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content Page Message from the Board of Director Audit Committee’s Report Report of the Board of Directors’ Responsibility for Financial Reports General Information Nature of Business Risk Factors Investment Financial Statement - Summary and Analysis Structure of Income Discussion and analysis of the company’s financial statement Shareholders and Management Management Profile Good Corporate Governance Related transaction Audit Fee Independent Auditor’s Report Statements of Financial Position Statements of Comprehensive Income Statements of Changes in Equity Statements of Cash Flows Notes to Financial Statements

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MESSAGE FROM THE BOARD OF DIRECTOR Economic analysts still have no strong evidence to support the trend of global economic recovery. In the United State of America, the unemployment rate remains high. Consequently, Fiscal policy is one of the main ways in which government tries to influence and stimulate overall economic performance. Moreover, the European sovereign debt crisis or Eurozone crisis, made it difficult for some countries in the euro area to repay their government debt, has not been solved successfully. So, the governments implement fiscal tightening by cutting its public spending to reduce its fiscal deficit. From the company’s standpoint, The United States and the European Union are major markets in the garment export business which is impossible for the company to escape from impacts. Within Thailand, the new daily minimum wage policy in 2012 has major impacts to the company. The impact is obvious since the company adjusted wages according to the policy which raise the direct labour cost of the production. However, the company has a solution for it. The major changes have adopted inside the factory to cut costs and increase the production’s efficiency. The outcomes are expected to show in year 2013 In the real estate development business, the flooding concerns gradually disappear among buyers in this year and the residential real estate has been increasingly popular. Since, the company’s products are twin houses and townhouses, located in the suburbs, those projects have been well responded by customers. Finally, I believe that the willingness to work hard of directors, executives, employees and supports from external parties such as government, financial institutions and others will lead the company to be competitive in the market and can operate successfully in the long run.

Mr.Boonchoo Pongchaloem Chairman of the Board of Director

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

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Audit Committee’s Report The Audit Committee was appointed by the Board of Directors of Castle Peak Holdings Public Company Limited. The Audit Committee consists of 3 Independent Directors, namely Ms. Piyada Sooksai as the Chairperson, with Mr.Songsak Wongsunkakorn and Ms.Thipawan Kramsri as members. Ms.Porntip Sripitaksakul, Head of the Internal Audit Division acts as the Committee’s secretary. Ms.Thipawan Kramsri was appointed by the Board of Directors’ resolution No. 12/2012 to be the Audit Committee member since August 1, 2012. All members of the Audit Committee possess complete qualifications of Independent Directors and Audit Committee members as comply with the regulations of Securities and Exchange Commission Thailand and The Stock Exchange of Thailand. During the year 2012, the Audit Committee performed its duties and responsibilities independently as assigned by the Board of Directors. The Audit Committee conducted 4 official meetings, which all three members attended in the Meeting No. 3/2012. There were only two members in the Meetings No. 1/2012 and 2/2012, and Ms.Thipawan Kramsri could not attend the Meeting No. 4/2012 due to maternity leave. The Audit Committee meetings involved the management of the Company and its subsidiaries, the external auditor, and the internal auditor to present information and exchange views on recommendations for performance improvement. The Audit Committee’s main accomplishments in 2012 were as follows: 1. Review of the financial report. The Audit Committee reviewed significant information in the quarterly and annual financial statements for 2012 of Castle Peak Holdings Public Company Limited and its subsidiaries. The Audit Committee reviewed the accuracy, completeness, and reliability, including the sufficient disclosure of the financial statements by questioning and listening to the explanations of the management and recommendations from the external auditor. The Audit Committee has agreed to the external auditor’s opinion that the Company financial statements were prepared correctly in accordance with generally accepted accounting principles. 2. Review of the internal control system and internal audit report. The Audit Committee has reviewed the internal audit reports quarterly, and considered that the Company has installed adequate and appropriate internal control systems for the Company’s operations, and has not found any significant deficiency impacting the Company’s financial statements. The Internal Audit Division has performed its duty independently and effectively. 3. Review of the related transactions or the transactions that might cause conflicts of interest. The Audit Committee has reviewed those transactions from management’s quarterly report and considered that all related transactions were normal business transactions, and were conducted properly in compliance with relevant rules and regulations. There was correct and adequate disclosure of such information. 4. Review of the Company’s compliance with the SEC law and other related laws and regulations. The Audit Committee has not found any significant issue involving violation of laws and regulations. 5. Consideration and selection of the auditors. The Audit Committee has selected and proposed to the Board of Directors to seek approval from the Annual General Shareholders’ Meeting to appoint Ms.Wimolsiri Jongudomsombut (CPA Registration No.3899) or Ms.Kannika Wipanurat (CPA Registration No.7305) or Mr.Jirote Sirirorote (CPA Registration No.5113) or Ms.Nonglak Pattanabandith (CPA Registration No.4713) of Karin Audit Co., Ltd. as the company’s auditors for 2013. On behalf of the Audit Committee

Ms. Piyada Sooksai Chairman of the Audit Committee 2

ANNUAL REPORT 2012


REPORT OF THE BOARD OF DIRECTORS’ RESPONSIBILITY FOR FINANCIAL REPORTS The company financial statement of Castle Peak Holdings Public Co., Ltd., and subsidiaries have been prepared in conformity with the requirements of the Public Company-Act B.E.2535, the Securities and Exchange Act B.E.2535, the Announcement of The Department of Commercial Registration dated September 14, 2001 issued in accordance with Section II, Paragraph 3 of the Accounting Act B.E.2543, and the accounting statement presented by the Federation of Accounting Professions. The Board of Directors is responsible for the financial statements including financial information in the Annual Report. The Financial Statements have been prepared in accordance with generally accepted accounting principles, with appropriate accounting policies applied on a conservative and consistent basis. Where judgment and estimates were required, these were made with careful and reasonable consideration, and adequate disclosures have been made in the notes to the financial statements, as well as being transparent and useful to all shareholders and investors. The Board has also adopted and maintained an appropriate and effective risk management, internal control, so that the company can be reasonably assured that the financial records are accurate, complete and adequate to protect the company assets. These controls also serve as preventive measures against any significant operational risk. The Board of Directors has appointed an Audit Committee entirely comprising independent directors responsible for the quality of company financial reporting and internal control system. The opinion of the Audit Committee with regard to these matters appears in the Report of the Audit Committee in this Annual Report. The Board is confident that the company has maintained an effective internal control system at an adequate and appropriate level of protection, which can assure the credibility of company and Consolidated Financial Statements as of December 31, 2012.

(Mr.Boonchoo Pongchaloem) Chairman

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

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General Information Castle Peak Holdings Public Co., Ltd. Public Company Registration No.0107537001056 Head Office: 899 CPH Tower, Petchkasam Road, Bangkae Sub-district, Bangkae District, Bangkok 10160. Telephone: 02-4550300 Fax: 02-4550358-9 E-mail Address: cph@castlepeak.co.th www.castlepeak.co.th Nature of business: Garment Manufacturing and Property Development Issued shares: 40,000,000 ordinary shares, Baht 10.00 Per share Registrar: Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110 Tel: 02-2292867 Fax: 02-6545642 Auditor: Ms.Wimolsiri Jongudomsombut Karin Audit Company Limited. 6 Fl., Room B1, Boonmitr Building, 138 Silom Road, Bangrak, Bangkok 10500 Tel: 02-6342484-6 Fax: 02-6342668 Consultant of law: Mr.Atiskit Jedsadayanmeta Head Office: 899 CPH Tower Fl.,14, Petchkasam Road, Bangkae Sub-district, Bangkae District, Bangkok 10160. Telephone: 02-4550300 Ext.233 Fax: 02-4550339

Nature of business Castle Peak Holding Limited Co. initially set up as a Castle Peak partnership, operated in September 1976. The purpose of the business is to produce garments for export overseas. Later on, the company grew bigger and established C.P.G. garment Limited. The main products of the company are jackets, coats, trousers and sportswear using textile fabrics as the raw materials. Products are manufactured under the customers’ brand names and the major export markets are United States and the European Union. Afterward in 1992, the company diversified the core business into the real estate development business. Products are twin houses, detached houses and commercial buildings. Up until now, six projects have been completed with the value of 3,725 million Baht and three projects are now under construction with the value of 1,225 million Baht

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ANNUAL REPORT 2012


Risks Garment business - Order cancellation by customers. Since the company manufactures products such as jacket, coat, pants and sportswear under the customers’ trademarks and designs with the agreement to deliver products on time. If the company fails to meet those requirements, there is a chance of order cancellation. In case that case, goods cannot be sold to other buyers because they are copyrighted products. The shortage of skilled labor is a major cause in missing the producing schedule. As a result, the company needs to improve the workforce’s skills to increase productivity. Moreover, production technical development and modern machines can reduce the production time. In case of missing the confirmed shipment date, it is better to transport by air than the whole order cancellation, even the transportation cost is high. - Exchange rate fluctuation: The company’s export value is about 95% in US currency and imported raw materials mostly in US currency also. Export to import ratio is 100 per 50. So the exchange rate fluctuations between the U.S. dollar and Baht is necessarily to mange since the appreciation of the baht has a significant impact on the profits of the company. In 2012, Thai Baht appreciated a lot. This had a direct impact on companies doing business shipment to foreign suppliers. The economic crisis has resulted in a direct impact on the value of the currency is inevitable, however, the company uses derivative financial instruments to reduce exchange rate risk to some extents. - Changes in government policy : New government 300 Baht minimum wage policy in Bangkok and suburb increased the cost of labor by about 40 percent. This may result in loss of the opportunity to compete in the global market. The company needs to cut, costs and increase production efficiency in order to remain competitive in the market. - The problem of shortage of skilled workers in Thailand. This caused movement of labor between countries such as Laos and Myanmar to Thailand. Moreover, entering the aging society of Thailand will affect the labour markets in the future. Real Estate Development Business - The new government’s policy to increase the minimum wage announced in Bangkok 300 Baht per day. - Risks associated with government policy such as tax cuts or tax increase has a direct impact toward sales of the company. - Risks associated with price competition. Thailand property market has continued to grow over the years. As a result, this cause to oversupply and high price competition. The above risk factors bring the higher construction cost, we have to strictly control and manage the building process, reduce the loss of materials, meliorate new technologies to save the construction time. These will lead the lower cost and increase the competitiveness. CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

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Investment Castle Peak Holdings Public Co., Ltd. invested in Companies at 10 percent or more of the issued shares as of December 31, 2012. Companies C.P.G.Garment Co., Ltd. Castle Peak Real Estate Co., Ltd. Castle Peak Pulp & Paper Co., Ltd. Thaneewatana Co., Ltd. *

Registered office Head Office: Castle Peak Holdings Public Co., Ltd. Head Office: Castle Peak Holdings Public Co., Ltd. Head Office: Castle Peak Holdings Public Co., Ltd. 1174/4 Phahon Yothin Rd., Chatuchak, Bangkok Tel: 02-9129455 Fax: 02-5869189

Registered Capital

% Shareholding Nature of Business

21,200,000.00

99.86

Baht 200,000,000.00

99.99

Baht 100,000,000.00

41.00

Baht

49.00

Baht

3,750,000.00

Garment Manufacturing Real Estate Development Pulp and Paper Real Estate Development

* Pending operation

Castle Peak Real Estate Co., Ltd.(subsidiary) invested in Companies as of December 31, 2012. Companies Aek Thana Property Co., Ltd. Sun Property Co., Ltd. Sermkit Property Co., Ltd.

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Registered office

Registered Capital

Head Office: Castle Peak Holdings Public Baht Co., Ltd. Head Office: Castle Peak Holdings Baht Public Co., Ltd. Head Office: Castle Peak Holdings Baht Public Co., Ltd.

% Shareholding Nature of Business

10,000,000.00

99.99

3,750,000.00

99.99

15,000,000.00

99.99

Real Estate Development Real Estate Development Real Estate Development

ANNUAL REPORT 2012


Financial Statement - Summary and Analysis Unit : Baht Parent Company

Consolidated Total Revenues Sales Revenue Gross Profit Gross Profit Rate Profit from operation Operation Profit Rate Net Profit Net Profit Rate Return on Equity Rate Retrun on Assets Rate Return of Fixed Assets Rate Net Profit per share Current Assets Total Assets Current Liabilities Total Liabilities Shareholders’ equity Book value per share Liguidity Ratio Trade Account Receivable Turnover Ratio Inventory Turnover Ratio Trade Account Payable Turnover Ratio Debt Equity Ratio

2012

2011

2010

1,245,306,455.14 1,209,260,872.65 154,213,725.58 12.75% 45,596,660.97 3.77% (44,992,752.43) (3.61%) (5.01%) (3.58%) (4.70%) (1.12) 761,667,350.49 1,245,272,355.20 348,966,210.43 370,556,828.12 874,715,527.08 21.87 2.18 8.02

941,696,991.21 907,170,345.22 136,487,049.25 15.05% 18,446,628.16 2.03% (22,437,061.73) (2.38%) (2.47%) (1.94%) (1.22%) (0.56) 733,157,462.72 1,268,749,336.43 320,785,052.97 346,791,495.97 921,782,039.49 23.04 2.29 6.57

1,040,437,752.96 1,017,195,486.64 68,311,134.49 6.72% (54,230,556.41) (5.33%) (64,591,166.69) (6.21%) (6.98%) (5.88%) (4.70%) (1.61) 548,192,703.89 1,041,021,581.22 145,977,956.02 145,977,956.02 894,891,564.87 22.37 3.76 9.48

63.97 19.89

25.66 21.03

39.49 8.84

0.42

0.38

0.16

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

2012

2011

2010

765,592,464.22 655,136,480.62 730,425,459.05 620,927,861.23 99,859,905.17 79,182,980.51 13.67% 12.75% 58,268,578.76 41,103,364.82 1.98% 6.62% 43,635,059.05 (31,140,065.59) 5.70% 4.75% (4.20%) 5.54% 3.15% 3.97% 32.48% 9.89% 0.78 1.09 531,343,720.57 491,939,241.16 1,141,531,599.35 1,057,449,081.80 322,024,710.29 287,829,566.48 332,258,090.98 291,810,632.48 809,273,508.37 765,638,449.32 19.14 20.23 1.71 1.65 5.86 6.94

742,626,820.66 723,128,377.38 39,233,242.96 5.43% (12,905,234.81) (1.78%) (23,547,004.33) (3.17%) (3.24%) (2.42%) (0.01%) (0.59) 396,667,189.34 917,840,388.22 201,870,240.88 201,870,240.88 715,970,147.34 17.90 1.96 9.64

287.70 15.19

14.18 16.76

7.86 9.12

0.41

0.38

0.28

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Structure of Income Garment Manufactured by:-

2012 % Shareholding Million Baht % 100.00 99.86

Castle Peak Holdings Public Co.,Ltd. C.P.G.Garment Co., Ltd. Sub-Total

620.85 461.24 1,082.09

51.34 38.14 89.48

2010

2011 Million Baht

%

Million Baht

%

597.85 292.51 890.36

65.91 32.24 98.15

515.55 287.50 803.05

50.69 28.26 78.95

Property Development Operated by

2012 % Shareholding Million Baht %

Castle Peak Holdings Public Co.,Ltd. Castle Peak Real Estate Co., Ltd. Aek Thana Property Co., Ltd. * (Indirect) Sub-Total Total

100.00 99.99 99.98

74.75 26.74 25.68 127.17 1,209.26

6.18 2.21 2.13 10.52 100.00

2011

2010

Million Baht

%

Million Baht

%

7.78 1.48 7.55 16.81 907.17

0.86 0.16 0.83 1.85 100.00

194.69 19.45 214.14 1,017.19

19.14 1.91 21.02 100.00

* Held by Castle Peak Real Estate Co., Ltd

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ANNUAL REPORT 2012


Discussion and analysis of the company’s financial statement Total net profit of Castle Peak Holdings Co., Ltd. (Thailand) in 2012 was 43,635,059.05 Baht. Dividing into two main segments, the garment business gained profit of 25,973,895.10 Baht and real estate development business had 17,661,163.95 Baht of profit. Total sales in garment business in 2012 was 655,675,459.05 Baht. The cost of goods sold was 582,933,491.98 baht or 88.91 percent of sales. Compared to 2011, the percentage of costs of goods sold to sales was only 87.02. The increase came from the new minimum wage policy announced on April 1, 2012. As a result, the company adjusted wages throughout the company which affected the increasing of direct labour cost. In property development business, the sales of commercial buildings of Siwarat 10 which is located on Bang Len-Lat Lum Kaeo Road, Bang lain district, Nakhon Pathom province was 74,908,009.04 Baht. The net profit was 17,661,163.95 Baht The overall performance of Castle Peak Holdings Limited (Company) and its subsidiaries in the year 2012 showed a net loss of 44,986,418.86 Baht. As mentioned above, the garment business was affected by the increasing cost of raw materials and labors. The net profit in garment in 2012 was 17,621,472.59 Baht, which was lower than in 2011 Baht 19,938,096.71 In real estate development sector, were people still worried about flooding in the early of 2012, since there was a big flood in Bangkok in late 2011. In addition, the government campaign Bt100,000 excise tax cut for first-car buyers and Bt 500,000 excise tax cut for first-house buyers were launched during 2011-2012. However, people were more interested in buying cars than houses. For the second half of the year 2012, the flooding concerns gradually disappeared among buyers. As the results, three ongoing projects, Siwarat 7, Siwarat 9 and Siwarat 10, had been increasingly popular. To conclude, the net sales of real estate sector was127.17 million baht, with net profit of 10,526,925.58. Compared to 2011, the sales were 16.81 million. With net loss 28,579,118.87 Baht. Castle Peak Holdings Ltd. holds 41 percent direct and indirect investment in Castle Peak Pulp and Paper Industries Co. Ltd and Yueyang Fengli pulp and paper industry. These companies are in pulp and paper industry, located in the Republic of China. China had enjoyed the exponential growth for years, however, there was a slowdown sign in the Chinese economic in 2009. In additional, Eurozone crisis occurred which made Demands for consumer goods declined. As a result, Yueyang Fengli Pulp and Paper Industry Co., Ltd. was unable to produce at full capacity due to the low demand. Therefore, the consolidated financial statements of the Company recorded a loss of 73,559,660.78 Baht. In September 2012, The Board of Directors approved to terminate Castle Peak International Limited. 99 % of this company’s shares were held by Castle Peak Holdings Co., Ltd. This company was caused in 2007 due to unfavorable economic conditions. There was no adjustment in the company’s consolidated financial statement in 2012 since the cost of impairment was set prior.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

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Discussion and analysis of the company’s financial statement (cont.) Analysis of the company’s financial position Assets The consolidated financial statements as of 31 December 2555 revealed total assets of the company 1,245,272,355.20 baht. It decreased from 2011 in the amount of 23,476,981.23 Baht because of a major reason. - The flooding in Bangkok caused two factories unable to fully operate in November 2011. This led to high level of inventories which were 238,628,081.21 Baht. While there was no obstacle in 2012, the year end ‘s inventories were 195,272,735.33. The reduction was 43,055,345.88 Baht. Debts According to the consolidated financial statements as at 31 December 2012, total liabilities were 370,556,828.12 Baht , raising from those in 2011 in the amount of 23,765,332.15 baht . In detail, account payable increased 17,540,190.39 Baht and employee benefit obligations were recorded in 2012 as 10,814,325 Baht. Shareholders In 2555, the company and its subsidiaries had net operating loss. 44,986,418.86 baht after the adjustment of 2,249,560.95 Baht. As a result, shareholders’ equity as at 31 December 2012, went down from those of last year in amount of 47,242,313.38 Baht. Liquidity ratios In 2012, there was no significant negative impact toward the company in both sectors. The company had sufficient liquidity to operate. Profitability ratios Castle Peak Holdings Co., Ltd. (Thailand) showed net profit of 43,635,059.05, an increase from last year 12,494,993.46 baht or 40.13 percent. As a result, profitability ratio of 2012 was higher than in 2011. In the consolidated financial statement, 73,559,660.78 Baht losses from subsidiaries were recorded in 2012 It affected the bottom line showed a net loss of THB 44,986,418.86. Compared to 2011, the net loss of the company was 22,437,061.73 Baht. Therefore, the ratio of 2012 was lower than in 2011 Efficiency ratios Castle Peak Holdings Limited (Company)‘s net profit rose 40.13 percent which proved the efficiency in 2012 was higher than previous years in garment and real estate sectors. Debt ratios Cash flow from operations increased Baht 112,231,653.65 in the company’s financial statement and 123,847,948.06 the consolidated financial statement respectively, As a result, the ability to pay the interest and obligations in 2012 was better than 2011.

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ANNUAL REPORT 2012


Shareholders and Management Shareholders The first 10 major shareholders of Castle Peak Holdings Public Co., Ltd., as of April 12, 2012. No.of shares % of shareholding Mr.Boonchoo Pongchaloem Ms.Vanee Tempitayakom Thai N.V.D.R. Co., Ltd. Ms.Kanakorn Jirayucharoensook Ms.Srijan Saelee Success Real Estate Co., Ltd. Ms.Vinida Kulsomphob Mr.Udomsak Chotivichit Mr.Pusak Pongchaloem Ms.Wanlee Sungsiri

11,880,048 3,400,000 2,161,000 1,994,900 1,900,000 1,848,000 1,659,900 1,453,400 1,426,266 1,113,000

29.70 8.50 5.40 4.99 4.75 4.62 4.15 3.63 3.57 2.78

Mr.Boonchoo Pongchaloem and family hold the total 19,975,202 shares, to be 49.94% of total issued shares. MANAGEMENT Management Structure Corporate management consists of three committees, namely the Board of Directors, the Audit Committee, and the Executive Committee. The Board of Directors’ scope of authority and duties comprises: - Performance of its duties according to law, the objectives and regulations of the Company, and resolutions of shareholders’ meetings. - Compliance with the directives and rules of supervisory and controlling bodies. - Protection of the interests of shareholders. Every shareholder is to be treated equally in receiving accurate information and news about the Company. - Determining policies and operational plans, and supervising and controlling all managers to ensure their efficient implementation of the said policies and plans. - Approval of transactions to buy or sell an asset, to incur a debt, or undertake an obligation valued at 50 million baht or more. The Board of Directors, by name: 1. Mr.Boonchoo Pongchaloem Chairman 2. Ms.Aree Tempitayakom Vice-Chairman 3. Mr.Liu Chor Ting Director 4. Mr.Wu Man Fun Director CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

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Shareholders and Management (cont.) 5. Ms.Pailin Janyaniwat Director 6. Ms.Piyada Sooksai Independent Director 7. Mr.Songsak Wongsunkakorn Independent Director 8. Ms.Tipwan Kramsir Independent Director Authorized Directors: Mr.Boonchoo Pongchaloem, or Ms.Aree Tempitayakom or Mr. Liu Chor Ting, two of these three directors sign together and affix the Company’s seal. Secretary of the Company: Ms.Nophakoon Somboonviriya. The Audit Committee’s scope of authority and duties comprises: - Ensuring that the Company’s financial reports are accurate, complete, and credible. - Ensuring that the company implements and appropriate and efficient internal monitoring system. - Considering and proposing an independent auditor for the Company. - Ensuring the Company’s compliance with all relevant laws and regulations. - Ensuring that conflicts of interest do not occur. - Producing a management report from the Audit Committee, to be published in the Company’s annual report. - Performance of any other duties assigned to it by the Board of Directors. The Audit Committee, by name: 1. Ms.Piyada Sooksai Chairman of the Audit Committee 2. Mr.Songsak Wongsunkakorn Auditing Director 3. Ms.Tipwan Kramsir Auditing Director Ms.Tipwan Kramsir who is adequate expertise and experience to audit creditability of the financial reports. The Executive Committee’s scope of authority and duties comprises: - Acceptance of the policies and operational plans of the Board of Directors. - Ensuring that the Company’s operations are implemented efficiently in order to achieve corporate objectives. - Submitting reports, plans, and operational results to the Board of Directors. - Approval of transactions to buy or sell an asset, to incur a debt, or undertake an obligation valued at no more than 50 million baht. - Performance of any other duties assigned to it by the Board of Directors. The Executive Committee, by name: 1. Mr.Boonchoo Pongchaloem Chairman of the Executive Committee 2. Ms.Aree Tempitayakom Vice-Chairman of the Executive Committee 12

ANNUAL REPORT 2012


Shareholders and Management (cont.) 3. Mr.Liu Chor Ting Vice-Chairman of the Executive Committee 4. Mr.Wu Man Fan Director of the Production Division 5. Ms.Nophakoon Somboonviriya The Finance and Accounting Division 6. Ms.Pailin Janyaniwat Plant Manager 7. Ms.Porntip Sripitucksakul Internal Audit Manager 8. Ms.Natpaphat Chuthepthip Accounting Manager Principles in the selection of independent directors: Independent directors are proposed by the Board of Directors, and should be: (1) Knowledgeable, competent, and experienced. (2) Capable of devoting time to the Company, attending meetings of the Board of Directors or Audit Committee, performing the duties assigned to him/her, and offering advice. (3) Free of court-ordered liens, bankruptcy proceedings, or any real or apparent incapacity. (4) Not subject to government prosecution, sentencing, or any criminal proceedings related to fraud or malfeasance. (5) Clear of all attributes, as set down by the Securities Exchange Commission and the Stock Exchange of Thailand, that would disqualify him/her from being an independent director. Board of Directors Meeting In 2012, the Board of Directors met 21 times. The directors’ attendance was as follows: 1. Mr.Boonchoo Pongchaloem attended 9 meetings 2. Ms.Aree Tempitayakom attended 20 meetings 3. Mr.Liu Chor Ting attended 19 meetings 4. Mr.Wu Man Fun attended 21 meetings 5. Ms.Nophakoon Somboonviriya attended 4 meetings 6. Ms.Pailin Janyaniwat attended 21 meetings 7. Ms.Piyada Sooksai attended 21 meetings 8. Mr.Songsak Wongsunkakorn attended 21 meetings 9. Ms.Tipwan Kramsir attended 9 meetings Methods of Selecting Directors and Executives Method of Selecting Directors Directors are selected according to the Public Company Act, except for article 70. Corporate regulations provide for the appointment of directors in a meeting of shareholders. Each shareholder has as many votes as he/she has shares. One shareholder must use all his/her votes for one or more nominees, and may not divide his/her votes in any way.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

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Shareholders and Management (cont.) Method of Selecting Executives Executives are considered on the basis of their knowledge, capabilities, and experience, together with the suitability of these for the duties and responsibilities in question. Remuneration for Executives Monetary Remuneration (a) Remuneration received by Company directors in January to December 2012 Board of Directors’

Meeting Fees (in baht)

1. 2. 3. 4. 5. 6. 7. 8.

Mr.Boonchoo Pongchaloem Mr.Liu Chor Ting Mr.Wu Man Fun Ms.Aree Tempitayakom Ms.Pailin Janyaniwat Ms.Piyada Sooksai Mr.Songsak Wongsunkakorn Mr. Mr.Prasit Hataiwichien (resigned on May 7, 2012) 9. Ms.Tipwan Kramsir

Audit Committee’s

Meeting Fees (in baht)

Total (in baht)

120,000.00 120,000.00 10,000.00

40,000.00 20,000.00 -

160,000.00 140,000.00 10,000.00

50,000.00 300,000.00

5,000.00 65,000.00

55,000.00 365,000.00

Remuneration for directors of subsidiaries: None (b) Remuneration for executive directors and executives in 2012: - The 8 persons of the Garments Business Group received, as salaries and bonuses 12,368,773 baht. - The 9 persons of the Real Estate Development Business Group received, as salaries and bonuses 5,228,100 baht. (c) Other forms of remuneration: None

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ANNUAL REPORT 2012


Management Profile Mr.Boonchoo Pongchaloem Age: 77 - Authorized Director Education: Bachelor Degree - Mathematics Jinan University of China Position Chairman/Chairman of the Executive Committee Castle Peak Holdings Public Co., Ltd. Chairman/Chairman of the Executive Committee CPG Garment Co., Ltd. Chairman/Chairman of the Executive Committee Castle Peak Real Estate Co., Ltd. Director Castle Peak Pulp & Paper Co., Ltd. Executive Committee Aek Thana Property Co., Ltd. Executive Committee Sermkit Property Co., Ltd. Executive Committee Sun Property Co., Ltd. Director Thaneewatana Co., Ltd. Shareholdings: as of December 31, 2012 hold 11,880,048 shares 29.70% Change number of shares in year 2012 -NoMs.Aree Tempitayakom Age: 52 - Authorized Director Relation:Mr. Boonchoo’s daughter Education: Mini MBA – NIDA DAP - IOD Position: Vice Chairman Castle Peak Holdings Public Co., Ltd. Director / Executive Committee CPG Garment Co., Ltd. Director / Executive Committee Castle Peak Real Estate Co., Ltd. Chairman / Executive Committee Sermkit Property Co., Ltd. Chairman / Executive Committee Aek Thana Property Co., Ltd. Executive Committee Sun Property Co., Ltd. Director Castle Peak Pulp & Paper Co., Ltd. Shareholdings: as of December 31, 2012 hold 130,100 shares 0.33% Change number of shares in year 2012 -NoMr.Henry Liu Chor Ting Age: 55 - Authorized Director Education: Bachelor Degree - Social Science Chu Hoi College, DAP - IOD Position: Director / Vice Chairman Castle Peak Holdings Public Co., Ltd. Vice Chairman CPG Garment Co., Ltd. Shareholdings: as of December 31, 2012 - No Change number of shares in year 2012 -NoCASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

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Management Profile (cont.) Mr.Wu Man Fun Age: 60 Education: High School - Macau DAP - IOD Position: Director / Production Director Executive Committee Shareholdings: as of December 31, 2012 - No Change number of shares in year 2012 -No-

Castle Peak Holdings Public Co., Ltd. CPG Garment Co., Ltd.

Ms.Pailin Janyaniwat Age: 50 Education: High School , DAP - IOD Position: Director / Executive Committee Castle Peak Holdings Public Co., Ltd. Factory Manager CPG Garment Co., Ltd. Shareholdings: as of December 31, 2012 hold 66 shares 0.00% Change number of shares in year 2012 -NoMs.Piyada Sooksai Age: 57 Education: Master Degree - Business Administration Chulalongkorn University DCP - IOD Position: Independent Director/Chairman Audit Committee Castle Peak Holdings Public Co., Ltd. Consultant TMTG (Thailand) Co., Ltd. Shareholdings: as of December 31, 2012 - No Change number of shares in year 2012 -NoMr.Songsak Wongsunkakorn Age: 77 Education: Advance Diploma Hong Kong Position: Independent Director Management Committee Shareholdings: as of December 31, 2012 - No Change number of shares in year 2012 -No-

16

Castle Peak Holdings Public Co., Ltd. Srima Jewelry Co., Ltd.

ANNUAL REPORT 2012


Management Profile (cont.) Ms.Thipawan Kramsri Age: 33 Education: Bachelor’s Degree - Accountancy Southeast Asia University Position: Independent Director Castle Peak Holdings Public Co., Ltd. Consultant Wang Rimpaya Group Shareholdings: as of December 31, 2012 - No Change number of shares in year 2012 -NoMs.Nophakoon Somboonviriya Age: 59 Education: Master Degree - Business Administration Thammasat University DCP - IOD Position: Financial Director Castle Peak Holdings Public Co., Ltd. Director / Executive Committee Castle Peak Real Estate Co., Ltd. Executive Committee CPG Garment Co., Ltd. Director Thaneewatana Co., Ltd. Secretary of the Company Castle Peak Holdings Public Co., Ltd. Shareholdings: as of December 31, 2012 hold 1,600 shares 0.00% Change number of shares in year 2012 -NoMs.Porntip Sirpitucksakul Age: 52 Education: Master Degree – Accountancy Chulalongkorn University Position: Internal Audit Manager Castle Peak Holdings Public Co., Ltd. Shareholdings: as of December 31, 2012 hold 100 shares 0.00% Change number of shares in year 2012 -NoMs.Natpaphat Chuthepthip Age: 48 Education: Bachelor’s Degree - Accountancy Prince of Songkla University Position: Accounting Manager Castle Peak Holdings Public Co., Ltd. Accounting Manager C.P.G. Garment Co., Ltd. Shareholdings: as of December 31, 2012 - No Change number of shares in year 2012 -No-

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

17


Good Corporate Governance Good Corporate Governance The Board of Directors recognizes the importance of good corporate governance as a major factor in enhancing the efficiency of the organization. The company therefore conducts its business in line with the principle of good corporate governance, to generate trust in investors and stakeholders, which form a basis for sustainable growth. The Board of Directors adapts of the Stock Exchange of Thailand’s principles of good corporate governance for listed company in so far as they are sufficient, prudent, and suitable or fit to the business environment. Shareholder rights The company held its Annual Ordinary Shareholders’ Meeting on 27th April 2012. The Company prepares a notice to call the shareholders’ meeting complete with an agenda with each item complemented by an opinion of the Board of Directors. The notice and agenda are distributed together with the annual report and proxy form with relevant details, at least 7 days in advance of the meeting. The Company publicizes the notice to call shareholders’ meeting in Thai daily newspapers for three consecutive days prior to the meeting. 2012 Annual General Meeting was attended by 38 shareholders and proxies holding 28,512,798 shares or 71.28%. At the shareholder’s meeting, Board of Directors was present and acted as chairman. Other directors participating in the meeting included Managing Director, Members of Executive Committee, the Chairman of the Audit Committee as well as other Board members, who were present to jointly answer shareholders’ inquiries and provided further clarifications. The external auditor and management also attended the shareholders’ meeting. The board of directors reported the previous performance and satisfactorily answered all inquires from shareholders and also considered the shareholder’s suggestion and comment. Before commencing the meeting Corporate Secretary explained the method of vote. The resolution of the meeting was recorded in the minutes. Equitable Treatment of Shareholders Following the Board of Directors’ resolution to call each shareholder’s meeting, the Company announces the meeting schedule along with the agenda through the SET’s communication channels. The Company prepares a notice to call the shareholders’ meeting complete with an agenda with each item complemented by an opinion of the Board of Directors. The notice and agenda are distributed together with the annual report and proxy form with relevant details, at least 7 days in advance of the meeting. The Company provided the names and relevant personal records of directors to be retired by rotation and who are proposed to be re-appointed for another term in the annual report which is submitted to the shareholders prior to the meeting. The Company publicizes the notice to call shareholders’ meeting in Thai daily newspapers for three consecutive days prior to the meeting . In The Meeting, The Company facilitated shareholders who attend the meeting in person, or those are proxy holders. The Meeting proceeded in accordance with the scheduled agenda without adding further agenda items. Voting ballots were used at the meeting, and the results of the voting on each agenda item were announced at the meeting. The Board of Directors recognizes the importance of conflicts of interest, connected transactions, or related party transactions and has proceeded in accordance with the principle of good corporate governance In the event that company has to scrutinize matters where there exists or potentially exists conflicts of interest, connected transactions, or related party transactions, directors who are related persons must not participate in the scrutiny and approval of such transaction.

18

ANNUAL REPORT 2012


Good Corporate Governance (cont.) Rights of Stakeholders Much consideration is given to the interests of each of various groups of stakeholders in the Company. Stakeholder groups exist both inside and outside the Company. Internal stakeholders include staff and management, whereas external stakeholders include customers, suppliers, competitors, creditors, members of the public, communities, and others. The Company fully appreciates the value of the support of each of these groups as they all contribute to the Company’s competitiveness and corporate profits. As it is understood that the participation of stakeholders can have a positive effect on the Company on an on-going basis, considerable effort is made to safeguard the interests of each group. Shareholders: The Company aims to represent the best interests of shareholders by concentrating on long-term growth and value. The Company undertakes to provide decent and continuous returns to shareholders while being transparent and accurate in its disclosure of information. Customers: The Company shall strive to achieve high customer satisfaction and promote relations based on mutual interest by developing value-added products and service. The Company also put in every effort in both technology and R&D to differentiate our product and service from our competitors, providing all customers’ need and punctuality. Employees: The employees are the main important core of the company in propelling the future of the company. The Company provides equitable employment conditions and maintains a safe and conducive working environment. The Ministry of Labor, The department of Labor Protection and Welfare has recognized the company’s effort and has awarded the highest TLS 8001-2003 Labor and Welfare certificate on the 20th December 2006. Competitors: The Company advocates and supports free trade and conducts its business within the rules of competition on the basis of fairness, ethics, and conformity with legal and regulatory requirements. Communities and Environment: The Company places a high priority on its social responsibilities especially to the environment and local communities. It meets these responsibilities by thoroughly implementing effective environmental protection and safety systems helping to reduce air pollution around the communities. Disclosure and Transparency As endorsed by the Board of Directors, disclosing information adequately to stakeholders and maintaining transparency and integrity in the Company’s operation are integral to the Company’s corporate governance policy. In compliance with the SET’s regulations, the Company discloses its corporate governance report in the annual report and the annual statement (Form 56-1). The Board of Directors directed the Management to disclose all information completely, accurately, reliably, consistently and in timely manner, in strictly conformity to the information disclosure regulation of the SEC and the SET, and the Management has complied. To ensure equitable treatment to all stakeholders, in addition to disclosing information as specified in relevant regulations through the SET’s channel, the Company also discloses such information, Audit report, The Board’s Responsibility for Financial Reports and Reports of The Audit Committee, including its annual reports, also in the future on the company’s’ website which is under construction. The Board of Directors responsibility of correctness and completeness of financial report by issuing The Report of The Board of Directors’ responsibilities for financial statements and Audit Committee’s Report have disclosed in annual report. In addition, the Company has disclosed the duties of the Board of Directors and committees, including the number of meetings attended by each director, and have also disclosed the remuneration policy, type and details with respect to directors and management. The Company has fixed a policy for remuneration of directors that entails maximum transparency. The remuneration of directors is set at a level that is appropriate within the CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

19


Good Corporate Governance (cont.) industry. In 2012, the shareholders approved remuneration for the Board of Directors and the Audit Committee in the shareholders’ meeting. Approval of remuneration to audit committees were a monthly allowance 10,000 per person and another the Chairman of the Audit Committee 10,000 Baht 5,000 Baht for each meeting The total remuneration for high level management and executives of the company in the form of salary and agreed benefits are listed in the annual report and the annual statement (Form 56-1). The Company’s Finance and Accounting Director is in charge of investor relations activities and is required to communicate directly with institution and individual investors, analysts and concerned government agencies. Investors may request any information from the Company at E-Mail Address: nopkoon@castlepeak.co.th Responsibilities of the Board Board structure In 2012, the Board of Directors comprises 8 directors. 5 Management directors, 3 independent directors ( Among them, all are appointed as Audit Committee Members). The Board of Directors appoints members of the Audit Committee whose qualifications comply with the SET rules which defines that the Audit Committee shall consist of at least 3 independent directors, and at least one of them must have knowledge and experience in accounting and finance. The Company’s directors may hold the position for 3 years accordance to company regulations and may be voted back when the term expires. The Board of Directors has set up committees to strengthen good corporate governance and support its administration and any legal issues involved within the company. Subcommittees The Board of Directors as established an internal audit committee chaired by Ms. Piyada Sooksai. Other audit committee members are Ms. Tipwan Kramsri and Mr. Songsak Wongsunkakorn. The Audit Committee holds regular meetings. In 2012, it held four ordinary meetings. The external auditor was invited to review the quarterly and annual financial statements. Roles and Responsibilities of the Board 3.1 Endorsing the Company’s vision, mission and strategy including setting targets, business plans and the corporate budget. The Board of Directors conducts itself in accordance with its responsibilities to shareholders regarding the Company’s business operation, including setting targets to secure optimum benefit for shareholder and other stakeholders within legal framework and business ethics. 3.2 The Board of Directors recognizes the importance of good corporate governance as implanting the good governance policy and regulation for practice for practice. 3.3 The Company introduced a Code of Ethics for the Management and employees, providing guidance as to how to perform their duties in line with the corporate mission, and with honesty and fairness to the Company, all stakeholders, the public and local communities. 3.4 The Board of Directors carefully scrutinizes any issues that might result in a conflict of interest. Such issues are acknowledged by the Board of Directors in accordance with the SET regulations stipulated for a transaction based on an Arm’s Length Basis 3.5 The Board of Director assigns the Committee and the Management to arrange and maintain internal control systems and to ensure their effectiveness. From the management down to the operational level, the Company’s control system explicitly defines, in writing, the authority and duties of all employees. The Company has clearly defined in writing the Management’s roles and responsibilities at each level 20

ANNUAL REPORT 2012


Good Corporate Governance (cont.) The Company has also established Internal Audit Department to perform audit-related duties, with the aim of ensuring that the Company’s main business and significant financial activities are operated efficiently and in accordance with established guidelines. The department must also ensure that activities are conducted in full conformity with compliance controls and the law and report quarterly to the Audit Committee for evaluation. 4. Board meeting In 2012, total 21 meetings were held which 4 meetings were discussion and consideration annual and quarterly operating result and 17 meetings were special agenda. In every case the chairman sent the letters to all directors 7 days in advance, to inform the date, time, venue and the agenda of the meeting. The meetings complied with the company’s regulation. The resolutions were recorded and the minutes were accepted by the board meetings. 5. Self-assessment The company assessed the annual general meeting and the board of directors meeting in accordance with SEC guideline. 6. Remuneration The annual general meeting 2012 approved the remuneration to audit committees were a monthly allowance 10,000 per person and another the Chairman of the Audit Committee 10,000 Baht 5,000 Baht for each meeting the management executive earned the salary and benefits depend on the ability that could be comparable to the same industry. 7. Director and executive training The company held the seminars and trainings in various courses to educate the directors, executives and supervisors in order to increase the knowledge and skill. Held the program to orient the directors about the company profile, policy and regulation also rules and practices to comply with the SEC. Monitoring the use of internal information The Board of Directors, audit committees and management team, together with directors of the company and its subsidiary companies, must acknowledge and abide by the right of equal access principle to be informed about the company’s news and information. They must strictly adhere to the regulations of the Stock Exchange of Thailand and the Office of the Securities and Exchange Commission and must not disclose the company’s internal information for personal interest or gain, whether directly or indirectly. Penalties include both those prescribed by the Office of the Securities and Exchange Commission and those stipulated by The Company’s Board of Directors. Internal Control We implement the internal control system in order to achieve the objective of management control and operating control. Arising out of the meeting between the Auditor and Audit Committee were came the resolution that the company internal control systems and the practice were found to be appropriated and sufficient for its prevailing and efficient business operation. Dividend Policy Dividend will be paid 30% of net profit after deduction of all kind of reserved as specified by law and the company (with additional conditions)

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

21


Related transaction Castle Peak Pulp and Paper Industries Co., Ltd., (CPPP), registered capital THB 100,000 to be held by Success Real Estate Co., Ltd 59% and Castle Peak Holdings Public Co., Ltd 41% of the shares. CPPP is the wholly own of investment in Yueyang Fengli Pulp and Paper Industry Co., Ltd., that manufacture pulp and paper in Republic of China. Success Real Estate Co., Ltd and Castle Peak Holdings Public Co., Ltd are the financial supporters to Castle Peak Pulp and paper Industries Co., Ltd and also Yueyang Fengli Pulp and Paper Industry Co., Ltd in the ratio of investment, interest charge would be the same rate as the other subsidiary.

Audit Fee Ms.Wimolsiri Jongudomsombut of Karin Audit Company Limited. Auditing was appointed to be the companies’ auditor. The Total fee for quarterly review and auditing in year 2012 was Baht 1,600,000 details are as follows: Company

Castle Peak Holdings Public Co., Ltd. Castle Peak Holdings Public Co., Ltd. (conso) CPG Garment Co., Ltd. Castle Peak International Co., Ltd. Castle Peak Real Estate Co., Ltd. Aek Thana Property Co., Ltd. Sun Property Co., Ltd. Sermkit Property Co., Ltd. Total Audit Fee

Q1,2,3 quarterly review fee

240,000 210,000 180,000 30,000 45,000 45,000 30,000 30,000

Audit fee

380,000 70,000 220,000 10,000 45,000 45,000 10,000 10,000

Total

620,000 280,000 400,000 40,000 90,000 90,000 40,000 40,000 1,600,000

Non- Audit Fee - Other Expenses in audit process limit THB 15,000 for quarterly review and THB 40,000 for year ended auditing, this expenses are all inclusive for the parent company and subsidiaries. In year 2011, these non-audit fee was THB 85,000.-

22

ANNUAL REPORT 2012


INDEPENDENT AUDITOR’S REPORT To the Shareholders of Castle Peak Holdings Public Company Limited I have audited the accompanying consolidated and separate financial statements of Castle Peak Holdings Public Company Limited and its subsidiaries, and of Castle Peak Holdings Public Company Limited, respectively, which comprise the consolidated and separate statements of financial position as at December 31, 2012, the consolidated and separate statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Consolidated and Separate Financial Statements. Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate 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 consolidated and separate 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 consolidated and separate 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. Basis of Qualified Opinion As discussed in Note 11 to the financial statements, the Company recorded investment in an associate by using the equity method. The share of comprehensive income (loss) of said associate in the consolidated statement of comprehensive income amounted to Baht (75.83) million for the year ended December 31, 2012, was computed from the financial statements which have been audited by other auditors. Opinion In my opinion, except for the effect of adjustments, if any, as might have been affected to the consolidated financial statements for year 2012 from the recording of the investment in an associate by equity method based on the financial statements which have been audited by other auditors as described in the basis of qualified opinion paragraph, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial position as at December 31, 2012 and the financial performance and cash flows for the year then ended of Castle Peak Holdings Public Company Limited and its subsidiaries, and of Castle Peak Holdings Public Company Limited, respectively, in accordance with Thai Financial Reporting Standards.

(Ms. Wimolsri Jongudomsombut) Certified Public Accountant Registration No. 3899 Karin Audit Company Limited Bangkok February 27, 2013 CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

23


STATEMENTS OF FINANCIAL POSITION CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Consolidated financial statements Note

2012

2011

Unit : Baht Separate financial statements 2012

2011

Assets Currrent assets Cash and cash equivalents 6 Trade and other accounts receivable 7 Inventories - Garment business 8 - Real estate business 9, 18 Short-term loans and advances to related parties 5.3 Assets held for sale 14 Other current assets 10 Total current assets Non-currrent assets Long-term loans and interest receivable to related party Investments in subsidiaries and associates Other long-term investments Property, plant and equipment Investment properties Deposits with commitment Other non - current assets Total non - current assets Total assets

23,511,528.54 143,671,906.86

7,556,513.63 157,887,064.11

13,277,274.97 90,824,514.28

1,591,801.78 119,646,141.80

195,572,735.33 189,026,940.91

238,628,081.21 195,562,623.08

127,164,400.85 64,428,332.65

164,747,171.06 61,786,588.44

141,427,586.00 21,436,132.72 47,020,520.13 761,667,350.49

107,211,050.00 26,312,130.69 733,157,462.72

172,347,586.00 21,436,132.72 41,865,479.10 531,343,720.57

118,097,192.29 26,070,345.79 491,939,241.16

5.3

67,728,039.29

-

67,728,039.29

-

11 12 13, 16 14, 16 15 5.3

10,294,652.86 1,365,315.00 271,209,569.01 120,000,078.32 324,956.16 12,682,394.07 483,605,004.71

86,124,463.99 1,078,660.00 272,377,318.29 143,217,902.12 322,550.19 32,470,979.12 535,591,873.71

264,007,380.00 1,161,750.00 157,849,614.22 113,954,458.32 5,486,636.95 610,187,878.78

264,007,380.00 919,450.00 160,149,355.40 114,672,282.12 25,761,373.12 565,509,840.64

1,245,272,355.20 1,268,749,336.43 1,141,531,599.35 1,057,449,081.80

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

24

ANNUAL REPORT 2012


STATEMENTS OF FINANCIAL POSITION (cont.) CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Consolidated financial statements Note

2012

2011

Unit : Baht Separate financial statements 2012

2011

Liabilities and equity Current liabilities Overdrafts and short - term loans 16 from financial institutions Trade and other accounts payable 5.3 Short-term loans from related parties 5.3 Current portion of long-term loans form financial institutions 18 Advances received under contract to buy and to sell Income tax payable Other current liabilities 17 Total current liabilities Non-current liabilities Long-term loans from financial institutions 18 Employee benefit obligations 19 Total non - current liabilities Total liabilities

240,113,904.19

233,391,660.16

186,572,189.37

151,385,226.21

61,820,110.82 -

44,279,920.43 -

42,744,719.74 65,647,000.00

40,299,263.38 71,497,000.00

4,668,000.00 3,201,000.00 55,394.80 39,107,800.62 348,966,210.43

3,623,500.00 65,203.86 39,424,768.52 320,785,052.97

966,500.00 26,094,301.18 322,024,710.29

1,450,000.00 23,198,076.89 287,829,566.48

508,449.69 21,082,168.00 21,590,617.69 370,556,828.12

15,175,600.00 10,830,843.00 26,006,443.00 346,791,495.97

508,449.69 9,724,931.00 10,233,380.69 332,258,090.98

3,981,066.00 3,981,066.00 291,810,632.48

400,000,000.00

400,000,000.00

400,000,000.00

400,000,000.00 164,000,000.00

400,000,000.00 164,000,000.00

400,000,000.00 164,000,000.00

28,357,863.47 89,744,717.45 239,679,458.57 921,782,039.49 175,800.97 921,957,840.46

30,539,616.42 109,951,391.87 104,782,500.08 809,273,508.37 809,273,508.37

28,357,863.47 61,408,049.57 111,872,536.28 765,638,449.32 765,638,449.32

Equity Share capital Authorized share capital 40,000,000 common shares, Baht 10 par value 400,000,000.00 Issued and paid - up share capital 40,000,000 common shares, Baht 10 par value 400,000,000.00 Premium on ordinary shares 164,000,000.00 Retained earnings Appropriated - legal reserve 30,539,616.42 Unappropriated 53,015,132.98 Other components of equity 226,991,310.28 Equity attributable to owners of the Company 874,546,059.68 Non-controlling interests 169,467.40 Total equity 874,715,527.08

Total liabilities and equity 1,245,272,355.20 1,268,749,336.43 1,141,531,599.35 1,057,449,081.80 The accompanying notes are an integral part of these financial statements.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

25


STATEMENTS OF COMPREHENSIVE INCOME CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Consolidated financial statements Note Revenue from sales 5.2 Cost of sales 5.2 Gross profit Interest income 5.2 Reversal of loss on assets impairment Gain on exchange rate Other income 5.2 Profit before expenses Selling expenses Administrative expenses Total expenses Profit (loss) before financial costs and income tax Financial costs 5.2 Equity gain (loss) from investment in associates Profit (loss) before income tax Income tax 21 Profit (loss) for the year Other comprehensive income Revaluation imcrement in land and buildings 13 Currency translation change in indirect associate Other comprehensive income for the year Total comprehensive income for the year Profit (loss) attributable to : Owners of the Company Non-controlling interests Profit (loss) for the year Total comprehensive income attributable to: Owners of the Company Non-controlling interests Total comprehensive income for the year Basic earnings (loss) per share Weighted average number of oridinary shares (shares)

Unit : Baht Separate financial statements

2012

2011

2012

2011

1,209,260,872.65 1,055,047,147.07 154,213,725.58 11,252,789.64 12,214,542.01 12,578,250.84 190,259,308.07 46,674,380.67 97,988,266.43 144,662,647.10 45,596,660.97 (16,894,715.15) (73,580,250.18) (44,878,304.36) (114,448.07) (44,992,752.43)

907,170,345.22 770,683,295.97 136,487,049.25 7,137,587.03 18,209,520.80 9,179,538.16 171,013,695.24 48,682,294.80 103,884,772.28 152,567,067.08 18,446,628.16 (9,611,991.07) (31,154,804.94) (22,320,167.85) (119,123.98) (22,439,291.83)

730,425,459.05 630,565,553.88 99,859,905.17 14,105,157.60 7,366,311.13 13,695,536.44 135,026,910.34 26,793,507.73 49,964,823.85 76,758,331.58 58,268,578.76 (14,633,519.71) 43,635,059.05 43,635,059.05

620,927,861.23 541,744,880.72 79,182,980.51 8,594,456.34 18,209,520.80 110,885.05 7,293,757.20 113,391,599.90 27,895,740.56 44,392,494.52 72,288,235.08 41,103,364.82 (9,963,299.23) 31,140,065.59 31,140,065.59

(2,249,560.95) (2,249,560.95) (47,242,313.38)

37,078,761.79 12,274,745.30 49,353,507.09 26,914,215.26

43,635,059.05

18,528,236.39 18,528,236.39 49,668,301.98

(44,986,418.86) (6,333.57) (44,992,752.43)

(22,437,061.73) (2,230.10) (22,439,291.83)

43,635,059.05 43,635,059.05

31,140,065.59 31,140,065.59

(47,235,979.81) (6,333.57) (47,242,313.38) (1.12) 40,000,000

26,890,474.62 23,740.64 26,914,215.26 (0.56) 40,000,000

43,635,059.05 43,635,059.05 1.09 40,000,000

49,668,301.98 49,668,301.98 0.78 40,000,000

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

26

ANNUAL REPORT 2012


CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

27

(44,986,418.86) - (2,249,560.95) (44,986,418.86) - (2,249,560.95) (2,181,752.95) 10,438,587.34 (10,438,587.34) 53,015,132.98 194,028,804.88 32,962,505.40

- 2,181,752.95 400,000,000.00 164,000,000.00 30,539,616.42

(2,249,560.95) (2,249,560.95) (10,438,587.34) 226,991,310.28

(44,986,418.86) (2,249,560.95) (47,235,979.81) 874,546,059.68

- (22,437,061.73) 37,052,791.05 12,274,745.30 49,327,536.35 49,327,536.35 37,052,791.05 12,274,745.30 49,327,536.35 26,890,474.62 (6,354,186.32) - (6,354,186.32) 204,467,392.22 35,212,066.35 239,679,458.57 921,782,039.49

(22,437,061.73) (22,437,061.73) (1,557,003.28) 6,354,186.32 89,744,717.45

- 1,557,003.28 400,000,000.00 164,000,000.00 28,357,863.47

400,000,000.00 164,000,000.00 26,800,860.19 107,384,596.14 173,768,787.49 22,937,321.05 196,706,108.54 894,891,564.87

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

Balance at January 1, 2011 Comprehensive income for the year : Profit (loss) for the year Other comprehensive income Total comprehensive income for the year Transfer to legal reserve Transfer to retained earnings Balance at December 31, 2011 Comprehensive income for the year : Profit (loss) for the year Other comprehensive income Total comprehensive income for the year Transfer to legal reserve Transfer to retained earnings Balance at December 31, 2012

Other components of equity

Consolidated financial statements

Total equity

Unit : Baht

(6,333.57) (6,333.57) 169,467.40

(2,230.10) 25,970.74 23,740.64 175,800.97

(44,992,752.43) (2,249,560.95) (47,242,313.38) 874,715,527.08

(22,439,291.83) 49,353,507.09 26,914,215.26 921,957,840.46

152,060.33 895,043,625.20

Currency Revaluation translation Total Equity Issued Premium on Retained earings increment in changes in other attributable to Nonand paid-up ordinary land and indirect components owners of controlling share capital shares Legal reserve Unappropriated building associate of equity the Company interests

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

STATEMENTS OF CHANGES IN EQUITY


28

ANNUAL REPORT 2012

26,800,860.19 1,557,003.28 28,357,863.47 2,181,752.95 30,539,616.42

164,000,000.00 164,000,000.00 164,000,000.00

400,000,000.00 400,000,000.00 400,000,000.00

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

Balance as of January 1, 2011 Comprehensive income for the year : Profit (loss) for the year Other comprehensive income Total comprehensive income for the year Transfer to legal reserve Transfer to retained earnings Balance as of December 31, 2011 Comprehensive income for the year : Profit (loss) for the year Other comprehensive income Total comprehensive income for the year Transfer to legal reserve Transfer to retained earnings Balance as of December 31, 2012

Legal reserve

Premium on ordinary shares

Other components of equity

97,787,828.57 18,528,236.39 18,528,236.39 (4,443,528.68) 111,872,536.28 (7,090,036.20) 104,782,500.08

27,381,458.58 31,140,065.59 31,140,065.59 (1,557,003.28) 4,443,528.68 61,408,049.57 43,635,059.05 43,635,059.05 (2,181,752.95) 7,090,036.20 109,951,391.87

(7,090,036.20) 104,782,500.08

18,528,236.39 18,528,236.39 (4,443,528.68) 111,872,536.28

97,787,828.57

Revaluation Total increment in other components of equity Unappropriated land and building

Retained earnings

Separate financial statements Issued and paid - up share capital

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011

STATEMENTS OF CHANGES IN EQUITY (cont.)

43,635,059.05 43,635,059.05 809,273,508.37

31,140,065.59 18,528,236.39 49,668,301.98 765,638,449.32

715,970,147.34

Total

Unit : Baht


STATEMENTS OF CASH FLOWS CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Consolidated financial statements 2012

2011

CASH FLOWS FROM OPERATING ACTIVITIES Profit (loss) for the year (44,992,752.43) (22,439,291.83) Adjustments to reconcile profit (loss) to cash provided by (used in) operating activities : Depreciation and amortization 21,346,812.67 17,786,843.59 Unrealized loss (gain) on exchange rate (11,091,109.44) 9,952,310.11 Equity loss from investment in associates 73,580,250.18 31,154,804.94 Provision for financial support to a subsidiary Reversal of impairment loss on land and investment properties - (18,209,520.80) Allowance for (reversal of) impairment loss on other long-term investments (286,655.00) 308,605.00 Reversal of allowance for declining value of inventories - garment business (418,000.31) (79,894.62) Reversal of allowance for doubtful account Loss (gain) on disposal of equipment (93,458.18) 7,079.09 Loss on assets writen-off 831,630.21 Interest expense 13,825,272.96 7,236,185.20 Interest income (11,252,789.64) (7,137,587.03) Dividend income (98,000.00) (258,000.00) Employee benefit obligations 10,814,325.00 10,830,843.00 Income tax 114,448.07 119,123.98 Profit (loss) from operating activities before changes in operating assets and liabilities 52,279,974.09 29,271,500.63 (Increase) decrease in operating assets: Trade and other accounts receivable 10,504,306.11 (35,111,255.61) Inventories - Garment business 43,473,346.19 (54,712,582.03) - Real estate business 7,142,889.06 (90,472,485.54) 1,314,108.77 Other current assets (15,120,488.14) (14,300.83) Other non - current assets (167,381.43) Increase (decrease) in operating liabilities: (1,361,108.92) 18,655,013.32 Trade accounts payable Advances received under contract to buy and to sell 3,437,172.00 (422,500.00) Other current liabilities 2,297,557.11 7,826,944.42 Employee benefit obligations paid (563,000.00) Income tax received 4,955,971.63 2,445,834.48 Income tax paid (1,050,334.95) (2,206,990.04) Net cash provided by (used in) operating activities 123,847,948.06 (141,445,757.74) The accompanying notes are an integral part of these financial statements.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

Unit : Baht Separate financial statements 2012

2011

43,635,059.05

31,140,065.59

14,816,802.36 (7,209,540.98) -

13,642,322.88 5,997,090.39 1,221,912.04

-

(18,209,520.80)

(242,300.00)

254,400.00

(3,384,355.17) (93,458.18) 81.00 13,518,345.65 (14,105,157.60) (85,000.00) 5,833,865.00 -

38,921.25 8,935,094.23 (8,594,456.34) (210,000.00) 3,981,066.00 -

52,684,341.13

38,196,895.24

25,937,133.19

(24,527,685.31)

37,582,770.21 (2,641,744.21) (13,459,123.15) (7,129.93)

(23,883,503.05) (52,026,347.44) (969,991.13) (25,522.33)

3,531,336.31 (483,500.00) 8,300,581.74 (90,000.00) 2,107,687.59 (1,230,699.23) 112,231,653.65

5,457,617.24 1,444,672.00 1,770,516.37 3,425,819.02 (225,110.68) (51,362,640.07)

29


STATEMENTS OF CASH FLOWS (cont.) CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011 Consolidated financial statements 2012 CASH FLOWS FROM INVESTING ACTIVITIES Interest received 1,924,803.79 Proceeds from dividend income 98,000.00 Advance paid for share increment in an associate Proceeds from short-term loans and advances 21,700,487.71 to ralated parties Short-term loans and advances to related parties (101,790,487.71) Cash paid for purchases of property, plants and equiment (17,891,943.83) 93,458.18 Proceeds from disposal of property, plants and equiment (205,636.00) Cash paid for purchases of investment properties (344,000.00) Cash paid for purchases of intangible assets (2,405.97) Decrease in deposits with commitment Net cash provided by (used in) investing activities (96,417,723.83) CASH FLOWS FROM FINANCING ACTIVITIES Cash paid for interest expense Increase (decrease) in overdrafts and (14,381,313.50) short - term loans from 12,905,254.49 financial institutions Repayment of loans and advances from related parties Proceeds from loans and advances from related parties 18,672,400.00 Proceeds from long - term loans (28,671,550.31) Repayment of long - term loans Net cash provided by (used in) financing activities (11,475,209.32) Net increase (decrease) in cash and cash 15,955,014.91 equivalents Cash and cash equivalents at the beginning 7,556,513.63 of the year 23,511,528.54 Cash and cash equivalents at the end of the year

2011

Unit : Baht Separate financial statements 2012

2011

8,394,093.61 85,000.00 -

2,290,292.90 210,000.00 (20,000,000.00)

4,770,000.00 85,745,931.04 (20,490,000.00) (182,485,433.58) (4,469,505.24) (10,246,949.00) 88,844.40 93,458.18 - (22,705,636.00) (1,000.00) (2,339.44) (37,946,957.05) (121,120,535.75)

34,470,000.00 (34,250,918.33) (1,502,850.77) 53,844.40 (18,729,631.80)

1,898,043.23 258,000.00 (20,000,000.00)

(6,055,808.33) 154,349,194.81

(13,150,329.37) 39,066,234.97

(8,116,282.83) 104,104,759.18

-

(50,572,639.12)

(40,621,468.80)

15,175,600.00 163,468,986.48

44,722,639.12 530,000.00 (21,550.31) 20,574,355.29

3,103,635.69 58,470,643.24

(15,923,728.31)

11,685,473.19

(11,621,628.63)

23,480,241.94 7,556,513.63

1,591,801.78 13,277,274.97

13,213,430.41 1,591,801.78

Supplemental disclosures of cash flow information: Non-cash transactions for the year 2012 - The Company transferred advance for common share incremental to short-term loan to related party of Baht 20.00 million in consolidated and separate financial statements. - The Company transferred investment properties to assets held for sale of Baht 21.44 million in consolidated and separate financial statements. - Two subsidiaries capitalized interest expense as a part of inventories- real estate bussiness totaling Baht 0.61 million in consolidated financial statements. Non-cash transactions for the year 2011 - The Company and a subsidiary have revalued land and buildings. This resulted net increase in value of land and buildings of Baht 37.08 million in consolidated financial statements and of Baht 18.53 million in separate financial statements. - A subsidiary capitalized interest paid to a financial institution as a part of real estate under develoment project of Baht 0.29 million in consolidated financial statements.

30

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES DECEMBER 31, 2012 AND 2011

1. General information Castle Peak Holdings Public Company Limited (“the Company”) was registered on April 1, 1994, with registration number 0107537001056. The registered office is located at 899 Petchkasam Road, Bangkae Sub-district, Bangkae District, Bangkok. The principal business activities of the Company and subsidiaries (“the Group”) are garment manufacturing to export and property development.

2. Basis for preparation of the consolidated financial statements The consolidated financial statements comprise the financial statements of the Company and subsidiaries (“the Group”). Subsidiaries, whose financial and operating policies are substantially direct or indirect controlled by the Company as follows: Country of Percentage of holding incorporation 2012 Subsidiaries Nature of busines 2011 Direct : C.P.G. Garment Co., Ltd. Castle Peak International Co., Ltd. Castle Peak Real Estate Co., Ltd. Indirect : Sun Property Co., Ltd. Sermkit Property Co., Ltd. Aek Thana Property Co., Ltd.

Export garment Trading and real estate Real estate

Thailand Thailand Thailand

99.86 99.99

99.86 99.99 99.99

Real estate Real estate Real estate

Thailand Thailand Thailand

99.98 99.98 99.98

99.98 99.98 99.98

Investment in other companies in which the Company significant influence is shown as “Investments in associates” under equity method in the consolidated financial statements, and record under cost method for the separate financial statements.

3. Basis of preparation of the financial statements 3.1 Statement of compliance The financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (FAP), applicable rules and regulations of the Thai Securities and Exchange Commission. As required by Thai law and regulatory requirements, the financial statements have been prepared in the Thai language. They have been translated into English for the convenience of the reader. The following new accounting standards, amendments to accounting standards, new financial reporting standard and new interpretation are mandatory, but the Company has not early adopted them.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

31


NOTES TO FINANCIAL STATEMENTS (cont.) TFRS TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) TFRS 8 TSIC 10 TSIC 21 TSIC 25 TFRIC 4 TFRIC 12 TFRIC 13 TSIC 29

Topic

Effective date

Income Taxes Accounting for Government Grants and Disclosures of Government Assistance The Effects of Changes in Foreign Exchange Rates Operating Segments Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders Determining whether an Arrangement contains a Lease Service Concession Arrangements Customer Loyalty Programmes Service Concession Arrangements: Disclosure

January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2013 January 1, 2014 January 1, 2014 January 1, 2014 January 1, 2014

The Company’s management has determined that the new accounting standards, amendments to accounting standards, new financial reporting standard and new interpretation will not significantly impact the financial information being presented, and is presently considering the potential impact of adopting and initially applying TAS 12 and TAS 21 on the financial statements. 3.2 Basis of measurement The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policies. 3.3 Presentation currency The financial statements are prepared and presented in Thai Baht. 3.4 Use of estimates and judgements The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities that are not readily apparent from other sources. Accordingly, actual results may differ from estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements is included in the following notes: Note 14 Disclosure of fair value of investment properties Note 19 Measurement of defined benefit obligations

32

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) 4. Significant accounting policies 4.1 Income 4.1.1 Revenues from the sales of goods are recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer. 4.1.2 Revenues from the sales of real estate development projects are recognized when the construction works are completed and the ownerships have been transferred to buyers. 4.1.3 Revenue from services is recognized when the services have been rendered. 4.1.4 Interest income is recognised on an accrual basis based on the effective interest rate. 4.1.5 Rental income is recognised as revenue over the period of the lease term. 4.2 Expenses 4.2.1 Expenses are recognized on an accrual basis. 4.2.2 Payments made under operating leases are recognised on a straight-line basis over the term of the lease 4.2.3 Finance costs comprise interest expense and unwinding of the discount on provisions and contingent consideration . Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. 4.3 Income tax Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years. 4.4 Cash and cash equivalents Cash and cash equivalents comprise cash on hand, saving deposits, call and highly liquid short-term investments. Deposits restricted in use are shown as other non-current assets. 4.5 Trade and other accounts receivable Trade and other accounts receivable are carried at anticipated realizable value after allowance for doubtful receivables. An allowance is estimated on the basis of management’s assessment of long overdue debts which may not be collectible. Bad debts are written off during the year in which they are identified. 4.6 Inventories Garment business The Group values its inventories at the lower of cost or net realizable value. Inventories are valued as follows: - Finished goods and work in process at specific batch costing - Raw materials and supplies at moving average. Real estate business Real estate development projects are presented at lower of cost or net realizable value. Cost comprises expenditure that is directly attributable to the acquisition of land, land improvement, construction cost, utilities, project management cost, borrowing costs and other direct relevance costs to the project. 4.7 Investments in subsidiaries and associated companies Investments in subsidiary companies and associated companies are recorded at cost method in the separate financial statements and investments in associated companies are recorded at equity method in the consolidated financial statements. CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

33


NOTES TO FINANCIAL STATEMENTS (cont.) 4.8 Long-term investment Investments in securities available for sales are stated at fair value. The diminution of carrying value is represented as unrealized gain or loss in equity. The Group will consider the impairment of investment whether there is any indication that investment may be impaired. The impairment loss will be recognized as expenses in profit or loss. 4.9 Property, plant and equipment Equipment are presented at cost less accumulated depreciation and impairment losses. Land and buildings are stated at their revalued amounts. The revalued amount is the fair value determined on the basis of the property’s existing use at the date of revaluation less any subsequent accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings. Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each component of an item as follows : Land improvement 20, 40 years Buildings and revaluation surplus 20 years Machinery and equipment 5, 10 years Other constructions 20 years Furniture, fixture and office equipment 5, 10 years Vehicles 5, 10 years Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. 4.10 Investment properties Investment properties are properties which are held to earn rental income, for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, and other costs directly attributable to bringing the investment property to a working condition for its intended use and capitalised borrowing costs.

34

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each component of an item as follows: Leasehold land Over the leasehold period (30 years) Building and other constructions 20 years Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. 4.11 Impairment of assets The carrying amounts of the Group’s assets are reviewed at each report date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimate. Impairment with cost, if assets exceed its recoverable amount, the Group will recognize an impairment loss in profit or loss. Calculation of recoverable amount The recoverable amount is the greater of the asset’s net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversal of impairment An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. All reversals of impairment losses are recognized in profit or loss. 4.12 Trade and other payables Trade and other payables are stated at cost. 4.13 Employee benefit obligations Post-employment benefit plan other than a defined contribution plan. The Company’s obligation in respect of post employment benefits under defined benefit plans recognized in the financial statements based on calculations by the independent actuary using the projected unit credit method estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The Company recognises all actuarial gains and losses arising from defined benefit plans in other comprehensive income and all expenses related to defined benefit plans in profit or loss. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. 4.14 Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

35


NOTES TO FINANCIAL STATEMENTS (cont.) pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. 4.15 Foreign currencies Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions. The revenues and expenses of foreign entities are translated to Thai Baht at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on translation are recognised in other comprehensive income and presented in the foreign currency translation reserve in equity until disposal of the investment. 4.16 Financial instrument Financial assets were shown in statements of financial position composed of cash and cash equivalents, loans , investments, trade accounts receivable. Financial liabilities were shown in statements of financial position composed of bank overdrafts, trade accounts payable and borrowings. The accounting policy of each item would be disclosed in separated items. The Group made a foreign exchange forward contract in order to prevent any risks from unstable of exchange rate. A forward contract will determine a fixed exchange rate in the future of assets and liabilities which will be received or paid. Outstanding forward foreign exchange contracts are marked to market by comparing contract rate to forward market rates with similar maturities. At each reporting date, the unrealized gain or losses on outstanding forward foreign exchange contracts are reflected in profit or loss. 4.17 Basic earnings (loss) per share Basic earnings (loss) per share are calculated by dividing profit (loss) for the year attributable to equity holders of the Company by weighted average number of ordinary shares outstanding during the year. The Company does not have any other equivalent ordinary share for diluted earnings per share calculation.

5. Related Party transactions 5.1 The related parties and relationship Parties C.P.G. Garment Co., Ltd. Castle Peak International Co., Ltd. Castle Peak Real Estate Co., Ltd. Aek Thana Property Co., Ltd. Castle Peak Pulp & Paper Industries Co., Ltd. Yueyang Fengli Pulp & Paper Industry Co., Ltd. Ms. Aree Tempitayakom 36

Relationship Direct owned and mutual management Direct owned and mutual management Direct owned and mutual management Indirect owned and mutual management Associate by direct owned Indirect associate throughout Castle Peak Pulp & Paper Industries Co., Ltd. Director of the Company ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) 5.2 Significant transactions for the years ended December 31, 2012 and 2011, with related parties, were as follows

Pricing policy

Sales - raw materials and wages C.P.G. Garment Co., Ltd.

Consolidated financial statements 2012

2011

Unit : Baht Separate financial statements 2012

2011

(1) -

-

34,828,096.03

15,300,375.05

-

-

710,864.98 2,148,810.92

1,172,172.04 289,885.74

Interest income (2) Castle Peak International Co., Ltd. C.P.G. Garment Co., Ltd. Yueyang Fengli Pulp & Paper Industry Co., Ltd. Castle Peak Pulp & Paper Industries Co., Ltd. Total

1,865,858.84

1,954,605.25

1,865,858.84

1,954,605.25

9,376,209.45 11,242,068.29

5,170,689.03 7,125,294.28

9,376,209.45 14,101,744.19

5,170,689.03 8,587,352.06

Fee income for loan guarantee (1) Castle Peak Pulp & Paper Industries Co., Ltd.

4,386,986.28

4,374,999.98

4,386,986.28

4,374,999.98

Purchases - inventories and wages (1) C.P.G. Garment Co., Ltd.

-

-

18,716,937.56

20,809,688.59

-

-

4,624,198.90

5,619,572.18

12,368,773.00

12,397,154.00

10,357,285.00

10,460,986.00

-

-

22,500,000.00

-

Interest expense Castle Peak Real Estate Co., Ltd.

(2)

Management remuneration Purchase - investment properties (Note 14) Castle Peak International Co., Ltd.

Pricing policy are as follows: (1) Agreed price (2) Interest rate at MLR/ MLR+0.25 of a local bank

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

37


NOTES TO FINANCIAL STATEMENTS (cont.) 5.3 Significant assets and liabilities at December 31, 2012 and 2011, with related parties, were as follows: Unit : Baht Consolidated financial statements Separate financial statements 2012 Trade account receivable Subsidiary C.P.G. Garment Co., Ltd. Other account receivable Associate Castle Peak Pulp & Paper Industries Co., Ltd. Short-term loans and advances to Short-term loans Subsidiaries C.P.G. Garment Co., Ltd. Castle Peak International Co., Ltd. Associates Yueyang Fengli Pulp & Paper Industry Co., Ltd. Castle Peak Pulp & Paper Industries Co., Ltd. Advances to : Subsidiaries C.P.G. Garment Co., Ltd. Director Ms. Aree Tempitayakom Total Less allowance for doubtful accounts Loans and advances to related parties, net Interest receivables Subsidiaries C.P.G. Garment Co., Ltd. Castle Peak International Co., Ltd. Associates Yueyang Fengli Pulp & Paper Industry Co., Ltd. Castle Peak Pulp & Paper Industries Co., Ltd. Total interest receivables

38

2011

2012

2011

-

-

14,432,951.01

4,784,341.15

22,060,821.83

17,673,835.55

22,060,821.83

17,673,835.55

-

-

30,920,000.00 -

17,060,000.00

24,917,586.00

25,791,050.00

24,917,586.00

25,791,050.00

116,510,000.00

80,420,000.00

116,510,000.00

80,420,000.00

-

-

-

80,918.33

141,427,586.00 141,427,586.00

1,000,000.00 107,211,050.00 107,211,050.00

172,347,586.00 172,347,586.00

123,351,968.33 (5,254,776.04) 118,097,192.29

-

-

1,777,666.75 -

10,924.66 5,400,555.89

648,454.65

688,232.28

648,454.65

688,232.28

17,418,642.45 18,067,097.10

10,770,472.29 11,458,704.57

17,418,642.45 19,844,763.85

10,770,472.29 16,870,185.12

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) Consolidated financial statements 2012 Advance paid for common share incremental (presented under other non-current assets) Associate Castle Peak Pulp & Paper Industries Co., Ltd.

2011

Unit : Baht Separate financial statements 2012

2011

-

20,000,000.00

-

20,000,000.00

65,000,000.00

-

65,000,000.00

-

2,728,039.29 67,728,039.29

-

2,728,039.29 67,728,039.29

-

Trade account payable Subsidiary C.P.G. Garment Co., Ltd.

-

-

939,220.93

6,062,114.53

Short-term loans Subsidiary Castle Peak Real Estate Co., Ltd.

-

-

65,647,000.00

71,497,000.00

Interest payable Subsidiary Castle Peak Real Estate Co., Ltd.

-

-

385,682.17

427,135.64

Long-term loans and interest receivable Long-term loans Associate Castle Peak Pulp & Paper Industries Co., Ltd. Interest receivable Associate Castle Peak Pulp & Paper Industries Co., Ltd. Total long-term loans and interest receivable

On April 27, 2011, the Company has entered into memorandum with Castle Peak Pulp & Paper Industries Co., Ltd. in order to purchase common share incremental of such company of 13,500,000 common shares, Baht 10 per share, totaling of Baht 135,000,000. The success of this share incremental depends on the processing conditions. In case that the parties fail to satisfy the condition, this memorandum will be terminated. The Company has paid advance for such common share incremental of Baht 20,000,000. On April 1, 2012, the parties have entered into the memorandum to terminate the purchasing of common shares, since parties are unable to satisfy the condition. Advance for such common share incremental of Baht 20,000,000 as afore-mentioned, has changed to be a short-term loan. Castle Peak Pulp & Paper Industries Co., Ltd., therefore, issues the Company a promissory note with interest rate at MLR+0.25% p.a.. This promissory note is paid on demand with no collateral. CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

39


NOTES TO FINANCIAL STATEMENTS (cont.) 5.4 Movement of loans and advances to related parties during the year ended December 31, 2012 were as follows: Unit : Baht Consolidated financial statements Gain (loss) December on exchange December Interest 31, 2012 rate (%) 31, 2011 Increase (Decrease) rate Associates:Loans to : Yueyang Fengli Pulp & Paper Industry Co.,Ltd. Castle Peak Pulp & Paper Industries Co., Ltd. Advances to : Director Total

25,791,050.00

-

-

(873,464.00)

24,917,586.00

7.25-7.50

80,420,000.00

56,090,000.00 (20,000,000.00)

- 116,510,000.00

7.25-7.50

1,000,000.00 107,211,050.00

700,487.71 (1,700,487.71) 56,790,487.71 (21,700,487.71)

(873,464.00) 141,427,586.00

None

Unit : Baht

December 31, 2011 Loans to : Subsidiaries C.P.G. Garment Co., Ltd. Castle Peak International Co., Ltd. Associates Yueyang Fengli Pulp & Paper Industry Co., Ltd. Castle Peak Pulp & Paper Industries Co., Ltd. Advances to : Subsidiary C.P.G. Garment Co., Ltd. Related party: Director Total Less allowance for doubtful accounts Net

17,060,000.00 25,791,050.00 80,420,000.00 80,918.33

Separate financial statements Gain (loss) on exchange December 31, 2012 Increase (Decrease) rate

Interest rate (%)

78,520,000.00 (47,600,000.00) 1,300,000.00 (18,360,000.00)

-

30,920,000.00 -

7.00-7.25 7.00-7.25

-

(873,464.00)

24,917,586.00

7.25-7.50

- 116,510,000.00

7.25-7.50

-

None

(873,464.00) 172,347,586.00 (873,464.00) 172,347,586.00

None

-

56,090,000.00 (20,000,000.00) 910,245.85

(991,164.18)

665,187.73 (665,187.73) 123,351,968.33 137,485,433.58 (87,616,351.91) (5,254,776.04) 5,254,776.04 118,097,192.29 142,740,209.62 (87,616,351.91)

-

As at December 31, 2012, the Company had loans to an indirect associate (a subsidiary located in China of the Company’s associate) of USD 820,000. These loans bear interest rates at 7.25-7.50 p.a. (December 31, 2011 : 6.375% -7.500% p.a.), the principal and accrued interest expense will be repaid within August 24, 2013. Loans and advances to related parties have no collateral.

40

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) 5.5 Movement of long-term loans to a related party during the year ended December 31, 2012 were as follows (Unit : Baht) Consolidated/ Separate financial statements December 31, 2011 Loans to: Associate Castle Peak Pulp & Paper Industries Co., Ltd. Total

Increase

-

December 31, 2012

(Decrease)

65,000,000.00 65,000,000.00

-

65,000,000.00 65,000,000.00

Interest rate (%)

7.00-7.25

On July 27, 2012, September 26, 2012 and October 15, 2012, the Company has entered into three long-term agreements with a related party of Baht 50,000,000, Baht 10,000,000 and Baht 5,000,000, respectively. These loans bear interest rates at MLR, but not over 15% p.a.. The principals and accrued interest expenses will be repaid by March 31, 2015, September 30, 2015 and October 15, 2015, respectively. These loans to a related party have no collateral. 5.6 Movement of short-term loans and advances from related parties during the year ended December 31, 2012 were as follows: (Unit : Baht) Separate financial statements December 31, 2011 Subsidiaries Loans from : Castle Peak Real Estate Co., Ltd. Advances from : C.P.G. Garment Co., Ltd. Total

Increase

(Decrease)

December 31, 2012

Interest rate (%)

71,497,000.00

42,000,000.00 (47,850,000.00)

65,647,000.00

7.00-7.25

71,497,000.00

2,722,639.12 (2,722,639.12) 44,722,639.12 (50,572,639.12)

65,647,000.00

None

6. Cash and cash equivalents Consolidated financial statements 2012 Cash Current accounts Saving deposits Total

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

105,000.00 20,174,945.19 3,231,583.35 23,511,528.54

2011 120,000.00 6,959,397.31 477,116.32 7,556,513.63

(Unit : Baht) Separate financial statements 2012 45,000.00 13,148,950.42 83,324.55 13,277,274.97

2011 50,000.00 1,458,807.58 82,994.20 1,591,801.78

41


NOTES TO FINANCIAL STATEMENTS (cont.) 7. Trade and other accounts receivable Consolidated financial statements Note

Trade accounts receivable - Related party - Other parties Total trade accounts receivables Other accounts receivable - Related party - Other parties Total other accounts receivable Total

2012

2011

2012

2011

5.3

121,560,031.27 121,560,031.27

139,125,069.98 139,125,069.98

14,432,951.01 54,308,998.36 68,741,949.37

4,784,341.15 96,985,358.58 101,769,699.73

5.3

22,060,821.83 51,053.76 22,111,875.59 143,671,906.86

17,673,835.55 1,088,158.58 18,761,994.13 157,887,064.11

22,060,821.83 21,743.08 22,082,564.91 90,824,514.28

17,673,835.55 202,606.52 17,876,442.07 119,646,141.80

Aging analyses for trade accounts receivable were as follows: Consolidated financial statements 2012 Related party Within credit term Over due - Not over 3 months - Over 3 months but not over 6 months - Over 6 months but not over 12 months Total Other parties Within credit term Over due - Not over 3 months - Over 6 months but not over 12 months Total

42

Unit : Baht Separate financial statements

2011

Unit : Baht Separate financial statements 2012

2011

-

-

3,124,356.81

2,968,890.25

-

-

7,173,655.77 1,512,487.34 2,622,451.09 14,432,951.01

1,815,450.90 4,784,341.15

115,468,298.36

83,235,348.18

48,217,265.45

41,095,636.78

6,091,732.91 121,560,031.27

47,112,253.44 8,777,468.36 139,125,069.98

6,091,732.91 54,308,998.36

47,112,253.44 8,777,468.36 96,985,358.58

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) 8. Inventories - garment business Consolidated financial statements 2012 Finished goods Work in process Raw materials and supplies Raw materials in transit Total Less allowance for declining in value of inventories Net

2011

Unit : Baht Separate financial statements 2012

2011

5,119,357.50 99,271,769.56 84,656,510.56 7,125,202.59 196,172,840.21

7,101,656.96 130,135,986.96 91,695,043.98 10,713,498.50 239,646,186.40

1,849,366.05 72,157,041.68 48,833,530.43 4,324,462.69 127,164,400.85

2,534,191.08 97,005,961.19 56,079,169.92 9,127,848.87 164,747,171.06

(600,104.88) 195,572,735.33

(1,018,105.19) 238,628,081.21

127,164,400.85

164,747,171.06

The cost of inventories which is recognized as an expense and included in cost of sale of goods for the year ended December 31, 2012 amounted to Baht 970.20 million (2011: Baht 756.45million) in the consolidated statements of comprehensive income and Baht 582.93 million (2011: Baht 533.59 million) in the separate statements of comprehensive income. In 2012, the Group recognized a recovery of allowance for decline in value of inventories of Baht 0.42 million (2011: Baht 0.08 million).

9. Inventories- real estate business Consolidated financial statements 2012 Land Land development Construction in progress Infrastructure Construction development costs Total Less cumulative costs transferred to cost of sales Net

2011

Unit : Baht Separate financial statements 2012

2011

132,597,323.73 27,564,410.83 162,763,666.11 48,301,464.84 9,544,176.65 380,771,042.16

271,792,914.34 36,645,594.39 333,510,897.43 68,031,344.09 15,296,634.37 725,277,384.62

58,021,412.73 2,108,619.94 37,015,757.22 13,253,421.15 1,661,183.51 112,060,394.55

197,217,003.34 12,222,731.00 227,539,301.41 39,409,601.10 9,191,369.62 485,580,006.47

(191,744,101.25) 189,026,940.91

(529,714,761.54) 195,562,623.08

(47,632,061.90) 64,428,332.65

(423,793,418.03) 61,786,588.44

As at December 31, 2012, inventories- real estate business of the Company and subsidiaries totaling Baht 168.89 million in consolidated financial statements and Baht 57.17 million in separate financial statements (December 31, 2011: Baht 122.58 million in consolidated financial statements), are mortgaged as collateral for long-term loans (Note 18) and letters of guarantee for construction and maintenance of infrastructures (Note 25.3).

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

43


NOTES TO FINANCIAL STATEMENTS (cont.) 10. Other current assets Consolidated financial statements 2012

Note

Advances for constructions Interest receivables 5.3 Advances for purchase of raw materials Income tax deducted at source Other current assets Total

2011

18,565,311.00 18,067,097.10 3,249,698.71 2,997,150.64 4,141,262.68 47,020,520.13

2012

2,704,561.03 11,458,704.57 4,239,523.43 4,191,708.42 3,717,633.24 26,312,130.69

11. Investments in subsidiaries and associates

Name Investment in associates :Castle Peak Pulp & Paper Co., Ltd. Thanee Watana Co., Ltd. (1) Total investment in associates

Type of business Pulp & paper Real estate

Unit : Baht Separate financial statements 2011

15,903,189.00 19,844,763.85 2,224,102.63 1,425,809.91 2,467,613.71 41,865,479.10

16,870,185.12 4,236,883.24 2,302,798.27 2,660,479.16 26,070,345.79

Unit : Baht Consolidated financial statements

Paid-in Ownership capital Investment at equity method (Thousand interest (%) Baht) 2012 2011 100,000 3,750

41.00 49.00

7,226,775.73 3,067,877.13 10,294,652.86

83,035,997.46 3,088,466.53 86,124,463.99

The Company records investment in an associate by using the equity method in consolidated financial statements. The share of comprehensive income (loss) of said associate in the consolidated statements of comprehensive income for the year ended December 31, 2012 amounted to Baht (75.83) million (December 31, 2011: Baht (18.88) million), were computed from the financial statements which audited by other auditors.

(1)

44

Not started its core business

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) Unit : Baht

Name Investments in subsidiaries :C.P.G. Garment Co., Ltd.

Paid-in Separate financial statem capital Ownership Dividend income Type of (Thousand interest Investment at cost method business Baht) (%) 2012 2011 2012 2011

Export garment Trading and real estate

Castle Peak International Co., Ltd. Castle Peak Real Estate Real estate Co., Ltd. Investment in associates :Castle Peak Pulp & Paper Pulp & paper Co., Ltd. (1) Real estate Thanee Watana Co., Ltd. Total Less allowance for impairment loss on investments Investments in subsidiaries and associates , net

21,200

99.86

-

-

21,170,000.00

21,170,000.00

-

-

- 165,999,930.00

-

-

200,000

99.99 199,999,880.00 199,999,880.00

-

-

100,000 3,750

41.00 49.00

-

-

41,000,000.00 41,000,000.00 1,837,500.00 1,837,500.00 264,007,380.00 430,007,310.00 - (165,999,930.00) 264,007,380.00 264,007,380.00

Not started its core business In September 2012, a subsidiary (Castle Peak International Co., Ltd.) was liquidated. The Company disposed its investment in the subsidiary which had allowance for impairment in full amount. The disposal on mentioned subsidiary has not affected to the separate financial statements. (1)

12. Other long-term investments Consolidated financial statements 2012 Investments in available-for-sale securities Less allowance for impairment loss on investments Net

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

2011

Unit : Baht Separate financial statements 2012

2011

5,500,000.00

5,500,000.00

5,000,000.00

5,000,000.00

(4,134,685.00) 1,365,315.00

(4,421,340.00) 1,078,660.00

(3,838,250.00) 1,161,750.00

(4,080,550.00) 919,450.00

45


NOTES TO FINANCIAL STATEMENTS (cont.) 13. Property, plant and equipment

Unit : Baht Consolidated financial statements

As at December 31, 2011 Cost plus revaluation surplus : Land and improvement Land - revaluation surplus Buildings Buildings - revaluation surplus Cost : Machinery and equipment Furniture and office equipment Leasehold building improvement Other constructions Vehicles Assets under construction and installation Total cost Accumulated depreciation : Land improvement Building Building - revaluation surplus Machinery and equipment Furniture and office equipment Leasehold building improvement Other constructions Vehicles Total accumulated depreciation Net

46

Increase

Decrease

Transfer in (out)

As at December 31, 2012

46,304,335.50 102,815,263.20 110,528,137.78 236,034,831.56

8,835.00 -

-

1,701,900.00 -

46,304,335.50 102,815,263.20 112,238,872.78 236,034,831.56

329,608,096.77 118,255,145.32 3,899,086.28 355,562.61 36,755,640.26

10,691,373.69 2,688,010.73 9,135.00

(3,182,414.10) -

2,792,689.41 -

343,092,159.87 117,760,741.95 3,899,086.28 355,562.61 36,764,775.26

984,556,099.28

4,494,589.41 17,891,943.83

- (4,494,589.41) (3,182,414.10)

999,265,629.01

(10,298,398.70) (96,010,712.06) (1,404,564.08) (134,252,874.90) (10,443,281.88) (316,842,301.43) (5,804,592.35) (114,503,958.00) (1,268,632.68) (3,899,085.28) (17,778.12) (149,781.23) (120,670.00) (36,221,669.39) (712,178,780.99) (19,059,519.11) 272,377,318.29 (1,167,575.28)

3,182,240.10 3,182,240.10 (174.00)

(10,298,398.70) (97,415,276.14) - (144,696,156.78) - (322,646,893.78) - (112,590,350.58) (3,899,085.28) (167,559.35) (36,342,339.39) - (728,056,060.00) - 271,209,569.01

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) Unit : Baht Separate financial statements As at December 31, 2011

Increase

Cost plus revaluation surplus : Land and land improvement 40,104,335.50 Land - revaluation surplus 50,596,263.20 Buildings 88,641,439.19 Buildings - revaluation surplus 157,458,448.61 Cost : 3,495,393.23 Machinery and equipment 211,875,370.72 2,256,966.36 Furniture and office equipment 72,467,517.92 Vehicles 3,972,680.66 Assets under construction 4,494,589.41 and installation Total cost 625,116,055.80 10,246,949.00 Accumulated depreciation : Land improvement (10,298,398.70) (778,573.83) Building (81,680,484.62) Building - revaluation surplus (96,182,175.53) (7,090,036.20) Machinery and equipment (202,146,191.77) (3,959,656.49) (708,695.68) Furniture and office equipment (70,709,832.80) (9,646.98) Vehicles (3,949,616.98) Total accumulated depreciation (464,966,700.40) (12,546,609.18) Net 160,149,355.40 (2,299,660.18)

Transfer in (out)

As at December 31, 2012

-

1,701,900.00 -

40,104,335.50 50,596,263.20 90,343,339.19 157,458,448.61

(2,970,355.92) -

2,792,689.41 -

218,163,453.36 71,754,128.36 3,972,680.66

- (4,494,589.41) (2,970,355.92)

632,392,648.88

Decrease

2,970,274.92 2,970,274.92 (81.00)

(10,298,398.70) (82,459,058.45) - (103,272,211.73) - (206,105,848.26) (68,448,253.56) (3,959,263.96) - (474,543,034.66) - 157,849,614.22

In December 2011, the Company and a subsidiary have revalued their land and buildings by an independence appraiser, Siam Appraisal and Service Co., Ltd. These revaluations caused decrease in value of land of Baht 4.48 million, and increase in value of buildings of Baht 41.56 million in consolidated financial statements, and decrease in value of land of Baht 4.80 million, and increase in value of buildings of Baht 23.33 million in separate financial statements. These revaluations have been recorded in statements of comprehensive income for the year 2011.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

47


NOTES TO FINANCIAL STATEMENTS (cont.) As at December 31, 2012, substantial parcels of land and construction thereon of the Group, with net carrying value of Baht 242.65 million (December 31, 2011 : Baht 255.12 million) in the consolidated financial statements, and Baht 140.14 million (December 31, 2011 : Baht 148.64 million) in the separate financial statements, were mortgaged as collateral for overdrafts and short-term loans from financial institutions of the Group (Note 16) and loans from financial institutions of an associate (Note 25.5). As at December 31, 2012, the Group had fully depreciated fixed assets which were still in active use at gross carrying value totaling Baht 474.12 million (December 31, 2011: Baht 468.38 million) in the consolidated financial statements and Baht 282.13 million (December 31, 2011: Baht 277.03 million) in the separate financial statements.

14. Investment properties

Unit : Baht Consolidated financial statements As at December 31, 2011

Cost : Land and land improvement Buildings and other constructions Leasehold land and building Total cost Accumulated depreciation : Land improvement Buildings and other constructions Leasehold land and building Total accumulated depreciation Allowance for impairment of assets Land Buildings and other constructions Total allowance for impairment of assets Net

48

Increase

As at December 31, 2012

Transfer in (out)

Decrease

- 107,569,099.00 - 37,755,071.56 - (24,218,639.55) - (24,218,639.55) 145,324,170.56

107,363,463.00 37,755,071.56 24,218,639.55 169,337,174.11

205,636.00 205,636.00

(80,552.01) (19,815,192.81) (1,739,066.27) (21,634,811.09)

(943,886.52) (1,043,440.56) (1,987,327.08)

-

(2,148,458.00) (2,336,002.90)

-

-

(4,484,460.90) 143,217,902.12

(1,781,691.08)

(80,552.01) - (20,759,079.33) 2,782,506.83 2,782,506.83 (20,839,631.34) -

(2,148,458.00) (2,336,002.90)

- (4,484,460.90) - (21,436,132.72) 120,000,078.32

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) Unit : Baht Separate financial statements As at December 31, 2011 Cost : Land and land improvement 76,669,385.00 Buildings 33,861,732.66 Leasehold land and building 24,218,639.55 Total cost 134,749,757.21 Accumulated depreciation : Land improvement (80,552.01) Buildings (18,257,856.81) Leasehold land and building (1,739,066.27) Total accumulated depreciation (20,077,475.09) Net 114,672,282.12

Increase

Decrease

Transfer in (out)

As at December 31, 2012

22,705,636.00 22,705,636.00

- 99,375,021.00 - 33,861,732.66 - (24,218,639.55) - (24,218,639.55) 133,236,753.66

(943,886.52) (1,043,440.56) (1,987,327.08) 20,718,308.92

(80,552.01) - (19,201,743.33) 2,782,506.83 2,782,506.83 (19,282,295.34) - (21,436,132.72) 113,954,458.32

On August 14, 2012, the Company has entered into an agreement to buy and to sell with a subsidiary (Castle Peak International Co., Ltd.) for purchase of land at price of Baht 22.50 million. The price is based on an appraised value, performed by an independence appraiser (UK. Valuations and Agency Co., Ltd.). On July 17, 2012, The Company has entered into an agreement for compensation of leasehold termination. The Company, who owns leasehold right, will get compensation of Baht 46.40 million (disclosed as fair value). In July 2012, the Company has received deposit of Baht 5.68 million, the rest of Baht 40.72 million will receive at the date of ownership transferring date as specified in the agreement. In case that this termination can not be registered, which is not identified as parties false, the Company will repay the received amount with interest rate of 7.00% p.a.. As a result, the Company has reclassified leasehold land and building, with net carrying value at December 31, 2555, of Baht 21.44 million, which was recorded under investment properties to assets held for sale. In January 2013, the Company has transferred its ownership and received the rest compensation in full amount.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

49


NOTES TO FINANCIAL STATEMENTS (cont.) Fair value of investment properties as at December 31, 2012 is as follows: Consolidated financial statements At cost Land Land and buildings Total

78,091,528.00 41,908,550.32 120,000,078.32

Fair value 104,362,850.00 81,980,000.00

Unit : Baht Separate financial statements At cost

Fair value

72,045,908.00 41,908,550.32 113,954,458.32

84,691,250.00 81,980,000.00

Fair values are appraised values, performed by independence appraisers, Siam Appraisal and Service Co., Ltd. and UK. Valuations and Agency Co., Ltd., using market values on an existing use basis, and open market of the land located nearby. As at December 31, 2012, investment properties of the Company, with net carrying value of Baht 77.68 million (December 31, 2011: Baht 78.24 million) in the consolidated and separate financial statements, were mortgaged as collateral for overdrafts and short-term loans from financial institutions of the Company (Note 16) and loans from financial institutions of an associate (Note 25.5).

15. Deposits with commitment As at December 31, 2012 and 2011, the deposits with commitment are used as collateral for bank’s issuance of letters of guarantee to the Land Department to guarantee the construction and maintenance of infrastructures (Note 25.3).

16. Overdrafts and short-term loans from financial institutions Consolidated financial statements 2012 Bank overdrafts Short - term loans from banks - Packing credits - Liability under trust receipts - Promissory notes Total

2011

Unit : Baht Separate financial statements 2012

2011

11,382,240.00

5,298,635.40

7,058,785.28

5,186,059.92

126,800,000.00 101,931,664.19 240,113,904.19

78,500,000.00 143,593,024.76 6,000,000.00 233,391,660.16

115,500,000.00 64,013,404.09 186,572,189.37

36,000,000.00 104,199,166.29 6,000,000.00 151,385,226.21

As at December 31, 2012, the Group has credit facilities with several banks totaling Baht 621.92 million (December 31, 2011: Baht 511.92 million) in the consolidated financial statements and Baht 421.50 million (December 31, 2011 : Baht 386.5 million) in the separate financial statements. All loans are guaranteed by mortgaging land and construction thereon (Note 13), investment properties (Note 14), and personally guaranteed by certain the Company directors

50

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) 17. Other current liabilities Consolidated financial statements 2012

Note

Accrued salary, wages and bonuses Accrued interest Other current liabilities Total

25,122,841.00 1,685,758.76 12,299,200.86 39,107,800.62

5.3

2011 22,747,599.00 1,634,592.41 15,042,577.11 39,424,768.52

18. Long - term loans Consolidated financial statements 2012 Current portion of long-term loans Long-term loans Total

4,668,000.00 508,449.69 5,176,449.69

2011 15,175,600.00 15,175,600.00

Unit : Baht Separate financial statements 2012 14,081,027.00 1,857,849.18 10,155,425.00 26,094,301.18

2011 11,632,980.00 1,489,832.90 10,075,263.99 23,198,076.89

Unit : Baht Separate financial statements 2012

2011

508,449.69 508,449.69

-

On May 17, 2012, the Company has entered into a financial support agreement with a commercial bank in order to lend for its real estate project. The credit line of this agreement is Baht 140.35 million, which consists of 1) loan of Baht 105.35 million and 2) letter of guarantee of Baht 35.00 million. This loan carries interest rate at MLR+1.0% p.a. and guaranteed by mortgaging the substantive portion of inventories- real estate business of the Company (Note 9), and personally guaranteed by a director. The repayment amount to free / withdraw the collateral of each unit will not less than the summation of land value of such unit and 115% of construction value, and the Company agrees to repay principle together with interest as follows Repayment period from agreement date ภายในกำหนดเวลา 12 เดือน ภายในกำหนดเวลา 13 ถึง 36 เดือน ภายในกำหนดเวลา 37 ถึง 60 เดือน ภายในกำหนดเวลา 72 เดือน

Repayment amount (principle together with interest) (Baht) 80,000 27,920,000 70,000,000 Repayment all remaining principle and interest

Two subsidiaries (“borrowers”) have credit lines with a commercial bank totaling Baht 144.00 million (Baht 72.00 million each), carried interest rate of MLR-0.50% p.a.. Such credit lines are guaranteed by mortgaging substantial portion of inventories- real estate business of the said subsidiaries (Note 9), and personally guaranteed by a director. The entire loans will be repaid within 40 months since the first principle is withdrawn (June 27, 2011 and August 16, 2011). When the mortgage asset is free and/ or withdraw mortgaged land of these loans in order to transfer the ownership to buyer, lenders agree to repay 60% of selling price. As of December 31, 2012, the amount of 60% of identified in to sell and to buy agreements of each borrower is higher than its remaining loan, therefore, entire loans are presented as current portion of long-term loans. CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

51


NOTES TO FINANCIAL STATEMENTS (cont.) 19. Employee benefit obligations The Group adopted TAS 19 - Employee Benefits with effect from January 1, 2011. The Group has opted to recognise the transitional obligation as at January 1, 2011 through profit or loss on a straight-line basis over five years from January 1, 2011. Unit : Baht Consolidated financial statements Separate financial statements 2012

2011

2012

2011

Movement in the present value of the defined benefit obligations Defined benefit obligations - beginning Current service costs and interest Transferring employees during the Group Benefit paid by projects Employees resigned before retirement Defined benefit obligations - ending

32,226,283.00 5,287,117.00 254,048.00 (563,000.00) (699,772.00) 36,504,676.00

27,282,304.00 4,943,979.00 32,226,283.00

12,029,498.00 2,023,883.00 2,847,913.00 (90,000.00) 16,811,294.00

10,598,550.00 1,430,948.00 12,029,498.00

Movements of the provision for the unrecognized transitional obligations Unrecognized obligation - beginning Transferring employees during the Group Recognized through profit or loss for the year Employees resigned before retirement Unrecognized obligation -ending

21,395,440.00 (255,974.00) (5,352,324.00) (364,634.00) 15,422,508.00

27,282,304.00 5,886,864.00 21,395,440.00

8,048,432.00 1,099,538.00 (2,061,607.00) 7,086,363.00

10,598,550.00 (2,550,118.00) 8,048,432.00

Expense recognized in profit or loss for year ended December 31, Current service costs Interest on obligation Transferring employees during the Group Employees resigned before retirement Total

11,708,045.50 1,208,396.50 (1,766,979.00) (335,138.00) 10,814,325.00

9,817,889.00 1,012,954.00 10,830,843.00

5,323,163.00 510,702.00 5,833,865.00

3,615,297.00 365,769.00 3,981,066.00

The expense is recognized in the following line items of profit or loss for the year ended December 31, Cost of sales Selling expenses Administrative expenses Total

5,355,777.00 2,266,884.00 3,191,664.00 10,814,325.00

4,534,531.00 1,604,687.00 4,691,625.00 10,830,843.00

2,718,714.00 601,590.00 2,513,561.00 5,833,865.00

2,203,697.00 467,078.00 1,310,291.00 3,981,066.00

52

ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) Principal actuarial assumptions at the reporting date: Consolidated financial statements Discount rate Salary increase rate

Unit : % Separate financial statements

2012

2011

2012

2011

3.60-4.12 5.00

3.60-4.12 5.00

3.60 5.00

3.60 5.00

As a resulted of the Group reorganization in June 2012, certain employees have been transferred from Castle Peak Real Estate Co., Ltd. and Aek Thana Property Co., Ltd. (“transferors’) to Castle Peak Holdings Public Company Limited and C.P.G. Garment Co., Ltd. (“transferees”). The service periods of all transferred employees have been continuously count, and the transferees are responsible for entire amount. The transferors, therefore, reverse all recorded employee benefit obligation for such transferred employees.

20. Expenses by nature Significant expenses by nature for the years ended December 31, 2012 and 2011, were as follows: Consolidated financial statements 2012 Raw materials and supplies used Changes in finished goods and work in process Increase in land, construction in progress and utilities during the year Changes in real estate under development projects Salary, wages and other employee benefits Depreciation Transportation expenses Rental and services Utility expenses

2011

Unit : Baht Separate financial statements 2012

2011

641,746,191.84

534,672,052.68

354,026,028.43

382,299,339.57

32,846,516.86

(40,729,798.08)

25,533,744.54

(24,120,557.55)

76,505,929.59

103,565,024.84

49,270,388.52

59,566,612.18

6,535,682.17 369,003,944.00 20,994,718.28 13,121,902.63 23,040,276.84 22,955,671.96

(90,761,813.46) 329,072,499.11 17,656,860.16 21,990,498.68 22,949,855.20 20,002,967.24

(2,641,744.21) 210,228,162.00 14,481,808.35 7,403,047.25 10,193,677.72 13,219,025.34

(52,026,347.44) 175,869,524.00 13,492,942.25 16,099,021.12 10,058,623.86 11,292,878.14

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

53


NOTES TO FINANCIAL STATEMENTS (cont.) 21. Income tax Unit: Baht Separate financial statements 2012 Profit before income tax Add Expenses not deductible for tax purposes Income subject to tax Less Income not subject to tax and additional expenses deductible for tax purposes Tax losses carry forward Loss for tax purposes

2011

43,635,059.05 16,297,081.90 253,510.94

31,140,065.59 13,947,329.87 50,873.00

(172,943,512.33) (44,700,096.91) (157,457,957.35)

(18,500,548.05) (72,037,019.10) (45,399,298.69)

All subsidiaries of the Company have no significant reconciliation items between profit (loss) before income tax and profit (loss) for tax purposes.

54

ANNUAL REPORT 2012


CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED 18 18

2 362 364

Property, plant and equipment Other assets Total assets at December 31, 269 1,015 1,284

2 (1)

127 (86) 41 19 (6)

Others

1,136 Net sales (1,024) Cost of sales 112 Gross profit 41 Profit (loss) from operation Equity gain (loss) from investment in associates (74) Financial costs (20) Profit (loss) for the year

Real Garment estate business business

2012

271 1,395 1,666

1,263 (1,110) 153 62 (74) (27)

Total

(421) (421)

(54) 55 1 (16) 10

Add (less) inter transactions

271 974 1,245

1,209 (1,055) 154 46 (74) (17) (45)

Net

270 1,005 1,275

926 (792) 134 46 (31) (11)

2 366 368

17 (16) 1 (18) (6)

Real Garment estate business business

Consolidated financial statements

35 35

1 (1)

Others

2011

272 1,406 1,678

943 (808) 135 29 (31) (18)

Total

Details of information about business segment of the Group for the years ended December 31, 2012 and 2011 were as follows:

22. Segment financial information

(409) (409)

(36) 37 1 (10) 8

Add (less) inter transactions

272 997 1,269

907 (771) 136 19 (31) (10) (22)

Net

Unit : Million Baht

NOTES TO FINANCIAL STATEMENTS (cont.)

55


NOTES TO FINANCIAL STATEMENTS (cont.) 23. Commitments from real estate developing projects Consolidated financial statements 2012 Value of sales already contracted during the year Cumulative value of sales already contracted As percentage of total sales of projects on hand (%) Number of projects: Number of projects on hand at beginning of the year Number of new opened projects Number of closed projects Number of projects on hand at end of the year

2011

Unit : Million Baht Separate financial statements 2012

2011

172.31 348.42

63.16 700.14

97.95 97.95

9.23 524.02

29.29

56.29

20.65

100.00

4 1 (1)

4 -

1 1 (1)

1 -

4

4

1

1

24. Financial instruments 24.1 Financial risk management policies The Group is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The Group does not hold or issue derivative financial instruments for speculative or trading purposes. 24.2 Capital management The objectives of the Group’s capital management are to safeguard the Group’s ability to continue as a going concern in order to provide returns to the Group’s shareholders and benefits to other stakeholders. The management sets strategies to support the Group’s operations for more efficiency, and better performances and stronger financial status, and capital management policies to maintain the optimal capital structure and cost of capital. 24.3 Interest rate risk Interest rate risk derives from changes in interest rate. The Group has interest rate risk because their loans bear interest at the floating interest rate. If the interest rate significantly changes, it will be impact to the Group. The information of interest rate and maturity of long-term loans are disclosed in Note 18. 24.4 Foreign currency exchange rate risk The Group has the foreign currency exchange rate risk related to assets and liabilities denominated in foreign currencies which have not made foreign currency exchange rate risk hedging. As at December 31, 2012 and 2011, assets and liabilities denominated in foreign currencies which have not been hedged against foreign exchange rate risk, are summarized as follows:

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ANNUAL REPORT 2012


NOTES TO FINANCIAL STATEMENTS (cont.) Unit : Baht Consolidated financial statements 2012 Assets US Dollar Hong Kong Dollar Pound Sterling

2011 Liabilities

88,193,959.94 2,387,754.71 -

95,097,130.48 14,222,584.24 89,085.17

Assets

Liabilities

806,660.00 -

137,497,188.55 21,129,043.03 425,738.67

Unit : Baht Separate financial statements 2012 Assets US Dollar Hong Kong Dollar Pound Sterling

36,619,242.95 1,913,919.37 -

2011 Liabilities 55,142,381.68 13,484,528.61 89,085.17

Assets 806,660.00 -

Liabilities 96,457,707.12 20,534,476.48 322,953.09

24.5 Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the report date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the report. 24.6 Liquidity risk Liquidity risk, or funding risk, is the risk that the Group will encounter difficulty in raising funds to meet commitments associated with financial instruments. Liquidity risk may result from an inability to sell financial assets quickly at close to its fair value. The Group’s financial assets comprise cash and cash equivalents, trade accounts receivable and inventories which are liquid and able to sell at close to this fair value when the Group wishes to raise fund. 24.7 Fair value The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. In determining the fair value of its financial assets and liabilities, the Company takes into account its current circumstances and the costs that would be incurred to exchange or settle the underlying financial instrument. Management believes the fair value of the Company’s financial assets and liabilities do not material differ from their carrying values since the majority of the financial assets and liabilities are classified as short-term and the loans and borrowings are bearing interest at rates close to current market rate.

CASTLE PEAK HOLDINGS PUBLIC COMPANY LIMITED

57


NOTES TO FINANCIAL STATEMENTS (cont.) 25. Commitments and contingent liabilities As at December 31, 2012 : 25.1 The Company and a subsidiary had contingent liabilities from bank’s issuance the letter of guarantee to Custom Department and Government agencies totaling Baht 7.79 million, 25.2 The Company and a subsidiary had commitment on letter of credit for purchasing goods from overseas totaling Baht 18.52 million, 25.3 The Company and two subsidiaries had contingent liabilities from bank’s issuance of letter of guarantee to the Land Department and a local company to guarantee the construction Baht 98.64 million. 25.4 The Company and a subsidiary had commitments on the agreements of development and construction of real estate projects with several contractors totaling Baht 22.64 million, 25.5 The Company had contingent liabilities from being a guarantor for loans of an associate amounting to Baht 250.00 million. A portion of land and constructions and investment properties are mortgaged as collateral for loans of said associate amounting to Baht 80.00 million and Baht 90.00 million (Notes 13 and 14) , respectively. 25.6 The Company and a subsidiary had commitment on forward contacts sold with certain local banks totaling USD 1.51 million against Baht 46.75 million.

26. Financial statements approval Board of Directors of Castle Peak Holdings Public Company Limited has approved these financial statements on February 27, 2013.

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ANNUAL REPORT 2012



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