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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Contents Our Vision Financial Highlights……………………………………………………………………………………………….... Message from Chairman of the Board of Directors................................................................................................... Message from Chief Executive Officer....................................................................................................................... Audit Committee’s Report…………………………………………………………………………………………... General Information…………………………………………………………………………………………………. Corporate Information………………………………………………………………………………………………. Company Background……………………………………………………………………………………………….. Business Operation………………………………………………………………………………………………….... Risk Factors…………………………………………………………………………………………………………... Major Shareholders…………………………………………………………………………………………………... Organization Chart…………………………………………………………………………………………………… Management Structure……………………………………………………………………………………………….. Corporate Governance………………………………………………………………………………………………... Internal Information Control………………………………………………………………………………………… Internal Control……………………………………………………………………………………………………….. Dividend Policy………………………………………………………………………………………………………… Related Transactions………………………………………………………………………………………………….. Report of Board of Directors’ Responsibilities……………………………………………………………………… Details of Executives and Authorized Directors of the Company………………………………………………….. Details of Executives and Authorized of the Company and subsidiaries………………………………………….. Financial Status and Operating Results Analysis…………………………………………………………………… Auditor's Report & Financial Report………………………………………………………………………………...

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Financial Highlights +/(%)

2009 Consolidate

Balance Sheet C Current Assets Total Assets Current Liabilities Total Liabilities Total Shareholders’ Equity

2010 Consolidate

Unit : Million Baht +/+/2011 (%) (%) Consolidate

138.64 1,791.51 580.95 963.93 827.58

- 56.99 - 7.00 - 13.76 - 1.91 - 12.30

203.04 1,748.02 581.27 862.60 885.42

+ 46.45 - 2.43 + 0.05 - 10.51 + 6.99

126.59 345.70 472.30 81.47 178.07 (93.59)

- 59.99 - 26.94 - 40.18 - 68.21 - 51.86 - 396.64

225.82 375.71 601.53 204.67 233.19 57.84

+ 78.38 + 8.68 + 27.36 + 151.21 + 30.95 + 161.80

299.90 2,015.80 743.06 1,066.67 949.13

+ 47.70 +15.32 +27.83 +23.66 + 7.20

Statements of Income Revenue from sales Revenue from rental and transportation services Total Revenue Gross profit EBITDA Net Profit

493.21 + 118.41 463.20 + 23.29 956.40 + 58.99 303.24 + 48.16 279.41 + 19.82 96.72 + 70.68

Financial Ratio Analysis Current ratio (times) Debts to Equity (times) Debt Service Coverage Ratio (times) Return on Equity (%) Gross Profit Margin (%) Net Profit Margin (%)

0.24 1.16 3.76 (10.57) 17.25 (19.82)

1

0.36 0.97 5.76 6.57 34.02 9.62

0.40 1.12 9.20 10.76 31.71 10.32


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Messaage from Chairmaan of the Board B of Directorrs Dear All Shareholders S

TThe year 2011, Thailand hadd been attackedd by the massivve flood in thee 3rd to 4th quarrters especiallyy flooded over 7 industrial zones resulting vast damagee and uncountaable cost to thee industrial secctor. Such hass resulted econnomic growth or o GDP rate over the year which w was deccreasing to 0.1 percent. For our o company, it marked anoother year of suuccess since we w still had good g operating performance. This is attribuuted to our welll understandinng in business management, as a well as beinng appointed as Thailand’s Exclusive Disstributor for ZOOOMLION craanes from Peoples Republic of China that helped generatte income frrom sale in 2011 which waas increased significantly. s t in 2012, we still have better businesss We believe that opportunitties especially to be involvinng in flood preeventing projeccts both from the governmennt and public sectors s which is necessary to use machinee as operation tools. t Howeveer, the financiall crisis in Euro Zone group, coonflict betweenn Iran and Israeel, internal poolitic problem are still be riskks factors that caused us to coonduct businesss management with great caree. OOn behalf of the Board off Directors, wee hereby exprress our great thanks and aappreciation too all the valueed shareholdeers, supportive customers, finnancial institutees, the companny’s executivess, staff memberrs, as well as all related partiees for the conntinued suppoort and trust thaat enabled the company to suucceed well thrrough time. Pllease be confiddent that we wiill conduct annd develop bussiness potentiallity to successfuully achieve ouur goals for the benefits of all related parties..

…… ………………… …………. (Assist. Prof. Dr. Pibooon Limprapat) Chairm man of the Boardd of Directors

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Message from Chief Executive Officer Dear All Shareholders

In the year 2011, the Company remains its healthy operating performance. Despite the fact that there was a year of several disasters which duly impacted Thailand economy, i.e. severe tsunami in Japan who is not only our business alliance, but also important investor of Thailand; the most devastating flood in Thailand’s history duly impacted manufacturing chains and vast damage to the industrial business. However, investment in heavy industries, such as, petrochemical, electricity, public utilities and construction of large shopping centers are now still continuously in progress. In addition, as we have been Thailand’s exclusive distributor of ZOOMLION Cranes from Peoples Republic of China which has been well responded from the customers. In 2011, as a result, Chu Kai Public Company Limited and affiliates thus earned significant income and net profit at total income of Baht 956.40 Million, as increased from 2010 (Baht 601.52 Million) or 59.0 percent and net profit Baht 98.72 Million, increased from 2010 (Baht 57.84 Million) or 70.7 percent. After the flood crisis, the government and private sectors were thus necessary to invest in infrastructure to prevent flood in the future. The demand of heavy machine was therefore increased, it was thus the company’s opportunity both in selling ZOOMLION cranes and renting out heavy machinery. We believe that with our existing potentiality and experience, we shall certainly lead our company to the sustainable growth simultaneously with growth of heavy industry and country development. However, the business management with great care is still necessary under the uncertain situation both inside and outside the country which is still the risk factors.

……………………………. (Mr. Thongchai Praerangsi) Chief Executive Officer

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Audit Committee’s Report Report of the Audit Committee The Audit Committee, Chu Kai Public Company Limited, is consisted with 4 committees, namely, Mr. Vacharin Duangdara, Mr. Surin Premamornkit, Mr. Jessada promjart and Mrs. Werawan Boonkwan, all are independent committee duly qualified according to the requirement of SET. In preceding year, the Audit Committee had performed its duty according to the scope of responsibilities assigned by the Board of Directors. In 2011, there were total 8 Meetings. In the Meetings, the management, the Audit Committee and the Certified Public Accountant had explained related issued which is summarized as follows:1.

Review to ensure correct and sufficient financial report - To review interim financial statements and for 2011 of the company in jointly with the auditor including disclosure of material information and acknowledge notice of the auditor to propose to the Board of Directors for approval by exchanging idea with the auditor, management and internal audit to ensure that the preparation and disclosure of information in such financial report is correct, complete and credible. - Review any affects to the Company and its affiliated companies from the change in essential policy in financial standard as per International Financial Reporting Standard, in order to be well prepared for an adjustment of present Thailand financial standard to international financial standard which will be enforced in 2011

2.

Review to ensure suitable and efficient internal control system for the company To review to ensure suitable and efficient internal control system in jointly with outsourced the auditor, such as, report on internal control efficiency assessment for 2011 and consider audit plan including to acknowledge result of audit and suggestion of internal control department by proposing to the management of the company to consider, improve and correct as deemed appropriate as the case may be including to continuously follow such improvement.

3.

Review the sufficiency of Risk Management System of the company To acknowledge and review risk management of the company in several aspects, financial risk management, risk management occurred from operation of current business including risk management for investment plan, etc. to ensure that risk management of the company is at acceptable level.

4.

Review the company to comply with related laws To acknowledge the compliance with related laws, e.g. Securities and Exchange Act, Notification of Security and Exchange Commission, notification of Securities Exchange of Thailand. 4


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

5.

Consider, select, propose for appointment and determine remuneration for the auditor The Audit Committee had, in the Meeting, considered, selected and proposed to the Board of Directors for consideration and further propose to the next Annual Shareholders’ Ordinary Meeting for 2012. In this regard, Mr. Prawit Viwanthananut, Certified Public Account No. 4917 or Mr. Bunjong Pichayaprasat, Certified Public Account No. 7147 or Mr. Therdthong Thepmangkorn, Certified Public Account No. 3787 or Mr. Udom Thanuratapong, Certified Public Account No. 8501 or other auditors of ANS Audit Co., Ltd. was appointed as the auditors of the company and proposed the remuneration for the audition for 2012.

6.

Consider the disclosure of related item and conflicted item Consider related items of related company and/or person which may be conflicted as disclosure by the auditor in consolidated financial statement and opined that the inter-transaction of related company or previously related company was continuously decreased from the preceding year of which those inter-transaction were general trading in the past. For inter-transaction incurred between the group of companies and director were still in accordance of contract and agreement. Loan was acquired to support financial fluency without interest. The Audit Committee opined that the company has prepared financial statements according to the generally certified principles, having sufficient internal control system suitable to business operation, risk management at acceptable level and good governance system.

___________________________ (Mr. Vacharin Duangdara) Chairman of the Audit Committee

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

General Information

Securities Registrar Company Address

: :

Telephone Facsimile

: :

Thailand Securities Depository Company Limited The Stock Exchange of Thailand Building, 62 Rachadapisek Road, Klongtoey, Bangkok 10110 0-2229-2800, 0-2654-5599 0-2359-1259

Auditor Auditor Certified Public Accountant No. Company Name Telephone Facsimile

: .: : : :

Mr. Prawit Viwanthananut 4917 ANS Audits Company Limited 0-2645-0109 0-2645-0110

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Corporate Information Company Name Business Type

: Chu Kai Public Company Limited (“CRANE”) : To act as the exclusive distributor for brand new cranes brand ZOOMLION from People’s Republic of China in Thailand. : To sell and repair used heavy machine for construction work : To provide service for lifting, assembling and installing of machine and large material or equipment for construction by using crane, forklift, top loader and other machines including also transportation service by, prime mover, semi-trailers and other types of trucks.

Location

: 42/62 Moo 14 Soi Chanyawat 5, Bangna-Trad Road Km. 7, Bangkaew, Bangplee, Samutprakarn 10540

Subsidiary Companies

: The Crane Services Co., Ltd (“TCS”) 42/51 Moo 14 Bangna-Trad Rd., Bangkaew, Bangplee, Samutprakarn 10540 The Crane Laem Chabang Co., Ltd. (“TCL”) 195/95 Moo 5 Nongkham, Sriracha, Chonburi 20230 The Crane Rayong Co., Ltd. (“TCR”) 4/2 Moo 4 Nikom Pattana, Ampur Nikom Pattana, Rayong 21180 The Crane Heavy Lift Co., Ltd. (“TCH”) 68/55 Moo 10 Phaholyothin Rd., Khongnueng, Klongloung, Patumthani 12120 : www.chukai.co.th : 0107548000412 : 0-2715-0000, 0-2316-2873-7 : 0-2316-6574, 0-2316-6637 : 450,000,000 Baht : 450,000,000 Baht

Website Company Registration Telephone Facsimile Registered Capital Paid-Up Capital

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Company Background Group of the Companies has been set up by Mr. Thongchai Praerangsi in 1990 in order to provide rental services of cranes, forklifts and other construction machinery for lifting, assembling and installing large and heavy objects as well as sale of machinery under The Crane Services Co., Ltd. (“TCS”). After the industry-expansion, Mr. Thongchai Praerangsi has set up The Crane Laem Chabang Co., Ltd. (“TCL”), The Crane Rayong Co., Ltd. (“TCR”) and The Crane Heavy Lift Co., Ltd. (“TCH”). In 1997, Mr. Thongchai Praerangsi has set up Chu Kai Co., Ltd. in order to import used cranes and parts from aboard for sell including repair services. There was group restructure in 2004, which CRANE has invested in TCL, TCR, and TCH for 99.99 percent each. CRANE also has invested in TCS for 99.99 percent in 2006. After all the group restructure, CRANE is mainly operated in sell and provide repair services for cranes while its subsidiaries only provide rental service. The details in each significant process are as of the following; 1990

TCS has been established with paid-up capital of Baht 2.00 million to engage with the rental services of cranes, forklifts and transportation services as well as sale of machinery. TCS was located on BangnaTrad Road Km. 3.

1991

TCS increased the paid-up capital to Baht 20.00 million for the business expansion.

1992

TCL has been established with paid-up capital of Baht 2.00 million to provide rental services of cranes, forklifts and transportation services as well as sale of machinery around Laem Chabang Seaport in Chonburi Province.

1994

TCR has been established with paid-up capital of Baht 2.00 million to provide rental services of cranes, forklifts and transportation services as well as sale of machinery around Mapthaphut Industrial Estate in Rayong Province.

1996

TCH has been established with paid-up capital of Baht 10.00 million to provide rental services of cranes, forklifts and transportation services as well as sale of machinery around Pathumthani, Ayudthaya, Saraburi and other Southern provinces.

26 May 1997

In order to separate selling, repairing, and machinery rental services, CRANE has been established with paid-up capital of Baht 1.00 million on Bangna-Trad Road Km. 7 to import from overseas or purchase domestically used cranes and resell to its subsidiaries (TCS, TCL, TCR, and TCH) and other clients. CRANE shall repair and modify the used cranes before reselling to the customers. Moreover, CRANE was the hub of the repair services of used cranes and the sales of spare parts to its subsidiaries (TCS, TCL, TCR and TCH) and other clients. Its subsidiaries shall mainly provide machinery rental services for lifting, assembling and installing as well as transportation services only.

1999

CRANE has increase its paid-up capital from Baht 1.00 million to Baht 50.00 million by issued new common shares to the existing shareholders.

2000

TCS had financial problem and got into debt restructuring process with 5 debtors. TCS has total restructuring debt of Baht 950,234,872.49 (Principal of Baht 607,359,056.88 and Accrued interest of Baht 342,875,815.61) 8


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

December 2001

CRANE imported 410-ton-used-crane.

30 October 2002

CRANE has increased its paid-up capital from Baht 50.00 million to Baht 100.00 million.

1 May 2004

CRANE has invested in TCL, TCR, and TCH at the proportion of 99.99 percent each by purchasing shares from Mr. Thongchai Praerangsi’s group at par value.

8 November 2004

CRANE has increased its paid-up capital from Baht 100.00 million to Baht 200.00 million.

November 2004

CRANE imported 600-ton-used-crane with supplementary. The 600-ton-crane is the most capable crane in Thailand with highest lifting capacity at that time.

8 June 2005

CRANE has transformed into Public Company Limited

July 2005

CRANE imported brand new truck crane to support its expansion, which need high quality machinery and high service standard.

1 October 2006

CRANE has invested in TCS at the proportion of 99.99 percent by purchasing shares form Mr. Thongchai Praerangsi’s group at par value.

21 November 2006 CRANE increased its investment in TCL, TCR, and TCH by cash for Baht 15.00 million each. 23 November 2006 CRANE has been granted the loan in the amount of Baht 280.00 million to purchase land on BangnaTrad Km. 22 for 34-1-41 Rais from Today Transport Co., Ltd. (“TDT”) for its future expansion. This loan is used for debt restructuring between TCS and TDT as well. 30 November 2006 CRANE has increase its paid-up capital from Baht 200.00 million to Baht 350.00 million by offer to private placement for 50.00 million shares (par value of Baht 1.00 per share) at the price of Baht 2.00 per share, and offer to Mr. Thongchai Praerangsi for 100 million shares (par value of Baht 1.00 per share) at the price of Baht 1.00 per share. The proceed has been used for working capital and invested in TCS at the proportion of 99.99 percent. 19 March 2007

CRANE has increase its registered capital to Baht 450.00 million (450,000,000 share at the par value of Baht 1.00 per share) for initial public offering to be listed in MAI.

13 February 2008

CRANE was approved for Initial Public Offering (IPO) and was a listed company in the Market for Alternative Investment (mai)

1 July 2010

The company was appointed as distributor for ZOOMLION CRANE from ZOOMLION HEAVY INDUSTRY SCIENCE AND TECHNOLOGY DEVELOPMENT CO., LTD. , the top leading crane manufacturing company from People’s Republic of China.

1 February 2011

The company was appointed as exclusive distributor in Thailand for cranes from such company. 9


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Business Operation Type of Business and Nature of Operation The Company and its subsidiaries (The Crane Services Co., Ltd. (“TCS”), The Crane Laem Chabang Co., Ltd. “(TCL”), The Crane Rayong Co., Ltd. (“TCR”), and The Crane Heavy Lift Co., Ltd. (“TCH”) have provided services in lifting, assembling and installing large equipment, heavy machinery and objects in industrial and construction by cranes, forklifts and other machinery. The company imported new heavy machine and good condition used heavy machine from abroad in order to improve and repair to be in better conditions and also engaged in the business of selling reconditioned crane and repairing crane for general customers as classified by type of business services into 2 groups, as follows:4.1 Selling heavy machine as operated by the company is classified into:4.1.1 Selling of new heavy machine in the type of crane, of ZOOMLION BRAND from People’s Republic of China as the company was appointed as the exclusive distributor in Thailand. 4.1.2 Selling reconditioned heavy machine in case of the customer required to purchase the machine due to long term continuous use, of which, investment to purchase and hold ownership thereof would be more worth than renting. In addition, the company also provided service to sell the machines. 4.2 Service business is classified as:4.2.1 Service to move, lift, assemble and install machine, large material or equipment by using crane, forklift, top loader and other machines including transportation service by prime mover and semi-trailer or several types of trucks both on project lump sum basis or monthly service or daily service. These businesses were operated by 4 affiliated companies, e.g. TCR, TCL, TCH and TCS whereby all those companies had heavy machines to support the customers’ demands, as classified into 3 major types, as follows:4.2.1.1 Crane, the heavy machine used in construction of large and small industrial sector and both for private sector and projects of the government sectors including the business of port, refinery plant, power plant and petrochemical industry by mean of lifting, assembling or installing machine of large size, high and heavy article and small but high article including general articles. Most crane of the company was the used cranes in good conditions imported from Japan, i.e. KATO, TADANO, P&H, KOBELCO, SUMITOMI, IHI, HITACHI while cranes imported from Germany and Holland were DEMAG, GOTTWALD, LIEBHERR, etc 4.2.1.2 Forklift was mediums size machine used to lift the products at industrial factories and in the port to lift, move the imported or exported products. Most forklift of the company was in good conditions imported from Japan, such as, TOYOTA, KOMATSU, MITSUBISHI, TCM and PPM, BOSS, HYSTER and YALE from Europe and America. 4.2.1.3 The fleets specially used for transportation purpose, i.e. PRIME MOVER, FLAT BED AND LOW BED TRAILER. Those fleets were mainly used to transport machines of the company to the customer’s premise. 4.2.2 Service to repair and sell spare parts, service providing to the minor companies and general customers whereby the company potentiality is based on full equipped factory and lot of skilled and high experience mechanics. Moreover, the company could support almost all kinds of spare parts both within and outside the country by emphasizing on repair work for group of companies and for customer who purchased the machine from the company. 10


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Main Operation Process Import from Overseas (brand new machine)

Import from Overseas/Purchase from Local Suppliers (used machine)

Maintenance or Overhaul Operated by CRANE Modified Machinery

Sale to Customers

Sale or Rent out to Subsidiaries

Project Rental Term

Monthly Rental Term

Daily Rental Term

Operated by Subsidiaries (TCS, TCL, TCR, TCH)

The Company procures heavy machinery for its operation by importing . New machines brand ZOOMLION from People’s Republic of China and used good machine from reliable suppliers, mainly from Japan. After inspection and selection by our personnel, following this mechanical inspection the machine is selected for purchase and imported into Thailand, where repairs, modifications and/or overhaul are made where necessary prior to the machinery item being sold on to customers or incorporated into the subsidiaries rental fleet. Our Vision To be the leading logistic service operator on lifting and transporting machinery and equipment in Southeast Asia with highest standard of services and readiness for the maximum benefit and satisfaction of our customers. Our Mission To raise up and strongly hold our standard of Services Quality on lifting and transporting machinery and equipment up to the Global Operating Standards. Chu Kai Public Company Limited will provide the best services to our customers with excellent understanding, security and value for money throughout the region and worldwide.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Business Goal To raise up and strongly hold our service and quality standards of lifting, assembling, and installing of huge equipment for construction businesses using cranes, forklifts, container handlers and other construction machinery, as well as transport services using transportation machinery and equipment to reach the same standard as Global Operating Standards in order to widen our chances to compete in this business line and expand our services internationally under the Turn Key service strategies. Services and Distribution Channel Our service shall provide to both sub contractors and direct end users in the proportion of 80 and 20 percent of rental and transportation service respectively. Revenue Structure Type of Products

Operated by

2009 MB Percent

2010 MB Percent

2011 MB Percent

310.54

49.67

390.46

40.64

32.24

5.16

44.17

4.60

31.26 194.56 32.92

5.00 31.12 5.27

393.05 96.26 32.46

40.91 10.02 3.38

23.70

3.79

4.37

0.45

625.22 100.00

960.77

100.00

Rental and Transportation Services Rental Service Transportation Service Selling of new heavy machinery Sell Modified machinery Machinery repaired and parts sold Other Income Total

TCS, TCL, 298.99 59.29 TCR, TCH TCS, TCL, 22.82 4.53 TCR, TCH CRANE CRANE 126.59 25.10 CRANE 23.89 4.74 CRANE, TCS, 32.00 6.35 TCL, TCR, TCH 504.29 100.00

Remarks : Proportion of revenue from Rental and Transportation Services and Sell modified machinery shall vary according to industry situation and rivalry during each period. Main Customers The Company main customers can be divided into three main groups as of the following; 1. Factory industry (accounted for 47.00 percent of total customers) such as refinery plants, petrochemical plants, power plants, hot-rolled mills, and cold-rolled mills. 2. Construction industry (accounted for 47.00 percent of total customers) such as construction of infrastructure, foundation, factory building, Government’s projects as well as machinery and related systems installation from those constructions. 3. Import – Export Industry (accounted for 6.00 percent of total customers) such as sea ports area, warehouse and container depots. 12


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Machinery Acquisition Machinery acquisition of The Company mainly acquires from used machine. The Company imports these used machinery by average 70 percent from Japan, German, the Netherlands and England; the remaining portion is purchased within Thailand from auction companies and end users. However, if there is shortage of used machinery, The Company may purchase brand new machinery. Industrial Situation and Competition 1. Competitiveness in factory industry is considered low. Although there are a number of small and medium size companies in the rental services market; but only a few companies are capable to provide lifting, assembling and installing services for valuable and complicated equipment that required high standard of safety system of operation. The company values the need and expectation of customers and is continually selected to serve customers in this industry. 2. Competitiveness in installing and transportation for construction industry is moderate. Most of project in this construction industry is long-term project that required continually supply of machinery on rental basis. There are only a few machinery rental suppliers who have sufficient machinery to supply for this kind of project. 3. Competitiveness in Import – Export industry is low. There are high demands in this industry while the supply is quite low. Most of container depots have some limited circumstance in their daily business operations, for example required stand by and maintenance period of their machines as well as number and availability of machinery for continually operation. In order to reduce their cost of machinery investment, and cost of related operations, most of container depots and customer in import and export industry decided to rent container handlers from outsource. The company is the leading supplier in rental services of container handlers with high experience of operators, mechanics and related personnel available immediately whenever required by customers. Future operating projects To support the expansion of the company in the future and to reduce limit in providing additional space in current premise of the company on Bangna-Trad Road KM., the company has project to move new premise to Bangna-Trad Road KM. 22 because in addition to more than 34 rais are which is sufficient to support company expansion in long term, such location is also potential in marketing and operation. In addition, the land of The Crane Heavy Lift Co., Ltd. (“TCH”) of current office on Phaholyothin Road is under the legal dispute, on 6 October 2008, TCH had issued letter to the trustee to know the date of auction sale and presently is under the action of the trustee and still unknown the auction date in order to purchase such plot of land. Should TCH is unable to negotiate to purchase such plot of land from the creditor, TCH has policy to move office from Phaholyothin Road to Bangna-Trad Road KM. 7 or KM. 22 , as more described in clause 5: Risk factors. in the Board of Directors’ Meeting No. 8/2554 on 28 December 2011, the company had been approved to move TCH to the company on Bangna-Trad Road, KM.7, within 16 February 2012

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Risk Factor The Company has risk under business operation as of the following;

1.

2.

3.

4.

Risk from relying on the specialist: Since the company was not engage only in the business of selling new heavy machine, ZOOMLION Brand from People’s Republic of China. used heavy machines but also being minor company to provide logistic services by using cranes, forklifts, etc., including to provide logistic services by using trailers and trucks which required special knowledge and skill. The company was thus necessary to rely on personnel who were knowledgeable and expert in technical aspect, such as, overhaul of machine to be in good and perfect conditions readily for use, quick and safety transport of material or equipment at high efficiency, etc. This had caused the company to rely on those personnel, such as, mechanic, engineer, operator, etc. The company therefore emphasized to retain those group of employees to work with the company for long term by providing good welfare and compensation and sent them to attend training course to enhance their working skill in order to motivate them to work with the company for long time. The company expected that such policy would be able to retain the company’s personnel. In addition, the company also developed personnel in substitute of skillful personnel by mean of on the job training to enhance working experience in each field. Risk regarding to the operation life of used cranes : Most of the Company cranes is used cranes with average of useful life between 5 to 19 years so there shall have risk regarding to the condition of cranes. There is more chance of the malfunction of used cranes is higher than the brand new cranes. To minimize the risk, CRANE has purchased only used cranes from well-known distributors as well as set up a preventive maintenance by high experienced technicians and skillful personnel in order to maintain all cranes in good conditions and extend their operation life. Risk regarding to exchange rate : Almost acquired New heavy machine and used cranes are imported from overseas; therefore the payment shall be made regarding to seller’s currency which is three main currencies (Japanese Yen , EURO Dollars and United States Dollar) under the L/C term. CRANE has risk in variable cost of cranes if the exchange rate on contract date and the payment date are different. As of which on 31 December 2011 the company held liability approx. Yen 0.43 Million and US$8.72 Million and SGD 0.02 Million respectively. Risk regarding to lawsuit : Under the Company’s normal business operation, CRANE and its subsidiaries shall expose to risk from lawsuit such as risk regarding to loan guarantee for clients, risk from delay registration, or risk from accident claim suit. As at 31 December 2011, the company and affiliates were sued against business operation in 2 cases, valued approx. Baht 67.86 millionwhich all the provision has been booked. In order to reduce risk from the accident, CRANE and its subsidiaries have set up the policy 14


CHU KAI PUBLIC COMPANY LIMITED

5.

ANNUAL REPORT 2011

in not conducting buyback guarantee, inform registration transfer restriction, and safety standard in every step including buying insurances for every project. Risk regarding lawsuit of TCH’s operation land : The current TCH’s operation land has been rent from Mr. Thongchai Praerangsi, TCH’s director, and is under the lawsuit. The owner of the land has been bankrupt and the land is under the property of state department. TCH has been asked to leave and pay the rent to the concerned state department. TCH has risk of moving out of the land and paying the accrued rent in the amount of Baht 13.60 million. TCH has submitted the petition to the government officer. In order to reduce risk from the lawsuit, TCH has booked the provision and cease the rental payment to Mr. Thongchai. Moreover, TCH has policy to buy the land from the debtors. If TCH could not buy the land, TCH shall move its office to CRANE’s existing office either on Bangna-Trad Road Km. 7 or Km. 22.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Major Shareholders Major shareholders as stated on the shareholder’s book on 5th March 2012 are as follows; Name

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20.

Number of Shares

Mr. Thongchai Praerangsi’s Group 1 Mr. Sorat Wanichwarakij Mr. Chairat Kowitmongkhol Mrs. Sirirat Jarusombuti Mr. Narathon Eurfur Miss Kanit Limpisuk Miss Kwanjai Moahprasit Miss Kaewjai Limpisuk Miss Jureeyaporn Sae-Kow Thai NVDR Co., Ltd. Mr. Suthat Hiranyaphinan Mr. Krit Siwakritkul Mr. Pornthep Manosapsak Mrs. Papawee Thianwutthinan Mr. Sunthorn Pattanatrakool Mr. Somchai Wachirasakulchai Miss Daret Khomkham Mr. Wirat Pataramethakul Mr. Thanawachara Wachirasakulchai Others (411 persons) with share less than 0.42 percent

Total Remarks :

Mr. Thongchai Praerangsi’s group is included of Mr. Thongchai Praerangsi Ms. Junjira Praerangsi Ms. Jiraluck Praerangsi Ms. Nateeporn Duangsawasdi Ms. Wanida Darachai Ms. Jiraporn Praerangsi Ms. Janejira Praerangsi

295,050,000 40,073,600 11,490,000 9,400,000 7,352,300 7,306,700 5,365,300 5,136,700 4,505,000 4,462,700 3,363,200 2,651,500 2,539,700 2,517,700 2,440,200 2,340,000 2,040,000 2,000,000 1,900,000 38,065,400 450,000,000 155,050,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000 20,000,000

% 65.57 8.91 2.55 2.09 1.64 1.62 1.19 1.14 1.00 0.99 0.75 0.59 0.56 0.56 0.54 0.52 0.45 0.45 0.42 8.46 100.00

Shares Shares Shares Shares Shares Shares Shares

Mr.Wanchana Praerangsi 20,000,000 Shares Each major shareholder above is not related person as defined by section 258, and is not a shareholder under the same controlling person.

16


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Organization Chart CHU KAI PUBLIC COMPANY LIMITED

17


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Management Structure The Company’s boards and committees can be divided into 4 boards as of the following; 1. Board of Director 2. Audit Committee 3. Executive Board 4. Management Board of Directors Board of Directors in regard to the Memorandum of Affidavit on 10 February 2012 is consisted of : No. Name Position 1. Assist.Prof.Dr.Piboon Limprapat Chairman of the Board of Directors / Independent Director 2. Mr. Somsak Sivapaiboon Deputy Chairman of the Board of Directors 3. Mr. Thongchai Prarangsi Directors 4. Mr. Chamnan Ngampojanavong Director 5. Ms.Nateeporn Duangsawasdi Director 6. Ms. Wanida Darachai Director / Company’s Secretary 7. Ms. Jiraluck Praerangsi Director 8. Mr. Vacharin Duangdara Chairman of the Audit Committee / Independent Director 9. Mr.Surin Premamornkit Audit Committee / Independent Director 10. Mr. Jessada Promjart Audit Committee / Independent Director 11. Mrs. Werawan Boonkwan Audit Committee / Independent Director Authorized Directors Authorized Directors of the Company are Mr. Thongchai Praerangsi or Ms. Nateeporn Duangsawasdi co-signs with Ms. Wanida Darachai or Ms. Jiraluck Praerangsi with the Company’s seal. Authorized of the Company’s Board of Directors The Board of Directors have set powers, duties, and responsibilities to manage the business of the Company to comply with the law and the Company’s objectives, Articles of Association as well as the resolution of the shareholders’ meeting. However, the Board of Directors may authorize any other directors or other persons to perform any action on behalf of the Board of Directors’ Powers, Duties, and Responsibilities.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Power, Duties, and Responsibilities of the Board of Directors 1) To manage, control, and supervise on the Company’s business according to law, its objectives, Article of Association, rules and regulations as well as shareholders’ meeting resolution. 2) 3) 4) 5) 6) 7) 8) 9) 10) 11)

To determine the main policies such as financial policy, fund raising policy, cash management policy, accounting policy, inventory management policy, and risk management policy. To determine the Company’s rules and regulations. To approve the annual budget or the additional budget, revise investment budget, make use of the budget, and supervise the project as plan. To monitor the business of the Company to ensure that targets will be achieved or overachieved, and amend if there is any problem. To approve for making loan or obtain any credit facilities for normal business operation, including collateral or loan repayment for normal business operation under any balance according to authorized manual. To review the organization chart and authorized structure including human resource plan, acquiring plan, training plan, hiring plan, and terminate plan. To determine the remuneration policy regarding to experience, traditional, and laws. To arrange for the preparation and submission of the general information and the audited financial statement at the end of each accounting period to the shareholders’ meeting for its consideration and approval. To acknowledge of any important audited report and determine the policy to amend the fallacy. To review the sufficiency of its internal control and risk management.

The Audit Committee The Extraordinary General Shareholders’ Meeting number 2 / 2006 on August 25th, 2006, the Board of Directors’ Meeting number 19 / 2006 on December 8th, 2006 and the Board of Directors’ Meeting number 3/2008 on March 27th, 2008 and the Board of Directors’ Meeting number 5/2009 on June 26th have been appointed three Audit Committee as of the following; No. Name Position 1. Mr. Vacharin Duangdara Chairman of the Audit Committee / Independent Director 2. Mr. Surin Premamornkit* Audit Committee / Independent Director 3. Mr. Jessada Promjart* Audit Committee / Independent Director 4. Mrs. Werawan Boonkwan* Audit Committee / Independent Director * He is with knowledge, expertise and experience in finance and accounting. Having Ms Chittra Thongsamut, The Internal Audit Manager as a secretary

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Powers, Duties, and Responsibilities of Audit Committee Audit Committee has duties and responsibilities regarding to rules and regulation of The Securities and Exchange Commission and The Stock Exchange of Thailand, and shall directly report to the Board of Directors. Audit Committee’s powers, duties, and responsibilities are 1) To review for the accuracy and adequate disclosure of the Company’s financial statement. 2) To ensure that the Company maintains an appropriate and efficient of internal audit and internal control system, review the independency of internal audit department, and responsible for appointing, transferring, and terminating of internal audit manager. 3) To ensure that the Company complies with the Securities and Exchange Act, regulations of the Stock Exchange of Thailand, or other relevant laws related to the Company. 4) To select and propose for the appointment of the auditor and considering auditor’s remuneration, and attend the meeting with external auditor without any of the management at least once a year. 5) To approve that the related transactions or transactions which could create a conflict of interest regarding to regulations of the Stock Exchange of Thailand are reasonable and for the Company’s best interest. 6) To prepare and disclose Audit Committee’s activities Report in the Company annual report as of the following; a) To opine of the accuracy and adequate disclosure of the Company’s financial statement. b) To opine of the adequate of the Company’s internal control system. c) To opine that the Company complies with the Securities and Exchange Act, regulations of the Stock Exchange of Thailand, or other relevant laws related to the Company. d) To opine of the appropriateness of the external auditor. e) To opine on the transactions that could create a conflict of interest. f) The number of the audit committee’s meeting and the attendant of each audit committee. g) Opinion or notice of the audit committee h) Other issues that shareholders or investors should be disclosed under the duties and responsibilities received from the Board of Directors. 7) To perform any other tasks delegated by the Board of Directors and approved by the Audit Committee.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Executive Board The Board of Directors’ Meeting No. 4/2554 on 29 June 2011 had resolved to appoint the Executive Board of the company total 7 persons as follows:No. 1. 2. 3. 4. 5. 6. 7.

Name Mr. Thongchai Praerangsi Mr. Chamnan Ngampojanavong Ms. Nateeporn Duangsawasdi Ms. Wanida Darachai Ms. Jiraluck Praerangsi Ms. Junjira Praerangsi Ms. Jiraporn Praerangsi

Position Executive Chaiman Executive Vice Chairman Executive Director Executive Director Executive Director Executive Director Executive Director

Powers, Duties, and Responsibilities of Executive Management Executive Board is responsible for reviewing and submitting the conclusion report to the Board of Directors especially policy details to synchronize with the main policy including the comment and recommendation to Chief Executive Officer in order to manage regarding to main policy or any other duties assigned from Board of Directors. Powers, Duties, and Responsibilities of Executive Board are; 1) To determine policies, plans, strategies, and overall management for the Company’s operation in accordance to policies, economics, and competitiveness as presenting to shareholders and proposed to the Board of Directors for approval. 2) To determine business plans, budgets, and authorized power of the Company in order to be approved by the Board of Directors. 3) To determine the organization chart and authorized structure including human resource plan, acquiring plan, training plan, hiring plan, and terminating plan. 4) To examine and monitor the business policies for the effectiveness of business operation. 5) To examine and monitor the Company’s performance in accordance with approved business plans. 6) To approve the transaction with financial institution such as opening bank accounts, making loan, collateral, or other transaction including buying or selling any land for normal business operation under any balance according to authorized manual. 7) To manage any other delegate tasks from Board of Directors. The approval of transactions and the assigned authorities of Executive Board will not include to any transaction which cause possible conflict of interest between Executive Board or related persons (as defined by the Securities and Exchange Commission and the Stock Exchange of Thailand) and the Company and its subsidiaries. Furthermore, in case of transaction concerning to the related transaction must be approved by Board of Directors’ meeting and the related persons have no rights to vote in that agenda. 21


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Management The Company has nine management as of the following; No. 1.

2. 3. 4. 5.

Name Mr. Thongchai Praerangsi Mr. Chamnan Ngampojanavong Ms. Wanida Darachai Ms. Jiraluck Praerangsi Ms. Kuneeon Klakarnkai

Position Chief Executive Officer / Acting Chief Operating Officer for Marketing and Engineering / Acting Executive Vice President for business management of affiliated companies Chief Financial Officer for Financial and Organization Support Executive Vice President for Organization Support Executive Vice President – Finance and Accounting / Acting Financial Manager Accounting Manager

Powers, Duties, and Responsibilities of Chief Executive Officer 1) To make decision on the important matters. To establish missions, purposes, directions, and policies in doing business. To supervise and control the whole business operations, customers’ relationship, and take responsibility to the Board of Directors. 2) To hire, appoint, and reshuffle all the employees as necessary and appropriated. To determine remuneration and terminate all the employees as appropriated. 3) To act as the Company’s representative and authorized person to public concerning related business operation and beneficial to the Company. 4) To determine the credit term such as credit balance, term payment, buying and selling agreement, rental agreement, leasing agreement, and amend the credit term. 5) To approve any accrued expenses and advance payment according to company’s authorization manual. 6) To review the fund raising of the Company and propose to the Board of Directors. 7) To appointed any necessary advisory services. 8) To manage any related normal business operation of the Company. 9) To approve department operation plans and approve the request from any department. 10) To delegate any important and necessary operation under Chief Executive Offer’s consideration in accordance with laws and the Company’s regulations. 11) To manage any operations appointed by the Board of Directors.

22


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

The approval of transactions and the assigned authorities of Chief Executive Officer will not be made to any transaction which cause possible conflict of interest between Chief Executive Officer or related persons (as defined by the Securities and Exchange Commission and the Stock Exchange of Thailand) to the Company and its subsidiaries. Furthermore, in case of transaction concerning to the related transaction must be approved by Board of Directors’ meeting and the related persons have no rights to vote in that agenda. Moreover, in the case of transaction concerning to the related transaction or transaction about acquiring or disposal of assets of the Company and its subsidiaries as defined by the Stock Exchange of Thailand, this kind of transaction must be approved by shareholders’ meeting and/or any other treatment about criteria and process related to the transaction in complying with the Stock Exchange of Thailand rules and regulations. Selection of Board Members and Executives Currently, the Company does not have the Nomination Committee. Potential candidate or person proposed by shareholders shall be considered from experience, knowledge, capability, and qualification set by laws. The Board of Directors shall propose the potential candidates to Shareholders’ meeting for approval. For Audit Committee and Independent Directors shall be considered from experience, knowledge, capability, and qualification set by laws in regarding to the Independent Directors under the Securities and Exchange Commission regulations Re: Application for and Approval of Offer for Sale of Newly Issued Shares. The Audit Committee shall be selected from proposed list by shareholders and approved by shareholders’ meeting afterwards. For Management, Board of Directors shall select from specialist in each branch such as marketing, accounting, financing and etc. In selecting the Board of Directors as set in the Article of Association can be summarized as follows; 1) Board of Directors consists of five directors, half of which shall live in Thailand. Directors shall have qualifications as set by laws 2) The Company’s directors will be approved by Shareholders’ meeting under the methods as follows; (a) A shareholder shall have one vote per share for each share held. (b) In selecting Company’s Directors, voting by each shareholder can use all the voting rights to vote for each person. (c) The Directors’ selection vote shall be decided on the basis of the majority of the vote cast. In case of a tie of votes, the chairman presiding over the meeting shall have the casting vote. 3) In Annual General Shareholders’ Meeting, the directors shall be terminated by one third of total number of directors. If the number of directors can not be divided by three, the closet number shall be used. The terminated directors can be selected to be directors afterwards.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Besides the Selection of Board Members, the Company has set the three Independent Directors with the qualification and selection as follows; 1) Independent Directors shall not hold more than 5 percent of voting shares in the Company. 2) Independent Directors shall not involve in management and be the Company’s employee or advisor who receives monthly remuneration and shall not have power to control the Company, its subsidiaries, and its associated as well as persons who may create a conflict of interest, in the sense that it may obstruct at least one year prior to be appointed as Independent Director. 3) Independent Directors must not be directly or indirectly related to the Company, its subsidiaries, and its associates, or major shareholders, or conflict of interest persons, in the sense that it may obstruct independent assessment at least one year prior to be appointed as Independent Director. 4) Independent Directors is not a close relative with Management, major shareholders of the Company, its subsidiaries, and its associates or conflict of interest persons and is not represent any directors, managements, or major shareholders’ interest. 5) Independent Director has knowledge, experienced and provided independent opinion without the controlling of any persons. Directors and Management’s Remuneration Directors’ remuneration: The company considered remuneration for the director and management by considering the suitability and responsibility of the director, management, environment, economic situation and comparison with other companies in the same industrial business including comparison with other company who earned similar or nearly income and net profit. Remuneration of Board of Directors and Sub-Committee was already approved by the Annual General Meeting of Shareholders. Board of Directors’remuneration: The Annual General Meeting of Shareholders No. 1/2011 held on Thursday 27 April, 2011 was unanimously approved directors’ remuneration as follows;

• • • • • •

Monthly Remuneration for each position; Chairman of the Board of Directors at Baht 40,000.00. Deputy Chairman of the Board of Directors and Chairman of the Audit Committee at Baht 30,000.00 each. Independent Director and Director at Baht 20,000.00 each. Meeting Allowance for each director per each attendance; Chairman of the Board of Directors at Baht 12,000.00 Deputy Chairman of the Board of Directors, Chairman of the Audit Committee and Director at Baht 10,000.00 each Directors’ Bonus Upon dividend payment to the shareholders, bonus will be paid to the directors in all positions at 1 time of meeting allowance of the Board of Directors’ Meeting which each director is paid each year. 24


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Approved total payment for Directors’ remuneration at not over Baht 4.0 Million. Any director who takes more than one position will receive monthly remuneration and meeting allowance for only of his higher position. Meeting allowance will be paid only to those who attend the meeting. Remuneration for the management was in accordance with principles and policies determined by the Board of Directors based on business operating result of the company and performance of each management. Remuneration for director and executive Financial remuneration Board of Directors Directors Executive Directors and Management Remarks :

persons 11

2010 Amount (Baht) 2,991,000.00

persons 11

2011 Amount (Baht) 3,922,000.00

8

15,371,441.17

10

19,082,601.35

Type Meeting Allowance and monthly emuneration Salaries, Bonus, and Allowance

1. Ms. Junjira Praerangsi and Ms. Jiraporn Praerangsi, were appointed by the Board of Directors No. 4/2554 on 29 June 2011 to assume the position of Executive Director and calculated their remuneration since 1 July 2011. 2. Ms. Pattaninthorn Hlorjitsiang, was early retired and resigned as effect on 1 November 2011. 3. Ms. Chittra Thongsamut was appointed to assume the position of Senior Internal Audit Manager as effect on 7 December 2011 and her remuneration was calculated until 6 December 20

Remuneration for individual director1

unit : Baht 2010

No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Meeting Allowancec and Monthly Remuneration

Name Assist.Prof.Dr.Piboon Limprapat 2 Mr. Somsak Sivapaiboon

Meeting Allowancec and Monthly Remuneration

576,000 430,000 50,000 70,000 70,000 70,000 45,000 520,000 400,000 400,000 360,000 2,991,000

Mr. Thongchai Praerangsi Mr. Chamnan Ngampojanavong Ms. Nateeporn Duangsawasdi Ms. Wanida Darachai Ms. Jiraluck Praerangsi Mr. Vacharin Duangdara Mr.Surin Premamornkit 4 Mrs. Werawan Boonkwan Mr. Jessada Promjart

รวม Remark

2011

:Directors’ rems consisted of meeting allowance and monthly renuneration

25

576,000 440,000 80,000 80,000 80,000 80,000 70,000 480,000 400,000 400,000 380,000 3,066,000.00

Directors Bonus

96,000 80,000 80,000 80,000 80,000 80,000 70,000 60,000 80,000 80,000 70,000 856,000.00


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Other Benefits Other remuneration 8 units cars for directors and management with the fuel of 360 liters per person per month. The Company sets up provident fund for its employees on April 27th, 2007 through BT Asset Management Co., Ltd. The employees pay 2.00 percent of their salary for the provident fund and the Company pays 2.50 percent of employee’s salary to the provident fund.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Corporate Governance The Board of Directors jointly determined corporate governance guidelines according to the principles of Good Corporate Governance prescribed by SET as its important contents are summarized as follows:-

1.

Right of the shareholders

The company realized to the proprietary right to control the company through the appointment of Board of Directors to act on behalf of the shareholders and entitled to make decision related all important changes of the company. The Board of Directors therefore promoted the shareholders to exercise their rights according to the initial rights of the shareholders, namely, to purchase, sell or transfer share, and to receive profit sharing, to receive sufficient data and information about business and to know rules and procedures to attend the Meeting and to obtain data sufficiently for consideration in each agenda before the Meeting including also to have opportunity to inquire any question in the Meeting. In addition, the company also realized to the importance of right of all shareholders and would not conduct any action which was infringement nor curtailment against the shareholders’ rights. The company thus determined Annual General Meeting of Shareholders within not exceeding 4 months commencing from the end of accounting period, and in case of special agenda was required in the matter impacting benefit of the shareholders related to any laws, mandatory regulations which must be approved by the shareholders, the company may subsequently summon for Extraordinary Shareholders’ Meeting. In Shareholders’ Meeting, the company emphasized on the right of shareholders. The company therefore determined the Meeting day which was not falling on long weekend days, not too early nor too late of the day and at the place of convenience communication. In addition, the company also delivered Invitation Letter which contained details of agendas and comments of the directors to consider reason and necessity of the Meeting, positive and negative impact in each agenda, Power of Attorney in 3 manners as prescribed by law and name list of at least 1 independent director and suggestion for authorization to enable the shareholders to authorize this independent director or other person to attend the Meeting on his/her behalf including also map of meeting place to the shareholders more than 10 days before the date of meeting to fully inform the shareholders and also publicized on newspaper not less than 3 consecutive days at lest 3 days before the Meeting date in order to summon the Shareholders’ Meeting in advance and deliver Invitation Letter via the registrar not less than 21 days before the date of meeting. Shareholder: Right and Equality of Shareholders The Company values and treats all shareholder fairly such as regularly informing the Company’s performance directly to shareholders via the Stock Exchange of Thailand. The company complied with Articles of Association of the Company, namely, to deliver Invitation Letter summoning to attend the Meeting and all information supporting the Meeting according to the agendas to all Shareholders before the Meeting day 7 days in advance, of which, the company had delivered to the shareholders for their consideration more than 10 days in advance and correctly recorded Minutes of Meeting for inspection of the shareholders. In addition, the company had proposed 1 independent director from the shareholders attending the Meeting 27


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

to act as the attorney in case of the shareholder is unable to attend the Meeting. Actually, the company held Ordinary Shareholders’ Meeting once a year. Should there was any important agenda required the Meeting to consider, the company would summon Extraordinary Shareholders’ Meeting to consider and approve onwards. Delivery of Invitation Letter to attend Shareholders’ Meeting In holding the Shareholders’ Meeting , the company has emphasized on the right of shareholders. The company started to deliver Invitation Letter with details of all agendas and comment of the Board, details of the matters to be considered its reason and necessity in each agenda, Power of Attorney and name of at least 1 independent director along with suggestion about authorization to enable the shareholders, at their discretion, to authorize their proxies to attend the Meeting on their behalf including also location map of Meeting place to the Shareholders more than 10 days before the date of the meeting, and publicized on local newspaper not less than 3 consecutive days and before the date of the meeting not less than 3 days in order to summon the Shareholders’ Meeting in advance, and delivered Invitation Letter through the registrar 21 days before the date of the meeting. The Date of Shareholders’ Meeting and Procedures The company had tried to continuously improve the General Shareholders’ Meeting management procedures to become suitable based on the rules to enable all shareholders to know and equally exercise their rights including the right to express their comments and suggestions that benefited the company. In registration to attend the Meeting, the company provided opportunity to the shareholders to register in advance and at least 2 hours before the Meeting and continuously until completion of the Meeting. In addition, the Company also facilitated all convenience to the shareholders by providing sufficient and suitable number of computer and related officer, using barcode in registration processes for convenience of the shareholders and printing of Voting Card in each agenda for the shareholders. The company provided officers to facilitate convenience to the shareholders in obtaining IT message and answer all questions. Moreover, the company also prepared sufficient food and beverage and provided gift that suitable to the attending shareholders. The company proposed that in case of any shareholder was unable to personally attend the Meeting could authorize at least 1 independent director to be a proxy to attend the Annual General Meeting of Shareholders on his behalf. Before commencement of the Meeting, the company had displayed video to introduce the company profile and achievements during the preceding year for acknowledgement of the shareholders before the Meeting. At all commencements of the Meeting, the company security would explain voting method and vote counting by clear demonstrating vote counting and vote conclusion in all processes in the Meeting room. In addition, the company also allowed any shareholder who was unable to attend the Meeting to authorize other person or Chairman of Audit Committee who was an independent director as proxy to attend the Meeting on his behalf. During the Meeting, the company allocated sufficient Meeting time and offer all shareholders equal right to audit operation of the company, to inquire or express comment and suggestion in the Meeting whereby all related directors especially Chairman of Audit Committee, other Committees and Managing Directors including Senior Management in Financial and Accounting, Internal Audit. Legal Consultant and Auditor, all had presented in the Meeting to answer all 28


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

inquiries in the Meeting. The company’s secretary proceeded the Meeting according to the agendas and did not increase any agenda without notifying the shareholder in advance. Total period of each Meeting was approx. 3 hours. The important agendas were as follows; • Report of company operating result: The company declared details about result of business operation of the Company related to income, expense, profit and summary of operating result in bar chart. • Appointment of Board of Directors: The company allowed the shareholders to select individual director as the company had provided details of history and also all shareholders to inquired all questions before voting. In this regard, the existing shareholders would provided all complete details about their attendance history in Board of Directors’ Meeting. • Appointment of the auditor: The company provided details about name of the auditor, accounting office and relation to the company. • Profit sharing: The company provided details about the allocation of profit and reserves, dividend amount which were in accordance with dividend payment policy of the company and the date closing account book to determine right for dividend payment. • Director’s remuneration: The company provided details about the proposed remuneration amount according to the policy and condition of directors’ remuneration which was compared among other companies in the same industry including compare with other company who earned similar or nearly income and net profits. In voting, the shareholder was able to use voting card with barcode for quick and efficient vote counting. The company collected voting card only in case any shareholders objected nor suspended voting. In case of the agenda related to election of director, in order to comply with good practice in Shareholders’ Meeting, the company collected voting cards from all attending shareholders and voting was based on individual vote which was transparent and correct according to the law and Article of Association of the company. The company also disclosed result of voting in each agenda of the shareholders who agreed, disagreed, objected or suspended voting immediately. After the date of Shareholders’ Meeting All inquiries and important comments were correctly and completely recorded in the Minutes of Meeting and summarized by resolution and votes for verification of the shareholders as publicized on company’ website not less than 14 days after the Meeting on www.chukai.co.th

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CHU KAI PUBLIC COMPANY LIMITED

2.

ANNUAL REPORT 2011

Equitable treatments of Shareholders The company had realized to maintain impartial and fair treat to all shareholders as follows:1. The company proposed at least 1 independent director as option for authorization of the shareholder in making Power of Attorney to exercise his right to attend the Meeting and vote in each agenda on his behalf whereby in the Annual General Meeting of Shareholders 2011, the company proposed Mr. Vatcharin Duangdara, the Chairman of the Audit Committee. 2. The Board of Directors proceeded the Meeting according the agendas as notified in the Invitation Letter for the Meeting and did not increase any agendas without advance notice to all shareholders in order to provide sufficient time for the shareholders to study related information in advance. 3. The company provided voting card for all agendas by using barcode system to record and publicize voting result including also provided facilitators to collect voting card in the Meeting room. The cards were collected both of those agreed and disagreed votes except in case of the election of the board of directors whereby voting cards would be collected in all cases, i.e. agreed, disagreed and suspended votes and after the Meeting, the card collector would collect voting card for all agendas. 4. The Board of Directors had assigned the company’s secretary to correctly and completely produce and record Minutes of Meeting and publicize thereof to all shareholders via investor relation website and the company also delivered those Minutes to SET after completion of the Meeting not exceeding 14 days. 5. The company had policy and strictly complied with internal data management by disclosing only to those related persons. Report of publication of internal data was allowed to do only by the authorized person. In this regard, all managements and directors of the company had well realized to their duties and responsibilities toward internal data and did not use thereof for personal benefit nor for security trading. Moreover, the company determined the management to report change of security holding to SEC pursuant to Section 59 of Securities and Exchange Act, B.E. 2535. 6. To prevent conflict of interest, the Board of Directors had carefully managed upon there was any items which would be conflict of interest by determining the policy and method to prevent the management and related party to use internal data for their private benefits, as follows:-

Report on conflict of interest The report would be approved by the Board of Directors subject to Audit Committee was also required to approved those correlated items. In this regard, approval to record correlated items was based on optimal benefit of the company, rules of fairness, reasonability of items and the compliance with market condition and market price. Moreover, the stakeholders or those who had conflict interest in correlated item was unable to involve in such approval of correlated item. This was for fairness and optimal benefit of the company. In case of such correlated item was under the scope of regulation, notification, order, requirement or rule of SEC, the company would comply with SEC by determining price and condition as if it was item made with the outsider and disclosed correlated item that contained details, item value, contractual parties, reason/necessity in annual report and annual data disclosure form. 30


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The Board of Directors then approved in principle according to the guidelines of SEC in compliance with Section 89/12(1) of Securities and Exchange Act (No. 4), B.E. 2551 regarding director, management or related person who would do legal transaction with the company dated 13 August 2010, had resolved that the management could approve such transaction should it contained commercial agreement in the same manner which those wise men would do with their general parties in the same situations based on trading negotiation power that free from any influences from the position of director, executive or related persons. In this regard, the management would prepare report to summarize such transaction to the Board of Directors’ Meeting for acknowledgement of such intention onwards. In the Board of Directors’ Meeting, should in any agenda which some directors has any conflict of interest , the Chairman would request those directors to comply with policy by suspending vote nor comment in such agenda. Internal Information Control The company determined policy to control the directors and managements not to bring internal information which was still not publicized to the public to use for private benefit. The management and employee of any unit who knew about such internal information were prohibited to purchase or sell company’s security within 1 month before disclosure of financial statements to the public. This prohibition was prescribed in the notification of the company regarding Policy on the Supervision of Business, Business Code of Conduct and Employee Code of Conduct. In this regard, the company also determined disciplinary action in Working Rules and Regulations of the Company as well. Moreover, the Company had informed the management of all departments to understand about their duties in reporting about possession of company’s security of himself/herself, his/her wife/husband and immature children including change of security possession to SEC pursuant to the Securities and Exchange Act, B.E. 2535 and requirements of SET after the company was permitted by SEC to offer for sale its ordinary share for capital increase to general public.

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CHU KAI PUBLIC COMPANY LIMITED

3.

ANNUAL REPORT 2011

Roles of the stakeholder

The company emphasized on right of all groups of stakeholders regardless internal stakeholders, i.e. employees and managements of the company or external stakeholders, i.e., partner, competitor and other related organization due to the company had well realized to the support of all stakeholders which promoted the competitive ability to build profit and long term success of the company. For this purpose, the company would take care the stakeholders according to related lawful right but would not conduct any action to infringe against the right of those stakeholders, as summarized as follows:The stakeholder Shareholder :

Partner

:

Competitor

:

Creditor Customer

: :

Employee

:

Society

:

Business Governance Policy The company would sincerely engage its business and strictly adhere to develop sustainable business and become the leader in providing standard logistic service based on satisfied remuneration in long term. Concerned on equality and sincerely in business operation and joint benefit with the partner by strictly comply with all related laws and rules. The company would comply with good competition rules and avoid dishonest method to defeat the competitor. The company would strictly comply with all contract and agreed conditions . The company paid attention and take responsibilities to the customer, both in term of good service to the standard, post sale service and keep confidential of the customers’ secret. The company equally and fairly treated all employees by providing training course to enhance knowledge and working efficiency for the employees and also provided suitable remuneration. The company engaged its business based on responsibility to community environment and society by adhering on the policy abut environmental maintenance and safety from activity of the company, of which, the group of companies had also been accredited by ISO 9001:2000 which related on Quality Management System and ISO 18001:1999 which related on Occupation Health & Safety from TUV Rheinland. In addition, the company committed to comply with related laws and rules.

For complaint and report of any clue related to legal offense, correctness of financial report, defective internal audit or breach against business ethics of the management and employee, can be made by mail to the Chairman of the Board of Director who is independent director at Chu Kai Public Company Limited address no. 42/62 Moo 14, Soi Janyawat 5, BangnaTrad Road Km. 7, Bang Kaew Sub-district, Bangplee District, Samutprakan Province 10540 or at boardofficce@chukai.co.th and all information of the reporter would be kept confidential.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

4. Disclosure for transparency Corporate Governance The Board of Directors of the company has concerned on the importance of the Principles of Good Corporate Governance and has thus prescribed as policy to engage good transparency and auditable business by determining clear responsibility. In addition, the company also concerned on the governance and internal audit systems. For risk management, the company tried to closely control and manage risk and concerned on business ethics by maintaining fairness to the partner, shareholder and stakeholder in all groups. Report of Board of Director The Board of Directors was responsible to operate important business and to control financial statements of the company including also IT system as disclosed to the public in annual declaration form and annual report. Such financial statements were prepared according to the general certified accounting standard by selection to use and regularly complied with suitable accounting standard including sufficient disclosure of important data on notes to the financial statements. In this regard, the Board of Directors had thus appointed Audit Committee which was consisted of non-management director who has sufficient freedom to take care and responsibilities about quality of such financial report and internal audit system. Relationship of the investor After the company had been listed in SET, the company had policy to provide investor relation coordinator to be responsible for disclosure of data which was quick, complete, transparent and thoroughly both report of financial data and general data including other important date duly impacted security price of the company by publication IT message of the company to all investors, institutes, shareholders, government officers and general publics via channels of SET. In addition, the company had publicized both Thai and English versions on investor relation website, which having, Ms. Jiraluck Praerangsi, Executive Vice President of Accounting and Finance and Ms. Wanida Darachai, Executive Vice President of organizational support to take responsibilities about the investor relation affairs who are contactable at Telephone no. 02-715-000 or www.chukai.co.th

33


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

5. Board of Directors’ responsibilities Leadership and vision The Board of Directors of the company has independent roles subject to good corporate governance standard in the following matters:- Determine vision, mission, strategy, goal, business plan and budget of the company. - Supervise and regularly follow up performance of the management to ensure it is in accordance with work plan to achieve targeted goals. - Maintain and regularly follow up sufficient internal control. - Maintain and regularly follow up sufficient risk management for optimal benefit of the company. - Promote the company directors to attend training course of the Thai Institute of Directors. Business Ethics The company determined procedures about ethics of Board of Directors, management and employee for guidelines of other persons to sincerely, honestly, fairly and responsible to perform their duties and responsible for the stakeholder, shareholder and all related parties. Authority balance of non-management director In 2011, the company had altogether 11 directors as consisted of:* Directors who are the management Total 5 persons * Directors who are outsiders and non-management Total 1 person * Independent directors Total 5 persons Therefore the company thus had directors who were outsiders and non-management total 6 person or 54.55% of total Board of Directors which was more than one-half of the whole directors. The stakeholders therefore felt confidence that the directors would be able to independently perform their duties as representative of the shareholders, of which, this could balance and repeatedly check management of the directors. Integrated or separated position director The company determined the Chairman of the Board of Directors and Chief Executive Officer was not the same person by clearly prescribing scope of authority and duties of Chairman and Chief Executive Officer. Chairman and Chief Executive Officer were thus had no absolute authority. This was to balance the important resolution which required approval from the Board of Directors or Shareholders’ Meeting. Moreover, authority and power vested to the Managing Director or Board of Directors was unable to approve any item which they or other stakeholder had benefit thereon or may had conflict of interest in any other manner with the company or affiliated companies.

34


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Company’s Secretary The Board of Directors’ Meeting, No. 6/2551, held on 17 July 2008, had resolved to appoint Ms. Wanida Darachai as secretary of the Company as she was suitably qualified and possessed suitable experiences to be responsible and act as company’s secretary to supervise the company to comply with related laws and regulations according to the good corporate governance policy of the company to enhance more effective business operation. Board of Directors’ Meeting The company determined to hold Board of Directors’ Meeting at least once every 3 months and additional special Meeting as deemed necessary by producing Invitation Letter including Meeting agendas and other supporting documents 7 days before the Meeting day to enable all directors sufficient and reasonable time to study all related data before attending the Meeting. In each Board of Directors’ Meeting, the Chairman had sufficiently allocated time for the Directors to carefully summarize important problem. In addition, Chairman and Board of Directors had invited the auditor to attend the Board of Directors Meeting in order to provide additional information and record Minutes of Meeting in written, to compile the Minutes duly approved by the Board for verification of other related parties. The Board of Director determined the management to prepare operating result report on monthly basis to propose to the up coming Meeting to enable the Board of Director to follow up the progressiveness of business operation of the company. In 2011, the Board of Directors had held altogether 8 Meetings, each at approx. 3 hours. In each Meeting, other related persons were invited to provide additional information. The Audit Committee had held 8 Meetings, being normal agenda 4 Meetings and Meeting between Audit Committee and Auditor 4 Meetings but without attendance of the management, details of attendance in Board of Directors’ Meeting in 2011 are as follows:Details of attendance in Board of Directors’ Meeting in 2010 Name

Position

1. Asist.Prof.Dr. Piboon Limprapat Chairman of the Board of Directors/Independent Director 2. Mr. Somsak Sivapaiboon Deputy Chairman of the Board of Directors 3. Mr. Thongchai Praerangsi Director 4. Mr. Chamnan Ngampojanavong Director 5. Ms. Nateeporn Duangsawasdi Director 6. Ms. Wanida Darachai Director/Company’s Secretary 7. Ms. Jiraluck Praerangsi Director 8. Mr. Vatcharin Duangdara Chairman of the Audit Committee/Independent Director 9. Mr. Surin Premamornkit Audit Committee / Independent 35

Board of Directors’ Meeting Total Meeting ( 8 ) 8/8

Audit Committee’s Meeting Total Meeting ( 8 ) -

8/8

-

8/8 8/8 8/8 8/8 7/8 6/8

6/8

8/8

8/8


CHU KAI PUBLIC COMPANY LIMITED

Name 10. Mr. Jessada Promjart 11. Mrs. Werawan Boonkwan

ANNUAL REPORT 2011

Position Director Audit Committee / Independent Director Audit Committee / Independent Director

Board of Directors’ Meeting

Audit Committee’s Meeting

7/8

7/8

8/8

8/8

Sub-committee The Extraordinary Meeting of Shareholders No. 2/2549, dated 25 August 2006; the Board of Directors’ Meeting No. 19/2549 dated 8 December 2006; The Board of Directors’ Meeting, No. 3/2551 dated 27 March 2551 and the Board of Directors’ Meeting, No. 5/2552 dated 26 June 2009, had appointed 4 Audit Committees, each of them were retained in position for 3 years per rotation to supervise the company’s affairs whereby the authorities and powers of the Audit Committee was in accordance with details in clause 8.1 of management structure. The Audit Committee would hold their Meeting at least one every quarter and may be specially held in emergency agenda. In addition, the Board of Directors’ Meeting, No. 4/2554 held on 29 June 2011, had appointed the Executive Board duly consisted of 7 Executives Board of Directors whereby the authorities and powers of the Executives Board of Directors was in accordance with details in clause 8.1 of management structure. The Executives Board of Directors would hold their Meeting in jointly with the managements regularly at least once a month and may be specially held in emergency agenda. In present, the company still does not have Remuneration Sub-Committee but there is processes to appropriately consider basic remuneration based on suitability and responsibility of the director, management, environment, economic situation and in comparison with other companies in the same industrial business group including also comparison with other company who earned similar or nearly income and net profit. Remuneration of the Board of Director, Sub-Committee was already approved by the Annual General Meeting of Shareholders. Remuneration for director and management Remuneration for director:The company considered remuneration for the director and management by considering the suitability and responsibility of the director, management, environment, economic situation and comparison with other companies in the same industrial business including comparison with other company who earned similar or nearly income and net profit. Remuneration of Board of Directors and Sub-Committee was already approved by the Annual General Meeting of Shareholders. Remuneration for the management was in accordance with principles and policies determined by the Board of Directors based on result of business operating of the company and performance of each management. In 2011, the company had paid remuneration to the directors and managements total Baht 19.08 Million according to the details in clause 8.3 regarding the management remuneration. 36


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Internal control and internal audit 1. Internal control and internal audit: The company had emphasized on the internal control both in management and operation levels. To enhance its efficiency, the company thus determined duties, authorities of the management in written with control the use of company’s property for greatest benefit and divided duties among the operator, the follower and to control and separately assess to make balance and suitably audit each other. In addition, the company provided internal control about financial aspect as the company provided financial report system to propose to the responsible management. Moreover, ANS Audit Co., Ltd., who was the company’s auditor had also assessed and reviewed internal control system of the company in examining annual account and there was no any weakness nor significant failure were reported in the comment toward financial statement and issued unconditional auditor’s report. In addition, the company had Internal Audit Department to audit to ensure that major operation and significant financial activities of the company was in line with the prescribed guidelines and effective including the audition and compliance with law and all controls. To provide freedom for internal control unit, the Board of Directors defined that result of audit was directly reported to the Audit Committee and also assessed by the Audit Committee. 2. Risk assessment The company had assessed both internal and external risk factors which would impact business operation of the company including to analyze and follow up all situations which was the cause of risk factor to determine appropriate measure to regularly manage risk and follow up result thereto.

Internal Information Control The company determined policy to control the directors and managements not to bring internal information which was still not publicized to the public to use for private benefit. The management and employee of any unit who knew about such internal information were prohibited to purchase or sell company’s security within 1 month before disclosure of financial statements to the public. This prohibition was prescribed in the notification of the company regarding Policy on the Supervision of Business, Business Code of Conduct and Employee Code of Conduct. In this regard, the company also determined disciplinary action in Working Rules and Regulations of the Company as well. Moreover, the Company had informed the management of all departments to understand about their duties in reporting about possession of company’s security of himself/herself, his/her wife/husband and immature children including change of security possession to SEC pursuant to the Securities and Exchange Act, B.E. 2535 and requirements of SET after the company was permitted by SEC to offer for sale its ordinary share for capital increase to general public.

37


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Internal Control In the Board of Directors’ Meeting No. 1/2011 dated 25 February 2012, there were 4 members of Audit Committee attending the Meeting, an evaluation in respect of the Company’s internal control was made by the Board of Directors as follows; 1. Organization and Environment : The Company’s Management has set up an organization chart and responsibilities of Board of Directors as well as business goal for evaluation of management and employees. Moreover, the Company has also set up a code of conduct, three manuals for its procurement practices and the penalty for violation. 2. Risk Management : The Company has always been attentive to the internal and external risks which may have significant effects to the Company’s business. The Company always analyzes various risk related incidents and has procedures for implementation and monitors all risks management regularly. 3. Control over Management’s Practice : Scope of duties and responsibilities of each management level have been set up including procedure of connected transactions with major shareholders, directors, managements, and related persons. 4. Information Technology and Communication Systems : The Board of Directors has been provided with sufficient and accurate information to be considered in each meeting. The information regarding asset utilization between the Company and its subsidiaries has been made every month for asset management and account receivables management. With this information system, the Company shall be published accounting and financial information on time. 5. Follow – up System : Actual operational results have been reported to the Company’s Board of Directors by management on a quarterly year basis in order to compare with the Company’s target. In addition, the auditor of the company was ANS Audit Co., Ltd., had studied and assessed the efficiency of internal control in accounting as deemed appropriate for benefit in determining intensive and suitable operation scope. The auditor commented that no any material mistake was found in expressing comment toward financial statements and issued unconditional auditor’s report.

38


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Dividend Policy The Company has set up policy to pay dividend no less than 50 percent of net profit after tax and legal reserve of the Company; however, the dividend payment will be paid depend upon the Company’s financial results, financial condition and cash requirements, investment plan, and such other factors as the Company’s management consider appropriated. The dividend policy for its subsidiaries will depend upon their financial results, investment plans, financial condition and cash requirements.

39


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Related Transaction Rules and procedures for approving connected transactions In case that the Company has a transaction with a related companies or related persons who may have conflicts of interest or stakes or future conflicts of interest, the transaction shall be made on the appropriateness of fair market price by considering all the conditions in according with operations in the same type of industry and comparing with the external price or the market price. If the related transaction has been made under the normal business operation, the management is allowed to approve the transaction but have to quarterly reviewed by the Audit Committee for consideration of the fairness and reasonableness of such transactions. If the related transaction has not been made under the normal business operation, the Audit Committee has to approve the transaction prior to the transaction taking place. If the Audit Committee is not specialized on the related transaction, the Company will provide an independent specialist or the Company’s Auditor to make suggestions on the transaction for the decision making of the Board of Directors, the Audit Committee or the shareholders. Besides, the related transactions of the Company will comply with the obligations, announcements, orders or the requirements of the Stock Exchange of Thailand. Thus the executive who may have conflicts of interest or a vested interest or benefits from the transaction has no rights to vote on that related transaction. Policy or the Tendency of Future Related Transactions In the future related transactions, which is regular transaction, the Company has set up criteria and direction in compliance with the general commerce by referring to reasonable price and appropriate conditions which can be audited and be presented to the Audit Committee to consider approval the criteria and directions. The Audit Committee shall opine in necessity and reasonableness of such transaction including all conditions. If the Audit Committee is not specialized on the related transaction, the Company will provide an independent specialist to make suggestions on the transaction for the decision making of the Audit Committee, and passed to the Board of Directors or the shareholders for final approval. The approval of the related transactions shall comply with the obligations, announcements, orders or the requirements of the Stock Exchange of Thailand and shall disclose in the Notes to Financial Statement or electronic devices of the Stock Exchange of Thailand.

40


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Related Transactions in the year 2010 unit : Million Baht Related Companies / Related Persons Mr. Thongchai Praerangsi

Mr. Thongchai Praerangsi

Relationship

Directors / Major Shareholders

Director / Major Shareholder

Consolidated Financial Statement 2010

Transaction

Mr. Thongchai and Ms. Jiraluck are directors of the Company and have lend the Company and its subsidiaries for short-term loan as working capital without interest charge - Beginning Balance - Increasing - Decreasing - Ending Balance

Land rental fee on Phaholyothin Road, Tambon Klong Nung, Amphur Klong Luang, Prathumthani Province, present office of TCH at Baht 50,000 per month pay to Mr. Thongchai Praerangsi

Expenses of land rental fee for TCH office to Mr. Thongchai Praerangsi pending for consideration of the Trustee in Bankruptcy Case has booked as accrued expenses - Beginning Balance - Increasing - Decreasing - Ending Balance

41

Necessity and Reasonableness

Those funds have been lent for working capital without interest charge. The Audit Committee has considered the transaction and opined that the transaction is financial support for group of the Companies to promote liquidity as deemed nessare. The transaction is reasonable and benefits to the Company without interest charge. 1.45 8.20 (9.65) 0.00 0.60

5.35 0.60 0.00 5.95

TCH has to pay the land rental fee for its present office on Phaholyothin Road, Tambon Klong Nung, Amphur Klong Luang, Pathumthani Province at Baht 50,000 per month to Mr. Thongchai Praerangsi. Mr.Thongchai Praerangsi still not received such rental until the case would be finalized due to pending on legal dispute TCH has booked this rental fee as accrued expenses with related person. The Audit Committee has considered the transaction and opined that the transaction is reasonable since rental fee TCH paid to its director is lower than market price of the same area. UK Valuation and Agency Co., Ltd. the independent appraiser, had assessed rental rate between 1 February 2011 to 31 December 2013 on 7 February 2011 at market rental rate between Baht 160,000 – Baht 193,600 per month. Expenses for land rental fee for TCH office to Mr. Thongchai Praerangsi has booked as accrued expenses since the land is under lawsuit. So TCH has ceased the rental payment to Mr. Thongchai until the lawsuit is finalized. For progressiveness of the case, Mrs. Praneet Saiphirun, senior legal officer of the company informed that it was pending for inspection of land ownership and sought for evidence to prove ownership of building to support auction sale but due to partial file was still unfound, the Trustee was still unable to take further action The Audit Committee has considered the transaction and opined is pending for consideration of the Trustee in Bankruptcy Case that booking the rental expenses as accrued expenses until the lawsuit is finalized is reasonable.


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Reporrt of Boaard of Diirectors’’ Responnsibilitiess TThe Company’’s Board of Dirrectors recognizze the significaance of duties and a responsibillities to managee the business of o the Compaany in compliaance with the laaw, the Companny’s objectivess, the Articles of o Association as well as the resolution r of thhe shareholdeers’ meeting with w integrity annd care for the best benefits of o the companyy, all shareholdders and investoors by providinng reasonablee assurance that the financiaal statements recorded r accurracy, adequate and present ffairly financial position of thhe Company.. mprises of quallified independeent directors inn The Board off Directors havee appointed thee Audit Commiittee which com compliancce with regulatiions of the Stocck Exchange off Thailand and other Securitiees and Exchangge Act to revieww and responsiblle for the accurracy, and adequuate disclosuree of the Compaany’s financial statement as wwell as to providde and to maintain efficient e internaal control systeem for the reasoonable believe on the credibility of financiall statements, goood preventionn system forr property mainntenance that frreed from corruuption item norr any abnormall operation including to complly with related laws and regulations r andd the disclosurre of related traansactions and conflicts c of inteerest as well aas compliance with w related laws and regulations. r Thhe Audit Comm mittee has prepaared a report onn the committeee’s monitoringg activities and disclosed thesee to the Boaard of Directorss T Board of Directors havee opined that the The t financial statements for the year 2011 of Chu Kai Public P Companny Limited and a subsidiariess being consollidated, in whiich the Audit Committee, thhe Company’s management and a independennt auditor haave all reviewed, have been prepared p in accordance with Generally G Acceepted Accountiing Principle annd present fairlly financial position p of the Company. C

____________________________ (Assist. Prof. Dr. Pibooon Limprapat) Chairm man of the Boardd of Directors

42


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Details of Executive and Authorized Directors of the Company Name-Surname Position Assist. Prof. Dr. Piboon Limprapat

Shares Relationship to Holding other (%) executives

Age (Years

Education / Training

71

Ph.D. University of Illinois M.A. (ECON.) University of Philippines, Bachelor of Economics, Thammasart University and duly passed training program of The role of Chairman (RCM) year 2001 (IOD) Director Certification Program (DCP) year 2002 (IOD) Audit Committee Program (ACP) year 2004 (IOD) Role of Committee in Determining Remuneration Policy year 2009 (IOD)

-

-

Working Experiences Duration 2009- present

2007 – present

2005 – present

2004 - present

43

Positions and Places Chairman of the Board of Directors of Chu Kai Public Company Limited Director, Chairman of Audit Committee and Chairman of Recruitment and Remuneration Committee N.C. Housing Public Co., Ltd. Director of Ladprao Language School Director and Vice President of Asian Medical and Agriculture Laboratory and Research Center Co., Ltd. Director of Ladprao Hospital


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Position Mr. Somsak Sivapaiboon

ANNUAL REPORT 2011

Shares Relationship to Holding other (%) executives

Age (Years

Education / Training

49

Master’s Degree in Business Administration (General Management) Sukhothai Thammathirat University Master of Science (Logistics and Supply Chain Management Program) Sripathum University Duly passed training program Director Accreditation Program (DAP) year 2006 (IOD) Director Certification Program (DCP) year 2007 (IOD) Finance for Non-Finance Director (FN) year 2007 (IOD) Capital Market Academy (CMA 9/2009

-

-

Working Experiences Duration 2010 – present

2008- present

2006 - present

2004 – present

2011 – present 2005 – 2010 2001 – 2010 2000 – 2005

1997 - 2000

44

Positions and Places General Manger Thai Cold Rolled Steel Sheet Public Company Limited Director Thai Coated Steel Sheet Company Limited President Porn Piyachan Transport Co., Ltd. Assist General Manager (For Office of the Managing Director of Sahaviriya Steel Industry Public Company Limited Vice Chairman of the Board of Directors Chu Kai Public Company Limited Director and Executive Director Thai Cold Rolled Steel Sheet Public Company Limited Director Prachuab Port Co., Ltd. Managing Director Line Transport Co., Ltd. Managing Director Prachuab Port Co., Ltd. Managing Director Bang Saphan Transport Co., Ltd. General Manager for Sale and Marketing Thai Steel Sales Co., Ltd.


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Position

Age (Years

Mr. Vacharin Doungdara

52

ANNUAL REPORT 2011

Shares Relationship to Holding other (%) executives -

Education / Training Bachelor of Law, Thammasat University Barrister of Law, The institute of Legal Education EX-MBA, Kasetsart University

Working Experiences Duration 2011 - present 2008 - 2011

Duly passed training program

2006 - present

Director Accreditation Program (DAP) year 2004 (IOD) Director Certification Program (DCP) year 2006 (IOD)

2004 - 2007

1995 – 2004

1982 - 1995

45

Positions and Places SVP-Legal Krungthai Card PCL. Senior Manager Legal and Business Compliance Bank of Ayudhya PCL Chairman of the Audit Committee and independent director Chu Kai PCL Legal advisor, Lawyer, independent director and audit committee to many listed companies Group of Companies M Thai Co., Ltd., a debt management company for financing companies Thanachart and Ekachart Financing Institutes


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Position Mr. Surin Premamornkit

ANNUAL REPORT 2011

Shares Relationship to Holding other (%) executives

Age (Years

Education / Training

63

Bachelor Degree of Finance and Treasury, Thammasart University, Duly passed training program Director Accreditation Program (DAP) year 2005 (IOD) Finance Executive 8 (Finex’8) The Thai Institute of Banking and Finance Association Syndicated Loans The Euro Money Institute Hong Kong BOURSE GAME ASIA Singapore Manager Bangkok Bank Public Co.,Ltd.

Working Experiences Duration 2009 – present

2008 – present

1999 - 2008

2008 - 2008 2006 - 2008 2005-2006 1999 - 2005

46

Positions and Places Audit Committee and Independent Director Chu Kai Public Company Limited Director of Thai Nigi Venture Co., Ltd. Audit Committee and Independent Director Sriwichai Wetwiwat Co., Ltd. Vice General Manager, Business Corporation 2, Bank Thai Public Co., Ltd. Director of BT Business Consulting Co.,Ltd. Director of BT Securities Co., Ltd. Director of BT Asset Management Co., Ltd. Director of BT Insurance Co., Ltd


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Position Mr. Jessada Promjart

Age (Years 50

ANNUAL REPORT 2011

Shares Relationship to Working Experiences Holding other Duration Positions and Places (%) executives Dec.2009-resent Chief Executive Officer -

Education / Training Master’s degree (Accounting) Thammasat University Bachelor’s degree (Accounting) Thammasat University

Jan – Nov. 2009

Duly passed training program

Director Certification Program (DCP) year 2004 (IOD) Company Secretary Program (CSP) year 2004 (IOD)

Mar 2008–present

2006 – Feb. 2008

2004 – Feb. 2008

2003 – 2004

2000 – 2007

1998 – 2000

47

MCOT Public Company Limited Assistant Managing Director Piyavej Hospital Public Company Limited Audit Committee and Independent Committee Chu Kai Public Company Limited Director D-Land Development Co., Ltd. Director Media Studio Co., Ltd. M&D Entertainment Co., Ltd. MOM International Co., Ltd. Director and Secretary to the Board of Director Media of Medias Public Company Limited Director and Audit Committee Media of Medias Public Company Limited Manager to Office of the President BBTV Co., Ltd. General Manager Chu Kai Company Limited


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Name-Surname Position

Age (Years

Education / Training

Mrs. Werawan Boonkwan

42

Master’s degree (Finance & International Business), University of Wisconsin, USA. Bachelor’s degree (Accounting) Chulalongkorn University

Shares Relationship to Holding other (%) executives -

Working Experiences Duration

Positions and Places

2007-present

Managing Director Korawit Learning Consultant, BCG. Director and Audit Committee Chu Kai PCL CFO Business Consultant & Advisory Co., Ltd. General Manager A Thai Market Co., Ltd. Analyst-Asset Management Bangkok Capital Aluance Co., Ld.

2006-present

Duly passed training program

2002 - 2007

Director Accreditation Program (DAP) year 2006 (IOD) Director Certification Program (DCP) year 2008 (IOD)

2000 - 2002 1999 – 2000

Mr. Thongchai Praerangsi

59

Certificate, Nida Business School

34.46

Duly passed training program

Director Accreditation Program (DAP) year 2006 (IOD)

Ms. Jiraluck, Ms. Jiraporn and Ms. Junjira Praerangsi’ s father

2005-present

2006-present 1996 -present

19947-present 1992 -present

48

Chief Executive Officer and Director Chu Kai PCL Director The Crane Services Co., Ltd. Director The Crane Heavy Lift Co., Ltd. Director The Crane Rayong Co., Ltd. Director The Crane Laem Chabang Co., Ltd.


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Position Mr. Chamnan Ngampojanavong

Age (Years 51

ANNUAL REPORT 2011

Shares Relationship to Holding other (%) executives -

Education / Training Master’s degree (Management) Kasetsart University Bachelor’s degree (Capital Accounting) Chulalongkorn University

Working Experiences Duration

Positions and Places

2008-present

Chief Financial Officer and Director Chu Kai PCL Director The Crane Laem Chabang Co., Ltd. The Crane Rayong Co., Ltd. The Crane Heavy Lift Co., Ltd. Senior President Medium and Small Enterprises Bank Thai PCL Finance & Accounting Manager Pulthip Housing Co., Ltd. Primary Manager – Credit Management Department Siam Commercial Bank PCL

Oct. 2008-present

Duly passed training program

Director Accreditation Program (DAP) year 2008 (IOD) 1993 - 2008

1990 – 1993

1985 - 1990

49


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Position Ms. Nateeporn Doungsawasdi

Age (Years 51

ANNUAL REPORT 2011

Shares Relationship to Holding other (%) executives 4.44 -

Education / Training Bachelor of Arts Ramkhamhaeng University

Working Experiences Duration

Positions and Places

2004 - present

Executive Vice President and Director Chu Kai PCL Director The Crane Heavy Lift Co., Ltd. The Crane Laem Chabang Co., Ltd. The Crane Rayong Co., Ltd. Director The Crane Services Co., Ltd. Substitute Managing Director The Crane Heavy Lift Co., Ltd. Substitute Managing Director The Crane Services Co., Ltd. Managing Director The Crane Heavy Lift Co., Ltd.

Duly passed training program

Director Accreditation Program (DAP) year 2005 (IOD)

2006 - present Sep.2008 -present

May 2007-Aug. 2008 1996 -April 2007

Ms. Wanida Darachai

44

4.44

Bachelor of Arts Ramkhamhaeng University Duly passed training program

-

2004 - present

2006 -present

Director Accreditation Program (DAP) year 2005 (IOD) Director Certification Program (DCP) year 2008 (IOD) Company Secretary Program (CSP) year 2005 (IOD)

50

2001 - present

Executive Vice President and Director Chu Kai PCL Director The Crane Services Co., Ltd. Director The Crane Laem Chabang Co., Ltd. The Crane Heavy Lift Co., Ltd. The Crane Rayong Co., Ltd.


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Position Ms. Jiraluck Praerangsi

Age (Years 34

ANNUAL REPORT 2011

Shares Relationship to Holding other (%) executives 4.44 Mr. Thongchai Praerangsi’s daughter

Education / Training Bachelor’s degree, Huachiew Chalermprakiet University MBA, Burapha University

Working Experiences Duration

Positions and Places

2004 - present

Executive Vice President and Director Chu Kai PCL Director The Crane Services Co., Ltd. The Crane Heavy Lift Co., Ltd. The Crane Laem Chabang Co., Ltd. The Crane Rayong Co., Ltd. Substitute Managing Director The Crane Laem Chabang Co., Ltd.

2006 - present

Duly passed training program

Director Accreditation Program (DAP) year 2005 (IOD) Director Certification Program (DCP) year 2008 (IOD) 2002 – 2004

Ms. Kuneeon Klakarnkai

41

Bachelor’s degree (Accounting) Krirk University Bachelor’s degree (Finance and Banking) Ramkhamhaeng University Master of Business Administration, Accounting Program, Ramkhamhaeng University

0.0002

-

2005 - present 2003 -2004

2002 - 2003

2002 -2000

Accounting Manager Chu Kai PCL Assistant Finance & Accounting Manager Vuteq Asia Co., Ltd. (Chubu Group of Japan) Supervisor to Finance & Accounting Department Extra Beverage Industries Co., Ltd. Supervisor to Finance & Accounting Department Central Watson Co., Ltd.

Remarks: All the Company’s Board of Directors has qualifications in compliance with the requirements of the Securities and Exchange Commission under the Securities and Exchange Act.

51


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011 Director / Executives

Company

1. Chu Kai PCL

Assist.Prof. Dr. Piboon Limprapat

1,3

Sivapaiboon

Mr. Vacharin Doungdara

Mr. Surin Premamornkit

Mr. Jessada Promjart

Mrs. Werawan Boonkwan

2,3

3,7

3,8

3,8

3,8

Mr. Somsak

3. The Crane Laem Chabang Co., Ltd. 4. The Crane Rayong Co., Ltd. 5. The Crane Heavy Lift Co., Ltd. 7. Thai Cold Rolled Steel Sheet PCL 8. Prachuap Port Co., Ltd. 9. Sahaviriya Steel Industries PCL

Mr. Chamnan Ngampojanavong

Ms. Nateeporn Doungsawasdi

3,4,9

3,6,10

3,6

3 3 3

3 3 3 3,9

3,9 3 3 3

2. The Crane Services Co., Ltd.

6. Line Transport Co., Ltd.

Mr. Thongchai Praerangsi

Ms. Wanida Darachai

Ms. Jiraluck Praerangsi

3,6,10 3

3,6,10 3

3 3 3

3 3 3

9 3,6 9 10 3

10. Meesuk Property Co., Ltd.

3

11. D Land Development Co., Ltd. 12.N.C. Housing PCL.

Remark :

1 2 3 4 5

2,3 Chairman Deputy Chairman Director Executive Chairman Executive Deputy Chairman

6 7 8 9 10

52

Executive Director Chairman of the Audit Committee and Independent Director Audit Committee and Independent Director Managing Director Executive

Ms. Junjira Praerangsi

Ms. Jiraporn Praerangsi

Ms. Kuneeon Klakarnkai

6

6

10

3, 9 3, 9


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Details of Executive and Authorized Management of the Company and subsidiaries Name-Surname Assist.Prof.Dr.Piboon Limprapat Mr. Somsak Sivapaiboon Mr. Thongchai Praerangsi Mr. Chamnan Ngampojanavong Ms. Nateeporn Doungsawasdi Ms. Wanida Darachai Ms. Jiraluck Praerangsi Mr. Vacharin Doungdara Mr.Surin Premaornkit Mr. Jessada Promjart Mrs. Werawan Boonkwan Mrs. Pattanintorn Hlowchitsiang Mrs. Chittra Thongsamut Ms. Kuneeon Klakarnkai Ms. Nonthaporn Kraichingrit Ms. Viyada Pradubyard Ms. Patcharin Poungrat Mrs. Niramon Sutisiri Ms. Jiraporn Praerangsi Mr.Damrongpol Peerasathien Ms. Suwannee Sanguandee

Chu Kai Public Company Limited

The Crane Services Company Limited

The Crane Laem Chabang Company Limited

The Crane Rayong Company Limited

The Crane Heavy Lift Company Limited

3,8

3

3

3

3

3

3

1,3 2,3 3,4,8 3,5,9 3,5

3

3

3

3,8

3,5,9

3

3

3

3

3,5,9

3

3

3

3

3,6 3,7 3,7 3,7 5,9

3

9 9 9 9 9 9 5

3,8 9 9

53


CHU KAI PUBLIC COMPANY LIMITED

Name-Surname Ms. Junjira Praerangsi Mr. Kravee Boonma Mrs. Daoruang Yimsawasdi Ms. Doungchan Kanchanavorawong Ms. Pannee Nojakun Mr. Suraphon Jitdee Ms. Wilai Nakwila หมายเหตุ :

1 2 3 4 5 6 7 8 9

ANNUAL REPORT 2011

Chu Kai Public Company Limited

The Crane Services Company Limited

5

The Crane Laem Chabang Company Limited

The Crane Rayong Company Limited

The Crane Heavy Lift Company Limited

3,8 9 9 9 9 3,9 9

Chairman Deputy Chairman Director Executive Chairman Executive Director Chairman of the Audit Committee and Independent Director Audit Committee and Independent Director Managing Director Executive

54


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Financial Status and Operating Results Analysis Statements of Income Operation of the company in 2011, the company had total revenues in 2011 Baht 956.40 Million as increased from the same period in the preceding year 59.00% as divided as income from sale Baht 493.21 Million and income from rental and transportation service Baht 463.20 Million respectively. The reason for increasing income from the same period of the preceding year 118.41% was due to continuous investment, lot of work, higher demand for heavy machine in supporting with ZOOMLION Crane imported by the company for sale was not expensive, the purchaser thus easily decided to purchase while the financial institute still released credit to this type of business. For income from rental and transportation service was increased from the same period in the preceding year 23.29% due to the company still emphasized on work in heavy industry which continuously invested especially the construction of power plant including extension to People’s Democratic Republic of Lao. Gross profit of the company in 2011 was Baht 303.24 Million or 48.16% increased from the same period in the preceding year due to 2 major causes, i.e. 1. The company had increased sale volume due to the company was an exclusive distributor of new machine of ZOOMLION Crane from People’s Republic of China in Thailand and 2. The company was able to appropriately control cost, as result, the company earned total net profit Baht 98.72 Million. Balance Sheet Asset Total asset of the company in 2011 was Baht 2,015.80 Million, increased from the same period in the preceding year (Baht 1,748.02 Million) total Baht 267.78 Million as it was current asset Baht 96.85 Million whereby mostly was increasing in accounts receivables and cash and the remaining Baht 170.93 Million was increasing in non-current asset in the part of machine which the company had additionally invested. Liabilities Total liabilities of the company as at 31 December 2011 was total Baht 1,066.67 Million as increased from 2010 Baht 862.60 Million or 23.66% increased. Major causes of such increasing upon comparing with the preceding year were:Increasing of account payable and other debtor from Baht 134.50 Million in 2010 to Baht 283.20 Million in 2010 or 110.56% increased due to the company had imported machines from People’s Republic of China for sale to the customers and payment was still not due. -

Increasing of long term loan from financial institute and liabilities under Financial Lease Contract from Baht 271.11 Million in 2010 to Baht 304.97 Million in 2011 or 12.49% increased due to the company had additionally invested in machine and partial loaned from financial institute.

55


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Shareholders’ equity The Shareholders’ Equity as at 31 December 2011 was Baht 949.13 Million, as increased from 2010 Baht 885.42 Million due to increasing of retained profit based on net profit of operating result in 2011. Liquidity The company had liquidity ratio increasing from 0.35 in 2010 to 0.40 times in 2011. Cash Flow in 2011 – the company had income from operation Baht 393.37 Million. Cash flow used in investment activities was Baht 32.84 Million and cash flow used in funding activities was Baht 314.36 Million while liability per shareholders’ equity was increased from 0.97 times in 2010 to 1.12 times in 2011. At the end of accounting period, however, the company still had remaining cash and cash flow equivalents Baht 55.84 Million, of which, in this 2012, the company believe to have better cash flow from operation activities from sale, rental and transportation service by using the strategy to maintain the existing customers base, expand customers base both within the country and abroad including to access customers base of the competitors and focus on sale of new crane imported from People’s Republic of China which its price is not high upon comparing with used crane imported mainly from Japan and Europe. Long term debt payment is during seeking channel for debt refinance in order to manage debt structure and installment period for debt payment to correspond with the ability to pay debt. In this regard, the company still doses not have any liquidity problem whatsoever.

56


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Auditor’s Report & Financial Report Audit Report of Certified Public Accountant To the Board of Directors and Shareholders of Chukai Public Company Limited: I have audited the consolidated statement of financial position of Chukai Public Company Limited and its subsidiaries as at December 31, 2011, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and I have also audited the separate statements of financial position of Chukai Public Company Limited as at December 31, 2011, and the related separate statements of comprehensive income, changes in equity and cash flows for the year then ended. The Company’s management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audit. The consolidated financial statements of Chukai Public Company Limited and its subsidiaries for the year ended December 31, 2010, and the separate financial statements of Chukai Public Company Limited for the year then ended, which have been presented herewith for comparative purposes, were audited by another auditor in the same firm, whose report dated February 24, 2011, expressed an unqualified opinion on those financial statements. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Chukai Public Company Limited and its subsidiaries as at December 31, 2011 and the consolidated results of their operation and their cash flows for the year then ended, and the separate financial position of Chukai Public Company Limited as at December 31, 2011 and the results of its operation and its cash flows for year then ended, in conformity with generally accepted accounting principles.

57


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Without qualifying my opinion, I draw attention in the Note 2 to the financial statements, in the year 2011, the Company and subsidiaries have adopted new and revised Thai Financial Reporting Standards, which are issued by the Federation of Accounting Professions and effective for the financial statements for the period beginning on or after January 1, 2011, for the preparation and presentation of these financial statements. The financial statements for the year ended December 31, 2010 which have been presented herewith for comparative purposes are newly presented in conformity with the financial statements for the year ended December 31, 2011.

Prawit Viwanthananut Certified Public Accountant Registration Number 4917 ANS Audit Co., Ltd. Bangkok, February 27, 2012

58


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2011 AND 2010 (Unit: Baht) Note ASSETS

Consolidated

Separate

financial statements

financial statements

2011

2010

2011

2010

3

Current assets Cash and cash equivalents

5

Current investments Trade and other receivables

55,836,619.86 -

4, 6

Short-term loans to related parties

4

Inventories

7

Other current assets Non-current assets held for sale

132,576,421.34 -

159,586.90 96,956,834.82 -

32,899,188.65 60,119,171.30 30,000,000.00

853,220.58 23,140,115.55 -

90,072,269.84

84,838,305.03

91,225,628.24

85,388,404.03

16,345,856.87

11,418,992.65

6,455,463.27

1,170,840.96

5,066,492.81

Total current assets

9,669,291.92

-

-

-

299,897,660.72

203,043,011.32

220,699,451.46

110,552,581.12

2,816,569.64

894,296.82

260,212.71

258,931.00

174,991,430.00

174,991,430.00

1,172,304,371.41

1,034,181,134.77

Non-current assets Restricted bank deposits

10

Investments in subsidiaries

8

Property, plant and equipment Accounts receivable under finance leases

-

4, 12 1,670,376,147.42 11

Other non-current assets

-

1,487,276,423.92 825,915.18

-

825,915.18

42,707,728.04

55,979,745.09

13,220,406.95

15,046,698.19

Total non-current assets

1,715,900,445.10

1,544,976,381.01

1,360,776,421.07

1,225,304,109.14

Total assets

2,015,798,105.82

1,748,019,392.33

1,581,475,872.53

1,335,856,690.26

59


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2011 AND 2010 (Unit: Baht) Note LIABILITIES AND EQUITY

Consolidated

Separate

financial statements

financial statements

2011

2010

2011

2010

3

Current liabilities Bank overdrafts and short-term loans from financial institutions

13

127,295,151.10

150,855,874.07

118,788,735.90

128,953,749.94

4, 14

283,202,740.69

134,503,111.44

261,326,073.16

155,664,912.66

Current portion of long-term debts

15

224,964,904.80

189,424,010.81

127,794,852.40

104,227,516.94

Liability under repurchase agreement

18

89,771,120.63

83,760,029.26

Short-term loans from related parties

4

Trade and other payables

Other current liabilities Total current liabilities

-

-

-

1,450,000.00

73,000,000.00

23,850,000.00

17,828,010.56

21,280,150.78

3,145,653.38

8,862,823.09

743,061,927.78

581,273,176.36

584,055,314.84

421,559,002.63

Non-current liabilities Long-term loans from financial institutions

16

49,603,355.99

97,960,834.07

44,409,216.64

87,750,694.72

Long-term liabilities under finance leases

17

255,364,031.98

173,154,039.30

135,094,329.25

69,728,105.98

Employee benefit obligations

19

8,550,763.03

Other non-current liabilities

4

10,086,664.96

10,214,137.81

359,397.75

345,314.41

323,604,815.96

281,329,011.18

186,138,981.66

157,824,115.11

1,066,666,743.74

862,602,187.54

770,194,296.50

579,383,117.74

Authorized share capital - 450,000,000 ordinary shares, Baht 1 par value

450,000,000.00

450,000,000.00

450,000,000.00

450,000,000.00

Issued and paid-up share capital - 450,000,000 ordinary shares, fully paid-up

450,000,000.00

450,000,000.00

450,000,000.00

450,000,000.00

209,553,500.00

209,553,500.00

Total non-current liabilities Total liabilities LIABILITIES AND EQUITY

-

6,276,038.02

-

3

Equity Share capital

Premium on ordinary shares

20

209,553,500.00

209,553,500.00

Surplus arising from business combination under common control

2

39,195,609.23

39,195,609.23

21

15,208,893.30

10,829,452.62

15,208,893.30

10,829,452.62

2, 22

235,173,359.55

175,838,642.94

136,519,182.73

86,090,619.90

949,131,362.08

885,417,204.79

811,281,576.03

756,473,572.52

2,015,798,105.82

1,748,019,392.33

1,581,475,872.53

1,335,856,690.26

-

-

Retained earnings Appropriated to legal reserve Unappropriated Total equity Total liabilities and equity

60


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF COMPREHENSIVE INCOME FOR EACH OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010

(Unit: Baht) Note

Consolidated

Separate

financial statements

financial statements

2011

2010

2011

2010

Revenue from sales

493,206,310.41

225,820,222.38

510,660,178.41

281,915,227.38

Revenue from rental and transportation services

463,195,842.33

375,704,604.49

97,014,921.87

102,874,668.59

956,402,152.74

601,524,826.87

607,675,100.28

384,789,895.97

Revenue from sales and services

3, 4

Total revenue from sales and services Cost of sales and services

3, 4

Cost of sales

(350,624,712.62) (126,662,510.39) (397,384,509.47) (242,012,405.54)

Cost of rental and transportation services

23

Total cost of sales and services

(302,533,136.36) (270,194,632.37)

(94,361,428.31)

(89,719,917.20)

(653,157,848.98) (396,857,142.76) (491,745,937.78) (331,732,322.74)

Gross profit Other income

4

303,244,303.76

204,667,684.11

115,929,162.50

53,057,573.23

4,374,886.78

23,698,447.75

19,814,469.45

27,571,218.18

64,997,950.00

54,998,010.00

Dividend income from subsidiaries

4, 22

Selling and service expenses

4, 23

(31,827,287.22)

(24,191,781.96)

(12,352,848.06)

(3,618,189.22)

Administrative expenses

4, 23

(115,669,527.30)

(90,274,304.02)

(66,089,116.10)

(49,550,326.40)

Finance costs

4, 24

(49,423,223.04)

(56,064,037.92)

(34,710,804.28)

(34,419,043.15)

110,699,152.98

57,836,007.96

87,588,813.51

48,039,242.64

(11,978,872.69) 98,720,280.29

57,836,007.96

87,588,813.51

48,039,242.64

98,720,280.29

57,836,007.96

87,588,813.51

48,039,242.64

Equity holders of the Company

98,720,280.29

57,836,007.96

87,588,813.51

48,039,242.64

Non-controlling interests

98,720,280.29

57,836,007.96

87,588,813.51

48,039,242.64

0.22

0.13

0.19

0.11

450,000,000

450,000,000

450,000,000

450,000,000

Profit before income tax Income tax expense Profit for the years

25

Total comprehensive income

-

-

Profit for the years attributable to:

Basic earnings per share Profit attributable to equity holders of the Company

2, 3

Weighted average number of ordinary shares (Shares)

3

61


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY FOR EACH OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated financial statements Retained earnings Premium on Surplus arising from business ordinary shares combination under common control Appropriated Unappropriated 209,553,500.00 39,195,609.23 8,427,490.49 120,404,597.11

Total 827,581,196.83

450,000,000.00 450,000,000.00

209,553,500.00 209,553,500.00

39,195,609.23 39,195,609.23

2,401,962.13 10,829,452.62 10,829,452.62

57,836,007.96 (2,401,962.13) 175,838,642.94 (8,006,123.00) 167,832,519.94

57,836,007.96 885,417,204.79 (8,006,123.00) 877,411,081.79

450,000,000.00

209,553,500.00

39,195,609.23

4,379,440.68 15,208,893.30

98,720,280.29 (4,379,440.68) (27,000,000.00) 235,173,359.55

98,720,280.29 (27,000,000.00) 949,131,362.08

(Unit: Baht) Note Beginning balance as at January 1, 2010 Changes in equity Total comprehensive income Legal reserve Ending balance as at December 31, 2010 Effects of changes in accounting policies Adjusted balance Changes in equity Total comprehensive income Legal reserve Dividend payment Ending balance as at December 31, 2011

21 2

21 22

Issued and paid-up share capital 450,000,000.00

62


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN EQUITY FOR EACH OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010 (Unit: Baht) Note Beginning balance as at January 1, 2010 Changes in equity Total comprehensive income Legal reserve Ending balance as at December 31, 2010 Effects of changes in accounting policies Adjusted balance Changes in equity Total comprehensive income Legal reserve Dividend payment Ending balance as at December 31, 2011

21 2

21 22

Issued and paid-up share capital 450,000,000.00

Separate financial statements Premium on Retained earnings ordinary shares Appropriated Unappropriated 209,553,500.00 8,427,490.49 40,453,339.39

Total 708,434,329.88

450,000,000.00 450,000,000.00

209,553,500.00 209,553,500.00

2,401,962.13 10,829,452.62 10,829,452.62

48,039,242.64 (2,401,962.13) 86,090,619.90 (5,780,810.00) 80,309,809.90

48,039,242.64 756,473,572.52 (5,780,810.00) 750,692,762.52

450,000,000.00

209,553,500.00

4,379,440.68 15,208,893.30

87,588,813.51 (4,379,440.68) (27,000,000.00) 136,519,182.73

87,588,813.51 (27,000,000.00) 811,281,576.03

63


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR EACH OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010 (Unit: Baht)

Consolidated

Separate

financial statements

financial statements

2011

2010

2011

2010

110,699,152.98

57,836,007.96

87,588,813.51

48,039,242.64

113,635,914.08

119,287,294.36

59,068,124.14

52,510,586.42

9,130,982.82

(6,894,726.99)

253,000.00

Loss from obsolete stock (reversal)

147,773.10

(6,444,919.11)

147,773.10

(6,444,919.11)

Loss from impairment of assets and written-off assets

972,980.69

2,517,160.89

2,931.85

2,516,045.10

(Gain) loss on sales of assets

(745,008.28)

(862,088.05)

(410,229.60)

19,992.64

Provision

6,011,091.37

6,011,091.37

13,031,688.31

35,677.37

Cash flows from operating activities Profit before income tax Adjustments to reconcile profit before income tax to net cash provided by (used in) operating activities Depreciation Doubtful accounts (reversal)

Unrealized loss on exchange rate Dividend income from subsidiaries

-

-

-

-

-

13,031,688.31

35,677.37

(64,997,950.00)

(54,998,010.00)

Interest incomes

(255,728.70)

(399,623.63)

(215,101.56)

(238,136.05)

Interest expenses

48,849,252.34

56,064,037.92

34,509,368.28

34,419,043.15

Provision incurred from the employee benefit obligations

1,969,674.70

-

1,392,306.69

-

Profit from operating activities before change in operating assets and liabilities

303,447,773.41

227,149,912.09

130,370,724.72

75,859,522.16

(44,749,592.34)

(20,344,498.04)

(37,076,439.31)

19,065,919.32

Inventories

7,327,261.77

17,562,397.54

(6,460,568.91)

(5,697,127.08)

Other current assets

(4,926,864.21)

20,012,275.10

(5,284,622.31)

16,284,154.90

Restricted bank deposits

(1,922,272.82)

2,109,569.66

(1,281.71)

(3,040.00)

825,915.18

1,844,989.71

825,915.18

1,844,989.71

1,273,048.34

(223,033.89)

1,275,660.00

(179,660.00)

Change in operating assets (increase) decrease Trade and other receivables

Accounts receivable under finance leases Other non-current assets

64


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR EACH OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010 (Unit: Baht)

Consolidated

Separate

financial statements

financial statements

2011

2010

2011

2010

137,246,397.31

53,885,324.28

97,064,564.28

18,478,526.97

Other current liabilities

(3,452,140.22)

(23,904,625.20)

(5,717,169.71)

(26,001,776.36)

Employee benefit obligations

(1,158,144.67)

Other non-current liabilities

(127,472.85)

238,959.91

14,083.34

33,463.41

393,783,908.90

278,331,271.16

174,113,786.90

99,684,973.03

254,751.70

399,623.63

59,485.12

276,627.47

Cash receipt from tax return

25,971,842.56

12,208,268.86

5,172,060.56

4,744,482.75

Income tax paid

(26,641,353.04)

(24,155,832.59)

(4,621,429.32)

(5,692,977.63)

393,369,150.12

266,783,331.06

174,723,903.26

99,013,105.62

64,997,950.00

54,998,010.00

Change in operating liabilities increase (decrease) Trade and other payables

Cash generated from operations Interest received

Net cash provided by operating activities

-

(897,078.67)

-

Cash flows from investing activities Dividend received from subsidiaries

-

(Increase) decrease in current investments

159,586.90

Increase in short-term loans to related parties

-

Purchase of building and equipment

(835.16) -

(30,000,000.00)

-

(33,922,167.79)

(61,316,569.74)

(27,621,944.11)

(34,490,394.69)

919,219.15

900,207.28

582,570.09

2,766.40

(32,843,361.74)

(60,417,197.62)

7,958,575.98

20,510,381.71

(25,711,698.87)

25,380,969.50

(12,315,989.94)

26,425,379.02

Cash receipt from short-term loans from related parties

8,200,000.00

38,550,000.00

106,900,000.00

53,320,000.00

Repayment of short-term loans from related parties

(9,650,000.00)

(44,150,000.00)

(57,750,000.00)

(53,520,000.00)

Cash receipt from sales of assets Net cash provided (used in) investing activities Cash flows from financing activities Increase (decrease) in bank overdrafts and short-term loans from financial institutions

Repayment of other short-term loans

-

(2,033,000.00)

-

(2,033,000.00)

Cash receipt from sales and leaseback agreement and finance lease agreement

-

94,858,010.90

-

29,648,338.00

Repayment of liabilities under finance leases

(160,808,230.75) (189,089,239.53)

Cash receipt from long-term loans from financial institutions

-

Repayment of long-term loans from financial institutions

(50,567,478.08)

65

7,100,000.00 (77,686,110.97)

(78,125,558.68) (45,551,478.08)

(72,440,312.18) 7,100,000.00 (72,671,450.39)


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR EACH OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010 Consolidated

Separate

financial statements

financial statements

(Unit: Baht) 2011

2010

2011

2010

Interest paid

(48,833,844.19)

(57,351,638.37)

(36,806,275.92)

(34,720,919.69)

Dividend payment

(26,987,208.55)

(900.00)

(26,987,208.55)

(900.00)

Net cash used in financing activities

(314,358,460.44) (204,421,908.47) (150,636,511.17) (118,892,865.24)

Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the years Cash and cash equivalents at the end of the years

46,167,327.94

1,944,224.97

32,045,968.07

630,622.09

9,669,291.92

7,725,066.95

853,220.58

222,598.49

55,836,619.86

9,669,291.92

32,899,188.65

853,220.58

Additional details of non-cash items In the year 2011 1. The Company and subsidiaries had purchased the machinery and equipment for rent and the vehicles at cost in the amount of Baht 174.65 million (year 2010: Baht 5.50 million) in the separate financial statements and in the amount of Baht 298.39 million (year 2010: Baht 7.96 million) in the consolidated financial statements by cash payment in the amount of Baht 5.38 million (year 2010: Baht 0.94 million) in the separate financial statements and in the amount of Baht 17.62 million (year 2010: Baht 1.55 million) in the consolidated financial statements and by entering into a finance lease agreement for the remainder. 2. The Company and subsidiaries had transferred thier machinery and equipment for rent to inventories at net book value in the amount of Baht 16.69 million (year 2010: Baht 51.64 million) in the separate financial statements and in the amount of Baht 29.87 million (year 2010: Baht 74.85 million) in the consolidated financial statements. 3. The Company had transferred inventories to machines and equipment for rent at net book value in the amount of Baht 17.17 million (year 2010: Baht 8.48 million) in the consolidated financial statements and in the separate financial statements. 4. In the year 2010, the Company included interest from loan in the amount of Baht 0.56 million, as a part of cost of building in progress.

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ANNUAL REPORT 2011

CHUKAI PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO THE FINANCIAL STATEMENTS FOR EACH OF THE YEARS ENDED DECEMBER 31, 2011 AND 2010 1.

GENERAL INFORMATION Chukai Public Company Limited, “the Company” was incorporated in Thailand under the Civil and Commercial Code on May 26, 1997 and became a public company limited on June 8, 2005. The Company’s principal activities are to trade, repair and provide maintenance services, rental services and transportation services for cranes, forklifts, trailers and trucks. On January 29, 2008, the Company was listed on the Stock Exchange of Thailand in Market for Alternative Investment (MAI). The office of the Company and the factory are at 42/62, Moo 14, Bangkaew, Bangplee, Samutprakarn.

2.

BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The accompanying financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) in conformity with generally accepted accounting principles in Thailand. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated September 28, 2011, issued under the Accounting Act B.E. 2543. The accompanying financial statements have been prepared in the Thai language and expressed in Thai Baht. Such financial statements have been prepared for domestic reporting purposes. For the convenience of the readers not conversant with the Thai language, an English version of the financial statements has been provided by translating from the Thai version of the financial statements. The Group operates the business related to sales, provide maintenance services, rental services and transportation services for cranes, forklifts, trailers and trucks. Therefore, the Group is not required to disclose further segment information. The preparation of financial statements in conformity with Thai Financial Reporting Standards requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Subsequent actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, and in the period of the revision and future periods, if the revision affects both current and future periods.

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BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS The consolidated financial statements for each of the years ended December 31, 2011 and 2010 consisted of the financial statements of Chukai Public Company Limited, and subsidiaries (together referred to as “the Group”) as follows:

Subsidiaries The Crane Lamechabang Co., Ltd. The Crane Rayong Co., Ltd. The Crane Heavy Lift Co., Ltd. The Crane Service Co., Ltd.

Located in

Business Type

Thailand Thailand Thailand Thailand

Sales and rental service for cranes Sales and rental service for cranes Sales and rental service for cranes Sales and rental service for cranes

Percentage of holding 2011 2010 100% 100% 100% 100%

100% 100% 100% 100%

All significant intercompany transactions and accounts are eliminated in preparing the consolidated financial statements. The preparations of the consolidated financial statements have been based on the same accounting policies for the same or similar accounting transactions or accounting events. Subsidiaries are an entity controlled by the Company. Control exists when the Company has the power, directly or indirectly through other subsidiaries, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The surplus arising from business combination under common control is the difference between the net book value of such acquired investment and cost of acquired investment from restructuring into the Company under common control. These said investments are from merging the entities which have the same shareholders and management team. The said surplus is presented in the statement of financial position under equity. Transition to new and revised TFRS In the year 2010 and 2011, the Federation of Accounting Professions (“FAP”) has issued Notifications, mandating the use of new and revised Thai Accounting Standards (“TAS”), Thai Financial Reporting Standards (“TFRS”), Thai Financial Reporting Interpretation (“TFRI”), Thai Interpretation (“TI”) and guidelines which are effective for the financial statements for the period beginning on or after January 1, 2011 as follows:

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ANNUAL REPORT 2011

Topic

AS/TFRS/TFRI/TI/FAP’s Announcements TAS 1 (revised 2009)

Presentation of Financial Statements

TAS 2 (revised 2009)

Inventories

TAS 7 (revised 2009)

Statement of Cash Flows

TAS 8 (revised 2009)

Accounting Policies, Changes in Accounting Estimates and Errors

TAS 10 (revised 2009)

Events After the Reporting Period

TAS 11 (revised 2009)

Construction Contracts

TAS 16 (revised 2009)

Property, Plant and Equipment

TAS 17 (revised 2009)

Leases

TAS 18 (revised 2009)

Revenue

TAS 19

Employee Benefits

TAS 23 (revised 2009)

Borrowing Costs

TAS 24 (revised 2009)

Related Party Disclosures

TAS 26

Accounting and Reporting by Retirement Benefit Plans

TAS 27 (revised 2009)

Consolidated and Separate Financial Statements

TAS 28 (revised 2009)

Investments in Associates

TAS 29

Financial Reporting in Hyperinflationary Economies

TAS 31 (revised 2009)

Interests in Joint Ventures

TAS 33 (revised 2009)

Earnings per Share

TAS 34 (revised 2009)

Interim Financial Reporting

TAS 36 (revised 2009)

Impairment of Assets

TAS 37 (revised 2009)

Provisions, Contingent Liabilities and Contingent Assets

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Topic

AS/TFRS/TFRI/TI/FAP’s Announcements TAS 38 (revised 2009)

Intangible Assets

TAS 40 (revised 2009)

Investment Property

TFRS 2

Share – Based Payments

TFRS 3 (revised 2009)

Business Combinations

TFRS 5 (revised 2009)

Non-current Assets Held for Sale and Discontinued Operations

TFRS 6

Exploration for and Evaluation of Mineral Resources

TFRI 15

Agreements for the Construction of Real Estate

TI 31

Revenue – Barter Transactions Involving Advertising Services

No. 16/2554

Disclosure Guidance on Related Party Transactions with Government

No. 17/2554

Transitional Procedures for Other Long-term Employee Benefits

No. 18/2554

Accounting Guidance on Revaluation of Assets

No. 19/2554

Accounting Guidance for Condominiums

In the year 2011, the Group has adopted new and revised TFRS which are effective for the financial statements for the period beginning on or after January 1, 2011. Such transition affected the presentation of the financial statements for the year ended December 31, 2010 which have been presented herewith for comparative purposes in conformity with the presentation of the financial statements for the year ended December 31, 2011 and the Group’s overall financial position and financial performance as follows: TAS 1 (revised 2009) Presentation of Financial Statements Under the revised TAS, a set of financial statements comprises: - Statements of financial position; - Statements of comprehensive income; - Statements of changes in equity; - Statements of cash flows; and 70


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

- Notes to the financial statements. Comparative information has been re-presented so that it also is in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects, there is no impact on reported profit or earnings per share. TAS 16 (revised 2009) - Property, Plant and Equipment The main changes of TAS 16 (revised 2009) and affecting the Group as follows: The residual value of property, plant and equipment has to be measured at the amount estimated receivable currently for the sales of asset if the asset were already of the age and in the condition expected at the end of its useful life. Furthermore, the residual value and useful life of an asset have to be reviewed at least at each financial year-end. The changes have been applied prospectively in accordance with the transitional provisions of the revised TAS. TAS 19 - Employee Benefits The management of the Group has determined that the obligation incurred from the employee benefits as at January 1, 2011 for post-employment benefits is the amount of Baht 8.01 million in the consolidated financial statements and Baht 5.78 million in the separate financial statements which applied a transitional provision that such liability is recognized and accounted for immediately in retained earnings at the transition date (see Note 19)

. Effect from the adoption of Thai Financial Reporting Standards

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

From January 1, 2011, the Group has adopted of new and revised TFRS, the effects on the financial statements are as follows: Consolidated financial statements Statements of comprehensive income for the year ended December 31, 2011 Increase (decrease) in cost of rental and transportation services Increase in selling and service expenses Decrease in administrative expenses Increase in profit for the year

(1,207,108.80) 65,889.09 (3,345,693.64) 4,486,913.35

59,904.01 6,766.01 (771,155.64) 704,485.62

0.010

0.002

175,838,642.94 (8,006,123.00) 167,832,519.94

86,090,619.90 (5,780,810.00) 80,309,809.90

Increase in basic earnings per share Statements of changes in equity Retained earnings - unappropriated as at January 1, 2011 Increase in employee benefit obligations Adjusted balance

(Unit: Baht) Separate financial statements

Adoption of new and revised Thai Financial Reporting Standards In the year 2010 and 2011, the Federation of Accounting Professions (“FAP”) has issued new and revised Thai Accounting Standards (“TAS”), Thai Interpretations (“TI”) which are effective for the financial statements for the period beginning on or after January 1, 2013 as follows: TAS/TI

Topic

TAS 12

Income Taxes

TAS 20 (revised 2009)

Accounting for Government Grants and Disclosures of Government Assistance

TAS 21 (revised 2009)

The Effects of Changes in Foreign Exchange Rate

TI 10

Government Assistance – No Specific Relation to Operating Activities

TI 21

Income Taxes – Recovery of Revalued Non-Depreciable Assets

TI 25

Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders

The management of the Group is assessing the impacts of these standards and interpretation on the financial statements for the year in which they are initially applied. 3.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 72


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

The measurement bases used in preparing the financial statements Other than those disclosed elsewhere in the summary of significant accounting policies and other notes to the financial statements, the financial statements are prepared on the historical cost basis. Revenues Revenue excludes value added taxes or other sales taxes and is arrived at after deduction of trade discounts. Revenues from services of rental and transportation are recognized when services are rendered. Revenue is recognized in the statement of comprehensive income when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognized if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Revenue from rental Revenue from rental is recognized to the statement of comprehensive income by the straight-line method based on agreement. Interest income Interest income is recognized as interest accrues, based on the effective rate method. Dividends income Dividends incomes are recognized when the right to receive the dividends is established. Other income Other income is recognized on an accrual basis. Expenses Operating leases Payments made under operating leases are recognized in the statement of comprehensive income on a straight-line basis over the term of the lease. Lease incentives received are recognized in the statement of comprehensive income as an integral part of the total lease payments made. Contingent rentals are charged to the statement of comprehensive income in the accounting period in which they are incurred. Finance costs Interest expenses and similar costs are charged to the statement of comprehensive income in the period in which they are incurred, except to the extent that they are capitalized as being directly attributable to the acquisition, construction or production 73


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component of finance lease payments is recognized in the statement of comprehensive income using the effective interest rate method. Expenses are recognized on an accrual basis. Employee benefits Short-term benefits The Group recognizes salaries, wages, bonus and social security contribution as expenses on an accrual basis. Post-employment benefits – defined contribution plan The Group operates a provident fund that is a defined contribution plan. The assets of which are held in a separate trust fund. The provident fund is funded by payments from employees and the relevant Group companies. Contributions to the provident fund are charged to the statement of comprehensive income in the period to which they relate. Post-employment benefits – defined benefit plan The employee benefit obligations in relation to the severance payment under the labor law are recognized as a charge to results of operations over the employee’s service period. It is calculated by the estimation of the amount of future benefit to be earned by the employee in return for the service provided to the Group through the service period up to the retirement age and the amount is discounted to determine the present value. The reference discount rate is the yield rate of government bonds as at the reporting date. The calculation is based on the actuarial technique using the Projected Unit Credit Method. When the employee benefits are improved, the portion of the increased benefit relating to past service rendered by employee is recognized in the statement of comprehensive income on a straight-line basis over the average period until the benefits become vested. When the actuarial assumptions are changed, the Group recognizes actuarial gains (losses) in the profit or loss in the period in which they arise. Termination benefits The Group recognizes termination benefits as a liability and expense when the Group terminates the employment of an employee or group of employees before the normal retirement date. Cash and cash equivalents Cash and cash equivalents are cash on hand, current deposits and savings deposits, cash at bank with an original maturity of 3 months and short-term investments with high liquidity excluded term deposits and deposits at bank on obligation. Current investments 74


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Current investments are the fixed deposits with maturity within 1 year. Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts. Trade accounts receivable are stated at the net realizable value. The Group recorded allowance for doubtful accounts that is provided for the estimated losses that may be incurred in collection of receivables. The allowance is generally based on collection experiences and analysis of debtor aging. In determined an allowance for doubtful accounts, the management needs to make judgment for estimated losses for each outstanding debtor. The allowances for doubtful accounts are determined through a combination of analysis of debt aging, collection experience, and taking into account change in the current economic conditions. However, the use of different estimates and assumptions could affect the amounts of allowances for receivable losses and adjustments to the allowances may therefore be required in the future. Inventories Inventories are valued at the lower of the specific identification cost method or net realizable value. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories, cost includes an appropriate share of overheads based on normal operating capacity. Net realizable value is the estimated selling price in the normal course of business less the costs to make the sale. A provision for devaluation of inventories is made for all deteriorated, damaged, obsolete and slow-moving inventories. Non-current assets held for sale Non-current assets held for sale are valued at the lower of its carrying amount and fair value less costs to sell. Investments in subsidiaries Investments in subsidiaries in the separate financial statements of the Company are accounted for using the cost method less allowance for impairment loss (if any). Property, plant and equipment Lands are stated at cost. Buildings and equipment are stated at cost less accumulated depreciation and allowance for impairment (if any). Depreciation 75


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Depreciation is computed by the straight–line method based on the estimated useful lives of assets as follows: Years 5 30 5 5, 7 and 15 5 5

Land improvements Buildings and buildings for rent Machinery and factory equipment Machinery and equipment for rent Furniture and office equipment Vehicles

Year 2011, the Group had reviewed the estimated useful life and residual value of assets as follows:

Building Machinery and equipment for rent Trailers Trucks Others Vehicles

Useful life (years) New Former 30 20 5 5 5 5

5 5 5 5

Residual value (Baht) New Former 1 1 10% of cost 10% of cost 10% of cost 20% of cost

1 1 1 1

Depreciation is included in determining income and no depreciation is provided on land, part of land improvement and construction in progress. Repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits to be used during more than one period. Major renovations are depreciated over the remaining useful life of the related asset. Gains and losses on disposals are determined by comparing the proceeds with carrying amount and are included in the statement of comprehensive income. The direct expenses concerned with the assets include interest paid from the borrowing for the acquisitions of the above assets before completion of the assets are recognized as cost of the assets. The machinery and equipment for lease had an objective to lease and sell. Therefore, the machinery and equipment which did not sell, then the assets go to rent were recorded in “Property, plant and equipment” and were depreciated over its useful life as above recorded in “Cost of rental and transportation services” until there are sales will stop the depreciation and will be reclassified to

76


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

be “Inventories” if sold out and will recognized the cost of sales at the net book value (cost less accumulated depreciation) on the disposed date to the statement of comprehensive income in the period in which they are incurred. Finance lease Leases of property, plant or equipment which substantially transfer all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property or the present value of the minimum lease payments. Each lease payment is allocated to the principal and to the finance costs so as to achieve a constant rate on the finance balance outstanding. The outstanding rental obligations, net of finance costs, are included in other long-term payables. The interest element of the finance cost is charged to the statement of comprehensive income over the lease period. The property, plant or equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset or the lease term. Impairment of assets The carrying amounts of the Group’s assets are reviewed at each in the statement of financial position date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognized in the statement of comprehensive income unless it reverses a previous revaluation credited to equity, in which case it is charged to equity. Calculation of recoverable amount The recoverable amount is the greater of the assets’ net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Foreign currencies accounts Transactions in foreign currencies Transactions in foreign currencies are converted at the foreign exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the statement of financial position date are converted to Thai Baht at 77


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

the foreign exchange rates ruling at that date. Forward exchange contracts at the transaction date are converted to Thai Baht by using the contract rates. Outstanding forward exchange contracts are marked to market by comparing contract rates to forward rates established by the contracting Bank with the same maturity. At each balance sheet date, the unrealized gains or losses on outstanding forward exchange contracts, calculated as describe above, are included within other receivables or other payables from forward exchange contracts in the statement of financial position. Gain or loss on conversion is included in the statement of comprehensive income. Income tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the statement of financial position date. Dividends Dividend and interim dividend payment are recorded in the consolidated and separate financial statements in the period in which they are approved by Shareholders’ meeting and Board of Directors’ meeting. Basic earnings per share Basic earnings per share is calculated by dividing net profit for each of the years by the weighted average number of ordinary shares outstanding during the years. Provisions A provision is recognized in the statement of financial position when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Significant judgments and estimates are as follows: Commercial disputes and litigation The Company and subsidiaries has contingent liabilities as a result of commercial disputes and litigation. The Company’s management has used judgment to assess of the results of the commercial disputes and litigation and believes that no loss will result. Therefore no provision is recorded as at the statement of financial position date. However, actual results could differ from the estimates. 4.

TRANSACTIONS WITH RELATED PARTIES

78


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ANNUAL REPORT 2011

The Company had transactions with related parties. These parties were related through common shareholders and/or directorships. The significant transactions with related parties as included in the financial statements are determined at the prices in line occurring in the normal course of business based on the market price in general or the price as stipulated in the agreement if no market price exists. The significant balances of assets, liabilities and other transactions occurred with those related parties were as follows: Significant transactions with related parties for each of the years ended December 31, 2011 and 2010.

(Unit: Baht) Consolidated financial statements 2011 2010 Subsidiaries The Crane Lamechabang Co., Ltd. Sales of goods Revenues from rental and transportation services Revenues from repairment Revenues from rental building Revenues from consulting Other income Purchase of land and building Purchase of goods Cost of sales Cost of rental and transportation services Services and administrative expenses

-

79

Separate financial statements 2011 2010

-

369,350.00 20,542,101.59 2,220,860.00 1,148,400.00 3,600,000.00 195,597.06 11,419,933.16 13,952,523.37 705,620.18 277,530.51 36,541.98

1,036,555.00 14,810,433.66 4,298,743.60 1,148,400.00 3,600,000.00 205,324.87 37,010,607.48 454,426.70 223,749.81 -


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

(Unit: Baht) Consolidated financial statements 2011 2010 The Crane Rayong Co., Ltd. Sales of goods Revenues from rental and transportation services Revenues from repairment Revenues from consulting Other income Interest income Dividend income Purchase of goods Cost of sales Cost of rental and transportation services The Crane Heavy Lift Co., Ltd. Sales of goods Revenues from rental and transportation services Revenues from repairment Revenues from consulting Other income Dividend income Purchase of goods Cost of sales Cost of rental and transportation services Interest expenses The Crane Service Co., Ltd. Sales of goods Revenues from rental and transportation services Revenues from repairment Revenues from consulting Revenues from rental building Other income

80

Separate financial statements 2011 2010

-

-

18,143,800.00 29,979,468.20 227,000.00 4,200,000.00 309,334.70 155,616.44 49,999,000.00 2,859,813.08 21,880.00 217,756.57

44,791,720.00 36,355,216.93 2,785,105.00 4,200,000.00 234,144.79 5,293.16 9,999,800.00 14,167,663.45 622,035.05 453,158.34

-

-

222,050.00 7,551,266.74 318,300.00 3,600,000.00 207,397.06 15,238,224.30 14,400.00 45,600.00 58,301.37

15,189,400.00 14,278,083.41 496,120.00 3,600,000.00 229,883.49 19,999,960.00 14,976,000.00 128,000.00 69,245.60 -

-

-

268,668.00 10,056,842.29 6,735,715.00 3,600,000.00 600,000.00 1,150,472.82

30,377,330.00 5,717,582.44 6,245,530.90 3,600,000.00 600,000.00 1,292,383.55


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

(Unit: Baht)

Dividend income Purchase of goods Cost of sales Cost of rental and transportation services Services and administrative expenses Interest expenses Related Persons (Shareholders and Director) Rental expenses

Consolidated financial statements 2011 2010 600,000.00

-

600,000.00

Separate financial statements 2011 2010 14,998,950.00 24,998,250.00 19,598,551.41 43,136,598.17 153,697.35 479,219.20 1,504,625.13 1,610,511.84 528,449.25 306,105.41 2,709,974.28 1,506,819.39 -

-

Key management personnel compensation Key management personnel compensation for each of the years ended December 31, 2011 and 2010 consisted of:

(Unit: Baht)

Short-term benefits Post-employment benefits Total

Consolidated financial statements 2011 2010 32,704,146.31 26,224,924.71 912,402.33 33,616,548.64 26,224,924.71

81

Separate financial statements 2011 2010 32,226,318.12 25,739,110.53 912,402.33 33,138,720.45 25,739,110.53


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

The significant balance of assets and liabilities with related parties as at December 31, 2011 and 2010 is as follow:

(Unit: Baht) Consolidated financial statements 2011 2010 Subsidiaries The Crane Lamechabang Co., Ltd. Deposit The Crane Rayong Co., Ltd. Accrued interest expenses The Crane Heavy Lift Co., Ltd. Accrued interest expenses The Crane Service Co., Ltd. Accrued interest expenses Related Persons (Shareholders and Director) Accrued expenses

Separate financial statements 2011 2010

-

-

95,700.00

-

-

155,616.44

-

-

-

58,301.37

-

-

-

160,616.43

5,950,000.00

5,350,000.00

-

95,700.00

2,495,354.61 -

Trade accounts receivable – related parties Trade accounts receivable – related parties as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Consolidated financial statements 2011 2010 108,408.12 108,408.12 (108,408.12) -

The Crane Lamechabang Co., Ltd. The Crane Rayong Co., Ltd. The Crane Heavy Lift Co., Ltd. The Crane Service Co., Ltd. Crane Today Co., Ltd. Total Less: Allowance for doubtful accounts Trade accounts receivable – related parties - net

82

Separate financial statements 2011 2010 4,570,152.22 2,647,822.00 11,500,971.59 12,609,885.92 2,770,979.00 1,205,084.29 4,935,748.40 857,894.70 108,408.12 23,777,851.21 17,429,095.03 (108,408.12) 23,777,851.21 17,320,686.91


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Trade accounts payable – related parties Trade accounts payable – related parties as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Separate financial statements 2011 2010 8,433,777.28 14,035,557.69 44,416.00 51,856.00 3,700,000.00 2,601,722.80 21,204,827.19 49,941,427.90 33,383,020.47 66,630,564.39

The Crane Lamechabang Co., Ltd. The Crane Rayong Co., Ltd. The Crane Heavy Lift Co., Ltd. The Crane Service Co., Ltd. Total Short–term loans to related parties Short–term loans to related parties as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Separate financial statements 2011 2010 30,000,000.00

The Crane Rayong Co., Ltd.

Movements of short–term loans to related parties for each of years ended December 31, 2011 and 2010 were as follows:

(Unit: Baht) Separate financial statements 2011 2010 30,000,000.00 2,650,000.00 (2,650,000.00) 30,000,000.00 -

Balance at the beginning Increase Decrease Balance at the end

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ANNUAL REPORT 2011

The Company had short-term loans to The Crane Rayong Company Limited (“subsidiary”) by issued promissory notes, due at call with interest charged at the rate referred with the interest rate of minimum overdraft rate (MOR) and unsecured. Short–term loans from related parties Short–term loans from related parties as at December 31, 2011 and 2010 consisted of:

(Unit: Baht)

The Crane Service Co., Ltd. The Crane Heavy Lift Co., Ltd. Director Total

Consolidated financial statements 2011 2010 1,450,000.00 1,450,000.00

Separate financial statements 2011 2010 65,000,000.00 22,400,000.00 8,000,000.00 1,450,000.00 73,000,000.00 23,850,000.00

Movements of short–term loans from related parties for each of the years ended December 31, 2011 and 2010 were as follows:

(Unit: Baht)

Balance at the beginning Increase Decrease Balance at the end

Consolidated financial statements 2011 2010 7,050,000.00 1,450,000.00 8,200,000.00 38,550,000.00 (9,650,000.00) (44,150,000.00) 1,450,000.00

Separate financial statements 2011 2010 23,850,000.00 24,050,000.00 106,900,000.00 53,320,000.00 (57,750,000.00) (53,520,000.00) 73,000,000.00 23,850,000.00

The Company borrowed short-term loans from The Crane Service Company Limited and The Crane Heavy Lift Company Limited (“subsidiary”) by issued promissory notes, due at call with interest charged at the rate referred with the interest rate of minimum retail rate (MRR) and referred with the interest rate of fixed deposit and unsecured. For the short-term loans from related person are by issued promissory notes, due at call without interest charged and unsecured.

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CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Co-guarantee for liabilities with related parties As at December 31, 2011, the Company and its subsidiaries had co-guarantee liabilities with related parties as follows: The Company The Company had co-guarantee for liabilities under finance leases of subsidiaries at book value in the amount of Baht 180.60 million (see Note 27). Subsidiaries The Subsidiaries had co-guarantee for liabilities under finance leases of the Company at book value in the amount of Baht 79.55 million (see Note 27). The Subsidiaries had co-guarantee for liabilities under finance leases of other subsidiaries at book value in the amount of Baht 18.37 million (see Note 27). Related Persons (Director) Related Persons had co-guarantee for liabilities under finance leases of the Company and subsidiaries at book value in the amount of Baht 419.29 million. Nature of relationship

Name The Crane Lamechabang Co., Ltd. The Crane Rayong Co., Ltd. The Crane Heavy Lift Co., Ltd. The Crane Service Co., Ltd. Crane Today Co., Ltd.

Country Relation Thailand Subsidiary Thailand Subsidiary Thailand Subsidiary Thailand Subsidiary Thailand Other related company

Type of relation Direct holding Direct holding Direct holding Direct holding Former common management and/or shareholders

Bases of measurement for intercompany revenues and expenses

Pricing policies Purchase - sale of land and machinery and equipment for rent or goods Purchase - sale of land including construction Rendering of rent and transportation services Rendering of repair services Services and administrative expenses Interest income and expense

85

Market price Stipulate in the agreement Market price minus discount 20% - 35% Market price Market price Referred with the bank's interest rate.


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

The discount mentioned above occurred from the difference by nature of service provided in the section of staff who control the machinery and equipment for rent. 5.

CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, 2011 and 2010 consisted of:

(Unit: Baht)

Cash Cash at banks - savings deposits Cash at banks - current deposits Total

Consolidated financial statements 2011 2010 230,920.00 234,285.00 37,792,889.28 1,207,298.31 17,812,810.58 8,227,708.61 55,836,619.86 9,669,291.92

86

Separate financial statements 2011 2010 45,000.00 45,000.00 27,633,775.74 46,360.44 5,220,412.91 761,860.14 32,899,188.65 853,220.58


CHU KAI PUBLIC COMPANY LIMITED 6.

ANNUAL REPORT 2011

TRADE AND OTHER RECEIVABLES Trade and other receivables as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Consolidated

Separate

financial statements

financial statements

2011

2010

2011

2010

108,408.12

23,777,851.21

17,429,095.03

155,016,733.15

112,497,885.79

36,579,810.50

5,967,464.88

Total

155,016,733.15

112,606,293.91

60,357,661.71

23,396,559.91

Less: Allowance for doubtful accounts

(29,067,444.57)

(20,154,869.87)

(428,000.00)

(283,408.12)

Trade receivables - net

125,949,288.58

92,451,424.04

59,929,661.71

23,113,151.79

5,975,129.78

4,338,700.37

155,616.44

556,722.26

151,041.79

29,528.51

Others

2,385,657.73

2,316,045.63

4,364.64

Total

8,917,509.77

6,805,787.79

189,509.59

Less: Allowance for doubtful accounts

(2,290,377.01)

(2,300,377.01)

Other receivables - net

6,627,132.76

4,505,410.78

189,509.59

26,963.76

132,576,421.34

96,956,834.82

60,119,171.30

23,140,115.55

Trade receivables Related parties Other parties

Accrued income Advanced payment

Trade and other receivables - net

-

87

-

26,963.76 26,963.76 -


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

As at December 31, 2011 and 2010, the Company and subsidiaries had outstanding balances of trade accounts receivable aged by number of months as follows:

(Unit: Baht) Consolidated financial statements 2011 2010 Trade accounts receivable - other parties Current Overdue Less than 3 months Over 3 months up to 6 months Over 6 months up to 12 months Over 12 months Total Less: Allowance for doubtful accounts Trade accounts receivable - other parties - net Trade accounts receivable - related parties Current Overdue Less than 3 months Over 3 months up to 6 months Over 12 months Total Less: Allowance for doubtful accounts Trade accounts receivable - related companies - net Trade accounts receivable - net

42,311,424.89

Separate financial statements 2011 2010 722,838.51

3,604,884.50

82,146,574.54 45,323,835.65 35,000,971.99 7,603,852.85 5,076,034.32 856,000.00 2,564,513.54 1,836,854.22 20,390,367.33 17,571,307.64 155,016,733.15 112,497,885.79 36,579,810.50 (29,067,444.57) (20,046,461.75) (428,000.00) 125,949,288.58 92,451,424.04 36,151,810.50

2,362,580.38 5,967,464.88 (175,000.00) 5,792,464.88

125,949,288.58

88

42,689,853.96

-

9,168,429.77

6,174,885.20

14,500,673.70 108,747.74 108,408.12 108,408.12 23,777,851.21 (108,408.12) 23,777,851.21

10,974,166.22 88,596.00 191,447.61 17,429,095.03 (108,408.12) 17,320,686.91

92,451,424.04

59,929,661.71

23,113,151.79


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Movements of allowance for doubtful accounts for each of the years ended December 31, 2011 and 2010 were as follows:

(Unit: Baht)

Balance as at the beginning Add (less): Doubtful accounts (reversal) Less: Written-off bad debts Balance as at the end 7.

Consolidated financial statements 2011 2010 22,455,246.88 32,266,877.27 9,130,982.82 (6,894,726.99) (228,408.12) (2,916,903.40) 31,357,821.58 22,455,246.88

Separate financial statements 2011 2010 283,408.12 436,016.87 253,000.00 (108,408.12) (152,608.75) 428,000.00 283,408.12

INVENTORIES Inventories as at December 31, 2011 and 2010 consisted of:

(Unit: Baht)

Cranes Forklifts Trailers Spare parts and equipment Goods in transit and work in process Total Less Allowance for devaluation of inventories Inventories - net

Consolidated financial statements 2011 2010 51,678,760.89 11,249,875.59 2,373,461.96 1,753,986.66 1,367,345.06 6,672,012.41 5,873,290.29 33,300,632.74 69,360,002.75 93,405,392.70 90,223,975.65 (3,333,122.86) (5,385,670.62) 90,072,269.84 84,838,305.03

89

Separate financial statements 2011 2010 51,678,760.89 11,249,875.59 2,373,461.96 2,807,345.06 1,367,345.06 6,772,012.41 6,373,289.29 33,300,632.74 69,410,102.75 94,558,751.10 90,774,074.65 (3,333,122.86) (5,385,670.62) 91,225,628.24 85,388,404.03


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Movements of allowance for devaluation of inventories for each of the years ended December 31, 2011 and 2010 were as follows:

(Unit: Baht) Consolidated and separate financial statements 2011 2010 11,830,589.73 5,385,670.62 147,773.10 (2,200,320.86) (6,444,919.11) 5,385,670.62 3,333,122.86

Balance as at the beginning Add: Loss from obsolete stock Less: Reversal of allowance for devaluation of inventories Balance as at the end

The management of the Company had improved business plan and competitive strategy in order to relevant with economic situation and customer satisfaction. This improvement was result to change the objective of partial inventories to be assets for rent. Therefore, during the year 2011, the Company transferred partial inventories to be machinery and equipment for rent and recorded in “Property, plant and equipment� at book value in the amount of Baht 17.17 million (year 2010: Baht 8.48 million) (see Note 12). 8.

INVESTMENTS IN SUBSIDIARIES Investments in subsidiaries stated by the cost method, as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Subsidiaries The Crane Lamechabang Co., Ltd. The Crane Rayong Co., Ltd. The Crane Heavy Lift Co., Ltd. The Crane Service Co., Ltd. Total

Holding (%) 2011 2010 100 100 100 100 100 100 100 100

Paid-up share capital 2011 2010 25,000,000.00 25,000,000.00 25,000,000.00 25,000,000.00 25,000,000.00 25,000,000.00 100,000,000.00 100,000,000.00 175,000,000.00 175,000,000.00

90

Cost method 2011 24,999,300.00 24,999,200.00 24,999,930.00 99,993,000.00 174,991,430.00

2010 24,999,300.00 24,999,200.00 24,999,930.00 99,993,000.00 174,991,430.00


CHU KAI PUBLIC COMPANY LIMITED 9.

ANNUAL REPORT 2011

RECEIVABLE UNDER REPURCHASE AGREEMENT Receivable under repurchase agreement as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Consolidated financial statements 2011 45,820,560.75 (45,820,560.75) -

Receivable under repurchase agreement Less: Allowance for doubtful accounts Receivable under repurchase agreement - net

2010 45,820,560.75 (45,820,560.75) -

The Crane Service Company Limited (“subsidiary�) putting up collateral against a finance lease agreement for repurchase assets if the customer does not perform according to the agreement for its accounts receivable as the debt payment was defaulted upon with the payable (see Note 18). 10. RESTRICTED BANK DEPOSITS As at December 31, 2011, deposits at the bank of the Company and subsidiaries were used as collateral for letters of guarantee issued by banks (see Note 27). 11. ACCOUNTS RECEIVABLE UNDER FINANCE LEASES Accounts receivable under finance leases as at December 31, 2010 consisted of:

Year 1

(Unit: Baht) Consolidated and Separate financial statements 2010 Minimun Present value Deferred interest lease payment 825,915.18 31,288.54 857,203.72

The Company entered into the finance lease agreements for machinery and equipment for rent in the amount of Baht 1.89 million for the period 3.5 years from March 16, 2007 to August 16, 2010, receivable monthly totalling 42 instalments in the amount of Baht 0.04 million each. The Company sold inventories to a company in the amount of Baht 2.33 million. The receivable repaid is 1.5 years started from January 25, 2010 to June 25, 2011, receivable monthly totalling 18 instalments in the amount of Baht 0.14 million. 91


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

12. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as at December 31, 2011 and 2010 consisted of: (Unit: Baht) Land

Cost At January 1, 2010 Additions / transfer in Transfer out / adjust Disposals At December 31, 2010 Additions / transfer in Disposals At December 31, 2011 Accumulated depreciation At January 1, 2010 Depreciation Disposals At December 31, 2010 Depreciation Disposals At December 31, 2011 Impairment of assets At January 1, 2011 Transfer in At December 31, 2011 Net book value At December 31, 2010 At December 31, 2011

Land improvements

521,982,734.45 311,325.71 522,294,060.16 2,318,041.00 524,612,101.16 522,294,060.16 524,612,101.16

Buildings

Machinery and factory equipment

Consolidated financial statements Furniture and Vehicles office equipment

Machinery and equipment for rent

Land and buildings for rent

7,001,939.29 7,001,939.29 7,001,939.29

131,215,457.73 267,159.82 (3,000,000.00) 128,482,617.55 (16,547,252.51) 111,935,365.04

18,497,483.31 285,164.46 (761,364.68) 18,021,283.09 456,643.16 (76,650.00) 18,401,276.25

25,850,595.30 492,029.21 (310,562.36) (200,649.92) 25,831,412.23 627,512.90 (2,201,248.20) 24,257,676.93

35,027,938.42 2,470,873.23 (650,467.29) (1,437,260.00) 35,411,084.36 1,361,895.95 (1,684,000.00) 35,088,980.31

1,593,861,321.28 117,946,640.65 (235,664.71) (133,634,866.53) 1,577,937,430.69 320,045,883.25 (71,952,353.87) 1,826,030,960.07

3,563,066.00 3,563,066.00 3,563,066.00

7,001,932.29 7,001,932.29 7,001,932.29

62,429,863.80 6,366,582.14 (615,616.23) 68,180,829.71 2,969,118.48 (11,480,759.70) 59,669,188.49

12,370,673.73 2,017,771.93 (738,584.64) 13,649,861.02 1,745,041.28 (75,058.36) 15,319,843.94

21,602,987.00 1,648,516.78 (488,919.01) 22,762,584.77 1,242,779.27 (2,337,775.71) 21,667,588.33

20,436,410.49 5,142,168.59 (2,087,723.29) 23,490,855.79 2,664,650.24 (1,683,999.00) 24,471,507.03

684,360,721.14 104,012,254.96 (59,017,198.80) 729,355,777.30 104,990,161.58 (42,078,195.68) 792,267,743.20

1,581,643.49 99,999.96 1,681,643.45 24,163.23 1,705,806.68

7.00 7.00

60,301,787.84 52,266,176.55

-

-

4,371,422.07 3,081,432.31

3,068,827.46 2,590,088.60

92

11,920,228.57 10,617,473.28

2,928,000.60 2,200,320.86 5,128,321.46 845,653,652.79 1,028,634,895.41

1,881,422.55 1,857,259.32

Construction in progress and assets in transit 78,671,370.29 11,783,047.72 (52,669,402.53) 37,785,015.48 9,316,688.67 (384,990.36) 46,716,713.79

Total

2,415,671,906.07 133,556,240.80 (56,866,096.89) (136,034,141.13) 2,356,327,908.85 334,126,664.93 (92,846,494.94) 2,597,608,078.84

-

809,784,231.94 119,287,294.36 (62,948,041.97) 866,123,484.33 113,635,914.08 (57,655,788.45) 922,103,609.96

-

2,928,000.60 2,200,320.86 5,128,321.46

37,785,015.48 46,716,713.79

1,487,276,423.92 1,670,376,147.42


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

(Unit Land

Cost At January 1, 2010 Additions / transfer in Transfer out / adjust Disposals At December 31, 2010 Additions / transfer in Disposals At December 31, 2011 Accumulated depreciation At January 1, 2010 Depreciation Disposals At December 31, 2010 Depreciation Disposals At December 31, 2011 Impairment of assets At January 1, 2011 Transfer in At December 31, 2011 Net book value At December 31, 2010 At December 31, 2011

Land improvements

498,308,851.37 498,308,851.37 4,818,041.00 503,126,892.37 498,308,851.37 503,126,892.37

Separate financial statements Machinery and Furniture and factory equipment office equipment

Buildings

Vehicles

Machinery and equipment for rent

Construction in progress and assets in transit

6,345,543.21 6,345,543.21 6,345,543.21

58,318,344.16 267,159.82 (3,000,000.00) 55,585,503.98 55,585,503.98

4,510,635.78 179,114.27 (741,839.68) 3,947,910.37 159,950.36 (6,650.00) 4,101,210.73

10,399,308.75 44,200.00 (310,562.36) 10,132,946.39 203,442.90 (1,682,999.87) 8,653,389.42

11,755,948.77 11,755,948.77 647,409.97 12,403,358.74

615,889,148.96 92,609,763.57 (235,664.71) (78,159,808.24) 630,103,439.58 202,370,163.56 (32,673,688.91) 799,799,914.23

6,345,541.21 6,345,541.21 6,345,541.21

15,864,610.83 2,924,508.48 (615,616.23) 18,173,503.08 1,585,715.24 19,759,218.32

3,994,198.47 290,147.84 (719,080.64) 3,565,265.67 160,148.24 (5,060.36) 3,720,353.55

8,293,107.53 953,023.07 (304,720.07) 8,941,410.53 508,478.72 (1,509,317.17) 7,940,572.08

5,132,486.99 2,200,630.96 7,333,117.95 1,149,736.97 8,482,854.92

150,024,554.69 46,142,276.07 (26,757,522.26) 169,409,308.50 55,664,044.97 (15,984,102.00) 209,089,251.47

-

189,654,4 52,510,5 (28,396,9 213,768, 59,068, (17,498,4 255,337,7

2,200,320.86 2,200,320.86

-

2,200,3 2,200,3

2.00 2.00

-

-

37,412,000.90 35,826,285.66

382,644.70 380,857.18

93

1,191,535.86 712,817.34

4,422,830.82 3,920,503.82

460,694,131.08 588,510,341.90

72,660,292.85 11,778,247.72 (52,669,402.53) 31,769,138.04 8,127,433.46 (69,900.36) 39,826,671.14

Total

31,769,138.04 39,826,671.14

1,278,188,0 104,878,4 (56,215,6 (78,901,6 1,247,949,2 216,326,4 (34,433,2 1,429,842,4

1,034,181, 1,172,304,3


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Consolidated financial statements 2011 2010

(Unit: Millions Baht) Separate financial statements 2011 2010

Depreciation for each of the years ended December 31 were included in - Cost of rental and transportation services - Selling and administrative expenses Total

107.67 5.97 113.64

107.13 12.16 119.29

56.35 2.72 59.07

47.43 5.08 52.51

As at December 31 Book value of equipment before less accumulated depreciation which have been fully depreciated and still in use.

374.61

378.09

37.17

48.76

Transferred machinery and equipment for rent to inventories at net book value and recognized as cost of sales when disposed the assets for each of years ended December 31

29.87

74.85

16.69

51.64

Transferred inventories to machinery and equipment for rent for each of the years ended December 31

17.17

8.48

17.17

8.48

-

0.56

-

0.56

The Company included interest from loan, as a part of building in progress for each of the years ended December 31 (see Note 24) As at December 31 the net book value of assets under finance lease agreements (see Note 17) - machinery and equipment for rent - vehicles Total

769.47 9.51 778.98

569.91 11.37 581.28

401.26 3.87 405.13

258.47 4.37 262.84

As at December 31, 2011 and 2010, the Company and subsidiaries have pledged land including existing construction and to be constructed as well as the benefits from insurance of construction against bank overdrafts and loans from financial institutions (see Notes 13 and 16).

94


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

As at December 31, 2011 The rate of lease per month Period Millions Baht

Parties Property lease agreement (lessee) The Crane Lamechabang Co., Ltd. The Crane Service Co., Ltd. The Crane Heavy Lift Co., Ltd. Property lease agreement (lessor) Chukai Public Co., Ltd. The Crane Lamechabang Co., Ltd.

Note

Chukai Public Co., Ltd. Chukai Public Co., Ltd. The Company's director

3 years 1 year 3 years

0.10 0.05 0.05

-

Another company Person

1 year 1 year

0.02 0.01

-

13. BANK OVERDRAFTS AND SHORT–TERM LOANS FROM FINANCIAL INSTITUTIONS Bank overdrafts and short–term loans from financial institutions as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Consolidated financial statements 2011 2010 8,506,415.20 71,288,451.47 50,000,000.00 50,000,000.00 68,788,735.90 29,567,422.60 127,295,151.10 150,855,874.07

Bank overdrafts Promissory notes Trust receipts Total

Separate financial statements 2011 2010 49,386,327.34 50,000,000.00 50,000,000.00 68,788,735.90 29,567,422.60 118,788,735.90 128,953,749.94

The Company

Lender Bank Bank Bank Bank

Type of credit Bank overdrafts Trust receipt / Letter of credit Promissory notes Forward foreign currency Total

Credit lines (Millions Baht) 2011 2010 55.00 55.00 320.00 100.00 50.00 50.00 13.20 5.00 210.00 438.20

95

Referred interest rate MOR MLR MLR


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Subsidiaries

Lender Bank

Credit lines (Millions Baht) 2011 2010 23.00 23.00

Type of credit Bank overdrafts

Referred interest rate MOR

The Company and subsidiaries have pledged land including existing construction and to be constructed as collateral for loans from financial institutions. Moreover, the loans are also guarantee by the Company and its subsidiary’s directors. The Company had co-guarantee for liabilities of subsidiaries (see Notes 4 and 12). 14. TRADE AND OTHER PAYABLES Trade and other payables as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Consolidated

Separate

financial statements

financial statements

2011

2010

2011

2010

Trade payables - Domestic Related parties Other parties

-

-

33,383,020.47

66,630,564.39

21,610,110.07

25,758,267.57

4,590,737.63

8,687,730.89

Trade payables - Overseas

209,526,738.88

67,522,173.77

209,526,738.88

67,522,173.77

Total

231,136,848.95

93,280,441.34

247,500,496.98

142,840,469.05

47,892,910.54

37,416,682.23

13,618,349.63

12,804,552.61

4,140,298.75

3,786,096.87

174,544.10

32,682.45

19,891.00

32,682.45

19,891.00

52,065,891.74

41,222,670.10

13,825,576.18

12,824,443.61

283,202,740.69

134,503,111.44

261,326,073.16

155,664,912.66

Accrued expenses Other payables Others Total Total all

96

-


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

15. CURRENT PORTION OF LONG-TERM DEBTS Current portion of long-term debts as at December 31, 2011 and 2010 consisted of:

(Unit: Baht)

Loans from financial institutions Liabilities under finance leases Total

Note 16 17

Consolidated financial statements 2011 2010 48,357,478.08 50,567,478.08 176,607,426.72 138,856,532.73 224,964,904.80 189,424,010.81

Separate financial statements 2011 2010 43,341,478.08 45,551,478.08 84,453,374.32 58,676,038.86 127,794,852.40 104,227,516.94

16. LOANS FROM FINANCIAL INSTITUTIONS Loans from financial institutions as at December 31, 2011 and 2010 consisted of:

(Unit: Baht)

Loans from financial institutions Less: Current portion of long-term debts Long-term loans from financial institutions

Consolidated financial statements 2011 2010 97,960,834.07 148,528,312.15 (48,357,478.08) (50,567,478.08) 49,603,355.99 97,960,834.07

97

Separate financial statements 2011 2010 87,750,694.72 133,302,172.80 (43,341,478.08) (45,551,478.08) 44,409,216.64 87,750,694.72


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

The details of the loans are summarized as follows: Millions Baht Credit line Lender Company 1 Bank

Credit line 2011 2010

Principal 2011 2010

Period

Referred Interest Rate

-

84.50

-

2.21 Jul. 2009 - Dec. 2010

MLR

2 Bank

95.07

170.00

65.65

101.79 Mar. 2009 - Mar. 2014

MLR

3 Bank

35.00

35.00

22.10

29.30 Aug. 2009 - Aug. 2015

MLR

Total 130.07 Subsidiaries 4 Bank 20.00

289.50

87.75

20.00

7.31

Year 2009, Monthly principal repayment totaling 5 installments, Baht 0.10 million each Year 2010, Monthly principal repayment totaling 12 installments, Baht 2.50 million each Monthly principal repayment totaling 54 installments, Baht 3.01 million each Monthly principal repayment totaling 72 installments, Baht 0.60 million each

133.30 11.32 Oct. 2008 - Oct. 2013

5 Bank

5.00

5.00

2.90

Total

25.00

25.00

10.21

15.23

155.07

314.50

97.96

148.53

Grand Total

Repayment

3.91 Dec. 2009 - Nov. 2014

MLR MLR

Monthly principal repayment totaling 60 installments, Baht 0.33 million each Monthly principal repayment totaling 60 installments, Baht 0.08 million each

Movements of loans from financial institutions for each of the years ended December 31, 2011 and 2010 were as follows:

(Unit: Baht)

Balance at the beginning Increase Decrease Balance at the end

Consolidated financial statements 2011 2010 148,528,312.15 219,114,423.12 7,100,000.00 (50,567,478.08) (77,686,110.97) 97,960,834.07 148,528,312.15

98

Separate financial statements 2011 2010 133,302,172.80 198,873,623.19 7,100,000.00 (45,551,478.08) (72,671,450.39) 87,750,694.72 133,302,172.80


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

The Company and subsidiaries had pledged land including existing construction and to be constructed as well as the benefits from insurance of construction against loans from financial institutions with the full personal guarantee of the directors of the Company and subsidiaries. Moreover, the Company had co-guarantee for loan from financial institution of subsidiary (see Notes 4 and 12). 17. LIABILITIES UNDER FINANCE LEASES Liabilities under finance leases as at December 31, 2011 and 2010 consisted of: (Unit: Baht) 2011 Consolidated financial statements Year Present value Finance leases 1 156,226,135.85 2-5 239,185,695.79 395,411,831.64 Sale and leaseback agreement 1 20,381,290.87 2-5 16,178,336.19 36,559,627.06 Total 1 176,607,426.72 2-5 255,364,031.98 431,971,458.70

Separate financial statements

Deferred interest

Minimun lease payment

Deferred interest

Minimun lease payment

Present value

24,732,371.99 28,693,779.01 53,426,151.00

180,958,507.84 267,879,474.80 448,837,982.64

65,156,710.22 118,915,993.06 184,072,703.28

11,588,815.46 14,788,792.49 26,377,607.95

76,745,525.68 133,704,785.55 210,450,311.23

2,211,124.08 688,967.93 2,900,092.01

22,592,414.95 16,867,304.12 39,459,719.07

19,296,664.10 16,178,336.19 35,475,000.29

2,177,990.86 688,967.93 2,866,958.79

21,474,654.96 16,867,304.12 38,341,959.08

26,943,496.07 29,382,746.94 56,326,243.01

203,550,922.79 284,746,778.92 488,297,701.71

84,453,374.32 135,094,329.25 219,547,703.57

13,766,806.32 15,477,760.42 29,244,566.74

98,220,180.64 150,572,089.67 248,792,270.31

99


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011 (Unit: Baht) 2010

Consolidated financial statements Minimun lease payment Present value Deferred interest

Year Finance leases 1 118,899,438.27 2-5 135,874,604.13 254,774,042.40 Sale and leaseback agreement 1 19,957,094.46 2-5 37,279,435.17 57,236,529.63 Total 1 138,856,532.73 2-5 173,154,039.30 312,010,572.03

Separate financial statements Present value

Deferred interest

Minimun lease payment

18,946,104.84 9,716,149.09 28,662,253.93

137,845,543.11 145,590,753.22 283,436,296.33

40,449,983.40 33,533,297.59 73,983,280.99

6,763,730.41 1,838,814.22 8,602,544.63

47,213,713.81 35,372,111.81 82,585,825.62

3,945,160.50 2,947,443.91 6,892,604.41

23,902,254.96 40,226,879.08 64,129,134.04

18,226,055.46 36,194,808.39 54,420,863.85

3,760,039.50 2,914,310.69 6,674,350.19

21,986,094.96 39,109,119.08 61,095,214.04

22,891,265.34 12,663,593.00 35,554,858.34

161,747,798.07 185,817,632.30 347,565,430.37

58,676,038.86 69,728,105.98 128,404,144.84

10,523,769.91 4,753,124.91 15,276,894.82

69,199,808.77 74,481,230.89 143,681,039.66

The Company and subsidiaries entered into the finance lease agreements for purchase machinery and equipment for rent and vehicles, payable monthly in the amount of Baht 9.16 million and Baht 20.55 million, respectively. As at December 31, 2011, the current portion of liabilities under the finance leases in the amount of Baht 176.61 million (year 2010: Baht 138.86 million) for the consolidated financial statements and Baht 84.45 million (year 2010: Baht 58.68 million) for the separate financial statements was presented under current portion. The Company’s director mortgaged personal land including construction as collateral for liabilities. The partial of liabilities under finance leases are also personally fully guaranteed by the Company’s director and its subsidiary’s directors (see Note 4). Under long-term finance leases has condition about bargain purchase option under finance leases when complete at the value or the rate agreement. Therefore, if the Group has policy purchase such assets, will record the amount of payment of assets include in liabilities under finance leases. During the year 2010, the Company entered into a sale and leaseback agreement for machinery (Crane) with a company. The Company had cash received from the finance lease agreement in the amount of Baht 29.65 million and committed to pay the rental fee each month under the agreement totalling 48 months which in the total amount of Baht 35.47 million. However, the Company did not recognize gain / loss from the sale and leaseback agreement. During the year 2010, the Company sold machinery and equipment for rent to the subsidiaries by entering into the finance lease agreements. The Company had cash received from the lease agreements in the amount of Baht 65.21 million.

100


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

18. LIABILITY UNDER REPURCHASE AGREEMENT Liability under repurchase agreement as at December 31, 2011 and 2010 consisted of:

(Unit: Baht) Consolidated financial statements 2011 60,110,913.64 29,660,206.99 89,771,120.63

Liability under repurchase agreement Provision from litigation Total

2010 60,110,913.64 23,649,115.62 83,760,029.26

On December 16, 1996, The Crane Service Company Limited (“subsidiary”) sold assets to a customer by finance lease through a Leasing Company; on condition that subsidiary had joint responsibility to repurchase assets if the customer did not perform according to the agreement. On October 8, 2001, the subsidiary entered into a debt confirmation letter with a Leasing Company because the subsidiary’s customer did not perform according to the agreements in the amount of Baht 73.62 million. A debt confirmation letter indicated that the Subsidiary had to pay principal and interest which the first repayment started on October 2001. The liabilities were also fully guaranteed by the subsidiary’s directors. From the above details, the subsidiary recorded the lessee to accounts receivable from repurchase agreement that were presented under current assets in the amount of Baht 45.82 million (see Note 9) according to the amount to be repaid by the subsidiary. The subsidiary had reclaimed the debt in the amount of Baht 68.20 million. In the year 2001, the leasing company was in litigation with the lessee and in the year 2003, the court of first instance held the lessee, the subsidiary and director to join responsibility for payment to the leasing company in the amount of Baht 5.96 million with interest charged at 7.5 percent per annum since the litigation date until fully paid. On October 24, 2006, the subsidiary entered into an additional amendment of debt confirmation letter that the conditions of repayment were amended from additional amendment of debt confirmation letter dated September 24, 2005 as follows: 1. The subsidiary had outstanding debt before preparing the memorandum in the amount of Baht 2.20 million, so the installment of debt was taken into the new principal of debt as indicated in this memorandum. 2. The subsidiary has to pay the principal by installment started from October 2006 to October 2011 as the indicated amount of the payment schedule enclosed with the contract with interest charged at 10 percent per annum.

101


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

The Subsidiary had paid post dated cheque as collateral in the amount of Baht 60.03 million. During the year 2007, the Appeal Court judged lessee company and subsidiary including director together to undertake repayment to leasing company in the amount of Baht 5.40 million including interest at the rate of 10% per annum from June 21, 2006 until the date the claim was filed and at the rate of 7.5% per annum starting from the date the claim was filed until complete repayment. This litigation was finalized. The result of above suit, the managements agree that the subsidiary has paid over the part of debt. The subsidiary has stopped the principal and interest as per the agreement. The subsidiary litigated with the creditor relating to alleged overstated debt in the amount of Baht 49.60 million. Moreover, the Subsidiary, director and related parties are litigated a suit of breach debt confirmation agreement in the amount of Baht 66.54 million. Anyway the Court combined considering both of litigation. On July 14, 2009, Civil Court judged the Subsidiary and related parties to pay the debt in the amount of Baht 60.11 million including the damage fine 10% per annum since January 25, 2007 until complete repayment. The Subsidiary filed a suit to Appeal Court and to suspend the execution. At present, the Subsidiary is in the process to considering collateral. However, the Subsidiary has already recorded the provision of the damage fine at the Civil Court judged in the amount of Baht 29.66 million (see Note 29). However, the subsidiary has still recorded accrued interest expense at the rate determined in the agreement. The subsidiary does not use the default interest rate because a legal consultant expressed his opinion that the subsidiary has a chance to win the case. Anyway the subsidiary reclassified such liability to current liability. 19. EMPLOYEE BENEFITS Employee benefit obligations in the statement of financial position as at December 31, 2011 consisted of:

(Unit: Baht) Post-employment benefit plan Consolidated Separate financial statements financial statements 6,276,038.02 8,550,763.03 8,550,763.03 6,276,038.02

Present value of obligation Employee benefit obligations

102


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Movement of the present value of employee benefit obligation for the year ended December 31, 2011 were as follows:

Present value of employee benefit obligation as at January 1 Employee benefit expenses in the statement of comprehensive income: Current service cost Interest cost Actuarial gains Benefits paid / termination Present value of employee benefits obligation as at December 31

(Unit: Baht) Post-employment benefit plan Consolidated Separate financial statements financial statements 8,006,123.00 5,780,810.00 1,677,846.98 300,727.72 (8,900.00) (1,425,034.67) 8,550,763.03

1,180,276.38 216,780.31 (4,750.00) (897,078.67) 6,276,038.02

The Group made defined benefit plan in accordance with severance payment as the labor law which entitled retired employee within work service period in various rates, such as more than 10 years to receive severance payment not less than 300 days or 10 months of the last month salary. 20. SHARE PREMIUM Section 51 of the Public Limited Companies Act B.E. 2535 requires companies to set aside share subscriptions received in excess of the par value of the shares issued to a reserve account (“share premium�). Share premium is not available for dividend distribution. 21. LEGAL RESERVE According to the Public Limited Companies Act B.E. 2535, the Company is required to set aside a statutory reserve at least 5 percent of its net profit after deducting accumulated deficit brought forward (if any) until the reserve reaches 10 percent of the registered share capital. The statutory reserve could not be used for dividend payment. 22. DIVIDENED PAYMENT AND LEGAL RESERVE The Company At the Ordinary General Meeting of Shareholders held on April 27, 2011, a resolution was passed authorizing a dividend payment at the rate of Baht 0.06 per share, totaling Baht 27 million.

103


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Subsidiaries At the Board of Directors’ Meeting of The Crane Rayong Company Limited held on December 15, 2011, a resolution was passed authorizing the interim dividend payment at the rate of Baht 200 per share, totaling Baht 50 million. At the Board of Directors’ Meeting of The Crane Service Company Limited held on December 15, 2011, a resolution was passed authorizing the interim dividend payment at the rate of Baht 150 per share, totaling Baht 15 million and approved an additional appropriated legal reserve of Baht 0.75 million. At the Board of Directors’ Meeting of The Crane Rayong Company Limited held on December 17, 2010, a resolution was passed authorizing the interim dividend payment at the rate of Baht 40 per share, totaling Baht 10 million. At the Ordinary General Meeting of Shareholders held on April 26, 2011 ratified a dividend payment. At the Board of Directors’ Meeting of The Crane Heavy Lift Company Limited held on December 16, 2010, a resolution was passed authorizing the interim dividend payment at the rate of Baht 8 per share, totaling Baht 20 million and approved an additional appropriated legal reserve of Baht 1 million. At the Ordinary General Meeting of Shareholders held on April 25, 2011 ratified a dividend payment. At the Board of Directors’ Meeting of The Crane Service Company Limited held on December 16, 2010, a resolution was passed authorizing the interim dividend payment at the rate of Baht 250 per share, totaling Baht 25 million and approved an additional appropriated legal reserve of Baht 1.25 million. At the Ordinary General Meeting of Shareholders held on April 25, 2011 ratified a dividend payment.

104


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

23. EXPENSES BY NATURE Significant expenses by nature for each of the years ended December 31, 2011 and 2010 consisted of:

(Unit: Baht)

Supplies used Employee expenses Utility expenses Cost of rental and transportation services Other rental and service expenses Insurance expenses Maintenance expenses Depreciation Security expenses Sale promotion expenses Professional fees Traveling expenses Directors’ remuneration Doubtful accounts and loss from impairment of assets Provision

Consolidated financial statements 2011 2010 16,723,391.23 19,795,458.65 137,642,551.12 117,672,852.08 4,725,058.71 5,286,370.50 77,936,175.30 47,601,377.63 3,212,053.88 3,022,978.47 5,426,962.12 6,107,351.47 15,565,863.86 18,271,225.85 113,635,914.08 119,287,294.36 4,446,584.17 4,321,538.54 1,595,494.62 8,441,898.78 7,312,896.71 5,663,803.37 2,980,431.65 2,864,261.91 3,922,000.00 2,991,000.00 10,103,963.51 2,517,160.89 6,011,091.37

105

6,011,091.37

Separate financial statements 2011 2010 16,723,391.23 19,859,944.25 55,051,009.47 47,641,083.28 1,715,775.82 1,838,604.82 1,854,070.45 2,372,819.56 1,088,087.74 1,061,157.20 1,544,961.63 1,655,058.64 943,032.09 1,537,113.35 59,068,124.14 52,510,586.42 1,440,000.00 1,425,471.80 5,711,231.67 1,026,648.00 5,076,043.99 2,481,640.41 1,874,554.90 1,522,794.12 3,922,000.00 2,991,000.00 255,931.85 2,516,045.10 -

-


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

24. FINANCE COSTS Finance costs for each of the years ended December 31, 2011 and 2010 consisted of:

(Unit: Baht)

Interest expenses Add: Other finance costs Total Less: Interest capitalised Net

Consolidated financial statements 2011 2010 48,849,252.34 56,621,030.27 573,970.70 49,423,223.04 56,621,030.27 (556,992.35) 49,423,223.04 56,064,037.92

Separate financial statements 2011 2010 34,509,368.28 34,976,035.50 201,436.00 34,710,804.28 34,976,035.50 (556,992.35) 34,710,804.28 34,419,043.15

25. INCOME TAX Corporate income tax of the Company and subsidiaries for each of the years ended December 31, 2011 and 2010 was calculated at a rate specified by the Revenue Department after adding back reserve and expenses that are not allowed to hold as an expense in calculating income tax and less of income exempt included as income. As at December 31, 2011, the Company and subsidiaries has utilized loss carry forward from previous years as tax benefit in the amount of Baht 83.82 million (year 2010: Baht 51.85 million) in the separate financial statements and Baht 353.82 million (year 2010: Baht 350.25 million) in the consolidated financial statements. The Company and subsidiaries recorded the corporate income tax as expense and recorded the accrued portion as liabilities in the statement of financial position. Income tax reduction Royal Decree No. 531 B.E. 2554 dated December 14, 2011 grants companies listed on the Market for Alternative Investment on or before enactment a reduction in the corporate income tax rate from 30% to 25% for taxable profit not exceeding Baht 50 million for the accounting period beginning on or after January 1, 2011. Royal Decree No. 475 B.E. 2551 dated July 29, 2008 grants companies listed on the Market for Alternative Investment on or before enactment a reduction in the corporate income tax rate from 30% to 20% for taxable profit not exceeding Baht 20 million for the three consecutive accounting periods beginning on or after January 1, 2008.

106


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

26. PROVIDENT FUND The Group and its employees jointly registered a provident fund scheme under the Provident Fund Act B.E. 2530. The fund is contributed to by both the employees and the Company. The fund is managed by CIMB-Principal Asset Management Company Limited and will be paid to the employees upon termination in accordance with the rules of the fund. In the year 2011, Baht 1.85 million (year 2010: Baht 1.74 million) in the consolidated financial statements and Baht 0.96 million (year 2010: Baht 0.87 million) in the separate financial statements have been contributed to the fund by the Group. 27. COMMITMENTS AND CONTINGENT LIABILITIES As at December 31, 2011, the Company and its subsidiaries had commitments and contingent liabilities as follows: The Company 27.1 Commitments for payment under agreement as follow: 27.1.1 Commitment for payment under the security service agreement in the amount of Baht 0.12 million per month. 27.1.2 Commitment for payment under the land lease agreement in the amount of Baht 0.08 million per month. 27.1.3 Commitment from legal advisory agreement in the amount of Baht 0.03 million per month. 27.1.4 Commitment from construction office building, factory and design expense in the amount of Baht 26.62 million. 27.1.5 Commitment for payment under the software system service agreement in the amount of Baht 0.02 million per month. 27.2 The letter of guarantee issued by the bank for guarantee in the amount of Baht 0.23 million (see Note 10). 27.3 Undue L/C in the amount of USD 6.56 million. 27.4 Contingent liabilities as follow: 27.4.1 Contingent liabilities on co-guarantee for liabilities under finance leases of subsidiaries at book value in the amount of Baht 180.60 million (see Note 4). 27.4.2 Contingent liabilities from lease back agreement together with subsidiaries at book value in the amount of Baht 4.05 million.

107


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Subsidiaries 27.5 Commitments for payment under agreement as follow: 27.5.1 Commitment for payment under the land lease agreement to the director of the Company in the amount of Baht 0.05 million per month (see Note 12). 27.5.2 Commitment for payment under the land and building lease agreement with a related company in the amount of Baht 0.15 million per month (see Note 12). 27.5.3 Commitment for payment under the management agreement with the Company in the amount of Baht 1.25 million per month. 27.5.4 Commitment for payment under the security and cleaning service agreement with a company in the amount of Baht 0.27 million per month. 27.5.5 Commitment from construction office building, factory in the amount of Baht 4.33 million. 27.6 The letter of guarantee issued by the bank for guarantee the subsidiaries in the amount of Baht 2.40 million (see Note 10). 27.7 Contingent liabilities as follow: 27.7.1 Contingent liability on co-guarantee for liabilities under finance leases with the Company at book value in the amount of Baht 79.55 million (see Note 4). 27.7.2 Contingent liability on co-guarantee for liabilities under finance leases with the Subsidiaries at book value in the amount of Baht 18.37 million (see Note 4). 27.7.3 The Crane Service Company Limited is litigating a suit brought against it involving compensation of breach debt confirmation agreement in the amount of Baht 66.54 million and compensation from cheque default of Baht 0.96 million (see Note 29). 27.7.4 The Crane Heavy Lift Company Limited is litigating a suit brought against it for a claim of Baht 14.92 million (see Note 29). 27.7.5 The Crane Rayong Company Limited is litigating a suit brought against it for a claim as default payment in Hirepurchased agreement of Baht 10.71 million (see Note 29).

108


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

28. FINANCIAL INSTRUMENTS 28.1 Capital management The Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Group defines as result from operating activities divided by total shareholders’ equity and also monitors the level of dividends to ordinary shareholders. 28.2 Accounting policies The details of significant accounting policies and methods used for classification of financial assets and financial liabilities including valuation, basis of recognition of income and expenses are disclosed in Note 3. 28.3 Financial risk management policies The Company is exposed to fluctuations in interest rates and foreign exchange rates in the market and the risks from default of the agreements by counterparties. The Company had risk management polices as follows: 28.3.1 Interest rate risk Interest rate risk is the fluctuation of the market interest rate in the future that will affect the Company’s operations and cash flows. The Company has interest rate risk from cash and deposits at banks, bank overdrafts and loans from banks because the interest rate of the financial assets and financial liabilities fluctuate based on the market rate. In addition, the Company has not engaged in any hedging contracts related to interest rates. 28.3.2 Foreign currency risk The Company’s exchange rate risk primarily involves the purchases and sales of goods in foreign currencies. As at December 31, 2011 and 2010, the Company and subsidiaries had assets and liabilities in foreign currencies as follows:

Currencies YEN (Japan) US Dollars Singapore Dollars

(Unit: Millions) Consolidated and Separate financial statements 2011 2010 Assets Liabilities Assets Liabilities 0.43 4.13 8.72 2.22 0.02 -

109


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

28.3.3 Credit risk – trade accounts receivable The Company has a policy to hedge credit risk from trade accounts receivable by forming a conservative credit policy and by determining the receipt from the sales of goods and service. Therefore, the Company expects that the loss from the collection of those trade accounts receivable should not exceed the allowance for doubtful accounts. 28.3.4 Fair value Most of the financial assets are trade accounts receivable which are short-term credit and financial liabilities. Most of the financial liabilities are trade accounts payable and bank overdrafts and loans from banks with interest rates close to the market rate. The carrying amount of the financial assets and financial liabilities are not significantly different from their fair value. 29. LITIGATION The Company 29.1 The Company and The Crane Rayong Company Limted, The Crane Lamechabang Company Limited and The Crane Heavy Lift Company Limted (“the Group”) are litigation a suit brought against it involving compensation of breach debt confirmation agreement in co-defendant in the amount of Baht 66.54 million. Because of the Group ratified the actions of The Crane Service Company Limited sold assets to a customer by finance leases through a Leasing Company; on condition that The Crane Service Company Limited had joint responsibility to repurchase assets if the customer did not perform according to the agreement. However, The Crane Service Company Limited filed a suit against a creditor relating to overstated debt (see Note 18). Anyway the Court combined considering both of litigation. On July 14, 2009, Civil Court judged The Crane Service Company Limited and the Group to pay the debt in the amount of Baht 60.11 million including the damage fine 10% per annum since January 25, 2007 until complete repayment. The Crane Service Company Limited filed a suit to Appeal Court which is in the process to suspend the execution. At present, the Subsidiary is in the process to considering collateral. Anyway The Crane Service Company Limited has already recorded all provision of the damage fine in “Provision”. However, the management of the Group agreed that if the Group is affected from above litigation, The Crane Service Company Limited will be responsible for these effects. In addition, the management evaluated that The Crane Service Company Limited is able to absorb these effects. 29.2 The Company and The Crane Service Company Limted, The Crane Lamechabang Company Limited and The Crane Heavy Lift Company Limted (“the Group”) are litigation a suit brought against it for a claim as default payment in Hirepurchased agreement with other company in the amount of Baht 10.71 million. Because of the Group has guarantee Hirepurchased agreement of The Crane Rayong Company Limted. At present, the case is pending decision in the Civil Court. Anyway The Crane Rayong Company Limted has recorded full damage as above.

110


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

Subsidiaries 29.3 The Crane Heavy Lift Company Limited (“subsidiary”) received notice from the Department of Legal Execution (dated November 10, 2005) informing it of the cancellation of an agreement and to let the subsidiary pay rent to the official receiver of Mr. Suchin Sittirarat (landlord). The notice stated that the subsidiary has rented the land with title deed no.39562 in Patumthani and that the subsidiary did not paid rent since February 1, 2002 until now (September 30, 2005). The total is 44 installments, so this agreement was terminated pursuant to clause 12 of the contract. The official receiver informed the subsidiary of the agreement cancellation and that the subsidiary has to return the land by removing everything including people off the land and to make rest of the payment of Baht 13.60 million to the official receiver. Subsequently, on November 25, 2005 the subsidiary denied the debt to the official receiver stating that the subsidiary never had a land rental agreement with Mr. Suchin Sittirarat, contrary to what the official receiver notice alleges, as the subsidiary has an agreement with the subsidiary’s director (see Notes 12 and 27). The subsidiary has recorded the above accrued rental expenses are divided into 2 parts as follows: 1. The subsidiary has recorded the accrued rental expenses on a monthly basis according the agreement with the subsidiary’s director (see Note 27). As at December 31, 2011, the subsidiary had the accrued rental expenses in the amount of Baht 5.95 million, the subsidiary’s director does not accept until the lawsuit is finished. In case the subsidiary has any damage, the subsidiary’s director is willing to deny receiving rental fee from the subsidiary. 2. The subsidiary hired UK Valuation and Agency Company Limited as an independent appraiser to appraise such monthly rental fee for the land, which the subsidiary will set up an allowance for additional damage on a monthly basis following the monthly market rental fee which was appraised by the independent appraiser. As at December 31, 2011, the subsidiary had set up an allowance for damage in the amount of Baht 10.12 million. As at December 31, 2011, the subsidiary has recorded the accrued rental expenses totaling in the amount of Baht 16.07 million. However, if the subsidiary loses more than such provision, the subsidiary’s director will be responsible for the total in excess. 29.4 The Crane Heavy Lift Company Limited (“subsidiary”) is litigating a suit brought against it for a claim of Baht 1.32 million. On October 10, 2003, Civil Court judged the subsidiary to pay the debt. On July 18, 2006, Appeal Court judged to dismiss the plaintiff’s plaint. At present, the case is pending decision in the Supreme Court. However, the subsidiary is expected to not accept any damage from above litigation. 29.5 The Crane Service Company Limted (“subsidiary”) is litigating a suit brought against it involving compensation from cheque default of Baht 0.96 million. On December 6, 2008, Civil Court judged to dismiss the plaintiff’s plaint. A plaintiff filed a suit to Appeal Court. At present, the case is pending decision in the Appeal Court.

111


CHU KAI PUBLIC COMPANY LIMITED

ANNUAL REPORT 2011

29.6 The Crane Service Company Limted (“subsidiary”) is litigating a suit brought against it to be bankrupt. Because the plaintiff has taken debt as judge settlement compromise in year 2001 in the amount of Baht 4.88 million against to be new bankrupt. At present, the case is pending decision in the Central Bankruptcy Court. However, the management of subsidiary is expected to not accept any damage from above litigation. 30. RECLASSIFICATION The Group has reclassified certain accounts in the statement of financial position as at December 31, 2010 and the statement of comprehensive income for the year ended December 31, 2010 to conform with the presentation of the financial statements of this year consisted of: (Unit: Baht)

Consolidated financial statements Before After reclassification Reclassification reclassification

Separate financial statements Before reclassification

Reclassification

After reclassification

23,140,115.55

23,140,115.55

Statement of financial position Trade and other receivables Trade accounts receivable - net

-

96,956,834.82

96,956,834.82

-

92,451,424.04

(92,451,424.04)

-

4,338,700.37

(4,338,700.37)

-

Other current assets

15,611,363.06

(4,192,370.41)

11,418,992.65

5,223,464.72

(4,052,623.76)

1,170,840.96

Other non-current assets

51,954,085.09

4,025,660.00

55,979,745.09

11,021,038.19

4,025,660.00

15,046,698.19

134,503,111.44

134,503,111.44

155,664,912.66

155,664,912.66

Accrued income

Trade and other payables Trade accounts payable

-

23,113,151.79 -

-

(23,113,151.79) -

-

93,280,441.34

(93,280,441.34)

-

142,840,469.05

(142,840,469.05)

-

7,429,336.45

(7,429,336.45)

-

7,077,887.85

(7,077,887.85)

-

Accrued expenses

37,416,682.23

(37,416,682.23)

-

12,804,552.61

(12,804,552.61)

-

Other current liabilities

17,656,802.20

3,623,348.58

21,280,150.78

1,804,826.24

7,057,996.85

8,862,823.09

Administrative expenses

64,049,379.31

26,224,924.71

90,274,304.02

23,811,215.87

25,739,110.53

49,550,326.40

Management benefit expenses

26,224,924.71

(26,224,924.71)

25,739,110.53

(25,739,110.53)

Advances received for goods and service

Statement of comprehensive income -

31. APPROVAL OF THE FINANCIAL STATEMENTS These financial statements were authorised for issue by the Company’s Board of Directors on February 27, 2012.

112

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Crane 11