Page 1


Content Page Board of Director’s report to Shareholders

2

Audit Committee Report

3

General Company Information

5

Risk Factors

8

Nature of Business

9

Shareholders and management structure

15

Connected Transactions

26

Financial Statement and Operation Results

29

Explanation and Analysis on Financial Status Operating Results

39

Details of Director and Executive management

47

Audited Financial Statement


B Board o of Director’s R Report to the Shareh holders   

Thailaand’s eco onomy in n 2012 ggrew 6.4% % in term ms of GD DP as rep ported  recen ntly  by  th he  Natio onal  Econnomic  and  Socia al  Develoopment  Board  (NESD DB).   This growth h rate is hhigher th han the 4 4‐5%  preedicted  e earlier  by maany econ nomists.  The highh econom mic expa ansion lasst year ccan be  attributed  partly  to  the  t goveernment’s  huge  spending s g  to  stim mulate  domeestic  con nsumptio on,  amid  the  continuo ous  globbal  economic  slowd down, (esspecially in Europpe and the U.S.),, where tthe recessions  rolled d over fro om the previous yyear.  In  20012,  Thaiiland’s  advertisin a ng  indusstry  expa anded  byy  as  mu uch  as  12.4% %  in  term ms  of  ad  spend.   As  a  re esult,  ourr  group  of  comp panies’  billinggs grew 2 24%, while the pprofits inccreased 3 30% oveer the pre evious  year tto reach 94.9 milllion bahtt.  Part off this is d due to thhe fact that the  Goverrnment  adjusted d  the  jurristic  perrson  tax  from  300%  in  20 011  to  23%  in  2012  and  onw wards.    Therefore,  we  are  a in  thhe  positiion  to  declare a divid dend of o one bahtt per share, accou unting foor 63.2% of the  net prrofit. This dividen nd will bee paid in May 201 13.  In 20113 the fo orecast iss that Thaailand’s G GDP will expand  by 4‐4.5% and  the ad dvertisin ng industtry will grow by aabout 10 0%.  Our  aim is try our  best tto contin nue to gro ow our ggroup of companies to, att minimu um, no  less th han the aadvertising industry spending grow wth.                                                       

       Prakit Ap pisarnthaanarak                                                            Chairm man of th he Board  of Directors   Page 2   


Audit Committee Report The Audit Committee is composed of three Independent Directors which was appointed by the Board of Directors on March 16, 2012 and November 7, 2012. All Audit Committee members performed their duties and responsibilities as assigned by the Board of Directors, as follows: 1. Reviewed the quarterly and annual financial statement and recommended the same to the Board of Directors. 2. Reviewed internal control and internal audit system to ensure its efficiency. 3. Reviewed the business practice to ensure that the company performance complied with the SET laws, rules and regulations, and other laws. 4. Considered and proposed the external auditor and the audit fee. 5. Considered and supported the disclosure of connected transaction to ensure accuracy and completeness. 6. Prepared the Audit Committee’s performance report for past year. 7. Deliberated and endorsed other matters assigned by the Board of Directors. The performance of the Audit Committee in 2012 from its meetings is summarized below: 1. The company’s internal controls were adequate and appropriate for its business. 2. There was no risk for management, finance and investment as well as the compliance with all relevant laws. 3. The Company’s financial reports present in accordance with generally accepted accounting principles were accurate, reliable and contained complete essential information. Page 4 Page 3


The selection of the external auditors was duly made to appoint Mr.Pornchai Kittipanya-ngam, Certified Public Accountant (Thailand) No.2778, and Mrs.Suwanee Kittipanya-ngam, Certified Public Accountant (Thailand) No.2889 of Bunchikij Co.,Ltd. as the company’s auditor for the year 2013. They would be proposed to the Annual General Meeting for approval.

Dr.Pichai Charnsupharindr Chairman Audit Committee

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Part 1 General Information Prakit Holdings Public Company Limited was changed its name from Prakit & FCB Public Company Limited. The company main business activities are: 1. Investing in associated and subsidiaries companies. 2. Providing the management service, finance and accounting media planning and buying. 3. Media Advertising Agency. 4. Providing other services to associated and subsidiaries companies and other companies. Associated and subsidiary companies provide advertising services and main revenues are : 1. Agency Commission from planning and brokering various types of advertising medias. 2. Production Revenues from various type of advertising material : - Artwork advertising material for magazine, newspaper and other medias - TV Commercial - Radio spot 3. Service Revenues from event activities and public relation. Prakit Holdings Public Company Limited has been located at 88 Soi Sukhumvit 62, 3rd intersection, Sukhumvit Road, Bangchak, Prakanong, Bangkok 10260, Thailand. Company register no. 0107535000389, telephone no. (662) 7153000, facsimile no. (662) 3328522, website : www.prakit.com The Company’s registered capital : Ordinary share 99,484,000 shares of 1 Baht par value, issue and fully paid up capital 60,000,000 shares.

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Summary of Accociated and Subsidiary Company ACCOCIATED COMPANY Name : Direct Response (Thailand) Limited Home office address : 88 Soi Sukhumvit 62 Section 3, Sukhumvit Road, Bangchak, Prakanong, Bangkok.10260, Thailand. Advertising services with 2 major activities as follows : 1. To provide various types of public relations effort for clients such as releasing the information through mass media, holding news conferences and producing materials for public relations. 2. To produce direct advertising to the target groups for clients by producing and mailing directmail materials such as leaflets and brochures and organized. Registered Share : Ordinary share 2,000 shares of 1,000.- baht par value. Number of shares held by the Company : Ordinary share 980 shares that is 49% of issued and fully paid-up. SUBSIDIARY COMPANY Name : Prakit and FCB (Cambodia) Company Limited Home office address : 11 Street 430, Sangkat Phsar Doem Thkov, Khan Chamkarmorn, Phnom Penh, Cambodia. Advertising services with 2 major activities as follows : 1. To manage and broker to provide various type of advertising media such as television, radio, newspaper and etc. 2. To produce various type of advertising materials such as television commercials, radio sport, artworks for printed materials and etc., including to offer the other related services. Registered Share : Ordinary share 500 shares of US$50.- par value, issue and fully paid-up. Number of shares held by the Company : Ordinary share 400 shares that is 80% of issued and fully paid-up.

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Name

: DRAFTFCB (Thailand) Limited (Formerly named FCB Worldwide (Thailand) Limited) Home office address : 88 Soi Sukhumvit 62 Section 3, Sukhumvit Road, Bangchak, Prakanong, Bangkok. 10260, Thailand. Advertising services with 2 major activities as follows : 1. To manage and broker to provide various type of advertising media such as television, radio, newspaper and etc. 2. To produce various type of advertising materials such as television commercials, radio spot, artworks for printed materials and etc., including to offer the other related services. Registered Share : Ordinary share 100,000 shares of 100 baht par value, issue and fully paid-up. Number of shares held by the Company : Ordinary share 99,993 shares that is 99.993% of issued and fully paid-up. Name : Marketing Drive Worldwide (Thailand) Limited Home office address : 88 Soi Sukhumvit 62 Section 3, Sukhumvit Road, Bangchak, Prakanong, Bangkok. 10260, Thailand. Advertising services with 2 major activities as follows : 1. To provide various types of public relations effort for clients such as releasing the information through mass media, holding news conferences and producing materials for public relations. 2. To produce direct advertising to the target groups for clients by producing and mailing directmail materials such as leaflets and brochures and organize the event activities. Registered Share : Ordinary share 20,000 shares of 100.- baht par value, issue and fully paid-up. Number of shares held by the Company : Ordinary share 19,993 shares that is 99.965% of issued and fully paid-up.

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Other reference information (A) Registrar Thailand Securities Depository Co.,Ltd. 62 SET Building Fl.4, Rachadapisek Road, Klong Toey, Bangkok, 10110. Tel. 662-3591200 Fax 662-3591259 (B) Auditor Mr. Pornchai Kittipanya-ngam and/or Mrs.Suwanee Kittipanya-ngam Bunchikij Co.,Ltd. 87/102-103 Modern Tower Building 9th Floor, Ekamai Soi 3, Sukhumvit 63 Rd., klongton-Nua, Wattana, Bangkok 10110. Tel.662-3820414 Fax 662-3820417 (C) Legal advisor Mr. Siwa Disapirom Attorney Certificate No. 13357/2529 44/86 Soi Charoenpattana, Tiwanont Road, Taladkwan, Mueng, Nonthaburi. 2. Risk Factors 2.1 Business Risk Since the company’s nature of business is services render and investing in associated and subsidiary companies which operate in advertising business, the principal income of the company depends upon their operating results. Followings are risk factors of advertising business: 1. Loss of principal clients At present’s competitive situation, our group of company may loss all or part of revenue of principal clients which affect the company ‘s revenue. However, group of company must provide services for prospect clients and also improving our employees to provide best service to our present clients. 2. Increasing on media rate card Since there is occasionally increasing on media rate card, the clients may decrease in the volume of advertising. However, it isn’t affect to advertising budgets which have been planned in advance. In addition, the increasing on media rate card won’t affect to the agency’s income because agency fees will be calculated from the agreed rate multiply with cost of billings

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3. Increasing on cost of production on advertising materials. The affection will be the same of increasing on media rate card. 4. Decreasing on the rate of agency and service fees At present, the competition of decreasing on the rate of agency and service fees is severely, therefore, the agency is necessary to decrease its rate for maintainable the existing clients as well as enable to acquire the new clients and expand to new revenues. However, the associated and subsidiary companies have a policy to compensate them with cost and expenses controlling. 2.2 Legal Risk At present, there is a low which prohibit the advertisement on cigarette an alcohol. This may enforce to other products in future. However, it won’t affect to the clients products at present and future 3. Nature of business 3.1 Background and major development None 3.2 Nature of Business Nature of Business of Prakit Holdings Public Co., Ltd. 1. Providing media planning and buying, finance and accounting, management service and other services which require by subsidiaries and associated companies and other companies. 2. Holding company, invest in subsidiary and associated companies Nature of business of associated and subsidiary companies 1. Producing various types of advertising materials such as artwork, TV commercial, VDO. 2. Managing and brokering various types of advertising medias such as Television, radio, press etc. The revenue is agency commission. 3. Providing various types of public relations effort for clients and organizing the event activities. Policy of operation in subsidiary companies 1. Subsidiary in Indochina operating their business in their country only. 2. Subsidiary and associated in Thailand : DRAFTFCB (Thailand) Limited Page 9


Marketing Drive Worldwide (Thailand) Limited Direct Response (Thailand) Limited Each subsidiary and associated company is independent to operate advertising business. But they cannot provide any advertising business to the company that business line is the same as existing clients due to conflict of interest. 3.3 Income structure of associated and subsidiary companies in 2012 Type of billing 1. Media

2. Production

3. Public Relation and Events Total

By Prakit Holdings DRAFTFCB (Thailand) Other subsidiaries company Prakit Holdings DRAFTFCB (Thailand) Marketing Drive Worldwide (Thailand)

% of share 99.99

Billing’000 Baht 1,337,909 523,599

% 58.25 22.80

26,595

1.16

99.99

39,742 348,294

1.73 15.16

99.96

20,768

0.90

2,296,907

100.00

*Billing means actual advertising spending amount in both of media and production. However, the presentations in statements of income are as follows : Revenue Proceeds from Service (Production Billing) Less Cost of Services Gross Profit Agency fee (Media Commission not include media cost) Total 3.4 Business Targets

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XX XX XX XX XX


The company’s business targets are the operation with steady and continuously profit. This is enable to pay dividend to the shareholders and remuneration to the employees properly. Moreover, the company will render services to the clients with the most efficiency and meet their business target. 4. Nature of Business Operation of Associated and Subsidiary Companies 4.1 Nature of business 1. Managing and brokering various types of advertising media. 2. Producing advertising materials for clients which are printed materials, TV commercials and radio spots. 4.2 Marketing and the situation of competition 4.2.1 Marketing strategies Followings are marketing strategies of associated and subsidiary companies in order to build the brand of products and/or services efficiently and economically : 1. Analysing consumer behavior for enable to prepare advertising strategies for each category of products and services efficiently. There are 5 stages of work : Business Builders, Experience Architects, Data Strategists, Insight Catalysts and Content Creators. 2. Developing human resources continuously for enable to render services to clients and all concerned effectively and efficiently. Including to build the relationship with clients, Media Suppliers and Media agencies. In addition, the target clients of associated and subsidiary companies consist of trading firms, real estate firms, service firms and industrial firms. However, the new coming principal clients mustn’t be the same business as the existing principal clients. The channel of distributions of the associated and subsidiary companies are as follows : 1. Acquiring through pitching 2. Acquiring through personal relationship of the executives. 3. Acquiring through the parent company. 4.2.2 Industrial and competitive situation of Associated and Subsidiary Companies At present, Thailand has various types of advertising business firms. There are local, international and joint-investing firms. However, the international and joint-investing firms are more advantage than local firms in competition. This is due to their better Page 11


images, worldwide alliance and new technologies from abroad. The success of the advertising business is the efficiency to create the advertising output for the target clients and the effective in media planning and purchasing. At present, the situation of competition in the advertising business is very seriously which resulted to decrease the rate of agency and service fees. In addition. The small and medium advertising firms in the country can’t compete with the leading firms because the lack of the experienced persons in this career, modern technologies and equipments. Moreover, they can’t compete with the leading firms in media purchasing because the leading firms have media house which enable to purchase media with lower price. There are about 10 leading advertising firms in Thailand. So, there aren’t seriously competition because each of them has the principal client in the almost categories of products services. They can’t compete among themselves to have the principal client in a category of products and services because the clients in the same category won’t select the same advertising agency unless their parent companies in the abroad will change the advertising agency. However, this isn’t likely to occur frequently because the new agency will take a time to comply with the advertising philosophy of the clients resulting in the affection on advertising and marketing strategies including the client’s business. In addition, it is expected that there is a few leading new comers in Thailand because the existing leading firms are the affiliated or the joint-investing companies with the worldwide leading firms. 4.3 The procurement of products and services of the associated and subsidiary companies There are 3 types of production as follows : 1. Printed materials production There are various types of advertising in printing such as the advertising in newspapers, magazines, press, leaflets, indoor and outdoor signboards and signboards in bus, train, airport and etc. There are various technics in producing a printed materials. However, the general process in producing starts with the invention of advertising models or preparation of artworks through graphic computers for presenting to the clients. The final process will be made after artworks have been approved from the clients. In this regard, it is necessary to develop both the concerned personnel and equipment continuously including to aware costs and time in producing such materials. Page 12


2. TV commercial production TV commercial normally produces for 1 minute, 30 sec-minutes or 15 sec-minutes airing time. Neverless there are many stages to product one TV Commercial and take at lease 1 month for finishing. The stages of producing TV commercial are as follows : 1. Brief storyboard This is the first stage that all related persons must study the storyboard and choose the production house for shooting. 2. Internal pre-production Preparing before shooting such as casting, props and etc. 3. Pre-production To present the preparation on stage 2 to client. Get the approval from client before Shooting. 4. Shooting This is the stage of shooting by production house under supervision by Advertising Agency. 5. Post-production Final stage for cutting down, sound recording etc. before airing. 3. Radio spots production The stages of producing radio spots are as follows : 1. Brief Script 2. Sound recording 3. Sound mixing 4.4 Unbilled completed works None 5. Assets used for business 5.1 Fixed assets of the company and its subsidiary and associated companies Land and building The company has been located at 88 Soi Sukhumvit 62, 3rd intersection, Sukhumvit Road, Bangchak, Prakanong, Bangkok. This land and building are belong to the company. This land and building have been mortgaged to a Bangkok Bank as collateral for a 30 million baht credit line for overdrafts facilities of its subsidiary and related companies. Page 13


The Company has 2 plots of land : 1. The land at Sukhumvit Soi 50 has been leased to a company by making a 28 years long-term operating lease contract started from May 9, 2001. 2. The unused land at Sukhumvit Soi 62 total 1,354 square wah. Value of Company’s land and building as at December 31, 2012. Baht 191,026,000.00 2,699,157.82 87,766,589.78 281,491,747.60 54,448,246.16 227,043,501.44

Land Land Improvement Building Total Less Accumulated Depreciation Net book Value

5.2 Fixed Assets Evaluation No evaluation on company fixed assets because there wasn’t property for sale. 5.3 Subsidiaries and associated companies intangible assets Subsidiaries and associated companies invested in many types of computer software. Net book value as at December 31, 2012 is 224,308.23 baht. 5.4 Investment policy in Associated and subsidiary companies The company invested in associated and subsidiary companies based on the policy of foreign partner, so, they derived some foreign clients from the foreign partner. In addition, the company invested in associated and subsidiary companies in abroad according to the request of major clients which initiate to operate business in those countries, so, they need on efficient advertising agency. Moreover, the company has policy to expand typed of business, especially, advertising for target groups which is currently very much expansion.

6. Legal Cases

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A subsidiary company sued a client in civil court approximate amounted baht 8.0 million because the client faces with financial crisis. After that the Company and this client agree to compound the debt and client agrees to pay by installments. However this subsidiary have already reserved the allowance doubtful account for this client. 7. Capital Structure 7.1 As at December 31, 2012 there was authorized share capital 99,484,000 ordinary shares, 1 baht each issued and fully paid-up capital 60,000,000 ordinary shares, 1 baht each, totally 60,000,000.00 baht. 7.2 The shareholders The name and the share holding ratio of the top 10 shareholders as at May 4, 2012 are listed belows :

1 2 3 4 5 6 7 8 9 10

Name of Shareholder Mr.Prakit Apisarnthanarax’s group** FCB International Inc. True North Communication BNP PARIBAS SECURITIES SERVICE, LONDON BRANCH NORTRUST NOMINEES LTD. Mr.Apirak Apisarnthanarak Mr.Chan Mahasan Mr.Wichai Jiracharoenkijkol Mr.Prapand Apisarnthanarak Mr.Anucha Apisarnthanarak

Amount held 20,209,800 14,800,000 3,660,000 3,376,000

% 33.68 24.67 6.10 5.63

1,884,000 1,072,093 707,180 549,200 457,980 337,993

3.14 1.79 1.18 0.92 0.76 0.56

Remark : Shareholder means shareholder and related person according to SET Acts. ** Mr. Prakit Apisarnthanarax’s group including. - Mr. Prakit Apisarnthanarax - Mrs. Urairat Apisarntharax - Prakit and Associates Co., Ltd.* * Prakit and Associates Co., Ltd. is one of shareholder. There is no business relationship except directorship. Mr. Prakit Apisarnthanarax is also director of this company. 7.3 Dividend payment policy Page 15


The company has the policy to pay dividend at approximately 60% of net profit after tax. There is no dividend policy in associated and subsidiary companies but dividend payment is subject to Board of Directors approved. 8. Management 8.1 Management Organization consists of 1. The Board of Directors 2. The Audit Committee 3. The Executive Board The Board of Directors The Audit Committee Executive President

Executive Vice President

The Executive Board

Finance & Accounting Director

1.The Board of Directors consists of the following 12 members : Names Position Appointed Year Term in Director Page 16


1. Mr. Prakit Apisarnthanarax 2. Mr. Phisal Prahasdangkura 3. Mr. Pheecha Chaochotechuang 4. Mr. Vichien Nakintanond 5. Mr. Nicolas Joseph Camera 6. MR. Thanadsri Svati 7. Dr. Pichai Charnsupharindr 8. Mr. Sommanous Na Bangchang 9. Dr. Manoon Pahirah 10.Mr. Anucha Viriyachai 11.Mr. Apirak Apisarnthanarak 12.Mr. Jonathan Mark Allard 13.Ms. Wichuda Grairithikul

President Vice President Director Director Director Independent Director Independent Director Independent Director Independent Director Managing Director Director Director Company Secretary

1992 1992 1992 1992 2011 1993 2005 1992 2004 2008 2008 2011 2008

21 21 21 21 2 20 8 21 9 5 5 1 5

Term of The Board of Director In the Annual Shareholder General Meeting, one-third of directors must retire by rotation . The directors who are retiring by rotation may be re-appointed. The Independent Director’s qualification must be in accordance with SET’s regulation. In year 2012 there were 4 board of director’s meetings and each director attend as follows : Name The Board of Directors Meeting 1. Mr. Prakit Apisarnthanarax 4/4 2. Mr. Phisal Prahasdangkura 4/4 3. Mr. Pheecha Chaochotechuang 4/4 4. Mr. Vichien Nakintanond 4/4 5. Mr. Nicolas Joseph Camera 0/4 6. MR. Thanadsri Svati 0/4 7. Dr. Pichai Charnsupharindr 0/4 8. Mr. Sommanous Na Bangchang 4/4 0/4 9. Dr. Manoon Pahirah 4/4 10. Mr. Anucha Viriyachai 4/4 11.Mr. Apirak Apisarnthanarak 0/4 12. Mr.Jonathan Mark Allard

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Authority of The Board of Director To perform duties in accordance with the laws and objectives and Article of Association of the company as well as the resolution of the shareholders meeting. Authorized Director who represent the company is Mr. Prakit Apisarnthanarax cosigns with Mr. Phisal Prahasdangkura, Mr.Preecha Chaochotechuang, Mr. Anucha Viriyachai or Mr.Apirak Apisarnthanarak cosign with company’s seal. No limitation on the authority. Independent Director Appointment Policy The Company stipulates the qualifications of Independent Director is as follows : 1. Must hold no more than 1% of all voting share in the Company, its subsidiaries, affiliates or others which may cause a conflict of interests. 2. Must not be director who participated in management, not be an employee, consultant receiving a regular salary nor person with controlling authority of the Company, its subsidiaries, affiliates or others which may cause a conflict of interests for at lease two years. 3. Must not be relative to Executives, major shareholders controlling authorized person of the Company or its subsidiaries. 4. Must have no business relation with the Company, affiliates or others which may cause a conflict of interests that could lead to a lack of independence. Must not be major shareholders, director or management of the partners of the Company, its subsidiaries, affiliates or others which may cause a conflict of interests for at lease two years. 5. Must not be external auditor of the Company, its subsidiaries, affiliates or others which may cause a conflict of interest and must not be major shareholders, directors or partner of auditor company which audit the Company, its subsidiaries, affiliates or others which may cause a conflict of interest for at lease two years. 6. Must not be the company of professional services including legal consultant or financial consultant which gain service fee more than two million baht per year from the Company, its subsidiaries, affiliates or others which may cause a conflict of interest and must not be major shareholders, directors or partner of the Company which provide this professional services for at lease two years. 7. Must not be director who represents company director, major shareholders or shareholders who related to major shareholders

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8. Must not posse any characteristic that cannot independently comment the Company operation. 2. The Audit Committees The company’s Board of Director #2/2012 on March 16, 2012 and #4/2012 on November 7, 2012 have appointed the Audit Committees consist of 3 independent directors as follows : 1. Dr. Pichai Charnsuparindr Audit Committee Chairman 2. Dr. Manoon Pahirah Audit Committee Member 3. Mr. Sommanous Na Bangchang Audit Committee Member with financial and accounting Knowledge 4. Ms. Wichuda Grairithikul Audit Committee Secretary Duties and Responsibilities of Audit Committees. 1. Review and ensure that the company’s financial disclosure are accurate and sufficient. 2. Ensure that the company has appropriate and effective internal control and internal audit systems. 3. Monitor that the company complies with the securities and Exchange Acts, regulation of the SET, and any related business laws. 4. Consider, select and nominate the company’s auditor and audit fee. 5. Consider that the company complies with all connected transaction disclosures or the conflict of interest disclosures. 6. Prepare an Audit Committee Report which is disclosed in the company’s annual report and signed by the chairman of the Audit Committee. 7. Carry out the Board of Director assignment which agreed upon by the Audit Committees. Participation in the Audit Committee meeting In 2012, the Audit Committee held 4 meeting and each member attend as follows : 1. 2. 3. 4.

Name MR.Thanadsri Svati* Dr.Pichai Charnsupharindr** Dr.Manoon Pahirah Mr.Sommanous Na Bangchang

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Audit Committee meeting 2/4 4/4 4/4 4/4


*MR. Thanadsri Svati resigned on November 6, 2012. **Dr. Pichai Charnsupharindr to be Audit Committee Chairman in place of MR.Thanadsri Svati on November 7, 2012. 3. Executive Board Executive Board was management team as at December 31, 2011 consistes of 6 members as follows : 1. Mr. Prakit Apisarnthanarax Executive President 2. Mr. Phisal Prahasdangkura Executive Vice President 3. Mr. Anucha Viriyachai Managing Director 4. Mrs. Sirion Chernpipat Executive Media Director 5. Miss Wichuda Grairithikul Finance Director 6. Mrs. Charuwan Kulyanamitr Human Resource Director Duties and responsibilities of Executive Board To be responsible for management of day to day operation : 1. To appoint persons as needed and qualified, assign duties and responsibilities or special for them. 2. To plan projects and propose to Managing Director. 3. To review the company regulation which related to employee. 4. To resolve the company problem. 5. To approve employee promotion and salary increase. 6. To improve the quality of work. 7. Other which assign by The Board of Director 8.2 Appointment of Directors. 1. The Board of Directors. The appointment of director is made by a majority vote of the shareholder’s meeting in accordance with the following conditions and procedures. (1) One shareholder shall have one vote for each share (2) Each shareholder shall exercise all the votes he/she has under (1) to appoint the nominated persons to be directors on a person by person basis, provided that he can not divide his vote to any person to any extent. (3) The persons obtaining the most votes in descending order shall be elected as directors equal to the member of directors required or ought to be elected of there is a tie in the last to be elected and this exceeds the said Page 20


number of directors the presiding chairman will have the casting vote for election of last director. 2. The Audit Committee To be appointed by The Board of Director. 3. Executive President To be appointed by The Board of Director. 4. Executive Board To be appointed by The executive president. 8.3 Remuneration of Directors and management The company directors and management 1. Cash benefits a. In 2012 total directors’remuneration were as follows : Name 1. MR.Thanadsri Svati 2. Mr.Phisal Prahassadangura 3. Mr.Vichien Nakintanond

Remuneration 135,265.00 1,200,000.00 360,000.00

Particular of benefits Audit Committee Board of Director Company Director & Subsidiary executive 4. Mr.Preecha Chaochotechaung 1,440,000.00 Company Director 5. Dr.Manoon Pahirah 40,000.00 Meeting allowance 6. Dr.Pichai Charnsupharindr 40,000.00 Meeting allowance 7. Mr.Sommanous Na Bangchang 240,000.00 Audit Committee Member with finance and accounting and meeting allowance b. In 2012 total Executive Boards’ remuneration were Baht 13,780,753.52. 2. Other Benefits None The subsidiaries directors and management 1. Cash benefits. In 2012 total Executive Boards’ remuneration were Baht 22,065,515.52 2. Other Benefits None

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8.4 Good Corporate Governance Policy on corporate governance The Board of Directors have well recognized the importance of Good Corporate Governance and adopted a policy to ensure that all corporate business is conducted in accordance with high standards of Corporate Governance with legally and ethically accepted corporate practices as well as complies with the Securities and Exchanges Acts, regulation of the SET and the resolution of the shareholder’s meeting. Shareholders right The company had set up an ordinary general meeting in 2012 on April 23, 2012 at company’s office. The Board and the management always conducts the shareholder’s meeting in just and equal manner by giving equal opportunity to all the shareholders groups to participate in the meeting. The Company has not still announced the AGM invitation letter in the website. The Company’s role with stakeholders The Company realizes the importance of various stakeholders group with the Board of Director stipulate a process to build cooperation between the Company and stakeholders, employees, customers, partners, competitors and shareholders. Employees The Company takes care of its employees, with appropriate and fair returns which provident fund, transportation service, birthday activities, training. In 2012, the Company provides both outsources and various internal trainings. Additionally, the Company encourages employees in creative department to Award competition. Customers The Company intends to develop the quality of its product to ensure the maximum customer confidence and satisfaction. Partners The Company has the policy of equal and fairness with all trading partness, strictly honor on agreements and conditions. Competitors The Company emphasizes to do business ethically and fairly. The Company will not defame the competitors.

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Shareholders The Company commit to build the financially secured business and carry out business in good corporate governance. Society In Year 2011, the Company produced a TV Commercial for Siriraj Hospital. This for donation to build Siaminthrathiraj building in Siriraj hospital. Shareholders meeting The company send out the letter of invitation, annual report and required documents to shareholders and announce in newspapers under the public company law. In shareholders meeting, shareholders will be treated fairly. Shareholders can propose additional agenda or nominate persons for directorship prior to the shareholders meeting, in accordance with the company regulations. Leadership and Vision The Board of Directors had set internal control system internal inspection and effectiveness, risk management measures and consistently monitor and report to the Board of Director Meeting. The Board of Director took a part in setting the vision, business plan and yearly budget and also monitor the management performance to ensure that operation carried out correctly and effectively. Business Ethics The company’s management has prepared a detailed code of conduct for all the offices of the company to use as guideline in performing their jobs and duties. Balance of Non-Executive Directors 1. The Board of Directors consists of 12 directors as follows : Executive Directors 4 Non-executive Director 2 Independent Directors 4 Directors from foreign shareholders 2 2. Audit Committees consists of 3 directors as follows : All 3 Audit Committees are independent directors. 3. The Executive Board consists of 6 Directors as follows : From the Board of Directors 3 From other executives 3

Page 23


Aggregation of Segregation of Positions The company has segregate the position of president and the position of the Managing Director. The company determined the proportion of independent directors to be not less the 1/3 of the number of company directors. The Board of Directors’ meeting The Board of Directors’ meeting is set up regularly and the company will determine the date of the meeting 7 days in advance. Relations with Investors The company has disclosed significant Financial Information and Non Financial Information accurately, timely and transparently in accordance with the rules of The Stock Exchange of Thailand. Director’s Reporting The Board of Director is responsible for the Consolidated and the Company Financial Statements and the non financial information as reported in the annual report. The financial statements had been prepared in accordance with Thai General Accepted Accounting Standard. Significant accounting policies includes consistency prudence and accruals. The company places a lot of emphasis on internal control system at both the management and operation levels. Conflict of Interest The Company’s Board of Directors have been informed for legal and ethical conflict of interests and related transactions guidelines. The Company has disclosed, in accordance with the regulations of Stock Exchange of Thailand, such information, detail and reason/necessity, If any, in the Company’s annual report and the 56-1 form. The company further uses the audit committee, internal auditors, certified auditor and legal advisor to review compliance. Remuneration for Directors and Management The remuneration of the Company’s Directors and Management has been regarded. Those of the same business in order to attract highly qualified individuals to join the company for a long period. The Sub-committee The authority and responsibility of the Board and its committees are clearly defined in the Company’s annual report and the 56-1 form. Page 24


Controlling System and Internal Audit The Audit Committee controls the Internal Auditor function, review the management information and performance reporting, controls risk and performance of the management. They meet and report quarterly to the Board of Directors. However, the management is responsible to provide a controlling system in order to enable the company’s performance efficiently. 8.5 Internal Information Policy The company’s policy isn’t allow directors and executives to use the internal information of the company for personal benefits prior disclose to public. 8.6 Human Resources As at December 31, 2012, altogether there was 78 employees. Consist of Management 4, Media 35, Accounting and Finance 14, Administration 17, Legal and Government Relation 6 and IT 2. The total remuneration for 2012 was Baht 50,179,634.50 There are employees developing scheme every years by inviting outside specialist to train and provide knowledge in practical. Besides, some employees will be trained at home office and out-source institutions. 9. Internal Control According to the Audit Committee’s evaluation, the company’s internal control is sufficient and suitable.

Page 25


10. Related Transaction 10.1 The Company has certain transactions with related companies. These companies are related by having common share holdings and/or directors and/or company managements as described below : Relationship and name Subsidiaries DRAFTFCB (Thailand) Ltd. Marketing Drive Worldwide (Thailand) Ltd. Associated Companies Direct Response (Thailand) Ltd.

Subsidiaries DRAFTFCB (Thailand) Ltd. Marketing Drive Worldwide (Thailand) Ltd. Associated Companies Direct Response (Thailand) Ltd. Related Companies 62 Graphics and Retouch Co.,Ltd.

Description Rent Income

Amount’000 2,627 480

Reason The Company charges office rental per used space base on the rate charged to other tenant.

60

Total Management Income

3,167 34,566 384

96

120

Total

35,166

Page 26

The Company has agreement with subsidiaries and related companies for management service.


Relationship and Name Subsidiaries Marketing Drive Worldwide (Thailand) Ltd. Associated Companies Direct Response (Thailand) Ltd.

Subsidiaries Marketing Drive Worldwide (Thailand) Ltd.

Subsidiaries DRAFTFCB (Thailand) Ltd. Marketing Drive Worldwide (Thailand) Ltd. Direct Response (Thailand) Ltd. Related Company 62 Graphics and Retouch Co.,Ltd.

Description Other service Income Electricity & Water Supply

Amount’000

“

24

Total

120

96

Service Income 57

Total

57

Production Cost

3,073

Selling expenses

100

Selling expenses

960

Production Cost

715

Total

4,848

Reason The Company has agreement with subsidiaries to charged expense based on estimated used units.

The Company buys media for subsidiaries due to be cheaper than buy by themeself.

The Subsidiaries provide creative work and marketing service to the Company.

These related transactions are the normal transaction during the Company, subsidiaries and related company for maximized profit.

Page 27


10.2 The Company has guaranteed an overdrafts facilities and short-term loan of subsidiaries companies are as follow : ● The Company’s fixed deposit amounted 30 million baht has been pledged as a security for DRAFTFCB (Thailand)’s loan facilities including bank overdraft of 5 million baht and short-term loan of 25 million baht. ● The Company’s mortgaged part of land and building to a bank as collateral for a 58 million baht for 30 million baht overdrafts facilities of DRAFTFCB (Thailand).

Page 28


11 Financial Statement and operating results 1. Auditor Report Summary Auditor has audited the accompanying consolidated and separate financial statements of Prakit Holdings Public Company Limited and its subsidiaries, and of Prakit Holdings Public Company Limited, respectively, which comprise the consolidated and separate statements of financial position as at 31 December 2012, the consolidated and separate statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Consolidated and Separate Financial Statements Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Auditor responsibility is to express an opinion on these consolidated and separate financial statements based on his audit. Auditor conducted his audit in accordance with Thai Standards on Auditing. Those standards require that auditor comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. Auditor believe that the audit evidence auditor has obtained is sufficient and appropriate to provide a basis for his audit opinion. Opinion Auditor’s opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial position as at 31 December 2012 and the financial performance and cash flows for the year then ended of Prakit Holdings Public Company Limited and its subsidiaries, and of Prakit Holdings Public Company Limited, respectively, in accordance with Thai Financial Reporting Standards. Other Matter The financial statements of Prakit Holdings Public Company Limited and its subsidiaries, and of Prakit Holdings Public Company Limited for the year ended 31 December 2011, were audited by another auditor who expressed an unmodified opinion on those statements on 28 February 2012 with emphasis of matter in relation to the adoption of the revised and new accounting standards issued by the Federation of Accounting Professions during the year 2011.

Page 29


2. Consolidated Financial Statement The company presents the Audited Financial Statement and operating results which compare in 3 years. PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2012, 2011 AND 2010 Unit : Baht 2012 79,305,094

Consolidated 2011 87,403,864

2010 63,313,118

25,277,720 500,000 240,208,629

24,444,757 1,500,000 152,024,171

23,805,551 500,000 158,731,612

5,000,000 412,227,122 11,864,535 774,383,100

24,500,000 335,116,621 8,713,588 633,703,001

16,250,150 319,448,419 18,663,173 600,712,023

30,000,000 1,807,305 170,411,528 455,000 136,215,000 96,649,280 224,308 496,924 436,259,345

32,500,000 1,292,561 139,448,565 865,000 136,215,000 101,579,028 609,901 543,510 413,053,565

32,500,000 617,483 188,537,400 859,841 136,215,000 99,145,893 1,043,826 588,515 459,507,957

1,210,642,445

1,046,756,566

1,060,219,980

ASSETS CURRENT ASSETS Cash and cash equivalents Current investments Personal fund Fixed deposit Others Investments in securities Current portion of held-to-maturity debt securities Trade and other accounts receivable - net Other current assets Total Current Assets NON-CURRENT ASSETS Bank deposit held as pledge Investments in associated and subsidiary companies Other long-term Investment Loans to Employees Investment property Property, Plant and Equipment-net Intangible assets - net Other non-current Assets Total non-current Assets TOTAL ASSETS

Page 30


PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT 31 DECEMBER 2012, 2011 AND 2010 Unit : Baht LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Trade and other accounts payable Accrued income tax Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Deferred Leasehold Right Employee benefit obligations Total non-current liabilities TOTAL LIABILITIES SHAREHOLDERS' EQUITY Share capital Authorized share capital 99,484,000 common shares,Baht 1.- each Issued and fully paid - up capital 60,000,000 common shares, Baht 1.- each Premium on share capital Retained earnings Appropriated Legal reserve Unappropriated Other components of equity Total shareholders'equity attributable to the owener of the company Non-controlling interest Total Shareholders' Equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

2012 301,962,226 6,313,594 30,767,909 339,043,729

Consolidated 2011 205,136,830 6,601,027 26,860,233 238,598,090

2010 259,896,511 4,752,370 22,668,864 287,317,745

18,819,150 15,696,192 34,515,342 373,559,071

19,903,634 9,794,531 29,698,165 268,296,255

20,988,116 2,400,000 23,388,116 310,705,862

99,484,000

99,484,000

99,484,000

60,000,000 193,568,560

60,000,000 193,568,560

59,484,000 189,775,960

10,000,000 584,869,002 (12,864,267) 835,573,295 1,510,079 837,083,374

10,000,000 532,337,681 (18,977,556) 776,928,685 1,531,626 778,460,311

10,000,000 498,415,799 (10,029,890) 747,645,869 1,868,250 749,514,119

1,210,642,445

1,046,756,566

1,060,219,980

-

Page 31

-

-


PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2012, 2011 AND 2010 Unit : Baht Consolidated 2011

2012 Revenue Revenue from rendering services Revenue from agency Interest income Dividend income Management income Other revenues Total revenue Expenses Cost of rendering services Selling and administrative expenses Finance cost Total expenses Profit before share of profit from investment in associated Share of profit (loss) from investment in associated - equity method Profit before income tax expenses Income tax expenses Net profit for the year Other comprehensive income (loss) : Foreign currency translation differences for foreign operation Net change in fair value of available for sale investment Other comprehensive income for the year, net of tax Total comprehensive income for the year Profit (loss) attributable to: Owners of the parent Non-controlliong interests Net profit for the year Total comprehensive income attributable to : Owners of the parent Non-controlliong interests Total comprehensive income for the year Earnings per share (Unit : Baht) Basic earnings per share Page 32

2010

398,128,774 144,260,950 6,810,203 2,528,039 216,000 20,423,563 572,367,529

393,111,165 129,917,568 6,039,280 3,286,380 216,000 19,829,209 552,399,602

390,862,822 96,865,583 5,855,898 3,085,660 136,000 13,615,992 510,421,956

291,425,160 157,974,395 0 449,399,555 122,967,974

283,073,978 165,744,352 5,617 448,823,947 103,575,655

285,888,028 149,914,393 0 435,802,421 74,619,535

514,745 123,482,719 (28,569,245) 94,913,474

38,856 103,614,511 (33,036,562) 70,577,949

(31,172) 74,588,363 (19,638,149) 54,950,213

11,802 6,101,487 6,113,289 101,026,763

54,627 (9,002,293) (8,947,666) 61,630,283

110,871 19,069,624 19,180,494 74,130,707

94,932,571 (19,097) 94,913,474

70,666,382 (88,433) 70,577,949

55,432,980 (482,767) 54,950,213

101,045,860 (19,097) 101,026,763

61,718,716 (88,433) 61,630,283

74,613,474 (482,767) 74,130,707

1.58

1.18

0.93


PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENTS OF CHANGE IN SHAREHOLDERS' EQUITY(CONSOLIDATED) FOR THE YEAR ENDED 31 DECEMBER 2010, 2011 AND 2012 Unit : Baht

Equity attributable to owners of the Company Retained earnings Other components of shareholders' equity

Note Balance at 1 January 2010 Transactions with owners, recorded directly in shareholders' equity Contributions by and distributions to owners of the Company Dividends to owners of the Company Dividend to minority of the Company Total contributions by and distributions to owners of the Company

Issued and paid-up share capital

Share premium

Legal reserve

59,484,000

189,775,960

10,000,000

Changes in ownership interests in subsidiaries Addition of non-controlling from disposal of subsidiary Total transactions with owners, recorded directly in equity Comprehensive income for the year Profit or loss Other comprehensive income Total comprehensive income for the year Balance at 31 December 2010

-

-

-

-

-

59,484,000

189,775,960

Fair value changes in available-for-sale Unappropriated investments

471,171,057

(28,997,722)

Currency translation differences

Total other components of equity

(212,662)

(29,210,384)

Equity Total attributable to owners of Non-controlling Shareholders' the Company interests equity

701,220,633

2,536,155

703,756,788

-

(28,004,500) -

-

-

-

(28,004,500) -

(1,400)

(28,004,500) (1,400)

-

(28,004,500)

-

-

-

(28,004,500)

(1,400)

(28,005,900)

-

(183,738)

-

-

-

(183,738)

(183,739)

(367,477)

-

(28,188,238)

-

-

-

(28,188,238)

(185,139)

(28,373,377)

55,432,980 19,180,495 74,613,475 747,645,870

(482,767) (482,767) 1,868,249

55,432,980 18,697,728 74,130,708 749,514,119

10,000,000

55,432,980 55,432,980 498,415,799

19,069,624 19,069,624 (9,928,098)

110,871 110,871 (101,791)

Page 33 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

19,180,495 19,180,495 (10,029,889)


STATEMENTS OF CHANGE IN SHAREHOLDERS' EQUITY(CONSOLIDATED) FOR THE YEAR ENDED 31 DECEMBER 2010, 2011 AND 2012 Unit : Baht Equity attributable to owners of the Company Retained earnings Other components of shareholders' equity Fair value changes in

Issued and

Note

(101,792)

(10,029,890)

747,645,869

1,868,250

749,514,119

-

4,308,600 (36,744,500) -

(2,100)

4,308,600 (36,744,500) (2,100)

-

-

(32,435,900)

(2,100)

(32,438,000)

-

-

-

(246,091)

(246,091)

-

-

-

(32,435,900)

(248,191)

(32,684,091)

70,666,382 (8,947,666) 61,718,716 776,928,685

(88,433) (88,433) 1,531,626

70,577,949 (8,947,666) 61,630,283 778,460,311

paid-up share capital

Share premium

Legal reserve

59,484,000

189,775,960

10,000,000

516,000 -

3,792,600 -

-

(36,744,500) -

-

-

516,000

3,792,600

-

(36,744,500)

-

Balance at 1 January 2011 Transactions with owners, recorded directly in shareholders' equity Contributions by and distributions to owners of the Company Issue of ordinary shares Dividends to owners of the Company Dividend to minority of the Company Total contributions by and distributions to owners of the Company Changes in ownership interests in subsidiaries Addition of non-controlling interests from disposal of subsidiary Total transactions with owners, Comprehensive income for the year Profit or loss Other comprehensive income Total comprehensive income for the year Balance at 31 December 2011

differences

components of equity

Total owners of Non-controlling Shareholders' the Company interests equity

-

-

516,000

3,792,600

60,000,000

193,568,560

10,000,000

available-for-sale Unappropriated investments

Currency translation

498,415,799

(36,744,500)

Equity attributable to

(9,928,098)

70,666,382 (9,002,293) 54,627 70,666,382 (9,002,293) 54,627 532,337,681 (18,930,391) (47,165) Page 34 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Total other

(8,947,666) (8,947,666) (18,977,556)

-


STATEMENTS OF CHANGE IN SHAREHOLDERS' EQUITY(CONSOLIDATED) FOR THE YEAR ENDED 31 DECEMBER 2010, 2011 AND 2012 Unit : Baht Equity attributable to owners of the Company Retained earnings Other components of shareholders' equity Fair value changes in

Issued and paid-up

Note Balance at 1 January 2012 Transactions with owners, recorded directly in shareholders' equity Contributions by and distributions to owners of the Company Dividends to owners of the Company Dividend to minority of the Company Total contributions by and distributions to owners of the Company

Comprehensive income for the year Profit or loss Other comprehensive income Total comprehensive income for the year Balance at 31 December 2012

Legal

Total other

available-for-sale

Currency translation

Equity attributable to

components of

owners of

differences

equity

the Company

interests

equity

(18,977,556)

776,928,685

1,531,626

778,460,311

share capital

Share premium

reserve

Unappropriated

investments

60,000,000

193,568,560

10,000,000

532,337,681

(18,930,391)

(47,165)

Total Non-controlling Shareholders'

-

-

-

(42,401,250) -

-

-

-

(42,401,250) -

(2,450)

(42,401,250) (2,450)

-

-

-

(42,401,250)

-

-

-

(42,401,250)

(2,450)

(42,403,700)

-

-

-

94,932,571 94,932,571

6,101,487 6,101,487

11,802 11,802

6,113,289 6,113,289

94,932,571 6,113,289 101,045,860

(19,097) (19,097)

94,913,474 6,113,289 101,026,763

584,869,002

(12,828,904)

(35,363)

(12,864,267)

835,573,295

1,510,079

837,083,374

60,000,000

193,568,560

10,000,000

Page 35


PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012, 2011 AND 2010 Unit : Baht Consolidated Cash Flows from Operating Activities Profit for the year Adjustment for Depreciation Doubtful debts Amortisation of intangible assets (Gain) loss from disposal of property, plant and equipment Loss from disposal of subsidiary company Gain from dissolution of associated company Gain on disposal of current investment and long-term investments (Gain) loss on adjustment of fair value of current investment Provisions for employee benefits Revenue from deffered lease right Dividend income Interest income Interest expenses Equity in undistributed net (profit) loss of assiciated company Unrealized (gain) loss form exchange rate Income tax expense Changes in operating assets and liabilities Trade and other accounts receivable - net Other current assets Other non current assets Trade and other account payable Other current liabilities Employee benefit obligations Cash Provided by (used in) Operating Activities Interest paid Income tax paid Net cash Provided by (used in) Operating Activities

Page 36

2012

2011

2010

94,913,474

70,577,949

54,950,213

5,769,516 43,671 424,093

7,053,307 97,383 452,025

6,913,594 0 264,525

(67,107) 0 0

(532,752) 37,943 (9,030)

(243,119) (367,239) 0

(8,588,485) (5,382,625) 7,859,720 (1,084,483) (2,528,039) (6,810,170) 0 (514,745) 155,242 28,569,245 112,759,307

(12,724,688) (65,733) 7,732,931 (1,084,483) (3,286,380) (6,039,242) 5,617 (1,292,561) (300,373) 33,036,562 93,658,475

(6,943,238) (375,059) 3,120,000 (1,084,483) (3,085,660) (5,855,898) 0 31,172 21,975 19,638,149 66,984,934

(76,951,994) (3,208,326) 46,587 96,825,396 3,907,676 (1,958,060) 131,420,586 0 (28,946,411) 102,474,175

(12,304,556) 6,869,666 45,005 (45,061,908) (4,792,949) (1,058,400) 37,355,333 (5,617) (30,906,212) 6,443,504

(29,054,648) (11,031,559) 284,328 62,807,975 8,067,358 0 98,058,387 0 (18,514,860) 79,543,528


PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2012, 2011 AND 2010 Unit : Baht Consolidated 2012

Cash Flows from Investing Activities Deposits in fixed account Cash received from proceed of current investments Invested in current investments Loaned to employees Cash received from loans Invested in associated company Cash received from disposal of subsidiary company Cash received from dissolution of associated company Invest in long - term investment Cash received from selling and maturity of long-term investment Purchase of property, plant and equipment Sale of property, plant and equipment Purchase of intangible assets Dividend received Interest received Net Cash Provided (Used) by Investing Activities Cash Flows from Financing Activities Increase in share capital during the year Dividend paid to owners of the company Dividend paid to non-controlling interests Net Cash Used in Financing Activities Net increase (decrease) in cash and cash equivalent Cash and cash equivalent at 1 January Effect of exchange rate changes on balances helds in foreign currencies Cash and Cash Equivalent at 31 December Non-cash Transactions Unutilized credit facilities for future working capital

Page 37

2011

2010

0 170,273,331 (252,098,448) (400,000) 940,000 0 0 0 (87,884,942)

(1,000,000) 251,374,256 (243,068,092) (1,150,000) 930,000 (933,943) 896,000 626,514 (55,968,552)

(500,000) 275,147,941 (305,079,398) (1,159,000) 762,000 0 183,500 0 (97,524,021)

92,802,272 (2,037,763) 1,265,102 (38,500) 2,528,039 6,469,862 (68,181,047)

98,357,739 (9,506,387) 552,697 (18,100) 3,286,380 5,898,195 50,276,706

81,112,080 (3,372,993) 356,733 (560,370) 3,085,660 5,769,081 (41,778,787)

0 (42,401,250) (2,450) (42,403,700) (8,110,572.00) 87,403,864

4,308,600 (36,744,500) (248,191) (32,684,091) 24,036,118.99 63,313,118

0 (28,004,500) (185,139) (28,189,639) 9,575,101.56 53,627,145

11,802 79,305,094

54,627 87,403,864

110,871 63,313,118

48,400

48,400

48,400


FINANCIAL RATIOS Liquidity Ratio Unit Current Ratio Quick Ratio Cash Flows Ratio Accounts Receivable Ratio Average Collection Period Account Payable Ratio Average Payment Period Cash Cycle

Unit (Times) (Times) (Times) (Times) (Days) (Times) (Days) (Days)

2012

2011

2010

2.28 2.25 0.35 6.49 55 11 32 23

2.64 2.62 0.02 6.62 54 11 34 20

2.02 2.03 0.29 5.86 61 8 44 17

Profitability Ratio Gross Profit Net Profit Return of Equity

(%) (%) (%)

26.80 4.13 11.75

27.99 3.44 9.25

26.86 3.43 7.63

Efficiency Ratio Return on Assets

(%)

8.41

6.71

5.53

Financial Policy Ratio Debt/Equity Ratio Interest Coverage Ratio Divident Payout Ratio

(Times) (Times) (%)

0.45 none Divident hasn't been declared

0.34 18,447.10 63.68

0.41 none 70.36

Per Share Ratio Book value per share Earning per share Divident per share

(Baht) (Baht) (Baht)

13.95 1.58 Divident hasn't been declared

13.01 1.18 0.75

12.60 0.93 0.65

Growth Rate Assets Liabilities Billing Cost of services Gross Profit Revenue Operating Expenses Net Profit

(%) (%) (%) (%) (%) (%) (%) (%)

15.66 39.23 11.88 13.06 (3.03) 3.61 (4.69) 34.34

(1.27) (13.65) 27.08 29.27 4.82 8.22 10.56 27.48

12.43 29.86 20.37 20.39 22.54 12.14 9.33 50.07

Page 38


3. The explanation and Analysis on Financial Status and Operating results 3.1 Operating results Income Followings are the changes and causes of changes on various items of consolidated income of the company and its subsidiary companies for the year 2012. Billings The year 2012 was Baht 2,296.9 million whereas the year 2011 and the year 2010 were Baht 2,053.0 and 1,615.5 million respectively. Billing in the year 2012 increased from both years because major clients spent more advertising budgets in the year 2012, the loss of a major client of DRAFTFCB in the year 2011, the problem of severe flooding in Bangkok and many provinces in the fouth quarter of the year 2011 and the problem of economic in the year 2010. Income from service the year 2012 was Baht 398.1 million whereas the year 2011 and the year 2010 were Baht 393.1 and 390.8 million respectively. This income for the year 2012 increased from both years because the clients spent more budget in producing advertising materials. Agency fees The year 2012 was Baht 144.3 million whereas the year 2011 and the year 2010 were Baht 129.9 million and Baht 96.9 million respectively. This income for year 2012 increased from both years because the Company could sell advertising media to the general clients in the year 2012 much increased from both years whereas the subsidiary companies could do slightly decreased from both years. Management income The year 2012 was Baht 0.2 million whereas the year 2011 and the year 2010 were Baht 0.2 and 0.1 million respectively. This income for the year 2011 and 2012 increase from the year 2010 was due to the increasing of service rate Interest income The year 2012 was Baht 6.8 million whereas the year 2011 and the year 2010 were Baht 6.1 and 5.9 million respectively. This income for the year 2012 increased from both years was due to the increasing investment on debt securities Dividend income the year 2012 was Baht 2.5 million whereas the year 2011 and the year 2010 were Baht 3.3 and 3.1 million respectively. This income for the year 2012 decreased from both years was due to the selling of partial equity securities. Other income The year 2012 was Baht 20.4 million whereas the year 2011 and the year 2010 were Baht 19.8 and 13.6 million respectively. This income for the year 2012 increased from both years was due to the increasing unrealized profit from adjustment of fair value in trade securities which more than the decreasing amount of profit on sale of securities. Total income The year 2012 was Baht 572.3 million whereas the year 2011 and the year 2010 were Baht 552.4 and 510.4 million respectively. The causes of changes were as afore-mentioned. Page 39


Cost of service and expenses Followings are the changes and causes of changes on various items of consolidated cost and expenses of the company and its subsidiaries for the year 2012 Cost of service The year 2012 was Baht 291.4 million whereas the year 2011 and the year 2010 were Baht 283.1 and 285.9 million respectively. Cost of service in the year 2012 increased from both years because the clients spent more budget in producing advertising materials as before-said. Selling and administrative expenses The year 2012 was Baht 158.0 million whereas the year 2011 and the year 2010 were Baht 165.7 and 149.9 million respectively. The decreasing of this item in the year 2012 was due to the abrogation on paying advertising technical co-operation fee at the rate 0.5% on gross advertising income to a foreign related company by a subsidiary. As well as the ability in controlling expenses. Total cost and expenses The year 2012 was Baht 449.4 million whereas the year 2011 and the year 2010 were Baht 448.8 and 435.8 million respectively. The causes of changes were as aforementioned. Gross profit The year 2012 was Baht 106.7 million whereas the year 2011 and the year 2010 were Baht 110.0 and 104.9 million respectively. The causes of changes were as aforementioned. Profit before equity in undistributed profit (loss) from the associated companies-equity method The year 2012 was baht 122.9 million whereas the year 2011 and the year 2010 were Baht 103.6 and 74.6 million respectively. The causes of changes were as afore-mentioned Profit before tax The year 2012 was Baht 123.5 million whereas the year 2011 and the year 2010 were Baht 103.6 and 74.6 million respectively. The causes of changes were as afore -mentioned. In conclusion, the increasing of profit before tax in the year 2012 resulted from the increasing of tota income which more than the increasing of total cost and expenses. Net profit The year 2012 was Baht 94.9 million whereas the year 2011 and the year 2010 were Baht 70.6 and 55.0 million respectively. The causes of changes were as afore-mentioned. In addition, the rate of income tax has been reduced from 30% to 23% since the year 2012. Net income attributable to equity holders of the parent The year 2012 was Baht 94.9 million whereas the year 2011 and 2010 were Baht 70.7 million and Baht 55.4 million respectively.

Page 40


Comprehensive income The year 2012 was Baht 101.0 million whereas the year 2011 and the year 2010 were Baht 61.6 and 74.1 million respectively. Apart from increasing by net profit, comprehensive income for the year 2012 has also been increased by unrealized profit from adjustment of fair value in securities for sale amounting to Baht 6.1 million whereas it was loss in the year 2011 amounting to Baht 9.0 million and was profit in the year 2010 amounting to Baht 19.1 million. Comprehensive income attributable to equity holders of the parent. The year 2012 was Baht 101.0 million whereas the year 2011 and the year 2010 were Baht 61.7 and 74.6 million respectively. In addition, financial ratios and growth rates in relevant with operating results are summarized as follows : Profitablility ratios These ratios for the year 2012 were better than the years 2011 and 2010. Despite gross profit ratio for the year 2012 would close to the years 2011 and 2010 but net profit ratio and return on equity ratio were higher than both years Efficiency ratio This ratio for the year 2012 was better than the years 2011 and 2010 because return on assets ratio was higher than both years Growth rates The relevant growth rates are as follows : 1. Growth rates of billings, cost of billings, gross profit Growth rate of billings for the year 2012 was lower than the years 2011 and 2010 and also lower than growth rate of cost of billings, therefore, growth rate of gross profit for the year 2012 was also lower than the years 2011 and 2010. 2. Growth rate of total income, operating expenses, net profit Growth rate of total income for the year 2012 was lower than the years 2011 and 2010. However, growth rate of total income for the years 2012 and 2010 except 2011 were higher than growth rate of operating expenses, therefore, growth rate of net profit for the year 2012 and 2010 were higher than the year 2011. Conclusion Although the growth rates of billings and total income for the year 2012 were lower than the years 2011 and 2010, the growth rate of net income for the year 2012 was higher than the year 2011 but lower than the year 2010 So, the profitability of the year 2012 was still favorable. Moreover, profiability ratios as well as efficiency ratios for the year 2012 were higher than the years 2011 and 2010, therefore, operating results for the year 2012 was better than both years.

Page 41


3.2 Financial Status Assets

Baht : million Dec31,2012 Dec31,2011 Dec31,2010

Current assets 774.38 633.70 600.71 Non-current assets 436.26 413.05 459.51 Total 1,210.64 1,046.75 1,060.22 1. Total assets of the company and its subsidiary companies as at December 31, 20112 were Baht 1,210.64 million whereas total assets of the company and its subsidiary companies as at December 31, 2011 and December 31, 2010 were Baht 1,046.75 million and Baht 1,060.22 million respectively. 2. The Changes of assets in the year 2012 from the year 2011 were as follows : Baht : million Cash and cash equivalent decreased (8.10) Investments in personal fund increased 0.83 Fixed deposit increased 1.50 Other current investment increased 88.19 Current portion of held-to-maturity debt security decreased (19.50) Various trade and other accounts receivable increased 77.11 Other current assets increased 3.15 Bank deposit as collateral decreased (2.50) Investment in associated and subsidiary companies increased 0.52 Other long-term investment increased 28.46 Loan to employees decreased (0.41) Property plant and equipment decreased (4.93) Intangible assets decreased (0.38) Other non-current assets decreased (0.05) Total increased 163.89

Page 42


The above changes were sommarized as follows : 1. Cash and cash equivalent decreased Baht 8.10 million. It provided from operating activities Baht 102.47 million, used in investing activities Baht 68.18 million, used in financing activities Bath 42.40 million and provided from gain from currency translation of foreign subsidiaries financial statements Baht 0.01 million. 2. The company and its subsidiary companies changed the invesment from debt security held-to-maturity in one year to temporary investment, long-term investment, other current assets and various accounts receivable. 3. Other assets have been changed slightly. In addition, the quality of the significant assets are summarized as follows : 1. Most of clients settle on time. There average collection period in the year 2012 was 55 days which close to the year 2011 but faster than the year 2010. However, the allowance for doubtful accounts as at December 31, 2012 was Baht 18.1 million for the fully unpaid receivable and outstanding over one year. 2. Short-term and long-term investment consist of investment in personal fund and investment in dept and equity securities. Total fair value of them as at December 31, 2012 changed from the end of last year. As at December 31, 2012 there was unrealized loss from adjustment of fair value in securities amounting to Baht 12.8 million whereas the end of the year 2011 was Baht 18.9 million. 3. The recoverable amount of PPE (property, plant and equipment) as at December 31, 2012 was greater than carrying amount, therefore, there was no impairment of assets. Liabilities

Baht : million Dec31,2012 Dec31,2011 Dec31,2010

Current Liabilities Non-current liabilities Total

339.04 34.52 373.56

238.59 29.7 268.29

287.32 23.39 310.71

1. Total liabilities of the company and its subsidiary companies as at December31, 2012 were Baht 373.56 million whereas total liabilities of the company and its subsidiary companies as at December 31, 2011 and December 31,2010 were Baht 268.30 million and Baht 310.71 million respectively. Page 43


2. The changes of liabilities in the year 2012 from the year 2011 were as follows : Baht : million Various trade and other accounts payable increased 96.83 Accrued income tax decreased (0.29) Other current liabilities increased 3.91 Employee benefit obligations increased 5.90 Deferred lease right decreased (1.08) Total increased 105.27 The above changes were summarized as follows : 1. Various trade and other accounts payable increased because total cost and expenses increased. 2. Accrued income tax decreased because income tax rate decresed from 30% to 23%. 3. Other current liabilities increased because value added tax increased . 4. Employee benefit obligations increased because there was adjustment on the calculation according to actuarial basis. 5. Deferred lease right decreased because it was transferred to income every year. Shareholders' equity Baht : million Dec31,2012 Dec31,2011 Dec31,2010

Shareholders' equity

837.08

778.46

749.51

1. Shareholders' equity of the company and its subsidiary companies as at December 31, 2012 were Baht 837.08 million whereas shareholders' equity of the company and its subsidiary companies as at December 31, 2011 and December 31, 2010 were Baht 778.46 million and Baht 749.51 million respectively. 2 The changes of shareholders' equity in the year 2012 from the year 2011 were as follows : Baht : million Total comprehensive income for the year 101.02 Dividend paid for the year (42.40) Total increased 58.62 Page 44


In addition, financial ratios including per share ratios and growth rates which relevant with financial status are summarized as follows : Financial policy ratios These ratios for the year 2012 closed to the years 2011 and 2010 because debt-to-equity ratio for the year 2012 closed to both years. However, the financial risks for all 3 years were slighly because total debt was so little when compare with shareholders' equity, moreover, there was no short-term or long-term loans, therefore, there was no interest obligation while the policy on dividend payout was rather conservative i.e. 60%-70% of net profit Per share ratios These ratios for the year 2012 were better than the years 2011 and 2010 because book value per share and earning per share for the year 2012 were higher than both years. Therefore, the financial status of the companies was getting better continuously Growth rates Growth rate of total assets for the year 2012 was higher than the years 2011 and 2010 but lower than growth rate of total liabilities. However, growth rate of shareholders' equity for the year 2012 was higher than the years 2011 and 2010 because the amount of total assets more than total liabilities many times. Conclusion Although financial policy ratios for the year 2012 closed to the years 2011 and 2010 but per share ratios and growth rate of shareholders' equity was higher than both years. So, the financial status for the year 2012 was better than the years 2011 and 2010. However, the financial status of all 3 years were sound because total liabilities were much less than shareholders equity as well as there weren't any loan and interest obligation. 3.3 Liquidity The liquidity for the year 2012 closed to the year 2011 and 2010 because the liquidity ratio i.e. current ratio, quick ratio, cash flows ratio, accounts receivable turnover rario, average collection period, accounts payable turnover ratio, average payment period and cash cycle for the year 2012 closed to both years. Moreover, the liquidity of all 3 years were favorable because the amount of current assets and quick current assets larges than current liabilities more than 2 times which enough to settle the whole current liabilities, especially, there was cash flow provided from operating activities about 35% of current liabilities resulted in the more safety on settlement.

Page 45


3.4 Auditor Remuneration In 2012, the company and its subsidiary companies paid remuneration to Bunchikij Co.,Ltd. as follows : 1. Audit fee 874,000.00 Baht 2. Non audit fee none 12. Other related information None

Page 46


Detail of Director and Executive Management 1. Detail of Director and Executive Management

Name-Position 1. Mr.Prakit Apisarnthanarax Executive President and Authorized Director

Qualification Age in Education

Working experience in 5 years Company's Period Position Name 74 BA in Economic 9.00% Father of 1986-present President Prakit Holdings Plc. Thammasart voting right Mr.Apirak Prakit & Associate Co.,Ltd. University common Apisarnthanarak stock Authorized DRAFTFCB Directors (Thailand) Co.,Ltd. Company Family share portion relationship of % directors

Director

2. Phisal Prahasdangkura Executive Vice President and Authorized Director

68 B.A. in Mass Communication Miami Colledge USA

0.10% of voting right common stock

No

Page 47

Golden Sound Studio Publicis (Thailand) Limited Impact Video Production Limited Direct response (Thailand) Co.,Ltd.

1978-1986 President

Prakit & Associate Co.,Ltd.

1974-1978 Controller and Media Director

Diethelm Advertising Co.,Ltd.

1964-1974 Media Director

Diethelm Co., Ltd.

1986-present Vice President Director

Prakit Holdings Plc. DRAFTFCB (Thailand) Co.,Ltd.

1977-1986 Vice President

Prakit & Associates Co.,Ltd.

1974-1977 Product Manager

Warner-Lambert (Thailand) Co.,Ltd.

1972-1974 Product Manager

Bristol Myers (Thailand) Co.,Ltd.


Name-Position

Qualification Age in Education

Company Family share portion relationship of % directors

3. Mr. Preecha Chaochotechuang 65 B.A. in Business 0.26% of Director and Authorized Ohio Colledge voting right Director USA common Marketing stock Management Certificate Lausanne Switzerland

No

4. Mr. Vichien Nakintanond Director

No

5.Mr.Nicolas Joseph Camera Director

64 High School Vatrangbua School

66 MBA Form Fordham University

6. Mr. Sommanous Na Bangchang 64 MBA Audit Committee and Southeastern Independent Director Oklahoma State University

-

Period Present 1986-2007

1980-1984 1975-1980 1970-1975

-

No

-

No

Working experience in 5 years Company's Position Name Director Prakit Holdings Plc. Managing Director Prakit Holdings Plc. Director Direct response (Thailand) Co.,Ltd. Deputy Managing Lintas Co.,Ltd. Director Marketing Director Fedderst Co.,Ltd. Marketing Trainer Diethelm Co., Ltd.

Present Director 1986-2001 Deputy Managing Director 1978-1986 Deputy Managing Director 1968-1978 Artist 1965-1968 Artist

2000Present

Senior VP, General Counsel and Secretary

1999-Present Independent Director Audit Committee 1999-2002 Consultant of Finance 1988-1999 Finance Director 1978-1988 Executive Manager 1975-1978 Internal Audit 1973-1974 Internal Audit

Page 48

Prakit Holdings Plc. Prakit Holdings Plc. Prakit & Associates Co.,Ltd. Diethelm Co., Ltd. Loxley (Thaildand) Co.,Ltd. The Interpublic Group of Companies Inc.

Prakit Holdings Plc. Thoranee Pipat Co.,Ltd. Prakit Holdings Plc. Diethelm Advertising Co.,Ltd. IFCT TOT


Name-Position

Qualification Age in Education

Company Family share portion relationship of % directors

7. MR. Thanadsri Svati Independent Director

86 B.A. in Mass Communication Thammasart University

-

No

8. Mr.Jonathan Mark Allard Director

39 Bachelor Degree from Loughborongh University of Technology

-

No

9. Dr. Pichai Charnsupharindr Audit Committee and Independent Director

70 B.A. in Economic 0.12% of Thammasart voting right University common Master Degree stock University of the Philippines Ph.D. in Economics University of the Philippines

Working experience in 5 years Company's Period Position Name 1999-Present Independent Director Prakit Holdings Plc. Audit Committee President Krobjakrawan Co.,Ltd. 1996-2002 President Thoranee Pipat Co.,Ltd. 1992-Present Consultant Thai Airways International Airports Authority of Thailand 1990-1992 Director Aeronautical Radio 1993-Present Director of Thailand Ltd. Impact Video Production Limited 2011-Present Regional Chief Finance Officer 2009-2011 Finance Director 2005-2009 Finance Director

No

Present

Independent Director Prakit Holdings Plc. Director Thammasart Association Thammasart University Consultant The Feceration of Saving of Thailand Limited Consultant The Saving Cooperative of Thammasart University

1965-2003 A Dean of Faculty Vice Rector

President

Director and Secretary

Page 49

Asia Pacific DRAFTFCB Co.,Ltd. Aegis Media Asia Pacific Management Pte. Draftfcb (Hong Kong)

Faculty of Economics Thammasart University Planning and Development Department Thammasart University The Saving Cooperative of Thammasart University The Professor Council of Thammasart University Anandamahidol Foundation


Name-Position 10. Dr. Manoon Pahirah Independent Director and Audit Committee

11. Ms. Wichuda Grairithikul Finance Director Company Secretary and Audit Committee Secretary

12. Mrs.Siriorn Chernpipat

Executive Media Director

13. Mrs. Charuwan Kulyanamitr Human Resources Director

Qualification Age in Education 74 Bachelor Degree of Economic Thammasart University Master Degree (ECON) University of the Philippines Ph.D. (ECON) University of Hawaii

Company Family share portion relationship of % directors

-

58 B.A. in Business Ramkhamhaeng University

Present

2004-Present Rector Advisor

54 B.A.in Accounting 0.03% of Thammasart voting right University common Master degree stock in Accounting Thammasart University

49 B.A. in Mass Communication Thammasart University

No

Period

Working experience in 5 years Company's Position Name Independent Director Prakit Holdings Plc. Audit Committee Vice President of Office of the National Sub-Committee Counter Corruption Commission

-

-

No

No

No

Page 50

Krirk University

2001-2004 Rector

Krirk University

1999-2001 Dean of Pundit Institute

Thammasart University

1999-Present Finance Director

Prakit Holdings Plc.

1996-1999 Deputy of Finance Director

Prakit Holdings Plc.

1994-1996 Finance Manager

Magnus Nangervis & Curl/FCB Ltd.

1988-1994 Finance Manager

GSI Travel Co.,Ltd.

1981-1987 Assistant Accounting White Group Plc. Manager 1993-Present Executive Media Prakit Holdings Plc. Director 1990-1993 Media Manager

Prakit & FCB Co.,Ltd.

1987-1990 Media Planner

Prakit & FCB Co.,Ltd.

1993-Present Human Resources Director

Prakit Holdings Plc.

1980-1993 Human Resources Manager

Pan Asia Co.,Ltd.


Name-Position 14. Mr.Anucha Viriyachai Managing Director and Authorized Director

Qualification Age in Education 58 Bachelor Degree of Economic Thammasart University MBA Ohio University

Company Family share portion relationship of % directors

-

No

Period Present

2001-2008 1999-2000

1995-1999

1992-1995

15.Mr.Apirak Apisarnthanarak

Director and Authorized Director

Working experience in 5 years Company's Position Name Managing Director Prakit Holdings Plc. Director Marketing Drive Worldwide (Thailand) Ltd. Chief Executive Draftfcb (Thailand) Ltd. Officer General Manager Draftfcb (Thailand) Ltd. Client Service Sr.Vice President- Berli Jucker Plc. Consumer Products Division Sr.Vice President- Berli Jucker Plc. Personal Care and Toiletries Division (PCTD) Vice President Berli Jucker Plc. Personal Care Products Division

41 BBA in Marketing 1.85% of President's Present Director and Management voting right son Director of Information common System stock Managing Director MBA at 2001-2007 Strategic Planning The University of Director/Business North Carolina Director Chapel Hill 1999-2001 Strategic Planning Analyst, 1997-1997 Marketing Associate

Page 51

Prakit Holdings Plc. Marketing Drive Worldwide (Thailand) Ltd. Draftfcb (Thailand) Ltd. Draftfcb (Thailand) Ltd.

FCB Worldwide (New York)

Colgate-Plamolive (Thailand) Ltd.


Report of number of share held by Directors and executives as at December 31, 2012 Name

2011

Increase/

2012

Director

Spouse

Decrease

Total

%

2012 Director

Spouse

1. Mr.Prakit

Apisarnthanarax

4,899,900

500,000

-

5,399,900

9.00

4,899,900

500,000

2. Mr.Phisal

Prahasdadangkura

3,000

55,000

-

58,000

0.10

3,000

55,000

3. Mr.Preecha

Chaochotechuang

43,000

112,000

-

155,000

0.19

43,000

112,000

4. Mr. Vichien

Nakintanond

-

-

-

-

-

-

-

5. Mr.Nicolas

Joseph Camera

-

-

-

-

-

-

-

6. Mr.Sommanous Na Bangchang

-

-

-

-

-

-

-

7. MR.Thanadsri Svati

-

-

-

-

-

-

-

69,800

-

-

69,800

0.12

69,800

-

-

-

-

-

-

-

-

10,000

-

(10,000)

-

-

-

-

1,051,093

-

58,900

1,109,993

1.85

1,109,993

-

12. Mr.Jonathan Mark Allard

-

-

-

-

-

-

-

13. Ms.Wichuda Grairithikul

20,000

-

-

20,000

0.03

20,000

-

Chernpipat

-

-

-

-

-

-

-

15. Ms.Charuwan Kulyanamitr

-

-

-

-

-

-

-

8. Dr.Pichai

Charnsupharindr

9. Dr.Manoon

Pahirah

10. Mr.Anucha

Viriyachai

11. Mr.Apirak

Apisarnthanarak

14. Mrs.Siriorn

หน้ า 52


Details of Subsidiaries Director Name of Director Mr. Prakit Mr. Phisal Mr. Pheecha Mr. Sommanous MR.Thanadsri Dr. Pichai Mr.Nicolas Ms. Wichuda Mr. Anucha Mr. Apirak Mr.Jonathan Mr. Vichien Mrs. Charuwan Mrs. Siriorn Dr. Manoon

Apisarnthanarax Prahasdangkura Chaochotechuang Na Bangchang Svati Charnsupharindr Joseph Camera Grairithikul Viriyachai Apisarnthanarak Mark Allard Nakintanond Kulyanamitr Chernpipat Pahirah

PRAKIT HOLDINGS PLC

Subsidiary Company PRAKIT/FCB (CAMBODIA)

B, A, C B, C C F, G G F,G C B B,D B,C C C B B F, G

A, C

Others Company

Related Companies

DRAFTFCB MARKETING DRIVE (Thailand)

WORLDWIDE

A, C C

C C

DIRECT RESPONSE

A, C C C

GOLDEN SOUND IMPACT VEDIO STUDIO PRODUCTION

A, C C

A, C

PRAKIT & ASSOCIATE

62 Graphic & Retouch

A, D, C

C

B B,C,H B,C,D

B, C B,C B,C

E B

A = President

B = Executive Board

C = Director

E = General Manager

F = Audit Committee

G = Independent Director

H = Chief Executive Officer

D=Managing Director

Page 53

B, C


PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR’S REPORT 1 JANUARY 2012 TO 31 DECEMBER 2012


Independent Auditor’s Report To the Shareholders of Prakit Holdings Public Company Limited

I have audited the accompanying consolidated and separate financial statements of Prakit Holdings Public Company Limited and its subsidiaries, and of Prakit Holdings Public Company Limited, respectively, which comprise the consolidated and separate statements of financial position as at 31 December 2012, the consolidated and separate statements of comprehensive income, changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the Consolidated and Separate Financial Statements Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these consolidated and separate financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement. / An audtit involves performing


2

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial position as at 31 December 2012 and the financial performance and cash flows for the year then ended of Prakit Holdings Public Company Limited and its subsidiaries, and of Prakit Holdings Public Company Limited, respectively, in accordance with Thai Financial Reporting Standards.

Other Matter The financial statements of Prakit Holdings Public Company Limited and its subsidiaries, and of Prakit Holdings Public Company Limited for the year ended 31 December 2011, were audited by another auditor who expressed an unmodified opinion on those statements on 28 February 2012 with emphasis of matter in relation to the adoption of the revised and new accounting standards issued by the Federation of Accounting Professions during the year 2011.

(Mr. Pornchai Kittipanya-ngam) Certified Public Accountant Registration No. 2778 Bunchikij Co., Ltd. Bangkok 26 February 2013


1 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Financial Position As at 31 December 2012 Unit : Baht

Separate financial

statements

statements

2012

2011

2012

2011

5

79,305,094

87,403,864

55,912,775

42,401,904

6

25,277,720

24,444,757

25,277,720

24,444,757

500,000

1,500,000

500,000

1,500,000

7

240,208,629

152,024,171

145,946,115

60,449,018

7

5,000,000

24,500,000

5,000,000

24,500,000

412,227,122

335,116,621

228,106,261

224,009,628

Other current assets

11,864,535

8,713,588

5,623,678

4,688,531

Total current assets

774,383,100

633,703,001

466,366,549

381,993,838

30,000,000

32,500,000

30,000,000

30,000,000

ASSETS

Note

Consolidated financial

CURRENT ASSETS Cash and cash equivalents Current investments Personal fund Fixed deposit Others Investments in securities Current portion of held-to-maturity debt securities Trade accounts and other receivable - net

4.2 , 8

NON-CURRENT ASSETS Bank deposit held as collateral

9

Investments in associated and subsidiary companies

10

1,807,305

1,292,561

13,926,406

13,926,406

Other long-term investments

7

170,411,528

139,448,565

165,911,528

139,448,565

Loan to employees

11

455,000

865,000

275,000

630,000

Investment property

12

136,215,000

136,215,000

136,215,000

136,215,000

Property, plant and equipment

13

96,649,280

101,579,028

95,433,591

99,067,243

Intangible assets -net

224,308

609,901

71,261

195,760

Other non-current assets

496,924

543,510

436,259,345

413,053,565

441,832,786

419,482,974

1,210,642,445

1,046,756,566

908,199,335

801,476,812

Total non-current assets

TOTAL ASSETS

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

-

-


2 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Financial Position (Continued) As at 31 December 2012 Unit : Baht

LIABILITIES AND SHAREHOLDERS' EQUITY

Note

Consolidated

Separate

financial statements

financial statements

2012

2011

2012

2011

CURRENT LIABILITIES Trade accounts and other payable

14

301,962,226

205,136,830

146,776,026

97,276,913

6,313,594

6,601,027

6,037,565

5,528,206

Accrued income tax Other current liabilities Total current liabilities

30,767,909

26,860,233

15,627,403

15,776,757

339,043,729

238,598,090

168,440,994

118,581,876

NON-CURRENT LIABILITIES Deferred Leasehold right

15

18,819,150

19,903,634

18,819,150

19,903,634

Employee benefit obligations

16

15,696,192

9,794,531

6,135,255

3,410,914

34,515,342

29,698,165

24,954,405

23,314,548

373,559,071

268,296,255

193,395,399

141,896,424

99,484,000

99,484,000

99,484,000

99,484,000

Total non-current liabilities TOTAL LIABILITIES

SHAREHOLDERS' EQUITY Share capital Authorized share capital 99,484,000 common shares of Baht 1 each Issued and fully paid - up capital 60,000,000 common shares of Baht 1 each Premium on share capital

17

60,000,000

60,000,000

60,000,000

60,000,000

18

193,568,560

193,568,560

193,568,560

193,568,560

Retained earnings Appropriated Legal reserve

18

Unappropriated Other components of equity

10,000,000

10,000,000

10,000,000

10,000,000

584,869,002

532,337,681

464,064,280

414,942,219

(12,864,267)

(18,977,556)

(12,828,904)

(18,930,391)

835,573,295

776,928,685

714,803,936

659,580,388

1,510,079

1,531,626

837,083,374

778,460,311

714,803,936

659,580,388

1,210,642,445

1,046,756,566

908,199,335

801,476,812

Total shareholders's equity attributable to the owner of the company Non-controlling interests Total shareholders' equity TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

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

-

-


3 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Comprehensive Income

For the year ended 31 December 2012 Unit : Baht

Note

Consolidated financial

Separate financial

statements

statements

2012

2011

2012

2011

REVENUES Revenue from rendering services

19

Revenue from agency

398,128,774

393,111,165

39,741,789

38,610,811

144,260,950

129,917,568

87,038,281

63,544,606

6,810,203

6,039,280

6,094,741

5,539,012

2,528,039

3,286,380

37,525,589

33,284,280

216,000

216,000

35,165,514

35,142,281

Interest income Dividend income Management income

4.1

Other revenues

4.1

20,423,563

19,829,209

17,061,841

17,274,215

572,367,529

552,399,602

222,627,755

193,395,205

291,425,160

283,073,978

36,550,535

34,785,753

Selling expenses

66,973,449

71,359,722

27,132,908

22,422,532

Administrative expenses

91,000,946

94,384,630

51,193,016

51,625,702

Total revenues EXPENSES Cost of rendering of services

Finance cost

-

Total expenses

5,617

-

-

449,399,555

448,823,947

114,876,459

108,833,987

122,967,974

103,575,655

107,751,296

84,561,218

514,745

38,856

123,482,719

103,614,511

107,751,296

84,561,218

(28,569,245)

(33,036,562)

(16,227,985)

(17,346,705)

94,913,474

70,577,949

91,523,311

67,214,513

11,802

54,627

Profit before share of profit from investment in associated Share of profit (loss) from investment in associated - equity method Profit before income tax expenses Income tax expenses

22

Net profit for the year

-

-

Other comprehensive income (loss): Foreign currency translation differences for foreign operation Net change in fair value of available for sale investment

6,101,487

(9,002,293)

-

-

6,101,487

(9,002,293)

Other comprehensive income (loss) for the year, net of income tax

6,113,289

Total comprehensive income for the year

(8,947,666)

6,101,487

(9,002,293)

101,026,763

61,630,283

97,624,798

58,212,220

94,932,571

70,666,382

91,523,311

67,214,513

Profit (loss) attributable to: Owners of the Company

(19,097)

Non-controlling interests Net profit for the year

(88,433)

-

-

94,913,474

70,577,949

91,523,311

67,214,513

101,045,860

61,718,716

97,624,798

58,212,220

Total comprehensive income (loss) attributatble to: Owners of the Company Non-controlling interests

(19,097)

Total comprehensive income for the year

(88,433)

-

-

101,026,763

61,630,283

97,624,798

58,212,220

1.58

1.18

1.53

1.12

Earnings per share (Unit :Baht) Basic earnings per share

23

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


4 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Change in Shareholders' Equity (Consolidated financial statements) For the year ended 31 December 2012

Unit : Baht Equity attributable to owners of the Company

Retained earnings

Other components of shareholders' equity Fair value

paid-up Note Balance at 1 January 2011

Currency

Total other

attributable to

available-for-sale

translation

components of

owners of

Non-controlling

Unappropriated

investments

differences

equity

the Company

interests

498,415,799

(9,928,098)

Legal

share capital

Share premium

59,484,000

189,775,960

516,000

3,792,600

reserve 10,000,000

Equity

changes in

Issued and

(101,792)

(10,029,890)

747,645,869

Total

1,868,250

Shareholders'

equity 749,514,119

Transactions with owners, recorded directly in shareholders' equity Contributions by and distributions to owners of the Company Issue of ordinary shares

17

Dividends to owners of the Company

24

Dividend to minority of the Company

-

-

-

-

-

-

-

(36,744,500) -

-

-

-

4,308,600

-

-

-

(36,744,500)

-

-

-

-

-

-

-

-

-

-

-

4,308,600

-

(36,744,500)

(2,100)

(2,100)

(2,100)

(32,438,000)

(246,091)

(246,091)

Total contributions by and distributions to owners of the Company

516,000

3,792,600

-

(36,744,500)

(32,435,900)

Changes in ownership interests in subsidiaries Addition of non-controlling interests from disposal of subsidiary

-

-

-

-

-

Total transactions with owners, recorded directly in equity

516,000

3,792,600

-

(36,744,500)

-

-

-

(32,435,900)

(248,191)

(32,684,091)

-

70,666,382

-

-

-

70,666,382

(88,433)

70,577,949

Comprehensive income for the year Profit or loss Other comprehensive income Total comprehensive income for the year Balance at 31 December 2011

-

-

-

-

-

-

-

-

60,000,000

193,568,560

10,000,000

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

(9,002,293)

54,627

(8,947,666)

(8,947,666)

70,666,382

-

(9,002,293)

54,627

(8,947,666)

61,718,716

(88,433)

-

(8,947,666) 61,630,283

532,337,681

(18,930,391)

(47,165)

(18,977,556)

776,928,685

1,531,626

778,460,311


5 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Change in Shareholders' Equity (Consolidated financial statements ) (Continued) For the year ended 31 December 2012

Unit : Baht Equity attributable to owners of the Company

Retained earnings

Other components of shareholders' equity Fair value

Issued and paid-up Note Balance at 1 January 2012

Share premium

60,000,000

193,568,560

reserve 10,000,000

Currency

Total other

attributable to

Total

available-for-sale

translation

components of

owners of

Non-controlling

Unappropriated

investments

differences

equity

the Company

interests

532,337,681

(18,930,391)

Legal

share capital

Equity

changes in

(47,165)

(18,977,556)

776,928,685

1,531,626

Shareholders'

equity 778,460,311

Transactions with owners, recorded directly in shareholders' equity Contributions by and distributions to owners of the Company -

-

-

-

-

-

-

-

-

(42,401,250)

Profit or loss

-

-

-

94,932,571

Other comprehensive income

-

-

-

Total comprehensive income for the year

-

-

-

Dividends to owners of the Company Dividend to minority of the Company

24

(42,401,250) -

-

-

-

-

-

-

(42,401,250)

-

-

-

(42,401,250)

-

94,932,571

-

-

(42,401,250)

(2,450)

(2,450)

(2,450)

(42,403,700)

(19,097)

94,913,474

Total contributions by and distributions to owners of the Company

Comprehensive income for the year

Balance at 31 December 2012

60,000,000

193,568,560

10,000,000

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

-

-

-

6,101,487

11,802

6,113,289

6,113,289

94,932,571

6,101,487

11,802

6,113,289

101,045,860

(19,097)

101,026,763

584,869,002

(12,828,904)

(12,864,267)

835,573,295

1,510,079

837,083,374

(35,363)

-

6,113,289


6 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Change in Shareholders' Equity (Separate financial statements) For the year ended 31 December 2012

Unit : Baht Other components of equity Fair value Retained earnings

Issued and paid-up Note Balance at 1 January 2011

share capital

Share premium

59,484,000

189,775,960

516,000

3,792,600

Legal reserve 10,000,000

Unappropriated 384,472,206

changes in

Total

available-for-sale

Shareholders'

investments

equity

(9,928,098)

633,804,068

Transactions with owners, recorded directly in shareholders' equity Contributions by and distributions to owners of the Company Issue of ordinary shares

17

Dividend

24

-

-

-

-

-

4,308,600

-

(36,744,500)

-

(36,744,500)

-

(36,744,500)

-

(32,435,900)

67,214,513

-

67,214,513

Total contributions by and distributions to owners of the Company

516,000

3,792,600

Comprehensive income for the year Profit or loss

-

-

-

Other comprehensive income

-

-

-

-

-

-

Total comprehensive income for the year Balance at 31 December 2011

60,000,000

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

193,568,560

10,000,000

-

(9,002,293)

(9,002,293)

67,214,513

(9,002,293)

58,212,220

414,942,219

(18,930,391)

659,580,388


7 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Change in Shareholders' Equity (Separate financial statements) (Continued) For the year ended 31 December 2012

Unit : Baht Other components of equity Fair value Retained earnings

Issued and paid-up Note

share capital 60,000,000

Balance at 1 January 2012

Share premium 193,568,560

Legal reserve 10,000,000

Unappropriated 414,942,219

changes in

Total

available-for-sale

Shareholders'

investments

equity

(18,930,391)

659,580,388

Transactions with owners, recorded directly in shareholders' equity Contributions by and distributions to owners of the Company -

-

-

(42,401,250)

-

(42,401,250)

-

-

-

(42,401,250)

-

(42,401,250)

Profit or loss

-

-

-

91,523,311

-

91,523,311

Other comprehensive income

-

-

-

-

-

-

Dividend

24

Total contributions by and distributions to owners of the Company Comprehensive income for the year

Total comprehensive income for the year Balance at 31 December 2012

60,000,000

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

193,568,560

10,000,000

-

6,101,487

6,101,487

91,523,311

6,101,487

97,624,798

464,064,280

(12,828,904)

714,803,936


8

PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Cash Flows For the year ended 31 December 2012 Unit : Baht

Note

Consolidated financial

Separate financial

statements

statements

2012

2011

2012

2011

Cash flows from operating activities Profit for the year

94,913,474

70,577,949

91,523,311

67,214,513

5,769,516

7,053,307

4,898,003

5,291,028

Adjustment for Depreciation Doubtful debts

Amortisation of intangible assets

13

43,671

97,383

-

-

424,093

452,025

162,999

174,264

(67,107)

(532,752)

93,987

(128,741)

(Gain) loss from disposal of property, plant and equipment Loss from disposal of subsidiary company

-

37,943

-

263,552

Gain from dissolution of associated company

-

(9,030)

-

(166,514)

Gain on disposal of current investment and long-tern investments

(8,588,485)

(12,724,688)

(8,940,532)

(13,377,146)

(65,733)

(Gain) loss on adjustment of (3,343,217)

1,537,679

Provisions for employee benefits

fair value of current investment

(5,382,625) 7,859,720

7,732,931

2,724,340

3,860,914

Revenue from deferred lease right

(1,084,483)

(1,084,483)

(1,084,483)

(1,084,483)

Dividend income

(2,528,039)

(3,286,380)

(37,525,589)

(33,284,280)

Interest income

(6,810,170)

(6,039,242)

(6,094,741)

(5,539,012)

Interest expense

-

5,617

-

-

(1,292,561)

-

-

(300,373)

-

-

Equity in undistributed net (profit) loss of associated companies Unrealized (gain) loss from exchange rate Income tax expense

(514,745) 155,242 28,569,245

33,036,562

16,227,985

17,346,705

112,759,307

93,658,475

58,642,063

42,108,479

(76,951,994)

(12,304,556)

(3,785,468)

(37,925,084)

(3,208,326)

6,863,121

Changes in operating assets and liabilities Trade accounts and other receivable Other current assets Other non current assets Trade accounts and other payable Other current liabilities Employee benefit obligations Cash provided by (used in) operating activities

46,587 96,825,396

(45,061,908)

3,907,676

(4,792,949)

(1,958,060)

(1,058,400)

131,420,586

Interest paid

-

(960,146)

45,005

37,348,788 (5,617)

49,499,113 (149,353) -

1,545,891 (17,271,411) 2,578,233 (450,000)

103,246,209 -

(9,413,892) -

Income tax paid

(28,946,411)

(30,906,212)

(15,718,627)

(13,512,232)

Net Cash provided by (used in) operating activities

102,474,175

6,436,959

87,527,582

(22,926,124)

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


9

PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statements of Cash Flows (Continued) For the year ended 31 December 2012 Unit : Baht

Note

Consolidated financial

Separate financial

statements

statements

2012

Cash flows from investing activities Deposit in fixed account

2011 -

(1,000,000)

2012

2011 -

(1,000,000)

Cash received from proceed of current investments

7

170,273,331

251,374,256

42,595,859

131,374,256

Invest in current investments

7

(252,098,448)

(243,068,092)

(123,420,977)

(133,068,092)

Loans to employees

11

(400,000)

(1,150,000)

(200,000)

(950,000)

Cash received form loans

11

940,000

580,000

415,000

Invest in associated company

-

(933,943)

-

-

Cash received from disposal of subsidiary company

-

896,000

-

896,000

Cash received from dissolution of associated company

-

626,513

-

626,514

Invest in long - term investments

930,000

7

(87,884,942)

(55,968,552)

(85,884,942)

(55,968,552)

7

92,802,272

98,357,739

92,802,272

98,357,739

(2,037,763)

(9,506,387)

(1,399,351)

(8,130,507)

Cash received from selling and maturity of long-term investments Purchase of property, plant and equipment Sale of property, plant and equipment

1,265,102

Purchase of intangible asset

(38,500)

Dividend received

2,528,039

Interest received Net cash provided by (used in) investing activities

552,697

41,013

(18,100)

(38,500)

3,286,380

37,525,589

128,743 33,284,280

6,469,862

5,898,195

5,783,576

5,402,639

(68,181,047)

50,276,706

(31,615,461)

71,368,020

-

4,308,600

-

4,308,600

Cash flows from financing activities Increase in share capital during the year

18

Dividend paid to owners of the Company

24

(42,401,250)

(36,744,500)

(2,450)

(248,191)

(42,403,700)

(32,684,091)

Dividends paid to non-controlling interests Net cash used in financing activities

(42,401,250) (42,401,250)

(36,744,500) (32,435,900)

Net increase (decrease) in cash and cash equivalent

(8,110,572)

24,029,574

13,510,871

16,005,996

Cash and cash equivalent at 1 January

87,403,864

63,319,663

42,401,904

26,395,908

11,802

54,627

-

-

79,305,094

87,403,864

55,912,775

42,401,904

48,000,000

48,000,000

1,000,000

1,000,000

Effect of exchange rate changes on balances held in foreign currencies Cash and cash equivalent at 31 December

5

Non-cash transactions Unutilized credit facilities for future working capital

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


10 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) For the year ended 31 December 2012 1.

General information Prakit Holdings Public Company Limited, the “Company”, is incorporated in Thailand and has its registered office at 88 Soi Sukhumvit 62 3rd intersection, Sukhumvit Road, Bangjak, Prakanong, Bangkok, Thailand. The Company was registered with the Stock Exchange of Thailand on 30 July 1991. The major shareholders for the year were Prakit and Associated Co., Ltd (held 24.68%) which is incorporated in Thailand and FCB International Inc. (held 24.67%) which is incorporated in USA. The principal business of the Company and its subsidiaries (the “Group”) are engaged in advertising production, media agency, investing business and providing the management service to subsidiary and associated companies. Details of the Company’s subsidiaries as at 31 December 2012 and 2011 were as follows: % of shareholdings Type of business

Countries Operating

2012

2011

Advertising

Thai

99.99

99.99

Advertising

Thai

99.97

99.97

Prakit & FCB (Myanmar) Limited*

Advertising

Myanmar

90.00

90.00

Prakit & FCB (Cambodia) Co., Ltd.**

Advertising

Cambodia

80.00

80.00

Name Direct subsidiaries DRAFTFCB (Thailand) Limited Marketing Drive Worldwide (Thailand) Limited

*The Company did not include the financial statement of Prakit & FCB (Myanmar) Limited for each of the years ended 31 December 2012 and 2011 in the consolidated financial statements because in the fourth quarter of 2007 there was a political crisis. The Company has lost contact with the subsidiary and it was not able to control the operation. Additionally, the competition in the advertising business in the country was unfavourable to the target growth of the Company. The board of directors' meeting No. 6/2007 on 16 October 2007 approved the Company to discontinue the operation in this subsidiary. **Financial statements of Prakit & FCB (Cambodia) Limited for each of the years ended 31 December 2012 and 2011 were prepared by the Company’s management. 2.

Basis for the preparation and presentation of the financial statements

2.1 The financial statements have been prepared in accordance with the Generally Accepted Accounting Principles which are issued under the Accounting Professions Act B.E. 2547, and have been presented under the Accounting Act B.E. 2543, and according to the requirements of the Securities and Exchange Commission, and the regulation of the Stock Exchange of Thailand. 2.2 The financial statements are prepared and presented for Thai currency reporting purposed and prepared in Thai language. This English translation of financial statements has been prepared for the convenience of the readers who were not conversant with Thai language. 2.3 Notifications of applying the Financial Reporting Standards 2.3.1 The Federation of Accounting Professions Under the Royal Patronage of His Majesty the King has issued the Financial Reporting Standards which is effective for accounting periods beginning on or after 1 January 2013 as follow:


11 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued)

Accounting Standards TAS 12 TAS 20 (revised 2009)

Income Taxes Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (revised 2009) The Effects of Change in Foreign Exchange Rate Financial Reporting Standards TFRS 8 Operation Segments Financial Reporting Interpretation TSIC 10 Government Assistance-No Specific Relation to Operating Activities TSIC 21 Income taxes-Recovery of Revalued Non-Depreciable Assets TSIC 25 Income taxes-Changes in the Tax Status of an Entity or its Shareholders The Company and its subsidiaries have not yet adopted the above standards before the effective date. The management of the Company and its subsidiaries are in the process of evaluating the impact of these accounting standards on the financial statements in the year when they are initially applied. TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the stipulated guidelines in 2012. The effect of the adoption to the financial statements of the Company and its subsidiaries will be to increase profit for the year 2012 of Baht 0.40 million (Baht 0.007 per share) and decrease in other comprehensive income of Baht 1.79 million and increase broughtforward retained earnings of the year 2012 by Baht 8.14 million (Baht 0.14 per share) (separate financial statements: increase profit for the year 2012 by Baht 0.08 million (Baht 0.001 per share) and decrease in other comprehensive income Baht 1.79 million and increase brought-forward retained earnings of the year 2012 by Baht 5.59 million (Baht 0.09 per share)). 2.3.2 The Federation of Accounting Professions has issued Notification No. 30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of Accounting Treatment Guidance, Accounting Standard Interpretations and Financial Reporting Standard Interpretations as follows. Accounting treatment guidance Title Accounting Treatment Guidance for Transfers of Financial Assets

Effective date 1 January 2013

Accounting Standard Interpretation SIC 29 Service Concession Arrangements: Disclosures

1 January 2014

Financial Reporting Standard Interpretations TFRIC 4 Determining whether an Arrangement contains a Lease TFRIC 12 Service Concession Arrangements TFRIC 13 Customer Loyalty Programmes

1 January 2014 1 January 2014 1 January 2014

The Company and its subsidiaries have not yet adopted the above standards before the effective date. 2.4 Historical cost is used as measurement basis in preparing these financial statements except some items indicated in relevant notes. 2.5 The financial statements are prepared and presented in Thai Baht. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest thousand unless otherwise stated.


12 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 2.6 Use of estimates The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these 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. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are disclosed in note 16 regarding discount rate, salary increase rate, employee turnover rate and mortality rate. 3.

Significant accounting policies

3.1 Basis of consolidation The consolidated financial statements relate to the Company and its subsidiaries and the Group’s interests in associates. Intra-group balances and transactions are eliminated in preparing the consolidated financial statements. 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. Losses applicable to non-controlling interests in a subsidiary are allocated to noncontrolling interests even if doing so causes the non-controlling interests to have a deficit balance. Associates Associates in which the Group has significant influence, 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 authority entity. Investments in associate are accounted for in the consolidated financial statements using the equity method and are recognised initially at cost. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of profit or loss and other comprehensive income of equity accounted investees after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the Group’s carrying amount of that interest is reduced to zero and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.


13 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 3.2

Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions. Non-monetary assets and liabilities measured at fair value in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on translation are recognized in other comprehensive income and presented in the foreign currency translation reserve in equity until disposal of the investment. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and presented in the foreign currency translation reserve in equity until disposal of the investment.

3.3

Cash and cash equivalents Cash and cash equivalents comprise cash balances, call deposits and highly liquid short-term investments.

3.4

Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts. 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.

3.5

Investments Investments in associates and subsidiaries Investments in associated and subsidiaries in the separate financial statements of the Company are accounted for using the cost method. Investment in associates in the consolidated financial statements are accounted for using the equity method. Investments in other debt and equity securities Debt securities and marketable equity securities held for trading are classified as current assets and are stated at fair value, with any resultant gain or loss recognised in profit or loss. Debt securities that the Group has the positive intent and ability to hold to maturity are classified as held-tomaturity investments. Held-to-maturity investments are stated at amortised cost, less any impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity.


14 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Debt securities and marketable equity securities, other than those securities held for trading or intended to be held to maturity, 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 profit or loss. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in profit or loss. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in profit or loss. Equity securities which are not marketable are stated at cost less any impairment losses. The fair value of financial instruments classified as held-for-trading and available-for-sale is determined as 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 profit or loss. If the Group 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. 3.6

Investment properties Investment properties are properties which are held to earn rental income, for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Cost includes expenditure that is directly attributable to the acquisition of the investment property to a working condition for its intended use. The Group did not depreciate the investment in properties in land.

3.7

Property, plant and equipment Recognition and measurement Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net in profit or loss.


15 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the dayto-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is calculated based on the depreciable amount of buildings and equipment, which are the cost of an asset, or other amount substituted for cost, less its residual value. Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment. The estimated useful lives are as follows: Land improvement Buildings and improvement Furniture and fixture Office equipment Vehicles

30 30 5 - 10 3 - 10 5

years years years years years

No depreciation is provided on freehold land or assets under construction. Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. 3.8

Intangible assets Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and impairment losses. Amortisation Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows: Computer software

3

years

Amortisation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. 3.9

Impairment The carrying amounts of the Group’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. An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The impairment loss is recognised in profit or loss unless it reverses a previous revaluation credited to equity, in which case it is charged to equity.


16 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Calculation of recoverable amount The recoverable amount of a non-financial 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 flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

3.10

Trade and other accounts payable Trade and other accounts payable are stated at cost.

3.11

Deferred lease right Deferred lease right has been recognized as income by the straight-line method over the period of long-term lease agreement, over 29 years.

3.12 Employee benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. Defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value. Any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the terms of the Group’s obligations and that are denominated in the same currency in which the benefits are expected to be paid. The calculation is performed by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit relating to past service by employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss. The Group recognises all actuarial gains and losses arising from defined benefit plans in other comprehensive income and all expenses related to defined benefit plans in profit or loss.


17 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. 3.13

Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

3.14 Revenue Revenue excludes value added taxes and is arrived at after deduction of trade discounts and volume rebates. Sale of services rendered Service income is recognised as services are provided. Commissions When the Group acts in capacity of an agent rather than as the principal in a transaction, the revenue recognized is the net amount of commission made by the Group. Investments Revenue from investments comprises rental income from investment properties and dividend and interest income from investments and bank deposits. Rental income Rental income from investment property is recognised in profit or loss 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. Dividend income Dividend income is recognised in profit or loss on the date the Group’s right to receive payments is established. Interest income Interest income is recognised in profit or loss as it accrues.


18 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 3.15 Expenses Operating leases Payments made under operating leases are recognised in profit or loss on a straight line basis over the term of the lease. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. Determining whether an arrangement contains a lease At inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfillment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s incremental borrowing rate. Finance costs Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and contingent consideration, Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Other expense Other expense is recognized in profit or loss as it accrues. 3.16

Income tax Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

3.17 Earnings per share The Group presents basic earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group company by the weighted average number of ordinary shares outstanding during the year. 4.

Related parties For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or joint control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.


19 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Relationships with subsidiaries and jointly-controlled entity are described in notes 10. Relationship with key management and other related parties were as follows: Related company

Location

62 Graphic & Retouch Ltd.

Thai

common shareholders and/or directors

Impact VDO Production Co., Ltd.

Thai

common shareholders and/or directors

DRAFTFCB (China) Limited

China

DRAFTFCB (Chicago) Limited

USA

DRAFTFCB (Shanghai) Limited

China

common foreign shareholders under the same group of companies common foreign shareholders under the same group of companies common foreign shareholders under the same group of companies common foreign shareholders under the same group of companies common foreign shareholders under the same group of companies common foreign shareholders under the same group of companies common foreign shareholders under the same group of companies common foreign shareholders under the same group of companies

DRAFTFCB (Philippines) Limited

Philippine

DRAFTFCB (Malaysia) Limited

Malaysia

DRAFTFCB (Korea) Limited DRAFTFCB (Hamburg) Limited FCB Worldwide (SA) Limited

Korea Germany Mexico

Relationship

The pricing policies for particular types of transactions are explained further below: Transaction Services incomes Cost of service Office rental Management agreement Dividend 4.1

Explanation The fees are charged at the same condition and basis as general customers The mutually agreed rate Base on the space rate charged to other tenant The mutually agreed rate As declare

Significant transactions for the years ended 31 December with related parties were as follows:

Consolidated financial statements For the year ended 31 December Subsidiaries Services income Management income Rental income Dividend income Other income Cost of services Other expenses

2012

2011

-

-

(Unit: Thousand Baht) Separate financial statements 2012 57 34,949 3,107 34,998 96 3,073 600

2011 304 34,926 3,107 29,998 96 6,638 -


20 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued)

Consolidated financial statements For the year ended 31 December

2012

Associates Services income Management income Rental income Other incomes Cost of services Other services

2012

2011

96 60 24 21 960

507 96 80 24 113 -

96 60 24 960

96 80 24 -

120 8,186

120 4,926

120 715

120 760

22,066 1,563

23,685 1,563

13,781 1,324

14,417 1,324

23,629

25,248

15,105

15,741

Other related parties Management income Cost of services Key management personnel Short-term employee benefits Post-employment benefits Total key management personnel benefit --- expenses

2011

(Unit: Thousand Baht) Separate financial statements

The Group paid the director and administrative remunerations which are comprised of salaries, bonus, defined contribution, other benefits meeting perdium, and post-employee benefits, etc. 4.2

Balances as at 31 December with related parties were as follows:

Trade accounts receivable from related parties

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2012

2011

2012

-

-

2011

Subsidiaries DRAFTFCB (Thailand) Ltd. Prakit & FCB (Cambodia) Co., Ltd. Marketing Drive Worldwide (Thailand) Ltd. Associated company Direct Response (Thailand) Ltd. Related companies DRAFTFCB (Shanghai) Ltd. DRAFTFCB (Philippines) Ltd. DRAFTFCB (Malaysia) Ltd. DRAFTFCB (Korea) Ltd. FCB Worldwide (SA) Ltd. 62 Graphic & Retouch Ltd. Less allowance for doubtful accounts Net

16 1,274 1,217 1,040 11 3,558 3,558

106 2,464 2,550 678 73 5,871 5,871

3,417 961 103 16 11 4,508 (961) 3,547

5,763 961 103 6,989 (961) 6,028


21 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) As 31 December 2012 and 2011, the Company and its subsidiaries had trouble debt- trade account receivable-related companies which were overdue as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements Over 3 months but not over 6 months Over 6 months but not over 12 months Over 12 months Total Less: allowance for doubtful accounts Net

2012 818 818 818

2011 1,791 1,791 1,791

2012 961 961 (961) -

2011 961 961 (961) -

4.2.2 Media receivable-related companies Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2012

2011

2012

-

-

2011

Subsidiary company Marketing Drive Worldwide (Thailand) Ltd. Less: allowance for doubtful accounts Net

2,003 2,003

1,636 1,636

The Company and its subsidiaries' media receivable from related companies were totally within normal credit terms. 4.2.3 Advances to related companies Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2012

2012

2011

2011

Subsidiary companies DRAFTFCB (Thailand) Limited

-

-

-

244

Prakit & FCB (Myanmar) Limited

-

-

2,486

2,486

Prakit & FCB (Cambodia) Co.,Ltd.

-

-

2,227

2,227

Marketing Drive Worldwide (Thailand) Ltd.

-

-

10

5

5

5

5

5

-

199

-

5

204

4,728

Less Allowance for doubtful debts

-

-

(4,713)

Net

5

204

15

Associated company Direct Response (Thailand) Limited Related company DRAFTFCB (Hamburg) Limited

4,967 (4,713) 254


22 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 4.2.4 Trade accounts payable-related companies

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2012

2011

2012

2011

DRAFTFCB (Thailand) Limited

-

-

10,668

12,590

Marketing Drive Worldwide (Thailand) Ltd.

-

-

107

1,605

-

1,027

-

-

-

Subsidiary companies

Associated company Direct Response (Thailand) Limited

1,049

Related companies Impact VDO Production Co., Ltd.

-

42

62 Graphic & Retouch Ltd.

4,732

2,793

548

277

Total

5,781

2,835

12,350

14,472

4.2.5 Media payable-related companies

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2012

2011

2012

-

-

366

2011

Subsidiary companies DRAFTFCB (Thailand) Limited

529

Related companies 62 Graphic & Retouch Ltd.

245

-

245

Total

245

-

611

529

4.2.6 Advances from related companies

Consolidated financial statements

(Unit: Thousand Baht) Separate financial statements

2012

2011

2012

2011

DRAFTFCB (Chicago) Limited

-

4,411

-

-

Total

-

4,411

-

-

Related companies

4.2.7 Other matters The Company’s bank deposit has been pledged to a bank to secure overdrafts facilities and short-term borrowing of a subsidiary company amounting to Baht 30 million. Part of land and building have been mortgaged to a bank as a collateral for Baht 58.50 million credit line for overdrafts facilities of its subsidiary company.


23 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) A subsidiary has entered into an advertising technical co-operation and assistance agreement with a foreign related company. The subsidiary is subject to pay technical assistance fee at the rate of 0.50% on gross advertising income stated in the agreement. Two subsidiary companies have entered into the agreement for office rental with the Company for the period of 3 years ending in December 2014 and December 2015 respectively, and the monthly rental rates are Baht 113,200 and 40,000, respectively. A subsidiary has entered into an agreement to lease office equipment and cars with the Company for the period of 3 years ending in December 2014, and the totalling monthly rental rate is Baht 105,738. 5.

Cash and cash equivalents (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012

2011

2012

2011

45

45

15

15

Cash at banks – current accounts

4,334

2,843

193

704

Cash at banks – savings accounts

74,926

84,516

55,705

41,683

Total

79,305

87,404

55,913

42,402

Cash on hand

The currency denomination of cash and cash equivalents as at 31 December was as follows: (Unit: Thousand Baht)

Thai Baht (THB) United States Dollars (USD) Total

6.

Consolidated

Separate

financial statements

financial statements

2012

2011

2012

2011

79,305

87,373

55,913

42,402

79,305

31 87,404

55,913

42,402

Investments in personal fund In the year 2005, the Company invested in a personal fund. The Company has authorized SCB Asset Management Co., Ltd. to manage its investment in securities in which the Company has furnished initial fund to the security company amounting to Baht 20 million. The Company has set the investment policy as Privileged Select - IPO which is a flexible fund and emphasis on investing in equity securities, common shares of newly listed company with sound performance and debt securities. Such investment policy is depend upon the authorized security company' s judgment base on the Company's investment objective. The management and custodian fees will be charged at the rates stipulated in the fund management contract. Ayudhaya Bank (Plc) is appointed as the Company custodian. As at 31 December 2012 and 2011, the investments in a personal fund consist of:


24 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) (Unit: Thousand Baht) Consolidated and separate financial statements

Unit fund Unrealized gain (loss) from re-measuring at fair value in securities Investment in securities

2012

2011

20,000

20,000

5,278

4,445

25,278

24,445

As at 31 December 2012 and 2011, the Company received the investment report from the assets management company, the manager of the above mentioned fund, presenting details as followings: (Unit: Thousand Baht) Consolidated and separate financial statements 2012 Cash and deposit at financial institutions

2011

4,171

727

155

145

(9)

(508)

Debentures

10,337

6,384

Bonds

4,884

6,964

Promissory notes

3,100

4,100

Bills of exchange

2,000

6,000

640

633

25,278

24,445

Other assets and liabilities Other assets Other liabilities Investment in securities – fair vaue Investment in debt securities

Mutual Funds Total 7

Investments in securities As at 31 December 2012 and 2011, investment in securities consist of: Current investments (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012

2011

2012

2011

Trading securities Unit fund Gain from fair value adjustment Total

234,849

150,426

142,275

59,801

5,359

1,598

3,671

648

240,208

152,024

145,946

60,449


25 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) The movements of current investment for each of the years ended 31 December 2012 and 2011 were as follows: (Unit : Thousand Baht) Consolidated financial statements

Separate financial statements

2012

2011

2012

2011

Beginning balance of the year

152,024

158,732

60,449

58,107

Acquisition

252,098

243,068

123,421

133,068

Disposal

(169,273)

(251,374)

(41,595)

(131,374)

234,849

150,426

142,275

59,801

5,359

1,598

3,671

648

240,208

152,024

145,946

60,449

Total Gain (loss) form fair value adjustment Net Long-Term Investments

(Unit : Thousand Baht) Consolidated financial statements

As at 31 December 2012

Debt Securities-Cost

Security available for Sale

Held to Maturity

Other Investment

-

118,000

-

-

-

-

-

118,000

-

118,000

-

(5,000)

113,000

-

113,000

67,740

-

-

67,740

(12,828)

-

-

(12,828)

54,912

-

-

54,912

-

2,500

2,500

113,000

2,500

170,412

Total 118,000

Unrealized gain (loss) on fair value adjustment

-

Less: Current portion of held to maturity debt securities Total debt securities Equity Securities-Cost

-

(5,000)

Unrealized gain (loss) on fair value Adjustment Total equity securities Fixed accounts, not pledged as a collateral Grand total of long-term investments

54,912


26 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued)

(Unit : Thousand Baht) Separate financial statements

As at 31 December 2012 Security available for Sale Debt Securities-Cost

-

Held to Maturity 116,000

Other Investment -

Total 116,000

Unrealized gain (loss) on fair value adjustment

-

-

-

-

-

116,000

-

116,000

-

(5,000)

111,000

-

111,000

67,740

-

-

67,740

(12,828)

-

-

(12,828)

54,912

-

-

54,912

54,912

111,000

-

165,912

Less: Current portion of held to maturity debt securities Total debt securities Equity Securities-Cost

-

(5,000)

-

Unrealized gain (loss) on fair value Adjustment Total equity securities Grand total of long-term investment

(Unit : Thousand Baht) Consolidated and separate financial statements

As at 31 December 2011

Debt Securities-Cost

Security available for Sale

Held to Maturity

Other Investment

-

88,500

-

Total 88,500

Unrealized gain (loss) on fair value adjustment

-

-

-

-

-

88,500

-

88,500

-

(24,500)

-

(24,500)

-

64,000

-

64,000

Less: Current portion of held to maturity debt securities Total debt securities Equity Securities-Cost

94,379

-

-

94,379

(18,930)

-

-

(18,930)

75,449

-

-

75,449

-

139,449

Unrealized gain (loss) on fair value Adjustment Total equity securities Grand total of long-term investments

75,449

64,000


27 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) The movements of long-term investments for the years ended 31 December 2012 and 2011 were as follows: (Unit : Thousand Baht) Consolidated financial statements

Separate financial statements

2012

2011

2012

2011

163,949

204,787

163,949

204,787

87,885

55,969

85,885

55,942

Disposal

(90,474)

(87,805)

(88,747)

(87,805)

Total

166,811

172,951

166,811

172,951

6,101

(9,002)

6,101

(9,002)

172,912

163,949

170,912

163,949

(5,000)

(24,500)

(5,000)

(24,500)

167,912

139,449

165,912

139,449

Beginning balance of the year Acquisition

Unrealized gain (loss) on fair value adjustment Net investment Less Current portion of held to maturity debt securities Net Fixed account, not pledged as a collateral Total long-term investments

2,500 170,412

139,449

-

-

165,912

139,449

The Company shows differences between fair values and cost values as “unrealized gain (loss) from fair value adjustment in securities� and presented in statements of comprehensive income. Due dates of held-to-maturity debt securities are as follows: (Unit : Thousand Baht)

As at 31 December 2012 Consolidated financial statements

Separate financial statements

Cost Value

Fair Value

Cost Value

Fair Value

5,000

5,000

5,000

5,000

Over 1 year but not over 5 years

73,000

73,000

71,000

71,000

Over 5 years but not over 10 years

27,000

27,000

27,000

27,000

Over 10 years but not over 15 years

13,000

13,000

13,000

13,000

118,000

118,000

116,000

116,000

Maturity date: Not over 1 year

Total


28 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) (Unit : Thousand Baht)

As at 31 December 2011 Consolidated financial statements

Separate financial statements

Cost Value

Fair Value

Cost Value

Fair Value

Not over 1 year

24,500

24,500

24,500

24,500

Over 1 year but not over 5 years

35,000

35,000

5,000

5,000

Over 5 years but not over 10 years

16,000

16,000

16,000

16,000

Over 10 years but not over 15 years

13,000

13,000

13,000

13,000

88,500

88,500

88,500

88,500

Maturity date:

Total

8.

Trade and other accounts receivable (Unit: Thousand Baht)

Note

Consolidated

Separate

financial statements

financial statements

2012

2011

2012

2011

Trade accounts and notes receivable Related parties

4

Other parties

3,558

5,871

4,508

6,989

69,369

83,049

16,653

14,832

-

2,002

1,636

Media and noted receivable Related parties

4

Other parties

327,546

227,489

198,826

187,991

5

204

4,727

4,967

4,784

12,940

3,355

8,306

11,700

13,133

8,170

9,192

Advances payment

5,358

6,817

293

186

Others

8,047

3,737

935

1,274

Total

430,367

353,240

239,469

235,373

Less: allowance for doubtful accounts

(18,140)

(18,123)

(11,363)

(11,363)

Net

412,227

335,117

228,106

224,010

Advance to related companies Advances payment for media Accrued incomes

4


29 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued)

As at 31 December 2012 and 2011, the Company and its subsidiaries had trouble debt - trade accounts receivable from other companies by aging as follows: (Unit : Thousand Baht) Consolidated financial statements

Separate financial statements

2012

2011

2012

2011

3-6 months

26

5,127

-

108

6-12 months

32

967

-

-

Over 12 months

6,708

6,582

3,003

3,003

Total

6,766

12,676

3,003

3,111

(6,308)

(6,278)

(3,003)

(3,003)

Less Allowance for doubtful debts Net

458

6,398

-

108

As at 31 December 2012 and 2011, the Company and its subsidiaries had trouble debt - media receivable from other companies by aging as follows: (Unit : Thousand Baht) Consolidated financial statements

Separate financial statements

2012

2011

2012

3-6 months

9,977

1,799

6-12 months

-

-

-

870 -

Over 12 months

12,014

12,027

3,647

3,647

Total

21,991

13,826

3,650

4,517

(11,837)

(11,845)

(3,647)

(3,647)

10,154

1,981

Less Allowance for doubtful debts Net

9.

3

2011

3

870

Bank deposit held as collateral As at 31 December 2012 and 2011, the Company's fixed deposit has been pledged as a security for its subsidiary's loan facilities including bank overdraft of Baht 5 million and short- term loan from bank of Baht 25 million. The fixed deposit has earned interest at the rates 1.25 – 2.75 % per annum and 1.25% per annum, respectively.


30 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 10.

Investment in associated and subsidiary companies Investment in associated and subsidiary companies were as follows: As at 31 December 2012 Consolidated financial statements Unit : Thousand Baht Investment

Company Associated Company Direct Response (Thailand) Ltd.

Type of business

Paid-up share capital (in Baht)

Investment Ownership (%)

Cost method

Advertising

2,000,000

49.00

1,421

Equity method

Dividend receivable

1,807

-

-

As at 31 December 2011 Consolidated financial statements Unit : Thousand Baht Investment

Company Associated Company Direct Response (Thailand) Ltd.

Type of business

Paid-up share capital (in Baht)

Investment Ownership (%)

Cost method

Advertising

2,000,000

49.00

1,421

Equity method

-

1,293

Dividend receivable

-


31 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) As at 31 December 2012 and 2011 Unit : Thousand Baht Separate Financial stament Type of business

Company

Paid-up share capital

Investment Ownership(%)

Investment by cost method

Dividend

(in Baht/ US$)

2012

2011

2012

2011

2012

2011

10,000,000

99.99

99.99

9,999

9,999

34,998

29,998

Advertising 88,084 US$

90.00

90.00

2,011

2,011

-

-

Advertising 25,000 US$

80.00

80.00

507

507

-

-

Subsidiary Companies DRAFTFCB (Thailand) Limited

Advertising

Prakit&FCB (Myanmar) Limited Prakit&FCB(Cambodia) Co., Ltd.

Marketing Drive Worldwide (Thailand) Limited

Advertising

2,000,000

99.965

99.965

1,999

1,999

-

-

Advertising

2,000,000

49.00

49.00

1,421

1,421

-

-

15,937

15,937

impairment loss

(2,011)

(2,011)

Total investment

13,926

13,926

Associated Company Direct response (Thailand) Limited Total Less Allowance for

34,998

29,998


32 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 11.

Loans to employee As at 31 December 2012 and 2011, the movement of loans to employee were as follows: (Unit: Thousand Baht)

Beginning balance

Consolidated financial statements

Separate financial statements

2012

2012

2011

2011

1,585

1,365

1,110

575

400

1,150

200

950

Total

1,985

2,515

1,310

1,525

Less: decrease during the year

(940)

(930)

(580)

(415)

Ending balance

1,045

1,585

730

1,110

Less: current portion of due within 1 year

(590)

(720)

(455)

(480)

455

865

275

630

Add: increase during the year

Net

According to the Company's policy, the interest free loans were provided to its employees as fringe benefits of its employees. Current portion of loan to employees were included in other current assets.

12.

Investment property As at 31 December 2012 and 2011, investment property were consisted of: (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012

2012

2011

2011

Land for lease

46,215

46,215

46,215

46,215

Unutilized land for operation

90,000

90,000

90,000

90,000

136,215

136,215

136,215

136,215

Total

The Company has two plots of land as investment property which had a fair value of Baht 310.40 million.


33 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 13.

Property, plant and equipment (Unit: Thousand Baht)

Land Cost As at 1 January 2011 Purchase Disposal As at 31 December 2011 and 1 January 2012 Purchase Disposal As at 31 December 2012 Accumulated depreciation As at 1 January 2011 Depreciation for the year Disposal As at 31 December 2011 and 1 January 2012 Depreciation for the year Disposal As at 31 December 2012 Net book Value As at 31 December 2011 As at 31 December 2012

Buildings and improvement

Consolidated financial statements Leasehold Land asset Furniture improvement improvements and fixtures

Office equipment

Vehicles

Total

54,569 -

82,999 4,743 -

2,699 -

184 64 (69)

12,107 298 -

15,086 938 (513)

21,840 3,463 (3,508)

189,484 9,506 (4,090)

54,569 377 (135) 54,811

87,742 25 87,767

2,699 2,699

179 (48) 131

12,405 534 (559) 12,380

15,511 1,100 (1,748) 14,863

21,795 (1,568) 20,227

194,900 2,306 (4,058) 192,878

-

46,834 2,945 -

1,271 90 -

156 27 (64)

11,437 280 -

13,020 1,287 (498)

17,620 2,424 (3,507)

90,338 7,053 (4,069)

-

49,779 3,218 52,997

1,361 90 1,451

119 15 (41) 93

11,717 245 (439) 11,523

13,809 1,043 (1,562) 13,290

16,537 1,159 (821) 16,875

93,322 5,770 (2,863) 96,229

37,963 34,770

1,338 1,248

60 38

1,702 1,573

5,258 3,352

54,569 54,811

688 857

101,578 96,649


34 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) (Unit: Thousand Baht)

Land Cost As at 1 January 2011 Purchase Disposal As at 31 December 2011 and 1 January 2012 Purchase Disposal As at 31 December 2012 Accumulated depreciation As at 1 January 2011 Depreciation for the year Disposal As at 31 December 2011 and 1 January 2012 Depreciation for the year Disposal As at 31 December 2012 Net book Value As at 31 December 2011 As at 31 December 2012

Buildings and improvement

Separate financial statements Leasehold Land asset Furniture improvement improvements and fixtures

Office equipment

Vehicles

Total

54,569 -

82,999 4,743 -

2,699 -

-

11,469 99 -

9,712 447 -

14,560 2,841 (2,460)

176,008 8,130 (2,460)

54,569

87,742

362 11,930

10,159 635 10,794

14,941 14,941

181,678

25 87,767

-

11,568

377 (135) 54,811

2,699 2,699

1,399 (135) 182,942

-

46,834 2,945 -

1,271 90 -

-

11,015 147 -

9,134 375 -

111,526 1,734 (2,460)

79,780 5,291 (2,460)

-

49,779 3,218 52,997

1,361 90 1,451

-

11,162 170 -

9,509 454 -

82,611 4,898 -

11,332

9,963

10,800 966 11,766

87,510

37,963 34,770

1,338 1,248

-

406 598

650 831

4,141 3,175

99,067 95,433

54,569 54,811

Part of land and building of the Company have been pledged as collateral for a subsidiary's bank overdrafts.


35 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 14.

Trade accounts and other payable (Unit: Thousand Baht)

Note

Consolidated financial statements

Separate financial statements

2012

2012

2011

2011

Trade accounts payable Trade accounts and note payable Related companies

4

Other companies

5,781

2,835

12,350

14,472

65,091

52,105

8,361

1,646

245

-

611

529

171,973

94,524

107,016

61,017

243,090

149,464

128,338

77,664

Media and note payable Related companies

4

Other companies Total

Other payable Advance from related companies

4

-

4,411

-

-

Deposits

24,891

21,496

2,006

4,077

Accrued expenses

23,406

23,083

6,009

5,334

Other

10,575

6,683

10,423

10,202

Total

58,872

55,673

18,438

19,613

301,962

205,137

146,776

97,277

Total trade accounts and other payable


36 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 15.

Deferred lease right As at 31 December 2012 and 2011, deferred lease right were consisted of: (Unit: Thousand Baht) Consolidated financial statements

Separate financial statements

2012

2012

2011

2011

Deferred lease right

19,904

20,988

19,904

20,988

Earned during the year

(1,085)

(1,084)

(1,085)

(1,084)

Net

18,819

19,904

18,819

19,904

Deferred lease right is the right from lending a plot of land to a company which has 29 year operating lease agreement. Furthermore, the Company receives the annual income from this asset as follows:

2011-2015 2016-2020 2021-2025 2026-2029

16.

(in thousand Baht) Annul rental income 363 399 439 483

Employee benefit obligations (Unit: Thousand Baht) Consolidated

Separate

financial statements

financial statements

2012

2011

2012

2011

15,696

9,794

6,135

3,411

8,010

8,183

2,724

2,901

Statement of financial position obligations for: Post-employment benefits

Year ended 31 December Statement of comprehensive income: Recognised in profit or loss: Post-employment benefits


37 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) The Group adopted TAS 19 - Employee Benefits with effect from 1 January 2011. The Group opted to recognise the transitional obligation as at 1 January 2011 through profit or loss on a straight-line basis over five years from 1 January 2011. Movements during the year on the provision for the unrecognised transitional obligation were as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011 Unrecognised transitional obligation as at 1 January 18,152 22,690 7,398 9,247 Recognised through profit or loss for the year (4,538) (4,538) (1,849) (1,849) Unrecognised transitional obligation as at 31 December 13,614 18,152 5,549 7,398 The Group operate a defined benefit pension plan based on the requirement of Thai Labour Protection Act B.E 2541 (1998) to provide retirement benefits to employees based on pensionable remuneration and length of service. The statement of financial position obligation was determined as follows:

Present value of unfunded obligations Unrecognised transitional obligation Statement of financial position obligation

Consolidated financial statements 2012 2011 29,312 27,947 (13,616) (18,153) 15,696 9,794

(Unit: Thousand Baht) Separate financial statements 2012 2011 11,684 10,809 (5,549) (7,398) 6,135 3,411

Movement in the present value of the defined benefit obligations.

Defined benefit obligations at 1 January Transitional obligation recognised Benefits paid by the plan Current service costs and interest Defined benefit obligations at 31 December

Consolidated financial statements 2012 2011 3,120 9,794 4,537 4,537 (2,109) (1,508) 3,472 3,645 15,696 9,794

(Unit: Thousand Baht) Separate financial statements 2012 2011 3,411 960 1,849 1,849 (450) 875 1,052 6,135 3,411

Consolidated financial statements 2012 2011 4,538 4,538 1,373 2,466 1,152 1,179 7,063 8,183

(Unit: Thousand Baht) Separate financial statements 2012 2011 1,849 1,849 516 601 359 451 2,724 2,901

Expense recognised in profit or loss

Transitional obligation recognised Current service costs Interest on obligation Total


38 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Principal actuarial assumptions at the reporting date (expressed as weighted averages): Consolidated financial statements 2012 2011

Separate financial statements 2012 2011 (%)

Discount rate Future salary increases Employee turnover* Mortality rate** Disability rate** * depend on the length of service ** Thailand Mortality Ordinary Table 1997 17.

4.17 4.81 0.0-28.0 50.0 10.0

4.17 4.81 0.0-28.0 50.0 10.0

4.17 4.81 0.0-28.0 50.0 10.0

4.17 4.81 0.0-28.0 50.0 10.0

Share capital

Par value per share (in Baht)

(Unit: Thousand shares / Thousand Baht) 2012 2011 Number Amount Number Amount

Authorised At 1 January - ordinary shares At 31 December - ordinary shares

1

99,484

99,484

99,484

99,484

1

99,484

99,484

99,484

99,484

Issued and paid-up At 1 January - ordinary shares Increade At 31 December - ordinary shares

1 1

60,000 -

60,000 -

59,484 516

59,484 516

1

60,000

60,000

60,000

60,000

Issuance of ordinary shares Held on 25 April 2011, the Annual General Meeting of the Company has pass a resolution to issue 516,000 common shares with par value of Baht 1 each, to offer to the senior executives including any senior executives who are also directors of it and/or its subsidiaries. The offer price is average weighted price of shares traded in the Stock Exchange of Thailand of 15 consecutive business days before offering date of the Company's new shares. The Company registered this increase in paid - up capital with the Ministry of Commerce on 3 May 2011.


39 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 18.

Additional paid-in capital and 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.

2012 Number of shares Additional paid-in capital As at 1 January - Increase As at 31 December

60,000 60,000

(Unit: Thousand shares/ Thousand Baht) 2011 Baht 193,569 193,569

Number of shares 59,484 516 60,000

Baht 189,776 3,793 193,569

Legal reserve Section 116 of the Public Companies Act B.E. 2535 requires that a public company shall allocate not less than 5% of its annual net profit, 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. Other component of equity Currency translation differences The currency translation differences account within equity comprises all foreign currency differences arsing from the translation of the financial statements of foreign operations in a foreign operation. Fair value changes in available-for-sale investments The fair value changes in available-for-sale investments account within equity comprises the cumulative net change in the fair value of available-for-sale investments until the investments are derecognized.


40 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued)

19.

Segment information For the year ended 31 December 2012 are as follow: (Unit : Million Baht) Consolidated financial statement Service Revenues Cost of services

398.13 (291.43)

Selling and administrative expense Share of profit from investment – equity method Operating income Management income Other revenues Corporate income tax Profit before net of non-controlling interests Non-controlling interest- net profit Profit for the year

Agency

Investment

144.26 -

14.81 -

Total 557.20 (291.43) (157.97) 0.51 108.31 0.22 14.95 (28.57) 94.91 0.02 94.93

As at 31 December 2012 Property, plant and equipment – Net

96.55

Other assets

1,113.99

Total assets

1,210.64


41 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued)

For the year ended 31 December 2011 are as follow:

(Unit : Million Baht) Consolidated financial statement Service income Revenues Cost of services

393.11

Agency income

Investment income

129.92

(225.15)

-

22.28 -

Selling and administrative expense

Total 545.31 (225.15) (223.67)

Share of profit from investment – equity method

0.04

Operating income

96.53

Management income

0.22

Other revenues

6.87

Corporate income tax

(33.04)

Profit before net of non-controlling interests

70.58

Non-controlling interest- net profit

0.09 70.67

Profit for the year

As at 31 December 2011

20.

Property, plant and equipment – Net

101.58

Other assets

945.18

Total assets

1,046.76

Provident fund The Company, the subsidiary companies and their employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The Company, the subsidiary companies and their employees contributed to the fund monthly at the rate of 5 percent of their basic salary. The fund, which is managed by Thanachart Fund Management Co., Ltd. will be paid to employees upon termination in accordance with the fund rules. For the year ended 31 December 2012 and 2011, the Company and it's subsidiaries contributed Baht 5.04 million and Baht 5.15 million respectively.

21.

Expenses by nature Significant expenses classified by nature were consisted of:

Employee expenses Cost of service Depreciation expenses

Consolidated financial statements 2012 2011 159,494 164,891 291,425 225,145 5,770 7,053

(Unit: Thousand Baht) Separate financial statements 2012 2011 54,865 52,447 36,551 34,786 4,898 5,291


42 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 22.

Income tax Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the three accounting periods 2012, 2013 and 2014; from 30% to 23% for the accounting period 2012 which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or after 1 January 2013 and 2014, respectively. It is understood that the Government will proceed to amend the law in order to maintain the corporate income tax rate at not higher than 20% for the accounting period 2015 which begins on or after 1 January 2015 and onwards in order to give full effect to the Cabinet resolution dated 11 October 2011 to increase Thailand’s tax competitiveness.

23.

Earnings per share The calculation of basic earnings per share for was based on the profit for the periods attributable to equity holders of the parent and the number of ordinary shares outstanding during the years by computing as follows:

Profit attributable to ordinary shareholders of the Company (thousand Baht) Number of ordinary shares outstanding (thousand shares) Basic earnings per share (Baht) 24.

Consolidated financial statements 2012 2011

Separate financial statements 2012 2011

94,933 60,000 1.58

91,523 60,000 1.53

70,666 59,828 1.18

67,215 59,828 1.12

Dividends The Company Held on 23 April 2012, the 26th Annual General Meeting of the Company had pass a resolution to pay dividend from the 2011 operating result at Baht 0.75 per share amounting to Baht 45 million, paid on 22 May 2012. In this payment, there were shareholders who did not have rights to receive dividend 3.47 million shares amounting to Baht 2.60 million. Held on 25 April 2011, the 25th Annual General Meeting of the Company passed a resolution to pay dividend from the 2010 operating result at Baht 0.65 per share amounting to Baht 39 million, paid on 23 May 2011. In this payment, there were shareholders who did not have rights to receive dividend 3.47 million shares amounting to Baht 2.26 million. Subsidiary Held on 24 April 2012, the Annual General Meeting of a subsidiary's No.1/2012 had pass a resolution to pay dividend from the 2011 operating result at Baht 350 per share amounting to Baht 35 million, paid on 18 May 2012.

Held on 27 April 2011, the Annual General Meeting of a subsidiary's No.1/2011 had pass a resolution to pay dividend from the 2010 operating result at Baht 300 per share amounting to Baht 30 million, paid on 18 May 2011.


43 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) 25

Financial instruments Financial risk management policies The Group is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The Group does not hold or issue derivative financial instruments for speculative or trading purposes. Risk management is integral to the whole business of the Group. The Group 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’s risk management process to ensure that an appropriate balance between risk and control is achieved. Capital management The Board of Directors’ policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Group defines as result from operating activities divided by total shareholders’ equity, excluding noncontrolling 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 Company and its subsidiaries’ operations and its cash flows because deposits at banks, bank overdrafts and borrowings from financial institutions interest rates are fluctuations in market interest rates. As at 31 December 2012, significant financial assets and liabilities of the Company and its subsidiaries were exposed from the interest rates as follows: (Unit: Thousand Baht) Consolidated financial statements Fixed Rate Adjusted Interest to No rates Within 1–5 >5 market interest (% per 1 year years years rate rates Total annum) Financial assets Cash and cash equivalent 74,772 4,533 79,305 0.75 Current investment 500 265,486 265,986 4.75 Trade and other receivables 412,227 412,227 Bank deposit held as collateral 30,000 30,000 3.00 Other long-term investments 7,500 73,000 40,000 54,912 175,412 3.00-6.00 Loan to employee 1,045 1,045 Financial liabilities Trade and other payable 301,962 301,962 -


44 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) (Unit: Thousand Baht) Separate financial statements Fixed Rate

Within 1 year Financial assets Cash and cash equivalent Current investment Trade and other receivables Bank deposit held as collateral Other long-term investments Loan to employee Financial liabilities Trade and other payable

-

1–5 years

>5 years

Adjusted to market rate

No interest rates

Total

55,551 -

362 171,224 228,106

55,913 171,724 228,106

0.75 4.75 3.00

500 -

-

30,000

-

-

-

-

30,000

5,000 -

71,000 -

40,000 -

-

54,912 730

170,912 730

-

-

-

146,776

146,776

-

Interest rates (% per annum)

3.00-6.00 -

As at 31 December 2011, significant financial assets and liabilities of the Company and its subsidiaries were exposed from the interest rates as follows: (Unit: Thousand Baht) Consolidated financial statements Fixed Rate Adjusted Interest to No rates Within 1–5 >5 market interest (% per 1 year years years rate rates Total annum) Financial assets Cash and cash equivalent 85,666 1,738 87,404 0.25 Current investment 1,500 176,469 177,969 0.75-1.75 Trade and other receivables 335,117 335,117 Bank deposit held as collateral 32,500 32,500 2.05-2.75 Other long-term investments 24,500 35,000 29,000 75,449 163,949 3.00-5.595 Loan to employee 1,585 1,585 Financial liabilities Trade and other payable 205,137 205,137 (Unit: Thousand Baht) Separate financial statements Fixed Rate

Financial assets Cash and cash equivalent Current investment Trade and other receivables Bank deposit held as collateral Other long-term investments Loan to employee Financial liabilities Trade and other payable

Adjusted to market rate

No interest rates

Total

41,599 -

803 84,894 224,093

42,402 86,394 224,093

0.25 0.75-1.75 -

30,000

2.05-2.75 3.00-5.595 -

Within 1 year

1–5 years

>5 years

-

1,500 -

-

30,000

-

-

-

-

24,500 -

35,000 -

29,000 -

-

75,449 1,110

163,949 1,110

-

-

-

-

97,277

97,277

Interest rates (% per annum)

-


45 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Foreign currency risk At 31 December 2012 and 2011, the Group and the Company were exposed to foreign currency risk in respect of financial assets denominated in the following currencies: (Unit: Thousand Baht) Consolidated financial statements 2012 2011 United States Dollars Cash and deposits at banks Trade and other receivable Equipment Other assets Other payable Gross balance sheet exposure

5,008 5,008

31 6,004 665 5 (1,420) 5,285

Separate financial statements 2012 2011 -

-

Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial positions. However, due to the large number of parties comprising the Group’s customer base, Management does not anticipate material losses from its debt collection. Liquidity risk The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. Determination of fair values A number of the Group’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. The fair value of trade and other short-term receivables is taken to approximate the carrying value. The fair value of investments in equity and debt securities, which are held to maturity and available for sales, is determined by reference to their quoted bid price at the reporting date. The fair value of held-to-maturity investments is determined for disclosure purposes only. The fair value of non-derivative financial liabilities, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date.


46 PRAKIT HOLDINGS PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Notes to the financial statements (Consolidated and separate financial statements) (continued) Although the management uses its best judgment in estimating fair values of financial instruments, estimation methodologies and assumptions used to estimate fair values are inherently subjective. Accordingly, the use of different estimation methodologies and/or market assumptions may have a significant effect on the estimated fair values. 26.

Capital management The primary objectives of the Company and subsidiaries’ capital management are to maintain their ability to continue as a going concern and to maintain an appropriate capital structure. As at 31 December 2012 and 2011, debt-to-equity ratio in the consolidated financial statements was 0.45: 1 and 0.35: 1, respectively and in the separate financial statements was 0.27: 1 and 0.22: 1 respectively.

27.

Reclassification of accounts Certain accounts in the 2011 financial statements have been reclassified to conform to the presentation in the 2012 financial statements as follows:

Consolidated financial statements Before reclass. Statement of financial position Other receivables Other current assets Other payable Other current liabilities Employee benefit obligation

767 5,715 -

Statement of comprehensive income Cost of rendering of services Selling and administrative expenses 57,929

Reclass

After reclass.

767 (767) (5,715) 4,563

767 4,563

1,152

1,152

57,929

57,929

(57,929)

Before reclass.

83 2,389

(Unit: Thousand Baht) Separate financial statements After Reclass reclass.

(83) 83 (2,389) 1,570

83 1,570

819

819

-

-

-

-

-

-

The management of the Company has not presented the beginning of the earliest comparative information, presented in 2012 statements of financial position due to immaterial impact from reclassifications of accounts in 2012. 28.

Contingent liability

The Company pledged the directors’government bonds as collaterals to the Metropolitan Electricity Authority for using the electricity amounting to Baht 558,400. 29.

Other information

As at 31 December 2012 and 2011, net asset per share in the consolidated financial statements was Baht 13.95 per share and Baht 13.01 per share, respectively and in the separate financial statements was 11.91 Baht per share and 11.02 Baht per share, respectively. 30.

Approval of financial statements

The financial statements have been approved by the Company’s Board of Directors on 26 February 2013.


P fcb 12  

P-FCB_2012 PRAKIT HOLDINGS PCL Annual Report 2012

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