OFM: Annual Report 2011 by Piyanat Kimhamanon

Annual Report 2 Officemate Public Company Limited

Content The Board of Directors’ Report Vision and Mission Financial Highlights Company General’s Information OFM and Sustainable Development Nature of Business Operation Industrial Competition Risk Factors and Risk Management Shareholders’ Structure Organization Chart Introduction to the Board of Directors Introduction to the Management Management Structure Remuneration of the Board of Directors and Management Shareholding of the Board of Directors and Mangement Internal Audit Related Transactions Report of the Board of Directors’ Responsibility in the Financial Statements Report of the Audit Committee Management’s Discussion and Analysis Auditor’s Report Financial Statements and Notes

4 6 7 8 9 23 31 33 35 36 37 41 42 51 53 54 59 60 61 63 68 69

The Board of Directors’ Report The year 2011 was another challenging year of business development in order to increase local competitiveness and prepare for the near future competition within ASEAN. Apart from the competition within the business, there were also uncontrollable surrounding factors such as natural calamity which had an impact on economy and society of the country as a whole. However, with the preparation for possible changes, tangible risk management, and continuous distance trade business development, the Company was able to extend its business into many channels in last year and was able to handle the natural calamity with teamwork and spirit of the Directors, Executives, and all levels of staff whose power were important to drive the organization and jointly fight against the flood crisis.

Management in 2011 In 2011, the Company’s revenue growth and profit were as expected through the management system which was in accordance with the expansion of call center team and development of service system which increased the work efficiency with full potentiality. However, the flood in the fourth quarter of 2011 and the government’s announcement of more public holidays had affected the Company’s sales volume and products delivery to customers due to the inconvenient of the routes and some manufacturers had to reduce their productions or was not able to produce and deliver the products to the customers. However, the good economic growth in the first 3 quarters of 2011 had led to the Company reported total revenue of Baht 1,273.47 million, representing an increase of Baht 182.82 million, or increased by 17% from the previous year. The Company reported net profit of Baht 45.97 million, representing an increase of Baht 11.13 million, or increased by 32% from the previous year.

The excellence of software development to provide services In 2011, the Company received the excellence award of Thai software application from the “Thailand ICT Excellence Awards” project which was a cooperation of 4 organizations, namely, Thailand Management Association (TMA), National Electronics and Computer Technology Center (NECTEC), Software Park Thailand, and College of Innovation, Thammasart University (CITU). With determination to develop the Company’s IT system in order to provide the best service to the customers and to help management with efficiency without depending on external service providers had led the Company to receive the excellence award in “Thai Software Application: Software Development for Distance Trade”. The Company had developed its own software for every unit to provide the business service through distance trade of which is based on the ICT system for business operation.

Online business expansion: www.officemate.co.th and www.trendyday.com In 2011, the Company had developed online business and held sales and marketing promotion activities among corporate customers and individual customers which led to a division of business groups in order to create activities and opportunity of distribution covering all of delivery. The free delivery service is for all of customer groups under the same standard whether they are individual, corporate, small, big, or foreign customers with the same purchase value or every purchase of Baht 499. The online customers of the Company can be categorized as follows:

Business to Customer: B2C: www.trendyday.com Focuses on providing services to Business to Customer: B2C which covers all kind of products such as stationary, consumer products, and other products in general to serve the need of all groups of customers.

Corporate Orders System (e-Procurement) It is a development of e-Procurement procedure which is designed specifically for the need of the organization by completely connecting to the procurement system of the company.

Business to Business: B2B: www.officemate.co.th Focuses on providing services to Business to Business: B2B for office products purchase such as stationary, furniture, office appliances and printing.

The Good Corporate Governance Despite the Companyâ&#x20AC;&#x2122;s has been enlisted in the MAI not so long, the Company has realized that the good corporate governance is very important and is a good standard of which the listed companies in the Stock Exchange of Thailand shall follow. Year 2011 was the first year that the Company was assessed with the corporate governance principles, and was one of 171 companies which received the good level (3 stars) from the Corporate Governance Report of Thai Listed Companies (CGR) 2011. The Company will continue its development and corporate governance for better standard. Much of the appreciation goes to all stakeholders for their support and confidence in the Companyâ&#x20AC;&#x2122;s management. The Company can assure that the Company shall hold onto the corporate governance with accuracy following law and morality, with transparency and fairness toward all stakeholders. In addition, the Company will continue its business development to enhance competitiveness in order to create worthiness and increase value with sustainability

(Mr. Sahas Treetipbut) (Mr. Worawoot Ounjai) Chairman of the anaging Director

Vision and Mission Corporate Vision

Mission

Business Strategies

" # $% & # ' & & % $ $& & (

Value & &

Culture ) * * ! + *

Financial Highlights Total Rev enue and Total Net Income (Comparision of 2008-2011) ve 7RWWDO 5HYHQXH 0LOOLRQ %DKW 1500 1300 1100 900 700 500 300 100

1,273.4 47 965 5.43

25 551

1 1,090.65 914.16

2552

2553

7RWDO 1H HW ,QFRPH 0LOOLR RQ %DKW 50 45 40 35 30 25 20 15 10

45.97 34.84 26.64 17.12

2551

2554

2552

2553

2554

Financial Highlights (Comparision of 2008-2011) E Ended 31 De ecember 20 011

2011

2 2010

2009

2008 8

1,219.38

1 1,045.23

87 71.16

925.7 74

43.24

37.77

3 36.71

36.3 32

S Statements of Income (Millio on Baht) S Sales Revenue A Advertising Rev venue Other Revenue

10.84

7.65

6.28

3.3 37

T Total Revenue

1,273.47

1 1,090.65

91 14.16

965.4 43

E EBITDA

84.50

71.44

6 63.29

51.9 99

Net Profit

45.97

34.84

2 26.64

17.1 12

T Total Assets

492.85

442.66

35 56.46

351.2 29

T Total liabilities

249.26

221.33

25 54.52

268.7 70

S Shareholders’ E Equity

243.59

221.33

10 01.94

82.5 59

80.00

56 5

E Earnings per sh hare (Baht)

0.57

0.51

0.48

0.4 41

Dividend per sh hare (Baht)

0.22

0.17

0.19

0.1 13

38.28

39.03

3 39.95

42.5 51

B Balance Sheetts (Million Baht)

S Shares Is ssued and Fully paid-up Sharre Capital (Million Shares)

Dividends Payo out Ratio on Ne et Income (%) F Financial Ratio os

3.61

3.19

2.91

1.7 77

19.78

21.56

2 28.87

22 2.4

R Return on Total Assets (%)

9.83

8.72

7.53

4.6 66

Debt to Equity (Times) (

1.02

1.47

2.84

3.8 81

124.62

21.32

8.79

4.7 74

Net Income on Total Revenue es (%) R Return on Equitty (%)

In nterest Coverage (Times)

Re emark: In year 2011, the us se of the weighting ordinary sharre numbers of 80,000,000 shares se of the weighting ordinary sharre numbers of 68,065,753 shares In year 2010, the us se of the weighting ordinary sharre numbers of 56,000,000 shares In year 2009, the us se of the weighting ordinary sharre numbers of 42,098,630 shares In year 2008, the us

Company Generalsâ&#x20AC;&#x2122; Information General Information Company Name

OfficeMate Public Company Limited

Nature of Business

Distribution of stationery and office appliance through a catalog and receive purchase orders through the systems of Call Center, e-Commerce and e-Procurement

Head Office

24 Soi On-nuch 66/1, Suanluang, Bangkok 10250

Warehouse

70 Moo. 2, Ruampattana Road, Lumtoiting, Nongjok, Bangkok 10530

Registration Number

0107551000134

Registered Capital

Baht 80 million, including 80 million shares

Paid-up Capital

Baht 80 million

Home Page

www.officemate.co.th

Telephone

(66) 2739-5555

Fax

(66) 2763-5555

References 1. Auditor

Mr. Vichai Rujitanont CPA License No. 4054 ANS Audit Company Limited 100/2 Vongvanij Building B, Rama 9 Road, Huaykwang, Bangkok 10320 Thailand Telephone: (66) 2-645-0107-9

2. Registrar

Fax: (66) 2-645-0110

Thailand Securities Depository Company Limited 62 The Stock Exchange of Thailand Building, 4th, 7th Floor, Ratchadaphisek Road, Klong Toey, Bangkok 10110 Thailand Telephone: (66) 2-229-2888

Fax: (66) 2-359-1259

OFM and Sustainable Development 1. Good Corporate Governance In 2011, the Company had established the manual of the “Good Corporate Governance” and the good practices for the Directors, Executives, and staff of the Company which are published on the Company’s website at http://www.officemate.co.th , the “Investor Relations” under “publication” which cover the context following the good corporate governance of OECD (OECD Principle of Corporate Governance, 2004). The context is categorized into 5 modules, namely: Module 1

Rights of the shareholders

Module 2

Equality treatment toward the shareholders

Module 3

Roles of the stakeholders

Module 4

Disclosure of information and transparency

Module 5

Responsibility of the Board of Directors

Also, the guidelines following the good corporate governance of the Directors, Executives, and staff of the Company are established as follows: -

The good practices of the Board of Directors

The good practices of Executives and staff of the Company

The good practices of the human resources management

The good practices of the internal control

The good practices of the conflicts of interest transaction

The good practices of receiving and giving, presents, assets, or other benefits

The good practices of keeping confidentiality

The good practices of stock trading

The good practices of non-connecting with the human rights abuse

The good practices of the utilization of information technology and communication

The good practices of non-abuse of the intellectual property or patent right

The good practices of community development and support

Module 1: Rights of the shareholders The Company places an emphasis upon and realizes the rights of the shareholders with fairness such as the rights to trade and transfer their own securities, the right to receive the profit sharing and dividend with equality, the rights at the shareholders’ meeting, the rights to express their opinion, the rights to jointly make decision in the Company’s important matters such as dividend allocation, election or demotion of the Directors, approval of important transaction which has an effect on the Company’s business operation,

amendment of the charter of the entity or regulation of the Company, appointment of the auditors, etc. In addition, the operation on the rights of the shareholders for sustainability can be summarized as follows: x The shareholders can submit their opinion, suggestion, or question concerning the Company’s matters prior to the shareholders’ meeting to the Company’s Board of Directors via several channels such as FAX, Email, and the Company’s website at http://www.officemate.co.th The information shall be submitted through those channels at least 14 days prior to the shareholders’ meeting. The information will not be indicated as an agenda without informing the advance notice to the shareholders (as for the proposing of the meeting agenda and proposing a person to be considered in the position of the Director prior to the shareholders’ meeting will be scheduled on the Company’s website in each year) x The invitation letter of the shareholders’ meeting will be published in advance as to provide an opportunity for the shareholders to efficiently study the information in the form of document prior to the meeting of no less than 30 days for the Thai version and 7 days for the English version through the Company’s website at

http://www.officemate.co.th ,

“Investor Relations” under “the information for the shareholders – the shareholders’ meeting” x At the shareholders’ meeting, the Company’s Directors, Executives, and connected persons will attend the meeting to provide answers to questions. In addition, important questions and opinions will be recorded and included in the minutes of the meeting of which the shareholders can examine. Also, the Company shall provide an appropriate meeting period and open an opportunity for the shareholders to independently express their opinion, suggestion, and questions in each agenda prior to the voting in any agenda. x To provide convenience to the shareholders who attend the Annual General shareholders’ Meeting, the voting method and counting votes will be informed to the shareholders prior to the meeting. In addition, the barcode system is used for the registration and counting votes. x The shareholders are provided an opportunity to exercise their rights to appoint the Directors by one-by-one voting and to consider an approval of the remuneration of the Company’s Directors in every year.

Module 2: Equality treatment toward the shareholders The Company has policies to protect the right and to treat all shareholders with equality

whether

they

are

major

shareholders,

minor

shareholders,

institutional

shareholders, or foreign shareholders, as follows: x The policy of equality treatment toward the shareholders which follows regulations of which stipulated by laws and related government agency such as the right to own by controlling the Company through the appointment of the Board of Directors as representatives, the right to securities trading and transferring, the right to participation the shareholders’ meeting and voting, including the expression of opinion and consideration the decision of important changes, the right to appointment of proxies to attend the meeting and

vote, the right to demotion and appointment of the Board of Directors, the right to vote for appointment and remuneration of the auditors, the right to perpetual and in-time acknowledgement of information, operating results, and management policy, the right to equal profit sharing, and the right to acknowledgement of connected transaction information. x The Company opens an opportunity for a shareholders or a group of shareholders whose minimum shareholding is at 2.5% to propose meeting’s agendas and propose a person to be appointed as Directors prior to the AGM through several channels such as Fax, Email, and website of the Company at http://www.officemate.co.th. The shareholders shall propose any agenda at least 3 months prior to the ending date of the accounting period (October 1 – December 31 of every year). However, 2011 was the first year of the AGM after OFM’s being enlisted in the Stock Exchange of Thailand in 2010. Thus, the policy required the approval from the meeting of the Board of Directors before announcing to the shareholders from November 2011 – January 15, 2012. x The shareholders receive the right to vote with one share per one vote. x The meeting invitation letter is published in advance for the shareholders to study the information with sufficient information before receiving the information in the form of document. This will be published of no less than 30 days for the Thai version and no less than

days

for

the

English

version

through

the

Company

website

http://www.officemate.co.th , the “Investor Relations” under “the information for the shareholders – the shareholders’ meeting” x The shareholders who cannot attend the meeting are allowed to assign proxies to Independent Directors or any other persons to attend the meeting in place of them. This can be done through the proxy forms A or B or C which are sent by the Company with the invitation letter which includes the document and proxy principles. x The Company shall not add any additional agenda or change any important information without informing the shareholders in advance x The Company’s Directors and executives with conflicts of interest shall be refrained from the voting and leave the meeting when there is an agenda of which they have conflict of interest. x The insider trading measure is established to prevent any misuse of the information of related persons which includes the Directors, Executives, Staff, and employees of the Company who are related to the information (including spouse and children who have not become their legal age) shall neither disclose the inside information to the outsider or others whose roles are not related nor seek benefit for their own and related persons from their positions and information which are credential of the Company. The insider trading measure is as follows: -

The Directors, Executives, or staff in Departments who receive the inside

information shall neither disclose the information to the outsider or other persons whose roles are not related, nor trade the Company’s securities within the period of 1 month prior to the published of the Company’s financial statement. The Secretary of the Company will inform the schedule the period in each quarter.

The first 4 Directors and Executives after Managing Director shall report

securities holding changes to the Securities Exchange Commission (SEC) which is in accordance with the Section 59 of the Securities and Exchange Act B.E. 2535. Module 3: Roles of the stakeholders The Company has realized the encouragement of the building of competitiveness and profit from operation to the Company as the commencement of the long-term success of the Company. The Company places an importance upon the right of all stakeholders whether they are in-house stakeholders such as the staff and Executives of the Company or external stakeholders such as the shareholders, customers, trading partners, competitors, creditors, the government, communities, and other related organizations. Therefore, the Company has established the policy and good practices which aim for transparency and fairness of corporate governance to all stakeholders as follows: x The manual of Directors, Executives, and staff disclose the policy and important information concerning safety and sanitation, remuneration and fringe benefit of the staff, personnel development of the Company and its training plan, and provident fund of the staff for long-term care of the staff. x The manual of “Code of Conduct and Business Ethics” is established and official practiced in the Company for strict acknowledgement and practice of all Directors, Executives, and staff. The manual places an importance upon the right of all stakeholders such as shareholders, trading partners, competitors, creditors, customers, and communities. x The good practice of the Good Corporate Governance is established as guidelines for the Directors, Executives, and staff of the Company as appeared in the manual of the “Corporate Governance”, including the Human Resources Management, the Internal Control, the report of the conflicts of interest, the receiving and giving of presents, assets, or any other benefits, the keeping of confidentiality, the stock trading, the utilization of information technology and communication, x The Complete communication channels with the Company via telephone, FAX, and website of the Company at http:///www.officemate.co.th, including responsibility information for all stakeholders such as shareholders, customers, trading partners, and communities and to provide opinion, questions, or suggestions to the Company x There is a measure to protect informants who provide information to the Company’s Directors with the matter concerning any illegality or immorality, the financial report, and the internal control system. The informant can report the matter to the Independent Directors through Office of Secretary of the Company or

the Company’s

website at ir@officemate.co.th

Module 4: Disclosure of information and transparency x

Disclosure of shareholding structure - The disclosure of the shareholding structure is performed with a complete

indication of the structure of the major shareholders and the proportion of the minor shareholders.

- The disclosure of the shareholding of the Directors and the Executives is on the Annual Report (Form 56-2) x

Communication of the Company’s information through channels - Communication of the Company’s information is through the Annual Report

(Form 56-2), the Company’s website at http://www.officemate.co.th, quarterly Analyst Meeting and Opportunity Day, and press conference. - Managing Director or the person who acts for Managing Director are responsible for the disclosure of information and coordination with related organization, including providing information to other joint investors as approved by the joint investors. - The establishment of the Investor Relations Department and the website of the Investor Relations with contact information for the investors, shareholders, analysts, and others

communicate

can

performed

through

the

Company’s

website

http://www.officemate.co.th, in “Investor Relations” - The Company Secretary is the contact person of the Company with related organizations within the capital market such as the Securities and Exchange Commission, the Stock Exchange of Thailand, The Thailand Securities Depository Co., Ltd., and the Ministry of Commerce. - Managing Director, the Company Secretary, and Chief Financial Officer act as the contact persons who are responsible for the disclosure of the information to the Stock Exchange of Thailand and submitting the document disclosed within the accounting period, namely, the quarterly and annual financial statement, the annual registration statement (Form 56-1) and the Annual Report (form 56-2), etc, and following incidents or other periods such as the acquisition/ disposal of assets, connected transaction, schedule of the shareholders’ meeting, the change of Directors and the Auditors, changing the location of the headquarter, report of the shareholders’ meeting, and investment projects. x

Disclosure of information and transparency - No record of Amendment of Financial Statements ordered by the Stock

Exchange of Thailand and the Securities and Exchange Commission. - The Board of Directors has include the disclosure of important information in the Form 56-2 as follows:

(1) The report of the Company’s status evaluation and direction which is an easy-to-understand summary;

(2) The report of responsibility of the Board of Directors toward the financial statement indicated with the report of the Auditors;

(3) The disclosure of the policy of the remuneration of the Directors and the Senior Executives reflect the roles and responsibility of each person in terms of the form and or the type of remuneration;

(4) The performance of Directors and/ or the Directors of specific matter in the previous year such as numbers of the meetings, numbers of meeting attendances of the each Director and opinion of their performance. - The Board of Directors has included the policy of Corporate Governance (“Corporate Governance” manual) in the annual registration statement (Form 56-1), the

Annual Report (Form56-2), and the Company’s website at http://www.officemate.co.th, “Investor Relations” under “Publication”. - The Board of Directors stipulates that the Audit Committee shall review the quality of the financial report and the internal control system, including the sufficiency of the disclosure of important information in the remark of the financial statement, and report to the Board of Directors for acknowledgement. - The First 4 Directors and Executives after Managing Directors have a role to report the change of their shareholdings (Form 59-2) to the Securities and Exchange Commission within 3 days after the change of the shareholdings and a copy of the report shall be submitted to the Company Secretary within 7 working days. The report will be gathered and reported to the meeting of the Board of Directors in every quarter. - The First 4 Directors and Executives after Managing Directors are responsible for reporting their conflicts of interest and related persons to the Company’s Chairman of the Board and Chairman of the Audit Committee as stated in the Securities and Exchange Act B.E. 2551. The Company Secretary shall submit the copy of the conflicts of interest report to Chairman of the Board and Chairman of the Audit Committee for acknowledgement within 7 days, starting from the day when the Company receives the report. - The Company provides its Investor Relations website to present up-to-date information such as the Company’s financial statement, news of the Company, shareholding structure of the Company, corporate structure, profiles of the executives, investor relations information, the annual report, meeting invitation, and the report of the shareholders’ meeting, etc. at http://www.officemate.co.th under topic “Investor Relations”.

Module 5: Responsibility of the Board of Directors The Board of Directors consists of the experts with knowledge, capability, and experience which benefit to the Company whose important roles stipulate the Company’s policy, business plan, target, and budget, as well as supervise the management to perform as assigned with efficiency and effectiveness. The followings are the responsibility of the Board of Directors: x

No record of any misbehaves against the regulation of the Stock Exchange of

Thailand and the Securities and Exchange Commission. x

The Board of Directors is independent with the reasonable decision making

under morality and with the realization of the benefit of the Company. Thus, there is a clear distinction of roles and responsibility of the Board of Directors and the management. The Board of Directors shall assign the management and the officer of the Company who work full time or the Sub-Committees which are appointed by the Board of Directors to perform the matter with carefulness and perpetual follow-up and examination. x

The Directors shall have knowledge, capability, expertise, and experience which

are beneficial to the business operation and truly possess the interest in the Company’s business as well as integrity, fairness, and morality which lead to lawful corporate governance and the utmost benefit to the Company and all stakeholders. x

The shareholders’ meeting shall agree and approve the appointment of the

Board of Directors.

In 2011, the Board of Directors consisted of 8 members whose terms in the

positions were not limited, namely, 3 Independent Directors and 5 Executive Directors. The numbers of the 3 Independent Directors were over one –thirds of the total Directors in the Board of Directors. x

All of the Directors live in Thailand.

Chairman of the Board is independent and is not in the executive position in the

Company, and is not the same person as Executive Chairman and Managing Directors as to clearly distinct the role of policy making and corporate governance. x

The quarterly meeting between the Independent Directors without the presence

of the management team is organized for independency of opinion expression in order to develop the management of the management team. x

The position of Corporate Secretary has been established since 2008 after the

change from company limited to public company limited. Company Secretary can lawfully perform the duty on behalf of the Company or the Board of Directors such as organizing and keeping important document of the Company such as the Directors’ profile, invitation of the Board of Directors’ meeting, the report of the Board of Directors’ meeting and the Company’s annual report, the invitation of the shareholders’ meeting, keeping the report of the conflicts of interest reported by the Directors or Executives, including performing other operations as stipulated by the Capital Market Supervisory Board (CMSB). x

The Board shall appoint the secretary of the Board to perform operation

concerning the Board of Directors’ meeting and the shareholders’ meeting, and provide suggestion on regulations required for acknowledgement by the Board of Directors, as well as take care of the Board of Directors’ activities, including coordinating to ensure the following of the Board of Directors’ resolution. x

The Board of Directors has appointed 2 set of the Sub-committees, namely, the

Audit Committee and the Executive Committee of which scope and power of operation are clearly specified. In addition, the Board specifies the operation and power of the Board of Directors, the Executive Committee, and Executives in the manual of “power of operation” of the Company which is adjusted for appropriation in every year. x

Roles and Responsibilities: - To perform lawful operation, objective, regulation, and the resolution of the

shareholders’ meeting with integrity, responsibility, carefulness, and keeping the benefit of the Company based on the good Corporate Governance principles. - To revise and consider providing approval on important matters such as policy, business operation strategy, business plan, budget for large investment, management power and other legal transactions, including supervising and taking care of the management to ensure its compliance to the assigned policy with efficiency and effectiveness. - To establish creditable accounting system, financial report and auditing, as well as to ensure the efficiency and effectiveness of the internal control system, internal auditing system, and the risk management system. - To provide the annual Board of Directors report and be responsible for the preparation and the disclosure of the financial statement which indicate the financial status

and operating results in the past year in order to propose to the shareholders’ of the Company . - The Board of Directors may assign a Director or Directors or any other persons to perform any of operation on behalf of the Board of Directors. The authorization shall not include the authorization or the authorization in the period when the Director or the person who receives the authorization from the Director can approve the transaction of the Director or the person whose conflicts of interest or benefit is against the Company or the Company’s subsidiaries, except for the approval of normal business operation transaction and in accordance with the general trading condition, and the stipulated method concerning the connected transaction and the acquisition or disposal of important assets of the listed companies following the regulations of the Stock Exchange of Thailand or the announcement of the Securities and Exchange Commission. - The Board of Directors takes part in the stipulation of visions and missions of the Company which is revised every year. - The Board of Directors initiates, takes part, and approve the preparation and approval of the corporate governance policy which is revised every year. - The Board of Directors initiates, takes part, and approve the preparation and approval of the business ethics and morality for the Directors, Executives, and staff by preparing manual of “Code of Conduct and Business Ethics”. Company Secretary shall communicate to ensure their understanding and practicing of the policy and the guidelines. The manual is annually revised. - The Board of Directors stipulates that the risk management working group of the Company at the management level shall be established in order to perform its duty on examination and supervision of initial risk management such as financial risks, operation risks, business risks, or event risks, etc. The risk management working group shall analyze and assess the internal and external risks which may occur and tend to have impacts on the Company, as well as prepare the Risk Management Report in order to quarterly report to the Audit Committee for consideration and screening prior to proposing to the Board of Directors. - The Board of Directors assigns the preparation of the manual of “power of operation” in written form with stipulation of responsibility and roles distinction, operation power of the performers and Executives on matters, assets supervision, approval of transactions, documentation of accounting and financial information, roles distinction of performers, controller, and separation of the evaluation in order to create checking and balancing, and mutual examination with appropriateness. - The Board of Directors shall assign the appointment of the internal audit organization which has a dependency of the auditing and directly report to the Audit Committee, including the examination of the operation and perform important activity following the stipulated guidelines with sufficient efficiency. In 2011, the Company hired IVL Auditing Co. Ltd. as the independent internal auditing organization which directly report to the Audit Committee. - The Board of Directors assigns the disclosure of the connected transaction in the annual registration statement (Form 56-1) and the Annual Report (Form 56-2). In 2011, the transaction was indicated as “None”.

The Board of Directors’ Meeting: - The meeting shall be quarterly organized with special meeting as necessary.

The agendas are clearly specified in advance. Secretary of the Board of Directors shall send the invitation letters indicating date, time, venue, meeting agendas, and meeting document with information which is sufficient for the decision making and independent consideration of the Board of Directors in advance at least 7 days - Secretary of the Board of Directors shall record important information at the meeting and prepare meeting report which contains complete information within 15 days starting from the day when the meeting is completed. The report will be submitted to Chairman of the Board for signature and will be kept as confidential, easy to search, and can be a reference for inspection. - The Directors of the Company have a role to attend every Board of Directors’ meeting unless there is a necessity. The Company will send the minutes of the meeting report and meeting document for the Company’s Directors to use as references and can be references for inspection. - In terms of the consideration of matters, Chairman of the Board of the Company, whose role is Chairman of the meeting, shall open an opportunity for Directors to independently express their opinion. In each agenda, senior executives who are related to the agenda shall attend the meeting to provide information which is beneficial to the meeting, including directly receiving the policy from the Board in order to efficiently operate. - The Directors who have conflicts of interest with any agenda shall leave the meeting and have no right to vote the agenda. x

The self-evaluation of the Committee: The Board of Directors stipulates that the

evaluation of the Board of Directors’ performance shall perform every year in order to consider the performance and supervision with consistent appropriateness. x

The evaluation of Managing Directors’ performance: The Executive Board will

consider and propose the opinion to the Board of Directors for consideration of the evaluation criteria for the annual performance of Managing Directors. x

Since the Company’s policy of remuneration payment to the Non-Executive

Directors only, the Executive Directors shall not receive the meeting remuneration for attending the Board of Directors’ meeting. In 2011, the Executive Board who had conflicts of interest in the remuneration of the Directors was assigned from the Board of Directors to consider the remuneration of the Directors policy as the provider of the information for fair consideration such as responsibility and roles of the Executive Board, the comparison of information with other listed companies of which business characteristics and sizes were similar and in the same industry, the information of the remuneration of the Directors and Executives of listed companies in 2010 organized by the Stock Exchange of Thailand, and proposed to the Annual General shareholders’ meeting for further consideration. x

Development of Directors and Executives - The Company continuously encourages the Board of Directors and Executives

of the Company to attend courses which are benefit to the operation and self-improvement and improvement of the Company such as training courses of the Thai Institute of Directors and the Stock Exchange of Thailand, etc.

- Upon changing Directors, the Company holds an orientation for new Directors with the preparation of Directors’ manual concerning good practices of the listed companies’ Directors and other information concerning the Company’s business operation to the new Directors of the Company to receive the information which is beneficial to the Directors’ operation, including the provision of beneficial courses to the Directors for selfdevelopment and the Company’s development.

2. Fair Business Operation The Board of Directors stipulates the manual of “Corporate Governance” and the manual of “Code of Conduct and Business Ethics” for all level of personnel in order to prevent any action against the Company’s benefit or business ethics, or any seeking for one’s own benefit from an opportunity or information received from being in the position of Directors or staff, or from contacting with related trading persons of the Company, or perform business operation which is in competition with the Company or have other works which affect one’s performance. Thus, the Board of Directors assigns the management to perform operation concerning the following matters: x

To establish a comparison and evaluation of the trading partners qualification

with fairness without depending on one’s own benefit. The internal audit unit will randomly examine the evaluation system in every quarter and directly report to the Audit Committee. x

The trading partners who receive an unfair treatment or are threatened or

receive bribery from the Company’s offer, can file complaints to the Corporate Secretary or email to ir@officemate.co.th x

To strictly perform operation following the conditions as agreed with the

vendors or creditors in the joint business operation agreement. x

To promote the operation with responsibility to society of the trading partners

and open an opportunity for the trading partners to take part in activities for society with the Company such as the encouragement of legal accounting operation, preparation of the SMEs to be the listed companies, etc. The trading partners can join the activities with donation, supporting with funds or experts to provide knowledge to the SMEs. x

All levels of staff and/ or families are refrained from requesting or receiving

presents, assets, or benefits from the contractors, sub-contractors, customers, trader/ vendors, joint investors, or related persons with the Company’s business in any case which may affect the decision of operation with bias or difficulty or leading to the conflicts of interest. x

The Company shall consider offering presents, assets, or benefits to any other

persons in the form of not over appropriateness or too extravagant or going against the tradition or law of Thailand which is effective on the Company. x

The Company will always have an announcement on the report of the

receiving of the presents, assets, or other benefits as well as inform the Company’s policy to the contractors, the sub-contractors, customers, traders/vendors, joint investors, or related persons with the Company’s business. All level of staff shall prepare the report of the disclosure of any possible item which may post conflicts of interest against the Company by

informing the supervisors in orders and submitting to the responsible department of the Good Corporate Governance.

3. Human Rights and Fair Practices toward Labour The respect for human rights is fundamental to the development of human resources, which are associated with type of business and value added. Moreover, the human resource is a key factor in creating value added and increasing productivity. The Board of Directors has authorized the management to set policy and direction for the human development of the company as following: 3.1 Compensation and Benefits The Company's remuneration of employees shall be as close to the industry of similar size together with the proper benefits to employees under the law. It is considered more appropriate in case by case i.e. diligent allowance, up-country allowance, uniforms, employee shuttles, year of service awards, providence fund of 3-5 percent by age for voluntary employee contribution to the Company which the Company will provide employees at the same rate. 3.2 Human Development The Company encourages each function to request the development of human resources to strengthen the capacity and capability in the performance of their department to serve as the foundation of growth in the whole of the organization.

The Human

Resources Department scheduled to annual staff development plan and presented to the Executive Committee to consider ways to develop before the Board of Directors acknowledges. However, the Company has established the guidelines for the development of an important issue into three parts as below: 3.2.1

Development in line with corporate strategy

Of its commitment to pioneering technology and concepts using modern management in the enterprise and service provider customers, the Company is focused on employee development at all levels are ready for competition to be a leading on Distance Trade by learning the importance of information technology as a fundamental priority and establishing the training on the use of information technology into two parts as the following: (1) the training on the use of information technology for fundamental use (2) the training on the use of technology for business operation Moreover, the Company aims to enhance the working environment and have fun together and have a good quality of life. The recreational activities between departments every year will be established i.e. the event "One Team-One Dream-One Goal", "The Synergy Team" and etc. The activities will encourage employees at all levels aware of the direction and trend of company business which encourages them to perform their duties in the same direction as well.

3.2.2

The development on management and leadership development For effective strategic management and decentralization of responsibility

systematically and in the same direction, the Company has a policy of encouraging employee with remarkable achievements in the profession to be trained to prepare for management and leadership development in order to optimize the performance of management in the future to keep pace with the competition and the transformation of the business.

The courses provided will be related to management and leadership

development programs such as a supervisor program, professional manager program, and etc. 3.2.3

The roadmap on human development and learning management To provide customers with accurate, fast and reliable is the heart of the

business of Distance Trade, so it is important that employee at all levels must realize that the customer is the most valuable asset to our organization and to work in their duty to build the customer satisfaction. So the Company has activities in various fields to framework for systematic learning as below: - Define the need for training in line with corporate strategy and professional ability to increase the competitiveness and leadership in business - Orient for the company's business, business structure and overall business management, learning strategies in conjunction with the development of personnel - Develop and promote learning through the library, website for learning within the organization (CMS Website), e-Learning Room), and etc. - Develop Self-Learning from Functional Team Learning, Cross Functional Team Learning, and etc.

4. Customer Responsibilities The company is committed to customer satisfaction and confidence to customers by delivering quality products and good service at reasonable prices and maintaining good relationships and sustainability. The company has set guidelines as the following: x

A commitment on customer satisfaction and confidence to get good quality and

reasonable price including the rising of standard of work and services steadily x

Not discriminate against customers. It is committed to treating all customers

fairly in terms of products and services x

Disclose information about products and services completely, timely and

without any distortion of facts including maintain good and lasting relationship with customers x

Give the warranty and service in the right time

Estab blish a syste em to allow w customers s to compla ain about go oods and se ervices

and process the best b in order to respons se customers very quic ckly through all channels such ephone, facs simile, email and etc. as tele x

Not profiteering p b comparin by ng the quality of goods or services in same typ pe and

not do o the unfair trade t to cus stomers. x

Strictlly complian nce with con nditions to its customers. If we ca annot comp ply with

the terms or cond ditions, this must notify y the custom mers in advance in ord der to jointly y find a on together. solutio x

nfidentiality of our cus stomers verry seriously and consis stently. Mainttain the con

The in nformation is s not used fo or the beneffit of ourselv ves and our stakeholders. x

Prohibits the disc closure of cu ustomers’ in nformation received from m business as it is

the na ature of con nfidentiality unless the disclosure obligations under the responsibilities or laws.

5. Social and Community Development With the commitme ent to susttainable an nd sufficien ncy growth h, the socia al and comm munity is th he one imp ortant facto or that com mpany pays s attention and suppo orts to streng gthen by cooperatio on and as ssistance as part of o its com mitment to t the comm munities in the vicinity y of the com mpany. on to activ vities for co ommunity in the loca ation of th e Compan ny, the In additio Comp pany has o ther activitties to ben efit society y in many different d fo orms that can c be done as follows :

1. Annu ual Library Project for schools 2. Activ ities based d on social events 3. Itemss donation for educattion of child dren 4. Com pliance witth law to b e a good example e forr communi ty 5. Othe r activitiess such as donation money, ittems, statiionery, tea aching pment, etc.. equip ctivities pictu ures in year 2011 were compiled c in an annual report of 2011, as follow ws: For ac ceMate Dellivery Project – Knowle edge delivery to childre en No. 5 z Offic T This activity held consecutively for a period of five years, aims a to p promote rea ading to child dren from kindergarten n to primary school a well as th as he people who w live in communitie c es surroundiing the s schools.

T The Compa any will ma ake improve ements librrary to

s schools whe ere don’t have money y to repair and mainte enance an nd books provide a us seful additio on to the sk kills learned in the classroom. Such h activities provide p opp portunities fo or customers, suppliers s and the general g public c to donate their old bo ooks and ne ew books for children by b sending tthe compan ny’s car

to get the books donation d as requested and the Com mpany also provides ne ew addition books such as a academiic books, exxperience bo ooks and ettc. in order to be the co omplete librrary for learnin ng. z Assistance Acttivities to he elp victims of o flood in year y 2011

Activity y No. 1 The Company C has s donated to flood f victims through its Fa amily Knowh how Co., Ltd., Money Channel Producerr by donation of Baht 100,000 at the e Stock Exchan nge of Thailan nd Building Acttivity No. 2 mpanyâ&#x20AC;&#x2122;s representative es participa ated in pre eparing, delivering The Com donatio on items an nd EM Balls s to help th he flood vic ctims at Thai Red Cross, Don Muang g Air Port an nd other age encies that n need volunteers.

o. 3 Activity No The Company offered help to flo ood victims living in area as close to the t anyâ&#x20AC;&#x2122;s wareho ouse by allo owing cars to park in wa arehouse arreas Compa until passing the crisis. c

z Don nate items to t create ed ducational opportunitie o es for childrren Th he Compan ny donated stationeries and items to â&#x20AC;&#x153;Pankan Shopâ&#x20AC;? by Yu uvabadhana a Foundatio on every yea ar to supportt the revenu ue from sales s of appliances so as s not to de educt the c cost of edu ucating stude ents across the country y.

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z Program ms to prevent and supp press drug abuse The Comp pany has joined the lab bel warning gs of the pe enalties and dange erous of drugs in the workplace and provided the substance e of the em mployees as s required by the Actt. AntiNarcotics No. 3, year 2000 to be b the good d example to the al where is th he location o of the Comp pany. community and socia

Nature of Business Operations Background, Change and Significant Development OfficeMate Public Company Limited was incorporated on 28 February 1994 by Ounjai Family which has the business experience in stationery and office equipment for more than 40 years. Now the Company has registered capital of Baht 80 million and paidup capital of Baht 80 million. The summarize of significant development of the Company is as follows;

Year 1994

Significant Developments -

Incorporated the Company with initial registered capital of Baht 5 million to sell stationery and office equipment via catalog system which first printed about 20,000 copies and order through Call Center system.

1999-2008

Launched website named www.officemate.co.th to increase the efficiency and purchase order channel to reach customers easily.

Changed warehouse system to be flat system in area 2,000 square meters and manage the warehouse by using the warehouse management system to facilitate the warehouse management and distribution.

Installed Intelligent Call Center system by bringing software system to help in management and control Call Center system more efficient.

Developed e-Procurement system called B2B to meet the specific needs of corporate organizations

2008

Published monthly “at Office” magazine with the first printed about 40,000 copies

Started operation in new modern warehouse to support the stationery and office equipment up to 10,000 units on more than 7,200 square meter of storage space

Printed 4-colors catalog with the book over 600 pages of 200,000 copies which can present more than 8,000 items to meet the expanding of standard customer’s needs.

Became public company on 2 June 2008 with registered capital of Baht 80 million and paid-up

Launched website named www.trendyday.com to meet the individual customers (Personal Use)

capital of Baht 56 million 2009

by increasing the product group related to everyday life under named Trendyday -

Adjusted the aggressive market tactics by preparing monthly catalog named “OfficeMate Shopping Zone & Trendyday Catalog” replace of magazine named “at Office” by offering the direct sales promotion and being tools to maintain ongoing customers’ relationship

Started Redeem Center services to be redeem gift online channel by targeting on commercial’s credit card to be the target group at an early stage

2010

Listed the Company’s shares register in Market for Alternative Investment (mai)

2011

Installed Multi Call Center system for increasing sales’capabilities

Launched “Web-Chat” service to provide the product details and answer the questions to

Expanded the Call center branches and increase the manpower of Telemarketing agents

customers everyday

The business operation of the Group The Company sells stationery and office equipment via online catalog which has quality and standard over than 12,000 items under the brand of leading manufactures and brand of the Company (House Brands). There are 11 product categories covered computer supplies, writing and correction, office stationery, glue, tape and packing, paper, pad and envelop, filing and storage, conference and presentation, office electronics, factory and maintenance, canteen and cleaning and office furniture via Call Center “OfficeMate Contact Center”, on-line system www.officemate.co.th and purchase order system developed for each organization called OfficeMate e-Procurement. In year 2009, the Company expanded its business to Individual Group (Personal Use) through website, www.trendyday.com. There are other variety of products out of stationery and office equipment product more than 20,000 items divided into 23 categories including stationery, office equipment, computer, IT equipment, mobile phone, camera, high technology equipment (Gadget), gift shop, fashion, health and beauty, Sports & Outdoors, Home Electronics, kitchenware, Home and Garden, Automotive, Pet Shop, Music, Movie and DVD, Books, Mother and child, Toy, Cleaning product, Food and beverage, Computer game and Trendy Mart. The Company focuses on selling quality products and free delivery services nationwide for the purchase order starting from Baht 499. The delivery service has available in the next day for customers in Bangkok and nearby provinces and guarantee the satisfaction of every customer. Now the Company has customer base over than 80,000 leading organizations such as Siam Commercial Bank Public Company Limited, Kasikorn Bank, Hongkong Shanghai (Thailand) Bank, Federal Express (Thailand) Company Limited, Ajinomoto (Thailand) Co., Ltd., Charoen Pokphand Group, Mitrphol Group, Airports of Thailand Public Company Limted, Toshiba Thailand Group, Suzuki Motors (Thailand) Co., Ltd. and public organization such as Chulalongkorn University, The Thai Red Cross Society, Kasetsart University, Thammasart University, Srinakharinwirot University and Ministry of Public Health as the example.

selling through catalog, the Company is expanding its business flexibly and quickly to meet ongoing of customer’s demand without shop opening which needs high investment and consume time in opening branch.

Product or Service Office stationaries and accessories The Company main business is selling office stationaries and equipment via 4-color printing catalogs up to 800 pages which contain about 12,000 items comparing on both product specification and price. This can be categorized into 11 categories as following; 1. Computer Supplies such as ink cartridges, printers, monitors, scanners, projectors, recording equipment, DVDs, mouse, keyboards, mouse pads, computer cleaning

kits and etc. The product category is the selected from well-known and reliable vendors i.e. Sony, HEWLETT â&#x20AC;&#x201C; PACKARD, Microsoft, 3M, Brother, Epson, Canon and etc. 2. Writing and Correction such as pens, pencils, dermatograph soft colored pencils, correction tapes, erasers and etc. This product category is selected from well-known vendors i.e. Horse, Zebra, Pentel, Cross, Parker, i-YA (House Brand) and etc. 3. Office Stationary such as staples, tackers, scissors, envelop openers, cutters, ID. Card holders, rubber stamps, mail boxes, stamp pads, stationary kits, index tabs and etc. This product category is selected from well-known and reliable vendors i.e. MAX, Horse, Elephant, Maped, Nanmee and etc. 4. Glue, Tape and Packing such as multi-purpose glues, elephant glue, invisible tapes, self- adhesive cellulous tapes, OPP tapes, vinyl tapes, packing accessories and etc. This product category is selected from well-known vendors i.e. Scotch, 3M, UHU, Elephant, Boku Boku (House Brand) and etc. 5. Paper, Pad and Envelop such as copy papers, color card papers, Buffalo skin papers, ink jet papers, overhead project films, continuous papers, fax papers, carbon papers, Post-It notes, Self-adhesive notes, perforation papers, note books, payment vouchers, delivery bills, account notebooks, card cases, envelops, sticker labels and etc. This product category is selected from well-known vendors i.e. Double A, Strings (House Brand), Green Read (Siam Cement Group), Epson, Elephant, Post-It, Venus and etc. 6. Filing and Storage such as box files, ring binders, lever clip files, hanging files, clip spring files, computer index files, desk stands, display files, plastic file, multi-purpose plastic files/envelops, index label, fasteners, eyelet, clipboard, book partition, document boxes, document basket, document cabinet and etc. This product category is selected from well-known vendors i.e. Horse, Elephant, King Jim, Tarifold, Comix, Flamingo, i-YA (House Brand) and etc. 7. Conference and Presentation such as whiteboards, flip chart, electronic boards, boards, brushes, binding machines, laminator machine, microphone sets, amplifiers, cassette tapes, VDO tapes and etc. This product category is selected from quality and reliable vendors i.e. Zee (House Brand), Fuji, ibico, creates-uniqie, Sony and etc. 8. Office Electronics such as calculators, cash register machines, label printers, telephones, fax machines, copier machines, fax films, ribbon cartridges, clocks, batteries, time attendances, paper shredders, air purifiers, paper folding machines, passbook printers, banknote counting machines, coin sorters, electric plugs and etc. This product category is selected from quality and reliable vendors i.e. Casio, Comix, Canon, Sharp, Olympia, Aurora, Brother, Panasonic, GE, Reach and etc. 9. Factory and Maintenance such as screwdrivers, wrenches, pliers, hammers, keys, safety helmets, goggles, gloves, boots, tapes, tool boxes, hot melt glue guns, warning/safety signs, traffic cones, rubber hoses, weights, weight scales, trashes, tools cabinets, lamps, fans, shelves, stairs, trolleys, stackers, rubber wheels, sport equipment and etc. This product category is selected from reliable and quality brand 10. Canteen and Cleaning this product category is served to restaurants, lounges and restrooms in any organizations such as coffees, creamers, sweetened condensed milks, sugars, tea, beverages, candies, instant noodles, canteen accessories, trays, spoons, cups, coolers, kettles, kitchen wares, tissue papers, hand dryers, soaps, soap dispensers, glass

cleaners, car shampoos, dishwashing liquids, detergents, air perfumes, mosquito and insects repellents, rubber gloves, mops, brooms, wooden features, vacuum cleaners, chairs, garbage bags, trashes and etc. This product category is selected from trusted and reliable brand i.e. Nescafe, Moccona, Birdy, Milo, Ovaltine, Coffee-Mate, Lipton, Twining, Yam Yam, Scoth, Kiwi, vim and etc. 11. Office Furniture the product in this category is chairs, sofas, desks, computer desks, executive desks, meeting tables, cabinets, counter and accessories, kitchen furniture, kitchen wares, dining tables, steel cabinets, safes, key boxes and etc. by using Furradec (House Brand), Lucky and etc. including installation service from skillful and reliable staffs.

Everyday life related product In 2009, the Company expanded to cover everyday life related product which can be divided to 23 categories for 20,000 items as following: 1. Stationary and office equipment The product in this category is pens, staples, cutters, office stationaries and etc. 2. Computer and IT The product in this category is ink cartridges, printers, monitors, DVDs and etc. 3. Mobile phone The product in this category is mobile phones and accessories 4. Camera The product in this category is digital cameras, Toy cameras with popular brand i.e. Canon, Casio, Nikon, Olympus, Panasonic, Samsung and etc. 5. Gadget The product in this category is flash drives, Hubs, speakers, earphones, GPS, mouse, keyboards, webcam cameras, MP3, MP4 and accessories and etc. 6. Gift Shop The product in this category is pillows, piggy bank, key chains, music boxes, mugs, lamps and etc. 7. Fashion The product in this category is clothes, bags, shoes, jewelries, belts, watches, underwear, stocking and etc. 8. Health & Beauty The product in this category is cream & lotion, perfume, cosmetics, nutrition and etc. 9. Sport and Outdoors The product in this category is sport equipment, exercise machines, sportwear and etc. 10. Home Electronics The product in this category is electric appliances, audio devices, TV, lamps and etc. 11. Kitchenware t The product in this category is pots, electric ovens/pans, flasks, kettles, toasters, blenders, coffee machines, kitchen tools, food packaging and preservation, accessories on dining table, cleaning accessories and etc.

12. Garden and Home The product in this category is cushions, chicks, beddings, lamps, gardening tools, bathroom equipment, multi-purpose boxes, carpets, napkins, towels and etc. 13. Automotive The product in this category is car care products and accessories, car accessories and etc. 14. Pet Shop The product in this category is cleaning and beauty tools, fashion products, snacks, food and healthy product, seats, beds, toys, collars, ropes, pets carryings and etc. 15. Music The product in this category is western music, Thai music, MP3 and etc. 16. Movie & DVD The product in this category is 100% copyright i.e. series movies, actions, adventures, investigates, romantics, dramas, documentaries, horrors, concerts, amusements and etc. 17. Book The books in this category is novels, literatures, health and beauties, religions, philosophies, languages and educations, managements, astrology, garden and home, pets, mother and child, documentary, youth, cartoons, cultures and travelling, computers and IT, foods and beverages, crafts and arts, music, sports, games, writings by the king and etc. 18. Mother and Child The product in this category is clothes and accessories for mother and child, children toys, gifts for baby and etc. 19. Toy The product in this category is educational toy, robots, sports, radio control toys and etc. 20. Cleaning product The product in this category is home cleaning product and tools and etc. 21. Food and Beverage The product in this category is cookies, desserts, candies and etc. 22. Computer Game The product in this category is DVD games, mouse, keyboards, earphones, mouse pads, gamepads, joysticks and etc. 23. Trendy Mart The product in this category is everyday using product i.e. tissue papers, cleaning tools, air perfumes and etc.

Distribution With the â&#x20AC;&#x153;Distance Tradeâ&#x20AC;? business model, the media plays important role to the Company in the sales and promotions. The sales media can be classified as follows:

1. Yearly Catalog: The Company sells stationaries and office equipment via 4-color catalogs which publishes yearly. In 2011, the Company published about 200,000 catalogs represented various products for more than 12,000 items as the Company’s front door to display the variety of product under the reliable brand. 2. Monthly Catalog: It’s the channel to introduce the new products and promotions on sales as well as to keep the customers’ relationships. 3. Website: Online unlimited products and promotions presented 4. Telephone: Direct sales from the telemarketing agents to introduce products and services 5. Printed media / Online / Others: Brochures, leaflets, SEO, etc.

Channel to order The way to make an order can be divided in to 3 ways as following: 1. Call Center This facilitates the clients to study and compare before ordering via Call Center “OfficeMate Contact Center: 02-739-5555” and the individual client can order by Call Center Ordering “Trendyday Contact Center: 02-730-7777” which all served more than 300 telemarketing lines by well-trained staff who equipped with product knowledge and consistent service 2. Facimile OfficeMate & Trendyday Fax Ordering 02-763-7555 for 60 lines serves regular ordering from corporate and individual clients. Moreover, the Company also publishes monthly catalogs to be channel to introduce new product or promotion product each month. This is also a channel to keep relation with the client continuously. 3. Online 3.1 Website for Corporate client: www.officemate.co.th The

Company

developed

ordering

system

through

company

website

www.officemate.co.th which focuses on corporate clients (Business to Business: B2B) to order the office stationaries as the client can register and order all product as same as from the catalog. The website will be continuously developed in accordance with marketing plan and updated technology. 3.2 Website for individual clients: www.trendyday.com This

focuses

individual

clients

(Business

Customer:

B2C)

www.trendyday.com which not only the client can order the everyday living related product but also communicate and entertain via online society in various special forms to respond the modern clients.

3.3 e-Procurement e-Procurement is developed to connect the client ordering with the company ordering to match with requirement of only corporate client. The Company establishes the policy to penetrate the market via e-Procurement because this system will facilitate the client for ordering effectively and reduce the hidden cost for ordering outside the system in which the client can control and check the ordering. This is not only value added to the client but it is also the company differentiation comparing to other competitors.

Delivery The Company introduced free delivery nationwide for the minimum order of Baht 499. The territories to deliver can be divided into 2 areas as follows: 1.

Next working day: areas in Bangkok and nearby provinces i.e. Nonthaburi, Nakhon Pathom, Samut Sakhon, Samut Prakan, Chon Buri, Rayong, Chachoengsao, Pathum Thani and Ayutthaya. Transportation: The Companyâ&#x20AC;&#x2122;s troop of vehicles and reliable outsources

Within 3-5 working days: Countrysides Delivery: Thailand Post Co., Ltd. and other reliable shipping companies

Revenue Structure The Company had the main revenue from selling stationery and office equipment as the Catalog can generate the revenue from advertising to the Company as follows: 2008

2009

2011

2010

Revenue Million Baht Sales

Million Baht

925.74

95.90

871.16

95.30

1,045.23

95.84

1,219.38

95.75

Income from advertising

36.32

3.80

36.71

4.00

37.77

3.46

43.24

3.40

Other income

3.37

0.30

6.28

0.70

7.65

0.70

10.84

0.85

Total revenue

965.43

100

914.16

100

1,090.65

100

1,273.47

100

The goal of the business The Companyâ&#x20AC;&#x2DC;s main focus is the leading of selling stationery and office equipment in the form of doing business between the Company and Company (Business to Business: B2B) through catalog system, website on-line and purchasing order system for each organization (e-Procurement) by targeting the organizations who are growing and wellestablished customers. In the future, the Company has a plan to increase market segment in e-Procurement business in private and public organizations under the standard service of delivery within a next business.

In addition, the Company has targeted to become a leading on-line shopping mall by targeting the individual customers (Personal Use).

The Company has planned to

increase the variety of product to meet the modern lifestyles and focus on providing useful information for decision making. The ordering process is easy, safe and fast delivery service cover nationwide. To achieve these goals, the Company has a policy to develop and train personnel with knowledge, capability and expertise in providing service to customers. The Company focuses on quality and service standards and develops the modern information technology system to meet customersâ&#x20AC;&#x2122; needs effectively.

Industrial Competition Competition Situation Selling of stationaries and office equipment business is the high price sensitive market because there is no differentiate in product together with many players in the market. The players in the market can be divided into 4 groups as follow: (1)

Modern Trade i.e. Tesco Lotus, Big C, Carrefour which has stationary

section to serve the client especially for low price product with limited of product variety (2)

Category Killer that offers only stationary and office equipment

This group can be divided by distribution channel into 2 categories as follows: -

Selling through their own shop which concentrates on the walking client

in shop (cash and carry). This group has 2 players which are Office Depot and Office Center. Currently there are conglomerate to be one player once Office Depot (Thailand) acquired Office Center since May 2008. -

Selling without front shop i.e. call center and online via website i.e. Lyreco

(Thailand) Co., Ltd., OfficeMate Public Co., Ltd. and etc. (3)

Stationary and Office Equipment shops which has many places located in

any communities (4)

Selling specific product to the clients i.e. Double A, Metro Systems

Corporation Public Co., Ltd. and etc.

Marketing Strategy In order to compete with other competitors, the Company set up the marketing strategy as following; 1. To be One Stop Service for stationaries and office equipment which offers several of products through selling system equipped with sales representatives and selling support system that provides the information and recommendation to the client effectively in order to reduce procurement cost of the client. 2. To sell everyday living related product via online to respond the requirement of individual client including the introduction of Online Community to be meeting and talking channel 3. To standardize the product display through catalogs with quality and reliable product from the clients, vendors or even our competitors and to be channel for advertising and public relation for the product and organization both our company and our suppliers 4. To be One Price Policy which is checked and trusted from purchasing department of leading organization for more than 80,000 organizations over the country. Therefore the clients can be ensured that our offer price is standard and comparable price with the approved quality and checked by our purchasing department

5. Free Delivery throughout the country to the minimum order of Baht 499. This is the competitive advantage strategy comparing to our competitors, general shop, because the client spend less time for ordering. 6. To promote the product continuously which the client can reach through free monthly catalogs that offers to corporate client. On the other hand, the client can use the company website which offers many privileges to credit-term clients i.e. Officemate Member Rewards for every Baht 100 ordering can converted to accumulate point of 5 points that also can be redeemed the prizes from www.trendyday.com, etc. 7. After sale service and customer relation; the Company realizes the importance of customer satisfaction which is the key success factor of product selling through catalogs. The Company develops the customer support system i.e. OfficeMate Contact Center that served by our staffs for information and Q&A, OfficeMate Live Chart that services for ordering information, recommendation from chatting with our staff via the company website. Regarding the above mentioned services, the clients can access the information and service of the company from various channels within office working hours. Moreover, to gain confidence on our product and after sale service; the Company also guarantees the product and service satisfaction with the return policy within 7 days.

Risk Factors Risk factors in business operation of the Company can be summarized as follows:

Risk from economics condition fluctuation The fluctuation of economics condition may result in that the Company’s customers, which mainly are companies and shops, manage their budgets more carefully which causes the decrease of the volume of purchase orders for stationery and office appliances or the slowdown of the volume of purchase orders and consequently affecting a sale volume of the Company. To reduce such risk, the Company has planned to increase a variety of types of products to additionally respond to the demand from customers under our partners’ brands and house brands which are tools to increase the volume of purchase orders. In addition, the Company has planned to expand a variety of its organizational customer base as well as its customer base more to individuals. Since 2009, the Company has increased daily products such as beauty and health products, computer games, books, household appliances and toys to respond to personal-use customers’ needs.

Risk from industrial competition There are many competitors in the business of stationery and office appliances distribution, including distribution of the products related to daily life. In addition, since this business does not cost a high investment, it gives an opportunity to new investors to easily complete with us. Different characteristics of enterprisers such as retail shops, modern traders, direct sales and catalog sales, create the different forms of competitions. The Company focuses to maintain its leadership in the business of distribution of stationery and office appliances through catalog sales and e-Commerce system and to expand its business to meet individual customers’ needs all over by emphasizing on the importance of product quality with compatible prices, the modern management system so as to adjust and develop its sales through call center system and the placement of purchase orders through website, together with providing delivery and after sale service free-of-charge. The Company’s purpose is to make the services from the Company different, create an ability to compete with others, including maintain endurable market shares.

Risk from influence on decision making on policy and management of the Company After public offering, Ounjai family in 2009, a major shareholder and executive of the Company will hold shares in aggregate of approximately 71.49% of the paid-up capital, resulting in gaining of the control over a resolution of a shareholders’ meeting on any matters, except for the matters regulated by laws or Articles of Association of the Company to obtain three-fourths of the votes in a shareholders’ meeting. Therefore, other shareholders may not aggregate their votes for purpose of inspection and balancing power from major

shareholders, except for the matters under which Mr. Worawoot Ounjai has an interest in accordance with the definition of the Stock Exchange of Thailand. However, a group of major shareholders intend to operate business with clear, independence, transparency and endurance in accordance with Good Corporate Governance, which can be checked by the shareholders, as elaborated in management structure of the Company. The management structure comprises three committees namely, Board of Directors, Audit Committee and Executive Committee which comprises individuals equipped with knowledge and ability and there are clear scopes of responsibilities of such committees. In 2011, Ounjai family distributed their shareholding to other shareholders that gave the Company the business opportunities and the investment. It caused Ounjai family hold shares 64.12% of the paid-up capital.

Risk of relying on executives In the start of the business, the Company had relied on executives who played roles in determination of objectives, business strategies and business management in order to enhance the growth of the business with efficiency by systematic work procedures such as call center system, warehouse management system and modern information technology system in order to allow the Company to operate its business with a low risk of relying on such executives. However, the Company still relies on such executives to determine strategies and business directions, business plans and decisions related to future projects.

Risk Management The Company foresees the importance of a risk management of the organization as a whole. The Company has established a committee to proceed with a risk management and to act in inspecting and directly supervising on a risk management such as financial risks, operation risks and business risks. The committee of risk management shall report to the Audit Committee quarterly as it may deem appropriate and the Audit Committee shall carefully consider a risk management report and propose to the Board of Directors afterwards.

Sh areholders’ Structure ha Shareho older’s Structure S e As of 12 Ma arch 2012 Ou unjai Family 64.12%

Remark: * Ounjai family consists of 7 family members which hold total t 51,296,30 00 shares or 64.12% of pa aid-up 5 5%

30.88% Minor Shareholders

GMM Public Company Limited

capital 1. Mr. Worawoot Ounjai

hold

38,941 1,000

48.67%

2. Mrs. Malinee Ounjai

hold

4,000,000

5.00%

of paid-up capital of paid-up capital

3. Mrs. Pranee Ounjai

hold

2,356,700

2.946%

of paid-up capital

4. Ms. Jutima Ounjai

hold

2,000,000

2.50%

of paid-up capital

5. Ms. Jutiporn Ounjai

hold

1,998,600

2.498%

of paid-up capital

6. Ms. Ploy Ounjai

hold

1,000,000

1.25%

of paid-up capital

7. Mr. Poom Ounjai

hold

1,000,000

1.25%

of paid-up capital

List of the firrst 10 major m sha areholde ers as of 122 March 2012 th

No o.

Nam me-Surnam me

Mr. Worawoot

Ounjai

S Shares

Ratio (%) (

38,941,000

48.676 4

GMM Grammy Public Company Limited

4,000,000

5.000

Mrs. Ma alinee

Ounjai

4,000,000

5.000

4.**

Mrs. Pra anee

Ounjai

2,356,700

2.946

5.**

Mr.Cha aratpan

Panchasab

2,300,000

2.875

Ms.Jutiporn

Ounjai

2,000000

2.498

Ms. Jutima

Ounjai

1,998,600

2.498

8.**

Mr. Mon nchai

Leesirikul

1,900,000

2.375

9.**

Mr. Wee erawat

Chutichetpo ong

1,763,000

2.204

10.*

Mr. Tha awatchai

Tantipot

1,600,000

2.000

Remarrk: * Translatio on

cy of Div vidend Payment P Polic The Comp pany has se et a policy to o pay a divid dend payme ent of no les ss than 40 pe er cent of its net n profit after deduction of taxes and a legal res serves. How wever, the div vidend paym ment is subjec ct to change dependin ng on an op perational re esult, business expans sion plan, liq quidity, neces ssity and oth her appropriiate reasons s of the Com mpany in the future. The considera ation to make an annual dividend pa ayment shalll be approv ved by the shareholders s s’ meeting, except e considera ation to ma ake an inte erim dividen nd paymentt. In this ca ase, the Bo oard of for the Directors has an authority a to approve the interim div vidend paym ment, provid ded that the Board ectors shall report to the e next meeting of share eholders for information n. of Dire

Finance

Sales and d CRM

Info ormation System S

Company Secrretary

Organ niiz a t i o n C h a r t

e Business

Maanaging Directorr

Executive Committees

The Board of Directors

Logistics

Marketin ng

Risk Manageement Team

Internal Auditt Div.

Audit Comm mittee

HR & General Afffairs

The Board of Directors List of the Board of Directors (1-2) Education/Profile/Training Program/

Name-Surname

SAHAS TREETIPBUT - Age 60

last 5-year working experiences Education -

MS., Computer and Information Sciences, E9Syracuse University, USA.

BA (Statistics), Chulalongkorn Business School, Chulalongkorn University

- Share Held: None - Chairman of the Board -

Member of the Audit Committee

Training Program Advanced Management Program For Overseas Bankers, The Wharton School, University of

Pennsylvania

- Independent Director

Joint Government-Private sectors National Defense Program, Class 12, National Defense

College Director Accreditation Program, IOD

Work experience in the last 5 year 2551-present - Chairman of the Board and member of the Audit Committee, Officemate Public Company Limited 2551- present

- Chairman of the Board, Krung Thai Business Service Co., Ltd.

2544- present

- Dirctor/ Executive Director/ Nomination and Remuneration Director, Internet

2551- present

- Vice President-Product and Marketing, Krungthai Public Company Limited

2549- present

- Director, Trade Siam Co., Ltd

2547-2551

- Director, Krung Thai Axa Life Insurance Company Limited

2547- present

- President, Thai e-Commerce Association

Thailand Public Company Limited

Assoc. Prof. ANGKARAT PRIEBJRIVAT - Age 57

Share Held: None

Education - Ph.D, Accounting, New York University, USA. - Master of Accounting, Thammasart University - Bachelor of Accounting (Honour), Thammasart University

Chairman of the Audit Committee Training Program

Independent Director

Certificate of International Financial Reporting Standard

Certificate of The Institute of Chartered Accountants in England and Wales (ICAEW)

Role of Chairman Program

Monitoring the Internal Audit Function

Audit Committee Program

Director Certification Program

Director Accreditation Program

Monitoring the System of Internal Control and Risk Management

Monitoring Fraud Risk Management

The 4 Senior Executive Program, Capital Market Academy th

Work experience in the last 5 years Associate Professor, Business School, National Institute of Development Administration Advisor, Listing & Disclosure, The Stock Exchange of Thailand Independent Director and Chairman of the Audit Committee Tisco Financial Group Public Company Limited Independent Director, Association of Investment Management Companies Advisor to the Audit Committee, TOT Public Company Limited Advisor to the Audit Committee, State Railway of Thailand Government Accounting Standards Sub-Committee, The Comptroller General's Department, Ministry of Finance Member of the Audit Committee, Tisco Bank Public Company Limited Independent Director, Chairman of the Audit Committee and Member of Risk Management Committee, National Housing Authority Chairman of Accounting Standards Committee, Federation of Accounting Profession Specialist - Financial Institutions Policy Group, The Bank of Thailand Member of the Consultative Sub-committee on Cost Accounting Development Project Office of the Higher Education Commission Associate Dean of Administration Affair and Director of the Executive MBA Program

List of the Board of Directors (3-4) Education/Profile/Training Program/

Name-Surname

last 5-year working experiences Education

CHULEEPORN PIEMSOMBOON

- MBA (Marketing) Chulalongkorn University

- Age 60

- BA (Honor) in Marketing Chulalongkorn University

- Share Held: None - Independent Director

Training Program - Director Accreditation Program, IOD

- Member of the Audit Committee Work experience in the last 5 years 2551-present

Independent Director and member of the Audit Committee, Officemate Public Company Limited

Others -

Lecturer-Level 7- Marketing Dept., Business School, Kasetsart University

Head of Department of Marketing, Vice Dean for Research and Planning Affair

Head of MiniSME’s Thannews Project- Director of KU-BIC, Kasetsart University

Advisor to 13 projects and ITB, Advisor to the monitor and evaluation of the efficiency of projects’ productions to develop system base project, Ministry of Information and Communication Technology

WORAWOOT OUNJAI - Age 46

Education - MBA, National Institute of Development Administration - BA (Marketing), Kasetsart University

- Share Held: 48.68% - Authorized Director and Executive Director

Training Program (IOD) - Director Certification Program

- Executive Committee

- Director Accreditation Program

- Managing Director

- Financial Statements for Directors

Work experiences in the last 5 years 2551-present

- Director/Chairman of the Executive Committee, Officemate Public Company

2555-present

– Committee, Thai Listed Companies Association

2554-present

- Vice president-Academic, mai Listed Companies Association

Limited

2554-present - Committee, SME Development, The Thai Chamber of Commerce and Board of Trade of Thailand 2549-present - Honor committee, Thai e-Commerce Association

List of the Board of Directors (5-6) Education/Profile/Training Program/

Name-Surname

WICHIT KITSAWATPAISAN

last 5-year working experiences Education - Master of Accounting, Thammasart University

- Age 44

- Bachelor of Accounting, Thammasart University

- Share Held: 0.44% - Director

Training Program

- Authorized Director

- Director Accreditation Program

- CFO

Work experiences in the last 5 years 2551-present 2545-present

WILAWAN RERKRAINGKRAI - Age 42 - Share Held: 0.50%

- Director, Officemate Public Company Limited -

Executive Committee, Officemate Public Company Limited

Director of Finance, Officemate Public Company Limited

Education

- MBA, Kasetsart University - BBA, Assumption University of Thailand

- Director /the Company Secretary - The Secretary to the Board of Directors - Executive Committtee - Authorized Director

Training Program (IOD) -

Director Accreditation Program (DAP)

Company Secretary Program (CSP)

Effective Minute Taking Program (EMT)

- Director of Sales & CRM Work experience in the last 5 years 2553-present - The Company Secretary and the Secretary to the Board of Directors, Officemate Public Company Limited 2551-present - Director/Executive Committee, Officemate Public Company Limited 2544-present -

Director of Sales & CRM, Officemate Public Company Limited

List of the Board of Directors (7-8) Education/Profile/Training Program/

Name-Surname

NAPASORN KOCHASAN - Age 46

last 5-year working experiences Education - MBA, Chiangmai University - BA (Marketing), Kasetsart University

- Share Held: 0.41% - Director / Executive Committtee

Training Program (IOD) - Director Accreditation Program (DAP)

- Authorized Director - Director of Logistics Work experience in the last 5 year 2551-present - Director, Officemate Public Company Limited - Executive Committee, Officemate Public Company Limited

PATTAMA WANNAVITTAYAPA

2551-present -

Director of Logistics, Officemate Public Company Limited

2546-2551

Operations Manager, Officemate Public Company Limited

Education - MBA, Stamford International University (Thailand)

- Age 44

- Mini MBA, University of the Thai Chamber of Commerce

- Share Held: 0.53%

- Bachelor of Communication Arts, Bangkok University

- Director / Executive Committtee - Director of Marketing

Training Program (IOD) - Director Accreditation Program (DAP)

Work experience in the last 5 years 2551-present - Director, Officemate Public Company Limited - Executive Committee, Officemate Public Company Limited

2551-present -

Director of Marketing, Officemate Public Company Limited

2546-2551

Marketing Manager, Officemate Public Company Limited

The Companyâ&#x20AC;&#x2122;s Executive Committee

7 5

4 3

2 1

1. Mr. Worawoot Ounjai Managing Director

4. Miss Napasorn Kochasan Director - Logistics Division

2. Miss Wilawan Rerkriengkrai Director - Sales and Customer Relationship Management

5. Mrs. Pattama Wannavittayapa Director - Marketing Division

3. Mr. Wichit Kitsawatpaisan Director - Finance

6. Miss Saibua Rungsiyopas Director - Human Resources and General Management Division 7. Mr. Panu Kitsinthavee Director - Information Systems Division

Management Structure To be transparent and to communicate with the stakeholders about the definition of “Independent Director and “Management” , Officemate Public Company Limited has determined the definitions in compliance with the minimum requirements of the Securities and Exchange Commission (the SEC) and the Stock Exchange of Thailand as follows:

Definition: “Independent Director” The independent director is a director who is not involved in the management of the Company’s business, independent from the management and the shareholders who have a control power and has the following qualifications:

Qualification of Independent Director of the Company x

holding shares not exceeding 1 percent of the total number of shares with voting rights of the Company, its parent company, subsidiary company, affiliate company, major shareholder or controlling person, including shares held by related persons of such independent director;

neither being nor used to be an executive director, employee, staff, advisor who receives salary, or controlling person of the Company, its parent company, subsidiary company, affiliate company, same-level subsidiary company, major shareholder or controlling person, unless the foregoing status has ended not less than 2 years;

not being a person related by blood or legal registration with the person who might be in conflict;

not having a business relationship with the Company, its parent company, subsidiary company, affiliate company, major shareholder or the person who might be in conflict, in the manner which may interfere with his independent judgement;

neither being nor used to be an auditor or a provider of any professional services including those as legal advisor or financial advisor who receives service fees exceeding Baht 2 million per year from the Company, its controlling person, parent company, subsidiary company, affiliate company, major shareholder, unless the foregoing relationship has ended not less than 2 years;

not undertaking any business in the same nature and significantly in competition to the business of the Company or its subsidiary company or not being an executive director, employee, staff, advisor who receives salary or holds shares exceeding 1 per cent of the total number of shares with voting rights of other company which

undertakes business in the same nature and significantly in competition to the business of the Company or its subsidiary company; x

not having any other characteristics which cause the inability to express independent opinions with regard to the Companyâ&#x20AC;&#x2122;s business operations. The definition of Independent Director of Officemate Public Company Limited

above has an equivalent meaning and is in compliance with the minimum requirements of the Securities and Exchange Commission (the SEC) and the Stock Exchange of Thailand.

Definition: â&#x20AC;&#x153;Managementâ&#x20AC;? Officemate Public Company Limited has determined the definition of â&#x20AC;&#x153;Managementâ&#x20AC;? in accordance with WKH 1RWLILFDWLRQ RI WKH 6HFXULWLHV DQG ([FKDQJH &RPPLVVLRQ 1R *RU -RU 5H 7R GHWHUPLQH WKH GHILQLWLRQ RI 0DQDJHPHQW IRU WKH FRPSOLDQFH ZLWK 0RGXOH RI the Securities and Exchange Act B.E. 2535 ZKLFK DGGLWLRQDOO\ UHYLVHG E\ WKH the Securities and Exchange (issue No.4) Act B.E. 2551 â&#x20AC;&#x153;Managementâ&#x20AC;? of the Company or the minor Company of module No.3/1 of the Securities and Exchange (issue No.4) Act B.E. 2551 means â&#x20AC;&#x153;The chief or the executives who are the first four positions of the Companyâ&#x20AC;&#x2122;s top management after the chief, other the same positions and level of the first four position after the chief including the Chief of Accounting or Finance who is higher position than the maanger of the department or equal to that positionâ&#x20AC;?

Management Structure The Companyâ&#x20AC;&#x2122;s management structure consists of 3 Committees, namely, the Board of Directors, the Audit Committee, and the Executive Committee, and the Executive. Their responsibilities are determined clearly with the following details:

The Board of Directors (3-year term) The Board of Directors consists of 8 members who are 5 Executive Directors and 3

Non-Executive Independent Directors, accounting for more than one-thirds of the Board of Directors, and the chairman of the Board of Directors is Non-Executive Independent Director.

In 2011, the Board of Directors consisted of the members as follows: Name

Position

Mr. Sahas Treetipbut

Chairman of the Board and Independent Director

Mrs. Angkarat Priebjrivat

Independent Director

Ms. Chuleeporn Piemsomboon

Independent Director

Mr. Worawoot Ounjai

Director

Mr. Wichit Kitsawatpaisan

Director

Ms. Wilawan Rerkriengkrai

Director

Ms. Napasorn Kochasan

Director

Mrs. Pattama Wannavittayapa

Director

Secretary to the Board of Directors: Ms. Wilawan Rerkriengkrai

Authorized Directors with the Company's Seal Affixed Mr. Worawoot Ounjai signs with the Company’s seal affixed or Mr. Wichit Kitsawatpaisan, Ms. Wilawan Rerkriengkrai, Ms. Napasorn Kochasan, two-thirds of the aforementioned Directors jointly sign with the Company’s seal affixed.

Power and Duties of the Board of Directors 1. To comply with laws, objectives, regulations, and the resolution of the shareholders’ Annual General Meeting with honesty, responsibility, carefulness, protection of the Company’s interest on the basis of the Good Corporate Governance principles; 2. To revise and consider providing opinion on important details such as policy, business operation strategy, business plan, large project budget, administration power, and others as stipulated by law, including the supervision and management of the Executive in order to comply with the assigned policy with efficiency and effectiveness; 3. To establish reliable accounting system, financial report, and auditing, as well as to ensure the efficiency and effectiveness of the internal control system, the internal auditing, and the risk management; 4. To prepare the annual report of the Board of Director and to be responsible for the preparation and the disclosure of the financial statement to present the annual financial status and the operating results which to be proposed to the shareholders of the Company; 5. The Board of Directors may assign a Director or Directors or others to perform a task on behalf of the Board of Directors. However, the aforementioned authorization shall not include the authorization which facilitates the Director or the authorized person from the Director to approve the transaction with the conflicts of interest of the Director or the person, or any other interest with the Company or its subsidiaries, unless the approval of the transaction is the normal business transaction which follows the general trading agreement as stipulated by the Board of Directors on the authority and/or financial amount under the condition and procedure stated in the connected transaction, and the acquisition and

disposal of the important assets of the listed companies following the regulations of the Stock Exchange of Thailand or the notifications of the Securities and Exchange Commission. Thus, the scope and power of the Board of Directors shall conform to law and regulations of the Company and related organizations, namely, the Securities and Exchange Commission and the Stock Exchange of Thailand. Also, the Directors or persons with possible conflicts of interest, or interested persons in any form shall be abstained from voting right of that certain subject.

2. The Audit Committee (3-year term) The Audit Committee consists of 3 Independent Directors and the chairman of the Audit Committees is an Independent Director, namely, Name

Position

1. Mrs. Angkarat Priebjrivat

Chairman of the Audit Committee

2. Mr. Sahas Treetipbut

Member of the Audit Committee

3. Ms. Chuleeporn Piemsomboon

Member of the Audit Committee

Secretary to the Audit Committee: Ms. Valdee Sibunruang from IVL Auditing Co., Ltd, the Independent internal Auditor

Remark:

1. Mrs. Angkarat Priebjrivat, Mr. Sahas Treetipbut, and Ms. Chuleeporn

Piemsomboon are the Directors with knowledge and experience in the auditing of the Company’s financial statements. 2. Three Independent Directors of the Company have no business relationship or professional services to the Company.

Power and Duties of the Audit Committee 1. To verify the accuracy and sufficiency of the Company’s financial report; 2. To ensure the suitability and effectiveness of the Company’s internal control system and internal auditing system and to consider the independency of the internal auditing unit, as well as to provide an approval of consideration of appointment, transfer, disemployment of the head of the internal auditing unit or other units with the responsibility of the internal auditing; 3. To ensure the Company’s compliance with the Securities and Exchange law, the regulation of the Stock Exchange, and laws related with the Company’s business; 4. To consider, select, and appoint candidates with independency to be the Company’s Auditor and to propose the remuneration of the said person, as well as to attend the meeting with the Auditor without the presence of the management at least once a year; 5. To consider the connected transaction or possible conflicts of interest transaction to follow laws and the regulations of the Stock Exchange, to ensure the reasonability and the utmost benefit to the Company of the aforementioned transactions;

6. To prepare the Audit Committee report by disclosing in the Company’s Annual Report. The report shall be signed by the Chairman of the Audit Committee and shall consist of at least the following details: a) Opinion on accuracy, completeness, and creditability of the Company’s financial statement; b) Opinion on the sufficiency of the Company’s internal control system; c) Opinion on the compliance with the Securities and Exchange law of the Stock Exchange or the law related to the Company’s business; d) Opinion on the suitability of the Auditor; e) Opinion on the transaction with possible conflicts of interest; f)

Numbers of the meetings of the Audit Committee and the attendance of each member of the Audit Committee;

g) Opinion or remark which the Audit Committee receives from its performance following the Charter; h) Other items which the shareholders or general investors should be acknowledged under the scope and responsibility assigned by the Board of Directors. 7. Any operation assigned by the Board of Directors with an approval from the Audit Committee. To comply with the aforementioned duties, the Audit Committee shall be directly responsible to the Board of Directors, and the Board of Directors shall have the responsibility of the Company’s operation toward the third party.

3. Executive Committee (3-year term) The Executive Committee of the Company consists of 6 members, namely: Name

Position

1. Mr. Worawoot Ounjai

Chairman of the Executive Committee

2. Mr. Wichit Kitsawatpaisan

Executive Director

3. Ms. Wilawan Rerkriengkrai

Executive Director

4. Ms. Napasorn Kochasan

Executive Director

5. Mrs. Pattama Wannavittayapa

Executive Director

6. Mr. Panu Kitsinthavee

Executive Director

Secretary to Executive Committee: Ms. Narumon Wipajaroen

Power and Duties of the Executive Committee 1. To stipulate business policy, goal, operational plan, business strategy, and annual budget to propose to the Board of Directors for further consideration of approval; 2. To manage the Company in order to follow the business objectives, goal, operating plan, business strategy, and budget approved by the Board of Directors; 3. To stipulate the corporate structure and the internal administration authority for the utmost efficiency;

4. To consider approve the investment expenditure or transactions, applying for loans or credit from financial institutions of the Company’s normal transaction within the credit line of each transaction or connected transactions with the total amount of no more than Baht 50 million or equivalent, or as assigned by the Board of Directors; 5. To perform any assigned duties by the Board of Directors; The authorization to the aforementioned Executive Committee must perform under the laws and the Company’s regulations, of which excludes the authorization which facilitates the Executive Committee to approve a transaction that they or persons with possible conflicts of interest or interest against the Company or its subsidiaries. The connected transaction or acquisition or disposal of the important assets of the Company or its subsidiaries as stipulated by the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET) shall comply with the said principles and procedures.

4. Management The Company’s the Executives following the definition stipulated by the SEC consist of 7 members who are a Managing Director and 6 Directors, namely: Name

Position

1. Mr. Worawoot Ounjai

Managing Director

2. Mr. Wichit Kitsawatpaisan

Finance Director

3. Ms. Wilawan Rerkriengkrai

Sales Administration and Customer Relations Director

4. Ms. Napasorn Kochasan

Logistics Director

5. Mrs. Pattama Wannavittayapa

Marketing Director

6. Mr. Panu Kitsinthavee

Information System Director

7. Ms. Saibua Rungsiyopas

Human Resources and Genral Affairs Director

Power and Duties of the Managing Director 1. To stipulate the corporate structure and management procedures to cover details of selection, training, employment, and disemployment of the Company’s staff; 2. To have the authority to appoint and to demote the Company’s staff under the position of the Managing Director; 3. To prepare business plan and stipulate administration authority, including preparing business operation budget and annual expenses budget; 4. To operate business in compliance with the business plan and strategy to be in accordance with the policy and guidelines proposed to the Executive Committee and the Board of Directors; 5. To have the authority of approve and assign the authority of disbursement for procurement of assets, services, and transactions for the Company’s interest. The said authority of approval is the approval of normal trading transaction with the financial limit of no more than Baht 5 million or equivalent per each transaction. 6. To perform other duties as assigned by the Board of Directors.

The aforementioned powers shall be performed under the law, rules, and regulations of the Company. However, the assignment of the authorization shall not include the authority to facility the Managing Director to approve the transaction that the Managing Director or persons with possible conflicts of interest or interest against the Company or its subsidiaries unless the transaction is the normal business transaction and follows the general trading agreement as stipulated by the Board of Directors concerning the authority and/or financial limit under the principles, conditions, and procedures concerning the connected transaction or acquisition or disposal of the important assets of the Company or its subsidiaries as stipulated by the Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET).

5. Company Secretary In 2011, Ms. Wilawan Rerkraingkrai acts as the Company Secretary as the resolution of the Board of Directors No.3/2009 and participated in the training courses of the Thai Institue of Directors; Company Secretary Program (CSP) and Effective Minute Taking (EMT), and other training courses which are relevant to the duties such as Corporate Good Governance, SETPortal, etc.

Power and Duties of the Company Secretary Pursant to Section of 89/15 of the Securities and Exchange Act B.E. 2535, the Board of Directors must appoint the Company Secretary to lawfully perform the duty on behalf of the Company or the Board of Directors in the following duties: (1) Organizing and keeping important document of the Company (a) the Directors’ profile (b) an invitation of the Board of Directors’ meeting, the report of the Board of Directors’ meeting and the Company’s annual report (c) an invitation of the shareholders’ meeting (2) Keeping the report of the conflicts of interest reported by the Directors or Executives (3) Performing other operations as stipulated by the Capital Market Supervisory Board (CMSB) (4) Complying with the legal acts and regulartions and support the Board of Directors’ activities Remark: In case of vacating office on expiration of term of office or unavailable for acting the duties, the Board of Directors must appoint the new Company Secretary by 90 days since the former Company Secretary vacated office or unavialvle for acting the duties, and the Board of Directors shall temporarily appoint director to act the roles of the Company Secretary in that period.

Nomination of the Directors and Executives At present, the Company has not appointed the Nomination Committee to select candidates to be in the position of the Directors. However, when the positions of the Company’s Directors or Independent Directors are vacant, the Board of Directors is entitled to select the candidates to propose to the shareholders with the consideration of various factors, namely, knowledge, ability, experience concerning the business, and having qualification and not any prohibited characteristics as specified by the Public Limited Company Act, B.E. 2535 and the notification of the Securities and Exchange Commission (SEC) and other related laws concerning selection and appointment the Company’s Directors which shall be performed with the majority votes at the shareholders’ meeting following the principles and procedures as follows: (1) One share equals one vote. (2)

Each shareholder shall cast the full amount of shares under (1) to vote for either an individual or several persons as deemed appropriate at the meeting of shareholders. The shareholder shall not allot his or her votes to any person in any number.

(3)

After the vote, the candidates shall be ranked in order descending from the highest number of votes received to the lowest, and shall be appointed as directors in that order in the amount required in the election. Where there is an equality of votes cast for candidates in descending order causing the number of directors to be exceeded, the remaining appointments shall be made by drawing lots in a manner determined by the chairman The Directors of the Company shall hold a position for 3 years. In addition, at the

Annual General Meeting, at least one-thirds of the Directors shall leave the position. If the amount of the Directors cannot be divided into three, the closest amount of the Directors to the one-thirds shall leave the position in the first year. In the second year of the Company’s listing in the Stock Exchange, the drawing lot shall be performed for the Directors’ leaving the term of service. In the following years, the Directors who are in the position with the longest period shall leave the position. Nonetheless, the Director who periodically leaves the position can be re-elected to the position.

Development of Directors and Executives The Company continuously encourages the Board of Directors and the Executives of the Company to attend courses which are benefit to the operation and self-improvement and improvement of the Company such as training courses of the Thai Institute of Directors and the Stock Exchange of Thailand, etc.

Orientation for New Directors Upon changing Directors, the Company holds an orientation for new Directors to receive the information which is beneficial to the Directors’ performance in the following details: 1.

Preparing the Directors’ manual concerning good practices of the listed companies’ Directors

Preparing other information concerning the Company’s business operation to the new Directors of the Company

Providing the beneficial courses to the Directors for self-development and the Company’s development

Introducing New Directors to the Company’s top management by holding the extra meeting

Remuneration of Directors and Managements 1. Remuneration in Cash 1.) Directors The resolution of the Annual General Meeting of Shareholders No. 1/2011 on April 19, 2011, had approved the remuneration of the Board in the forms of meeting allowance, reward, bonus, or other remunerations for 2010 at the total of Baht 1.0 million per year with the stipulation of the meeting allowance provided to the Non-Executive Directors as follows: Chairman of the Board of Directors

Baht

22,000 per meeting

Directors

Baht

16,000 per meeting

Chairman of the Audit Committee

Baht

22,000 per meeting

Members of the Audit Committee

Baht

16,000 per meeting

In 2011, the Company’s remuneration to the Directors is as follows: Meeting Name

Position

Allowance (Baht)

Bonus

No. of Meeting

(Baht)

Attendance

2011

Mr. Sahas Treetipbut

Chairman of the Board

88,000

22,000

No. of Meetings 4/4

Mrs. Angkarat Priebjrivat

Independent Director

64,000

16,000

4/4

Ms. Chuleeporn Piemsomboon

Independent Director

64,000

16,000

4/4

Mr. Worawoot Ounjai

Director

4/4

Mr. Wichit Kitsawatpaisan

Director

4/4

Ms. Wilawan Rerkriengkrai

Director

4/4

Ms. Napasorn Kochasan

Director

4/4

Mrs. Pattama Wannavittayapa

Director

3/4

Remark: Mrs. Pattama Wannavittayapa is the Director who was elected on April 19, 2011; as a result the attendance of the Board of Directors’ meeting was 3 from 4.

In 2011, the Company’s remuneration to the Audit Committee in 2011 is as follows: Meeting Allowance Name

Position

(Baht)

Bonus

No. of Meeting

(Baht)

Attendance

2011

No. of Meetings

1. Mrs. Angkarat Priebjrivat

Chairman of the Audit Committee

88,000

22,000

4/4

2. Mr. Sahas Treetipbut

Member of the Audit Committee

64,000

16,000

4/4

3. Ms. Chuleeporn Piemsomboon

Member of the Audit Committee

64,000

16,000

4/4

2.) Managements In 2011, the Companyâ&#x20AC;&#x2122;s remuneration paid to the management is as follows: 2011 Remuneration

No. of

2010 Million (Baht)

Management

No. of

Million (Baht)

Management

Monthly salary

10.90

Bonus

1.47

1.63

12.37

12.14

Total

10.51

2. Other Remunerations

Contribution to the Providend Fund 2011 to the management 2011 Remuneration Contribution to the Providend Fund

2010

No. of

Million

No. of

Management

(Baht)

Management

526,845.00

Million (Baht) 501,720.00

Contribution to the Social Security Fund 2011 to the management 2011 Remuneration Contribution to the Social Security Fund

2010

No. of

Million

No. of

Management

(Baht)

Management

63,000.00

Million (Baht) 63,000.00

Shareholding of the Board of Directors and Managements The First 4 Directors and Executives after Managing Directors including their spouse and minor child have a role to report the change of their shareholdings (Form 59-2) to the Securities and Exchange Commission within 3 days after the change of the shareholdings.

In 2011, the change of shareholding of the Board of Directors and

management are as follows: x

No.1-3:

Independent Director

No.4-8:

Executive Director, Executive Committee and the management

No.9-10: Executive Committee and the management

Shareholding of the Board of Directors and Managements Officemate Public Company Limited No.

List of

Ordinary Shares %

As of 23

2011

Febrauary 2011

Mr. Sahas Treetipbut

0.00%

Mrs. Angkarat Priebjrivat

0.00%

Ms. Chuleeporn Piemsomboon

0.00%

Mr. Worawoot Ounjai

-5,000,000

38,941,000

48.68%

6,000,000

44,941,000

56.18%

-70,000

331,000

0.41%

421,000

0.53%

Ms. Napasorn Kochasan

Mrs. Pattama Wannavittayapa

Mr. Wichit Kitsawatpaisan

-70,000

351,000

0.44%

Ms. Wilawan Rerkriengkrai

-21,000

400,000

0.50%

Mr. Panu Kitsinthavee

91,000

0.11%

10.

Ms. Saibua Rungsiyopas

0.00%

Remark: /1 refers to including spouse and minor child

Internal Audit The Board meeting No. 1/2012 was joined by the Audit Committee to give comments about the adequacy and suitability of the internal control system with reference to the “Internal Control System Adequacy Assessment Form” of the Office of Securities and Exchange Commission. The Audit Committee considered and reviewed the audit report and gave suggestions about the internal control, focusing on making the operating audit continuously effective and efficient and continuously report to the Company’s directors. Regarding assets, the Company has such a good protection system that no fraud or misuse of assets was found in the Company. The result from the review is in accordance with the specified guideline, regulation by the government sector and corporate governance. From the consultation with the auditor, it is advisable that the Company has prepared the financial statements in accordance with the accounting standards, and had the sufficient internal control on organization, environment, risk management, and operation control, information system and communication. The follow-up results led to believe that there were no significant mistakes as summarized into 5 aspects below: 1) Organizational Control and Enviornment Measure x

The Company had the corporate structure which stipulated the scope of duties and responsible persons, including the remuneration following the business operation objectives by preparing the operating plan and budgeting plan to help control the operation.

Preparing the manual of “Code of Conduct and Business Ethics” is established and official practiced in the Company for strict acknowledgement and practice of all Directors, Executives, and staff. The manual places an importance upon the right of all stakeholders such as shareholders, trading partners, competitors, creditors, customers, and communities.

Preparing the manual of “power of operation” in written form with stipulation of responsibility and roles distinction, operation power of the performers and Executives on matters, assets supervision, approval of transactions, documentation of accounting and financial information, roles distinction of performers, controller, and separation of the evaluation in order to create checking and balancing, and mutual examination with appropriateness.

The Company had run the business with the good governance upon the rights of trading partners and all stakeholders under the Customer Protection Law.

2) Risk Management Measure x

The Company had established the risk management team with a clear responsibility to prepare and monitor risk management plan which would be proposed to the Executive Committee for consideration before further proposing to the Board of Directors.

The Risk management Team reported the plan of risk management to the management meeting and together analised the problems and solutions every week before the submission to the Exeuctive Committee meeting.

Report and follow-up risk management plans were discussed in the Executive Committee meeting monthly and the Audit Committee meeting quarterly.

The Company had consistently considered the assessment of the internal and external risk factors as well as stipulated the guidelines for practices among the management and supervisors to the staff.

3) The Management Control Activities x

The Company had clearly stipulated the scope, duties, and approved financial limit of the Management by preparing the written manual of the power of operation.

Clearly stipulated the duties and responsibilities with the following details: (1) Approval (2) Accounting and information entering (3) Asset control

In the case that the Company has entered into a connected transaction with a person who may have conflict of interests, the Audit Committee shall consider rationality in entering into such transaction pursuant to the notifications of the Stock Exchange of Thailand and/or the Office of the Securities and Exchange Commission and/or accounting standards issued by Federation of Accounting Professions. Thereafter, the Audit Committee shall propose the consideration to the Board of Directorsâ&#x20AC;&#x2122; meeting and/or shareholdersâ&#x20AC;&#x2122; meeting for approval as they may deem appropriate. Interested person(s) shall not participate in the consideration of rationality and approval of the transaction. However, in 2011, there is no related transaction.

In case of the long-term agreement of related transaction was done, the Company shall monitor the transaction along the active transition such as coolection in due date, the appropriateness of agreement, etc.

In 2011, the Company has no associated company or the subsidiaries, so there is no any investment.

The company assigned the top management of the division has full authorities to comply with the related law and also it hired the independent internal auditor to investigate the Companyâ&#x20AC;&#x2122;s operations. Besides, the Company had hired the legal consultant to investigate the agreement to comply with the law including giving the advices.

4) Information System and Communication Measure x

The meeting shall be quarterly organized with special meeting as necessary. The agendas are clearly specified in advance. Secretary of the Board of Directors shall send the invitation letters indicating date, time, venue, meeting agendas, and meeting document with information which is sufficient for the decision making and independent consideration of the Board of Directors in advance at least 7 days.

Secretary of the Board of Directors shall record important information at the meeting and prepare meeting report which contains complete information.

The report will be submitted to Chairman of the Board for signature and will be kept as confidential, easy to search, and can be a reference for inspection.

The Company keeps the accounting document in categories and it has never been reported to be penalty.

The Company keeps the companyâ&#x20AC;&#x2122;s document organizingly which the Directors, the auditor, the internal audit and the legal authorizer are able to access them easily.

The Board of Directors considered that the management perform and prepare the finiancial statements in accordance with generally accepted auditing standards.

5) The Monitoring System x

The Management of the Company constantly had meetings to evaluate the operating results, revising the goal and policy to be in accordance with the present situation with the consideration of causes and improvement guidelines every week.

The Executive Committees hold the meeting monthky to evaluate the, consider and approve the Companyâ&#x20AC;&#x2122;s operation which will be reported to the Audit Committee and the Board of Directors quarterly.

As soon as the results of the operations were differed from the goal. The Management of the Company immediately investigates and evaluates the problems to seek the solution. The follow-up task will be reported in the next meeting.

The internal auditing performed by the independent auditor who will report directly to the Audit Committee and the Board of Directors at least a meeting per quarter.

In case of emergency, the internal audit will alert the Management to seek the solutions and follow-up process shall be started.

There is the policy to the Management to report the matter concerning any illegality or immorality, the financial report, and the internal control system immediately by verbal and follow-up report in written.

Supervision of the Internal Information Usage To create transparency and to protect any seeking for the self-interest from the Company’s internal information usage which has not been disclosed to the public, as well as to avoid any scandal against the suitability of the share trading of the Company’s insiders, the Company has established the discipline of practice for Directors, Executives, and the staff of the Company to follow: x

Company’s Confidential Information Protection (1) Directors, Executives, and staff of the Company shall remain the secrecy

and/or the internal information of the Company as well as to abstain from the disclosure of the information or seeking for thee self-interest from the information, or for others’ interest in either direct or indirect way. In addition, they shall abstain from the trading or transferring the Company’s securities by using the secrecy and/or internal information of the Company, and/or enter any transaction by using the secrecy and/or internal information of the Company which may lead to the damage of the Company in either director or direct way; (2) Directors, Executives, and staff of the units are not allowed to disclose the Company’s secret or information within 2 years after their resignation. (3) The management and the staff must understand the process, methods to protect the information in order to avoid the accidentally disclosure. x

Disclosure of News and information (1) Managing Director is responsible for the disclosure of information (2) The unit related to the information such as finance department, the

investor relations who are assigned by the managing director are responsible for providing information (3) Giving any information to other joint investors must be approved by the joint investors. x

Disclosure of information and Contact Person To comply with the regulations of the Stock Exchange of Thailand and /or related

disclosure laws, the Company assigns the following persons to coordinate with the Stock Exchange of Thailand as the Contact Person: -

Accounting’s period: Managing Director, the Company’s Secretary, and Chief Financial Officer act as the contact persons who are responsible for the disclosure of the information to the Stock Exchange of Thailand and submitting the document disclosed within the accounting period, namely, the quarterly and annual financial statement, the annual registration statement (Form 56-1) and the Annual Report (form 56-2), etc.

Event and other periods: Managing Director, the Company’s Secretary, and Chief

Financial Officer act as the contact persons who are responsible for the disclosure of the information to the Stock Exchange of Thailand and submitting the document disclosed within the event and other periods/cases such as the acquisition/ disposal of assets, connected transaction, schedule of the shareholders’ meeting, the change of Directors and the Auditors, changing the location of the headquarter, report of the shareholders’ meeting, and investment projects. Related organizations the capital market: The Company Secretary is the contact

person: -

The Securities and Exchange Commission

The Stock Exchange of Thailand

The Thailand Securities Depository Co., Ltd.

The Ministry of Commerce.

x The Directors, Executives, or Departments who receive the inside information shall neither disclose the information to the outsider or other persons whose roles are not related, nor trade the Company’s securities within the period of 1 month prior to the published of the Company’s financial statement. The CompanySecretary will inform the schedule the period in each quarter. x

The Company provides the security of information system to protect the database

and confidential data including limit the information accessibility. The person who disobeys the regulations will be penalty.

Related Transactions Related transaction throughout the past In 2011, there is no related transaction or conflict of interest of the related person.

Connected transaction approval procedure In the case that the Company has entered into a connected transaction with a person who may have conflict of interests, the Audit Committee shall consider rationality in entering into such transaction pursuant to the notifications of the Stock Exchange of Thailand and/or the Office of the Securities and Exchange Commission and/or accounting standards issued by Federation of Accounting Professions. Thereafter, the Audit Committee shall propose the consideration to the Board of Directorsâ&#x20AC;&#x2122; meeting and/or shareholdersâ&#x20AC;&#x2122; meeting for approval as they may deem appropriate. Interested person(s) shall not participate in the consideration of rationality and approval of the transaction.

Policy on connected transaction in the future The Company has no policy to enter into a connected transaction in the future. However, if there is such transaction, the Company shall proceed it with a transparent manner per the policy and procedure of Good Corporate Governance, including continuously consider inter-transactions in order to ensure that the Company has complied with the regulations in relation to the entering into connected transactions of the Stock Exchange of Thailand and /or the Office of the Securities and Exchange Commission and/or Federation of Accounting Professions.

Report of the Board of Directors’ Responsibility in the Financial Statements The Board of Directors of Officemate Public Company Limited is responsible for the Company’s financial statements, presented in the 2011 annual report. The Board of Directors has appointed the Audit Committee, comprising independent directors, to oversee qualitative aspects of financial reporting and internal control system. The opinion of the Audit Committee with regard to these matters appears in the Report of the Audit Committee presented in the 2011 Annual report. The financial statement as of 31 December 2011 has been prepared in accordance with generally accepted accounting standards applicable in Thailand, which are based on appropriate accounting policies, consistently applied and practiced, prudent judgment and best accounting estimates. All material information has been sufficiently disclosed in the notes to financial statements. These financial statements also have been made in compliance with the stipulations of the Notification of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand. The financial statements have been audited and expressed with unqualified audit opinion by an independent auditor, which reflected fair and transparent financial position and operating performance that is useful for shareholders and investors. Besides, the Board of Directors has established effective risk management and internal control systems to ensure that the reliability and completeness of financial information are in place and transparency. The Board of Directors views that the Company’s internal control systems are satisfactory and provide reasonable assurance as to the reliability of the Company’s financial statements as of December 31, 2011.

(Mr. Sahas Treetipbut)

(Mr. Worawoot Ounjai)

Chairman of the Company

Managing Director

Report of the Audit Committee To

Shareholders of OfficeMate Public Company Limited The Audit Committee of Officemate Public Company Limited comprises three

independent directors whose qualities are accurately in accordance with the regulations of the Office of the Securities and Exchange Commission. At present, members of the Audit Committee of the Company comprise of Associate Professor Dr. Angkarat Priebjrivat, as a chairman, Mr. Sahas Treetipbut and Ms. Chuleeporn Piemsomboon, as directors and Ms. Valdee Sibunrueang, as a secretary. In 2011, the Audit Committee fulfilled its duties and responsibilities in accordance with the Audit Committee Charter approved by the Board of Directors. Four Audit Committeeâ&#x20AC;&#x2122;s meetings had been conducted with a participation of executives, auditor and internal auditor as appropriate, which can be summarized as follows: 1.

Reviewed quarterly and annual financial statements of 2011 to propose to the

Board of Directors to consider and approve by questioning and listening to the management and the auditorâ&#x20AC;&#x2122;s clarifications concerning the accuracy and completeness of the financial statements and the adequacy of information disclosure. The Audit Committee agreed with the auditor that the financial statements were fairly correct in significant matters in line with the generally accepted accounting principles. 2.

Reviewed internal control system to assess the sufficiency, appropriateness and

effectiveness of the internal control system, by considering the internal audit report of each quarter in accordance with approved frameworks. According to the report, no significant deficiency was identified. The Audit Committee opined that the Company has a satisfied internal control system with an adequate, appropriate and effective monitoring and controlling systems. The Company can control risks to an acceptable level. 3.

Reviewed the internal audit to assess the adequacy of internal control system by

recruiting outside companies to conduct as an internal audit and to report the result of the audit to the Audit Committee quarterly by considering the scope of work, duties and independency, including reports. The Audit Committee opined that the Company's internal control was adequate and appropriate and included continuous following up of the results. 4.

Reviewed the Companyâ&#x20AC;&#x2122;s compliance with laws to ensure that the Company

has complied with the rules and regulations of the Stock Exchange of Thailand and other laws related to the business of the Company, including the obligations to external parties by considering reports from the management and internal audit. The Audit Committee opined that the Company has completely complied with laws, regulations and its obligations to the external parties. 5.

Reviewed risk management system to manage risk to be in acceptable level by

considering risk management policy and development of risk management. The Company

is under the process of developing risk management system to be more efficient and effective. The Audit Committee acknowledged the progress of the risk management of the Company. 6.

Reviewed

connected

transactions

and

information

disclosure

such

transactions to ensure the transparency and the information disclosure of connected transactions by considering auditor’s reports and information disclosed in financial statements and notes to financial statements. The Audit Committee found no connected transaction in 2011. 7.

Considered appointing the auditor and the remuneration for the year 2011 to

propose to the Board of Directors for further approval by the Annual General Shareholders’ Meeting for the year 2011. The Audit Committee considered the performance, independency and appropriateness of remuneration and agreed to propose the appointment of Mr. Wichai Ruchitanon, Certified Public Accountant Registration No. 4054, or Mr. Athiphong Athiphongsakul, Certified Public Accountant Registration No. 3500, or Mr. Sathian Wongsanan, Certified Public Accountant Registration No. 3495 of ANS Audit Company Limited as the Company’s auditor for the year 2010 with a remuneration of 500,000 Baht. In summary, the Audit Committee had fulfilled the responsibilities set out in the Audit Committee Charter and in pursuant to the Good Corporate Governance principles.

23 February 2012 On behalf of the Audit Committee

(Associate Professor Dr. Angkarat Priebjrivat) Chairman of Audit Committee

0DQDJHPHQW V 'LVFXVVLRQ DQG $QDO\VLV Revenue The revenue of Officemate Publuc Company Limited (“The Company”) has continually increased during 2010 – 2011 by the expansion of customer base following the marketing strategies and promotions.

In the 4 quarter of 2011, the Company’s 2011 th

operating results were affected the long extra holidays from the flood crisis and some areas in Thailand were heavily flood wihci caused the unavailable Company’s suppliers’ operation. Thus, because of the economic growth in the first 3 quarters in 2011 from increasing demand of equipment and stationery of the corporate customers; as the result, the revenue was 1,090.65 million Baht and 1,273.47 million Baht, increased by 182.82 million (17% YoY). Revenue from selling products is core revenue of the Company, accounted for 95.75% of total revenue. In 2010 – 2011, revenues from selling of products was 1,045.23 million baht and 1,219.38 million baht, Increased by 174.15 million baht (16.66% YoY) following the proactive market strategy. In effect the customer has recognized and trusted to purchase product through catalog system together with the Company’s adherence to provide decent services and to maintain good relationship with customer. The Company’s revenue from selling product characterizes as seasonal because the revenues depend on customer’s purchasing behavior which the corporate clients are key customers and number of company’s working days as imposed by the Bank of Thailand. The sales revenue is directly affected by a month having many holidays such as April and December. Moreover the sales revenue of the Company is affected by customer’s expenditure policy, depending on stimulus or reduction of expenses in particular periods of the year. In consideration of revenue from selling products in each quarter, the sales revenue is usually high in the first and third quarter which have many of working days compared with sales revenue in the second and forth quarters begin lower. In consideration of revenue structure, the sales revenue mainly came from sales of computer supplies, paper products, filing products and storage products, canteen and cleaning accounted for 57% of total sales revenue due to value of such products were relatively high compared with other equipments and such products are frequently ordered by corporate clients.

Cost of Sales The Company’s cost of sales increased along with the expansion of sales revenue. In 2010 – 2011 cost of sales was 803.48 million baht and 927.76 million baht, respectively increased by 124.29 million baht (15.47%YoY) which was at the same rate as an increase in sales revenue. The cost to income ratio remained at approximately 76.50% of sales revenue.

Selling and Administration Expenses In 2010 – 2011 the Company’s selling and administration expenses were 215.13 million baht and 254.80 million baht, increased by 39.67 million baht (18.44%YoY). The cost was higher from the preparation to prevent flood crisis to the Company’s offices and warehouse, the expansion of call center, and the rental of back office in the 4 of Year 2011. th

Profit In 2011 the Company’s net profit totaled 45.97 million baht, increased by 11.13 million baht (31.94%YoY), which was 34.84 million Baht in 2010. The Company was considered to get the privilege of tax reduction to 25% for the new listing companies on the Market for Alternative Investment (MAI) The Stock Exchange of Thailand, as a result the Company paid 25% of tax rate 2011 for the net profit under 50 million Baht.

Liquidity Company’s customers are mainly corporate clients who have strong financial position. The Company can quickly collect the receivables from such clients within the due date. The average collection period was 28 – 30 days, being close to an average inventory processing period which was 38 – 42 days due to the Company’s system to control quantity of inventory at appropriate level. The system will place new order when the inventory decreases below the threshold level. As the result, the inventory will not tie up in the warehouse. Meanwhile, the Company has bargaining power to negotiate with suppliers. The Company’s average payable period was 70 – 81 days resulting in positive working capital (reflecting in negative cash cycle ratio).

Financial Position Assets At of end of 2010 and 2011, the Company’s total assets was 442.66 million baht and 492.85 million baht, increase by 50.19 million baht (11.34% YoY)

The operation assets, which are trade accounts receivable and inventory, have continually increased along with the business expansion. The net account receivable was 107.17 million baht, increased by 14.53 million baht (15.69% YoY) from 92.64 million baht in 2010. Meanwhile, the net inventory was 131.89 million baht, increased by 48.09 million baht (57.39% YoY) from 83.80 million baht in 2010. According to the business characteristic in which the Company can manage liquidity by invoicing to the customers with cash payment, offering discount rate to motivate the payment, as well as convenient payment channels while the Company debt payment was longer. However, because of the settlement to loan, the Company’s cash and short-term investment totaled 76.19 million baht, decreased by 24.22 million baht when compared with 100.42 million baht 2011.

Trade Accounts Receivable Account Receivable Aging

2009

2010

2011

Not yet due

66.10

79.06

92.15

Past due 1 – 30 days

8.35

12.33

11.54

Past due 31 – 60 days

0.41

1.03

2.64

Past due 61 – 90 days

0.04

0.20

0.78

Past due 91 – 120 days

0.03

0.06

Past due over 120 days

0.02

0.10

0.01

74.96

92.74

107.18

Total accounts receivable

The Company’s trade accounts receivable increased in line with sales revenue. The trade accounts receivable were mainly companies, organizations, retailers, or government units who have strong financial position and ability to pay within due date. Furthermore, the trade accounts receivable, whose payment period had not due, accounted for 84.75 – 88.20% of total account receivables. However the Company has policy to set up provision for doubtful accounts for overdue payment. The Company will record as doubtful account by 50% for overdue payment between 91 – 120 days and record as the doubtful account by 100% for overdue payment over 120 days. In 2011, the Company’s net account receivables was 107.18 million baht comprising of account receivables whose payment period had not due totaled 92.15 million baht, accounted for

85.98% of the net account receivables and account receivable whose

payment overdue totaled 15.03 million baht, accounted for 14.02% of total account receivables which overdue not more than 30 days. The Company had the doubtful account provision at 7,725.67 baht, accounted for 0.01% of total account receivables.

Inventory In 2011, the Company’s net inventory was 131.89 million baht, increased by 48.09 million baht from 83.80 million baht at the end of 2010 (57.39% YoY) in line with the continual growth in sales. The average inventory turnover was approximately 28 – 30 days. This is related to the continuous purchase orders from customers and to support the higher sales order forcast in the early 2012 after flood crisis. The Company was able to manage the inventory to be appropriate to the threshold level by analysis of historical data of customer’s purchasing behaviors. In addition, the amount of inventory during the end of the year was highly amount compared with other periods of the year due to the Company purchased goods during the end of the year to support the purchasing orders from the customer during the beginning of the next year. The purchase orders from next year catalog will be relatively high according to customer’s purchasing behavior.

Other current assets In 2010 – 2011, the Company’s other current assets was 8.44 million Baht and 12.05 million Baht, respectively. The other current assets consisted of accrued revenue, prepaid expenses, cash pledge and other. In 2011, other current assets increased due to the Company recorded revenue from promotion which will gradually receive in the next year.

Property, plant and equipment In 2011, the Company additionally purchased property, plant and equipment in amount of 26.64 million Baht due to the Company changed and increased a part of office equipments (Computers) and Call Center system and expansion office which was already outdated as well as vehicles for supporting business growth. At the end of 2010 and 2011, the property, plant and equipment-net were 143.52 million Baht and 144.02 million Baht.

Liabilities In the recent year, the Company had source of funds from liabilities for supporting business operation. Total liabilities of the Company was 221.33 million baht at the end of 2010 and 249.26 million baht at end of 2011, increased by 27.93 million baht due to the Company repaid full amount of long-term loans before their maturity date together with redeeming some of land with structure. The changes in liabilities of the Company are detailed as follows;

Trade and other accounts payable Trade accounts payable is accounted approximately 78.25 – 79.11 of total liabilities. At the end of 2010 and 2011, trade accounts payable was 175.10 million baht and 195.04 million baht, respectively, increasing in line with sales growth. Nevertheless, the Company received purchase for the products under next year catalog during the end of the year, resulting in higher trade accounts payable in such period. Other payable as consisted of payable for purchase fixed assets, Publish accounts payable and accrued expenses.

Commitment and Contingencies As of December 31, 2011 the Company had commitment and contingencies due to the Company entered into and agreement to purchase call center system with a company totaling 6.22 milling baht with annual after-sales service fee of 0.86 million baht. The Company entered into operating lease agreements for land, office space, equipments and services for periods since 1 to 5 years totaling 51.21 million baht. The Company has a commitment with financial institution for the letters of guarantee issued totaling 3.97 million baht.

Shareholder’s Equity With the continuous profitable operating result, the shareholders’ equity of the Company in year 2010 – 2011 was 221.33 million baht and 243.59 million baht.

Auditorâ&#x20AC;&#x2122;s Report To the Shareholders and the Board of Directors of OfficeMate Public Company Limited: I have audited the statements of financial positions as at December 31, 2011 and 2010, and the related statements of comprehensive income, statements of changes in shareholdersâ&#x20AC;&#x2122; equity, andstatements of cash flows for each of the years then ended of OfficeMate Public Company Limited. TheCompanyâ&#x20AC;&#x2122;s management is responsible for the correctness and completeness of information presented inthese financial statements. My responsibility is to express an opinion on these financial statements basedon my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. I believe that my audit provide a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of OfficeMate Public Company Limited as at December 31, 2011 and 2010, the results of its operations and its cash flows for each of the years then ended, in conformity with generally accepted accounting principles. Without qualifying my opinion, I draw attention to Note 2 to the financial statements, during the year ended December 31, 2011, the Company has adopted new and revised Thai Financial Reporting Standards, which are issued by the Federation of Accounting Professions and effective for the financial statements for the period beginning on or after January 1, 2011, for the preparation and presentation of these financial statements. The financial statements for the year ended December 31, 2010 which have been presented herewith for comparative purposes are newly presented in conformity with the financial statements for the year ended December 31, 2011. The Company has adjusted obligations incurred from the employee benefits according to the application of TAS 19 by reflecting to the retained earnings as at January 1, 2011.

(Vichai Ruchitanont) Certified Public Accountant Registration Number 4054 ANS Audit Company Limited Bangkok, February 23, 2012

FINANCIAL STATEMENTS AND NOTES OFFICEMATE PUBLIC COMPANY LIMITED FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010

OfficeMate Public Company Limited Statements of Financial Position As at December 31, 2011 and 2010 Unit: Baht Assets Current Assets Cash and cash equivalents Temporary investment Trade and other receivables - net Inventories - net Total Current Assets Non-Current Assets Pledged deposits at financial institutions Property, plant and equipment - net Intangible assets - net Other non-current assets Total Non-Current Assets Total Assets

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

Notes

2011

2010

6 7 8 9

7,808,837.92 68,383,574.97 119,220,894.41 131,892,146.06 327,305,453.36

16,568,623.95 83,847,246.60 101,075,626.46 83,797,447.20 285,288,944.21

22.2 10 11

5,283,180.86 144,019,611.41 9,861,324.43 6,383,356.88 165,547,473.58 492,852,926.94

4,419,158.18 143,520,248.99 6,976,416.74 2,454,539.63 157,370,363.54 442,659,307.75

OfficeMate Public Company Limited Statements of Financial Position As at December 31, 2011 and 2010 Unit: Baht Liabilities and Shareholders' equity Current Liabilities Trade and other payables Current portion of liability under financial lease agreements Accrued income tax Total Current Liabilities Non-Current Liabilities Liability under financial lease agreements - net Employee benefit obligations Total Non-current Liabilities Total Liabilities Shareholders' equity Share capital Authorized, issued and fully paid-up, 80,000,000 common shares, at Baht 1 each Premium on share capital Retained earnings Appropriated Legal reserve Unappropriated Total Shareholders' equity Total Liabilities and Shareholders' equity

Notes

2011

2010

12 13

228,873,888.75 1,417,679.91 4,949,592.43 235,241,161.09

206,337,158.61 1,320,361.25 7,170,380.03 214,827,899.89

13 14

5,082,226.09 8,938,916.00 14,021,142.09 249,262,303.18

6,499,906.00 6,499,906.00 221,327,805.89

15 15

80,000,000.00 77,584,990.28

8,000,000.00 78,005,633.48 243,590,623.76 492,852,926.94

6,923,920.47 56,822,591.11 221,331,501.86 442,659,307.75

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

OfficeMate Public Company Limited Statements of Comprehensive Income For the years ended December 31, 2011 and 2010 Unit: Baht

Revenues from sales and services Costs of sales and services Gross profit Other incomes Selling expenses Administrative expenses Finance costs Profit before income tax Income tax expense Profit for the year Other comprehensive income Total comprehensive income for the year

Notes 3, 19 18

Basic earnings per share Weighted average number of issued and paid-up common shares (shares)

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

2011

2010

1,262,624,701.01 1,082,999,781.48 (954,238,924.50) (824,138,225.60) 308,385,776.51 258,861,555.88 10,844,508.30 7,648,565.37 (174,513,494.92) (145,581,849.97) (80,286,154.90) (69,544,249.39) (516,352.93) (2,410,246.07) 63,914,282.06 48,973,775.82 (17,942,337.16) (14,130,797.17) 45,971,944.90 34,842,978.65 45,971,944.90 34,842,978.65 0.57

0.51

80,000,000

68,065,753

OfficeMate Public Company Limited Statements of Changes in Shareholders' Equity For the years ended December 31, 2011 and 2010 Unit: Baht Share capital

Premium on

Notes Issued and paid-up share capital Balance as at January 1, 2010

56,000,000.00

Legal reserve Unappropriated 5,181,771.54

Total

40,761,681.39 101,943,452.93

Increase in common share capital

Expenses of issuing share capital

Legal reserve

Dividend paid

(17,039,920.00) (17,039,920.00)

34,842,978.65

Total comprehensive income for the year Balance as at December 31, 2010

24,000,000.00 81,400,000.00

Retained earnings

(3,815,009.72)

80,000,000.00 77,584,990.28

105,400,000.00

(3,815,009.72)

1,742,148.93

6,923,920.47

(1,742,148.93)

34,842,978.65

56,822,591.11 221,331,501.86

Effects of changes in accounting policies - Employee benefits

Restated balance

80,000,000.00 77,584,990.28

(6,112,823.00)

6,923,920.47

50,709,768.11 215,218,678.86

1,076,079.53

(1,076,079.53)

Legal reserve

Dividend paid

(17,600,000.00) (17,600,000.00)

45,971,944.90

Total comprehensive income for the year Balance as at December 31, 2011

80,000,000.00 77,584,990.28

8,000,000.00

45,971,944.90

78,005,633.48 243,590,623.76

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

OfficeMate Public Company Limited Statements of Cash Flows For the years ended December 31, 2011 and 2010 Unit: Baht 2011 Cash flows from operating activities: Profit before income tax Adjustments to reconcile income to net cash flow from operating activities: Depreciations and amortization (Reversal) Allowance for doubtful accounts Allowance for obsolescence stock Gain on disposal of temporary investments Unrealized gain on temporary investments Gain on disposal of fixed assets Provisions for employee benefits obligations Interest expenses Income from operating activities before changes in operating assets and liabilities Operating assets (increased) decreased Trade and other receivables Inventories Operating liabilities increased (decreased) Trade and other payables Cash provided by operating activities Interest paid Income tax paid Net cash from operating activities

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

2010

63,914,282.06

48,973,775.82

20,072,917.10 (94,038.77) 1,015,914.33 (2,252,277.98) (255,932.90) (337,678.15) 2,826,093.00 516,352.93

21,025,053.50 68,588.92 487,640.26 (417,238.07) (79,440.75) (1,489,124.37) 2,410,246.07

85,405,631.62

70,979,501.38

(18,051,229.18) (49,110,613.19)

(18,604,115.86) (3,337,529.88)

21,906,634.99 40,150,424.24 (516,352.93) (20,163,124.76) 19,470,946.55

24,310,500.42 73,348,356.06 (2,644,755.70) (14,771,483.61) 55,932,116.75

OfficeMate Public Company Limited Statements of Cash Flows For the years ended December 31, 2011 and 2010 Unit: Baht 2011 Cash flows from investing activities: Cash received from disposal of temporary investments Cash paid for purchase of temporary investments Increased in pledged deposits at financial institutions Cash paid for acquisition of building and equipment Cash received from sales of fixed assets Cash paid for intangible assets Other non-current assets increased Net cash used in investing activities Cash flows from financing activities: Payments on liability under financial lease agreements Repayment of long-term loans from financial institution Cash received from increased share capital - net Cash paid for dividend Net cash (used in) from financing activities Net increased (decreased) in cash and cash equivalents Cash and cash equivalents at beginning of the years Cash and cash equivalents at end of the years Supplemental Disclosures of Cash Flows Information Non-Cash transaction: Increased in assets from financial lease agreements during the years Increased in accounts payable for purchase fixed assets

2010

745,472,882.51 (727,501,000.00) (864,022.68) (19,481,709.12) 409,327.21 (3,417,032.00) (3,928,817.25) (9,310,371.33)

544,783,115.81 (605,086,000.00) (331,805.84) (11,506,680.27) 2,550,224.28 (133,375.75) (2,215,093.83) (71,939,615.60)

(1,320,361.25) (17,600,000.00) (18,920,361.25) (8,759,786.03) 16,568,623.95 7,808,837.92

(608,843.12) (60,965,821.88) 101,584,990.28 (17,039,920.00) 22,970,405.28 6,962,906.43 9,605,717.52 16,568,623.95

630,095.15

4,949,250.00 2,776,057.00

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

OFFICEMATE PUBLIC COMPANY LIMITED NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010 1.

General Information OfficeMate Public Company Limited (“the Company”) was registered under the Civil and Commercial Code on February 28, 1994 and becomes a public company limited on June 2, 2008. The Company was listed on the Market for Alternative Investment in July 2010. The Company’s Head Office is located at 24 Soi On-Nuch 66/1, On-Nuch Road, Suanluang, Bangkok. The Company’s warehouse is located at 70 Moo 2 Ruampatana Road, Lumtoyting, Nongjok, Bangkok. The Company's main business is distributor of stationery supplies and office equipment by sales order through catalog, Call-Center and electronic commercial system (e-Commerce).

Basis for Presentation of the Financial Statements The accompanying financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) in conformity with generally accepted accounting principles in Thailand. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated September 28, 2011, issued under the Accounting Act B.E. 2543. They are prepared on the historical cost basis, except as disclosed in respective accounting policies. The accompanying financial statements have been prepared in the Thai language and expressed in Thai Baht. Such financial statements have been prepared for domestic reporting purposes. For the convenience of the readers not conversant with the Thai language, an English version of the financial statements has been provided by translating from the Thai version of the financial statements. The preparation of the financial statements in conformity with Thai accounting standard requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Subsequent actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, and in the period of the revision and future periods, if the revision affects both current and future periods. Transition to new and revised TFRS During the years 2010 and 2011, the Federation of Accounting Professions (“FAP”) has issued Notifications, mandating the use of new and revised Thai Accounting Standards (“TAS”), Thai Financial Reporting Standards (“TFRS”), Thai Financial Reporting Interpretation (“TFRI”), Thai Interpretation (“TI”) and guidelines which are effective for the financial statements for the period beginning on or after January 1, 2011 as follows: TAS/TFRS/TFRI/TI/FAP’s Topic Announcements TAS 1 (revised 2009) Presentation of Financial Statements TAS 2 (revised 2009) Inventories TAS 7 (revised 2009) Statement of Cash Flows TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors TAS 10 (revised 2009) Events After the Reporting Period TAS 11 (revised 2009) Construction Contracts TAS 16 (revised 2009) Property, Plant and Equipment TAS 17 (revised 2009) Leases TAS 18 (revised 2009) Revenue TAS 19 Employee Benefits TAS 23 (revised 2009) Borrowing Costs TAS 24 (revised 2009) Related Party Disclosures TAS 26 Accounting and Reporting by Retirement Benefit Plans TAS 27 (revised 2009) Consolidated and Separate Financial Statements TAS 28 (revised 2009) Investments in Associates TAS 29 Financial Reporting in Hyperinflationary Economies TAS 31 (revised 2009) Interests in Joint Ventures TAS 33 (revised 2009) Earnings per Share TAS 34 (revised 2009) Interim Financial Reporting

TAS/TFRS/TFRI/TI/FAP’s Announcements TAS 36 (revised 2009) TAS 37 (revised 2009) TAS 38 (revised 2009) TAS 40 (revised 2009) TFRS 2 TFRS 3 (revised 2009) TFRS 5 (revised 2009) TFRS 6 TFRI 15 TI 31 FAP’s Announcement No. 16/2011 FAP’s Announcement No. 17/2011 FAP’s Announcement No. 18/2011 FAP’s Announcement No. 19/2011

Topic Impairment of Assets Provisions, Contingent Liabilities and Contingent Assets Intangible Assets Investment Property Share – Based Payments Business Combinations Non-current Assets Held for Sale and Discontinued Operations Exploration for and Evaluation of Mineral Resources Agreements for the Construction of Real Estate Revenue – Barter Transactions Involving Advertising Services Disclosure Guidance on Related Party Transactions with Government Transitional Procedures for Other Long-term Employee Benefits Accounting Guidance on Revaluation of Assets Accounting Guidance for Condominiums

During the year 2011, the Company has adopted new and revised TFRS which are effective for the financial statements for the period beginning on or after January 1, 2011. Such transition affected the presentation of financial statements for the year ended December 31, 2010 which have been presented herewith for comparative purposes in conformity with the presentation of the financial statements for the year ended December 31, 2011 and the Company overall financial position and financial performance as follows:

The changes of TAS 1 (revised 2009) and affecting the Company as follow: Under the revised standard, a set of financial statements comprises: • Statement of financial position; • Statement of comprehensive income; • Statement of changes in shareholders' equity; • Statement of cash flows; and • Notes to the financial statements As a result, the Company presents all owner changes in shareholders' equity in the statement of changes in shareholders' equity and all non-owner changes in shareholders' equity in the statement of comprehensive income. Previously, all such changes were included in the statement of changes in shareholders' equity. Comparative information has been re-presented so that it also is in conformity with the revised standard. Since the change in accounting policy only impacts presentation aspects, there is no impact on reported profit or earnings per share. The changes of TAS 16 (revised 2009) and affecting the Company as follow: The Company reviewed useful life of the assets and had changed the estimated useful life of its office building and warehouse from 20 years to 30 years. The changes have been applied prospectively in accordance with the transitional provisions of the revised TAS for plant since January 1, 2011. The effect of such changes in useful life resulted to decrease in depreciation expense for the year ended December 31, 2011 in the amount of Baht 1.41 million in the financial statements. The changes of TAS 19 and affecting the Company as follow: The management of the Company assigned an independent actuary to determine the liability incurred from the employee benefits as at January 1, 2011 for post-employment benefits is the amount of Baht 6.11 million in the financial statements which applied a transitional provision that such liability is recognized and accounted for immediately in retained earnings at the transition date.

The effect of such change is summarized as follows: Unit: Baht The Statements of Comprehensive Income For the year ended December 31, 2011 Decrease in depreciations resulting in Selling expenses decrease

(815,931.49)

Administrative expenses decrease

(594,872.34)

Increase in employee expenses resulting in Selling expenses increase

1,625,317.00

Administrative expenses increase

1,200,776.00

Decrease in profit Decrease in earnings per share:

1,415,289.17 0.0177

The Statements of financial position as at January 1, 2011 Increase in employee benefit obligations

6,112,823.00

Decrease in retained earnings

6,112,823.00

Adoption of new and revised Thai Financial Reporting Standards During the years 2010 and 2011, the Federation of Accounting Professions (“FAP”) has issued new and revised Thai Accounting Standards (“TAS”), Thai Interpretations (“TI”) which are effective for the financial statements for the period beginning on or after January 1, 2013 as follows: TAS/TI Topic TAS 12 Income Taxes TAS 20 (revised 2009) Accounting for Government Grants and Disclosures of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rate TI 10 Government Assistance – No Specific Relation to Operating Activities TI 21 Income Taxes – Recovery of Revalued NonDepreciable Assets TI 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders The management of the Company is assessing the impacts of these standards and interpretations on the financial statements for the year in which they are initially applied.

Significant Accounting Polices 3.1 Revenues and Expenses Recognitions Sales of goods are recognized when the significant risks and rewards of ownership of the goods have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods supplied after deducting discounts and allowances. Service income is recognized as services are provided. Advertising income from Catalog (annually) will be recognized by the average number of catalogs distributed during the year and the expenses involved will also be recognized at the same method. Other revenues and expenses are recognized on an accrual basis. 3.2 Cash and cash equivalents Cash and cash equivalents consist of cash in hand, cash at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions. 3.3 Investment Investments are investments in Open-ended Fund, which are classified in the balance sheets as trading securities, are carried at their fair values. The fair value is calculated by net asset value of the fund as at the balance sheet date. Gain or loss on valuation is realized in the statements of comprehensive income. 3.4 Trade accounts receivable and allowance for doubtful accounts Trade accounts receivable are stated at the net realizable value. Allowance for doubtful accounts is provided for the estimated losses that may be incurred in the collection of receivables. The allowance is generally based on collection experiences and analysis of debt aging. 3.5 Inventories Inventories are valued at the lower of cost (the average cost method) and net realizable value. 3.6 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any).

Depreciation of plant and equipment is calculated by reference to their costs on the straight-line basis over the following estimated useful lives: Useful life (years) New Former 30 20 5 5 3, 5, 7 3, 5, 7 5 5 5 5

Buildings Furniture and fixtures Equipment Vehicles Car parking

No depreciation is provided for land and land improvements. Depreciation is recognized in the statements of comprehensive income. 3.7 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 3.8 Intangible assets Intangible assets with finite lives are amortized on a systematic basis over the economic useful life and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method of such intangible assets are reviewed at least at each financial year end. The amortization expense is charged to the statement of comprehensive income. A summary of the intangible assets with finite useful lives is as follows. Computer software

years

3.9 Long-term leases Leases of property, plant or equipment which transfer substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the lower of the fair value of the leased assets and the present value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are included in other long-term payables, while the interest element is charged to the statement of comprehensive income over the lease period. The property, plant or equipment acquired under finance leases is depreciated over the useful life of the asset.

Lease of assets where a significant portion of the risks and rewards of ownership are retained by the lesser are classified as operating leases. Payments made under operating leases are recognized as expenses in the statement of comprehensive income over the period of the lease. 3.10 Foreign currencies Transactions in foreign currencies are translated into Baht at the exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated into Baht at the exchange rate ruling at date of the statement of financial position. Gains and losses on exchange are recognized in the statements of comprehensive income. 3.11 Employee benefits Short-term benefits The Company recognized salaries, wages, bonus and social security contribution as expenses on an accrual basis. Post-employment benefits â&#x20AC;&#x201C; defined contribution plan The Company operates a provident fund that is a defined contribution plan. The assets of which are held in a separate trust fund. The provident fund is funded by payments from employees and the Company. Contributions to the provident fund are charged to the statement of comprehensive income in the period to which they relate. Post-employment benefits â&#x20AC;&#x201C; defined benefit plan The employee benefits obligations for severance payment as the labor law is recognized as a charge to results of operations over the employeeâ&#x20AC;&#x2122;s service period. It is calculated by estimating the amount of future benefit earned by employees in return for service provided to the Company in the current and future periods, with such benefit being discounted to determine the present value. The reference point for setting the discount rate is the yield rate of government bonds as at the reporting date. The calculation is performed by actuarial technique using the Projected Unit Credit Method. When the employee benefits are improved, the portion of the increased benefit relating to past service by employees is recognized in the statement of comprehensive income on a straight-line basis over the average period until the benefits become vested. When the actuarial assumptions are changed, the Company recognized actuarial gains or losses in the statement of comprehensive income for the period in which they arise.

3.12 Provisions Provisions are recognized when the Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. 3.13 Income Tax Income tax for the year is calculated from the net profit for the year adjusted by non-deductible expenses or non-taxable income and multiplied by the income tax rate stipulated by the Revenue Code. The annual tax rate for the year 2011 is 25% for the net profit of Baht 50 million and 30% for the net profit exceed Baht 50 million (The annual tax rate used for the year 2010 is 30%). 3.14 Basic Earning per Share Basic earning per share is computed by dividing the profit for the year by the weighted average number of issued and paid-up common shares during the year. 3.15 Financial instruments The Company has no policy to speculate in or engage in the trading of any financial derivative instruments. 4.

Significant accounting judgments and estimates The preparation of financial statements in conformity with generally accepted accounting principles at times requires management to make subjective judgments and estimates regarding matters that are inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual results could differ. Significant judgments and estimates are as follows: 4.1 Allowance for doubtful accounts In determining an allowance for doubtful accounts, the management needs to make judgment and estimates based upon, among other things, past collection history, aging profile of outstanding debts and the prevailing economic condition. 4.2 Allowance for diminution in value of inventory The determination of allowances for diminution in the value of inventory, requires management to make judgments and estimates. The allowance for decline in net realizable value is estimated based on the selling price expected in the ordinary course of business; and provision for obsolete, slowmoving and deteriorated inventories, that is estimated based on the approximate useful life of each type of inventory.

4.3 Leases In determining whether a lease is to be classified as an operating lease or finance lease, the management is required to use judgment regarding whether significant risk and rewards of ownership of the leased asset has been transferred, taking into consideration terms and conditions of the arrangement. 4.4 Property plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and salvage values of the Companyâ&#x20AC;&#x2122;s plant and equipment and to review estimate useful lives and salvage values when there are any changes. In addition, the management is required to review property, plant and equipment for impairment on a periodical basis and record impairment losses in the period when it is determined that their recoverable amount is lower than the carrying amount. This requires judgments regarding forecast of future revenues and expenses relating to the assets subject to the review. 4.5 Goodwill and intangible assets The initial recognition and measurement of goodwill and other intangible assets, and subsequent impairment testing, require management to make estimates of cash flows to be generated by the asset or the cash generating units and to choose a suitable discount rate in order to calculate the present value of those cash flows. 5.

Transactions with Related Parties Key management personnel compensation Key management personnel compensation for the year ended December 31, 2011 consisted of: Unit : Baht Short-term benefits 13,593,235.00 Other long-term benefits 47,347.00 Termination benefits 455,373.00 Total key management personnnel compensation 14,095,955.00

Cash and cash equivalents Cash and cash equivalents as at December 31, consisted of:Unit: Baht Cash Cash at banks â&#x20AC;&#x201C; current account Cash at banks â&#x20AC;&#x201C; saving account Total Cash and cash equivalents

2011 527,678.00 4,470,376.03 2,810,783.89 7,808,837.92

2010 474,266.00 4,872,428.27 11,221,929.68 16,568,623.95

Temporary Investment Temporary investment as at December 31, consisted of:Unit: Baht Fixed income open-ended fund Add Changes in fair value of investment Total Temporary investment

2011 68,127,642.07 255,932.90 68,383,574.97

2010 83,767,805.85 79,440.75 83,847,246.60

Trade and other receivables - net Trade and other receivables as at December 31, consisted of:Unit: Baht Trade receivables Less Allowance for doubtful accounts Trade receivables - net Other receivables Accrued revenues Prepaid expenses Deposit Others Total Other receivables Total Trade and other receivables

2011 107,179,784.72 (7,725.67) 107,172,059.05

2010 92,739,621.20 (101,764.44) 92,637,856.76

8,370,959.55 2,051,227.71 544,369.20 1,082,278.90 12,048,835.36 119,220,894.41

5,734,979.53 1,867,751.65 90,804.40 744,234.12 8,437,769.70 101,075,626.46

As at December 31, 2011 and 2010, the Company had outstanding balances of trade accounts receivable aged as follows: Unit: Baht Not yet due Past due Less than 30 days 31 - 60 days 61 - 90 days 91 - 120 days Over 120 days Total trade accounts receivable Less Allowance for doubtful accounts Total trade accounts receivable - net

2011 92,152,174.49

2010 79,062,266.18

11,540,792.21 2,637,386.38 782,622.76 62,828.89 3,979.99 107,179,784.72 (7,725.67) 107,172,059.05

12,326,218.56 1,030,274.51 196,981.23 25,702.57 98,178.15 92,739,621.20 (101,764.44) 92,637,856.76

Inventories - net Inventories as at December 31, consisted of:Unit: Baht Finished goods Supplies Total inventories Less Allowance for stock devaluation Total inventories - net

2011 133,749,340.77 92,441.04 133,841,781.81 (1,949,635.75) 131,892,146.06

2010 84,962,803.93 37,093.16 84,999,897.09 (1,202,449.89) 83,797,447.20

10.

Property, Plant and Equipment - net Property, plant and equipment as at December 31, 2011 consisted of:-

As at January 1, 2011 Cost Land 36,180,335.00 Land improvements 10,341,703.27 Buildings 73,159,506.18 Equipment 72,112,686.57 Furnitures and fixtures 8,596,159.15 Vehicles 29,538,028.99 Car parking 182,800.00 Property under construction 945,852.49 Total 231,057,071.65 Accumulated Depreciation Buildings 14,460,146.58 Equipments 49,508,125.13 Furnitures and fixtures 6,484,382.68 Vehicles 16,993,041.59 Car parking 91,126.68 Total 87,536,822.66 Net book value 143,520,248.99

Unit: Baht Movement during the year Increase Decrease

As at December 31, 2011

13,253,588.02 5,607,064.42 122,000.00 7,654,683.10 26,637,335.54

1,584,210.05 6,555.84 1,050,074.77 7,155,626.42 9,796,467.08

36,180,335.00 10,341,703.27 73,159,506.18 83,782,064.54 14,196,667.73 28,609,954.22 182,800.00 1,444,909.17 247,897,940.11

2,247,171.06 10,823,686.01 1,551,685.25 4,268,155.54 19,999.78 18,910,697.64

1,572,860.69 5,975.71 990,355.20 2,569,191.60

16,707,317.64 58,758,950.45 8,030,092.22 20,270,841.93 111,126.46 103,878,328.70 144,019,611.41

As at December 31, 2011 and 2010, the Companyâ&#x20AC;&#x2122;s land with office building are mortgaged as collateral for loan facilities from a financial institution with mortgaged value of Baht 50 million (Note 22.3). Depreciations for the years ended December 31, 2011 and 2010, amounted to Baht 18.91 million and Baht 20.44 million, respectively, were included in the statements of comprehensive income. As at December 31, 2011 and 2010, the Companyâ&#x20AC;&#x2122;s equipment and vehicles amounting to Baht 44.33 million and Baht 30.68 million, respectively, are fully depreciated but are still in use.

11.

Intangible asset - net Intangible asset as at December 31, 2011 consisted of:Unit: Baht Computer software Cost Balance as at January 1, 2011 Increase during the year Balance as at December 31, 2011 Accumulated amortization Balance as at January 1, 2011 Increase during the year Balance as at December 31, 2011 Net book value as at January 1, 2011

8,535,427.69 4,047,127.15 12,582,554.84 1,559,010.95 1,162,219.46 2,721,230.41 6,976,416.74

Net book value as at December 31, 2011

12.

9,861,324.43

Trade and other payables Trade and other payables as at December 31, consisted of:Unit: Baht Trade payables Other payables Accounts payable for purchase fixed assets Publish accounts payable Unearned advertising income Unearned income Accrued employee benefits expenses Accrued value added tax Other accounts payable Other Total Other payables Total Trade and other payables

2011 195,037,340.60

2010 175,100,151.26

3,396,152.15 1,620,087.00 3,284,999.24 2,456,796.73 10,217,560.40 627,969.68 6,495,988.65 5,736,994.30 33,836,548.15 228,873,888.75

2,766,057.00 1,765,768.00 412,395.84 2,701,163.78 9,836,388.90 870,877.41 6,871,407.43 6,012,948.99 31,237,007.35 206,337,158.61

13.

Liabilities under financial lease agreements - net Liabilities under financial lease agreements as at December 31, consisted of:Unit: Baht 2011

14.

2010

Due within 1 year Minimum payments Interest charges Present value of minimum payment

1,830,575.91 (412,896.00) 1,417,679.91

1,830,575.95 (510,214.70) 1,320,361.25

Due over 1 year but not exceed 5 years Minimum payments Interest charges Present value of minimum payment Total present value of minimum payment

5,611,168.00 (528,941.91) 5,082,226.09 6,499,906.00

7,441,744.05 (941,838.05) 6,499,906.00 7,820,267.25

Net book value of vehicle under finance leases agreements

7,086,396.17

9,109,995.84

Employee Benefits Obligations Retirement benefit Under Labor Laws applicable in Thailand and the Companyâ&#x20AC;&#x2122;s employment policy, all employees completing 120 days of service are entitled to severance pay on termination or retrenchment without cause or upon retirement age. The severance pay will be at the rate according to number of years of service as stipulated in the Labor Law which is currently at a maximum rate of 300 days of final salary. Other long-term benefits The Company has policy to reward cash to the employees who have provided the services to the Company upon 5 years anniversary and also has policy to reward additional cash to the employees who have provided the services to the Company upon 10 - 40 years anniversary as specified in the Companyâ&#x20AC;&#x2122;s benefit plan. Movement of the present value of employee benefits obligation for the year ended December 31, 2011 as follows: Unit : Baht Post-employment benefit plan

Defined benefit obligations at January 1, 2011

6,112,823.00

Current service costs

2,515,474.00

Cost of interest Defined benefit obligations at December 31, 2011

310,619.00 8,938,916.00

Employee benefit expenses in the statements of comprehensive income for the year ended December 31, 2011 consisted of:Unit : Baht Current service cost

2,515,474.00

Interest from obligation Total employee benefits expenses

310,619.00 2,826,093.00

Employee benefit expenses for the year ended December 31, 2011 as shown in the statements of comprehensive income as follows: Unit : Baht Selling expenses

1,625,317.00

Administrative expenses Total employee benefits expenses

1,200,776.00 2,826,093.00

Principal actuarial assumptions as at December 31, 2011 (expressed as weighted averages) as follows: Pecentage/year Discount rate at December 31 3.60 Future salary increases 5.00 Mortality rate As Mortality Table 1997 The actuarial assumption of discount rate is estimated from weighted average of yield rate of government bonds as at the end of reporting date that reflects the estimated timing of benefit payments. The actuarial assumption of mortality rate for reasonable estimation of probability of retirement in the future is estimated from mortality table. 15.

Share capital Initially Offered to the Public (IPO) On July 14, 2010, the Company initially offered to the public of 20 million shares of Baht 4.90 per shares and recorded the expenses of issuing share capital of Baht 3.82 million by deduction to premium on share capital. The Company registered the changes in share capital with the Ministry of Commerce on July 20, 2010.

Employees Stock Option Program (ESOP) The resolutions of the Annual General Meeting of Shareholders No.1/2010 held on March 12, 2010 approved to allocate 4 million increased common shares to sell to its managements and employees amount of Baht 7.4 million at Baht 1.85 per share for a reward of their performance working with the Company, which the offered price does not less than its book value of the Company’s unaudited and unreviewed financial statement by an auditor ended March 31, 2010. 16.

Legal Reserve Under the Public Company Act, B.E. 2535 (1992), the Company is required to set aside as a legal reserve at least 5% of its net profit after deducting the accumulated loss brought forward (if any) until the reserve is not less than 10% of the authorized share capital which presently is fully appropriated.

17.

Dividend Payment At the Broad of Director’ Meeting No. 3/2011 held on August 8, 2011 authorized the payment of an interim dividend from its operations for the six-month period ended June 30, 2011 amounting Baht 10.40 million for 80 million shares at the rate of Baht 0.13 per share. The dividend was paid on September 6, 2011. At the Ordinary Shareholder’s Meeting No. 1/2011 held on April 19, 2011, the shareholders authorized the dividend payment from its operation for the year 2010 at the rate of Baht 0.17 per share or 41.09 % of the profit after tax and legal reserve. An interim dividend of Baht 0.08 per share for its operation of 6 months in the early year 2010 was paid on September 9, 2010. Thus, the remaining dividend of Baht 0.09 per share was paid on May 3, 2011 to the eligible shareholders. At the Broad of Director’ Meeting No. 4/2010 held on August 10, 2010 authorized the payment of an interim dividend from its operations for the six-month period ended June 30, 2010 amounting Baht 6.40 million for 80 million shares at the rate of Baht 0.08 per share. The dividend was paid on September 9, 2010. At the Ordinary Shareholder’s Meeting No. 1/2010 held on March 12, 2010, the shareholders authorized the dividend payment from its operations for the year 2009 amounting Baht 10.64 million for 56 million shares at the rate of Baht 0.19 per share. The dividend was paid on March 23, 2010.

18.

Revenues from sales and services Revenues from sales and services for the years ended December 31, were as follows: Unit : Baht Revenues from sales Revenues from services Total revenue from sales and services

19.

2011 1,219,382,229.43 43,242,471.58 1,262,624,701.01

2010 1,045,230,114.82 37,769,666.66 1,082,999,781.48

Expenses by Nature Significant expenses by nature for the years ended December 31, were as follows:

hanges in inventories increased Net purchase Depreciation and amortisation Management and employee's expenses atalog and magazine printing expenses Advertising and promotion expenses Distribution expenses ostal expenses

20.

Unit: Million Baht 2011 2010 48.79 3.34 982.31 806.89 20.07 21.03 194.37 137.57 26.48 20.67 9.14 5.97 20.74 16.95 6.55 5.35

Disclosure of Financial Instruments 20.1 Credit risk The Company has credit risk in relation to its trade accounts receivable. However, the Company has several customers and maintains conservative credit policy and collection procedures. Therefore, the Company does not expect to have significant loss from uncollectible amounts on these receivables. 20.2 Fair value of financial instruments The following methods and assumptions were used by the Company in estimating the fair value of the financial instruments: Cash and cash equivalents, trade accounts receivable, the carrying values approximate their fair values. Bank overdrafts and loans from financial institutions carrying variable rates of interest and trade accounts payable, carry amounts approximating their fair values.

The management of the Company believes that the fair value of such financial assets and liabilities will not be significantly different from the book values. 20.3 Interest rate risk The interest rate risk is the risk that future movements in the market interest rates will affect the results of the Companyâ&#x20AC;&#x2122;s operations and its cash flows. The Companyâ&#x20AC;&#x2122;s exposure to interest rates risk relates primarily to its deposits, bank overdrafts, and loans from financial institutions.

21.

Since major financial assets and liabilities are classified as short-term, the Company does not have significant risk from the interest rates. Financial Information by Segment The Company operations are in a single industry segment of stationery supplies and office equipment by sales order through catalog, Call-Center and electronic commercial system (e-Commerce) in the single geographic area of Thailand. As a result, all of the revenues, operating profits and assets as reflected in these financial statements pertain to the aforementioned industry segment and geographic area.

22.

Commitment and Contingent liability 22.1 Agreements As at December 31, 2011 and 2010, the Company entered into a sale agreement for Call Center System with a company. Under this agreement, the Company has obliged to pay the after-sales service agreement for a period of 5 years at annual service fee of Baht 0.86 million and as at December 31, 2011 the Company has obliged to pay remain costs of equipment and installation fees amount of Baht 6.22 million. As at December 31, 2011 and 2010, the Company entered into operating lease agreements for land, office space, equipments and services for periods since 1 to 5 years. The Company has obliged to pay operating lease expenses are as follows: Unit: Baht Due within 1 year Due over 1 year but not over 5 years

2011 22,731,815.78 28,481,058.55

2010 5,694,202.31 19,990,216.68

22.2 Letter of guarantee As at December 31, 2011 and 2010, the Company has a commitment with financial institutions for the letters of guarantee issued totaling Baht 3.97 million and Baht 3.48 million, respectively, which were guaranteed by pledged deposits.

22.3 Credit Facilities Line with Financial Institutions As at December 31, 2011 and 2010, the Company had loan facilities line with 2 financial institutions, totaling Baht 55 million and Baht 59.29 million, respectively, which are secured by pledged deposits, the mortgage of the Company's land with office building (Note 10). The loans are subject to certain conditions with which the Company has to comply throughout the loans period. 23.

Provident fund The Company and its employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. Both employees and the Company contribute to the fund monthly at the rate of 3-5 percent of salary. The fund, which is managed by TISCO Asset Management Company Limited, will be paid to employees upon termination in accordance with the fund rules. Total contributions by the Company for years ended December 31, 2011 and 2010 amounted to approximately Baht 3.84 million and Baht 3.28 million, respectively.

24.

Reclassification of accounts The Company has reclassified certain accounts in the statement of financial position as at December 31, 2011 and the statements of comprehensive income for the year ended December 31, 2011 to conform to the presentation of the financial statements of current year. Unit: Thousand Baht Before reclassification

Reclassification

After reclassification

The statement of financial position as at December 31, 2010 Trade and other receivables - net Trade receivables - net 92,637.86 Other current assets 8,437.77 Property, plant and equipment 146,105.35 Intangible assets 4,391.32 Trade and other payables Trade payables 175,100.15 Unearned advertising income 412.40 Accured expenses 17,309.04 Other current liabilities 13,515.57

101,075.63 (92,637.86) (8,437.77) (2,585.10) 2,585.10 206,337.16 (175,100.15) (412.40) (17,309.04) (13,515.57)

101,075.63 143,520.25 6,976.42 206,337.16 -

Unit: Thousand Baht

The statements of comprehensive income For the year ended December 31, 2010 Revenues from sales and services Advertising income Costs of sales and services Selling expenses Administrative espenses Management benefit expenses

25.

Before reclassification

Reclassification

After reclassification

1,045,230.11 37,769.67 803,467.20 165,972.88 56,889.13 12,935.12

37,769.67 (37,769.67) 20,671.03 (20,391.03) 12,655.12 (12,935.12)

1,082,999.78 824,138.23 145,581.85 69,544.25 -

Approval of financial statements These financial statements have been approved by the authorized directors to be issued on February 23, 2012.