Annual Report www.snpfood.com
2007
S&P Syndicate Public Company Limited
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Contents
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Financial Highlights
088
Message from the Chairman
089
Nature of Business
091
Report of the Independent Certified Public Accountants
097
Financial Statements
098
Connected Transactions
0136
Audit Committee’s Report
0138
Risk Factors
0140
Economic and Competition
0141
Major Events
0142
Analysis of Operating Performance and Financial Status
0145
Dividend Payment Policy
0152
Shareholder Structures
0153
S&P Group Structure
0154
S&P Subsidiaries and affiliates
0155
Management Structure
0157
Corporate Governance
0163
General Corporate Information and Other References
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FINANCIAL HIGHLIGHTS Operating Performance (Units: Thousand Baht) Revenue from sales and services Other income Total revenue Gross profit Net profit (loss)
2007
2006
2005
2004
2003
4,013,841 62,934 4,076,775 1,696,261 181,774
3,727,256 72,739 3,799,995 1,606,538 226,793
3,361,307 53,805 3,415,112 1,428,276 203,601
2,994,692 49,113 3,043,805 1,256,982 183,227
2,550,397 41,461 2,591,859 1,064,531 176,164
1,100,004 2,517,514 556,829 1,960,685 523,431 472,973
1,001,717 2,398,461 507,309 1,891,153 502,303 421,267
777,585 2,084,535 511,853 1,572,682 434,769 414,370
586,254 1,748,889 444,396 1,304,493 374,271 326,379
567,085 1,599,823 373,348 1,226,475 358,885 348,671
7.40 9.44 4.46 0.3:1
9.46 11.99 5.97 0.3:1
10.62 14.15 5.97 0.3:1
10.94 14.48 6.02 0.3:1
11.37 14.85 6.80 0.3:1
7.28 (19.85) 4.96
11.27 11.39 15.06
12.20 11.12 19.19
17.44 4.01 9.32
9.69 (13.20) 6.74
Financial Status (Units: Thousand Baht) Current assets Total assets Total liabilities Shareholder’s equity Paid-up capital Net cash provided by operating activities Financial Ratios (Units: Percent) Return on investment Return on equity Net profit margin Debt to equity Growth Rates (Units: Percent) Total revenue growth Net profit growth Total assets growth Per share values (Units:Bath/share) Book value per share Earnings per share Dividends per share Share Capital (Units: Thousand Shares) Registered Ordinary Shares Number of Shares Issued and Paid-Up Weighted average Shares
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(Par 5.- Baht) (Par 5.- Baht) (Par 5.- Baht) (Par 5.- Baht) (Par 5.- Baht) 18.73 1.75 -
18.82 2.58 -
18.09 2.68 2.10
17.43 2.53 2.00
17.09 2.50 1.90
(Par 5.- Baht) (Par 5.- Baht) (Par 5.- Baht) (Par 5.- Baht) (Par 5.- Baht) 105,000 104,686 103,633
105,000 100,461 87,825
105,000 86,954 75,941
105,000 74,854 72,304
105,000 71,777 70,413
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Message from the Chairman During 2007, the Company worked extremely hard to ensure continued growth in business, even though our operations were hindered by a number of external factors, including political uncertainty, rising costs brought about by soaring oil prices, and a general slowdown in the domestic and world economy. A difficult first half year was turned around by the Company’s decision to streamline operations across the board, rationalizing costs and closing some restaurants and shops that provided insufficient economic returns. At the same time, we invested in new restaurants and product lines that offered good future potential, focusing on our core value of success through innovation. These operational decisions helped our business to pick up in the second half year to ensure, at the end of 2007, the Company’s total revenue amounted to Baht 4,077 million, an increase of 7.3 percent over the previous year. In the domestic market, the Company expanded its business by opening 27 new S&P outlets, the majority of which are outside of our core area of Bangkok as we seek to give S&P a presence throughout Thailand. The Vanilla concept has been so well accepted by the young generation that we opened a new Vanilla Garden in May. The year also saw new additions to our bakery and meat product lines, including our successful introduction of popular Disney characters on our bakery products under a new copyright agreement with Disney Consumer Products International Inc. Delivery services in Metropolitan Bangkok under 1344 expanded by 15 percent, while sales of our catering services under the Caterman brand doubled during the year. The launch of the S&P Joy Card concept offering discounts and other benefits for our customers proved very popular, with the use of these cards expected to grow. Internationally, the Company concentrated on streamlining operations at all its branded restaurants, introducing a systemized presentation of menus, food preparation, dÊcor and service. Our aim was both to counter the rising costs overseas and prepare for expansion into new market territories in 2008. To maintain the high quality of food and services offered by S&P, the Company continues to place emphasis on quality control, food safety and high standards of production in our restaurants, bakeries and food processing factories. During 2007, our operations received internationally recognized standards certification GMP from The Food and Drug administration Ministry of Public Health Thailand, HACCP from The food and Drug Administration Ministry of Public Health Thailand,
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The Department of Agriculture Ministry of Agriculture and Cooperatives & The Department of Fisheries. Social responsibility is an important factor of our close interaction with the general public, by giving something back to help the communities in which we operate. Our focus is primarily on youth development, organizing junior summer camps, cooking competitions, S&P Family Day, and training courses for youths to learn about the restaurant business. Promising youths are provided grants and opportunities of employment when they finish school. In addition, funds and products were donated to charities and student foundations to organize special activities for young people. This has been such a challenging year. We were able to work through it positively thanks to the continued support of our staff, company executives, business partners and shareholders. Which contributed strongly to the Company’s successful results. Please accept my sincere appreciation and gratitude for your valuable cooperation and support.
Patara Sila-On Chairman
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Nature of Business Company Background & Milestones S&P Syndicate Public Company Limited was founded in 1973 as S&P Co.,Ltd. selling ice cream and snacks at its first shop on Sukhumvit Soi 23 in Bangkok. It soon evolved into a restaurant with a flourishing bakery business, creating highly popular made-to-order cakes and cakes with cartoon designs. Business became so successful that more branches were opened in Bangkok. In 1989, S&P became a public company and changed its name to be S&P Syndicate Public Co.,Ltd. Continuing investment led to a rapid expansion in both its restaurant and food production businesses, with the S&P brand enjoying popularity among families, particularly young and older customers. Because of growing popularity, the operations of S&P Restaurants and S&P Bakery Shops were separated so as to target specific markets, while successful new brands were introduced – Patara (Fine Thai Cuisine), Patio, Bluecup, Vanilla, Simply Thai and Golden Dragon mooncakes. The Company’s first overseas Thai restaurant opened in London in 1990 under the brand Patara Fine Thai Cuisine, enjoying rapid success. Riding the huge popularity of Thai cuisine overseas, a further 20 restaurants have been opened in four countries with plans to seek new international markets over the next few years. In addition to continued development of its core bakery products of cakes, cookies, bread and mooncakes, the Company has introduced many new lines in its food production business, such as frozen meals (Quick Meal), sausages, coffee & tea (Bluecup), cookies (Delio), fruit jelly (Jelio Jelly), and dry mix, additives, food colouring (Royallee). As an extension of its restaurant business, S&P is now one of the leaders in outside catering under the Caterman brand, offering home and office delivery of bakery products and complete meals under its 1344 delivery hotline. Today, after 35 years of successful operations, S&P is one of the country’s leaders in restaurant and bakery businesses with a complete cycle from production, packaging, retail to delivery.
Overview of S&P and its subsidiaries S&P Syndicate Public Co.,Ltd. and its subsidiaries operate restaurants, coffee & drink corners, and bakery shops selling ready made products, as well as producing food products in its factories and bakeries under various brands. Its branded operations are as follows:
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Domestic : S&P Restaurant & Bakery S&P Restaurant & Bakery “Simply Delicious” Restaurants for everyone in the family, teenagers and working people, targeted for middle class customers and up. We do not only provide varieties of products including foods, ice cream, coffee, and bakery products for eating in the shop, but also offer the takeaway and delivery services. As a simply delicious way for everyone, our customers can also shop for frozen foods, cookies, and Thai desserts in our shops. S&P Bakery Shop & Corner “Fresh Baked Everyday” Bakery shop in crowded community i.e. supermarket, department stores, office building, etc., providing convenience to the customer in shopping for beverages, coffee, bakery, cakes, cookies, sandwiches, bread and other ready meal products of S&P. Our shops are primarily located in Bangkok and its vicinity and other major parts in the country. Bluecup Coffee & Tea “Making Coffee Fun” Bluecup is the award winning espresso bar located in 170 S&P branches and shops. We are the home of Champion Barista of Thailand for 2007 & 2008 producing the best tasting coffees and innovative recipes and roast blends. Patio “Joy of eating” Home style cooking in a cozy but stylish setting. The creative menu offers all day dining experience with a vibrant atmosphere while savoring authentic home-style dishes. A great place for good food loving crowd. Patara “Fine Thai Cuisine” Elegant Thai cuisine in a simply sophisticated contemporary Thai décor with authentically different Thai menu. A Place for business dinner or an informal get together.
Vanilla Group Vanilla Industry “Tea Cake D.I.Y bakery Cooking Workshop” Modern restaurants designed for young, trendy generation, with harmonious blend between the modern and classic. In addition to spaghetti, soup, salad, pastry, and cake that we serve, we also offer a culinary course to interested customers for self cooking or even party at your home. Vanilla Restaurant “Breakfast Lunch Afternoon Tea Dinner” Restaurants with “English Pub” atmosphere, decorated in Vintage-modern style.
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Top varieties of European classic foods with outstanding characters in styles, food menus and the freshness of bakery. Vanilla Brasserie “Café, patisserie, Salon de the, Creperie, Chocolatier, Confiserie” Inspired from the “French Café” style, and applied to associate with the modernlifestyle of the target customer in Paragon Shopping Mall with our selected menu i.e. crepe, salad, sandwich, chocolate, together with “French style” desserts and souvenir gifts. Vanilla Café “Japanese Style Café” Italian-Japanese restaurants with “Retro” decoration in Japanese style but simple. Privacy in each corner with the feelings like eating at your friend’s home, plus the creative varieties of Japanese desserts. The new and successful choices to create satisfactory for high-end high-trend customers Royal Vanilla “Tearoom-Dimsum” Simulate the atmosphere of old Chinese restaurants, decorated with simple furniture in Chinese style. Serve with Dim-Sum and Chinese foods in “Vanilla” style Sauce “Art literature cookbook” Modern bookstore decorated in “Loft” style, distribute art, literature and cook books Grand Seaside “Great Seafood at Good point of view” Grand Seaside Thai seafood restaurant on Leam Farn Point – Sriracha. Only one and a half hour from Bangkok. Wholly renovated in a bungalow style circa Rama V period. Serving delicious Thai contemporary seafood in a relaxed ambience. SimplyThai “Thai sweet delicacies” A variety of traditional Thai sweets available in different flavours and styles as well as a fine blend between western taste and Thai taste all in stylish packaging. Pizzanotti “Thin Crust Italian Pizza for Delivery” A joint venture business with one of the best Italian restaurant in Thailand, Zanotti. Currently we are operating 4 outlets with more outlets planned to be opened in 2008 Haagen Dazs “The World’s Finest Super Premium Ice Cream” A join venture with General Mills International Holdings LLC. Häagen-Dazs is an exceptional eating experience. Häagen-Dazs selects only the highest quality, all natural ingredients from all over the world to create ice cream. Treat yourself to the ultimate taste experience and escape into the world of indulgence at 22 Häagen-Dazs Café nationwide and 200 retail outlets including leading hotels, restaurants, hypermarkets and supermarkets.
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Products and Services Cake & Bakery Products S&P has been the leader in cake and bakery industry for a long time. Our key success factors that we always adhere are the continuous R&D to improve the quality, concentration on the health and hygiene of the products, good quality raw material selection, including modern and innovative packaging design. Sausage S&P produce various types of sausage, ham, and beacon for the middle class customer and up. With our exclusive formula, selected only high quality meat, we produce under the high standard to ensure the highest quality products. Besides using in our own restaurants and bakery shops, we also distribute to the modern trade outlets throughout the country. Frozen Food (Quick Meal) As a pioneer in frozen ready-to -eat foods industry, S&P has consistently invested in R&D of our products. Not only developed the menu varieties to serve with our customer’s need, we also select good raw materials and carefully cook to ensure our tasty, healthy and hygiene of our products. Our frozen foods will make your meal to be a great meal easily. In addition, we also offer salad dressing, frozen soup and other products under brand “Patio” Delio S&P has introduced “Delio” as the alternative to the customer and to expand our customer bases. Delio Cookies is available at our shops, hypermarkets and supermarkes. Mooncake A leader in moon cake with high acceptance from our customers, S&P always focus on freshness, cleanliness, hygiene and longer product life of our S&P and Golden Dragon’s moon cake. Jelio As an initiative idea to add the jelly in the production line to expand our product varieties, we offer caragenan jelly both in the form of fruit-jelly in ready to eat cup and jelly with fruit juice drink in bottle Royallee Our food additives products have been awarded and implemented in accordance with the certified international quality standard. Our products include yeast, food coloring, custard powder, icing sugar, etc. under the Royallee brand.
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Services Caterman “Leave the details to us” Offers an outside catering service to home, office and for special events that includes sit-down dinners, buffets, light snacks, coffee & tea, from all brands under S&P Group. 1344 Delivery “Just Call 1344” S&P provides a home and office delivery service for its products, through its 1344 “hotline”. Foodhouse A joint venture with PCS - Property Care Services (Thailand) Ltd. will operate business canteens and provide a flexible range of food offerings to meet diverse needs of school pupils, office staff, and factory workers in Thailand.
International : Restaurant Patara “Authentically Different” The “gems” of Thai fine dining. Set in rich, warm contemporary Thai ambiance, Patara menu features authentic dishes with modern features authentic dishes with modern style presentation. The concept is well received in Europe and Asia. • UK 4 branches SWITZERLAND 1 branch SINGAPORE 2 branches THAI “Contemporary Cuisine” The simply called THAI is a trendy restaurant, beginning with a sleek décor created by renowned Paris interior designer Marc Hertrich to the choice of exotic cocktails, interesting wines from Europe, Chile or New-Zeeland and contemporary approach of the cuisine, where the best of East meets West for the enjoyment of its customers. • SWITZERLAND 1 branch Patio “Joy of eating” Internationally inspired contemporary Thai cuisine attracts young Asians with its relaxed atmosphere and modern decor. S&P plans to expand the concept to other Asian cities. • TAIWAN 4 branches Siam Kitchen “Simply Authentic” Thai dining in suburb shopping malls. Siam Kitchen offers affordable, value for money popular Thai dishes. All Siam Kitchen in Singapore are Halal certified. • SINGAPORE 7 branches
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Bangkok Jam “Thai and Pan-Asian cuisine” This latest dining scene in Singapore mimics the experience of eating in bustling Bangkok. The restaurant offers modern and clean ambiance that reflects the young corporate executives’ lifestyle. The menu is a mixture of Thai and Pan-Asian dishes with a hint of Japanese influence. • SINGAPORE 1 branch
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REPORT OF THE INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS TO THE SHAREHOLDERS AND THE BOARD OF DIRECTORS S&P SYNDICATE PUBLIC COMPANY LIMITED
We have audited the consolidated balance sheets of S&P Syndicate Public Company Limited and its subsidiaries and the balance sheets of S&P Syndicate Public Company Limited as at December 31, 2007 and 2006, and the related consolidated and the separate statements of income, changes in shareholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management as to their correctness and completeness of the presentation. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the aforementioned consolidated and the separate financial statements present fairly, in all material respects, the financial position of S&P Syndicate Public Company Limited and its subsidiaries and of S&P Syndicate Public Company Limited as at December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended, in conformity with generally accepted accounting principles. Without being a qualified opinion, as discussed in Note 2 to the financial statements, for the year ended December 31, 2007, the Company changed its accounting policy for investments in subsidiaries and associated companies from the equity method to the cost method in the separate financial statements to be in compliance with the Notification of Federation of Accounting Professions, and restated the separate financial statements for the year ended December 31, 2006 for the change in such accounting policy.
Permsak Jerajakwattana Certified Public Accountant (Thailand) Registration No. 3427 DELOITTE TOUCHE TOHMATSU JAIYOS AUDIT CO., LTD. BANGKOK February 13, 2008
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S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS AS AT DECEMBER 31, 2007 AND
Consolidated Financial Statements 2007 2006
Baht Separate Financial Statements 2007 2006 (as restated)
ASSETS CURRENT Cash and cash equivalents (Note 4) Current investments (Note 5) Trade accounts receivable - net (Notes 6 and 14) Short-term loans to related parties - net (Note 14) Inventories (Note 7) Other current assets Total Current Assets
312,346,258 577,135,389 436,792,905 66,993,522 135,767,731 164,595,735 402,510 3,721,051 170,389,863 135,259,044 44,305,185 54,012,329 1,100,004,452 1,001,717,070
NON-CURRENT ASSETS Investments in subsidiaries and associated companies (Notes 8 and 14) Property, plant and equipment - net (Note 9) Intangible assets - net (Note 10) Other non-current assets (Note 11) Total Non-current Assets TOTAL ASSETS
53,805,177 56,657,981 98,996,500 105,995,800 1,137,997,553 1,090,447,884 1,002,032,476 1,020,169,830 120,803,871 161,786,023 107,529,566 123,290,714 104,902,901 87,852,500 85,122,054 77,413,875 1,417,509,502 1,396,744,388 1,293,680,596 1,326,870,219 2,517,513,954 2,398,461,458 2,189,319,214 2,077,469,293
225,813,316 376,393,475 119,669,584 287,069 163,309,848 10,165,326 895,638,618
415,030,213 49,569,431 148,445,210 2,034,119 128,524,339 6,995,762 750,599,074
Notes to the financial statements form an integral part of these statements
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S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (CONTINUED) AS AT DECEMBER 31, 2007 AND 2006
Consolidated Financial Statements 2007 2006
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Baht Separate Financial Statements 2007 2006 (as restated)
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES Bank overdraft and short-term loans from financial institutions Trade accounts payable (Note 14) Short-term loans from related parties (Note 14) Accrued income tax Accrued expenses Other current liabilities Total Current Liabilities
4,665,150 258,150,287 113,402 68,666,349 149,604,478 73,652,496 554,852,162
3,312,000 247,265,244 356,958 57,718,967 151,578,986 44,756,458 504,988,613
228,447,678 270,852 53,226,133 133,480,166 60,323,377 475,748,206
211,557,769 7,668,359 44,841,576 134,021,861 39,404,855 437,494,420
NON-CURRENT LIABILITIES Other non-current liabilities Total Non-current Liabilities TOTAL LIABILITIES
1,976,490 1,976,490 556,828,652
2,320,290 2,320,290 507,308,903
475,748,206
437,494,420
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S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES BALANCE SHEETS (CONTINUED) AS AT DECEMBER 31, 2007 AND 2006
Consolidated Financial Statements 2007 2006
Baht Separate Financial Statements 2007 2006 (as restated)
LIABILITIES AND SHAREHOLDERS’ EQUITY (CONTINUED) SHAREHOLDERS’ EQUITY Share capital (Note 12) Authorized share capital 105,000,000 common shares, Baht 5 each 525,000,000 525,000,000 525,000,000 525,000,000 Issued and paid-up share capital 104,686,273 common shares, Baht 5 each, fully paid 523,431,365 523,431,365 100,460,600 common shares, Baht 5 each, fully paid 502,303,000 502,303,000 Premium on common shares (Note 12) 689,980,549 635,046,800 689,980,549 635,046,800 Exchange differences on translation of the financial statements of foreign subsidiaries 5,777,625 12,805,027 Unrealized gain (loss) on revaluation of investments 1,600,000 (1,145,016) 1,600,000 (1,300,000) Retained earnings Appropriated Legal reserve (Notes 15 and 16) 50,230,300 43,476,900 50,230,300 43,476,900 Unappropriated 602,080,984 608,945,774 448,328,794 460,448,173 Shareholders’ equity of parent company 1,873,100,823 1,801,432,485 1,713,571,008 1,639,974,873 Minority interests 87,584,479 89,720,070 Total Shareholders’ Equity 1,960,685,302 1,891,152,555 1,713,571,008 1,639,974,873 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY 2,517,513,954 2,398,461,458 2,189,319,214 2,077,469,293
Notes to the financial statements form an integral part of these statements
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S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
Consolidated Financial Statements 2007 2006
REVENUES Sales and service incomes Dividend received Share of profits from investments recorded by the equity method (Note 14) Other incomes Total Revenues
4,013,841,143 3,727,255,592 3,304,054,390 3,030,712,490 1,640,000 1,630,000 28,413,716 1,630,000 4,145,702 10,806,341 57,148,214 60,303,498 48,733,933 44,739,865 4,076,775,059 3,799,995,431 3,381,202,039 3,077,082,355
EXPENSES Cost of sales and services Selling and administrative expenses Total Expenses
2,317,580,152 2,120,717,181 2,133,126,821 1,937,321,714 1,471,545,654 1,345,482,547 1,003,115,700 894,259,458 3,789,125,806 3,466,199,728 3,136,242,521 2,831,581,172
PROFIT BEFORE INTEREST EXPENSES AND INCOME TAX INTEREST EXPENSES INCOME TAX PROFIT AFTER INTEREST EXPENSES AND INCOME TAX NET PROFIT OF MINORITY INTERESTS NET PROFIT BASIC EARNINGS PER SHARE (Note 13) DILUTED EARNINGS PER SHARE (Note 13)
Baht Separate Financial Statements 2007 2006 (as restated)
287,649,253 (393,441) (93,399,876)
333,795,703 (527,634) (88,019,320)
244,959,518 (5,297) (68,434,702)
245,501,183 (188,350) (63,681,314)
193,855,936 (12,081,828) 181,774,108
245,248,749 (18,455,819) 226,792,930
176,519,519 176,519,519
181,631,519 181,631,519
BAHT
1.75
2.58
1.70
2.07
BAHT
1.75
2.54
1.70
2.03
Notes to the financial statements form an integral part of these statements
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-
Legal reserve (Note 15)
Dividend paid (Note 16) 502,303,000
-
Net profit
ENDING BALANCES AS AT DECEMBER 31, 2006
-
Unrealized loss on revaluation of investments
the financial statements of foreign subsidiaries
-
67,534,000
New common shares issued and premium (Note 12)
Exchange differences on translation of
434,769,000
BEGINNING BALANCES AS AT JANUARY 1, 2006
Issued and paid-up share capital
635,046,800
-
-
-
-
-
175,588,400
459,458,400
Premium on common shares
12,805,027
-
-
-
-
(1,669,869 )
-
14,474,896
(1,145,016 )
-
-
-
(1,045,016 )
-
-
(100,000 )
43,476,900
-
6,049,750
-
-
-
-
37,427,150
608,945,774
(178,639,815 )
(6,049,750 )
226,792,930
-
-
-
566,842,409
Exchange differences Unrealized Retained earnings on translation of the loss on Appropriated Unappropriated financial statements revaluation for legal reserve of foreign subsidiaries of investments
S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 CONSOLIDATED
89,720,070
-
-
18,455,819
-
11,454,413
-
59,809,838
Minority interests
1,891,152,555
(178,639,815 )
-
245,248,749
(1,045,016 )
9,784,544
243,122,400
1,572,681,693
Total shareholders’ equity
Baht
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-
Legal reserve (Note 15)
Dividend paid (Note 16) 689,980,549
-
-
-
-
-
54,933,749
635,046,800
Premium on common shares
Notes to the financial statements form an integral part of these statements
523,431,365
-
Net profit
ENDING BALANCES AS AT DECEMBER 31, 2007
-
Unrealized gain on revaluation of investments
the financial statements of foreign subsidiaries
-
21,128,365
New common shares issued and premium (Note 12)
Exchange differences on translation of
502,303,000
BEGINNING BALANCES AS AT JANUARY 1, 2007
Issued and paid-up share capital
5,777,625
-
-
-
-
(7,027,402)
-
12,805,027
1,600,000
-
-
-
2,745,016
-
-
(1,145,016 )
50,230,300
-
6,753,400
-
-
-
-
43,476,900
602,080,984
(181,885,498 )
(6,753,400 )
181,774,108
-
-
-
608,945,774
Exchange differences Unrealized Retained earnings on translation of the loss on Appropriated Unappropriated financial statements revaluation for legal reserve of foreign subsidiaries of investments
S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 CONSOLIDATED
87,584,479
-
-
12,081,828
-
(14,217,419 )
-
89,720,070
Minority interests
1,960,685,302
(181,885,498 )
-
193,855,936
2,745,016
(21,244,821 )
76,062,114
1,891,152,555
Baht Total shareholders’ equity
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Beginning balances as at January 1, 2006 - as previously reported Adjustment : Cumulative effects from the change in accounting policy for investments in subsidiaries and associated companies (Note 2) Balances as at January 1, 2006 - as restated New common shares issued and premium (Note 12) Unrealized loss on revaluation of investments Net profit Legal reserve (Note 15) Dividend paid (Note 16) ENDING BALANCES AS AT DECEMBER 31, 2006 459,458,400
459,458,400 175,588,400 635,046,800
434,769,000 67,534,000 502,303,000
Premium on common shares
434,769,000
Issued and paid-up share capital
(14,474,896) -
14,474,896
(100,000) (1,200,000) (1,300,000)
(100,000)
Exchange differences Unrealized on translation of the loss on financial statements revaluation of foreign subsidiaries of investments
37,427,150 6,049,750 43,476,900
37,427,150
(103,336,190) 463,506,219 181,631,519 (6,049,750) (178,639,815) 460,448,173
566,842,409
Retained earnings Appropriated Unappropriated for legal reserve
S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 SEPARATE FINANCIAL STATEMENTS “AS RESTATED”
(117,811,086) 1,395,060,769 243,122,400 (1,200,000) 181,631,519 (178,639,815) 1,639,974,873
1,512,871,855
Baht Total shareholders’ equity
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635,046,800
635,046,800 54,933,749 689,980,549
502,303,000 21,128,365 523,431,365
Premium on common shares
502,303,000
Notes to the financial statements form an integral part of these statements
Beginning balances as at January 1, 2006 - as previously reported Adjustment : Cumulative effects from the change in accounting policy for investments in subsidiaries and associated companies (Note 2) Beginning balances as at January 1, 2007 - as restated New common shares issued and premium (Note 12) Unrealized gain on revaluation of investments Net profit Legal reserve (Note 15) Dividend paid (Note 16) ENDING BALANCES AS AT DECEMBER 31, 2007
Issued and paid-up share capital
-
(12,805,027 )
12,805,027
(1,300,000) 2,900,000 1,600,000
-
(1,300,000)
Exchange differences Unrealized on translation of the loss on financial statements revaluation of foreign subsidiaries of investments
43,476,900 6,753,400 50,230,300
-
43,476,900
460,448,173 176,519,519 (6,753,400) (181,885,498) 448,328,794
(148,497,601)
608,945,774
Retained earnings Appropriated Unappropriated for legal reserve
S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 SEPARATE FINANCIAL STATEMENTS “AS RESTATED”
1,639,974,873 76,062,114 2,900,000 176,519,519 (181,885,498) 1,713,571,008
(161,302,628)
1,801,277,501
Baht Total shareholders’ equity
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S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006 Baht Consolidated Financial Statements 2007 2006
CASH FLOWS FROM OPERATING ACTIVITIES Net profit Items to reconcile net profit to net cash provided by (used in) operating activities: Gain on disposal of current investments Unrealized gain from current investments Dividend income from current investments Share of profits from investments recorded by the equity method Loss from fixed assets written - off Depreciation and amortization Gain on sale of fixed assets Gain on leaseholds termination Share of profits from dissolution in subsidiary Dividend income from investment in subsidiary and associated company Loss on impairment of investment in subsidiary Net profit of minority interests Income from operations before changes in operating assets and liabilities (Increase) decrease in operating assets Trade accounts receivable Inventories Other current assets Other non-current assets Increase (decrease) in operating liabilities Trade accounts payable Accrued income tax Accrued expenses Other current liabilities Other non-current liabilities Net Cash Provided by Operating Activities
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181,774,108
(1,673,260) (5,541,709) (1,640,000)
226,792,930
-
(4,145,702) (10,806,341) 15,884,206 5,927,526 260,886,990 231,000,412 (808,965) (1,176,721) (19,162,332) -
Separate Financial Statements 2007 2006 (as restated)
176,519,519 181,631,519
(1,673,260) (5,541,709) (1,640,000)
-
14,860,698 5,408,074 237,128,424 202,687,265 (786,306) (1,034,235) (19,162,332) (3,175,574) -
12,081,828
18,455,819
(26,773,716) 3,000,000 -
-
456,817,496
451,031,293
391,918,076 369,530,291
28,828,004 (35,130,818) 9,707,143 (17,165,698)
(64,005,496) (14,590,881) (2,563,948) 5,572,353
28,775,626 (56,685,034) (34,785,509) (13,267,865) (3,169,563) 1,297,252 (7,806,477) (11,615,072)
10,885,043 9,871,724 10,947,381 11,427,104 (1,974,507) 26,087,931 10,402,407 (1,990,730) (343,800) 427,200 472,972,651 421,266,550
16,889,909 6,873,551 8,384,557 6,453,785 (541,695) 33,598,143 9,599,764 1,343,912 409,264,688 337,528,963
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S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
Consolidated Financial Statements 2007 2006 CASH FLOWS FROM INVESTING ACTIVITIES Cash payment for acquisition of current investments Cash received from proceed of current investment Decrease in short-term loans to related parties Cash payment for acquisition of a subsidiary Decrease in other long-term loans Dividend received from current investments Dividend received from investment in subsidiaries and associated companies Cash payments for purchases of fixed assets Proceeds from sale of fixed assets Proceeds from leaseholds termination Increase in intangible assets Net Cash Used in Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (decrease) in bank overdrafts and short-term loans from financial institutions (Decrease) increase in short-term loans from related parties Cash received from capital increase Dividend payments Net Cash (Used in) Provided by Financing Activities Exchange differences on translation of the financial statements of foreign subsidiaries NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
(689,839,398) 330,000,000 3,318,540 115,298 1,640,000
Baht Separate Financial Statements 2007 2006 (as restated)
(35,161,775) (646,709,075) (26,869,431) - 330,000,000 4,091,990 -
1,746,219 98,298 1,640,000
832,981 (10,000,000) -
26,773,716 (241,908,019) (283,794,814) (196,759,746) (256,094,479) 2,646,247 2,057,093 2,046,924 1,720,645 20,000,000 20,000,000 (24,763,564) (17,512,721) (4,097,860) (14,580,230) (618,790,896) (310,320,227) (485,261,524) (284,990,514)
1,353,150
(50,911,358)
-
(50,000,000)
(243,556) 2,705 (7,396,677) 7,194,725 76,062,114 243,122,400 76,062,114 243,122,400 (181,885,498) (178,639,815) (181,885,498) 178,639,815) (104,713,790) 13,573,932 (113,220,061) 21,677,310 (14,257,096)
10,416,470
-
-
(264,789,131) 134,936,725
(189,216,897)
577,135,389
442,198,664
415,030,213 340,814,454
312,346,258
577,135,389
225,813,316 415,030,213
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the years: Interest expense 393,441 Income tax 82,452,495
707,908 76,592,216
5,297 60,050,145
74,215,759
368,624 57,227,529
Notes to the financial statements form an integral part of these statements
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S&P SYNDICATE PUBLIC COMPANY LIMITED AND SUBSIDIARIES NOTES TO FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
1. GENERAL INFORMATION On October 14, 1973, S&P Syndicate Public Company Limited was incorporated under the Civil and Commercial Code of Thailand. Subsequently in May 1989, the Stock Exchange of Thailand registered the Company’s common shares as a listed security and the Company was transformed to Public Company Limited on April 20, 1994. The location of its head office is at 457-457/6 Sukhumvit 55 (Thonglor), Sukhumvit Road, Klongtonnua, Vadhana, Bangkok 10110. S&P Syndicate Public Company Limited is the parent company within the group of companies. The core business is the operation of a nationwide and international chain of restaurants and bakery shops, the production of bakery, frozen foods and other food products and food-service related business such as outside catering. SUPPLEMENTAL DISCLOSURE OF NUMBER OF EMPLOYEES AND STAFF COSTS Number of employees as at December 31, 2007 and 2006 and staff costs for the years ended December 31, 2007 and 2006 were included in cost of sales and services and selling and administrative expenses as follows: Number of employees Million 2007 2006 S&P Syndicate Public Company Limited S&P Syndicate Public Company Limited and subsidiaries
4,737 4,880
4,564 4,692
Staff costs Baht 2007 2006 789.23 1,006.19
719.02 917.52
2. BASIS OF FINANCIAL STATEMENT PREPARATION AND PRINCIPLES OF CONSOLIDATION 2.1 Basic of financial statement preparation The statutory financial statements are prepared in Thai Baht in the Thai language in conformity with generally accepted accounting principles in Thailand. Accordingly the financial statements are intended solely to present the financial position and results of operations and cash flows in accordance with accounting principles and practices generally accepted in Thailand.
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The financial statements are prepared in compliance with the Notification of the Department of Commercial Registration (currently the Department of Business Development) dated September 14, 2001, regarding “The Brief Particulars in the Financial Statements B.E. 2544”. In addition, the Company’s financial statements have been prepared in accordance with the Regulation of The Stock Exchange of Thailand (SET) dated January 22, 2001, regarding the preparation and submission of financial statements and reports for the financial position and results of operations of the listed companies B.E. 2544. For the convenience of readers, an English translation of the financial statements has been prepared from the Thai language statutory financial statements which are issued for domestic financial reporting purposes. 2.2 Principles of consolidation The consolidated financial statements for the years ended December 31, include the financial statements of S&P Syndicate Public Company Limited (“the Company”) and its subsidiaries in which the Company has control or invested over 50% of their voting rights. These subsidiaries are detailed as follows: Business type
Subsidiaries S&P Global Co., Ltd. Seriwat Foods Co., Ltd. (1) S&P Assets Co., Ltd. S&PizZanotti (Thailand) Limited (2) S&P Kitchen Co., Ltd. (3) (1) (2)
(3)
Holding Company Ceased operation Office rental Restaurant Dissolution
Country of Percentage of holdings registration as at December 31, 2007 2006 Thailand Thailand Thailand Thailand Thailand
80.00 99.96 99.93 50.00 -
80.00 99.96 99.93 50.00 99.99
In October 2004, the company has ceased its production operations and transferred employees and business operation to S&P Syndicate Public Company Limited. The Company has registered the dissolution with the Department of Business Development, Ministry of Commerce in January 2008. S&PizZanotti (Thailand) Limited registered its share capital with the Registrar of Partnerships and Companies of the Ministry of Commerce on April 28, 2006. It operates the Italian and Pizza restaurant in Thailand. Subsequently, in third quarter of 2006, the Company has the power to govern such company and has included in the consolidated financial statements. On October 6, 2006, the Extraordinary Shareholders’ Meeting of S&P Kitchen Co., Ltd., a subsidiary, has a resolution to dissolve the company and registered the dissolution of the Registrar of Partnerships and Companies of the Ministry of commerce in January 2007.
Additionally, the consolidated financial statements include the results from the financial statements of overseas subsidiary companies, in which S&P Global Company Limited has a shareholding, as the Company has been given authority to provide technical assistance to, and management of Thai food restaurants owned by these companies under agreement as follows:
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Business type Held by S&P Global Company Limited S&P Restaurant Co., Ltd. Patara (Geneva) SA Theme Foods PTE Limited SK Catering (Pte) Limited (formerly Siam Kitchen Causeway Point (Pte) Limited) (1) Patara Taiwan Company Limited (2) Patio International Limited
As at December 31, 2007 2006
Restaurant Restaurant Restaurant
England Switzerland Singapore
96.00 62.00 50.00
96.00 62.00 50.00
Restaurant Restaurant Restaurant
Singapore Taiwan Taiwan
50.00 50.00 60.00
50.00 50.00 60.00
Malaysia
99.99
99.99
Held by Theme Foods (PTE) Limited, Singapore Siam Kitchen Sdn. Bhd. (3) Ceased operation (1)
Country of registration
(2)
On June 25, 2007, the Board of Directors’ Meeting of Siam Kitchen Causeway Point (Pte) Ltd., subsidiary of S&P Global Co., Ltd., which registered in Singapore, has a special resolution to approve the change in the Company’s name to SK Catering (Pte) Ltd. The change was registered with Accounting and Corporate Regulatory Authority (ACRA), Singapore with effect from August 21, 2007. In 2007, the company has ceased its operation and its assets had been transferred to Patio International Limited.
(3)
In 2005, the company has ceased its operations in Malaysia and is in process of dissolution.
Significant intercompany transactions between the Company and its subsidiaries have been eliminated from the consolidated financial statements. The consolidated financial statements for the years ended December 31, 2007 and 2006, did not include the financial statements of Siam Kitchen Sdn. Bhd., subsidiary company registered in Malaysia which is invested by Theme Foods (PTE) Limited as the amount is immaterial. As at December 31, 2007, the carrying value of such investment is nil and as at December 31, 2006, the carrying value of investment is Baht 0.24 million. Assets, investments recorded by the equity method as at December 31, 2007 and 2006, revenues and the share of profits from investments recorded by the equity method in associated companies for the years ended December 31, 2007 and 2006 accounted for as the percentage of total assets, net assets (total assets net off total liabilities), total revenues and net profit, respectively, in the consolidated financial statements are summarized below:
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Company’s name
CONSOLIDATED Assets as percentage Investments recorded of total assets by the equity method as as at percentage of net assets as at December 31, December 31, 2007 2006 2007 2006
Held by S&P Syndicate Public Company Limited Subsidiaries : S&P Global Co., Ltd. and subsidiaries (Proportion of each subsidiary and associated companies of S&P Global Co., Ltd. are presented below) 14.25 Seriwat Foods Co., Ltd. 0.20 S&P Assets Co., Ltd. 0.21 S&P Kitchen Co., Ltd. S&PizZanotti (Thailand) Limited 0.45* Associates : HD Distributors (Thailand) Co., Ltd. Held by S&P Global Company Limited Subsidiaries : S&P Restaurant Co., Ltd. Patara (Geneva) SA Theme Foods (Pte) Limited SK Catering (Pte) Limited (formerly Siam Kitchen Causeway Point (Pte) Limited) Patara Taiwan Co., Ltd. Patio International Co., Ltd. Siam Kitchen Sdn. Bhd. (Held by Theme Foods (Pte) Limited) Associates : Patara Developments SA
15.11
Revenues as percentage of total revenues for the years ended December 31, 2007 2006
Share of profit as percentage of net profit for the years ended December 31, 2007 2006
14.42 0.24 0.19 0.87*
0.32 -
0.23 -
17.37 0.15 0.41*
18.46 0.01 0.14 0.30*
1.19 -
0.77 -
15.72
2.42* 2.74
2.76* 2.99
17.93
18.91
1.09* 2.28
3.99* 4.76
7.05 1.09* 1.20*
7.63 0.83* 1.34*
-
-
7.88 1.72* 2.07*
7.80 1.70* 2.61*
-
-
1.29* 0.05* 0.86*
1.12* 0.23* 1.07*
-
-
3.81* 0.29* 1.47*
4.53* 0.47* 1.21*
-
-
-
-
-
0.01*
-
-
-
-
11.54
12.22
0.32* 0.32
0.22* 0.23
17.24
18.32
1.19* 1.19
0.77* 0.77
* Information, which was provided by the management, was not audited or reviewed by an auditor.
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2.3 Change in accounting policy for investments in subsidiaries and associated companies For the year ended December 31, 2007, the Company changed its accounting policy for investments in subsidiaries and associated companies from the equity method to the cost method to comply with the Notification of Federation of Accounting Professions No.26/2549 regarding Thai Accounting Standard No.44 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries” and the Notification of Federation of Accounting Professions No. 32/2549 regarding the explanation for Thai Accounting Standard No. 44 “Consolidated Financial Statements and Accounting for investment in subsidiaries” (paragraph 27) and Thai Accounting Standard No. 45 “Accounting for investment in Associates” (paragraph 11). This change in accounting policy has been accounted for retroactively in the separate financial statements as if the Company had recorded such investments by the cost method according to the new accounting policy continuously. Therefore, the comparative information for the separate financial statements for the year ended December 31, 2006, have been restated to conform to the new accounting policy. The change in such accounting policy affects the transactions in the separate financial statements only, but there is no effect on the preparation of the consolidated financial statements. Comparative information for the separate financial statements have been restated to reflect the effect of the change to the cost method as follows: Unit : Thousand Baht As at December 31, 2006 Balance sheet : Decrease in investment in subsidiaries and associated companies Decrease in property, plant and equipment Increase in intangible assets Decrease in exchange differences on translation of the financial statements of foreign subsidiaries Decrease in retained earnings at end of the year
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161,291 139 127 12,805 148,498
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Unit : Thousand Baht For the year ended December 31, 2006 Statement of income : Decrease in share of profits from subsidiaries and associated companies Decrease in other income Increase in other expense Decrease in net income Decrease in basic earnings per share Decrease in diluted earnings per share
Baht Baht
44,888 206 67 45,161 0.51 0.51
2.4 Accounting standards announced but not effective The Federation of Accounting Professions No. 9/2550 dated May 2, 2007, No. 38/2550 dated September 21, 2007 and No. 62/2550 dated December 7, 2007 regarding the following accounting standards that were announced in the Royal Gazette, but were not in effect in 2007: TAS TAS TAS TAS TAS TAS
25 29 31 33 35 39
TAS TAS TAS TAS
41 43 49 51
(Revised 2007) (Revised 2007) (Revised 2007) (Revised 2007) (Revised 2007) (Revised 2007)
Cash Flow Statements Leases Inventories Borrowing Costs Presentation of Financial Statements Accounting Policies, Changes in Accounting Estimates and Errors (Revised 2007) Interim Financial Reporting (Revised 2007) Business Combination (Revised 2007) Construction Contracts Intangible Assets
These accounting standards will supersede previously issued accounting standards when they become effective. The management has assessed the impact of these accounting standards, when they are effective, for financial periods beginning on or after January 1, 2008 and does not expect them to have a material effect on Company’s financial statements. 3. SIGNIFICANT accounting POLICIES The significant accounting policies are summarized as below: 3.1 Cash and cash equivalents Cash and cash equivalents consist of cash in hand, deposits at bank and all types of deposits at financial institution ; excluding cash at bank used as collateral.
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3.2 Current investments Current investments consist of investment in available-for-sale securities, time deposits and Bank of Thailand bonds due within 12 months and without obligation. Investments in available-for-sale securities are stated at fair value, differences between book value and fair value of available-for-sale securities are recorded as unrealized gain (loss) on revaluation of investments under shareholders’ equity. 3.3 Allowance for doubtful accounts Allowance for doubtful accounts is provided at the estimated collection loses on receivable. Such estimated based on the Company’s collection experience and a review of the current status of each receivable. 3.4 Inventories Inventories of the Company and its subsidiaries are stated at the lower of cost or net realizable value. The cost of inventories of the Company and its three subsidiaries is stated using the weighted average cost method and of the other two subsidiaries is stated using the first in, first out method. 3.5 Investments in subsidiary and associated companies Investments in subsidiary and associated companies are presented by the cost method in the separate financial statements. In the case where impairment of investment is deemed to have occurred, in which case the loss will be charged to the statement of income. Investment in associated companies are presented by the equity method in the consolidated financial statements. 3.6 Property, plant and equipment Land of the Company is stated at cost. Plant and equipment of the Company and domestic subsidiary companies are stated at cost, net of accumulated depreciation. Depreciation is computed by the straight-line method over the estimated useful lives of the assets as follow: Office building and office improvements Factory building Machinery and equipment Office furniture and equipment Vehicles
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20 20 5-8 5 5
years years years years years
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0115 Equipment of overseas subsidiary companies is stated at cost, net of accumulated depreciation. Depreciation is computed by the straight-line and the diminishing balance methods over the estimated useful lives of the assets of 4 - 5 years. 3.7 Intangible assets Intangible assets consist of: a. Computer software development costs are stated at cost and are being amortized to expenses, within five years. b. Leaseholds of the Company are being amortized using the straight-line method over the lease periods. Long-term leasehold of an overseas subsidiary company is being amortized at 2% of cost using the straight-line method. Short-term leasehold is being amortized over the lease period. c. Goodwill represents the excess of cost over the net asset value at the date of acquisition of a subsidiary company, net of negative goodwill, which is the excess of net asset value over cost of two subsidiaries at the date of acquisition. This excess shall be amortized using the straight-line method over a period of ten years from the date of acquisition. 3.8 Provident fund The contribution was paid by the Company for the employees is recognized as an expense when the transactions occurred. 3.9 Foreign currency accounts Transactions in foreign currencies occurring during the year are converted into Baht at the rates prevailing on the transaction date. Monetary assets and liabilities in foreign currencies at the end of the year are translated into Baht at the rates prevailing on that date as determined by the Bank of Thailand. Gains or losses on translation are included in the statement of income. The translation of foreign financial statements for the purpose of preparing the consolidated financial statements is determined using the following rates; a. assets and liabilities are converted at the rate prevailing at the end of year. b. shareholders’ equity is converted at the rates prevailing on the transaction dates. c. revenues and expenses are converted at the average rate for the year. Gain (loss) on translation of foreign financial statements is shown under shareholders’ equity. Intercompany transactions are converted at the rates prevailing on the date of transaction and, upon elimination, at the rates prevailing on the consolidation date.
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3.10 Recognition of revenues and expenses Revenue from the sales of goods and cost of sales of goods are recognised as sales and cost of sales in the statement of income when the significant risks and rewards of ownership have been transferred to the buyer. Other revenues and expenses are recognized on the accrual basis. 3.11 Income tax Income tax of the Company and domestic subsidiary companies is based on the taxable profit and recorded as expense for the year. Income tax of the overseas subsidiary companies for each year is recognized on the accrual basis in accordance with the business practice of the countries where the business was performed. 3.12 Earnings per share Basic earnings per share are computed by dividing net profit for the year by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share are computed by dividing net profit for the year by the total of the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares which would be issued on the conversion of all dilutive potential ordinary shares (warrants) into ordinary shares. 3.13 Use of accounting estimates Preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent assets and liabilities. The actual results may differ from such estimates. 4. CASH AND CASH EQUIVALENTS For the purposes of preparation of the statements of cash flows in accordance with the relevant Thai Accounting Standard, as at December 31, cash and cash equivalents consist of :
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Thousand Baht Consolidated Financial Statements 2007 2006 Cash on hand and at banks Cash and Cash Equivalents
312,346 312,346
577,135 577,135
Separate Financial Statements 2007 2006 225,813 225,813
415,030 415,030
Cash and cash equivalents, include cash on hand and at banks, exclude time deposit and without obligation, with interest at market rates. 5. CURRENT INVESTMENTS Current investments as at December 31, consist of: Thousand Baht Consolidated Financial Statements 2007 2006 Time deposits Investments in mutual fund Current investments
109,075 327,718 436,793
43,239 23,755 66,994
Separate Financial Statements 2007 2006 50,702 325,692 376,394
30,869 18,700 49,569
Time deposits, include time deposits of a company and foreign subsidiary due within twelve months and without obligation, with interest at market rates. 6. TRADE ACCOUNTS RECEIVABLE - NET As at December 31, the Company and its subsidiaries had outstanding balances of trade accounts receivable (including trade accounts receivable - related parties) aged by the number of months as follows: Thousand Baht
Current Overdue 3 months or less Over 3 months up to 6 months Over 6 months up to 12 months Over 12 months Total Less Allowance for doubtful accounts Trade Accounts Receivable - Net
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Consolidated Financial Statements 2007 2006
Separate Financial Statements 2007 2006
88,845
98,142
73,231
82,200
47,753 246 545 2,662 140,051 (4,283) 135,768
66,058 1,069 342 3,268 168,879 (4,283) 164,596
47,558 197 305 2,662 123,953 (4,283) 119,670
65,856 1,069 335 3,268 152,728 (4,283) 148,445
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7. INVENTORIES Inventories as at December 31, consist of: Thousand Baht
Finished goods Work in process Raw materials Packaging materials Spare parts and supplies Goods in transit Total
Consolidated Financial Statements 2007 2006
Separate Financial Statements 2007 2006
43,748 247 85,812 34,105 6,478 -
54,181 1,243 40,706 31,710 7,091 328
43,748 247 78,732 34,105 6,478 -
54,181 1,243 33,971 31,710 7,091 328
170,390
135,259
163,310
128,524
8. INVESTMENTS IN SUBSIDIARIES AND ASSOCIATED COMPANIES Investments recorded by the equity method in the consolidated financial statements of the Company and its subsidiaries as at December 31, 2007 and 2006 consist of: In Thousand Baht Type of business
Relationship Paid-up % capital Share holding 2007 2006
Shareholding held by S&P Syndicate Public Co., Ltd. Associated company HD Distributors Agency Co-shareholders (Thailand) Co., Ltd. (1) for food and distribution co-management team 100,000 47.00 Shareholding held by S&P Global Co., Ltd. Subsidiary Siam Kitchen Sdn. Bhd.Ceased operation Associated company Patara Development SA Restaurant Total
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At cost method 2007 2006
At equity method 2007 2006
Dividend 2007
2006
49.00 48,998 48,998 47,492 52,288 6,773
-
�
2,845 50.00
50.00 1,423
1,423
-
240
-
-
�
5,314 45.00
45.00 2,392
2,392
6,313
4,130
-
-
52,813 52,813 53,805 56,658 6,773
-
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Investments recorded by the cost method in the separate financial statements as at December 31, 2007 and 2006 consists of : Type of business
Relationship
Paid-up % At cost capital Share holding 2007 2006 2007 2006 2007 2006
Shareholding held by S&P Syndicate Public Co., Ltd. Subsidiaries : S&P Kitchen Co., Ltd. Ceased operation Co-shareholders and co-management team 4,000 4,000 99.99 99.99 S&P Global Co., Ltd. Holding company ” 50,000 50,000 80.00 80.00 40,000 Seriwat Foods Co., Ltd. Ceased operation ” 2,000 2,000 99.96 99.96 1,999 S&P Assets Co., Ltd. Office rental ” 1,000 1,000 99.93 99.93 999 S&PizZanotti (Thailand) Limited Restaurant ” 20,000 20,000 50.00 50.00 10,000 Less Provision for impairment of investment (3,000) 7,000 Associates : HD Distributors (Thailand) Co., Ltd. (1) Agency for food distribution
(1)
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”
In Thousand Baht Dividend 2007
2006
3,999 40,000 20,000 1,999 999 -
-
10,000
-
-
10,000
100,000 100,000 47.00 49.00 48,998 48,998 6,773 98,996 105,995 26,773
-
On August 14, 2007, the Board of Directors’ Meeting of the Company has a resolution to exchange 4,000 preference shares of HD Distributors (Thailand) Company Limited which has one vote for each 2 shares and are entitled to receive a fixed dividend at the rate of 5% of its value being paid-up before common shares with the 2,000 preference shares of such company, held by third party, which have one vote for each share and are entitled to receive a fixed dividend at the rate of 10% of its value being paid-up before common shares. With this exchange, the Company considered no change in value of such investment as the Company still has the same voting right and is entitled to receive the same amount of dividend when dividends are declared.
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9.
PROPERTY, PLANT AND EQUIPMENT - NET Property, plant and equipment - net as at December 31, 2007 and 2006 consist of : Thousand Baht Consolidated Financial Statements
Disposals
Transfers/ Adjustments Balances Reclassification from the as at translation December 31, of foreign 2007 financial statements
Cost : Land Office buildings and office improvements Factory buildings Machinery and equipment Office furniture and equipment Vehicles Construction in progress Total cost
255,467 91,407 188,795 684,609 836,102 53,805 39,691 2,149,876
5,586 61,397 46,268 89,358 5,041 77,691 285,341
(7,416) (25,084) (94,005) (2,262) (123) (128,890)
25,617 (33,601) 140,237 (109,095) 23,158
(1,201) (2,989) (2,633) (112) (6,935)
261,053 169,804 188,795 669,203 969,059 56,472 8,164 2,322,550
Accumulated depreciation : Office buildings and office improvements Factory buildings Machinery and equipment Office furniture and equipment Vehicles Total accumulated depreciation Property plant and equipment-net
78,537 53,296 416,769 478,988 31,838 1,059,428 1,090,448
4,816 9,368 85,546 129,704 8,221 237,655
(4,151) (24,495) (80,448) (2,382) (111,476)
4,355 (26,744) 25,065 (67) 2,609
(241) (1,797) (1,580) (46) (3,664)
83,316 62,664 449,279 551,729 37,564 1,184,552 1,137,998
Depreciation for the years ended December 31, 2007 2006
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Balances Additions as at December 31, 2006
237,655 209,668
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Thousand Baht Separate Financial Statements
Balances Additions as at December 31, 2006
Disposals
Transfers/ Reclassified
Balances as at December 31, 2007
Cost : Land Office buildings and office improvements Factory buildings Machinery and equipment Office furniture and equipment Vehicles Construction in progress Total cost
255,467 55,455 188,795 552,663 799,202 50,806 39,691 1,942,079
5,586 277 42,050 84,878 4,983 77,479 215,253
(7,416) (21,176) (87,134) (2,261) (117,987)
16,223 91,558 (109,095) (1,314)
261,053 48,316 188,795 589,760 888,504 53,528 8,075 2,038,031
Accumulated depreciation : Office buildings and office improvements Factory buildings Machinery and equipment Office furniture and equipment Vehicles Total accumulated depreciation Property, plant and equipment-net
42,710 53,295 342,624 452,671 30,609 921,909 1,020,170
3,438 9,369 76,440 120,427 7,596 217,270
(4,151) (20,722) (75,111) (2,188) (102,172)
(1,008) (1,008)
41,997 62,664 397,334 497,987 36,017 1,035,999 1,002,032
Depreciation for the years ended December 31, 2007 2006
217,270 184,770
Depreciation of the plant and equipment of the Company and its subsidiaries for the years ended December 31, includes in cost of sales and services and selling and administrative expenses, consist of : Thousand Baht
Cost of sales and services Selling and administrative expenses Total
Consolidated Financial Statements 2007 2006
Separate Financial Statements 2007 2006
93,110 144,545 237,655
93,044 124,226 217,270
80,371 129,297 209,668
80,238 104,532 184,770
As at December 31, 2007 and 2006, the cost value before accumulated depreciation of plant and equipment which was fully depreciated but still in use of the Company and its subsidiaries, amounted to Baht 525.58 million and Baht 449.53 million, respectively.
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10.
INTANGIBLE ASSETS - NET Intangible assets-net as at December 31, consist of : Thousand Baht Consolidated Financial Statements
Software Leasehold development costs
Cost : Ending balances as at December 31, 2006 Increase Decrease Reclassification Exchange differences on translation of the financial statements of foreign subsidiaries Ending balances as at December 31, 2007 Accumulated Amortization : Ending balances as at December 31, 2006 Written-off Decrease Reclassification Exchange differences on translation of the financial statements of foreign subsidiaries Ending balances as at December 31, 2007 Net Book Value As at December 31, 2006 As at December 31, 2007
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Goodwill Goodwill Negative goodwill
Total Goodwill
Total
2,159 1,568 -
372,323 2,530 (3,000 ) (25,617 )
126,904 -
(2,063) -
124,841 -
499,323 4,098 (3,000) (25,617)
3,727
(1,972 ) 344,264
126,904
(2,063)
124,841
(1,972) 472,832
947 648 -
211,621 22,584 (3,000) (4,355 )
126,904 -
(1,935) (11) -
124,969 (11) -
337,537 23,221 (3,000) (4,355 )
1,595
(1,375 ) 225,475
126,904
(1,946)
124,958
(1,375 ) 352,028 161,786 120,804
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Thousand Baht Separate Financial Statements
Software development costs
Cost : Ending balances as at December 31, 2006 Increase Decrease Ending balances as at December 31, 2007 Accumulated Amortization : Ending balances as at December 31, 2006 Written-off Decrease Ending balances as at December 31, 2007 Net Book Value As at December 31, 2006 As at December 31, 2007
Leasehold
Total
2,159 1,568 3,727
301,676 2,530 (3,000 ) 301,206
303,835 4,098 (3,000) 304,933
947 648 1,595
179,597 19,211 (3,000 ) 195,808
180,544 19,859 (3,000) 197,403 123,291 107,530
Amortization of intangible assets for the years ended December 31, 2007 and 2006, included in selling and administrative expenses and other incomes, consist of :
Selling and administrative expenses Other income Total 11.
Consolidated Financial Statements 2007 2006
Thousand Baht Separate Financial Statements 2007 2006
23,232 (11) 23,221
19,859 19,859
21,539 (206) 21,333
17,850 17,850
OTHER non-current assets Other non-current assets as at December 31, consist of :
Long-term deposit Pledged time deposits (see Note 19) Other Total
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Consolidated Financial Statements 2007 2006
Thousand Baht Separate Financial Statements 2007 2006
102,592 1,941 370 104,903
82,792 1,941 389 85,122
85,426 1,941 485 87,852
74,986 1,941 487 77,414
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12.
WARRANTS TO PURCHASE COMMON SHARES On April 9, 2002, S&P Syndicate Public Company Limited issued warrants to purchase common shares in the amount of 35 million units according to the resolution of the Meeting of the Board of Directors held on March 28, 2002. The details are as follows : 12.1 Offer Method 12.1.1 30 million units : To be offered to existing shareholders of the Company on the closing date of share registration on October 10, 2001 at the ratio of two existing shares to one warrant (Any fraction of shares shall be disregarded.) 12.1.2 5 million units : To be offered to the public who subscribe to the new common shares of the Company at the ratio of two newly issued shares to one warrant (Any fraction of shares shall be disregarded.) 12.2 Offer price per unit : Baht nil 12.3 Exercise Ratio : One warrant entitled to purchase one common share, subject to adjustment of the exercise ratio. 12.4 Exercise Price : Baht 18 per share 12.5 Life of Warrants : Five years from the date of warrant issue (April 9, 2007) 12.6 Exercise Period : Every three months, within the last business day of March, June, September and December. The first exercise may be made on the last business day of June 2003. The Company has registered the warrants to purchase common shares with the Stock Exchange of Thailand (“SET�) as listed securities and the SET approved such listing from May 10, 2002. During the year 2006, warrants to purchase common shares were exercised for 13,506,800 units shares at Baht 18 each, totalling Baht 243,122,400. The Company issued 13,506,800 common shares for the capital increases intended for such warrants exercise at Baht 18 each. The capital increases were registered with the a. The increase in share capital of 415,500 common shares at Baht 18 each was registered on April 10, 2006. b. The increase in share capital of 439,000 common shares at Baht 18 each was registered on July 14, 2006. c. The increase in share capital of 1,213,400 common shares at Baht 18 each was registered on October 6, 2006.
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d. The increase in share capital of 11,438,900 common shares at Baht 18 each was registered on January 11, 2007. During the year 2007, warrants to purchase common shares were exercised for 4,225,673 units at Baht 18 each, totalling Baht 76,062,114. The Company issued 4,225,673 common shares for the capital increases intended for such warrants exercise at Baht 18 each. The capital increases were registered with the Ministry of Commerce on April 18, 2007. As at December 31, 2007, the balance of unexercised warrants are 313,727 units which has been expired on April 5, 2007 (the last maturity date). The Company will register the decrease of the registered share capital of 313,727 units which were reserved for such unexercised warrants with the Ministry of Commerce after the approval of the Annual Ordinary Shareholders’ Meeting. 13.
EARNINGS PER SHARE Earnings per share as at December 31, 2007 and 2006 consist of :
Consolidated Financial Statements
Basic earnings per share Net profit Effect of conversion of all dilutive potential ordinary shares Warrants Diluted earnings per share Net profit attributable to shareholders assuming the conversion of all warrants into common shares
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Net Profit
(Thousand Baht) 2007 2006
Weighted average number of ordinary shares (Thousand Shares) 2007 2006
181,774
103,633
87,825
-
1,428
103,633
89,253
181,774
226,793
226,793
Earnings per share
(Baht) 2007 2006 1.75
2.58
1.75
2.54
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Separate Financial Statements
Net Profit
(Thousand Baht) 2007 2006 (Restated) Basic earnings per share Net profit Effect of conversion of all dilutive potential ordinary shares Warrants Diluted earnings per share Net profit attributable to shareholders assuming the conversion of all warrants into common shares 14.
176,520
176,520
181,632
181,632
Weighted average number of ordinary shares (Thousand Shares) 2007 2006
103,633
87,825
-
1,428
103,633
89,253
Earnings per share
(Baht) 2007 2006 (Restated)
1.70
2.07
1.70
2.03
TRANSACTIONS WITH RELATED PARTIES The Company has transactions with its subsidiaries, associated and other related parties. Certain portions of the Company’s assets, liabilities, sales, other income, costs of sales and selling and administrative expenses represent transactions occurred with its subsidiaries, associated and other related parties. These parties are related through common shareholders and/or directorships. Those transactions with subsidiaries, associated and other related parties as included in the financial statements are determined at the prices in line with those occur in the normal course of business based on the market price in general or the price as stipulated in the agreement if no market price exists. The significant balances of assets, liabilities and other transactions occurred with those parties are shown as follows :
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Transactions with related parties for the years ended December 31, 2007 and 2006 are as follows : Consolidated Financial Statements 2007 2006 Subsidiaries : Revenues from sales Rental income from buildings and equipment Other income Purchases of goods/services Dividend received
-
-
Thousand Baht Separate Financial Statements 2007 2006 272 360 661 4,727 20,000
449 180 272 4,179 -
Associates : Revenues from sales Rental income from buildings and equipment Other income Share of profits from investments recorded by the equity method Purchases of goods/services Dividend received
629 444 885
972 350 358
629 444 885
972 350 358
4,146 15,339 -
10,806 15,281 -
15,339 6,773
15,281
Other Related Parties : Rental income from buildings and equipment Directors’ remuneration
2,712 16,229
2,742 19,406
2,712 9,438
2,742 9,955
Selling prices of goods and purchasing prices of goods/services are determined by market price. Balances with related parties as at December 31, 2007 and 2006 are as follows : Consolidated Financial Statements 2007 2006 Trade Accounts Receivable (Included in the trade accounts receivable) Subsidiaries Associates Other related companies Total Trade Accounts Receivable - Net
05-S&P-P97-135.indd 127
284 3,211 3,495
593 378 971
Thousand Baht Separate Financial Statements 2007 2006
71 284 355
212 593 805
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Consolidated Financial Statements 2007 2006 Short-term Loans to Related Parties (interest rate per annum) Subsidiaries : S&P Global Co., Ltd. (1.25% - 1.5%) Seriwat Foods Co., Ltd. (No interest) S&PizZanotti (Thailand) Limited (No interest) S&P Kitchen Sdn. Bhd. (No interest)
-
1,691
22 134 -
469 501 632 -
Associates : HD Distributors (Thailand) Co., Ltd. (No interest) Patara Developments SA (6.0%)
131 -
432 1,475
131 -
432 -
Related company : Other company Total Short-Term Loans to Related Parties - Net
272 403
123 3,721
287
2,034
53,805 53,805
240 56,418 56,658
49,998 48,998 98,996
56,997 48,998 105,995
4,284 4,284
4,126 4,126
92 4,284 4,376
283 4,126 4,409
Investments in subsidiaries and associated companies Subsidiaries Associates Total Trade Accounts Payable (Included in trade accounts payable) Subsidiaries Associates Total
Consolidated Financial Statements 2007 2006 Short-term loans (interest rate per annum) Subsidiaries : S&P Global Co., Ltd.(No interest) S&P Kitchen Co., Ltd. (1.5%) Seriwat Foods Co., Ltd. (No interest) Associates : HD Distributors (Thailand) Company Limited (No interest) Total
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Thousand Baht Separate Financial Statements 2007 2006
Thousand Baht Separate Financial Statements 2007 2006
-
-
158 -
135 7,175 1
113 113
357 357
113 271
357 7,668
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Movements of short-term loans to related parties in the consolidated financial statements. For the year ended December 31, 2007 : Subsidiaries Balances as at December 31, 2006 Increase during the year Decrease during the year Balances as at December 31, 2007
1,691 (1,691 ) -
In Thousand Baht Associates Other related Total parties 1,907 947 (2,723 ) 131
123 149 272
3,721 947 (4,265 ) 403
For the year ended December 31, 2006 : Subsidiaries Balances as at December 31, 2005 Increase during the year Decrease during the year Bad debt written-off during the year Balances as at December 31, 2006
1,785 6 (100) 1,691
In Thousand Baht Associates Other related Total parties 4,688 24,852 (27,633) 1,907
19,650 4,105 (5,322) (18,310) 123
26,123 28,963 (33,055) (18,310) 3,721
Movements of short-term loans to related parties in the separate financial statements. For the year ended December 31, 2007 : Subsidiaries Balances as at December 31, 2006 Increase during the year Decrease during the year Balances as at December 31, 2007
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1,602 18,639 (20,085) 156
In Thousand Baht Associates Total 432 946 (1,247) 131
2,034 19,585 (21,332) 287
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For the year ended December 31, 2006: Subsidiaries Balances as at December 31, 2005 Increase during the year Decrease during the year Bad debt written-off during the year Balances as at December 31, 2006
182 19,410 (17,990) 1,602
In Thousand Baht Associates Other related Total parties 2,685 23,037 (25,290) 432
5,655 (5,655) -
8,522 42,447 (43,280) (5,655) 2,034
Movements of short-term loans from related parties in the consolidated financial statements. For the year ended December 31, 2007 : In Thousand Baht Associates Total Balances as at December 31, 2006 Increase during the year Decrease during the year Balances as at December 31, 2007
357 3,726 (3,970 ) 113
357 3,726 (3,970) 113
For the year ended December 31, 2006 : In Thousand Baht Associates Total Balances as at December 31, 2005 Increase during the year Decrease during the year Balances as at December 31, 2006
354 4,266 (4,263 ) 357
354 4,266 (4,263) 357
Movements of short-term loans from related parties in the separate financial statements. For the year ended December 31, 2007 : Subsidiaries Balances as at December 31, 2006 Increase during the year Decrease during the year Balances as at December 31, 2007
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7,311 533 (7,686) 158
In Thousand Baht Associates Total 357 3,726 (3,970) 113
7,668 4,259 (11,656) 271
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For the year ended December 31, 2006 : Subsidiaries Balances as at December 31, 2005 Increase during the year Decrease during the year Balances as at December 31, 2006 15.
133 7,845 (667) 7,311
In Thousand Baht Associates Total 340 4,267 (4,250 ) 357
473 12,112 (4,917 ) 7,668
LEGAL RESERVE The legal reserve is an amount to be provided as a reserve fund as prescribed by law. The Company has to allocate not less than five percent of its annual profits less the accumulated losses brought forward (if any) to the reserve fund until this fund attains an amount not less than ten percent of the registered capital. The legal reserve may not be used for dividend payment.
16.
APPROPRIATION OF EARNINGS AND DIVIDEND The Company’s Ordinary Shareholders’ Meeting held on April 20, 2006 approved a dividend payment for 86,953,800 shares at Baht 1.60 per share, totaling Baht 139.12 million approximately and paid on May 9, 2006. In addition, the meeting also approved the appropriation of legal reserve amounting to Baht 6.05 million approximately. Subsequently, on August 15, 2006, the Company’s Board of Directors’ meeting passed a resolution to pay interim dividend for 87,808,300 shares to shareholders at Baht 0.45 per share totaling Baht 39.51 million approximately. The Company paid such dividend on September 14, 2006. The Company’s Ordinary Shareholders’ Meeting held on April 19, 2007 approved a dividend payment for 100,460,600 shares at Baht 1.55 per share totaling Baht 155.71 million approximately. The payment was made on May 9, 2007. In addition, the meeting also approved the appropriation of legal reserve amounting to Baht 6.75 million approximately. Subsequently, on August 14, 2007, the Company’s Board of Directors’ Meeting passed a resolution to pay interim dividend for 104,686,273 shares to shareholders at Baht 0.25 per share totaling Baht 26.17 million approximately. The Company paid such dividend on September 14, 2007.
17.
PROVIDENT FUND The Company established the provident fund in compliance with the Provident Fund Act B.E. 2530. The fund receives voluntary contributions from employees. Under the fund’s regulations, the members contribute 2% of their monthly earnings to the fund while the Company contributes 2% of such earnings.
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Members are entitled to their whole contributions plus net benefit thereon, and the Company’s contributions plus benefits thereon at the rates depending on their period of service as prescribed by the regulations of the fund. For the years ended December 31, 2007 and 2006, the Company’s contribution and subsidiaries contribution to provident fund which was recorded as expense in the consolidated statement of income were Baht 9.10 million and Baht 8.42 million, respectively. For the years ended December 31, 2007 and 2006, the Company’s contribution to the provident fund which was recorded as expenses in the separate statement of income were Baht 8.94 million and Baht 8.26 million, respectively. 18.
DISCLOSURE OF FINANCIAL INSTRUMENTS The Company presents and discloses financial instruments as follows : 18.1
Accounting Policies Details of significant accounting policies are disclosed in Note 3.
18.2
Credit Risk Credit risk refers to the risk that counterparts will default on its trading terms and conditions resulting in collection to the Company and subsidiaries. Concentrations of credit risk are limited since the Company and subsidiaries have adopted the policy of dealing with creditworthy counterparty as a mean of mitigating the risk of financial losses from defaults. In case of recognized financial assets in the balance sheet the carrying amounts of the assets recorded in the balance sheet represent the Company’s maximum exposure to credit risk.
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18.3
Interest Rate Risk Interest rate risk arises from the potential for a change in interest rate to have an adverse effect on the Company in the current reporting period and in future years. The Company does not expect to incur material incremental effect on its interest expenses because loan of the Company and subsidiaries is insignificant amount.
18.4
Foreign Exchange Risk Foreign exchange risk arises from the potential for a change in foreign exchange rate to have an adverse effect on the Company and subsidiaries in the current reporting period and in future years. The Company does not expect to incur material incremental effect on its financial assets or liabilities in foreign currency as the majority of its businesses are engaged in Thai Baht.
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18.5
Estimated Fair Value of Financial Instruments Thai Accounting Standard No. 48 “Financial Instruments Disclosure and Presentation� requires certain fair value disclosures. Considerable judgement is necessarily required in estimation of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amount that could be realized in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The following methods and assumptions were used by the Company in estimating fair value of financial instruments : Cash and cash equivalents, current investments, trade accounts receivable, short-term loans to related parties, bank overdraft and short-term loans from financial institutions, trade accounts payable and short-term loans from related parties; the carrying values approximate their fair values due to the relatively short period to maturity. Investments in related parties: fair value for investments are as disclosed in note 3.
19.
SEGMENT INFORMATION The Company and its subsidiaries have been engaged in the food and bakery business. All business activities of the Company and its subsidiaries shall be classified by segments, based on revenues and results of operations, for each of years ended December 31, 2007 and 2006 for the Company and its subsidiaries as follows : For the year ended December 31, 2007 : Thousand Baht Classified by Geographical Areas Revenues Net profit before minority interest Assets as at December 31, 2007
Local
Overseas
Total
3,374,463 144,902 2,227,132
702,312 48,954 290,382
4,076,775 193,856 2,517,514
For the year ended December 31, 2006 : Thousand Baht Classified by Geographical Areas Revenues Net profit before minority interest Assets as at December 31, 2006
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Local
Overseas
Total
3,104,051 193,152 2,105,251
695,944 52,097 293,210
3,799,995 245,249 2,398,461
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20.
ASSETS USED AS COLLATERAL As at December 31, 2007 and 2006, cash at banks of the Company in the approximate amount of Baht 1.94 million was pledged as collateral against letters of guarantee from a bank for electricity usage (see Note 21).
21.
OBLIGATIONS AND CONTINGENT LIABILITIES As at December 31, 2007 and 2006 the Company and its subsidiaries had obligations and contingent liabilities as follows : a. Commitments to pay rental under long-term lease contracts and hire purchase contracts as follows :
Currencies Branch rental expenses
Lease and hire-purchase vehicle expenses
Million Baht Million Pound Sterling Million Baht
Within 1 Year 2007 2006
2-5 Years 2007 2006
151.24 152.81 184.65 226.95
Over 5 Years 2007 2006 29.49
Total 2007
2006
28.76 365.38 408.52
0.38
0.38
1.26
1.40
0.65
1.00
2.29
2.78
1.38
2.95
0.53
1.91
-
-
1.91
4.86
b. As at December 31, 2007 and 2006, the Company had outstanding capital commitments relating to hire and purchase of materials for the construction of a new factory and branches in the amount of Baht 2.58 million and Baht 20.58 million, respectively. c. As at December 31, 2007 and 2006, an obligation under a letter of guarantee issued by the commercial banks for electricity usage amounting to Baht 24.93 and Baht 28.27 million, respectively (see Note 20). d. Amounts of unutilized loan facilities are as follows :
Short-term loans Bank overdrafts Letters of guarantee FOREX Credit limit Total
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In Million Baht 2007 2006
In Million Pound Sterling 2007 2006
In Million US Dollars 2007 2006
474.90 101.00 184.15 20.00 780.05
0.40 0.40
4.40 4.40
468.30 101.00 129.50 698.80
0.40 0.40
5.30 5.30
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e. In 2006, the Company has contingent liabilities from guarantee for the credit facilities of a subsidiary company in the amount of Baht 1.50 million. In 2007, the Company has cancelled the guarantee for the credit facilities. 22.
RECLASSIFICATION Certain accounts have been reclassified in the consolidated and the separate financial statements for the year ended December 31, 2006 to conform to the reclassification used in the consolidated and the separate financial statements for the year ended December 31, 2007 as follows : - Time deposits - 3 months amounting to Baht 30.87 million, which was previously included as part of cash and cash equivalents has been reclassified to be included in current investments. - Building of an overseas subsidiary amounting to Baht 20.86 million, which was previously included as part of leasehold has been reclassified to be included in property, plant and equipment. - Revenues for sales of other products for the year ended December 31, 2006 in the amount of Baht 21.43 million, which were previously included as part of other incomes have been reclassified to be included in sales and service incomes. - Dividend income for the year ended December 31, 2006 in the amount of Baht 1.63 million, which was previously included as part of other incomes has been separately presented as dividend received.
23.
APPROVAL OF THE FINANCIAL STATEMENTS These financial statements have been approved for issue by the authorized director of the Company on February 13, 2008.
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Connected Transactions (1) Revenues In Million Baht Related parties
Nature of transaction
2006
2007
S&P Global Co., Ltd.
Rental of premises and equipment Revenue of goods Dividend received Revenue from services Rental of premises and equipment Revenue from services Revenue of goods Dividend received
0.18 0.45 0.27 0.35 0.35 0.97 -
0.39 0.37 20.00 0.56 0.44 0.88 0.63 6.77
S&PizZanotti (Thailand) Co., Ltd. HD Distributors (Thailand) Co., Ltd.
(2) Purchase of goods and services In Million Baht Related parties
Nature of transactions
2006
2007
Seriwat Foods Co., Ltd. S&P Asset Co.,Ltd. S&PizZanotti (Thailand) Co., Ltd. HD Distributors (Thailand) Co., Ltd. S.R. Estate Co., Ltd. The Company’s Directors
Purchase of goods and services Rental of premises and services Purchase of goods Purchase of goods and services Rental of premises Rental of offices and storage
0.10 3.59 0.49 15.28 0.43 2.31
3.19 1.54 15.34 0.43 2.28
Nature of transaction Purchase of goods, rental of premises Purchase of goods
In Million Baht 2006 2007 0.29 0.28 0.07
Outstanding transactions (1) Accounts receivable Related parties HD Distributors (Thailand) Co., Ltd. S&PizZanotti (Thailand) Co., Ltd.
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(2) Borrowings Provided by the Company In Million Baht Related parties
Nature of transaction
Brought Additional Repayment Write-off Carried forward borrowing over -
Interest received -
Provided by S&P Global Co., Ltd. In Million Baht Related parties Siam Kitchen SDN. BND (Malaysia) Patara Development S.A.
Nature of transaction
Brought Additional Repayment Write-off Carried
Interest
forward borrowing
over
received
Short term borrowing
1.69
-
(1.69)
-
-
-
Short term borrowing
1.47
-
(1.47)
-
-
-
Note * The Company has write-off for doubtful debt in full / borrowings, repayment made from repayment and exchange rate gains
(3) Accounts payable In Million Baht
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Related parties
Nature of transaction
2006
2007
S&P Asset Co.,Ltd. S&PizZanotti (Thailand) Co., Ltd. HD Distributors (Thailand) Co., Ltd.
Rental of premises and equipment Purchase of goods Purchase of goods
0.10 0.18 4.13
0.09 4.28
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Audit Committee’s Report The Audit Committee comprises 3 independent directors, who are Miss Cattley Saengsastra as the Audit Committee Chairman and Mr. Dusit Nontanakorn and Miss Sophavadee Uttamobol as Audit Committee members. Each of them is not an executive officer or employee of the Company. The Manager of the Operational System Support and Inspection Department is the Audit Committee Secretary. The Audit Committee has been appointed by the Board of Directors to perform the duties for the examination of information relating to financial reports, internal audits and audits performed by certified public accountants, as well as compliance with laws, rules and requirements of the Stock Exchange, in accordance with the scope of performance, duties and responsibilities stipulated in the Audit Committee Charter approved by the Board of Directors Meeting and conforming to the requirements of the Stock Exchange of Thailand, and to report to the Board of Directors. For 2007, the Audit Committee held 4 meetings to perform the duties under the scope of responsibilities entrusted by the Board of Directors. These duties included the examination of both quarterly and annual financial reports and statements and the inspection of the internal control system. The Committee met with the external auditor, the Internal Audit Department, the Deputy Vice President for Accounting and Corporate Plan, the Law Office Manager, and the Management concerned, to ensure that the Company’s financial reports and statements had been prepared in conformity with accepted accounting standards and that information had been correctly and sufficiently disclosed, and to make improvements in order that the internal control system became more efficient; that there would be a system for the management of risks and other factors that might produce significant effects on the business operations of the Company; that pertinent laws were complied with; that the principle of good corporate governance was observed; and that discussions were made and opinions exchanged regarding audit results, quality assessments on various aspects and the sufficiency of the internal control system. To this, the Audit Committee endeavored to encourage and push the Company to comply with the good practices of a listed company. The Internal Audit Department took steps to examine the accounting process and the performance of the Company and its subsidiaries systematically, and to prepare audit reports for submission to the executives and the Audit Committee in order to determine a future operational plan. The Audit Committee also made reviews and made recommendations to the Board of Directors and the executives to ensure that internal control defects would be made good and prevented with efficiency and within an appropriate time.
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The Audit Committee performed its duties independently of the Board of Directors and the Management. It reported the results of its meetings and the performance of its duties to the Board of Directors. In addition, in the performance of its duties, the Audit Committee proposed the auditor’s name and her/his remuneration for 2008 to the Board of Directors in order that she/he would be proposed for appointment by resolution of the meeting of shareholders of the Company.
Cattleya Saengsastra Chairman, Audit Committee February 17, 2008
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Risk Factors Risk associated with Political Uncertainty Political uncertainty continued during 2007, making people more cautious and selective in their spending. As the year moved towards elections in December, the political situation improved, creating greater consumer confidence and increased spending. Nevertheless, consumers remained selective, showing a preference for trusted quality brands like S&P.
Risk associated with Foreign Currency Exchange Strengthening of the baht currency in 2007 and the turbulence created by the falling US dollar caused fluctuations in the foreign currency exchange rate, which affected the Company’s revenues from its international restaurant operations and frozen food exports. The risk was limited through the Company’s risk management.
Risk associated with Rental Contracts The Company has the policy to rent space for its restaurants, bakeries and coffee corners preferably in high traffic, high profile locations. In the past, the site owners have very good response to the Company’s rental with favorable contract terms and are good partners with the Company. This is mainly due to the Company’s solid reputation which has been well accepted in the business for more than 30 years, its products acceptance by customers, as well as more than 200 branches and shops of the Company throughout the country especially in famous and large shopping center. Thus, the chance of non extensions of the contracts or changes of the terms or rental rates to be higher than the market rate should be minimal.
Risk associated with Rising Costs The costs of doing business, particularly raw materials, power and delivery overheads, rose throughout the year, pushed by rising oil and transportation costs. At the same time, intense competition in the restaurant and food retail businesses hindered normal price adjustments, leading to reduced profit margins. In order to maintain profitability, the Company turned to streamlining operations, making them more efficient and cost effective.
Risk associated with Economic Factors The slow-down in the Thai economy, caused by many international factors including a sluggish world economy, high oil prices, and bank problems in the US and Europe, has led to a decline in the purchasing power of consumers, who became more selective in their spending. The Company has worked hard to offset this and protect its market share by offering a variety of new quality products, specialized efficient catering services, and targeting consumers with discount offers through its popular S&P Joy Card.
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Economic and Competition The slowdown in the Thai economy during 2007 made Thais more careful in their spending habits. While restaurants benefitted from an increased tendency for people to eat out more, due to the modern lifestyle of working families with no time to cook at home, consumers also demanded more for their money – good quality, healthy food, clean and hygienic surroundings, friendly service, and reasonable prices. Restaurants were also expected to provide additional services, such as home and office delivery, and outside catering for events. Revenue from the restaurant business in Thailand is expected to increase by 5 percent in 2008 to 100,000 million baht (Kasikorn Research Center). However, the potential for increased earnings is tempered by stronger competition as many more newcomers enter the restaurant sector, especially smaller establishments looking for good returns on limited investments. Restaurants that have good organization, friendly service, offering healthy food that is hygienic, tasty and value for money are likely to be more successful. Sales from bakery products, particularly cakes and cookies, continue to grow as they become more acceptable to Thai consumers. However, competition is intense as it is not expensive for people to enter this market segment, with quick returns through aggressive marketing and discounted sales. Revenue from bakery products is likely to increase by 5 percent in 2008, rising to 7,100 million baht (Kasikorn Research Center). The lower end of the market will increase more than the high end as consumers show a preference for modestly priced products. Profit margins may be reduced as the costs of raw materials continue to rise due to consistently high oil prices and growing transportation costs.
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Major Events In 2007, our products in Disney group, i.e. cakes, cookies, moon cake, were such outstanding and popular that the Company decided to extend the contract with Disney (Fun Character International (Thailand) Co., Ltd) in July 2007. In addition, our products in other category also got good responses i.e. Almond Merinque Gâteau, Hi-calcium milk bread. Also our Japanese product group, i.e. Dorayaki, was very popular. The Company also developed our human resources by opening S&P Syndicate Public Company Limited Learning Center of Vocational certificate curriculum (Vocational Certification of Retail Business Management) to enhance the academic opportunity and to develop the quality to our employees and outside people. This center provides not only learning from real experiences but also provides the job after the graduation. Moreover, we trained our talented and capable employees to join “Thailand Barista 2007 championship” and got the winner prize from HRH Princess Soamsavali Phravararajatinuddamatu, which brought high reputation to both the employees and the Company. The award and certificates of the Company during the year 2007 are as follows : April - Thailand Barista Championship 2007, awarded HRH Princess Soamsavali Phravararajatinuddamatu in Thailand Coffee & Tea Festival 2007 June - The best entrepreneur in the category of good production systems according to GMP (Good Manufacturing Practice) and HACCP (Hazard Analysis and Critical Control Point) from the Department of Agriculture Ministry of Agriculture and Cooperatives in 2007 October - Certificate on quality system of three foods production lines from TUV NORD (Thailand) Co.,Ltd and INTEGRA Co.,Ltd, Belgium as follows ISO 22000 Food Safety Management Systems IFS International Food Standard BRC Global Standard Food
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November - Certificate and Symbol from office of Tourism Development on Thai tourism standard of the year 2007 for the branch at Grand Seaside, Sriracha and the branch at Suvanabhumi December - The Best Improvement Award for Perishable Goods Supplier Category in 2007 from Central Food Retails Co.,Ltd. As for the social, the Company continuously supports the activity for children by providing the opportunities to the youths to practice their imagine and ideas in creating their own cake decoration i.e. Jak - ka – Jee Happy Bakery School Tour, conducting booth in Rak Ruke Festival and Kids of The World festival. In addition, we had S&P Junior Summer Camp 2007 and the activity to enhance the love in family like the cooking class in “Cooking with Mom” and “This meal for Dad”. Also, the Company has consistency conducted the projects for the disadvantages i.e. donating cakes to several foundations during New Year festival under “Cake A Wish Make A Wish” project and conducting the special round animation movies to “Disadvantaged Children Foundation” under “S&P, smile filling to youths” program. In 2007, the Company expanded our restaurant business by opening 11 new restaurants and 16 bakery outlets, also we launched the new business by opening Vanilla Garden which combined the Chinese restaurant “Royal Vanilla”, Japanese restaurant “Vanilla Café”, and book store “Sauce” in the same restaurant, to serve our target customer broader.
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Future Plans • Innovation and creativity have always been a key vision of S&P. During 2008, the Company will emphasize the need for our management and staff to be more innovative and creative in the way they think, work and do things in order to raise performances in all areas of operation. • To maintain growth domestically in 2008, the Company intends to open new restaurant, bakery and coffee corner branches, concentrating on major provinces and towns with high potential outside of Bangkok. This is in line with our aim to strengthen our presence throughout Thailand. • Our mission is to be the number one restaurant and bakery brands within each community where we operate. This can be achieved by providing high quality products, meals and service – making S&P synonymous with Quality. The Company will continue to improve the performance of all our outlets, ensuring efficient operations, high standards of friendly service and the very best food products and meals. • To help raise our outlet performance, the Company will continue to emphasize its training schemes during the year and add in special courses to improve management skills at all levels. • Over the next three years, the Company will make overseas expansion one of its main priorities. Our aim is to open more restaurants in Europe and explore new markets in Asia and Australia with a view to establishing new restaurants through JV partnerships. • To take advantage of the popularity of ready-made Thai food in overseas markets, the Company will look into the possibility of establishing food manufacturing facilities in other countries, particularly within Europe. In addition, we will explore new markets for the export of Thai food made in Thailand.
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0145 Analysis of Operating Performance and Financial Status of S&P and its subsidiaries for the year 2007
In 2007, S&P and its subsidiaries (“the Company”) recorded total revenue of Baht 4,014 million, increased by Baht 287 million or 7.7% compared to last year. Revenues from domestic restaurant and bakery businesses accounted for 83% whereas the proportion of overseas’ restaurant was 17% of total revenues. The company’s net income was Baht 182 million, decreased by Baht 45 million or 20% year-on-year (YoY). As of the end of 2007, the Company’s total assets stood at Baht 2,518 million, increased by Baht 119 million or 5% compared to the end of 2006. The major contribution of this rise are (1) cash and short term investments increased by baht 105 million due to the grow of cash sales which was consistent to the decrease in our account receivables (2) the Company increased the level of raw materials in stock by the end of 2007 due to the expectation of the sharp rise in these raw material price in 2008. This resulted in boosting up of the inventory by Baht 35 million or 26% compared to last year In term of liabilities, the Company recorded the addition in total liabilities by Baht 50 million. The main reasons are (1) the increase in account payables due to the purchase of raw material during the year (2) the increase in other liabilities by Baht 29 million due to the accrued expense to the contractors for the new branches and (3) the rise of accrued corporate income tax since the tax rate has been stepped up from 25% to 30% in this year and also the rise in other accrued tax expenses in December 2007. The shareholders’ equities of the Company at the end of 2007 have been enhanced by baht 70 million YoY, stood at Baht 1.961 million. The major contribution of this increase came from the exercise of the warrants. In term of cash flow, the Company still be able to maintain the growth of its operating cash flow at the satisfactory level. In 2007, the Company’s operating cash flows increased to Baht 473 million from Baht 421 million last year. While the cash investment in 2007 also increased to Baht 619 million from Baht 310 million in 2006. This major items of investing cash flows in 2007 comprised of (1) the net investment in debt’s mutual fund of Baht 360 million, (2) the investment in new branches and the renovation of the existing branches of Baht 116 million, (3) the investment in machines and equipments of Baht 70 million and (4) the purchase of the resident for the employees in London of Baht 60 million. In addition, the Company had used cash flows for financing activities of Baht 105 million, comprised of the dividend payment of Baht 182 million which is offset by the cash inflow from the warrants exercise of Baht 76 million. As a result, in summary, the Company reported the decrease in net cash flows of approximately Baht 265 million in 2007.
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Revenue breakdown by the distribution channels The Company’s revenue breakdown by distribution channels are as follows: Unit : Baht in millions Distribution channels Domestic restaurant and bakery businesses Overseas restaurant business Frozen food and bakery trading business Others Total
Inc (Dec)
2007
%
2006
2,993
75
2,704
73
289
11
693
17
686
18
7
1
325
8
337
9
(12)
(4)
2
200
286
8
3 4,014
100
1 3,728
%
100
%
Domestic restaurant and bakery businesses As of 2007, the Company had domestic restaurant and bakery shops totaling of 286 branches, comprising restaurant and bakery shops under “S&P” brand of 260 branches, “Patio” of 2 branches, “Vanilla” of 4 branches, a branch of “Grand Seaside” and a branch of “Simply Thai”. In this year, the Company opened totaling of 27 new branches and also closed down some non-profit branches. In 2007, the Company reported a solid growth of 6% for our domestic restaurant and bakery business by increasing to Baht 2,704 million from Baht 2,993 million last year. The main reasons are 6% rise in revenue per branch together with the opening for new outlets. In addition, we also present the restaurant in more modernized concepts i.e. the launch of “Vanilla Garden”, which is very popular among the teenagers and working aged customers, as well as the adaptation of the menu to increase the varieties of the products. Moreover, the Company consistently conducted the marketing campaigns i.e. the lucky draw for overseas trip, and also continuously had the activities to enhance the family relationship.
Overseas restaurant business For the overseas’ restaurant business, our 2007 revenue were reported at Baht 693 million, increased by Baht 7 million or 1% YoY. However, if we excluded the impact from foreign exchange, this business will record a growth of 4% YoY. In 2007, the Company did not launch any new branches overseas since we already expanded a lot in the past year. Thus in 2007, we shifted to focus on the renovation of the branches and the rebranding to match with the need of the target customers. For the operating results of this business, our net margin was still at satisfactory level of 6%. In addition, the company is under the study of the feasibility to launch the new restaurants in other countries i.e. Japan and Australia.
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Frozen foods and bakery trading business In 2007, Frozen foods and bakery trading business recorded the decrease in sales by Baht 12 million or 4% YoY. The main factor is the decline in sales from outsourcing business. However, in this year, the Company improved this business’s gross margin and operating margin by 2%. During this year, the Company also launched the new products for the frozen foods and distributed via the convenience store and superstores throughout the country.
Revenue breakdown by types of products The Company’s revenue breakdown by product lines are as follows : Unit: Baht in millions %
42
Inc (Dec) 104
1,052
28
160
15
17
686
18
7
1
297
7
288
8
9
3
Outsourcing
109
3
94
3
15
16
Drymix
17
-
26
1
(9)
(35)
4,014
100
3,728
100
286
8
Product lines
2007
%
2006
%
Bakery
1,686
42
1,582
Domestic restaurant
1,212
30
Overseas restaurant
693
Frozen foods
Total
7
In year 2007, the Company increased the varieties of bakery products line i.e. chocolate filling bread, gateau, and new pizza. Likewise, for the food products, the Company also increased the health menu for our health concious customers. Moreover, we also add several menus under the “Quick Meal” brand. As for the packaging, the Company consistently focuses on the improvement of our packaging. We have been the leader in the bakery’s packaging for a long time and this also helps lead the customer to purchase the Company’s products as a gift for every occasion.
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Financial Ratio Analysis Dec 31, 2007
Dec 31, 2006
42.3% 4.5% 9.4%
43.1% 6.0% 12.0%
Efficiency Ratio Return on assets (%) Receivables collection period (days)
7.4% 34
9.5% 34
Liquidity Ratio Current Ratio (times)
1.98
1.98
0.3
0.3
Profitability Ratio Gross margin (%) Net margin (%) Return on equities (%)
Leverage Ratio Total liabilities to equities ratio (times)
Key financial ratios analysis • Gross margin of the Company dropped slightly from 43.1% in 2006 to 42.3% in 2007. The major reason is the sharp rise of the raw materials cost during the year i.e. wheat, milk, cheese, and sugar.
• The Company’s net margin dropped from 6.0% in 2006 to 4.5% in 2007. The decline is due to (1) the closing of the non-profit branches which resulted in the loss of approximately Baht 15 million, (2) the reserve for the accrued property tax expenses of Baht 8 million, (3) the actual revenues which was below the target due to economics slowdown and lack of consumer’s confidence and (4) the decrease in financial performance of our joint venture.
• Return on equities for the year 2007 stood at 9.5%, decreased 12% YoY due mainly from the increase in the Company’s capital of baht 76 million (including paid up capital and share surplus).
• Return on assets for the year 2007 stood at 7.4%, decreased 10.1% YoY due mainly from the grow in assets base (the increase in cash and short term investments of Baht 105 million and the increase in the Company’s inventory level to cope with the expected rise in raw material price in 2008.
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Revenue by Distribution Channels Year 2007
Trading 8%
Other 1%
Int’l Restaurant 17%
Domestic Restaurant 74%
Revenue by Product Lines Year 2007
Frozen & Chilled 7%
F & B- Overseas 17%
Outsoursing 3%
Drymix 1%
Bakery 42%
F & B; Domestic 30%
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Consolidated Total Revenue
Unit : Million Baht
2,592
2546
3,044
2547
3,415
3,800
4,077 5 yr CAGR 12% p.a.
2548
2549
2550
Operating Cash Flow
Unit : Million Baht
349
2546
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416
421
473 5 yr CAGR 8% p.a.
326 2547
2548
2549
2550
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Number of domestic restaurants and Bakery outlets nationwide and international restaurants as of 31 December 2007 Brand
Total
Domestic Restaurants S&P Restaurants
84
S&P Bakery Shops
176
Patio Restaurant
2
Vanilla
4
Bluecup Coffee Corners
1
Grand Seaside Restaurant
1 Total
268
International Restaurants
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Patara Restaurants
7
Patio Restaurants
4
Siam Kitchen Restaurants
7
THAI Restaurant
1
Bangkok Jam Restaurant
1 Total
20
Total Domestic & International Restaurants
288
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Dividend Payment Policy The Company will declare dividends every year at the rate of approximately 60 percent of the net profit after tax according to the consolidated financial statements provided that the amount to be declared shall not exceed the retain earnings in the Company’s financial statements and in case the Company’s financial statements has retained loss, no dividends will be declared. For this purpose, the Company will take such action as prescribed by the public limited companies law and take into consideration its liquidity whereby the Company will be able to pay dividends without producing significant effects on its business. The dividend payment policy of the Company’s subsidiaries likewise takes into consideration the economic outlook and business operating performance.
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Shareholder Structures 1. Shareholdings The Company’s securities comprise ordinary shares. As of December 31, 2007, the Company’s registered capital amounted to 525 million Baht, divided into 105 million ordinary shares of par value of 5 Baht each. The called-up capital amounted to 523,431,365 Baht, divided into 104,686,273 ordinary shares of par value of 5 Baht each. The Company still has ordinary shares reserved for the accommodation of the exercise of warrants, and 313,727 shares of par value of 5 Baht each, for the amount of 1,568,635 Baht, remain after the last exercise of the right on April 5, 2007. The Company must take steps to seek approval from the meeting of shareholders for a reduction in its registered capital by cutting off these listed shares in order to act as stipulated by the public limited companies law. The first 10 majority shareholders whose names appeared in the register of shareholders as of February 7, 2008 are as follows :
1 2 3 4 5 6 7 8 9 10
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Group of Shareholders
Number of Shares
Percent
The Sila-On and Raiva Groups Minor International Public Company Limited Thailand Equity Fund Mrs. Supapan Pichaironarongsongkram Credit Suisse Securities (Europe) Limited Mr. Sompong Cholkadeedamrongkul Thailand Securities Depository Mr. Aryuth Charnsethikul Mr. Suraphan Phattanaphithoon Mr. Niti Osathanukrua
37,377,852 18,807,100 10,000,000 3,469,000 2,961,900 2,886,000 1,294,600 1,280,000 1,221,200 960,100
35.71 17.97 9.55 3.31 2.83 2.76 1.24 1.22 1.17 0.92
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Thai Development Ltd. (Switzerland)
45.00%
Patara Taiwan Co., Ltd. (Taiwan)
50.00%
Theme Foods PTE (Singapore)
50.00%
S&P Restaurants Limited (England)
96.00%
➤
Patio International Co., Ltd. (Taiwan)
60.00%
50.00%
99.93%
S&P Asset Co., Ltd. (Formerly S&P Minor Foods Co., Ltd.
Siam Kitchen Causeway ➤ Point PTE (Singapore)
Patara (Geneva) SA (Switzerland)
62.00%
Seriwat Food Co., Ltd.
99.96%
S&P Syndicate Public Co., Ltd.
➤
S&P Global Co., Ltd.
80.00%
➤
➤
➤
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➤
S&P Group Structure
HD Distributors (Thailand) Co., Ltd.
47.00%
S&Pizzanotti (Thailand) Ltd.
50.00%
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S&P’s subsidiaries and affiliates No. of common shares (shares) Type of business
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Total Shares
No. of shares held by S&P group
% Holding (%)
S&P Syndicate Public Company Limited 457-457/6 Sukhumvit 55, Klongtannua, Vadhana, Bangkok Tel : +66 (0) 2185 1313 Fax : +66 (0) 2185 1274
Operate restaurant branches and bakery outlets, produce cake, bread, bakery products, Thai desserts, frozen foods and bakery, provide delivery and catering services, invest and manage the restaurant in overseas
S&P Global Company Limited 457 Sukhumvit 55, Klongtannua, Vadhana, Bangkok Tel : +66 (0) 2185 1313 Fax : +66 (0) 2185 1274
Operate Thai restaurants in overseas, currently with 7 subsidiaries as follows
500,000
400,000
80.00%
S&P Restaurant Company Limited* Room 12, The Darlington Hyde Park, 111-117 Sussex Gardens, London W2 2RU Tel : (44)-207-706-7178 Fax : (44)-207-706-7178
Operate Thai restaurants under “Patara” brand in England, currently with 4 branches
100,000
96,000
96.00%
Theme Foods Pte.* 211 Henderson Road #05-03 Singapore 159552 Tel : (65) 6411-4990 Fax : (65) 6411-4991
Operate Thai restaurants under “Patara” brand in Singapore, currently with 2 branches
600,000
300,000
50.00%
SK Catering Pte.* 211 Henderson Road #05-03 Singapore 159552 Tel : (65) 6411-4990 Fax : (65) 6411-4991
Operate Thai restaurants in Singapore under Siam Kitchen brand, currently with 7 branches, and under “Bangkok Jam” brand, currently with 1 branch
300,000
150,000
50.00%
Patara (Geneva) SA* No.94, Rue des Eaux-Vives 1207, Geneva Switzerland Tel : (4122) 735-0517 Fax : (4122) 735-0538
Operate Thai restaurants under “Patara” brand in Geneva, currently with 1 branch
200
124
62.00%
Patara Taiwan Company Limited* 12 Alley 247, Sec.1 Tua Hua S. Road, Taipei, Taiwan
Operate Thai restaurants under “Patara” brand in Taiwan, cease its operation since October 2007
1,500,000
750,000
50.00%
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No. of common shares (shares) Type of business
Patio International Company Limited* 7F-3 No.28 Jen-Ai Road, Sec.3, Taipei Taiwan Tel : (8862) 2721-5998 Fax : (8862) 2721-6008
Operate Thai restaurants under “Patio” brand in Taiwan, currently with 4 branches
Thai Development Ltd.* No.94, Rue des Eaux-Vives 1207, Geneva Switzerland Tel : (4122) 735-0517 Fax : (4122) 735-0538
Operate Thai restaurants under “THAI” brand in Geneva, currently with 1 branch
S&P Asset Company Limited 1/2 Soi Attakravi1, Sukhumvit 26 Rd, Klongtan Klongtoei, Bangkok Tel : +66 (0) 2185-1313 Fax : +66 (0) 2185-1290
Total Shares
No. of shares held by S&P group
% Holding (%)
12,000,000
7,200,000
60.00%
200
90
45.00%
Conduct real estate development business by renting spaces to restaurants
10,000
9,993
99.93%
HD Distributors (Thailand) Company Limited Sole importer and distributor of 65 Buliding 42 Tower 23 Flr., Room 2301 Haagen-Dazs ice cream Soi Sukhumvit 42 (Klouinumthai) Sukhumvit Rd, Prakanong Klongtoei, Bangkok Tel : +66 (0) 2713-6211-8 Fax : +66 (0) 2713-6219
20,000
95,996
47.00%
200,000
100,000
50.00%
S&P Pizzanotti (Thailand) Limited 457-457/6 Sukhumvit 55, Klongtannua, Vadhana, Bangkok Tel : +66 (0) 2185 1313 Fax : +66 (0) 2185 1274
Operate pizza delivery and Italian food restaurant
Remark * S&P Global Company Limited is the main shareholders
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Management Structure Directorial Structure The managerial structure of the Company comprises 3 boards or committees, that is, the Board of Directors, the Audit Committee and the Executive Board. However, the Company has not yet acted with respect to the appointment of a Recruitment Committee and a Remuneration Fixing Committee. Details and the scope of powers and duties of these directors are as follows :
Board of Directors At present, the Board of Directors comprises 12 members. Meetings in 2007 Names
Position
Directors
Audit Committee
Remuneration (Baht)
1. Mrs. Patara Sila-On
Chairman of the Board of Directors
4/5
-
190,000.-
2. Lt. Varakorn Raiva
Vice Chairman of the Board of Directors
5/5
-
200,000.-
3. Mr. Pravesvudhi Raiva
President
5/5
-
200,000.-
4. Mr. Kachorndej Raiva
Director
5/5
-
200,000.-
5. Mr. Pote Videtyontrakich
Director
3/5
-
180,000.-
6. Mr. William Ellwood Heinecke
Director
3/4
-
30,000.-
7. Mrs. Pratana Manomaiphiboon
Director
4/4
-
50,000.-
8. Mr. Vitoon Sila-On
Director
2/2
-
20,000.-
9. Ms. Cattleya Saengsastra
Independent Director and Chairman of the Audit Committee
5/5
4/4
250,000.-
10. Ms. Sophavadee Uttamobol
Independent Director and Audit Committee
5/5
4/4
250,000.-
11. Mr. Dusit Nontanakorn
Independent Director and Audit Committee
5/5
2/2
230,000.-
12. Mrs. Kessuda Raiva
Director and Company Secretary
5/5
-
200,000.-
Note: The remuneration, that is, gratuities and meeting allowances, is received in capacity as director.
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The Board of Directors’ scope of authority The Board of Directors is invested with the authority to manage the Company in accordance with Laws, the corporate objectives and regulations, as well as the resolutions of Shareholder Meetings. The Board is responsible for policy formulation and determination of business direction, financial management, risk management and to oversee that management carries out policy directives with efficiency and effectiveness. The Board further has the authority to appoint management committee(s) for the purpose of performing one or more objectives. Definition of “Independent Director� Independent Director : An individual with the requisite qualifications and with independence as determined by the Stock Exchange of Thailand as follows. - holds no more than 5 percent of paid-up capital in the Company, subsidiaries, associated or related companies - serves as a Director who does not participate in management roles, is not an employee, staff or consultant in receipt of a regular monthly salary from the Company, subsidiaries, associated or related companies and has not been a major shareholder for a period of not less than 1 year - a Director who does not have an interest, whether direct or indirect, financial or management, in the Company, subsidiaries, associated or related companies - a Director who is not related, or is not a close relative, of any Executive or major shareholder - a Director must not be appointed as a representative in order to protect the interests of other Directors, major shareholders or other shareholders associated with major shareholders Furthermore, there must be freedom to express opinions or to report matters in accordance with tasks assigned, without the need to consider benefits derived from assets or positions. The Director must be free from the influence of any other individuals or situations which prevent the freedom of expression.
Audit Committee The Board of Directors resolved to appoint an Audit Committee pursuant to the resolution of the Board of Directors Meeting, No. 2/2006, held on May 9, 2006, and it was changed pursuant to the resolution of the Board of Directors Meeting, No. 3/2007, held on May 11, 2007. The Audit Committee comprises :
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1. 2. 3.
Ms. Cattleya Saengsastra Ms. Sophavadee Uttamobol Mr. Dusit Nontanakorn
Chairman of the Audit Committee Audit Committee Audit Committee
The Audit Committee’s scope of authority and duties 1.
The Audit Committee has the duty to review that the Company’s financial reportage is accurate and discloses sufficient information, by coordinating the viewpoints of the corporate auditors, the Board of Directors and the Internal Audit Office into a unified direction.
2.
The selection and proposal of appointment of the Company’s auditors, including the annual audit fees for authorisation by the Shareholders’ Meeting.
3.
Determine the level of significant risk and measures for reducing such risk, from management, the Internal Audit Office and auditors.
4.
Conduct a joint review in association with the auditors and Internal Audit Office as to the sufficiency of internal controls systems.
5.
Oversee that the Company’s operations comply with predetermined policies, or Laws relating to securities and the Stock Exchange, announcements of the Stock Exchange or regulations of other governing bodies.
6.
Review the financial statements and notes to the financial statements together with the management team, the auditors and the Internal Audit Office prior to submission to the relevant governing body.
7.
The preparation of a report acknowledging the responsibility and operations of the Audit Committee, presented to the Board of Directors and included in the Company’s Annual Report.
8.
Additional duties to those mentioned may be assigned in accordance with the corporate regulations, Law, or instructions of the Board of Directors.
Executive Committee As of 2007, the Executive Committee has 6 members as follows. 1. 2. 3. 4. 5. 6.
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Lt. Varakorn Raiva Mrs. Patara Sila-On Mr. Kachorndej Raiva Mr. Pravesvudhi Raiva Mrs. Kessuda Raiva Mr. Vitoon Sila-On
Chairman of the Executive Committee Executive Committee Director Executive Committee Director Executive Committee Director Executive Committee Director Executive Committee Director
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The Executive Board’s scope of authority and duties 1.
The Executive Board is designated with the authority to operate in accordance with the Board of Directors’ policies, which in turn defer to Laws, the conditions, rules and regulations of the Company, with the exception of issues which the Law specifies as requiring the authorisation of Shareholder Meetings.
2.
The Executive Board has the right to formulate, propose and determine business directive policies and strategies to the Board of Directors.
3.
The Board may prepare business plans; specify management powers; authorise budgets for the annual business activities, including annual expenditure budgets; and generally conduct activities in line with the business plans and strategies to complement the policies and directives presented to the Board of Directors.
4.
Approval of transactions which may result in obligations to the Company require the authorisation of the Executive Board, together with the signatures of authorised Director signatories as stated in the Company Articles.
5.
Conduct business relating to the general management of the Company, with the exception of related transactions and the acquisition/divestiture of significant public listed company assets, which are to be conducted in accordance with the regulations of the Stock Exchange of Thailand.
6.
The Executive Board may be assigned other duties on an individual basis by the Board of Directors.
The provision of the aforementioned authorities to the Executive Board precludes any Executive Board members, including other parties who may have a potential benefit or conflict of interest in the Company and its subsidiaries, from exercising their voting rights in such issues. Moreover, the Executive Board Meetings do not allow the President to conduct related transactions, but limit’s the scope of authority to normal business activities.
Management Team As of 17 March 2008, the Company had 8 senior management members as follows.
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1. 2.
Mr. Pravesvudhi Raiva Mrs. Kessuda Raiva
3.
Mrs. Chandnibha Suriyong
4.
Mrs. Pacharee Wisuthiwan
President President for S& P Global Co.,Ltd. Executive Director Senior Vice President Operations S&P Global Co.,Ltd. Vice President for Operations
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5. 6. 7. 8.
Mr. Somjit Kititeerakul Mr. Chongchana Chantamas Mrs. Phailin Nimityongsakul Mr. Vitoon Sila-On
9.
Mrs. Rungthong Ramon Oms
Vice President for Bakery Vice President for Food Production Vice President for Research and Development Executive Director Vice President Business Development and Restaurant Marketing Senior Vice President Corporate Strategy
(Details of all Directors and Executives are shown in the Appendix)
Recruitment of Directors and Executives The selection of candidates who will retain office of directors of the Company has not been subject to the Recruitment Committee’s process because the Company has not yet had a Recruitment Committee. However, the Board of Directors selects candidates with qualifications, knowledge, capability and experience relating to the performance of work in the interests of efficient operations of the Company and with qualifications conforming to the requirements of the pertinent laws and notifications of the Securities and Exchange Commission. The appointment of candidates is conducted at the Shareholders’ Meetings as follows. (1) each shareholder has one vote per share held (2) each shareholder must exercise all his votes to nominate either one or several Directorial candidates, but may not divide his votes with other shareholders in any way (3) candidates receiving the highest number of votes in successively descending order are appointed Directors according to the number of Directors required or to be voted for. In the event that any two candidates have a tie for votes received, but the nomination of both would exceed the number of Directors to be appointed, the Chairman of the Meeting will cast the decisive vote.
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Executives’ remuneration Monetary remuneration
No. of Directors
2006 (Million Baht)
No. of Directors
2007 (Million Baht)
Remuneration details
Directors
12
2.51
12
2.49
Meeting perdiem
Executives
12
21.85
8
15.12
Salary, Bonus and Transportation allowance
Item
The remuneration received by the directors in their capacity as directors of the Company, that is, gratuities and meeting allowances, is separated for the respective individuals. Please refer to details under the heading “Board of Directors”. Other remuneration provided - none -
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Corporate Governance The Board of Directors follows the guidelines of good governance for directors of listed companies as outlined by the Stock Exchange of Thailand. An Audit Committee has been established to oversee the Company’s internal controls system and to ensure compliance with the 15 guidelines for good corporate governance detailed as follows :
1. Corporate Governance Policies The Board of Directors has formulated policies for good corporate governance as an essential element of its expansion programmes that are monitored by its established control systems and internal audit activities. The Company’s management diligently follows these policy guidelines for the long-term benefit of shareholders, within the letter of the law and good business ethics.
2. Shareholder Rights In 2007, the Company called 1 Shareholders’ Meeting, being the Annual Ordinary General Meeting of Shareholders, held at the Conference Room of its Bangna Factory. The Company sent notification to attend the Meeting to all Shareholders 14 days prior to the Meeting, accompanied by an agenda, information related to the agenda, opinions of the Board of Directors, and comprehensive minutes of the previous Shareholders’ Meeting.
3. Rights of Persons with Interests The Company follows policies, laws and regulations to protect the rights of all persons with legitimate interests : - Employees: are treated with equity and fairness, and provided with appropriate remuneration and social benefits; - Trading Partners: the Company purchases products and services in accordance with normal trading practices and contractual obligations; - Creditors: the Company complies with the conditions of borrowing under its loan agreements; - Customers: the Company produces products of high quality and standards, provides friendly and helpful services, all aimed at ensuring customer satisfaction. It has a special unit to handle customer petitions with prompt action, while maintaining customer confidentiality; - Competitors: the Company believes in fair competition and refrains from actions that may be harmful to its competitors; - Communities: the Company works to enhance the environment and the communities in which it operates.
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4. Shareholders’ Meetings At the 2007 Annual Ordinary General Meeting of Shareholders, a total of 10 Directors were present, including 3 Audit Committee Directors. The Chairman invited shareholders to express opinions of the Company’s operations, make inquiries and propose suggestions. All significant details and recommendations were recorded in the Minutes of the Meeting.
5. Leadership and Vision - The Board of Directors approves the Company’s vision, mission, strategies, business plan and budget. It also ensures that the Company is run efficiently and effectively according to the approved business plan and budget in order to generate the best economic returns and operating stability. - The Board of Directors ensures that the Company institutes a system of internal controls, audit activities and risk management measures, and regularly monitors these activities through Audit Committee Meetings and Board of Directors’ Meetings. - The Board of Directors provides a clear distinction between the duties and responsibilities of the Board of Directors and the Executive Board (see the section “Management Structure”), and guides the Executive Board in realizing approved policies.
6. Conflicts of Interest The Board of Directors pays particular attention to transactions which may pose conflicts of interest, strictly abiding by the guidelines of the Securities Exchange Commission and Stock Exchange of Thailand. In addition, any changes in equity holdings must be reported at each Board of Directors’ Meeting (see details under the section “Insider Information Issues”).
7. Business Ethics The Company encourages the Board of Directors, the Executive Board and its employees to apply honesty, integrity and equity in business dealings with the general public and groups with interests in the Company. Furthermore, the Company monitors compliance with its code of ethics through continual communication exchanges with its employees, and specifies penalties for misconduct.
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8. Composition of the Board At the end of 2007, the Board of Directors consisted of 12 members : Directors also serving as Executives Other Directors Independent Directors
5 persons 3 persons 4 persons (a ratio of 1 to 3 for the entire Board)
9. Separation of Positions The Chairman of the Board of Directors is the representative of the major shareholding group, which at the end of 2007 held a 35.74 percent equity stake in the Company. The Company President is also a representative of the major shareholding group, but is a different individual from the Chairman. The Board of Directors contains 4 Independent Directors, who provide a suitable check and balance of the Company’s Management.
10. Remuneration of Directors and Executives The remuneration of the Directors is determined by the Board of Directors, based on the Company’s operating performance. Directors’ allowances are approved at each Shareholders’ Meeting.
11. Board of Directors’ Meetings The Board of Directors meets every quarter of the year, with additional meetings scheduled as required. An agenda is set in advance, to include a regular agenda to monitor the Company’s operating performance. The Company Secretary invites Directors to attend each Meeting, supplying an agenda and relevant documentation with sufficient time to allow study of the information. In 2007, the Board of Directors convened a total of 6 meetings, with Minutes of each Meeting recorded in writing.
12. Sub-Committees The Board of Directors established an Audit Committee on 9 May 2006 to monitor corporate governance and financial reportage. It consists of 3 Independent Directors serving a term of 2 years, and 1 secretary : Ms. Cattleya Saengsastra Mr. Prame Chotivanich Ms. Sophavadee Uttamobol Mrs. Kessiri Kukeatnun
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Chairman Director Director Secretary
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During 2007, the Audit Committee met a total of 4 times and reported its conclusions to the Board of Directors.
13. Internal Controls System and Internal Audit The Company has instituted an efficient internal controls system, with the duties and authorities of the management and operational staff clearly defined. The use of Company assets is monitored to ensure optimal benefits. The duties of operating, supervising and evaluation staff are separated to create suitable checks and balances between them. On financial matters, each management line has its own clearly defined system of financial reporting. The Internal Audit Committee monitors principal operations and financial activities to ensure they comply with the predetermined business plan, and with relevant laws and regulations. To ensure it has freedom of inspection and checks, the Internal Audit Department reports directly to the Audit Committee, which continually evaluates its activities.
14. Report of the Board of Directors The Board of Directors approves the consolidated financial statements of the Company and its subsidiaries, including financial information presented in the Annual Report. These financial statements are prepared in accordance with generally accepted financial principles consistently applied to ensure the most precise estimates are employed in their preparation. Accompanying information disclosures are provided in the Notes to the Financial Statements. The Board of Directors has set up an efficient internal controls system to ensure that the recording of accounting transactions is accurate and complete, while also identifying any weaknesses to prevent unethical or abnormal activities of a significant nature. The Audit Committee, consisting of 3 Independent Directors, monitors the Company’s internal controls systems and ensures accurate financial reportage. Their opinions are presented in the section entitled, “Report of the Audit Committee”.
15. Investor Relations As the disclosure of Company information, both financial and other, impacts on the decisions of investors and parties with an interest in the Company, the Board of Directors emphasizes the need for such disclosures to be complete, accurate, credible and timely. To disseminate such information, the Board of Directors has assigned the Vice President for Accounting and Finance the duty of contacting and communicating with institutional investors, shareholders, analysts and relevant public sector agencies. The Vice President may be contacted through telephone number 0 2381 3412 to 29, or email to kessuda@snpfood.com while details of any disclosures will be posted on the Company’s website www.sandp.co.th
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66
60
57
58
Lt. Varakorn Raiva Vice Chairman of the Board of Directors Chairman of the Executive Committee
Mr. Pravesvudhi Raiva President Acting Vice President Human Resource Management and Development Acting Vice President for Marketing and Sales
Mr. Kachorndej Raiva Executive Committee Director
Age (years)
Mrs. Patara Sila-On Chairman of the Board of Directors Executive Committee Director
Name-surname/position
BBA
MMM
MMP
BBA
BBA
MA
BBA
Accounting Chulalongkorn University Bangkok, Thailand Director Certification Program (DCP) Thai Institute of Directors Association
Political Science University of Indiana, USA Chulalongkorn University Training Program - Modern Management Program - Modern Marketing Management
Economics University of Indiana, USA Chulalongkorn University, Bangkok, Thailand
Doctor in Letters (Honorary) Pine Manor College, Massachusetts, USA Business Administration Boston University, USA
Academic qualifications
1.49
5.83
1.43
5.9
Second brother
Third brother
First brother
Eldest sister
Equity Family relations stake between (percent) Executives
Details of all Directors and Executives are shown in the Appendix
S&P Syndicate Public Co., Ltd.
S&P Syndicate Public Co., Ltd.
S&P Syndicate Public Co., Ltd.
Company
2006 – present/ S&P Syndicate Public Executive Co., Ltd. Committee Director 2003-2005/ President
2006-present/ President 2003-2005/ Executive Vice President
Past 5 years/ Vice Chairman of the Board of Directors
Past 5 years / Chairman of the Board of Directors
Period/position
Previous 5-year experience
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54
60
48
Ms. Cattleya Saengsastra Independent Director Chairman of the Audit Committee
Ms. Sophavadee Uttamobol Independent Director Audit Committee Director
Age (years)
Mrs.Kessuda Raiva Director and Company Secretary Executive Vice President President for S&P Golbal Co.,Ltd.
Name-surname/position Economics, North Eastern University, Boston, USA Business Administration, Finance and Banking Assumption University (ABAC) Bangkok, Thailand
BBA
MBA
Business Administration Chulalongkorn University, Bangkok, Thailand Bachelor of Law Thammasat University, Bangkok, Thailand Director Accreditation Program Certificate (DAP) Audit Committee Program Certificate (ACP) Thai Institute of Directors Association
Accounting (Hons.) Chulalongkorn University Bangkok, Thailand Training Thammasat University Program Management Development Program JJ Kellogg North Western University
BBA
BBA
MBA
Academic qualifications
-
0.011
6.05
Past 5 years/
Period/position
- None -
- None -
Raiva
Past 5 years/ Independent Director Audit Committee Director
Past 5 years/ Independent Director Chairman of the Audit committee
Company Secretary
S&P Syndicate Public Co., Ltd.
S&P Syndicate Public Co., Ltd.
S&P Syndicate Public Co., Ltd.
Company
Previous 5-year experience
Mr. Pravesvudhi Director and
Spouse of
Equity Family relations stake between (percent) Executives
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55
Mr. Dusit Nonthanakorn Independent Director Audit Committee Director
Mr. Pote Videtyontrakich Director
Name-surname/position
Age (years)
BBA
MBA
BBA
MBA
Business Administration, Harvard University, USA Economics, Yale University, USA Director Certification Program (DCP) The Role of Chairman (RCM) Thai Institute of Directors Association
Engineering Sciences, Construction Engineering, Ohio State University Business Administration University of California, Los Angeles Director Certification Program (DCP) The Role of Chairman (RCM) Audit Committee Program Certificate (ACP) Thai Institute of Directors Association
Academic qualifications
-
-
- None -
- None -
Equity Family relations stake between (percent) Executives
2006 – present/ Director 2002 – present/ Managing Director 1997 – 2001/ Managing Director 1997 – 1997/ Acting Deputy Commerce Minister
Present/ Audit Committee Director Chairman, Independent Director and Audit Committee Independent Director Independent Director and Audit Committee Director 2005 – Present/ Independent Director 1969 – 2005/ President
Period/position
S&P Syndicate Public Co., Ltd. Private Equity (Thailand) Co., Ltd. Credit Suisse First Boston (Singapore and Bangkok) The Ministry of Commerce, The Royal Thai Government
S&P Syndicate Public Co., Ltd. 124 Communications Public Co., Ltd. Krung Thai Bank Public Co., Ltd. Siam Future Development Public Co., Ltd. Crown Seal Public Co., Ltd. Loxley Public Co., Ltd. Regional Container Lines Public Co., Ltd. S&P Syndicate Public Co., Ltd. Siam Cement Trading Co., Ltd.
Company
Previous 5-year experience
Annual Report www.snpfood.com
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59
44
Mr. William Ellwood Heinecke Director
Mrs. Pratana Manomaiphiboon Director
Name-surname/position
Age (years)
MBA
Master of Business Administration, Thammasart University Directors Accreditation Program (DAP), Thai Institute of Directors Association Directors Certification Program (DCP) Thai Institute of Directors Association
Honorable Doctoral Degree of Business Administration in Management, Yonok College, Lampang, Thailand Director Certificate Program (DCP) Thai Institute of Directors Association
Academic qualifications
-
-
- None -
- None -
Equity Family relations stake between (percent) Executives
2007 – Present/ Director 1998 – Present/ CFO and Director Director
2007-Present/ Director 1979 – Present/ CEO and Chairman Chairman Director
Period/position
S&P Syndicate Public Co., Ltd. Minor International Plc Minor Corporation Plc. And Director of Subsidiaries The Minor Food Group Plc. And Director of Subsidiaries Rajadamri Hotel Plc.
S&P Syndicate Public Co., Ltd. Minor International Plc and Director of Subsidiaries Minor Corporation Plc. And Director of Subsidiaries The Minor Food Group Plc. And Director of Subsidiaries Rajadamri Hotel Plc. Sermsuk Plc. Everest Worldwide Ltd.
Company
Previous 5-year experience
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40
57
Mr. Vitoon Sila-On Director Vice President Business Development and Restaurant Marketing
Mrs. Chandnibha Suriyong Senior Vice President Operations S&P Global Co., Ltd.
Name-surname/position
Age (years)
MA
BBA
MBA
Communication Arts, University of Wisconsin – Madison, Wisconsin, U.S.A Food Service Management & Operations, University of Wisconsin Madison, U.S.A.
Kenan-Flagler Business School University of North Carolina Chapel Hill, NC, USA Boston University Boston, MA 02215, USA Directors Accreditation Program (DAP) Thai Institute of Directors Association
Academic qualifications
0.016
0.07
- None -
Son of Mrs. Patara Sila-On
Equity Family relations stake between (percent) Executives
2008 – present/ Senior Vice President Operations Past 5 years/ Vice President Operations S&P Global Co., Ltd.
2007 – present/ Director 2006 – present/ Vice President Business Development and Restaurant Marketing 2002 – 2006/ Deputy Vice President Business Development
Period/position
S&P Global Co., Ltd.
S&P Syndicate Public Co., Ltd.
Company
Previous 5-year experience
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0171
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46
43
Mrs. Patcharee Visuttiwan Vice President for Operations Department
Mr. Somjit Kititeerakul Vice President for Bakery
Mr. Chongchana Chantamas Vice President for Food Operations
Name-surname/position
Age (years)
BBA
BBA
Bachalor of Science (Food Science and Technology), Kasetsart University
Bachelor of Science (Biotechnology) , Kasetsart University
Commerce Diploma, Chao Phraya Commercial College
Academic qualifications
-
-
0.025
- None -
- None -
- None -
Equity Family relations stake between (percent) Executives
2007 – present/ Vice President for Food Operations Past 5 years/ Deputy Vice President
2007 – present/ Vice President for Bakery Past 5 years/ Deputy Vice President Bakery
2007 – present/ Vice President for Operations Department Past 5 years/ Deputy Vice President Operations
Period/position
S&P Syndicate Public Co., Ltd.
S&P Syndicate Public Co., Ltd.
S&P Syndicate Public Co., Ltd.
Company
Previous 5-year experience
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37
Mrs. Rungthong Ramon Oms Senior Vice President Corporate Strategy
Age (years)
Mrs. Phailin Nimityongsakul Vice President for Research and Development
Name-surname/position
BBA
MBA
BSC MSC
Kenan-Flagler Business School (Mega Beta, Sigma Honor Scholarship) University of North Carolina Chapel Hill, NC, USA. Bachelor of Finance (Honor) Thammasat University
Nutrition London University, England Food Science & Technology, Reading University, England
Academic qualifications
-
0.004
-None-
- None -
Equity Family relations stake between (percent) Executives
2008-Present Senior Vice President Corporate Strategy 1997-2002 Senior Consultant 1996 Treasury Department
2003 – present/ Vice President for Research and Development 2003-2007/ Vice President for Food Operations 2001 – 2003/ Vice President and Legal Department
Period/position
Mc Kinsey Company (Thailand) Citi bank
S&P Syndicate Public Co., Ltd.
S&P Syndicate Public Co., Ltd. Uniliver Bestfood Co., Ltd
Company
Previous 5-year experience
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Supervision of Use of Internal Information The Company has a policy and methods to supervise its directors and executives regarding their use, for personal benefit, of internal information concerning the Company’s financial position and operation results, which have not yet been disclosed to the general public, including securities transactions, especially during a 1-month period before the financial statements are made public. To this, it is stipulated that the directors and executives understand their duty to report the holdings of securities in the Company by themselves, their spouses and children who have not yet become of age, as well as to report changes in their securities holdings, to the Office of the Securities and Exchange Commission.
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Internal Controls The Company has established a system of evaluation and review of its internal controls and internal audit activities to ensure that its operations comply with legal requirements, corporate purpose, articles of association and resolutions of Shareholders’ Meetings, in accordance with the guidelines of good corporate governance. Such internal controls are separated into four areas of responsibility, as follows :
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1.
The Audit Committee: This is responsible for monitoring the Company’s internal controls system through ongoing reviews of the operations of the Internal Audit Department, which provides the Audit Committee with information and recommendations, as well as preparing a quarterly (at least) internal audit report. The Audit Committee in turn must report any significant recommendations and failings to the Board of Directors so that further action may be taken.
2.
Risk Management: It is the duty of management to oversee and control any risk that may arise during the course of the Company’s business and operations. To achieve this, a comprehensive system of checks has been put in place to provide efficient and effective early warning of any variables that may affect business operations.
3.
Management Operation Controls: The duties and authorities of management and operational staff are clearly defined in writing; the duties of operating staff and those of supervisors and evaluators distinctly separated to ensure suitable checks and balances. Strict measures are also in place to control the operations and activities of management or related parties. These controls and duties help preserve the properties of the Company and protect against unethical conduct.
4.
Information Technology Systems: The Company is committed to investing in the latest computer, informational technology and data systems to assist management and the Board of Directors in their decision making. Such investments are essential to assist in the compilation of accounting data and documentation to comply with standard accounting practices, and to ensure disclosures of significant company information are both accurate and transparent, in line with the principles of good corporate governance.
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Annual Report www.snpfood.com
General Corporate Information and Other References
06-S&P-P136-176.indd 176
Company name
S&P Syndicate Public Company Limited
Primary business
Restaurant and bakery shop chain operator; producer of cakes, breads, baked goods, Thai desserts prepared frozen foods and bakery products; provider of home delivery and outside catering services; investor and operator of Thai restaurants abroad.
Registered capital
525,000,000 Baht (Five hundred and twenty-five Million Baht), comprising 105 million ordinary shares with a par value of 5 Baht per share.
Issued and paid-up capital
523,431,365 Baht (Five hundred twenty-three million four hundred thirty-one three hundred sixty- five
Head Office
457-457/6 Sukhumvit 55 (Soi Thonglor), Sukhumvit Road, Klongtannua, Vadhana, Bangkok 10110 Telephone (02) 185-1313 Facsimile (02) 185-1274 Homepage : www.sandp.co.th
Registrar
Thailand Securities Depository Centre CAPITAL MARKET ACADEMY BUILDING 2/7 Moo 4, (North Park Project) Vibhavadi-Rangsit Road Tung Song Hong, Laksi, Bangkok 10210 Thailand Telephone (02) 596-9000 Facsimile (02) 832-4994-6
Corporate auditors
Deloitte Touche Tohmatsu Jaiyos Co., Ltd. Rajanakarn Building, 25th. Floor 183 South Sathon Road, Yannawa, Sathon, Bangkok 10120 Telephone (02) 676-5700 Facsimile (02) 676-5757 Auditor in charge : Mr. Permsak Jerajakwattana Certified Public Accountant (Thailand), Registration No. 3427
Legal counsel
Dr. Suvarn Valaisathien Law Office 68 Soi 8, Sukhumvit Road, Klongtoey, Bangkok 10110 Telephone (02) 253-3427 Facsimile (02) 653-1135
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