Page 1


Board of Director

12

Executive Management Team

13

Message from the Board of Directors

14

General Information

15

Financial Highlight

17

Nature of Business Operation

18

Risk Factors

24

Shareholding Structure

35

Mangement Structure

36

Corporate Governance

48

Internal Audit

62

Related Transaction

63

Conclusion of Financial Status and Results of Performance

75

The Board of Director’s Responsibilities in Respect of The Financial Statement to Shareholders

98

Report of the Audit Committee

99

Financial Statement

101


12

Annual Report 2012 Jubilee Enterprise Public Company Limited

Board of Director

Manu Leaopairoj Chairman

Amnuay Nakruchata-amorn Chairman of the Audit Commitee

Viroj Phonprakit Vice Chairman

Pirote Maleehorm Audit Committee

Suvatana Tulayapisitchai Director

Zonwa Denmeka Audit Committee

Unyarat Pornprakit Director

Sahasroj Rojmetha Director


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Executive Management Team

Viroj Phonprakit

Chief Executive Officer

Yuttana Taepangthong Director – Finance & Accounting Department

Suvatana Tulayapisitchai

Deputy Senior Chief Executive Officer

Warawut Settanarag

Senior Director – Internal Audit Office

Varit Saimala Unyarat Pornprakit

Chief Financial Officer

Director – Purchasing Department

Sophon Aroonsuraphonmaythee Marketing Director


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Annual Report 2012 Jubilee Enterprise Public Company Limited

MESSAGE FROM THE BOARD OF DIRECTORS The year 2012 is deemed as the achievement of the Jubilee Enterprise Public Company Limited. Although the situation from outside and the competition is very challenging, the company has gained profit totally THB 1,226.23 million due to the focus of quality and design development and the diamond selection imported from Belgium where is the best hub of the world in diamond cut including the professional service to reach the customer’s satisfaction. Such amount of profit is increased from 2011 or equivalent to 38.19% while the profit net is approximately THB 165.87 million or equivalent to 26.43%. Moreover, we also have focused develop diamond jewelry in Thailand in order to meet the international standards accepted by Thais and foreigners. This results to the honorable award called SET AWARDS 2012, organized by the Stock Exchange of Thailand in association with Money & Banking Magazine, in the field of the Best Investor Relations Award and the Outstanding Company Performance Awards. With dedication in this industry; therefore, we, the Jubilee Enterprise Public Company Limited, are now Thailand’s leading retailer of diamond jewelry. We are the pioneer of the retail company in diamond and jewelry and we are only one company entered into the mai stock market. We, nowadays, are the first rank company who has branches more than the others which is totally 95 branches all over the regions of Thailand. We are well-known and credible among the diamond and gem industry. Furthermore, we are the leader in creating the new innovations to the diamond business such as the distribution channel, career stability, standardization of the jewelry use and the provision of the international diamond certification for the customer in Thailand. The Board of Directors would like to express our gratitude to shareholders, customers, business partners, colleagues and the relevant stakeholders including the financial institutions assisting us continually. In this regard, we may ask you to entrust that we would carry on the business with vigilance and due diligence; adhere to the code of ethics, good governance and sustainable development in order to maximize the benefit to all relevant parties; and to realize the importance of community, society and environment in order to go forward together with Thailand eternally.

Manu Leopairote Chairman of the Board of Directors

Viroj Phonprakit Chief Executive Officer


Annual Report 2012 Jubilee Enterprise Public Company Limited

15

General Information Company Name : Registration No. : Type of Business : Headquarter office : Telephone : Fax : Home Page : Registered Capital : Paid-up Capital : Par Value : Contacted Person : E-mail :

Jubilee Enterprise Public Company Limited (JUBILEE) 0107551000177 Producer and Retailer of diamond jewelry carat diamond and loose diamond 721 Silom Road Bangrak Bangkok 10500 0-2266-5700 0-2635-2739 www.jubileediamond.co.th 175,000,000 Baht 173,297,625 Baht 1 Baht Mr. Yuttana Taepangthong and Mrs. Patcharawalai Atichatipjinda ir@jubileediamond.co.th

Reference Securities Registrar : Auditor : Legal Advisor :

Thailand Securities Depository Co., Ltd. (TSD) 62 The Stock Exchange of Thailand Building 4, 7 Floor Rachadapisek Klongtoei Bangkok 10110 Tel. 0-2229-2800 Fax. 0-2235-1259 ANS Audit Co., Ltd. Mr. Prawit Viwanthananut, CPA Licence No 4917; Mr. Athiphong Athiphongsakun, CPA Licence No 3500; Mr. Bunjong Pichayaprasat, CPA Licence No 7147; or Mr. Thoetthong Thepmangkon, CPA Licence No 3787; C AM International Law Co., Ltd. 67/55 Moo 8 Soi Rattanatibet 24 Rattanatibet Road Muang Nonthaburi


16

Annual Report 2012 Jubilee Enterprise Public Company Limited

Financial Highlight Total Revenue (MB) 1400.00

1226.23

1200.00 1000.00 800.00

887.32 689.12

600.00 400.00 200.00 0.00

2010

2011

2012

Net Profit (MB) 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00

165.87 131.19 103.73

2010

2011

2012

Balance Sheet (MB) 746.57

800 700 600 500 400 300

647.28 591.75 499.26 372.89

434.03

218.86

213.25

247.31

2010

2011

2012

200 100 0

Total Asset Total Shareholder’s Equity Total Liabilities


17

Annual Report 2012 Jubilee Enterprise Public Company Limited

Financial Highlight 2012

2011

2010

Operating Result (MB)

Total Revenue

1,226.23

887.32

689.12

Cost of Goods Sold

716.02

497.67

379.71

Gross Profit

510.21

389.65

309.41

Operating Profit

209.45

166.83

130.65

Net Profit

165.87

131.19

103.73

Balance Sheet

Total Asset

746.57

647.28

591.75

Total Liabilities

247.31

213.25

218.86

Shareholder’s Equity

499.26

434.03

372.89

Earning per shares (EPS)

0.96

0.77

0.61

Dividend (Satang)

0.60

0.52

0.35

Share Value

Financial Ratio Gross Profit Margin

41.61%

43.91%

44.90%

Operating Profit Margin

16.70%

18.06%

18.32%

Net Profit Margin

13.47%

14.73%

14.96%

Current Ratio

2.92

2.89

2.58

Quick Ratio

0.86

0.94

1.09

Debt to Equity Ratio

0.50

0.49

0.59

Return on Assets (ROA)

23.80%

21.18%

19.18%

Return on Equity (ROE)

35.54%

32.52%

29.55%

Average Collection Period (days)

19.40

23.90

33.21

Average Payment Period (days)

81.63

116.50

108.43


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Annual Report 2012 Jubilee Enterprise Public Company Limited

NATURE OF BUSINESS OPERATION Company History and Milestones The company has been registered and named “Jubilee Enterprise Company Limited� on 3rd November, 1993. Previously, the registered capital was the sum of THB 10,000,000 but was increased to THB 40,000,000 later in order to support the ongoing business expansion. With capacity, experiences and expertise in this industry, we have been growing rapidly and resulting to the additional registered and paid-up capital up to THB 120,000,000 in 2008 eventually. On 8th July, 2008, the company has transformed from the private company to the public company and named Jubilee Enterprise Public Company Limited. The company has increased the registered capital from THB 120,000,000 to THB 175,000,000 by way of issuing the common share at the amount of 55,000,000 shares while the par value is of THB 1 in order to offer to sell the share to the specific investors at the amount of 15,000,000 shares and another 35,000,000 shaes for the public and to bestow the Employee Stock Option (ESOP) issued by the company for the directors and employees at the amont of 5,000,000 shares. During 26-28th October, 2009, the company launched the Initial Public Offering and has entered into the MAI stock market officially on 9th November, 2009. During 28-30th October 2010, the company provided the first ESOP to the directors and employees at the amount of 1,121,500 right : common share. On 5th November, 2010, the company adjusted to register the first paid up ESOP for the directors and employees from THB 170,000,000 to THB 171,121,500 at the Department of Business Development, the Ministry of Commerce. During 28-30 October, 2011, the company adjusted the number of the second ESOP to the directors and employees at the amount of 1,166,250 right : common share. On 9th November, 2011, the company adjusted to register the second paid up ESOP for the directors and employees from THB 171,121,500 to THB 172,287,750 at the Department of Business Development, the Ministry of Commerce. On 7th November, 2012, the company adjusted to register the third paid up ESOP for the directors and employees from THB 172,287,750 to THB 173,297,625 at the Department of Business Development, the Ministry of Commerce.


Annual Report 2012 Jubilee Enterprise Public Company Limited

19

The company has rented the space in shopping mall to expand the branches nationwide totally 18 branches and 1 was closed down. These beanches are as follows;

The available branch operated in 2012

1. Tesco Lotus - Prachinburi

2. ZEN – Central World

3. Robinson - Suphan Buri

4. Central Plaza – Rama IX

5. Central Plaza – Rama III

6. Robinson – Mega Bangna

7. Central Plaza – Udon Thani

8. Central Plaza – Pattaya Beach

9. Mega Mall - Bangna

10. Robinson – Chiang Mai

11. Secon Square - Bang Khae

12. Central Plaza - Rattanathibet

13. Central Plaza – Surat Thani

14. Robinson – Surat Thani

15. Tesco Lotus - Sadao

16. Robinson – Lampang

17. Central Plaza – Lampang

18. Tesco Lotus - Phisanulok

Branch closed down in 2012 1. Central Plaza – Rama III


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Timeline and Milestone in brief is as follows;

Year

Incident

1993

Mr. Viroj Phonprakit has founded the company called “Jubilee Enterprise Company Limited”. The registered capital was the sum of THB 10,000,000 which was equal to 100,000 shares while the par value was of 100 baht. The company expanded the branch in the form of the shop counter to sell the diamond firstly at Yaohan Department Store. This deemed as the first phenomenon for diamond sale at the shop counter in Thailand. The company has started to carry on its business as franschise in Bangkok and surrounding provinces and central region. It has expanded to the North and the Northeast region later on which was the pioneer to sell the diamond with this marketing. Overall the company had 10 branches. The company adjusted the marketing strategy and started to expand the shop counters at the big mall such as Central Plaza, Robinson, The Mall and the local department stores totally 15 branches. The company, in partnership with the credit card company, started the marketing plan to display and sell the products through the newsletter. This deemed as the first time for the diamond industry using this marketing plan. In order to expand the market, the company opened the additional shop counter at the mall and the hypermart such as Tesco Lotus and Bic C at the end of 2003 totally 37 branches. The company had 45 branches in total nationwide. The company won the “Super Brand Winner 2005” awarded by the Reader’s Digest in the catergory of Best Customer’s Satisfaction. The company had 50 branches totally. The company standardized the customer on the creditability of the diamond by granting the certificate from the international institute that is internationally well-known. The certificate will be granted at least for the one-carat-diamond by the Hoge Raad voor Diamant (HRD) issued by the Diamond High Council, Belgium in order to enhance confidence of the customer more than previously. The company has founded the HRD firstly in Thailand where it is the gem center to sell diamond certified by HRD only at Pan Pacific Hotel, Bangkok. The company, in partnership with the Krungthai Leasing Co. Ltd. (the subsidiary of the Krung Thai Bank Group) started to accept the payment in form of installment for the diamond purchase through all branches of the Krung Thai Bank.

1994 1995

1997 2001 2003 2005 2006 2007

On 26th November, 2007 at the Extraordinary General Meeting of Shareholders No. 1/2550, the Board had resuolution to increase the capital from THB 10,000,000 to THB 40,000,000 while the par value was of 100 baht.


Annual Report 2012 Jubilee Enterprise Public Company Limited

Year

21

Incident The company bought the inventory from Jubilee Diamond Partnership where it had commercial relationship with. Mr. Suntorn Pornprakit, the manager of Jubilee Diamond Partnership, who is the father of Mr. Viroj Phonprakit, the Deputy Chairman of the Board of Directors and the President of the Company, granted the right to enjoy the building belonged to the Jubilee Diamond Partnership for the company to open the new branch at Sapan Lek selling the diamond under the brand called “Diamnond Center” and “Jubilee Diamond”.

2008

The company started to sell the diamond certified by the GIA (Gemelogical Institute of America) in order to enhance the customer’s options and quality confidence. On 30th April, 2008 at the Extraordinary General Meeting of Shareholders No. 1/2551, the Board had resuolution to increase the capital from THB 40,000,000 to THB 120,000,000 while the par value was of 100 baht. On 5th June, 2008 at the Extraordinary General Meeting of Shareholders No. 2/2551, the Board had resuolution to transform the company from private entity to public entity and adjusted the par value of the share from 100 baht to 1 baht instead. On 20th June, 2008 at the Extraordinary General Meeting of Shareholders No. 3/2551, the Board had resuolution to increase the capital from THB 120,000,000 to THB 175,000,000 by way of issuing the common share at the amount of 55,000,000. To clarify, the company allotted 15,000,000 shares in order to offer to sell the share to the specific investors, 35,000,000 shaes was for the public and the last 5,000,000 shares was for the ESOP issued by the company for the directors and employees. The capital was already paid up at THB 120,000,000. On 2nd September, 2008, the K-SME Venture Capital Co. Ltd., under the supervision of the Khao Kla Venture Capital Management Co., Ltd. bought 15,000,000 shares catergorized as specific investor resulting to the addition registered capital totally THB 135,000,000. On 31st December, 2008, the company had 60 branches in total.

2009

On 9th November, 2009, the company has entered into MAI stock market. On 31st December, 2009, the company had 73 branches in total.

2010

During 28-30th October, 2010, the company firstly issued the ESOP to the directors and employees (according to the Extraordinary General Meeting of Shareholders No. 4/2551 for the Jubilee Enterprise Public Company Limited dated on 27th August, 2008). The meeting had resolution to issue ESOP for the amount of 4,997,5000 shares at the par value of 1 baht. On 5th November, 2010, the company registered to change the amount of the paid up capital because of the first ESOP provided for the directors and employees from THB 170,000,000 to THB 171,121,500 at the Department of Business Development, the Ministry of Commerce.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Year

Incident The company expanded the additional braches from 73 to 78 dated on 31st December, 2010.

2011

During 28-30th October, 2011, the company secondly issued the ESOP to the directors and employees (according to the Extraordinary General Meeting of Shareholders No. 4/2551 for the Jubilee Enterprise Public Company Limited dated on 27th August, 2008). The meeting had resolution to issue ESOP for the amount of 4,997,5000 shares at the par value of 1 baht. On 9th November, 2011, the company registered to change the amount of the paid up capital because of the first ESOP provided for the directors and employees from THB 171,121,500 to THB 172,287,750 at the Department of Business Development, the Ministry of Commerce. The company expanded the additional braches from 78 to 79 dated on 31st December, 2011.

2012

15th March 2012, the company won “Bai Po Business Awards by Sasin� with 3 categories : 1 Quality 2. Innovation 3 Branding. During 28-30th October, 2012, the company secondly issued the ESOP to the directors and employees (according to the Extraordinary General Meeting of Shareholders No. 4/2551 for the Jubilee Enterprise Public Company Limited dated on 27th August, 2008). The meeting had resolution to issue ESOP for the amount of 4,997,5000 shares at the par value of 1 baht. On 9th November, 2012, the company registered to change the amount of the paid up capital because of the first ESOP provided for the directors and employees from THB 172,287,750 to THB 173,297,625 at the Department of Business Development, the Ministry of Commerce. 22 November 2012, the company won the SET Awards 2012 in Best Investor Relations and Outstanding Company Performance. The awards initiated by the Stock Exchange of Thailand in conjunction with the Money and Banking Magazine The company expanded the additional branches from 79 to 95 dated on 31st December, 2012.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Vision To create more values with precious diamond jewelry of the company for all people with innovations on product design, counter brand and display management with efficiency and material selection with development of manufacturing technologies; Mission

1. To be Thailand’s leading retailer of diamond jewelry

2. Value added to the organization, shareholders and stakeholders.

3. To continuous develop product quality and professional service

4. To create brand and image to worldwide

5. To develop human resources continually

6. To focus on Good Corporate Governance, Risk Management, Internal Control

Purpose of business The company aims to lead the business on diamond and jewelry retail in Thailand by developing the diamond purchase with the transparent manner; disclosing the correct information to the customer and adapting the customer’s attitude to concentrate the work elaboration in order to meet with internation practice. Moreover, the company tends to emphasize branding called “Jubilee Diamond” with confidence and strength.

Souce of revenue Source 1. Diamond Jewelry 2. Carat Diamond 3. Service fee Total

(Unit: Million Baht)

2010

2011

2012

Amount Ratio Amount Ratio Amount Ratio Million Percentage Million Percentage Million Percentage 614.03

89.10

793.19

89.39 1,089.34

88.84

69.66

10.11

88.36

9.96

131.05

10.69

5.43

0.79

5.77

0.65

5.84

0.47

689.12

100.00

887.32

100.00 1,226.23

100.00


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Annual Report 2012 Jubilee Enterprise Public Company Limited

RISK FACTORS During 2012, Thailand passes the huge inundation and accepted to pay minimal wage at 300 baht per day. The Jubilee Enterprise Public Company Limited was necessary to be aware of risk management in order to mitigate the impact that might be arisen regardless from inside or outside firm. Certain risks are regarded as the priority issue for carrying on the business which can be considered and clarified below: 1 Risk based on the economic situation Due to the year 2009-2012, many countries faced the economic crisis such as the subprime in the U.S. which affected extensively and constantly around the world. Thailand still highly depended on exportation as shown in the ratio of exportation per GDP which was approximately 60%. Especially the ratio of exportation in the U.S. was approximately 25% based on the gross exportation during the year 2007-2011. The economic recession in the U.S. affected to the manufacturer and exporter and collapsed their businesses eventually. This led to the growth of unemployment and a drop of household income which affect to the declination of the domestic purchasing power consequently. Moreover, Thailand accepted to increase the minimal wage per day resulting to the collapse of the SME business due to the unacceptable additional cost while people distrusted the economic stability. Because of these given factors, people saved money rather than spending while this affected to the domestic demand including the demand of jewelry which is the main products of the company. Therefore, the growth of company was full of ups and downs in this particular period. However, the Board of the company had the policies to minimize such impacts. Those policies were such as inventory management, applying the marketing tool to meet the customer’s demand, conducting the marketing research to study the customer’s demand and behavior, and having the sale promotion in order to draw attention of the customer. In terms of cost and relevant expenses, the company negotiated with the supplier including to manage and control the sale cost as it deemed appropriate. 2 Risk based on business that has high cost and moveable The products of the company are diamond and jewelry that have high cost and movable; therefore, it is the risk that the company has to be careful for the espionage from outsider and insider. Moreover, the company has to bear the risk for its loss because of the diamond transit from one to another place. For the risk caused by the outsider such as espionage or the risk from the fraud conducted by the insider of the company, i.e., No record and replacement for the purchase of diamond; or the espionage conducted by the insider; or sale of the artificial diamond while the authentic one stolen by the insider. The company has the policies and rules to perform its business focusing the purpose of “strict protection” in all process and areas. For the example, the company has policy to store the product in the safe after the work, the inventory will be recorded in the in-and-out item and the computation of the completeness and correction shall be made at the end of the day always. Moreover, the company stores the material in the strong room inside the headquarter of the company where the CCTV will be monitored 24 hours together with the heat detector system.


Annual Report 2012 Jubilee Enterprise Public Company Limited

25

For the internal examination, the company randomly examines the products at certain branches where the audit and district manager check the stock at least 2 times a month while the products at the strong room at the headquarter is examined at least once a month. Moreover, the company has the policy to transfer the products to other branches constantly through the headquarter without notice and information. Therefore given examples previously are seldom happened. Moreover, the company seeks the remediation in case of damage existed, such as conflagration and espionage by way of insurance dated on 31st December, 2012. The ratio between the sum insured per the net inventory is approximately 80%. For the risk of transfer, every transfer regardless from one to another place or from the headquarter to the branches shall be only accepted and allowed by the manager of the Sale Administration Department. Direct transfer between the branches is not allowed. All the process shall start from the headquarter only while the Sale Administration Department will manage and control all the transfer from the origin to the destination. Record of transfer is needed to make including to endorse the authorized signature for the transfer confirmation at the Warehouse Department. All transfers will be insured at all time while the value of each transfer shall not be exceeding THB 150,000 per time. Such value of the insurance is subject to the 100% claim. Therefore, if the loss during the transfer is existed, the company’s income shall not be affected substantively. The company has policies and rules to control entry and exit of the strong room substantively as follows; • To enter the warehouse, it needs key and magnet card possessed by the manager of the Warehouse Department only. No employees and directors can enter freely. • To enter the strong room (located in the warehouse), it needs 2 keys inserting at the same time together with the combination lock. The keys and the combination lock will be possessed separately by the three managers in different department who have no relationship with each other and are not acting as the director or the major shareholder. Such method is regarded as internal control for the strong room in order to check and balance. To clarify, the strong room cannot be entry by one person but three persons who have no relationship at least. Either employees or directors cannot come in this strong room freely. In addition, the combination lock will be changed at least once a year. Moreover, the CCTV is attached inside the strong room. Apart from the above, the company has other internal control systems to prevent the risk. Moreover, the Audit Committee has provided the Internal Audit to conduct the Walk-through examination with the employees and directors whether they have followed the company’s rules. Such Walk-through examination will be conducted every quarter and reported to the Audit Committee.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

3 Risk based on the difficulty in quantity and quality examination

The value of the diamond is based on the 4C which is color, clarity, cut and carat. Although the feature of each diamond may be slightly different, the value is way too different. This is difficult to examine the true value of the company’s inventory because the diamond may be changed and replaced among the lower grade of diamond as indicated in the label. Without the best practice of internal control, it may affect to the true value of the company’s inventory and cost including the deviation of the company’s income as shown in the balance sheet. However, for the risk of diamond replacement and the true value of the diamond as said above, the company has policy and rule to control the product and quality in details below: 1. The company shall provide the serial code for material procurement in advance. Each serial code will be categorized the feature of material applying for all kinds of diamond regardless there is no certificate. 2. The company shall record the material by examining all diamonds purchased by the company’s expert prior to accept the product; thoroughly categorizing the material based on the feature of the diamond according to the serial code after the diamond is in possession consistent with the purchase order and the examination is made; and keeping such record at the Quality Examination Department. 3. After categorizing the material based on serial code, each material shall be stored at the strong room. Such storage shall be followed with the category and serial code. 4. For production process of the finished goods, the company shall code each goods in the computer system which identifies the material that is needed to use as categorized in the serial code thoroughly. 5. In term of material disbursement for production, the Production Department shall provide the disbursement form as provided. The number of jewelry that is going to be produced, the serial code of material and the number of the quantity shall be filled in the form for each production. 6. After the factory delivers the finished goods that is passed the examination including the feature whether it is met with the requirements, the Production Department shall code such finished goods, print the certificate from the system indicating clearly the quality, quantity and weight of the diamond together with the image and store it at the strong room in order to transfer to the destination accordingly. 7. The jewelry that is ready to sell shall be labeled indicating the serial code and the certificate together with the image attached so that the tracking will be easier to make. 8. For auditing, the company has provided the Accounting and Finance Department checks the inventory which is material and jewelry possessed by the Warehouse and the Production Departments at least once a month. 9. In term of returning the product from the customer, once the sale staff receives the product from the customer, such product shall be returned to the headquarter in order to examine the feature of the diamond before reproduction.


Annual Report 2012 Jubilee Enterprise Public Company Limited

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The above rules are set to control the quality of the diamond no matter there is a certificate provided by the international institute or not; or it is the loose diamond or carat diamond or diamond jewelry. The diamond where the certificate attached and issued by the international institute is more helpful to examine; namely, all diamonds from HRD will be kept and sealed in the box delivered from abroad directly. Similarly, the serial number of the diamond from GIA will be marked by laser at the edge of the diamond in order to protect the replacement and to identify the particular diamond with accuracy and clearness so that the examination can be made easier. Moreover, the internal control and audit systems as well as the compliance as provided in 1.2 for the employees and directors can enhance the effectiveness of internal control system. Given the policies and rules, the company strongly believes that the value and quality of the product shown in the balance sheet is reasonably correct and accurate. 4 Risk based on pricing and discount Our sale is mainly focused in retail to the individual customers because the price of the diamond and jewelry will be up to the feature of the diamond needed to have expertise and experience to indicate such feature. More important, the price is also up to the customer’s satisfaction; therefore, pricing and discount cannot be applied in the same basis. The price of similar jewelry cannot be the same or compatible. It is difficult to examine whether the income will be recorded accurately while the primary rate of profit from individual jewelry is highly fluctuation. As a result, it is uncertain to seek the integrity of the profit and income. However, the company concerns about the pricing and discount; therefore, it creates a policy to set the threshold for pricing and discount based on product category applied to all branches. No salesman can determine the price nor provide the discount independently. In term of pricing, the threshold shall be based on product category according to the cost, design, form including the types and price of the material. This shall be set as a standard applying for all branches. The policy of pricing shall be determined and final by the Chief Financial Officer or “CFO�. If the pricing is not appropriate, it could affect either the sale target when the pricing is too high or the primary rate of profit when the pricing is too low. This also will be regarded as the performance indicator for the CFO evaluated by the President and Board of Directors. In term of discount, it shall be inverse variation with the rate of commission; namely, the commission shall be low if the discount is very high and vice versa. Moreover, the discount rate is arranged by tiers providing the maximum ceiling for the employees and directors shall discount in different tiers. The maximum rate of discount shall be provided by the President with the


28

Annual Report 2012 Jubilee Enterprise Public Company Limited

permission from the Board of Directors. However, such maximum rate of discount shall not be lower than the original cost. In addition, the company has no policy to pay the remuneration in the form of commission to the directors and other employees but salesman. For the risk of correctness and completeness of the company’s income after the discount can be arisen. For the example, the salesman sells the diamond without offering the discount to the customer for X baht but returns to the company only Y baht while the rest of income is embezzled with its personal interest. The net income of the company, as a result, may be deviated because of the discount policy. Nonetheless, the company has realized this risk very well and taken action to protect such risk by way of issuing the tax invoice and receipt as well as the warrant card indicating the sale price at all times. Furthermore, the company has recorded every purchase of each customer in the customer database in order to collect the points and reach to the prize while the customer can access this information as well. Hence, this internal control system, which is designed to get the correct and accurate information related to the diamond purchase from the customer directly and respond to the purpose of examination from the third party, can minimize the risk.

5 Risk based on obsoleteness of the diamond jewelry inventory The most important asset of the company is the inventory. On 31st December, 2012, the net asset of the company is equal to THB 479.42 million or equivalent to 64.21% of the total asset and 96.03% of the shareholders’ allotment. As the consumer still depends on the value of the diamond and design of the product; as a result, the excessive in-trend design may be a problem when it is out-to-date. The company has to unusually discount and affect to the profit of the company consequently. However, the Board has been carried on its business more than 40 years and understood the diamond jewelry industry very well. The Board, then, emphasizes to the design development of the jewelry and the customer’s demand. The company has kept and analyzed the previous sale record, surveyed the customer’s opinions and updated the trendy fashion. The company has also set up Product Development Department and hired the full-time designer to design the product that meets with the customer’s demand maximally. The design is simply classic but focusing the quality of the diamond mainly; therefore, the issue of obsoleteness of the design is not the problem. Moreover, the company can recycle and reproduce the jewelry which can reduce the cost of production around 3-5% and have less impact for the profit gain.


Annual Report 2012 Jubilee Enterprise Public Company Limited

29

At the same time, the company has managed the jewelry inventory effectively. The company has policy to protect the risk of each product by inserting the code over the product and collection, date of production and year of design in the database and the price tag in order to estimate what kinds of product are in the focus of the consumer or which category of the product is still left for inventory so that it could plan to reproduce if the demand is high. If any product has low demand or it is stored overtime to transfer from one place/ province/ region to another, the company shall have the policy to manage the inventory reproduction; call the salesman all branches to estimate the consumer’s demand; report and return the inventory in each design to the company every month so that the directors can have adequate information to make the right choice to meet with the customer’s demand maximally and mitigate the risk. Moreover, in case the jewelry cannot meet with the customer’s demand, the company shall redesign which may have to invest the cost of production around 3-5% without the cost of material.

6 Risk based on excessive dependence on directors and experienced and skilled personnel

The company has been carried on its business under the name of “Jubilee Enterprise” more than 20 years managed by the shareholders and Mr. Viroj Phonprakit, acting as the main Director and Chief Executive Officer “CEO”. With knowledge, skill and experience related to diamond and diamond jewelry, such as material supply, channel expansion for distribution and market expansion, are the key factors that make the company’s performance and financial status has been growth constantly. It deems that the main director contributes the risk in administration and management. However, the company has followed the guideline for management by assigning the duties and responsibilities to any other directors and employees instead. The company has set up the good information collection and database including to exchange the relevant information between the directors and employees frequently. Training, awareness raising and personnel investment have been provided in order to understand the company’s goal and purpose and to avoid this risk when it is shifted to another.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

7 Risk based on investment expansion

The company has the plan to expand the branch in the future for the customer in Bangkok and surrounding provinces in order to cover and respond the demands of all groups of customer. The shop decoration and the revolving fund have been invested in the new branch. However, the company may face the risk from such investment if the business cannot reach to the goal as set. In addition, it depends on certain factors such as the economic situation in Thailand, the rate of interest and inflation, customer’s behavior in each province, etc. In order to avoid the risk, the company has the investment plan analyzed the market and the appropriateness for investment by the Business Development Department. This investment plan will be presented to the Board in order to seek the possibility of investment including to open the new branch in the shopping malls targeted many groups of customer. Those shopping malls are such as Central Plaza, Robinson, the Mall, Tesco Lotus and Big C.

8 Risk based on currency exchange

The company has imported the material from abroad; therefore, the price offering and payment will be made with the US currency mainly. Although, the material is imported from abroad, all products will be distributed only in domestic. The rate of importation is approximately 70% from the gross materials. Moreover, the price of diamond bought from the domestic distributor will be made in the U.S. currency according to the traditional trade. If the value of the U.S. is low, it could reduce the cost of the company and vice versa. In 2012, the company gained the profit for the currency exchange around THB 1.98 million. The company has a policy to protect the risk based on currency exchange by way of Forward Contract. It aims to prevent the risk from currency exchange around 50% to 100% of the gross purchase from abroad. It is noted that the company has no policy to speculate the profit from currency exchange. The Forward Contract will be subject to the Board’s determination. The Board’s determination will be based on the currency exchange which is always followed up and the impact from such exchange. In addition, the Forward Contract will be made immediately when it receives the product from the Sigthholder and records the account payable in the company’s account.


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9 Risk based on the price adjustment of material

The structure of the average cost is consisted of 3 parts which are 1) diamond as equaled to 65-75% of the cost of the sale; 2) gold as equaled to 15-25% of the cost of the sale; and 3) the production fee as equaled to 3-5% of the cost of the sale. This depends on the design of each product. However, a diamond and gold are significant items that could affect to the cost of the company. The more cost of material is up, the more cost of the company is growing.

USD Per Carat

The price of the diamond will be deviated in the global market. The company is then unable to control the certain value of the cost. The price of the diamond during the 1st quarter at the year 2010 to the 4th quarter of the year 2012 is as follows;

From the above table, it shows that the price of the diamond at 1 carat or upper will be deviated more than the small size of diamond. Presently, the company has managed the risk by storing the diamond at the size of 0.005 to 0.30 carat categorized in the non-substantial impact. For the diamond at 1 carat or upper, it will be stored not exceeding than 15% of the gross inventory of the company. On 31st December, 2012, the company has the diamond at 1 carat or upper as equaled to 3.73 of the net inventory. If the deviation of the diamond’s price is existed, the Board believes that the company can manage the impact related to structure of the cost and the profit capacity of the company from such deviation. For the example, such management can either gain more profit if the price of the material is getting lower or adjust the structure of the cost if the material price is getting high.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

The company uses 18K gold for the jewelry while the price of the 18K gold will be deviated according to the price of the 99.99% pure gold. The 18K gold combines between 75% of gold and 25% of other metals so that it can mold the jewelry. Previously, the price of the 99.99% pure gold in the global market has been changed as follows; In addition, the price of the 99.99% pure gold in the global market has been changed substantively since 2006 due to the weakness of U.S. currency. This increased the demand of the gold purchase because it can prevent the risk from the adjustment of the U.S. currency. Once the demand is higher, the price of the 99.99% pure gold is more expensive. The price on June 2010 rose up to USD 1,242.60 per ounce and USD 1,404.90 per ounce later on December in the same year. The price went to USD 1,510.60 per ounce on June 2011 and kept rising up constantly at USD 1,566.40 per ounce later on December in the same year. Finally, the price reached at USD 1,668.70 per ounce on March 2012 while it dropped to USD 1,599.10 per ounce in June. However, the price swung back to USD 1,665.80 per ounce on December in the same year. The company has managed such risk by making an agreement of the price at the date of production when the hire of work is made. The agreed price to produce will be part of the criteria to compute the cost so that the deviation of 18K gold will not cause any impact because the price has been agreed by both parties. Moreover, in term of distribution, the company will price up from the cost of the product; therefore, it does not really affect from the deviation of the material price. 10 Risk based on the supply of big diamondŕšˆ Due to the nature of the rough diamond and cutting technique, the big diamond has less demand than the small ones. Ususally, the order of the big diamond shall be made in advance from the gemcutter and take time more than the small diamonds. Moreover, it may be difficult to find the diamond as big as it demands in the market. In addition, the order to purchase the diamond bigger than 1 carat shall be made in advance greater than or equal to 3-4 months. However, 90% of the order to purchase the diamond in the company is less than 0.70 carat which can be available generally and meet with the demand of the market. Hence, the company has never affected from the shortage of a big diamond before.

11 Risk based on the lease contract for the branch

On 31st December, 2011, the company had 95 branches focusing the individual customers and retail purchase. These branches were located in the rental area belonged to the company totally 51 branches and another 14 branches were belonged to the franchise distributors and located at the shopping mall and the


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hypermart in Bangkok, surrounding provinces and other provinces. The company then had to rent the area from the lesser in form of the lease contract; therefore, this could be the risk in case that the lease contract cannot be renewed or the lesser wishes to change the condition or the rate of the rental in the contract. The company may have to pay higher than previously. For the other 30 branches, they were as the GR Counter which have no risk in the term of the contract. On 31st December, 2012, the company had rental areas for 51 branches with the 3-years contract and monthly paid. This could be a risk to renew the contract while the other 14 branches might have the same trouble when they were run by the franchise distributors who made a lease contract without the direct involvement of the company. However, the following facts that 1) the company has behaved itself to be a good lessee constantly; 2) the company has been the top lessee among the others in the jewelry industry; and 3) the company has had many branches nationwide have put the company in the position to bargain with the lesser leading to the risk prevention.

12 Risk based on the issuance of the Employee Stock Option (ESOP) for the directors and employees

From the Extraordinary General Meeting of Shareholders No. 1/2551 dated on 27th August, 2008, the Board had resolution to issue the common share (“ESOP�) which indicated the specific holder and non-transferable to the directors and employees for 5,000,000 units. The par value was of 0 baht while it was longed for 5 years from the date of issuing and offering. ESOP 1 unit could buy 1 common share because the value of the ESOP was equal to the par value of the share. The cost to pay higher than the holder of the ESOP and the reduction price of the share could possibly happen for the investor. If the holder of ESOP sells its rights, the investors may affect in EPS Dilution and Control Dilution. This made the investor in the position to gain less profit and ownership of the company or equivalent to 2.86%. The percentage was computed from all shares after the IPO which were totally 170,000,000 shares. For the of Price Dilution, it had no impact because the common share of the company has not yet been registered as a stock in the MAI stock market; therefore the market price has not been set. However, if the market price is needed to competence from the IPO, it shall affect the maximum price from exercising the ESOP as equaled to 1.04%.

However, the said ESOP was provided with the condition to exercise within 1 year from the date of issuing and offering. The holder of the ESOP can exercise its rights for the first time not exceeding 25% of the gross ESOP that each holder shall gain distributed by the company. Every 12 months after the first year, the holder may exercise its ESOP not exceeding 50%, 75% and 100% % of the gross ESOP that each holder shall gain distributed by the company respectively. This aimed to protect the additional shares in the beginning when the company got approval to enter into the MAI stock market because the ESOP could be


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Annual Report 2012 Jubilee Enterprise Public Company Limited

converted and become the common share if all holders wish to convert. As a result, it might reach to 5,000,000 shares or equivalent to 2.94% of the whole shares after the IPO and the exercise of the ESOP.

13 Risk based on the adjustment to exercise the Employee Stock Option (ESOP)

In the future, the company may adjust the exercise price and ratio of the ESOP due to the reduction of the par value, dividend transformation to become a common share, etc. For the adjustment of exercise ratio of the ESOP, any fraction lower than 1 share arisen from the adjustment shall be pulled out. For the adjustment of exercise price, if the new exercise price is lower than the common share, the price of common share shall be superseded. This could encourage the holder of the ESOP to buy less common share of the company.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Shareholding Structure Shares of the Company

As at December 29, 2012, the company’s registered capital of 175,000,000 THB, with paid up capital of 173,297,625 THB at par value of 1 THB per share

Major Shareholder

10 Major shareholders’ report as of 29 December 2012 :

Shareholders

Paid Up Capital Shares

Percent

Mr. Viroj Phonprakit

72,279,150

41.71

Mrs. Suvatana Tulayapisitchai

12,186,750

7.03

Mr. Monchai Leesirikul

7,000,000

4.04

Ms. Unyarat Pornprakit

6,186,750

3.57

Mr. Akarapong Pornprakit

6,005,625

3.47

Ms. Ornrat Pornprakit

5,503,750

3.18

Mr. Jarasphan Panchasap

4,000,000

2.31

K SME Venture Capital

3,515,600

2.03

Mr. Kachen Benjakul

2,504,800

1.45

Mr. Naphat Panchakunathorn

2,050,000

1.18

Mrs. Chantana Luekajornchai

2,050,000

1.18

Dividend Payment Policy

The company’s dividend payment policy to shareholders with twice a year at the rate of not less than 60% of net profit after corporate income tax and legal reserves. However, this depands on the economic situation and the company operation performance.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

MANAGEMENT STRUCTURE The management structure of the company composes of 3 committees which are the Board of Directors, the Audit Committee and Executive Committee. On 31st December, 2012, the organizational structure of the company is as follows; Board of Directors Advisor of Board of Directors

Corporate Secretary Audit Committee

Executive Committee

Internal Audit Office

Chief Executive Officer Senior Deputy Chief Executive Officer

Chief Operating Officer Director Marketing Department

Director Production Department

Chief Financial Officer Director Sales Department

Director F&A Department

Director HR Department

Director Purchasing Department

Criteria of the committee

The criteria of the committee is set in accordance with the Securities and Exchange Commission (SEC) as follows; • Of the total number of board members, at least one-third and no fewer than three persons must be independent directors. • The Audit Committee shall have at least 3 persons

Definition of committee Executive means the authorized person who can manage and receive full time salary as appointed to be the Director Non-executive means the director who is not sitting as the executive and does not receive the full time salary Independent committee means the director who is not sitting as the Executive and qualified according to the SEC


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Qualification of the Independent Director The Independent director of the company shall meet the qualification and have independent authority according to the Securities and Exchange Commission and Stock Exchange of Thailand; namely, 1. It shall hold shares not exceeding 0.5 per cent of the total number of voting rights of the company, its parent company, subsidiary, affiliate, or other juristic person who may have conflict, including the shares held by related persons of the independent director; 2. It shall neither be nor have been an Executive, employee, staff, or advisor who receives salary, or a controlling person of True, its parent company, subsidiary, affiliate, or other juristic person who may have conflict unless the foregoing status has ended not less than two years prior to the date of appointment; 3. It shall not be a person related by blood or registration under laws i.e. father, mother, spouse, sibling, and child, including spouse of the children; of executives, major sharehold ers, controlling persons, or persons to be nominated as executive or controlling persons of the company or its subsidiary; 4. It shall not have a business relationship with the company, its parent company, subsid iary, affiliate, or other juristic person who may have conflict, in the manner which may interfere with his or her independent judgement, and It shall neither be nor have been a major shareholder, a non-independent director or an executive of any person having busi ness relationship with the comapny, its parent company, subsidiary, affiliate, or other juristic person who may have conflict unless the foregoing relationship has ended not less than two years prior to the date of appointment; 5. It shall neither be nor have been an auditor of the company, its parent company, subsidiary, affiliate, or other juristic person who may have conflict, and not being a principal share holder, or a non-indeoendent director, or an executive, or partner of an audit firm which employs auditors of the company, its parent company, subsidiary, affiliate, or other juristic person who may have conflict unless the foregoing relationship has ended not less than two years from the date of appointment; 6. It shall neither be nor have been any professional advisor including legal advisor or financial advisor who receives an annual service fee exceeding two million baht from its parent company, subsidiary, affiliate, or other juristic person who may have conflict, and neither being nor having been a principal shareholder, or a non-indeoendent director, or an Execu tive, or managing partner of the professional advisor unless the foregoing relationship has ended not less than two years from the date of appointment; 7. It shall not be a director who has been appointed as a representative of the company’s director, major shareholder or shareholders who are related to the major shareholder; 8. It shall not have any characteristics which make him/her incapable of expressing indepen dent opinions with regard to the company’s business affairs. The independent director may be assigned by the Board of Directors to take part in the business decision of the company, its parent company, subsidiary, affiliate, same-level subsidiary, major shareholder or other juristic person who may have conflict on the condition that such decision must be a collective one.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Structure of the Board of Directors In 2012, the company had 5 Independent directors which is more than one-third of the whole Board in order to ensure checks and balances. In addition, each Director in the current Board is the skilled and experienced expert. The 8 Directors are devided as follows;

- 3 Executives - 5 Independent Directors Name

Position

1. Mr. Manu Leopairote

Chairman of the Board / Independent Director 2. Mr. Amnuay Nakrachata- Chairman of the Audit Committee / amorn Independent Director 3. Mr. Pirote Maleehorm Audit Committee / Independent Director 4. Ms. Zonwa Denmeka Audit Committee / Independent Director 5. Mr. Sahasroj Rojmetha Independent director 6. Mr. Viroj Phonprakit Vice Chairman / President of Executive Committee / Chief Executive Officer 7. Mrs. Suvatana Director / Deputy Senior Chief Executive Tulayapisitchai Officer 8. Ms. Unyarat Pornprakit Director/ Chief Financial Officer

Length of term

Amonth of share Ratio of holdings* share holding

2008 - present

150,000

0.09

2008 - present

28,800

0.02

2008 - present

0.02

2008 - present 2008 - present 2008 - present

32,500 75,000 72,279,150

0.04 41.71

2008 - present

12,186,750

7.03

2008 - present

6,186,750

3.57

*Updated at the record date on 29th December, 2012

The company has corporate secretary and the advisor who provides the suggestion related to regulations and relevant lawa that the Board shall know and follow for its own business including to coordinate to ensure that the Board’s resolution will be complied.

The Board’s responsibilities The directors of the company shall have power and responsibilities to carry on their business in line with the law, purpose and regulation of the company as well as the shareholders’ resolution with integrity and due diligence as follows; 1. The Board shall determine goal, direction, policies, strategies, and budget of the Company and ensure the Management’s compliance with the policies effectively unless the Board shall get approval from the shareholder’s meeting prior to perform such as capital increase and decrease, debenture issuance, business dissolution or partial or whole take-over, business purchase or acquisition, adjustment of memorandum or regulation, etc.


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2. The Board shall manage the company with knowledge, ability and experience to maximize the benefit of the company in order to accord the law and regulations prescribed by the SEC and the SET, purpose and regulations of the company as well as the shareholders’ resolution with due diligence in order to protect the company’s interest and shareholders. 3. The Board shall consider the management structure and appoint the Executive Committee, the Audit Committee, the chairman of the Executive Committee and other committee if it deems appropriate. 4. The director shall not operate any business which has the same nature as and is in competition with the business of the company or become a partner in an ordinary partnership or become a partner with unlimited liability in a limited partnership or become a director of a private company or any other company operating business which has the same nature as and is in competition with the business of the company, either for his or her own benefit or for the benefit of other persons, unless he or she notifies the meeting of shareholders prior to the resolution for his or her appointment.

Appointment, Resignation and Termination of the Director The regulation of the company provided that the director shall be appointed at the shareholder’s meeting. The director greater than or equal to 5 persons and more than a half of the Board shall reside in Thailand. In the case of a vacancy in the board of directors for reasons other than the termination of the term of office, the board of directors shall elect a person who has the qualifications for the next meeting. Any director wishing to resign from office shall submit his or her resignation letter to the company and the resignation shall be effective from the date on which the company receives the resignation letter. At every annual ordinary meeting, one-third of the directors shall vacate in proportion. If the number of directors is not a multiple of three, the number of directors closest to one-third shall vacate. In addition, a director who vacates office under this section may be re-elected. A directors shall vacate office upon: 1) resignation; 2) death; 3) being disqualified or being under any of the prohibitions under section 68 of the Public Limited Companies Act, B.E. 2535 (1992); 4) removal by a resolution of the meeting of shareholders under section 76 of the Public Limited Companies Act, B.E. 2535 (1992); 5) removal by a court order. 6) Subject to (1) - (5), A director shall terminate the term when the director have characteristics indicating a lack of appropriatenessin respect of trustworthiness in managing business whose shares are held by public shareholders as specified in Section 89/3 of the Securities and Exchange Act B.E. 2551 (2008) notification of the SEC and shall not remain in his directorship in the company according to Section 89/4 in the same Act.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Duties and responsibilities The company has devided duties and responsibilities of the chairman of the Board and the president clearly in order to check and balance each other. The chairman will be an independent director and has no relationship with the Executive Committee.

Corporate Secretary In order to follow the good governance of the company and the the Securities and Exchange Act (No. 4) B.E. 2551 (2008), the company, then, has appointed Ms. Patcharawalai Atichathipjinda as the corporate secretary of the company having responsibilities according to the said Act as follows;

Duties and responsibilities of the Corporate Secretary 1. preparing and keeping the following documents: (a) a register of directors; (b) a notice calling director meeting, a minute of meeting of the board of directors and an annual report of the company; (c) a notice calling shareholder meeting and a minute of shareholders’ meeting; 2. keeping a report on interest filed by a director or an executive; 3. performing any other acts as specified in the notification of the Capital Market Supervisory Board; 4. submitting a copy of report on interest in relation to management of the company or the subsidiary to the Chairman and the Chairman of audit committee within seven business days from the date on which the company has received such report.

COMMITTEES The company has appointed the 2 committees in order to have duties and responsibilities as specified as follows; 1. The Audit Committee The Directors of the company have been appointed to sit in the Audit committee. They are qualified according to the SEC and SET and consisted of 3 persons. One person among them, at least, is expertise in accounting and finance. On 31st December, 2012, the Audit Committee has 3 independent directors sitting in as follows; 1. Mr. Amnuay Nakrachata-amorn Chairman of the Audit Committee / Independent Director Expertise in accounting and Finance 2. Mr. Pirote Maleehorm Member of the Audit Committee / Independent Director Expertise in Accounting and Finance 3. Ms. Zonwa Denmeka Member of the Audit Committee / Independent Director Expertise in Accounting and Finance In addition, Mr. Warawut Sethanarug serves as the secretary of the Audit Committee and acts as the senior Director of the Internal Audit Department who is subject to the Audit Committee’s supervision.


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Scope of Duties and Responsibilities

The Audit Committee has scope of duties and responsibilities as follows; 1. Financial Report To ensure accuracy, completeness, punctuality and reliability of the financial statements and that sufficient information is disclosed. This can be done by coordinating the auditor and Directors who are in charge of preparation of the quarter and annual financial report.

2. Internal control and audit • To set up the Internal Control and Audit appropriately and effectively and to evaluate the in dependency of both Departments. These departments shall be subject to the Audit Committee’s supervision including the appointment, transfer, termination of the head of Internal Control Department or other departments involving with internal control. The Audit Committtee shall report its performance, update including conclusion / comments to the Board every times in the meeting. • To consider the audit plan and scope of the audit consucted by the internal auditor and external auditor on order to work with consistency and well-organized. 3. Legal and regulation compliance To ensure that the company abides by all relevant SEC, SET and Capital Market Supervisory Board (CMSB) rules and regulations, and other regulations and laws related to the company’s businesses. 4. Auditor selection and nomination To consider, select and nominate any person who is independent to be appointed as the auditor and determine its compensation including to attend the meeting together with the auditor without the management department involved at least once a year. 5. Connected transactions To evaluate connected transactions so they comply with the law and regulations stipulated by the SEC and the SET, and that the transactions are reasonable and benefit the company. 6. Audit Committee’s Report To prepare an Audit Committee’s Report, attached in the company’s annual report, signed by the Chairman of the Audit Committee and composisted of at least the following information: • Opinions on accuracy, completeness and reliability of the company’s financial statements • Opinions on adequacy of the company’s internal control system • Comments the Company’s on compliance with laws on relevant SEC, SET and Capital Market Supervisory Board (CMSB) rules and regulations, or laws applicable to the company’s businesses • Comments on suitability of the auditor • Comments on transactions that may lead to conflicts of interest • Numbers of the Audit Committee meetings and attendances of each of the Audit Committee members


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Annual Report 2012 Jubilee Enterprise Public Company Limited

• Comments or overview observation which the Audit Committee has obtained from performing in compliance with the Charter • Any reports considered appropriate for notifying corporate shareholders and general investors under the scope, duties and responsibilities as assigned by the Board of Directors 7. To execute other tasks as assigned by the Board of Directors, as agreed to by the Audit Committee. In addition, the Audit Committee cannot approve any transactions or persons that may have the conflict of interest or any other conflict against the company. 2. Executive Committee The nomination of the Executive Committee consists of: 1. Mr. Viroj Phonprakit Chairman of the Executive Committee / Chief Executive Officer 2. Mrs. Suvatana Tulayapisitchai Executive Committee / Deputy Senior Chief Executive Officer 3. Ms. Unyarat Pornprakit Executive Committee / Chief Financial Officer In addition, Mr. Yuttana Taepangthong is the secretary of the Executive Committee.

Director who has authority to sign on behalf of the company Based on the Board’s resolution No. 2/2555, the Director who is authorized to sign on behalf of the company is Mr. Viroj Phonprakit together with Ms. Unyarat Pornprakit or Mrs. Suvatana Tulayapisitchai. Two-third of these Directors shall co sign on the document with a company’s seal.

Scope of duties and responsibilities The roles of the Executive Committee are mainly related to operate the business according to the company’s objective and Articles of Association, and resolution of the Shareholders’ Meeting, or policies and any orders ruled by the Board of Directors and to have power to approve or agree any activities in the regular and necessity basis for business operation. Moreover, the Executive Committee shall has responsibility to screen the issues in order to propose to the Board of Directors for approval and/or ratification as ruled in the regulation and order of the Board of Directors including the periodic order of the Board of Directors . The Executive Committee shall also perform following activities propose to the Board of Directors for approval and/or ratification if it deems appropriate for the business operation: 1) Policies, goals and annual plan 2) Annual budget of the company 3) Investment direction, policy and goal for guiding the management team 4) Remuneration structures and welfare for the employees


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The Executive Committee has responsibility to perform following activities under the scope that provides particular issues: 1. To have the power to employ, appoint, terminate or transfer to the lower level or position, abate or reduce the remuneration, award, distribute the bonus for the performance and value of the employees including to dismiss, lay off, and discharge employees at the level and/or position of the CFO and CEO except the Chairman of the Executives; 2. To procure or distribute the asset of the company which is not exceeding to THB 100,000,000 per each time and issue and shall not exceed the annual budget as provided and approved; 3. To do regular transaction with the bank or financial institution which the amont of transaction shall not be over THB 100,000,000; 4. To rent or let out the asset of the company can be performed if the rate of the rent of each asset is not more than THB 20,000,000 per year; 5. To donate for phiranthropic activity can be performed under the sum of THB 500,000 per time and shall not exceed the annual budget as provided and approved; 6. To open or close down the branch of the company; 7. To control and set the direction for the business investment in other business as assigned by the Board of Directors and provided by law; 8. To manage the company’s business according to the purpose, regulation, shareholder’s and/ or the Board of Directors’ resolution with no excuse; 9. To execute other tasks as assigned by the Board of Directors. Such tasks shall be subject to the law and the company’s regulation including the relevant laws. If any member of the Executive Committee involves with any tasks or person that may lead to the conflict of inter est or contradict against the company, its subsidiaries or commercial purpose, S/he shall not approve such tasks and report the Board of Directors in order to meet with the SET’s rules and regulations.

Chief Executive Officer The Chief Executive Officer (CEO) is the supreme position for management appointed by the Executive Committee to be responsible for performing the management plan and budget approved by the Board of Directors strictly, carefully and integritily including to comply with the law, purpose, regulation and the Board’s resolution with the concern of the company and shareholders’ interest and its own duties as assigned by the Board of Directors.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

The Management Team On 31st December, 2012, there were 8 Executives as appeared below: 1. Mr. Viroj Phonprakit Chief Executive Officer 2. Mrs. Suvatana Tulayapisitchai Deputy Senior Chief Executive Officer 3. Ms. Unyarat Pornprakrit Chief Financial Officer 4. Mr. Warawut Settanarag Senior Director of the Internal Audit 5. Mr. Sophon Aroonsuraphonmaythee Marketting Director 6. Mr. Olarn Phirintharangkoon Sale Director 7. Mr. Yuttana Taepangthong Accounting and Fiannce Director 8. Mr. Varit Saimala Purchasing Director

Scope of CEO’s duties and responsibilities The Chairman of the Executive Committee has the scope of duties and responsibilities as follows; 1. To manage the company’s business according to the purpose, regulation, shareholder’s resolution or any policies and orders as ruled by the Board of Directors including to perform some tasks assigned by the Board and to have power to order the employees in all levels and positions. 2. To have power to approve or agree any activities in the regular and necessity basis for business operation as follows; - To have the power to employ, appoint, terminate or transfer to the lower level or position, abate or reduce the remuneration, consider to promote, sanction, award, distribute the bonus for the performance and value of the employees including to dismiss, lay off, and discharge employees at the level and/or position of the manager downward and the sale employees ar all levels and positions. - To procure or distribute the asset of the company which is not exceeding to THB 50,000,000 per each time and issue and shall not exceed the annual budget as provided and approved. - To do regular transaction with the bank or financial institution which the amont of transaction shall not be over THB 20,000,000. - To rent or let out the asset of the company can be performed if the rate of the rent of each asset is not more than THB 10,000,000 per year and shall not exceed the annual budget as provided and approved. - To donate for phiranthropic activity can be performed under the sum of THB 500,000 per time and shall not exceed the annual budget as provided and approved. 3. To submit the following report to the Executive Committee; - Quarter and annual turnover of the company including the goal comparison of the business - Invesment performance including the monthly assessment - Any other performance if the Executive Committee deems appropriate 4. To authorize any person to act as the agent on behalf of the Chairman according to its assignment.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

SELECTION OF DIRECTOR AND MANAGEMENT The Board of Directors consists of at lease five Directors, which not less than half of the number of Directors must reside in the Kingdom and not less than three-forth of the number of Directors are Thai. The Executive Board selection shall be approved from the shareholder’s meeting with the following rules and means: 1. One vote per share is allowed for a shareholder. 2. The director may be voted for either as an individual or a party, depending on the direction of the meeting. In each resolution, a shareholder must speak for a nominee or party with all the ballots he possesses; the segregation of votes among nominees is not permitted. The selected directors must win majority of the votes. In cases where the number of votes are equal, the chairperson has the authority to make the final selection.

DIRECTOR AND EXECUTIVES’ REMUNERATION Cash remuneration The shareholder’s ordinary meeting dated on 23rd April, 2012, the meeting has approved the meeting fee according to the company’s regulation Re: Annual remuneration and meeting fee of the director and advisor of the company which was not exceeding the sum of THB 1,056,000 while the bonus was not more than THB 726,000 per year. The details of meeting attendance and those payments for the direcotors and executives as follows;

Stattistic of the Director and Executives’ attendance in the meeting during 2010-2012 No. 1 2 3 4 5 6 7 8

Name of the Director Mr. Manu Leopairote Mr. Viroj Phonprakit Mrs. Suvatana Tulayapisitchai Ms. Unyarat Pornprakit Mr. Sahasroj Rojmeka Amnuay Nakrachata-amorn Pirote Maleehorm Zonwa Denmeka

Statatistic of attendance in the meeting 2010 2011 2012 5/5 5/5 5/5 5/5 5/5 5/5 5/5 5/5

5/5 5/5 5/5 5/5 5/5 5/5 5/5 5/5

6/6 6/6 6/6 6/6 6/6 6/6 6/6 6/6


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Meeting fee 2010 2011 2012 Meeting fee/time Meeting fee/time Meeting fee/time

Type of directorship Chairman of the Board of Directors Chairman of the Audit Committee Vice Chairman Audit Committee / Independent Director Executives

40,000 14,000 15,000 12,000 12,000

40,000 14,000 15,000 12,000 12,000

50,000 18,000 18,000 15,000 15,000

Executives Executives’ remuneration Salary Bonus Provident Fund Totle

2010 7 7 7

15,031,980 1,741,950 450,959.40 17,224,889.40

2011 8 8 8

17,722,970 3,585,195 495,989.10 21,804,154.10

2012 8 7 8

17,945,763 5,455,516.70 538,072.89 23,939,352.59

The company has set up the provident fund for the Executives and employees and it is their choice to exercise that benefit. The company shall pay at the rate of 3% of their basic salary.

Other remuneration The company has offered the benefit to the Directors and employees in the form of the common share (“Employee Stock Option : “ESOP”) which indicated the specific holder and non-transferable to the Directors and employees for 5,000,000 units in order to appreciate and encourage the Directors and employees for comtributing the achievement of the company previously. The Board of Directors have been distributed the ESOP as follows;


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Annual Report 2012 Jubilee Enterprise Public Company Limited

No.

Name of Director

Number of Unit that has been distributed for ESOP

1 2 3 4 5 6 7 8

Mr. Manu Leopairote Mr. Viroj Phonprakit Mrs. Suvatana Tulayapisitchai Ms. Unyarat Pornprakit Mr. Sahasroj Rojmetha Mr. Amnuay Nakratchata-amorn Mr. Pirote Maleehorm Ms. Zonwa Denmeka

200,000 249,000 249,000 249,000 100,000 155,000 130,000 130,000

Percentage of ESOP

Percentage of gross shares that can be exercised the ESOP after the IPO and rights exhausted

4.00 4.98 4.98 4.98 2.00 3.10 2.60 2.60

0.11 0.14 0.14 0.14 0.06 0.09 0.07 0.07

The rate of distribution of the ESOP shall be based on the duration of work with the company, current position and duties and responsibilities. The duration of work shall be counted since the date of comencement until 31st August, 2009. The fraction of the year shall be deemed as a year unless the duration of work is less than 1 year. It is noted that this shall not apply with the Directors (the duration of work shall be deemed as zero for the Director). In addition, if the any person has been distributed the ESOP for both position of Director and Executive, such distribution shall be abated. Apart from the above, the Directors and the Executives of the company at the level of department upward shall not receive other remuneration but the regular remuneration such as salary, bonus and meeting fee.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

CORPORATE GOVERNANCE The Jubilee Enterprise Public Company Limited has realized the good corporate governance under the SET’s guideline and regulation. The company believes that the good corporate governance can reflect the efficiency, transparency and accountability. This could build the trust and confidence to the shareholder, investor, stakeholder and other relevant parties leading to the growth of the company sustainably. The company has carried good corporate governance constantly with the hope that the Board and management team will comply and adopt with the good corporate governance which is in line with the international standards and enhance its in the future if it deems approapriate and consistent with the dynamic situations. The company has the written policy on good corporate governance, notifies the Directors, Executives and employess to follow in order to build the work culture in the organization and enhances the effectiveness of the management system which is the fundamental of sustainability of the company. The Board, executives and employees have adhered the good corporate governance and disseminated this including the ethical code through the company website at www.jubileediamond.co.th. 1. Role of shareholders The company has realized and concentrated the shareholders’ right and does not violate or deprive shareholders’ rights as the owner of the Company. The company has also encouraged the shareholders to exercise their fundamental rights. Those rights are such as share exchange or transfer of shares, profit sharing, access of the information and meeting participation fot voting, appointing and removing the directors, appointing the auditor and approving the special resolution and etc. During 2012, the company organized and operated as follows; Shareholder’s meeting On 2012, the company organized the Annual General Meeting of shareholders with the following details: • The 2012 Annual General Meeting of shareholders dated on 23rd April, 2012 at 14.00 p.m. in Four River, 1st Fl., Ramada Plaza Menam Riverside Bangkok located at No. 2074, Charoenkrung Rd., Bang Kho Laem District, Bangkok 10120. The total participants were 135 person where 101 person were the shareholders and the other 34 person were proxy. The total countable shares based on the number of the participants were 121, 477, 307 shares whichwere equal to 70.51% of the ordinary and paid-up shares. The Board composed of the Chairman of the Board, the Directors and the Audit Committee totally 8 persons including the executives and the auditor participated in the meeting. The Chairman was acting as the chair of the meeting and followed all rules completely provided by law. The process of the meeting was as follows;


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• Prior to the meeting 1. The company send the notice to the shareholders through the SET system so that the minority shareholders can acknowledge the right to propose the agenda in the meeting as well as the nomination to sit as the director according to the selection process provided by the company’s regulation and disseminated through the company’s website at www. jubileediamond.co.th/investor relation. There was no agenda or nomination to be appointed as the independent director in the 2012 annual ordinary general meeting of shareholers. 2. The company disseminated the schedule and agendas of the meeting through the SET system and the company’s website in advance for 30 days prior to the meeting. 3. The company send the invitation of the meeting indicated the venue, date, schedule and agendas including the Board’s comment in each particular agenda as well as the proxy form and annual report for further consideration. The letter and related documents was sent to all shareholders whose name appeared at the record date in order to to acknowledge in advance for 14 days and publicized in the daily newspaper for 3 days. 4. The shareholders who cannot attend the meeting by themselves could send their proxy to act as an agent on their behalf in the meeting. • During the shareholders’ meeting 1. The compamy facilitated the meeting to all shareholders with no preference and discrimination. There were the receptionists to assit the shareholders sufficiently. The shareholders could registered for the meeting at 12.30 p.m. which was 2 hours before the meeting. All Directors and Executives including the auditor joined the meeting altogether. 2. The company applied the barcode system for the participartory registration and voting. 3. The company organized to use the ballot in every agendas in oder to be transparent and accountable. 4. Priot to the meeting, the Chair of the meeting inform the number of the participants and explain how to vote with the ballots to the self-participatory shareholders and proxies. 5. The Chair of the meeting carried on the meeting as set in the invitation without changing the schedule and agendas or considering the other issues where were not in the agdas. 6. The Chair of the meeting informed and clarified all agendas while all shareholders had equal rights to exercise and examine the company’s performance including to follow up and express their optinions. The meeting was recorded all substantive matter in the minute in order to check the correctness of the meeting. 7. Any resolution shall be final by the majority vote. One share will be one vote for any resolutions unless it was about 2012 annual remuneration. The resolution was accorded by the two-third of the shareholders’ votes in the meeting while they were qualified to vote.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

8. Prior to vote, the Chair of the meeting would allow the shareholders to ask the question and details for clarity. 9. The Chair of the meeting carried on the vote with the transparent manner. 10. The meeting allowed the shareholders to appoint the individual directors. 11. During the meeting, if there were any additional shareholders, the company shall recount the number of the shareholders and shares every time for any additions. The new comers shall vote only the agendas that have not been voted yet. In addition, the Chair of the meeting would conclude the vote in each agenda and inform the shareholders to acknowledge. Such information shall be indicated the number of the votes of approval, disapproval and absention. • During the shareholders’ meeting 1. After the meeting, the company informed the resolutions through the SET system with the details of resolution and voting in each agenda to the public. 2. The company made the written minute and diseeminated within 14 days after the meeting through the company’s website. 2. Equitable Treatments The company has treated all shareholders with equality and fairness no matter they are majority or minority shareholders, institutional investors or foreign investors and also ensured to the shareholders that the Board and management team have spent the capital appropriately because it believes that these are the key factors to build trust and investment in the company. The Board has responsibility to ensure that the shareholders’ fundamental rights will be protected and treated in the equal basis.

• In terms of proposing the agendas and nomination for the 2012 annual ordinary general meeting of shareholders, the company sent the letter to the shareholders through the SET system and the company’s website in order to porpose the agendas according to the company’s regulation. This ensured that the minority shareholders can appoint the independent director for taking care their benefit on their behalf. Howevrer, there was no agenda or nomination to be appointed as the independent director in the 2012 annual ordinary general meeting of shareholders. • The Board organized the meeting that treated all shareholders to be treated equally and allowed the proxy to act as an agent on behalf of the shareholders through the Khor. Form (Proxy form) which was attached with the invitation letter for the meeting indicating the document / requirements including the process of authorization so that the shareholders could prepare with no problem during the meeting.


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• The Board acknowledged the connected transactions and considered the appropriateness of such transactions with prudence by following the SET and SEC regulations and disclosed the information related the name and relationship of connected person in the annual report and 56-1 Form so that the shareholders can check easily.

• The company set the responsibilities of the Executives and department related to the confidentiality. The Directors, Executive or any person who hold the confidential information of the company shall not share nor disclose the information, which may cause an adverse impact to the general shareholders, to the outsiders or whom has no relevant duties unless it is for public dissemination according to the SET regulation. • The company provided that the Directors and Executives shall submit the securities holding report including the change of such holding to the company Measures to prevent the use of inside information by Directors, management, and employees for abusive self-dealing or for the others The company shall not discriminate or treat inequally in favor for any other groups. All shareholders have rights to access the public information through certain channel with the equal basis. Such treatment shall be fair and enough for the information disclosure. The ways to access this information are as shown below: Tel : 0-2266-5700 ext. 400 Website : www.jubileediamond.co.th/investor relation E-mail address : ir@jubileediamond.co.th

The company has policy to prohibit the Directors, Executives and employees using the inside information which is substantive and not publicly available for their self-interest or for the others including for the share trading. The measures to prevent such risk are as follows; 1. Raise awareness to the Directors and Executives for the duty to submit the securities holding report for themselves, their spouses minors including the penalty according to the Securities and Exchange Act B.E. 2535 and the SET regulation; 2. Provide the executives submit the securities holding report to the SEC according to Section 59 of the Securities and Exchange Act B.E. 2535 and the company at the same day; 3. Inform the executives and employees that whoever holds the financial and other information of the company that is substantive and led to the price of the securities shall avoid to trade the company’s security within 1 month prior to disclose such information to the public and keep in confidentiality to the other person.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

If the Directors, Executives and employees fail to comply with the given measures, the company shall proceed the disclipinary action in various means as it deems appropriate. Such means are verbal warning, written warning, salary reduction, work suspension, termination without the compensation or prosecution. In 2012, there was no such act that violated the SEC and SET regulations nor did have the share trading by using the inside information conducted by the Directors and Executives within 30 days prior to inform the official company’s income through the SET system. Information disclosure to the stakeholders The Board agreed to have the guideline on the information disclosure to the Directors and Executives’ stakeholders for the sake of transparency and protection of the comflict of interest as follows; 1. The Director shall inform the company promptly when the Director and its family members involve or hold the share in any businesses that may lead to the conflict of interest; or receive either direct or indirect benefit from any contracts where the company is the party; and or hold the company’s securities. 2. In case that the employee and its family members involve or hold the share in any businesses that may be contradict to the company’s business, the employee shall inform in written to the CEO. 3. The Director and Executive shall inform the information to the company’s Secretary and the Board and refrain to express any opinions or vote in any agendas that cause the conflict of interest. 3. Role of Stakeholders The company has realized the environment and social responsibility including the interest in all groups and harmonized with them appropriately in order to ensure that all rights are protected and exercised. The company has provided the guideline to comply in order to respond the stakeholders’ needs clearly and disseminated it to the Board, Executives and employees to adhere and implement it as key compliance. During 2011, the company added the good practice and developed the stakeholders’ treatment constantly. i.e., anti-corruption practice, prevention of the human rights abuses and efficient and worthwhile use of resources. The practice of good governance in different stakeholder shall be clarified below:

• Shareholders – the company carried it business with integrity, openness and good governance in order to grow sustainably. The company also respects the shareholders’ rights disclosing the information for assessing the company management. Such information were the company’s performance, financial status and suppoting information disclosed within the due period in oder to be transparent and fairness with the shareholders.


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• Community and Environemnt – the company implemented the policy on Corporate Social Responsibility : CSR, social focus and philanthropic activities into its business directed by the Board. The company contributed and involved the CSR activities with the following foundations and organizations in 2012 constantly: - Donate the 9 Fiber boats with engines to Wat Hat Yai community in Hat Yai District, Songkhla Province in order to assist and relieve those who were affected from the inundation while Dr. Rungroj Kaupanich (MD.), the Deputy Mayor of Hat Yai, was authorized to received. - Voluntarily repair and clean the clock tower at Lumpini Park with free of charge in order to dedicate merit to his majesty the King of Thailand. For other activities, the company continued to support constantly. For the example, the company financially supported the National Fund for Empowerment of Persons with Disabilities under the supervision of the Ministry of Social Development and Human Security at the sum of THB 162,060 and joined the activities related to educational support in various universities.

• Customer – the company has dedicated to help the customer’s satisfaction with the products many factors, i.e., the condition of the product, the price, excellent service which respond its needs. The company has carried on its business with fairness and has a policy related to confidentiality and customer’s benefit as a priority. Also, the company has allowed the company to complain or ask for information all the time through various means such as website, telephone, company’s branches, facebook or ect. • Partner and/or Creditor – the company has treated the partner and/or the creditor according to the trade condition and agreement. The company shall not operate the business with the bad faith and cover any information or fact that could damage the creditor. The Executives or employees shall not ask for or accept assets or other benefits which are dishonest to trading with trade partners and/or creditor. In case there are grounds to believe that there is request or acceptance of assets or other benefits which are undue, company or the trade parner and/or the creditor shall jointly seek solutions and prevent the risk that will be arisen again the future. In addition, the company has complied with loan conditions, i.e., the purpose of the loan, payment, security, and other covenants, made with the financial institutions and it, previously, never breaches of contract with them before.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

• The company has performed it duty to the State by operating its business under the law and regulations strictly and coordinating to disclose the complete and correct information to the State when requested in order to be transparent, confident and credible. • Competitors - The company has conducted its business within a framework of free and fair competition by following the fair competition guideline and avoiding the dishonesty to destroy the opponents. The company had no trade dispute against the competitiors in the previous year.

• Employees – the company has clear and concrete policy related to safety, welfare and employees’ benefits. The company has treated the Executives and employees equally and provided the reasonable bonus. The provident fund has been set up in order to secure the employees’ stability in the long term. The company has set the policy and practice realted to self-developments such as training, professional education for the the sale employees at the in-house or out-house including the personality development for the employees.

4. Disclosure and Transparency The company has ensured that the financial report and corporate information are provided correctly, accurately and on time through the SET channels and the company’s website at www.jubileediamond.co.th constantly. • The company believes that the quality of the financial report is significant for the shareholders and outsiders. The Board, then, shall ensure that the information in the report is correct, consistent with the auditing standards. Moreover, it also shall be examined by the independent auditor appointed by the Audit Committee composing of the independent directors who are in charge of financial report and internal control. In addition, the Board, Audit Committee and the auditor’s reports shall be appeared in the annual report.

• The investor relations is responsible for communicating and supplying the important information to the investors, shareholders, securities analyst, and ordinary people. The activities related with the investor relations in 2012 were as follows; 1. To attend the Opportunity Day for 4 times 2. To attend the Analyst Meeting for 4 times 3. To organize the Thank Press Party for 1 time For communication between the company, shareholders and investors, please contact Mr. Yuttana Taepangthong, Director of Accounting and Finance or E-mail at: ir@jubileediamond.co.th


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5. Board Responsibilities The Board has duty and responsibility to conduct good governance in order to take reasonable care to the shareholders and stakeholder such as business strategy, performance assessment and business transparency. The Board has leadership, vision and independent to determine the maximum interest of the company and shareholders overall. It then divides duties and responsibilities between the Board and management team clearly and ensures that the business is carried on lawfully and ethically. The Board composes of 50% independent directors who are qualified and experiences in meaningful way for the company. They have dedicated and put their effort to strengthen the growth of the company. Role, Duties and Responsibilities of the Board of Directors The Board considers and determines the business operation such as vision and mission, strategy, financial goal, risk, plan and budget, etc. including to supervises, controls and ensures that the management team will follow the policy and plan as provided effectively and efficiently.

• To comply its responsibilities with due diligence and integrity including to follow the law, purpose, company’s regulation and the Board and shareholders’ resolutions with the concern of the shareholders’ interest fairly and to reasonably conduct under the same circumstances. During 2012, the company lawfully carried on its business and did not violate the SEC and SET regulations.

• To promote and approve the policy on the good governance in written and to monitor such policy at least once a year.

• To prepare the ethical code in written for all Directors, Executives and employees to understand the ethical standard that the company applies in its operation and to ensure the strict compliance.

• To consider the conflict of interest by having the clear guideline and focusing the company and shareholders’ interest mainly while the stakeholder has no participation to make decision unless it is the transaction that has commercial terms as those an ordinary person would agree with unrelated counterparty under similar circumstances, on the basis of commercial negotiation and without any dependent interest resulted from the status of the Directors, Executives or related person, as the case may be, or it is the commercial agreement approved from the Broad or accorded to the principle that has been approved by the Board as well as to supervise the complicance, disclosure information related to the conflict of interest accurately and completely.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

• To have the control system in finance and legal and policy compliance and provide the independent person or department monitoring the control system as well as to review such system at least once a year.

• To consider the overall Risk Management by allowing the management team being in charge of complying and reporting the Board regularly and to review the system and assess such risk management periodically whether the risk has been changed including to alert in precaution and certain unusual transactions

• To consider the criteria and forms of remuneration for the Board, the President and approve the remuneration of the President while the Directors and the Board’s remuneration will be proposed and approved by the shareholders’ meeting

• To consider the criteria and the process of the Directors and Executives selection including to nominate the candidates according to the selection process and propose to the shareholders’ meeting for the appointment

Term of Director The selection process of the director for the appointment of the shareholders is transparent without any dependent interest resulted from the controlling shareholders or management team and credible for the outsiders. Every annual ordinary meeting, one-third of the directors shall vacate in proportion. If the number of directors is not a multiple of three, the number of directors closest to one-third shall vacate. In addition, a director who vacates office under this section may be re-elected. Removal of the Board of Directors Apart from the removal of the Board of Directors because of completing the term according to the Securities and Exchange Act B.E. 2551 (2008), A directors shall vacate office upon: 1. death; 2. resignation; 3. being disqualified or being under any of the prohibitions under section 68 of the Public Limited Companies Act, B.E. 2535 (1992); 4. removal by a resolution of the meeting of shareholders under section 76 of the Public Limited Companies Act, B.E. 2535 (1992); 5. removal by a court order.


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Board of Directors’ meetings

• The company provides the Board of Directors’ meetings in advance at least once a quarter and notifies the schedule together with the agendas and other supplementary document prior to the meeting so that the Directors can participate and prepare for the meeting.

• The Chairman of the Board and CEO shall consider the agendas for the meeting by ensuring that the matter issues have been inserted. In addition, each Director is independent to propose its agenda in the meeting. • The Chairman of the Board shall have sufficient time to manage the meeting compared with the agendas and debate among the Directors and encourage the Directors to make a decision with prudence and pay attention to proposed agendas including the good govenrnace.

• Every year, the independent directors shall have their own meeting if they deem appropriate in order to discuss certain issues related to management without management team.

• The Board shall encouragethe President to invite the Executives participating the Board of Directors’ meetings in order to provide additional input as they have direct involvement.

• The Board shall access the additional information if it deems necessary from the President or other Executives or any authorized person within the scope of the policy as provided.

Self-evaluation of the Directors The company shall evaluate the Directors’ performance every year in order to compare in each category and year of performance. This is aimed for improving and developing the Directors’ performance in line with the good practice of directorship. Evaluation of CEO The company shall evaluate the President’s performance every year based on the goal and criteria of the evaluation connected with the achievement of the plan. Role, Duties and Responsibilities of the Audit Committee In order to be effective and efficient for the Board’s performance, the Board then has appointed the Audit Committee to assist in the financial report, internal control system and legal, regulation and ethical compliance for the good governance. The Internal Control shall submit its report to the Audit Committee to examine if the compliance has been done, how the result is as well as how it shall propose the recommendation and assess the quality of the Audit Committee’s report. The Board of Directors will appoint the Audit committee. They are qualified according to the SEC and SET and consisted of 3 persons. One person among them, at least, is expertise in accounting and finance.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

The Audit Committee shall be responsible for complying and performing as assigned by the Board while the responsibility in all kinds of business operation toward outsiders shall be subject to the whole Board. Remuneration

• The director’s remuneration shall be in comparison with other companies that are similar size, experiences, mission, scope of accountability and responsibility including the expected benefit and the additional task of from each Director. i.e, the Director who is sitting in the Audit Committee shall have additional remuneration. • CEO’s remuneration shall be based on the principle and policy provided by the Board and the maximum benefir of the company. However, the remuneration in the form of salary, bonus and long-term incentive shall be consistent with the company’s performance.

Development of the Directors and Executives The Board provides the orientation to all new directors in order to prepare and understand the nature of the business and performance. The company’s Secretary will coordinate following matters; 1. Business structure, Direcotor structure, scope of duties and responsibilities and relevant law 2. General business and guideline for business operation The Board provides the orientation to all new directors in order to prepare and understand the nature of the business and performance. The company’s Secretary will coordinate following matters; Executive Succession Planning The executive succession planning is made in order to ensure that the company will have the Executive who is knowledgeable, skilled and experienced to perform its duties and responsibilities. The executive succession planning has been prepared as follows: 1. The Board provides the executive’s capacity training for the preparation of the executive succession planning in all positions. 2. The Board assigns the HR Executives to follow up the training and develop the knowledge and capacity of the successor. 3. The Board provides all directors attending the Executives’ meeting in order to understand the experience and prepare to manage the organization in the future. Conflict of Interest In order to prevent the conflict of interest, the company then provides the guideline for the Directors, Executives and employees to comply as follows;


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1. No Director may either carry on or accociate as a partnership or hold the shares in any business of the same nature and compete against the company unless he or she notifies the meeting of shareholders prior to the resolution for his or her appointment. 2. Management and employees must not use insider information for either trading the Company’s securities or damaging the shareholders. Such use shall be included to information disclosure to the relevant person. 3. In case that the company has connected transaction report or acquisition or disposal of material assets, the Directors and management tram shall comply the compnay’s procedure: organizing the meeting to condiser and shape the report; examining and passing the report from the Audit Committee with the concern of the maximum interest of the company and shareholders; avoiding to participate in the meeting if the Directors or Executives have a conflict; supervising to comply with the provided procedures once the report get approval by the Directors; and disclosing it through various channels in order to acknowledge entensively and equally. 4 Directors, Executives and employees shall not make use of opportunities or data derived from their directorship, executive position or job performance, for their own or other people’s benefits, by entering a business that competes with the company or related businesses

Information Disclosure on the Conflict of Interest The company has provided the Directors and Executives to prepare and disclose the conflict of interest report. Such report shall be submitted to the Internal Control who can supervise and cope with the conflict of interest. Previously, the conflict of interest was not yet existed.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Employee

On 31st December, 2012, the company have had 250 employees which can be listed down accoding to the following departments: Department Marketing and Product Development Sale and Promotion Production Accounting / Finance Human resources amd General Administration Purchasing Total

Number of employees 2010 2011 2012 12 126 21 15 7 2 183

12 148 20 14 7 2 203

17 181 23 16 11 2 250

2010

2011

2012

33.64 34.54 1.03 3.99 73.23

34.03 40.10 1.06 0.54 75.83

46.70 51.44 1.44 1.84 101.42

Cash remuneration

Type of remuneration Salary and Bonus Commission fee Provident fund Employee’s welfare Total

The company has promoted the employee’s welfare based on the economy and livelihood such as - - - -

Employee’s uniform Provident fund Medical reimbursement / Collective health care insurance Grant-in-aid for certain occasions such as wedding, funeral and ordination / Grant-in-aid for victim in the emergency situations such as inundation, conflagration and etc. - Leisure activities for the purpose of the employee solidarity and coordination such as New Year celebration or other congratulation events.


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Employee recruitment and selection The company emphasizes in employee recruitment by providing the test to check the knowledge, capacity, attitude and skill in each position and expects all employees to be skillful and happy to work. Employee Development Policy The company pays attention to develop the employee’s capacity in knowledge, mentlal health and ethic. Awards such as Best seller, Best employee in the category of behavior, virtue and ethic will be given for the purpose of moral support based on the generousness toward colleague and customer and work behavior/discipline. The company has orientation for new employees and training for a whole year. Also it has constantly encourgared them to participate the meeting, seminar and academic training related to the work directly and indirectly in order to develop their capacity and prepare for the industrial competition. Apart from training and employee development, the company also concerns the career progression in each profession. It has provided preparation plan for the employees who have progression and grow together with the achievement of the company. The progression can be based on weakness improvement, strength enhancement and self-evaluation as well as the supervisor’s evaluation. Moreover, it also has provided an opportunity for the employees to prove their wisdom during the work so that they can be promoted in the upper level and stay with the company for long. Maintenance of the work condition The company has improved and managed the work condition for employees with the hope that they can work within the good environment; concerned the sanitation and safety of life and property; and launched the campaign to resfrain from all vices and drugs.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

INTERNAL AUDIT Audit Committee had evaluated adequacy of internal auditing systems of the Company though interactive communications with relevant administration sections and surveys of questionnaires on adequacy of internal auditing systems of the Company responding to five main components as: the organization and surroundings;risk management; control of operations of administration sector; information technology and communication system; and monitoring system. The Board of Directors of the Company and Audit Committee had inspected and found that currently the Company has set up internal auditing system on process of transaction adequately responding to main shareholders, Members of the Board of Directors, executive staff members or any affiliating party with such person. And for internal audit under other matters of the internal auditing system, the Board of Directors of the Company and Audit Committee had inspected and found that in present the Company has set up internal auditing system on process of transaction responding to their requirements with adequacy. And in reference to the account auditing of a chartered accountant in the accounting year round in 2012, the Company was recommended with given observations on internal auditing system of the Company, and the Company then improved a more appropriateness system, the Board of Directors of the Company and Audit Committee had inspected and supervised the improvement responding to those observations, nevertheless there was none of impact towards reliability and trustfulness of the financial statement of the Company in 2012.

RISK MANAGMENT Recently, the Company arranged the risk management within its structure for ensuring its operation with management in efficiency. The high-ranking executive staff-members of the Company were appointed to be members of the Committee on Risk Management with duties on issuance of the policies on risk management and administrative systems with efficiency responding to all aspects in need.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

RELATED TRANSACTION

The Company had related transaction or any person by nature that shall be in conflict. The Company delicately takes the relationship of relevant individuals or businesses into account and perceives them on actual engagement rather than legal binding or forming of contracts, this also include sanycompanies with executive member or person whom shall be in conflict and be in position of the Committee and/or main shareholder in presentand shall be one with suspicion on conflict of interest on business operation in the future of these companies. This might form interactions between the Jubilee and such companies. The affiliating companies, in this regard, comprises as follows: 11.1 Name list of relevant juristic persons that shall be in conflict: Company 1. The Jubilee Jewelry Manufacture Company Limited;

Affiliating person(s) in Share-holding Relationship with the Type of Business charge of member (s) of Company/member(s) of List of Interaction the Board of Directors (in percent) the Board of Directors 14 N/A Trade of jewelry 1) Miss Ornrat Pornprakit; Mr. Viroj’s daughter; 2) Miss Chanabhorn Pornprakit; 14 Mr. Viroj’s older sister; 3) Mr. Rath Pornprakit; 14 Mr. Viroj’s younger brother; 4) Mr. Boonrith Pornprakit; 14 Mr. Viroj’s younger brother; 5) Mr. Soontorn Pornprakit; 16 Mr. Viroj’s father; 6) Other persons without 28 conflict;

2. The Bangkok Trade of jewelry Diamond and Precious Stone Exchange Company Limited;* 3. Zui Hua Partnership Trade of jewelry

1) Mr. Soontorn Pornprakit; 2) Other persons without conflict;

1 99

Mr. Viroj’s father;

N/A

1) Mr. Soontorn Pornprakit; 2) Miss Chanabhorn Pornprakit;

30 10

Mr. Viroj’s father; Mr. Viroj’s older sister;

N/A

Remarks

Current Status สถานะ

Currently, this Company has terminated its trades on decorations and ornaments; it is running a business on rental of property.

Activated

There is none of business cooperation and is a business competitor, but there is none of selling order since 2006. There is none of business cooperation and is a business competitor.

Activated

Activated


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Company

4. Zui Hua Syndicates Limited

5. J.B. Assets Company Limited;

Affiliating person(s) in Type of Business charge of member (s) of the Board of Directors 1) Mr. Boonchai Pornprakit; 2) Mr. Boonrith Pornprakit; 3) Mr. Rath Pornprakit; 4) Ms. Malee Pornprakit; Trade of jewelry;

1) Mr. Soontorn Pornprakit;

2) Miss Chanabhorn Pornprakit;

3) Mr. Boonchai Pornprakit; 4) Mr. Boonrith Pornprakit; 5) Mr. Rath Bhornprakit 6) Other persons without conflict; Rental of Office 1) Mrs. Suvatana Tulayapisitchai; Buildings; 2) Mr.Viroj Phonprakit; 3) Miss Unyarat Pornprakit;

Share-holding (in percent)

Relationship with the Company/member(s) of List of Interaction the Board of Directors

Remarks

Current Status

10 10 10 30

Mr. Viroj’s older brother; Mr. Viroj’s younger brother; Mr. Viroj’s younger brother; Mr. Viroj’s mother

16 14 14 14 14 28

Mr. Viroj’s father; Mr. Viroj’s older sister; Mr. Viroj’s older brother; Mr. Viroj’s younger brother; Mr. Viroj’s younger brother;

N/A

There is none of business cooperation and is a business competitor.

Activated

80

Mr. Viroj’s wife and member of Board of Directors; Member of Board of Directors; Mr. Viroj’s daughter and member of Board of Directors;

N/A

It runs different type of business, and there is none of business cooperation. The Head Office of J.B. Assets Company Limited, in the past, was located in 6th floor of Tiew Hong Building where currently is the Office of Board of Directors and executive staff members of Jubilee and as per the date of 30 September 2009, the J.B. Assets Company Limited is located on Ramindra Road.

Activated

16 4


65

Annual Report 2012 Jubilee Enterprise Public Company Limited

Company 6. On-Nut Diamond Company Limited; 7. C.K. Diamonds Company Limited;

Affiliating person(s) in Share-holding Relationship with the Type of Business charge of member (s) of Company/member(s) of List of Interaction the Board of Directors (in percent) the Board of Directors Rental of Lands; 1) Mr. Soontorn Pornprakit; 9 Mr. Viroj’s father; N/A 91 2) Other persons without conflict; Suvatana’s older brother; Development of 1) Mr. Charn Tulayapisitchai; N/A 40 Property; 2) Other persons without 60 conflict;

Remarks

Current Status

It runs different type of business, and there is none of any business cooperation. It runs different type of business, and there is none of any business cooperation.

Activated

Activated

Development of 1) Mr. Charn Tulayapisitchai; 8. K and C Lands Real 2) Other persons without Estates Company Limited; Property; conflict;

40 60

Suvatana’s older brother;

N/A

It runs different type of business, and there is none of any business cooperation.

Activated

1) Mrs. Suvatana Tulayapisitchai; 2) Mrs. Sukanya Aramsinchai; 3) Mrs. Kachoo Saeteow; 4) Other persons without conflict;

16

Mr. Viroj’s wife and member of Board of Directors; Ms. Suvatana’s older sister; Ms. Suvatana’s mother;

N/A

It runs different type of business, and there is none of any business cooperation.

Activated

9. Hang Yu Zeng Company Partnership

Molding of copper and brass items, coins, tokens or amulets;

16 16 52

* Mr. Soontorn Bhornprakit had resigned from a member of the Board of Directors of the Bangkok Diamonds and Precious Stone Exchange Company Limited, since 20th February 2009.

There is only one company running similar business thatone member of the Board of Directors of Jubilee is a member of Board of Directors and/or main shareholder, as the Jubilee Jewelry Manufacturer Company Limited. This Company established an agreement with Jubilee as: “there will be not any business, either direct or indirect, or taking part, either direct or indirect, or any operation affiliating with business of production and distribution of diamond ornaments and diamond in karat or any other businesses competing with businesses of the Jubilee Enterprise Public Company Limited, including to distribute or supply raw materials to a person or juristic person whom is hired for production of goods for the Jubilee Enterprise Public Company Limited” and the Diamond Jubilee Partnership shall not use brands of “Diamond Center” and “Jubilee Diamond” in any matters. In additional, the Company shall not establish any mutual interactionwith the HuiZui Diamonds Partnership and Zui Hua Syndicates Company Limited


66

Annual Report 2012 Jubilee Enterprise Public Company Limited

For the J.B. Assets Company Limited; On-Nut Diamond Company Limited; C.K. Diamonds Company Limited; K and C Lands Real Estates Company Limited; and Hsu Zeng Company Partnership, they all are running types of businesses in difference with the Jubilee, therefore there is none of agreement, while they all are competitors of the Bangkok Diamond and Precious Stone Exchange Company Limited, Zui Hua Diamonds Partnership and Zui Hua Syndicates Company Limited 11.2

List of related transactions between person (s) / juristic person (s) that shall be in conflict: The list of related transactions between persons/juristic persons that shall be in conflict in 2011 and 2012 shall be presented as follows:

Person(s) / juristic person(s) that shall be in conflict Mr. Supasith Klaikem and the Jubilee Enterprise Public Company Limited;

Relationship Mr. Supasith Klaikem is a permanent employee of the Jubilee Enterprise Public Company Limited;

Type and Detail of Related transactions 1. The Company has sold goods and diamond ornaments to Mr. Supasith Klaikem, in total value covering selling price, services between periods and pending payment at the end of period, in detail as follows: - Selling of goods; - Service fees; - Remaining of payment of debt; - Other creditors;

Ending in the Year 31 December 31 December 2011 2012

3.76 N/A 0.18 5.87

-

(Unit: Million Baht)

Setting of Prices and Condition

Opinions of the Auditing Committee on Necessity and Justification of Interactions

It responds to same prices and conditions of other enterprises with contracts in similarity of franchise of the Company.

Due to a wife of Mr. Supasith Klaikem was running a business of trades of ornaments in similarity with other enterprises holding contracts in similarity of franchise of the Company. Therefore she contacted the Company with request for installment of contract with the Company in the name of her husband. The Committee examined and opined that such request fallen into regular conditions with justifications for business. On 30th December 2011, Mr. Supasith Klaikem had requested to terminate such contract with the Company and returned all goods to the Company. The Company noted such returns and set-up liability in category of other creditors. The Committee examined and opined that such report fallen into regular conditions with justifications for business.


Annual Report 2012 Jubilee Enterprise Public Company Limited

67

MEASURES WITH PROCEDURES ON RELATED TRANSACTION According to the Committee’s Resolution no.4/2551, dated 7th June 2008 (Company Limited) and Committee’s Resolution no.5/2552, dated 21st October 2009, there are procedural measures on related transaction as follows: The transactions between the Company and any relevant party or person who might have conflict shall be enlisted in the transaction between the Company and any relevant party or person who might have conflict and shall be in compliance with the condition of regular trading or transaction under similar trading agreement that a reasonable man shall make with a contract party in general at the same situation with power on negotiation of trading and without any influence from status of member of the Board of Directors and executive staff member or a person who might have conflict, as the case maybe, under reasonable conditions that shall be examined and not cause transference of benefits. The Company shall prescribe measures with procedures on making of related transactions between the Company and any relevant party or person who might have conflict, for a case of making of mutual interaction in type of regular trading, e.g. selling of goods of the Company under the price list to a person who might have conflict in regular price and ordinary trading condition without giving of any favorable discount beyond the scope of power of the Chair of Operation Officers and in equivalence with other clients, etc. And in case that making of such mutual interaction is out of the price list or not generated in ordinary list of sale, the stakeholders, for this instance, shall not be able to participate in granting of approval on such matter, the Company shall entrust the Auditing Committee with authorities for giving of approval on bases of necessity, justification and appropriateness. The making of such matter shall be considered on case-by-case basis. And in case that the Auditing Committee shall not be knowledgeable on consideration of such mutual interaction, the Company shall entrust an independent knowledgeable person with expertise on examination and valuation to give opinions on such mutual interaction to the Auditing Committee or share holders as the case maybe, for granting of approval before making of interaction. In additional, the Auditing Committee shall be able to examine and review existing interactions in every quarter and shall consider policy on related transactions in ordinary list of sale in every year. The Board of Directors of the Company is obliged to supervise operations of the Company to act in compliance with laws on securities and stock exchange, obligations, notifications, orders or regulations of the Stock Exchange of Thailand or Office of the Securities and Stock Exchange Commission or of the Capital Market Commission or of the Securities and Stock Exchange Commission, including the operations under regulations for disclosure of information on linking interactions and obtain or distribution of significant assets of the Company. The Company shall disclose such related transactions and publish them within the footnotes to financial statement audited by an auditor of the Company, in a form of 56-1 and annual report or any information, in accordance with prescriptions of the Stock Exchange of Thailand and relevant organizations.


68

Annual Report 2012 Jubilee Enterprise Public Company Limited

POLICIES AND TENDENCY ON MAKING OF RELATED TRANSACTIONS For the making of mutual transactions in the future, the Company whereas its Board of Directors and executive staff members taking accountability shall act in compliance with regulations on making of interactions with affiliating persons or persons who shall be in conflict. The stakeholder shall be encouraged to participate in consideration of approval on any matters that he might be in conflict on other any benefit with the Company and shall reveal such matter to the Board of Directors of the Company for consideration. The Company shall act in compliance with laws on securities and stock exchange, obligations, notifications, orders or regulations of the Stock Exchange of Thailand, of Office of the Securities and Stock Exchange Commission, of the Capital Market Commission and of the Securities and Stock Exchange Commission. The Company shall not allow any loan or guarantee on loan to affiliating persons or persons who shall be in conflict furthermore. The Company shall make a contract and agreement with Mr. Soontorn Pornprakit on using of areas for establishment of a branch of the Company without any charge and shall not indicate the date of expiry, unless the Company has requested to terminate this contract and agreement. Meanwhile, the Company does not hold any policy on selling of goods and raw materials for any person affiliating with groups of Mr. Viroj Phonprakit in all cases.


69

Annual Report 2012 Jubilee Enterprise Public Company Limited

Director and Management Team Name & Position

Age

1. Mr. Manu Leopairoj 70 Chairman / Independent Director

Education Honorary Doctoral Degree in Business Administration, Thammasat University

Working Experience

Percent of share holding

Relation among family within the company

Period

0.09

-

2008–present

Master Degree M.Sc. (Econ.) University of Kentucky, USA BBA (Economics) (magna cum laude), Thammasat University Diploma, National Defence College (34th) 1999-2004

Director Accreditation Program (DAP) 30/2003 by Thai Institute of Directors (IOD):

Position Chairman / Independent Director Audit Committee Chairman Chairman Chairman Chairman of Audit Committee Chairman Permanent Secretary

Company Jubilee Enterprise Public Company Limited Thai Beverage Public Company Limited (Listed in Singapore) Khon Kaen Sugar Industry Public Company Limited Bangkok Union Insurance Public Company Limited Polyplex (Thailand) Public Company Limited Siam Steel International Public Company Limited ARIP Public Company Limited Ministry of Industry

Course Role of Chairman Program (RCP) 3/2001 by Thai Institute of Directors (IOD):

2. Mr. Viroj Phonprakit 61 Vice Chairman / Executive Director / Chief Executive Officer

Sahapanich School Director Accreditation Program (DAP) 72/2008 by Thai Institute of Directors (IOD): Director Certification Program (DCP) 113/2009 by Thai Institute of Directors (IOD):

41.71

Suvatana’s husband 2008 – present Vice Chairman / and Unyarat’s father Executive Director / Chief Executive Officer

Jubilee Enterprise Public Company Limited


70

Annual Report 2012 Jubilee Enterprise Public Company Limited

Name & Position

Age

3. Mrs. Suvatana Tulayapisitchai 59 Executive Director / Deputy Senior Chief Executive Officer

Education Convent of the Infant Jesus School

Percent of share holding

7.03

Director Accreditation Program (DAP) 72/2008 by Thai Institute of Directors (IOD):

Relation among family within the company Viroj’s wife and Unyarat’s mother

Working Experience Period

Position

2008 – present Executive Director / Deputy Senior Chief Executive Officer 2004 – present Director

Company Jubilee Enterprise Public Company Limited J.B Asset Co., Ltd.

Director Certification Program (DCP) 113/2009 by Thai Institute of Directors (IOD):

4. Ms. Unyarat Pornprakit Executive Director / Chief Financial Officer

33

The Master of Science in Marketing Program (MIM), Thammasat University

3.57

Viroj and Suvatana’s 2008 – present Executive Director / daughter Chief Financial Officer

Jubilee Enterprise Public Company Limited

Bachelor of Business Administration Accounting Assumption University Certification, Institute of Gemological Sciences, USA Director Accreditation Program (DAP) 72/2008 by Thai Institute of Directors (IOD): Director Certification Program (DCP) 113/2009 by Thai Institute of Directors (IOD):

2004 – present

J.B Asset Co., Ltd.


71

Annual Report 2012 Jubilee Enterprise Public Company Limited

Name & Position

Age

Education

Percent of share holding

Relation among family within the company

0.02

-

Working Experience Period

Position

Company

Chief Financial Officer 10/2008 by Federation of Accounting Professions Winner of Business Plan Competition (Asia Moot Corp) First Runner Up of Business Plan Competition (Global Moot Corp) Texas, USA Second Runner Up of Business Plan Competition (New Venture Championship) Oregon, USA 5. Amnuay Naruchata-amorn 57 Chairman of Audit Committee / Independent Committee

MBA Kasetsart University Mini MBA Thammasat University Bachelor of Business Administration Ramkhamhaeng University Bachelor of Science in Chemical, Chulalongkorn University Director Accreditation Program (DAP) 76/2008 by Thai Institute of Directors (IOD): Audit Committee Program by Thai Institute of Directors (IOD):

2008 – present Chairman of Audit Committee / Jubilee Enterprise Public Company Limited Independent Committee Executive Director Selic Chemical Company Limited 2002 – present


72

Annual Report 2012 Jubilee Enterprise Public Company Limited

Name & Position

Age

Education

Percent of share holding

Relation among family within the company

0.04

-

Working Experience Period

Position

Company

Monitoring the quality of Financial Reporting (MFR 7/2009 by Thai Institute of Directors (IOD): Monitoring the System of Internal Control and Risk Management (MIR 5/2009) by Thai Institute of Directors (IOD): Monitoring the Internal Audit Function (MIA 5/2009) by Thai Institute of Directors (IOD): Monitoring Fraud Risk Management (MFM 5/2011) by Thai Institute of Directors (IOD): 6. Sahasroj Rojmetha 57 Independent Director

Doctoral Degree in Marketing, US International University San Diego California MBA Tarleton State University MBA in Management, Chulalongkorn University Bachelor of Accounting, The University of the Thai Chamber of Commerce Director Accreditation Program (DAP) 17/2004 by Thai Institute of Directors (IOD): Director Certification Program (DCP) 115/2009 by Thai Institute of Directors (IOD):

2008 – present Independent Director Director Sales & Retail Central 2012 – present Support Director Sales & Service 2004 – 2012

Jubilee Enterprise Public Company Limited True Distribution and Sales Company Limited True Corporation Public Company Limited


73

Annual Report 2012 Jubilee Enterprise Public Company Limited

Name & Position 7. Pirote Maleehorm Audit Committee / Independent Director

Age

Education

62 MBA Sukhothai Thammathirat Open University

Percent of share holding

Relation among family within the company

0.02

-

Bachelor of Engineering Program in Civil Khon Kaen University

Working Experience Period

Position

2008 – present Audit Committe / Independent Director Senior Production Director 2003 – 2011

Company Jubilee Enterprise Public Company Limited Singha Paratech Public Company Limited

Director Accreditation Program (DAP) 76/2008 by Thai Institute of Directors (IOD): Audit Committee Program (ACP) 35/2011 by Thai Institute of Directors (IOD):

8. Zonwa Denmeka Audit Committee / Independent Director

54 MBA Kasetsart University Bachelor of Business Administration in Accounting, Sukhothai Thammathirat Open University Bachelor of Business Administration in Management Sukhothai Thammathirat Open University Director Accreditation Program (DAP) 76/2008 by Thai Institute of Directors (IOD): Audit Committee Program (ACP) 35/2011 by Thai Institute of Directors (IOD):

-

-

Jubilee Enterprise Public Company Limited 2008 – present Audit Committee / Independent Director Financial Controller Energy Teamwork Limited 2012 – present Director - Finance & Accounting Advance Engineering Company Limited 2008 – 2011 Manager - Finance & Accounting Than Printing Company Limited Director - Finance & Accounting Metro Mall Development Company Limited 2003 – 2007


74

Annual Report 2012 Jubilee Enterprise Public Company Limited

Name & Position

Age

Education

9. Warawut Settanaraj 52 Senior Director - Internal Audit Office and Secretary to Audit Committee

Bachelor of Business Administration in Accounting, Ramkhamhaeng University

10. Yuttana Taepangthong 40 Finance & Accounting Director

Bachelor of Business Administration in Accounting, Bangkok University

11. Varit Saimala Purchasing Director 12. Sophon Aroonsuraphonmaythee

46

Percent of share holding

0.01

Relation among family within the company -

Institute of Gemological Sciences 33 MBA in Marketing Chulalongkorn University Bachelor of Journalism and Mass Communication (Advertising) Thammasat University

Period

Position

2008 – present Senior Director - Internal Audit Office and Secretary to Audit Committee 2004 - 2007 Senior Vice President 2004 - 2007 Accounting Advisor

Company Jubilee Enterprise Public Company Limited S Y K Factory and Product Company Limited S Y K Sparepart Industrial Company Limited

0.04

-

2008 – present Finance & Accounting Director and Jubilee Enterprise Public Company Limited Secretary to Executive Committee 1994 – 2008 Finance & Accounting Manager Jubilee Enterprise Company Limited

0.1

-

2008 – present Purchasing Director 1993 – 2008 Purchasing Manager

Jubilee Enterprise Public Company Limited Jubilee Enterprise Company Limited

-

-

2010 – present Marketing Director 2008 – 2009 Product Manager 2002 – 2007 Product Manager

Jubilee Enterprise Public Company Limited Timedeco Corporation Company Limited Lux Asia (Thailand) Company Limited

Chief Financial Officer 13/2010 by Federation of Accounting Professions Bachelor of Business Administration in Marketing, The University of the Thai Chamber of Commerce Certification,

Working Experience


Annual Report 2012 Jubilee Enterprise Public Company Limited

75

CONCLUSION OF FINANCIAL STATUS AND RESULTS OF PERFORMANCE

SUMMARY OF REPORT ON AUDITION Certified Public Accountants with entrustment of the Jubilee Enterprise Public Company Limited, in the past, shall be enlisted as: • In 2010, Mr. Prawit Viwanthananut, a Certified Public Accountants with license number 4917, from the ANS Audit Co., Ltd.; • In 2011, Mr. Prawit Viwanthananut, a Certified Public Accountants with license number 4917, from the ANS Audit Co., Ltd.; • In 2012, Mr. Bunjong Pitchayaprasat, a Certified Public Accountants with license number 7147, from the ANS Audit Co., Ltd.; And an auditor of the Jubilee Enterprise Public Company Limited had reflected his findings in reports of auditing under his revision as follows:

In 2010,

A Certified Public Accountants had reflected with unqualified opinion and opined that the financial budget presenting financial status on the date of 31st December 2010, with results of operation and cash flow at the end of year with same date of the Company was accurate in substantive matters, in accordance with the chartered accounting principles.

In 2011,

A Certified Public Accountants had reflected with unqualified opinion and opined that the financial budget presenting financial status on the date of 31st December 2011, with results of operation and cash flow at the end of year with same date of the Company was accurate in substantive matters, in accordance with the chartered accounting principles.

In 2012,

A Certified Public Accountants had reflected with unqualified opinion and opined that the financial budget presenting financial status on the date of 31st December 2012, with results of operation and cash flow at the end of year with same date of the Company was accurate in substantive matters, in accordance with the chartered accounting principles.


76

Annual Report 2012 Jubilee Enterprise Public Company Limited

BUDGETS WITH PRESENTATION OF FINANCIAL STATEMENTS

(Unit : Million Baht) AUDITING AUDITING AUDITING st st st 31 December 2010 31 December 2011 31 December 2012 Amount Percent Amount Percent Amount Percent

ITEMS ASSETS           Current Asset     Cash and deposit in financial institute(s); 129.45 21.88 75.79 11.71 29.93 4.01 Short-term investment; 30.46 5.15 60.26 9.31 98.11 13.14 Account receivable; 62.97 10.64 54.34 8.39 76.75 10.28 Inventory; 293.90 49.67 384.72 59.44 479.42 64.22 Other current asset; 11.58 1.96 8.36 1.29 10.82 1.45 Current asset in total; 528.36 89.30 583.47 90.14 695.03 93.10 Deposit in financial institute(s) with obligation for guarantee; 37.50 6.34 25.00 3.86 - Building and equipments, in net; 15.10 2.55 24.81 3.83 34.38 4.61 Entitlement for rental, waiting for deduction in net; 5.94 1.00 6.66 1.41 4.55 0.61 Earnest money; 4.68 0.79 7.34 0.76 12.60 1.68 Non-current asset in total; 63.32 10.70 63.81 9.86 51.53 6.90 Assets in total; 591.75 100.00 647.28 100.00 746.56 100.00 Debt and portion of share-holder(s); Current Liability Short-term loan from financial institute(s); - - - - Creditor of trade - other; 169.07 28.57 153.31 23.68 171.06 22.91 Debt with due of payment in 1 year; 7.08 1.20 7.70 1.19 8.66 1.16 Other short-term loan; - - - - Income tax payable; 14.93 2.52 16.62 2.57 22.10 2.96 Accrued liabilities; 27.39 4.63 - - Other current liabilities; 17.49 2.96 24.16 3.73 36.42 4.88 Current liability in total; 205.01 34.65 201.79 39.17 238.24 31.91 Long-term loan from financial institute(s); 13.33 2.25 6.67 1.03 - Debt under the rental contract; 0.52 0.09 1.26 0.20 3.72 0.50 Obligations for benefits of employees; - - 3.53 0.55 5.35 0.72 Non-current liability in total; 13.85 2.34 11.46 1.77 9.07 1.22 Debt in total; 218.86 36.99 213.25 32.95 247.31 33.13


77

Annual Report 2012 Jubilee Enterprise Public Company Limited

AUDITING AUDITING AUDITING st st st ITEMS 31 December 2010 31 December 2011 31 December 2012 Amount Percent Amount Percent Amount Percent Portion of share-holder(s); Registered capital on due of payment; 171.12 28.92 172.29 26.62 173.30 23.21 Exceeding of share values; 92.27 15.59 92.27 14.25 92.27 12.36 Accumulated profit (lost) with allocation as reserved under the laws; 14.54 2.46 17.50 2.70 17.50 2.34 Accumulated profit (lost) with none of allocation; 94.96 16.04 151.98 23.48 216.19 28.96 Portion of share-holder(s) in total; 372.89 63.01 434.03 67.05 499.26 66.87 Debt and portion of share-holder(s) in total; 591.75 100.00 647.28 100.00 746.57 100.00

All-Inclusive Profit and Lost Statement

ITEMS Gains from purchasing orders and services; Capital for sales and services; Gross profit; Cost of sales and administration; Cost of operations; Profit from exchange rate; Other gains; Profit (lost) before accrued interest and corporate income tax; Accrued interest; Corporate income tax; Net profit (lost); Profit (lost) per share (Thai baht); Average ordinary share with equipoise;

(Unit : Million Baht) AUDITING AUDITING AUDITING st st st 31 December 2010 31 December 2011 31 December 2012 Amount Percent Amount Percent Amount Percent

689.12 100.00 397.71 55.10 309.41 44.90 183.14 26.57 126.27 18.33 - - 4.38 0.64

887.32 100.00 1,226.23 100.00 497.67 56.09 716.02 58.39 389.65 43.91 510.21 41.61 226.12 25.48 305.45 24.91 163.55 18.43 204.76 16.70 - - - 3.30 0.37 4.69 0.38

130.65 18.97 0.96 0.14 25.96 3.77 103.73 15.06 0.61 170.17

166.83 18.80 1.30 0.15 34.35 3.87 131.19 14.78 0.77 171.29

209.45 0.95 42.63 165.87 0.96 172.44

17.08 0.08 3.48 13.52


78

Cash Flow Statement

Annual Report 2012 Jubilee Enterprise Public Company Limited

(Unit : Million Baht)

1 Jan - 31 Dec 1 Jan - 31 Dec 1 Jan - 31 Dec ITEMS 2010 2011 2012 Cash flow from operating of activities; Profit before income tax; 129.69 165.53 208.50 List of items with modifying with impact towards profit before income tax, in cash gained from operating of activities; Depreciation; 5.32 7.73 14.15 Entitlement for rental, waiting for deduction, in net; - - Debt with suspicion on lost (reversing of list); (0.01) 0.23 (0.20) Lost from impairment; 0.03 - 1.61 Profit that shall not actually emerge of asset for trade; - - (0.19) Profit (lost) from exchange rate that shall not actually emerge; 0.43 1.91 (0.13) Obligations for benefits of employees - 3.53 1.82 Accrued interest receivable; (1.10) (2.96) (1.86) Accrued interest; 0.81 1.30 0.95 Profit from operation before change of asset and debt on operation; 135.17 177.27 224.65 Change of asset and debt on operation; Decrease (increase) of account receivable; (10.17) 8.63 (22.64) Decrease (increase) of inventory; (68.32) (88.45) (95.33) Decrease (increase) of current asset; 3.63 (3.47) (2.41) Decrease (increase) of other assets; (0.77) (2.82) (5.04) Deposit in financial institute(s) with obligation for guarantee; (24.72) 12.50 Decrease (increase) of creditor(s) of trade; 64.61 (17.69) 17.88 Decrease (increase) of other current liabilities; (0.38) 10.23 12.26 Cash payable to income tax; (28.25) (32.66) (37.15) Net gained cash (spending) for operating of activities; 70.80 63.54 92.22


79

Annual Report 2012 Jubilee Enterprise Public Company Limited

ITEMS Cash flow from investment activities; Short-term investment; Purchasing of equipments; Purchasing of intangible asset; Receipt of interest; Net cash paid for investment activities; Cash flow from fund-raising activities; Increase (decrease) of over-with drawal of money from the account; Receipt of long-term loan from financial institute(s); Payment of short-term loan from financial institute(s); Payment of long-term loan from financial institute(s); Payment of debt on contract of rental for money; Cash received from increase of capital on ordinary share; Payment of interest; Payment of dividend; Net gained (spent) cash in fund-raising activities; Increase (decrease) of cash and in equivalence-net; Cash and in equivalence on the date of beginning of the year; Cash and in equivalence on the date of end of period;

1 Jan - 31 Dec 1 Jan - 31 Dec 1 Jan - 31 Dec 2010 2011 2012 (30.46) (6.14) (0.81) 1.10 (36.31)

(29.80) (14.04) (2.22) 2.85 (43.21)

(12.67) (17.50) (0.06) 2.02 (28.21)

(2.96) 20.00 (7.35) (13.68) (0.46) 1.12 (0.74) (61.21) (65.28) (30.79)

- - - (6.67) (0.56) 1.17 (1.30) (73.57) (80.93) (53.66)

(6.67) (1.62) 1.01 (0.95) (101.65) (109.88) (45.86)

160.24 129.45

129.45 75.79

75.79 29.93


80

Annual Report 2012 Jubilee Enterprise Public Company Limited

Table for Presentation of Financial Ratio with Significance

ITEMS

UNIT

2010

2011

2012

2.58 1.09 0.41 10.84 33.21 1.46 246.58 3.32 108.43 171.36

2.89 0.94 0.34 15.06 23.90 1.47 244.90 3.09 116.50 152.30

2.92 0.86 0.42 18.56 19.40 1.66 216.87 4.41 81.63 154.64

44.90 18.32 0.63 57.24 14.96 29.55

43.91 18.43 0.37 42.31 14.73 32.52

41.61 16.70 0.38 45.04 13.47 35.54

Efficiency Ratio Compensation ratio, from assets; percent Compensation ratio, from permanent assets; percent Circulation ratio of assets; fold or time

19.18 741.31 1.28

21.18 695.98 1.44

23.80 608.28 1.77

Financial Policy Ratio Ratio of debts and portion of shareholders; fold or time Capacity ratio, in interest payment; fold or time Capacity ratio, in payment of obligations; fold or time Ratio for payment of dividends; percent

0.59 122.45 0.56 60.61

0.49 80.85 0.49 69.66

0.50 142.59 0.59 62.51

LIQUIDITY RATIO Liquidity ratio; fold or time Liquidity ratio, in fast circulation; fold or time Liquidity ratio, in cash flow; fold or time Circulation ratio, of account receivable; fold or time Duration of debt collection, in average; day Circulation ratio, of inventory; fold or time Duration of sales of goods, in average; day Circulation ratio, of creditors; fold or time Duration of payment of debts; day Cash circle; day Profitability Ratio Gross profit ratio; Profit ratio from operation; Profit ratio, other; Cash ratio per operation with profit; Profit ratio, net; Compensation ratio, for shareholders;

Note: * Adjustment of base on annual basis;

percent percent percent percent percent percent


Annual Report 2012 Jubilee Enterprise Public Company Limited

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DESCRIPTION AND ANALYSIS ON FINANCIAL STATUS AND RESULTS OF OPERATION

OVERVIEW OF OPERATIONS

The Company runs a retail trading for diamonds and diamond ornaments which is a business with high competition among a number of small enterprises, but such goods are return high profit per unit while the rate of preliminary profit of goods in same type might be different depending on values of raw materials at manufacturing process, and the Company shall dictate pricing with discount of such goods. The procurement services for products of the Company shall be classified into two main processes as the supplying for diamond as a readymade commodity and raw material, and then hiring a manufacturer to produce designated ornament. Such process of business is similar with an order of purchasing from manufacturer to distribute; therefore the Company shall be able to avoid bearing of costs of investment in permanent assets. While it can spend more investment on current capital for purchasing and collection of products for sales, since they need to be variety in forms and designs responding to diverse buyers. One of the success factors for this business thus relies on management of inventory and liquidity management with efficiency. The retail trading for diamonds and diamond ornaments shall set up initial selling price, in very high level, while volume of sales in each time shall not be high, comparing with manufacturing and exporting of ornaments and decorations, therefore the Company focuses on huge groups of clients with continual expansion of coverage for create more net profits, in additional the Company steadfastly set up branches in provinces countrywide with retain of adequate stocks in each branch responding to diversity of demanding. Several means for management of inventory with more efficiency are introduced and applied for cost-effectiveness with value-adding in stocking of products, while the security management with insurance has been activated upon risk management and preventive measures from robbery and corruption. The Company holds two main types of products as: 1) ornaments and decorations; and 2) diamond in karat, and of course, ornaments and decorations might create more values with gain of higher profits rather than diamond in karat, while some pieces of ornaments and decorations shall earn more profits than other pieces too. In 2010, the turnover with circulation of services of the Company were extended from the past, in 25.70 percent or approximately 140.89 million baht, the increase of turnover with circulation of services around 22.45 percent had come from growth of existing branches of the Company and around 3.25 percent had come from opening of new branches, increasing from 73 units to be 78 units. In 2011, the turnover with circulation of services of the Company were extended from the past, in 28.76 percent or approximately 198.20 million baht, the increase of turnover with circulation of services around 24.38 percent had come from growth of existing branches of the Company and around 4.38 percent had come from opening of new branches, increasing from 78 units to be 79 units.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

And in 2012, the turnover with circulation of services of the Company were extended from the previous year, in 38.19 percent or approximately 338.86 million baht, the increase of turnover with circulation of services around 29.22 percent had come from growth of existing branches of the Company and around 8.97 percent had come from opening of new branches, increasing from 79 units to be 95 units. And for the gist of festive moods in different seasons, they create only tiny impact to turnover of the Company, statistically in the fourth quarter of every year, the Company shall hold highest turnover, comparing with other quarters, since there are two main festive events - Christmas and New Year, with moods of give and take for presents. The turnover in each quarter shall be presented as follows: Sales Volume in Quarterly Basis

Million Baht 2010 2011 2012

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

In 2012, the turnover with circulation of services of the Company was rapidly increased, in equivalence with 338.86 million baht or in rate of increase 38.19 percent, comparing with same period of the year 2011. And although in the year 2012, the overall economy was declined with deceleration because of the economic crisis with contraction, while the rate of unemployment was increased and created more psychological impacts on purchasing power, nonetheless the executive body of the Company still reaffirmed and believed that the jewelry business sector was steadfastly moving with positive tendency. And in reference to marketing survey on ornaments and decorations of the Company, the executive body had forecasted with estimation that the Company shall hold market share around 12 percent of market value in a counter group, or in equivalence with 2 percent of value from overall market, while it shall be gradually increased with extension of service coverage from building of department stores in provinces, e.g. the Tesco Lotus, countrywide. The Company had established a strong relationship with two prominent department stores and asked for a favor with priority for selection of selling areas, while according to marketing analysis; consumers’ behaviors in upcountry were gradually changed in similarity with those residing in Bangkok and mega cities with increase of purchasing power.


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The ratio of income from sales in Bangkok and those in provinces of the Company was changed from the past as: in 2009, the ratio of income from sales in Bangkok and those in provinces would be 50.72 : 40.28 in percentage of income in total; in 2010, the ratio of income from sales in Bangkok and those in provinces would be 50.57 : 42.72 in percentage of income in total; in 2011, the ratio of income from sales in Bangkok and those in provinces would be 57.28 : 42.72 in percentage of income in total, because of the growth of existing branches in Bangkok was higher than those in provinces; and in 2012, the ratio of income from sales in Bangkok and those in provinces would be 58.49 : 41.81 in percentage of income in total, the same because of the growth of existing branches in Bangkok was higher than those in provinces. In 2010, the Company earned net profit in 103.73 million baht, while in the same period of 2009, the Company earned net profit in 60.24 million baht. The increasing amount would equal with 72.19 percent, as the rate of refining margins had been increased from 40.90 percent to be 44.90 percent and rate of corporate income tax in 2010 was decreased from 2009, as from 30 percent to be 20 percent and caused increase of net profit higher than the turnover with circulation of services of the Company in same period of previous year. In 2011, the Company gained net profit in 131.19 million baht, while in same period of previous year the Company gained 103.73 million baht or would be in equivalence with 26.47 percent of increase, due to the increase of turnover with circulation of services of the Company was declined and lowered than that in same period of previous year. And in 2012, the Company gained net profit in 165.87 million baht, while in same period of previous year the Company gained 131.19 million baht or would be in equivalence with 26.43 percent of increase, due to the increase of turnover with circulation of services of the Company was declined and lowered than that in same period of previous year. For the matter of assets of the Company, as per the date of 31st December 2010, the Company shall acquire asset in total 591.75 million baht. This amount consisted of cash and items in equivalence with cash in 129.45 million baht; short - term investment capital in 30.46 million baht; account receivable in 62.53 million baht; and inventory in 293.90 million baht. The critical change, comparing with assets of the Company, as per the date of 31st December 2009, was decrease of cash and items in equivalence with cash in 30.79 million baht to be 129.45 million baht, due to the Company undertook a policy for deposit of 30.46 million baht with any fixed scheme longer than 3 months with gain of higher interest, while the quantity of inventory with retain of liquidity for the Company was increased from 225.58 million baht, as per the end of previous period, to be 293.90 million baht, due to the increase of branches from 73 units in 2009 to be 78 units in 2010, while the Company concurrently applied a policy on increase of inventory in each branch for accelerating of incomes in 2010.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

In the matter of overall debt of the Company, as of 31st December 2010, it valued 218.86 million baht, comprising main components as: creditor for trade and notes payable in 138.12 million baht and values of shares in 372.89 million baht as, paid registration fee in 171.12 million baht, exceeding of share value in 92.27 million baht and accumulated profits with non-allocation in 94.96 million baht. The critical change was increase of creditors for trade in 47.29 million baht, as per the date of ending of previous period as 138.12 million baht, due to the Company had procured raw material at the end of year for production of new goods and sales in 2011 and for accommodation of new branches and short-term loans from financial institutes. This all was increased 10.32 million baht from payment of debt of the Company. In the gist of assets of the Company, as of 31st December 2012, the Company acquired assets in total 746.57 million baht. This amount consisted of cash and items in equivalence with cash in 29.93 million baht; short-term investment capital in 98.11 million baht; account receivablein 76.75 million baht; and inventory in 479.42 million baht. The critical change was decrease of cash and items in equivalence with cash in 45.85 million baht, as of 31st December 2011, to be 75.88 million baht, due to the Company invested amount of cash and items in equivalence with cash for increase of inventory, while the quantity of inventory with retain of liquidity for the Company was increased from 384.72 million baht, as per the endof previous period, to be 479.42 million baht, as of 31st December 2012, due to the increase of branches from 79 units in 2011 to be 96 units in 2012, while the Company concurrently applied a policy on extension of service coverage with development of new displays and counters in existing branches of the Company. In the matter of overall debt of the Company, as of 31st December 2012, it valued 247.31 million baht, comprising main components as: creditor for trade and notes payable in 171.06 million baht and values of shares in 499.26 million baht as, paid registration fee in 173.30 million baht, exceeding of share value in 92.27 million baht and accumulated profits with non-allocation in 216.19 million baht. The critical change was increase of creditors for trade in 17.75 million baht, as per the date of ending of previous period, as 153.31 million baht, due to the Company had procured more raw material at the end of year than the last year.

12.2.2 RESULTS OF OPERATION

INCOME

In 2010, 2011 and 2012, the turnovers with circulation of services of the Company were 689.12 million baht; 887.32 million baht; and 1,226.23 million baht, respectively. The gains shall be classified upon types of products as follows:


Annual Report 2012 Jubilee Enterprise Public Company Limited

Type of Income from Sales/Services

1. Diamond jewelry; 2. Carat diamond; 3. Service Fee; Income in Total

85

(Unit : Million Baht) 2012

2010 2011 Quantity Proportion Quantity Proportion Quantity Proportion Million Baht Percent Million Baht Percent Million Baht Percent

614.03 89.10 793.19 89.39 1,089.34 88.84 69.66 10.11 88.36 9.96 131.05 10.69 5.43 0.79 5.77 0.65 5.84 0.47 689.12 100.00 887.32 100.00 1,226.23 100.00

In 2010, the turnover was 689.12 million baht. The proportion of diamond jewelry, comparing with the same period of previous year, was increased in 28.09 percent, due to the Company launched new products responding to demands of clients and the turnover of carat diamond was increased, comparing with the same period of previous year, in 99.60 percent, due to in 2010, the domestic consumption and demands of clients were increased. The Company had supplied carat diamond for sales in high quantity responding the demands of clients. In 2011, the turnover was 887.32 million baht. The proportion of diamond jewelry, comparing with the same period of previous year, was increased in 29.41 percent, due to the Company launched new products responding to demands of clients and the turnover of carat diamond was increased, comparing with the same period of previous year, in 26.84 percent, due to in 2011, the domestic consumption and demands of clients were increased. The Company had supplied carat diamond for sales in high quantity responding the demands of clients. In 2012, the turnover was 1,226.23 million baht. The proportion of diamond jewelry, comparing with the same period of previous year, was increased in 37.34 percent, due to the Company launched new products responding to demands of clients and the turnover of carat diamond was increased, comparing with the same period of previous year, in 48.31 percent, due to in 2012, the domestic consumption and demands of clients were increased. The Company had supplied carat diamond for sales in high quantity responding the demands of clients.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

The gains shall be classified upon channel of distribution as follows:

(Unit : Million Baht) 2010 2011 2012 Quantity Percent Growth Quantity Percent Growth Quantity Percent Growth

Channel for Distribution 1) Branch or subsidiary of the Company:                 1.1 Shop; 55.95 8.18 -9.61% 76.01 8.62 35.85% 94.78 7.77 24.69% 1.2 Distribution through department store; 420.46 61.50 34.59% 568.25 64.46 35.15% 779.37 63.84 37.15% 2) Business enterprise making a contract with the Company; 3) Cooperation with a credit card or leasing company; 40.75 5.96 78.26% 32.56 3.69 -20.10% 54.13 4.44 52.22% 4) Exhibition of sales; 70.37 10.29 45.48% 122.01 13.84 73.38% 218.26 17.88 78.89% Income in Total 683.69 100.00 25.64% 881.55 100.00 28.94% 1220.4 100.00 37.97% Note: This figure does not include incomes from services and other incomes.

In additional, the ratio of incomes from sales of the Company in Bangkok and provinces was drastically changed with implication, because of the increase of business operation in provinces. The values and ratio of incomes gained from sales of the Company during 2010 to 2012 shall be presented in detail as follows: Channel for Distribution Bangkok; Other provinces; Grand total;

2010 Quantity Percent 339.18 49.61 344.51 50.39 683.69 100.00

2011 2012 Quantity Percent Quantity Percent 504.93 57.28 713.78 58.49 376.62 42.72 506.61 41.51 881.55 100.00 1,220.39 100.00

Note: This figure does not include incomes from services and other incomes.

In reference to the above figures, in 2010, incomes from sales in Bangkok and provinces would be 49.61 and 50.39 percent of total income respectively, thus the sales portion in provinces and in Bangkok was slightly different.In 2011, incomes from sales in Bangkok and provinces would be 57.28 and 42.72 percent of total income from sales respectively, this portion was drastically changed for the previous year, thus this portion was changed from the previous year due to the growth of turnovers in Bangkok was higher than in provinces since the Company had improved image of counters and customer services and also expanded service coverage in Bangkok rather than in provinces. But in 2012, the portion of sales in Bangkok and provinces would be 58.41 and 41.51 percent of incomes from sales, therefore the portion had been shaped in same direction with 2011 due to the growth of turnovers in Bangkok was higher than in provinces. Other portions of incomes in 2010-2012 comprise service fees for setting and cleaning, profit from exchange rate and income from personnel administration that was money collected from business enter-


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Annual Report 2012 Jubilee Enterprise Public Company Limited

prises in terms of franchise services without additional profit for payment of salaries to salesmen, rental and insurance premiums where the Company had paid in advance. Moreover, they also included change of items of lost from devaluation and of items with suspicion on non performance loan. The type of income within 2010-2012 shall be presented as follows: (Unit : Million Baht)

Type of Income Profit from exchange rate; Incomes from personnel administration; Incomes from received interest; Revival of suspicious non-performanceloan; Revival of lost from devaluation; Revival of lost from depreciation; Others; Other incomes in total;

2010 2.93 0.35 1.10 0- 0- 0- 0- 4.38

2011 - 0.34 2.96 - - - - 3.30

2012 1.98 0.53 1.86 0.32 4.69

In 2010, the Company acquired other incomes in 4.38 million baht, comprising profit from exchange rate in 2.93 million baht which was increased from the same period of previous year, in 2.23 million baht or around 38.57 percent; income from personnel administration in 0.35 million baht which was increased from the same period of previous year, in 0.69 million baht or around 34.62 percent; and income from received interest in 1.10 million baht which was increased from the same period of previous year, in 0.72 million baht or around 89.47 percent. In 2011, the Company acquired other incomes in 3.30 million baht, comprising income from personnel administration in 0.34 million baht which was decreased from the same period of previous year, in 0.01 million baht; and income from received interest in 2.96 million baht which was increased from the same period of previous year, in 1.86 million baht or around 62.84 percent. In 2012, the Company acquired other incomes in 4.69 million baht, comprising profit from personnel administration in 0.53 million baht which was increased from the same period of previous year, in 0.19 million baht; income from received interest in 1.86 million baht which was decreased from the same period of previous year, in 1.10 million baht; and profit from increasing exchange rate in 1.98 million baht, thus the other incomes were increased 1.39 million baht or around 42.12 percent of those in the same period of previous year.

MARKETING AND SERVICE COSTS AND REFINING MARGINS The Company bore capitals for sales and services in amounts of 379.71; 497.67 and 716.02 million baht in 2010, 2011 and 2012 respectively. In 2010, the Company increasingly bore capitals for sales and services in amount of 55.67 million baht, comparing with the same period of previous year. That change of capitals for sales and services of the Company was in line with increase and decrease of turnover with provision of services and also reflected to the management on capitals of sales and services with minimal portion lower than growth rate of turnover in 2009. In 2011, the capital for sales was increased to be 117.96 million baht, in equivalence with 31.07 percent,comparing with the same period of previous year, due to its incomes and service fees were increased to be 198.20 million baht, in equivalence with 28.76 percent. And in 2012, the


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Annual Report 2012 Jubilee Enterprise Public Company Limited

capital for sales was increased to be 218.35 million baht, in equivalence with 48.87 percent,comparing with the same period of previous year, due to its incomes and service fees were increased to be 338.86 million baht, in equivalence with 38.19 percent. And pertaining to two main goods and products of the Company as: 1) ornaments and decorations; and 2) diamond in karat, in general the ornaments and decorations of the Company shall earn refining margins higher than gains from diamond in karat. Some forms of ornaments and decorations would earn refining margins in difference with other forms of ornaments and decorations. In 2010, 2011 and 2012, the Company earned refining margins in total, 44.90 percent, 43.91 percent and 41.61 percent, respectively. And comparatively refining margins gained in 2010 and in 2011, they were gradually reduced with slight change of proportion of sales of diamond ornaments and decorations and of diamond in karat, and the same in 2011 and in 2012, the Company earned lessening refining margins, lower than those gained in previous years, due to increase of incomes and service fees from settings of exhibitions and sales promotion activities with more campaigns on discount, while the portion of diamond in karat was also increased.

COSTS OF SALES AND ADMINISTRATION Costs of sales and administration hereby comprise two main components as: ones with direct variation to the increase of turnovers and service coverage, as if, additional compensations for salesmen in forms of commission fees, costs for advertisement and public relations and credit card fees; and ones with independent variation to the increase of turnovers and service coverage, as if, expenses for transportation responding to increase of maket price of fuel in the world. In 2010, the Company bore costs of sales and administration with compensation for executive staff members in 183.15 million baht, that comparatively with the same period of previous year; this was increased in 33.21 percent. The ratio of costs on sales and administration with compensation for executive staff members, comparing with turnovers and service coverage was 26.58 percent which was higher than one with the same period of previous year, as in 25.07 percent, because the turnovers and services in 2010 were increased, while some expenses on sales and administration with compensations for administrators were not directly variable with turnovers, particularly salaries and bonuses for employees and rental. Therefore, the proportion of costs of sales and administration with compensation for executive staff memberscomparing with turnovers and services were highly increased, nonetheless the Company also issued a policy with control of expenses of sales and administration with compensation for executive staff members, while the annual budgeting plan with assignment of focal points for controlling and inspecting on monthly basis. In 2011, the Company bore costs of sales and administration with compensation for executive staff members in 226.12 million baht, that comparatively with the same period of previous year; this was increased in 43.01 percent. The ratio of costs on sales and administration with compensation for executive staff members, comparing with turnovers and service coverage was 25.48 percent which was lower than one with the same period of previous year, as in 26.57 percent, because the turnovers and services in 2011 were increased, while some expenses on sales and administration with compensations for administrators were not directly variable with turnovers, particularly salaries and bonuses for employees and rental. Therefore, the proportion of costs of sales and administration with compensation for executive staff members comparing with turnovers and services were highly


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89

increased, nonetheless the Company also issued a policy with control of expenses of sales and administration with compensation for executive staff members, while the annual budgeting plan with assignment of focal points for controlling and inspecting on monthly basis. In 2012, the Company bore costs of sales and administration with compensation for executive staff members in 305.45 million baht, that comparatively with the same period of previous year; this was increased in 35.08 percent. The ratio of costs on sales and administration with compensation for executive staff members, comparing with turnovers and service coverage was 24.91 percent which was lower than one with the same period of previous year, as in 25.48 percent, because the turnovers and services in 2012 were increased, while some expenses on sales and administration with compensations for administrators were not directly variable with turnovers, particularly salaries and bonuses for employees and rental. Therefore, the proportion of costs of sales and administration with compensation for executive staff members comparing with turnovers and services were highly increased, nonetheless the Company also issued a policy with control of expenses of sales and administration with compensation for executive staff members, while the annual budgeting plan with assignment of focal points for controlling and inspecting on monthly basis.

PROFITS FROM OPERATION AND NET PROFIT In 2010, the Company gained profits from operation in amount of 130.65 million baht or with increase from the same period of previous year, in 48.07 percent. This was caused from increase of turnovers with services and refining margins, comparing with the same period in previous year. The net profit of the Company was 103.73 million baht or increase as 72.18 percent comparing with the same period in previous year and this was caused from increase of turnovers with services and refining margins, with decrease of corporate income tax. Therefore the net profit was increased around 43.49 million baht. In 2009 and 2010, the Company acquired net profits in rates of 10.99 and 15.05 percent respectively. The increase of net profit rate was caused from increase of turnovers with services and refining margins, with decrease of corporate income tax. In 2011, the Company gained profits from operation in amount of 165.53 million baht or with increase from the same period of previous year, in 25.93 percent. This was caused from increase of turnovers with services and refining margins, comparing with the same period in previous year. The net profit of the Company was 131.18 million baht or increase as 26.47 percent comparing with the same period in previous year and this was caused from increase of turnovers with services. In 2010 and 2011, the Company acquired net profits in rates of 15.05 and 14.78 percent respectively. In 2012, the Company gained profits from operation in amount of 209.45 million baht or with increase from the same period of previous year, in 26.53 percent. This was caused from increase of turnovers with services, comparing with the same period in previous year. The all-inclusive profit of the Company was 165.87 million baht or with increase from the same period of previous year, in 26.43 percent. This was caused from increase of turnovers with services, comparing with the same period in previous year. The Company gained net profit with increasing amount of 37.68 million baht. In 2011 and 2012, the Company acquired net profits in rates of 14.78 and 13.53 percent respectively.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

12.2.3 BUDGET WITH PRESENTATION OF FINANCIAL STATUS

ASSETS

On the date of 31st December 2010, the current assets of the Companywere comprising main components as, cash or item in equivalence with cash in 129.45 million baht, or around 21.88 percent of asset in total; short-term investment fund in 30.46 million baht, or around 5.15 percent of asset in total; net account receivable in 62.33 million baht, or around 10.57 percent of asset in total; and net inventory in 293.90 million baht, or around 49.67 percent of asset in total. The current asset with substantive change was cash or item in equivalence with cash in 30.79 million baht, since the Company drained 30.46 million baht for short-term investment with high return. The quantity of inventory was increased 68.32 million baht due to the Company undertook policies on investment for and retain of inventory in branches of the Company and of course also increased turnovers with services while there was investment for five new branches in 2010. On the date of 31st December 2010, main current assets would be enlisted as: net equipment in 15.20 million bahtor around 2.57 percent of asset in total; and deposit at financial institutes with warranty in 37.50 million baht or around 6.34 percent of asset in total. The amount of deposit at financial institutes with warranty was increased in 24.72 million baht, due to the Company used for warranty short-term loan of the Company. On the date of 31st December 2011, the current assets of the Company were comprising main components as, cash or item in equivalence with cash in 75.79 million baht, or around 11.71 percent of asset in total; short-term investment fund in 60.26 million baht, or around 9.31 percent of asset in total; net account receivable in 54.34 million baht, or around 8.39 percent of asset in total; and net inventory in 384.72 million baht, or around 59.44 percent of asset in total. The current asset with substantive change was cash or item in equivalence with cash in 53.66 million baht, since the Company drained 29.79 million baht for short-term investment with high return. The quantity of inventory was increased 90.82 million baht due to the Company undertook policies on investment for and retain of inventory in branches of the Company and of course also increased turnovers with services while there was investment for nine new branches in 2011. On the date of 31st December 2011, main current assets would be enlisted as: net equipment in 24.80 million bahtor around 3.83 percent of asset in total; and deposit at financial institutes with warranty in 25.0 million baht, or around 3.86 percent of asset in total. The amount of deposit at financial institutes with warranty was decreased in 12.5 million baht, due to the Company had terminated and closed account of loan from previous financial institutions with redemption of warranty for deposit in 12.5 million baht. On the date of 31st December 2012, the current assets of the Company were comprising main components as, cash or item in equivalence with cash in 29.93 million baht or around 4.01 percent of asset in total; short-term investment fund in 98.11 million baht or around 13.14 percent of asset in total; net account receivable in 76.75 million baht, or around 10.28 percent of asset in total; and net inventory in 479.42 million baht or around 64.22 percent of asset in total. The current asset with substantive change was cash or item in equivalence with cash in 45.95 million baht, since the Company drained 37.85 million baht for short-term investment with high return. The quantity of inventory was increased 94.70 million baht due to the Company undertook policies on investment for and retain of inventory in branches of the Company and of course also increased turnovers with services while there was investment for seventeen new branches in 2012.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

On the date of 31st December 2012, main current assets would be enlisted as: net equipment in 34.48 million baht,or around 4.61 percent of asset in total; intangible asset in 2.55 million baht, or around 0.34 percent of asset in total; and non-current asset in 14.61 million or around 1.96 percent of asset in total.

QUALITY OF ASSETS

(a) Account receivable and notes receivable and allowance for doubtful accounts:

The account receivable and notes receivable shall be classified upon due of debt payment as follows:

(Unit : Million Baht)

Remaining Period of Time 31stDEC 2010 Within due of payment; 60.70 Not exceeding 3 months; 1.83 Over 3 month-due, till 6 months; 0.00 Over 6 month-due, till 9 months; 0.00 Overdue for 12 months upwards; 1.04 Total; 63.57 Deduction for suspicious non-performanceloan; (1.04) Total-Net 62.53

Percent 31stDEC 2011 Percent 31stDEC 2012 Percent 95.49 52.86 97.40 75.82 97.38 2.88 0.30 0.55 0.92 1.18 0.00 0.09 0.17 0.01 0.01 0.00 0.00 0.00 0.00 0.00 1.63 1.02 1.88 1.11 1.43 100.00 54.27 100.00 77.86 100.00 (1.64) 98.36

(1.05) 53.22

(1.93) 98.07

(1.11) 76.75

(1.43) 98.57

The accounts receivable of the Company comprises debtors as department stores holding debts from sales of products through mega department stores where regularly do clearance of debts within 45 to 60 days. Most of accounts receivable in this type shall be able to pay on due and some of them would be clients making contracts likewise franchise of the Company with orders of products for the Company for distribution. The Company undertakes policies for providing credit to these accounts receivable within 45 to 60 days, while the Company allows them to pay for such goods and products with delay. This causes pending number of accounts receivable, anyhow the Company shall be able to collect money from clients on due. And for the direct sales to end users or consumers, there is none of credit scheme or payment by monthly installments. In additional, the Company has issued policies remedial for uncollectible accounts, the reserved fund would be installed when any account receivable has overdue debt, longer than 180 days, or underthe prediction with reference to record of debt payment in the past or any information given to executive entity. The allocation of reserved fund would respond to number of debtors with uncollectible accounts. On the dates of 31st December 2010, of 31st December 2011 and of 31st December 2012, the Company had install remedial for uncollectible accounts in 10.4, 1.05, 1.11 million baht respectively. The installment of remedial for uncollectible accounts was commissioned in accordance with policies remedial for uncollectible accounts in all periods and the Company had retain this reserved fund covering to all risks and problems.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

(b) Inventory: (Unit : Million Baht)

ITEMS Diamond jewelry; Carat Diamond-ready-to-use products; Pending work; Plain setting; Gold; Diamond-raw material; Consumable material; Total-Net

31st DEC 2010 Percent 31st DEC 2011 Percent 31st DEC 2012 Percent 207.51 70.61 296.24 77.00 402.26 83.91

39.91 13.44 2.07 0.03 28.88 2.05 293.89

13.58 4.57 0.70 0.01 9.83 0.70 100.00

43.21 1.49 2.83 0.37 37.57 3.01 384.72

11.23 0.39 0.73 0.10 9.77 0.78 100.00

17.88 3.73 13.31 2.78 5.11 1.07 0.49 0.10 34.41 7.18 5.96 1.24 479.42 100.00

On the dates of 31st December 2010, of 31st December 2011 and of 31st December 2012, the Company held inventories in amounts of 293.89, 384.72 and 479.92 million baht respectively, the inventories with the most severe change were readymade products, Diamond jewelry and Carat Diamond. On the date of 31st December 2010, the amount of inventory of the Company was increased from 225.58 million baht to 298.89 million baht at the end of period in previous year; this would be calculated as an increasing amount in 68.31 million baht or 30.28 percent. The most changing sector, in 2010, was readymade products and jewelry which increasing branches from 73 units to be 78 units. On the date of 31st December 2011, the amount of inventory of the Company was increased from 293.89 million baht to 384.72 million baht at the end of period in previous year; this would be calculated as an increasing amount in 90.83 million baht or 30.91 percent. The most changing sectors, in 2011, were readymade products andornaments, with increasing amount in 88.73 million baht, carat diamond-readymade product, with increasing amount in 3.30 million baht. These amounts shall be caused from the increase of branches from 78 units to be 79 units. On the date of 31st December 2012, the amount of inventory of the Company was increased from 384.72 million baht to 479.42 million baht at the end of period in previous year; this would be calculated as an increasing amount in 94.70 million baht or 24.62 percent for the same period in previous year. The most changing sectors, in 2012, were readymade products and jewelry, with increasing amount in 106.02 million baht, carat diamond-readymade product, with decreasing amount in 25.33 million baht. These amounts shall be caused from the increase of branches from 79 units to be 96 units.


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For the gist of policies on inventory management, in category of diamond jewelry and decorations, the Company would collect information and quantity of products on basis of forms and formats for classification and tracking of products with slow pace. If any is identified with slow pace, the Company shall move such products to other branches for increase of possibility with choice of sales. And at the end, if any form of product does not match with demands and is left in stock without value-adding, the Company shall set up an event with promotion for sales, likewise the increase of discount portion with reduce of profit and finally if such product shall not be sold, the Company shall dictate a policy with exploitation of such product, e.g. to reformat the form of them with new style of product. And for those readymade products in form of carat diamond or raw materials, they would not be managed on basis of time and out of date, but on basis of principal with global market price with estimation of depreciation of product. (Unit : Million Baht)

ITEMS 31st DEC 2010 Net profit; 103.73 Adjustment of items with impact to net profit; 31.81 Profit from operation before change in assets and debts from operation; Change in assets; (100.35) Change in debts; 64.23 Payment of interest; (0.74) Payment of income tax; (28.25) Cash flow from operations; 70.43 Cash flow from investment; (36.31) Cash flow from fund-raising activities; (64.54) Increase (decrease) of cash flow and items in equivalent; (30.41) Net Cash flow and items in equivalent, on the date of beginning; 160.24 Cash flow and items in equivalent, on the date of ending; 129.45

31st DEC 2011 131.19 46.08

31st DEC 2012 165.87 58.77

(66.67) (7.46) - (32.66) 70.48 (43.21) (80.93) (53.66)

(125.41) 30.14 (37.15) 92.22 (28.20) (109.88) (45.86)

129.45

75.79

75.79

29.93

In reference to above figures, the Company gains profits in continuity in every year, but the cash flow gained from operation of the Company is sporadically reduced. The turnovers with service coverage are increased in every year and of course shall be cause of increase of current capital for procuring and purchasing of raw material and retain of inventory for allowing clients to be able to freely choose. The Company acquires such working capital from accounts payable that receiving credit allowance within 90-180 days and shall be a part of benefits from operation of the Company. And from the operation of business of the Company with extension of service coverage, it caused reduce of cash flow with deficiency and spending of cash for procuring and purchasing of products. The Company had taken a loan from commercial banks


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in short-term loan whenever it really needed cash with liquidity. Currently, the Company has a bank loan from commercial bank with adequacy for running of business, so there is none of problem with liquidity. Its liquidity proportions with substances shall be presented as follows: In 2010, the Company held liquidity proportion in 2.53 folds with slight reduction from 3.08 folds in 2009. The average time for collecting of debt would be 33 days which was slightly different from 35 days in 2009. The duration of distribution for product would be 247 days in average, while the duration for clearance of debt in average would be 108 days, which was increased from 101 days in 2009. In 2011, the Company held liquidity proportion in 2.89 folds with increase from 2.58 folds in 2010. The average time for collecting of debt would be 24 days which was different from 33 days in 2010. The duration of distribution for product would be 245 days in average, while the duration for clearance of debt in average would be 117 days, which was increased from 108 days in 2010. In 2012, the Company held liquidity proportion in 2.92 folds with increase from 2.89 folds in 2011. The average time for collecting of debt would be 19 days which was different from 24 days in 2011. The duration of distribution for product would be 217 days in average that reduce, which lessening than 245 days in 2011, while the duration for clearance of debt in average would be 82 days, which was increased from 117 days in 2010.

EFFICIENCY OF OPERATION The Company does not have a manufacturing factory for its products, while also rents areas for distribution of products rather than purchasing plots of lands, therefore it holds very limit of permanent assets. For this matter, the ratio of returns from permanent assets shall not be used to evaluate effectiveness on usage of assets of the Company, in contradiction it shall be used as reflection of efficiency. In 2010, the ratio of returns from permanent assets was 19.18 percent because the Company gained higher profits from business, while in 2011, the ratio of returns from permanent assets was increased from 19.18 to 21.18 percent and in 2012, the ratio of returns from permanent assets was increased from 21.18 to 23.80 percentbecause the Company gained higher profits from business.

SOURCE OF CAPITAL

DEBTS

On 31st December 2010, the Company bore amount of loan in 105 million baht from financial institutes, as: a 3-year loan from trust receipt and promissory notes on 1-6 months from commercial banks with different rates of interests, in 5.8-6.50 percent per year. On 28th December 2010, the Company shall pay all amount of debt to such financial institutes, while shall make a new loan from them, with installment of 25 million baht fixed-account, as a warranty for loan, to such new financial institutes.


Annual Report 2012 Jubilee Enterprise Public Company Limited

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On 31st December 2011, the Company bore amount of loan in 115 million baht from financial institutes, as: a 3-year loan from trust receipt and promissory notes on 1-6 months from commercial banks with different rates of interests, in 6.50-7.50 percent per year. The Company installed a 25 million baht fixed-account as a warranty for loan to financial institutes. On 31st December 2012, the Company bore amount of loan in 115 million baht from financial institutes, as: a 3-year loan from trust receipt and promissory notes on 1-6 months from commercial banks with different rates of interests, in 6.50-7.50 percent per year, and without installment of fixed-account as a warranty for loan.

PORTION OF SHARES

On 31st December 2010, the portion of shares of the Company, owning by shareholders, was 372.89 million baht, while there was an accumulated profit with non-allocation in 94.96 million baht. And in the Annual General Meeting of Shareholders in 2010, the meeting adopted a resolution with approval for payment of dividend from profit of operation in 2009 in 0.21 baht per share and in the meeting of the Company, no.3/2553, the meeting adopted a resolution with approval for payment of dividend from profit of operation during January-June 2010 in 0.15 baht per share. On 31st December 2011, the portion of shares of the Company, owning by shareholders, was 434.03 million baht, while there was an accumulated profit with non-allocation in 151.98 million baht. And in the Annual General Meeting of Shareholders in 2011, the meeting adopted a resolution with approval for payment of dividend from profit of operation in 2010 in 0.20 baht per share and in the meeting of the Company, no.3/2554, the meeting adopted a resolution with approval for payment of dividend from profit of operation during January-June 2011 in 0.23 baht per share. On 31st December 2012, the portion of shares of the Company, owning by shareholders, was 499.26 million baht, while there was an accumulated profit with non-allocation in 216.19 million baht. And in the Annual General Meeting of Shareholders in 2012, the meeting adopted a resolution with approval for payment of dividend from profit of operation in 2011 in 0.29 baht per share and in the meeting of the Company, no.4/2555, the meeting adopted a resolution with approval for payment of dividend from profit of operation during January-June 2012 in 0.30 baht per share.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

FACTORS AND INFLUENCES TOWARDS OPERATION OR FINANCIAL STATUS IN THE FUTURE The factors and influences that might create impact to operation or financial status in the future, apart from those mentioned in risk factors, shall be enlisted as follows:

1. CHANGE OF FINACIAL PROPORTION DUE TO INCREASING CAPITAL FROM INCREASE OF STOCK CAPITAL

On 31st December 2010, the Company held paid-up registered capital in amount of 171,121,500 baht with given value, as 1 baht per share, in 175,000,000 ordinary shares and gained net profit in 2010 in amount of 103.73 million baht, with net profit rate per volume weighted average in 0.61 baht per share, and value in account in 2.18 baht per share, as per calculation from quantity of ordinary shares of the Company, on 31st December 2010. On 31st December 2011, the Company held paid-up registered capital in amount of 172,287,750 baht with given value, as 1 baht per share, in 175,000,000 ordinary shares and gained net profit in 2011 in amount of 131.18 million baht, with net profit rate per volume weighted average in 0.77 baht per share, and value in account in 2.52 baht per share, as per calculation from quantity of ordinary shares of the Company, on 31st December 2011. On 31st December 2012, the Company held paid-up registered capital in amount of 173,297,625 baht with given value, as 1 baht per share, in 175,000,000 ordinary shares and gained net profit in 2012 in amount of 165.87 million baht, with net profit rate per volume weighted average in 0.96 baht per share, and value in account in 2.88 baht per share, as per calculation from quantity of ordinary shares of the Company, on 31st December 2012. In additional, if there isa purchasing of ordinary shares of the Company, as per the certificate of entitlement issued to members of the Board of Directors and employees of the Company (with identification of bearer and non-negotiable) in total 5,000,000 units, the Company held paid-up capital in amount of 175,000,000 baht with given value, as 1 baht per share, in 175,000,000 ordinary shares and shall gain lower profit per share in the future. The net profit per share, in 2009, was reduced from a purchasing of ordinary shares of the Company, as per all certificates of entitlement (Fully Diluted) in 0.02 baht per share. Such increase of ordinary shares of the Company shall create more value of share under account, in 2.25 baht per share, as per calculation from an account of the Company, on 31st December 2009. Butwithin 5,000,000 capital increase ordinary shares with responding to exercise of conversion right upon such certificate of


Annual Report 2012 Jubilee Enterprise Public Company Limited

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entitlement shall not be exceeding 25 percent per year of such capital increase ordinary shares of each individual holding allocation, therefore the reduction of net profit rate per share would not be immediately occurred. Anyhow after the proposal for sales of capital increase ordinary shares and exercise of right to purchase ordinary shares of the Company, as per the certificate of entitlement issued to members of the Board of Directors and employees of the Company, the Company shall acquire more current fund with decrease of interest burden of the Company. In additional, the turnover of the Company, with the projection on growth of industry and tactics for increase of service coverage through branches of the Company, shall cause increase of net profit of the Company that shall help to reduce impacts towards reduction of profit per share and value of share under account increased from quantity of shares.

COMPENSATION FOR CHARTERED ACCOUNTANT

According to the Resolution adopted in the Annual General Meeting of Shareholders in 2012, the Company had agreed to pay compensation for account auditing, to Mr. Prawit Viwanthananut, a chartered accountant with license number 4917 of the ANS Auditing Office, in charge of auditor for account in year round 2012, in amount of 585,000 baht.

OTHER SERVICE FEES

None of them.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

THE BOARD OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE FINANCIAL STATEMENT TO SHAREHOLDERS The Board of Directors of the Company is an entity holding responsibilities on financial reports of the Jubilee Enterprise Public Company Limited that were made under standards of financial statements under the Act on Accounting, B.E. 2543 (2000) and under the Securities and Stock Exchange Commission on Documentation and Presentation on Financial Statements under the Act on Securities and Stock Exchange, B.E. 2535 (1992) to disclose necessary information with adequacy in the Footnotes to Financial Statements, audited by an auditor in reports of auditor for benefits of shareholders and all investors in general with transparency. The Board of Directors of the Company shall hold duties on supervision and development of governance, including on provision and maintain of risk management system and internal controlling. The Board of Directors of the Company had appointed the Auditing Committee, comprising independent members with duties on supervision of financing, evaluation of internal controlling system and internal audit with efficiency and effectiveness. The discretions and opinions of the Audit Committee shall be recorded and published in its report which shall be affixed with this Annual Report. The Board of Directors of the Company opines that from the aforementioned operations, they create reliability with trustfulness on financial budget of the Jubilee Enterprise Public Company Limited with presentation of financial status, results of performance and cash flow on annual basis until the date of 31st December 2012, in accuracy upon substantive matters.

(Mr. Manu Leopairote) Chairman of the Board of Directors of the Company

(Mr. Viroj Phonprakit) Chief Executive Officer


Annual Report 2012 Jubilee Enterprise Public Company Limited

99

REPORT OF THE AUDIT COMMITTEE Dear Shareholders, Audit Committee of the Jubilee Enterprise Public Company Limited is appointed by the Board of Directors of the Company, consisting of three independent knowledgeable persons holding qualifications under the Notification of Securities and Stock Exchange Commission, serving in different capacities as: Mr. Amnuay Nakarachata-amorn, as the Chair of Audit; Mr. Pirote Maleehorm, as a member; Miss Zonwa Denmeka, as a member; and Mr. Warawuth Sethanarak, as a secretary to the Audit. Audit Committee has fulfilled its duties and responsibilities in accordance with its assignments and in compliance with the Notification of Securities and Stock Exchange Commission. Within the accounting year round in 2012, there were four meetings of the Audit with full attendance and presentation of all members, while there were number of meetings with executive staff members, chartered accountants and internal auditors, as follows:

1. The review on budget presenting financial status with profit and lost on quarterly basis and financial statements on the year of 2012 had been set up with a series of meetings for inquiry and hearing of clarification and explanation from chartered accountants and executive staff members, on accuracy and completion of financial statements and adequacy of information disclosure, including the receipt of observations and recommendations of chartered accountants in 2012, Audit Committee hereby gave opinions in line with chartered accountants that such financial statements are accurate and in compliance with financial statement standards in general. 2. The review on internal auditing for evaluating of appropriateness and efficiency of internal auditing system had been conducted for enhancement the operation with achievement of designated goals. The internal auditing report in 2012, under an approved plan, had been considered particularly with covering of significant working systems of the Company and there is none of weakness point or shortcoming in any substantive matter. 3. The review and examination of internal auditing system for evaluation of efficiency of internal auditing unit had been conducted with consideration on scope of operations, duties and responsibilities with independency, manpower and budget of internal auditing unit, including the discretion on modernization and compatibility of charter and internal audit with current situation and in compliance with the guidebook on internal audit of the Stock Exchange of Thailand. Audit Committee hereby opined that the Company owns the internal auditing system with adequacy, appropriateness and efficiency, in compliance with international standards. 4. The review on operations of laws on securities and stock exchange, regulations of the Stock Exchange of Thailand and relevant laws on business of the Company had been conducted, including operations under regulations of the Company and legal bindings of the Company with any external person.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

5. The review and giving of opinions to list of interactions or items with conflict of interest, including disclosure of such information, had been conducted in compliance with regulations of the Stock Exchange of Thailand and of Office of the Securities and Stock Exchange. Audit had considered and gave opinions in line with those from auditors and opined that all substantive contents with presentation of financial statement and footnotes to financial statement were accurate and complete. 6 The consideration, recruitment and selection for an auditor with proposal on compensation had been designed and proposed to the Board of Directors of the Company for asking an approval from the Annual General Meeting of shareholders, while the Auditing Committee considered results of operation, independency and appropriateness on compensation and proposed that the ANS Audit Co., Ltd. shall be appointed with entrustment of Mr. Prawit Viwanthananut, a Certified Public Accountants with license number 4917; or Mr. Athipong Atipongsakul, a Certified Public Accountants with license number 3500; or Mr. Bunjong Pichayaprasat, a Certified Public Accountants with license number 7147; or Mr. Thoetthong Thepmangkorn, a Certified Public Accountants with license number 3787 to be an auditor of the Company in 2013, with comments on appointment of auditors as follows: - An auditor with independency and without any relation with the Company or any affiliating subsidiary company;

- In the past accounting year round, a designated auditor had perform his task with knowl edge, competency in profession and gave recommendations on internal controlling system and risks with independency of operations;

CONCLUDING OBSERVATIONS OF THE AUDIT COMMITTEE In the year 2012, the Audit Committee had fully acted its duties and responsibilities responding to its assignments with competency and independency. The Committee opined that the Company had documented a report on financial status and operation with accuracy, while there is internal controlling system with internal audit in appropriateness and efficiency. The Committee also acted in compliance with supervising system on good governance with adequacy, transparency and reliability, covering the development and improvement of operation with high quality and appropriateness of contexts of business in continuity.

(Amnuay Nakruchata-amorn) Chairman of Audit Committee


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Annual Report 2012 Jubilee Enterprise Public Company Limited

AUDITOR’S REPORT To the Board of Directors and Shareholders of Jubilee Enterprise Public Company Limited I have audited the accompanying the financial statements of Jubilee Enterprise Public Company Limited which comprise the statement of financial position as at December 31, 2012, and the statement of comprehensive income, statement of changes in shareholders’ equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion, the financial statements present fairly, in all material respects, the financial position of Jubilee Enterprise Public Company Limited as at December 31, 2012, and its financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

ANS Audit Co., Ltd. Bangkok, February 22, 2013 The accompanying notes are an integral part of these financial statements.

Bunjong Pichayaprasat Certified Public Accountant Registration Number 7147


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Annual Report 2012 Jubilee Enterprise Public Company Limited

JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2012 AND 2011

Baht Note ASSETS

2012

2011

3

Current assets Cash and cash equivalents

5

29,925,889.86

75,787,030.33

Short-term investments

6

98,110,983.60

60,255,029.04

4, 7

76,750,906.04

54,338,350.50

8

479,421,226.79

384,723,551.63

Other current assets

10,822,604.78

8,363,858.69

695,031,611.07

583,467,820.19

Trade and other receivables Inventories

Total current assets

Non-current assets Restricted financial institution deposits

9

Building and equipment

10

34,382,324.31

24,805,209.55

Intangible assets

11

2,545,496.47

4,438,624.55

Other non-current assets

14,606,007.61

9,566,694.69

Total non-current assets

51,533,828.39

63,810,528.79

Total assets

746,565,439.46

647,278,348.98

The accompanying notes are an integral part of these financial statements.

-

25,000,000.00


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Annual Report 2012 Jubilee Enterprise Public Company Limited

JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2012 AND 2011

Baht Note LIABILITIES AND SHAREHOLDERS’ EQUITY

2012

2011

3

Current Liabilities Trade and other payables

4, 13

171,057,658.54

153,305,568.53

Current portion of debts

16

8,664,199.77

7,703,623.97

Accrued income tax

26

22,095,531.21

16,616,014.50

36,419,224.50

24,162,316.92

238,236,614.02

201,787,523.92

Other current liabilities

Total current liabilities

Non-current liabilities Long-term loans from financial institutions

14

-

6,666,656.00

Liability under finance lease

15

3,723,614.59

1,262,577.02

Employee benefit obligations

17

5,346,722.99

3,528,994.6800

Total non-current liabilities

9,070,337.58

11,458,227.70

Total liabilities

247,306,951.60

213,245,751.62

The accompanying notes are an integral part of these financial statements.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2012 AND 2011

Baht Note LIABILITIES AND SHAREHOLDERS’ EQUITY

2012

2011

3

SHAREHOLDERS’ EQUITY Share capital

18, 19

Authorized share capital 175,000,000 ordinary shares, Baht 1 par value

175,000,000.00

175,000,000.00

Issued and paid-up share capital

173,297,625 ordinary shares, in year 2012 and

172,287,750 ordinary shares, in year 2011, Baht 1 per share

Premium on share capital Retained earnings

21 20, 22

173,297,625.00

172,287,750.00

92,267,172.80

92,267,172.80

Appropriated to legal reserve

17,500,000.00

17,500,000.00

Unappropriated

216,193,690.06

151,977,674.56

Total shareholders’ equity

499,258,487.86

434,032,597.36

Total liabilities and shareholders’ equity

746,565,439.46

647,278,348.98

The accompanying notes are an integral part of these financial statements.


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Annual Report 2012 Jubilee Enterprise Public Company Limited

JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

Baht Note

2012

2011

1,226,230,285.32

887,316,244.47

(716,021,706.79)

(497,665,606.65)

Gross profit

510,208,578.53

389,650,637.82

Other income

4,690,668.32

3,300,323.33

3, 4 Revenue from sales Cost of sales

23

Selling expenses

23

(227,580,887.17)

(154,624,432.09)

Administrative expenses

23

(77,866,895.15)

(71,494,517.80)

Finance costs

24

(952,445.63)

(1,298,062.71)

Profit before income tax

208,499,018.90

165,533,948.55

Income tax expense

(42,633,230.90)

(34,348,117.08)

165,865,788.00

131,185,831.47

27

Profit for the year Other comprehensive income Total comprehensive income

-00 165,865,788.00

-00 131,185,831.47

Earnings per share Basic earnings per share

3

0.96

0.77

Weighted average number of ordinary shares (shares) 3

172,439,507.00

171,290,846.00

3

0.96

0.75

Weighted average number of ordinary shares (diluted) (shares) 3

173,387,274.00

174,654,291.00

Diluted earnings per share

The accompanying notes are an integral part of these financial statements.


106

JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Baht Retained earnings Issued and paid-up Premium on Appropriated Unappropriated Note share capital share capital Beginning balance as at January 1, 2011 Effects of change in accounting policy

92,267,172.80

14,542,198.47

94,957,969.15

372,888,840.42

-00

-00

-00

2,373,920.47

2,373,920.47

171,121,500.00

92,267,172.80

14,542,198.47

97,331,889.62

375,262,760.89

00

00

00

-00

-00

-00

131,185,831.47 131,185,831.47 (73,582,245.00) (73,582,245.00)

Changes in shareholders’ equity Comprehensive income for the year

Dividends

20

-00

-00

-00

Appropriated - legal reserve

22

-00

-00

2,957,801.53

Issue of ordinary shares

18

1,166,250.00

00-00

172,287,750.00

92,267,172.80

17,500,000.00 151,977,674.56 434,032,597.36

-00

-00

-00 165,865,788.00 165,865,788.00

Ending balance as at December 31, 2011

-00

(2,957,801.53) -

--- 1,166,250.00

Changes in shareholders’ equity Comprehensive income for the year Dividends

20

-00

-00

-00 (101,649,772.50) (101,649,772.50)

Issue of ordinary shares

18

1,009,875.00

-00

-00

173,297,625.00

92,267,172.80

Ending balance as at December 31, 2012

-00

1,009,875.00

17,500,000.00 216,193,690.06 499,258,487.86

The accompanying notes are an integral part of these financial statements.

Annual Report 2012 Jubilee Enterprise Public Company Limited

171,121,500.00 4

Adjusted balance

Total


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Annual Report 2012 Jubilee Enterprise Public Company Limited

JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

Baht

CASH FLOWS FROM OPERATING ACTIVITIES Net profit before income tax Adjustments to reconcile net profit before income tax to net cash provided by (used in) operating activities Depreciation and amortization Bad debt and doubtful accounts (reversal) loss from impairment of assets Unrealized gain of trading security Unrealized (gain) loss on exchange rate Employee benefit liabilities Interest income Interest expenses Profit from operating activities before changes in operating assets and liabilities Change in operating assets (increase) decrease Trade and other receivables Inventories Other current assets Restricted financial institution deposits Other non-current assets Change in operating liabilities increase (decrease) Trade and other payables Other current liabilities Cash generated from operation Income tax paid Net cash provided by operating activities

The accompanying notes are an integral part of these financial statements.

2012

2011

208,499,018.90

165,533,948.55

14,147,527.10 (201,286.89)0 1,612,884.90 (190,247.47) (129,342.98) 1,817,728.31 (1,863,922.13) 952,445.63

7,725,238.88 233,936.32 (1,911,803.24) 3,528,994.68 (2,955,729.98) 1,296,562.71

224,644,805.37 (22,635,075.78) (95,325,223.57) (2,405,900.84) (5,043,068.79) 17,881,432.99 12,256,907.58 129,373,876.96 (37,153,714.19) 92,220,162.77

177,274,754.40 8,627,052.61 (88,454,166.83) 3,465,711.99 12,500,000.00 (2,816,574.61) (17,687,107.69)00 10,228,348.24 103,138,018.11 (32,658,996.82) 70,479,021.29


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Annual Report 2012 Jubilee Enterprise Public Company Limited

JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

Baht 2012

2011

Increase in short-term investments

(12,665,707.09)

(29,796,703.17)

Purchases of equipment

(17,496,392.88)

(14,042,434.20)

Purchases of intangible assets

(62,000.00)

(2,224,755.00)

Interest received

2,019,879.88

2,849,698.05

Net cash provided by (used in) investing activities

(28,204,220.09)

(43,214,194.32)

CASH FLOWS FROM INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES Repayment for long-term loans from financial institutions

(6,666,672.00)0 (6,666,672.00)

Payment for liability under finance lease

(1,618,068.02) 0 (558,238.51)

Cash received from increase in ordinary shares

1,009,875.0000 1,166,250.00

Interest expense Dividend payment

(952,445.63)

(1,296,562.71)

(101,649,772.50) (73,571,222.70)

Net cash used in financing activities

(109,877,083.15) (80,926,445.92)

Net decrease in cash and cash equivalents

(45,861,140.47)

(53,661,618.95)

Cash and cash equivalents at the beginning of the year

75,787,030.33

129,448,649.28

Cash and cash equivalents at the end of the year

29,925,889.86

75,787,030.33

Supplementary disclosure of cash flows information For year 2012 1) The Company purchased vehicle and office equipment in the amount of Baht 5.04 million by entering into a finance lease agreement. 2) The Company transfered restricted financial institution deposits in the amout of Baht 25 million to short-term investment. For year 2011 1) The Company recorded effects of changes in accounting policies for the inventory valuation method with retained earnings as at January 1, 2011 in the amount of Baht 2.37 million. 2) The Company purchased office equipment in the amount of Baht 1.93 million by entering into a finance lease agreement. The accompanying notes are an integral part of these financial statements.


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JUBILEE ENTERPRISE PUBLIC COMPANY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

1. GENERAL INFORMATION Jubilee Enterprise Public Company Limited, “the Company” was incorporated in Thailand under the Civil and Commercial Code on November 3, 1993, registered no. 0105536125477 and becamea public company limited on July 8, 2008, registered no. 0107551000177, to operate a business as a retail and wholesale of jewelry. On October 19, 2009, the Company was listed on the Stock Exchange of Thailand in “Market for Alternative Investment” (mai).

The head office is located at 721 Silom Road, Silom, Bang Rak, Bangkok.

The major shareholdersare as follows: Rate of shareholding Name/Company Nationality/Country percentage Pornprakit Family K-SME Venture Capital Company Limited

Thai Thailand

2012 58.96 2.03

2011 59.47 2.04

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The accompanying financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) in conformity with generally accepted accounting principles in Thailand. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated September 28, 2011, issued under the Accounting Act B.E. 2543.


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The accompanying financial statements have been prepared in the Thai language and expressed in Thai Baht. Such financial statements have been prepared for domestic reporting purposes. For the convenience of the readers not conversant with the Thai language, an English version of the financial statements has been provided by translating from the Thai version of the financial statements. The preparation of the financial statements in conformity with Thai Financial Reporting Standards (“TFRS”) requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Subsequent actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, and in the period of the revision and future periods, if the revision affects both current and future periods.

The changes in accounting policies as at January 1, 2011 In the year 2011, the Company has adopted new and revised TFRS which such transition affected the financial statements reflected from TAS No. 19 “Employee Benefits”, which applied a transitional provision that such liability is recognized and accounted of amortization to expenses within 3 accounting periods ending December 31, 2013.

New and revised Thai Financial Reporting Standards not yet effective The Company has not yet adopted the new and revised Thai Financial Reporting Standards as follows: a) Thai Accounting Standards (TAS), Thai Financial Reporting Standards (TFRS), Thai Interpretation (TI) and guidelines which are effective for the financial statements for the period beginning on or after January 1, 2013 as follows:


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TAS/TFRS/TI/FAP’s Announcement TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) TFRS 8 TI 10 TI 21 TI 25 No. 34/2555

Topic Income Taxes Accounting for Government Grants and Disclosures of Government Assistance The Effects of Changes in Foreign Exchange Rate Operating Segments Government Assistance – No Specific Relation to Operating Activities Income Taxes – Recovery of Revalued Non-Depreciable Assets Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders Accounting Treatment Guidance for Transfers of Financial Assets

The management of the Company is assessing the impacts of these standards, interpretations and FAP’s Annoucement on the financial statements for the year in which they are initially applied b) Thai Financial Reporting Interpretations (TFRI) and Thai Interpretation (TI) which are effective for the financial statements for the period beginning on or after January 1, 2014 as follows:

TFRI/TI TFRI 4 TFRI 12 TFRI 13 TI 29

Topic Determining whether an Arrangement contains a Lease Service Concession Arrangements Customer Loyalty Programmes Service Concession Arrangements: Disclosures

The management of the Company is assessing the impacts of these standards and interpretations on the financial statements for the year in which they are initially applied.


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3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The measurement bases used in preparing the financial statements Other than those disclosed elsewhere in the summary of significant accounting policies and other notes to the financial statements, the financial statements are prepared on the historical cost basis.

Revenues

Sale of goods and service income Revenue excludes value added taxes or other sales taxes and is arrived at after deduction of trade discounts. Revenue is recognized in the statements of comprehensive income when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognized if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Interest income Interest income is recognized as interest accrues, based on the effective rate method. Other income Other income are recognized on an accrual basis.

Expenses

Operating leases Payments made under operating leases are recognized in the statements of comprehensive income on a straight-line basis over the term of the lease. Lease incentives received are recognized in the statements of comprehensive income as an integral part of the total lease payments made. Contingent rentals are charged to the statements of comprehensive income in the accounting period in which they are incurred. Finance costs Interest expenses and similar costs are charged to the statements of comprehensive income in the period in which they are incurred, except to the extent that they are capitalized as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component of finance lease payments is recognized in the statements of comprehensive income using the effective interest rate method.


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Other expenses are recognized on an accrual basis.

Employee benefits

Short-term benefits The Company recognizes salaries, wages, bonus and social security contribution as expenses on an accrual basis Post-employment benefits – defined contribution plan The Company operates a provident fund that is a defined contribution plan. The assets of which are held in a separate trust fund. The provident fund is funded by payments from employees and the company. Contributions to the provident fund are charged to the statement of comprehensive income in the period to which theyrelate. Post-employment benefits – defined benefit plan The employee benefits liabilities in relation to the severance payment under the labor law is recognised as a charge to results of operations over the employee’s service period. It is calculated by the estimation of the amount of future benefit to be earned by the employee in return for the service provided to the Company through the service period up to the retirement age and the amount is discounted to determine the present value. The reference discount rate is the yield rate of government bonds as at the reporting date. The calculation is based on the actuarial technique using the Projected Unit Credit Method. When the employee benefits are improved, the portion of the increased benefit relating to past service rendered by employee is recognized in the statements of comprehensive income on a straight-line basis over the average period until the benefits become vested. When the actuarial assumptions are changed, the Company recognizes actuarial gains (losses) in the profit or loss in the period in which they arise.

Cash and cash equivalents

Cash and cash equivalents are cash on hand, current deposits and savings deposits, cash at bank with an original maturity of 3 months and short-term investments with high liquidity excluded term deposits and deposits at bank on obligation.


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Investments

Short-term investments which are marketable equity securities held for trading are stated at fair value and recognized changes in fair value in the statement of comprehensive income, which are recorded in “Unrealized gain/loss on changing in investments in securities held for trading�.

Costs of investment sold during the year are calculated using the weighted average cost method.

Trade and other receivable

Trade and other receivable are stated at their invoice value less allowance for doubtful accounts.

Trade accounts receivable are stated at the net realizable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debtor aging.

Inventories Finished goods are valued at the lower of cost or net realizable value.

Raw material, work in process and finished goodswhich arejewelry and diamond size carats and suppliesare valued at first-in, first-out cost method. Finished goodswhich are gold jewelry 18K, andsmall stone diamondare valued at first-in, first-out cost method.

Cost comprises all costs of purchases, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories, cost includes an appropriate share of overhead based on normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business less the costs to make the sale.

An allowance is made for all deteriorated, damaged, obsolete and slow-moving inventories.

Building and equipment

Building and equipmentare stated at cost less accumulated depreciation, and allowance for impairment loss (if any).


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Depreciation Depreciation of building and equipmentare calculated by reference to their costs, on the straight-line basis over estimated useful lives of 5 years. Depreciation is included in determining income and no depreciation is provided on asset in progress. Repairs and maintenance are charged to the statements of comprehensive income during the financial years in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Company. Major renovations are depreciated over the remaining useful life of the related asset. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in operating profit.

Impairment of assets

The carrying amounts of the Company’s assets are reviewed at each reporting period date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognized in the statements of comprehensive income unless it reverses a previous revaluation credited to equity, in which case it is charged to equity. When a decline in the fair value of an available-for-sale financial asset has been recognized directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognized directly in equity is recognized in the statements of comprehensive income even though the financial asset has not been derecognized. The amount of the cumulative loss that is recognized in the statements of comprehensive income is the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the statements of comprehensive income. Calculation of recoverable amount The recoverable amount is the greater of the assets’ net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.


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Reversals of impairment An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

Finance lease Leases of property, plant or equipment which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance costs so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance costs, are included in other long-term payables. The interest element of the finance cost is charged to the statements of comprehensive income over the lease period. The property, plant or equipment acquired under finance leasing contract is depreciated over the shorter of the useful life of the asset or the lease term. Leases not transferring a significant portion of the risks and rewards of ownership to the lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statements of comprehensive income on a straight-line basis over the period of the lease. When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognized as an expense in the period in which termination takes place.

Foreign currency Foreign currency account transactions Transactions in foreign currencies are converted at the foreign exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are converted to Thai Baht at the foreign exchange rates ruling at that date. Forward exchange contracts at the transaction date are converted to Thai Baht by using the contract rates.


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Outstanding forward exchange contracts are marked to market by comparing contract rates to forward rates established by the contracting Bank with the same maturity. At the end of year, the unrealized gains or losses on outstanding forward exchange contracts, calculated as described above, are included within other receivables or other payables from forward exchange contracts in the statement of financial position.

Gain or loss upon conversion is included in the statements of comprehensive income.

Provisions A provision is recognized in the statement of financial position when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Income tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the end of the reporting period.

Dividends paid Dividends and interim dividend payments are recorded in the financial statements in the period in which they are approved by the shareholders’ meeting or the Board of Directors.

Basic earnings per share Basic earnings per share is calculated by dividing net profit for the years by the weighted average number of ordinary shares outstanding during the yearsas follows:


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For the years ended December 31, 2012 and 2011.

2012

2011

Net profit for the years (Baht) 165,865,788.00 131,185,831.47 Weighted average number of ordinary shares (shares) Issued ordinary shares at the beginning of the years 172,287,750.00 171,121,500.00 Effect of shares issued during the years 151,757.00 169,346.00 Weighted average number of ordinary shares (shares) Basic earnings per share (Baht)

172,439,507.00

171,290,846.00

0.96

0.77

Diluted earnings per share

Diluted earnings per share for the years ended December 31, 2012 and 2011 are calculated by dividing the net profit of ordinary shareholders by the sum of the weighted average number of ordinary shares outstanding during the year plus the weighted average number of shares to be issued for the exercise of all dilutive potential ordinary shares into ordinary shares in the amount of 1.01 million shares (In 2011: 3.36 million shares).The calculation assumes that the holders will exercise dilutive potential ordinary share into ordinary shares when the exercise price is lower than fair value of ordinary shares. The basic earnings per share and the diluted earnings per share are as follows:

For the years ended December 31, 2012 and 2011.

2012  

Baht

Shares

Net profit

Baht

Weighted average number of ordinary Earnings per share shares

Earnings per share           Basic earnings per share 165,865,788.00 172,439,507.00 0.96 Effect dilutive potential ordinary shares - 947,767.00 Diluted earnings per share 165,865,788.00 173,387,274.00 0.96


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2011  

Shares

Baht

Net profit

Baht

Weighted average number of ordinary Earnings per share shares

Earnings per share           Basic earnings per share 131,185,831.47 171,290,846.00 0.77 Effect dilutive potential ordinary shares - 3,363,445.00 Diluted earnings per share 131,185,831.47 174,654,291.00 0.75

The Company issued warrants to the directors and employees with the details of the warrants in the Note 19 to the financial statements.

Changes in accounting policies

For the year ended December 31, 2011, the Company has changed accounting policies for the inventory valuation method from the specific method to the first in – first out method in order to present the cost of inventories to consistent with the nature of trade and the movement of inventories.The Company adjusted the inventory valuation with the first in – first out method as at December 31, 2010.That result to the Company applied adjustment effects of changes in accounting policies with retained earnings as at January 1, 2011.

Effects of changes in accounting policies with the inventory valuation method is as follow:

Baht

Statements of changes in equity Retained earnings Beginning balance as at January 1, 2011 94,957,969.15 Effects of changes in accounting policies 2,373,920.47 Adjusted balance 97,331,889.62


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4. TRANSACTIONS WITH RELATED PARTIES The Company has transactions with related parties. These parties are related through common shareholders and/or directorships. Transactions with related parties as included in the financial statements are determined at the prices occurring in the normal course of business based on the market price in general or the price as stipulated in the agreementif no market price exists. The significant balances of assets, liabilities, and other transactions that occurred with those parties were shown as follows: The significant transactions with related parties for the years ended December 31, 2012 and 2011 were as follows: Baht 2012 2011 Revenue from sales - - Mr. Suppasit Khlaikhem 3,755,418.52 Sales return - - Mr. Suppasit Khlaikhem 5,742,278.50

The significant balancesofrelated parties as at December 31, 2012 and 2011 were as follows: Baht 2012

2011

Trade accounts receiveable Mr. Suppasit Khlaikhem 177,047.57 Other payables Mr. Suppasit Khlaikhem 5,869,949.00


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Directors’ remuneration

Directors’ remuneration represents benefits paid to the directors of the Company in accordance with Section 90 of the Public Company Limited Act, exclusive of salaries and related benefit payable to directors who hold executive positions. For the years ended December 31, 2012 and 2011, the Company paid directors’ remuneration in the amount of Baht 1.60 million and Baht 1.35million, respectively.

Key management personnel compensation

Key management personnel compensation for the years ended December 31, 2012 and 2011 consisted of: Baht 2012 Short-term benefits Post-employment benefits Total key management personnel compensation

30,080,892.20 5,276,317.77 35,357,209.97

2011 21,362,707.80 2,732,352.60 24,095,060.40

Nature of relationship

Name Mr. Suppasit Khlaikhem

Nationality Thai

Relation Related person

Relationship Management


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5. CASHAND CASH EQUIVALENTS

Cash and cash equivalentsas at December 31, 2012 and 2011 consisted of:

Baht

2012

2011

Cash on hand

1,795,702.66

1,011,807.70

Cash at bank

28,130,187.20

74,775,222.63

Total

29,925,889.86

75,787,030.33

6. SHORT-TERM INVESTMENTS

Short-term investments as at December 31, 2012 and 2011 consisted of: Cash at bank - fixed deposits Bill of exchanges

Baht

2012 25,881,739.42 -000

Open-ended fund

72,229,244.18

Total

98,110,983.60

2011 255,029.04 60,000,000.00 -000 60,255,029.04


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7. TRADE AND OTHER RECEIVABLES

Trade and other receivables as at December 31, 2012 and 2011 consisted of: Baht 2012 2011 Trade accounts receivable Related party -000 Other party 77,858,373.60 Total 77,858,373.60 Less Allowance for doubtful accounts (1,111,957.44) Trade accounts receivable - net 76,746,416.16 Other receivables Trade and other receivable - net

177,047.57 54,087,182.96 54,264,230.53 (1,045,394.95) 53,218,835.58

4,489.88

1,119,514.92

76,750,906.04

54,338,350.50

As at December 31, 2012 and 2011, the Company had outstanding balances of trade accounts receivable aged by number of months as follows: Baht 2012

2011

Trade accounts receivable – related party Current

177,047.57

Trade accounts receivable – other party Current Overdue Less than 3 months Over 3 months up to 9 months Over 12 months Total

-000

75,817,906.66

52,677,600.65

914,259.50 14,250.00 1,111,957.44 77,858,373.60

297,624.87 88,749.99 1,023,207.45 54,087,182.96


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Movements of allowance for doubtful accounts for the years ended December 31, 2012 and 2011 were as follows:

Baht

2012

Beginning balance

1,045,394.95

1,039,767.45

66,562.49

5,627.50

1,111,957.44

1,045,394.95

Add Doubtful accounts Ending balance

2011

8. INVENTORIES

Inventories as at December 31, 2012 and 2011 consisted of:

Baht

2012

2011

Raw materials

80,789,644.46

52,866,189.90

Work in process

13,306,363.68

1,486,689.76

Finished goods

361,484,512.93

284,143,146.71

Carat diamond

17,882,164.07

43,212,930.53

Supplies

5,958,541.65

3,014,594.73

Total

479,421,226.79

384,723,551.63


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9. RESTRICTED FINANCIAL INSTITUTION DEPOSITS

Restricted financial institution deposits as at December 31, 2012 and 2011 were shown as follows:

Baht Bank Deposits 2012 2011 Note Guarantee for fixed 12 months - 25,000,000.00 14 Credit line of long term loans in the amount of Baht 20 million 12 Credit line of trust receipt/letter of credit in the amount of Baht 80 million 12 Credit line of forward foreign exchange contract in the amount of US Dollars 3.35 million 12 Credit line of bank overdrafts in amount of Baht 14.26 million 12 Letter of guarantee issued by bank in the amount of Baht 0.64 million 12 Credit line of promissory notes in the amount of Baht 20 million รวม - 25,000,000.00

On December 4, 2012, the Company has released its restricted bank fixed deposits of Baht 25 million.


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10. BUILDING AND EQUIPMENT Movements of the building and equipment for the years ended December 31, 2012 and 2011 were summarized below: Baht Building Fixtures and improvements office equipment Equipment Vehicles Total

Cost As at January 1, 2011 4,756,612.59 18,539,522.68 15,647,990.11 2,623,092.15 41,567,217.53 Purchases/transfers in 3,850,755.38 11,001,595.64 976,840.64 - 15,829,191.66 Disposal/transfers out - (699,700.00) - - (699,700.00) As at December 31, 2011 8,607,367.97 28,841,418.32 16,624,830.75 2,623,092.15 56,696,709.19 Purchases/transfers in - 16,645,558.38 417,000.11 5,473,531.78 22,536,090.27 Disposal/transfers out - (2,094,120.00) (521,540.30) - (2,615,660.30) As at December 31, 2012 8,607,367.97 43,392,856.70 16,520,290.56 8,096,623.93 76,617,139.16 Accumulated Depreciation As at January 1, 2011 1,288,251.41 9,296,556.30 14,387,245.95 1,497,885.92 26,469,939.58 Depreciation 1,192,658.18 3,473,198.33 875,903.82 524,618.39 6,066,378.72 Disposal/transfers out - (644,818.66) - - (644,818.66) As at December 31, 2011 2,480,909.59 12,124,935.97 15,263,149.77 2,022,504.31 31,891,499.64 Depreciation 1,727,314.95 6,078,101.61 413,370.36 984,487.91 9,203,274.83 Disposal/transfers out - (412,103.67) (60,740.85) - (472,844.52) As at December 31, 2012 4,208,224.54 17,790,933.91 15,615,779.28 3,006,992.22 40,621,929.95 Allowance for impairment of assets As at January 1, 2011 - - - - - Loss from impairment - 1,612,884.90 - - 1,612,884.90 of of assets - 1,612,884.90 - - 1,612,884.90 Reversal loss from - - - - impairment of assets - - - - As at December 31, 2012 - 1,612,884.90 - - 1,612,884.90


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Baht Building Fixtures and improvements office equipment Equipment Vehicles Total

Net Book Value Owned assets 6,126,458.38 14,987,289.99 1,361,680.98 - 22,475,429.35 Assets under finance leases - 1,729,192.36 - 600,587.84 2,329,780.20 As at December 31, 2011 6,126,458.38 16,716,482.35 1,361,680.98 600,587.84 24,805,209.55 Owned assets

4,399,143.43 21,805,899.46 Assets under finance leases - 2,183,138.43 As at December 31, 2012 4,399,143.43 23,989,037.89

904,511.28 - 27,109,554.17 - 5,089,631.71 7,272,770.14 904,511.28 5,089,631.71 34,382,324.31

Baht

2012

2011

Depreciation for the years ended December 31 was

included in selling and administrative expenses

9,203,274.83

6,066,378.72

As at December 31

The cost amount before accumulated depreciation

which have been fully depreciated and still in use

20,617,597.76

18,969,356.37

As at December 31, 2012 Rate of rent and service Lessor Period fees per month Note (Millions Baht) Â Land including construction Third party 3 years 0.68 Can be renewing the contract lease agreement

Space rental agreements Third party 1 - 3 years 3.05

Can be renewing the contract if expired. (See Note 28.2.1)


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11. INTANGIBLE ASSETS Movements of theintangible assets for the years ended December 31, 2012 and 2011 were summarized below:

Baht

Softwareinstallation Computer Software Software Total underunder installation Cost As at January 1, 2011 167,040.00 3,498,400.00 3,665,440.00 Purchases/transfer in 5,466,325.00 2,224,755.00 7,691,080.00 Disposals/transfer out -000 (5,466,325.00) (5,466,325.00) As at December 31, 2011 5,633,365.00 256,830.00 5,890,195.00 Purchases/transfer in 318,830.00 -000 318,830.00 Disposals/transfer out - (256,830.00) (256,830.00) As at December 31, 2012 5,952,195.00 -000 5,952,195.00

Amortization As at January 1, 2011 66,351.63 -00 66,351.63 Amortization/transfer in 1,385,218.82 -00 1,385,218.82 Disposals/transfer out - -00 -00 As at December 31, 2011 1,451,570.45 -00 1,451,570.45 Amortization/transfer in 1,955,128.08 -00 1,955,128.08 Disposals/transfer out - -00 - As at December 31, 2012 3,406,698.53 -00 3,406,698.53 Book Value As at December 31, 2011 4,181,794.55 256,830.00 4,438,624.55 As at December 31, 2012 2,545,496.47 -000 2,545,496.47 Baht 2012 2011 Amortization for the years ended December 31 was included in administrative expenses 1,955,128.08 1,385,218.82


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12. BANK OVERDRAFTS AND SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS Bank overdrafts and short-term loans from financial institutions as at December 31, 2012 and 2011 consisted of: Credit lines Financial Institutions สถาบั นการเงิน Type of credit 2012 2011 Unit Referred interest rate First Bank overdrafts 14.26 15.00 Millions Baht MOR Trust receipt / letter of credit 80.00 80.00 Millions Baht MLR Promissory notes 20.00 20.00 Millions Baht MOR, Fixed deposit, MLR Letter of guarantee 0.64 - Millions Baht MOR Forward exchange contracts 3.35 3.35 Millions US Dollar Second Forward exchange contracts 100.00 100.00 Millions Baht

13. TRADE AND OTHER PAYABLES

Trade and other payables as at December 31, 2012 and 2011 consisted of: Trade accounts payable Other payables Accrued expenses Total

Baht

2012 130,752,643.19 12,541,432.44 27,763,582.91 171,057,658.54

2011 119,842,939.47 11,571,708.89 21,890,920.17 153,305,568.53


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14. LOANS FROM FINANCIAL INSTITUTIONS

Loans from financial institutions as at December 31, 2012 and 2011 consisted of:

Baht

2012

Loans from financial institutions Less Current portion Long-term loans from financial institutions

Credit lines

6,666,656.00 (6,666,656.00) -

2011 13,333,328.00 (6,666,672.00) 6,666,656.00

Principal

(Millions Baht) วงเงิน (ล้าBaht) นบาท) (Millions มูลหนี้ (ล้านบาท) Reference Interest rate Lender 2012 2011 2012 2011 Period Per anum Repayment ธนาคาร 20.00 20.00 6.67 13.33 Repayment 36 installments MLR Principal repayment on since December 30, 2010 a monthly basis amount Baht 0.56 million per month Movements of loans from financial institutions for the years ended December 31, 2012 and 2011 were as follows: Beginning balance Increase Decrease Ending balance

Baht

2012 13,333,328.00 - (6,666,672.00) 6,666,656.00

2011 20,000,000.00 (6,666,672.00) 13,333,328.00


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Annual Report 2012 Jubilee Enterprise Public Company Limited

15. LIABILITY UNDER FINANCE LEASE

Liability under finance leaseas at December 31, 2012 and 2011 consisted of: Year Present value 1 1,997,543.77 2 - 4 3,723,614.59 Total 5,721,158.36

2012 Baht Deferred interest 244,261.75 190,299.19 434,560.94

Minimum rental 2,241,805.52 3,913,913.78 6,155,719.30

Year Present value 1 1,036,951.97 2 1,262,577.02 Total 2,299,528.99

2011 Baht Deferred interest 131,551.71 84,494.07 216,045.78

Minimum rental 1,168,503.68 1,347,071.09 2,515,574.77

The Company had entered into a finance lease agreement for purchase of vehicle and equipment which is payable monthly in the amount of Baht 0.22 million. As at December 31, 2012 the current portion in the amount of Baht 2 million (In 2011: Baht 1.04 million) was presented under current liabilities

16. CURRENT PORTION OFLONG-TERM DEBTS

Current portion of long-term debts as at December 31, 2012 and 2011 consisted of: Baht Note 2012 2011 Loans from financial institutions 14 6,666,656.00 6,666,672.00 Liability under finance lease 15 1,997,543.77 1,036,951.97 Total 8,664,199.77 7,703,623.97


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17. EMPLOYEE BENEFITS Movement of the present value of employee benefits obligation and employee benefits expenses instatements of comprehensive incomefor the year ended December 31, 2012 and 2011 as follows: Baht 2012 2011 Post-employment benefit plan   Present value of employee benefit obligations as at January 1 3,528,994.68 Employee benefit expenses in the statements of comprehensive income :     Current service cost 668,251.00 962,735.22 Interest cost 210,604.00 291,309.00 Unrecongnised actuarial profit - (856,534.96) Previous service cost 2,650,139.68 1,848,808.44 Retired employee benefit (428,589.39) Present value of employee benefit obligations as at December 31 5,346,722.99 3,528,994.68 Employee benefits obligations in the statements of financial position as at December 31, 2012 and 2011 consisted of: Baht 2012 2011 Post-employment benefit plan     Present value of obligations 10,600,558.68 7,596,197.04 Previous unrecongnised service cost (7,071,564.00) (2,249,474.05) Employee benefits obligations - recognised in statements of financial position 5,346,722.99 3,528,994.68 The Companymade defined benefit plan in accordance with severance payment as the labour law which entitled retired employee within work service period in various rates, such as more than 10 years to receive severance payment not less than 300 days or 10 months of the last month salary. The principal actuarial assumptions (expressed as weightedaverages) are as follows:

Discount rate Future salary increases Turnover rate Disability rate Retirement age Mortality rate

3.00% 6.00% 8.00 - 17.00% 10.00% of Thai Mortality Ordinary Table 60 years Thai Mortality Ordinary Table 1997


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18. SHARE CAPITAL The Company issued ordinary shares in the amount of 1,166,250 shares offering to exercise warrants for directors and employees of 1,166,250 units (see Note 19) at par value of Baht 1 and the Company registered the change of paid-up share capital from Baht 171.12 million to Baht 172.29 million with the Ministry of Commerce on November 9, 2011. The Company issued ordinary shares in the amount of 1,009,875 shares offering to exercise warrants for directors and employees of 1,009,875 units (see Note 19) at par value of Baht 1 and the Company registered the change of paid-up share capital from Baht 172.29 million to Baht 173.30 million with the Ministry of Commerce on November 7, 2012.

19. WARRANTS The Board of Directors’ Meeting held on July 2, 2008 and the Extraordinary Meeting of Shareholders held on August 27, 2008, approved the issuance of Employee Stock Option Plan: ESOP in the amount of 4,997,500 warrants to the directors and employees. The preliminary details of the warrants are as described below: Typeof Securities Typeof Warrants Term of Warrants Number of Warrants Offering Price Exercise Ratio Exercise Price

: Warrants purchasing ordinary shares of Jubilee Enterprise Public Company Limitedto allotto the directors and employees. : Specified warrant’s holder and not transferable. : 5 years from the issuing date of warrants. : 4,997,500 units : 0 Baht per unit. : 1 unit of warrant to 1 ordinary share. : Baht 1


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Annual Report 2012 Jubilee Enterprise Public Company Limited

Exercise Period

: The first

3 days after the Company issued warrants to directors and employees exercisable at end of 1 year, 25% of the warrants have been allocated. The second 3 days after the Company issued warrants to directors and employees exercisable at end of 2 years, 50% of the warrants have been allocated. The third 3 days after the Company issued warrants to directors and employees exercisable at end of 3 years, 75% of the warrants have been allocated. The fourth 3 days after the Company issued warrantsto directors and employees exercisable at end of 4 years, all of the warrants have been allocated. The fifth 7 days after the Company issued warrantsto directors and employees exercisable at end of 5 years, all of the warrants have been allocated Holders of warrants are excercisable to ordinary shares, which is scheduled during October 28-30 of each year asfollows:

Year

Lot

2553 2554 2555 2556

1 2 3 4

The warrants which can The warrants which were The warrants which were The warrants which were exercise to ordinary shares exercised to ordinary share not yet excercised canceled

1,249,375.00 1,315,375.00 1,249,375.00 1,249,375.00

1,121,500.00 1,166,250.00 1,009,875.00 -

66,000.00 - - -

61,875.00 149,125.00 239,500.00 -


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20 . DIVIDEND PAID The Board of Directors’ Meeting held on August 8, 2012, a resolution was passed to approve the payment of an interim dividend at the rate of Baht 0.30 per share, in the total amount of Baht 51.69 million. At the Ordinary General Meeting of Shareholders held on April 23, 2012, a resolution was passed to approve the payment of a dividend at the rate of Baht 0.29 per share, in the total amount of Baht 49.96 million. The Board of Directors’ Meeting held on August 9, 2011, a resolution was passed to approve the payment of an interim dividend at the rate of Baht 0.23 per share, in the total amount of Baht 39.36 million. Subsequently,at the Ordinary General Meeting of Shareholders held on April 23, 2012, ratified such payment of interimdividend. At the Ordinary General Meeting of Shareholders held on April 19, 2011, a resolution was passed to approve the payment of dividend at the rate of Baht 0.20 per share, in the total amount of Baht 34.22 million.

21. SHARE PREMIUM Section 51 of the Public Limited Companies Act B.E. 2535 requires companies to set aside share subscriptions received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available for dividend distribution.

22. LEGAL RESERVE According to the Public Limited Companies Act B.E. 2535, the Company is required to set aside a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any) until the reserve reaches 10 percent of the registered share capital. The legal reserve could not be used for dividend payment.


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23. EXPENSES BY NATURE

Significant expenses by nature for the years ended December 31, 2012 and 2011 consisted of: Baht 2012 2011 Changes in finished goods and work in process 63,830,273.68 75,392,781.87 Purchases of finished goods 197,658,496.79 131,664,277.43 Raw materials and supplies used 543,927,370.01 426,996,795.44 Employee expenses 70,117,444.76 55,396,402.52 Depreciation and amortization 14,147,527.10 7,725,238.88 Advertising and public relation expenses 10,941,013.91 7,308,685.51 Sale promotion expenses 115,737,016.33 83,985,204.87 Rental and service expenses 39,258,953.60 24,897,720.48

24. FINANCE COSTS

Finance costs for the years ended December 31, 2012 and 2011 consisted of Baht 2012 Interest expense 952,445.63 Bank charge - Total 952,445.63

2011 1,296,562.71 1,500.00 1,298,062.71

25. PROVIDENT FUND The Company and its employees jointly registered a provident fund scheme under the Provident Fund Act B.E. 2530. The fund is contributed to by both the employees and the Company. The fund is managed by Kasikorn Asset Management Company Limited. This fund is registered under the conditions of Ministry of Finance and the fund is managed by the approved fund manager.


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26. SEGMENT INFORMATION Management considers that the Company operates in a single line of business, operate a business as a retail and wholesale of jewelry, and has therefore only one business segment.

Management considers that the Company operate in a single geographic area, namely in Thailand, and has therefore only one geographic segment.

27. INCOME TAX Incomes tax for the years ended December 31, 2012 and 2011 was calculated at a rate of 20 percent of profit before income tax after adding back reserve and expenses that are not allowed to hold as an expensein calculating income tax and less of income exempt included as income. The tax rate which used to calculate income tax is the rate according to Decree No. 467 (2007), dated October 7, 2007. The Company recorded the corporation income tax as expense for each of the year and recorded the accrued portion as liabilities in the statements of financial position.

28. COMMITMENTS

As at December 31, 2012 the Company had commitments as follows:

28.1 Commitments from letters of guarantee The letters of guarantee issued by banks used as collateral for the production of goods agreement paid in the amount of Baht 0.64 million (see Note 12). 28.2 Commitments under the agreements: 28.2.1 Paid under space rental agreements with other persons, the monthly rental and service fee is in the amount of Baht 3.73 million (see Note 10). 28.2.2 Paid under the computer software agreement with other person in the amount of Baht 0.33 million, and paid under purchase and maintenance computer software in the rateof Baht 0.59 million per year. 28.2.3 Paid under renovated sales office in agreement in the remaining amount of Baht 0.56 million.


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29. DISCLOSURE OF FINANCIAL INSTRUMENTS

Accounting policies

The detail of significant accounting policies and methods used, classification of financial assets and financial liabilities including valuation, basis of recognition of income and expenses are disclosed in Note 3.

Financial risk management policies

The Company is exposed to the fluctuations in interest rate and foreign exchange rates in the market and the risks from default on the agreement by counterparties. The Company had the risk management polices as follows:

Interest rate risk

Interest rate risk is the fluctuation of the market interest rate in the future which will affect the Company’s operation and cash flows. The Company has the interest rate risk from cash and deposits at bank and loans because the interest rate of financial assets and financial liabilities fluctuated based on the market rate. In addition, the Company has not engaged in any hedging contracts.

Foreign currency risk

The Company’s exchange rate risk primarily involves the purchases of goods in foreign currencies. As at December 31, 2012 and 2011 the Company had assets and liabilities in foreign currencies as follows: Assets in Liabilities in foreign currency foreign currency 2012 2011 2012 2011 Hedging US Dollars - - 260,665.89 708,221.04 Non-Hedging US Dollars 39,482.46 27,793.17 877,601.99 1,720,541.99 Hong Kong Dollars 9,919.00 20,882.10 - Singapore Dollars 3,842.00 - - Renminbi (Republic of Chaina) 734.00 2,710.00


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Credit risk – trade accounts receivable

The Company has a policy on hedging credit risk from trade accounts receivable by forming conservative credit policy and determining that the receipt from sales of goods be made partial advance payment for goods. Therefore, the Company expects that the loss from collection of those trade accounts receivable should not exceed the provision for doubtful accounts.

Fair value

Most of the financial assets are cash at bank and trade accounts receivable which are short-term credit and financial liabilities. Most of the financial liabilities are trade accounts payable and loans with its interest rates close to the market rate. The carrying amount of the financial assets and financial liabilities are not significantly different from their fair value.

30. RECLASSIFICATION The Company has reclassified certain accounts in the statements of comprehensive income for the year ended December 31, 2011 to conform with the presentation of the financial statements of this year which consisted of: 2011 (Unit : Baht) Before After reclassification Reclassification reclassification Statement of comprehensive income Selling expenses 145,180,570.83 9,443,861.26 154,624,432.09 Administrative expenses 80,938,379.06 (9,443,861.26) 71,494,517.80


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31. EVENT AFTER THE REPORTING PERIOD The Board of Directors’ Meeting held on February 22, 2012, a resolution topropose to the Ordinary General Meeting of Shareholders to approve the payment of a dividend at the rate of Baht 0.30 per share, in the total amount of Baht 51.99 million.

32. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved for issue by the Company’s Board of Directorson February 22, 2013


JUBILE: Annual Report 2012  

Annual Report 2012

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