2001 Summary. Financial Ratio. Sales and Service Income. Total Revenue. Net Income. Total Assets. Total Liabilities. Shareholders Equity

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1 2001 Summary Million Baht Sales and Service Income Total Revenue Net Income Total Assets Total Liabilities Shareholders Equity Earning Per Share (Baht) Financial Ratio Year Current Ratio Net Debt to Equity Return on Total Assets (%) Return on Equity (%) Net Profitability Ratio (%) Book Value per Share (Baht) 1

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3 Message from the Board of Directors Hemaraj Land And Development Public Company Limited financial and operating results reflect slightly improving economic conditions in Thailand. For 2001, Hemaraj reported a Net Loss of Baht 493 million, or a loss of Baht 6.97 per share, on Total Revenue of Baht 1,258 million. The Net Loss was substantially due to foreign exchange, the provision of legal reserves, and a high level of interest in comparison to the revenue. The overall Thailand industrial property market in 2001 increased modestly. The Hemaraj performance was disappointing as sales of 261 Rai from 22 new customers were primarily from Eastern Seaboard Industrial Estate and the automotive industry. Petrochemical investment remains dormant. The economic conditions continue to constrain the company s ability to generate cash flow consistent with the maturity of a high level of debt obligations. Thus many of the debt obligations are under restructuring. We were successful in the subscription of a rights issue after the close of the year, raising Baht 283 million in limited new capital in January of The strategy of infrastructure development is to generate recurring and complementary income enhancing and balancing the cyclical nature of our industrial estate development. Over time these will provide a more predictable revenue stream. With deep regret, our Vice-Chairman colleague and friend Khun Prateep Trilohaka passed away after an illness in March of His leadership will continue to invigorate and inspire us. Our thoughts are with his family. The support of our shareholders, management, employees, customers, creditors, and business partners remain encouraging. I would like to express our appreciation on behalf of the Board of Directors. Respectfully submitted, (David R. Nardone) President & Chief Executive Officer 28 March

4 Economic Charts Source : Bank of Thailand, NESDB 4

5 Economic & Competitive Conditions In 2001, the Thailand economy was continuously impacted by the slowdown of global economies, particularly of the country s trading partners such as US, EU, and Japan, which resulted in the declines in level of FDI and export growth. The terrorist attack has further dampened the US economy as well as increased the global worries. For 2001, the GDP growth index was projected to rise by 1.5 to 1.6 percent from the previous year. Manufacturing production growth rose by only 1.3 percent with capacity utilization at 54 percent. Many industries especially electronics and computer were directly affected by the slowdown of global demand. However, automobile, auto parts, and agricultural product showed an increase in production from the previous year. The Private Consumption Index increased 3.4 percent from a year earlier. Exports in dollar terms decreased by (6.9) percent. However, imports also decreased by (2.8) percent from the 2000 level. The inflation rate remains stable and low at 1.6 percent for the year. The Board of Investment (BOI) project approvals were 820 projects approved representing an investment value of Baht 266 billion in 2001, a slight declined of 4.2% from the previous year. Sales in Thailand of Industrial Land (source CB Richard Ellis) are estimated at 2,264 rai for 2001, a 50 percent increase from the previous year. The automotive market, initially dependant on domestic sales of 590,000 vehicles in 1996 dropping to the low of domestic sales of 144,000 vehicles in 1998, is now stronger and more balanced. In 2001, the modest recovery continued with domestic sales of 297,000 vehicles along with 180,000 vehicle exports. The economic prospects for Thailand remain promising with agriculture, electronics, automotive, and tourism generating considerable foreign currency earnings. The new government s fiscal and monetary measures of deficit spending such as Village Fund Project, temporary debt moratorium for farmers, the People s Bank Project, and the Universal Health Care Scheme have played the major roles to stimulate the domestic consumption. 5

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7 Nature of Business Industrial Estate Focus Hemaraj has concentrated on the industrial estate development in the Eastern Seaboard Region since the beginning of the Eastern Seaboard Development Program. The Eastern Seaboard Area has a concentrated infrastructure development to support the investors with the petrochemical complex, liquid and bulk ports, new highways, deep sea container ports, electricity substations & generations, water supply, communications, international airports, and universities, schools and communities, etc. Hemaraj s three industrial estates have been developed to support the industrial development namely; Chonburi Industrial Estate (Bo Win), Eastern Industrial Estate (Map Ta Phut) and Eastern Seaboard Industrial Estate (Rayong). All three industrial estates are jointly managed with the Industrial Estate Authority of Thailand and receive promotion privileges from the Office of the Board of Investment in the total area of 6,000 acres (15,000 rai). The infrastructure development of each industrial estate is supporting to the various types of industry. Hemaraj provides and manages the infrastructure on site such as waste water treatment, water supply, in some cases electricity, communications, as well as services of steam, demineralized water, facilities and maintenance services, and supporting mini and micro factories for small and medium enterprises (SMEs). All services enhance the customers achieving the lowest long-term cost of ownership. In 2001, the company s environmental achievements continued. The Chonburi Industrial Estate was the recipient of the Best Environmental Management, EIA Award by the Minister of Science Technology and Environment. The Eastern Seaboard Industrial Estate was the recipient of the Best Environmental Management, EIA Award in 1998 and The Eastern Industrial Estate was also the recipient of the EIA Award in The three industrial estates were awarded the ISO Certification by BVQI. These will further enhance the efficiency of Hemaraj s for the beneficiary of customers and communities. Chonburi Industrial Estate (Bo Win) is designed for the steel mills, auto parts, electronics, building materials and general industries. There is an export processing zone for export-oriented industry and ready build factory Mini factories. The project area is 4,905 Rai with Phase I and II completed, Phase III is under limited development. Eastern Industrial Estate (Map Ta Phut) is located in the Map Ta Phut Petrochemical Complex and designed for customers mainly from steel, petrochemical, and chemical industries. The infrastructure is designed to serve heavy industries requiring a high water, wastewater, and power capabilities including optional utility services such as steam, private power, and demineralized water. Glow Co.,Ltd subsidiary co-generation power plant (Industrial Power) and a de-mineralized water plant (Industrial Water) are on site. The provision of a pipe rack distribution network is available through subsidiary Eastern Pipeline Services. Eastern Seaboard Industrial Estate (Rayong), a 60/40 joint venture with Siam Food Products PLC, development started in 1995 for automotive and auto parts, building materials, metal processing, consumer goods, electronics, and medium industries. The area of 6,992 Rai is located in Pluak Daeng, Rayong in close proximity to the Chonburi coastal infrastructure, container port, and human and recreational resources. The Eastern Seaboard Industrial Estate (Rayong) has become one of the most integrated automotive industrial estates in the world and dubbed the Detroit of the East. ESIE is home to AutoAlliance (Ford & Mazda Joint Venture), General Motors, along with 6 Toyota group and over 55 automotive related companies to date including glass, plastics, metal processing, steel service centers, forging, chemical and other related activities. This is the heart of integrated automotive suppliers in Thailand. 7

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9 Infrastructure GLOW Company Limited (formerly known as H-Power) was formed in 1997 by Hemaraj for the purpose of investing in power projects within the context of the privatization of power to the Electricity Generating Authority of Thailand (EGAT). In September of 1997, Hemaraj partnered equally H-Power with Tractebel S.A., the Belgian electricity and gas utility. In the first quarter of 2000, Hemaraj reduced its stake in H-Power in order to fund the Bowin Power IPP project, with Tractebel subsequently holding % and Hemaraj %. H-Power s registered capital is Baht 1,330 million. Established since November 1994, the GLOW subsidiary Industrial Power Company (IP) project is a gas fired co-generation power plant designed to generate a capacity of MW (net electricity) and 100 tons per hour of steam segregated into two phases. IP s facility provides 110 MW of electricity to EGAT under the Small Power Producer (SPP) program and both electricity, steam, and demineralized water to industrial customers. The plant is located in Hemaraj s Eastern Industrial Estate, with a total investment of Baht 4,500 million. Bowin Power Company Limited, GLOW subsidiary, is developing a 713 MW natural gas-fired Alstrom combined cycle power plant under EGAT s Independent Power Producers (IPP) program. Bowin Power is located in Hemaraj s Chonburi Industrial Estate. Bowin Power signed a 25 year Power Purchase Agreement (PPA) with EGAT and a 25 year Gas Supply Agreement (GSA) with the Petroleum Authority of Thailand (PTT) in The commercial operation date in supplying power to the EGAT is scheduled to the end of The project cost is approximately USD 390 million with project finance completed on July 14, The IPP projects were included by EGAT in the indexing of the power capacity tariff to 90% of the fluctuations of the U.S. Dollar after the Baht floatation in July Elyo-H Facilities Management Limited is the joint venture company of Hemaraj, Elyo group of France (a Tractebel subsidiary and part of the worldwide Suez group) and Teo Hong Silom Group (a well known group of supplier/ engineering contractor). Elyo-H FM was registered in July 2000 at Eastern Seaboard Industrial Estate (Rayong). Elyo-H FM was established to serve manufacturer s need for outsourcing Facilities Management Maintenance and utility management services. 9

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