IFS: Annual Report 2011

Page 1

General Information

"# $ %& " '

Company Name ( ) ( !) IFS Capital (Thailand) Public Company Limited / Q' ! ' !- 12 Address " / 1168/55 Q! 20 , >X!/ & & ? Y!!> 4 "&' ,2' Z " ,' > ! 10120 1168/55, Fl. 20, Lumpini Tower, Rama 4 Road, Tungmahamek, Sathorn, Bangkok 10120 * +, Type of Business - # ! . ! + / # ' ! %' (Factoring) ! / 0 %' * 11 2 ' ' ! (Financial Lease) ! 2 0 3 (Hire Purchase) ! * !4 . !#! ,2 $ # / 5!6$# "! ' "! 2 * -! Providing Factoring services, Financial Lease, Hire Purchase, and other services by focusing on local SMEs. " / ! Company Registration No.

107550000033

. > ? Tel. . Fax. &O 0 ? Website

02-285-6326 - 32 02-679-9140 - 4 02-285-6335 02-679-9159 www.ifscapthai.com

Contents

1 02 03 04 06 08 09 13 17 18 19 21 25 26 44 55 56 64 70 72 74 76 78 130 131

/ Financial Highlights / Vision and Mission / Message from the Chairman ! " # / Board of Directors and Management team $ / Organization Chart % " & / Nature of Business ' ( " % / Milestones $ )* / Revenue Structure $ " & $ & / Investment Policy and Capital Structure + &' # , / Industry and Competition - ./ / Risk Factors $ :; #& / Shareholding Structure $ * / Management Structure "* / Good Corporate Governance $ " , - ! / Dividend Policy # , / Related Party Transactions " # < ! * / Management Discussion and Analysis "! *= "', / Corporate Social Responsibility

"! *= " ', / Report of the Board of Directors’ Responsibilities for the Financial Statements ' " / Report of the Audit Committee ! "" =. " & ' / Audit Report of Certified Public Accountant " / Financial Statements , ' " "" =. / Remuneration of the Auditor "& / Other References

Financial Highlights

"# $ 1 ' ' ! 2011

2010

" '" + * Restated*

2,255

Total Assets

2009

2,099

2,123 : # ' / Million Baht

2,255

2,099

2,123

1,428

1,299

1,519

827

799

604

268.79

247.87

231.37

92.13

87.61

76.92

56.61

40.21

47.57

140.67

140.58

124.83

108.15

113.04

106.93

67.84

84.80

76.18

0.14

0.21

0.22

1.00

1.00

1.00

71.31

77.76

72.41

25.24

34.21

32.93

8.34

12.09

13.46

3.12

4.02

3.37

1.60

1.67

1.29

1.73

1.63

2.52

**69.29

47.11

41.35

Total Assets

$>

Total Liabilities

Total Shareholders’ Equity 2011

2010

2009

Total Revenue

Total Shareholders’ Equity

; +) ! + %#/' 827

Selling and Administrative Expenses

799 604

- Finance Cost

> - Gross Profit

? @$ Profit before Income Tax 2011

2010

2009

Net Profit

- (' - )

Total Revenue

Earnings per Share (Baht/Share)

#; - (' - ) 268.79

Par Value (Baht/Share)

247.87 231.37

Financial Ratio Analysis - > - ( #/) Gross Profit Margin (%)

2011

2010

2009

- ( #/) Net Profit Margin (%)

- #- '% - ( #/) Return on Equity (%)

Net Profit

- #- '% - ( #/) Return on Assets (%)

84.80 76.18

67.84

- $ ( ) Current Ratio (Times)

- $> - ( ) Debt to Equity (Times) 2011

2010

2009

- ! "* # ( #/) Dividend Payout (%)

* ! "#$ %"# & ' ' ()$ Due to change of accounting policies. ** "* # ! : + - #/ 0.10 ' 10 - ; - Proposing dividend per share : at the rate of Baht 0.10 per share or 10 Satang per share. $ ! "* # : 11 D@? ; 2555 Proposed date of dividend payment : 11th May 2012 " /) " /! "E 2555 : $ 18 @ 2555 # 14.00 . Date of the 2012 Annual General Meeting of Shareholders : 18th April 2012 at 2.00 p.m. $ : " /) FG - >$ ) > 7 & % # $ 1030/4 / 4 % H - I 10120 Venue : at the Infinity Room, 7th Floor The AETAS Lumpini Hotel, 1030/4 Rama IV Road, Thungmahamek, Sathorn, Bangkok 10120.

2

2554 : ( ) ( ! )

Vision

5 ! 6$# ! / / & ! 1>X ' ' ! -! ! ! ! %' 6 * {|? ' ' ! ! / #& / / / 6$# -! # ' ,{ 2 - # ' ? ! ! 0~ '6 ! $' , 26$#Y ,#! & > '> - 26$# / ' ! 6$#Y 6 . !? &2 !4 To be the leading specialist in providing factoring and financial solutions for local businesses and entrepreneurs, committed to service excellence and creating value for shareholders, management, staff, and other stakeholders.

- # ' ' ! # & $ 6 * { |? / / ! & # ' " ' $ # >} - # $ # # & > - $' , We offer timely and inovative financial solutions to satisfy the financial needs of our clients. - # & 1 -! # ' * > ! "O' 2' $ # > !+ '+,

Mission

We emphasize strong relationships with all our clients and business partners. # ' 5! ' ? / 2& 6 $ ' /+ * $'-! We seek to be a responsible corporate citizen and are committed to high standard of corporate governance.

Annual Report 2011 : IFS Capital (Thailand) PCL

3

Message from the Chairman

?! + !

$ , "E 2554 "J "E% ; "E K " / L ) ( ' ? %#/ " ' K > - '$ > ! ; # FN ! $> "*( $> O/ $" & " # / '- -# &# $ ) - '$> # # #/ 12.8 + "E 2554 ! % $ K> %#/; +) ! + $ K> ! ; % " / L - '$> & ' ! #/ 2 "J #/ 3.5 + "E 2554

-! € 2555 " - # ! '% ! * ' , {? - # "~!3 ' & 5!6$!# -! - # ! '% -!

? " / L # / '- " O + ) %F; - + - %- P- # ' " O" - + ;

+ ? %# " O + ) %F; - ' @ # # #P #/ 0.15 ! 16,979 # ' + "E 2553 "J 16,953 # ' + "E 2554 - # #+ ' @ $ ? @$ ! 108 # ' # # #/ 4 + $ 21 ; 2554 $ / ) D@Q$ " '# - ? @$ - ' ;;#! #/ 30 "J #/ 23 + "E 2555 %#/ #/ 20 + "E 2556 %#/"E 2557 SK !/ "J " /& ) - + ; ! - ? @$ $ - # !/ #+ " / L $; + % '-# &# K> P- ! ' @ - T ' ()$ ? @$ - ' ()$? +- TAS 12 “? @$ � +) - > %- "E 2553 !K - $ " '" ' ()$+ $ $ ' #" /& ) ! ? @$ - ' ()$ $ ' @ ' " %# # # - ? @$ - ' ;;#!/ + ; +) ! ? @$ - ' ()$ $ ; > $ ! #" /& )

? @$ $ ' " %# " '" ? @$ # ' @ !/ $ # ? @$ ' 75.40 # ' %- ' " '" ? @$ # ' @ !/ $ # ? @$ ' 67.84 # ' - $ ' @ ; $ / ! %#/ ; "J % # $ $ # / '- X $ $- " / L+ "E 2554 ;O/ ' @ !K ! "* #+ - #/ 0.10 ' ( ' - ; ) - ; "J > > 47 # ' ! "E 2554 ; "J - ! "* # #/ 73 # - Q SK - $> "J - ! "* # $ - #/ 50 + "E 2553 ; %#/ ;# - & ' "* # ' @ $ ! #/ 50 # - Q ; "J - #- '%

! "* # (Dividend Yield) #/ 7 ( $ ' ' ; -# "*!! ' ) %#/- '; P ) '! $ " /) ( " /! "E 2555 SK !/! + $ K> + $ 18 @ 2555 '% & L @T ! "E 2555 +! !/F[\ - %#/ - '&- K> + - #/ 5 & " / O ! ; ? ; T%#/ ) + F[ \ - ? # ? + ;# ' F[ \ - L @T ! + "E 2555 !/ + ) %F; - %#/ ) " / ? ; ! %#/ " O + K> %#/!/ ; "J + + ' ) %F; - + " / L ' @ ; ; ; # -? O] %#/' X - ' ; - # ; " / ' # %#/ (SMEs) + " / L + $ K> ;O/ ; - / K #" /& ) %#/!/ -P $ #- '% + % -# ! @ SK ; K +! - $ $ ' @ + ;O/ ' @ ' /; O # ; ; ; ; -# ! $ $ _` $ + ' % ' @ > ' %#/ ' ' %#/ L- + '' @ -# / / # $

#$ S ;$ " / ' @ F %;""G- # (" / L ) ! ( ) ) (21 ? 2555)

4

2554 : ( ) ( ! )

/

Message from the Chairman

Dear Shareholders, 2011 was a challenging year. Domestically, Thailand faced unprecedented flooding and rising interest rates due to inflation concerns. The European sovereign debt crisis also affected markets worldwide. Net interest margin fell by 12.80% in 2011 due partly to increased competition and an increase in borrowing costs as the Bank of Thailand increased its policy rates from 2.0% to 3.5% in 2011. The nationwide flooding also affected volume slightly in the last quarter though this has picked up in December. Overall, our factoring volume declined slightly in 2011 from Baht 16,979 million in 2010 to Baht 16, 953 million in 2011, a decline of 0.15%. As a result, the Company reported a decline in net profit before tax of 4% to Baht 108 million. On 21st December 2011, the Royal Decree was published adopting a reduction in corporate income tax from 30% to 23% in 2012 and 20% in 2013 and 2014. This should benefit shareholders in future as the lower tax rates will make Thailand more competitive worldwide. However, as the Company had adopted earlier deferred tax accounting under TAS 12 “Income Tax” in 2010, a corresponding adjustment had to be made in respect of the deferred tax benefit the Company had recognized. The drop in corporate tax rate will result in a one-off charge in the tax benefit recognized earlier. If we had not recognized this tax adjustment, net profit after tax would have been Baht 75.40 million instead of Baht 67.84 million as reported. The Company still has substantial retained earnings and remains well capitalized. In view of the difficult environment in 2011 affecting the country, the Board is proposing a dividend payment of Baht 0.10 (ten satang) per share to reward shareholders. This amounts to Baht 47 million from the net profit of 2011 or a payout ratio of 73% of the net profit after provision for legal reserve as required by law. This is substantially better than the payout ratio of 50% in 2010 and in accordance with the dividend policy of the Company of not less than 50% of the net profit after provision for legal reserve. At current market price, this represents a dividend yield of more than 7% and will be subjected to the approval of the 2012 Annual General Shareholders’ Meeting proposed to be held on 18th April 2012.

For 2012, we are confident that the Thai economy will recover to grow at a rate of about 5% due mainly to the post - flood recovery efforts of the Government and the private sector. In line with this expected recovery of the Thai economy, we plan to expand both our factoring and equipment finance business in 2012, and to maintain our leading position in the factoring industry of Thailand. The Company will continue to explore other financial products and services to better serve the SMEs of Thailand. The Board remains cognizant of shareholder’s interests and would strive to maximize the returns of all shareholders and satisfy expectations of its other stakeholders. On behalf of the Board of Directors, I wish to express my gratitude to all shareholders, clients, business partners, banks, and all other stakeholders for your support to the Company. I would also like to extend my gratitude to the management and staff of the Company for their continuing support and contributions to the Company over the years.

Mr. Lee Soon Kie Chairman IFS Capital (Thailand) PCL (21st February 2012)

Annual Report 2011 : IFS Capital (Thailand) PCL

5

Board of Directors and Management Team

{ { 6$#

07

02

04 05

1. . ? .

Mr. Lee Soon Kie 2. * . $ )

Dr. Thamnoon Ananthothai 3. & & #

Ms. Lim Mui Ling 4. & . = &

Mr. Suvait Theeravachirakul 5. '

Mr. Niphat Chamroonrat 6. '

Mr. Tan Ley Yen 7. & @ +

Mr. Niwat Kanjanaphoomin

6

01

03

06

" / Chairman of the Board " / / %#/" / - ! ' Deputy Chairman, Independent Director and the Chairman of the Audit Committee Director / %#/ - ! ' Independent Director and Member of the Audit Committee Director %#/" / ! $ ' Director and CEO / %#/ - ! ' Independent Director and Member of the Audit Committee

2554 : ( ) ( ! )

08 11 14

10 13 12

09

8. '+ '' <

Mr. Guntapon Kittisiriprasert 9. B ?,)#

Ms. Kwanjai Sae-Lai 10. F &

Mr. Paknam Sarakul 11. H . =

Mrs. Pensri Pettong 12. & =

Mr. Yutthachai Siriphanpong 13. % ; )

Ms. Nararak Kongsiriruanglai 14. & =

Mr. Suvichan Charoenponpoj

" / ! $ _` %#/' ()$ Chief Financial Officer ! " _` "b ' - General Manager-Operations ! " _` # ;

General Manager-Client Relations ) ! " _` %#/' ()$ Assistant General Manager-Finance & Accounts ) ! " _` c ) , ' ;;#%#/ Assistant General Manager-Client Review, Human Resources and Adminstration ! " _` c ! Deputy General Manager-Business Development ) ! " _` c ! Assistant General Manager-Business Development

Annual Report 2011 : IFS Capital (Thailand) PCL

7

Organization Chart

. ' # ' ' ?

Board of Directors

-J ==; L=4=NCK1

Compensation & Nomination Committee -J ==; L= ME3. L/G4X13 X?JD==EL

Audit Committee -J ==; L= /=A#DG4

Risk Management Committee

Internal Audit

-J ==; L= 4=NEL= AL;WDO_<"

6S /=A#DG4:L<Z3

CEO Mr. Tan Ley Yen 5=J2L3W# LE3 L1O_4=NEL= R-/K3 W? W<3

Business Development Ms. Nararak Kongsiriruanglai Deputy GM

Client Relations Mr. Paknam Sarakul GM

Finance & Accounts Mr. Guntapon Kittisiriprasert CFO

7 L<8K,3L2R= N# R-3=L=K C "BN=NW=QG"[? =G"6S #K. L=1KĈA[5

7 L<?S LDK;8K32 R-5L 3đM DL=J R? 6S #K. L=1KĈA[5

7 L< L=W"N3X?J4Kt%O R- K3/:- N//NBN=N5=JWD=N* 5=J2L3W# LE3 L1O_

Business Development Mr. Suvichan Charoenponpoj AGM

Finance & Accounts Mrs. Pensri Pettong AGM

7 L<8K,3L2R= N# R-DRAN%Lt W#=Nt8=8#3 6S % A<6S #K. L=1KĈA[5

7 L< L=W"N3X?J4Kt%O R-W8^tB=O W8%=1G" 6S % A<6S #K. L=1KĈA[5

Client Review, HR & Admin. Mr. Yutthachai Siriphanpong AGM

7 L<8K,3LDN3W%Q_G 4R ?X?J2R= L= R-<R12%K< BN=N8==-8"B 6S % A<6S #K. L=1KĈA[5

8

2554 : ( ) ( ! )

Operations Ms. Kwanjai Sae-Lai, GM

7L <5)4N/K NL= R At K Z# X& [E? 6# S.K L=1A K[5

Nature of Business

{ +, ' @ F %;""G- # (" / L ) ! ( ) ) (“IFS�) " / ' ! # 4 " / ? $>

1. " =;/ "$ . # ; =;/ I ' J : "J + ' ) / / > "J $ + ! ' " / ' ' @ !/ 'S > # $ > ; $ ! ; ? + " / L %#// - " / L! # ; SK "J ; ' & - +) # ; " / %- !/& $ + $> ; # ; + ' ' @ "J # " / ' @ + ' ' " / ' # %#/ $ - " $ + ! ! %#/ + ? ;# + ' K>

2. " =;/ . ? J + =, : "J + ' ) % " / ' $ - # + S > " / ? /%#/ ; ! $ +) + - -# ! ; $ +) + ;# ; %#/ +) @- & ' @ "J ! ! ! - $ ) - j + "J ' @ ) $ ; '; %#/+) " /& ) ! %#/ $ $S %S ' @ $ ) ) /; ) - & " / / # ) 3-5 "E ) /; ) "J %#/ + ( ; - '$> # - > $> ) !/' # (( ; ' $ _` $ ; ' (( ) %#/ - (( )

$ S > S $ ) + ; $ - # O ((

3. " =;/ =, ?;F : "J + ' ) % " / ' $ - # + S > " / ? /%#/ ; ! $ +) + - -# ! ; $ +) + ;# ; %#/ +) @-

& ' @ "J ! ! ! - $ ) S > - j+ "J ' @ ) S > $ ; '; %#/ +) " /& ) ! %#/ $ $ S %S ' @ $ ) S > ) /; ) S > - & " / # ) 2-5 "E ) /; ) "J ; - '$> ; $ > $> ) S > !/' # (( ; ' $ _` $ ; ' %#/ - (( + ) S > !/& j " ) S >

4. " ;/ Q: "J + ' - X $ ' @ ! + '# ; - + # ; +) ' '' @ ; ' ! ) • Confirming LC/TR : "J ' $ + ' # ; %F; - "*!! ' $ "J $ $ - # S > ; ! - " / L ! "J - ' + # - ; & $# ; $ +) ' LC/TR (Letter of Credit / Trust Receipt) '' @ & + ( - +) # " / # ; %! ; " / ; ! $ / +) ' '' @ ' @ !/ "J - - ' ; + LC TR + ' # ; & +) $' @ $ ' ; + LC/TR • Inventory Financing : "J ' ) "%'' K $ # ; /% ! ; ; ;# & ; ; ;# - $ ; -# $ ) ! %#/ $ S> ; $ % %- ' ; # ; ' ; "%# ' @ !/ ') /; ; & - ' S > • Floor Plan : "J ) + % - % ! - $ '%- - > "J + ! - $ - X (Authorized Dealership) "J ' ) ' +) "J % # + ! S > -

! ? ;# + % ! ! -

+ ) # ; !/- % ; "J !

+ ' @ + +) ' ) %#/# ; !/) / ; ' @ - ! - >

Annual Report 2011 : IFS Capital (Thailand) PCL

9

Nature of Business /

“ Q ' ƒ / 5 ! !~ ' -! 6$#! - # ! >} # > { ? . !#! - # SMEs�

• Contract Financing: "J # -? O] ) $ ) " / ' $ $ +' S > (( S > (( + ' $ % ! # $> ; ) > $ %- +) S > - '+ # ; - $ ' # ; (( #

) '' @ & ' @ !/) / # " %#/ # ! # ; ' ; ' %# # ; !/ +'%! $> +' + % ' @ + ' @ " ') / ! # $> ; - # $ ; ' - " %#/!/ $ ') /! # $> ; > ') /# $ ' @ + ' # ; " $>%# ; +) ! - X $ K>

R # " & ' @ - > "N $ !/ "J K + ' @ + ' ) ; %#/ O ) & + ' '# ; $ "J " / ' # %#/ (SMEs) ' @ $% $ !/ "G + ;-+ ? ; # ? ;-/ ? ;-/ $ %#/? ; %#/ ! !" / ? X ) ) %F; - ' ) #$ S %#/ ) ) S > %#/ $ !/ ) $ $ ' ! $ ; ';# + ' %''; ' ! + K> + ;-

• Block Discounting: "J # -? O] ) $ + /% $ % ! & (( ; %#/' %'' ) S > %'' ) / (( ) $ $ ) /%'' "J X + % ' @ ' ' ) /# "J + ; > % ') /# ; "J #/ > %# %- !/- # & (( !/ $ 1 – 3 "E

10

2554 : ( ) ( ! )

Nature of Business /

The Company’s objective is to be a leader in the commercial finance business by focusing on SMEs.

IFS Capital (Thailand) Public Company Limited (“IFS�) provides 4 main lines of business:

1. Factoring Service:

4. Other services:

A short-term loan providing working capital to entrepreneurs. The Company will purchase accounts receiveable, including the rights to claim, from the local and/ or export sales of clients without the need of security. The Company focuses on providing services to the SMEs who are in need of working capital to improve their liquidity or to expand their business.

are additional services provided to the Company’s clients such as: • Confirming LC/TR: An additional service for existing factoring clients to import raw materials or goods, usually without requiring additional collateral. When the Company’s clients request for the service of LC/TR (Letter of Credit / Trust Receipt), the Company will liase with the banks to issue LC or TR on behalf of the clients, utilizing the Company’s credit facilities with the banks.

2. Leasing Service: A service to businesses who require capital investment on industrial vehicles and machines, tools used for relocation of goods, vessels and vehicles used in agricultural activities. The Company will procure the assets from distributors as per the clients’ requirements. The legal rights of the asset belongs to the Company but the client has the right to possess and utilize the leased assets, be responsible for the repair and maintenance of the leased assets and pay the leasing rental as agreed. Normally, the lease contract is from 3-5 years and the leasing rental is paid on a monthly basis based on a floating rate. The client cannot solely cancel the lease contract by himself prior to the completion of the contract. Upon the completion of the contract, the client has the right to purchase the assets at the agreed price which has been stated since the contract date.

3. Hire Purchase Service: A service similar to that of leasing except that interest is on a fixed rate basis, the contract period is from 2-5 years, and the legal rights of the asset will be transferred to the client at the end of the contract.

• Inventory Financing: Another form of credit service which enables clients to advance cash from their inventory on the condition that the inventory must have a clear market price and definite purchasers and the products have not yet been delivered. Once the products are delivered, the Company will collect payment directly from the purchasers. • Floor Plan: A service provided to auto dealers to provide funding for purchasing of cars for distribution. The clients must possess authorized dealership and submit documents on the right of ownership to the Company. Monies are repayable after sales of the cars. • Contract Financing: A service to provide facility when clients have purchase order, firm contracts (sales/ service) but lack of funds to execute order. Cash advances could be made for clients to purchase raw materials to manufacturing to shipment of goods. Clients can submit contracts for this facility and

Annual Report 2011 : IFS Capital (Thailand) PCL

11

Nature of Business /

the Company will provide advance payment to pay their suppliers. Upon completion of the contract, clients will submit invoices and delivery notes on their customers to the Company for factoring. • Block Discounting: A convenient method of financing a trader’s hire purchase, credit sale or rental agreements with monthly repayment basis and with a contract period of 1-3 years. The Company acquires the trader’s rights under the agreements at a discounted valuation for a lump sum of cash advancement and the gross value will be repayable by equal monthly installments. The valuation of discounted agreements will be subject to negotiation.

Objective of Business Operations The Company’s objective is to be a leader in the commercial finance business by focusing on SMEs. The Company has plans to open branches in the Central, Eastern, North Eastern, and Northern parts of Thailand in the future. The Company plans to increase revenues from export factoring, leasing and hire purchase services. In addition, the Company is planning to widen its range of services so as to become a one-stop financial services centre for its clients.

12

2554 : ( ) ( ! )

Milestones

& & 5! " '

' @ F %;""G- # (" / L ) ! ( ) ) - > K> $ 21 $ ; 2534 ! / '$ 50 # ' & $)

- > ' @ - ) % # %F; - ! SK "J / ; L $ ! ( ) ) (“ . L $ �) #/ 45 %#/' @ F %;""G- # ! ( ;&" )1 (“IFS (Singapore)�) #/ 40 " / ' ! ) '& $ ) %F; - "E 2550 ' @ $ "#$ %"# &; & # IFS (Singapore) S > ' @ ! . L $ %#/ "#$ ) "J ' @ F %;""G- # (" / L ) ! - $ 18 @ 2550 ' @ ! / '$ %" ? "J ' @ ) %#/ ! / '$ %#/ $ ) /%# "J 350 # ' "E 2552-2553 ' @ "#$ ? ' @ ! ' @ () - "J ' @ - & '+' ( -" / ' ! (1) ) %F; - %#/ (2) ) %''#$ S %#/ ) ) S > ; " / ? /%#/ ; ! $ +) + - ; $ +) + ;# ; %#/ +) @- ' '' + ' @ ! / '$ '-# # % " / L + $ 10 ; 2553 ' ( - " /) ) 120 # + ' @ $ ! / '$ $ $ ) /%# ! 350 # ' "J 470 # ' & $ + ( ; # IFS (Singapore) #/ 73.13

./ @ ./ " %

: & :

2534

' @ ! / '$ %#/ $ ) /%# ! 1 # ' "J 50 # ' & / . L $ #/ 45 %#/ IFS (Singapore) #/ 40 ' @ " / ' ! ) #$ S " / ? (( ) %#/ ) ) S >

2537

' @ ) /%# "J 100 # '

2538 2543

1

% :

: & : ' @ # ! 100 # ' # 50 # ' & # #; $- ! 10 ' # 5 ' # / $ K> ! D- L @T !+ "E 2540/2541

' @ F %;""G- # ! ( ;&" ) ) ' @ - ) % # %F; - ( ;&" ) ! SK ! / '$ + " / L ;&" - > %- "E 2530 %#/ "J ' @ ! / '$ + -# # ;&" + "E 2536 # ' @ IFS (Singapore) "J # $ )$ ) (+ ! % ' ) " / ? - X ) (%F; - #$ S ) S > ) " / ) (Credit Insurance) (Bonds and Guarantees) Structured Finance %#/ ! # (Venture Capital) & # ' @ IFS (Singapore) " / ' " # ' @ %#/ $ !+ # " / L % ;&" # S$ & $ S$ %#/ƒ O $ 31 ; 2553 ' @ $ ) / %# ' 88.03 # ## ;&" ; "J 2,073.83 # ' ( - %# "#$ 23.5577 ' - 1 ## ;&" # O $ 30 ; 2553) #/ $ # IFS (Singapore) $ www.ifscapital.com.sg

Annual Report 2011 : IFS Capital (Thailand) PCL

13

Milestones /

./ @ ./ " %

& + :

2544

' @ ) /%# $ 200 # ' "J 250 # ' + % . L $ %#/ IFS (Singapore)

:

2547 2550

' @ F %;""G- # &ƒ# > (" / L ) ! (“ F &ƒ# > �)2 S > ' @ ! . L $ %#/! X ; "J #/ 49.20 %#/' @ # ' + ' ) #$ S %#/ ) ) S > ? # . L $ "J

& + : ' @ "#$ ) "J ' @ F %;""G- # (" / L ) !

% : ' @ %" ? ! ' @ ! "J ' @ ) %#/

2551

% : ' @ + ' ) #$ S " / ? (( ) %#/ ) ) S > ! . L $ SK "J + ( $ & ' + ' @ + ; " / ' !S> S

:

' @ ' ; P ) '& # ! ;O/ " / ' ! ; - + ' @ " / ' ! (1) ) %F; - %#/ (2) ) %''#$ S %#/ ) ) S > ; " / ? ; ! %#/ ; +) + - / % '' $ $? / - (( + ) %''#$ S %#/+ ) S > %#/' @ ' +' ( -+ $ 3 Q ; 2552

) /%# $ 100 # ' "J 350 # '

:

2552

' @ + ' ) #$ S %#/ ) ) S > % '' +

% : # IFS (Singapore) S > F &ƒ# > ! ; + # IFS (Singapore) #/ 100 + F &ƒ# > + # IFS (Singapore) "J + ' @ #/ 98.2 Z : ' @ "#$ #; $- (! #/ 5 ' "J #/ 1 '

2553

# : ' @ ! / '$ '-# # % " / L ' -

" /) ) ! 120 # + ' @ $ ! / '$ %#/) / %# "J 470 # ' & $ + ( ; # IFS (Singapore) #/ 73.13 %#/' @ " / ' ! ) %''#$ S %#/ ) ) S > ; " / ? /%#/ ; ! $ + ) + - ; $ +) + ;# ; %#/ +) + @- + ' '' +

: ' @ ; P ) ' $ ; > ! ;O/ " / ' ! ; - ( -" / ' !' + ) %''#$ S %#/+ ) S > ; " / ? /%#/ ; ! $ +) + - ; $ +) + ;# ; %#/ +) @- ' '' + %#/' @ ' +' ( -+ $ 6 ; 2553

2 ' @ F %;""G- # &ƒ# > (" / L ) ! ! / '$ "J ' @ ! + "E 2549 & "J / ' @ F %;""G- # ! ( ;&" ) + #/ 45 %#/ ! ( - %#/' - + #/ 55 & $ - " / ; "J ' @ # "*!! ' ; O ! ( - %#/' - "J + ' @ F %;""G- # &ƒ# > (" / L ) ! %# %#/ # ' @ F %;""G- # ! ( ;&" ) + #/ 100

14

2554 : ( ) ( ! )

Milestones /

IFS Capital (Thailand) Public Company Limited was incorporated on March 21, 1991 in the name of Ayudhya International Factors Co., Ltd., a jointventure between Bank of Ayudhaya Public Company Limited (“BAY�) with 45% of shares and IFS Capital Limited1 (“IFS (Singapore)�) with 40% of shares. Principal activity was the provision of factoring services. In 2007, the Company’s shareholdering was changed. The IFS Group of Singapore bought over the Company’s shares from BAY and from minority shareholders totalling 49.2%, and changed the Company’s name to IFS Capital (Thailand) Co., Ltd. In April 2007, the Company was converted to become a public company limited and increased its registered and paid up capital to Baht 350 million. In 2009-2010, the Company’s status was changed from that of a Thai company to a foreign company. It obtained licenses to provide (1) factoring services and (2) the leasing and the hire purchase services for industrial vehicles and machines, tools used for the relocation of goods, vessels and vehicles used in agricultural activities. The Company was listed on the Stock Exchange of Thailand on 10th August 2010 and issued an additional 120 million common stocks for its public offering which resulted in the increase of paid-up capital from Baht 350 million to Baht 470 million. The major shareholder is the IFS Group of Singapore with total shareholding of 73.13%.

Summary of the important milestones of the Company

June:

1991

The Company increased its paid-up capital from Baht 1 million to Baht 50 million through a jointinvestment between Bank of Ayudhya and IFS (Singapore) with 45% and 40% shareholding respectively. The Company started its leasing and hire purchase business.

1

1994

April: The Company increased its paid-up capital to Baht 100 million.

1995 2000

June: The Company decreased its capital from Baht 100 million to Baht 50 million by decreasing its par value from Baht 10 to Baht 5 to eliminate the accumulated loss caused by the economic crisis of 1997/1998.

IFS Capital Limited was originally known as International Factors (Singapore) Limited which was registered in Singapore since 1987 and listed on the Singapore Stock Exchange since 1993. IFS (Singapore) Group specializes in various kind of financial services, such as factoring, leasing and hire purchase, credit insurance, bonds and guarantees, structured finance, and venture capital. The IFS (Singapore) Group consists of several subsidiaries and operates its business in several countries, namely, Singapore, Thailand, Malaysia, Indonesia, and Hong Kong. As of 31st December 2010, IFS (Singapore)’s paid-up capital was SGD 88.03 million or Baht 2,073.83 million (the exchange rate as of 30th December 2010 was Baht 23.5577 per SGD 1). Details of IFS (Singapore) can be found at www.ifscapthai.com.sg.

Annual Report 2011 : IFS Capital (Thailand) PCL

15

Milestone/ / Milestones

Summary of the important milestones of the Company

February:

2001

The Company increased its paid-up capital by Baht 200 million to Baht 250 million with shares issued to Bank of Ayudhya and IFS (Singapore).

January:

2004 2007

IFS Capital Holdings (Thailand) Ltd. (“IFS Holdings�)2 purchased shares of the Company from the Bank of Ayudhya and the other minority shareholders totalling 49.20%. The Company then recommenced its leasing and hire purchase business when the Bank of Ayudhya ceased to be its shareholder.

February: The Company changed its name to IFS Capital (Thailand) Co., Ltd.

2008

April: The Company ceased to provide its leasing and hire purchase services due to the duplication of business with a subsidiary of its major shareholder, Bank of Ayudhya.

December:

The Company received an in-principle approval from the Foreign Business Committee to operate the business of (1) factoring and (2) leasing and hire purchase services for machinery and industrial equipment to existing clients only. The certificate was officially received on 3rd July 2009.

April: The Company changed its status from “limited company� to “public company limited� and increased its paid-up capital by Baht 100 million to Baht 350 million.

January:

2009

The Company ceased to provide its leasing and hire purchase services to new clients.

April: IFS (Singapore) Group bought over all the shares of IFS Holdings, resulting in IFS Holdings becoming a wholly owned subsidiary of IFS (Singapore), and IFS (Singapore) Group holding 98.2% of shares in the Company. November: The Company changed its par value of common shares from Baht 5 per share to Baht 1 per share.

2010

August:

The Company was listed on the Stock Exchange of Thailand and issued 120 million common stocks at its initial public offering leading to an increase of paid-up capital to Baht 470 million. The major shareholder is IFS (Singapore) Group which holds altogether 73.13% of shares. The Company also started to provide leasing and hire purchase services for industrial vehicles and machineries, tools used for the relocation of goods, vessels and vehicles used in agricultural activities to new clients.

December: The Company applied to the Foreign Business Committee to provide leasing and hire purchase services for industrial vehicles and machineries, tools used for the relocation of goods, vessels and vehicles used in agricultural activities to new clients, and approval was received on 6th August 2010.

2

16

IFS Capital Holdings (Thailand) Ltd., was registered as a limited company in 2006, as a joint-venture investment company between IFS (Singapore) and Mr. Niphat Chamroonrat and his sons with 45% and 55% of shares respectively. Mr. Niphat and his sons had since sold their shares, and IFS (Singapore) Group now owns 100% of IFS Capital Holdings (Thailand) Ltd.

2554 : ( ) ( ! )

Revenue Structure

. ' # ' #

&; ' @ + "E 2552 – 2554 Revenue Structure of the Company in 2009-2011

! S > $

2552

2553

2554

2009

2010

2011

Million (Baht)

%

Million (Baht)

%

Million (Baht)

%

148.75

64.29

166.27

67.08

173.43

64.52

4.98

2.15

2.59

1.05

1.74

0.65

18.67

8.07

11.92

4.81

22.12

8.23

48.04

20.76

58.22

23.49

56.93

21.18

10.93

4.73

8.86

3.57

14.58

5.42

231.37

100.00

247.87

100.00

268.79

100.00

Factoring income

! + ) S > Hire purchase income

! (( ) Finance lease income

; $ %#/' ! S > $ /1 Factoring commission and service fees /1

/2 Other income

Total Revenues

&

/1

/2

Remarks

/1

/2

; $ %#/' "J ; $ ! '& $ ; $ $ > K ' ! +'%! ' ()$# $ > ; ' $ P' %#/ ' $> ; " / ' ; $ "G %#/ ; ) ; ( /"E 2552) '$> " '%#/ '$> '# ; ; ) / %#/ $> ( $ - P' + ? # "J -

The revenue from fees and services are from the transfer of the rights to claim. The fees include the provision of credit checking, collection, and accounts receivable management services. Other income include commitment fee paid on acceptance of credit facilities. Income from office rental (2009 only), contractual penalty and interest on overdue payment of clients and recovery of non-performing loan, etc.

Annual Report 2011 : IFS Capital (Thailand) PCL

17

Investment Policy and Capital Structure

!. ' ,! . ' # ' ' ! ,!

"*!! ' ' @ $ # + ' @ %#// ' @ P-

' @ ! ! O # + ' @ %#// ' @ + / ' ? / ! & ' @ $ & ' # + ' @ %#// ' @ + ! $ > %#/ > " /& ) - ! ' @ "J ! $ + - $ $% & ! ( - '&-+ ;- > $> ' @ !/; K K - #- '% $ '! # " /& ) - ' @ "J ; ( & ' @ !/; '; %# - % ' @ "J ' + ' @ %#// ' @ > X & # + ' @ # !/- ! O - ! ;O/ ' @ %#// %#// + O$ $ "J $ $ & !/- ! O - ! ;O/ - ! ' $ > - b O] $ $ ' ; '+)

$ &

At present, the Company has no investment in any subsidiary and/ or affiliated company. However, the Company may consider investing in subsidiary and/ or affiliated company in the future. It is the Company’s policy to invest in businesses or industries which provide support or benefits to the Company’s existing business or has growth potential. The Company focuses on the return on investment and benefits to the Company’s shareholders. The Company’s representatives will be assigned as Directors to supervise or co-manage the subsidiary and/ or affiliated company. The investment, if any, shall be approved by the Board of Directors and/ or shareholders and/ or, in case of the related party transaction, the Audit Committee. The related party regulations shall be adhered to accordingly.

Capital Structure

18

! / '$ %#/ ) /%# ' @ O $ 31 ; 2554

$ $> ! / '$ ) /%# (

#; $ - #/

: : : :

470,000,000 ' 470,000,000 ' 470,000,000 1 '

Registered and Paid-Up Capital of the Company as at 31st December 2011 are as follow: Registered Capital Paid-Up Capital Ordinary Shares Par Value

2554 : ( ) ( ! )

: : : :

Baht 470,000,000 Baht 470,000,000 470,000,000 Shares Baht 1 per share

Industry and Competition

* & , "2'" !

14.25% Z3GK" >C

5.60%

Z3W<G=;K3

2.56% Z3tO_5R 3 Z3t

1.23% Z35=JW1B[1<

3.74% Z3DN" Y5=

5.05% Z3GGDW/=W?O<

& =;/ I ' J

& =;/ . ? J =;/ =, ?;F

! ) %F; -

$ % K> + ) $ "E $ ! $ ; # % " / ' !" / ? $> K> ; % ; ( ' @ + "*!! ' % ; ' @ - X ; $ + ' ! ) %F; - ' @ ; + ' ' " / ' # %#/ (SMEs) $ $; - $ ? ;# %#/ ! %- $ ! + K ) ! ; ! ; - # " / ; %#/ $ $ $" / ' O ; " $ ' ;& &# $ $ + ' /'' # + "%'' e-Factoring " / ' '; +!+ %#/ / / + ' ; $ "J /'' ' @ !K $; ) $ !/ @ ; "J K + ' @ + + ' ) %F; -

) $ ' ! ) %F; - "*!! % "J "*!! $ $;

; ( K> + ) $ "E $ & / # ; "# ) #$ S$ %#/ ) ) S > K> > $> ' @ !/ ; " ? ; - SK $ % $ ? ; ' &?; %#/ ; $ #

# ; "N "J " / ' # %#/ (SMEs) SMEs $ " / O #/ 98 ' @ $ ! / '$ + " / L $! K ' 3 # % !K ' - '&- ! ) ' ; ! %#/ " O +$ ) + - + " / L $% & $ + %#/- $

! # P' S- International Factors Group (www.ifgroup.com) #; " O ; !%F; - (Factoring Volume) + " / L + "E 2551 2552 %#/ 2553 ' 117,758 # ' 64,973 # ' %#/ 110,315 # ' ("E 2552 # # ! D- L @T ! &# %#/ # / ' # - L @T ! ) - # ' %#/ $ -

#; - GDP (GDP Penetration) "E 2553 ' #/ 1.23 # $> $ ' '" / L+ % ' & " ) D@ %#/ SK $ - GDP Penetration $ #/ 14.25 %#/ 5.60 - # ' " / L - #$ ($ " ` %#/ ;&"

$ - GDP Penetration $ #/ 5.05 2.56 %#/ 3.74 - # ' & ; #$ GDP Penetration &# $ #/ 3.48 !K ' - '&- ! ) %F; - + " / L $% & $ + %#/- $

K % ' @ !/ "J + ' ) + %- ' @ ; " / ' ; P!+ c + ' ) ' ; ! %#/ " O

? # ! $ ' @ # ' + ' + ! " / ? $> $ ; > + ; 2553 ' @ !/ ; ) $ ' @ + -# %#/ c ; ! ! ; ! %#/ " O % / +) ' ) ! ' @ # "N ' @ > + ! ) %F; - %#/ ) ' ; ! %#/ " O ; SMEs ' @ !K ) > " / ? + '# ; & /# ; $ +) ' ) " / ? + " / ? K '' @ %#/ $; - +) ) $ " / ? K (Cross-Selling) SK ' "J ! % P %#/ $ ;

+ ' $ K> + '# ; ' @

Annual Report 2011 : IFS Capital (Thailand) PCL

19

Industry and Competition / !

Factoring Business Competition in the factoring business has become more intense in recent years as more banks enter the business. The major competitors of the Company are now banks or subsidiaries of banks who offer factoring services. The Company will continue to focus on the SMEs who are in need of working capital to improve their cashflow or to expand their business but have restricted access to the credit facilities of banks due to the collateral requirement of banks. However, with its experienced staff, technological advantage through e-factoring services and prudent risk management system, the Company is confident of maintaining its leadership position in the industry. THE WORLD’S AVERAGE WAS 3.48%

According to the publication of the International Factors Group (www. ifgroup.com), the volume of factoring business in Thailand for the year 2008, 2009, and 2010 was Baht 117,758 million, Baht 64,973 million and Baht 110,315 million respectively (the decline in 2009 was due to the global economic crisis and its effects on the Thai economy). In terms of GDP penetration rate, it was only 1.23% in 2010, while that of the Euro Zone such as the UK and Germany was 14.25 % and 5.60 % respectively. Other countries such as Australia, Japan and Singapore was 5.05%, 2.56 % and 3.74% respectively; and the World’s average was 3.48%. Thus, there is still ample room for the factoring business to grow in Thailand.

14.25% IN UK

5.60% IN GERMANY

2.56% IN JAPAN

1.23% IN THAILAND

3.74% IN SINGAPORE

5.05% IN AUSTRALIA

Equipment Finance Business (Leasing / Hire Purchase) Like factoring, competition in the leasing and hire purchase business has become more intense in recent years as more banks enter the business. The Company will continue to focus on the industrial sector where there is lesser competition than the consumer sector, and the target group will continue to be the SMEs. Since SMEs account for about 98% of all registered companies in Thailand, and there are almost 3 million SMEs, there is still ample room for the industrial equipment finance business to grow in Thailand. The Company has been quite successful in developing its equipment finance business despite being a relatively new player in the market since it re-launched this business only in August 2010. The Company will continue to build up its name in the market and to develop a network of equipment dealers to refer business to the Company. Since the target group of both factoring and equipment finance is the SMEs, the ability to cross-sell these 2 services is one of the strengths of the Company.

20

2554 : ( ) ( ! )

Risk Factors

Š & / '

- ./ ./ * dF , ! "', * " % B ' ?d/ " % )* ' # :d " # " & ./ * , B# * + "*

! # @O/ ! %F; - "J + ) / / > $ # j; > " / "J '& $ + $ > ; ; $ ) !K ! ; O? # $ > ; %#/# ; K ; O? ; %#/' $ # ; '+ '# $> ; ; '

$"*( # $> ; !"b ' ; ' %#/ ) / $> - ; > X ! "J O$ # $ $ > ; $"( * ) / $> ; > %#/# ; P ! $; ) / $%> # $ > ; - (( ' @ $ ' ! ) - > O] %#/ > - + - ! ' > # ; %#/# $> ; - ) "J - $ ' @ c - ! " / ' O + ! O] $ #

$ $>

$ # ; + $ "! O] # !/- %! + ;O/ ' @ ' - - - X # - ' @ !K ) + ; O? # ; %#/# $> ;

1.1

! "

Credit Scoring +) ; / # ; + $ ) %#/ ; / # $> ; $ # ; - & $ # $ +) ; / + Credit Scoring ) / / # ! " / - / ' " / - ) / $> ' ; + ) / $> % & - "J -

1.2

"# ) + ' %- #/? ; ! (Industry Limit) & !/- #/ 20 $>; ; > # ;

1.3

O] +) ) $ ' - # ; %- #/ & +) # ; + K !/ #/ 10 $ # ; > +)

1.4

O] + + '# ; %- #/ & $ # $> + K - #/ 30 ' @

1.5

O$ $ "J # ; ' @ $ ' ## ; %#/# $ > ; (Credit Review) "J " /! "E#/; > ' O$ ! "E#/ 2 ; > - %# %- ' @ !/ ! O K ; ! "J

1.6

- ! ' #! L #% ' % $; $FN '; O$ + > )P; #! L ## #/# # ! $> $ - ! ' #! ; -' & $ '" / - ! & # ; "J #! ; -' & " / ' ! O

'$> "J - # ' @ %" - ? / - '$> + -# %#/ $ #- - '$> $ ; '# ; "#$ %"# - '$ > ! # / '- # ' @ - >$ ' @ !K $ & ' %#/% ' ; $ ! ; - '$> # ; ) $ ' @ + % # ; "J ) %F; - SK "J ) / / > %#/; ; $ ) / ' > - %''# - SK ;# '- ' @ $ ! / / > $ $ - '$> # - - '$> + -# " '- K> ' @ " ' ; $ ) / ' > - $ $ P'! # ; + - $ K> -

- '$> -# ' ) #$ S ' @ ; - '$> %''# - ) $ ) ) S > ' @ ; - '$> '# ; ) ) S > "J - '$ > ; $ %- ' @ $ ) ) S > "J ! > ' @ ) ; $ # !/ # / '- #

Annual Report 2011 : IFS Capital (Thailand) PCL

21

Risk Factors / " # $%#

3

# $

; $ ? ;# ! ' @ / / > "J + ( $ " / ? - † (( +) (P/N) SK $ / / # - > %- 1 K 6 ' @ $; $ O$ ! $> ' ! $ + ) /; / / # O$ ! $> ' - - † (( +) (( ; ' + ' @ !/- ) /; SK !/ # / '- /% ' @ "*!! ; $ # # P!! - " $>

4

% %! !

' @ ! $; $ ! ; % + K % " / ' ! ) %F; - %#/ ) # S ! "J - $+' ( -+ " / ' ! %#/ ? +- ' %# ; % " / L !K !/ $; $ $ % + !/ " / ' ! & %- !" / ? $> ! "J - $ %#/ $- $ % + -# > ! ; O ) ' @ ; O ) %# " / ' + !K

3.1 ' @ + ( "J ) %F; - SK $ + P' $> K % !/ $ " / ' + $ "J ; K> %- P $ ! + & #$ " / O 45-60 SK ;# ' +) " / ? " / ' O ; + + ' %#/ - ' / / > "J $ ; - # ; $ ! $>' @ "J ' @ % % + " / L $ ;& &# $ $ + ' '# ; /'' 3.2 K % ) #$ S %#/ ) ) S > !/ "J + ) " / ? / / # + "%'' e-Factoring " # ) /; 3-5 "E ' @ $ & ' ' $>+ ; # +) / / %#/ #$ #$ +) 5 & ' $ ( ! ) + - ( / / / > ' ! ) # S %#/ ) ) S > O $ 9 $ ; 2555 # ' @ IFS (Singapore) "J + ( + 3.3 ' @ " / ' ! + ) %F; - 20 "E $; ' @ ; "J #/ 73.13 SK #/ 50 ! $ ' ! $> ' - %#/ $" / - $! %# > ' @ + ; $ ' @ !/ "J - + $ - +) $ + ( $ ) / $> - (( $ -# " /) + $ Q ' ; ' ' @ + 3.4 O$ ! $> ' $ ) /; ' @ - ' $ 3 + 4 $ " /) > +) ) 10 # $ ( ;&" SK "J + ' ;/% $ - ! '%#/ # ' > $> ! ' @ F %;""G- # ! ( ;&" ) (“IFS ! O ! &; ! ' @ " / ' ;O/ (Singapore)�) $ ' @ ;O/ - ! ' ;O/ ; - '% %#/ %#/;O/ ' ; $ !/ P ' @ $ &; 3.5 ! $> ' @ $ !/ / $ X! -# ' & ' ;;# $ $; ; + ! %#/ # ; $ ? ;# > $> K> '; $ ' - ! $ ;O/ ) - X ) ! / ' O ? / %#/&" + %#/+ O$ $ $ & ' + ( %#/ $ !; '; + ! K ' ;;# $ ! $; % # " /& ) ' ;;# # !/ $ $ + - > X

22

2554 : ( ) ( ! )

Risk Factors / " # $%#

The Company places important emphasis on risk factors which could affect the Company’s future operations by establishing effective risk management and control as follows:

Credit Risk The Company’s factoring business is to provide short term unsecured loans through the purchase of accounts receivable. Credit risk is therefore dependent on the quality of the accounts receiveable and clients, including the quality of products and services delivered to buyers by clients. Low quality products and services might be rejected and remained unpaid. The buyers with financial problem might also default on payments and the clients could not repay as agreed. Therefore, the Company has established policies and procedures to carefully examine both clients and buyers prior to loan approval. The following are the Company’s policy guidelines which are being constantly reviewed and improved upon to manage its business operations: 1.1 Credit scoring aims to analyze new clients and the buyers on their business operations, profiles of shareholders and management, debt payment records, financial statements, industry trend, etc. 1.2 Maximum exposure on each industry (Industry Limits) shall not exceed 20% of total outstanding portfolio. 1.3 Maximum exposure on a single client shall not exceed 10% of the total portfolio. 1.4 Maximum credit limit granted to each debtor (buyer) shall not exceed 30% of the Company’s shareholders’ funds. 1.5 Credit review of existing clients shall be done regularly and at least once annually.

1.6 The Company must check with the Civil Court for possible lawsuit against both clients and buyers, including checking with the Central Bankruptcy Court; and the National Credit Bureau relating to the clients’ repayment record with other financial institutions. Any deviation to the above shall be reported to the Board of Directors for information and/or approval.

Interest Rate Risk Borrowing interest rate, the main cost of the Company, fluctuates with market conditions and has an effect on the Company’s lending interest rate to its Clients. Changes in interest rate will also affect the Company’s operating results. Therefore, the Company has established policies and guidelines to manage interest rate risk. Factoring is a short-term loan and is offered on a floating rate basis to the clients. When interest rate in the money market changes, the Company will adjust its lending rate to the clients accordingly. For leasing, the Company also offers on the floating interest rate basis. Only hire purchase is offered on a fixed rate basis. However, the hire purchase business accounts for only a small portion of the Company’s total portfolio. Thus, the Company is confident that interest rate risk poses a small effect on the Company’s operations.

Financial Liquidity Risk Most borrowings of the Company are in the form of promissory note (P/N) with a tenor of 1 to 6 months. The risk occurs if the lender calls for repayment prior to the maturity of the loan, or if the lender decided not to extend the P/N facility on the maturity of the contracts, resulting in the Company having to repay the loan which will affect the Company’s cash flow.

Annual Report 2011 : IFS Capital (Thailand) PCL

23

Risk Factors / " # $%#

The above mentioned risks can be mitigated through the following:

Risk from major sharehodlers’ influencial management

3.1 The bulk of the Company’s business is factoring, which is short term in nature and with average collection period of 45-60 days. This matches nicely with the borrowings of the Compnay.

As of 9th March 2012, IFS (Singapore) Group is the major shareholder of the Company with 73.13% of shares, which is more than 50% of total shares. With such a high shareholding, it is only inevitable that IFS (Singapore) can influence the management through its directors on the Board or through voting rights at shareholders’ meeting except for approval of significant agendas which by laws or regulation require three-fourths of the voting rights at the shareholders’ meeting. It is also balanced by the Company’s organization structure, which comprises of the Audit Committee, the Compensation and Normination Committee and the Risk Managemnet Committee. These positions are held by independent directors knowledeable in business operations. If the Company enters into a connected transaction with directors, major shareholders, the Company’s authorized persons and persons with a possible conflict of interest on connected transation, such persons are not entitled to vote on the entry into that transaction.

3.2 Although leasing and hire purchase are medium term loans with repayment period of 3-5 years, the Company’s policy is to match proportionately with the long term borrowings of the Company, and avoid the risk of using short term borrowing to support its leasing and hire purchase business. 3.3 The Company has been in business for 21 years and has been able to maintain good relationships with its bankers, and has good record of debt payment. It will continue to give importance to managing good relationships with its bankers. 3.4 In the event of emergency, when bankers call for the loans prior to maturity, the Company is able to utilize the SGD 10 million standby credit facility granted by IFS (Singapore). 3.5 The Company will explore other options available in raising funds from the capital market to offset the above mentioned financial liquidity risk.

Market and Competition Risk New players may enter the market and pose a challenge to the market leadership of the Company since there is no licensing requirement to operate factoring and/or leasing/ hire purchase business; and these businesses are not regulated by the Bank of Thailand. However, the lending business requires high capital and competitive cost of capital to survive the competition. Therefore, other than banks or subsidiaries of banks, it is not easy to enter the market of the Company’s core business of factoring and leasing/ hire purchase. Although more and more banks have entered the factoring business, they do not have the experience that the Company has, and are not as flexible and responsive to the needs of clients. The Company is also ahead in technological development and is the first company in Thailand to offer an e-Factoring platform to serve the needs of its clients.

24

2554 : ( ) ( ! )

Shareholding Structure

. ' # ' Y ,#!

=;/ ! :; #& 10 * " " % ) I ( ) ) * ( # = ) Top 10 Shareholders of IFS Capital (Thailand) PCL. : 9 2555* As of March 9th, 2012*

; ./

/ =

&; -

No.

Name/Company

No. of Shares

Percentage

1

# IFS (Singapore)*

IFS (Singapore) Group*

343,700,000

73.13%

2 3 4 5 6 7 8 9 10

? ) . .T - L @T# D > "Eˆ

;# S$> S > L $ # ' @ & $ S ! . . - S > L $ # O T # > c # ' @ -‰ ; ## ( %# ) ! ' @ " / ? ! ( ) ) >

Mr. Apichai Ekman

8,949,600

1.90%

Miss. Thitinun Setthalikit

5,500,000

1.17%

Mr. Rittikrai Auepiammongkol

5,500,000

1.17%

Mrs. Seam Simsrisakul

5,030,000

1.07%

Ake Rice Mill Company Limited

4,000,000

0.85%

Miss Tararat Simsrisakul

3,650,000

0.78%

Mr. Nathapol Auewattanasakul

3,500,000

0.74%

Stockwell (Thailand) Co.,Ltd.

2,799,945

0.60%

Muang Thai Insurance Pcl.

2,650,000

0.56%

Minority Shareholders

84,720,455

18.03%

Total

470,000,000

100.00%

* Shareholding of IFS (Singapore) Group was due to: * ) + - - IFS (Singapore) 1) ' @ F %;""G- # &ƒ# > (" / L ) ! ( 1) IFS Capital Holdings (Thailand) Ltd. (a wholly owned subsidiary of IFS (Singapore)) with 172,200,000 shares (36.64%). + ( ; # IFS (Singapore) #/ 100) 172,200,000 (; "J #/ 36.64)

2) ' @ F %;""G- # ! ! / '$ + " / L ;&" 2) IFS Capital Limited (“IFS (Singapore)�) (which is 40.40% owned by Phillip Assets Pte., Ltd.) with 171,500,000 shares (36.49%). ( + ( ; Phillip Assets Pte., Ltd. #/ 40.40) 171,500,000 (; "J #/ 36.49) + ( IFS (Singapore) ; ' @ Phillip Assets Pte. Ltd. The ultimate shareholder of Phillip Assets Pte. Ltd. is Mr. Lim Hua & ' #" /& ) (Ultimate Shareholder) ; Lim Hua Min Min, a Singaporean businessman who is presently the Chairman of IFS SK "J !) ;&" "*!! ' "J " / IFS (Singapore) (Singapore). For more details see www.ifscapital.com.sg. #/ $ + " S- www.ifscapital.com.sg ! ' @ F %;""G- # ! (“IFS (Singapore)�) "J ' @ IFS (Singapore) is a company listed on the Singapore Exchange (SGX). ! / '$ + -# # ;&" + IFS (Singapore) K ' @ Its group of companies have to comply with the regulations of the SGX. - "b ' - - b O] ' ; ' -# # ;&" ) The regulations of the SGX can be found at www.sgx.com. ! $ $ / ; ( !/- ' - ! $ " /) IFS (Singapore) > $> ' ; ' $ '' @ ! / '$ + -# ;&" #/ $ + " S- www.sgx.com

Annual Report 2011 : IFS Capital (Thailand) PCL

25

Management Structure

. ' # '

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26

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2554 : ( ) ( ! )

Management Structure / & ' (

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Annual Report 2011 : IFS Capital (Thailand) PCL

27

Management Structure / & ' (

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28

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2554 : ( ) ( ! )

Management Structure / & ' (

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Annual Report 2011 : IFS Capital (Thailand) PCL

29

Management Structure / & ' (

# ' "

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30

2554 : ( ) ( ! )

Management Structure / & ' (

Board of Directors The Board of Directors as of December 31, 2011, consisted of 7 members, namely: Name

Position

1. Mr. Lee Soon Kie 2. Mr. Tan Ley Yen 3. Miss Lim Mui Ling Chamroonrat 4. Mr. Niphat 5. Dr. Thamnoon Ananthothai

6. Mr. Suvait 7. Mr. Niwat

Chairman of the Board Director Director Director Deputy Chairman, Independent Director, Chairman of the Audit Committee Theeravachirakul Independent Director, Member of the Audit Committee Kanjanaphoomin Independent Director, Member of the Audit Committee

Mr. Guntapon Kittisiripraert is Secretary to the Board of Directors Authorizd Directors of the Company Mr. Tan Ley Yen or Mr. Lee Soon Kie is authorized to sign with the Company’s seal affixed. Scope, Duties, and Responsibilities of the Board of Directors The Board of Directors has the power, duties and responsibilities to manage the Company to be in compliance with laws, objectives and regulations of the Company, as well as the resolution of the shareholders’ meeting with lawful approval, honesty and carefulness of the Company’s benefits. The summary of important power, duties and responsibilities is as follows: 1. To hold the Annual General Meeting of Shareholders within 4 months from the end of fiscal year; 2. To call the meeting of the Board of Directors at least once every three months; 3. To arrange for the preparation and submission of the audited balance sheet and profit and loss statement at the end of each fiscal year to the shareholders’ meeting for its consideration and approval; 4. To authorize any one or several directors or any person to perform any action on behalf of the Board of Directors under the supervision of the Board of Directors, or granting the power-of-attorney to such

designated person(s) to perform any action within the specified time as the Board of Directors may think fit; provided, however, that the Board of Directors has the sole discretion to revoke or modify such designated director or power-of-attorney as the Board of Directors may think fit; In addition, the Board of Directors may authorize the Executive Committee to conduct any activities within the specified scope of work, duties and responsibilities of the Executive Committee. No authorization will entitle the Executive Committee or its authorized representative to consider and approve the transaction, which may cause a conflict of interest between the Executive Committee, its authorized representative or any related person or interested person as the one party and the Company or its subsidiary companies as the other party. However, an exception is granted where the transaction conforms to the approved policies and rules of the Board of Directors; 5. To determine the goals, prospects, policies, business plans and budgets of the Company, and to ensure that the work performed by the Executive Committee complies with the set policies. However, the Board of Directors needs to obtain the resolution of the shareholders’ meeting before entering into these transactions that required approval of the shareholders’ meeting, for instance, increase or reduction of capital, issue of bonds, sale or transfer of all or any substantial parts of the Company’s business to any third party, purchase or acceptance of transfer of other businesses, amendment to the Memorandum of Association, and so on; The Board of Directors is also responsible for ensuring the Company’s compliance with the securities and exchange law and rules of the SET, for instance, rules concerning the entry into connected transactions and concerning purchase or sale of substantial assets, including any law governing the Company’s business; 6. To review the management structure and appoint the Executive Committee, Chief Executive Officer and any sub-committees, as it deems appropriate; 7. To ensure that the Company’s performance follows the business plans and budgets at all times;

Annual Report 2011 : IFS Capital (Thailand) PCL

31

Management Structure / & ' (

8. To refrain from conducting any similar or competitive business, participating as partner in an ordinary partnership or partner with unlimited liability in a limited partnership or director in a private company or in any other firms, companies or corporations operating the business similar to or in competition with the Company, regardless of whether for his/her own benefit or for others’ benefit. However, an exception is granted where the director provides notice to the shareholders’ meeting in advance of his/her effective appointment as director of the Company; 9. To notify the Company without delay in the event of likelihood that the director may have direct or indirect interests as a result of (i) the Company’s entry into any agreement, and (ii) his/her increased or decreased holding of shares or bonds in the Company or its subsidiary companies. Apart from the Board of Directors, the Company has appointed 3 sub-committees to help with management, consideration or screening, decision making and transparency, following the principles of the Good Corporate Governance, namely: - The Audit Committee - The Compensation and Nomination Committee - The Risk Management Committee

Audit Committee As of December 31, 2011, the Audit Committee consisted of 3 members with knowledge and experience to review the financial statements of the Company: Name

Position

1. Dr.Thamnoon Ananthothai Chairman of the Audit Committee 2. Mr. Suvait Theeravachirakul Member 3. Mr. Niwat Kanjanaphomin Member Scope of Power, Duties and Responsibilities of the Audit Committee 1. To review the Company’s financial report to ensure that it is accurate and adequate. 2. To review the Company’s internal control system and internal audit system to ensure that they are suitable and efficient, to determine the internal audit’s independence, as well as to approve the appointment, transfer and dismissal of the chief of internal audit or any other person in charge of internal audit.

32

3. To review the Company’s compliance with the law on securities and exchange, the SET’s regulations and other laws relating to the Company’s business. 4. To consider, select and nominate an independent person to be the Company’s auditor, and to propose such person’s remuneration, as well as to attend a non-management meeting with an auditor at least once a year 5. To review the connected transactions, or the transactions that may lead to conflicts of interests, to ensure that they are in compliance with the laws and the Exchange’s regulations, and are reasonable and for the highest benefit of the Company 6. To perform any other act as assigned by the Company’s Board of Directors. 7. To prepare and to disclose in the Company’s Annual Report and Audit Committee’s Report which must be signed by the Audit Committee’s Chairman and consist of at least the following information: • an opinion on the accuracy, completeness and creditability of the Company’s financial report, • an opinion on the adequacy of the Company’s internal control system, • an opinion on the compliance with the law on securities and exchange, the Exchange’s regulations, or the laws relating to the Company’s business, • an opinion on the suitability of an auditor, • an opinion on the transactions that may lead to conflicts of interests, the number of the Audit Committee meetings, and the attendance of such meetings by each committee member, • an opinion or overview comment received by the Audit Committee from its performance of duties in accordance with the charter, and other transactions which, according to the Audit Committee’s opinion, should be known to the shareholders and general investors, subject to the scope of duties and responsibilities assigned by the Company’s Board of Directors. 8. To report to the Board when the Audit Committee finds or suspects any of the following transactions or acts, which may materially affect the Company’s financial condition and operating results, in order to proceed with a remedy within the timeline that the Audit Committee thinks fit:

2554 : ( ) ( ! )

Management Structure / & ' (

• a transaction which cause a conflict of interest; • any fraud, unusual practice or material defects in relation to the internal control system; and • a violation of the law on securities and exchange, the SET’s regulations or other laws relating to the Company’s business.

Compensation and Nomination Committee As of December 31, 2011, the Compensation and Nomination Committee of the Company consisted of 3 members, namely: Name

Position

1. Mr.Niphat

Chamroonrat Chairman of the Compensation and Nomination Committee 2. Dr.Thamnoon Ananthothai Member Member 3. Mr. Lee Soon Kie Scope of Power, Duties and Responsibilities of the Compensation and Nomination Committee 1. To recommend the remuneration structure of the Board of Directors’ and Committees’ members including meeting allowances, bonus, welfare and other benefits both in monetary and non-monetary terms;

Risk Management As of December 31, 2011, the Risk Mangement Committee consisted of 4 members, namely: Name

Position

1. Mr.Suvait

Theeravachirakul

2. Dr.Thamnoon Ananthothai 3. Mr.Niwat Kanjanaphoomin 4. Mr. Tan Ley Yen

Chairman of the Risk Management Committee Member Member Member

Scope of Power, Duties and Responsibilities of the Risk Management Committee 1. Recommend to the Board in formulating the risk management policies, strategies, standards etc. and defining acceptable risk levels; 2. Review with management of the Company the risk management reports, policies, strategies, frameworks, models and procedures, etc., to ensure that the Company has adequate and suitable risk management to acceptable levels, and ensure continued implementation of risk management; and

2. To evaluate the corporate performance of the Company to determine bonus and annual salary increase across the Company, taking into account appropriate industry benchmarks;

3. Periodically review enterprise risk management (ERM) systems that cover all activities of the Company including the assignment of any person or sub-committee to oversee the integration of departmental risk management and control systems and report to the Board.

3. To recommend the Company’s salary structure and other benefits;

Management Team

4. To consider, comment, and evaluate on the Employee Stock Option Program (ESOP) Schemes for directors and employees; 5. To recommend the structure and composition of the Board and Committees together with the qualification of its members; 6. To recommend the list of nominees for the Board of Directors to be proposed to the Shareholders’ General Meeting in case of vacancies by rotation and to the Board of Directors in case of casual vacancies; and 7. To perform the scope of duties and responsibilities as assigned by the Board of Directors.

As of December 31, 2011, the Company’s Management Team consisted of: Name

Position

Mr. Ley Yen Mr. Guntapon Mr. Paknam Ms. Kwanjai Ms. Nararak

Tan Kittisiriprasert Sarakul Sae-Lai Kongsiriruanglai

6. Mr. Suvichan

Charoenponpoj

7. Mrs. Pensri

Pettong

1. 2. 3. 4. 5.

8. Mr. Yutthachai Siriphanpong

Chief Executive Officer Chief Financial Officer GM, Client Relations GM, Operations Deputy GM, Business Development Assistant GM, Business Development Assistant GM, Finance and Acccounts Assistant GM, Credit Review, Human Resources and Adminsitration

Annual Report 2011 : IFS Capital (Thailand) PCL

33

Management Structure / & ' (

Scope of Power, Duties and Responsibilities of the CEO 1. To manage the Company’s day-to-day business operations and/or supervise the Company’s general administration; 2. To ensure that the Company’s operations follow and satisfy its business objectives, articles of association, rules, regulations, orders, policies, goals, operating plan and budget, which are approved by the Board or the resolution of the general meeting of shareholders or both; 3. To follow the tasks assigned by the Company’s Board of Directors; 4. To set the organization structure, hire, appoint, transfer, remove and misemploy, determine wages of, grant rewards to, raise salary and remuneration of, and give bonuses to all employees who hold positions at a lower level than the CEO; 5. To approve and authorize disbursement for the procurement of assets and services for the Company. Approves financial transactions for the Company’s operations within the limit determined by the Board of Directors; 6. To issue orders, regulations, announcements and records to have all operations follow the Company’s policies, maximize its benefits and cope with its rules and principles; 7. To present as the Company’s representative to outside parties in related circumstances to benefit the Company; 8. To appoint working teams to be responsible for operating or managing the Company’s business and to subrogate or designate any person to perform a specific task on behalf of the CEO. Each appointment, subrogation or designation is subject to the CEO’s control. Alternatively, the CEO may appoint any person to have the power to do any acts as he thinks fit and within the time specified by him. The CEO has the discretion to cancel, withdraw or change that appointment, subrogation or designation at any time; 9. To perform other duties as assigned by the Company’s Board of Directors; and 10. To work with integrity and regards to the Company’s benefits.

34

The duties and powers of Chief Executive Officer do not include the duty and authority to approve transactions which are related to the CEO or persons with possible conflict of interest or causes any conflict of interest with the Company or its subsidiaries (if any), unless it is to approve transactions in the normal course of business of the Company following the policy and principles stipulated by the Borad of Directors.

Corporate Secretary The Company has appointed Mr. Guntapon Kittisiriprasert to be the Corporate Secretary with the authority as indicated by the Board of Directors following the Securities and Exchange Act, as well as to act in order to comply with the Board of Directors’ resolution following the Company’s Good Corporate Governance principles.

The Nomination of Directors and Independent Directors The Company’s Nomination Committee is to select candidates for the positions of the Director by considering various criteria such as knowledge, capability, experience, determination and work ethics, etc. which are beneficial to the Company’s business operations

Nomination of the Company’s Directors The procedures of the nomination of candidates to be appointed as Directors are as follows: 1. The Board of Directors consists of as least 5 members who are appointed by the meeting’s election with the majority votes, following the principles and methods as follows: • Each shareholder has 1 vote for each share held; • Each shareholder may exercise the vote in electing one or more persons to be the directors but the votes are invisible; and • The person who obtains the highest votes will be elected as a director in respective order according to the required number of directors, but if two or more persons obtain equal votes,the Chairman must cast a final vote. 2. At every Annual General Meeting of Shareholders, one-third (1/3) of the directors, or if it is not a multiple of three, then the number nearest to one-third (1/3) must retire from office. There must be a drawing by lots to determine the directors retiring on the first and second years following the registeration of the Company. In each subsequent year, the directors who occupy the position for the longest period must retire.

2554 : ( ) ( ! )

Management Structure / & ' (

A retiring director is eligible for re-election. The Company’s Board of Directors consists of 7 members with two Directors as representatives of the major shareholders, namely, Mr. Lee Soon Kie and Ms. Lim Mui Ling.

The Nomination of the Independent Directors and Audit Committee The Company’s procedures of the nomination of the Independent Directors and Audit Committee are as follows: 1. The Independent Directors shall consist of no less than one-third of the Directors and no less than 3 members. 2. The Audit Committee shall consist of no less than 3 members. 3. The qualifications are indicated as follows:

• Not having business relationship such as sale/ purchase significant assets or services as stipulated by the SEC (following the guidelines of the notification of the connected transaction of the SET); • Not be or used to be the Auditor; or • Not be or used to be any provider of professional services, including the legal advisor, financial advisor whom receives a service fee of more than Baht 2 million per year 5. Not be an appointed Director, or representative of the Director of the Company, major shareholder, or persons, who are related to the major shareholders of the Company. 6. Not having any characteristics which will impair making independent opinions on the Company’s operations.

Qualifications of the Independent Directors In compliance with the related notification of the Stock Exchange of Thailand as follows: 1. Hold not more than 1% of the total shares with voting rights of the Company, parent company, affiliated companies, or juristic persons which may have conflicts of interest, including the shares held by related persons; 2. Not be or used to be an Executive Director, an employee, staff, advisor who earns salary, or controlling person of the Company, parent company, subsidiary company, associated company, a subsidiary of the same level, or juristic person who may have conflicts of interest (at present and two years prior to the appointment); 3. Not having blood relations or legitimate relations with the Executives, major shareholders, controlling persons, or candidate persons to be nominated as Executives or controlling persons of the Company or a subsidiary. 4. Not having management relationship or business with the Company, parent company, affiliated company, subsidiary at the same level, or juristic persons which may have conflicts of interest at present and 2 years before the submission date of the following matters with SEC: • Not be or used to be an Executive Director, an employee, staff, advisor who earns salary,

Qualifications of the Audit Committee 1. Recevied an appointment from the Board of Directors or through a resolution from a shareholders’ meeting. 2. Every Audit Committee member shall be an Independent Director and: • Not being a Director who is assigned by the Board of Directors to make decision in the operations of the Company, parent company, affiliated companies, subsidiary company of the same level, or juristic persons which may have conflicts of interest; and • Not being a Director of the parent company, subsidiary company, subsidiary company of the same level, only apply to the listed company. 3. Have a duty as stipulated by the notification of the Stock Exchange of Thailand RE: Qualification and Scope of the Audit Committee’s Operations. 4. Have sufficient academic qualification and work experience to work as the Audit Committee and at least 1 member of the Audit Committee shall have sufficient academic qualification and work experience to examine the credibility of the financial statements.

Annual Report 2011 : IFS Capital (Thailand) PCL

35

Management Structure / & ' (

' / The Board of Directors Biography . ? /Mr.Lee Soon Kie 53 "E / years

d % / " Education / Training • " (( & L - ; - University of Wales, Aberystwyth Master’s degree in Computer Science of University of Wales, Aberystwyth • " (( - $ L @TL - The National University of Singapore Bachelor’s degree in Economics of The National University of Singapore • Understanding the Regulatory Environment in Singapore - ; ' ' @ ;&"

Understanding the Regulatory Environment Program in Singapore2008-Singapore Institute of Directors

' # , - &" / Present Position • " / / Chairman of the Board

"" % / Relation with the Company • ! + ' @ #/ % of Stock holding in the Company = 0.085 ( / Ordinary • ) / Type • ! / Amount 400,000

" B 5 } # / Work Experience for the past 5 years / Period

; % / Position

= / Company

2553-"*!! ' / 2010-Present 2552-"*!! ' / 2009-Present 2550-"*!! ' / 2007-Present 2549-"*!! ' / 2006-Present

/ Director / Director / Director " / / Chairman of the Board / Director

IFS Capital Intellectual Property Private Ltd. (Singapore) IFS Factors (Malaysia) Sdn. Bhd, (Malaysia)

2548-"*!! ' / 2005-Present

2547-"*!! ' / 2004-Present

/ Director / Director / Director " / / Chairman of the Board " / ;O/

IFS Capital (Hong Kong) Ltd. (Hong Kong) IFS Capital (Malaysia) Sdn. Bhd. (Malaysia)

' @ F %;""G- # &ƒ# > (" / L ) ! IFS Capital Holdings (Thailand) Ltd. IFS Ventures Private Ltd. (Singapore) IFS Ventures 2 Ltd. (Singapore) Advance Finance PCL.

' @ F %;""G- # (" / L ) ! ( ) ) IFS Capital (Thailand) PCL. PT. IFS Capital Indonesia (Indonesia)

Chairman of the Board of Commissioners

" / ! $ ' # ' @ %#/ '

2546-"*!! ' / 2003-Present

36

Group CEO & Executive Director / Director / Director / Director / Director

' @ F %;""G- # ! ( ;&" ) IFS Capital Ltd. Phillip Ventures Enterprise Fund Ltd. (Singapore) IFS Capital Assets Private Ltd. (Singapore) Phillip Private Equity Pte Ltd. (Singapore) ECICS Ltd. (Singapore)

2554 : ( ) ( ! )

Management Structure / & ' (

* . $ ) / Dr.Thamnoon Ananthothai 55 "E / years

d % / " Education / Training • " (( International Management Walden University, Naple, Florida, USA. Doctor’s degree of International Management Walden University, Naple, Florida, USA.

• Understanding the Fundamental of Financial Statements Program $ 7/2007 - ; ' ' @ Understanding the Fundamental of Financial Statements (UFS-7/2007) - Thai Institute of Directors

• The Role of the Chairman Program $ 14/2006 - ; ' ' @ The Role of the Chairman Program (RCP -14/2006) - Thai Institute of Directors

• Director Certication Program $ 70/2006 - ; ' ' @ Director Certification Program (DCP -70/2006) - Thai Institute of Directors

• Audit Committee Program $ 10/2005 - ; ' ' @ Audit Committee Program (ACP - 10/2005) - Thai Institute of Directors

• Director Accreditation Program $ 48/2005 - ; ' ' @ Director Accreditation Program (DAP 48/2005) - Thai Institute of Directors

' # , - &" / Present Position • " / / %#/" / - ! ' Deputy Chairman, Independent Director and the Chairman of the Audit Committee

"" % / Relation with the Company • ! + ' @ #/ / % of Stock holding in the Company = 0.06 • ) / Type ( / Ordinary • ! / Amount 300,000

" B 5 } # / Work Experience for the past 5 years / Period

; % / Position

2553-"*!! ' / 2010-Present / / Independent Director

= / Company ' @ $ &F S &" ! ( ) ) Thai Union Frozen Products PCL.

2550-"*!! ' / 2007-Present " / / %#/ " / ;O/ - ! ' Deputy Chairman, Independent Director and the Chairman of the Audit Committee " / %#/" / - ! ' / Vice Chairman and Director of Audit Committee - ! ' / Audit Committee " / / Chairman of the Board

2549-"*!! ' / 2006-Present %#/" / - ! ' Director and the Chairman of Audit Committee

' @ F %;""G- # (" / L ) ! ( ) ) IFS Capital (Thailand) PCL.

' @ '- - # $ ! ( ) ) Better World Green PCL.

# / Bangkok University ' @ ! L ! ( ) ) / Vintage Engineering PCL.

' @ & -/ ! ( ) ) Eastern Printing PCL.

2548-"*!! ' / 2005-Present %#/ - ! '

' @ P -$> F; ! ( ) )

Director and Member of Audit Committee 2547-"*!! ' / 2004-Present ' / Executive Director

Property Perfect PCL.

' @ # ) ! ( ) ) Merchant Partners Securities PCL.

2544-"*!! ' / 2001-Present ' / Executive Director

;O/ -# ; @- # % " / L The Agricultural Futures Exchange of Thailand

Annual Report 2011 : IFS Capital (Thailand) PCL

37

Management Structure / & ' (

. . & # / Ms. Lim Mui Ling 52 "E / years

d % / " Education / Training • " (( - $' ()$ The National University of Singapore Bachelor of Accountancy of The National University of Singapore

• Understanding the Regulatory Environment in Singapore - ; ' ' @ ;&"

Understanding the Regulatory Environment Program in Singapore 2008 - Singapore Institute of Directors

' # , - &" / Present Position • / Director

"" % / Relation with the Company • ! + ' @ #/ / % of Stock holding in the Company = 0.05 ( / Ordinary • ) / Type • ! / Amount 250,000

" B 5 } # / Work Experience for the past 5 years / Period

; % / Position

2552-"*!! ' / 2009-Present / Director 2551-"*!! ' / 2008-Present / Director / Director / Director 2550-"*!! ' / 2007-Present " / ! $ _` # ' @ / Group Chief Financial Officer

= / Company ' @ F %;""G- # (" / L ) ! ( ) ) IFS Capital (Thailand) PCL. IFS Capital Assets Private Ltd. (Singapore) IFS Ventures Private Ltd. (Singapore) IFS Ventures 2 Ltd. (Singapore)

' @ F %;""G- # ! ( ; &" ) IFS Capital Ltd.

& . = & / Mr.Suvait Theeravachirakul 53 "E / years

d % / " Education / Training • " (( & ' ! Wagner College, New York, USA Master of Business Administration of Wagner College, New York, USA

• Director Certication Program $ 9/2001 - ; ' ' @ Director Certification Program (DCP 9/2001) - Thai Institute of Directors

• Director Accreditation Program $ 15/2006 - ; ' @ Director Accreditation Program (ACP 15/2006) - Thai Institute of Directors

• Successful Formulation & Execution the Strategy $ 6/2010 - ; ' @ Successful Formulation & Execution the Strategy (SFE 6/2010) - Thai Institute of Directors

' # , - &" / Present Position • / %#/ - ! ' / Independent Director and Audit Committee Member

38

2554 : ( ) ( ! )

Management Structure / & ' (

"" % / Relation with the Company • ! + ' @ #/ / % of Stock holding in the Company = 0.02 ( / Ordinary • ) / Type • ! / Amount 100,000

" B 5 } # / Work Experience for the past 5 years / Period

; % / Position

2554-"*!! ' / 2011-Present " / / Chairman of the Board " / / Chairman of the Board / Director / Director / Director / Director

= / Company ' @ # - %# $ ## " ! / Lanta Land Development Co., Ltd. ' @ P '$ ; ' + ( ! / MBK Bangyai Co., Ltd. ' @ #$S ! / Siam Delice Co., Ltd. ' @ P S - !P $ $ ! / X-Gen Premium Co.,Ltd. ' @ P '$ ; SP - ! / MBK Training Center Co., Ltd. ' @ % & #$ # ; " ) ! Magnolia River Place Corporation Co.,Ltd.

/ Director

' @ % & #$ F ; " ) ! Magnolia River Front Corporation Co.,Ltd.

/ Director / Director 2553-"*!! ' / 2010-Present " / / Chairman of the Board 2552-"*!! ' / 2009-Present " / / Chairman of the Board " / / Chairman of the Board / Director " / / Chairman of the Board 2551-"*!! ' / 2008-Present " / / Chairman of the Board / Director " / / Chairman of the Board " / / Chairman of the Board 2550-"*!! ' / 2007-Present / %#/ - ! ' Independent Director, Audit Committee Member " / / Chairman of the Board " / / Chairman of the Board

2549-"*!! ' / 2006-Present " / / Chairman of the Board 2548-"*!! ' / 2005-Present " / / Chairman of the Board " / / Chairman of the Board / %#/ - ! ' Independent Director, Audit Committee Member / Director / Director " / / Chairman of the Board " / / Chairman of the Board

' @ % & #$ ; ; " ) ! Magnolia River Park Corporation Co.,Ltd. ' @ (! ! / Golden Lime Co., Ltd. ' @ $ #$ S ! / T Leasing Co.,Ltd. ' @ S $ # ! / Paradise Retail Co.,Ltd.

' @ ' (; L ) P - ! Ma Boonkhrong Sirichai Enterprise Co.,Ltd. ' @ $ % ; ! / Sima Pac Co.,Ltd.

' @ P '$ ; ƒ # -$> % ! ! MBK Hospitality Management Co., Ltd. ' @ S ; ! / Paradise Park Co.,Ltd. ' @ P '$ ; S S ! / MBK Residence Co.,Ltd. ' @ P '$ ; %; ! / MBK Square Co.,Ltd. ' @ P '$ ; - ! / MBK Arcade Co.,Ltd.

' @ F %;""G- # (" / L ) ! ( ) ) IFS Capital (Thailand) PCL.

' @ # ƒ ' # > ! / Glas Haus Building Co., Ltd. ' @ % # &- ;) ( %# ) ! Apple Auto Auction (Thailand) Co.,Ltd. ' @ P '$ ; F N %# ! / MBK Food Island Co.,Ltd. ' @ # ƒ ) ! / Glas Haus Ratchada Co., Ltd. ' @ / %# ! / Kathu Land Co.,Ltd.

' @ $ ; ! ( ) ) Thai Rung Union Car Public Company (Limited) ' @ $ !$ ) # ! / PRG Granary Co.,Ltd. ' @ ) $ S ! / Ratchasima Rice Co.,Ltd. ' @ P '$ ; SP - ! / MBK Center Co.,Ltd. ' @ P '$ ; # ) ! / MBK Leisure Co.,Ltd.

Annual Report 2011 : IFS Capital (Thailand) PCL

39

Management Structure / & ' (

" B 5 } # (', ) / Work Experience for the past 5 years (Continued) / Period

; % / Position

2547-"*!! ' / 2004-Present " / / Chairman of the Board " / / Chairman of the Board 2546-"*!! ' / 2003-Present ' / Executive Director / Director " / / Chairman of the Board / Director " / / Chairman of the Board " / / Chairman of the Board / Director / Director 2545-"*!! ' / 2002-Present %#/ Director and President " / / Chairman of the Board " / / Chairman of the Board " / / Chairman of the Board " / / Chairman of the Board 2544-"*!! ' / 2001-Present / Director

= / Company ' @ P '$ ; $ $ ! / MBK Premium Co.,Ltd. ' @ % ‰'&S# % # ! ' @ " S # % % $ ! ( ) ) Patum Rice Mill and Granary PCL. ' @ ! / Siam Piwat Co.,Ltd. ' @ S$ % # $ % ! ! / CLP Management Co.,Ltd. ' @ %"# - ! / Plan Estate Co.,Ltd. ' @ %"# % S # ! / Plan Appraisal Co.,Ltd. ' @ # ' ! / Lan Bangna Co.,Ltd. ' @ &ƒ# > ! / Siam Piwat Holding Co.,Ltd. ' @ P '$ ; $ ! ( ) ) / MBK Resort PCL.

' @ P '$ ; ! ( ) ) MBK PCL.

' @ ; - # #; P - >$ ! / Crystal Lake Properties Co.,Ltd. ' @ P '$ ; % SP ! / MBK Asset Co.,Ltd. ' @ $ ! / Supsinnthanee Co., Ltd. ) - P -$>F* 1 / Nasset Property Fund 1 ' @ & % # ; (" / L ) ! ( ) ) Royal Orchid Hotel (Thailand) PCL.

/ Director / Director

' @ ) - # ; ! / Royal Orchid Sheraton Co.,Ltd. ' @ # ; $ # S ! Thai Royal Orchid Real Estate Co.,Ltd.

2542-"*!! ' / 1999-Present / Director 2540-"*!! ' / 1997-Present " / / Chairman of the Board " / / Chairman of the Board " / / Chairman of the Board " / / Chairman of the Board " / / Chairman of the Board " / / Chairman of the Board

' @ S$ # % S ! Primacy Elegance Investments Ltd. ' @ & # "G; ;# ' ! / The Olympic Club Co.,Ltd.

' @ ? P- #P ; " #

# F ;# ' ! Phuket Loch Palm Golf Club Co.,Ltd. ' @ P '$ ; -$ ! / MBK Guarantee Co.,Ltd. ' @ P '$ ; %;""G- # ! / MBK Capital Co.,Ltd. ' @ P '$ ; P - ! / MBK Entertainment Co.,Ltd.

' @ P '$ ; &ƒ -P# % $ ! MBK Hotels and Resorts Co.,Ltd.

40

2537-"*!! ' / 1994-Present / Director 2535-"*!! ' / 1992-Present " / / Chairman of the Board 2534-"*!! ' / 1991-Present " / / Chairman of the Board " / / Chairman of the Board 2533-"*!! ' / 1990-Present / Director

' @ ) - ; S #%- ! / Wachirachat Consultant Co.,Ltd. ' @ / SP - ! / The Nine Center Co.,Ltd. ' @ P '$ ; ! ! / MBK Business Co., Ltd. ' @ P '$ ; F S ! / MBK Smart Force Co.,Ltd. ' @ # # F % ; $ ;# ' !

2530-"*!! ' / 1987-Present " / / Chairman of the Board

Riverdale Golf and Country Club Co.,Ltd. ' @ P '$ ; % P S ! / MBK Advance Co.,Ltd.

2554 : ( ) ( ! )

Management Structure / & ' (

' / Mr.Niphat Chamroonrat 68 "E / years

d % / " Education / Training • " (( - $' ! Pitman College, UK Bachelor of Business Administration, Pitman College, UK • Director Accreditation Program $ 62/2007 - ; ' ' @ Director Accreditation Program (DAP 62/2007) - Thai Institute of Directors

' # , - &" / Present Position • / Director

"" % / Present Position • ! + ' @ #/ / % of Stock holding in the Company = ( / Ordinary • ) / Type • ! / Amount -

" B 5 } # / Work Experience for the past 5 years / Period

; % / Position

2550-"*!! ' / 2007-Present / Director

= / Company ' @ F %;""G- # (" / L ) ! ( ) ) IFS Capital (Thailand) PCL.

2512-"*!! ' / 1969-Present / Director

' @ - ; (1983) ! / Inter Corn (1983) Co.,Ltd.

Annual Report 2011 : IFS Capital (Thailand) PCL

41

Management Structure / & ' (

' / Mr.Tan Ley Yen 55 "$ / years

d % / " Education / Training • " (( & ' ! ! / " / L Royal Holloway College, University of London, UK Master of Business Administration in International Management of Royal Holloway College, University of London, UK

• " (( - $ L - ( $ - ) ! University of Manchester Institute of Science and Technology, UK Bachelor of Science (Honours) in Management Sciences, University of Manchester Institute of Science and Technology, UK

• Director Accreditation Program $ 65/2007 - ; ' ' @ Director Accreditation Program (DAP 65/2007) - Thai Institute of Directors

' # , - &" / Present Position • %#/" / ! $ ' Director & CEO

"" % / Relation with the Company • ! + ' @ #/ / % of Stock holding in the Company ( / Ordinary • ) / Type • ! / Amount -

= -

" B 5 } # / Work Experience for the past 5 years / Period

; % / Position

= / Company

2550-"*!! ' / 2007-Present %#/" / ! $ '

' @ F %;""G- # (" / L ) ! ( ) )

Director & CEO 2549-"*!! ' / 2006-Present / Director

IFS Capital (Thailand) PCL.

' @ F &ƒ# > (" / L ) ! IFS Capital Holdings (Thailand) Ltd.

42

2554 : ( ) ( ! )

Management Structure / & ' (

@ + / Mr.Niwat Kanjanaphoomin 50 "E / years

d % / " Education / Training • " (( & ' ! Massey University, New Zealand Master of Business Administration of Massey University, New Zealand

• " (( - $ L L - ; - ' ;& &# $ /! # ! ; O # /' Bachelor of Computer Engineering of King Mongkut Institute of Technology Ladkrabang

• Director Accreditation Program $ 82/2010 - ; ' ' @ Director Accreditation Program course (DAP 82/2010) - Thai Institute of Directors

• Audit Committee Program $ 30/2010 - ; ' ' @ Audit Committee Program (ACP 30/2010) - Thai Institute of Directors

' # , - &" / Present Position • / %#/ - ! ' Independent Director and Audit Committee Member

"" % / Relation with the Company • ! + ' @ #/ / % of Stock holding in the Company = ( / Ordinary • ) / Type • ! / Amount -

" B 5 } # / Work Experience for the past 5 years / Period

; % / Position

= / Company

2552-"*!! ' / 2007-Present

/ %#/ - ! '

' @ F %;""G- # (" / L ) ! ( ) ) IFS Capital (Thailand) PCL.

2553-"*!! ' / 2010-Present 2548-2553 / 2005-2010

Independent Director and Audit Committee Member ! / Managing Director ! + ( / General Manager

; -# - $> / Thai Bond Market Association ' @ # ; -% ) - ! / National Credit Bureau Co.,Ltd.

Annual Report 2011 : IFS Capital (Thailand) PCL

43

Good Corporate Governance

$

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44

2554 : ( ) ( ! )

Good Corporate Governance / ) (*

! $> ' @ ! K "b ' - $ '! ' O ! + ' %#/ ; + ; K "J % "b ' - $ - ? ! - ; S - ! - %#/ $

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Annual Report 2011 : IFS Capital (Thailand) PCL

45

Good Corporate Governance / ) (*

" " # ./ "! *= " # ) ; % D E ;O/ ' @ " / ' $ $; ; %#/ " / ' O $ "J " /& ) - ! ;O/ ' @ $ + + ; P + L %#/? ! # "N ; $ % %#/ '" / O ' @ -# ! ' % #_` ! + "J "- % %#/ & ' $ $" / ? %#/" / # ! % G E ;O/ ' @ / / + "N ; % # " /& ) $ !!/ K > !K % "b '- '' @ %#/ ' + / - %#/ > - + - + / %#/ & ' % & / + ;- + ;# %#/ "J "- Q # %#/-# # %#/ ' ; ' " / L ; -# # % " / L %#/ $ $ > "G # $ $ & + ' " /! "E %#/%''% #" /! "E (%'' 56-1) + - ! ' & ' '- & ' @ ! ! ' O ! "J % + ' K "b '- SK ; ';# K ; "J - ; K K $ $ # - X #$ #$ / + X $ % #" /& ) ' @ ; ' ) '- ' @ #$ #$ +) #? + > " /& ) - "G # - %#/ # ; ' ) '- ; %#/

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$ ) #

7. c (! ? * 1/6 5/5 5/5 - # ( % & # (

;O/ ' @ - / K ; ; ( + ! + $ /'' 8. ) ;$ * 2/6 ; '; ? + + "J $ ' %#/ ) - -# ! $ 9. / * 4/6 $ & ' @ ! - > ;O/ - ! 'SK $ ) "J / > %# /'' ; '; ? + ' @ + $" / ? - * ) ;$ # ! "J $ 7 %#/" / # %# + $; - ; ' %#/ ; 2552 ) %# /'' $ - &" + - ! ' & / * / # ! "J ; % #" /& ) -# ! %#+ ' @ "b ' - -

/ %#/ - ! ' $ 27 D@? ; 2552 b # %#/-# # b $ $ * # # - % $ 7 ' " / ' ! ' @ + "E 2554 ;O/ - ! ' $ ; 2552 " /) 4 ; > %#/ ; > " /) ' '' ()$ _` ! * c (! ? - % ' @ _` ' ()$ ' @ K $ $ - ; ! "J / %#/ - ! ' 7 ; 2552 ! O %#/+ % /+ " '" /'' ; '; ? + ' @ ! $>' @ ! ' @ P S$ - ) % #

46

2554 : ( ) ( ! )

Good Corporate Governance / ) (*

%

' @ & ' ; - '% ) ! %#/&" + & ; - '% + / ' $ ' - > ; K K " / ' O

? / $ ' - ' ' %#/; ' ) ' $ !/ %#%#/ @ $ $; O ' - $ - %#/ - ! $ " /) ; - '% ' "J "- # %#/ & ' $ ;O/ ' @ & ! O - ' ' $ %#/; ' ) ' %#/ # "b ' - %#/; ' %- #/ % ! : = ( 2552 +H 2554

" "E 2552 '$> '$> " /) (' ) "E (' ) 95,000 130,000

1. #$ S ;$ 2. - #

' P! (&' ) (' ) 444,000

'$> " /)

(' ) 120,000

-

-

3. # # * 4. ! ( -

5. . ( & 6. $ ) # 7. c (! ? * 8. ) ;$ *

20,000 120,000 265,000 220,000 40,000 40,000

100,000 160,000 100,000 53,000 -

9. /

145,000 222,000 945,000 543,000 1,554,000 1,035,000

* * * *

*

-

"E 2553

222,000 222,000 222,000 222,000

80,000 125,000 260,000 230,000 220,000 -

'$> "E (' ) 130,000 50,000 100,000 250,000 150,000 148,333 -

"E 2554 ' P! (&' ) (' ) 444,000 -

'$> '$> " /) (' ) "E (' ) 120,000 130,000 -

' P! (&' ) (' ) 480,000

-

-

222,000 222,000 222,000 -

80,000 125,000 220,000 160,000 180,000 -

50,000 150,000 220,000 150,000 80,000 -

240,000 240,000 240,000 240,000 240,000 -

828,333 1,110,000

885,000

780,000 1680,000

) ;$ # ! "J $ 7 ; 2552 / # ! "J / %#/ - ! ' $ 27 D@? ; 2552 # # - % $ 7 ; 2552 c (! ? - % / %#/ - ! ' 7 ; 2552

Annual Report 2011 : IFS Capital (Thailand) PCL

47

Good Corporate Governance / ) (*

% ) ( % ) ) ( : ) ) ( 2552 +H 2554

" %

2552 2553 ! ! ! !

(' ) (' ) %#/&' 8 18,111,400 9 20,480,930 8 18,111,400 9 20,480,930 % > C

' @ #$> )$ ' SK ! / '$ %# -

/ )' (( - #$ > )$ & ! ' + - #/ 5 ; ! %#/' @ ! ' $ K - - $ + ' ; ' )% ( ! ) # (

' @ $ %#/ # O] + ; '; %#/ +) #? + & / #% T / ' @ $! / % - O) ' @ $ & ' %#/ $ %# ' %#/ + #? + ' @ "+) " /& ) - $> 1

+ ' K ; %#/' - $ ' # - ? / ' ;;# # +) #? + S > & '& # ' @ $ # > !/ % + " /) ) " '& K & /+ ) 30 $ ' ' @ !/ % - O) ! $> ? # ! $ # % %# ' ;;# - + $ S > # ' @ ! / " /) ) $ ' ' # # $ # " / # $ '+ / / # ; %# (7 '%- $ % )

8 8

20,584,717 20,584,717

"& - ! ' %#/ + "E 2554 ' @ $' ;# > > 69 ; %' - - X $> # &; $

' 8 _` c ! 13 _` # ; %#/' ; $ ) 13 _` "b ' - 21 _` ' ()$ 3 _` Q 1 _` # # %#/ ' 1 "b ' - - b O]

_` c ) / ' ;;#%#/ 9

69 > $> + / / # 3 "E $ ' @ $ "#$ %"# ! $ ; (%#/ $ % + X

2. + ; % %#/ ' $ $ $ $ !/- ; # - ; %#/' - $ ' # - ? / $ ' # ' @ & ' K ; %#/' - $ ' # - ? / ' ;;# # $ $ S > & '& # ' @ - $ + " / L ;O/ .#.-. $ !. 14/2540 ! %#/ "G # %#/' & @- / )' (( - # %#/-# # .L. 2535 $ / _` _[ / '$ '"b ' - # - ' @ !/ ! O # & @- ; % O$ ) - - "J # ; ! # ! "J -

48

2554 ! !

(' )

2554 : ( ) ( ! )

Good Corporate Governance / ) (*

#- '% %#/# @O/ #- '% $ + ' ( %#/ ' ) =: %

/ ; ! &' ; +) ! $ '

2552 ( ) 22,567,047

2553 ( ) 24,588,659

2554 ( ) 27,993,897

4,867,430

9,011,504

7,807,530

27,437,477

33,600,163

35,801,427

$ " B @ "& ' @ + ; ; ( "J + c ; %#/; " / ? + ; O? + ' & ! + $ _– '

& ' ;;# > ! ? + %#/? $ ! "J - & %#/ ' ;;#

L ? + %#/ ; $ ' "" '+) + > $ & ' + + #- '% ' + - $ / ! +!%#/ @ + '' @ + / / %#/ ! $> ' @ ! ! "J ; ;;$? + ;

Annual Report 2011 : IFS Capital (Thailand) PCL

49

Good Corporate Governance / ) (*

Corporate Governance The Board of Directors of the Company approved the Principles of Good Corporate Governance on 7th November 2008 by adopting the 5 principles of good corporate governanace for listed companies of SET 2006 as practice guidelines of the Company to strengthen and enhance transparency and corporate management system. These are beneficial to the business operations which will lead to confidence of shareholders, investors, stakeholders and related persons. The Corporate Governance Principles can be summarized as follows:

1. The Rights of Shareholders The Board of Directors places great emphasis on the rights of shareholders. Prior to shareholders’ meeting, invitation letters attached with details of the agenda, important and necessary information, opinions of the Board, minutes of the previous meeting, annual report, and other additional documents concerned for decision making, including proxies form A, B, and C, documents used in the assignment of proxy and explanation documents of how to use the granting of proxy, of which the shareholders will receive no less than 7 days. Also, there will be announcement of meeting published in the local newspaper for at least 3 consecutive days prior to the meeting. Shareholder has equal rights in examining the Company’s operations and provide opinions and suggestions. Minutes of meeting will be accordingly recorded for shareholders’ examination. In addition, after the Company’s listing on the Stock Exchange of Thailand, the Company has increased its channel of communication with its shareholders on its website (www.ifscapthai. com) under “Investor Relations� apart from ELCID system of SET. This enables shareholders to gain quick access concerning the meeting invitation letter, annual report, as well as other important information disseminated to the shareholders.

2. Equal Treatment toward Shareholders The Board of Directors treat all shareholders with equal importance by providing them an opportunity to express their opinions and suggestions through Investor Relations. In addition, shareholders who cannot attend the meeting could authorize a proxy to an independent director or a representative to be the nominee to attend the meeting and cast a vote when necessary. The Board of Directors places strict adherence to the Company’s regulations, Securities and Exchange laws, notifications, orders, and the regulations of the Stock Exchange of Thailand and other relevant organizations. Moreover, the Board of Directors places importance on compliance with regulations regarding related transaction,

50

acquisition and disposal of significant assets, disclosure of related transaction information, and accessing of information for the benefit of oneself or others. The Board also stipulated rules to prevent any transaction with conflicts of interest.

3. Roles of Stakeholders The Company places importance on the rights of all stakeholders of the Company following the deserved rights of receiving equal and fair treatment as follows: 1. Shareholders: The Company treats all shareholders with equal fairness by accurately reporting actual status and future trend of the Company; 2. Clients: The Company provides effective and quick services to serve the needs of its clients on fair conditions to both parties as well as to maintain clients’ confidentially; 3. Business Partners and/or Creditors: The Company treats its business partners and creditors with equality and fairness on the agreed terms and conditions; 4. Employees: The Company provides fair and equitable returns and appointments, safe working environment and continuous development of knowledge, ability and skills of employees; 5. Competitors: The Company strictly follows the rules of competition, avoids any inappropriate or corrupted methods or destroy competitors’ reputation; 6. Society, Community, and Environment: The Company continuously engages in activities that enhance quality of life of the society, community and environment through its own activities or cooperation with the government, private sectors and community. In addition, the Company has established the code of business conduct to all directors, executives and employees which serve as guidelines for performing their duties with honesty, trustworthiness, and fairness. The Company shall strictly supervise and ensure compliance to the code of business conduct, including enforcing disciplinary and punishment actions. Complaints can be sent to the Company’s website at www.ifscapthai.com, Investor Relations via telephone or postal mail, they will be sent to the related units for further actions.

2554 : ( ) ( ! )

Good Corporate Governance / ) (*

4. Information Disclosure and Transparency The Board of Directors has to ensure the accuracy, timeliness and transparency in the Company’s disclosure of important information to the public both in Thai and English, in accordance with the notifications of the Stock Exchange of Thailand (SET) and the Securities and Exchange Commission (SEC). For the financial reports quality, the Company has appointed the auditors from Deloitte Touche Tohmatsu Jaiyos Audit Co., Ltd. (Deloitte), who are approved auditors by the Office of the SEC, as the Company’s external auditors. With Deloitte as an independent party, the Company is confident that the financial reports are accurate and prepared in accordance with the generally accepted accounting standards. The Board has also appointed the Audit Committee who will review the quality and disclosure of the financial reports of the Company. In addition, the Company has enclosed the report of the Auditors, the management discussion and analysis report, the report on the responsibilities of the Board of Directors towards financial report, the report of the Audit Committee, the disclosure of the roles and duties of the Board of Directors and the Sub-Committees, Directors’ meeting attendance, the disclosure of the remuneration of the Directors and Executives in the Annual Report. The Board of Directors of the Company places importance on the information disclosure with accuracy, completeness, timeliness and transparency by assigning Mr. Guntapon Kittisiriprasert to be responsible for the financial statements and general information disclosure of the Company and to be the representative of the Company to communicate with institutional investors, shareholders and analysts. The investors can contact the Company to receive the Company’s information at telephone number 02-285-6326-32 or the Company’s website at www.ifscapthai.com.

5. Responsibility of the Board of Directors The Board of Directors plays an important role to oversee the Company and is responsible for maximizing benefits to the shareholders of the Company.

Structure of the Board of Directors

comprising of 1 Executive Director and 6 Non-Executive Directors, 3 of which are Independent Directors, and 2 are the representatives of the major shareholder. Term of Directorship The term of each director is in accordance with the Company’s regulations i.e. one-third of directors shall leave their positions and may be re-appointed. Aggregation and Segregation of Positions The Chairman of the Board has no relationship whatsoever with the management team and is a different person from the Chief Executive Officer. Their duties are clearly separated between directing the Company’s policies and day-to-day management. Corporate Secretary The Board of Directors has appointed Mr. Guntapon Kittisiriprasert, Chief Financial Officer, to be the Corporate Secretary to oversee the activities of the Board, including ensuring compliance with the Board’s resolutions.

Sub-Committees The Board of Directors has established 3 Sub-Committeees to assist the Board in overseeing matters in details, namely (1) Audit Committee to help with corporate governance, financial reporting and compliance with policies; (2) Compensation and Nomination Committee to help structure appropriate remuneration based on industry norm and (3) Risk Management Committee to formulate and supervise the risk management policies covering all business units of the Company to contain and mititgate risks to a minimum.

Roles, Duties, and Responsibilities of the Board of Directors Leadership and Vision The Board of Directors consists of personnel with knowledge, capability and experience which are beneficial to the business operations. The Board participates in formulating the vision and mission, strategies, financial goals, risks, plans, and budget of the Company, including ensuring management’s compliance with the plans and policies with efficiency and effectiveness.

Balance of the Non-Executive Directors The Board of Directors comprises of Executive and Non-Executive Directors appropriately appointed and balanced with 7 directors,

Annual Report 2011 : IFS Capital (Thailand) PCL

51

Good Corporate Governance / ) (*

Conflicts of Interest The Board of Directors manages and monitors connected transactions carefully to avoid any possible conflicts of interest by setting measures and procedures as guidelines for approving the entry into connected transactions of the Company, directors, and executives, including the future policies and direction regarding connected transactions. Each approval of the connected transaction must comply with the law of Securities and Exchange and the regulations, notifications, order or the announcements of the Stock Exchange of Thailand and other related organizations, including the disclosure of the connected transactions in the financial statements, the annual report form (Form 56-1) for shareholders to examine. Business Ethics The Company has implemented the code of business conduct which serves as guidelines for directors, executives and staff to follow. The Company’s code of business conduct covers fairness toward the shareholders, realization of the rights of all stakeholders, abstinence from any actions that result in conflicts of interest, responsibility towards the Company’s assets, abstinence of usage of internal information for one’s benefit, accurate and timelineness disclosure of information and responsibility toward society and the public. Internal Control System and Internal Auditing System The Board of Directors understands the importance of having a good internal control system and has thus established an Audit Committee which comprises of three independent directors. The Audit Committee oversees the efficiency and effectiveness of the internal control of the Company, ensures the financial reports are accurate, complete and creditable, ensures the working system is accurate, transparent, examinable, particularly the conflicts of interest, including ensures compliance to the Securities and Exchange law or other related laws concerning the Company’s business operations. During the year, the Audit Committtee had 4 meetings of which were attended by the external auditors, management, head of accounting department and other related persons as necessary. The Meetings serve to consider and suggest improvement to the Company’s internal control system. In addition, the Company has appointed AMC Internal Consulting Co., Ltd. as internal auditors of the Company. The Company also engages internal auditors from IFS (Singapore) to access and suggest improvement on existing operational systems. Both groups of internal auditors report directly to the Audit Committee.

52

Attendance of the Company’s Board of Directors The Board of Directors’ meetings are held at least 4 times annually on a quarterly basis. A letter of invitation with clear meeting agendas and documents for meeting will be sent to directors at least 7 days prior to the meeting date except for an urgent case, to let the Board to have enough time to study the information before attending the meeting. The Board provides an opportunity for senior executives to participate in the meetings. Minutes of meeting are accurately documented and filed for further reference. Attendance of the Board members and the frequency of Board meetings for 2009-2011 are tabled as follows: Directors

2009

2010

2011

Attendance / No. of Meetings 1. Mr. Lee Soon Kie

3/6

2. Mr. Tan Ley Yen

6/6

5/5

4/5

3. Ms. Lim Mui Ling*

1/6

4/5

5/5

4. Mr. Niphat

Chamroonrat

6/6

5/5

5/5

5. Dr. Thamnoon

Ananthothai

6/6

5/5

5/5

6. Mr. Suvait

Theeravachirakul

6/6

5/5

4/5

7. Mr. Niwat

Kanjanaphoomin*

1/6

5/5

5/5

8. Mr. Wong Chin Kheng*

2/6

-

-

9. Mr. Singha

4/6

-

-

Nikornpun*

4/5

5/5

Remarks * Mr. Wong Chin Kheng resigned from the position of Director on 7th August 2009. * Mr. Singha Nikornpun resigned from the positions of Director, Independent Director, and member of the Audit Committee on 27th May 2009. * Ms. Lim Mui Ling was appointed to the position of Director on 7th August 2009. * Mr. Niwat Kanjanaphoomin was appointed to the positions of Director, Independent Director, and member of the Audit Committee on 7th August 2009.

2554 : ( ) ( ! )

Good Corporate Governance / ) (*

Remuneration The Company has stipulated a clear and transparent remuneration policy for directos at par with the industry, based on experience, duties, roles, and responsibilities, in order to keep and maintain the directors with the Company. The policy was approved at the Annual General Meeting of Shareholders. The Board has drawn up a remuneration policy for the executives based on similar principles. The cash remunerations paid to directors and the executives are as follows: Total Remuneration of the Board and Committees from 2009-2011 Directors

2009

2010

Meeting Directors’ Allowance Annual (Baht) Allowance (Baht) 1. Mr. Lee Soon Kie

95,000

2. Mr. Tan Ley Yen

-

130,000

Directors’ Meeting Directors’ Bonus Allowance Annual (Baht) (Baht) Allowance (Baht)

Directors’ Bonus (Baht)

Meeting Allowance (Baht)

Directors’ Annual Allowance (Baht)

Directors’ Bonus (Baht)

444,000

444,000

120,000

130,000

480,000

-

-

20,000

-

-

Chamroonrat

120,000

100,000

5. Dr. Thamnoon Ananthothai

265,000

6. Mr. Suvait

Theeravachirakul

7. Mr. Niwat

Kanjanaphoomin*

3. Miss Lim Mui Ling* 4. Mr. Niphat

8. Mr. Wong Chin Kheng* 9. Mr. Singha

Nikornpant*

Total

2011

120,000

130,000

-

-

80,000

50,000

222,000

125,000

100,000

160,000

222,000

260,000

220,000

100,000

222,000

40,000

53,000

-

-

-

-

-

-

80,000

50,000

240,000

222,000

125,000

150,000

240,000

250,000

222,000

220,000

220,000

240,000

230,000

150,000

222,000

160,000

150,000

240,000

220,000

148,333

-

180,000

80,000

240,000

40,000

-

222,000

-

-

-

-

-

-

145,000

-

222,000

-

-

-

-

-

-

945,000

543,000

828,333

1,110,000

1,554,000 1,035,000

885,000

780,000

1680,000

Remarks * Mr. Wong Chin Kheng resigned from the position of Director on 7th August 2009. * Mr. Singha Nikornpun resigned from the positions of Director, Independent Director, and member of the Audit Committee on 27th May 2009. * Ms. Lim Mui Ling was appointed to the position of Director on 7th August 2009. * Mr. Niwat Kanjanaphoomin was appointed to the positions of Director, Independent Director, and member of the Audit Committee on 7th August 2009. Remuneration for executives from 2009-2011 are as follows: Remuneration

2009 No. of Executives

2010

Total No. of Amounts Paid Executives (Baht)

2011

Total Amounts Paid (Baht)

No. of Executives

Total Amounts Paid (Baht)

Monthly Salary and Bonus

8

18,111,400

9

20,480,930

8

20,584,717

Total

8

18,111,400

9

20,480,930

8

20,584,717

Annual Report 2011 : IFS Capital (Thailand) PCL

53

Good Corporate Governance / ) (*

Other Cash Remuneration The Company is registered under the Provident Fund Act which requires provident fund contribution by both employee and employer. The employees have to contribute 5% of the salary and the Company has to contribute another portion as stipulated by the fund regulation. Control of Insider Information The Company enforces strict rules on the possession and usage of confidential information, particularly financial information before disseminating to the public. The Company’s policies on insider information are as follow: 1. Directors, executives, including their spouses and child(ren) below the legal age are not allowed to buy, sell, transfer or received the transferred securities of the Company before 30 days of the public dissemination of the financial statements. In addition, buying, selling or transferring securities could be resumed at least 7 days after public dissemination (7days starting from the date of dissemination). 2. Directors and Executives are required to provide reports of acquiring and exchanging of shares of the Company of themselves, their spouse and child(ren) under the legal age to conform to the notification of the Office of SEC no. SorChor. 14/2540 relating to the Preparation and Disclosure of Reports on Securities Holding and disciplinary measures prescribed on the Securities and Exchange Act B.E. 2535.

During the past 3 years, there were no significant change in staff strength and there had been no labour dispute. The remuneration paid to the staff (excluding directors and executives) were: Types of Remuneration Monthly salary/ Bonus Welfare Expediture for staff Total

2011 (Baht)

22,567,047

24,588,659

27,993,897

4,867,430

9,011,504

7,807,530

27,437,477

33,600,163

35,801,427

The Company recognizes the importance of knowledge and competency development for its employee as it will bring about an increase of their competency and quality of service. Therefore, the Company consistenly provides in-house and external trainings and seminars to all staff or individual to increase skills and knowledge on their jobs. The Company also rewards its employee appropriately to motivate and retain their services in the long run. In addition, the Company also supports activities to motivate and encourage bonding among staff.

Human Resources Staff Strength There were a total of 69 executives and staff in 2011 broken down by departments as follow:

54

2010 (Baht)

Policies in Developing Human Resources

Any violation against the aforementioned regulations shall have to face disciplinary actions in the form of warning, salary reduction, suspension of duties, termination of employment, etc.

Types Executives Business Development Client Relations and Credit Risk Management Operations Finance and Accounts Legal IR, Secretariat and Compliance Credit Review/Human Resources and Administration Total

2009 (Baht)

No. of staff 8 13 13 21 3 1 1 9 69

2554 : ( ) ( ! )

Dividend Policy

!. 2 ' ! Š!6

/!. 2 ' ! Š!6 -! 2!# &2 # 50 " ' , + * ' * / ' ! #! , ,! ' ’ 2 ' O ! - # 2 ' ! Š!6 / !# &2 / ! "# ' #! # . "~3! $2 6 ! !' ! “ ! ' ! * > 2 '" ' & 5!-! " ! !' !" ' - # 5! ' ! ,! ,! &/ !-!

The Company has a dividend policy of paying dividends at a rate of not less than 50 percent of the net profit available after payment of the Company’s corporate income tax and allocation of legal reserve. However, subject to the operating results, financial conditions and the Company’s working capital requirements, the dividend rate could be less than such rate.

Annual Report 2011 : IFS Capital (Thailand) PCL

55

Related Party Transactions

&2 ' !

" / ' @ %#/' @ $ $ '' ;;# $ ! $; % #" /& ) $ K> + "E 2552 2553 %#/ 2554 ' @ $ / '' ;;# $ ! $; % + "E' ()$ > O $ 31 ; 2552 2553 %#/ 2554 $> - & ! %

=: $ 'E

1. ' @ F 1. IFS (Singapore) %;""G- # + ' @ #/ ! ( ;&" ) 49 O $ 2 (IFS (Singapore)) ? 2552 %#/ #/ 36.49 O $ 30 ;

2554 2. ' @ F %;""G- # &ƒ# >

(" / L ) ! SK "J ' @ IFS (Singapore) + ' @ #/ 49.2 O $ 7 @ 2552 %#/ #/ 36.64 O $ 30 ;

2554 3. #$ S ;$ "J ' (Executive Director) %#/" / ! $ ' # IFS (Singapore) (Group CEO) %#/ "J ' @ 4. # # "J " / ! $ _` # IFS (Singapore) (Group CFO) %#/ "J ' @

=:

&; ( ) 2552 2553 2554 1. ) • $ 8 D@? ; $ $ $ 2549 ' @ - ' ' ' @ ' @ ' @ Letter of Offer ; +) + ; +) ; +) / / > +) "J $> + $> + $> $ ! IFS (Singapore) "J ! 10 # ## ;&" $ ' + # ' ## T • - '$> !/ K> + %- #/ ; > $ ' & $ - - +

' #/ 1 ) / '$> "J - & ) / '$> ? + 1 3 • ) /; - ? + 1 "E? # ! $ Letter of Offer %# %- + !/ K • (( # $ / / # 1 "E '! $ # + (( ' ' $> • (( #

$ - (( ! K $ 7 D@? ; 2555 P- ' @ $ ' +) $> #

56

2554 : ( ) ( ! )

J & # "J $ "J " /& )

- ' @ & "J

? ;# + ' @ + # "J $ $ # " / - '$> ) ! %#/+ # ;$ ' - '$> + -# SK "J $ ' - #%#/; ! "J $ # +) "J % # $ +) + ' @

Related Party Transactions / # !

- & ! %

=: $ 'E =:

&; ( ) 2552 2553 2554

2. > 1. IFS (Singapore) - # ' "J " S ; ("E+ + % IFS & + IFS ! ) / # "

"J $ - # %#/ "J # $% ' @

16,709

# $'> @ $ $

16,056

16,800 "J $ - # "J " - ! %#/ "J ; +) ! $ K> !

2. ; +) ! + $ P' / ; +) ! + 20,602

# $'> @ $ $

-

"J $ - # "J " - ! %#/ "J ; +) ! $ K> !

3. ; +) ! + $ P' / ; $S %#/ - $S ' @ $ "J ) - ) - # $'> @ $ $

-

59,570

31,268 "J $ - # "J " - ! %#/ "J ; +) ! $ K> !

4. ; +) ! + $ P' / ; +) ! + - ! '? + ! $'> @ $ $

-

-

225,219 "J $ - # "J " - ! %#/ "J ; +) ! $ K> !

5. ; +) ! + $ P' / ; +) ! + %#/ - ! '? + ! $'> @ $ $

J &

10,026

-

-

Annual Report 2011 : IFS Capital (Thailand) PCL

57

Related Party Transactions / # !

- & ! %

=: $ 'E =:

2. ' @ F %;""G- # &ƒ# >

(" / L ) !

1. IFS (Singapore) 1. ( ) SK "J • $ 28 ;

+ ( ' @ 2552 ' @ + ' @ F Letter of Offer +

/ / > % ' @ %;""G- # &ƒ# >

F %;""G- # (" / L ) ! &ƒ# > (" / L ) #/ 99.98 O $ ! ! 280 27 D@? ; 2552 # ' & IFS 2. #$ S ;$ "J (Singapore) ;> " / + ' @ F '' @ ' %;""G- # &ƒ# >

$

(" / L ) ! • - '$> $ %#/ "J - - + ' @ ' #/ 1 3. - # • ) /; - "J %#/ '$> + $ ' @ F %;""G- # &ƒ# >

30 $ ; 2552 (" / L ) ! • (( # $ %#/ "J / / # %#/" / 2 '! $ # ! $ ' + (( ' ' $> ' @ 280,000,000 - - (280,000,000) - + (! ; ) - "#

-

-

2,466,658

-

-

- '$> '

58

&; ( ) 2552 2553 2554

2554 : ( ) ( ! )

J & 1. IFS (Singapore) ; ;> " /

) +) ; $ + ' ' @ ' $ + SK "J $ $ ' ; 2. ? # +

# ' @

$ ) ' ' $ + ! ' @ SK ; + $ - + $ " /) ;O/ ' @ 3. - '$> ) ! %#/ "J $ "b ' - -# + " / L ' +

/ ' @

Related Party Transactions / # !

( #'& ! / "J ; ! "J %#/ $; - # + " /& ) ' @ %#/ "J "- # @O/ " / ' ! " %#/' @ ! ; - '% + ; $ - SK "J ; $ '' ;;#? ' / $ $ ; -# ; $ '' ;;#?

' # ;  ' & ' # , + O$ $ ' @ $ / $ "J ; " - ' ' ' ;;# $ $; $ & $ - # ; + # @O/ $ ' $ (— ) K / '; (( "+ O $ !- ; $ " L! #+ $ - !/ $ / "J ' ' ;;# $ $; $ ' @ !/ - ;O/ + ! O - + # + _` ' - # + O$ ' $ @ !/- / '' ;;# $ ! $; % $ "J ; " - ' @ !/- - ;O/ - ! ' ! O ; / %#/!/ ; P ;O/ - ! '- $ " /) ;O/ $ " /) " / ' - +! ;O/ - %- O$+ - # > $> ! O - / # - "b ' - + "J "- Q # %#/-# # %#/ ' ; ' " / L ; -# # % " / L SK $ ! $; % $ $ + / !/ $ $ # - + / > X

$ " # ; $ # , B ' + O$ $ $ / + ;- ' @ $ & ' $ !/ + "J "- # @O/ ! ; " - ' @ %#/' @ !/"b ' - -

Q # %#/-# # %#/ ' ; ' " / L ; -# # % " / L %#/ $ $ %#/' @ !/ "G / + - " / ' ' %''% #" /! "E (%'' 56-1) %#/ " /! "E ' @ (%'' 56-2)

Annual Report 2011 : IFS Capital (Thailand) PCL

59

Related Party Transactions / # !

Summary of related parties and connected transactions for the year ended 31st December 2009, 2010 and 2011 as follows:-

60

Connected Parties

Relationship

Description

1. IFS Capital Limited (IFS (Singapore))

1. Loans 1. IFS (Singapore) • On 8th May 2006, owned 49% of the the Company signed shares as at 2nd the Letter of Offer February 2008 and with IFS (Singapore), 36.49% of shares for a short-term loan as at 30th December facility of SGD 10 2011; million or equivalent 2. IFS Capital Holdings in Thai Baht or the (Thailand) Ltd., the US Dollar; subsidiary of IFS • The interest rate will (Singapore), owned be charged upon 49.2% of the shares each withdrawal as at 7th April based on cost of 2008 and 36.64% the fund plus 1% of shares on 30th which will be paid on December 2011; monthly or quarterly 3. Mr. Lee Soon Kie basis, and the interest is the Executive payment will be made Director and the within a month or 3 Group CEO of IFS months; (Singapore) Group, • The loan will be due and the Company’s within a year or when Diector; called upon, whichever 4. Ms. Lim Mui Ling is earlier. is the Group CFO • The term of the loan of IFS (Singapore) was 1 year starting Group and the from the signed Company’s Director; date in the contract; Although the loan facility was not drawn down, the Company had renewed the contract yearly. The contract is due to expire on 7th May 2012.

Amount (Baht) 2009

2010

The Company has not executed the facility.

The Company has not executed the facility.

2554 : ( ) ( ! )

2011

Opinions of the Audit Committee

The Company The transaction was benefitical to the has not executed the Company’s liquidity. facility. It was was an unsecured loan. The interest rate was clearly stipulated to be almost equivalent to the market’s interest rate, which was acceptable. The transaction was an additional working capital in case of emergency.

Related Party Transactions / # !

Connected Parties

Relationship

Description

Amount (Baht) 2009

2010

2011

2. Others 1. IFS (Singapore) had sponsored a New Year gift to the employees of IFS with IFS’ advanced payment. The Company’s related debtors

The trasaction was reasonable which was beneficial to the Company.

16,709

16,056

16,800

The trasaction was reasonable which was beneficial to the Company.

2. Reimbursement of expenses for travelling to attend the meeting of Director. The Company’s related debtors

20,602

-

-

The trasaction was reasonable which was beneficial to the Company.

3. Reimbursement of expenses for VISA and VISA renewal and work permit of the Company’s foreign employee. The Company’s related debtors

59,570

-

31,268

The trasaction was reasonable which was beneficial to the Company.

4. Reimbursement of IFS (Singapore)’s expenses for Internal Audits. The Company’s related creditors

-

-

225,219

The trasaction was reasonable which was beneficial to the Company.

5. Reimbursement of expenses for travelling of Directors and Internal Auditors. The Company’s related creditors

Opinions of the Audit Committee

10,026

-

-

Annual Report 2011 : IFS Capital (Thailand) PCL

61

Related Party Transactions / # !

Connected Parties

Relationship

Description

2. IFS Capital Holdings (Thailand) Ltd.

1. Loan 1. IFS (Singapore), • On 28th January the major 2009, the Company shareholder of the granted a letter of Company owned offer for short term 99.98% of shares in loan to IFS Capital IFS Capital Holdings Holdings (Thailand) (Thailand) Ltd. on Ltd. at the total of 27th May 2009. Baht 280 million. IFS 2. Mr. Ley Soon Kie (Singapore) issued was the Director of the letter of guarantee IFS Capital Holdings with the same (Thailand) Ltd., and amount of the loan to the Director of the the Company; Company • The interest rate was 3. Mr. Tan Ley Yen equivalent to the cost was the Director of of fund plus 1%; IFS Capital Holdings • The due date of the (Thailand) Ltd., and principal repayment the Director and and interest payment CEO of the Company. was on 30th March 2009; • The contract had a period of 2 months with effect on the signed date of the contract.

2009

- Beginning Balance - Loan (Repaid) - Ending Balance - Received Interest

62

Amount (Baht) 2010

2011

Opinions of the Audit Committee

1. IFS (Singapore) should issue the letter of guarantee to the Company which was equivalent to the loan amount, of which the condition was the same as the bank; 2. After the loan, the Company still had credit facilities with the financial institutions which was enough for the business operations.

280,000,000 (280,000,000) -

-

-

2,466,658

-

-

2554 : ( ) ( ! )

In addition, the transaction was the connected transaction, accounting for 9.82% of the Company’s total assets, which needed an approval from the meeting of the Board of Directors. 3. The interest rate was at the Company’s cost of fund plus 100 basis points which was the market practice in Thailand for related party’s loan transaction.

Related Party Transactions / # !

In necessity and the rationale of the transactions. The connected transactions were necessary and reasonale, which arose to the utmost benefit for the Company in the normal business operation and were transacted at an arm’s length basis as if performed with external parties for the connected transactions with the market prices or the external parties’ reference prices.

Measures or procedures for approving the entry into connected transactions If the Company planned to enter into a connected transaction, which was in the ordinary course of its business, with its director, executive officer or related person on a commercial agreement which a prudent person might enter into with another party under the similar circumstances and the Company maintained the power of negotiation independently from the other party’s influence in his/her capacity as the Company’s director, executive officer or related person, then the Company must propose the connected transaction for the Board’s consideration and approval in principle in order that the Management would be able to approve the entry into that connected transaction. If the Company planned to enter into a connected transaction, which was not in the ordinary course of its business, with a person with a possible conflict of interest, the connected transaction must be proposed for the Audit Committee’s examination of the reasonableness first. Consequently, the Audit Committee’s opinion on the connected transaction must be presented at the Board of Directors’ Meeting or the General Meeting of Shareholders to support the Board or the Shareholders in making a decision to approve the connected transaction. Each approval of the connected transaction must comply with the law on securities and exchange and any applicable regulations, notifications, orders and requirements of the SET. A person with a possible conflict of interest or the relevant interested person would not be entitled to vote on the entry into that transaction.

Future policy or direction regarding the entry into connected transactions To enter into a connected transaction in the future, the Company had a policy to follow its common business practice and to comply with the law on securities and exchange and any applicable regulations, notifications, orders and requirements of the SET and other relevant agencies. The Company would disclose its connected transactions in the notes to the financial statements, the annual report form (Form 56-1) and the annual report (Form 56-2).

Annual Report 2011 : IFS Capital (Thailand) PCL

63

Management Discussion and Analysis

+ & ?“ ! ' ' ! 6 ! !

+ ! * #" / ' + '"E 2554 ' @ ' # / '! - O

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%#/ $> ( $ - P' ? # ( & ' @ $; +) ! ! 92.13 # ' + "E 2554 K> 4.52 # ' #/ 5.16 ! "E $ - # ! • ; +) ! + c ! K> + ( ! ; +) ! + ; +) ! + - ! ' ## ; %#/; ! / '$ ; ! • ; +) ! $ $ ' K> + ( ! " ' " /! "E %#/; +) ! #" /& ) ') ) # ! %#/ #- '% '' @ "J # ; +) ! $ # # % ; +) ! $ $ ' %#/&' • ; +) ! + ' K> + ( ! K> &' ; +) ! Q %#/; ' @ ; - ; +) ! $ # # % ; '$> " / ; '$> " /) ; $ %#/; $ " K @ %#/; ) " & )/ ; $> !/ ( K> ! 4.90 # ' + "E 2554 ! - > $> ( K> SK "J "- & ' ' @ ' $> $ ; # ) / (Specic provision) %#/ # # $> (Collective provision) & - $> (- $> $ + ' #/ 106 + "E 2553 %#/ #/ 107 + "E 2554 -

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64

2554 : ( ) ( ! )

Management Discussion and Analysis / ) # + , ()

- $; +) ! ? @$ - ' ()$+ "E 2554 K> ; $ 21 ; 2554 $ " / L "J / ) D@Q$ # - ? @$ - ' ;;#! #/ 30 ? @$ "J #/ 23 + "E 2555 %#/ #/ 20 + "E 2556 %#/ 2557 ! ' @ - T ' ()$ ' ' $ 12 “? @$ �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

2554 268,791 173,427 23,857 56,932 14,576 92,131 12,416 55,785 23,930 11,905 164,756 56,605 108,150 40,306 67,844

2553 247,868 166,268 14,519 58,222 8,859 87,608 12,812 51,342 23,454 7,008 153,253 40,211 113,042 28,239 84,803

: ' %

&;

20,923 8.44 7,158 4.31 9,338 64.32 (1,290) (2.22) 5,717 64.53 4,523 5.16 (396) (3.09) 4,443 8.65 475 2.03 4,898 69.89 11,503 7.51 16,394 40.77 (4,891) (4.33) 12,067 42.73 (16,958) (20.00)

< $ E O $ 31 ; 2554 ' @ $ ! 2,255.04 # ' " $ ' $ ' ' $ "E 2553 K> 156.28 # ' #/ 7.45 - # ! K> # $>! (( ) S > %#/# $>- (( ) / / ! 223.73 # ' #/ 155.93 K> + ; S > ; ! 18.72 # ' #/ 144.98 %#/ K> $ ! 14.08 # ' #/ 420.97 SK + ( ! K> # $> (? @$ #; ) + O/ $ $ # # %#/ $ ' ! 14.52 # ' #/ 12.41 # # # $>! S > $ ! 75.60 # ' #/ 4.35 # # $ ; %#/ " O ! 5.02 # ' #/ 12.92 %#/ # # ? @$ - ' ()$! 4.28 # ' #/ 9.56

Annual Report 2011 : IFS Capital (Thailand) PCL

65

Management Discussion and Analysis / ) # + , ()

" O $ 31 ; 2554 ' @ $ $> ! 1,427.73 # ' K> 128.40 # ' #/ 9.88 ! O $ 31 ; 2553 - # ! K> ! ' ! 124.00 # ' #/ 9.96 %#/ K> " / O $> #" /& ) ! 2.92 # ' #/18.74 ! ) + -

O $ 31 ; 2554 $! 827.31 # ' K> 27.88 # ' #/ 3.49 ! O $ 31 ; 2553 - # ! ! "E 2554 "* #! : ' $ E% "

2554 2553 %

&;

$ E 2,255,043 2,098,765 156,279 7.45 %#/ $ ' 102,463 116,979 (14,516) (12.41) # ) ; 65 83 (17) (21.05) # $>! S > $ – 1,660,657 1,736,252 (75,595) (4.35) # $>! (( ) S > %#/# $>- (( ) / / – 367,207 143,481 223,726 155.93 + ; S > ; – 31,625 12,909 18,715 144.98 # > – ' @ $ $ 48 76 (28) (36.44) $ 17,425 3,345 14,080 420.97 _ ; $ +) "J # " / 141 140 1 0.97 $ ; %#/ " O – 33,844 38,867 (5,023) (12.92) $- - – 753 1,533 (780) (50.91) ? @$ - ' ()$ 40,460 44,738 (4,277) (9.56) $ 355 362 (7) (1.96) " 1,427,735 1,299,333 128,402 9.88 / / > ! ' 985,000 1,020,000 (35,000) (3.43) / / $ ; ' ) /+ K "E 200,000 100,000 100,000 100.00 ! $> – ' @ $ $ 225 225 n.a. $> $ 40,022 38,764 1,259 3.25 / / 184,000 125,000 59,000 47.20 " / O $> #" /& ) 18,487 15,569 2,918 18.74 ! ) + - 827,309 799,432 27,877 3.49 ( $ %#/ $ ) /%# 470,000 470,000 #; ( 31,746 31,746 (56) (39) (17) (43.58) ( ) $ K> ! "#$ %"# #; # / - - Q 25,617 17,984 7,632 42.44 / – ! 300,002 279,740 20,262 7.24 " % ! ) + -

2,255,043 2,098,765 156,279 7.45

66

2554 : ( ) ( ! )

Management Discussion and Analysis / ) # + , ()

Overall Performance The Company’s performance in 2011 was affected by the Great Flood, rising interest rates and the intense competition in the factoring business. Total factoring volume declined slightly by 0.15% from Baht 16,979 million in 2010 to Baht 16,953 million in 2011. However, the Company had been able to successfully build up its equipment financing business under leasing and hire purchase since re-launching it in August 2010. Total volume grew from Baht 52 million in 2010 to Baht 338 million in 2011.

Operating Results Revenue Total revenue was Baht 268.79 million in 2011, an increase of Baht 20.92 million or 8.44% from the previous year. This was mostly from the factoring business which made up 85.70% of the total revenue. Revenue from leasing and hire purchase increased to Baht 23.86 million, an increase of Baht 9.34 million or 64.32% from the previous year. This made up 8.88% of the total revenue. Other income amounted to Baht 14.58 million, an increase of Baht 5.72 million or 64.53% from the previous year. This was due mainly to an increase in commitment fee, gain from assets sold and bad debts recovery. Expenses Total expenses were Baht 92.13 million in 2011, an increase of Baht 4.52 million or 5.16% from the previous year. The increase was due mainly to: • Increase in business development expenses, due to higher travelling expenses, credit information expenses and machinery registration expenses. • Increase in employee benefits, due mainly to annual salary adjustment, provision for employee benefits relating to severance & long service awards, partly offset by a decrease in staff welfare and bonus. • Increase in administration expenses, due mainly to higher directors’ bonus, legal fees and computer maintenance, partly offset by a decrease in insurance expenses, directors’ remuneration, professional fees and rental expense. Allowance for Doubtful Accounts Allowance for doubtful accounts increased marginally by Baht 4.90 million in 2011 as per the policy of the Company for specific and collective provisions. The ratio of allowance for doubtful accounts to non-performing loan was 106 times in 2010 and 107 times in 2011. Finance Cost Finance cost was a major expense of the Company due to the nature of the lending business. In 2011, finance cost was Baht 56.61 million, an increase of Baht 16.39 million or 40.77% from the previous year due mainly to: 1) the increased in long-term borrowings from financial institutions to support the leasing and hire purchase business, and 2) the increased in cost of borrowings in tandem with the hike of the Bank of Thailand’s policy rate. Income Tax The Company paid total income tax of Baht 40.31 million in 2011, an increase of Baht 12.07 million from the previous year, due to in 2011 the Company had deferred tax expense of Baht 4.28 million, while in 2010 the Company had deferred tax income of Baht 7.13 million. The reason for the increase in deferred tax expense was that on 21st December 2011, the Royal Decree was published adopting a reduction in Corporate Income Tax (CIT) rate from 30% to 23% in 2012, and to 20% in 2013 and 2014. Since the Company had early adopted the deferred tax accounting under TAS 12 “Income Taxâ€? in 2010, the Company therefore had to make corresponding adjustment to the income statement in the fourth quarter of 2011 in line with International Accounting Standards. This caused the Company to have deferred tax expenses of Baht 7.56 million in 2011. The Company also had deferred tax income of Baht 3.28 million in 2011 arising from an increase in allowance for doubtful accounts, provision for employee benefits and from the leasing business.

Annual Report 2011 : IFS Capital (Thailand) PCL

67

Management Discussion and Analysis / ) # + , ()

Net Profit For the year 2011, the Company made a net profit of Baht 67.84 million, a decrease of Baht 16.96 million or 20% from the previous year. However, if excluding the one-time impact from the deferred tax asset revaluation due to the effect of the change in the corporate income tax rate, the Company would have a net profit of Baht 75.40 million, a decrease of Baht 9.40 million or 11.08% from the previous year. In thousand Baht Revenues and Expenses 2011 2010 Change Revenues Factoring income Hire purchase income Factoring commission and service fees Other income Expenses Selling expenses Administrative expenses Management benefit expenses Allowance for doubtful accounts Profit before Finance Cost and Income Tax Expenses Finance cost Profit before Income Tax Income tax expenses Net Profit

268,791 173,427 23,857 56,932 14,576 92,131 12,416 55,785 23,930 11,905 164,756 56,605 108,150 40,306 67,844

247,868 166,268 14,519 58,222 8,859 87,608 12,812 51,342 23,454 7,008 153,253 40,211 113,042 28,239 84,803

Amount 20,923 7,158 9,338 (1,290) 5,717 4,523 (396) 4,443 475 4,898 11,503 16,394 (4,891) 12,067 (16,958)

% 8.44 4.31 64.32 (2.22) 64.53 5.16 (3.09) 8.65 2.03 69.89 7.51 40.77 (4.33) 42.73 (20.00)

Financial Status Total Assets As at 31st December 2011, the Company had total assets of Baht 2,255.04 million, an increase of Baht 156.28 million or 7.45% from previous year. The main reasons for the increase were the increase in hire purchase and lease contract receivables of Baht 223.73 million or 155.93%, the increase in inventory finance receivables of Baht 18.72 million or 144.98%, and the increase in other current assets of Baht 14.08 million or 420.97% due mainly to an increase in tax receivables (VAT). These were partly offset by a decrease in cash and cash equivalents of Baht 14.52 million or 12.41%, decrease of factoring receivables by Baht 75.60 million or 4.35%, decrease of property, plant and equipment by Baht 5.02 million or 12.92%, and in deferred tax assets of Baht 4.28 million or 9.56%. Total Liabilities Total liabilities as at 31st December 2011 were Baht 1,427.73 million, an increase of Baht 128.40 million or 9.88% from the previous year. This was due mainly to an increase in borrowings from financial institutions of Baht 124 million or 9.96% and an increase in provision for employee benefits of Baht 2.92 million or 18.74%. Shareholders’ Equity Total shareholders’ equity as at 31st December 2011 was Baht 827.31 million, an increase of Baht 27.88 million or 3.49%. The reason for the increase was an increase in retained earnings due to the net profit of 2011 and offset by dividend payment.

68

2554 : ( ) ( ! )

Management Discussion and Analysis / ) # + , ()

Assets, Liabilities and Shareholders’ Equity Assets Cash and cash equivalents Current investments Factoring receivable, net Hire purchase and Lease contract receivable, net Inventory finance receivable, net Amounts due from a related company Other current assets Bank deposits held as collateral Property, plant and equipment, net Intangible assets, net Deferred tax assets Other non-current assets Liabilities Short-term loans from financial institutions Current portion of long-term loan Amount due to a related company Other current liabilities Long-term loan Provision for employee benefits Shareholders’ Equity Issued and paid-up share capital Premium on ordinary shares Unrealized gain (loss) on investments revaluation Retained earnings – Legal reserve Retained earnings – Unappropriated Total Liabilities and Shareholders’ Equity

2011

2010

2,255,043 102,463 65 1,660,657 367,207 31,625 48 17,425 141 33,844 753 40,460 355 1,427,735 985,000 200,000 225 40,022 184,000 18,487 827,309 470,000 31,746 (56) 25,617 300,002 2,255,043

2,098,765 116,979 83 1,736,252 143,481 12,909 76 3,345 140 38,867 1,533 44,738 362 1,299,333 1,020,000 100,000 38,764 125,000 15,569 799,432 470,000 31,746 (39) 17,984 279,740 2,098,765

In thousand Baht Change Amount 156,279 (14,516) (17) (75,595) 223,726 18,715 (28) 14,080 1 (5,023) (780) (4,277) (7) 128,402 (35,000) 100,000 225 1,259 59,000 2,918 27,877 (17) 7,632 20,262 156,279

% 7.45 (12.41) (21.05) (4.35) 155.93 144.98 (36.44) 420.97 0.97 (12.92) (50.91) (9.56) (1.96) 9.88 (3.43) 100.00 n.a. 3.25 47.20 18.74 3.49 (43.58) 42.44 7.24 7.45

Annual Report 2011 : IFS Capital (Thailand) PCL

69

Corporate Social Responsibility

& 6 2 '

&2 21 € " ' 5!

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70

2554 : ( ) ( ! )

Social Responsibility / , (- !

Over the 21 years of IFS’ existence, we have steadily developed and uphold our status as a good corporate citizen as it is one of our missions. Our goal is to integrate the concept of responsibility to society, community and business environment into policies and practices, covering internal and external activities. We believe that the corporate culture, which is structured around the core business values of integrity, morality, excellence, team spirit and commitment, is the good solid base for the achievement of our good corporate governance. In 2011, our CSR activities focused more on community development or to help communities, which included corporate outings and disaster relief operations. The Company joined hands with the Royal Thai Army in November 2011 to hand out relief supplies to the flood victims of Bang Kruay and Bangkok Noi Districts during the Great Flood crisis. The Company also donated to the victims of the Tsunami in Japan as well as to the Life Improvement Foundation of Children and Youth residing in Klong Toei area.

Annual Report 2011 : IFS Capital (Thailand) PCL

71

Report of the Board of Directors’ Responsibilities for the Financial Statements

' ! & 6 " ' { 2 ' ! ' ' !

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72

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Report of the Board of Director’s Responsibilities for the Financial Statements /

# , (- ! #

The Company’s Board is responsible for the financial statements of the Company as well as financial information presented in the annual report. The Company’s financial statements for the year ended 31st December 2011 have been prepared in accordance with Thailand’s Generally Accepted Accounting Principles (GAAP). In preparing the financial statements, appropriate accounting policies have been adopted and regularly adhered to, using careful discretion and reasonable estimates. As well, key information has been adequately disclosed in the notes to the financial statements. The Board also notes that all internal control systems contain its inherent limitations and no system of internal controls can provide absolute assurance against the occurrence of material errors, poor judgement in decision-making, human error, losses, fraud or other irregularities. However, the Board has put in place and maintained internal control systems, internal audit systems, risk management systems as well as appropriate and efficient corporate governance. The purpose is to ensure that the accounting information is accurate, complete and adequate, and that not only the Company’s assets and risk protection are properly maintained but also fraud and irregular actions are reasonably prevented. In this connection, the Board of Directors has appointed the Audit Committee with all of its members being independent directors. The Committee is responsible for ensuring the quality of financial reports, reviewing accounting policies, reviewing internal control systems, the internal audit systems and the risk management systems. As well, it is responsible for ensuring that the disclosure of information about related party transactions is complete, adequate and appropriate. The opinion of the Audit Committee is given in its report which is already included in this Annual Report. The Board is of the opinion that the overall internal control systems of the Company are adequate and appropriate and gives rise to the reasonable confidence that the Company’s financial statements of the year ended 31st December 2011 reflect rightly the Company’s financial status, performance and cash flows in an adequate and essence manner and have been audited by the certified auditors from Deliotte Touche Tohmatsu Jaiyos Co., Ltd. who provided opinion as stated in the Auditors’ Report which has already included in this Annual Report..

Mr. Lee Soon Kie Chairman of the Board

Mr. Tan Ley Yen Chief Executive Officer

Annual Report 2011 : IFS Capital (Thailand) PCL

73

Report of the Audit Committee

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74

2554 : ( ) ( ! )

Report of the Audit Committee / #

The Audit Committee of IFS Capital (Thailand) PCL. consists of 3 Independent Directors who are servicing on a two-year term, namely: 1. Dr. Thamnoon Ananthothai 2. Mr. Suvait Theeravachirakul 3. Mr. Niwat Kanjanaphoomin

Chairman of the Audit Committee Member Member

The Audit Committee performs their duties under the scope, duties, and responsibilities assigned by the Board of Directors which are in accordance with the Notification of The Stock Exchange of Thailand. In 2011, the Audit Committee conducted 4 meetings and the important details can be summarized as follows: •

Review of the quarterly financial statements and the 2011 annual financial statements that were mutually agreed between the Auditors and the Management to ensure the accuracy and compliance of the generally accepted accounting standards, and to provide sufficient, complete and credible disclosure.

•

Examination of the internal control system was performed to ensure that the Company has appropriate and effective internal controls in accordance with the report of the Internal Auditors from AMC International Consulting Co., Ltd. and IFS Capital Limited (Singapore). There were no significant weaknesses or flaws found.

•

Mutual examination with the Management to ensure the Company’s compliance with the requirements and rules of the Office of the Securities and Exchange Commission, The Stock Exchange of Thailand and the relevant laws governing the Company’s business operations.

•

Consideration, nomination and proposal of remuneration of the external auditors to the Board of Directors were reviewed and proposed to the shareholders’ meeting for approval.

•

Review of related party transactions or conflict of interests transactions were performed in accordance with the laws and the notification of The Stock Exchange of Thailand to ensure that the transactions were reasonable and provided the utmost benefits to the Company.

•

Providing opinion on important matters to the Board of Directors.

The Audit Committee had performed their duties with independence and provided their opinions with truthfulness. The Committee opined that the Company’s financial statements complied with the generally accepted accounting standards, had good corporate governance, and effective and adequate risk and internal control systems. Its operations were accurate and appropriate, pursuant to laws and regulations, and in accordance with the present business environment.

Dr. Thamnoon Ananthothai Chairman of the Audit Committee

Annual Report 2011 : IFS Capital (Thailand) PCL

75

Audit Report of Certified Public Accountant

' !" '6$# 1 / !,1

! :; #& " % ) I ' ( ) ) * ( # = ) ! - ! ' '% T / O $ 31 ; 2554 %#/ 2553 ' 'P P! '% "#$ %"# ! %#/ ' /% '"E > $ %- #/"E ' @ F %;""G- # (" / L ) ! ( ) ) SK ' ! "J ' ) ' - ; - %#/; ' #+ ' # $> ! "J ' ) '+ % ; P - ' # ! # - ! ' ! ! "b '- - ! '-

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- $ $ 9 ? 2555

76

) # $ " / T ! '' ()$ ' ( - # / '$ 4301 = E ) G' - B D / &;

2554 : ( ) ( ! )

Audit Report of Certified Public Accountant / # ,*' .-$ .

TO THE SHAREHOLDERS AND THE BOARD OF DIRECTORS IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED We have audited the accompanying statements of financial position of IFS Capital (Thailand) Public Company Limited as at December 31, 2011 and 2010, and the related statements of comprehensive income, changes in equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the aforementioned financial statements present fairly, in all material respects, the financial position of IFS Capital (Thailand) Public Company Limited as at December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Without qualifying our opinion, as discussed in Note 4 to the financial statements, since January 1, 2011, the Company adopted the new and revised Thai Accounting Standards and Thai Financial Reporting Standards issued by the Federation of Accounting Professions, which are effective for the financial statements for the accounting periods beginning on or after January 1, 2011 onwards, in preparation and presentation of this financial statements. The financial statements for the year ended December 31, 2010, presented herein for comparison, are presented in the new format to conform to the financial statements for the year ended December 31, 2011.

BANGKOK February 9, 2012

Chavala Tienpasertkij Certified Public Accountant (Thailand) Registration No. 4301 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD.

Annual Report 2011 : IFS Capital (Thailand) PCL

77

Financial Statements

' ' !

" % ) I ' ( ) ) * ( # = ) " * < ./ 31 2554 2553 : ' $ E $ %#/ $ ' # ) ; # $>! S > $ - # $>! (( ) S > $ ; ' ) /+ K "E - # $>- (( ) / / $ ; ' ) /+ K "E - + ; S > ; - # $> - ' @ $ $ $ $ $ _ ; $ +) "J # " / # $>! (( ) S > - # $>- (( ) / / - $ ; %#/ " O - $- - - ? @$ - ' ()$ $ $ $ E - " / ' ' "J K ' $>

78

2554 : ( ) ( ! )

7 8 9 10 11 26

12 9 10 13 5,14 15

2554

2553

102,463,129 65,167 1,660,656,902 13,278,400 129,914,394 31,624,675 48,068 17,424,515 1,955,475,250

116,978,870 82,544 1,736,252,367 10,008,111 56,392,787 12,909,319 75,626 3,344,658 1,936,044,282

141,355 7,445,792 216,568,661 33,844,234 752,563 40,460,458 355,150 299,568,213 2,255,043,463

140,001 6,025,074 71,055,418 38,867,103 1,532,916 44,737,597 362,250 162,720,359 2,098,764,641

Financial Statements /

" % ) I ' ( ) ) * ( # = ) " * < (', ) ./ 31 2554 2553 : ' " % ! & !

$> $ / / > ! ' / / $ ; ' ) /+ K "E ! $> - ' @ $ $ $> $ $> $ $> $ / / " / O $> #" /& ) $> $ "

2554

2553

16 17 26

985,000,000 200,000,000 225,219 40,022,418 1,225,247,637

1,020,000,000 100,000,000 38,763,540 1,158,763,540

17 19

184,000,000 18,486,999 202,486,999 1,427,734,636

125,000,000 15,569,469 140,569,469 1,299,333,009

Annual Report 2011 : IFS Capital (Thailand) PCL

79

Financial Statements /

" % ) I ' ( ) ) * ( # = ) " * < (', ) ./ 31 2554 2553 : ' " % ! & ! ( ) ! / '$ ( 470,000,000 #; #/ 1 ' $ %#/) /%# ( 470,000,000 #; #/ 1 ' ) / -P

#; #; /

! %# - Q ! ; " / ' ! - $ K> ! "#$ %"# #; # ! " % ! ) + -

- " / ' ' "J K ' $>

80

2554 : ( ) ( ! )

2554

2553

470,000,000

470,000,000

470,000,000

470,000,000

21

31,746,399

31,746,399

23

25,616,813 300,001,648

17,984,452 279,739,555

(56,033) 827,308,827 2,255,043,463

(38,774) 799,431,632 2,098,764,641

20

Financial Statements /

" % ) I ' ( ) ) * ( # = ) " ) * & "H* H # " } Â &* ./ 31 2554 2553 : ' -

2554

2553

! S > $ ! + ) S > ! (( ) ; $ %#/' ! S > $

173,426,503 1,736,890 22,120,027 56,931,737 14,576,217 268,791,374

166,268,521 2,594,454 11,924,524 58,221,643 8,859,106 247,868,248

; +) ! ; +) ! + ; +) ! + ' ; - '% ' ; $> !/ ( ; +) !

12,415,943 55,784,847 23,929,717 11,905,280 104,035,787

12,811,698 51,341,815 23,454,263 7,007,505 94,615,281

164,755,587 56,605,471 108,150,116

153,252,967 40,211,418 113,041,549

40,305,662 67,844,454

28,238,785 84,802,764

(17,259) (17,259) 67,827,195

(135,442) (135,442) 84,667,322

0.14 470,000,000

0.21 398,986,301

28

- %#/? @$ - ? @$ ? @$ ; B ;

15, 25

'P P! $ > ! "#$ %"# #; # 'P P! '"E - ! ? @$ ; B J J& ; ; B - ! " $ " K

&; - /+ L +

;

20

-

- " / ' ' "J K ' $>

Annual Report 2011 : IFS Capital (Thailand) PCL

81

Financial Statements /

" % ) I ' ( ) ) * ( # = ) " * ./ , # " } Â &* ./ 31 2554 2553 : ' -

: 1 2553

- % ; %

) -

& % - ;

N

350,000,000

-

(

20

120,000,000

-

#;

21

-

31,746,399

14,384,452 230,036,791

96,668

!

& !

594,517,911

-

-

-

120,000,000

-

-

-

31,746,399

-

-

84,802,764

-

84,802,764

-

(31,500,000)

-

(31,500,000)

(3,600,000)

-

-

22

-

-

- Q

23

-

-

-

-

3,600,000 -

-

(135,442)

(135,442)

: 31 ' 2553

470,000,000

31,746,399

17,984,452 279,739,555

(38,774)

799,431,632

: 1 2554

470,000,000

31,746,399

17,984,452 279,739,555

(38,774)

799,431,632

-

-

-

67,844,454

-

67,844,454

-

(39,950,000)

-

(39,950,000)

(7,632,361)

-

-

"* #!

22

-

-

- Q

23

-

-

-

-

"#$ %"# #; # : 31 ' 2554

470,000,000

31,746,399

- " / ' ' "J K ' $>

82

B B &

E !

! & ! ; B (! - ) B !H"

&

% ) -

-

"* #!

"#$ %"# #; #

; B

2554 : ( ) ( ! )

7,632,361 -

-

25,616,813 300,001,648

(17,259)

(17,259)

(56,033)

827,308,827

Financial Statements /

" % ) I ' ( ) ) * ( # = ) " * # " } Â &* ./ 31 2554 2553 : ' -

2554

2553

% & & ;

? @$ " '" ; $> !/ ( ! ! # ( ) ! /- ! ; +) ! '$> ! ; +) ! #" /& ) ; ; %#/; - !

108,150,116

113,041,549

11,905,280 (542,056) 54,920,676 2,917,530 6,365,260 183,716,806

7,007,505 (687,196) 36,281 39,369,538 2,724,897 6,402,592 167,895,166

69,327,910 (6,203,459) (222,715,494) (19,159,985) 27,558 (14,079,857) 7,100 (1,354)

33,340,752 19,044,327 30,836,575 (13,914,965) (38,315) 5,233,597 130,400 (1,625)

225,219 (3,310,972) (12,166,528) (53,552,934) (32,712,688) (98,432,150)

(10,026) 2,968,128 (352,000) 245,132,014 (38,256,026) (39,713,047) 167,162,941

( K> ) # #

# $>! S > $ # $>! (( ) S > # $>- (( ) / / + ; S > ; # $>' @ $ $ $ $ _ ; $ +) "J # " / $> K> (# # ) ! $>' @ $ $ $> $ $> $ ! ! ! '$> ! ? @$ ! (+) "+ ) !

Annual Report 2011 : IFS Capital (Thailand) PCL

83

Financial Statements /

" % ) I ' ( ) ) * ( # = ) " * (', ) # " } Â &* ./ 31 2554 2553 : ' % & & -

! S > ! S > $- - ! S > # ') /! # $> (( ) S > "J # '! +) "+ ! #

2554

2553

(540,153) (135,494) 542,056 (133,591)

(10,657,711) (149,800) (29,325) 1,487,442 22,777 (9,326,617)

% & & &

! ; / / > '! / / ! ; / / ! "* # '! ( ! #; ( ! (+) "+ ) ! !

(35,000,000) 300,000,000 (141,000,000) (39,950,000) 84,050,000

(460,000,000) 300,000,000 (75,000,000) (31,500,000) 120,000,000 31,746,399 (114,753,601)

%#/ $ ' K> (# # ) %#/ $ ' O - "E % : "

(14,515,741) 116,978,870 102,463,129

43,082,723 73,896,147 116,978,870

- " / ' ' "J K ' $>

84

2554 : ( ) ( ! )

Financial Statements /

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2011 AND 2010 BAHT Notes

2011

2010

102,463,129

116,978,870

ASSETS CURRENT ASSETS Cash and cash equivalents Current investments

7

65,167

82,544

Factoring receivable, net

8

1,660,656,902

1,736,252,367

Current portion of hire purchase receivable, net

9

13,278,400

10,008,111

Current portion of lease contract receivable, net

10

129,914,394

56,392,787

Inventory finance receivable, net

11

31,624,675

12,909,319

Amounts due from a related company

26

48,068

75,626

17,424,515

3,344,658

1,955,475,250

1,936,044,282

Other current assets Total Current Assets NON-CURRENT ASSETS Bank deposits held as collateral

12

141,355

140,001

Hire purchase receivable, net

9

7,445,792

6,025,074

Lease contract receivable, net

10

216,568,661

71,055,418

Property, plant and equipment, net

13

33,844,234

38,867,103

752,563

1,532,916

40,460,458

44,737,597

355,150

362,250

299,568,213

162,720,359

2,255,043,463

2,098,764,641

Intangible assets , net Deferred tax assets Other non-current assets Total Non-current Assets TOTAL ASSETS

5,14 15

Notes to the financial statements form an integral part of these statements

Annual Report 2011 : IFS Capital (Thailand) PCL

85

Financial Statements /

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT DECEMBER 31, 2011 AND 2010 BAHT Notes

2011

2010

LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term loans from financial institutions

16

985,000,000

1,020,000,000

Current portion of long-term loans

17

200,000,000

100,000,000

Amounts due to a related company

26

225,219

Other current liabilities Total Current Liabilities

-

40,022,418

38,763,540

1,225,247,637

1,158,763,540

NON-CURRENT LIABILITIES Long-term loans

17

184,000,000

125,000,000

Provision for employee benefits

19

18,486,999

15,569,469

202,486,999

140,569,469

1,427,734,636

1,299,333,009

470,000,000

470,000,000

470,000,000

470,000,000

21

31,746,399

31,746,399

23

25,616,813

17,984,452

300,001,648

279,739,555

(56,033)

(38,774)

827,308,827

799,431,632

2,255,043,463

2,098,764,641

Total Non-current Liabilities TOTAL LIABILITIES EQUITY SHARE CAPITAL

20

Authorized share capital 470,000,000 ordinary shares of Baht 1 each Issued and paid-up share capital 470,000,000 ordinary shares of Baht 1 each, fully paid-up ADDITIONAL PAID-UP CAPITAL Premium on ordinary shares RETAINED EARNINGS Appropriated Legal reserve Unappropriated OTHER COMPONENTS OF EQUITY - UNREALIZED LOSS ON INVESTMENTS TOTAL EQUITY TOTAL LIABILITIES AND EQUITY Notes to the financial statements form an integral part of these statements

86

2554 : ( ) ( ! )

Financial Statements /

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENTS OF COMPREHENSIVE INCOME AS AT DECEMBER 31, 2011 AND 2010 BAHT Notes

2011

2010

173,426,503

166,268,521

Hire purchase income

1,736,890

2,594,454

Finance lease income

22,120,027

11,924,524

Factoring commission and service fees

56,931,737

58,221,643

Other income

14,576,217

8,859,106

268,791,374

247,868,248

Selling expenses

12,415,943

12,811,698

Administrative expenses

55,784,847

51,341,815

23,929,717

23,454,263

11,905,280

7,007,505

104,035,787

94,615,281

164,755,587

153,252,967

56,605,471

40,211,418

108,150,116

113,041,549

40,305,662

28,238,785

67,844,454

84,802,764

(17,259)

(135,442)

(17,259)

(135,442)

67,827,195

84,667,322

0.14

0.21

470,000,000

398,986,301

REVENUE Factoring income

Total Revenue

EXPENSES

Management benefit expenses

28

Allowance for doubtful accounts Total Expenses

PROFIT BEFORE FINANCE COST AND INCOME TAX EXPENSES FINANCE COST PROFIT BEFORE INCOME TAX EXPENSES INCOME TAX EXPENSE

15, 25

PROFIT FOR THE YEARS OTHER COMPREHENSIVE LOSS Unrealized loss on investments OTHER COMPREHENSIVE LOSS FOR THE YEARS, NET OF TAX NET COMPREHENSIVE INCOME FOR THE YEARS

BASIC EARNINGS PER SHARE WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES

BAHT 20

SHARES

Notes to the financial statements form an integral part of these statements

Annual Report 2011 : IFS Capital (Thailand) PCL

87

Financial Statements /

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENTS OF CHANGES IN EQUITY AS AT DECEMBER 31, 2011 AND 2010 BAHT Notes

Beginning balance as at January 1, 2010

Issued and paid-up share capital

Retained earnings Premium on Ordinary Shares Appropriated UnappropriLegal reserve ated

350,000,000

-

14,384,452

Total equity

96,668

594,517,911

Capital increase ordinary shares

20

120,000,000

-

-

-

-

120,000,000

Premium on share

21

-

31,746,399

-

-

-

31,746,399

-

-

-

84,802,764

-

84,802,764

-

(31,500,000)

-

(31,500,000)

(3,600,000)

-

-

Net income Dividend paid

22

-

-

Legal reserve

23

-

-

-

-

-

Ending balance as at December 31, 2010

470,000,000

31,746,399

17,984,452

Beginning balance as at January 1, 2011

470,000,000

31,746,399

-

Changes in investment value

Net income

3,600,000

(135,442)

(135,442)

279,739,555

(38,774)

799,431,632

17,984,452

279,739,555

(38,774)

799,431,632

-

-

67,844,454

-

67,844,454

-

(39,950,000)

-

(39,950,000)

(7,632,361)

-

-

Dividend paid

22

-

-

Legal reserve

23

-

-

-

-

-

470,000,000

31,746,399

25,616,813

Changes in investment value Ending balance as at December 31, 2011

Notes to the financial statements form an integral part of these statements

88

230,036,791

Other Components of EquityUnrealized Gain (Loss) on investments

2554 : ( ) ( ! )

7,632,361

-

300,001,648

(17,259)

(17,259)

(56,033)

827,308,827

Financial Statements /

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS AS AT DECEMBER 31, 2011 AND 2010 BAHT Notes

2011

2010

108,150,116

113,041,549

11,905,280

7,007,505

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax expenses Adjustments for : Allowance for doubtful accounts Gain from sales of investment (Gain) Loss from sales/write-off fixed assets

-

(687,196)

(542,056)

36,281

54,920,676

39,369,538

Employee benefits expense

2,917,530

2,724,897

Depreciation and amortization

6,365,260

6,402,592

183,716,806

167,895,166

Factoring receivable

69,327,910

33,340,752

Hire purchase receivable

(6,203,459)

19,044,327

Lease contract receivable

(222,715,494)

30,836,575

(19,159,985)

(13,914,965)

27,558

(38,315)

(14,079,857)

5,233,597

7,100

130,400

(1,354)

(1,625)

225,219

(10,026)

(3,310,972)

2,968,128

Interest expenses

Operating assets (increase) decrease

Inventory finance receivable Amounts due from a related company Other current assets Non-other current assets Fixed deposits pledged as collateral Operating liabilities increase (decrease) Amounts due to a related company Other current liabilities Non-other current liabilities Cash generated from operating activities

-

(352,000)

(12,166,528)

245,132,014

Interest expenses paid

(53,552,934)

(38,256,026)

Income tax paid

(32,712,688)

(39,713,047)

(98,432,150)

167,162,941

Net cash provided by (used in) operating activities

Annual Report 2011 : IFS Capital (Thailand) PCL

89

Financial Statements /

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED STATEMENTS OF CASH FLOWS (CONTINUED) AS AT DECEMBER 31, 2011 AND 2010 BAHT Notes

2011

2010

Cash paid for purchases of fixed assets

(540,153)

(10,657,711)

Cash paid for purchases of intangible assets

(135,494)

(149,800)

CASH FLOWS FROM INVESTING ACTIVITIES

Cash paid for purchases of investment

-

(29,325)

Proceeds from sales of investment

-

1,487,442

Cash received from sale of fixed assets

542,056

22,777

Net cash used in investing activities

(133,591)

(9,326,617)

Cash paid for short-term loan

(35,000,000)

(460,000,000)

Cash received from long-term loans

300,000,000

300,000,000

(141,000,000)

(75,000,000)

(39,950,000)

(31,500,000)

CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for long-term loan Cash paid for dividend Proceeds from capital increase ordinary shares

-

120,000,000

Proceeds from premium in ordinary shares

-

31,746,399

Net cash provide by (used in) financing activities

84,050,000

(114,753,601)

Net increase (decrease) in cash and cash equivalents

(14,515,741)

43,082,723

Cash and cash equivalents at beginning of the year

116,978,870

73,896,147

Cash and cash equivalents at end of the year

102,463,129

116,978,870

Notes to the financial statements form an integral part of these statements

90

2554 : ( ) ( ! )

Financial Statements /

" % ) I ' ( ) ) * ( # = ) # #'& " " # " } Â &* ./ 31 2554 2553 1.

! ) B % ;

! = ' @ ! / '$ "J ' @ ! + $ ; 2534 ? +- Q " / L %#/ ! / '$ %" ? "J ' @

) ! ' / O ) $ 18 @ 2550 & $ - > $ ) > 20 ; # $ # $ 1168/55 / 4 % H - I ! # ' @ % 'S > $ ! (( ) S > %#/ (( ) / / O $ 31 ; 2554 %#/ 2553 ' @ $ + ( % ' @ F %;""G- # &ƒ# > (" / L ) ! #/ 36.64 %#/ IFS Capital Limited SK ! / '$ + " / L ;&" #/ 36.49 > $> + ( IFS Capital Limited ; Phillip Asset Pte. Ltd. SK ! / '$ + " / L ;&" #/ 40.40 ' @ $ ? "J ; - %#/ '+' ( -" / ' !-

- 17 % / )' (( - " / ' ! ; - .L. 2542 %#/ '+' ( -" / ' ! ; - # $ 3 Q ; 2552 ! c ! ; " / ' !' ()$ (21) ! ' $> 1. %FJ - 2. + ) %''#$ S %#/+ ) S > /% '' $ $? / - (( + ) %''#$ S %#/+ ) S > > $> ' @ !/- "b ' - - $ + +' ( -" / ' ! ; - $ 27 DL! 2552 ' @ '+' ( -" / ' !' ()$ (21) !' + ) %''#$ S %#/+ ) S > ; " / ? /%#/ ; ! $ +) + - ; $ +) + ;# ; %#/ +) @- % '' + %#/ ' - ! c ! ; + " / ' !- $ - $ 8 @ 2553 $ 27 @ 2553 ' @ ' ( -! ' @ F %;""G- # # -P " / L ;&" SK "J + ( ' @ + $ + - " /) ) %#/ ( ! / '$ + -# # % " / L $ 3 ; 2553 ' @ ' @ + '" /) ) ! 120,000,000 #; $ - #/ 1.00 ' > > 120,000,000 ' & + ; #/ 1.35 ' "J > > 162,000,000 ' %#/ $ 5 ; 2553 ' @ ! / '$ ( $ $ ) /%# ! 120,000,000 120,000,000 ' # ' / O ) %# $ 6 ; 2553 ' @ ) /; $ %#/ '+' ( -+ " / ' !' ()$ (21) !' + ) %''#$ S %#/+ ) S > ; " / ? /%#/ ; ! $ +) + - ; $ +) + ;# ; %#/ +) @-

%#/+ $ -# # % " / L $ %! ;O/ -# # % " / L + ' ( ' @ F %;""G- # (" / L ) ! ( ) ) "J # ! / '$ + -# # % " / L ! 470 # #; $ - #/ 1 ' 470 # ' + S > + -# # % " / L & +) ) + S > # “IFS� %#/ + S > - > %- $ 10 ; 2553 "J - "

2.

:OE & ; % ;

' $ > ! "J ' %#/ "J ? @ -

- T ' ()$%#/ "$ b '- ' ()$ $ ' "+ " / L > $ > ' $ > $ - " / ; ! $ K > % T / # %#/ /% - # %#/ "$ b '- ' ()$ $ ' "+ " / L

Annual Report 2011 : IFS Capital (Thailand) PCL

91

Financial Statements /

' $ > ! K > - " / L c ! ; # $ 28 2554 $- $+ ' .L. 2554 SK $ # ' ; '+) ' ' $ $ ' / / # ' ()$ $ + # $ 1 ; 2554 "J - " & ' '"E > $ 31 ; 2553 $ % " $ ' $ ' % - "%''+ + ;# ' ' '"E > $ 31 ; 2554 ? ) )$ ' ()$ " / L $ $ ' - T ' ()$%#/ -$;

- T ' ()$ $ $ #' ; '+) ' ' $ $ ' / / # ' ()$ $ + # $ 1 ; 2556 "J - " - " $> K / ' ' $ 12 ' ' $ 20 ' ' $ 21 (" '" 2552)

? @$ ' ()$ ' ! T' #%#/ "G # $ '; ) # ! T' # # / '! "#$ %"# - %# "#$ - - " / L

K / ' ' $ 10 ' ' $ 21 ' ' $ 25

; ) # ! T' #- O$ $ $; $ / ! /! ' ! ? @$ - '" /& ) ! $ ; ; ; $ -$ ; + ? @$ - "#$ %"# ? ? @$ !

_` ' ' @ ; !/ - T ' ()$%#/ -$;

- T ' ()$ ' ' $ $ '' @ "b ' - ' ' ' @ - T # $ #' ; '+) & _` ' ' @ / " / # / '- ' + "E $ +) - T # P- ' @ - T ' ()$ ' ' $ 12 “? @$ � "b ' - ' ; '+) ( - 4) 3.

- G / ; / ' $> ! K> & +) O] ; + #; ; " / ' ' - $ "G + & ' ' ()$ & ' ' ()$ $ ; ( ' @ & " $ - " $> 3.1 %#/ $ ' %#/ $ ' " / ' + _ ; %#/ _ " /! $ ; ' ) /; ? + 3 %#/ _ ; $ " "J # " / 3.2 ' ! S > $ ' - O] ; ; ! + ) S > ' & +) $ - '$> $ % ! (effective interest rate) ! (( ) ' & $ - '$> $ % ! (effective interest rate) '$> ! + ) S > %#/! (( ) ' - O] ; ; '$> $ ) /- - 3 ' - O] ; $ %#/' ! S > $ ' "J '&

92

2554 : ( ) ( ! )

Financial Statements /

3.3 # $> # $>! S > $ % ! ; $> !/ ( # $>! (( ) S > %#/# $>- (( ) / / % & +) ; ; - (( ) S > %#/ (( ) / / ? # ! - > %#/; $> !/ (%# 3.4 ; $> !/ ( ; $> !/ (- > - ! $> $ ; !/ $ P' & ; / T / # $>%- #/ ' @ $ O] + - > ; $> !/ ( $>

# $>; ) /- > %- 3 %- 6 # $>; ) /- > %- 6 %- 12 # $>; ) /- > %- 12 K> "

- #/ # $> 20 50 100

! > ' @ ! O - > ; $> !/ (& +) $ "J # # $> (Collective basis) '# $>! S > $ , # $> (( ) S > , # $>- (( ) / / %#/ + ; S > ; $ ! ) > " - %#/# $> $ ; ) / 3 $ $# @O/; $ ; -;# ;#K & +) # $> (+ $- " / O ; $> !/ ( ) + %- #/ #

( - 8, 9, 10 %#/ 11) 3.5 # ) ; # ) ; "J # + - & ! " / ? "J # %#/% -

#; - ! "#$ %"# + #; - ' + ! + O$ ; #; # " / ? ' @ !/ ' # # + ' 'P P! 3.6 $ ; %#/ " O

$ ; %#/ " O % - ; ; ; /

; / ; ; ) - $ ; O! ; $ > ; ) O S > - ; " / ) & #$ - - j+ # ; ) $ ' @ $ j K #$ ; +) ! - X + S > ; ) & - ; ; ) - ! - ; ) > ; ; ) - $ ; ; ; O& +) $ - - +) & " / O SK $ - " $> ; ) - 40 "E ; - %- %#/ ; +) 5 "E / 5 "E 3.7 $- - %#/; - ! $- - % ; - S F% $- - % - ; ; - ! / ; - ! / % + ' 'P P! ; - ! $- - ; O! ; & +) $ - - +) " /& ) & " / O 3 "E

Annual Report 2011 : IFS Capital (Thailand) PCL

93

Financial Statements /

3.8 $ "J - - " / L ' @ %"# ; ' ()$+ # - - " / L $ K> / "E "J ' - - %# "#$ O $ %#/%"# ; %#/ $> $ "J - + # - - " / L SK ; # O $ - '% T / "J ' - - %# "#$ " / L ; % " / L O > ' @ ' %#/ ! " - - - " / L $ ) / %#/ $ ! %"# ; "J ; +) ! %#/ > K> 3.9 " / O $> #" /& ) ' @ ' " / O $> #" /& ) ' ) ) # ! + % - Q % " / L %#/" / O $> #" /& ) ' + '' @ "J # " / O $> #" /& ) # ; O& +) ; ; " / O - # ;O -L - " / ? (Actuarial Technique) "J " / O ! #; "*!! ' /% $ ; !/- ! + ;-%#/; O; # & +) - '$> ' - T' # $ $ # + # ;$ ' / / # $> # & " / O /% $ ; !/- ! + ;- > " / O ! - # %#/"*!! ! "#$ %"# " / O !/ ' "J ; +) ! + ' 'P P! ' ' / / # ' ()$ $ > > $> ; +) ! $ $ ' #" /& ) !/' K + ' 'P P! /! - # -# / / # ! ( - 19) 3.10 ? @$ ' @ - T ' ()$ ' ' $ 12 “? @$ � "b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

- T # " / SK $ # / '- % ! $> %#/ "G # $ ' %#/ $> $ ! K> O > > % %#/; +) ! ' ()$ K % " / O ' ! O - #? +- - O O O/ > # $ K> ! ! $; %- - "! " / O >

94

2554 : ( ) ( ! )

Financial Statements /

4.

; K / % K ( % - ( + P - > %- $ 1 ; 2554 ' @ +) - T ' ()$%#/ - T $ %#/" '" + S K & ? ) )$ ' ()$ SK + "b '- ' ' ' ' / / # ' ()$ $ + # $ 1 ; 2554 "J - " ! %#/ ' $> & - T ' ()$%#/ - T # $ # / ' "J / ; (- ' ' @ - T ' ()$ ' ' $ 1 (" '" 2552) “ ' � $ "#$ %"# $ ' % + ' !K $ # / ' - ! " / ? + ' ' '"E > $ 31 ; 2553 SK % " $ ' $ ' ( - 2)

5.

& # ( + '% T / O $ 31 ; 2553 $ ! " / ? + + ;# ' ! " / ? + '% T / O $ 31 ; 2554 & ; $ ) F# ! 570,000 ' ! % + $ % "J K $- - -

6.

! ) $ % 6.1 $ ; %#/ " O '"E $ 31 ; 2554 %#/ 2553 $ - " $>

! $>S > ' S > " O

! S > " O

! $> S > $- - " (% + $> $ ) 6.2

2553 84,831 10,594,815 (10,657,711) 21,935

2554 91,673 43,821 (135,494) -

2553 241,473 (149,800) 91,673

$- - '"E > $ 31 ; 2554 %#/ 2553 $ - " $>

! $>S > $- - ' S > $- - ! S > $- - ! $> S > $- - " (% + $> $ ) 7.

2554 21,935 518,218 (540,153) -

- # ) ; O $ 31 ; 2554 %#/ 2553 " / ' -

- - - ! - + ; - -# + " / L -

137,936 137,936

2554 ; B ! " ) - ' B !H"

(72,769) (72,769)

65,167 65,167

Annual Report 2011 : IFS Capital (Thailand) PCL

95

Financial Statements /

-

- - - ! - + ; - -# + " / L - 8.

137,936 137,936

2553 ; B ! " ) - ' B !H"

(55,392) (55,392)

82,544 82,544

) "& Q " ' - - ' O $ 31 ; 2554 %#/ 2553 # $>! S > $ - " / '

# $>! S > $ ; $> !/ ( (*) ! $>! S > $ # $>! S > $ -

2554 2,156,456,009 (81,802,402) 2,074,653,607 (413,996,705) 1,660,656,902

2553 2,169,944,831 (75,534,847) 2,094,409,984 (358,157,617) 1,736,252,367

(*) O $ 31 ; 2554 %#/ 2553 ' @ $ ! O ; $> !/ (%'' # # $> (Collective basis) '# $>! S > $ $ ! ) > " - %#/# $> $ ; ) / 3 "J ! 1,495,938 ' %#/ 1,893,877 ' - # '

O $ 31 ; 2554 %#/ 2553 # $>! S > $ - % - $> $ ; ) / $ - " $> 2554 ? + $ ; ' 1,373,309,109 ; ' ) /: 3 688,878,558 3 - 6 15,820,092 6 - 12 1,950,511 " '&; $> 1,115,350 # $> $ / ; $- Q 75,382,389 2,156,456,009

96

2554 : ( ) ( ! )

2553 1,389,337,862 693,818,634 14,595,612 981,752 1,475,350 69,735,621 2,169,944,831

Financial Statements /

9.

) "& // Q " - - ' O $ 31 ; 2554 %#/ 2553 # $>! (( ) S > - " / '

# $>- ! + (( ; # - > ; $> !/ ( (*) # $> $ ; ' ) /+ K "E - > # $> $ ; ' ) /+ K "E - # $>! (( ) S > -

2554 26,842,239 (2,466,143) 24,376,096 (3,651,904) 20,724,192 14,799,161 (1,520,761) 13,278,400 7,445,792

2553 19,858,422 (1,685,785) 18,172,637 (2,139,452) 16,033,185 11,146,049 (1,137,938) 10,008,111 6,025,074

(*) O $ 31 ; 2554 %#/ 2553 ' @ $ ! O ; $> !/ (%'' # # $> (Collective basis) '# $>! (( ) S > $ ! ) > " - %#/# $> $ ; ) / 3 "J ! 229,712 ' %#/ 44,960 ' - # '

# $>! (( ) S > - % - $> $ ; ) / $ - " $>

? + $ ; ' ) / ; ' ) /: 3 # $> $ / ; $- Q

2554 21,627,304

2553 17,552,958

5,214,935 26,842,239

2,305,464 19,858,422

Annual Report 2011 : IFS Capital (Thailand) PCL

97

Financial Statements /

10. ) " // - - ' O $ 31 ; 2554 %#/ 2553 # $>- (( ) / / - " / '

# $>- ! + (( ; # ! ! (( ) / / - > ; $> !/ ( (*) # $> $ ; ' ) /+ K "E ! ! (( ) / / - > # $> $ ; ' ) /+ K "E - # $>- (( ) / / -

2554 535,585,106 (127,268,662) (57,795,359) 350,521,085 (4,038,030) 346,483,055 169,641,073 (29,932,758) (9,793,921) 129,914,394 216,568,661

2553 197,086,563 (53,212,814) (16,068,158) 127,805,591 (357,386) 127,448,205 86,956,756 (21,510,848) (9,053,121) 56,392,787 71,055,418

(*) O $ 31 ; 2554 %#/ 2553 ' @ $ ! O ; $> !/ (%'' # # $> (Collective basis) '# $>- (( ) / / $ ! ) > " - %#/# $> $ ; ) / 3 "J ! 3,840,496 ' %#/ 357,386 ' - # '

O $ 31 ; 2554 %#/ 2553 # $>! (( ) / / - % - $> $ ; ) / $ - " $>

? + $ ; ' ) / ; ' ) /: 3 # $> $ / ; $- Q

2554 533,212,708

2553 197,086,537

1,664,265 708,134 535,585,107

26 197,086,563

2554 34,855,294 (3,230,619) 31,624,675

2553 15,695,309 (2,785,990) 12,909,319

11. ( ) - - ' O $ 31 ; 2554 %#/ 2553 + ; ; - " / '

+ ; ; ; $> !/ ( (*) + ; ; -

(*) O $ 31 ; 2554 %#/ 2553 ' @ $ ! O ; $> !/ (%'' # # $> (Collective basis) ' +

; ; $ ! ) > " - %#/# $> $ ; ) / 3 "J ! 458,715 ' %#/ 14,087 ' - # '

98

2554 : ( ) ( ! )

Financial Statements /

O $ 31 ; 2554 %#/ 2553 + ; ; % - $> $ ; ) / $ - " $>

? + $ ; ' ) / ; ' ) /: 3 # $> $ / ; $- Q

2554 32,083,390

2553 12,923,405

2,771,904 34,855,294

2,771,904 15,695,309

12. R ' ( C

O $ 31 ; 2554 %#/ 2553 _ " /! ; ! 141,355 ' %#/ 140,001 ' - # ' " "J # " / ;> " / ; + '' @ 13. % - :E - - ' $ ; %#/ " O - O $ 31 ; 2554 %#/ 2553 " / ' : $ !H"

1 2554 -

; ) - $ 3,417,277 ; ) - ; 37,457,987 ; - %- %#/ ; +) 36,587,466 518,218 / 6,633,933 ; 84,096,663 518,218 ; ) - ; ; - %- %#/ ; +) / ; ; /

$ ; %#/ " O -

(15,797,454) (24,849,957) (4,582,149) (45,229,560) 38,867,103

(936,449) (3,532,849) (1,071,789) (5,541,087)

&;

: 31 ' 2554

(978,494) (978,494)

3,417,277 37,457,987 37,105,684 5,655,439 83,636,387

978,494 978,494

(16,733,903) (28,382,806) (4,675,444) (49,792,153) 33,844,234

Annual Report 2011 : IFS Capital (Thailand) PCL

99

Financial Statements /

: 1 2553

$ !H"

&;

: 31 ' 2553

-

; ) - $ ; ) - ; ; - %- %#/ ; +) / ;

3,417,277 37,457,987 28,389,900 5,381,994 74,647,158

9,342,876 1,251,939 10,594,815

(1,145,310) (1,145,310)

3,417,277 37,457,987 36,587,466 6,633,933 84,096,663

; ) - ; ; - %- %#/ ; +) / ; ; /

$ ; %#/ " O -

(14,861,004) (22,633,073) (3,468,608) (40,962,685) 33,684,473

(936,450) (3,303,136) (1,113,541) (5,353,127)

1,086,252 1,086,252

(15,797,454) (24,849,957) (4,582,149) (45,229,560) 38,867,103

5,541,087 5,353,127

; " - 31 ' 2554 2553

O $ 31 ; 2554 %#/ 2553 ; - ; %#/ " O $ ; ; > ! %# %- ; +) $! 22,921,031 ' %#/ 19,834,545 ' - # ' 14. $ EB - - ' $- - - O $ 31 ; 2554 %#/ 2553 " / ' : $ !H"

1 2554 -

; $ ) F#

570,000 &" % ; -

3,380,224 43,820 ; 3,950,224 43,820 &; &" % ; -

; - ! /

$- - -

100

(2,417,308) (2,417,308) 1,532,916

(824,173) (824,173)

2554 : ( ) ( ! )

: 31 ' 2554

-

570,000 3,424,044 3,994,044

-

(3,241,481) (3,241,481) 725,563

Financial Statements /

: 1 2553 -

; $ ) F#

&" % ; -

; &; &" % ; -

; - ! /

$- - -

$ !H"

: 31 ' 2553

570,000 3,138,750 3,708,750

241,474 241,474

-

570,000 3,380,224 3,950,224

(1,367,843) (1,367,843) 2,340,907

(1,049,465) (1,049,465)

-

(2,417,308) (2,417,308) 1,532,916

; " - 31 ' 2554 2553

824,173 1,049,465

15. $ E# = B / ? @$ - ' ()$ O $ 31 ; 2554 %#/ 2553 $ #/ $ $>

? @$ - ' ()$

2554 40,460,458

2553 44,737,597

? @$ - ' ()$ O $ 31 ; 2554 %#/ 2553 " / ' # / ' ? @$ - " $> : ) ) : 31 ' 2553 (

; B ! - ( ! & ! 31 ' 2554 J J& ; $> !/ ( 24,245,303 (5,700,712) 18,544,591 $> ( $ / ; $ 7,275,949 (2,485,316) 4,790,633 ! (( ) 8,448,590 4,962,507 13,411,097 $ K> ! "#$ %"#

#; # - # 16,617 120 16,737 " / O $ > #" /& ) 4,670,841 (973,441) 3,697,400 X 80,297 (80,297) 44,737,597 (4,277,259) 120 40,460,458

Annual Report 2011 : IFS Capital (Thailand) PCL

101

Financial Statements /

: 31 ' 2552

; $> !/ ( $> ( $ / ; $ ! (( ) ( ) $ K> ! "#$ %"# #; # - # " / O $ > #" /& ) X

27,063,106 1,785,299 4,890,020

) ) (

; B ! - ( ! & !

J J& (2,817,803) 5,490,650 3,558,570 -

(41,429) 33,696,996

817,469 80,297 7,129,183

58,046 3,853,372 3,911,418

: 31 ' 2553 24,245,303 7,275,949 8,448,590

16,617 4,670,841 80,297 44,737,597

' @ $ ? @$ - ' ()$# # ! " '# - ? @$ - / ) D@Q$ ' ' $ 50 .L. 2554 ( - 25) 16. ) " & +

/ / > ! ' O $ 31 ; 2554 %#/ 2553 " / '

- † (( +)

2554 985,000,000

2553 1,020,000,000

O $ 31 ; 2554 %#/ 2553 ' @ $ / / > ! ' & $ - '$> #/ 2.15 - 4.35 - "E %#/ #/ 2.15 - 2.95 - "E - # ' 17. ) / / ! ' O $ 31 ; 2554 %#/ 2553 " / '

/ / ' / / $ ; ' ) /+ K "E

2554 184,000,000 200,000,000 384,000,000

2553 125,000,000 100,000,000 225,000,000

$ 14 ; 2552 ' @ (( / / ! ' % K & $ - '$> #/ THBFIX (3 ) + 2.75 - "E %#/ $ ) / - 3 - > %- $ ; 2553 K $ ; 2556 $ 25 ? 2554 ' @ (( / / ! ' % K & $ - '$> #/ 3.70 - 5.35 - "E %#/ $ ) / - 3 - > %- ? 2554 K ? 2557

102

2554 : ( ) ( ! )

Financial Statements /

- $ 4 Q ; 2554 ' @ (( / / ! ' % K & $ - '$> #/ MLR - 2.375 - "E %#/ $ ) / - 3 - > %- ; 2554 K ; 2557 18. - ; " $$

' @ ! - > #$> )$ ' $ ; &; # ! ; ' 1 "E %#/ ! / '$ "J #$> )$ - / )' (( - #$> )$ .L. 2530 '"E > $ 31 ; 2554 %#/ 2553 ' ' @ SK ' K "J ; +) ! + %#/' + ' $! 2.3 # ' %#/ 2.1 # ' - # ' 19. : " G E! $

' @ ; O" / O $> #" /& ) & " / O - # ;O -L - " / ? &

- T " / ' - ; # #/ 4 - # #/ 2 #/ 6 %#/ #/ 11 K> ' # - K> #/ 9 %#/ @$ O 60 "E " / O $> #" /& ) '"E > $ 31 ; 2554 %#/ 2553 " / ' 2554 " / O $> #- '% ' ) ) # ! ( - 19.1) " / O $> #- '% ' '' @ "J # ( - 19.2) " / O $> #" /& )

2553

16,173,993

13,536,314

2,313,006 18,486,999

2,033,155 15,569,469

19.1 " / O $> #- '% ' ) ) ! # ! "#$ %"# #; "*!! ' " / O $> #- '% ' ) ) ! # ! O $ 2554 %#/ 2553 % $> 2554

#; "*!! ' " / O $> - 13,536,314 - ' "*!! ' 2,096,226 - '$> 541,453

#; "*!! ' " / O $> "# 16,173,993

31 ;

2553 11,240,453 1,846,243 449,618 13,536,314

Annual Report 2011 : IFS Capital (Thailand) PCL

103

Financial Statements /

; +) ! $ '" / O $> #- '% ' ) ) ! # ! '"E > $ 31 ; 2554 %#/ 2553 " / ' 2554 2553 - ' "*!! ' 2,096,226 1,846,243 - '$> 541,453 449,618 ; +) ! $ '" / O $> #- '% ' ) ) ! # ! $ ' + ' 'P P! 2,637,679 2,295,861 19.2 " / O $> #- '% ' '' @ "J # "#$ %"# #; "*!! ' " / O $ > #- '% ' '' @ "J # O $ 2554 %#/ 2553 % $> 2554

#; "*!! ' " / O $> - 2,033,155 - ' "*!! ' 438,364 - '$> 81,487 #" /& ) $ ! / (240,000)

#; "*!! ' " / O $> "# 2,313,006

31 ;

2553 1,604,120 425,904 64,164 (61,033) 2,033,155

" / O $> #- '% ' '' @ "J # '"E > $ 31 ; 2554 %#/ 2553 " / ' 2554 2553 - ' "*!! ' 438,364 425,904 - '$> 81,487 64,164 ; +) ! $ '" / O $> #- '% ' '' @ "J # $ ' + ' 'P P! 519,851 490,068 20. - -

$ 5 $ ; 2553 ' @ ' - ! ;O/ ' # %#/-# # + - " /) ) $ 10 D@? ; 2553 $ " /) ;O/ ' @ ; > $ 3/2553 $ - ' + " / ' @ " / ! $ _` ' "J $ !+ ! O ; / / # %#/ %#/ X $ $ ' + ' " /) ) "

104

2554 : ( ) ( ! )

Financial Statements /

$ 28 Q ; 2553 ' @ # %- - > ! ! ! %#/ '" / ! ! %#/ ! ! %#/ '" / ! ! ! 120,000,000 #; $ - #/ 1.00 ' > > 120,000,000 ' & + ; #/ 1.35 ' SK ' @ # > %# $ 3 ; 2553 "J $ '! > > 162,000,000 # ' %#/ $ 5 ; 2553 ' @ ! / '$ ( $ $ ) /%# ! 120,000,000 120,000,000 ' # ' / O ) %# ! ( #$ > '"E > $ 31 ; 2553 ; O $>

! (; # O $ 31 ; 2552 ! ( #$ > $ (120,000,000 x 149/365) ! ( #$ > O $ 31 ; 2553

2553 -

350,000,000 48,986,301 398,986,301

21. ) -

#; - ' ' (( - % / )' (( - ' @ ) ! .L. 2535 - 51 ! $ ' @ #; $ ! / '$ ; +) ! $ $ ' SK "J %#/!/ "! "J "* # 22. T & $ 25 @ 2554 $ " /) ( $ - - + ! "* #+ % ( ! 470,000,000 + - #/ 0.085 ' "J ! 39.95 # ' & ' @ ! "* # # + % %# $ 10 D@? ; 2554 $ 23 @ 2553 $ " /) ( $ - - + ! "* #+ % ( ! 350,000,000 + - #/ 0.09 ' "J ! 31.50 # ' %#/' @ ! "* # # + % %# $ 29 @ 2553 23. - ; N - / )' (( - ' @ ) ! .L. 2535 ' @ !/- ! #/ " /! "E # ! / ( $) ! # $! #/ ' ! / '$ - Q # "! "J "* # 24. & -

- " / ; + ' ' @ "J " SK ; + - #- '% - %#/ "J " /& ) - $ $ $ & $ 8 @ 2553 c ! ; ( -+ ' @ " / ' !' ()$ (21) & ' @ !/ " / ' ! - $ > - > > 427,954,151 ' ( - 1) > $'> @ !/- "b '- - $ + +' ( -" / ' ! ; - + ' @ - $ > > $+ ) + " / ' ! - !P & O $ 31 ; 2554 %#/ 2553 ' @ "b ' - - # - ! $> ' @ - "b ' - - + (( ' ' % K $ + ' @ - ; $> - + 8 %#/ ' ' $ % K $ + ' @ - ; - - #; $ $- - (Gearing Ratio) + 6.5 %#/- #; $ $- - (Tangible Net Worth) 520 # ' & O $ 31 ; 2553 %#/ 2554 ' @ "b ' - - # -

Annual Report 2011 : IFS Capital (Thailand) PCL

105

Financial Statements /

25. # = B ? @$ '"E > $ 31 ; 2554 %#/ 2553 " / ' 2554 36,028,403

2553 35,367,968

(3,279,421) 7,556,680 40,305,662

(7,129,183) 28,238,785

2554 108,150,116 32,445,035 7,556,680 303,947 40,305,662 3,279,421 (7,556,680) 36,028,403

2553 113,041,549 33,912,465 (5,673,680) 28,238,785 7,129,183 35,367,968

; +) ! ? @$ - %''% " '" ? @$ - ' ()$ $ $ ' #%- - ) ; $ K> %#/ $ # ' " '" ? @$ - ' ()$ $ ! # - ? @$ ; +) ! ? @$ - ' 'P P! / ' / ? @$ %#/ ' ()$ '"E > $ 31 ; 2554 %#/ 2553 $ $>

' ()$ ? @$ ? @$ + - #/ 30 ? @$ - ' ()$ $ ! # - ? @$ # / ' ? @$ %#/; +) ! ' ()$ %- "J %#/; +) ! ? @$ ; +) ! ? @$ ; +) ! ? @$ - ' ()$ $ $ ' #%- - ) ; $ K> %#/ $ # ' ; +) ! ? @$ - ' ()$ $ ! # - ? @$ ; +) ! ? @$ - %''%

$ 11 - # ; 2554 ;O/ T - $ $ - + " '# - ! P'? @$ - ' ;;#! + - #/ 30 "J - #/ 23 '' @ - ' ;;# $ $ ' / / # ' ()$"E 2555 $ > + # $ 31 ; 2555 %#/! + - #/ 23 "J - #/ 20 '' @ - ' ;;# $ $ ' / / # ' ()$ + # $ 1 ; 2556 "J - " - / ) D@Q$ ' ' $ 530 # $ 21 ; 2554 + # - ? @$ - ' ;;#! #/ 30 "J #/ 23 ' ' / / # ' ()$ $ + # $ 1 ; 2555 %#/ #/ 20 ' ' / / # ' ()$ $ + # $ 1 ; 2556 %#/ 2557 ' @ +) - ? @$ #/ 30 + ; O; +) ! ? @$ + "E"!* ! ' - %''% '"E > $ 31 ; 2553 %#/ 2554 ' @ +) - ? @$ #/ 30 + ; O? @$ - ' ()$ '"E > $ 31 ; 2553 %#/+) - ? @$ #/ 20 %#/ 23 + ; O? @$ - ' ()$ '"E > $ 31 ; 2554 26. - = !

' $> $ K> '' @ $ $ SK $ & $ > ' $>!K % # # SK ; S > / - '$> / %#/ - X "J "- " - ! %#/ "J ; " '' ;;# $ $ "J "- $ ' - &

106

2554 : ( ) ( ! )

Financial Statements /

; # $ ; ( '' @ $ $ O $ 31 ; 2554 %#/ 2553 " / ' $ 'E # $> - ' @ $ $ F %;""G- # # -P ! $> - ' @ $ $ F %;""G- # # -P

2554

' @ + (

48,068

' @ + (

225,219

2553 75,626 -

$ ; ( '' ;;# $ $ '"E > $ 31 ; 2554 %#/ 2553 $ $> 2554 ; - '% ' #" /& ) / / > #" /& ) # ! #" /& ) / / X

19,550,166 1,029,188 5,363 20,584,717

2553 20,480,930 1,014,765 75,245 21,570,940

27. # ) $

O $ 31 ; 2554 %#/ 2553 ' @ $ (( ) ' ' +) "J "+ ! $> : : 31 ' 2554 31 ' 2553 )

3,714,000,000 2,806,000,000 O $ 31 ; 2554 %#/ 2553 ' @ $? / #- - F ; - ' ' "J ! 7.84 # ' %#/ 9.17 # ' - # ' + # ; ! S > $ (( ) S > %#/ (( ) / / +) > $> O $ 31 ; 2554 %#/ 2553 ' @ $ ) # $ +) ' ' # % ! 2,051 # ' %#/ 1,407 # ' - # ' 28. ( & =: '"E > $ 31 ; 2554 %#/ 2553 K> ? # ! ; +) ! $ ; ( - " $>

; - '% %#/ ' ; +) ! ; ; %#/; - ! $> (%#/ $> !/ ( ? @$ ! / ; $ ) )$ -

2554 23,929,717 35,418,507 6,365,260 11,905,280 8,023,942 3,292,962 56,605,471

2553 23,454,263 33,600,163 6,402,592 7,007,505 7,683,443 3,054,544 40,211,418

Annual Report 2011 : IFS Capital (Thailand) PCL

107

Financial Statements /

29. ! ) &; %

' @ " / ' 'S > $ ! (( ) S > %#/ (( ) / / %#/' @ # ! ! # $> & "J ! $ $ ! > ' @ !+ -? L - $ ; " / L > ! %#/ > $% + ' $!> K $ ' !%#/ -? L - - $ # - 30. U ! )

# $

; $ ? ;# ! ; S 'S + / + $ %#/ # - "b ' - - ? / $ + ; > $> ' " / T / %#/ # + "*!! ' %#/ ) ' @ $; $ ? ;# & B P // ; $ ! "b ' - - (( ! ! $ ; (( "b ' - - + (( $ '' @ %#/ + ; $ % ' @ ' @ $ & ' + "N ; $ $>& $ ; / ) ! #- X # ; %#/ - - # ; - % $ + / '$ ' $"b ' - ) ; $ ! "b ' - - (( $> $ #; - $ % + + '% T / # ! ; $> !/ (%# " ; $ $ ' - '$> ; + '% T / > K> ! "#$ %"# - '$> !!/ $ # + #'- '$> + "E"*!! ' %#/+ ;- ; $ - '$> $> K> ! ! &; %#/# @O/ + $> ! ! / / # $ %- - + "#$ %"# - '$> / %#/ $> # $ ' - '$> ! ' "G %# + - 16 %#/ 17 ' % ! K ( : ) - ' !

- T #; - - +) # !+ " / O > #; - $ " / O K> $ "G + - " / ' ' $>!K ! "J - ' )$> K ! SK K> ! + -# %# "#$ + "*!! ' +)

- T -# %#/ $ " / O $% - - ! $ # / ' $ $ / ; (+ #; - $" / O K > ' @ +) $ %#/

- T - " $+> " / O #; - ; %

#; - - ! $ % + '% T / - # + # ! / '$ #; - - ; $ S > + -# ) "& Q " '

#; - & " / O # $>! S > $ SK "J # $> $ ; '$> + - '$> %''# - - ! $ % + '% T / ) "& // Q " % //

#; - & " / O # $>! (( ) S > %#/ (( ) / / ; O& +) $ # /% & ! O - ; # ! - '$> + "*!! ' - (( ; # #$

108

2554 : ( ) ( ! )

Financial Statements /

: 31 ' 2554 ) / ) - ' # $>! (( ) S > %#/ (( ) / / $ K ) /? + K "E

367,207,247

367,207,247

: 31 ' 2553 ) / ) - ' # $>! (( ) S > %#/ (( ) / / $ K ) /? + K "E

143,481,390

143,481,390

) Q "

#; - & " / O + ; S > ; SK "J + / / > - ! $ % + '% T / ) " & +

#; - & " / O / / > ! ' $ $ - '$> # - - ! $ % + '% T / )

#; - & " / O / / $ $ - '$> ; $ %#/# - - ! $ % + '% T / 31. - (

' $> ' - + ' ! $ !# ' @ $ 9 ? 2555

Annual Report 2011 : IFS Capital (Thailand) PCL

109

Financial Statements /

IFS CAPITAL (THAILAND) PUBLIC COMPANY LIMITED NOTES TO THE FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 1.

GENERAL INFORMATION AND THE COMPANY’S OPERATION The Company was incorporated in March 1991, under the laws of Thailand and registered as a Public Company Limited with the Ministry of Commerce on April 18, 2007. The Company’s office is located at 20th floor Lumpini Tower, 1168/55 Rama IV Road, Tungmahamek, Sathorn, Bangkok. The principal business activities of the Company are factoring, hire purchase and leasing businesses. The major shareholders as at December 31, 2011 and 2010 were IFS Capital Holdings (Thailand) Limited with 36.64% and IFS Capital Limited (registered in Singapore) with 36.49%. The major shareholder of IFS Capital Limited was Phillip Asset Pte. Ltd. (registered in Singapore) with 40.4% shareholding. The status of the Company has been changed to that of a foreign Company after submitting the request to do business under Section 17 of the Foreign Business Act B.E. 2542 and obtained the license of foreign business operations dated July 3, 2009 from the Department of Business Development to do business in category 3 (21) service business as follows: 1) Factoring 2) Leasing and hire purchase businesses only to the existing customers committed under the leasing and hire purchase agreements Thus, the Company has to comply with the conditions specified in the certificate of foreign business operations. On November 27, 2009, the Company had reapplied for a permission to operate a business under annex 3 (21): service businesses of leasing and hire purchase of vehicles and machineries used in industry, tools used in transport of goods, vessels and carriages used in agriculture to new clients and on April 8, 2010, the Company had obtained the approval from the Department of Business Development. On April 27, 2010, the Company obtained approval from IFS Capital Limited in Singapore, who is the Company’s major shareholder, for its public offering and its listing on the Stock Exchange of Thailand. On August 3, 2010, the Company had made its public offering and sold 120 million shares at Baht 1.35 per share totaling of Baht 162 million and on August 5, 2010, the Company had registered such additional paid-up capital of 120 million shares equivalent to Baht 120 million with the Ministry of Commerce. On August 6, 2010, the Company has paid the fee and received a license to operate a business under annex 3 (21) : service businesses of Leasing and Hire purchase of vehicles and machineries used in industry, tools used in transport of goods, vessels and carriages used in agriculture and on the same day the Stock Exchange of Thailand (SET) informed that the SET’s board has approved a listing of common shares of IFS Capital (Thailand) Public Company Limited amounting to 470 million shares with a par value of Baht 1 per share, total amounting to Baht 470 million, to be traded on the SET using the trading name of “IFS� commencing from August 10, 2010 onwards.

2.

110

BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS The statutory financial statements are prepared in Thai Baht and in the Thai language in conformity with accounting standards and practices generally accepted in Thailand. Accordingly, the financial statements are intended solely to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in Thailand.

2554 : ( ) ( ! )

Financial Statements /

The financial statements have been prepared in compliance with the Notification of the Department of Business Development regarding “The Brief Particulars in the Financial Statements B.E. 2554� dated September 28, 2011, which is effective for financial periods beginning on or after January 1, 2011 onwards. The financial statements for the year ended December 31, 2010, presented herein for comparison, have been presented in the new format to conform with the financial statements for year ended December 31, 2011. The Federation of Accounting Professions has issued the Notifications regarding new and revised Thai Accounting Standards (TASs) and Thai Accounting Standard Interpretations (TSIS), which will become effective for the financial statements for accounting periods beginning on or after January 1, 2013 are as follow: Thai Accounting Standards (TASs) TAS 12 Income Taxes TAS 20 Accounting for Government Grants and Disclosure of Government Assistance TAS 21 (Revised 2009) The Effects of Changes in Foreign Exchange Rates Thai Accounting Standard Interpretations (TSIs) TSI 10 Government Assistance - No Specific Relation to Operating Activities TSI 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets TSI 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders The management of the Company anticipates that the Company will adopt the above Thai Accounting Standards and Thai Accounting Standard Interpretations relevant to the Company in the preparation of financial statements of the Company when they become effective. The Company’s management is in the process of assessing the impact of these standards on the financial statements for the period in which they are initially applied. However, the Company has elected to early adopt TAS 12 “Income Tax� (see Note 4) 3.

SIGNIFICANT ACCOUNTING POLICIES The financial statements have been prepared under the historical cost convention except as disclosed in the accounting policies. Significant accounting policies adopted by the Company are summarized below: 3.1 Cash and cash equivalents Cash and cash equivalents consist of cash on hand, deposits at bank and fixed deposits with original maturities of 3 months or less and excluding cash at banks used as collateral. 3.2 Income recognition Factoring income is recognized on an accrual basis. The hire purchase income is recognized using the effective interest method. The finance lease income is recognized using the direct financing method of accounting, based on effective interest rate. Interest on hire purchase and finance lease contract is recognized on an accrual basis, except when interest is in arrears for more than three months which is then recognized on a cash basis. Factoring commission and service fees are recognized upon the transfer of rights.

Annual Report 2011 : IFS Capital (Thailand) PCL

111

Financial Statements /

3.3 Accounts receivable Factoring receivable is shown net of allowance for doubtful accounts. Hire purchase receivable and lease contract receivable are stated at the outstanding hire purchase contract price and lease contract price after deducting unearned financing income and allowance for doubtful accounts. 3.4 Allowance for doubtful accounts Allowance for doubtful accounts is an estimate of the debts which may prove to be uncollectible . Based on review of the current status of each receivable, the Company sets up the allowance for doubtful accounts as follows:

Overdue up to 3 months not over 6 months Overdue up to 6 months not over 12 months Overdue up to 12 months

Percentage of receivable 20 50 100

In addition, the Company had determined to set up the allowance for doubtful accounts on a collective basis for factoring, hire purchase, lease contract receivables and inventory finance receivable which are classified as normal and overdue less than 3 months which have similar credit risk characteristics assessed based on the historical loss experience of each loan category (see Notes 8, 9, 10 and 11). 3.5 Current investments Current investments represent investments in equity securities which are classified as security available for sale and are stated at fair value. Gain or loss on the change in fair value is presented as an item in equity. In case of an impairment in value of investment has occurred, the resultant loss for all classification of investment is recognized in the statements of comprehensive income. 3.6 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation. Cost of condominium-land consists of the allocation of direct costs on acquisition, and an apportionment of the total cost of condominium, as assessed officially at the acquisition date, calculated using the rate of the Company’s ownership rights. Cost of condominium - building is derived from total cost of condominium deducted by cost of condominium - land. Depreciation is calculated using the straight-line method, based on the estimated useful lives of the assets as follows: Condominium - building 40 years Furniture and fixtures 5 years Vehicles 5 years

112

2554 : ( ) ( ! )

Financial Statements /

3.7 Intangible assets and amortization Intangible assets, which are computer software, are stated at cost less accumulated amortization. The amortized amount is included in statements of comprehensive income. Amortization of intangible assets is calculated by reference to their costs on a straight-line basis over their estimated useful lives of 3 years. 3.8 Foreign currency transactions Transactions occurred during the year denominated in foreign currencies are translated into Baht at the rates of exchange on the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the statements of financial position date are translated into Baht at the exchange rates prevailing at that date. Gains and losses on foreign exchange arising from settlements and translation are recognized as income or expense when incurred. 3.9 Provision for employee benefits The Company provides provision regarding the severance pay under the Thai Labor Protection Act and long service awards payable to employees. The liability in respect of employee benefits is calculated by using the actuarial technique. The present value of the defined benefits obligation is determined by discounting estimated future cash flows using yields on the government bonds which have terms to maturity approximating the terms of the related liability. The estimated future cash flows shall reflect employee salaries, turnover rate, length of service and others. Actuarial gains or losses will be recognized in the statements of comprehensive income in the period to which they are related. The costs associated with providing these benefits are charged to the statements of comprehensive income so as to spread the cost over the employment period during which the entitlement to benefits is earned (see Note 19). 3.10 Income tax expenses The Company has early adopted Thai Accounting Standard No.12 “Income Taxes� to comply before its effective date. The policy is as follows: Income tax expense is calculated based on the taxable profit multiplied by the tax rate that has been enacted at the statements of financial position date and adjusted by the effect of deferred income tax accounting. Deferred tax assets and liabilities result from temporary differences between the carrying amounts of assets or liabilities in the statements of financial position and their tax bases. Deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which deductible temporary differences can be utilized. Deferred tax expenses are charged or credited in the statement of comprehensive income, except when the temporary differences relate to items credited or charged directly to equity, in which case the deferred tax is also recorded in equity. Deferred tax assets and liabilities are offset when they relate to income tax levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.

Annual Report 2011 : IFS Capital (Thailand) PCL

113

Financial Statements /

3.11 Basic earnings per share Basic earnings per share are calculated by dividing net income by the number of weighted average ordinary shares outstanding during the year. In case of a capital increase, the number of ordinary shares is weighted according to the time of subscription was received. The Company did not have any common share equivalents outstanding which would have a dilutive effect on basic earnings per share. 3.12 Accounting estimates The preparation of financial statements in conformity with generally accepted accounting principles also requires the Company’s management to exercise judgments in order to determine the accounting policies, estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s reasonable consideration of current events, actual results may differ from these estimates. 4.

ADOPTION OF NEW AND REVISED THAI ACCOUNTING STANDARDS AND THAI FINANCIAL REPORTING STANDARDS Since January 1, 2011, the Company has adopted the new and revised Thai Accounting Standards (TASs) and Thai Financial Reporting Standards (TFRSs) issued by the Federation of Accounting Professions, which are effective for financial statements prepared for accounting periods beginning on or after January 1, 2011 onwards, and in preparation of financial statements. Such TASs and TFRSs have no significant impact to the Company’s financial statements except for TAS 1 (Revised 2009) “Presentation of Financial Statements� which changes the requirements on the presentation of the financial statements. Therefore, it affected the reclassifications in the financial statements for period ended December 31, 2010, presented for comparison (see Note 2).

5.

RECLASSIFICATION The statements of financial position as at December 31, 2010 have been reclassified to conform to the classification on the statement of financial position as at December 31, 2011. Golf membership fee amounting to Bath 0.57 million, which was previously presented as a part of other non-current assets, has been included as a part of intangible assets, net.

6.

SUPPLEMENTARY DISCLOSURE OF CASH FLOWS INFORMATION 6.1

Property, plant and equipment for the years ended December 31, 2011 and 2010 were as follows:

Other payable - equipment, beginning balance Add Purchases of equipment Less Cash paid for purchases of equipment Other payable - equipment, ending balance (included in other current liabilities)

114

2554 : ( ) ( ! )

2011 Baht

2010 Baht

21,935

84,831

518,218

10,594,815

(540,153)

(10,657,711)

-

21,935

Financial Statements /

6.2

Intangible assets for the years ended December 31, 2011 and 2010 were as follows: 2011 Baht Other payable - intangible assets, beginning balance

91,673

-

Add Purchases of intangible assets

43,821

241,473

(135,494)

(149,800)

Less Cash paid for purchases of intangible assets Other payable - intangible asset, ending balance (included in other current liabilities) 7.

2010 Baht

-

91,673

TEMPORARY INVESTMENTS Temporary investments as at December 31, 2011 and 2010 consist of the following: 2011 Cost

Gross unrealized Gains

Fair Value

Baht

Baht

Baht

Temporary investment - available for sale securities Marketable equity securities Total temporary investment

137,936

(72,769)

65,167

137,936

(72,769)

65,167

2010 Cost

Gross unrealized Gains

Fair Value

Baht

Baht

Baht

Temporary investment - available for sale securities Marketable equity securities Total temporary investment 8.

137,936

(55,392)

82,544

137,936

(55,392)

82,544

FACTORING RECEIVABLE, NET Factoring receivable, net as at December 31, 2011 and 2010 consist of the following: 2011 Baht Factoring receivable Less Allowance for doubtful accounts (*)

2010 Baht

2,156,456,009 2,169,944,831 (81,802,402)

(75,534,847)

2,074,653,607 2,094,409,984 Less Factoring payable

(413,996,705)

(358,157,617)

Factoring receivable, net

1,660,656,902 1,736,252,367

(*) As at December 31, 2011 and 2010, the Company has provided for the allowance for doubtful accounts on a collective basis for factoring receivable which were classified as normal and overdue for less than 3 months which amounted to Baht 1,495,938 and Baht 1,893,877, respectively.

Annual Report 2011 : IFS Capital (Thailand) PCL

115

Financial Statements /

Factoring receivable, net as at December 31, 2011 and 2010 were classified by aging as follows: 2011 Baht Current

2010 Baht

1,373,309,109 1,389,337,862

Over due : Less than 3 months

688,878,558

693,818,634

3 - 6 months

15,820,092

14,595,612

6 - 12 months

1,950,511

981,752

Restructuring

1,115,350

1,475,350

75,382,389

69,735,621

Debtors subject to legal proceedings

2,156,456,009 2,169,944,831 9.

HIRE PURCHASE RECEIVABLE, NET Hire purchase receivable, net as at December 31, 2011 and 2010 consist of the following: 2011 Baht

2010 Baht

Outstanding contract price

26,842,239

19,858,422

Less Unearned financing income

(2,466,143)

(1,685,785)

24,376,096

18,172,637

(3,651,904)

(2,139,452)

20,724,192

16,033,185

Due within one year

14,799,161

11,146,049

Less Unearned financing income

(1,520,761)

(1,137,938)

Current portion of hire purchase receivable, net

13,278,400

10,008,111

7,445,792

6,025,074

Less Allowance for doubtful accounts (*)

Hire purchase receivable, net

(*) As at December 31, 2011 and 2010, the Company has provided for the allowance for doubtful accounts on a collective basis for hire purchase receivable which were classified as normal and overdue for less than 3 months which amounted to Baht 229,712 and Baht 44,960, respectively.

Aging of hire purchase receivable, net as at December 31, 2011 and 2010 were classified by aging as follows: 2011 Baht Current

21,627,304

2010 Baht 17,552,958

Over due : Less than 3 months Debtors subject to legal proceedings

116

2554 : ( ) ( ! )

-

-

5,214,935

2,305,464

26,842,239

19,858,422

Financial Statements /

10.

LEASE CONTRACT RECEIVABLE, NET Lease contract receivable, net as at December 31, 2011 and 2010 consist of the following: 2011 Baht Outstanding contract price

2010 Baht

535,585,106

197,086,563

(127,268,662)

(53,212,814)

(57,795,359)

(16,068,158)

350,521,085

127,805,591

(4,038,030)

(357,386)

346,483,055

127,448,205

Due within one year

169,641,073

86,956,756

Less Deposits on long-term lease contracts

(29,932,758)

(21,510,848)

(9,793,921)

(9,053,121)

Current portion of lease contract receivable, net

129,914,394

56,392,787

Lease contract receivable, net

216,568,661

71,055,418

Less Deposits on long-term lease contracts Less Unearned financing income Less Allowance for doubtful accounts (*)

Less Unearned financing income

(*) As at December 31, 2011 and 2010, the Company has provided for the allowance for doubtful accounts on a collective basis for lease contract receivable which were classified as normal and overdue for less than 3 months which amounted to Baht 3,840,496 and Baht 357,386, respectively.

Lease contract receivable, net as at December 31, 2011 and 2010 were classified by aging as follows: 2011 Baht Current

2010 Baht

533,212,708

197,086,537

1,664,265

26

Over due : Less than 3 months Debtors subject to legal proceedings

708,134 535,585,107

11.

197,086,563

INVENTORY FINANCE RECEIVABLE, NET Inventory finance receivable, net as at December 31, 2011 and 2010 consist of the follows: 2011 Baht

2010 Baht

Inventory finance receivable

34,855,294

15,695,309

Less Allowance for doubtful accounts (*)

(3,230,619)

(2,785,990)

Inventory finance receivable, net

31,624,675

12,909,319

(*) As at December 31, 2011 and 2010, the Company has provided for the allowance for doubtful accounts on a collective basis, for inventory finance receivable which were classified as normal and overdue for less than 3 months which amounted to Baht 458,715 and Baht 14,087, respectively.

Annual Report 2011 : IFS Capital (Thailand) PCL

117

Financial Statements /

Inventory finance receivable as at December 31, 2011 and 2010 were classified by aging as follows: 2011 Baht Current

2010 Baht

32,083,390

12,923,405

Over due : Less than 3 months

-

Debtors subject to legal proceedings

2,771,904

2,771,904 34,855,294

12.

15,695,309

BANK DEPOSIT HELD AS COLLATERAL As at December 31, 2011 and 2010, fixed deposit at bank of Baht 141,355 and Baht 140,001, respectively, have been pledged with a bank as security for issuing bank guarantees on behalf of the Company.

13.

PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net as at December 31, 2011 and 2010 consist of the following: Additions

Disposals

Baht

Baht

3,417,277

-

-

3,417,277

Condominium - Building

37,457,987

-

-

37,457,987

Furniture and fixtures

36,587,466

-

37,105,684

(978,494)

5,655,439

Balance as at January 1, 2011 Baht

Balance as at December 31, 2011 Baht

Cost Condominium - Land

Vehicles Total cost

518,218

6,633,933

-

84,096,663

518,218

(978,494)

83,636,387

Condominium-Building

(15,797,454)

(936,449)

-

(16,733,903)

Furniture and fixtures

(24,849,957)

(3,532,849)

-

(28,382,806)

Accumulated depreciation

Vehicles

118

(4,582,149)

(1,071,789)

978,494

(4,675,444)

Total accumulated depreciation

(45,229,560)

(5,541,087)

978,494

(49,792,153)

Property, plant and equipment, net

38,867,103

2554 : ( ) ( ! )

33,844,234

Financial Statements /

Additions

Disposals

Baht

Baht

3,417,277

-

-

3,417,277

Condominium - Building

37,457,987

-

-

37,457,987

Furniture and fixtures

28,389,900

9,342,876

(1,145,310)

36,587,466

5,381,994

1,251,939

-

6,633,933

74,647,158

10,594,815

(1,145,310)

84,096,663

Condominium-Building

(14,861,004)

(936,450)

-

(15,797,454)

Furniture and fixtures

(22,633,073)

(3,303,136)

1,086,252

(24,849,957)

(3,468,608)

(1,113,541)

-

(4,582,149)

Total accumulated depreciation

(40,962,685)

(5,353,127)

1,086,252

(45,229,560)

Property, plant and equipment, net

33,684,473

Balance as at January 1, 2010 Baht

Balance as at December 31, 2010 Baht

Cost Condominium - Land

Vehicles Total cost Accumulated depreciation

Vehicles

38,867,103

Depreciation for the years ended December 31, 2011

Baht

5,541,087

2010

Baht

5,353,127

As at December 31, 2011 and 2010, the gross carrying amounts of fully depreciated assets still in use are Baht 22,921,031 and Baht 19,834,545, respectively. 14.

INTANGIBLE ASSETS, NET Intangible assets, net as at December 31, 2011 and 2010 consist of the following: Balance as at January 1, 2011 Baht

Additions

Disposals

Balance as at December 31, 2011 Baht

Baht

Baht

-

-

570,000

Cost Golf membership fee Computer software Total cost

570,000 3,380,224

43,820

-

3,424,044

3,950,224

43,820

-

3,994,044

(2,417,308)

(824,173)

-

(3,241,481)

(2,417,308)

(824,173)

-

(3,241,481)

Accumulated amortization Computer software Total accumulated amortization Intangible assets, net

1,532,916

725,563

Annual Report 2011 : IFS Capital (Thailand) PCL

119

Financial Statements /

Balance as at January 1, 2010 Baht

Additions

Disposals

Balance as at December 31, 2010 Baht

Baht

Baht

-

-

570,000

Cost Golf membership fee Computer software Total cost

570,000 3,138,750

241,474

-

3,380,224

3,708,750

241,474

-

3,950,224

(1,367,843)

(1,049,465)

-

(2,417,308)

(1,367,843)

(1,049,465)

-

(2,417,308)

Accumulated amortization Computer software Total accumulated amortization Intangible assets, net

2,340,907

1,532,916

Amortization for the years ended December 31,

15.

2011

Baht

824,173

2010

Baht

1,049,465

DEFERRED TAX ASSETS Deferred tax assets as at December 31, 2011 and 2010 were as follows: 2011 Baht Deferred tax assets - net

40,460,458

2010 Baht 44,737,597

Deferred tax assets as at December 31, 2011 and 2010 consist of tax effects from the following items: Transaction recognized in the Equity

As at December 31, 2011

Baht

Transactions recognized in the statement of comprehensive income Baht

Baht

Baht

Allowance for doubtful accounts

24,245,303

(5,700,712)

-

18,544,591

Bad debt in process of litigation

7,275,949

(2,485,316)

-

4,790,633

Assets from lease contract

8,448,590

4,962,507

-

13,411,097

As at December 31, 2010

Unrealized gain on the change in value of investments - available-for-sale securities Post-employment benefits obligation Others

120

16,617

-

120

16,737

4,670,841

(973,441)

-

3,697,400

80,297

(80,297)

-

-

44,737,597

(4,277,259)

2554 : ( ) ( ! )

120

40,460,458

Financial Statements /

Transaction recognized in the Equity

As at December 31, 2010

Baht

Transactions recognized in the statement of comprehensive income Baht

Baht

Baht

Allowance for doubtful accounts

27,063,106

(2,817,803)

-

24,245,303

Bad debt in process of litigation

1,785,299

5,490,650

-

7,275,949

Assets from lease contract

4,890,020

3,558,570

-

8,448,590

(41,429)

-

As at December 31, 2009

Unrealized gain (loss) on the change in value of investments - available-for-sale securities

58,046

16,617 4,670,841

Post-employment benefits obligation

-

817,469

3,853,372

Others

-

80,297

-

33,696,996

7,129,183

80,297

3,911,418

44,737,597

The Company has decreased deferred tax assets with respect to reduction of the income tax rate in accordance with Royal Decree No. 530 B.E. 2554 (see Note 25). 16.

SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS Short-term loans from financial institutions as at December 31, 2011 and 2010 consist of the following: 2011 Baht Promissory notes

2010 Baht

985,000,000 1,020,000,000

As at December 31, 2011 and 2010, the company have short-term loans from financial institutions bear interest rate at 2.15% - 4.35% per annum and 2.15% - 2.95% per annum, respectively. 17.

LONG-TERM LOANS Long-term loans as at December 31, 2011 and 2010 consist of the following: 2011 Baht

2010 Baht

Long-term loans

184,000,000

125,000,000

Add Current portion of long-term loan

200,000,000

100,000,000

384,000,000

225,000,000

On December 14, 2009, the Company entered into long-term loans with a financial institution at the interest rate THBFIX (3 months) + 2.75% p.a. and is repayable quarterly from March 2010 to March 2013.

Annual Report 2011 : IFS Capital (Thailand) PCL

121

Financial Statements /

On February 25, 2011, the Company entered into long-term loans with a financial institution at the interest rate 3.70% - 5.35% p.a. and is repayable quarterly from February 2011 to February 2014. Subsequently, on July 4, 2011, the Company entered into long-term loans with a financial institution at the interest rate MLR - 2.375% p.a. and is repayable quarterly from August 2011 to August 2014. 18.

PROVIDENT FUND The Company has a contributory staff provident fund for its employees who apply to join after one year’s service which was registered as the provident fund in accordance with the Provident Fund Act B.E. 2530 (1987). For the years ended December 31, 2011 and 2010, the Company’s contributions included in selling and administrative expenses in the financial statements amounting to Baht 2.3 million and Baht 2.1 million, respectively.

19.

PROVISION FOR EMPLOYEE BENEFITS The Company calculated provision for employee benefits by using actuarial technique. The assumptions included discount rate at 4%, resignation rate at 2%, 6% and 11% depending on age group of employees, salary increase rate at 9% and retirement age at 60 years. Provision for employee benefits for the years ended December 31, 2011 and 2010 consist of the following:

Provision for severance pay (see Note 19.1) Provision for long service awards (see Note 19.2) Provision for employee benefits

2011 Baht

2010 Baht

16,173,993

13,536,314

2,313,006

2,033,155

18,486,999

15,569,469

19.1 Provision for severance pay Change in the present value of provision for severance pay as at December 31, 2011 and 2010, is as follows:

Present value of obligation, beginning balance Cost of service - current period Finance cost Present value of obligation, ending balance

122

2554 : ( ) ( ! )

2011 Baht

2010 Baht

13,536,314

11,240,453

2,096,226

1,846,243

541,453

449,618

16,173,993

13,536,314

Financial Statements /

Provision for severance pay for the years ended December 31, 2011 and 2010 are as follows: 2011 Baht Cost of service - current period Finance cost

2010 Baht

2,096,226

1,846,243

541,453

449,618

2,637,679

2,295,861

Total provision for severance pay expenses recognized in statement of comprehensive income 19.2 Provision for long service awards Change in the present value of provision for long service awards for the years ended December 31, 2011 and 2010 were as follows: 2011 Baht Present value of obligation, beginning balance

2010 Baht

2,033,155

1,604,120

438,364

425,904

81,487

64,164

Benefits paid during the period

(240,000)

(61,033)

Present value of obligation, ending balance

2,313,006

2,033,155

Cost of service - current period Finance cost

Provision for long service awards as at December 31, 2011 and 2010 is as follows:

Cost of service - current period Finance Cost

2011 Baht

2010 Baht

438,364

425,904

81,487

64,164

519,851

490,068

Total provision for long service awards expenses recognized statement of comprehensive income 20.

SHARE CAPITAL On March 5, 2010, the Company obtained the approval of the public offering from the Office of the Securities and Exchange Commission. On May 10, 2010, the Board of Directors’ Meeting no. 3/2010 passed a resolution stating that the Chairman or Chief Executive Officer were authorized to determine the offer price, the offer period, the terms and conditions relating to the Initial Public Offering (IPO). On July 28, 2010, the Company signed the Underwriting Agreements with the Co-Lead Underwriters and the Co-Underwriters to underwrite 120,000,000 shares at par Baht 1.00 per share totaling of Baht 120,000,000 with offering price at Baht 1.35 per share. The Company sold the shares on August 3, 2010 for Baht 162,000,000 and on August 5, 2010, the Company had registered an additional paid-up new ordinary shares of 120,000,000 shares equivalent to Baht 120,000,000 with the Ministry of Commerce

Annual Report 2011 : IFS Capital (Thailand) PCL

123

Financial Statements /

The weighted average number of ordinary shares for the year ended December 31, 2010, was calculated as follows:2010 Shares Number of ordinary shares outstanding as at December 31, 2009

350,000,000

Weighted average number of new shares issued during the period (120,000,000 x 149/365)

48,986,301

Weighted average number of ordinary shares outstanding As at December 31, 2010 21.

398,986,301

PREMIUM ON SHARES The share premium account is set up under the provisions of Section 51 of the Public Companies Act. B.E. 2535, which requires companies to set aside share subscription monies received in excess of the par value of the shares issued less expenses relating to the increase in share capital which is a reserve account and can not be distributed as dividend.

22.

DIVIDENDS PAID On April 25, 2011, the ordinary Shareholder’s meeting passed a resolution to pay dividend of Baht 0.085 per share on 470,000,000 shares, totaling Baht 39.95 million. Such dividend was paid on May 10, 2011. On April 23, 2010, the ordinary shareholders’ meeting passed a resolution to pay dividend of Baht 0.09 per share on 350,000,000 shares, totaling Baht 31.50 million. Such dividend was paid on April 29, 2010.

23.

LEGAL RESERVE Pursuant to the Public Companies Act. B.E. 2535 (1992), the Company must allocate to a reserve fund from the annual net profit, of not less than five percent of the annual net profit deducted by the total accumulated loss brought forward (if any) until the reserve fund reaches an amount of not less than ten percent of the registered capital. The legal reserve could not be used for dividend payment.

24.

CAPITAL MANAGEMENT The Company’s objectives in managing capital are to safeguard the Company ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders. Moreover, on April 8, 2010, the Company had obtained the approval from the Department of Business Development to operate a business under annex 3 (21). However, the Company is required to have a minimum capital of the Company of not less than Baht 427,954,151 (see Note 1). The Company has to comply with the conditions specified in the certificate of foreign business operations in that the total amount of loans used in the operation of the business permitted must not exceed seven times of the principal. On December 31, 2011 and 2010, the Company’s financial statements show of compliance to the conditions as mentioned.

124

2554 : ( ) ( ! )

Financial Statements /

In addition, the Company also has to comply with financial covenants with a financial institution in that the Company should maintain its debt to equity ratio to not exceed eight times and with another financial institution in that the Company shall maintain its gearing ratio to not exceed six point five times and a minimum tangible net worth of not less than Baht 520 million. On December, 31, 2011 and 2010, the Company’s financial statements showed compliance to the conditions as mentioned. 25.

INCOME TAX Income tax for the years ended December 31, 2011 and 2010 consist of the following; 2011 Baht

2010 Baht

Income tax expense from taxable income per income tax return

36,028,403

35,367,968

Deferred tax expense relating to the origination and reversal of temporary differences

(3,279,421)

(7,129,183)

7,556,680

-

40,305,662

28,238,785

Deferred income taxes related to reduction corporate income tax rate Income tax per the statements of comprehensive income

The reconciliation between income tax - income (expense) and accounting income for the years ended December 31, 2011 and 2010 were follows:

Accounting income before tax Income tax at 30% Deferred tax expenses reflect corporate tax reduction Tax effect of non-deductible expenses (benefits) Income tax per the statements of income Deferred tax expense relating to the origination and reversal of temporary differences

2011 Baht

2010 Baht

108,150,116

113,041,549

32,445,035

33,912,465

7,556,680

-

303,947

(5,673,680)

40,305,662

28,238,785

3,279,421

7,129,183

Deferred tax expenses relating to reduction in corporate income tax rate

(7,556,680)

-

Income tax expenses from taxable income

36,028,403

35,367,968

On October 11, 2011, the Thai Cabinet approved a reduction of the corporate income tax rate from 30% to 23% of profits for companies or juristic partnerships with a 2012 accounting period ending on or after December 31, 2012, and from 23% to 20% for companies or juristic partnerships with a 2013 accounting period beginning on or after January 1, 2013. According to the Royal Decree No. 530 dated December 21, 2011, the income tax rate has been reduced from 30% to 23% for the accounting period beginning on or after January 1, 2012 and 20% the accounting periods beginning on or after January 1, 2013 and 2014. The Company used tax rates of 30% for the corporate income tax calculation for the year ended December 31, 2010 and 2011. The Company used a tax rate of 30% for calculation of deferred tax for the year ended December 31, 2010 and both 20% and 23% for calculation of deferred tax for the year ended December 31, 2011.

Annual Report 2011 : IFS Capital (Thailand) PCL

125

Financial Statements /

26.

RELATED PARTY TRANSACTIONS The accompanying financial statements include certain transactions with related companies. The relationship may be that of shareholding or the companies may have the same group of shareholders or directors. The financial statements reflect the effects of these transactions in the normal business practice, and the price rates, interest rates, terms and conditions are considered to be at arms length, for related party as at the date received by the Board or the shareholders approved. Balance with related companies as at December 31, 2011 and 2010 consist of the following; Relationship

2011 Baht

2010 Baht

Amount due from a related company IFS Capital Limited

Major Shareholder company

48,068

Major Shareholder company

225,219

75,626

Amount due to a related company IFS Capital Limited

-

Significant transaction with related parties for the periods ended December 31, 2011 and 2010 were as follow: 2011 Baht

2010 Baht

19,550,166

20,480,930

Post-employment benefit

1,029,188

1,014,765

Other long-term benefits

5,363

75,245

20,584,717

21,570,940

Management benefit expenses Short-term benefits

27.

COMMITMENTS As at December 31, 2011 and 2010, the Company has the committed credit facility agreements with financial institutions for general corporate funding requirements as follows: As at December 31, 2011 Baht Total credit facilities

3,714,000,000

As at December 31, 2010 Baht 2,806,000,000

As at December 31, 2011 and 2010, the Company had utilized the letter of credit amounting to Baht 7.84 million and Baht 9.17 million, respectively, for factoring, hire purchase and leasing contracts. However, as at December 31, 2011 and 2010, the Company had unused such credit facilities with banks totaling Baht 2,051 million and Baht 1,407 million, respectively.

126

2554 : ( ) ( ! )

Financial Statements /

28.

EXPENSES BY NATURE Net profit for the years ended December 31, 2011 and 2010 were arrived at after charging the following items: 2011 Baht

2010 Baht

Directors and management benefit expenses

23,929,717

23,454,263

Employee benefit expenses

35,418,507

33,600,163

6,365,260

6,402,592

11,905,280

7,007,505

Business tax

8,023,942

7,683,443

Professional fee

3,292,962

3,054,544

56,605,471

40,211,418

Depreciation and amortization Bad debts and doubtful accounts

Finance cost 29.

FINANCIAL INFORMATION BY SEGMENT The operation of the Company consists of factoring, hire purchase and leasing business. The results of operation of these activities are measured as a single segment. In addition, these activities are carried on in Thailand. As a result, revenues, operating profits and identifiable assets as reflected in these financial statements pertain to the aforementioned industry segment and geographical area.

30.

DISCLOSURE OF FINANCIAL INSTRUMENTS Liquidity risk Liquidity risk arises from the problem in adequately raising fund and in time to meet commitment as indicated in the financial instruments. The management, based on the Company’s current financial position and result of operations, believes that the Company’s liquidity risk is minimal. Credit Risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Company. The Company has adopted the policy to prevent such risk by performing credit analysis on customers’ information and follow-up on customer status consistently according to the Company’s regulations. The maximum exposure to credit risk in the event the counter parties fail to perform their obligations is the carrying amount of the assets as recorded in the statements of financial position, net of a portion of allowance for impairment.

Annual Report 2011 : IFS Capital (Thailand) PCL

127

Financial Statements /

Interest Rate Risk Interest rate risk of financial instruments in the statements of financial position arises from the potential of a change in interest rates having an adverse effect on the net interest earnings of the Company in the current reporting period, and in future years. Interest rate risk arises from the structure and characteristics of the Company’s assets, liabilities and equity or in the mismatch in repricing dates of its assets and liabilities. Information regarding interest rates of loans from financial institutions is disclosed in Notes 16 and 17. Methods and assumptions in estimating fair value of financial instruments Considerable judgment is necessarily in the estimation of fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amount that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The following methods and assumptions were used by the Company in estimating fair value of financial instruments. Cash and cash equivalents The fair values are based on the amounts recognized in the statements of financial position. Current investments The fair value for listed securities are based on quoted market prices. Factoring receivable The fair value of factoring receivables bearing floating rates of interest are based on the amounts recognized in the statements of financial position. Hire purchase and lease contract receivables The fair values of hire purchase and lease contract receivables are estimated by using discounted cash flow analysis using interest rates currently being offered and average remaining years to maturity. As at December 31, 2011 Carrying Value Baht

Fair Value Baht

Hire purchase and lease contract receivables including current portion

128

2554 : ( ) ( ! )

367,207,247

367,207,247

Financial Statements /

As at December 31, 2010 Carrying Value Baht

Fair Value Baht

Hire purchase and lease contract receivables including current portion

143,481,390

143,481,390

Inventory finance receivable The fair value of inventory financial receivable which is short-term finance receivable, is based on the amounts recognized in the statements of financial position. Short-term loans from financial institutions The fair values of short-term loans from financial institutions bearing floating rates of interest are based on the amounts recognized in the statements of financial position Long-term loans The fair value of long-term loans bearing fixed and floating rate of interest are based on the amounts recognized in the statements of financial position. 31.

APPROVAL FOR ISSUANCE OF THE FINANCIAL STATEMENTS These financial statements have been approved for issue by the authorized director of the Company on February 9, 2012.

Annual Report 2011 : IFS Capital (Thailand) PCL

129

Remuneration of the Auditor

2 ! 1 /

' @ ! ; - '% + % '' ()$ ' @ ; ' @ $# ) & ) L '' ()$ ! ! $>' @ $; +) ! X ) ; " K @ ? @$ ; ! Group Reporting %#/; +) ! $ K> ! $> ( : ' ) % / >

2552 1,605,000 313,330

2553 1,790,000 332,880

2554 1,790,000 366,766

( &

1,918,330

2,122,880

2,156,766

The Company paid remuneration to the Auditors of Deloitte Touche Tohmatsu Jaijo Audit Co., Ltd. in the form of both Audit Fee and Non-Audit Fee, such as Tax Advisory Fee, Group Reporting Fee and Out-of-Pocket Expenses as follow: (Unit : BAHT)

Audit Fee Non-Audit Fee Total

130

Year 2009

Year 2010

Year 2011

1,605,000

1,790,000

1,790,000

313,330

332,880

366,766

1,918,330

2,122,880

2,156,766

2554 : ( ) ( ! )

Other References

, # ' '

". # Share Registrar

' @ L '_ # (" / L ) ! # $ 2/7 $ 4 (&; " ;) ; ' -# ? $ % - # $ ; 10210 & L 66(0)-2596-9000 66(0)-2596-9302-11 & 66(0)-2832-4994-6 # $ 62 ; -# # % " / L ) > 2, 6-7 ) ? @ % ;# - -;# - ; 10110 & L 66(0)-2229-2800 & 66(0)-2359-1262-3 TSD Call Center 66(0)-2229-2888

Thailand Securities Depository Co., Ltd. 2/7 Moo 4 (Northpark Project) Capital Market Academy Building, Vibhavadee Rangsit Rd., Toong Song Hong, Lak Si, BKK 10210 Tel. 66(0)-2596-9000 or 66(0)-2596-9302-11 Fax. 66(0)-2832-4994-6 Or 62 The Stock Exchange of Thailand Building, Fl. 2, 6-7, Rachadapisek Road, Klongtoey, Bangkok 10110, Thailand Tel: 66(0)-2229-2800 Fax: 66(0)-2359-1262-3 TSD CALL CENTER: 66(0)-2229-2888

! "" =. Auditors:

) # $ " / T ! '' ()$ ' ( - # $ 4301 . L ? - -)/ - $ # '' ()$ ' ( - # $ 3356 - $ O ) # '' ()$ ' ( - # $ 3461

Mr.Chavala Tienpasertkit CPA No.4301 Dr. Suphamit Techamontrikul CPA No. 3356 Mr. Montree Panichkul CPA No. 3461

' @ $# ) & ) L '' ()$ ! ; ! ) > 25 # $ 183 +- % - ; 10120 & L 66(0)-2676-5700 & 66(0)-2677-5757

Deloitte Touche Tohmatsu Jaiyos Advisory Co.,Ltd. Rajanakarn Building, 25th Floor, 183 South Sathorn Road, Yannawa, Sathorn Bangkok 10120 Tel. 66(0)-2676-5700 Fax. 66(0)-2677-5757

' @ % # ƒ S ! ) > 14 -K !$ $ F 93/1 # $ " 10330 & L 66(0)-2627-3443 & 66(0)-2627-3250

LS Horizon Ltd. 14th Floor, GPF Witthayu Tower A 93/1 Wireless Road, Lumpini, Phatumwan, Bangkok 10330 Tel. 66(0)-2627-3443 Fax. 66(0)-2627-3250

& ?O - ; ! ( 7 (S 1 $ 8) / 58 % / - # ; 10250 & L 66(0)-2300-5629 & 66(0)-2300-5610

Mr. Sophon Kitidanrongcharoen 7 (Soi 1 Seri 8), Rama 9 Road 58, Suanluang, Bangkok 10250 Tel. 66(0)-2300-5629 Fax. 66(0)-2300-5610

./ d % ˆ# Legal Advisors:

Annual Report 2011 : IFS Capital (Thailand) PCL

131

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