Contents Message From the Chairman of the Board of Director
2
Report of Audit Committee
3
The History Briefly of Board
4
General information
8
Type of Business
9
Financial Highlights
9
Risk Factors
12
Shareholder Structure and Management • Capital Structure • Mangement Structure
17
Corporate Governance Policy
26
The Connected Transactions
31
Management Discussion and Analysis
32
Financial Statements
37
Message From the Chairman of the Board of Director During the past several years. Thailand has experienced several problems. Both of the political and disasters alternately. In 2009 and 2010 have faced political problems. In 2011 we were faced with a flood. 2009-2011 various problems have affected the overall economy of the country. For next year,2012 which was a recuperating is the best year in the period mentioned . Even in 2013 , which has started a minimum wage of 300 baht nationwide, but it’s also good business climate continued in the third quarter caused the company to consider interim dividend to its shareholders. But the political problem was back again. And business impact especially in the last quarter of cause the actual results of the company for the year . Close to the operating results of the year 2012 . However, regardless of external factors political and economic will fluctuate the company is still pledging . Dedicated to the effort and diligence . Business operations to generate better returns for shareholders . I , on behalf of the Board of Directors. Would like to thank our shareholders, employees and stakeholders in related personnal of the continually good support. And hope to get support like this forever.
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Annual Report 2013
Mr. Jesadavat Priebjrivat Chairman of Board of Director/ Independent Director
Report of Audit Committee the Audit Committee were assigned the duties ans responsibilities by the Board of Directors. to perform is verify the financial statement, verify internal control system and internal audit .Verify the operation under criteria of stock exchange of Thailand and law . Has selected the auditor and review the interlinked transaction by basing on transparency and by disclosing information properly in under to prevent to conflict of interest from happening .In 2013, the Audit Committee had 5 meetings and had reported the result of the meetings to the Company’s Board of Directors every time; summarized as follows 1. Verifying the quarterly and yearly financial report for 2013 , by meeting with the auditors and management accountants and it is deemed that the financial statement of the Company has been prepared under general accepted standard and government’s regulations, all information is revealed and the provision appropriately 2. Verifying the appropriateness of the internal control system. The Audit Committee had received the report from the internal auditors on the quarterly, to the lack of operational control at some point. And suggestions on how to improve. The Audit Committee has instructed the management to closely improved. Overall, no significant defects 3. Reviewing the operation under criteria and law on Securities and Stock Exchange of Thailand, and the office of the Securities and Exchange Commission, and law concerned with the business operation of the Company. In case issue not sure. Consulted the Stock Exchange of Thailand and proposed a committee to consider again. 4. Verifying the interlinked transactions by basing on the transparency and by disclosing information properly in order to prevent the conflict of interest from happening. From such follow-up, there are not many of such business and it is negligible and does not affect the provision of the agreement. 5. Selecting the auditor, by considering and selecting and presenting to appoint the old auditors consisting of Miss Siraporn Auaanankul whose audit license is no.3844, or Mr. Suppachai panyawattano whose audit license is no.3930, or Mr. Kritsada Loetwana whose audit license is no.4958 of the EY Office Limited, to be the auditors of the Company in 2014. The remuneration for the auditors is 780,000 baht. This has been proposed to the Board of Directors for approval in the Annual Shareholder’s Ordinary Meeting in 2014 further. The Audit Committee is independent in performing work under the assigned mission and the participation from all parties. And there are meetings with auditors quarterly in order to know the notes made on financial report and appropriate internal control. It is found that there is not any substantial abnormality.
Mr. Khan Akaworawit Chairman of audit comittee Union Intraco Public Company Limited
5
The History Briefly of Board
Mr. Jesadavat Priebjrivat
Mr. Khan Akaworawit
Chairman of Audit Committee/ Independent Director Age 53 years
Audit Committee / Independent Director Age 47 years
MBA. In Finance, New York University MEA. in Engineering Management. George Washington University Certificate in Director Certification Program (DCP) Class of 2009 Certificate in Director Accreditation Program (DAP) Class of 2005 Certificate in Advanced Audit Committee Program (AACP) Class of 2009 Certificate in Role of Chairmanship (ROC) Class of 2011
MBA. Kasetsart University Certificate in Director Certification Program (DCP) Class of 65/2005 Certificate in Director Accreditation Program (DAP) Class of 34/2004 Certificate in Audit Committee Program (ACP) Class of 2006
Ph.D in Accounting, University of Manchester, UK MBA in Finance, University of San Antonio, USA MSc. In Accounting, Chulalongkorn University Bachelor of Accounting, Thammasart University
Chairman of Board of Director/ Independent Director Age 57 years
2010 - Present Chairman of Board Director Union Intraco Plc. Audit Committee Sansiri Plc. 2010 - 2012 Chief of Financial Department CAT Telecom Plc. 2004 - 2007 Deputy Managing Director MFC Asset Management Plc. 2001 - 2004 Deputy Managing Director KGI Securities (Thailand) Plc.
6
Annual Report 2013
2005 - Present Audit Committee/Independent Director Permsin Steel Works Plc. 2010 - Present Chairman of Audit Committee / Independent Director Union intraco Plc. Audit Committee/Independent Director T.M.C Industrial Plc. 2011 - Present CFO / Director Crown Tech Advance Plc. 2001 - Present Managing Director Kevin & Kurt Co.,Ltd.
Dr. Kwuansakoon Thengaummnuay
2010 - Present Audit Committee/Independent Director Union Intraco Plc. 2014 - Present Director Learn To Wealth Co., Ltd 1989 - Present Lecturer at Accounting Department, Faculty of Business Administration Kasetsart University 1991 - Present Managing Partner, Certified Public Accountant Thanakorn office 1991 - 1997 Audit Assistant PricewaterhouseCoopers ABAS Ltd.
Miss Siruswadi Suthiworapuncha
Mr. Perajed Suwannapasri
Mr. Virat Suwannapasri
MBA,Assumption University BSc. Of Medical Technology, Chulalongkorn University
Bachelor of Business Administration Assumption University Diploma in International Finance & Banking University of Birmingham.UK Certificate in Director Accreditation Program (DAP) Class of 78/2005
Certificate in Executive Development, Faculty of Commerce and Accountancy, Chulalongkorn University Certificate in Director Accreditation Program (DAP) Class of 2005
Audit Committee / Independent Director Age 47 years
2010 - Present Audit Committee / Independent Director Union Intraco Plc. 2011 - Present Senior Director of Investment Banking Ploenchit Capital Co.,Ltd. 2000 - 2005 Director of Investment Banking United Securities Plc. 1995 - 2000 Investment Banking Manager DhanaSiam Securities Plc. 1994 Internal Control Officer The Stock Exchange of Thailand
Chief of Executive Board /Director Age 42 years
2010 - Present Chief of Executive Office Union Intraco Plc. Director Union Petrochemical Plc. Director Ukem tech Co.,Ltd. 2005 - 2009 Director Union Intraco Plc. Deputy Managing Director Union Petrochemical Plc. 2000 - 2005 General Manager Union Intraco Plc. 1991 - 2000 Assistant Marketing Manager Union Trading and Industries Co.,Ltd.
Director Age 70 years
2010 - Present Director Union Intraco Plc 2005 - Present Managing Director Union Petrochemical Plc. Managing Director Lion Asia (Thailand) Co.,Ltd. 2005 - 2010 Managing Director Union Intraco Plc 1981- 2004 Managing Director Union Trading and Industries Co.,Ltd.
Union Intraco Public Company Limited
7
Mrs. Kanjana Suwannapasri
Miss Suthida Suwannapasri Director Age 44 years
Director Age 43 years
Ph.D. in Social Science, Mahachulalongkornrajavidyalaya University Honorary Degree in Buddhism, Faculty of Social Science., Mahachulalongkornrajavidyalaya University Certificate in Director Accreditation Program (DAP) Class of 2005
MA. In Public Administration, NIDA Bachelor of Laws, Thammasart University Certificate in Director Accreditation Program (DAP) class of 78/2005
MBA in Marketing, University of New Haven, USA MSc. In Finance, University of New Haven, USA BBA in Finance, Assumption University Certificate in Director Accreditation Program (DAP) Class of 42/2005
Director Age 72 years
2010 - Present Director Union Intraco Plc. Director Ukem tech Co.,Ltd. 2005 - Present Deputy Managing Director Union Petrochemical Plc. Director Lion Asia (Thailand) Co.,Ltd. 1981 - 2004 Deputy Managing Director Union Trading and Industries Co.,Ltd.
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Annual Report 2013
2005 - Present Director Union Intraco Plc. Director Ukem tech Co.,Ltd. Assistant Managing Director Union Petrochemical Plc. 2005 - 2009 General Manager Union Petrochemical Plc.
Miss Piyanan Suwannapasri
2005 - Present Director Union Intraco Plc. Director Lion Asia (Thailand) Co.,Ltd. Director Ukem Tech Co., Ltd. Assistant Managing Director Union Petrochemical Plc. 2002 - 2005 Accounting and Finance Manager Union Petrochemical Plc.
Mr. Perapol Suwannapasri
Mr. Karoon Srivichittranond
Mr. Vissanu Meeyoo
Ph.D. in Social Science, Mahachulalongkornrajavidyalaya University Honorary Degree in Buddhism, Faculty of Social Science., Mahachulalongkornrajavidyalaya University MA. In E-Business Management University of Surrey U.K Bachelor of Business Administration, Assumption University Certificate in Director Accreditation Program (DAP) Class of 2005
MBA, in Commerce, University of New South Wales Bachelor of Business Administration, Assumption University
Ph.D in Chemical Engineering, University of New South Wales BSc. In Chemical Technique, Chulalongkorn University
2010 - Present Director Union Intraco 2011 - Present Regional Business Manager Diageo Moet Hennessy (Thailand) Ltd. 2006 - 2554 Group Customer Marketing Manager Diageo Moet Hennessy (Thailand) Ltd. 2003 - 2006 Product Manager Diethelm Co.,Ltd 2003 Customer Executive Unilever Best Foods (Thailand) 1998 - 1999 Department Manager Central Department Co.,Ltd
2010 - Present Director Union Intraco Plc. 1995 - Present Vice President of Research Dept. Mahanakorn University of Technology 1992 - 1993 Engineer Esso (Thailand) Plc.
Director Age 36 years
2005 - Present Director Union Intraco Plc. Director Lion Asia (Thailand) Co.,Ltd. Director Ukem Tech Co., Ltd. Assistant Managing Director Union Petrochemical Plc. 2003 - 2005 Business Development Manager Union Petrochemical Plc.
Director Age 37 Years
Director Age 45 years
Union Intraco Public Company Limited
9
General Information Name : Union Intraco Public Company Limited Location : 9/8 Moo 5 Salathammasop,Taweewattana,Bangkok 10170 Type of Business : Trader,Developer and Distributor of Specialty chemicals Business Registration No. : 0107553000140 Telephone : (662) 888-6800 Fax : (662) 888-7200 Home Page : www.unionintraco.co.th E-mail : info@unionintraco.co.th Registered Capital : 212,333,276 Baht Paid Up Capital : 212,332,877 Baht
Reference Data
10
Securities Registration
Thailand Securities Depository Co.,Ltd 62 The Stock Exchange of Thailand Building Rajadapisek Road,Klongtoey,Bangkok10110 Thailand Tel 0-2229-2800 0-2654-5599 Fax. 0-2359-1259 Call Center : 0-2229-2888
Auditor
Ms. Siraporn Quaanunkun ,Audit License No. 3844 EY Office Limited 33 rd Floor. Lake Rajada Office Complex. 193/136-137 Rajadapisek Road ,Klongtoey, Bangkok 10110 Tel. 0-2264-0777 Fax: 0-2264-0789-90
Annual Report 2013
TYPE OF BUSINESS Union Intraco Public Company limited is the trader. Developer and distributor of specialty chemicals. These chemicals are used as raw material in various industries such as cosmetics an health care products, foods and medical supplies. Plastics and other containers as well as printing ink and varnishing and retial customer.
BUSINESS GOALS Company focuses on the customer base in niche market, low competition. Policy is business development focus on quality and product innovation in special chemical. Provide the customer with counseling and assistance.
FINANCIAL HIGHLIGHTS
Summary of Financial Performance Assets Liabilities Shareholder’s Equity Total Revenue Net Profit
2011 521.78 283.30 238.48 500.25 35.61
Million Baht 2012 509.42 232.20 277.22 658.96 53.04
2013 594.15 276.47 317.68 670.54 49.54
Union Intraco Public Company Limited
11
Financial Ratio 2011
2012
2013
Current Ratio
1.52
1.79
1.75
Quick Ratio
0.66
1.28
1.29
Gross Profit Margin
18.43%
16.36%
18.23%
Operating Profit Margin
10.50%
11.48%
9.86%
7.12%
8.05%
7.39%
Return On Assets ( ROA)
6.82%
10.41%
8.34%
Return On Equity (ROE)
14.93%
19.13%
15.59%
Liquidity Ratio
Ratio Of Profit
Net Profit Margin Operating Efficiency Ratio
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Annual Report 2013
REVENUE BY INDUSTRIAL SEGMENT segment Cosmetics and health care products Foods and medical supplies Plastics and containers Printing Ink and varnishing other Total Revenue
2011 million %
2012 million %
2013 million %
191.61
38.50%
299.43
46.40%
370.17
55.60%
38.86
7.80%
79.60
12.34%
58.68
8.81%
186.73
37.52%
165.74
25.68%
137.53
20.66%
71.30
14.33%
73.83
11.44%
39.93
6.0%
9.22
1.85%
26.71
4.14%
59.46
8.93%
497.72
100.00
645.31
100.00
665.77
100.00
Revenue by Industrial Segment 370.17 299.43
191.61
186.73
165.74 137.53 79.60
71.3 38.86
9.22
2011 Cosmetics and health care products Foods and medical supplies Printing Ink and varnishing
73.83
58.68
39.93
26.71
2012
59.46
2013
Plastics and containers Other
Union Intraco Public Company Limited
13
RISK FACTORS Risk from fluctuation on material price Most of chemical products including specialty chemicals are derived from petrochemical industry. Upstream petrochemical products are Naphtha, Ethylene and Propylene which are the main starting raw material to produce chemical products. Thus, Price of specialty chemicals will be changed in correlation with the change on price of crude oil and the aforementioned upstream petrochemical products. Nonetheless, price of specialty chemicals tends to fluctuate less than the price of commodity chemicals because the change on price of specialty chemicals is not only affected by cost of raw material but also depending on demand and supply of the products, production capacity of major manufactures in the industry. In addition, certain kinds of specialty chemicals are patented and the manufacturers of these parented chemicals are highly influential to determine the price of such products. If the price of patented chemicals is increased and there are no substitute products. The company will face the risk of higher material cost. To reduce the risk from fluctuation of raw material price, the company’s executives must closely monitor the change on price of raw material and asses market trend. price movement and customer’s demand on chemical products. Ordering history is used as a tool to determine the quantity of products to be purchased. As for pricing strategy executives will review price of products monthly responding to market price in order to minimize the risk from fluctuation of material price of which would significantly affect the profit of the company. The company also focuses on specialty products of which our marketing strategy will not only rely on price competition but also on better service and quality of product and this policy will help reduce the risk from fluctuation on material price.
14
Annual Report 2013
Risk from Payment Default from Customers From 2011-2013, account receivables of the company is at 124.30 million baht, 152.06 million Baht and 171.24 million Baht respectively and average collection period is at 76, 77 and 89 days respectively . As of December 31, 2013, account receivables amounted to 28.82% of total assets. Up till now, there has been no payment default from customers. Regarding allowance for doubtful accounts is 0.19 Million Baht, the company will review financial competence of each customer and amount of debtors in prosecution process. Since account receivable is substantial part of total assets, if there are default payment or bad debt, it will greatly affect company’s liquidity and business performance. Credit term is varied by type of customer business: 60 days for customers in cosmetics and health care industry, food and medical supplies industry as well as plastics and containers industry, and 60-90 days for customers in printing and varnishing industry or chemical products agents. Sales history and payment record of each customer are also taken into account in determination of credit term. Marketing team and accounting team have worked cooperatively to review credit term and credit limit of each customer to ensure that proper credit terms and credit limit are granted to customers. Executives are concerned about the collection of overdue payment so accounting department is assigned to report the list of overdue customers to the management team monthly. Financial statement of new customer must be reviewed before opening customer account and granting credit terms. Being implemented from 2008, the process to collect overdue payment starts from informing customer verbally, sending notice, and making persecution if overdue payment period is over 90 days and this process is proven to prevent payment default effectively. As of December 31,2013, number of customers with no-due payment accounted with overdue payment less than 3 month , payment due to the overlap of billing cycles and check issuing cycles.
Union Intraco Public Company Limited
15
Risk from Storage and Transportation of Inflammable and Hazardous materials Though most of the company’s products are environmental friendly and sage but some chemicals are classified as inflammable and hazardous materials by the definition of Pollution Control Department, Ministry of Natural Resource and Environment, Thus careful handle of the products is required to prevent the leak of chemical product which is harmful to human and environment. The company has imposed stringent safety measurement to ensure secure handling of such materials by storing these materials in appropriate containers such as Anti Static IBC tank which has strong structure in order to prevent static electricity and chemical leak. Before using any containers, they must be cleansed and checked if they are in good condition and safe. In addition, proper area is designated to store specific materials whereby warehouse for liquid chemicals is separated from warehouse for chemical powder. To minimize the risk of inflammable materials, safety equipment and measurement has been taken into account. Explosion-proof electricity system and equipment as well as ground line has been installed to prevent sparks or short circuit of electricity which is the cause of fire. Fire extinguishers have been installed and fire fighting training has been conducted to alleviate the damage that may happen. Insurances are made for office, office supplies and equipment, warehouse and stocks. The sum assured should cover value of stocks in order to minimize the loss of damages and liabilities to third party if any damages or calamity happens and may affect the resident nearby. As of 31 December,2013, the company’s inventory is at 124.42 million Baht in finish goods 83.62 million Baht, goods in transit 40.65 million Baht and the container 0.15 million Baht. increasing 2012 is at 118.50 million Baht. Finish goods 106.60, goods in transit 11.35 million Baht and the container 0.55 million Baht. However, this material is no inflammable products so the risk from storage of inflammable materials in the company is considerably low. Transportation, The products isn’t dangerous chemicals. The flammable chemicals contained in IBC Tank with a strong 3- layer structure to prevent evaporation and leakage had purchased as well. Each transportation. The amount of each consignment volume, making it a potential hazard is low. However, the company hedge potential damage. To goods in trantsit. The contract defines the conditions of transportation. Contractor must pay damages that occur during shipping. The company has set a standard contract terms and condition, as same, The transport has been made vehicle insurance which covers the cargo. Company has hired 4 Transport in both individuals and companies. In the past a good work No accidents and delivery right on time.
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Annual Report 2013
Risk from Foreign Exchange Rate Most of our products are imported from overseas and payment is mainly made in USD currency, From 2011-2013, value of imported products are 7.97 million USD 10.82 million USD and 13.17 million USD respectively, accounted to 82% ,89% and 83% of total value of purchase order, whereas our income are in Baht currency, therefore the company is exposed to foreign exchange risk if US dollars are appreciated and the amount of account payable will be increased as a result. However, the company is not able to increase the price in responding to the change of exchange rate. By end of 2013, the company has 7.05 million USD of account payable from imported products which has not been hedged yet. To avoid the fluctuation of exchange rate, the company has determined risk management policy and assigns Accounting and Finance department to review daily exchange rate, watch the market trend and evaluate the fluctuation of exchange rate, If there is any significant change on exchange rate, the company will hedge such risks through purchase of forward contracts. From 2011 and 2013 the company’s loss of exchange rate is at (9.73) million Baht and (14.83) million Baht but in 2012 the company’s profit of exchange rate 9.02 million Baht respectively resulted from fluctuation rate of USD and Baht currency.
Risk form Change of Interest Rate The company has been granted credit line in terms of trust receipt and promissory note with the interest rate corresponding to market interest rate the difference plus/minus from banks in Thailand, and this credit line is the company’s working capital to purchase the products. As of December 31, 2013, the balance of credit line is at 188.045 million Baht with special interest rate will be exposed to risk if the interest rate is increased According to company’s risk management policy, movement of domestic and international interest rate is closely monitored in order or minimize the risk from change of interest rate.
Union Intraco Public Company Limited
17
Risk from Major Shareholders Own Over 50% of Shares As of February 28, 2014, Union Petrochemical Plc. held 59.99% of shares in the company .Suwannapasri family is major shareholders in Union Petrochemical Plc. And 6 out of 12 of members in the Board of Director and executive boards of Union Intraco Plc. Have been working for this company. The shareholding of Suwannapasri Family both by direct or indirect way through the holding of Union Petrochemical Plc, is accounted for more than 50% of paid capital after increasing of capital stock and therefore the family gains majority vote right in all shareholder’s meeting except for the resolution on law or company’s regulation which required at least 3 out lf 4 votes in shareholding’s meeting such as to increase or decrease capital stock and to distribute or transfer stocks to other parties wholly or partially. Therefore, other minor shareholders will not be able to gain adequate vote to counterbalance the power of major shareholders. Nonetheless, the company is aware of this risk and has outsourced 6 members of Board of Director which is accounted for 50% of all members in Board of Director of which 4 of them are independent director. They are responsible to monitor and counterbalance the power of Board of Director and Executive Board. Protecting the benefit of shareholders is an integral part of company policy. Should the company performs business with the entity that may incur conflict of interest, the company will strictly follow the approval procedure of inter-company transaction obliged by SET regulation. Executives, directors and shareholders who have beneficial interest on that transaction will not be eligible to cast their vote on such issue.
18
Annual Report 2013
SHAREHOLDER STRUCTURE AND MANAGEMENT Present, company’s registered capital is 212,333,276 Baht distributed to 212,332,877 common stocks with par value at 1.00 Baht per share. Paid Up capital is at 212,332,877 shares
List of Shareholders List of the 10 major shareholders as of February 28, 2014 is as follow: No. 1 2 3 4 5 6 7 8 9 10 11
Name of Shareholders Union Chemical Plc. Mrs. Kanok-orn Bodinrat Miss Kanda Sathanakulphanit Miss Wananthorn Kitvanichsathien Mr. Somchai Wachirasakulchai Miss Chatprapha Suwannapasri Mr. Thamrong Sompruk Miss Kodchaporn Cherdchusrisub Mrs. Srinaun Sukwat Mr. Perajed Suwannapasri Other Total
No. of Equity Shares 127,388,566 7,050,166 6,533,333 6,080,900 5,007,000 1,863,796 1,925,500 1.692,786 1,633,333 1,483,635 51,673,862 212,332,877
Shareholding (%) 59.99 3.32 3.08 2.86 2.36 0.88 0.91 0.80 0.77 0.70 24.34 100
Dividend Payment Policy Should there is no extra expense for further investment is business expansion and cash flow is adequate, our dividend policy is based on an annual pay-out ratio of 40% of net income. Dividend pay-out may very as per financial needs of the business but will be on the ground to provide utmost benefits to the shareholders. The dividend payout recommended by Board of Directors must be proposed for approval during shareholder’s general meeting. However, Board of Directors is authorized to approve interim dividend and will report to shareholders in the next meeting. Union Intraco Public Company Limited
19
Organization Chart
Sourcing & Merchandising
20
Annual Report 2013
Board of Director As on December 31, 2013, there are 12 members in Board of Director as follows: No. Name Title 1. Mr. Jesadavat Priebjrivat Chairman of Board of Director/Independent Director 2. Mr. Khan Akaworawit Chairman of Audit Committee/Independent Director 3. Asst.Prof. Dr. Kwansagool Tengamnuay Audit Committee/Independent Director 4. Miss Siruswadi Suthiworapunchai Audit Committee/Independent Director 5. Mr. Perajed Suwannapasri Chief of Executive Officer/Director 6. Mr. Virat Suwannapasri Director 7. Mrs. Kanjana Suwannapasri Director 8. Miss Suthida Suwannapasri Director 9. Miss Piyanan Suwannapasri Director 10. Mr. Perapol Suwannapasri Director 11. Mr. Karoon Srivijitranon Director 12. Mr. Vissanu Meeyoo Director Remark : Secretary to Board of Director is Miss Piyathida Suwanchana
Authorized Director There are 6 authorized directors namely Mr. Virat Suwannapasri, Mrs. Kanjana Suwannapasri, Miss Suthida Suwannapasri, Miss Piyanan Suwannapasri, Mr. Perajed Suwannapasri and Mr. Perapol Suwannapasri. 2 out of 6 authorized directors can sign the document with company seal to perform business transaction on behalf of the company, but Mr. Virat Suwannapasri and Mrs. Kanjana Suwannapasri are not authorized to sign documents together.
Union Intraco Public Company Limited
21
Audit Committee As of December 31,2013, the audit committee consists of: No. Name Title 1. Mr. Khan Akaworawit* Chairman of Audit Committee/Independent Director 2. Asst.Prof. Dr. Kwansagool Tengamnuay Audit Committee/Independent Director 3. Miss Siruswadi Suthiworapunchai Audit Committee/Independent Director Remark : * Audit committee knowledgeable on accounting and finance
Executive Board As of December 31, 2013, there are 4 members in executive board namely: No. 1. 2. 3. 4.
Name Mr. Perajed Suwannapasri Mr. Perapol Suwannapasri Mr. Karoon Srivijitranon Mr. Vissanu Meeyoo
Title Chairman of Executive Board/Director Director Director Director
Executive officer As of December 31, 2013, there are 5 executive officers as follows: No. 1. 2. 3. 4. 5. 6.
22
Name Mr. Perajed Suwannapasri Miss Patcharee Niyompattama Miss Usarat Janvanichyanon Miss Wanvadee Hongthong Mr. Suchart Lolthong Mr. Kunchit Subkun
Annual Report 2013
Title Chief of Executive Office Director of Sales & Marketing Director of General Adminstration Accounting & Financial Manager Warehouse and Logistic Acting Manager Inventory Acing Manager
Selection of Board and Committee • Selection of Board of Director
Though nominating committee have not been appointed yet to nominate the candidates for director position, the screening process is done by current Board of Director who will nominate qualified candidates abided to Article 68 of Public Limited Companies Act, 1992 and complied to announcement from the Securities and Exchange Commission. Other factors including breadth of experience, understanding of business and ability to run the business successfully are also taken into account. The candidates will be proposed for election at shareholder’s general meeting. The elected candidates for election at shareholder’s general meeting. 1. One share is equivalent to one vote 2. One shareholder can vote for one candidate 3. The candidate with the highest vote and candidates with the next highest vote will be elected to fill in vacancies respectively. In case there are 2 candidates with equal vote to fill in the last vacancy, the chairman of the meeting is authorized to make final decision to elect the appropriate candidate.
• Selection of Audit Committees and Independent Directors Board of Director or the shareholders in annual general meeting is authorized to appoint audit committee with 3members as minimum. At least one committee must have expertise on accounting or financial field. Whenever members of the audit committee are less than three, Board of Director or the shareholders in the meeting should appoint the candidate to fill the vacancies within 3 months since this position is vacant.
Union Intraco Public Company Limited
23
Remuneration for Board and Committee Encashment Remuneration
Regarding to extraordinary general meeting 2013 held on April 23, 2013, it was determined that annual remuneration for Board and Committee should not to exceed 1,800,000 Baht. Details of the remuneration are as follows: Title Chairman of Board of Director Chairman of Auditing Committee Auditing Committee Director
24
Annual Report 2013
Monthly Salary (Baht) 40,000 20,000 15,000 7,000
5 meetings of Board and Committee were held in 2013 respectively. The remuneration for Board and Committee is as follows: Name
1
Title
Chairman of Board of Director/ Independent Director Chairman of Audit Committee/ Mr. Khan Akaworawit Independent Director Asst.Prof.Dr.Kwansagool Tengamnuay Audit Committee/Independent Director Miss Siruswadi Suthiworapunchai Audit Committee/Independent Director Mr. Perajed Suwannapasri Chief of Executive Board/Director Mr. Virat Suwannapasri Director Mrs. Kanjana Suwannapasri Director Miss Suthida Suwannapasri Director Miss Piyanan Suwannapasri Director Mr. Perapol Suwannapasri Director Mr. Karoon Srivijitranon Director Mr. Vissanu Meeyoo Director Mr. Jesadavat Priebjrivat
Meeting fee (Baht) No. Of attended Board of Audit Total Meeting Director Committee 4
480,000
-
480,000
5
- 240,000
240,000
5 5 5 4 4 5 5 5 3 3
- 180,000 - 180,000 84,000 84,000 84,000 84,000 84,000 84,000 84,000 -
180,000 180,000 84,000 84,000 84,000 84,000 84,000 84,000 84,000
Total 1,068,000 600,000 1,668,000 Remark : Mrs Kanjana Suwannapasri didn’t get the meeting fee since March, 2011 but she still attend the meeting.
Union Intraco Public Company Limited
25
Remuneration for Executives As on December 31, 2013, the executives team consists of one director and 5 executives who are not in the board of directors. The remuneration for executives is as follows:
Remuneration foExecutives
2012 No. of Amount Paid Executives (Baht) 5 4,902,273
2013 No. of Executives 6
Amount Paid (Baht) 5,215,248
Salary, Commission and Bonus* Other Benefits (social security fund 5 55,567 6 271,377 and O.T.) Total 4,957,840 5,486,625 Remark : *including remuneration given to Warehouse and Logistics Manager of the company but resigned from the company Other Remunerations of Executive Provident Fund. The company has established the provident fund to management and employees,joined the ratio of 2%-10% of salary ,in 2013 the company has contributed for 304,300 Baht
Human Resources Total number of employees in the company as of December 31,2012 Department Sales & Marketing Warehouse & Logistics Accounting and Finance General Administration total
No. of Employee As of December 31,2012 12 12 4 6 34
No. of Employee As of December 31,2013 16 12 6 6 40
The company has recruited mor employees for Sale & Marketing Dept. and Accounting and Finance Dept. Remuneration for non-executive employees is in forms of salary, commission, bonus , provident fund, social securities fund and O.T. 26
Annual Report 2013
Remuneration
(unit:Baht)
Type Salary, commission and bonus Other Benefits Provident Fund, social securities fund and O.T. and other fringe benefits Total
Remuneration Paid 2012 9,416,220.25
2013 11,362,581.78
887,704.69
1,614,379.42
10,303,924.94
12,976,961.20
Labor Controversy in the Past 3 Years -None-
Human Resource Development The company has put continuous effort on human resources development in all levels to develop their personal and organizational skills, knowledge and abilities to accomplish their task effectively, Human resources development plan can be divided into 3 levels as follows 1. Management Level : Focus on development on management skills, leadership and vision. 2. Supervisor Level : Develop basic management skill such as coaching skills, team building, cooperation and effective communication both internally and externally. As well as foster learning on specific fields of work. 3. Operation level: Construct knowledge and expertise on each function, motivate employee to develop themselves continuously and have good attitudes toward executives and the company.
Union Intraco Public Company Limited
27
Corporate Governance Policy Code of Best Practices are an integral part of company’s business practices, aiming to enhance business opportunities, ensure transparency of the business and to increase efficiency of business management. All steps are taken to ensure maximum profit to shareholders, investors and all relevant parties . The company’s corporate governance initiatives are based on 5 components:
1 Shareholder Rights At our company, the right of shareholders is highly concerned and the company will not conduct any activities to violate or deprive shareholder right and would encourage the shareholders to exercise their rights. The basic right of shareholders includes the right to buy, sell and transfer stocks, the right to acquire adequate information about company’s business performance, the right to receive dividends, the right to appoint or to remove Board and committee, the right for approval on the appointment of independent auditor and the right to attend and vote in shareholders’ general meeting on important issues such as dividend payout, to determine or revise the company’s regulation or memorandum of Association, to increase or decrease capital stock as well as approval on other special occasions Apart from aforementioned basic rights, the companies also encourage and facilitate the shareholders to exercise their right by: - Holding annual shareholders’ general meeting within 4 months after the end of fiscal year. The invitation to the meeting, meeting agenda together with additional information on business performance will be sent to the shareholders 7 days prior to meeting date. Notices will be published in the newspaper for 3 consecutive days prior to the meeting date at least 3 days. - Uploading additional information relevant to meeting agenda in company’s website and informing the shareholders on the right to attend the meeting as well as the right to vote. - In case shareholders are not able to attend the meeting, they may appoint proxies to vote for their shares by signing in the letter of authorization attached to meeting invitation. - Before general meeting, shareholders can send comment, suggestion or inquiry to company via email address of company’s Investment Relation Dept, or Secretary to Board of Director. - During the meeting, shareholders can comment, suggest and make inquiries to the Board and Committee to ensure that the shareholders have been given substantial information prior to making an approval on any issue. Experts or specialists on each working field are assigned by Board of Director to answer the question and provide information to shareholders as required. - All Board of Direct will participate in the meeting and the shareholders are welcome to ask for information and details concerning company’s business performance. 28
Annual Report 2013
2. Equal Treatment to Shareholders The company is committed to establish equality among all groups of shareholders- consisting of executive shareholders, non-executive shareholders, foreign shareholders and minority shareholders by following procedure. - Treat and facilitate all shareholders equally. No action shall be conducted to limit , violate or deprive shareholder rights. - Define that voting rights are equal to number of shares held. One share is equivalent to one vote. - Assign independent directors to take care of minority shareholders and shareholders can send suggestion or complaints to independent directors who will find proper solution for each issue. In case of complaints, independent director will review the matter of fact and find the right remedy for such issue. In case there is suggestion relevant to the benefits of stakeholders or relevant to business performance, independent director will propose this issue to shareholders’ general meeting for further review in shareholders’ meeting agenda. - Board of Director has imposed measurements to prevent insider trading from relevant parties including Board and Committee, executives, officers and staff members of the company ( covering the spouse and minor of the aforesaid persons). The punishment for disclosure of company’s confidential information or misuse of such information for personal interest has been imposed in accordance with the policy to prevent inside trading. It is made clear to Board of Director and executives that they must periodically report their holdings to SEC abided by Article 39 of securities and Exchange Act, 1992. The announcement and regulation from SEC and SET will be disseminated to Board and Committee and executives regularly.
3. Role of Stakeholders The company is aware of the rights of all stakeholders, neither internal stakeholders namely shareholders, executives and employees working for the company, nor external stakeholders which are business competitors, business partners and customers. The company realized that cooperation, openness to comments and good relationship with all stakeholders are essential to operate business as well as to develop and further expand business. All stakeholders will be treated equally and fairly. Guidelines for dealing with all groups of stakeholders are as follows. - Shareholders : The company is a reliable organization for shareholders to invest their money in the business aiming to achieve long term business growth in compliance to internal control and audit system. - Employees: The company recognizes that all employees are one of the most valuable resources to develop the organization to grow further. Thus the company always supports all staffs to enhance their potential and work as a team as well as to create pleasant and safe working environment for employee. All employees are treated equally and fairly accompanied by appropriate remuneration. - Business Partners: are treated with honesty. Business contract and agreement are strictly followed. Union Intraco Public Company Limited
29
- Competitors: we are committed to fair competition. - Customers: we pledge to deliver best product and service to customers with fair trade and honesty. - Society: we are concerned of the environment of the community in vicinity of the company.
The guidelines to treat all groups of stakeholder are clearly specified in “Code of Ethics” which is distributed to all parties including board and committee, executives and employees and this is the mission for everyone in the company.
4. Information Disclosure and Transparency The company is obliged to make full disclosure of accurate and transparent information concerning business performance such as financial statement and other related documents in accordance with the regulations form SEC and SET. Other information that would affect company’s stock values or may impact the decision of investor and stakeholders should also be disclosed fully. Full information is disclosed to public through a variety of media under the operation of SEC and SET or in company’s website at http:// unionintraco.co.th. Investor relation Dept. is assigned to communicate and respond to inquiries from investors, shareholders, analyst and related government officials . For further information, please kindly contact Miss Usarat Janvanichyanon or Miss Piyathida Suwanchana Tel 0-2888-6800 or at email address: info@unionintraco.co.th
5 . Responsibilities of Board of Director - Structure of Board of Director Board of Director consists of qualified members who gain expertise, skills and wide range of experiences on business and management. Board of Director is responsible to set overall business direction and strategic goal, supervise business performance quarterly and monitor internal control and internal audit system to ensure the utmost benefits to the company and shareholders. As of December 31.2013, there are 12 members of Board of Director consisting of 4 non-executive directors abided by the guideline that there should be at least 1 out of 3 independent directors from total members in Board of Director. This is to ensure balance of power to resolve on business and management issue as well as to monitor the performance of the executives. Board of Director appointed 2 subcommittees which are Audit Committee and Executive Board to direct business strategy and monitor business performance. The roles and responsibilities of Board of Director, Audit Committee and Executive Board have been clearly defined and each entity is independent to make decision and express their initiatives and vision. Audit Committee: There are 3 audit committees who are assigned to review specific issue and report to Board of Director as required. 30
Annual Report 2013
Executive Board: There are 4 members in Executive Board who is responsible to facilitate business performance within the authority assigned by Board of Director In addition, the person holding the position of Chairman of Board of Director cannot hold the position of Chief Executive Officer in order to prevent unlimited power of each individual. Board of Director is authorized to screen and elect the candidate to fill in these positions. Secretary to Board of Director is responsible to inform and advice Board of Director on the rules and regulation to be abided, facilitate the work of Board of Director as well as follow up the progress on the issue assigned by Board of Director. Remuneration of Board and committee Remuneration of Board and Committee is clearly reported to SEC and it must be approved by shareholder during annual general meeting. In case more tasks and responsibilities are assigned, i.e., to work as audit committee, the remuneration will be appropriately in accordance to company’s policy as below: Corporate Governance policy This policy is an integral part of the company’s value system to operate business and support continuous and sustainable growth of the company. To ensure that these basic tenets of corporate governance are met, internal control and internal audit procedure are taken into account. The Board regularly evaluates the effectiveness of internal control system on yearly basis starting from year 2009 in order to ensure that the company operates the business in the framework of good corporate governance mandated by Stock Exchange of Thailand. The Board of Director regularly reviews and reaffirms that business practices are implemented in the framework of this policy. In addition, after the company as been registered in Stock Exchange of Thailand , we strictly follow the rules and regulation imposed by SEC and SET. - Code of Ethics Code of Ethics for the Board, executive and employee has been defined to ensure that all related parties perform their duties with honesty and treat all groups of stakeholder equally and fairly. Everyone in the company is committed to strictly follow this guideline. - Conflict of Interest The guideline to avoid conflict of interest is on the ground that any business transaction must be performed for the utmost benefits of the company. The parties involving in any action that may incur conflict of interest should report to the company about particular action and should not participate in the approval process of such transaction. The Audit Committee will submit the details on related transactions that may cause conflict of interest to the Board of Director to find out appropriate solution discreetly. Our business practices are strictly complied with the rules and regulations mandated by SET to treat the parties that may cause conflict of interest will be submitted to SET as required and will be disclosed in financial statement, annual report as and form 56-1. Union Intraco Public Company Limited
31
- Board of Director Report Board of Director is accountable for the financial statement of the company and subsidiaries including financial data as shown in annual report and form 56-1. The Audit Committee is responsible to verify the accuracy of financial statement , monitor internal control procedure and oversee the disclosure of company’s information and submit to the Board of Director Quarterly. The aforesaid financial statement has been prepared under generally accepted accounting standards of Thailand and has been sufficiently disclosed to ensure the completeness, adequacy and accurateness of the financial statements - Meetings of Board of Director Meetings of Board of Director are held regularly at least by every quarter. Additional meeting may be called depending on the nature of contingency but will be scheduled in advance. Meeting to follow up on company’s operating performance are also held periodically. For every meeting, Secretary to Board of Director is also assigned to prepare meeting agenda and send a notice letter to Board of Director at least 7 days prior to the meeting to provide adequate time to review the documents. The secretary is also assigned to prepare minutes of Meeting endorsed by Board of Director and distribute copy of the Minutes to each of director as well as to file the document properly and can be retrieved for further reference required by Board of Director and other related parties. In the meeting, Chairman of the Board of Director is regarded as chairman of the meeting where independent director can express ideas and comment independently. The resolution will be passed by majority vote of which on director is equal to one vote. The director with conflict of interest shall not participate in the meeting or refrain from casting their vote. If number of votes on such issue is equal, chairman of the meeting can cast additional vote and make final decision on that issue 4 and 5 meetings of Board of Directors were held in 2012 and 2013 respectively and each meeting was attended by all members of the Board of Director. - Internal Control and Internal Audit Internal control is an essential tool to monitor business practices both in management level and operation level. To enhance efficiency on business operation, the scope of responsibilities and operating authority of management and operation staffs are clearly defined in written statement. The utilization of company’s asset will be monitored to ensure the use for utmost benefits of the company. Scope of responsibilities for operation staffs and internal control officers is clearly separated. Internal auditors are appointed to review the effectiveness of internal control system and ensure that business operation and financial transaction strictly comply with company’s guideline. Review of company’s compliance to law and regulation are also conducted and submitted directly to audit committee and top management.
32
Annual Report 2013
Audit Fee In 2013, audit fee of the company consists of accounting audit fee worth 350,000 Baht and audit fee for financial statement worth 100,000 Baht per each quarter. The audit team comprising of Miss Siraprn Quaanunkun Mr. Supachai Panyawattano and Mr. Krisda Lerdwana from EY Office Limited has no involvement with company’s business.
The Connected Transactions The Connected Transactions
As of December 31, 2013. Inter-company transaction is presented in Notes No.7 to financial Statements Audit Committee conducted as follow: • • • • • •
Product pricing for inter-company transaction is based on market price Rental fee for warehouse is reasonably transaction and in accordance to mutual agreement. The rental fee is relevant to market price Trade accounts receivable-related companies is reasonably transaction and in accordance to the terms and conditions giving to all clients customer Trade accounts payable-related company is sensible transaction and in accordance as credit team Other-trade account payable related is reasonably transaction and in accordance to general trading credit team Director and management’s benefits is reasonably transaction, accordance and benefit in operation of company
Union Intraco Public Company Limited
33
Management Discussion and Analysis Business Performance
2011 2012 2013 Million Million Million % % % Baht Baht Baht Revenue from Product Sold 497.72 99.49% 645.31 97.93% 665.77 99.29% Other revenues 2.53 0.51% 13.65 20.07% 4.77 0.71% Total revenues 500.25 100.00% 658.96 100.00% 670.54 100.00% Cost of sales 405.99 81.57% 539.77 81.91% 544.39 81.19% Selling expensed 14.27 2.85% 17.36 2.63% 21.49 3.20% Administrative expenses 11.12 2.22% 11.82 1.79% 16.73 2.50% Executive’s compensation 6.89 1.38% 6.82 1.03% 7.46 1.11% Other expensed 9.73 1.95% 9.08 1.38% 14.83 2.21% Total expensed 448.01 89.56% 584.85 88.75% 604.90 90.21% Finance cost 4.44 0.09% 4.57 0.69% 3.45 0.51% Corporate income tax 12.18 2.43% 16.50 2.50% 12.66 1.89% Profit for the year 35.61 7.12% 53.04 8.05% 49.54 7.39% Remark : Other revenues are from exchange rate earnings and accrued interests
Revenue
Total revenue form 2011-2013 amounted to 500.25 million Baht 658.96 million Baht and 670.54 million Baht respectively. The main source of revenue is from selling products which is accounted for 97-99% of total revenue and the revenue from 2012 and 2013 has risen by 1.76% .The company aims to increase sales to 750 million Baht, but due to the economic slowdown, cost of product was increased and the situation of political crisis. The company could not to goal.
Cost of Goods Sold
Cost of goods sold from 2011-2013 amounted to 405.99 million Baht, 539.77 million Baht and 544.39 million Baht respectively. Our product was import from abroad cost of goods sold is decreased when exchange rate depreciated but cannot adjust the selling price. Cost of goods sold is accounted to 81.16%, 81.91 % and 81.19% of total revenue respectively 34
Annual Report 2013
Selling and Administrative Expenses From 2011-2013, Selling expensed amounted to 14.27 million Baht, 17.36 million Baht and 21.49 million Baht respectively, accounted for 2.85%, 2.63% and 3.20% of total revenue respectively. The increasing of Selling expensed main is the transportation. Most of selling and administrative expenses such as employee’s salary, sale promotion cost, and depreciation cost or warehouse rental fee are fixed cost and does not have direct variation to sales volume. From 2011-2013, management cost amounted to 11.12 million Baht, 11.82 million Baht and 16.73 million Baht respectively, accounted to 2.22%, 1.79% and 16.73% of total revenue respectively. From 2011-2013, executives salary amounted to 6.89 million Baht, 6.82 million Baht and 7.46 million Baht respectively. accounted to 1.38%,1.03% and 1.11% of total revenue respectively. Regarding to overview of selling and administrative expense and other expense from 2011-2013, it is found that the percentage to total revenue is declining from 8.4% in 2011 to 6.83% in 2012 but up to 9.02% in 2013.
Financial Status Cash and cash equivalents Trade account receivable-net Inventories- net Other current assets Available-for-sale investment Property, Plant and equipment -net Other non-current assets Total Asset Short-term loans from financial insti’ Trade and other payables Other current liabilities Total liabilities Total shareholders’ equity Total liabilities and shareholders’ equity
2011 Million % Baht 60.61 11.62% 124.30 23.82% 236.87 45.39% 7.13 1.37% 0.00 0.00% 92.59 17.75% 0.47 0.09% 521.78 100.00% 224.21 42.97% 53.35 10.22% 5.74 1.10% 283.30 54.29% 238.48 45.71% 521.78 100.00%
2012 Million % Baht 144.61 28.39% 152.06 29.85% 118.50 23.26% 1.17 0.23% 0.00 0.00% 90.43 17.75% 2.65 0.52% 507.56 100.00% 172.05 33.77% 49.06 9.63% 11.09 2.18% 232.20 45.58% 277.22 54.42% 507.42 100.00%
2013 Million % Baht 184.87 31.12% 171.24 28.82% 124.42 20.94% 1.28 0.22% 21.63 3.64% 89.56 15.07% 1.15 0.20% 594.15 100.00% 188.04 31.65% 82.07 13.81% 6.36 1.07% 276.47 46.53% 317.68 53.47% 594.15 100.00%
Union Intraco Public Company Limited
35
Assets As on year end of 2011-2013, the company’s total assets accounted for 521.78 million Baht, 509.42 million Baht and 594.14 million Baht respectively. Major components of company’s total assets are trade account receivable, inventories and non-current assets such as property, plant and equipment. The change on company’s total assets is largely due to the change of current assets such as account receivable and inventory. In 2013 add Available-for-sale investment 21.63 million Baht.
Liabilities By the end of year 2011-2013, the company’s total liabilities amounted to 283.30 million Baht 232.20 million Baht and 276.47 million Baht. Which is accounted to 45%-55% of total assets. Most of the company’s liabilities are from short term loans granted for purchasing of products in terms of credit limit for overdrafts and letter of credit as well as trade account payable. If the products re purchased from domestic manufacturers or distributors in Thailand, the company will make payment to trading partners directly and book the transaction as trade account payable with credit terms of 90 days. As for imported products, the company will make payment to commercial banks issuing letter of credit or trust receipt and the payment term is 180 days.
Shareholder’s Equity As the end of year 2011-2013, shareholder’s equity amounted to 238.48 million Baht, 277.22 million Baht and 317.68 million Baht respectively, accounted to 46-55% of the company’s total assets. The increase on shareholder’s equity is resulted from the company’s continuous growth
36
Annual Report 2013
Cash Flow Profit before tax Net cash flows (used in) operating activities Net cash flows (used in) investing activities Net cash flows (used in) financing activities Net increase(decrease) in cash and cash eauivalents Cash and Cash equivalents at end of year Remark : show on significant
2011 Million Baht 47.80 (96.65) 1.17 153.20 57.72 60.61
2012 Million Baht 69.53 153.59 (4.44) (65.15) 84.00 144.61
2013 Million Baht 62.20 69.52 (24.56) (4.70) 40.26 184.87
Cash Flow In case the company purchases products from manufacturers or distributors in Thailand, our cash flow will be granted in forms of trade account payable which is considered as cash flow from operating activities whereas the payment of imported products will be implemented by opening letter of credit or trust receipt with commercial banks. The cash flow from this transaction is considered as cash flow from financing activities. According to statement of ash flow, there may be changes on trade account payable and short term loans from financial institutions which response to business transaction sourcing product sourcing process as mentioned. As of end of year 2013, the company’s profit before income tax is equal to 62.20 million Baht and the company has expanded its working capital to decrease because unrealized exchange loss 10.71 million Baht. Profit from operating assets and liabilities amounted to 73.01 million Baht while cash flow from operating activities equals to 69.52 million Baht, cash flow used in from investing activities is accounted to 24.56 million Baht and cash flow used in from financing activities amounted to 4.70 million Baht. It can be summarized that the company’s cash flow is increased by 40.26 million Baht and cash is increased by 184.87 million Baht.
Union Intraco Public Company Limited
37
Financial Ratio Liqidity Ratio Current Ratio Quick Ratio Cash Ratio Account Receivable Turnover Average Collection Period Inventory Turnover Average Inventory Period Account Payable Turnover Average Payable Payment Period Cash Cycle Ratio Of Profit Gross Profit Margin Operating Profit Margin Cash To Profitability Net Profit Margin Return On Equity (ROE) Operating Efficiency Ratio Return On Assets (ROA) Return On Fix Assets Total Asset Turnover Financial Ratio Debt To Equity Interest Coverage Dividend Payout
38
Annual Report 2013
2011
2012
2013
1.52 0.66 -0.41 4.72 76.26 2.23 161.15 8.01 44.92 192
1.79 1.28 0.60 4.67 77.09 3.04 118.44 10.54 34.15 161
1.75 1.29 0.27 4.12 87.41 4.48 80.32 8.30 43.36 124
18.43% 10.50% -271.41% 7.12% 14.93%
16.36% 11.48% 289.60% 8.05% 19.13%
18.23% 9.86% 140.33% 7.39% 15.59%
6.82% 35.85% 0.95
10.41% 58.65% 1.27
8.34% 55.31% 1.12
1.19 -18.00 76.66%
0.84 38.19 109.32%
0.87 24.85 89.47%
Financial
Statements
Independent Auditor’s Report To the Shareholders of Union Intraco Public Company Limited I have audited the accompanying financial statements of Union Intraco Public Company Limited, which comprises the statement of financial position as at 31 December 2013, and the related comprehensive income, changes in shareholders’ equity and 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 referred to above present fairly, in all material respects, the financial position of Union Intraco Public Company Limited as at 31 December 2013, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards. Emphasis of matter I draw attention to Note 3 to the financial statements regarding the change in accounting policy due to the adoption of Thai Accounting Standard 12 Income Taxes. The Company has restated the financial statements for the year ended 31 December 2012, presented herein as comparative information, to reflect the adjustments resulting from such change. The Company has also presented the statements of financial position as at 1 January 2012 as comparative information, using the same accounting policy for income taxes. My opinion is not qualified in respect of this matter. Siraporn Ouaanunkun Certified Public Accountant (Thailand) No. 3844 Ernst & Young Office Limited Bangkok: 19 February 2014
Union Intraco Public Company Limited Statements of financial postion As at 31 December 2013
Union Intraco Public Company Limited Statements of financial position As at 31 December 2013
(Unit: Baht) As at Note
As at
As at
31 December 2013 31 December 2012
1 January 2012
(Restated) Assets Current assets Cash and cash equivalents
8
184,865,045
144,612,785
60,614,503
Trade and other receivables
9
171,244,514
152,058,800
124,303,007
Inventories
10
124,417,568
118,500,318
236,673,572
-
-
6,364,628
1,283,269
1,174,774
766,084
481,810,396
416,346,677
428,721,794
Other current assets Input tax refundable Others Total current assets Non-current assets Available-for-sale investment
11
21,628,000
-
-
Property, plant and equipment
12
89,563,562
90,425,876
92,586,961
110,220
1,867,697
26,480
1,040,983
782,708
472,656
Total non-current assets
112,342,765
93,076,281
93,086,097
Total assets
594,153,161
509,422,958
521,807,891
Deferred tax assets
4, 19
Other non-current assets
The accompanying notes are an integral part of the financial statements.
Union Intraco Public Company Limited Statements of financial postion (continued) As at 31 December 2013
Union Intraco Public Company Limited
Statements of financial position (continued) As at 31 December 2013
(Unit: Baht) As at Note
As at
31 December 2013 31 December 2012
As at 1 January 2012
(Restated) Liabilities and shareholders' equity Current liabilities Short-term loans from financial institutions
13
188,040,703
172,046,979
224,213,440
Trade and other payables
14
82,067,530
49,056,470
53,348,235
Current portion of liabilities under hire purchase agreement
15
409,385
1,033,358
996,544
Income tax payable
3,198,576
9,408,460
2,884,130
Other current liabilities
1,753,403
481,168
682,643
275,469,597
232,026,435
282,124,992
830,242
87,817
1,121,175
75,326
63,026
51,631
94,020
24,953
24,953
999,588
175,796
1,197,759
276,469,185
232,202,231
283,322,751
Total current liabilities Non-current liabilities Liabilities under hire purchase agreement - net of current portion
15
Provision for long-term employee benefits Deferred tax liabilities
4, 19
Total non-current liabilities Total liabilities
The accompanying notes are an integral part of the financial statements.
Union Intraco Public Company Limited Statements of financial postion (continued) As at 31 December 2013
Union Intraco Public Company Limited
Statements of financial position (continued) As at 31 December 2013
(Unit: Baht) As at Note
As at
As at
31 December 2013 31 December 2012
1 January 2012
(Restated) Shareholders' equity Share capital
16
Registered 212,333,276 ordinary shares of Baht 1 each
212,333,276
130,000,000
130,000,000
212,332,877
130,000,000
130,000,000
41,650,493
41,650,493
41,650,493
8,605,996
6,105,996
3,545,996
54,718,529
99,364,428
63,188,841
376,081
99,810
99,810
Total shareholders' equity
317,683,976
277,220,727
238,485,140
Total liabilities and shareholders' equity
594,153,161
509,422,958
521,807,891
-
-
-
Issued and fully paid up 212,332,877 ordinary shares of Baht 1 each (31 December 2012: 130,000,000 ordinary shares of Baht 1 each)
16
Share premium Retained earnings Appropriated-statutory reserve
17
Unappropriated Other components of shareholders' equity
The accompanying notes are an integral part of the financial statements.
Directors
Union Intraco Public Company Limited Statements of comprehensive income Union Intraco Public Company Limited For the year ended 31 December 2013
Statements of comprehensive income For the year 31 December 2013
(Unit: Baht) Note
2013
2012 (Restated)
Revenues Sales
665,773,074
645,309,761
4,768,429
4,627,217
-
9,020,984
Total revenues
670,541,503
658,957,962
Expenses Cost of sales
553,188,641
539,767,931
Other income Gains on exchange
Reversal of reduction of cost of inventories to net realisable value
(8,799,688)
-
544,388,953
539,767,931
Selling expenses
21,485,246
17,364,289
Administrative expenses
24,189,571
18,638,622
Loss on exchange
14,828,170
-
-
9,081,824
604,891,940
584,852,666
Profit before finance cost and income tax expense
65,649,563
74,105,296
Finance cost
(3,445,315)
(4,573,828)
Profit before income tax expense
62,204,248
69,531,468
(12,663,817)
(16,495,881)
49,540,431
53,035,587
Gain on revaluation of available-for-sale investments
345,339
-
Total other comprehensive income
345,339
-
Less: Relevant income taxes
(69,068)
-
Other comprehensive income for the year-net of relevant income taxes
276,271
-
49,816,702
53,035,587
0.23
0.25
Reduction of cost of inventories to net realisable value Total expenses
Income tax expense
19
Profit for the year Other comprehensive income
Total comprehensive income for the year Basic earnings per share
20
Profit attributable to equity holders of the Company Number of ordinary shares (shares) The accompanying notes are an integral part of the financial statements.
212,332,877
212,332,877
Union Intraco Public Company Limited
Union Intraco Public Company Limited
Cash flow statements
Cash flow statements For the year ended 31 December 2013
For the year ended 31 December 2013
(Unit: Baht) 2012
2013 Cash flows from operating activities Profit before tax
62,204,248
69,531,468
6,380,722
6,991,006
-
112,869
Adjustments to reconcile profit before tax to net cash provided by (paid from) operating activities: Depreciation Allowance for doubtful accounts (Reversal of) reduction of cost of inventories to net realisable value Gain on sales of assets Interest expenses Interest income Amortisation of deferred interest under hire purchase agreement Unrealised loss (gain) on exchange Provision for long-term employee benefits
(8,799,688) (628,326) 3,421,457
9,081,824 (79,639) 4,513,377
(316,557)
(226,601)
23,858
60,452
10,709,038
(2,253,625)
12,300
11,395
73,007,052
87,742,526
(19,185,714)
(27,888,689)
2,882,438
109,091,430
Profit from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade and other receivables Inventories Other current assets Other assets
(96,333) (258,275)
5,954,622 (310,052)
Operating liabilities increase (decrease) Trade and other payables Other current liabilities
32,519,025
(5,203,987)
1,351,454
670,533
Cash flows from operating activities
90,219,647
170,056,383
Cash paid for interest expenses
(3,582,864)
(4,652,658)
(17,116,224)
(11,811,452)
69,520,559
153,592,273
Cash paid for income tax expense Net cash flows from operating activities
The accompanying notes are an integral part of the financial statements.
Union Intraco Public Company Limited
Union Intraco Public Company Limited
Cash flow statements (continued) For the year ended 31 December 2013
Cash flow statements (continued)
For the year ended 31 December 2013
(Unit: Baht) 2012
2013 Cash flows from investing activities Investment in Available-for-sales securities Acquisition of assets
(21,282,661) (4,477,803)
(4,756,517)
Proceeds from sales of assets
882,131
85,271
Interest income
314,981
226,601
Net cash flows used in investing activities
(24,563,352)
(4,444,645)
Cash flows from financing activities Increase in short-term loans from financial institutions
-
72,000,000
Repayment of short-term loans
-
(72,000,000)
5,918,632
(49,912,102)
Increase (decrease) in trust receipts Cash paid for accounts payable - fixed assets
(79,036)
-
Repayment of liabilities under hire purchase agreement
(1,191,090)
(1,056,996)
Dividend paid
(9,353,453)
(14,180,248)
Net cash flows used in financing activities
(4,704,947)
(65,149,346)
Net increase in cash and cash equivalents
40,252,260
83,998,282
Cash and cash equivalents at beginning of year
144,612,785
60,614,503
Cash and cash equivalents at end of year
184,865,045
144,612,785
-
-
19
79,036
Supplemental cash flow information Non-cash transactions Purchase of assets on credit Purchase of assets under hire purchase agreement
The accompanying notes are an integral part of the financial statements.
1,286
-
Union Intraco Public Company Limited
212,332,877
The accompanying notes are an integral part of the financial statements.
Balance as at 31 December 2013
Total comprehensive income for the year
transferred to statutory reserve (Note 17) -
82,332,877
Stock dividend
Unappropriated retained earnings
-
130,000,000
Cash dividend
Dividend paid (Note 23)
Balance as at 31 December 2012 - as restated
deferred tax (Note 4) -
130,000,000
Balance as at 1 January 2012 - as previouly reported
Cumulative effect of change in accounting policy for
130,000,000
Balance as at 31 December 2012
Total comprehensive income for the year
-
-
Unappropriated retained earnings
transferred to statutory reserve (Note 17)
-
130,000,000
-
130,000,000
41,650,493
-
-
-
-
41,650,493
-
41,650,493
41,650,493
-
-
-
41,650,493
-
41,650,493
99,810
-
-
-
-
99,810
(24,953)
124,763
99,810
-
-
-
99,810
(24,953)
124,763
of assets
share capital
Share premium
from revalued
Unrealised gain
-
-
-
-
-
-
-
-
-
-
-
-
-
276,271
276,271
investments
available-for-sale
in values of
Surplus on changes
Other components of shareholders' equity
Issued and paid-up
Dividend paid (Note 23)
Balance as at 31 December 2011 - as restated
deferred tax (Note 4)
Cumulative effect of change in accounting policy for
Balance as at 1 January 2011 - as previouly reported
Statements of changes in shareholders' equity
Statements of changes in shareholders’ equity For the year ended 31 December 2013 For the year ended 31 December 2013
Union Intraco Public Company Limited
8,605,996
-
2,500,000
-
-
6,105,996
-
6,105,996
6,105,996
-
2,560,000
-
3,545,996
-
3,545,996
statutory reserve
Appropriated -
54,718,529
49,540,431
(2,500,000)
(82,332,877)
(9,353,453)
99,364,428
1,867,697
97,496,731
99,364,428
53,035,587
(2,560,000)
(14,300,000)
63,188,841
26,480
63,162,361
Unappropriated
Retained earnings
-
317,683,976
49,816,702
-
-
(9,353,453)
277,220,727
1,842,744
275,377,983
-
277,220,727
53,035,587
-
(14,300,000)
238,485,140
1,527
238,483,613
Total
(Unit: Baht)
Union Intraco Public Company Limited Notes to financial statements For the year ended 31 December 2013
1. Corporate information Union Intraco Public Company Limited (“the Company�) was incorporated as a public company under Thai laws. Its parent company is Union Petrochemical Public Company Limited, which was a public company incorporated in Thailand. The Company is principally engaged in the supply and distribution of chemical products. Its registered office is located at No.9/8 Moo 5, Salathammasop, Taweewattana district, Bangkok. 2. Basis of preparation The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Professions Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 3. New accounting standards Below is a summary of accounting standards that became effective in the current accounting year and those that will become effective in the future. (a) Accounting standards that became effective in the current accounting year Accounting standards: TAS 12 Income Taxes TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates Financial Reporting Standard: TFRS 8 Operating Segments
Accounting Standard Interpretations: TSIC 10 Government Assistance - No Specific Relation to Operating Activities TSIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets TSIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders Accounting Treatment Guidance for Transfers of Financial Assets
These accounting standards, financial reporting standard, accounting standard interpretations and accounting treatment guidance do not have any significant impact on the financial statements, except for the following accounting standard.
TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences between the carrying amount of an asset or liability in the statement of financial position and its tax base and recognise the tax effects as deferred tax assets or liabilities subjecting to certain recognition criteria. The Company have changed this accounting policy in this current period and restated the prior year’s financial statements, presented as comparative information, as though the Company had initially recognised the tax effects as deferred tax assets or liabilities. The cumulative effect of this change in accounting policy has been presented in Note 4 to the financial statements.
(b) Accounting standards that will become effective in the future Accounting Standards: TAS 1 (revised 2012) Presentation of Financial Statements TAS 7 (revised 2012) Statement of Cash Flows TAS 12 (revised 2012) Income Taxes TAS 17 (revised 2012) Leases TAS 18 (revised 2012) Revenue TAS 19 (revised 2012) Employee Benefits TAS 21 (revised 2012) The Effects of Changes in Foreign Exchange Rates TAS 24 (revised 2012) Related Party Disclosures TAS 28 (revised 2012) Investments in Associates TAS 31 (revised 2012) Interests in Joint Ventures TAS 34 (revised 2012) Interim Financial Reporting TAS 38 (revised 2012) Intangible Assets
Effective date 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014
Financial Reporting Standards: TFRS 2 (revised 2012) Share-based Payment TFRS 3 (revised 2012) Business Combinations TFRS 4 Insurance Contracts 1 January 2016 TFRS 5 (revised 2012) Non-current Assets Held for Sale and Discontinued Operations TFRS 8 (revised 2012) Operating Segments 1 January 2014 Accounting Standard Interpretations: TSIC 15 Operating Leases - Incentives Evaluating the Substance of Transactions TSIC 27 Involving the Legal Form of a Lease TSIC 29 Service Concession Arrangements: Disclosures TSIC 32 Intangible Assets - Web Site Costs Financial Reporting Standard Interpretations: TFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities TFRIC 4 Determining whether an Arrangement contains a Lease TFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds TFRIC 7 Applying the Restatement Approach under TAS 29 Financial Reporting in Hyperinflationary Economies TFRIC 10 Interim Financial Reporting and Impairment TFRIC 12 Service Concession Arrangements TFRIC 13 Customer Loyalty Programmes TFRIC 17 Distributions of Non-cash Assets to Owners TFRIC 18 Transfers of Assets from Customers
Effective date 1 January 2014 1 January 2014 1 January 2014
1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014 1 January 2014
The Company’s management believes that these accounting standards, financial reporting standard, accounting standard interpretations and financial reporting standards interpretations will not have any significant impact on the financial statements for the year when they are initially applied. 4. Cumulative effect of changes in accounting policies due to the adoption of new accounting standard During the current year, the Company made the changes described in Note 3 to the financial statements to its significant accounting policies, as a result of the adoption of Thai Accounting Standard 12 Income
4.
Cumulative effect of changes in accounting policies due to the adoption of new accounting standard During the current year, the Company made the changes described in Note 3 to the financial statements to its significant accounting policies, as a result of the adoption of Thai
Accounting Standard 12 ofIncome Taxes. Theaccounting cumulative effecthasofbeen the separately changes presented in the Taxes. The cumulative effect the changes in the policies in hasin shareholders’ been separately theaccounting statementspolicies of changes equity.presented in the statements of changes in shareholders’ equity.
The amounts of adjustments affecting the statements of financial position and the statements of The amounts of adjustments affecting the statements of financial position and the comprehensive income are summarised below. statements of comprehensive income are summarised below.
(Unit: Thousand Baht) As at
As at
As at
31 December 2013
31 December 2012
1 January 2012
Statements of financial position Increase in deferred tax assets
110
1,868
26
94
25
25
94
25
25
110
1,868
26
Increase in deferred tax liabilities Decrease in other components of shareholders’ equity Decrease in unappropriated retained earnings
(Unit: Thousand Baht) For the year ended
For the year ended
31 December 2013
31 December 2012
Statements of comprehensive income Profit or loss: Increase (decrease) in income tax expenses
1,758
(1,841)
(1,758)
1,841
(0.0083)
0.0087
69
-
Increase (decrease) in profit attributable to equity holders of the Company Increase (decrease) in basic earnings per share (Baht) Other comprehensive income: Gain on changes in value of available-for-sale investments
4
5. Significant accounting policies 5.1 Revenue recognition Sales of goods Sales of goods are recognised when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances. 5.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.
5.3 Trade accounts receivable Trade accounts receivable are stated at the net realisable 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 experience and analysis of debt aging.
5.4 Inventories Finished goods and work in process are valued at the lower of cost (first-in, first-out basis) and net realisable value. Such cost includes all production costs and attributable factory overheads. Raw materials and packing materials are valued at the lower of cost (first-in, first-out basis) and net realisable value and are charged to production costs whenever consumed. 5.5 Investments Investments in available-for-sale securities are stated at fair value. Changes in the fair value of these securities are recorded in other comprehensive income, and will be recorded in profit or loss when the securities are sold. The fair value of marketable securities is based on the latest bid price of the last working day of the year. The weighted average method is used for computation of the cost of investments.
In the event the Company reclassifies investments from one type to another, such investments will be readjusted to their fair value as at the reclassification date. The difference between the carrying amount of the investments and the fair value on the date of reclassification are recorded in profit or loss or recorded as other components of shareholders’ equity, depending on the type of investment that is reclassified.
On disposal of an investment, the difference between net disposal proceeds and the carrying amount of the investment is recognised in profit or loss. 5.6 Property, plant and equipment/Depreciation Land is stated at revalued amount. Buildings and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Land is initially recorded at cost on the acquisition date, and subsequently revalued by an independent professional appraiser to their fair values. Revaluations are made with sufficient regularity to ensure that the carrying amount does not differ materially from fair value at the end of reporting period. Differences arising from the revaluation are dealt with in the financial statements as follows: - When an asset’s carrying amount is increased as a result of a revaluation of the Company’s assets, the increase is credited directly to the other comprehensive income and the cumulative increase is recognised in equity under the heading of “Revaluation surplus”. However, a revaluation increase is recognised as income to the extent that it reverses a revaluation decrease in respect of the same asset previously recognised as an expense. - When an asset’s carrying amount is decreased as a result of a revaluation of the Company’s assets, the decrease is recognised in profit or loss. However, the revaluation decrease is charged to the other comprehensive income to the extent that it does not exceed an amount already held in “Revaluation surplus” in respect of the same asset. Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the following estimated useful lives: Buildings and building improvements - 20 years Machinery and equipment - 3 - 10 years Furniture and office equipment - 3 - 5 years Motor vehicles - 5 years No depreciation is provided on land and assets under installation. 5.7 Intangible assets Intangible assets with finite lives are amortised on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss. A summary of the intangible assets with finite useful lives is as follows: Useful lives Computer software 3 years
5.8 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company, whether directly or indirectly, or which are under common control with the Company. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors, and officers with authority in the planning and direction of the Company’s operations. 5.9 Long-term leases Leases of motor vehicle which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lower of the fair value of the leased motor vehicle and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in long-term payables, while the interest element is charged to profit or loss over the lease period. The motor vehicle acquired under finance leases is depreciated over the useful life of the motor vehicle. Leases of property, plant or equipment which do not transfer substantially all the risks and rewards of ownership are classified as operating leases. Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term. 5.10 Foreign currencies The financial statements are presented in Baht, which is also the Company’s functional currency. Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at the end of reporting period. Gains and losses on exchange are included in determining income. 5.11 Impairment of assets At the end of each reporting period, the Company performs impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss. However in cases where land was previously revalued and the revaluation was taken to equity, a part of such impairment is recognised in equity up to the amount of the previous revaluation.
In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal, which exceeds the carrying amount that would have been determined, is treated as a revaluation increase.
5.12 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company. The fund’s assets are held in a separate trust fund and the Company’s contributions are recognised as expenses when incurred. Defined benefit plans The Company has obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company treats these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from post-employment benefits are recognised immediately in profit or loss. The defined benefits liability comprises the present value of the defined benefit obligation less unrecognised past service cost and unrecognised actuarial gains or losses. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011.
5.13 Provisions Provisions are recognised when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
5.14 Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax. Current tax Current income tax is provided in the accounts at the amount expected to be paid to the taxation authorities, based on taxable profits determined in accordance with tax legislation. Deferred tax Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted at the end of the reporting period. The Company recognises deferred tax liabilities for all taxable temporary differences while they recognise deferred tax assets for all deductible temporary differences to the extent that it is probable that future taxable profit will be available against which such deductible temporary differences can be utilised. At each reporting date, the Company reviews and reduce the carrying amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. The Company records deferred tax directly to shareholders’ equity if the tax relates to items that are recorded directly to shareholders’ equity. 6. Use of accounting estimates The preparation of financial statements in conformity with financial reporting standards requires management to make estimates and assumptions in certain circumstances, affecting amounts reported in these financial statements and related notes. Actual results could differ from these estimates. 7. Related party transactions During the years, the Company had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties.
7.
Related party transactions During the years, the Company had significant business transactions with related parties. Such transactions, which are summarised below, arose in the ordinary course of business and were concluded on commercial terms and bases agreed upon between the Company and those related parties. (Unit: Thousand Baht) For the years ended 31 December 2013
Transfer pricing policy
2012
Transactions with related companies Sales of finished goods
134
442
Similar to market price
15,322
11,525
Similar to market price
Purchases of fixed assets
758
204
Similar to market price
Rental expenses
480
480
Contract price
Transportation expenses
127
107
Contract price
6
-
Contract price
129
-
Contract price
Purchases of finished goods
Inventories management expense Transportation income
As at 31 December 2013 and 2012, the balances of the accounts between the Company and those related companies are as follows: (Unit: Thousand Baht) 31 December 2013 31 December 2012 Trade accounts receivable - related company (Note 9) Union Petrochemical Public Company Limited
-
129
Total trade accounts receivable - related company
-
129
Union Petrochemical Public Company Limited
52
-
Total amounts due from related company
52
-
Union Petrochemical Public Company Limited
3,445
2,804
Lion Asia (Thailand) Company Limited
2,402
-
Total trade accounts payable - related companies
5,847
2,804
54
50
Directors
457
338
Total amounts due to related parties
511
388
Amounts due from related company (Note 9)
Trade accounts payable - related companies (Note 14)
Amounts due to related parties (Note 14) Union Petrochemical Public Company Limited
10
Directors and management’s benefits Directors and management’s benefits Directors and management’s benefits During ended 31 31 December 20132013 and and 2012,2012, the Company had employee benefitbenefit expenses of Duringthe theyear year ended December the Company had employee their directors and management as below.2013 and Directors management’s benefits During theand ended 31 December expenses ofyear their directors and management as 2012, below.the Company had employee benefit expenses theirended directors and management as 2012, below.the Company had employee benefit During theofyear 31 December 2013 and (Unit: Thousand Baht) expenses of their directors and management as below. For the year ended (Unit:31 Thousand Baht) December Short-term employee benefits Short-term employee benefits Post-employment benefits
Post-employment benefits Total Short-term employee benefits Total Post-employment benefits
Cash and cash equivalents
For2013 the year ended 31 December 2012 Baht) (Unit: Thousand 2012 4,641 For2013 the5,791 year ended 31 December 5,791 6 2013 6 5,797 5,791 5,797 6
4,641 6 2012 6 4,647 4,641 4,647 6
5,797
4,647
8. 8.
Total 8. Cash cash equivalents Cashand and cash equivalents
8.
Cash and cash equivalents
2013
(Unit: Thousand 2012 Baht)
Cash
2013 12
Cash Bank deposits
12 184,853 2013 184,853 184,865 12
2012 10 (Unit: Thousand Baht) 10 144,603 2012 144,603 144,613 10
Bank Total deposits Cash Total Bank deposits
(Unit: Thousand Baht)
184,865 184,853
144,613 144,603
As at 31 December 2013, bank deposits in saving accounts carried interests between 0.13 Total 184,865 144,613 As at1.88 31 December bank deposits in saving accounts carried per interests between 0.13 and percent per2013, annum (2012: between 0.13 and 0.88 percent annum).
Asand at 31 December bank deposits inbetween saving accounts carried between 0.13 and 1.88 percent percent2013, per2013, annum (2012: 0.13 and 0.88 interests percent annum). As at1.88 31 December bank deposits in saving accounts carried per interests between 0.13 9. Trade and other receivables per annum (2012: between 0.13 and 0.88 percent per annum). and 1.88 percent annum (2012: between 0.13 and 0.88 percent per annum). and other per receivables 9. Trade (Unit: Thousand Baht) 9. 9. Trade and other receivables Trade and other receivables Thousand 2012 Baht) 31 December 2013(Unit: 31 December Related company
31 December 2013 31 December 2012 (Unit: Thousand Baht)
Related Aged oncompany the basis of due dates
31 December 2013 31 December 2012 97
Aged ondue the basis of due dates Not yet Related company Not yet due Past Ageddue on the basis of due dates Past due 3 months NotUp yettodue
-
97
---
32 97 32 129
--
129 32
119,829119,829
105,764 129 105,764
51,364 119,829 51,364-
45,746 105,764 45,746 291
6 - 1212 months Over months 3 - 6 months Over 12 months Total 6 - 12 months Total Less: Allowance for doubtful accounts Over 12 months
51,364 193-193 171,386 171,386 (193) 193
291 129 45,746 129 193 291
193 152,123 129 152,123 (193) 193
Less: Allowance for doubtful accounts Trade Total accounts receivable - unrelated companies Trade accounts receivable Total trade receivables - net- unrelated Less: Allowance for doubtful accounts companies
(193) 171,193 171,386 171,193 171,193 (193)
(193) 151,930 152,123 151,930 152,059 (193)
Total receivables - net- unrelated companies Tradetrade accounts receivable
171,193 171,193
152,059 151,930
Upaccounts to 3 months Total receivable - related company Past due Total receivable - related company Unrelated Upaccounts to 3 companies months Unrelated Not yet duecompanies Total accounts receivable - related company Not yet Past dueduecompanies Unrelated Past due3 months NotUp yettodue Up 3 months 3 -due 6tomonths Past 3 - 6 months 6 Up 12 to 3months months
11
Related company Aged on the basis of due dates Not yet due
-
97
-
32
-
129
119,829
105,764
51,364
45,746
3 - 6 months
-
291
6 - 12 months
-
129
193
193
171,386
152,123
Past due Up to 3 months Total accounts receivable - related company Unrelated companies Not yet due Past due Up to 3 months
Over 12 months Total Less: Allowance for doubtful accounts
(193)
Trade accounts receivable - unrelated companies
171,193
Total trade receivables - net
171,193
31 December 2013 52 52 52 52 52 171,245 52 171,245
Trade and other receivables - net Inventories Inventories
152,059
10. Inventories Inventories
(Unit: Thousand Baht) (Unit: Thousand Baht)
10.
Finished goods Finished goods Goods in transit Finished Goods in goods transit Packing materials Goods inmaterials transit Packing Total Packing materials Total
2013 2012 2013 Cost 2012 83,903 115,680 2013 2012 83,903 115,680 40,644 11,347 83,903 115,680 40,644 11,347 153 555 40,644 11,347 153 555 124,700 127,582 153 555 124,700 127,582
Reduction of cost Reduction of cost of inventories to Reduction of cost of inventories to net realisable value ofrealisable inventories to net value 2013 2012 net realisable2012 value 2013 (282) (9,082) 2013 2012 (282) (9,082) (282) (9,082) (282) (9,082) (282) (9,082)
124,700 127,582 Total 11. Investment in available-for-sales securities (282) 11. Investment in available-for-sales securities 11. Investment in available-for-sales securities
11.
(Unit: Thousand Baht) Inventories-net Inventories-net 2013 2012 Inventories-net 2013 2012 83,621 106,598 2013 2012 83,621 106,598 40,644 11,347 83,621 106,598 40,644 11,347 153 555 40,644 11,347 153 555 124,418 118,500 153 555 124,418 118,500
(9,082)
124,418
Type of investments Available-for-sale securities Available-for-sale securities Total Available-for-sale securities Total
Unrealised gain on Unrealised gain on changes in value of changes in value of Unrealised gain on investment investment changes in value of 2013 2012 investment 2013 2012
Cost Cost
2013 2012 2013 Cost 2012
2013 21,283 21,283 21,283 21,283
2012
-
2013 345 345 345 345
2012
118,500
(Unit: Thousand Baht) (Unit: Thousand Baht)
Investment in available-for-sales securities
Type of investments Type of investments
31 December 2012 -152,059 152,059-
171,245
Cost Cost
151,930
152,059Baht) (Unit: Thousand (Unit: Thousand Baht) 31 December 2013 31 December 2012 11 Thousand 2012 Baht) 31 December 2013(Unit: 31 December
Other receivables Other receivables Amount due from related company Other receivables Amount due from related company Total other receivables Amount duereceivables from related company Total other Trade and other receivables - net Total other receivables Trade and other receivables - net
10. 10.
(193)
(Unit: Thousand Baht) Carrying amount Carrying amount 2013 2012 Carrying amount 2013 2012 -
2013 21,628 21,628 21,628 21,628
2012
-
21,283 sold available-for-sale 345 21,628 During the year 2013, the Company securities with book values Total During the year 2013, the Company sold available-for-sale securities with book values totaling Baht 0.03 million and recognised gains (after tax) on the sales amounting to Baht totaling Bahtyear 0.032013, millionthe and recognised gains (after tax) on the sales amounting to Baht During the 0.01 million in profit or loss. Company sold available-for-sale securities with book values
0.01 million profitmillion or loss. totaling Bahtin0.03 and recognised gains (after tax) on the sales amounting to Baht
0.01 million in profit or loss.
During the year 2013, the Company sold available-for-sale securities with book values totaling Baht 0.03 million and recognised gains (after tax) on the sales amounting to Baht 0.01 million in profit or loss.
Property, plant 12.12. Property, plant and andequipment equipment (Unit: Thousand Baht) Cost basis Assets under Land-
Buildings
Machinery
Furniture,
Revaluation
and building
and
and office
Motor
and under
basis
improvement
equipment
equipment
vehicles
construction
32,566
4,351
7,537
-
853
328
3,500
154
-
-
-
32,353
4,679
11,037
154
1,919
169
2,912
655
installation Total
Cost / Revalued amount: 1 January 2012
47,167
24,732
Additions
-
-
Disposals
-
-
47,167
24,732
Additions
-
117
Disposals
-
-
31 December 2012
Transfer
(1,066)
(2,075)
-
(1,552)
-
116,353 4,835 (1,066) 120,122 5,772 (3,627)
-
154
-
-
-
47,167
25,003
32,197
4,848
12,397
655
122,267
1 January 2012
-
4,381
14,239
3,067
2,078
-
23,765
Depreciation for the year
-
1,237
3,633
642
1,479
-
6,991
Depreciation on disposals
-
-
-
-
-
(1,061)
31 December 2012
-
5,618
16,811
3,709
3,557
-
29,695
Depreciation for the year
-
1,250
3,013
514
1,604
-
6,381
Depreciation on disposals
-
-
(1,552)
-
(3,374)
31 December 2013
-
6,868
18,002
4,223
3,609
-
32,702
1 January 2012
1
-
-
-
-
-
1
31 December 2012
1
-
-
-
-
-
1
31 December 2013
1
-
-
-
-
-
1
31 December 2012
47,166
19,114
15,542
970
7,480
154
90,426
31 December 2013
47,166
18,135
14,195
625
8,788
655
89,564
31 December 2013
(154)
-
Accumulated depreciation:
(1,061)
(1,822)
-
Allowance for impairment loss:
Net book value:
Depreciation for the year 2012 (Baht 4.4 million included in cost of sales, and the balance in selling and administrative expenses)
6,991
2013 (Baht 3.8 million included in cost of sales, and the balance in selling and administrative expenses)
6,381
The Company arranged for an independent professional valuer to appraise the value of land in 2010 using the market approach. As a result of the revaluation the value of the land increased by Baht 0.12 million, which the Company recorded in shareholders' equity, and provision for impairment occurred by Baht 0.001 million, with the Company recording this loss in the statement of comprehensive income for the year ended 31 December 2010. As at 31 December 2013, the Company had vehicles under hire purchase agreements with net book values amounting to Baht 5 million (2012: Baht 4.3 million). As at 31 December 2013, certain plant and equipment items have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those
The Company arranged for an independent professional valuer to appraise the value of land in 2010 using the market approach. As a result of the revaluation the value of the land increased by Baht 0.12 million, which the Company recorded in shareholders’ equity, and provision for impairment occurred by Baht 0.001 million, with the Company recording this loss in the statement of comprehensive income for the year ended 31 December 2010.
As at 31 December 2013, the Company had vehicles under hire purchase agreements with net book values amounting to Baht 5 million (2012: Baht 4.3 million).
As at 31 December 2013, certain plant and equipment items have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those assets amounted to approximately Baht 10.6 million (2012: Baht 12.7 million).
13. Short-term loans from financial institutions 13.13. Short-term fromfinancial financialinstitutions institutions Short-term loans loans from
Short-term loans from Short-term loans from financial institutions financial institutions Total Total
Interest rate Interest rate 31 December 2013 31 December 2012 31 December 2013 31 December 2012 (percent per annum) (percent per annum) Market rate plus / Market rate plus / Market rate plus / Market rate plus / minus stipulated minus stipulated minus stipulated minus margin marginstipulated margin
margin
(Unit: Thousand Baht) (Unit: Thousand Baht) 31 December 2013 31 December 2013
188,041 188,041 188,041 188,041
31 December 2012 31 December 2012
172,047 172,047 172,047 172,047
As at 31 December 2013, the non-secured short-term credit facilities of the Company which As 31 2013, non-secured credit of the Company As atatnot 31December December 2013, the the non-secured short-term credit facilities facilities of the Company which have yet been drawn down amounted short-term to approximately Baht 729 million (2012:which Baht
have notbeen yet drawn been drawn down amounted to approximately Baht 729 million Baht not million). yet down amounted to approximately Baht 729 million (2012: Baht (2012: 732 million). 732 732 million). 14.14. Trade Trade and and other other payables payables 14. Trade and other payables
Trade payables - related companies Trade payables - related companies Trade payables - unrelated companies Trade payables - unrelated companies Other payables - related companies Other payables - related companies Other payables - unrelated companies Other payables - unrelated companies Other payables - fixed assets Other payables - fixed assets Accrued expenses Accrued expenses Total trade and other payables Total trade and other payables
15. 15.
Liabilities under hire purchase agreements Liabilities under hire purchase agreements
(Unit: Thousand Baht) (Unit: Thousand Baht) For the year ended 31 December For the year ended 31 December 2013 2012 2013 2012 5,847 2,804 5,847 2,804 68,191 38,486 68,191 38,486 511 388 511 388 695 862 695 862 19 79 19 79 6,437 6,805 6,805 6,437 82,068 49,056 82,068 49,056
(Unit: Thousand Baht) Baht) 31 December(Unit: Thousand 31 December 31 December 2013
31 December 2012
have
Other payables - related companies
511
388
Other payables - unrelated companies
695
862
19
79
6,805
6,437
82,068
49,056
Other payables - fixed assets Accrued expenses Total trade and other payables
Liabilities under agreements 15.15. Liabilities underhire hirepurchase purchase agreements (Unit: Thousand Baht) 31 December
31 December
2013
2012
Liabilities under hire purchase agreements
1,240
Less: Deferred interest expenses
1,145
(1)
Total
(24)
1,239
Less: Portion due within one year
1,121
(409)
(1,033)
Liabilities under hire purchase agreements - net 830
of current portion
88
The Company has entered into the hire purchase agreement with leasing company for
The Company has entered into the hire purchase agreement with leasing company for rental of motor rental of motor vehicles for use in its operation, whereby it is committed to pay rental on a vehicles for use in its operation, whereby it is committed to pay rental on a monthly basis. The term of basis. The term of the agreement is 3 and 4 years. monthly the agreement is 3 and 4 years. 14
As at andand 2012, futurefuture minimum lease lease payments requiredrequired under the hire purchase As at 31 31December December2013 2013 2012, minimum payments under the agreements were as follows:
hire purchase agreements were as follows: (Unit: Thousand Baht) 31 December 2013 Less than 1 year Future minimum lease payments Deferred interest expenses Present value of future minimum lease payments
1-5 years
410
830
(1)
-
409
830
Total 1,240 (1) 1,239
(Unit: Thousand Baht) 31 December 2012 Less than 1 year Future minimum lease payments Deferred interest expenses Present value of future minimum lease payments
16.
1-5 years
1,057 (24) 1,033
88 88
Total 1,145 (24) 1,121
Share capital On 23 April 2013, the Annual General Meeting of the Company’s shareholders approved the increase of the Company’s registered share capital from Baht 130,000,000 (130,000,000 ordinary shares of Baht 1 each) to Baht 182,000,000 (182,000,000 ordinary shares of Baht 1 each), and the Company registered the paid-up share capital from Baht 130,000,000 (130,000,000 ordinary shares of Baht 1 each) to Baht 181,999,951 (181,999,951 ordinary shares of Baht 1 each) from stock dividend.
16.
Share capital On 23 April 2013, the Annual General Meeting of the Company’s shareholders approved the increase of the Company’s registered share capital from Baht 130,000,000 (130,000,000 ordinary shares of Baht 1 each) to Baht 182,000,000 (182,000,000 ordinary shares of Baht 1 each), and the Company registered the paid-up share capital from Baht 130,000,000 (130,000,000 ordinary shares of Baht 1 each) to Baht 181,999,951 (181,999,951 ordinary shares of Baht 1 each) from stock dividend.
17.
Subsequently, on 9 December 2013, the Extraordinary General Meeting of the Company’s shareholders No. 1/2013 approved the decrease in its registered share capital by eliminating the remaining 49 registered shares from the allocation of the stock dividend of Baht 1 each, or a total of Baht 49. In addition, the Company registered the increase in its registered share capital from Baht 181,999,951 (181,999,951 ordinary shares at a par value of Baht 1 each) to Baht 212,333,276 (212,333,276 ordinary shares at a par value of Baht 1 each) to reserve for the stock dividend. The Company also registered the increase in its paid-up share capital from Baht 181,999,951 (181,999,951 ordinary shares at a par value of Baht 1 each) to Baht 212,332,877 (212,332,877 ordinary shares at a par value of Baht 1 each) to support the increase in share capital from distribution of the stock dividend as discussed in Note 23 to Statutory reserve the financial statements. The Company registered the decrease and increase in its register share capital and the increase in its 116 paid-up share capital with the Ministry ofAct Commerce during year 2013.is Pursuant to Section of the Public Limited Companies B.E. 2535, thethe Company required to set aside to a statutory reserve at least 5 percent of its net income after
17. Statutory reserve brought forward (if any), until2535, the the reserve reaches 10 to deducting Pursuant toaccumulated Section 116 ofdeficit the Public Limited Companies Act B.E. Company is required registered statutory reserve is after not deducting available accumulated for dividenddeficit percent set aside of to athe statutory reservecapital. at least The 5 percent of its net income distribution. brought forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not available for dividend distribution. 18.
Expenses by nature
18. Expenses by nature expenses by nature are as follows: Significant Significant expenses by nature are as follows: (Unit: Thousand Baht) 31 December
31 December
2013
2012
12,778
10,277
Executive’s compensation
7,459
6,819
Depreciation
6,381
6,991
513,830
444,638
32,332
89,352
Rental expenses from operating lease agreements
3,091
1,956
Transportation expenses
9,938
7,348
Loss (gain) on exchange
14,828
(9,021)
(8,800)
9,082
Salary and wages and other employee benefits
Purchase of raw materials and finished goods Changes in inventories of raw material and finished goods
(Reversal) Reduction of cost of inventory to net realisable value
19.
Income tax Income tax expenses for the years ended 31 December 2013 and 2012 are made up as follows:
Transportation expenses
9,938
Loss (gain) on exchange
14,828
7,348 (9,021)
(Reversal) Reduction of cost of inventory to net realisable value
19.
(8,800)
9,082
Income tax
19. Income Income tax tax expenses for the years ended 31 December 2013 and 2012 are made up as follows: Income tax expenses for the years ended 31 December 2013 and 2012 are made up as follows: (Unit: Thousand Baht) 2013
2012 (Restated)
Current income tax: Current income tax charge
10,906
18,337
Deferred tax: Relating to origination and reversal of temporary differences
1,758
(1,841)
Income tax expense reported in the statement of
The amounts of income tax relating to each component of other comprehensive income for comprehensive income
12,664
The amounts of income tax relating to each component of other comprehensive income for the years (Unit: Thousand Baht) ended 31 December 2013 and 2012 are as follows:
the years ended 31 December 2013 and 2012 are as follows:
2013
Deferred tax relating to gain on change in value of
2012 (Unit: Thousand Baht) 16 (Restated) 2012
2013
available-for-sale investments Deferred tax relating to gain on change in value of Deferred tax relating to gain on revaluation of land available-for-sale investments
Deferred tax relating to gain on revaluation of land
16,496
the years ended 31 December 2013 and 2012 are as follows: The amounts of income tax relating to each component of other comprehensive income for
69
(Restated) -
25 69 94 25
25 25 25
94
25
Reconciliation between income tax expenses and the product of accounting profit
Reconciliation between income tax expenses and the product of accounting profit multiplied by
multiplied by the applicable tax rates for the years ended 31 December 2013 and 2012 Reconciliation between expenses and 2013 the and product the applicable tax rates forincome the yearstax ended 31 December 2012 of accounting profit Baht) multiplied by the applicable tax rates for the years ended 31 December(Unit: 2013Thousand and 2012 2013 Accounting profit before tax
Accounting profit before tax Applicable tax rate Accounting profit before tax multiplied by Applicable tax rate applicable tax rate Accounting profit before tax multiplied by Effects of changes in the applicable tax rates applicable tax rate Effects of: Effects of changes in the applicable tax rates Non-deductible expenses Effects of: Additional expense deductions allowed Non-deductible expenses Total Additional expense deductions allowed Income tax expenses reported in the statement of Total comprehensive income Income tax expenses reported in the statement of
comprehensive income
2012 (Unit: Thousand Baht) (Restated) 2013 2012 62,204 69,531 (Restated)
62,204 20%
69,531 23%
20% 12,441
23% 15,992
12,441
276 15,992
234
276 241
(11) 234 223 (11)
(13) 241 228 (13)
223 12,664
228 16,496
12,664
16,496
The components and deferred taxtax liabilities are are as follows: Thecomponents componentsof deferredtax taxassets assets and deferred tax liabilities The ofofdeferred deferred tax assets and deferred liabilities as follows: (Unit: Thousand (Unit: Thousand Baht) Baht) Statements of of financial financial position Statements position As at at As
As at at As
As As at at
31 December
31 December
1 January
2013
2012
2012
31 December 31 December 2013
Allowance for doubtful accounts
39
Allowance for diminution in value of inventories
56
Provision for long-term employee benefits
Provision for long-term employee benefits
Total
2012
(Restated)
39
Allowance for doubtful accounts
Allowance for diminution in value of inventories
2012
(Restated)
Deferred tax assets
Deferred tax assets
1 January
39
16
1,816
-
39
56
16
1,816
15
-
13
15
10
13
10
110
1,868
26
110
1,868
26
Deferred liabilities available-for-sale investments Gain ontax re-measuring
69
-
-
Gain investments Gainon onre-measuring revaluation ofavailable-for-sale land
69 25
25-
25-
Gain on revaluation of land Total
25 94
25
25 25
Total
Deferred tax liabilities
Total 94 25 25 In October 2011, the cabinet passed a resolution to reduce the corporate income tax rate
20.
from 30 percent to 23 percent in 2012, and then to 20 percent from 2013.income In addition, in InIn October 2011, the cabinet passed resolution reduce corporate October 2011, the cabinet passed aaresolution totoreduce thethecorporate income taxtaxraterate from
30 from 30 percent to 23 percent in 2012, and then to 20 percent from 2013. In addition, in with rates for 2012 - 2014 were enacted through a royal decree. The Company reflected the resolution thethe cabinet, in December 2011, the decreases in tax ratesdecreases forhas 2012 -in2014 order to complyofwith resolution of the cabinet, in December 2011, the tax were the changes in the income tax rates in its deferred tax calculation, as presented above. enacted through a royal decree. The Company has reflected the changes in the income tax rates in its rates for 2012 - 2014 were enacted through a royal decree. The Company has reflected deferred tax calculation, as presented above. Earnings per share order toto comply with the resolution of the cabinet, December the decreases in tax percent 23 percent in 2012, and then to 20 percentin from 2013. In2011, addition, in order to comply
the changes in the income tax rates in its deferred tax calculation, as presented above.
Basic earnings per share is calculated by dividing profit for the year attributable to equity 20.20. Earnings Earnings per pershare share Basic earnings share is calculated dividing profit for theincome) year attributable to equityaverage holders of the holders of theper Company (excluding by other comprehensive by the weighted earnings per share is calculated by dividing for the average year attributable equity shares Basic Company comprehensive income) by profit the weighted number ofoftoordinary ordinary number of(excluding ordinary other shares in issue during the year, after adjusting the number holders inshares issue of during the the year,impact after adjusting the number of ordinaryincome) sharesinto reflect the impact of the stock Company (excluding by the 23 weighted average to the reflect of the other stock comprehensive dividend as discussed Note to the financial number dividendofasordinary discussedshares in Note 23 to the financial statements and the previous period’s earnings per issue during theper year, after adjusting the number ordinary statements and the previousinperiod’s earnings share has been recalculated as of if the stock share has been recalculated as if the stock dividend had been distributed and incurred at the beginning to had reflect the impact ofand theincurred stock dividend as discussed in Noteperiod 23 toreported. the financial dividend been distributed at the beginning of the earliest shares of the earliest period reported.
statements and the previous period’s earnings per share has been as if the stock Forrecalculated the year ended dividend had been distributed and incurred at the beginning of the earliest period reported. 31 December 2013 2012 For the year ended (Restated) Profit for the years (Thousand Baht) Weighted average number of ordinary shares (Thousand shares)
Profit for the years (Thousand Baht) Earnings per share (Baht/share)
Weighted average number of ordinary shares (Thousand shares) Earnings per share (Baht/share)
31 December
49,540
2013
212,333
49,540
0.23
212,333 0.23
53,036
2012
(Restated)
212,333
53,036
0.25
212,333 18 0.25 18
21.
Segment information Operating segment information is reported in a manner consistent with the internal reports that are regularly reviewed by the chief operating decision maker in order to make
about the allocation of resources to the segment and assess its performance. 21. decisions Segment information Operating segment information is reported in a manner consistent with the internal reports that are Company is principally engaged in the supply and distribution of chemical products. Its The regularly reviewed by the chief operating decision maker in order to make decisions about the allocation operations carried on only in Thailand. Segment performance is measured based on of resourcesare to the segment and assess its performance.
22.
operating profit or loss, on a basis consistent with that used to measure operating profit or
The Company is principally engaged As in the supply all andofdistribution of chemical products. Its operations loss in the financial statements. a result, the revenues, operating profits and
are carried on only in Thailand. Segment performance is measured based on operating profit or loss, on a basis consistent with that used to measure operating profit or loss in the financial statements. As a operating segment and geographical area. result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned reportable operating segment and geographical area. Provident fund assets as reflected in these financial statements pertain to the aforementioned reportable
Company 22. The Provident fundand its employees have jointly established a provident fund in accordance Provident Act B.E. 2530. Both employees the Company to the with The the Company and Fund its employees have jointly establishedand a provident fund incontribute accordance with the fund Provident FundatAct 2530. the salary. Company contribute to theis fund monthly monthly theB.E. rate of 2Both - 10employees percent ofand basic The fund, which managed by at the Ayudhya rate of 2 Fund - 10 percent of basic salary. The fund, which is managed by Ayudhya Fund Management Management Co., Ltd., will be paid to employees upon termination in Co., Ltd., will be paid to employees upon termination in accordance with the fund rules. During the year with the fund rules. During the year 2013, the Company contributed Baht 0.45 accordance 2013, the Company contributed Baht 0.45 million (2012: Baht 0.24 million) to the fund. million (2012: Baht 0.24 million) to the fund.
23. Dividends Dividends
23.
Dividends Final dividends for 2012
Approved by
Total dividends
Dividend per share
(Thousand Baht)
(Baht)
Annual General Meeting of the shareholders held on 23 April 2013
- Cash dividend
5,980
0.0460
51,999
0.4000
57,979
0.4460
3,373
0.0185
30,333
0.1666
33,706
0.1851
91,685
0.6311
14,300
0.1100
14,300
0.1100
- Stock dividend of 51.99 million ordinary shares Interim dividends
Extraordinary General Meeting of the shareholders no. 1/2013 held on 9 December 2013
- Cash dividend - Stock dividend of 30.33 million ordinary shares Total dividend for 2013 Final dividends for 2011
Annual General Meeting of the shareholders held on 23 April 2012
Total dividend for 2012
19
24.24. Commitments Commitmentsand andcontingent contingent liabilities liabilities Operating Operating lease leasecommitments commitments The Company has entered into several lease agreements in respect of the lease of warehouse and Company has entered into several lease agreements in respect of the lease of The service agreements. warehouse and service agreements. As As at at 31 December 2013, future minimum lease payments required under these non-cancellable 31 December 2013, future minimum lease payments required under these operating leases contracts were as follows. non-cancellable operating leases contracts were as follows.
Million Baht Payable within: Less than 1 year
3
1 to 5 years
3
Guarantees Guarantees approximately Baht Baht 11 million As As atat 31 31 December December 2013, 2013, there there were were outstanding outstanding bank bank guarantees guarantees ofof approximately 11(2012: Nil) (2012: issued Nil) by banks Company respect ofincertain performance million issuedonbybehalf banksofonthe behalf of thein Company respect of certain bonds as performance required in thebonds normal of business. These letters guarantee are These to guarantee due ascourse required in the normal courseof of business. letterspayments of guarantee to creditors. are to guarantee payments due to creditors. 25.25. Financial Financial instruments instruments 25.1 Financial risk management 25.1 Financial risk management The Company’s financial instruments, as defined under Thai Accounting Standard No.107 “Financial Company’s financial defined comprise under Thai Standard trade and The Instruments: Disclosure and instruments, Presentations”,asprincipally cashAccounting and cash equivalents, No.107 other receivables, loans, trade accounts and other payable and liabilities undercash finance lease “Financial short-term Instruments: Disclosure and Presentations”, principally comprise and agreement. The financial with these financialloans, instruments and how and theyother are managed is cash equivalents, traderisks andassociated other receivables, short-term trade accounts payable described below. and liabilities under finance lease agreement. The financial risks associated with these financial instruments and how they are managed is described below.
Credit risk Credit The Company is exposed to credit risk primarily with respect to trade accounts receivable, and other risk receivable. The Company manages the risk by adopting appropriate credit control policies and Company is exposed to credit risk primarily with respect to trade accounts receivable, The procedures and therefore does not expect to incur material financial losses. In addition, the Company receivable. The Company by adopting appropriate and doesother not have high concentrations of manages credit risk the sinceriskit has a large customer base.credit The maximum policies andrisk procedures does notofexpect to incur financial control exposure to credit is limited toandthetherefore carrying amounts trade and othermaterial receivables as stated in the In addition, theposition. Company does not have high concentrations of credit risk since it losses. statement of financial has a large customer base. The maximum exposure to credit risk is limited to the carrying
Interest rate riskand other receivables as stated in the statement of financial position. amounts of trade The Company’s exposure to interest rate risk relates primarily to its cash at banks and short-term rateHowever, risk Interest borrowings. since most of the Company’s financial assets and liabilities bear floating interest The ratesCompany’s or fixed interest which rate are risk closerelates to theprimarily markettorate, the atinterest is expected exposurerates to interest its cash banks rate and risk short term to beborrowings. minimal. However, since most of the Company’s financial assets and liabilities bear floating interest rates or fixed interest rates which are close to the market rate, the interest rate risk is expected to be minimal.
20
Significant financial assets and liabilities classified by type of interest rate are summarised
and liabilities by type of interest summarised the inSignificant the tablefinancial below, assets with those financialclassified assets and liabilities that rate carryarefixed interest in rates
table below, with those financial assets and liabilities that carry fixed interest rates further classified based on further classified based on the maturity date, or the repricing date if this occurs before the the maturity date, or the repricing date if this occurs before the maturity date. maturity date.
(Unit: Thousand Baht) 31 December 2013 Fixed interest rates Within
1-5
Over
Floating
Non- interest
1 year
years
5 years
interest rate
bearing
Effective Total
interest rate (% per annum)
Financial Assets Cash and cash equivalent
-
-
-
167,127
17,738
184,865
0.13 - 1.88
Trade accounts and other receivable
-
-
-
-
171,245
171,245
-
-
-
-
167,127
188,983
356,110
Short-term loans from financial institutions
-
-
-
188,041
-
188,041
1.25 - 1.80
Trade accounts and other payable
-
-
-
-
82,068
82,068
-
830
409
-
-
-
1,239
3.63
830
409
-
188,041
83,220
271,348
Financial liabilities
Liabilities under hire purchase agreement
(Unit: Thousand Baht) 31 December 2012 Fixed interest rates Within
1-5
Over
Floating
Non- interest
1 year
years
5 years
interest rate
bearing
Effective Total
interest rate (% per annum)
Financial Assets Cash and cash equivalent
-
-
-
112,679
31,934
144,613
0.13 - 0.88
Trade accounts and other receivable
-
-
-
-
152,059
152,059
-
-
-
-
112,679
183,993
296,672
Short-term loans from financial institutions
-
-
-
172,047
-
172,047
1.94 - 3.05
Trade accounts and other payable
-
-
-
-
49,056
49,056
-
1,033
88
-
-
-
1,121
3.63
1,033
88
-
172,047
49,056
222,224
Financial liabilities
Liabilities under hire purchase agreement
Foreign currency risk The Company’s exposure to foreign currency risk arises mainly from trading transactions that are denominated in foreign currencies. 21
Foreign currency risk The Company’s exposure to foreign currency risk arises mainly from trading transactions that are denominated in foreign currencies.
The balances financial assets and financial liabilities denominated in foreignincurrencies The balancesofofunhedged unhedged financial assets and financial liabilities denominated foreign are
summarisedare below. currencies summarised below. Foreign currency
Financial assets
Financial liabilities
Average exchange rate
as at 31 December
as at 31 December
as at 31 December
2013
2012
2013
2012
2013
2012
(Million)
(Million)
(Million)
(Million)
US dollar
-
0.07
7.05
5.94
32.8230
30.6270
Euro
-
-
0.09
0.07
45.3223
40.8603
(Baht per 1 foreign currency unit)
25.2 Fair values of financial instruments 25.2 Fair values of financial instruments Since the majority of the Company’s financial instruments are short-term in nature or bear floating Since interesttherates, their fair valueCompany’s is not expected to beinstruments materially different from theinamounts presented majority of the financial are short-term nature or bear in floating statements of financial position. interest rates, their fair value is not expected to be materially different from the
amounts presented in statements of financial A fair value is the amount for which an assetposition. can be
exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. The fair value is determined by reference A fair value is the amount for which an asset can be exchanged or a liability settled to the market price of the financial instruments or by using an appropriate valuation technique, between parties in an arm’s length transaction. The fair value is dependingknowledgeable, on the nature ofwilling the instrument. determined by reference to the market price of the financial instruments or by using an
26. appropriate Capital management valuation technique, depending on the nature of the instrument. The primary objective of the Company’s capital management is to ensure that it has an appropriate financialmanagement structure and preserves the ability to continue its business as a going concern. 26. Capital
The primary objective of capital the Company’s capital management is to ensure hasDecember an The Company manages its position with reference to its debt-to-equity ratio.that As atit 31
2013, the Company’s was 0.87:1 (2012: to 0.84:1). appropriate financial debt-to-equity structure and ratio preserves the ability continue its business as a going
27. concern. Subsequent event The On 19Company February manages 2014, a meeting of the Company’s Board of Directors No.1/2014 passed resolution its capital position with reference to its debt-to-equity ratio.aAs at to propose that the Annual General Meeting of the Shareholders to be held in April 2014 adopt a reso December 2013, the Company's debt-to-equity ratio was 0.87:1 (2012: 0.84:1). 31 lution to pay a dividend of Baht 0.05 per share, or a total of Baht 10.61 million, to the shareholders in respect of theevent 2013 earnings. 27. Subsequent
Such19dividend will2014, be paid and recorded after it is approved the Annual General passed Meeting aof On February a meeting of the Company’s Board ofbyDirectors No.1/2014 Company’stoshareholders. resolution propose that the Annual General Meeting of the Shareholders to be held in
the
2014ofadopt a resolution to pay a dividend of Baht 0.05 per share, or a total of Baht 28. April Approval financial statements the shareholders in respect of 2013byearnings. 10.61 These million, financialto statements were authorised fortheissue the Company’s Board of Directors on 19 February 2014. Such dividend will be paid and recorded after it is approved by the Annual General Meeting of the Company’s shareholders. 28.
Approval of financial statements These financial statements were authorised for issue by the Company’s Board of Directors on 19 February 2014.
Annual Report 2013
Union Intraco
Public Company Limeted English