the meeting minutes will be reported to the SET within 14 days and also publicized it on web site of the

Company.

2. Equitable Treatment of Shareholders The Company, being aware of the importance, ensures that the every shareholder, whether executive

shareholders, non-executive shareholders, and foreign shareholders should receive equitable and fair treatment.

The Company has policy to prevent the use of inside information which is prescribed in the ethic handbook,

and has disclosed to staff, executive, and director of the Company. The policy and method to control executive

in private use of internal information of the Company are as follows:

• Provide knowledge to executive in each department in relation to duty that executive shall report the

holding of securities of the Company and penalty under the Securities and Stock Exchange Act B.E. 2535

and under the regulations of the Stock Exchange of Thailand.


• The Company has required the executive to report the change of securities holding to the Office of

Securities and Stock Exchange Commission under Section 59 of the Securities and Stock Exchange Act

B.E. 2535, and delivered copy of such report to the Company on the same day as sending to the Securities

and Stock Exchange Commission.

• The Company has notified to the executive to restrain from the purchase and sale of securities of the

Company 1 month before disclosing of financial statements or inside information to the public, and the

disclosure of material information to other person is not allowed and such has been notified via e-mail

every quarter.

However, if there is the violation of regulations mentioned above, the Company will proceed with discipline

punishment as appropriate as the case may be.

3. Roles of Stakeholders The Company has stipulated the regulations for the interest person in the “Handbook of Business Ethic” of the

Company in order to ensure that the Company will comply with in order to provide the rights to interest person

under the relevant laws, whether the shareholder, staff, customer, business partner, community, society, and

environment. Moreover, the Company has also strengthen cooperation with the interest person in each groups

in order to be able to ensure business sustainability with the fair benefits to all parties, in order to build the

long-term success.

Shareholder Shareholders and interest person may file complaint, or communicate or notify matters relating to the

Company through the director or audit committee at www.homepro.co.th/ir/investor_th.html

• Communication with the Director of the Company. In case requiring for notifying or communicating in

relation to operation of the Company, by such information will be sent to the Managing Director.

• Communication with the Audit Committee. In case requiring for filing complaint in relation to violation

of laws or ethics, accounting doubt, internal controlling, etc. Such information shall be sent to the

office of internal audit of the Company in order to be compiled and proposed to the Audit Committee

for further consideration.

Business Partner The Company complies with the Trade Competition Act according to the resolution of the Trade Competition

Commission in year 2006, announced to be as Guideline for Unfair Trade Practices in the Wholesale/Retail

Business by virtue of the Trade Competition Act B.E. 2542.

To be able to operate business according to the above announcement, the Company has mutually agreed

with business partner to amend the provision of the agreement to be more specific and clearer.

Employee The Company realises that the employees are significant resource for achieving the business goals. The

Company, therefore, has a policy to fairly treat its employees in terms of compensation, the progress in their

careers, appointing and adjusting their positions, including developing their potentials in which, throughout

the time, the Company has looked after its employees on significant issues as follows:

1. The Company has looked after its employees by ensuring that they receive fair and appropriate

compensation based on their duties and responsibilities and also be able to compete in the labor market.


Moreover, the Company has provided welfares such as annual physical check-up, medical treatment fee,

accident insurance, employee uniform, and has also arranged for activities to enhance the happiness in

their working life i.e. “HomePro Jai Aar Sar” Program which encourages the employees to join activities

for providing benefits to community, to arrange for company sport competition, to arrange for the merit

making ceremony in their own month ot birth etc.

2. Providing the provident fund in order for the employees to have saving for retirement.

3. The Company gives the importance to the developing of knowledge, all kind of capabilities of staff for

knowledge on products, standard on work performing, providing service, management, including attitude

and team work. The Company has promoted its staff as follows:

• Allocating budget in personnel development for the amount of 2% of the total salary of the Company

• Set up the DIY workshop center, having knowledge skilled expert and in each group of products.

• Set up Learning Center to each branch for new staff for self learning

• Having the Individual Development Program in order to develop personnel as the Talent Group to be

promoted to the higher position, to be ready to support the expansion of the Company.

• Promote the personnel to pursue education in the bachelor and master degree, and set up scholarship

for studying English language in order to increase efficiency of personnel to be able to perform their

work more effectively.

4. Giving opportunity to staff to express opinion or complain on unjust issues via e-mail to the Managing

Director.

Customer The Company aims to operate business on the basis of highest satisfactory of customer and in order to

operate according to the objectives, the Company has policy and procedures to customer as follows:

1. Strictly deliver goods and provide service under the conditions as agreed with customer. In case of the

inability to comply with the conditions, the Company will notify customer in order to find the solution.

2. Giving information and suggestion about the products and services, including relevant commercial terms

correctly, completely, not exaggeratedly which may cause misunderstanding to the customer.

3. Giving opportunity for customer to suggest or complain about the products and services, including servicing

of staff or any inconvenience that customer has experienced via website; www.homepro.co.th/cs/ccm.asp

Community, Society and Environment The Company has a policy to support social activity by creating projects that may benefit the community

and society as follows:

1. “Computer Lab Construction” project,provides primary school students an opportunity to learn via the

internet. In 2009, HomePro provided computers together with equipment installation to Jao Pho Luang

Uppatham 7 School in Mae Rim District, Chiang Mai province.

2. “The Kids’ Toilet” project, emphasizes upon raising toilet sanitation standard within 49 schools, totaling

526 restrooms in 12 provinces in order to receive national public toilet standard or HAS (Healthy

Accessibility and Safety). The project received cooperation from the Department of Health, the

Ministry of Public Health, and the Office of the Basic Education Commission, the Ministry of Education

to examine the standard and provide additional improvement till most of the toilets in the project

passed the national standard.


3. “HomePro helps reduce global warming” project, it was started in 2009 under the objective of

Avicennia marina and Lampu forestation of 100,000 trees within 3 years at BangPu Education Center

of the Royal Thai Army in Samut Prakarn Province.

4. Disclosure and Transparency The Board of Directors has given the importance to the disclosure of information which are accurate, com-

plete, transparent, in timely manner, and equitably distributed to the investor and stakeholders to acknowledge,

of both financial reports and material information that affect the value of the Company’s Securities which will be

disclosed through the publication of the Stock Exchange of Thailand and web site of the Company.

The Company has the Investor Relationship office to be responsible for giving information and hearing to

opinion of shareholders and investor regularly, by contacting Mr. Rakpong Aroonwatdhana, Tel. 02-832-1416 or

via e-mail at [email protected] Furthermore, the Company has also specified the opportunity to communicate

and activities between shareholders, investors and high rank executive of the Company, apart from the Annual

Shareholders Meeting as follows:

Web Site The Company has presented the operational result, annual report, annual transactions

information 56-1 form, minutes of shareholders meeting, news about the Company, news

notified to the Stock Exchange, webcast, documentations supplemented to the analyst meeting

and contact channel, and also distribute information of the Company in relations to Corporate

Governance, Board of Directors and Executives Chart, shareholding structure. To facilitate

and provide equal opportunity in searching information, such have been prepared in both

Thai and English version.

The shareholders, investors, and interested person of the Company may express opinion and

propose additional agenda to the meeting and propose the person who has qualification to

be the director before the Company will send a notice calling for the meeting through web site.

Analyst Meeting The Company has arranged for the meeting for the analyst and investors, including shareholders

who are interested in disclosing the operational result on every quarter for 4 times in 2009.

One on One meeting All through 2009, the Company opened the opportunity for, both in domestic and international,

and Company visit Security analysts, shareholders and Institutional investors to meet in order to answer the

questions relating to the operations of business for the total of 44 times, in addition to

the 11 Conference Calls.

Road Show In 2009, the Company attended the conference and road show and met with international

institutional investors in Singapore and Hong Kong for 2 times.

Press Conference and The Company has made the press conference twice about the annual report on business

Media Relationship operation in 2008 and direction to operate business in 2009, and report the result of operation

for the first 6 months of 2009 to the media. At the same time, the Company has as well

prepared the Press Release for the media.

Moreover, the Company arranged for 3 special interviews with the executives via Money Channel

program and speech at the Stock Exchange of Thailand regarding the industrial trend

and the overall direction in business operation of the Company.


5. Board Responsibilities Board of Directors of the Company consists of 12 persons as follows:

1. 4 Executive Directors

2. 4 Non-Executive Directors

3. 4 Independent Directors in which 3 of 4 directors are in the position of Audit Committee.

Responsibilities

The Board of Directors has participated in determining the Company’s policy, goal, business plan, and

budget of the Company, as well as ensuring that the management has operated according to the plan and

budget with efficiency and effectiveness. The Chairman of the Company, President of Executive Committee,

and Managing Directors of the Company are not the same persons. Moreover, there are obviously separation

of roles and duty to control and management, in order to balance the power and create transparency for

work performing .

The Company has appointed the Audit Committee who are Independent Directors to review the accuracy,

sufficiency of the disclosure of information and the reliability of financial report, Corporate Governance and

internal control of the Company which have details of obligations as specified in “Clause 9 management of

duty of the Audit Committee”.

In case there was transaction that was not under normal course of business of the Company, the Board

of Directors of the Company has duty to consider such transaction, in which there shall be Independent Director

in the meeting as well.

The Company has the Nomination and Remuneration Committee to set the procedures and rules on

selecting the Director of the Company, and set the period of remuneration or other benefits which is fair and

reasonable and present to the shareholders meeting for consideration.

To promote every parties to perform their duty according to assigned responsibility with transparency, the

Company has prepared the policy of Corporate Governance, handbook of ethic, and code of conduct on

ethics of Directors, the management, and staff in order for the relevant persons to comply with the guideline

in performing assignment of the Company honestly, and to follow up with the compliance of the guideline

regularly, including to stipulate discipline penalty.

First orientation and giving knowledge in the business of the Company to the new Director

The Company has policy to provide the first orientation for the new directors, in order to acknowledge

the roles, duty, and responsibility, including giving knowledge, understanding of business and operating in any

part of the Company, which is to prepare the readiness to perform duty of the Directors. Due to the Company

has no new Directors in 2009, there was no arrangement of such first orientation.

The Board of Directors Meeting

The Board of Directors of the Company and Executive Directors shall have regular meeting every month

and may have special extra meeting as necessary. There shall be fixing the date and time of the meeting

in advance for the whole year, and there shall be sending of the notice calling for meeting with agenda of

the meeting approximately 7 days in advance for the Directors to be prepared.

In 2009, the Company had 13 times of Board of Directors Meeting and the meeting of Sub-Committee i.e.

12 times of Executive Directors meeting, 12 times of Audit Committee meeting, and 4 times of Nomination

and Remuneration Committee meeting, details of attending the Board of Directors meeting and other

sub-committee meetings are as follows:


Attendance / Number of all meetings (times)

1. Mr. Anant Asavabhokhin 11 / 13

2. Mr. Pong Sarasin 8 / 13

3. Mr. Rutt Phanijphand 13 / 13 12 / 12 4 / 4

4. Mr. Joompol Meesook 13 / 13

5. Mr. Apichat Natasilapa 13 / 13 3 / 4

6. Mrs. Suwanna Buddhaprasart 13 / 13

7. Mr. Manit Udomkunnatum 12 / 13 12 / 12

8. Mr. Naporn Soonthornchitcharoen 12 / 13 11 / 12

9. Mr. Khunawut Thumpomkul 13 / 13 12 / 12

10. Mr. Apilas Osatananda 13 / 13 12 / 12

11. Mr. Thaveevat Tatiyamaneekul 13 / 13 11 / 12

12. Mr. Chanin Roonsamrarn 12 / 13 12 / 12 4 / 4

Board of Directors

ExecutiveDirectors

Audit Committee

Nomination andRemuneration

Committee

Evaluation of the work performance of the Managing Directors

The Company has the Nomination and Remuneration Committee to propose opinion to the Board of

Directors of the Company in consideration of setting the annual Key Performance Indicators (KPI) to be used

in evaluation of work performance of the Managing Director, such KPI shall be in accordance with the goal

of the Company for both short term and long term.

Succession plan of the High rank of Executive

The Company has prepared the succession plan to prepare in the event the executive is unable to perform

his duty, by having initiatively structured the replacement of the low rank of executive in the level of branch

manager already. The plan for mid-level executive and high-rank executive are in progress, which this will

to ensure that the operation of the Company can be continued.

Forming the Internal Audit Department

In order to promote the procedures of good governance, the Company has formed an internal audit to

review and followed up the result of work performing to the Management, by performing its work independently,

and reporting the result of the operation to the Audit Committee directly and regularly.

The Company has policy of risk management, group of management shall jointly consider and analyze

risk factors both external and internal the organization, by having meeting every 2 weeks and following up

the situation that is a cause of risk closely, and notifying to the relevant staff for acknowledgement and to

comply with the stipulated measurement of risk management.

Moreover, there was a proposal to appoint the auditor to evaluate efficiency of internal accounting control

of the Company which the resolution of the shareholders in 2009, approved to appoint the auditor from Ernst

& Young Co., Ltd., by Mrs. Nonglak Pumnoi, an auditor License number 4172 as the auditor of the Company

and its subsidiaries for the year 2009.

Name-Surname


On February 4, 2009, the Board of Directors, Audit Committee and management evaluated the Company’s internal control system. The evaluation was done on the following five criteria:

1. Organization and EnvironmentThe Board of Directors opines that the Company has clear organization chart and has specified scope of authority,

responsibility of each department in writing, having specified clear target of business operation which is measurable,which the setting of the target and work plan the management and each executive of each field of work have jointlyconsidered and set the business target and the strategy of operation by using the result of operation in the past years asthe basic information. It is then ensured to be properly and shall be able to achieve the target.

For our policy, operating regulation, and provision relating to ethics (Code of Conduct), the Company has specifiedsuch in the business ethics manual in order for directors, executives, and employees in all departments to use as a guideline for operation. Regarding this business ethics manual, the Company has provided such in consideration ofrelevant laws and regulations including the effects which may occur to interested parties.

2. Risk ManagementThe Board of Directors opines that the group of executives has regularly considered and evaluated the risks that may

affect the result of operation of the Company, by specifying operation plan of every year and fixed to have meeting in every 2 weeks in order to follow up the result of operation, and the risk factors closely for setting management methodand for controlling the risk to be at the acceptable level, and notified relevant staff to be aware of and to comply withthe measurement of risk management.

3. Controlling The Board of Directors opines that the Company has specified the scope of authority, approval credit limit of executive

in each level clearly in writing, and completely separate duty and responsibility for approval work, account booking and information technology, and the looking after of property separately in order to examine each other. In case the Companyhas entered into transactions with the major shareholders, director, executive, or relevant persons, the Company shall proposesuch transaction through the Audit Committee Meeting and complete such transaction as if such were made with outsider.

4. Information Technology and Communication SystemThe Board of Directors opines that the Company has prepared the notice calling for the Board of Directors

Meeting,stating information and details of agenda to the meeting, including summary of information to the Board ofDirectorsfor consideration of at least 7 days before the meeting, and has made the complete minutes of the Board ofDirectors meeting which may be referable, and such can be used to examine the appropriateness in performing the duty of the Director.

The Company has selected the accounting policy that is generally accepted in accounting principle, andretained documents supplement to records properly. The Company hired Brambles (Thailand) Co., Ltd., a document retaining company, as the document keeper with the appropriate controlling system.

5. Mornitoring The Board of Directors opines that the Company has added an agenda on monitoring the result of operation every

month, in order to notify to the Board of Directors and to propose suggestions for work performing. For operation planand budget, the Company will make and review them every half year.

In case there is an internal audit, the Company has required the internal auditor to report the result directly to the Boardof Directors or the Audit Committee, in order for the auditor to perform its duties independently and propose the auditingreport in open manner.

Apart form this, the Company’s auditor, Mrs. Nonglak Pumnoi, the auditor with certified license no. 4172 of Ernst & YoungOffice Co., Ltd, as the auditor of the Company for the year end on December 31, 2009 has given her comment on the assessmentof the efficiency of the internal control of the Company’s accounting that no significant weak points were found in the internalaudit system on the accounting.

Internal Control


Dividend Policy

Related Transaction

The Company has the policy to pay dividend to shareholders not less than 40% of the net profit of each year.

However, the consideration for dividend payment will take other factors into account such as result of operation

and financial status of the Company, Liquidity, Expansion of Business and other factors relating to the management

of the Company. Each dividend payment is required to obtain approval from shareholders and Board of Directors.

Dividend payment during 2007 - 2009 is as follows:

Remark : 1. The Company increased its registered capital from Baht 1,938,146,860 to Baht 1,988,546,860 as resolved by 2008 Annual Shareholders Meeting

on April 4, 2008.

2. On October 27, 2009, the Company paid interim dividends at the rate of 1 Baht/ share by dividing into cash dividends at the rate of 0.10 Baht/ share

and stock dividends at the rate of 0.90 Baht/ share according to the resolution of the Extraordinary General Meeting of Shareholders No. 1/2009.

In 2009, the Company and its subsidiary had significant business transactions with related parties, which

have been concluded on commercial terms and bases agreed upon in the ordinary course of business between

the Company and those companies.

As of December 31, 2009 and 2008, the Company had outstanding balance with the related transaction,

which can be summarized as follows:

Name of Company /Nature of relationship Transaction Audit Committee and

Management’s opinion

Amount(Thousand Baht)

31 Dec 09 31 Dec 08

1. Land and Houses Plc. and subsidiaries • Being a major shareholder of the Company Sales income 3,755 10,460 by holding 30.03% of total paid-up capital, Account Receivable 432 2,261 as of October 15, 2009 • With 2 co-directors 1. Mr. Anant Asavabhokhin 2. Mr. Naporn Soonthornchitcharoen

Such value was the appropriate selling price as it was the sameas the market price which theCompany sells to the other customers

Such value was the appropriate selling price as it was the sameas the market price which the Company sells to the other customers

2. Quality Houses Plc. and subsidiaries • Being a major shareholder of the Company Sales income 617 871 by holding 21.18% of total paid-up capital, Account Receivable 142 66 as of October 15, 2009. • With 2 co-directors: 1. Mr. Rutt Phanijphand 2. Mr. Anant Asavabhokhin 3. Mrs. Suwanna Buddhaprasart 4. Mr. Joompol Meesook

Baht per share 0.181 0.35 1.002

Dividend 2007 2008 2009


3. Land and Houses Retail Bank Plc. • With 2 co-shareholders: Interest income 1,809 1,647 1. Land and Houses Plc. Deposit with financial 2. Quality Houses Plc. institution 677,977 435,140 • With 4 co-directors: 1. Mr. Anant Asavabhokhin 2. Mr. Rutt Phanijphand 3. Mr. Naporn Soonthornchitcharoen 4. Mrs. Suwanna Buddhaprasart

5. Quality Houses Property Fund • With 2 co-shareholders Rental and service 1. Quality Houses Plc. expenses 17,918 18,575 2. Land and Houses Plc Other Payable 1,302 1,307 Rental guarantee deposit 3,000 3,000

4. Quality Construction Products Plc. and subsidiaries • Land and Houses Plc. and Quality House Plc. Purchase of goods 1,411 5,329 are the major shareholders of Quality Other Receivable 3 6 Construction Products Plc. by holding Trade Accounts Payable 162 2,264 31.41% and 24.33% respectively, as of February 7, 2009. • With 4 co-directors: 1. Mr. Anant Asavabhokhin 2. Mr. Pong Sarasin 3. Mr. Naporn Soonthornchitcharoen 4. Mr. Joompol Meesook

Name of Company /Nature of relationship Transaction Audit Committee and

Management’s opinion

Amount(Thousand Baht)

31 Dec 09 31 Dec 08

The Company received theinterest with the same rate asother customers of the bank,such rate was a normal rateof other banks and financialinstitutions.

Such value was the appropriate purchase price because it wasthe same market price whichthe Company could purchase from other manufacturers or sellers.

Such value was generated from the transactions of rent andservices fee for the space inthe Wave Place building. The Audit Committee opined that such price was calculated from the appropriate rate.

Necessity and Appropriate Reason of Transaction The connected transaction made was necessary and reasonable to create the highest benefit to the

Company. The Audit committee concluded that such was in accordance with business and the general ordinary

course of received and paid consideration by and from the Company was fair.


Measure/Procedure of Approval of Connected Transaction The connected transaction being made at present and expectedly in the future, e.g. sales of goods to Land

and Houses Plc. and Quality Houses Plc., purchase of goods from Quality Construction Products Plc., renting space

in the Wave Place building of Land and Houses Property Fund.

For the sale of goods transaction, the Company determined the price according to the market price which

was the price that buyer could buy them from other manufacturers or sellers. Generally, the specification and

price of goods would be determined earlier. For the purchase of goods transactions, the Company purchased

them at the market price which it could to purchase from other manufacturers or sellers. The Audit Committee

considered the connected transactions and concluded that the Company received and paid remuneration in the

fair price according to the general ordinary course of business.

Policy or Tendency of Inter-Transaction The Company has policy to specify the trade conditions for entering into inter-transaction to be as normal

business operation. Price of products to be sold shall be prescribed at the level that can be competed to other

vendors.

As for Inter-transaction that may be occurred in the future, the Board of Directors shall comply with the

laws on Securities and Stock Exchange, and Regulations, Announcement, Order, or Regulations of Stock Exchange

of Thailand, and including compliance with the regulations on disclosure of information of connected transaction

and acquiring or disposing of material assets of the Company or the Subsidiary.

However, if there will be inter-transactions of the Company or its subsidiary occurred to person who may have

conflict of benefit, or may have conflict of interest in the future, the Company shall have the Audit Committee

give the opinion on necessity and appropriateness for such transactions. In case the Audit Committee is not skillful

in considering the inter-transactions that may be occurred, the Company shall arrange for an Independent expert or

auditor of the Company to give opinion on such inter-transactions in order to bring such information to supplement

for the decision making of the Board of Directors or shareholders as the case may be. However, the Company shall

disclose inter-transactions in the note of the financial statement audited by the Auditor of the Company.


Financial Analysis and Business Operation Results

Overview of Business Operation Results

In the face of economic downturn since the end of 2008 along with the effects from the world economic crisis, the

H1N1 flu outbreak, continuing political conflicts and demonstration, as well as violence situation in the three southern

border provinces, had sharply decelerated the economy in 2009.

The overall retail and wholesale business in the first half of 2009 contracted due to the slowdown of consumer

spending in almost every product category, except for the goods in food section. For the second half of the year, the

overall domestic economy adjusted in a better direction. The important factors came from the government’s economic

stimulus measures which resulted in the increase in consumer purchasing power and the improvement of spendings in

the retail and wholesale business accordingly.

The Company, however, has closely kept abreast of the economic and political situation in order to plan and find

measures and strategies to prevent the risks that may occur, and to operate the business so as to successfully reach the

planned target.

For the Company operation result in 2009, sales, total revenues and net profit are still growing from the previous

year due to many driving factors such as an increase in the number of branches, same store sales growth, sales of new

stores, efficiency of inventory management, revenues from space rental business, and revenues from HomePro Expo etc.

Operating Result Comparing the results of operation for the year ended 31st December 2009 to the same period of year 2008.

1. Revenue from Sales In 2009, the Company and its subsidiary generated revenue from sales of Baht 20,329.12 million, increased

from the previous year by Baht 1,788.84 million or 9.65%. The increase was mainly driven by the same store

sales growth, sales of the newly opened branches during 2008 to 2009, and sales from HomePro EXPO in the

1st and 4th quarter of the year.

2. Other Revenues In 2009, the Company and its subsidiary generated other revenues of Baht 1,469.97 million, increased

from 2008 by Baht 186.06 million or 14.49%, from the following transactions:

• Revenue from rental and service, increased by Baht 74.12 million, from space rental revenue of

HomePro Village branch and HomePro EXPO No. 9 and 10.

• Other Revenues, increased by Baht 111.94 million, revenue from advertising fee, support fee of

promotional activities from business partners, service fee related to sales of goods and other revenues

of its subsidiary.

3. Cost of Sales and Gross Profit Margin In 2009, the Company and its subsidiary had the cost of sales of Baht 15,395.07 million, increased from

the previous year by 1,248.34 million or 8.82%, which was the result of the increase of sales.

The Company had gross profit of Baht 4,936.10 million, increased from the previous year of Baht 540.87

million. The gross profit margin as percent to sales was 24.28%, moved up from the previous year of 23.71%.


The increase of gross profit was resulted by the increase in efficiency of inventory management system

as well as the increase in volume discount of order in the large quantity. As a result, the increase rate of cost

of good sold is less than the increase rate of gross margin. The gross margin has also increased by the

increase in sales volume of house brand products.

4. Selling and Administrative Expenses In 2009, the Company and its subsidiary had selling and administrative expenses amounted to Baht

4,650.29 million, increased from the previous year by Baht 458.39 million or 10.94%. The proportion as percent

to sales increased from 22.61% to 22.88%. The details of expenses in each group are as follows:

• Selling expenses of Baht 3,787.03 million, being expenses for branches, operation and distribution unit,

increased by Baht 404.91 million from expenses on salary, utilities, credit card fee, maintenance, and

depreciation.

• Administrative expenses of Baht 801.17 million, mostly being expenses of Head Office, increased by Baht

21.69 million from expenses on salary and remuneration, consultation, tax, and fees.

• Other expenses amounted to Baht 62.10 million, decreased by Baht 31.79 million.

5. Financial Expenses Financial Expenses of year 2009 were Baht 113.13 million, decreased from the previous year by Baht 21.28

million or 15.83%. The proportion as percent to sales decreased from 0.72% to 0.56%, which was mainly driven by

the decrease of paid interest from partial payment of long-term loan and the lower interest rate.

6. Net Profit For the result of operation in 2009, the Company and its subsidiary had net profit of Baht 1,142.86 million,

increased from the previous year by Baht 183.44 million or 19.12 %. The increase of net profit was caused by the

increase of sales and other revenues, together with the decrease of cost of sales and decrease of interest payment.

These made the proportion of net profit to sales to move up from 5.17% to 5.62%.

7. Return on Equity As of 31st December 2009 and 2008, the Company and its subsidiary had return on equity of 22.34% and 20.68%

respectively. The increase of return on equity in 2009 was caused the increase of net profit over the increase of

equities.

Balance Sheet Comparing financial status as at 31st December 2009 and 31st December 2008

1. Net Assets As at 31st December 2009, the Company and its subsidiary had total assets of Baht 13,866.03 million,

increased from 31st December 2008 by Baht 496.96 million or 3.72%. The growth of asset value was due to


127.42 123.87 125.32123.87 Not yet Due 126.26

Past Due:

• Up to 6 months 11.80 16.66 9.52 14.059.52 11.80

• 6-12 months 0.04 0.01 - 0.01- 0.04

• over 12 months 5.07 16.52 5.07 16.525.07 5.07

Total 143.18 160.63 138.47 155.91138.47 143.18

Age of receivables

Consolidated Separate Financeial Statement Financeial Statement

(Unit : MB)

the change of significant transactions as follows:

• Cash and cash equivalents increased by Baht 242.54 million which was from the increase in bank deposit

received from issuance of debenture and outstanding cash at branches at the year end date.

• Net inventory increased by Baht 177.06 million, which was a result of the increase in total branches and

the new stores to be opened in 2010.

• Net Property, plant and equipment, and net leasehold rights and software totaling increased by Baht

59.37 million or 0.68%, which was from the investment in new store expansion in 2009 and 2010.

• Other assets increased by Baht 17.99 million.

Accounts Receivable As of December 31, 2009, the Company and its subsidiary had total net accounts receivable of Baht

128.79 million, decreased from the previous year by Baht 6.20 million or 4.59%. The outstanding balances of

accounts receivable as at 31 December 2009 and 2008 are aged as follows:

As of December 31, 2009, the Company and its subsidiary had overdue accounts receivable exceeding

12 months of Baht 5.07 million, which was partly from the debtors who had difficulty relating to their operation

affected by the economic situation in 1997. However, the Company had already proceeded with lawsuits and

set provisions for bad debts. As of December 31, 2008 and December 31, 2009, the Company set allowance

for doubtful bad debts for the said debtors of Baht 25.64 million, and Baht 14.40 million, respectively.

2. Liabilities As of December 31, 2009, total liabilities of the Company and its subsidiary were Baht 8,592.59 million

increased from 2008 by Baht 179.73 million or 2.14%, which was from the change of the following crucial

transactions:

• Overdraft funds and short-term loan from financial institution were decreased for Baht 124.82 million.

• Accounts Payable was increased by Baht 519.73 million which was from the increase according to sales.

• Debenture-net was decreased by Baht 360 millions since, during the middle of the Year, there were

redemption of Baht 500 millions. Also, there were issuances of unsecured debenture no. 1/2552

for Baht 300 millions, in which Baht 160 millions will mature within 1 year.

• Other debts were increased by Baht 144.82 million.

31 Dec 2009 31 Dec 2008 31 Dec 2009 31 Dec 2008


3. Shareholders’ equity As of December 31, 2009, shareholders’ equity was Baht 5,273.44 million, increased from the previous year

by Baht 317.23 million or 6.40% which the increase was from following transactions:

• The issued and paid-up ordinary share was increased by Baht 1,752.01 millions due to the payment of stock

dividend in October 2009. Also, another part of issued and paid-up ordinary share was increased from

the exercise of right under warrants to purchase ordinary shares of employee No. 3 and 4 for the total

of Baht 18.30 millions.

• Share premium was increased by Baht 27.51 million.

• Retained earning was decreased by Baht 1,480.60 millions due to the payment of interim dividend in the

Year 2009.

4. Capital Structure The capital structure of the Company as of 31st December 2009 consisted of the Company’s debt for the

total of Baht 8,592.59 millions and the shareholders equity in the total of Baht 5,273.43 millions. In this regard,

if such amount is calculated as the total amount of debt to shareholder equity ratio, such amount will be

equivalent to 1.63 which was decreased from the previous year ratio of 1.70. Such decreased rate shows

that, in the previous year, the Company invested in assets by spending the capital from its business operation

more than accumulating its debt. Moreover, such also reflected our ability to reduce the increased amount of interest.

Liquidity Summary of cash flow statement as of December 31, 2009 compared to the same period of 2008.

As of December 31, 2009, the Company and its subsidiary’s cash and cash equivalents were Baht 846.33

million, net increased from December 31, 2008 by Baht 242.54 million, which derived from the following activities:

1. Net cash from operating activities of Baht 2,454.23 million which were received from the net profit of Baht

1,142.86 million, depreciation and amortization of Baht 914.90 million, including change of current assets

and current liabilities e.g. accounts payable increased by Baht 519.66 million, accrued expenses increased

by Baht 86.08 million, other liabilities increased by Baht 86.28 million, net cash paid for inventory increased

by Baht 236.28 million, and other receivables increased by Baht 59.27 million.

2. Net cash used for investing activities totaled Baht 900.96 millions which such amount was the investment in

the asset for the expansion of branches in 2009 for the total of Baht 867.77 millions, the computer software

for the total of Baht 23.85 millions, and the leasehold right for the total of Baht 9.35 millions for the space

expansion at Ratchapruk branch, Rama 2 branch, and Khoa Yai branch.

Age of receivables

Consolidated Separate Financeial Statement Financeial Statement

(Unit : MB)

2009 2008 2009 2008

Cash from operating activities 2,454.23 2,263.24 2,445.17 2,243.582,445.17 2,454.23

Cash from investing activities (900.96) (1,279.21) (899.96) (1,278.02)(899.96) (900.96)

Cash from financing activities (1,310.73) (615.32) (1,300.73) (605.32)(1,300.73) (1,310.73)

Net increase (decrease) in cash 242.54 368.71 244.48 360.24244.48 242.54


3. Cash received from financing activities, net used in the total of Baht 1,310.73 millions in which such

amount was derived from the issuance of debenture for Baht 300 millions together with the increase in

capital for ordinary share from the conversion of the warrant of employees for the total of Baht 45.82 millions.

Such amount was spent to redeem the debenture for Baht 660 millions and for repayment of the short-term

loan for Baht 124.82 millions and for the payment of dividend in the total of Baht 871.45 millions.

Liquidity Ratio As of December 31, 2009, the Company and its subsidiaries have current assets in the total of Baht 4,301.10 millions

and current liabilities in the total of 6,441.69 millions. In this regard, such amount can be calculated into liquidity ratio

of 0.67 times which was increased from the previous year’s ratio of 0.05 times.

The liquidity ratio of the Company and its subsidiaries as of December 31, 2007, 2008, and 2009 was at 0.56 times,

0.62 times, and 0.67 times. Such continuous increase in liquidity ratio reflects our increased ability to reduce

short-term debt.

Auditing Fee According to the Annual General Shareholders meeting in 2009, which resolved to appoint the Auditors of Ernst &

Young Office Co., Ltd as the Company’s auditor of 2009, with the fee of Baht 2,400,000.

The actual audit fee for 2009 includes auditing fee for the Company and its subsidiary at the amount of Baht

2,400,000 and other services fee at the amount of Baht 100,000, totaling Baht 2,500,000.


Dear Shareholders

The company consolidated financial statements of Home Product Center Public Company Limited and its

subsidiary have been prepared in conformity with the requirements of the Public Company Act B.E. 2535 (1992),

the Securities and Exchange Act B.E. 2535 (1992), the Announcement of the Department of Commercial Registration

dated September 14, 2001, and the accounting standards prescribed by the Federation of Accounting Professions.

The Board of Directors had an opinion that the company’s overall internal control system is at satisfactory

level, sufficient to maintain the assets and to protect from fraud, and is responsible for the financial report of the

Company and its subsidiary in order to ensure that it shows the actual result of operation, financial status, and

cash flows. There have been proper recording of accurate and complete accounting information. Preparing of the

financial reports has been considered of selecting appropriate accounting policy and regularly in compliance with

the general accepted accounting standard, and there has been disclosing of sufficient significant information in

the supplementary to the financial statements.

(Mr. Anant Asavabhokhin)

Chairman

(Mr. Khunawut Thumpomkul)

Managing Director

Report of Board of Directors’ Responsibilities in the Financial Statements


Audit Committee’s Report

Dear Shareholders

The Audit Committee consists of 3 independent directors being Mr. Apilas Osatanon, as Chairman, Mr. Thaveevat

Tatiyamaneekul and Mr. Chanin Roonsumran, as directors, having the duty to examine the reliability of financial

statement.

The Audit Committee has the duty and responsibility as assigned by the Board of Directors, which includes

the review for the company in order to have the accurate and sufficient financial report, have efficient internal

control system and corporate governance, have the compliance with relevant laws and regulations, have monitored

the transaction which may have conflict of interest in order to be in compliance with the relevant rules and

regulations and to earn the utmost benefits to the company, as well as the selection and proposing the opinion

for appointment of the external auditor.

For the year 2009, the Audit Committee has performed the duty according to the scope of responsibility as

stipulated in the charter of the Audit Committee and according to the assignment from the Company’s Board of

Directors. There were 13 meetings which at each meeting all the directors attended, and the auditor was invited

to attend for the agenda which was relevant.

Essence of the Work Performed in year 2009

1. Considered to specify the provision and the preparation of report regarding the conflict of interest of directors,

executives, and concerned persons in order to propose to the Company’s board of directors for

consideration of an approval.

2. Considered to specify the regulation regarding sale and purchase of assets before and after broadcasting

significant information.

3. Having considered and review the quarterly financial report of the company and the annual financial

statements before such were disclosed to the Stock Exchange of Thailand and the Office of the Securities

and Stock Exchange Commission, which such was made in the agenda of the review of the financial report

of the company.

4. Having considered the selection and nomination of company’s independent auditor and determination of

the remuneration to propose to the Company’s Board of Directors for the request for approval from the

meeting of shareholders.

5. Having convened with the independent auditor for 4 times for considering the guidelines for the performance

and scope for the proceeding to examine the accounting, for the review of the audit plan, for the result

of the audit and recommendation in order to ensure that the audit of the financial statement has been

made completely and appropriately according to the standard of accounting audit, which the meeting with

the auditor had no attendance of the management.

6. Having had the meeting with the Office of Internal Audit for the operation and scope of proceeding, the

review of examination plan in order to ensure that the internal audit has been made completely and

appropriately according to the standard of internal audit, which for the year 2009, the audits were made

to evaluate the sufficiency and efficiency of the internal control system of the Company and its subsidiary.


In general, and there was an acknowledgement of the report on the result of the audit and following up

of the improvement and correction according to the recommendations in order to cause more effectiveness

and efficiency to the internal control system.

7. Having reviewed the performance to be in compliance with the laws on Securities and Stock Exchange,

the rules of the Stock Exchange or the laws relevant to the business proceeding of the company.

8. Having considered the disclosure of information, inter and related transactions and the transaction which

may have conflicts of interest.

9. Having made the evaluation of the sufficiency and appropriateness of the internal control system which

covers the matter of organization and environment, risks management, the operation control of the

management, information technology and communication, and tracking system.

The Audit Committee has the following opinion;

1. The financial report of the Company is reliable, accurate and complete according to the generally accepted

accounting principle and has sufficiently and timely disclosed material information.

2. The company has sufficient and efficient internal control system, risks management system, system of operational

control of the management, and the tracking system.

3. The Company has not performed any act in violation to the laws on Securities and Stock Exchange, the

rules of the Stock Exchange or the laws relevant to the business of the Company.

4. The appointed external auditor has experience for the work, and has coverage network and is acceptable

both in the country and overseas, which such causes the standard of the company’s audits to be in the

international level. Also, every auditor and the person who were assigned to sign to certify the financial

statements are independent, have no relation or transaction which may cause conflicts of interest with

the Company. This can be ensured that the accounting audits were made completely and appropriately

according to the accounting standard and were efficient and transparent.

5. The entering into the transaction with related business or the entering into the transaction which may

have conflicts of interest have been made in accordance with the law, the rules of the Stock Exchange

of Thailand, with appropriate reason for the utmost benefits for the Company, and have no indication or

other observations to imply any abnormal circumstance.

6. The Audit Committee has performed the duty completely, correctly and independently, according to the

Charter that the Audit Committee has prescribed with good cooperation from every party.

(Mr. Apilas Osatananda)

Chairman of the Audit Committee


To the Shareholders of Home Product Center Public Company Limited

I have audited the accompanying consolidated balance sheets of Home Product Center Public Company

Limited and its subsidiary as at 31 December 2009 and 2008, the related consolidated statements of income, changes

in shareholders’ equity and cash flows for the years then ended, and the separate financial statements of Home

Product Center Public Company Limited for the same years. These financial statements are the responsibility of the

management of the Company and its subsidiary as to their correctness and the completeness of the presentation. My

responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with generally accepted auditing standards. Those standards require that

I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures

in the financial statements. An audit also includes assessing the accounting principles used and significant estimates

made by management, as well as evaluating the overall financial statement presentation. I believe that my audits

provide a reasonable basis for my opinion.

In my opinion, the financial statements referred to above present fairly, in all material respects, the financial

position of Home Product Center Public Company Limited and its subsidiary and of Home Product Center Public

Company Limited as at 31 December 2009 and 2008, and the results of their operations and cash flows for the years

then ended in accordance with generally accepted accounting principles.

Report of Independent Auditor

(Nonglak Pumnoi)

Certified Public Accountant (Thailand) No. 4172


The accompanying notes are an integral part of the financial statements.

Consolidated financial statements

2009 20092008 2008

Separate financial statementsNote

Balance sheets As at 31 December 2009 and 2008

(Unit Baht)

Assets

Current assets

Cash and cash equivalents 9 846,330,829 603,788,150 824,376,948 579,894,685 9 846,330,829 824,376,948

Trade accounts receivable - net 6, 9 128,785,030 134,983,014 124,066,652 130,267,530 6, 9 128,785,030 124,066,652

Inventories - net 7 2,905,138,033 2,728,078,526 2,905,138,033 2,728,078,5267 2,905,138,033 2,905,138,033

Value added tax receivable 303,776 11,263,216 - 11,263,216 303,776 -

Other receivables 9 356,794,276 297,520,307 359,048,810 304,448,5569 356,794,276 359,048,810

Other current assets 63,747,426 70,844,841 58,154,929 58,369,602 63,747,426 58,154,929

Total current assets 4,301,099,370 3,846,478,054 4,270,785,372 3,812,322,115 4,301,099,370 4,270,785,372

Non-current assets

Investment in subsidiary 8 - - 4,999,300 4,999,300 8 - 4,999,300

Property, plant and equipments - net 10 8,710,587,478 8,613,170,787 8,703,030,061 8,602,413,768 10 8,710,587,478 8,703,030,061

Computer software - net 11 92,115,899 130,162,250 92,110,169 130,155,574 11 92,115,899 92,110,169

Leasehold rights - net 12 702,999,498 722,963,659 702,999,498 722,963,659 12 702,999,498 702,999,498

Property foreclosed 4,174,122 4,174,122 4,174,122 4,174,122 4,174,122 4,174,122

Rental guarantee deposits 9 37,821,322 38,390,882 37,821,322 38,390,8829 37,821,322 37,821,322

Other non-current assets 17,230,349 13,731,996 1,595,201 2,964,574 17,230,349 1,595,201

Total non-current assets 9,564,928,668 9,522,593,696 9,546,729,673 9,506,061,879 9,564,928,668 9,546,729,673

Total assets 13,866,028,038 13,369,071,750 13,817,515,045 13,318,383,994 13,866,028,038 13,817,515,045




2009 20092008 2008


Balance sheets (Continued) As at 31 December 2009 and 2008

(Unit Baht)

Liabilities and shareholders’ equity

Current liabilities

Bank overdrafts and short-term loans

from financial institutions 13 - 124,823,805 - 124,823,80513 - -

Trade accounts payable 9 4,216,890,094 3,697,157,646 4,211,189,025 3,692,452,199 9 4,216,890,094 4,211,189,025

Current portion of liabilities under

financial lease agreements 14 3,539,452 9,295,721 3,539,452 9,295,72114 3,539,452 3,539,452

Short-term loans from related party 9 - - 70,000,000 60,000,000 9 - 70,000,000

Current portion of debentures 15 160,000,000 660,000,000 160,000,000 660,000,000 15 160,000,000 160,000,000

Current portion of long-term loans 16 486,240,000 300,000,000 486,240,000 300,000,000 16 486,240,000 486,240,000

Payables from purchases of assets 119,219,458 113,838,115 119,219,458 113,838,115 119,219,458 119,219,458

Accrued expenses 365,409,521 317,074,342 347,968,716 301,203,104 365,409,521 347,968,716

Corporate income tax payable 247,190,722 166,962,762 247,190,722 166,962,762 247,190,722 247,190,722

Advances received from customers 423,897,463 443,928,321 423,897,463 443,928,321 423,897,463 423,897,463

Other payables 9 197,239,903 198,309,742 191,781,208 187,111,688 9 197,239,903 191,781,208

Other current liabilities 222,061,646 172,159,971 220,158,336 170,512,521 222,061,646 220,158,336

Total current liabilities 6,441,688,259 6,203,550,425 6,481,184,380 6,230,128,236 6,441,688,259 6,481,184,380

Non-current liabilities

Liabilities under financial lease

agreements - net of current portion 14 5,635,594 5,470,378 5,635,594 5,470,37814 5,635,594 5,635,594

Debentures - net of current portion 15 1,030,000,000 890,000,000 1,030,000,000 890,000,00015 1,030,000,000 1,030,000,000

Long-term loans - net of current portion 16 494,080,000 675,000,000 494,080,000 675,000,00016 494,080,000 494,080,000

Rental received in advance 26.2 521,145,727 542,793,413 521,145,727 542,793,41326.2 521,145,727 521,145,727

Other non-current liabilities 100,042,095 96,046,295 28,144,671 30,228,946 100,042,095 28,144,671

Total non-current liabilities 2,150,903,416 2,209,310,086 2,079,005,992 2,143,492,737 2,150,903,416 2,079,005,992

Total liabilities 8,592,591,675 8,412,860,511 8,560,190,372 8,373,620,973 8,592,591,675 8,560,190,372


Balance sheets (Continued) As at 31 December 2009 and 2008

Shareholders’ equity

Share capital 17, 18 17, 18

Registered share capital

3,794,213,851 ordinary shares

of Baht 1 each

(2008: 1,986,468,146

ordinary shares of Baht 1 each) 3,794,213,851 1,986,468,146 3,794,213,851 3,794,213,851 1,986,468,146

Issued and paid-up share capital

3,703,926,216 ordinary shares

of Baht 1 each

(2008: 1,933,610,600

ordinary shares of Baht 1 each) 3,703,926,216 1,933,610,600 3,703,926,216 1,933,610,600 3,703,926,216 3,703,926,216

Share premium 594,317,420 566,804,398 594,317,420 566,804,398 594,317,420 594,317,420

Retained earnings

Appropriated - statutory reserve 19 235,400,000 178,400,000 235,400,000 178,400,00019 235,400,000 235,400,000

Unappropriated 739,789,772 2,277,393,938 723,681,037 2,265,948,023 739,789,772 723,681,037

Equity attributable to

the Company’s shareholders 5,273,433,408 4,956,208,936 5,257,324,673 4,944,763,021 5,273,433,408 5,257,324,673

Minority interest - equity attributable to

minority shareholders of subsidiary 2,955 2,303 - - 2,955 -

Total shareholders’ equity 5,273,436,363 4,956,211,239 5,257,324,673 4,944,763,021 5,273,436,363 5,257,324,673

Total liabilities and shareholders’ equity 13,866,028,038 13,369,071,750 13,817,515,045 13,318,383,994 13,866,028,038 13,817,515,045


2009 20092008 2008


(Unit : Baht)



Income statements For the years ended 31 December 2009 and 2008

Revenues

Sales income 20,329,115,960 18,540,272,456 20,330,434,724 18,541,729,82920,329,115,960 20,330,434,724

Rental and service income 684,236,990 610,121,551 572,842,217 506,108,373684,236,990 572,842,217

Other income 785,735,252 673,791,205 807,702,375 696,128,323785,735,252 807,702,375

Total revenues 21,799,088,202 19,824,185,212 21,710,979,316 19,743,966,52521,799,088,202 21,710,979,316

Expenses

Cost of sales 15,395,071,205 14,146,727,776 15,395,071,205 14,146,727,77615,395,071,205 15,395,071,205

Selling expenses 3,787,026,062 3,382,111,383 3,708,317,086 3,313,373,5943,787,026,062 3,708,317,086

Administrative expenses 784,732,881 766,928,902 780,340,879 761,370,598784,732,881 780,340,879

Management benefit expenses 16,435,000 12,550,000 16,435,000 12,550,00016,435,000 16,435,000

Other expenses 62,097,147 30,307,413 62,035,902 30,211,71062,097,147 62,035,902

Total expenses 20,045,362,295 18,338,625,474 19,962,200,072 18,264,233,67820,045,362,295 19,962,200,072

Income before financial cost and

corporate income tax 1,753,725,907 1,485,559,738 1,748,779,244 1,479,732,8471,753,725,907 1,748,779,244

Financial cost (113,129,135) (134,409,118) (114,485,389) (136,022,575)(113,129,135) (114,485,389)

Income before corporate income tax 1,640,596,772 1,351,150,620 1,634,293,855 1,343,710,2721,640,596,772 1,634,293,855

Corporate income tax (497,738,690) (391,730,900) (496,099,245) (389,764,087)(497,738,690) (496,099,245)

Net income for the year 1,142,858,082 959,419,720 1,138,194,610 953,946,1851,142,858,082 1,138,194,610

Net income attributable to:

Equity holders of the parent 1,142,857,430 959,418,953 1,138,194,610 953,946,1851,142,857,430 1,138,194,610

Minority interests of the subsidiary 652 767652

1,142,858,082 959,419,720 1,142,858,082

Earnings per share

Basic earnings per share

Net income attributable to equity

holders of the parent 0.31 0.26 0.31 0.260.31 0.31

Diluted earnings per share


holders of the parent 0.31 0.26 0.30 0.260.31 0.30


2009 20092008 2008

Separate financial statements

(Unit : Baht)



2009 20092008 2008

Statements of cash flows For the years ended 31 December 2009 and 2008

Cash flows from operating activities Net income before tax 1,640,596,772 1,351,150,620 1,634,293,855 1,343,710,2721,640,596,772 1,634,293,855

Adjustments to reconcile net income before tax

to net cash

provided by (paid for) operating activities:

Depreciation and amortisation 804,523,182 728,267,920 800,383,504 724,353,707804,523,182 800,383,504

Allowance for doubtful accounts (reversal) (11,245,058) 4,857,895 (11,245,058) 4,857,895(11,245,058) (11,245,058)

Allowance for stock obsolescence 59,219,925 59,375,259 59,219,925 59,375,25959,219,925 59,219,925

Loss from sales of assets 5,410,793 4,635,329 5,349,547 4,539,6265,410,793 5,349,547

Allowance for impairment of assets 57,000,000 20,540,000 57,000,000 20,540,00057,000,000 57,000,000

Unrealised exchange losses - net 76,352 24,532 76,352 24,53276,352 76,352

Interest expenses 110,975,824 124,228,618 112,514,434 125,960,878110,975,824 112,514,434

Income from operating activities before changes

in operating assets and liabilities 2,666,557,790 2,293,080,173 2,657,592,559 2,283,362,1692,666,557,790 2,657,592,559

Decrease (increase) in operating assets

Trade accounts receivable 17,443,042 3,740,844 17,445,936 1,408,14517,443,042 17,445,936

Inventories (236,279,432) (239,884,909) (236,279,432) (239,884,909)(236,279,432) (236,279,432)

Value added tax receivable 10,959,440 31,740,481 11,263,216 31,740,48110,959,440 11,263,216

Rental guarantee deposits 569,560 (3,771,896) 569,560 (3,771,896)569,560 569,560

Other receivables (59,273,969) (61,085,828) (54,600,254) (67,226,679) (59,273,969) (54,600,254)

Other current assets 7,097,415 (8,911,590) 214,673 (18,250,406)7,097,415 214,673

Other non-current assets 1,369,372 (11,262,914) 1,369,373 (495,492)1,369,372 1,369,373

Increase (decrease) in operating liabilities

Trade accounts payable 519,656,096 490,777,954 518,660,474 489,856,495519,656,096 518,660,474

Other payables (1,069,839) 44,804,652 4,669,520 39,879,078(1,069,839) 4,669,520

Advances received from customers (20,030,858) 56,253,267 (20,030,858) 56,253,267(20,030,858) (20,030,858)

Accrued expenses 47,375,536 86,805,931 45,805,969 91,420,79947,375,536 45,805,969

Other current liabilities 49,901,675 84,629,376 49,645,815 84,711,63149,901,675 49,645,815

Rental received in advance (21,647,686) (21,610,060) (21,647,686) (21,610,060)(21,647,686) (21,647,686)

Other non-current liabilities 3,995,800 2,627,939 (2,084,275) (3,088,855)3,995,800 (2,084,275)

Cash from operating activities 2,986,623,942 2,747,933,420 2,972,594,590 2,724,303,768 2,986,623,942 2,972,594,590

Cash paid for interest expenses (110,016,181) (119,402,301) (111,554,791) (121,134,561)(110,016,181) (111,554,791)

Cash paid for corporate income tax (422,378,455) (365,290,516) (415,871,285) (359,582,436)(422,378,455) (415,871,285)

Net cash flows from operating activities 2,454,229,306 2,263,240,603 2,445,168,514 2,243,586,7712,454,229,306 2,445,168,514


Consolidated financial statements Separate financial statements

(Unit : Baht)


Statements of cash flows (Continued) For the years ended 31 December 2009 and 2008

Cash flows from investing activities

Acquisition of computer software (23,846,186) (31,147,714) (23,846,186) (31,147,714) (23,846,186) (23,846,186)

Acquisition of leasehold rights (9,347,368) (236,526,147) (9,347,368) (236,526,147)(9,347,368) (9,347,368)

Proceeds from sales of assets 1,125,744 871,793 1,119,505 868,4111,125,744 1,119,505

Acquisition of assets (868,891,001) (1,012,403,732) (867,884,386) (1,011,215,449)(868,891,001) (867,884,386)

Net cash used in investing activities (900,958,811) (1,279,205,800) (899,958,435) (1,278,020,899)(900,958,811) (899,958,435)

Cash flows from financing activities Decrease in bank overdrafts and short-term loans

from financial institutions (124,823,805) (430,176,195) (124,823,805) (430,176,195) (124,823,805) (124,823,805)

Increase in short-term loans from related party - - 25,000,000 120,000,000- 25,000,000

Repayment of short-term loans from related party - - (15,000,000) (110,000,000)- (15,000,000)

Increase in long-term loans 745,000,000 - 745,000,000 -745,000,000 745,000,000

Decrease in liabilities under financial lease agreements (8,458,687) (5,591,053) (8,458,687)(5,591,053) (5,591,053)

Increase in debentures 300,000,000 1,130,000,000 300,000,000 1,130,000,000300,000,000 300,000,000

Repayment of debentures (660,000,000) (580,000,000) (660,000,000) (580,000,000)(660,000,000) (660,000,000)

Repayment of long-term loans (739,680,000) (400,000,000) (739,680,000) (400,000,000)(739,680,000) (739,680,000)

Converted warrants to share capital 45,816,199 19,800,513 45,816,199 19,800,513 45,816,199 45,816,199

Dividend paid (871,449,157) (346,487,296) (871,449,157) (346,487,296)(871,449,157) (871,449,157)

Net cash used in financing activities (1,310,727,816) (615,321,665) (1,300,727,816) (605,321,665)(1,310,727,816) (1,300,727,816)

Net increase in cash and cash equivalents 242,542,679 368,713,138 244,482,263 360,244,207242,542,679 244,482,263

Cash and cash equivalents at beginning of year 603,788,150 235,075,012 579,894,685 219,650,478603,788,150 579,894,685

Cash and cash equivalents at end of year 846,330,829 603,788,150 824,376,948 579,894,685846,330,829 824,376,948

Supplemental cash flows information:

Non-cash items consist of

Decrease (increase) in payables from purchases

of assets (5,381,343) 28,631,982 (5,381,343) 28,631,982(5,381,343) (5,381,343)

Stock dividends 1,752,012,439 - 1,752,012,439 -1,752,012,439 1,752,012,439


2009 20092008 2008


(Unit : Baht)


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Notes to consolidated financial statements For the years ended 31 December 2009 and 2008

1. Corporate information Home Product Center Public Company Limited (“the Company”) is a public company incorporated and domiciled in Thailand. Its major shareholders are Land and Houses Plc. and Quality Houses Plc., which were incorporated in Thailand. The Company is principally engaged in the trading of a complete range of goods and materials for construction, addition, refurbishment and renovation of buildings and residences, and provision for related services, together with space rental. Its registered address is 96/27 Moo 9, Tambol Bangkhen, Amphur Muang, Nonthaburi. As at 31 December2009, the Company has a total of 35 branches operating in Bangkok and other provinces (2008: 33 branches).

2. Basis of preparation 2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 30 January 2009, issued under the Accounting Act B.E. 2543.

The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements.

The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies.

2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of the Company (“the Company”) and the following subsidiary (“the subsidiary”)

b) Subsidiary is fully consolidated as from the date of acquisition, being the date on which the Company

obtains control, and continue to be consolidated until the date when such control ceases.

c) The financial statements of the subsidiary are prepared for the same reporting period as the parent

company, using consistent significant accounting policies.

d) Material balances and transactions between the Company and its subsidiary have been eliminated from

the consolidated financial statements.

e) Investment in the subsidiary as recorded in the Company’s books of account is eliminated against

the equity of the subsidiary.

f) Minority interest represents the portion of net income or loss and net assets of the subsidiary that is

not held by the Company and is presented separately in the consolidated income statement and within

equity in the consolidated balance sheet.

Space Percent Percent Percent Percent Percent PercentPercent Market Village company Limited Thailand 99.99 99.99 0.40 0.47 1.20 1.160.40 99.99 1.20 Rental Thailand

Assets as a Revenues as a percentage to percentage to the Company’s name Nature of Country of Percentage of the consolidated consolidated business incorporation shareholding total assets as at total revenues for the 31 December years ended 31 December

2009 2008 2009 2008 2009 2008


2.3 The separate financial statements, which present investment in subsidiary presented under the cost method,

have been prepared solely for the benefit of the public.

3. Adoption of new accounting standards In June 2009, the Federation of Accounting Professions issued Notification No. 12/2552, assigning new numbers

to Thai Accounting Standards that match the corresponding International Accounting Standards. The numbers of Thai

Accounting Standards as referred to in these financial statements reflect such change.

The Federation of Accounting Professions has issued Notification No. 86/2551 and No. 16/2552, mandating the

use of new accounting standards, financial reporting standard and accounting treatment guidance as follows.

3.1 Accounting standards, financial reporting standard and accounting treatment guidance which are effective

for the current year

• Framework for the Preparation and Presentation of Financial Statements (revised 2007)

• TAS 36 (revised 2007) : Impairment of Assets

• TFRS 5 (revised 2007) : Non-current Assets Held for Sale and Discontinued Operations

• Accounting Treatment Guidance for Leasehold Right

• Accounting Treatment Guidance for Business Combination under Common Control

These accounting standards, financial reporting standard and accounting treatment guidance became effective

for the financial statements for fiscal years beginning on or after 1 January 2009. The management has

assessed the effect of these standards and believes that Accounting Treatment Guidance for Business

Combination under Common Control is not relevant to the business of the Company, while Framework for

Preparation and Presentation of Financial Statements (revised 2007), TAS 36 (revised 2007), TFRS 5 (revised

2007) and Accounting Treatment Guidance for Leasehold Right do not have any significant impact on the

financial statements for the current year.

3.2 Accounting standards which are not effective for the current year

• TAS 20 : Accounting for Government Grants and Disclosure of Government Assistance,

effective on 1 January 2012

• TAS 24 (revised 2007) : Related Party Disclosures, effective on 1 January 2011

• TAS 40 : Investment Property, effective on 1 January 2011

However, TAS 24 (revised 2007) and TAS 40 allows early adoption by the entity before the effective date.

The management of the Company has assessed the effect of these standards and believes that TAS 20 is not

relevant to the business of the Company, while TAS 24 (revised 2007) and TAS 40 will not have any significant

impact on the financial statements for the year in which it is initially applied.

4. Significant accounting policies 4.1 Revenue recognition

Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the

goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied

after deducting discounts and allowances.


Rendering of service Service revenue is recognised when services have been rendered taking into account

the stage of completion.

Rental income Rental income under operating leases is recognised over the lease period.

Interest income Interest income is recognised on an accrual basis based on the effective interest rate.

4.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with

an original maturity of three months or less and not subject to withdrawal restrictions.

4.3 Trade accounts receivable Trade accounts receivable are stated at the net realisable value. Allowance for doubtful accounts is

provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally

based on collection experiences and analysis of debt aging.

4.4 Inventories Inventories are valued at the lower of cost (moving average cost method) and net realisable value.

Volume incentives received from the supplier are accounted for as a reduction of inventory purchases

and recognised in income statements when the related inventory is sold.

4.5 Investment Investment in subsidiary is accounted for in the separated financial statements using the cost method.

4.6 Property, plant and equipment/Depreciation Land is stated at cost, buildings and equipment are stated at cost less accumulated depreciation, and less

allowance for loss on impairment of assets (if any).

Depreciation of plant and equipment is calculated by reference to their costs, on the straight-line basis

over the following estimated useful lives:

Buildings • 20 years

Buildings on lease land and building improvement • lease periods but not over useful lives

Computer equipment • 3 - 10 years

Furniture, fixtures and office equipment • 5 - 10 years

Motor vehicles • 5 years

Depreciation is included in determining income.

No depreciation is provided on land and land improvement, and assets under installation and under

construction.


4.7 Intangible assets Intangible assets are measured at cost. Following initial recognition, intangible assets are carried at cost

less any accumulated amortisation and any accumulated impairment losses (if any).

Intangible assets (computer software) with finite lives are amortised on a systematic basis over the

economic useful life (10 years) and tested for impairment whenever there is an indication that the intangible

asset may be impaired. The amortisation period and the amortisation method of such intangible assets are

reviewed at least at each financial year end. The amortisation expense is charged to the income statement.

4.8 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company,

whether directly or indirectly, or which are under common control with the Company.

They also include individuals which directly or indirectly own a voting interest in the Company that gives

them significant influence over the Company, key management personnel, directors and officers with authority

in the planning and direction of the Company’s operations.

4.9 Long-term leases Finance leases Leases of equipment and motor vehicles which transfer substantially all the risks and rewards of ownership

are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased

assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance

charges, are included in other long-term payables, while the interest element is charged to the income

statements over the lease period. The equipment and motor vehicles acquired under finance leases is

depreciated over the useful life of the asset.

Operating leases Leases not transferring a significant portion of the risks and rewards of ownership to the lessee are

classified as operating leases. Payments made under operating leases (net of any incentives received from

the lessor) are charged to the income statements on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to

be made to the lessor by way of penalty is recognised as an expense in the period in which termination

takes place.

4.10 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the

transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the

exchange rates ruling at the balance sheet date.

Gains and losses on exchange are included in determining income.

4.11 Impairment of assets At each reporting date, the Company performs impairment reviews in respect of the properly, plant and

equipment and other assets whenever events or changes in circumstances indicate that an asset may be

impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher

of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining


value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount

rate that reflects current market assessments of the time value of money and the risks specific to the asset.

In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are

corroborated by a valuation model that, based on information available, reflects the amount that the Company

could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing

parties, after deducting the costs of disposal.

An impairment loss is recognised in the income statement.

4.12 Employee benefits Salaries, wages, bonuses and contributions to the social security fund and provident fund are recognised

as expenses when incurred.

4.13 Provisions Provisions are recognised when the Company has a present obligation as a result of a past event, it is

probable that an outflow of resources embodying economic benefits will be required to settle the obligation,

and a reliable estimate can be made of the amount of the obligation.

4.14 Income tax Income tax is provided in the accounts based on taxable profits determined in accordance with tax

legislation.

5. Significant accounting judgments and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times

requires management to make subjective judgments and estimates regarding matters that are inherently

uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ.

Significant judgments and estimates are as follows:

Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management

is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has

been transferred, taking into consideration terms and conditions of the arrangement.

Allowance for damaged goods In determining an allowance for damaged goods due to loss or deterioration, the management needs to

exercise judgment in making estimates based upon the condition of goods and the duration such goods have

remained in stock.

Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates

based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing

economic condition.



2009 2008 2009 2008

(Unit: Baht)

Trade accounts receivable 72,845,585 110,092,951 68,174,079 105,430,49268,174,079 72,845,585

Check returned receivable 4,788,722 16,474,985 4,788,722 16,474,9854,788,722 4,788,722

Credit card and coupon receivable 65,549,071 34,058,484 65,502,199 34,005,45965,502,199 65,549,071

Total 143,183,378 160,626,420 138,465,000 155,910,936138,465,000 143,183,378

Less: Allowance for doubtful accounts (14,398,348) (25,643,406) (14,398,348) (25,643,406)(14,398,348) (14,398,348)

Trade accounts receivable - net 128,785,030 134,983,014 124,066,652 130,267,530124,066,652 128,785,030

Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted

market prices are not readily available, the management exercise judgment, using a variety of valuation techniques

and models. The input to these models is taken from observable markets, and includes consideration of liquidity,

correlation and longer-term volatility of financial instruments.

Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the

useful lives and salvage values of the Company’s plant and equipment and to review estimate useful lives and

salvage values when there are any changes.

In addition, the management is required to review property, plant and equipment for impairment on a

periodical basis and record impairment losses in the period when it is determined that their recoverable amount

is lower than the carrying cost. This requires judgments regarding forecast of future revenues and expenses relating

to the assets subject to the review.

Marketing promotion expenses Marketing promotion expenses arise in respect of advertising and promotional activities, including various

sales promotion activities that are undertaken when the Company has already sold merchandise but still has

obligations to customers to make payment related to such sales promotion in the future. Certain transactions are

estimates based on experience and comparison with various information available in the related market.

However, the use of different estimates and assumptions could affect the amounts of marketing promotion expenses

and adjustments to this expense may therefore be required in the future.

6. Trade accounts receivable


Inventories 3,613,453,916 3,342,685,6753,613,453,916

Less: Allowance for stock obsolescence (112,301,165) (82,484,623)(112,301,165)

Net 3,501,152,751 3,260,201,0523,501,152,751

Less: Inventories - repaid its cost when sold (495,509,317) (437,617,125)(495,509,317)

Purchase discount (100,505,401) (94,505,401)(100,505,401)

Inventories - net 2,905,138,033 2,728,078,5262,905,138,033

8. Investment in subsidiary

Separate financial statements Shareholding Dividend received Paid-up capital percentage Cost during the year 2009 2008 2009 2008 2009 2008 2009 2008 (Percent) (Percent)

Subsidiary

Market Village Co., Ltd. 99.99 4,999,300 4,999,300 - -4,999,300 5,000,000 5,000,000 5,000,000 - 99.99


Consolidated and separate financial statements

2009 2008 2009 2008

2009 2008

(Unit: Baht)

(Unit: Baht)

(Unit: Baht)

Age of receivables

Not yet due 126,264,984 127,421,935 123,871,466 125,318,455123,871,466 126,264,984

Past due:

Upto 6 months 11,801,713 16,664,851 9,520,286 14,052,8479,520,286 11,801,713

6 - 12 months 43,433 14,724 - 14,724- 43,433

Over 12 months 5,073,248 16,524,910 5,073,248 16,524,9105,073,248 5,073,248

Total 143,183,378 160,626,420 138,465,000 155,910,936138,465,000 143,183,378

Less: Allowance for doubtful accounts (14,398,348) (25,643,406) (14,398,348) (25,643,406)(14,398,348) (14,398,348)

Trade accounts receivable - net 128,785,030 134,983,014 124,066,652 130,267,530124,066,652 128,785,030

The outstanding balances of trade accounts receivable as at 31 December 2009 and 2008 are aged as follows:

7. Inventories


(Unit: Baht)

9. Related party transactions During the years, the Company and its subsidiary had significant business transactions with related parties.

Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on

commercial terms and bases agreed upon between the Company and those related parties.

Consolidated Separate financial statements financial statements

2009 2008 2009 2008

Pricing policy

Transactions with subsidiary company

(eliminated from the consolidated

financial statements)

Sales of goods - - 1,318,764 1,457,373 1,318,764 - Market price

Rental and service income - - 138,894,845 118,957,492 138,894,845 - Baht 10.9-11.7 million

per month for 2009 and

Baht 9.5-11.0 million

per month for 2008

Other income - - 24,293,934 22,742,904 24,293,934 - Percentage of core revenue

Service income - - 7,558,230 6,872,228 7,558,230 - Actual cost

Interest expenses - - 1,538,610 1,732,260 1,538,610 - 1.50-4.00 percent per

annum (2008: 3.40-4.25

percent per annum)

Transactions with related companies

Sales of goods 4,371,699 11,331,640 4,371,699 11,331,640 4,371,699 4,371,699 Market price

Interest income 1,809,526 1,647,215 1,809,526 1,647,215 1,809,526 1,809,526 0.75-2.85 percent per

annum (2008: 0.75-3.00

percent per annum)

Purchases of goods 1,410,774 5,328,940 1,410,774 5,328,940 1,410,774 1,410,774 Market price

Rental and service expenses 17,918,221 18,575,202 17,918,221 18,575,202 17,918,221 17,918,221 Percentage of sales


During the year 2009, movements in the balances of short-term loans from related party were as follows:

As at During the year As at 1 January 2008 Increase Decrease 31 December 2009

Subsidiary

Market Village Co., Ltd. 60,000,000 25,000,000 (15,000,000) 60,000,000 70,000,00025,000,000

2009 2008 2009 2008

As at 31 December 2009 and 2008, the Company had the outstanding balances with related parties which had

been included in the following accounts:(Unit: Baht)

(Unit: Baht)


Relationship with the related companies(1) has common shareholders

(2) the major shareholders

Bill of exchanges and deposits with financial institution

(included in cash and cash equivalents)

Land and Houses Retail Bank Plc.(1) 677,976,592 435,139,799 677,976,592 435,139,799677,976,592 677,976,592

Trade accounts receivable

Land and Houses Plc. and subsidiaries(2) 432,460 2,261,237 432,460 2,261,237432,460 432,460

Quality Houses Plc. and subsidiaries(2) 141,868 66,457 141,868 66,457141,868 141,868

Market Village Co., Ltd. (eliminated from

the consolidated financial statements) - - 81,800 177,86081,800 -

Total 574,328 2,327,694 656,128 2,505,554656,128 574,328

Other receivables

Quality Construction Products Plc. and subsidiaries(1) 3,210 6,420 3,210 6,4203,210 3,210


the consolidated financial statements) - - 2,254,534 6,928,2502,254,534 -

Total 3,210 6,420 2,257,744 6,934,6702,257,744 3,210

Rental guarantee deposits

Quality Houses Property and Loans Funds(1) 3,000,000 3,000,000 3,000,000 3,000,0003,000,000 3,000,000

Trade accounts payable

Quality Construction Products Plc. and subsidiaries(1) 161,918 2,263,542 161,918 2,263,542161,918 161,918

Short-term loans from related party


the consolidated financial statements) - - 70,000,000 60,000,00070,000,000 -

Other payables

Quality Houses Property and Loans Funds(1) 1,302,452 1,307,185 1,302,452 1,307,1851,302,452 1,302,452


(Unit: Baht)


Costs:

As at 31 December 2008 11,163,485,025391,700,955 2,380,384,994 6,263,902,855 280,186,063 1,809,035,498 38,274,660

874,272,344657,291,412 Additions - 63,993,299 18,057,547 128,879,413 6,050,673

(27,202,215)(487,078) Disposals - (3,852,465) (5,967,045) (14,349,329) (2,546,298)

-(949,387,798) Transfers in (out) - 876,562,247 14,783,657 57,856,894 185,000

As at 31 December 2009 12,010,555,15499,117,491 2,380,384,994 7,200,605,936 307,060,222 1,981,422,476 41,964,035

Accumulated depreciation:

As at 31 December 2008 2,486,774,238- - 1,210,292,257 214,757,057 1,039,743,980 21,980,944

Depreciation for the year 756,319,116- - 407,280,686 43,938,557 298,082,167 7,017,706

Depreciation on disposals (20,665,678)- (907,404) (5,869,498) (11,980,785) (1,907,991) -

As at 31 December 2009 3,222,427,676- 1,616,665,539 252,826,116 1,325,845,362 27,090,659 -

Allowance for impairment

loss:

As at 31 December 2008 63,540,00013,000,000 50,540,000 - - - -

Increase during the year 14,000,000- 14,000,000 - - - -

As at 31 December 2009 77,540,00013,000,000 64,540,000 - - - -

Net book value:

31 December 2008 8,613,170,7872,367,384,994 5,003,070,598 65,429,006 769,291,518 16,293,716 391,700,955

31 December 2009 8,710,587,4782,367,384,994 5,519,400,397 54,234,106 655,577,114 14,873,376 99,117,491

Depreciation for the year

2008 (Baht 641.7 million included in selling expenses, and the balance in administrative expenses) 684,135,731


Short-term loans from related party The Company has received unsecured loans of Baht 70 million (2008: Baht 60 million) from subsidiary, on which

interest is payable on a monthly basis at a rate of 1.50 - 4.00 percent per annum (2008: 3.40 - 4.25 percent per annum).

The loans are repayable at call.

Directors and management’s remuneration During the year 2009, the Company and its subsidiary paid salaries, bonus, meeting allowance and gratuities to

their directors and management totaling Baht 16.44 million (2008: Baht 12.55 million).

In addition, during the year 2008 the Company has allocated 5,750,000 warrants to the directors who are the

management of the Company and subsidiary without charge. The details of the warrants are presented in Note 18 to

the financial statements.

10. Property, plant and equipment

Land and Land

Improvement

Buildings andbuilding

Improvement

FurnitureFixtures and

officeequipment

Assets underinstallationand under

construction

Computer equipment

Motorvehicles Total



As at 31 December 2009, the Company had vehicles and equipment under finance lease agreements with net

book values amounting to Baht 15.4 million (2008: Baht 34.0 million).

As at 31 December 2009, certain plant and equipment items have been fully depreciated but are still in use. The

original cost of those assets amounted to approximately Baht 512.6 million (2008: Baht 440.2 million) (The separate

financial statements: Baht 512.6 million, 2008: Baht 440.2 million).

As at 31 December 2009, the Company has mortgaged buildings and leasehold rights (Note 12) with net book

value of Baht 625.4 million (2008: Baht 576.5 million) to secure credit facilities from banks, as described in Notes 13

and 16.

Cost:

11,143,245,6256,263,257,138 279,966,861 1,790,258,063 37,677,614 391,700,955 As at 31 December 2008 2,380,384,994

Additions 873,265,729- 63,993,299 18,029,467 127,900,878 6,050,673 657,291,412

Disposals (26,986,830)- (3,852,465) (5,967,045) (14,133,945) (2,546,297) (487,078)

Transfers in (out) -- 876,562,247 14,783,657 57,856,894 185,000 (949,387,798)

As at 31 December 2009 11,989,524,5242,380,384,994 7,199,960,219 306,812,940 1,961,881,890 41,366,990 99,117,491

Accumulated depreciation:

As at 31 December 2008 2,477,291,857- 1,210,201,097 214,669,696 1,030,788,369 21,632,695 -

Depreciation for the year 752,180,384- 407,216,115 43,875,669 294,190,303 6,898,297 -

Depreciation on disposals (20,517,778)- (907,404) (5,869,497) (11,832,886) (1,907,991) -

As at 31 December 2009 3,208,954,463- 1,616,509,808 252,675,868 1,313,145,786 26,623,001 -

Allowance for impairment

loss:

As at 31 December 2008 63,540,00013,000,000 50,540,000 - - - -

Increases during the year 14,000,000- 14,000,000 - - - -

As at 31 December 2009 77,540,00013,000,000 64,540,000 - - - -

Net book value:

31 December 2008 8,602,413,7682,367,384,994 5,002,516,041 65,297,165 759,469,694 16,044,919 391,700,955

31 December 2009 8,703,030,0612,367,384,994 5,518,910,411 54,137,072 648,736,104 14,743,989 99,117,491

Depreciation for the year



(Unit: Baht)

Land and Land

Improvement

Buildings andbuilding

Improvement

FurnitureFixtures and

officeequipment

Assets underinstallationand under

construction

Computer equipment

Motorvehicles Total


(Unit: Baht)

(Unit: Baht)


2009 2008

11. Computer software

Cost

31 December 2008 210,806,288 210,796,832210,806,288

Acquisitions during the year 23,846,186 23,846,18623,846,186

31 December 2009 234,652,474 234,643,018234,652,474

Accumulated amortisation

31 December 2008 80,644,038 80,641,25880,644,038

Amortisation for the year 18,892,537 18,891,59118,892,537

31 December 2009 99,536,575 99,532,84999,536,575

Allowance for impairment loss

31 December 2008 - --

Increase during the year 43,000,000 43,000,00043,000,000

31 December 2009 43,000,000 43,000,00043,000,000

Net book value

31 December 2008 130,162,250 130,155,574130,162,250

31 December 2009 92,115,899 92,110,16992,115,899

12. Leasehold rights(Unit: Baht)

Consolidated and Separate financial statements

Consolidated and separatefinancial statements

Cost

31 December 2008 861,451,458

Acquisitions during the year 9,347,368

31 December 2009 870,798,826

Accumulated amortisation

31 December 2008 138,487,799

Amortisation for the year 29,311,529y

31 December 2009 167,799,328

Net book value

31 December 2008 722,963,659

31 December 2009 702,999,498

13. Bank overdrafts and short-term loans from financial institutions

Short-term loans from financial institutions - 124,823,805-


As at 31 December 2009, the Company had short-term loans from financial institution in the form of promissory

notes. The loans carry interest at rate of 4.00% per annum and are not secured. The loans are repayable at call.

As at 31 December 2009 and 2008, the Company had overdraft lines from banks totaling Baht 155 million and

Baht 130 million, respectively, and other credit facilities amounting to Baht 3,929 million and Baht 4,677 million,

respectively, some of which are secured by leasehold rights and construction (Notes 10 and 12).

Consolidated and separate financial statements Number of debentures (Unit) Amount (Baht) 2009 2008 2009 2008

14. Liabilities under financial lease agreements

15. Debentures

Liabilities under financial lease agreements 3,996,042 9,951,132 5,995,160 5,847,3243,996,042 5,995,160

Less: Deferred interest expense (456,590) (655,411) (359,566) (376,946)(456,590) (359,566)

Net 3,539,452 9,295,721 5,635,594 5,470,3783,539,452 5,635,594

(Unit: Baht)

(Unit: Baht)

(Unit: Million Baht)

The Company has entered into the finance lease agreements with leasing companies for rental of motor vehicles

and equipment for use in its operation, whereby it is committed to pay rental on a monthly basis. The terms of the

agreements are generally between 3 to 5 years.

As at 31 December 2009, Future minimum lease payments required under the finance lease agreements were

as follows:-

Future minimum lease payments 4.00 6.00 10.00

Deferred interest expenses (0.46) (0.36) (0.82)

Present value of future minimum lease payments 3.54 5.64 9.18

Less than 1 year 1 - 5 years Total

Unsecured debentures #1/2005 series 2 - 500,000 - 500,000,000- -

Unsecured debentures

#1/2008 500,000 500,000 260,000,000 420,000,000500,000 260,000,000

#2/2008 630,000 630,000 630,000,000 630,000,000630,000 630,000,000

#1/2009 300,000 - 300,000,000 -300,000 300,000,000

Total 1,430,000 1,630,000 1,190,000,000 1,550,000,0001,430,000 1,190,000,000

Less: Current portion (160,000,000) (660,000,000) (160,000,000)

Debentures - net of current portion 1,030,000,000 890,000,000 1,030,000,000

Portion due within one yearConsolidated and separate financial statements

Portion due over one year 2009 2008 2009 2008


Details of the Company’s debentures are as follows:

1. The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 1/2005 Series 2 Due 2009

Name of debentures

Name of debentures

“ The Unsubordinated and Unsecured Debentures ofHome Product Center Plc. No. 1/2005 Series 2 Due 2009 ”

“The Principal paid by installment Debentures ofHome Product Center Plc. No. 1/2008 Due 2011”

Amounts Baht 500 million

Term 4 years, starting from date of issuance

Issue date 17 March 2005

Interest rate 5.40 percent per annum

Interest payment schedule Quarterly in March, June, September and December

Principal repayment On the redemption date of 17 March 2009

Covenants Maintenance of debt to equity ratios and restrictions on dividend payment

Amount Baht 500 million


Issue date 2 May 2008

Interest rate 4.00% per annum

Interest payment schedule Quarterly in February, May, August and November

Principal repayment 12 quarterly payments totaling Baht 40 million each

(the last of Baht 60 million), starting 2 August 2008 and with

the last payment due on 2 May 2011

Covenants Maintenance of debt to equity ratios

The unsecured debentures of Baht 500 million matured on 17 March 2009; the Company has, therefore, already

paid in full to the debentures holders.

2. The Principal paid by installment of the Unsubordinated and Unsecured Debentures of Home Product Center

Plc. No. 1/2008 Due 2011

During the current year, the Company repaid the principal of debentures amounting to Baht 40 million per

each installment, totaling Baht 160 million, as stipulated in the terms of repayment of the above debentures, to the

debenture holders.


Name of debentures

Name of debentures

“The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No. 2/2008 due 2011”




Issue date 21 November 2008


Interest payment schedule Quarterly in November, February, May and August

Principal repayment On the redemption date of 21 November 2011




Issued date 1 October 2009


Interest payment schedule Quarterly in January, April, July and October, starting from 1 January 2010

and with the last payment due on 2 October 2012

Principal repayment On the redemption date of 2 October 2012


3. The Unsubordinated and Unsecured Debentures of Home Product Center Plc. No.2/2008 Due 2011.

On 8 April 2009, the Annual General Meeting of the shareholders of the Company passed resolution approving

the cancellation of debentures which previously approved for issuance and has not yet been offered at the amount of

Baht 1,870 million, and the issuance and offering of debt instruments, details are as follows:-

• The issuance and offering of bills of exchange and/or short-term debentures of which the maturity date

shall not exceed 270 days from the date of issuance, in the amount of not exceeding Baht 2,000 million.

• The issuance and offering of long-term debentures of which the maturity date shall not exceed 10 years

from the date of issuance, in the amount of not exceeding Baht 4,000 million.

4 On 1 October 2009, the Company issued Baht 300 million of the Unsubordinated and Unsecured Debentures

of Home Product Center Plc. No. 1/2009 due 2012, to be sold by private placement, in accordance with a resolution

of the Annual General Meeting of the Company held on 8 April 2009. Details are as follows: -


16. Long-term loans Details of the Company’s long-term loans are as follows: -

(Unit: Baht)

* : At 4.15% - 4.25% per annum and from June 2010 onwards at MLR

** : At MLR minus an agreed margin

1. The Company has pledged its assets and leasehold rights to secure loans (facility #1) (Note 10 and 12).

2. On 8 June 2007, the Company entered into a Baht 2,000 million loan agreement with a commercial

bank (facility #2). The loans will be repaid within 78 monthly installments of not less than Baht 33 million

each, and are subject to interest at the MLR minus the agreed margin. The loans are secured by a negative

pledge over some of the Company’s assets and certain leasehold rights.

On 28 July 2008, the Company and the bank jointly amended the loan agreement to decrease the facility

from Baht 2,000 million to Baht 845 million. On 5 February 2009, the Company and the bank jointly

amended certain conditions of use of loan facilities, including the term of repayment. The term of loan

repayment had been changed from monthly payment in the amount of not less than Baht 33.00 million,

within 61 months to monthly payment in the amount of not less than Baht 15.52 million, within 48 months.

In September 2009, the Company has utilised the long-term loan facility in full (2008: the unutilised

portion of the facility amounted to Baht 745 million).

In October 2009, the Company made an early repayment for a portion of loan principal amounting to

Baht 300 million.

3. The Company has to comply with certain covenants stipulated in the loan agreements such as the

maintenance of debt to equity ratio.

1 1,500,000,000 675,000,000 975,000,000 25.00 Million * 1,500,000,000 25.00 Million 675,000,000

2 845,000,000 305,320,000 - 15.52 Million **845,000,000 15.52 Million 305,320,000

Total 980,320,000 975,000,000 980,320,000

Less: Current portion (486,240,000) (300,000,000)(486,240,000)

Long-term loans - net

of current portion 494,080,000 675,000,000494,080,000

Consolidated and separate financial statements Outstanding balances 2009 2008

No.Interest Rate

Terms of payment

(per month)

Principal


17. Share capital

As discussed in Note 18, during the current year, the holders of the warrants of the Company exercised the warrants

as follows:

2009 Warrants(Unit)

Ordinary shares(Shares)

Exercise price(Baht/share)

Amount(Baht)

ESOP-W2 9,700 17,682 1.000 17,682

ESOP-W3 5,352,901 5,525,360 1.000 5,525,360

ESOP-W4

• The first quarter 1,786 1,786 3.980 7,108

• The second quarter 2,366,215 2,406,419 3.912 9,413,912

• The third quarter 5,061,028 5,147,037 3.912 20,135,209

• The fourth quarter 2,694,046 5,204,893 2.059 10,716,875

10,123,075 12,760,135 40,273,104

Total 15,485,676 18,303,177 45,816,146

As discussed in the above matter, as a result of the increase in the number of ordinary shares, the paid-up share

capital and premium on ordinary shares are as follows:

(Unit: Baht)

Number of Paid-up share Premium on ordinary shares capital ordinary shares (Thousand shares) (Thousand baht) (Thousand baht)

Registered share capital

At the beginning of the year 1,986,468.1

Increase in registered share capital to

support the payment of a stock dividend

and exercising of the rights of the warrants 1,807,745.8

At the end of the year 3,794,213.9

Issued and paid-up share capital

At the beginning of the year 1,933,610.6 1,933,610.6 566,804.4

Increase in capital from exercising of

the rights of the warrants 18,303.2 18,303.2 27,513.0

Increase in capital from a payment of stock

dividend 1,752,012.4 1,752,012.4 -

At the end of the year 3,703,926.2 3,703,926.2 594,317.4

On 8 April 2009, the Annual General Meeting of the shareholders of the Company passed resolution approving for

the increase in registered capital of Baht 14.7 million, from the previous registered capital of Baht 1,986.5 million to

Baht 2,001.2 million by issuance of additional 14.7 million ordinary shares, at a par value of 1 Baht each, to support

the exercising of the rights of the warrants allotted to employees of the Company (ESOP-W4).

(Unit: Baht)


18. Warrants Details of the warrants of the Company which were issued without charge, are as follows: -

Type of warrant Issue toIssuance date ofwarrant

Exercise priceper share

Exerciseratio per1 warrant

Number of warrantissued(Units)

Perion ofwarrant

ESOP-W2 Directors and 28 February 7,000,000 3 years Baht 1.00 1 ordinary

employees of 2006 shares

the Company

ESOP-W3 Directors and 2 April 15,000,000 3 years Baht 1.00 1 ordinary


the Company

ESOP-W4 Directors and 23 may 50,000,000 5 years Baht 3.98 1 ordinary


the Company and

its subsidiary

On 29 September 2009, the Extraordinary General Meeting of the shareholders of the Company approved the

following resolutions: -

1. The allocations of the Company’s retained earnings and the interim dividend payment are as follows: -

• Allocation of 5% of net income of January 2009 through June 2009 amounting to Baht 25.0 million to

the statutory reserve.

• Payment of a stock dividend comprising 1,752 million shares with a par value of Baht 1 each, or a total

of Baht 1,752.0 million, to the Company’s shareholders. The rate of payment is 9 dividend shares for every

10 existing shares, or Baht 0.90 per share. Any existing shareholdings, after such allocation, with less

than 10 shares are to receive a cash dividend of Baht 0.9 per share.

• Payment of a cash dividend of Baht 0.10 per share, or not exceeding in a total of Baht 194.7 million.

Total dividend shall be paid at the rate of Baht 1 per share.

The Company has already paid the stock dividend and the cash dividend on 27 October 2009.

2. An approval of a Baht 1,793.0 million increase in registered capital, from Baht 2,001.2 million to Baht 3,794.2

million, by issuing an additional 1,793.0 million ordinary shares with a par value of Baht 1 each. The meeting

approved the following allocations of the shares:

• 1,752.0 million shares allocated to support the payment of a stock dividend.

• 41.0 million shares reserved for the exercise of the warrants allotted to employees of the Company

(ESOP-W4), of which the conversion rights will be adjusted when the stock dividend is paid.

In October 2009, the Company allocated 1,752 million ordinary shares for stock dividend payment. It registered

the increase in its paid-up share capital to Baht 3,698.7 million with the Ministry of Commerce on 20 October

2009. In addition, the Company filed an application with the Stock Exchange of Thailand (SET) to register the

additional 1,752 million shares as listed securities. The SET approved the trading of the additional shares through

the stock market to be effective from 27 October 2009.

The Company registered the increase in its paid up share capital to Baht 3,703.9 million with the Ministry of

Commerce on 25 December 2009.


During 2008, the Company had issued ESOP-W4 to the Company’s and subsidiary’s employees. The issue of

ESOP-W4 has affected the exercise of ESOP-W2 and ESOP-W3 as follows:

ESOP-W2 Baht 1.00 1.823 ordinary shares




ESOP-W3 1.000 1.957

ESOP-W4 2.059 1.932

Type of warrant Exercise price per share Exercise price per 1 warrant



According to the resolution of the Annual General Meeting of Shareholders dated on 8 April 2009, that approve

the Company to pay dividend at the rate of more than 55% of net profit after tax in 2008. As a result the Company

needs to adjust the rights of the warrants allotted to employees of the Company (ESOP-W3 and ESOP-W4) in accor-

dance with prospectus for the offering of warrants in respect of the condition to adjust the rights of warrants and the

changes in prices as follows:

The adjusted exercise prices and exercise ratios of ESOP-W3 and ESOP-W4 shall become effective since 16 April 2009.

According to the Extraordinary General Meeting of the shareholders of the Company, held on 29 September 2009,

as discussed in Note 17, the Company has to pay the interim dividend to the shareholders in the amount of 1,752.0

million ordinary shares. The payment of such stock dividend has been made on 27 October 2009. As a result, the Com-

pany needs to adjust the right of the warrants allotted to the employees of the Company (ESOP-W3 and ESOP-W4) in

accordance with the prospectus for the offering of warrants in respect of the condition to adjust the right of warrants

and the changes in prices.

The adjusted exercise prices and exercise ratios of ESOP-W3 and ESOP-W4 shall become effective from

12 October 2009.

During the year, the movements of warrants of the Company are as follows: -(Unit: Unit)

Type of warrant

Number of warrants

outstanding as at31 December 2008

Number of warrants exercised

during the year

Number of warrants expiredduring the year

Number of warrants

outstanding as at31 December 2009

ESOP-W2 18,200 (9,700) (8,500) 18,200 (9,700) -

ESOP-W3 5,933,832 (5,352,901) - 5,933,832 (5,352,901) 580,931

ESOP-W4 46,271,700 (10,123,075) - 46,271,700 (10,123,075) 36,148,625


19. Statutory reserve

20. Expenses by nature

Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside to

a statutory reserve at least 5 percent of its net income, until the reserve reaches 10 percent of the registered capital.

The statutory reserve is not available for dividend distribution.

Significant expenses by nature are as follow:(Unit: Million Baht)


2009 2008 2009 2008

Employee remuneration 1,437 1,272 1,437 1,2721,437 1,437

Premises expenses 820 789 820 741820 820

Depreciation and amortisation 805 728 800 724805 800

Sales promotion and operation support expenses 784 1,156 758 1,143784 758

Financial costs 114 134 114 136114 114

Income tax 558 392 557 390 558 557

Changes in finished goods (265) (285) (265) (285)(265) (265)

21. Earnings per share Basic earnings per share is calculated by dividing the net income for the year by the weighted average

number of ordinary shares in issue during the year, after adjusting the number of ordinary shares in proportion to

the change in the number of shares as a result of the increase in share capital arising from the issue of a stock

dividend of 1,752.0 million shares on 20 October 2009, as discussed in Note 17. The number of ordinary shares

of the prior year has been adjusted as if the stock dividend had been issued at the beginning of the earliest period

reported.

Diluted earnings per share is calculated by dividing net income for the year by the weighted average number

of ordinary shares in issue during the year, after adjusting the number of ordinary shares in proportion to the

change in the number of shares as a result of the increase in share capital arising from the issue of a stock

dividend, as discussed in the above paragraph, plus the weighted average number of ordinary shares that would

need to be issued to convert all dilutive potential ordinary shares into ordinary shares. The calculation assumes

that the conversion took place either at the beginning of the year or on the date the potential ordinary shares

were issued.




0.26 holders of the parent 953,946,185 3,692,219,841 3,681,877,964 1,138,194,610 3,692,219,841 0.31

Effect of dilutive potential ordinary shares - 48,733,170 10,697,835 - 48,733,170


Net income of ordinary shareholders

assuming the conversion of

warrants to ordinary shares 953,946,185 3,740,953,011 3,692,575,799 0.30 0.261,138,194,610 3,740,953,011 0.30

The following table sets forth the computation of basic and diluted earnings per share:

Consolidated financial statements For the year ended 31 December

Separate financial statements For the year ended 31 December

Net income Weighted average number Earnings (Baht) of ordinary shares (shares) per share (Baht)

Net income Weighted average number Earnings (Baht) of ordinary shares (shares) per share (Baht)

2009 2008 2009 2008 2009 2008 (Restated) (Restated)

2009 2008 2009 2008 2009 2008 (Restated) (Restated)



3,681,877,964 0.31 0.26 holders of the parent 959,418,953 1,142,857,430 3,692,219,841 0.31

Effect of dilutive potential ordinary shares 10,697,835 - - 48,733,170


Net income of ordinary shareholders

assuming the conversion of

warrants to ordinary shares 959,418,953 3,740,953,011 3,692,575,799 0.31 0.261,142,857,430 3,740,953,011 0.31

22. Financial information by segment The majority of the operations of the Company and subsidiary involve the business segments of trading of a complete

range of goods and materials for construction, addition, refurbishment and renovation of buildings and residences, and

provision of related services, together with space rental (as having revenue and assets less than 10 percent of total

revenue and total assets of all segments) and are carried on in a single geographic area, Thailand. As a result, all

revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned trading

industry and geographic area.

23. Provident fund The Company and its employees have jointly established a provident fund in accordance with the Provident Fund

Act B.E. 2530. Both employees and the Company contributed to the fund monthly at the rate of 3 - 5 percent of basic

salary. The fund, which is managed by American International Assurance Co., Ltd., will be paid to employees upon

termination in accordance with the fund rules. During the year 2009, the Company contributed Baht 30.24 million

(2008: Baht 23.98 million) to the fund.


(Unit: Baht)24. Dividend paid

Total Dividend Approved by dividends per share Paid on (Million Baht) (Baht)

Extraordinary General Meeting of

Interim dividend for 2009 the shareholders on 29 September 2009 194.67 0.10 27 October 2009

Extraordinary General Meeting of

Interim stock dividend for 2009 the shareholders on 29 September 2009 1,752.00 0.90 27 October 2009

Annual General Meeting of

Final dividend for 2008 the shareholders on 8 April 2009 676.78 0.35 28 April 2009

Annual General Meeting of

Final dividend for 2007 the shareholders on 9 April 2008 346.49 0.18 8 May 2008

25. Commitments and contingent liabilities 25.1 As at 31 December 2009 and 2008, the Company has commitments totaling Baht 66.65 million and Baht

75.90 million, respectively, to commercial banks in respect of guarantees provided for leasing, purchases

of goods or hire of work, as bonds with State Enterprise.

25.2 As at 31 December 2009, the Company has commitments under letters of credit opened with two commercial

banks, amounting to USD 3.53 million (2008: USD 1.99 million).

26. Commitments under long-term lease agreements 26.1 Long-term lease agreements - as lease

a) The Company has entered into 11 land lease agreements. The terms of the agreements are generally

between 26 to 30 years and they are non cancelable, except with the consent of the counterparties.

As at 31 December 2009, future minimum lease payments required under these operating leases

contracts were as follows: (Million Baht) contracts were as follows:

Payable within: • 1 Year 43.5

• 2 to 5 years 188.0

• Thereafter 922.7

1,154.2

b) The Company has entered into 17 lease agreements to lease commercial space. The terms of the

agreements are generally between 17 to 30 years and they are not cancelable, except with the consent

of the counterparties.

As at 31 December 2009, future minimum lease payments required under these operating leases

contracts were as follows:

(Million Baht)

Payable within: • 1 Year 82.5

• 2 to 5 years 353.5

• Thereafter 1,331.2

1,767.2


Fixed interest rates

Within 1 Year Over 1-5 years

totalFloating

interest rate(Baht)

Non-interest bearing

Interestrate

(% p.a.)

26.2 Long-term lease agreements - as leaser

The Company has entered into seven agreements with two companies to lease and sub-lease parts of

premises in 5 branches for periods of 29-30 years, with a total of rental received in advance amounting

to Baht 640.49 million. The terms of the agreements are until 2033 - 2036. The Company recognises

this income systematically on a straight-line basis over the useful lives of the leaseholds.

The outstanding balance of rental received in advance, net of recognised rental income, as of

31 December 2009 was Baht 521.1 million (2008: Baht 542.8 million).

27. Financial instruments 27.1 Financial risk management

The Company’s financial instruments, as defined under Thai Accounting Standard No. 32 “Financial

Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, trade accounts

receivable, other receivables, short-term loans, debentures and long-term loans. The financial risks

associated with these financial instruments and how they are managed is described below.

Credit risk

The Company is exposed to credit risk primarily with respect to trade accounts receivable and other

receivable. The Company manages the risk by adopting appropriate credit control policies and procedures

and therefore does not expect to incur material financial losses. In addition, the Company does not

have high concentrations, of credit risk since it has a large customer base. The maximum exposure to

credit risk is limited to the carrying amounts of trade accounts receivable and others receivable as stated

in the balance sheet.

Interest rate risk

The Company’s exposure to interest rate risk relates primarily to its deposits with financial institutions,

short-term loans, debentures and long-term loans. However, since the Company’s financial assets and

some of its financial liabilities bear floating interest rates and some of financial liabilities bear fixed

interest rates which are close to the market rate, the interest rate risk is expected to be minimal.

Significant financial assets and liabilities as at 31 December 2009, classified by type of interest rate,

are summarised in the table below, with those financial assets and liabilities that carry fixed interest rates

further classified based on the maturity date, or the repricing date if this occurs before the maturity date.


Financial assets

Cash and cash equivalents 675,000,000 - 59,593,753 111,737,076 846,330,829 0.50 - 1.00

Financial liabilities

Debentures 160,000,000 1,030,000,000 - - 1,190,000,000 4.00 - 5.50

Long-term loans 125,000,000 - 855,320,000 - 980,320,000 4.32 - 5.27

285,000,000 1,030,000,000 855,320,000 - 2,170,320,000


Fixed interest rates

Within 1 Year Over 1-5 years

totalFloating

interest rate(Baht)

Non-interest bearing

Interestrate

(% p.a.)


Financial assets

824,376,948 0.50 - 1.0038,217,786 111,159,162 Cash and cash equivalents 675,000,000 -

Financial liabilities

Short-term loans from

70,000,000 1.50 - 4.00- - related party 70,000,000 -

1,190,000,000 4.00 - 5.50- - Debentures 160,000,000 1,030,000,000

Long-term loans 125,000,000 - 855,320,000 - 980,320,000 4.32 - 5.27

355,000,000 1,030,000,000 855,320,000 - 2,240,320,000

Foreign currency risk

The Company’s exposure to foreign currency risk arises mainly from good purchase transactions that are

denominated in foreign currencies. The Company has not entered into forward exchange contracts to hedge this risk.

The balances of financial liabilities denominated in foreign currencies as at 31 December 2009 are

summarised below.

USD 505,416 33.5168

Foreign currency Financial liabilities Average echange rate as at 31December 2009 (Dollar) (Baht per dollar)

27.2 Fair values of financial instruments

Since some of the Company’s financial assets and liabilities are short-term in nature and loans bear

interest at rates close to market rate or floating interest rates, their fair value is not expected to be

materially different from the amounts presented in the balance sheets.

A fair value is the amount for which an asset can be exchanged or a liability settled between

knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference

to the market price of the financial instrument or by using an appropriate valuation technique, depending

on the nature of the instrument.

28. Capital management The primary objectives of the Company and its subsidiary capital management are to ensure that it has an

appropriate financing structure and preserves the ability to continue its business as a going concern.

As at 31 December 2009, total debt to equity ratios in the consolidated financial statements and the separate

financial statements are 1.63.


(Unit: Baht)

(Unit: Baht)

Reclassified Previously Report

Reclassified Previously Report



Accrued expenses 317,074,342 380,940,852317,074,342

Other current liabilities 172,159,971 108,293,461172,159,971

Accrued expenses 301,203,104 365,069,614301,203,104

Other current liabilities 172,152,521 106,646,011172,152,521

29. Subsequent event 29.1 On 8 January 2010, the Company issued Baht 700 million of the Unsubordinated and Unsecured Debentures

of Home Product Center Plc. No. 1/2010 due 2013, to be sold by institutional investor and/or major investor,

in accordance with a resolution of the Annual General Meeting of the Company held on 8 April 2009

Details are as follows: -“


Name of ebentures



Issued date 8 January 2010


Interest payment schedule Quarterly in January, April, July and October, starting from 8 April 2010 and

with the last payment due on 8 January 2013

Principal repayment On the redemption date of 8 January 2013


29.2 The Company’s Board of Directors Meeting, held on 18 February 2010, passed a resolution approving the

payment of a cash dividend of Baht 0.212 per share to the ordinary shareholders, from the 2009 operating

results, Baht 0.052 per share of which was paid as an interim cash dividend with the remaining of Baht

0.16 per share shall be paid. The dividend payment will be proposed to approve by the Annual General

Meeting of the Company’s shareholders.

30. ReclassificationCertain amounts in the financial statements for the year ended 31 December 2008 have been reclassified to

conform to the current year’s classification but with no effect to previously reported net income or shareholders’

equity. The reclassifications are as follow:

31. Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 18 February 2010.

Board of Directors

Mr.Anant AsavabhokhinChairman

Mr.Pong SarasinIndependent Director

Mr.Rutt PhanijphandDirector, Executive Director and

Chairman of the Nomination and Remuneration Committee

Mr.Apichat NatasilpaDirector and Nomination and

Remuneration Committee

Mr.Manit UdomkunnatumDirector and Chairmanof Executive Directors

Mr.Naporn SoonthornchitcharoenDirector and Executive Director

Mr.Apilas OsatanonIndependent Director and

Chairman of the Audit Committee

Mr.Khunawut ThumpomkulDirector, Executive Director

and Managing Director

Mr.Thaveevat TatiyamaneekulIndependent Director and Audit Committee

Mr.Chanin RoonsumrarnIndependent Director,Audit Committee and

Nomination andRemuneration Committee

Mr.Joompol MeesukDirector

Mrs.Suwanna Buddhaprasart Director

Home Product Center Plc. 96/27 Moo 9 Tambon Bangkhen, Amphoe Muang, Nonthaburi 11000Telephone (66) 02-832-1000 Fax (66) 02-832-1400

Greater BangkokRangsit 02-958-5699

Rattanathibet 02-921-2400

Fashion Island 02-947-6365

Future Mart 02-689-0844

Seri Center 02-746-0377

The Mall Bangkae 02-454-9299

Ratchadaphisek 02-641-2900

Ploenchit 02-655-3400

Ramkhamhaeng 02-735-4999

Rama II 02-895-6555

Prachachuen 02-955-5888

Latphrao 02-983-7444

Chaengwatthana 02-962-6955

Ratchapruk 02-423-3222

Suvarnabhumi 02-325-1200

Petchkasem 02-444-4699

Ekamai-Ramindra 02-933-5000

CentralAyutthaya 035-23-6655

Hua Hin 032-52-6000

NorthChiangmai 053-85-1229

Phitsanulok 055-28-9009

Chiangmai- 053-44-7939

North-EastThe Mall Korat 044-28-8345

Khonkaen 043-36-5365

Udonthani 042-30-9000

Khao Yai 044-32-8799

EastPattaya 038-36-0422

Chonburi 038-78-5111

Rayong 038-80-9333

SouthPhuket 076-25-5189

Had Yai 074-46-9055

Samui 077-23-1900

Suratthani 077-48-9199

Krabi 075-81-0499

Phuket-Chalong 076-60-2399

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Documents

HMPRO: Annual Report 2009