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Annual Report 2012

1


O OU UR RV VIIS SIIO ON N

“ Your best partner for solution and service in Industrial raw material Supply”

2

 

Global Connections Public Company Limited


Content 1.

General IIn nformation

5

2.

Financial Summary

7

3.

Message from The Chairman

8

4.

Business Characters

10

5.

Revenue Structure

13

6.

Company Background

15

7.

Industry Overviews

18

8.

Risk Factors

27

9.

Shareholder Structure and Divideen nd Policy

34

100. Management Structuurre and Board of Directors

37

111.. The Principles of Corporate Governance

64

122. Sustainability Report

78

133. Related Transactions

98

14 4 . D i s c u s s i o n a n d A n a ly s i s o f O p e r a t i n g

100

Results aan nd Financial Position 155. Audit Committee’s Report

103

166. Statement of Board of Directors

106

Responsiable for The Financial Statements 177. Financial Statement Year 2012

107

 

   

 

Annual Report 2012

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Global Connections Public Company Limited


1  General Information C o r p o r a te I n f o r m a ti o n Companyy Name

G Global Connecctions Public Company Lim mited ( (“The companny” or “GC”)

Symbol

G GC

Business

D Distributing aggent of plasticc, petrochemiccal and additive, which a used in peetrochemical and plastic traansformation process are 1 13/1 Moo 2 Kingkaew Rd., Rachateva, BBangplee, Sam muthprakarn

Head offiice

1 10540 , Thailaand Home Page

hhttp://www.gc.co.th

Telephonne

+ (0)2763--7921, +66 (00)2763-7999, +66 (0)27633-7923-42 +66

Facsimilee

+ (0)2763--7949, +66 (00)2312-4880--1 +66

Investor Relations R

+ (0)2763--7999 Ext. 2001 – 204 +66

Registratiion Number

0 010754800015 53

Establishm ment Date

227th Septembeer 1994

Date of reegistration Public Companyy

117th March 2005

Stock Listted Date

6th December 2005

Juristic peerson that aree being hold more m

N None

than 10% of their paid-up capital Registereed (Paid Up) Capital C THB

2 260,000,000 (200,000,0000)

No. of Reegistered (Paidd up) Shares

2 260,000,000 (200,000,0000)

R e f e r e n ce Registrar

T Thailand Secuurities Depositoory Co., LTD. T stock Excchange of Thailand Buildinng The 6 Ratchadappisek Road, Klongtoey, 62 B Bangkok, 10110, Thailand T +66 (0)2229-2800 Fax. +66 (0)26654-5427 Tel.

Auditor

E Ernst & Youngg Office Limiteed 3 Floor, Lake Rajada Offfice Complex 33rd 1 193/136-137 Rajadapisek R R Road, Klongtoey, B Bangkok 101100, Thailand T +66 (0)2264-0777 Fax Tel. x. +66 (0)2264-0789

   

 

Annual Report 2012

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Global Connections Public Company Limited


2  F i n a n c i a l S u m m a r y 22010

2011

2012

Cuurrent Assets

866

970

983

Tootal Assets

1,018

1,112

1,125

Cuurrent Liabilitties

593

707

711

Tootal Liabilitiess

598

725

726

Shhareholder’s Equity

419

388

399

3 3,662

3,786

3,700

Grross Profit

269

255

233

Opperating Proffit

172

129

119

Neet Profit

124

80

78

Reeturn on Asseet (%)

13.46

7.55

6.94

Reeturn on Equuity (%)

3 30.51

19.93

19.72

Neet Profit Marggin (%)

3.39

2.12

2.10

Cuurrent Ratio (Times) (

1.46

1.37

1.38

Deebt to Equityy Ratio (Timees)

1.43

1.87

1.82

Boook Value peer Share (Bahht)

2.10

1.94

2.00

Neet Profit Per share (Baht))

0.62

0.40

0.39

F i n a n ci a l P o s i ti o n (M i l l i o n B a ht)

Operatinng g Result (Million Baht) Saale Revenues

Financial Ratios

 

   

 

Annual Report 2012

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3  Message from The Chairman

 

Sinnce the eruuption of finnancial crisiss four yearss ago, the world w econoomy still struuggles to recover. In 2012, the slluggish grow wth persistedd in many major m econom mies due to high unempployment rates and falling f demand as a resuult of austerrity policies implementedd by some ggovernmentss to curb their high public p debts. The slow economic e recovery in major m advancced economiies together with the already fraggile financiall sector increeased uncerttainties and risks that afffected growth in many emerging e economies. Hoowever, throough quantitative easingg measures being b adopteed by several governmennts of the troubling ecconomies, soome improveements were expected in the Euroozone alongg with the investors’ i confidence in the world economic recovery. Thai T econom my, affected by the Greaat Flood in 2011, 2 was able to reboound quicklyy due to the governmentt’s economic stimulation policy packaages such ass the First Car Project and the Ricee Pledging Scheme. S Thhe economicc slowdownn, together with the coontract term mination as a distributorr of SCG Plastics Co. Ltd., has inevitably affeected the coompany’s revenue and net profit. Inn 2012, our net n profit slightly droppped to 78 million m baht compared with w the 80 million baht net profit inn 2011. However, the company has laid out a mitigation plan p as we are a appointed as an officcial distributoor of the PTTT Polymer Marketing Co. C Ltd., a suubsidiary of the t PTT Pubblic Co. Ltd. from 1 July 2012 2 onwardds. This is onne of the company’s solutions to steer forwarrd. In additioon, the comppany has putt more emphhasis on imprroving its b and liquidity throough better working cappital manageement as weell as maintaining a sounnd financial base continuously expandingg its customeer base.

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Global Connections Public Company Limited


Also the coompany focuuses on long term sustainnable development such as;

Emphasis on o strong intternal founda dation through gh a sound human h resour urce managem ement. This iss to be acccomplished by ensuringg employeess at all leveels to receivee appropriatte training and a allowingg them too utilize such knowledgge accordinggly. Also, we also nurtuure equal joob opportunnity of eachh employeee regardlesss of their funnction. The company c also provides a fitting rewaard scheme and welfaree which has h been reccognized byy the Departtment of Labbor Protectioon and Welffare and thee Ministry off Labor.

Emphasis on o creating value for the t businesss. Apart from m providing price incenntive for ourr customeers, the comppany aims too be the top business parrtner by developing the win-win bussiness modell while deelivering goood service to t our customers by seeeking diversee raw materrials for the industry. Inn addition to acting as a a distributor, the com mpany also strives s to beecome a ceentre of knowledge andd technoloogy through our global networking in order too provide addvice and seervice to ouur customerss starting from producction level down d to maarketing leveel. This strateegy should eenable the company too maintainn its market share s and seet up a strongg foundationn for future growth. g

Emphasis on o businesss partnershipp with custo tomers, produ ducers, and financial insstitutions. Inn essence,, the company aims to become b a toop business partner p with its stakeholders in order to developp its busineess in the lonng-run. In 2013, the plastics annd petrochem mical industrry is expecteed to grow ccontinuously in line withh the govvernment’s GDP G target of o 4.5-5.5% on an annual basis. Thhus, the company will continue too develop its products and expandd its customeer base in search for greaater market sshare.

Yours sinncerely

(Mr. Virah Mavichak) Chairman of the Board

   

 

Annual Report 2012

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4  Business Characters Thhe Global Coonnections Puublic Compaany Limited (the ( Companny or GC) is tthe distributinng agent of plastic, petrochemiccal and additive, whichh are used in i petrochem mical and pplastic transfformation process. Thee company is the distribuuting agent more than 30 3 companiees such as PTTT Polymer Marketing M Co., Ltd., a subsidiary of PTT group and distribuutor of PTT group g in polyymer produccts. PTT grouup who is E and Petro Chem mical businesss in Thailannd as well as in Asiann region, Ex xxonMobil leader of Energy Chemical, DuPont D Perfoormance Polyymers, Siam Polystyrene Co., ltd, Chi Mei Corporaation, and etcc. By this reason, thee Company is considered to be the Thai distributor d w who providees the mostt variety petrochemiccal and plasttic related prroducts for Thailand. T Thhe Companyy was estabblished on September 277, 1994 by five experieenced foundders who each has been b workinng in petrochemical induustry for moore than 20 years with the compaany initial registered capital c of 2 million Bahtt and begann fully comm mercial on Appril 1, 1995. The knowleedge and experience of founderss coincided with w the rappid emergingg petrochem mical industryy in Thailandd created the continuuous growth for the Company. The saale amount in i 2012 was 3,700 millionn Baht and Net N Profit of 78 millionn Baht decreease by 2% and a 3% from m last year reespectively due d to changging in distributorship of Commodity Polymer business b unitt’s main suppplier with efffective from mid of 2012 onward. Thhe vision of the Companny is to be thhe best partnner for solutiions and servvice in indusstrial raw material suppply. The company does not only bee the distributor for variouus products in petrochem mical and plastic industry, but alsoo be the provvider for knoowledge andd technologyy to customeers/end userss in order to form longg term strateegic partnership with thee customers as a well as the suppliers.

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Global Connections Public Company Limited


Company’s revenue duurring 1995-2012 Millio on Baht 4,000 

3,710 

3,500  3,000  2,500  2,000  1,500  1,000  500  ‐

R o l e o f Di s tr i b u ti n g A g e n t In general, the large producers such s as Exx xonMobil, Eaastman, and Chi Mei annd others inn Petrocheemical industtry do not diistribute their products by b themselvees because oof the scatter location off end-users, high costts of each trrade transacction. Furtheermore, end-users of plasstic are mostly used thee variety of o plastic raw w material inn the producction processs. As end-useers perspectiive, it is too complicatedd to directtly buy eachh raw materrial from eacch producerss. The picturre below shoows transacttion withoutt role of distributing d aggent.

Suppliieer

S1

S2

S3

S4

S5

SSnn

Customer

C1

C2

C3

C4

C5

CCnn

Trade transaction without distributing agent

   

 

Annual Report 2012

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Thhe essential of distributing agents for f petrocheemical industry is to connect the combined c product rannges from the various producers to serve s the vaarious needs of end-userrs/ customerrs, and to minimize logistic cost of each transsaction. The company caan deliver vaalue added tto both supppliers and customers by b satisfy ecconomy of sccope to the number n of customers/ c e end-users and satisfy ecoonomy of scale to bigg producers simultaneous s ly Thhe next pictuure shows roole and beneefit of distribbuting agent in petrocheemical industtry which is similar to t role of distribution d channel forr consumer products which w regullarly generaate trade transaction at the superrmarket or hyyperstore succh as TescoLLotus, Makro,, and BigC. In addition, the t barrier for new entry e in pettrochemical distributing agent is that the petrochemiccal producerrs usually apppoint only one o or two distributing aggents in eacch country ass general practice. d benefit of distributing agent Role annd

Economy of Scale to Suppliers

Supplier

S1

S2

S3

S4

S5

Sn

Global Connections PCL.

C1 Customer

12

C2

C3

C4

C5

Economy of Scope to Customers

 

Global Connections Public Company Limited

Cn


5  Revenue Structure

 

The Compaany’s main business b can be categorizzed into threee business-uunits. 1. Business Unit 1: Comm modity Polym mer 2. Business Unit 2: Speccialty and Enngineering Polymer 3. Businesss Unit 3: Speccialty Chemical Organiizzational Structure by Business Units

GC 1. Buusiness Unit

2. Business Unnit

3. Businesss Unit

Commodity

Specialty & Engineering

Special & Chemical

1.

2.

3.

1.

2.

1.

2. Petro

Import

Other

Polyyoolefin

Engineering

Industrial

Adddiitive

Chemical &

Commodities

Commodities

Product

Product

 

Intermediate

The Compaany’s producct ranges froom Commodity Polymer, Specialty and Engineerring Polymerr c whhich contribuute high proffit margin, Global Connecctions PCL iss one of thee to speciaal additive chemical only twoo Thai distribbutors varietyy of product ranges from m common coommodity graades polymeers to speciall grade poolymers. Thee Company’s revenue 3,7710 million Baaht in 2012 contributed c ffrom Commodity Polymerr (B.U.1) 55% 5 (or 2,041 million Bahht), Specialtyy & Engineerring Polymerr (B.U.2) 44% % (or 1,632 million m Baht),, Specialtyy Chemical (B.U.3) ( 1% (oor 27 million Baht) and frrom other inccome 0% (orr 10 million Baht)

   

 

Annual Report 2012

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Company Revenues Structures 2010-2012: Break Down by Business Units 20110 REVENUE STRUCTTURE

2011

Amount

%

Amount

(Mil THB) Commodity Polymer

20122 %

Amount

(Mil THB)

%

(Mil THB)

2,426

66

2,416

64

2,041

55

1,157

32

1,357

36

1,632

44

Specialty Chhemical1

79

2

13

0

27

1

Total Sale Revenue R

3,662

100

3,786

100

3,700

100

Other incom me2

16

0

7

0

10

0

Total Revennue

3,678

100

3,793

100

3,710

100

Specialty & Engineeringg Polymer

Growth ratee Remark :

38 % 1

3%

(2%))

In 2011 som me item of Speecialty Chemicaal was reclassiffied into the Sppecialty and enngineering so data d in2010

were adjussted for comparrison. 2

Other incoome included commission income from oversea suppliers, interest income gain on o foreign

exchange and gain on diisposal of assett.

R e ve n u e S tr u ctu r e du r i n g 2005 - 201 2 Unit: Million Baht B 4,000.00

3,272

3,678 8

3 3,473

3 3,390

3,793

3,429

3,710

3,500.00 2,665

3,000.00 2,500.00 2,000.00 1,500.00 1,000.00 500.00 0.00 2005 Other Incomee

2006 6

2007

Specialty  Chemical

2008

2009 9

2010

2011

Specialty & Engineering  Polyme r

2012 2

Year

Commod dity Polymer

Remarrk: * In 2011 soome item of Sppecialty Chemiical was reclasssified into thee Specialty andd Engineering so data in 2010 were adjusteed for comparisson.

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Global Connections Public Company Limited


6  Compaanny Background

 

1994

G was estaablished withh initial registtered capital of THB 2 miillion on Septtember 27, 19 GC 994.

1995

G was appointed to bee HDPE distribbuting agentt of Bangkokk Polyethylenne Pcl. and increased GC i itss r registered annd paid-up capital c to THB 5 million

1996

G was apppointed to be GC b distributinng agent of SCG Plasttics Co., ltd. (former CC CC Chemicall C Commerce C ltd., a subsidiary of Siam Cemeent Pcl.) by beginning aas a 17th coompany salee Co., r ranking. Morreover GC was w appointedd to be distrributing agennt of Eastmaan Chemical,, which wass t start of specialty the s prooduct distribuution. GC inccreased its reegistered andd paid-up caapital to THBB 1 million. 10

1997

G increasedd its paid-upp capital to THB GC T 20 millioon to supporrt the compaany expansioon and saless t turnover. GCC was appoinnted to be distributing d agent a of DuPPont Perform mance Polymers which iss t world’s laargest produucer of Polyaamide 66 or Nylon the N 66. Ass well as apppointed to bee distributingg a agent for Chhi Mei Corporation which is the worldd’s largest maanufacturer oof the ABS.

1998

G was apppointed to bee distributingg agent of Ciba GC C Specialtty Chemical (Singapore)) Pte Ltd. Inn 2 2009, CIBA was acquireed by BASF (Thailand) Co., C Ltd., thee world’s claass producer of additivess c chemical forr plastic andd was appointed to be agent a of Ow wen Corningg Australia PTTY (In 2009 9 O Owen mergeed with Sainnt Gobain’s Reinforcemen R nt and changed its namee to OCV Reeinforcementt C Ltd), prooducer of glaass fiber. GC also increaseed its paid-uup capital to THB 30 milliion. Co.,

1999

G was appointed to be distributiing agent of GC o Siam Polystyrene (Thailand) Coo., ltd. (Dow w C Chemical Thhailand), andd was appoiinted to be distributing agent for Cabot Plastic Hong Kongg L Ltd., which is the worlld’s largest manufactureer of Masterrbatch and Carbon Blacck. GC wass i increased its paid up cappital to THB 50 5 million annd sale revennue over THBB 500 millionn.

2000 GC G was apppointed to be b distributinng agent of Advanced Elastomer Systems (AESS), presentlyy a acquainted by ExxonM Mobil, which is the world’s largest manufactureer of rubberr compoundd ( (Thermoplast tic Elastomeer) PP. GC ex xpanded finnancial resouurces from 3 to 6 comm mercial bankss e enabling thee Company to expand customers c with w the totaal sale from THB 542 million in yearr 1 1999 to THB 849 million in year 20000 or increaseed by 57%

   

 

Annual Report 2012

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2001

GC increased itss paid-up caapital to THBB 80 million to support thhe companyy expansion with the totaal sale revennue THB 1,1166 million.

2003

GC increased itss paid up caapital to THB 100 million and moved its warehousse to Kingkaaew road, which is the strategic locatiion because this locationn is near customers and ssuppliers as the t result of high h efficiency in transpoortation of GC. G GC was appoinnted to be distributing aggent of Thaii Plastic andd Chemical PPcl. (TPC) thhe largest mannufacturer of polyvinyl chloride c polymer (PVC) inn Asian.

2004

Mineral Asia Pte., P Ltd., GC was appoinnted to be diistributing aggent of ExxonMobil andd Rio Tinto M the company moved m the heeadquarters to t Kingkaew w road to faccilitate the opperation. Thee resolution of o the Boardd of Directorss Meeting Noo 15/2004, held h on Noveember 22, 20004, paid diviidends THB 78 million annd increasedd its paid-upp capital to THB 155 million to Extraaordinary Genneral Meeting No. 1/2004 and 2/22004 on Noovember 30,, 2004 and December 17, 2004 resppectively.

2005

On March 1, 20005, GC was transformed to public coompany limitted, increaseed its paid-uup capital to THB T 200 milllion and chaanged its paar value from m THB 100 peer share to TTHB 1 per shhare with the intention too implementt an IPO of 45 million shares. s (Thee resolution of the Extraaordinary Genneral Meetingg No. 1/20005, held on June 7, 20005, allocatedd capital inccreasing as 1.1 1 million shaares for ESOPP at book value of THB 1.03 per share and the reemain 43.9 m million sharess for IPO) GC common stoock was IPO O and listed in The Stocck Exchangee of Thailannd since 6 December D 20005.

2006

GC was appoinnted to be distributing d a agent of Naanocor Inc. which w is a pproducer of property mical for the plastic indusstry. impprovement addditive chem

2007

GC signed a coontract whicch is a finanncial supportt for dealer financing w with Kasikornn Bank in K-DDealer Financcing Program m on June 6, 2007. This program will support GCC’s customerr working cappital credit faacilities GC celebrated 10th Anniverrsary Strateggic Partnershhip with DuPont on September 13, 2007 at Sukkhothai Hotel.

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Global Connections Public Company Limited


2008

GC was connnected to be distributing agent of DIC Internnational Chemicals Pte Ltd. L for PPSS (Polyphenyleene Sulfide)) which is used to repplace metal in Automottive industriees and E/EE i industries.

2009

GC was apppointed to be b distributinng agent foor additive chemical c of AKZO NOBEEL POLYMERR CHEMICALS BV. B which iss AKZO NOBEEL group of companies c inn the Netherrlands.

201 0

GC was apppointed to bee distributing agent of BSST Elastomerrs Co., Ltd. foor Polybutaddiene Rubberr a Styrenee Butadienee Rubber. At the samee time, the company w and was terminated agencyy a agreement o BASF due to overlap inn some product group. of

201 1

G was apppointed to be GC b distributinng agent of Timcal Ltd.. for Graphitte product which w is ann a additive for polymer. p G was apppointed to bee distributingg agent of Miliken GC M Chemical which iss a producerr of additivee t propertiess improvemennt of Polyethhelene and Polypropylen to P nce from USAA. A GC was appointed to And t be distribuuting agent of o Imerys Minneral which is a produceer for Talcum m p product from m France (Im merys Minerall has 117 minnes which coover more thhan 30 kindss of mineralss a Imerys Mineral and M acquuire Talcum business b from m Rio Tinto Mineral M in Auggust 2011)

201 2

G and SGC Plastics Co., Ltd have agreed GC a to ceease the distributorship eeffectively Juune 30, 20122 a GC Jointly signed agency and a ceremony with PTT Polymerr Marketing Co., Ltd, a subsidiary s off P group, by PTT b which GC are appointted as distribuutor effectivvely July 1, 20012.

   

 

Annual Report 2012

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7  Industry Overviews Global Connecctions Publicc Company Limited L is thee distributor of Industrial raw materiaal mainly in plastics and a petrocheemical industtries. Hence the companny sales turnoover is relateed directly with w these industries. The T data froom the officce of industrial econom mic (www.ooie.go.th) as of Januaryy 9, 2013 summaries the t outlook of o plastics annd petrochem mical industrries as follow w:

Plastics Industry Overall Situatiioon of plastic industry Plaastic MPI duuring Januaryy to Octobeer of 2012 deeclined 2.29 9% comparedd with the relatively high in 2011. Export voolume acceleerated grow wth lower thaan import. The T export ggrowth only 1.69% in while the volume v of im mports grew by 18.17% due d to increeased domesstic demand. Especially industrial plastic prodducts and residential connstruction. The T positive impacts of the t construcction industryy growth more than 15% as a result of thhe need to repair homees recover from floodinng in 2011. And the government investmentt projects, inncluding thee need to invvest before costs markup such as laabor, raw materials annd energy increases. P r o du cti o n Plaastics Production Index for 10 montths of 2012 were 148.722, decrease 3.80% from last year due to a higgh base in 2011, 2 which has h producedd a huge number of plasstic sack for flood protecction. The MPI of plasttic packagingg and consuumer plastic product p incluuding plasticc sheets, film and plastic bags are slightly increeased over the t same period of the previous p yearr at 2.47%, 0.55% 0 and 5..19%, respecttively.  

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Global Connections Public Company Limited


M a r k e ti n g a n d di s tr i b u ti o n Shipping inndex Plastic Prodduct Shippinng Index durring January to October 2012 is slightly increasedd 1.32% yearr on yearr. As a resuult of econoomic stimulaation policy to create higher domestic consum mption. Thee governm ment announnced policy “at least THB 300 a dayy for labor hire h rate” too improve thhe economyy since thee beginning of the thirdd quarter, ressulting in thee consumptioon of plasticc products arre improved.. The plasstic bag prodduct shippingg index is thhe greatest increase i (5.883%), followed by a sheeet of plasticc film (4.4 47%) and plastic p sheetts (2.65%) except plasstic sack annd the appliances of kitchen k andd bathroom m. The shipm ments index declined byy 9.05 and 6.58, 6 respectively. The appliance of kitchen andd bathroom m business was w improved during thee first quarteer as a resultt of need forr shelter fixeed after Thaii flood. Thhe demand has h been shrrinking steadily since the second quaarter onwardss. Inventory index i Inventory index declinned 5.69% year on yeear consistennt with the reduced caapacity andd increaseed shipmentss. The plasticc film invenntory has moost increasinng from the previous yeear (14.90%)) followedd by a plasticc sheet (9.211%) and the appliance off kitchen andd bathroom (2.84%). Internationnal Trade 10-month Exports plaastic productts (3916-39 926) have low growth due to thee economicc downturrn in Europee; affect manny regions in the worldd and also Thailand's T traading partneers, includingg Japan, China C and the United Staates. While thhe domestic demand annd consumption rises. As a result, thee export volume v of plastic produccts increasedd from 1.69% % for the yeear 2011 withh the total volume v wass 825,512.80 tons valuued at THB 87,188.76 milliion.

Top three volume dropp of export products grroup are singgle fiber (-4 46.96%), plaastic flooringg (-12.08% %), Non cellular film (-66.09%) and building eqquipment (-12.34%) whhich the expport volumee declinedd reason mayy because off the increased domestic demand.

   

 

Annual Report 2012

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Thhe Imports of o plastic prooducts durinng January to t October 2012 2 a total of 449,3500.62 tons grow up froom the prevvious year arround 18.17 percent p totaaling THB 1000,402.16 million with thee growth rate of a reelatively highh percentagge of 10.18 as a compared to the same period of year 2011 thhe deficit amount THBB 13,213.4 million. m All import plastic items volum me increased compared tto the previoous year. The top thrree products with the highest growtth the buildinng appliancee such as dooors- window w frames (478.23%), sanitary warre (36.68%) and plastic flooring f (36.664%), whichh were all plaastic construuction. R e l e va n t g o ve r n m e n t p o l i ci e s . Investment in infrastructurre such as thhe rail netwoork, irrigationn and water managemennt are the results in the growth of the construction inddustry. Encoourage moree domestic consumptionn by the minimum wage w policy and a also lendding policies.. S u m m a r y a n d o u tl o o k . Plaastics industtry in 2012 is i expected to grow byy 3.53% by the countryy's economicc growth. Consumer confidence c inndex in November is highest in 14 months, with a relatively llow base in 2011. Hoowever the world leadership channging will afffect the shhort term staability of thhe global economy. Export E grow wth is low by expected to grow onnly 2.46%, while w the inccreasing in domestic investment will result too plastic inddustry importt growth in 2013 continuue grow up from 2012, with the major reasoon of the dom mestic econoomy expansiion. Thus connsider factorrs as follows;;

P r o s f a cto r - Large L projeccts public innvestment such s as the metro exteension, Inveestment in loong-term w water managgement plann THB 3.5 billlion in 2013. - Economies E o partner countries like China of C and Jaapan to improove and alsoo the global economy e h good siggnal after Thee United Staates launchedd QE3. has

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Global Connections Public Company Limited


C o n f a cto r . - Electroniccs and electtrical appliannce industry continues shhrinking. In particular, thhe computerr products and it’s com mponents in the t ASEAN market, m in whhich the major exporter to t Europe. - The comppetitiveness of competitoors such as Malaysia M andd China, whoo have cost advantage.. They try to t get in thee Asian markeets. T a b l e 1 P r o du cti o n I n de x

2011 P Product Index x Tootal

2010

20012

2011

20122* Q11

Q2

Q3

Q4

Q1

Q2

Q3

Jaan-Oct

141.99

151.84

144..66

144.45

171.24

147.02

142.21

143.69

156.02

148.72

147..19

YOY (%)

4.39

6.94

3.28

4.42

15.70

3.87

(1.770)

(0.53)

(8.89)

(3.80) (

(2.29)

QoQ (%)

N/A

N/A

2.20

(0.15)

18.55

(114.15)

(3.228)

1.04

8.82

N/A

N//A

Pllastic Sheet

105.08

120.46

119.20

117.73

128.28

116.64 1

120.51

123.06

129.40

1224.55

124.32

YOY (%)

(12.08)

14.63

9 9.91

11.26

22.08

15.49

1.10

4.53

0.88

2.47

2.38

QoQ (%)

N/A

N/A

18.03

(1.24)

8.96

(9.07) (

3..32

2.12

5.15

N/A

N//A

268.03

2 285.75

288..34

276.00

307.16

271.50 2

281..07

273.98

310.82

291.38 2

288.662

YOY (%)

17.28

6.61

6 6.31

4.56

8.71

6.72

(2.552)

(0.73)

1.19

0.55

0.17

QoQ (%)

N/A

N/A

13..34

(4.28)

11.29

(11.61) (

3..52

(2.52)

13.45

N/A

N//A

127.41

178.90

1211.91

138.53

250.80

2004.36

110.42

117.96

132.36

123.41 1

120.25

YOY (%)

10.13

40.41

3.76

15.62

86.72

48.07

QoQ (%)

N/A

N/A

(11.667)

13.63

81.05

Pllastic bag

126.49

122.65

122.20

121.72

130.67

116.03 1

YOY (%)

(2.36)

(3.03)

(1.008)

(2.31)

(1.68)

QoQ (%)

N/A

N/A

(2.19)

(0.39)

110.28

111.01

119.23

115.32

YOY (%)

4.77

0.66

6.72

QoQ (%)

N/A

N/A

4 4.10

Fiilm

Saack

Kitchen and

(9.4 43) (14.85) (47.22)

(118.52) (45.9 97)

(31.41) (22.663)

6.83

12.21

N/A

N//A

129..36

125.84

136.26

131.76 1

130.4 48

(7.13)

5..86

3.39

4.27

5.19

3.556

7.36

(11.21) (

11.49

(2.72)

8.28

N/A

N//A

117.15

92.33

103.45

116.25

117.03

112.55 1

112.20

10.44

6.07 (119.39)

(13.223)

0.81

(0.10)

(2.25) (

(1.4 40)

(3.28)

1.59

12.05

12.36

0.68

N/A

N//A

Baathroom apppliance

(21.18) (

reemark : www.oie.go.th

   

 

Annual Report 2012

21


T a b l e 2 E x p o r t a n d I m p o r t V o l u m e – P l a s ti c P r o du ct

2011 HS Code** C

2010

2012

2011

2012* Q1

Q2

Q Q3

Q4

Q1

Q2

Q3

ม.ค.-ต.ค.

Export Volume – Plastic Product (Unit : Tonnes) Totaal

949,077.00 967,147.000 233,391.24 24 42,238.93 254,399.58 237,116..77 237,625.25 243,091.06 2566,372.00 825,512.80 990,89 96.60

YOY Y (%)

12.9 93

1.90

3.98

2.54

2.33

(1.111)

1.81

0.35

0.78

1.69

2.46

QoQ Q (%)

N//A

N/A

(2.67)

3.79

5.02

(6.79 9)

0.21

2.30

5.46

N/A

N/A

Import Volume – Plastic Product (Unit : Tonnes) Totaal

421,289.56 453,305.31 110,178.56 1117,465.18 119,14 42.98 106,518.58 127,613.90 138,179.74 1366,750.00 449,350.62

535,191.14

YOY Y (%)

23.9 93

7.60

9.50

10.53

1 12.52

(1.833)

15.82

17.63

14.78

18.17

1 18.06

QoQ Q (%)

N//A

N/A

1.55

6.61

1.43

(10.600)

19.80

8.28

(1.03)

N/A

N/A

Note** Export – Im mport Product including singlee fiber, tube, plaastic flooring, sheet, s film, etc. Souurce : www.oiee.or.th

Petro-Chemical Industry P e tr o che m i ca l I n du s tr y o u tl o o k 201 1 Peetrochemicall industry duuring first 10 months of the year 2012.(Jan.-Oct.)) Asia naphthha prices are fluctuattions with oill prices. The adjustment of demand and supply related r to thhe politics issue in the Middle East.. The rising oil o prices cauused the U.SS. Congress announce a Irran sanctionss policy andd limit the gold used too buy crude oil from Irann with expecctation to stoop Iran nucleear program.

P r o du cti o n Thhailand's petrochemical industry i has new construction of Eppichlorohydrin factory with green technology by using natural n glyceeride which is the by product p from m biodiesel production and a oleo chemical from organic oil circulatioon with 100,0000 tons per year capaccity. Epichlorohydrin is the major material forr epoxy resinns productioon. (Polymer plastic for molding) m is expected e too open in thee second half of 2014 4.

22

 

Global Connections Public Company Limited


Although the t third quaarter is the production period p for all products tto be sold inn the fourthh quarter which w in Chrristmas seasoon, New Yeaar and Chineese New Yeaar, but the uttilization ratee in the thirdd consecuutive to the fourth quarrter of the year y 2012 was w reducedd due to demand reducction by thee impact of o the global economic uncertainty. u I n te r n a ti o n a l T r a de

E x p o r ts Export of petrochemica p al products during d the first 10 monthhs of 2012 (JJan.-Oct) froom upstream m to downnstream totaled amount THB T 237,5455.06 million, the growth rate declinedd around 233.84 percent,, compareed with the previous yeear. Petrocheemical produucts has expport value ddecreased 6.92%, 13.11% % and 30.558% respectively, compaared with preevious year. Due to the raate of econoomic growth of the mainn country’s export maarkets of Thaailand, Especcially China and the Unnited States have low growth rates.. And alsoo prolonged pubic debt crisis in the Europe. In addition a to the t export ccountry markkets such ass China, Thailand and Vietnam haave a lot of plans p to exppand their prooduction cappacity duringg 2013-2017,, some off them alreaady started up u productioon as a resuult to tight market m and reduce depeendency onn imports of o petrochem mical products from Thailland. For the expport of petroochemical prooducts of thee year 2012 from upstreaam to downsstream is expecteed to be valuued at THB 284,626.93 million m with growth g rate decreased d byy 23.67% com mpared to the yearr 2011.

Import Import of petrochemica p al products during d the first f 10 monthhs of 2012 ((during Jan.--Oct) totaledd amount THB 98,997..46 million with w a growth rate decreeased by 29.27% comparred to the prrevious year.. a downstrream have decrease im mport valuee Petrocheemical produuct from Uppstream, Inttermediate and around 15.30, 1 41.35 and 27.92, respectively when compared with thhe same periood in 2011 beecause locall end-induustry has slow w down as a result to haave lower peetrochemicaal import Import of petrochemiccal productss in the yeaar 2012 from m the upstrream to dow wnstream iss expecteed to be valuued at THB 118,484.64 million m associaated with a lower overall growth ratte of 27.89% % compareed to the sam me period of 2011.

   

 

Annual Report 2012

23


P r i ce s . Ann Asian marrket Ethylenne price in October 20112, priced was w at THB 39.87 per kilogram. Increase froom Q3/2012 at an average price of THB T 33.46 per kilogram. And propyleene in Octobeer 2012 is at THB 39.550 per kg., which w is higher comparedd to the averrage price inn Q3/2012. Prrice for PE and a PP (aveerage South East Asia CFR) of LDPEE, HDPE, andd PP in Octoober 2012 were at THB 43.02, 43.10 and 44.776 per kg., reespectively. LDPE and HDPE H and PPP’s priced weere lower when comppared with thhe average in i Q3/2012. (Unnit : THB Milliion)

E xpo r t 2011 2010

2012* Q1

Exporrt

2012

2011 Q2

Q Q3

Q4

Q1

Q2

269,2900.20372,868.79 88,438.44 98,882.57 96,9220.68 88,627.10 68,227.39 72,702.59

Q3

72,831.51 237,5545.06 284,6226.93

YOY (%) (

27.15

38.46

51.27

46.91

3 36.85

21.91

(22.85)

(26.47)

(24.85)

QoQ (%) (

N/A

N/A

21.65

(63.28)

(74.01)

0.21

(23.02)

6.56

0.18

Upstreeam

36,633..84 58,419.80 13,785.45 166,646.35 14,7000.77 13,287.222 11,424.23 13,609.95 16,050.97

YOY (%) (

422.18

59.47

56.91

92.66

6 63.43

30.10

17.13

(18.24)

9.18

QoQ (%) (

N/A

N/A

34.98

(54.56)

(74 4.84)

(3.661)

14.02

19.13

17.94

Intermeediate 47,972..05 64,401.83

14,112.82 177,607.42 16,3003.53 16,378.006 14,673.12 14,255.60 12,909.58

YOY (%) (

6 6.31

34.25

30.70

47.08

3 37.76

22.552

3.97

(19.04)

(20.81)

QoQ (%) (

N/A

N/A

5.57

(63.30)

(74 4.68)

16.005

(10.41)

(2.85)

(9.44)

Downsttream 184,684 4.31 250,047.17 60,540.16 64 4,628.80 65,916.38 58,961.882 42,130.04 44,837.04 433,870.96 YOY (%) (

31..07

35.39

55.71

38.40

31.85

20.005

(30.41)

(30.62)

(33.44)

QoQ (%) (

N/A

N/A

23.26

(65.01)

(733.64)

(2.661)

(28.55)

6.43

(2.15)

S Source : Custom m N : * forecasst by The officee of Industrial Economics Note E

24

 

Global Connections Public Company Limited

Jan--Oct

(23.84)

(23.67)

45,887.32

54,657.88

(6.92)

(66.44)

46,,528.18

55,9668.07

(13.11)

( (13.11)

145,129.56 174,0000.98 (30.58)

(330.41)


Import

(Unnit : THB Milliion) 2011

20110

20122* Q1

Impport

20122

2011 Q2

Q3

Q4 4

Q1

Q2

Q3

ม.ค ค.-ต.ค.

141,6888.53 164,314.662 40,330.34 42,396.19 38,926.75 38,9266.75 27,545.9 91 30,081.70 32,154.01 98,9 997.46

YOY Y (%)

4 43.08

15.9 97

12.20

13.16

24.24

14 4.76

(31.70)

(29.05)

(17.40)

QoQ Q (%)

N/A

N//A

18.90

(69.89)

( (74.20)

(3.48)

(29.24)

9.21

6.89

14,59 92.44 21,353.004

3,294.27

4,412.84

5 5,735.18

7,9100.75

5,272.522

3,732.62

Upsstream

118,4884.64

(29.27)

(27.89)

4,505.82

13,951.81

16,9 933.51

(15.30) (

(20.70)

6,029 9.83 4,479.700 5,907.65 4,960.24 17,305.81

20,6779.64

YOY Y (%)

4 41.61

46.333

(14.78)

13.38

77.76

119 9.24

60.055

(15.41)

(21.44)

QoQ Q (%)

N/A

N//A

(8.70)

(69.76)

(73.14)

140.14

(33.35)

(29.21)

20.71

Interm mediate 29,14 48.42 32,938.116

8,677.41

9,840.91

8,,390.01

YOY Y (%)

4 46.90

13.000

23.57

21.45

26.69

(18.52)

(48.38)

(39.97)

(40.88)

(41.35) (

(337.22)

QoQ Q (%)

N/A

N//A

17.25

(66.24)

( (74.53)

(300.51)

(25.71)

31.88

(16.04)

Downnstream 97,94 47.67 110,023.4 42 28,359.66 28,407.60 28,271.00 24,986.17 17,793.700 20,441.43 222,687.95 67,7739.84

80,871.49

YOY Y (%)

4 42.20

12.333

13.17

10.52

16.46

9.06 9

(37.25)

(28.04)

(19.74)

QoQ Q (%)

N/A

N//A

23.78

(71.00)

( (74.30)

(11.89)

(28.79)

14.88

10.99

(27.92)

(29.08)

Source : Custoom Note : * forecaast by The office of Industrial Economics

R e l e va n t g o ve r n m e n t p o l i ci e s . S u m m a r y a n d Ou tl o o k . Petrochemical industry in the first 10 1 months off the year 20012 (Jan.-Octt) has decreaased growthh rate of export e valuee because off the export market counntry economic has slowddown This is partly resultt by a proolonged debtt crisis in thee European Union U and also plans to expand e the capacity of production , resultingg in reduced dependencyy on import items from Thhailand. 2 has groowth rate oof imports deecreased, byy Petrochemical industryy during Jan.. to Oct in 2012 expecteed that local industrial sloow down, esppecially Elecctrical and ellectronic industries.

   

 

Annual Report 2012

25


 

Trreend Thhe growth trend t of peetrochemical industry inn Thailand for f the yeaar 2012 expected to decrease coompared with the year 2011. 2 The impportant factoor should be our local ecoonomic and the main export counntry markets including Chhina, Japan have economics slowed down. The public debt problems in Europeann Union still protracted. As a result, the export and import of petrocheemical produucts from Thailand's has h lower groowth rate ass well. Peetrochemicall industry inn 2013 is ex xpected to increase i from the year 2012 basedd on the expansion of downstreeam industriees such as the automotiive industry. In 2013, whhen the govvernment has launcheed various policies to stim mulate our domestic d ecoonomy througgh large project investm ment such as the Mettro extensioon, Long-terrm investmeent plan forr water maanagement, including thhe world economy reecovery. Meaasures adoptted by the U.S. U for QE3 (for money injection too the econom my), from all various factors, f thesee will affect the growth of the industry. Howevver, have to ffollow up closely the public debt crisis in Euroope due to be b the importtant factor.

26

 

Global Connections Public Company Limited


R Faactors 8  Rick

 

8 . 1 R i s k o f d e p e n d i n g o n k e y s u p p l i e r o r f e w su p p l i e r s From the past, SCG Plastics Coo., Ltd. hass made thee high propportion of revenue off 50-60 percent p as it is the keyy supplier. Iff SCG Plasticcs Co., Ltd. terminates the Companny from thee distributoor, it would become a risky issue that could affect thee revenues and profitabbility of thee Company due to lack of productt to distributee to customeers. On July 1, 2012, the Coompany hass completely terminated the role as a product distributor d off SCG Plasstics Co., Ltdd. with mutuaal agreemennt. As it direcctly represennts our revennue of 40-500 percent soo the Com mpany steadily make a deal as a disttributor with PTT Polymeer Marketing Co., Ltd., a subsidiary s off PTT Grouup effective from 1 July 2012 2 onwardds. In additionn, the Comppany still rem mains diverssify its produuct policy bby expandinng into new w markets as can be seeen from thee expansion into the rubber industry,, automotive industry andd packagingg industry.. The Compaany contactss with manyy new suppliiers as well as secure vaariety produccts from thee existing suppliers to achieve the appropriatte balance. At the samee time, the CCompany is focusing onn expanding the markket and increease sales froom the speccialty produccts by the world's leadingg supplier off more thaan 20 comppanies, mostly the Comppany is the only o dealer in Thailand which givess the higherr gross margin, less risk r of loweer prices, hiigh growth rate and leess competittion when compare too commoddity. t Companyy can reducee the impacct of the term mination as can c be seenn As mentionned above, the from thee only 2 perccent decreased on our saales value.

   

 

Annual Report 2012

27


 

8.2 Risk assocciiated with the reliability on the officers Duue to most of o the sales turnover deerived from sales s represeentatives, therefore saless volume has direct reelationship with w sales reppresentativess. The Comppany has riskk associated w with the reliaability on sales repressentatives. Iff they resign,, their clientss may follow w them that may cause tthe decreasee of sales and profit especially e coommodity polymer. But seelling of certtain specialtyy products m may need knnowledge and expertiise of sales representativve and techhnical supporrt from supppliers. If suchh sales repressentative resigns, the Company may m encountter problem. However thee Company has been deealing with clients c for a long time and they arre impressedd by companny policy so iti can reduce risk from loosing the clieents. The Company's management has knowledge andd expertise about all products p annd we havee regular customers visit v to strenggthen good relation betw ween the Coompany and the clients, including coontinuous training policy thereforee sales repreesentative can be developed to repplace continuuously. Moreeover the Company has h good clieents databasee therefore new n sales representativee can track eexisting cliennts easily. One importaant thing is when the customers c off the clients approved the t quality oof specialty products, they shall not n change to use other product unnless they have necessaary reason. IIn addition, a certain group of cuustomers are tied up withh our specialty products which cannot be changged easily maaking the Company leess dependennt on sales reepresentativves. In addition, thhe Company plans to deevelop a succcession plann at all levels of management in order to streengthen the sustainabilityy of the orgaanization annd long-term business groowth.

28

 

Global Connections Public Company Limited


8.3 Risk associated with bad debts of accounts receivable At present, the Companny sells the goods g in creddit term mosttly. Thus, if aaccount receeivable turnss to be bad debt siggnificantly, thhe Companyy may encoounter a finnancial liquiddity risk andd affect thee Company’s profitability. Howeveer, the Comppany has diversified cusstomers basee and sales volume perr client with value not exceed 5 percent p of tootal sales in order to reduuce risk. Moreover the Coompany hadd the policcy to verifyy the clientss’ credit before providinng credit too customers and closelyy follow upp financial status as well w as payyment capaccity of the customers. c T Companny has setupp the creditt The w and old ones and alsoo set the creedit approvall committeee to considder the creditt of the cliennts, both new system, which sepaarate from sale s departm ment to conntrol the Non-performinng account receivable.. Moreoveer, the Comppany managees and transsfers this kinnd of risk to trade creditt insurance continuously c y since 20005. The innsurance covvers the baad debts of customers which had been apprroved underr conditionns of the inssurance com mpany. The insurance coompany set insurance ccoverage of each client.. The Com mpany sets the doubtful debt allowaance according to the rissk of accounnts receivablle accordingg to the past p experieence and the present status of the clients. Then the CCompany coompares thee allowancce for doubttful debt annd insurancee to verify iff the Compaany needs too reserve moore doubtfull debt alloowance. 8.4 Risk assssociated with exchange rate The Compaany purchases most of the goods froom local supppliers exceppt the speciaalty productss have to purchase from f foreignn suppliers inn US Dollar. In 2012, thhe Company imported thhe goods inn foreign currency c at 29 percent of its total purchase. Frrom the foreeign currenccy purchase, 99 percentt are in US U Dollar. If the exchannge rate of Thai Baht against a US Dollar fluctuuates, it mayy affect thee Company’s profitability. However, to protect the t exchangge rate risk, the Compaany follows the movem ment of thee exchangge rate of Thai T Baht aggainst US Dollar closely by b asking thhe advice off the bank to t determinee whetherr the Comppany should buy the forward f conntracts. The Company has solid policy of noo speculattion on currrency. The Company must m not buuy the forw ward contraccts without the tradingg obligatioons. Moreoveer, the Company will not n sell the goods in addvance withhout agreem ment on thee exchangge rate withh the clientss or buy thee forward contracts. c Byy these reassons, the Coompany cann prevent a certain levvel of risk froom foreign exchange e ratte.

   

 

Annual Report 2012

29


8. 5 R i s k a s s o ci a te d w i th i n s u f f i ci e n t ca s h f l o w Sinnce, the Coompany has to reserve sufficient inventory for delivery to the clients promptly couple withh credit term m to clients about 94 daays which iss longer than the creditt term of supppliers of about 21 daays. The Com mpany havee to maintainn a number of working capital for ooperation, which w has cash cycle of 73 days. If sale of thhe Companyy increases significantly, s the Companny may neeed to find more of souurce capital, which is moore costly thaan the financcial cost at the t present. In addition, cuurrently the Company can c purchasee goods undder credit peeriod of 15 days d with major suppliers such ass PTT Polymeer Marketing Co., Ltd. annd can negootiate with thhe major suppliers to receive speecial long-teerm credit peeriod which the Companny’s workingg capital cosst may increease from interest ratee. However, the Companny has many financial insstitutions whhich offer low wer interest rate r than the major suuppliers. Ass at 31 Decem mber 2012, thhe Companyy had credit facilities withh many financial instituttions. The credit facilitties are still available a moore than 70 percent p of thhe total crediit amount. Thhe Companyy had the stronger working capittal status and the Com mpany’s debbt-to-equity ratio was 1.82 times as at 31 December 2012. Moreoover, the Coompany is likely to geet the betteer conditionss from the financial institutions due d to the Company’s C coonsistently good g perform mance. 8 . 6 R i s k a s s o c i a t e d w i t h t h e f l u c t u a t i o n s i n t h e pr i c e o f g o o d s i n t h e w o r l d m a r k e t Although the Company sells s the prooducts to thee domestic customers m mostly, produuct price w the woorld market because thhe petrochem mical products are com mmodity which price fluctuates with fluctuates in accordancce with dem mand and supply in thee world marrket. The Coompany’s profitability changes acccording to the world market pricce as the cycle. There is the rissk in the case c that the Companny buys the goods at thhe high pricee and the prrice decliness. This may lead the Com mpany to sell inventoory to the clients cheeaper or low wer than buying price which cauuses the Coompany’s profitability’’s lower or loss l in somee cases. How wever, the Company C tries to lower this risk byy keeping inventory of o commodityy in the optim mal level whhich has highh price fluctuuation, and ffollows the changing c price from the t global suuppliers dataa all the timee. Moreover, for the custoomers, who order the bigg volume in advance, the Compaany is supporrted about thhe quantity and a price dirrectly from m manufacturerrs and/or s products are less affectedd by price fluuctuation suppliers. Thhis can loweer the risk. Fuurthermore, specialties because thee Company sets s the pricee according to cost plus policy.

30

 

Global Connections Public Company Limited


In 2012, thee Company had reversall reduction of o inventory to net realizzable value amounted a too THB 2 million m becauuse the goodds had alreaady been soold out. Durinng the yearr, commodityy prices hadd fluctuation, thus thee Company reduced coost to net reealizable vaalue amounting to THB 3 million inn 2nd quarrter and reveersed the am mount in 3rd quarter beccause of thee product vaalue turned to t be higherr and hadd already beeen sold out. 8 . 7 R i s k a s s o c i a t e d w i t h l o w g r o s s p r o f i t m a r g in Gross profitt margin of the t Companny is relatively low as moore than 50 percent of total sales iss Commoddity Polymer. Thus, facttors i.e. the fluctuation of interest rate, foreignn exchangee, quality off account receivablee and invenntory manaagement coould affect net profit margin. Hoowever, thee continuaally improvem ment of the Company's performancee strengthenns the workinng capital annd relativelyy low D/EE ratio conseequently enaable the Com mpany to haave better offer o and conndition from commerciall banks. Furthermore, F , the Company followss the exchaange rate policy, p custoomer credit policy andd inventorry management policy closely c includding cost redduction deveelopment pollicy, which should s lowerr the risk of o low profit margin. Apart from m that the Company alsoo tries to inncrease saless on the speecial grade products byy increasinng customerrs’ base whiich could reeduce the rissk. By the end e of 20122, the total sales s of thee special grade g producct in 2011 ass 36 percent has increaased to 45 percent p in thhe end of thhe year, THBB 1,370 milllion in 2011 and a THB 1,6559 million in 2012, increaased of 21 peercent from 22011. The gross margin m beforre delivery expenses, deccrease from 7.2 percent in 2011 to 6..8 percent inn 2012. Altthough the sales s of com mmodity Polyymer ratio deecreased, at the same tim me, the grosss margin forr special grade g producct also had dropped witth the increaase of comppetition and the proportiion of semi-commoddity products are higher.

   

 

Annual Report 2012

31


 

8.8 Risk assocciiated with terminates the distributing agent contact Thhe period off distributingg agent contracts are either yearly basis or 2 years basis which is normal pracctice in the petrochemica p al industry. Thus, T the Company may face the risk from termination of agent agreement if thee Company could not perform p folloowing the supplier's reqquirement i.ee. cannot achieve thee sales target or cannot maintain m thee required inffrastructure. Hoowever, the Company haas good perfformance coontinuously and a also has many regulaar clients, including deevelop new client groupp in various industries i whhich satisfy the t manufaccturers. Moreeover, the Company contacts c andd working with w the prodducers closely to explainn the progreess of domestic sales and markett developmeent. Thus, the producers still renew the agreement althoughh the Company may not achievee the sales taarget becausse they undeerstand the reasons. r In some cases when bussiness policiees do not allign with eaach other orr the merger creates products duuplication, the t Companny may neeed to terminnate from the t role of distributor of some companies. For the SCG G Plastics Coo., Ltd. in 20012 and BASSF (Thailand) Co., Ltd. inn 2011, the Company C agreed to teerminate thee role as the distributor. Hoowever, term minated from m SCG Plasttic Co., Ltd.,, on June 30, 2012 couuld directly effect e to the Companny and the customers so s the Comppany simultaaneously repplaced SCG PPlastic Co., Ltd. with PTT Polymeer Marketing Co., Ltd., a subsidiary s coompany of PTT P Group onn July 1, 20122. Although, it cannot replace all as a can be seeen from thee drop of salees around 166 percent or THB 375 milllion but still reducing the risk as the t Companyy tries to asseess the risk and a the longg-term plan to t handle thee crisis. 8. 9 R i s k f r o m the f l o o d Thhe floods in 2011, in maany industriaal and residdential zone had causeed a wide spread s of damages. The T Companyy is located on King Kaeew Road. Inn line with Suwannabhu S umi Airport, as a part of the Floodw way where is i in a floodding risky area. a Howevver, the Com mpany was not affecteed during the 2011 flooding and also King Kaeew Road acrooss the streeet from On Nuuch Road to Bangna-Traad Road.

32

 

Global Connections Public Company Limited


However, as King Kaeew Road is used to bee the dyke line. Since we have fooreseen andd assessedd this flood siituation. So we w made lannd filled to the same levvel with Kingg Kaew Roadd. Or in otherr words, our o road grouund is in the same level with w the dykkes. The plattform includees an office building andd warehouuse height frrom the grouund about 1 meter and 1.3 meter reespectively. TThe Companny has beenn buying insurance policy covering flooding damage. Inn 2011, manny insurancee companiess have paidd compenssation in floooding duringg 2011, as thee result, issueed a policy in limited ressponsibility. However, att present, the insurannce compannies can inccrease the responsibilitie r es in floodinng because they havee confidennce in government policyy and predicct that the chhance of flooding is low.

   

 

Annual Report 2012

33


9  Sh&areDhhoivoilddeenr dStPruoclitcuyre

 

Shareholder Structure Ass of January 11, 2013*** Name No. of shhares 1. Mr. Somchaai Kulimakinn *

% of Paid up CCapital

44,4 499,900

22.25

2. Mr. Aikachaai Sirijantannan**

28,4 470,730

14.24

3. Mr. Sumruaay Tichachool

27,1125,000

13.56

4. Mr. Bhiya Jriyasetapon J g

26,1125,000

13.06

5. Mr. Somkiat Terdtultavveedey

9,2200,000

4.60

6. Mr. Siri Thiirawattanaw wong

8,2226,000

4.11

7. Mr. Monthoon Kwesuwaan

6,4 473,300

3.24

8. Mr. Chalit Limpanavet

2,0000,000

1.00

9. Mr. Itsara Kulimakin K

1,5578,380

0.79

100. Mrs. Siwaporn Jarat

1,4 431,300

0.72

44,8870,390

22.43

200,0000,000

100.00

11.. Others Total Rem mark :

Includeed related persoon, under sectioon 258 of the Securities S and Exchange E Act B.E. 2535 *

Mrs. Boonsri Kulim makin who holdd 100 shares

h 1,345,730 shares ** Mrs. Nisaporn Sirijaantanan who hold  

*** Clossure of registeer book as of January J 11, 20133 which replace on Decemb ber 31, 2012

F o r e i g n S ha r e ho l de r s a s o f J a n u a r y 1 1 , 201 3 Thee number of foreign sharreholder wass three shareeholders whiich held 5300,000 shares or 0.265% of o paid-up cappital Notte: The Com mpany has a limitationn on the percentage of equity shares heldd by foreiggn shareholderrs stated in the t article off associationn no. 7 that the Companny equity shares are fully transferabble unless thosee transferringg will cause share of thee Company held h by the foreign sharreholders excceed the 49 9% of the Comppany total shhares, the Coompany have the rights to reject thoose transactioons.

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Global Connections Public Company Limited


Dividend Polliicy C Company’s d dividend policy is to distribute to sharreholders all funds surpluus to the inveestment andd operationn requiremeents of the Company ass determinedd by the booard and appproved by shareholderr meeting,, our target dividend paay out ration is respect of o each finaancial year iss 40% of thee Company’ss net proffit remained after taxattion, and the appropriattion of all kinds k of reseerve fund sttipulated byy the Com mpany.

   

 

Annual Report 2012

35


36

 

Global Connections Public Company Limited


10  MaannadgeBmoaerndt oSftrDuicretucrteors  

1.

M r . V i r a h M a vi cha k

2.

Dr . P i s i t L e e a ht a m

3.

A s s o c. P r o f . C ha w a l e e P o n g p a ti r o chn a

4.

M r . S u cha r t S u p ha y a k

5.

M r . S o m cha i Ku l i m a k i n

6.

M r . V e e r a Kw a n l o e tchi t

7.

M r . S u m r u a y T i cha cho l

8.

M r . A i k a cha i S i r i j u n ta n a n

9.

M r . B hi y a J r i y a s e ta p o n g

10. 10. Mr. Siri Thirawattanawong

11. 11. Mrs. Pravishya Hansakui

   

 

Annual Report 2012

37


CHAIRMAN OF THE BOARD AND INDEPENDENT DIRECTOR Mr. Virah Mavichak - Age 69 / Peercent of Shaare holding ((%) 0.00 (0% %) - M.S. Chemical Engineerinng, Universitty of Texas, USA - B.S. Engineeering, Chulaloongkorn Univversity - Directors Cerrtification Proogram (DCP)) Class 26/20003, Role of The Chairman Prrogram (RCP) Class 17/20007, Thai Institutee of Directorss (Thai-IOD)

2008 – Pressent

C Chairman of The T Board

Global Connectionns PCL

2004 – 20008

C Chairman of Audit

Global Connectionns PCL

C Committee 2009 - Pressent

Inndependent Director

B.S. Metal Co., Ltd

2009 - Pressent

Inndependent Director

Srivichhai Vejvivat Co., Ltd.

a Chairmann of Audit and C Committee 2005 - Pressent

D Director and

Refinee Tech Co., Ltd. L

E Environmenta al Advisor 2008 – 20111

T Senator The

Senatee, Kingdom of o Thailand

2008 - 20009

C Chairman of The T Board

TPT Peetrochemical PCL

2001 - 2003

D Director-Gene eral

Departtment of Industrial Workss

2000 - 20001

D Deputy Permaanent

The Peermanent Seecretary

S Secretary

Office of Ministry of o Industry

G General Inspeector

The Peermanent Seecretary

1998 – 2000

Office of Ministry of o Industry

38

 

Global Connections Public Company Limited


CHAIRMAN OF THE AUDIT COMMITTEE AND INDEPENDENT DIRECTOR Dr. Pisit Leeahtam - Age 62 / Percent P of Shhare holdingg (%) 0.00 (00%) - Ph.D, Econnomics, Erasm mus Universitty, Netherlannds - M.S., Econoomics, Erasm mus Universityy, Netherlands - B.S., Econoomics, Erasm mus Universityy, Netherlandds - Directors Certification Program P (DCPP) Class 18/22002, Thai Instituute of Directoors (Thai-IODD)

2008 – Preesent

Chairman of Audit

Globaal Connectionns PCL

Committee 2004 - 20008

Chairman of The Board

Globaal Connectionns PCL

2010 - Pressent

Chairman of The Board

Thai Tank Terminaal Ltd.

2008 – Preesent

Director

P Planner Co., Ltd.

2006 – Preesent

Country Chaiirman

Jardinnes Matheson (Thailand) Lttd.

2005 – Preesent

Independentt Director and

Tira Thai T PCL

Chairman of Audit Committtee 2004 - Preesent

Chairman of The Board

Pruekksa Real Estatte PCL

2004 – Preesent

Independentt Director and

Quality Minerals PCCL

Chairman of Audit Committtee 2002 – Preesent

President

Provident Fund Asssociation

2001 - Pressent

Vice Chairmaan and

KGI Securities S (Thaailand) PCL

Chairman of Audit Committee

   

 

Annual Report 2012

39


 

AUDIT COOM MMITTEE AND INDEPENDENT DIRECTOR Assoc. Prof. Chawalee Pongpatirochna - Age 77 / Peercent of Shaare holding ((%) 100,000 (0.05%) - Equivalencee to Master Degree, Business Administration, The School of o Economiccs and Busineess Administrration in Gothenbuurg, Sweden - Bachelor Deggree in Accoounting, Chulalongkorn University U - Director Accreditation Proogram (DAP)) Class 32/20005, Thai Institutee of Directorss (Thai-IOD)

Present

E Executive Dirrector

Researrch and Development for Industry Unnit, Institutte of Biotechhnology and Genetiic Engineerinng, Chulalonggkorn Univerrsity

2004 - Pressent

A Audit Committee

Global Connections PCL

1999 - Pressent

C Chairman of Audit A

Phatraa Leasing PCLL

C Committee 1997 - Present

D Director

Phatraa Leasing PCLL

1995 - 2008

E Executive Dirrector

Chula Unisearch, Chulalongkor C rn University

2004 - 20007

E Executive Dirrector

The Coontinuing Edducation Cennter, Chulaloongkorn University

1996 - 2003

M Managing Direector

Intellecctual Propertty Institute, Chulaloongkorn University

40

 

Global Connections Public Company Limited


CHAIRMAN OF THE NOMINATION AND REMUNERATION, AUDIT CCO OMMITTEE Mr. Suchart Suphayak - Age 55 / Percent P of Share holdingg (%) 0.00 (00%) - Master Deggree in Businness Administtration, Chulaalongkorn Unniversity - Bachelor Degree D in Accounting, Asssumption Unniversity - Directors Certification C P Program (DCP) Class 72/2006, Audit Com mmittees Proggram (ACP) CClass 14/20006, Directors Diploma D Exam mination Class 20/2006, Thai Institute of Directtors (Thai-IODD)

2008 - Preesent

Chairman off The Nominnation Globaal Connectioons PCL and Remuneration Committee

2006 - Present

Audit Comm mittee

Globaal Connectioons PCL

2011 – Preesent

Associate Juudge

Juvenile and Fam mily Court of Phachinburii

2007 – Preesent

Financial Addvisor

Rerm m Udom Sugaar Factory Coo., Ltd.

2004 - 20006

Audit Comm mittee

ADDA A (Thailand) PCL

2004 - 20006

Audit Comm mittee

Repaax Construction Co., Ltd.

2003 - 20004

Chief Financial Officer

Samm mitr Motor Coo., Ltd.

1998 - 20003

Vice Presideent

Kad Suan Kaew Co., Ltd

   

 

Annual Report 2012

41


VICE CHAIRMAN AND CHAIRMAN OF EXECUTIVE COMMITTEE Mr. Somcch hai Kulimakin - Age 55 / Percent P of Shhare holdingg (%) 44,499 9,800 (22.25%) - Bachelor Degree D in Bussiness Adminnistration, Assumptionn University - Directors Certification C P Program (DCPP) Class 62//2005, Finance foor Non-Finannce Director (FND) Class 2/2003, Leadershipp and CEO Suuccession Planning 4/20006, Thai Instituute of Directtors (Thai-IODD)

1995 - Pressent

V Chairman and Vice

Global Connections PCL

C Chairman of Executive E C Committee

42

1988 - 19955

A Assistant Mannaging Directtor

Liack Seng S Tradingg Co., Ltd.

1985 - 19888

A Assistant General Manageer

Centraal Pacific (EX X-IM) GmbH,, Germany

1979 - 19855

S Dept. Maanager Sale

Metro Co., Ltd.

 

Global Connections Public Company Limited


PRESIDEEN NT Mr. Veera Kwanloetchit - Age 51 / Percent P of Shhare holding (%) 0.00 (00%) - Master Deggree of Businness and Adm ministration, Chulalonggkorn Universsity - Bachelor Degree D of Sccience, Majorr in Chemical Engineeringg, Chulalonggkorn Universsity

2010 - Preesent

President

Globaal Connectioons PCL

2006 – 20009

Managing Director D

Thai Houghton 19 993

2001 - 2006

General Mannager

DuPoont (Vietnam m)

1998 – 20001

Managing Director D

Xalooy Asia (Thailland)

1988 - 199 98

Business Maanager and

DuPoont (Thailandd)

Sales Managger of ASEAN to Engineering Plastic

   

 

Annual Report 2012

43


EXECUTIVE VICE PRESIDENT : DEPARTMENT OF SALES AND MARKETING 1 Mr. Sumruay Tichachol - Age 55 / Peercent of Shaare holding ((%) 27,125,0000 (13.56%) - Bachelor Deegree in Econnomics, Tham mmasat Univversity - Directors Cerrtification Proogram (DCP)) Class 72/20006, Finance for Non-Financce Director (FFND) Class 155/2005, Thai Institutte of Directorrs (Thai-IOD))

1995 - Pressent

E Executive Vicce President :

Global Connnections PCCL

D Department o Sales of a Marketingg 1 and

44

1994 - 19966

S Represenntative Sale

Siam Brothher Import-Ex xport Co., Ltd.

1989 - 1994 4

D Direct Sale Maanager

Thai Polyeethylene Co., Ltd.

1986 - 19888

S Represenntative Sale

Siam Cemeent Trading CCo., Ltd.

1981 - 19866

S Section Manager Sale

Metro Co., Ltd.

1980 - 1981

O Officer

Bangkok Steel S Industryy PCL

 

Global Connections Public Company Limited


EXECUTTIIVE VICCEE PRESIDENT : DEPARTMENT OF SALES AND MARKETING 2 Mr. Aikacch hai Sirijuntanan - Age 48 / Percent P of Share holdingg (%) 27,125,000 (13.56% %) - Master Deggree in Businness Administtration, Chulaalongkorn Unniversity - Bachelor of o Science inn Industrial CChemistry, King Monggkut’s Institute of Technoology North Bangkok - Bachelor Degree D in Polymer Engineeering, Rajamanggala Institute of Technoloogy - Certificate Chemical Enngineering, Rajamanggala Institute of Technoloogy - Directors Certification C P Program (DCP) Class 69//2006, Finance foor Non-Finannce Director (FND) Class 15/2005, Thai Institute of Directtors (Thai-IODD)

1995 - Preesent

Executive Vice V Presidennt :

Globaal Connectioons PCL

Department of Sales and Marketiing 2 1986 - 199 95

Sale Dept. Manager M

Liackk Seng Trading Co., Ltd.

1986 - 19888

Instructor off Polymer

Rajamangala Insstitute of

Engineeringg Faculty

Techhnology

   

 

Annual Report 2012

45


EXECUTIVE VICE PRESIDENT : DEPARTMENT OF SALES AND MARKETING 3 Mr. Bhija Jriyasetapong - Age 52 / Peercent of Shaare holding ((%) 26,125,0000 (13.06%) - Bachelor Degree in Businness Adminisstration, Assumption University - Directors Cerrtification Proogram (DCP)) Class 69/20006, Finance for Non-Financce Director (FFND) Class 155/2005, Director Acccreditation Prrogram (DAPP) Class 30/22004, Thai Institutte of Directorrs (Thai-IOD))

2008 - Pressent

N Nomination

Global Connectionss PCL

and Remunerration C Committee 1995 - Present

Executive Vicce President :

Global Connectionss PCL

D Department o Sales of and Marketingg 3

46

1989 - 19955

Sale Dept. Maanager

Liack Seng S Tradingg Co., Ltd.

1983 - 1989 9

Sale Dept. Maanager

Metro Co., Ltd.

 

Global Connections Public Company Limited


EXECUTIIV VE VICE PRESIDENT : DEPARTMENT 

OF ADMINISTRAATTION & OPERATION Mr. Siri Thirawattanawong - Age 49 / Percent P of Share S holdingg (%) 8,226,0000 (4.11%) - Bachelor Degree D in Business Adminnistration, Assumptioon University - Directors Certification C P Program (DCP) Class 72/2006, Finance foor Non-Finannce Director (FND) Class 15/2005, Director Acccreditation Program (DAAP) Class 30//2004, Thai Institute of Directtors (Thai-IODD)

2008 - Preesent

Nomination

Globaal Connectioons PCL

and Remuneration Committee 1995 - Preesent

V Presidennt : Executive Vice

Globaal Connectioons PCL

Department of Administratioon and Operation 1992 - 199 94

Sale Dept. Manager M

Liackk Seng Trading Co., Ltd.

1990 - 1992

Sale Dept. Manager M

Talom msin Plastic Co., C Ltd.

1987 - 199 90

Sale Repressentative

MC Plastic P Co., Lttd.

   

 

Annual Report 2012

47


VICE PRESIDENT – FINANCE AND ACCOUNTING DEPARTMENT hya Hansakul Mrs. Pravissh - Age A 49 / Peercent of Shaare holding ((%) 100,000 (0.05%) - Bachelor B Deggree in Businness Administtration, Assum mption Univeersity - Graduate G Diploma in Auditing, Thammassat University - Directors D Certiification Progrram (DCP) Claass 87/2007, T Institute of Directors (TThai-IOD) Thai - Executive E Development Prrogram (EDP) Class 2/20088, T Listed Coompanies Assoociation Thai

2002 - Pressent

V President Finance Vice

Global Connectionss PCL

and Accounting 2001 - 20011

Finance Plannning &

GlaxoSSmithKline (TThailand) Lim mited

Accounting Manager M 1998 - 20011

Accounting and

Block Drug D Companny (Thailandd) Limited

Financial Conntroller 1991 - 19977

Finance and Accounting

C. Melcchers & Co., (Thailand) LLtd.

M Manager 1987 - 19900

48

Senior Auditorr

 

Global Connections Public Company Limited

Pricew waterhouse Coopers C ABASS Ltd.


Management Structure Managemeent structuree comprises with four committees c which are the Board of Directors,, the Execcutive Comm mittee, and thhe Audit Com mmittee detaail as the folloowings; B oaa rd o f Direc to t rs

The Noomi nat io n ann d

E xec ut ive Com m ittee

A u dit C o mm mittee

President

I n t e rna l A udit

Remune raati on Co mmi tte e

The Pree si dent O f fi ce c

Sales &

Sales &

Sales &

H um an

Marketing

Marketing

Marketing

Re soo u rce a nd

Department 1

Department 2

Department 3

A d miin is t rat i o n

O pe rat ioon

F inna n ce & A c co un t

T he B o a r d o f Di r e cto r s Membbers of the Board B of Direcctors as of 31 3 December 2012 1. Mrr. Virah Mavvichak

Chairmaan of The Boaard and Indeependent Director

2. Mrr. Somchai Kulimakin K

Vice Chaairman

3. Mrr. Sumruay Tichachol T

Director

4. Mrr. Bhiya Jriyaasetapong

Director

5. Mrr. Siri Thiraw wattanawongg

Director

6. Mrr. Aikachai Sirijuntanan S

Director

7. Drr. Pisit Leeahtam

Indepenndent Directoor and Chairm man of Audit Committee

8. Asssoc. Prof. Chhawalee Poongpatirochnna Indepenndent Directoor and Member of Audit Committee C 9. Mrr. Suchart Suphayak S

Indepenndent Directoor and Member of Audit Committee C

Secreetary to the Board B is Ms. Pornpimol Toorpaiboon

   

 

Annual Report 2012

49


T h e n a m e ( s ) o f a u t h o r i z e d d i r e c t o r s t o s i g n o n be h a l f o f t h e C o m p a n y Mrr. Somchai Kulimakin, Mr. M Siri Thirrawattanawoong, Mr. Bhhiya Jriyasetaapong, Mr. Samruay Tichachol and a Mr. Aikaachai Sirijunttanan, two of fifth of these t directoors have thee power of Attorney signed withh Company stamp S c o p e , A u t h o r i t i e s a n d D u t i e s o f t h e B o a r d o f D i r ec t o r s Thhe Board of Directors hass authority inn managemeent and operation of thee Company's business in accordannce with thee laws, objecctives, the Articles A of Association, annd the resoluution of sharreholders’ meetings, has h authorityy to formulaate the policcies and direections, the financial m management,, the risk managemennt, to superrvise and coontrol the Management M t to compliaance with tthe assignedd policies efficiency and a effectivvely, to be responsible to the sharreholders, haas to preserve the sharreholders' interest, annd disclose the inform mation accuurately and completelyy with the standard and the transparenccy. In addition, the Boaard of Directtors is authoorized to apppoint the ddirectors, annd/or the executives to act undeer the scope of authorityy and duties of the Boarrd of Directoors, unless the acts of the followinng matters which w shall bee approved in advance by the shareeholders’ meeeting: (aa) Any issuees stipulated by law that resolutions of o shareholdeers must be ssought. (bb) Any transsaction in whhich the direectors have the t interest and a there is a law or proovision of the Stockk Exchangee of Thailannd prescribess that theree must be tthe approvaal of the shareholdders' meetingg for such traansaction. In this connection, the director d who has the intterest or hass the conflicct of interesst in any matter is noot entitled to cast the vote for such matter. m T he E x e cu ti ve C o m m i tte e Meembers of thhe Executivee Committee as of Decem mber 31, 20122 1. Mr. Somchaai Kulimakinn

Chairman of o Executive Committee

2. Mr. Sumruaay Tichachool

Executive Committee C

3. Mr. Bhiya JJriyasetapong

Executive Committee C

4. Mr. Siri Thiirawattanaw wong

Executive Committee C

5. Mr. Aikachaai Sirijuntannan

Executive Committee C

 

50

 

Global Connections Public Company Limited


Scope, Authorities and Duties of thhee Executive Committee 1. To plann and form mulate the Company’ss policies, directions, sstrategies, work w plans,, organizaation structuure, manageement structuure, and business discippline to propper with thee circumstances of thhe economy and the maarket’s compeetition for prroposing to the t Board off Directorss’ approval. 2. To plann and formullate the Com mpany’s bussiness plan, annual a budgget, line of authority a forr proposinng to the Board of Directtors’ approvaal. 3. To auddit and folllow the im mplementatioon of the Company’s assigned policies p andd manageement directions efficiently and suppport the Company’s businness performaance. 4. To takee consideration for approoval of aucttions or hire of works w with companny or personn with thee budget scoope not exceeed THB 1500 million. 5. To recrruit or dismiss the Com mpany’s stafff in managgement leveel excludingg Managingg Director/ President and a the Com mpany’s direcctor positionss. 6. To supeervise and chheck the outtcome of thee Company’ss daily operaation in accoordance withh the Com mpany’s businness plan appproved by the t Board of Directors. 7. To sign on any doocuments whhich related to withdraw wal documeent from thee Company’ss bank account undder the condditions and limitations which apprroved by thhe Board off Directorss. 8. To perm mit the Company’s expeenditures whhich the Exeecutive Com mmittee can approve itss withoutt any limitatioon on the appproved annnual budget by b the Boardd of Directorss. 9. To sign on contracct which binnding the Coompany for the period from 1-3 yeears and nott exceed THB 150 milllion. 10. To inveest or invest in capital ex xpenditure (not ( exceed THB 150 million) or thee transactionn fixed onn the annual budget appproved by thhe Board of Directors. D 11. To find out the finnancing for investmentt or invest in capital eexpenditure which wass approveed by the Booard of Direcctors, or refinnance the ouutstanding liaabilities undeer the betterr terms annd conditionns. 12. To apprrove extra coompensationn for staff (BBonus) in acccordance wiith the approoved budgett by the Board B of Direectors. 13. To apprrove the risinng of staff’s compensatioon in accorddance with tthe approvedd budget byy the Boaard of Directoors.      

 

Annual Report 2012

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14 4. To act as appropriates a for any dutiees which shaall be assigned from the Board of Direectors. Hoowever, thee Executivee Committeee shall deleegate its powers to tthe Manageement of the Companny as approppriates for appproving of one or moree financial isssues under tthe authorized scope of power. Neevertheless, the above delegation of authoriity shall bee in accordance with Thailand legislations and the Company’s thee articles of association. Moreover, where w the coonflicts of innterest of the Executiive Director((s) occurred of the prohhibited personn under the provision off SEC, the Executive E Committee shall presennt that issuee to the Booard of Direcctors for takking the coonsideration, and the Executive Director(s) D w has the conflict who c of innterest is not entitled to cast c the votee for such matter. Noonetheless, any a transacttions which were in relaation or related with thee receiving or selling the Company or subsiddiary’s assetts under proovision of SEET, shall be approved by the sharreholder’s meeting and/or acted as a stated in that t provision. T he M a n a g e m e n t Meembers of thhe Management as of December 31, 2012 2 1. Mr. Somchaai Kulimakinn

Chairman off Executive Committee C

2. Mr. Veera Kwanloetchit

President

3. Mr. Sumruaay Tichachool

ment of Saales and Executive Vice President Departm Marketing 1

4. Mr. Aikachaai Sirijuntannan

Executive Vice President Departm ment of Saales and Marketing 2

5. Mr. Bhiya Jriyasetapon g J

Executive Vice President Departm ment of Saales and Marketing 3

6. Mr. Siri Thiirawattanaw wong

Executive Vice V Presidennt Departmennt of Adminisstration and Operatioon

7. Mrs. Pravishhya Hansakkul

52

Vice Presideent Departmeent of Accouunting and Fiinance

 

Global Connections Public Company Limited


Scope, Authorities and Duties of thhee Managing Director 1. To manages and opperates Comppany’s normaal business inn accordancce with businness policies,, b the board of Directors.. plans annd strategiess approved by 2. To perm mits any normal n transaction of the t Companny includingg offering, contracting,, purchassing, and hirring within the amountt of THB 30 Million or in accordancce with thee authoritty assigned by b the Boardd of Directors. 3. To assigns any responsibilitie r es of the Company’s managemeent and operation o too t organizatiion structuree approved by b the Boardd the Mannagement orr to the stafff according to of Direcctors in line with w the Law ws and the Coompany’s articles of assoociation. 4. To recruuits, appointss, transfers, dismiss, d lay-ooff, assigns wages w of all Company’s staffs below w the mannagement leevel includinng appointinng employer’’s representaative for thee Company’ss provident fund com mmittee. 5. To issuees any ordeers, practices, declaratioons, and meemorandums involving operation o inn accordaance with thhe policies annd for preserrve interest of o the Compaany and for keeping thee Companny’s disciplinee. 6. To acts as appropriaates for any duties whichh shall be asssigned by thhe Board of Directors. D The Managging Directorr/President shall s be undder direct suupervising off the Board of Directorss ment Directorr/President shall s perform m and shalll directly repport to the Board of Direcctors. Thus, the Managem in the directions andd policies assigned by thee Board of Diirectors. Nevertheleess, the abovve delegationn of power shall s be in acccordance w with Thailandd legislationss and the Company’s articles of association. a M Moreover, where w the coonflicts of interests of thhe Managingg Director//President occcurred or thhe prohibitedd person undder the SEC’’s provision aappeared, thhe Managingg Director//President doo not have power p for appproval that matter and shall presentt that issue to t the Boardd of Directtors for taking the considderation. Nonethelesss, any transsactions, which were in relation or related r with the receivinng or sellingg the Com mpany of affiliated a Com mpany’s asssets under the t SET proovision, shalll be approvved by thee sharehollder’s meetinng and/or accts as stated in that provvision.  

   

 

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T he A u di t C o m m i tte e Thhe Board of Director estaablished the Audit Committee who is independennt from manaagement. The Audit Committee comprises of o Independdent Directorrs who are expertise aand not relate with Executive and a major shhareholder. Meembers of thhe Audit Com mmittee as off 31 Decembeer 2012 1. Dr. Pisit Leeeahtam

Chairmaan of Audit CCommittee

2. Assoc. Proff. Chawalee Pongpatirocchna

Audit Committee

3. Mr. Suchartt Suphayak

Audit Committee

All of them haave adequate expertisee and experience to revview creditabbility of the financial reports of thhe Companyy Secretary of o the Audit Committee C iss Ms. Wallayaa Watsarujakkorn S c o p e , A u t h o r i t i e s a n d D u t i e s o f t h e A u d i t C o m m it t e e 1. To review the sufficieency and accuracy a in accordancee with accoounting standards by coordinatinng with the external audditors and management m who is respponsible for preparing p the quarteerly and yeaarly financiaal reports. The audit coommittee maay suggest issues or matters to be includedd for review or audit by the externaal auditors during its auddit of the Company. o the internnal control ssystems andd internal 2. To review the adequaacy and efffectiveness of audit functions by cooordinating with w the extternal auditoors and internal auditorss, and to determine an internal audit unit’s independennce, as well as to approove the appoointment, o the chief of o an internaal audit unit or any otherr unit in charrge of an transfer annd dismissal of internal audit. A Regulations of the SET, and 3. To review compliance with the Seecurities and Exchange Acts, any other relevant r law ws. 4. To consider and advisee the appointment of thee external auuditors includding the auddit fee by consideringg the indepeendence, creeditability, thhe adequacyy of its resouurces, the firrm's audit engagements, and thee experiencee of its supeervisory and professional staff, as well w as to attend a noon-managem ment meeting with an auuditor at leasst once a yeear.  

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Global Connections Public Company Limited


5. To consider compliance with all connectted transacttion disclosuures or the conflict-of-interestss disclosuress, to ensuree that theyy are in coompliance w with the law ws and thee Exchannge’s regulatiions. 6. To takee care of any a other matters m assigned to it by b the Boardd of Directoors, such ass reviewinng the Com mpany's finanncial and rissk managem ment policiess, reviewing compliancee with thhe Code of Corporate Conduct off the manaagement, annd reviewinng with thee Companny's manageement, all im mportant reports whichh must be ddisclosed too the publicc accordinng to the law w (e.g. Manaagement Disccussion and Analysis (MDD&A), etc.). 7. To repoort the activitties of the Audit Committtee in the Coompany's annnual report, which mustt be signed by the Chairman C of the Audit Committee. C T followingg information should bee The includedd in the repoort. 7.1 Comments on the Compaany's financiial reporting process annd the discllosure of itss finaancial inform mation, whichh must be coorrect, sufficcient, and creedible. 7.2 Comments on the t adequaccy of the Com mpany's internal control systems. 7.3 Staatements on whether thee Company's auditor is suuitable for re-appointmennt. 7.4 Comments on compliance c with the Seecurities and Exchange Acts, Regulaations of thee SETT, and any other o relevannt laws. 7.5 Comments on the t related trransaction or conflict-of--interests traansaction. C meeetings, and the attendaance of the meetings byy 7.6 Thee number off the Audit Committee eacch committeee member. 7.7 An opinion or overview comment received by b the Auddit Committeee from itss perrformance off duties in acccordance with w the charrter. 7.8 Othher statemennts that shareeholders andd general invvestors deem m to be consiidered underr thee scope of thhe functions and responssibilities assiggned to them m by the boaard.  

   

 

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Thhe Audit Com mmittee is directly respoonsible to thee Board of Directors. D The Audit Com mmittee is subject to a three yearrs term. Nevvertheless, a retiring director is eligibble for re-eleection in acccordance with the Booard of Directtors deems appropriate. a T he N o m i n a ti o n a n d R e m u n e r a ti o n C o m m i tte e Meembers of thhe Nominatioon and Remuuneration Committee as of o Decemberr 31, 2012 1. Mr. Suchartt Suphayak

o Nominationn and Remunneration Com mmittee Chairman of

2. Mr. Bhiya Jriyasetapon g J

Nominationn and Remunneration Com mmittee

wong 3. Mr. Siri Thiirawattanaw

Nominationn and Remunneration Com mmittee

Secretary of the Nominaation and Reemuneration Committee is i Ms. Pornpimol Torpaibooon S c o p e o f d u t i e s a n d r e s p o n s i b i l i t i e s o f t h e N o m i na t i o n a n d R e m u n e r a t i o n C o m m i t t e e 1. To elects individual i orr considers candidate who w is qualiified to become membeer of the Board of Director D or other o committees, according to thee Board of Director meembership criteria for recommendaation to the Board of Direector. 2. To consideers and advvises suitability of the Committees’ C size, structuure, and quaalification which hass diversifiedd acknowleddge, ability, and experrience in acccordance with w the Company’ss business. a elects for the succcession of the Compaany’s Managging Directoor or the 3. To plans and Company’ss President too propose thee Board of Directors. D R n Committeee regularly reeports perforrmance and submit it 4. The Nominnation and Remuneration to the Boarrd of Directorrs. 5. Regularly review the appropriateneess of principple to considderate remunneration to allign them t sharehollders. with the Coompany’s gooals and the interests of the  

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Global Connections Public Company Limited


6. Consideerate approprriate remuneeration or other benefits of Board off Director annd Managingg Director/President and a propose to Board of Directors andd shareholdeers’ Meeting for approvall ws : that connsiderate facctor as follow 6.1 Besst practice inn industry for consideratee remuneration. 6.2 Perrformance annd size of thhe Company.. 6.3 Ressponsibility, knowledge k a experiennce of directtor. and 7. Disclosee the remuneeration policyy and availaable options and commennts from thee Nominationn and Rem muneration Committee C inn the Annuall Report 8. Consideerate approprriate remuneeration to attract executtive for a lonng time in liine with thee Companny’s performaance and shareholder’s benefit. b 9. Perform other dutiess as assignedd by the Boaard of Directoors. The Nominnation and Remuneration R n Committee is directly reesponsible too the Board of Directors.. In additioon, the Chairman and members m of thhe Nominatioon and Remuuneration Coommittee havve a term off three yeears. The authorrity of the Nomination N a Remunerration Comm and mittee shall nnot include the authorityy to approove transactions which may m cause a conflict of interest withh the Compaany or any trransaction inn which members m of the t Nominattion and Rem muneration Committee C o their connnected persoons have ann or interest or o benefit thhat causes a conflict of interest according to thee SET’s reguulations. The approval off said trannsactions is required too be proposeed to the Board B of Dirrectors and//or Shareholders of thee Company for their coonsideration and approvval in accordance with thhe Companyy’s Articles off Associationn or relevaant laws, ex xcept for thee approval of o transactioons in the noormal coursee of business which aree already covered c by existing e guiddelines approoved by the Board.

   

 

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T he f i n di n g f o r the B o a r d o f Di r e cto r s Acccording to the Companny’s regulatioons, The Nomination and Remuneraation Committtee shall select qualified personss to become directors. Thhe Board of Directors consists of at lleast 5 Direcctors who appointed by b the Shareeholder Meeeting with Majority decission in respeect to the ruules and meaasures as follows: e by the t shareholdders 1. Individual election 2. Under 1., thhere is an onne vote per one o share 3. The sequence of perssons who beeing appointted started from the higghest votes shall be appointed respectivelyy as the Direector(s) as equal as thhe total num mber of the Directors which will be appointeed or elected in that peeriod. Howevver, when thhere are twoo or more persons geetting the sam me amount of o votes which caused to t exceed thhe sum of apppointing or electingg of the Direectors in thaat period, thee decision of o the Chairm man of electtion shall prevail. Thhere is a number of onee-third of thhe Board of Directors shaall retire in eeach annuaal general meeting. Where W the number of the Board of Directors cannnot exactly divide d by thrree, the totaal number of retiring Director(s) D shhall be the closet numbber of one-tthird. The reetiring Directoor(s) in the first and second yeaars after Com mpany’s transforming shaall be selecteed by the luucky draw. OOtherwise, thhe longer Directors shaall be retiredd. However, the t retiring Director(s) D unnder this clauuse may be re-elected. Ex xcept for thhe number of o the Boardd of Directoors is not ennough for thhe completion of its meeting, Where there iss the unoccuupied Directoor(s) caused by any reassons other thhan from thee duration expired, thee Board of Directors shalll appoint thee person(s), who w qualifieed, and not pprohibited byy laws, to be the replaced Directtor(s) in the next Boardd of Directorrs’ meeting. In case of the duratioon of the replaced Dirrector(s) is leess than 2 months m left, thhe replacingg Directors(s) shall be on that positionn as long as the left duration d of thhe replaced Director(s). W Where the nuumber of thee Board of Directors D is not enough of o the comppletion of its meeting, the rests off the Board of o Directors shall s manage, on behalff of the Board of Directoors, merely foor setting up the Sharreholder’s meeeting for eleection of thee entire unocccupied Direcctor(s).  

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Global Connections Public Company Limited


The rules of Nomination of Independent Directors T h e p r o c e e d i n g o f f i n d i n g t h e i n d e p e n d e n t D ir e c t o r s Firstly, the Nomination and Remuneration Committee shall consider thee persons whho have thee qualificaations as deffined by the regulation of o SEC, and intently support the Com mpany’s businesses withh their apppropriate pootentials. Theen, the Sharreholder’s Meeting shall consider foor approval on o the finall step. In case of anny vacancy occurs in inndependent directors otther than byy rotation, thhe Board off Directorss shall elects a person whho has the qualifications q s to be indeppendent directors as replacement forr the rem maining term m of the inndependent directors whom w they replace andd then infoorm in nextt sharehollder meeting. Q u a l i f i ca ti o n o f I n de p e n de n t Di r e cto r s 1. Holding shares in tootal not morre than zeroo point five percent of ttotal shares with votingg rights off the Compaany, its Parennt Company, its Subsidiarry, its Affiliate or other juuristic personn which may m have Conflicts C of Interest provvided that thhe share heeld by relateed person off indepenndent directoors shall be innclusive; 2. Not being a directoor having paarticipation inn the managgement, an employee, staff, s advisorr who recceives a reguular salary, or o Controllingg Person of thhe Companyy, its Parent Company, C itss Subsidiaary, a subsiddiary in the same level, its Affiliate or other jurristic person which mayy have Coonflicts of Innterest, exceppt for havingg passed from such the pposition for not n less thann two yeaars before apppointment; 3. Not beiing a relatedd person byy blood or reegistration under u laws, such as father, mother,, spouse, sibling or chhildren including spouses of childrenn of Executives, Major Shareholders, S , Controlling Person, or o such otheer person whho will be nominated too take up thee position off Executives or Contrrolling Personn of the Com mpany or its Subsidiary; S  

   

 

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4. Having no business relationship with w the Com mpany, its Paarent Compaany, its Subssidiary, its Affiliate or other juristicc person whhich may havve Conflicts of Interest iin the manner which may interffere his or her use off independeent judgmennt as well as not beinng Major Shareholdeer, a directorr who is nott an indepenndent directtor, or an Ex xecutive of a person who have business relationship with w the Com mpany, its Paarent Compaany, its Subssidiary, its Affiliate or other juristiic person which w may have Conflictts of Interest, except foor having passed from m such the position p for not n less than two years before b appoinntment; 5. Not being an auditor of the Company, its Paarent Compaany, its Subssidiary, its Afffiliate or other juristic person which mayy have Connflicts of Intterest, and not being a major shareholdeer, a non-inddependent diirector, an executive e or a managingg partner of an audit firm for whhich the audditors of the Company, itts Parent Company, its SSubsidiary, itss Affiliate or other juuristic personn which maay have Coonflicts of Innterest workk; except foor having passed from m such the position p for not n less than two years before b appoinntment; 6. Not being a professionnal service provider, p including a legaal consultant or financiaal advisor who receivves wages of o more thann THB two million m per yeear from the Company, its i Parent Company, its Subsidiarry, its Affiliatte or other juristic j persoon which maay have Coonflicts of Interest. In case the prrofessional seervice providder is a juristtic person, a major shareeholder, a non-indepeendent direcctor, an ex xecutive andd a managing partner of the proofessional service proovider shall be b inclusive, except for having h passeed from suchh the positioon for not less than tw wo years beffore appointment; 7. Not being a director appointed a ass a represenntative of thhe Company’s Board of Directors, r to thhe Company’’s Major Shaareholder; Major Sharreholders or shareholderss who are related and 8. Not havingg other chaaracteristics which resuult in not capable c to pprovide indeependent opinion witth regard to the Companny’s businessees.  

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Global Connections Public Company Limited


R e m u n e r a ti o n Monetary Remuneratioon n (1) Remunneration for the Board of o Directors from fiscal year ended December 31, 3 2011 andd Decem mber 31, 2012, the numbber of meeting and the amount of annual grattuity for thee Board of Directors as the follow wings : M e e ti n g

Name

Possition

Attenddance/

Attendance/

Numbber of

Number N of

Meetiing for

Meeting M for

Board of

Audit

Directors

Committee C

2011

2012

20011

2012

1

Mr. Virahh Mavichak**

Chhairman of thhe Board

5/5

5/5

2

Dr. Pisit Leeahtam*

Chhairman of Audit A Committtee

3/5

3/5

2//4

3/5

3

Assoc. Prrof. Chawaleee

Auudit Committee

5/5

5/5

4//4

5/5

4 Mr. Suchhart Suphayaak*

Auudit Committee

5/5

5/5

4//4

5/5

5

Mr. Somcchai Kulimakkin

Vice Chairmann

5/5

5/5

6

Mr. Sumrruay Tichachol

Director

5/5

5/5

7

Mr. Bhiyaa Jriyasetapoong

Director

5/5

4/5

8

Mr. Siri Thirawattana T awong

Director

5/5

5/5

Director

5/5

5/5

Pongpatirochna*

9 Mr. Aikacchai Sirijuntanan Remark:* Thee independent director

   

 

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Attendance/ Numbeer of Meeting for f the N Name

Poosition

Nominatioon and Remunerration Committee

1

Mr. Suchartt Suphayak**

2011

2012

2/2

1/1

Chairm man of the Noomination annd Remunneration Com mmittee

2

Mr. Siri Thirrawattanaw wong Nominaation and Reemuneration Committee

2/2

1/1

3

Mr. Bhiya Jriyasetapong J g

2/2

1/1

Nominaation and Reemuneration Committee

Reemark:* The Inddependent Direcctor 

R e m u n e r a ti o n M e e ti n g F e e N Name

Position

20012

1

Mr. Virah Mavichak* M

Chairrman of the Board B

250,0000

2550,000

2

Dr. Pisit Leeeahtam*

Chairrman of Audiit Committeee

100,0000

1220,000

Assoc. Prof.. Chawalee

Auditt Committee

135,0000

1550,000

3

Pongpatirochna*

4

Mr. Suchartt Suphayak**

Auditt Committee

165,0000

1665,000

5

Mr. Somchaai Kulimakin

Vice Chairman

100,0000

1000,000

6

Mr. Sumruay Tichacholl

Directtor

75,0000

75,000 7

7

Mr. Bhiya Jriyasetapong J g

Directtor

95,0000

70,000 7

8

Mr. Siri Thirrawattanawong

Directtor

95,0000

85,000 8

9

Mr. Aikachaai Sirijuntanaan

Directtor

75,0000

75,000 7

1,090,0000

1,09 90,000

Total Reemark: * The inddependent Direector

62

20111

 

Global Connections Public Company Limited


Besides thhe meeting allowancess per eachh meeting as showedd in the taable above,, the Com mpany had grrant monthlyy compensattion to four inndependent directors as a total of TH HB 1,140,0000 per yearr since 2007 and allocatee bonus for nine n directorrs as a total of THB 1,7700,000 and TH HB 1,552,0000 in 2011 and 2012, respectively. r Anyway all remunerattions are appproved by shareholder meeting inn amount which not exceed e THB 4,000,000. 4 (2) Remuneration for Ex xecutive Direectors and Management M Committee total of seven was THBB 28.77 miillion in form of salary annd bonus for the fiscal yeear ended Deecember 31, 2012. Othe r f o r m s o f r e m u n e r a ti o n The Compaany has estaablished provvident fund since 2000,, the Compaany’s contribbution to thee providennt fund for the Managem ment Executtives (The Management committee) totaled THB 3.27 millionn in 2011 and a THB 3.337 million in 2012. The Company allso provided automobile for the 7 Management M t memberss.

   

 

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11  The Principles of Corporate Governance Thhe Board of Directors em mphasize the importance of Corporate Governancce (CG) whiich it is a practice to structure thhe leadership in line with w transparrency, respoonsibility, annd generate business competitiveeness for susstaining the capital investment of shareholderss and enhannce the shaare value back to thee long term shareholders s s in accordannce with thee ethic, and responsible to both stakkeholders and societyy as a whole. In order to buuild the busiiness growthh continuoussly and to create c the trrust to invesstors and stakeholderss, the Boardd of Directoors had assiigned manaagement to regulate thhe companyy’s vision, mission, objjective of Corporate C Goovernance, code of connduct, employee manuaal, business strategic direction, buusiness plan and budgett by appointing management team to t propose aall issues to the Board of Directors for considerration to exppress and debbate prior to mutual agreeement and approval. Good corporate governanncce policy in the year 2012 Thhe Companyy duly compplied with the principlees of good corporate governance for listed companies 2006. In 20012, the company was evaluated e Coorporate Govvernance by the Thai Institute of Directors Association (IO OD) which coorporate-govvernance scoores rated “V Very good” (4 4 STAR) bennchmark. In 2012, the Coompany has continuously observed the t good corrporate goveernance policcy. ‰

Rights of ssh hareholders : The Company allowedd minor shareeholders to ppropose agenndas and name of diirectors for thhe Annual General G Meeting of Shareeholders in advance during on 27 September 2012 to 28 Decembber 2012. The T Companny establishhed the traansparent proceduress and criteriaa and publiccized them on the company’s website and nottified the shareholdeers through the Stock Ex xchange of Thailand T whhich shareholders able too propose more than 3 months.

‰

Equitable treatment of shareholders : The Comppany organizzed the sharreholders’ meeeting on Thursday 3 April 2012 at a meeting room r of the Global Connnections Pubblic Companyy Limited. The compaany provideed a van too facilitate shareholderss to join AGM from Thhe Stock Exchange of Thailand.

 

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The com mpany also made availaable the letteers of invitattion as well as the agennda items off the meeeting on thhe companyy’s website to enable the sharehoolders to sttudy all thee information for decisions at leaast 30 days. The documeent materialss included the directors’’ opinionss for each agenda item m and prox xy authorization letter, iincluding thhe details off documeent required for authorizaation to facilitate the shaareholders For thee shareholdeers who couuld not atteend the meeeting, the company reecorded thee sharehoolders’ meeting to produuced VCD foor shareholdeers’ request and releaseed it on thee companny’s website to inform them t of thee meeting inn addition frrom the minnutes of thee meetingg available to t the shareeholders throough the Stoock Exchangge of Thailaand and thee companny’s website.. ‰

Roles of Stakeholders : The company c revviewed and rectified itss code of conduct c andd posted on companny’s website. The code of conductt was printeed and delivvered to alll employeees for com mpliance. Mooreover, thee company has set thhe channels to receivee complaiints on CG etthical conduuct. There waas no petition in 2012.

‰

Disclosure and Transparency : The comppany informss performancce of the company c too Analystss and invesstors in Oppportunity day of the Sttock Exchange of Thaailand everyy quarter.. The company disclosees its inform mation, finanncial statements and otther noticess throughh the Stock Exchange of o Thailand or o the comppany’s website. Investorss can reachh companny’s Investor Relations Deepartment att telephone or o e-mail.

‰

o directors rresolved to upgrade u thee Responsibilities of the Board of Directors : The Board of good coorporate govvernance staandard in accordance with w the Goodd Corporate Governancee Standarrd of the listeed companiees in 2006. In 2012, The Company orrganized thee meeting off Board of o Directors 5 times. Direectors alwayys attend moore than 80 percent forr meeting off Board of o Directors. The T company also organnized meetinng between N Non-Executtive Directorss (NED) to t discuss interested issuues without managemennt in attendaance. The NED N meetingg was schhedule held before b the Board B of Direcctors meetingg regularly.

 

   

 

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The Compaany is also considering for proporttion of indeependent dirrector more than 50 percent with the Good Corporate Governance G Policy. P Thhe Board off directors has continuued to strenngthen its commitment c t in good corporate c governancee principles for the sakee of the shaareholders annd stakeholdders with ann aim to devvelop the standard too internationnally-accepteed levels acccording to the guidelinne and direcction relatedd to The Stock Exchange of Thaailand (SET) and Securitiees and Exchhange Comm mission as thee following,

S ect i on 1 R i g ht s a n d E q u i t a b l e T r ea t m en t of S ha r ehol d er s Reealize the im mportance of shareholderrs’ equitable rights as follow : ‰

S ha r e ho l de r s s ha l l o b ta i n r e l e va n t m a te r i a l o f co m p a n y i n f o r m a ti o n o n a ti m e l y , s u f f i c i e n t a n d a p p r o p r i a t e f o r d e c i s i o n m a k i n g. The compaany has policcy to send thhe invitationn letter together with thee relevant doocuments and information on eacch agenda ittem to the shhareholders not less thann 14 days prior to the meeting annd will recorrd the minuttes of the meeting m correectly for shaareholders innspection, the compaany realizess the imporrtance of shhareholders’ right in acccess to coompany’s informationn. The comppany will addd details of issues i for coonsideration, reasons andd impacts of each aggenda.

‰

Participate and vote in shareholdeerrs’ meetings All sharehoolders possesss equal righhts to expreess their opinnion and/orr concern too acquire explanationns and ask additional a quuestion in asssociation with the operattion of business.

‰

R i g ht o f e q u i ta b l e T r e a tm e n t Besides abbove-mentionned , All shareholders possess p equaal basic righhts such as rights to receive shaare certificattes and rightts to transferr shares, righhts to elect aand remove directors, rights to appprove the appointment a of auditors and a rights to share in proofit of the coompany.

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Global Connections Public Company Limited


‰

S ha r e ho l de r s M e e ti n g Sharehoolders shouldd receive leetter of invittation to thhe meeting and the letter containss information relatingg to the locaation, date, time t and aggenda. Shareeholders mayy request too directorss to add addditional agennda of meetiing and mayy pose questtions in advaance prior too meetingg date. This can be seenn from the opportunity o for shareholders to proppose agendaa for the meeting andd to proposee nominee foor the periodd of three moonths beforee the end off each fisscal year witth the proportion of sharees held one percent onlyy. Besides,, The Chairm man of the Board of Directors, D Executive Direectors, Audit Committee,, Auditor and legal addviser had paarticipate in the sharehoolders’ meetinngs to answeer questions.. The minnutes of Shaareholders Meeting M will be b presentedd in the nex xt Shareholdders Meetingg for acknnowledgemeent. After thhe minute haas been approved by thee meeting, The T Companny shall keepp it in a safee place foor verification by concerned party.

S ect i on 2 R i g ht s of S t a k ehol d er s The compaany believess in good relationship annd well coopperation betw ween the Coompany andd the stakkeholders willl enable thee company to bring susstainable groowth. Hencee the Board of Directorss assigns the code off conduct that emphassizes the importance off stakeholders’ rights. Thhe Board off directorss announces the code off conduct to the directorrs, executivees and all em mployees as guideline g forr regular practice. p ‰

P r i n ci p l e s a n d co r e V a l u e s These thhirteen princciples have been b approvved by the Board of Direcctors. It is ex xpected thatt all direcctors and each e employyee follow these principles in all their activities for thee companny. 1. Honeesty 2. Prom mise-keepingg and Trust Worthiness W 3. Keepp Confidentiaal Business Innformation

   

 

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4. Professioonalism 5. Integrityy 6. Leadership 7. Compliaance to law & Regulationns 8. Loyalty 9. Fairnesss 10. Empathy 11. Respectt to others 12. Commitment to Exccellence 13. Reputattion and Honnor ‰

T r e a tm e n t o f s ta k e ho l de r 1. Policies and practicees toward shhareholders 2. Policies and practicees toward staffs 3. Policies and practicees toward cuustomers 4. Policies and practicees toward traading partneers and/or crreditors  5. Policies and practicees toward coompetitors 6. Responssibility to thee communityy and Societyy 7. Environment, Healthh and Safetyy in work plaace

‰

C o n f l i ct o f i n te r e s t On the subbject of confflict of intereest, all staffs have to com mply with thee policy to avoid a any activity, invvestment or any form off benefit, thaat result in loosses of inteegrity or repuutation of the company and also of staffs.

‰

C o m p a n y ’ s r i g ht o f o w n e r s hi p o f I n f o r m a ti o n All of us sttrictly complly with policcy, rules andd regulationss including aany guidancce by the company to t save its information.

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T h e g a t h e r i n g o f i n f o r m a t i o n r e l e v a n t t o t h e c o m p e t i t o r s , i n c l u d i n g p r od u c t i v e a n d technicca a l i n f o r m a ti o n mply the poolicies which concern about findinng the infoormation of competitors,, We com includinng productivee and technnical informaation. We will not perform m any proceedure that iss prohibiteed by law (Theft, ( Bribess) or not authorized by code of connduct in ordder to obtainn the com mpetitor’s infoormation

‰

P o l i ti ca l A cti vi ty a n d P a r ti ci p a ti o n The bassic policy off the Compaany specify that t the com mpany will nnot contributte money orr any ressource of the t Companny for enccouraging political p actioon to polittical parties,, candidaates except if it is allow wed by thee law and supports s dem mocracy. Thhe Companyy compliees with relateed laws and regulation to t ensure thaat the right of stakeholdders are welll taken care of.

‰

A n ti - B r i b e r y In geneeral, do not offer o anythinng to a government officcial—directly oor indirectly——in return forr favorabble treatmennt. You must obtain priior approval from authoorized beforre providingg anything of value to t a governnment officiaal. Ensure that any suchh payments are properlyy recorded in the apppropriate Com mpany accouunt Bribery of governmeent officials is legislationn criminalizinng. The sancctions for vioolating thesee laws caan be seveere, includinng significannt individuaal and corpporate fines,, and evenn imprisonnment. So brribes are prohhibited A bribe is giving or offering to give g anything of value too a governm ment official to influencee a discreetionary decision. Exampples of bribees include paayment to a governmennt official too encouraage a decisioon to award or continuee business reelations, to innfluence the outcome off a goverrnment auditt or inspectioon, or to influuence tax orr other legislaation. Other payments p too governm ment officials also may constitute c bribes in some jurisdictionss.

   

 

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S e c t i o n 3 I n f o r m a t i o n D i s c l o s u r e a n d T r a n sp a r e n c y Thhe Board of Directors vallues the impportance of disclosure d of accurate, adequate, reggular and timely inforrmation of the t Companny. Thereforee the Comppany has thhe policies tto organize financial statements which displaay the Comppany’s finanncial status and a performaance, sharehholders struccture and the Corporaate Governaance Policy that is trannsparent andd auditable. Furthermoree, the Comppany has established an Investoor Relation Division D to disseminate informationn to sharehoolders and securities analysts to understand the t Company on equal basis. b Thhe Board of Directors is responsible for financiaal reports of the Companny and the financial information in its Annual Report. The financcial report iss prepared in accordannce with GenerallyAccepted Accounting A P Principles (GAAP in Thailland by chooosing an apppropriate poolicy and praactice on regular bassis). In addittion, all releevant inform mation will be b adequateely disclosedd in the remarks to financial staatements. Thhe Companyy has appoinnted the auddit committeee to verify fiinancial repoort and interrnal audit system to ensure efficciency and transparenccy of the operation, inccluding folloowing the Company C policies andd related law ws, considerinng nominatioon and remunneration of auditor. a

S ect i on 4 R es pon s i b i l i t i es of t he B oa r d ‰

B o a r d o f Di r e cto r s co m p o s i ti o n mp The Board of Directors shall consistt 9 directors, a chairmann, a vice chairman and directors, of which 4 of 9 are inndependent directors as 44% of thee entire Boarrd of Directoors which comply byy law and reegulation. No less than one-third of directors sshall be Indeependent directors who w have noo business reelationship or o any otherr relationshipp with the Company C which mayy affect the director’s inddependent exercise of diiscretion

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Du r a ti o n o f the te r m o f s e r vi ce o f di r e cto r The Boaard of Directoors has set the duration of the term of service oof director in accordancee with thee Articles off Association of the Com mpany. In evvery AGM, onne-third of the t board off directorss, or if their number is noot a multiplee of three, thhen the num mber nearest to one-thirdd will havve to retire from f the posst. The Comppany’s directtors, who muust be retiredd in the firstt year annd in the seccond year affter the Company registraation, shall bbe selected by b means off lot draw wing whereaas, in the subbsequent yeaars, the direcctor who hass been in thee position forr the longgest period will w be retiredd. The retiring director may be reeleccted again.

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P o s i t i o n H o l d i n g i n o t h e r C o m p a n i e s b y P r es i d e n t In orderr to allow thhe President to devote adequate a tim me for his/hher responsibbilities in thee Companny and increease the management efficiency. e Thhe Board of Directors haas the policyy and determine how w the Presiddent who will w be engaaged in thee any positioon of otherr compannies. In accoordance withh the Good Corporate C Goovernance, tthe Presidennt is requiredd to reporrt the information of com mpany namee, type of business and pposition to thhe Executivee Committtee to considder approvinng. In additionn to the inteerested reportt.

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S e p a r a ti o n o f p o s i ti o n s The chaairman of thhe Board of Directors is an independdent director who does not have a manageement positioon under thee principle of o segregatioon of roles inn policy form mulation andd oversighht from thoose in operaations manaagement. Beeside, the CCompany haas the auditt committtee that connsist 3 independent direcctors. The fuunction of thhe audit com mmittee is too balancee and review w operation management m t.

   

 

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S u b - co m m i tte e s The sub-coommittees comprise of 2 committeees, the Auditt Committee and the Noomination and Remunneration Com mmittee. Thee Audit Comm mittee consissts of 3 independent direectors for Corporate Governancee. The authhority of this Audit Com mmittee is ddescribed under the managemeent structure section. Thee Audit Comm mittee holds meetings reggularly oncee in every 3 months and a report directly to thee Board of Dirrectors. The Nominnation and Reemunerationn Committee consists of 3 members. TThe authoritiies of the Nominationn and Remuneration Com mmittee are described under u the management structure section. For the Corporate Goovernance Committee C and a the Rissk Managem ment Committtee, the company has h not estaablished policy becausee the establiishment musst take into account several facctors so they are concernned in monthhly executivee meeting.

‰

B o a r d o f Di r e cto r s ’ m e e ti n g The Compaany’s policy arrange at least 4 timees per year for a Boardd of Director meeting which wass hold 5 tim mes in 2012 and Executive committee meeting at least oncce every month for considering short term and a long term m strategy. There T shall bbe directors attending a mber of directtors to compplete the quoorum. The the meeting not less thhan half of thhe total num secretary to t the Boardd of Director will inform and send thhe notice off the meetinng to the Board of Directors. D Thee secretary to the Board of Directorss will inform and send thhe notice of the meeeting which contains deetails of datee, time and place p togethher with ageenda and related doccuments to the t Board off Directors 7 days prior too the meetinng for an apppropriate consideration. The member of thee Board is able a to raise more agenda and pressent idea openly andd directly. Thhe Company’’s secretary will w record annd take minuutes of the meeting. m The Board of Directors appoints a company’s c seecretary to support s the ffunction of the t Board a invvitation for m meeting andd arrange of Directorss. The secreetary’s duty is prepare agenda, meeting, inncluding advvising about law, rule andd the regulation for the meeting andd prepare minutes off the meetinng for the chairman’s c approval a prioor to submittting for the meeting acknowleddgement.

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R e p o r t o f the B o a r d o f Di r e cto r s The Boaard of Directtors are requuired by the Securities and a Exchangge Commissioon, to reportt their coompany’s shaare selling or buying inccluding their spouse andd immature children. c Thee Companny Secretaryy shall conseequently keeep such repports for refeerences. Morreover, theyy need too disclose infformation reggarding theirr own interessts and any interests of their relatedd persons to the Com mpany’s Seccretary. This informationn will enablee the compaany to dulyy prepare its disclosurre report on related partties’ transacttions, which could causee conflict off interest.. In quarrterly the Booard of Direcctors’ meetinng, the Com mpany Secreetary alwayss report anyy changee in their GC securities hoolding of all directors d andd Executives.

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T h e r e m u n e r a t i o n o f d i r e c t o r s a n d t h e m a na g e m e n t ƒ Direcctors’ remunneration: The Companyy has speciified directoors’ and maanagement’ss remuuneration cleearly and with w transpaarency. The remuneratioon of directors will bee compparable withh similar inddustry and will w be appeealing enouggh to attractt and retainn qualified directorrs. Moreover the directorr who is assigned more responsibilityy will obtainn moree appropriatee remuneratioon accordinggly. ƒ The managemennts’ remuneeration: The managemennts’ remuneeration is baased on thee C Board of Directors D in conjunctionn with thee policcy that set by The Company’s perfoormance of The T Companny and each individual director. The Board of Direectors assignns the Nominnation and Remuneration R n Committeee to considerr comppensation off the directoor. The direcctors’ remunneration shouuld be compparable withh similaar industry and a take intoo account thee performance of the Coompany as well. w

   

 

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S u cce s s i o n p o l i cy The Board of Directors assigns thee Nominationn and Remunneration Com mmittee to prepare p a succession plan for thee position off CEO/Presideent to ensurre that the CCompany is managed m at all the time by CEEO with apppropriate coompetency and a skills. The Company is also assigned Human H Resoource Deparrtment provvide a succession plan for executive and managemeent level position in orderr to prepare in case theyy can not peerform.

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O r i e n t a t i o n f o r N e w D i r e c t o r s a n d E n h a n c e m en t o f B u s i n e s s K n o w l e d g e The Board of Directors assigns the secretary s of the Board of o Directors too prepare infformation for all new w directors so s as to infoorm them off the busineess information of the Company, C a director’ss roles, dutiess and responnsibilities andd compliancce with the CCompany’s Corporate C Governancce Policy annd practices. Simultaneoously encourrage all directors to havve better knowledgee and underrstanding of company’s business to enhance their role as efficient directors. Moreover, M thee company has h policy to improve knoowledge to ddirectors regularly.

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A s s e s s m e n t o f P e r f o r m a n c e o f t h e B o a r d o f D ir e c t o r s a n d P r e s i d e n t To ensure that t operatioon is in line with w the set goals, the Booard of Direcctors requiress that the managemeent reports the results of actual opeeration in coomparison w with set targgets on a regular bassis. In the evvent that opeeration fails to perform as a planned, tthe Board of Directors shall requeest the manaagement to propose plans to resolvee the situation and shalll provide corrective strategic direections. The Boardd of Directoors has policy to assesss the annual perform mance of thhe Board themselvess. The criteriaa for such evaluation will w be relatedd to the perfformance annd annual business plan in short and a long term m.

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For the annnual evaluaation of the President which w was prrimary considdered by the Executivee Committee. The assesssment is not only comprrises the potential perforrmance of thhe presidentt mpetency annd also the comparing c off company performance p e that relate with the Coompany com with the taarget and thhe Company annual business plan. The T assessmeent result waas presentedd to the Nom mination and Remuneration Committeee to determ mine his remuuneration and incentivess as appropriiate.

S ect i on 5 C on f l i ct of i n t er es t In order too protect anny occurrencce of conflicct of interessts, the Com mpany has policy p whichh prohibitss the directoors, executivves and stafffs to take advantages of their roles and theeir duties forr benefits.. In the evvent of the transactions t with conflicct of interesst may possiibly occur, the Board off Directorss will carefully take intoo consideration in the innterest of the company. Moreover a Policy andd Procedure on the approval a of related traansactions suuch as purcchasing or selling betw ween juristicc companyy and perssons involveed will be conducted under the rules and cconditions which w weree conducted with the same staandard as that t of an external veendor. In ccase of the connectedd transactiions occurreed are not normal n case, the related departmentt of the Com mpany will gather g thesee informattion to propoose to the Auudit Committeee for considderation and giving opiniion that theyy have beenn conducted according to the Com mpany’s normal practicee with the faair price befoore they willl be perusedd B of Direectors once again. a In adddition, the Company C shaall be obligedd to comply strictly withh by the Board securities trading law w and relatedd rules and regulations r governing g thee Securities and Exchannge. In any connnected trannsaction witth concerneed persons may m raise a conflict of interest. Too t y and equittable treatment of shareholders, the vote of iinterest perssons will bee ensure transparency excludedd.

   

 

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Section 6 Internal Control and Internal Audit systems   ‰

Internal Control and Internal Audit systems : The Boaard of Direcctors and The Audit Committeess have revieewed the internal controol systems of o the Company with ex xecutives regularly and a gave itss opinion that the Company has an adequate appropriatee internal control sysstems and sufficient too protect itss assets froom serious m misconduct or other irregularitiees in managgement of thhe Companyy such as setting authoorization andd writing operational regulations as well as recognition r of o the importtance of inteernal control systems. An indepenndent Internal Audit Officce is establisshed to ensuure that all ooperation units of the company are a in comppliance with operating procedures p a to coorddinate with external and auditor. Thee Internal Auudit Office reeports directly to the Auddit Committeee. Furthermorre, the Comppany has sysstem to keepp important documents d ffor verificatioon of the auditor andd legislative authority.

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Utilization of Inside Information : The Companny has a poolicy governing utilizatioon of the Company’ss inside information by employee, directors d and executivees for personal gain, disclosure iti to other persons p incluuding selling or buying securities. s Ass well as all directors and execuutives must comply c stricttly with secuurities trading law of thee Office of Securities S and Exchaange Commisssion regardiing disclosurre their trading of securiities of the Company C as follows The Company’s policyy is to uphold ethics and a conducct its busineess with inttegrity to customers, suppliers annd the shareeholders of thhe Companyy within its rregulations and a Code of Conductt. In case off inside inforrmation of thhe Companyy is utilized bby the execcutives or employees for personaal gain or reevelation coonfidential innformation too outsiders including making traansactions thhat may pose potential conflict c of innterest, thesse actions arre serious misconductt and disciplinary punishment may be b taken.

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a) The company will w notify thhe board of directors annd executivves who perceive insidee inforrmation that may affect the price of securities. too refrain from m trading their shares off the company one o week before b and 24 hours after a financiaal statemennt has beenn reveealed to the public p and prohibit p discloosure of insidde informatioon to others. b) The company haas instructedd its directorss and execuutives to repport any chaange in theirr mpany in accordance with w sectionn 59 and provisions onn holding of secuurities of com penaalties sectionn 275 stipullated of Seccurities and Exchange Act B.E 2535 and thee reguulations of thhe SET includding to their spouses andd children leess than 21 years y of age.. The directors andd Executivess must summ mit one copy of the secuurities disclosuure report too the Company C annd the Securiities and Excchange Com mmission on the same dayy.

Section 7 Riissk Management Thhe companyy gives impportance to risk managgement systtem by asseessing and setting thee companyy’s risk consstantly relatiing to businness operatioon risk and financial riskk of the company. Thee companyy has initiateed managem ment meetingg consist of managemennt team andd all support functions inn every month m to seettle strateggies and poolicies to reduce the company’s c rrisk and asssign relatedd departments to monitor risk and report to maanagement team. The Executive E Coommittee hass taken caree of the risks of the Company thherefore, thee Executive Committee retard to seet the Risk Management M t Committeee which will impact to higher expeense.

   

 

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12  Sustainability Report E x ecu ti v e S ta tem en t Thhroughout 20012, Global Connections C Pcl. keeps concentratin c g on the ex xecution of Corporate C Social Responsibility straategy to all shareholders s , i.e. customeers, employeees, communnity, and sharreholders, b groowth. We doo encourage employee too engage inn working for sustainaable growth along with business processes for f efficiencyy and effecctiveness whhich lead to customer saatisfaction. W We realize values v of integrity, traansparency, and accounntability to the t shareholders by discclosing all nnecessary infformation and listeninng all feedbaack as two-w way commuunication. All resources are a committeed to fully uttilized for the best company beneefits such as energy saving and environmental conservation. Reegarding employee deveelopment, inddividual trainning and devvelopment prrograms are identified and conducted in ordder to improove their caapability andd competennce in servinng customeer centric strategy. Byy strong and committed intention in CSR activitiees, we have been awardded by Deparrtment of Labor Proteection and Welfare W in 20012. It is our great pride and will mootivate us to drive more activities for further success s of coompany andd society.

(M Mr. Veera Kw wanloetchit) Presiddent

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G u i deli nes f or S u s t ai nab i li t y R ep or t This Sustainnability Deveelopment Report is includded with thee Annual Repport thereforee the overalll context for businesss operation understandiing will be omitted beccause the aannual reporrt is alreadyy includedd. This report will mentionn only the reesults of operrations of thee society, ennvironment, and a safety. This Sustainability Devvelopment Reeport is intended to com mmunicate tthe policy, management m t strategy and the economic, social and environmental performance p during the pperiod 1 Januuary 2012 too 31 December 2012 by b the reporrting applicaation to repoort on the suustainability of the Global Reportingg Initiativee (GRI) G3.1 as the main indicator of the corpporation to assess a the integrity of the contentt reported level C is thhe content of o the report contains of part I: Strateegy and oveerall companny (Strategicc & Profilee) and part III: Performance (Perform mance indicaators) only without w covers part II. Management M t Approacch about devvelop a plan of managem ment for futuure operationns. S co p e o f r e p o r t The contennts of this reeport are start with the survey s of cuustomer satisffaction befoore and afterr sales serrvices and im mage of thee Company for f the year 2012. The customer c com me first priority. Becausee the customer who affected a bothh directly and indirectly from f the Com mpany operaation. The cuustomer is inn various industries reelated to thee use of poolymers and additives, and a "employyees" are alsso importantt stakeholders becausee "employeee" as a major driving forcce for the Company bussiness by delivers qualityy productss and servicces with soccial responsiibility. As a result, otheer stakeholdeers such as public andd communnity partners,, shareholderrs can take benefit from m our employyees who arre responsible and smartt with a good g conscieence. For more innformation please contacct Investor Relations R Deppartment

GLOBAL CO ONNECTIONS PCL. 13/1 Moo 2 Kingkaew RD. R Rachatevva Bangplee Samuthpraka S arn 10540 Thhailand Tel :+66(2))-763-7999 extension 201-204 Fax :+66(22)-763-7949 9 website : http://www h .gc.co.th

   

 

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S oci al p er f or mance Global Connecctions PCL. recognizes that t social responsibility r y is vital drivve for the Company. C g The company tryy to interferee a sense off social respoonsibility in eevery work processes p Sustained growth. for deliverinng quality products p in order to serrve need annd create sttakeholder ssatisfaction, thus the Company seet priority of CSR in proccess for workking process developmennt. Fair emplooyment and have no violation off human righhts, employeees training, customer seervice develoopment and activities too support employee participation p and developpment througgh the year 2012. Thhe Companyy continued doing CSR Activities A by support pubblic organizaations such as public schools andd governmennt unit in term of scholarrships to schhools in neighhboring com mmunities by the year 2012 with a list of schollarships is enncouraged. 1. Klong Bang g Ka E Schoool

ung School 2. WatTongku D Schoool (KheawUtiis) 3. Wat Nam Daeng ai School 4. SulaoBanra K Schooll 5. Wat King Kaew 6. WatBangplleeNai Schoool 7. KlongKanya School 8. Wat Pan Prrasit Tharam School

Byy such activities purposee to support the creationn of a public society to hhave a goodd result in the future social s develoopment.  Indicator of thhe social diviision Global Connecctions PCL. foocus on hum man resourcees, who are key k business driver. The Company has social perrformance inndicators by the followingg factors. E m p l o y m e n t : b y g e n de r

80

All empployee

Male

Femalee

1155

63

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Global Connections Public Company Limited


E m p l o y m e n t : b y e du ca ti o n All Employee

Below w Bachelor Degree D

Bachelor Degreee

Master DDegree or Higgher

115

47

55

13

Employmennt : by age All Employee

0-3 years

3-6 years

6-9yearss

Moree than 9yearrs

115

7 73

12

18

12

Percentagee of salary expenses e for male versuss female empployees Sex

% Salary S Expennses

Male

55%

F Female

45%

Global Connnections PCLL. recognizees in fairness employmennt with regard their abilityy to perform m their jobbs. Which takke into accoount the prinnciples of equuality, fairneess the comm mitment to thhe companyy and their career pathh growth toggether with the t Company.

To strengthen the capacity and commitmeen nt of t h e s t af f T he de ve l o p m e n t o f the co m p a n y People aree the most im mportant company’s resources; theyy are criticall in driving the t businesss forward and maintaiin its leadersship in the buusiness and sustainable growth. g The company iss providing a softwaree developmeent with opeerations in the t field of human resoource develoopment in a systematicc way. This covers all employees in i the targett group. And provide adeequate fundinng for the deevelopment.. Last yeaar budget in 2012, we uttilize over TH HB 700,000 for f staff devvelopment traaining prograams, both inn houses and a public course, c incluuding more than t 50 couurses in ordeer to create solid foundaation for ourr staff devvelopment too be "the onne with profeessional, respponsible and good attitudde" who has knowledge,, skills, goood attitudess and behavviors consisteent with orgganizational culture in oorder to meeet customerr satisfacttion with thee company'ss employee developmennt program too support thheir work. Thhe companyy providess a compreheensive prograam to improvve by the poosition. Emplooyees can taake action im mmediately;

   

 

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including cuurricula for sales s skills, personality p d development t courses, professional and technicaal courses are offered. The compaany also enccourages em mployees to learn l in otheer ways or aactivities succh as the mall groups among a employees (Grouup Activity), which all leearning is Knowledge Sharing acttivities in sm also promoting the deevelopment of their carreer growthh (Career Maanagement) and led us u to the Learning Organization for f developm ment to contrribute professsion advancement. Number of employees recceeiving training 2012 Sex

Average of Training dayy

Male

4..93

Female

8..06

Reemark : If yoou compare the averagee number of training dayys between male employyees and female empployees will found f 3.13 shhows that thhe differencee is due mainnly male empployees suchh as truck drivers and warehouse clerks. The performancee is characteerized by thee delivery w was planned for each day (Day too Day Operations) are not able to atteend the scheeduled traininng run. How wever, the Suupervisors are encouraaged to join groups to ennhance the skills s neededd to perform the task. R e s p o n s i b l e f o r t h e i m p l e m e n t a t i o n o f b u s i n e s s pr o c e s s e s Cuurrently businness operatioon have to compete c witth the time and a information needed to make decisions, we w have a way w for custoomers to conntact the com mpany and request r a heearing on thee website of the company www..gc.co.this thhe contact center c for innformation off the compaany and chaannels for company sttakeholders inn all groups are fully included. 1. Customers can access the t company's products and servicess in the "Products and Seervices". 2. Investors  iss another grooup of comppanies busineess involvedd. We createe the menu. "Investor Relations" to provide all information need for investtors.

All investors annd funds

communicaation will bee efficiency exposure e ww ww.gc.co.th feedback vvia the contaact us 24 hours a dayy.

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T he cu s to m e r s a ti s f a cti o n s u r ve y The Evaluation of cuustomer satissfaction wass created too develop iin every woork process.. Assessmeent data is divided d into three t areas. 1. The dellivery: The surveys s show w customers opinion in the t following ;On time Delivery, D thee accuraccy of the prooduct shipped, documentts and the coourtesy of thhe delivery sttaff 2. Order: The T surveys show s custom mers opinion in the follow wing; the orddering speed,, the validityy of the orders o and thhe courtesy of o the staff. 3. Services sales: The surveys shoow customerrs opinion in the followinng; to be eaager to solvee the probblem, the prooduct instrucctions and reecommend, the wide range of produccts and overr all satisffaction with the companny the servicces and products. Customer satisfaction survey coverrs major custtomers to expplore sales aaccounted foor 66% of total sales. Survey resuult as follows; 1. Satisfacction rating for the shippping. Average score of o 82.08% tteach by thhe followingg factors.

   

 

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2. Satisfactionn rating for the t orders. Average scoree of 85.76 % each by the following factors. f

3. Satisfactionn rating for sales s servicess sold by facctor of 81.36% % average ggain score.

P e r f o r m a n ce o f o ccu p a ti o n a l he a l th a n d s a f e ty

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Global Connections Public Company Limited


Due to thee company concerned c foor the safetyy and healthh of employeees is all em mployees aree our mostt valuable reesource. Thee company has adoptedd the occupaational Health and Safeety policy ass part of business strategy to acchieve maximum efficieency and effectiveness should nott harmful too health, be b treated faairly and baseed on the work w of the employees haappiness by tthe policy is as follows. 1. Protect thee health andd safety of employees, e customers c whho come intto contact at a office andd People who may be afffected. To conduct c all activities a in a manner thhat is responnsible for thee environmennt. 2. Safety is thhe first respoonsibility of every e employyee in the peerformance. 3. Company will w contribuute to improvved workingg conditions and environnment for booth physicall security annd conducivee to good meental health in the workpplace 4. Company shall s promotte safety activities to bee conscious and particippation of alll employees,, such as mootivation, training, etc. 5. Supervisorss at all levvels to act as a good model for leadership training, cooaching andd motivating employees with w a safe 6. All employeees must conncern safetyy for their ow wn, colleaguue and the aassets of the company iss constantly working. 7. Employees shall maintaain a clean and a orderly work w area. Saafety and hyygiene of all employees. 8. Employees shall mainttain and to cooperate in projects relating r to ooccupational safety andd health of thhe companyy 9. Company shall s providee for the suurvey and monitoring m thhe implemenntation of the policy sett forth abovee by the perrson who ressponsible

   

 

Annual Report 2012

85


 

Y e a r P l a n o f S a f e ty 201 2 Responsibbilit

Quarter1

Subject

Quarter2

Quaarter3

Quarter4

Result

y Jan

Cheeck the safety

Feb

Mar

Apr

Logistic

of the warehouse..

Collect and

May

Jun

Jul

A Aug

Sep

OOct

Nov

Dec

Normal operationn

Logistic

sum mmarize the

Normal operationn

perccentage. Acccident period. Orgaanize meeting

Safety

Normal

of safety s Health

Committee

operationn

Administration

Normal

andd the envvironment com mmittee and to do reports. r Insppection of fire extiinguishers.

operationn

andd emergency signnals. Cheeck plumbing

Administration

andd electrical

Normal operationn

systtems. Anaalysis of the

Administration

worrk environmentt.

Normal operationn

(Souund, light, heatt, dustt). Annnual building

Administration

insppection.

86

 

Global Connections Public Company Limited

Normal operationn


Implementation summary of occupational health and safety Subjecct Safety of the operatioon.

Result No employee e recceived seriouus accidents of all sttaff working in the officee and wareehouse.

Lawfulnesss

No significant am mount of thee fine. And the t numbers of non--monetary peenalties are impoosed for violaations of heaalth and safeety lawss and regulattions.

Environmeen n ta l p e r f o r m a n ce . Due to thee business need n and deemand for a wide varieety of resourrces such as electricity,, water, fuel, f etc., too drive perfformance. All the resouurces are lim mited, the ccompany agreed to thee promotioon and awaareness of all a staff to use u existing resources as a necessaryy to achieve maximum m benefit. And not wassting resourcces unnecesssarily. Ways to use resources more effficiently as follows. To reduce fuel consumption. 1. Compannies provide monitoring the air presssure in tire for carrier oon a regular basis. Andd servicess include peersonal’s car of employeees. As if thee tire is too soft, will connsume moree fuel thaan tires with the standardd tire. 2. Changee car’s tires according a too standard. Check C wheeel alignment. Change thee engine oil,, Oil filter,, and Air filteer by the speecified periodd. 3. Plannedd route of deelivery for evvery shipmennt. To be efficient and ecconomical. 4. Control every car that comes into i the com mpany has to t stop the eengine whilee waiting orr packingg. 5. Arrangee training in the t drive saffety and envvironmentallyy friendly. 6. Promotee the use of car sharing or o car pool of o the employee.

   

 

Annual Report 2012

87


To reduce power consumption. 1. Design air conditioning c system by separate s areaas. So switchhes of lightinng control eqquipment to suit the area to be able a to close and open when w in use only. o 2. Turn off alll lighting durring a lunch time or wheen not in usee. 3. Open winddow or use tiile transparencies, so wee can utilize the nature light insteadd of using a light bulbb. 4. Sun protecction film andd insulation installation too reduce woork load of aiir conditioner. mps and acccessories whhich approveed standard. Such as fluuorescent 5. Use energyy saving lam lamps, insttead of connventional bulbs. Comppact fluoresscent bulbs (CFL) insteead. The automaticaally on-off byy the darkneess outside and the passing of a persson. 6. When dam maged poweer was founnd. The corrd or pin change to bbrown or blaack. The immediately replacemeent will applyy o prevent fire f due to a short circuitt. 7. Closed com mputer monittor during lunnch time andd use energyy saving com mputer type supplies. s 8. Create aw wareness of energy savving campaiign through various meeans such as a board informationn arrangement. Knowledge sharing by b training annd so on. The use of air conditioning and ventilation optimization. 1. Turn off airr-condition which w not inn use. And when w you turn it on againn, should be open for at least 15 minutes. m than onne hour andd before clossing time 2. Turn off aiir conditioninng when will not use more because it’s still have a cold until office o hours. 3. Open the window w to leets the windd flow whenn weather iss not too hott. Instead, too turn on air-conditioon. Will help reduce enerrgy consumpption and alsso get well vventilated. 4. Moving apppliances succh as electrric kettles, the t photocoopier to the appropriatee area to reduce thee power connsumption off the machinne and to prrotect the tooner dust in the room that will haarmful to woorker healthyy. 5. Examine any a material that may block b air coooling air throough evaporaator and condensing set. 6. Cleaning air filters reguularly.

88

 

Global Connections Public Company Limited


Use efficiency and energy-saving office equippm ment. 1. Shut doown the com mputer monitor when not n in use foor more thann 15 minutees or set thee screen saver. s 2. Select a computer system s to savve power coonsumption. 3. Revise document d on the screenn instead of editing the printed docuument. This reduces thee power consumption c n of paper prrinting, ink annd printerdetteriorate 4. Install network n prinnter to share facilities which w reducces both ennergy consuumption andd maintennance. 5. System Stand by - Safe S mode when w not in use copier for f longer thaan 15 minutees. To reduce water use. 1. Leak deetection of plumbing on a regular bassis. 2. Use watter save typee for Flush Tank T and Urinnal. 

3. Bringingg water from m natural ponnds for waterring plants. Waste minimization and water reuse. 1. Determinned using booth sides of paper p for intternal docum ment. 2. Informaation transmission. Implement the suubmission foor all informaation in elecctronic basee with all data that caan be read via v other media and no need n to printt out the doccument.

   

 

Annual Report 2012

89


 

A w a r d o f p r i de Thhe companyy contested the establisshment of good g industrrial relationss and labor welfare. Departmentt of Labor Protection annd Welfare for f the year 2012 and the Award foor excellencce at the national levvel.

90

 

Global Connections Public Company Limited


M a j o r e ve n ts i n 201 2 The company has paartnered witth ExxonMoobil Chemicaal in the product techhnology andd manufaccturing techhniques training for our customer c on Wednesday ,December 112th, 2012.

   

 

Annual Report 2012

91


C e r ti f i e d b y the thi r d p a r ty a g e n cy . Thhe Companyy has evaluaated the Corporate Goveernance (CG) for the yeear 2012 by the Third Party, Thai IOD

O Overview Average CG Scoree 88% 88%

9 90%

8 85%

86%

87% 87%

777% 77%

8 80%

7 70% Listted

SET1000 Index SETT50 Index

Comppany

GC 2011

22012

Year Y 2011

Year 2012

497 4 Companiess

513 Compaanies

CG Score S compare by b categoories 94%

100% %

88%

92%

87% 88%

84%

94% 72%

80% %

65%

63%

60% % 40% % 20% % 0% %

Listed Companny

92

SEET100 Index

 

Global Connections Public Company Limited

SET50 Inndex

GC


G R I C o n te n t I n de x STANDARD DISCLOSURES PART I : Profile Disclosures Proffile

Paage/ Description

Disclossure

Cross-reference

1. Strattegy and Anaalysis 1..1

S Statement froom the most senior decisiion-maker off the

78

o organization. 1.2

D Description off key impactts, risks, and opportunities o s.

277-33

2. Orgaanizational Profile 2.1

N Name of the organizationn.

5, 5 79

2..2

P Primary brandds, products, and/or servvices.

100-14

2..3

O Operational sttructure of thhe organizattion, includinng main

49

d divisions, operating companies, subsiddiaries, and jooint venturess. 2..4

Loocation of organization’ss headquarteers.

2..6

N Nature of ow wnership and legal form.

2..7

M Markets serveed (includingg geographicc breakdown, sectors

5, 5 79 34 100-12

seerved, and tyypes of customers/beneficiaries).

   

2..8

S Scale of the reporting r orgganization.

79

2.110

A Awards receivved in the reeporting periood.

90

 

Annual Report 2012

93


 

Profile

Page/ Desscription

Disclosuree

Cross-refeerence

3. Report Parameters 3.1

Repoorting period (e.g., fiscal//calendar yeear) for inforrmation

79

provvided. 3.2

Datee of most reccent previouss report (if anny).

N/A A

3.3

Repoorting cycle (annual, biennnial, etc.)

79

3.5

Conttact point for questions regarding thee report or itss contents.

79

3.6

Process for definning report coontent.

79

3.7

Bounndary of the report (e.g.,, countries, divisions, d subssidiaries,

79

leaseed facilities, joint j venturees, suppliers). See GRI Booundary Protoocol for furthher guidancee. 3.8

Statee any specific limitationss on the scoppe or boundaary of the

79

report (see comppleteness prinnciple for ex xplanation off scope). 3.9

Basiss for reportinng on joint veentures, subssidiaries, leassed

18-226

facilities, outsourrced operatioons, and otheer entities thhat can signiificantly affeect comparabbility from peeriod to periood and/or betw ween organizzations. 3.10

Explanation of thhe effect of any re-stateements of infformation

79

provvided in earlieer reports, annd the reasonns for such rer stateement (e.g.,m mergers/acquisitions, chaange of basee yearrs/periods, naature of busiiness, measurement methhods). 3.11

Significant changes from preevious reportting periods in i the

N/A A

scoppe, boundary, or measureement methoods applied inn the report. 3.12

Tablee identifyingg the locationn of the Stanndard Disclossures in the report.

94

 

Global Connections Public Company Limited

93-9 97


Proffile

Paage/ Description

Disclossure

Cross-rreference

4. Govvernance, Commitments, and a Engagement 4.1

G Governance s structure of the t organizaation, includinng committeees

37-63 3

under the higghest governnance body responsible r foor specific taasks, such ass setting strategyor organnizational ovversight. 4..2

Inndicate whether the Chaair of the higghest governance body iss

64-77 6

also an execuutive officer.. 4..3

F organizations that havve a unitaryy board structture, state thhe For

70

n number and gender g of meembers of thhe highest goovernance b body that aree independennt and/or 4..4

M Mechanisms f shareholdders and empployees to prrovide for

5, 79, 82

reecommendattions or direcction to the highest h goveernance body. 4..8

Innternally devveloped stateements of mission or valuues, codes off

4, 100, 67-68,

conduct, and principles reelevant to ecconomic, envvironmental,

833-89

and social peerformance and a the statuus of their implementationn. 4.12

E Externally developed ecoonomic, envirronmental, and a social

67-69, 80-84

charters, princciples, or othher initiativess to which thhe organization suubscribes or endorses. 4.114

Liist of stakeholder groupss engaged byy the organizzation.

67-69 6

4.115

B Basis for identification andd selection of o stakeholdeers with whoom

80-84

too engage. 4.116

A Approaches too stakeholdeer engagemeent, includingg frequency of

80-84

engagement by type andd by stakeholder group. 4.17

K topics annd concerns that have been raised thhrough Key

80-84

sttakeholder engagement, and how thhe organizatiion has reesponded to those key toopics and cooncerns, incluuding througgh its reporting.

   

 

Annual Report 2012

95


 

S T A N DA R D DI S C L OS U R E S P A R T I I I : P e r f o r m a n ce I n di ca to r s Profile

Page/ Desscription

Disclosuree

Cross-refeerence

Economic Economic performance EC 1

Direcct economic value generrated and disstributed, inccluding

107-140

revenues, operatting costs, em mployee com mpensation, donations d and other community investm ments, retainned earnings, and paym ments to cappital providerrs and governments. Indirect ecconomic imppacts EC8

Deveelopment andd impact of infrastructure investmennts and

80

serviices providedd primarily foor public bennefit throughh commercial, in-kkind, or pro bono b engageement. Environmeental Biodiversitty EN12

Desccription of siggnificant imppacts of activvities, produccts, and

85-887

serviices on biodiiversity in prootected areaas and areas of high biodiiversity valuee outside prootected areaas. EN13

Habitats protecteed or restoredd.

88-889

EN14

Initiaatives to mitigate environnmental impaacts of produucts and

87-889

serviices, and exttent of impact mitigationn. Social : Laabor Practicees and Decennt Work Employmeent EN26

Total workforce by employm ment type, em mployment contract, and region, brokeen down by gender.

96

 

Global Connections Public Company Limited

80-881


Proffile

Paage/ Description

Disclossure

Cross-rreference

Training and educaation LA10

A Average hourrs of trainingg per year peer employee by gender,

81-82 8

and by emplooyee categorry. LA A11

P Programs for skills manageement and liifelong learnning that

81-82 8

suupport the continued em mployability of o employeess and assist thhem in manaaging careerr endings. Equal remuneration r n for womenn and men LA14

R Ratio of basicc salary and remuneration of womenn to men by

81

employee cattegory, by siggnificant loccations of operation. Social : Product Reesponsibility Custom mer health annd safety PRR 1

Liife cycle stages in whichh health andd safety impaacts of

N/A N

p products and services aree assessed foor improvemeent, and p percentage o significant products annd services categories of c suubject to succh procedurees. Producct and service labeling PRR 5

P Practices related to customer satisfacttion, includinng results of

83-84 8

suurveys meassuring custom mer satisfactiion.

   

 

Annual Report 2012

97


13  Related Transactions Relatedd Company / Persoon

 

Description of

Descripption of

Size of

S of Size

Necessariees and Reasoons

Relattions

Transaactions

2011

2012

of Traansactions

Transacti Transacti ons

ons

9.68

16.79

Theere were normaal businesses annd

Integritty Plastics

Mr. Nisaporn

Trade the insttant

Co.,Ltd

Sirijantannunnt (wife of

petrochemicaal products,

trannsactions of thee GC Companyy with

Mr.Aikachai

on the date of o 31st

its ccustomers. Therefore, the Auddit

Sirichantanunnt, the

December 2011 and 2012

Com mmittee found that they weree

major sharehholder and

o the debts has the sum of

normal businesses and transactioons of

director of thhe GC

at 0.58 and 2.72 2 million

r GC Company and they were in relation

Company) was w the

Baht respectivvely

m prices withh the related market

major sharehholder and

Trade the insttant

director of thhe Integrity

petrochemicaal products,

Inteegrity Plastics Co.,Ltd, C who

Plastics Comppany.

on the date of o 31st

com mpound the prooducts and keeep

December 2011 and 2012

secret formula to respond r custom mer’s

o the debts has the sum of

satisfaction. Integrrity Plastics Co..,Ltd.

at 0.00 and 1.09 1 million

purcchase raw matterial with the related

Baht respectivvely

marrket prices from m GC Company and it

0.00

13.51

n to hirre Thee Company is necessary

will be sold back to t the GC Comppany withh costs of raw material and mixture. m Theerefore, the Auddit Committee found f thatt they were noormal businessees and trannsactions of GC C Company andd they werre in relation with w the relatedd market pricces. 31st Decembeer 2011 and

0.00

16.78

Suppplier’s policy iss sold in some product p

2012 has the sum of the

to cconverter only without agenccy

debts at 0.000 and 5.25

therrefore; the Com mpany procuress from

million Baht reespectively

Inteegrity Plastics Co.,Ltd C who is connverter and sell product to thee Com mpany with cost plus margin to respponse customers’ needs. the Audit A Com mmittee found that they weree normal businesses and transactioons of r GC Company and they were in relation m prices. withh the related market

98

 

Global Connections Public Company Limited


Relatedd Company

Description of

Descripption of

/ Person

Relattions

Transaactions

Size of

S of Size

Necessariees and Reasoons

2011Trans 20012Trans actions

a actions

7.77

24.00

of Traansactions

New Modern M

Mr. Wichan

Trade the insttant

Theere were normaal businesses annd

SuperppackCo.,Ltd.

Nanthananonnchai, The

petrochemicaal products,

trannsactions of thee GC Companyy with

major share holder h of

on the date of o 31st

its ccustomers. Therefore, the Auddit

New modern is an elder

December 2011 and 2012

Com mmittee found that they weree

brother of Mss. Boonsri

o the debts has the sum of

normal businesses and transactioons of

Kuleemakin (shareholder (

at 2.03 and0..71 million

t were in reelation GC companyand they

of 100 sharess) who is a

Baht respectivvely

withh the market reelated prices.

wife of Mr.Soomchai Kulimakin’s (m major shareholder and a director of the GC Company) d of and also be director New Modern Company 21 Consstruction

Mr. Hook Tichhachol, the

Payment for the t building

0.02

0.00

Duee to 21 Construcction Co., Ltd was w the

Co.,Ltd

elder brother of Mr.

and warehouuse’s

connstructor of the GC company’ss

Sumruay Tichhachol

construction

warrehouse and offfice. Later, thee land

which is the major

surfface around waarehouse got thhe

shareholder and a director

probblem therefore the GC compaany was

of the GC Company, is

hiree the mentionedd company to fix the

the major annd director

probblem. Thereforee, the Audit

of 21 Construction

Com mmittee consideered and foundd that

Company.

theyy were normal businesses andd those trannsactions were in relation with the conntracts and reassonable.

GC com mpany’s

Company’s directors

Sell car in thee position to

0.00

1.15

Thee Audit Committtee found that they

directors who is

all directors and a

werre normal transsactions of GC

Mr. Siri

executives which w had set

com mpany and they were in rule of the

Thirawattanawong

in rule of the Company

Com mpany.

since 2006

   

 

Annual Report 2012

99


14  DisRceussussiilotsn && FAinnaanlycsiiasloPfoOsiptieornating

 

A n a l y s i s o f Ove r a l l P e r f o r m a n ce Thhe distribution business of o the plasticc resins, plasttic, and petroochemical reelated produccts needs relatively high h workingg capital. Thhe key succcess factors of this bussiness depennd on the inventory managemennt, the logisstic systems that meet the clients’ needs in tiime, cost off capital, recceivables managemennt and sales revenue. Duue to this buusiness has loow gross proofit margin, too build up more m sales revenue will result in goood net profiit. S a l e s r e ve n u e Thhe Companyy had total saales revenuee of Baht 3,7700 million inn 2012, decreeased Baht 86 8 million from last year y or equivvalent to 2..28%.

Thee sales valuee of Commoodity Polymeer business unit was

reduced by 15.53%. Thhe sales valuue of Specialty and Engineering Polyymer businesss unit was increased by 20.33%.

And the sales s value of o Specialty Chemicals business b unitt was also inncreased byy 96.78%.

The 2.28% decrease d in total sales reevenue wass the impact of changing in distributtorship of Coommodity Polymer bussiness unit’s main supplieer with effecctive from miid of 2012 onnward. F i n a n ci a l Op e r a ti n g R e s u l ts In 2012, total cost c of sales and operatiing expensees were Bahtt 3,591 millionn, decreasedd by Baht f last yeear or equivaalent to 1.9 99%. 73 million from

Our major expeense was coosts of goodds sold, a

decrease off Baht 65 miillion or 1.83% % from last year y which was w in line with w sales deecline rate. The T costs of goods soold comparedd to sales vallue was a little bit higher from 93.27 to 93.69% iin 2012. Thhe gross proffit margin in 2012 was decreased froom Baht 2555 million to bbe Baht 233 million or equivalent to 8.46%.

This was due d mainly to t the decreease in saless volume off Commodityy Polymer

business unnit as describbed above ass well as thee dropping inn gross profit margin from 6.73% to be 6.31% derived from m higher com mpetition.

100

 

Global Connections Public Company Limited


GC incurreed Baht 125 million in selling s and administrativ a ve expenses,, a decreasee of Baht 8 million, or o 6.08% from m last year. The main reeasons weree the cost off joining exhhibition event amountingg to Baht 3 million, thee allowance for diminutioon in value of o inventory amounting to Baht 2 million as welll as the looss in exchaange rate off Baht 7 milliion in 2011 whereas w it was w a gain oof Baht 5 miillion in 20122 which inncluded in Otther Income. In additioon, there wass a reversal of o allowancee for diminuttion in valuee of invenntory amounnting to Bahht 2 million in 2012 as well.

H However, theere was an increase inn

personneel expensess amountingg to Baht 5 million duee to both annual a salary adjustmeent and thee additionaal number off staff. Interest expenses in 20012 was Baht 19 million, or 48.00% higher than laast year’s. This T was duee the rise in short term loan requuirement durring the yeaar resulting from f the inccrease in both accountss receivabble and invenntories during the year. The corporrate income tax rate wass decreased from 30.00% % in 2011 to be 23.00% inn 2012. Thiss was in accordance a w the Royyal Degree reegarding corporate incom with me tax reducction. As a result of the discuussed factors, our net inccome was Baaht 78 millionn in 2012 versus Baht 800 million inn 2011 or equuivalent to 3.46% decreaased. C o m p a r i s o n o f F i n a n c i a l P o s i t i o n ( F Y 2 0 1 2 / 2 0 11 ) Assets : As of 31 Decem mber 2012, GC recorded total t assets of o Baht 1,1255 million, reprresenting ann increase off Baht 13 million from lasst year. This was mainly due to thee increase inn inventoriess while the trade accouunts receivaable was low wer. The asssets with m major changged were ass follows : As of 31 Deecember 20112 total curreent assets shhowed Baht 983 million,, an increasee of Baht 133 million or 1..33% increassed from lastt year. This was w mainly due d to the inncrease in innventories off Baht 94 million m from Baht B 359 million in 20111 to be Bahtt 452 millionn in 2012 reesulting from m higher inveentory purchhased volumee especially the importedd items. While tradee accounts receivable r shhowed Baht 481 million as of 31 Deccember 2012,, a decreasee of Baht 866 million or 15.11% decreeased from last year.

This was duue to the drop d of saless

volume duuring the thiird and fourrth quarter of this yearr as well ass our better receivabless managemeent and conttrol.    

 

Annual Report 2012

101


Liabilities : As of 31 Decem mber 2012, GCC recorded total liabilitiess of Baht 7266 million, an increase off Baht 1 milliion or 0.19% % increased from f the preevious year. The major liabilities was shortteerm loans from financial institutions and a trade acccounts payaable. The endding 2012 baalance of shhort-term loaan was Bahtt 505 millionn versus 4666 million ass of 2011 or equivalent to 8.27% inccreased resuulting from the t rise in short s term looan requirem ment during the year.

And the

Deebts to Equitty Ratio of 2012 2 was 1.882 times com mpared to 1.887 times of 2011, which was not much differennt. G funds inn 2012 was not n much diffferent from those of Sources of Funds : The sttructure of GC’s 20011 as they were w in term m of short-teerm liabilities. The major liabilities w were short-teerm loans froom financial institutions, bank overdrrafts, and traade accountss payable. Shareholders’ Equity : As of o 31 Decembber 2012, thee portion of shareholders s s’ equity amoounted to Baaht 400 milllion, an inccrease of Baaht 12 millioon, or 3.00% %, derived ffrom net profit from opperations of fiscal f year 2012 Baht 78 million deduucted dividennd paid out BBaht 66 million. Liquidity : In 2012 2 GC hadd better liquiidity. Since after listed, GC had goood fund from m the IPO prroceeds at the t end of 2005 and the working capital frrom depositss redemptionn at the beeginning of 2006. This caused a beetter workingg capital maanagement tto reduce the cost of fuund. In 2012 GC haad a currentt ratio at 1.38 times com mpared to 1.337 times in 22011. The keey factor w the increaase in inventories. was

102

 

Global Connections Public Company Limited


15  Audit Committee’s Report

 

To : The Shareholderrs The Audit Committee C o Global Connnections Puublic Companny Limited, w of which was appointed a byy the resollution of the Board of Dirrector’s meetting, consistss of three inddependent ddirectors as foollows: 1. Dr. Pisit Leeahtam

Chairman off Audit Comm mittee

P Chawallee Pongpaatirochna 2. Assoc. Prof.

Audit Committee

3. Mr. Suchart Suphaayak

Audit Committee

For the year 2012, the Audit Comm mittee had inndependently accomplished their assigned taskss with no limitations in i gathering the Compaany’s informaation in any aspects. Thhe Audit Com mmittee hadd organizeed totally 5 meetings with w concerned managem ment, these meetings inncluded exteernal auditorr 4 meetinngs. The maiin important issues can be b summarizeed as followss: 1. The Auudit Committtee considerred the revviewed quarrterly financcial statemeent and thee audited financial statement for the year 20012 with external auditoor. The Audit Committeee believedd that the Company’s financial repport was made in accoordance witth Generallyy Accepteed Accountinng Principless and the dissclosure of information w was sufficiennt, completee and reliiable. Moreovver, the Auddit Committeee believed that t the extternal auditoor fulfill theirr duties with w suitable and complyy with professsional accouunting standaard. 2. The Auddit Committeee appointedd and approoved internaal audit plan for the yeaar 2013. Thee Audit Committee C b believed thaat the plan was approopriate by covering all significantt operatinng activities and significaant risks affeected the Coompany businness in accoordance withh the Com mpany’s risk assessment a w which the Auudit Committtee had revieewed and aggreed with.

   

 

Annual Report 2012

103


3. The Audit Committee reviewed internal auddit activities to comply with the approved a internal auudit plan.

And also diiscussed inddependently with internaal auditors to t obtain

informationn, inquire and provide vaaluable noticces and suggestions, inccluding follow w up the correction of significannt issues as reported in thhe internal audit a report. The Audit Coommittee believed thhat the Comppany providees appropriatte internal auudit system. 4. The Audit Committee reviewed r intternal controol system annd provided valuable sugggestions regarding internal i conttrol system and a any riskks which thee Company may encounnter. The Audit Comm mittee believved that the Company has h adequatee internal coontrol system m in order to protect or reduce any significcant risks which w may occur, incluuding the control c is operating effectively. e 5. The Audit Committee C reeviewed thee Company’ss compliancee with legislaature of the SEC and the regulaations of thee SET and laws relating to the Company’s business. The Audit Committee believed thhat the Company comply with relatted laws andd regulationss and no found any significant violation. v 6. The Audit Committee reviewed r thhe connected transactions or the trransactions that t may d off certain transactions. The T Audit lead to coonflicts of innterests, including the disclosure Committee believed that t certainn transactionns are reassonable andd comply with w the Company’ss normal opeerating busineess, including the disclossure are adeequate in acccordance with the reegulations off the SET.

104

 

Global Connections Public Company Limited


7. The Auddit Committeee considereed remuneraation of audiitor. The Audit Committeee proposedd the Boaard of Directoors for furtheer requesting the Sharehoolder’s approoval, followinng its review w of the performance p , independennce, qualification that have approveed by the Seecurities andd Exchannge Commission, for appoointing Ernstt & Young Office O Limitedd, also recoggnized eitherr of Khunn Tippawan Nananuwatt, C.P.A regisstration number 3459, aand/or Khun Termphongg Opanapphan, C.P.A. registrationn number 4501, and/orr Khun Khittsada Lerdw wana, C.P.A.. registrattion number 4958, havee been approved licensse by the Seecurities andd Exchangee Commission Thailannd, to be thee Company’’s Auditor foor another pperiod of thee fiscal yearr ended 31 3 Decemberr 2013. On the whole, thee Audit Com mmittee hass fulfilled thhe obligationns as stipulaated in thee Companny’s Board of o Directors’ approved Audit A Committee Charter. The Auditt Committeee believedd that the Company hass an accuratte financial and a operatioon report, an appropriatee internal control syystem, comppliance of laws, regulaations and commitmentts, accuratee disclosuure of relatedd transactionns. In this reggard, the Coompany has managed annd operationn that is consistent c w adequatee, transparennt and credibble corporatee governancce, and withh with an ongooing operatinng system deevelopment plan for quaality enhanceement approopriate for itss environment.

(Dr. Pisiit Leeahtam) C Chairman of Audit Committee Globaal Connectioons Public Coompany

   

 

Annual Report 2012

105


16  StaRteesmmepeonntsioafblBeofaorrdTohfeDFiriencatnocrsial Statement  

Thhe Board of Directors has realized thhe importancce of its rolee and responnsibility on im mplanting the corporaate governannce principlee into the company’s c management. m . This also m means to ensure that the Companny’s financiaal statement and financiaal informatioon in the annnual report is accurate, complete c and in line with the acccounting sttandard; thuus, reflectingg the actual financial status and opperational results of thhe Company and disclosinng adequatee important information to t stakeholdeers and invesstors. In this regard, the Board of o Directors has h focused on o improvingg the managgement struccture and ms to boostt the crediitability of the Company’s financial statemennt. Such internal coontrol system improvemennt also helpss guarantee that the Coompany is eqquipped withh an effectivve system too monitor its assets annd to prevennt serious missconducts annd other opeerational irreggularities of tthe Companyy. Thhe Board off Directors has h appointted the Auddit Committeee comprisinng of a nuumber of independennt directors, who are fuully qualifiedd under thee requiremennts by the Stock Exchhange of Thailand. Thhe Audit Committee is mainly m responnsible for maaintaining thhe quality off the financcial report and internaal control syystems. It is also responssible for anyy disclosure of connectted transactiions. The Committee’ss reviews onn such matteers will appeear in this Annnual Reporrt and form 556-1 under the t Audit Committee’ss Report. Thhe Board off Directors iss of the oppinion that the t overall internal conntrol system ms of the Company can c be regaarded as “satisfying”. Therefore, T thhe Board is confident that the Coompany’s financial sttatement as of 31st Deecember 20112 reliable and a is auditted in line with the unniversally accepted auditing a stanndards by thee company’ss auditor; soo it reflects an a accurate financial sttatus and operational results of the Companny as required by mosst accountinng standardss that are generally accepted.

106

(Mrr. Virah Mavvichak)

(Somchai Kuulimakin)

Chaairman of The Board

Chairmaan of Execuutive Committtee

 

Global Connections Public Company Limited


17  Financial Statement Year 2012

 

Global Connectionnss Public Company Limited Report andd financial statem ments 31 December 2012

   

 

Annual Report 2012

107


I ndep endent Au di t or ’ s R ep or t To the Sharreholders of Global Connections Public Company Limited I have audiited the acccompanying financial staatements of Global Connnections Pubblic Companyy Limited, which compprise the statement of finnancial position as at 31 December D 20012, and the related statement of comprehenssive income,, changes inn shareholders’ equity annd cash flow w for the yeaar then endeed, and a summary off significant accounting a policies and other explanatory inform mation.

Management's Responsibility for the Financial Statements Managemennt is responssible for thee preparationn and fair presentation p of these finnancial stateements in accordancee with Thai Financial Reporting R Staandards, andd for such internal i conntrol as mannagement determines is necessaryy to enable the preparaation of financial statem ments that arre free from material misstatemennt, whether due d to fraudd or error.

Au di t or 's R es p ons i b i li t y My responsiibility is to ex xpress an oppinion on theese financial statements based on m my audit. I coonducted my audit inn accordance with Thai Standards on o Auditing. Those standdards requiree that I com mply with ethical requuirements annd plan and perform p the audit to obttain reasonabble assurancce about wheether the financial staatements aree free from material m missttatement.

108

 

Global Connections Public Company Limited


An auditt involves peerforming proocedures to obtain audit evidence about the am mounts and disclosures d inn the finaancial statem ments. The procedures p s selected deppend on thee auditor's jjudgment, inncluding thee assessmeent of the riisks of mateerial misstatement of thee financial sttatements, w whether duee to fraud orr error. In making thoose risk asseessments, thee auditor coonsiders interrnal control relevant to the entity'ss preparattion and fair presentationn of the financial statements in orderr to design aaudit proceduures that aree appropriaate in the ciircumstancess, but not for the purpose of expresssing an opiniion on the effectiveness e s of the entity's e internal control. An audit also includes evaluating the appropriateness of accountingg policies used and the t reasonableness of accounting estimates made m by maanagement, as well ass evaluatinng the overaall presentatiion of the finnancial stateements. I believee that the auudit evidencee I have obttained is suffficient and appropriate a to provide a basis for myy audit opinion.

O p i ni on In my opinion, o the financial staatements refferred to abbove presentt fairly, in aall material respects, thee financial position of Global Connnections Pubblic Company Limited as a at 31 Deccember 2012,, its financiall performaance and caash flows forr the year thhen ended

in accorddance with TThai Financiial Reportingg

Standardds.

Thippawan Nanaanuwat Certtified Public Accountant (Thailand) No. N 3459

Ernst & Young Y Officee Limited Bangkokk : 22 Februaary 2013

   

 

Annual Report 2012

109


 

G l o b a l C o n n e cti o n s P u b l i c C o m p a n y L i m i te d S ta te m e n t o f f i n a n ci a l p o s i ti o n As at 31 December 2012 2012 (Unit : Baht) Note

2012

20011

Assets Current asseets

7

42,462,585

41,3387,393

6, 8

481,259,793

567,1145,463

Inventories

9

452,202,1112

358,5539,091

Other currennt assets

6

7,011,447

2,9 967,537

982,935,937

970,0039,484

Cash and caash equivaleents Trade and other o receivaables

Total currennt assets Non-currennt assets Investment properties

10

4,774,0559

5,2283,382

Property, plaant and equuipment

11

131,571,4 471

136,8868,893

Other non-ccurrent assetts

6,140,176

203,095 2

Total non-ccurrent assetss

142,485,7006

142,3355,370

1,125,421,64 43

1,112,3394,854

Total assetss

The accomppanying notees are an inttegral part off the financiial statementts.

110

 

Global Connections Public Company Limited


G l o b a l C o n n e cti o n s P u b l i c C o m p a n y L i m i te d S ta te m e n t o f f i n a n ci a l p o s i ti o n ( co n ti n u e d) As at 31 December 2012 22012 (U Unit : Baht) Notee

20122

2011

Liabilitiess and sharehholders' equity Current liabilities

122

505,000,000

4666,414,343

6, 133

194,4110,616

2226,032,220

144

2,2338,363

2,080,496

Income tax t payable

8,3552,393

10,712,290

Other cuurrent liabilitiees

1,4009,202

1,660,285

Total currrent liabilitiees

711,410,574

7006,899,634

144

3,801,712

3,037,461

155

10,7228,610

14,624,510

14,5330,322

17,661,971

725,940,896

7224,561,605

Short-term loans from m financial institutions Trade annd other payyables Current portion p of liabbilities under finance leasee agreementss

Non-currrent liabilitiees Liabilitiess under finannce lease aggreements - net of current portion p Provisionn for long-teerm employeee benefits Total non-current liaabilities Total liabbilities The accompanying notes n are ann integral parrt of the finaancial statem ments.

   

 

Annual Report 2012

111


 

G l o b a l C o n n e cti o n s P u b l i c C o m p a n y L i m i te d S ta te m e n t o f f i n a n ci a l p o s i ti o n ( co n ti n u e d) As at 31 December 2012 2012 (Unit : Baht) Note

2012

20011

Shareholders' equity Share capital Registeredd 260,000,000 ordinaary shares off Baht 1 eachh (2011:: 200,000,0000 ordinary shares of Bahht 1 each)

16

260,000,0000

200,0000,000

200,000,0000

200,0000,000

56,034,035

56,0034,035

24,000,0000

20,0000,000

119,446,7712

111,7799,214

Total sharehholders' equitty

399,480,747

387,8833,249

Total liabilitiies and shareeholders' equuity

1,125,421,64 43

1,112,3394,854

Issued annd fully paid up 200,000,000 ordinaary shares off Baht 1 eachh Share premium Retained eaarnings

17

Appropriaated - statutoory reserve Unapproppriated

The accomppanying notees are an inttegral part off the financiial statementts.

................................................................................................ Directorss

112

 

Global Connections Public Company Limited


G l o b a l C o n n e cti o n s P u b l i c C o m p a n y L i m i te d Statement of comprreehensive income For the year ended 31 Decembeerr 2012 (U Unit : Baht) Notee

20122

2011

Profit or loss : Revenuees Sales

3,699,9003,811

3,7786,146,215

10,5557,824

6,704,007

3,710,4661,635

3,79 92,850,222

3,466,5116,106

3,531,183,132

(2,0000,000)

2,000,000

3,464,5116,106

3,5533,183,132

Selling expenses e

26,54 47,030

27,000,074 2

Administtrative expennses

100,234,082

103,854,531

3,591,2997,218

3,6664,037,737

119,1664,417

128,812,485 1

(19,404 4,431)

(13,110,868) (

Profit beefore income tax expensses

99,759,986

115,701,617

Income tax t expensees

(22,1122,488)

(35,268,833)

Profit forr the year

77,6447,498

80,432,784 8

Other coomprehensivee income forr the year

-

-

Total comprehensivee income forr the year

77,6447,498

80,432,784 8

0.39

0.40

Other inccome Total revvenues Expensees Cost of sales s Reductioon of inventoory to net realisable valuue (Reversal))

Total expenses Profit beefore financee cost and inncome tax ex xpenses Finance cost

Earningss per share

199

Basic eaarnings per shhare The accompanying notes n are ann integral parrt of the finaancial statem ments.

   

 

Annual Report 2012

113


 

Global Connections Public Compannyy Limited S ta te m e n t o f cha n g e s i n s ha r e ho l de r s ' e q u i ty For the year ended 31 December 2012 (Unit : Bahht) Issued and a

Retained eaarnings

fully paaid Notee

Shaare

Appropriated

prem mium

- sttatutory

up

Total Unappropriated

ordinarry reeserve

sharess Balance as att 1 January 2011

200,000,000

56,0334,035

200,000,000

131,366,430

407,400,4665

Dividend paidd

2 22

-

-

-

(52,000,000) (52,000,0000)

Innterim divideend paid

2 22

-

-

-

(48,000,000) (48,000,0000)

-

-

-

80,432,784

80,432,7884

Baalance as at 311 December 2011

200,000,000

56,0334,035

200,000,000

111,799,214

387,833,24 49

Balance as att 1 January 2012

200,000,000

56,0334,035

200,000,000

111,799,214

387,833,24 49

1 17

-

-

4,000,000

(4,000,000)

-

Dividend paidd

2 22

-

-

-

(32,000,000) (32,000,0000)

Innterim divideend paid

2 22

-

-

-

(34,000,000) (34,000,0000)

-

-

-

77,647,498

77,647,49 98

200,000,000

56,0334,035

24,000,000

119,446,712

399,480,74 47

Tootal comprehhensive incoome foor the year

Trransfer of retained earninngs too statutory reeserve

Tootal comprehensive incoome foor the year Baalance as at 311 December 2012

Thhe accompaanying notes are an integgral part of the t financial statements.

114

 

Global Connections Public Company Limited


G l o b a l C o n n e cti o n s P u b l i c C o m p a n y L i m i te d C a s h f l o w s ta te m e n t For the year ended 31 Decembeerr 2012

(U Unit : Baht) 20122

2011

Cash flow ws from opeerating activvities Profit beefore tax

99,759,986

115,701,617

Adjustmeents to reconcile profit before b tax too net cash provided p by (paid ( from) ooperating acctivities :Deprecciation

14,0332,617

13,942,019

Reverssal of allowaance for doubtful accounnts

-

(55,000,000)

Write--off for bad debts d

-

3,087,685

(2,0000,000)

2,000,000

(1,1300,020)

(320,694)

114,137

-

(277,023)

5,060,542

Long-term employyee benefit expenses e

3,000,000

2,600,000

Interesst expenses

19,4004,431

13,110,868

133,0554,128

150,182,037 1

85,885,670

(56,560,707)

Inventtories

(91,6633,021)

(355,455,554)

Other current assets

(4,0433,909)

3,034,317

10,595

(17,095)

(31,3882,711)

6,263,743

(2511,083)

(519,431)

(6,8955,900)

-

84,7113,769

66,927,310

Cash paid p for interrest expensees

(19,2488,019)

(112,341,397)

Cash paid p for corpporate income tax

(24,4722,385)

(43,670,424)

Net cashh flows from operating activities a

40,9993,365

10,915,489

Reducction of invenntory to net realisable vaalue (Reversal) Gain on o sales of motor m vehiclees and equipment Loss on o write-off of o equipmennt Unrealised (gain) loss l on exchhange

Profit from m operating acttivities before changes c in opeerating assets and a liabilities

Operatinng assets (inccrease) decrrease Trade and other reeceivables

Other non-current assets Operatinng liabilities inncrease (deccrease) Trade and other payables Other current liabillities Provisiion for long--term employyee benefits Cash flow w from operrating activitties

The accompanying notes n are ann integral parrt of the finaancial statem ments.    

 

Annual Report 2012

115


 

G l o b a l C o n n e cti o n s P u b l i c C o m p a n y L i m i te d C a s h f l o w s ta te m e n t ( co n ti n u e d) For the year ended 31 December 2012 (Unit : Baht) 2012

20011

Cash flows from investing activitiess Acquisition of motor vehhicles and eqquipment

(3,995,54 43)

(4,5330,384)

1,424,657

320,744 3

Advance paayment for computer c sofftware

(5,947,6776)

-

Net cash floows used in investing acctivities

(8,518,5662)

(4,2009,640)

Increase in short-term looans from finnancial instittutions

38,585,6556

111,6641,834

Cash paid foor liabilities under u financce lease agreeements

(3,985,2667)

(3,3554,754)

Dividend paaid

(32,000,0000)

(52,0000,000)

Interim dividdend paid

(34,000,0000)

(48,0000,000)

(31,399,611)

8,2287,080

1,075,192

14,9 992,929

Cash and caash equivaleents at beginnning of year

41,387,393

26,3394,464

Cash and caash equivaleents at end of o year

42,462,585

41,3387,393

4,539,103

-

Proceeds froom sales of motor m vehicles and equippment

Cash flows from financing activitiess

Net cash floows from (usse in) financcing activitiess Net increasee in cash annd cash equivvalents

Supplementtal cash flow ws informatioon :Non-cash transactions t Motor vehhicles purchaased under finance f leasee agreementts The accomppanying notees are an inttegral part off the financiial statementts.

116

 

Global Connections Public Company Limited


Global Connections Publiic c Company Limiitted Notes to financial statementtss For the year ended 31 December 2012 1 . C or por a t e i n f or m a t i on Globbal Connecttions Public Company Limited (“the Company”) is a publicc company incorporated i d andd domiciled in Thailand. The Compaany is principally engagged in the w wholesale off plastic andd plasstic-related products. p Thhe registered office of thhe Companyy is at 13/1 M Moo 2 King-Kaew Road,, Racchateva, Banngplee, Samuuthprakarn.

2 . B a s i s of pr epa r a t i on Thee financial statements have been prepared in accorddance with accountingg standardss enuunciated undder the Accoounting Profeessions Act B.E. B 2547 annd their preseentation has been madee in compliance c w the stippulations of the with t Notificattion of the Department D oof Business Development D t dateed 28 Septem mber 2011, isssued under the t Accountting Act B.E. 2543. Thee financial statements s in Thai lannguage are the officiall statutory ffinancial staatements off the Company. The financcial statemennts in Engliish language have beeen translateed from thee Thaai language financial f stattements. Thee financial sttatements have been prepared p on a historical cost basis eexcept wherre otherwisee discclosed in the accounting policies.

3 . N e w a c c o u n t i n g s t a n d a r d s n o t y e t e f f e c t i ve Thee Federation of Accounting Professioons issued thhe following new/reviseed accountinng standardss thatt are effectivve for fiscal years beginnning on or affter 1 January 2013.

   

 

Annual Report 2012

117


A cco u n ti n g s ta n da r ds : TA AS 12

Income Tax xes

TA AS 20 (reviseed 2009)

Accountingg for Governnment Grantts and Discloosure of Govvernment Assistance

TA AS 21 (revisedd 2009)

The Effectss of Changess in Foreign Exchange RRates

F i n a n ci a l R e p o r ti n g S ta n da r d : TFFRS 8

Operating Segments S

A cco u n ti n g S ta n da r d I n te r p r e ta ti o n s : SICC 10

Goovernment Assistance A - No N Specific Relation to Operating O Acctivities

SICC 21

Income Taxess - Recoveryy of Revaluedd Non-Depreeciable Assetts

SICC 25

Income Taxess - Changes in the Tax Status S of an Entity or its SShareholderss

The Company’s C m management t believes that t these accounting standards will not haave any significcant impact on the finanncial statemeents for the year when they are inittially appliedd, except for the following accounting sttandards. T A S 1 2 I n co m e T ax e s This acccounting staandard requiires an entityy to identify temporary differences, d w which are diffferences betweeen the carryying amountt of an assett or liability in the accoounting records and its tax t base, and to recognise deferred d tax assets and liabilities undeer the stipulaated guidelinnes. The effeect of the adoptioon to the finnancial stateements of thhe Companyy will be to increase retained earninngs as at 1 Januaary 2012 by Baht 5.1 million (0.026 Baht B per shaare) and deccrease profit for the yearr 2012 by Baht 1.4 million (0.007 Baht peer share). In adddition, the Federation F o Accountinng Professioons has issuued Notificaation No. 30/2555 of 34/25555, publisheed in the Rooyal Gazette on 17 January 2013, mandating the use of acccounting treatmeent guidancee and accouunting standaard interpretaations as folllows.

118

 

Global Connections Public Company Limited


Effective date d A Accounting T Treatment Guuidance for Transfers T of Financial F Asssets

1 January 2013 2

A cco u n ti n g S ta n da r d I n te r p r e ta ti o n : SIC 29

Servvice Concesssion Arrangem ments: Discloosures

1 January 2014 2

F i n a n ci a l R e p o r ti n g S ta n da r d I n te r p r e ta ti o n s : TFRIC 4

Deteermining wheether an Arraangement

2 1 January 2014

conttains a Leasee TFRIC 12

Servvice Concesssion Arrangem ments

1 January 2014 2

TFRIC 13

Custtomer Loyaltyy Programmees

1 January 2014 2

Thee managemeent of the Coompany is evvaluating thee first-year im mpact to thee financial sttatements off the accounting treatment guidance g andd accountingg standard innterpretationss.

4 . S i g n i f i ca n t a ccou n ti n g pol i ci es 4.1

R e ve n u e r e co g n i ti o n

Sales of goods Sales of goods are reecognised when w the siggnificant riskks and rewarrds of owneership of thee goods haave passed to t the buyer. Sales are the t invoicedd value, excluding valuee added tax,, of goods supplied afteer deductingg discounts and a allowancces. 4.2

C a s h a n d ca s h e q u i va l e n ts Cash andd cash equiivalents connsist of cashh in hand and a at bankks, and all highly h liquidd investmennts with an original matturity of threee months orr less and noot subject too withdrawall restrictionns.

   

 

Annual Report 2012

119


 

4.3

T r a de a cco u n ts r e ce i va b l e T Trade accouunts receivable are statted at the net n realisablee value. Alloowance for doubtful a accounts is provided for f the estiimated lossees that mayy be incurrred in colleection of r receivables. The allowannce is generaally based onn collection experiencess and analysiis of debt a aging.

4.4

I n ve n to r i e s I Inventories a valued at are a the lowerr of cost (weeighted aveerage methodd) and net realisable r v value.

4 . 5 I n ve s tm e n t p r o p e r ti e s I Investment p properties arre measured initially at cost, c includinng transactioon costs. Subsequent t initial recoognition, invvestment prooperties are stated to s at cost less accumulated deppreciation a allowannce for loss on and o impairmennt (if any). D Depreciation of investmeent propertiees is calculatted by reference to the cost of buildings on t straight--line basis ovver estimatedd useful livess of 20 yearss. Depreciatioon of the invvestment the p properties is included in determining d income. O disposal of On o investmennt propertiess, the differeence betweeen the net ddisposal proceeeds and t carrying amount of the the t asset is recognised r inn profit or losss in the periiod when the asset is d derecognised d. 4.6 Property, plant and equiip p m e n t a n d d e p r e c i a t i on L Land is statted at costt. Buildings and equipm ment are sttated at cost less accuumulated d depreciation and allowannce for loss on impairmeent of assets (if any).

120

 

Global Connections Public Company Limited


Depreciattion of plant and equipm ment is calculated by refeerence to theeir costs on the t straight-line basis over the folllowing estim mated useful lives : Buildings

-

20, 30 years

Office equipment

-

3, 5 years

Furniture and fixtures

-

5, 10 years

Tools and equipment e

-

5 years

Motor vehiccles

-

5 years

Depreciattion is included in determ mining incom me. No depreciation is proovided on land and land improvemennts. 4.7

R e l a te d p a r ty tr a n s a cti o n s Related parties p com mprise enterpprises and individuals that t control,, or are coontrolled by,, the Comppany, whether directly or indirectlly, or whichh are underr common control c withh the Comppany. They alsoo include asssociated coompanies annd individuals which dirrectly or inddirectly ownn a voting interest in the t Companyy that givess them signifficant influence over thhe Company,, key mannagement peersonnel, dirrectors and officers with authorityy in the planning andd direction of the Comppany’s operations.

4.8

L o n g - te r m l e a s e s Leases off assets whhich transferr substantially all the risks and rew wards of ow wnership aree classified as finance leases. Finance leases are a capitaliseed at the low wer of the fair f value off the leaseed assets andd the presennt value of the minimum m lease payyments. The outstandingg rental obbligations, neet of financee charges, are a included in other lonng-term payyables, whilee the intereest elementt is chargedd to profit or o loss overr the lease period. Thee equipmentt acquired under financce leases is depreciated d over the useeful life of thhe asset. Leases noot transferrinng a significcant portion of the riskss and rewarrds of owneership to thee lessee arre classified as operating leases. Operating leease paymeents are reccognised ass expense in profit or looss on a straaight-line bassis over the lease term.

   

 

Annual Report 2012

121


4 . 9 F o r e i g n cu r r e n ci e s T Transactions s in foreign currencies c are translated into Baht att the exchannge rate rulinng at the d date of the transaction. t minated in fooreign currencies are Monetary asssets and liabbilities denom t translated innto Baht at the exchannge rate rulinng at the end of reportting period, with the e exception o those covvered by forward exchaange contraccts, which aare translateed at the of c contracted raates. G Gains and losses on exchhange are inncluded in deetermining inncome. 4 . 1 0 I m p a i r m e n t o f a s s e ts A the end of At o reporting period, the Company C peerforms impaairment revieews in respect of the p properly, plaant and equiipment whennever eventts or changees in circumsstances indiccate that a asset mayy be impaireed. An impairrment loss is recognised when an w the reecoverable amount of a asset, whhich is the hiigher of the asset’s fair value an v less coosts to sell annd its value in use, is l than thee carrying am less mount. A impairmeent loss is reccognised in profit An p or loss. 4 . 1 1 E m p l o y e e b e n e f i ts

S Short-term e employee bennefits S Salaries, wages, bonusees and contributions to the social security s funnd are recoggnised as e expenses whhen incurredd.

P Post-employm yment benefits ts D Defined conttribution planns T Companny and its employees The e h have jointly established a providennt fund. Thee fund is m monthly conntributed by employees and by thee Company. The fund’s assets are held h in a s separate truust fund andd the Comppany’s contriibutions are recognised as expensees when i incurred.

122

 

Global Connections Public Company Limited


Defined benefit b plans The Com mpany has obligations o i respect of in o the seveerance paym ments it muust make too employeees upon retirrement undeer labor law. The Compaany treats these severannce paymentt obligationns as a definned benefit plan. p The obliggation underr the defineed benefit plan is determined by a professionaally qualifiedd independdent actuary based on acctuarial techniques, usingg the projectted unit creddit method. Actuarial gains and loosses arising from post-eemployment benefits are recognised immediatelyy in profit or o loss. For the first-time f adoption of TA AS 19 Emplooyee Benefitts in 2011, thhe Companyy elected too recognisee the transiitional liabiliity, which exceeds the liability that would have beenn recogniseed at the sam me date undeer the previoous accountiing policy, thhrough an addjustment too the beginnning balancce of retainedd earnings inn 2011. 4 . 1 2 P r o vi s i o n s Provisionss are recognnised when the t Companny has a present obligatiion as a resuult of a pastt event, it is probable that an ouutflow of reesources embbodying ecoonomic beneefits will bee required to t settle thee obligation, and a reliabble estimate can be madde of the am mount of thee obligationn. 4 . 1 3 I n co m e ta x Income taax is provideed in the acccounts at thhe amount expected e to be paid to the t taxationn authoritiees, based on taxable proffits determineed in accorddance with tax legislationn.

   

 

Annual Report 2012

123


 

5 . S i g n i f i c a n t a c c o u n t i n g j u d g e m e n t s a n d e s t i ma t e s The prreparation off financial statements s inn conformityy with financial reportinng standards at times requirees managem ment to makee subjectivee judgementts and estim mates regardding matters that are inherenntly uncertaiin. These juddgements annd estimates affect reported amountss and disclosures; and actual results couldd differ from m these estim mates. Signifficant accouunting judgeements and estimates e are as follow: Le ase s In deteermining whhether a leaase is to be classified as a an operatting lease oor finance leease, the managgement is reequired to use u judgemeent regardinng whether significant risk and rew wards of ownersship of the leased asset has been transferred, taaking into coonsideration terms and conditions c of the arrangement. A l l o w a n ce f o r do u b tf u l a cco u n ts In deteermining an allowance for doubtful accounts, the t management needs to make juudgement and esstimates baseed upon, among other thhings, debt collection c hisstory, aging pprofile of outtstanding debts and a the prevvailing econoomic conditioon. R e du cti o n o f i n ve n to r y to n e t r e a l i s a b l e va l u e In deteermining a reduction of inventory too net realisaable value, the t management needs to make judgem ment and esstimates bassed upon, among a otheer things, sloow-moving inventories and net realisabble value. P r o p e r ty p l a n t a n d e q u i p m e n t/ De p r e ci a ti o n In deteermining deppreciation of plant and eqquipment, thhe managem ment is requireed to make estimates e of the useful lives and residuaal values of the plant annd equipmennt and to review estimaate useful lives annd residual values v whenn there are anny changes.

124

 

Global Connections Public Company Limited


In addition, a the managemennt is requiredd to review property, p plant and equippment for im mpairment onn a periodical p baasis and record impairment losses inn the periodd when it iis determineed that theirr recooverable amount is loweer than the carrying c amoount. This reqquires judgem ments regardding forecastt of future f revenuues and exppenses relatinng to the asssets subject to t the review w. Posstt-employment benefits under defined benefit plla ans b on acttuarial technniques. Suchh Thee obligation under the defined beneefit plan is determined based deteermination iss made baseed on variouss assumptionns, including discount ratte, future salary increasee ratee, mortality raate and stafff turnover raate.

6 . R el a t ed pa r ty t r a n s a ct i on s Duriing the yeaars, the Com mpany had significant s business b trannsactions witth related parties. p Suchh trannsactions, which w are suummarised below, arose in the ordiinary coursee of businesss and weree conncluded on commercial c t terms and baases agreed upon betweeen the Com mpany and those relatedd partties. (Unit : Milllion Baht) 20012

20111

Trannsfer pricing policy

Saales of finisheed goods

41 4

17

Sim milar to markeet price

Puurchases of finished f goodds

30 3

-

CCost plus marrgin

1

-

At a rate set inn the

Trransactions with w relatedd companies

Tr Transactions w manageement and dirirectors with Saales of assetss

Com mpany’s reguulation

   

 

Annual Report 2012

125


As at 31 3 Decemberr 2012 and 2011, the balaances of thee accounts between b the Company and a those relatedd parties are as follows : (Unitt : Thousand Baht) 2012

2011

Tradee and other receivables r - related parrties (Note 8) 8 Integrrity Plastics Company C Lim mited

2,721

579

714

2,030

3,435

2,609

Integrrity Plastics Company C Lim mited

5,251

-

Total

5,251

-

Integrrity Plastics Company C Lim mited

1,087

-

Total

1,087

-

New Modern Supeer Pack Com mpany Limitedd Total

Advan ance paymennt for goods - related paarty (Incluuded in otheer current asssets)

Tradee payables - related partty (Note 13)

Di r e cto r s a n d m a n a g e m e n t’ s b e n e f i ts Management beneefit expensees are beneffits paid to directors annd executives of the Company. C Executtives of the Company are a as definned by the regulation of o the Secuurities and Exchange E Commission and comprise c all directors, thhe managingg director, the t four moost senior ex xecutives below the managiing director, and all exeecutives holdding equivalent positionns to the fouurth most senior executive. e During the year ennded 31 Deceember 2012 and 2011, thhe Company had employyee benefit expenses e of its directors d and managemennt as below. (Unitt : Thousand Baht) 2012 Short--term employee benefitss Post-eemployment benefits Total

126

 

Global Connections Public Company Limited

2011

36,1000

38,357 3

2,4322

2,032

38,5322

40,389 4


7 . C a s h a n d ca s h eq u i v a l en t s (U Unit : Thousaand Baht) 2012 Caash

2011 60

60

Baank deposits

42,,403

41,327

Tootal

42,,463

41,387

As at a 31 December 2012, baank deposits in saving acccounts carrried interestss between 0.05 and 0.100 perccent per annnum (2011: beetween 0.055 and 0.10 percent per annum). a

8.

Trra ade and ootther receivables (U Unit : Thousaand Baht) 2012

2011

Traade receivabbles - unrelaated parties Agged on the basis b of due dates d Noot yet due

3333,415

418,336

Up to 1 month

1311,781

131,606

1 - 3 monthss

10,,804

14,154

3 - 6 monthhs

1,999

23

6 - 12 monthhs

-

-

66,451

6,744

484,,450

570,863

Leess: Allowancce for doubtfful accounts

(7,0000)

(7,000)

Tootal trade recceivables - unrelated u parrties, net

477,,450

563,863

Paast due

Over 12 monnths Tootal

   

 

Annual Report 2012

127


 

(Unitt : Thousand Baht) 2012

2011

Tradee receivabless - related paarties Aged on the basiss of due datees Not yet y due

2,721

579

-

1,364

714 4

666

3,4355

2,609

480,8855

5666,472

3755

674

481,2600

5667,146

Past due d Up to 1 month 1 - 3 months Total trade receivvables - relatted parties Total trade receivvables, net Other receivables - unrelated parties Total trade and otther receivabbles, net

9 . I n v en t or i es (Unitt : Thousand Baht) Reduuce cost to net n Cost

reaalisable value

2012

20111

20112

Finishhed goods

407,6601

325,880

(8,0000)

Goodss in transit

52,6601

42,6659

460,2202

368,5539

Total

Innventories-nnet

20011

20012

2011 2

(10,,000)

3999,601

315,880

-

-

552,601

42,659 4

(8,0000)

(10,,000)

4552,202

3558,539

1 0 . I n v es t m en t p r op er t i es These represent laand and builldings whichh is its former office loccation. At prresent, the Company C does not use such land and buuildings for itss operation and a intends to t sell them.

128

 

Global Connections Public Company Limited


Thee net book vaalue of invesstment propeerties as at 31 3 December 2012 and 20011 is presentted below. (U Unit : Thousaand Baht) 2012 Coost Leess: Accumulaated depreciiation

2011

112,140

12,140

(77,366)

(6,857)

4,774

5,283

Neet book valuee

A reconciliationn of the neet book valuue of investtment propeerties for the years 20112 and 20111 is presented below. (U Unit : Thousaand Baht) 2012

2011

Neet book valuee at beginninng of year

5,283

5,791

Deepreciation charged

(509)

(508)

Neet book valuee at end of year y

4,774

5,283

As at a 31 December 2012 andd 2011, the faair value of investment properties p is approximateely Baht 6.4 4 milliion which haas been deteermined based on valuaations perform med by an inndependent professionall valuuer, using the market approach.

1 1 . P r oper t y , pl a n t a n d eq u i pm en t (Unit : Thouusand Baht) Laand and

Office

land

equipment, e

im mprove

furniture

m ments

B Buildings

Tools and

and a fixtures equipment

Motor vehicles

Total

Coost : 1 January 2011

52,715

93,740

12,092

7,511

40,822

206,880

Addditions

-

-

2,032

2,498

-

4,5300

Dissposals/writee-off

-

-

(934)

-

(1,024)

(1,958)

52,715

93,740

13,190

10,009

39,798

209,452

Addditions

-

-

2,634

1,362

4,539

8,5355

Dissposals/writee-off

-

-

(57)

-

(5,147)

(5,204)

52,715

93,740

15,767

11,371

39,190

212,783

31 December 2011 2

31 December 2012 2    

 

Annual Report 2012

129


 

(U Unit : Thousaand Baht) Land and

Office

lannd

equipment,

improove

furrniture

mennts

Builddings

Toools and

and fixtures eqquipment

Motor vvehicles

Total

Accum mulated deppreciation : 1 Januuary 2011

-

25,916

9,761

5,692

19,738

61,107

-

3 3,593

1,518

1,074

7,249

13,434

dispoosals/write-ooff

-

-

(934)

-

(1,024)

(1,958)

31 Deccember 2011

-

29 9,509

10,345

6,766

25,963

72,583

-

3 3,602

2,004

1,220

6,698

13,524

dispossals/write-offf

-

-

(43)

-

(4,853)

(4,896)

31 Deccember 20122

-

33,111

12,306

7,986

27,808

81,211

1 Januuary 2011

522,715

677,824

2,331

1,819

21,084

145,773

31 Deccember 2011

522,715

6 64,231

2,845

3,243

13,835

136,869

31 Deccember 20122

522,715

600,629

3,461

3,385

11,382

131,572

Depreeciation for thhe year Depreeciation on

Depreeciation for thhe year Depreeciation on

Net book b value :

Depreeciation for the year :

130

2011 (included ( in selling and administrativ a e expenses))

13,434

2012 (included in selling and administrativ a ve expenses))

13,524

 

Global Connections Public Company Limited


As at a 31 Decembber 2012, thee Company has h motor veehicles under finance leaase agreemeents with nett boook value amoounting to appproximatelyy Baht 8 milliion (2011 : Baaht 7 million). As at a 31 Decem mber 2012, ceertain equipm ment items have h been fully f depreciated but aree still in use.. Thee gross carryiing amount (before deduucting accumulated deppreciation) off those assetts amountedd to approximatel a ly Baht 26 million m (2011 : Baht 14 million).

12. Short-term looa ans from ffiinancial innsstitutions (U Unit : Thousaand Baht) Interestt rate 2012

2011

2012

2011

(percent peer annum) Proomissory nottes

Maarket rate

Market ratee

505,000

330,000

Truust receipt payable

Maarket rate

Market ratee

-

136,414

505,000

466,414

Tootal

As at a 31 Decem mber 2012, thhe short-term m credit faciliities of the Company C whhich have not n yet beenn draw wn down am mounted to Baaht 1,169 million (2011 : Baaht 1,380 milliion).

13. Trade and other payabllees (U Unit : Thousaand Baht) 2012 Traade payables - unrelatedd parties

183,453

212,777

Traade payables - related parties p

1,087

-

Acccrued expennses

9,871

13,255

1994,411

226,032

Tootal trade andd other payaables

   

2011

 

Annual Report 2012

131


 

a s e a g r eem en t s 14. Liabilities under finance leea (Unitt : Thousand Baht) 20012

2011 2

Liabiliities under finnance lease agreementss

6,691

5,578

Less : Deferred intterest expenses

(651)

(460)

Total

66,040

5,118

(22,238)

(2,081) (

3,802

3,037

Less : Portion due within one year Liabiliities under finnance lease agreementss - net of current portionn

The Coompany has entered intoo the finance lease agreeements withh leasing companies for rental of motor vehicles for use in its opperation, whhereby it is committed c too pay rentall on a monthhly basis. The terrms of the aggreements are a generally between 4 and 5 yearss. Future minimum leaase payments required under u the finance lease agreements a w were as folloows :(Unitt : Thousand Baht) As at a 31 December 2012 Less than 1 year

1-55 years

Total T

Futuree minimum leease paymennts

2,551

4,140

6,691

Deferrred interest expenses e

(313)

(338)

(651)

Presennt value of future f minimum lease paayments

2,238

3,802

6,040

(Unitt : Thousand Baht) As at a 31 Decem mber 2011 Less than 1 year

132

1-55 years

Total T

Futuree minimum leease paymennts

2,331

3,247

5,578

Deferrred interest expenses e

(250)

(210)

(460)

Presennt value of future f minimum lease paayments

2,081

3,037

5,118

 

Global Connections Public Company Limited


1 5 . P r ov i s i on f or l on g - t er m em pl oy ee b en ef i t s Provvision for lonng-term empployee beneefits, which is i compensaations on em mployees’ retirrement, wass as follows f : (U Unit : Thousaand Baht) 2012 Deefined benefitt obligation at a beginning of year

14,625

12,025

2,408

2,100

592

500

(66,896)

-

110,729

14,625

Cuurrent servicee cost Intterest cost Beenefits paid during the yeaar

2011

Deefined benefitt obligation at a end of yeaar

Lonng-term employee benefiit expenses included in the t profit or loss was as follows : (U Unit : Thousaand Baht) 2012 Cuurrent servicee cost Intterest cost Tootal expense recognised in profit or loss

2011

2,408

2,100

592

500

3,000

2,600

137

137

2,863

2,463

Linne items undder which such expensess are includeed in profit or loss Seelling expensses Addministrative expenses

Prinncipal actuarrial assumptioons at the vaaluation datee were as foollows : 2012

2011

(% per annum) (% peer annum) Disscount rate Fuuture salary inncrease ratee

   

3.5

3.5

3.0 - 6.00

3.00 - 6.0

 

Annual Report 2012

133


1 6 . S ha r e ca pi ta l On 3 April A 2012, the Annual Geeneral Meetinng of the Coompany’s shareholders ppassed a resoolution to increasse the Comppany’s registeered capital under a Genneral Mandaate from Bahht 200 millionn to Baht 260 miillion, through the issuance of 60 milllion additionnal ordinary shares s with a par value of Baht 1 each, to t offer to thhe existing shhareholders proportionateely to the nuumber of shaares currentlyy held by each shareholder s a authorisse the Board of Directorss to considerr and determ and mine the pricce, details and coonditions of the t issuance of the addittional share capital. c The Company reegistered the increase in its capital with the t Ministry of o Commercee on 12 April 2012.

17. Statutory reservvee Pursuannt to Sectionn 116 of the Public P Limitedd Companies Act B.E. 25335, the Comppany is requirred to set aside too a statutoryy reserve at least 5 perccent of its neet income affter deductingg accumulated deficit brought forward (iff any), until the reserve reaches r 10 percent p of thhe registered capital. The statutory reservee is not available for divideend distribution.

18. Expenses by naatture Significcant expenses by naturee are as folloow : (Unitt : Thousand Baht) 2012 Salaries and wagees and otherr employee benefits b

80,5511

75,294 7

Depreeciation

14,033

13,942

Rentaal expenses from f operatinng lease agrreements

5,64 46

6,493

3,483,2219

3,5004,832

Custom duty and clearing exppenses

47,6990

40,372 4

Changges in inventories of finisshed goods

(81,7221)

(300,584)

Purchhase of invenntories

134

2011

 

Global Connections Public Company Limited


1 9. E a r n i n g s per s ha r e Basic earnings per p share is calculated c byy dividing prrofit for the year y attributaable to equitty holders off the Company (excluding other comprehensive inncome) by the weighted average number off ordiinary shares in issue during the year.. Thee following taable sets fortth the computation of baasic earningss per share : 22012 Proofit for the year y (Thousaand Baht) Weeighted averrage numberr of ordinary shares (Thoousand sharees) Eaarnings per shhare (Baht/sshare)

2011

77,648

80,433

2200,000

200,000

0.39

0.40

2 0 . S eg m en t i n f or m a t i on Thee Company’ss operations comprise the wholesalee of plastic and a plastic-rrelated produucts to bothh dom mestic and export e markeets. The dom mestic sales reepresented more m than 998 percent of total sales.. Thee Company’ss operations involve a siingle industrry segment and a are carried out from m the singlee geoographic areaa of Thailand. As a result, all of the revenues, operating o proofits and asseets reflectedd in thhese financial statementts pertain to the aforemeentioned induustry segmennt and geogrraphic area.

2 1 . P r ov i d en t f u n d Thee Company and a its emplooyees have jointly estabblished a provident fund in accordannce with thee Provvident Fund Act B.E. 25330. Both em mployees andd the Compaany contributed to the fuund monthlyy at the t rate of 4 to 15 perceent of basic salary. The fund, which is managedd by Bualuanng Securitiess Pubblic Companyy Limited, will be paid too employeess upon terminnation in accordance with w the fundd rulees. During the year 2012, the Compaany contribuuted Baht 5 million (20111: Baht 5 miillion) to thee fund.

   

 

Annual Report 2012

135


2 2 . D i v i d en d pa i d Dividennd declared in 2012 and 2011 and alreeady recordeed consist off the followinngs :(Unit : Baht) Dividendss Divideends for 20111

Approvved by A Annual General Meeting

Total divvidends

DDividend per share

32,0000,000

0.16

34,0000,000

0.17

66,0000,000

0.33

52,0000,000

0.26

48,0000,000

0.24

100,0000,000

0.50

o the sharehholders on of 3 April 2012 Interim m dividends for 2012

A Meeting of the C Company’s Booard of D Directors on 7 August 2 2012

Total for 2012 Divideends for 20100

A Annual General Meeting o the sharehholders on of 7 April 2011

Interim m dividends for 2011

A Meeting of the C Company’s Booard of D Directors on 11 1 August 2 2011

Total for 2011

23. Commitments and continggeent liabilitiiees 23 . 1 Op e r a ti n g l e a s e co m m i tm e n ts T The Company has enttered into several s leasse agreemennts in respeect of the lease of w warehouse a equipment. The terrms of the agreements and a are generally betweenn 1 and 4 y years.

136

 

Global Connections Public Company Limited


Futuure minimum m lease paym ments under these t lease agreements a were as folloows. (Unit : Milllion Baht)

As at 31 Decembeer 2012

2011 2

in up to 1 year

8

5

in oveer 1 and up to t 4 years

6

1

Payable:

 

23 . 2 A co m m i tm e n t u n de r tr a de cr e di t i n s u r a n ce p o l i cy The Company has enntered into a commitmeent under traade credit innsurance pollicy with ann insurancee company in which the Company is to payy the minim mum insurancce premium m amountinng to approximately Bahtt 1 million in 2013. 23 . 3 G u a r a n te e s As at 31 December D 20012, there were w outstandding bank guuarantees off approximattely Baht 888 million (22011: Baht 722 million) issuued by the banks on beehalf of the Company inn respect off certain peerformance bonds as reqquired in thee normal couurse of businness. These are a letters off guaranteee to guaranttee paymentts due to creditors. 23 . 4 L e tte r o f cr e di t C haad outstandiing commitm ments of appproximatelyy As at 31 December 2012, the Company USD 48,14 48 (2011: USDD 72,900) froom the letterrs of credit isssued to guaarantee the payments p off goods of a creditor.

   

 

Annual Report 2012

137


2 4 . Fi n a n ci a l i n s tr u m en ts 24 . 1 F i n a n ci a l r i s k m a n a g e m e n t T Companny’s financiaal instrumentts, as defineed under Thai Accountinng Standard No. 107 The “ “Financial Innstruments: Disclosure and Presentaations”, princcipally compprise cash and a cash e equivalents, trade and other receivvables, short-term loans,, trade and other payaables and l liabilities undder finance lease l agreem ments. The financial f riskss associated with these financial i instruments a how they are managged is describbed below. and

C Credit risk T Companny is exposeed to credit risk primarilyy with respeect to trade accounts reeceivable. The T The Company managees the risk by adoptinng appropriaate credit control poliicies and p procedures a thereforre does not expect to inncur material financial loosses. In adddition, the and C Company dooes not havee high conceentration of credit risk sinnce it has a large customer base. T maximuum exposuree to credit riisk is limitedd to the carrrying amounnts of trade accounts The r receivable as stated in thhe statement of financiaal position.

I Interest ratee risk T Companny’s exposurre to interesst rate risk relates The r primaarily to its shhort-term boorrowings, c cash at bannks and liabbilities underr finance lease agreements. Howevver, since short-term s b borrowings b bear fixed interest i ratess which aree close to thhe market rate and moost of the C Company’s f financial assets and liabilities bear non-interest, n the interest rate risk is expected t be minimaal. to

F Foreign curre rency risk T Companny’s exposuree to foreign currency rissk arises mainnly from tradding transacctions that The a denominnated in foreign currenncies. The Company are C m manages its exposure too foreign c currency riskk by consideering purchaase/sale of forward f contracts from time to timee so as to r reduce expoosure to the foreign f curreency risk which may incuur. A at 31 Deecember 20012, the Com As mpany’s foreeign currenccy-denominated trade accounts p payable amoounting to appproximatelyy USD 3 millioon (2011: USD 5 million) w was unhedgged.

138

 

Global Connections Public Company Limited


24 . 2 F a i r va l u e s o f f i n a n ci a l i n s tr u m e n ts Since thee majority off the Compaany’s financial assets annd liabilities are short-term in naturee and loans are bear floating f interest rates, thheir fair valuue is not ex xpected to be b materiallyy different from the am mounts presennted in the statement s of financial poosition. A fair vaalue is the amount for which an asset can be b exchangged or a liaability settledd between knowledgeable, willingg parties in an arm’s leength transaaction. The fair value iss determineed by refereence to thee market pricce of the financial f insttrument or by using ann appropriaate valuationn technique, depending on o the naturee of the instrument.

25. Capital manaag g em en t Thee primary objjective of thhe Company’s capital maanagement iss to ensure thhat it has ann appropriatee finaancial structuure and preseerves the abbility to continue its businness as a goiing concern.. Thee Company manages itts capital position p withh reference to its debt-to-equity ratio. As at 31 December D 20012, the Company's debt--to-equity raatio was 1.82:1 (2011: 1.87:1).

2 6 . E v en t s a f t er t he r epor t i n g per i od On 22 Februaryy 2013, the Board of Directors D passsed a resoluution propossing the Annnual Generaal Meeeting of the shareholderrs to approvve the dividdend paymennt and reduuction of thee Company’ss regiistered sharee capital as follows. f 26.1 To pay diividends in respect of the 2012 earniings at the raate of Baht 0.36 per shaare, or a totaal of Baht 72 7 million. In September 2012, the Coompany paidd interim dividend at the rate of Baht 0.17 per share, s or a tootal of Baht 34 million. The T Company has to payy the remainning dividendd of Baht 38 3 million, or Baht 0.19 peer share. 26.2 To reducee the Compaany’s registeered share capital from Baht B 260 million to Baht 200 millionn by canceeling 60 milliion unissuedd ordinary shhares with a par value oof Baht 1 eacch, or a totaal of Baht 60 6 million, which w is the same s amounnt as the shaare capital inncrease apprroved by thee 2012 Annnual General Meeting of the sharehoolders under a General M Mandate as described inn Note 16 to the financcial statemennts.

   

 

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2 7 . A ppr ov a l of f i n a n ci a l s t a tem en t s These financial statements were w authorissed for issuee by the Company’s Board of Direectors on 22 Febbruary 2013.

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Global Connections Public Company Limited

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