final 1-15 eng - listed company

Contents “√∫—≠

Financial Highlights

Message from the Board of Directors

Economic & Competitive Condition

The Companyʼs Business Profile

Major/Significant Events in 2004

Management Analysis

Management Structure

Audit Committeeʼs Report

Independent Certified Public Accountantsʼ Report

Financial Statements & Notes to Financial Statements

Shareholding & Organization Structure

General Information

Information of Board of Directors, Audit Committee and Management

Checklist to the SEC 56-2 Form

Project Summary & Other References

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Financial Highlights

Baht : Million

2002 2003 2004

Sales and Services Revenue 1,070 1,529 2,414

Industrial Land Sales 633 854 1,481

Utility 284 377 430

SME Factory (Sales) 36 93 23

SME Factory (Lease) 80 95 122

Other Industrial Services 37 110 46

Residential 311

Sales of Undeveloped Property 1,071

Total Revenue 1,653 2,050 3,734

Gain from Extraordinary Items 290 804 126

Net Income 625 1,383 951

Total Assets 5,680 7,061 8,062

Total Liabilities 3,593 2,532 2,822

Total Shareholderʼs Equity 2,087 4,529 5,240

Earning Per Share (Baht) 1.80 0.35 0.17

Par (Baht) 10 1 1

Financial Ratio

2002 2003 2004

Current Ratio (Times) 1.51 3.40 4.91

Net Debt to Equity (Times) 1.65 0.32 0.35

Return to Total Assets 11% 22% 12%

Return on Equity 38% 42% 19%

Net Profit Margin 35% 67% 26%

Book Value per Share (Baht) 5.88 0.84 0.90

No. of Share Outstanding (Million Shares) 354.74 5,416.57 5,831.79

Total Assets And Total Liabilities

2002 2003 2004 0

4,500

9,000

5,680

3,593

7,061

2,532

8,062

2,822

Total Revenue Composition

2002 2003 2004 0

2,000

4,000

0.3 0.3

3,000

1,000

2,050

3,734

1,653

583

1,070

521

1,529

1,071

249

2,414

Net Income

500

1,500

1,000

0

1,383

951

625

Net Debt To Equity

2002 2003 2004 0

1

2

1.65

0.32 0.35

1.5

0.5

Year

Million Baht

Total Assets Total Liabilities

Year

Times

Year Operating Revenue Other Revenues Sale of undeveloped property

Million Baht

2002 2003 2004 Year

Million Baht

Message from the Board of Directors

We are pleased to report that Hemaraj Land And Development Public Company Limited had a strong 2004 with solid operating performance. For the Year 2004, Hemaraj Total Operating Revenue from core businesses was Baht 2,414 million versus Baht 1,529 million in 2003, or a 58% improvement. Total Revenue reported for the Year 2004 was Baht 3,734 million versus Baht 2,050 million, an increase of 82%. Net Income was Baht 951 million with Baht 628 million being from operations and significantly improving over last year. Operating Gross Margins widened to 44% gross margin with adjusted EBITDA margins at 31%, both levels exceeding industry margins. Hemaraj is broadening the revenue base from complementary property platform customer solutions utilizing systematic development skills. This has shown success in 2004 with utilities revenue growing by 14% while the SME factory area under lease expanded by 60%, thus complementing the industrial estate sales growth. The 2004 sale and lease of industrial land were 607 rai with 39 contracts and 19 new customers. Hemaraj customers are now 226 with 88 automotive customers. There was a continued petrochemical investment including from the Petroleum Authority of Thailand. On November 3, 2004, Hemaraj completed the acquisition of the KK-JTCI industrial estate, subsequently renamed Hemaraj Eastern Seaboard Industrial Estate. The acquisition is in proximity to two of our existing industrial estates and the “Detroit of the East” customer base and will provide for more than a decade of development. Hemaraj sold non-productive assets to fund the acquisition and to keep our cash position strong with Baht 1,003 million at year-end 2004. Hemaraj reported year-end Total Assets of Baht 8,062 million, Total Liabilities of Baht 2,822 million, and Total Shareholders Equity of Baht 5,240 million. The financial structure of Hemaraj remains cautious but flexible represented by a low Net Debt to Equity ratio of 0.35 to 1. “The Park Chidlom” exclusive luxury condominium features a unique design for luxury privacy and natural surroundings for both Thai and foreign customers from discerning international markets. Sales through 2004 were 101 units with a value of Baht 2,600 million of which Baht 311 million in revenue was realized in the fourth quarter of 2004. The Hemaraj strategy is to develop complementary property utility and infrastructure customer solutions that have predictable growing revenue and superior profit opportunities in order to optimize shareholder value. On behalf of the Management and the Board of Directors, we would like to express our appreciation to our stakeholders for entrusting us with this responsibility. Respectfully submitted, David R. Nardone Sawasdi Horrungruang President & Chief Executive Officer Chairman of the Board of Directors 25 March 2005 25 March 2005

Economic & Competitive Condition

1.8

4.8

6.9

6.2

Total Vehicles & Parts Petrochemical

Local Demand Imports Production Exports

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0 2001 2002 2003 2004p

% GDP

1998 1999 2000 2001 2002 2003 2004

1,000

800

600

400

200

0

Thailandʼs Auto Market

110

100

90

80

70

60

50

40

30

20

% Capacity Utilization %

2001 2002 2003 2004p

The 2004 Thai economy continued to expand amid the adverse external effects including the bird flu outbreak, the unrest in the southern provinces, and the rising oil price. The 2004 Gross Domestic Production (GDP) expected to grow 6.2% compared to 6.9% in 2003. In 2004, the Private Consumption Index expected to expand only by 3.7% while Manufacturing production continued to grow by 8.1% and the capacity utilization rate increased to 72.7% compared with 66.3% in 2003. For the year 2004, the Private Investment Index continuously grew by 12.9%. Export volumes for Thailand were increased to US$ 96.06 billion, a 23% increase. Imports increased by 27% to US$ 94.35 billion resulting from the acceleration in raw material and capital imports. The balance of payments was US$ 5.73 billion surplus. The 2004 property market sales were mixed. However, condominium sales especially the Grade A in CBD area of Bangkok continued to grow, despite higher costs. The industrial property market sector grew by 24% year over year as a result of the continued expanding economy and significant increased in Foreign Direct Investment (FDI), especially in automotive and petrochemical industries. Sales of industrial land were 2,689 rai in 2004. The Board of Investment (BOI) approved projects significantly increased by 46% to 1,227 projects in 2004. Thailand remained a growing regional production hub in the ASEAN automotive industry, particularly for one-ton pickups, with an expected capacity exceeding one million vehicles per year in 2005. Vehicle sales continued with an impressive growth since the economic crisis, recording an all-time high with more than 620,000 vehicle domestic sales in 2004. Source: Global Insight Automotive, December 2004 Bank of Thailand, March 2005

Vehicles (ʼ000) units

The Company’s Business Profile

Hemaraj Land And Development Public Company Limited was established in 1988 and listed on the Stock Exchange of Thailand in 1992. Hemaraj, Thailandʼs leading industrial estate and infrastructure developer, has under development 4 Industrial Estates; Chonburi Industrial Estate (Bo-Win), Eastern Seaboard Industrial Estate (Rayong), Eastern Industrial Estate (Map Ta Phut), and Hemaraj Eastern Seaboard Industrial Estate. Hemaraj sees promising continued opportunities in integrated infrastructure development that will be complementary to industrial estates. These are industrial estate utilities, SME factories for lease and sale, and other utilities and industrial services. In 2003, Hemaraj expanded its business with the exclusive high-rise residential development project “The Park at Chidlom” with projected revenue over Baht 5,600 Million.

Industrial Estate Development

Chonburi Industrial Estate (Bowin) in Chonburi, Eastern Industrial Estate in Map Ta Phut, Rayong, and Eastern Seaboard Industrial Estate in Rayong (ESIE), and Hemaraj Eastern Seaboard Industrial Estate in Rayong and Chonburi are developed by Hemaraj and located on the Eastern Seaboard of Thailand. With a combined land area of 23,973 rai, 226 industrial customers and a comprehensive infrastructure, Hemaraj is positioned as a supplier of premium industrial estates.

Chonburi Industrial Estate (CIE) with total area of 3,738 rai and BOI Zone II privileges has a customer base of steel and power industry with some auto parts, electronics, building materials and general industries. Customers include Honeywell, Wearnes, Chonburi Steel Mill Services, Nakornthai Strip Mill (NSM), Bangkok Industrial Gas, Kitagawa, Toei Denshi, Fuji Xerox, and Glow IPP.

Eastern Industrial Estate (EIE) with total area of 2,708 rai and BOI zone III privileges is located adjacent to the Map Ta Phut Petrochemical Complex and designed for heavy industry including steel, petrochemical and chemical industries. EIE customers include Siam Mitsui PTA, Thai Olefins, PTT Phenol, PTT Utility, Glow SPP, Solutia Chemical, BlueScope Steel and Siam United Steel. The upward trend of petrochemical cycle has continued in 2004 as supported by a continued increase in price and in capacity utilization. Eastern Seaboard Industrial Estate (ESIE) with total area of 8,080 rai BOI Zone III privileges is a 60:40 joint venture with Siam Food Products Plc. Renown as the “Detroit of the East” for its world-class integrated industrial environment, ESIE is home to over 88 automotive supply-line companies, including GM, Ford, Mazda and 9 of the worldʼs top 10 automotive suppliers as well as 20 Toyota group companies. The ESIE prospect as an integrated automotive hub remains bright in clustering for the automotive industry in the region.

In addition, the 3 Hemarajʼs industrial estates above have won the Best Environmental Management EIA Award by the Ministry of Science and are ISO 14001 and ISO 9001 certified.

Hemaraj Eastern Seaboard Industrial Estate (H-ESIE) just starting development, comprises 6,800 rai with an option to buy 2 parcels of adjacent land with an aggregate area of 2,500 rai, or 9,300 rai of land in total. The site is in proximity to two of our existing industrial estates and the “Detroit of the East” customer base and will provide for a decade of development with a forecast of over Baht 20 billion of potential revenue. This location is in the heart of the area selected for automotive, metal, electronics, plastics, and consumer products while expanding our customer base further in these areas. The location is approximately 20 kilometers from the Laem Chabaeng Deep Sea Port and 85 kilometers from the new airport. Approvals for Environmental Impact Assessment (EIA), the joint development agreement with IEAT, and promotion in Board of Investment Zone 3 influenced our selection of the site.

Auto, 88 (39%)

Bldg. Material, 15 (7%)Consumer,

27 (12%)

Steel/Metal, 16 (7%)

Customers by Industry, Total = 226

Petrochemical,35 (15%)

Others,20 (9%)

Logistics,6 (3%)

Electronics,19 (8%)

CIE EIE ESIE

New Customers / Yr.

New Customers / Year

Contracts / Yr.

Cum. Customers

01994 2004200320022001200019991998199719961995

0

50

100

150

200

250

5

10

15

20

25

30

35

40

01999 2000 2001 2002 2003 2004

5

10

15

20

25

30

million cubicmeters Total Water (raw+potable) Consumption

10.6112.75 13.08

16.44

23.9027.02

Industrial Estate Utilities

Industrial Estate Utility Revenue are through the sale of raw water, treated potable water, gray water, waste water treatment, and general maintenance fees. This utility provision and infrastructure services are 100% operated, managed, and owed by Hemaraj to ensure the growing recurring income. The Asset base has been amortized in the cost of industrial land development. The revenue basis is mostly cost plus, which provides consistent gross margin.

Revenue from Industrial Estate Utilities has been increasing significantly over the past 5 years, from Baht 183 million in 1999 to Baht 430 million in 2004. The utilities revenue is more recurring, and more predictable income stream. Hemaraj has unique exposure to petrochemical, steel, power, and major utility users with highest revenue in the industry. Increasing new customers as well as expanding business of the current customers significantly contributes to utilities consumption growth. Total water consumption (raw + potable) has been increasing from 10.61 million cubic meters (mcm.) in 1999 to 27.02 million cubic meters (mcm.) in 2004, representing a 155% increase over 6 years.

1998 1999 2000 2001 2002 2003 2004-

20,000

40,000

60,000

80,000 45

30

15

0

Total

Units

m2 units73,396

45,492

40,070

30,636

19,418

7,2261,110

Cumulative Lease and units

SME Factories for Lease and Sales

The attractiveness of Hemaraj SME factories for sale or lease is continuing. Hemaraj having a concept of expandable SME factories gives more flexibility to SME customers. Sizing from 750 square meters to 6,000 square meters offers manufacturers various alternatives to fit their needs for ready or ready to build factories with a quick entry, a low investment cost and flexibility for expansion.

Under the competitive market, locating in the industrial estates with a fully integrated infrastructure SME factories have advantage to the clustering of the industry for the supply chain management and ease to expand. As of December 31, 2004, 18 units or 36,317 square meters were sold and 43 units of 73,396 square meters were leased.

Other Utilities and Industrial Services

Hemaraj also invests and extends industrial services by investing 40% in Elyo-H Facilities Management - a joint venture with Suez Tractebel, 100% in Eastern Pipeline Services, 100% in H-Construction Management and Engineering, and holding 5% directly in GLOW IPP.

Niche Selective Property Projects

The Park Chidlom is located on five and one half rai at the prime residential area between Soi Somkid and Chidlom, including two rai of landscape pool and recreation space. The two residential towers: the 35-storey Somkid Tower and the 28-storey Chidlom Tower, with a total of 219 units comprise 87,000 gross square meters and 53,000 net square meters. The project has various unit types including 2 bedrooms of 140 to 148 square meters and 3 plus 1 bedrooms of 257 to 310 square meters as well as duplex penthouse units. Total Project Value is projected over Baht 5,600 million. Project finance is supported by Krung Thai Bank of Baht 1,800 million

The Park Chidlom features a unique design for luxury privacy and natural surroundings while offering world-class supplier finishes for Thai and foreign customers from discerning international markets. Architecture and Engineering Design is by Palmer and Turner and Interior Design with Leo International. Architectural and Engineering standards, including the structural work, security and environmental impact assessments, are based on the same standards as those used in the worldʼs best residences. The project selected hi-speed lifts from KONE, air-conditioning systems from Daikin, kitchens and finishing from Poggen Pohl, appliances from Siemens and Gaggenau, and bathroom fixtures from Hansgrohe.

In 2004, major/significant events are summarized as follows: The Park Chidlom Project Development Progress The Acquisition of KK-JTCI to be Hemarajʼs 4th Industrial Estate

On November 3, 2004, Hemaraj acquired the KK-JTCI industrial estate company (subsequently renamed Hemaraj Eastern Seaboard Industrial Estate Company Limited) inclusive of 6,800 rai in Rayong and Chonburi Provinces for Baht 1,490 million by paying Baht 690 million in cash and utilizing a seller long-term loan of Baht 800 million. The subsequent agreement includes a further option to buy 2 parcels of land with an aggregate area of 2,500 rai. This industrial estate is in proximity to two of our existing industrial estates and the “Detroit of the East” customer base. The acquisition is to solidify our long-term strategy and expansion potential for industrial estate utility and SME factory development in the heart of the Eastern Seaboard of Thailand.

Major/Significant Events in 2004

Construction of The Park Chidlom began in December 2003 with SINO-Thai Engineering and Construction PLC (STECON) as the structural contractor. The electrical and mechanical engineering work was awarded to GEC Engineering Co., Ltd. “The Park Chidlom” luxury condominium sales started, with a soft launch in late February 2004 with the show unit opening and official launch party on 24 November 2004, received an overwhelming market response. In Quarter 4, 2004, Hemaraj realized revenue from “The Park Chidlom” of Baht 311 million from 101 units sold and Baht 2,600 million in accumulated contract sales value signed as at December 31, 2004.

The Development at Eastern Industrial Estate (EIE) Phase II The development of 503 rai for Eastern Industrial Estate (EIE) Phase II commenced in Quarter 3, 2003 is now completed. The Eastern Industrial Estateʼs raw water capacity, potable water treatment capacity, and waste water treatment capacity now are expanded by 100%, 50%, and 150% from its current capacity to meet the rising future demands. The Development at Eastern Seaboard Industrial Estate (ESIE) Eastern Seaboard Industrial Estate (ESIE) Phase V development of 807 rai was 94% completed at the end of 2004. Duty Free Zone (DFZ) development was completed in March 2004. ESIE Phase VI development of 329 rai was 54% completed at the end of 2004. The Sales of Undeveloped Assets In Quarter 3, 2004, Hemaraj sold 2 parcels of undeveloped land in Phuket and in Map Ta Phut Rayong, for total consideration of Baht 1,071 million.

Operating Performance For the Year 2004, Hemaraj reported Total Net Income of Baht 951 million compared with Baht 1,383 million of the previous year, or a 31% decrease. However, Operating Earnings for the Year 2004 were Baht 628 million, or an increase of 292% compared with last year, due to the increase of industrial land sales, utilities income, SME factory leases, gain from the sale of undeveloped land and residential condominium sales. It was noted that Total Net Income for the Year 2003 being the prior year, included non-operating and non-recurring earnings of net Baht 1,223 million realized through retired bonds, gain from securities, foreign exchange and others. Total Revenue was Baht 3,734 million compared with Baht 2,050 million of the previous year, representing an 82% increase. Total Operating Revenue from core businesses was Baht 2,414 million versus Baht 1,529 million in 2003, or a 58% improvement. Industrial Land Sales for the Year 2004 were Baht 1,481 million being from the sale and lease of 607 rai, 39 contracts, and 19 new customers. This represents an increase in sales of 73% compared to Baht 854 million in sales from 566 rai, 27 contracts, and 16 new customers in 2003. Revenue from Utilities increased to Baht 430 million, reflecting an increase of 14% compared to Baht 377 million in 2003. The Income from the Sales and Lease of Mini Factories were Baht 145 million compared to Baht 188 million in 2003, reflecting a decrease of 23%, as sales revenue declined while leases were up 28%. In 2004, 16 SME Factories were leased and 1 SME Factory was sold. In Quarter 3, 2004, Hemaraj sold 2 parcels of undeveloped land in Phuket and in Map Ta Phut Rayong, for total consideration of Baht 1,071 million. On November 3, 2004, Hemaraj acquired the KK-JTCI industrial estate company (subsequently renamed Hemaraj Eastern Seaboard Industrial Estate Company Limited) inclusive of 6,800 rai for Baht 1,490 million financed by paying Baht 690 million in cash and utilizing a seller long-term loan of Baht 800 million. In Quarter 4, 2004, Hemaraj started to realize revenue from “The Park Chidlom” of Baht 311 million from 101 units sold and Baht 2,600 million in accumulated contract sales value signed as at December 31, 2004. Financial Status The consolidated Balance Sheet in 2004 is summarized as follows. Total Assets in 2004 were Baht 8,062 million, a 14% increase from Baht 7,061 million in 2004. Total Current Assets in 2004 were Baht 6,370 million compared to Baht 4,619 million in 2003. This includes Cash on Hand of Baht 1,003 million, Account Receivable of Baht 552 million and Land held for Real Estate development of Baht 4,657 million. Other Assets were Baht 1,692 million in 2004. This includes Land held for commercial purposes not under development of Baht 281 million, assets for rent of Baht 797 million, sinking funds of Baht 198 million, and long-term investment of Baht 192 million.

Management Analysis

Total Liabilities in 2004 were Baht 2,822 million slightly increased from Baht 2,532 million in 2003. Total Shareholders Equity in 2004 was Baht 5,240 million versus Baht 4,529 million in 2003, or a 16% increase. The 2004 Net Debt to Equity ratio remained low at 0.35 to 1. Risk Factors & Others Foreign Exchange The Euro-convertible bonds of US$ 26,000 were cancelled in Quarter 1, 2004. As of December 31, 2004, the company does not have foreign currencies debt on its balance sheet. External Risks The company faces investment and management risks associated with the government and Bank of Thailand policies, external political and economic environment in Thailand as well as in neighboring and other countries. In addition Foreign Direct Investment, rising oil price, interest rates, land cost, and construction cost are factors affecting the company businesses. The company is well aware of the risks and effects associated with such factors by having a systematic monitoring and analytical measurement to prevent and minimize such risks. Financial Risks An appropriate and sufficient source of funds with a reasonable cost of capital will support the companyʼs competitiveness. Since the economic crisis, the companyʼs financial structure has been continuously strengthening resulting in improving in net debt to equity ratio. In 2004 the company has the net debt to equity ratio of 0.35 to 1. The operating performance, financial status, economic environment in Thailand and other countries, an access to financial and capital market, and interest rates are factors to the company financial management.

Management Structure

Board of Directors 1. Mr. Sawasdi Horrungruang Chairman of the Board of Directors 2. Mr. Thavorn Anankusri Director 3. Mr. David Richard Nardone Managing Director 4. Mr. Sudhipan Charumani Independent Director 5. Mr. Peter John Edmondson Independent Director 6. Mrs. Punnee Worawuthichongsathit Independent Director 7. Mr. Vivat Jiratikarnsakul Director 8. Ms. Pattama Horrungruang Director The Board of Directors has the authority in formulating visions, policies and strategies of the company being pursued to continue in increasing shareholders values including in reviewing the company business plan, and management control in accordance with the laws, SETʼs and SECʼs rules and regulations, objectives, restrictions, regulations, the resolutions of the shareholderʼs meeting, and 15 guidelines of Good Corporate Governance. Executive Committee 1. Mr. Sawasdi Horrungruang Chairman of the Board of Directors 2. Mr. Thavorn Anankusri Vice Chairman of the Board 3. Mr. David Richard Nardone Executive Director 4. Mr. Vivat Jiratikarnsakul Executive Director 5. Ms. Pattama Horrungruang Executive Director The Executive Directors shall have the duty as assigned by the Board of Directors in formulating and reviewing specific strategic or policy issues in lieu of committees or reviewing the company business plan, budget, and investment prior to submission to the Board of Directors or other issues as assigned by the Board of Directors. Audit Committee 1. Mr. Sudhipan Charumani Chairman of the Audit Committee 2. Mr. Peter John Edmondson Member 3. Mrs. Punnee Worawuthichongsathit Member The Audit Committee of the company has the scope of duties and responsibilities as outlined below, and shall report to the companyʼs Board of Directors as follows: 1. To review that the Company has correct and sufficient financial reports; 2. To review that the Company has appropriate and efficient internal control and internal audit systems; 3. To review that the Company complies with laws relating to securities and securities markets, as well as with SETʼs rules and regulations and any other law relating to the Companyʼs business; 4. To consider, select and propose the appointment of the Companyʼs statutory auditor and to propose his professional fees; 5. To consider the Companyʼs correct and adequate disclosure of information with regards to third party transactions or any other transactions with a conflict-of-interest tendency;

6. To include in the Companyʼs annual report the result of the audit committeeʼs review work, inclusive of an opinion on the Companyʼs financial statements, information disclosure therein and the internal control system. This statement shall be signed by the audit committee chairman; 7. To report the audit committeeʼs work to the Companyʼs Board of Directors at least on quarterly basis; 8. To take part in giving opinion on the appointment, removal, work performance and remuneration of the internal auditor; and 9. To perform any other work as may be assigned by the Companyʼs Board of Directors with the consent of the audit committee. Remuneration Committee

The Company has not appointed a Remuneration Committee to date. The remuneration will be approved by the Shareholders, the Board of Directors and the Company management as specified. The compensation for the Company management and employees is the responsibility of the President and CEO using internal Company bases and information, board directive and market guidelines. The compensation directive is to fairly compensate management and employees based on their performance, their contributions to the Company, and the company performance and to retain key employees as a strategic asset of the Company. The Board of Directors approves employment letters or agreements for any key executive management. The compensation to the Board of Directors and Executive Committee are considered in the Board of Directors and approved by the Shareholders of the Company, or in some cases the Shareholders of the joint venture or subsidiary companies. The objective in assessing the compensation level of Directors is to be generally in line with the market and to compensate based on contribution and the performance of the Company.

Good Corporate Governance Committee The Company fully embraces the principles of Good Corporate Governance and this is the responsibility of the Board of Directors specifically to ensure its full adherence within the organization. The underlying principles of good corporate governance relies on the principles of equitable treatment and fairness of all stakeholders, the full and meaningful disclosure, and the transparency of the Company its operations and information. The stakeholders beyond all sizes of shareholders include management and employees, customers, suppliers, external organizations and businesses, joint venture partners and the business community, regulatory bodies, creditors, and the communities where we operate in. Company Management 1. Mr. David Richard Nardone President & Chief Executive Officer 2. Mr. Vivat Jiratikarnsakul Executive Vice President 3. Ms. Pattama Horrungruang Senior Vice President & Chief Financial Officer 4. Mr. Khamhoung Ratsamany Director – Industrial Estate Operations 5. Mr. Tanin Subboonrueng Director – Development 6. Mr. Sirisak Kijraksa Director – Accounting 7. Ms. Somjai Wachiraha Director – Finance 8. Mr. Niphone Harnpatanapanich Director – Residential Project Planning 9. Mr. Paopitaya Smutrakalin Director – Planning & Investor Relations 10. Ms. Jinnapat Tongviseskul Director – Residential Customer Development 11. Ms. Ladda Rojanavilaivudh Director – Industrial Customer Development 12. Ms. Anchalee Parsertchand Director – Industrial Customer Development

13. Ms. Chantana Hinkaew Director – Corporate Marketing 14. Mr. Apichat Trongsukson Assistant Director – Information System & Services The Management shall have the responsibilities as appropriately assigned by the President & CEO in order to manage the business of the company and to implement the strategies and policies as approved by the Board of Directors of the company. Selection of Companyʼs Director and Management

The Company has not appointed a Nomination Committee to date. The recommendation of new Directors to serve on the Board shall be deliberated by the Board of Directors. A Director nominee will be proposed by, any Directors, shareholders, or others for consideration. The objective in selecting Directors is to be able to attract knowledgeable experienced members with visions and reputations. After approval, the Board of Directors shall propose the candidates to the Shareholders meeting for approval. According to the company rules, one third or nearly to one third of the Board of Directors who completed their terms shall be retired by rotation in the Shareholders Meeting every year but can be reelected regard to the company guidelines.

Remuneration for Director and Management The total remuneration for 8 Directors in 2004 was Baht 15,005,000.00 The total remuneration for 16 Executive Committee and Management in 2004 was Baht 102,405,636.66 Good Corporate Governance The Board of Directors are collectively responsible for the Good Corporate Governance of the Company, and in their role to direct monitor and supervise the strategy policy and control of the Company provide this direction to the Management of the Company to be adhered to. Good Corporate Governance is developed in conformity with the 15 guidelines of the SETʼs Code of Best Practices. 1. Good Corporate Governance Policy The Company policy is to fully embrace the principles of Good Corporate Governance and this is the responsibility of the Board of Directors specifically to ensure its full adherence within the organization and by practice within the management and organization of the Company. The underlying principles of good corporate governance relies on the principles of equitable treatment and fairness of all stakeholders, the full and meaningful disclosure, and the transparency of the Company its operations and information. 2. Rights and Equitable Treatment to Shareholders All shareholders are invited to the annual shareholderʼs meeting. The company would send out an invitation letter and agenda of each meeting to the shareholders prior to the meeting for their consideration. Shareholders have voting rights equal to the number of shares owned and must exercise all eligible votes to safeguard their investment in voting for a resolution, an opinion for a significant decision making, for example, regulations amendment, capital increase. All shareholders have right to receive correct, up-to-date, fully disclosed information. Shareholders wishing to appoint a proxy representation may appoint any person or may elect to appoint the Independent Director and Chairman of the Audit Committee as recommended by the SEC.

3. Rights of Various Groups of Stakeholders The company realizes and respects the rights of various groups of stakeholders, including shareholders, minority shareholders, employees, customers, creditors, vendors, the public and communities through various procedures such as the Shareholdersʼ Meeting, providing information on employeeʼs rights concerning welfare benefits, receiving all inquiries from customers and nearby communities, environmental education and community programs in the areas where we operate, contracts with customers and ongoing dialogue, and contracts entered with vendors and suppliers. 4. Shareholdersʼ Meeting A Shareholdersʼ Meeting is to be held at least once a year. Prior to the meeting, not only does the company send an invitation letter along with the Shareholderʼs Meeting agenda in advance, but also publish the meeting in the local media to ensure the full disclosure of the scheduled meeting. During the meeting, the Board of Director provides Shareholdersʼ information and gives opportunity to Shareholders to raise any concerns and/or issues related to the companyʼs operation. The Board of Director will also directly monitor and supervise the companyʼs management to efficiently operate and manage as the business plan. Additionally Shareholders could contact the company anytime through the Investor Relations Department and the company website. 5. Leadership & Vision The companyʼs Board of Directors, selected to have a broad experience level, formulates the companyʼs vision, strategy, oversight of its business plan, and oversees a level of control and risk management of its operation. The Board of Directors objective is to maximize the return to shareholders in a controlled way. 6. Conflict of Interest • Conflict of Interest The Companyʼs Board of Directors and Management have been acknowledged and realized the importance of legal and ethical conflict of interest and related transactions guidelines. The company has disclosed, in accordance with the regulations of Stock Exchange of Thailand, such information, detail and reason/necessity, if any in the companyʼs Annual Report and the 56-1 Form. The Company further uses the Audit Committee, internal auditors, external auditors, and external lawyers to review compliance. • Insider Trading Controls The Companyʼs Board of Directors and Management uses a number of safeguards to prevent the risks that may occur as recommended by the Audit Committee, the outsourced internal auditor, external auditor, and professional legal advisors. The Company has set an internal control system to follow SETʼs rules and regulations in preventing internal information disclosure to outsiders prior to the company press release. The Company also informs the Board of Directors and Management about the notification of SET and SEC concerning rules, procedures and disclosure of securities holdings and changes in holdings.

7. Business Ethics The Company policy from the Board of Directors, communicated through top management to both management and employees in the employee handbook is to conduct business with sound ethics toward the company, all stakeholders, and the public. 8. Balance of Power for non-management Directors The companyʼs Board of Directors consists of 8 directors which are: • Directors 5 persons • Independent Directors - Audit Committee 3 persons Therefore, the company has 3 directors who are independent and are not involved in the daily operations of the company. 9. Aggregation or Segregation of Positions The companyʼs Chairman of the Board of Directors is not the same person as the President & CEO and the structure of the Board of Directors consists of three Independent Directors with highly experience and knowledge in accounting, finance, and other businesses. This creates a balance between the interests and representation of the shareholders and the management as well as independent persons whom could review the companyʼs business plans, controls, and create a balanced view according to the company Audit Committee Charter. 10. Remuneration for Director and Management The remuneration of the companyʼs Directors and Management has been considered and proposed for approval in the Shareholders Meeting. This is in order to be competitive in the market in attracting highly qualified individuals, to reflect the contributions and performance of the individuals in meeting the company objectives, and consistent with the performance of the Company. 11. Board of Directorsʼ Meeting During 2004, from January to December, the company held 7 Board of Directorsʼ Meetings. There were calls for regular meetings and/or for emergency meetings when need of the directors/ committeeʼs consideration, opinion and decision by sending out prior notice, invitation and agenda to all directors and committee. 12. Committee The authority and responsibility of the Board of Directors and Committee are clearly defined. The report of the Board and Committeesʼ meeting as well as any items for further consideration are reviewed by the related Committee for the accuracy and completeness before distributing out for further action. 13. Controlling System & Internal Audit The Audit Committee is appointed to be responsible to analyze, review, follow, and discuss with the external auditor, the outsourced internal audit, and the management for the accuracy, completeness and accountability of the financial statements and the company internal control system effectiveness including giving the observation notes according to related laws, regulations of the Government and SET, General Accepted Accounting Principles and Good Corporate Governance. The Audit Committee meets and reports to the Board of Directors at least quarterly and has an annual Audit Committee Report as included in the Company Annual Report.

14. Report from the Board of Directors on the companyʼs Financial Statements With a thoroughly consideration and carefully review the companyʼs financial statements, the Board of Directors will ensure its follow the Generally Accepted Accounting Standard. The company has regularly exercised an appropriate accounting policy and standard. In addition, the Board of Directors as the plan recommends by the Audit Committee and Management to appoint the outsiders to be the internal Auditors, to observe the companyʼs internal control system and to verify the completeness and accuracy of the companyʼs financial statements. 15. Relations with Investors Investor Relations Department has been established for individual investors or stockholders benefits and interests as the company sees the significant of their investments and values. The analyst meetings are held consistently to meet with investors and analysts to provide on the updated company financial results and businesses. A site visit or company visit are always welcome by contacting the Investor Relations Department. The company information and press releases can also be found in the company website at www.hemaraj.com. Or email any concerns to [email protected]. Related Party Transactions 1. Related Party Transactions during the year During the year of 2004 and 2003, the Company had certain transactions with its subsidiaries associated companies and related companies relating to normal business operations (please see Note to financial statement No.4) 2. The Necessity and appropriateness of Transactions Transactions with related parties occurred during the year were relating to the Companyʼs normal business operations with fair and reasonable market price and were considered and approved by Board of Directors, Executive Committee or top management, as the cases may be, including reviewing by the Audit Committee according to the regulations as noted in the Companyʼs Articles of Association. 3. Policy and Criteria in approving related party transactions. Transactions with related parties occurred and will occur in the future will be proposed and approved by top management, Executive Board, Board of Directors or Shareholdersʼ Meeting, as the case may be, according to as noted in the Company Articles of Association. The Company has the policy for related party transactions as follows : - Transactions with related parties are related to normal business operations with fair and reasonable price. - The Audit Committee will review those related party transactions to be compliance with the regulations as the Companyʼs Articles of Association. - The Company will disclose those related party transactions according to the related Rules and Guideline of the Stock Exchange of Thailand and The Securities and Exchanges Commission of Thailand and according to the generally accepted accounting principles.

www.hemaraj.com

The Audit Committee of Hemaraj Land And Development PLC was set up in accordance with the resolution of Extraordinary General Meeting of Shareholders No. 1/1999. The Committee comprises the following members :- 1) Mr. Sudhipan Charumani Committee Chairman and Independent Director 2) Mr. Peter J. Edmondson Independent Director 3) Mrs. Punnee Worawuthichongsathit Independent Director The Audit Committee met formally on four occasions in 2004 to monitor the quarterly financial statements of the Company and its consolidated positions, check compliance and review internal control matters. Special attention was paid to the adequacy of provisions relating to contingent liabilities and adequacy of information disclosure in respect of related party transactions. Reports were received from and meetings held with the external auditors, the outsourced internal auditor, the external legal advisor and Company management. The external auditors, A.M.T & Associates, who are well familiar with the Companyʼs systems and procedures, have given the Company an unqualified Auditorʼs Report for this financial year, as in the previous period, with no indication of any unsolved matters. No further court litigations have arisen during 2004, while the two remaining cases from the past have been provided for in full. Moreover, the Company is presently in a very sound financial position, with its Directors and Management allocating extra time and efforts to the promotion of corporate governance and transparency in an increasingly active manner. Internal audit work for the year covered detailed reviews of the Companyʼs and its local subsidiariesʼ quarterly financial statements, in addition to a systematic test check on procedural matters, compliance with relevant law, regulations and accepted accounting principles, as well as verification of control over financial and important documents, with no significant weaknesses being detected. With regard to the Account Department, much progress was made in meeting Management and Audit Committee requirements, especially on the important issue of speeding up the preparation of quarterly and annual financial statements to facilitate reviewersʼ work. To the best of the Committeeʼs knowledge, the financial statements in the Companyʼs Annual Report for the year 2004 are fair and accurate. The Committee has recommended to the Board of Directors, for proposal to the Annual General Meeting of Shareholders, that Professor Kesree Narongdej of A.M.T & Associates be re-appointed as the Companyʼs external auditor for the Financial Year ending 31 December 2005, at the same remuneration as in 2004 (Sudhipan Charumani) Chairman of the Audit Committee 25 February 2005

Audit Committee’s Report

To the Shareholders of Hemaraj Land and Development Public Company Limited I have audited the consolidated balance sheets of Hemaraj Land and Development Public Company Limited and its subsidiaries as of December 31, 2004 and 2003, and the related consolidated statements of changes in shareholdersʼ equity, income and cash flows for the years then ended. I have also audited the financial statements for the same periods of Hemaraj Land and Development Public Company Limited. These financial statements are the responsibility of the Companyʼ s management as to their correctness and completeness of the presentation. My responsibility is to express an opinion on these financial statements based on my audits. I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Hemaraj Land and Development Public Company Limited and its subsidiaries and of Hemaraj Land and Development Public Company Limited as of December 31, 2004 and 2003, the results of their operations, and cash flows for the years then ended in conformity with generally accepted accounting principles. (KESREE NARONGDEJ) Certified Public Accountant Registration No. 76 A.M.T. & ASSOCIATES Bangkok, Thailand February 18, 2005

Independent Certified Public Accountants’ Report

HEMARAJ LAND AND DEVELOPMENT PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Balance Sheets

ASSETS NOTE

BAHT

CONSOLIDATED THE COMPANY ONLY

As of 31st December, 2004




CURRENT ASSETS

Cash and cash equivalents 5 572,723,102.91 841,662,969.38 307,334,496.20 207,505,929.32

Current investments

Time deposits 5,6 and 27 30,325,817.34 13,509,833.93 22,968,285.32 1,001.85

Promissory notes - financial institutions 5 and 6 400,000,000.00 250,000,000.00 400,000,000.00 250,000,000.00

Marketable securities 6 131,993,832.87 194,585,439.82 131,993,832.87 194,585,439.82

Trade account receivables 7

Related parties, net - - - -

Other parties, net 551,556,427.09 238,553,768.20 8,791,802.86 10,790,563.86

Short - term loans to related parties 4 2,179,164.80 2,175,015.83 666,666,375.71 546,998,009.16

Cost of real estate developments, net 8, 27 and 28 4,657,410,909.00 3,057,210,654.41 1,209,233,372.26 792,310,639.91

Other current assets 23,584,929.24 21,069,591.95 9,840,081.85 5,558,244.62

Total Current Assets 6,369,774,183.25 4,618,767,273.52 2,756,828,247.07 2,007,749,828.54

NON - CURRENT ASSETS

Investments for using the equity method 2 and 4 14,733,157.47 6,773,529.44 3,348,673,842.04 2,827,141,645.83

Other long - term investments

Related parties, net 4 1,500,000.00 22,695,000.00 - 21,195,000.00

Other parties 9 176,000,002.50 226,059,508.06 175,000,002.50 225,059,508.06

Long - term loans to other parties 11,199,558.22 11,008,244.12 11,199,558.22 11,008,244.12

Property, plant and equipment, net 10 166,171,132.78 172,101,309.51 29,059,354.80 26,552,258.81

Assets for rent, net 11 and 27 797,134,486.34 560,374,195.55 51,769,726.06 48,891,550.39

Other non - current assets

Leasehold land and land held for commercial purposes, net 12 and 27 281,064,250.00 1,085,282,436.39 281,064,250.00 1,085,282,436.39

Sinking fund, net 13 and 28 197,836,827.69 322,712,748.04 129,902,023.93 137,390,694.94

Others 46,696,531.30 35,114,298.40 27,561,777.20 14,766,721.56

Total Non - Current Assets 1,692,335,946.30 2,442,121,269.51 4,054,230,534.75 4,397,288,060.10

TOTAL ASSETS 8,062,110,129.55 7,060,888,543.03 6,811,058,781.82 6,405,037,888.64

Balance Sheets


LIABILITIES AND SHAREHOLDERS EQUITY NOTE

BAHT






CURRENT LIABILITIES

Bank overdrafts and short-term loans from financial institutions 27 400,669,236.80 401,725,881.52 300,000,000.00 350,738,219.53

Convertible bonds 14 - 1,233,741.81 - 1,233,741.81

Trade account payables 272,860,013.39 247,721,259.88 100,321,405.19 21,679,756.85

Current portion of long - term loans

Related person 4 and 16 49,320,999.94 106,066,999.89 - -

Others 17, 18 and 27 - 17,432,531.85 - 14,535,859.72

Short - term loans from related party 4 40,039,482.05 60,576,986.30 24,462,416.08 39,843,524.40

Other current liabilities

Income received in advance 363,900,208.00 461,043,221.51 239,380,754.63 558,387.46

Accrued interest expenses 12,666,917.78 5,413,758.41 2,585,753.44 4,575,402.24

Account payable shares purchase 20,000,000.00 - 20,000,000.00 -

Other Account payable 13 and 28 14,181,548.41 1,700,621.87 1,341,509.49 -

Others 123,171,899.49 73,046,960.07 70,983,847.68 44,626,872.39

Total Current Liabilities 1,296,810,305.86 1,375,961,963.11 759,075,686.51 477,791,764.40

NON - CURRENT LIABILITIES

Long - term loans from related party 4 - - 1,153,469,462.92 1,449,722,807.27

Long - term loans from related persons 4 and 16 31,144,000.07 80,446,000.12 - -

Other long - term loans 17 and 27 1,133,127,150.06 494,197,381.22 11,400,000.00 47,470,000.00

Provisions 18 224,520,547.95 462,732,054.80 224,520,547.95 462,732,054.80

Other non - current liabilities -

Retentions payable 58,831,231.71 35,318,270.90 15,190,072.58 2,319,027.38

Guarantee Received 52,179,579.17 39,120,155.25 - -

Deferred leasehold right income 12,548,446.64 13,722,212.82 - -

Others 12,931,229.18 30,533,651.34 5,320,887.00 27,031,178.00

Total Non - Current Liabilities 1,525,282,184.78 1,156,069,726.45 1,409,900,970.45 1,989,275,067.45

Total Liabilities 2,822,092,490.64 2,532,031,689.56 2,168,976,656.96 2,467,066,831.85

Balance Sheets


NOTE

BAHT






SHAREHOLDERS EQUITY

Share capital - Baht 1 par value 19 and 20

Authorized share capital Common stocks 13,000,000,000 shares 13,000,000,000.00 13,000,000,000.00 13,000,000,000.00 13,000,000,000.00

Issued and paid-up share capital

Common stocks 5,831,793,766 shares, forthe year 2004 and 5,416,570,061shares for the year 2003

5,831,793,766.00 5,416,570,061.00 5,831,793,766.00 5,416,570,061.00

Warrants 19 and 20 10,982,820.20 12,158,892.80 10,982,820.20 12,158,892.80

Discount on common stocks 19 and 20 (2,618,167,546.01) (2,321,628,223.21) (2,618,167,546.01) (2,321,628,223.21)

Unrealized gain from changes in carrying amount of available-for-sale securities

28,058,104.49 103,561,581.44 28,058,104.49 103,561,581.44

Currency translation differences (27,155,313.03) (26,813,747.49) (27,155,313.03) (26,813,747.49)

Retained earnings

Appropriated - legal reserve 23 295,396,979.53 247,864,807.51 180,246,015.41 132,713,843.39

Earnings 1,121,173,313.68 506,257,684.74 1,236,324,277.80 621,408,648.86

Total Equity of Parent

Companyʼs Shareholders 4,642,082,124.86 3,937,971,056.79 4,642,082,124.86 3,937,971,056.79

Minority interest 597,935,514.05 590,885,796.68 - -

Total Shareholders Equity 5,240,017,638.91 4,528,856,853.47 4,642,082,124.86 3,937,971,056.79

TOTAL LIABILITIES AND

SHAREHOLDERS EQUITY 8,062,110,129.55 7,060,888,543.03 6,811,058,781.82 6,405,037,888.64

Statements of changes in shareholders’ equityConsolidated


FOR

TH

E Y

EAR

S EN

DED

DEC

EMB

ER 3

1, 2

004

AN

D 2

003

NO

TE

BAH

T

Issu

ed a

nd

paid

-up

shar

e ca

pita

l W

arra

nts

Prem

ium

(d

iscou

nt)

on c

omm

on

stoc

ks

Unr

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ed

gain

(los

s) fr

om

chan

ges i

n ca

rryi

ng a

mou

nt

of

avai

labl

e-fo

r-sa

le

secu

ritie

s

Cur

renc

y tr

ansla

tion

diffe

renc

es

Ret

aine

d ea

rnin

gs (d

efici

t)

Min

ority

inte

rest

To

tal

App

ropr

iate

d Le

gal r

eser

ve

Earn

ings

(D

efici

t)

Beg

inni

ng b

alan

ce a

s of J

anua

ry 1

, 200

4 5,

416,

570,

061.

00

12,1

58,8

92.8

0 (2

,321

,628

,223

.21)

103,

561,

581.

44

(26,

813,

747.

49)

247,

864,

807.

51

506,

257,

684.

74

590,

885,

796.

68

4,52

8,85

6,85

3.47

Unr

ealiz

ed g

ain

(loss

) fro

m c

hang

es in

car

ryin

g am

ount

of a

vaila

ble-

for-s

ale

secu

ritie

s -

- -

(75,

503,

476.

95)

- -

- -

(75,

503,

476.

95)

Cur

renc

y tra

nsla

tion

diffe

renc

es

- -

- -

(341

,565

.54)

- -

- (3

41,5

65.5

4)

Net

gai

n (lo

ss) n

ot re

cogn

ized

in

the

inco

me

stat

emen

t -

- -

(75,

503,

476.

95)

(341

,565

.54)

- -

- (7

5,84

5,04

2.49

)

Net

pro

fit

- -

- -

- -

950,

643,

440.

31

- 95

0,64

3,44

0.31

Min

ority

inte

rest

-

- -

- -

- -

92,9

69,3

11.8

5 92

,969

,311

.85

App

ropr

iate

d - l

egal

rese

rve

23-

- -

- -

47,5

32,1

72.0

2 (4

7,53

2,17

2.02

)

Div

iden

d 23

- -

- -

- -

(288

,195

,639

.35)

(85,

919,

594.

48)

(374

,115

,233

.83)

Exer

cise

of W

arra

nt

2041

5,22

3,70

5.00

(1

,176

,072

.60)

(296

,539

,322

.80)

- -

- -

- 11

7,50

8,30

9.60

Endi

ng b

alan

ce a

s of D

ecem

ber 3

1, 2

004

5,83

1,79

3,76

6.00

10

,982

,820

.20

(2,6

18,1

67,5

46.0

1)28

,058

,104

.49

(27,

155,

313.

03)

295,

396,

979.

53

1,12

1,17

3,31

3.68

59

7,93

5,51

4.05

5,

240,

017,

638.

91

Beg

inni

ng b

alan

ce a

s of J

anua

ry 1

, 200

3 3,

547,

423,

850.

00

14,1

26,9

39.8

0 (1

,556

,718

,703

.80)

3,15

1,43

0.29

74

,237

,969

.85

210,

491,

426.

19

(750

,989

,580

.56)

545,

103,

849.

88

2,08

6,82

7,18

1.65

Unr

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ed g

ain

(loss

) fro

m c

hang

es in

car

ryin

g am

ount

of a

vaila

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for-s

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secu

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s -

- -

100,

410,

151.

15

- -

- -

100,

410,

151.

15

Cur

renc

y tra

nsla

tion

diffe

renc

es

- -

- -

(101

,051

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.34)

- -

- (1

01,0

51,7

17.3

4)

Net

gai

n (lo

ss) n

ot re

cogn

ized

in

the

inco

me

stat

emen

t -

- -

100,

410,

151.

15

(101

,051

,717

.34)

- -

- (6

41,5

66.1

9)

Net

pro

fit

- -

- -

- -

1,38

3,30

6,24

2.87

-

1,38

3,30

6,24

2.87

Min

ority

inte

rest

-

- -

- -

- -

(83,

013,

973.

50)

(83,

013,

973.

50)

App

ropr

iate

d - l

egal

rese

rve

23-

- -

- -

37,3

73,3

81.3

2 (3

7,37

3,38

1.32

)-

-

Div

iden

d 23

- -

- -

- -

(88,

685,

596.

25)

128,

795,

920.

30

40,1

10,3

24.0

5

Com

mon

Sto

ck

1,20

0,00

0,00

0.00

-

(294

,480

,000

.00)

- -

- -

- 90

5,52

0,00

0.00

Exer

cise

of W

arra

nts

2066

9,14

6,21

1.00

(1

,968

,047

.00)

(470

,429

,519

.41)

- -

- -

- 19

6,74

8,64

4.59

Endi

ng b

alan

ce a

s of D

ecem

ber 3

1, 2

003

5,41

6,57

0,06

1.00

12

,158

,892

.80

(2,3

21,6

28,2

23.2

1)10

3,56

1,58

1.44

(2

6,81

3,74

7.49

)24

7,86

4,80

7.51

50

6,25

7,68

4.74

59

0,88

5,79

6.68

4,

528,

856,

853.

47


Statements of changes in shareholders’ equityThe Company Only

FOR

TH

E Y

EAR

S EN

DED

DEC

EMB

ER 3

1, 2

004

AN

D 2

003

NO

TE

BAH

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Issu

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Prem

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(d

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ks

Unr

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gain

(los

s) fr

om

chan

ges i

n ca

rryi

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mou

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of

avai

labl

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secu

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s

Cur

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diffe

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Ret

aine

d ea

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79

FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE

BAHT CONSOLIDATED THE COMPANY ONLY

2004 2003 2004 2003REVENUES

Sales of land 30 2,548,643,833.44 853,836,324.19 916,491,225.00 20,734,095.86 Sale of pre-fabricated factory 4 and 30 26,206,689.35 92,784,929.49 4,290,000.00 1,067,644.94 Sale of condominium 311,280,904.95 311,280,904.95 Service income 4 and 30 602,419,985.81 564,159,814.62 120,006,303.50 146,947,380.53 Income from increase of salable area 21 43,875,602.00 - 43,875,602.00 - Other income

Profits from sales of investments 4 77,488,146.44 288,184,492.88 77,488,146.44 288,184,492.88 Interest income 4 13,065,187.18 1,614,573.45 34,764,281.96 33,333,633.49 Management income 4 - 1,294,603.09 12,896,612.73 15,367,795.35 Commission income 4 - 18,108,090.75 39,873,761.93 76,539,339.24 Gain on dividend 3,549,513.00 3,243,636.00 3,549,513.00 3,093,637.00 Gain on exchange rate - 171,060,557.71 - 119,058,555.05 Adjustment of loss on decline in value of estate development cost 8 and 12 74,651,518.64 - 74,651,518.64 - Guarantee income 21,195,000.00 - 21,195,000.00 - Others 9,879,075.30 56,158,291.92 3,818,795.07 45,314,392.38

Share of profits from investments for using the equity method - subsidiary companies

2 and 4 - - 556,016,936.99 1,015,896,983.22

Share of profit from investments for using the equity method - associated companies

2 and 4 1,559,628.03 - 1,559,628.03 -

Total Revenues 3,733,815,084.14 2,050,445,314.10 2,221,758,230.24 1,765,537,949.94

EXPENSES Cost of land sales 1,665,990,946.64 510,209,558.60 839,664,763.87 15,021,366.11 Cost of pre-fabricated factory sales 21,792,621.41 70,831,762.09 4,439,715.84 1,394,229.18 Cost of condomonium sales 173,159,452.98 173,159,452.98 Cost of services 4 403,899,223.04 394,191,119.38 79,915,305.97 114,250,493.68 Selling and administrative expenses 4 and 22 449,555,225.85 255,823,209.09 244,001,563.35 128,501,213.30 Other expenses

Estimated loss on possible loss from lawsuit 18,049,315.07 97,646,772.67 18,049,315.07 97,646,772.67 Loss on exchange rate 109,883.28 116,824.29 Loss on investment revaluation 21,195,000.00 - 21,195,000.00 -

Share of losses from investments for using the equity method - associated companies

2 and 4 - 2,146,643.03 - 2,146,643.03

Total Expenses 2,753,751,668.27 1,330,849,064.86 1,380,541,941.37 358,960,717.97

PROFIT BEFORE INTEREST AND INCOME TAX EXPENSES 980,063,415.87 719,596,249.24 841,216,288.87 1,406,577,231.97 INTEREST EXPENSES 4 and 14 42,117,541.39 54,963,482.17 16,489,959.31 27,909,260.05 INCOME TAX EXPENSES 20,250,233.07 2,189,986.15 - - PROFIT AFTER TAX 917,695,641.41 662,442,780.92 824,726,329.56 1,378,667,971.92 MINORITY INTEREST (92,969,311.85) (83,013,973.50) - -

PROFIT FROM ORDINARY ACTIVITIES 824,726,329.56 579,428,807.42 824,726,329.56 1,378,667,971.92 EXTRAORDINARY ITEMS 24

- Gain from compromising debt 125,760,821.92 - 125,760,821.92 - - Gain from convertible bond repurchases 156,288.83 723,877,435.45 156,288.83 4,638,270.95 - Gain on right transfer - 80,000,000.00 - -

NET PROFIT 950,643,440.31 1,383,306,242.87 950,643,440.31 1,383,306,242.87

Statements of Income


Statements of IncomeFOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


NOTE


2004 2003 2004 2003BASIC EARNINGS PER SHARE (BAHT)

Profit from ordinary activities 0.15 0.15 0.15 0.35 Extraordinary item, net 0.02 0.20 0.02 0.00 Net profit 25 0.17 0.35 0.17 0.35

DILUTED EARNINGS PER SHARE (BAHT) Profit from ordinary activities 0.10 0.08 0.10 0.20 Extraordinary item, net 0.01 0.12 0.01 0.00 Net profit 25 0.11 0.20 0.11 0.20

Statements of Cash FlowsFOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003



2004 2003 2004 2003CASH FLOW FROM OPERATING ACTIVITIES

Net profits 950,643,440.31 1,383,306,242.87 950,643,440.31 1,383,306,242.87 Adjustments to reconcile net profit to net cash

provided by (used in) Allowance for doubtful accounts (6,414,739.69) (24,227,536.97) (4,881,396.72) (26,577,907.17)Share of (profits) losses from investments for using

the equity method - subsidiaries companies - - (556,016,936.99) (1,015,896,983.22)

Share of (profit) losses from investments for using the equity method - associated companies

(1,559,628.03) 2,146,643.03 (1,559,628.03) 2,146,643.03

Loss on investment revaluation 21,195,000.00 - 21,195,000.00 - Gain on fair value of securities - 1,519,545.78 - (66,618,633.17)Adjustment of loss on decline in value of estate development cost (74,651,518.64) - (74,651,518.64) - (Gain) loss exchange rate 127,716.44 (37,200,000.00) 127,716.44 (37,200,000.00)Gain from sales of equipment - (5,240,134.42) - (550,412.61)Gain from sales of investments (76,457,040.44) (288,184,492.88) (76,457,040.44) (288,184,492.88)Depreciation and amortisation 67,905,718.47 69,529,188.51 14,125,671.11 19,887,269.18 Amortization of goodwill 745,120.79 - 745,120.79 - Gain from compromising debt (125,760,821.92) - (125,760,821.92) - Gain from convertible bonds repurchases (156,288.83) (723,877,435.45) (156,288.83) (4,638,270.95)(Decrease) in estimation for convertible bond redemption - (51,900,500.56) - (51,900,500.56)(Decrease) in estimation for guaranteed bond redemption - (5,694,752.01) - - Increase in estimated loss from lawsuit 18,049,315.07 97,646,772.67 18,049,315.07 97,646,772.67 Realization of deferred leasehold right income (22,681,696.82) (21,123,185.36) - - Net profit of minority interests 92,969,311.85 83,013,973.50 - - (Increase) decrease in accounts receivable - related parties 1,795,319.33 (2,073,024.83) 1,795,319.33 - (Increase) decrease in accounts receivable - other parties (308,383,238.53) 43,343,290.33 5,084,838.39 19,150,811.74 (Increase) in cost of real estate developments (321,069,230.60) (837,509,827.32) (378,442,776.01) (457,042,353.10)(Increase) in other current assets (2,432,605.70) (1,582,330.79) (4,281,837.23) (702,631.69)Decrease in leasehold land and land held for

commercial purposes 840,389,748.69 - 840,389,748.69 -

(Increase) decrease in other non - current assets (11,472,232.90) 11,792,897.93 (12,795,055.64) (2,6.994,447.98)Increase in trade account payables 25,138,753.51 169,344,430.94 78,641,648.34 13,754,598.37 Increase (decrease) in income received in advance (97,143,013.51) 302,301,373.68 238,822,367.17 (1,069,190.80)Increase (decrease) in accrued interest expense 7,502,535.49 (211,968,499.63) (1,740,272.68) (212,806,855.80)(Decrease) in accounts payable - the Industrial

Estate Authority of Thailand - (17,416,623.22) - (10,583,010.39)

Increase in other accounts payable 12,480,926.54 - 1,341,509.49 - Increase (decrease) in other current liabilities 45,970,188.44 41,481,124.50 26,356,975.29 (3,308,373.58)Increase in retentions payable 23,512,960.81 5,387,187.77 12,871,045.20 1,166,831.89 Increase in deferred leasehold right income 21,507,930.64 19,723,654.59 - - Increase in guarantee payable 12,343,704.92 4,216,950.00 - - Increase (decrease) in other non - current liabilities (17,602,422.16) (26,721,201.68) (21,710,291.00) 5,836,178.00

Net Cash Provided by (Use in) Operating Activities 1,076,493,213.53 (19,966,269.02) 951,735,851.49 (636,878,716.15)

Statements of Cash FlowsFOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


NOTE


2004 2003 2004 2003

CASH FLOWS FROM INVESTING ACTIVITIES

(Increase) in current investments in securities (12,911,870.00) (4,003,925.87) (12,911,870.00) (4,003,925.87)

(Increase) decrease in short - term loans to related parties (4,148.97) - (119,668,366.55) 37,516,851.07

(Increase) decrease in investments for using the equity method (674,885,653.97) (3,104,000.00) (674,885,653.97) 5,083,517.50

(Increase) in long - term investment to related parties - (50,000,000.00) - (50,000,000.00)

(Increase) decrease in long - term loans to other parties (319,030.54) 49,500,986.89 (319,030.54) 49,500,986.89

Dividend received from subsidiary companies - - 718,879,712.00 107,847,955.80

Cash received from sales of equipment - 13,185,120.61 - 552,701.87

Cash received from sale of the investments in securities 126,516,546.00 467,413,017.64 126,516,546.00 467,413,017.64

(Increase) in building and equipment (17,929,429.24) (18,745,711.47) (11,915,116.98) (13,369,338.37)

(Increase) in assets for rent (16,023,566.96) (61,307,656.88) - (54,296,982.00)

(Increase) decrease in sinking fund 107,636,914.98 (30,494,935.97) (107,154.78) (16,840,143.09)

Net Cash Provided by (Used in) Investing Activities (487,920,238.70) 362,442,894.95 25,589,065.18 529,404,641.44

CASH FLOWS FROM FINANCING ACTIVITIES

Increase (decrease) in bank overdrafts (1,056,644.72) 401,606,563.72 (50,738,219.53) 350,660,992.95

Cash paid for convertible bond redemption (1,326,829.10) (428,572,782.87) (1,326,829.10) (1,147,811,947.37)

Cash paid for compromising debt (130,500,000.00) - (130,500,000.00) -

Increase (decrease) in short - term loans from related parties (20,537,504.25) 8,576,986.30 (15,381,108.32) 13,117,348.54

Increase (decrease) in long - term loans from related parties - - (285,289,719.90) 491,053,715.86

(Decrease) in long - term loans from related person (106,048,000.00) (57,737,000.03) - -

Increase (decrease) in other long - term loans (178,502,763.01) 78,254,376.83 (50,605,859.72) (177,245,160.00)

Cash paid for guaranteed bond redemption - (581,935,849.54) - -

Proceeds from increasing share capital - 905,520,000.00 - 905,520,000.00

Proceeds from exercise of warrants 117,508,309.60 196,748,644.59 117,508,309.60 196,748,644.59

Cash paid for dividend (288,195,639.35) (88,685,596.25) (288,195,639.35) (88,685,596.25)

Dividend paid to minority interests (85,920,288.00) (37,232,026.70) - -

Net Cash Provided by (Used in) Financing Activities (694,579,358.83) 396,543,316.05 (704,529,066.32) 543,357,998.32

Adjustments from financial statement translations (341,565.54) (163,848,874.14) - -

Increase in cash and cash equivalents, Net (106,347,949.54) 575,171,067.84 272,795,850.35 435,883,923.61

Cash and cash equivalents, beginning of periods 5 1,095,899,419.61 501,815,246.29 457,506,931.17 21,096,014.89

Cash at banks pledged as collateral, beginning of periods 5 13,497,450.18 28,186,489.18 - 526,992.67

Cash at banks pledged as collateral, end of periods 5 and 15 (30,313,911.11) (13,497,450.18) (22,968,285.32) -

Cash and cash equivalents, end of periods 5 972,735,009.14 1,091,675,353.13 707,334,496.20 457,506,931.17

Statements of Cash Flows

BAHT


2004 2003 2004 2003

OPERATING ACTIVITIES, INVESTING ACTIVITIES AND

FINANCING ACTIVITIES NOT AFFECTING CASH

Increase in unrealised gain from changes in carrying amount of available-for-sale securities

76,885,002.15 100,410,151.15 76,885,002.15 100,410,151.15

Increase in surplus from available-for-sale securities by above (76,885,002.15) (100,410,151.15) (76,885,002.15) (100,410,151.15)

Decrease in cost of real estate development by transfer to assets for rent

247,543,830.96 (136,023,916.49) - -

Increase in assets for rent by above (247,543,830.96) 136,023,916.49 - -

Increase in investments for subsidiary company (20,000,000.00) - (20,000,000.00) -

Increase in account payable shares purchase 20,000,000.00 - 20,000,000.00 -

SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION

Cash paid during the period for :

Interest expenses 54,705,370.63 66,720,453.35 16,900,279.75 15,192,060.58

Income tax expenses 30,285,641.32 3,755,388.55 13,102,186.23 3,623,669.14

FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


Notes to Financial StatementsDECEMBER 31, 2004 AND 2003


1. GENERAL INFORMATION

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

The Company, which is the parent company of Hemaraj Group, its principal activity is the real estate developer as follow :

1. Industrial estate development projects located in the Eastern Seaboard of Thailand. The projects are operating under the joint operation agreements with the Industrial Estate Authority of Thailand, in the names of the Company and its 4 subsidiaries as follows:

Company Name Industrial Estate Site Location

Hemaraj Land and Development Plc.

Chonburi Industrial Estate (Bor Win)

Sriracha district, Chonburi province

Eastern Industrial Estate Co., Ltd.

Eastern Industrial Estate (Map Ta Phut)

Muang district, Rayong province

Eastern Seaboard Industrial Estate (Rayong) Co., Ltd.

Eastern Seaboard Industrial Estate (Rayong)

Pluak Daeng district, Rayong province

Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. (formerly : KK-JTCI (Thailand) Co.,Ltd.)

Hemaraj Eastern Seaboard Industrial Estate

Pluak Daeng district, Rayong province

2. A condominium for sale being developed on the behalf of the Companyʼs name called “The Park of Chidlom”, which located on Chidlom road, Bangkok.

3. Service business related to the mentioned industrial estates consisting of service providing for public utilities, prefabricated factory for sale and lease, land rental, commercial plaza rental, pipe rack rental in Industrial Estates, building contractor, and others.

Hemaraj Groupʼs head office is located at 18th floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang subdistrict, Suanluang district, Bangkok, Thailand 10250.

As at December 31, 2004 and 2003, Hemaraj Group employs 168 and 153 staffs, respectively.

2. BASIS OF CONSOLIDATED FINANCIAL STATEMENT PRESENTATION

2.1 Basis for preparation and presentation of financial statementsThe financial statements of the Company have been presented in accordance with the Department of Business Development s announcement on September 14, 2001, regarding the brief items to be presented in the financial statements B.E. 2544 and in conformity with generally accepted accounting standards.

The Companyʼs financial statements are prepared in the Thai language as required by Thai law, and translated into English for the convenience of a reader of the financial statements.

Certain amounts in the financial statements for the year ended December 31, 2003 have been reclassified to conform to the current year classification, with on effect on previously reported net earnings or shareholders equity.

2.2 Basis for preparation and presentation of consolidated financial statementsThe consolidated accounts incorporate the accounts of the Company and its majorities own directly or indirectly (over 50%) subsidiaries as at December 31, are as follows:

TYPE OF BUSINESSHOLDING OF INTEREST (%)

2004 2003

Eastern Industrial Estate Company Limited Real Estate Development 99.99 99.99

Eastern Seaboard Industrial Estate (Rayong)Company Limited

Real Estate Development 60.00 60.00

Hemaraj Eastern Seaboard Industrial Estate Co., Ltd. * Real Estate Development 99.99 -

Eastern Pipeline Services Company Limited Pipe Rack Rental 99.99 99.99

H-International (BVI) Company Limited Holding Company 100.00 100.00

Hemaraj International Limited ** Holding Company 99.99 99.99

H-Construction Management and Engineering Company Limited

Engineering and ConstructionSupervision Service

99.99 99.99

The Park Residence Company Limited *** Property Development and Marketing and Service

Management

99.99 99.99

* The company has been a subsidiary since November 5, 2004.** An oversea subsidiary, used information from the financial statements were provided by the management and have not been audited. However, the total assets and net income as show in these financial statements were not material to the consolidated financial statements as a whole.*** Established in December 2003, based on information from the financial statements, which were audited by another auditor.

Significant inter company transactions are eliminated from the consolidated financial statements.

All subsidiaries were incorporated in Thailand except H-International (BVI) Company Limited and Hemaraj International Limited which were incorporated in British Virgin Islands and Cayman Islands, respectively.

Basis of consolidated financial statement presentation (continued)

In addition, the consolidated and the Companyʼs financial statements for the years ended December 31, include share of profits (losses) from associated companies, based on information from the financial statements, which were provided by the management and were not audited by an auditor, as follows:

MILLION BAHT

2004 2003

Elyo-H Facilities Management Limited 1.56 (2.14)

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Measurement Bases Used in Preparing the Financial StatementsOther than those disclosed in other topics, significant accounting policies and other notes to the financial statements, the financial statements are prepared on the historical cost basis.

Cash and Cash Equivalents Cash and cash equivalents represent cash on hand and at banks, and temporary investments net of cash at banks pledged as collateral.

Current InvestmentsAvailable-for-sale securities consist of investments in marketable securities, which are stated at fair value net of allowance for investments revaluation.

Trade Account Receivables and Allowance for Doubtful AccountsTrade account receivables represent land sale contract receivables under contract price net of installments received and deferred income. Public utilities service receivables are presented net of allowance for doubtful accounts.

Allowance for doubtful accounts is based on receivables which are overdue by more than 90 days.

Cost of Real Estate DevelopmentsCost of real estate developments consists of land costs, development costs, pre-fabricated factory costs, interest expense on loans for projects development and pre-fabricated factory construction, land deposits and advances for construction costs. These costs are transferred to cost of sales when revenue from sales is recognised.

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

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

Capitalization of Borrowing CostsThe Company and its subsidiaries have accounting policy to record interest expenses and fees on long-term loans and loan from related persons for development projects are capitalized to cost of real estate developments. The capitalization will be suspended or ceased when the development projects are interrupted or completed.

Summary of significant accounting policies (continued)

Investments and LoansInvestments- Investments in subsidiary and associated companies are recorded by using the equity method.- Other investments represent investments in related and other companies which are stated at net cost.

Gain (loss) on investment revaluation is included in the equity.

LoansThe Company and its subsidiaries have recorded allowance for doubtful debts by using uncollectible amounts, based on a review of the current financial status and the repayment ability. The recognition of interest income is ceased when overdue of more than 180 days.

Property, Plant and EquipmentLand is stated at cost. Property, plant and equipment are stated at cost less accumulated depreciation and provision for impairment loss. Motor vehicles under finance lease are stated at fair value less accummulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 5 years for equipment and 20 years for building and structures. No depreciation is provided for land.

Assets for RentLand for rent is stated at cost. Assets for rent, except land, are stated at cost less accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets of 15 years for pipe rack and 20 years for building. No depreciation is provided for land for rent.

Leasehold Right and Land Held for Commercial PurposesLeasehold right and land held for commercial purposes consist of land leasehold right, land costs, development costs and capitalised interest on loans for undeveloped projects and projects which were temporarily suspended from development.

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

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

Sinking FundThe Company and its subsidiaries have recorded a fund for the major maintenance and replacement of utilities systems and facilities for the customers in the industrial estate, under the joint operating agreements with the Industrial Estate Authority of Thailand (“IEAT”) to be Deferred Sinking Fund and has recorded amortization to be cost of services by the straight-line method over 20 years of useful lives.

Deferred Interest Expense on Hire-Purchase AgreementDeferred interest expense on hire-purchase agreement is amortised over the period of agreements.

Impairment of AssetsThe Company and its subsidiaries have evaluated the impairment of properties, plant and equipment and other assets when the event is occurred or there is the situational change, which indicates that the recoverable amount of assets will be lower than their book value. The Company and its subsidiaries will recognize the loss from impairment as an expense in the statement of income.


Income Received in AdvanceIncome received in advance represents the amounts received from real estate and condominium sales contracts, which are recognised by using the percentage of completion method, and including utilities and rental income, over the amount of revenues.

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

Revenue and Expense RecognitionOther than those disclosed in other topics, the policy of the company and its subsidiaries on revenue and expense recognition are as follows: A. Recognition of Revenue and Cost of Land Sales

Revenue from land sales are recognised upon signing of contract and receiving of installments by the percentage of completion method, using the ratio of actual development costs incurred to total estimated development costs for each projects excluding land cost. Cost of sales is calculated from the realised sales contracts based on the ratio of total estimated project costs to total estimated project sales.

Total estimated costs and sales of each project shall be revised when there are significant changes in the estimated costs and expected sales price of each project.

B. Recognition of Revenue and Cost of pre-fabricated Factory SalesRevenue and cost of pre-fabricated factory sales are recognised upon signing of sale contract.

C. Recognition of Revenue and Cost of Condominium Sales The Company recognises the revenue and cost of condominium sales by the percentage of completed work which is based on the proportion of actual costs (excluding cost of land) to the total estimated costs which are estimated by the Companyʼs engineer advisor. The Company recognizes revenue when sales contracts have been executed not less than 40% of the area opened for sales and collection received exceeds 20% of each contract value, and the progress of completed construction work is more than 10%.

D. Recognition of Income and Cost of ServicesIncome and cost of services are recognised on the accrual basis. Service income represents income received from providing of public utilities, potable water, raw water and reused water, waste water treatment processing, additional work in building construction and rental services in respect of land, commercial plaza, warehouse, factory, resident and pipe rack to the Industrial Estate, training center and business center. Cost of services represents cost incurred from providing of such services.

Revenue and cost from mini and micro pre-fabricated factory construction are recognised upon signing of contract and receiving of installments by the percentage of completion method.

The recognition of income from public utilities service is ceased when the customers cease their business operations and has payment difficulty.


E. Gain from Compromising Debt. (Hemaraj Land and Development Public Company Limited)The Company has recorded the difference between the aggregate amount of loan and related accrued interest expense, which have been compromised under the Restructuring Agreements, as revenue in the statement of income in full on the signing date of the Restructuring Agreement.

F. Gain (loss) on Purchase of Debt and Right. (Eastern Industrial Estate Company Limited)The Company has recorded the difference between the expected receivable and the price of purchase debt and right in full amount as loss from purchase of debt and right at the closing date and has recorded as profit once the repayment is settled.

G. Other incomes and expenses.Other incomes and expenses are recognized on the accrual basis.

Accounts in Foreign CurrencyA. The financial statements of our overseas subsidiary company are translated into Baht for consolidation

purposes using rates of exchange as follows:- Assets and liabilities are translated at the average selling and purchasing price of exchange rate at the end

of the year.- Revenues and expenses are translated at the average selling and purchasing price of exchange rate at the

end of the each month. - Share capital is translated at the exchange rate on the transaction date.

Adjustments from translation of foreign financial statements are included under shareholders equity.

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

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

the year.

Adjustments from translation are included in the statement of income.

C. Other foreign currency transactions occurring during the year are converted into Baht at the rates prevailing on the dates of the transactions. Assets and liabilities at the end of the year are converted into Baht at the rates of exchange on that date.

Gain and loss on exchange rate commission is included in the statement of income.

Corporate Income TaxCorporate income tax for each year is recognised on the accrual basis, which is based on the taxable profit for the year.

Earning per Share Basic earning per share is computed by dividing net income attributable to ordinary shareholders for the year by the weighted average number of ordinary shares outstanding during the year.


Diluted earning per share is computed by dividing net income attributable to ordinary shareholders for the year, as adjusted for the effect of dilutive ordinary shares, by the weighted average number of ordinary shares outstanding during the year plus the number of dilutive ordinary shares.

4. TRANSACTIONS WITH RELATED PARTIES

The Company has certain transactions with its related parties. Intercompany terms are determined at the rate not exceeding 5% - 10% of contracted price for commission on sales of land, not exceeding 5% management fees of service income received, and 4.5% - 10% as the reasonable market rate at that time for interest on loans from/to related parties relating to business operation.

Enterprises that directly or indirectly through one or more intermediaries, control, or are under common control with the Company by through same shareholder and management or director as at December 31 are as follows:

COMPANY NAME TYPE OF BUSINESS RELATIONSHIPPERCENTAGE OF

HOLDING2004 2003

Subsidiary CompaniesEastern Industrial Estate Company Limited Real Estate Development Common shareholders

and management99.99 99.99

Eastern Seaboard Industrial Estate(Rayong) Company Limited

Real Estate Development ,, 60.00 60.00

Hemaraj Eastern Seaboard Industrial Estate Co., Ltd. Real Estate Development ,, 99.99 -

Eastern Pipeline Services Company Limited* Pipe Rack Rental ,, 99.99 99.99

H-International (BVI) Company Limited Holding Company ,, 100.00 100.00

Hemaraj International Limited Holding Company ,, 99.99 99.99


Design and ConstructionSupervision Service

,, 99.99 99.99

The Park Residence Company Limited Real Estate Development andService Management

,, 99.99 99.99

Associated CompanyElyo-H Facilities Management Limited Facilities Management Service Common shareholders

and management39.99 39.99

Related CompaniesSriracha Harbour Public Company Limited Port Service Common shareholders

and/or co-directors9.54 9.54

Nakornthai Strip Mill Public Company Limited Steel Manufacturer and Distributor ,, 0.17 1.39

Sun Tech Group Public Company Limited Agriculture and Scrap Steel Business ,, - -

N.T.S. Steel Group Public Company Limited Steel Manufacturer and Distributor Common directors - -

Eastern Fluid Transport Company Limited Pipe Rack Maintenance ,, 15.00 15.00

Siam Food Products Public Company Limited Processing Agriculture Producer Co-investors - -

Teo Hong Silom Company Limited Facilities Management Service ,, - -

Elyo South East Asia PTE. LTD. Facilities Management Service ,, - -

Related Person - Directors and shareholders - -

* 74.99% directly held by the Company and 25% indirectly held by Eastern Industrial Estate Company Limited

Transactions with related parties (continued)

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

THOUSAND BAHTINTERCOMPANY

TERMSCONSOLIDATED THE COMPANY

ONLY2004 2003 2004 2003

Short - term loans to related parties and interest receivable:Subsidiary companies : Eastern Industrial Estate Company Limited - - 395,349 334,535 MLR(KBANK) +1% Eastern Seaboard Industrial Estate (Rayong) Company Limited

- - 196,664 155,594 5% - 10% of contractprice and 5% of

service income receivedand 4.5%

Eastern Pipeline Services Company Limited - - 71,081 54,130 MLR(KBANK) +1% H-Construction and Engineering Company Limited - - 1,393 558 MLR(KBANK) +1% The Park Residence Company Limited - - - 6 -

Associated company : Elyo-H Facilities Management Company Limited 2,179 2,175 2,179 2,175 MLR(BBL) Related company :Sriracha Harbour Public Company Limited * 11,355 11,355 11,355 11,355 Total 13,534 13,530 678,021 558,353 Less : Allowance for doubtful debts (11,355) (11,355) (11,355) (11,355) Net 2,179 2,175 666,666 546,998

Balance of Assets with related parties and its movement for the year 2004 are as follows:THOUSAND BAHT

BEGINNING INCREASE DECREASE ENDINGConsolidatedShort - term loans to related parties:

Associated company 2,175 122 (118) 2,179Total Short - Term Loans to Related Parties 2,175 122 (118) 2,179

The Company OnlyShort - term loans to related parties:

Subsidiary companies 544,823 138,156 (18,492) 664,487Associated company 2,175 122 (118) 2,179

Total Short – Term Loans to Related Parties 546,998 138,278 (18,610) 666,666

* The Company provided the provision for doubtful debt in full amount as the Company s basis. This company entered into the Business Reorganization Plan under the Bankruptcy Court, and now are under the process of the Business Reorganization Plan. The Company has not yet adjusted the provision for the receivable under the Business Reorganization Plan and will adjust accordingly when obtaining the settlement from it as the Plan.


LiabilitiesTHOUSAND BAHT

INTERCOMPANY TERMSCONSOLIDATED THE COMPANY ONLY

2004 2003 2004 2003

Short - term loans from related parties:

Subsidiary company :

Eastern Seaboard Industrial Estate (Rayong) Company Limited

- - 24,462 39,844-

Related company :

Siam Food Products Public Company Limited 40,039 60,577 - - 4.5%

Total 40,039 60,577 24,462 39,844

Long - term loans from related party:

Subsidiary company :

H-International (BVI) Company Limited - - 1,153,469 1,449,723 -

Long - term loans from related person: MLR (KBANK) +1%

Current portion of long-term loans 49,321 106,067 - - and MLR (KBANK)

Long-term loans 31,144 80,446 - -

Total 80,465 186,513 - -

Balance of Liabilities with related parties and its movement for the year 2004 are as follows:THOUSAND BAHT

BEGINNING INCREASE DECREASE ENDING

Consolidated


Related company 60,577 42,471 (63,009) 40,039

Loans from related person: 186,513 - (106,048) 80,465

The Company Only


Subsidiary company 39,844 38,648 (54,030) 24,462

Long - term loans from related party:

Subsidiary company 1,449,723 1,327 (297,581) 1,153,469

The significant transactions with related parties for the years ended December 31, are as follows:MILLION BAHT

INTERCOMPANYCOST POLICYCONSOLIDATED THE COMPANY ONLY

2004 2003 2004 2003

Service income 19.54 8.93 18.57 7.94 Market price

Interest income 0.50 0.17 29.13 32.32 MLR (KBANK) + 1%,4.5% and MLR(BBL)

Commission and management income - - 52.77 73.80 5% - 10% of contract price and5% of service income received

Other income - 0.07 - - Market price

Cost of service 7.88 7.32 1.62 1.30 Market price

Selling and administrative expenses 0.12 0.07 - - Market price

Interest expenses 2.51 1.63 - - 4.5% and 6.5%

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Other long-term investments - related parties, netTHOUSAND BAHT

CONSOLIDATED THE COMPANY ONLY2004 2003 2004 2003

Investments in related partiesSriracha Harbour Public Company Limited 75,300 75,300 75,300 75,300Eastern Fluid Transport Company Limited 1,500 1,500 - -

Total 76,800 76,800 75,300 75,300Less Provision for impairment loss on investments (75,300) (54,105) (75,300) (54,105)

Other Long-term Investments - Related Parties, net 1,500 22,695 - 21,195

Hemaraj Land and Development Public Company LimitedDuring the year 2003, Eastern Pipeline Services Company Limited has decreased its authorized ordinary shares from 150,000 shares to 37,500 shares. However, it did not affect the Companyʼs shareholding proportion in Eastern Pipeline Services Company Limited both directly and indirectly.

On November 5, 2004, the Company has entered a share purchase contract to acquire entire shares of Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd. at the purchasing amount of Baht 688.48 million.

5. CASH AND CASH EQUIVALENTSFor the purpose of preparation of the statements of cash flows in accordance with the relevant Thai Accounting Standard, as of December 31, cash and cash equivalents consisted of:

THOUSAND BAHTCONSOLIDATED THE COMPANY ONLY

2004 2003 2004 2003Cash and deposits at financial institutions 572,723 841,663 307,334 207,506Temporary investments

- Time deposits 30,326 13,510 22,968 1- Promissory notes - financial institutions 400,000 250,000 400,000 250,000

Less Cash at banks pledged as collateral and depositswith maturity dates longer than 3 months (30,314) (13,498) (22,968) -

Cash and Cash Equivalents 972,735 1,091,675 707,334 457,507

6. CURRENT INVESTMENTSAs at December 31, current investments consisted of:

THOUSAND BAHTCONSOLIDATED THE COMPANY ONLY

2004 2003 2004 2003Time deposits 30,326 13,510 22,968 1Promissory notes - financial institutions 400,000 250,000 400,000 250,000Marketable securities

Available-for-sale securities - Equity securities- Nakornthai Strip Mill Public Company 85,150 85,150 85,150 85,150- Other companies and unit trusts 64,525 51,613 64,525 51,613

Total Marketable securities 149,675 136,763 149,675 136,763Add(Less) Allowance for investments revaluation (17,681) 57,822 (17,681) 57,822Marketable securities, net 131,994 194,585 131,994 194,585

Total Current Investments 562,320 458,095 554,962 444,586

In 2003, the Company has subscribed 45 millon units of warrants of Nakornthai Strip Mill Public Company Limited. The rights were issued to the existing shareholders with the offering price of Baht 0.05 per share. Since November 2003, Nakornthai Strip Mill Public Company Limitedʼs securities has started for retrading in the Stock Exchange of Thailand.


7. TRADE ACCOUNT RECEIVABLES, NET

As of December 31, trade account receivables - other parties, net consisted of:THOUSAND BAHT


2004 2003 2004 2003

Related partiesService receivables

Accrued service income 20,335 22,130 20,335 22,130

Less Allowance for doubtful accounts (20,335) (22,130) (20,335) (22,130)

Trade Account Receivables - Related Parties, net - - - -

Other partiesLand sale contracts receivable

Land sale contracts 900,407 412,404 - 22,972

Less Installments received (302,658) (132,635) - (17,378)

Installments receivable 597,749 279,769 - 5,594

Less Deferred income (86,590) (72,090) - -

Land Sale Contracts Receivable, net 511,159 207,679 - 5,594

Service receivablesAccrued service income 51,325 46,423 9,219 8,710

Less Allowance for doubtful accounts (10,928) (15,548) (427) (3,513)

Service Receivables, net 40,397 30,875 8,792 5,197

Trade Account Receivables- Other Parties, net 551,556 238,554 8,792 10,791

For the related party receivables, the Company provided the provision for doubtful debt in full amount as the Companyʼs basis. These companies entered into the Business Reorganization Plan under the Bankruptcy Court, and now are under the process of the Business Reorganization Plan. The Company has not yet adjusted the provision for these receivables under the Business Reorganization Plan and will adjust accordingly when obtaining the settlement from them as the Plan.

As of December 31, the land sale contracts receivable and accrued service income classified by aging are as follows:THOUSAND BAHT


Land sale contracts receivableUndue installments 511,159 207,679 - 5,594Less than 3 months - - - -Over 3 months to 12 months - - - -Over 12 months - - - -Installments paid on date of transfer of title deed - - - -Less Deferred income - - - -

Total land sale contracts receivable 511,159 207,679 - 5,594

Accrued service incomeLess than 3 months 40,397 30,875 8,792 5,197Over 3 months to 6 months 12 1,049 - 23Over 6 months to 12 months 60 1,837 37 414Over 12 months 10,856 12,662 390 3,076

51,325 46,423 9,219 8,710Less Allowance for doubtful debts (10,928) (15,548) (427) (3,513)

Accrued service income, net 40,397 30,875 8,792 5,197

8. COST OF REAL ESTATE DEVELOPMENTS, NET

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

THOUSAND BAHT


Land cost - under development 5,251,500 3,924,139 1,335,061 1,283,592

Development project costs 6,617,363 5,380,693 1,370,956 961,405

Interest capitalised 1,980,703 1,805,734 639,599 634,971

Additional utility cost 7,402 7,275 7,248 7,115

Advance for construction costs 52,478 6,377 44,845 -

13,909,446 11,124,218 3,397,709 2,887,083

Less Accumulated costs transferred to cost of land sales (8,380,780) (7,404,816) (2,044,638) (1,912,455)

Accumulated costs transferred to Assets for rent (727,417) (479,873) - -

Accumulated costs transferred for Debt settlement (143,838) (143,838) (143,838) (143,838)

4,657,411 3,095,691 1,209,233 830,790

Less Allowance for decline in value - (38,480) - (38,480)

Cost of Real Estate Developments, net 4,657,411 3,057,211 1,209,233 792,310

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

Valuation Stated in the Financial StatementsCost of real estate developments is stated at the lower of aggregate cost and net realisable value for the projects in the same area of each company. During the year 2004, the Company and the 3 subsidiaries had obtained appraisal reports by an independent appraisal company. Surplus from assets appraisal were recorded as adjustment of loss on decline in value of real estate development cost in amount of Baht 38.48 million, as in the year of 2000, the Companyʼs and its subsidiaries cost of real estate development were appraised and deficit from appraisal was recorded as loss on decline in value of real estate development cost.

Obligation of Assets as at December 31, 2004Portion of land in the projects of the Company and its subsidiaries has been mortgaged as collateral for loans from local financial institutions and related person.

Capitalisation of Borrowing CostsConsolidatedFor the years ended December 31, 2004 and 2003, interest expenses are capitalised to the cost of real estate developments in the approximate amounts of Baht 20.89 million and Baht 29.41 million, respectively.

The Company OnlyFor the years ended December 2004, interest expenses are capitalized to cost of condominium in the approximate amount of Baht 0.13 million.

9. OTHER LONG-TERM INVESTMENTS

THOUSAND BAHT


2004 2003 2004 2003

Glow IPP Company Limited (Formerly : Bowin Power Company Limited) 175,000 175,000 175,000 175,000

Glow Company Limited - 50,059 - 50,059

Other company 1,000 1,000 - -

Total 176,000 226,059 175,000 225,059

Hemaraj Land and Development Public Company LimitedIn the year of 2003, Glow Company Limited had proceeded to increase its registered capital by proposing to sell new shares to all existing shareholders in the same proportion they held. In this regard, the Company waived the rights to subscribe Glow’s new shares. As a result, the Company’s shareholding proportion in Glow remains 4.55%. Subsequently, during the year of 2003, the Company had exercised the put option to sell a part of the shares. Finally, in the year of 2004, the Company sold the remaining shares of Glow to Tractebel S.A.

10. P

RO

PER

TY, P

LAN

T A

ND

EQ

UIP

MEN

T, N

ET

As a

t Dec

embe

r 31,

200

4 an

d 20

03, p

rope

rty, p

lant

and

equ

ipm

ent,

net c

onsi

sted

of:

Cha

nges

in C

ost

Cha

nges

in A

ccum

ulat

ed D

epre

ciat

ion

Net

Boo

k Va

lue

Begi

nnin

gA

dditi

onSa

leTr

ansf

erEn

ding

Begi

nnin

gD

epre

ciat

ion

Sale

Tran

sfer

Endi

ngBe

ginn

ing

Endi

ng

Con

solid

ated

Land

17.2

8-

--

17.2

8-

--

--

17.2

817

.28

Bui

ldin

g an

d st

ruct

ure

204.

38-

--

204.

3858

.03

7.49

--

65.5

214

6.35

138.

86B

uild

ing

impr

ovem

ents

4.67

2.73

--

7.40

2.79

0.72

--

3.51

1.88

3.89

Offi

ce e

quip

men

t and

furn

iture

and

fix

ture

74.2

810

.53

--

84.8

159

.44

8.67

--

68.1

114

.84

16.7

0

Vehi

cles

47.3

86.

55-

-53

.93

21.4

28.

67-

-30

.09

25.9

623

.84

Con

stru

ctio

n in

pro

gres

s10

.62

0.05

--

10.6

7-

--

--

10.6

210

.67

Raw

wat

er p

ipe

3.

66

- -

-3.

66

1.3

6

0.2

5-

-

1.61

2.

30

2.05

Tota

l36

2.27

19.8

6-

-38

2.13

143.

0425

.80

--

168.

8421

9.23

213.

29Le

ss A

llow

ance

for i

mpa

irmen

t los

s (1

0.17

)(1

0.17

)Le

ss R

eser

ve fo

r pos

sibl

e lo

ss o

f titl

e of

land

and

offi

ce b

uild

ing

(36.

96)

(36.

96)

Pr

oper

ty, P

lant

and

Equ

ipm

ent,

net

172.

1016

6.16

The

Com

pany

Onl

y

Land

2.93

--

-2.

93-

--

--

2.93

2.93

Bui

ldin

g an

d st

ruct

ure

45.3

5-

--

45.3

511

.32

0.28

--

11.6

034

.03

33.7

5B

uild

ing

impr

ovem

ents

1.42

1.80

--

3.22

1.42

--

-1.

42-

1.80

Offi

ce e

quip

men

t and

furn

iture

and

fix

ture

42.5

3 5

.96

--

48.4

936

.12

5.09

--

39.2

76.

419.

22

Vehi

cles

29.9

5 4

.12

--

34.0

712

.24

5.74

--

17.9

817

.71

16.0

9C

onst

ruct

ion

in p

rogr

ess

0.86

0.05

--

0.91

--

--

-0.

860.

91R

aw w

ater

pip

e

3.6

5

--

-3.

65 1

.36

0.2

5-

-

-

2.

292.

04To

tal

126

.69

11

.93

--

138.

6262

.46

9.42

--

71.8

864

.23

66.7

4Le

ss A

llow

ance

for i

mpa

irmen

t los

s (0

.72)

(0.7

2)Le

ss R

eser

ve fo

r pos

sibl

e lo

ss o

f titl

e

of la

nd a

nd o

ffice

bui

ldin

g(3

6.96

)(3

6.96

)

Prop

erty

, Pla

nt a

nd E

quip

men

t, ne

t 2

6.55

29.

06

ConsolidatedFor the year ended December 31, 2004, depreciation of building and equipment are included in selling and administrative expenses and cost of services in the amounts of Baht 16.08 million and Baht 9.72million, respectively.

As at December 31, 2004 and 2003, the property, plant and equipment of the Company and its subsidiaries have been fully depreciated but are still in use. The original cost, before deducting accumulated depreciation, of those assets were in amount of Baht 57.13 million and 47.13 million, respectively.

The Company OnlyFor the year ended December 31, 2004, depreciation of building and equipment are included in selling and administrative expenses and cost of services in the amounts of Baht 10.51million and Baht 0.84 million, respectively.

As at December 31,2004 and 2003, the property, plant and equipment of the Company have been fully depreciated but are still in use, The original cost, before deducting accumulated depreciation, of those assets were in amount of Baht 10.28 million and 6.61 million, respectively.

Hemaraj Land and Development Public Company LimitedAs at December 31, 2004 and 2003, the Company has provided reserve for loss of the possessive right over the land and office building in the same amount of Baht 36.96 million as the management of the Company viewed that the Company might not receive transfer of such possessive right.

Property, plant and equipment, net (Continued)

11. A

SSET

S FO

R R

ENT,

NET

As a

t Dec

embe

r 31,

200

4 an

d 20

03, a

sset

s for

rent

, net

con

sist

ed o

f:

(Am

ount

s:M

illio

n Ba

ht)

Cha

nges

in C

ost

Cha

nges

in A

ccum

ulat

ed D

epre

ciat

ion

Net

Boo

k Va

lue

Begi

nnin

gA

dditi

onSa

le/W

ritte

n of

fTr

ansf

erEn

ding

Begi

nnin

gD

epre

ciat

ion

Sale

/Wri

tten

off

Tran

sfer

Endi

ngBe

ginn

ing

Endi

ng

Con

solid

ated

Lan

d10

9.15

*44

.79

--

153.

94 *

--

--

-10

9.15

153.

94

Bui

ldin

g41

3.05

*20

2.77

--

615.

82 *

41.4

818

.61

--

60.0

937

1.57

555.

73

Pipe

rac

k11

6.51

10.9

5-

-12

7.46

43.9

48.

38-

-52

.32

72.5

775

.14

Con

stru

ctio

n in

pro

gres

s

7.0

8

5.

24-

-12

.32

-

-

--

-

7.

0812

.32

Tota

l64

5.79

263.

75-

-90

9.54

85.4

226

.99

--

112.

4156

0.37

797.

13

The

Com

pany

Onl

y

Lan

d28

.06

--

-28

.06

--

--

-28

.06

28.0

6

Bui

ldin

g

26.2

4-

--

26.2

45.

41(2

.88)

--

2.53

20.8

3 23

.71

Tota

l 5

4.30

--

-54

.30

5.41

(2.8

8)-

-2.

5348

.89

51.7

7

Con

solid

ated

- As a

t Dec

embe

r 31,

200

4 an

d 20

03, p

ortio

ns o

f lan

d an

d bu

ildin

g fo

r ren

t, w

hich

hav

e bee

n tra

nsfe

rred

from

the c

ost o

f rea

l est

ate d

evel

opm

ents

, w

ere

in th

e ac

cum

ulat

ed a

mou

nts o

f Bah

t 247

.54*

mill

ion

and

Bah

t 136

.02*

mill

ion,

resp

ectiv

ely.

- Dep

reci

atio

n of

bui

ldin

g an

d pi

pe ra

ck fo

r the

yea

r end

ed D

ecem

ber 3

1, 2

004

is in

clud

ed in

cos

t of s

ervi

ces.

The

Com

pany

Onl

y- D

epre

ciat

ion

of b

uild

ing

for t

he y

ear e

nded

Dec

embe

r 31,

200

4 is

tota

lly in

clud

ed in

cos

t of s

ervi

ces.

12. LEASEHOLD LAND AND LAND HELD FOR COMMERCIAL PURPOSES, NET

As at December 31, leasehold land and land held for commercial purposes, net consisted of:

THOUSAND BAHT


2004 2003 2004 2003

Land bank 10,201 10,201 10,201 10,201

Land cost of projects suspended from development 1,135,711 1,135,711 1,135,711 1,135,711

Suspended development project costs 268,034 266,909 268,034 266,909

Interest capitalized 556,119 556,119 556,119 556,119

Leasehold land 77,077 77,077 77,077 77,077

2,047,142 2,046,017 2,047,142 2,046,017

Less Accumulated costs transferred for debt settlement (645,413) (645,413) (645,413) (645,413)

Accumulated cost transferred to cost of sales (841,514) - (841,514) -

Allowance for decline in value (279,151) (315,322) (279,151) (315,322)

Leasehold Land and Land Held for Commercial Purposes, net 281,064 1,085,282 281,064 1,085,282

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

Valuation Stated in the Financial Statements Leasehold land and land held for commercial purposes are stated at the lower of aggregate cost and net realisable value. During the year 2004, the Company and the subsidiary had obtained appraisal reports by an independent appraisal company. Surplus from assets appraisal were recorded as adjustment of loss on decline in value of real estate development cost in amount of Baht 36.17 million, as in the year of 2000, the Companyʼs and its subsidiaryʼs leasehold land and land held for commercial purposes were appraised and deficit from appraisal was recorded as loss on decline in value of real estate development cost

Obligation of Assets as at December 31, 2004Portion of land in the projects of the Company and the subsidiary has been mortgaged as collateral for loans from local financial institutions.

13. SINKING FUND, NET

The Company and its subsidiaries had entered into the joint operating agreements with the Industrial Estate Authority of Thailand (“IEAT”) (as disclosed in the Note 28 to the financial statements). The Company and its subsidiaries are committed to be a provider and to set up a fund (“Sinking Fund”) for the major maintenance and replacement of utilities systems and facilities for the customers in the industrial estate. The Company and its subsidiaries had made the payment by cash and by transferring of partial piece of land for the Sinking Fund, and in addition, the Company and its subsidiaries had transferred the withdrawal rights over the Sinking fund to the IEAT per the terms and conditions of such agreements. The Company and its subsidiaries has recorded the cash paid and land transferred to IEAT for Sinking Fund to Sinking Fund. The amortization period of 20 years is applied on the useful future economic life of Sinking Fund under the joint contract agreements with IEAT. The Company and its subsidiaries has recorded the interest income from the said Sinking Fund to the other assets because the Company and its subsidiaries has the right to withdraw these interest income for the major maintenance and replacement of the utilities systems and facilities.

On June 22, 2004, the Notification of IEATʼs Board of Directors No.1/2547 has amended the joint operating agreement conditions to cap the Sinking Fund amount not exceeding Baht 60 million. Later on August 27, 2004, the IEATʼs Board of Directors resolved that it would allow the Company and its subsidiaries to combine two joint operating agreements to one agreement. A subsidiary of the Company had provided the amendment of mentioned agreement with IEAT. As the result of the amendment, the Sinking Fund had decreased in amount of Baht 113.51 million during the third quarter of 2004. The Company and another subsidiary are currently in the process of the agreement amendment with IEAT.

As at December 31, sinking fund, net consisted of :

THOUSAND BAHT


2004 2003 2004 2003

Sinking Fund 273,231 380,911 151,955 151,848

Less Interest Income - (44) - -

Sinking Fund balance 273,231 380,867 151,955 151,848

Less Accumulated amortization (75,394) (58,154) (22,053) (14,457)

Sinking Fund, net 197,837 322,713 129,902 137,391

14. CONVERTIBLE BONDS

Hemaraj Land and Development Public Company Limited issued the US$ 60 million convertible bonds, divided into 60,000 unit convertible bonds of US$ 1,000 per unit, which bear interest at the rate of 3.5 percent per annum on September 9, 1993 by proposing to sell all the convertible bonds for foreign investor and the bonds would be redeemed on September 9, 2003

The Company has repurchased convertible bonds processed the cancellation by the trustee as stipulated by the Prospectus. During the year of 2004, the Company has repurchased convertible bonds processed the cancellation for the all last portion. The Company does not have any convertible bonds outstanding.

15. LONG-TERM LOANS TO RELATED PARTIES

As of December 31,2004 and 2003, Hemaraj Land and Development Public Company Limited has made loan agreement with an overseas subsidiary company, H-International Company Limited, in the amount of Baht 1,153.47 million and Baht 1,449.72 million, respectively, which does not have the maturity date and interest charge.

Sinking fund, net (Continued)

16. L

ON

G-T

ERM

LO

AN

S FR

OM

REL

ATED

PER

SON

East

ern

Seab

oard

Indu

stri

al E

stat

e (R

ayon

g) C

ompa

ny L

imite

dA

s at D

ecem

ber 3

1, lo

ng-te

rm lo

ans f

rom

rela

ted

pers

on c

onsi

sted

of:

Cre

dit

Line

(Mill

ion

Baht

)

Cre

dit

Peri

od

Con

ditio

nsIn

tere

st P

aym

ent

Bala

nces

Term

Tota

l In

stal

lmen

tsPr

inci

pal R

epay

men

tPe

riod

Rat

e(M

illio

n Ba

ht)

a. L

oan

from

dire

ctor

2004

2003

- Pro

mis

sory

not

e of

with

gra

ce p

erio

d of

1 y

ear

80.0

0N

ovem

ber

2000

to

A

pril

2005

Qua

rterly

4To

tal o

f the

firs

t 3 p

erio

ds, w

hich

app

roxi

mat

es

25%

of p

rinci

pal o

f eac

h pr

omis

sory

not

e fo

r Bah

t 80

mill

ion

loan

will

, afte

r gra

ce p

erio

d, b

e re

paid

eq

ually

, and

the

rem

aini

ng w

ill b

e re

paid

in th

e la

st

perio

d.

Mon

thly

MLR

+1%

of

K

BA

NK

4.00

25.3

3

10.0

0A

ugus

t 200

2 to

Aug

ust 2

007

Mon

thly

1248

mon

ths e

qual

inst

allm

ents

be

repa

id fo

r Bah

t 10

mill

ion

loan

, afte

r gra

ce p

erio

d.M

onth

ly”

6.67

9.17

- Und

er th

e ag

reem

ent d

ated

Jan

uary

30,

200

325

.00

Mar

ch 2

003

toD

ecem

ber 2

007

Qua

rterly

45

year

s equ

al in

stal

lmen

ts b

e re

paid

or b

e fu

lly

repa

id a

fter t

he se

cond

yea

r, w

hen

the

lend

er c

all.

Mon

thly

MLR

of

KB

AN

K15

.00

20.0

0

b. L

oan

from

3 s

hare

hold

ers

- Pro

mis

sory

not

e of

with

gra

ce p

erio

d of

1 y

ear

- Und

er t

he a

gree

men

t dat

ed O

ctob

er 3

1, 2

000

165.

00N

ovem

ber

2000

to

Aug

ust 2

005

Qua

rterly

4To

tal o

f the

firs

t 3 p

erio

ds, w

hich

app

roxi

mat

es

25%

of p

rinci

pal o

f eac

h pr

omis

sory

not

e w

ill, a

fter

grac

e pe

riod,

be

repa

id e

qual

ly fo

r eac

h pe

riod

and

the

rem

aini

ng w

ill b

e re

paid

in th

e la

st p

erio

d.

Mon

thly

MLR

+1%

of

K

BA

NK

22.4

377

.42

- Und

er t

he a

gree

men

t dat

ed

Oct

ober

31,

200

0 an

d Ju

ly 2

4, 2

002

20.0

010

.00

May

200

0 to

July

200

7

Qua

rterly

Mon

thly

4 12To

tal o

f the

firs

t 3 p

erio

ds, w

hich

app

roxi

mat

es

25%

of p

rinci

pal o

f eac

h pr

omis

sory

not

e fo

r Bah

t 20

mill

ion

loan

will

, afte

r gra

ce p

erio

d be

repa

id

equa

lly, a

nd th

e re

mai

ning

will

be

repa

id in

the

last

per

iod

and

48

mon

ths e

qual

inst

allm

ents

be

repa

id fo

r Bah

t 10

mill

ion

loan

, afte

r gra

ce p

erio

d.

Mon

thly

MLR

+1%

of

K

BA

NK

2.66

6.

679.

33

9.17

- Und

er t

he a

gree

men

t dat

ed M

ay 2

, 200

120

.00

M

ay 2

001

to

July

200

5

Qua

rterly

4To

tal o

f the

firs

t 3 p

erio

ds, w

hich

app

roxi

mat

es

25%

of p

rinci

pal o

f eac

h pr

omis

sory

not

e w

ill, a

fter

grac

e pe

riod,

be

repa

id e

qual

ly, a

nd th

e re

mai

ning

w

ill b

e re

paid

in th

e la

st p

erio

d.

Mon

thly

MLR

+1%

of

K

BA

NK

3.83

10.5

0

- Und

er t

he a

gree

men

t dat

ed J

anua

ry 3

0, 2

003

32.0

0M

arch

200

3 to

Sept

embe

r 20

07

Qua

rterly

45

year

s equ

al in

stal

lmen

ts b

e re

paid

or b

e fu

lly

repa

id a

fter t

he se

cond

yea

r, w

hen

the

lend

er c

all.

Mon

thly

MLR

of

KB

AN

K19

.20

25.6

0

Tota

l Loa

ns fr

om R

elat

ed P

erso

n36

2.00

80.4

618

6.52

Less

Cur

rent

por

tion

of lo

ng-te

rm lo

an sh

own

unde

r cur

rent

liab

ilitie

s

(49.

32)

(106

.07)

Long

-term

Loa

ns fr

om R

elat

ed P

erso

n, n

et31

.14

80.4

5

The

said

subs

idia

ry c

ompa

ny o

btai

ned

loan

s fro

m it

s rel

ated

per

son

for fi

nanc

ing

the

cons

truct

ion

of m

ini p

re-f

abric

ated

fact

orie

s and

mic

ro p

re-

fabr

icat

ed fa

ctor

ies f

or sa

le a

nd re

nt.

Porti

on o

f its

land

and

fact

orie

s has

bee

n m

ortg

aged

as c

olla

tera

l for

such

loan

s.

17. O

THER

LO

NG

-TER

M L

OA

NS

As

at D

ecem

ber

31, o

ther

long

-ter

m lo

ans

cons

iste

d of

:

(Am

ount

s:M

illio

n Ba

ht)

Cur

rent

Rep

aym

ent C

ondi

tion

Bala

nces

Cre

dit L

ine

(Mill

ion

Baht

)

Cre

dit

Peri

od

Prin

cipa

l Rep

aym

ent

Inte

rest

Pay

men

tC

onso

lidat

edTh

e C

ompa

ny

Inst

allm

ent

Am

ount

(Mill

ion

Baht

)Te

rmTo

tal

Inst

allm

ents

Term

Rat

e(%

)20

0420

0320

0420

03

Hem

araj

Lan

d an

d D

evel

opm

ent P

ublic

Com

pany

Lim

ited

Loa

ns f

rom

2 lo

cal c

omm

erci

al b

anks

and

3 lo

cal

finan

cial

inst

itutio

ns

1) L

oan

in th

e am

ount

of

Bah

t 110

mill

ion.

Subs

eque

ntly

, deb

t cla

im r

ight

of

lend

er h

ad b

een

tran

sfer

red

to a

mut

ual f

und,

whi

ch th

e C

ompa

ny h

ad

ente

red

into

a D

ebt C

ompr

omis

ing

Agr

eem

ent,

date

d Se

ptem

ber

5, 2

002

unde

r cu

rren

t rep

aym

ent c

ondi

tions

.

130.

82

Sep

tem

ber

20

02

toM

arch

200

4

7.27

Com

men

cing

inSe

ptem

ber

2002

Mon

thly

18-

--

14.5

4-

14.5

4

2) L

oan

with

cre

dit l

ine

of B

aht 5

8 m

illio

n fo

r pr

e-fa

bric

ated

fac

tori

es r

epay

men

t.

58.

00Ja

nuar

y 20

03to

Janu

ary

2010

0.60

- 0

.90

Com

men

cing

inA

ugus

t 200

3M

onth

ly78

Mon

thly

M

RR

+

3.25

%-

47.4

7-

47.4

7

3) L

oan

with

cre

dit l

ine

of B

aht 1

,800

mill

ion

for

co

ndom

iniu

m p

roje

ct 1

,800

.00

June

200

4to

Ju

ne 2

008

Rep

aym

ent o

n m

ortg

age

rele

ase

date

at 6

0 %

of

cond

omin

ium

’s c

ontr

act

pric

e

Mon

thly

3.85

% o

n 1st

yea

rM

LR

– 1

.75%

On

2nd –

3rd y

ear

ML

R –

1.5

%on

4th y

ear

11

.40

-11

.40

-

Tota

l

1,98

8.82

11.4

062

.01

11.4

062

.01

Eas

tern

Ind

ustr

ial E

stat

e C

ompa

ny L

imite

d

1) L

oan

with

cre

dit l

ine

of 7

20 m

illio

n, f

ully

rep

ay w

ithin

5

year

s an

d 3

mon

ths

from

the

sign

agr

eem

ent d

ate

720.

00O

ctob

er 2

003

toJa

nuar

y 20

09

Und

er g

race

per

iod

for

18 m

onth

s,In

200

5, e

ach

not l

ess

than

Bah

t 15

mill

ion.

In 2

006,

eac

h no

t les

s th

an B

aht 3

0 m

illio

n.In

200

7, e

ach

not l

ess

than

Bah

t 45

mill

ion.

In 2

008,

eac

h no

t les

s th

an B

aht 5

0 m

illio

n.

Qua

rter

lyM

onth

ly

4.5%

on

1st

year

4.75

% o

n 2nd

ye

arPe

rson

al

fixed

Dep

osit

1 ye

ar r

ate

+ 3.

75%

1.00

320.

121.

00-

Tota

l72

0.00

1.00

320.

121.

00-

(Am

ount

s:M

illio

n Ba

ht)

Cur

rent

Rep

aym

ent C

ondi

tion

Bala

nces

Cre

dit L

ine

(Mill

ion

Baht

)C

redi

tPe

riod

Prin

cipa

l Rep

aym

ent

Inte

rest

Pay

men

tC

onso

lidat

edTh

e C

ompa

ny

Inst

allm

ent

Am

ount

(Mill

ion

Baht

)Te

rmTo

tal

Inst

allm

ents

Term

Rat

e(%

)20

0420

0320

0420

03

East

ern

Seab

oard

Indu

stria

l Est

ate

(Ray

ong)

Com

pany

Lim

ited

Loan

s fro

m lo

cal c

omm

erci

al b

anks

con

sist

ed o

f:

1) L

oan

in th

e am

ount

of B

aht 2

70 m

illio

n, re

paya

ble

w

ithin

7 y

ears

from

the

first

with

draw

al.

270.

00M

arch

200

2To

Mar

ch 2

009

Min

imum

Bah

t 3.7

5 m

illio

n pe

r m

onth

, Com

men

cing

fr

om th

e la

st w

orki

ng d

ay o

f th

e m

onth

13

and

30%

of

the

amou

nt th

at a

lrea

dy r

epai

d.

Mon

thly

ML

R,

ML

R-0

.5%

,O

nly

1st y

ear

-2.

90-

-

2) L

oan

in th

e am

ount

of B

aht 3

20 m

illio

n, re

paya

ble

w

ithin

4 y

ears

from

the

first

with

draw

al.

320.

00Fe

brua

ry 2

003

toFe

brua

ry 2

007

Min

imum

30%

of

the

repa

ymen

t am

ount

.W

hen

no m

ortg

age,

not

less

than

Bah

t 0.8

5 m

illio

n pe

r ra

i by

dedu

ctin

g fr

om th

e am

ount

that

alr

eady

re

paid

.

Mon

thly

ML

RM

LR

-0.5

%,

only

1st y

ear

113.

7310

6.61

--

3) L

oan

in th

e am

ount

of B

aht 3

00 m

illio

n, re

paya

ble

w

ithin

5 y

ears

from

the

first

with

draw

al.

300.

00D

ecem

ber

2003

toD

ecem

ber

2008

Rep

aym

ent o

n no

mor

tgag

e da

te, n

ot le

ss th

an B

aht

0.28

mill

ion

per

rai.

Mon

thly

ML

R-2

%,

on 1

st-3

rd y

ear.

on 4

th-5

th y

ear.

82.9

820

.00

-

4) L

oan

in th

e am

ount

of B

aht 3

25 m

illio

n, re

paya

ble

w

ithin

4 y

ears

from

the

first

with

draw

al.

325.

00D

ecem

ber

2004

toD

ecem

ber

2008

Rep

aym

ent o

n no

mor

tgag

e da

te, n

ot le

ss th

an B

aht

1.00

mill

ion

per

rai.

Mon

thly

ML

R-2

%,

on 1

st-2

nd y

ear.

ML

R-1

%,

on 3

rd y

ear.

124.

02-

--

Tota

l 1

,215

.00

320.

7312

9.51

--

Oth

er lo

ng-te

rm lo

ans (

cont

inue

d)

(Am

ount

s:M

illio

n Ba

ht)

Cur

rent

Rep

aym

ent C

ondi

tion

Bala

nces

Cre

dit

Line

(Mill

ion

Baht

)

Cre

dit

Peri

od

Prin

cipa

l Rep

aym

ent

Inte

rest

Pay

men

tC

onso

lidat

edTh

e C

ompa

ny

Inst

allm

ent

Am

ount

(Mill

ion

Baht

)Te

rmTo

tal

Inst

allm

ents

Term

Rat

e (%

)20

0420

0320

0420

03

Hem

araj

Eas

tern

Sea

boar

d In

dust

rial E

stat

e C

ompa

ny L

imite

d

1) L

oan

in th

e am

ount

of B

aht 8

00 m

illio

n 80

0.00

Nov

embe

r 20

04To

Nov

embe

r 201

1

Rep

aym

ent w

hen

able

to se

ll an

y pl

ot o

f la

nd a

t B

aht 0

.20

mill

ion

per r

ai o

r 10

inst

allm

ents

in e

ach

6 m

onth

s at B

aht 8

0 m

illio

n ea

ch, s

tarti

ng fr

om M

ay 2

007

Mon

thly

MLR

+1%

800.

00

-

-

-

Tota

l80

0.00

800.

00

-

-

-

Tota

l Oth

er L

oans

4,72

3.82

1,13

3.13

511

.64

11.4

062

.01

Less

Cur

rent

por

tions

of

othe

r lon

g-te

rm lo

ans s

how

n un

der

curr

ent l

iabi

litie

s

(

-

)(1

7.44

)(

-

)(1

4.54

)

Oth

er L

ong-

Term

Loa

ns

1,13

3.13

494.

2011

.40

47

.47

Oth

er lo

ng-te

rm lo

ans (

cont

inue

d)

18. PROVISIONS

As at December 31, provisions consisted of: MILLION BAHT

2004 2003

Maximum loss reserve that may arise from

20.1 Guarantee agreement in a related company 224.52 206.46

20.2 A pledge of securities on pledged agreements, against loans to a related company - 256.27

Total 224.52 462.73

In the first quarter of 2004, the Company entered into a debt compromising agreement in relation to security pledged agreements as disclosed in Note 24.

19. SHARE CAPITAL

19.1 The Board of Directors Meeting No.7/2003 held on September 15, 2003 approved the Company to allocate the 120,000,000 ordinary shares for offering via private placement in accordance with the Notification of the Securities and Exchange Commission No. Kor Jor. 12/2543 regarding request for permission and permission to offer newly issued shares at the offering price of Baht 8 per share. The allocation was approved by The Annual General Meeting of Shareholders of the Company of the year 2002 held on April 30, 2002.

19.2 The Extra-Ordinary Meeting of Shareholders of Hemaraj Land and Development Public Company Limited No. 1/2003 held on October 16, 2003, had passed the resolution to change the Companyʼs par value from Baht 10 each to 1 per share. As a result of this change, the Companyʼs authorised share capital of Baht 13,000,000, consisting of 13,000,000 ordinary shares of Baht 1 par value. The Company completed the registration on October 24, 2003.

20. WARRANTS

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

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

Subsequently, the Board of Directors Meeting No. 1/2002 held on February 20, 2002 approved the adjustment to the numbers of the existing warrants with the additional ratio of 2.33333 units per each 1 existing warrant, in accordance with announcement of the Office of the Securities and Exchange Commission regarding guidelines on the adjustment to the exercise price/exercise ratio of warrants. The warrants after the adjustment are 471,686,471 units with the exercise ratio of 1 ordinary share per each warrant and exercise price of Baht 3 per share.

The Board of Directors Meeting No. 7/2003 held on September 15, 2003 had passed the resolution in accordance with the provision for the adjustments of warrant exercise ratio as stipulated by the Prospectus that would be changed from 1:1 to be one warrant exercisable to 1.05918 ordinary shares. The Company shall not adjust the exercise price, however the Company shall bring forward the adjustment to be included in the following adjustment of rights. The above adjustments would take effect upon the first date of the ordinary shares offering.

Later, the Extra-Ordinary Meeting of Shareholders held on October 16, 2003 had passed the resolution of the adjustments of the Companyʼs par value, resulting in the exercise ratio changing from 1 : 1.05918 to be one warrant exercisable to 10.5918 ordinary shares at the exercise price of Baht 0.283 per share. According to the SECʼs Notification regarding guideline relating to adjustments of the exercise price/ratio of warrants, it permits the Company to adjust the number of warrants rather than to adjust the exercise ratio. Therefore, the Company chose to adjust the number of warrants which resulting that the number of warrants increased from 427,084,638 to 4,527,831,794. Consequently, the warrants have the same exercise ratio at one warrant exercisable to purchase one ordinary share at Baht 0.283 per share.

21. INCOME FROM INCRESE OF SALABLE AREA

In the second quarter of 2004, the Company has recorded income from the increase of approved salable area which was realized as revenue and cost in the past in amount of Baht 43.88 million. As the result of this change, the over cost realization in previous accounting period has been adjusted in present account period and the impact was presented in the statement of income

22. DIRECTORS REMUNERATION AND PERSONNEL EXPENSES

For the years ended December 31, directors remuneration which consisting of meeting fee and annual compensation are as follows:

MILLION BAHT

2004 2003

Hemaraj Land and Development Public Company Limited 15.01 9.80

Eastern Seaboard Industrial Estate (Rayong) Company Limited 10.07 6.39

Total 25.08 16.19

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

MILLION BAHT

2004 2003

Consolidated statements of income 136.26 120.50

The Companyʼs statements of income 83.77 66.75

Warrants (continued)

23. STATUTORY RESERVE AND DIVIDEND

Statutory ReserveUnder the Public Limited Company Act B.E. 2535, the Company is required to set aside as a statutory reserve at least 5% of its net profit after deducting accumulated deficit brought forward (if any) until the reserve reaches 10% of the registered share capital. The statutory reserve is not available for dividend distributions.

DividendThe Annual General Meeting of the shareholders of the Company of the year 2004 held on April 23, 2004 approved the distribution of dividends at the rate of Baht 0.03 per one ordinary share, amounting to Baht 172.92 million. The Board of Directors Meeting No. 5/2004 held on August 19, 2004 approved the distribution of interim dividends deriving from the operating results of the first half year 2004 at the rate of Baht 0.02 per one ordinary share, amounting to Baht of 115.28 million, totaling dividend amounting to Baht 288.20 million.

The Board of Directors Meeting No. 6/2003 held on August 26, 2003 approved the distribution of interim dividends deriving from the operating results of the first half year 2003 at the rate of Baht 0.25 per one ordinary share, amounting to Baht of 88.69 million.

24. EXTRAORDINARY ITEMS, NET

24.1 Gain from compromising debtIn the year of 2004, the Company entered into a debt compromising agreement with a creditor. As referred in the agreement, the principal shall be Baht 130.50 million to be paid equally in 18 monthly installments bearing interest at the rate of 3.5 percent per annum, from the seventh installment. The Company has recorded the gain from debt compromising of Baht 125.76 million.

24.2 Gain from convertible bond repurchasesIn the year of 2003, the Company and its oversea subsidiary had purchased 23,225 unit of the Companyʼs convertible bonds at a price of US$ 15.99 million and these purchased bonds have been cancelled, resulting in gain on bond repurchases in the amount of Baht 723.88 million.

In the year of 2004, the Company has repurchased its convertible bonds from the bondholders of 26 units, resulting in Baht 0.16 million gain from convertible bonds repurchase.

24.3 Gain on rights transferIn the year of 2003, the subsidiary company had entered into a Rights Transfer Agreement with a company, under the terms and conditions specified, in order to transfer the rights obtained from the 2 mutual funds. On the agreement date, the subsidiary company had partially received payment in the amount of Baht 80 million and the subsidiary company has recorded such amount of payment as gain on right transfer.

25. E

AR

NIN

GS

PER

SH

AR

E C

OM

PUTA

TIO

N

Ear

ning

s pe

r sh

are

com

puta

tion

in t

he c

onso

lidat

ed f

or t

he y

ears

end

ed D

ecem

ber

31, c

onsi

sted

of

:

20

0420

03Th

ousa

nd B

aht

Num

ber

Of S

hare

(T

hous

and

shar

e)

Baht

Thou

sand

Bah

tN

umbe

rO

f Sha

re

(Tho

usan

d sh

are)

Baht

Net

pro

fit fo

r th

e Yea

rEa

rnin

gs p

er

shar

eN

et p

rofit

for

the Y

ear

Earn

ings

per

sh

are

Basic

ear

ning

s per

shar

eN

et p

rofit

attr

ibut

able

to o

rdin

ary

Shar

ehol

ders

950,

643

5,68

6,04

60.

171,

383,

306

4,00

2,11

6 (A

)0.

35 (B

)

The

effe

ct o

f po

tent

ial o

rdin

ary

shar

es1.

Con

verti

ble

bond

s1.

1 A

ddin

g ba

ck th

e ex

pens

es th

at w

ill b

e sa

ved

on th

e co

nver

sion

of c

onve

rtibl

e bo

nds (

net o

f inc

ome

tax

25%

)-

--

9,28

9-

-1.

2 D

educ

ting

the

reve

nues

that

will

not

be

Rec

ogni

zed

upon

the

conv

ersi

on o

f C

onve

rtibl

e bo

nds (

net o

f inc

ome

tax

25%

)-

--

--

-1.

3 In

crea

se in

ord

inar

y sh

ares

und

er

Con

vers

ion

of c

onve

rtibl

e bo

nds (

C)

--

--

3-

2. W

arra

nts

Num

ber o

f sha

res t

hat w

ould

hav

e be

en is

sued

for n

o co

nsid

erat

ion

as th

e av

erag

e fa

ir Va

lue

of o

rdin

ary

shar

es e

xcee

ds th

e Ex

erci

se p

rice

-2,

812,

198

--

2,86

3,56

3-

Earn

ings

per

shar

e af

ter a

djus

tmen

t by

The

effe

ct o

f pot

entia

l ord

inar

y sh

ares

Net

pro

fit a

ttrib

utab

le to

ord

inar

y sh

areh

olde

rs

in c

ase

of c

onve

rtibl

e bo

nds b

eing

con

verte

d an

d al

l war

rant

s bei

ng e

xerc

ised

950,

643

8,49

8,24

40.

111,

392,

595

6,86

5,68

20.

20

(A) T

he w

eigh

ted

aver

age

num

ber o

f ord

inar

y sh

ares

out

stan

ding

dur

ing

the

year

as r

esta

ted

by th

e ad

just

men

t fac

tor f

rom

the

chan

ging

of t

he

Com

pany

ʼs p

ar v

alue

from

Bah

t 10

to 1

per

shar

e.(B

) Con

vers

ion

rate

may

be

chan

ged

as a

resu

lt of

the

issu

e of

war

rant

s and

the

ordi

nary

shar

es a

s dis

clos

ed in

Not

e 19

and

20

to th

e fin

anci

al

stat

emen

ts.

26. B

USI

NES

S S

EGM

ENT

INFO

RM

ATIO

N

As o

f D

ecem

ber 3

1, b

usin

ess s

egm

ent i

nfor

mat

ion

in th

e co

nsol

idat

ed b

alan

ce sh

eets

cla

ssifi

ed b

y do

mes

tic a

nd o

vers

eas b

usin

ess a

re a

s fo

llow

s:

MIL

LIO

N B

AH

T

2004

2003

Dom

estic

Ove

rsea

sD

omes

ticO

vers

eas

Indu

stri

al E

stat

eO

ther

sH

oldi

ng C

ompa

nyTo

tal

Indu

stri

al E

stat

eO

ther

sH

oldi

ng C

ompa

nyTo

tal

Cos

t of r

eal e

stat

e de

velo

pmen

ts, n

et4,

657.

41-

- 4

,657

.41

3,05

7.21

--

3,05

7.21

Leas

ehol

d la

nd a

nd la

nd h

eld

for

Com

mer

cial

pur

pose

s, ne

t28

1.06

--

281.

061,

085.

28-

-1,

085.

28

Ass

ets f

or re

nt, n

et70

9.68

87.4

6-

797.

1448

0.72

79.6

5-

560.

37

Prop

erty

, pla

nt a

nd e

quip

men

t, ne

t16

5.22

0.95

-16

6.17

171.

350.

75-

172.

10

Oth

er a

sset

s2,

038.

017.

6811

4.64

2,16

0.33

2,17

4.05

5.39

6.49

2,18

5.93

Tota

l A

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27. PLEDGED ASSETS

As of December 31, 2004, pledged assets are as follows :

Hemaraj Land and Development Public Company Limited 1) The portion of land and attachments have been mortgaged as collateral for loans from local commercial

banks and financial institutions.2) The ordinary shares of Hemaraj Eastern Seaboard Industrial Estate Company Limited, which is a

Subsidiary company, have been pleged with 2 lenders secured for loans obtained by that subsidiary.3) 17.5 million ordinary shares of Glow IPP Company Limited have been pledged with the lender secured

for loan obtained by that company.4) Time deposit of approximately Baht 22.97 million has been pledged with bank to secure letter of

guarantee issued by bank in respect of certain course of business of a subsidiary.

Eastern Industrial Estate Company Limited1) Time deposit of approximately Baht 7.29 million has been pledged to local banks against security

given for performance under utility construction.2) The majority of its land held for commercial purposes have been mortgaged as collateral for long-term

loans from local commercial banks.

Eastern Seaboard Industrial Estate (Rayong) Company Limited 1) The portion of the companyʼs land has been mortgaged as collateral for overdrafts and loans from one

commercial bank.2) Land, mini and micro pre-fabricated factories of the company have been mortgaged as collateral for

loans from related person.

Hemaraj Eastern Seaboard Industrial Estate Company Limited 1) The majority of the companyʼs land title deeds were delivered for the lenders safe-keeping.

28. COMMITMENTS UNDER AGREEMENTS

As of December 31, 2004, commitments under agreements are as follows:

Hemaraj Land and Development Public Company Limited1. The Company has participated in the establishment project of Chonburi Industrial Estate (Bor Win) in

Phase 1 and Phase 2 with the Industrial Estate Authority of Thailand (“IEAT”) according to the joint operation agreements dated July 5 and December 29, 1989, respectively. Later on October 31, 2001, the Company entered into the amendment to such joint operation agreements with IEAT. The major conditions are summarised as follows:1) The Company shall provide utilities systems and facilities to the entrepreneurs in the industrial estate

with payment of expenses on its participation in the procedures to the IEAT.2) The Company shall not transfer assets, component part and equipment as well as utilities systems and

facilities to the IEAT.3) The Company shall provide a fund for the maintenance and construction of utilities systems and

facilities in the industrial estate (“Sinking Fund”).

2. The company has commitment under construction, infrastructure and lift installation contracts with 3 contractors for the Companyʼs condominium project, with the remaining commitment balance amounting to Baht 1,516.34 million.

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

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

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

3) The company shall provide a fund for the maintenance and construction of utilities systems and facilities in the industrial estate (“Sinking Fund”).

Eastern Seaboard Industrial Estate (Rayong) Company Limited 1. The company has participated in the establishment project of Eastern Seaboard Industrial Estate (Rayong)

with the IEAT according to the joint operation agreement No. 1/2539 and 1/2540 (in the year of 2004, two agreements were combined to one). The major conditions are summarized as follows:1) The Company shall provide utilities systems and facilities to the entrepreneurs in the industrial estate

with payment of expenses on its participation in the procedures to the IEAT.2) The Company shall not transfer assets, component part and equipment as well as utilities systems and

facilities to the IEAT.3) The Company shall provide a fund for the maintenance and construction of utilities systems and

facilities in the industrial estate (“Sinking Fund”).2. The company has obligations, under a joint-investment agreement with Hemaraj Land and Development

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

3. The company has commitment under construction contracts with 2 contractors to construct mini pre-fabricated and micro pre-fabricated factories, with the remaining commitment balance amounting to Baht 76.84 million.

4. The company has commitment under construction contracts with 2 contractor to construct utilities system of the Companyʼs project, with the remaining commitment balance amounting to Baht 78.03 million.

29. COMMITMENTS AND CONTINGENT LIABILITIES

As of December 31, 2004, commitments and contingent liabilities consisted of :

Hemaraj Land and Development Public Company Limited1) The Company has obligations under condition of the letters of guarantee issued by the banks for

its performance under the joint operation agreements with the Industrial Estate Authority of Thailand, the construction of utilities under land sale contract, and its performance under the raw water purchase agreement and others, as well as the letters of guarantee issued by the banks for the performance of its associated company under the power plant construction agreement with the Electricity Generating Authority of Thailand, in the total amount of Baht 28.98 million.

Commitments under agreements (continued)

2) The Company has the obligations under purchase and sale contract agreement in a project in amount of Baht 600 million, for the period with in April 10, 2004.

Eastern Industrial Estate Company Limited1) The company has entered into land sale and purchase contracts. Under the terms of the contracts, the

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

2) The company has obligations regarding guarantee of the hire purchase agreements of its 2 related companies in the total credit line of Baht 35.80 million.

3) The company has obligations, under condition of the letters of guarantee issued by the banks for its performance under the joint operation agreement with the IEAT, the construction of utility and power substation in its industrial estate, and others in the total amount of Baht 58.52 million.

Eastern Seaboard Industrial Estate (Rayong) Company Limited1) The company has entered into land sale and purchase contracts. Under the terms of the contracts, the

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

2) The company has obligation under condition of the letters of guarantee issued by banks to guarantee its performance under the joint operation agreement with the IEAT, the construction of utility, transmission lines, power station and sale of land in its industrial estate, and others in the total amount of Baht 135.29 million.

30. PROMOTIONAL PRIVILEGES

The Company and its 3 subsidiary companies have been granted promotional certificates under the Investment Promotion Act, B.E. 2520 as follows:

Hemaraj Land and Development Public Company Limited

A. Industrial Estate Business

A.1 On December 29, 1988, obtaining the first promotional certificate for the development area of 1,500 Rais.

A.2 On February 15, 1990, obtaining the second promotional certificate for the development area of 2,000 Rais.

B. Industrial Factory Development Business

B.1 On June 21, 2000, obtaining the third promotional certificate for the development of industrial factories for sale and rent, 11 units for micro factory.

Major Privileges

A.1 Exemption from corporate income tax on net income derived from the promoted business for a period of 7 years as from the date when revenues are first earned.

Commitments and contingent liabilities (continued)

A.2 Reduction of 50% of the normal rate of corporate income tax on net income derived from the promoted business for 5 years from the expiry date under condition A.

B.1 Exemption from corporate income tax on net income derived from the promoted business for a period of 7 years as from the date when revenues are first earned.

The promotion period under condition A.1 and A.2 expired and the Company is currently in the promotion period under condition B.1 .

Eastern Industrial Estate Company Limited


A.1 On May 8, 1989, obtaining the first promotional certificate for the development area of 626 Rais.

A.2 On September 23, 1992, obtaining the second promotional certificate for the development area of 1,850 Rais.

A.3 On May 27, 2003, obtaining the third promotional certificate for the development area of 565 Rais.

Major Privileges

A.1 Exemption from corporate income tax on net income derived from the promoted business from the date when revenues are first earned 5 years for the first promotional certificate, currently expired.

A.2 Exemption from corporate income tax on net income derived from the promoted business from the date when revenues are first earned for 8 years was expired. The company is currently in the promotion period under the 50% reduction of the corporate income tax rate on net income derived from the promoted business for 5 years from the expiry date of the exemption.

A.3 Exemption from corporate income tax on net income derived from the promoted business from the date when revenues are first earned 8 years for the first promotional certificate.



A.1 On June 21, 1995, obtaining the promotional certificate for the development area of 2,063 Rais, which subsequently, extended to be 3,595 Rais on August 9, 1995.

A.2 On October 27, 1997, obtaining the promotional certificate for the development area of 2,466 Rais, which subsequently, extended to be 2,791 Rais on August 26, 2002.

A.3 On July 25, 2001, obtaining the promotional certificate for the development area of 716 Rais.

Promotional privileges (continued)

B. Industrial Factory Development Business

B.1 On January 19, 2000, obtaining the promotional certificate for the development of industrial factories for sale and rent, 5 units for mini factories and 17 units for micro factories.

B.2 On June 21, 2000, obtaining the promotional certificate for the development of industrial factories for sale and rent, 7 units for mini factories and 6 units for micro factories.

B.3 On November 29, 2000, obtaining the promotional certificate for the development of industrial factories for sale and rent, 11 units for mini factories and 1 unit for micro factory.

B.4 On January 16, 2002, obtaining the promotional certificate for the development of industrial factories for sale and rent, 1 unit for mini factory and 50 units for micro factories.

B.5 On March 27, 2002, obtaining the promotional certificate for the development of industrial factories for sale and rent, 22 units for mini factories.

Major Privileges

A. Exemption from corporate income tax on net income derived from the promoted business for a period of 8 and 7 years as from the date when revenues are first earned.

B. Reduction of 50% of the normal rate of corporate income tax on net income derived from the promoted business for 5 years from the expiry date of 8 years after the date when revenues of each business are first earned.

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

Hemaraj Eastern Seaboard Industrial Estate Company Limited

Industrial Estate Business

A. On June 13, 1997, obtaining the promotional certificate for the development area of 1,407 Rais.

B. On June 13, 1997, obtaining the promotional certificate for the development area of 1,375 Rais.

C. On June 13, 1997, obtaining the promotional certificate for the development area of 1,485 Rais.

D. On April 27, 1998, obtaining the promotional certificate for the development area of 1,332 Rais.

Major Privileges

A. Exemption from corporate income tax on net income derived from the promoted business for a period of 8 from the date when revenues are first earned.

B. Reduction of 50% of the normal rate of corporate income tax on net income derived from the promoted business for 5 years from the expiry date of 8 years after the date when revenues of each business are first earned.


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

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

MILLION BAHTThe promoted The non-promoted Total

2004 2003 2004 2003 2004 2003 Consolidated Revenue from sales 1,498.64 908.65 1,431.32 37.97 2,929.96 946.62

Service income 381.09 359.29 200.21 204.87 581.30 564.16

Total 1,879.73 1,267.94 1,631.53 242.84 3,511.26 1,510.78

The Company Only Revenue from sales - - 1,275.90 21.80 1,275.90 21.80

Service income

Public utilities - - 27.83 14.02 27.83 14.02

Potable Water - - 15.51 13.43 15.51 13.43

Raw Water - - 45.89 40.37 45.89 40.37

Waste water treatment - - 4.89 4.62 4.89 4.62

Rental 3.31 2.18 13.09 12.98 16.40 15.16

Construction - - 8.47 58.89 8.47 58.89

Others - - 1.01 0.46 1.01 0.46

Total service income 3.31 2.18 116.69 144.77 120.00 146.95

Total 3.31 2.18 1,392.59 166.57 1,395.90 168.75

31. FINANCIAL INSTRUMENTS

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

The Hemaraj Groupʼs policy on interest rate risk and currency risk hedging is as follows:- Maintaining proportions of domestic and foreign borrowings denominated in USD currency;- Borrowing loans at fixed and floating interest rates; - Pledging assets as collateral against loans.

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

Fair Value of Financial InstrumentsExcept as disclosed in Note 3 to the financial statements, fair value of significant financial instruments consists of:

- Fair value of cash and cash equivalents, accounts receivable, bank overdrafts and loans from financial institutions, accounts payable and accrued expenses approximates the carrying amount because of short maturity of these instruments.

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

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


32. PROVIDENT FUND

Hemaraj Land and Development Public Company Limited Eastern Industrial Estate Company Limited Eastern Seaboard Industrial Estate (Rayong) Company LimitedEastern Pipeline Services Company Limited H - Construction Management and Engineering Company Limited

The Company and the 4 subsidiaries jointly established the provident fund under the Provident Fund Act B.E. 2530, named “Hemaraj Provident Fund”, to provide membership for their employees. According to regulations of the fund, member and the Company contributes 4% - 10% of employees monthly salaries, depending on the working period. Members are entitled to their whole contributions plus net benefit thereon, and the Companyʼs contributions plus benefits thereon at the rates, depending on their working period.

Shareholding & Organization Structure

Top Ten of Hemaraj Land and Developmentʼs Shareholders as at 31/12/04

Oganization Structure of Hemaraj Land And Development Public Company Limited as of January 2005

I.E. Operations

Information Sys &

Services Development

Corporate Marketing

Residential Customer

Development Finance Account Legal

Shareholders

Board of Directors

Executive Committee

President & CEO

Audit Committee

Internal Audit

Executive Vice President

No. Major Shareholders No. of Shares % of Total Issued Share

1 Thai Securities Depository Co., Ltd. for Depositor (Thai) 4,073,044,900 69.84%

2 Thailand Securities Depository Co., Ltd. for Depositor (Foreigner) 832,575,186 14.28%

3 Miss Phenpunnee Horrungruang 347,654,000 5.96%

4 Mr. Sumeth Horrungruang 314,447,570 5.39%

5 Sun Tech Group Public Company Limited 86,732,000 1.49%

6 Mr. Sawasdi Horrungruang 70,400,000 1.21%

7 Mr. Thavorn Anankusri 16,000,000 0.27%

8 Miss Nuchanart Horrungruang 15,673,750 0.27%

9 Mr. Swai Horrungruang 11,000,000 0.19%

10 Mr. Thongchai Srisomburananonta 10,195,540 0.17%

Senior Vice President

Residential Project

Planning

Planning & Investor

Relations

Customer Development

Name Address Nature of Business Paid

Capital (Mil.Baht)

% of Investment

Revenue (Mil. Baht)

2004 % 2003 % 2002 %

Hemaraj Land And Development Public Company Limited Registration No. 141 Share Capital 13,000,000,000 shares Issued 5,831,793,766 shares

18th Floor, UM Tower, 9 Ramkhamhaeng Rd., Suanluang, Bangkok 10250, Thailand Tel.(662) 719-9555 Fax (662) 719-9546-7 www.hemaraj.com E-mail: [email protected]

Industrial Estate Developer

5,832 1,582.71 42% 644.98 31% 453.02 30%

Subsidiary Companies

Hemaraj International Limited (1)

Scotia Centre, 4th Floor P.O.Box 2804, George Town, Grand Cayman, Cayman Islands

Holding Company 0.03 100

H-International (BVI) Company Limited (2)

Romasco Place, Wickhams Cay 1, P.O.Box 3140, Road Town, Tortola British Virgin Islands

Holding Company 0.08 100 0.07 0% 52.02 3% 70.05 5%

Eastern Industrial Estate Company Limited

18th Floor, UM Tower, 9 Ramkhamhaeng Road, Suanluang, Bangkok 10250, Thailand


400 99.99 1,135.27 30% 444.05 22% 206.98 13%

Eastern Pipeline Services Company Limited (3)


Pipe Rack Rental 3.75 99.99 23.04 1% 21.53 1% 19.27 1%




358 60 989.78 27% 887.86 43% 787.60 51%



Supervision Service

0.25 99.99 0.47 0% - 0% 0.01 0%

The Park Residence Company Limited


Property Development and

Marketing and Service

Management

0.25 99.99

Hemaraj Eastern Seaboard Industrial Estate Company Limited


Industrail Estate Developer

595 99.99 0.91 0%

Associated Companies

Elyo-H Facilities Management Company Limited

107/1 Moo 4, Eastern Seaboard Industrial Estate (Rayong), Pluakdeang, Rayong, Thailand

Facilities Management

Services

50 40 1.56 0% (2.15) 0% (1.81) 0%

Related Companies

Eastern Fluid Transport Company Limited

618 Nimom Makkasan Road Makkasan, Ratchthewi Bangkok 10400, Thailand

Management and Maintenance of Pipe Rack

10 15

Total Revenue : Hemaraj Land And Development PLC. and Subsidiaries 3,733.81 100% 2,048.29 100% 1,535.12 100%

Remark 1) Incorporated in the Cayman Islands 2) Incorporated in the Territory of the British Virgin Islands 3) Held by Hemaraj and Eastern Industrial Estate

General Information

Information of Board of Directors, Audit Committee and Management

Name / Position Age Education

Present Position - OthersStocks held by

Directors/Management

(%) as of 31/12/2004Position Sector / Company

1 Mr. Sawasdi Horrungruang

Chairman of the Board

Chairman of the Executive Board

64 Honorary Doctorate Degree

Bachelor Degree of Business

Administration Humanity

Faculty, Burapha University

PresidentChairmanChairmanChairmanChairmanChairmanChairmanChairmanVice Chairman / Eexcutive Director and DirectorDirectorChairmanDirector

Thai Industrial Estate Association.Nakornthai Strip Mill PCL.Millennium Steel PCL.Sun Tech Group PCL.Sriracha Harbour PCL.The Park Residence Co., Ltd.Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd.Eastern Industrial Estate Co.,Ltd.Eastern Seaboard Industrial Estate(Rayong) Co.,Ltd.Eastern Pipeline Services Co.,Ltd.Hemaraj International Co., Ltd.H-International (BVI) Co., Ltd.

1.21

2 Mr. Thavorn AnankusriDirector / Vice Chaiman of the Executive Board

63 - Director Eastern Industrial Estate Co.,Ltd. 0.27

3 Mr. David Richard Nardone

Director / Executive Director / Managing Director

49 MBA

Northeastern University

Boston, USA

ChairmanChairmanChairmanDirectorExecutive Director and DirectorDirectorDirectorDirectorDirectorDirector

Elyo-H Facilities Management Ltd.Eastern Pipeline Services Co.,Ltd.H-Construction Management and Engineering Co.,LtdThe Park Residence Co., Ltd.Eastern Seaboard Industrial Estate(Rayong) Co.,Ltd.Eastern Industrial Estate Co.,Ltd.Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd.Glow Co.,Ltd.Hemaraj International Co., Ltd.H-International (BVI) Co., Ltd.

0.59

4 Mr. Sudhipan CharumaniIndependent Director / Chairman of the Audit Committee

61 Charter Accountant Institutes(Britian and Wales)

Independent DirectorDirector

Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd.Vasupak Associates Co., Ltd.

-

5 Mr. Peter John EdmondsonIndependent Director / Member of the Audit Committee

54 Bachelor of Science in Chemistry (Honor)

University of Sheffield, England

Investor Consultant Private Sector 0.06

6 Mrs. Punnee WorawuthichongsathitIndependent Director / Member of the Audit Committee

53 Bachelor of Account (Honor)Chulalongkorn University

Independent Director/Member of the Audit CommitteeIndependent Director/Member of the Audit CommitteeIndependent Director/Member of the Audit Committee

TT&T PCL.Nakornthai Strip Mill PCL.The Brooker Group PCL.

-

7 Mr. Vivat Jiratikarnsakul

Director / Executive Director / Deputy Managing Director

49 Bachelor of Sanitary

Faculty of Engineering

Chulalongkorn University

DirectorDirectorExecutive Director and DirectorDirectorDirectorDirectorDirectorDirectorDirectorDirector

Eastern Fluid Transport Co., Ltd.Eastern Industrial Estate Co.,Ltd.Eastern Seaboard Industrial Estate(Rayong) Co.,Ltd.Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd.Elyo-H Facilities Management Ltd.H-Construction Management and Engineering Co.,Ltd.The Park Residence Co., Ltd.Eastern Pipeline Services Co.,Ltd.Hemaraj International Co., Ltd.H-International (BVI) Co., Ltd.

0.07

8 Ms. Pattama Horrungruang

Director / Executive Director / Deputy Managing Director

42 MBA

Thammasat University

DirectorDirectorExecutive Director and DirectorDirectorDirector

Eastern Industrial Estate Co.,Ltd.Hemaraj Eastern Seaboard Industrial Estate Co.,Ltd.Eastern Seaboard Industrial Estate(Rayong) Co.,Ltd.The Park Residence Co., Ltd.Millennium Steel PCL.

-

9 Mr. Khamhoung RatsamanyDirector - Industrial Estate Operations

38 MBABangkok University

- - -

10 Mr. Tanin SubboonruengDirector - Development

41 MBA, Business AdministrationAssumption University

Director H-Construction Management and Engineering Co.,Ltd. -

11 Mr. Sirisak KijruksaDirector - Accounting

44 Bachelor of AccountingBangkok University

Director H-Construction Management and Engineering Co.,Ltd. -

12 Ms. Somjai WachirahaDirector - Finance

44 Bachelor of Business Administration General Affairs, Ramkhamhaeng University

- - -

13 Mr. Niphone HarnpatanapanichDirector - Residential Project Planning

48 MBAChulalongkorn University

- - -

14 Mr. Paopitaya SmutrakalinDirector - Planning & Investor Relations

34 MS, FinanceDrexel University, Philadelphia, USA

-

15 Ms. Jinnapat TongviseskulDirector - Residential Customer Development

35 MBA, Economic & AdministrationChulalongkorn University

- - -

16 Ms. Ladda RojanavilaivudhDirector - Industrial Customer Development

37 MBA, Bangkok UniversityMA, Japanese

Nara Women University, Nara, Japan

- - -

17 Ms. Anchalee ParsertchandDirector - Industrial Customer Development

35 MBA, Assumption UniversityMA, Japanese

Keio University, Tokyo, Japan

- - -

18 Ms. Chantana HinkaewDirector - Corporate Marketing

35 MBAUniversity of Nottingham, UK

- - -

19 Mr. Apichat TrongsuksonAssistant Director - Information System & Services

40 MBANIDA University

- - -

1. General Information

1.1 Financial Highlights 1

1.2 Shareholding & Organization Structure 66

1.3 General Information - The Company & its Subsidiaries 67

1.4 Information of Board of Directors, Audit Committee and Management 68

1.5 Project Summary 70

1.6 Other References 70

2. Message from the Board of Directors 2

3. The Companyʼs Business Profile

3.1 Nature of Business 4

3.2 Core and Related Business 4

3.3 Revenue Structure by Business Line 1

4. Economic and Competitive Conditions 3

5. Management Analysis

5.1 Operating Performance 9

5.2 Financial Status 9

5.3 Risk Factors & Others 10

6. Management Structure

6.1 Board of Directors and Executive Committee 11

6.2 Audit Committee 11

6.3 Company Management and Structure 12

7. Selection of Companyʼs Directors and Management 13

8. Remuneration for Directors and Management 13

9. Report of Securities held by Directors / Management 68

10. Good Corporate Governance 13

11. Report of Certified Public Accountant 18

12. Financial Statements and Notes to Financial Statements 19

Page

Checklist to the SEC 56-2 Form

Project Summary & Other References

As of December 31, 2004

Other References

Share Registrar Thailand Securities Depository Co., Ltd.

62 The Stock Exchange of Thailand Bldg. 4th Floor

6-7th Floor, Rachadapisek Road, Klongtoey, Bangkok 10110, Thailand Tel. 0-2359-1200-1

Auditor

A.M.T & Associates

491/27 Silom Plaza,

Silom Road, Bangruk, Bangkok 10500, Thailand

Tel. 0-2234-1676, 0-2234-1678 Fax 0-2237-2133

- Kesree Narongdej CPA No. 76

Attorney Allen & Overy (Thailand) Co., Ltd.

130 Sindhorn Building III, 22nd Floor, Wireless Road

Bangkok 10330, Thailand Tel. 0-2263-7600

Financial Advisor Per Project

Advisor or Manager under contract management

The Brooker Group

16th Floor, Harindhorn Building, 54 North Sathorn Road, Bangrak, Bangkok 10500, Thailand

Tel. 0-2267-9222 Fax 0-2632-2606

Industrial Estates Cumulative (Rai) Sold % Industrial Area (Rai) Total Area (Rai) % of Completion

Chonburi Industrial Estate (Chonburi) Phase I, II (A, B) 1,575** 84% 1,870 2,348 100

Phase II (C, D) 503 95% 529 1,060 100

Phase III 200* 330

Total Chonburi 2,078 2,599 3,738

Eastern Industrial Estate (Map Ta Phut)

Phase I 1,377 95% 1,444 2,205 100

Phase II 258 420* 503 93

Total Eastern 1,635 1,864 2,708

Eastern Seaboard Industrial Estate (Rayong)

Phase I 1,533 100% 1,533 2,075 99

Phase II 1,724** 91% 1,887 2,636 99

Phase IV 418** 88% 477 626 96

Phase V 237 35% 685 916 94

Phase VI 80 35% 230 329 32

Phase FZ 24 48% 50 61

Expansion 1,006* 1,437***

Total Eastern Seaboard 4,016 5,868 8,080

Hemaraj Eastern Seaboard Industrial Estate Purchased Land 6,947 Expansion Option 2,500 Total Hemaraj Eastern Seaboard Industrial Estate 9,447

Total 7,729 10,331 23,973

* Estimate ** Include land lease *** Land in hand plus fixed option to purchase from Siam Food Products Plc. Note: 1 Rai = 1,600 Sq. meters or approx. 0.4 acres

Reference Persons

Hem

araj Land And D

evelopment Public Com

pany Limited

Hem

araj Land And D

evelopment Public Com

pany Limited

An

nu

al Rep

ort 2004

√“¬ß“πª√–®”ªï 2547Annual Report 2004

∫√‘…—∑ ‡À¡√“™æ—≤π“∑’Ë¥‘π ®”°—¥ (¡À“™π)™—Èπ 18 Õ“§“√¬Ÿ‡ÕÁ¡∑“«‡«Õ√å ‡≈¢∑’Ë 9 ∂ππ√“¡§”·Àß «πÀ≈«ß °√ÿß‡∑æ¡À“π§√ 10250‚∑√ 66-2719 9555 ‚∑√“√ 66-2719 9546-7

Registration No : 141∑–‡∫’¬π‡≈¢∑’Ë : 141

Hemaraj Land and Development Public Company Limited18th Fl. UM Tower, 9 Ramkhamhaeng Rd., Suanluang, Bangkok, 10250, Thailand

Tel. 66-2719 9555 Fax : 66-2719 9546-7

e -mai l : market ing@hemara j . com, inves t@hemara j . com

www.hemara j . comwww.theparkres idence .co . th

The World ClassDeveloper in Thailand

www.hemaraj.com

www.theparkresidence.co.th

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