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Loxley Public

Company Limited

Annual Report

2010


Contents

Annual Report 2010 Loxley Public Company Limited 2 4 5 6 8 9 10 12 14 16 18 19 20 25 28 31 35 37 38 41 43 44 45 46 47 49 53 61 62 67 68 75 77 80 81 82 84 89 91 93 152

Background, Major Changes and Developments Vision & Mission Message from the Chairman Activities in 2010 Financial Summary Revenue Structure Corporate Structure Subsidiaries’ Organization Chart Board of Directors Executive Board List of Department Management Directors in the Subsidiaries Directly Owned by Loxley ICT Business Group Technology Business Group Project Business Group Trading Business Group Service Business Group Special Project Group Joint Venture Business Group Support Units Corporate Social Responsibility Risk Factors Legal Dispute Details of the Company Capital Structure Details of Ownership in Loxley Subsidiaries and Associated Companies Management Executives Remuneration Corporate Governance Personnel Information of Company Executives Information of Directors in Holdings Position in Subsidiaries, Associated & Related Companies Information of Directors in the Subsidiaries Internal Control and Audit Report of Board’s Responsibility for Financial Report Report of the Audit Committee Related Party Transactions Elaboration and Analysis of Operating Results and Financial Status Audit Report of Certified Public Accountant Financial Statements Auditor Remuneration, Other Parties


BACKGROUND, MAJOR CHANGES AND DEVELOPMENTS

Loxley Company Limited has operated its business for over 70 years. It was founded on 15 January 1939 under the name Loxley Rice Company (Bangkok) Limited as a joint venture between Ng Yuk Long Lamsam and Andrew Beattie of W.R. Loxley Company of Hong Kong. Initially, the Company’s main activities were exports of agricultural products of Thailand, including rice and timbers. For over seven decades, the business has grown from strength to strength. In 1957, the Company’s name was changed to Loxley (Bangkok) Company Limited and expanded its export businesses as well as distribution of foreign products including industrial products and advanced technology products. Due to its outstanding performance, the Company had attracted a huge number of leading local and foreign corporations, many of which later became the company’s business partners. By the year 1988, with an aim to meet the ever-changing market demands, the Company expanded its business to cover technology. On 1 April 1993, the Company was transformed into a public company, being listed on the Stock Exchange of Thailand under the name of Loxley Public Company Limited. Our shares began to be traded on 25 January 1994 under the designation “LOXLEY” in the commercial group of stocks. The Company has always committed to operating its business with a comprehensive range of products and services, focusing on sustainable growth in order to cater clients’ needs and to manage our assets in accordance with the value-added principle for maximum benefits of shareholders, employees, and the society.

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Loxley Public Company Limited


Three eras of Loxley’s 72-year development • The First Era : from 1939 to 1952 The Company commenced its operation by exporting agricultural products,

including rice and timbers, prior to expansion of imports of products after the World War II.

• The Second Era : from 1953 to 1987

Most of the Company’s imported products, which included machines, electrical appliances, and motors, were from England. Later, various categories of products were imported from Asian and other western countries, such as motors from Japan, cosmetics from Korea, Olivetti typewriter from Italy. The Company’s experience in advanced technology products in this era has contributed to unrivalled expertise in the area of technology in later years.

• The Third Era : from 1988 to present

Loxley has expanded the business to cover public utility infrastructure, telecommunication, energy, information technology and communications, as well as consumer products and services. It has not only developed its own working systems and products, but also been distributors and joint ventures of internationally-recognized products and technology. The Company has presently met consumers’ demands with a wide range of products.

Annual Report 2010

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Vision “INSPIRED CHOICE FOR CUSTOMERS, BUSINESS PARTNERS AND INVESTORS�

Mission We seek to provide greater value in products and services to ensure complete customer satisfaction. We strive to keep ahead of market changes and foster a climate of business innovation. We seek to maintain our leadership in the area of information technology for our business progress. We seek to continually strengthen our financial and human resources. We shall adhere to the fair conduct of business for our shareholders, employees and society.

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Loxley Public Company Limited


Message from the Chairman In 2010, the Thai economy was hard hit by a number of factors. Among others, political unrest, natural disasters and the adverse effects of global climate change affected the price level of consumer goods in the first half of the year while the appreciation of the Thai Baht weighed on the country’s economic performance towards the end of the year. Those challenges posed a negative impact on overall operation of business sector. Ongoing government projects, however, eased some of the pressure and helped boost, to some extent, the confidence of private investors. To deal with this uncertain economic climate, Loxley Public Company Limited (Loxley) operated its businesses with more prudence by adhering to logical business principles. However, Loxley was not immune to the above-mentioned negative factors. In 2010, the Company and its subsidiaries posted a net loss of the 138.86 million Baht on revenue of 10,413.06 million Baht. The main factor behind the loss was recognition of doubtful loans to Loxley GTECH Technology Co., Ltd., an associate company that signed an agreement to be the distributor of the three-and two-digit online lottery project for the Government Lottery Office of Thailand on July 2005. The project has been delayed with no official date set when it will begin. Loxley celebrated its 72nd anniversary as an operating business entity on 15 January 2011. Throughout the years, the Company has overcome both national and global economic crises through its unwavering commitment to operate its businesses with good governance and in an ethical manner in tandem with social responsibility. The Company plans to maintain this policy in order to achieve business sustainability. On behalf of the Board of Directors, I would like to thank our shareholders, customers, partners, business alliances, as well as the management and staff, who have supported the Company’s operations. With your solid support, the Company has been robust, prospered and contributed to national development during the past years. I am confident that the Company will go forward in the coming years due to its great potential and sound support.

(Mr. Pairote Lamsam) Chairman of the Board of Directors

Annual Report 2010

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Activities in 2010 01 Loxley Public Company Limited held the “Top Management Seminar 2010”, brainstorming ideas on the Company’s business trend and opportunities in 2010-2011. 02 Mr. Pairote Lamsam, Chairman of Loxley Public Company Limited, together with the Company’s senior executives, welcomed and entertained the business representatives from Israel, weaving good trade relations. Israeli Ambassador to Thailand, His Excellency Itzhak Shoham, graciously joined the welcoming event.

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03 Mr. Pairote Lamsam, Chairman of Loxley Public Company Limited, presided over a contract-signing ceremony appointing Loxley as master franchise of Dohtonbori Co., Ltd., owner of two Japanese restaurant brands, Dohtonbori Okonomiyaki, and Tetsumen Ramen. Both brands will soon be branched out in Thailand.

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04 Loxley Public Company Limited presented guardhouses to Tungmahamek and Tha Rua Police Station Offices for convenience in working and safeguarding. Police Major-General Chaktip Chaichinda, City Police Chief was the representative to receive the guardhouses. 05 Mr. Dhongchai Lamsam, President and Dr. Sompop Chareonkul, Executive Vice President of Loxley Public Company Limited, congratulated the new president and administrative committee of the Business Journalists Association.

06 Mr. Vasant Chatikavanij, Executive Vice President of Loxley Public Company Limited, presided over a seminar entitled “Social Network: Function or Fashion?” to creating understandings on online social network among the company’s staff.

07 To support Thai small and medium enterprise (SME) operators to do business in Vietnam, Loxley Public Company Limited joined hands with the Department of Industrial Promotion holding a signing ceremony of the “Trade Cooperation in the Socialist Republic of Vietnam” between Loxley Public Company Limited and SME operators under the Industrial Production Development project.

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Loxley Public Company Limited


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08 Law Enforcement Technology Solutions Co., Ltd., a subsidiary of Loxley was appointed by Samsung Techwin Security Solution Division Co., Ltd. of Korea and Bangkok OA Coms Co., Ltd., as main sales representative of Samsung Security closed-circuit televisions. 09 Loxley Public Company Limited organized the second Energy Conservation Project in 2010 with an attempt to instill awareness on energy use among the company’s staff. Mr. Dhongchai Lamsam, President, and Lt. Suchin Baholyodhin RTN, Executive Vice President of Loxley, joined the project’s official opening ceremony.

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10 Loxley Public Company Limited held a press conference on the company’s corporate social responsibility (CSR) project for sustainable development of the company, its employees and the society. 11 Loxley Public Company Limited, led by Executive Vice Presidents, Lt. Suchin Baholyodhin RTN and Mr. Suraphand Bhasitnirandr, together with the company’s executives and staff, humbly offered good wishes and paid homage to HM the King Bhumibol Adulyadej. 12 Loxley Public Company Limited and Loxley Trading Co., Ltd., handed over consumer goods to Bangkok Governor ML Sukhumbhand Paribatra in charity for victims of the social unrest in Bangkok. 13 Loxley Plc.’s Consumer Electronics Department led by Mr. Suroj Lamsam, Executive Vice President, held a press conference launching the “i-KooL Real 3G”, a new brand which is used to penetrate the Thai 3G telecom market. 14 Loxley Public Company Limited gave a donation to the International Red Cross Society via the Thai Red Cross Society to help the earthquake victims in Haiti. Annual Report 2010

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Financial Summary Unit : million Baht

Loxley Public Company Limited and Its Subsidiaries Item Total Revenues Net Profit (Loss) Earning (Loss) per share (Baht) Total Assets Total Liabilities Paid-up shares Share Par Value (Baht) Shareholders’ Equity Dividend per share (Baht) Dividend to Net income Ratio (%)

2010

2009 *(Restated)

2008

10,413.06 (138.86) (0.07) 9,792.86 5,558.10 2,000.00 1.00 4,234.76 N/A N/A

10,280.24 310.17 0.16 10,149.52 5,845.13 2,000.00 1.00 4,304.39 0%

10,330.83 (1,986.71) (0.99) 8,681.49 4,434.58 2,000.00 1.00 4,246.91 0%

* The adoption of Thai Accounting Standard (TAS) 19 “Employee Benefit” has been applied retrospectively, thus the audited financial statement for 2009 restated for comparative purposes. Summary of 2010 operating results of Loxley Public Company Limited and its subsidiaries : Assets : Total assets as at 31 December 2010 amounted to Baht 9,792.86 million ; a decrease of Baht 356.66 million or 3.51% under the 2009 level. Shareholders’ Equity : Shareholders’ equity as at 31 December 2010 was Baht 4,234.76 million ; a decrease of Baht 69.63 million or 1.62% under the 2009 level. Revenues : Total revenues for 2010 was Baht 10,413.06 million, representing an increase of Baht 132.82 million or 1.29% from the Baht 10,280.24 million level of 2009. Net Income (Loss) : In 2010, Loxley and its subsidiaries recorded a net loss of Baht 138.86 million and net loss Baht 310.17 million in 2009 Financial Ratio Financial ratio Net profit (loss) to total revenue Return on equity Return on total assets Earning per share (Baht) Net book value per share (Baht)

2009 31 December 2008 31 December 2010 31 December *(Restated) -1.33% -3.25% -1.39% -0.07 2.12

3.02% 7.25% 3.29% 0.16 2.15

-19.23% -45.90% -22.10% -0.99 2.12

* The adoption of Thai Accounting Standard (TAS) 19 “Employee Benefit” has been applied retrospectively, thus the audited financial statement for 2009 restated for comparative purposes.

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Loxley Public Company Limited


Company Revenue Structure Presented by Business Segment (ANNOUNCEMENT 56-2 FROM COMMITEES OF STOCK EXCHANGE OF THAILAND) COMPARED INFORMATION FOR THE SAME PERIOD ENDED 2010, 2009 AND 2008 Loxley Public Company Limited and Subsidiaries REVENUE STRUCTURE

2010

2009

2008

TOTAL % C.SIZE TOTAL % C.SIZE TOTAL % C.SIZE REVENUE REVENUE REVENUE 1. TECHNOLOGY 1.1 ICT BUSINESS GROUP 1.2 TECHNOLOGY BUSINESS GROUP 1.3 PROJECT BUSINESS GROUP 1.4 SPECIAL PROJECT GROUP 1.5 JOINT VENTURE BUSINESS GROUP

5,382.00

51.69

5,362.00

52.16

5,398.00

52.25

2,978.00 406.00 1,511.00 485.00 2.00

28.60 3.90 14.51 4.66 0.02

3,464.00 449.00 1,325.00 98.00 26.00

33.70 4.37 12.89 0.95 0.25

3,834.00 567.00 782.00 201.00 14.00

37.11 5.49 7.57 1.95 0.14

2. TRADING 2.1 TRADING BUSINESS GROUP 2.2 INTERNATIONAL BUSINESS GROUP

4,580.00

43.98

4,263.00

41.47

4,507.00

43.63

4,355.00 225.00

41.82 2.16

4,182.00 81.00

40.68 0.79

4,405.00 102.00

42.64 0.99

803.00

7.71

745.00

7.25

693.00

6.71

750.00 53.00

7.20 0.51

690.00 55.00

6.71 0.54

639.00 54.00

6.19 0.52

100.88 10,598.00

102.58

3. SERVICES AND OTHERS 3.1 SERVICE BUSINESS GROUP 3.2 FINANCE & ADMIN / OTHERS TOTAL REVENUE LESS RELATED TRANSACTION ADD UNALLOCATED OTHER REVENUE

10,765.00

GRAND TOTAL REVENUE

10,413.00

(382.00) 30.00

103.38 10,370.00 (3.67) 0.29

(204.00) 114.00

100.00 10,280.00

(1.98) 1.11

(333.00) 66.00

(3.22) 0.64

100.00 10,331.00

100.00

Annual Report 2010

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Corporate Structure

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ICT Business Group

Technology Business Group

• Telecommunication Network Dept. • Learning Media Div. • Loxley Wireless Co., Ltd. • Loxbit Plc. • Professional Computer Co., Ltd. • NetONE Network Solution Co., Ltd. • Digital Screen Play Co., Ltd.

• Consumer Electronics Dept. • Printing & Advanced Technology Dept. • Business Communication Dept. • Intelligent Communications Dept. • Data Mining Co., Ltd. • Loxley Property Development Co., Ltd.

Loxley Public Company Limited

Project Business Group

• Broadcast Dept. • Transportation Systems Dept. • Control Systems Dept. • Power Systems Dept. • Environmental Business Dept. • Power Infra Div.

Trading Business Group

• Chemical Group • Construction Materials Dept. • Upcountry Business Dept. • International Business Dept. • Parts Zone (Thailand) Co., Ltd. • Loxley Trading Co., Ltd.


Audit Committee

Board of Directors

Nominating & Remuneration Committee

Executive Board

President

Internal Audit Dept. Human Resources Dept.

Service Business Group

• Asia Security Management Co., Ltd. • Oriental Post Co., Ltd.

Advisor Finance & Administration Group Corporate Communication Dept.

Special Project Group

• Special Project Dept.

Joint Venture Business Group

• Online Lottery Dept. • L Solar 1 Co., Ltd. • BP - Castrol (Thailand) Limited • Thai Fiber Optics Co., Ltd. • Loxley GTECH Technology Co., Ltd. • Guardfire Limited • Foseco (Thailand) Limited • BlueScope Lysaght (Thailand) Limited • BlueScope Steel (Thailand) Limited • Muang Thai Insurance Plc.

Annual Report 2010

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Subsidiaries’ Organization Chart ICT Business Group Telecommunication Network Dept.

Loxley Wireless 99%

Learning Media Division IT Group

Loxbit Plc. 99%

Professional Computer 99%

L Hardware and Services 99%

Technology Business Group

Loxbit PA Plc. 99% Consumer Electronics Dept.

NetONE Network Solution 99%

Printing & Advanced Technology Dept.

Digital Screen Play 70%

Business Communication Dept.

Thai Gateway 99%

Intelligent Communications Dept.

Information Technology Business

Data Mining 99%

Property Development and Services

Loxley Property Development 59%

Project Business Group

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Broadcast Dept.

Power Systems Dept.

Transportation Systems Dept.

Environmental Business Dept.

Control Systems Dept.

Power Infra Div.

Loxley Public Company Limited


Trading Business Group Chemical Group

Construction Materials Dept.

Parts Zone (Thailand) 60%

Upcountry Business Dept.

Loxley Trading 50%

International Business Dept.

Societe Commercial Lao 67%

Service Business Group Security Services

Asia Security Management 69%

Post Production Business

Oriental Post 50%

Special Project Group Special Project Dept.

Joint Venture Business Group • Online Lottery Dept.

Jago * 99% Loxley Global 51%

• Loxley Joint and Hold 99% • L Solar 1 45% • Thai Fiber Optics 40% • Loxley GTECH Technology 35%

BP - Castrol (Thailand) 40%

• Guardfire 30% • Foseco (Thailand) 26% • BlueScope Lysaght (Thailand) 25% • BlueScope Steel (Thailand) 25%

Remark : * Not yet started principal commercial operations

• Muang Thai Insurance Plc. 5%

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Board of Directors

Mr. Pairote Lamsam Chairman

Vice Chairman

Mr. Dhongchai Lamsam President

Mr. Sirin Nimmanahaeminda Dr. Supavud Saicheua Independent Director

Independent Director

Mr. Charoon Chinalai

Mr. Poomchai Lamsam

Mr. Vasant Chatikavanij

Mr. Suraphand Bhasitnirandr

Director

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Mr. Sukit Wanglee

Loxley Public Company Limited

Director

Independent Director

Director


Dr. Harit Sutabutr

Dr. Wissanu Krea-ngam

Mr. Dusit Nontanakorn

Mr. Supachai Wanglee

Dr. Sompop Chareonkul

Mr. Suroj Lamsam

Independent Director

Independent Director

Director

Independent Director

Director

Mr. Suebtrakul Soonthornthum Director

Director

Annual Report 2010

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Executive Board

Mr. Dhongchai Lamsam

Mr. Suebtrakul Soonthornthum

Lt. Suchin Baholyodhin RTN

Dr. Jingjai Hanchanlash

President

Executive Vice President

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Loxley Public Company Limited

Senior Executive Vice President

Executive Vice President


Mr. Vasant Chatikavanij

Mr. Suraphand Bhasitnirandr

Dr. Sompop Chareonkul

Mr. Suroj Lamsam

Mr. Trichakr Tansuphasiri

Lt. Chalermchoke Lamsam

Executive Vice President

Executive Vice President

Executive Vice President

Executive Vice President

Executive Vice President

Executive Vice President

Annual Report 2010

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List of Department Management

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SENIOR VICE PRESIDENT 1. MRS. SUGANYA VEERAKIATKIJ 2. MR. TIWA CHANGPINYO 3. MR. ANUSONE RUTHAIYANONT 4. MR. THONGCHAI KONGSAKPHAISAL 5. MR. SAKCHAI VEERASAKWATTANA 6. MR. PRASERT SHUSANG (PH.D) 7. MR. NARISORN MANASPITI 8. MR. THONGYAI CHANTHANAWAN 9. MR. CHAMNAN CHOTCOMWONGSE 10. MR. SUPAT KARACHALKUL 11. MR. PRASERT SUVITHYASIRI

ADMINISTRATION & GENERAL AFFAIRS TRANSPORTATION SYSTEMS OFFICE OF THE PRESIDENT CHEMICAL INDUSTRY CHEMICAL INDUSTRY SPECIAL PROJECT ONLINE LOTTERY BUSINESS COMMUNICATION INTERNAL AUDIT FINANCIAL MANAGEMENT INTERNATIONAL BUSINESS

VICE PRESIDENT 1. MR. WIROTE LIMPANAWATTANAKUL 2. MR. KOMSON RUNGRUENSORAKARN 3. MISS PATRA LAOHAPOLWATANA 4. MR. TIM TAK TIMMOTHY WONG 5. MISS NALINEE BIJAISORADAT 6. MISS SARIPORN PRUKSATHORN 7. MR. SUTON RAKPRATHED 8. MR. SONGPOL KRITSANAPAN 9. MR. PATTARA POJANAPANICH 10. MISS PIYAPORN CHATUPARISOOT 11. MR. NIMIT PRASERTSUK 12. MR. SANIT RATANAVADI 13. MR. DAWARIT TANSUPHASIRI (PH.D) 14. MR. ANUCHA DUNGSIRISANGTHONG 15. MRS. SUPHATTRA BUSARAKUL 16. MR. ARTHASITH KATANYUTANON 17. MR. PICHAI MOOPUTTARAK 18. MR. NATTAPON DEJVITAK 19. MR. KITTICHAI RAKTAKANIT

TRANSPORTATION SYSTEMS CORPORATE COMMUNICATION INTERNATIONAL LEGAL AFFAIRS BUSINESS COMMUNICATION INFORMATION SYSTEMS ACCOUNTING MANAGEMENT BROADCAST CONTROL SYSTEMS BROADCAST ONLINE LOTTERY POWER SYSTEMS CONSTRUCTION MATERIALS HUMAN RESOURCES CHEMICAL INDUSTRY PRINTING & ADVANCED TECHNOLOGY SPECIAL PROJECT LEGAL & SECURITIES TRADING BUSINESS GROUP’S ADMINISTRATION GREEN SOLUTION

ASSISTANT VICE PRESIDENT 1. MR. TAWEEWAT TACHAKUMTORNKIT 2. MR. WERASAK PATTARAPAKORN 3. MR. WICHAN WITOONKITWANICH 4. MRS. SUDKANUENG MALITHONG 5. MISS MALINEE SAHAVONGJAROEN 6. MRS. KRUARMAS PUWATTANAVANICH 7. MRS. WANIDA SANGKAEW 8. MRS. THAVEERATANA LEELANUJA

ENVIRONMENTAL BUSINESS TRANSPORTATION SYSTEMS CHEMICAL INDUSTRY OFFICE OF THE PRESIDENT ACCOUNTING MANAGEMENT FINANCE & CREDIT CONSUMER ELECTRONICS CORPORATE SOCIAL RESPONSIBILITY

Loxley Public Company Limited


Directors in the Subsidiaries Directly Owned by Loxley LOXLEY WIRELESS CO., LTD. 1. MR. DHONGCHAI LAMSAM 2. MR. VASANT CHATIKAVANIJ 3. LT. CHALERMCHOKE LAMSAM 4. MR. THONGYAI CHANTHANAWAN (MD) 5. MR. TIM TAK TIMMOTHY WONG 6. MR. WERACHAI KITSIRISIN LOXBIT PLC. 1. MR. VASANT CHATIKAVANIJ 2. MR. SAKNARONG SAENGSANGAPONG (MD) 3. MRS. VANIDA VIRIYATHARANGKUNR 4. MR. TIM TAK TIMMOTHY WONG 5. MRS. PUANGKAEW POJANAPANICH 6. MR. THAVISAKDI THANGSUPHANICH 7. MR. KITTICHAI RAKTAKANIT 8. MRS. VONGTHIP CHUMPANI ASIA SECURITY MANAGEMENT CO., LTD. 1. MR. DHONGCHAI LAMSAM 2. MR. SUEBTRAKUL SOONTHORNTHUM 3. MR. CHUSAK BHACHAIYUD 4. ADM. TAVEECHAI LIENGPHIBOON 5. AM. ADIREG SASTARARUCHI 6. DR. SOMPOP CHAREONKUL 7. MR. KARN THONGYAI (MD) 8. MR. SUPAT KARACHALKUL 9. MR. ZAMIR ELDAR 10. MR. SHAI MEIRAV 11. MR. EHUD HERBST 12. MISS OSNAT LEVAV LOXLEY PROPERTY DEVELOPMENT CO., LTD. 1. MR. PAIROTE LAMSAM 2. MR. DHONGCHAI LAMSAM 3. MR. SUEBTRAKUL SOONTHORNTHUM 4. MR. VASANT CHATIKAVANIJ 5. MR. SURAPHAND BHASITNIRANDR 6. MR. SUROJ LAMSAM (MD) 7. LT. CHALERMCHOKE LAMSAM 8. MRS. SUGANYA VEERAKIATKIJ

LOXLEY TRADING CO., LTD. 1. KHUNYING CHATCHANI CHATIKAVANIJ 2. MR. PAIROTE LAMSAM 3. MR. SUPHOT WANGLEE 4. MR. DHONGCHAI LAMSAM 5. MR. SUEBTRAKUL SOONTHORNTHUM 6. DR. SOMPOP CHAREONKUL 7. MR. SURAPHAND BHASITNIRANDR 8. MR. PHEAT WANGLEE 9. MRS. KOSOOM SINPHURMSUKSKUL (MD) PROFESSIONAL COMPUTER CO., LTD. 1. MR. SAKNARONG SAENGSANGAPONG (MD) 2. MR. PORNRAPEE ABHAKORN 3. MRS. VANIDA VIRIYATHARANGKUNR 4. MISS KAMOLTHORN MALAVICHAI PARTS ZONE (THAILAND) CO., LTD. 1. MR. SURAPHAND BHASITNIRANDR 2. MR. GRAHAM STORAH 3. MR. WACHIRA YONGYAI (MD) 4. MR. KEATTISAK IAMSRI 5. MR. PONGTHEP SURATTANAVONGKUL 6. MR. VICHAI PHANCHET 7. MRS. NATAKON SA-NGUANSIN DATA MINING CO., LTD. 1. MR. DHONGCHAI LAMSAM 2. MR. SUEBTRAKUL SOONTHORNTHUM 3. MR. VASANT CHATIKAVANIJ 4. MR. SUROJ LAMSAM 5. MRS. SUGANYA VEERAKIATKIJ 6. MRS. SUDKANUENG MALITHONG SOCIETE COMMERCIAL LAO CO., LTD. 1. MR. SUEBTRAKUL SOONTHORNTHUM 2. DR. SOMPOP CHAREONKUL 3. DR. JINGJAI HANCHANLASH 4. MRS. VANIDA EKSAENGSRI 5. MR. VIPHET SIHACHAKR 6. MRS. SANGMANEE VIYAGATE Annual Report 2010

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ICT Business Group Introduction The Group has been separated into 2 business divisions, i.e., Telecommunications, and Computer products, where the Telecommunications Business Division is responsible for complete telecommunications infrastructure services, telecommunications equipment distribution, and wireless broadband internet services, while the Computer Business Division is responsible for fiffiinancial and banking services, IT, and computer services. With rapid innovation development of communication, telecommunication equipment and computers, there are constant changes of customer demands. The Group has always strived to be a leader in ICT business by creating business relations with international technology owners. In addition, to build up customers’ confiffiidence in the company’s products and services, the Group has also developed a team of experts who are well certififfiified in particular fiffiields. Telecommunication Network Department Scope of Products or Services The Department distributes products and provides services in site survey, system design, procurement, installation, test, commissioning and warranty for large scale telecommunication systems including fiffiifiber optic, microwave, satellite earth station, base station systems for mobile phones

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Loxley Public Company Limited

and van. The Department provides high quality imported and local products that meet customers’ requirements. In addition, the Department also acts as a distributor and installation & maintenance service provider for NEC LG-Ericsson and Alcatel. Market and Competition The competition in this business is quite high and has tendency to be more serious because of the government e-Auction regulations. The Department concentrates on tendering projects which some competitors are foreign suppliers. The Department emphasizes on service quality by providing suitable products which meet customers’ business and requirements, including an effective on time delivery even when the expenditure cost is a factor. The Department’s main customers include state enterprises and the government sector. Its telephone systems or internal communication systems for medium-size organizations markets are hotel businesses, banking, other organizations excluding government entities, and supply chain businesses. The Department’s solid reputation, highly-valuable expertise, dedicated customer loyalty and trust, and lengthy business occupancy contribute towards our success and sustainable competitive position. Ongoing Projects and Future Plans Ongoing projects of the department include implementations of Portable Satellite System of the Royal Thai Army, and Fiber Optic Network of the Offiffiifice of the Higher Education Commission.


The Department has strived to ffiifind new alliances, both providers and distributors of telecommunication networks and equipments who offer the right prices and technologies to meet customers’ requirement. We have plans to participate in tenders for major projects of the government, state-enterprises, telecommunication network providers, and large corporations who wish to have their own networks. Learning Media Division Scope of Products or Services The Division has operated in the ICT training business whose courses of training have been designed and customized to ffiifit with specififfiific groups and can be applied in actual application. Beside the regular ICT training courses, “Train-the-Trainer in ICT” also provided to government and private sectors. In addition, the division arranges seminars for government and private organizations covering all level of customers including children, youth, students, government agents, private employees, and retirees, as well as computer facility rental to subsidiaries and other organizations. The Division also administered the Old People Playing Young (OPPY) Club who has offered ICT training for its members since 2000 with over 3,800 members as well as other fun activities, e.g., sightseeing, invention, arts, etc. Other than those training courses, the Division has also emphasized on putting highly potential personnel with teaching experience into the coursework with modern software and hardware training facilities. Market and Competition In general ICT training under highly competitive market, the service provider has to compete in both quality and price while the market for ICT training course for the elderly and senior executives is less competitive where the Division is focusing on. However, others competitor that the Division may have to pay attention to is social activities and health care activities for senior citizens which have a high impact on living style of these target group. The Division has advertised via various media, e.g., newspapers, magazines, radio, television, and past customers, who may also introduce new customers, when the new training courses are arranged. Additionally, it also publicizes new training courses and activities through strategic partners, e.g., Muang Thai Smile Club of Muang Thai Life Insurance and other business sector related to health care activities.

Future Plans and Projects The Division has planned to expand its elder customer base through strategic partnership with state and private enterprises, e.g., ICT training for Thai citizen and vulnerable group including child, physical disability and elderly. Train-theTrainer in ICT subjects also provided to government and private sector. Besides ICT training, the division plan will be involved in research and development e-Learning and e-Portfolio system with related BU in ICT group. Loxley Wireless Company Limited Scope of Products or Services The Company is a subsidiary of Loxley Public Company Limited focusing in Telecommunication Business offerings which can be categorized into four major business functional groups as following: Telecom Product: Key Reseller and System Integrator of Aastra PABX Enterprise Products (former name, “Ericsson PABX”) and Huawei Technologies Telecom (DWDM & SDH) products; with complete after-sales services like system installation and maintenance. Wireless Broadband Solution & Products: Sole Distributor of Motorola MotoWi4 product lines including Canopy, WiMAX, Wi-Fi mesh and broadband Over Power Line. The company also specializes in wireless transmission solutions and services such as Free Space Object (FSO), Radio Frequency Repeaters (RF Repeater) and Microwave. Professional Service: Full suite of related professional services such as Project Management, Engineering Services, RF Design, Outsourcing Services and Certified Network-Quality Improvement for Cellular Network using various techniques such as network optimization to improve service quality, hole ffiifill to improve coverage, Repeater, Multi-carrier power amplif ication and in-building coverage to serve indoor customers. The Company carefully selects its partners and vendors as well as highly-skilled & experienced staffs for each speciffiific project. These are the main pivotal support for our position in the market place today; developing substantial customer base from our fiffiifield-proven products and services that meet customers’ requirements. Wireless Internet Service Provider (WISP): Being one of licensed broadband wireless 3G internet service providers, targeting at medium-sized organizations.

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Market and Competition We are committed to providing products and services to perfectly meet customer needs with around-the-clock before and after-sale services. The majority of our customers are governmental and private organizations. Our distribution channels include direct sales, dealers, and contractors. We also approach customers via direct bidding and joint bidding. Our experiences and accountability excel us through the tough competition. We are also valued in continuous product and service quality improvement which always help us sustain our business growth and competitiveness till the present. Good relationships with satisffiiefi d customers grow our customer base continuously since the company’s inception. Ongoing Projects and Future Plans The Company’s ongoing projects include the DWDM system expansion and access networks for the CAT Telecom Public Company Limited and equipment procurement for the TOT Public Company Limited’s internet gateway. We are determined to operating business that yields best results, working on expandable and lucrative projects which also benefiffiifit the general public and the nation with fast and effiffiificient customer services. In the near future, we aim to be part of TOT Public Company Limited’s expansion of 3G mobile network development project. Loxbit Public Company Limited Scope of Products or Services The Company is a system integrator in Information Technology and Telecommunications field focusing on transaction automation, interactive voice response systems, electronic payment systems, automated teller machine systems, large computer equipment, Information Technology for banking applications and regulatory complaints such as risk management, Basel II and IFRS, broadband technology, and the payphone business. The Company provides procurement, installation and maintenance services. Due to the rapid change of products both in IT and telecommunication fields, the Company products must be met international standards and compliant. Its team should be authorized from manufacturers to handle and offer services in addition to performing as a distributor. This should provide value-added services to its customers.

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Market and Competitive The Company’s prospects include banking, fif inance, and telecommunication businesses which are service providers and network owners in the government sector, state enterprise, and the private sector. Competition in this business fiffiifield is intense due to rapid changes in technology and customer requirements including the new international standards regulations and rules for banking and ffi ifi nfi ancial industries. The products’ specifififi cfi ations and models must therefore be continuously updated in order to meet and exceed market expectations. Loxbit has more advantages over its competitors due to its wide range of technical expertise ranging from qualififfiified technicians to highly effective engineers and business advisors to experience application development programmers. Its welldefiffiifined organization enables itself to respond to customers’ requirements swiftly. Moreover, the Company’s emphasis on suitable solutions and providing additional after-sales service continuously gains customers’ confiffiifidence and product loyalty. Ongoing Projects and Future Plans The Company has new platform of IVR, EDC and ATM installation projects for banks. Loxbit aims at becoming the one-stop shopping company which provides all necessary equipment and procedures for prospective and existing customers. Loxbit plans to provide services in data management for organization security, risk management and IFRS for banking and fiffiifinancial institutes. The new technology for Interactive Voice Response System that allows multiple protocols of communications in one single generic platform will give the users access to it by their own convenience channels and make the providers a lot easier to maintain and manage. The replacement project for new EDC model that support GPRS is another ongoing project. Professional Computer Company Limited Scope of Products or Services The Company offers total IT solution services including distributing, renting, and maintaining computer hardware, software, network and site preparation. It also offers consultancy services in Information Technology and computer center management through its professional and highly qualififfiified staff. It is a founder member of The Association of Thai Software Industry (ATSI), Software Industry Club of The Federation of


Thai Industries and receives quality standards of ISO 9001:2008 from MASCI, CMM standard level 2, ISO 29110 (The Foundation of innovate and develop Institute) and other awards including IBM BEACON Award (2003). Moreover, the Company has been granted certifififi cfi ation for the Maturity Model for Software (SW-CMM) Level 2 which was a world-wide software development standard in 2005. The Company also emphasizes upgrading its software development team to CMM level 2 and its IT Outsourcing team to Information Technology Infrastructure Library (ITIL) Certififications. Presently, the Company’s staffs have completed more than 100 certififfiifications within the IT ffiifield. Market and Competition Despite last year’s political conditions which have affected the Company’s business through the delays in purchases, Government IT budget decrease. Besides, the Company still emphasizes offering standardized solutions and services and reasonable prices. The Company has policies that emphasize controlling product costs, delivery, including eff icient management and continuously emphasizing employee professional development. The Company also selects products from manufacturers with quality standards such as IBM, HP, CISCO, Oracle, and Microsoft. Its prospective customers include the government sector, state enterprises, telecommunication businesses, healthcare businesses, and banking businesses. It offers services through delegated distributors and sales representatives. Ongoing Projects and Future Plans Projects to be delivered are : Krung Thai Computer Services Company Limited, Fund for Student Loan’s Project, Offiffiifice of the Permanent Secretary for the Ministry of Interior, projects for the Comptroller General’s Department, and the Revenue Department. In the future, the Company will target network expansion projects, virtualization, security system installation projects, web portal projects, and e-Procurement projects (Phase II) in order to expand its business offerings and services to existing and potential customers.

NetONE Network Solution Company Limited Scope of Products or Services The Company’s role is that of a data communication system integrator. Its business covers modern convergence of network equipment and computer infrastructure, design, implementation and operation for mission critical business networks. The Company specializes in convergence of voice, video and data through the Internet network. Its main customer groups range from SME businesses to large business enterprises with Internet broadband connectivity.The Company enjoys long-term partnership with the world’s leading equipment and solution providers such as Cisco System Inc., F5 Network, Blue Coat and Microsoft. The Company focuses on maintaining highest quality for its products and services. Market and Competition The continuous development of Internet technologies in Thailand continues to enhance sales and service channels. In addition, the varieties of effective and highly secure services which fulfiffiifill customers’ business needs encourage them to request for the company’s products and services consistently. Ongoing Projects and Future Plans The Company’s existing projects include University Networks and other mission critical Network and Desktop outsourcing services. The direction for future development will focus on expanding outsourcing services while concentrating on security and network management because of highly expected demands in this market. Moreover, the Company encourages its engineers to attend training in order to achieve up-to-standard international certififfiifications. It also provides internal network laboratories for engineers to research and test work procedures. The Company has training plans in sales and management, and it also focuses on building solidarity and teamwork consistently.

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Digital Screen Play Company Limited

Mobile Innovation Company Limited

Scope of Products or Services The Company is a subsidiary of NetONE Network Solution Co., Ltd. and its main business focuses on e-Education. It holds a contract with Rajabhat Pranakorn University to provide a one-stop service for students’ Internet and e-Education platform, which can virtually be accessed from the internet. The company has maintained a team of multimedia and technical experts at the University for more than 5 years. Moreover, the Company provides servers and communication equipment to more than 3 campuses connected through a high speed broadband network with complete security and network management.

Scope of Products or Services The Company provides Thailand’s ffiifirst Real Time Fleet Management System services as an Application Service Provider (ASP) entitled Fleet Expert. This tracing and tracking technology combines GSM communication networks, GPS Satellites (Global Positioning System) and Digital Vector Map technologies to enable call center monitoring of accurate co-ordinates of flffileet, text based flfiffileet positions and information on existing conditions. The system permits authorized staff to monitor ffl lfi eets’ movements, drivers’ behaviors, vehicles’ status, with details reports for vehicle management such as Safety & Economical Driving Report, Trip Management Report etc. as well as to interactively communicate (2-way communication) to the drivers directly from the control center.

Market and Competition The strength of the Company lies in its varied, highly skillful and experienced personnel who handle services both in e-Education and Network ‘know-how’ to the fullest extent. Despite a severe competition within this industry, the customers’ dedication and trust to the Company’s services have assisted in its sustained competitive advantage within the industry. Ongoing Projects and Future Plans The Company has won an extension of the contract for nd 2 phase with Rajabhat Pranakorn University for an other 5 years starting 2007. The Company has focused on developing systems that serve universities and organizations supporting the government e-Education initiative. In 2007, the Company installed Wi-Fi outlets on the University’s campus in order to support wireless connectivity for registered students and teachers.

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Market and Competition Its competitive strategy is focused not only on good-quality services and provision of reliable and constant services to clients, but also on appropriate and reasonable pricing. Work will, therefore, be based on and follow the direction of its clients’ requirements with a clientele base both in the private and public sectors. Its target clients range from entities which have a number of cars, such as logistics companies and retailers. Market competition focuses on pricing and various service strategy offerings. Future Plans The Company focuses on providing management services and location monitoring systems for every category of logistics businesses including private vehicles and will be expanding its operations to neighboring countries with accessibility to GSM telephone signals. The company will increasingly invest on procuring equipment and upgrading its various technologies to achieve better operational efffiificiency which should effectively meet and exceed its clients’ demands and expectations.


Technology Business Group Introduction The Group has been separated into 3 business divisions, i.e., Printing and Information Business, Consumer Electronics, and Real Estate & Services. Since 2010, the trend in using 3G mobile phone has rapidly gained momentum. The Technology Business Group has earned additional revenues from selling airtime for 3G mobile phone services and these revenues are expected to rise constantly. And, the Group has strived to expand services relating to other businesses of the Group, including advanced printing technology, and seeking real estate opportunities in other provinces, in order to earn continuous incomes. Consumer Electronics Department Scope of Products or Services The Department is the distributor of Sony Ericsson mobile phones and is appointed by the Sony Ericsson to set up an after-sale service center. Also, the Department is appointed by the Motorola to operate after-sale service. In addition, the Department was nominated by TOT (Public) Co., Ltd. to provide 3G mobile service as a Mobile Virtual Network Operator (MVNO) where the Company has received Type I License from the National Telecommunications Commission (NTC) in order to provide 3G mobile resale service under “i-KooL Real 3G” brand thus secure additional airtime revenue stream in the long run.

Market and Competition Currently, Mobile Business is facing technological juncture where data communications speed is key as well as higher variety of entertainment applications, e.g., video and music streaming, games, etc. As a result, 3G service with higher performance in data communications would create a new revenue stream from airtime for the Department as an MVNO where it plans to focus on data services rather than voice services, specififfiifically for corporate uses and data users. The Department has regularly organized marketing activities for greater customer base while keeping the existing customers of the i-KooL Real 3G. So far, the marketing has been successful as the number of the i-KooL Real 3G customers ranked number two among the TOT’s MVNO products. Future Plans and Projects The Department has planned for wider distribution of 3G simcards and accessories by presenting diverse applications to suit all user groups. Suitable packages of the i-KooL Real 3G are offered for maximum uses in different types of organizations. One of the Company’s unique strategies is to provide complete information for users to make the most use of 3G.

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Printing & Advanced Technology Department Scope of Products or Services The Department is the importer of Kodak Versamark Digital Variable Inkjet Printers from the USA, Miyakoshi Offset Printers from Japan, and small-sized Inkjet Printers. In addition to printers, the Department is also a distributor of inks, printing spare parts and equipment, while at the time providing printing consultancy and after-sale services. Among its customers are governmental and private organizations. Market and Competition Due to changes of market demands from black and white to color printing as seen on credit card and telephone invoices, the Department’s products can answer the need perfectly. Although printers that offer color-interchangeable feature are available in the market, their prices are higher. Future Plans and Projects The Department has planned to expand the market of Digital Variable Inkjet and color digital printers and to offer a more comprehensive range of printing products to private organizations. Business Communication Department Scope of Products or Services The Department is a communication system products and services provider for both state and private organizations. The products and services include Voice Network, Voice Over IP, Data Network, Wireless Access Point, Contact Center, and Total ICT Solution. At present the Department distributes products and services of world-class companies, including AVAYA, ARUBA, and Audio Code. Most of the products and services are imported with distributing licenses. Only a few specififfiific products are ordered directly from distributors for turn-key projects. Market and Competition During this era of digital technologies, both government and private sectors have increasing demands for the latest technologies in order to increase their competitiveness and effectiveness in the marketplace. Despite f ierce competition in terms of price and service among domestic and

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international companies, the Department has had an advantage on having a large base of customers who have trusts on the company’s good service and product quality, thanks to its 25-year experience. This has contributed to the Department’s good performance over the years. Additionally, the Department has incessantly focused on personnel development. To enhance the employees’ skills and working effectiveness, all of the employees at all levels have been given opportunities to be trained in related fiffiifields in national and international institutes on a regular basis. Ongoing Projects and Future Plans Currently, the Department’s ongoing projects include call center and IPPBX system improvement for Muang Thai Life Insurance Company’s Nakornpathom and Chonburi branches; IPPBX system procurement for Nakornluang Concrete Public Company Limited; telephone network system improvement for Sukhothai Thammathirat University and telephone system improvement for leading hotels including the Four Wings Hotel, Srinakarind; and the Bangkok Palace Hotel. In the future, the Department plans to bid more projects of governmental, state enterprise, and private organizations, which include Multi-Channel Contact Center projects, Data Networks and Wireless Networks projects, and Unififfiified Communications projects. Intelligent Communications Department Scope of Products or Services The Department has provided consultation and development in RFID technology for various applications with analysis and design of RFID solutions specififfiifically for different industrial customers, e.g., Logistics & Supply Chain Management, Process Management, Service and Security, Farming and Livestock, Traceability, Intelligent Library Management, RFID Hardware distribution, RFID and Bar Code reading equipment. The Department has become an offificial partner with leading RFID manufacturers, e.g., Motorola-Symbol, 3M, and Silicon Craft. Market and Competition Currently RFID technology is being utilized in order to ensure accuracy in business operation and cost reduction as key business strength. RFID standard has also been commonly


used among businesses resulting in rapid transformation in domestic business operation to seriously utilize RFID technology and creating new RFID businesses as a result. The Department has aimed to be a leader in applying effective RFID technology to suit different customer needs and to reduce operation risks. In the mean time the Department is also focusing in testing, development, and consultation in troubleshooting the RFID application processes. As recorded, the Department provided the Traceability system for Kampangsaen Cows in the Kampangsaen Cow Breeder Cooperative, Kasetsart University making the Department to become the fiffiifirst to develop a complete RFID system in livestock traceability process in Thailand. Future Plans Since the Radio Frequency Identification (RFID) technology has been increasingly interesting and well perceived during the past years, the Department has offered RFID applications, including installation procedure, and tag and reader products to increase process effiffiificiency and meet customer demands in various fiffiifields during the research and development stage, e.g., RFID in Logistics, inventory management and distribution, manufacturing application development, document tracking, traceability system for industrial and agricultural sectors, RFID applications in livestock control and registration, and breeding improvement in conjunction with leading public universities and several related private entities. Data Mining Co., Ltd. Scope of Products or Services The Company has been operated in information technology business, computer system and accessory distribution, and related processing systems, e.g., specififfiific application and data processing software, and system integration from core systems to complicated process design solutions to meet customer needs.

Market and Competition The Company’s major customers are law enforcement entities, anticorruption agencies in both government and private sectors where vital fiffiifinancial information is required for investigation to prevent money laundering and abusive terrorist activities. Future Plans and Projects The Company has planned to expand the business to cover state organizations by offering computer system installation service in addition to ffiifinancial protection and crime control. Loxley Property Development Co., Ltd. Scope of Products or Services The Company’s real estate business can be divided into two parts: real estate development and real estate management. On the real estate development, the Company has studied the feasibilities of real estate investment by analyzing information and making summary reports to ease customers’ decision making. On the real estate management part, the Company has offered offiffiificial space rentals, advertising space rentals, cleaning services and a comprehensive range of services for offiffiifice building maintenances. Operation Performance and Future Plans In 2010, the Company studied the feasibility of real estate investment in Bangkok and many other provinces including Patumthani and Prachaubkirikan and found that there are many interesting projects that are expected to continuously benefiffiifit the Company. As for real estate management, the Company has focused on customer base expansion, constant development of service standard, and staff training.

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Project Business Group Introduction The Group is responsible for utility services, e.g., television and radio, transportation, power, electricity, water and waste management systems, by winning the auctions offered by the government, state enterprises, and private entities in Thailand and abroad including survey, design, installation, and implementation according to customer’s specifications as well as providing after-sales maintenance services and project consultation. Development of infrastructure and public utilities are projects on which the government needs to place much emphasis. As an expert with long-standing experience in governmental and state enterprise’s project developers, the Project Business Group has had various ongoing projects during the past year. Among the projects are communications network projects, transportation projects, power and control systems projects, and water management projects. Organizations under the Group have also earned trusts to operate high voltage transmission lines in neighboring countries. Broadcast Department Scope of Products or Services The Broadcast Department operates as representative or authorized dealer of Television and Radio transmitter equipment also other equipment associated with television and radio broadcasting system such as Studio. The Department also operates as System Integrator for large biding projects. This includes designing, installation and construction of radio or television stations for government agencies, state enterprises agencies

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and private organization. The Department also cooperates with various agencies in providing technology, experimental and testing of digital television broadcast in Thailand. Most of the Radio and Television broadcasting products are technology products which are needed to be imported from other countries such as United States, Japan and European countries. However, some equipment can be manufactured and supply local suppliers. Marketing and Competition According to the National Radio and Television Broadcasting Act of Thailand latest version, there is the possibility to move broadcasting technology to Digital Broadcasting. This will increase the broadcast capability from 1 program to 4-6 programs. This will help stimulate the customers to expand their business by changing to new technology. Therefore, the potential in this business is still vast in future. Our customers comprises of government sector, state enterprises and private sector including Radio and Television broadcasting business, such as the Public Relations Department, Royal Thai Army Radio and Television, MCOT Public Company Limited, Parliament Radio and Television Station, Military Development Offiffiifice and others. Ongoing Projects and Future Plans Broadcast Department has projects which are under implementation and has plan to deliver in 2011, those are the Procurement of Television Transmitter of Television Thailand, Public Relations Department, The procurement of Radio Transmitter of Offiffiifice of Secretary of the Parliament, the Procurement of Radio Transmitter of Army Signal Department,


the Improvement of Television Transmitter of Army Television, the Studio and Transmitter Equipment Upgrade of central radio transmission room of MCOT. In future, the Department plans to expand its market in terms of products and services. Setup, installation and consultant for Digital Television Trial with Army Television. The Department is currently do the research for new product and support focusing on the digital broadcasting technology, telecommunication and IT-based products, as well as searching for the possibility to for joint ventured with other private sectors. Transportation Systems Department Scope of Products or Services The Department provides services as a System Integrator in electro mechanics, E&M works including Railway Signaling System, Intelligent Traffiffiific System, Toll Collection and Traffiffiific Control Systems. Most products are imported, customized software and integrated into a system for customers. The Department emphasizes the use of environment friendly equipment. Market and Competition All government policies, which emphasize infrastructure development, especially road and railway transportation systems, have provided the Department with good business opportunities. The Department has undertaken projects for responsible authorities such as the State Railways of Thailand and the Expressway and Rapid Authority of Thailand (ETA). The Department has partnered with well-known international corporations (particularly European companies) which offer high quality technologies at reasonable prices. Since the Department’s product offerings require specialized skills and expertise, competition in this market has not been intense. Future Plans The Department consistently follows up on government-related plans and policies on transportation system developments, while continuously seeking out new business opportunities. Control Systems Department Scope of Products or Services The department provides the engineering and integration services in Automation control system and long-distances wide-area control system (Supervisory Control and Data Acquisition, SCADA) and Telemetry system for mega-sized public utilities and enterprises. The provided service is based on the total-solution and turn-key basis. Its business alliances are technology owners of the Control system and SCADA system which cover wide range of product,

technology and applications. Thus, the Department can fulffiilfi l to the client’s needs and expectation. Market and Competition Although, the service and market of the Department are special and limited, there is a high competition. The Department’s Strategy and Records are that we are only local Control and SCADA system service provider, especially for the mega-sized projects which will require sophisticated technology and project management experiences. Tendering is the only distribution/sale channel. However, the Department is approaching the key customers in becoming their long-term approved vendors. Ongoing Projects and Future Plan Projects to be delivered in 2011 include the telemetry system for ffl filood forecasting of Mae Klong river basin for the Royal Irrigation Department, and Dispatcher Training Simulator (DTS) for the Metropolitan Electricity Authority. Power Systems Department Scope of Products or Services The Department is engaged in business related to the power systems for both public and private sectors. Work under its mandate consists of system integration spanning a range of activities including engineering, design, product procurement, construction, and project management so as to meet customer requirements. Examples of activities include: Construction and Renovation of Electrical Substations, Construction of Electrical Transmission and Distribution Line Systems, Construction of Underground Cables, Construction of Submarine Cables, Procurement and Installation of Electrical Substation Control Systems, Solar Electricity Generating Systems, Factory Electricity Systems, Building Electricity Systems as well as other electrical system-related activities such as maintenance, system testing and consultancy services. The Department has good working relations with business allies who are domestically and internationally reputable manufacturers and distributors. With such cooperation from its various business partners, our solutions can be ffl filexible and most suitable to meet our customers’ requirements and expectations. Market and Competition The government has continued to invest in expanding the electrical and power distribution systems since they represent major factors for the country’s development and people’s quality of living. Additionally, the private sector has shown greater interest for investments in electrical and power systems-hence, reason for numerous business opportunities. Moreover, the Annual Report 2010

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Department’s experience in this specialized business, its recent undertaking to introduce a quality service policy, and its highly experienced staffs have all contributed to the Department’s valuable reputation, status, and business potential. Our current key customers include the Provincial Electricity Authority of Thailand, the Metropolitan Electricity Authority, and the Electricity Generating Authority of Thailand. The Department offers services by submitting tenders as well as through direct selling to its prospects as a main contractor or sub-contractor. The system design, product procurement, and effective project management are the key areas of our expertise. Ongoing Projects and Future Plans Projects under implementation including: 1. Construction of Transmission Substations of the Provincial Electricity Authority - 115-22 KV Conventional system: four substations in the central area, SF6 Gas Insulated Switchgear: two substations in the central area, and Compact Switchgear: two substations in the northern area. - 115-33 KV Compact Switchgear: one substation in the southern area. 2. Improvement of the Provincial Electricity Authority’s Computer-Based Substation Control System in 12 substations in the central area. 3. Procurement and installation of Field Device Interfaces for the Provincial Electricity Authority in the southern area. The Department plans to solidify its reputation in Electrical Systems’ procurement and installations, and in other power related activities such as energy replacement and management. The Department also plans to become a distributor of a full range of electrical and energy equipment so as to provide full coverage of power-related activities. In addition, the Department plans to expand its business more into the private sector which has business in energy ffi fiifield and industrial estates because these groups have tendency to increase investment continuously and issue many new projects. Environmental Business Department Scope of Products or Services The Department provides environment-related activities including environmental balance, waste or contamination resuscitation, especially in water supply businesses, wastewater treatment, hazardous waste treatment and waste to energy. It provides consultation services on technical management including installation design, sale, installation and system maintenance services, which benefit the public. The Department selects highly experienced partners, manufacturers, and

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distributors by applying analytical and comparative procedures on their competencies in order to meet the market’s demands and customers’ requirements, consistently. Market and Competition At the current market situation, competition in this market is very competitive and expected to be at a highly intense level; the Department concentrates on developing good relationships with its customers so as to maintain its solid customer base. Moreover, the Department partakes in small to medium size projects so as to expand its market coverage and increase marketing activities and performances by utilizing its skillful engineers and its contemporary technologies. The Department utilizes its direct approach strategies with customers in both the public and private sectors. Future Plans The Department plans to focus on all environmentally related projects, in particularly in water supply businesses, wastewater treatment, hazardous waste treatment and waste to energy, including: concession projects of Water Supply Systems, Desalination projects, Construction of medium-size water treatment plants, Water Reuse System Projects, Operation and maintenance of Water & Waste Water Treatment System Projects, Wastewater treatment system projects for communities and industries, and other related projects. Power Infra Division Scope of Products or Services The Division procures, imports and installs high voltage transmission lines as well as offers other products to meet the clients’ requirements. It imports main equipment on a complete set basis and has other equipment produced domestically so as to provide integration services to its clients. Market and Competition Its main prospective customers include state enterprises such as the Electricity Generating Authority of Thailand and others. The Division contacts prospects directly and offers quality products and services - with its high technical skilled personnel - at reasonable prices. This has granted the Division additional advantages over its competitors. Future Plans The Division plans to expand to regional markets and other markets in neighboring countries.


Trading Business Group Introduction The Group engages in manufacturing and distribution of consumer, industrial chemical, computer, and telecommunications equipment products for education as well as distribution of construction equipment, tools, and services plus automobile services and other specialized procurement that meet customers’ requirements. In 2010, the Group used many strategies to strengthen business operation by meticulously selecting products and services to suit particular customer needs, expanding business alliance networks, and increasing distribution channels to cover both domestic and international markets, especially those in neighboring countries. Additionally, the Group has developed new businesses, and added new products and services for greater diversity of trading businesses. Chemical Industrial Group The Group is divided into Sales and Marketing Department, Marketing Services and Logistics Department and Green Natural Products Co., Ltd. where supplies natural ingredient as kaffir lime essence . Scope of Products or Services Chemical Group is the chemical products distributor for in-house and overseas manufacturers. The products are provided to domestic industries such as cosmetics, ceramic & glass, paint & ink, chemicals manufacturers, electroplating, food & pharma,

feed & farm, lubricant, petrochemicals, rubber & plastics, textile, agrochemical, cleaning and others. Moreover, we exports local chemical products and imports other chemical which are treated as value-added products under our own brands especially, cleaning commodities. Furthermore, we also provide contracted manufacturing services and product formula development services to its contractors. Our group directly distributes the commodities to both manufacturing factories and through its distributors. The Department’s solid and long reputation, its good suppliers, and the highest quality of its products have all contributed to its well-competitive position within the market and among its customers. Group has not only searching for environmental friendly HighTechnology as Green Products but also looking for products which met international standard for instance REACH regulation to respond to environmental friendly policy. Market and Competition As most of our products are imported, the main factors which affect the cost and sales price setting are the exchange rate, the transportation cost including the f luctuation of fuel price. As the factors mentioned, our group has strictly policy to control and manage all risk especially exchange rate and logistics to make the best efficiency. However, our group is characterized by its experienced sales teams and executives, long term business expertise, good service management, and its solid reputation within the industry. Its strategic practices are well-grounded in pre and Annual Report 2010

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after-sales services and its product offerings are well selected to meet customers’ satisfaction and expectation. Future Plans The Group plans to become a direct manufacturer in order to ensure its sales team has enough product varieties. Construction Materials Department Scope of Products or Services The Department functions from acquiring, marketing through servicing and installing the product regarding the construction sector in 2 categories; Building Envelope products, and Mechanical and Electrical products. The f irst category are comprised of roof product group including the metal sheet roofing, uPVC roofing and roof garden, also with others product, for example; steel decking, and aluminum composite panel. And the Mechanical and Electrical products include elevator and escalator, smoke ventilation system and louvers, building maintenance unit and also home automation systems. The Department’s currently supplies ranges product and continuously improves our service with an intention to create a better customers’ satisfaction from our total solution for construction, also look for new products and services by means of more advance technology, higher quality and environmental friendliness. Market and Competition Currently, the construction material market’s competition is highly intensive, especially in pricing rivalry by the local manufacturers and imported products from China. As a consequence, the Department strategizes as a provider of the wide selection of construction solutions to serve each specific requirement of projects along with additional services from designing, consulting and installing in order to expand the business opportunities As the Department now servicing both private and public sectors, the direct marketing and sales are applied by cooperation of the marketing team that functions as a customer approaching and product presenting forefront, and the sales team that service customers in commercial and other detail issues. Ongoing Projects and Future Plans The Department, currently, is carrying several ongoing projects such as, the new MRT red line from Bang Sue to Taling Chan and the contract for supply and install the security system for the SCG pre-fabricated house.

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Although, there is a sign shows recovering of an economy but still the negative factors were foreseen. The Department is working intimately to clients with large construction projects, also servicing many coming development from design stage, in order to secure the achievement. In addition, the Department aims to be one of the leading construction materials’ providers in Thailand with the plan in acquiring new high technology and environmental friendly product that able to create more market opportunity for the department. Upcountry Business Department Scope of Products or Services The Department has operational offices both in the central and regional areas, providing rental services and distributing high quality computers and telecommunication equipments both imported and local made to governmental and private educational institutions across the country. The services include network installations, maintenance and repairs of office automations. Also, the Department acts as distributors of many other products including software for e-Learning, authoring tools, e-Classroom, online English language learning and PC management to support innovations in creative learning processes. Although, most of the products are imported, the Department has had business alliances who are main local distributors of IT products. These distributors have helped in procurement and delivery of products and thus lessening the number of imported products and stock management workloads. Market and Competition Products distributed by the Department are necessities for education market, and hence, a large number of competitors, especially small competitors who have tried to cut the costs. However, to maximize customers’ satisfaction, the Department has had a strong point in creating trust and reliability in the company’s stability, quality products, good after-sale services, and reasonable prices, among customers. Future Plans The Department has continuously planned to seek new products with high quality and reasonable prices to serve customers, and to search for governmental projects to increase sales volume. Among the governmental projects is the Economy Revival Project, Phase II from 2010-2012, with a huge budget of learning equipment procurement.


International Business Department Scope of Products or Services The Department is an exporting various types of products to overseas markets having Shrimp feed as its main product. It also a distributor of telecommunication products such as fiber optic cables mainly to the Vietnamese market. Moreover, the Department acts like international marketing arm of the Group. Market and Competition The highly competitive market in Vietnam as well as Thai Baht appreciation & Vietnamese Dong depreciation have affected the export business significantly. One of the primary principles of the Department is to maintain the quality of products and services both pre and after sale in order to ensure the most satisfaction from its customers. Moreover, the on-time delivery of its ordered products always leads to increasing trust and confidence from its customers. This has allowed the Department to expand its business growth continuously. The Department constantly pursue its policy of expanding international trade of the Group. Future Plans Based on its past, the Department plans to expand its business focus to Mekong basin, focusing on agriculture products, agro-industry, market of high quality industrial products as well as the procurement of quality-based ICT products to customers. In order to reduce the affect of exchange rate fluctuation, the Department plans to import the high quality computer-to-plate (CTP) offset printing plates for printing business in Thailand. Loxley Trading Company Limited Scope of Products or Services The Company is a distributor of leading consumer products such as “Cook” cooking oil, “Nong Pho” UHT milk, “Tra Chang” fish sauce, “Greennut” crispy green peas, “Sealect” canned tuna, “Raming” organic tea, Munchy’s the best biscuits sell from Malaysia and also own “Advance” high quality, low price toothbrush product. The Company joins with the “Office of small and medium enterprises promotion” to promote OTOP and SME products. Its distribution channels include: wholesales, retail sales, modern trades, convenient stores, hotels, restaurants, and others. Moreover, the Company penetrates the market to customer’s places such as office buildings, educational places, government

offices, and factories, etc. The Company focuses only on high quality products for the most customer benefit. The Company procures only good quality products so as to guarantee customer satisfaction. Moreover, the Company engages itself in continuous research and development procedures on its food and cosmetic products so as to support rising customer demands. Market and Competition Regardless of the global economic recession causing fierce competition especially for consumer goods in terms of price and distribution channels where wholesales compete with modern retailers. However, the Company never stops driving and collaborating with manufacturers in order to design marketing strategies along with continuous marketing promotion and events in order to closely and effectively retain existing customers. Future Plans The Company has strived to acquire quality products to fill in its portfolio including as a distributor or as its own products in order to cover all wholesale and retail customers’ demand. Apart from domestic market, the Company also plans to expand its business internationally by starting in neighboring countries such as Vietnam and will into other countries afterwards. Parts Zone (Thailand) Company Limited Scope of Products or Services The Company distributes vehicle spare parts and motorcycle spare parts of the After Market as well as equipment and tools for vehicle services, industries and other uses. Products offered are from its sole distributorship agreements and authorized distributors. Nevertheless, the Company stresses gaining sole distributorship rights for any product it considers suitable for its own marketing and pricing activities. However, for popular and highly needed products with many distributors, the Company will still pursue such orders in order to meet the exceeding demands of such market segment.

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Market and Competition The Company upholds the policy to generate controllable distribution channels such as its retail outlets, dealers, direct sales, or sale representatives. The Company has wholesale representatives throughout the whole country. For retailing business, the Company distributes thru its 3 branches. In the After Market of Car Parts and technical tools, there are a large number of direct competitors, family business is mostly. The indirect competitors are manufacturers and importers. With the Company’s experienced personnel, clear business strategy and supports from major business allies, it ensures that its business will grow as planned. In addition, the Market has high potential according to the climbing growth rate of car and motorcycle sale. The Company’s prospective customers are providers of repair and maintenance services for cars and motorcycles.

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Loxley Public Company Limited

Referring to vehicle spare parts, vehicle technology has not changed drastically, except new car models. Nowadays, there are many spare part manufacturers and the Free Trade Area policy of the government brings more distributors in the country. Then, the company needs to expand its area coverage and to become a market leader. Future Plans The Company plans to appoint intensive sales force to well cover all market segments in Thailand. The term of new market development, the company plan to develop into commercial market including Modern trade-Hardware, Technical College, Bus and Truck, and Industries.


Service Business Group Introduction The Group offers security services at Suvarnabhumi Airport, security equipments and systems for office buildings, hotels, and hospitals, as well as in media, education, and entertainment business. In 2010, demands for security services in the airport industry and offififi cfi e buildings were risen. Meanwhile, there were expansions of post production services in advertising and ffiifilm industries. The post production services of the Group have been widely recognized both domestically and internationally. Asia Security Management Co., Ltd. Scope of Products or Services Asia Security Management (ASM) Co.Ltd. is a joint venture between Loxley Public Co., Ltd. and ICTS Europe Holdings B.V., who is a world leading security service provider in European countries. ASM is providing security services at Suvarnabhumi Airport for Airports of Thailand (Public) Co., Ltd. since 2006 until present. Additionally, in 2008, the Company expanded its business to offer security guard services. The business has been very successful in the past two years.

Market and Competition The Company’s security business has grown rapidly with more than 3,200 employees. Its clients include governmental and private organizations such as aviation business group, mass transit business group, hospitality business group, fiffiifinancial institutions, and offfiicfi e and industrial buildings. At present, Asia Security Management is among top fiffiifive security companies who provide international standard quality security services. The Company has also extended its business to cover computer-based training (CBT). The targets are governmental and private organizations which use X-ray machines in security operation. ASM has provided both initial and recurrent course with full training facilities for staff of target clients. Future Plans From the four-year experience, the Company has learned that searching for quality employees is the key in security service. Therefore, the Company established a security training institute to produce international standard security guards.

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Oriental Post Company Limited Scope of Products or Services Oriental Post specialized in the post production business of television commercial, feature ffiifilm, and documentary for local and international market. With the growth and development of technology, the Company provides service solution that include ffiifilm developing, telecine transfering, editing, visual effect creation, compositing, 3D animation, kinetransfer service, and advanced digital media transfer service. In addition, the Company separates a reel services business to cope with the growing demand for digital fiffiifilms and post production. Postic Co., Ltd. is established to provide comprehensive high-end video post production facilities such as digital cinema package, and direct-to-print ffiifilms. Oriental Post Co., Ltd. has expanded our post production service in the growing market area in Vietnam with highly demand from its television commercial and feature ffiifilm business. Market and Competition Economy crisis and the overall competition for both local and international are severe due to the increasing growth and demand of post production business. Our strategies

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gear towards diversifying our services to suite with client’s requirement in terms of their budget and time. A strong point of the Company is that there is a team of experts available on hands to give advices from shooting to post production to meet the real needs of clients in limited time. The prospective customers of the Company are from production house, advertising agency and ffiifi lm production. Moreover, the Company has had plans to meet the increasing demands for digital shooting in order to keep abreast with the changing shooting technology. Future Plans The Company has focused on business expansion to regional markets which offer high growth of opportunities. Additionally, it has planned to increase revenues from special effect technology for ffiifilm and advertising productions by emphasizing on quality, services, and time management to enhance the effiffiificiency in meeting future demands of technology standards. The Company has also enhanced the efffiificiency of the Storage Area Network, which can safely store high resolutions images. To meet the higher market demand for digital ffiifilming, the Company has committed to developing quality products and innovations. Among them is 3-dimension stereoscopic color collection technique.


Special Project Group Special Project Department Scope of Products or Services The Department supplies, provides installation, maintenance and after-sales service for specialized, electronic equipment and systems. Most products requires specialized skills and high level of technology, so products are mostly imported from highly-reputable and well established companies in the USA and European countries. Some products are locally purchased while others such as software applications are developed in house by the Department. The Department has always focused on providing products that meet customers’ requirements and put importance on good long-term relationship with customers. Moreover, it has also focused on providing ffiifirst class after-sales services while ensuring no surplus products that would eventually affect the environment. Market and Competition The Department’s target customers are mostly government agencies, military and police authorities as well as other organizations involved in various communication and security technologies. Direct approach strategies to prospective customers on a project basis have been the mostly-used distribution channel. To respond to customer

needs and satisfaction, the Department always researches and develops products to keep up with advancement of technology. Competition within this market is moderate since the Department’s products and service are within highly specialized f ields. Any competition in these fiffiifields would be based on technological expertise, readiness of information, sales strategies, customer care, in addition to good relationship with customers. The market trend mainly depends on the allocation of government budget and whether the suitable products are represented. Meanwhile, the overall economical situation has slight effect on the business operations because the products and services offered are in highly specialized fiffiifields which are somewhat niche. Ongoing Projects and Future Plans The Department is undergoing a project for the Royal Thai Navy to provide and install airborne sonar systems and overhauling radar systems for the Royal Thai Army. Both projects are expected to complete in the 3rd quarter of 2011. Moreover, the Department is currently assembling special-purpose-truck for the Royal Thai Air Force, with delivery expected in early 2011.

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Joint Venture

Business Group

Introduction The Company’s investment policy aims at partnering with businesses that exhibit a high growth potential, which should thereby enhance the core competencies of the Company’s subsidiaries. The Group has invested with local and international operators including online lottery, manufacturing and distribution of steel roof products, steel forging chemical products, fiber optic cable, engine oil, security system, and insurance services. In 2010, the Joint Venture Business Group has tremendously increased the company’s revenues. The Company’s joint ventures have had good business performances and provided satisfactory dividends. There was a consolidation among joint ventures and other business groups inside the Company in making the maximum uses of the business alliances network. Online Lottery Department Scope of Products or Services The Department is a subcontractor of Loxley GTECH Technology Co., Ltd. who is the Online Lottery System Service provider to the Government Lottery Off ice (GLO) under the Lottery System Service Contract (signed on 29 July 2005). The subcontract services performed by the department include site preparation, lottery systems installation, telecommunication networks implantation, installation of 12,000 lottery terminals, Lottery system operation, training and support retailers. The duration of the contract along with monthly service payment is 5 years starting from the 1st day of Commercial Launch.

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Loxley GTECH Technology Company Limited Scope of Products or Services The Company is a Joint Venture between Loxley Public Company Limited group and GTECH Corporation group. It is the provider of the Online Lottery System Service Contract for the Government Lottery Office (GLO). The contract includes design, procuring, implementing and operating the Online Lottery System. The System consists of the two Data Centers (one for primary and the other for backup), an online communication network system, and 12,000 lottery terminals at the GLO’s authorized retailers country-wide connected online real time to the Data Centers. The Online Lottery System is provided by GTECH Corporation of USA. It is a global IT company and the world’s leading full-service lottery provider. GTECH designs, installs, operates, and supports complex computer and telecommunications systems for lotteries around the world, including many of the largest revenue-producers. GTECH has more than 100 customers on six continents. The Company is currently working with the GLO to ensure Online Services are launched at the earliest possible opportunity. By the end of 2006, around 7,000 terminals were installed throughout the country and ready for commercial launch. However, there are several issues, mainly related to legality and government policy, that GLO has to postpone the launch several times. As of December 31, 2010, there are 6,531 terminals remained in the field waiting for commercial launch.


BP - Castrol (Thailand) Limited Scope of Products or Services The Company has partnered with BP Oil from the UK to jointly form a business, which operates as a manufacturer and distributor of engine lubricants under the trade name of “CASTROL” and “BP”. While both products have different market potentials, they are both well-perceived and renowned. The Company used raw materials from various sources within the country; it continues to produce high quality products that meet customers’ demands and expectations. Moreover, the Company engages itself in continuous activities to develop new products as well as ensures its existing ones highly meet customers’ requirements. Meanwhile, the Company consistently improves the quality of distribution channels (using distributors as the primary channel) in order to facilitate smooth, accurate, quick and easy delivery to the customers and end consumers. Market and Competition Lubricants market in Thailand is highly competitive. Competitors have continuously deployed ‘price cutting’ strategies, promotion activities, and mass advertisements. The top 5 lubricant companies in Thailand include PTT, Shell, Caltex, Exxon/Mobil and BP - Castrol (Thailand) Ltd. These companies represent 65% of the market while the remaining 35% belong to smaller competitors, around 200 companies. As one of the leading companies, the Company has continuously reviewed the growth agenda and business strategies in order to sustain the competitiveness in the market while upholds the principle of providing the superior quality products and service offers to customers and consumers. The target customers include land and marine transportation businesses, industries which utilize heavy machineries, as well as any party that employs transportation vehicles. Future Plans The Company’s goal is to win in lubricant globally. The key strategy to drive future growth is to win in workshop channels (both cars and motorcycle) through the strong customer relationship and differentiated services and product offers provided by the Company’s branded workshop (service centers) operating under the name “Castrol Auto Service” and “Castrol BikePoint”.

Thai Fiber Optics Company Limited Scope of Products or Services Thai Fiber Optics Co., Ltd. (TFOC) is a joint venture between Loxley Public Co., Ltd. and Bangkok Telecom Co., Ltd., a leading copper telephone cable manufacturer in Thailand under the fiber optic design and manufacturing technology supervision from the world leader Furukawa Electric Co., Ltd. of Japan exceeding International Telecommunication Union (ITU). We are ready to produce optical drop cable for FTTx Network with G.657 A and B. We have special Multimode fiber for LAN 100Gbps. In addition, the Company has been aware of the environmental impact. We design and produce green product under RoHS (Restriction of Hazardous Substances Directive in electrical and electronic equipment). It also received the ISO 9001:2008 and ISO 14001:2004 certification from Bureau Veritas (BVQI), a renowned international organization. Marketing and Competition There has been waiting for installed 3G infrastructure expansion, Broadband Internet and Wi-Fi. The Transmission of multimedia content usage in high-technology equipment would mainly require fiber optic medium. Therefore, the Ministry of Industry has revised new TIS in 2011 for optical fiber cable manufacturers and importers in Thailand to be granted a new license. The Company has been manufacturing and distributing its products for government, offices and state enterprises, e.g., UNINET, Ministry of Interior, Department of Highways, TOT Public Co., Ltd., CAT Public Co., Ltd., Metropolitan Electricity Authority, Electricity Generating Authority of Thailand, Advance Info Service Public Co., Ltd. The Company has been supported by its parent company to oversea in Middle East except ASEAN market. Under high domestic demand, there is not only high competition within domestic competitors but also the newcomers who establish their manufacture in Thailand. The main importer are China and India. Most of the competitors would mainly exercise their price advantage as their marketing tactic whose inadequate quality and infrastructure instability would affect customers who experience shorter lifespan, higher maintenance, and unnecessary replacement investment eventually. The Company has instructed its customers to realize their investment activities, proper product utilization to meet with specific requirements.

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Ongoing Projects and Future Plans The company has remained undelivered UNINET Project final year that Loxley Public Co., Ltd. got award. The products value is 33 million Baht. The Company has been continuously developing its products to meet with customer’s requirement and budget. Such innovating product strategies include smaller size, light weight, and cheaper services. The FTTx outdoor product to serve Broadband customers is ready for the market. BlueScope Steel (Thailand) Limited BlueScope Lysaght (Thailand) Limited Scope of Products or Services BlueScope Steel (Thailand) Limited and BlueScope Lysaght (Thailand) Limited are joint venture companies between Loxley Public Co., Ltd. and BlueScope Steel Limited, an Australian leading world leader in the coated steel business, which has largest investment portfolio in Thailand. The Companies manufacture and distribute zinc coated steel, prepainted steel, and aluminium/zinc alloy coated steel. The Companies’ steel production plant located at Map Ta Phut includes metallic coating lines and painting operation. Presently, the Companies is the sole manufacturer and distributor of ZINCALUME, the aluminium/zinc alloy coated steel, which has the excellent barrier protection of aluminium, the cathodic protection of zinc providing cut edge protection providing up to four times the life of galvanized steel. CRP ANTIBACTERIAL WITH FOODGRADE, another innovation, is a prepainted galvanized steel product specially designed for cool room panel application to serve the food industry. The product is designed to meet USDA food grade requirements and provide a long life in damp cool room environments. Moreover, the Companies are leading modern coated steel manufacturers for building and construction industries, including roll-forming manufacturers for building construction and structure work of pre-engineered buildings.

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Market and Competition Due to the world economic crisis, steel price has been continuously increased since the first to the third quarter under to price fluctuation. However, it has been sharply declined during the fourth quarter. Hence, the domestic market has been declined under higher competition. As a result of slower economy from political inf luences, some of the government mega projects have been postponed causing deceleration in retail investment. The Companies’ market strategies has been refined to promptly serve the demand in the market on providing more range of products offering and providing a solution to the Turnkey Project with pre-engineering buildings and Ranbuild (small pre-engineering buildings) with cost efficiency. International market has been in similar situation due to declining economic growth in the world country leaders caused by the United States financial institution crisis. However, the Company’s products offer specialized characteristics according to industrial customers resulting in competitive advantage and an increase in market share of international exports. Future Plans The Companies plans to increase their proportion in the in-house construction material market especially due to their new outstanding products, which continuously meet customers’ requirements such as ZINCALUME, the aluminium/zinc alloy coated steel and CRP ANTIBACTERIAL WITH FOODGRADE, prepainted galvanized steel CLEAN COLORBOND with a wide range of colors. The Companies intend to do research and develop their products continuously.


Support Units Finance and Administration Group Functions and Responsibilities The Group is responsible for financial, accounting, administrative operations, and legal issues. The Group is comprised of the Financial Management Department, Accounting Management Department, Administration and General Affairs Department, Finance & Credit Department, International Legal Affairs Department, and Legal and Securities Department. Preceding Year’s Performance and Future Plans In 2010, the Group administrated finance by ensuring that loans for circulating capitals and projects were enough for the business operation and expansion. The group also had a policy in fiffiinancial liquidity, and made most use of all fiffiinancial tools to manage fiffiinancial investment in the most effective manner. It also collects customer information for other business units as a decision making tool in sales activities in order to prevent risks as well as for debt collection performed for them. In addition, the Group has also carried out effective inventory management to control its circulation at a proper level and to support other departments in providing information and analysis for efficient management processes including project monitoring. All of the projects were closely followed up. Information systems were used to help f inish the works quickly. The Administration & General Affairs Department was responsible for monitoring the company’s assets, recruiting services, and managing working spaces. In addition, high technology was used in a cost-saving document management project.

In 2011, the Group needs to improve its accounting operation to correspond with the Federation of Accounting Professions’ change of accounting standard, which took effect on 1 January 2011. The Group has still focused on coordination with the business groups, in particular in financial aspect, due to a large number of bided projects, and projects under bidding processes. The Group also needs to adjust working system to be in line with new distributing channels, including e-Commerce. Internal Audit Department Functions and Responsibilities The Internal Audit Department is an independent department, responsible for inspection and assessment of internal control standard of the Company and its subsidiaries. It has worked on risk management, and prepared summary reports of the inspection and recommendations for better efficiency of internal control systems of the Company and its subsidiaries. It has also reviewed related issues, analyzed and assessed working performance, ensuring that the works are in compliance with related laws and regulations. Additionally, the Department has given advices to many departments to make sure that their operations and key activities are done accurately and efficiently as planned. Preceding Year’s Performance and Future Plans The Internal Audit Department has reviewed the financial information presented the Company’s executives and involved parties, reviewed the internal control systems of the Company Annual Report 2010

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and its subsidiaries, and offered recommendations in support of the work development of different departments. The Department has also overseen the working operations to comply with the Company’s rules and the laws and regulations of the Securities and Exchange Commission and the Stock Exchange of Thailand. Additionally, the Department has also participated with other departments to develop a corporate risk management system to increase corporate efficiency and carry out proper and efficient subsequence risk management activities in order to increase the Company’s operation efficiency. Furthermore, the department has given an importance on recommendations of external auditors to enhance the company’s working performance, as well as on good governance as main mechanism in supporting good internal control systems. Corporate Communication Department Functions and Responsibilities The Department’s responsibilities include conducting and supporting public relation activities, manage marketing and social work, and publishing significant company-related media such as the Company’s yearly calendar, poster, website and other creative material. Preceding Year’s Performance and Future Plans In 2010, the Department had public relation work and marketing-related activities that supported other business units continuously including: the Online Lottery Project, Security Services Project for Suvarnabhumi Airport, as well as introducing new business channels for Trading Business Group. The Department was also responsible for other creative activities (printing media) as well as organized other internal and external activities such as, the Company’s staff club, welcome parties, photographic service, conferences; and organized social activities with external agencies. In 2011, the Department will continue to provide services to business units in the Company and its subsidiaries. It will focus on public relation activities, promotion of marketing-related activities as well as mass media connections.

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Loxley Public Company Limited

Human Resources Department Functions and Responsibilities The Department is responsible for human resource management and development. It provides advice on remunerations and welfare management, recruitment, setting human resource strategies, especially planning and personnel development in order to meet the Company’s mission and vision. The Department focuses on adjusting plans according to the current business situation and competition, emphasizes on proactive strategy and takes advantage of IT-related technologies. Preceding Year’s Performance and Future Plans During 2010, the Department has been active in personnel development. It aims at increasing skills, knowledge, and abilities in the current job as well as prepare for the personnel’s future growth including our high-light training module for f irst-line managers of this year - Team Quality Management (TQM). It has carried on internal communication activities and staff relation activities using various methods in order to encourage participation and communication amongst staff. Examples of such activities include: health education activity known as the “Health Update”, and dharma lectures also referred to as “From Office Desks to Dharma Court”. The Department also emphasizes succession planning (especially at management levels) so as to ensure the Company’s business and operations run smoothly. In 2011, the Department will continue a focus on personnel development both at the management and operation levels. It will set competency map, job evaluation, career development and link with compensation scheme. Moreover, the Department aims at carefully and selectively combining personnel effort among the Human Resources Department in the Loxley group in order to induce increases both in efficiency and effectiveness.


Corporate Social Responsibility For the past 72 years, Loxley Public Company Limited has continuously adhered to good governance with awareness of corporate social responsibility, in particular in the area of environment, and the society for sustainable development. We have put an emphasis on responsibility for the society, the corporation, its employees, nearby communities, and its business alliances, alike. This has resulted in excellent performances, business sustainability, creativity, and employee participation in thinking process and volunteering. Our social responsibility activities included an establishment of a learning center and a public garden of the Penang Market Community. Developed from an abandoned area of the Port Authority of Thailand, the public garden is created as recreation space for good health of employees of the company and the Port Authority of Thailand, as well as people in neighboring communities. Additionally, via the “Volunteer Spirits (Jit Asa)� Project, volunteering and service mindedness has been instilled in the employees at all levels, who are always willing to involve in all corporate social responsibility activities.

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Risk Factors Business Risk Factors • Risks from interest rates The Company and subsidiaries have short-term liabilities, excessive withdrawals from accounts, short-term loans from financial institutions, and loans for revolving funds. The Company and subsidiaries have tried to reduce the financial funds and long-term loans for lower interest rates. Higher interest rates in the future may affect the company’s performance and cash flow. However, the Company has risk management plans to reduce the impacts from interest rates fluctuation using fixed interest rate loans and floating interest rate loans when it deems appropriate. • Risks from uncertainty of online lottery project Loxley GTECH Technology Company Limited, an associate of Loxley Public Company Limited signed an agreement with the Government Lottery Off ice (GLO) of Thailand to provide equipment and service for online lottery project on 29 July 2005. According to the agreement, online lottery ticket vending machines shall be ready for operation within seven months after the contract signing date. However, for the past five years, LGT has been repeatedly informed by the GLO to postpone the operation. Despite the facts that LGT has tried to negotiate a way out with the GLO and that recently the government seemed to have a resolution to go ahead with operation of the vending machines in selling 6-digit lotteries instead of 3-digit and 2-digit lotteries, uncertainty remains. The Company has acknowledged this loss from impairment of investment and closely followed up on the project in order to adjust business plans in due time. The problem is considered an uncontrollable uncertainty. The Company has finally set up reserve funds for all of the impairment of investment.

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Loxley Public Company Limited

• External risks External risks that have affected the company’s business operation and incomes include the political unrest in Bangkok. So far, the unrest has had more or less impacts on the company’s revenues and operations of many departments. Because the unrest was unpredictable and it is likely to reoccur in the future, the Company has planned to cope with such incidents with flexible working system, document protection measure, and security systems to safeguard all the company’s buildings, assets and employees. Administrative Risk Factors • Personnel Risks The Company has put a focus on human resource development and management, incessantly upgrading employees’ skills and expertise. However, retirements of high ranked executives and key persons are considered one of the Company’s major risks. To solve the problem, the Company has planned for development of substitutes for positions in each working field. The Company will not cling to one specific person’s capability or decision but will distribute responsibilities and decisions under the management of the Board of Directors.


Legal Dispute Jago Company Limited (Jago), a subsidiary of Loxley Public Company Limited, litigated for damages from the Government Lottery Offfiifice (GLO) since the latter has failed to perform some of its obligations pertaining to the contract. Jago had then issued a letter to GLO for terminating the contract. The order of magnitude is as follows: October 1996, Loxley Public Company Limited established Jago Company Limited with a registered capital amount of 330 million Baht, equivalent to 99% of shareholdings. The main objectives of the Company included: providing dealer services and paying out prizes for online charity lotteries for the GLO. December 1996, the GLO awarded the contract to Jago, which has then become its dealer responsible for prize payout for online charity lotteries on behalf of the GLO for a 10 year contract period. Jago would only be able to terminate this contract by following the conditions/restrictions listed in it. Jago was entitled to receive revenue shared from the sales of those lotteries as specified within the contract. November 1999, Jago issued a letter to the GLO to terminate the contract since the latter was unable to perform some of its obligations under the contract and Jago has decided to cut its losses on the project expected revenue.

December 2000, the arbitrators stipulated the GLO was required to compensate Jago the sum of 2,508.6 million Baht, with interest of 7.5 percent per annum, within 60 days after receiving a duplicate copy of the verdict from the arbitrators. July 2004, the Civil Court issued a judgment that Jago recovered, in favor of the arbitrators’ verdict. Since then, the GLO has appealed the verdict. October 2009, Jago submitted additional evidence to the Supreme Court. The GLO filed an appeal with the Supreme Court in an attempt to overturn such verdict. February 2010, the Supreme Court has overturned the Civil Court’s judgment. Therefore, the case is fiffiifinal and GLO has not to compensate Jago as the verdict of the arbitrators and the Civil Court. This case, however, is strictly not related to the Online Lottery Services contract which Loxley GTECH Technology Company Limited, another subsidiary of Loxley Group, had signed with GLO in 2005.

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Details of the Company Company Name : Loxley Public Company Limited Location of Head Office : No. 102 Na Ranong Road, Klong Toey Subdistrict, Klong Toey District, Bangkok 10110 Telephone No. : 0-2348-8000 Facsimile No. : 0-2348-8001 Type of Business : Commerce Number and Type of Total Issued Share : Registered Capital : Baht 2,000,000,000, divided into 2,000,000,000 ordinary shares Paid-up Capital : Baht 2,000,000,000, divided into 2,000,000,000 ordinary shares Par Value per Share : Baht 1.00 Information on Registered Capital Date/Month/Year of Registration in Articles of Association

Increased/ Decreased Capital (Million Baht)

Capital after Increase/ Decrease of Capital (Million Baht)

1 April 1993 240.00 400.00 27 January 1995 60.00 460.00 20 March 1996 60.00 520.00 30 November 2000 (120.00) 400.00 4 December 2000 1,600.00 2,000.00 25 December 2003 - - 3 May 2007 (1.92) 1,998.07 11 May 2007 1.92 2,000.00 650.00 2,650.00 8 May 2008 (650.00) 2,000.00

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Loxley Public Company Limited

Reason of Capital Increase/Decrease Business expansion and increase of investment fund Reservation for the exercise of conversion right on debentures Reservation for the exercise of conversion right on debentures Reduction of shares for non-converted debentures - Offering 65 million shares to existing shareholders - Reservation of 85 million shares for the exercise of conversion rights on debentures - Offering 10 million shares to Company directors and staff Reduction of share value from Baht 10.00 to Baht 1.00 Cancellation of non-issued ordinary shares - Offering shares to Ekpavee Company Limited - Reservation for the exercise of conversion right on debentures Reduction of reserve shares for the exercise of conversion right on debentures

Number of Shares and Price of Capital Increase/Decrease 24,000,000 shares, at Baht 10.00 per share 6,000,000 shares, at Baht 10.00 per share 6,000,000 shares, at Baht 10.00 per share 12,000,000 shares, at Baht 10.00 per share - 65,000,000 shares, at Baht 10.00 per share - 85,000,000 shares, at Baht 10.00 per share - 10,000,000 shares, at Baht 10.00 per share 2,000,000,000 shares, at Baht 1.00 per share 1,998,078,970 shares, at Baht 1.00 per share - 2,000,000,000 shares, at Baht 1.00 per share - 2,650,000,000 shares, at Baht 1.00 per share 2,000,000,000 shares, at Baht 1.00 per share


Capital Structure (1) The Company’s Securities At 31 December 2010, the Company has authorized share capital valued at 2,000,000,000 Baht, with issued and paid-up share capital at 2,000,000,000 Baht, 1 Baht per share. (2) Shareholders Details of top 10 major shareholders whose names were shown in the share register book as of 25 March 2010 (The latest share registry book closing date for the Annual General Meeting of Shareholders on 28 April 2010) were as follows: No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Name Ekpavee Co., Ltd. Thai NVDR Co., Ltd.*1 Mrs. Amphai Harnkaivilai Mr. Pairote Lamsam Mr. Dhongchai Lamsam Mr. Photipong Lamsam Mrs. Benjawan Kumpanartsanyakorn M.L. Prasobchai Kasemsant Mr. Banyong Lamsam and Mrs. Nartrudee Weeramaeteekul Mrs. Ampita Jitsaena

Number of Shares

Total Shareholding Percentage

556,341,060 90,518,067 40,000,000 35,589,030 25,459,090 24,433,680 23,300,000 20,400,000 19,229,710

27.82 4.52 2.00 1.78 1.27 1.22 1.16 1.02 0.96

18,410,000

0.92

*1 Thai NVDR Company Limited is a subsidiary established by The Stock Exchange of Thailand. It is automatically regarded as a listed security by SET. Those who invest in Thai NVDR receive the same full f inancial benef its as they would receive had they invested directly in shares, however, without any voting right in shareholders meeting.

Annual Report 2010

47


Ekpavee Co., Ltd. and Lamsam Group comprise (as at the close of share registry book dated 25 March 2010) Name 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Ekpavee Co., Ltd. Mr. Pairote Lamsam Mr. Dhongchai Lamsam Mr. Photiphong Lamsam Mr. Banyong Lamsam and Mrs. Nartrudee Weeramaeteekul M.R. Sam-aungvarn Lamsam LT. Chalermchoke Lamsam Mr. Sukit Wanglee Mrs. Chanjaree Lamsam Mr. Yutti Lamsam Total

Shareholding Percentage 27.82% 1.78% 1.27% 1.22% 0.96% 0.56% 0.47% 0.23% 0.19% 0.18% 34.68%

(3) Dividend Payment Policy It is the Company’s policy to make dividend payments of at least 40% of its net profits before vested interests in subsidiaries and associated companies. In 2006, the Company paid dividends at the rate of Baht 0.05 per share for a total of Baht 99.90 million. In 2007, the Company did not pay dividend in order to reserve the capital for future business expansions. In 2008 and 2009, the Company did not pay dividend due to retained deficit. It is the policies of the Company’s subsidiaries, however, to pay dividends when they have an excess out of their operating profits less investment costs, working capital and debts payable. Dividend payments by each subsidiary, however, depend on the category of its business and conditions of the industries in which it is engaged.

48

Loxley Public Company Limited


Details of Ownership in Loxley Subsidiaries and Associated Companies As of 31 December 2010, the Company’s paid-up capital is Baht 2,000,000,000. The Company holds shares, directly and indirectly, in 18 subsidiaries and 9 associated companies, as follows: Subsidiaries directly owned by Loxley No.

Name of companies

1 Loxley Wireless Co., Ltd. 2 Loxbit Plc. 3 Jago Co., Ltd. * 4 Data Mining Co., Ltd. (former name, Loxley Energy Co., Ltd.) 5 Loxley Joint & Hold Co., Ltd. 6 Asia Security Management Co., Ltd. 7 Societe Commercial Lao

Address No. 555 Rasa Tower, 22nd Floor, Phaholyothin Road, Chatuchak Subdistrict, Chatuchak District, Bangkok No. 475, 8th Floor, Unit No. 801, Siripinyo Building, Sriayudhaya Road, Phayathai Subdistrict, Rajthevi District, Bangkok No. 102 Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok No. 102 Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok No. 102 Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok No. 102 Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok 111 Ban Mixay, 3rd Floor, Setthathirath Rd., B.P. 2924, Vientiane, Lao People’s Democratic Republic

Registered % of and paid-up sharecapital (Million Baht) holding

Type of business sale and service of telecommunication and information technology systems

100.00

99

trading of telecommunication equipment, computers and computer programs

475.20

99

sale of online lottery

330.00

99

8.00

99

1,000.00

99

100.00

69

162.70

67

service of information technology equipment and computer systems holding company

provide security services at Suvarnabhumi Airport trading in Lao People’s Democratic Republic

Million Kip

Annual Report 2010

49


Subsidiaries directly owned by Loxley No.

Name of companies

8 Parts Zone (Thailand) Co., Ltd. 9 Loxley Property Development Co., Ltd. 10 Loxley Global Co., Ltd.

Address No. 11, 13 Ramkamhaeng Road, Meenburee District, Bangkok No. 102 Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok No. 102 Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok

Type of business

Registered % of and paid-up sharecapital (Million Baht) holding

trading in automotive parts and equipment

25.00

60

office, billboard rental and services

107.50

59

99.00

51

holding company

Subsidiaries which Loxley Controls No. 11

50

Name of companies Loxley Trading Co., Ltd.

Loxley Public Company Limited

Address

Type of business

No. 102 Loxley Building, sale of consumer products Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok

Registered % of and paid-up sharecapital (Million Baht) holding 50.00

50


Subsidiaries indirectly owned by Loxley No. 12

13

14

15

16

17

18

Name of companies Professional Computer Co., Ltd.

Loxbit PA PLC. (former name, Point Asia P)

Address No. 475 Siripinyo Building, 17th-18th Floors, Sriayudhaya Road, Phayathai Subdistrict, Rajthevi District, Bangkok

Type of business supply, maintenance and set up of work system, installation of computers and management of computerized center

telecommunication and No. 102 Loxley Building, th 14 Floor, Na Ranong Road, computerized database service Klongtoey Subdistrict, Klongtoey District, Bangkok

Registered % of and paid-up sharecapital (Million Baht) holding

trading of computer, computer NetONE Network Solution Co., Ltd. No. 408/81, 19th Floor, Phaholyothin Place Building, spare parts and equipment, of Phaholyothin Road, Samsean all types Nai Subdistrict, Chatuchak District, Bangkok Thai Gateway Co., Ltd.

No. 102 Na Ranong Road, Klongtoey Subdistrict, Klongtoey District, Bangkok

L Hardware and Services Co., Ltd. No. 44/385-389 Moo 10, Navamin Road, Klong-kum Subdistrict, Bueng-kum District, Bangkok

trading of telecommunication equipment

installation and repair of IT equipment, sale of computers and peripherals

Digital Screen Play Co., Ltd.

educational services through No. 88/44 Moo 3 Soi Ramintra 5 ,Ramintra Road, network system Anusaowari Subdistrict, Bangkhen District, Bangkok

BP - Castrol (Thailand) Limited (former name, AsPac Oil (Thailand) Limited)

No. 183, 23rd Floor, Rajanakarn Building, South-Sathorn Road, Yannawa Subdistrict, Sathorn District, Bangkok

sale of Castrol and BP lubricant

230.00

99

44.57

99

70.00

99

17.00

99

5.00

99

10.00

70

49.00

40

Annual Report 2010

51


Associated companies directly owned by Loxley No.

Name of companies

Address

Type of business

Registered % of and paid-up sharecapital (Million Baht) holding

1

Oriental Post Co., Ltd.

No. 333/3 Rachadanivej advertising series post Village, Soi 19, Pracha-uthit production services Road, Samsennok Subdistrict, Huay-kwang District, Bangkok

150.00

50

2

L Solar 1 Co., Ltd.

No. 102 Na Ranong Road, solar power plant Klongtoey Subdistrict, Klongtoey District, Bangkok

220.00

45

3

Thai Fiber Optics Co., Ltd.

989 Siam Tower Building, Rama I Road, Patumwan Subdistrict, Patumwan District, Bangkok

100.00

40

4

Loxley Gtech Technology

No. 102 Na Ranong Road, sale and service of information Klong Toey Subdistrict, technology and online lottery Klong Toey District, Bangkok sale systems

300.00

35

5

Guardfire Limited

No. 1780 Tiauhong-Bangna import and sale of accident Building, Bangna-trad Road, preventive systems Bangna Subdistrict, Bangna District, Bangkok

20.00

30

Mobile Innovation Co., Ltd. (former name, L Spot Co., Ltd.)

No. 128/224, 227, 228 services of real time vehicles 21st Floor, Phayathai Plaza tracking management system Building, Phayathai Road, Thung Phayathai Subdistrict, Rajthevi District, Bangkok

184.00

27

7

Foseco (Thailand) Limited (former name, OLN (Thailand) Limited)

No. 170/69, 22nd Floor, manufacture and sale of Ocean Tower I Building, chemicals for metal casting Rajchadaphisek Road, Klongtoey Subdistrict, Klongtoey District, Bangkok

10.00

26

8

BlueScope Lysaght (Thailand) Limited (former name, BHP Steel Lysaght (Thailand) Limited)

No. 16, Soi Phahonyothin manufacture and sale of steel 96, Prachathipat Subdistrict, roofing Thanyaburi District, Patumthani

600.00

25

9

BlueScope Steel (Thailand) Limited No. 2 Soi G9, Pakornsongkrohrad Road, Maptaphut (former name, BHP Steel Subdistrict, Muang District, (Thailand) Limited Rayong

Manufacture and sale of cold 5,000.00 rolled steel

25

6

manufacture of fiber optic

NOTE * This company has not operated its main business and none of their directors hold shares in subsidiaries/associated companies exceeding 5% of the registered capital.

52

Loxley Public Company Limited


Management Loxley’s management structure comprises a company committee, whose members are experts in different fields. Sub-committees are appointed by the company committee to oversee and manage businesses. Each member of the committees has responsibilities as follows:

The Company’s Board of Directors

Pursuant with the Company’s Articles of Association, the Company’s Board of Directors shall consist of not less than 5 and not more than 21 members of whom not less than half of that number must have residence in the Kingdom. And, the Company’s directors must be qualifified in accordance with the prerequisites of law. List No. of members of the Company’s Name Board of Directors as of 31 December 2010 : Position 1 2 3

Mr. Pairote Mr. Sukit Mr. Dhongchai

Lamsam Wanglee Lamsam

4 5 6 7 8 9

Dr. Harit Dr. Wissanu Mr. Sirin Dr. Supavud Mr. Charoon Mr. Dusit

Sutabutr Krea-ngarm Nimmanahaeminda Saicheua Chinalai Nontanakorn

10 11

Mr. Supachai Wanglee Mr. Suebtrakul Soonthornthum

12 13 14

Mr. Poomchai Lamsam Mr. Vasant Chatikavanij Mr. Suraphand Bhasitnirandr

15 16

Dr. Sompop Mr. Suroj

Chareonkul Lamsam

Chairman of the Board Vice Chairman of the Board President and Member of the Nominating and Remuneration Committee Independent Director and Chairman of the Audit Committee Independent Director Independent Director Independent Director Independent Director and Member of the Audit Committee Independent Director, Chairman of the Nominating and Remuneration Committee and Member of the Audit Committee Director Director, Senior Executive Vice President and Member of the Nominating and Remuneration committee Director Director and Executive Vice President Director, Executive Vice President and Member of the Nominating and Remuneration Committee Director and Executive Vice President Director and Executive Vice President

Company Secretary is Mr. Pichai Mooputtarak.

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53


Authority of Directors and Restrictions on Authority of Directors Number and names of the directors who are authorized to sign on behalf of the Company are as follows: Two of the following seven persons jointly sign and affix the Company’s seal: Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, Mr. Sukit Wanglee, Mr. Supachai Wanglee, Mr. Poomchai Lamsam, Mr. Vasant Chatikavanij and Mr. Suroj Lamsam OR any one of the seven directors above mentioned jointly signs with any one of the following directors totaling two directors and affix the Company’s seal: Mr. Suebtrakul Soonthornthum, or Mr. Suraphand Bhasitnirandr, or Mr. Sompop Chareonkul.

Independent Directors

The Company’s independent directors whose opinions, instructions, and warnings are independent and free from the Company’s management. As a result, the Company does not authorize any independent director the rights to enter into any legally binding documentation with the Management. An Independent Director is required to follow the guidelines as follows: 1. Holds not more than 1% of the common shares from the Company, its parent company, subsidiaries, joint-ventures, juristic persons with possible conflicts of interests including his/her relatives’ shareholding activities. 2. Does not or has not been a director related to operation management, staff member, employee, permanent consultant, or administrative person of the Company, its parent company, subsidiaries, joint-ventures, partners, or juristic person with conflicts of interest for the past 2 years on the date of appointment. 3. Does not relate either by birth or marriage, e.g., father, mother, spouse, brother or sister, child, and child’s spouse, of the Management, major shareholder, influential person, Management candidate, or influential person of the Company’s subsidiaries. 4. Does not or has not related in business operations, e.g., regular business transactions, real-estate rental, asset service transaction, financial assistance, including related activities where debt payment transaction is required from 3% of the Company’s net assets or Baht 20 million, whichever is less, with the Company, its parent company, subsidiaries, joint-ventures, or juristic person with possible conflict of interest affecting independent judgment, as well as not being a major shareholder, non-independent director, or management executive of the business related with the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest, for the past 2 years prior to the appointment. 5. Does not or has not been the Auditor of the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest, as well as not being a major shareholder, non-independent committee, management executive, or shareholder of Auditing office where the Auditor of the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest, belongs to, for the past 2 years prior to the appointment. 6. Does not or has not provided professional services including legal advice or financial advice with annual fee of over Baht 2 million from the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest. However, in the case when such professional is a juristic person, it would include being a major shareholder, non-independent committee, management executive or management share of such professional, for the past 2 years prior to the appointment. 7. Is not a Director appointed on behalf of the major shareholder or a shareholder related to the major shareholder of the Company. 8. Does not possess any other features that would affect independent opinion regarding Company’s operations. Furthermore, after the Independent Director has been appointed, he/she would be delegated by the Board of Directors to authorize transactions on the operations of the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest, under an optional collective decision.

54

Loxley Public Company Limited


Scope of Authority and Responsibilities of the Company’s Board of Directors 1. Discharges its duties in line with the laws, Company Objectives and its Articles of Association as well as resolutions adopted by general meeting(s) of shareholders and exerts care in safeguarding the Company’s interests. 2. Sets out policies, objectives, strategies, and directs the Company’s course of action as well as supervises and monitors the management’s activities to ensure that they are effectively implemented pursuant with the policies that had been laid down. 3. Make approvals on issues of substance such as policies, business plans, major investment and any other items as prescribed by the law unless such matters are subjected to resolutions from general meeting(s) of shareholders as required by law. 4. Nominates director(s) duly authorized to sign to bind the Company, appoints Chairman of the Board and Deputy Chairman or else assigns one or several directors or any other person(s) to carry out any action on behalf of the Board. 5. Appoints the company secretary to be responsible for any operations abide by law. 6. Convenes shareholders meetings, Board of Directors meetings and ensures that there are preparations for financial reports which shall be presented in conjunction with the Licensed Auditor’s report in the annual report covering major issues pursuant with the Stock Exchange of Thailand’s policy and as prescribed by the law. 7. Establishes the internal control, risk management, and regulation according to the corporate governance guidelines as well as transparent, accurate, and timely disclosure of information for shareholders, investors, and stakeholders. Meetings of the Board of Directors The Board meetings are scheduled at least once every quarter, where special meetings may be arranged as necessary. Meeting agenda would be specified in advance which includes operation performance monitoring as one of them. During the meeting, each Board member is free to express his/her opinion and advise additional agendas where the Chairperson is responsible to manage proper timing in order for the Management to prepare documentation and information related to the agenda. The secretary to the Board is responsible for meeting appointment, document preparation, meeting invitation all of which is to be submitted at least 7 days in advance for prior consideration unless necessary including recording minutes of meeting, and safekeeping for future verifification. Meetings of the Board of Directors and Sub-Committees in 2010: Frequency of Attendance/Number of Meetings No. 1 2 3 4 5 6 7 8 9 10

Name Mr. Pairote Mr. Sukit Mr. Dhongchai Dr. Harit Dr. Wissanu Mr. Sirin Dr. Supavud Mr. Charoon Mr. Dusit Mr. Supachai

Lamsam Wanglee Lamsam Sutabutr Krea-ngarm Nimmanahaeminda Saicheua Chinalai Nontanakorn Wanglee

Board of Directors

Executive Board

Audit Committee

Nominating and Remuneration Committee

8/9 9/9 8/9 9/9 7/9 7/9 9/9 9/9 9/9 7/9

10/10 -

7/7 7/7 7/7 -

2/2 2/2 -

Annual Report 2010

55


Frequency of Attendance/Number of Meetings No. 11 12 13 14 15 16 17 18 19 20

Name Mr. Suebtrakul Soonthornthum Mr. Poomchai Lamsam Mr. Vasant Chatikavanij Mr. Suraphand Bhasitnirandr Dr. Sompop Chareonkul Mr. Suroj Lamsam Lt. Suchin Baholyodhin RTN Dr. Jingjai Hanchanlash Mr. Trichakr Tansuphasiri Lt. Chalermchoke Lamsam

Board of Directors

Executive Board

Audit Committee

Nominating and Remuneration Committee

9/9 8/9 7/9 8/9 9/9 9/9 -

8/10 9/10 10/10 9/10 10/10 10/10 4/10 9/10 10/10

-

2/2 2/2 -

The Executive Board

List of members of the Executive Board as of 31 December 2010: No. 1 2 3 4 5 6 7 8 9 10

Name Mr. Dhongchai Mr. Suebtrakul Mr. Vasant Mr. Suraphand Dr. Sompop Lt. Suchin Dr. Jingjai Mr. Suroj Mr. Trichakr Lt. Chalermchoke

Lamsam Soonthornthum Chatikavanij Bhasitnirandr Chareonkul Baholyodhin RTN Hanchanlash Lamsam Tansuphasiri Lamsam

Position President Senior Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Executive Vice President Director Director

Secretary to the Executive Board is Mr. Pichai Mooputtarak. Scope of Authority and Responsibilities of the Executive Board 1. Determines business plans, budgets, strategies, core management structure for business operations and def ines various management authorities of the Company compatible to economic conditions and competition. With the Board of Directors’ approval, leads the Company through any crisis. 2. Inspects, follows-up and implements Company policies and operating results as well as controlling operating costs to ensure effective and efficient implementation of business plans. 3. With the President’s authorization, considers matters concerning recruitment, appointment, employment, re-location, discharge, re-positioning, transfer, work suspension, termination of employment and def ines remuneration including expenses and facilities for employees from Senior Vice Presidents downwards. 4 Considers issues pertaining to investment, seeks new business opportunities as well as handling other activities of the Company which are or relate to its normal course of operations.

56

Loxley Public Company Limited


5. Takes action on various matters as assigned by the Company’s Board or shareholders or as required by the laws or the Company’s Articles of Association which includes screening various matters for submission to the Company’s Board. Management Authorization to the President In reference to the Company’s Board of Directors Meeting no.2/2001 held on 9 April 2001. The Board approved the President’s scope of authority and responsibilities as follows: 1. Monitor and supervise work undertaken by the management to ensure that they are implemented in accordance with policies laid down by the Company’s Board of Directors. 2. Administer the operations and approve various matters concerning the Company’s operation in its normal course of business so as to ensure continuity. 3. Look after, operate and perform regular work in the normal course of operations in the Company’s interest to ensure that they are implemented in line with the Company’s Objectives and Articles of Association as well as pursuant with orders, resolutions, policies, plans and budgets approved or assigned by the Company’s Board under the framework of relevant laws. 4. The President is vested with the authority, in cases of new or overseas investments, borrowing or lending of money right through to guarantee over and above those in the normal course of business in order to protect the Company’s rights and interests and to ensure that the conduct of its operations are carried out effectively, to carry out such various actions although any of such matters may be submitted, at his/her discretion, to the Board for its consideration/ approval. The exception is where the Company is required to act in accordance with criteria prescribed by the Stock Exchange of Thailand, the President will take action along such criteria as well. In case the President or person(s) who may have conf licts of interests as def ined by the Notif ications of Off ice of Securities and Exchange Commission or the Stock Exchange of Thailand have vested interests or may have any conflict of interests in any other manner with the Company or its subsidiaries, such transaction can be approved only by the Independent Directors and/or the Company’s Board of Directors. On this matter governing the normal signing of approval for various matters for the Company and its subsidiaries, the Company normally has a policy in place which sets out the scope of authority concerning the signing for approval of such matters which are in a form that will be decentralizing power by setting out the line and matters for which an executive at any specif ic level will be authorized to approve. Review, improvement and changes will also be made appropriately in accordance with the circumstances. As for other matters which are of material importance to the Company, the Company has prescribed that two directors signing jointly under affixment of the Company’s seal will have the authority to act on its behalf.

The Audit Committee

The Audit Committee is an independent entity which will give its support to, and act in the name of, the Company’s Board of Directors in order to review financial information to be submitted to shareholders and other relevant parties, review internal control system set up by management and the Company’s Board and the internal audit procedure as well as communicating with the Company’s auditor. The Company has specified the qualifications of the Audit Committee in the Audit Committee Charter as follows: 1. Holds not more than 1% of the common shares from the Company, its parent company, subsidiaries, joint-ventures, juristic persons with possible conflicts of interests including his/her relatives’ shareholding activities. 2. Does not or has not been a committee related to operation management, staff member, employee, permanent consultant, or administrative person of the Company, its parent company, subsidiaries, joint-ventures, partners, or juristic person with conflicts of interest for the past 2 years on the date of appointment. 3. Does not relate either by birth or marriage, e.g., father, mother, spouse, brother or sister, child, and child’s spouse, of the Management, major shareholder, influential person, Management candidate, or influential person of the Company’s subsidiaries. Annual Report 2010

57


4. Does not or has not related in business operations, e.g., regular business transactions, real-estate rental, asset service transaction, financial assistance, including related activities where debt payment transaction is required from 3% of the Company’s net assets or Baht 20 million, whichever is less, with the Company, its parent company, subsidiaries, joint-ventures, or juristic person with possible conflict of interest affecting independent judgment, as well as not being a major shareholder, non-independent director, or management executive of the business related with the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest, for the past 2 years prior to the appointment. 5. Does not or has not been the Auditor of the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest, as well as not being a major shareholder, non-independent director, management executive, or shareholder of Auditing office where the Auditor of the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest, belongs to, for the past 2 years prior to the appointment. 6. Does not or has not provided professional services including legal advice or financial advice with annual fee of over Baht 2 million from the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest. However, in the case when such professional is a juristic person, it would include being a major shareholder, non-independent director, management executive or management share of such professional, for the past 2 years prior to the appointment. 7. Is not a Director appointed on behalf of the major shareholder or a shareholder related to the major shareholder of the Company. 8. Is not a Director delegated by the Board of Directors to make a decision on behalf of the Company, its parent company, subsidiaries, joint-venture, or juristic person with possible conflicts of interest. 9. In the case when an Independent Director is appointed as an Independent Director in the Company, its parent company, subsidiaries, he/she is required to disclose information related to such position including remuneration received in Form 56-1 and 56-2, accordingly. 10. Does not possess any other features that would affect independent opinion regarding Company’s operations. The Audit Committee is composed of 3 members as follows: No. 1 2 3

Name Dr. Harit Mr. Charoon Mr. Dusit

Sutabutr Chinalai Nontanakorn

Position Chairman of Audit Committee Audit Committee Member Audit Committee Member

Note: Mr. Dusit Nontanakorn possesses accounting and finance experience. Secretary to the Audit Committee is Mr. Chamnan Chotcomwongse. The Audit Committee’s Scope of Duties and Authority 1. The Audit Committee is responsible for the following functions specified by the Board of Directors: 1.1 Verify the Company’s financial reports 1.2 Optimize the Company’s Internal Control and Internal Audit processes properly and eff iciently as well as verify the independence of the Internal Auditor including consideration of appointment, transfer, and dismiss the Internal Auditor or related agency responsible for Internal Audit 1.3 Follow Securities and Exchange Regulations and Rules of the Stock Exchange of Thailand, Public Company Act, Accounting Act, or related laws 1.4 Optimize the Company’s Risk Management properly and effectively 1.5 Nominate an independent candidate as an Internal Auditor as well as his/her salary including participation in auditor’s meeting with the absence of the Management at least once a year 1.6 Verify all related transactions or transactions with possible conflicts of interests according to the law and Securities and Exchange regulations to ensure integrity for the Company’s maximum benefit

58

Loxley Public Company Limited


1.7 Prepare the Audit Committee Report to be included in the Company’s Annual Report and signed by the Audit Committee Chairperson with the following details: 1.7.1 Opinion on integrity and confidence of the Company’s Financial Report 1.7.2 Opinion on the adequacy of the Company’s Internal Control 1.7.3 Opinion on the compliance to the Securities and Exchange regulations, Stock Exchange rules, or related business laws 1.7.4 Opinion on the Auditor’s qualification 1.7.5 Opinion on the transactions with possible conflicts of interests 1.7.6 Number of Audit Committee meetings and each Committee member’s participation 1.7.7 Opinion or suggestion of the Audit Committee by complying with the Charter 1.7.8 Other transactions worth for the shareholders and general investors under the assigned roles and responsibilities from the Board of Directors 1.8 Perform additional assignment from the Board of Directors with an approval from the Audit Committee On performing the activities specif ied in the f irst paragraph, the Audit Committee is directly accounted for the Board of Directors where the Board of Directors is accounted for the Company’s operation to the public. Whenever the Audit Committee’s duties are changed, the Company shall prepare the change of duty policy and the updated member and duties of the Audit Committee set forth by the Stock Exchange to be submitted to the Stock Exchange by 3 days after such changes according to the Stock Exchange’s guidelines on electronic reporting. 2. Should the Audit Committee find or suspect any of the following transactions or actions that would significantly affect the Company’s financial status or operations, the Audit Committee shall report the Board of Directors in order to adjust such items accordingly on time: 2.1 Errors or incomplete transaction record in Accounting or Financial Reports 2.2 Improper or inefficient Internal Control and Internal Audit 2.3 Inefficient Risk Management 2.4 Transactions with conflict of interest 2.5 Fraudulent or significant defects in Internal Control 2.6 Breaching of Securities and Exchange Regulations, Stock Exchange rules or related laws Should the Board of Directors or the Management does not correct such impairment specified in the first paragraph, an Audit Committee member may report such impairment to the Securities and Exchange Commission or the Stock Exchange directly.

The Nominating and Remuneration Committee

The Nominating and Remuneration Committee consists of 4 members as follows: No.

Name

1

Mr. Dusit

Nontanakorn

2 3 4

Mr. Dhongchai Lamsam Mr. Suebtrakul Soonthornthum Mr. Suraphand Bhasitnirandr

Position Chairman of Directors Nominating and Remuneration Committee Member Member Member

The Secretary of this Committee is Dr. Dawarit Tansuphasiri.

Annual Report 2010

59


Scope of Authority and Responsibilities of the Nominating and Remuneration Committee 1. Searches for a suitable list of directors and senior executives from the positions of executive directors upwards from individuals inside or outside the Company. 2. Submits nominations of members of the Board of Directors and senior executives who have been short-listed as well proposing their remuneration and other fringe benefits for the approval by the Company’s Board or shareholders. 3. Reviews the ratio, number and qualifications as well as performance evaluation guidelines for directors. 4. Conducts studies in order to make proposals for policies, criteria governing payment of remuneration as well as payment of remuneration and other fringe benefits for the Company’s Board, members of other committee(s) or sub-committee(s) appointed by the Company’s Board. Data for such studies will be compiled by work units in the Company’s organization. 5. Takes other action as assigned by the Company’s Board or the Chairman of the Board or pursuant to Rules of the Office of the Securities and Exchange Commission (SEC) or the Stock Exchange or other laws. Selection Procedures of Directors and Sub-Committee Members As far as search for the Company’s Board of Directors, President and members of the Executive Board right through to members of the sub-committees is concerned, they will be first short-listed and selected from those already screened by the Nominating and Remuneration Committee and then submitted to the Company’s Board of Directors and/or the shareholders meeting for further consideration. Action in this respect will be taken in line with the Company’s policy and matters as suitable qualifications, adeptness and capabilities as well as ability to devote adequate time to the Company’s operations will always be taken into consideration. Appointment and removal of directors will be made by majority votes adopted by meeting(s) of shareholders in accordance with the following criteria and procedure: 1. One shareholder will have one vote for one share. 2. Each shareholder must cast all the votes he/she holds under (1) to select one or several person(s) as director(s) although they may not share out their votes in any more or less manner to any candidate. 3. Person(s) receiving the maximum number of votes in the respective order will be appointed as director(s) for the number of directors to be selected or appointed on that occasion. Where persons selected in the next sequence receive equal votes which exceed the number of director(s) to be selected or appointed on that occasion, the decisive vote shall be cast by the chairman of that meeting. At each Annual Ordinary General Meeting, one-third members of the Board shall retire. The number of directors to retire if there is a fraction of this number shall be the nearest figure to this one-third. Directors to retire in the first and second years after the Company’s incorporation will be decided by lots. For subsequent years, however, director(s) with the longest term in off ice shall retire. However, those who retire at the end of their term may be re-elected. A vacancy in the Board by reasons other than retirement at the end of the term will be filled at the next Board meeting by a qualified person selected by the Board who must not also be subjected to any restriction by law unless the remaining term of that director is less than two months. The replacing director will remain in his/her post only for the remaining term of the directors/he replaces. The Board’s resolution under paragraph one shall consist of not less than three-fourths of votes from the remaining directors.

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Executives Remuneration (1) Remuneration for year 2010 :

1.1 Total remuneration for 16 members of the Company’s Board of Directors was Baht 9,792,000. (constituting meeting allowances*1) 1.2 Total remuneration for the Audit Committee and Nominating and Remuneration Committee members was Baht 1,920,000. (constituting meeting allowances) 1.3 Total remuneration for 10 Executive Board members was Baht 36,720,000 (constituting salaries), with the following details: Notes: *1 The payment was not included the compensation and welfare paid to directors as the Company’s staff or subcommittee of any working group.

(In Baht) Name

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

Mr. Pairote Lamsam Mr. Sukit Wanglee Mr. Dhongchai Lamsam Dr. Harit Sutabutr Dr. Wissanu Krea-ngam Mr. Sirin Nimmanahaeminda Dr. Supavud Saicheua Mr. Charoon Chinalai Mr. Dusit Nontanakorn Mr. Supachai Wanglee Mr. Suebtrakul Soonthornthum Mr. Poomchai Lamsam Mr. Vasant Chatikavanij Mr. Suraphand Bhasitnirandr Dr. Sompop Chareonkul Mr. Suroj Lamsam Total

Company’s Directors

1,152,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 576,000 9,792,000

Remuneration

Audit Committee Members

Nominating and Remuneration Committee Members

-

360,000 240,000 240,000 840,000

240,000 360,000 240,000 240,000 1,080,000

2) Other Compensation

-None-

3) Provident Funds

To encourage savings for its employees and to ensure that they will be equipped with additional welfare measures in time of necessity and on their retirement, the Company and some of its subsidiaries have set up a Contributory Fund and a Provident Fund for permanent employees in which respect monthly contributions will be made by employees at the rate of 5% of their monthly salaries while the Company and its subsidiaries will also make their contributions towards such Contribution Funds and Provident Funds in accordance with rules/regulations set up by that particular company.

Annual Report 2010

61


Corporate Governance The Company has administrated its business in compliance with legal regulations. We are committed to good corporate governance, accountable to shareholders, and all stakeholders. We regularly reviews and adjusts the operation guideline to ensure better and more practical operations. During the past year, the Company conducted its business under good governance principles as follows: 1. Rights of Shareholders The Company arranged the annual ordinary shareholders’ meeting for the year 2010 on 28 April 2010 at Imperial Queen Park Hotel, Sukhumvit 22, Bangkok. In this meeting, the Company informed the meeting schedule to shareholders 30 days in advance of the meeting date via the Stock Exchange of Thailand website and the Company website so the shareholders had the opportunity to study the meeting agenda in advance and submitted such documents to shareholders more than 14 days in advance of the meeting. Each agenda had the Board of Directors’ opinions. The Company also attached the CD-ROM annual report in Thai and English language and published the report for shareholders who expressed their intention to obtain such report in document, and also letter of power of attorney consisting of the explanation of documents used for the power of attorney in order to facilitate the shareholders for voting. In additions, the Company also provided the telephone number for inquiry in case of additional questions. Board of Directors realized the importance of shareholder rights so adequate business information has been provided and decided concerning the Company’s significant changes in accordance with the Corporate Governance guidelines as follows: 1. Ensuring every shareholder has fundamental right • Right to obtain share certificate and right to transfer and obtain sufficient and timely information in the format proper for making decisions that impact the Company and themselves. • Right to attend and vote in the shareholders’ meeting in order to make decisions regarding the alteration of company’s important policies and rights of shareholders that the Board of Directors must request the approval from the shareholders’ meeting. • Right to elect and withdraw the directors and approve the appointment of auditors. • Right to obtain the appropriation of profifit. 2. The shareholders shall obtain the invitation letter and information regarding the place, time, agenda, and items need to be considered. The Company shall provide the proper place and time by informing shareholders at least 14 days in advance of the meeting and advertise such invitation on the newspaper for 3 consecutive days. 3. In the agenda regarding the election of directors, the shareholders are able to elect an individual director and one shareholder has one vote. 4. The Chairman of the Board explains all the rules and methods of counting the number of votes from shareholders in each agenda and during the meeting, the Chairman shall open the opportunity for every shareholder to express his/her opinion and recommendation, and inquire in each agenda, and shall give the suff icient time for discussion. The Chairman, the directors and the executives, and relevant Sub-Committees shall pay attention to every question and answer every question clearly and shall summarize each agenda by voting and counting the number of votes. 5. After the shareholders’ meeting, the shareholders are able to retrieve the meeting report and outcome of the vote from the company’s website within 14 days after the meeting date. 2. Equitable Treatment of Shareholders The Company has treated all shareholders, major, small, individual, and corporate, equally. They all have rights to participate in the Company’s Annual General Meetings and have equally accesses to the information. When an annual general meeting date was set, all the shareholders are informed via the Stock Exchange of Thailand website. In 2010, they were invited to submit agendas and nominate names for Committee election via the Company’s website www.loxley.co.th and the website of SET, one month prior to the meeting. The shareholders shall obtain suff icient, equal, and timely information from the Company prior the meetings. Respective agendas shall be listed in the shareholder meeting as specif ied in the meeting invitation. The Board of Directors shall not add any extra agendas that are not informed in advance. Every shareholder who attends the meeting shall obtain a voting card and the meeting’s chairperson will explain all the rules of using the voting card, counting the number of votes and other relevant information, making sure that all shareholders understand and act accurately. English versions of related documents have been provided for foreign shareholders. For shareholders who are not able to attend the meeting themselves, they are able to exercise the right by giving proxies to other persons to attend and vote in the meeting according to the number of shares they have and in case that the shareholders do not know whom the proxies are, the Company shall provide the letter

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Loxley Public Company Limited


of power of attorney by opening the opportunity for shareholders to giving proxies to one of the independent directors and the Company shall facilitate the shareholders regarding the registration and also provide the duty stamps for the shareholders. In additions to the abovementioned meeting, the Company also offers the equality of obtaining accurate and timely information of the Company by normally disclosing the information via the Stock Exchange of Thailand’s system and then via other mass media in order to be in compliance with the rules, and the shareholders or investors including general people shall realize the information for making decisions regarding the investment. Moreover, the Company shall prevent abuse of internal information for personal benef it which could exploit other shareholders. The Company’s Management must disclose their own interest as well as their related persons in the Company’s transactions and avoid any decision making on such transaction to ensure other executives can make decision based on the Company’s benefits. Furthermore, legal measure is also applied, e.g., the Directors and the Management must report changes of personal assets to the Office of Securities and Exchange Commission according to section 59 of the Securities and Exchange Act 1992 on every sale, transfer, or acquisition of the Company’s assets within 3 days after the transaction date, etc. Furthermore, the Company prohibits the executives or units from disclosing the inside information to outsiders or persons who do not have relevant duties and must maintain the important and undisclosed information as conffiifidential, and must not purchase and sell the Company’s securities within 1 month before the disclosure of quarterly and yearly f inancial statement to the public. Finally, the Company also identifies the rule to prohibit each director and employee from using their duties and authorities or opportunity of working to seek the benef ifit for themselves or others. If any one violates this rule, he/she shall obtain the disciplinary punishment immediately. 3. Role of Stakeholders The Company has put an importance on taking care of both internal and external stakeholders, customers, shareholders, employees, executives, business partners, competitors, including the public and the society as a whole. Therefore, policies on rights of each stakeholder group have been set. Each stakeholder can communicate with the Board of Directors through its contact person or the Company’s Public Relations Department. Guidelines in respond to the need of each group of stakeholders can be listed as follows: Customers and the Public : The Company has set up the fair price policy according to the quality of products, has provided fair terms and conditions and responsibilities to maintain long-term relationship with customers. We have also given an importance on keeping customer’s conf idential information. We have informed complete, accurate, undistorted and timely information to customers, and are happy to accept comments by customers for better quality of products and services in the future. Shareholders : The Company’s directors are committed to being good representatives of shareholders in conducting the business with capability and care to be fair to all groups of shareholders, executives, non-executives and foreigners, for sustainable growth. Employees and Executives : The Company has set up proper compensation structure, that is in line with the market rates and according to knowledge, skill, responsibility and behavior of each employee. We have also provided welfares and other fringe benefits to employees. The past year, several projects were organized to support and promote teamwork and develop employees’ potentials to upgrade their expertise. Good and safety work environment was also provided for better physical and mental health of employees at all levels. Business Partners : The Company has focused on procurement, which is an important process concerning expenses and product quality. We have selected good bidders, paid serious attention to bidding, and have never invited bidders just to complete the number required by the company’s rules. All bidders must get the same details, information and terms. No products or services have been purposely specif ied in favor of any bidder unless adequate reasons are provided. All bidders are given equal opportunity while all executives and employees related to procurement must prove their transparency in conducting their business to ensure fairness and good image of the Company. Competitors : The Company has promoted free and fair competition. We have never accused and defamed our competitors without any facts. The Company has focused on the competition in terms of quality, product eff iciency, and service, bearing in mind maximum beneffiifits of customers and maintaining overall business image. Community and Society : The Company have encouraged executives and employees to be good members of the society. For the company’s sustainable development, a Corporate Social Responsibility Department was established in 2010 to perform CSR activities within nearby communities with cooperation from employees, governmental and non-governmental agencies. Last year’s activities and projects include: - Two police service centers: one for Tung Mahamek Police Station and the other for Ta Rue Police station to help facilitate people in the areas to report incidents. Annual Report 2010

63


- Setting up of the “Volunteer Spirits (Jit Asa)” Project to conduct community activities, such as renovation of the educational center of Talad Penang Community, teaching children in the communities and handicraft training for people in the communities and the general public. - Promoting OTOP products from several areas to upgrade the lives of people in those areas. For example, we have acted as distributor for nectar drinks of Samut Sakhon province, and Nong Poh dairy products of Ratchburi province. - joining “Thailand Energy Award 2010” project of Ministry of Energy in conserving energy and environment by installing a building control intelligence system to save energy consumption within the Company, thereby reducing usage of chemicals, which cause CO2 emission. A highstandard wastewater treatment was also installed.

4. Disclosure of Information and Transparency To assure all the shareholders of the company’s business transparency, accuracy and fairness, the Company has complied with the Stock Exchange of Thailand’s guidelines on accurate, complete, and transparent disclosure of information via various communication channels as follows: 1. The Company’s website, www.loxley.co.th, is a communication channel for investors and the general public to access to the company’s information anytime, anywhere. 2. A Securities Division is established to be responsible for revealing important information, both fifinancial and non-fifinancial, which includes the Company’s reports, performances, quarterly and annual f inancial reports, important resolutions approved by the Board of Directors of the Company and its subsidiaries, and other announcements in compliance with the Offfiifice of Securities and Exchange Commission and Stock Exchange of Thailand’ regulations. 3. The Company has completely, accurately, and timely disclosed the fifinancial information and report of the Board of Directors’ responsibilities for financial statements and the auditor’s report, MD&A, general information and important information in the annual report, and form 56-1 in order to be in compliance with the Office of Securities and Exchange Commission and Stock Exchange of Thailand’ requirements. 4. The Company has disclosed roles and responsibilities of the Board of Directors and Sub-Committees, number of meetings, and number of times that each director attends the meeting in the year 2010. 5. The Company has disclosed the directors’ and executives’ remuneration that reflffilects the duties and responsibilities of each person, and pattern or characteristic of the remuneration in the year 2010. The Nominating and Remuneration Committee has considered the director’s remuneration by comparing with the companies registered in the Stock Exchange of Thailand within the same industry and comparable business size. 6. The Company has assigned its President and high level executives to be responsible for investor relations work to communicate and provide investors with accurate information. In addition, meetings among high level executives, institutional investors, analysts and media are regularly held. We have also provided information to all companies who paid visits to the company in order to build up good relationships and exchange opinions for future improvement. 7. The Company have disseminated up-to-date news and activities to all the employees and executives in form of newsletters and intranet communication. 5. Accountability of the Board The Company has realized the roles and responsibilities of its Board of Directors by emphasizing on proper Corporate Governance for the Company’s maximum benefif it. The Directors and the Management shall perform their functions with responsibility, care, and honesty. As a result, the Company has clearly specif ied the structure, roles, and responsibilities of its directors as well as respective sub-committees in compliance with principles of Corporate Governance as follows: 5.1 Structure of the Board of Directors In 2010, the Board of Directors consisted of 16 members, 6 of whom are the company executives. Six of the remaining non-company executives are independent and the rest are Audit Committee members and external directors. In other words, more than half of the Company’s Board of Directors is independent and/or non-management directors. Seven members of the Board are from engineering fiffiield while two from laws and administration field; four from economic science and management fields; and three from accounting and financial fields. All the Directors are qualifified according to the Public Company Act 1992 and the Securities and Exchange Act 1992. The independent directors and other directors from outside the Company are ready to freely apply their judgment for identifying the strategy, management, resource utilization, director’s appointment, and business operations standard, and ready to object other directors or management’s conduct in case of the objection regarding the issue that may impact the equality of every shareholder. Therefore, the Company is confifident that the Board of Directors has proper check and balance and is

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able to freely perform their duties as the representative of shareholders and this abovementioned will prohibit any persons or groups to have unlimited authority. The Company has identifif ied the qualif ications of independent directors in order to be in compliance with the Off ice of Securities and Exchange Commission and Stock Exchange of Thailand’ requirements so the Company’s independent directors have genuine freedom. The Company has clearly classified the position, duties, and authorities of the Board. The Chairman shall not hold another position as the President and must not be the Company’s employees or executives. The Chairman acts as the Chairman of the Board of Directors and oversees the administration work of the administration team. The chairman can give advice and assistance but cannot participate or intervene in daily administration tasks. The President acts as the Chairman of the Company’s executives and has authority and responsibility under the administration framework assigned by the Board of Directors. In additions, the Chairman shall not hold any positions in the Sub-Committee. The authority of the Board of Directors and the Sub-Committee such as Audit Committee, Nominating and Remuneration Committee has been clearly classified. The Chairman of the Sub-Committee must be the independent director so the action performed by the Sub-Committee has genuine freedom and every director must have freedom of expressing his/her opinions towards the company’s business operations in order to supervise the eff icient, accurate, and transparent Company’s business operations. The Board of Directors has taken care of the identif ication of policies, strategies, and maintained the benef it of shareholders. For the daily business operations and company’s business performance, the Executive Board shall perform the duties according to the goal specified by the Company. The authority of the Board of Directors and the Sub-Committees has been clearly classified under the Management. The Company Secretary was appointed to give legal advices, to inform rules and regulations the Board of Directors needed to know and perform, to prepare for meetings, to keep important documents as specif ied by law, to oversee the business administration of the Board of Directors and of the Management’s team in compliance with the law, as well as to conduct any related activities set forth by the Stock Exchange Commission. 5.2 Sub-Committee In order for the maximization of the goal of good corporate governance, the Board of Directors has appointed the members of the Committees who are knowledgeable and prof icient to be the Sub-Committee in order to assist the study of details and screen the Committee’s work more efficiently. Currently, there are sub-committees, namely, Executive Board, Audit Committee, Nominating and Remuneration Committee with the clear structure, duties and responsibilities specif ied (for the details of roles, duties, and responsibilities, they shall be explained under Management). 5.3 Roles, Duties and Responsibilities of Committee The Company has realized the importance of its Board of Directors’ performance with responsibilities and honesty. The Company has clearly specified the structure, roles, and responsibilities of its Committees as well as respective Management Executives where the Board of Directors is responsible for corporate policy making and regulation while the Management Executives are responsible for operational management according to the company policies. The Committee also reviews the policy regarding the company’s corporate governance and regularly evaluates the performance according to such policy. The Company has clearly prepared the manual “Company’s Business Ethics” in writing so the directors, executives, and employee at every level are able to realize and apply to be the standard of conduct. Therefore, they are able to perform their duties with honesty, integrity, and fairness according to the Company’s mission towards both the Company and every parties with vested interests. The Company has regularly communicated with the employees and monitored the performance according to such abovementioned guidelines. In addition, the Company’s Board of Directors has identified the policy concerning the conflffllflict of interest on the principle that the Company shall not support the related transactions with persons that may lead to conflffllflict of interest. In case that such transaction must occur, they shall be according to the guideline of normal business operations like transactions with outsiders. If any transactions are not in compliance with the guideline of normal business operations, the Company shall perform according to the step of approving the related transactions where Directors, Executives, and related personnel are required to provide additional information for such transaction for the Company Secretary in accordance with the regulation set forth by the Securities and Exchange Commission (SEC) and forfeit the right to ballot in such transaction. The executive directors has provided the efficient internal control system, regularly monitored and evaluated the system. In case of any abnormal circumstances, they shall be thoroughly audited and rapidly solved the problems. The internal control system is the important mechanism of management in order to help reduce business risk and stabilize the business operations to attain the specified goals, and help protect the company’s properties from any leakages, and also protect the benefit and investment of shareholders.

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5.4 Committee’s Meeting The Company has identified the schedule of the Committee’s meetings in advance except the special agenda. In such case, the Chairman or Directors according to the number specified by the law are able to call for additional meetings deemed as appropriate. The Chairman or Chairman of the meeting shall rely on the policy to support the consideration of various issues with transparency and shall allocate suffificient time for presenting the details and answering the questions. The Secretary shall submit the meeting agendas and documents in advance of the meeting date. In additions, The Company has also prepared the meeting report in writing and stored such reports orderly for auditing and the auditors shall audit the report every quarter. For other Sub-Committees, the meeting shall be separately conducted and such Sub-Committees shall perform according to the abovementioned (for details of number of the Board of Directors’ meeting in the year 2009, they are explained in the topic of Management). 5.5 Committee’s Self-evaluation In the Board of Directors’ meetings, each director shall report the business performance under his/her responsibility so the Committee is able to consider the performance, propose the opinions, and inquires various questions for further improvement. 5.6 Remuneration Regarding the identification of director’s remuneration, the Nominating and Remuneration Committee shall consider before proposing to the Company’s Board of Directors and shareholders for approval. The Nominating and Remuneration Committee has set the criteria for consideration by comparing with other companies in the same industry. The rate shall not be too high but shall be proper and sufficient for motivating and maintaining the qualified directors. The director’s remuneration shall be disclosed in the annual report as specified by the Offiffiice of Securities and Exchange Commission. 5.7 Development of Directors and Executives The Company has realized the importance of personnel development at every level, especially directors, and executives since this group of personnel must be seriously developed and must always have updated opinions in order to adjust the business operations’ strategies to be in compliance with the conditions of business operations. The Company has periodically arranged training, seminar, and brainstorming by inviting experts from various institutes to be the instructor. In addition to the managerial development, the Company has realized the importance of personality development and ethics for executives. The training schedule for directors and executives is under the annual action plan of the Human Resource Department. In additions, persons who have the potential to be promoted to the executives or high level executives must pass various curriculum in order to develop themselves according to the succession planning criteria and the Company has identified various curriculums classified by each level of executive and the Company’s performance shall be reported in the Board’s meetings. Monitor on the use of inside information It is the Company’s policy to oversee that its executives would not be using the Company’s inside information for their own benefits and to ensure that trading of securities are conducted in line with legal requirements, i.e. its directors and the executives are required to report on the changes of their securities holdings to the Off ice of the Securities and Exchange Commission by virtue of Section 59 of the Securities and Exchange Act 1992. They are required to submit such report each time a sale, purchase, transfer or acceptance of transfer of the Company’s securities takes place within 3 business days from the date of such transaction. In addition, any executive or work unit which has come into knowledge of inside information shall not disclose any of such information to a third party or to those who have no duty to be involved with the matter and to keep such major information which has not as yet been disclosed as confidential and restricted to senior executives involved with the issues only. For example, they will not buy or sale or offer or persuade others to buy or sell Company’s securities both directly and indirectly within one month, before the declaration of quarterly and annually fifinancial statement to the public. Furthermore, the Company sets regulations not allow every board member and employee to use their authority or opportunity to work for their own or other person benefits. Those who violates will face a disciplinary action immediately.

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Loxley Public Company Limited


Personnel The Company has never had any labor argument for the past 3 years. As at 31 December 2010, it had 720 permanent staff, and 71 contract staff, divided by groups as follows: Segment

Total (Personnel)

ICT Group Technology Business Group Project Business Group Trading Business Group Special Projects Group Joint Venture Business Group Office of the President Finance and Administration Group Internal Audit Department Human Resources Department Corporate Communication Department Corporate Social Responsibility

110 130 157 167 21 18 41 110 7 16 11 3

Total Employees

791

Personnel Policy To accomplish the corporate visions, the Company clearly identif ied goals and missions both on organizational unit basis and individual basis. The Company developed personnel competency by training and development systems. It sent appropriate and potential staff to attend necessary training and development courses to uplift their knowledge, understanding, technology, and work skills. The Company organized both internal and external training programs by either inviting knowledgeable speakers/trainers, or sending its staff to attend courses organized by external training organizers. Also, it sponsored its staff on overseas training programs or field trips to learn more work skills and services in business sectors or in technology not available in Thailand. The Company continued implying the Appropriate Remuneration Policy by considering both Performance-based Pay and Variable Pay. It also emphasized on organizing activities to promote internal communication, and various personnel relation activities to gain more participation resulting in positive relationship among staff. Also, it conducted the personnel development schemes with emphasis on current skill, knowledge and competency development as well as preparation for the career growth in conjunction with the Succession Planning, especially in executive levels. Total Personnel Remuneration of Company staff from January to December 2009 in form of salaries, wages, overtime, and bonus is Baht 384 million.

Annual Report 2010

67


68

Loxley Public Company Limited

4,659,840 0.23%

25,459,090 1.27%

2. Mr. Sukit Wanglee 80 - Mechanical Engineering Vice Chairman Leicester College, England - Director Accreditation Program 12/2004 Thai Institute of Directors Association

64 - Bachelor of Science (Honors),Chemical 3. Mr. Dhongchai Lamsam Technology, Chulalongkorn University - President - M.Sc. Industrial Engineering Illinois - Nominating & Institute of Technology, U.S.A. Remuneration - Advanced Management Program, Committee Member Harvard Business School, U.S.A. - Director Accreditation Program 12/2004 Thai Institute of Directors Association

Own

1,112,870 0.06%

None

None

Spouse & Children below 20 Years old

Shareholding Ratio (%)

35,589,030 1.78%

Education / Training

1. Mr. Pairote Lamsam 77 - B.A.(Commerce) University of Chairman Manchester England - Director Accreditation Program 17/2004 Thai Institute of Directors Association

Name-Surname Age (Years) Position

Information of Company Executives

Brother of Mr. Pairote Lamsam and Mr. Poomchai Lamsam Brother-in-law of Dr. Jingjai Hanchanlash Uncle of Mr. Vasant Chatikavanij and Mr. Suroj Lamsam Father of LT. Chalermchoke Lamsam

Brother of Mr. Supachai Wanglee

Brother of Mr. Dhongchai Lamsam and Mr. Poomchai Lamsam, Brother-in-law of Dr. Jingjai Hanchanlash Uncle of Mr. Vasant Chatikavanij, Mr. Suroj Lamsam, and LT. Chalermchoke Lamsam

Family Relationship among Executive Position

Chairman Chairman Chairman Director Director Vice Chairman

2010-present Director 2006-present Chairman Director 2005-present Director 2003-present Director 2001-present Director 2000-present Director 1999-present Director 1998-present Chairman 1996-present Director Director Director 1995-present Director 1994-present Director 1990-present Managing Director 1989-present Director Director 1983-present President 1981-present Managing Director 1977-present Director 1972-present Director

2010-present 2003-present 1996-present 1990-present 1984-present 1982-present

2010-present Director 2000-present Advisor to the Board 1995-present Chairman Director Director 1991-present Director 1990-present Chairman Chairman 1989-present Director 1981-present Director 1972-present Director 1969-present Chairman 1960-present Managing Director

Duration

Loxley Joint and Hold Company Limited Asia Security Management Company Limited Loxley Global Company Limited L-TAG Technologies Company Limited Loxley GTECH Technology Company Limited Loxley Wireless Company Limited Law Enforcement Technology Solutions Co.,Ltd. Poonsap Communication Company Limited Oriental Post Company Limited Jago Company Limited Thai Fiber Optics Company Limited General Aviation Company Limited Data Mining Company Limited BP – Castrol (Thailand) Limited Ekpavee Company Limited Loxley Property Development Company Limited BlueScope Lysaght (Thailand) Limited Loxley Public Company Limited Loxley International Company Limited Loxley Trading Company Limited Zin Suapah Company Limited

Thai Metal Drum Manufacturing Public Company Limited Rojana Industrial Park Public Company Limited Poonphol Company Limited Ekpavee Company Limited Siam Sanitary Ware Company Limited Loxley Public Company Limited

Loxley Joint and Hold Company Limited Kasikorn Bank Public Company Limited Loxley Trading Company Limited BlueScope Steel (Thailand) Limited BlueScope Lysaght (Thailand) Limited BP – Castrol (Thailand) Limited Loxley Public Company Limited Ekpavee Company Limited Loxley Property Development Company Limited Loxley International Company Limited Zin Suapah Company Limited Siam Sanitary Ware Company Limited Lamsam Estate Company Limited

Organization

Work Experience for the Past 5 years


Annual Report 2010

69

6. Mr. Sirin 63 - M.BA. Stanford University, Palo Alto, California, U.S.A. Nimmanahaeminda - B.A. (Economics), University of Michigan, Independent Director Ann Arbor, Michigan, U.S.A. None

None

59 - LL.D. Honoris Causa Chulalongkorn University 2001 - Certificate from National Defense College 1997 - J.S.D. University of California, Berkeley 1976 - LL.M. University of California, Berkeley 1974 - Barrister-AT-Law (Thai) 1973 - LL.B. (Hons. 1st Class) Thammasat University 1972 - Director Accreditation Program 68/2008 Thai Institute of Directors Association

5. Dr. Wissanu Krea-Ngam Independent Director

Own

None

None

None

Spouse & Children below 20 Years old

Shareholding Ratio (%)

52,500 0.003%

Education / Training

4. Dr. Harit Sutabutr 74 - Ph.D. Mechanical Engineering - Independent University of California, Berkeley Director - Director Accreditation Program 16/2004 - Chairman of the Thai Institute of Directors Association Audit Committee

Name-Surname Age (Years) Position

Information of Company Executives

None

None

None

Family Relationship among Executive Position

Organization

2008-present Independent Director Director to the Risk 2007-2010 Management Committee Independent Director, 2006-2010 Director to the Audit Committee, and Director to the Remuneration Committee Director and Executive 2006-2007 Board Chairman 2005-2007 2002-present Chairman, Independent Director, and Chairman of the Audit Committee 2001-present Chairman of the Executive Board 1996-present Vice Chairman, Director to the Risk Management Committee

2009-present Chairman 2008-present Chairman Chairman Independent Director 2007-2009 Director 2006-present Chairman 2006-2007 Member of National Legislative Assembly Deputy Prime Minister 2002-2006 Secretary General of the 1993-2002 Cabinet Senator 1992-2000

Double A (1991) Public Company Limited

Niyom Panich Group of Companies

Thai Sri Insurance Company Limited Trinity Wattana Public Company Limited

Thai Airways International Public Company Limited

Loxley Public Company Limited PTT Exploration and Production Public Company Limited PTT Exploration and Production Public Company Limited

Senate

Government House Government House

Amata Corporation Public Company Limited BFIT Security Public Company Limited Bangkok First Investment and Trust Plc. Loxley Public Company Limited Amata Corporation Public Company Limited Sikarin Public Company Limited National Legislative Assembly

2002-present Senior Adviser to the Director National Science and Technology Development Agency 1999-2002 Acting Deputy Director National Science and Technology Development Agency 1998-present Vice Chairman of the King Mongkut’s University of Technology Thonburi University Council 1993-present Independent Director Loxley Public Company Limited 1992-1998 President King Mongkut’s University of Technology Thonburi 1987-1999 Director National Center for Metal & Material Technology, National Science and Technology Development Agency, Ministry of Science and Technology

Duration

Work Experience for the Past 5 years


70

Loxley Public Company Limited

None

9. Mr. Dusit Nontanakorn - Independent Director - Chairman of the Nominating & Remuneration Committee

63 - MBA.(1977) Marketing, University of California at Los Angeles - M.S.(1969) Structural Engineering, Ohio State University - B.E.(1968) Civil Engineering, Youngstown State University,Ohio - Director Certification Program 24/2002 Thai Institute of Directors Association

None

8. Mr. Charoon 72 - Civil Engineering King’s College London University, England Chinalai - Director Accreditation Program 12/2004 - Independent Thai Institute of Directors Association Director - Audit Committee Member

Own

None

None

None

Spouse & Children below 20 Years old

Shareholding Ratio (%)

None

Education / Training

7. Dr. Supavud 53 - Ph.D. in Economics Saicheua University of Hawaii at Manoa, U.S.A. Independent Director - M.A. in Economics University of the Philippines (Diliman), Philippines - B.A. in Economics Victoria University of Wellington, New Zealand - Director Accreditation Program 36/2005 Thai Institute of Directors Association

Name-Surname Age (Years) Position

Information of Company Executives

None

None

None

Family Relationship among Executive Position

The Thai Chamber of Commerce and Board of Trade of Thailand Board of Investment Amata Corporation Public Company Limited The Thai Chamber of Commerce Loxley Public Company Limited The Siam Cement Public Company Limited

2009-present Chairman Director 2008-present Director Vice Chairman 2007-2009 2005-present Independent Director Advisor to the President & CEO

Parinda Public Company Limited Loxley Public Company Limited CoffarlThai Company Limited EkThana Engineering Company Limited

National Research Council of Thailand

Golden Land Property Development Public Company Limited Securities Analyst Association The Economic Society of Thailand Government Pension Fund

Industrial Estate Authority of Thailand

Loxley Public Company Limited Macro Economic Steering Committee, Office of the Prime Minister The National Economic and Social Development Board (NESDB) Kenan Institute Asia Phatra Securities Public Company Limited

Government Pension Fund

Organization

1992-present Director 1980-present Independent Director Director Director

2005-present Executive Director Managing Director (Head of Research) 2004-Jan 2006 Advisor to the Board of Directors Director and Independent 2004-2005 Director 2003-2005 Director Committee 2002-2006 2001-2003 Investment Expert of Investment Committee Research Committee on 1999-2005 Economics

2006-present Sub-Committee Trustee

2008-present Investment Expert of Investment Committee 2007-present Independent Director 2007-Jan 2008 Committee

Duration

Work Experience for the Past 5 years


Annual Report 2010

71

77 - Master of Engineering University of Pennsylvania, U.S.A. - Director Accreditation Program 12/2004 Thai Institute of Directors Association

- Chairman 2000 Thai Institute of Directors Association - Audit Committee Program 10/2005 Thai Institute of Directors Association - Advanced Management Program Harvard University - Public Director Institute (PDI), state Enterprise Policy Office, Ministry of Finance 2009

Education / Training

11. Mr. Suebtrakul 68 - MBA, Curtin University, Australia - PMD. Harvard University, Soonthornthum Graduate School of Business - Director Administration - U.S.A. - Senior Executive - National Defense College - Thailand Vice President - Director Accreditation Program 17/2004 - Nominating & Thai Institute of Directors Association Remuneration Committee Member

10 . Mr. Supachai Wanglee Director

- Audit Committee Member

Name-Surname Age (Years) Position

None

2,897,530 0.15%

Own

None

None

Spouse & Children below 20 Years old

Shareholding Ratio (%)

Information of Company Executives

None

Brother of Mr.Sukit Wanglee

Family Relationship among Executive Position

Director Director Director Director Director Director Director Director Director Managing Director Director Director Director Director Director Chairman Director Independent Director Chairman Senior Executive Vice President 1991-present Chairman 1987-present Director Director 2010-present 2006-present 2004-present 2000-present 1999-present 1996-present 1992-present

1970-present 1967-present 1964-present 1962-present

1977-present 1982-2010 1977-present 1976-present 1973-present 1971-2010

2002-present Director 2002-2006 Chairman 1999-2007 Member of the Executive Board of Directors President 1999-2005

Duration

Guardfifire Limited BlueScope Lysaght (Thailand) Limited BlueScope Steel (Thailand) Limited

Loxley Joint and Hold Company Limited Asia Security Management Company Limited United Overseas Bank (Thai) Public Company Limited Muang Thai Real Estate Public Company Limited BP - Castrol (Thailand) Limited Vanachai Group Public Company Limited Foseco (Thailand) Limited Loxley Public Company Limited

Loxley Public Company Limited Sathon Thani Company Limited Supha-Aroon Company Limited Pathaweewathana Company Limited Tawara Company Limited Poonpatanakran Company Limited Suep Siri Company Limited Pipatanasin Company Limited Pirakit Company Limited CES Company Limited Poopipat Company Limited Poonvanich Company Limited

Cementhai Distribution Company Limited

Siam Future Development Public Company Limited Thailand Management Association Vajiravudh College

Organization

Work Experience for the Past 5 years


72

Loxley Public Company Limited

61 - B.A. Political Science, (1973) University of Colorado, U.S.A. - Strayer College, U.S.A. - Trent College, England - Saint Gabriel, Thailand - Director Accreditation Program 28/2004 Thai Institute of Directors Association

54 - M.S.Chemical Engineering Lehigh University, U.S.A. - B.S.E. Chemical Engineering, Princeton University, U.S.A. - Director Accreditation Program 12/2004 Thai Institute of Directors Association

59 - Master Degree in Business Administration, University of West Los Angeles, U.S.A. - Bachelor Degree in Accountancy (Honours), Chulalongkorn University - Director Accreditation Program 12/2004 Thai Institute of Directors Association - Certificate Politics and Governance in Democratic Systems for Executives Course King Pradjadhipok’s Institue 10/2006 - Certificate Capital Market Academy Leader Program Capital Market Academy 5/2007

13. Mr. Vasant Chatikavanij - Director - Executive Vice President

14. Mr. Suraphand Bhasitnirandr - Director - Executive Vice President - Nominating & Remuneration Committee Member

Education / Training

12. Mr. Poomchai Lamsam Director

Name-Surname Age (Years) Position

100,000 0.005%

1,849,980 0.09%

1,000,000 0.05%

Own

None

275,000 0.01%

55,250 0.003%

Spouse & Children below 20 Years old

Shareholding Ratio (%)

Information of Company Executives

None

Nephew of Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, and Mr. Poomchai Lamsam Nephew-in-law of Dr. Jingjai Hanchanlash Cousin of Mr. Suroj Lamsam and LT. Chalermchoke Lamsam

Brother of Mr. Pairote Lamsam and Mr. Dhongchai Lamsam Brother-in-law of Dr. Jingjai Hanchanlash Uncle of Mr. Vasant Chatikavanij, Mr. Suroj Lamsam, and LT. Chalermchoke Lamsam

Family Relationship among Executive

1999-2007

2010-present 2008-present 2008-2010 2007-2010 2007-present 2005-present

2006-present 2001-present 1999-present 1995-present 1993-present 1989-present 1981-present 2005-2007 2002-2008 1994-2008 1984-2007

2009-present 2008-present 2007-2010

1987-present

1989-present 1988-present

2010-present

Duration

Director Director Director Executive Vice President Director Chairman Director Director Executive Director

Director Chairman Executive Vice President Director Director Chairman Director Chairman Director Chairman Director Director Director Director Chairman Senior Executive Vice President

Director and Advisor Advisor Director Director Director Vice Chairman

Position

Parts Zone (Thailand) Company Limited Loxley Property Development Company Limited MOCAP Limited Loxley Public Company Limited Loxley Trading Company Limited L-Elevator and Engineering Company Limited Guardfifire Company Limited L-TAG Technologies Company Limited Loxley Public Company Limited

Muangthai Asset Company Limited E-Cart Studio Company Limited Loxley Public Company Limited Mobile Innovation Company Limited Loxley Wireless Company Limited NetONE Network Solution Company Limited TT&T Public Company Limited Loxbit PA Public Company Limited Data Mining Company Limited LOXBIT Public Company Limited Loxley Property Development Company Limited Loxley International Company Limited Teleinfo Media Public Company Limited CS Loxinfo Public Company Limited MOCAP Limited Loxley Public Company Limited

Muang Thai Life Assurance Company Limited Muang Thai Insurance Public Company Limited Loxley Public Company Limited Muangthai Real Estate Public Company Limited Muangthai Fortis Holding Company Limited Phatra Leasing Public Company Limited

Organization

Work Experience for the Past 5 years


Annual Report 2010

73

61 - B.Commerce (1st Class Honours), Chulalongkorn University - MBA, (Marketing), University of Wisconsin-Madison, U.S.A. - M.S. (Business Administration), University of Wisconsin-Madison, U.S.A. - Ph.D.(Business Administration), University of Wisconsin-Madison, U.S.A. - National Defense College (4212) - Director Accreditation Program 15/2004 Thai Institute of Directors Association - Advanced Security Management Program National Defense College

Education / Training

17. Lt. Suchin 74 - Aeronautical Engineering, UK. Baholyodhin RTN. Executive Vice President

16. Mr. Suroj Lamsam 44 - MM, Sasin Graduate Institute of Business Administration of Chulalongkorn - Director - MA., Communications, New York University - Executive Vice New York, U.S.A. President - BA, Marketing and Consumer Studies Syracuse University, Syracuse, New York - Graduate Diploma in Management of Public Economy King Prajadhipok’s Instiute - Director Accreditation Program 40/2005 Thai Institute of Directors Association

15 Dr. Sompop Chareonkul - Director - Executive Vice President

Name-Surname Age (Years) Position

None

None

1,137,150 0.06%

520,000 0.03%

None

Spouse & Children below 20 Years old

800,000 0.04%

Own

Shareholding Ratio (%)

Information of Company Executives

None

Nephew of Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, and Mr. Poomchai Lamsam Nephew-in-law of Dr. Jingjai Hanchanlash Cousin of Mr. Vasant Chatikavanij and LT. Chalermchoke Lamsam

None

Family Relationship among Executive

2007-2010 2003-2007 1996-present

2004-2008 2004 2000-present 1999-present

2005-present

2009-2010 2008-2010

2002-2004 1998-present 1997-2006 1994-present

2003-2007

2005-2006

2007-present 2006-2007 2005-present

2007-2008

2008-2010

Duration

Loxley Public Company Limited Asia Security Management Company Limited

Organization

Executive Vice President Executive Director Director

Executive Director Executive Vice President President President President Director President Executive Director Director Director Director Director Director

Loxley Public Company Limited Loxley Public Company Limited General Aviation Company Limited

Office of Small and Medium Enterprises Promotion Loxley Public Company Limited Loxley Property Development Company Limited Data Mining Company Limited Thai Gateway Company Limited TT&T Public Company Limited L-Mobile & Computer Company Limited Loxley Public Company Limited L-Mobile & Computer Company Limited Point Asia Dot Com Company Limited Thanakorn Vegetable Oil Company Limited Navakij Company Limited The Lamsam Estate Company Limited

Law Enforcement Technology Solutions Company Limited The Central Committee on the Price of Goods and Services, Ministry of Commerce Honorary Counsel Software Industry Promotion Agency (Public Organization) Member The Civil Service Sub-Commission on Ethics Promotion for Public Sector Transparency National Campaign Against Vote-Buying Following Member a Sensational Leak of the Council for Nation Security Loxley Trading Company Limited Director The National Legislative Assembly, Thailand Member Chairman of the Executive Progress Information Company Limited Board Committee Customer Services Quality Assurance Thai Airways International Public Company Limited Committee Special Sub-Commission on Effective Public Sector Human Resource Management Committee Public Ware House Organization Executive Director Oriental Post Company Limited Director Diana Department Store Public Company Limited Director Societe Commerciale Lao Company Limited

Executive Vice President Chairman of the Executive Board Chairman of the Executive Board Qulified Director

Position

Work Experience for the Past 5 years


74

Loxley Public Company Limited

3,733,750 0.19%

None

1,997,000 0.10%

Spouse & Children below 20 Years old

Son of Mr. Dhongchai Lamsam Nephew of Mr. Pairote Lamsam, and Mr. Poomchai Lamsam Newphew-in-law of Dr. Jingjai Hanchanlash Cousin of Mr. Vasant Chatikavanij and Mr. Suroj Lamsam

None

Brother-in-law of Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, and Mr. Poomchai Lamsam Uncle-in-law of Mr. Vasant Chatikavanij, Mr. Suroj Lamsam, and LT. Chalermchoke Lamsam

Family Relationship among Executive

Remark : Director No.1-3 and 10-16 are directors who have the authorizes to sign and binding the Company specified in Company’s Certificate.

9,406,370 0.47%

None

66 - B.Engineering Chulalongkorn University - Director Accreditation Program 12/2004 Thai Institute of Directors Association

19. Mr. Trichakr Tansuphasiri Executive Vice President

20. LT. Chalermchoke 37 - Bachelor of Business Administration, Lamsam Chulalongkorn University Executive Vice - MBA, Seattle University, U.S.A. President - Public Administration and Public Laws, King Prajadhipoks Institute

500,000 0.03%

Own

Shareholding Ratio (%)

68 - Doctorat d’University de Caen (mention droit), France - Certificate in Project Analysis, University of Connecticut, U.S.A. - Certificate in Mid-Career Management Training, University of Western Ontario, Canada - Director Accreditation Program 1/2003 Thai Institute of Directors Association - Audit Committee Program 19/2007 Thai Institute of Directors Association

Education / Training

18. Dr. Jingjai Hanchanlash Executive Vice President

Name-Surname Age (Years) Position

Information of Company Executives Position

2004-2005 Senior Manager 2002-2003 Manager 2000-present Executive Director Director 2000-2001 Assistant Manager 1997-2000 Officer, Directorate of Intelligence

2010-present Director Director Director 2008-2010 Executive Vice President 2006-2008 Executive Director 2006 Assistant Vice President 2005-present Director Director 2005-2006 Assistant Vice President (Marketing) 2002-present Director

President and Chief Executive Offiffiicer 1999-2010 Executive Director 1997-present President

2003-2010

1996-present

1997-present

1999-present

2003-2008 2002-present 2001-present 2000-present

The Office for National Education Standards and Quality Assessment (Public Organization) Loxley Public Company Limited King Prajadhipok Institute Saranrom Institute of Foreign Affairs Foundation National Science and Technology Development Board Asian Phytoceuticals Public Company Limited

Organization

Law Enforcement Technology Solutions Company Limited Loxley Public Company Limited Loxley Public Company Limited Loxley International Company Limited LTS Travel Service Company Limited Loxley Public Company Limited Royal Thai Army

Loxley Wireless Company Limited Loxley Property Development Company Limited L Solar 1 Company Limited Loxley Public Company Limited Asia Security Management Company Limited Loxley Public Company Limited Thai Fiber Optics Company Limited L-TAG Technologies Company Limited Loxley GTECH Technology Company Limited

Loxley Public Company Limited Jago Company Limited

Loxley GTECH Technology Company Limited

Alliance Francaise Honorary Consulate of Jamaica in Thailand SPIE Oil & Gas Services (Thailand) Limited Board of Trustees, Certer for Dispute Resolution, Khon Kaen University Executive Director Loxley Public Company Limited Member National Education Council Independent Director Laguna Resorts & Hotels Public Company Limited Chairman Loxley Pacific Company Limited, DPR Korea Independent Director Thai Wah Food Public Company Limited Chairman Rutnin-Gimbel Excimer Laser Eye Centre Member Council University of Thai Chamber of Commerce Chairman French-Thai Business Council Secretary General Development Cooperation Foundation Director of the Executive Thai Chamber of Commerce Board Member of the Executive Mekong Region Law Centre Board

2009-present Chairman of the Executive Committee 2008-2010 Executive Vice President 2007-present Member of the Council Member Qualified Member 2005-present Director and Executive Director 2004-present President Honorary Consul 2003-present Director Chairman

Duration

Work Experience for the Past 5 years


Loxley Plc. 1. Loxley Wireless Co., Ltd.

P

/

/ C

/

/

/

/

P

/ /

/

/

/

/

/

/

C

/ /

/

/

C

13. Loxbit PA Plc.

/

2. Loxbit Plc.

C

/

3. Jago Co., Ltd.

/

4. Data Mining Co., Ltd.

/

5. Loxley Joint and Hold Co., Ltd.

/

6. Asia Security Management Co., Ltd.

C

10. Loxley Global Co., Ltd.

C

C

C

14. NetONE Network Solutions Co., Ltd.

/

C

7. Societe Commercial Lao Co., Ltd.

C

8. Parts Zone (Thailand) Co., Ltd.

/

/

15. Thai Gateway Co., Ltd.

Annual Report 2010

Remark: C=Chairman P=President /=Director //=Senior Executive Vice President ///=Executive Vice President

C / P / / / / / / / // / /// /// /// /// /// /// //// ////

9. Loxley Property Development Co., Ltd.

Mr. Pairote Lamsam Mr. Sukit Wanglee Mr. Dhongchai Lamsam Dr. Harit Sutabutr Dr. Wissanu Krea-ngam Mr. Sirin Nimmanahaeminda Dr. Supavud Saicheua Mr. Charoon Chinalai Mr. Dusit Nontanakorn Mr. Supachai Wanglee Mr. Suebtrakul Soonthornthum Mr. Poomchai Lamsam Mr. Vasant Chatikavanij Mr. Suraphand Bhasitnirandr Dr. Sompop Chareonkul Mr. Suroj Lamsam Lt. Suchin Baholyodhin RTN. Dr. Jingjai Hanchanlash Mr. Trichakr Tansuphasiri LT. Chalermchoke Lamsam

11. Loxley Trading Co., Ltd.

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

Company

Name of Director

Subsidiaries Holding in Direct and Indirect and Company Limited has Control

Information of Directors in Holding Position in Subsidiaries, Associated & Related Companies as at 31 December 2010

/

/

/

18. BP – Castrol (Thailand) Ltd.

17. Digital Screen Play Co., Ltd.

16. L Hardware & Services Co., Ltd.

12. Professional Computer Co., Ltd.

75


76

Loxley Public Company Limited

Loxley Plc. 1. Oriental Post Co., Ltd.

2. L Solar 1 Co., Ltd.

/

/

P

/

/

5. Guardfire Ltd.

/

/

/

6. Mobile Innovation Co., Ltd.

/

3. Thai Fiber Optics Co., Ltd.

/

/

7. Foseco (Thailand) Ltd.

/

/

4. Loxley GTECH Technology Co., Ltd.

/

/

/

/

/

Related Companies

/

/

1. TT&T Plc.

Remark: C=Chairman P=President /=Director //=Senior Executive Vice President ///=Executive Vice President

C / P / / / / / / / // / /// /// /// /// /// /// //// ////

8. BlueScope Lysaght (Thailand) Ltd.

Mr. Pairote Lamsam Mr. Sukit Wanglee Mr. Dhongchai Lamsam Dr. Harit Sutabutr Dr. Wissanu Krea-ngam Mr. Sirin Nimmanahaeminda Dr. Supavud Saicheua Mr. Charoon Chinalai Mr. Dusit Nontanakorn Mr. Supachai Wanglee Mr. Suebtrakul Soonthornthum Mr. Poomchai Lamsam Mr. Vasant Chatikavanij Mr. Suraphand Bhasitnirandr Dr. Sompop Chareonkul Mr. Suroj Lamsam Lt. Suchin Baholyodhin RTN. Dr. Jingjai Hanchanlash Mr. Trichakr Tansuphasiri LT. Chalermchoke Lamsam

9. BlueScope Steel (Thailand) Ltd.

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

Company

Name of Director

Associated Companies Holding in Direct and Indirect

Information of Directors in Holding Position in Subsidiaries, Associated & Related Companies as at 31 December 2010 2. Muang Thai Insurance Plc.


16. L Hardware & Services Co., Ltd.

15. Thai Gateway Co., Ltd.

14. NetONE Network Solutions Co., Ltd.

13. Loxbit PA Plc.

12. Professional Computer Co., Ltd.

11. Loxley Trading Co., Ltd.

10. Loxley Global Co., Ltd.

9. Loxley Property Development Co., Ltd.

8. Parts Zone (Thailand) Co., Ltd.

7. Societe Commercial Lao Co., Ltd.

6. Asia Security Management Co., Ltd.

5. Loxley Joint and Hold Co., Ltd.

4. Data Mining Co., Ltd.

3. Jago Co., Ltd.

2. Loxbit Plc.

1. Loxley Wireless Co., Ltd.

Mr. Thongyai Chanthanawan P Mr. Tim Tak Timmothy Wong / / / Mr. Werachai Kitsirisin / Mr. Sanit Ratanavadi / Mrs. Sudkanueng Malithong / Mrs. Suganya Veerakiatkij / / / Mr. Prasert Suvithyasiri / Mr. Saknarong Saengsangapong P P / / Mrs. Vanida Viriyatharangkunr / / / / / Mrs. Puangkaew Pojanapanich / Mr. Thavisakdi Thangsuphanich / Mr. Kittichai Rakrakanit / Mrs. Vongthip Chumpani / Mr. Somphop Pitaksiripan / Mrs. Kosoom Sinphurmsukskul P Mr. Chusak Bhachaiyud /

Subsidiaries

17. Digital Screen Play Co., Ltd.

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

Board of Directors

Information of Directors in the Subsidiaries 18. BP – Castrol (Thailand) Ltd.

Annual Report 2010

77


78 16. L Hardware & Services Co., Ltd.

15. Thai Gateway Co., Ltd.

14. NetONE Network Solutions Co., Ltd.

13. Loxbit PA Plc.

12. Professional Computer Co., Ltd.

11. Loxley Trading Co., Ltd.

10. Loxley Global Co., Ltd.

9. Loxley Property Development Co., Ltd.

8. Parts Zone (Thailand) Co., Ltd.

7. Societe Commercial Lao Co., Ltd.

6. Asia Security Management Co., Ltd.

5. Loxley Joint and Hold Co., Ltd.

4. Data Mining Co., Ltd.

3. Jago Co., Ltd.

2. Loxbit Plc.

1. Loxley Wireless Co., Ltd.

Loxley Public Company Limited

Adm. Taveechai Liengphboon / AM. Adireg Sastararuchi / Mr. Karn Thongyai P Mr. Supat Karachalkul / / Mr. Zamir Eldar / Mr. Shai Meirav / Mr. Ehud Herbst / Miss Osnat Levav / Mr. Viphet Sihachakr / Mrs. Sangmanee Viyagate / Mrs. Vanida Eksaengsri / Mr. Wachira Yongyai P Mr. Keattisak IamSri / Mr. Pongthep Surattanavongkul / Mr. Graham Storah / Mr. Vichai Phanchet /

Subsidiaries

17. Digital Screen Play Co., Ltd.

17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32.

Board of Directors

Information of Directors in the Subsidiaries 18. BP – Castrol (Thailand) Ltd.


16. L Hardware & Services Co., Ltd.

15. Thai Gateway Co., Ltd.

14. NetONE Network Solutions Co., Ltd.

13. Loxbit PA Plc.

12. Professional Computer Co., Ltd.

11. Loxley Trading Co., Ltd.

10. Loxley Global Co., Ltd.

9. Loxley Property Development Co., Ltd.

8. Parts Zone (Thailand) Co., Ltd.

7. Societe Commercial Lao Co., Ltd.

6. Asia Security Management Co., Ltd.

5. Loxley Joint and Hold Co., Ltd.

4. Data Mining Co., Ltd.

3. Jago Co., Ltd.

2. Loxbit Plc.

1. Loxley Wireless Co., Ltd.

Remark: C = Chairman P = President / = Director

Mrs. Natakon Sa-nguansin / Mr. Christopher Sze Hoo Lam / Mr. Gerald Hin Tsun To / Mr. Kim Pun Wong / Khunying Chatchani Chatikavanij / Mr. Suphot Wanglee / Mr. Pheat Wanglee / Mr. Ali Aljunied / / Mr. Pahol Pojanapanich / Miss Kanya Ratana-amornsak / Mr. Pornrapee Abhakorn / P P Mr. Parivat Tharincharoen / / Mr. Kitti Jongcharoenkijkarn / Miss Kamolthorn Malavichai / / Mr. Chatchai Lertviriyapakorn / Miss Phakamast Pongsiriwan / Miss Wongphaka Pongsiriwan / Miss Pichaya Konguthaikul / Mr. Voravit Apisitpich /

Subsidiaries

17. Digital Screen Play Co., Ltd.

33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51.

Board of Directors

Information of Directors in the Subsidiaries 18. BP – Castrol (Thailand) Ltd.

Annual Report 2010

79


Internal Control and Audit The Company has emphasized on the internal control and audit system. Working descriptions of the operators and executives are clearly assigned. The company’s assets are effectively managed. Works of internal control staffs and monitoring staffs are separated for transparency and reciprocal examination. The Company has had comprehensive internal control covering the areas of f inance, administration and operation, ensuring working eff iciency and compliancy with related laws, rules and regulations. Monthly financial reports are presented to relevant departments. When necessary, information is disclosed for transparency. This has strengthened credibility of the company’s financial reports prior to being presented the reports to the Board of Directors, nomination of company’s auditor and other assignments as the Board of Directors deems appropriate. The Company’s Internal Audit Department reporting directly to the Audit Committee, is appointed with resolutions of the Company’s Board of Directors’ meeting in accordance with the Stock Exchange of Thailand’s regulations. The senior vice president of the Internal Audit Department is secretary of the Audit Committee. The Audit Committee has assessed the Company’s internal control and audit system by giving an importance on advises and comments from external auditors. The Audit Committee concluded that the Company and its subsidiaries provide good and adequate internal control systems which can be categorized into five aspects as follows:

1. Organization and Environment

The Company has good visions, objectives, and strategies with constant adjustment of the company’s structure to correspond with business plans. This has enabled the Management to work efficiently. Moreover, the Company has had clear policies, budgets, and operation regulations encompassing all business activities. The Company also has had policies in human resource development with an emphasis on ethics to customers, shareholders, trade partners, employees and the society.

2. Risk Management

The Management has reviewed the Company’s policies in internal and external risk management to ensure that

80

Loxley Public Company Limited

the risk control measures can be applied suitably. Additionally, the Department has joined other departments for effective cooperation in risk management at all levels and appropriate strategic improvements and prevention of all risks relating to the company’s operation to maintain the Company’s and shareholders’ benefits.

3. Management’s Operation Control

There have been written guidelines for policy-making and operation process measures and performance monitoring of the Company and its subsidiaries. Responsibilities of the Management of each level are divided into business groups for maximum management efficiency. Also, there have been regular monitors of the Company’s and its subsidiaries’ performances. Some of the Company’s executives and members of the Board of Directors have sit on the Boards of Directors of its subsidiaries or joint ventures for close management.

4. Information and Communications Technology

The Company has emphasized on the Information and Communications system by encouraging the utilization of ICT, including e-mails, Facebook, and Twitter, among the management teams and the employees for daily operations. The Company’s intranet and public website are among the communications channels for employees to be well aware of current issues, related information and announcements the employees need to know. In addition, the Company has provided information relating to operation policies, operation guidelines, and regulations via its website, to which the employees can access easily and apply them in daily operations.

5. Monitoring and Evaluation System

Monitoring and evaluation of the Company’s performance is conducted on a monthly basis. The Internal Audit Department, who works independently, has presented reports and advices directly to the Audit Committee and the Management for further collections. In case of errors on important essences, corrections are done immediately or within a given timeframe to prevent losses and lessen risks that may occur. This is to build up conf idence among the executives on suff iciency and efficiency of the Company’s internal control system.


Report of Board’s Responsibility for Financial Report The Company’s Board of Directors is responsible for the financial statements of the Company and its subsidiaries as well as the fifinancial data shown in the Annual Report. Such financial statements are prepared according to the accounting standards generally accepted in Thailand by adoption of appropriate accounting policies and with constant practices, utmost care and discretion. Moreover, essential information is sufficiently disclosed in the notes to the financial statements. The Company’s Board procures an efficient internal control system to ensure proper and complete accounting recording. The Financial statements of the Company and its subsidiaries are audited by the Company’s auditor, KPMG Phoomchai Audit Limited. In conducting the audit, the auditor is provided by the Company’s Board with information and documents to allow audit and expression of opinion by the auditor pursuant to the accounting standards, the auditor’s opinion is shown within “Auditor’s Report”, a part of the Annual Report. The Company’s Board of Directors opines that the Company’s overall internal control system is at a satisfying level. The system can reasonably assure that the Company’s and its subsidiaries’ annual financial statements ending 31 December 2010 are reliable, comply with the generally accepted accounting standards and properly adhere to the laws and other related regulations.

(Mr. Pairote Lamsam) Chairman of the Board

(Mr. Dhongchai Lamsam) President

Annual Report 2010

81


Report of the Audit Committee In 2010, the Audit Committee of Loxley Public Company Limited held seven Audit Committee’s meetings before the Board of Directors’ meetings were being held. The report of each meeting was submitted to the Board of Directors. Main activities can be concluded as follows: 1. Review quarterly and yearly financial statements of the company, its subsidiaries and affiliated companies, which were already reviewed by the auditor. Meetings with the auditor were held on a quarterly basis to hear explanations, auditing result and recommendations prior to submitting reports to the Board. The Audit Committee viewed that the processes of preparation and disclosures of the financial statements of the Company, its subsidiaries and affiliated companies have been carried out in accordance with generally accepted accounting principles and that the disclosure is appropriate and reliable. 2. Review f inancial statements on two-month, f ive-month, and eight-month bases as to whether or not they were carried out in accordance with the goals and recommendations were also given prior to presentation to the Executive Committee. 3. Involved parties were invited to attend meetings concerning different departments to present relevant information and useful suggestions in order to enhance management efficiency of the group of companies. 4. Ensure that the Company conducted in compliance with the laws, rules and regulations of the Securities and Exchange Commission, and the Stock Exchange of Thailand or any laws relating to the Company’s businesses. 5. Review to ensure that the Company always has a good, adequate and appropriate internal audit system. Suggestions were also made to enhance the eff iciency of internal auditing. Guidelines for internal auditing were revised for appropriate operation, particularly in terms of transparency. 6. Systematic risk management was initiated. The Company’s management team has confirmed that it has always recognized the importance of risk management and has always managed risks. 7. Approve annual audit plan and acknowledge results of the audit. Follow-ups of corrective actions on important issues were made to ensure good governance. 8. Review the Company’s information disclosures on a quarterly basis pertaining to. In case where there are conflflicts of interests according to the announcement of the Board of the Stock Exchange of Thailand Re: Disclosure of Information and Practices of Registered Companies. 9. Nominate an auditor for the Company and consider his/her remuneration for the year 2010 before submitting to the Board of Directors and seeking approvals from the shareholders.

82

Loxley Public Company Limited


In 2010, the Audit Committee held seven meetings prior to the meeting of the Board of Directors. The total meetings each member attended were as follows: No. 1 2 3

Name Dr. Harit Sutabutr Mr. Charoon Chinalai Mr. Dusit Nontanakorn

Position Chairman Member Member

No. of Total Meetings

No. of Meetings attended

7 7 7

7 7 7

Note: Secretary to the Audit Committee is Mr. Chamnan Chotcomwongse, Senior Vice President of the Internal Audit Department. After each meeting, the report was submitted to the Board of Directors. The performance of the Audit Committee during the year 2010 was carried out independently and with good cooperation from all parties involved. From the committee’s review, we found that the Company has conducted its business in accordance with related laws and regulations. I, hereby, would like to take this opportunity to thank employees of the company for their cooperation.

Yours faithfully,

(Dr. Harit Sutabutr) Chairman, Audit Committee

Annual Report 2010

83


Related Party Transactions The Company does not have a policy engaging in related party transactions with related companies, shareholders, or the Company’s management, unless it is a related party transaction between the Company and its subsidiaries or associated companies. However, if the Company needs to engage in related party transactions with related companies, shareholders, or the Company’s management, it would be done under the rules and regulations of the stock market, taking into consideration the highest benefits of the Company’s shareholders as the main priority. According to the notes to the financial statement ending 31 December 2010, note#5, related parties are those parties linked to the Group and the Company as shareholders or by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices. The pricing policies for particular types of transactions are explained further below: Transactions Sale of goods and rendering of services Fees and other income Dividend income Purchase of goods and receiving of services Selling expenses Administrative expenses

Pricing Policies Market prices, contractually agreed prices or Third party compatible prices Market prices or contractually agreed prices As declared for dividend Market prices, contractually agreed prices or prices agreed by distributors who absorb distribution costs Market prices or contractually agreed prices Market prices or contractually agreed prices

Significant transactions for the year ended 31 December 2010 with related-parties were as follows: Related Companies and Relationship

84

Description of Transaction

Loxley International Co., Ltd. Mr. Pairote Lamsam and Mr. Dhongchai Lamsam are its major shareholders with the following directors in common: Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, and Mr. Vasant Chatikavanij

income for service

L-Mobile and Computer Co., Ltd. Ekpavee Co., Ltd. is its major shareholder with a director in common, namely Mr. Suroj Lamsam.

Loxley Public Company Limited

Value (MB)

1.24

accounting service fee and other services consultancy service expense

1.06 14.40

account receivable - net account payable

0.03 14.16

sale of mobile phone

17.30

income from accounting service and other services expenses for mobile phones repair

0.73 1.69

Justification and Necessity for Transaction

- space rental service and other services - accounting and other services - security service consultancy as agreement

- being the Company’s authorized distributor at general market price - accounting service and other services - mobile phone repair expenses


Related Companies and Relationship

Description of Transaction

sale promotion expenses account receivable - net account payable

Value (MB)

Justification and Necessity for Transaction

0.81 0.06 0.02

- mobile phone sale promotion expense

income from accounting service and Sin Suapah Co., Ltd. 20% of its shares are held by Ekpavee Co., other services account receivable - net Ltd., with the following directors in common: Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, and Mr. Suebtrakul Soonthornthum

1.14

- accounting service and other services

Loxley Pacific Co., Ltd. 15% of its shares are held by Loxley Wireless Co., Ltd.

income from sale and services

2.96

consultancy fee income account receivable - net

1.67 0.11

Thanakorn Vegetable Oil Products Co., Ltd. purchase of vegetable oil 6% of its shares are held by Ekpavee Co., account payable Ltd., with a director in common, namely Mr. Suroj Lamsam.

0.09

- sale of project equipments and other services - consultancy service as agreement

1,160.95 245.32

- Thanakorn Vegetable Oil Products Co., Ltd. manufactures of vegetable oil and distributes to Loxley Trading Co., Ltd., the Company’s subsidiary; general distributor agreement was used by accepting expense for goods distribution from center.

Thai Fiber Optics Co., Ltd. purchase of optic fiber signal-trans 40% of its shares are held by Loxley Plc., wiring equipment with a director in common, namely Mr. Dhongchai Lamsam.

15.03

- Thai Fibers Optic Co., Ltd., the manufacturer of fiber optic cables, consistently distributes the fiber optic cables to the Company at general market price

Foseco (Thailand) Limited income from rental and consulting 26% of its shares are held by Loxley Plc., service with a director in common, namely account receivable - net Mr. Suebtrakul Soonthornthum.

7.05

- fee for inventory management and consulting at general market price

2.08

Annual Report 2010

85


Related Companies and Relationship

Description of Transaction

BlueScope Lysaght (Thailand) Limited income from selling goods 25% of its shares are held by Loxley Plc., purchase of construction materials with the following directors in common: account payable Mr. Pairote Lamsam and Mr. Suebtrakul Soonthornthum

LTS Travel Service Co., Ltd. Mr. Dhongchai Lamsam is its major shareholder.

income from space rental & service, and other services accounting and other service fees purchase of air tickets account receivable - net account payable

TT&T Plc. income from computer maintenance 0.001% of its shares are held by Loxley Plc., account receivable - net with the following directors in common: Mr. Vasant Chatikavanij and Mr. Suroj Lamsam Law Enforcement Technology Solution Co., Ltd. Mr. Dhongchai Lamsam is its major shareholder. Directors in common are Mr. Dhongchai Lamsam and Dr. Sompop Charoenkul.

86

income from space rental & service, and other services accounting fee income and other service fee safety maintenance expenses account receivable - net account payable

Value (MB)

Justification and Necessity for Transaction

0.08 48.68 7.89

- sale of project materials - BlueScope Lysaght (Thailand) Limited is the manufacturer of steel roofing and construction materials under the standard required by the Company. Prices are at general market price.

0.41 0.48 16.63 0.01 1.36

31.79 3.45

1.60 1.53 3.06 0.43 1.83

- space rental service and other services at general market price - accounting service and other services - purchase of air tickets from LTS Travel Service Co., Ltd., the air tickets selling agent, at general market price - computer maintenance service fee at general market price

- space rental service and other services at general market price - accounting service and other services - security service expense

Muang Thai Insurance Plc. Income from selling goods 5.42% of its shares are held by Loxley Plc. insurance premium expense account payable

1.32 3.91 0.58

- sales of equipments - insurance premium at general market price

Lamsam Estate Co., Ltd. Directors in common are: Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, and Mr. Suroj Lamsam

1.79

- space rental service and other services at general market price

Loxley Public Company Limited

income from space rental & service, and other services account receivable - net

0.02


Related Companies and Relationship

Description of Transaction

Value (MB)

Justification and Necessity for Transaction

BP - Castrol (Thailand) Limited sale of goods 40% of its shares are held by Loxley Joint account receivable - net and Hold Co., Ltd., with the following directors in common: Mr. Pairote Lamsam, Mr. Dhongchai Lamsam, and Mr. Suebtrakul Soonthornthum

6.14 2.43

- product cost and car maintenance expenses at general market price

Green General Products Co., Ltd. accounting service fee and other 75% of its shares are held by Ekpavee Co., service fee Ltd. product purchase account receivable - net account payable

0.40

- accounting service fee and other service fee at general market price - purchase of kaffir oil

26.87 0.04 8.42

NP Point Co., Ltd. 18.50% of its shares are held by Loxbit PA Plc.

income from space rental & service, and other services account receivable - net

0.37

L Solar 1 Co., Ltd. 45% of its shares held by Loxley Plc.

income from consultancy service account receivable - net

1.71 1.92

- consultancy service

L Direct Co., Ltd. income from accounting service and Ekpavee Co., Ltd. is its major shareholder. other services account receivable - net account payable

0.09

- accounting service and other services at general market price

L Elevator and Engineering Co., Ltd. Ekpavee Co., Ltd. is its major shareholder with a director in common, namely Mr. Suraphand Bhasitnirandr.

1.81

income from space rental & service, and other services purchase of elevator equipments expense for elevator maintenance account receivable - net account payable

0.01

0.01 0.01

5.38 0.27 0.17 1.09

- space rental service and other services at general market price

- space rental service and other services - purchase of elevators for projects - expense for elevator maintenance

Annual Report 2010

87


Related Companies and Relationship

Other related companies (Loxley Plc.’s subsidiaries and associated companies)

88

Loxley Public Company Limited

Description of Transaction

sale of goods and services other income purchase of goods and services sale expense administrative expense account receivable - net account payable

Value (MB)

3.08 1.94 1.72 1.00 0.39 3.06 1.08

Justification and Necessity for Transaction

- total value of related party transactions between the Company and its subsidiaries with various related companies. Size of each transaction is relatively small. All related party transactions are conducted in ordinary course of business, with prices and conditions in compliance with general market prices and conditions


Elaboration and Analysis of Operating Results and Financial Status Past Overall Performance Perspective The Company’s total revenue in 2010 increased from that of 2009 by Baht 132.82 million to Baht 10,413.06 million with 15.85% gross profit. The total revenue consisted of revenue from sales of goods and rendering of services of Baht 10,281.28 million, fees and other incomes of Baht 127.29 million, and gain on sales of investment of Baht 4.49 million. In 2010, the Company spent Baht 1,578.40 million in selling and administrative expenses, a Baht 142.65 million or 9.94% increase from that of the previous year. Most of the increased expenses were the Baht 70 million provisions for doubtful accounts and declining value in investment. In addition, the Company set up a Baht 342.65 million reserve for doubtful debts expenses for short-term loans to Loxley GTECH Technology Co., Ltd. the distributor of the three-and two-digit online lottery project for the Government Lottery Offiffiifice of Thailand after the Baht 51 million equity loss of Loxley GTECH Technology Co., Ltd. The share of prof it from investments in jointly-controlled entity and associates in 2010 also increased by Baht 42.89 million from that of 2009 to Baht 356.76 million. Due to the above-mentioned reserve for doubtful debts, in 2010 the Company had a net loss of Baht 138.86 million whereas in 2009 the Company earned a Baht 310.17 million profit.

Past Performance by Segment The Company’s Technology Segment has earned Baht 5,382 million revenue in 2010, a slight increase from the earning of the previous year. The revenue consisted of Baht 2,978 million from ICT Business Group, Baht 1,511 million from Project Business Group, Baht 485 million from Special Project Group, and Baht 406 million from Technology Business Group. The Company’s Trading Segment has earned Baht 4,580 million revenue, an increase of Baht 317 million from that of 2009, which consisted of Baht 4,355 million from Trading Business Group, an increase of Baht 173 million. The major portion of the revenue came from Loxley Trading Co., Ltd. which has increased its distributions of product lines such as Malee Fruit Juice, and Phanom Roong Rice. The Company’s Service Segment and Others has earned Baht 803 million in 2010, a slight increase from that of 2009. Financial Status In 2010, the Company held Baht 9,792.86 million of total assets, a Baht 356.65 million decrease from that of 2009 due to a decrease of current assets, including trade accounts receivable, inventories and others.

Annual Report 2010

89


The current assets have decreased from Baht 5,607.21 million in 2009 to Baht 4,972.63 million in 2010. The major portion of current assets consisted of Baht 3,085.20 million trade account receivables, and the rest were Baht 869.45 million cash and current investment, Baht 664.63 million inventories and Baht 353.35 million of other current assets. The Company’s non-current assets consisted of investments in associates and jointly-controlled entity of Baht 3,256.49 million, a Baht 178.70 million increase, Baht 99 million of which was from investment in L Solar 1 Co., Ltd. and from net profit recognition from associates and joint-venture companies. The next major portion included property, plant, and equipment of Baht 975.01 million, as well as Baht 306.13 million long-term investments, and other non-current assets of Baht 282.61 million.

90

Loxley Public Company Limited

Source of Funding The Company’s source of funding was from current liabilities of Baht 4,800.73 million or 49.02%, non-current liabilities of Baht 757.37 million or 7.73%, and equity of Baht 4,234.76 million or 43.25%. Current liabilities in 2010 have increased by Baht 463.74 million from that of the previous year due to Baht 834.85 million long-term investment, to be due in 2011, which the Company have already planned for source of funding. Liquidity As of the end of 2010, the Company held cash and cash equivalents of Baht 856.86 million, an increase of Baht 593.62 million from the beginning of the year. The annual cash f low included (a) Baht 497.13 million net cash from operating activities, (b) Baht 97.28 million net cash from investing activities, and (c) Baht 331.18 million net cash used for financing activities, Baht 166.51 million of which was used for long-term loan payment.


Audit Report of Certified Public Accountant To the Shareholders of Loxley Public Company Limited I have audited the accompanying consolidated and separate balance sheets as at 31 December 2010 and 2009, and the related statements of income, changes in equity and cash flows for the years then ended of Loxley Public Company Limited and its subsidiaries, and of Loxley Public Company Limited, respectively. The Company’s management is responsible for the correctness and completeness of the information presented in these financial statements. My responsibility is to express an opinion on these fifinancial statements based on my audits. I did not audit the fifinancial statements of three associates. Investments in those associates included in the consolidated financial statements as at 31 December 2010 using the equity method amounted to Baht 277 million, and the share of profit from those associates for the year ended 31 December 2010 amounted to Baht 39 million. Those fifinancial statements were audited by other auditors whose reports have been furnished to me and my report, insofar as it relates to the amounts included for those associates, is based solely on the reports of the other auditors. Except as discussed in the third paragraph, I conducted my audits in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether thefi f inancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and signif icant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion. As described in note 13 to the f inancial statements, the consolidated and separate fif inancial statements as at 31 December 2010 and 2009 of Loxley Public Company Limited and its subsidiaries, and of Loxley Public Company Limited, respectively, included investments in two associates which have an accounting period ended 30 June. Investments in those associates were recorded by including the financial statements of those associates for the six-month periods ended 31 December 2010 and 2009, which had been reviewed, but not audited

by auditors. The carrying value of those investments in the consolidated financial statements as at 31 December 2010 and 2009 amounted to Baht 1,849 million and Baht 1,714 million, respectively and the share of prof it from those associates for the six-month periods ended 31 December 2010 and 2009 amounted to Baht 25 million and Baht 67 million, respectively. The carrying value of those investments as at 31 December 2010 and 2009 in the separate financial statements amounted to Baht 950 million. In my opinion, based on my audits and the reports of the other auditors, and except for the effects of such adjustments, if any, as might have been disclosed had I audited the financial statements of two associates as described in the third paragraph, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial positions as at 31 December 2010 and 2009 and the results of operations and cash flows for the years then ended of Loxley Public Company Limited and its subsidiaries, and of Loxley Public Company Limited, respectively, in accordance with generally accepted accounting principles. Without qualifying my opinion, I draw attention to the following matters: 1. As described in note 13 to the financial statements, an associate has entered into an agreement with the Government Lottery Office (GLO) of Thailand on 29 July 2005 to service the lottery project. The terms stipulated in the agreement require that the sale of the lottery be started within 7 months after the agreement has been signed. Because of circumstances, however, the project could not begin as scheduled. The associate received a letter from the GLO indicating that the project was to be launched by 16 September 2008. In addition, on 18 August 2008, the associate was informed in writing by the GLO about the results of their examination of the lottery system and the lottery vending machine installation. According to the GLO’s letter, the associate was permitted to partially install the vending machines (6,761 machines) in preparation for the project commencement. The GLO’s Board of Directors (“the Board”) had passed a resolution on 4 December 2009 agreeing in principle to the sale of 3-digit and 2-digit online lotteries. The Board then requested that the project preparation will be completed within 90 days for commercial launch, Annual Report 2010

91


and be reported to the Board for further Cabinet notification. Subsequently in January 2010, the Prime Minister appointed a panel to study and examine facts and legal concerns over the sales of 3-digit and 2-digit online lotteries so as to determine options of and alternatives to the sales of online lotteries within 30-day period. Consequently, the Board issued a letter dated 15 January 2010 to the associate stating that the Board had resolved on 5 January 2010 to delay the commercial launch preparation in accordance with the Board’s previous resolution on 4 December 2009 until the Prime Minister’s appointed panel can f inalise its decision for the Board’s consideration. On 30 March 2010, the associate submitted a letter to the GLO requesting that they honor the agreement, and pay for the damages arising from non-compliance. However, as at 31 December 2010, the associate did not receive any further correspondence from the GLO regarding the project progress, and accordingly could not determine the date of debut sales of lottery. Furthermore, loss of the associate’s financial positions

have been increasing and operating costs have been rising over the initial budgets, in addition, the length of the litigation process may take a long time. The Company cannot be reliably estimating the effect and the amount of time required to recover its investment in the associate. Therefore, the Company recorded full impairment loss on all remaining balances in respects of such project in the consolidated and separate financial statements for the year ended 31 December 2010. 2. As described in note 33 to the financial statements, the consolidated and separate financial statements for the year ended 31 December 2009 have been restated for the effects of the early adoption of Thai Accounting Standard (TAS) 19 “Employee benefits” which is anticipated to become effective for annual f inancial periods beginning on or after 1 January 2011. I have audited the adjustments that were applied to the restatement of the 2009 f inancial statements and in my opinion these adjustments are appropriate and have been properly applied.

(Siripen Sukcharoenyingyong) Certified Public Accountant Registration No. 3636 KPMG Phoomchai Audit Ltd. Bangkok 28 February 2011

92

Loxley Public Company Limited


Balance Sheets

Loxley Public Company Limited and its Subsidiaries As at 31 December 2010 and 2009 Consolidated ffiinancial statements Separate ffiinancial statements

Note Assets Current assets Cash and cash equivalents Current investments Trade and other accounts receivable Unbilled trade accounts receivable Retentions receivable Short-term loans to related parties Short-term loans to other parties Inventories Advances paid to suppliers Other current assets Total current assets Non - current assets Investments in subsidiaries Investments in jointly-controlled entity Investments in associates Other long-term investments Property, plant and equipment Intangible assets Retentions receivable Other non-current assets Total non-current assets Total assets

6 7 8,18

5 9 10 11

4,12 4,13 4,13 14 15,18 16 7,17,18

2010

2009 2010 (Restated) (in Baht)

2009 (Restated)

856,858,322 593,620,001 230,470,976 205,056,539 12,587,313 19,358,868 2,332,192,706 2,395,983,127 734,482,904 1,073,705,956 673,794,554 866,352,921 428,477,468 456,321,717 79,210,112 7,301,992 79,210,112 7,301,992 355,318,274 355,318,274 11,000,000 1,000,000 664,631,404 885,262,928 270,608,871 331,750,961 189,595,778 240,855,444 168,506,703 225,070,195 152,757,917 242,156,204 57,729,979 106,233,941 4,972,628,106 5,607,209,759 1,969,487,013 2,760,759,575

- 1,699,093,063 555,193,063 8,676,063 10,885,691 3,247,810,997 3,066,905,509 1,198,746,328 1,155,346,328 306,132,554 251,879,858 249,002,354 194,649,339 975,014,182 912,094,477 477,194,484 410,572,812 35,947,192 33,350,113 27,602,467 24,576,600 62,173,033 121,436,372 62,173,033 121,436,372 184,481,711 145,754,410 58,427,418 62,303,076 4,820,235,732 4,542,306,430 3,772,239,147 2,524,077,590 9,792,863,838 10,149,516,189 5,741,726,160 5,284,837,165

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

Annual Report 2010

93


Balance Sheets

Loxley Public Company Limited and its Subsidiaries As at 31 December 2010 and 2009 Consolidated ffiinancial statements Separate ffiinancial statements

Note

2010

2009 2010 (Restated) (in Baht)

2009 (Restated)

Liabilities and equity Current liabilities Bank overdrafts and short-term loans from financial institutions Trade and other accounts payable Advances received from customers Current portion of long-term liabilities Short-term loans from related parties Short-term loans from other parties Current portion of provision for employees’ long-term benefits Income tax payable Other current liabilities Total current liabilities Non-current liabilities Long-term liabilities Employees’ provident fund Provision for employees’ long-term benefits Deferred tax liabilities Other non-current liabilities Total non-current liabilities Total liabilities

18 19 18 5,18

22 20

18 22 21

1,116,995,720 1,795,778,799 320,507,799 834,852,987 1,000,000 40,946,186

Loxley Public Company Limited

563,722,314 665,804,085 270,814,479 813,947,586 -

824,573,467 675,095,468 393,224,932 166,196,738 -

14,783,576 7,471,200 11,147,010 7,471,200 3,430,194 16,163,092 672,435,091 658,667,560 258,650,862 167,121,316 4,800,730,352 4,363,988,281 2,584,086,336 2,233,683,121

323,915,979 1,094,049,164 37,425,117 51,738,069 282,095,542 253,560,303 108,885,225 70,463,377 5,052,599 11,331,000 757,374,462 1,481,141,913

172,629,206 980,011,064 37,425,117 51,738,069 194,188,561 179,237,046 82,299,225 56,411,331 486,542,109 1,267,397,510

5,558,104,814 5,845,130,194 3,070,628,445 3,501,080,631

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

94

1,221,620,716 1,789,304,672 452,354,332 216,056,709 2,350,000 -


Balance Sheets

Loxley Public Company Limited and its Subsidiaries As at 31 December 2010 and 2009 Consolidated ffiinancial statements Separate ffiinancial statements

2009 2010 (Restated) (in Baht)

2009 (Restated)

2,000,000,000 2,000,000,000

2,000,000,000 2,000,000,000

2,000,000,000 2,000,000,000

2,000,000,000 2,000,000,000

4 14 15,21

1,216,741,325 198,334,761 192,031,525

1,225,422,319 131,981,746 131,626,439

198,334,761 192,031,525

131,981,746 131,626,439

15,21

36,351,924

32,788,106

-

-

(3,483,804)

(6,062,008)

-

-

14,050,000 365,669,633

518,575,846

14,050,000 266,681,429

(479,851,651)

Note Liabilities and equity Equity Share capital Authorised share capital Issued and paid-up share capital Unrealised surpluses (deficits) Changes in percentage of holding in subsidiaries and associates Fair value changes of available-for-sale securities, net Revaluation differences on land, net Revaluation differences on land, net - portion of subsidiary Currency translation differences of the financial statements of foreign entity Retained earnings (Deficit) Appropriated Legal reserve Unappropriated (Deficit) Total equity attributable to equity holders of the Company Minority interests Total equity Total liabilities and equity

2010

23

24

24

4,019,695,364 4,034,332,448 2,671,097,715 1,783,756,534 215,063,660 270,053,547 4,234,759,024 4,304,385,995 2,671,097,715 1,783,756,534 9,792,863,838 10,149,516,189 5,741,726,160 5,284,837,165

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

Annual Report 2010

95


Statements of Income

Loxley Public Company Limited and its Subsidiaries As at 31 December 2010 and 2009 Consolidated ffiinancial statements Separate ffiinancial statements

Note Revenues Revenue from sale of goods and rendering of services Fees and other income Gain on sale of investment,net Total revenues Expenses Cost of sale of goods and rendering of services Selling expenses Administrative expenses Management benefit expenses Doubtful debts expense for short-term loans to related party Total expenses

25 5 5,26 4,5

5 5,27 5,28 5 13

Share of profit from investments in jointly-controlled entity and associates, net Profit before finance costs and income tax expense Finance costs Profit (loss) before income tax expense Income tax expense Profit (loss) for the year

31

Profit (loss) attributable to: Equity holders of the Company Minority interest Profit (loss) for the year Basic earnings (loss) per share

32

2010

Loxley Public Company Limited

2009 (Restated)

10,281,281,437 10,076,150,664 4,265,246,140 3,963,543,779 127,287,609 116,837,285 549,315,668 303,635,115 4,488,946 87,250,783 970,884,979 69,135,408 10,413,057,992 10,280,238,732 5,785,446,787 4,336,314,302

8,651,714,165 681,161,324 897,235,075 170,640,008

8,492,985,090 622,534,348 813,217,716 160,679,945

3,618,944,561 348,772,615 549,010,410 52,490,827

3,372,844,498 310,338,052 546,701,663 52,382,231

342,654,348 369,598,274 30,213,413 10,743,404,920 10,089,417,099 4,938,816,687 4,312,479,857

356,757,534

313,867,602

-

-

26,410,606 (115,180,646) (88,770,040) (42,199,623) (130,969,663)

504,689,235 (117,680,457) 387,008,778 (75,937,137) 311,071,641

846,630,100 (86,047,020) 760,583,080 760,583,080

23,834,445 (86,408,472) (62,574,027) (62,574,027)

(138,856,213) 7,886,550 (130,969,663)

310,166,850 904,791 311,071,641

760,583,080 760,583,080

(62,574,027) (62,574,027)

(0.07)

0.16

0.38

(0.03)

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

96

2009 2010 (Restated) (in Baht)


Annual Report 2010

97

33

9,719,744 9,719,744 9,719,744 -

-

131,981,746

2,000,000,000 1,225,422,319

58,813,347 58,813,347 -

-

-

-

-

58,813,347 -

-

-

73,168,399 73,168,399

2,000,000,000 1,215,702,575 2,000,000,000 1,215,702,575

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

Balance at 1 January 2009 Effect from adoption of TAS 19 Restated balance Unrealised gain (losses) Available for sale investments Net change in fair value recognised in equity Net change in fair value transferred to profit or loss Land Net change in fair values recognised in equity Changes in percentage of holding in subsidiaries and associates recognised in equity Currency translation differences of the financial statements of foreign entity Net income (expense) recognised directly in equity Profit for the year Total recognised income and expense Dividends of subsidiaries in minority interests Decrease in minority interests from additional purchase of subsidiaries’ shares capital Increase in minority interests from increase of subsidiary’s shares capital Balance at 31 December 2009

Note

Change in Issued percentage and paid-up of holding share capital in subsidiaries Portion of and associates Company

-

-

(7,298,646) (7,298,646) -

-

-

(7,298,646)

7,298,646 7,298,646

Portion of subsidiaries

131,626,439

-

-

-

-

-

131,626,439 131,626,439

32,788,106

-

10,407,146 10,407,146 -

-

10,407,146

-

22,380,960 22,380,960

(6,062,008)

-

876,450 876,450 876,450 -

-

-

-

(6,938,458) (6,938,458)

-

876,450 72,518,041 310,166,850 382,684,891 -

9,719,744

10,407,146

58,813,347 (7,298,646)

518,575,846 4,034,332,448

-

310,166,850 310,166,850 -

-

-

-

442,601,990 3,885,840,551 (234,192,994) (234,192,994) 208,408,996 3,651,647,557

Retained earnings Currency Total equity Revaluation differences translation attributable to on land, net differences Unappropriated equity holders of the financial Portion of Portion of of the statements of Company subsidiary Company foreign entity

Consolidated financial statements

Unrealised surpluses (deficits)

Fair value changes of available-for-sales securities, net

Statements of changes in equity

Total equity

(55,573,878)

(77,768) 54,938,488 311,071,641 366,010,129 (16,210,855)

9,719,744

(4,460,206)

57,055,364 (7,298,646)

7,833,650 7,833,650 270,053,547 4,304,385,995

(55,573,878)

(954,218) (17,579,553) 904,791 (16,674,762) (16,210,855)

-

(14,867,352)

(1,757,983) -

361,072,057 4,246,912,608 (10,392,665) (244,585,659) 350,679,392 4,002,326,949

Minority interests

Loxley Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009 Unit : Baht


98

Loxley Public Company Limited

24

15

33

66,353,015 66,353,015 198,334,761

(8,680,994) (8,680,994) (8,680,994) -

2,000,000,000 1,216,741,325

-

-

-

-

66,353,015

-

-

131,981,746 131,981,746

2,000,000,000 1,225,422,319 2,000,000,000 1,225,422,319

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

Balance at 1 January 2010 Effect from adoption of TAS 19 Restated balance Unrealised gain (losses) Available for sale investments Net change in fair value recognised in equity Land Net change in fair values recognised in equity Changes in percentage of holding in subsidiaries recognised in equity Currency translation differences of the financial statements of foreign entity Net income (expense) recognised directly in equity Profit (loss) for the year Total recognised income and expense Appropriated for legal reserve Dividends of subsidiaries in minority interests Decrease in minority interests from additional purchase of subsidiary’s share capital Decrease in minority interests from sale of subsidiary Balance at 31 December 2010

Note

Consolidated financial statements Unrealised supluses (deficits)

192,031,525

60,405,086 60,405,086 -

-

60,405,086

-

131,626,439 131,626,439

36,351,924

3,563,818 3,563,818 -

-

3,563,818

-

32,788,106 32,788,106

(3,483,804)

2,578,204 2,578,204 2,578,204 -

-

-

-

(6,062,008) (6,062,008)

Currency Changes in Fair value Revaluation differences translation Issued percentage of changes of on land, net differences and paid-up holding in availableof the financial Portion of Portion of share capital subsidiaries for-sales statements of subsidiary and associates securities, net Company foreign entity

Statements of changes in equity

-

-

-

-

14,050,000

14,050,000 -

Legal reserve

2,578,204 124,219,129 (138,856,213) (14,637,084) -

(8,680,994)

63,968,904

66,353,015

365,669,633 4,019,695,364

(138,856,213) (138,856,213) (14,050,000) -

-

-

-

798,765,105 4,314,521,707 (280,189,259) (280,189,259) 518,575,846 4,034,332,448

Total equity attributable to Unappropriated equity holders of the Company

Retained earnings

Total equity

3,876,416 118,104,594 (130,969,663) (12,865,069) (4,289,016)

(8,680,994)

56,556,157

66,353,015

(43,719,006) (43,719,006) (8,753,880) (8,753,880) 215,063,660 4,234,759,024

1,298,212 (6,114,535) 7,886,550 1,772,015 (4,289,016)

-

(7,412,747)

-

283,985,974 4,598,507,681 (13,932,427) (294,121,686) 270,053,547 4,304,385,995

Minority interests

Loxley Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009 Unit : Baht


Annual Report 2010

99

24

15

33

33

66,353,015 66,353,015 198,334,761

66,353,015

2,000,000,000

131,981,746 131,981,746

58,813,347 58,813,347 58,813,347 131,981,746

2,000,000,000 2,000,000,000 2,000,000,000

73,168,399 73,168,399

Fair value changes of available-for-sale securities, net

60,405,086 60,405,086 60,405,086 192,031,525

-

131,626,439 131,626,439

131,626,439

131,626,439 131,626,439

-

-

-

-

14,050,000 14,050,000

Legal reserve

760,583,080 760,583,080 (14,050,000) 266,681,429

-

(293,143,405) (186,708,246) (479,851,651)

(62,574,027) (62,574,027) (479,851,651)

(253,970,428) (163,307,196) (417,277,624)

Unappropriated (Deffiicits)

60,405,086 126,758,101 760,583,080 887,341,181 2,671,097,715

66,353,015

1,970,464,780 (186,708,246) 1,783,756,534

58,813,347 58,813,347 (62,574,027) (3,760,680) 1,783,756,534

1,950,824,410 (163,307,196) 1,787,517,214

Total equity attributable to equity holders of the Company

Loxley Public Company Limited and its subsidiaries For the years ended 31 December 2010 and 2009 Unit : Baht

Retained earnings (Defiffiicit)

Separate fiffiinancial statements Revaluation differences on land, net

Unrealised surpluses

2,000,000,000 2,000,000,000

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

Balance at 1 January 2010 Effect from adoption of TAS 19 Restated balance Unrealised gains Available for sale investments Net change in fair value recognised in equity Land Net change in fair values recognised in equity Net income recognised directly in equity Profit for the year Total recognised income and expense Appropriated for legal reserve Balance at 31 December 2010

Balance at 1 January 2009 Effect from adoption of TAS 19 Restated balance Unrealised gains Available for sale investments Net change in fair value recognised in equity Net income recognised directly in equity Loss for the year Total recognised income and expense Balance at 31 December 2009

Note

Issued and paid-up share capital

Statements of changes in equity


Statements of cash flows

Loxley Public Company Limited and its Subsidiaries For the years ended 31 December 2010 and 2009

Consolidated ffi ifi nancial statements Separate fiffiinancial statements 2010

2009 (Restated)

2010

2009 (Restated)

(in Baht)

Cash f lows from operating activities Profit (loss) for the year (130,969,663) 311,071,641 760,583,080 (62,574,027) Adjustments for Depreciation and amortisation 123,159,820 131,530,346 39,834,711 43,279,725 Interest income (6,928,446) (13,008,552) (3,240,444) (9,461,695) Finance costs 115,180,646 117,680,457 86,047,020 86,408,472 Dividends received (25,478,032) (27,025,397) (436,203,297) (218,005,374) Written off withholding tax deducted at source 484,732 3,689,451 28,740 Set up provision for: - Bad debts and doubtful accounts for trade and other accounts receivable 53,545,371 9,296,411 69,838,265 120,224,470 - Doubtful accounts for short-term loans to related parties 342,654,348 - 369,598,274 30,213,413 - Decline in value of inventories 21,128,965 7,669,508 17,010,114 6,834,000 - Decline in value of investment in associates 5,311,781 - 36,000,000 35,555,466 - Decline in value of other long-term investment 7,000,000 - 7,000,000 Gain on sales of investments in subsidiaries - - 5,176,815 Gain on sales of investments in associates - - (975,400,259) Gain on sales of other long-term investments (17,500) (87,554,662) (17,500) (66,206,213) Gain from liquidation of associates - (54,859) - (2,929,194) Gain from liquidation of other long-term investments (2,472,513) - (644,035) Loss (gain) from deconsolidation of subsidiaries (1,367,971) 358,739 - Loss (gain) on disposals of property, plant and equipment and intangible assets (1,115,908) 5,279,106 (944,875) 588,866 Share of profit of jointly-controlled entity and associates (356,757,535) (313,867,602) - Provision for employees’ long-term benefits 35,847,615 37,537,834 18,627,324 23,401,050 Exchange differences on translation of the financial statements of foreign entity 4,306,565 19,083 - Income tax expense 42,199,623 75,937,137 - 225,711,898 258,558,641 (6,706,067) (12,671,041)

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

100

Loxley Public Company Limited


Statements of cash flows

Loxley Public Company Limited and its Subsidiaries For the years ended 31 December 2010 and 2009

Consolidated ffi ifi nancial statements Separate fiffiinancial statements 2010

2009 (Restated)

2010

2009 (Restated)

(in Baht)

Changes in operating assets and liabilities Trade and other accounts receivable 25,375,914 (351,256,444) 308,270,450 (253,176,294) Unbilled trade accounts receivable 178,728,808 (495,941,441) 14,014,689 (226,457,716) Retentions receivable (37,700,884) (24,487,048) (37,700,884) (24,487,048) Inventories 181,089,066 (9,195,336) 44,141,383 159,016,967 Advances paid to suppliers 51,259,666 (186,826,955) 56,563,492 (173,150,285) Other current assets 49,101,032 (106,748,520) 63,671,056 (17,946,525) Other non-current assets (569,835) 51,856 585,950 246,133 Trade and other accounts payable 17,917,600 534,011,170 (9,291,383) 101,695,563 Advances received from customers (138,267,787) 270,024,806 (122,410,453) 226,331,887 Employees’ provident fund (14,312,952) (10,722,800) (14,312,952) (10,722,800) Other current liabilities 19,450,565 113,423,590 92,438,654 13,248,929 Withholding tax deducted at source refunded 38,682,740 80,968,852 36,825,848 31,412,390 Income tax and withholding tax deducted at source paid (99,335,892) (134,658,461) (34,312,692) (36,833,040) Net cash provided by (used in) operating activities 497,129,939 (62,798,090) 391,777,091 (223,492,880) Cash flows from investing activities Interest received 7,414,033 12,669,742 3,758,076 8,842,350 Dividends received 347,545,464 115,697,936 417,003,342 177,995,735 Decrease in current investments in ffiifixed deposits and promissory notes with maturity more than 3 months and pledged as collateral 9,626,256 39,355,838 - Effect on cash flows from sales and deconsolidation of subsidiaries and indirect subsidiaries 4,215,016 (423,203) - Increase in investments in subsidiaries (52,400,000) (41,155,030) (1,159,400,300) (46,279,361) Increase in investments in associates (99,000,000) (7,794,547) (99,000,000) Increase in other long-term investments - (6,804,000) - Increase in short-term loans to ralated party (14,280,000) (354,435,287) (14,280,000) (354,435,287) Increase in short-term loans to other party (10,000,000) - - Minority interests - Cash dividends of subsidiaries (4,289,016) (16,210,855) - - Proceeds from increase in subsidiary’s share capital - 7,833,650 - -

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

Annual Report 2010

101


Statements of cash flows

Loxley Public Company Limited and its Subsidiaries For the years ended 31 December 2010 and 2009

Consolidated ffi ifi nancial statements Separate fiffiinancial statements 2010

2009 (Restated)

2010

2009 (Restated)

(in Baht)

Increase in property, plant and equipment Increase in intangible assets Proceeds from sales of investments in subsidiaries Proceeds from sales of investments in associates Proceeds from sales of investments in other long-term investments Proceeds from liquidation of subsidiaries Proceeds from liquidation of an associate Proceeds from liquidation of other long-term investments Proceeds from sales of property, plant and equipment and intangible assets Net cash provided by (used in) investing activities

(98,673,972) (9,023,413) 68,185 -

(115,765,799) (4,507,776) - -

(21,016,102) (7,439,993) 68,185 995,000,559

(24,780,164) (710,654) -

5,017,500 - -

204,824,496 - 7,929,194

5,017,500 10,255,000 -

174,841,520 7,929,194

2,572,832

-

644,035

-

8,491,877 9,760,611 6,202,293 7,549,994 97,284,762 (149,025,030) 136,812,595 (49,046,673)

Cash flows from financing activities Finance costs paid (117,279,462) (117,708,510) (86,461,885) (86,773,842) Increase (decrease) in bank overdrafts and short-term loans from financial institutions (104,624,996) 247,734,231 (260,851,153) 84,529,530 Decrease in short-term loans from related parties (1,350,000) (10,130,000) - Repayment of short-term loans from related parties 39,646,186 - - Increase in long-term liabilities 18,939,892 399,990,316 137,789 280,128,840 Repayment of long-term liabilities (166,508,000) (223,369,217) (156,000,000) (100,000,000) Net cash provided by (used in) financing activities (331,176,380) 296,516,820 (503,175,249) 177,884,528 Net increase (decrease) in cash and cash equivalents 263,238,321 84,693,700 25,414,437 (94,655,025) Cash and cash equivalents at beginning of year 593,620,001 508,926,301 205,056,539 299,711,564 Cash and cash equivalents at end of year 856,858,322 593,620,001 230,470,976 205,056,539

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

102

Loxley Public Company Limited


Note to the financial statements Loxley Public Company Limited and its Subsidiaries For the years ended 31 December 2010 and 2009 Note 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38

Contents General information Basis of preparation of the financial statements Significant accounting policies Business acquisitions and disposals Related party transactions and balances Cash and cash equivalents Deposits pledged as collateral Trade and other accounts receivable Short-term loans to other parties Inventories Other current assets Investments in subsidiaries Investments in jointly-controlled entity and associates Other long-term investments Property, plant and equipment Intangible assets Other non-current assets Interest-bearing liabilities Trade and other accounts payable Other current liabilities Deferred tax liabilities Provision for employees’ long-term benefits Share capital Reserves Segment information Fees and other income Selling expenses Administrative expenses Employee benefit expenses Expenses by nature Income tax expense Basic earnings (loss) per share Adoption of Thai Accounting Standard (TAS) 19 Financial instruments Commitments with non-related parties Contingent liabilities and contingent assets Thai Financial Reporting Standards (TFRS) not yet adopted Reclassification of accounts Annual Report 2010

103


These notes form an integral part of the financial statements. The financial statements were authorised for issue by the Board of Directors on 28 February 2011.

1. General information

Loxley Public Company Limited, the “Company”, is incorporated in Thailand, and has its registered office at 102 Na Ranong Road, Klong Toey, Klong Toey, Bangkok, 10110, Thailand. The Company was listed on the Stock Exchange of Thailand in 1994. The Company’s major shareholder during the f inancial year was Ekpavee Company Limited (28% shareholding) which was incorporated in Thailand. The principal businesses of the Company are trading and turnkey contract sales of telecommunication equipment and other items. Active subsidiaries mainly engage in their core businesses of trading and sales and services of computers. Details of the Company’s subsidiaries as at 31 December 2010 and 2009 were as follows: Name of the entity

Direct subsidiaries Loxley Wireless Company Limited Jago Company Limited (not yet started principal commercial operations) Data Mining Company Limited Loxbit Public Company Limited Loxley Joint and Hold Co., Ltd. Asia Security Management Co., Ltd. Societed Commercial Lao Company Parts Zone (Thailand) Co., Ltd. Loxley Property Development Company Limited Loxley Thales Company Limited Loxley Global Company Limited Loxley Trading Company Limited International Agriculture Holdings Company Limited Indirect subsidiaries Professional Computer Company Limited

Loxbit P.A. Public Company Limited

104

Loxley Public Company Limited

Type of Business

Ownership interest (%) 2010 2009

Sale and service of telecommunication and information technology systems Sale of online lottery

99

99

99

99

Service of information technology equipment and computer systems Trading of telecommunication equipment, computers and computer programs Holding company Provide security service at Suvarnabhumi Airport and others Trading in Lao People’s Democratic Trading in automotive parts and equipment Renting of building, advertising board and providing services Sale and service of electronics communications equipment Holding company Sale of consumer products Holding company

99

99

99

92

99 69

69

67 60 59

67 60 59

51

51

51 50 -

51 50 99

Supply, maintenance and set up of work system, installation of computers and management of computerised center Telecommunication and computerised database service

99

92

99

92


Name of the entity NetONE Network Solutions Company Limited Thai Gateway Company Limited L-Hardware & Services Company Limited Digital Screen Play Company Limited Digit Brain Co., Ltd. Nin Development Farm Company Limited

Type of Business Trading of computer, computer spare parts and equipment, of all types Trading of telecommunication equipment Installation and repair of IT equipment, sale of computers and peripherals Educational services through network system Sales of knowledge related equipment and media Fish farm

Ownership interest (%) 2010 2009 99

92

99 99

92 92

69 42

64 39

-

51

The above direct subsidiaries and indirect subsidiaries were incorporated in Thailand except Societed Commercial Lao Company Limited which was incorporated in Lao People’s Democratic Republic.

2. Basis of preparation of the financial statements

The f inancial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation of the financial statements has been prepared for the convenience of readers not conversant with the Thai language. The f inancial statements are prepared and presented in Thai Baht. All f inancial information presented in Thai Baht has been rounded in the notes to the f inancial statements to the nearest million. They are prepared on the historical cost basis except as stated in the accounting policies. The financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) and guidelines promulgated by the Federation of Accounting Professions (“FAP”); applicable rules and regulations of the Thai Securities and Exchange Commission; and with generally accepted accounting principles in Thailand. During 2010, the FAP announced the re-numbering of the following TFRS. Former no.

Revised no.

Topic

TAS 11 TAS 40

TAS 101 TAS 105

TAS 48

TAS 107

Doubtful Account and Bad Debts Accounting for Investment in Debt and Equity Securities Financial Instruments Disclosure and Presentation

The Group/Company has adopted the revised Framework for the Preparation and Presentation of Financial Statements (revised 2010), which was issued by the FAP during 2010 and effective on 26 May 2010. The adoption of the revised framework does not have any material impact on the financial statements. The FAP has issued during 2010 a number of new and revised TFRS which are not currently effective and have not been adopted in the preparation of these financial statements. These new and revised standards and interpretations are disclosed in note 37. The preparation of f inancial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected.

Annual Report 2010

105


3. Significant accounting policies

(a) Basis of consolidation The consolidated f inancial statements relate to the Company and its subsidiaries (together referred to as the “Group”) and the Group’s interest in a jointly-controlled entity and associates. Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Jointly-controlled entity and associates Jointly-controlled entity and associates are those entities in which the Group has signif icant inf luence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. The consolidated financial statements include the Group’s share of the income, expenses and equity movements of jointly-controlled entity and associates, from the date that significant influence commences until the date that signif icant inf luence ceases. When the Group’s share of losses exceeds its interest in a jointly-controlled entity or an associate, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the jointly-controlled entity or the associate. Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of income. Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions. Foreign entities The assets and liabilities of foreign entities are translated to Thai Baht at the foreign exchange rates ruling at the reporting date. The revenues and expenses of foreign entities are translated to Thai Baht at rates approximately the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on translation are recognised in a separate component of equity until disposal of the investments. Where monetary items, in substance, form part of the Group’s net investment in a foreign entity, foreign exchange differences arising on such monetary items and related hedges are recognised directly in a separate component of equity until disposal of the investment. (c) Derivative financial instruments Derivative financial instruments are used to manage exposure to foreign exchange arising from operational, financing and investment activities. Derivative financial instruments are not used for trading purposes.

106

Loxley Public Company Limited


Gains and losses from forward exchange contracts used to hedge anticipated future currency transactions are recorded when the forecasted transaction occurs. Where the hedged item is a recognised asset or liability, it is translated at the contracted forward rates. (d) Cash and cash equivalents Cash and cash equivalents in the statement of cash flows comprise cash balances, call deposits and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of f inancing activities for the purpose of the statement of cash flows. (e) Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts. Unbilled trade accounts receivable represents the gross unbilled amount expected to be collected from customers for contract work performed to date. It is measured at cost plus profit recognised for the portion of work performed, less progress billings and recognised losses. The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred. (f) Inventories Merchandise inventories Inventories are stated at the lower of cost and net realisable value. Cost is calculated using the weighted average cost principle, and comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale. An allowance is made for all deteriorated, damaged, obsolete and certain slow-moving inventories. (g) Project in process Project in process represents the gross unbilled amount expected to be collected from customers for project work performed to date. It is measured at cost plus prof it recognised (see note 3 (p)) less progress billings and recognised losses. Cost includes all expenditure related directly to specif ic projects and an allocation of f ixed and variable costs incurred in the Group’s/Company’s project activities based on normal operating capacity. (h) Investments Investments in subsidiaries, jointly-controlled entity and associates Investments in subsidiaries, jointly-controlled entity and associates in the separate financial statements of the Company are accounted for using the cost method. Investments in jointly-controlled entity and associates in the consolidated financial statements are accounted for using the equity method. Investments in other equity securities Marketable equity securities other than those securities held for trading or intended to be held to maturities, are classified as available-for-sale investments. Available-for-sale investments are, subsequent to initial recognition, stated at fair value, and changes therein, other than impairment losses and foreign currency differences on available-for-sale monetary items, are recognised directly in equity. Impairment losses and foreign exchange differences are recognised in the statement of income. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the statement of income. Equity securities which are not marketable are stated at cost less any impairment losses. The fair value of financial instruments classified as available-for-sale is determined at the quoted bid price at the reporting date. Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in the statement of income. Annual Report 2010

107


If the Group/Company disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment. (i) Property, plant and equipment Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses except for land which are stated at their revalued amounts. The revalued amount is the fair value determined on the basis of the property’s existing use at the date of revaluation less impairment losses. Leased assets Leases in terms of which the Group/Company substantially assumes all the risk and rewards of ownership are classified as finance leases. Property, plant and equipment acquired by way of finance leases are capitalised at the lower of their fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the statement of income. When a sale and leaseback results in a finance lease, any gain on the sale is deferred and recognised as income over the lease term. Revalued assets Revaluations are performed by independent professional valuers with suff icient regularity to ensure that the carrying amount of these assets does not differ materially from that which would be determined using fair values at the reporting date. Any increase in value, on revaluation, is credited to equity under the heading ‘revaluation surplus’ unless it offsets a previous decrease in value recognised in the statement of income in respect of the same asset. A decrease in value is recognised in the statement of income to the extent it exceeds an increase previously recognised in equity in respect of the same asset. Upon disposal of a revalued asset, any related revaluation surplus is transferred from equity to retained earnings and is not taken into account in calculating the gain or loss on disposal. Depreciation Depreciation is charged to the statement of income on a straight-line basis over the estimated useful life of each part of an item of property, plant and equipment. The estimated useful lives are as follows: Buildings and improvements 5, 20 Years Furniture, fixtures and office equipment 3, 5 Years Tools and equipment 3, 5 Years Equipment held for lease 3, 5 Years Transportation equipment 5 Years No depreciation is provided on freehold land or assets under construction of the Group/Company. (j) Intangible assets Goodwill Goodwill in a business combination represents the excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired. The Group changed its accounting policy for goodwill with effect from 1 January 2008, the change had no effect on the f inancial statements as all goodwill had been fully amortised as at 31 December 2007, as follows: Acquisitions prior to 1 January 2008 Goodwill was stated at cost from the date of initial recognition and amortised over its estimated useful life of 10 years. On 1 January 2008, the Group/Company discontinued amortisation of goodwill. The remaining balance is subject to testing for impairment, as described in note 3 (k). Acquisitions on or after 1 January 2008 Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment as described in note 3 (k).

108

Loxley Public Company Limited


Other intangible assets Intangible assets that are acquired by the Group/Company, which have finite useful lives, are stated at cost less accumulated amortisation and impairment losses. Intangible assets are amortised in the statement of income on a straight-line basis over their estimated useful lives from the date that they are available for use. The estimated useful lives are as follows:

Software license

3 - 10 Years

(k) Impairment The carrying amounts of the Group/Company’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at each reporting date, and when indicators of impairment are identified. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in the statement of income unless it reverses a previous revaluation credited to equity, in which case it is charged to equity. When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statement of income even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in the statement of income is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the statement of income. Calculation of recoverable amount The recoverable amount of available-for-sale financial assets is calculated by reference to the fair value. The recoverable amount of a non-f inancial asset is the greater of the asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated future cash f lows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs. Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. For financial assets carried at amortised cost and available-for-sale’ financial assets that are debt securities, the reversal is recognised in the statement of income. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity. An impairment loss in respect of goodwill is not reversed. Impairment losses recognised in prior periods in respect of other non-fifinancial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (l) Interest-bearing liabilities Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of income over the period of the borrowings on an effective interest basis. (m) Trade and other accounts payable Trade and other accounts payable are stated at cost. (n) Employee benefits Defined contribution plans Obligations for contributions to def ined contribution pension plans are recognised as an expense in the statement of income as incurred.

Annual Report 2010

109


Provision for employees’ long-term benefits The Group/Company’s net obligation in respect of long-term employee benefits (Legal Severance Payment) is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. The discount rate is the yield at the reporting date on government bonds. The calculation is performed using the projected unit credit cost method. (o) Provisions A provision is recognised when the Group/Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outf low of economic benef its will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash f lows at a pre-tax rate that ref lects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Warranties A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities. (p) Revenue Revenue excludes value added taxes and is arrived at after deduction of trade discounts. Sale of goods and services rendered Revenue is recognised in the statement of income when the signif icant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service income is recognised as services are provided. Service contracts revenue Service contract revenue includes the initial amount agreed in the contract plus any variations in contract, claims and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a service contract can be estimated reliably, contract revenue and expenses are recognised in the statement of income in proportion to the stage of completion of the contract. The stage of completion is assessed by reference to surveys of service performed. When the outcome of a service contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognised immediately in the statement of income. Rental income Rental income from investment property is recognised in the statement of income on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income. Contingent rentals are recognised as income in the accounting period in which they are earned. Interest and dividend income Interest income is recognised in the statement of income as it accrues. Dividend income is recognised in the statement of income on the date the Group/Company’s right to receive payments is established. (q) Expenses Operating leases Payments made under operating leases are recognised in the statement of income on a straight-line basis over the term of the lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease payments made. Contingent rentals are charged to the statement of income for the accounting period in which they are incurred. Finance costs Interest expenses and similar costs are charged to the statement of income for the period in which they are incurred, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component of finance lease payments is recognised in the statement of income using the effective interest rate method.

110

Loxley Public Company Limited


(r) Income tax Income tax on the profit or loss for the year comprises current and deferred tax. Income tax is recognised in the statement of income except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill; the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit; and differences relating to investments in subsidiaries and joint ventures to the extent that it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable prof its will be available against which the temporary differences can be utilised. Deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised.

4. Business acquisitions and disposals

2010 In March 2010, the Company purchased an additional 28,041,756 shares in the subsidiary company, Loxbit Public Company Limited, at a cost of Baht 53 million. The Company recorded the difference between the cost of purchase and the fair value of net assets acquired of Baht 8.7 million in shareholders equity. As a consequence, the Company’s percentage of shareholding in Loxbit Public Company Limited and indirect subsidiaries which are wholly owned by Loxbit Public Company Limited increased from 92% to 99%. On December 2010, Loxbit Public Company Limited increased their authorised share capital and fully paid-up share capital from Baht 338.2 million to Baht 375.2 million. The Company paid up the increased share capital of Baht 37 million at par value. As at 31 December 2010, the Company’s percentage of shareholding in the Loxbit Public Company Limited and indirect subsidiaries remains at 99%. In April 2010, a subsidiary of the Company sold 36% of its investment in an indirect subsidiary, Nin Development Farm Company Limited, to a third party amounting to Baht 8.6 million, with a gain from sale amounting to Baht 2 million. Subsequently in December 2010, the subsidiary sold its remaining investment in the said company at a loss of Baht 3 million. In August 2010, Loxley Wireless Company Limited, a subsidiary of the Company, increased the authorised and fully paid up share capital from Baht 30 million to Baht 100 million. The Company purchased the increase share capital of Baht 70 million at par value. As at 31 December 2010, the Company’s percentage of holding in the subsidiary remains at 99%. In August and December 2010, International Agriculture Holdings Company Limited, a subsidiary of the Company, decreased its authorised and fully paid up share capital from Baht 15.50 million to Baht 6.82 and later to Baht 5.25 million. In December 2010, the Company has sold all its investment in International Agriculture Holdings Company Limited to a shareholder at net book value. In August 2010, the Company established a new subsidiary, Loxley Joint and Hold Co., Ltd. with an authorised and fully paid up share capital of Baht 100 million (99% owned subsidiary). In September 2010, Loxley Joint and Hold Co., Ltd. increased the authorised and fully paid up share capital from Baht 100 million to Baht 1,000 million in order to acquire shares of BP - Castrol (Thailand) Company Limited, which is a manufacturer and seller of lubricant products. The Company sold 40% of their investment in BP - Castrol (Thailand) Company Limited to Loxley Joint and Hold Co., Ltd., at a selling price of Baht 995.0 million (approximately to BP - Castrol (Thailand) Company Limited’s net book value as at 30 June 2010), with a gain on sale of Baht 975.4 million in the separate financial statements for the period ended 31 December 2010. This transaction has no effect on the consolidated financial statements for the period ended 31 December 2010 as intra-group transactions, are eliminated in preparing the consolidated financial statements. Annual Report 2010

111


In December 2010, the Company purchased a 45% equity interest in L Solar 1 Co., Ltd. for Baht 99 million. The above company is incorporated in Thailand and engages in electricity generating business, which has an authorised and fully paid up capital of Baht 220 million. The Company classified this investment as an associate. 2009 In February 2009, an indirect subsidiary incorporated a new subsidiary, Digit Brain Co., Ltd., with a registered capital of Baht 5 million. The new subsidiary engages in the sales of knowledge related equipment and media. The Group holds a 39% interest in the subsidiary and has included the subsidiary’s f inancial statements in the consolidated f inancial statements for the year ended 31 December 2009. In June 2009, a subsidiary invested in a 38% interest in Mega Management Co., Ltd. (Mega) for Baht 8 million. Mega was incorporated in Laos and engages in the distribution of the instant lottery in that country. Mega has a registered share capital of Kip 5,168 million and paid up share capital of Kip 3,928 million. The Group classifies this investment as an associate with 25% indirect shareholding. The Company deconsolidated the financial statements of Loxley Information Company Limited, an indirect subsidiary, from the consolidated financial statements for the year ended 31 December 2009 after the indirect subsidiary was liquidated on 19 June 2009, resulting in the Company’s permanent loss of control in the indirect subsidiary. In October 2009, the Company purchased an additional 200,000 shares, 18.6% of interest, in Loxley Property Development Company Limited at a cost of Baht 23 million. The Company recorded the difference between the cost of purchase and the fair value of net assets acquired on the date of purchase of Baht 7 million as “Surplus on dilution of investments in subsidiaries and associates” in the “Equity” section of the consolidated balance sheets. Subsequent to the purchase transaction, the Company’s percentage of shareholding in Loxley Property Development Company increase from 40% previously to 59%. In December 2009, the Company purchased an additional 13,258,244 shares (4.5% interest), in Loxbit Public Company Limited at a cost of Baht 18 million. The Company recorded the difference between the cost of purchase and the fair value of net assets acquired on the date of purchase of Baht 7 million is taken into shareholders equity. As a consequence, the Company’s percentage of shareholding in Loxbit Public Company Limited and indirect subsidiaries wholly owned by Loxbit Public Company Limited increase from 87% previously to 92%.

5. Related party transactions and balances

Related parties are those parties linked to the Group and the Company as shareholders or by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices. The pricing policies for particular types of transactions are explained further below: Transactions Pricing policies Sale of goods and rendering of services Market prices, contractually agreed prices or third party compatible prices Fees and other income Market prices or contractually agreed prices Dividend income As declared for dividend Sale of investment in an associate Compatible prices of associate’s net book value Purchase of goods and rendering of services Market prices, contractually agreed prices or prices agreed by distributors who absorb distribution costs Selling expenses Market prices or contractually agreed prices Administrative expenses Market prices or contractually agreed prices Management benefit expenses Shareholders and/or Board of Directors approve

112

Loxley Public Company Limited


Significant transactions for the years ended 31 December 2010 and 2009 with related parties were as follows: Consolidated financial statements 2010

Subsidiaries Sale of goods and rendering of services Fees and other income Dividend income Gain on sale of investment in an associate Purchases of goods and rendering of services Selling expenses Administrative expenses Jointly-controlled entity Sale of goods and rendering of services Associates Sale of goods and rendering of services Fees and other income Dividend income Purchase of goods and rendering of services Selling expenses Other related parties Sale of goods and rendering of services Fees and other income Dividend income Purchases of goods and rendering of services Selling expenses Administrative expenses Management benefit expenses

Separate financial statements

2009 2010 (in million Baht)

-

-

-

2009

32 44 194 975 194 1

41 37 71 36

-

4 71

3 65

-

2712

-

2712

7 10 65 1

28 16 35 -

1 10 222 49 1

25 16 129 35 -

62 9 25 1,204 3 4 27 171

60 11 27 1,0613 2 26 152

30 8 20 42 4 9 52

32 11 18 38 2 4 47

The amount mainly comprises the purchase of goods from a subsidiary for project works, totaling Baht 176 million. The pricing policy was based on contractually agreed prices. 2 The amount represents the services rendered to a jointly-controlled entity for a project work. The pricing policy was based on contractually agreed prices. 3 The amount mainly comprises a subsidiary’s purchase of vegetable oil from a related party totaling Baht 1,161 million and Baht 1,020 million for the years ended 31 December 2010 and 2009 in the consolidated financial statements, respectively. The pricing policy is based on prices agreed by distributors who absorb distribution costs. 1

Annual Report 2010

113


Balances as at 31 December 2010 and 2009 with related parties were as follows: Trade and other accounts receivable from related parties

Consolidated f inancial statements Separate ffi inancial statements Note

Subsidiaries Professional Computer Company Limited Jago Company Limited Loxley Wireless Company Limited Asia Security Management Co., Ltd. Parts Zone (Thailand) Co., Ltd. Others Jointly-controlled entity CKLX Joint Venture Associates Loxley GTECH Technology Company Limited Others Other related parties L-Mobile and Computer Co., Ltd. L-Direct Co., Ltd. TT&T Public Company Limited Others Total Less allowance for doubtful accounts Net Bad debts and doubtful debts expense for the year Write-off bad debts previously fully provided for (no effect to statements of income) for the year

114

Loxley Public Company Limited

13

2010

2009 2010 (in million Baht)

2009

-

-

11 4 7 2

31 20 7 5 3

-

21

-

21

143 6

119 5

143 4

119 3

3 5 157 (143) 14 11

19 3 4 3 174 (129) 45 2

1 172 (143) 29 34

19 2 2 1 233 (156) 77 119

19

-

46

-


Dividend receivable (included as part of other current assets)

Consolidated financial statements Separate ffi inancial statements 2010

Subsidiaries Loxley Wireless Company Limited Loxbit Public Company Limited Total

2009 2010 (in million Baht)

-

-

Interest rate

Loans to related parties Note Short-term Subsidiaries Jago Company Limited Associates Loxley GTECH Technology Company Limited 13 Total Less allowance for doubtfulaccounts Net Bad debts and doubtful debts expense for the year Write-off bad debts previously fully provided for (no effect to statements of income) for the year

2010 2009 (% per annum)

2009

19 19

40 40

Separate Consolidated fiffiinancial statements ffiinancial statements 2010

2009 2010 (in million Baht)

2009

-

6

-

-

-

8

6

6

400 400 (400) -

385 385 (30) 355

400 400 (400) -

385 393 (38) 355

370

-

370

30

-

-

8

30

Movements during the years ended 31 December 2010 and 2009 of loans to related parties were as follows: Loans to related parties

Short-term Related parties At 1 January Increase Decrease from set up allowance for doubtful accounts/equity loss At 31 December

Consolidated ffi ifi nancial statements Separate ffiinancial statements 2010

2009 2010 (in million Baht)

2009

355 15

31 354

355 15

31 354

(370) -

(30) 355

(370) -

(30) 355

The currency denomination of short-term loans to related parties as at 31 December 2010 and 2009 was denominated entirely in Thai Baht.

Annual Report 2010

115


Consolidated fi Separate financial statements financial statements 2009 2010 2009 2010 (in million Baht)

Trade and other accounts payable - related parties

Subsidiaries Societed Commercial Lao Company Loxbit P.A. Public Company Limited Data Mining Company Limited Loxbit Public Company Limited Others Associates BlueScope Lysaght (Thailand) Company Limited Thai Fiber Optics Company Limited Other related parties Thanakorn Vegetable Oil Products Company Limited Loxley International Company Limited Green Natural Products Limited Law Enforcement Technology Solution Company Limited Mappoint Asia (Thailand) Company Limited Others Total

Loans from related parties

Short-term Related parties Director

-

-

14 3 3

3 2 2 4

8 -

4 3

8 -

4 3

245 14 8

131 27 2

8

2

2 5 282

8 6 11 192

1 4 41

4 6 1 31

Interest rate 2010 2009 (% per annum)

3

Consolidated Separate fiffiinancial statements fiffiinancial statements 2010 2009 2010 2009 (in million Baht)

3, 8.5

1

2

-

-

Movements during the years ended 31 December 2010 and 2009 of loans from related parties were as follows: Loans from related parties

Short-term Related parties At 1 January Increase Decrease At 31 December

116

Loxley Public Company Limited

Consolidated Separate fiffiifinancial statements fiffiinancial statements 2010 2009 2010 2009 (in million Baht)

2 1 (2) 1

12 2 (12) 2

-

-


Significant agreements with related parties A subsidiary has entered into a technical service agreement with a related party in a foreign country to provide the Company with services, information, technology and know-how pertaining to airport security operation. The term of this agreement shall be terminated on the effective date of termination as agreed in writing by the parties or on the date the Airports of Thailand Public Company Limited contract expires, is terminated or revoked. A subsidiary is committed to pay a service fee based on certain percentage as indicated in the agreement.

6. Cash and cash equivalents

Cash on hand and cash at banks - current accounts Cash at banks - savings accounts Highly liquid short-term investments Total

Consolidated Separate financial statements financial statements 2010 2009 2010 2009 (in million Baht) 155 468 234 857

115 288 191 594

85 145 230

41 134 30 205

The currency denomination of cash and cash equivalents as at 31 December 2010 and 2009 was as follows: Consolidated Separate financial statements financial statements 2010 2009 2010 2009 (in million Baht) Thai Baht (THB) United States Dollars (USD) Total

809 48 857

584 10 594

182 48 230

195 10 205

7. Deposits pledged as collateral

Certain short-term and long-term fixed deposits and promissory notes at financial institutions have been pledged as collateral for the projects performance as at 31 December 2010. The short-term portion is included as part of current investments, while the long-term is included in other non-current assets. The pledged deposit amounts to Baht 37 million for the Group (31 December 2009: Baht 46 million).

Annual Report 2010

117


8. Trade and other accounts receivable

Consolidated f inancial statements Separate ffi inancial statements 2010

2009 2010 (in million Baht)

2009

157 2,503 2,660 (328) 2,332

174 2,538 2,712 (316) 2,396

172 765 937 (203) 734

233 1,067 1,300 (226) 1,074

Bad debts and doubtful debts expenses for the year

53

9

66

120

Write-off bad debts previously fully provided for (no effect to statement of income) for the year

26

112

51

108

Note Related parties Other parties Total Less allowance for doubtful accounts Net

5

Aging analyses for trade and other accounts receivable were as follow: Consolidated f inancial statements Separate ffi inancial statements 2010 Related parties Within credit terms Overdue: Less than 3 months 3-6 months 6-12 months Over 12 months Total Less allowance for doubtful accounts Net

118

2009 2010 (in million Baht)

2009

9

36

22

38

5 6 26 111 157 (143) 14

16 6 14 102 174 (129) 45

10 6 25 109 172 (143) 29

40 10 14 131 233 (156) 77

Other parties Within credit terms Overdue: Less than 3 months 3-6 months 6-12 months Over 12 months Total Less allowance for doubtful accounts Net

1,149

1,246

435

601

923 186 35 210 2,503 (185) 2,318

907 31 34 320 2,538 (187) 2,351

190 69 7 64 765 (60) 705

324 17 6 119 1,067 (70) 997

Total

2,332

2,396

734

1,074

Loxley Public Company Limited


Included in trade and other accounts receivable from other parties over the age thresholds of 6 months as at 31 December 2010 and 2009 are amounts receivable from government agencies and state enterprises as follows: Consolidated f inancial statements Separate ffi inancial statements 2010 6-12 months Over 12 months Total

17 27 44

2010 2009 (in million Baht) 11 87 98

7 9 16

2009 1 3 4

The currency denomination of trade and other accounts receivable as at 31 December 2010 and 2009 was as follows: Consolidated f inancial statements Separate ffi inancial statements 2010 Thai Baht (THB) United States Dollars (USD) Euros (EUR) Australian Dollars (AUD) Total

2,627 16 17 2,660

2010 2009 (in million Baht) 2,631 60 17 4 2,712

904 16 17 937

2009 1,219 60 17 4 1,300

9. Short-term loan to other party Interest rate

2010 2009 (% per annum) Former subsidiary Other 5,7 Total Less allowance for doubtful accounts Net

7

Consolidated f inancial statements

Separate ffi inancial statements

2010

2010 2009 (in million Baht)

98 11 109 (98) 11

98 1 99 (98) 1

-

2009 -

There was no movement of the short-term loan to other party during the years ended 31 December 2010 and 2009. Consolidated f inancial statements 2010

Short-term Other parties At 1 January Increase At 31 December

1 10 11

Separate ffi inancial statements

2010 2009 (in million Baht)

1 1

-

2009

-

The Group’s short-term loan to other party as at 31 December 2010 and 2009 was denominated entirely in Thai Baht. Annual Report 2010

119


10. Inventories

Merchandise inventories Project material and project in progress Goods in transit Total Less allowance for decline in value Net

11. Other current assets

Promotion receivables Prepaid expenses Advance to employees Accrued income Value added tax Dividend receivable Deposit Withholding taxes deducted at source Others Total

12. Investments in subsidiaries

Consolidated f inancial statements

Separate ffi inancial statements

2010

2009 2010 (in million Baht)

2009

522

367

278

221

204 2 728 (63) 665

488 80 935 (50) 885

34 2 314 (43) 271

65 79 365 (33) 332

Consolidated f inancial statements

Separate ffi inancial statements

2010

2009 2010 (in million Baht)

2009

63 27 20 14 7 22 153

68 35 5 10 29 34 32 29 242

3 5 9 40 34 15 106

7 4 12 19 16 58

Separate ffi inancial statements 2010 2009 (in million Baht)

At 1 January Acquisition/increase Write-off impaired investment previous fully provided for: Investment - at cost Allowance for impairment Decrease At 31 December

555 1,159

526 52

(330) 330 (15) 1,699

(23) 555

As at 31 December 2010, the Company wrote off its Baht 330 million investment in subsidiary in JAGO Co., Ltd in the separate f inancial statements after the subsidiary had been notif ied of its legal case against the GLO (Note 36 (b)). Additionally, the Company wrote off its trade and other accounts receivable and short-term loans to such subsidiary, previously fully provided for allowance for doubtful accounts, in the amounts of Baht 27 Million and Baht 8 Million, respectively.

120

Loxley Public Company Limited


Annual Report 2010

121

Subsidiaries Loxley Wireless Company Limited Jago Company Limited (not yet started principalcommercial operations) Data Mining Company Limited International Agriculture Holdings Company Limited Loxbit Public CompanyLimited Loxley Joint and HoldCo., Ltd. Asia Security ManagementCo., Ltd. Societed Commercial Lao Company Limited Parts Zone (Thailand) Co., Ltd. Loxley Property DevelopmentCompany Limited Loxley Global Co., Ltd. Loxley Thales Company Limited Loxley Trading CompanyLimited 99 99 99 99 92 69 67 60 59 51 51 50

99 99 99 99 69 67 60 59 51 51 50

(%)

2009

99

2010

Ownership interest

330 8 16 375 1,000 100 2,962 25 108 99 6 50

Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Kip Million Baht Million Baht Million Baht Million Baht Million Baht

100 Million Baht

2010

2009

100 2,962 25 108 99 6 50

330 8 16 375

Million Baht Million Baht Million Baht Million Baht Million Baht Million Kip Million Baht Million Baht Million Baht Million Baht Million Baht

30 Million Baht

Paid-up capital

8 401 1,000 70 20 15 66 50 3 25 1,758

100

2010

330 8 15 312 70 20 15 66 50 3 25 944

30

2009

Cost method

(6) (50) (3) (59)

-

2010

(389)

(330) (6) (50) (3)

-

8 401 1,000 70 14 15 66 25 1,699

100

8 15 312 70 14 15 66 25 555

30

2009

At cost - net

2009 2010 (in million Baht)

Impairment

Separate financial statements

Investments in subsidiaries as at 31 December 2010 and 2009 and dividend income from those investments for years then ended were as follows:

93 6 194

95

2010

50 4 5 71

12

2009

Dividend income


13. Investments in jointly-controlled entity and associates Consolidated fiffiinancial statements Separate ffiinancial statements 2010 2009 2010 2009 (in million Baht) At 1 January Share of profits from investments in jointly-controlled entity and associates accounted for using equity method, net Acquisition/increase Dividend income Loss on investment in associate exceeding carrying value Impairment loss Liquidation Decrease At 31 December

3,078

2,884

1,155

1,178

356 99 (322)

314 8 (129)

99 -

-

51 (5) 3,257

9 (8) 3,078

(35) (20) 1,199

(18) (5) 1,155

Investments in jointly-controlled entity and associates are based on the audited financial statements as at 31 December 2010 and 2009 except: - BlueScope Lysaght (Thailand) Company Limited and BlueScope Steel (Thailand) Company Limited which have an accounting period ended 30 June. Investments in those associates were recorded by including the f inancial statements of those associates for the six-month periods ended 30 June 2010 and 2009 (the financial statements for the years ended 30 June 2010 and 2009 which had been audited by other auditors) and for the six-month periods ended 31 December 2010 and 2009, which had been reviewed, but not audited by auditors. The carrying value of those investments in the consolidated f inancial statements as at 31 December 2010 and 2009 amounted to Baht 1,849 million and Baht 1,714 million, respectively and the share of prof it from those associates for the six-month period ended 31 December 2010 amounted to Baht 25 million and Baht 67 million, respectively. The carrying value of those investments as at 31 December 2010 and 2009 in the separate financial statements amounted to Baht 950 million.

122

Loxley Public Company Limited


Annual Report 2010

123

Jointly-controlled entity CKLX Joint Venture Associates Oriental Post Company Limited Poonsap CommunicationCompany Limited Thai Fiber Optics CompanyLimited BP - Castrol (Thailand) Company Limited Loxley GTECH TechnologyCompany Limited Guardfifire Limited Mobile Innovation Company Limited Foseco (Thailand) Limited Ecartstudio Co., Ltd. BlueScope Lysaght (Thailand) Company Limited BlueScope Steel (Thailand) Company Limited MOCAP Limited Mega Management Co., Ltd. L Solar 1 Co., Ltd. Total 50 45 40 40 35 30 27 26 26 25 25 21 25 -

50 45 40 40 35 30 27 26 30 25 25 21 25 45

2009

25

(%)

25

2010

Ownership interest

220 Million Baht

3,928 Million Kip

60 Million Baht

5,000 Million Baht

600 Million Baht

3 Million Baht

10 Million Baht

184 Million Baht

20 Million Baht

300 Million Baht

49 Million Baht

100 Million Baht

5 Million Baht

150 Million Baht

-

2010

150 5 100 49 300 20 184 10 3 600 5,000 60 3,928

Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Baht Million Kip -

-

2009

Paid-up capital

84 2 40 20 105 6 50 3 8 150 800 10 8 99 1,385

-

2010

84 2 40 20 105 6 50 3 8 150 800 10 8 1,286

-

2009

Cost method

119 3 136 939 62 15 21 5 253 1,596 3 5 96 3,262

9

2010

103 3 165 989 40 15 18 7 237 1,477 7 6 3,078

11

2009

Equity method

Consolidated financial statements

(5) (5)

-

-

2010 2009 (in million Baht)

Impairment

119 3 136 939 62 15 21 253 1,596 3 5 96 3,257

9

2010

103 3 165 989 40 15 18 7 237 1,477 7 6 3,078

11

2009

At equity - net

2 53 259 8 322

-

2010

2 4 116 7 129

-

2009

Dividend income

Investments in jointly-controlled entity and associates as at 31 December 2010 and 2009, and dividend income from those investments for the years then ended were as follows:


124

Loxley Public Company Limited

Jointly-controlled entity CKLX Joint Venture Associates Oriental Post Company Limited Poonsap CommunicationCompany Limited Thai Fiber Optics CompanyLimited BP - Castrol (Thailand) Company Limited Guardfire Limited Mobile Innovation Company Limited Foseco (Thailand) Limited BlueScope Lysaght (Thailand)Company Limited BlueScope Steel (Thailand)Company Limited Loxley GTECH TechnologyCompany Limited L Solar 1 Co., Ltd. Total 25 50 45 40 40 30 27 26 25 25 18 -

50 45 40 30 27 26 25 25 18 45

(%)

2009

25

2010

Ownership interest

220 Million Baht

300 Million Baht

5,000 Million Baht

600 Million Baht

10 Million Baht

184 Million Baht

20 Million Baht

150 Million Baht 5 Million Baht 100 Million Baht -

-

2010

150 5 100 49 20 184 10 600 5,000 300

Paid-up capital

-

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

Million Baht

-

2009

84 2 40 6 50 3 150 800 55 99 1,289

-

2010

84 2 40 20 6 50 3 150 800 55 1,210

-

2009

Cost method

(35) (55) (90)

-

2010

(55) (55)

84 2 40 6 15 3 150 800 99 1,199

84 2 40 20 6 50 3 150 800 1,155

-

2009

At cost - net

2009 2010 (in million Baht)

Impairment

Separate financial statements

2 53 159 8 222

-

2010

2 4 116 7 129

-

2009

Dividend income


Investment in the 3-digit and 2-digit online lotteries project Loxley GTECH Technology Company Limited, an associate of the Company, has entered into an agreement with the Government Lottery Office (GLO) of Thailand on 29 July 2005 to service the lottery project. The terms stipulated in the agreement require that the lottery commence within 7 months after the agreement has been signed. Because of circumstances, however, the project could not begin as scheduled. On 28 May 2008, the associate received a letter from the GLO indicating that the project was to be launched by 16 September 2008. Later, on 18 August 2008, the associate was informed in writing by the GLO about the results of their examination of the lottery system and the lottery vending machines installation. According to the GLO’s letter, the associate was permitted to partially install the vending machine (6,761 machines) in preparation for the project commencement. On 7 November 2008, the associate sent the notice letter to the GLO requesting them to comply with the contract and manage to have the sales of lottery started. The associate also demanded compensation for losses arising from the investment outlay totaling over Baht 2 billion within 30 days. In the case the GLO neglected to take appropriate actions, the associate would take legal action against the GLO as deemed necessary. On 24 December 2008, the GLO replied to the associate’s letter requesting fairness regarding the commercial launch of 3-digit and 2-digit online lotteries. The GLO responded that they had passed a resolution agreeing to such project; and that their resolution had been furnished to the Ministry of Finance. In April 2009, the associate lodged another letter with the GLO demanding that the Government should comply with the contract. However, the Board of Directors of the GLO passed a resolution for the GLO to conduct further study over legal and social impacts concerns. A public poll commissioned later on revealed that more than 50 per cent of the respondents supported the lottery launch. In August 2009, the Council of State replied to the queries of the GLO in respect of the sale of the 3-digit and 2-digit online lotteries that the GLO could be done under the Government Lottery Off ice Act, B.E.2517. And the Company received a letter from the GLO dated 14 December 2009 notifying that its Board of Directors (“the Board”) had passed a resolution on 4 December 2009 agreeing in principle to the sales of 3-digit and 2-digit online lotteries. The Board then requested that the project preparation be completed within 90 days for commercial launch, and reported to the Board for further Cabinet notification. In January 2010, the Prime Minister appointed a panel to study and examine the facts and legal concerns over the sales of 3-digit and 2-digit online lotteries so as to determine options of and alternatives to the sales of online lotteries within 30 days. As a consequence, the Board issued a letter dated 15 January 2010 to the associate stating that the Board had resolved on 5 January 2010 to delay the commercial launch preparation in accordance with the Board’s previous resolution on 4 December 2009 until the Prime Minister’s appointed panel could finalise its decision for the Board’s consideration. On 30 March 2010, the associate submitted a letter to the GLO requesting that they honor the agreement, and pay for the damages arising from non-compliance. The associate demanded that the GLO urgently comply with the contract, and launch the sales of lotteries. The associate also called for payment for damages incurred due to the operational delay and breach of agreement until the GLO honor the agreement. The demanded payment together with interest must be paid to the associate within 30 days after the GLO received the letter. The associate would, otherwise, take legal action and other measures deemed necessary to protect and enforce its rights. Consequently, on 9 June 2010, the associate was informed in writing by the GLO that GLO, as a government agency operating under the GLO Act, B.E. 2517, must strictly abide by the cabinet resolution and the prime minister’s direction. GLO is aware of the business consequence that the associate has sustained, and has already furnished all relevant facts to those having authorities under the GLO Act for consideration. Once the conclusion is obtained, the associate shall be accordingly informed. GLO strongly hopes that the issue will be resolved in the near future. However, the associate will be able to recover all amounts due under the agreement with the GLO as it proposes to take legal action in consultation with its legal advisors to make GLO honor the agreement and to recover all expenses Annual Report 2010

125


incurred plus related damages due under the terms of the agreement. However, as at 31 December 2010, the associate did not receive any further correspondence from the GLO regarding the project progress, and accordingly could not determine the date of debut sales of lottery. Furthermore, loss of the associate’s financial positions have been increasing and operating costs have been rising over the initial budgets, in addition, the length of the litigation process may take a long time. The Company cannot be reliably estimating the effect and the amount of time required to recover its investment in the associate. In respect of the above, the Company recorded full impairment loss on all remaining balances in respects of such project in the separate financial statements for the year ended 31 December 2010 as required by TAS 36 “Impairment of Assets.” The standard provided that when the recoverable amount of an investment is less than its carrying value, the Company must record impairment loss on such investment directly in the profit or loss by reducing the investment cost to its recoverable amount. The details are as follows:

Separate financial statements

Investment

Trade receivable Short-term loans (note 5) (note 5)

Total

(in million Baht)

Balance 31 December 2009 Addition At 31 December 2010

105 105

119 24 143

385 15 400

609 39 648

 Allowance for doubtful accounts At 31 December 2009 Addition At 31 December 2010

105 105

119 24 143

30 370 400

254 394 648

-

-

355 -

355 -

Net book value At 31 December 2009 At 31 December 2010

In the consolidated financial statements, the Group complies with TAS 28 “Investments in Associates” which states that the Company normally must record share of loss of an associate equals to its interest in the associate. The interest in an associate is the carrying amount of the investment in the associate under the equity method together with any long-term interests that, in substance, form part of the investor’s net investment in the associate, such as a settlement of loan that is neither planned nor likely to occur in the foreseeable future. The Company’s additional share of loss recognised under the equity method is treated as deductions to the components of the interests in the associate. The Company only recognises additional share of loss as liability only when the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

126

Loxley Public Company Limited


As at 31 December 2008, the Group was contingently liable as a joint-guarantor with the other two shareholders of the associate for the associate’s Baht 1,188 million long-term bank loan. Based on the shareholders agreement, the guarantee liability is divided among the shareholders in proportion to the amounts of payments of goods and services each shareholder received from such associate. As at 31 December 2008, the Group’s guarantee liability accounted for 18% or Baht 213.8 million of the totals. As at the same year ended, the Group recorded its share of loss over its interest in the associate in the amount of Baht 140 million and presented as other current liabilities in the consolidated balance sheet. During 2009, the associate repaid its outstanding bank loan in full, freeing it from respective guarantee liabilities. For the year ended 31 December 2010, the Group recorded additional share of loss over its interest in the associate on the consolidated financial statements, representing 35% interest in the associate. Such share of loss over its interest in the associate is presented as deductions to the trade receivable and short-term loans to the associate. In addition, the Group recorded additional allowance for short-term loans to the associate. The details are as follows:

Consolidate financial statements

Investment

Trade receivable Short-term loans (note 5) (note 5)

Total

(in million Baht)

Balance At 31 December 2009 Addition At 30 December 2010

105 105

119 24 143

385 15 400

609 39 648

Equity loss At 31 December 2009 Addition At 31 December 2010

105 105

119 24 143

30 27 57

254 51 305

Allowance for doubtful accounts At 31 December 2009 Addition At 31 December 2010

-

-

343 343

343 343

Net book value At 31 December 2009 At 31 December 2010

-

-

355 -

355 -

Annual Report 2010

127


14. Other long-term investments Movements during the years ended 31 December 2010 and 2009 of other long-term investments were as follows: Consolidated fiffiinancial statements 2010

128

Separate ffiinancial statements

2009 2010 (in million Baht)

2009

Available-for-sale securities At 1 January Disposal/decrease Valuation adjustment At 31 December

173 (5) 66 234

245 (118) 46 173

173 (5) 66 234

222 (108) 59 173

General investments At 1 January Acquisitions/increase Impairment losses At 31 December Total

79 (7) 72 306

72 7 79 252

22 (7) 15 249

22 22 195

Loxley Public Company Limited


Annual Report 2010

129

Total

General investments - at cost Other related parties Loxley Pacific CompanyLimited Thanakorn Vegetable Oil Product Co., Ltd. L-Direct Co., Ltd. Others Other parties

Available-for-sale securities - at fair value Other related parties Muangthai Insurance Public Company Limited Other parties

15 7 -

5

2010 (%)

15 7 18

5

2009

Ownership interest

700 300 -

590

2010

700 300 40

590

2009

Paid-up capital

161 35 13 25 234 270

36 36

2010

161 35 7 13 25 241 282

36 5 41

2009

Cost method

(141) (11) (10) (162) (162)

-

2010

(141) (7) (11) (3) (162) (162)

-

198

198 198

2009 2010 (in million Baht)

Impairment

132

132 132

2009

Unrealised gain from fair value changes

20 35 2 15 72 306

234 234

20 35 2 22 79 252

168 5 173

Fair value (Market price of listed securities)/ At cost - net 2010 2009

Other long-term investments as at 31 December 2010 and 2009, and dividend income from those investments for the years then ended were as follows: Consolidated financial statements

6 11 17 25

8 8

2010

3 22 25 27

2 2

2009

Dividend income


130

Loxley Public Company Limited

Total

General investments - at cost Other related party L-Direct Co., Ltd. Other Other parties

Available-for-sale securities - at fair value Other related parties Muangthai Insurance Public Company Limited Other parties

18

5

2010 (%)

18

5

2009

Ownership interest

40

590

2010

40

590

2009

Paid-up capital

25 25 61

36 36

2010

7 25 32 73

36 5 41

2009

Cost method

(10) (10) (10)

-

2010

(7) (3) (10) (10)

-

198

198 198

2009 2010 (in million Baht)

Impairment

132

132 132

2009

Unrealised gain from fair value changes

Separate fifinancial statements

15 15 249

234 234

22 22 195

168 5 173

Fair value (Market price of listed securities)/ At cost - net 2010 2009

12 12 20

8 8

2010

18 18 18

-

2009

Dividend income


Annual Report 2010

131

947 12 (8) 33 984 11 (2) 1 994

368 95 (1) 462

Buildings and improvements

368 -

Land

364

387 19 (42)

442 21 (67) (9)

Furniture, ffiixtures and off ice equipment

Equipment held for lease

(10) 8 201

183 27 (7)

151 15 (22) 39

103

103 -

120 6 (11) (12)

(in million Baht)

Tools and equipment

80

78 14 (12)

72 14 (8) -

Transportation equipment

Consolidated financial statements

(1) (9) 19

1 28 -

6 48 (1) (52)

Construction in progress

(12) 2,223

2,104 194 (63)

2,106 116 (117) (1)

Total

* Appraised land as at 31 December 2010 for the Group amounted to Baht 364 million (2009: Baht 269 million), based on the information provided by an independent appraiser and the Department of Lands in 2010.

Cost / revaluation* At 1 January 2009 Additions Disposals/written-off Transfers in (out) At 31 December 2009 and 1 January 2010 Additions Disposals/written-off Decrease from deconsolidation of subsidiaries Transfers in (out) At 31 December 2010

15. Property, plant and equipment


132

Loxley Public Company Limited

649

-

379 345

605 44 -

-

368 462

567 42 (4) -

-

Buildings and improvements

65 56

308

322 26 (40)

355 29 (62) -

Furniture, ffiixtures and office equipment

Equipment held for lease

50 61

(6) 140

133 19 (6)

122 21 (21) 11

21* 5*

98

82 17 (1)

79 25 (10) (12)

(in million Baht)

Tools and equipment

28 27

53

50 11 (8)

44 9 (3) -

Transportation equipment

1 19

-

-

-

Construction in progress

912 975

(6) 1,248

1,192 117 (55)

1,167 126 (100) (1)

Total

The cost of fully depreciated property, plant and equipment that was still in use as at 31 December 2010 for the Group amounted to Baht 561 million (2009: Baht 572 million).

* The assets held for lease are operating equipment subject to sale and leaseback agreements.

Net book value At 31 December 2009 At 31 December 2010

Accumulated depreciation At 1 January 2009 Depreciation charge for the year Disposals/written-off Transfer in (out) At 31 December 2009 and 1 January 2010 Depreciation charge for the year Disposals/written-off Decrease fromdeconsolidation of subsidiaries At 31 December 2010

Land

Consolidated financial statements


Annual Report 2010

133

412 3 (2) 413 3 (1) 415

258 258 86 344

Buildings and improvements

209 8 (11) 206

221 5 (29) 12

Equipment held for lease

57 2 (1) 58

54 3 (8) 8 -

12 (12)

(in million Baht)

Tools and equipment

Separate financial statements

22 4 (4) 22

22 6 (6) -

Transportation equipment

3 3

8 (8)

Construction in progress

959 106 (17) 1,048

979 25 (45) -

Total

* Appraised land as at 31 December 2010 for the Company amounted to Baht 275 million (2009: Baht 189 million), based on the information provided by an independent appraiser and the Department of Lands in 2010.

Cost / revaluation * At 1 January 2009 Additions Disposals/written-off Transfers in (out) At 31 December 2009 and 1 January 2010 Additions Disposals/written-off At 31 December 2010

Land

Furniture, ffiixtures and office equipment


134

Loxley Public Company Limited

104 91

309 15 324

-

258 344

296 15 (2) -

-

Buildings and improvements

30 25

179 13 (11) 181

177 16 (26) 12

Furniture, ffiixtures and office equipment

Equipment held for lease

11 8

46 5 (1) 50

47 6 (7) -

-

-

12 (12)

(in million Baht)

Tools and equipment

8 6

14 3 (1) 16

13 3 (2) -

Transportation equipment

3

-

-

Construction in progress

411 477

548 36 (13) 571

545 40 (37) -

Total

* Appraised land as at 31 December 2010 for the Company amounted to Baht 275 million (2009: Baht 189 million), based on the information provided by an independent appraiser and the Department of Lands in 2010.

Net book value At 31 December 2009 At 31 December 2010

Accumulated depreciation At 1 January 2009 Depreciation charge for the year Disposals/written-off Transfers in (out) At 31 December 2009 and 1 January 2010 Depreciation charge for the year Disposals/written-off At 31 December 2010

Land

Separate fifinancial statements


The cost of fully depreciated property, plant and equipment that was still in use as at 31 December 2010 for the Company amounted to Baht 358 million (2009: Baht 357 million). During the year ended 31 December 2010, The Company and a subsidiary reappraised its land. Based on the information provided by an independent appraiser, the appraised value increased amounting to Baht 95 million and Baht 86 million for the consolidated and separate financial statements, respectively. The Group/Company recorded the appraised value incremental including in “Unrealised gain on revaluation differences on land” which is shown under “Equity” in the consolidated and separate of fif inancial statements for the year ended 31 December 2010 in amounting to Baht 64 million and Baht 60 million (net of deferred tax liabilities), respectively. Separate fi 16. Intangible assets ffiifinancial statements Consolidated fiffiinancial statements Software License

Goodwill

Total

Software License

(in million Baht)

Cost At 1 January 2009 Additions Disposals/written-off At 31 December 2009 and 1 January 201 Additions Disposals/written-of At 31 December 2010

57 5 (1)

58 -

115 5 (1)

38 1 (1)

61 9 (1) 69

58 58

119 9 (1) 127

38 8 (1) 45

Accumulated amortisation At 1 January 2009 Amortisation charge for the year At 31 December 2009 and 1 January 2010 Amortisation charge for the year At 31 December 2010

23 5

58 -

81 5

10 4

28 6 34

58 58

86 6 92

14 4 18

Net book value At 31 December 2009 At 31 December 2010

33 35

-

33 35

24 27

17. Other non-current assets

Consolidated ffiifinancial statements 2010

Separate ffiifinancial statements

2009

2010

2009

34 19 5 58

37 19 6 62

(in million Baht)

Withholding taxes deducted at sources Deposits Fixed deposits pledged as collateral Prepaid land rental Others Total

91 34 27 19 13 184

85 23 29 9 146

Annual Report 2010

135


18. Interest-bearing liabilities

Consolidated ffiifinancial statements

Note

Current Bank overdrafts unsecured Short-term loans from ffiinancial institutions secured unsecured Liabilities under trust receipts secured Bank overdrafts and short-term loans from financial institutions Current portion of long-term loans from financial institutions secured unsecured Current portion of financial lease liabilities secured Current portion of long-term liabilities Short-term loans from related parties unsecured Non-current Long-term loans from financial institutions secured unsecured Finance lease liabilities secured Total

5

2010

Separate ffiifinancial statements

2009

2010

2009

(in million Baht)

6

18

-

1

87 624

90 656

190

371

400

458

374

453

1,117

1,222

564

825

11 806

27 156

806

156

18 835

33 216

8 814

10 166

1 1,953

2 1,440

1,378

991

134 168

104 974

168

974

22 324 2,277

16 1,094 2,534

5 173 1,551

6 980 1,971

Bank overdrafts and short-term loans from financial institutions and related parties As at 31 December 2010, the above loans bear interest at the floating rates ranging from 2.50% - 8.50% p.a. (2009: 2.40% - 11.50% p.a.). Under the terms of trust receipts, the Group/Company imported merchandise in trust for the banks. The Group/Company was obligated to maintain the goods or the proceeds from their sale and to hold them ready for repossession by the bank.

136

Loxley Public Company Limited


Long-term liabilities (a) The above long-term loans bear interest at the rates ranging from 4.13% to 5.88% per annum and MLR to MLR1.75% per annum; and are repayable in installments up to December 2014. (b) The Group/Company entered into financial lease agreements for machinery and equipment which are repayable in amounts as specified in the agreements up to July 2012. The Group/Company is subject to certain terms of the long-term loans, including the maintenance of certain financial ratios. The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities, as at 31 December 2010 and 2009 were as follows: Consolidated ffiinancial statements

Within one year After one year but within five years Total

Separate ffiinancial statements

2010

2010 2009 (in million Baht)

2009

1,935 302 2,237

1,407 1,078 2,485

981 974 1,955

1,370 168 1,538

Secured interest-bearing liabilities as at 31 December 2010 and 2009 were secured on the following assets: Consolidated ffiinancial statements

Land and buildings Trade accounts receivable and deposits pledged as collateral* Total

Separate ffiinancial statements

2010 2009 (in million Baht)

2010

2009

330

341

-

-

87 417

90 431

-

-

* A subsidiary has transferred to a bank as collateral under the security service project the right of collection of trade accounts receivable from such project, and the title to a fixed deposit account pledged under the same project. Finance lease liabilities Finance lease liabilities as at 31 December were payable as follows: Consolidated fiffiinancial statements Principal

Within one year After one year but within ffiifive years  Total



2010 Interest

Payments Principal (in million Baht)



2009 Interest

Payments

18

2

20

33

3

36

22 40

1 3

23 43

16 49

1 4

17 53

Annual Report 2010

137


Separate financial statements Principal

2010 Interest



Payments

Principal



2009 Interest

Payments

(in million Baht)

Within one year After one year but within ffiifive years Total

8

1

9

10

1

11

5 13

1

5 14

6 16

1 2

7 18

Interest-bearing liabilities of the Group and the Company as at 31 December 2010 and 2009 were denominated entirely in Thai Baht.

19. Trade and other accounts payable

Consolidated fiffiinancial statements

Note

Related parties Other parties Total

5

2010

282 1,514 1,796

Separate fiffiinancial statements

2009 2010 (in million Baht)

192 1,597 1,789

41 625 666

2009

31 644 675

The currency denomination of trade and other accounts payable as at 31 December were as follows: Consolidated fiffiinancial statements 2010

Thai Baht (THB) United States Dollars (USD) Euro (EUR) Swiss Franc (CHF) Australian Dollars (AUD) Great Britain Pounds (GBP) Total

20. Other current liabilities

Accrued cost and warranty cost Accrued expenses Others Total

138

Loxley Public Company Limited

1,377 395 7 16 1 1,796

Separate fiffiinancial statements

2009 2010 (in million Baht)

1,157 602 22 5 2 1 1,789

Consolidated fiffiinancial statements

258 385 6 16 1 666

2009

211 435 21 5 2 1 675

Separate fiffiinancial statements

2010

2009 2010 (in million Baht)

2009

414 149 109 672

397 200 62 659

107 9 51 167

191 15 53 259


21. Deferred tax liabilities

Deferred tax liabilities as at the years ended 31 December were as follows:

Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Deferred tax liabilities (Revaluation surplus on land)

109

70

82

56

22. Provision for employees’ long-term benefits

Independent actuaries carried out an evaluation of the Company’s obligations for employees’ long-term benefits using the Projected Unit Credit Cost Method. The Company has provided the provision for employees’ long-term benefits as follows: Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Present value of unfunded obligation Current portion Long-term portion Total

15 282 297

7 254 261

11 194 205

7 180 187

Expense recognised in profit or loss Current service cost Interest cost Total

31 12 43

28 10 38

17 8 25

16 7 23

4 - 4.5 3-5 60

4 - 4.5 3-5 60

4.5 5 60

4.5 5 60

 Principal actuarial assumptions Discount rate (%) Future salary increase (%) Retirement age (year old)

23. Share capital Par value per share (in Baht) Authorised At 1 January Ordinary shares At 31 December ordinary shares

2009

2010 Number

Baht

Number

Baht

(million shares / million Baht)

1

2,000

2,000

2,000

2,000

1

2,000

2,000

2,000

2,000

Annual Report 2010

139


2009

2010 Par value per share (in Baht) Issued and paid up At 1 January Ordinary shares At 31 December ordinary shares

Number

Baht

Number

Baht

(million shares / million Baht)

1

2,000

2,000

2,000

2,000

1

2,000

2,000

2,000

2,000

24. Reserves

Share premium Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available for dividend distribution. Legal reserve Section 116 of the Public Companies Act B.E. 2535 requires that a company shall allocate not less than 5% of its annual net prof it, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution. Currency translation differences The currency translation differences account within equity comprises all foreign currency differences arising from the translation of the financial statements of foreign operations. Fair value changes The fair value changes account within equity comprises the cumulative net change in the fair value of available-for-sale financial assets until the investments are derecognised or impaired. Valuation changes The valuation changes account within equity cumulative net change in the valuation of land included in the fifinancial statements at valuation until such land is sold or otherwise disposed of.

25. Segment information

Segment information is presented in respect of the Group’s business segments. The primary format is based on the Group’s management and internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise gain on sales of investments, share of prof its from investments in jointly-controlled entity and associates accounted for using the equity method, dividend income and central expenses. Business segments The Group comprises the following main business segments: Technology Sales and service of information technology, infrastructure, telecommunications, consumer electronics, special project, lottery business and others. Trading Trading of chemicals, construction materials and consumer products. Service and others Engagement in international businesses, rendering of services, provision of finance and administrative supports, and others.

140

Loxley Public Company Limited


Annual Report 2010

141

(19)

1,247

(47)

921

(6)

(45)

866

(14)

(36)

(526) (116)

686 59

2009

-

108

-

-

294 92

(337) (45)

2010

-

(53)

-

-

132 185

(162) (42)

2009

4,939 4,854 9,793

357 26 (115) (89) (42) (131)

(8,652) (1,587) (505) (10,744)

10,281 102 30 10,413

2010

The Group’s major operations are in Thailand.

(117) (16)

1,397

-

(50)

(602) (127)

748 55

2010

Eliminations

Depreciation

(62)

3,182

(8)

(32)

(3,759) (513)

4,234 29

2009

Service and others

5,558 (54)

2,513

(62)

(28)

(21)

(3,966) (571)

4,523 57

2010

Trading

Unallocated liabilities

Segment assets Unallocated assets Total assets

(49)

(4,340) (995)

5,318 44

2009

(44)

(4,378) (981)

Cost of sale of goods andrendering of services Selling and administrative expenses Unallocated expenses Total expenses

Share of profit from investments in jointly-controlled entity andassociates under equity method, net Profit before finance costs and income tax expense Finance cost Profit (loss) before income tax expense Income tax expense Profit (loss) for the year

5,347 35

2010

Technology

Revenues from sale of goods and rendering of services Other income Unallocated revenue Total revenue

Business segments result

10,076 90 114 10,280

2009

(126)

5,845

5,242 4,908 10,150

313 504 (117) 387 (76) 311

(8,493) (1,439) (157) (10,089)

Total

(in million Baht)


26. Fees and other income

Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Dividend income Gain on exchange rate Management fee income Interest income Others Total

27. Selling expenses

25 31 29 7 35 127

27 29 13 48 117

Consolidated ffi fiinancial statements 2010 2009

436 29 27 3 54 549

218 27 9 50 304

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Employee expenditure Promotion expenses Transportation Travelling expenses Others Total

28. Administrative expenses

357 160 63 49 52 681

339 180 53 21 30 623

Consolidated ffi fiinancial statements 2010 2009

249 34 26 17 23 349

235 21 21 14 19 310

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Employee expenditure Provisions for doubtful accounts, declining value in stock and investment Office and equipment rental Depreciation and amortisation expense Professional fees Entertainment Travelling expense Office overhead Technical service expenses Training expenses Others Total

142

Loxley Public Company Limited

402

426

179

150

87 88 69 58 57 23 15 14 3 81 897

17 83 68 55 46 45 24 12 12 25 813

130 48 36 8 51 14 8 10 65 549

163 51 37 6 35 39 8 58 547


29. Employee benefit expenses

Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Salaries, wages, overtimes and bonus Welfare Employees’ long-term benefits Contribution to defined benefits plans Retirement and pension funds Others Total

1,255 53 43 32 25 26 1,434

1,141 39 38 32 22 91 1,363

384 8 25 16 21 22 476

348 6 24 16 18 15 427

In 2005, the Company established a new contributory funded provident fund covering substantially all employees. This fund was registered with the Ministry of Finance under the Provident Fund Act B.E. 2530. Membership is voluntary upon attaining permanent status. Under the regulations of the fund, members are required to make monthly contributions to the fund at 5% of the members’ basic salaries and the Company is required to make monthly contributions to the fund at 5% of the members’ basic salaries. The Company will transfer its previous contributory funded provident fund to the new fund within 10 years according to the accounting period. The first transfer of the fund starts from 2005.

30. Expenses by nature

Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Changes in work in progress and fi ffiinished goods sold Employee benefiffiits expense Provisions for doubtful accounts, declining value in stock and investment Promotion expenses Depreciation and amortisation expense Transportation expenses Office and equipment rental Travelling expenses Entertainment Others Total expenses

7,945 1,434

7,939 1,363

3,554 476

3,355 427

429 160 123 123 110 90 76 253 10,743

17 180 131 108 83 45 46 177 10,089

499 34 40 85 63 37 51 100 4,939

193 21 44 75 51 39 35 72 4,312

Annual Report 2010

143


31. Income tax expense

The current tax expense in the consolidated and separate statements of income is more than/less than the amount determined by applying the Thai corporation tax rate to the accounting profit (loss) for the year principally because:

(a) the Group/Company unutilised tax losses brought forward from the previous year have been utilised during the year to set-off against the current year’s tax charge. (b)  the different treatment for accounting and taxation purposes of certain items of expense, in particular, provision for impairment loss of investments, provision for doubtful accounts and other provisions. (c) losses suffered by certain subsidiaries of the Group/Company cannot be set-off against the prof its of other subsidiaries of the Group/Company for tax purposes.

32. Basic earnings (loss) per share

The calculation of basic earnings (loss) per share for the year ended 31 December 2010 and 2009 were based on the profit (loss) for the years attributable to equity holders of the Company and the number of ordinary shares outstanding during the years as follows: Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million shares/million Baht)

144

Profit (loss) for the year attributable to equity holders of the Company (statement of income) Number of ordinary shares outstanding

(139) 2,000

310 2,000

761 2,000

(63) 2,000

Basic earnings (loss) per share (in Baht)

(0.07)

0.16

0.38

(0.03)

Loxley Public Company Limited


33. Adoption of Thai Accounting Standard (TAS) 19

The Company has early adopted Thai Accounting Standard (TAS) 19 “Employee Benef its”, which is anticipated to become effective for annual f inancial periods beginning on or after 1 January 2011 for 2010 f inancial statements. The adoption of TAS 19 has been applied retrospectively and the 2009 financial statements, which are included for comparative purposes, have been restated accordingly as follows: Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Unappropriated retained earnings (deficit) Balance before the adoption of TAS 19 Increase in provision for employees’ long-term benefits Balance after the adoption of TAS 19

799 (280) 519

443 (234) 209

(293) (187) (480)

(254) (163) (417)

Statement of income Profit (loss) for the year before adoption of TAS 19 Increase in provision for employees’ long-term benefits Profit (loss) for the year after adoption of TAS 19

(83) (48)

361 (50)

786 (25)

(39) (23)

(131)

311

761

(62)

Basic earnings per share decreased (Baht) Loss per share increased (Baht)

(0.02)

(0.02) -

(0.01) -

(0.01)

Annual Report 2010

145


34. Financial instruments Financial risk management policies The Group/Company is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The Group/Company does not hold or issue derivative financial instruments for speculative or trading purposes. Risk management is integral to the whole business of the Group/Company. The Group/Company has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group/Company’s risk management process to ensure that an appropriate balance between risk and control is achieved. Capital management The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Group def ines as result from operating activities divided by total shareholders’ equity, excluding non-controlling interests and also monitors the level of dividends to ordinary shareholders. Interest rate risk Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s/ Company’s operations and its cash flows. The Group/Company manages interest rate risk by analyzing exposure on an ongoing basis and by using a mix of both fixed interest rates and floating interest rates, depending on the market circumstances. Foreign currency risk The Group/Company is exposed to foreign currency risk relating to purchases and sales which are denominated in foreign currencies. The Group/Company primarily utilises forward exchange contracts with maturities of less than one year to hedge such financial assets and liabilities denominated in foreign currencies. The forward exchange contracts entered into at the reporting date also relate to anticipated purchases and sales, denominated in foreign currencies, for the subsequent period.

146

Loxley Public Company Limited


At 31 December 2010 and 2009, the Group/Company were exposed to foreign currency risk in respect of financial assets and liabilities denominated in the following currencies:

Note United States Dollars (USD) Cash and cash equivalent Trade and other accounts receivable Trade and other accounts payable Euros (EUR) Trade and other accounts receivable Trade and other accounts payable Swiss Franc (CHF) Trade and other accounts payable Australian Dollars (AUD) Trade and other accounts receivable Trade and other accounts payable Great Britain Pounds (GBP) Trade and other accounts payable Gross balance sheet exposure Currency forwards, net Net exposure of assets (liabilities)

Consolidated fiffiinancial statements 2010 2009

Separate fiffiinancial statements 2010 2009

(in million Baht)

6 8 19

48 16 (395)

10 60 (602)

48 16 (385)

10 60 (435)

8 19

17 (7)

17 (22)

17 (6)

17 (21)

19

(16)

(5)

(16)

(5)

8 19

(1)

4 (2)

(1)

4 (2)

19

(338) 86 (252)

(1) (541) 320 (221)

(327) 86 (241)

(1) (373) 320 (53)

Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or a counterparty to settle its financial and contractual obligations to the Group/Company as and when they fall due. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each f inancial asset in the balance sheet. However, due to the large number of parties comprising the Group’s/ Company’s customer base, management does not anticipate material losses from its debt collection. Liquidity risk The Group/Company monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s/Company’s operations and to mitigate the effects of fluctuations in cash flows. Determination of fair values A number of the Group’s/Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. Annual Report 2010

147


The Group/Company uses the following methods and assumptions in estimating the fair value of financial instruments: - - - - - - -

Cash and short-term investments The carrying amount approximates fair value because of the short period to maturity. Accounts receivable and accounts payable - trade and others The carrying amount approximates fair value because of the short period to maturity. Loans to and loans from related and other companies The carrying amount approximates fair value because most of these financial instruments bear interest at market rates. Investment in common shares The carrying amount of investment in common shares for which there are no available quoted market prices approximates the fair value based on the underlying net asset base of the investment. The fair value of investments in available-for-sale equity securities is determined by reference to their quoted bid price at the reporting date. Bank overdrafts and short-term loans from financial institutions The carrying amount approximates fair value because of the short period to maturity of these financial instruments. Long-term loan The carrying amount approximates fair value because most of these financial instruments bear interest at market rates. Short-term foreign currency forward contracts with maturity of shorter than 6 months Fair values of foreign currency forward contracts are measured at the market rates of forward contracts on the balance sheet date. The fair values closely approximate the contract values because of short maturity of the contracts.

35. Commitments with non-related parties Consolidated ffi fiinancial statements 2010 2009

Separate ffi fiinancial statements 2010 2009

(in million Baht)

Other commitments Unnegotiated letters of credits for goods and supplies Purchase orders for goods and services accepted by suppliers Purchase forward contracts Sale forward contracts Bank guarantees (for projects performance and customers tender guarantees) Total

188

141

59

135

2,147 120 34

2,298 326 6

1,426 120 34

1,756 326 6

2,257 4,746

2,149 4,920

1,835 3,474

1,629 3,852

The above short-term purchase and sale forward contracts will come to maturity within May 2011.

148

Loxley Public Company Limited


36. Contingent liabilities and contingent assets As at 31 December 2010: (a) A subsidiary is subject to a litigation claim as it and three other parties were jointly sued by a customer claiming for wrongful act compensation over alleged violations. The claim for compensation amounted to Baht 37.47 million, of which Baht 27.50 million and Baht 9.97 million are attributable respectively to the principle and 7.5% interest from 30 June 2004 to 30 April 2009. The customer additionally claimed for 7.5% interest to be accrued on top of the principle from 1 May 2009 onwards. At present, the court has suspended consideration of the civil case and temporarily taken the case off its case field in order to await the result of the criminal case which is linking case. However, since the management of the Company and its subsidiary believe that the subsidiary has no liability in respect of the called compensation; no provision for such compensation has been set aside in the financial statements. (b) The Company has invested in a 99% interest of a wholly owned subsidiary at the cost of Baht 330 million. The Company has already fully reserved an impairment loss on the investment. This subsidiary was a party to an agreement with the Government Lottery Off ice of Thailand (GLO) to distribute charitable lottery online. Under the agreement, the subsidiary was to supply and install online lottery equipment and comply with certain conditions and restrictions for a period of ten years, without cancellation right specified in the agreement. Furthermore, the subsidiary had the right to earn a service fee from the GLO for the distribution of the said lottery. In November 1999, the agreement with the GLO was terminated as the GLO could not comply with certain conditions of the agreement. The subsidiary has fully recorded the losses from the project. Subsequently in December 2000, the arbitrator judged that the GLO should pay compensation of Baht 2,509 million to the subsidiary, including interest of 7.5% p.a. from 4 January 2000 until full payment is received. In July 2004, the Courts of First Instance judged in favour of the subsidiary. After the Courts of First Instance rendered its verdict in 2004, the GLO filed an appeal with the Supreme Court in an attempt to overturn such verdict. The subsidiary consequently filed an appeal with the Supreme Court to counter the GLO’s appeal. In October 2009, the subsidiary submitted additional evidence to the Supreme Court. The GLO in response raised its objection to the subsidiary’s additional submission of evidence. On 24 February 2010, the Supreme Court ruled to reverse the Courts of First Instance’s verdict, resulting in the case coming to final. Conclusion that the GLO should not pay compensation to the subsidiary as previously judged by the Arbitrator and the Courts of First Instance. (c) Another subsidiary was brought into a lawsuit in 2009 claiming for compensation of Baht 10 million, by an insurance company of a contractor at Suvarnabhumi International Airport in conjunction with the loss of assets. As at 31 December 2010, the litigation proceeding was underway and results was yet to be determined. The management of the Company and its subsidiary believe, however, that the subsidiary is not liable to the compensation and that will be able to recover in full from its insurer any damages incurred from such litigation should the situation turn otherwise.

Annual Report 2010

149


37. Thai Financial Reporting Standards (TFRS) not yet adopted The Group/Company has not adopted the following new and revised TFRS that have been issued as of the reporting date but are not yet effective. The new and revised TFRS are anticipated to become effective for financial periods beginning on or after 1 January in the year indicated in the following table. TFRS

TAS 1 (revised 2009) TAS 2 (revised 2009) TAS 7 (revised 2009) TAS 8 (revised 2009) TAS 10 (revised 2009) TAS 11 (revised 2009) TAS 12 TAS 16 (revised 2009) TAS 17 (revised 2009) TAS 18 (revised 2009) TAS 21 (revised 2009) TAS 23 (revised 2009) TAS 24 (revised 2009) TAS 27 (revised 2009) TAS 28 (revised 2009) TAS 31 (revised 2009) TAS 33 (revised 2009) TAS 34 (revised 2009) TAS 36 (revised 2009) TAS 37 (revised 2009) TAS 38 (revised 2009) TAS 40 (revised 2009) TFRS 3 (revised 2009) TFRIC 15

Topic

Presentation of Financial Statements Inventories Statement of Cash Flows Accounting Policies, Changes in Accounting Estimates and Errors Events after the Reporting Period Construction Contracts Income tax Property, Plant and Equipment Leases Revenue The Effects of Changes in Foreign Exchange Rates Borrowing Costs Related Party Disclosures Consolidated and Separate Financial Statements Investments in Associates Interests in Joint Ventures Earnings per Share Interim Financial Reporting Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Investment Property Business Combinations Agreements for the Construction of Real Estate

Year effective

2011 2011 2011 2011 2011 2011 2013 2011 2011 2011 2013 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011

The management considers that the adoption of the above new and revised TFRS has no material impact on the consolidated and separate financial statements.

150

Loxley Public Company Limited


38. Reclassification of accounts Certain accounts in the 2009 financial statements have been reclassif ied to conform to the presentation in the 2010 financial statements as follows: Consolidated fiffiifinancial statements Before reclass.

Reclass.

After reclass.

2009

Separate fiffiifinancial statements Before reclass.

Reclass.

After reclass.

(in million Baht)

Balance sheet Current assets Trade and other accounts receivable Unbilled trade accounts receivable Retentions receivable Non-current assets Retentions receivable

2,476

(80)

2,396

1,154

(80)

1,074

915 -

(49) 7

866 7

505 -

(49) 7

456 7

-

122 -

122

-

122 -

122

The reclassifications have been made because, in the portion of management, the new reclassification is more appropriate to the Group/Company’s business.

Annual Report 2010

151


Auditor Remuneration 1. Financial Audit Fees The Company and subsidiary companies paid annual financial audit fees to Audit firm, individual, or related business to the auditor or audit firm in the total amount of Baht 9,284,000.00 2. Other Non-audit Fee Baht 115,200

Other Parties

152

- Registrar                       

Head Office Thailand Securities Depository Company Limited 4th and 7th Floor, 62 Thailand Securities Depository Building Ratchadapisek Road, Klong Toey Subdistrict, Klong Toey District, Bangkok 10110 Tel : +66 (0) 2229-2800 or Call Center +66 (0) 2229-2888 Fax : +66 (0) 2359-1259 Branch Office Capital Market Academy Building 2nd Floor, The Stock Exchange of Thailand 2/7 Moo 4 (North Park Project) Vibhavadi Rangsit Road, Tung Song Hong, Laksi, Bangkok 10210 Tel : +66 (0) 2596-9000 or +66 (0) 2596-9302-11 Fax : +66 (0) 2832-4994-6

- Auditor

Mrs. Siripen Sukcharoenyingyong Mr. Vichien Thamatrakul Mr. Veerachai Ratanajaratkul Mr. Charoen Poosamritlert

KPMG Phoomchai Audit Limited 21st Floor, Empire Tower Building 195 South Sathorn, Yannawa Subdistrict Sathorn District, Bangkok 10120 Tel : +66 (0) 2677-2000 Fax : +66 (0) 2677-2222

- Financial Advisor

-None-

- Legal Advisor

-None-

Loxley Public Company Limited

Certified auditor No. 3636 and/or Certified auditor No. 3183 and/or Certified auditor No. 4323 and/or Certified auditor No. 4068


OFFICE LOCATIONS Head Office

102 Na Ranong Road, Klong Toey, Bangkok 10110, Thailand Telephone : +66 (0) 2348-8000 Facsimile : +66 (0) 2348-8001 Homepage : www.loxley.co.th

Branch Offices

Regional Office

Loxley Suapah Building 304 Suapah Road, Pomprab Sattruphai, Bangkok 10100, Thailand

Warehouse

Loxley Bangkhen Building 2 Soi Phaholyothin 19, Chatuchak, Bangkok 10900, Thailand Telephone : +66 (0) 2515-8200

Siripinyo Building 475 11th Floor Siripinyo Building, Sri Ayudhaya Road, Thanonphrayathai, Ratchathewi, Bangkok 10400, Thailand Telephone : +66 (0) 2248-0270-71

244/2 Wua Lai Road, Hai Ya Subdistrict, Muang Chiang Mai District, Chiang Mai Province 50100, Thailand Telephone : +66 (0) 5328-3238 83 Moo 5, Baanmai Subdistrict, Muang Pathumthani District, Pathumthani Province 12000, Thailand Telephone : +66 (0) 2963-7940-5 9/45 Moo 5, Phaholyothin Road, Klong Nueng Subdistrict, Klong Luang District, Pathumthani Province 12120, Thailand 1 Moo 9, Huaybong-Thalan Road, Baankrua Subdistrict, Baanmor District, Saraburi Province 18270, Thailand Telephone : +66 (0) 3628-8800


Loxley Public Company Limited 102 Na Ranong Road, Klong Toey, Bangkok 10110, Thailand Phone +66 0-2348 8000 Fax +66 0-2348 8001

www.loxley.co.th

Loxley 10  

LOXLEY_2010 LOXLEY PCL Annual Report 2010