YOUR ULTIMATE SOLUTION PARTNER
HEAD OFFICE : 1121 Moo. 3 Theparak Road, Theparak Subdistrict, Muang District, Samutprakarn Province 10270 Tel: +66 (0) 2 753 3750 Fax: +66 (0) 2 753 2750
www.wha-group.com
www.wha-group.com
Annual Report 2017 WHA Corporation Public Company Limited
WHA Corporation Public Company Limited
ANNUAL REPORT 2017 WHA Corporation Public Company Limited
Your Ultimate Solution Partner
A leader in providing a fullyintegrated services, capturing a wide range of complementary businesses i.e. Industrial Estate, Logistic, Utilities, Power and Digital Platform
CONTENTS
02 04 06 10 12 14 16 18
20 22 24 25 44 45 52 86 96
STRATEGIC PERFORMANCE OVERVIEW
Performance Overview Our Locations Message From Chairman & Group CEO Group Shareholdering Structure Logistics & Industrial Properties Industrial Development Utilities & Power Digital Platform CORPORATE INFORMATION
Organization Chart Board of Directors Audit Committee and Executive Committee Profiles of Directors, Executives and Company Secretary Vision and Mission Major Developments Nature of Business Operation Risk Factors General and Other Material Information MANAGEMENT AND CORPORATE GOVERNANCE
104 Capital Structure 108 Dividend Policy 109 Management 123 Corporate Governance 140 Corporate Social Responsibility 149 Internal Control and Risk Management 150 Connected Transactions 153 Report of Audit Committee
FINANCIAL INFORMATION
155 163 164
Management Discussion and Analysis Report of the BOD’s Responsibility to the Financial Statements Independent Auditor’s Report and Financial Statements
02
Annual Report 2017
[ Strategic Performance Overview ]
PERFORMANCE OVERVIEW BUSINESS STRUCTURE
CORE BUSINESS
WHA Corporation PCL (WHA) #1 Logistics facilitie developer offering a variety of premium facilities uniguely service our clients’ needs. Registered – THB 1,567.8 mm Paid-Up Cap – THB 1,432.6 mm
Hemaraj Land and Development PCL (HEMRAJ)
WHA Utilities and Power PCL (WHAUP)
WHA Infonite Co., Ltd. (WHA Infonite)
#1 Industrial Estate developer delivering world-class solutions to industrial customers. Registered – THB 6,000 mm Paid-Up Cap – THB 3,882 mm
#1 Industrial Utilities provider and active strategic Power investor. Registered – THB 3,825 mm Paid-Up Cap – THB 3,825 mm
Service Provider and Managed Service with Digital Platform
98.54%
PROPERTY FUNDS AND REITS
JV COLLABORATIONS
Group Asset Management Platform
15%
WHART
15% 15%
WHABT
22.95%
Logistics Partnership WHA KPN Alliance
65%
NAV per unit –THB 9.80 Paid-Up Capital–THB 18,237.7 mm/2 Total Asset–THB 27,814.5 mm/1
HREIT
/1
Central WHA Alliance
50%
NAV per unit –THB 8.69/1 Paid-Up Capital–THB 6,693.8 mm/5 Total Asset–THB 9,064.3 mm/5
WHA Daiwa Logistics Property
51%
NAV per unit –THB 10.07/1 Paid-Up Capital–THB 1,966.7 mm/4 Total Asset–THB 2,581.7 mm/1
HPF/3
70.00%
WHA Hemaraj Nghe An JSC/3
99%
NAV per unit –THB 9.81 Paid-Up Capital–THB 4,629.5 mm/6 Total Asset–THB 4,693.5 mm/2 /1
Remarks : /1 NAV per unit as of Jan 9, 2018 /2 Information as of Jan 9, 2018 /3 Held by Hemaraj
Including the 8th capital reduction Including the 1st capital increase /6 Including the 1st capital reduction /4 /5
Registered – THB 185 mm Paid-Up – THB 185 mm
94.97%
/3
BUSINESS COLLABORATIONS - POWER
Active Power Investor/3 Gheco-One
HouyHo Power
35%
12.75%
Gulf Solar
BPWHA1
Glow IPP
GJP NLL
25.01% 25.01% 5%
25.01%
WHA Gunkul
Chonburi Clean Energy
75%
33.33%
Gulf VTP
Gulf TSI-4
25.01% 25.01% Gulf WHA MT
51%
OPERATING PERFORMANCE 2017 PERFORMANCE (Unit : THB mm)
2015
2016
Total Revenue
• Total revenue decreased 36% from 2016 to THB 12,410 mm in 2017, mainly from the asset monetization to only WHART, compared to 2016, which the company monetized assets to both WHART and HREIT which compensate by higher number of land transfer from Hemaraj IE in 2017 compared with 2016, increase in share of profit from JVs and right of way charged in Hemaraj IE. • Share of profit from JVs 2017 increased by 95%, compared with 2016 as B.Grimm Power, Gulf VTP, Gulf TS1, Gulf TS2 and Gulf TS3 have commenced its COD in Nov 2016, May 2017, July 2017, Sep 2017 and Nov 2017, respectively adding our portfolio up to 478 Equity MW. Moreover, there was unrealized FX gain amount of THB 574 mm during this year. • EBITDA decreased by 12% YoY to THB 6,222 mm in 2017, resulting from the asset monetization to only WHART, compared to 2016, which the company monetized assets to both WHART and HREIT which compensate by an increase of share of profit of power business in 2017 and achieved B.Grimm Power, Gulf VTP, Gulf TS1 Gulf TS2 and Gulf TS3 COD on planned schedule of 159 equity MW. • Net profit attribute to owners of the parent increased to THB 3,266 mm in 2017 or increase at the rate of 13% YoY mainly from an increase of sale of Hemaraj IE, profitability from asset monetization to WHART, share of profit and decrease of financial cost after acquisition loan repayment, WHAUP’s loan refinancing, Hemaraj’s bond repayment and loan repayment in 2Q’17 from WHAUP’s IPO proceed.
1,963
10,446 6,222 3,266
2,898
12,064 5,313 1,954
7,040
1,038
12,410
18,319
13,102
OVERALL HIGHLIGHT
2017
Share of Profit from JVs & Associates
EBITDA
Net Income Attributable to Parent
REVENUE & GROSS PROFIT BREAKDOWN
Sale of Industrial Estates 3,343
TOTAL THB 7,408 mm
9%
Rental Property 650
9% 17% 8% 15% Power
18%
22%
Others 970
13%
Utilities 911
12%
26%
Power 1,926
1,926
Recurring vs non-Recurring = 49:51
Recurring vs non-Recurring = 60:40
Remark : Share of profit from JV’s and Associates included
Remark : Share of profit from JV’s and Associates included Gross profits are based on consolidated financial statements and thus affected by PPA adjustment
14,639
12,744
13,669
21,694
21,694
11,026
8,886 3,987
9,422
9,928
15,425 4,070
14,648 4,744
12,339 835 13,740 1,920
2015
2016
(Unit : THB mm)
2.65 2.20
Liabilities IBD Equity D/E IBD/E Net IBD/E
2.01
2.41 1.91
2015
2017
1.58 1.21 1.12
1.70
21,962
Others Intangible Assets & Goodwill Investment Properties Investment in Associates Non-Current Assets Held for Sale Cost of Real Estate Development Cash & ST Investments
21,760
52,821 41,995
• IP’s stood at THB 9,422 mm in 2017 due to reclassification to non-current assets held for sale and sold to REIT. • Intangible assets & goodwill of THB 21,694 mm resulted from the PPA after the acquisition. • Hemaraj contributed Cost of Real Estate Developments after PPA of THB 13,740 mm and Investment in Associates after PPA of THB 12,339 mm to the consolidated balance sheet in 2017.
CAPITAL STRUCTURE
21,656
10,300
57,407
(Unit : THB mm)
73,619
ASSETS
74,784
79,066
FINANCIAL POSITION
47,627
Others 970
Sale of Industrial Estates 1,660
Utilities 2,075
TOTAL THB 12,410 mm
Sale of IP’s 1,290
(Unit : THB mm)
24%
27%
Rental Property 1,148
2017 GROSS PROFIT BREAKDOWN
Sale of IP’s 2,947
(Unit : THB mm)
2016
45,086 34,398 28,533
2017 REVENUE BREAKDOWN
2017
FINANCIAL RATIO RETURN ON INVESTMENT (Unit : %)
NET PROFIT MARGIN 16.9% 10.6%
ROE ROA ROIC
4.6%
(Unit : %) 14.46%
14.00%
8.41%
8.59%
4.12% 5.17%
2015
2016
2017
29.32%
NET PROFIT MARGIN IMPROVEMENT
• Albeit the drop in total revenue in 2017, the net profit was higher thanks to the higher profitability in both industrial land sale and REIT monetization as well as significantly lower interest expenses. • As a result, the net profit margin improved significantly from 15.00% in 2016 to 29.32% in 2017. This is also supported from more balanced revenue profile between the recurring and non recurring income in 2017.
14.91%
2015
15.00%
2016
2017
WHA Corporation Public Company Limited
03
11
5 11 9
20 10 19
12
17
21
10
1
14
4 9
1
2
3 2 1 3 1 4 6 5 2 2 8 7 3 12 6
EASTERN ECONOMIC CORRIDOR (EEC) Rayong, Chonburi & Chachoengsao
SRIRACHA
GU LF OF T HAILAND
13
1 2 5 3 4 1 2 3 4 3 7 8
9 66 8
U-TAPAO RAYONG - PATTAYA INTERNATIONAL AIRPORT (U-TAPAO AEROTROPOLIS)
SATTAHIP PORT COMMERCIAL PORT ROYAL THAI NAVY
7
WHA 40+ STRATEGIC LOCATIONS IN THAILAND WHA is a key player in the development of the Eastern Economic Corridor (EEC). WAREHOUSE FARM
BUILT-TO-SUIT FACTORIES AND WAREHOUSES
1. WHA Mega Logistics Center Bangna-Trad km.18 2. WHA Mega Logistics Center Bangna-Trad km.19 3. WHA Mega Logistics Center Bangna-Trad km.23 4. WHA KPN Mega Logistics Center Bangna-Trad km.23 5. WHA Mega Logistics Center Chonlaharnpichit km.3 6. WHA Mega Logistics Center Chonlaharnpichit km.3 Phase 2 7. WHA Mega Logistics Center Chonlaharnpichit km.4 8. WHA Mega Logistics Center Chonlaharnpichit km.5 9. WHA Mega Logistics Center Ladkrabang 10. WHA Mega Logistics Center Wangnoi 61 11. WHA Mega Logistics Center Saraburi 12. WHA Mega Logistics Center Panthong, Chonburi 13. WHA Mega Logistics Center Laemchabang 14. WHA Mega Logistics Center Rama II, km.35 15. WHA Mega Logistics Center Lampoon 16. WHA Mega Logistics Center Khon Kaen 17. WHA Mega Logistics Center Kabinburi 18. WHA Mega Logistics Center Suratthani 19. WHA Mega Logistics Centers Wangnoi 62 20. WHA CENTRAL Mega Logistics Center Wangnoi 63 21. WHA Mega Logistics Center Lum Luk Ka
1. Consumer Goods Distribution Center 2. Healthcare Air-Con Distribution Center 3. Hazardous Goods Distribution Center 4. Ladkrabang Logistics Center (2 Phases) 5. Diaper Warehouse 6. Consumer Goods Distribution Center 7. Aerospace Manufacturing 8. Motorbike Manufacturing 9. Aerospace Factory 10. Hemaraj Ready Bulit Factory Park 1 @Hi-tech Kabin 11. Diaper Factory 12. Consumer Goods Distribution Center
INDUSTRIAL ESTATES/LANDS 1. Hemaraj Chonburi Industrial Estate (HCIE) 2. Hemaraj Chonburi Industrial Estate 2 (HCIE2) 3. Eastern Seaboard Industrial Estate (Rayong) (ESIE) 4. Hemaraj Eastern Seaboard Industrial Estate (HESIE) 5. Hemaraj Eastern Seaboard Industrial Estate 2 (HESIE 2) 6. Hemaraj Eastern Seaboard Industrial Estate 4 (HESIE 4) 7. Hemaraj Eastern Industrial Estate (Map Ta Phut) (HEIE) 8. Hemaraj Rayong Industrial Land (HRIL) 9. Hemaraj Saraburi Industrial Land (HSIL)
HEMARAJ LOGISTICS PARKS 1. 2. 3. 4.
Hemaraj Logistics Park 1 (HLP 1) Hemaraj Logistics Park 2 (HLP 2) Hemaraj Logistics Park 3 (HLP 3) Hemaraj Logistics Park 4 (HLP 4)
DIGITAL PLATFORM 1. WHA Data Center Vibhavadi-Rangsit 2. WHA Data Center Bangna-Trad 3. JV Data Centre Bangna-Trad
BUSINESS COMPLEX 1. SJ Infonite / Business Complex 2. Bangna-Trad Business Complex
06
Annual Report 2017
[ Strategic Performance Overview ]
MESSAGE FROM CHAIRMAN & GROUP CEO “I believe that technological advancements have come to the point where the people have to be well prepared for potential impacts, either in their personal lives or business operations. I am confident that the successful businesses in the future will combine the original business platforms, which is infrastructure base, with new technology to maximize business operations�
Miss Jareeporn Jarukornsakul
Chairman and Group Chief Executive Officer
The year 2017 is considered to be a successful year for the Company in terms of operating results with our net profit reaching record high since its establishment. The Company records 3,266 million Baht net profit, an increase of 13% compared to the previous year. Our record high net profit is mainly attributable to a successful collaboration between our four business hubs: Logistics Hub, Industrial Development Hub, Utilities & Power Hub and Digital Platform Hub. We have also gradually expanded our operations to cover new businesses related to our core ones, enabling us to achieve sustainable growth and provide comprehensive services to our customers in accordance with our business slogan, “Your Ultimate Solution Partner.” Our core businesses are essential drivers of the national economic growth, as well as the manufacturing industry, Foreign Direct Investment, and the reduction of logistics cost from manufacturers to consumers. Thus, the Company is ready to respond to and support the Thai Government’s Eastern Economic Corridor (EEC) policy as well as infrastructure development of the country since the policy will contribute greatly to the growth of the Company. In addition, all of the Company’s four business hubs are commensurate with the goals and development of EEC policy, which begin with encouraging foreign investors to use Thailand as a manufacturing base, production center, and transportation hub to move goods from Southeast Asia to other regions of the world, especially for borderless connectivity between four countries in Mekong Sub-region, namely, Cambodia, Laos PDR, Myanmar, and Vietnam. The Company is ready to upgrade its industrial estate into the Smart IE. We place a high priority on technological development because we believe that technology will contribute to ultimate performance, such as applying Internet of Thing (IoT) to the provision of basic services to an industrial estate. With regard to our warehouses, factories, and distribution centers for rent, we have carefully studied the implementation of the automation systems to maximize our customers’ operational effectiveness. Furthermore, the platforms that the Company provides services to our customers in Thailand can be used to expand businesses overseas as per requirements of customers in each country. For example, in Vietnam where importance is placed on manufacturing, the Company has invested in industrial estates and provided utilities and power services. As for Indonesia, which puts importance on logistics cost reduction, the Company has invested in distribution center for rent.
Additionally, the Company has received approval of the Eastern Economic Corridor Policy Committee, enabling all of the eight industrial estates already in operation in EEC area to receive better tax privileges than those provided by BOI. Such privileges also cover companies investing in the industrial estates and foreign specialists and personnel working in Thailand in 10 targeted industries, such as aviation and logistics, industrial robotics, and future automotive industry. Moreover, I believe that technological advancements have come to the point where the people have to be well prepared for potential impacts, either in their personal lives or business operations. I am confident that the successful businesses in the future will combine the original business platforms, which is infrastructure base, with new technology to maximize business operations; for example, the use of energy storage system to store solar energy from rooftop PV systems for customers to reduce the cost of solar rooftop, or utilization of blockchain technology to create an ecosystem for customers. In this regards, the Company’s business hubs, namely, industrial development, logistics, utilities & power, which tend to becoming more decentralized, will serve as intermediaries, and the digital platforms developed by the Company will be used to support such technology. Furthermore, the Company is ready to modify and improve its major infrastructures to meet such change and contribute to a sustainable growth. Finally, on behalf of the Chairman, the Group CEO, and the Board of Directors, I would like to thank you all for your continued support and contribution to our success. I would like to express my gratitude to all shareholders for your trust, all customers for allowing us to serve you, financial institutions for supporting our growth, our business partners, Board of Directors, management team and all employees for your continued trust, support, and involvement in the Company’s growth and success for the past 15 years since its establishment. For the year 2018, we are confident that the Company will seek to move forward and grow sustainably, dedicate and work to create the best value for the society, our shareholders, our customers, and our stakeholders.
WHA Corporation Public Company Limited
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08
Annual Report 2017
[ Strategic Performance Overview ]
GROUP SHAREHOLDING STRUCTURE AS OF 31 DECEMBER 2017
WHA 99.99%
99.99%
99.99%
ALL
WAA
64.97%
WHAVH
100%
49.99%
WHAHK 99.96%
WHA-KPN CENTRAL-WHA
50.99%
WHAID
WHA-Daiwa
98.54%
HRD 100%
99.99%
H-INTER (BVI)
100%
HRM
99.99%
WHAHRDI
H-INTER
22.95%
HPF
15% 100% 1.14%
H-INTER (SG) 100%
100%
WHA-MSV
WHA-H (SG)
HREIT
68.86%
WHAUP 99.99%
WHAWT
99.99%
WUPI
99.99%
100%
WUPS1
WHAEG
99%
100%
WUPS2
WHAH-C4 99.99%
25.01%
BPWHA1
WHAET
Partner with B.Grimm
33.33%
ESCE
35%
Gheco-I
99.99%
CCE
99.99%
RCE
5%
GIPP 99.99%
GHW
Partner with Glow & Suez
REMARK : (1) In the process of liquidation.
Another 40% shareholding stake of ESIE is held by Siam Food Products PCL.
(2)
51%
HHTC 25%
HHPC Partner with Glow
100%
99.99%
WHA (Int’l)
(1)
94.97%
WHARM
15% 15%
60% 99.99% 99.99%
70% 99.99%
99.99% Partner with Gulf
99.99% 99.99% 99.99%
Genesis
WHABT
HESIE
SME 25% 99.99%
HSIL
99.99% 99.99% 74.99%
EPS HRIL
99.99%
EPM
29.99%
RY2012
THE PARK
99.99%
HESIE-4
51.00%
WHA NGD2 WHA NGD4
Gulf Solar 99.99%
WHART
HCME
Gulf WHA MT 99.99%
33.33%
ESIE(2)
EIE
99.99%
WHA Infonite
25.01%
Gulf Solar BV Gulf Solar TS1
25.01% 25.01% 25.01% 25.01% 25.01% 25.01%
Partner with Gulf Solar
WHA Gunkul1
Gulf TS2
WHA Gunkul3
Gulf TS3
74.99% 74.99% 74.99% 74.99%
WHA Gunkul6 WHA Gunkul17
Partner with Gunkul
Gulf TS4 Gulf VTP Gulf NLL2 Partner with GMP
Gulf Solar TS2 Gulf Solar KKS
Gulf TS1
25.01%
Gulf NLL Partner with GJP
WHA Corporation Public Company Limited
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Annual Report 2017
[ Strategic Performance Overview ]
GROUP SHAREHOLDING STRUCTURE AS OF 31 DECEMBER 2017 WHA
WHA Corporation Public Co., Ltd.
WHAVH WAA ALL WHAHK WHAID WHA-KPN CENTRAL-WHA WHA-Daiwa WHA (Int’l) WHARM WHART WHABT WHA Infonite Genesis
WHA Venture Holding Co., Ltd. Warehouse Asia Alliance Co., Ltd. WHA Alliance Co., Ltd. WHA Corporation (Hong Kong) Co., Ltd. PT. WHA International Indonesia WHA KPN ALLIANCE Co., Ltd. CENTRAL WHA ALLIANCE Co., Ltd. WHA Daiwa Logistics Property Co., Ltd. WHA Corporation (International) Co., Ltd. (Mauritius) WHA Real Estate Management Co., Ltd. WHA Premium Growth Freehold and Leasehold REIT WHA Business Complex Freehold and Leasehold REIT WHA Infonite Co., Ltd. Genesis Data Center Co., Ltd.
HRD
Hemaraj Land and Development Public Co., Ltd.
H-INTER (BVI) H-INTER WHAHRDI H-INTER (SG) WHA-H (SG) WHA-MSV WHAH-C4 (Nghe An) HRM HPF HREIT ESIE HESIE EIE HSIL HRIL RY2012 HESIE-4 HCME SME EPS EPM THE PARK
H-International (BVI) Co., Ltd. Hemaraj International Ltd. WHA Hemaraj International Co., Ltd. (Holding Co.) H-International (SG) Pte. Ltd. WHA Hemaraj Land and Development (SG) Pte. Ltd. (Holding Co.) WHA Hemaraj Management Services Vietnam Co., Ltd. WHA Hemaraj Cienco 4 Nghe An Joint Stock Company Hemaraj REIT Management Co., Ltd. Hemaraj Industrial Property and Leasehold Fund Hemaraj Leasehold Real Estate Investment Trust Eastern Seaboard Industrial Estate (Rayong) Co., Ltd. Hemaraj Eastern Seaboard Industrial Estate Co., Ltd. Eastern Industrial Estate Co., Ltd. Hemaraj Saraburi Industrial Land Co., Ltd. Hemaraj Rayong Industrial Land Co., Ltd. Rayong 2012 Co., Ltd Hemaraj Eastern Seaboard Industrial Estate 4 Co., Ltd. H-Construction Management and Engineering Co., Ltd. SME Factory Co., Ltd. Eastern Pipeline Services Co., Ltd. Eastern Seaboard Property and Marina Services Co., Ltd. The Park Residence Co., Ltd.
WHAUP
WHA Utilities and Power Public Co., Ltd.
WHAWT WHAEG WUPI WUPS1 WUPS2 WHAET BPWHA1 ESCE CCE RCE GHW Gheco-I GIPP HHT HHP
WHA Water Co., Ltd. WHA Energy Co., Ltd. WHAUP International WHAUP (SG) 1 Pte. WHAUP (SG2) Pte. WHA Energy 2 Co., Ltd. (Holding Co.) B.Grimm Power (WHA) 1 Limited Eastern Seaboard Clean Energy Co., Ltd. (Holding Co.) Chonburi Clean Energy Co., Ltd. Rayong Clean Energy Co., Ltd. Glow Hemaraj Wind Co., Ltd. Gheco-One Co., Ltd. Glow IPP Co., Ltd. Houay Ho Thai Co., Ltd. (Holding Co.) Houay Ho Power Co., Ltd. (Lao PDR)
Gulf WHA MT
Gulf WHA MT Natural Gas Distribution Co., Ltd.
WHA NGD2 WHA NGD4 Gulf Solar Gulf Solar BV Gulf Solar TS1 Gulf Solar TS2 Gulf Solar KKS Gulf TS1 Gulf TS2 Gulf TS3 Gulf TS4 Gulf VTP GNLL2 GJP NLL
WHA Eastern Seaboard NGD2 Co., Ltd. WHA Eastern Seaboard NGD4 Co., Ltd. Gulf Solar Co., Ltd. Gulf Solar BV Co., Ltd. Gulf Solar TS1 Co., Ltd. Gulf Solar TS2 Co., Ltd. Gulf Solar KKS Co., Ltd. Gulf TS1 Co., Ltd. Gulf TS2 Co., Ltd. Gulf TS3 Co., Ltd. Gulf TS4 Co., Ltd. Gulf VTP Co., Ltd. Gulf NLL2 Co., Ltd. Gulf JP NLL Co., Ltd.
WHA Gunkul 1
WHA Gunkul Green Solar Roof 1 Co., Ltd.
WHA Gunkul 3 WHA Gunkul 6 WHA Gunkul 17
WHA Gunkul Green Solar Roof 3 Co., Ltd. WHA Gunkul Green Solar Roof 6 Co., Ltd. WHA Gunkul Green Solar Roof 17 Co., Ltd.
WHA Corporation Public Company Limited
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#1 Logistics facilitie developer offering
a variety of premium facilities uniguely service our clients’ needs
2.1
MILLION SQM UNDER OWNERSHIP & MANAGEMENT
SECURED PRE-LEASED AREAS
161,588 SQM
SUCCESSFULLY CONVERTED WHAPF INTO
WHART
LOGISTICS & INDUSTRIAL
PROPERTIES The Company is committed to be a leading company as a warehouse project developer, distribution center, and high quality factory located in a strategic location around Bangkok, Eastern Economic Corridor, and other provinces. The Company is able to fully meet the needs of its customers due to its project location, project design with international standards and quality of construction. This could reduce the cost of customer operations and increase long-term competitive advantages. Real estate business development and management could be described in accordance with the types of products and the services provided.
#1 Industrial Estate developer delivering
world-class solutions to industrial customers.
75%
MARKET SHARE 1,000 RAI LAND SALES
HESIE4
EEC
SPECIAL
PROMOTION ZONE
IRC APPROVED
3,100
FOR NGHE AN PROJECT (VIETNAM)
RAI
INDUSTRIAL
DEVELOPMENT Industrial Development Hub is operated through the Company’s subsidiary, with Hemaraj Group responsible for developing Industrial estates and/or zones and selling of and to enterprises who demand to make their investment in Industrial estates/zones and Industrial Promotional zones. Enterprises can gain special privileges provided by Industrial Estate Authority of Thailand and/or Thailand Board of Investment. Another crucial role of Hemaraj Group is to act as a center for providing utilities and facilities for clients inside the Industrial Estate e.g. electricity, water supply, wastewater treatment, waste disposal, telephone, internet and coordinating with the authority on environmental control.
#1 Industrial Utilities provider
and active strategic Power investor.
SUCCESSFULLY
LISTED
20
BILLIONS THB MARKET CAPITAL
100
MILLION M3 OF UTILITIES AND SALES MANAGEMENT VOLUME
POWER CAPACITY INCREASED TO
478 EQUITY MW
UTILITIES
& POWER Utilities & Power Hub is operated through the Company’s subsidiary, WHAUP Group, the provider of utilities in the Hemaraj Group’s industrial estates/ zones i.e. raw water, industrial water, and wastewater treatment. WHAUP Group is also into power business, through joint ventures with both domestic and foreign power plants, who have expertise in the power business field. Our power plants include both Conventional Fuel and Alternative Fuel power plants.
FTTx IN
5
INDUSTRIAL ESTATE COMMENCED OPERATION
3
DATA CENTERS COMMENCED OPERATION (461 RACKS)
START PROVIDING
MANAGED SERVICES
Service Provider and Managed Service with Digital Platform
DIGITAL
PLATFORM In 2017 WHA Group offered Digital Platform services through its subsidiary, WHA Infonite Company Limited. WHA Group offers the following Digital Services in order to provide our customers with a comprehensive IT solution: Data Center: Co-location, Fiber Optic Internet FTTx Service, Rental/Leasing Equipment & Software Service and System Integration Service.
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Annual Report 2017
[ Corporate Information ]
ORGANIZATION CHART AS OF 31 DECEMBER 2017
BOARD OF DIRECTORS
NOMINATION AND REMUNERATION COMMITTEE
CORPORATE GOVERNANCE COMMITTEE RISK MANAGEMENT COMMITTEE
EXECUTIVE COMMITTEE
CHIEF EXECUTIVE OFFICER
CHIEF FINANCIAL OFFICER
CHIEF STRATEGIC OFFICER
AUDIT COMMITTEE
INTERNAL AUDIT
CHIEF OPERATING OFFICER
CHIEF LEGAL OFFICER
WHA Corporation Public Company Limited
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Annual Report 2017
[ Corporate Information ]
BOARD OF DIRECTORS AS OF 31 DECEMBER 2017
1 2 3 4 5 6
1. Mr. Somyos Anantaprayoon /1
Chairman of the Board of Directors
2. Ms. Jareeporn Jarukornsakul /2
Vice Chairman of the Board of Directors
3. Mr. David Richard Nardone
Vice Chairman of the Board of Directors
4. Mr. Vivat Jiratikarnsakul Director 5. Mr. Jakrit Chaisanit Director 6. Mr. Krailuck Asawachatroj Director
7 8 9 10 11 12 13
7. Mr. Arttavit Chalermsaphayakorn Director 8. Mr. Narong Kritchanchai Director 9. Mr. Somsak Boonchoyruengchai Director 10. Mr. Apichai Boontherawara
Independent Director
11. Mr. Somsak Pratomsrimek
Independent Director
12. Mrs. Kritsana Sukboonyasatit
Independent Director
13. Mr. Chanvit Amatamatucharti
Independent Director
On 9 Feb 2018 vacate office upon death. The appointment of the chairman of the Board of Director and the Chairman of the Executive Committee in place in accordance BOD’s Resolution no.1/2018 on 9 Feb 2018.
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WHA Corporation Public Company Limited
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Annual Report 2017
[ Corporate Information ]
AUDIT COMMITTEE AND EXECUTIVE COMMITTEE AUDIT COMMITTEE
Mr. Apichai Boontherawara Chairman of the Audit Committee
Mr. Somsak Pratomsrimek
Mrs. Kritsana Sukboonyasatit
Ms. Jareeporn Jarukornsakul /2
Mr. David Richard Nardone
Audit Committee Member
Audit Committee Member
EXECUTIVE COMMITTEE
Mr. Somyos Anantaprayoon /1 Chairman of Executive Committee
Mr. Vivat Jiratikarnsakul
Vice Chairman of Executive Committee, Chief Executive Officer
Executive Committee Member
Executive Committee Member
Executive Committee Member, Chief Operating Officer
Mr. Jakrit Chaisanit
Mr. Arttavit Chalermsaphayakorn
Mr. Krailuck Asawachatroj
Mr. Narong Kritchanchai
Mr. Somsak Boonchoyruengchai
Executive Committee Member, Chief Strategic Officer
Executive Committee Member, Chief Legal Officer
Executive Committee Member, Chief Financial Officer
Executive Committee Member, Vice President
On 9 Feb 2018 vacate office upon death. The appointment of the chairman of the Board of Director and the Chairman of the Executive Committee in place in accordance BOD’s Resolution no.1/2018 on 9 Feb 2018.
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[ Corporate Information ]
PROFILES OF DIRECTORS, EXECUTIVES AND COMPANY SECRETARY AS OF 31 DECEMBER 2017
1. Dr. Somyos Anantaprayoon /1 • Chairman of the Board of Directors (The director having authority to sign for binding the company as set forth in the affiliates) Date of appointment: April 23, 2012 • Chairman of Executive Committee Date of appointment: May 25, 2012 Age (Year) 58 Share holding’s proportion(%) 22.12 Family relationship between the director None Education • Doctor of Medicine, Mahidol University • Specialist doctor for Obstetrics and Gynecology, Rajavithi Hospital • Master Degree of Business Administration for executives,Faculty of Commerce and Accountancy, Thammasat University Certifications • Director Certification Program, IOD, 210/2015 • Director Director Accreditation Program, 94/2012 • Diploma, National Defence College, The Joint State – Private Sector Course Class 58, National Defence college of Thailand, 2015-2016 • Top Executive Program for Industrial Development and Investment (IBID 1), Institute of Business and Industrial Development, 2014 • Executive Program Capital Market Academy (CMA#15), 2012 Work experience in the past 5 years Period Position Company Type of Business 2012 - Present Chairman of the WHA Corporation PCL. Property developer on warehouses Board of Directors and factories 2012 - Present Chairman of WHA Corporation PCL. Property developer on warehouses Executive Committee and factories 2012 - 2015 Chief Executive WHA Corporation PCL. Property developer on warehouses Officer and factories Subsidairy Companies 2016 - Present Director WHA Hemaraj Land and Development Investment in associate/subsidaries (SG) Pte. Ltd. 2016 - Present Director WHA Hemaraj International Co., Ltd Investment in associate/subsidaries 2015 - Present Chairman of the WHA Utilities & Power PCL Utilities & Power Board of Directors 2015 - Present Chairman of the Hemaraj Land and Development PCL. Property developer Board of Directors 2015 - Present Chairman of the Hemaraj REIT Management Co., Ltd Trust Manager Board of Directors 2015 - Present Director WHA Infonite Co., Ltd Digital services 2015 - Present Director WHA Ventures Holding Co., Ltd. Holding company 2015 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate 4 Co., Ltd WHA Corporation Public Company Limited
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Period Position 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2014 - Present Director 2014 - Present Director 2006 - Present Director 2003 - Present Director Joint Venture Companies 2016 - Present Director 2016 - Present Director 2013 - Present Director WHAUP Affiliate Companies 2016 - Present Director 2017- Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director
Company Type of Business Eastern Seaboard Property and Marina Property for investment and marina Services Co., Ltd services Rayong 2012 Co., Ltd Property developer H-International (SG) Pte. Ltd. Investment in associate/subsidaries The Park Residence Co., Ltd Real Estate Development and Service Management H-Construction Management and Design and Construction Engineering Co., Ltd Supervision Service Hemaraj International Ltd. Holding company H-International (BVI) Co., Ltd. Holding company Eastern Pipeline Services Co., Ltd Pipe Pack Rental Hemaraj Rayong Industrial Land Co., Ltd Property developer Hemaraj Saraburi Industrial Land Co., Ltd Property developer Hemaraj Eastern Seaboard Industrial Property developer Estate Co., Ltd Eastern Seaboard Industrial Estate Property developer (Rayong) Co., Ltd Eastern Industrial Estate Co., Ltd Property developer WHA Corporation (Hong Kong) Holding company Company Limited WHA Corporation (International) Holding company Company Limited Warehouse Asia Alliance Co., Ltd. Property developer on warehouses and factories WHA Alliance Co., Ltd. Property developer on warehouses and factories WHA Daiwa Logistics Property Co., Ltd Central WHA Alliance Co., Ltd WHA KPN Alliance Co., Ltd.
Property developer on warehouses and factories Property developer on warehouses and factories Property developer on warehouses and factories
WHA Eastern Seaboard NGD 2 Co., Ltd WHA Eastern Seaboard NGD 4 Co., Ltd Glow Hemaraj Wind Co., Ltd Houay Ho Thai Co., Ltd GHECO - One Co., Ltd Gulf JP NLL Co., Ltd Gulf Solar Co., Ltd B.GRIMM (WHA) Co., Ltd
Develops natural gas distribution pipeline and retail trade Develops natural gas distribution pipeline and retail trade Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power
Period Position 2016 - Present Director 2016 - Present Director 2016 - Present Director 2016 - Present Director 2016 - Present Director 2016 - Present Director 2016 - Present Director 2016 - Present Director 2016 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director Other Companies 2013 - Present Director 2013 - Present Director 1993 - Present Director /1
Company Gulf VTP Co., Ltd Gulf TS 1 Co., Ltd Gulf TS 2 Co., Ltd Gulf TS 3 Co., Ltd Gulf Solar TS 1 Co., Ltd Gulf Solar TS 2 Co., Ltd Chonburi Clean Energy Co., Ltd Rayong Clean Energy Co., Ltd Eastern Seaboard Clean Energy Co., Ltd WHA GUNKUL Green Solar Roof 1 Co., Ltd. WHA GUNKUL Green Solar Roof 3 Co., Ltd. WHA GUNKUL Green Solar Roof 6 Co., Ltd. WHA GUNKUL Green Solar Roof 17 Co., Ltd. WHA Water Co., Ltd WHA Energy 2 Co., Ltd WHA Energy Co., Ltd WHA GUNKUL Green Solar Roof 2 Co., Ltd. WHA GUNKUL Green Solar Roof 4 Co., Ltd. WHA GUNKUL Green Solar Roof 5 Co., Ltd. WHA GUNKUL Green Solar Roof 8 Co., Ltd. WHA GUNKUL Green Solar Roof 9 Co., Ltd. WHA GUNKUL Green Solar Roof 10 Co., Ltd. WHA GUNKUL Green Solar Roof 16 Co., Ltd.
Type of Business Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Investment in associate/subsidaries Investment in associate/subsidaries Investment in associate/subsidaries Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Water Resources Development and Management Investment in associate/subsidaries Investment in associate/subsidaries Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy
Asia Wealth Securities Co., Ltd. Asia Wealth Holding Co., Ltd. S & J Holding Co., Ltd.
Securities company Securities trading Distribution of plastic products
Vacate office upon death on 9 February 2018.
WHA Corporation Public Company Limited
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2. Ms. Jareeporn Jarukornsakul /2 • Vice Chairman of the Board of Directors (The director having authority to sign for binding the company as set forth in the affiliates) Date of appointment: April 23, 2012 • Vice Chairman of Executive Committee Date of appointment: May 25, 2012 • Chairman of Risk Management Committee Date of appointment: May 14, 2015 • Chairman of the Nomination and Remuneration Commitee Date of appointment: October 29, 2015 • Chief Executive Officer Date of appointment: October 29, 2015 Age (Year) 51 Share holding’s proportion(%) 22.94 Family relationship between the director None Education • Bachelor Degree in Faculty of Public Health, Mahidol University • Master of Business Administration, Bangkok University • The Honorary PH.D.Degree, Logistics and Supply Chain Management, Christian University of Thailand Certifications • Director Certification Program, IOD, 210/2015 • Director Director Accreditation Program, 94/2012 • Corporate Governance for Capital Market (CGI 17), IOD, 2016 • Senior Executives on Justice Administration Program National Justice Academy, Office of Judiciary (BYS 20), 2015 • Executive Program Capital Market Academy (CMA 18), 2014 Work experience in the past 5 years Period Position Company Type of Business 2015 - Present Chief Executive WHA Corporation PCL. Property developer on warehouses Officer and factories 2012 - Present Vice Chairman of WHA Corporation PCL. Property developer on warehouses the Board of Directors and factories 2012 - 2015 Vice Chairman of WHA Corporation PCL. Property developer on warehouses Executive Committee and factories Subsidairy Companies 2016 - Present Director WHA Hemaraj Land and Development Investment in associate/subsidaries (SG) Pte. Ltd. 2016 - Present Director WHA Hemaraj International Co., Ltd Investment in associate/subsidaries 2015 - Present Director PT WHA International Indonesia Property developer 2015 - Present Vice Chairman of the WHA Utilities & Power PCL Utilities & Power Board of Directors 2015 - Present Vice Chairman of the Hemaraj Land and Development PCL.* Property developer Board of Directors 2015 - Present Director WHA Infonite Holding Co., Ltd Digital services 2015 - Present Director WHA Ventures Holding Co., Ltd. Holding company 2015 - Present Director Hemaraj Rayong Industrial Land Co., Ltd Property developer 2015 - Present Director Hemaraj Saraburi Industrial Land Co., Ltd Property developer 2015 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate Co., Ltd 2015 - Present Director Eastern Seaboard Industrial Estate Property developer (Rayong) Co., Ltd 2015 - Present Director Eastern Industrial Estate Co., Ltd Property developer 2015 - Present Director Eastern Pipeline Services Co., Ltd Pipe Pack Rental 2015 - Present Director H-International (BVI) Co., Ltd. Investment in associate/subsidaries
Period Position 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2014 - Present Director 2014 - Present Director 2006 - Present Director 2003 - Present Director Joint Venture Companies 2016 - Present Director 2016 - Present Director 2016 - Present Director 2013 - Present Director WHAUP Affiliate Companies 2015 - Present Director 2016 - Present Director 2016 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - Present Director 2015 - 2016 Director
Company Hemaraj International Ltd. H-Construction Management and Engineering Co., Ltd The Park Residence Co., Ltd H-International (SG) Pte. Ltd. Rayong 2012 Co., Ltd Hemaraj Eastern Seaboard Industrial Estate 4 Co., Ltd Eastern Seaboard Property and Marina Services Co., Ltd Hemaraj REIT Management Co., Ltd WHA Corporation (Hong Kong) Company Limited WHA Corporation (International) Company Limited Warehouse Asia Alliance Co., Ltd. WHA Alliance Co., Ltd.
Type of Business Investment in associate/subsidaries Design and Construction Supervision Service Real Estate Development and Service Management Investment in associate/subsidaries Property developer Property developer
Property developer on warehouses and factories Property developer on warehouses and factories
Genesis Data Co., Ltd WHA Daiwa Logistics Property Co., Ltd Central WHA Alliance Co., Ltd WHA KPN Alliance Co., Ltd.
Property developer on warehouses and factories Property developer on warehouses and factories Property developer on warehouses and factories
Gulf VTP Co., Ltd Gulf Solar TS 2 Co., Ltd Gulf Solar TS 4 Co., Ltd Bowin Clean Energy Co., Ltd Gulf Solar BV Co., Ltd Gulf Solar KKS Co., Ltd Houay Ho Thai Co., Ltd WHA Water Co., Ltd WHA Energy 2 Co., Ltd WHA Energy Co., Ltd Glow Hemaraj Wind Co., Ltd
Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Generator and distributor of electronic power Water Resources Development and Management Investment in associate/subsidaries Investment in associate/subsidaries Generator and distributor of electronic power
Property for investment and marina services Trust Manager Holding company Holding company
WHA Corporation Public Company Limited
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Period Position 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director 2013 - Present Director Other Companies 2013 - Present Director 2013 - Present Director 1993 - Present Director /2
Company WHA GUNKUL Green Solar Roof 1 Co., Ltd. WHA GUNKUL Green Solar Roof 2 Co., Ltd. WHA GUNKUL Green Solar Roof 3 Co., Ltd. WHA GUNKUL Green Solar Roof 4 Co., Ltd. WHA GUNKUL Green Solar Roof 5 Co., Ltd. WHA GUNKUL Green Solar Roof 6 Co., Ltd. WHA GUNKUL Green Solar Roof 8 Co., Ltd. WHA GUNKUL Green Solar Roof 9 Co., Ltd. WHA GUNKUL Green Solar Roof 10 Co., Ltd. WHA GUNKUL Green Solar Roof 16 Co., Ltd. WHA GUNKUL Green Solar Roof 17 Co., Ltd.
Type of Business Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy Generator and distributor of electronic power from solar energy
Asia Wealth Securities Co., Ltd. Asia Wealth Holding Co., Ltd. S & J Holding Co., Ltd.
Securities company Securities trading Distribution of plastic products
The appointment of the chairman of the Board of Director and the Chairman of the Executive Committee in place in accordance BOD’s Resolution no.1/2018 on 9 Feb 2018
3. Mr. David Richard Nardone • Vice Chairman of the Board of Directors Date of appointment: April 25, 2016 • Executive Committee Date of appointment: May 12, 2016 Age (Year) 62 Share holding’s proportion(%) Family relationship between the director None Education • Master of Business Administration, Northeastern University, Boston, USA Certifications • Director Certification Program, IOD 57/2005 Work experience in the past 5 years Period Position Company Type of Business 2016 - Present Vice Chairman of the WHA Corporation PCL. Property developer on warehouses Board of Directors and factories 2016 - Present Executive Committee WHA Corporation PCL. Property developer on warehouses and factories Subsidairy Companies 2016 - Present Director WHA Hemaraj Land and Development Investment in associate/subsidaries (SG) Pte. Ltd. 2016 - Present Director WHA Hemaraj International Co., Ltd Investment in associate/subsidaries 2015 - Present Director WHA Utilities & Power PCL. Utilities & Power 2015 - Present Director H-International (SG) Pte. Ltd. Investment in associate/subsidaries 2015 - Present Director Hemaraj International Ltd. Investment in associate/subsidaries 2015 - Present Director H-International (BVI) Co., Ltd. Investment in associate/subsidaries 2014 - Present Director Hemaraj Rayong Industrial Land Co., Ltd. Property developer 2011 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate 4 Co., Ltd. 2005 - Present Director Eastern Seaboard Property and Property for investment and marina Marina Services Co., Ltd . services 2005 - Present Director Rayong 2012 Co., Ltd. Property developer 2003 - Present Director The Park Residence Co., Ltd. Real Estate Development and Service Management 2001 - Present Director H-Construction Management and Design and Construction Engineering Co., Ltd. Supervision Service 1997 - Present Director Hemaraj Saraburi Industrial Land Co., Ltd. Property developer 1996 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate Co., Ltd. 1995 - Present Director Eastern Pipeline Services Co., Ltd. Pipe Pack Rental 1994 - Present Director Hemaraj Land and Development PCL. Property developer 1994 - Present Director Eastern Seaboard Industrial Estate Property developer (Rayong) Co., Ltd. 1994 - Present Director Eastern Industrial Estate (Rayong) Co., Ltd. Property developer
WHA Corporation Public Company Limited
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WHAUP Affiliate Companies Period Position 2013 - Present Director 2015 - Present Director 2011 - Present Director 2005 - Present Director 2009 - 2016 Director
Company GHECO - One Co., Ltd WHA Energy 2 Co., Ltd WHA Energy Co., Ltd WHA Water Co., Ltd Houay Ho Power Co., Ltd
Type of Business Generator and distributor of electronic power Utilities & Power Utilities & Power Water Resources Development and Management Generator and distributor of electronic power
4. Mr. Vivat Jiratikarnsakul • Director Date of appointment: May 25, 2016 • Executive Committee Date of appointment: May 12, 2016 Age (Year) 62 Share holding’s proportion(%) Family relationship between the director None Education • Bachelor Degree of Engineering Program in Sanitary Engineering, Chulalongkorn Universiy Certifications • Director Accreditation Program, IOD, 2/2003 • Director Certification Program, IOD, 38/2003 • Anti-Corruption for Executive Program (ACEP 2/2014), IOD • IOD Luncheon briefing 1/2013 : Thailand Economic Outlook 2013 Work experience in the past 5 years Period Position Company Type of Business 2016 - Present Director WHA Corporation PCL. Property developer on warehouses and factories 2016 - Present Executive Committee WHA Corporation PCL. Property developer on warehouses and factories Subsidairy Companies 2016 - Present Director WHA Hemaraj Land and Development Investment in associate/subsidaries (SG) Pte. Ltd. 2016 - Present Director WHA Hemaraj International Co., Ltd Investment in associate/subsidaries 2015 - Present Director WHA Utilities & Power PCL Utilities & Power 2014 - Present Director H-International (SG) Co., Ltd. Investment in associate/subsidaries 2014 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate 4 Co., Ltd 2013 - Present Director Eastern Seaboard Property and Marina Property for investment and marina Services Co., Ltd services 2012 - Present Director Rayong 2012 Co., Ltd Property developer Hemaraj Saraburi Industrial Land Co., Ltd Property developer 2005 - Present Director 2005 - Present Director Hemaraj Rayong Industrial Land Co., Ltd Property developer 2003 - Present Director The Park Residence Co., Ltd Real Estate Development and Service Management 1997 - Present Director H-International (BVI) Co., Ltd. Holding Company 1996 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate Co., Ltd 1995 - Present Director Eastern Pipeline Services Co., Ltd Pipe Pack Rental 1994 - Present Director Hemaraj Land and Development PCL. Property developer 1994 - Present Director Eastern Industrial Estate Co., Ltd Property developer 1994 - Present Director Hemaraj International Ltd. Holding Company WHAUP Affiliate Companies 2015 - Present Director WHA Energy 2 Co., Ltd Generator and distributor of electronic power 2013 - Present Director GHECO - One Co., Ltd Generator and distributor of electronic power 2011 - Present Director WHA Energy Co., Ltd Generator and distributor of electronic power 2008 - Present Director Houay Ho Power Co., Ltd Generator and distributor of electronic power 2005 - Present Director WHA Water Co., Ltd Generator and distributor of electronic power WHA Corporation Public Company Limited
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5. Mr. Krailuck Asawachatroj • Director Date of appointment: May 25, 2016 • Executive Committee Date of appointment: May 12, 2016 • Chief Strategy Officer Date of appointment: February 24, 2016 Age (Year) 46 Share holding’s proportion(%) Family relationship between the director None Education • Bachelor Degree of Industrial Engineering, Thammasat University • Master Degree of Science, Majoring Financial Engineering, New York University, USA • Master of Business Administration, Majoring Finance, Claremont Graduate University, USA Certification • Director Certification Program, IOD, 2014 Work experience in the past 5 years Period Position Company Type of Business 2016 - Present Director WHA Corporation PCL. Property developer on warehouses and factories 2016 - Present Executive Committee WHA Corporation PCL. Property developer on warehouses and factories 2016 - Present Chief Strategy WHA Corporation PCL. Property developer on warehouses Officer and factories Subsidairy Companies 2015 - Present Director Hemaraj Land and Development PCL. Property developer 2015 - Present Director Eastern Industrial Estate Co., Ltd Property developer 2015 - Present Director Eastern Seaboard Industrial Estate Property developer (Rayong) Co., Ltd 2015 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate Co., Ltd 2015 - Present Director Hemaraj Saraburi Industrial Land Co., Ltd Property developer 2015 - Present Director Hemaraj Rayong Industrial Land Co., Ltd Property developer 2015 - Present Director Eastern Pipeline Services Co., Ltd Pipe Pack Rental 2015 - Present Director The Park Residence Co., Ltd Real Estate Development and Service Management 2015 - Present Director H-Construction Management and Design and Construction Engineering Co., Ltd Supervision Service 2015 - Present Director Rayong 2012 Co., Ltd Property developer 2015 - Present Director Eastern Seaboard Property and Marina Property for investment and marina Services Co., Ltd services 2015 - Present Director Hemaraj Eastern Seaboard Industrial Property developer Estate 4 Co., Ltd 2015 - Present Director Hemaraj REIT Management Co., Ltd Trust Manager WHAUP Affiliate Companies 2015 - Present Director WHA Water Co., Ltd Water Resources Development and Management
6. Mr. Jakrit Chaisanit • Director (The director having authority to sign for binding the company as set forth in the affiliates) Date of appointment: April 23, 2012 • Executive Committee Date of appointment: May 25, 2012 • Corporate Governance Committee Date of appointment: February 18, 2014 • Chief Operating Officer Date of appointment: October 29, 2015 Age (Year) 45 Share holding’s proportion(%) 0.55 Family relationship between the director None Education • Bachelor Degree of Engineering Program in Environmental Engineering, Chulalongkorn Universiy • Master of Engineering in Project Management, Faculty of Engineering, University of Maryland Certification • Director Accreditation Program, IOD, 2012 Work experience in the past 5 years Period Position Company Type of Business 2015 - Present Chief Operating WHA Corporation PCL. Property developer on warehouses Officer and factories 2013 - Present Director WHA Corporation PCL. Property developer on warehouses and factories 2013 - Present Exeutive Committee WHA Corporation PCL. Property developer on warehouses and factories 2012 - 2015 Director and Director WHA Corporation PCL. Property developer on warehouses of Construction and factories Project Management Department Subsidairy Companies 2016 - Present Director WHA Hemaraj Land and Development Investment in associate/subsidaries (SG) Pte. Ltd. 2016 - Present Director WHA Hemaraj International Co., Ltd Investment in associate/subsidaries 2015 - Present Director H-Construction Management and Design and Construction Engineering Co., Ltd Supervision Service 2015 - Present Director SME Factory Co., Ltd Sell and Lease of Factory 2014 - Present Director WHA Corporation (International) Holding Company Company Limited Other Companies 2003 - Present Managing Director A&J Builder Co., Ltd. Constructor Business
WHA Corporation Public Company Limited
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7. Mr. Arttavit Chalermsaphayakorn • Director (The director having authority to sign for binding the company as set forth in the affiliates) Date of appointment: April 28, 2014 • Executive Committee Date of appointment: July 17, 2013 • Corporate Governance Committee Date of appointment: February 18, 2014 • Chief Financial OfficerDate of appointment: May 1, 2013 Age (Year) 42 Share holding’s proportion(%) 0.04 Family relationship between the director None Education • Bachelor Degree of Business Administrative, Faculty of Commence and Accountancy, Thammasat University • Master Degree of Science, Majoring in Finance, University of Illinois (Urbana-Champaign) Certification • Director Accreditation Program, IOD, 2013 • Greater Mekong Subregion (GMS), CMA Work experience in the past 5 years Period Position Company Type of Business 2014 - Present Director WHA Corporation PCL. Property developer on warehouses and factories 2013 - Present Exeutive Committee WHA Corporation PCL. Property developer on warehouses and factories 2013 - Present Chief Financial WHA Corporation PCL. Property developer on warehouses Officer and factories Joint Venture Companies 2013 - Present Director WHA KPN Alliance Co., Ltd. Property developer on warehouses and factories WHAUP Affiliate Companies 2013 - 2016 Director WHA GUNKUL Green Solar Roof 1 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 2 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 3 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 4 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 5 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 5 Generator and distributor of Co., Ltd electronic power from solar energy Other Companies 2011 - 2013 Senior The Siam Commercial Bank PCL. Bank and Financial Institution Vice President, IB 2007 - 2011 Senior CIMB Thai Bank PCL. Bank and Financial Institution Vice President, IB
8. Mr. Somsak Boonchoyruengchai • Director (The director having authority to sign for binding the company as set forth in the affiliates) Date of appointment: April 23, 2012 • Executive Committee Date of appointment: May 25, 2012 • Chairman of the Corporate Governance Committee Date of appointment: February 18, 2014 • Vice President Date of appointment: January 1, 2017 Age (Year) 47 Share holding’s proportion(%) 0.01 Family relationship between the director None Education • Bachelor Degree of Accounting, Faculty of Business Administration, Rajamangala University of Technology • Master Degree of Accounting, Faculty of Commence and Accounting Certification • Director Accreditation Program, IOD, 2012 Work experience in the past 5 years Period Position Company Type of Business 2017 - Present Vice President WHA Corporation PCL. Property developer on warehouses and factories 2012 - Present Director WHA Corporation PCL. Property developer on warehouses and factories 2012 - Present Executive Committee WHA Corporation PCL. Property developer on warehouses and factories 2012 - 2016 Director of Accounting WHA Corporation PCL. Property developer on warehouses and factories Joint Venture Companies 2013 - Present Director WHA KPN Alliance Co., Ltd. Property developer on warehouses and factories WHAUP Affiliate Companies 2013 - 2016 Director WHA GUNKUL Green Solar Roof 8 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 9 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 10 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 16 Generator and distributor of Co., Ltd electronic power from solar energy 2013 - 2016 Director WHA GUNKUL Green Solar Roof 17 Generator and distributor of Co., Ltd electronic power from solar energy Other Companies 2004 - Present Director Honesty Auditing Co., Ltd. Accounting Audit Service 1995 - Present Director and A. Ruengroj Funiture Part., Ltd. Furniture Producer and Interior Managing Partner Design
WHA Corporation Public Company Limited
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9. Mr. Narong Kritchanchai • Director (The director having authority to sign for binding the company as set forth in the affiliates) Date of appointment: April 23, 2012 • Executive Committee Date of appointment: May 25, 2012 • Corporate Governance Committee Date of appointment: February 18, 2014 • Chief Legal Officer Date of appointment: February 24, 2016 Age (Year) 42 Share holding’s proportion(%) Family relationship between the director None Education • Bachelor Degree of Law, Thammasat University • Master Degree of Law,Cornell University Certification • Director Director Accreditation Program, IOD, 2012 Work experience in the past 5 years Period Position Company Type of Business 2016 - Present Chief Legal Officer WHA Corporation PCL. Property developer on warehouses and factories 2012 - Present Director WHA Corporation PCL. Property developer on warehouses and factories 2012 - Present Executive Committee WHA Corporation PCL. Property developer on warehouses and factories Other Companies 2015 - Present Director SME Factory Co., Ltd Sell and Lease of Factory 2006 - Present Director Nakit Property Co., Ltd. Property Developer 2003 - Present Director RL Counsel Co., ltd Legal Counsel
10. Mr. Apichai Boontherawara, Ph.D. • Independent Director Date of appointment: April 29, 2014 • Audit Committee Date of appointment: April 29, 2014 (Acting in the Chairman of The Audit Committee) Age (Year) 62 Share holding’s proportion(%) Family relationship between the director None Education • Bachelor Degree of Economics, Thammasat University • Master Degree of Business Administrative, Thammasat University • Ph. D. of Economic, Washington University Certifications • Director Accreditation Program, IOD, 2004 • Director Certification Program, IOD, 2005 • Audit Committee and Continuing Development Program, IOD, 2005 Work experience in the past 5 years Period Position Company Type of Business 2017 - Present Chairman of the WHA Corporation PCL. Property developer on warehouses Audit Committee and factories 2014 - Present Independent Director WHA Corporation PCL. Property developer on warehouses and factories 2014 - Present Audit Committee WHA Corporation PCL. Property developer on warehouses and factories Other Companies 2015 - Present Monetary Policy Bank of Thailand Bank of Thailand Committee 2011 - Present Vice Chairman of Southeast Insurance PLC., Finance and Insurance Executive Board Southeast Life Finance and Insurance Southeast Capital Co., Ltd. Finance and Insurance 2009 - Present Honorary of KMIT King Mongkut’s Institute of University Council Member Technology Ladkrabang 2009 - Present Audit Committee Chiangmai University University
WHA Corporation Public Company Limited
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11. Mr. Somsak Pratomsrimek, Ph.D. • Independent Director Date of appointment: April 23, 2012 • Audit Committee Date of appointment: April 23, 2012 Age (Year) 46 Share holding’s proportion(%) Family relationship between the director None Education • Bachelor Degree of Accounting, Burapha University • Master Degree of Accounting, Science, Thammasat University • Ph.D. of Accounting, Chulalongkorn University Certifications • Director Accreditation Program, IOD, 2012 • Certificate of Thai Financial Reporting Standard, 2013 Work experience in the past 5 years Period Position Company 2012 - Present Independent Director WHA Corporation PCL. 2012 - Present Audit Committee WHA Corporation PCL. Other Companies 1999 - Present Professor of Faculty Burapha University, Bangsaen, Chonburi of Management and Tourism, Department of Accounting and Business Administration 2010 - 2013 Sub-committee on Federation of Accounting Professions the Monitoring of Under The Royal Patronage the Development of His Majesty The King of IFRS 2008 - 2011 Director of Academic Rajamangala University of Technology Council of Rajmanagala Suvarnabhumi Unversity of Technology Suvarnabhumi 2007 - Present President of Master Burapha University, Bangsaen, Chonburi Accountancy 2006 - 2010 President of Master Burapha University, Bangsaen, Chonburi Accountancy Program, Burapha University
Type of Business Property developer on warehouses and factories Property developer on warehouses and factories University
Regulatory Agency
University
University University
12. Mrs. Kritsana Sukboonyasatit, Ph.D. • Independent Director Date of appointment: April 23, 2012 • Audit Committee Date of appointment: April 23, 2012 Age (Year) 47 Share holding’s proportion(%) Family relationship between the director None Education • Bachelor Degree of Business Administration • Master Degree of Business Administration, Chulalongkorn University • Ph.D. of Arts, Khon Kaen University Certifications • Director Accreditation Program, IOD, 2012 Work experience in the past 5 years Period Position Company 2012 - Present Independent Director WHA Corporation PCL. and Audit Committee 2012 - Present Audit Committee WHA Corporation PCL. Other Companies 2003 - Present Managing Director Business Excellence Consulting Co., Ltd. 2004 - 2007 Deputy Managing Carpet Maker (Thailand) Co., Ltd. Director 2003 - Present Auditor of the Quality Award Thailand Award Thailand
Type of Business Property developer on warehouses and factories Property developer on warehouses and factories Consultant Factory Office of Thailand Quality Award
WHA Corporation Public Company Limited
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13. Mr. Chanvit Amatamatucharti • Independent Director Date of appointment: November 10, 2016 Age (Year) 62 Share holding’s proportion(%) Family relationship between the director None Education • Master of Arts (Economics), Chiang Mai University • Master of Economics Program (Development Economics), National Institute of Development Administration Certification • Director Certification Program, IOD, 109/2008 • Diploma, National Defence College, The Joint State – Private Sector Course Class 50 , National Defence college of Thailand • Executive Program Capital Market Academy (CMA#18), 2014 • Top Executive Program in Energy Literacy for the world – Class 3, Thailand Energy Academy • Intermediate Certificate Course in Good Governance for Middle Level Executives (#12) Public Director Institute • Top Executive Program in Commerce and Trade (TEPCOT#4), Commerce Academy • Advanced Certificate Course in Public Economics Management for Executives (#5), The College of Politics and Governance • Middle Management, Office of The Civil Service Commission (OCSC) Work experience in the past 5 years Period Position Company Type of Business 2016 - Present Independent Director WHA Corporation PCL. Property developer on warehouses and factories Other Companies 2016 - Present Director of the Energy The Sirindhorn International Enviroment Foundation for Environment Centre 2010 - 2016 Deputy Secretary National Economic and Social Development Board (NESDB) 2008 - 2009 Consultant Prime Minister’s Office Assistant 2007 - 2010 Consultant Office of the National Economic and Social Development Board 1996 - 2008 Advisor Ministry of Transport 1995 - 2006 Infrastructure Office of the National Economic and Social Development Board
14. Mr. Sirisak Kijruksa • Corporate Secretary Date of appointment: May 12, 2016 Age (Year) 56 Share holding’s proportion(%) Family relationship between the director None Education • Bachelor Degree of Accounting, Bangkok University Work experience in the past 5 years Period Position Company 2016 - Present Corporate Secretary WHA Corporation PCL. Subsidairy Companies 2016 - Present Director of Legal Hemaraj Land and Development PCL. 2016 - Present Director H-Construction Management and Engineering Co., Ltd. 2009 - 2016 Corporate Secretary Hemaraj Land and Development PCL. Director of Accounting
Type of Business Property developer on warehouses and factories Property developer Design and Construction Property developer
WHA Corporation Public Company Limited
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[ Corporate Information ]
VISION & MISSION VISION To be recognized as a market leader in aligning vertical integrated logistics facilities provider, total solution for industrial estates, utilities & power and digital infrastructure platforms with high quality throughout value chain in Asia.
Develop talent and experienced team to enhance organizational core competency Differentiate comprehensive platform for both infrastructure data center as well as customized service solutions for leading MNCs and Thai conglomerates
Develop world class logistics, industrial estates, utilities, power and property customer solutions
08
Fulfill requirement of key major business partners, shareholders and stakeholders
01 02
07
Focused on innovative and effective strategy, business, financial, service quality, safety, environment, community and governance disciplines
MISSION 06
03 05
Maintain financial discipline to maximize return on equity
Create a long-lasting relationship with strategic alliances
04 Provide unrivaled quality products with knowledge and expertise that lead to win-win solutions
[ Corporate Information ]
Major Developments
The company had series of major developments summarized per below tables
Business and Operation
Year 2014
• In July, the company acquired Equinox The Office Place, an office building, from Major Development Group and changed the name to SJ Infinite I Business Complex. It is a new 30-floor office building on PaholyotinVibhavadee Road, consists of the office space and retail area for rent with total leasable area of approximately 21,673 square meters. • In December, Premium Growth Freehold and Leasehold Real Estate Investment Trust (“The Trust” or “WHART”) was set up. The Company sold 11 warehouse buildings covering a total area of 167,107.45 sq.m., valued at THB 4,337 mm, to WHART for which WHA Real Estate Management Co., Ltd. (“WHARM”), a subsidiary company, was appointed as a REIT manager. • In December, the Company entered into a share sale and purchase agreement (the “Share Sale and Purchase Agreement”) with Hemaraj’s major shareholders to purchase shares in Hemaraj Land and Development Public Co., Ltd. (“Hemaraj”). • The Company declared its intention to voluntarily and conditionally take over Hemaraj’s securities. It arranged a voluntary tender offer to acquire the securities at THB 4.50 (Four Baht and Fifty Satang) per share on the condition that it would cancel the tender officer if the number of the offered shares at the end of the offer period was less than 50 (fifty) percent of Hemaraj’s issued shares. The voluntary tender offer would take effect only if the following conditions have been satisfied. (1) The conditions precedent specified in the Share Sale and Purchase Agreement to offer the shares in Hemaraj for sale at THB 4.50 (Four Baht and Fifty Satang) per share by the major shareholders in the voluntary tender offer have been satisfied. (2) The shareholders’ meeting approved the Company and/or its subsidiaries to acquire Hemaraj’s shares as specified in the Share Sale and Purchase Agreement and the Company to proceed with the voluntary tender offer. (3) The Shareholders’ meeting approved the Company to issue and make a right offering of its common share to existing shareholders (right offering), in which the Company has successfully issued and sold the shares and registered its capital increase with the additional paid-up capital of THB 8,937,905,473.50. (4) The Company was approved with credit facilities by financial institutions of approx. THB 31,982 mm, combined with the proceeds from the right offering, the Company had sufficient funding for the acquisition of Hemaraj under the first voluntary tender offer.
Year 2015
• On 5 February, the Company established WHA Ventures Holding Co., Ltd., in which the Company holds 99.99% of the shares in order to perform a tender offer of all issued distributable shares in Hemaraj Company.
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• In March, the Company submitted a voluntary tender offer of all shares in Hemaraj Company with price per share of THB 4.50. The duration for the voluntary tender offer was from 6 March 2015 to 10 April 2015. • On 20 April, the Company acquired 92.88% of Hemaraj’s total outstanding shares. • On 28 April, the Company sold an asset, the expansion part of DSG project, to a Fund for a total value of THB 17 mm (excluding value added tax) • On 13 October, the Company had a resolution to clarify its business policies regarding warehouses, distribution centers, and factories. The Company will be the developer of Built-to-Suit warehouses, distribution centers and factories; and Ready-Built warehouses and distribution center in any area, except for those in the industrial estates, industrial zones, or industrial parks, which will be developed by Hemaraj. Hemaraj will be the developer of Ready-Built warehouses and factories that locate in the industrial estates, industrial zones, or industrial parks. • On 30 October, WHA Group had a resolution to adjust the organizational structure and promoted Ms. Jareeporn Jarukornsakul to be Chief Executive Officer of the Company while Mr. Somyos Anantaprayoon, the former Chief Executive Officer, to resumed the position as Chairman of the Board, Director, and executive director of the Company. In addition, Mr. Jakrit Chaisanit was promoted to be Chief Operating Officer of the Company. • On 6 November, the Company sold 2 office buildings (SJ Infinite I Business Complex and Bangna Business Complex Project) to the WHA Business Complex Freehold and Leasehold Real Estate Investment Trust (“WHABT”) at the total sale price of THB 2,388,800,000 (after deducting value added tax), in which WHA Real Estate Management Company Limited (WHARM), one of the subsidiaries of the Company, was established as a trust manager. • On 2 December, the Company submitted a voluntary tender offer of Hemaraj’s shares to delist Hemaraj from the Stock Exchange of Thailand, in which the Company has submitted a voluntary tender offer for all shares at a price per share of THB 4.40. The period of the voluntary tender offer was from 3 December 2015 to 9 February 2016. • On 29 December, the Company sold 3 warehouses to WHART covering a total area of 174,914 sq.m. with a value of THB 4,486 mm. • On 30 December, the Company established 3 subsidiary companies in foreign countries, including: (1) WHA Corporation (Hong Kong) Company Limited to invest outside Thailand, acting as a Holding Company, holding stocks of the foreign companies. (2) WHA Corporation (International) Company Limited to invest outside Thailand, acting as a Holding Company, holding stocks of the foreign companies. (3) PT WHA International Indonesia to invest and to operate businesses in Indonesia. Moreover, the company has established 1 subsidiary company in Thailand, WHA Infonite Holding Company Limited (on 6 February 2017, changed the name to WHA Infonite Company Limited) as to operate in digital platform business.
Year 2016
• In January, the Company has joined with the Central Group to establish Central WHA Alliance Co., Ltd., with registered capital of THB 10 mm. and paid-up capital of THB 2.5 mm to develop warehouses, distribution centers and factory buildings. The first project was located in Wangnoi in Phra Nakhon Si Ayutthaya province. The Company holds 50% of the shares and CRC Power Retail Co., Ltd. holds 50%, respectively. By the end of 2016, Central WHA Alliance Co., Ltd., had paid-up capital of THB 642.50 mm.
• On 9 February, the Company has committed to make a tender offer of Hemaraj to delist Hemaraj’s securities from the Stock Exchange of Thailand. As a result, the Company’s holder in Hemaraj increased to 98.54%. • On 2 March, Hemaraj was delisted from the Stock Exchange of Thailand. • After the acquisition of Hemaraj’s group, the Company restructured the business within the Group by transferring utilities and power business to be under Hemaraj Clean Water Co., Ltd. (subsequently transformed into public limited company and changed the name to WHA Utilities and Power Public Co., Ltd. (“WHAUP”)), the Company’s subsidiary indirectly held through Hemaraj (99.99%). • In March, WHAUP entered into a business partner’s contract and a lease contract with a authority to produce and distribute water for industrial purpose, and industrial waste water management in industrial estates zones, as well as Hemaraj’s area. WHAUP received 50 years contract to operate in water business. • In May, WHA Energy 2 Co., Ltd. (“WHAET”) transferred all its shares in power plant companies i.e. Gheco-One Co., Ltd. and Houay Ho Co., Ltd. (Houay Ho Co., Ltd. holds 25% of Houay Ho Thai Electrical Co. Ltd.’s shares) and Glow IPP Co., Ltd. to WHA Energy Co., Ltd. (formerly named Hemaraj Energy Co., Ltd.) from Hemaraj’s Group. (WHAEG and WHAET were Company’s subsidiaries indirectly held 99.99% through Hemaraj) • In June, the Company transferred its shares totaling to 74.99% in 11 joint ventures companies to WHAEG (another 25.01% of the shares held by Gunkul Engineering Plc.). The 11 joint venture companies invest in Solar PV Rooftop projects. • In July, Chonburi Clean Energy Co., Ltd. was established with registered capital of THB 20 mm to submit PPA application for industrial waste project. • In July, WHA Hemaraj International Co., Ltd. was established with registered capital of THB 240 mm as a holding company, to support the group in term of general management, setting up business strategy, implementing a business plan and internal communication for both its domestic and international companies. Hemaraj held 99.99% of the WHA Hemaraj International’s shares • In August, the Company’s made a joint venture with the Suez Group and the Glow Group in order to establish Eastern Seaboard Clean Energy Co., Ltd., a joint venture company, with a registered capital of THB 40,000,020 to be a holding company. The joint venture company was held by WHAEG (33.33%), Glow IPP 3 Co., Ltd. (33.33%), and Suez (South East Asia) Co., Ltd. (33.33%), respectively. • On 10 August, WHAUP was transformed into a public limited company with a registered capital of THB 3,825 mm and paid-up capital of THB 3,200 mm (par value of THB 5 per share). WHAUP’s prospectus was submitted to SEC on 6 September 2016. • In August, since the Company’s business has greatly expanded covering various business industries, the Company changed its logo to be under one same branding in order to be widely well recognized under one group.
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• In September, the Company and Daiwa House Group established WHA Daiwa Logistics Property Co., Ltd. With a registered capital of THB 10 mm and paid-up capital of THB 2.5 mm to develop warehouse, distribution center, and factory projects. The initial projects were on Chonharnpichit Km.3 Road and LaemChabang. This joint venture company was held by WHA Corporation Plc. (51.00%) and DHL Asia investment private Co. Ltd. (49.00%). In December 2016, WHA Daiwa Logistics Property Co., Ltd. increased its paid-up capital to THB 820 mm. • In September, the Company and 2 partners established Genesis Data Center Co., Ltd. with a registered capital of THB 12 mm and paid-up capital of THB 3 mm (by the end of 2016, the registered capital and paid-up capital increased to THB 210 mm and THB 111 mm, respectively) to develop the data centers project. The joint venture company was held by WHA Infonite Co., Ltd. (33.33%), Advance Information Technology Plc. (33.33%), and Inter link Telecom Plc. (33.33%). At the end of 2016, Genesis Data Center Co., Ltd increased its registered capital to THB 210 mm and its paid-up capital to THB 111 mm. • In September, Glow Hemraj Wind Co., Ltd., which is indirectly held through Hemaraj (51.00%) was restructured to be under Eastern Seaboard Clean Energy Co., Ltd., who would hold 100 percent of the share after the restructuring. • On 23 November, Hemaraj Group sold leasehold right of 80 units of factory buildings, and 21 units of warehouses, located in the industrial estates of Hemaraj Group, with a total area of 261,314 sq.m. at the selling price of THB 6,279 mm, to Hemaraj Leasehold Real Estate Investment Trust (“HREIT”). Hemaraj REIT management Co., Ltd. (“HRM”), a subsidiary of Hemaraj, was appointed to be a REIT manager, and Hemaraj was appointed as a property manager. • In November, the Company repaid the last loan installment amounting to THB 31,891 mm back to a financial institution, clearing out all the Hemaraj’s acquisition loan. However, WHA Utilities and Power Group took up a loan of THB 12,999 mm during the restructuring to prepare for listing in the Stock Exchange of Thailand. • On 7 December, the Company sold 2 warehouses (WHA Mega Logistics Center (Chonlaharnpichit Km.5) and WHA Mega Logistics Center (Ladkrabang) to the trust with a total area of 159,141 sq.m. at a selling price of THB 4,145 mm. • In December, WHA Energy Co., Ltd., which is indirectly held by Hemaraj (99.99%), made a joint venture with Gulf MP Co., Ltd. to invest in a small power plant project (SPP). WHA Energy Co., Ltd. has a 25.01% stake in Gulf NLP 2 Co., Ltd., which has a total PPA of 120 MW.
Year 2017
• On 9 February, the Company has been launched opening “Hemaraj Eastern Seaboard Industrial Estate 4 (HESIE4) which is the ninth Industrial Estate of Hemaraj Group located at Pluak Daeng, Rayong, totally area 1,900 rais. • WHAUP was permitted from the Securities and Exchange Commission “SEC” by the issuance of filling effective date 20 March 2016 and proposed the Initial Public Offering (“IPO”) between 22 March to 3 April 2016 by entering ordinary shares to register in the Stock Exchange of Thailand and started trading on April 10, 2016. • The Company has been expanded Industrial Estate Development to Vietnam by issuance and permission of Investment Registration Certificate (“IRC”) from Vietnam Governance in May for the approval of long term Project Development totally area 20,000 rais which prospected first phrase of Industrial Estate Developmental Project at the approximately area 3,100 rais under the Project’s name “WHA Hemaraj Industrial Zone” in Nghe An Province, and had the Ceremony of Laying Foundation on 10 March 2017.
• There are five projects of Small Power Plant (“SPP”), Gulf, VTP, and Gluf TS 1-4 which are the Joint Venture Project between the Company thru WHAUP and Gluf MP Company ,started commercial operations in May 16, July 8, September 1, November 1, 2017 and January 1, 2018, respectively with electricity according to the contracts totally 160.1 megawatts in accordance with the proportion of shares held. • On 18 August, the Company has been certified as the Member of Thailand’s Private Sector Collective Action Coalition Against Corruption: CAC. • In the fourth quarter, the Company Group has been operated 3 Service Data Centers to support 461 Racks which are the additional services of Fiber Optic (“FTTx”) in Hemaraj Group of Industrial Estate. • In November, the Company had the Credit Rating Level A- by TRIS Rating Company. • On 29 November, the Company Group had been distributed and leased long term assets of warehouses in four projects ie. WHA Mega Center Logistic Center Project km. 19 Building C and M, WHA Mega Logistics Center Project in Lam Luk Ka and Omada Aerospace Factory Project in Rayong to WHA Premium Growth Real Estate Investment Trust “WHART” totally lease area 85,867 square meters equivalent to totally income Baht 3,079.3 million. • In November, Hemaraj Eastern Seaboard Industrial Estate 4 (“HESIE4”) has been approved from the Eastern Economic Corridor Policy Committee (“EEC Committee”) to be the promotional zone supporting industry businesses, and to be the promotional zone : Hemaraj Eastern Seaboard Industrial Estate 4 supporting the future automotive industry, robot industry, as well as aerospace and logistics industry on January 23, 2018. Furthermore, there are eight industrial estates of the Company Group which were approved from EEC Committee to be the promotional zone supporting industry businesses in February 2018 and being process for the publication.
Company’s Capital
Year 2014
• In February, the Company issued THB 500 mm debentures No. 1/2557 to sell to institutional investors and high net worth investors, with a 3 years tenure, at a fixed rate of 4.01% per annum. • In May, the Company issued THB 1,810 mm debentures No. 2/2557 for sale, targeting at institutional investors and high net worth investors. The debentures were split into 2 sets. First was THB 700 mm debentures having a tenure of 3 years, and the second was THB 1,110 mm debentures having a tenure of 5 years as outlined in the table below: No.
No. of units
Size (THB mm)
Fixed interest rate (per annum)
Tenture (years)
1
700,000
700
3.75
3
2
1,110,000
1,110
4.42
5
• In July, the Company issued THB 1,700 mm debentures No. 3/2557 for sale, targeting at institutional investors and high net worth investors. The debentures were split into 4 sets comprising THB 435 mm, THB 385 mm, THB 600 mm, and THB 280 mm having a tenure of 3, 5, 7, and 10 years respectively as outlined in the table below:
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No.
No. of units
Size (THB mm)
Fixed interest rate (per annum)
Tenture (years)
1
435,000
435
3.85
3
2
385,000
385
4.40
5
3
600,000
600
4.70
7
4
280,000
280
5.00
10
• In October, the Company issued THB 200 mm debentures No. 4/2557 for sale, targeting at institutional investors and high net worth investors, having a tenure of 2.9 years at a fixed rate of 3.85% per annum. • In November, the Company issued THB 290 mm debentures No. 5/2557 for sale, targeting at institutional investors and high net worth investors, having a tenure of 4 years at a fixed rate of 4.00% per annum.
Year 2015
• In February, the Company increased its registered capital from THB 963,891,769 to THB 1,314,397,866, in order to reserve for (1) a rights offering to existing shareholders amounting to 350,506,096 shares, whereby the ratio of 2.75 existing shares to 1 new share was given, and (2) the exercise of WHA-W1 totaling to 116,835,366 shares. • On 27 April, the Company split the security par value from THB 1 per share to THB 0.10 per share. Therefore, the number of shares changed from 1,431,233,233 shares to 14,312,332,330 shares. • In July, the Company offered THB 400 mm debentures No. 1/2558 for sale to institutional investors and high net worth investors, having a tenure of 2 years at a fixed rate of 3.95% per annum. • On 8 September, the Company issued THB 2,000 mm debentures No. 2/2558 for sale to institutional investors and high net worth investors, having a tenure of 3 years at a fixed rate of 4.15% per annum. • On 11 September, the Company issued THB 350 mm debentures No. 3/2558 for sale to institutional investors and high net worth investors, having a tenure of 2 years at a fixed rate of 3.70% per annum. • On 18 September, the Company increased its registered capital to THB 1,567,773,018.60 in order to reserve for (1) a right adjustment for WHA-W1, and (2) an exercise of WHA-W2, which was newly issued. • In October, the Company issued THB 250 mm debentures No. 4/2558 for sale to institutional investors and high net worth investors, having a tenure of 2 years, 3 days at a fixed rate of 3.70% per annum. • On 12 November, the Company issued THB 200 mm debentures No. 5/2558 for sale to institutional investors and high net worth investors, having a tenure of 2 years, 3 days at a fixed rate of 3.70% per annum. • On 14 December, the Company increased the capital from the exercise of 1,178,363,008 share of WHA-W2 totaling THB 3,181,580,121.60. • On 25 December, the Company increased the capital from the exercise of 88,409 share of WHA-W1 totaling THB 303,340.12.
Year 2016
• In March, the Company issued THB 200 mm debentures No. 1/2559 for sale to institutional investors and high net worth investors, having a tenure of 2 years, 2 days at a fixed rate of 3.70% per annum. • In April, the Company issued THB 2,500 mm debentures No. 2/2559 for sale to public investors and THB 1,000 mm debentures No. 3/2559 for institutional investors and high net worth investors. The details are in the below table. No.
No. of units
Size (THB mm)
Fixed interest rate (per annum)
Tenture (years)
1
1,000,000
1,000
3.85
3
2
1,500,000
1,500
4.10
4
4.10
4
Public Investors
Institutional Investors and High Net Worth Investors
1
1,000,000
1,000
• In May, the Company issued THB 150 mm debentures No. 4/2559 for sale to institutional investors and high net worth investors, having a tenure of 3 years, 1 day at a fixed rate of 3.75% per annum. • On 9 June, the Company issued THB 230 mm debentures No. 5/2559 for sale to institutional investors and high net worth investors, having a tenure of 3 years, 2 days at a fixed rate of 3.85% per annum. • On 16 June, the Company issued THB 100 mm debentures No. 6/2559 for sale to institutional investors and high net worth investors, having a tenure of 2 years, 11 months, 26 days at a fixed rate of 3.85% per annum. • On 21 June, the Company issued THB 280 mm debentures No. 7/2559 for sale to institutional investors and high net worth investors, having a tenure of 3 years, 17 days at a fixed rate of 3.85% per annum. • On 24 June, the Company increased the capital from the exercise of 244 share of WHA-W1 totaling THB 837.19. • In July, the Company issued THB 300 mm debentures No. 8/2559 for sale to institutional investors and high net worth investors, having a tenure of 3 years, 2 days at a fixed rate of 3.75% per annum. • In September, the Company issued THB 1,500 mm debentures No. 9/2559 for sale to institutional investors and high net worth investors, having a tenure of 5 years at a fixed rate of 4.00% per annum
Year 2017
• On 28 April, the Company issued THB 2,600 mm debentures No. 1/2560 for sale to institutional investors and high net worth investors, having a tenure of 3 years at a fixed rate of 3.50% per annum • On 25 August, the Company issued THB 100 mm debentures No. 2/2560 to Private Placement investors, having a tenure of 2 years, 11 Month, 24 days at a fixed rate of 3.15% per annum
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[ Corporate Information ]
NATURE OF BUSINESS OPERATION The Company is the leader of one-stop service which covers all of customer demands relating to logistics service of which classifies into 4 business hubs as follows; 1. Logistics Hub 2. Industrial Development Hub 3. Utilities & Power Hub 4. Digital Platform Hub
Revenue structure, as recorded in consolidated financial statement of the Company and its subsidiaries during 2015-2017, can be summarized as follows;
Unit: THB mm
2015 (Adjust) Rental, service and utilities income : Rental and service income from warehouses, distribution centers and factories/1 : Utilities income Income from sales of real estate : Income from industrial land sale : Income from investment properties Total income from sales and services Other income : Dividend income from Property Fund and REIT : Trust management fee for REIT, and property management fee for Property Fund and REIT/1 : Other income/2 Total Revenue Share of profit (loss) of associates and joint ventures/3 Total income with share of profit (loss) Remark:
2016 (Audited)
2017 (Audited)
2,994.3 1,425.4
22.9% 10.9%
3,692.8 1,688.7
19.1% 8.7%
3,223.5 1,148.3
26.0% 9.3%
1,568.9 8,466.3 3,963.8 4,502.4 11,460.6 603.6 111.7 66.4
12.0% 64.6% 30.3% 34.4% 87.5% 4.6% 0.9% 0.5%
2,004.0 14,162.6 2,425.5 11,737.2 17,855.4 463.4 183.2 76.7
10.4% 73.3% 12.6% 60.7% 92.4% 2.4% 0.9% 0.4%
2,075.2 6,290.1 3,210.8 3,079.3 9,513.6 932.9 299.9 171.7
16.7% 50.7% 25.9% 24.8% 76.7% 7.5% 2.4% 1.4%
425.5 12,064.2 1,038.0
3.2% 92.1% 7.9%
203.5 18,318.8 1,006.2
1.1% 94.8% 5.2%
461.3 10,446.5 1,963.5
3.7% 84.2% 15.8%
19,325.0 100.0%
12,410.0
100.0%
13,102.2 100.0%
Adjust income for 2015 for benefit in comparison income for 2016 and 2017 Other income consisted of interest income, gain from sale of short-term investments and others. Share of profit of associates and joint ventures mainly came from power business.
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Products and services
1. Logistics Hub
The Company is committed to be a leading company as a warehouse project developer, distribution center, and high quality factory located in a strategic location around Bangkok, Eastern Economic Corridor, and other provinces. The Company is able to fully meet the needs of its customers due to its project location, project design with international standards and quality of construction. This could reduce the cost of customer operations and increase long-term competitive advantages. Real estate business development and management could be described in accordance with the types of products and the services provided, details are as follows; A) Real estate development business for rental and service income 1) Warehouse and distribution center • Built-to-suit project • Warehouse Farm project • Hemaraj Logistics Parks project (Ready-Built) 2) Warehouse • Built-to-Suit Project • Ready-Built Project 3) Other projects B) Real estate development business for sale C) Investment and real estate management business D) Trust management business Real Estate development and management business is a major source of revenue for the Company. As of year-end 2017, the Company has expended its business in connection to its space rental business and space rental under the Company’s management of more than 2,150,410 square meters, as the Company has offered a more variety of project types to its customers.
Rental Space Under WHA Group’s Management Total leasable area (Unit: Sq.m.)
88,913
2006
141,619 141,619
2007
2008
169,433 192,341
2009
Asset Under Management
2010
298,139 505,051
2011
2012
Total leasable area 2,150,410 891,286 1,108,740 1,975,361 2,115,293 Sq.m.
2013
2014
2015
2016
2017
Group-Owned assets and preleased
REMARK : total leasable area includes occupied space which generates revenue, pre-leased area and available area
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A) Real estate development business for rental and service income Real estate development business for rental and service income is a real estate development project for the warehouse building, distribution centers, factories in order to rent and provide services to customers who emphasis on quality and high construction standards. They are located in strategic locations in the logistic areas, such as Bangna-Trad km 18-23 Ladkrabang Rama II and areas in the Eastern Economic Corridor project, including provincial cities such as Ayutthaya, Saraburi, Khon Kaen, Surat Thani and Lamphun etc. The Company’s projects are located near to industrial estate, industrial area and/or Industrial zone, in providing our customers with competitive landscape. The projects are classified by product type and services offered, details are as follows: 1) Warehouse buildings and distribution centers Built-to-Suit Project Built-to-Suit Project is a project development according to the needs of customers. Most of the projects are large-scale building, ranging from 10,000 to 70,000 square meters which were designed and developed to meet complex, variety usage and best suit the need of each customer to give most benefit to their business nature and working procedure. Most of Built-to-Suit contracts are long-term lease with an average rental period between 10 and 15 years, and the tenant shall deposit for contract and service guarantee in cash and/or bank guarantees at the rate equivalent to approximately 3-12 months of rental fee, under the condition that If the tenant cancels the lease contract before the lease expiration specified in the lease agreement, the lessee shall compensate the rent for the remaining lease term to the Company. Warehouse Farm Project The Warehouse Farm project is a combination of Built-to-Suit and Ready-Built project with premium quality construction concept. It is a project developed to meet the increasing demand of both existing and new customers. Built-to-Suit buildings in Warehouse Farm are ranged from 10,000 to 16,000 square meters, while Ready-Built buildings in Warehouse Farm are approximately 3,000 to 5,000 square meters. The majorities of Builtto-Suit contract are long-term contracts for more than 5-10 years, while Ready-Built buildings in Warehouse Farm are short-term contract of approximately 3 years term. In addition, the Company provides options for renewal with the same condition as Built-to-Suit project. Furthermore, the Company also looks after the common area of the projects such as central electricity services, security services, road repair services, public utilities and facilities, etc. Hemaraj Logistics Park The Hemaraj Logistics Park project is a high-quality Ready-Built project with the average area ranging from 2,400 to 25,000 square meters per site. The project is located in the logistics center and surrounded by industrial estates. The location is close to the deep sea port, and Eastern Economic Corridor zone which can meet the needs of the customers as well as third party logistics service providers. Hemaraj Logistics Park offers four projects as follows: Project Hemaraj Logistics Park 1
Location
Unit Size
Outstanding
Highway No. 331, Chonburi
195 Rai
Located between Laem Chabang Port and Hemaraj’s Industrial Estate. It is only 20 kilometers from the port in Free Zone and the General Zone.
Project
Location
Unit Size
Outstanding
Hemaraj Logistics Park 2
Hemaraj Eastern Seaboard Industrial Estate (HESIE) on Highway No. 3574, Rayong
63 Rai
Located in the Free Zone with target customers in the automotive cluster and others.
Hemaraj Logistics Park 3
Hemaraj Eastern Seaboard Industrial Estate, on Highway No. 3574, Rayong
18 Rai
Located in General Zone
Hemaraj Logistics Park 4
Nearby Eastern Seaboard Industrial Estate (ESIE), Rayong
63 Rai
Located in General Zone which is the center of Eastern Industrial area
2) Warehouse and Factory Buildings Built-to-suit The Company has a design and development team with extensive experience in design and construction of various projects. In order to meet the complex needs of our customers. In the design phase, the factory layout will be adjusted to suit with customer’s production process, allowing for continuity of the production process and defects reduction. As a result, this project will best benefit our customers in terms of cost reduction and enhanced production efficiency. Ready-Built Ready-Built project is developed to cater for small and medium-sized industry (SMEs), an average warehouse area ranging from 450 to 10,000 square meters. Most of the projects located in industrial zones and duty free zones in many industrial estates of Hemaraj Group. Therefore, the Ready-Built buildings will provide customers with greater flexibility, in terms of financial investments as well as business growth opportunities. Further, Hemaraj Ready-Built Factory Park 1 has an approximate area of 13 Rai, which located in Kabinburi Hi-Tech Industrial Estate, Prachin Buri. (The first factory project located outside Hemaraj Industrial Estate / Industrial Area). The project is located in the middle of Bangkok and the Northeast of Thailand. It is convenient to transport by land, water and air. 3) Other projects The projects in which the Group invests for development and lease The Company plans to acquire the property which has been completely built and/or the property which have been partially built for development and lease. The target property should be in good condition and reasonably priced so that they can be further developed and leased to interested clients (including the existing tenants). This investment will enhance the Company’s opportunity to increase the leased space while reducing the construction period. Also, the Company can implement its expertise in space design and improvement to meet the clients’ requirements. Office buildings for rent The Company has built and developed built-to-suit office buildings for rent for clients who want and/ or purchase the fully completed office buildings for rent and/or partially completed property for development and lease. The Company will consider investing in the projects which are in good condition and reasonably priced. This will also help expand the Company’s client base.
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• Examples of design which aims to meet different needs of tenants - Interior space design for the most effective inventory turnover - Determination of the appropriate height of floor and access for large vehicles to facilitate goods delivery and transfer - Shelf design for flexibility of adjustability of tenant operations to facilitate the product arrangement/ packaging and lessen the mistakes - Temperature control of both Multi-Temperature and Cold Storage type which enables the control of the quality of the stored products
•
Examples of project specifications
Seamless metal sheet roof Seamless metal sheet roof helps reduce the problem of leaking through seams.
Insulating roof Insulating materials are installed under the roof which consist of ventilation holes to help cooling down the heat within the project and maintain the quality of the stored products. Natural ventilation system Louvers and bird screens installed around the project and the higher position of the roof improve the air circulation within the project.
Environmental management principles Infrastructure in the project such as product distribution system, warehouse and production plant have been developed in accordance with the international standards. These include the design of building structure to reduce dust and dirt accumulation and prevention of termites and insects. Strong Burnished Floor The floor structure is made of the specific concrete material which is much stronger than general concrete. Also, the Burnished Floor, which is an innovative technology of surface polishing, is used in the project to prevent scratches from heavy operations and reduce dust accumulation and floor cracks.
•
•
Examples of Built-to-Suit Project Project location: Leased space: Project type:
Bangna-Trad km. 5 10,000 sq.m. Distribution center
Project location: Leased space: Project type:
Bangna-Trad km. 19 10,000 sq.m. Distribution center
Project location: Leased space: Project type:
Saraburi Province 55,000 sq.m. Plant and distribution center
Project location: Leased space: Project type:
Chonhan Pichit km. 5 64,000 sq.m. Warehouse Farm
Project location: Leased space: Project type:
Hemaraj Industrial Estate, Saraburi Province 96,000 sq.m. Warehouse Farm
Examples of Warehouse Farm Project
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•
Examples of Ready-Built Project
Project location: Hemaraj Logistics Park 1
Project location: Hemaraj Logistics Park 2
Project location: Hemaraj Logistics Park 4
Project location: Hemaraj Ready-Built Factory Park 1
B) Property development for sale The Company has a clear policy to sell the property to Mutual Funds or Real Estate Investment Trusts to generate capital resources for development of the Company’s future projects. However, the sale of property to Mutual Funds or Real Estate Investment Trusts requires an approval from investment unit holders, and the Company, as one of the investment unit holders of Mutual Funds or Real Estate Investment Trusts, is not eligible for casting votes. In addition, the sale the Company’s property depends on other uncontrollable factors such as the market situations which affect the capital raising of Mutual Funds or Real Estate Investment Trusts. Nevertheless, the Company may consider selling the certain property to support the needs of capital use and the investment policy of the Company. The Company will select the property to sell to Mutual Funds or Real Estate Investment Trusts on the basis that such property has to be completely developed and fully eligible for sale according to the investment policy of Mutual Funds or Real Estate Investment Trusts and the relevant laws and regulations. The quantity and the size of the projects to be sold to Mutual Funds or Real Estate Investment Trusts will be determined based on the amount of capital in need for the expansion of the new project or the profits expected to be received from the sale.
In 2017, WHA Premium Factory and Warehouse Fund (“WHAPF”) was converted by merging with WHA Premium Growth Real Estate Investment Trust (“WHART”) and WHART has additionally invested in 4 projects of the Group. This investment results in WHART having the total of 20 projects under its investment, amounting for 915,811 sq.m. of the leased space in buildings and 316,907 sq.m. of roofed leased space. The overall value of assets is 27,814 million Baht. Furthermore, in 2017, Hemaraj Leasehold Real Estate Investment Trust (“HREIT”) raised capital by issuing and offering the investment units for sale for investing in the leasehold of another 55,131 sq.m. of the finished factory buildings and warehouses within Hemaraj industrial estates/industrial zones. HREIT finished its additional investment on 4 January 2018, resulting in HREIT having 316,445 sq.m. of the leased space and the total value of assets is increases 1,590 million Baht which increases from 8,434 million Baht at the end of 2017. Also, the Company plans to sell the developed projects to the third parties, especially the current tenants of the projects, which will increase the Company’s income. C) Real estate investment and management The Company plans to invest in the real estate business through Mutual Funds or Real Estate Investment Trusts in the proportion of not over 20 percent of all investment units for consistently gaining the dividends every year. However, the decision to invest in Mutual Funds or Real Estate Investment Trusts depends on the needs of capital and the amount of money raised by the sale of assets to Mutual Funds or Real Estate Investment Trusts at the time. Therefore, the investment in Mutual Funds or Real Estate Investment Trusts may be different from the indicated policy. In addition, the Company has been appointed as the manager of real estate for the assets of Mutual Funds or Real Estate Investment Trusts, from which the Company receives the income for management of the real estate of Mutual Funds or Real Estate Investment Trusts for investment in the real estate in the near future. D) Real Estate Investment Trusts Management The Company has established WHA Real Estate Management Co., Ltd. as a subsidiary for conducting the business related to WHART management and established Hemaraj REIT Management Co., Ltd. to manage HREIT. The two companies receive the management fee on annual basis as well as the fee for acquisition and distribution of assets according to the asset value.
Summary of the projects of the Group of Companies and the projects of the Mutual Funds or Real Estate Investment Trusts
(The area of the completed projects and the projects under construction as of 31 December 2017) Unit: square meters
Project status
Group
WHART/1
WHAPF/1
HPF
HREIT/2
WHABT
Completed projects
562,644
975,680
-
150,117
261,314
30,251
Projects under construction
20,791
-
-
-
-
-
Notes
On 29 November 2017, WHART received the transfer of assets (the project area of 389,982 sq.m.) and obligations of WHAPF according to the plan to support WHAPF conversion to WHART. /2 On 4 January 2018, HREIT invested in the leasehold of buildings and lands of the Group, amounting to 55,131 sq.m. /1
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• The Investment and Redevelopment / Renovation Projects for Rent The Group of Companies plans to purchase completed and/or partially constructed assets to develop for rent. In this regard, the Group of Companies will make an appropriate offer for projects that are in good condition to develop for lease to interested customers (who may be existing customers). This will enable the Group of Companies to have more leasable area at a faster pace, reduce construction period and utilize the Company’s capabilities in design and renovation to respond to customers’ needs. • Office Building for Rent To respond needs of the tenants who require office space and to diversify risks, in 2014, the Group of Companies developed a built-to-suit office building project on Bangna-Trad Road, namely Bangna Business Complex project with a leasable area of 8,578 square meters. In July 2014, the Group of Companies acquired Equinox The Office Place, an office building, from Major Development Group and changed the name to SJ Infinite I Business Complex. It is a new 30-floor office building on Paholyotin-Vibhavadee Road having a leasable area of approximately 21,673 square meters. It coinsists of the office space and retail area for rent. In November 2015, the Group of Companies sold both office building projects to WHA Business Complex Freehold and Leasehold Real Estate Investment Trust (WHABT), allowing the Group of Companies to receive cashflow proceeds from divestment and generate recurring income in the form of dividend as a trustholder and a REIT management fee through operation of WHA Real Estate Management Co., Ltd.
2. Industrial Development Hub
Industrial Development Hub is operated through the Company’s subsidiary, with Hemaraj Group responsible for developing Industrial estates and/or zones and selling of land to enterprises who demand to make their investment in Industrial estates/zones and Industrial Promotional zones. Enterprises can gain special privileges provided by Industrial Estate Authority of Thailand and/or Thailand Board of Investment. Another crucial role of Hemaraj Group is to act as a center for providing utilities and facilities for clients inside the Industrial Estate e.g. electricity, water supply, wastewater treatment, waste disposal, telephone, internet and coordinating with the authority on environmental control. By the end of 2016, there are eight industrial estates and industrial zones summarized in the following table: Industrial Estate/ Zone
Location
1) Hemaraj Chonburi Industrial Estate
HCIE
Sriracha, Chonburi
2) Hemaraj Chonburi Industrial Estate 2
HCIE 2
Sriracha, Chonburi
Project size (Rai)
Prominent Features
3,909 This industrial estate is situated at general industrial (1,564 Acre) zone and industrial zone particularly for export. Major customers are comprised of heavy steel, energy, automotive parts, electrical parts, and building materials. 632 This industrial estate is located near to an (253 Acre) accessible highway i.e. a new highway no. 331 and highway 3241, linked to Laemchabang Port which is good for transportation and shortly connected to Sriracha district which is roughly 25 km away.
Industrial Estate/ Zone 3) Hemaraj Eastern HEIE Industrial Estate (Map Ta Phut)
4) Eastern Seaboard ESIE Industrial Estate (Rayong)
5) Hemaraj Eastern HESIE Seaboard Industrial Estate
6) Hemaraj Saraburi HSIL Industrial Land 7) Hemaraj Rayong HRIL Industrial Land
Location
Project size (Rai)
Prominent Features
Map Ta Phut, Rayong (connect with National Petrochemical Complex)
3,760 (1,504 This industrial estate is catered for some heavy Acre) industries including steel, petrochemical and chemical. This industrial estate is equipped with large-scale utilities with a capability to distribute untreated water, clarified water, tap water, high voltage electricity and wastewater treatment system. Apart from large-scale utilities, this industrial estate has additional services provided such as Electricity procurement, water steam, demineralized water for industries and pipe installation system for liquid and gas transportation. Pluakdaeng, 9,726 This industrial estate is a joint venture between Rayong (3,890 Acre) Hemaraj Group and Siam Food Products PCL, with a proportional of 60:40 respectively. It was established in 1995. This industrial estate is proclaimed to be a fully-integrated industrial hub and one of the world’s largest automotive cluster, occupied with major automobile manufacturers together with more than 100 downstream automotive manufacturers, most of which are the world’s most renowned automobile brands. This industrial estate has become the central hub of automotive production with a combined capacity contributing to one-third of Thailand’s total automotive production. Pluakdaeng, 8,112 The industrial estate is connected to Eastern Rayong (3,254Acre) Seaboard (Rayong) Industrial Estate (ESIE), easily commutable by car. Additionally, ESIE is only 12 km from Hemaraj Chonburi Industrial Estate (HCIE). This industrial estate is a cluster for automobile manufacturers and automobile downstream industries. Nong Kae, Saraburi 3,619 This industrial zone is catered for building materials, (1,448 Acre) ceramics, paper, packaging, metal, and electricity industries. Bankai, Rayong 3,438 This industrial zone is for machinery, automotive (1,375 Acre) equipment, electrical metals and other downstream industries. At the present, this industrial zone has a strategic location in the eyes of domestic and foreign industrial enterprises. It is considered to be the production base for industrial machinery, mining, and construction materials, exported worldwide.
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Industrial Estate/ Zone
Location
8) Hemaraj Eastern HESIE 2 Seaboard Industrial Estate 2
Sriracha and Banbueng, Chonburi
Hemaraj Eastern Seaboard Industrial Estate 4
Pluakdaeng, Rayong
HESIE 4
Project size (Rai)
Prominent Features
3,650 This industrial estate is located approximately 25 km (1,460 Acre) from Laemchabang port and close to automotive cluster which is in Hemaraj Industrial Estate. Customer groups include automobile manufacturers and downstream manufacturers. 1,870 The EEC Policy Committee approved and (748 Acres) announced the 4th Hemaraj Eastern Seaboard Industrial Estate as Industrial Promotion Zones to support Next-generation Automotive, Aviation and Logistics, Robotics and Automation industry
At the end of 2017, Hemaraj Group is managing 6 Industrial Estates, 2 Industrial Lands and 1 Industrial Promotion Zones, together with an undeveloped land bank, totaling to 46,434 Rai, with a total 719 customers, and over USD 30,500 mm has been invested by our clients in the industrial estates/ zones. Hemaraj Group is targeting at customers who require a full service solution i.e. Industrial Estate fully equipped with utilities, power, capable to heavy production manufacturer, with good supporting infrastructure e.g. automobile industries, petrochemical industries, steel industries, energy industries etc. Complimenting to Hemaraj Group’s full services solution, the figures of land sale have been increasing steadily. In 2017, land presale in industrial estates/ zones added up to 976 Rai, contributing to a land sale revenue of approximately THB 3,210.8 million. Hemaraj Group is still having a land bank for future development of approximately 10,000 Rai. Hemaraj Group is now considered to be the largest industrial estate developer in Thailand, with accumulated land presale from 2013 to 2017 of 5,715 Rai, constituting to 50% of a total average market share. (Survey’s results report from CBRE Bangkok Property).
Land presale in industrial estates/ zones of Hemaraj Group Farm 2,500
2,317
2,200
2,000 1,500
1,043
1,000
665
835
976
2016
2017
500 0
Source: the Company
2012
2013
2014
2015
Details of Industrial Estate Zoning
Hemaraj Group categories its industrial estates and industrial zoning into 6 different zones, in according with its use of land, details are as follows: Zoning by Usage
Definition of Each Zoning
General Industrial Zone Free Zone / Export Processing Zone-EPZ
- The zone is designated for industrial and industrial-related activities. - The zone is designated for industrial, commercial operations and other relatedactivities, which are beneficial to the nation as a whole. Import duties on machinery under the Free Zone Economic are tax exempted. - The zone is designated for commercial operations including banks, post office, hospital, gas station and educational institution etc. - The zone is designated for residential area such as apartments, condominiums and houses etc. - The Zone is designated for construction of warehouses or factories for rent in relation to logistic business. - The area is designated for construction of public utility and public infrastructure such as road, water supply system, waste water treatment system, reservoir, public parks etc.
Commercial Zone Residential Zone Logistics Zone Common Area and Public Utility System
3. Utilities & Power Hub
A) Utilities can be categorized as follows:
Utilities & Power Hub is operated through the Company’s subsidiary, WHAUP Group, the provider of utilities in the Hemaraj Group’s industrial estates/zones i.e. raw water, industrial water, and wastewater treatment. WHAUP Group is also into power business, through joint ventures with both domestic and foreign power plants, who have expertise in the power business field. Our power plants include both Conventional Fuel and Alternative Fuel power plants.
Products and Services Raw Water Procurement and Allocation
Prominent Features Procuring and distributing raw, untreated water to enterprises in Hemaraj Group’s Industrial Estate with focusing mainly on heavy steel manufacturers, Independent Power Plant Producers (IPP), and Small Power Plant Producers (SPP).
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Products and Services
Prominent Features
Industrial Water Production and Distribution
Producing and distributing industrial water to enterprises in industrial estate which can be divided into two main categories as followings: (1) Processed Water – Purified water through precipitation, filtration, and sterilization with Chlorine. Target customers include automobile manufacturers, automobile part manufacturers, food processing manufacturers, electronic manufacturers etc. (2) Clarified Water – Purified water through precipitation, filtration, and sterilization with Chlorine (adding higher Chlorine concentration compared to the processed water). The Concentrated Chlorine Solution added to the clarified water will evaporate prior to distributing to the customers, as it can be ensured that the Chlorine will not be eroding customers’ machinery. The target customers include heavy metal industries, petrochemicals and power plants.
Wastewater Treatment
Providing wastewater treatment for customers inside the industrial estates in compliance with the Ministry of Industry, prior to draining into the natural water resource or recycling to be reuse in the production process.
Currently, WHAUP Group is one of the largest utilities providers in Thailand’s industrial estates, with water production capacity of 281,376 m3/Day and waste water treatment capability of up to 149,456 m3/Day. In 2017, WHAUP Group has sold raw water and industrial water on an average of 182,415 m3/Day. Moreover, WHAUP Group has been treating wastewater on an average of 94,830 m3/Day.
Utilities Production by WHAUP Group
(Unit : million m per year) 80 3
70 60 50
58 34
53 29
63 42
60 39
40 30 20
24 5 18
25
10
23
28 6 22
22
29 6 23
21
34 7 28
33 6 27
32 6 26
31 6 25
66 49
63 46
61 43
19
17
17
2015
2016
2017
0
2011 Raw water
2012
2013 Industrial water
2014
Waste water treatment
Waste water treatment (ESIE)
Furthermore, WHAUP Group is on plan to offer enterprises with other utilities such as gas pipeline and waste disposal. Moreover, WHAUP Group also plans to expand its business outside the industrial estates, providing utilities to clients outside the industrial estates. WHAUP Group is certified by International Organization for ISO 9001:2008 and ISO 14001:2004 (environmental standards). B) Power a joint venture power plant projects with highly-skilled enterprises who currently are in the power business, generating electricity via conventional fuel and alternative fuel. As of 31 December2017, WHAUP Group has a combined electrical generating capacity of 478.36Shareholder Equity Megawatts and another 64.47Shareholder Equity Megawatts are still under-construction. Details are as follows:
1) Operated Power Plant Projects (Already-COD)
Power Plant Location Project
Fuel Type
Power Investment Produce Proportion Type
Total Contract Capacity
Capacity by shareholding proportion
COD
Joint Venture Projects with Glow’s Group Industrial Estate Map Ta Phut
Coal
IPP
35.00%
Electricity
660.00
MW
231.00
MW
Aug 2012
Glow IPP
HCIE
CombinedCycle Power Plant with Natural Gas
IPP
5.00%
Electricity
713.00
MW
35.65
MW
Jan 2003
Houay Power
Lao PDR
Hydro Power
IPP
12.75%
Electricity
152.00
MW
19.38
MW
Sep 1999
Electricity
122.50
MW
30.64
MW
Stream
3.00
TPH
0.75
TPH
Cold water
3,200.00
RT
800.32
RT
Gheco-One
Joint Venture Projects with Gulf’s Group
Gulf JP NLL
HRIL
Cogeneration System with Natural Gas
SPP
25.01%
May 2013
Gulf Solar KKS
HPL1
Solar Power
VSPP
25.01%
Electricity
0.25
MW
0.06
MW
Dec 2014
Gulf Solar BV
HCIE
Solar Power
VSPP
25.01%
Electricity
0.13
MW
0.03
MW
Jun 2014
Gulf Solar TS1
HESIE
Solar Power
VSPP
25.01%
Electricity
0.13
MW
0.03
MW
Aug 2014
Gulf Solar TS2
ESIE
Solar Power
VSPP
25.01%
Electricity
0.09
MW
0.02
MW
Jan 2015
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Power Plant Location Project
Fuel Type
Power Investment Produce Proportion Type
Total Contract Capacity
Capacity by shareholding proportion
COD
Joint Venture Projects with Gunkul Engineering’s Group WHA Gunkul Green Solar Roof 17
WHA Mega Logistic Center Wangnoi 61 Ayuthaya
Solar Power
VSPP
74.99%
Electricity
1.00
MW
0.73
MW
Jul 2014
WHA Gunkul Green Solar Roof 3
WHA Mega Logistic Center Bangna-Trad Km.18
Solar Power
VSPP
74.99%
Electricity
0.83
MW
0.62
MW
Apr 2014
WHA Gunkul Green Solar Roof 6
WHA Mega Logistic Center Bangna-Trad Km.18
Solar Power
VSPP
74.99%
Electricity
0.83
MW
0.62
MW
Apr 2014
WHA Gunkul Green Solar Roof 1
WHA Mega Logistic Center Bangna-Trad Km.18
Solar Power
VSPP
74.99%
Electricity
0.64
MW
0.48
MW
Apr 2014
25.01%
Electricity
121.00
MW
30.26
MW
Nov 2016
Electricity
130.00
MW
32.51
MW
Stream
20.00
TPH
5.00
TPH
Electricity
130.00
MW
32.51
MW
Stream
42.00
TPH
10.50
TPH
Electricity
130.00
MW
32.51
MW
Stream
36.00
TPH
9.00
TPH
Electricity
125.00
MW
31.26
MW
Stream
25.00
TPH
6.25
TPH
Electricity
2,287.40
MW
478.34
MW
Stream
126.00
TPH
31.50
TPH
Cold water 3,200.00
RT
800.32
RT
Joint Venture Projects with B Grim Power’s Group B.GRIMM Power (WHA) 1
HCIE
Cogeneration System with Natural Gas
SPP
Joint Venture Projects with Gulf MP’s Group Gulf VTP
ESIE
Cogeneration System with Natural Gas
Gulf TS1
ESIE
Cogeneration System with Natural Gas
SPP
25.01%
Gulf TS2
ESIE
Cogeneration System with Natural Gas
SPP
25.01%
Gulf TS3
HESIE
Cogeneration System with Natural Gas
SPP
25.01%
Total
SPP
25.01%
May 2017 Jul 2017 Sep 2017 Nov 2017
2) Power Plant Projects (Under Construction)
Power Plant Location Project
Gulf TS4
HESIE
Fuel Type
Cogeneration System with Natural Gas
Power Investment Produce Proportion Type
SPP
25.01%
Total Contract Capacity
Capacity by shareholding proportion
Electricity
125.00
MW
31.26
MW
Stream
25.00
TPH
6.25
TPH
SCOD
Jan 2018
WHA km. 3 Solar
WHA Mega Logistics Center (Chonhanpijit km. 3)
Solar Power
VSPP
100%
Electricity
0.90
MW
0.90
MW
Feb 2018
Gulf NLL2
HRIL
Cogeneration System with Natural Gas
SPP
25.01%
Electricity
120.00
MW
30.01
MW
Jan 2019
Stream
10.00
TPH
2.50
TPH
Electricity
6.90
MW
2.90
MW
Electricity
252.80
MW
64.47
MW
Stream
35.00
TPH
8.75
TPH
CCE
HCIE
Power Plant Location Project
Waste Energy
Fuel Type
VSPP
33.33%
Power Investment Produce Portion Type
Contract Capacity
Capacity by investment portion
2019
SCOD
Joint Venture Projects with Gulf MP Co. Ltd. Gulf VTP
Gulf TS 1
Gulf TS 2
Gulf TS 3
Gulf TS 4
ESIE
Cogeneration System with Natural Gas
ESIE
Cogeneration System with Natural Gas
ESIE
Cogeneration System with Natural Gas
HESIE
Cogeneration System with Natural Gas
HESIE
Cogeneration System with Natural Gas
SPP
SPP
SPP
SPP
SPP
25.01%
25.01%
25.01%
25.01%
25.01%
Electricity 130.00
MW
32.51
MW
20.00
TPH
5.00
TPH
Electricity 130.00
MW
32.51
MW
42.00
TPH
10.50
TPH
Electricity 130.00
MW
32.51
MW
36.00
TPH
9.00
TPH
Electricity 125.00
MW
31.26
MW
25.00
TPH
6.25
TPH
Electricity 125.00
MW
31.26
MW
TPH
6.25
TPH
Steam
Steam
Steam
Steam
Steam
25.00
May-2017
Jul-2017
Sep-2017
Nov-2017
Jan-2018
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Power Plant Location Project
Gulf NLL 2
HRIL
Fuel Type
Cogeneration System with Natural Gas
Power Investment Produce Portion Type
SPP
25.01%
Total
Contract Capacity
Capacity by investment portion
Electricity
120.00
MW
30.01
MW
Steam
10.00
TPH
2.50
TPH
Electricity
760.00
MW
190.07
MW
Steam
158.00
TPH
39.57
TPH
SCOD
Jan-2019
4. Digital Platform Hub
In 2017 WHA Group offered Digital Platform services through its subsidiary, WHA Infonite Company Limited. WHA Group offers the following Digital Services in order to provide our customers with a comprehensive IT solution: Data Center: Co-location, Fiber Optic Internet FTTx Service, Rental/Leasing Equipment & Software Service and System Integration Service.
The offered services are described as follows:
A) Data Center : Co-location Rental Server Hosting service incorporated with a world-class standard and a high-security operating system with an experienced consultant service. A customer is to prepare a server and to lease out a storage space in our data center. Currently, the WHA Group is operating 3 Data Centers located in Vibhavadi and Bangna-Trad area, moreover the WHA Group will develop another data center located in Eastern Seaboard Industrial Estate. All of the Data Centers are to be connected with high speed fiber optic, enabling the customers to conveniently make an access to the data center from their working stations and/or offices. The Data Centers is to obtain a world class standard, equivalent to Tier 3 data centers standard, in which electricity backup generators are installed in order to prevent from downtime, 24-hours ambience monitoring i.e. controlled temperature and humidity, allowing server to function efficiently together with longer machine life expectancy, 24-hours onsite staffs and security guards, installation of security cameras and fire alarm. Data centers are also designed to support as a Disaster Recovery site. Data centers are looked after by an expertise with more than 20 years of working experience in the field, who is certified with Certified Accredited Tier Design from Uptime institute. Last by not least, 24-hours Business Continuity Plan (BCP) are provided on site in order to assist our clients to manage their IT system contentedly. The WHA Group is currently providing Data Center service as an infrastructure service, known as Co-location, details are described as follows: Co-Location Service is for corporations, government entities or state enterprises who are looking for Rental Server Hosting Services to be used as main site and back up (Disaster Recovery) site in order to prevent company’s database from any unexpected situation or natural disaster that might cause damage to customer’s main sites. B) Fiber Optic FTTx Service WHA Group has invested in laying of the fiber optic network (FTTx) in Hemaraj Group’s industrial estates, providing infrastructure to support high-speed connection for our clients in industrial estates. Service operators have no longer need to invest in the FTTx infrastructure. Our clients in industrial estates can now enjoy a better high speed connection with their head quarter/office branches all over the world, through an enhanced network security system. FTTx network is a fundamental communication service, allowing for various communication types such as images, sounds and data.
C) Rental/Leasing IT Equipment and Software WHA Group will rent/lease IT equipment and software, together with looking after of its maintenance service as per clients’ specifications and duration agreed upon i.e. 3-year or 5-year contract. Clients will benefit from having expert IT consultants setting IT facilities, which can best suit clients’ requirements, at the most cost effective manner and an after-sale IT service, maintaining clients’ IT facilities. Clients do not need to invest on the equipment, turning CAPEX into OPEX. D) System Integration Service WHA group gives advice, designs, acquires, implements, maintains and brings together IT component subsystem in providing a comprehensive IT solution for our clients. As WHA Group is the specialize on IT digital platform, we are able to offer our clients with the best available technology on the market at the most competitive pricing.
The WHA Group understands the important of technology. Shifting from conventional economy to digital-oriented economy and to incorporate new technology in order to provide new innovation for our customers. Thus, the WHA Group is able to satisfy our customers’ need and to provide our customers with a more efficient management system. In 2018 the WHA Group plans to expand our offered services, covering the following area: • Data Center : Cloud Services An innovative innovation on top of our Data Center Services, from an infrastructure service or Co-location, to an innovated service provider known as Cloud Services, details are described as follows:
Cloud Solution Service is for corporations, government entities or state enterprises who are looking to outsource/use IT facilities without the need to invest on IT infrastructure or IT resources. WHA Group has prepared a highly-experienced staff with certifications from international institutions such as Dell Certification, Hitachi Data System Certification, VM Ware Certification and OpenStack Certification to advise and to design the system to meet our clients’ specifications in a costeffective manner i.e. minimizing investment on hardware, software and maintenance while maximizing IT utilization. Cloud Solution Service is suitable for any corporations with no expertise on IT system so that the corporations can focus their expertise on their core business operation, leaving behind the IT system for WHA Group to look after. Cloud Solution Service can further be categorized into 3 services as follows: - Infrastructure as a Service (IaaS) is the service that provides infrastructure such as virtualized server, storage, network and firewall. WHA Group helps customer to reduce number of physical servers, to monitor IT security system as well as to provide high-speed internet network. WHA Group will be responsible for an investment on IT infrastructure and the maintenance of the system, given the benefit to the clients in reducing their IT expenses, enabling for an efficient management of the IT resources in the most cost-effective manner. - Platform as a Service (PaaS) is a service suitable for corporations with IT professionals, who are able to develop their own applications or those who need to develop complex applications. WHA Group will prepare IT infrastructure and application developing software e.g. hardware, operating system, middleware, database, software development tools and database. The service enables clients to effectively manage their IT resources, minimize the set-up time and having no need to invest on IT infrastructure. - Software as a Service (SaaS) is a service of pay-per-use or renting of software/applications, via the utilization of WHA Group’s data processing units. Clients do not need to invest on IT system, not to mention hardware nor software because the software/applications provided are on cloud which can be accessed from anywhere via web browser or internet connection. WHA Corporation Public Company Limited
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All of the data processing is done through WHA Group’s server. Examples of SaaS are Email on cloud, Anti-Virus, Firewall, Information back up system and Workflow cloud based ERP. SaaS facilitates smooth operations connectivity and enables a fully-automated workplace. Switching to SaaS can enhance operation efficiency, allowing for an in-depth data analysis. It is highly recommended for a corporation with high growth potential, as it enables a comprehensive business solution.
•
IT Outsourcing Service
A service provider to deliver IT-enabled business process, IT human resources, applications and infrastructure solutions to enhance our clients’ business outcomes. WHA Group can assist our clients outsourcing their IT facilities, enabling for an efficient IT resource management, thus reducing their overall IT expenses. The service is popular among clients in industrial estates, due to the fact that most of the clients are foreign manufacturing companies. These groups of clients have their expertise on the production facilities while IT department is considered as their supporting business unit. Thus, this group of clients would gain most benefits from our IT outsourcing service. Authorizations and benefits for the business
WHA Group has obtained NBTC internet services (type 1) given by office of The National Broadcasting and Telecommunications Commission, document number NTC/MM/INT/ ISP/1/078/2559 valid from 20 December 2016 to 19 December 2020. The course of permission can be renewed every 5 years. The company is in the process of submitting for NBTC (type 3), an operating license for a mass telecommunication service provider.
Benefits from the Board of Investment of Thailand (BOI)
As at 31 December 2017, WHA Group has received the benefits from the Board of Investment of Thailand (BOI) for activities as follows: • The Company has received the benefits from the Board of Investment of Thailand (BOI) totally 2 certificates for building factories and warehouses activities. • The Company’s subsidiaries have received the benefits from the Board of Investment of Thailand (BOI) totally 79 certificates for activities as follows; - Building factories and warehouses activities, 54 certificates. - Real estate development for industrial, 21 certificates. - Logistics parks, 1 certificate. - Public utilities and basis services Production of tab water or water supply for industry, 2 certificates. - Data Center activities, 1 certificate Significant privileges consist of: 1) Tax exemption on the profit that the Company gains for 8 years since the first date of revenue generated. If the Company has loss from the operation, BOI allows the Company to deduct the loss from the profit that might occur in another 5 years after BOI expiry date. In addition, the Company can also choose to deduct the loss in one year or multiple years combine. 2) Tax exemption on the profit that the Company gains (no more than 100% of the finance cost that is not included in land cost and working capital that have 7 years of useful life). If the Company has loss from the operation, BOI allows the Company to deduct the loss from the profit that might occur in another 5 years after BOI expiry date. In addition, the Company can also choose to deduct the loss in one year or multiple years combine.
3) Tax exemption on the profit that the Company gains (no more than 100% of the finance cost that is not included in land cost and working capital that have 8 years of useful life). If the Company has loss from the operation, BOI allows the Company to deduct the loss from the profit that might occur in another 5 years after BOI expiry date. In addition, the Company can also choose to deduct the loss in one year or multiple years combine. 4) The Group does not need to include dividend received from a BOI-promoted entity to calculate the income tax expense during the exemption period. 5) Tax deduction (50% of normal rate) on net profit within 5 years after the end of the right period as mentioned in 1 above. 6) Two times deduction on travel, electricity, and water supply cost within 10 years starting from the date that the Group receives its first profit from the operation. 7) Deduction on investment cost (25% of investment cost that is not included in the normal depreciation rate). 8) Import duty tax exemption on machinery, as per Board of Investment of Thailand’s (BOI) approval As a promoted company, the Company must comply with certain conditions and restrictions provided for in the promotional certificates.
Marketing and Competition
1. Real estate development and management business
The Company realizes the importance of creating value to tenants in terms of logistics cost management by understanding clients’ specific needs and models of business to develop and design special projects. we select the location which address clients’ needs and hand over the project in timely manner under reasonable rents so that tenants can rest assured that, by renting the projects, the logistics management will be more effective, which results in the Company being trusted and winning biddings for several projects. To maintain its leadership in real estate development and management and sustainable growth, the Company has implemented the following business strategies: • Business strategies 1) Setting the goal to become the leader of Built-to-Suit project development The Company is striving for development of Built-to-Suit projects to meet the needs of domestic clients and tenants while emphasizing the quality, expertise, experience, and long-term reputation of the Company. The Built-to-Suit projects will be designed and developed based on the collaboration between the experienced structural engineering team of the projects and the tenants’ team in order to create the project which can respond to the tenants’ specific needs and enhance the effectiveness of logistics management for the tenants. The design will be made by taking account of functionality including the capacity of weight support of the building floor, appropriate clear height of the buildings as well as the temperature control system of the multi-temperature and the cold storage buildings. 2) Expansion of the client base to ASEAN and CLMV countries The Company plans to expand the business to ASEAN and CLMV countries for increasing the business opportunities as those countries have a great number of population and labors while the labor cost is low and the economic growth rate is still high. For this reason, the Company, by having a wide range of products and services, will be able to provide a variety of services to clients.
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3) Response to the government policies The Company aims to respond to the government policies on upgrading Thailand’s industries to industries of the future or high-value clusters by focusing on the business operators who demand the use of warehouses and plants in high-value clusters such as multi-temperature facilities, automation robotics and e-commerce. 4) Inorganic Growth The Company is ready for inorganic growth by evaluating the feasibility of the projects for Sale-and-Lease-Back investment in order to increase the proportion of recurring income from the rent. This will enable the Company to recognize the income from the rent of the projects as there are continuous tenants, and the Company needs not waste the time to build new projects or find new tenants for newly developed projects. • Prospective clients 1) Domestic an international manufacturers and distributors of products, including a) International manufacturers and retailers who need and realize the importance of complicated and high-quality of distribution center. Also, these multinational companies are in need of the business operators whom they can trust in terms of quality, cost, delivery time, and pre- and post-delivery service. Therefore, these companies express their interest in renting the projects from professional business operators more than other groups of tenants. b) Domestic manufacturers and distributors are the tenants who see the importance and are in need of the logistics system development. In the past, these tenants built and managed the inventory, product distribution centers and plants by themselves, which require high costs but generate low efficiency. At present, these clients choose to use outsourcing service (this trend has occurred in Australia, USA and Japan) to increase competitiveness to an international level. 2) Third Party Logistics providers (3PLs): Most of this group of clients are leading international companies who have expertise in logistics management. They manage distribution and transportation of the goods which are not the main business or ability of the owners. These companies will invest in the creation of product distribution network from the provision of vehicles, warehouse, operators, equipment, and operation supporting system. • Industry situation Logistics business is very important for business operators as well as national development. Thailand also realizes the importance of logistics and is established as the logistics hub to support the ASEAN Economic Community (AEC). In addition, the Eastern Economic Corridor (EEC) Project encourages Thailand to develop the national logistics system at regional and international level to increase the competitiveness and to support the ASEAN Economic Community (AEC). To increase the competitiveness of business operators and to support the ASEAN Economic Community (AEC), therefore, the government is trying to push forward the development of infrastructure which supports the multimodal transport focusing on the cost-effective transport, rail transport and regional and international link. Also, the efficiency of Supply Chain Optimization of the industrial sector is also emphasized.
Factory space demand
Warehouse space demand
in 2017, industrial sector market has sharply grown by comparison with the previous year as a result of the EEC, in which the foreign companies are interested a lot. Moreover, the export and the domestic sale of automobiles in the third quarter increased by 2.5 percent and 12.2 percent, respectively, by comparison with the previous year while Foreign Direct Investment is expected to grow consistently. In the third quarter of 2017, the supply and demand of the warehouse space have been consistently increasing. The number of overall space and leased space increased from 2016 and the vacancy rate also increased as the business operators have built new warehouses and plants to support the demand which was expected to be higher as a result of EEC. The Research Department of CBRE expects that the need of warehouse space for rent will be increasing continuously from the previous year when the growth rate was quite stable. Although the demand of warehouses and plant increases, the supply of warehouses, distribution centers and plants for rent are still available partly because of the improvement of the national economy and by international business operators who wish to control the capital invested in the activities which are not the main business of the companies which do not have much expertise or high management cost as they do not benefit from the economies of scale. Most of the multinational companies do not want to hold ownership over the warehouses and plants, which limits the risks which may occur during the uncertainty of investment and demand of products and services of the Company. Furthermore, Thailand has advantage in terms of logistics because of high-quality utility system, location, labor skills, and banking and financial system, as well as the investment development and promotion plan of the government which will enable Thailand to continue being the logistics hub of the region. In addition, business operators in Thailand are interested in receiving the service provided by logistics providers. However, most of the business operators still lack the policy on the investment in real estate which is not their main business. this is probably because real estate investment incurs a great amount of long-term fixed costs. The companies need to spend their money on development of IT system, vehicles and personnel, and they may also lack expertise in the investment in real estate development. For this reason, the companies in the industrial sector expect a company which has experience and expertise in real estate development, especially the project developer, to provide the service to them.
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Although there is an increase in the supply of warehouses and factories available for rent, there is still a continuous demand in warehouses, distribution centers, and factories available for rent. This is partly due to the improved economic condition of the country and multinational companies (MNCs) who are looking to control their investments and cost not associated with their main activity. They might not have the expertise in this area or there is high cost management because they do not benefit from economies of scale. MNCs are not looking for ownership rights of the warehouse or factory building. This will reduce risk and other uncertainties which may occur, especially during unstable times to invest and needs of the goods and services of the company. Furthermore, Thailand has an advantage when it comes to logistics, such as good infrastructure, location, skilled labor, banking systems, and the government’s development plan to promote their investment to support Thailand being the center of logistics. Business owners in Thailand are also becoming increasingly interested in using various logistic services. These business owners usually do not want to invest in real estate that is not part of their main activity because it is costly and time consuming. They will also need to put their investments in developing information technology, transport vehicle, and personnel. Furthermore, they do not have the expertise to invest and develop real estate by themselves. Therefore, companies in the industry expects that someone with the expertise and experience in real estate to develop projects and provide them with the services they need. • Competition - Direct competition from other developers There is currently a small number of warehouse, distribution centers, and high quality factory for rent developers which are located in the same strategic location as the Company. These other developers include TICON Industrial Connection Public Company Limited and its subsidiaries (TICON group), Pinthong Industrial Park Limited, and Thai Pattana Industrial Factory Public Company Limited. All three companies develop ready-built and built-to-suit warehouses and factories for rent. However, Pinthong Industrial Park and Thai Pattana Industrial Factory are not considered as our direct competition because they focus on building warehouses and factoriess for sale or rent to small or medium enterprises. - Competition from industrial estate developers The Company’s competition also includes business owners that start from developing industrial estates and later on expands to develop their own warehouses and factories in their estate in order to add to the products and services they are able to provide. Competition includes Amata Summit Ready Built Company Limited who develops ready-built factory buildings for sale and rent to medium and small operators. These industrial estate developers’ opportunity is limited to their own industrial estates or in the industrial estates for which they provide service. On the contrary, the Company can freely develop properties in any location seen that the Company and tenants want without limitation. Furthermore, because the Company bought common shares of Hemaraj Group, the Company has various locations to offer to the tenants which responds to their needs and the Company’s flexibility puts us at the advantage when compared to other industrial estate developers. - Competition from other small-scale developers of warehouses for sale and rent At present, there are several small-scale developers of warehouses and factory buildings for sale and rent located in strategic areas for logistics business. This group of developers only target small to mid-sized businesses who are looking for low-cost warehouses for rent; therefore, these developers are not in direct competition with the Company.
2. Industrial Development Hub
• Business Strategy 1) Extend our Leadership as Thailand’s No 1 Industrial Estate The Company creates ultimate customer satisfaction by improvement of current products/services as well as introduction of new products/services. In additions, Hemaraj Group also develops industrial cluster in response with government policies targeting on high-value industries and customers from 10 Targeted Industries under Thailand 4.0 (First s-curve and New s-curve) by capitalizing on infrastructure investment particularly the transportation system in Eastern Economic Corridor such as high-speed train, U-Tapao airport etc. The Company also studies and considers the opportunity for co-investment or land acquisition strategies and the continuing growth sustainability plan. 2) Establish our premium brand in strategic countries with potential investment opportunities starting from Vietnam to other regional countries in order to diversify our portfolio The Company focuses on creating regional growth platform starting from ensuring the success of our first footstep in Vietnam, specifically Nghe An Projects in order to leverage on the experience in Vietnam and growing capability to expand into new locations. In additions, Hemaraj Group explores and considers other international expansion opportunities in other regional countries meeting required investment criteria such as locations, financial returns, tax incentives. 3) Move up to High-value add industries both domestic and CLMV countries Hemaraj Group searches for opportunities from government policies and international initiatives such as Eastern Economic Corridor Development Plan, Thailand 4.0 Strategic Plan, One Belt One Road Initiatives as well as explores potential partnerships or collaborations with EEC office, other related government authorities and educational institutions in response to market demand on leveraging from 10 targeted industries.
3. Utilities & Power Hub
• Business Strategy Utilities Business Strategy 1) Strategy of continuously develop new utilities plant and system in tandem with the new expansion of Industrial Estate This aims for providing utilities to the business who are customers of the Hemeraj’s Industrial Estate which will allows the Company to satisfy customer’s needs in full service solution. 2) Proactive Strategy in exploring into the utilities business outside the industrial estates WHAUP (Utilities & Power Hub) perceives the growing of needs in consumption of raw water, industrial used water and waste water management in other Industrial Estate other than Hemaraj’s industrial estate. The Company then has a plan to be a business alliance with other industry by focusing on their expertise and high experience in utilities business, ability control cost and to understand the needs of each industry in order to expand the business 3) Strategy to diversify products in order to satisfy the needs for existing customer and new customers The Group has planned to offer a more variety of product to the industrial water users to satisfy variety needs of the customers such as Recycled Water, Demineralized Water, Desalination System, etc.
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4) Strategy of service expansion to regional countries The Group plans to expand its utilities business to regional countries, especially to the countries with high demand in utilities usage. This can be seen in the CLMV group, which is the high potential countries for water usage and investible. Power Business Strategy 1) Strategy to joint venture with the leading power plant company The Group jointly invests with leading power plant in develop industrial power project to accommodate with power demand from industrial enterprises. Because of the pleasingly stable power supply is supply with the lower price comparing to power producers outside the industrial area. Moreover, the steam energy is also essential for production process for the industrial customer, therefore, there are lots of power plant projects emerges in the industrial area, particularly for the small power plant project or SPP Power plants consume large amount of water in their power production line, thus supporting the utilities business of the group, in which WHAUP would benefit from cash flow generated from utilities hub together with a more stable business operation. 2) Strategy to be an operator of renewable energy project WHA Group has large warehouse rooftop and industrial building rooftop of over 2 million square meters, which can be applied to solar rooftop energy project. Comprising with the Government policy that support an investment in solar energy power plant, the Company sees a high growth opportunity in renewable energy in the future. In additional to solar roof project, WHAUP also has a vision to expand its power plants into other sources of renewable energy, for example turning industrial waste into energy power plant. • Target Customers Industrial Development Hub and Utilities & Power Hub have similar customer base, mostly based in Industrial Estates. The two-business hubs are accommodating/complimenting one another in providing a fullservice business model. The two hubs are focused on International Clients who are looking to expand their investment tapping into Thailand. The majority of the clients are the Japanese manufacturers which has contributed to half of clients’ portfolio. Remaining clients consist of those from Europe, the USA and ASEAN (Singapore, Malaysia and Thai). Our clients come from various industrial clusters e.g. automotive, auto-parts, electronic, construction materials, metal casting, consumer products, logistic etc. As of year-end 2017, there were 719clients with total of 1,088 contracts in the industrial estate with the following client proportion in each industry:
Customer Profile by Industry Other, 15% Automotive, 34%
Logistics, 5% Electronic, 8% Construction material, 7% Steel, 9%
Consumer goods, 13% Petrochemicals, 9%
The amount of water usage (utilities) varies across industry in accordance with the production process and the product outcome. Energy Industry (electricity power producer) and Petrochemical Industry are the heaviest water consumption industries, as the fact can be seen in the table below: Type of Industry Electricity power producer Petrochemical Others/1
Average water consumption (cubic meter / rai / day) 80-120 40-60 4-7
Remark: 1/ Others consist of Automotive industry, Consumer product industry, Electronic industry etc. Source: The Company
• Industry Trend 1) Industrial Development Hub The key success factors in operating a decent industrial estate business is to develop a large piece of land plot, allowing for factories/warehouses to be allocated into cluster, in a uniform orderly manner. Together with providing all necessary infrastructure in accordance with standards of Industrial Estate Authority of Thailand (IEAT). Industrial estate could be divided as 3 types as follows 1. Industrial estate owned and managed by IEAT 2. Industrial estate owned and managed by private sector with contract of co-operation with IEAT 3. Industrial estate operated by private sector, normally known as “Industrial park” or “Industrial land” Currently, Industrial Estate Authority of Thailand had 56 operated industrial estates; 13 estates were operated independently and 43 estates were mutually operated with developers (Source : http://www.dpt.go.th) WHA Corporation Public Company Limited
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In order to deeply understand and able to analyze the industry trend of the industrial estates, it is important to take into consideration industrial trend of major industries which play a significant role in industrial estates i.e. automotive, plastic, petrochemicals and electronic parts, as well as, to consider on the foreign direct investment trend. Thailand was ranked 26th in the world and 3rd among Southeast Asia as the country with ease of doing business. Thailand is on a prime strategic location, together with many supporting factors promoting an investment in industrial estates, as a result, Thailand has continuously been bringing in foreign direct investment, which is a major business driver steering the growth of Thailand’s industrial estate. The overview of investment promotion application in 2017 could be summarized as follows; Investment Promotion Application in 2017 Number of Project
Investment (Million baht)
Promotion Application
1,456
641,980
Promotion Approval
1,677
625,080
Promotion Issuance
1,294
732,030
Source: http://www.boi.go.th
According to the figure of such investment promotion, the business obtaining investment promotion mostly was the business corresponds to the governmental supporting policy. BOI promotion is targeted at 10 new growth engine industries in accordance with the Eastern Economic Corridor (EEC), accounted for 61% of total approval projects (equivalent to 888 projects with investment fund of 391,608 million Baht) such as digital economy policy, international business collaboration policy and logistic system development policy. In 2017, the combined area of industrial estates in Thailand was approximately 166,063 Rais, which can be classified into salable area of 87,279 Rais equivalent to investment fund of THB 3,142,812 mm, remaining 20,508 Rais are remained to be sold/rented. The top industries situated in the industrial estates are automotive, logistic/transportation and steel & metals, respectively. Industrial estate land price is depended on the location, road network connection, infrastructure and near material source. Industrial estate land price in Bangkok was the most expensive due to being the center of transportation and near the port and international airport. The second and third were Samutprakan and Prachinburi, respectively. The reasons behind Samutprakan having a land price higher than other part of Thailand are mainly due to Sumutprakan’s location, with its close proximity to Bangkok and it is readily equipped with good transportation infrastructure. (Source: http://www.ieat.go.th/investment/about-industrial-estates/investment-status-in-industrial-estate)
The competition pressure of industrial estate industry is quite high from the growth of the new industrial estates and expansion of the existing industrial estates especially in the eastern side of Thailand. However, the aftermath of the great flood in 2011 caused for a continuous relocation of manufacturing base to the eastern seaboard area as it is close to Bangkok and Laemchabang Port and approx. 70-111 meter higher from sea level. 2) Utilities & Power Hub Utilities Thailand is among the top-ranking nation in Southeast Asia that is known to have high water consumption rate. Water consumption can be divided into 2 categories, based on the consumption purposes, i.e. 1) household consumption such as household usage and tourism 2) Industrial consumption such as industrial production line. Referring to strategic planning for water resources management, constituted by Committee of Water Resources Policy and Management, the Department of Groundwater Resources, having a forecast of household water consumption rate increased from 2014 to 2027 at a rate of 1.9% per annum and industrial water
consumption rate increased from 2014 to 2027 at a rate of 4.6% per annum. The main area segment which greatly contribute to the highest water consumption growth rate is the industrial area situated in Bangkok and its vicinity, including eastern part of Thailand which is known for the nation’s main industrial area. In other part of the country, industrial areas are scattered, mostly consist of agricultural products’ downstream business and typically are for domestic use.
Water consumption level in Thailand
mm m3 / year 20,000 15,000 10,000 5,000 0
4,206
4,807
6,490
6,757
2014
2017
Household consumption
6,042 7,348
2022
7,515 8,260
2027
Industrial consumption
Source : Strategic planning for water resource management 2015- 2026, Committee of Water Resources Policy and Management, Department of Groundwater Resource
Power Hub From the survey of Electricity Generating Authority of Thailand, it was found that the demand for electricity in Thailand has been increasing steadily. This is due to the nation’s economic growth and the growth of Thailand’s population. EGAT has consistently been providing a total electrical power production capacity higher than the peak demand for electricity. The peak demand for electricity is the highest amount of electricity consumed by consumers at any time of the day and at any day of the year. EGAT is maintaining the stability of the domestic electricity usage, while the peak demand for electricity is a major factor affecting the country’s electricity production and purchasing policies. The peak demand for electrical power in the first six months of 2016, was on 11 May 2016 at 22.28 pm at 29,619 Megawatts, which increased 2,273 Megawatts compared to the year 2015 or 8.31% increase. From the past statistics, it was found that the peak demand for electricity increased from 16,681 Megawatts in 2002 to 29,619 Megawatts in 2016, or a CAGR of 4.19%, while the electrical power production capacity increased from 23,755 Megawatts in 2002 to 43,623 Megawatts in 2015, or a CAGR of 4.79%.
4. Digital Platform Hub
• Business Strategy 1. Strengthen market share in the domestic market of digital platform services As the Company has commenced operations in all of the three main services: Data Centers, FTTx, and Managed services last year, the next step is to increase our presence of digital platform services in the domestic market. The Company plan to realize such goal by, besides providing a comprehensive IT solution services to customers, leveraging strong customer base of more than 1,000 customers that WHA Group has. In addition, the global trend of digital economy as well as the Thai government’s new economic initiative, Thailand 4.0, with an aim to transform Thailand into value-based economy will translate into higher demands for IT related services, which the Company has various of services to accommodate future needs. WHA Corporation Public Company Limited
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Another way that the Company aims to boost its market shares is to expand new product offerings. The existing platforms will allow the Company to create new products, reaching larger market demands and, hence, market shares. The new products that the Company studies and plans to launch in 2018 includes Cloud Solution services and IT Outsourcing services. With the completion of data center, the company can package product to better suit customer needs. For example, the Company can collaborate with existing System Integration (SI) companies to bring their IT infrastructure and Cloud services into the Company’s data center facilities to deliver the best services to their customers. The Company understands the dynamic nature of digital market and stays on guard for any changes in technologies (i.e. Modular Data Center, Big Data, and Internet of Things - IoT) in order to attract new market demand and supply. 2. Expand the digital infrastructure and solution along with the rapid movement of technology by offering to CLMV region In the meantime, the Company also plans to follow the footstep of other business hubs by expanding operations to international markets. The target locations under the Company’s radar being Cambodia, Laos, Myanmar, and Vietnam (CLMV) markets as studies have shown that such market has a high growth potential in digital platform services because the demand for IT related services outpace the available digital infrastructures. The oversea experiences and facilities from other business hubs will allow the digital platform hub to reduce some risks associating with oversea investments. 3. Implement digital platforms within WHA group to upgrade facilities and enhance business values The Company plans to implement digital platforms across other business hubs in order for these hubs to install new technologies such as automations and Internet of Things (IoT) into their infrastructures and facilities. These technologies will not only enhance operation efficiency, but also increase value of the assets by attracting innovation-prone industries. • Target Customer 1) Customers in WHA Group’s Core Business More than 1,000 customers in all main business hub of WHA Group. The Company expands to serve in digital platform which the company would focus to customer in group of medium and large business size such as Automotive Industry, Logistics Industry, Electronics Industry etc. in order to meet the increasing demand for digital services. . In addition, the trend of using the technology in the production process to enhance the customer’s business operation which it is rapid growth and technological change in this time. However, the government has promoted investment in the country by focusing to develop the Eastern Economic Corridor (EEC) has been promoted. The EEC has supported the investment in 10 target industries which is a business innovation and IT services is the necessary key for running a business. Therefore, the Company have continually improved our digital services capabilities in order to serve our target customers in the future. 2) Customers in WHA’s collaborative System Integration The Company plans to grow with its partners by providing a full range of support services such as the provision of data center services to its integrated System Integrator (SI), Managed Service and Business Process Outsourcing (BPO) customers. To provide full service to customers. This enables customers to efficiently manage their resources. 3) Customers in international country and CLMV market. The Company has realized to foresee the business opportunity growth in international country especially in Cambodia, Laos, Myanmar, Vietnam and Indonesia, which the company has started to invest building a warehouse and factory for rent in Indonesia. In addition, there are plans to further develop the industrial estates
in Vietnam, so the company foresee this opportunities to expand its digital services to cover the customer in these countries which they have high demand. Furthermore, the Company also provides networking as FTTx infrastructure for utilizing the existing customer to connect international linkage to international countries or CLMV countries. Product or Service Procurement
1. Logistics Hub
Land is the major cost of the Company’s business. The Company has set out the following policy on land acquisition: • Land Procurement The Company’s policy is to acquire land when needed rather than holding the land bank without development for long period of time. Land acquisition is made in accordance with the investment plan to match specific needs of customers (Built-to-Suit) and to reduce interest obligations incurred from acquisition and accumulation of a large number of lands with no potential projects. However, the Company may consider acquiring larger piece of land if the land is connected to the existing projects which can be developed for expansion for tenants who clearly express their interest in expansion of the leasable area in the future. The Company acquires land from the owners directly or by leasing land from the Company’s partners or by purchasing land through agents. In this respect, the Company usually selects land plots in at least two locations to allow the Company to have bargaining power and to acquire the land at the preferred location at a good price. The Company’s criteria for land acquisition are as follows: • Location of the land must be connected to a road network according the requirement and the need of tenants and it must be in a strategic location for logistics business near a port or in a zone entitled to privileges from the Board of Investment (BOI) which will also meet the need of other and new tenants once existing lease agreement expires. • Land price must not be too high for both freehold and leasehold land. Land must generate a competitive monthly lease for the Company. • Land must be of an appropriate size for first development as well as for expansion of future projects of tenants. It should also be flexible in terms of suitability for the need of new tenants. The Company’s land management team studies, analyze, retain and update land data so that the Company has data on location and land with potential for development of new projects and the Company can evaluate and set a strategy for acquisition and budget required accurately. Such data will be transferred to Finance Department for financial planning for the most appropriate and the most economical capital sourcing for land acquisition. Selection of Construction Contractor The Company divides selection of construction contractors into two categories based on type of projects as follows: 1. Contractor selection for Built-to-Suit project: The Group of the Companies sends an invitation to bid to construction companies and makes preliminary agreement on pricing before proposing the price to customers. However, not all decisions for selections are made by the Company. Tenants may want to select a construction company themselves or it has already been nominated.
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2. Contractor selection for Ready-Built Warehouse Project: The Company invites all bids from construction companies, negotiate and select construction companies based on the procedure and the criteria set out by the Company. Since the Company selects a contractor regularly, the process for contractor selection and the evaluation process has been established in the light of transparency, fairness and in accordance with a good corporate governance, details are as followed: Procedure for the selection of the construction company • Send out the requirement and the Terms of Reference (TOR) to construction companies listed in the pre-approved list. For new construction companies, their qualification and project history will be thoroughly verified. • Consider bidders’ proposal for both technical aspect and pricing aspect. • Make selection by the selection committee. • Enter into a contract with the selected construction company, most of which are turnkey contract, which includes project design, sourcing of construction materials and construction agreement. The construction agreement will clearly indicate labor cost and cost of raw materials. Criteria and policy for selecting construction company • The Company specifies and verifies construction companies in the pre-approved list while promoting fair, transparent and open competition by providing detailed requirements and scope of work in advance to at least two construction companies for bidding. • Factors used for consideration and selection of construction companies are past projects, quality upon hand over, construction time, offered price and after-sale service. • Selection of a construction company must be approved in accordance with the approval authority and the regulations of the Company. • Contracts are reviewed by an expert legal advisor. • There is a segregation of duties for contract execution, inspection for hand over and account recording. - Contracts will be executed by the authorized directors of the Company. - The Company’ construction management team is responsible for inspection for hand over. They will inspect completed projects and provide a monthly progress report to the management. Inspection for hand over includes quality inspection and progress inspection against the terms and conditions in the contract. - Finance & Accounting Department verifies all documents and makes a record and payment upon due as specified in the contract after the project management team has inspected and received the project. • The Company establishes guidelines for relevant units, for example, Guideline on Selection of Construction Companies, Operation Guideline for Project Management Team. All units must comply with the guidelines and the specified work process. • Environmental Impact The Company’ policy on construction of warehouse, distribution center and factory buildings is based on good practice and strict control with a focus on construction process that minimizes impact on the environment. The Company also promotes and encourages preservation and energy saving. Before the tenants commence their operation, the Company will glance at their credibility, company profile, products and financial statements. The Company also specifies in the lease agreement entered between the Company and a tenant who
stores hazardous substances that the tenant must strictly comply with the regulations on environment preservation so that the Company’s business does not have negative impact on the environment. Based on such practice, the Company has never breached any environmental law or had any environmental dispute.
2. Industrial Development Hub
Land is the major cost for the industrial estate development. The Company has set up land procurement policy, details are as followed: • Land Procurement Hemaraj Group purchase lands from local owners directly or from allies of by considering from the location of the project with connection to a road network, near a port or in a zone entitled to privileges from the Board of Investment (BOI) with affordable term condition. Land price must not be too high in order to develop in industrial estate and sell off the clients with sufficient profit margin and to be competitive in the market. Additionally, land must be accumulated into a large land plot in order to gain the benefit from economy of scale. The project must be a nearby water source to drain wastewater and the land size shall be appropriate for development. Land soil is another crucial factor, it must have adequent strength to support the fundamental work of the structural buildings. • Environmental Impact Hemaraj industrial estate provides wastewater treatment system, waste disposal system and public utility system with standard in accordance with the specification defined by Industrial Estate Authority of Thailand and approved by Office of Natural Resources and Environmental Policy and Planning. Hemaraj industrial estates have been complied with all relevant laws and regulations.
3. Utilities & Power Hub
Raw water and fuel for electricity generation are vital raw materials for business of utility & power hub. WHAUP Group pays high attention to its procurement of the raw materials, in which the policy has been set up as follows: • Raw Water Procurement WHAUP is the exclusive operation on the utility business in Hemaraj’s Industrial Estates. One of the key success factor in operating the utility business is to have access to sufficient raw water source to supply to all enterprises inside the industrial estates. As well as, to have adequate capability of supplying clarified water to cater for the water demand in the industrial estates. Three main raw water sources are described as follows: (1) Eastern Water Resources Development and Management Public Company Limited (“EASTW”) has been granted with concession to supply raw water in the Eastern part of Thailand, covering Chonburi, Rayong and Chachoengsao provinces. (2) Royal Irrigation Department Hemaraj Saraburi Industrial Land Co., Ltd., a subsidiary of Hemeraj Group, has been purchasing raw water directly from the Royal Irrigation Department. (3) Hemaraj Group such as water reservoir in Hemeraj’s industrial estate, of which is built in prevention of water shortage event, to drain of water from the industrial estate, as well as to prevent the sites from flooding. • Fuel Procurement WHAUP is operating in the power business, thru joint venture with our business alliances, with an objective to operate Conventional Fuel Power Plant and Alternative Fuel Power Plant. The fuel use for electricity generation can be categorized into 2 categories, details as followed: WHA Corporation Public Company Limited
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(1) Commercial Fuel • Coal WHAUP has entered into a Coal Supply and Transport Agreements with Indonesia large conglomerate business partner to supply Bituminous coal to Gheco-I power plant as its raw material for electricity generation, in accordance with power purchase agreement. • Natural Gas WHAUP has entered into a 25-years purchasing agreements with PTT for the supply of natural gas to Glow IPP, GJP NLL and BCE power plants. (2) Non-commercial Fuel • Water Water is a raw material for hydro power plant. WHAUP obtains water from the natural source, a cost-free procurement process. Nevertheless, quantity of water acquired may throughout the year according to weather pattern and the change in seasons. • Solar Solar is another source of alternative or renewable energy. It is the main source of energy for solar farm power plant, with a main advantage that it is a free source of energy. Nevertheless, quantity of solar obtained may vary in accordance with seasons and weather pattern.
• Environmental Impact WHAUP pays close attention to environmental impact from the process of clarified and waste water treatment. The by-products of such activities include precipitation and waste water disposal. WHAUP is strictly adhered to its code of conduct and to be compliance with all relevant laws and regulations, in order to control and to protect its by-products from causing a damage to the environment. The following describes the steps of control taken to protect our environment: (1) Precipitation WHAUP hires a licensed waste disposal enterprise to dispose such waste by means of landfill. (2) Waste water disposal waste water is thoroughly inspected for quality qualified for disposal in accordance with Office of Natural Resources and Environmental Policy and Planning. Moreover, Hemeraj Group has installed an innovated equipment for quantifying the quality of waste water i.e. Online Monitoring System (EMC2 system), in order for the staff to closely monitor the quality of water prior to its disposal. WHAUP has been certified with ISO 14000:2004 on environmental preservation. WHAUP is strictly adhered to its code-of-conduct on the environmental preservation act. Thus, WHAUP has never once been filed a complaint nor having any litigation in relation to the environmental impact.
Backlog Projects
1. Logistics Hub
As of 31 December 2017, the Group of Companies has the following projects under construction Location
1
Bangna Trad KM 23
Leasable Company area (sq.m.)
Company
20,938
Project Status
Project Progress (% of Completion)
Expected completion and revenue recognition
Under development
7%
Q2 2018
2. Industrial Development Hub
As of 31 December2017, the Group of Companies has pending projects to deliver in industrial estates and logistic park in 11 location totaling 306 rais. Location
Company
Industrial Estate Co., Ltd.
7.3
Complete
100%
2018
2
Hemaraj Eastern Seaboard Industrial Estate
Hemaraj Eastern Seaboard Industrial Estate Co., Ltd.
12.3
Complete
100%
2018
3
Industrial Promotional Zone: Hemaraj Eastern Seaboard Industrial Estate 4 / WHA EASTERN SEABOARD NGD 4 .
Hemaraj Land and Development Plc.
1.7
Complete
100%
2018
4
Hemaraj Eastern Seaboard Industrial Estate 2 / WANDA NEW MATERIAL CO.,LTD.
Hemaraj Land and Development Plc.
159.1
Complete
100%
2018
5
Eastern Eastern Seaboard Seaboard Industrial Estate / LLIT Industrial (THAILAND) CO.,LTD. Estate Co., Ltd.
125.7
Complete
100%
2018
3. Utilities & Power Hub
4. Digital Platform Hub
Project Status
Expected completion and revenue recognition
Hemaraj Eastern Industrial Estate (Map Ta Phut) / SUPER CHEMICAL SIAM CO.,LTD.
1
Area (rai)
Project Progress (% of Completion)
-None-
-None-
WHA Corporation Public Company Limited
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[ Corporate Information ]
Risk Factors 1.
Overall Risks from Business Operation
1.1 Risks from Changes in Economy, Domestic Politics, and other Macro Environment Factors
1.2 Risks from Interest Rate Fluctuations
As many of the Company’s clients are transnational companies, the economic changes in both the national level and the global level have an effect on the Company’s clients and revenue. For example, the global financial crisis or the global economic recession from 2010 to 2011 might cause the clients to lower the production rate or to delay the investment plan in foreign countries. The establishment of the ASEAN Economic Community (AEC) in 2015, which is intended to facilitate free movement of capital and labor, might encourage the current and target clients to relocate the production base and investment to another country where they can have better competitive advantages. The political uncertainties such as the political turmoil in 2010 and 2013 might have a negative impact on the image of the country and the interest and confidence of the clients to make investment. In addition, the frequent changes in the government or the working groups concerned, resulting in the discontinuity and uncertainty in terms of public policies, might have adverse effects on the Company, especially the policies relating to the investment promotion and the development of industrial areas. Nevertheless, Thailand remains attractive to the foreign investors who want to invest in South East Asia due to the better labor quality and the acceptable wage rate in comparison to those in European countries, the United States, and other Asian countries. Moreover, the infrastructures particularly the public utilities in Thailand are better. In addition, Thai Government has supporting policies on Eastern Economic Corridor (EEC); thus, the overall investment in Thailand has been able to grow. Meanwhile, the economic uncertainties have had favorable effects on the Company because, in such circumstances, most companies decided to lease or outsource the businesses that are not the core activities of the companies in order to cut the operational costs. Even in the time of economic and political uncertainties, the Company has grown continuously as can be seen from the expansion of the revenue base whereby the Company does not have to rely on any business too much; the constant revenue from the rental service and the utility service, which helps balance the revenue structure; the significant increase in the number of clients in all 9 industrial estates and industrial zones; and the investment in industrial estate projects for niche markets, which helps reduce the risks. The business operation of the Company requires high investment. The long-term loans from financial institutions at the end of 2015, 2016 and 2017 are approximately THB 9,227.9 mm, THB 7,929.9 mm and THB 3,936.9 mm, respectively. Some of the loans are subject to a floating interest rate. Therefore, if the interest rate in the market increases, the Company would have to pay higher amount of interests, resulting in a decrease in the Company’s profit. However, the interest rates of most of the loans from financial institutions are currently below the Minimum Lending Rate (MLR) determines by each institution. In addition, the financing plan for project development of the Company does not rely solely on the loans from financial institutions as the Company also has other financial sources, especially through the stock market and the sale of assets in mutual funds and trust funds, which would be the key financial sources for the future investments. The Company is listed on the Stock Exchange of Thailand so it is able to raise funds from the capital market. In 2015, 2016 and 2017, the Group of Companies issued debentures worth THB 3.20 billion, THB 6.26 billion and THB 6.70 billion, respectively, with fixed interest rates to lower the risk from the interest rate fluctuation. However, in order to lower the interest rate while maintaining the
risk at the acceptable level, the Company adopted the Interest Rate Swap measure to change the interest rate of some debentures worth THB 8.78 billion to a floating interest rate for certain periods of time while maintaining the fixed interest rates of the remaining debentures worth THB 19.55 billion. This is in order to reduce the risk from interest rate fluctuations and create a balance between the fixed interest rate and the floating interest rate.
1.3 Risk from Investment in Future Projects
The Company plans on investment expansion continuously inside and outside industrial estates, industrial land and both domestically and overseas. It is common that there are risks involved in any development and investment plan of new projects might turn out differently from initial estimation, objective plans or expected return (for examples, delays due to factory construction progress, resource allocation and risk from fluctuation in exchange rate and interest rate, etc.). These situations possibly cause notable consequences to business operation and financial circumstances for the Group of Companies. To minimize the risks, the Company carefully considers investment projects that have potential in rewarding equity internal rate of return at appropriate levels and perform feasibility study to foresee possibilities of project as well as sensitivity analysis thoroughly and for joint venture cases, the Company’s policy is to consider partnership very carefully by evaluating from potential partner’s knowledge, ability, experiences, expertise, financial status and historical performance.
2.
Risk from Property Investment, Development, and Management Business
2.1 Risk from Competition from Industrial Estate Developers and Other Developers
Currently, the industrial estate developers and other developers are constructing factories and warehouses for rent like the Company. However, most of them are selling and leasing ready-built factories and warehouses and providing service in their own industrial estates, whereas the Company is focusing on the builtto-suit scheme, which is the development of premium-quality projects that require sophisticated designs to respond the needs of each client. In addition, the Company is using its expertise in the built-to-suit design to develop a project under the concept of the Warehouse Farm. The Company is currently providing the built-to-suit design service and construction to serve the needs of certain clients such as those who want to preserve a part of the land for future expansion; and the ready-built warehouses for prompt response to new clients. The Company’s main policy is to find the location that is favorable in terms of transportation and distribution in accordance with the client’s need. As you can see, the Company is able to satisfy the clients differently from the competitors in the same market. At present, there are few high-quality built-to-suit providers due to the high barrier of entry and difficulty to succeed. This service requires the expertise and detail orientation to understand the complicated requirements of each client, a lot of investment, and the knowledge and understanding about locations and in the procurement of and investment in land in accordance with the requirements of each client. The expertise and flexibility as well as the patience to conduct the product design to achieve the utmost benefit of the clients are also important. Also, the achievements in the past of the Company make the Company more credible to the lessees, who are mostly transnational companies with high standard of selection criteria. In addition, the Company has a policy to promote the continuous learning development and continuously improve the quality of the warehouses and services.
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2.2 Risk of No Tenant in the Developing Projects and Risk of No Renewal in the Existing Projects
The Company’s rental business includes the Built-to-Suit service, in which a contract is signed prior to the construction, and the Ready-Built service. For the Built-to-Suit service, a lease agreement is signed prior to the construction. Therefore, the occupancy risk is low and most of the tenants are likely to renew the contract as the agreements between the Company and the tenants start with finding the locations and the Company focuses on the design, construction, and service to ensure the maximum benefits for the clients and the maximum satisfaction and confidence in the Company. Moreover, the cost of relocation is rather high, therefore, the risk that the main tenants would not renew the lease term is low. At the end of 2017, most of the tenants (such as Central Group, Thaibev Group, and Nissan Motor Group) not only renewed the contracts, but also agreed to lease additional areas with the Company. Most of them started doing business with the Company by leasing Ready-Built warehouses and subsequently leased Built-To-Suit warehouses. Moreover, when a tenant decides not to renew the lease term, the Company is able to provide the Built-to-Suit factory or warehouse to a new tenant by modifying the property in accordance with the new tenant’s need. With the advantages in terms of location, quality of construction and work system, and understanding and in-depth knowledge in the design and construction management, the Company is confident that it would be able to obtain a new tenant within the appropriate period of time. In addition, the Company would have sufficient time to seek new tenant as the lease agreement requires the existing tenant to notify its decision at least 3-12 months in advance. For the Ready-Built Warehouses/Factories, there might be risk of unoccupancy because the projects are developed the lease agreement is signed. Nevertheless, the Company has developed such leasable area in order to serve the clients who want the properties immediately as well as to ensure the appropriate construction cost management and the utilization of land. Unless being severely affected by the external environment factors, the Ready-Built clients would renew the contracts because of the quality of the properties which are satisfying and acceptable to the clients. In case a tenant doesn’t renew the contract, the Company is flexible to find a new tenant. The Company focuses on the location of the projects, which makes the Company confident in finding new tenants promptly. The Company also focuses on the design and quality of the structure of the projects and maintains the high standard, resulting in high interest from the prospective tenants.
2.3 Risks on Overdue Rental Payment under Lease Agreements
2.4 Risk from the Reliance on Few Contractors
The risk arising from overdue rental payment under lease agreements may arise in case clients suffer from the economic and industry downturn or their business operation that affects their financial status and, thus, their ability to pay rent. The Company may be affected by a drop in rental revenue as it has an effect on the financial liquidity. However, the Company foresees that the impact will be minimal because the key clients are leading and reliable companies with high financial stability. Moreover, the Company requires tenants to place cash deposit and/or a bank guarantee as security against payment of rental and service fee. It’s stipulated in the lease agreements for Built-to-Suit projects that in the event of early termination by the tenants, the tenants must pay the compensation of the amount equal to the total rental charges for the remaining period. The core business of the Company includes developing projects for rent and sale, whereby the Company would hire contractors under turnkey contracts for the construction in accordance with the designs agreed by the clients. The Company has a process of selecting well-known contractors having the qualifications specified by the
Company and putting them in the short list. However, B.S.Y. Construction Co., Ltd. is the contractor that won the auctions for almost every project, especially the Ready-Built one. The contractor possesses the qualification according to the selection criteria in terms of the quality, construction cost, expertise, experience and capability to deliver the projects on time as well as after sale service. For the Built-to-Suit projects, the tenants are also involved in the contractor selection process. Therefore, the Company is having the risk of relying on B.S.Y. Construction Co., Ltd. for the development of the Company’ projects. However, the Company does not have a policy to hire only B.S.Y. Construction Co., Ltd. and always seek cooperation with other contractors of high standard. The process to select contractors is carried out in a systematic and transparent manner through the bidding process, except the Built-to-Suit projects, in which the clients or the existing clients would specify the contractor. The Company’s business is made up with different elements, for example, the source of funds, expertise in selecting locations, design and layout planning, and good relationship with clients. It’s the capability of the Company to develop high quality projects without depending on a single contractor. The Company integrates the elements and builds a close cooperation with the clients, contractors and state agencies concerned. B.S.Y. Construction Co., Ltd. has engaged in the construction business and been widely recognized in the market for more than 20 years. It does not intend to engage in the same business as that of the Company. In addition, the executive members of B.S.Y. Construction Co., Ltd. are not related to those of the Company. The Company regards it as a good business partner. In addition, the Company has signed a Memorandum of Understanding (MOU) with B.S.Y. Construction Co., Ltd. on 22 March 2012 to determine the collaboration between the two parties by specifying the framework of product development in terms of quality and price with the intention to allow the clients to efficiently compete with their competitors. Such agreement also entails the application of knowledge in the development of products, technical data and/or relevant know-how that are beneficial for the construction of warehouses, distribution centers, or factories, which have been registered to the joint ownership of the Company and B.S.Y. Construction Co., Ltd. Moreover, B.S.Y. Construction Co., Ltd. has agreed to bid in a Built-to-Suit project upon the request from the Company. B.S.Y. Construction Co., Ltd. has also agreed not to disclose the technical data and knowledge developed with the Company, or to use it in the projects of the Company’s competitors, or to agree on a similar agreement with the Company competitors without consent from the Company. On the other hand, the Company does not have the obligation to hire a specific contractor. Therefore, the Company may hire any contractors apart from B.S.Y. Contractor Co., Ltd. The Company, thus, may work with other contractors by applying the jointlydeveloped knowledge in accordance with the standard determined by the Company to ensure the maximum benefits for the Company and the tenants without breaching any provisions in the MOU.
2.5 Risk from the Land Procurement Policy for the Development of Future Projects
The Company has a land procurement policy focusing on procuring the land that have potential and could be developed immediately or in the near future. Therefore, the Company does not a have policy to purchase land without development plans or if it’s uncertain whether there would be tenants or not. However, due to the higher competition in the land acquisition in good locations, the Company has the risk of higher land price and, as a result, being unable to purchase the land in good locations at the desired prices. The Company may have to bear the higher cost of project development or may have to abandon the investment plan because the return on the investment may be in accordance with the criteria specified by the Company. However, the Company has prepared a land survey and purchasing plan in accordance with the project development plan. The Company considers that purchasing many pieces of land without a development plan or pending tenant does not correspond to the business plan of the Company because it might affect the financial liquidity of the Company. Therefore, the Company ensures that the land acquisition is in accordance with its WHA Corporation Public Company Limited
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business plan and that the land to be purchased must be able to be developed immediately or in the foreseeable future or have been selected by the clients for future expansion of clients’ projects. The Company also has a policy to invest in leasehold land for some locations, taking into account of the possible return on investment. Such policies allow the Company to acquire the land with potentials with the agreement from the clients, which is better than the policy of other companies to collect land beforehand. They also allow the Company to efficiently respond to the clients’ need to expand the projects and to control the land costs to be at the appropriate level.
2.6 Risk of revenue fluctuation from selling properties to property fund/ REIT for property investment purposes.
The Company’s main sources of income are property rental, services and sales of properties. Income from properties sales is mainly sales to REIT which required approval from REIT’s unit holders. In addition, the Companies is a unit holder with no right to vote as the Company is considered a related party on this behalf. Therefore, any year that the Company does not have any property sales activity to a REIT or property sales plan is delayed, total income and profit can be fluctuated. During 2015, 2016 and 2017, the Company recorded income from sales of properties to REITs and/ or property funds accounted for THB 4,502 mm, THB 10,425 mm and THB 2,875 mm, respectively. (During 2016, the Company has set up a new investment trust namely, Hemaraj Leasehold Real Estate Investment Trust “HRIET”) There is indeed possibility of risks for the Company selling of properties to REIT. However, an advantage of REIT over property fund is that REIT allow a maximum loan at 35% of total asset value or 60% of total asset value, if a REIT is considered an Investment Grade from credit rating. Therefore, fund raising from unit holder can be reduced resulted in REIT having lower cost of fund than property fund. On the other hand, this makes the Company sell a property at higher price and gain higher gross profit margin compared to selling that property to a property fund and helps the Company to reduce the risk of fund raising from unit holders. As mentioned, a REIT consequently generates additional return of equity and be able to improve the REIT’s size more than a property fund’s which will resulted in REIT having more liquidity and has better price in secondary market. The Company expects continuation of selling more properties to REIT. Moreover, the Company will consider selling properties to other potential parties such as tenants of existing projects or other investors, etc.
2.7 Risk from the Competition with the Fund and REIT
2.8 Risk from the Expansion to the Office Building Leasing Business
The main revenue of the Fund and REIT derives from the lease of properties in which the Fund and REIT invested, which are similar to those developed by the Company. The Company is responsible for the lease management of those properties. Therefore, there is a risk of the conflict of interest between the Company and the Fund or REIT. In the case that both the Company and the Fund or REIT have vacant areas that are located in nearby location and meet the tenants’ requirements at the same time, the prospect clients regularly make decisions based on their own criteria, for example, the location, size, specifications, and timeframe. Moreover, the possibility that the existing tenants for Built-to-Suit properties not renewing the lease term is rather low because those lease terms are long-term agreements, and the tenants have invested in the installation of equipment and local labor, resulting in high relocation cost. The competition between the Company and the Fund or REIT, if any, will be transparent on the armlength basis. The management team of the Company, in the capacity of both the property developers and the property manager of the Fund and REIT, has the intention to ensure that the Company, the Fund, and REIT would grow together sustainably. The Company has expanded its scope of businesses to the rental of office buildings. The first project is the construction of a building on Bang-Na Trad Road according to the client’s requirement, and the second
one is the purchase of the SJ Infinite I office building (previously Equinox). The Company intends to increase the proportion of recurring income and alleviate the risk of relying on a single business. However, the purchase of the SJ Infinite I building has affected the Company’s financial situation and created a short-term risk because it’s a new building so the Company is receiving small amount of incomes from the tenants who have moved in while bearing the costs and expenses that have incurred since the date of the acquisition of the building, for example, the depreciation cost, which must be recognized in the accounting in full. In addition, there is a risk that the tenants would relocate to other places as there is huge supply of office buildings in Vibhavadi area. However, the office building market in Vibhavadi area has improved continuously due to the substantial demand. Meanwhile, the supply of high quality office buildings is insufficient. Some of the prospect tenants are those looking for more spaces as there is not vacant unit in their existing buildings. The SJ Infinite I building has become an interesting option for the companies that are planning to relocate their offices to a place with similar rental rate because it’s new and the rental rate is negotiable. This is resulting in an improvement of the occupancy rates of SJ Infinite I building, which were 70%, 87%1 and 88% at the end of 2015, 2016 and 2017, respectively. In addition, in November 2015, the Company sold the building to WHABT, which has recently been established to invest in commercial projects, whereby the Company is holding 15 percent of the WHABT’s shares. Such transfer of business helps reduce the risks and increase the liquidity and the proportion of incurring income of the Company.
2.9 Risk from Natural Disasters and Accidents
Natural disasters and accidents may cause damage to the Company’s properties and loss of life and properties of the staff working at the Company’s projects. Most of the Company’s projects are leased to the companies that have to store the goods that could be damaged by floods such as drug, medical equipment, and consumer goods. Therefore, the tenants or clients of the Company could be significantly affected by natural disasters, especially floods. The Company is aware of the possibility of such risks, which is why it puts great attention on the selection of location and the proper security system. The road in every project is approximately 30-50 cm higher than the public road in front of the projects or the highest water level during the floods in the past 30 years in the locality (whichever is higher). Moreover, the building in every project is raised approximately 0.8-1.5 m higher than the road and a flood barrier with the height of 2 meters from the building floor can be built at every building. None of the Company’s projects suffered severe damage from the flood disaster in October 2011 including the warehouses in the Bangpa-In Industrial Estate in Ayutthaya, which was severely damaged by the flood. The damage assessment report reflects that there was no substantial damage to the properties and no loss of rental revenue as the tenants continued to pay rents and didn’t express an intention to relocate the warehouses or terminate the contracts. The projects for rent of the Company are scattered in different locations so the risks from location are diversified. Nevertheless, the Company has applied for all-risk insurance covering all kinds of damage caused by natural disaster and accidents for every project. After the 2011 flood, the insurance company has determined the limit of the compensation for damage caused by flood for each project based on the project’s location. As a result, the Company would be responsible for any repair costs of the damage caused by flood if the value of the damage exceeds the compensation limit determined by the insurance company. However, the Company is confident that it has proper plans and preventive measures to deal with floods. Therefore, there is little chance that the damage from floods in any projects would exceed the compensation limit.
1
Including the rented and served units in the office area and the retail shop area WHA Corporation Public Company Limited
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3.
Risk from the Industrial Estate Development Business
3.1 Risk from the Reliance on the Clients in Automotive and Petrochemical Industries
3.2 Risk from Floods
The Company bears risk from relying on the clients in automotive and petrochemical industrial groups. Among 719 clients of the Company, there are 310 companies, or 43 percent, which operating in the industrial group of petrochemical (65) and automotive (245). If this group of clients decide to decrease or delay investment, the sale of land and other related revenue may be affected. The Company is aware of the risks and effects resulting from such factor and has developed the marketing plan to penetrate diverse target groups apart from the automotive and petrochemical industries so that it doesn’t have to rely on a single industry. Each of the nine industrial estates and industrial zones of the Company targets different groups of clients such as electronics, energy, steel, construction materials, logistics, and food. The Company has also regularly monitored and analyzed the proportion of the investment in different industries in the country before adjusting the strategies accordingly. In addition, the Eastern Economic Corridor (EEC), which plays an important role under Thailand 4.0 roadmap by upgrading the eastern corridor to become “World-Class Economic Zone”, showed significant progress in 2017. EEC is anticipated to attract investments for super cluster and the 10 target industries that spread across different industries. As a result, the Company is expected to be a beneficiary of such development from having large availability of sellable lands in both developed and developing industrial estates, which are located in the EEC areas. Combining such benefit with the expansion to develop an industrial estate in Vietnam, the Company will be able to enhance business opportunities and also diversify customer concentration. The floods in many areas of the country, especially the one during the rainy season in 2011, have caused damage to many business sectors and undermined the confidence of the prospective investors and the existing investors planning to expand their businesses in the same areas. The investors have become more selective in choosing a project location to minimize the risks from flooding. In selecting a new location, the Company takes into account various factors, namely the readiness of the infrastructure, size, and risks form flooding. Currently, the Company has eight projects in the industrial estates and industrial zones in the Eastern Region of the country of the Eastern Seaboard. They are located in high-ground areas and close to public water sources. Therefore, they are prevented from being flooded and there are retention ponds for the water discharged from the projects. The Hemaraj Saraburi Industrial Zone is located in central region’s river basin and faced with the risk of flooding from the overflowing from the northern region and heavy rainfall. Aware of the risk, the Company assigned specialists to study the geological characteristics of the surrounding area and develop a simulation model based on the historical rainfall data to see whether the existing flood prevention system was efficient or not. Moreover, the Company improved the earth dykes to prevent flooding, expanded the drainage system in the bottleneck spots, improved the pumping system in the retention ponds to drain excess water from the industrial land, and regularly inspected and performed maintenance on all systems, tools, and machines to ensure that they can function properly at all times. Due to the constant internal and external changes, the Company carried out inspection and assessment of the areas in the industrial estates and industrial zones before and after the rainy season to ensure the functionality of all systems. In addition, the Company developed measures to prevent unexpected incidents from rain storm with the 24-hour emergency response team.
3.3 Risk from Drought
3.4 Risk from Accident, Fire, and Chemical Spill
In 2015, many provinces were faced with the risk from draught including Saraburi, in which an industrial zone of the Company is located. However, the public sector, the private sector, and the Company developed mitigating measures which have been continuously implemented to assure the investors that there would be sufficient water and preventive measures for the Company’s projects, including those having been operating and those being expedited. Moreover, the industrial estates and industrial zones located in the Eastern Seaboard are situated close to large reservoirs, namely Dokkrai Resevoir, Nong Pla Lai Reservoir, and Khlong Yai Resevoir with the maximum capacity of up to 275 million cubic meters in total. However, in order to ensure adequate water supply to support future demand, East Water Public Company Limited has already set up water plumbing network to draw water from Prasae Reservoir to Khlong Yai Resevoir and Nong Pla Lai Reservoir, resulting in the stability and security in terms of water supply in the Eastern Thailand. The Company also places importance on the risks from accidents such as fire, chemical spills, and road accident in the industrial estates and industrial zones. The Company has installed the fire extinguishing system in compliance with the National Fire Protection Agency (NFPA)’s standard to cover the entire area of the projects and provided fire trucks and necessary equipment as well as trained security staff to be stationed at every project 24 hours a day. Moreover, the Company has prepared the emergency response plan to ensure prompt response in emergency situation, whereby the project staff would receive regular trainings from local entrepreneurs and state agencies, ensuring the readiness and effectiveness in emergency situation in order to minimize the damage and loss.
4.
Risk from Power and Utility Business
4.1 Risk relating to customer concentration
4.2 Risk relating to reliance on the major suppliers for raw water procurement
As the main group of the Company’s core customers in the water business mainly consist of operators in petrochemical business, power generation business and automobile business in industrial estates and industrial lands, accounting for 42 percent., 20 percent. and 11 percent., respectively, of the Company’s total revenue from the water business for 2017. In addition, the 10 largest customers of the Company mainly consist of operators in the petrochemical business and power generation business, accounting for 54.2 percent. and 54.4 percent. of the Company’s total revenue for 2016 and 2017, respectively. A decline or slowdown in the business expansion or investment conditions of these industrial sectors and large customers may reduce their demand for water services and other public utilities which may materially affect the results of operations of the Company. The Company realizes the risk and consequences from that Factor. In order to pull down the risk 1) the Company monitors customer’s water usage closely 2) Queries and revise water usage plan for those customers consistently and 3) to sustainably reduce the possible consequences, the Company set policies and operating plans to offer more variety of products to better serve customer demand such as specific industrial water or reverse osmosis (RO) to focus on more groups of customers as well as plan for customers outside the industrial estates such as sub-district administrative organization, etc. in the important economic area. The Group of Companies operates its utility service business by producing and distributing industrial water to operators in industrial estates and industrial lands in which the raw water is the key raw material for its operation. The cost of raw water represented approximately 65 percent. of the total cost. Currently, the Company mainly procures raw water from three (3) major suppliers, i.e. (1) Eastern Water Resources Development and Management WHA Corporation Public Company Limited
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Public Company Limited (East Water) which is a large concessionaire granted by the Royal Irrigation Department (RID) having service area in Chonburi, Rayong and Chachoengsao provinces, (2) RID and (3) the Hemaraj Group (from Hemaraj Group’s internal reservoir of natural water) and their supply volume accounts for 80 percent, 10 percent and 10 percent of the total sources of raw water for the year 2016, respectively. Further, the Hemaraj Group acted as an intermediary for East Water and RID in the Company’s water procurement process. However, the Company is able to directly procure raw water from East Water and RID. If East Water, RID or the Hemaraj Group is unable to supply raw water to the Company in the quantity required and at the agreed time, due to raw water supply shortage or significantly increases in the selling price of raw water, this may have a material adverse effect on the Company’s financial condition, results of operations and prospects. In the past decade, the Company has planned to reduce risks of having few major suppliers of raw water and/or distributors of raw water by 1) the Company keeps updates on natural raw water resources and plan to build water reservoirs in some industrial estates as appropriate 2) plans to explore natural raw water resources in addition to the resources currently use 3) plans for recycled water system 4) the Company also follows up and coordinates with customers constantly to promptly plan for sufficient water usage and distribution as well as coordinates with raw water distributors and find protection and modification solutions constantly. With those mention preventive measures that have been performed, the Company is confidence that there is sufficient and quality raw water resources for water supply business
4.3 Risk relating to the deterioration and damage of the water production and distribution System
The Group of Company’s industrial water production and distribution system and wastewater treatment system may deteriorate in a usage life or be damaged during the course of operations, and if the repair is not completed in a timely manner, this may directly obstruct the production and distribution process of industrial water or interrupt the wastewater treatment system. In addition to impacting the Company’s profitability and cash flow, this may cause the Company fails to fulfill its obligations under the Right Lease Agreement with the Hemaraj Group and agreements with Company’s customers and may therefore also materially affect the Company’s results of operations. To reduce the mentioned risk, the Company keeps checking on all systems constantly and arranges maintenance plans of water providing and distribution system for industrial purposes appropriately. The purpose of maintenance plan is to focus on maintenance of dilapidated or damaged parts and increase performances for effective usage of water providing and distribution system for industrial purposes. In case when it is needed to temporary halt water providing and distribution system for repair and maintenance, the Company will inform customers in industrial estates beforehand and arrange spare water resources until the main water providing & distribution system will be completely fixed. Apart from this, the Company also prepares property insurance with insurance companies to responsible any damage of any circumstance.
4.4 Risk from the Investment in the Independent Power Producer (IPP)
The Company has invested in Independent Power Producers (IPP), namely Gheco-One Company Limited and the companies under Glow Energy Group, in accordance with the Company’s strategy to expand the revenue base to other businesses with reasonable and consistent return. There are risks that could produce substantial adverse effects and damage on the projects and the Company, which are the risk from investment, the risk from changes of rules, regulations, and government policies, the risk from the delay in construction, the financing risk, the environmental risk, the risk from insufficient raw materials, the risk from consistent and continuous operation, the risk the complete reliance on the Electricity Generating Authority of Thailand, and the risk from exchange rates and interest rates. The Company is aware of such risks and, therefore, conducts a study on the pros and cons and the feasibility of the project and the sensitivity analysis to consider all kinds of risks. The Company also evaluates the
return rate of the project and found that the Company would receive constant and continuous long-term return if the project is operated continuously. The project is developed and managed by Glow Energy Co., Ltd., of which the executive team is highly knowledgeable, experienced, and successful in the management of several power plants in Thailand. The project is supported by the major shareholder of Glow Energy, which is ENGIE company (former GDF Suez), one of the world’s leading companies in the energy business. In addition, Gheco-One signed the contract to prevent the foreign exchange rate swap and the interest swap, the contract to purchase coal in advance, and other contracts in order to ensure the accordance between the revenue, expenditure, loans, and interest rates that come in different currencies.
4.5 Risk from subsidiaries’ and associates companies’ power plants not be able to generate or distribute electricity, steam and cold water, might cause significant negative effect to business, financial status, income and cash flow.
Income from electricity related business of company’s subsidiaries and associates companies depends on the ability to generate or distribute electricity, steam and cold water of those companies to customers. Possible situations that may cause company’s subsidiaries and associates companies be unable to distribute electricity to customers and other circumstances includes (a) delays and inability of expected power plant operations that are under construction or planned (b) damages or crashes of electricity generation devices (c) planned and unplanned halt of operation including normal maintenance and major maintenance performing by outsources or delays of those maintenances (d) defects of device and power plant construction and design which can cause the planned ability of electricity distribution of company’s subsidiaries and associates companies (e) problem related to quality or lack in resource allocation including coal, , natural gas, water and sunlight and (f) human error including error of users of any device, etc. If the mentioned risks or similar risks occur, it can possibly affect negatively to the ability of generating and distributing electricity, steam and cold water of company’s subsidiaries and associates companies and can significantly affect business, financial status, profit and cash flow of company negatively. To reduce the mentioned risks, the Company policy is to prudently choose partners by considering possible partners’ knowledge, ability, experience, expertise, financial status and historical performance. For example, Glow Energy Public Company Limited, Gulf Energy Development Company Limited, B.Grimm Power Public Company Limited and Gunkul Engineering Public Company Limited, which has management team with expertise and succeed from power plant operations in Thailand. The Companies also appoints management committee for associate companies to report performances of each power plant on quarterly basis. If there is any sign that the mentioned risks may happen, the Company can stay alert and solve the problem closely and immediately.
5.
Risk from Management
5.1 Risk from Dependence on Staff with High Expertise
The business of the Company requires knowledge and competence of personnel. These personnel have significant roles and responsibilities in different sections of the Company such as the development of marketing strategies, the preparation of contracts and pricing, the procurement of land, and the project management. The loss of these personnel would affect the capability to find clients of and the performance of the Company. However, most of the key personnel are also shareholders of the Company so it’s unlikely that they would resign or work for competitors. Also, in 2016, the Company had employed a significant number of skilled personnel. After being registered in the Stock Exchange of Thailand, the Company has become more well-known, and, as a result, the Company would be more attractive and interesting to the people with high capabilities. Moreover, the Company’s human resource management policies are good. The Company is developing the knowledge base in the organization to reduce the dependence on individuals and also the competitive incentives. WHA Corporation Public Company Limited
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Annual Report 2017
[ Corporate Information ]
General and Other Material Information General Information
1.1 The Company
Company Name WHA Corporation Public Company Limited
Nature of Business 1. Logistics Hub 1.1 Properties development for rental and service income 1.2 Properties for sale 1.3 Investment and property management 1.4 Real estate investment trust management 2. Industrial Development Hub 3. Utilities & Power Hub 3.1 Utilities 3.2 Power 4. Digital Platform Hub 4.1 Data Center and Cloud Solution 4.2 FTTx 4.3 Rental/Leasing Equipment and Software 4.4 System Integration 4.5 IT Outsourcing
Head Office 1121 Moo. 3 Theparak Road, Theparak Subdistrict, Muang District, Samutprakarn Province 10270 Company Registered Number : 0107555000082 Telephone : 0-2753-3750 Facsimile : 0-2753-2750 Website : http://www.wha-group.com
Share Capital as at 5 January 2018 Authorised Share Capital : THB 1,567,773,018.60 Paid-up Capital : THB 1,432,63,019.10 Type of Shares : Ordinary Shares Par Value : THB 0.10 per share
WHA Corporation Public Company Limited
Subsidiaries under WHAVH Hemaraj Land and Development Public Company Limited Subsidiaries under HRD Eastern Industrial Estate Company Limited Eastern Seaboard Industrial Estate (Rayong) Company Limited
WHA Infonite Company Limited WHA Corporation (International) Limited Subsidiaries under ALL WHA Corporation (Hong Kong) Limited Subsidiaries under WHAHK PT WHA (International) Indonesia Real estate development Industrial estate development Industrial estate development
EIE
ESIE
Providing rental factories, warehouses and other properties
Holding Company
Providing rental factories, warehouses and other properties Providing rental factories, warehouses and other properties Trust manager for investment property Investing in other companies and rental factories, warehouses and other properties Investing in data system Holding Company
Nature of Business
HRD
WHAID
WHAHK
WHA Infonite WHA (Int’l)
WHAVH
WHAREM
WAA
ALL
Subsidiaries WHA Alliance Company Limited
Warehouse Asia Alliance Company Limited WHA Real Estate Management Company Limited WHA Venture Holdings Company Limited
Abbreviation
Company Name
1.2 Subsidiaries (Information as at 31 December 2017)
97
Thailand
Thailand
Thailand
Indonesia
Hong Kong
Thailand Republic of Mauritius
Thailand
Thailand
Thailand
Thailand
HRD
HRD
WHAVH
WHAHK
ALL
WHA WHA
WHA
WHA
WHA
WHA
THB 358.00
THB 400.00
THB 6,000.00
USD 2.00
USD 2.00
THB 1.00 USD 0.01
THB 22,418.61
THB 10.00
THB 310.00
THB 260.00
Registered Shareholder Registered in Capital (mm)
THB 358.00
THB 400.00
THB 3,882.07
USD 2.00
USD 2.00
THB 1.00 USD 0.01
THB 22,418.61
THB 10.00
THB 310.00
THB 260.00
Paid-up Capital (mm)
THB 10.00
THB 40.00
THB 0.40
USD 1.00
USD 1.00
THB 10.00 USD 1.00
THB 100.00
THB 100.00
THB 10.00
THB 10.00
Par Value (Per Share)
60.00
99.99
98.54
99.96
100.00
89.99 100.00
99.99
99.99
99.99
99.99
Percentage of shares held by the Company
Pipe Rack Rental Holding Company Holding Company
EPS
H-INTER(BVI)
H-INTER
EPM
Eastern Seaboard Property and Marina Services Company Limited Hemaraj Eastern Seaboard Industrial Estate 4 Company Limited
HESIE-4
H-INTER(SG) RY2012
H-International (SG) Pte. Ltd. Rayong 2012 Company Limited
SME WHAUP
THE PARK
Real Estate Development for investment and marina services Industrial Estate Development
Holding Company Real estate development
Design and construction supervision service Real estate developer and service management Sale and Lease Factory Utilities and Power
Industrial estate development
HRIL
HCME
Industrial estate development
HSIL
H-Construction Management and Engineering Company Limited The Park Residence Company Limited SME Factory Company Limited WHA Utilities and Power Public Co., Ltd.
Industrial estate development
HESIE
Hemaraj Eastern Seaboard Industrial Estate Company Limited Hemaraj Saraburi Industrial Land Company Limited Hemaraj Rayong Industrial Land Company Limited Eastern Pipeline Services Company Limited H-International (BVI) Company Limited Hemaraj International Limited
Nature of Business
Abbreviation
Company Name
Thailand
Thailand
Singapore Thailand
Thailand Thailand
Thailand
British Virgin Islands Cayman Islands Thailand
Thailand
Thailand
Thailand
Thailand
HRD
HRD HRD: 82.30% H-INTER(SG) : 17.69% HRD HRD: 70.00% HRIL: 29.99% HRD
HRD
HRD
HRD
HRD: 74.99% EIE: 25.01% HRD
HSIL
HRD
HRD
THB 792.80
THB 1.00
USD 7.39 THB 1,165.00
THB 294.00 THB 3,825.00
THB 4.60
THB 20.00
USD 0.05
USD 0.002
THB 100.00
THB 1,000.00
THB 500.00
THB 1,000.00
Registered Shareholder Registered in Capital (mm)
THB 564.98
USD 7.39 THB 1,165.00 THB 1.00
THB 294.00 THB 3,200.00
THB 4.60
THB 17.15
USD 0.001
USD 0.002
THB 1,000.00 THB 100.00
THB 500.00
THB 1,000.00
Paid-up Capital (mm)
THB 10.00
THB 10.00
USD 1.00 THB 10.00
THB 10.00 THB 5.00
THB 10.00
THB 10.00
USD 1.00
USD 10.00
THB 100.00
THB 100.00
THB 100.00
99.99
99.99
100.00 99.99
99.99 99.99
99.99
99.99
100.00
100.00
99.99
99.99
99.99
Par Percentage Value of shares (Per held by the Share) Company THB 100.00 99.99
98 Annual Report 2017
WHA Corporation Public Company Limited
WHAWT
WHAEG
WHAET
WHA Energy Company Limited
Subsidiaries under WHAEG WHA Energy 2 Company Limited
Subsidiaries under H-INTER(SG) WHA Hemaraj Land and Development (SG) Pte. Ltd.
HRM
Hemaraj Reit Management Company Limited WHA Hemaraj International Company Limited Subsidiaries under WHAUP WHA Water Company Limited
WHA-H(SG)
WHAHRDI
Abbreviation
Company Name
Holding Company
Holding Company
Water resources development and management Holding Company
Trust manager for investment property Holding Company
Nature of Business
Joint Ventures WHA KPN Alliance Company Limited Central WHA Alliance Company Limited WHA Daiwa Logistics Property Company Limited
Company Name
Nature of Business
Providing rental factories, warehouses and other properties CENTRAL-WHA Providing rental factories, warehouses and other properties WHA-Daiwa Providing rental factories, warehouses and other properties
WHA-KPN
Abbreviation
1.3 Joint Ventures (Information as at 31 December 2017)
99
H-INTER(SG)
WHAEG
WHAUP
WHAUP
HRD
HRD
WHA WHA WHA
Thailand Thailand Thailand
THB 5,959.00
THB 9,178.00
THB 100.00
THB 240.00
THB 25.00
Paid-up Capital (mm)
THB 820.00
THB 650.00
THB 768.00
THB 820.00
THB 642.50
THB 768.00
Paid-up Capital (mm)
USD 0.001 USD 0.000001
THB 5,959.00
THB 9,178.00
THB 100.00
THB 240.00
THB 25.00
Registered Shareholder Registered in Capital (mm)
Singapore
Thailand
Thailand
Thailand
Thailand
Thailand
Registered Shareholder Registered in Capital (mm)
THB100.00
THB100.00
THB100.00
Par Value (Per Share)
USD 1.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00
50.99
49.99
64.97
Percentage of shares held by the Company
100.00
99.99
99.99
99.99
99.99
Par Percentage Value of shares (Per held by the Share) Company THB 10.00 99.99
Abbreviation
Producing and distributing electricity by solar photovoltatic rooftop Electricity and Power Generation
Gulf Solar
BGWHA-1
GVTP
GTS1
GTS2
Gulf Solar Company Limited
B.GRIMM Power (WHA) 1 (2) Company Limited Gulf VTP Company Limited
Gulf TS1 Company Limited
Gulf TS2 Company Limited
Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop
Thailand
Electricity and Power Generation
GJP NLL
Thailand
Thailand
Thailand
Thailand
Thailand
Electricity and Power Generation
Thailand
GHW
WHAET
Thailand
Glow Hemaraj Wind Company Limited Gulf JP NLL Company Limited
WHAEG
Thailand
WHAEG
WHAEG
WHAEG
WHAEG
WHAEG
WHAEG
ESCE
WHAET HHT
WHAEG
Thailand
Thailand Lao People’s Democratic Republic Thailand
WHAEG
Thailand
Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Power plant operation and sale of electricity Holding Company Electricity and Power Generation
HHT HHP
WHAEG
Thailand
WHA Infonite
THB 1,690.00
THB 1,685.00
THB 1,610.00
THB 1,533.56
THB 14.63
THB 1,384.00
THB 50.00
THB 422.15 USD 40.00
THB 11,624.00
THB 16.00
THB 14.50
THB 14.50
THB 11.50
THB 210.00
Registered Shareholder Registered in Capital (mm)
Providing data center
Nature of Business
Houay Ho Thai Company Limited (1) Houay Ho Power Company Limited
Joint Ventures under WHA Infonite Genesis Data Center Company Genesis Limited Joint Ventures under WHAUP WHA Gunkul Green Solar Roof 1 WHA Gunkul 1 Co., Ltd. WHA Gunkul Green Solar Roof 3 WHA Gunkul 3 Co., Ltd. WHA Gunkul Green Solar Roof 6 WHA Gunkul 6 Co., Ltd. WHA Gunkul Green Solar Roof WHA Gunkul 17 17 Co., Ltd. Gheco-One Company Limited Gheco-I
Company Name
THB 1,610.00 THB 1,685.00 THB 1,690.00
THB 420.06
THB 1,384.00 THB 14.63
THB 2.50
THB 11,624.00 THB 422.15 USD 40.00
THB 16.00
THB 14.50
THB 14.50
THB 11.50
THB 111.00
Paid-up Capital (mm)
THB 10.00
THB 10.00
THB 10.00
THB100.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00 USD 80.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00
THB100.00
Par Value (Per Share)
25.01
25.01
25.01
25.01
25.01
25.01
99.99
51.00 25.00
35.00
74.99
74.99
74.99
74.99
33.33
Percentage of shares held by the Company
100 Annual Report 2017
WHA Corporation Public Company Limited
CCE
Chonburi Clean Energy Company Limited Rayong Clean Energy Company Limited Eastern Seaboard Clean Energy Company Limited Glow IPP Company Limited
GIPP
Electricity and Power Generation
Electricity and Power Generation
Gulf Solar KKS
Gulf Solar KKS Company Limited
ESCE
Gulf Solar BV
Gulf Solar BV Company Limited
Electricity and Power Generation
Gulf Solar TS 2
Gulf Solar TS2 Company Limited
Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Electricity and Power Generation Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Producing and distributing electricity by solar photovoltatic rooftop Electricity and Power Generation
Nature of Business
RCE
GNLL 2 Gulf Solar TS 1
GTS4
Gulf TS4 Company Limited
Gulf NLL2 Company Limited Gulf Solar TS1 Company Limited
GTS3
Abbreviation
Gulf TS3 Company Limited
Company Name
Gulf Solar Gulf Solar
Thailand Thailand
Thailand
Thailand
Thailand
WHAET
WHAEG
ESCE
ESCE
Gulf Solar
Thailand
Thailand
WHAEG Gulf Solar
WHAEG
Thailand Thailand Thailand
WHAEG
Thailand
THB 2,850.00
THB 40.00
THB 50.00
THB 989.00
THB 6.00
THB 3.13
THB 2.29
THB 610.00 THB 3.03
THB 1,010.00
THB 1,278.00
Registered Shareholder Registered in Capital (mm)
THB 2,850.00 THB 71.22
THB 38.31
THB 12.50
THB 989.00
THB 6.00
THB 3.13
THB 2.29
THB 160.00 THB 3.03
THB 1,278.00 THB 260.00
Paid-up Capital (mm)
THB 10.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00
THB 10.00 THB 10.00
THB 10.00
5.00
33.33
99.99
99.99
99.99
99.99
99.99
25.01 99.99
25.01
Par Percentage Value of shares (Per held by the Share) Company THB 10.00 25.01
for business operation. Also, the Company did not include the financial information of Houay Ho Thai Company Limited in the consolidated financial statement because the Company is the strategic partner. Moreover, the other investors are proficient in the operation of all power plants. (2) B.GRIMM Power (WHA) 1 Company Limited is Change name from Bowin Clean Energy Limited (3) WHA Eastern Seaboard NGD 2 Company Limited and WHA Eastern Seaboard NGD 4 Company Limited are joint ventures with Gulf WHA MT Natural Gas Distribution Company Limited (Gulf Group)
Gulf WHA MT Natural Gas Gulf WHA MT Natural Gas Distribution Thailand WHAUP THB 126.40 THB 10.00 35.99 Distribution Company Limited WHA Eastern Seaboard NGD 2 (3) WHA NGD2 Thailand Gulf WHA NT THB 50.00 THB 12.50 THB 10.00 99.99 Company Limited WHA Eastern Seaboard NGD 4 (3) WHA NGD4 Electricity and Power Generation Thailand Gulf WHA NT THB 50.00 THB 12.50 THB 10.00 99.99 Company Limited Remarks: (1) Houay Ho Thai Company Limited held 25% in Houay Ho Power Company Limited which registered in Lao People’s Democratic Republic. US Currency is the main currency used
101
Abbreviation Nature of Business
Location / Tel. / Fax
HPF
HREIT
Hemaraj Industrial Property and Leasehold Fund
Hemaraj Leasehold Real Estate Trust
Investment in real estate
Location: 9 UM Tower 27th Floor Ramkamhaeng Road, Suan Luang Bangkok Telephone: 0-2717-3901 Facsimile: 0-2717-3902
Location: 199 Column Tower Ground floor & 21st - 23rd Floor, Ratchadapisek Road, Klongtoey Bangkok Telephone: 0-2649-2000 Facsimile: 0-2649-2233
Investment in real estate in Location: the type of office building 1 Empire Tower, 32nd Floor, South Sathorn Rd., Yannawa Subdistrict, Sathorn District, Bangkok Telephone: 0-2686-6100 Facsimile: 0-2670-0430
WHABT
WHA Business Complex Freehold and Leasehold Real Estate Investment Trust
Investment in real estate
Investment in real estate in Location: the type of warehouses and Kasikorn Bank Building, distribution centers 6th Floor, 400/22 Phaholyothin Road, Samsen-Nai Subdistrict, Phayathai District, Bangkok 10400 Telephone: 0-2673-3999 Facsimile: 0-2673-3900
WHART
WHA Premium Growth Freehold and Leasehold Real Estate Investment Trust
Other Juristic Person in which the Company holds 10% or more of the shares
Company Name
THB 4,269.50
HRD
THB 6,693.78
THB 1,966.7
HRD
Paid-up Capital (mm)
THB 9.85
Ordinary Shares
THB 6,693.78 THB 9.5267 Trust Units
THB 4,629.50
THB 1,966.7 THB 9.7362 Trust Units
15.00
22.95
15.00
15.00
Par Type Percentage Value of of shares (per Shares held by the share) Company
THB 18,237.69 THB 18,237.69 THB 9.2861 Trust Units
WHA
WHA
Share- Registered holder Capital (mm)
1.4 Other Juristic Persons in which the Company holds 10% or more of the shares (Information as at 31 December 2016)
102 Annual Report 2017
1.5 References
Share Registrar Thailand Securities Depository Co., Ltd. The Stock Exchange of Thailand Building, 93 Ratchadaphisek Road, Dindaeng Subdistrict, Dindaeng District, Bangkok 10110 Telephone: 0-2009-9999 Facsimile: 0-2009-9991
Debenture Registrar The Siam Commercial Bank Public Company Limited 1060 New Petchaburi Road, Makkasan, Ratchathevee, Bangkok 10400 Telephone: 0-2256-2323
Auditor PricewaterhouseCoopers ABAS Ltd. Mr. Chanchai Chaiprasit Authorized Auditor Registration No.3760 and/or Mr. Pisit Thangtanagul Authorized Auditor Registration No.4095 and/or Ms. Nopanuch Apichatsatien Authorized Auditor Registration No. 5266 th 15 Floor, Bangkok City Tower, 179/74-80 South Sathorn Road, Bangkok 10120 Telephone: 0-2344-1000 Facsimile: 0-2286-5050
Legal Advisor RL Counsel Co., Ltd. 62/15 Thaniya, Suriyawongse Sub District, Bangrak District, Bangkok 10500 Telephone: 0-2235-3339 Facsimile: 0-2235-3076
2. Other Material Information
There is no other information which may materially affect investors’ decisions.
WHA Corporation Public Company Limited
103
104
Annual Report 2017
[ Management and Corporate Governance ]
Capital Structure 1.
The Company’s Securities
The Company’s registered capital as of 5 January 2018 was THB 1,567,773,018.60 and the paid-up capital was also THB 1,432,630,019.10 , divided into registered ordinary shares of 15,677,730,186 shares with par value THB 0.10 and paid-up capital of 14,326,300,191 shares Material change of paid-up capital during year 2017 is as follows. (Unit:THB) Item
31 Dec 2015
Registered capital (Increase/ decrease)
Registered capital
Paid-up capital (Increase/ decrease)
Paid-up capital
-
1,567,773,018.60
-
1,432,234,166.80
8 Jan 2016
Exercise of warrant WHA-W1
-
1,567,773,018.60
8,840.90
1,432,243,007.70
7 July 2016
Exercise of warrant WHA-W1
-
1,567,773,018.60
24.40
1,432,243,032.10
31 Dec 2016
-
1,567,773,018.60
-
1,432,243,032.10
31 Dec 2017
-
1,567,773,018.60
-
1,432,243,032.10
-
1,567,773,018.60
386,987.00
1,432,630,019.10
5 Jan 2018
Exercise of warrant WHA-W1
2 Shareholding Structure
The shareholders on the shareholders’ register as of 7 February 2018 are as follows: Shareholders Group of Mr. Somyos Anantaprayoon and Ms. Jareeporn Jarukornsakul • WHA Holding Co., Ltd.(1) • Ms. Jareeporn Jarukornsakul • Mr. Somyos Anantaprayoon • Credit Suisse AG, Singapore Branch(2) Sub-total
Shares
Percent
3,629,083,491 1,471,761,769 1,032,666,723 321,473,360
25.33 10.27 7.21 2.24
6,454,648,343
45.06
Shareholders State Street Bank Europe Limited Thai NVDR Co., Ltd. SCB Securities Co., Ltd. N.C.B. Trust Limited-Norges Bank 11 Group of Jarukornsakul • Mr. Wutt Jarukornsakul • Ms. Jaruwan Jarukornsakul • Mr. Anuwat Jarukornsakul • Ms. Patsanan Jarukornsakul • Ms. Wannakan Jarukornsakul • Ms. Malee Jarukornsakul • Mr. Teera Jarukornsakul Sub-total Group of Cholkadeedamrongkul • Mr. Sompong Cholkadeedamrongkul held by Asset Plus Fund Management • Mr. Sompong Cholkadeedamrongkul • Mrs. Warunee Cholkadeedamrongkul • Mr. Pongpat Cholkadeedamrongkul Sub-total Mr. Sanchai Suksomcheewin Ms. Nalinrat Sae Ng Ms. Chaleow Srichaiyawat Total Top Ten Shareholders Other Minority Shareholders Grand total Remark
Percent
1,541,731,285 702,435,564 316,455,600 186,861,000
10.76 4.90 2.21 1.30
130,000,000 18,041,150 9,700,000 7,000,000 6,000,000 2,000,000 1,022,000 173,763,150
0.91 0.13 0.07 0.05 0.04 0.01 0.01 1.21
58,756,700
0.41
46,334,800 36,300,000 1,000,000 142,391,500
0.32 0.25 0.01 0.99
155,000,000 99,094,578 95,585,000 9,867,966,020 4,457,997,171 14,326,300,191
1.08 0.69 0.67 68.88 31.12 100.00
WHA Holding Co., Ltd. is a holding company. As of 31 December 2017, it has a registered capital of THB 5,000,000 being 1,000,000 ordinary shares at a par value of THB 5 per share. The shareholders are listed as follows:
(1)
Shareholder Mr. Somyos Anantaprayoon Ms. Jareeporn Jarukornsakul Ms. Jaruwan Jarukornsakul Total Remark
Shares
No. of Shares
%
500,000 499,999 1 1,000,000
50.0 50.0 0.0 100.0
Part of the shares in Credit Suisse AG Singapore Branch, a securities company incorporated in Singapore, and the beneficiaries of the shares held by it are mostly Mr. Somyos Anantaprayoon and Ms. Jareeporn Jarukornsakul
(2)
WHA Corporation Public Company Limited
105
106
Annual Report 2017
3.
Other Securities
3.1 Debentures – WHA Corporation PCL
As of 31 December 2017, WHA Corporation PCL has THB 14,195 mm of outstanding debentures. The details are as follows: Issue WHA183A WHA189B WHA189A WHA18NA WHA194A WHA195B WHA196A WHA196B WHA197B WHA197C WHA197A WHA195A WHA204C WHA204A WHA204B WHA208A WHA217A WHA219A WHA247A
Amount (THB mm)
Interest rate (% p.a.)
Tenure (year)
Maturity date
200 2,000 570 290 1,000 150 230 100 280 300 385 1,110 1,500 1,500 1,000 100 600 1,500 280
3.70 4.15 4.84 4.00 3.85 3.75 3.85 3.85 3.85 3.75 4.40 4.42 4.10 4.10 4.10 3.15 4.70 4.00 5.00
2.00 3.00 5.00 4.00 3.00 3.00 3.01 2.99 3.05 3.01 5.00 5.00 3.30 3.30 3.30 2.98 7.00 5.00 10.00
19 March 2018 8 September 2018 20 September 2018 25 November 2018 29 April 2019 20 May 2019 11 June 2019 11 June 2019 8 July 2019 30 July 2019 31 July 2019 31 July 2019 29 April 2020 29 April 2020 29 April 2020 18 August 2563 31 July 2021 16 September 2021 31 July 2024
3.2 Debentures – Hemaraj Land and Development PCL
As of 31 December 2017, Hemaraj Land and Development PCL has THB 12,438 mm. The details are as follows: Issue
Amount (THB mm)
Interest rate (% p.a.)
Tenure (year)
Maturity date
HEMRAJ19OA
638
9
5 October 2019
HEMRAJ217A HEMRAJ222A HEMRAJ231A
2,000 1,000 2,500
Year 1 - 3: 4.90 Year 4 - 6: 6.00 Year 7: 6.50 Year 8 - 9: 6.75 5.65 3.75 5.50
9 7 10
23 July 2021 20 February 2022 25 January 2023
Issue
Amount (THB mm)
Interest rate (% p.a.)
Tenure (year)
Maturity date
2,500 1,500
5.75 5.00
10 10
30 April 2024 30 February 2025
HEMRAJ244A HEMRAJ252A
3.3 Bill of Exchange – WHA Corporation PCL
As of 31 December 2017, the Company has outstanding Bill of Exchange of THB 990 mm. The details are as follows: Item
Amount (THB mm)
Tenure (days)
Maturity date
1 2 3 4 5 6
90 450 150 35 165 100
92 182 182 161 167 194
22 February 2017 19 March 2017 19 March 2017 16 May 2017 22 May 2017 4 June 2017
3.4 Bill of Exchange – Hemaraj Land and Development PCL
-
3.5 Warrants
The company issued warrants (WHA-W1) which its details (as of 31 December 2017) are summarized as follows: Warrants
Total units issued
Exercised units
Exercise ratio
Exercise price (THB)
Tenure (year)
Last exercise date
WHA-W1
116,447,570
386,623
1:10.2396
3.4181
5.0
4 March 2020
WHA Corporation Public Company Limited
107
108
Annual Report 2017
[ Management and Corporate Governance ]
Dividend Policy The Company has a policy to pay out dividends at not less than 40.0% of its net profits stated on the company financial statements after deduction of the corporate income tax and legal reserve each year. The Company considers dividend payment based on factors that deem to be the most beneficial to the shareholders such as the Company’s performance and financial status, investment plans in each period as deemed reasonable or appropriate by the Board of Directors. The dividend payment shall not have significant impact on the Company’s normal operation. The resolution of the Board of Directors on dividend payment has to be proposed to the shareholders for approval, except payment of the interim dividends where the Board of Directors has its authority to approve and then report the same to the next shareholders’ meeting.
[ Management and Corporate Governance ]
Management Structure
The Company structure as of 31 December 2017 is as follows;
Board and Committees
The Company’s management structure consists of six Board and committees namely: 1. Board of Directors 2. Executives Committee 3. Audit Committee 4. Risk Management Committee 5. Corporate Governance Committee 6. Nomination and Remuneration Committee
1. Board of Directors
The Company’s Board of Directors as of 31 December 2017 consisted of 13 directors as follows:
Name
1. Mr. Somyos Anantaprayoon /1 2. Miss Jareeporn Jarukornsakul /2 3. Mr. David Richard Nardone 4. Mr. Vivat Jiratikarnsakul 5. Mr. Krailuck Asawachatroj 6. Mr. Jakrit Chaisanit 7. Mr. Arttavit Chalermsaphayakorn 8. Mr. Narong Kritchanchai 9. Mr. Somsak Boonchoyruengchai 10. Mr. Apichai Boontheerawara/3 11. Mr. Somsak Pratomsrimek 12. Mrs. Kritsana Sukboonyasatit 13. Mr. Chanvit Amatamatucharti
Remark
Title
Chairman Vice Chairman Vice Chairman Director Director Director Director Director Director Independent Director and Chairman of the Audit Committee Independent Director and Audit Committee Independent D irector and Audit Committee Independent Director
Vacate office upon death on 9 February 2018. The appointment of the chairman of the Board of Director and the Chairman of the Executive Committee in place in accordance BOD’s Resolution no.1/2018 on 9 February 2018. /3 The Audit Committee’s Meeting No.1/2017 held on 22 February 2017 approved the erection of Chairman of the Audit Committee. /1
/2
The Company Secretary is Mr. Sirisak Kijraksa. Authorized Directors The Directors who have authority to sign for binding the Company are Mr. Somyos Anantaprayoon and Ms. Jareeporn Jarukornsakul jointly sign with any one of Mr. Jakrit Chaisanit, Mr. Arttavit Chalermsaphayakorn, Mr. Narong Kritchanchai or Mr. Somsak Boonchoyruengchai, altogether 3 persons, with the Company’s seal affixed. WHA Corporation Public Company Limited
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Annual Report 2017
Scope of Authorities and Responsibilities of the Board of Directors 1. To perform their duties in compliance with laws, rules, regulations or notification of the Securities and Exchange Commission of Thailand, the Capital Market Supervisory Board, and the Stock Exchange of Thailand that relate to the Company’s objectives, the Articles of Association, the resolutions of the Board of Directors and the resolutions of the shareholders’ meeting with their accountabilities, carefulness, and integrity; 2. To determine details and approve the Company’s vision, business strategies, business direction, business policies, goal, guidelines, strategic plans, and budgets of the Company and its subsidiaries that prepared by the Executive Committee and the Executive; 3. To monitor the Executive and operation of the Executive Committee, Chief Executive Officer, the Executive, or any persons who take responsibilities and such duties in accordance with the Company’s policies determined by the Board of Directors; 4. To constantly follow up the Company’s performance to be in compliance with the operating plan and budget of the Company; 5. To procure the Company and its subsidiaries to apply appropriate and efficient accounting systems, and to provide internal control and internal audit systems; 6. To arrange the preparation of balance sheet and income statements at the end of the Company’s fiscal year and certify such statements in order to propose to the shareholders at the annual general shareholders’ meeting for their approval; 7. To consider and approve the selection and appointment of the Company’s auditor, and the appropriate audit fee proposed by the Audit Committee prior to propose to the shareholders at the annual general shareholders’ meeting for approval; 8. To prepare policy in relation to good corporate governance principle in writing and efficiently apply such policy to ensure that the Company be fairly responsible to all relevant group of persons; 9. To consider and approve the appointment of person who has qualification and is not prohibited under the Public Limited Company Act, B.E. 2535 (as amended), the Securities Exchange Act, B.E. 2535 (as amended), including other relevant notifications, regulations and/or rules to substitute a vacancy in the Board of Directors for reasons other than the termination of the term of office, and to consider and approve the appointment of the director to replace the one retiring by rotation, and determine the director’s remunerations as proposed by the Remuneration and Nomination Committee in order to propose the shareholders in the annual general shareholders’ meeting for approval; 10. To appoint sub-committee such as the Audit Committee, the Executive Committee, the Corporate Governance Committee, the Remuneration and Nomination Committee, the Risk Management Committee, or other committee, including determining their duties and authorities in order to support the Board of Directors’ management; 11. To determine and change the director’s name who has authority to sign for binding the Company; 12. To consider and appoint the Executive as defined by the Securities and Exchange Commission or the Capital Market Supervisory Board, and the Company Secretary, including determining their remuneration; 13. To seek profession opinions from external organizations if necessary for making appropriate decision; 14. To support the Company’s Directors and Executive to attend any seminars held by Thai Institute of Directors on the program of Duties and Responsibilities of the Directors and the Executive; 15. To approve loan to such companies that have a business relationship with the Company as shareholders, or companies relating to commercial business or other companies in the amount that exceeds the Executive Committee’s authority;
16. To approve investment and divestment of common shares and/or other securities in amount that exceeds the Executive Committee’s authority; 17. To purpose to the Company’s shareholders on the Company’s capital increase or decrease, and the change in par value of shares, Memorandum of Associations, Article of Associations, and/or Objectives; 18. To approve the Company’s establishment, merger or liquidation; 19. To delegate the management, executives, and employees of related companies to explain, give an opinion, attend a meeting or delivery documents as it deemed appropriate; 20. To consult experts, or Company’s advisor, or hire external consultant or expert where it deemed appropriate by the Company’s expenses. The assignment of authorities and responsibilities of the Board of Directors shall not cause the Board of Directors or the sub-authorized person to be entitled to approve the transaction where itself or a person who has a conflict of interest (as defined in the Notification of the Securities and Exchange Commission or the Notification of the Capital Market Supervisory Board) may have interests or other types of benefit or conflict of interests with the Company or its subsidiaries, except the transaction was approved in compliance with the policy and principle approved by the shareholders meeting or the Board of Directors’ meeting. Roles and Responsibilities of the Chairman of Board of Directors 1. The Chairman is responsible as the Board’s leader and as the Chairman of Board’s meeting as well as in shareholders’ meeting; 2. In case of equality of vote, the Chairman shall have a casting vote in the Board meeting. The Company’s Chairman of the Board is not an independent director, since the Company believes that the Chairman is qualified with knowledge, skill, and experiences in order to lead the Company to gain the most advantages and success.
2. Executive Committee
The Executive Committee as of 31 December 2017 consisted of 9 members as follows:
Name Title
1. Mr. Somyos Anantaprayoon /1 2. Miss Jareeporn Jarukornsakul /2 3. Mr. David Richard Nardone 4. Mr. Vivat Jiratikarnsakul 5. Mr. Krailuck Asawachatroj 6. Mr. Jakrit Chaisanit 7. Mr. Arttavit Chalermsaphayakorn 8. Mr. Narong Kritchanchai 9. Mr. Somsak Boonchoyruengchai
Remark
/1
/2
Chairman of the Executive Committee Vice Chairman of the Executive Committee Executive Committee Member Executive Committee Member Executive Committee Member Executive Committee Member Executive Committee Member Executive Committee Member Executive Committee Member
Vacate office upon death on 9 February 2018. The appointment of the chairman of the Board of Director and the Chairman of the Executive Committee in place in accordance BOD’s Resolution no.1/2018 on 9 February 2018.
WHA Corporation Public Company Limited
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Annual Report 2017
3. The Audit Committee
Scope of Authorities and Responsibilities of the Executive Committee 1. To screen the Company’s business plan and budget prior to propose to the Board for approval; 2. To screen the Company’s policies and operation measurement prior to propose to the Board for approval; 3. To give opinion, advice and consider to approve the matters relating to the Company’s normal business operation under the amount or annual budget approved by the Board, and to approve the variance of not exceeding 5% of the amount or annual budget approved by the , or to perform any activities assigned by the Board; 4. To consider and approve specific matters or operations within the following amount: (a) To approve the execution, investment, termination, or divestment of the Company’s project for the value not exceeding THB 1,500 mm per project; (b) To approve the determination of loans, B/E, P/N and their terms and conditions, with the value of note exceeding THB 1,000 mm per time; (c) To approve the asset mortgage for being collateral of borrowing for the amount not exceeding to THB 1,000 mm per time; (d) To approve the determination of Bank Guarantees and their terms and conditions, with the value of note exceeding THB 1,500 mm per time; (e) To approve the payment to settle a legal dispute for the amount not exceeding THB 50 mm per time; (f) To approve the hiring of a consultant, or third party expert in the amount of not exceeding THB 20 mm per time; (g) To approve advertising expenses. Entertainment expenses, social, sports and scholarship donations, gift expense in the amount not exceeding THB 5 mm per time. 5. To approve investment or expenses, including advertising expenses. Entertainment expenses, social, sports and scholarship donations, gift expense in excess of the annual budget or limit as approved by the Board in the amount of not more than THB 10 mm per time. 6. To approve open and/or close of bank accounts, enter into other financial products; e.g. IRS, derivatives, Money Market, as well as to approve changes to the terms and conditions of the debentures, such as the borrowing period, interest rate. 7. To appoint or terminate the Company’s Executive or employee at the level of department manager upward, including to determine their compensation. 8. To coordinate and follow up the Company’s operation with the Executive in normal business operation to be in compliance with the Company’s business plan and budget. 9. To implement and conduct the Company’s business as assigned by the Board of Directors.
The Audit Committee as of 31 December 2017 consisted of 3 members as follows:
Name Title
1. Mr. Apichai Boontheerawara/1 2. Mr. Somsak Pratomsrimek 3. Mrs. Kritsana Sukboonytasatit Remark
Chairman of the Audit Committee Audit Committee Member Audit Committee Member
The Audit Committee’s Meeting No.1/2017 held on 22 February 2017 approved the erection of Chairman of the Audit Committee.
/1
The secretary of the Audit Committee is Mr. Kasamsi Sakunchaisiriwit. All 3 Audit Committee members have knowledge and experience in financial statement audit, and is a certified public accountant having accounting and finance expertise. Scope of Authorities and Responsibilities of the Audit Committee 1. To review for the accuracy and sufficiency of the Company’s financial reporting; 2. To review for appropriateness and efficiency of the Company’s internal control system and internal audit system and to consider the independence of the internal control section, including to give opinion on appointment, relocation, termination of the head of the internal control section and/ or engagement of the internal audit company or other sections responsible for the internal audit; 3. To review and ensure that the Company complies with the Securities and Exchange laws, the regulations of the Stock Exchange of Thailand, and other law relating to the Company’s business; 4. To nominate a candidate who is independent to be the Company’s auditor and propose its audit fee to the Board for consideration, and to propose the cancelation of auditor, if it is reasonable to do so, to the Board for consideration, as well as to attend the meeting at least once a year with the auditor without attending of the Executive; 5. To consider the connected transactions or any transactions having a conflict of interests to be in compliance with the laws and regulations of the Stock Exchange of Thailand in order to ensure that such transactions are reasonable and of ultimate benefit to the Company; 6. To provide the Audit Committee’s report and disclose it in the Company’s annual report. Such report must be signed by the Chairman of the Audit Committee and consist of the following information as a minimum: (1) The opinion on the accuracy, completeness, and reliability of the Company’s financial reports (2) The opinion on the sufficiency of the internal control of the Company (3) The opinion on compliance with the Securities and Exchange laws and regulations of the Stock Market of Thailand, or other law relating to the Company’s business (4) The opinion on appropriateness of the auditor (5) The opinion on the transactions that may have conflict of interest (6) The number of the Audit Committee’s meeting and the meeting attending of each Audit Committee (7) The overall opinion or remark that the Audit Committee obtained from performing its duties according to the charter (8) Other transactions as deemed that shareholders and general investors should be informed under the scope of duties and responsibilities assigned by the Board of Directors; 7. In performing the Audit Committee’s duties, if it is found or suspected that there is the following transaction or action which may materially affect to the Company’s financial status and performance, the Audit Committee shall report to the Board of Directors of the Company in order to remedy within the period as the Audit Committee deems appropriate: (1) A transaction having a conflict of interest (2) A fraud or irregularity or major defect on the internal control system (3) Violation of the Securities and Exchange laws, regulations of the Stock Exchange of Thailand, or law relating to the Company’s business If the Board of Directors or the Executives do not remedy within the above period, any of the Audit Committee member may report that there is such above mentioned transaction or action to the Securities and Exchange Commission and the Stock Exchange of Thailand; 8. To review policy and internal control system of anti-corruption; 9. To perform any other acts assigned by the Board of Directors, with the consent of the Audit Committee. WHA Corporation Public Company Limited
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Annual Report 2017
4. Risk Management Committee
As of 31 December 2017, the Risk Management Committee consisted of following 3 members. Name Title
1. Miss Jareeporn Jarukornsakul 2. Mr. Somsak Pratomsrimek 3. Mrs. Kritsana Sukboonytasatit
Chairman of Risk Management Committee Risk Management Committee Member Risk Management Committee Member
Scope of Authorities and Responsibilities of Risk Management Committee 1. Study, review and evaluate risks as well as tendency which may affect organization as well as inside and outside risk of the Company; 2. Set policy on risk management to be submitted to the Board of Directors; 3. Review risk, follow up and evaluate sufficiency, efficiency and productivity of overall risk management; 4. Give advice and approval for the organization’s risk management. Risk Management Committee consists of 3 directors. Each of them will have 3-year term but such term is renewable.
5. Corporate Governance Committee
As of 31 December 2017, the Corporate Governance Committee consisted of 4 members as follows. Name Title
1. Mr. Somsak Boonchoyruengchai 2. Mr. Jakrit Chaisanit 3. Mr. Arttavit Chalermsaphayakorn 4. Mr. Narong Kritchanchai
Chairman of the Corporate Governance Committee Corporate Governance Committee Member Corporate Governance Committee Member Corporate Governance Committee Member
Scope of Authorities and Responsibilities of the Corporate Governance Committee 1. To consider, review and revise the policy on corporate governance and propose the same to the Board of Directors for consideration and approval. This policy is to be prepared in writing and adopted as guidelines for good practice. 2. To consider, review and revise the code of conduct and to prepare it in writing. 3. To set and plan the policy on social corporate responsibility. 4. To act as representative of the Company in communicating and conducting activities regarding the corporate governance with the management, officers and outside organizations. 5. To follow up, review and improve the performance to be in accordance with the designated plan and to prepare quarterly summary report to the Corporate Governance Committee. The Corporate Governance Committee shall comprise at least 3 members and each of them shall have the 3-year term. After expiration of the term, it may be considered for renewal of the term.
6. Nomination and Remuneration Committee
follows.
As of 31 December 2017, the Nomination and Remuneration Committee consisted of 3 members as
Name Title
1. Mr. Apichai Boontheerawara /1 /2 2. Miss Jareeporn Jarukornsakul 3. Mrs. Kritsana Sukboonytasatit Remark
Chairman of the Nomination and Remuneration Committee Nomination and Remuneration Committee Member Nomination and Remuneration Committee Member
The Board of Directors’ Meeting No.1/2017 held on 23 January 2017 appointed the new committee member. The Nomination and Remuneration Committee’s Meeting No.1/2017 held on 22 February 2017 approved the erection of Chairman of the Committee.
/1
/2
Scope of Authorities and Responsibilities of the Nomination and Remuneration Committee 1. To consider structure, size and component of the board of directors of the Company to be appropriate to the organization and in line with changing circumstances; 2. To consider the rules for nomination of directors, chief executive officer as well as nominating and screening qualified persons to serve as directors or chief executive officer for approval by the board of directors; 3. To give opportunity to the minority shareholders with sufficient period of time to nominate a list of persons to be nominated as directors prior to the shareholders’ meeting; 4. To have the succeeding plan for the chief executive officer and top management by constant review; 5. To consider strategy and policy on human resource to be in line with the business operation of the Company; 6. To propose rules and guideline for fixing the remuneration of directors, committee, senior management which are clear, fair and appropriate in accordance with their responsibility and propose them to the board of directors for consideration; 7. To improve the policy and structure on management of remuneration of the directors of the Company, the committee, top management to be consistent with the labor market condition at that time for further proposing it to the board of directors for consideration; 8. To determine the target and evaluate the performance of the chief executive officer for further review of the appropriateness for fixing the remuneration and to further propose it to the board of directors for consideration. The Nomination and Remuneration Committee shall comprise at least 3 members and each of them shall have the 3-year term. After expiration of the term, it may be considered for renewal of the term.
WHA Corporation Public Company Limited
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Annual Report 2017
Executives
The Company’s executives as of 31 December 2017 consisted of 9 persons as follows:
Name Title
1. Mr. Somyos Anantaprayoon /1 2. Miss Jareeporn Jarukornsakul /2 3. Mr. David Richard Nardone 4. Mr. Vivat Jiratikarnsakul 5. Mr. Krailuck Asawachatroj 6. Mr. Jakrit Chaisanit 7. Mr. Arttavit Chalermsaphayakorn 8. Mr. Narong Kritchanchai 9. Mr. Somsak Boonchoyruengchai
Remark
/1
/2
Chairman of the Executive Committee Vice Chairman of the Executive Committee / Chief Executive Officer Executive Committee Member Executive Committee Member Executive Committee Member / Chief Strategic Officer Executive Committee Member / Chief Operating Officer Executive Committee Member / Chief Financial Officer Executive Committee Member / Chief Legal Officer Executive Committee Member / Vice President
Vacate office upon death on 9 February 2018. The appointment of the chairman of the Board of Director and the Chairman of the Executive Committee in place in accordance BOD’s Resolution no.1/2018 on 9 February 2018.
Scope of authorities and duties of Chief Executive Officer 1. To supervise the Company’s overall operation to be in accordance with the business objectives of the Company and those assigned from the Board of Directors; 2. To provide strategies and business plans to be proposed to the Board of Directors and implement to achieve the goal specified in the strategies and business plans approved by the Board of Directors; 3. To take actions and perform duties as assigned by the Board of Directors and as per the policies of the Board of Directors; 4. To give orders, issue regulations, make announcement and record in order to perform the work to be in accordance with the policies; 5. To approve and/or grant power for doing juristic acts binding the Company for normal transactions of the Company, including transactions the Chief Executive Officer is authorized from the Board of Directors to take action as well as any transactions not directly binding the Company’s assets; 6. To coordinate with the executives and staff to perform in accordance with the policies and business direction given by the Board of Directors; 7. To seek for business opportunity on banking investment, securities, investment, business consultant, financial and accounting consultant, investment consultant, and new business to increase revenue to the Company and staff; 8. To consider taking the Company’s rights and properties to create obligations with persons, companies, partnerships, shops or financial institutions for proposing to the Board of Director for approval; 9. To approve payment of expenditure for normal operation in the amount approved by the Board of Directors; 10. To approve investment in equity instruments and securities for the Company’s account in the amount approved by the Board of Directors; 11. To approve in principle of investment for business expansion as well as joint investment with other business operator and propose to the Board of Directors for approval in the next meeting;
12. To approve payment for significant investment set forth in the annual budget or those approved in principle by the Board of Directors; 13. To take care of working of employees to be in accordance with the policies, regulations, and the corporate good governance; 14. To support development of employees’ knowledge and capacity to enhance the organization’s capability; 15. To appoint consultant necessary to the Company’s operation; 16. To approve related transactions being on an arm-length basis such as sale and purchase goods at market price, service fees at the normal rate and giving credit terms similar to general customers, etc. under to the policies approved by the Board of Directors; 17. To appoint, transfer, or terminate employees in the level not requiring approval from the Executives Committee; and 18. To perform other work as assigned by the Board of Directors on a case by case basis. The Chief Executive Officer does not have authority to approve related transactions not being on an armlength basis, transactions of acquisition and disposition of the Company’s major assets, and/or the transactions with the Company and its subsidiaries in which the Chief Executive Officer or a person possibly conflict having interest and having conflict of interest in any nature, except for transactions being on an arm-length basis where the policies and conditions are provided and approval is granted in accordance with the policies and conditions approved by the Board of Directors and endorsed by the shareholders for entering into related transactions and transactions acquisition and disposition of major assets of the Company or its subsidiaries to be in accordance with the rules and regulations of the Stock Exchange of Thailand. The Chief Executive Officer has authority to approve spending in specific cases or actions in the amounts as follows: (a) Approval of investment fund in an amount of not exceeding THB 210,000,000 per project - Approval on purchase of raw land in an amount of not exceeding THB 10,000,000 on each occasion - Approval on hiring contractors for the objectives of constructing warehouses or factories in an amount of not exceeding THB 200,000,000 on each occasion (b) Approval on purchase of construction materials and others for constructing warehouses or factories in an amount of not exceeding THB 50,000,000 on each occasion (c) Approval of payment of contractors’ remuneration and creditors of construction materials in an amount of not exceeding THB 200,000,000 on each occasion (d) Approval of loans to be expense on normal business operation, marketing, purchase, investment in assets in an amount of not exceeding THB 200,000,000 on each occasion.
The Company’s Secretary Mr. Sirisak Kijraksa as company secretary, effective from 13 May 2016. His qualified and experienced and he used to be a company secretary of Hemaraj Land and Development Public Company Limited. He also has good knowledge and understanding of the business which is capable to advise accurately and appropriately to the Board of Directors of duties and responsibilities. Scope of authorities and duties of the Company Secretary 1. To provide preliminary suggestion to directors in respect of laws, rules and regulations 2. To provide advice on holding of shareholders’ meeting in accordance with laws, regulations and guideline and prepare an invitation notice for shareholders’ meeting 3. To record minutes of shareholders’ meeting and directors’ meeting and follow up compliance with shareholders’ meeting and board of directors’ meeting WHA Corporation Public Company Limited
117
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4. To prepare and safe-keep the following documents: (a) The register of director (b) The invitation of meetings of the Board of Directors, minutes of meetings of the Board of Directors and the Company’s annual report (c) The invitation of meetings of shareholders and minutes of meetings of shareholders 5. To safe-keep reports of conflicts of interest reported by the directors or the executives 6. To procure disclosure of information and information memorandum to the public in accordance with laws and regulations 7. To perform other acts as specified by of the Capital Market Supervisory Board
Director and Executive Remunerations
1. Remuneration in Cash
1) Director Remuneration The 2016 Annual General Meeting, held on 28 April 2017, resolved to approve the 2017 remuneration for the directors as follows; 1. The emoluments of company director
Position
Chairman of the Board of Director Director 200,000 per year *
Amount
250,000 per year *
*Monthly
2. The meeting allowances by pay only the director attend the meeting. Position
Chairman Chairman of Audit Committee Director
Position
40,000 Baht per time 35,000 Baht per time 30,000 Baht per time
3. Sub - Committee meeting allowance by pay only the director attend the meeting.
Chairman of Sub - Committee Director of Sub - Committee Director
Meeting allowances
Meeting allowances
40,000 Baht per time 35,000 Baht per time 30,000 Baht per time
4. The bonus will be 0.17% of Net Profit of the end of year 5. Other benefits - None
The details of the meeting attendance and remuneration of all directors and sub-committee members are summarized as following. Meeting Attendance/No. of Meeting Held (2017) Board of Executive Audit Nomination & Good Risk Directors Committee Committee Remuneration Governance Management Name Committee Committee Committee Risk Nomination & Management Remuneration Committee Committee
Mr.Somyos Anantaprayoon Ms.Jareeporn Jarukornsakul Mr.Jakrit Chaisanit Mr.Narong Kritchanchai Mr.Somsak Boonchoyruengchai Mr.Arttavit Chalermsaphayakorn Mr.David Richard Nardone Mr.Vivat Jiratikarnsakul Mr Krailuck Asawachatroj Dr.Kritsana Sukboonyasatit Dr.Somsak Pratomsrimek Dr.Apichai Boontheerawara Mr.Chanvit Amatamatucharti
5/7 7/7 7/7 7/7 7/7 7/7 6/7 7/7 7/7 6/7 7/7 7/7 6/7
8/11 11/11 9/11 11/11 11/11 11/11 11/11 11/11 10/11 - - - -
- - - - - - - - - 4/4 4/4 4/4 -
- 2/2 - - - 2/2 - 2/2 -
- - 3/3 3/3 3/3 3/3 - - - - - - -
2/2 2/2 2/2 -
Unit : THB Thousand
Directors’ Remuneration (2017) Meeting Allowance Position Board of Audit Executive Risk Good Nomination Name Allowance Directors Committee Committee Manage- Gover- & Remu- ment nance neration Committee Committee Committee Bonus Total
Mr.Somyos Anantaprayoon Ms.Jareeporn Jarukornsakul Mr.David Richard Nardone Mr.Vivat Jiratikarnsakul Mr Krailuck Asawachatroj Mr.Jakrit Chaisanit Mr.Arttavit Chalermsaphayakorn Mr.Narong Kritchanchai Mr.Somsak Boonchoyruengchai
250 200 200 200 200 200
200 210 210 210 210 210
- - - - - -
200.0 165 165 165 150 135
- 50 - - - -
- - - - - 45
- 30.0 - - - -
1,818.48 1,606.46 1,606.46 1,606.46 1,606.46 1,606.46
2,468.48 2,261.46 2,281.46 2,181.46 2,166.46 2,196.46
200 200
210 210
- -
165 165
- -
45 45
- -
1,606.46 2,246.46 1,606.46 2,241.46
200
210
-
150
-
75
-
1,606.46 2,241.46
WHA Corporation Public Company Limited
119
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Annual Report 2017
Unit : THB Thousand
Directors’ Remuneration (2017) Meeting Allowance Position Board of Audit Executive Risk Good Nomination Name Allowance Directors Committee Committee Manage- Gover- & Remu- ment nance neration Committee Committee Committee Bonus Total
Dr.Apichai Boontheerawara Dr.Somsak Pratomsrimek Dr.Kritsana Sukboonyasatit Mr.Chanvit Amatamatucharti Total
200 200 200 200 2650
170 210 180 180 2620
100 60 60 220
1460
- 30.0 30.0 - 110.0
- - - - 210
50 - 30.0 - 110.0
1,606.46 1,606.46 1,606.46 1,606.46 2,1096.00
2,126.46 2,106.46 2,106.46 1,986.46 28,476.00
2) Executive Remuneration In 2017, the Company paid remuneration to executives as salary and bonus in total amount of THB 69.88 mm as table below;
Executives Compensation
2. Other Remunerations
No.of Executives 5
2016 Amount (THB mm) 69.88
The Company has provided fund program in which the Company contributes the amount of 4% - 10% of salary. In 2017, the Company contributed into the provident fund for the Company’s Executives of THB 4.27 mm.
Personnel
1. Number of Employees
As of 31 December 2017, the Company employed 103staff members.
The Company
Executives Business Development Department Logistics and Building Development Department Operation Department Accounting Department Corporate Finance and IR Department Human Resources Department Legal, and Land Departments Procurement, and IT Department Executive Secretary Quality Assurance Executive Officer Total
2. Material labor dispute during the past 3 years
3. Remuneration of personnel (excluding executive)
No. of Employees
4 9 28 17 15 7 6 7 4 3 1 2 103
- None -
Officers of the Company receive remuneration in form of, among others, salary, bonus, overtime wage, provident fund allowance, social security allowance and compensation fund allowance. Officers also receive other welfares, such as annual public holidays, maternity leave, ordination leave, medical allowance and funeral assistance. The details of Personnel Remuneration which contributed in cash for 2017 were as follows;
Remuneration
Salary Bonus Provident Fund Contribution Social Security Contribution Compensation Fund Allowance Overtime Total
Amount (THB mm)
64.46 21.65 3.01 0.84 0.01 0.86 90.83
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4. Policy on development of employees
The key vision of WHA group aims to be the learning and sustainability organization by enabling the various theoretical knowledge brought to the innovative working environment. The initial vision is also the pillar of every employee to develop themselves in respect of to be the knower, fully capability, innovative ideas and keeping up the trend timely so as to be responsible for their duties efficiently as well as driving the business in a sustainable way forward. The development roadmap is under the umbrella of the Human Resources Department in collaboration with Chulalongkorn University and Thammasat University to uniquely customize the curriculum for the top through the middle executives in order to sharpen the Leadership Competency and the Readiness of Business Challenges Acumen. The array of development models is consisted of the various theoretical frameworks, executions, onthe- job training concepts including the innovative activities to brighten the future leader. Last but not least, the mentioned above are the concept tailored for the leaders and officers are able to collaboratively design their development plans. The average of employees’ training hour of the company in 2017 is 33 hours/person.
Investment Policy in Subsidiaries, Associated Companies, Property Fund and Real Estate Investment Trust The Group of Companies has the policy of investment in the companies that engage the same business as the core business and related business of the Group of Companies, such as industrial estate business, real estate business, utility business, power business, and renewable energy business, to increase the earnings and competitiveness for the Group of the Companies. However, in management of the subsidiaries and associated companies, the Group of Companies will appoint the representative from the Group of Companies to be involved as the director of those companies in appropriate proportion for governing the operations of the subsidiaries and associated companies to be in line the proper direction and create maximum benefit to the Group of Companies. In addition, the Group of Companies also has the policy of investment in real estate business through Property Fund and Real Estate Investment Trust in the proportion of not more than 20% of total investment units or unit trusts (as the case may be) to generate steady dividend income annually. Nevertheless, the investment in Property Fund and Real Estate Investment Trust will depend on the requirement for investment and fundraising amount from sales of assets to Property Fund and Real Estate Investment Trust during such period. Therefore, the investment in Property Fund and Real Estate Investment Trust may be different from the determined investment policy. Moreover, the Company has no control and no participation in determining the policy of Property Fund and Real Estate Investment Trust.
[ Management and Corporate Governance ]
CORPORATE GOVERNANCE The Company is aware of undertaking its business with responsibility and fairness and recognizes the importance of good corporate governance and management which will enhance its competitiveness in management by focusing on sustainable growth to add value in a long term to the Company, its shareholders and all stakeholders. The good corporate governance will help the Company gain transparency and verifiability in business operation. The Company set the good corporate governance policy for directors, management and officers to use as the work guideline. The corporate governance of the Company will be reviewed annually and approved by the Board of Directors. The latest revision was made on March 24, 2017 by applying the OECD Principles of Corporate Governance to the Company’s guideline, and applying CG Code year 2017 from Securities and Exchange Commission, Thailand.
Corporate Governance Policy
The Good Corporate Governance Policy of the Company is divided into 6 categories as follows:
1. Rights of the Shareholders
The Company takes as a priority the right of shareholders to complete and accurate information in a timely and fair manner to support their decision making. The Board of Directors therefore sets the policy as follows. (1) The Company shall send a notice of shareholders’ meeting together with sufficient data in supporting documents on various agendas with objectives, reasons and opinion of the Board of Directors on each of the agenda in order that the shareholders will have the opportunity to study the full information at least 30 days in advance. In case that the shareholders cannot attend the meeting by themselves, the Company allows the shareholders to appoint an independent director or any person as a proxy to attend the meeting by using the proxy form as enclosed in the notice. The shareholders can also download the proxy form from the Company’s website. (2) To fairly facilitate all shareholders in attending the shareholders’ meeting in terms of appropriate venue and timing. (3) In shareholders’ meeting, agenda items will be considered and voted in order as specified in the notice without change of material information. Shareholders are given equal opportunity to review the Company’s business performance, make enquiries, and present their views and suggestions. Directors and relevant management will attend the shareholders’ meeting to answer questions raised in the meeting. (4) To increase channels for shareholders to access to information through website of the Company on which the information and details are uploaded. In particular, the notice for shareholders’ meeting will be disseminated at least 30 days in advance so that the shareholders can conveniently and fully download information and agenda. (5) The Company has the policy that directors, top management and auditor will attend the shareholders’ meeting to provide answers and acknowledge opinion from the shareholders. (6) Recording the minutes of shareholders’ meeting will be made in full, on time and transparently. Material questions and opinion will be recorded in the minutes so that the shareholders will be able to review. In addition, the Company will upload the minutes of shareholders’ meeting in the Company’s website for shareholders’ consideration. The Company will submit the minutes of shareholders’ meeting to the Stock Exchange of Thailand within 14 days from the date of shareholders’ meeting. WHA Corporation Public Company Limited
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2. The Equitable Treatment of Shareholders
(7) To facilitate shareholders to receive the dividends by transfer to bank account (in case of dividend payment) for convenience of shareholders in receipt of dividend on time and for prevention of cheque being damaged, lost or delayed. (8) The Company has policy to give an opportunity to shareholders to propose agenda and/or submit questions on the agenda in advance in order that the shareholders will gain ultimate benefits from the meeting as well as to fully preserve the rights of shareholders. This can be done via email or facsimile to the Company Secretary. (9) The Nomination and Remuneration Committee will consider scope of works, responsibility, completion of work and business performance as well as other factors including remuneration of directors of other companies in the same industry for determination of the remuneration of directors. The Nomination and Remuneration Committee will firstly consider the remuneration of the Board of Directors prior to submission to the Board of Directors for further approval. The Company shall treat shareholders equally. Therefore, the Board of Directors has the following policy. (1) The Company shall send the invitation of meeting together with supporting information to the shareholders at least 30 days in advance in order to give an opportunity to the shareholders to fully study information prior to the shareholders’ meeting date. (2) The voting right in the shareholders’ meeting shall be in accordance with a number of shares held by shareholders. One share will have one vote. In addition, the Company allows the shareholders who attend the meeting after commencement of the meeting to vote for agenda being considered for agenda which are under consideration and has not been voted, and the vote of such shareholders will be included in the quorum. (3) With regard to the agenda item on the of directors to replace those who resign by rotation, the Company has policy to give an opportunity to the shareholders to vote on each individual director. This means that the shareholders will have the opportunity to truly select the directors of their choice and preference. The Company will enclose the details of the nominated directors enough for shareholders’ consideration. (4) The Company will allow a shareholder who holds shares representing not less than 0.05% of the paid-up capital for not less than 12 months consecutively to propose via the email or facsimile to the Company Secretary agenda items the annual shareholders’ meeting and nominate a qualified person to serve as a director. (5) The Company will set the preventive measures on insider trading of related persons which mean the Board of Directors, top management and officers in division which may be involved in the Company’s information (including their spouse and minor child). (6) The Company will set the policy on conflict of interest on the basis that decision making of personnel at all levels will be made to the ultimate benefit of the Company and it shall be the duty of all personnel to avoid any financial involvement and/or relationships with third parties which may result in the Company’s loss of benefit or cause the conflict of interest or prevent any effective performance of duty. The related persons or connected persons shall inform the Company of relationship or connected transactions and shall not participate in decision making and shall have no authority to approve such transactions. The approval on such transactions shall be in accordance with principle and have no more special terms and conditions than those of ordinary case.
(7) To facilitate the shareholders who cannot attend the meeting by themselves by allowing the shareholders to give a proxy to any person or permit at least 1 independent director to attend the meeting and notify the name of such independent director in the notice of meeting. (8) To treat shareholders equally, no matter whether they are major shareholders or minority shareholders, or they are Thai or foreigners.
3. Conflict of Interest
4. Roles of Stakeholders
The Company realizes the importance of transparency when considering matters taking into account the benefit of the Company. Therefore, the Company gives high priority to prevention of any transactions that could turn into conflict of interest, connected transactions, or related transactions, and imposes a policy for this purpose with material details as follows. (1) The management and the officers shall strictly comply with the Code of Conduct to earn trust of all stakeholders and disclose the information for understanding to all officers of the Company. (2) Directors and the management shall inform the Company of relationships or connected transactions which may cause the potential conflict of interest. (3) Connected transactions shall be submitted to the Audit Committee for consideration prior to submission to the Board of Directors for further approval in accordance with the good corporate governance. Compliance with the rules prescribed by the SET and the Office of the SEC shall be monitored. The Company recognizes and is aware of the rights of all stakeholders, whether they are insider stakeholders, i.e. shareholders, officers, or outsider stakeholders, i.e. customers, partners, creditors, competitors, public section or agencies as well as nearby communities as the Company earns the support from stakeholders which enhances the competitiveness and profitability and it is deemed as a long-term value to the Company. The Company set the following policy: (1) Policy on treatment to officers The Company realizes that officers are key factors to achieve the Company’s target. The Company has policy to treat all officers fairly in respect of opportunity, remuneration, appointment as well as development of potential. To this ends, the Company has the following practices: 1) To treat officers with politeness and respect by taking into account the individualism 2) To give officers the fair remuneration, set up provident fund for officers and provide welfare 3) To preserve the work environment with safety to life and assets of officers 4) To appoint, promote or demote, give bonus and penalize officers at good faith and on a basis of their knowledge, capability and appropriateness of such officers 5) To give extensive and constant opportunity in respect of knowledge management and competency to officers to develop the officers’ capability to empower officer to their full potential with professionalism 6) To acknowledge views and suggestions which are based on officers’ professional knowledge 7) To strictly comply with relevant laws and regulations governing officers 8) To treat fairly and appropriately with officers’ remuneration by considering officer’s knowledge, competency, qualification, appropriateness of performance, individual performance evaluation based on Balanced Scorecard, survey result of labor market in a way that is seen as internally fair and externally competitive, as well as company’s performance from each year earing profits. WHA Corporation Public Company Limited
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(2) Policy and Treatment to Shareholders The Company recognizes that the shareholders are the owner of business and the Company has the duty to enhance a long-term shareholders’ value as follows: 1) to perform fiduciary duty and make decision in accordance with professional principles with due care and fairness to both of major and minority shareholders to the ultimate benefit of overall shareholders. 2) to constantly and fully present the report on the Company’s status, business performance, financial status, accounting and other reports 3) to prohibit the exploitation of benefit to themselves or third parties by using of the Company’s information which is not disclosed to the public or do any acts and things which may cause the conflict of interest with the Company follows.
(3) Policy and Treatment to Customers The Company recognized the importance of customers and set the policy to treat customers as
1) to serve customers with politeness, eagerness and readiness to provide service with sincerity and willingness and care, take care of customers as closed cousin, and provide services on timely, accurate and reliable basis 2) to keep confidential the customers’ information and not to use for its own benefits or related persons unduly 3) to give accurate, sufficient and timely information to customers on services of the Company to customers without exaggerate advertisement which may mislead customers regarding qualities or conditions of the Company’s services 4) to provide suggestions on the Company’s services to the best benefit of customers.
(4) Policy and Treatment to Partners and/or Creditors The Company has the policy to officers to treat customers and/or creditors fairly and at good faith without taking advantage over competitors by taking into account the Company’s ultimate benefit and mutual fair treatment to avoid situation which may cause the conflict of interest. Negotiation for settlement will be conducted on the basis of business relationship under the following practice: 1) not to claim or receive or pay any benefits in bad faith to partners and/or creditors 2) in case that there is any information that the claim, receipt or payment of any benefits was not made in good faith, details must be disclosed to partners and/or creditors and the problem shall be settled fairly and timely 3) to strictly comply with conditions as agreed upon. In case of non-compliance with any agreements, creditors shall be informed in advance to jointly find the solution. (5) Policy and Treatment to Competitors The Company has the policy to treat competitors without breaching the confidentiality or knowing the confidentiality of competitors with fraud and set the following policy: 1) to follow the rules on competition 2) not to seek confidentiality of competitors by bad faith or inappropriate means. 3) not to destroy competitors’ reputation by malicious accusation.
(6) Policy and Treatment to Societies/Communities The Company has the policy on undertaking of business which renders benefits to economy, society and adheres to the principle on being a good citizen. The Company fully complies with laws and participates in activities which will promote or enhance the quality of life of societies and communities. In addition, the Company has the policy to return profit to society by allocating budget from the Company’s income to support activities which will benefit societies, communitiesand environment as appropriate and it will proceed with this annually. In 2015, the Company donated money to support education, educational equipment, and other necessary things and gave lunches to students of the school located in area that the Company invested in. In addition, the Company held activities in its organization to support and cultivate consciousness of all level officers in sharing, such as activities to receive old calendars to support Foundation for the Blind in Thailand for bringing them to be used as the media for teaching to the blind and activity to give donation to temple. (7) Policy on Welfare and Healthcare to Officers The Company recognizes the importance on preserving good work environment with safety to life and assets of officers by strictly complying with labor law, such as maintenance of buildings and office equipment in good condition and health, provision of necessary medical care services, setting rule on wearing of safety equipment on construction site as well as creating the awareness to all level officers on value and importance of constant workout. The Company arranges the healthcare welfare to officers as appropriate, such as sport activity on every Tuesday and Thursday, annual health check. (8) Environment Policy The Company has the policy to support activities to promote quality, health and environment as well as work environment with safety to life and assets of officers. In addition, the Company realizes on giving knowledge and training to officers on environment and efficient use of resources, such as recycle of paper with one page used, recycle of files and campaign on electricity turn-off during lunch, using ladder instead of elevator, maintenance of equipment for readiness to use and for good safety and work environment and for enhancement of work efficiency of officers in organization. (9) Intellectual Property Policy The Company has the clear policy not to infringe the intellectual properties, irrespective of copyright, patent, trademark, trade secret and other intellectual properties prescribed by law, such as infringement of computer software. All computer software must be investigated and downloaded by the information technology division to prevent illegal usage of software. (10) Policy on Legal Compliance and Human Rights The Company has policy against any infringement of human rights in all respects to be consistent with the society under the rule of laws. Citizen has the freedom right under the law. The practice of the Company is as follows: 1) The Company respects and treats all stakeholders with fairness, on the principle of human dignity, without discrimination on origin, citizen, sex, age, skin color, religion, body condition, status, family and promotes monitoring of treatment in accordance with terms on human rights in the Company. 2) To act against any human trade, use of child labour with age under those prescribed by law and not to do any transactions with manufacturer or service provider who does as such. 3) To support and respect human right by reviewing and controlling the business transaction of the Company with third parties not to promote or support the violation of human right and not to violate the staff’s right protected by law. WHA Corporation Public Company Limited
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(11) Policy on Fraud and Anti-Corruption The Company expresses its intention to join the private sector on anti-corruption group which is held by joint effort of Thai Institute of Directors, Thai Chamber of Commerce, International Chamber of Commerce, Thai Listed Companies Association and The Thai Bankers’ Association since January 30, 2014. The Board of Directors set the policy on anti-corruption as follows: 1) To set the appropriate check and balance structure among procurement division, accounting division, management division and audit division to prevent misuse of authorities. 2) To train officers on knowledge, policy and practice on anti-corruption of the Company. 3) To support and cooperate with public sector organization and regulatory authorities as well as all sectors in the Thai society with the aim to reduce corruption and enhancement of country development. 4) To prohibit director, executive and officers from any forms of direct or indirect corruption, i.e. receipt of gift, giving gift, wining and dining, donation and any other benefits to themselves from partners of the Company. The Company expresses its intention to join the private sector on anti-corruption group which is held by joint effort of Thai Institute of Directors, Thai Chamber of Commerce, International Chamber of Commerce, Thai Listed Companies Association and The Thai Bankers’ Association. On 18 August 2017, Thai Institute of Directors acting as the secretary of CAC had the resolution on the CAC Meeting to certify WHA Corporation Public Company Limited to be the member of Private Sector Collective Action Coalition Against Corruption Council (CAC) onward. The Company has the channel for interested persons to inform, suggest or complain in case of corruption or any acts which is not in compliance with the Company’s rules to the Board of Directors by sending a letter to the below address: a) To Audit Committee Email: auditcommitee@wha.co.th
b) To Chief Executive Officer
Email: info@wha.co.th
The Company is strongly aware to security and damage of complainer by keeping complainer’s personal information confidentially whereas they will be treated fairly and appropriately.
5. Disclosure of Information and Transparency
The Board of Directors has the policy to accurately, fully, sufficiently, constantly and timely disclose financial information memorandum and others on business and the Company’s performance which reflect the financial condition and performance of the Company including the future business of the Company. The Board of Directors has strong intention to supervise to strictly and transparently comply with laws, regulations and rules in relation to information disclosure and distribute the information via the Company’s website, SET’s disclosure media in order that shareholders and relevant persons will receive the information of the Company and will adjust it to be in line with the applicable guideline of SET and the Office of the SEC. The Company procures staff responsible for communication with investors, shareholders as well as institutional investors and minority shareholders. The Company will regularly hold the meeting for analysis of business performance and disclose information of organization and financial information and general information to investors, securities analysts, credit rating agencies and relevant governmental authorities via various channels, such as reporting to SET, the Office of the SEC and website of the Company. Moreover, the Company recognizes the importance to regularly disclose the information in order that the shareholders continually receive information via the Company’s website. The information thereof will be constantly updated, such as vision, mission, financial statements, public relation news, annual report, corporate structure, management, shareholding structure and major shareholders.
In addition, the Company realizes the importance of financial statements which truly reflect the financial status and performance of the Company on the basis that the accounting information must be correct, complete and sufficient per the generally accepted accounting principles. The Company will disclose information regarding each of directors as well as roles and duties of the Board of Directors and the committees of the Company in the Annual Report (Form 56-2) and Annual Report (Form 56-1) and will disclose remuneration of directors and top executive in Annual Report (Form 56-2) and Form on Annual Information Disclosure (Form 56-1).
6. Responsibility of Board of Directors and Committees
(1) Structure of Board of Directors The Board of Directors has responsibilities to the shareholders on business undertaking, supervision of business to its goal and guideline to maximize the shareholders’ value by taking into account benefits of all stakeholders. As of December 31, 2016, the Board of Directors of the Company comprises 13 persons/1 as follows. a. Directors who are executives numbering 9 persons/1 b. Directors who are not executives numbering 4 persons inclusive of 3 members of the audit committee. Remark /1 One Director, who was executive, has passed away, and his vacating office was on expiration of office term dated 9 Febuary 2018
Although the Chairman of the Company is the Chairman of the Executive Committee, the consideration on material issues will be screened by the Executive Committee and, if it exceeds the authority of the Executive Committee, it will be submitted to the Board of Directors. With regard to the structure of the Executive Committee, 3 out of 3 executive committee members are not related to Chairman of the Board, Chairman of Executive Committee and Chief Executive Officer. And, in the Board of Directors, 10 out of 11 directors are not related to the Chairman of the Board of Directors and Chairman of Executive Committee. The Company also has the audit committee’s which comprises 3 independent directors, or one-thirds of all directors. The Company also provided for the scope of authorities of the Board of Directors, committees and Chief Executive Officer in writing to set the clear scope of works and responsibilities of Committees which reflects the transparency and due care in making decisions. (2) Roles, Duties and Responsibilities of the Board of Directors The Board of Directors has the duty to perform in accordance with law, objectives, articles of association and resolution of shareholders’ meeting by performing the fiduciary duty and duty of care to the benefit of shareholders and stakeholders in long term and short term to ensure that the Company operates the business in the direction that maximizes the benefit of shareholders and stakeholders. The Board of Directors will monitor to procure the preparation of vision, mission, target, policy, direction, strategic plans, work plans and annual budget of the Company. The Board of Directors will share opinions to ensure mutual understanding of the overall the business prior to giving approval and shall follow up the management to meet target by adhering to guidelines as set forth by the SET and the Office of the SEC.
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(3) Nomination of Directors Nomination and Remuneration Committee is responsible for director nomination by considering of diversity on qualification, experiences, appropriateness, and skill as director. The appointment of new director shall be complied with Public Company Limited Act. The criteria of director nomination are follows: 1) The nominated director shall have knowledge, competency and experience of company business including professional and specific skill, education, age and gender 2) The nominated director shall have leadership,vision, ethic, good attitude to company as well as time to devote themselves to company 3) The nominated director shall not be in Black list from any organization including the securities and exchange commission or have been sentenced to any crime 4) In case of independent director, the nominated director shall be qualified with independent director qualification 5) To consider any other qualifications based on Board’s structure and component and company’s direction through transparent nomination process to build trust with shareholders After nomination process, the Nomination and Remuneration Committee shall propose the nominated director to Board Meeting for appointment as required by law. In case of the appointment shall be approved by shareholder meeting. The Board shall be proposed to shareholder meeting for approval. The Company has prescribed qualification of independent director who have well knowledge in Finance, Economic, Accounting, public administration and other field of businesses suitable as standard factors to safeguard benefit of the shareholders and others. Additionaly, to have highher qualification compare to the qualification according to such prescribed in regulation of SET and SEC which the Company’s Independent Director’s Definition as follows : 1. holding share not exceeding 0.5% of paid up capital of the company, subsidiaries, associates or related companies or juristic persons with potential conflict of interest including also share held by related persons. 2. uninvolved in management, not being an employee, staff, consultant earning permanent salary in the company or the company’s management, its subsidiaries, associates, related companies or other persons with potential conflict of interest except in the case that such interests finished at least 2 years prior to the appointment date. 3. shall have no blood relationship or relationship through legal registration in the forms of parents, spouse, siblings and children, or children’s spouses with executive directors, management, controllers, or major shareholders of the company or its subsidiaries of executive directors, management, controllers, or the persons who are nominated for an executive position or executives of the company or its subsidiaries.
4. not holding business relationship with the company, principal company, subsidiary companies, affiliated companies, major shareowner, or person holding controlling power of the company, which may hinder the exertion of his/her independent discretion, and not being or having ever been a shareowner, with significant implication, or person holding controlling power of the person holding business relationship with the company, principal company, subsidiary companies, affiliated companies, major shareowner, or person holding controlling power of the company, unless having vacated from said tenure for not less than two years before appointment as an independent director. Business relationship as in first paragraph shall include the normal course of trading transaction for business undertaking, lease or grant of lease of immovable asset, transactions relating to asset or service, or grant or receipt of financial assistance through acceptance or grant of loans, guaranty, grant of asset as guaranty for loans, including other similar behavior, thus making the person applying for permission or a contract party liable to payment of debt to another party, from 3 percent of net tangible assets of the person applying for permission, or from Baht 20 million or over, whichever is lower. The calculation of debt burdens as referred to above shall comply with the valuation of connected transaction in compliance with the notification of the Capital Market Supervisory Board on the criteria of the connected transaction, with the respective differences having been considered (mutatis mutandis). However the consideration of the said debt burdens shall include the debt burden incurred within one year before having business relationship with the same person. 5. shall not be or used to be auditors of the company, its subsidiaries, joint venture companies, the major shareholders or the company’s executives. The Independent Directors shall not be major shareholders, executives or business partners of juristic person under the management of the auditor of the company, its subsidiaries, joint venture companies, major shareholders or the company’s executives except when such activities finished at least 2 years prior to the appointment date. 6. shall not work or used to work in a profession that included law and financial consultant services and asset appraising, which receives service fees of over 2 million baht per year from the company, its subsidiaries and joint venture companies or major shareholders or the company’s executives. In the case that the profession is registered as a person juristic, this rule covers the case of being the major shareholder, executives, or business partner of that professional service, except such services ended at least 2 years prior to the appointment date. 7. not being the director who is appointed to safeguard benefit of the company director, major shareholder or shareholder who is related to the major shareholder of the company. 8. able to perform his duties and express comment independently. 9. Independent directors can serve as directors of the Company for a period of no more than 9 consecutive years. 10. At least 1 independent director shall be a female.
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(4) Meeting of Board of Directors Regular attendance of meetings of the Board of Directors is an important duty of the directors to acknowledge and participate in decision making on business undertaking of the Company. In each year, there will be at least 4 meetings of Board of Directors. At each meeting, the agenda will be clearly prepared in advance. A special meeting of Board of Directors may be held to consider urgent matters. For the Board of the Directors’ Meeting, the document for the said Meeting shall be distributed to the Directors for acknowledgement and consideration in advance 5 working days before the said Meeting occurs. However, for the confidential agenda will be revealed to discuss in the said Meeting. Top executives of the Company may attend the Board of Directors’ meetings to give information which may be useful and directly take policy from the Board of Directors. The Company also has the policy that the non-executive directors will have a meeting at least once a year. It is intended that the non-executive directors have the opportunity to meet with one another to discuss issues of their interest without attendance by the executive or management. In determining the agenda for Board of Directors, Executive Committee will consider issues which will be the agenda in the Board of Directors’ meetings. All executive directors are able to propose any agenda and independently and freely give an opinion and the Company Secretary will prepare such issue to be the agenda of the Board of Directors’ meetings and prepare notice of Board of Directors’ meetings. The approval in the Board of Directors’ meetings will be made by majority votes and one director has one vote. Interested director will not attend the meeting or refrain from voting on such agenda. After the end of the meetings, the Company Secretary will prepare the minutes of the Board of Directors and submit it to the Chairman to sign and will propose it to next Board of Directors’ meeting for certification. The directors may give their opinions on revision of the minutes of the Board of Directors’ meetings in order that the details of the minutes will be accurate as much as possible. The certified minutes of the meetings will be systematically kept as classified in electronic form for ease of searching. (5) Orientation of New Directors In performing duty of director, the director must understand the nature of business of the Company. Therefore, in case of change of directorship, the Company will arrange the orientation for a new director to have him/her understand the nature and guideline on business operation as a whole and will give the material information memorandum and corporate governance guideline necessary for performance by director of the duty. The Company Secretary will coordinate for such orientation. (6) Policy on Restriction on Number of Companies and Number of Terms of Director The Company has the policy for its directors to serve as director in other listed companies at no more than 5 companies without exception. All directors currently serve as director of no more than 5 listed companies. Moreover, the Company has the policy that Chief Executive Officer shall not be a director in other companies in the same or similar type of business except related companies and/or subsidiaries to ensure that the Company will have no conflict of interest. Independent directors can serve as directors of the Company for a period of no more than 9 consecutive years. The Board of Directors considers this policy is appropriate in respect of the performance by directors of duty as nomination of qualified directors is the time-consuming process.
(7) Evaluation of Performance of Board of Directors The Company provides for the annual self-evaluation of directors to jointly consider and conclude the performance for reviewing operation, problems and obstacles and seeking solutions. The Company set the guideline for evaluation of the Board of Directors as a whole pursuant to the evaluation guideline of the SET. The result of the evaluation will play an important role in developing the efficient performance of duty of the Board of Director. The evaluation form outlines the following topics. 1. Satisfaction regarding the following: 1) Result of performance of the Board of Directors as a whole, 2) Result of business operation of the Company, and 3) Proceeding with solving the problem by the management. 2. Understanding on 1) Role and Duty 2) Company’s Business and 3) Company’s Strategy 3. Good relationships between the Board of Directors and Management 4. Efficiency of subsidiary and committees 5. Sufficient and appropriate time allocation by the Board of Directors to consider the following issues: 1) Policy and direction of the Company 2) Business performance of the Company 3) Solution in case of non-achievement 6. Preparation by the Board of Directors to attend the meeting 7. Independence of the Board of Directors in expressing the opinion 8. Neutral opinion of the Board of Directors 9. Opportunity and support given by the Chairman to every director to independently express his opinion 10. Opinion of the Board of Directors on investors’ confidence to the Board of Directors 11. Acceptability among officers on corporate governance practice of the Company The Company Secretary will provide the evaluation form to directors at the end of each year and will collect the same and report the summary to the Board of Directors for further consideration and discussion annually. (8) Succession Plan The Company recognizes the importance of succession plan. The Company, therefore, prepared the succession plan to cover significant positions by selecting qualified persons to serve in such positions and arranging the training for readiness to serve such positions in the future and ensure that the Company will have knowledgeable and capable executive to succeed such significant positions in the future.
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(9) Risk Management The Company will assign Risk Management Committee to be in charge of setting up a working group comprising the Company executives to jointly discuss and regularly evaluate the risk in the organization for inside and outside risks and set risk management measures. Working group will monitor the risks as identified with support from various divisions and report the result to Risk Management Committee for acknowledgement. Risk Management Committee will, subsequently, evaluate the efficiency in respect of risk management and report it to the Board of Directors at least once a year to identify the weakness and to adjust the policy with more efficiency.
7. Promoting of knowledge to directors, Member of Audit Committee, Executive, Secretary and Officers
(1) The Company provides a policy to support Directors, Member of Audit Committee, Executive, Secretary and officer to participate training relating to governance system, business ethics. In order to improve working continually, especially, directors and company secretary so as to promote them to participate in training courses from IOD. (2) The Company provides the director manual as to support new director to perform his/her duties effectively. (3) The Company promotes to conduct the executive development plan which CEO shall report such plan to Board of Director annually. (4) In case that CEO or high level executive could not perform his duties or retiring and mitigation of risk and impact for business continuity. The Company provides training and development plan to executive so as to gain profound and experience, and readiness for working.
8. Code of Conducts
9. Director’s Remuneration
The Company has developed the Code of Business Ethics. As the guideline for the board, management and officers to understand the ethical measures that companies use in conducting business. The Company will follow frequently the Code of Business Conduct in compliance with the Code of Business Ethics. I n addition, the Company’s Code of Business Ethics has been published through the company’s website as well. The Nomination and Remuneration Committee will consider remuneration for Board and sub-committee before propose to annual shareholder meeting for approval. The remuneration is in line with the market, industry, and information from the Stock Exchange of Thailand. For the remuneration of senior management and the Managing Director is the Executive Committee’s authority of.Taking into account the internal rate, employment in the market labor, work effectiveness, performance, including the necessity of hiring to the Company. The aforementioned conditions are an appropriate complement to attract and retain qualified employees for the benefit of the Company.
Committees The Board of Directors set up the committees to perform the specific duties and to propose matters to the Board of Directors to consider or acknowledge and provided for the qualifications and scope of duties of committees as follows.
1. Executive Committee
2. Audit Committee
3. Risk Management Committee
4. Corporate Governance Committee
5. Nomination and Remuneration Committee
6. Company Secretary
Executive Committee consists of a group of persons of not less than 3 who are authorized by the Board of Directors to screen the business plan and budget the Company prior to submission to the Board of Directors and will coordinate with the management in undertaking the ordinary course of business in accordance with business plan and budget the Company. Audit Committee consists of 3 independent directors. All of them have the knowledge, understanding and experience. At least one member of the Committee must have accounting knowledge, expertise and experience. The Audit Committee will ensure that the Company has accurate and sufficient financial statements and appropriate and efficient internal control system. The Audit Committee has scheduled the meeting at least 4 times a year. Risk Management Committee consists of 3 persons with scope of authorities to study, review and evaluate associated risks and trend which may affect organization as well as inside and outsider risks of the Company and set the risk management policy and propose it to the Board of Directors. Corporate Governance Committee consists of 4 persons with scope of works to review, revise corporate governance policy to be proposed to the Board of Directors for consideration. The corporate government policy will be in line with the guidelines of the SET and the Office of the SEC. Nomination and Remuneration Committee consists of 3 members with scope of authorities and responsibilities to nominate qualified persons to serve as directors and top executives and propose them to the Board of Directors or shareholders’ meeting (as the case maybe) as well as proposing principles and guidelines to clearly, fairly and appropriately fix remuneration for directors, committee members and top executives in line with their responsibilities, to the Board of Directors for consideration. Nomination and Remuneration Committee has scheduled a meeting at least 2 times a year. The Board of Directors appointed Mr. Sirisak Kijraksa as the Company Secretary with scope of works to assist in preparing agenda of meetings and preparing notice of meeting, to take care of holding the Board of Directors’ meetings and shareholders’ meetings and keep documents as required by law and to arrange directors and the Company to fully and transparently disclose information memorandum. The Company Secretary is a person whom the Board of Directors is of the opinion that he is qualified to serve as the Company Secretary.
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Nomination of Directors and TOP EXECUTIVEs Nomination and Remuneration Committee consists of 3 members with scope of authorities and responsibilities to nominate qualified persons to serve as directors and top executives and propose them to the Board of Directors or shareholders’ meeting (as the case maybe) as well as proposing principles and guidelines to clearly, fairly and appropriately fix remuneration for directors, committee members and top executives in line with their responsibilities, to the Board of Directors for consideration. The appointment of new director shall be complied with Public Company Limited Act. The criteria of director nomination are follows: 1) The nominated director shall have knowledge, competency and experience of company business including professional and specific skill, education, age and gender 2) The nominated director shall have leadership, vision, ethic, good attitude to company as well as time to devote themselves to company 3) The nominated director shall not be in Black list from any organization including the securities and exchange commission or have been sentenced to any crime 4) In case of independent director, the nominated director shall be qualified with independent director qualification 5) To consider any other qualifications based on Board’s structure and component and company’s direction through transparent nomination process to build trust with shareholders After nomination process, the Nomination and Remuneration Committee shall propose the nominated director to Board Meeting for appointment as required by law. In case of the appointment shall be approved by shareholder meeting. The Board shall be proposed to shareholder meeting for approval. The Company has prescribed qualification of independent director who have well knowledge in Finance, Economic, Accounting, public administration and other field of businesses suitable as standard factors to safeguard benefit of the shareholders and others. Additionally, to have qualification according to such prescribed in regulation of SET and SEC.
Supervision of the subsidiaries and associated companies’ operations From 2015, the Company has prescribed the rules and guidelines requiring that nomination of persons to be the director in the subsidiaries and associated companies and the exercise of voting right at their shareholders’ meetings require approval of the Board of Directors except for the following cases: (1) Agenda items to be adopted by the shareholders’ meeting in accordance with the joint venture agreement to which the Company is a party. (2) Following regular agenda in the annual general meetings where the executive committee may consider on casting the vote: - To certify the minutes of the previous shareholders’ meeting - To consider and approve the report of the board of directors and performance of the past year - To consider and approve the financial statement for the year. - To consider and approve the allocation of net profits for the legal reserve fund and payment of dividends - To elect new directors to replace the directors who are due to retire by rotation - To appoint the auditor for the year
In the case of the subsidiaries, the Company prescribes the rules stipulating that the persons appointed by the Company accurately and fully comply with the rules for execution of connected transactions, acquisition and disposal of assets, or execution of any other material transactions, and that they apply the rules related to disclosure of information and execution of the said transactions in the same manner as applying the Company’s rules. They shall supervise the subsidiaries to ensure that they keep information and accounting records in such a way that makes it possible for the Company to verify and collect them in a timely manner for the purpose of preparing financial statements.
Use of Insider Information The Board of Directors recognizes the importance of good corporate governance and for transparency and prevention of conflict of interest arising from use of insider information of the Company which has not been disclosed to the public, the Company set following policy: (1) Give knowledge to directors, executive and persons with position of accounting manager or financing manager or higher position on the duty to prepare and submit the report on holding of securities, their spouse and minor children to the Office of the SEC under Section 59 and penalty under Section 275 of the Securities and Exchange Act B.E. 2535. (2) Arrange directors or persons with position of accounting manager or financing manager or higher position to prepare and submit every report on holding of securities through Company Secretary prior to filing with the Office of the SEC. The report shall be prepared and filed within 30 days from appointment date of directors, executive, or within 3 business days from the date on which securities is purchased, sold, transferred or received the transfer of such securities. (3) Arrange directors or persons with position of accounting manager or financing manager or higher position to acknowledge the material inside information which affects the change of securities price and refrain from sale and purchase of securities of the Company during the period prior to disclosure of financial statement or financial status of the Company until such information has been disclosed to the public. The Company will inform in writing directors, executive including persons with position of accounting manager or financing manager or higher position to refrain from sale and purchase of securities of the Company. Such informing shall be made at least 30 days in advance prior to disclosure of information to the public and shall wait for at least 24 hours after disclosure of information to the public. The disclosure of material information to other persons is prohibited. (4) Disciplinary action will apply in case of breach of duty on using of insider information for personal benefit. It may be done by issuance of warning letter, deduction of wage, temporary suspension of work without payment, or termination of employment to the extent permitted by law, taking into account the intention and seriousness of such violation.
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The Security Holding of the Company’s Directors The Corporate Secretary collects the Security Holding of the Company’s Directors including spouses or cohabiting couple and non-sui juris children proposing to the Board of Directors’ Meeting quarterly.
The Summary of the Security Holding of the Company’s Directors as of 2017 below: NO.OF SECURITIES HOLDING NO.
DIRECTOR
SECURITIES
AS OF 31 CHANGE DURING AS OF 31 DECEMBER 2016 THE YEAR DECEMBER 2017
1.
Mr. Somyos Anantaprayon
Share Warrants Derivateives Contra
3,327,972,629 33,292,260 -
(159,627,801) (1,910,001) -
3,168,344,828 31,382,259 -
2.
Ms. Jareeporn Jarukomsakul
Share Warrants Derivateives Contra
3,439,531,315 34,234,254 -
(153,227,801) -
3,286,303,514 34,234,254 -
3.
Mr. David Richard Nardone
Share Warrants Derivateives Contra
-
-
-
4.
Mr. Vivat Jiratikamsakul
Share Warrants Derivateives Contra
-
-
-
5.
Mr Krailuck Aswachatroj
Share Warrants Derivateives Contra
-
-
-
6.
Mr. Jakrit Chaisanit
Share Warrants Derivateives Contra
82,979,996 727,878 -
(4,479,296) 900,000 -
78,500,000 1,627,878 -
7.
Mr. Narong Kritchanchai
Share Warrants Derivateives Contra
-
-
-
8.
Mr. Somsak Boonchoyreurngchai
Share Warrants Derivateives Contra
2,060,310 23,557 -
-
2,060,310 23,557 -
9.
Mr. Arttavit Chalermsaphayakorn
Share Warrants Derivateives Contra
28,349,992 229,090 -
(23,076,500) (100,000) -
5,273,492 129,090 -
NO.OF SECURITIES HOLDING NO.
DIRECTOR
SECURITIES
AS OF 31 CHANGE DURING AS OF 31 DECEMBER 2016 THE YEAR DECEMBER 2017
10.
Dr. Apichai Boontherawara
Share Warrants Derivateives Contra
-
-
-
11.
Dr. Somsak Pratomsrimek
Share Warrants Derivateives Contra
-
-
-
12.
Dr. Kritsana Sukboonyasatit
Share Warrants Derivateives Contra
-
-
-
13.
Mr. Chanwit Amatamatuchart
Share Warrants Derivateives Contra
-
-
-
Auditor’s Fee In 2017, the Company and its subsidiaries paid compensation to the auditors and the audit firm that the auditors work for as an audit fee and non-audit fee as followed.
1. Audit Fee
2. Non-Audit Fees
The Company and its subsidiaries paid the auditors and the audit firm, PricewaterhouseCoopers ABAS Ltd., amounted to THB 15.90 mm. Apart from the audit fee, the Company paid the fees to PricewaterhouseCoopers ABAS Ltd. for the review of tax exemption privileges form submitted to the Board of Investment (BOI) in order to obtain the tax benefit at the total amount of THB 0.21 mm.
The Conduct follow by Corporate Governance The Corporate Governance Committee (CG Committee) has duties to consider, review, and revise Corporate Governance Policy every year for proposing to the Board of Directors’ consideration and approval. While CG Committee being on the review process in accordance with CG Code year 2017 from The Securities and Exchange Commission, Thailand is for the purpose of CGR Assessment reference to ASEAN CG Scorecard leading to the global standard of sustainability development.
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[ Management and Corporate Governance ]
Corporate Social Responsibilities: CSR
Overall Policies The Group of Companies has specified its operational policies on Corporate Social Responsibilities (CSR) towards the society, community, and environment in a sustainable manner through the process of disclosing “CSR In-Process” information that the Company is currently operating and organizing “CSR After-Process” activities, whereby the Company communicates through its annual reports, Code of Conduct, website, brochures, and newsletters, in order to let every stakeholders be informed about the Company’s vision, mission, and strategies about CSR towards the society and environment. The company has involved its CSR concepts into their business operations, both newly developed or current cooperative activities. In 2016, WHA Group initiated the “Clean Water for Planet” project to improve water quality, while remaining focused on CSR activities that involve its primary businesses including industrial estates, utilities and energy, and property development. Since water is of utmost importance, it is necessary to raise awareness on the preservation of this natural resource. Daily life is greatly affected by the availability and quality of water. Through effective management, people living in neighboring communities can have access to clean and safe water. In the same year, WHA Group jointly signed an MoU with Chulalongkorn University on wastewater management and wastewater treatment engineering project, for knowledge exchange. The MoU aims to support the development and training of future engineers by combining their classroom learning with practical experience in a real industrial environment -the Hemaraj industrial estates, which are part of the WHA Group. The ultimate goal is to help enhance the efficiency of wastewater management and treatment techniques to officials in Laem Chabang Municipality. In 2017, the company signed a Memorandum of Understanding with Chulalongkorn University’s Faculty of Engineering and the municipality of Laem Chabang to exchange knowledge in the field of wastewater management and treatment. This MoU, part of WHA Group’s Clean Water for Planet CSR initiative, is a collaboration between WHA Corporation and Chulalongkorn University’s Faculty of Engineering for practical training courses on wastewater management and treatment. This has been designed for the management and staff of the Municipality of Laem Chabang.
Furthermore, the company also signed a MoU with Pluak Daeng Sub-District Administrative Organization (“Pluak Daeng”) in Rayong Province, for collaboration in the field of wastewater treatment. As part of WHA Group’s Clean Water for Planet CSR initiative, this MoU agreement covers a pilot project for the construction of an ecofriendly wastewater treatment system for the community, through a Constructed Wetland in Pluak Daeng. WHA Group will provide the engineering and financing for the Constructed Wetland, with a capacity of 400 cubic meter per day. After the construction, WHA Group shoulder the expenses for the operation system and the engineering team to run it for one year. WHA Group has also continued its CSR activities in education, society and environment. Education: The company conducted several projects such as donations to improve local schools, youth scholarships, Adopt-A-School program, Art Camp at Hometown, Art Camp for Teachers, Drawing Contest, Art Camp Trip, Industrial Skill Training for Secondary School Students (for extended schools), Dual Vocational Training and Hemaraj Industrial Skill Cooperation Academy. These projects aim to develop human resources and enhance labor skills to meet the growing demand of Thailand’s industries. Social care: WHA Group provides free medical check-ups for residents through Mobile Medical Units. It also helps the youth by promoting sports through football competitions in its industrial estates and sponsorships of local soccer teams such as the Chonburi Football Club, the Rayong Football Club and Pluak Daeng Football Club. The company also provides career training and study tours for the local people, in line with the sufficiency economy philosophy promoted by the late King Bhumibol Adulyadej. Environment: The company is committed to manage their operations in an eco-friendly environment integrating factories, warehouses and facilities with nature and the local communities, in accordance with global standards. The company aims to incorporate CSR into any business, including the development of distribution centers, warehouses, and industrial estates, and services for public utility systems and real estate, such as implementing the policy of changing equipment in office buildings and warehouses to preserve the environment and reduce expenses in the long-term to create optimal benefits for the community and customers of the Group of Companies. Moreover, the Group of Companies also uses Public Participation 1 (PP1) and Public Participation 2 (PP2) policies, in which the Company meets with leaders of the communities nearby its industrial estates, to let the Company learn about the real needs of each community on the specific areas of help and support that each community requires. Since the communities’ needs in each time duration varies, the Group of Companies meets regularly with the communities, whereby these said policies will respond to and help the communities continuously and specifically by addressing the real needs of the communities. After starting the development of each project, the Group of Companies will ask the stakeholders’ opinions regarding the project, namely the communities and related state agencies, at least once a year. Furthermore, the Group of Companies sets up a procedure to listen to complaints from the communities or stakeholders through detailed series of steps and channels to gather various feedback or complaints precisely. Regarding its business operations or development of industrial estates, the Group of Companies has been focusing to incorporate CSR into the said processes, whereby the Group of Companies has used the ISO 14001:2004, ISO 9001:2008, and CSR DIW systems, which are under control of Department of Industrial Works, in all business operational processes in order to let stakeholders receive products and services that are of the highest quality and are environmentally-friendly. Throughout the course of its business operations, the Group of Companieshas always been fully aware of the importance in the development of society and environment alongside with business development. The Group of Companies has specified policies that will initiate various projects that will be beneficial to the society continuously. Hence, the Group of Companies has defined 8 policies about “Corporate Social Responsibilities” as follows; WHA Corporation Public Company Limited
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(1) Fair Business Operation
(2) Anti-corruption
(3) Human Right
(4) Fair Labor Treatment
(5) Consumer Responsibility
(6) Environment
(7) Community and Social Development
(8) Innovation and Innovation Dissemination
Transparency in business undertaking is always the Group of Companies’ priority, emphasizing prevention of transaction that could lead to conflict of interest. The company also imposes policies on employees to treat business partners, creditors, shareholders and customers fairly and without taking advantage in accordance with the Group of Companies’ corporate governance policy. The Group of Companies implements policies to deal with corruption in all circumstances. These policies are incorporated in the anti-corruption policies and guidelines section of the corporate governance principles. In order to follow the policies, on 30 January 2014 the Company declared its intent to join the Thai private sector to participate in campaigns organized by the Thai Institute of Directors in collaboration with the Thai Chamber of Commerce, International Chamber of Commerce, Thai Listed Companies Association, and The Thai Bankers’ Association to counter corruption. The Group of Companies has in place human right policies and policies to counter violation of human rights in all circumstances. These policies are included in legal compliance and human right policies and guidelines section of the Group of Companies corporate governance principles. The Group of Companies gives equal opportunity to employees of all races, languages and genders. Every step in providing services is undertaken with honesty and transparency. The Group of Companies also strictly complies with the labor laws. This policy is provided in the section of employment treatment and guidelines and the employee safety and hygiene policies of the corporate governance principles. The Group of Companies establishes the policy that focuses on doing business and treating customers (also considered consumers) with honesty, adhering to the terms under contracts made with the customers and in compliance with the standards set by law. It has a policy to provide accurate and complete information on use of warehouse building to customers as well as emphasizing keeping of customer data and information. The Group of Companies implements the policy on customer treatment and includes it in the customer policies and treatment section of its corporate governance principles. The Group of Companies establishes the policy that supports activities that will promote quality of life, occupational hygiene and environment as well as maintaining work environment in such a way to ensure safety of employee health and property. Such policy is provided in the environmental policy section of the Group of Companies’ corporate governance principles. The Group of Companies has the policy to support social activities on various occasions aiming at maximizing social and community benefit so as to help and promote sustainable quality of life of the youth and Thai society. The Group of Companies has the policy that always focuses on design innovation of environmental friendly warehouses, ranging from energy saving, production of solar energy to environment care. It also implements the policy to educate customers and related agencies about and exchange knowledge of the use of building.
Operations and Report Preparation
1. Operations
In the operations process, the Group of Companies has planned and implemented the works, whereby the Group of Companies has created the Code of Conduct to become a tool for the committees, directors, and employees to fully aware of the business ethics that the Group of Companies has used to operate the business for thorough implementation.
Risk Assessment
The committee places great importance about risk management by specifying the Group of Companies to assess risk factors in its business operations regularly, including analyzing the impact that may occur from the risks, creating defensive measures or risk reduction, and report to the risk management committee and the Company committee consistently. Moreover, the Group of Companies has incorporated its risk assessment policy into business operations, especially in the Company’s product development. The Group of Companies continuously studies and assesses its products and services that could have a potential impact on customers, such as the project to improve rainwater drainage system in the Hemaraj Saraburi Industrial Land. The objective of this project is to improve the rainwater drainage and the flood protection system inside the estate to prevent and minimize the impact to clients in Hemaraj Saraburi Industrial Land. Hemaraj has engaged a consulting engineer to survey, analyze, and assess the risks, and propose recommendations to improve the rainwater drainage and the flood protection system. After the study result, Hemaraj has adopted the measures suggested and set up a team to ensure constant follow-up, examination and maintenance of the systems, and to record data that could help reduce risks of flooding and other disasters at the industrial land efficiently. Procedures Definition The Group of Companies also emphasizes on operation and procedure, defining the procedure guidelines, controlling the inspection, operating according to international standards, and preserving the environment for stakeholders, such as: The Group of Companies focuses on innovation in designing warehouses that are environmentallyfriendly to increase product efficiency and reduce energy consumption, such as designing warehouses that can utilize natural lighting more to reduce electricity usage inside the buildings, and designing warehouses by considering the air circulation from outdoor to indoor, which will help lower the temperature inside the building. In addition, the Group of Companies also manages the sewerage system inside the warehouses before releasing into wastewater pipe that will always work with maximum efficiency. In the development of industrial estates, The company have set up the Environmental Monitoring and Control Center (ESIE) or E:mc^2 at Eastern Seaboard i\Industrial Estate (Rayong). It is considered the first center that was opened in an industrial estate, through the collaboration with the Industrial Estate Authority of Thailand, with the objective to report the information about the environment that is real-time, transparent, and can be inspected in 3 industrial estates e.g. Eastern Seaboard Industrial Estate (Rayong), Hemaraj Eastern Seaboard Industrial Estate, Heamraj Chonburi Industrial Estate. The center is equipped with an automated water quality monitoring system and is a center to gather complaints through its website, whereby various communities can inspect all the time. The Group of Companies initiated and has sold the solar PV rooftop energy to Metropolitan Electricity Authority and Provincial Electricity Authority since 2014. This project not only supports the energy conservation under the green energy concept but also provides utmost benefit to the customers as the solar cell will function as the heat insulator for roof of warehouses. Accordingly, the customers are able to preserve the goods quality and save the energy. WHA Corporation Public Company Limited
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In addition, the Group of Companies also plans to prevent pollution in the long-term, since the Group of Companies foresees the importance in preventing pollution that may occur from the Company’s business operations. The Group of Companies has specified long-term preventive measures against pollution, in which the preventive measures were generated from the Environment Impact Assessment (EIA) in various areas since prior to the start of operations, in order to expand perspectives and connect all impacts that occurred from business operations. These are then used to develop measures to prevent and reduce impact to the environment, and measures to monitor quality of the environment, whereby these various measures will cover all activities and effects that may happen from the project. However, consent from stakeholders and the Office of Natural Resources and Environmental Policy and Planning shall be received first, in order to start the operations. Moreover, Hemaraj Company has utilized the ISO 14001 Environmental Management System to manage the industrial estate, which will include a process for analyzing environmental issues that cover every activity, and can be used to define objectives, goals, and appropriate procedures to significantly prevent environmental issues. Furthermore, the system also includes monitoring of various processes and using the results to evaluate in environmental management. The Group of Companies used measures in accordance to EIA as tools to control pollution that are created in the project, by which both the project and plants must conform to the EIA of each project. Examples of preventive measures against pollution include wastewater quality standards, criteria to release pollutants from plant chimneys, and measures for industrial waste management. In the case of emergency that can create pollution, the project has emergency plan and personnel to react to particular emergency situations, as well as restoration measures to bring the environment back to its normal conditions at the earliest.
Communication with Personnel and Employees
The Group of Companies supports the work performance development of employees continuously and provides confidence in the quality of working life for employees, in order to build relationship with the organization. Apart from this, the Group of Companies also places importance to every employees regardless of which unit or department they are working in by creating good and safe working environment, paying remuneration that are suitable with the work, allow generous benefits, and source innovation and new technologies to support working alongside with environment preservation, such as; The Group of Companies has replaced the conventional HID bulbs with T5 and/or LED lights. They save 2-3 time energy despite higher cost and they last longer. The Group of Companies has implemented the royal project of the constructed wetland wastewater treatment system to use in its operations, then train the employees who are responsible for the environmental conservation of the Group of Companies and apply and transfer knowledge to people in the communities to create further value inside their communities. The Group of Companies encourages employees to save energy and resources, for instance, turning off lights, air conditioners and electrical equipment during lunch time, reuse of the other side of paper, replacing 80-gram office paper with 70-gram office paper, printing only necessary documents, etc. The Group of Companies also encourages the employees to participate in campaigns that aim to improve overall Thai society, such as promoting employees to participate in social activities organized by the Group of Companies, including the annual scholarships and support on school supplies to schools located in the areas that the Group of Companies invested in including 69 local schools, or more than 18,000 students. Furthermore, the the Group of Companies also helped communities during drought situations, in which the Group of Companies’ Safety department is the key unit in providing water to various communities that face the drought crisis, or aiding communities during emergency periods. Moreover, the Group of Companies supports every employee to participate in tree-planting activities to preserve the environment inside the industrial estates and surrounding communities.
In addition, the Group of Companies has specified guidelines in communicating with employees in both formats of employee handbook and Code of Conduct while encouraged employees to anti-corruption, respect other people’s rights, value intellectual properties and human rights.
Monitoring
The Group of Companies promotes corporate transparency in every aspects of company operation, including all the CSR activities. All the projects have been closely investigated by the Group of Companies’ executives and the Company’s directors, from the budget proposal, the operation, to the end of the project, showcased the transparency of the company without any fraud.
2. Report Preparation Process
The Group of Companies is committed to publishing Corporate Social Responsibility report on its CSR activities that the Company is currently operating, considering all stakeholders, both internal and external, including shareholders, employees, customers, creditors, suppliers and competitors, environment and society, and government agencies. Regarding the procedure or process of developing the industrial estates, the Group of Companies is required to issue regular reports according to the Environmental Impact Assessment (EIA) rules and submit these reports every 6 months to the Office of Natural Resources and Environmental Policy Planning, Ministry of Natural Resources and Environment.
Business Effect on CSR In 2017, The Group of Companies emphasizes undertaking of business that supports and does not adversely affect society and environment. It has never been subject to investigation or challenged by any related government authorities into environmental matters or any acts that could affect the environment. However, the Group of Companies has defined measures to deal with environmental complaints, as follows: 1) In case of compliant request, the company will assemble related information and conduct a primary investigation 2) Once the investigation is completed, if the case is groundless, a detailed explanation will be provided through appropriate communication channels. 3) If the case is accurate and factual, but not related to the company, the complainant will be notified and a further investigation into the real cause will be launched 4) If the case is not related to the company, a meeting of the stakeholders shall be called in order to determine the causes and effects, and look for preventive measures and solutions. Results will be communicated to the complainant through appropriate communication channels.
CSR After-Process activities a) The Group of Companies believes that children are key social foundation. Good education in parallel with cultivation of ethics and morality will help communities and society exist in a sustainable way. For this reason, the Group of Companies decided to initiate the campaign, “WHA Campaign to Motivate Children and Youth Morality” aimed to support education to the community and underprivileged youth. To do so, the Company has allocate a part of its income as a budget to give scholarship to schools in the community, build libraries and donate teaching and learning equipment to needy schools, etc. The Group of Companies is determined to pursue the said campaign. Among the notable CSR activities include “Adopt a School”, a collaboration between The Group of Companies and The American Chamber of Commerce in Thailand (AMCHAM), initiated in 2005. The “Teacher Fellowship Program” has been one of the project created to support the shortage of teachers in Rayong and Chonburi area. Moreover, the initiative project of “Teacher English Camp 2017” is to improve English language skill to those 66 school teachers. WHA Corporation Public Company Limited
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The Group of Companies in cooperation with private companies in Hemaraj’s industrial estates and other partners, held its annual outreach project to support education for the youth for 20 consecutive years.
In 2017, The Group of Companies organized CSR activities as follows; p The Group of Companies donated chairs for the school library and educational materials to the Khlong Bang Kasi School. The Group of Companies also hosted lunch and organized leisure activities for the young students, under the theme “Creating Dreams, Bringing Happiness”.
p The Group of Companies distributed care packs to senior residents and donated medical equipment total 100 sets to Tasit Municipality in Rayong Province and other activities such as free health check-up and influenza vaccines to senior citizen, free eye exams and eye glasses and free health check up,
p The Group of Companies organized community visits to Eastern Seaboard Industrial Estate (Rayong) and Hemaraj Eastern Seaboard Industrial Estate to provide information, relay updates and share thoughts that could enhance mutual understanding. Leaders, representatives and villagers 140 people from 14 communities were invited for informal talks in terms of land development and industrial estate management. The company also explained how Hemaraj’s strict factory supervision ensures that all manufacturing activities are done in compliance with the rules and regulations set by the Industrial Estate Authority of Thailand. This reassured community members that their industrial neighbors would not do anything to jeopardize their safety and health.
p The Group of Companies has organized annual CSR project for students though Art Camp since 2009. The objective is to develop the students’ interest in the arts so they can use their creativity and imagination in a positive way. Since the first workshop, the Art Camp has continuously provided basic principles and knowledge about arts to help enhance students’ skills in arts. To date, 4,309 students have participated in the Hemaraj Art Camp. The Group of Companies also initiated the “Art Camp for Teachers” program. The objective is to equip primary teachers with basic knowledge of art, which can be applied in their teachings. The program has produced 196 teachers who are able to deliver knowledge of art to students.
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b) The company is always aware that the preservation of religion and inheritance of moral traditions have importance that is no less than activities in other areas. In order to build sustainable development for the organization, society, and surrounding communities, the Group of Companies thus created a policy to promote various activities that are supportive of Buddhism religion and cultural arts, such as merit-making during important religious days, ceremony of presenting robes to Buddhist monks at the end of Buddhist Lent, as well as supporting in terms of budget for restoration of religious places. c) The Group of Companies has placed importance with every group of stakeholders and consider it as a policy to aid others when emergency situations occur to various organizations, being the public or private sectors, as well as providing support in terms of manpower and finance to operate various charitable activities as appropriate.
Anti-corruption The Group of Companies has the policy to take all measures to counter corruption and ensure that its business operates in a lawful manner. Therefore, an anti-corruption policy has been in place and is included in the anti-corruption policy and guideline section of the corporate governance principles.
[ Management and Corporate Governance ]
Internal Control and Risk Management The Company realized the importance of the continuous internal control system; therefore, aimed at applying the sufficient and suitable internal control system in order to enhance the efficiency of the operation and to protect the properties and to ensure that the accounting system and the financial statements are accurate and credible in compliance with the laws, regulations, and rules relating to the business operation of the Company. The Board of Directors assigned the Audit Committee to review the evaluation result of internal control and the risk management on annual basis. The Company acted in compliance with the principle of good governance to ensure transparency and to prevent the use of Company’s inside information that has not be publicized to seek personal benefits In the Audit Committee’s meeting no. 1/2018 on 20 February 2018, the Audit Committee evaluated the sufficiency of the internal control system for 2017 in accordance with the evaluation form prescribed by the Securities and Exchange Commission, covering five dimensions which are control environment, risk assessment, control activities, information and communication, and monitoring activities. After putting questions to the executives and internal auditors, the Audit Committee concluded that the Company’s key internal control measures, which covered the operation, risk management, and supervision by the Board of Directors and the Executive Committee, are sufficient and suitable without any significant flaws. Additionally, the internal control system for the subsidiary companies was also sufficient, that is, it could protect the properties of the Company and its subsidiary companies from being wrongfully exploited by an executive or a director and also prevent the conflict of interests. In 2017 the Company assigned Dharmniti Internal Audit Co., Ltd. to conduct the internal audit and appointed their President, Mr. Saksri Amphawan, as a head of internal audit of the Company. The Audit Committee considered that Dharmniti Internal Audit Co., Ltd. and Mr. Saksri Amphawan were suitable for the internal audit because of their independency and experience in conducting internal audit for other companies in the same business and industry as the Company. Moreover, the Company appointed Pricewaterhousecoopers ABAS Ltd. as the auditor of the Company and its subsidiary companies for 2017. After conducting inspection and evaluation on the accounting internal audit system in accordance with the general accounting standard, the auditor informed the Audit Committee that there was no observation from the auditing in 2017.
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149
p Having common major p Office-service-fee shareholders with the Company charged to the whereas: Company and its • Mr. Somyos Anantaprayoon subsidiaries. holds 52.50 percent of shares in S&J Holding Co., Ltd. • Ms. Jareeporn Jarukornsakul holds 42.50 percent of shares in S&J Holding Co., Ltd p Having common director with the Company, namely Mr. Somyos Anantaprayoon.
p S&J Holding Co., Ltd.
Type of Connected Transaction
Relationship
Person/Entity who may have conflict of interests
10,821.69
For the fiscal year ended of 31 Dec 2017
Audit Committee’s opinion
p The Company acquired the service for use of p It was deemed building space owned by S&J Holding Co., Ltd. appropriate to enter into as an office under the 3-year service agreement the transaction in order commencing from 1 January 2015 to 30 June to support the Company 2016 at the rate of THB 870,171.50 per month business. The service (excluding VAT) and from 1 July 2016 to 31 fee in 2017 was December 2017 at a rate of THB 768,971.50 per comparable to the month (excluding VAT). The service fee was market rate. charged at the rate of THB 275 per sq.m., which has been increased by 10 percent from the rate in the previous contract. Such rate was comparable to the rental rate for the area nearby. p WHA Real Estate Management Co., Ltd. acquired the service for use of building space from S&J Holding Co., Ltd. as office under the service agreement for 3 years from 1 January 2015 to 31 December 2017 at a rate of THB 31,636.00 per month (excluding VAT). This amount was charged for the service area of 115.04 square meters at the service charged rate of THB 275 per square meter, which has been increased by 10 percent from the rate in the previous contract ended 31 December 2014. This rate is comparable to the rate charged to area nearby
Transaction Necessity and Appropriateness of Amount Transaction (THB Thousand)
Connected transactions of the Company and its subsidiaries with persons who may have conflict of interests in 2017
CONNECTED TRANSACTIONS
[ Management and Corporate Governance ]
150 Annual Report 2017
WHA Corporation Public Company Limited
151
p Mr. Narong Kritchanchai is a p Legal counselor fee director and an executive of the for the Company Company (has been appointed as and its subsidiaries an executive since 24 February 2016) Accrued expenses p Mr. Narong Kritchanchai holds 33.3% of the shares in RL Counsel Co., Ltd. (as of 31 December 2017), and is the director of RL Counsel Co., Ltd.
p RL Counsel Co., Ltd.
Type of Connected Transaction
Relationship
Person/Entity who may have conflict of interests
1,421.52
6,563.25
For the fiscal year ended of 31 Dec 2017
Audit Committee’s opinion
p Due to substantial amount of complicated legal p It was deemed transactions of the Company and its subsidiaries appropriate to enter into which require specialized lawyers; however, with the transaction in order just a few legal officers in the Company along to support the Company with the limited experience and expertise, the and its subsidiaries’ Company and its subsidiaries have engaged to business and the external legal consultant in providing legal advice transaction complied on various matters to the Company and its with the normal business subsidiaries, as well as to review documents and practice. agreements relating to their business operation. p The fee as well as its The legal counselor fee charged was in the range commercial terms and of THB 2,000 - 4,000 per hour (in 2017) which conditions were was not higher than the market rate. reasonable. p The fee was comparable to and did not exceed the market rate.
p WHA Infonite Co., Ltd. acquired the service for use of building space from S&J Holding Co., Ltd. as office under the service agreement for 1 year 6 months from 1 July 2016 to 31 December 2017 at a rate of THB 101,200 per month (excluding VAT). This amount was charged for the service area of approximately 368 square meters, translating into the service fee rate of THB 275 per square meter, which is comparable to the rate charged to area nearby
Transaction Necessity and Appropriateness of Amount Transaction (THB Thousand)
152
Annual Report 2017
Necessity and Rationality of the Connected Transactions
The Audit Committee’s meeting no. 1/2018 held on 20 February 2018 has considered the connected transactions for the fiscal year ended 31 December 2017, together with the information interviewed from the management of the Company and its subsidiaries, persons and entities who may have conflict of interests for the fiscal year ended 31 December 2017, as well as the review of the auditor’s notes to financial statements. It has viewed that the connected transactions of the Company and its subsidiaries with persons or entities who may have conflict of interests for the fiscal year ended on 31 December 2017 were reasonable and was for the ultimate benefit of the Company. In addition, such connected transactions were in accordance with the normal business terms and practices and were conducted as normal business operation of the Company where there was no transfer of benefit between the Company and persons or entities who may have conflict of interests. They were also conducted in same manner as the normal person would have done with its counterparty in the same circumstance at an arm’s length basis without influence from a party who might be a person having conflict of interests (Arm’s Length Basis).
Policy and Procedure for Approval of the Connected Transactions
The Meeting of the Board of Directors No. 1/2012 held on 25 May 2012 set the policy and procedures for entering into connected transactions to ensure transparency of the transactions between persons or juristic persons who may have the conflict of interests and to protect the benefits of the Company. The policy and procedure can be summarized as follows. The connected transactions or related transactions of the Company and its subsidiaries were to be in compliance with the principle of the SEC Act and the notifications of the Capital Market Supervisory Board No. TorJor. 21/2551 Re: Rules for Entering into Related Party Transactions and the Notification of the Securities and Exchange Commission Re: Disclosure of information and Other Acts of Listed Companies Concerning to the Connected Transactions including other relevant regulations of the SEC and the SET as well as to be in compliance with the disclosure of the connected transactions in the auditor’s notes in the financial statement audited by the Company’s auditor and in the annual registration statement (56-1). For the case of the connected transactions of the Company and its subsidiaries with persons or entities who have conflict of interests or may have a conflict of interest in the future, the Audit Committee shall opine on the necessity for entering into the transaction and the appropriateness of transaction price by taking into account the conditions to be in compliance with the normal business operation in the industry and to compare with the third party’s or the market price. If the Audit Committee does not have expertise to determine the potential connected transactions, the Company will arrange for an independent advisor or the Company’s auditor to opine on such connected transactions for consideration of the Board of Directors, the Audit Committee, or the shareholders, as the case may be. To such extent, the director who has a conflict of interest shall not have a right to vote on such transaction. The connected transactions shall be disclosed in the notes to the financial statements audited or reviewed by the Company’s auditor.
Policy or Tendency for Connected Transaction in the Future
The Company may enter into connected transactions in the future as deemed appropriate by complying with the Securities and Exchange Commission Acts, rules, notification, order or requirements of the Securities and Exchange Commission and the Stock Exchange of Thailand, as well as accounting standards Re: disclosure of information in relation to related persons or activities as prescribed by the Federation of Accounting Professions. In the case where the transaction normally occurs and will continually occur in the future, the Company sets the criteria and guidelines to be in accordance with the normal business by referring to the appropriate, fair, reasonable and transparent prices and conditions, and then proposes to the Audit Committee to consider and approve such criteria and guidelines. However, to enter into connected transactions, the Company will assign the Audit Committee to opine for the appropriateness of such transactions. If the Audit Committee has no expertise on considering such connected transactions, the Company will arrange for an expertise who have specialized knowledge and proficiency on the transaction such as independent auditor or asset appraiser to opine on the connected transactions. Those comments of the Audit Committee or the experts will be considered by the Board of Directors or the shareholders, as the case may be, to ensure that such transactions will not be migrated or transferred of benefit between the Company and its shareholders, but will be for the ultimate benefit of all shareholders.
[ Management and Corporate Governance ]
REPORT OF THE AUDIT COMMITTEE TO
THE SHAREHOLDERS
WHA CORPORATION PUBLIC COMPANY LIMITED
As of 20 February 2018, The Audit Committee comprises the 3 honorable and independent members, namely Mr. Apichai Boontherawara, the Chairman of the Audit Committee, Mrs. Kritsana Sukboonyasatit and Mr. Somsak Pratomsrimek, the Audit Committee. The Audit Committee has sufficient knowledge and experience in reviewing the reliability of financial statements. In 2017, there were four Audit Committee meetings. The Audit Committee consulted with the Chairman, the Directors, the Management, the auditor, and the Internal Auditor in many occasions as appropriate, and gave independent opinion and suggestion. The Audit Committee had reported its resolution of those meetings as concluded on the following matters:
Accuracy, Completeness and Reliability of Financial Report
The Audit Committee reviewed both quarterly and annual financial reports, significant accounting policy, and sufficiency of information disclosure, including jointly considered with the Management and the auditor the auditing plan, method and identified issues. The Audit Committee viewed that the Company’s financial reports were prepared in compliance with the generally accepted accounting principles, accurate, relevance with the decision, and faithful representation, as well as the accounting policies were properly selected to reflect the Company’s operating performance and the financial position.
The adequacy of internal controls, risk management and good corporate governance
The Audit Committee reviewed the reports of the internal auditor and the auditor on the evaluation of the internal controls, risk management and good corporate governance, including gave comments on improvement of the operations as a result of the said reports. The Audit Committee viewed that the Company’s internal controls were adequate and appropriate supporting the Company’s sustainable growth. The Audit Committee reviewed the annual internal auditing program which was prepared in accordance with the Risk-Based Audit Plan that focused on auditing to identify the high impact risk in the business operations, as well as gave helpful suggestions to manage the risk at the acceptable level. The Audit Committee always consulted with the internal auditor without the management, and viewed that the internal audit was independent and appropriate.
Oversight of Anti-Corruption
The Company has been certified its membership by the Thailand’s Private Sector Collective Action Coalition Against Corruption (Thai CAC) on 18 August 2017. The Audit Committee is responsible for supervising the Company’s operation to be in line with the Anti-Corruption Policy. The Internal Audit Department is assigned to assess the risks associated with corruption, establishing criteria and measures to reduce the risk of corruption, as well as extending the scope of practice to customers and partners, such as the establishment of guidelines for the abstention of gifts.
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Annual Report 2017
Compliance with the Securities and Exchange laws, regulations of the Stock Exchange of Thailand, and laws related to the Company’s business
The Audit Committee reviewed the compliance with the Securities and Exchange laws, regulations of the Stock Exchange of Thailand, and laws related to real estate business and industrial estate business which is the Company’s core business, as well as evaluated the Management’s compliance with legal requirements on a regular basis. The Audit Committee viewed that the Company conducted in compliance with the Securities and Exchange laws, regulations of the Stock Exchange of Thailand, and laws related to the Company’s business properly.
Transactions which may cause conflict of interests
The Audit Committee paid significant attention on considering the transactions that might cause conflict of interest in order to comply with the regulations of the Stock Exchange of Thailand, as well as the relevant accounting standard in every quarter. The Audit Committee assigned the internal audit to review the compliance and reported to the Audit Committee, including evaluated the connected transactions as disclosed in the auditor’s notes in the financial statements in every quarter. The Audit Committee had the opinion that the connected transactions considered were the transactions in normal business having commercially ordinary conditions that were reasonable, fair and of optimized benefit to the Company.
Appropriateness, selection, and appointment of the auditor
The Audit Committee evaluated the independence and performance of the auditor for the year 2017 and it concluded that the performance in overall was at the satisfied level with sufficient independence. According the company has compared the audit fee last year, on selection and appointment of the audit for 2018, The Audit Committee considered the performance, scope of service, and volume of transactions compared with the audit fee in 2018 proposed by the auditor, and agreed to propose to the Board of Directors to appoint Mr. Chanchai Chaiprasit, Certified Public Accountant Registration number 3760, or Mr. Pisit Thangtanagul, Certified Public Accountant Registration number 4095, or Miss Nopanuch Apichatsatien, Certified Public Accountant Registration number 5266, on behalf of PricewaterhouseCoopers ABAS Ltd. to be the auditor of the Company and its subsidiaries for 2018.
Overall opinion and remark of the Audit Committee
The Audit Committee evaluated self-performance by evaluating the committee as a whole in 2017 in 2 parts; the overall performance of the Audit Committee, and the specific performance of the Audit Committee in the 6 areas, i.e. 1) reviewing for the completeness and sufficiency of the Company’s financial reports; 2) reviewing for efficiency and effectiveness of the Company’s internal controls and Internal audit; 3) reviewing for the Company’s compliance with the Securities and Exchange laws, regulations of the Stock Exchange of Thailand, and relevant law; 4) selecting and proposing to appoint the auditor; 5) considering the connected transactions; and 6) preparing the report of the Audit Committee. The Audit Committee viewed in overall that it performed sufficiently and completely.
On behalf of Audit Committee
Mr. Apichai Boontherawara
Chairman of the Audit Committee
[ Management and Corporate Governance ]
Management Discussion and Analysis (MD&A) OVERALL 2017 FINANCIAL PERFORMANCE Consolidated Financial Statements Total Revenue/1 Total Cost Gross Profit/2 Net Profit /1 /2
2016
2017
Increase/(Decrease)
THB mm
THB mm
THB mm
%
19,325.0 11,414.6 7,446.9 2,898.2
12,410.0 5,001.5 6,475.5 3,266.4
(6,915.0) (6,413.1) (971.4) 368.3
(35.8%) (56.2%) (13.0%) 12.7%
Including other income and share of profit from investments in associates and JVs Gross profit including share of profit from investments in associates and JVs
During 2017, the Company reported the record-high net profit of THB 3,266.4 mm, which increased by THB 368.3 mm or 12.7%, compared to the same period of last year.
KEY HIGHLIGHTS
p The growth of gross profit was 87.0% y-o-y mainly attributable to the higher revenue from industrial land sale and improved profitability from 36.1% to 51.1%. The significant improvement of such GPM was as a result of the increase in land sale price. p The gross profit margin from the asset monetization to WHART increase from 25.2% to 44.7% due mainly to the fact that WHART solely used the debt funding from financial institution which is deemed lower cost of fund compared to the fund raised from investors to acquire the asset from the Company. p Share of profit from associates and joint ventures increased by 95.1% because there have been a completion of COD of 4 SPPs in this year i.e. Gulf VTP achieved on schedule the second quarter of 2017, Gulf TS1 and Gulf TS2 in the third quarter of 2017 and Gulf TS3 in the last quarter of this year, adding our Equity MW under operation, at the end of 2017, to 478.4 MW from 349.6 as the end of last year. There has also been full-year recognition of Bowin Clean Energy’s performance which achieved COD in late 2016. p Financial costs decreased by 33.5%, mainly from the fact that the Company has repaid the loan since late last year until this year as well as refinancing of the loan with lower financial cost. p Completion of WHAUP’s listing to Stock Exchange of Thailand (SET) by Initial Public Offering (IPO) in the second quarter of 2017. p TRIS rating announced the company rating of WHA at “A-“ with “Stable” outlook in the fourth quarter in 2017. p Successful conversion of WHAPF to WHART in the fourth quarter of 2017.
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155
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Annual Report 2017
PERFORMANCE BY BUSINESS
Rental Properties Business
Rental Revenue Gross Profit Gross Profit Margin GPM before adjustment with PPA Revenue from Sale of Investment Properties Gross Profit Gross Profit Margin GPM before adjustment with PPA
2016
2017
THB mm
THB mm
1,688.7 1,143.5 67.7% 69.0% 11,737.2 3,617.9 30.8% 45.3%
1. Rental and Service Income
2. Sale of Investment Properties
1,148.3 650.4 56.6% 57.5% 3,079.3 1,310.9 42.6% 44.2%
Increase/(Decrease) THB mm
%
(540.4) (493.1)
(32.0%) (43.1%)
(8,657.8) (2,307.0)
(73.8%) (63.8%)
p Rental and service income from warehouses, distribution centers and factories during the year of 2017 was THB 1,148.3 mm, which decreased by THB 540.4 mm or 32.0% from the same period of previous year. The main reason was due to the large number of assets monetization to HREIT and WHART last year, thereby reducing the leasable area. p Gross profit from rental and service of warehouses, distribution centers and factories during the year of 2017 was THB 650.4 mm, which decreased by THB 493.1 mm or 43.1% from the same period of last year because of the decrease in leasable area from assets monetization to WHART and HREIT in the end of 2016. Moreover, the gross profit margin in the third quarter of 2017 was 56.6%. This gross margin had accounted for the fair value adjustment of the acquired business according to the accounting standards under WHA level. However, the genuine gross margin in 2017 was at 57.5% for the warehouse rental and service business which decreased from 69.0% last year, mainly due to change in product mix between Built-to-Suit and Ready-built facilities. p Income from sale of investment properties during the year of 2017 was THB 3,079.3 mm, which decreased by 8,657.8 mm or 73.8%, compared to the same period of last year, mainly resulting from the asset monetization to only WHART, totaling rental area of approx. 85,867 sq.m., compared to 2016, which the Company monetized assets to both WHART and HREIT, totaling rental area of approx. 420,455 sq.m. p Gross profit from sale of investment properties during the year of 2017 was THB 1,310.9 mm, which decreased by THB 2,307.0 mm or 63.8%, compared to the same period of pervious year, mainly due to the decrease of income from sale of investment properties. Nonetheless the gross profit margin has improved from 30.8% last year to 42.6% this year, resulting from improvement of GPM from asset monetization to WHART from 25.2% to 44.7% due mainly to the fact that WHART solely used the debt funding from financial institution which is deemed lower cost of fund compared to the fund raised from investors to acquire the asset from the Company.
Industrial Development Business
Revenue Gross Profit Gross Profit Margin GPM before adjustment with PPA
2016
2017
THB mm
THB mm
THB mm
%
3,210.8 1,639.9 51.1% 56.6%
785.3 763.2
32.4% 87.0%
2,425.5 876.7 36.1% 49.3%
Increase/(Decrease)
Income from sales of real estate during the year of 2017 stood at THB 3,210.8 mm, which increased by THB 785.3 mm or 32.4% from the same period of last year as the result of higher land transfer in 2017, compared to last year. Gross profit from sale of real estate stood at THB 1,639.9 mm during the year of 2017, which increased by THB 763.2 mm or 87.0% from the same period of previous year. The main reason was increase in revenue as well as improvement of gross profit margin, which was 51.1% in 2017. Moreover this gross margin had accounted for the fair value adjustment of the acquired business according to the accounting standards under WHA level. However, the genuine gross margin in 2017 was at 56.6%, compared to 49.3% in the same period of previous year. This was from higher average selling price and having gross margin for land transfer in this year.
Utilities & Power Business
Revenue Gross Profit Gross Profit Margin GPM before adjustment with PPA Share of Profit from Investments in Power Associates
2016
2017
Increase/(Decrease)
THB mm
THB mm
THB mm
%
2,004.0 802.6 40.1% 43.5% 961.9
2,075.2 910.9 43.9% 47.2% 1,926.5
71.2 108.3
3.6% 13.5%
964.5
100.3%
Utilities income during the year of 2017 was THB 2,075.2 mm, which increased by THB 71.2 mm or 3.6%, compared to the same period of last year. If excluding the one-time excessive charge considered as oneoff item, the utilities income still increased significantly from THB 1,788.2 mm last year to THB 1,939.1 mm in this year, which increased by THB 150.8 mm or 8.4%, compared to the same period of previous year. This was mainly from higher water demand from completion of COD of 5 SPPs since the fourth quarter of last year until this year. Gross profit from utilities services was THB 910.9 mm during 2017, which increased by THB 108.3 mm or 13.5% from the same period of last year. Moreover, the gross profit margin in 2017 was 43.9%. This gross margin had accounted for the fair value adjustment of the acquired business according to the accounting standards under WHA level. However, the genuine gross margin in 2017 was at 47.2% for the utilities business which increased from 43.5% last year, resulting from change in product mix between industrial/processing water and raw water. WHA Corporation Public Company Limited
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Annual Report 2017
Share of Profit from Investments in Associates from Power Business during the year of 2017 was THB 1,926.5 mm, which increased by THB 964.5 mm or 100.3%, compared to the same period of last year, arising from a completion of COD of 4 SPPs in this year i.e. Gulf VTP achieved on schedule the second quarter of 2017, Gulf TS1 and Gulf TS2 in the third quarter of 2017 and Gulf TS3 in the last quarter of this year, adding our Equity MW under operation, as the end of 2017, to 478.4 MW from 349.6 as the end of last year. There has also been full-year recognition of Bowin Clean Energy’s performance which achieved COD in late 2016.
Other Income
Dividend and Management income Others Total other income
2016
2017
Increase/(Decrease)
THB mm
THB mm
THB mm
%
259.9 203.5 463.4
471.6 461.3 932.9
211.6 257.9 469.5
81.4% 126.7% 101.3%
Other income in 2017 stood at THB 932.9 mm, which increased by THB 469.5 mm or 101.3% from the same period of last year. The breakdowns are the details below: p Dividend and management income in the year of 2017 was THB 471.6 mm, which increased by THB 211.6 mm or 81.4% from the same period of 2016. This was as the results of the increase in acquisition fees from conversion of WHAPF to WHART in the fourth quarter of 2017 as well as the increase in dividend received from investment in REITs and REIT management fee, in tandem with the growth in asset size. p Other income in the year of 2017 stood at THB 461.3 mm, which increased by THB 257.9 mm or 126.7%, compared to the same period of the previous year as a result of right of way charged in industrial estates totaling of THB 208.7 mm in the third quarter of this year.
Expenses analysis
Selling expense Administrative expense Finance costs Total expense
2016
2017
Increase/(Decrease)
THB mm
THB mm
THB mm
%
223.4 1,271.9 2,432.2 3,927.4
317.2 1,385.2 1,616.5 3,318.9
93.8 113.3 (815.6) (608.5)
42.0% 8.9% (33.5%) (15.5%)
Selling expense in 2017 stood at THB 317.2 mm, which increased by THB 93.8 mm or 42.0% from the same period of last year, mainly due to the higher land transfer. The selling expense includes the expense associated with the land sale including the transaction costs and taxes from land transfer as well as the marketing and promotion expenses. p Administrative expense in 2017 stood at THB 1,385.2 mm, which increased by THB 113.3 mm or 8.9% from the same period of last year, mainly due to increase in salary, resulting from increase in the number of staff to serve the business expansion.
p The finance costs in 2017 was THB 1,616.5 mm, which decreased by THB 815.6 mm or 33.5% from the same period of previous year, because the Company has repaid the loan since late last year until this year as well as refinancing of the loan with lower financial cost.
FINANCIAL POSITION The changes in Consolidated Balance Sheet as of 31 December 2017 are summarized as follows.
28,533.4
y uit Eq
ilit
er
iab
old
lL
To ta
lS
ha
reh
To ta
To ta
lA
sse
ies
ts
21,962.3
45,085.6
52,821.4
73,619.0
Unit : THB mm 74,783.6
2016
2017
Assets
As of 31 December 2017, the Company had total assets of THB 73,619.0 mm, which decreased by THB 1,164.7 mm from THB 74,783.6 mm as of 31 December 2016. The main reasons are as follows: 1. Decrease in short-term investments of THB 1,539.6 mm, which was mainly from the Company divested some investment units to repay loan from financial institutions and debentures. 2. Decrease in short-term loans to related parties of THB 401.1 mm, mainly from the loan repayment from the joint venture. 3. Decrease in cost of real estate development (net) of THB 908.1 mm, due to land transfer during this year. Nonetheless the Company has further developed in the industrial land during this period as well. 4. Increase in investments in associates of THB 2,411.5 mm due to raising of share of profit from investments in associates and capital increase in associates proportionately. 5. Increase in investments in joint ventures of THB 168.3 mm, due to capital increase in joint ventures proportionately. 6. Increase in properties, plants and equipment of THB 553.5 mm, mainly from increase in assets from data center business during this year, amounting to THB 304.6 mm. 7. Decrease in investment properties (net) of THB 1,603.6 mm, resulting from assets monetization to WHART in the fourth quarter of 2017. Moreover the reclassification of assets, totaling 21 units of Ready-Built Factories and Warehouses, will be monetized to HREIT as well as the reclassification of a project, which will be sold to our customer in the first quarter of 2018. Nonetheless the Company has invested more in the investment properties during this period as well. 8. Increase in non-current assets held for sale of THB 835.2 mm due to the reclassification of assets, which will be sold HREIT and our customer as mentioned above. WHA Corporation Public Company Limited
159
160
Annual Report 2017
Liabilities
As of 31 December 2017, the Company had total liabilities of THB 45,085.6 mm, which decreased by THB 7,735.8 mm from THB 52,821.4 mm as of 31 December 2016. Furthermore, if considering the interest-bearing debt, it amounted THB 34,398.5 mm, decreased by THB 7,596.6 mm from THB 41,995.1 mm. The main reasons are as follows: 1. Decrease in short-term loans from financial institutions of THB 1,864.7 mm, mainly due to shortterm loan repayment of THB 2,500 mm during this year, however the Company has issued B/E and P/N (net) totaling of THB 640.0 mm. 2. Long-term financial institutions loans repayment (net) of THB 6,484.5 mm, resulting from loan repayment of THB 2,500 mm by using WHAUP’s IPO proceeds. Moreover WHAUP has issued debenture, totaling of THB 4,000 mm, which has lower interest rate, to re-finance long-term loan as well. 3. Decrease in trade and other payables of THB 456.8 mm, mainly due to decrease in income received in advance. 4. Increase in debentures (net) of THB 752.7 mm. Because during this year the Company has issued debenture, totaling of THB 6,600.0 mm. However the Company has also repaid some debentures as well. 5. Increase in liabilities related directly to non-current assets held for sale of THB 32.3 mm, mainly from the reclassification of liabilities to synchronize with the reclassification of the assets as mentioned above. 6. Decrease in deposits from long-term lease agreement of THB 35.8 mm. This was mainly caused from the deposits which have transfer to WHART as assets monetization. Moreover the reclassification of liabilities to synchronize with the reclassification of the assets as mentioned above. However there was a bit increase in deposits from long-term lease agreement as a result of the new contracts that the Company has secured during this period.
Shareholder’s equity
As of 31 December 2017, the Company had total shareholder’s equity of THB 28,533.4 mm, which increased by THB 6,571.1 mm from THB 21,962.3 mm as of 31 December 2016, mainly from increase in noncontrolling interest in WHAUP after its IPO.
CASH FLOW ANALYSIS
Net cash generated (used in) from operating activities Net cash generated (used in) from investing activities Net cash generated (used in) from financing activities Net increase in cash and cash equivalents Cash and cash equivalents - ending balance
2016 THB mm
2017 THB mm
(1,581.3) 10,167.5 (8,491.2) 95.0 2,635.4
1,760.6 2,144.2 (4,596.6) (691.9) 1,919.7
1. Cash flows from operating activities The Company had cash inflows (outflows) from operating activities during the year of 2017 was THB 1,760.6 mm which increased by THB 3,342.0 mm, compared to same period of last year, mainly from decrease in financial costs and increase in normal profit before tax expense.
2. Cash flows from investing activities The Company had cash inflows (outflows) from investing activities during the year of 2017 stood at THB 2,144.2 mm, which decreased by THB 8,023.4 mm, compared to same period of last year, mainly from decrease in net proceeds from assets monetization to WHART. Because there has been asset monetization to only WHART, totaling rental area of approx. 85,867 sq.m., compared to the year of 2016, having asset monetization to both WHART and HREIT, totaling rental area of approx. 420,455 sq.m. 3. Cash flows from financing activities The Company had cash inflows (outflows) from financing activities during the year of 2017 was THB (4,596.6) mm, which increased by THB 3,894.6 mm, compared to same period of last year, mainly resulting from the proceeds from WHAUP’s listing by initial public offering (IPO), however the Company has repaid the short-term loan, long-term loan and debentures repayment as well as cash dividend payment.
KEY INFLUENTIAL FACTORES EFFECTING BUSINESS OPERATION OR FUTURE FINANCIAL POSITION
In 2018, the Company has set a target for operating the 4 business hubs as follows:
1. Logistic Hubs
Given the fact that Thailand is still holding a competitive edge, locating in ASEAN’s logistic center, the Company expects to see growth opportunities for the Logistic Hubs. The Company targets to increase the proportion of revenue generation from the Recurring Income by focusing on the strategic development of the Built-to-Suit projects, meeting with all clients’ specifications and located in logistic strategic location, and also focuses on the Sale-and-Lease-Back project. In addition, the Company plans to develop the E-Commerce warehouse to accommodate the growth of the E-Commerce business, which will be supported by a large infrastructure investment plan in accordance with the policy of the Eastern Economic Corridor (EEC). E-Commerce warehouse also build further on business from the Central JD Commerce Co., Ltd., that is the between collaboration Central group, huge retailer in Thailand, and JD.com, one of the leading E-Commerce leaders in China, signed a warehouse rental contract with a size of 6,848 square meters during end of 2017. Additionally, the Company plans to expand the warehouse rental business in overseas especially in Cambodia, Laos, Myanmar, Vietnam and Indonesia (CLMVI). The Company has already to build a warehouse and factory for rent in Indonesia with an area approximately 250,000 square meters. From the Company’s strategy, the Company is aiming to obtain Pre-lease areas (precommitted leased area with the tenants, allowing for future revenue recognition), and/or a new rental agreement of approximately 200,000 - 250,000 square meters in 2018 On early of January 2018, the Company sold their assets and / or leasehold rights to HREIT of 55,131 square meters. In addition, the Company is aiming to sell their assets and/or rights of lease the property to WHART and HREIT for an additional of approximately 160,000-170,000 square meters which the selling process is expected to be completed within Q4/2018.
2. Industrial Development Hub
According to the draft of EEC Act. was already approved by the National Legislative Assembly (NIA) to be the law on February 8, 2018, announcing Chonburi, Rayong and Chachoengsao to be the special economic zone, aiming to promote trade and investment within the region. The area has high potential for future development, as for all key aspects for industrial development and all infrastructures have already been put in place i.e. transportation infrastructure, demand of enterprises, availability of resources, center of domestic economic connectivity. The Thai Government has a plan to invest the mega projects such as U-Tapao international airport, Laem Chabang deep sea port, Map Ta Phut Phase 3 port, Bangkok-Rayong High-Speed Rail track and Double Track railway. EEC Policy Committee approved 9 industrial estates of the Group as Industrial Promotion Zones for Target Industries in order to enhance benefits for foreign direct investing in the 10 target industries. The target industries consist of the expansion of 5 existing S-curve industries, including the Next-generation automotive, Smart electronics, Affluent medical and wellness tourism, Agriculture and biotechnology, and Food for the future, along with 5 new industries (the New S-Curve) including the Automation and Robotics, Medical hub, Aviation and Logistics, Bio WHA Corporation Public Company Limited
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chemicals and Eco-friendly petrochemical and Digital industry. Therefore, the Company expected that the enactment of this law will support the industrial estate development will continue to grow in the future. Furthermore, the Company has expanded its industrial estates development business overseas. The Company has a plan to to invest in the development of industrial estates in Vietnam with the 1st phase with approximately 3,100 rai in 2018, under the name of “WHA Hemaraj Industrial Zone” in Nghe An Province, in which the total project area of 20,000 rai. In conclusion, the Company targets to sell Hemaraj’s industrial estate land both domestic and overseas of approximately 1,400 rai in 2018
3. Utilities & Power Hub 3.1 Utilities The Company aims to growth in utilities business in industrial estates areas by increasing the volume of water selling to the clients inside the industrial estates. This is in line with Hemaraj’s industrial estate expansion plan which be supported by the officially announcement of the EEC Act. as mentioned above. In additional, the Company plans to sell water in industrial estates in Vietnam, according to the WHA Hemaraj Industrial Zone development plan. Moreover, the Company is also planning to expand its utilities business to operate outside the industrial estates, particularly selling to local administrative organizations nearby to industrial areas and the surrounding communities would gradually increase their water consumption level as the industrial estate. In 2018, the Company aims to sell raw water, tap water, industrial water and waste water treatment system of 113 million cubic meters, that is an increase of approximately 100 million cubic meters from previous year. Additionally, the company plans to develop services such as Reverse Osmosis (R.O.) used in the production of water in order to build more confidence and improve the quality of water sold to customers and also reduce the production costs. 3.2 Power Business In 2018, the Company plans to increase its power generation equity megawatts to 511 megawatts from 478 megawatts in previous year from 3 solar power plants ,2-small power plant (SPP) projects and 1- very small power plant (VSPP) projects, and 1-waste-to-energy plant (VSPP) which the constructions are expected to completed and ready for commercial operation (COD) in 2018. For renewable energy, the Company plans to tryout the Solar Rooftop project with an area of over 2.1 million square meters in the industrial estate and logistics center of the Company, moreover, the roofs area from client’s factories in the Company’s industrial estates which will be an important channel in the production of solar energy. Moreover, The Company also plans to invest in the retail natural gas business in Hemaraj’s Industrial Estate (NGD). The construction of the WHA EASTERN SEABOARD NGD 2project is expected to be complete and ready for operate within Q3/2018. 4. Digital Platform Hub During the end of 2017, the Company has started to operate 3 data centers with 451 racks which services. The Company aims to expand the investments in digital business in line with the expected increasing in demand in the future focusing in the telecom companies and the technology companies. Moreover, the Company is implementing Local Loop (FTTx), laying high speed fiber optic in 9 of Hemaraj’s industrial estates, which will increase from 5 industrial estates from previous year, as well as offering other managed services complimenting to the Data Center such as IT outsourcing, rental equipment and software etc., aiming to provide our clients with a comprehensive full IT solution and capture the digital trend which be supported by Thailand 4.0 a new era for Thailand’s developing plan. The Company initiates its strategic planning to coincide with its operating targets. Furthermore, to ensure of its business success, the Company has thoroughly conducted a feasibility study under a supervision of respective Board of Directors and executive management team of which are fully equipped with in-depth, insightful knowledge and an expertise in Information Technology area. Nevertheless, the Company always prepare to face with external influential factors such as global economic, Thailand political instability, change in government policies, market conditions and capital market conditions, which may affect the Company’s business operation and its future financial performance.
[ Financial Information ]
Report of the Board of Directors’ Responsibility TO THE Financial Statements The Board of Directors of the Company has responsibility in preparing the financial statements of the Company in order to represent the Company’s financial status and performance for the year 2017 in accordance with the Public Company Act B.E. 2535. The Board of Directors emphasized on its duties and responsibilities as the directors of a listed company on the Stock Exchange of Thailand to control the business in accordance with the good corporate governance. The Board of Directors was responsible for the financial statements to be accurate, complete, transparent and appropriate to maintain the Company’s assets, prevent from fraud and abnormalities, as well as in accordance with generally accepted accounting principles for the interests of shareholders and investors in acknowledging correct and reasonable information of the Company’s financial status and performance. The Board of Directors views that the consolidated financial statements of WHA Corporation Public Company Limited and its subsidiaries for the year 2017 jointly reviewed by the Audit Committee in collaboration with the Management and the auditor, PricewaterhouseCoopers ABAS Limited, were presented in a complete and reliable in compliance with the generally accepted accounting principles and all governing rules and regulations, with appropriate and consistent accounting policies and adequate information disclosure.
Ms. Jareeporn Jarukornsakul Chairman of the Board of Directors
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[ Financial Information ]
INDEPENDENT AUDITOR’S REPORT To the Shareholders and the Board of Directors of WHA Corporation Public Company Limited My opinion
In my opinion, the consolidated financial statements of WHA Corporation Public Company Limited (the Company) and its subsidiaries (the Group) and the separate financial statements of the Company present fairly, in all material respects, the consolidated and separate financial position of the Group and of the Company as at 31 December 2017, and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with Thai Financial Reporting Standards (TFRSs).
What I have audited
Basis for opinion
My audit approach - overview
The consolidated financial statements and the separate financial statements comprise: • the consolidated and separate statements of financial position as at 31 December 2017; • the consolidated and separate statements of comprehensive income for the year then ended; • the consolidated and separate statements of changes in equity for the year then ended; • the consolidated and separate statements of cash flows for the year then ended; and • the notes to the consolidated and separate financial statements, which include a summary of significant accounting policies. I conducted my audit in accordance with Thai Standards on Auditing (TSAs). My responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated and separate financial statements section of my report. I am independent of the Group and the Company in accordance with the Federation of Accounting Professions under the Royal Patronage of his Majesty the King’s Code of Ethics for Professional Accountants together with the ethical requirements that are relevant to my audit of the consolidated and separate financial statements, and I have fulfilled my other ethical responsibilities in accordance with these requirements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.
Materiality Materiality
Overall group materiality: Baht 167 million which represents 5% of Group’s profit before tax.
Audit scope Audit scope
Key audit matters
I conduct with audit work of the consolidated financial statements by focusing on the significant components which account for 98% of the Group’s profit before tax and 99% of the Group’s total assets.
Key audit matters
I identified goodwill impairment assessment as key audit matters:
Materiality
The scope of my audit was influenced by my application of materiality. An audit is designed to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements. Based on my professional judgement, I determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped me to determine the scope of my audit and the nature, timing and extent of my audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Overall group materiality Baht 167 million How I determined it 5% of Group’s profit before tax Rationale for the materiality I chose profit before tax as the critical measure because, benchmark applied in my view, it is the measure against which the performance of the Group is most commonly assessed. The 5% benchmark is a generally accepted auditing practice and there were no significant unusual elements that merited adjustments to this benchmark. I agreed with the audit committee that I would report to them misstatements identified during my audit above Baht 16.7 million, in my view, warranted reporting for qualitative reasons.
How I tailored my group audit scope
Key audit matters
I tailored the scope of my audit in order to perform sufficient work to enable me to provide an opinion on the Group’s consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates. Key audit matters are those matters that, in my professional judgment, were of most significance in my audit of the consolidated and separate financial statements of the current period. I determine one key audit matter: Goodwill impairment assessment. The matter was addressed in the context of my audit of the consolidated and separate financial statements as a whole, and in forming my opinion thereon, and I do not provide a separate opinion on the matter.
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KEY AUDIT MATTER
Goodwill impairment assessment Refer to Note 2.15 Accounting policy and Note 21 Goodwill. As at 31 December 2017, the Group had goodwill of Baht 17,575 million arising from the acquisition of real estate, power and water businesses.
HOW MY AUDIT ADDRESSED THE KEY AUDIT MATTER
I obtained information about the forecasted future cash flow provided by the Group’s management and gained an understanding of the procedure for preparing the forecast.
The Group tests goodwill acquired in a business combination for impairment annually irrespective of whether there is any indication of impairment, as required by TAS 36 Impairment of assets.
Then I challenged the reasonableness of the procedures and assumptions that underpin management’s forecast of the gross margin and growth rate based on actual information from effective long-term contracts relating to the current and future periods, historical trend analysis and the future business plan.
I focused on this matter because management uses judgement and estimates about the future to determine the recoverable amount of cashgenerating units that include goodwill.
The discount rate is determined using the weighted average cost of capital method. I specifically challenged the reasonableness of the assumptions by comparing them to recent performance and industry data.
The recoverable amount is based on fair value less costs of disposal determined using a present value technique. The key assumptions in relation to the forecast of the net future cash flow discounted to the net present value are the gross margin, growth rate and discount rate.
I also tested the mathematical accuracy of key figures estimated based on the above assumptions and used to calculate the recoverable amount and compare to the carrying amount.
Management concluded that there is no impairment of goodwill because the recoverable amount is higher than the carrying amount.
Based on these procedures, I found that the key assumptions were consistent with market and industry data.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated and separate financial statements and my auditor’s report thereon. The annual report is expected to be made available to me after the date of this auditor’s report. My opinion on the consolidated and separate financial statements does not cover the other information and I will not express any form of assurance conclusion thereon.
In connection with my audit of the consolidated and separate financial statements, my responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or my knowledge obtained in the audit, or otherwise appears to be materially misstated. When I read the annual report, if I conclude that there is a material misstatement therein, I am required to communicate the matter to the audit committee.
Responsibilities of the directors for the consolidated and separate financial statements
Auditor’s responsibilities for the audit of the consolidated and separate financial statements
The directors are responsible for the preparation and fair presentation of the consolidated and separate financial statements in accordance with TFRSs, and for such internal control as the directors determine is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated and separate financial statements, the directors are responsible for assessing the Group and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group and the Company or to cease operations, or has no realistic alternative but to do so. The audit committee assists the directors in discharging their responsibilities for overseeing the Group and the Company’s financial reporting process.
My objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with TSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated and separate financial statements. As part of an audit in accordance with TSAs, I exercise professional judgment and maintain professional scepticism throughout the audit. I also: • Identify and assess the risks of material misstatement of the consolidated and separate financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for my opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group and the Company’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
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• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group and the Company’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the consolidated and separate financial statements or, if such disclosures are inadequate, to modify my opinion. My conclusions are based on the audit evidence obtained up to the date of my auditor’s report. However, future events or conditions may cause the Group and the Company to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the consolidated and separate financial statements, including the disclosures, and whether the consolidated and separate financial statements represent the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. I am responsible for the direction, supervision and performance of the group audit. I remain solely responsible for my audit opinion. I communicate with the audit committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that I identify during my audit. I also provide the audit committee with a statement that I have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on my independence, and where applicable, related safeguards. From the matters communicated with the audit committee, I determine those matters that were of most significance in the audit of the consolidated and separate financial statements of the current period and are therefore the key audit matters. I describe these matters in my auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, I determine that a matter should not be communicated in my report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
PricewaterhouseCoopers ABAS Ltd.
Chanchai Chaiprasit
Certified Public Accountant (Thailand) No. 3760 Bangkok 20 February 2018
[ Financial Information ]
STATEMENTS OF FINANCIAL POSITION WHA Corporation Public Company Limited As at 31 December 2017
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[ Financial Information ]
STATEMENTS OF FINANCIAL POSITION WHA Corporation Public Company Limited As at 31 December 2017
[ Financial Information ]
STATEMENTS OF FINANCIAL POSITION WHA Corporation Public Company Limited As at 31 December 2017
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[ Financial Information ]
STATEMENTS OF COMPREHENSIVE INCOME WHA Corporation Public Company Limited For the year ended 31 December 2017
[ Financial Information ]
STATEMENTS OF COMPREHENSIVE INCOME WHA Corporation Public Company Limited For the year ended 31 December 2017
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For the year ended 31 December 2017
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STATEMENTS OF CHANGES EQUITY
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For the year ended 31 December 2017
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STATEMENTS OF CHANGES EQUITY
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[ Financial Information ]
STATEMENTS OF CASH FLOWS WHA Corporation Public Company Limited For the year ended 31 December 2017
[ Financial Information ]
STATEMENTS OF CASH FLOWS WHA Corporation Public Company Limited For the year ended 31 December 2017
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[ Financial Information ]
STATEMENTS OF CASH FLOWS WHA Corporation Public Company Limited For the year ended 31 December 2017
[ Financial Information ]
NOTES TO THE CONSOLIDATED AND FINANCIAL STATEMENTS WHA Corporation Public Company Limited For the year ended 31 December 2017
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Your Ultimate Solution Partner
A leader in providing a fullyintegrated services, capturing a wide range of complementary businesses i.e. Industrial Estate, Logistic, Utilities, Power and Digital Platform
Investor may additionally obtain the information of the issuing company from its annual filing (Form 56-1) showing in www.set.or.th, www.sec.or.th or in the website of WHA Corporation Public Company Limited www.wha-group.com
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HEAD OFFICE : 1121 Moo. 3 Theparak Road, Theparak Subdistrict, Muang District, Samutprakarn Province 10270 Tel: +66 (0) 2 753 3750 Fax: +66 (0) 2 753 2750
www.wha-group.com
www.wha-group.com
Annual Report 2017 WHA Corporation Public Company Limited
WHA Corporation Public Company Limited
ANNUAL REPORT 2017 WHA Corporation Public Company Limited