ธ สถิตในดวงใจไทยนิรันดร์ ปวงข้าพระพุทธเจ้า ขอน้อมเกล้าน้อมกระหม่อม ร�าลึกในพระมหากรุณาธิคุณหาที่สุดมิได้ ด้วยเกล้าด้วยกระหม่อม ขอเดชะ ข้าพระพุทธเจ้า คณะกรรมการ ผู้บริหาร และพนักงาน บริษัท มั่นคงเคหะการ จ�ากัด (มหาชน) และบริษัทในเครือ ทรงพระเจริญ ทรงพระเจริญ ด้วยเกล้าด้วยกระหม่อม ข้าพระพุทธเจ้า คณะกรรมการ ผู้บริหาร และพนักงาน บริษัท มั่นคงเคหะการ จ�ากัด (มหาชน) และบริษัทในเครือ Content 01 02 08 Massage From the Chairman Policy and Overview Nature of business of Business Operation 16 17 18 Risk Factor Summary of Financial Board and Advisory Information 20 24 27 Board and General and other Securities and shereholders Management History significant information 28 36 63 Management structure Corporate governance CSR 67 71 75 Internal controls Related Party Transactions MD&A and risk management 77 80 Independent Auditor’s Report Statement of financial position Message from the Chairman The company’s action plan has been changing its structure and the business is cumulative for more growth and to be well competitive in real estate market Mr. Suthep Wongvorazathe in all negative facing factors. Chairman / Chief Executive Office Assiduously follow the Father’s Step During the end of the year 2016, when our beloved King forward the real estate business, e.g., hi-growth of tourism passed away, the undeniable deep grievance has been spreading industry, investment policy in country’s transportation and over the country. We, on behalf of executives and employees new sky train line building. of M.K. Real Estate Development Public Company Limited do In 2017, growth ratio of Thai economy should be closed pay our profoundly respect and royalty to the greatest King who to 2016 ratio and to forecast, it will be gradually flourished always gives the peacefulness to all Thais and also brings about for the year 2017 – 2019 around 2.5 - 4.0% with a support the country development in all areas for 70 years. Although from the country’s expenditure recovery and the continuous your Majesty the King passed away, he will be always memorable progress of tourism cluster. Furthermore, governmental remained in all Thai hearts. Please allow us to take one of his support on budget deficit policy of 2.6% GDP is urging the observation royal speeches on “an effort” to be our guideline economy including pushing in infrastructure investment in business operation for life: project to be in concrete whereas the Monetary Policy “A right, fair and desirable effort is the effort to eliminate all Committee (MPC) should freeze the interest policy until next deterioration and prevent it from its rebirth, one thing and is year from the slow economy expanding ratio. the effort to create righteousness and maintain it not to be The company’s action plan has been changing its structure disintegrated, another thing. These both “effort” meanings are and the business is cumulative for more growth and to be the essential patronage for oneself behavior and working well competitive in real estate market in all negative facing performance. If everyone in the nation has been persevere in factors. Our main product shall still be the horizontal housing, such effort, benefits and pleasure will immediate definitely rise our expertise and reliability our clients rest in us for over 60 both to oneself and community at large. (The royal observation years for worthy to the desire and need to all Bangkok royal speech in The Fiftieth Anniversary (Golden Jubilee) metropolitan area for the price of 2 – 10 million baht; single Celebrations of His Majesty’s Accession to the Throne, B.E. 2539) family house, twin house and town home, i.e., Chuan Chuen In 2016, real estate business overview starts to adjust the Town, Kaewin - Bangyai, Chuan Chuen Prime Bangkok – development of housing project to focus more on consumer Pathumthani, Chuan Chuen Park On-nut – Circle. The company demand regarding for living than for investment or profit. As shall continue invest for new land for developing more new a result, horizontal real estate i.e., single family house, twin projects in the future. house and town home is gradually in progress and also In the meantime, new business plan is “real estate for because of the low risk under the current economic rent” in order to increase income proportion and create a fluctuation. Various business entrepreneurs vigorously keep long term financial stability which is at Park Court, Suthumvit an eye on this business due to its ready for sale and transfer. 77 and T77 Park. In addition, governmental supportive measures specifically in On behalf of the Board of Directors, I would like to convey transfer and mortgage fee reduction is the main factor my appreciation to all the parties for your continued encouraging the substantial increase of house sales figure participation and support. We will move the Company especially housing in Bangkok metropolitan region. Other through issues and obstacles and reach the great success in positive economic factors are also significant means to move the future. 1 ANNUAL REPORT 2016 M.K.REAL ESTATE DEVELOPMENT PLC. 1. Policies and overview of business operations 1.1 Vision, Missions, Goals, and Business Strategies In 2016, the Company continued to implement the strategy it had commenced in 2015, which had a principal aim of maintaining a strong foundation for busiess under the concept “We Build a Place of Family Togetherness.” The Company has redesigned the overall project, interior design, and landscape in order to meet the customers’ needs in the present, including redesign the Company’s logo, lanched new broadcast on both online and offline medias, revised the communication strategy to access to the new genaration more on social medias such as facebook, fanpage, etc. It emphasized the development of horizontal projects for sale, under the “ChuanChuen” brand, at the price ranges in which the Company has strong expertise, namely mid- and low-price segments. The Company’s focus is on affordable residential projects, such as town houses with the starting price of two million baht and twin houses with the starting price of four million baht. These projects are located near mass transit and not far from previous projects which have already provided the Company with client bases and positive feedback. Meanwhile, the Company converted assets that were not used or engaged in the business operations into working capital, to increase its business capacity. In addition, the Company has set a goal to increase the percentage of revenues from property development for sale and property development for rent and related services so that the revenues from both sources are more or less at the same level within the next five years. It aims to do so by increasing the percentage of projects with recurring incomes, such as golf courses and buildings for rent; by expanding the number of factory buildings and warehouses for rent; and through Park Court Grand Apartment on Sukhumvit 77, which is a premium segment project and targets foreigners or expatriates residing or working in Thailand. Vision Strives to be one of Thailand’s leading residential property development companies, and offer quality products and services at reasonable prices. Mission 1) Financial mission: Build financial stability and generate greatest benefits for shareholders, through sustained sales growth and efficient cost management 2) Marketing mission: Deliver quality products –in terms of location, construction standards, and environment– at reasonable prices, provide excellent customer service, and constantly make the “ChuanChuen” brand known to the public as a leading residential property development company 3) Production and service mission: Deliver quality products and excellent services on time and with efficiency, and continue to improve product quality 4) Management mission: Enhance competitiveness, always make an all-out effort to achieve the goals set for all operations, and promote good governance 5) Personnel mission: Instill a sense of responsibility in maintaining quality and providing service, and create a culture of continuous learning and development in a friendly working environment 1.2 Company background, and major changes in 2016 MK Real Estate Development Public Company Limited was founded in 1956 with initial registered capital of eight million baht. The Company’s business began with obtaining construction contracts to build various types of buildings, under the name “Munkongsathapat General Partnership” Significant developments in subsequent years include - In 1961, the Company engaged in building and land-related business, in addition to obtaining construction contracts. - In 1977, the Company commenced its first housing development, known as “ChuanChren Community” located on Phrachachuen Road. After that, its housing business gradually expanded, the brand gained increasing recognition from consumers. The Company fully engaged in the property development business in 1981. - In 1990, the Company became the first property development company to be listed in the Stock Exchange of Thailand, and in 1993, the Company registered the change of its status to a public limited company, with registration No. 0107536001567. 2 - In 1994, the Company added a new business to its operations, namely property development for rent and related services, which started with the development of a golf course kown as ChuanChuen Golf Club. - In 2005, the Company launched the development of detached houses under the ChuanChuen and Sirin House brands. These projects remain ongoing to this day. To date, the Company has had more than 60 projects of property development for sale, located across the Bangkok Metropolitan Region. Major developments in past three years 2014 - In 2014, the Annual General Meeting of Shareholders No. 1/2014 passed a resolution approving dividend payment at 0.30 baht per share. However, an interim dividend had been paid at 0.10 baht per share on 12 September 2013, so the net final dividend paid was 0.20 baht per share. There were a total of 860,384,157 shares, therefore the total amount of dividend paid was 172.08 million baht. The dividend payout radio was 60 percent of the net operating income. At the Board of Directors’ meeting No.