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Annual Report 2012 Officemate Public Company Limited
Content Financial Highlights Vision and Mission The Board of Directors’Report Company’s General Information Organization Chart Introduction to the Board of Directors Introduction to the Management Nature of Business Operation Significant Developments Industrial Competition Risk Factors and Risk Management OFM and Sustainable Development Major Shareholders Management Structure Remuneration of the Board of Directors and Management Shareholding of the Board of Directors and Management Internal Control Related Transactions Report of the Board of Directors’Responsibility for Financial Statements Report of the Audit Committee Managent’s Discussion and Analysis Auditor’s Report Financial Statements and Notes
2 3 4 6 7 8 13 14 19 20 22 24 49 50 61 64 65 74 79 80 82 89 91
Financial Highlights Total Revenue and Total Net Income (Comparison of 2009-2012)
2012
2011
2010
2009
2012
2011
2012
2011
2010
2009
2012
2011
Financial Highlights (Comparison of 2009-2012) Consolidated Financial Statement
Separate Financial Statement Ended 31 December 2012
2012
2011
2010
2009
2012
2011
Statements of Income (Million Baht) Sales Revenue
1,625.34
1,219.38
1,045.23
871.16
6,683.76
5,747.39
Advertising Revenue
51.89
43.24
37.77
36.71
259.60
203.31
Other Revenue
16.75
10.84
7.65
6.28
233.21
162.25
Total Revenue
1,693.97
1,273.47
1,090.65
914.16
7,176.57
6,112.95
EBITDA
59.14
84.50
71.44
63.29
379.35
232.82
Net Profit
45.53
45.97
34.84
26.64
287.14
120.91
9,956.13
492.85
442.66
356.46
6,330.62
2,881.36
693.41
249.26
221.33
254.52
2,114.82
1,565.43
9,262.72
243.59
221.33
101.94
4,215.81
1,315.93
Issued and Fully paid-up Share Capital (Million Shares)
320
80.00
80
56
320
1,332
Earnings per share (Baht)
0.52
0.57
0.51
0.48
1.18
0.50
Dividend per share (Baht)
0.08
0.22
0.17
0.19
1.21
-
57.99
38.28
39.03
39.95
121.51
-
Balance Sheets (Million Baht) Total Assets Total liabilities Shareholders’ Equity Shares
Dividends Payout Ratio on Net Income (%) Financial Ratios Net Income on Total Revenues (%)
2.69
3.61
3.19
2.91
4.00
1.98
Return on Equity (%)
0.96
19.78
21.56
28.87
10.38
9.63
Return on Total Assets (%)
0.87
9.83
8.72
7.53
6.23
4.27
Debt to Equity (Times)
0.07
1.02
1.47
2.84
0.50
1.19
92.64
124.62
21.32
8.79
95.80
41.28
Interest Coverage (Times)
Remark: In year 2012, the use of the weighting ordinary share numbers of 320,000,000 shares for Separate and Consolidated Financial Statement In year 2011, the use of the weighting ordinary share numbers of 80,000,000 shares In year 2010, the use of the weighting ordinary share numbers of 68,065,753 shares (80,000,000 shares in July 2010) In year 2009, the use of the weighting ordinary share numbers of 56,000,000 shares In year 2008, the use of the weighting ordinary share numbers of 42,098,630 shares
Vision “To be excellent leading retailer and e-tailing in ASEAN” Mission Improve and introduce new technology in management Improve and encourage consistent learning of the company’s staffs Giving importance to clients’ relationship at every levels Encourage efficient and effective customers’ procurement Giving importance to environment and social responsibility
Business Strategies Initiate the high technology and knowledge to the use of internal process and to service the customers Apply e-Learning to practice the Company’s human resources Apply the Relation Management to the customers and suppliers Customer is the learning center for the Company’s sustainable development Launch the modern technology to increase the potential of procurement system to the customers such as e-procurement and e-Community Commerce Participate in social development and environment protection
Value Customer is the most valuable asset of the Company
Culture Be right, transparent, and fair Enhance the working atmostsphere with joy, happiness and well life quality
The Board of Directors’ Report The year 2012 was the year of the significant change of the Company with the merging of Office Club Thai) Co., Ltd. and its subsidiary and B2S Co., Ltd. which is a business unit under the management of Central Retail Corporation. The Company issued the common stocks of 240,000,000 shares, totaling 320,000,000 shares of the registered capital and paid-up capital of Baht 320,000,000. The Company’s benefit received from the merging is the complete distribution channels such as the retail shop system, the call center system, and the online system. It is the country’s important merging of the retail business which leads to the proficiency of capability of business operation for sufficient growth of the Company and enhance the competitiveness within the Asean Economic Community. In 2012, the increase of the total revenue of the Company from 2011 came from the aggressive expansion policy of the market share and the Company’s focus on providing services to the customers and consistently maintaining good relationship with the customers, leading to the total the total revenue of Baht 7,176.57 million in 2012 in comparison with Baht 6,112.95 million in 2011, or increased by 17.40%. The Company’s consolidated financial statements reported the total revenue of Baht 1,693.97 million, or increased by Baht 420.50 million, accounting for the growth of 33.02% from Baht 1,273.47 million from the total revenue in 2011.
The management after the merging, the Company’s management is divided into 3 business units, namely: (1) The business group of OfficeMate – distributors of stationary and office equipment through catalog, the Call Center, the e-Procurement, e-Commerce, and the stores across Thailand. (2) The business group of B2S – distributor of lifestyle products through e-Commerce and stores across Thailand. (3) The business group of online – development of the electronic commerce business for Central Retail Corporation.
Good Corporate Governance The Board of Directors of the Company has realized the importance of the Corporate Governance and encouragement the Company to join the Good Corporate Governance Development 2012 with the support of the Stock Exchange of Thailand. With its consistent compliance with the best practice of the Corporate Governance led to the Company’s receiving of the “Excellent” (4 stars) from the assessment of the Corporate Governance Survey from the Thai Institute of Directors (IOD) and “Very Good” (98 points from 100 points) from the assessment of the shareholder’s annual general meeting 2012 by the Thai Investors Association. In addition, the Company also joined the SET IR’s Advising Program which was supported by the Stock Exchange of Thailand to develop the operation of the investor relations. Apart from the support of the Good Corporate Governance in 2012, the Company also joined anti-corruption activities of the Thai private sector by organizing the seminar of “Fight the Corruption Crisis in Thailand” which was also joined by the Company’s executives as Anti-Corruption Network Committee on the Development of the Morality and Ethics to strengthen the power of national population’s morality and ethics quality development to maintain the balance of the Thai society. On behalf of the Board of Directors, I would like to express my sincere appreciation to all stakeholders for their support and confidence in the Company’s business operation. I would like to ensure the Company’s embrace of the accurate Corporate Governance, following the law and the ethics with transparency and fairness toward the stakeholders, including continuous business development of competitiveness for the creation of the value and increase of the sufficient value.
(Mr. SAHAS TREETIPBUT) Chairman of the Board
(Mr. WORAWOOT OUNJAI) Chief Executive Officer
Company’s General Information General Information Company Name Nature of Business
Head Office Warehouse Registration Number Registered Capital Paid-up Capital Home Page Telephone Fax
OfficeMate Public Company Limited Distribution of stationery and office equipment through a catalog and receive purchase orders through the systems of Call Center, e-Commerce and e-Procurement, and distribution of life style product through online (e-Commerce) and store. 24 Soi On-Nut 66/1, Suanluang, Bangkok 10250 70 Moo. 2, Ruampattana Road, Lumtoiting, Nongjok, Bangkok 10530 0107551000134 Baht 320 million, including 320 million shares Baht 320 million www.officemate.co.th , www.b2s.co.th , www.trendyday.com (66) 2739-5555 (66) 2763-5555
Sudsidiaries 1) Office Club (Thai) Co., Ltd. has a registered capital and the paid up capital of Baht 691,550,000. It is the retail and wholesale distributor of office stationary and furniture. - Office Supply Club Co., Ltd. has a registered capital and the paid up capital of has Baht 200,000,000. All of its assets have already been transferred to Office Club (Thai) Co., Ltd. There is only its rental area business remained from the former rental contract. 2) B2S Co., Ltd. has a registered capital and the paid up capital of Baht 640,000,000. It is the distributor shop of stationary, books, media entertainment, music, movies, and office stationary.
Vice President of Operations
Chief Executive Officer
Executive Committees
Product Management
Vice President of
Managing Director-B2S
Company Secretary
Vice President of Sales and CRM
Mangnaging Director-OFM
OfficeMate Public Company Limited
Organization Chart
Vice President of Marketing
Chief Information Officer
The Board of Directors
Vice President of Logistics
Internal Audit Div.
Risk Management Team
The Audit Committee
The Board of Directors
SAHAS TREETIPBUT Chairman of the Board , Member of the Audit Committee, Independent Director Age : 66 Share Held : None Education - MS., Computer and Information Sciences, Syracuse University, USA. - BA (Statistics), Chulalongkorn Business School, Chulalongkorn University
IOD Training Program - Director Accreditation Program / How to Measure the Success of Corporate Strategy (HMS) / Successful Formulation & Execution the Strategy (SFE)
Work experience in the last 5 year 2008 - present - Chairman of the Board and member of the Audit Committee, Officemate Public Company Limited 2006 - present - Director/ Executive Director/ Nomination and Remuneration Director, Internet Thailand Public Company Limited 2012 - present - Chairman of the Board, Thiensurat Public Company Limited 2012 - present - Chairman of the Board, Netbay Co., Ltd.
ŕ¸Ąŕ¸Şŕ¸Ąŕ¸šŕ¸šŕ¸Łŕ¸“ďœŽ ŕ¸ ŕ¸Łŕ¸Łŕ¸Ąŕ¸ ŕ¸˛ŕ¸Łŕ¸•ŕ¸Łŕ¸§ŕ¸ˆŕ¸Şŕ¸ŕ¸š , ภรรลภารŕ¸ŕ¸´ŕ¸Şŕ¸Łŕ¸°
Assoc. Prof. ANGKARAT PRIEBJRIVAT Chairman of the Audit Committee , Independent Director Age : 58 Share Held : None
CHULEEPORN PIEMSOMBOON Independent Director , Member of the Audit Committee Age : 61 Share Held : None
Education
Education
- Ph.D, Accounting, New York University, USA. - Master of Accounting, Thammasart University - Bachelor of Accounting (Honor), Thammasart University
- MBA (Marketing) Chulalongkorn University - Bachelor of Marketing (Honor), Chulalongkorn University
IOD Training Program
IOD Training Program
- 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
- Director Accreditation Program
Work experience in the last 5 year 2008 - present - Independent Director and Chairman of the Audit Committee, OfficeMate Public Company Limited 2012 - present - Audit Committee, Thai Public Broadcasting Service 2012 - present - Consultant of the Audit Committee, Government Pension Fund 2012 - present - Consultant of Accounting Standards Committee, Federation of Accounting Profession 2008 - present - Independent Director and Consultant of the Audit Committee, Tisco Financial Group PCL. 2009 - present - Advisory-Accounting and Governance, SEC. 2009 - present - Government Accounting Standards Sub-Committee, The Comptroller General's Department, Ministry of Finance 2006 - present - Chairman of the Supervisory Committee, The ABF Thailand Bond Index Fund 1997 - present - Associate Professor, Business School, National Institute of Development Administration 1992 - present - Advisor, Listing & Disclosure, SET.
Work experience in the last 5 year 2008 - 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
SUTHILAKSH CHIRATHIVAT
Authorized Director and Executive Director , Executive Committee, CEO Age : 47 Share Held : 8.83% Education
Education
- MBA, National Institute of Development Administration - BA (Marketing), Kasetsart University
- MBA, University of New Hampshire, USA. - Bachelor of Politic Science, Chulalongkorn University
IOD Training Program
IOD Training Program
- Director Certification Program - Director Accreditation Program - Financial Statements for Directors
- Director Accreditation Program 2013
Work experiences in the last 5 years
Work experiences in the last 5 years Dec 2012 - present - Chief Executive Officer/Executive Committee, Officemate Public Company Limited 2012 - present - Committee, Thai Listed Companies Association 2011 - present - Vice president-Academic, mai Listed Companies Association 2011 - present - Committee, SME Development, The Thai Chamber of Commerce and Board of Trade of Thailand 2006 - 2012 - Honor committee, Thai e-Commerce Association
Director , Authorized Director Age : 57 Share Held : 8.73%
คุณชุลีพร เปยมสมบรณ
2012 - present 1990 - present 1995 - present 1997 - 2001 1995 - 1997 1993 - 1995
- Director, Officemate Public Company Limited - Executive Committee, Central Group Co., Ltd. - Director, Central Watson Co., Ltd. - Executive Committee/Chief Executive Officer, Central Retail Corporation Co., Ltd. - Business Development, Central Retail Corporation Co., Ltd. - Vice President- Marketing and Advertising, Central Department Store Co., Ltd
PANDIT MONGKOLKUL
JARIYA CHIRATHIVAT
Director , Authorized Director Age : 50 Share Held : None
Director , Authorized Director Age : 46 Share Held : 8.60% Education
Education
- MBA, Clark University, USA - Bachelor of Politic Science, Thammasart University
- MBA, (Finance and Institute Business), Sasin Graduate Institute of Business Administration of Chulalongkorn University - Bachelor of Accounting, Chulalongkorn University
IOD Training Program
IOD Training Program
- Director Accreditation Program 2013
- Director Certification Program 2003
Work experiences in the last 5 years
Work experiences in the last 5 years
2012 - present - Director, Officemate Public Company Limited 2011 - present - Senior Vice President-Business Development, Central Retail Corporation Co., Ltd. 1993 - 2011 - Vice President- Marketing Communication, Bic C Supercenter Public Company Limited 1991 - 1993 - Purchasing Manager, Central Department Store Co., Ltd.
2012 - Present 2012 - Present 2011 - Present 2011 - Present 2008 - Present 2008 - Present 2006 - 2012 2005 - 2010 2005 - Present 2004 - Present 2004 - 2011 2000 - Present 1996 - Present 1994 - Present 1993 - Present 1992 - Present
- Director Kata Phuket Hotel Co., Ltd. - Director Office Mate PCL. - Director CG Training Center Co., Ltd. - Director Central Watson Co., Ltd. - Director Central Retail Training Center Co., Ltd. - Director Central Samui Hotel Management Co., Ltd. - Director/ Risk Management Committee Malee Sampran PCL. - Director Andaman Capital Co., Ltd. - Director Central Life Broker Co., Ltd. - Director CG Broker Co., Ltd. - Chief of Executive Committee Dhanamitr Factoring PCL. - Director Robinson Planner Co., Ltd. - Director Robinson Department Store PCL. and its subsidiaries - Director Central Marketing Group Inter Trade Co., Ltd. - Director Earth Care Co., Ltd. - Executive Vice President Harng Central Department Store Co., Ltd.
PREECHA EKKUNAGUL
NATH VONGPANICH
Director , Chairman of the Executive Committee , Authorized Director Age : 55 Share Held : None
Director , Authorized Director , Executive Committee Age : 44 Share Held : None
Education
Education
- Master of Industrial and Management, Asian Institute of Technology - Bachelor of Chemical Engineering, Chulalongkorn University
- MBA (Information System and Industrial Engineering) University of Texas at Arlington, USA - Bachelor of Electrical Engineering, KMITL
IOD Training Program
IOD Training Program
- Director Certification Program 2005 - Director Accreditation Program 2004
- Director Accreditation Program 2013
Work experiences in the last 5 years
Work experiences in the last 5 years
2012 - present - Director, Officemate Public Company Limited 2003 - present - Director/Executive Committee/President, Robinson Department Store PCL. and its subsidiaries 2002 - 2003 - President, B2S Co., Ltd. 2002 - 2003 - President, CRC Power Retail Co., Ltd. 1995 - 2003 - President, Bic C Supercenter Public Company Limited
2012 - present - Director/Executive Committee, Officemate Public Company Limited 2011 - present - Chief Executive Officer, Siam Familymart Co., Ltd. 2010 - 2012 - Senior Vice President, Central Retail Corporation Co., Ltd.(Super Sport, Office Depot) 2010 - 2012 - President, B2S Co., Ltd. 2005 - 2009 - President, CRC Sport Co., Ltd.
คุณชุลีพร เปยมสมบูรณ กรรมการตรวจสอบ , กรรมการอิสระ
Nature of Business Operation The business operation of the Group Officemate Public Company Limited, the "Company�, is the distributor of the stationary and office equipment via online catalog through the Call Center and the corporate online system (e-Procurement) and (e-Commerce) and the shops across the country with free delivery at minimum order purchase of Baht 499. In 2010, the Company was enlisted on the Market Alternative Investment (mai) with the registered capital of Baht 80,000,000 and the paid up capital of Baht 80,000,000. In 2012, the Company had merged with Office Club (Thai) Co., Ltd. and B2S Co., Ltd. by issuing the common stocks of 240,000,000 shares, totaling 320,000,000 shares, and the registered capital of Baht 320,000,000 and the paid up capital of Baht 320,000,000. After the business combination, the Company was enlisted on the Stock Exchange of Thailand (SET). Thus, after the completion of the capital increase, Office Club (Thai) Co., Ltd. and B2S Co., Ltd. have become the Company’s subsidiaries.
Overview of the Business of the Company Officemate Public Company Limited 99.99 %
Office Club (Thai) Co., Ltd.
99.99%
B2S Co., Ltd.
100%
Office Supply Club Co., Ltd.
1) Office Club (Thai) Co., Ltd. has a registered capital and the paid up capital of Baht 691,550,000. It is the retail and wholesale distributor of office stationary and furniture. - Office Supply Club Co., Ltd. has a registered capital and the paid up capital of has Baht 200,000,000. All of its assets have already been transferred to Office Club (Thai) Co., Ltd. There is only its rental area business remained from the former rental contract. 2) B2S Co., Ltd. has a registered capital and the paid up capital of Baht 640,000,000. It is the distributor shop of stationary, books, media entertainment, music, movies, and office stationary.
Product and Service Office stationeries and furniture The distribution of office stationaries and furniture via the three distribution channels, namely 1) Catalog system 2) shops i.e. Office Depot and B2S, totaling 45 branches and 89 branches, respectively and 3) online via www.officemate.co.th and OfficeMate e-Procurement, the corporate procurement system. The products can be categorized as follows: 1. Computer Supplies 2. Writing and Correction 3. Office Stationery 4. Glue, Tape and Packing 5. Paper, Pad and Envelope 6. Filing and Storage 7. Conference and Presentation 8. Office Electronics 9. Factory and Maintenance 10. Canteen and Cleaning 11. Office Furniture Edutainment and Everyday Life Products The Company’s business operation is concerned with the edutainment through the distribution of music, books, and e-Book via 89 branches B2S shops and the e-Commerce system of the Company. The products consist of Music, Movie&DVD, Book, and e-Book, and the distribution of the miscellenous products for everyday use through www.trendyday.com and 89 branches of B2S and the 2 trendyday.com shops. There are a number of the products to serve the life style of the present customers such as cell phone, camera, gadget, Gift Shop, Fashion, Health & Beauty, Mother and Child, Toy, sport, electrical appliance, kitchemware, home and décor, Automotive, Pet Shop, cleaning product, food and beverage, computer games, daily consumption products, and card and wrapping.
Product Distribution The Company’s products are distributed through the following channels: 1. Catalog system 1.1 Order via the Call Center system through the telemarketing staff to receive the order of more than 300 lines, divided into 2 groups:
-
OfficeMate Contact Center: 02-739-5555 Trendyday Contact Center: 02-730-7777
1.2 Fax Ordering: 24-hour order system via OfficeMate Fax Ordering: 02-763-5555 and the telemarketing staff will call back for order confirmation 2. Store 2.1 OfficeMate Shop: there are 45 branches which consist of the branches in Central Department Store, Robinson Department Store, BigC, leading department stores, and stand alone shops across the country. 2.2 B2S shop: there are 890 branches which consist of the branches in Central Department Store, Robinson Department Store, BigC, Tops Supermarket, and stand alone shops across the country. 2.3 Trendyday.com shop: In 2012, there was the opening of the Trendyday.com shop which is the online retail and wholesale shop. It was the first shop in Thailand to use the E-Tailing system. There are 2 branches at Mega Bangna and Gateway Ekamai. 3. Online 3.1 Websites: www.officemate.co.th , www.b2s.co.th , www.trendyday.com The websites focus on the Business to Business (B2B) group for ordering of the office stationary. The customers can register and order every category of the products which are on the catalog system. The websites are developed to be in line with the marketing plan. They are user friendly and modern. They are ready to provide standardized services which are the same as ordering from the Company. 3.2 e-Procurement It is the development process of the e-procurement which is particularly designed as demanded by the corporate customers by completely connecting with the e-procurement system of the Company. In addition, the sales media is increasingly important to the introduction of the Company and its products to the Company’s customers and the people in general for acknowledgement. The printing materials for the Company’s distribution as follows: 1. Yearly Catalog 2. Monthly Catalog
3. 4. 5. 6.
Printed media, leaflets Magazine, newspaper Website Telephone Others such as online media, SEO, etc.
Delivery The Company invested in the new warehouse with excellent management to facilate the inventory management and orders more 5,000 companies a day, introducing 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 Company’s troop of vehicles and reliable outsources 2. Within 3-7 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: Separate Finanical Statement
Consolidate Financial Statement
Revenue 2009 Income from Sales - Store(branches) - Call Center (telemarketing) - Online (website, e-procurement) Income from advertising
Million Baht
2010 %
Million Baht
2011 %
Million Baht
2011
2012 %
Million Baht
%
Million Baht
2012 %
Million Baht
%
-
-
-
-
-
-
12
0.7
5,470
89.5
6,350
88.5
871.16
95.30
1,045.23
95.84
1,219.38
95.75
1,613
95.2
277
4.5
329
4.6
-
-
-
-
-
-
-
-
1
0.0
5
0.1
36.71
4.00
37.77
3.46
43.24
3.40
52
3.1
203
3.3
260
3.6
Other income
6.28
0.70
7.65
0.70
10.84
0.85
17
1.0
162
2.7
233
3.2
Total revenue
914.16
100.0
1,090.65
100.0
1,273.47
100.0
1,694
100.0
6,113
100.0
7,177
100.0
The Goal of the Business With its being ready for providing the service of the distance trade and the shop distribution systems, the Company has a goal to be the leading office stationary retailer through the distance trade business and the new businesses as follows:
(1) To be the leader of the office stationary retailer in the form of the Business to Business (B2B) through the catalog system, and e-Procurement, including the Company’s website by focusing on the efficient corporate customers. (2) To increase the market shares in the e-Procurement business for the government and private organizations under the service standard of delivery within the next official day. (3) To be the leader in the retail online business by focusing on the personal use customers with the plan to increase the product volume which leads to variety of the products to serve the modern lifestyle and to focus on providing beneficial information for making decision under the convenient and safe ordering process with fast delivery across the country. (4) To be the leader in office stationary shop with branches across the country with expertise in product procurement process and distribution and product variety to serve the demand of the present consumers. There is a plan to increase the numbers of branches covering areas in Thailand in order to access the individual customers which are in all regions of Thailand.
Significant Development The summarize of significant development of the Company is as follows; Year 1994
1999-2008
2008
2009
2010 2011
2012
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. - 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 - 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 capital of Baht 56 million - Launched website named www.trendyday.com to meet the individual customers (Personal Use) 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 - Listed the Company’s shares register in Market for Alternative Investment (mai) registered capital of Baht 80 million and paid-up capital of Baht 80 million - Installed Multi Call Center system for increasing sales’capabilities - Launched “Web-Chat” service to provide the product details and answer the questions to customers everyday - Expanded the Call center branches and increase the manpower of Telemarketing agents - Open 2 stores of trendyday.com at Mega Bangna and Ekamai Gateway - Expanded the sales channels: Mobile Application and Internet TV Application by Samsung - Listed the Company’s shares register in The Stock Exchange of Thailand (SET) with registered capital of Baht 320 million and paid-up capital of Baht 320 million
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 B2S, which currently they are subsidiaried to the Company. - 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. Although there are competitors in the business of education and entertainment and potential to be growth inclusing the supporting policy from the government to promote 2009-2018 as “the decade of reading�, e-reading plays important rold in the current society and the change of customer behavior, the Company do research and development in bilingual e-Book.
Marketing Strategy In order to compete with other competitors, the Company set up the marketing strategies as follows: 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 be center of stationery and office supply and lifestyle category store through new Officemate (Office Depot) stores and B2S stores in the leading malls nationwide. Besides,
to gain more target groups, the Company analyzes and studies the customer behaviors trhough “the 1-card” member in order to match the sales promotion and increase the continuous purchase. 3. To be the stock provider on customer’s needs for their efficiency space and cost of stationery and office supply including regulary and everyday living product. 4. To source a variety of product in domestic and oversea market to meet the target customers’ taste, and need by the Company’s outsourcing team negotitation with the manufacturer or distributor. 5. 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 6. 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 7. 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 8. 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. 9. 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. 10. 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. (1) OfficeMate Contact Center that served by our staffs for information and Q&A. (2) OfficeMate Live Chart that services for ordering information, recommendation from chatting with our staff via the Company website. (3) Guarantee: 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. (4) Primary Maintenance Service Center
Risk Factors and Risk Management Risk factors in business operation of the Company can be summarized as follows: Risk from the change of brand Office Club (Thai) Co., Ltd., which previously under brand “Office Depot” terminated the license of “Office Depot” to use brand “OfficeMate” after the business combination in December 2012, the brand awareness may be affected. Thus, to reduce the risk and affect may be caused by the change of brand, the Company planed the strategies of advertising and public relations to promote “OfficeMate” and communicate with existing customers. 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 compete with us. Different characteristics of enterprisers such as retail shops, modern traders, direct sales and catalog sales, create the different forms of competitions. However, not only enhanced the capabilities of sales channels, a variety of product, customers after the business combination with Office Club (Thai) Co., Ltd. and B2S Co., Ltd, but also we can minimize cost of procurement and maximize our business potential. 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 the business combination, Chirathivat family, a major shareholder hold shares in aggregate of approximately 75% 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 Chirathivat
family has an interest in accordance with the definition of the Stock Exchange of Thailand. However, a group of major shareholders are the group of Thialand leading retailer and 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, the 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 2013, Chirathivat Ounjai family and Ounjai family distributed their shareholding to other shareholders that gave the Company the business opportunities and the investment.
Risk Management The Company foresees the importance of a risk management of the organization as a whole. The Company has established a Risk Management 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.
OFM and Sustainable Development The Company Board of Directors is firmly determined to develop the Organization for sustainable growth; to become a transparent Organization and to have a true corporate governance, responsibility and maintain the benefits of the stakehol ders and society in the overall, develop personnel to become good people with righteousness, promote knowledge and quality of life along with the environmental development and the better environment with the framework on the making of Report which is internationally acceptable, as follows:
n G oo d C o rp o ra te G o v e rn a nc e The Company Board of Directors maps out the Corporate Governance Policy as main Missions of the Organization Strategy to all levels of employees throughout the Organization to have knowledge, understanding, consciousness in performing their duties with self-responsibilities and social rsponsibilities, including due care with honest to themselves and others. In 2012, the Company developed the Company’s CF as follows: 1. Join with the Stock Exchange of Thailand to arrange the workshop on “Good Governance 2012”. 2. Join with the Stock Exchange of Thailand to arrange the workshop on “SET IR’s Advising Program 2012”. 3. Participate in the Collective Action Coalition of Thai private sector in fighting against corruption by holding the Company seminar “Against Corruption Crisis 2012” 4. The Company’s Chief Executive Officer elected to be committee of the against corruption organization in order to develop the moral and ethics knowledge and coordinate and support the organization network of moral and ethics development for the better qualityof citizen in moral and ethics as well as balancing social development. 5. Update “CG Handbook” and good practice of Directors, management, employees, and public via the Company’s website at http://www.officemate.co.th, “Investor Relations” under “Disclosure Document” 6. Update “Code of Conduct and Business Ethics” and included the content to the orientation 7. To arrange “CG Refreshment” workshop to the management and employee to update CG criteria. 8. To make “Directors’ handbook” and “Guidlines for directors”, and others supporting document to new directors including providing the directors’courses.
9. Corporate Governance Awards: 9.1 “Oustanding CG Scoring” (4 star) from the Thai Institutes of Directors 9.2 “Oustanding AGM Assessment 2012” from Thai Investors Association In 2012, the Company had performed with the Handbook 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 Module 2 Module 3 Module 4 Module 5
Rights of the shareholders Equality treatment toward the shareholders Roles of the stakeholders Disclosure of information and transparency 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: 1. 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, e-Mail, 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) 2. 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” 3. 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. 4. 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. 5. The shareholders’ meeting are arranged in the location nearby the head office of the Company where is convenient to access by airport link, public bus, including facilitated by the staff and technology to documentary registration, vote counting, and stamp duty to the shareholders. 6. The Company’s Directors, management, financial advisory, lawyer, auditor, related parties to answer the questions in the shareholders’ meeting and recording to the minutes.
7. To provide convenience to the shareholders who attend the 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. 8. The Company manage appropriate time in the shareholders’ Meeting in order to prodive an opportunity to shareholders to give their opinions and ask the questions which were recorded to the minutes of the shareholders’ Meeting. 9. 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. 10. The shareholders are provided an opportunity to consider the Company’s Directors’ remuneration every year. 11. The Company Directors’ shareholdings are not exceeding 25% of shares issued together. 12. The Company shall not add any additional agenda or change any important information without informing the shareholders in advance in the Annual Meeting, and prodive an opportunity to shareholders to give their opinions and ask the questions which were recorded to the minutes of the shareholders’ meeting.
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: 1. 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. 2. 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). 3. The shareholders receive the right to vote with one share per one vote. 4. 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. 5. In 2012, the Company arranged 2 sharegolders’ meetings: the Annual General Meeting 2012 in April 24, 2012 and the Extraordinary Annual General Meeting No.1/2012 in December 19, 2012. Nine Driectors in total had joined these 2 meetings, and assigned the Thailand Securities Depositories Co., Ltd which was the Company’s registrar to process on delivering invitation to shareholders 21 days prior and publicized it in both Thai and English on the Company’s website 30 days prior to the meeting for the shareholders to study, and also published of no less than 30 days for the Thai version and no less than 7 days for the English version through the Company website at http://www.officemate.co.th , the “Investor Relations� under “the information for the shareholders – the shareholders’ meeting� 6. 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. 7. No financial aids to other companies besides the subsidiaries. 8. 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 Directors, Executives are required to inform their securities transaction one day in advance before the transaction. - 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, and send the copy of those reports to the Company Secretary within 7 days in order to report to the Board of Directors.
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: 1. The handbook 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. 2. The handbook of “Code of Conduct and Business Ethics” is updated and official practiced in the Company for strict acknowledgement and practice of all Directors, Executives, and staff. The handbook places an importance upon the right of all stakeholders such as shareholders, trading partners, competitors, creditors, customers, and communities. 3. The good practice of the Good Corporate Governance is updated as guidelines for the Directors, Executives, and staff of the Company as appeared in the handbook 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. Besides, include the following topics: - Policy on Political Right, International Human Right and Non- infringement of Intellectual Property Right. - Increased notification channels for complaints and recommendations, complaints receiving process, complainant protection measures. - Prescribed the rule of “Code of Conduct and Work Practice” as the Discipline with which all Board Members, Executives and employees must strictly comply. Any violation or noncompliance shall be deemed to be a disciplinary violation against Personnel Administration Regulation. 4. 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
5. 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 http:///www.officemate.co.th, or e-Mail to ir@officemate.co.th 6. Provide the provident fund to Executives and employees. 7. No record of violating labour, onsumer, business competition, and environment. 8. No record of violating the Stock Exchange of Thailand and Securities Exchange Commission’s regulations/Stock Exchange ofThailand. 9. Support to expense resources with efficiency and worth by determining employees due with care and awareness of safety and environment including stimulates all stakeholders to develop community continuously.
Module 4: Disclosure of information and transparency The Company gives important on the presentation of significant information of the Company regarding their correct, timely and transparent manner in a various channels. In 2012, the Company’s Directors include the policies of good governance as follows: 1. To disclosure the policy of Whistle Blowing. 2. Determine and disclosure the consideration and approval of related transaction policy by the Board of Directors 3. No record of Amendment of Financial Statements ordered by the Stock Exchange of Thailand and the Securities and Exchange Commission. 4. The financial statements of the Company approved unconditionally by the auditor. 5. The Board of Directors has included the policy of Corporate Governance (“Corporate Governance” handbook) 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”. 6. 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. 7. 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.
8. The First 4 Directors and Executives after Chief Executive Officer s 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. 9. Disclosure of information and transparency: The Board of Directors has include the disclosure of important information in the Form 56-2 as follows: - The report of the Company’s status evaluation and direction which is an easy-tounderstand summary; - The report of responsibility of the Board of Directors toward the financial statement indicated with the report of the Auditors; - 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; - 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 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”. 10. 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. - Chief Executive Officer or the person who acts for Chief Executive Officer 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 to communicate can be performed through the Company’s website at 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. - Chief Executive Officer, 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 561) 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.
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 The Bord of Directors’ Structure 1. The Board of Directors consists of 9 members who are 1 Executive Director, 5 NonExecutive Directors and 3 Non-Executive Independent Directors, accounting for more than onethirds of the Board of Directors, and the chairman of the Board of Directors is Non-Executive Independent Director. The Board of Directors term is 3-year term. Name
1. 2. 3. 4. 5. 6. 7. 8. 9.
Mr. Sahas Treetipbut Mrs. Angkarat Priebjrivat Ms. Chuleeporn Piemsomboon Mr. Worawoot Ounjai Mr. Suthilaksh Chirathivat Mr. Preecha Ekkunagul Mr. Pandit Mongkolkul Mr. Nath Vongpanich Ms. Jariya Chirathivat
Type of Director
Year of Appointment
Lastest Appointment
Nomination in 2013
Next appointment
Independent Director Independent Director Independent Director Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director
2008 2008 2008 2008 2012 2012 2012 2012 2012
2011 2011 2011 2012 -
Yes Yes Yes No No No No No No
2016 2016 2016 2014 2014 2014 2015 2015 2015
2. In 2012, the Board of Directors consisted of 9 members whose terms in the positions were not limited, namely, 3 Independent Directors (2 are female), 1 Executive Director and 5 NonExecutive Directors. The numbers of the 3 Independent Directors were over one –thirds of the total Directors in the Board of Directors.
3. In 2012, 88.89% of the Board of Directors consisted are Non-Executive Director 4. The Board of Directors defined 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 (SET) 5. Indepdent Directors are independent without the authority of management and major shareholder 6. 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 SubCommittees which are appointed by the Board of Directors to perform the matter with carefulness and perpetual follow-up and examination. 7. The Board of Directors are 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; 8. 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. 9. All of the Directors live in Thailand. 10. 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. 11. No fraud or breach of ethics. 12. The resignation is not against on good governance. 13. No the infamous matters because of the failure of the Company Directors’ performance. 14. No record of violating the Stock Exchange of Thailand and the Securities and Exchange Commission’s regulations. 15. The shareholders’ meeting shall agree and approve the appointment of the Board of Directors. 16. 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 handbook of “power of operation” of the Company which is adjusted for appropriation in every year.
17. The Board of Directors appoint and determine the responsibilities of the Audit Committee, all independent directors, and disclosure the profile and qualifications of the member of Audit Committee in the annual report as follows: - Amouth of the member of the Audit Committee - Reviewed quarterly and annual financial statements - Reviewed internal control system and the internal audit - Reviewed the Company’s compliance with laws - Considered appointing the auditor and the remuneration - Prepare the Audit Committee report in the annual report - Reviewed connected transactions and information disclosure of such transactions - Summarize/opinion of the Audit Committee on the report 18. Disclosure the information of the Directors on the annual report (Form 56-2) as follows: - Disclosure the list of independent directors and the date or year of the appointment - Disclosure the amount of the meetings of the Directors, the Audit Committee - The Board of Directors prepare the report of the Board of Directors’ responsibility for financial statement 19. The position of Company Secretary has been established since 2008 after the change from company limited to public company limited. The Company Secretary, Ms. Wilawan Rerkriengkrai and Ms. Narumon Wipajaroen, accordance with Section 89/15 of Securities and Exchange Act to perform the duties: (1) To be a center point in making/keeping documents, (2) Handling Board/Committees members registrations, (3) Arranging shareholders meetings, (4) Reporting the interests of Board/Committees members as well as the Executives, (5) Holding activities between Board/Committees members and the Executives to promote better relationships among them, (6) Coordinating work to ensure the compliance with the resolution of the Board of Directors (7) Giving opinions relating to the Laws of various Notifications/Announcements, (8) Others, (as assigned by the Company Board of Directors). 20. The Board shall appoint the secretary of the Board, Ms. Wilawan Rerkriengkrai and Ms. Narumon Wipajaroen, 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. 21. To comply with the good governance, the Board of Directors determine the policy of the amount of the Directors to be in charge of the Director as follows: - Not exceeding 5 companies that the Directors to be in charge of the Director.
- Not exceeding 9-year term for the position of Independent Director (In 2012, there was no the Independent Director in the term of 9-year, so there was no the agenda of the appointment of Indepdent Director who is over 9-year term to be replaced). - Chief Executive Officer and Executives are not allowed to be Directors in other companies, except the approval of the Board of Directors. x Roles and Responsibilities: 1. 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. 2. 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. 3. 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. 4. 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 . 5. 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. 6. The Company Board of Directors has taken part in the participations with the Management in mapping out the Vision, Mission, Strategy, Goal, Business Plan and Budget of the Company by holding independent expressions on the opinions in which the Chief Executive Officer will be the person to give the explanations and the operational results to the Managing Director for the all level’s understanding.
7. The Board of Directors and the Audit Committee stipulate the policy of corporate good governance and code of conduct and business ethics and the management is required to report the progression every quarter. 8. The Board of Directors initiates, takes part, and approve the preparation and approval of the “Corporate Good Governance Handbook”, which is annually revised. 9. 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 stipulaing handbook of “Code of Conduct and Business Ethics”. The Company Secretary shall communicate to ensure their understanding and practicing of the policy and the guidelines. The handbook is annually revised. 10. 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. 11. The Board of Directors assigns the preparation of the handbook 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. 12. 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 2012, the Company hired IVL Auditing Co. Ltd. as the independent internal auditing organization which directly report to the Audit Committee. 13. 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). 14. The Board of Directors arranges the Compliance Unit under the Company Secretary’s Office to comply with laws and regulations. 15. The Board of Directors reviews the power and responsibilities of the Directors and its subsidiaries’ Directors at least once a year. 16. The Board of Directors is under the determination of the guidelines of the Directors in the topics of (1) the Retirement (2) the term of the directorship (3) the rotation of the subcommittee.
the Audit Committee
No. of Meeting Attendance the Board of Directors
Member of the Audit Committee
Chairman of the Audit Committee
Director
Name-Last Name
Chairman of the Board of Directors
x The Board of Directors’ Meeting: 1. 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. In 2012, the Board of Directors arranged 5 the Board of Directors’ meetings and 7 the Audit Committee’s meetings. 2. The Independent Directors arrange the meeting without the management quartery, and in 2012, there were 7 the meetings without the management.
2012
2012
1. Mr. Sahas Treetipbut / / 5/5 7/7 2. Mrs. Angkarat Priebjrivat / / 5/5 7/7 / / 5/5 7/7 3. Ms. Chuleeporn Piemsomboon /* 5/5 4. Mr. Worawoot Ounjai / 5. Mr. Suthilaksh Chirathivat / 6. Mr. Preecha Ekkunagul / 7. Mr. Pandit Mongkolkul / 8. Mr. Nath Vongpanich 9. Ms. Jariya Chirathivat / 10. Mr. Wichit Kitsawatpaisarn /* 5/5 /* 5/5 11. Ms. Wilawan Rerkriengkrai /* 5/5 12. Ms. Napasorn Kochasarn 13. Mrs. Pattama Wannawittayapa /* 5/5 Remark: The Company’s meeting allowance is not contributed to the Executive Directors. 1. No.5-9 are the Directors who were appointed on December 19, 2012; the Extraordinary Annual Shareholders’ Meeting 1/2012 as a result the attendance of the Board of Directors’ meeting were none before the appointment, and No.1013 are the directors, who retired before their rotation because of the requirements of business on duties,filed their retirement to the Extraordinary Annual Shareholders’ Meeting 1/2012.
3. The Board of Directors and sub-committees determine the meeting’s calendar for the year in advance. 4. The Directors of the Company have a role to attend every Board of Directors’ meeting unless there is a necessity. In 2012, 100% of the Board of Directors attended the meetings. 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.
5. The Board of Directors receives the meeting’s invitation letter and supporting document before the day of the meeting. 6. The Board of Directors determines the policy of the minimum member of Directors in the meeting that the Directors must be accounting for at least two-thirds of the Board of Directors. 7. 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. 8. 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. 9. The Directors who have conflicts of interest with any agenda shall leave the meeting and have no right to vote the agenda. x Self-evaluation 1. 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. 2. The evaluation of Chief Executive Officer s’ performance: The Executive Committee will consider and propose the opinion to the Board of Directors for consideration of the evaluation criteria for the annual performance of Chief Executive Officer. x Remuneration of Directors - 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 2012, the Executive Committee who had no 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 2011 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’ handbook 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. - The Company provides the beneficial courses to the Directors for self-development and the Company’s development such as Director Accreditation Program (DAP), etc.
o Business Operation with Fairness The Board of Directors has realized the fairness and honest in business operation and the co-benefit with the trading partners, as a result the Company complies strictly with regulators’ laws and regulations and its code of conduct of business and ethics. 1. Treating the trading partners, trading competitors, and trading creditor: The Board of Directors stipulates the handbook of “Corporate Governance” and the handbook 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: The operating guidelines (1) The Responsibility to trading partners - 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. - 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.
- To strictly perform operation following the conditions as agreed with the vendors or creditors in the joint business operation agreement. In the case that any condition cannot be followed, it must be notified to the partners/suppliers urgently in order to consider and find a way to solve problems. - 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 - Encourages the trading partners, suppliers to acknowledge the policy of fairness business operation. (2) The Responsibility to trading competitor - To strictly perform the competition under the fairness. - Not discredit the trading competitor by giving any charge. (3) The Responsibility to trading creditor - To strictly perform operation following the conditions as agreed with the creditors. - To report the financial statement of the Company honestly. - To report the creditor in advance in the case that any condition cannot be followed, it must be notified to the creditors urgently in order to consider and find a way to solve problems. 2. Treating the social and enviornment: The Company realizes the responsibility in the social and the country through the activities and organization culture and the business direction of the Company, so it aims to be established and growth in pararell with social and environment development as follows: - Access the clients and communities in the long distance by online and promotion of the necessary living product in order to reduce cost and the dangers of travel - Build the library to the schools nearby the office’s location in order to giving the learning opportunity to the students every year. The operating guidelines (1) 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 for the Corporate Social Responsibility project of OfficeMate Delivery Project – Knowledge delivery to children No. 6. (2) Specify the conditions of social and entviornmentand on purchase and sale agreement.
3. Respect for the Right in property: The Company encourages and strictly comply with the right in property, intellectual property, copyright, and moral right by stipulating the handbook of “Code of Conduct and Business Ethics”, part II “The guidelines for Corporate Good Covernance” The operating guideline: (1) Specify the policy in the handbook of “Code of Conduct and Business Ethics”, part II “The guidelines for Corporate Good Covernance” as follows: - Specify the responsibilities of all employees to protect and monitor the Company’s property by not allowing the unfair accessibility. - All employees do not disclosure the Company’s business information for those who are not on duty. - All emloyees do not support software license and intellectual property. - Any violation shall be deemed to be a disciplinary violation against Personnel Administration Regulation. (2) Promote executives, employees to use products and service with legal copyright and do not support products or action that is intellectual property right infringement 4. To relate to politics in a responsible way: The Company would operate the business with no political bias and will not participate and get involved in any political party or any people with political power and not use the fund or resource of the Company to support directly or indirectly to any political party or politicians. Executives and personnel are not allowed to use the power to manipulate, threaten and force. The operating guideline (1) To have campaign and promote personnel to have knowledge through communication channel such as the Company Public Relations notice, monthly HR newsletter, etc. (2) Open an opportunity for personnel to use political right independently without persuasion and domination 5. Anti-Corruption: The Board of Directors stipulates the handbook of “Corporate Governance”, part II , asset or any benefit“The guidelines for Corporate Good Covernance” as follows: (1) Carefully consider in receiving the presents, asset, or any benefits that may be violate the transparency practice or the country’s laws. (2) Inspect the connection and relationship between employees in every level with sellers, sub-employees, sub-contractor of the Company continuously in order to prevent unfairness and inequality in the business operation between sellers, sub-employees, each sub contractor of the Company.
(3) 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 (4) 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 send e-Mail to ir@officemate.co.th The operating guideline (1) Arrange the seminar of “Code of Conduct of Business and Ethics” to the Company’s top management to specify the transparency of business operations. (2) Give an opportunity to all stakeholders to inform any possible illegal action to the Independent Directors or the Company Secretary through e-Mail, and the policy of Whistle Blowing is disclosure in the handbook of “Code of Conduct and Business Ethics”. (3) Promote trading alliance/partners to accept and apply in similar policy in a way that does not cause unfair competition.
p 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 follows 1. The Company has a measure protect employees who inform the government illegal action or an offense to the Security and Exchange Act and will be protected. The Company cannot treat unfairly whether to change the work position, work characteristics, work place, work suspension, threat, disturb the work operation, employment discharge (section 89/2) that is from the cause notifying the clue on illegal action or ethical offense. 2. The Company has placed great importance to treat personnel fairly such as giving opportunity, remuneration, recreation, work environment, safety in work place and development of the potential along with ethics development. The operating guideline 1) Specify to have risk management from violating the laws on human right every year. 2) Specify to have internal audit department by specifying as a main process in the evaluation every year and reporting to the Board of Directors.
3) Give an opportunity to employees and stakeholders to give their comments through comment channel by sending e-Mail to the Independent Directors or the Company Secretary. 4) Provide the notification tracking to employees or stakeholders. 5) Set the providend fund to employees at all levels since July 20, 2004. 3.1 Compensation 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 Welfares and Employee Relations Activities The Company has placed the Employee Service Center (ESC) to be in charge compensation, welfare etc. ESC still have more duties about look after employee‘s life, working environment because the Company would like to make employee feel warm and great since the first day that they started to be our employee. Moreover, ESC services and sets relax room, media and magazines for staff to relax and feel happy during the working day, in addition, ESC still launch the activities such as games, team building etc., for staff to improve team working skills for better work as follows:
- Yearly Health Check Above the health insurance to employees, the Company arranges the yearly health check by coordinating with public-private hospital/medical center to provide free health check to all employees at their work places. In August 2012, Inter-Medical Center and Lab Co., Ltd. Cooperated to do health check for free to the employees. - Family Day is the project that set the traveling program for our employee and employee’s family to travel in Thailand. The Company will set many interesting travel places for staff to choose and can take their family to travel with. This project can help staff to get more chance to have special time with their family and also help staff to spend more time with their family. - Sport Day the Company concerns about the employee’s health and support our employee to work out and exercise in order to have a good health. Furthermore, the Company still
encourages the employee to play sports together in order that they can know each other and make friends during playing sports together. Playing sports can help staff learn and understand to win, to lose, to forgive and to be friends as well. - Smile D Project is the project setting for giving an advice to our staff in every problem. The employee can call to get the advice from the professionalists of our project via Hot Line Call. These can support our staff to feel more relax and not get too much stress and have good attitude towards work and life. Every problem of our staff can affect work performance so that we have to help our staff to solve the problem or give an advice to make our staff feel happier and more relax. - Happy Birthday Project The Company has the policies to celebrate the staff’s birthday by giving the presents and setting the birthday party to our staff. ESC will take responsibilities to be the facilitators to support this project for staff. - New Year Party Project is launched every year to make staff happy and enjoyable the New Year party after working the whole year and establish better relations among staff and know each other better. On another hands, ESC still takescare staff in many projects including survey work-life balance and staff satisfaction continuously in order to improve our staff life quality and improve ESC services to be better as well. 3.3 Human Resources Development The Company concerns about how to develop and improve staff capabilities and give more opportunities for staff to learn and attend classes to gain more skills. Moreover, the Company still gives an importance to improving staff’s skill to work more effectively by supporting and developing tools, projects and courses. 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 acknowledgement. The guidelines for the development of an important issue have been established into three periods as follows: 3.3.1 Development in line with corporate strategy - Level: Staff-Division Manager The Company has a tool to develop our staff which is training road map. Training road map has been designed from job description according to positions of staff as follows: - General Management Group
- Function Development Group - Business Acumen Group There are more 150 courses and training road map of each position which are covered three groups of subject. In the principle, selecting the course will be considered that staff of each position needs to pass their courses first. Our course can be used to develop working skill and increase knowledge and ability to improve customer service skill effectively and efficiently in line with the Code of Conduct such as (1) Employment: 0-5 months is to apply their knowledge (2) Employement: 3-12 months is to learn the knowledge of employees who have been working to develop their skills to become more proficient and (3) Employment: 1-5 years is to support progress to lead to a higher position in the future. - Level: Executive IDP (Individual Development Plan) is a tool to consider an executive level as an individual and determine whether an individual will need to receive training to be able to enhance the work efficiency. 3.3.2 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, which the course for at least 1-5-year employment, 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.
q 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: - A commitment on customer satisfaction and confidence to get good quality and reasonable price including the rising of standard of work and services steadily - Not discriminate against customers. It is committed to treating all customers fairly in terms of products and services - Disclose information about products and services completely, timely and without any distortion of facts including maintain good and lasting relationship with customers - Give the warranty and service in the right time - Establish a system to allow customers to complain about goods and services and process the best in order to response customers very quickly through all channels such as telephone, facsimile, email and etc. - Not profiteering by comparing the quality of goods or services in same type and not do the unfair trade to customers. - Strictly compliance with conditions to its customers. If we cannot comply with the terms or conditions, this must notify the customers in advance in order to jointly find a solution together. - Maintain the confidentiality of our customers very seriously and consistently. The information is not used for the benefit of ourselves and our stakeholders. - Prohibits the disclosure of customers’ information received from business as it is the nature of confidentiality unless the disclosure obligations under the responsibilities or laws.
r Social and Community Development With the commitment to sustainable and sufficiency growth, the social and community is the one important factor that company pays attention and supports to strengthen by cooperation and assistance as part of its commitment to the communities in the vicinity of the Company.
In addition to activities for community in the location of the Company, the Company has other activities to benefit society in many different forms that can be done as follows: 1. Annual Library Project for schools 2. Items donation for education of children 3. Other activities such as donation of money, items, stationery, teaching equipment, etc. 4. Compliance with law to be a good example for community For activities pictures in year 2012 were compiled in an annual report of 2012, as follows: z OfficeMate Delivery Project – Knowledge Delivery to Children No. 6
This activity held consecutively for a period of sixth years, aims to promote reading to children from kindergarten to primary school as well as the people who live in communities surrounding the schools. The Company will make improvements library to schools where don’t have money to repair and maintenance and books provide a useful addition to the skills learned in the classroom. Such activities provide opportunities for customers, suppliers and the general public to donate their old books and new books for children by sending the Company’s vehicles to get the books donation as requested and finally the Company also provides new addition books such as academic books, experience books and etc., to fulfill the completely library. z Programs to prevent and suppress drug abuse The Company has joined the label warnings of the penalties and dangerous of drugs in the workplace and provided the substance of the employees as required by the Act. Anti-Narcotics No. 3, year 2000 to be the good example to the community and social where is the location of the Company.
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z Donate items to create educational opportunities for children The Company continuously donated stationeries and items to foundations and private associations in order to donate to the children who are in need such as FM 103.5, Channel 3 Free T.V., and Group of Government’s Friend.
Major Shareholders List of the first 10th major shareholders as of 18 March 2013 No. Name-Surname 1. * Mr. Narongrit Chirathivat 2. * Mr. Suthitham Chirathivat 3. * Mr. Worawoot Ounjai 4.* Mr. Pichai Chirathivat 5.* Mr. Suthilaksh Chirathivat 6.* Miss Jariya Chirathivat 7.* Mr. Tos Chirathivat 8.* Thai NVDR Co., Ltd. 9.* Mr. Suthichai Chirathivat 10.* Mr. Suthikiet Chirathivat Remark: * Translation
Shares 31,299,000 28,995,000 28,241,100 28,170,000 27,945,000 27,519,000 27,420,000 4,282,701 4,179,000 4,173,000
Ratio (%) 9.78 9.06 8.83 8.80 8.73 8.60 8.57 1.34 1.31 1.30
Limited of Foreigner shareholder The foreign shareholders cannot hold shares of the Company more than 49 percent of the outstanding and paid-up shares on February 28, 2013, and they held shares of the Company for 1.01 percent.
Policy of Dividend Payment The Company has set a policy to pay a dividend payment of no less than 40 per cent of its net profit after deduction of taxes and legal reserves. However, the dividend payment is subject to change depending on an operational result, business expansion plan, liquidity, necessity and other appropriate reasons of the Company in the future. The consideration to make an annual dividend payment shall be approved by the shareholders’ meeting, except for the consideration to make an interim dividend payment. In this case, the Board of Directors has an authority to approve the interim dividend payment, provided that the Board of Directors shall report to the next meeting of shareholders for information.
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” Officemate Public Company Limited has determined the definition of “Independent Director” that 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 per cent 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; x 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; x not being a person related by blood or legal registration with the person who might be in conflict; x 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; x neither being nor used to be auditor to the Company, its controlling person, parent company, subsidiary company, affiliate company, major shareholder, and never to be strategic shareholder, controlling person or partner in the same company of auditor of the Company, its controlling person, parent company, subsidiary company, affiliate company, major shareholder, unless the foregoing relationship has ended not less than 2 years;
x neither being nor used to be any 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; x not being the Director who appointed to be the representative of the Board of the Director, major shareholder or the shareholder related to major shareholder x 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 Company’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: “Management” Officemate Public Company Limited has determined the definition of “Management” in accordance with the Notification of the Securities and Exchange Commission, No. Tor Jor 23/2551 Re: To determine the definition of Management for the compliance with Module 3/1 of the Securities and Exchange Act B.E. 2535 which additionally revised by the the Securities and Exchange (issue No.4) Act B.E. 2551 “Management” 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 “The chief or the executives who are the first four positions of the Company’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 position”
Management Structure The Company’s management structure consists of 3 Committees and 2 management committees, namely, the Board of Directors, the Audit Committee, and the Executive Committee, and the Risk Management Team, and the Mangement Team. Their responsibilities are determined clearly with the following details: 1. The Board of Directors (3-year term) The Board of Directors consists of 9 members who are 1 Executive Director, 5 NonExecutive Directors and 3 Non-Executive Independent Directors, accounting for more than onethirds of the Board of Directors, and the chairman of the Board of Directors is Non-Executive Independent Director. In 2012, the Board of Directors consisted of the members as follows: Year of Appointment 1. Mr. Sahas Treetipbut Chairman of the Board/Independent Director 2008 2008 2. Mrs. Angkarat Priebjrivat Independent Director Independent Director 3. Ms. Chuleeporn Piemsomboon 2008 Executive Director 4. Mr. Worawoot Ounjai 2008 5. Mr. Suthilaksh Chirathivat Non-Executive Director 2012 6. Mr. Preecha Ekkunagul Non-Executive Director 2012 7. Mr. Pandit Mongkolkul Non-Executive Director 2012 8. Mr. Nath Vongpanich Non-Executive Director 2012 9. Ms. Jariya Chirathivat Non-Executive Director 2012 Secretary to the Board of Directors: Ms. Wilawan Rerkriengkrai and Ms. Narumon Wipajaroen Name
Position
Authorized Directors with the Company's Seal Affixed Mr. Worawoot Ounjai, Mr. Suthilaksh Chirathivat, Mr. Preecha Ekkunagul, Mr. Pandit Mongkolkul, Mr. Nath Vongpanich, and Miss Jariya Chirathivat, two-sixth 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 1. Mrs. Angkarat Priebjrivat 2. Mr. Sahas Treetipbut 3. Ms. Chuleeporn Piemsomboon
Position Chairman of the Audit Committee Member of the Audit Committee Member of the Audit Committee
Secretary to the Audit Committee: Ms. Valdee Siboonruang 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 auditing 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 3 members, and the chairman of the Executive Committee is Non-Executive Committee, namely: Name Position 1. Mr. Preecha Ekkunakul Chairman of the Executive Committee 2. Mr. Nath Vongpanich Non-Executive Director 3. Mr. Worawoot Ounjai 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 10 members: Chief Executive Officer, 3 Managing Directors and 5 Vice Presidents, and 1 General Manager, namely: Name 1. Mr. Worawoot Ounjai 2. Ms. Wilawan Rerkriengkrai 3. Mr. Somchai Tawonrungroaj 4. Mr. Anop Boonthaweepat 5. Mr. Kosit Lekanont 6. Ms. Wiritya Maneewong 7. Mrs. Pattama Wannavittayapa 8. Ms. Napasorn Kochasan 9. Mr. Thanawat Jirangkapat 10.Mr. Tanunchai Klumdaeng
Position Chief Executive Officer Managing Director-OFM Managing Director-B2S Chief Information Officer Vice President-Operations Vice President-Sales Administration and CRM Vice President-Marketing Vice President-Logistics and Supply Chain Vice President-Product Management General Manager-Finance and Accounting
Chief Executive Officer and top executives are not allowed to be director of other companies except the Board of Directors’ permission.
Power and Duties of the Chief Executive Officer 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 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 Chief Executive Officer to approve the transaction that the Chief Executive Officer 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. Risk Management Committee The Company foresees the importance of a risk management of the organization as a whole. The Company has established a Risk Management 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. The Risk Management team consists of the following committees as follows: Name 1. Ms. Wilawan Rerkriengkrai 2. Mr. Somchai Tawonrungroaj 3. Mr. Anop Boonthaweepat 4. Mr. Kosit Lekanont 5. Ms. Wiritya Maneewong 6. Mrs. Pattama Wannavittayapa 7. Ms. Napasorn Kochasan 8. Mr. Thanawat Jirangkapat 9. Mr. Tanunchai Klumdaeng
Position Managing Director-OFM Managing Director-B2S Chief Information Officer Vice President-Operations Vice President-Sales Administration and CRM Vice President-Marketing Vice President-Logistics and Supply Chain Vice President-Product Management General Manager-Finance and Accounting
Secretary to Risk Mangement Team: Mr. Tanunchai Klumdaeng
Powers and duties of the risk management committee 1. To held a meeting to review the implementation of risk management system with reporting to the Executive committee or the Board of Directors. 2. To determine the direction of management, the risk management strategy and the risks acceptable for review and approval. 3. Toevaluate, advice and approve the principles of planing for risk management of the organization and adequate control measures.
4. To supervision of the other sections in the formulation and implementation of risk management plan. 5. To responsible for the preparation of risk assessment and oversight of the implemention of risk management plan in corporate risk. 6. To submit the matter to the Executive committee and the Audit Committee before the Board of Directors quarterly 7. To perform other duties assigned by the Board of Directors. 6. Company Secretary In 2012, Ms. Wilawan Rerkriengkrai and Ms. Narumon Wipajaroend act as the Company Secretary and participated in the training courses of the Thai Institue of Directors; Company Secretary Program (CSP) and Effective Minute Taking (EMT), Basic Laws and Listed Company Regulations, and Company Secretary Program by Thai Listed Companies Association (TLCA), and other training courses which are relevant to the duties such as Good Corporate 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, and not over 9 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 Directors Accreditation Program (DAP) of the Thai Institute of Directors and others course of 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’ handbook concerning good practices of the listed companies’ Directors. 2. Preparing other information concerning the Company’s business operation to the new Directors of the Company. 3. Providing the beneficial courses to the Directors for self-development and the Company’s development. 4. Introducing New Directors to the Company’s top management by holding the extra meeting.
Remuneration of Directors and Managements The director remuneration policy has been clearly and transparently established by the Board of Directors. The Executive Committee, who has no conflicts of interest in the Directors’ remuneration, empowered by the Board of Directors to providing the neutral with information taking into consideration which is comparison with other listed companies in the similar industry, size and nature of the business, the roles and responsibilities of the Company’s board of director, including the remuneration of directors and executives of listed companies by the Stock Exchange of Thailand (SET). The final policy will then be proposed to the Board of Directors for consideration before presenting to the shareholders meeting for consideration and approval. However, after the business combination causing the business activity expansions and the directors has more responsibilities and duties in compliance with good governance, the Company has been in the study of the Nomitation and Compensation Committee to comply with the best practice of good governance.
The remuneration of directors’ policy and payment criteria The remunerations of directors determined by the Board of Directors comprise 1) meeting allowance 2) Bonus and 3) other remunertions to the tasks, responsibilities and performance of directors being beneficial to the Company, compared to other companies of comparable size and nature of business. Directors will receive remuneration commensurate with more duties and responsibilities assigned.
The remuneration of management policy and payment criteria The Executive Commitee will consider and review the President’s remuneration and management for appropriately fixed based on the remuneration structure of the Company and compared to the performance and consistency with the duties and responsibilities assigned including in the similar industry .
1. Remuneration in Cash 1) Directors The resolution of the Annual General Meeting of Shareholders No. 1/2012 on April 24, 2012, had approved the remuneration of the Board in the forms of meeting allowance, reward,
bonus, or other remunerations for 2012 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: Position Chairman of the Board of Directors Chairman of the Audit Committee Non-Executive Directors Members of the Audit Committee
Meeting Allowance/Time (Baht) 24,000 18,000
2012 Company’s remuneration to the Directors
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
2012
Bonus (Baht)
2012
the Audit Committee
the Audit Committee
2012
No. of meeting Attendance the Board of Directors
the Board of Directors
Member of the Audit Committee
Chairman of the Audit Committee
Director
Name-Last Name
Chairman of the Board of Directors
Meeting Allowance (Baht)
2012
2012
Mr. Sahas Treetipbut / / 118,000 124,000 50,400 5/5 7/7 Mrs. Angkarat Priebjrivat / 88,000 166,000 50,400 5/5 7/7 / Ms. Chuleeporn Piemsomboon 88,000 124,000 43,200 5/5 / / 7/7 Mr. Worawoot Ounjai 5/5 /* Mr. Suthilaksh Chirathivat / Mr. Preecha Ekkunagul / Mr. Pandit Mongkolkul / Mr. Nath Vongpanich / Ms. Jariya Chirathivat / Mr. Wichit Kitsawatpaisarn /* 5/5 Ms. Wilawan Rerkriengkrai 5/5 /* Ms. Napasorn Kochasarn 5/5 /* Mrs. Pattama Wannawittayapa 5/5 /* Total Allowance (Baht) 852,000 Remark: The Company’s Meeting allowance is not contributed to the Executive Director. 2. No.5-9 are the Directors who were appointed on December 19, 2012; the Extraordinary Annual Shareholders’ Meeting 1/2012 as a result the attendance of the Board of Directors’ meeting were none before the appointment, and No.10-13 are the directors, who retired before rotation because of the requirements of business on duties,filed their retirement to the Extraordinary Annual Shareholders’ Meeting 1/2012.
2) Managements In 2012, the Company’s remuneration paid to the management is as follows: 2012
2011
Remuneration Monthly salary Bonus Total
No. of Management 7 7 7
Million (Baht) 10.90 1.47 12.37
No. of Management 7 7 7
Million (Baht) 10.51 1.63 12.14
*Management as of December 31, 2012
2. Other Remunerations In 2012, the Company’s Contribution to the Providend Fund 2012 and the Social Security Fund 2012 to the management are as follows: 2012 Remuneration Contribution to the Providend Fund Contribution to the Social Security Fund
No. of Management 7 7
2011 (Baht) 526,845.00 63,000.00
No. of Management 7 7
(Baht) 501,720.00 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 2012, the change of shareholding of the Board of Directors and management are 18 persons as follows: x No.1-3: Independent Director x No.4: Executive Director x No.5-9: Non-ExecutiveDirector x No. 10-18 Management as of January 1, 2013 (No. 10, 12, 15-16 were former directors in 2012) Shareholding of the Board of Directors and Managements Officemate Public Company Limited
Ordinary Shares
% Change in 2012 to As of 18 march 2013 18 March 2013 1. Mr. Sahas Treetipbut 0 0 0.00 2. Mrs. Angkarat Priebjrivat 0 0 0.00 3. Ms. Chuleeporn Piemsomboon 0 0 0.00 Mr. Worawoot Ounjai (10,646,000) 28,241,100 8.825 4. Spouse and child 0 6,000,000 1.875 5. Mr. Suthilaksh Chirathivat 0 27,945,000 8.733 6. Ms. Jariya Chirathivat 0 27,519,000 8.600 7. Mr. Pandit Mongkolkul 0 0 0.00 8. Mr. Preecha Ekkunagul 0 0 0.00 9. Mr. Nath Vongpanich 0 0 0.00 10. Ms. Wilawan Rerkriengkrai 0 400,000 0.125 11. Mr. Somchai Tawonrungroaj 0 0 0.00 12. Mr. Anop Boonthaweepat 0 240,500 0.075 13. Mr. Kosit Lekanont 0 0 0.00 14. Ms. Wiritya Maneewong 0 0 0.00 15. Mrs. Pattama Wannavittayapa (70,000) 351,000 0.109 16 Ms. Napasorn Kochasan (110,000) 221,000 0.069 17. Mr. Thanawat Jirangkapat 0 0 0.00 18. Mr. Tanunchai Klumdaeng 0 0 0.00 The definition of “Management� in accordance with the Notification of the Securities and Exchange Commission, No. Tor Jor 23/2551 Re: To determine the definition of Management for the compliance with Module 3/1 of the Securities and Exchange Act B.E. 2535 which additionally revised by the the Securities and Exchange (issue No.4) Act B.E. 2551 No.
Name-Last Name
Internal Control The Board of Directors’ meeting 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. x Preparing the handbook 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 handbook places an importance upon the right of all stakeholders such as shareholders, trading partners, competitors, creditors, customers, and communities. x Preparing the handbook 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.
x 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. x 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. x Report and follow-up risk management plans were discussed in the Executive Committee meeting monthly and the Audit Committee meeting quarterly. x 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 handbook of the power of operation. x Clearly stipulated the duties and responsibilities with the following details: (1) Approval (2) Accounting and information entering (3) Asset control x 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 Directors’ meeting and/or shareholders’ 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 2012, there is no related transaction. x 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.
x In 2012, the Company has no associated company or the subsidiaries, so there is no any investment. x 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 Company’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. x Secretary of the Board of Directors shall record important information at the meeting and prepare meeting report which contains complete information. x 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. x The Company keeps the accounting document in categories and it has never been reported to be penalty. x The Company keeps the Company’s document organizingly which the Directors, the auditor, the internal audit and the legal authorizer are able to access them easily. x 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. x The Executive Committees hold the meeting monthky to evaluate the, consider and approve the Company’s operation which will be reported to the Audit Committee and the Board of Directors quarterly. x 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.
x 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. x In case of emergency, the internal audit will alert the Management to seek the solutions and follow-up process shall be started. x 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.
Internal Control of the Subsidiaries Office Club (Thai) Co., Ltd., (formerly owner of license “Office Depot�) and B2S Co., Ltd. (B2S) have the examination system of the internal control system under the supervision of the internal audit department of Central Retail Corporation Co., Ltd. which is responsible for ensuring the sufficiency and the appropriateness of the internal control system of Office Club (Thai) Co., Ltd., (formerly known“Office Depot� in 2012) and B2S Co., Ltd. (“B2S�). 1) Organizational Control and Environment Measure x Office Club (Thai) and B2S have clearly stipulated the business operation targets with the annual target in the form of business plan and the use of the budgeting system as tools for operation control. x The operational targets of Office Club (Thai) and B2S are clear and can be measured. They are carefully operated with the consideration of the possibility of the stipulated targets as well as the analysis of the motivation and reasonable remuneration to the staff. The remuneration in the form of monthly salary, bonus, and motivated remuneration in the long run are in accordance with the operating results and the performance of the staff of Office Club (Thai) and B2S which are under the rules and regulations of Office Club (Thai) and B2S. x Office Club (Thai) and B2S have the corporate structure and the operational guideline in the written forms. The management structure consists of Chief Executive Officer, the highest management position, who appropriately disseminates the roles and responsibility to executives of each department and helps the management to perform with efficiency and can be examined and measured. x Office Club (Thai) and B2S have prepared the handbook of the “ethic� in the written form which is announced for the official use. The handbook indicates the regulations on the
ethic and disciplines for all levels staff of Office Club (Thai) and B2S to follow and to refrain from any action which may cause the conflicts of interest with the Companies. x Office Club (Thai) and B2S have stipulated the policy of the operation discipline and handbook of operational power in written form to prevent any corruption and misuse of the assets of Office Club (Thai) and B2S. The policy is annually updated. x Office Club (Thai) and B2S perform business within the scope of ethic with the realization of the fairness to the trading partners or the related parties. In addition, Office Club (Thai) and B2S have an honest work management and operate its business under the consumer protection law. 2) Risk Management Measure x Office Club (Thai) and B2S are under the appointment of the Risk Management Committee and preparation of the risk management plan for risk management operation of Office Club (Thai) and B2S. x The working team of the risk management will quarterly present the risk management plan to the executive meeting to acknowledge the problem and analyze the cause of the problem, including stipulating the risk decrease guideline prior to presenting to the Executive Committee. x Office Club (Thai) and B2S have stipulated the quarterly report and monitoring of the risk management plan at the meeting of the Executive Committee. x After the executive meeting in each quarter, the executives of each department shall inform their subordinates at the level of the supervisor for acknowledgement and supervision their subordinates to follow the stipulated the risk management measures. x The Risk Management working team is to revise the risk in every quarter and monitor other related departments to solve the problem in order to decrease the risk and quarterly report the results to the Executive Committee for acknowledgement. 3) Management Control Activities x Office Club (Thai) and B2S have clearly stipulated the scope of power, roles and approved financial amount of the management in each level in written form. x Office Club (Thai) and B2S have clearly separated the roles and responsibility of the 3 types of work which can be examined with clear operational discipline. x Office Club (Thai) and B2S have stipulated the process and procedure of the approval of the transaction with the major shareholders, directors, executives, or the related persons
x
x
x
x
of the said persons of Office Club (Thai) and B2S as if it is the transaction with the outsiders. The directors of Office Club (Thai) and B2S with no conflicts of interest with the transaction shall consider and approve the said transaction with the realization of the utmost benefit of the Office Club (Thai) and B2S. The transaction shall be considered as the transaction with other people in general. The aforementioned measure shall cover the related persons’ taking an opportunity or benefit of Office Club (Thai) and B2S for their own benefit. When the transaction with the related persons is approved in the form of long-term commitment with Office Club (Thai) and B2S, Office Club (Thai) and B2S shall ensure the following of the agreed condition throughout the contract period with Office Club (Thai) and B2S When Office Club (Thai) and B2S financially invest in a subsidiary or an affiliated company of Office Club (Thai) and/ or B2S, Office Club (Thai) and B2S shall consistently supervise the operation of the subsidiary or the affiliated company as well as stipulate the direction to the person appointed by Office Club (Thai) and B2S to be in the position of the director or the executive to follow. Office Club (Thai) and B2S have stipulated the executive of the organization to supervise the compliance of the related laws and the Audit Department to review the operation of Office Club (Thai) and B2S. In addition, Office Club (Thai) and B2S have the legal advisors who help with the revision of contracts to ensure the compliance with the related laws and provide the consult of the related laws. Office Club (Thai) and B2S have the measures to prevent against any illegal action.
4) Information and Communication Measure x Office Club (Thai) and B2S send the meeting invitation letter or the attached document to the Board of Directors of Office Club (Thai) and B2S for consideration of the necessary and sufficient information for their decision of policy stipulation or approval of transaction prior to the meeting date which is in accordance with the Company’s regulations. x In each meeting, there will be a minutes of the meeting on the consideration of the approval or the opinion of the Board of Directors which will be carefully kept in orders and easy for searching. x Office Club (Thai) and B2S have the document storage system which can be accessed by the directors, the auditors, the internal auditors, and the legal authorized persons. x Office Club (Thai) and B2S have prepared the financial statements following the accounting standard under the Accounting Professional Act B.E. 2547 with KPMG
Phumchai Auditing Co., Ltd., the auditor who receives the approval from the Securities and Exchange Commission to be the auditor and to provide the opinion toward the financial statements of 2012. 5) The Monitoring System x Office Club (Thai) and B2S shall hold the executive meeting twice a month to assess the operating results, revise the business operation target, and change policies to be in accordance with the present situation. The operating results shall be reported to the Board of Directors of their companies once a quarter for acknowledgement. x When the operating results are different from the stipulated business operation target, Office Club (Thai) and B2S shall hold executive meeting of each department to find cause of the different results and immediately find the solution to the problem. The progress of the solution shall be reported to the next executive meeting. x Office Club (Thai) and B2S have the internal audit department of Central Retail Corporation Co., Ltd., to examine the operation of each department to endure the compliance with the stipulated internal control system and consistently report the results, suggestion, and improvement guidelines to the Chief Executive Officer as well as report to their Board of Directors. x Office Club (Thai) and B2S have stipulated the report of the examination results to the board of Directors of their companies direct in order to facilitate the independency of the internal auditor and provide the report with directness. x Office Club (Thai) and B2S stipulate that the internal auditor shall provide report to the Board of Directors of their companies at least once a quarter or when there is an unusual situation, the report must be specially proposed for urgent action. x Office Club (Thai) and B2S stipulate that the internal auditor consistently report the progress of the deficiency improvement to Chief Executive Officer of Office Club (Thai) and B2S and the Board of Directors of their companies. x Office Club (Thai) and B2S have the policy that the management shall immediately report to their Board of Directors upon any corruption or suspected misbehavior, or illegal action, or any other wrong doings which may significantly affect the reputation and financial status of Office Club (Thai) and B2S.
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) Chief Executive Officer is responsible for the disclosure of information. (2) The units related to the information such as finance department, the investor relations who are assigned by the Chief Executive Officer 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: Chief Executive Officer, 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.
- Event and other periods: Chief Executive Officer , 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 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 The Company and its subsidiaries, namely, B2S and Office Club (Thai) with their main business as the distributors of stationary, office stationary, edutainment products, and many other product and other related businesses which support the Company’s main business, have been successfully throughout the business operation period, particularly the subsidiaries. The success of the two subsidiaries came from their being the part of the business line of the Chirathivat Group, the more-more-than-60-year leader in the retail business and many other businesses such as the department store, hotel, restaurant, and retail with various types of products of more than hundred brands and products. In addition, the two subsidiaries also hire the areas within the department stores of the Chirathivat Group to operate their businesses. At present, the Chirathivat Group is also the trading partner of the Company and the two subsidiaries, helping the increase of the variation of the products and negotiation power with other trading partners. The aforementioned relationship between the Company and its two subsidiaries and the Chirathivat Group, who are the connected person with the Company due to the Group’s being the major shareholder of Pranporn, who is the connected person with Mr. Suthiluck Chirathivat and Miss Jariya Chirathivat, who are proposed to be in the position of Directors of the Company under the condition of the business transferring of Pranporn. This is the strength of the business operation of the Company and its subsidiaries. However, the Company’s Board of Directors and the Audit Committee have supervised the transaction between the Company and its subsidiaries and the Chirathivat Group to be incompliance with the related laws and regulations. The Board of Directors of the Company has clearly stipulated the connected business operation and considered the price and conditions in order to follow the normal trading of the business, as well as concluded the related transactions to the Audit Committee for acknowledgement, including the approval of the transactions and the complete disclosure which follows the regulations stipulated by the SEC and the SET. The Company has disclosed the details of the connected transaction of the Company and/or its subsidiaries with a person with possible conflicts of interest with the Company and/or its subsidiaries after the merging of the business in the Financial Statements 2011 and 2012 of each company. Most of the transactions are the transactions between the Company and / or its subsidiaries with the companies within the Chirathivat Group of which the details are as follows:
Necessity and the reasons of the transactions Revenue - Revenue from sale of products
It is the revenue from sales of goods, particularly, the office stationary products of Office Club (Thai) to the connected company which is the normal trading transaction of the business with general trading condition of which the price follows the market price and shall not be lower than the cost of the products. - Revenue from rental and It is the revenue from the rental and services fees of the office area, event service area, and sales promotion area to the connected services fees company which is the normal trading transaction of the business with general trading condition. The return from the service is at the fixed rate. - Revenue from sales The revenue from sales promotion fee, as mutually agreed with the promotion fee connected companies, consists of the rebate and the points redeeming of The 1 Card, the member card of an affiliated company of the Chirathivat Group, for the product purchasing in place of the cash. The collection fee is at the agreed rate following the actual cost or expense, including other related expenses. - Revenue from utility fee It is the revenue collected from the telephone fee from the joint company which follows the mutual agreement with the connected company in reference with the market price. - Revenue from the management
It is the revenue from the marketing and finance management to the connected company which follows the mutual agreement stated in the contract of which is at the fixed rate and/or the cost of the actual expense and the profit.
Product Purchase Transaction The products purchased from the connected company are the popular brands and the Company is the only distributor of the products. The policy of the product purchase is the same policy used with general trading partners through the negotiation to achieve the highest gross profit margin. In addition, the purchased products must be the products on the shelf in the market or about to
be on the shelf in the market in the future and can compete with the competitors’ stores. Expenses - Expense of rental and services fees
- Expense for sales promotion
- Expense of utility fee
It is the payment to the rental and services fees of the areas within the department stores of the connected person with general condition that stipulates the price in percentage of the sales volume and at the fixed rate in referring to the market price and/ or the cost of the acquisition, including other related expenses which is fair and reasonable. It’s the expense for the points redeeming of The 1 Card and Advertising signs in department stores as stated in the mutual agreement with the connected company.
It is the expense for the utility following the area rental and services contract which is the mutual agreement with the connected company. The expense is paid as occur. - Expense of the It is the expense of the management of warehouse, accounting and management finance, human resources, business development, legal work, and tax which are operated by the connected company. Since the Company within the Chirathivat Group has a policy of centralization and they are the expertise in the management work, this helps save the expense and increase the efficiency of the Company’s operation of the management. The collection rate for the aforementioned management is as the mutual agreement in the contract which is the percentage of the products’ value and/or the actual cost and the profit. - Expense of the computer It is the expense concerning the computer operated by the connected company which is collected at the rate following the mutual agreement in the contract and/or the actual cost and the profit. - Copyright fee It is the fee for the use of the brand seal of “B2S” collected by the connected company as the owner of the copyright. The expense is collected at the rate following the mutual agreement in the contract in proportion of the sales volume and/or the revenue.
Accounts receivable and other receivables. The Company has accounts receivable and other receivables as in the normal business by providing the trading credit to the connected company as it does to general trading partners. Accounts Payable and other Payables The Company has accounts payable and other payables as in the normal business by receiving the trading credit from the connected company as other account receivables do. Receiving/ Offering financial assistance - Loan/ lending between It is the existing loan and lending between the subsidiaries and the subsidiaries and connected company of which the Chirathivat Group is the major connected company shareholder and/or with the mutual directors. The reference is made on the minimum interest rate of the loan and the reduction of the spread of the discount at 2.5% per year or on the interest rate of the saving account or the fixed deposit of a local financial institution. However, it depends on the cost of each company. The loan and the lending were paid and received the payment of the complete amount of the principle and the interest in October 2012. Connected assets purchasing transaction - Stock trading and loan of B2S, a subsidiary, sold all of its shares in Central Page One Central Page One (Thailand) Co., Ltd. (Central Page One), accounting for 50.10% to a (Thailand) Co., Ltd., to a company within the Chirathivat Group at Baht 0.01 per share, company within the totaling Baht 10,020 which is equivalent to the book value of Baht 0 Chirathivat Group on the purchasing date. In addition, it also sold the short term loan and the long term loan, including the accrued interest of which B2S provided to Central Page One and Page One the Book Shop Co., Ltd. at the total amount of Baht 3 million and Baht 9 million, respectively. The transactions were made in accordance with the book value and were completed on November 16, 2012.
Measures or procedures of the approval of connected transactions When the Company enters the connected transaction with a person of possible conflicts of interest with the Company, the Audit Committee shall consider the reasonability of the transaction by following the related regulations of the SET and/or the SEC Office and/or the accounting standard of the Federation of Accounting Professions. Then, the Audit Committee will propose the results of the consideration to the Board of Directors and/or the shareholders for consideration the transaction as appropriated. However, the Director or the shareholder with the conflicts of interest shall not attend the consideration and the approval of the transaction.
Policy or future trends of transactions Since the entering of the transaction with the connected persons with the Company is necessary to the Company’s normal business operation, the Company and its subsidiaries will continue the transactions in the future. However, the Company places an importance upon the strict compliance with the provisions of the law and to ensure that the scope of the transaction is based on various criteria in the transaction in comply with the regulations of the SET and the SEC. The Company also followed the principles and policy of the price stipulation of the connected transaction in the previous year.
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 2012 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 2012 Annual report. The financial statement as of 31 December 2012 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, 2012.
(Mr. Sahas Treetipbut) Chairman of the Board
(Mr. Worawoot Ounjai) Chief Executive Officer
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 the member of the Audit Committees and Ms. Valdee Siboonrueang, as a secretary to the Audit Committee. In 2012, the Audit Committee fulfilled its duties and responsibilities in accordance with the Audit Committee Charter approved by the Board of Directors. Four Audit Committee’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 2012 to propose to the Board of Directors to consider and approve by questioning and listening to the management and the auditor’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 Company’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 of such transactions to ensure the transparency and the information disclosure of connected transactions by considering auditor’s reports, information disclosed in financial statements and notes to financial statement and the explanations of the Company’s Executives. The Connected transactions have been done with the fair price and business operations. 7. Considered appointing the auditor and the remuneration for the year 2013 to propose to the Board of Directors for further approval by the Annual General Shareholders’ Meeting for the year 2013. The Audit Committee considered the performance, independency and appropriateness of remuneration and agreed to propose the appointment of Mr.Thanit Osathalert, Certified Public Accountant Registration number 5155, or Ms.Bongkot Aumsageam, Certified Public Accountant Registration number 3684, or Ms.Orawan Sirirattanawong, Certified Public Accountant Registration number 3757, from KPMG Phoomchai Audit Co., Ltd. as the Company’s auditor for the year 2013 with a remuneration of 2,240,000 Baht. 8. Good Corporate Governance The Audit Committee considered the improvement of handbook of “Good Corporate Governance� and hand book of “Conde of Conduct of Business and Ethics� including guidelines and suggestions to good corporate governance. In 2012, the Company joined the Good Corporate Governance Development 2012 with the support of the Stock Exchange of Thailand. From the evaluation of the Audit Committee in 2012, the Audit Committee had fulfilled the responsibilities of the review of quarterly and annual financial statements of 2012, internal control system, the internal audit, the Company’s compliance with laws, risk management system, connected transactions and information disclosure of such transactions, consideation of appointing the auditor and the remuneration for the year 2013, and arranged the Audit Committee’s report. The Audit Committee had performed completely their responsibilities as set out in the Audit Committee Charter and in pursuant to the Good Corporate Governance principles. 28 February 2013 On behalf of the Audit Committee (Associate Professor Dr. Angkarat Priebjrivat) Chairman of the Audit Committee
Management’s Discussion and Analysis Revenue The Company’s 2012 consolidated revenue increased from 2011 due to the Company’s aggressive strategy to gain market share and the Company’s commitment in delivering excellence service and maintaining good relationship with customers. The 2012 consolidated revenue was Baht 7,176.57 million, up from Baht 6,112.95 million, or an increase of Baht 1,063.62 million, representing 17.40% when compared with previous year. The 2012 Company’s separate revenue was Baht 1,693.97 million, up from Baht 1,273.47 million during 2011, or an increase of Baht 420.50 million, representing 33.02% when compared with previous year. Based on the Company’s consolidated financial statement, 2012 product sales and service revenue, which is the Company’s key business, were at Baht 6,684.32 million, presenting 93.14% of the total revenue. When compared to 2011 product sales and service revenue of Baht 5,747.39 million, the Company reported sales revenue growth of Baht 936.93 million or an increase of 16.30% during 2012 when compared with 2011. The sales growth was driven by expanding client base according to the marketing and sales promotion strategy as well as store expansion in both Bangkok and provinces. The 2012 Company’s separate product sales and service revenue was Baht 1,677.23 million, up from Baht 1,262.62 million during 2011, or an increase of Baht 414.61 million, representing 32.84% when compared with previous year. The Company’s product sales and service revenue is seasonal, especially the office equipment, as the revenue recognition will depend on customers’ buying characteristics. As most of the Company’s revenue is attributed to corporate customers, the working days will depend on the holiday announced by the Bank of Thailand (BOT). The Company tends to report weaker revenue when there are many public holiday in those months, such as during April or December. Moreover, the Company’s revenue could be affected by customer’s spending policy to stimulate or reduce spending in certain period of the year.
Other incomes From the consolidated financial statement, the Company reported 2012 investment income from Chirathivat Group valued Baht 27.87 million, up from Baht 27.28 million during 2011, or an increase of Baht 0.59 million, representing 2.16% increase from the previous year. The Chirathivat Group, which is now the Company’s major shareholder group, has fully repaid debt to the Company on 31 October 2012.
From the consolidated financial statement, the Company reported 2012 other income valued Baht 464.38 million, up from Baht 338.28 million, or an increase of Baht 126.10 million, representing 37.27% increase from the previous year. The improvement was mainly due to higher advertising income that grows in line with the Company’s increase in marketing activities and supplier’s financial support during the Company’s promotion campaign and new store opening. From the Company’s separate financial statement, the Company reported 2012 other incomes valued Baht 14.09 million, up from Baht 8.34 million during 2011, or an increase of Baht 5.75 million, representing 68.94% when compared with previous year.
Cost of sales / Expenses From the consolidated financial statement, the Company’s cost of sales increased along with revenue growth. The Company reported 2012 cost of sales valued Baht 5,130.82 million, up from Baht 4,433.82 million in 2011, or an increase of Baht 697 million, representing 15.72% increase from the previous year. Such cost of sales growth rate was less than the revenue growth; therefore, the Company’s cost-to-income ratio declined from 77.14% during 2011 to 76.77% during 2012. The cost ratio decline was mainly driven by selling lower cost products and development of the Company’s owned private label products. From the Company’s separate financial statement, the Company reported 2012 cost of sales valued Baht 1,257.80 million, up from Baht 954.24 million during 2011, or an increase of Baht 303.56 million, representing 31.81% when compared with previous year. From the consolidated financial statement, the Company’s 2012 selling and administrative expense valued Baht 1,649.84 million, up from Baht 1,417.41 million in 2011, or an increase of Baht 232.43 million, representing 16.39% increase from the previous year. Such increase in selling and administrative expenses was 16.39% higher than the previous year. Such increase was higher than sales and service revenue growth, due to one-off business merger expense of Baht 14.95 million and the Office Depot license termination expense of Baht 38.5 million. Should we exclude the one-off business merger expense of Baht 14.95 million and the Office Depot license termination expense of Baht 38.5 million during 2012, the Company’s 2012 selling and administrative expense would be Baht 1,596.39 million, or an increase of Baht 178.98 million, representing 12.63% increase from the previous year, which is lower than the sales and service revenue growth. Such improvement was mainly due to efficient selling and administrative expense control. From the Company’s separate financial statement, the Company reported 2012 selling and administrative expense of Baht 351.07 million, up from Baht 254.80 million during 2011, or an increase of Baht 96.27 million, representing 37.78% when compared with previous year.
From the consolidated financial statement, the Company reported 2012 other expenses valued Baht 3.96 million, down from Baht 5.64 million, or a decrease of Baht 1.68 million, representing 29.78% decline from the previous year. This other expense was comprised of financial cost that the Company repaid loan and interest payment to an affiliate of Chirathivat Group, which is now the Company’s major shareholder. Such loan was fully repaid as of 31 October 2012. From the Company’s separate financial statements, the Company reported 2012 other expenses valued Baht 25.96 million, up from Baht 0.52 million during 2011, or an increase of Baht 25.44 million, representing 4,892.31% increase from the previous year. An increase was mainly driven by merger-related expense of Baht 25.32 million during 2012.
Net profits From the consolidated financial statement, the Company reported 2012 net profits of Baht 287.14 million, up from Baht 120.91 million in 2011, or an increase of Baht 166.23 million, representing 137.48% increase from the previous year. The improvement was mainly driven by sales growth and efficient cost management, including selling and administrative expenses. If exclude the business merger-related expenses of Baht 14.95 million, the Company’s consolidated net profits would be Baht 302.09 million with a net profit growth of 149.85% when compared with previous year. From the Company’s separate financial statements, the Company reported 2012 net profits of Baht 45.53 million, down from Baht 45.97 million during 2011, or a decrease of Baht 0.44 million, representing 0.95% decrease from the previous year. The decline was mainly driven by the one-off business merger expenses. If exclude such item, the Company’s 2012 company only net profits would be Baht 70.85 million, or an increase of Baht 54.12 million when compared with previous year.
Liquidity As the Company is in a retail business, most clients are retail client and pay with cash or credit card. For the B2B business, most of the Company’s customers are financially-strong corporate customers. Therefore, the Company can collect bill relatively quickly with average collection period of 16 days. Moreover, the Company has an average inventory period of 75 days as the Company can maintain appropriate level of inventories and will only replenish stocks when the inventories fell below pre-defined level. Therefore, the inventories will not stay with the Company for a long time. The Company has good bargaining power with suppliers thus can achieve an average payable period of 100 days. All these resulted in positive net working capital as reflected in negative cash cycle days.
Financial position Total assets From the consolidated financial statements, the Company has 2011 and 2012 total assets of Baht 2,881.36 million and Baht 6,330.62 million, respectively. The Company’s consolidated operating assets, such as account receivable and inventories, have increased as business expands. The Company can manage liquidity by collecting cash or giving out discount to incentivize customers to pay quickly, coupled with more convenient payment channels. The Company also has longer payable days than the collection days. However, despite efficient working capital management, the Company’s 2012 cash and short-term investments declined to Baht 721.71 million, from Baht 1,064.48 at end-2011, or a decline of Baht 344.4 million, because the Company repaid a loan to financial institutions during the year. Total assets in the Company’s separate financial statementin 2011 and 2012 were at Baht 472.85 million and Baht 9,956.13 million. During 2012, the asset increase was driven capital rising from business merger.
Accounts receivable The Company’s accounts receivable increased in line with sales revenue. At the end of 2011 and 2012, the Company has total account receivable of Baht 205.17 million and Baht 385.63 million, respectively. Most of the Company’s account receivable are attributed to corporate, organizations or government agencies with solid financial position that can pay up the receivable when due. However, the Company has a policy to reserve allowance for doubtful account for the uncollected amount. The Company would reserve 50% receivable allowance for receivable with 91-120 days outstanding (for OfficeMate) or 180 days (for Office Depot and B2S). The Company would reserve 100% receivable allowance for receivable with more than 120 days outstanding (for OfficeMate) or 360 days (for Office Depot and B2S). In the Company’s separate financial statements, the Company’s account receivable-net increased from Baht 107.17 million at the end of 2011 to Baht 152.87 million at the end of 2012.
Inventories As of 31 December 2012, the Company has total inventories-net of Baht 1,265.89 million, up from Baht 870.75 million at the end of 2011, or an increase of Baht 395.14 million, representing 45.37% increase from the previous year. An increase in inventories was a result of an increase in sales revenue. The Company received regular orders from customers through an online ordering system. When the Company’s inventories fell below certain level, which was calculated from past
customers’ behavior, the Company can promptly replenish the stocks. Therefore, the Company can keep inventories at an appropriate level and manage inventories efficiently. However, the inventories value usually peaked during the fourth quarter due to seasonal affect that the Company must stock up its inventories towards the end of the year to accommodate surging catalog orders in early following year. In the Company’s separate financial statement of 31 December 2012, the Company reported inventories-net of Baht 160.06 million, up from Baht 131.89 million at the end of 2011, or an increase of Baht 28.17 million, representing 21.36% when compared with previous year.
Short-term loans and interest receivable to related parties As of 31 December 2012, the Company’s subsidiary has received loan repayment and interest receivable in full from Chirathivat Group, the major shareholder of the Company.
Land, properties and equipment During 2012, the Company purchased land, properties and equipment worth Baht 280.28 million as the Company expand new outlets, replace and add new office equipment such as computers and store decoration to support business expansion. The land, properties and equipment-net as of 2011 and 2012 were Baht 583.54 million and Baht 563.82 million respectively.
Liabilities The Company’s total liabilities at the end of 2011 and 2012 were Baht 1,565.43 million and Baht 2,114.82 million, respectively, or an increase of Baht 549.39 million, representing 35.09% when compared with previous year. In the Company’s separate financial statement, the Company reported total liabilities at the end of 2011 and 2012 were Baht 249.26 million and Baht 693.41 million, respectively, or an increase of Baht 444.15 million, representing 178.19% when compared with previous year. Key movements in the Company’s total liabilities are:
Trade account payable and other account payable Trade account payable accounted for 72.07 to 76.95% of total liabilities. At the end of 2011 and 2012, the Company’s trade account payable were Baht 1,152.47 million and Baht 1,719.13 million, respectively, or an increase of Baht 556.66 million, representing a 49.17% increase from the previous year. The increase was in line with sales growth. However, the Company’s trade account payable is seasonally high during the end of the year when the Company ordered more goods to accommodate products in the following year’s new catalog.
In the Company’s separate financial statement, the Company’s trade account payable at the end of 2011 and 2012 were Baht 195.04 million and Baht 262.73 million, respectively, or an increase of Baht 67.69 million, representing 34.71% when compared with previous year. Other account payable comprised of payables from asset purchase, publication fees, undue expenses, and so forth.
Short-term loans and interest payable to related parties As of 31 December 2012, the Company’s subsidiary repaid loan and any interest payable in full to Chirathivat Group, the major shareholder of the Company.
Contingent liabilities future obligations Contracts The Company signed for Call Center system contract with a company with obligation to pay after sales service fee for five years for Baht 0.86 million per year. As of 31 December 2011, the Company had obligation to pay for remaining equipment and system installation fees according to the contract worth Baht 6.22 million. Moreover, as of 31 December 2012 and 2011, the Company has signed many land, office building office equipment leases and service contracts, all of which has 1 to 5 years contract term. The Company has obligation to pay lease and service valued Baht 346.77 million in total. The two subsidiaries, Office Depot and B2S, have signed many lease contracts with domestic corporate and individuals to use as store outlet. These lease contracts have remaining lives between 3 to 25 years to 2021. As of 31 December 2012, the Company has obligation to pay lease payments according to the contracts valued Baht 315.92 million in total.
Letter of guarantee As of 31 December 2012 and 2011, the Company has obligation from having financial institute issuing letters of guarantee valued Baht 20.14 million and Baht 15.00 million, respectively. These letters of guarantee are collateralized by fixed deposit with financial statement.
Credit lines with financial institutes As of 31 December 2012 and 2011, the Company has credit lines with various financial institutes valued a total of Baht 105 million. The Company must oblige to certain conditioned
applied throughout the life of credit line contracts. In all, these credit lines are guaranteed by the Company’s fixed deposit and land and building mortgage with financial institute.
Shareholders’ equity The Company’s total shareholders’ equity at the end of 2011 and 2012 were Baht 1,315.93 million and Baht 4,215.81 million. An increase was mainly due to business merger which resulted in premium on share capital worth Baht 4,011 million.
Events after the reporting period Dispose shares and loans to Central Page One (Thailand) to a subsidiary of Chirathivat Group The Company’s subsidiary, B2S, sold its 50.1% stakes in Central Page One to a subsidiary of Chirathivat Group at Baht 0.01 per share, or worth a total of Baht 10,020, compared to the book value of Baht 0 as of the transaction date. B2S also dispose all short- and long-term loans as well as interest receivable that B2S loaned to Central Page One and Page One The Book Shop Company Limited, worth Baht 3 million and Baht 9 million, respectively. Such transactions were made at book value and were completed as of 16 November 2012.
Auditor’s Report To the Board of Directors and Shareholders of OfficeMate Public Company Limited: I have audited the accompanying consolidated and separate financial statements of OfficeMate Public Company Limited and its subsidiaries, and of OfficeMate Public Company Limited, respectively, which comprise the consolidated and separate statements of financial position as at December 31, 2012, the consolidated and separate statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. Management’s Responsibility for the consolidated and separate Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. Opinion In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the consolidated financial position of OfficeMate Public Company Limited and its subsidiaries and of OfficeMate Public Company Limited, respectively, as at December 31, 2012, and the consolidated and separate results of operations and the consolidated and separate cash flows for the year then ended in accordance with Thai Financial Reporting Standards. Other Matter The consolidated financial statements for the year ended December 31, 2012 of Office DepotCompany Limited and subsidiary and B2S Company Limited, which are the subsidiary companies for a legal perspective but the acquirer for accounting purposes, were audited by another auditor, for the purpose of providing information in preparation of the consolidated financial statements of OfficeMate Pubic Company Limited and Office Club (Thai) Company Limited and subsidiary and B2S Company Limited, who expressed an unmodified opinion on those statements on February 28, 2013.
(Vichai Ruchitanont) Certified Public Accountant Registration Number 4054 ANS Audit Company Limited Bangkok, February 28, 2013
FINANCIAL STATEMENTS AND NOTES OFFICEMATE PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES
FOR THE YEAR ENDED DECEMBER 31, 2012
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OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 1. GENERAL INFORMATION OfficeMate Public Co., Ltd. (“the Company”) was registered under the Civil and Commercial Code on February 28, 1994 and becomes a public Co., Ltd. on June 2, 2008. 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). 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The financial statements are prepared in accordance with Thai Accounting Standards (“TAS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) and 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 financial statements in conformity with TAS 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. Therefore, actual result 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, or in the period of the revision and future periods, if the revision affects both current and future periods.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 3. Basis of the Preparation of the Consolidated Financial Statements These consolidated financial statements were prepared for the reverse acquisition business combinations which OfficeMate Public Co., Ltd. is a parent company based on legal basis but it is a seller based on accounting basis and Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd which are subsidiaries based on legal basis but they are purchase entities based on accounting basis. The consolidated financial statements for the year 2012 presented a consolidated financial position of three companies as at December 31, 2012 and the consolidated financial performance of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. for the year ended December 31, 2012 and OfficeMate Public Co., Ltd. for period December 21, 2012 to December 31, 2012. However, the separate financial statements for the year ended December 31, 2012 presented financial position, performance and cash flow only for OfficeMate Public Co., Ltd. The subsidiary companies from a legal perspective in the consolidation financial statements are as follows:1. Office Club (Thai) Co., Ltd., the principal business is selling office equipments in chain of superstore. The numbers of stores as at December 31, 2012 and 2011 were 45 locations and 38 locations, respectively. 2. B2S Co., Ltd., the principal business is selling stationeries, books, tapes, CDs, videos, compact disc, and related accessories in chain of superstore. The numbers of stores as at December 31, 2012 and 2011 were 89 locations and 77 locations, respectively. 3.1 The Extraordinary Shareholders’ Meeting held on December 19, 2012 of OfficeMate Public Co., Ltd, passed a resolution for business integration plan of the Company and Chirativat group in supporting the Company’s business expansion plan and the customers’ need in the future and to enhance a capability of the Company’s competitiveness. The meeting approved the entire transfer of Pranporn Co., Ltd. “Pranporn”, a related company of Chirativat group. The transferred items consisted of total shares capital of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd., owned by “Pranporn”, the other related assets of Baht 1.86 million and liabilities of Baht 372 million payable to B2S Co., Ltd. in exchange for 240 million ordinary shares with a par value of Baht 1 each at the price of Baht 37.50 per share, totaling of Baht 9,000 million on December 21, 2012. As a result, the shareholders of “Pranporn” became major shareholders of the Company by holding 75% of shares and had a control over the Company which was a reverse acquisition according to TFRS No.3 (Revised 2009) “Business combination”.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 3.2 The recognitions of the transactions in the consolidated financial statements were as follows: 3.2.1 The assets and liabilities of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. before the business combination were recognized and measured at pre-combination carrying amount. 3.2.2 The assets and liabilities of OfficeMate Public Co., Ltd. were recognized and measured in accordance with TFRS No.3 (Revised 2009). 3.2.3 The retained earnings (deficit) and the other equity of balances of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. were recognized and measured at pre-combination carrying amount. 3.2.4 The amount recognized as issued equity interests in the consolidated financial statements determined by adding the issued equity interest of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. outstanding immediately before the business combination to the fair value of OfficeMate Public Co., Ltd. 3.2.5 The retained earnings and other equity interests of non-controlling interest of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. were proportionately recognized and measured at pre-combination carrying amounts. 3.2.6 The comparative consolidated financial statements for reverse acquisition were the combined financial statements of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. for the year 2011.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 3.3 The Company has calculated the basic earnings per share in each reporting period of the consolidated financial statements for reverse acquisition as follows: 3.3.1 Basic earnings per share for the period that the reverse acquisition occurred are calculated by dividing the net income for the period by the weighted average of number of ordinary shares outstanding during the period based on: a) The number of ordinary shares outstanding from the beginning of the period to the acquisition date is computed on the basis of the number of weighted average ordinary shares of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. outstanding during the period multiplied by the exchange ratio established in the business combination contract, and b) The number of ordinary shares outstanding on the acquisition date to the end of the period was the actual number of ordinary shares of OfficeMate Public Co., Ltd. outstanding during the period. 3.3.2 Basic earnings per share of the period prior to the acquisition date presented comparatively are calculated by dividing the net income of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. by the historical weighted average number of ordinary shares of Office Club (Thai) Co., Ltd. and subsidiary and B2S Co., Ltd. outstanding multiplied by the exchange ratio indicated in the business combination contract.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 3.4 Fair value of consideration transferred and goodwill The fair value of consideration transferred was calculated using the acquisition date fair value of OfficeMate Public Co., Ltd. as computed by the independent financial advisor using the discounted cash flow approach. The excess of fair value of consideration transferred over the fair value of OfficeMate Public Co., Ltd. net asset was treated as goodwill. Unit : Thousand Baht The fair value of consideration transferred Common stocks from business combination (80 million shares with Baht 37.50 per share) Loans from B2S Co., Ltd.
3,000,000 372,010
Other current assets transferred Total the fair value of consideration transferred Identifiable assets and liabilities at fair value at pre-acquisition date of
(1,861) 3,370,149
OfficeMate Public Company Limited Cash and cash equivalents
18,704
Current investments
62,983
Trade and other receivables Inventories
180,806 151,208
Pledged deposits at financial institutions
7,679
Property, plant and equipment
185,114
Intangible assets
239,969
Other non-current assets Trade and other payables
5,718 (309,211)
Income tax payable Finance lease liabilities Employee benefit obligations Fair value Goodwill
(1,468) (5,071) (5,990) 530,441 2,839,708
3.5 The balancing and related transactions with the subsidiary were already eliminated. 3.6 Revenues and net loss of OfficeMate Public Co., Ltd.. from December 21, 2012 included in the consolidated financial statement for the year ended December 31, 2012 were Baht 26.35 million and Baht 13.00 million, respectively.
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OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 3.7 Pro forma revenues and net income Pro forma revenues and net income of consolidated financial statement prepared as if the acquisition date of the business combination had been as of January 1, 2012 were as follows:
Unit : Million Baht 8,848.09 318.72
Total revenues Net income
4. NEW AND REVISED THAI FINANCIAL REPORTING STANDARDS NOT YET EFFECTIVE The changes in accounting policies as at January 1, 2011 In the year 2011, the Group has adopted new and revised TFRS which such transition affected the financial statements reflected from the adoption of TAS No. 16 (revised 2009) “Property, Plant and Equipment” and TAS No. 19 “Employee Benefits”. New and revised Thai Financial Reporting Standards not yet effective The Group has not yet adopted the new and revised Thai Financial Reporting Standards as follows: a) Thai Accounting Standards (TAS), Thai Financial Reporting Standards (TFRS), Thai Interpretation (TI) and guidelines which are effective for the financial statements for the period beginning on or after January 1, 2013 as follows: TAS/TFRS/TI/FAP’s Announcement 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 TFRS 8 Operating Segments TI 10 TI 21 TI 25 No. 34/2012
Government Assistance – No Specific Relation to Operating Activities Income Taxes – Recovery of Revalued NonDepreciable Assets Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders Accounting Guidance for Transfer and Transferred of Financial Assets
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
The management of the Group is assessing the impacts of these standards, interpretations and guideline on the financial statements for the period in which they are initially applied. b) Thai Financial Reporting Interpretations (TFRI) and TI which are effective for the financial statements for the period beginning on or after January 1, 2014 as follows: TFRI/TI Topic TFRI 4 Determining whether an Arrangement contains a Lease TFRI 12 Service Concession Arrangements TFRI 13 Customer Loyalty Programmes TI 29 Service Concession Arrangements: Disclosures The management of the Group is assessing the impacts of these interpretations on the financial statements for the year in which they are initially applied. 5. SIGNIFICANT ACCOUNTING POLICES 5.1 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. Rental and service incomes are recognised proportionately over the term of the lease and service agreements. Interest income is recognised on an accrual basis based on the effective interest rate. Dividends are recognised when the right to receive the dividends is established. Other revenues and expenses are recognized on an accrual basis. 5.2 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.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 5.3 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. 5.4 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. 5.5 Inventories Inventories are valued at the lower of cost (the average cost method) and net realizable value. 5.6 Investments in subsidiaries and associate Investments in subsidiaries are accounted for in the separate financial statements using cost method. Investments in associate are accounted for in the separate financial statements using equity method. On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognized in the statements of comprehensive income. 5.7 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 of the parent company from a legal perspective is calculated by reference to their costs on the straight-line basis over the estimated useful lives. Depreciation of plant and equipment of the subsidiary companies from a legal perspective are calculated by reference to their costs on a sum-of-the year digits basis (except for plant and equipment acquired before 2005 which are depreciated on a straight-line basis over the estimated useful lives. The Company’s management believes that the difference method of depreciation is not material effected in the consolidated financial statements
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 The estimated useful lives are as follows:-
Buildings Furniture and fixtures Equipment Vehicles Car parking
Useful life (years) 3 - 30 5 3-7 5 5
No depreciation is provided for land and land improvements. Depreciation is recognized in the statements of comprehensive income. 5.8 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. 5.9 Leasehold rights Leasehold rights are recorded at cost less impairment losses. Leasehold rights are charged to the statements of comprehensive income on a straight-line basis over the terms of the lease periods. 5.10 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 Internally developed software Brandname " Office mate" Customer relationships
Useful life (years) 3 - 19 3 - 10 10 12 - 29
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 5.11 Business combinations and goodwill Business combinations are accounted for using the acquisition method with the cost of the acquisition being the fair value at the acquisition date of consideration transferred, and the amount of any noncontrolling interest in the acquiree. For each business combination, the acquirer measures the noncontrolling interest, if any, in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related cost are accounted for as expenses in the periods in which the costs are incurred and the services are received. Goodwill is initially recorded at cost, being the excess of cost of business combination over the fair value of the net identifiable assets, of the acquired business. Goodwill is subsequently carried at cost less any accumulated impairment losses with impairment being tested annually and when circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the Company’s cash generating units (or group of cash-generating units) that are expected to benefit from the synergies of the combination. The Company estimates the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses relating to goodwill cannot be reversed in future periods. 5.12 Impairment of assets At the end of each reporting period, the Company and its subsidiaries performs impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. The Company and its subsidiaries also carries out annual impairment reviews in respect of goodwill. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the asset’s fair value less costs to sell and its value in use, is less than the carrying amount. In determining value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations are corroborated by a valuation model that, based on information available, reflects the amount that the Company and its subsidiaries could obtain from the disposal of the asset in an arm’s length transaction between knowledgeable, willing parties, after deducting the costs of disposal.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 In the assessment of asset impairment if there is any indication that previously recognised impairment losses may no longer exist or may have decreased, the Company and its subsidiaries estimates the asset’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The increased carrying amount of the asset attributable to a reversal of an impairment loss shall not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. 5.13 Related party transactions Related parties comprise enterprises and individuals that control or are controlled by the Company, whether directly or indirectly, or which are under common control with the Company. They also include associated companies and individuals which directly or indirectly own a voting interest in the Company that gives them significant influence over the Company, key management personnel, directors and officers with authority in the planning and direction of the Company’s operations. 5.14 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. 5.15 Employee benefits Short-term benefits The Company recognized salaries, wages, bonus and social security contribution as expenses on an accrual basis.
20
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Post-employment benefits – 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 – 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 employee’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. 5.16 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. 5.17 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 used for the year 2012 is 23% and the year 2011 is 30%). 5.18 Foreign Currency Transactions Foreign currency transactions are accounted for at the exchange rates prevailing at the date of the transactions. Monetary assets and liabilities at the balance sheet dates denominated in foreign currencies are translated into Bath at the rate ruling at that dates. Gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the statements of comprehensive income as incurred.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Outstanding forward foreign exchange contracts at the end of the year entered for hedging of its foreign currency liabilities are valued at the market rates at that date and its unrealized gains and losses resulting from mark-to-market are reported in the statements of comprehensive income. 6. 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: 6.1 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. 6.2 Allowance for diminution in value of inventory The determination of allowance 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, slow-moving and deteriorated inventories, is estimated based on the approximate useful life of each type of inventory. The allowance for diminution in value of inventory as determined is compared with the original balance in the books of account and the increase or decrease in allowance for diminution in value of inventory will be recognized as cost of sales and service in profit or loss. 6.3 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. 6.4 Fair value of financial instruments In determining the fair value of financial instruments that are not actively traded and for which quoted market prices are not readily available, the management exercise judgment, using a variety of valuation techniques and models. The input to these models is taken from observable markets, and includes consideration of liquidity, correlation and longer-term volatility of financial instruments.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 6.5 Property, plant and equipment/Depreciation In determining depreciation of plant and equipment, the management is required to make estimates of the useful lives and residual values of the plant and equipment and to review estimated useful lives and residual 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 when it is determined that their recoverable amount is lower than the carrying amount. This requires judgment regarding forecast of future revenues and expenses relating to the assets subject to the review. 6.6 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. 6.7 Post-employment benefits under defined benefit plans The obligation under the defined benefit plan is determined based on actuarial techniques. Such determination is made based on various assumptions, including discount rate, future salary increase rate, mortality rate and staff turnover rate. 7. RELATED PARTY TRANSACTIONS AND BALANCES The Company had business transactions with related parties. These parties are directly and indirectly related through common shareholding and/or directorship. The financial statements reflect the effects of these transactions on the basis determined by the Company and the parties concerned.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Relationship with key management and other related parties were as follows: Country of incorporation
Name of entities
/ nationality
Nature of relationships
Central Retail Corporation Co., Ltd. Central Page One(Thailand) Co., Ltd. CG Broker Co., Ltd. CRC Power Retail Co.,Ltd. CR Chantaburi (Thailand) Co., Ltd. CR Chiang Mai (Thailand) Co., Ltd. CR Nakorn Sri Thammarat (Thailand) Co., Ltd.
Thailand Thailand Thailand Thailand Thailand Thailand Thailand
Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors
CR Phuket (Thailand) Co., Ltd. CR Rajchaburi (Thailand) Co., Ltd. CR Had Yai (Thailand) Co., Ltd. CR Udorn Thani (Thailand) Co., Ltd. CR Ubon Ratchathani (Thailand) Co., Ltd. CRC Sport Co., Ltd. Central Food Retail Co., Ltd. Central Retail Training Center Co.,Ltd. Central Trading Co., Ltd. Central Pattana Public Company Limited. Central Pattana Chiangrai Co., Ltd. Central Pattana Nine Square Co., Ltd. Central Pattana Rama 3 Co., Ltd. Central Pattana Rama 2 Co., Ltd. Central Pattana Rattantibet Co., Ltd. Central Pattana Chaengwattana Co., Ltd. Central Restaurant Group Co.,Ltd. Central Realty Service Co.,Ltd. Central Watson Co.,Ltd. Central World Co., Ltd. Central Online Co., Ltd.
Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand
Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Country of incorporation
Name of entities / nationality CRC Thai Watsadu Co., Ltd. Thailand Teang Chirativat Co.,Ltd Thailand Power Buy Co., Ltd. Thailand Central Department Store Co., Ltd. Thailand CDS Restaurant Co., Ltd. Thailand Harng Central Department Store Co., Ltd. Thailand Robinson Department Store Public Company Li Thailand RIS Co., Ltd. Thailand Central Garment Factory Co., Ltd. Thailand
Nature of relationships Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors Shareholders,Some common directors
Central Garment Factory Co., Ltd.
Shareholders,Some common directors
Thailand
Significant transactions for the years ended 31 December 2012 and 2011 with related parties were as follows:
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Transactions with related parties Related parties Sale of goods 48,649 47,784 Rental and service income 1,462 1,542 Sales promotion income 7,855 6,379 Utility income 85 14 Management fee income 2,256 1,957 Purchase amount 184,828 185,428 Rental and service expenses 235,174 203,519 Sales promotion expense 18,035 16,879 Utility expense 34,525 27,030 Management fee expense 83,932 126,357 Computer expense 30,276 27,023 License expense 18,261 16,210 The pricing policies for particular types of transactions are explained further above contractually agreed prices.
25
-
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Balances as at 31 December 2012 and 2011 with related parties were as follows:
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Trade receivables - from related parties Central Page One(Thailand) Co., Ltd. Central Trading Co., Ltd. Central Department Store Co., Ltd. Central Retail Corporation Co,.Ltd. Central World Co., Ltd. Central Food Retail Co., Ltd. Central Pattana Public Company Limited. CRC Power Retail Co.,Ltd. Others Total Trade receivables -from related parties Other receivables - related parties Central Trading Co., Ltd. Central Page One(Thailand) Co., Ltd. Others Total Other receivables - related parties
6,979 5,134 2,801 2,512 2,328 2,005 1,963 5,329 29,051 -
10,628 1,827 2,702 2,170 296 6,504 2,387 1,844 6,402 34,760
-
-
471 286 80 837
-
-
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Short-term loans to related parties Central Page One(Thailand) Co., Ltd. CRC Power Retail Co.,Ltd. CRC Property Co.,Ltd. Mass Concept Co.,Ltd. Less allowance for doubtful Less allowance for doubtful and tranfer loss from investment in associate Central Page One(Thailand) Co., Ltd. Total Short-term loans to related parties
-
98,528 287,350 120,901 421,280
-
-
-
(94,628) 833,431
-
-
219,850 734,903 (121,322) 833,431
-
-
9,604 9,604
-
-
10,401 593 1,390 9,604
-
-
Movements during the years of loans to related parties were as follows: Short-term loans to related parties Balance at beginning of the years 833,431 Increase during the years 1,416,790 Decrease during the years (2,250,221) Balance at end of the years Long-term loans to related party Pageone The Bookshop Private Limited Total Long-term loans to related party
-
Movements during the years of loans to related party was as follows: Long-term loans to related party Balance at beginning of the years 9,604 Increase during the years 372 Decrease during the years 9,976 Balance at end of the years -
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Trade payables - related parties Central Page One(Thailand) Co., Ltd. Central Food Retail Co., Ltd Central Trading Co., Ltd. Power Buy Co., Ltd. Total Trade payables - related parties
337 34,044 351 34,732
3,124 7 31,350 543 35,024
-
-
Other payables - related parties Central Retail Corporation Co,.Ltd. Central Department Store Co., Ltd. Central Pattana Chonburi Co., Ltd RIS Co., Ltd. Robinson Department Store Public Company Limited. Central Pattana Nine Square Co., Ltd. Others Total Other payables - related parties
25,183 12,377 9,773 9,739 8,512 2,212 13,461 81,257
27,272 12,016 9,035 7,033 4,393 294 10,315 70,358
-
-
-
104,948 104,948
372,234 372,234
-
106,407 5,643 (7,102) 104,948
372,234 372,234
-
Short-term loans from related parties B2S Co.,Ltd. Mass Concept Co.,Ltd. Total Short-term loans from related parties
Movements during the years of loans from related parties were as follows: Short-term loans from related parties Balance at beginning of the years Increase during the years Decrease during the years Balance at end of the years -
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Key management personnel compensation Key management personnel compensation for the years ended December 31, 2012 and 2011 consisted of: Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Short-term benefits 48,269 46,774 14,465 13,593 Other long-term benefits 19 47 Termination benefits 953 872 180 455 Total key management personnel compensation 49,223 47,646 14,664 14,095
Commitments with related parties Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Commitments with related parties Within one year After one year but within five years Total ommitments with related parties
22,690 9,932 32,622
30,471 15,473 45,944
-
-
Significant agreements with related parties Shareholder agreement On 11 October 1995, a subsidiary entered into an agreement with Office Depot, Inc., Harng Central Department Store Co., Ltd. and nominal shareholders for the objective and set forth the right and agreement during shareholders to guarantee the continuance of ownership and managing operations of the Company, limitation and condition to transfer shares. This agreement will be terminated and invalid by the approval of major shareholders or by liquidation the Company. The Company and shareholders had to comply with conditions as specified in the agreement. Master license agreement On 8 November 1995, a subsidiary entered into the master license agreement with Office Depot, Inc. for grant the Company to use the system for operating office product superstores including the procedures manual and trademark. Under the agreement, the Company shall pay initial fee as specified in the agreement and pay royalty fee at the percent of net sales as specified in the agreement. The term of this agreement is for a period of 20 years and shall be terminated in November 2015. The Company has to
29
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 comply with conditions as specified in the agreement covering commitments to Trademark license agreement, Confidentiality agreement and Software license agreement, etc. Trademark license agreement Office Depot, Inc. grants a subsidiary the right to use trademark pertaining to the system, including as a product name or trademark as a service mark, in advertising or promotional activities and on any documents. The term of this agreement shall be co-terminous with the master license agreement. The Company has to comply with conditions as specified in the agreement such as limitation of liability arising from the use of the trademark, etc. Confidentiality agreement Office Depot, Inc., a subsidiary and Central Department Store Co.,Ltd. have entered into an agreement relating to confidential information of office product business and services. The terms of this agreement shall be co-terminus with the master license agreement and the Company had to comply with conditions as specified in the agreement. Software license agreement Office Depot, Inc. grants a subsidiary the right to operate stores by using the software system and related documents and also provide support services for the software hereby licensed to the Company. In consideration thereof, the Company is require to pay fees for the software license and for the support services as specified in the agreement. The term of this agreement shall not exceed 30 years On 16 October 2012, a subsidiary entered into the license termination agreement with Office Depot, Inc. for early termination as mention earlier. The Company paid for early termination fee amounting to Baht 38.5 million. The termination of the agreement had effectively at the midnight of 31 October 2012 onward. On 29 October 2012, the Company had already paid early termination fee. Rental and service agreements The subsidiaries have entered into rental agreements for retail space and service agreements with related parties. In consideration thereof, these related parties agreed to pay the rental and service fees at percentages of sales and/or size of occupied areas. The agreements have a term of 1 year and are renewable for successive periods by either party giving advance written notice. Management service agreements The subsidiaries have entered into a service agreement with related party whereby such company will provide services relating to accounting, taxation, financial and other related services. In consideration thereof, the Group agreed to pay service fees at amount specified in the agreement. The agreement has a
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 term of 1 year and is renewable for successive periods by either party giving written notice 30 days in advance. Computer service agreements The subsidiaries have entered into service agreements with related party whereby the latter will provide services relating to the computer systems of the Company. The Company has to pay service fees at amount specified in the agreements. The agreement has a term of 1 year and is renewable for successive periods. Inventory management service and warehouse agreements The subsidiaries have entered into inventory management service and warehouse agreements with related party for a period of 12 months. The Company has to pay management and warehouse service fees at amount specified in the agreements. Either party may give notice of termination within 90 days prior to expiry date of these agreements, otherwise the agreements are automatically renewed for successive periods of 12 months each. Member card service agreement The subsidiaries have entered into a member card service agreement “The 1 Card” with related party. The said related party will provide services to members of the Company, marketing management, members database management and provide the reward and other benefits for The 1 Card point redemption. In consideration thereof, the Company has to pay service fee at rates specified in the agreement. The agreement will expire on 31 December 2012. The Company and the counterparty have agreed to renew and are in the process of signing the agreement. 8. CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, consisted of:-
Cash Cash at banks – current account Cash at banks – saving account Total cash and cash equivalents
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 35,581 24,340 1,209 528 446,518 210,823 6,126 4,470 172,001 142,119 7,974 2,811 654,100 377,282 15,309 7,809
31
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 9. TEMPORARY INVESTMENT Temporary investment as at December 31, consisted of:-
Fixed income open-ended fund Add Changes in fair value of investment Total temporary investment
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 67,487 67,487 68,128 121 121 256 67,608 67,608 68,384
10. TRADE AND OTHER RECEIVABLES - NET Trade and other receivables as at December 31, consisted of:-
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
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 378,320 212,342 141,969 107,180 (3,713) (7,170) (122) (8) 374,607 205,172 141,847 107,172 12,093 6,309 569 10,854 29,825 404,432
1,153 1,768 8,606 11,527 216,699
11,021 3,046 569 3,260 17,896 159,743
8,371 2,051 544 1,083 12,049 119,221
As at December 31, 2012 and 2011, the Company had outstanding balances of trade receivables aged as follows:-
32
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
Not yet due Past due Less than 30 days 31 - 60 days 61 - 90 days 91 - 120 days Over 120 days Total trade receivables Less Allowance for doubtful accounts Total trade receivables - net
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 252,525 168,361 119,409 92,152 100,436 23,143 947 588 681 378,320 (3,713) 374,607
30,201 7,313 2,882 2,068 1,517 212,342 (7,170) 205,172
21,134 1,058 199 67 102 141,969 (122) 141,847
11,541 2,637 783 63 4 107,180 (8) 107,172
11. INVENTORIES - NET Inventories as at December 31, consisted of:-
Finished goods Supplies Total inventories Less Allowance for stock devaluation Total inventories - net
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 1,350,048 946,337 163,584 133,750 157 157 92 1,350,205 946,337 163,741 133,842 (84,315) (75,583) (3,681) (1,950) 1,265,890 870,754 160,060 131,892
33
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 12. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATE 12.1 Investments in subsidiaries as at December 31, consisted of:-
Office club (Thai) Co., Ltd. B2S Co., Ltd. Total Invesment in subsidiaries
Separate financial statements % Unit : Thousand Baht Ownership investment Paid-up capital Cost method 2555 2554 2555 2554 2555 2554 99.99 691,550 691,550 4,909,591 99.99 640,000 640,000 4,460,558 9,370,149 -
Investment in subsidiaries is an investments form business combination between the Company and Office Club (Thai) Co., Ltd. and B2S Co., Ltd. are as below:-
Unit : Thousand Baht Common stocks from business combination (240 million shares with Baht 37.50 per share) Loans from B2S Co., Ltd. Other current assets
Total investments
9,000,000 372,010 (1,861) 9,370,149
12.2 Investments in associate as at December 31, consisted of:Consolidated financial statements % Unit : Thousand Baht Ownership investment Paid-up capital Cost method Equity method 2012 2011 2012 2011 2012 2011 2012 2011 Central Page One (Thailand) Co., Ltd. 50.10 20,000 20,000 10,020 Less loss impairment (10,020) Total investment in asscociate Share of loss from investments using the equity method
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
As at January 1, Share of loss from investments using the equity method Transfer to allowance for doubtful accounts Reversal loss on disposal of investment As at December 31,
Unit : Thousand Baht Consolidated financial statements 2012 2011 (12,594) (23,256) 23,256 12,594 -
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 13. PROPERTY, PLANT AND EQUIPMENT - NET Property, plant and equipment as at December 31, 2012 consisted of:Unit: Thousand Baht Consolidated financial statement As at Tranfer from Movement during the year As at January 1, 2012 business combination Increase Decrease December 31, 2012 Cost Land Land improvements Buildings Building improvements Equipment Furnitures and fixtures Vehicles Car parking Assets under construction and installation Information system equipment Total Accumulated Depreciation Buildings Building improvements Equipments Furnitures and fixtures Vehicles Car parking Assets under construction and installation Information system equipment Total Net book value
175,731 311,734 370,104 189,438 -
36,180 22,489 89,623 935 97,407 32,959 27,100 183
28,552 76,738 53,612 47,812 -
1,950 14,105 30,355 3,816 -
36,180 22,489 291,956 375,302 490,768 266,393 27,100 183
539 121,652 1,169,198
1,280 308,156
6,884 15,239 228,837
5,853 13,293 69,372
2,850 123,598 1,636,819
118,442 272,565 320,746 70,942 -
18,893 95 70,620 11,454 21,849
21,500 52,647 27,171 11,427 68
1,766 14,005 30,069 1,257 -
157,069 311,302 388,468 92,566 21,917
102,962 885,657 283,541
131 123,042 185,114
11,771 124,584
13,188 60,285
131 101,545 1,072,998 563,821
36
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012
As at January 1, 2012 Cost Land Land improvements Buildings Buildings improvements Equipment Furnitures and fixtures Vehicles Car parking Property under construction Total Accumulated Depreciation Buildings Buildings improvements Equipments Furnitures and fixtures Vehicles Car parking Total Net book value
Unit: Thousand Baht Separate financial statement Movement during the year As at Increase Decrease December 31, 2012
36,180 10,342 73,160 83,782 14,197 28,610 183 1,445 247,899
2,630 935 14,458 18,983 6 16,672 53,684
715 221 1,516 16,753 19,205
36,180 12,972 73,160 935 97,525 32,959 27,100 183 1,364 282,378
16,708 58,759 8,030 20,271 111 103,879 144,020
2,253 101 12,938 3,600 3,162 20 22,074
712 14 1,516 2,242
18,961 101 70,985 11,616 21,917 131 123,711 158,667
As at December 31, 2012, the Company’s land and buildings are mortgaged as collateral for overdrafts and loans from banks with mortgaged value of Baht 50 million (Note 31.3). Depreciations for the years ended December 31, 2012 and 2011, amounted to Baht 124.58 million and Baht 113.61 million, respectively, were included in the consolidated statements of comprehensive income and amounted to Baht 22.07 million and Baht 18.91 million, respectively, were included in the separate statements of comprehensive income
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 As at December 31, 2012 the Company and subsidiaries’ certain plant and equipment items have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation and allowance for impairment loss of those assets amounted to approximately Baht 697.63 million (The Company only: Baht 73.48 million) (2011: Baht 675.08 million and the Company only: Baht 44.33 million). 14. LEASEHOLD Leasehold as at December 31, 2012 consisted of:-
As at January 1, 2012 Leasehold Cost Accumulated amortization Net book value
13,865 1,692 12,173
Unit: Thousand Baht Consolidated financial statement Movement during the year As at Increase Decrease December 31, 2012 1,440
-
13,865 3,132 10,733
15. GOODWILL Goodwill as at December 31, 2012 consisted of:Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 OfficeMate Public Company Limited (Note 3) 2,839,708 Office supply Club Company Limited 175,837 175,837 Total Goodwill 3,015,545 175,837 -
38
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 16. INTANGIBLE ASSET - NET Intangible asset as at December 31, 2012 consisted of:Unit: Thousand Baht Consolidated financial statement As at Tranfer from Movement during the year As at January 1, 2012 business combination Increase Decrease December 31, 2012 Cost Computer software Internally developed software Customer relationships Brandname " Office mate" Total Accumulated Amortisation Computer software Internally developed software Customer relationships Brandname " OfficeMate" Total Net Book Value
65,695 41,533 107,228
15,324 51,062 131,998 45,677 244,061
2,807 2,954 5,761
52,231 107 52,338
31,595 95,442 131,998 45,677 304,712
47,684 30,256 77,940 29,288
4,092 4,092 239,969
4,157 3,590 190 177 8,114
44,988 39 45,027
10,945 33,807 190 177 45,119 259,593
As at January 1, 2012 Computer software Cost Accumulated Amortisation Net Book Value
12,583 2,722 9,861
Unit: Thousand Baht Separate financial statement Movement during the year Increase Decrease 2,742 1,418
-
As at December 31, 2012 15,325 4,140 11,185
As at December 31, 2012, the Company and subsidiaries’ certain intangible assets have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated amortization of those assets amounted to approximately Baht 29.57 million (2011: Baht 24.25 million).
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 17. TRADE AND OTHER PAYABLES Trade and other payables as at December 31, consisted of:-
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 Accrued expenses Others Total other payables Total trade and other payables
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 1,719,131 1,152,467 262,249 195,037
1,852 1,885 502 3,852 88,731 2,091 95,310 107,034 29,810 331,067 2,050,198
48,735 7,077 68,913 82,850 19,048 226,623 1,379,090
1,852 1,885 503 3,852 16,970 1,831 17,525 1,933 46,351 308,600
3,396 1,620 3,285 2,457 10,218 628 6,496 5,737 33,837 228,874
40
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 18. LIABILITIES UNDER FINANCIAL LEASE AGREEMENTS - NET Liabilities under financial lease agreements as at December 31, consisted of:Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Due within 1 year Minimum payments Interest charges Present value of minimum payment Due over 1 year but not exceed 5 years Minimum payments Interest charges Present value of minimum payment Total present value of minimum payment Net book value of vehicle under finance leases agreements
1,831 (309) 1,522
-
1,831 (309) 1,522
1,831 (413) 1,418
3,781 (221) 3,560 5,082
-
3,781 (221) 3,560 5,082
5,611 (529) 5,082 6,500
7,086
-
7,086
7,086
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 19. EMPLOYEE BENEFITS OBLIGATIONS Movement of the present value of employee benefits obligation for the years ended December 31, 2012 and 2011 as follows:Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Post-employment benefit plan Defined benefit obligations at beginning of the years Transfer from business combination Current service costs Cost of interest Actuarial gains on defined employee benefit plans * Paid of employee benefits obigations during the years Defined benefit obligations at end of the years
16,615 5,990 2,221 825
13,839 2,085 691
8,939 993 211
6,113 2,515 311
3,885
-
(3,529)
-
29,536
16,615
(590) 6,024
8,939
*The effects of changes in actuarial assumptions in the year 2012. Principal actuarial assumptions (expressed as weighted averages) as at December 31, 2012 and 2011 as follows:Percentage Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Discount rate 4.10-4.15 5.00 4.15 3.60 Future salary increases 5.00 4.25 5.00 5.00 Turn over rate 11.00 - 36.00 11.00 - 36.00 4.17 - 12.50 Mortality rate As Mortality Table 2008 As Mortality Table 2008 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.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Employee benefit expenses in the statements of comprehensive income for the years ended December 31, 2012 and 2011consisted of:-
Current service cost Interest from obligation Actuarial (gains) loss on defined employee benefit plans Total employee benefit expenses
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 2,221 2,085 993 2,515 825 691 211 311 3,885 6,931
2,776
(3,529) (2,325)
2,826
Employee benefit expenses for the years ended December 31, 2012 and 2011 as shown in the statements of comprehensive income as follows:-
Selling expenses Administrative expenses Actuarial (gains) loss on defined employee benefit plans Total employee benefit expenses
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 2,032 1,724 718 1,625 1,014 1,052 486 1,201 3,885 6,931
2,776
(3,529) (2,325)
2,826
Actuarial gain (loss), included in the statement of comprehensive income, incurred as a result of change in the assumption on the discount rate.
43
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 20. SHARE CAPITAL 20.1 Consolidated Financial Statements Issued capitals presented in the consolidated financial statements are of Office Club (Thai) Co., Ltd. and B2S Co., Ltd. (the subsidiary company from a legal perspective). As of December 31, 2012and 2011, the share capital consists of:Consolidated financial statements December 31, 2012 December 31, 2011 Par Number of Number of value shares Value shares Value (Baht) (Thousand shares) (Thousand Baht) (Thousand shares) (Thousand Baht) Share Capital of the Subsidiaries Company from a Legal Perspective Ordinary share as of January 1, 2012 Office Club (Thai) Co., Ltd. 10 69,155 691,550 B2S Co., Ltd. 10 64,000 640,000 Total ordinary share as of January 1, 2012 133,155 1,331,550 Ordinary share as of December 31, 2012 133,155 1,331,550 Fair value of the considerations transferred จin business combination
3,000,000 4,331,550
Share Capital Divided into (According to the Structure of the Parent Company from a Legal Perspective) ทIssued and paid-up ordinary shares Premium on share capital from business combination Total ordinary shares
320,000 4,011,550 4,331,550
Issues and Paid-Up Share Capital Prior to Business Combination Ordinary share as of January 1, 2011 Office Club (Thai) Co., Ltd. B2S Co., Ltd. Total Ordinary share as of January 1, 2011 Ordinary share as of December 31, 2011
10 10
69,155 64,000 133,155 133,155
691,550 640,000 1,331,550 1,331,550
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 20.2 Separate financial statement According to separate financial statement for the year ended December 31, 2012, the extraordinary shareholder' s meeting 1/2012 on December 19, 2012 passed resolutions to approve an increase the registered share capital of the Company in amount of Baht 240 million from Baht 80 million to Baht 320 million by issuing of 240 million ordinary shares which par value of Baht 1 each in order to allocate to private placement that allocate to Pranporn in share price of Baht 37.5, totalling Baht 9,000 million. Pranporn will pay the increased shares capital by ordinary share which Pranporn and the other related owned in Office Club (Thai) Ltd (formerly Office Depo) and B2S Co., Ltd. (B2S) instead of cash resulting to such business transfer is a Revers Acquisition. 21. LEGAL RESERVE Under the Public Companies Act, the Company is required to set aside as a statutory reserve at least 5% of its net profit after accumulated deficit brought forward (if any) until the reserve is not less than 10% of the registered capital. The legal reserve is non-distributable as dividends. 22. DIVIDEND PAYMENT 22.1 Consolidated financial statement At the annual general meeting of the shareholders of the Company held on 2 May 2012, the shareholders approved the appropriation of dividend of Bath 5.60 per share, amounting to Bath 387.3 million . The dividend was paid to shareholders during 2012. 22.2 Separate financial statement The Board of Director’ Meeting No. 3/2012 held on August 9, 2012 authorized the payment of an interim dividend from its operations for the six-month period ended June 30, 2012 amounting Baht 16 million for 80 million shares at the rate of Baht 0.20 per share. The dividend was paid on September 7, 2012. At the Ordinary Shareholder’s Meeting No. 1/2012 held on April 24, 2012, the shareholders authorized the dividend payment from its operation for the year 2011 at the rate of Baht 0.26 per share. An interim dividend of Baht 0.13 per share for its operation of 6 months in the early year 2011 was paid on September 7, 2011. Thus, the remaining dividend of Baht 0.13 per share was paid on May 11, 2012 to the eligible shareholders.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 The Board 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. 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. 23. REVENUES FROM SALES AND SERVICES Revenues from sales and services for the years ended December 31, were as follows:-
Revenues from sales Revenues from services Total revenue from sales and services
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 6,683,763 5,747,388 1,625,339 1,219,383 555 51,888 43,242 6,684,318 5,747,388 1,677,227 1,262,625
24. OTHER INCOMES Other incomes for the years ended December 31, were as follows:-
Advertising income Trade discount income Distribution income Others Total Other incomes
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 259,460 203,281 16,722 4,205 75,746 62,499 82,384 35,895 10,557 8,336 434,312 305,880 10,557 8,336
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 25. EXPENSES BY NATURE Significant expenses by nature for the years ended December 31, were as follows:-
Changes in inventories (increased) decreased Net purchase Depreciation and amortisation Management and employee's expenses Catalog and magazine printing expenses Advertising and promotion expenses Distribution expenses Postal expenses
Unit : Million Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 274.40 31.70 (29.83) 48.79 5,246.17 4,613.89 1,270.69 982.31 141.53 99.78 23.49 20.07 467.71 379.87 213.37 194.37 27.15 26.48 78.75 69.04 18.70 9.14 32.97 27.06 34.19 20.74 6.70 6.55
26. INCOME TAX EXPENSE Income tax expense for the year is calculated from the profit for the period adjusted by non-deductible expenses or non-taxable income and multiplied by the income tax rate stipulated by the Revenue Code. (The tax rate for the year 2012 is 23% and for the year 2011 is 30%).
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 27. BASIC EARNINGS PER SHARE The calculations of basic earnings per share for the years ended December 31, 2012 and 2011 were during the years as follows:Consolidated financial statements 2012 2011
Separate financial statements 2012 2011
Profit attributable of the parent Company ( Baht)
287,140,475
120,911,834
45,528,423
42,490,833
Number of ordinary shares outstanding at 1 January Ratio indicated in the business combination contract Weighted average number of the reverse acquisition
133,155,000 1.8024 242,410,959
133,155,000 1.8024 240,000,000
80,000,000
80,000,000
Effect of own shares during the years Weighted average number of ordinary shares outstanding during the years (basic) Basic earnings per share (in Baht)
7,232,877
1.18
0.50
87,232,877
80,000,000
0.52
0.53
28. FINANCIAL INFORMATION BY SEGMENT Classified by business The Group has been engaged in one business which is retail of stationery supplies and office equipment by sales through commercial electronic which receive sale order through Call - Center system, electronic commercial system (e- Commerce) and retail shop. The segment information is presented as follows:-
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 Store Online Store Online Online Revenues Revenues from sales and services Revenues from investments Rental and service revenues Actuarial gains(loss) on defined employee benefit plans Other incomes Total revenues Expenses Costs of sales and services Selling expenses Administrative expenses Business combination expenses Finance costs Total expenses Share of loss from investments using the equity method Profit before income tax Income tax expense Profit for the years Other comprehensive income Total comprehensive income for the years Total assets as at December 31, Trade and other receivables - net Inventories - net Property, plant and equipment - net Other Total assets
6,658,715 27,875 33,955
25,603 -
5,747,388 27,281 32,402
1,677,227 2,660 -
1,262,625 2,508 -
(3,885) 429,684 7,146,344
742 26,345
305,880 6,112,951
3,529 10,557 1,693,973
8,336 1,273,469
5,112,010 1,029,861 580,094 14,950 3,949 6,740,864
18,812 7,880 13,175 11 39,878
4,433,820 852,134 565,277 5,643 5,856,873
1,257,796 244,144 106,929 25,325 638 1,634,832
954,239 174,513 80,286 516 1,209,555
(12,594) 392,886 92,212 300,674
(13,533) (13,533)
300,674
(13,533)
(23,256) 232,822 (111,910) 120,912 120,912
59,141 (13,612) 45,528 45,528
63,914 (17,942) 45,972 45,972
244,689 1,105,830 379,193 921,263 2,650,975
159,743 160,060 184,628 3,175,221 3,679,652
216,699 870,754 283,541 1,510,371 2,881,365
159,743 160,060 158,667 9,477,657 9,956,127
119,221 131,892 144,020 97,720 492,853
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 Classified by geographical area The Group operates business only in Thailand thus management considers that the group has only one geographical area. 29. DISCLOSURE OF FINANCIAL INSTRUMENTS 29.1 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. 29.2 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. 29.3 Foreign currency risk The Company and its subsidiaries' exposure in foreign currency rates relates to revenues and administrative expenses from/to the related parties that are denominated in foreign currency. 29.4 Interest rate risk The interest rate risk is the risk that future movements in the market interest rates will affect the results of the Company’s operations and its cash flows. The Company’s exposure to interest rates risk relates primarily to its deposits, bank overdrafts, and loans from financial institutions. Since major financial assets and liabilities are classified as short-term, the Company does not have significant risk from the interest rates.
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 29.5 Capital management The Board's policy is to maintain a strong capital base so as to maintain assurance of shareholder, investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital which the Group defines as result from operating activities divided by total shareholders' equity, excluding Non- controlling interests and also monitors the level of dividends to ordinary shareholders. 30. 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. During the year 2012, the Company paid to the found amounted to Baht 2.70 million (2011: Baht 2.60) in the consolidated financial statements and Baht 4.83 million (2011: Baht 3.84) in the separate financial statements. 31. COMMITMENT AND CONTINGENT LIABILITY 31.1 Agreements 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, 2012 and 2011 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:-
Due within 1 year Due over 1 year but not over 5 years Total
Unit : Thousand Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011 158,023 87,690 46,589 22,732 188,743 172,088 16,622 28,481 346,766 259,778 63,211 51,213
OFFICEMATE PUBLIC CO., LTD. AND ITS SUBSIDIRES NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2012 31.2 Letter of guarantee As at December 31, 2012 and 2011 the Company has a commitment with financial institutions for the letters of guarantee issued totaling Baht 20.14 million and Baht 15 million, respectively, in Consolidated financial statements and Baht 6.58 million and Baht 3.97 million, respectively, in Separate financial statements which were guaranteed by pledged deposits with financial institutions. 31.3 Credit Facilities Line with Financial Institutions As at December 31, 2012 and 2011 the Company had loan facilities line with a financial institution, totaling Baht 105 million and Baht 65 million, respectively, in Consolidated financial statements and Baht 50 million and Baht 55 million, respectively, in Separate financial statements which are secured by pledged deposits, the mortgage of the Company's land with office building (Note 13). The loans are subject to certain conditions with which the Company has to comply throughout the loans period. 32. APPROVAL OF FINANCIAL STATEMENTS These financial statements have been approved by the authorized directors to be issued on February 28, 2013.
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