20140110 tta ar en by TTA TTA

OPPORTUNITIES PERFORMANCE Strong exposure to lucrative markets and industries

Diversified portfolio of businesses

TTA is an investment company with a portfolio that spans several key regions such as Thailand, Singapore, Vietnam, Middle East and Europe. The Group is primarily engaged in global commodity businesses such as shipping, offshore oil & gas, fertiliser and warehouse & logistics. This diversified portfolio of investments provides TTA an ideal platform to build long term growth as well as a strong and stable financial foundation.

Within TTA’s portfolio, the Company oversees two core investments including Thoresen Shipping and Mermaid Maritime–both of which have the capacity to generate strong revenues and healthy cash flows for TTA. This year, Mermaid’s net profit contribution to TTA grew nearly five-fold from Baht 67 million in FY 2012 to Baht 320 million in FY 2013. Though Thoresen Shipping operated in an environment of weak freight rates during the year–thelowest global average since 1999–it still report positive EBITDA for the year. Baconco, TTA’s fertiliser and warehouse investment in Vietnam, also delivered a strong performance, reporting positive EBITDA of Baht 350 million and record normalised net profits of Baht 277 million.

New Platform

For Growth

CAPITALISING

RESPONSIBILITY

W e l l - ti m e d e x pa nsion of offshore and dry bulk fleet

Conservative and transparent culture and decision-making

As an investment holding company, TTA’s role is to support and nurture its business units so they in turn can invest in their own growth and development when appropriate. To facilitate such growth initiatives, TTA completed a capital increase in FY 2013 and plans another in FY 2014 in order to support the renewal of Mermaid’s drilling fleet and the purchase of additional vessels for Thoresen Shipping. Mermaid’s own capital increase in FY 2013 was supported by TTA and the unit is now in the process of building two new tender drilling rigs. Thoresen Shipping plans to purchase three to six dry bulk vessels in the near term, capitalising on currently low asset values.

Responsive structures and high levels of personal responsibility within our teams, from the Board level to every employee and department, have been a driving force at TTA. Over the last two years, this high level of responsibility led TTA to take a number of impairments, in line with a strict adherence to conservative financial reporting standards. These decisions mean that TTA is now more transparent with its shareholders, debtors and partners, and that the Company’s balance sheet reflects a fully realistic view of the fair value of its assets. At the same time, the Company is committed to unlocking and increasing the value of its investments wherever possible, as reflected by the upcoming listing of PM Thoresen Asia Holdings Ltd., which could potentially double the value of this investment by unbundling it from the rest of TTA’s portfolio.

Annual Report 2013

CONTENTS 04

Important Changes and Developments

Results at a Glance

Honorary Chairman Statement

Chairman’s Message

CEO’s Message

Audit Committee’s Report

Board of Directors & Executives Officers

Business Review and Outlook

Corporate Social Responsibility Policy

Financial Highlights

Management Discussion & Analysis

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

THORESEN THAI AGENCIES PLC.

Annual Report 2013

160

168

Consolidated and Company Financial Statements

Management Structure

Income Structure

Audit Fees

169

176

178

179

Risk Factors

Shareholdings by Directors/Executives

Shareholding Structure

Dividend Policy

180

193

194

198

Corporate Governance Report

Inside Information Control

Related Party Transactions

Company Investments

203

207

Glossary

The Company THORESEN THAI AGENCIES PLC.

Annual Report 2013

Important Changes and Developments

2013  TSS acquired three dry bulk vessels, one second-hand and two new build vessels. AOD took delivery of three

new build jack-up rigs.  TTA

established Thoresen Shipping Denmark APS as a commercial office based in Copenhagen, Denmark to serve its European client base.

 TTA

raised Baht 3,964 million by way of a rights issue in combination with warrants to purchase ordinary shares of TTA (TTA-W3) to pursue its business growth.

 Mermaid

raised SG$ 175.78 million by way of a rights issue to pursue its business growth.

 The

total owned fleet as of 30 September 2013 consisted of eighteen dry bulk vessels, eight offshore vessels, two tender drilling rigs, and three jack-up rigs (33.76% owned by Mermaid). Additionally, approximately thirteen full-time equivalent dry bulk vessels were chartered in to meet client demand during the year.

2012  TTA

acquired one second-hand dry bulk vessel. The business restructuring of dry bulk shipping was completed, as eight Thai flagged vessels were transferred to Thoresen Shipping Singapore Pte. Ltd. (“TSS”).

 TTA’s

convertible bonds matured on 24 September 2012.

2011  Soleado

acquired a 20% stake in Baria Serece as part of its strategy to create an integrated logistics business in Vietnam.

 TTA

acquired three dry bulk vessels, two in the second-hand market and one new build vessel.

 Soleado

acquired an additional 1.166% ownership in Petrolift Inc. (“Petrolift”) to have 40.0% ownership.

 Soleado

acquired 33.33% of Qing Mei Pte. Ltd. (“Qing Mei”) to develop a new coal-mining project in Indonesia.

 Asia

Offshore Drilling Limited (“AOD”), a 33.76% associate company of Mermaid, raised USD 180 million from the international capital markets and signed contracts to build 3 jack-up rigs worth USD 538 million with Singapore Keppel FELS Limited (“Keppel FELS”).

THORESEN THAI AGENCIES PLC.

Annual Report 2013

2010  Soleado

acquired a 38.83% stake in Petrolift, a petroleum tanker company in the Philippines.

 Mermaid acquired a 100% stake in Subtech

Ltd. in Seychelles to expand its subsea engineering services in

the Middle East.  TTA

issued unsubordinated and unsecured domestic debentures of Baht 4.0 billion to refinance existing loans and to increase working capital.

 TTA

acquired four dry bulk vessels, three in the second-hand market and one new build vessel. Mermaid acquired one second-hand and three new build subsea vessels.

2009  TTA

established Soleado Holdings Pte. Ltd. (“Soleado”) as an investment holding company for projects, assets, or companies outside of Thailand.

 TTA acquired an 89.55% stake in Unique Mining Services Plc. (“UMS”), a coal logistics company in Thailand,

as part of its strategy to create an integrated coal business.  Soleado

acquired a 100% stake in Baconco Co., Ltd., a fertiliser company in Vietnam. Soleado acquired a 21.18% stake in Merton Group (Cyprus) Ltd., which has a coal mining joint venture in the Philippines.

 Mermaid

raised SG$ 156 million by way of a rights issue to pursue its business growth.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Results at a Glance Simplified consolidated earnings statement Income statement Restated Baht millions

Revenues

FY12

FY13

%yoy

16,347 18,463

13%

Freight charges

3,528

4,747

35%

Offshore services

5,721

8,243

44%

Sales

6,782

5,141

(24%)

12,476 14,548

17%

Costs Gross profits

3,871

3,915

SG&A

1,856

2,118

14%

EBITDA

2,015

1,797

(11%)

Depreciation & Amortisation

1,556

1,595

Other income

229

174

(24%)

Equity income

129

250

94%

EBIT

817

626

(23%)

Finance costs

(594)

(510)

14%

Income taxes

(166)

(213)

(29%)

Profits before EI Extraordinary items

(97) (270%)

(4,577) (4,843)

Minority interests

(39)

(212)

Forex translation

Net profit No. of shares (million) Basic EPS (Baht)

Revenues rose 13% year-on-year to Baht 18,463 million, as a result of more vessel days at Thoresen Shipping and improved performance at offshore oil and gas services subsidiary, Mermaid. However, EBITDA softened by 11% to Baht 1,797 million as a result of higher SG&A driven by Mermaid’s contract start-up costs in the Middle East and Baconco’s increased domestic marketing efforts. Results were partially buoyed by a 94% increase in equity income, primarily due to Mermaid’s associate company AOD beginning operations of two high-specification jack-up rigs, AOD I and AOD II, during the year. Before extraordinary items, TTA reported net losses of Baht 97 million. Net losses of Baht 5,080 million were driven primarily by non-cash impairments and write-downs.

(4,494) (5,080) 708

866

(6.35)

(5.86)

(13%)

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Simplified earnings statement for Thoresen Shipping (Million Baht) 6,000

40 35 4,747

4,000

3,528

13.1

20 4.5

15 10

3,000 2,000

14.9

5,000

16.1

FY12 Chartered-in FTE - LHS Owned vessel FTE - LHS

FY13 Freight revenue - RHS

1,000 0

Thoresen Shipping’s income statement* Restated Baht millions

Total revenues Total costs Gross profits Gross margins (%) SG&A EBITDA EBITDA margins (%) EBIT

FY12 3,528 2,608 920 26% 252 668 19% 217

FY13 %yoy 4,747 35% 4,115 58% 632 (31%) 13% (13%) 295 17% 337 (50%) 7% (12%) (143) (166%)

*as consolidated on TTA’s P&L

Freight revenues improved 35% year-on-year to Baht 4,747 million, as chartering-in activity rose almost 3 times to serve a growing number of commercial relationships. Despite outperforming its benchmark revenue index by 7% and maintaining its position as an industry cost leader, a 14-year low in global industry-wide freight rates meant Thoresen Shipping operated below its fully loaded breakeven point. Following impairments against the fleet, the fully loaded breakeven point has decreased to approximately USD 8,900 per day, positioningThoresen Shipping for profitability in 2014.

Simplified income statement for Mermaid Utilisation rates

Mermaid’s income statement* Restated Baht millions

FY11

FY12

Subsea

FY13 Drilling

Total revenues Total costs Gross profits Gross margins (%) SG&A EBITDA EBITDA margins (%) EBIT

FY12 5,721 3,752 1,969 34% 581 1,389 24% 698

FY13 8,243 5,989 2,254 27% 885 1,369 17% 816

%yoy 44% 60% 14% (7%) 52% (1%) (8%) 17%

*as consolidated on TTA’s P&L

*Utilisation rate per calendar days

Mermaid’s net profit contribution to TTA grew almost five-fold to Baht 320 million while its revenues improved by 44% to Baht 8,243 million, as it began to realise the proceeds of several high value contracts, most significantly, a full service five-year diving contract with Saudi Aramco, the world’s largest oil and gas company. Costs to initiate service on some of Mermaid’s large contracts over the past year led to a direct cost increase of 60%. At the same time, SG&A grew by 52% due largely to recruitment efforts in the Middle East region. Mermaid associate company AOD contributed Baht 122 million of equity income to TTA, as it launched operations of AOD I and AOD II during the fiscal year. THORESEN THAI AGENCIES PLC.

Annual Report 2013

Simplified income statement for UMS

-107

(EBIT Baht millions) 0 -51 -50 -100

(Volume Thousand Tonnes) 1,250 1,000 750 500 250 0

-150

574 211 822 FY12 Coal: 0-5 mm

580 FY13 Coal: Other sizes

EBIT

UMS’ income statement* Restated

FY12 FY13 %yoy 3,428 1,931 (44%) 3,036 1,581 (48%) 391 350 (10%) 11% 18% 7% 431 337 (22%) (40) 14 134% (1%) 1% 2% (107) (51) 52%

Baht millions

Total revenues Total costs Gross profits Gross margins (%) SG&A EBITDA EBITDA margins (%) EBIT *as consolidated on TTA’s P&L

UMS’ EBITDA margin improved slightly to 1% compared to negative 1% the year before, as high sales of 0-5 mm coal dropped significantly in 2013. This drop in volume, coupled with the fact that UMS continues to face inefficiencies at its recently reopened Samut Sakorn plant, meant that revenues fell 44% year-on-year, to Baht 1,931 million. Through volume reduction, UMS’ net losses would have narrowed year-on-year without the Baht 243 million provision for coal inventories.

Simplified income statement for Baconco

243

(Volume Thousand Tonnes) 200 150 100

(EBIT Baht millions) 350 333 300 250 200 150 100 50

193

196

FY12

FY13

50 0

Sales Volume

EBIT

Baconco’s income statement* Restated Baht millions

Total revenues Total costs Gross profits Gross margins (%) SG&A EBITDA EBITDA margins (%) EBIT

FY12 3,376 3,015 361 11% 104 257 8% 243

FY13 3,229 2,759 470 15% 130 340 11% 333

%yoy (4%) (8%) 30% 4% 25% 32% 3% 37%

*as consolidated on TTA’s P&L

Baconco continued to shine in fiscal 2013, reporting record net profits of Baht 253 million, up 24% year-onyear. The company sold a record 196,400 tonnes of fertiliser and by securing raw materials at more attractive prices, improved its gross profits by 30% compared to the previous year. Baconco’s warehouse division doubled its revenues after adding a new warehouse, Baconco 5, in February 2013.

THORESEN THAI AGENCIES PLC.

I believe in TTA.

â&#x20AC;&#x153;New Platform for Growthâ&#x20AC;?

Prayudh Mahagitsiri, Honorary Chairman

Annual Report 2013

Chairman’s Message 2013 was a year of contrasts for Thoresen Thai Agencies Public Company Limited (“TTA”, “the Group” or “the Company”). There have been very strong and promising achievements in some of our businesses, as well as difficulties in others, due in part to an unfavourable economic environment or operating issues specific to certain businesses. Though TTA took significant impairments and extraordinary write-downs during the year, the Company also won major new contracts, especially in the oil & gas services sector, which already started to generate revenues and profitability in the second half of 2013, and will contribute very significantly to net income in the current fiscal year. The Company also raised its financing capabilities through a capital increase, giving us the ability to invest in promising projects in the near to medium term. And we have just announced a second capital increase plan in order to make additional opportunistic investments, particularly in dry bulk shipping. Our objective is to further reinforce the Company’s ability to fund important growth projects and in the process, to lock up long term profitability. Beyond the actual operating performance, one of the key announcements we made that will shape the Company for years to come is our executive succession plan. Mr. Chalermchai Mahagitsiri is succeeding M.L. Chandchutha Chandratat as President & CEO of TTA, while Mr. Krailuck Asawachatroj has taken over from Mrs. Thitima Rungkwansiriroj as the Group CFO. On behalf of the entire Board, I would like to express my gratitude to both M.L. Chandchutha Chandratat and Mrs. Thitima Rungkwansiriroj for all of their important contributions over the years.

Having served as Executive Vice Chairman and member of TTA’s executive committee, Mr. Mahagitsiri has already been overseeing key functions at TTA, and has been closely involved in the Company’s important strategic decisions. Mr. Asawachatroj, who joined TTA in July 2013, has strong investment banking experience, which will be required as TTA embarks on its next phase of growth and expansion. I have full confidence that under their leadership, TTA will continue to make important advances across its portfolio of businesses, and that its best days are still ahead. We have ensured that the management change is being implemented as smoothly as possible to avoid any unwanted interruptions to the business. The Company is unique for its size, in that it has a global operating footprint and multinational teams of talent. Historically, the Company has faced all challenges head on and taken necessary actions without losing sight of our longer term goals. It has been this focus that has given me good reason to feel confident about the future. TTA remains fully committed to the next phase of its development strategy, focused on nurturing and growing its core businesses and maximising shareholder value over the near and long term. Yours sincerely,

Mr. Prasert Bunsumpun Chairman

THORESEN THAI AGENCIES PLC.

Annual Report 2013

CEO’s Message During the last fiscal year, TTA faced various challenges, including a prolonged difficult economic environment in the dry bulk shipping business and some exceptional non-cash write-downs, impairments and provisions. As a consequence, for the year ended 30 September 2013, TTA reported net losses of Baht 5,080 million and losses per share of Baht 5.86. The significant net losses this year, driven primarily by non-cash items, however mask many of the successes we have achieved over the past 12 months, including a strong turnaround for Mermaid, a record year for Baconco, and sustained cash flow positive performance for Thoresen Shipping, which continues to remain cost competitive despite the challenging environment. In many ways, the focus over the last two years has been on improving the fundamentals across our various businesses and on our balance sheet. In 2014, we will enter a new phase in which we begin to capitalise on all of this important groundwork.

Impairment Decisions Impairment decisions announced for the 2013 fiscal year were carefully deliberated by the management and Board, and took into consideration the counsel of third-party consultants. The decisions were finally taken with a view towards correcting past unfortunate mistakes and upholding conservative financial reporting and accounting practices, in line with our corporate governance policies. A non-cash impairment of Baht 3,917 million was taken against the dry bulk shipping fleet owned by Thoresen Shipping, TTA’s wholly owned dry bulk shipping subsidiary. The decision came as a result of the prolonged downturn and resultant low freight

rates in the dry bulk industry, which have negatively affected the company’s vessel values. The dry bulk shipping industry has not recovered as per TTA’s forecasts, as well as that of market expectations, and in particular, asset prices have fallen significantly. This reality, coupled with our outlook for restrained improvement over the medium term, forced us to consider an impairment against the dry bulk shipping fleet. TTA also announced a non-cash impairment of Baht 120 million against its investment in Merton, through which it holds indirect stakes in two coal mining projects, in the Philippines and Indonesia respectively. Finally, TTA’s Board of Directors decided to take an additional write down of approximately Baht 596 million against goodwill related to TTA’s acquisition of UMS, which continues to face challenges in its business. While the Samut Sakorn plant was allowed to reopen during the third quarter, we are still unable to classify certain kinds of coal and are kept from using our own port at the facility. The issue we have faced has dragged on longer than could have reasonably been anticipated, forcing us to review the valuation of goodwill of this purchase on our balance sheet. Despite the impairments announced at the end of last year, TTA remains healthy and has ample cash.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Results Despite the challenging environment, Thoresen Shipping operated its fleet on a cash positive basis, outperforming the market both in terms of costs and revenues. Thoresen Shipping’s Time Charter Equivalent (“TCE”) was USD 8,364 per day, outperforming the Baltic Supramax Index (which is most closely correlated to Thoresen Shipping’s fleet) by 7% on a fleet adjusted basis. Thoresen Shipping also continued to focus on cost efficiencies. At USD 4,087 per day, its owner’s expenses remained significantly lower than the industry average of USD 4,500-4,600 per day. As a result, Thoresen Shipping still reported a positive EBITDA of Baht 337 million in FY 2013. Mermaid Maritime continues to benefit from increased oil and gas exploration activity and the company’s net profits grew nearly five-fold from the previous year, to Baht 320 million. While the subsea utilisation rate increased marginally to 71%, what really spurred Mermaid’s success was its ability to deliver an expanded suite of higher value services. This effort resulted in operating profits more than doubling to USD 24.3 million with an improved operating margin of 9.8% compared to 5.9% in the previous year. Drilling revenue was impacted mainly due to MTR-2 staying in special periodic service (“SPS”) longer than expected. MTR-1 meanwhile, successfully concluded its contract as an accommodation rig in July 2013. Associate company AOD has now taken delivery of all three of its jack-up rigs but their equity income contribution was marginal as the rigs were delivered between April and October 2013. AOD is expected to contribute significantly in 2014 as all rigs will have performed a full year of service. Group Infrastructure brought in mixed results in FY2013, with Baconco reporting record profits of Baht 253 million. UMS on the other hand, was finally allowed to resume operations at its Samut Sakorn plant late in the third quarter of the fiscal year, after nearly two years of government-mandated closure. However, inefficiencies related to government conditions imposed on operators in the region have prevented a meaningful turnaround, and UMS reported a marginally positive EBITDA of Baht 14 million for the fiscal year.

THORESEN THAI AGENCIES PLC.

Overall in fiscal year 2013, positive contributions reported on the back of a rebound at Mermaid and a record year for Baconco helped to counterbalance weak results from Thoresen Shipping and UMS.

Major Successes Exploration and production in the oil and gas industry continues to heat up throughout Asia and the Middle East. AOD, an associate company of Mermaid, concluded in March two additional contracts with Saudi Aramco, the world’s largest oil and gas company, worth up to USD 462 million of revenues. AOD contributed Baht 124 million of equity income this year and with its third jack-up rig deployed early in the 2014 fiscal year, we expect this number to climb in 2014. In a short period of time, Saudi Aramco has become one of our Group’s most significant clients, starting with a five-year inspection, repair, and maintenance contract last year. Going forward, we expect the Middle East to remain a lucrative region for a number of TTA’s business units. In September, PT Seascape Surveys Indonesia (“Seascape”), a subsidiary of Mermaid was awarded a two-year contract to provide offshore inspection, repair, and maintenance (“IRM”) services to a major Indonesia-based upstream oil and gas operator. The estimated contract value for the initial term is USD 55 million. Baconco’s warehouse division continued to thrive, with rental revenues more than doubling in fiscal 2013, driven by additional space from the opening of the Baconco 5 warehouse in February. While earnings from the warehouse division are small relative to Baconco’s fertiliser segment, the strong performance we have seen provides strong impetus for further growth and investment. Finally, TTA successfully raised Baht 3,964 million to fund its business expansion plans through a rights offering (“RO”) in the second quarter of fiscal 2013. Much of those funds were deployed to support a capital increase plan initiated by subsidiary Mermaid, which plans to renew its drilling fleet in order to realise the full potential of the current market upturn.

Annual Report 2013

New Round of Fundraising In order to capitalise on further opportunities in the dry bulk sector as well as for other subsidiaries, TTA announced plans for a follow-up RO to be carried out in the second quarter of fiscal 2014, aiming to raise up to Baht 4,000 million. The majority of the proceeds from the previous RO were used to maintain TTA’s ownership in Mermaid, and with formidable rationale to fund further growth opportunities, TTA is seeking the support of its shareholders to co-invest. In particular for dry bulk shipping, 2013 was a difficult year from the prospective of both the shipping and European bank industries. As a result, it was difficult to secure loans to fund vessel acquisition. While we still managed to purchase three vessels, our aspirations for further acquisitions remained unrealised. We have now secured loan facilities, which when combined with equity, would allow us to acquire between three and six vessels at reasonable prices. The ability to acquire vessels at bottom-of-the-cycle prices would give Thoresen Shipping a distinct competitive advantage for years to come. In addition to dry bulk, we will also explore opportunistic investments in other subsidiaries and associate companies.

Management Succession The year ahead ushers in a change in TTA’s senior management team, and through a well-thought out and planned transition, we have worked hard to ensure that there are no interruptions to the business.TTA will continue to focus on growing and nurturing our investments across all three of TTA’s business groups and look for opportunities to build greater value in the months and years to come.

TTA remains committed to Thoresen Shipping’s growth and its plans to acquire three to six vessels at reasonable prices over the next 12-18 months as part of a continuing fleet growth initiative. Approximately 50% of Thoresen Shipping’s vessels are positioned in higher-yielding Atlantic routes, following the opening of the Company’s first European chartering office in Copenhagen, Denmark. Thoresen Shipping plans to open its second office outside of Asia in the US during the second quarter of the 2014 fiscal year, an initiative we feel will allow us to acquire additional higher-yielding routes. With the average daily depreciation on Thoresen Shipping’s dry bulk vessels being reduced by 48% as a result of asset impairments, there is good reason to believe the company will return to profitability in fiscal 2014 Likewise for UMS, we will continue to support UMS in its effort to turnaround the company and move forward to a more profitable business. However, there is still some uncertainty about whether UMS can get back to full operations in 2014. Our push to position more of Mermaid’s subsea vessels in the Middle East and the North Atlantic will have a positive impact on our earnings in 2014 as exploration and production activities are expected to remain resilient throughout the year. In Vietnam, we expect to continue seeing growth across our business, with Baconco leading the way with its fertiliser and logistics business lines. All mentioned above are business essences that new management team have implemented over the year in order to build the growth of TTA, just like this year’s theme – “New Platform for Growth”. Sincerely yours,

Outlook The outlook is largely positive for our core businesses, including Thoresen Shipping, Mermaid and Baconco. Increased demand for iron ore, a recovery in the US, and slowing deliveries of new assets all bode well for dry bulk shipping in the medium term. We believe that freight rates in 2014 will be higher than in 2013, but the rebound will be a gradual one.

Mr. Chalermchai Mahagitsiri President & CEO

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Audit Committee’s Report Thoresen Thai Agencies Public Company Limited has three Audit Committees consists of three independent directors viz., Mr. Krish Follett - the Chairman, Mr. Santi Bangor and Mr. Cherdpong Siriwit, both, - Committee members. All members possess adequate qualifications for their posts as specified by the Audit Committee Charter and in accordance with the Securities and Exchange Commission and the Stock Exchange of Thailand regulations and best practice guidelines. The Audit Committee has performed its duties and responsibilities independently, as assigned by the Board of Directors in compliance with the Charter which has been carefully reviewed, updated and approved by the Board of Directors, included the requirements of the Securities and Exchange Commission and the Stock Exchange of Thailand, ensuring that the Company’s business operations were carried out without any conflict of interest, with adequacy of internal control systems, risk management and duties under the corporate governance in order to the management and employees executed their duties with honesty, responsibility and in accordance with the Company’s policies. In the year 2013, the Audit Committee’s performance of its duties is summarised as follows:

Review of financial reporting process The Audit Committee has reviewed and discussed with the external auditor and executives responsible for preparing the financial report in relation with significant information for the Company’s quarterly and annual financial statements for the year 2013 as well as consolidated financial statements of Thoresen Thai Agencies Public Company Limited and its subsidiaries, including change in significant THORESEN THAI AGENCIES PLC.

accounting policy, significant related party transaction, significant acquisition and disposal of the Company’s asset, accuracy and adequacy of information disclosure, significant unusual and estimated transaction, if any, for the benefit of investors or users of such statements before submitted to the Board of Directors for approval. In addition, the Committee held meetings with the external auditors without the presence of the Company’s management so as to freely discuss important issues which may arise, as well as to hear whether there was any suspicious information which indicated potential fraud, in accordance with the section 89/25 of the Securities and Exchange Act B.E. 2535 amended by the Securities and Exchange Act (NO. 4) B.E. 2551 The Audit Committee is of the opinion that the Company has a proper financial reporting process to disclose its financial information, in which the financial statements were free from material misstatement and prepared in accordance with Thai Financial Reporting Standards. In addition, the Internal Auditors have also reviewed the connected transaction or transaction that may lead to conflicts of interests ensuring that the transaction occurred has complied with the Securities and Exchange Commission and the Stock Exchange of Thailand regulations requirements, other regulatory bodies and are reasonable and for the highest benefit of the Company. The result of the review has been reported to the Audit Committee and subsequently the Board of Directors. The Audit Committee and Board of Directors are of the opinion that the aforesaid transactions are reasonable, fair, without conflict of interest, in all material respects, transparency and for the highest benefit of the Company.

Annual Report 2013

Review of internal control system The Audit Committee has determined the independence of Internal Audit Department including the chain of command in order to establish the credibility and independence of Internal Audit Department as well as all internal audit activities and consulting activities were performed effectively, efficiently and carried out in a manner most beneficial to the Company and its shareholders by reviewing the scope of internal auditing, their responsibilities and functions, and approved the revised internal audit charter and annual audit plan, which based on the Company’s key risk areas and emphasised on the evaluation of the effectiveness of key control points for each process. Director, Internal Audit, Miss Runpavee Daengnoy was appointed in September 2012 after carefully consideration of all qualified candidates. The Audit Committee has concluded that Miss Runpavee has high degree of expert knowledge and professional experience required for the purposed of conducting the Company’s Director, Internal Audit. During the year she has provided the Audit Committee with her view on the effectiveness and efficiency of internal audit activities by focusing on high-risk auditable entities and also on various consulting activities. The Audit Committee will evaluate her performance with President and Chief Executive Officer during the annual performance assessment. The Audit Committee has reviewed the adequacy and suitability of the internal control system assessment that the Internal Audit Department reported to the Committee, including the results of audit on the operational processes of key businesses of the Company and core subsidiaries. Furthermore, the Audit Committee visited operation sites of core subsidiaries to gain business process insight and also gave useful recommendations to improve effectiveness of internal control systems. In addition, the Audit Committee evaluated management control systems, financial control systems and compliance control systems, based on guidelines from the office of the Securities and Exchange Commission. Internal auditors have also followed up on the results of

the aforesaid review and audit which the results of the audit and the recommendations were discussed with the related staff and management prior to report to the Audit Committee. The results have shown that the systems and processes are appropriate to the Company’s operations. The external auditor has also reported that was no significant deficiency impacting to the Company’s financial statements identified. The Audit Committee, therefore, is of the opinion that the Company has proper and adequate internal control systems including organisational control and environment measure, risk management measure, management control activities, information and communication measure, and monitoring systems, as management determines is necessary and there are no significant deficiencies identified whether due to fraud or error.

Review of compliance with laws and regulations The Audit Committee has reviewed the Company’s operating performance and designed processes to ensure that it had complied with the law on securities and exchange BE 2535, the Exchange’s regulations and requirements and other laws relating to the Company’s businesses. The Audit Committee is of the opinion that the Company has been in compliance with significant laws and regulations to which the operations of the Company are subjected.

Review of misconduct or fraud The Audit Committee acknowledged all concerns of misconduct or fraud and the final investigation report by Internal Auditors according to Whistleblower Policy by monthly. No fraudulent case was found in 2013.

Appointment of the external auditor The Audit Committee took into consideration the nomination and appointment of the external auditor and the annual audit fee for 2014. This process entailed assessment of the current external auditor for its independence, performance from the year 2013, knowledge, competency, and experience in core businesses, available team support and competitiveness of the audit fee. After careful consideration, the Committee concluded that KPMG THORESEN THAI AGENCIES PLC.

Annual Report 2013

Phoomchai Audit Ltd. external auditors acted independently, demonstrated a high degree of expert knowledge and professional experience required for the purposed of conducting the Company’s external audit, performed with satisfactory result and with a competitive audit fee. The Audit Committee has recommended KPMG Phoomchai Audit Ltd. as external auditor to the Board of Directors before seeking approval at the Shareholders’ Meeting for the appointment of Mrs. Siripen Sukcharoenyingyong, Certified Public Accountant Registration No. 3636; and/or Mr. Charoen Phosamritlert, Certified Public Accountant Registration No. 4068; and/or Mr. Veerachai Ratanajratkul, Certified Public Accountant Registration No. 4323; and/or Miss Pornthip Rimdusit, Certified Public Accountant Registration No. 5565; all of KPMG Phoomchai Audit Ltd., as the external auditor of the Company for the year ended 30 September 2014 with the audit fee of Baht 4.65 million.

The Audit Committee meeting and self assessments Normally, the Audit Committee has meeting before the Board of Directors’ Meeting so that the minutes of the Audit Committee Meeting and discussions with Internal Auditors and external audits without management’s presence in such discussions could be sent to the Board of Directors for consideration, acknowledgement, discussions and asking for the suggestions from the Board. The members of Audit Committee regularly have informal and formal discussions with internal auditors in connection with the results of the various areas of review undertaken by internal auditors. The formal Audit Committee Meeting usually takes around 4-6 hours, in average. In the year 2013, Audit Committee held 14 regular meetings; the record of attendance of the members of Audit Committee is summarised as follows:

(From 1 October 2012 to 30 September 2013) No. Audit Committee Member

Position

No. of Attendance/Meeting

Mr. Krish Follett

Audit Committee Chairman

14/14

Mr. Santi Bangor

Audit Committee Member

13/14

Mr. Peter Stokes (due to retire by rotation on 30 January 2013)

Audit Committee Member

3/3

Mr. Cherdpong Siriwit (appointed on 14 February 2013)

Audit Committee Member

8/10

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Appointment of the existing Audit Committee Members The Board of Directors meeting held on 14 February 2013 approved the appointment of Mr. Cherdpong Siriwit to be a new Audit Committee to replace Mr. Peter Stokes who retired by rotation, with effect on 14 February 2014. In addition, the Committee carried out its own performance assessment, against the Audit Committee Charter approved by the Board of Directors, relevant laws and regulations and assignment from the Board of Directors. The self-assessment was due to be benchmarked against guidelines from the Securities and Exchange Commission. The findings were that its performance was of a very good quality.

In summary, the Audit Committee has continuously performed its duties and responsibilities with knowledge, ability, carefulness and sufficient independence, provided comments and recommendations which were beneficial to all of the Companyâ&#x20AC;&#x2122;s stakeholders and also has determined that the Board of Director, management has performed their job professionally and in pursuit of the Companyâ&#x20AC;&#x2122;s strategic goals, with adequate internal control compatible with its business, together with reliable accounting practice and financial statements, and compliance with significant and relevant laws and regulations. For and on behalf of the Audit Committee of Thoresen Thai Agencies Public Company Limited

Krish Follett Chairman of the Audit Committee

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Board of Directors

1. Mr. Prasert Bunsumpun (61) Chairman of the Board/Chairman of Executive Committee Percentage of Shareholding: 0.002% Date of first appointment: 31 January 2012

2. Mr. Chalermchai Mahagitsiri (35) Executive Vice Chairman/Member of Executive Committee/Member of Risk Management Committee Percentage of shareholding: 15.696% Date of first appointment: 31 January 2012 (was appointed as President & Chief Executive Officer effective on 1 January 2014)

3. M.L. Chandchutha Chandratat

Mr. Prasert Bunsumpun was appointed as director in January 2012 and Chairman of the Board in March 2012. Mr. Prasert Bunsumpun serves as Chairman of PTT Global Chemical Plc. He holds directorships at PTT Plc., Krung Thai Bank Plc., and Shin Corporation Plc. He also is Chairman of Mermaid Maritime Plc., and the Thailand Business Council for Sustainable Development (TBCSD). He was President and CEO of PTT Plc., Chairman of IRPC Plc., PTT Exploration and Production Plc., Chairman of PTT Chemical Plc., PTT Aromatic and Refinery Plc., together with Director of Thai Oil Plc., and Bang Chak Petroleum Plc.

Mr. Chalermchai Mahagitsiri was appointed as director in January 2012 and Executive Vice Chairman in February 2013. He serves as Chief Executive Officer of PM Group Co., Ltd. which is a holding company of Mr. Prayudh Mahagitsiri family, Chief Executive Officer and Executive Vice Chairman of Mermaid Maritime Plc., and Vice Chairman of Unique Mining Services Plc. He also serves as Director of Quality Coffee Products Co., Ltd. which is partnering with Nestle SA Switzerland to produce Nescafe. He also serves as Director of Posco-Thainox Public Co., Ltd., Sak Chaisidhi Co., Ltd. and Thai Film Industries Plc., and Managing Director of Lakewood Country Club Co., Ltd.

M.L. Chandchutha Chandratat joined in 2005 as the Chief Executive Officer. His professional experience began with Bank of America, where he served in San Francisco (U.S.A.), Hong Kong, and Bangkok from 1989 to 1994. He joined Bangkok Bank Plc. from 1994 to 2000 and worked for J.P. Morgan, Hong Kong from 2000 to 2002 and Morgan Stanley Dean Witter Asia (Singapore) Pte. Ltd. from 2002 to 2005.

Mr. Bunsumpun holds a M.B.A. from Utah State University, U.S.A., a B.Eng. in Civil Engineering from Chulalongkorn University. He received Honorary Doctoral in Engineering from Chulalongkorn University, Honorary Doctoral in Management from National Institute of Development Administration (NIDA), Honorary Doctoral in Management Science from Petchaburi Rajabhat University, Honorary Doctoral in Management from Mahasarakarm University, Honorary Doctoral in Social Innovation Management, Suan Sunandha Rajabhat University. Moreover, Mr. Bunsumpun received a Certificate in Advanced Management Program (AMP 155) from Harvard Business School, USA., Certificate in National Defense College (Class Number 4010), Certificate in Politics and Government in Democracy for Executives (Class 6) from King Prajadhipokâ&#x20AC;&#x2122;s Institute, and Certificate in Capital Market Academy Leadership Program (Class 3) from Capital Market Academy. He also completed the Director Accreditation Program (DAP 26/2004) in 2004 and the Role of Chairman Program (RCP 28/2012) in 2012 by the Thai Institute of Directors Association (IOD).

THORESEN THAI AGENCIES PLC.

Mr. Mahagitsiri holds a M.S. in Finance from Boston University and a B.S. in Finance from Suffolk University, both in USA. Mr. Mahagitsiri completed the Director Accreditation Program (DAP 30/2004) in 2004 and the Directors Certification Program (DCP 53/2005) in 2005 by the Thai Institute of Directors Association.

(47) President & Chief Executive Officer/ Member of Executive Committee Percentage of Shareholding: 0.113% Date of first appointment: 31 January 2005 (resigned, effective on 31 December 2013)

He received his M.B.A. from the University of California at Berkeley in 1989 and his B.S. (magna cum laude) in Economics from the University of Minnesota in 1987. In 2006, he completed the Directors Certification Program (DCP 70/2006) by the Thai Institute of Directors Association.

Annual Report 2013

4. Mr. Chia Wan Huat Joseph

(54) Member of Executive Committee/Member of Corporate Governance Committee Percentage of shareholding: 0.00% Date of first appointment: 31 January 2012

5. Mr. Krish Follett

(64) Chairman of Audit Committee/Chairman of Risk Management Committee/Independent Director Percentage of Shareholding: 0.00% Date of first appointment: 12 April 2012

6. Mr. Santi Bangor

Mr. Chia was appointed as director since January 2012. He serves as Senior Executive Vice President of PM Group Co., Ltd., director of Mermaid Maritime Plc., and director of Unique Mining Services Plc. From 2005 to 2011, he was the Senior Executive Vice President of Structured Finance Group for Advance Finance Plc. He was responsible for financial advisory business focused on steel, mining, paper and energy companies in Thailand, Malaysia and Singapore. During 2003 to 2004, Mr. Chia was the Assistant Managing Director of South East Life Insurance and South East General Insurance Company in Thailand. From 1999 to 2002, Mr. Chia was the Managing Partner of financial advisory company, Pacific Century Consultant Limited focused on infrastructure companies.

Mr. Krish Follett was appointed as director since April 2012. He serves as Independent Director and Chairman of the Audit Committee of Property Perfect Plc., Independent Director and Chairman of the Audit Committee of Amana Leasing Plc., Independent Director and Member of the Audit Committee of Thanulux Plc., and Independent Director and Chairman of the Risk Management Committee of Thai Wacoal Plc. He also served as Assistant Governor of Operations Group, Senior Officer of Financial Institution Oversight and Examination Department of the Bank of Thailand, and Vice President, Capital Markets, Enforcement Department of the Securities and Exchange Commission (SEC), Thailand. At present, he serves as Honorary Director of Nakorn Phanom University.

Mr. Santi Bangor has been elected as the TTA director since January 2012. He has also served as an Independent Director and Member of the Audit Committee of Peopleâ&#x20AC;&#x2122;s Garment Plc. since 2009. He is appointed as a member of State Enterprise Performance Agreement and Performance Appraisal Sub-Committee on Communication and Energy Sector, Performance Appraisal Committee, Ministry of Finance in 2012. He was the President of Yonok University (Nation University) during 2006-2009, and Deputy Secretary General to the National Economic and Social Development Board, Office of the Prime Minister (1997-2006). Mr. Bangor was also appointed to serve as the Director of Government Pension Board, Metropolitan Electricity Authority and State Railway Authority.

Mr. Chia holds a Masterâ&#x20AC;&#x2122;s Degree (EMBA) from Sasin Graduate School of Business, Chulalongkorn University in a joint program with Kellogg Graduate School of Management of Northwestern University of USA. In 2012, he completed the Directors Certification Program (DCP 165/2012) by the Thai Institute of Directors Association (IOD).

Mr. Follett holds a M.B.A. (Finance) from Thammasat University, a B.A. in Economics from Thammasat University, and a Certificate in Advanced Management Program from Harvard Business School, Boston, USA. Mr. Follett completed the Director Certification Program (DCP 149/2011) in 2011, and the Diploma of the Directors Certificate Program in 2012 by the Thai Institute of Directors Association (IOD).

(67) Chairman of Nomination and Remuneration Committee/Chairman of Corporate Governance Committee/Member of Audit Committee/Independent Director Percentage of Shareholding: 0.00% Date of first appointment: 31 January 2012

Mr. Bangor holds a M.A. in Agricultural Economics from Texas Tech University, USA, a B.A. in Political Science (Fiscal) from Chulalongkorn University, and a Development Certificate from Cambridge University, UK. and Dip.from National Defence College ( NDC 388). In 2001, Mr. Bangor completed the Director Certification Program (DCP 12/2001). In 2013, he also completed the Advanced Audit Committee Program (ACP 10/2013), the Role of the Compensation Committee Program (RCC 16/2013), Monitoring Fraud Risk Management (MFM 9/2013), Monitoring the System of Internal Control and Risk Management (MIR 14/2013), Monitoring the Internal Audit Function (MIA 14/2013), and Monitoring the Quality of Financial Reporting (MFR 17/2013), all by the Thai Institute of Directors Association (IOD).

THORESEN THAI AGENCIES PLC.

Annual Report 2013

7. Ms. Ausana Mahagitsiri

(33) Member of Nomination and Remuneration Committee/Member of Corporate Governance Committee/Non-Executive Director Percentage of shareholding: 4.07% Date of first appointment: 31 January 2012

8. Mr. Ghanim Saad M. Alsaad Al-Kuwari (49)

9. Mr. Mohammad Rashed Ahmad M. Al Nasseri (43)

Independent Director Percentage of Shareholding: 0.00% Date of first appointment: 31 January 2012

Member of Nomination and Remuneration Committee Percentage of Shareholding: 0.00% Date of first appointment: 30 January 2013

Ms. Ausana Mahagitsiri was appointed as director since January 2012. She serves as Chief Operating Officer of PM Group Co., Ltd. which is a holding company of Mr. Prayudh Mahagitsiri family, Managing Director of Mountain Creek Development Co., Ltd., and a director of Unique Mining Services Plc.

Mr. Ghanim Saad M. Alsaad Al-Kuwari serves as Chairman of Qatar Project Management Company since 2008, Chairman and Managing Director of Barwa Real Estate since 2005, and Managing Director and CEO of Qatari Diar Real Estate Investment Co. since 2006. He currently chairs several boards in many businesses in Qatar and regionally including: Barwa Bank, Al Imtiaz Investment Company, A’ayan Real Estate, Al Jazeera Academy, Al Ritaj Investment Company, Rizon Parters, Jersey Group, First Real Estate Company, First Finance Company, Urban Velvet in United Kingdom, and Ghanim Bin Saad Al Saad & Sons Holdings Groups.

Mr. Mohammad Rashed Ahmad M. Al Nasseri was appointed as director since January 2013. He serves in a number of prominent roles within the United Arab Emirates (“UAE”) government, including General Director General of Private and official office of H.H Sheikh Mohammed Bin Khalifa Bin Zayed Al Nahyan, and member of the National Consulting Council. Mr. Al Nasseri also serves asa General Manager of Al Ain Equestrian, Shooting & Golf Club, Vice President of Youth Hostel Society, and a Board member of The Emirates Insurance Company, the National Investor Company and Alwifaq Finance Company.

Mr. Alsaad holds a M.B.A. from Kent University, United Kingdom in 1995, and a B.A. in Social Sciences from Qatar University in 1990.

He holds a License of Law from Emirates University.

She holds a M.B.A. from Sasin Graduate Institute of Business Administration of Chulalongkorn University in a joint program with Kellogg Graduate School of Management of Northwestern University, USA, and a B.S. in Business Administration from Boston University School of Management in Boston, USA. In 2014, Ms. Mahagitsiri completed the Director Accreditation Program (DAP 30/2004) by the Thai Institute of Directors Association (IOD).

THORESEN THAI AGENCIES PLC.

Annual Report 2013

10. Mr. Yves Barbieux (75) Director Percentage of Shareholding: 0.00% Date of first appointment: 12 July 2013

11. Mr. Cherdpong Siriwit

(67) Member of Audit Committee/Independent Director Percentage of Shareholding: 0.00% Date of first appointment: 30 January 2013

Executive Officers 1. Mr. Chalermchai Mahagitsiri

(35) Executive Vice Chairman (was appointed as President & Chief Executive Officer effective on 1 January 2014)

2. M.L. Chandchutha Chandratat

(47) President & Chief Executive Officer (resigned, effective on 31 December 2013)

3. Mr. David Lawrence Ames

(48) Executive Vice President, Transport (resigned, effective on 29 October 2013)

4. Mr. Krailuck Asawachatroj

(40)

Executive Vice President, Corporate Finance and Accounting (effective on 1 January 2014)

5. Mr. Somporn Chitphentom Mr. Yves Barbieux was joined in July 2013 as director. He currently serves as Executive Chairman of Elsa Consultants S.A. He also serves as the Chairman of the Executive Board of Micro Consulting (Switzerland) and Voluntis S.A. He also serves as a Member of the Executive Board of Claranor (France) and Lucibel (France). He held various management functions with Nestlé and served as Chairman and Chief Executive Officer of Nestlé in several countries including, Venezuela, Belgium, Thailand, France and Italy. Mr. Barbieux holds a M.B.A. from Harvard Business School in 1973, a M.B.A. from Institut d’Administration des Entreprises de PARIS in 1967 and a Civil Engineer from Ecole Centrale de Paris in 1961.

Mr. Cherdpong Siriwit was appointed as director since January 2013. He is a veteran of Thailand’s energy sector, previously holding roles as Director-General of the Ministry of Industry’s Department of Mineral Resources as well as Permanent Secretary of the Ministry of Energy. In the private sector, he served as Chairman of a number of publicly listed companies, including PTT Plc. and currently serves as Independent Director and Chairman of both the Audit and Corporate Governance Committees of IRPC Plc. Mr. Siriwit holds a M.A. in Economics from Georgetown University, USA, and a B.Sc. in Economics (Hons) from Thammasat University. Mr. Siriwit completed the Role of Chairman Program (RCP 10/2004), Director Accreditation Program (DAP 8/2004), and the Finance for Non-Finance Director (FND 13/2004) in 2004, the Directors Certification Program (DCP 104/2008) in 2008, and the Audit Committee Program (ACP 27/2009) in 2009 by the Thai Institute of Directors Association (IOD).

(52)

Executive Vice President, Corporate Strategy

6. Mr. Vichai Chuensuksawadi

(56) Executive Vice President, Infrastructure (resigned, effective on 31 December 2013)

7. Mr. Prithayuth Nivasabutr (55) Executive Vice President, Corporate Business Services (resigned, effective on 31 December 2013) 8. Ms. Urai Pluemsomran (59) Executive Vice President, Corporate Risk, and Compliance / Executive Vice President, Corporate Human Resources 9. Mrs. Thitima Rungkwansiriroj (52) Executive Vice President, Corporate Finance and Accounting (resigned, effective on 31 December 2013)

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Business Review and Outlook 2013 CORPORATE STRUCTURE

Second-tier

Top-tier

Thoresen Thai Agencies Public Company Limited (“TTA” or the “Company”) invests in and operates various businesses in the transport, energy, and infrastructure sectors.

TTA has four core business units - Thoresen Shipping Singapore Pte. Ltd. (“Thoresen Shipping” or “TSS”) (Transport Group), Mermaid Maritime Public Company Limited (“Mermaid”) (Energy Group), Baconco Co., Ltd. (“Baconco”) (Infrastructure Group), and Unique Mining Services Public Company Limited (“UMS”) (Infrastructure Group). A summary of the various businesses follows:

Group Transport

Group Energy

Group Infrastructure

Dry bulk shipping services

Subsea engineering and offshore drilling services

Coal logistics and distribution in Thailand Fertiliser production & sales and warehouses services in Vietnam

Oil and gas tanker services in the Philippines

Coal investments

Deep-sea port in South Vietnam

Ship brokerage services

Third-party logistics services

Shipping agency services

Stevedoring and ship supplies

Transport Group

Energy Group

TTA and its subsidiaries have provided shipping related services since 1904 and dry bulk shipping services since 1985. The dry bulk business is operated through 100%-owned subsidiary, Thoresen Shipping. In 2010, TTA also invested in Petrolift, Inc., an oil and gas tanker services business in the Philippines (40% owned by TTA). The Transport Group also includes several ship brokerage and ship agency businesses across the region.

The Energy Group has provided subsea services since 1995 and offshore drilling services since 2006 through Mermaid (57.14% owned by TTA). In 2009, TTA made a relatively small indirect investment in Merton Group (Cyprus) Ltd. (“MGC”) (26.15% owned by TTA), which owns 37.5% of a coal mining project in the Philippines, and in 2011 invested in Qing Mei Pte. Ltd. (“QM”) (33.33% owned by TTA), which owns 70% of a coal mining project in Indonesia.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Infrastructure Group The Infrastructure Group has a coal logistics company, UMS (88.68% owned by TTA) and a fertiliser production and distribution and warehouse company, Baconco Co., Ltd. (100% owned by TTA), which is located next to a deep-sea port called Baria Joint Stock Company of Services for Import Export of Agro-forestry Commodities and Fertilizers (“Baria Serece”), in which TTA also owns 20%. The Group has also invested in relatively small warehouse and logistics companies in Thailand and Vietnam. Wholly-owned subsidiaries Soleado Holdings Pte. Ltd. and Athene Holdings Ltd. have been used to own TTA’s overseas and local investments, respectively.

Competitive strengths of the Group TTA’s operating performance ultimately depends on its ability to prudently and efficiently manage its investments and businesses through different industry cycles, using a conservative financial approach. Thoresen Shipping and Mermaid are by far TTA’s two largest businesses and operate in historically different cycles. TTA has made some diversified investments in recent years to soften the impact of down cycles in its two largest businesses, but they have not yet reached sufficient scale. The Company’s ability to grow these diversified investments to sufficient scale while sensibly managing the Company’s largest businesses hinges on the following competitive strengths:  Strong

knowledge of key commodities flows and trades: With well-established global dry bulk, coal, offshore oil and gas, and fertiliser businesses, TTA’s business network affords it a unique vantage point from which it can act upon key trends in the global commodities trade.

 Versatile

and high quality owned fleet and services: The Group owns most of its assets, enabling it to provide a full range of customised services to its clients. From this, it can maintain better control of its operating costs and provide competitive market pricing, resulting in strong brand recognition and long-term client relationships. Commercial, technical, and financial risk management are done in-house for all core business units, and industry standards dictate that all marine assets are maintained in a suitable condition that is accepted by leading classification societies.  Global

business network: Thoresen Shipping’s newest commercial office in Copenhagen facilitates greater access to North Atlantic charters with a US office expected to further boost access to higher yielding dry bulk trading routes. Mermaid has expanded beyond its traditional Southest Asian markets into the Middle East and enjoys relationships with many of the world’s largest oil and gas companies.  Strong

financial position: Although 2013 was a difficult year in bottom line terms, the Group managed positive normalised earnings before interest, taxes, depreciation, and amortisation (“EBITDA”) of Baht 1,797 million. As of 30 September 2013, TTA’s consolidated cash and cash equivalents balance stood at Baht 7,458 million and its debt to equity ratio was 0.56:1.  Financial

flexibility following successful fund raising: Over the last year, TTA successfully raised Baht 3,964 million to fund its business expansion plans through a rights offering. A majority of these proceeds were invested in Mermaid, which successfully raised SGD 175.78 million through a right issue and private placement.

THORESEN THAI AGENCIES PLC.

BUSINESS REVIEW AND OUTLOOK

TRANSPORT

Annual Report 2013

TRANSPORT GROUP The Transport Group’s two key businesses are Thoresen Shipping and Petrolift. During the 2013 fiscal year, Thoresen Shipping operated an average fleet of 18 owned vessel equivalents and 13 charteredin vessels, providing tramp services on a global basis. The vessels operate at the requirements of Thoresen Shipping’s clients under time charters and contracts of affreightment (“COA”) in addition to short-term time charters and voyage charters. TTA holds a 40% interest in Petrolift, which owns and operates 10 petroleum tankers/barges, including two liquefied petroleum gas tankers with a total capacity of 41 million litres that are primarily used for domestic transport against long-term contracts with major oil and gas companies. Other businesses in the Transport Group are shipping related services businesses, including ship agency services in Thailand, Vietnam, and the United Arab Emirates and ship brokerage services for dry cargoes in Thailand, Singapore, and India.

Generally speaking, global trade of commodities drives the performance of the dry bulk shipping industry. In particular, freight rates are affected by trade demand and available supply of vessels in different regions. According to Fearnleys, despite a continued fragile global economy, the total dry bulk trade is now growing at a steady pace with coal and iron ore as the leading commodities. Iron ore imports have and will continue to grow considerably faster than steel production as a larger share of China’s iron ore consumption will be imported. This is mainly due to the poor quality of Chinese domestic iron ore and high production costs facing many Chinese iron ore producers. Chart : Chinese Iron Ore Imports (Million Ton) 1,600

60%

1,400

50%

1,200 40%

1,000 800

Thoresen Shipping

600

Industry Overview

400

Dry bulk operators carry “major” bulk cargoes, including coal, iron ore, and grains, and “minor” commodities, such as fertiliser, wood products, cement, and metal ores. Dry bulk shipping is segmented by capacity or deadweight tonnes (“dwt”), and classes include VLOC, Capesize, Panamax, Supramax, Handymax, and Handysize. Size Category

Deadweight Tonnes

VLOC

200,000+

Capesize

100,000 – 200,000

Panamax

60,000 – 100,000

Supramax

50,000 – 60,000

Handymax

40,000 – 50,000

Handysize

10,000 – 40,000

THORESEN THAI AGENCIES PLC.

30% 20% 10%

200 0

2006

2007

2008

2009

World Steel Production Million Tonnes (left axis)

2010

2011

2012 10M2013

Chinese Market Share (right axis)

Source: Fearnleys

Low freight rates for much of 2013 came as a result of high deliveries of new vessels. During the first 10 months of 2013, total deliveries reached more than 52 million dwt. Deliveries of new vessels into the market have for quite some time outpaced demand growth, but this situation is expected to slow down over the next two years. Scrapping has continued at a strong pace, and is expected to continue at a high level as long as freight rates remain low.

Annual Report 2013

In 2012, a record 96 million dwt started trading, while in 2013, deliveries slowed down to approximately 60 million dwt. Next year, deliveries are expected to come down further. The supply of dry cargo vessels increased by approximately 6% in 2013.

The relationship between the total order book and the existing fleet is a guide to future levels of supply. As of November 2013, the global dry bulk order book amounted to 114.6 million dwt, or 16% of the existing dry bulk fleet. Supply growth is expected to be slowest in the Supramax and Handymax sectors, the two classes of vessels operated by Thoresen Shipping.

Dry Bulk Carrier Orderbook Number of Vessels

Total Capacity (million dwt)

% of Existing Fleet (dwt)

200,000+

20.1

22.5

Capesize

100,000 – 200,000

131

22.1

10.9

Panamax

60,000 – 100,000

652

48.1

25.0

Supramax

50,000 – 60,000

131

7.3

7.0

Handymax

40,000 – 50,000

2.7

6.9

Handysize

10,000 – 40,000

418

14.3

16.5

1,477

114.6

Size Category

Deadweight Tonnes

VLOC

Total Freight rates remained low in the first half of 2013. A spike in Capesize rates in the July-September quarter was followed by increases in the smaller segments. While Capesize and Panamax rates dropped down again in the October-December quarter, Supramax and Handysize rates continued to increase. Chart : One-Year Time Charter Rates Freight Market and Rates (U.S. Dollars per Day) 180,000

Vessel Prices Newbuilding Prices Newbuilding prices remained relatively low due to depressed freight rates, high shipyard capacity, and limited new contracting since the end of 2008, but have begun to edge up in the second half of 2013. Overall, 2013 was characterised by a mixture of significant uncertainty and opportunity for ship owners and investors. Chart : Dry Bulk Carrier Newbuilding Prices

160,000 140,000

(Millions of US Dollars)

120,000

120

100,000

100

80,000 80

60,000 40,000

20,000

Capesize 150'

07/2013

01/2013

07/2012

01/2012

07/2011

01/2011

07/2010

01/2010

01/2009 07/2009

07/2008

01/2008

07/2007

07/2006 01/2007

01/2006

07/2005

01/2005

07/2004

Panamax

Capesize 170'

20 0

01/2001 07/2001 01/2002 07/2002 01/2003 07/2003 01/2004 07/2004 01/2005 07/2005 01/2006 07/2006 01/2007 07/2007 01/2008 07/2008 01/2009 07/2009 01/2010 07/2010 01/2011 07/2011 01/2012 07/2012 01/2013 07/2013

Supramax

Source: Fearnleys

07/2003 01/2004

01/2003

07/2002

01/2002

40 01/2001 07/2001

Capesize

Panamax

Supramax

Source: Fearnleys

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Similarly, second-hand values have also dropped to a low level since the end of 2008, tracking a sustained decline in freight rates. Second-hand values hit the bottom of the industry cycle in 2012 and began to recover in 2013, with five-year old Supramax vessels available for approximately USD 22 million.

12-18 months as part of a continuing fleet growth initiative. As of 30 September 2013, Thoresen Shipping owned 18 Handymax and Supramax dry bulk vessels, all flagged in Singapore. The average age of the fleet was 10.1 years with an average dwt of 48,902. Approximately 50% of Thoresen Shipping’s vessels are positioned in higher-yielding Atlantic routes, while the remaining 50% trade in the Asia Pacific region.

Chart : Dry Bulk Carrier Second-hand Prices (Millions of US Dollars) 180

The focus of Thoresen Shipping today is on proven designs that allow it to operate a consistent fleet with maximum efficiency. In particular, Supramax vessels have been and will continue to be the focus point of Thoresen Shipping’s fleet renewal plan.

160 140 120 100 80

While the index that tracks Supramax dry bulk shipping rates (“BSI”) fell 22% in 2013 to an average of USD 8,700 per day, Thoresen Shipping’s time charter equivalent fell by only 18% to an average of USD 8,400 per day, implying a 7% premium over the BSI after adjusting for revenue generating capacity of the fleet. This overperformance came as a result of a strategic approach targeting niche commodities and selected geographies as well as stronger customer relationships and an expanded client base at Thoresen Shipping’s commercial hub in Singapore. On a full year basis, Thoresen Shipping’s owner expenses averaged about USD 4,087 per day against an industry average of approximately USD 4,500 - 4,600 per day, placing Thoresen Shipping at a significant cost advantage.

60 40 0

01/2000 07/2000 01/2001 07/2001 01/2002 07/2002 01/2003 07/2003 01/2004 07/2004 01/2005 07/2005 01/2006 07/2006 01/2007 07/2007 01/2008 07/2008 01/2009 07/2009 01/2010 07/2010 01/2011 07/2011 01/2012 07/2012 01/2013 07/2013

Capesize

Panamax

Supramax

Source: Fearnleys

Business Review Thoresen Shipping operated on a cash positive basis throughout the year despite the lowest freight rates since 1999. Going forward, TTA remains committed to Thoresen Shipping’s growth and its plans to acquire up to six vessels at reasonable prices over the next

Thoresen Fleet Structure 1) Number of Vessels Number of Vessels Owned Vessels

Chartered-in Vessels

Newbuild Vessels on Order

Handymax

Supramax

TOTAL

Newbuild Vessels on Order -

Total 14.91 4.82 6.48

Size Category

Total

2) Dwt-ed average age Dwt-Weighted Average Age of Vessels Size Category Handymax Supramax TOTAL

Owned Vessels 16.23 6.20 10.12

THORESEN THAI AGENCIES PLC.

Chartered-in Vessels 13.71 4.58 5.56

Annual Report 2013

3) Bulk carriers BULK CARRIERS Vessel Name

Original Delivery Date

Dwt

Age

Thor Dynamic

30/04/1991

43,497

22.44

Thor Wave

30/07/1998

39,042

Thor Wind

18/11/1998

39,087

Thor Energy

16/11/1994

Thor Endeavour

6 7

Design Standard

Classification Bulk > 40,000 dwt

15.18 Open Hatch / Box Shape

< 40,000 dwt

ABS

14.88 Open Hatch / Box Shape

Bulk (Box)

ABS

42,529

18.88 Open Hatch / Box Shape

Bulk (Box)

NKK

11/04/1995

42,529

18.48 Open Hatch / Box Shape

Bulk (Box)

NKK

Thor Enterprise

28/07/1995

42,529

18.19 Open Hatch / Box Shape

Bulk (Box)

DNV

Thor Harmony

21/03/2002

47,111

11.54 Open Hatch / Box Shape

Bulk (Box)

DNV

Thor Horizon

01/10/2002

47,111

11.01 Open Hatch / Box Shape

Bulk (Box)

Thor Achiever

22/07/2010

57,015

3.73

Standard

Bulk > 40,000 dwt

Thor Integrity

02/04/2001

52,375

12.50

Standard

Bulk > 40,000 dwt

Thor Independence

20/12/2010

52,407

11.94

Standard

Tess - 52

NKK

Thor Infinity

21/12/2010

52,383

11.66

Standard

Tess - 52

NKK

Thor Insuvi

02/07/2012

52,489

7.88

Standard

Tess - 52

NKK

Thor Friendship

13/01/2010

54,123

3.72 Semi-Open /Box Shape

Oshima - 53

NKK

Thor Fortune

15/06/2011

54,123

2.30 Semi-Open /Box Shape

Oshima - 53

NKK

Thor Fearless

06/06/2013

54,881

7.90 Open Hatch / Box Shape

Oshima - 53

NKK

Thor Brave

15/11/2012

53,506

0.87 Open Hatch / Box Shape

Vinashin

DNV

Thor Breeze

20/08/2013

53,506

0.11 Open Hatch / Box Shape

Vinashin

DNV

Total Thoresen Fleet : 880,243 DWT ABS : American Bureau of Shipping BV : Bureau Veritas DNV : Det Norske Veritas NKK : Nippon Kaiji Kyokai Source : TTA

Fleet Services Thoresen Shipping’s tramp services derive revenues from:  Voyage, or spot charters, which are charters based on the current market rate;

Time charters, whereby vessels are chartered to clients for a fixed period of time at rates that are generally fixed, but may contain a variable component, such as an inflation adjustment or a current market rate component; and

Throughout 2013, Thoresen Shipping’s bulk carrier vessels were deployed in trades which service the needs of clients in a blend of COA’s, time and spot charters both in the Atlantic and Pacific Oceans. Chart : Fleet Employment by Vessel Days



Tramp - Time Charter

28%

Tramp - Voyage Charter

 COA’s, which are forward delivery contracts agreeing

to the quantity of cargo to be carried for a client over a specified trade route within a fixed period of time.

72%

Source : TTA

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Clients

Employees

The focus for Thoresen Shipping remained on core premium cargos with industrial majors. Over the last year, Thoresen Shipping has also increasingly taken advantage of spot-chartering opportunities for key clients with emergency requirements for ships in key markets where they clients have cargo but not assets.

As of 30 September 2013, Thoresen Shipping employed 76 people in Denmark, Singapore, and Bangkok. In addition, 656 seafarers were employed during the year. Thoresen Shipping boasts highly skilled former mariners, managing both the technical and commercial operations within the office in Bangkok. In Singapore, Thoresen Shippingâ&#x20AC;&#x2122;s commercial team is experienced and knowledgeable and has under its belt deep industry relationships.

Chart : FY 2013 Cargoes Agricultural Products

3.73% 4.93% 6.77% 13.36%

Minerals/Concentrates 14.96%

Iron Ore Coal Steel Products Cement General Cargoes/Others

9.53%

Fertiliser

1.48%

Competitive Landscape The dry bulk industry is highly competitive and fragmented, with ownership of general cargo and dry bulk vessels from 15,000 to 59,999 dwt divided amongst approximately 1,591 independent owners with 5,464 vessels. Chart : Vessel Owners

45.25%

Source: TTA

1-4 vessels 28%

33%

Chart : Freight Revenues (by Client Size)

5-9 vessels 10-14 vessels 15-19 vessels > 20 vessels

16%

10 Largest Customers

25%

< U$ 1,000,000

10%

U$ 0.5-1,000,000

20%

< U$ 500,000 30% 29%

Source: TTA

Thoresen Shipping has made strong progress towards developing relationships with industrial majors by establishing a strong RightShip ranking. This acts as an index to measure the key criteria for large industrial clients, such as BHP Billiton, Rio Tinto Shipping, and Cargill Ocean Transportation.

Source: TTA

Dry bulk also remains highly commoditised, with rates set by the availability of supply. According to industry analysts and executives, slowing new ship orders and strengthening demand from China may spur a market recovery in 2014, leading to the potential for new or returning market entrants.

Headwind and Tailwind Factors Marsoft expects global dry bulk shipping tonne-mile demand to grow by 7% in 2014, with steelâ&#x20AC;?related trades contributing a large part of the growth. Merrill Lynch also sets its growth rate target to 7%, noting that this will be underpinned by an expected 12% increase in seaborne iron ore trade. In terms of supply, RS Platou states that a drop in deliveries to 40-45 million dwt is expected in 2014, which will result in a net fleet expansion of just 4%.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Inter-island Petroleum and Gas Tankering TTA invested USD 28.8 million for 40% of Petrolift, the market leader for double-hulled tankers in the Philippine domestic tanker industry. The domestic tanker business is an integral part of the Philippine petroleum transportation infrastructure, given the geographical landscape and limited petroleum pipeline feeding the country’s thousands of islands. Domestic demand for petroleum products remains steady, giving Petrolift stable and predictable cash flows through strong customer relationships and regular charters. The steady performance of this business unit helps to cushion the Transport Group from some of the impacts of cyclicality in the dry bulk sector. The fleet of 10 vessels trades primarily within Philippine coastal waters and has a total capacity of approximately 41 million litres for transporting fuel products, such as refined petroleum, ethanol, and LPG. Petrolift is an accredited contractor of tankering services for oil majors in the Philippines, and the majority of its existing fleet capacity is contracted under medium to long-term charters with these companies.

Ship Agency TTA owns three ship agency companies. First, Thoresen Shipping and Logistics Ltd. (“TSL”) is the largest ship agency in Thailand, handling almost 1,200 calls in 2013. The Naxco Group, which is a French-based ship agency and logistics group, owns 51% of TSL, while TTA owns 49%. Driven by the strong growth over the last couple of years, the company has expanded within the region with new office openings in Myanmar, Indonesia, and Vietnam. The expansion is derived from new revenue streams that include freight forwarding, project cargoes, chartering, and brokerage. Second, Gulf Agency Company (Thailand) Ltd. (“GAC”) is a medium-sized ship agency company in Thailand. The company’s vessel calls increased to nearly 460 in 2013. GAC is an associate company of TTA, of which TTA and Gulf Agency Company Limited, Liechtenstein, own 51.0% and 49.0%, respectively.

Third, Thoresen (Indochina) S.A. (“Thoresen Indochina” or “IT”) is a joint venture company in which TTA owns 50% and the remaining 50% is owned by private investors. Thoresen Indochina handled more than 400 calls in 2013 and specialises in project cargo handling. By working closely with two sister companies (Baconco and Thoresen-Vinama Agencies Co., Ltd. (“Thoresen-Vinama Agencies” or “TVA”), Thoresen Indochina has been increasing its warehouse and logistics services in the Phu My district of South Vietnam. These three companies provide traditional ship agency services: port clearance, berthing, loading and discharging, cargo booking, supplying fuel water, stores, vessel repairs, and crew changes. In addition, GAC specialises in a comprehensive range of supply chain and logistics solutions, which include air and sea freight, warehousing and distribution, door-to-door transportation, project logistics, international moving, and courier services.

Ship Brokerage Fearnleys (Thailand) Ltd. (“FTL”) is an associate company, of which TTA and Fearnleys A/S (“Fearnleys”) of Norway own 49.00% and 49.00%, respectively. Fearnleys is one of the largest ship broking companies in the world with activities in dry cargo, sale and purchase, tanker, gas, offshore, and consultancy. FTL also has a 99.99% owned subsidiary, Fearnleys Shipbroking Private Limited, which provides dry cargo broking services in India, and a 100% owned subsidiary, Fearnleys Dry Cargo (Singapore) Pte. Ltd., which provides dry cargo broking services in Singapore. FTL engages in a competitive ship broking business with different owners and cargo charterers in Southeast Asia, as well as worldwide.

Middle East Operations Thoresen Shipping FZE (“TSF”), a wholly owned subsidiary of TTA, was established to act as Thoresen Shipping’s regional office in the Middle East and now acts as shipping agent for various carriers. TSF attends to vessels in the UAE and coordinates the operation of a similar number of vessels in other Arabian Gulf ports. TSF has developed a special expertise in customs and cargo clearance and has executed over 1,000 cargo delivered to clients in the UAE, Oman, and other nearby destinations. THORESEN THAI AGENCIES PLC.

BUSINESS REVIEW AND OUTLOOK

ENERGY

Annual Report 2013

ENERGY GROUP

Subsea Engineering Services

The Energy Group’s key business is offshore oil and gas services provided by 57.14% owned Mermaid Maritime Public Company Limited (“Mermaid”). Specifically, Mermaid provides subsea engineering and offshore drilling services to major oil and gas companies or their contractors, primarily in the Asia-Pacific and Middle East regions. Mermaid’s businesses tend to be cyclical in nature, with higher oil and gas prices generally driving greater exploration and production spending and in turn, demand for offshore oil and gas services.

A Brief on Mermaid Mermaid commenced its operations in 1983 and was partially acquired by TTA in 1995. Mermaid was successfully listed on the Singapore Stock Exchange (“SGX”), raising SGD 246 million from its initial public offering of shares. Subsequently, Mermaid has completed two rights share offerings in 2009 and 2013, raising another SGD 332 million.

Industry overview Subsea work in the oil and gas industry has gradually become more important for the development and ongoing production of offshore fields. Some of the key value drivers for the subsea market going forward are dependent on the current robust oil and gas prices, which are driving spending on development of new facilities in mid to deep water, expansion of existing installations, and increased maintenance activity on ageing offshore oil and gas fields.

Types of Subsea Vessels The offshore subsea vessel market encompasses different vessels utilised in the installation, inspection, and maintenance of subsea assets. In broad terms, the subsea vessel market can be divided into dive support vessels (“DSV”), offshore construction vessels (“OCV”), construction support vessels, and remote operated vehicle support vessels (“ROVSV”).

The Subsea Market 2013 was a busy year, with strong tendering activity for new subsea contracts. The markets with the most momentum were the North Sea, Brazil, South East Asia, and the Gulf of Mexico. Vessel rates remained fairly stable compared to 2012.

Type

2007 USD

2008 USD

2009 USD

2010 USD

2011 USD

2012 USD

2013 Trending USD

Offshore Construction Vessels 65-70,000 65-70,000 50-55,000 50-55,000 55-95,000* 55-110,000* 55-100,000* Light Construction vessels

45-55,000 45-55,000 45-55,000 40-50,000 50-60,000

50-60,000

50-55,000

Construction support vessel

35-45,000 35-45,000 40-45,000 40-50,000 40-55,000

45-55,000

40-50,000

→ → →

Comment: Rates are based on a mix of public made information/contract awards, rates received in confidence and a general feeling of the market. The index is based on long term T/C contracts, i.e. 3 to 5 years, direct from vessel owner to 1st tier charterer. Rates do not include ROV’s or special top-side equipment. *A new breed of larger OCVs (150 m LOA+) entered the market in 2010 and as such we see a larger span between the low and high end of this vessel segment.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Fearnleys Offshore Supply points at four different development trends mainly affecting the demand for subsea vessels. First, the recent year’s large discoveries represent a pleasant “subsea market back-log”. Second, in addition to the already discovered reserves, it is likely that the extensive drilling boom will lead to more discoveries and increase the back-log further. Third, new technologies enable producing fields to look for life extension and further development. Fourth, a substantial part of all new subsea development is expected to be installed in deep water of 1,500 feet or more, which implies longer subsea campaigns and increased pressure on the current fleet. Africa and Brazil are taking the largest share of the deepwater development, but the growth in deepwater development is on the rise in areas like the Gulf of Mexico and Southeast. Brent crude dropped just below USD 100 per barrel in April, but has remained between USD 100 and USD 120 through most of 2013; in other words, above the hurdle rates that oil and gas companies set for both their committed and uncommitted development projects. The uncertainty about the global economy has not slowed down the oil companies’ activities. The chart below shows the historical development of Brent oil prices. Chart : Historical Oil Price Brent Blend ($/bbl) Price (USD/bbl) 160 140 120 100 80 60 40 20 0 01/04/05 01/04/06 01/04/07 01/04/08 01/04/09 01/04/10 01/04/11 01/04/12 01/04/13

Source: Fearnleys Securities

Business Review Subsea engineering services are provided through Mermaid Offshore Services Ltd. (“MOS”), Zamil Mermaid Offshore Services Company LLC (“Zamil Mermaid”), Subtech Limited, Subtech Qatar Diving & Marine Services LLC (“Subtech”), Seascape Surveys Pte. Ltd., Seascape Surveys Ltd., and PT Seascape Surveys Indonesia (collectively, the “Subsea Division”). The Subsea Division’s core strengths comprise air and saturation diving from Mermaid’s owned fleet and an array of chartered-in vessels and remote intervention by ROV‘s. A wide range of subsea engineering services are provided, including inspection, repair and maintenance, light construction and installation support, commissioning projects, and cable lay interventions and installations. On 16 September 2013, Mermaid’s 31-year-old offshore support vessel, M.V. Mermaid Performer, was sold. As of 30 September 2013, the subsea fleet consisted of 8 subsea support vessels (including chartered in vessels), 3 of which are specialised dive support vessels, and supported by 5 saturation diving systems, 12 air diving systems and 17 ROV systems, including deepwater and ultra-deepwater systems. Apart from its key assets, the Subsea Division sub-contracts a large number of specialist and marine personnel to work on its subsea engineering projects in addition to a permanent workforce. In early financial year 2013, Mermaid announced a landmark diving services contract which it is carrying out through its Middle East joint venture, Zamil Mermaid. Revenues from this contract have already begun to buoy Mermaid’s revenues and returns, and will continue to do so into the 2014 financial year and beyond. In August 2013, Subtech was awarded a subsea contract with Bibby Offshore Limited for services in the North Sea. In September 2013, Seascape, was awarded a two-year contract to provide offshore inspection, repair, and maintenance (“IRM”) services to a major Indonesia-based upstream oil and gas operator. The Middle East, Southeast Asia, and the North Sea are expected to pace regional growth for the Subsea Division over the next few years.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Fleet and Diving Services All vessels are classified by DNV or ABS, which are two of the leading classification societies. All vessels are subject to regular inspection by class surveyors, in addition to regular dry-docking and other planned maintenance.

Another core competency for the Subsea Division is running its diving operations to world class standards, especially those set by the International Oil and Gas Producers Association (“OGP”). A number of new bids, including the one that Mermaid recently won from Saudi Aramco, include OGP certification as a main precondition.

The following details the Subsea Division’s core services: Exploration services

Pre-installation surveys; rig positioning and installation assistance, subsea equipment maintenance

Development services Installation of subsea pipelines, flow lines, control umbilicals, manifolds, risers, pipe lay and burial, installation and tie-in of riser and manifold assembly; commissioning, testing, and inspection; and cable and umbilical lay and connection Production Services

Inspection, maintenance, and repair of production structure, risers, pipelines, and subsea equipment

Mermaid Subsea Fleet List No. 1.

Calendar Year

Name of Vessels

Vessel Type

Mermaid Commander

DP2 Dive Support Vessel

Build Year

Purchase Year

1987

2005

Mermaid Endurer

DP2 Dive Support Vessel

2010

Mermaid Asiana

DP2 Dive Support Vessel

2010

Mermaid Siam

DP2 Construction Barge

2002

2010

Mermaid Sapphire

DP2 ROV Support Vessel

2009

Mermaid Challenger

General Utility Vessel

2008

Barakuda

General Utility Vessel

1982

2010

Endeavour (Charter)

DP2 ROV Support Vessel

2008

2012 (Charter)

Clients Clients include major and independent oil and gas producers and suppliers, pipeline transmission companies, and offshore engineering and construction firms.

of local firms based in Asia and the Middle East as well as larger international companies based in Europe and the US, most of which are major Engineering, Procurement, Installation, and Commissioning (“EPIC”) contractors.

Employees

Headwind and Tailwind Factors

The Subsea Division relies on the high quality of its specialised workforce. As of 30 September 2013, The Subsea Division had around 1,000 permanent and contract personnel spread across Thailand, Qatar, Saudi Arabia, and Indonesia.

The subsea order book has seen consistent growth in the last 12 months. There are now almost 30 subsea vessels under construction with planned deliveries in 2015-2016. Construction vessels are still popular, but large pipelay vessels have also been booked for delivery in the next few years.

Competition The marine contracting industry is highly competitive. While price is a factor, the ability to acquire specialised vessels, attract and retain skilled personnel, and demonstrate a proven safety record is also important. The Subsea Division’s competitors include a number THORESEN THAI AGENCIES PLC.

According to a recent survey of 23 oil and gas companies, Pareto predicts an 8% increase in global exploration and production (“E&P”) spending in 2014 and a 10% spending increase for offshore oil and gas activities.

Annual Report 2013

Chart : Subsea Capex Forecast

Mermaid focuses on the shallow water tender and jack-up rig market.

Total Worldwide Subsea Capex

(USD) 20,0000

Tender rigs

15,0000

Semi tender rigs Semi-submersible tender rig

10,0000

Jack-up rigs

2018e

2016e 2017e

2015e

2014e

2012

2013e

2011

2010

2009

2008

2007

2006

2004

2005

5,000

B a rg e m o o re d a lo n g s i d e a platform and contains crew quarters, mud tanks, mud pumps, and power generation systems

Source: Quest

Semisubmersible Floating drilling platforms with rigs columns and pontoons featuring a ballasting system Drillships

Forecasted Regional Market Share 16% 27% 15% 26%

Mobile self-elevating drilling platform equipped with legs that can be lowered down to the ocean floor

Self-propelled, utilising dynamic positioning systems (DP) to maintain their position above the wellhead

16%

North America

19%

North Sea

Tender and Semi Tender Rig Market

17%

South America

31%

Africa/ Mediterranean

The majority of tender rigs operate in Southeast Asia on contracts ranging between one to three years. The market for tender rigs is niche and generally experiences the same cycles as the market for other mobile offshore drilling units (“MODU”), jack-up rigs in particular.

16%

17%

2013e

2018e

Asia Pacific/ Middle East

Source: Quest

As can be seen in the chart above, Quest expects to see growth in all offshore regions. According to Quest offshore, 17% of the world’s annual subsea investment will be poured into the Southeast Asian market by 2018.

Offshore Drilling Services Industry Overview Demand for drilling and related services is influenced by a number of factors, especially current and expected oil and gas prices, which drive exploration and production activities. The different types of drilling units employed depends on the water depths in which to drill, the stage of drilling (exploration/ development/production), and the technical complexity of the well. The drilling units described below operate in different water depths, and can vary significantly in their technical specifications and capabilities.

South East Asia is the biggest market for tender rigs, followed by West Africa. The level of activity for tender rigs in South East Asia has remained relatively high. Total active supply comprise 33 units, of which 26 are currently on contract (17 operating in South East Asia), while three are cold stacked and six are idle/warm stacked. In addition, a total of nine tender rigs are under construction. The total active supply of semi-tenders is 10 units, of which one is cold stacked, and nine currently working and three under construction.

Business Review Mermaid Drilling Ltd. (“MDL”), a 95%-owned subsidiary of Mermaid, owns two tender drilling rigs and provides drilling and accommodation barge related-services in Southeast Asia. MTR-1 has been downgraded to an accommodation work barge and continues to seek a new assignment following the expiry of an accommodation barge contract in July 2013. MTR-2 underwent its special periodic survey between November 2012 and April 2013 and came back on-hire in the end of May 2013. THORESEN THAI AGENCIES PLC.

Annual Report 2013

Asia Offshore Drilling Ltd. (“AOD”), Mermaid’s 33.76%‐ owned associate company, owns and operates a modern fleet of high specification jack-up rigs. The company commenced operations in 2013, with AOD I, AOD II, and AOD III being deployed for service on 1

May, 13 July, and 10 October, respectively. All three rigs have been contracted to Saudi Aramco for terms that include a potential value of USD 197 million over a three year period plus a USD 39.5 million mobilisation fee for each rig.

Drilling Rig Fleet List No. 1.

Calendar Year

Name of Rigs

Rig Type

MTR-1

Accommodation Barge

Build Year

Purchase Year

1978

2005

MTR-2

Tender Assist Drilling Rig

1981

2005

AOD-1*

Premium Jack-Up Rig

2013

2010

AOD-2*

Premium Jack-Up Rig

2013

2010

AOD-3*

Premium Jack-Up Rig

2013

2011

Remarks: * Through Mermaid’s associate company, Asia Offshore Drilling Ltd. (“AOD”) in which Mermaid has a 33.76% equity interest.

Both jack-up and tender drilling rigs require classification from a recognised classification society, which classify them based on structural integrity and safety. MTR-1 is classified by the American Bureau of Shipping (“ABS”), and MTR-2 is classified by Bureau Veritas (“BV”). Classification authorities inspect the tender drilling rigs annually. Tender drilling rigs are dry docked every five years and subject to a special periodic survey by these classification societies. AOD’s jack-up rigs are subject to classification by ABS.

Fleet Services MDL’s contracts to provide offshore drilling services are individually negotiated and vary in their terms and provisions. MDL obtains most of its contracts through competitive bidding against other contractors. Drilling contracts generally provide for payment on a day rate basis, with higher rates while the drilling unit is operating. Rates tend to be lower during periods of mobilisation or when drilling operations are interrupted or restricted by equipment breakdowns or other conditions often beyond MDL’s control. A day rate drilling contract generally extends over a period of time covering either a stated term or the drilling of a single well or group of wells. Some of MDL’s contracts with clients may be cancellable at the option of the client upon payment of an early termination payment. Such payments may not, however, fully compensate MDL for the loss of the contract.

THORESEN THAI AGENCIES PLC.

AOD’s three jack-up rigs are from the Mod V – B Class design, which is understood to be the preferred jack-up rig design by major drilling companies and used by oil companies in all shallow water areas of the world. In today’s environment, jack-up rigs are typically contracted for durations of 300 days or longer, a trend that is expected to increase as demand soars while near term supply fades.

Clients MDL engages in offshore drilling for leading international oil companies, including those that are government-controlled and independent. All three of AOD’s jack-up rigs have been contracted to Saudi Aramco, the world’s largest oil and gas company.

Employees MDL requires highly skilled personnel to operate its drilling rigs. As a result, MDL conducts extensive personnel recruiting, training and safety programmes. As of 30 September 2013, MDL had 42 staff and personnel.

Competition MDL’s primary competitors include global or regional offshore drilling companies, including Malaysian offshore services company Sapura Kencana.

Annual Report 2013

Headwind and Tailwind Factors

Philippines Mine

There are over 604 fixed platform sites in Southeast Asia, many of which prefer tender rigs since the seabed around these platforms is often perforated by jack-up footprints. As a result of limited supply, particularly of newer rigs, day rates and contract duration are all pegged to increase. More new-build orders are expected to surface due to favourable economics – an area MDL will explore closely this year.

TTA holds a minority interest of 26.15% in Merton Group (Cyprus) Ltd. (“Merton”), which was founded to pursue early stage/start-up coal projects. Merton’s joint venture with SKI Group, SKI Energy Resources Inc. (“SERI”) controls over 17,500 hectares of coal concessions in Cebu, Philippines.

As the premium jack-up fleet is closing in on full utilisation and the majority of the most technically capable conventional jack-ups have returned to work, day rates are expected to continue to trend higher. Premium jack-up rigs are receiving premiums of USD 160,000 and above per day on average, a trend that is also expected to continue with operators favouring modern assets.

Coal Mining Businesses Given the critical importance of coal as a fuel source for developing Asia, and TTA’s existing involvement in coal transport, the Company invested in two early stage/start-up coal projects: one in the Philippines and another in Indonesia.

Given that SERI’s two shareholders are unable to properly finance its operations, SERI is producing very limited coal and is now undergoing a restructuring process.

Indonesian Mine TTA established Qing Mei Pte. Ltd. (“Qing Mei”) in 2011 through a strategic partnership with Merton and Britmar (Asia) Pte. Ltd. to develop a green field coal-mining project in Indonesia. Exploration at Qing Mei’s concessions continue to Joint Ore Reserves Committee (“JORC”) standards, with a full-scale drilling programme completed on one of the concession’s four blocks and preliminary drilling done on the concession’s other three blocks. Based on the reserve estimates, Qing Mei is bidding for an independent power project in Central Kalimantan. If he bid is successful, Qing Mei will develop the coal mine at the same time as the power plant.

THORESEN THAI AGENCIES PLC.

BUSINESS REVIEW AND OUTLOOK

INFRASTRUCTURE

Annual Report 2013

INFRASTRUCTURE GROUP

Coal Logistics Business

The Infrastructure Group comprises a number of businesses that are ultimately engaged in logistics services. The two key businesses are 88.68% owned Unique Mining Services Public Company Limited (“UMS”) and 100% owned Baconco Co., Ltd. (“Baconco”).

Industry Overview Although coal demand in Thailand has been historically lower than other Asian countries, the country’s coal demand for both industry and electricity generation is projected to increase significantly over the next 10 years, as oil prices continue to exceed USD 100 per barrel and natural gas reserves decline. As shown in the following chart, coal reserves fall into a number of classifications, each suited for a specific type of end user.

Coal Information General Knowledge Types of Coal Carbon/Energy Content of Coal Moisture Content of Coal

HIGH

Hard Coal (53%)

Uses

% of World Reserves

Low Rank Coals (47%) Lignite (17%)

Anthracite (1%)

Bituminous (52%)

Sub-Bituminous (30%)

Thermal Steam Coal Power, Cement & Industrial

Largely Power Generation

HIGH

Power, Cement & Industrial

Metallurgical Coking Coal Iron & Steel Production

Domestic & Industrial including smokeless fuel

Type

Calorific Value (kcal/Kg.)

Moisture (%)*

Ash (%)*

Sulphur (%)

Anthracite

6,500-8,000

5-8

5-12

0.1-1.0

Bituminous

5,000-6,500

8-15

1-12

0.1-1.5**

Sub-bituminous

4,500-5,500

24-30

1-10

0.1-1.5**

Lignite

3,000-4,000

30-38

15-20

2.0-5.0

Remarks: * Percentage by weight ** 1% of sulphur would produce sulphur dioxide approximately 500 ppm. Source : World Coal Institute

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Chart : Actual and Projected Coal Demand in Thailand (Million in Metric Ton) 60

At the same time, UMS will continue to focus on regaining access to its Samut Sakorn port and will explore an entry into international coal trading.

Clients

UMS’ core clients typically use low calorific value (sub-bituminous with heating value 4,000–4,200 kcal/kg, gross as received) coal, which it secures from no less than 10 reputable suppliers in Indonesia. UMS sells coal to several domestic industries, including pulp and paper, textile, food processing, and cement.

30 20 10 0

2002

2005

2008

Electricity

2011

2014

Industry

2017

2021 Total

Source : EGAT

Business Review UMS provides end-to-end and just-in-time coal logistics sales and distribution services in Thailand, primarily to small and medium-sized industrial clients. It owns two coal screening facilities located in Samut Sakorn and Ayudhaya, and 12 barges. The just-in-time supply model means that UMS manages a coal supply chain with stock pile management and storage, ensuring continuous coal supply security for its customers. Customers’ lead times for ordering are up to 48 hours in advance on average and most importantly, customers are not required to manage their own stock piles and storage. UMS’ Samut Sakorn operations were shut down due to environmental concerns over another company’s coal facilities in an adjacent area to UMS’ plant in July 2011. To resume operations, UMS has improved the plant’s facilities and waste-water treatment system to meet the government’s preconditions for its reopening. Following these moves and others, UMS was allowed to resume gradual operations at its Samut Sakorn plant in June 2013, albeit without full logistics efficiency. Meanwhile, it is exploring pelletisation as a long‐term solution to manage its 0‐5 mm coal and is in the process of evaluating two potential equipment suppliers to realise this objective as quickly as possible.

UMS’ coal import and production strategies have been adapted to match the engineering specifications of the boilers used by each type of industrial client it serves. The Company’s strategic objective to be the leader in domestic coal distribution for medium and small sized manufacturers remains unchanged.

Competition Thailand’s coal distribution industry has approximately 20 operators. Of these, approximately 15 compete directly with UMS in the small and medium sized enterprise (“SME”) segment. UMS remains one of the market leaders in this area, but has seen its overall market share drop to approximately 25% as a result of ongoing issues at its Samut Sakorn facility.

Headwind and Tailwind Factors Domestic coal demand is expected to trend upwards over the medium term as a result of the manufacturing industry converting from fuel oil to coal. UMS has also observed an upward trend in fuel alternatives, such as palm kernel shell, which UMS started to import from Indonesia to market to domestic customers who burn bio-mass for energy. The biggest hurdle remains UMS’ ability to regain full operations in Samut Sakorn. As of now, UMS will only be able to screen Medium Calorific Value (“MCV”) coal at this facility due to government restrictions. This limits operations to approximately 10,000 tonnes per month, significantly lower than volumes that can be achieved with Low Calorific Value (“LCV) coal.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Fertiliser and Warehousing Business Industry Overview: Fertiliser Business It is estimated that Vietnam consumes approximately 10 million tonnes of fertiliser per annum, a level that industry experts believe will remain stable for the next two to three years, with modest increases of 2-3%. Chart : Vietnam Fertiliser Consumption (Tons) 9,000,000 8,000,000

+3%

7,000,000 6,000,000 5,000,000 4,000,000 3,000,000

-25%

2,000,000 1,000,000 0

2002

2005 2006 2007

2008 2009 2010 2011 2012 2013

Total Fertiliser

Total NPK

Fertiliser is mainly composed of nitrogen, phosphate and potassium: nitrogen (N) – used to produce leafy growth and formation of stems and branches; phosphate (P) – essential for seed germination and root development, needed particularly by young plants to form their root systems and by fruit and seed crops; and potassium (K) – required to promote flower and fruit production and for maintaining growth while helping plants resist diseases. Vietnam can now produce and supply nitrogen adequately for the domestic market. Phosphate is sourced both domestically and through imports, while 100% of potassium needs to be imported.

THORESEN THAI AGENCIES PLC.

Industry Overview: Vietnam Warehousing Business The industrial market in Vietnam is divided into three key economic zones, the Northern Key Economic Region (“NKER”), the Central Key Economic Region (“CKER”), and the Southern Key Economic Region (“SKER”), where the greatest concentration of industrial parks are found. There are 10 industrial parks in the vicinity of Ba Ria and Phu My Port alone. Vietnam’s port systems are going through significant upgrading, particularly those that are state owned but infrastructure remains a barrier for yards and warehousing systems to accommodate both containers and bulk cargos. Warehouse development and availability, as well as professional logistics management, are expected to be key factors in supporting Vietnam’s port infrastructure and industrial sector. Within the SKER, warehouses in strategic locations like airports and ports can command in excess of USD 5 per square metre per month, excluding VAT and other fees. This is in comparison to warehouses with lower standards residing outside of strategic locations, which generate as little as USD 1.5 to USD 2.5 per square metre per month.

Business Review Baconco operates a 350,000 metric tonne per annum blending and NPK fertiliser granulation/compaction production facility. In addition to the sale and distribution of its own products, Baconco is also a supplier of pesticides and seeds. As of 30 September 2013, Baconco marketed over 80 distinct formulas and provided customised formulas for its top five customers. Baconco has continuously made a push to boost exports, which grew more than 15% year-on-year to 73,000 tonnes, establishing a strong reputation for its distinctive “Stork” brand in markets such as Africa, Taiwan, Korea, Cambodia, and Laos. Over the year, Baconco continued to generate strong profits and cash flows, which are being used to invest in fully integrated logistics services in South Vietnam.

Annual Report 2013

Baconco Fertiliser Production Processes RAW MATERIALS

Nitrogen, Phosphorus, Potassium, Sulfur, Calcium, Magnesium, Micronutrients, Organic Matter

USP

COMPACTION

GRANULATION

Bio Stimulant

BULK BLENDING

FINISHED PRODUCT

50 NPK formulas for Rice, Coffee, Tea, Rubber, Sugar Cane, Fruit Trees & Vegetables

Through its investments in Baconco, Thoresen Indochina, and Baria Serece, TTA is uniquely positioned to offer a full range of logistics solutions including sea and land transport, warehousing, bagging, forwarding, and custom clearance. Baconco and Thoresen-Vinama Agencies, an associate of Thoresen Indochina, now have in total 53,000 square metres of warehouse space with a capacity for almost 190,000 metric tonnes following the opening of the Baconco 5 facility on February 2013. Thoresen-Vinama Agencies, has established itself as Baconco’s third party logistics provider, closing the loop on near complete integration of the entire value chain. As an example, cargo from a client’s factory can be picked by Thoresen-Vinama Agencies’s trucks and trailers, stored in Baconco’s warehouses, loaded onto a vessel at Baria Serece deep sea port (in which TTA holds a 20% stake), and handled by ship agency services also supplied by Thoresen-Vinama Agencies.

Clients For its fertiliser business, Baconco distributes products via a network of approximately 120 wholesalers and 4,000 retailers. Its warehouse clients are made up of its own fertiliser wholesalers, bottlers, raw material importers, importers/ exporters of bulk and bagged cargoes, and steel pipe manufacturers.

Competition Competition is significant in the Vietnam market with over 500 producers, many of them state owned. The largest, Petro Vietnam, has completed building its urea production facility in Phu My industrial park. Previous plans by Petro Vietnam to build an NPK factory in South Vietnam have been discontinued.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Headwind and Tailwind Factors Vietnamese fertiliser prices are expected to remain flat in 2014, resulting in a continued push by Baconco to boost exports into other parts of Asia and Africa. In terms of logistics, the demand for professional services is expected to remain strong in line with Vietnam’s economic growth and strengthened global trade ties.

Port Operations Business Soleado acquired a 20% stake in Baria Serece from Yara Asia Pte. Ltd. in 2010. Baria Serece owns and operates Phu My port in South Vietnam. Phu My port is situated on the Thi Vai River, approximately 17 miles from the open sea, adjacent to Phu My industrial park. The port is Vietnam’s largest dry cargo deep-water port, and is able to receive up to seven million tonnes of agricultural products, coal, and fertiliser per year. Baria Serece has completed its 453 metre quay upgrade project and has received a license to operate domestic and international general cargo vessels of up to 12 metres and 80,000 dwt. As such, the facility is favoured among Handymax, Supramax, and Panamax operators, as no lightering is needed prior to arrival.

Ship Supplies, Logistics, Ship Stevedoring and Transportation Chidlom Marine Services & Supplies Ltd. (“CMSS”), a wholly-owned subsidiary of TTA, provides ship supplies and logistics services, including supply of ship stores, cargo dunnage materials, cargo lashing and securing equipment, cargo handling equipment, tally and checker services, forklift rental/services, warehouses and storage spaces for rental, material procurement, management, and distribution in Thailand. CMSS also provides ship stevedoring and transportation services, including cargo loading and unloading, cargo handling, and transportation.

Third Party Logistics Services GAC Thoresen Logistics Ltd. (“GTL”) was established to serve the Thai domestic logistics market. TTA owns 51% of GTL, with the remaining 29.00% and 20% owned by Gulf Agency Company Limited, Liechtenstein (for purposes of compliance with warehouse regulations) and Mr. Lars Safverstrom, Executive Chairman of Gulf Agency Company, (Thailand) Ltd. (“GAC”), respectively. The company owns a 10,000 square metre warehouse facility at Amata Nakorn Industrial Estate and leases a 6,000 square metre warehouse facility at Bang Pa in Industrial Zone. GTL is a third party logistics (“3PL”) service provider that engages in warehousing, warehouse management, and domestic distribution for both local and multinational clients. The company operates in a niche environment and has secured mid to long-term contracts with a select number of clients.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Corporate Social Responsibility Policy TTA and its subsidiaries (“The Group”) are determined to uphold their status as corporate citizens in all aspects of their activities. We operate our business ethically and with good corporate governance in accordance with the interests of society and as an environment for sustainable development. We have defined standards for transparency and there are procedures for tracking, evaluating and improving what we do. We seek to achieve our corporate and social responsibility objectives by focusing on four strategic areas:  CORPORATE

GOVERNANCE

Committing to corporate values and codes of business conduct and adhering to transparency and accountability practices.  Human

rights and employee well-being

Addressing the needs and aspirations of staff through equal opportunity and access, employee diversity, work-life balance, work safety and, labour standards.  SOCIAL

CONTRIBUTIONS

Encouraging and assisting staff to involve themselves in team/individual projects in support of the wider community with focus on donations, volunteering and education.  ENVIRONMENT

Further developing environmental protection management practices that minimise waste and maximise efficiencies (such as local and global environmental quality, cleaner production process, ECO efficiency and environmental technology.

2013 Responsibility activities 1. CORPORATE GOVERNANCE TTA has set up a corporate governance policy, under which we have clearly stated policies on rights of shareholders and their equity treatment, and THORESEN THAI AGENCIES PLC.

on disclosure and transparency. TTA runs its businesses responsibly in accordance with its business ethics and code of conduct. TTA is dedicated to its core business values of integrity, excellence, team spirit, and commitment. These values form the basis of optimum corporate governance. For further information, please review the Corporate Governance Report in this annual report. 2. HUMAN RIGHTS & EMPLOYEE WELL BEING A: Fair Employment Practices TTA recognises the value of its employees and has identified and assessed their long-term retention as key to the short-term and long-term viability of the Group. To this end, the Group aims to attract and retain skilled employees and enhance the life/work balance of each individual. The Group offers its full-time staff a range of benefits, including a provident fund scheme, life insurance, private health care, maternity leave and a generous holiday allotment. Also available to employees are personal development and training programmes designed to enhance an employee’s skill base. All such programmes shall relate directly to the specific role of the individual within the Group and are linked closely with his/her annual performance review. The Group has also established a Welfare Committee to provide advice and recommendations regarding the welfare of employees. The Welfare Committee has the duties and responsibilities to discuss with management on proper welfare for staff, to provide advice and recommendations to management regarding welfare benefits for staff, to check and oversee welfare benefits provided to staff, and to make comments and propose guidelines on welfare arrangements to the Welfare Committee. B: Workplace Health & Safety The Group aims to provide each employee with a safe place to work. TTA has established safety policy

Annual Report 2013

as well as set up an Occupational Health and Safety Working Environment Committee to monitor the Company’s working environment. All employees are informed of their duties and responsibilities for reporting any identified issues and deficiencies in the work place to their supervisors or authorised persons, respecting and complying with the Group’s occupational health and safety working environmental policy. TTA’s Occupational Health and Safety Working Environmental Committee is active in proposing new campaigns to raise employees’ awareness on health and safety issues. They offer advice and safety tips, as well as distributing emergency survival kits to all employees. There is a monthly meeting to discuss how this can all be improved. 3. SOCIAL CONTRIBUTIONS TTA’s Community Involvement/Society Development has two main components: community involvement and charitable donations, as well as support for education. The Group is an active sponsor of several business groups and chambers of commerce, including the Thai Shipowners Association, on whose Board a senior Group executive always sits. The Group also has a policy encouraging staff to donate their time to local causes, and will accommodate reasonable requests for time away from the office to engage in community activities. A: Community involvement and donations In 2013 the Born To Be ‘Good’ programme was launched in line with TTA’s long held spirit of volunteering, with the aim of supporting people and communities in need. The programme offers TTA staff members the opportunity to contribute to society during their birthday months, transforming what is usually a personal occasion into one that provides a deeper meaning through hands-on support to the community. In carrying out such activities, TTA looks to foster a mind-set of generosity and an interest in making contributions to surrounding communities and society. TTA has built a team of social contributors that seek projects that can be turned into sustainable and long term CSR programmes. It also encourages creativity and a sense of community in the workplace, while establishing a friendly atmosphere.

Summary of Born to be GOOD activities in 2013 6 activities were carried out 111 employees joined 537 hours of volunteering 123,264 Baht of cash donation 210,600 Baht of fund raising cash donation As a result, Over 580 students benefitted, 500 trees were planted, over 400 animals were helped, 11 soldiers received donations and over 100 monks were given medicine, food and other necessities. The first outing of the year was with employees whose birthdays fell in January and February. Joined by almost 20 TTA staff, they headed out to the Home 4 Animals Foundation in Pakkred to donate food and Baht 15,000 in cash to help the foundation’s 400 abandoned cats and dogs, many of which suffered physical trauma or abuse. The 20-strong volunteer team then moved on to Baan Fueng Fah foundation to support mentally-handicapped children. The volunteers observed the foundation’s operations and made a donation of THB 15,000 in cash as well as donating clothes, toys and various necessities. The second activity, held in March, focused on a cash donation of Baht 30,360 to the Priest Hospital, which was established to care for ailing Buddhist monks and novices. The donation funded the purchase of portable oxygen canisters, which are used to save lives in emergency situations. In addition to the donation, employees and the CSR team pitched in with a meal, additional items and a visit with the hospital’s 50 inpatients. The third Born To Be “Good” activity sought to raise funds to help 400 orphaned and needy children at an orphanage in Bot Woradit Temple in Ang Thong province. TTA volunteers organised a yard sale at the company’s head office together with a charity auction fully backed by company executives. With Baht 125,000 raised, employees born in April and May represented the company in handing over the funds and additional donated items to the temple, and sponsored a lunch for the orphanage’s young residents. The fourth activity, jointly organised by TTA and UMS employees, involved the planting of 500 trees to replenish a mangrove forest at the Bangpu Nature

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Education Center – the last remaining river-delta mangrove forest in Thailand’s central region. After planting the trees, the TTA-UMS volunteers paid a visit to 11 soldiers recuperating from injuries sustained in clashes in the deep south and the Preah Vihear Temple dispute. In addition to providing lunch, the volunteers purchased organic vegetables to help finance a post-discharge career development program for the soldiers. The fifth Born To Be “Good” activity saw employees born in August and September team up with the Baan Din Thai Volunteer organisation to bring joyful smiles to the faces of students at Wat Sammakan School in Nakhon Luang, Ayutthaya. Almost 40 representatives from TTA and UMS took part in playground equipment repairs for the school. In addition to providing lunch for the students, TTA also donated athletic equipment including footballs, volleyballs, takraw balls and badminton racquets valued at Baht 10,000 to the school. The final Born to be “Good” activity in the 2013 fiscal year invited employees to donate things that they don’t use any more, particularly during a time of year where people usually think about cutting the clutter from their homes. For this activity, TTA partnered with The Mirror Foundation which accepts donations of clothing, furniture, household goods and other items, and fixes them or uses funds from their sale to provide goods and services to needy students and communities nationwide. Approximately 20 TTA staff also spent a half-day of their time to help screen and categorise donated books for further distribution to needy children. In addition, TTA also donated Baht 20,000 to produce 20 mobile library units, which are made from old refrigerators, under the “Building the nation by reading more books” project. Finally, TTA staff hosted a luncheon for all volunteer staff at the Mirror foundation in order show the Company’s appreciation and support to the foundation. B: Education As a member of the Thai Shipowners Association, Bangkok Shipowners and Agents Association, Thoresen Shipping has forged links to various universities, including Burapha University and Kasetsart University. We encourage employees to be active in the community and operate a flexible working policy which permits staff to use a certain amount of working time each year to devote THORESEN THAI AGENCIES PLC.

to charitable activities, including offering time as a guest speaker for maritime courses at local universities and colleges. Thoresen Shipping provides award recognition to its workers as well as academic scholarships to the children of its seafaring staff. Over the last year, Thoresen Shipping offered eight students scholarships (Baht 25,000 each). Criteria for the fourth year marine commercial students included the maintenance of minimum grade point average (“GPA”) of 3.0 as well as a positive working attitude. Thoresen Shipping also hosted its 10 th annual Maritime Awards, which honour those seafarers and staffers that have contributed greatly to the company over the previous year. This ceremony also offers academic scholarships to the children of seafarers who have maintained a strong GPA. An additional 13 scholarships were awarded at this event to promising students whose parents had worked at the company for a minimum of five years. UMS offered a Computer Training Day in May whereby a community relations team provided basic computer training for the students of Baan Khlong Samrong School in Suan Som subdistrict. UMS also donated Baht 20,000 worth of rice to the students. 4. ENVIRONMENT The Group understands that its activities affect the environment and the communities in which we operate. We believe that we have a responsibility to identify and manage these impacts as effectively as possible. We are committed to continually improving our environmental performance and moving towards the best practices in corporate sustainability. A: Environmental Policy The Group aims to:  Minimise the environmental impacts of our existing

operations and ensure that the environmental impacts of new operations are fully assessed and minimised prior to their introduction;  Reduce consumption of materials in all operations,

and where practicable, to re-use rather than dispose of materials where possible, and promote recycling and use of recycled materials;  Seek

to improve the energy efficiency of buildings and to manage energy wisely in all operations;  Reduce,

wherever practicable, the level of harmful emissions from our office premises;

Annual Report 2013

 Introduce programmes that aim to minimise waste;

4) Waste

 Dispose

Across the Group, general office waste is collected and removed each day by cleaners and taken to a compactor for removal by a waste contractor, or is collected weekly by the local authorities.

of waste and effluents in a responsible

manner;  Work

with our suppliers to minimise the impact of their operations on the environment through a quality purchasing policy; B: Environmental Risks Arrangement As a company working in the transportation sector, there are major environmental risks associated with the Group. Important issues for the Group include the constant demand for energy and CO2 emissions resulting from the Group’s operations. Furthermore, substantial quantities of paper are used in reports to corporate and individual clients, the preparation of research materials, and in the recordkeeping process. Energy used for heating, lighting and cooling of offices and for office equipment is another critical element of the process. The Group looks into the following areas to ensure that systems are in place to lower any environment impact. To promote environmental awareness in the organisation, the group use the ‘reduce, reuse and recycle’ concept. 1) Lighting Our group encourages the use of low energy lighting and where practicable, the use of segmented areas which will allow lights to be switched off when not required. Since 2009, TTA has turned off lights during lunch hours and after business hours. 2) Air conditioning Air conditioning units are available in most of our office locations. To make more efficient use of cooling systems, we ensure that the temperature is set for a comfortable working environment at not more than 25°C. Just as with the lighting, we turn off air conditioning systems at lunch time and in the evening. 3) Paper We seek to reduce the amount of paper used and to increase the amount that is recycled. Our group strives to reduce the amount of paper purchased and will encourage employees to re-use or recycle paper While all used papers are also collected and donated to the Foundation for the blind in Thailand. In addition, employees are encouraged to make use of electronic communications in the form of email and the scanning of documents into electronic records for storage. In 2009, the Group an internal online platform which allows employees to request/approve leave, search/update employees’ databases online.

5) Our fleet Thoresen Shipping is committed to being an active, forward thinking contributor to the worldwide reduction of Greenhouse Gas Emissions (GHG). Thoresen Shipping’s contributions to this industry and world wide effort are;  Fleetwide emissions awareness building, measurement

and verification of each vessel’s emissions footprint.  Developing

a sustainable emissions reduction strategy for the existing fleet, which includes: - Use of Low Sulphur fuels - Fuel Additives trial to prove cleaner burn and lower consumption of fuel oil - Alpha lubricator retrofit to reduce wasted lube oil adding to the exhaust emission - Increased hull and propeller cleaning - Full blasting and high slip paint system trial - Sky Sail feasibility study Thoresen Shipping Comply to MARPOL Annex VI for low Sulphur banker for the whole of its fleet while the vessel is trading in SECA and the Global area. Similarly the fleet implement a full Ship Energy Efficiency Management plan to reduce CO2 emissions as well as complying with IMO regulation on the Ballast Water Management procedure. The Thoresen Shipping fleet has managed to run their vessels economically, and at their optimum capacity. Thoresen Shipping managed to maintain the running of just one generator on load services at sea passage and has looked to improve the fuel quality by adding chemicals into the diesel tanks. The fleet follows a strict machinery maintenance program in order to utilise the engines at their utmost efficiency. Two vessels have retrofit the Mewis Duct which is expected to power down the main propulsion of the diesel engine, reduce fuel oil consumption and reduce NOx and CO2 emissions. Vessels built before 2000 have had retrofit fuel nozzles installed which meet with the MARPOL Annex VI tier II regulations, further supporting NOx reduction. On top of this green effort there is a Tin- free base anti fouling paint applied to the vessel’s hull during dry docking.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

FINANCIAL HIGHLIGHTS Year Ended 30 September 2013 2012 2011 Restated (Baht in millions, except share, per share data, and ratios) Income Statement Data: Voyage revenues Voyage expenses* Vessel operating expenses - owner expenses* Offshore services revenues Offshore services expenses Sales Cost of sales* Revenues from service companies and other sources* Depreciation and amortisation General and administrative expenses* Interest expenses Interest income Equity income from associates and joint ventures Foreign exchange gains Net income (losses) Per Share Data: Net income (losses) - basic Cash dividends declared Net book value Balance Sheet Data (at end of year): Cash and short-term investments Vessels, rigs, machinery, and equipment - net of depreciation Total assets Total liabilities Issued and paid-up share capital Total shareholdersâ&#x20AC;&#x2122; equity Other Financial Data: Net cash flows provided by (used in) operating activities Net cash flows provided by (used in) investing activities Net cash flows provided by (used in) financing activities Capital expenditures : Property, plant and equipment, and intangible assets Financial Ratios: Return on shareholdersâ&#x20AC;&#x2122; equity (%) Return on total assets (%) Net profit margin (%) Total debt to total capitalisation Net debt to total net capitalisation Note *: Exclude one-off items THORESEN THAI AGENCIES PLC.

4,746.61 3,250.20 864.30 8,243.40 5,989.00 5,140.74 4,318.65 463.64 1,595.21 1,862.44 487.47 38.38 254.66 71.20 (5,080.22)

3,528.46 1,778.90 829.50 5,721.17 3,751.88 6,781.51 6,021.35 478.07 1,556.35 1,522.55 567.88 67.11 129.43 63.94 (4,494.43)

5,430.10 2,819.35 1,501.81 5,542.74 3,911.52 6,249.37 5,278.76 778.40 2,084.15 1,694.00 619.61 139.89 110.23 91.78 173.20

(5.86) 0.00 25.51

(6.35) 0.00 33.75

0.24 1.00 43.53

7,961.59 18,997.00 43,091.39 17,790.62 991,837,961 25,300.77

4,392.34 20,216.05 40,797.23 16,904.16 708,004,413 23,893.07

4,786.07 21,014.74 46,318.98 17,218.16 708,004,413 29,100.82

1,142.99 (2,671.70) 5,405.63

1,968.96 (1,605.57) (676.58)

144.99 (3,955.33) (884.89)

2,411.73

1,689.19

4,426.07

(27.75%) (12.11%) (27.52%) 0.36 0.20

(21.16%) (10.32%) (27.49%) 0.37 0.29

0.70% 0.36% 0.99% 0.33 0.25

Annual Report 2013

Management Discussion & Analysis TTA reports net losses of Baht 5,080 million and losses per share of Baht 5.86 for the twelve-month period from 1 October 2012 to 30 September 2013 (“FY13”). This compares with net losses and losses per share of Baht 4,494 million and Baht 6.35, respectively, for the twelve-month period from 1 October 2011 to 30 September 2012 (“FY12”). Consolidated net losses of Baht 5,080 million were primarily due to a number of asset impairments. On an operating basis, Thoresen Shipping reported higher losses, as it suffered through 25-year lows in freight rates. These higher losses were partially offset by significant improvements in Mermaid Maritime Plc. (“Mermaid”). Shipping continued to generate positive EBITDA, as the Baltic Dry Index (“BDI”) averaged 986 points in FY13, the lowest since 1999. Our TCE rate of USD 8,364 per day, down 18% yoy, remained below the EBIT breakeven level, resulting in 166% higher EBIT losses.

Revenues (Baht millions) 20,000 18,000 16,000 14,000 12,000 10,000

net profits grew almost five times as the subsea business experienced higher average day rates and utilisation. Equity income from its 33.8%-owned associate, Asia Offshore Drilling Limited (“AOD”) also started to be recognised.  UMS

continues to face challenges, as it grapples with logistics inefficiencies at its recently-reopened Samut Sakorn plant as well as weak coal prices. Through volume reduction, net losses would have narrowed 26% yoy without the Baht 243 million provision for coal inventories recorded in FY13.  Baconco

had a record year in FY13, with net profits up 24% yoy primarily on better gross margins. Volume of 196,400 tonnes was also a record high, while warehouse rental revenues more than doubled yoy following the launch of Baconco 5 in February.

332

6,782 316

8,243

8,000 6,000

5,721

4,000 2,000 0

4,747

3,528 FY12

FY13

Freight charges Offshore service income

 Thoresen

 Mermaid’s

5,141

Service and commission income Sales

Normalised EBITDA (Baht millions) 3,000 2,500 2,000 1,500

5,141 14

257 6,782

340

1,389 1,369

1,000 668 0 FY12

337 -40

Thoresen Shipping Mermaid

FY13 UMS Baconco

 Consolidated revenues of Baht 18,463 million were

up 13% yoy. Higher revenues at Thoresen Shipping (+35% yoy) and Mermaid (+44% yoy) more than offset lower sales revenues at UMS (-44% yoy) and Baconco (-4% yoy). Thoresen Shipping chartered-in more vessels, resulting in substantially higher vessel days and freight revenues, while Mermaid saw more contributions from the diving services contract with Saudi Aramco and other full subsea service contracts. THORESEN THAI AGENCIES PLC.

Annual Report 2013

 Consolidated

direct costs were up 17% yoy to Baht 14,548 million. Higher costs at Thoresen Shipping (from more vessel days) and Mermaid (from additional costs to service the subsea contracts) were offset by lower costs of sales at UMS and Baconco. Consequently, consolidated gross profits were up 1% yoy to Baht 3,915 million. Net operating Cash flow (Baht millions) 2,500 2,000

5,141

1,500 1,000

1,969

increased by 14% yoy to Baht 2,118 million, driven by Mermaid’s contract start up costs in the Middle East and Baconco’s increased domestic marketing efforts. As a result, EBITDA narrowed 11% yoy to Baht 1,797 million.  Equity income jumped 94% yoy to Baht 250 million.

Mermaid’s 33.8% owned associate, Asia Offshore Drilling Limited (“AOD”), contributed Baht 122 million of equity income, up from losses of Baht 10 million last year. All in, EBIT was Baht 640 million, down 22% yoy.  Losses

before extraordinary items, forex gains/ losses and minority interests were Baht 97 million in FY13, compared to profits Baht 57 million in FY12.  Consolidated net losses were Baht 5,080 million due

1,143

500

 SG&A

to various extraordinary items, key components of which include:

0 FY12

FY13

restated Baht millions

FY12

FY13

Impairment charge on fixed assets

(531)

(3,917)

Write-off arranging fees for a syndicated loan secured in 2007, which expired in FY12

(209)

Impairment charge on assets under construction at a supplier

(169)

(107)

(243)

(153)

(2,327)

(596)

Thoresen Shipping

UMS Allowance for net realisable value of coal inventories Mermaid Realised lossess on cross-currency swap Corporate Impairment charge on TTA’s investment in UMS Provision for doubtful debt for the coal mine project in the Philippines

(908)

Impairment charge on TTA’s investment in Merton Group (Cyprus) Ltd.

(120)

These impairments and provisions were taken in line with TTA’s strict adherence to conservative financial reporting standards, which stipulate that the company review the value in use of its assets on an annual basis. They also followed an extensive assessment by management, the Board of Directors, and external advisors.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Performance Overview by Business Group Revenue contribution by business line

restated

Baht millions

FY12

FY13

%yoy

Transport

3,594

4,812

34%

Infrastructure

7,032

5,408

(23%)

Energy

5,721

8,243

44%

(0)

16,347

18,463

13%

Corporate* Total revenue Net profit contribution by business line

restated

Baht millions

FY12

FY13

%yoy

Transport

(682)

(3,986)

(484%)

(23)

(55)

(138%)

298

605%

Infrastructure Energy Corporate*

(3,831)

(1,337)

65%

Net profit

(4,494)

(5,080)

(13%)

FY12

FY13

Change(%)

Gross margin

23.7%

21.2%

(2.5%)

EBITDA margin

12.3%

9.7%

(2.6%)

5.0%

3.4%

(1.6%)

Net margin

(27.5%)

0.0%

Return on assets

(10.3%)

(12.1%)

(1.8%)

Return on equity

(24.1%)

(28.3%)

(4.3%)

* Corporate = TTA, the holding company, and inter-company eliminations

Key Ratios Profitability ratios

EBIT margin

Liquidity and debt ratios

FY12

FY13

Change(x)

Current ratio

1.43

2.19

0.76

Debt/Equity

0.59

0.56

(0.03)

Net debt/equity

0.40

0.24

(0.16)

Interest coverage

1.38

1.23

(0.15)

Baht millions

FY12

FY13

Cash flows from operating activities

1,969

1,143

Cash flows from investing activities

(1,606)

(2,672)

Cash flows from financing activities

(677)

5,406

Net increase in cash and cash equivalents during the period

(313)

3,877

(13)

Cash and cash equivalents at the beginning of the period

3,800

3,582

Cash and cash equivalents at the end of the period

3,582

7,446

Summary of Statement of Cash Flows

Currency translation differences

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Transport Group Lowest BDI since 1999 A combination of lower trade growth and oversupply continued to adversely affect the dry bulk shipping industry. Freight rates failed to rebound as per market expectations and hovered at historic lows. Only in 4QFY13, the Baltic Dry Index (“BDI”) jumped 45% qoq (+53% yoy) to average 1,292 points. This was led primarily by the Capesize segment, whose average TC rates more than tripled qoq on soaring Chinese iron ore and met coal imports. Compared to the pace seen in the first half of calendar year, Chinese iron ore and met coal imports in July and August were up 11% and 10%, respectively. (BDI & TC rates)

2,000

4Q FY12

1Q FY13

2Q FY13

3Q FY13

4Q FY13

USD/day

40,000 35,000

Baht 3,917 million non-cash impairment against the fleet Accounting standards require an entity to review whether indicators of asset impairment exist, i.e. whether an asset’s carrying amount is higher than its recoverable amount. As the prolonged industry downturn and resultant low freight rates have invariably reduced vessel values, Thoresen Shipping recorded a non-cash Baht 3,917 million impairment against its fleet in FY13. After the impairment, the book value of Thoresen Shipping’s fleet is now in line with its market value.

30,000

1,500

25,000 20,000

1,000

15,000 500 0 Jun-12

At the end of FY13, Fearnleys estimated a global dry bulk fleet of 9,873 vessels with a total capacity of 713 million dead-weight tonnes (“DWT”), representing less than 6% growth from the end of FY12 and a marked slowdown from a 13% growth a year earlier.

Sep-12

Dec-12

Mar-13

Jun-13

Sep-13

BDI (LHS)

TC Avg BCI

TC Avg BSI

TC Avg BHSI

(Baht millions) 5,000

10,000

4,500 4,000

5,000

3,500

3,000

Despite the surge in the final quarter, the BDI averaged only 986 points in FY13. This was a 15% yoy decline and the lowest since 1999’s average of 963 points. The largest drops were seen in the Supramax and Panamax segments. The Baltic Supramax TC rates (“BSI”) averaged USD 8,715 per day in FY13, slipping 22% from FY12’s USD 11,167 per day. The Handysize segment fared slightly better, with the Baltic Handysize TC rates (“BHSI”) down 14% yoy to average USD 7,301 per day in FY13. The Capesize segment showed the smallest yoy decline but the highest volatility. The Baltic Capesize TC rates (“BCI”) started the year at around USD 8,400 per day, bottomed at around USD 4,200 per day in early March and peaked at over USD 42,000 per day in late September, with FY13 average at USD 11,148 per day, slipping 2% yoy.

THORESEN THAI AGENCIES PLC.

Thoresen Shipping

2,500 2,000 1,500 1,000 500

4,747 3,528 668 217

0 -500

FY12 Freight revenues

(143) 337 FY13 Normalised EBIT

Weighed down by the impairment charge, Thoresen Shipping reported net losses of Baht 4,138 million in FY13, compared to net loss of Baht 839 million in FY12. Excluding one-off items, Thoresen Shipping’s normalised net losses should have been Baht 261 million in FY13, compared to normalised net profits of Baht 85 million in FY12. Freight revenues came in at Baht 4,747 million, up 35% yoy mainly due to almost tripled chartering-in activity to accommodate growing commercial relationships. During FY13, Thoresen Shipping operated an average of 29.2 vessels (16.1 owned vessels and 13.1 chartered-in vessels), up from an average of 19.4 vessels (14.9 owned vessels and 4.5 chartered-in vessels) in FY12.

Annual Report 2013

(USD/Day)

12,000 10,000 8,000 6,000 4,000 2,000 0

FY12 Depreciation Thoresen’s TCE

FY13 Cash OPEX Adjusted TC BSI

Cash OPEX includes:  Owner’s expenses  Dry-docking expenses  Administrative expenses  Finance costs

Thoresen Shipping’s TCE was USD 8,364 per day in FY13, declining 18% yoy along with the Supramax market (“BSI”), which is Thoresen Shipping’s benchmark. Adjusting for the fleet’s revenue capacity (90% of the BSI), Thoresen Shipping’s TCE outperformed the BSI by 7% during FY13. The chartered-in TCE improved from –USD 13 per day in the previous year to USD 152 per day in FY13. Average Daily Operating Results (USD/Day)

Cost control efforts have been sustained in FY13. Owner’s expenses, the largest portion of cash operating expenses, were at USD 4,087 per day, up 2% yoy due to higher crew costs from competitive pressures but still lower than the industry average of USD 4,500-4,600 per day. Dry docking expenses declined 12% yoy to USD 744 per day due to a younger fleet and diligent on-board maintenance. The total per-day costs, including depreciation, stood at USD 9,823 in FY13, down 2% yoy but still higher than the TCE for the year. As a result, Thoresen Shipping reported EBIT losses of Baht 143 million, down from EBIT of Baht 217 million in FY12. But with per-day cash operating expenses of about USD 6,200, Thoresen Shipping was still able to generate positive EBITDA of Baht 337 million in FY13 amidst a depressed freight rate environment. It is worth noting that Thoresen Shipping’s operating cost base, and hence net profit breakeven, is estimated to fall to approximately USD 8,900 per day after the impairment against its fleet due to the lower depreciation expense.

Restated

USD/Day

FY12

FY13

%yoy

USD/THB Rate (Daily Average)

31.17

30.46

(2%)

$10,206

$8,364

(18%)

TCE Rate of Owned Fleet

$10,219

$8,212

(20%)

TCE Rate of Chartered-In

($13)

$152

1,317%

$3,997

$4,087

Time charter equivalent (TCE Rate)*

Vessel operating expenses (Owner’s expenses) Dry-docking expenses General and administrative expenses Finance costs, net Depreciation Operating earnings*

$842

$744

(12%)

$1,450

$1,647

14%

$244

($217)

(189%)

$3,443

$3,563

$229

($1,459)

(736%)

*The per day basis is calculated based on available service days.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Fleet Data Summary 4Q FY12 3QFY13 4QFY13 %yoy %qoq

FY13 %yoy

44,340

46,025

46,087

0% 44,340 46,087

1,467

1,480

1,606

5,577

6,032

1,467

1,451

1,551

5,501

5,874

1,466

1,450

1,549

5,457

5,864

99.9%

0% 99.2% 99.8%

Voyage days for chartered-in fleet

695

1,070

1,318

90%

23%

1,638

Average number of vessels (5)

23.5

27.7

31.2

33%

13%

19.4

Available service days for owned fleet Operating days for owned fleet Owned fleet utilisation

(3)

(4)

(2)

Note: (1) Calendar days are the total calendar days TTA owned the vessels in our fleet for the relevant period, including off hire days associated with major repairs, dry dockings, or special or intermediate surveys. (2) Available service days are calendar days (1) less planned off hire days associated with major repairs, dry dockings, or special or intermediate surveys. (3) Operating days are the available days (2) less unplanned off-hire days, which occurred during the service voyage. (4) Fleet utilisation is the percentage of time that our vessels generated revenues and is determined by dividing operating days by available service days for the relevant period. (5) Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the total operating days for owned fleet plus voyage days for chartered in fleet during the period divided by the number of calendar days in the relevant period.

Three vessels joined the fleet in FY13 At the end of FY13, Thoresen Shipping’s owned fleet consists of 18 vessels (8 Handymax and 10 Supramax) with a DWT-weighted average age of 10.1 years and average size of 46,087 DWT. During FY13, Thoresen Shipping took delivery of two new-builds from Vinashin: 1) a 53,506-DWT M.V. Thor Brave on 15 November 2012 and 2) a 53,506-DWT M.V. Thor Breeze on 20 August 2013. Thoresen Shipping purchased a 54,881-DWT second-hand Supramax (built in November 2005 by Oshima) M.V. Thor Fearless on 6 June 2013 and sold a 26-year-old M.V. Thor Jupiter for scrap in December 2012. Thoresen Shipping’s fleet renewal plan was somewhat delayed in FY13 due primarily to a tight credit environment for the shipping industry. Nevertheless, Thoresen Shipping’s strategy - to rebuild and modernise its fleet at the bottom of the asset cycle to achieve significant long-term competitive advantages – remains unchanged. As part of this fleet growth initiative, Thoresen Shipping plans to acquire up to six vessels at reasonable prices over the next 12-18 months. Following the THORESEN THAI AGENCIES PLC.

4,793 193% 29.2

50,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000

40.5

50 45 40 35 30 25

16.8 20 15

19.2

10,000 5,000

51% 46,087

Calendar days for owned fleet (1)

26,401

Average DWT

FY12

Owned fleet

10.1

1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q FY09 FY09 FY10 FY10 FY11 FY11 FY12 FY12 FY13 FY13

10 5 0

Avg DWT - LHS Avg # of vessels (owned fleet) - RHS Avg age (years) - RHS

success of its chartering office in Copenhagen, as reflected in Thoresen Shipping’s TCE outperformance vs. the BSI, Thoresen Shipping is now looking to open a commercial office in the US in FY14 to expand its global footprint and gain better access to cargo customers, owners, operators as well as broker community in the region. Freight rates expected to recover in FY14 The general outlook for freight rates in FY14 is a gradual recovery compared to a dismal FY13. Indeed, so far halfway into 1QFY14, the BDI has averaged over 1,700 points, up about 80% from FY13 average. Overall, Marsoft expects the global dry-bulk shipping tonne-mile demand to grow by more than 7% in 2014, driven by robust steel-related, steam coal and grain trades. On the supply front, deliveries are projected to decline from about 63 million DWT in 2013 to an average of 46 million DWT per year in 2014 and 2015. Even with a potential slowdown in scrapping, now expected to average about 18 million DWT per year, the net fleet growth is forecast to slow to 5% in 2014, falling to 3% in 2015.

Annual Report 2013

There has been a recent surge in dry bulk ordering activity, which is a concern, especially as there are few signs that it would slow down in the immediate future. Total dry bulk ordering already surpassed 40 million DWT during the first nine months of 2013, with larger vessels i.e. Capesizes and Ultramaxes accounting for most of the new tonnage ordered. This is a significant increase from 25 million tonnes for full-year 2012. However, at less than 18% of the existing fleet, the orderbook has actually fallen to its lowest level since 2003.

Energy Group Improved performance Mermaid reported net profits of Baht 320 million, up almost five times from Baht 67 million in FY12. Total revenues of Baht 8,243 million were an increase of 44% yoy, primarily due to higher contributions from the subsea business, as more full service contracts, such as the Saudi Aramco diving services contract, led to higher average day rates. Mermaid Offshore Services (“MOS”) achieved a 66% utilisation rate in FY13. Meanwhile, Mermaid Drilling only achieved a 58.3% utilisation rate in FY13 compared to 64.5% in FY12, as MTR-2 underwent its special periodic survey (“SPS”) from November 2012 until April 2013 and was back on-hire on 29 May 2013. MTR-1 has also been unemployed since its contract ended in July. Given additional expenses at the start up phase of the new full subsea contracts, Mermaid’s direct costs jumped 60% yoy to Baht 5,989 million. SG&A grew by 52% yoy to Baht 885 million due largely to increased personnel in the Middle East region. As a result, EBITDA came in at Baht 1,369 million, relatively flat yoy. Of note is a strong growth in equity income, which jumped from losses of Baht 10 million in FY12 to profits of Baht 124 million in FY13. This was mainly due to strong contribution from Mermaid’s 33.8%-owned associate company Asia Offshore Drilling Limited (“AOD”). Its high-specification jack-up rigs, AOD I and AOD II, commenced their three-year contracts with Saudi Aramco on 1 May and 13 July, respectively. All in, EBIT grew 17% yoy to Baht 816 million.

Positive outlook for both subsea and drilling businesses Outlook for the offshore services sector remains positive. For the subsea business, Mermaid is generally experiencing a greater demand for its offshore vessels and related services across different geographies. That said, some of Mermaid’s contracts are still short-term and subject to changes on short notice. Mermaid continues to focus on higher vessel yields and longer contract durations in growth areas, such as the Middle East and Europe. For example, FY14 will see Mermaid Endurer performing inspection, repair, and maintenance services, and light construction intervention in the North Sea. Given the increasing exploration and production activities, Mermaid is cautiously optimistic that the outlook in the oil and gas industries will be positive over the next 12 months. The outlook for drilling business is also positive. The demand-supply dynamics of the tender rig market appears to be favourable as indicated by day rates and utilisation. Following the completion of its contract in Indonesia in July, Mermaid is marketing MTR-1 for continued work as an accommodation barge support unit. MTR-2 commenced a 2-year drilling contract in Indonesia in late May. For jack-up rigs, the overall demand has improved globally. The demand for premium jack-up rigs has remained strong in all relevant regions, particularly in Asia and the Middle East. Following the deliveries of AOD’s three jack-up rigs AOD I, AOD II, and AOD III in FY13, all three jack-up rigs have commenced their three-year contracts with Saudi Aramco. AOD III commenced its contract on 10 October 2013. Contributions from AOD are expected to rise in FY14, now that all three jack-up rigs are fully employed. Capital raising completed in October Mermaid successfully completed its capital raising through a rights issue and a private placement in early October. Approximately SGD 176 million was raised through a rights issue and private placement of 628.8 million rights shares at an issue price of SGD 0.28 per share. The proceeds shall be used primarily for the acquisition of two new tender rigs and other investments. Having subscribed its rights shares in full, TTA’s stake in Mermaid remains unchanged at 57.14%.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Infrastructure Group

A record year at Baconco

UMS’ net losses exacerbated by provision for coal inventories

Baconco reported a record year in FY13, with net profit of Baht 253 million, up 24% yoy. Baconco sold a record 196,400 tonnes in FY13, up 2% yoy. NPK fertilisers made up approximately 94% of the volume sold in FY13, compared to 91% in FY12. Revenues of Baht 3,229 million were down 4% yoy on lower fertiliser prices. The higher proportion of NPK fertiliser volume, together with active and regular purchases of raw materials at lower prices, boosted gross margins to 14.6% from 10.7% in FY12. As a result, FY13 gross profits improved 30% yoy to Baht 470 million, despite relatively flat volume and revenue. SG&A increased 25% yoy to Baht 130 million due to Baconco’s increased domestic marketing efforts during the year. EBITDA and EBIT came in at Baht 340 million and Baht 333 million, up from Baht 257 million and Baht 243 million in FY12, respectively.

FY13 was a challenging year for UMS as it grappled with logistics inefficiencies at its Samut Sakorn plant as well as weak coal prices. UMS reported net losses of Baht 335 million, compared to Baht 255 million in FY12. Revenues of Baht 1,931 million were a 44% yoy decline, as UMS slowed 0-5 mm coal sales to limit losses. UMS sold approximately 791,000 tonnes of coal in FY13, down 43% from almost 1.4 million tonnes in FY12 when UMS went through aggressive 0-5 mm coal sales to reduce its stockpile and meet one of the pre-conditions for the Samut Sakorn plant re-opening set forth by the Provincial Government. Gross margins improved to 18.1%, as the proportion of low-margin 0-5 mm coal in UMS’ total sales volume dropped to 27% from 41% in FY12. SG&A declined by 22% yoy to Baht 337 million along with lower sales. EBITDA was Baht 14 million and EBIT losses were Baht 51 million, improving from EBITDA losses and EBIT losses of Baht 40 million and Baht 107 million a year ago, respectively. In accordance to standard accounting practices and to reflect lower coal prices, UMS recorded a total of Baht 243 million allowance for net realisable value of inventories in FY13, the majority of which was taken in 3QFY13. Without the provision for coal inventories, net losses would have narrowed yoy. UMS gradually resumed operations at the Samut Sakorn facility since 10 June 2013. The plant had been closed for almost two years due to environmental concerns in adjacent areas. Given that UMS is yet to be allowed to use its own port at this plant, full logistics efficiencies cannot be obtained. Discussions with the responsible authorities are ongoing. Going forward, UMS now expects to screen only medium calorific value (“MCV”) coal at this facility. Provincial authorities stipulate that stockpiles must be in covered areas only and UMS does not have sufficient storage for low calorific value (“LCV”) coal after its screening and 0-5 mm coal fines generation. UMS is working on additional avenues to increase the value of its 0-5 mm coal inventory.

THORESEN THAI AGENCIES PLC.

Growing warehousing business Driven by additional space from the opening of the Baconco 5 warehouse in February, warehouse rental revenues more than doubled in FY13, but still accounted for a fraction of Baconco’s top-line compared to fertilisers. Capacity utilisation continued to be strong, at close to 80% on average. TTA Group companies in Vietnam currently operate total warehouse space of 53,000 sq. m., with capacity for almost 190,000 metric tonnes of cargoes. Baconco continues to look for growth opportunities for both fertiliser and warehousing businesses. A new granular production unit, which is expected to boost its production capacity by about 100,000 tonnes, is expected to be added in FY14. Additional warehouses are also on the cards. In FY13, Baria Serece contributed Baht 24.5 million of equity income to TTA, down 15% yoy due to slower imports of grain and agricultural products.

Annual Report 2013

Corporate Group FY13 provided evidence that TTA’s diversification strategy is working. The operating losses from Thoresen Shipping were partially offset by Mermaid’s improved profits. Baconco and non-controlling investments, such as Petrolift Inc. and Baria Serece, delivered good performances. Unfortunately, TTA continues to face difficult environments in Thoresen Shipping and UMS. We are working hard to improve all core business units and ensure solid profitability in FY14. Although we did not plan to take any additional significant impairment in FY13, the dry bulk shipping industry did not rebound as per market or our expectations, while UMS continues to face challenges that we felt needed to be reflected in our financial statements. These impairment charges are strictly non-cash items. As such, there will be no effect on our future cash flow generation position.

The dry bulk shipping market is gradually recovering. Therefore, the proposed capital raise allows Thoresen Shipping to acquire more vessels before the market rises further. The offshore oil and gas services sector, in which Mermaid operates, remains strong, as global exploration and production (“E&P”) spending by oil and gas companies continues to rise. The most recent survey by Pareto Securities predicts an 8% increase global E&P spending in 2014. The fertiliser market in Vietnam is growing slowly, but with low freight rates, Baconco has been able to export significant fertiliser volume to distant places like Africa. UMS faces more competition from recently established coal traders and is looking for ways to maintain sales volumes and improve margins. Our overall policy is to closely monitor market developments and ensure that our core business units are efficiently managed. We will also seek investment opportunities that are expected to bring higher future returns in each business unit.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

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

27 November 2013

To : The Shareholders of Thoresen Thai Agencies Public Company Limited The Board of Directors realises the significance of its duties and responsibilities in supervising TTA’s business to ensure good management with integrity and prudence in accordance with laws, detailed objectives, Articles of Association, and resolutions of the shareholders meetings. The Board of Directors protects the benefits of the company and its stakeholders by ensuring that TTA’s financial report contains accurate and full accounting records that reflect its actual financial status and operational results. The Board of Directors has established the Audit Committee comprising independent directors fully qualified in accordance with the requirements of the Stock Exchange of Thailand to review and ensure accuracy and sufficiency of the financial report, to review the internal control systems including compliance with securities law, regulations of the Stock Exchange of Thailand or laws relating to the business of the company. In this regard, the Audit Committee has already reported its performance to the Board of Directors. The Board of Directors is of the opinion that the financial statements for the year 2013 of TTA and its subsidiaries, which have been reviewed by the Audit Committee in conjunction with the management, and audited by TTA’s auditor, accurately reflect the financial status and operational results in all material aspects in accordance with generally accepted accounting standards.

Mr. Chalermchai Mahagitsiri M.L. Chandchutha Chandratat Executive Vice Chairman President & Chief Executive Officer

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Independent Auditor’s Report Independent Auditor’s Report To the Shareholders of Thoresen Thai Agencies Public Company Limited I have audited the accompanying consolidated and separate financial statements of Thoresen Thai Agencies Public Company Limited and its subsidiaries, and of Thoresen Thai Agencies Public Company Limited, respectively, which comprise the consolidated and separate statements of financial position as at 30 September 2013, the consolidated and separate statements of income and comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Consolidated and Separate Financial Statements Management is responsible for the preparation and fair presentation of these consolidated and separate financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated and separate financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility My responsibility is to express an opinion on these consolidated and separate financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated and separate financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

76 Opinion

In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial position as at 30 September 2013 and the financial performance and cash flows for the year then ended of Thoresen Thai Agencies Public Company Limited and its subsidiaries, and of Thoresen Thai Agencies Public Company Limited, respectively, in accordance with Thai Financial Reporting Standards.

Emphasis of Matter Without qualifying my opinion, I draw attention to note 3 to the financial statements which describe the effect of the Companyâ&#x20AC;&#x2122;s adoption from 1 October 2012 of TAS 21. The corresponding figures presented for the consolidated financial statements are based on the audited consolidated financial statements as at and for the year ended 30 September 2012 after making the adjustments described in note 3. The audited consolidated and separate financial statements as at and for the year that ended 30 September 2012 were audited by another auditor who expressed an unmodified opinion on those statements on 29 November 2012.

(Veerachai Ratanajaratkul) Certified Public Accountant Registration No. 4323 KPMG Phoomchai Audit Ltd. Bangkok 27 November 2013

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Statement of financial position Thoresen Thai Agencies Public Company Limited and its Subsidiaries Thoresen Thai Agencies Public Company Limited and its Subsidiaries As at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated) Statement of financial position As at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated) Consolidated

Separate

financial statements

30 September Assets

Note

2013

1 October

2012

2011

(restated)

30 September 2013

1 October

2012

2011

(in thousand Baht) Current assets Cash and cash equivalents Short-term investments Trade accounts receivable Other accounts receivable Receivables from related parties Short-term loans to related parties

6 7 5, 8 9 5 5

7,458,387

3,589,424

3,802,140

650,977

123,271

765,715

503,207

802,920

983,932

60,207

88,618

291,919

3,966,227

2,665,169

2,727,556

841,457

426,494

727,164

3,035

2,301

27,884

5,222

62,062

291,060

515,189

592,175

434,193

4,732,061

4,030,978

5,356,407

31,251

30,930

Current portion of long-term receivables from a related party

Current portion of long-term loans to related parties

5 10 11

2,573

3,323

261,202

277,459

1,336,210

1,601,787

Vessel supplies and spare parts

419,736

Prepayments Other current assets Total current assets

Deferred contract costs Inventories

3,323 -

2,573

3,323

174,423

2,270,947

610,583

370,949

182,394

139,484

142,985

5,933

6,040

5,755

378,352

306,671

337,681

516

764

10,513

15,354,967

10,516,627

11,688,667

5,970,491

4,847,470

7,066,809

31,251

554,780

Non-current assets Long-term portion of receivables from a related party Long-term loans to related parties Investments in subsidiaries Investments in associates Investments in joint ventures Goodwill Property, plant, and equipment Intangible assets Other non-current assets

5 5 12 13 14 15 16 17 18

2,232,763

1,911,820

4,746,158

21,265,656

18,947,210

15,723,960

3,732,203

2,599,551

3,758,851

42,368

53,581

1,306,463

1,256,472

63,893

19,781

19,984

968,661

1,478,996

3,801,094

20,934,537

23,984,537

25,207,596

198,524

204,184

232,279

316,428

497,506

607,170

69,577

90,739

125,566

8,771 -

478,130

463,536

605,680

698

247

1,676

Total non-current assets

27,736,422

30,280,598

34,630,315

23,829,367

21,216,552

20,891,991

Total assets

43,091,389

40,797,225

46,318,982

29,799,858

26,064,022

27,958,800

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

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Statement of financial position Thoresen Thai Agencies Public Company Limited and its Subsidiaries Thoresen Thai Agencies Public Limited and its Subsidiaries As atCompany 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)

Statement of financial position As at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)

Consolidated

Separate

financial statements

30 September Liabilities and equity

Note

2013

30 September

1 October

2012

2011

(restated)

2013

1 October

2012

2011

(in thousand Baht) Current liabilities Bank overdrafts

19 19

12,140

7,230

2,292

1,168,349

1,263,004

1,410,277

Trade accounts payable

1,382,044

1,269,526

837,555

13,332

13,341

Other accounts payable

71,835

64,493

139,330

1,121

1,239

14,314

11,632

7,173

208,783

97,053

19,271

166,686

225,776

375,834

Short-term loans

Payables to related parties

Advances from customers Short-term loans from related parties Current portion of bonds Current portion of long-term loans Current portion of finance lease liabilities Current portion of employee benefit obligations

5 19 19 19 20

4,500

1,205,741

5,916,004 -

1,205,741

3,318,265

1,057,584

4,239

5,373

4,272

60,808

40,000

4,367,527

2,279,612 -

220,000

5,660,905

30,474

Current portion of share subscription payable to subsidiaries Accrued income taxes Accrued expenses

34,408

33,792

158,174

62,826

153,493

55,505

1,432,126

880,555

888,756

73,855

59,733

Other current liabilities

281,298

224,479

313,886

40,359

13,362

8,563

Total current liabilities

7,005,225

7,366,951

6,461,501

6,472,361

5,885,515

5,688,320

19 19 19

6,627,589

5,387,990

6,651,297

940,000

1,160,000

3,996,772

3,995,530

3,994,284

3,996,772

3,995,530

9,604

11,193

3,360

42,786

42,020

108,640

100,473

107,718

Total non-current liabilities

10,785,391

9,537,206

Total liabilities

17,790,616

16,904,157

Non-current liabilities Long-term loans Bonds, net Finance lease liabilities

3,994,284

11,121

20,371

16,367

10,756,659

4,947,893

5,175,901

4,010,651

17,218,160

11,420,254

11,061,416

9,698,971

Long-term portion of share subscription payable Employee benefit obligations

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

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Statement of financial position Thoresen Agencies Public Limited and its Subsidiaries Thoresen Thai Thai Agencies Public Company LimitedCompany and its Subsidiaries Statement of financial position

As at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated) As at 30 September 2013 and 2012 (restated) and 1 October 2011 (restated) Consolidated

Separate

financial statements

30 September Liabilities and equity

Note

2013

1 October

2012

2011

(restated)

30 September 2013

1 October

2012

2011

(in thousand Baht) Equity Share capital Authorised share capital

Issued and paid-up share capital Premium on ordinary shares

1,132,807

783,004

833,004

1,132,807

783,004

991,838

708,004

991,838

708,004

833,004 708,004

5,232,142

1,540,410

5,232,142

1,540,410

Retained earnings Appropriated - legal reserves

93,500

11,108,377

16,188,595

21,037,030

12,079,974

12,674,629

15,928,611

514,935

149,467

430,428

17,940,792

18,679,976

23,809,372

7,359,981

5,213,092

5,291,450

Total equity

25,300,773

23,893,068

Total liabilities and equity

43,091,389

40,797,225

Unappropriated Other components of equity

(17,850)

(13,937)

(10,696)

Equity attributable to owners of the Company Non-controlling interests

18,379,604

15,002,606

18,259,829 -

29,100,822

18,379,604

15,002,606

18,259,829

46,318,982

29,799,858

26,064,022

27,958,800

The accompanying notes are an integral part of these financial statements. THORESEN THAI AGENCIES PLC.

Annual Report 2013

Statement of income

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Statement of income

the years that on 30 For the years that ended onFor 30 September 2013 andended 2012 (restated)

Note

September 2013 and 2012 (restated)

Consolidated

Separate

financial statements

2013

2012

(restated)

(in thousand Baht) Revenues Revenues from services Freight charges

4,746,612

3,528,456

Offshore service income

8,243,401

5,721,167

332,336

316,079

Service and commission income Revenues from sales Total revenues

5,140,740

18,463,089

6,781,505 16,347,207

Costs Cost of providing services Vessel operating expenses

4,742,727

3,188,767

Offshore service expenses

6,668,705

4,432,089

144,128

109,042

Service and commission expenses Cost of sales

4,385,064

Total costs Gross profits Other operating income

Profits before expenses

15,940,624

13,797,630

2,522,465

2,549,577

312,624 2,835,089

Selling expenses

6,067,732

315,369 2,864,946

476,538 476,538

1,421,585 1,421,585

280,705

362,479

Administrative expenses

2,055,319

1,890,679

318,511

380,671

Impairment charges and write-offs

4,894,819

4,277,362

412,276

3,576,605

Total expenses Operating losses

Share of profits in associates and joint ventures 13, 14

7,230,843

6,530,520

730,787

3,957,276

(4,395,754)

(3,665,574)

(254,249)

(2,535,691)

254,662

129,426

(4,141,092)

(3,536,148)

Losses before finance costs and income tax expenses Finance costs

(509,625)

Losses before income tax expenses

(4,650,717)

Income tax expenses

(217,970)

Net losses for the year

(4,868,687)

(753,858) (4,290,006) (165,880) (4,455,886)

(254,249) (340,406) (594,655) -

(2,535,691) (364,290) (2,899,981) -

(594,655)

(2,899,981)

Net losses attributable to: Owners of the Company Non-controlling interests

(5,080,218)

(4,494,434)

211,531

38,548

(4,868,687)

(4,455,886)

(594,655) -

(2,899,981) -

(594,655)

(2,899,981)

Losses per share Basic losses per share (in Baht)

(5.86)

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

THORESEN THAI AGENCIES PLC.

(6.35)

(0.69)

(4.10)

Annual Report 2013

Statement of comprehensive income Thoresen Agencies PublicLimited Company and its Subsidiaries Thoresen ThaiThai Agencies Public Company and itsLimited Subsidiaries Statement of comprehensive For the years that endedincome on 30 September 2013 and 2012 (restated) For the years that ended on 30 September 2013 and 2012 (restated) Consolidated

Separate

financial statements

2013

2012

(restated)

(in thousand Baht) Net losses for the year

(4,868,687)

(4,455,886)

(594,655)

(2,899,981)

Other comprehensive income (expenses) Translation adjustments for investments in subsidiaries

473,682

(274,517)

(27,703)

14,570

448

366

446,427

(259,581)

(3,913)

(3,241)

(4,422,260)

(4,715,467)

(598,568)

(2,903,222)

Net change in fair value of available-for-sale investments Share-based payment reserves

(3,913) -

(3,241) -

Other comprehensive income (expenses) for the year Total comprehensive income (expenses) for the year Total comprehensive income (expenses) attributable to: Owners of the Company Non-controlling interests

(4,714,750) 292,490 (4,422,260)

(4,699,978) (15,489) (4,715,467)

(598,568) (598,568)

(2,903,222) (2,903,222)

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

THORESEN THAI AGENCIES PLC.

THORESEN THAI AGENCIES PLC. 991,838

Balance as at 30 September 2013

5,232,142

3,691,732

1,540,410

93,500

reserves

Legal

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

Total comprehensive income (expenses) for the year

Other comprehensive income (expenses)

283,834

Net losses for the year

Total contributions by owners of the Company Comprehensive income (expenses) for the year

Dividends to owners of a subsidiary

Contribution from non-controlling shareholders of a subsidiary

283,834 -

Issue of ordinary shares

Contributions by owners of the Company

Transactions with owners, recorded directly in equity

708,004

1,540,410

708,004

Balance at 30 September 2012 - as reported

Impact of changes in accounting policies Balance at 30 September 2012 - restated

1,540,410

708,004

Balance as at 30 September 2012

1,540,410

Total comprehensive income (expenses) for the year

708,004

Net losses for the year

708,004

Other comprehensive income (expenses)

Comprehensive income (expenses) for the year

Total distributions to owners of the Company

Change in parent's ownership interests in subsidiaries

Dividends to owners of the Company

Distributions to owners of the Company

Transactions with owners, recorded directly in equity

Balance at 1 October 2011 - restated

Impact of changes in accounting policies

Balance as at 1 October 2011 - as reported

capital

on ordinary

paid-up share

(354,001)

11,108,377

(5,080,218)

16,188,595

(232,259)

16,420,854

16,188,595

(4,494,434)

(354,001)

21,037,030

(356,659)

21,393,689

Unappropriated

Retained earnings

392,723 (1,906,789)

392,723

(2,299,512)

(1,400,196)

(899,316)

(2,299,512)

(220,480)

(2,079,032)

(1,296,878)

(782,154)

in subsidiaries

for investments

adjustments

Translation

(4,717)

9,853

(17,850)

(27,703)

9,853

14,570

(4,717)

Capital

restructuring

business

arising from

adjustment

reserves -

(50,030)

(in thousand Baht)

investments

for-sale

available-

change in

Fair value

(75,417)

2,488,790

15,805

2,472,985

2,488,790

(75,417)

2,564,207

subsidiaries

interests in

ownership

parent's

Change in

Other components of equity

Consolidated financial statements

814

448

366

reserves

payment

based

Share-

514,935

365,468

149,467

(1,384,391)

1,533,858

149,467

(205,544)

(75,417)

430,428

(1,296,878)

1,727,306

of equity

components

Total other

Equity

17,940,792

(4,714,750)

365,468

(5,080,218)

3,975,566

18,679,976

(1,616,650)

20,296,626

18,679,976

(4,699,978)

(205,544)

(4,494,434)

(429,418)

(75,417)

(354,001)

23,809,372

(1,653,537)

25,462,909

the Company

owners of

attributable to

Non-

(9,216)

7,359,981

292,490

80,959

211,531

1,854,399

1,863,615

5,213,092

(100,992)

5,314,084

5,213,092

(15,489)

(54,037)

38,548

(62,869)

(59,395)

(3,474)

5,291,450

(61,612)

5,353,062

interests

controlling

25,300,773

(4,422,260)

446,427

(4,868,687)

5,829,965

1,863,615

(9,216)

3,975,566

23,893,068

(1,717,642)

25,610,710

23,893,068

(4,715,467)

(259,581)

(4,455,886)

(492,287)

(134,812)

(357,475)

29,100,822

(1,715,149)

30,815,971

equity

Total

Note

Premium

Issued and

Statement of changes in equity For the years that ended on 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)

For the years that ended on 30 September 2013 and 2012 (restated) and 1 October 2011 (restated)

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Statement of changes in equity

Annual Report 2013

991,838

THORESEN THAI AGENCIES PLC.

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

Balance as at 30 September 2013

Total comprehensive expenses for the year

Net losses for the year

283,834

Other comprehensive expenses

Comprehensive expenses for the year

Total contributions by owners of the Company

Issue of ordinary shares

Contributions by owners of the Company

Transactions with owners, recorded directly in equity

708,004

Balance at 30 September 2012

5,232,142

3,691,732

1,540,410

708,004

capital

708,004

Note

Premium on ordinary

Issued and paid-up share

Balance as at 30 September 2012

Total comprehensive expenses for the year

Other comprehensive expenses

Net losses for the year

Comprehensive expenses for the year

Total distributions to owners of the Company

Dividends to owners of the Company

Distributions to owners of the Company

Transactions with owners, recorded directly in equity

Balance at 1 October 2011

For the years that ended on 30 September 2013 and 2012

93,500

reserves

(594,655)

12,079,974

(594,655)

12,674,629

(2,899,981)

(354,001)

15,928,611

(17,850)

(3,913)

(13,937)

(3,241)

(10,696)

investments

available-for-sale

Fair value change in

(in thousand Baht)

Unappropriated

Retained earnings Legal

(3,241) (3,241)

(3,913)

(3,913) (17,850)

(13,937)

(10,696)

equity

components of

Total other

Other components of equity

Separate financial statements

and its Subsidiaries

For the years that ended on 30 September 2013 and 2012 (restated)

Statement of changes in equity

Thoresen Thai Agencies Public Company LimitedCompany and its Subsidiaries Thoresen Thai Agencies Public Limited

Statement of changes in equity

18,379,604

(598,568)

(3,913)

(594,655)

3,975,566

15,002,606

(2,903,222)

(3,241)

(2,899,981)

(354,001)

18,259,829

equity

Total

Annual Report 2013

Statement of cash flows

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Statement of cash flows

For the years that ended on 30 September 2013 and 2012 (restated)

Note

Consolidated

Separate

financial statements

2013

2012

(restated)

(in thousand Baht) Cash flows from operating activities Net losses for the year

(4,868,687)

(4,455,886)

(594,655)

(2,899,981)

1,484,461

1,441,412

27,567

29,343

Amortisation on deferred dry-docking expenses

270,221

264,526

Amortisation on intangible assets

110,747

114,937

21,545

26,736

3,432

3,571

83,785

96,055

(19,771)

(52,486)

10,123

908,081

Adjustments for: Depreciation

Amortisation on prepayments Bad and doubtful debts expense

Reversal of allowance for doubtful accounts and provision for unrecoverable value added tax Impairment on receivables from related parties and loans to related parties Allowance for impairment on inventories

2,731,526

243,294

107,639

Net impairment on investments in subsidiaries

412,073

836,872

Impairment on investments in an associate and a joint venture

120,245

Impairment on goodwill

516,031

2,318,666

3,925,266 79,839

Finance costs

509,625

753,858

340,406

364,290

Income tax expenses

217,970

165,880

Losses from write-off on withholding taxes

16,598

(45,969)

23,472

Impairment and write-off on property, plant, and equipment Impairment on intangible assets

203

904,414

8,207

Net (gains) losses on disposals of property, plant, and equipment, and intangible assets

(617)

Net gains on compensation for termination of property, plant, and equipment contract

(14,882)

Dividend income from short-term investments

(1,795)

Dividend income from associates

Dividend income from subsidiaries

Gains on convertible bonds cancellation

(5,845)

(1,795) (7,350)

(307,612)

(841)

(5,845) (1,118,973)

(841)

Net (gains) losses on disposals of investments in a subsidiary and an associate

Net (gains) losses on disposals of short-term investments

7, 25

(32,284)

4,904

Share of profits of associates and joint ventures

13, 14

(254,662)

(129,426)

(46,704)

(80,668)

(15,440)

97,714

(36,754)

(11,653)

(6,998)

448

366

2,376,794

2,348,247

(144)

(8,224)

4,904

(65,234)

(54,707)

Unrealised gains on exchange rates from short-term investments and loans Realised (gains) losses on exchange rates from loans and convertible bonds Exchange difference from translation of overseas companies

(3,838) -

9,891 -

Gains from settlement of cross currency and interest rate swap agreements

Expenses for share based payment

The accompanying notes are an integral part of these financial statements. THORESEN THAI AGENCIES PLC.

(11,653) (198,711)

(598) (69,793)

Annual Report 2013

Statement of cash flows

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Thoresen Thai Agencies Public Company Limited and its Subsidiaries Statement of cash flows For the years that ended on 30 September 2013 and 2012 (restated) For the years that ended on 30 September 2013 and 2012 (restated)

Note

Consolidated

Separate

financial statements

2013

2012

(restated)

(in thousand Baht) Cash flows from operating activities Changes in operating assets and liabilities Trade accounts receivable

(786,804)

(5,645)

Other accounts receivable

(15,749)

212,882

(536,918)

15,164

Receivables from related parties Inventories

76,780

(157,982)

22,283

561,521

Vessel supplies and spare parts

196,146

(247,235)

Prepayments

(39,770)

2,093

107

(286)

Other current assets

(63,047)

(194,669)

(484)

35,332

Other non-current assets

(14,673)

135,518

(452)

1,430

Trade accounts payable - others

91,116

440,971

(9)

(17,133)

(10,193)

(111)

Payables to related parties

2,578

4,571

Other accounts payable

1,239

(53,349)

(47,073)

(139,101)

Accrued income taxes

(17,321)

(34,131)

Accrued expenses

524,875

(13,206)

16,350

54,306

(91,004)

29,159

7,400

8,317

(67,134)

(9,250)

4,004

1,756,299

2,875,493

(96,703)

(206,520)

(504,752)

(685,156)

(221,628)

(227,043)

Advances from customers

Other current liabilities Employee benefit obligations Cash generated from (used in) operating activities Finance costs paid Income taxes paid

(108,559)

Net cash from (used in) operating activities

(221,380)

(89)

(9,292)

1,142,988

1,968,957

(318,331)

(1,651,519)

(1,453,847)

(760,214)

(235,343)

(9,209)

(125,666)

(1,314,892)

(1,122,228)

(87,639)

(2,085,824)

5,845

1,795

(433,563)

Cash flows from investing activities Purchases of property, plant, and equipment and intangible assets Payments for dry-docking Payments for short-term loans to related parties

(23,179) -

(1,547) (452,440)

Payments for investments in subsidiaries, associates, and joint ventures Dividends received from short-term investments

1,795

Dividends received from subsidiaries Dividends received from associates Dividends received from joint ventures

7,612

36,855

31,668

119,644

47,896

7,350

5,845 25,015 -

Proceeds from disposals of property, plant, and equipment and intangible assets

367,501

9,044

Proceeds from short-term investments

313,671

170,955

32,951

195,674

682

584

36,500

Proceeds from disposals of investments in a subsidiary and an associate

Proceeds from settlement of short-term loans to related parties

248,790

77,311

31,251

30,930

Proceeds from settlement of business co-operation to a related party Proceeds from settlement of long-term loans to related parties

750

Net cash used in investing activities

(2,671,703)

(1,605,573)

750 (3,088,147)

(149,460)

The accompanying notes are an integral part of these financial statements. The accompanying notes are an integral part of these financial statements. 11

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Statement of cash flows Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Statement of cash flows

For the that ended For the years that ended on 30 September 2013 andyears 2012 (restated)

on 30 September 2013 and 2012 (restated)

Note

Consolidated

Separate

financial statements

2013

2012

(restated)

(in thousand Baht) Cash flows from financing activities Proceeds from short-term loans from related parties Proceeds from long-term loans Net proceeds of short-term loans Repayments of short-term loans from related parties Repayments of long-term loans and finance lease liabilities

269,384

1,037,951

2,941,975

1,200,000

(96,715)

(147,668)

(978,010)

Payments for convertible bond redemption

Payments for convertible bond cancellation

Dividends paid to shareholders Proceeds from increase of share capital

(9,216)

(4,500)

(11,662)

(1,879,533)

(40,000)

(1,130,281)

(106,088)

(357,481)

3,975,566

1,464,401

(1,130,281) (106,088) (1)

3,975,566

(354,007) -

Proceeds from increase of investment from non-controlling interests of a subsidiary

Net proceeds from settlement of cross currency and interest rate swap agreements

11,653

Net cash from (used in) financing activities

5,405,630

Net increase (decrease) in cash and cash equivalents

3,876,915

Cash and cash equivalents as at 1 October

3,582,194

6,998

11,653

598

(676,578)

3,935,556

(120,394)

(313,194)

529,078

(703,417)

3,799,848

123,271

765,715

Effect of exchange rate changes on balances held in foreign currencies Cash and cash equivalents as at 30 September

(12,862) 7,446,247

95,540 3,582,194

(1,372)

60,973

650,977

123,271

650,977

123,271

Cash and cash equivalents as at 30 September comprise: Cash and cash equivalents Bank overdrafts

7,458,387

3,589,424

(12,140)

(7,230)

7,446,247

3,582,194

650,977

123,271

Non-cash transactions Unpaid liabilities from dry-docking

21,525

445

12,085

11,684

1,121

Offsetting dividend income with short-term loans from subsidiaries

1,093,958

Offsetting dividend income with long-term loans to a subsidiary

300,000

Unpaid liabilities from purchase of property, plant, and equipment and intangible assets

Dividend payables

4,073

Additional investment in a subsidiary by offsetting with short-term loans to a subsidiary

681,051

4,060,122

271,487

836,725

399,214

Settlement of short-term loan from related parties by offseting with short-term and long-term loan to related parties Private placement receivables

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

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Notes of financial Statement

ThoresenThai Thai Agencies Agencies Public Limited andand its Subsidiaries Thoresen PublicCompany Company Limited its Subsidiaries Notes to financial statements Note

Contents

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

General information Basis of preparation of the financial statements Change in accounting policy Significant accounting policies Related parties Cash and cash equivalents Short-term investments Trade accounts receivable Other accounts receivable Deferred contract costs Inventories Investments in subsidiaries Investments in associates Investments in joint ventures Goodwill Property, plant, and equipment Intangible assets Other non-current assets Interest-bearing liabilities Employee benefit obligations Share capital and warrants Legal reserves Share-based payment Segment information Other operating income Expenses by nature Income tax expense Losses per share Dividends Promotional privileges Financial instruments Commitments and contingent liabilities Events after the reporting period Thai Financial Reporting Standards (â&#x20AC;&#x153;TFRSâ&#x20AC;?) not yet adopted

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements These notes form an integral part of the financial statements. The financial statements issued for Thai statutory and regulatory reporting purposes are prepared in the Thai language. These English language financial statements have been prepared from the Thai language statutory financial statements, and were approved and authorised for issue by the Board of Directors on 27 November 2013.

General information Thoresen Thai Agencies Public Company Limited (the “Company”) is incorporated in Thailand and th has its registered office at 26/26-27 Orakarn Building, 8 Floor, Soi Chidlom, Ploenchit Road, Lumpinee, Pathumwan, Bangkok 10330. The Company was listed on the Stock Exchange of Thailand (the “SET”) on 25 September 1995. The principal business operations of the Company and its subsidiaries (the “Group”) involve the ownership of dry bulk vessels, certain shipping services, offshore oil and gas services, production and sales of fertilisers, coal trading, and warehouse and logistics services. The Group’s activities can be separated into four main categories, namely transport, infrastructure, energy, and the holding company. Details of the Company’s subsidiaries, associates, and joint ventures as at 30 September 2013 and 2012 are given in notes 12, 13, and 14.

Basis of preparation of the financial statements

(a)

Statement of compliance The financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”); guidelines promulgated by the Federation of Accounting Professions (“FAP”); and applicable rules and regulations of the Thai Securities and Exchange Commission. From 1 October 2012, the Group has adopted revised Thai Accounting Standard (“TAS”) No. 21 (revised 2009) - The Effects of Changes in Foreign Exchange Rates. The adoption of this revised standard has resulted in changes in the Group’s accounting policies. The effects of this change are disclosed in note 3. In addition to the above revised TAS, as at 30 September 2013, the FAP issued a number of other new and revised TFRS and announcements which are effective for financial statements beginning on or after 1 October 2013 and have not been adopted in the preparation of these financial statements. Those new and revised TFRS and announcements that are relevant to the Group’s operations are disclosed in note 34.

(b)

Basis of measurement The financial statements have been prepared on the historical cost basis except as stated in the accounting policies.

(c)

Functional and presentation currency The financial statements are presented in Thai Baht, which is the Company’s functional currency. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest thousand unless otherwise stated.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements (d)

Use of estimates and judgements The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income, and expenses. Actual results may differ from estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected. Information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements is included in the following notes: Note 12, 15, and 16 Note 20 Note 23 Note 31 Note 32

Key assumptions used in discounted cash flow projections Measurement of defined benefit obligations Measurement of share-based payments Valuation of financial instruments Commitments and contingent liabilities

Change in accounting policy Accounting for the effects of changes in foreign exchange rates From 1 October 2012, consequent to the adoption of revised TAS as set out in note 2, the Group has adopted TAS 21 (revised 2009) - The Effects of Changes in Foreign Exchange Rates. The principal change introduced by TAS 21 is the introduction of the concept of functional currency, which is defined as the currency of the primary economic environment in which the entities of the Group operate. TAS 21 requires each entity to determine its functional currency and translate foreign currency items into its functional currency, recognising the effects of that translation in accordance with the provisions of TAS 21. Foreign currencies are defined by TAS 21 as all currencies other than the entityâ&#x20AC;&#x2122;s functional currency. Management has determined that the functional currency of the Company is Thai Baht and that the adoption of TAS 21 from 1 October 2012 has had no impact on the separate financial statements. However, in the consolidated financial statements, the effects of the change are recognised retrospectively. The impact of the adoption of TAS 21 on the consolidated financial statements is as follows:

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Notes to financial statements

Consolidated financial statements 30 September 2012 Before restatement

Reclassification*

Assets

Current assets

Cash and cash equivalents Short-term investments Trade accounts receivable Other accounts receivable Receivables from related parties Current portion of long-term receivables from a related party Current portion of long-term loans to related parties Deferred contract costs Inventories Vessel supplies and spare parts Prepayment Other current assets Total current assets

Restatement

(in thousand Baht)

3,585,007 802,920 2,663,448 676,009 62,062

(236,728) -

4,417 -

1,721 (12,787) -

3,589,424 802,920 2,665,169 426,494 62,062

31,251

34,574 1,601,787 615,421 139,556 327,074 10,507,858

(31,251) 277,459 (44,088) (3,357)

(4,838) (72) 23,685 12,126

3,323 277,459 1,601,787 610,583 139,484 306,671 10,516,627

Investment in associates Investment in joint ventures Goodwill Property, plant, and equipment Intangible assets Other non-current assets Total non-current assets

2,537,200 1,256,472 1,498,794 25,768,943 498,283 492,877 32,052,569

(26,018) (26,018)

62,351 (19,798) (1,784,406) (777) (3,323) (1,745,953)

2,599,551 1,256,472 1,478,996 23,984,537 497,506 463,536 30,280,598

Total assets

42,560,427

(29,375)

(1,733,827)

40,797,225

Non-current assets

THORESEN THAI AGENCIES PLC.

30 September 2012 After restatement

31,251

Annual Report 2013 Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Notes to financial statements

Consolidated financial statements 30 September 2012 Before restatement

Reclassification*

Liabilities and equity

Current liabilities

Bank overdrafts Short-term loans Trade accounts payable Other accounts payable Payables to related parties Advances from customers Current portion of long-term loans Current portion of finance lease liabilities Current portion of share subscription payable to subsidiaries Accrued income taxes Accrued expenses Other current liabilities Total current liabilities

Non-current liabilities

Long-term loans Bonds, net Finance lease liabilities Long-term portion of share subscription payable to subsidiaries Employee benefit obligations Total non-current liabilities Total liabilities

Restatement

(in thousand Baht)

7,230 1,263,004 1,270,299 64,550 11,632 225,776 3,322,585

30 September 2012 After restatement

(3,357)

33,823 63,198 881,517 219,457 7,368,444

(3,357)

(31) (372) (962) 5,022 1,864

33,792 62,826 880,555 224,479 7,366,951

5,431,453 3,995,530 11,410

(26,018) -

(17,445) (217)

5,387,990 3,995,530 11,193

42,207 100,673 9,581,273

(26,018)

(187) (200) (18,049)

42,020 100,473 9,537,206

16,949,717

(29,375)

(16,185)

16,904,157

5,373

(773) (57) (963)

7,230 1,263,004 1,269,526 64,493 11,632 225,776 3,318,265 5,373

Equity

Share capital Authorised share capital Issued and paid-up share capital Premium on ordinary shares Retained earnings Appropriated - legal reserves Unappropriated Other components of equity

783,004 708,004 1,540,410

93,500 16,420,854 1,533,858

(232,259) (1,384,391)

93,500 16,188,595 149,467

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

20,296,626 5,314,084 25,610,710

(1,616,650) (100,992) (1,717,642)

18,679,976 5,213,092 23,893,068

Total liabilities and equity

42,560,427

(1,733,827)

40,797,225

(29,375)

783,004 708,004 1,540,410

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Notes to financial statements

Consolidated financial statements 30 September 30 September 2012 2012 Before After restatement Restatement restatement

(in thousand Baht)

Revenues

Revenues from services Freight charges Offshore service income Service and commission income Revenues from sales Total revenues

3,527,164 5,714,142 316,079 6,781,505 16,338,890

1,292 7,025 8,317

3,528,456 5,721,167 316,079 6,781,505 16,347,207

3,286,241 4,511,569 109,042 6,067,732 13,974,584

(97,474) (79,480) (176,954)

3,188,767 4,432,089 109,042 6,067,732 13,797,630

Gross profits Other operating income Profit before expenses

2,364,306 372,340 2,736,646

185,271 (56,971) 128,300

2,549,577 315,369 2,864,946

Selling expenses Administrative expenses Impairment charges and write-offs Total expenses

362,479 1,898,448 4,277,362 6,538,289

(7,769) (7,769)

362,479 1,890,679 4,277,362 6,530,520

Cost

Cost of providing services Vessel operating expenses Offshore service expenses Service and commission expenses Cost of sales Total costs

Operating losses Share of profits in associates and joint ventures

(3,801,643) 129,426

136,069 -

(3,665,574) 129,426

Losses before finance costs and income tax expenses Finance costs

(3,672,217) (757,772)

136,069 3,914

(3,536,148) (753,858)

Losses before income tax expenses Income tax expenses Net losses for the year

(4,429,989) (166,964) (4,596,953)

139,983 1,084 141,067

(4,290,006) (165,880) (4,455,886)

THORESEN THAI AGENCIES PLC.

Annual Report 2013 Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Notes to financial statements

Consolidated financial statements 30 September 30 September 2012 2012 Before After restatement Restatement restatement

(in thousand Baht)

Net losses attributable to : Owner of the Company Non-controlling interests Other comprehensive incomes (expenses): Translation adjustments for investments in subsidiaries Net change in fair value of available-for-sale investments Share-based payment reserves

(4,618,833) 21,880 (4,596,953)

124,399 16,668 141,067

(4,494,434) 38,548 (4,455,886)

(130,956)

(143,561)

(274,517)

14,570 366

Other comprehensive income (expenses) for the year Total comprehensive income (expenses) for the year Total comprehensive incomes (expenses) attributable to: Owners of the Company Non-controlling interests

Losses per share Basic losses per share (in Baht)

14,570 366

(116,020)

(143,561)

(259,581)

(4,712,973)

(2,494)

(4,715,467)

(4,721,059) 8,086 (4,712,973)

21,081 (23,575) (2,494)

(4,699,978) (15,489) (4,715,467)

(6.52)

0.17

(6.35)

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Notes to financial statements

Consolidated financial statements 1 October 2011 Before restatement

1 October 2011 After restatement

Reclassification*

Restatement

3,797,378 983,932 2,719,103 717,132 291,060

30,930

3,323 2,270,947 375,145 142,633 304,184 11,635,767

(5,775) -

(4,196) 352 39,272 52,900

3,323 2,270,947 370,949 142,985 337,681 11,688,667

Long-term portion of receivables from a related party Long-term loans to related parties Investment in associates Investment in joint ventures Goodwill Property, plant, and equipment Intangible assets Other non-current assets Total non-current assets

31,251 554,780 3,675,470 63,893 3,817,460 27,002,184 607,527 644,060 36,396,625

(33,427) (33,427)

83,381 (16,366) (1,794,588) (357) (4,953) (1,732,883)

31,251 554,780 3,758,851 63,893 3,801,094 25,207,596 607,170 605,680 34,630,315

Total assets

48,032,392

(33,427)

(1,679,983)

46,318,982

(in thousand Baht)

Assets

Current assets

Cash and cash equivalents Short-term investments Trade accounts receivable Other accounts receivable Receivables from related parties Current portion of long-term receivables from a related party Current portion of long-term loans to related parties Inventories Vessel supplies and spare parts Prepayment Other current assets Total current assets

4,762 5,775

8,453 4,257

3,802,140 983,932 2,727,556 727,164 291,060 30,930

Non-current assets

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Consolidated financial statements 1 October 2011 Before restatement

Reclassification*

Restatement

2,292 1,410,277 838,130 139,149 7,173 375,787 4,500 1,205,741 1,062,215

47 (4,631)

4,272

61,031 151,282 887,365 268,758 6,417,972

(223) 2,211 1,391 45,128 43,529

60,808 153,493 888,756 313,886 6,461,501

(in thousand Baht)

Liabilities and equity

Current liabilities

Bank overdrafts Short-term loans Trade accounts payable Other accounts payable Payables to related parties Advances from customers Short-term loan from related parties Current portion of bonds Current portion of long-term loans Current portion of finance lease liabilities Current portion of employee benefit obligations Accrued income taxes Accrued expenses Other current liabilities Total current liabilities

Non-current liabilities

1 October 2011 After restatement

(575) 181 -

2,292 1,410,277 837,555 139,330 7,173 375,834 4,500 1,205,741 1,057,584 4,272

Long-term loans Bonds, net Finance lease liabilities Employee benefit obligations Total non-current liabilities

6,693,963 3,994,284 3,880 106,322 10,798,449

(33,427) (33,427)

(9,239) (520) 1,396 (8,363)

6,651,297 3,994,284 3,360 107,718 10,756,659

Total liabilities

17,216,421

(33,427)

35,166

17,218,160

Equity

Share capital Authorised share capital Issued and paid-up share capital Premium on ordinary shares Retained earnings Appropriated - legal reserves Unappropriated Other components of equity

833,004 708,004 1,540,410

93,500 21,393,689 1,727,306

(356,659) (1,296,878)

93,500 21,037,030 430,428

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

25,462,909 5,353,062 30,815,971

(1,653,537) (61,612) (1,715,149)

23,809,372 5,291,450 29,100,822

Total liabilities and equity

48,032,392

(33,427)

(1,679,983)

46,318,982

833,004 708,004 1,540,410

* Certain accounts in the consolidated statement of financial position as at 30 September 2012 and 2011 which are included in the 2013 financial statements for comparative purposes, have been reclassified to conform to the presentation in the financial statements for the year that ended on 30 September 2013. Those reclassifications have been made, because, in the opinion of management, the new classification is more appropriate to the Groupâ&#x20AC;&#x2122;s business.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 4

Significant accounting policies The accounting policies set out below have been applied consistently to all periods presented in these financial statements, except as explained in note 3, which addresses changes in accounting policies.

(a)

Basis of consolidation The consolidated financial statements relate to the Company and its subsidiaries, associates, and jointly-controlled entities (together referred to as the â&#x20AC;&#x153;Groupâ&#x20AC;?) and the Groupâ&#x20AC;&#x2122;s interests in associates and jointly-controlled entities.

Business combinations The Group applies the acquisition method for all business combinations other than those with entities under common control. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. The acquisition date is the date on which control is transferred to the acquirer. Judgment is applied in determining the acquisition date and determining whether control is transferred from one party to another. Consideration transferred includes the fair values of the assets transferred, liabilities incurred by the Group to the previous owners of the acquiree, and equity interests issued by the Group. Consideration transferred also includes the fair value of any contingent consideration and sharebased payment awards of the acquiree that are replaced mandatorily in the business combination. If a business combination results in the termination of pre-existing relationships between the Group and the acquiree, then the lower of the termination amount, as contained in the agreement, and the value of the off-market element is deducted from the consideration transferred and recognised in other expenses. A contingent liability of the acquiree is assumed in a business combination only if such a liability represents a present obligation and arises from a past event, and its fair value can be measured reliably. The Group measures any non-controlling interest at its proportionate interest in the identifiable net assets of the acquiree. Transaction costs that the Group incurs in connection with a business combination, such as legal fees, and other professional and consulting fees are expensed as incurred.

Acquisitions from entities under common control Business combinations of entities or businesses under common control are accounted for using a method similar to the pooling of interest method and in accordance with the guideline issued in 2009 by the FAP.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group. Losses applicable to non-controlling interests in a subsidiary are allocated to non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.

Loss of control Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in the statement of income. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted investee or as an available-for-sale investment depending on the level of influence retained.

Associates and jointly-controlled entities (equity-accounted investees) Associates are those entities in which the Group has significant influence, but not control, over the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. Jointly-controlled entities are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. Investments in associates and jointly-controlled entities are accounted for in the consolidated financial statements using the equity method (equity-accounted investees) and are recognised initially at cost. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the statement of income and other comprehensive income of equity accounted investees after adjustments to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an equity accounted investee, the Group’s carrying amount of that interest is reduced to zero and recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income or expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates and jointly-controlled entities are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements (b)

Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currency of the Group entities at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of income. Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates on the dates of the transactions.

Foreign operations The assets and liabilities of foreign operations are translated to Thai Baht at the foreign exchange rates on the reporting date. Goodwill and fair value adjustments arising on the acquisition of foreign operations are stated at exchange rates on the reporting date. The revenues and expenses of foreign operations, excluding foreign operations in hyperinflationary economies, are translated to Thai Baht at rates approximating the foreign exchange rates on the dates of the transactions. Foreign exchange differences arising on translation are recognised in other comprehensive income and presented in the translation adjustments for investments in subsidiaries in equity until disposal of the investment.

(c)

Cash and cash equivalents Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits, and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of cash and cash equivalents for the purpose of the statement of cash flows.

(d)

Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts. The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

(e)

Inventories Inventories are measured at the lower of cost and net realisable value. Cost is calculated using the weighted average cost principle and comprises all costs of purchase, costs of conversion, and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements (f)

Vessel supplies and spare parts Vessel supplies and spare parts mainly comprise bunker, vessel supplies, and spare parts. Bunker supplies are stated at cost, determined on the first-in, first-out basis. Vessel supplies and vessel spare parts are stated at cost, determined on the weighted-average basis. Rig supplies and rig spare parts are stated at historical cost, determined on the specific identification basis. The vessel and rig supplies and spare parts purchased to replace those used during the year are reported as vessel operating expenses and offshore service expenses in the statement of income.

(g)

Investments Investments in subsidiaries, associates, and jointly-controlled entities Investments in subsidiaries, associates, and jointly-controlled entities in the separate financial statements of the Company are accounted for using the cost method. Investments in associates and jointly-controlled entities in the consolidated financial statements are accounted for using the equity method.

Investments in other debt and equity securities Debt securities that the Group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are stated at amortised cost, less any impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity. Debt securities and marketable equity securities, other than those securities held for trading or intended to be held to maturity, are classified as available-for-sale investments. Available-forsale investments are, subsequent to initial recognition, stated at fair value, and changes therein, other than impairment losses and foreign currency differences on available-for-sale monetary items, are recognised directly in equity. Impairment losses and foreign exchange differences are recognised in the statement of income. When these investments are derecognised, the cumulative gain or loss previously recognised directly in equity is recognised in the statement of income. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the statement of income. Equity securities which are not marketable are stated at cost less any impairment losses. Fixed term deposits are stated at amortised cost applying the effective interest rate method. The fair value of marketable equity securities classified as available-for-sale is determined as the quoted bid price on the reporting date.

Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying amount together with the associated cumulative gain or loss that was reported in equity is recognised in the statement of income. If the Group disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

100

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements (h)

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

Leased assets Leases in terms of which the Group substantially assumes all the risk and rewards of ownership are classified as finance leases. Property, plant, and equipment acquired by way of finance leases is capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the statement of income.

Subsequent costs The cost of replacing a part of an item of property, plant, and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group, and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant, and equipment are recognised in the statement of income as incurred.

Depreciation Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

101

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Depreciation is charged to the statement of income and calculated on a straight-line basis over the estimated useful lives of each component of an item of property, plant, and equipment. The estimated useful lives are as follows: Buildings and factories Building improvements New build support vessels Ocean vessels (second-hand and new) Second-hand support and supply vessels Second-hand tender rigs Dry-docking Machinery and equipment Furniture, fixtures, and office equipment Motor vehicles Motor launches Barges

20 3 - 20 5 - 30 7 - 25 5 - 22 1 - 20 2-5 1 - 15 2 - 10 3 - 10 10 15 - 29

years years years years years years years years years years years years

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

(i)

Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Groupâ&#x20AC;&#x2122;s share of the net identifiable assets of the acquired subsidiary or associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is reported as a separate line in the consolidated statements of financial position. Goodwill on acquisitions of associates and joint ventures is included in investments in associates and joint ventures and is tested for impairment as part of the overall balance. Separately recognised goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash generating units for the purpose of impairment testing. The allocation is made to those cash generating units or group of cash generating units that are expected to benefit from the business combination in which the goodwill arose.

(j)

Intangible assets Computer software Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software.

Other intangible assets Trademarks and customer relationships acquired in a business combination are recognised at fair value at the acquisition date. Trademarks and customer relationships have a finite useful life and are carried at cost less accumulated amortisation and impairment (if any).

Amortisation Amortisation is based on the cost of the asset, or other amount substituted for cost, less its residual value.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

102

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements Amortisation is recognised in the statement of income and calculated on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful lives for the current and comparative periods are as follows:  

Computer software Trademarks and customer relationships

3 - 10 5 - 8.2

years years

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

(k)

Impairment The carrying amounts of the Group’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in the statement of income. When a decline in the fair value of an available-for-sale investment has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statement of income even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in the statement of income is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the statement of income.

Calculation of recoverable amount The recoverable amount of available-for-sale investment is calculated by reference to the fair value. The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised. For financial assets carried at amortised cost and available-for-sale investment that are debt securities, the reversal is recognised in the statement of income. For available-forsale investment that are equity securities, the reversal is recognised in other comprehensive income. An impairment loss in respect of goodwill is not reversed. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

103

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements (l)

Interest-bearing liabilities Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges. Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised over the period of the borrowings on an effective interest basis.

(m)

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

(n)

Employee benefits Defined contribution plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in the periods during which services are rendered by employees.

Defined benefit plans A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The defined benefit plan is calculated by an independent actuary using the projected unit credit method. The present value of the benefit obligations is determined by discounting the estimated future cash outflows using interest rates of referred government bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating to the terms of the related retirement liabilities. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited in the statement of income.

Other employee benefits The drilling companies of the Group provide retention incentives to certain employees. The entitlement to these incentives is conditional on the staff remaining in service up to the completion of the minimum entitlement service periods. The expected costs of these incentives are accrued over the period of the entitlement service periods without discount to their present value, as there is no significant impact from a discounted value calculation approach.

Termination benefits Termination benefits are recognised as an expense when the Group is committed demonstrably, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value.

Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

104

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements A liability is recognised for the amount expected to be paid under a short-term cash bonus plan, if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

Share-based payments The Group operates a number of equity-settled, share-based compensation plans, under which the entity that receives services from employees compensates in part through equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:   

including any market performance conditions; excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets, and remaining an employee of the entity over a specified time period); and excluding the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the entity revises its estimates of the number of options that are expected to vest based on the nonmarketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in the statement of income, with a corresponding adjustment to equity. When the options are exercised, the Group issues new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. The grant by the Group of options over its equity instruments to the employees of the Group is treated as a capital contribution. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

(o)

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

Onerous contracts A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting the Group’s obligations under the contract. The provision is measured at the present value of the lower of the expected net cost of terminating the contract and the expected net cost of continuing with the contract.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

105

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements (p)

Share capital Ordinary shares Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

(q)

Revenue Revenue excludes value added taxes and is arrived at after deduction of trade discounts and volume rebates.

Rendering of services Freight charges of each voyage are generally recognised as revenues at the completion of the voyage. Where a voyage is incomplete as of the statements of financial position date, freight charges are recognised as revenue in proportion to the lapsed time of the voyage. Freight charges shown in the statement of income represent the net freight charges after deduction of related commissions. Offshore service income is recognised as services are performed based upon (a) contracted day rates and the number of operating days during the period or (b) agreed service charges. Mobilisation activities related to drilling rig activity to mobilise a rig from one geographic area to another are linked to the underlying contracts. Certain contracts include mobilisation fees paid at the start of the contracts. Where the mobilisation fee covers a general or specific upgrade of a rig or equipment, the fee is recognised as revenue over the contract period. In cases where the fee covers specific operating expenses at the start up of the contract, the fee is recognised in the same period as the expenses.

Sale of goods Revenue from sales of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs, or the probable return of goods.

Commissions Commissions for services rendered to vessels and service income are generally recognised as revenues when services are completed and billed.

Rental income Rental income is recognised as revenue on an accrual basis at the amount as specified under each lease agreement.

Dividend income Dividend income is recognised in the statement of income on the date the Groupâ&#x20AC;&#x2122;s right to receive payments is established.

Interest income Interest income is recognised in the statement of income as it accrues.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

106

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements (r)

Finance costs Finance costs comprise interest expense and relevant costs on borrowings. Borrowing costs that are not directly attributable to the acquisition, construction, or production of a qualifying asset are recognised in the statement of income using the effective interest method.

(s)

Lease payments Payments made under operating leases are recognised in the statement of income on a straight line basis over the term of the lease. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

(t)

Income tax Income tax expense for the year comprises current tax. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. In determining the amount of current tax, the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many factors, including interpretations of tax law and prior experience. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Company to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

(u)

Earnings per share The Group presents basic and diluted earnings per share (“EPS”) data for its ordinary shares. Basic EPS is calculated by dividing the the statement of income attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the the statement of income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise warrants.

(v)

Dividend distribution Dividend to the Company’s shareholders is recognised as a liability in the consolidated and separate financial statements in the period in which the interim dividends are approved by the Board of Directors and the annual dividends are approved by the Company’s shareholders.

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

THORESEN THAI AGENCIES PLC.

Annual Report 2013

107

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements Relationships with related parties, except for subsidiaries, associates, and joint ventures described in notes 12, 13, and 14, are as follows: Name of entities Key management personnel

SKI Energy Resources Inc. (â&#x20AC;&#x153;SERIâ&#x20AC;?)

Country of Nature of relationships incorporation/ nationality Multi-nationalities Persons having authority and responsibility for planning, directing, and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of the Group/Company. An associate of Merton Group (Cyprus) Philippines Limited, the Companyâ&#x20AC;&#x2122;s associate.

The pricing policies for particular types of transactions are explained further below: Pricing policies Prices normally charged to a third party

Transactions IT service and office and office equipment rental income Service income Management fee income Interest income/interest expenses Management and administrative fees IT service and service expenses Vessel operating expenses, offshore service expenses, and cost of sales

Prices normally charged to a third party Actual cost plus margin Market linked rate/the borrowing costs of the lender Actual cost plus margin Prices normally charged by a third party Prices normally charged by a third party

Significant transactions for the years that ended on 30 September 2013 and 2012 with related parties were as follows: Consolidated financial statements 2013 2012 (restated)

Years that ended on 30 September

Separate financial statements 2013 2012

( in thousand Baht )

Subsidiaries IT service and office and office equipment rental income Service income Management fee income Interest income IT service and service expenses Interest expenses Key management personnel Key management personnel compensation Short-term benefits Post-employment benefits Total key management personnel compensation

23,118 891 (4,273) 24,392 9,958 136,051

36,067 3,793 12,784 173,990 19,357 81,465

211,531 2,975 214,506

218,230 5,066 223,296

96,221 1,077 97,298

88,255 4,943 93,198

THORESEN THAI AGENCIES PLC.

Annual Report 2013

108

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements Key management personnel compensation remuneration, and meeting fees.

comprises

salaries,

Consolidated financial statements 2013 2012 (restated)

Years that ended on 30 September

other

benefits,

other

Separate financial statements 2013 2012

(in thousand Baht)

Associates and joint ventures IT service and office and office equipment rental income Offshore service income Service income Interest income Vessel operating expenses Offshore service expenses Cost of sales Management and administrative fees

25,946 1,540,011 383 4,378 1,780 23,847 35,328 19,023

20,837 12 319 10,268 24,317 53,140 17,758

7,953 383 241 -

8,867 277 319 -

Balances as at 30 September 2013 and 2012 with related parties were as follows:

Note Trade accounts receivable

Associates and joint ventures

Consolidated financial statements 2013 2012

(in thousand Baht)

1,043,583

Receivables from related parties

Subsidiaries Associates and joint ventures Other related parties

5,222 236,223 241,445 (236,223) 5,222

Less allowance for impairment Net

Separate financial statements 2013 2012

62,062 231,031 293,093 (231,031) 62,062

513,113 2,076 515,189 515,189

589,989 2,186 592,175 592,175

Consolidated As at 30 September 2013 and 2012, receivables from other related parties include advances for share subscription in SERI, totalling USD 5 million and interest receivable of USD 2.5 million which are fully impaired as management is of the view that the operations of SERI are not expected to be adequetly financed such that SERI can produce sufficient coal to achieve break-even performance. Consolidated financial statements 2013 2012

(in thousand Baht)

Short-term loans to related parties Subsidiaries Other related parties

134,980 134,980 (134,980) -

Less allowance for impairment Net

THORESEN THAI AGENCIES PLC.

Separate financial statements 2013 2012

123,315 123,315 (123,315) -

4,732,061 4,732,061 4,732,061

4,030,978 4,030,978 4,030,978

Annual Report 2013

109

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements The Company

Short-term loans to subsidiaries can be called at any time and are unsecured. The loans mainly bear interest at 3.0% per annum (2012: 3.0% per annum). During the year, the Company granted an unsecured loan to a subsidiary in the amount of Baht 350 million for its working capital. This loan can be called at any time and bears interest at a fixed rate.

Consolidated As at 30 September 2013, short-term and convertible loans made to SERI by Soleado Holdings Pte. Ltd., a wholly owned subsidiary of the Company (“Soleado”), in USD currency totalling USD 4.3 million, or Baht 135.0 million (2012: USD 4.0 million, or Baht 123.3 million) are unsecured and repayable at call. Separate financial statements 2013 2012

Consolidated financial statements 2013 2012

(in thousand Baht)

Long-term receivables from a related party Joint venture

Less current portion Non-current portion

31,251 (31,251) -

In 2011, Baconco Co., Ltd., a wholly owned subsidiary of the Company (“Baconco”), entered into a business co-operation agreement with Thoresen-Vinama Agencies Co., Ltd. (“Thoresen-Vinama”) to provide an advance of USD 2 million. This advance is repayable in 2 years. Baconco is entitled to income from the logistics business conducted by using the bonded warehouse that was built by Thoresen Vinama. As at 30 September 2013, this advance was fully refunded (2012: Baht 31.3 million). Separate financial statements 2013 2012

Consolidated financial statements 2013 2012

Long-term loans to related parties Subsidiaries Associates and joint ventures Other related parties

Less allowance for doubtful accounts Net

( in thousand Baht)

2,573 558,754 561,327 (558,754) 2,573

3,323 548,753 552,076 (548,753) 3,323

4,964,289 2,573 4,966,862 (2,731,526) 2,235,336

4,643,346 3,323 4,646,669 (2,731,526) 1,915,143

The Company As at 30 September 2013, the Company granted unsecured long-term loans in USD and Baht currency to subsidiaries totalling Baht 4,964.3 million (2012: Baht 4,643.3 million), which carry interest at fixed rates (2012: fixed rates) and are repayable every month. In addition, the Company granted unsecured long-term loans to an associate amounting to Baht 2.6 million (2012: Baht 3.3 million), which carry interest at Minimum Overdraft Rate (“MOR”) plus a certain margin (2012: MOR plus a certain margin).

THORESEN THAI AGENCIES PLC.

Annual Report 2013

110

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements Consolidated On 14 August 2009, Soleado entered into a loan facility agreement with Merton Investments NL BV (“Merton”) to provide a loan up to USD 15 million to Merton at a fixed interest rate. The maturity date of the loan is three years after the first drawdown date which was on 23 November 2009. Merton would on-lend such loan to SERI. Both loans were drawn down according to the progress of the coal mine construction done by SERI in the Philippines. The collateral for the Soleado loan includes pledge of shares held by Merton Group (Cyprus) Limited in Merton, pledge of shares held by Merton in SERI, pledge of Merton bank accounts, assignment of Merton's interest and benefit in SERI loan, and mortgage of real properties and chattels by SERI. On 25 August 2011, it was agreed by Merton and Soleado that Merton will assign its loan to SERI to Soleado and all principal and interest outstanding as of 23 August 2011 totalling USD 20.3 million would be converted into new equity in SERI. The debt conversion to equity is subject to approval of the Philippines Securities Exchange Commission. However, the Philippines Securities Exchange Commission has ruled that the share restructuring proposed by SERI, Soleado, and SERI’s shareholders must be changed due to pending legal motions about foreign share ownership restrictions for Philippine companies engaged in mining; thus, the first submission was refused. Given that all partners are unable to properly finance the operations of SERI, it is producing insufficient coal to reach break-even cash flow and is in the midst of restructuring. To be prudent, full provision has been taken against the outstanding loans, interest receivables, and advances for share subscription in SERI. Movements of long-term loans to related parties during the year that ended on 30 September 2013 are as follows: Consolidated financial statements

Separate financial statements

3,323 (750) 2,573 (2,573) -

1,915,143 300,000 (750) 20,943 2,235,336 (2,573) 2,232,763

(in thousand Baht)

Long-term loans to related parties

At 1 October 2012 Additional Repayments Unrealised gains on exchange rates At 30 September 2013 Less current portion of long-term loans Long-term loans - net of current portion Consolidated financial statements 2013 2012

(in thousand Baht)

Payables to related parties

Subsidiaries Associates and joint ventures

14,314 14,314

THORESEN THAI AGENCIES PLC.

Separate financial statements 2013 2012

11,632 11,632

208,783 208,783

97,053 97,053

Annual Report 2013 Thoresen Thai Agencies Public Company Limited and its Subsidiaries

111

Notes to financial statements

Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

( in thousand Baht)

Short-term loans from relate d parties Subsidiaries

5,916,004 5,916,004

5,660,905 5,660,905

The Company The short-term loans from subsidiaries can be called at any time and are unsecured. The loans bear interest at 2.15% and 3.0% per annum (2012: 2.15% and 3.0% per annum).

Cash and cash equivalents Consolidated financial statements 2013 2012 (restated) Cash on hand Deposits at banks Total

102,200 7,356,187 7,458,387

Separate financial statements 2013 2012

(in thousand Baht)

147,764 3,441,660 3,589,424

30 650,947 650,977

60 123,211 123,271

As at 30 September 2013, deposits at banks bear interest at the rates between 0% to 7% per annum (2012: 0% to 9% per annum).

Short-term investments Consolidated financial statements 2013 2012 Equity securities Debt securities Fixed term deposits Other investments Accumulated changes in fair value Total

58,815 1,297 443,000 17,945 521,057 (17,850) 503,207

Separate financial statements 2013 2012

(in thousand Baht)

390,737 1,297 383,318 17,715 793,067 9,853 802,920

58,815 1,297 17,945 78,057 (17,850) 60,207

83,543 1,297 17,715 102,555 (13,937) 88,618

During the year that ended on 30 September 2013, the Group and the Company sold short-term investments in equity securities of Baht 451.7 million and Baht 134.2 million, respectively and incurred gains on disposals of short-term investments in the consolidated and separate financial statements of Baht 32.3 million and Baht 8.2 million, respectively.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

112

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 8

Trade accounts receivable

Note Related parties Trade accounts receivable

Consolidated financial statements 2013 2012 (restated)

Separate financial statements 2013 2012

(in thousand Baht)

1,043,583

Net

2,959,794 188,354 3,148,148 (225,504) 2,922,644

2,661,998 227,327 2,889,325 (224,156) 2,665,169

Total

3,966,227

2,665,169

83,785

96,055

Other parties Trade accounts receivable Accrued income

Less allowance for doubtful accounts

Bad and doubtful debts expense

Aging analyses for trade accounts receivable were as follows: Consolidated financial statements 2013 2012 (restated) Related parties Within credit terms Overdue: 3 - 6 months

Separate financial statements 2013 2012

(in thousand Baht)

860,031

183,552 1,043,583

1,961,355

1,545,957

Net

711,063 133,506 18,114 135,756 2,959,794 (225,504) 2,734,290

950,980 23,639 9,628 131,794 2,661,998 (224,156) 2,437,842

Total

3,777,873

2,437,842

Other parties Within credit terms Overdue: Less than 3 months 3 - 6 months 6 - 12 months Over 12 months

Less allowance for doubtful accounts

Full allowance for doubtful accounts has been set up for all trade accounts receivable which management considers as non-collectible.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

113

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 9

Other accounts receivable

Note Advances for business expenses Private placement receivables from non-controlling shareholders of a subsidiary Other accounts receivables Advances to employees Accrued interest income

Less allowance for doubtful accounts

Net

Consolidated financial statements 2013 2012 (restated)

Separate financial statements 2013 2012

(in thousand Baht)

272,736

342,437

399,214 143,293 32,223 4,735 852,201

73,886 26,192 4,689 447,204

205 2,830 3,035

9 2,292 2,301

(10,744)

(20,710)

841,457

426,494

3,035

2,301

Deferred contract costs Consolidated financial statements

(in thousand Baht)

At 1 October 2012 Additions Amortisation on deferred contract costs Translation adjustments At 30 September 2013

277,459 63,158 (81,977) 2,562 261,202

On 30 September 2012, USD 9.3 million (equivalent to Baht 286.7 million) was paid by Subtech Ltd., a subsidiary of Mermaid Maritime Public Company Limited (“MMPLC”), to General Technology & Systems Co., Ltd (“Gentas”). The payment consists of the following elements: (a) USD 0.3 million (equivalent to Baht 9.2 million) as consideration for the acquisition of Gentas’ 30% equity interest in Subtech Saudi Arabia, (recorded in other accounts receivable) and (b) USD 9.0 million (equivalent to Baht 277.5 million) (recorded in deferred contract costs) as (i) compensation for loss of expected profits to Gentas, if not for the sale of its 30% equity interest in Subtech Saudi Arabia, pertaining to a recently awarded five-year inspection, repair, and maintenance contract with Saudi Aramco (“IRM Contract”) worth more than USD 530 million of revenues and (ii) as an advance payment for Gentas assistance to secure the IRM Contract. The USD 9.0 million is related to securing the IRM Contract that will be executed by a jointlycontrolled operation of MMPLC, Zamil Mermaid Offshore Services Co. (LLC) (“ZMOS”), and is recognised as deferred contract costs. The deferred contract costs will be amortised rateably over the period of execution of the contract, starting from the moment revenue is first recognised, which is approximately five years. The total IRM Contract revenue over five years is estimated to be approximately USD 530 million. The Group’s estimated revenue is between 60 to 70 percent of the IRM Contract revenue over this period. The IRM Contract was awarded to ZMOS on 25 October 2012. ZMOS is a newly established entity that the Group controls jointly with Zamil Offshore Services Co. (“Zamil”). ZMOS will bill Saudi Aramco at agreed rates in the IRM Contract, and the two partners will bill ZMOS for the cost incurred in executing the IRM contract.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

114

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements The joint arrangement between Zamil and the Group is recognised as a jointly-controlled operation in which the participating parties recognise and account for their own assets and liabilities, costs, and revenues related to their participation in the arrangement.

Inventories Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

(in thousand Baht)

Inventories Tools and supplies Total Less allowance for lower net realisable value of inventories

1,776,770 40,161 1,816,931

1,799,329 40,084 1,839,413

(480,721)

(237,626)

Net

1,336,210

1,601,787

As at 30 September 2013, inventories with carrying amount of Baht 233.5 million and VND 218,000 million, or Baht 327 million, were pledged with banks as security for a loan and loan facility, respectively (2012: Baht 347.0 million and VND 202,167 million, or Baht 303 million, respectively). However, as at 30 September 2013, the subsidiary had repaid the loan but has not redeemed its inventories of Baht 233.5 million.

Investments in subsidiaries Investments in subsidiaries as at 30 September 2013 and 2012 comprise investments in the following companies: Name of subsidiaries Holdings - Soleado Holdings Pte. Ltd. (“Soleado”) With subsidiaries as follows: - Atlantis Offshore Construction Pte. Ltd. - Baconco Co., Ltd. With associates as follows: - Merton Group (Cyprus) Limited - Baria Serece With joint ventures as follows: - Petrolift Inc. - Qing Mei Pte. Ltd. - Athene Holdings Ltd. - PM Thoresen Asia Holdings Ltd. (“PM Thoresen”) Transport - Thoresen & Company (Bangkok) Limited - Thor Dynamic Shipping Co., Ltd. * - Thor Endeavour Shipping Co., Ltd. * - Thor Energy Shipping Co., Ltd. * - Thor Enterprise Shipping Co., Ltd. * - Thor Harmony Shipping Co., Ltd. *

Nature of business

% Ownership interest 2013 2012

Holding company

Singapore

100.0

” Fertiliser production

Singapore Vietnam

100.0 100.0

Coal mining Port operations

Philippines Vietnam

Singapore Thailand Thailand

99.9 99.9

99.9 -

Thailand Thailand

99.9

99.9 99.9

Thailand Thailand Thailand Thailand

99.9 99.9 99.9 99.9

Maritime transportation services Coal mining Holding company ”

Ship management International maritime transportation ” ” ” ”

THORESEN THAI AGENCIES PLC.

Country of incorporation

Philippines

Annual Report 2013

115

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Name of subsidiaries Transport (continued) - Thor Integrity Shipping Co., Ltd. * - Thor Jupiter Shipping Co., Ltd.* - Thor Wind Shipping Co., Ltd. * - Thor Wave Shipping Co., Ltd. * - Thoresen Shipping Singapore Pte. Ltd. With subsidiaries as follows: - Thor Friendship Shipping Pte. Ltd. - Thor Fortune Shipping Pte. Ltd. - Thor Horizon Shipping Pte. Ltd. - Thoresen Shipping Denmark APS - Thoresen & Company (Bangkok) Limited - Thoresen Chartering (HK) Ltd.* - Thoresen Shipping Germany GmbH - Thor Orchid Shipping Co., Ltd.* - Thor Mercury Shipping Co., Ltd.* - Thor Mariner Shipping Co., Ltd.* - Thor Merchant Shipping Co., Ltd.* - Thor Navigator Shipping Co., Ltd.* - Thor Captain Shipping Co., Ltd. * - Hermes Shipping Co., Ltd.* - Thor Pilot Shipping Co., Ltd. * - Thor Master Shipping Co., Ltd.* - Thor Commander Shipping Co., Ltd.* - Thor Transporter Shipping Co., Ltd. * - Thor Nereus Shipping Co., Ltd. * - Herakles Shipping Co., Ltd.** - Heron Shipping Co., Ltd.** - Thor Nectar Shipping Co., Ltd. * - Thor Jasmine Shipping Co., Ltd.* - Thor Champion Shipping Co., Ltd. * - Thor Star Shipping Co., Ltd.* - Thor Skipper Shipping Co., Ltd.* - Thor Sailor Shipping Co., Ltd.* - Thor Sun Shipping Co., Ltd. * - Thor Sky Shipping Co., Ltd. * - Thor Spirit Shipping Co., Ltd.* - Thor Sea Shipping Co., Ltd.* - Thor Lotus Shipping Co., Ltd. * - Thor Trader Shipping Co., Ltd.* - Thor Traveller Shipping Co., Ltd.* - Thor Venture Shipping Co., Ltd.* - Thor Triumph Shipping Co., Ltd.* - Thor Guardian Shipping Co., Ltd.* - Thor Confidence Shipping Co., Ltd. * - Thor Nautica Shipping Co., Ltd. * - Thor Neptune Shipping Co., Ltd. * - Thor Nexus Shipping Co., Ltd. * - Thor Tribute Shipping Co., Ltd.* - Thor Alliance Shipping Co., Ltd.* - Thor Nautilus Shipping Co., Ltd. * - Thor Transit Shipping Co., Ltd. *

Nature of business

Country of incorporation

International maritime transportation ” ” ” ”

Thailand

99.9

Thailand Thailand Thailand Singapore

99.9 99.9 99.9 100.0

Singapore Singapore Singapore Denmark

100.0 100.0 100.0 100.0

100.0 100.0 100.0 -

Thailand Hong Kong

99.9 99.9

99.9

Germany Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand Thailand

100.0 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9 99.9

” ” ” Commercial dry bulk shipping activities Ship management International maritime transportation ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ” ”

% Ownership interest 2013 2012

THORESEN THAI AGENCIES PLC.

Annual Report 2013

116

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Name of subsidiaries Transport (continued) - PT Perusahaan Pelayaran Equinox

- Thoresen Chartering (PTE) Ltd.* - Thoresen Service Center Ltd.* - Asia Coating Services Ltd.* - Thoresen Shipping FZE With an associate as follows: - Sharjah Ports Services LLC Energy - Mermaid Maritime Public Company Limited (“MMPLC”) With subsidiaries as follows: - Mermaid Offshore Services Ltd. (“MOS”) With subsidiaries as follows: - Nemo Subsea AS*** - Nemo Subsea IS*** - Seascape Surveys (Thailand) Ltd.

- Seascape Surveys Pte. Ltd. With a subsidiary as follows: - PT Seascape Surveys Indonesia - Subtech Ltd. With one associate and one subsidiary as follows: - Subtech Qatar Diving and Marine Services LLC**** - Subtech Saudi Arabia Limited - Mermaid Offshore Services Pty. Ltd.*** - Mermaid Offshore Services Pte. Ltd. - Mermaid Drilling Ltd.

With subsidiaries as follows: - MTR-1 Ltd. - MTR-2 Ltd. - Mermaid Drilling (Malaysia) Sdn. Bhd. - MTR-1 (Singapore) Pte. Ltd. - MTR-2 (Singapore) Pte. Ltd. - Mermaid Drilling (Singapore) Pte. Ltd.

Nature of business

Country of incorporation

Maritime transportation services Ship brokerage Service provider Coating services Ship agency

Indonesia

49.0

Singapore Thailand Thailand UAE

100.0 99.9 99.9 100.0

Port operations

UAE

Offshore services investments

Thailand

57.1

Turn-key diving ROV and NDT services to offshore industries

Thailand

100.0

Vessel owner ” Test and explore environmental impact of petroleum exploration and telecommunication ”

Norway Norway Thailand

100.0

100.0 97.0 100.0

Singapore

100.0

Indonesia Seychelles

95.0 100.0

Qatar

49.0

” Turn-key diving ROV and NDT services to offshore industries ” Production and exploration drilling services and support to offshore industries

Saudi Arabia Australia

70.0 -

70.0 100.0

Singapore Thailand

100.0 95.0

Drilling services ” ” ” ” Production and exploration drilling services and support to offshore industries

Thailand Thailand Malaysia Singapore Singapore Singapore

100.0 100.0 100.0 100.0 100.0 100.0

” Diving and subsea contractor

Diving Services

THORESEN THAI AGENCIES PLC.

% Ownership interest 2013 2012

Annual Report 2013

117

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Name of subsidiaries Energy (continued) With a subsidiary as follows: - MTR-3 (Singapore) Pte. Ltd.

- Mermaid Training and Technical Services Ltd.*** With an associate as follows: - Asia Offshore Drilling Limited With subsidiaries as follows: - Asia Offshore Rig 1 Limited - Asia Offshore Rig 2 Limited - Asia Offshore Rig 3 Limited With a joint venture as follows: - Zamil Mermaid Offshore Services (LLC)

Co.

Infrastructure - Chidlom Marine Services & Supplies Ltd. - GAC Thoresen Logistics Ltd. - Unique Mining Services Public Company Limited (“UMS”) (invested by Athene Holdings Ltd.) With subsidiaries as follows: - UMS Logistics Management Co., Ltd. - UMS Lighter Co., Ltd. - UMS Transport Co., Ltd.* - UMS Port Services Co., Ltd. - Baconco Co., Ltd. (invested by Soleado)

* ** *** ****

Nature of business

Country of incorporation

% Ownership interest 2013 2012

Production and exploration drilling services and support to offshore industries Sub-sea engineering training and examination services

Singapore

100.0

Thailand

100.0

Drilling services

Bermuda

33.8

” ” ”

Sub-sea services to offshore industries

Saudi Arabia

40.0

Supply cargo lashing materials Warehousing Sale of coal

Thailand

99.9

Thailand Thailand

51.0 88.7

Logistics management Boat conveyance Road transport Port service Fertiliser production

Thailand Thailand Thailand Thailand Vietnam

99.9 99.9 99.9 99.9 100.0

Ceased operation as of 30 September 2013. In the process of liquidation. Was deregistered. Existence of significant influence.

The movements of investments in subsidiaries during the years that ended on 30 September 2013 and 2012 are as follows: Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

(in thousand Baht )

At 1 October Additional investments Disposals Impairment charges, net At 30 September

18,947,210 2,766,875 (36,356) (412,073) 21,265,656

15,723,960 4,060,122 (836,872) 18,947,210

THORESEN THAI AGENCIES PLC.

Direct subsidiaries Soleado Holdings Pte. Ltd. Athene Holdings Ltd. PM Thoresen Asia Holdings Ltd. Thoresen & Company (Bangkok) Limited Thor Dynamic Shipping Co., Ltd. Thor Endeavour Shipping Co., Ltd. Thor Energy Shipping Co., Ltd. Thor Enterprise Shipping Co., Ltd. Thor Harmony Shipping Co., Ltd. Thor Integrity Shipping Co., Ltd. Thor Jupiter Shipping Co., Ltd. Thor Wind Shipping Co., Ltd. Thor Wave Shipping Co., Ltd. Thoresen Shipping Singapore Pte. Ltd. Thoresen Chartering (HK) Ltd. Thoresen Shipping Germany GmbH Thor Orchid Shipping Co., Ltd. Thor Mercury Shipping Co., Ltd. Thor Mariner Shipping Co., Ltd. Thor Merchant Shipping Co., Ltd. Thor Navigator Shipping Co., Ltd. Thor Captain Shipping Co., Ltd. Hermes Shipping Co., Ltd. Thor Pilot Shipping Co., Ltd.

Name of subsidiaries

3,072 100 1 125 360 1,100 1,000 630 350 385 97 200 200 7,123 3 1 47 60 35 20 99 153 27 80

3,072 100 125 360 1,100 1,000 630 350 385 97 200 200 6,610 3 1 47 60 35 20 99 153 27 80

Paid-up capital 2013 2012

THORESEN THAI AGENCIES PLC.

3,092 100 1 360 1,100 1,000 630 350 385 97 200 200 7,123 3 1 47 60 39 20 99 153 27 80

2013

2012

3,092 100 166 360 1,100 1,000 630 350 385 97 200 200 6,610 3 1 47 60 39 20 99 153 27 80

Cost

(100) (48) (83) (26) (141) (498) (1) (15) -

(100) (130) (76) (108) (43) (147) (1) (17) -

(in million Baht)

Impairment 2013 2012

3,092 1 360 1,052 917 604 209 385 97 200 200 6,625 3 47 60 39 20 84 153 27 80

3,092 36 360 1,024 892 587 203 385 97 200 200 6,610 3 47 60 39 20 82 153 27 80

At cost - net 2013 2012

Separate financial statements

100 150 -

22 346 40 404 3 44 9

Dividend income 2013 2012

Investments in directly owned subsidiaries of the Company as at 30 September 2013 and 2012, and dividend income from those investments for the years then ended, were as follows:

Notes to financial statements

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Annual Report 2013

118

Thor Master Shipping Co., Ltd. Thor Commander Shipping Co., Ltd. Thor Transporter Shipping Co., Ltd. Thor Nereus Shipping Co., Ltd. Herakles Shipping Co., Ltd. Heron Shipping Co., Ltd. Thor Nectar Shipping Co., Ltd. Thor Jasmine Shipping Co., Ltd. Thor Champion Shipping Co., Ltd. Thor Star Shipping Co., Ltd. Thor Skipper Shipping Co., Ltd. Thor Sailor Shipping Co., Ltd. Thor Sun Shipping Co., Ltd. Thor Sky Shipping Co., Ltd. Thor Spirit Shipping Co., Ltd. Thor Sea Shipping Co., Ltd. Thor Lotus Shipping Co., Ltd. Thor Trader Shipping Co., Ltd. Thor Traveller Shipping Co., Ltd. Thor Venture Shipping Co., Ltd. Thor Triumph Shipping Co., Ltd. Thor Guardian Shipping Co., Ltd. Thor Confidence Shipping Co., Ltd. Thor Nautica Shipping Co., Ltd. Thor Neptune Shipping Co., Ltd. Thor Nexus Shipping Co., Ltd. Thor Tribute Shipping Co., Ltd. Thor Alliance Shipping Co., Ltd.

Name of subsidiaries

Notes to financial statements

188 115 200 213 2 1 254 70 75 30 30 30 40 40 40 40 63 45 45 75 60 75 50 75 138 186 117 106

Paid-up capital 2013 2012

THORESEN THAI AGENCIES PLC.

188 115 200 213 1 1 254 70 75 30 30 30 40 40 40 40 64 45 45 75 60 75 50 75 138 186 117 106

2013

Cost

188 115 200 213 1 1 254 70 75 30 30 30 40 40 40 40 64 45 45 75 60 75 50 75 138 186 117 106

2012 (96) (1) (15) (16) (29) -

(99) (1) (21) (17) (31) -

(in million Baht)

Impairment 2013 2012 188 115 200 117 1 239 70 75 30 30 30 40 40 40 40 64 45 45 75 60 75 50 59 138 157 117 106

188 115 200 114 1 233 70 75 30 30 30 40 40 40 40 64 45 45 75 60 75 50 58 138 155 117 106

At cost - net 2013 2012

Separate financial statements

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

50 -

3 40 32 52 25 3 3 6 61 -

Dividend income 2013 2012

Annual Report 2013

119

THORESEN THAI AGENCIES PLC.

Thor Nautilus Shipping Co., Ltd. Thor Transit Shipping Co., Ltd. PT Perusahaan Pelayaran Equinox Thoresen Chartering (Pte) Ltd. Thoresen Service Center Ltd. Asia Coating Services Ltd. Thoresen Shipping FZE Mermaid Maritime Public Company Limited Chidlom Marine Services & Supplies Ltd. GAC Thoresen Logistics Ltd.

Name of subsidiaries

Notes to financial statements

50 100 99 2 35 80 7 1,354 70 75 19,543

50 100 99 2 35 80 7 785 70 75 18,460

Paid-up capital 2013 2012 50 100 112 2 35 80 7 4,397 70 38 22,461

2013

2012

50 100 112 2 35 80 7 2,145 70 38 19,861

Cost

(36) (53) (35) (2) (1,195)

(1) (37) (65) (16) (4) (914)

(in million Baht)

Impairment 2013 2012 50 64 59 2 78 7 4,397 70 38 21,266

49 63 47 2 19 76 7 2,145 70 38 18,947

At cost - net 2013 2012

Separate financial statements

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

8 308

1,093

Dividend income 2013 2012

Annual Report 2013

120

Annual Report 2013

121

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Significant movements of investments in subsidiaries of the Company during the year that ended on 30 September 2013 were as follows:

Current year additions and disposal On 20 March 2013, the Board of Directors of MMPLC approved a rights issue and private placement to raise gross proceeds of approximately SGD 176.1 million. The private placement would follow the rights issue for the remaining unsubscribed shares of the rights issue. On 19 September 2013, MMPLC announced the issue and listing of 569,692,359 rights shares at SGD 0.28 per share with gross proceeds to the company amounting to SGD 159,513,860. On 30 September 2013, MMPLC announced the details of the private placement of 58,105,821 shares at SGD 0.28 resulting in gross proceeds of SGD 16,269,630. The private placement was completed on 4 October 2013. After the rights issue and private placement, the Group owns 57.14% of the share capital of MMPLC which is equal to its equity interest prior to the rights issue and private placement. As at 30 September 2013, the Group recognised a receivable from non-controlling shareholders in MMPLC and a corresponding increase in non controlling interests in MMPLC amounting to SGD 16,269,630, or Baht 399.2 million. On 27 May 2013, the Company subscribed for 21,525,400 additional shares at a price of SGD 1.0 per share in Thoresen Shipping Singapore Pte. Ltd. (“TSS”) for total consideration of USD 17.0 million, or Baht 513.4 million. On 7 June 2013, the Company established a new subsidiary, PM Thoresen Asia Holdings Ltd. (“PM Thoresen”), with registered and paid-up share capital of Baht 1.0 million. On 4 December 2012, the Company entered into a Share Sale and Purchase Agreement with TSS to sell and transfer all shares of Thoresen & Company (Bangkok) Limited from the Company to TSS. Details of the disposal are as follows: Separate financial statements Sales consideration Net book value of investments in subsidiary Total - gains on disposal of investment in a subsidiary

(in thousand Baht)

36,500 (36,356) 144

Impairment charge During the year that ended on 30 September 2013, an impairment loss of Baht 498.7 million was recognised for the Company’s investment in TSS, because several of TSS’s operating assets were impaired. The Company’s management assessed the impairment of the investment in TSS for the year 2013 based on the assumptions below:

  

The recoverable amount of TSS was based on the higher of the value-in-use and the fairvalue-less-cost-to-sell of TSS. The value-in-use was determined using the income approach based on cash flow projections of the subsidiary for the currently available vessels, six new planned vessels, as well as the charter-in vessels. The weighted average cost of capital (“WACC”) of 8% was used as a discount factor. The cost of the equity component of the WACC was calculated using the capital asset pricing model.

The impairment charges for investments were partly offset by a reversal of previously recognised impairment charges for subsidiaries, which ceased their operations but which earned income from investing activities.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

122

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements Subsidiaries - TSS During the year that ended on 30 September 2013, TSS established a new subsidiary, Thoresen Shipping Denmark APS, with registered and paid-up share capital of DKK 80,000.

Subsidiaries - Soleado On 4 September 2013, Soleado subscribed for 136,472,376 rights shares at a price of SGD 0.28 per rights share in MMPLC for total consideration of SGD 38.2 million, or Baht 964.9 million. On 26 September 2013, Soleado subsequently sold 89,917,033 MMPLCâ&#x20AC;&#x2122;s shares to the Company, for a total consideration of SGD 27.0 million, or Baht 681.1 million, for the purpose of internal reorganization.

Investments in associates Investments in associates as at 30 September 2013 and 2012 comprise investments in the following companies:

THORESEN THAI AGENCIES PLC.

Fearnleys (Thailand) Ltd. Thoresen Shipping and Logistics Ltd.

Name of associates

Fearnleys (Thailand) Ltd. Thoresen Shipping and Logistics Ltd. Sharjah Ports Services LLC (invested by Thoresen Shipping FZE) Asia Offshore Drilling Limited (invested by MMPLC) Merton Group (Cyprus) Ltd. (invested by Soleado) Baria Serece (invested by Soleado)

Name of associates

Notes to financial statements

1,904 216 334 2,517

2,964 235 334 3,596

59 35

18 24 42

2012

168 383 3,852

3,149

Cost

18 24 42

2013

2012 18 24

Cost

18 24

2013

(120) (120)

(in million Baht)

48 383 3,732

3,149

59 35

161 370 2,600

1,915

61 33

(in million Baht)

18 24 42

Separate financial statements Impairment At cost - net 2013 2012 2013 2012

161 370 2,600

1,915

61 33

Consolidated financial statements Equity Impairment At equity - net 2013 2012 2013 2012 2013 2012

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

11 28

9 34

15 10

7 7

15 10 25

Dividend income 2013 2012

Annual Report 2013

123

THORESEN THAI AGENCIES PLC.

Annual Report 2013

124

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements The movements of investments in associates during the years that ended on 30 September 2013 and 2012 are as follows:

Note

Consolidated financial statements 2013 2012 (restated)

Separate financial statements 2013 2012

(in thousand Baht)

At 1 October Additional investments Disposal investments Changes of investments from associates to joint ventures Dividends received Share of profits in associates Impairment charges Translation adjustments At 30 September

2,599,551 1,079,041 -

3,758,851 2,663 (589)

42,368 -

53,581 -

(28,235) 159,092 (120,245) 42,999 3,732,203

(1,105,376) (33,917) 12,087 (34,168) 2,599,551

42,368

(11,213) 42,368

Significant additional investments of the Group during the year that ended on 30 September 2013 are as follows:

Subsidiaries - Soleado On 7 May 2013, Soleado proportionately subscribed for 4,352 new ordinary shares of Merton Group (Cyprus) Limited at USD 145 each for a total investment of USD 631,040, or Baht 18.6 million. The Group’s ownership in Merton Group (Cyprus) Limited increased from 24.31% to 26.15% after the share capital increase, as some shareholders did not subscribe for or subscribed for shares less than their proportion.

Subsidiaries - MMPLC In March 2013, MMPLC subscribed for 6,756,225 additional shares at a price of USD 5.00 per share in Asia Offshore Drilling Limited (“AOD”), for a total consideration of USD 33.8 million, or Baht 1,060.4 million. After the subscription, MMPLC’s total ownership in AOD increased to 20,256,425 shares, representing 33.8% ownership of all outstanding shares. On 30 April 2013, the Board of Directors of AOD, an associate, approved to delist AOD’s shares from the Oslo Stock Exchange, which occurred on 31 May 2013. Impairment charge During the year that ended on 30 September 2013, impairment losses of Baht 120.2 million were recognised for investments in Merton Group (Cyprus) Ltd. to reflect their expected net recoverable amounts to the Group.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

125

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

The Group’s share of the result of its principal associates, and its share of the assets including goodwill and liabilities are as follows: 2013

Name

Assets Baht’000

Thoresen Shipping and Logistics Ltd. Merton Group (Cyprus) Ltd. Baria Serece Asia Offshore Drilling Limited

151,748 404,173 1,098,287 22,747,899

Liabilities Revenues Baht’000 Baht’000

79,352 18,199 234,068 13,986,817

169,633 8,289 548,561 1,076,329

Profits (losses) Baht’000

20,908 (64,622) 122,529 399,284

% Profit (loss) Interest sharing held Baht’000

49.0 26.2 20.0 33.8

10,245 (16,493) 24,506 134,831 153,089 6,003

Add Others

159,092

Name Thoresen Shipping and Logistics Ltd. Merton Group (Cyprus) Ltd. Baria Serece Asia Offshore Drilling Limited

2012 (restated) Profits (losses) Assets Liabilities Revenues Baht’000 Baht’000 Baht’000 Baht’000

151,474 399,666 1,121,591 5,332,274

84,986 26,908 279,408 178,733

124,351 71,804 520,188 -

12,594 (80,218) 144,300 (28,632)

% Interest held

49.0 24.3 20.0 33.8

Profit (loss) sharing Baht’000

6,171 (19,501) 28,860 (9,663) 5,867 6,220

Add Others

12,087

Investments in joint ventures Investments in joint ventures as at 30 September 2013 and 2012 comprise investments in the following companies:

THORESEN THAI AGENCIES PLC.

Gulf Agency Company (Thailand) Ltd. Thoresen (Indochina) S.A.

Name of joint ventures

Thoresen (Indochina) S.A. Gulf Agency Company (Thailand) Ltd. Petrolift Inc.(invested by Soleado) Qing Mei Pte. Ltd. (invested by Soleado) Zamil Mermaid Offshore Services Co. (LLC) (invested by MMPLC)

Name of joint ventures

Notes to financial statements

9 11 930 91 1,041

11 930 128 7 1,085

2012 9

2013

Cost

11 9 20

2013

Cost

1,306

116

11 1,075

104

11 9 20

2012

1,256

13 1,076

1,306

116

11 1,075

104

11 9 20

(in million Baht )

1,256

13 1,076

11 9 20

Separate financial statements Impairment At cost - net 2013 2012 2013 2012

(in million Baht)

Consolidated financial statements Equity Impairment At equity - net 2013 2012 2013 2012 2013 2012

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Dividend income 2013 2012

Annual Report 2013

126

Annual Report 2013

127

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

The movements of investments in joint ventures during the years that ended on 30 September 2013 and 2012 are as follows: Consolidated financial statements 2013 2012

Note At 1 October Additional investments Change of investments from associates to joint ventures Dividends received Share of profits in joint ventures Impairment charges Translation adjustments At 30 September

1,256,472 43,187

(70,733) 95,570 (18,033) 1,306,463

Separate financial statements 2013 2012

(in thousand Baht) 63,893 27,892

19,984 -

8,771 -

1,105,376 (58,626) 117,339 598 1,256,472

(203) 19,781

11,213 19,984

Significant additional investments of the Group during the year that ended on 30 September 2013 are as follows:

Subsidiaries - Soleado During the year, Soleado, together with Merton Group (Cyprus) Limited, an associate, and Britmar (Asia) Pte. Ltd., a business partner, subscribed for an additional 1,200,000 ordinary shares of Qing Mei at a total purchase price of USD 1,200,000, or Baht 36.6 million each. The Groupâ&#x20AC;&#x2122;s ownership in Qing Mei remains the same at 33.33%.

Subsidiaries - MMPLC On 1 October 2012, MMPLC subscribed for 800 shares, equivalent to 40.0% of the total shares in Zamil Mermaid Offshore Services Co. (LLC), a new jointly-controlled operation, for total consideration of Baht 6.6 million (Saudi Riyal 0.8 million). The joint arrangements between the participating parties require, among other matters, consent from both partners equally for actions and decisions of the jointly-controlled operation. The Groupâ&#x20AC;&#x2122;s share of the result of its principal joint ventures, all of which are unlisted, and its share of the assets including goodwill and liabilities are as follows:

THORESEN THAI AGENCIES PLC.

Annual Report 2013 Thoresen Thai

128

Agencies Public Company Limited and its Subsidiaries

Notes to financial statements

2013

Name Thoresen (Indochina) S.A. Petrolift Inc.

Assets Liabilities Revenues Baht’000 Baht’000 Baht’000 210,611 3,776,373

10,877 1,851,611

Profits Baht’000

% Interest held

Profit (loss) sharing Baht’000

35,601 229,889

50.0 40.0

17,801 91,955

335,970 1,093,846

109,756 (14,186)

Add Others

95,570 2012

Name Thoresen (Indochina) S.A. Petrolift Inc.

Assets Liabilities Revenues Baht’000 Baht’000 Baht’000 237,627 4,008,696

77,019 1,994,136

511,124 1,063,764

Profits Baht’000

% Interest held

Profit (loss) sharing Baht’000

53,500 267,745

50.0 40.0

26,750 107,098 133,848 (16,509)

Add Others

117,339

Goodwill The movements of goodwill during the years that ended on 30 September 2013 and 2012 are as follows: Consolidated financial statements 2013 2012 (restated)

(in thousand Baht)

Opening net book value Impairment charges Translation adjustments Closing net book value

1,478,996 (516,031) 5,696 968,661

3,801,094 (2,318,666) (3,432) 1,478,996

Goodwill is allocated to the Group’s cash-generating units (“CGU”) identified according to business segment. A segment-level summary of the goodwill allocation is presented as follows: Energy business Goodwill allocation Less Impairment charge Net

968,661 968,661

THORESEN THAI AGENCIES PLC.

Infrastructure business

(in thousand Baht) 2,834,697 (2,834,697) -

Total 3,803,358 (2,834,697) 968,661

Annual Report 2013

129

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

During the year, UMS and its subsidiaries (“the UMS Group”) incurred a net loss of Baht 375.5 million and as of 30 September 2013, the UMS Group’s current liabilities exceeded current assets by Baht 555.2 million. Moreover, the UMS Group had breached certain loan covenants according to the requirements in loan agreements with financial institutions. These factors may cast doubt about the recoverable amounts from the UMS Group. As a result, the Company’s Board of Directors has considered setting up additional impairment loss against goodwill and customer relationship (note 17) of Baht 516.0 million and Baht 79.8 million, respectively and recognised them in the statement of income. The calculation of value-in-use was performed using income approach which is based on projected free cash flows covering the next five years according to UMS’ strategic plan approved by its Board of Directors. Cash flows beyond the five-year period are extrapolated using the estimated nil growth rate and a discount rate of 15% which is UMS’s weighted average cost of capital (2012: 3.6% and 14%, respectively).

THORESEN THAI AGENCIES PLC.

At 30 September 2013

in exchange rates

Effect of movement

606,808

471

(2,534)

Transfer

Disposals and write-offs

608,871

(284)

Additions

1 October 2012 (restated)

At 30 September 2012 and

in exchange rates

Effect of movement

(4,724)

Transfers

Disposals and write-offs

613,879

Additions

At 1 October 2011 (restated)

Land

1,397,479

11,271

(6,427)

133,302

1,184

1,258,149

(1,528)

69,742

23,275

1,166,660

198,821

(1,093)

(3,136)

1,284

9,229

192,537

4,988

(944)

7,625

1,094

179,774

26,687,688

695,088

(1,975,491)

2,360,745

507,951

25,099,395

(186,527)

(48,726)

607,154

24,727,494

and tender rigs

supply vessels,

Building improvements

and

factories

support vessels,

Ocean vessels,

Buildings

Property, plant, and equipment

1,706,007

35,019

(92,022)

33,277

781,295

948,438

(54,060)

(76,497)

227,212

851,783

and equipment

3,917,154

43,280

(361,236)

611,278

175,829

3,448,003

(26,130)

(33,038)

117,544

96,984

3,292,643

(in thousand Baht)

Dry-docking

machinery,

fixtures,

Furniture,

141,305

3,406

(1,990)

1,511

19,511

118,867

(510)

(12,864)

16,615

115,626

vehicles

Motor

Consolidated financial statements

Motor

27,575

789

24,601

2,185

178

(202)

2,209

launches

(1)

140,374

412

139,907

385

950

138,573

Barges

206,302

210

(438,243)

(3,141,397)

906,346

2,879,386

(34,216)

(376,744)

(200,253)

679,769

2,810,830

in progress

Construction

35,029,513

788,853

(2,881,079)

2,426,001

34,695,738

(298,090)

(553,739)

(4,957)

1,653,053

33,899,471

Total

130

Cost

Notes to financial statements

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Annual Report 2013

in exchange rates

Impairment charges, net

Disposals and write-offs

At 30 September 2013

1 October 2012 (restated)

At 30 September 2012 and

At 1 October 2011 (restated)

Net book value

606,808

608,871

610,715

in exchange rates

At 30 September 2013

Effect of movement

1 October 2012 (restated)

Depreciation charge for the year

At 30 September 2012 and

Disposals and write-offs

Effect of movement

(3,164)

3,164

Transfer

Impairment charges, net

Depreciation charge for the year

At 1 October 2011 (restated)

charges

Depreciation and impairment

Land

Notes to financial statements

896,996

822,402

791,802

500,483

2,302

(3,738)

66,172

435,747

(668)

61,557

374,858

62,131

68,783

72,667

136,690

(1,145)

(3,136)

17,217

123,754

(508)

(367)

17,522

107,107

16,182,969

18,217,693

18,815,968

10,504,719

230,418

(1,842,550)

4,210,943

1,024,206

6,881,702

24,738

(48,673)

994,111

5,911,526

and tender rigs

supply vessels,

Building improvements

and

factories

support vessels,

Buildings

Ocean vessels,

868,888

317,165

355,304

837,119

14,810

(79,185)

270,221

631,273

(53,235)

(76,497)

264,526

496,479

and equipment

1,945,144

1,681,189

1,843,471

1,972,010

19,312

(161,135)

(8,102)

355,121

1,766,814

(12,022)

(25,200)

(2,515)

357,379

1,449,172

(in thousand Baht)

Dry-docking

machinery,

fixtures,

Furniture,

48,776

43,046

37,103

92,529

337

1,260

15,111

75,821

(425)

(12,466)

10,189

78,523

vehicles

Motor

Consolidated financial statements

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

Motor

22,099

767

1,217

5,476

145

3,913

1,418

(16)

442

992

launches

(1)

94,424

100,670

99,893

45,950

410

3,582

2,721

39,237

346

212

38,680

Barges

206,302

2,123,951

2,579,456

(8,679)

(746,756)

755,435

(6,765)

530,826

231,374

in progress

Construction

20,934,537

23,984,537

25,207,596

14,094,976

257,910

(2,088,484)

3,459,667

1,754,682

10,711,201

(48,902)

(163,203)

(2,169)

527,662

1,705,938

8,691,875

Total

Annual Report 2013

131

THORESEN THAI AGENCIES PLC.

Annual Report 2013

132

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Land

Buildings

Separate financial statements Furniture, fixtures, Building and improvements equipment

Motor vehicles

Total

(in thousand Baht) Cost At 1 October 2011 Additions Disposals At 30 September 2012 and 1 October 2012 Additions At 30 September 2013

82,847 -

201,846 -

90,547 -

66,382 1,313 -

3,280 (474)

444,902 1,313 (474)

82,847 17,100 99,947

201,846 1,900 203,746

90,547 1,416 91,963

67,695 1,491 69,186

2,806 2,806

445,741 21,907 467,648

110,755 9,656 -

60,583 6,893 -

38,907 12,183 -

2,378 611 (409)

212,623 29,343 (409)

120,411 9,303 129,714

67,476 6,412 73,888

51,090 11,626 62,716

2,580 226 2,806

241,557 27,567 269,124

At 1 October 2011

82,847

91,091

29,964

27,475

902

232,279

At 30 September 2012 and 1 October 2012

82,847

81,435

23,071

16,605

226

204,184

At 30 September 2013

99,947

74,032

18,075

6,470

198,524

Depreciation At 1 October 2011 Depreciation charge for the year Disposals At 30 September 2012 and 1 October 2012 Depreciation charge for the year At 30 September 2013

Net book value

Significant movement of property, plant, and equipment of the Group during the year that ended on 30 September 2013 is as follows:

Significant additions, disposals, and write-offs: 

Significant additions during the year that ended on 30 September 2013 were i) final instalment payment for new build ocean vessels, ii) payments for dry-docking of vessels and drilling rigs, iii) payments for a second-hand ocean vessel, iv) payments for support vessels and rig equipment, and progress payments for new equipment under construction and installation, and v) payments for warehouse construction.



Significant disposals and write-offs during the year that ended on 30 September 2013 were i) disposals of an ocean vessel and a remotely operated vehicle and ii) termination of vessel main engine contract.

Impairment evaluation By a result of the prolonged downturn and resultant low freight rates in the dry bulk industry, this has negatively affected dry bulk shipping performance. During the year that ended on 30 September 2013, the Company’s subsidiaries recognised an impairment charge of USD 123.5 million (2012: USD 10.7 million) on certain of their vessels as a result of lower recoverable amounts of vessels.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

133

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

The recoverable amounts of the vessels were determined based on higher of value-in-use and fair value less costs to sell. The fair value was determined based on the vessel valuation report obtained from an accredited ship broker. The value-in-use was determined using an income approach based on cash flow projection of each vessel assisted by an independent appraiser. Management determined the budgeted cash flows based on past performance and its expectations of market development. Cash inflows are based on existing charter contracts and management’s best estimate of the average charter rates over the next 5 years using third party advisors and extrapolated by using nil growth rate. Cash outflows are estimated i) by using the most recently approved budget and extrapolated by using nil growth rate for the operating expenses and ii) by using the approved dry-docking plan for capital expenditure based on the historical experiences. A weighted average cost of capital (“WACC”) of 8.0% (2012: 7.5%) was used as the discount rate in the value in use calculation. The cost of the equity component was derived using the capital asset pricing model. Property, plant, and equipment as of 30 September 2013 and 2012 used as collateral for loan facilities can be summarised as follows: 

Two ocean vessels were discharged from the mortgage with financial institutions as collateral for a loan facility (2012: at a total value of USD 7.5 million).



Ten ocean vessels are mortgaged with financial institutions as collateral for their loans at a total value of USD 104.0 million (2012: USD 95.0 million).



Two subsea vessels and a tender rig were mortgaged with various banks as collateral for bank overdraft and loan facilities for a total value of Baht 1,129.5 million and USD 110.0 million

(2012: Baht 1,359.5 million and USD 110.0 million).



Twelve barges are mortgaged with a bank as collateral for its bank overdrafts and long-term loans for a total value of Baht 125.0 million (2012: Baht 125.0 million).



Certain land and buildings of the Group are mortgaged with various banks as collateral for loan facilities, bank overdraft facilities, and letters of guarantee for a total value of Baht 900.0 million and VND 117,575 million (2012: Baht 925.0 million and VND 124,922 million).

THORESEN THAI AGENCIES PLC.

Annual Report 2013

134

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 17

Intangible assets Consolidated financial statements Computer software Other under Computer intangible installation software assets

Customer relationship

Cost

At 1 October 2011 (restated) Additions Transfers Disposals and write-offs Effect of movement in exchange rates At 30 September 2012 and 1 October 2012 (restated) Additions Disposals and write-offs Effect of movement in exchange rates At 30 September 2013

Amortisation

At 1 October 2011 (restated) Amortisation charge for the year Impairment charges Transfers Disposals and write-offs Effect of movement in exchange rates At 30 September 2012 and 1 October 2012 (restated) Amortisation charge for the year Impairment charges Disposals and write-offs Effect of movement in exchange rates At 30 September 2013

(in thousand Baht)

563,851 -

8,256 -

301,152 12,699 25,575 (1,328) (1,296)

26,713 (20,618) -

Total 899,972 12,699 4,957 (1,328) (1,296)

563,851 -

8,256 -

336,802 9,391 (26,607)

6,095 -

915,004 9,391 (26,607)

563,851

8,256

3,320 322,906

6,095

3,320 901,108

134,920 69,984 -

2,412 1,114 -

155,470 43,839 8,207 2,170 (80)

292,802 114,937 8,207 2,170 (80)

(538)

204,904 69,897 79,839 -

3,526 1,082 -

209,068 39,768 (26,607)

417,498 110,747 79,839 (26,607)

87 354,727

31 4,639

3,085 225,314

3,203 584,680

At 1 October 2011 (restated)

428,931

5,844

145,682

26,713

607,170

At 30 September 2012 and 1 October 2012 (restated)

358,947

4,730

127,734

6,095

497,506

At 30 September 2013

209,124

3,617

97,592

6,095

316,428

Net book value

THORESEN THAI AGENCIES PLC.

Annual Report 2013 Thoresen Thai Agencies Public Company Limited and its Subsidiaries

135

Notes to financial statements

Separate financial statements Computer Computer software under software installation Total

(in thousand Baht)

Cost

At 1 October 2011 Additions Transfer At 30 September 2012 and 1 October 2012 Additions At 30 September 2013

165,259 116 20,618 185,993 383 186,376

26,713 (20,618) 6,095 6,095

191,972 116 192,088 383 192,471

66,406 26,736 8,207 101,349 21,545 122,894

At 1 October 2011

98,853

26,713

125,566

At 30 September 2012 and 1 October 2012

84,644

6,095

90,739

At 30 September 2013

63,482

6,095

69,577

Amortisation

At 1 October 2011 Amortisation charge for the year Impairment charges At 30 September 2012 and 1 October 2012 Amortisation charge for the year At 30 September 2013

Net book value

THORESEN THAI AGENCIES PLC.

Annual Report 2013

136

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 18

Other non-current assets Consolidated financial statements 2013 2012 (restated)

Separate financial statements 2013 2012

(in thousand Baht)

Long-term prepayment land use rights, net Insurance claims Restricted deposit at a financial institution over 1 year Other assets Total

5,821 265,443

9,392 280,166

125,588 81,278 478,130

123,328 50,650 463,536

698 698

247 247

The restricted deposit at a financial institution, which matures over one year from now, is pledged against long-term loans with a local financial institution. The restricted deposit must be maintained at a minimum amount of the next two principal and interest payments after the two-year grace period expired on 30 September 2013.

Interest-bearing liabilities

Note

Separate financial statements 2013 2012

(in thousand Baht)

Current

Bank overdrafts Short-term loans Short-term loan from related parties Current portion of long-term loans Current portion of finance lease liabilities

Consolidated financial statements 2013 2012 (restated) 12,140 1,168,349 2,279,612

7,230 1,263,004 3,318,265

5,916,004 220,000

5,660,905 40,000

4,239 3,464,340

5,373 4,593,872

6,136,004

5,700,905

Long-term loans Bonds Finance lease liabilities

6,627,589 3,996,772 9,604 10,633,965

5,387,990 3,995,530 11,193 9,394,713

940,000 3,996,772 4,936,772

1,160,000 3,995,530 5,155,530

Total

14,098,305

13,988,585

11,072,776

10,856,435

Non-current

THORESEN THAI AGENCIES PLC.

Annual Report 2013

137

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements The periods to maturity of long-term loans as at 30 September were as follows: Consolidated financial statements 2013 2012 (restated)

Separate financial statements 2013 2012

(in thousand Baht) Within one year After one year but within five years After five years Total

2,279,612 4,408,361 2,219,228 8,907,201

3,318,265 2,713,647 2,674,343 8,706,255

220,000 940,000 1,160,000

40,000 1,160,000 1,200,000

The currency denomination of long-term loans as at 30 September were as follows: Consolidated financial statements 2013 2012 (restated) Thai Baht (THB) United States Dollars (USD) Qatar Riyal (QAR) Total

1,365,899 7,427,532 113,770 8,907,201

Separate financial statements 2013 2012

(in thousand Baht)

1,760,829 6,945,426 8,706,255

1,160,000 1,160,000

1,200,000 1,200,000

The Company Long-term loans Loan for convertible bond redemption was granted by a local commercial bank and is denominated in Thai Baht with a total outstanding balance of Baht 1,160 million as at 30 September 2013 (2012: Baht 1,200 million) with repayment term over 5 years and is unsecured. The loan bears interest rate at a floating reference rate plus a margin.

Bonds In July 2010, the Company issued and sold two tranches of unsubordinated and unsecured Thai Baht bonds at face value worth Baht 4 billion. The details of bonds are as follows: Bond No.

Number of units

Face value /unit (Baht)

Interest rate (% per annum)

Maturity dated

Tranche 1 Tranche 2

2,000,000 2,000,000

1,000 1,000

3.60 3.82

9 July 2015 29 June 2017

The Thai Baht bonds were issued at par with a face value of Baht 1,000 per unit. The term of the first tranche is five years from issue date and the term of the second tranche is six years, eleven months and twenty days from the issue date. The Company will pay interest every three months and will pay the entire principal amount at the maturity date.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

138

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements The movement of bonds during the year that ended on 30 September 2013 and 2012 are as follows: Consolidated and Separate financial statements 2013 2012

(in thousand Baht)

At 1 October Amortisation on deferred issuing costs At 30 September

3,995,530 1,242 3,996,772

3,994,284 1,246 3,995,530

Consolidated Short-term loans As at 30 September 2013, the Group has unsecured short-term loans in form of promissory notes, bill of exchanges, and trust receipts from local financial institutions amounting to Baht 1,168.3 million

(2012: Baht 1,263.0 million).

Long-term loans Movements of long-term loans during the years that ended on 30 September 2013 and 2012 are as follows: Consolidated financial statements 2013 2012 (restated) At 1 October Additions Repayments Reclassify to short-term loan Translation adjustments Amortisation on deferred issuing costs At 30 September Less current portion of long-term loans Long-term loans - net of current portion a)

8,706,255 1,037,951 (973,064) 132,442 3,617 8,907,201 (2,279,612) 6,627,589

Separate financial statements 2013 2012

(in thousand Baht)

7,708,881 2,941,975 (1,873,803) (1,000) (73,226) 3,428 8,706,255 (3,318,265) 5,387,990

1,200,000 (40,000) 1,160,000 (220,000) 940,000

1,200,000 1,200,000 (40,000) 1,160,000

Loans for the purchases and constructions of ocean vessels, a tender rig, support vessels and equipment, and barges: -

Loans for the purchase and construction of ocean vessels are granted by foreign syndicated banks and are denominated in US Dollars with a total outstanding balance of USD 103.6 million as at 30 September 2013 (2012: USD 94.6 million) with repayment terms within 5 - 17 years from the vessel delivery date. As at 30 September 2013, interest rates and securities on the loans are as follows: ď&#x201A;ˇ

The loan balance of USD 32.3 million (2012: USD 35.8 million): fixed rate and LIBOR plus a certain margin and is secured by a mortgage of two vessels and a corporate guarantee by the Company.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

139

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 

The loan balance of USD 71.3 million (2012: USD 58.8 million): LIBOR plus a certain margin and is secured by a mortgage of ten of the Group’s ocean vessels and subsequently by the new build or second-hand vessels that have been acquired under these loans facilities, assignment of insurance for the collateral vessels, pledge or charge over bank accounts, and a corporate guarantee by the Company.

Loan for the purchase of a tender rig is granted by a local commercial bank and is denominated in US Dollars with a total outstanding balance of USD 2.7 million as at 30 September 2013 (2012: USD 5.5 million) with repayment term within 9 years. This loan bears interest at the rate of USD-LIBOR plus a certain margin, is secured by a mortgage of the tender rig, and is guaranteed by subsidiaries.

Loan for the special maintenance of a tender rig is granted by a local commercial bank and is denominated in US Dollars with a total outstanding balance of USD 9.0 million as at 30 September 2013 (2012: Nil) with repayment term within 2 years. This loan bears interest at the rate of USD-LIBOR plus a certain margin, is secured by a mortgage of the tender rig, and is guaranteed by subsidiaries.

Loans for the purchase of support vessels and equipment are granted by local commercial banks and are denominated in US Dollars, having a total outstanding balance of USD 122.1 million as at 30 September 2013 (2012: USD 126.1 million) with repayment terms within 8 - 10 years. As at 30 September 2013, the interest rate is USDLIBOR plus a certain margin (2012: USD-LIBOR plus a certain margin). These loans are currently secured by mortgages of support vessels and are guaranteed by a subsidiary.

Loans for working capital are granted by a foreign commercial bank and are denominated in Qatar Riyal, having a total outstanding balance of QAR 13.2 million as at 30 September 2013 (2012: Nil) with repayment terms within 1.3 years. As at 30 September 2013, interest rate is fixed (2012: Nil). These loans are currently guaranteed by a subsidiary.

Loans for the purchase of barges are granted by a local commercial bank and are denominated in Thai Baht with a total outstanding balance of Baht 21.4 million as at 30 September 2013 (2012: Baht 33.4 million) with repayment term within 7 years. This loan bears interest at MLR minus certain margins and is secured by a mortgage of all barges.

According to a condition of the loan agreements, the Company and its subsidiaries are not allowed to create any encumbrance on the assets which are used as collateral, except obtaining prior consent of the banks and permitted liens. The Company and its subsidiaries must comply with other conditions and restrictions stated in the term loan agreements. b)

Loans for the construction of a building and warehouse are granted by local commercial banks and are denominated in Thai Baht with a total outstanding balance of Baht 72.7 million as at 30 September 2013 (2012: Baht 97.2 million) and repayment terms within 6.5 - 8 years. As at 30 September 2013, interest rates and the detail of mortgages are as follows: -

The loan balance of Baht 65.9 million (2012: Baht 81.4 million): MLR minus a certain margin. The loans are secured by mortgages of the subsidiary’s land & buildings and are guaranteed by the Company.

The loan balance of Baht 6.8 million (2012: Baht 15.8 million): the one year fixed deposit rate for personal account plus a certain margin. The loans are secured by mortgages of the subsidiary’s land & buildings and are guaranteed by the Company.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

140

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements c)

Loans for the construction of machinery and warehouses and working capital are granted by local commercial banks and are denominated in Thai Baht with a total outstanding balance of Baht 111.8 million as at 30 September 2013 (2012: Baht 430.2 million) and repayment terms within 3 - 7 years. These loans bear interest at MLR minus certain margins and are secured by mortgages of a subsidiaryâ&#x20AC;&#x2122;s partial land and construction on that land.

As at 30 September 2013, the Company as a guarantor for loans undertaken by subsidiaries, and the Company and UMS as the borrowers had breached certain loan covenants. According to Thai Accounting Standard No. 1 (Revised 2009) - Presentation of Financial Statements, the entity has to present the liability as current if an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. As a result, the long-term portion of loans amounting to Baht 972.1 million was presented as current liabilities as of 30 September 2013. Currently, management is discussing with the relevant banks and has the opinion that the outcome will not result in a material adverse effect.

Employee benefit obligations Consolidated financial statements 2013 2012 (restated) Employee benefit obligations Charge to statement of income

108,640 19,845

(in thousand Baht) 100,473 12,087

Consolidated financial statements 2013 2012 (restated) Statements of financial position obligations for: Retirement benefits

Separate financial statements 2013 2012 11,121 (8,798)

20,371 4,323

Separate financial statements 2013 2012

(in thousand Baht)

108,640

100,473

11,121

20,371

Retirement benefits The movement in the defined benefit obligations during the year is as follows: Consolidated financial statements 2013 2012 (restated) Beginning balance Current service costs Interest costs Actuarial gains Curtailment gains Benefits paid Translation adjustment Ending balance

100,473 32,421 1,910 (14,486) (8,430) (3,248) 108,640

THORESEN THAI AGENCIES PLC.

Separate financial statements 2013 2012

(in thousand Baht)

107,718 33,819 1,885 (23,617) (18,356) (976) 100,473

20,371 2,833 302 (11,933) (452) 11,121

16,367 6,802 497 (2,976) (319) 20,371

Annual Report 2013

141

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements The amounts recognised in the statement of income are as follows:

Current service costs Interest costs Amortisation of actuarial gains Curtailment gains Total (included in staff costs)

Consolidated financial statements 2013 2012 (restated)

Separate financial statements 2013 2012

32,421 1,910 (14,486) 19,845

2,833 302 (11,933) (8,798)

(in thousand Baht)

33,819 1,885 (23,617) 12,087

6,802 497 (2,976) 4,323

The principal actuarial assumptions used were as follows:

Discount rate Future salary increases Mortality rate Resignation rate

Separate financial statements 2013 2012 3.8% 3.8% 6% 6%

Consolidated financial statements 2013 2012 3.7% - 4.3% 3.7% - 4.3% 4% - 6% 4% - 6% 0.01% - 1.32% 0% - 31%

0.01% - 1.32% 0% - 31%

0.10% - 1.32% 0% - 18%

Retention incentives The movement in the retention incentive obligations during the year is as follows: Consolidated financial statements 2013 2012 (restated) Beginning of the year Current service cost (reversal) Paid during the year Realised gains on exchange rate Translation adjustments Ending balance

Separate financial statements 2013 2012

(in thousand Baht)

60,808 (14,960) (45,847) (62) 61 -

The amounts recognised in the statement of income are as follows: Consolidated financial statements 2013 2012 (restated) Current service cost (reversal)

Separate financial statements 2013 2012

(in thousand Baht)

(14,960)

These amounts are included in service, selling, and administrative expenses.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

142

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 21

Share capital and warrants Consolidated and Separate financial statements Par value 2013 2012 per share Number Baht Number Baht

Authorised

At 1 October - ordinary shares Reduction of shares Increase of new shares At 30 September - ordinary shares

(in Baht) 1 1 1

(thousand shares / thousand Baht )

783,004 (75,000) 424,803

833,004 (50,000) -

1,132,807

783,004

1 1 1

708,004 283,202 632

708,004 -

991,838

708,004

Issued and paid-up

At 1 October - ordinary shares Issue of new shares Exercise of warrants At 30 September - ordinary shares

The reduction of authorised share capital At the Extraordinary General Meeting of Shareholders No. 1/2013 held on 14 December 2012, the shareholders approved to reduce the Company’s authorised share capital by cancelling 75,000,000 authorised but unissued shares reserved for convertible bonds, resulting in a decrease from the existing authorised share capital of Baht 783,004,413 to a new authorised share capital of Baht 708,004,413 divided into 708,004,413 ordinary shares each of par value of Baht 1.

Issue of ordinary shares and warrants At the Annual General Meeting of Shareholders No. 1/2013 held on 30 January 2013, shareholders approved the following resolutions: 

Increase of the authorised share capital by 424,802,647 shares at a par value of Baht 1 each from the existing authorised share capital of Baht 708,004,413. The new authorised share capital of Baht 1,132,807,060 is divided into 1,132,807,060 shares at the par value of Baht 1 each.



Issuance and offering of the following securities: -

No more than 283,201,765 new ordinary shares at a par value of Baht 1 each in combination with No more than 141,600,882 units of warrants to purchase new ordinary shares of the Company No. 3 ("TTA-W3" or "Warrants")

The above securities will be offered to existing shareholders in proportion to their shareholding percentage (Right Offering: RO) in a ratio of 5 existing ordinary shares to 2 new ordinary shares in combination with 1 Warrant (5:2:1). The RO price is Baht 14 per one share. The offering price for the Warrants is Baht 0 per one unit. The exercise price for the Warrants is Baht 17 per share (except in case of rights adjustments). Existing shareholders exercising the right to subscribe for the capital increase shares will be allocated 1 warrant for every 2 rights share subscribed.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

143

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements ď&#x201A;ˇ

Allocation of capital increase ordinary shares as follows:

Offering of new ordinary shares -

No more than 283,201,765 new ordinary shares at the par value of Baht 1 per share must be offered to existing shareholders of the Company in proportion to their shareholding percentage at a ratio of 5 existing ordinary shares to 2 new ordinary shares at an offering price of Baht 14 per share.

Existing shareholders shall have the right to oversubscribe in the RO based on the ratio specified above by indicating their intention to oversubscribe by no more than 50 percent of existing ordinary shares held by them. Shareholders may oversubscribe, and oversubscription shares may be allocated to such oversubscribing shareholders only when there are shares left after allocation to all shareholders who have subscribed to shares proportionately to their shareholding percentage in the RO. Such allocation of oversubscription shares shall be proportionate to their shareholding percentage and shall be subject to the foreign shareholding limit as prescribed under the Articles of Association of the Company, which currently provides that foreign shareholders may hold shares in the Company up to 49 percent of total issued shares of the Company.

Any new ordinary shares left after allocation to existing shareholders shall be allocated in a private placement (the "Private Placement") at an offering price, which is not lower than 90 percent of market price. However, the Private Placement offering price will not be lower than the RO price.

Allocation of new ordinary shares for the exercise of Warrants -

No more than 141,600,882 new ordinary shares shall be allocated for the exercise of warrants No. 3 to purchase ordinary shares of the Company to be offered proportionately to existing shareholders of the Company.

The registration of the increase of authorised share capital was approved by the Business Development Department, Ministry of Commerce on 6 February 2013. On 12 March 2013, the Company announced the sale to the existing shareholders of 283,201,751 rights shares, resulting in proceeds of Baht 3,964.82 million. On 14 March 2013, the Company announced the result of issuance and allocation of TTA-W3 to the existing shareholders who subscribed for newly issued ordinary shares and were allocated 141,600,255 units of TTA-W3 at an offering price Baht 0 per unit. The new ordinary shares and TTA-W3 were traded on the SET on 14 March 2013 and 25 March 2013, respectively. As at 30 September 2013, 631,797 units of TTA-W3 were exercised and registered as paid-up share capital, resulting in an increase of the Companyâ&#x20AC;&#x2122;s paid-up share capital to Baht 991,837,961.

THORESEN THAI AGENCIES PLC.

Annual Report 2013 Thoresen Thai

144

Agencies Public Company Limited and its Subsidiaries

Notes to financial statements

Movements in the number of warrants outstanding and their related weighted average exercise prices are as follows:

At 1 October 2012 Issue Exercise At 30 September 2013

Consolidated financial statements Average exercise price per warrant Number of (in Baht) units’000

Separate financial statements Average exercise price per warrant Number of (in Baht) units’000

17 17

141,600 (2,390)

17 17

141,600 (2,390)

139,210

Legal reserves Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

Opening balance Appropriation during the year

93,500 -

Closing balance

93,500

(in thousand Baht)

Under the Public Limited Company Act., B.E. 2535, the Company is required to set aside as legal reserve at least 5% of its annual net profit after accumulated deficits brought forward (if any) until the reserve is not less than 10% of the authorised share capital. The legal reserve is nondistributable.

Share-based payment MMPLC had four share option schemes in operation during the financial year, all of which are equity-settled schemes: i)

Employee share option plan 2008 (“ESOP 2008”) was approved by MMPLC’s shareholders on 11 July 2007. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme.

ii) Employee share option plan 2009 (“ESOP 2009”) was approved by MMPLC’s shareholders on 29 January 2009. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme.

THORESEN THAI AGENCIES PLC.

Annual Report 2013 Thoresen Thai Agencies Public Company Limited and its Subsidiaries

145

Notes to financial statements

iii) Employee share option plan 2010 (“ESOP 2010”) was approved by MMPLC’s shareholders on 28 January 2010. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives and non-executive directors. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme. iv) Employee share option plan 2011 (“ESOP 2011”) was approved by MMPLC’s shareholders on 25 January 2011. This scheme permits the grant of options in respect of ordinary shares to MMPLC’s executives and non-executive directors. Options are normally exercisable every six months commencing from the third anniversary from the date of grant of the option and will expire on the fifth anniversary from the date of grant of the options, upon which the options shall expire automatically. No further options will be granted under this scheme. Share options were granted to selected executives and non-executive directors of MMPLC and its subsidiaries. The exercise price of the granted options is equal to the average of the “Market Price”, being the price equal to the weighted average price for the shares on the Singapore Exchange (SGX-ST) fifteen consecutive trading days immediately preceding the date of grant. Options are conditional on the employee completing three years’ service (the vesting period). The options are exercisable starting three years from the grant date. MMPLC has no legal or constructive obligation to repurchase or settle the options in cash. Pursuant to the terms of each ESOP, an adjustment must be made to the exercise price and/or the numbers of options granted in the event that there is any variation to MMPLC’s issued capital, such as arising from a rights issue. This is for purpose of the mitigation of the dilution effect on the options already granted arising from such a capitalising exercise. In early October 2013, MMPLC completed a capitalisation exercise in the form of a nonrenounceable non-underwritten rights issue and private placement of 627,798,180 shares at a price of SGD 0.28 for each rights share on the basis of 4 rights shares for every 5 existing ordinary shares. Accordingly, the total number of options granted pursuant to ESOP 2008, ESOP 2009, ESOP 2010, and ESOP 2011 and their respective exercise prices have been adjusted by the Remuneration Committee to be as follows: Outstanding no. of options ESOP 2008 ESOP 2009 ESOP 2010 ESOP 2011 Total

661,200 552,000 345,000 620,000 2,178,200

Previous exercise price (SGD per share) 0.30 0.81 0.45 0.24

Adjusted no. of options 745,092 622,037 388,773 698,664 2,454,566

Adjusted exercise price (SGD per share) 0.27 0.72 0.40 0.21

THORESEN THAI AGENCIES PLC.

Annual Report Thoresen Thai2013 Agencies Public Company Limited and its Subsidiaries

146

Notes to financial statements

None of the participants in any of the said ESOPs were granted 5% or more of the total number of options originally available in each ESOP and no options were granted at a discount. Furthermore, no directors or controlling shareholders of MMPLC hold options under any of the said ESOPs and no options are held by the Company or other subsidiaries, nor any of its or their directors or employees. Movements in the number of share options outstanding and their related weighted average exercise prices are as follows: Consolidated financial statements Average Option exercise price Shares SGD per share ’000 0.52 2,331 0.24 1,310 0.41 (1,109)

At 1 October 2011 Granted Forfeited

Separate financial statements Average Option exercise price Shares SGD per share ’000 -

At 30 September 2012

0.42

2,532

At 1 October 2012 Granted Forfeited

0.42 0.39 0.33

2,532 276 (353)

At 30 September 2013

0.39

2,455

Out of the 2,454,566 outstanding options (2012: 2,531,800 options), 1,367,129 options (2012: 672,800 options) were exercisable. No share options were exercised throughout the year. The average share price during the year that ended on 30 September 2013 was SGD 0.36 per share

(2012: SGD 0.31 per share).

Share options outstanding at the end of the year have the following expiry date and exercise prices:

Expired date: 20 November 2013 16 November 2014 1 December 2015 15 December 2016

Consolidated financial statements Exercise 30 30 price September September SGD per 2013 2012 share Shares’000 Shares’000 0.27 0.72 0.40 0.21

745 622 389 699 2,455

673 599 370 890 2,532

Separate financial statements Exercise 30 30 price September September SGD per 2013 2012 share Shares’000 Shares’000 -

The weighted average fair value of options granted during the year determined using the Binomial Lattice valuation model was SGD 0.09 per option. The significant inputs into the model were a weighted average share price of SGD 0.23 at the grant date, exercise price shown above, volatility of 45%, dividend yield of 0%, an expected option life of 3.85 years, and an annual risk-free interest rate of 3.015% - 3.081%.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

147

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

On 15 December 2011, 1,310,000 share options were granted to MMPLC’s executives and nonexecutive directors with an exercise price set at the market price on that date of SGD 0.24 per share (share price: SGD 0.23 per share) (expiry date: 15 December 2016). With the effective of TFRS 2, share-based payments granted on or after 1 October 2011 will be accounted for. Given that this option has a vesting period of 3 years, the accounting expense with respect to the plan may be amortised over 3 years. The projected accounting expense calculated by an actuary which is recognised as a component of equity in the statement of changes in equity for the year that ended on 30 September 2013 amounts to Baht 0.46 million (2012: Baht 0.37 million).

Segment information Segment information is presented in respect of the Group’s business segments. The primary format, business segments, is based on the Group’s management and internal reporting structure.

Business segments The Group comprises the following main business segments: Segment 1 Segment 2 Segment 3 Segment 4

Transport Infrastructure Energy Holding

Business segment results Revenue and results, based on business segments, in the consolidated financial statements for the years that ended on 30 September 2013 and 2012 were as follows: Consolidated financial statements For the year that ended on 30 September 2013 Elimination of intersegment Energy Holding transactions Transport Infrastructure

(in thousand Baht)

Revenues from operations Revenues from inter-segment

5,090,010 (278,130)

5,407,873 (63)

8,243,399 -

Revenue from external customers

4,811,880

5,407,810

8,243,399

(3,966,053)

21,319

710,178

Operating profits (losses)

492,058 (492,058) (203,302)

(770,251) 770,251 (957,896)

Share of profits from associates and joint ventures Finance costs Income taxes

Total 18,463,089 18,463,089 (4,395,754)

254,662 (509,625) (217,970)

Net losses for the year

(4,868,687)

Property, plant, and equipment

8,783,116

1,561,896

10,291,605

314,341

(16,421)

20,934,537

Total assets

18,567,352

3,959,336

22,680,095

37,296,886

(39,412,280)

43,091,389

THORESEN THAI AGENCIES PLC.

Annual Report 2013

Thoresen Thai Agencies Public Company Limited and its Subsidiaries

148

Notes to financial statements

Consolidated financial statements For the year that ended on 30 September 2012 (restated) Elimination of intersegment Energy Holding transactions Transport Infrastructure

Total

(in thousand Baht) 4,021,663 (427,208)

7,031,583 -

5,721,169 -

783,726 (783,726)

(1,210,934) 1,210,934

16,347,207 -

Revenue from external customers 3,594,455

7,031,583

5,721,169

16,347,207

91,440

533,466

Revenues from operations Revenues from inter-segment

Operating profits (losses)

(693,107)

(3,391,882)

(205,491)

(3,665,574)

Share of profits from associates and joint ventures Finance costs Income taxes

129,426 (753,858) (165,880)

Net losses for the year

(4,455,886)

Property, plant, and equipment

12,259,940

1,518,542

9,870,176

Total assets

21,885,743

4,466,259

16,443,402

334,599

1,280

23,984,537

35,880,389 (37,878,568)

40,797,225

Other operating income

Years that ended on 30 September Dividend income Management fee income Realised gains on cross currency and interest rate swap agreements Gains on disposals of investments in subsidiaries Gains on disposals of short-term investments Gains on sales of property, plant, and equipment Compensation for termination of property, plant and equipment Interest income Gains on exchange rates Insurance claims received Other income Total

Consolidated financial statements 2013 2012 (restated) 1,795 11,653 -

(in thousand Baht) 5,845 -

316,757 (4,273)

1,124,818 12,784

6,998

11,653

598

144

32,284

8,224

45,969

67,114 63,937 54,342 117,133 315,369

38,514 72,254 33,265 476,538

14,882 38,383 71,197 11,785 84,676 312,624

THORESEN THAI AGENCIES PLC.

Separate financial statements 2013 2012

617 210,658 72,110 1,421,585

Annual Report 2013

149

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 26

Expense by nature The statements of income include an analysis of expenses by function. Expenses by nature disclosed in accordance with the requirements of various TFRS were as follows: Consolidated financial statements 2013 2012 (restated) Expenses included in vessel operating expenses Voyage expenses Vessel supplies and spare parts expenses and repair and maintenance expenses Crew and staff costs Charter hire Depreciation and amortisation Expenses included in offshore service expenses Vessel expenses and repair and maintenance expenses Crew, staff costs, and subcontractor costs Charter hire and equipment rental Depreciation and amortisation Expenses included in costs of sales Cost of raw materials Supplies and spare parts expenses and repair and maintenance expenses Staff costs Depreciation and amortisation Expenses included in service, selling, and administrative expenses Staff costs Professional fees Office and office equipment rental Depreciation and amortisation Impairment charges and write-offs Impairment on amount due from related parties Impairment on short-term loans to related parties Impairment on inventories and vessels supplies and spare parts Impairment on long-term loans to related parties

Separate financial statements 2013 2012

(in thousand Baht)

1,745,167

1,174,678

205,378 369,316 1,505,038 761,223

207,347 323,964 604,223 724,701

1,213,245

1,097,466

3,200,974 549,137 816,924

2,052,358 106,800 800,406

4,113,396

5,845,413

41,854 91,564 66,419

39,122 77,592 57,704

1,216,741 164,637 52,261 220,863

986,881 165,696 56,942 238,064

10,123

232,305

123,996

107,639

551,780

243,294 -

177,415 30,172 7,167 49,112

178,341 68,028 6,285 56,079

2,731,526

THORESEN THAI AGENCIES PLC.

Annual Report 2013

150

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Impairment on investments in subsidiaries, associates, and joint venture Impairment on goodwill Impairment on property, plant, and equipment and intangible assets Write-off of property, plant, and equipment Write-off of deferred arrangement fee for loan

Consolidated financial statements 2013 2012 (restated)

Separate financial statements 2013 2012

120,245 516,031

2,318,666

412,276 -

4,004,446

535,869

8,207

659

170,410

206,342

(in thousand Baht)

836,872 -

Income tax expense Income taxes as shown in the consolidated and Company statements of income are calculated based on net taxable income from non-BOI activities using a principal tax rate for operations in Thailand and specific tax rates applicable to each respective country for overseas operations. NonBOI activities comprise gains from disposals of assets, shipping related services including agency, drilling services outside Thailand, offshore related services, and production and trading of fertiliser and coal.

Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax rate for the three accounting periods 2012, 2013, and 2014; from 30% to 23% for the accounting period 2012 which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014 which begin on or after 1 January 2013 and 2014, respectively. It is understood that the Government will proceed to amend the law in order to maintain the corporate income tax rate at not higher than 20% for the accounting period 2015 which begins on or after 1 January 2015 and onwards in order to give full effect to the Cabinet resolution dated 11 October 2011 to increase Thailandâ&#x20AC;&#x2122;s tax competitiveness.

THORESEN THAI AGENCIES PLC.

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151

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 28

Losses per share Basic losses per share The calculation of basic losses per share for the year was based on the losses for the year attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the year as follows: Consolidated financial statements 2013 2012 (restated)

Years that ended on 30 September Losses for the year attributable to equity holders of the Company (basic)

Separate financial statements 2013 2012

(in thousand Baht / thousand shares)

(5,080,218)

(4,494,434)

(594,655)

708,004 158,435

708,004 -

708,004 158,435

708,004 -

866,439

708,004

866,439

708,004

Number of ordinary shares outstanding at 1 October 2012 and 2011 Effect of new shares issued during the year Weighted average number of ordinary shares outstanding (basic) Losses per share (basic) (in Baht)

(5.86)

(6.35)

(0.69)

(2,899,981)

(4.10)

Diluted losses per share There was no potential dilution in losses per share from the warrants, because the average share price during the year 2013 was lower than the exercise price.

Dividends a)

For the year that ended on 30 September 2013 MMPLC At the Annual General Meeting of Shareholders No.1/2013 held on 28 January 2013, the shareholders approved the payment of an annual dividend of Baht 0.0274 per share, amounting to Baht 21.5 million. The dividend payment was made to shareholders on 22 February 2013.

For the year that ended on 30 September 2012 The Company At the Annual General Meeting of Shareholders which was held on 31 January 2012, the shareholders approved the annual dividend payment for the year that ended on 30 September 2011 at Baht 1.00 per share amounting to Baht 708.0 million. However, since the Company announced an interim dividend of Baht 0.50 per share in June 2011, the remaining dividend of Baht 0.50 per share be paid to shareholders. The annual dividend payment was made on 23 February 2012. However, dividends of Baht 1,050 were not paid to certain shareholders due to disqualification. As a result of the dividend payment, the conversion price of convertible bonds was adjusted to Baht 50.18 per share (previously Baht 50.35 per share) with effect from 8 February 2012 to 24 September 2012.

THORESEN THAI AGENCIES PLC.

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152

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements UMS At the Annual General Meeting of Shareholders which was held on 24 January 2012, the shareholders approved the annual dividend payment from the net income of UMS for the year that ended on 30 September 2011 at Baht 0.20 per share amounting to Baht 30.7 million. The annual dividend payment was made on 20 February 2012.

Promotional privileges As at 30 September 2013, one direct subsidiary and six indirect subsidiaries received promotional privileges from the Board of Investment (“BOI”) under services of submerged structure inspection, service of underwater equipment, service of inspection of marine pollution, drilling services, trade and investment service office, and port services. The main privileges include exemption from payment of import duty on machinery and exemption from corporate income taxes for the promoted activities for a period of 8 years from the date when income is first derived, or when approval is given by the BOI. Furthermore, a shipping subsidiary received promotional privileges from the Maritime and Port Authority of Singapore (“MPA”) under service of domestic and international shipping. The main privileges include exemption from corporate income taxes for the shipping profits for the period commencing from 8 September 2008 to 8 September 2016. To be entitled to the privileges, the Group must comply with the conditions and restrictions provided in the promotional certificates.

Financial instruments Financial risk management policies The principal financial risks faced by the Group are foreign exchange rate risk, interest rate risk, bunker prices, freight rates, and credit risk. The objective in using financial instruments is to reduce the uncertainty over future cash flows arising from movements in exchange rates, interest rates, bunker prices, and freight rates, and to manage the liquidity of the cash resources.

Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders and issue new shares or bonds.

Foreign exchange rate and interest rate risk The exchange rate risk is the principal risk faced by the Group as certain purchases and services are entered into foreign currencies and also interest rate risk, which is the risk that future movements in market interest rates will affect the results of the Group’s operations and its cash flows. The Group manages these risks as follows:

THORESEN THAI AGENCIES PLC.

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153

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements a)

Cross currency and interest rate swap contracts The Company entered into cross currency and interest rate swap contracts with a commercial bank against 5 year and 7 year Thai Baht bonds with maturities in 2015 and 2017. The Company has locked in fixed USD interest rates of 3.65% and 3.60% per annum, respectively. As at 30 September 2013, the outstanding bond balances were USD 127.83 million (2012: USD 127.83 million) and these bonds had notional amounts of Baht 4,000 million (2012: Baht 4,000

million).

The Company entered into a cross currency and interest rate swap contracts with a commercial bank against a long term loan with repayment term over 5 years. The Company swapped interest rates from 6M THBFIX + 2.00% per annum to USD 6M Libor + 2.93% per annum. In September 2013, the Company partially unwind the swap in order to reverse some obligations to THB to match with its sources of funds. Therefore, as at 30 September 2013, the outstanding long-term loan balance was divided into 2 currencies: (1) THB 280 million and (2) USD 28.25 million (2012: USD 38.52 million) and this loan had a notional amount of Baht 1,160 million (2012: Baht 1,200 million). On 11 August 2011, UMS, a subsidiary, entered into an interest rate swap contract with a commercial bank for a long term loan in Thai Baht currency. The loan had a notional amount of Baht 500 million. We have swapped the floating interest rate of 6M THBFIX plus 1.25% per annum to a fixed interest rate of 4.37% per annum. As at 30 September 2013, there was no outstanding loan balance (2012: Baht 245 million). The net fair values of the cross currency and interest rate swap contracts at the statements of financial position date are as follows: Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

(in thousand Baht)

Unfavorable on cross currency and interest rate swap contracts

197,912

Unfavorable on interest rate swap contract

248,144 408

197,912 -

248,144 -

The fair values of cross currency and interest rate swap contracts have been calculated (using rates quoted by the counterparty to the contracts) as if the contracts were terminated at the statements of financial position date. b)

Forward foreign exchange contracts UMS, a subsidiary, entered into forward foreign exchange contracts with local financial institutions in order to hedge the foreign exchange risk relating to trust receipts. As at 30 September 2013, the outstanding contract, whose settlement date is 22 October 2013 (2012: between 15 October and 25 October 2012) is as follows: Consolidated financial statements 2013 2012

(in thousand Baht)

USD 0.5 million at rate Baht 29.14 per USD 1

(2012: USD 3.1 million at rates Baht 30.93 - 31.19 per USD 1)

Separate financial statements 2013 2012

15,611

96,556

THORESEN THAI AGENCIES PLC.

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154

Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements The net fair values of the forward foreign exchange contracts at the statements of financial position date are as follows: Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

(in thousand Baht)

Favorable (unfavorable) on forward foreign exchange contracts

1,376

(884)

The fair values of the forward foreign exchange contracts have been calculated (using rates quoted by the counterparty to the contracts) as if the contract was terminated at the statements of financial position date. c)

Bunker swap contracts During the year 2013, a subsidiary entered into bunker swap contracts with commercial banks for hedging bunker prices in connection with long-term cargo contract commitments. We have locked in bunker price at the range of USD 588.4 - USD 642.0. As at 30 September 2013, the outstanding bunker quantities were 11,500 metric tones. The net fair values of the bunker swap contracts at the statements of financial position date are as follows: Consolidated financial statements 2013 2012

(in thousand USD)

Favorable (unfavorable) on bunker swap contracts, net d)

Separate financial statements 2013 2012

134

(254)

(271)

Forward freight agreements TSS entered into forward freight agreements with financial institutions and exchange traded derivatives for hedging freight rates in connection with chartered-in vessels. TSS has locked in freight rates at a range of USD 9,500 - USD 12,850 per day (2012: USD 7,650 - USD 9,500 per day). As at 30 September 2013, the outstanding forward freight agreements to sell are 180 days (2012: 450 days). The net fair values of the forward freight agreements at the statement of financial position date are as follows: Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

(in thousand USD)

Favorable on forward freight agreements

Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due.

THORESEN THAI AGENCIES PLC.

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Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements

Most of the Groupâ&#x20AC;&#x2122;s income, being freight income, is normally paid by clients in advance, or prior to the corresponding cargoes being released to them. Management is therefore of the opinion that credit risk is not significant, and that the cost of hedging will outweigh the possible benefit. The Group has not entered into any derivative contracts relating to credit risk. For the offshore service income and the revenues from sales and service income, management is of the opinion that credit risk is not significant. The Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history.

Determination of fair values The carrying amounts of the financial assets and financial liabilities approximate their fair value.

Commitments and contingent liabilities

32.1 Capital commitments The Group has significant capital commitments towards building, machinery, warehouse construction, ship building, dry-docking, and vessel equipment contracts but not yet recognised as liabilities as at 30 September 2013 and 2012 as follows: Consolidated financial statements 2013 2012 - USD - VND - THB

0.9 12,875.0 6.2

Separate financial statements 2013 2012

(in millions)

59.9 64,252.9 19.1

32.2 Other commitments a)

Operating lease commitments The future aggregate minimum lease payments under non-cancellable operating leases of vessels and land are as follows: Consolidated financial statements 2013 2012 Not later than 1 year Later than 1 year but not later than 5 years Later than 5 years Total

Separate financial statements 2013 2012

(in thousand Baht)

670,322

564,954

569,824 117,446 1,357,592

102,410 88,910 756,274

Sale and purchase contracts for steam coal As at 30 September 2013, UMS, a subsidiary, had outstanding commitments relating to sale and purchase contracts for steam coal with foreign coal suppliers for a specific volume plus or minus 10%. The coal price shall be adjusted, subject to the quality of the coal, as specified by a formula in the agreements.

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Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements Moreover, UMS also had outstanding commitments relating to sales contracts for steam coal with domestic enterprises for a specific volume plus or minus 10% at a fixed price per contract. 32.3 Significant agreements Vessel and rig charter contracts Separate financial statements 2013 2012

Consolidated financial statements 2013 2012

Long-term charter-out contracts: Number of vessels and rigs Remaining period (months) Long-term charter-in contracts: Number of vessels Remaining period (months)

1 23

2 17 - 35

2 12 - 17

32.4 Contingent liabilities a) Guarantees The Company and the Group have given the following guarantees in the normal course of business:

Baht million

30 September 2013 Consolidated financial statements USD million VND million

Letter of guarantees issued by bank on behalf of the Group

25.2

20.8

Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight forwarding

58.2

254.8

QAR million

24,512.6

17.6

30 September 2013 Separate financial statements Baht million USD million Letter of guarantees issued by bank on behalf of the Group

Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight forwarding

58.2

THORESEN THAI AGENCIES PLC.

120.9

Annual Report 2013 Thoresen Thai Agencies Public Company Limited and its Subsidiaries

157

Notes to financial statements

30 September 2012 Consolidated financial statements Baht million USD million VND million Letter of guarantees issued by bank on behalf of the Group

43.6

5.6

Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight forwarding

79.1

246.8

76,855.0

30 September 2012 Separate financial statements Baht million USD million Letter of guarantees issued by bank on behalf of the Group

Guarantee given by the Group to financial institutions to guarantee credit facilities, purchases of raw materials, bunker swap, and freight forwarding

79.1

115.2

b) Other contingent liabilities As at 30 September 2013, a subsidiary had other contingent liabilities of approximately USD 2 million (2012: USD 2 million).

Events after the reporting period 

Further to the announcement made by MMPLC on 30 September 2013, on 3 October 2013, the Board of Directors announced that MMPLC has completed the allotment and issue of 58,105,821 Private Placement Shares (“Placement Shares”). The Placement Shares were listed for quotation on the Main Board of the SGX-ST on 4 October 2013 and rank pari passu in all respects to the other shares in issue.



One subsidiary entered into a Memorandum of Agreement to purchase an ocean vessel with purchase prices of USD 19.5 million.



On 1 October 2013, PM Thoresen, a newly established subsidiary, obtained 100% shareholding over Baconco Co., Ltd., a company incorporated in Vietnam from Soleado, a company incorporated in Singapore and under common control of the Company.



On 25 October 2013, PM Thoresen called for additional paid-up share capital from Baht 1 million to Baht 931 million, or an increase of Baht 930 million. The new paid-up share capital is under process of registration.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

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Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 

On 12 November 2013, PM Thoresen purchased 1 ordinary share from Soleado in Atlantis Offshore Construction Pte. Ltd. at the price of SGD 1. PM Thoresen became the sole shareholder in Atlantis Offshore Construction Pte. Ltd. on 12 November 2013. Atlantis Offshore Construction Pte. Ltd. was renamed to PM Thoresen Asia (Singapore) Pte. Ltd. on 14 November 2013.



At the Board of Directors Meeting of MMPLC held on 26 November 2013, the Board approved to recommend an annual dividend payment equal to 90% of the net profits for the year that that ended on 30 September 2013. Total dividends will be approximately Baht 371.7 million or equivalent to USD 12.2 million. This dividend shall be proposed to the Annual General Meeting of Shareholders of MMPLC in January 2014 for their consideration and approval.



At the Board of Directors Meeting of the Company held on 27 November 2013, the Board resolved to approve the following matters: 1) the reduction in the registered capital of the Company from Baht 1,132,807,060 to Baht 1,132,806,419 by cancelling 641 authorised but unissued shares. 2) the increase in the registered capital of the Company by up to Baht 466,941,198 by issuing up to 466,941,198 new ordinary shares each at a par value of Baht 1, thus totaling a capital increase by up to Baht 466,941,198. 3) the issuance and offering for sale of the following securities: (1) no more than 339,841,925 new ordinary shares each at a par value of Baht 1 in combination with (2) no more than 113,280,641 units of warrant to purchase ordinary shares of TTA No. 4 ("TTAW4" or "Warrants"). The above newly issued securities shall be offered for sale to existing shareholders of the Company in proportion to their current shareholding percentage in the Company (the "Right Offering"), at an offering ratio of 10 existing ordinary shares to 3 new ordinary shares to 1 unit of Warrants. The above mentioned matters will be proposed to the Annual General Meeting of Shareholders of the Company in January 2014 for their consideration and approval.

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Thoresen Thai Agencies Public Company Limited and its Subsidiaries Notes to financial statements 34

Thai Financial Reporting Standards (“TFRS”) not yet adopted The Group has not adopted the following new and revised TFRS that have been issued as of the reporting date but are not yet effective, except for TAS 21 (revised 2009) - The Effects of Changes in Foreign Exchange Rates. Those new and revised TFRS are expected to become effective for annual financial periods beginning on or after 1 January in the year indicated in the following table: Year effective

TFRS

Topic

TAS 12 TFRS 8 FAP Announcement 34/2555

Income Taxes Operating Segments Accounting Guidance for Transfers and Receives of Financial Assets Determining Whether an Arrangement contains a Lease

TFRIC 4

2013 2013 2013 2014

Management expects to adopt and apply these new and revised TFRS in accordance with the FAP’s announcement and has made a preliminary assessment of the potential initial impact on the consolidated and separate financial statements of those new standards and assessed significant potential impacts as follows:

TAS 12 – Income taxes The principal change introduced by TAS 12 is the requirement to account for deferred tax liabilities and assets in the financial statements. Deferred tax liabilities and assets are the amounts of income taxes payable and recoverable, respectively, in future periods in respect of temporary differences between the carrying amount of the liability or asset in the statement of financial position and the amount attributed to that liability or asset for tax purposes; and the carry forward of unused tax losses. Currently, the Group does not recognise deferred tax in the financial statements. The Group will adopt TAS 12 with effect from 1 October 2013. The effects of the change will be recognised retrospectively in the financial statements and the statement of financial position as at 30 September 2013 and 2012 will be adjusted accordingly. As of the date of the financial statements, management is still in the process of estimating the impact for adoption of TAS 12.

TFRIC 4 – Determining whether an Arrangement contains a Lease TFRIC 4 addresses arrangements that do not take the legal form of a lease, but convey rights to use items for agreed periods of time in return for a payment or series of payments. TFRIC 4 provides guidance for evaluating whether such arrangements are, effectively leases and should be accounted for under TAS 17 Leases. If an agreement is determined to contain a lease, then TFRIC 4 requires TAS 17 to be applied to classify and account for the lease.

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Management Structure The Companyâ&#x20AC;&#x2122;s management structure comprises the Board of Directors and five sub-committees being Executive Committee, Audit Committee, Nomination and Remuneration Committee, Risk Management Committee, and Corporate Governance Committee.

1. Board of Directors as of 30 September 2013 Thoresen Thai Agencies Public Company Limited Name

Position

1. Mr. Prasert Bunsumpun

Chairman of the Board/ Chairman of Executive Committee

2. Mr. Chalermchai Mahagitsiri

Executive Vice Chairman/ Member of Executive Committee/ Member of Risk Management Committee/ President & Chief Executive Officer (effective on 1 January 2014)

3. M.L. Chandchutha Chandratat

President & Chief Executive Officer (resigned, effective on 31 December 2013)/ Member of Executive Committee

4. Mr. Chia Wan Huat Joseph

Member of Executive Committee/ Member of Corporate Governance Committee

5. Mr. Krish Follet

Chairman of Audit Committee/ Chairman of Risk Management Committee/ Independent Director

6. Mr. Santi Bangor

Chairman of Nomination and Remuneration Committee/ Chairman of Corporate Governance Committee/ Member of Audit Committee/ Independent Director

7. Ms. Ausana Mahagitsiri

Member of Nomination and Remuneration Committee/ Member of Corporate Governance Committee/ Non-Executive Director

8. Mr. Ghanim Saad M. Alsaad Al-Kuwari

Independent Director

9. Mr. Mohammed Rashed Ahmad M. Al Nasseri

Member of Nomination and Remuneration Committee

10. Mr. Yves Barbieux

Director

11. Mr. Cherdpong Siriwit

Independent Director/ Member of Audit Committee

The Board of Directors of four core subsidiaries being Thoresen Shipping Singapore Pte. Ltd., Mermaid Maritime Public Company Limited, Unique Mining Services Public Company Limited, and Baconco Co., Ltd. are shown below.

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a) Thoresen Shipping Singapore Pte. Ltd. Name

Position

1. Mr. Chalermchai Mahagitsiri

Director

2. M.L. Chandchutha Chandratat

Managing Director

3. Mr. David Lawrence Ames

Director

4. Mr. Lee Wei Hsiung

Director

5. Mr. Tan King Chang

Alternate Director

Note /1 Mr. David Lawrence Ames resigned from the Board of Directors on 1 October 2013 and Mr. Ian Clifford Claxton became a Board member on 1 October 2013.

b) Mermaid Maritime Public Company Limited Name

Position

1. Mr. Prasert Bunsumpun

Non-Executive Chairman

2. Mr. Chalermchai Mahagitsiri

Executive Vice Chairman

3. M.L. Chandchutha Chandratat

Executive Director

4. Mr. Chia Wan Huat Joseph

Executive Director

5. Mr. Toh Wen Keong Joachim

Independent Director

6. Dr. Jean Paul Thevenin

Non-Executive Director

7. Mr. Ng Cher Yan

Independent Director

c) Unique Mining Services Public Company Limited Name

Position

Mr. Chalermchai Mahagitsiri

Director

M.L. Chandchutha Chandratat

Managing Director

Mr. David Lawrence Ames

Director

Mr. Lee Wei Hsiung

Director

Mr. Tan King Chang

Alternate Director

Mr. Ekavaj Amornvivat

Chairman of Audit Committee/Independent Director

Mr. Suchart Thammapitagkul

Member of Audit Committee/ Member of Nomination and Remuneration Committee/Independent Direc tor

Pol.Lt.Gen. Kamrob Panyakaew

Member of Audit Committee/Independent Director

Mr. Taratorn Wongprasat

Independent Director

d) Baconco Co., Ltd. Name

Position

M.L. Chandchutha Chandratat/2

Director

Mr. Vichai Chuensuksawadi

Director

Mr. Sigmund Stromme

Director

Note /2 M.L. Chandchutha Chandratat resigned from the Board of Directors on 13 November 2013 and Mr. Chalermchai Mahagitsiri became a Board member on 13 November 2013. /3 Mr. Vichai Chuensuksawadi resigned from the Board of Directors on 13 November 2013 and Mr. Krailuck Asawachatroj became a Board member on 13 November 2013.

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2. Executives Thoresen Thai Agencies Public Company Limited Name

Position

Mr. Chalermchai Mahagitsiri

Executive Vice Chairman/ President & Chief Executive Officer (effective on 1 January 2014)

M.L. Chandchutha Chandratat

President & Chief Executive Officer (resigned, effective on 31 December 2013)

Mr. David Lawrence Ames /4

Executive Vice President, Transport

Mr. Krailuck Asawachatroj

Executive Vice President, Corporate Finance and Accounting (effective on 1 January 2014)

Mr. Somporn Chitphentom/7

Executive Vice President, Corporate Strategy

Mr. Vichai Chuensuksawadi

Executive Vice President, Infrastructure

Mr. Prithayuth Nivasabutr/5

Executive Vice President, Corporate Business Services

Ms. Urai Pluemsomran

Executive Vice President, Corporate Risk and Compliance /Executive Vice President, Corporate Human Resources

Mrs. Thitima Rungkwansiriroj/5

Executive Vice President, Corporate Finance and Accounting

Note /4 Mr. David Lawrence Ames resigned from the Executive on 29 October 2013. /5 Mr. Vichai Chuensuksawadi, Mr. Prithayuth Nivasabutr, Mrs. Thitima Rungkwansiriroj resigned from the Executives on 31 December 2013. /6 Mr. Krailuck Asawachatroj was appointed as an executive member on 16 July 2013. /7 Mr. Somporn Chitphentom was appointed as an executive member on 1 October 2013.

The Executives of the four core subsidiaries being Thoresen Shipping Singapore Pte. Ltd., Mermaid Maritime Public Company Limited, Unique Mining Services Public Company Limited, and Baconco Co., Ltd. are shown below.

a) Thoresen Shipping Singapore Pte. Ltd. Name

Position

Mr. Ian Clifford Claxton

Managing Director

Mr. Michael Anderson

Director, Commercial

Mr. Mikal Boe

Director, Risk Management

Mr. Henrik Jeremiassen

Associate Director, Chartering

Mr. Yodchia Ratanachiwakron

Director, Marine Operations

Mr. Vinh Julien Nguyen

Director, Business Planning

Ms. Rujira Panichagit

Associate Director, Finance & Accounting

Ms. Natawan Toomngern

Director, Human Resources

b) Mermaid Maritime Public Company Limited Name

Position

Mr. Chalermchai Mahagitsiri

Executive Vice Chairman/Acting Managing Director

Mr. Michael Van Ambrose

Managing Director, Mermaid Offshore Services Ltd.

Mr. Stephen Gregor Lenz

Executive Director, Mermaid Drilling Ltd.

Ms. Siriwan Chamnannarongsak

Group Chief Finance Officer

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c) Unique Mining Services Public Company Limited Name

Position

1. Mr. Krisda Leeaphorn

Acting Managing Director/Deputy Managing Director/Acting Chief Financial Officer and General Support

2. Mr. Vichai Chuensuksawadi/8

Acting Managing Director

3. Mr. Phatphong Phongsathiansak Director, Sourcing and Logistics 4. Mr. Vasa Kosadat

Director, Sales and Marketing

5. Ms. Rachadaporn Domrongsin

Accounting Manager

Note: /8 Mr. Vichai Chuensuksawadi resigned from Acting Managing Director of Unique Mining Services Public Company Limited on 1 December 2013.

d) Baconco Co., Ltd. Name

Position

1. Mr. Pinguet Didier

Deputy General Director & Commercial Director

2. Mr. Siquet Pierre Louis Bernard

General Director

3. Mr. Ho Ngoc Chau

Financial & Administrative

4. Mr. Ngo Xuan Giang

Chief Representative, Hai Phong Brunch

5. Mr. Nguyen Dang Cat

Plant Manager

6. Mr. Ho Minh Phuc

Sales Manager

Organisation Chart of the Company as of 30 September 2013 Thoresen Thai Agencies Public Company Limited Board of Directors

Remuneration & Nomination Committee

Audit Committee

Risk Management Committee

Office of Internal Audit

Risk Management and Compliance

Executive Committee Corporate Governance Committee Executive Vice Chairman

President & Chief Executive Officer

Transport Group

Infrastructure Group

Energy Group

Corporate Services

Human Resources

Strategy and Business Development

Office of Corporate Affairs

Corporate Accounting & Finance

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3. Company Secretary

non-executive directors.

The Board of Directors has appointed Ms. Mantanee S u r a k a r n k u l a s C o m p a n y S e c re t a r y. T h e role and responsibilities of the Company Secretary can be viewed at item Company Secretary and Board Committees of the Corporate Governance Report.

 The Chairperson of the AC shall receive an attendance fee of Baht 48,000 per meeting, which is equal to 1.20 times the attendance fees of other AC members, while other AC members shall each receive an attendance fee of Baht 40,000 per meeting.

4. Remuneration of the Directors and Executives 4.1 Thoresen Thai Agencies Public Company Limited Remuneration for the Board, the Board Committees, and Senior Executive Officers The Board’s Remuneration consists of  Total standard monthly fees and attendance fee per

meeting for non-executive directors.  The

Chairperson of the Board of Directors and sub-committee shall receive an attendance fee equal to 1.20 times the attendance fee of other nonexecutive directors and sub-committee members.  Travelling allowance shall be paid to foreign directors who travel into Thailand to attend Board of Directors meetings or committee meetings.  The

executive Director(s) shall receive no monthly fees or other forms of remuneration.  Bonus

if the Company’s performance achieves criteria to distribute bonus to directors as approved by the Company’s shareholders. The Senior Executive Officers’ compensation consists of cash remuneration (salary) and other remuneration consists of long term incentives, provident fund, and social security contributions. Remuneration in Cash The Board’s Remuneration At the 2013 AGM, TTA’s shareholders approved the remuneration of TTA’s Board/1 as follows:  Total standard monthly fees for all nine (9) non-executive directors shall be Baht 430,000. If an additional non-executive director is appointed to the Board, he/she will receive a standard monthly fee of Baht 35,000. The non-executive directors shall receive an attendance fee of Baht 45,000 per meeting. The Chairperson of the Board of Directors shall receive an attendance fee of Baht 54,000 per meeting, which is equal to 1.20 times the attendance fee of other

 T h e

C h a i r p e rs o n o f t h e N o m i n a t i o n a n d Remuneration Committee shall receive an attendance fee of Baht 36,000 per meeting, which is equal to 1.20 times of the attendance fee of other members of the Nomination and Remuneration Committee members. Other Remuneration and Nomination Committee members shall each receive an attendance fee of Baht 30,000 per meeting.

 The Chairpersons of the Risk Management Committee and the Corporate Governance Committee shall each receive an attendance fee of Baht 18,000 per meeting, which is equal to 1.20 times the attendance fees of other members of the Risk Management Committee and the Corporate Governance Committee. Other members shall each receive an attendance fee of Baht 15,000 per meeting.  Travelling allowance shall be paid to foreign directors who travel into Thailand to attend Board of Directors meetings or committee meetings as follows:

- From Asia to Thailand: USD 500 per day - From Europe/USA and others to Thailand: USD 1,000 per day  The

executive Director(s) shall receive no monthly fees or other forms of remuneration.

 To align the interests of the Board and shareholders,

a bonus for all non-executive Directors is proposed to be paid only after a 15% return on parent shareholders funds/2 is achieved. Once this threshold is reached, a bonus equal to 0.50% of annual consolidated net profit above a 15% return on parent shareholders funds will be shared equally among all non-executive Directors. Note:

Remuneration package of the Board of Directors and

sub-committees was approved by the shareholders at the Annual General Meeting of the Shareholders on 2 March 2011, and there have been no changes after that. However, the remuneration package is proposed to shareholders for acknowledgement pursuant to the Best Practices of Corporate Governance by the SET.

/2 Return on parent shareholders funds = TTA consolidated net profit – unrealised exchange gains or losses

paid up share capital + share premium + legal reserve + retained earnings

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Remuneration and Bonus for the Board and Board Committees for the 2013 Financial Year Unit: Baht Board of Directors

Attendance Fees

Nomination Total and Corporate Risk (Standard Standard Board of Audit Executive Remuneration Governance Management and attendance Remuneration Bonus Directors Committee Committee Committee Committee Committee fees)

Name 1. Mr. Prasert Bunsumpun

Travel Allowance (only foreign directors) (USD)

1,800,000

594,000

836,000

3,230,000

140,000

225,000

120,000

15,000

500,000

2. Mr. Chalermchai Mahagitsiri 3. M.L. Chandchutha Chandratat

4. Mr. Chia Wan Huat Joseph

420,000

540,000

480,000

45,000

1,485,000

5. Mr. Krish Follett

420,000

540,000

672,000

36,000

1,668,000

6. Mr. Santi Bangor

420,000

540,000

520,000

180,000

54,000

1,714,000

7. Ms. Ausana Mahagitsiri

420,000

450,000

270,000

30,000

270,000

1,170,000

8. Mr. Ghanim Saad M. Alsaad Al-Kuwari

420,000

45,000

465,000

9. Mr. Mohammad Rashed Ahmad M. Alnasseri *

280,000

315,000

150,000

92,581

90,000

270,000

320,000

0 3,609,000 1,512,000

1,436,000

600,000

129,000

51,000

10. Mr. Yves Barbieux ** 11. Mr. Cherdpong Siriwit *** Total

280,000 4,692,581

745,000 20,000 182,581

3,000

870,000

12,029,581 23,000

Note: * Mr. Mohammad Rashed Ahmad M. Alnasseri became a Board member on 30 January 2013 and became a member of NRC on 14 February 2013. ** Mr. Yves Barbieux became a Board member on 12 July 2013. *** Mr. Cherdpong Siriwit became a Board member on 30 January 2013 and became a member of AC on 12 February 2013.

Remuneration and Bonus for the Board and Board Committees who resigned during the financial year 2013 Unit: Baht Board of Directors

Attendance Fees Nomination and Remuneration Audit Committee Committee

Risk Management Committee

Total Travelling Total Allowance (only (standard and foreign directors) attendance fees) (USD)

Standard Remuneration

Bonus

Board of Directors

1. Dr. Pichit Nithivasin

140,000

180,000

144,000

464,000

2. Mr. Oral Wilson Dawe

105,000

180,000

120,000

15,000

420,000

4,000

3. Mr. Peter Stokes

140,000

90,000

120,000

350,000

2,000

385,000

450,000

120,000

264,000

15,000

1,234,000

6,000

Name

Total

Note: - Dr. Pichit Nithivasin and Mr. Peter Stokes resigned from the Board of Directors on 30 January 2013. - Mr. Oral Wilson Dawe resigned from the Board of Directors on 26 December 2012.

Remuneration of Executives Remuneration of executives in the form of salary and bonus and other cash remuneration is as follows: Executive during financial year/full-year equivalent people

2013

Executive during financial year/full-year equivalent people

2012

Total salary and bonus

10 persons/7.37 persons

Baht 71.35 Million

8 persons/7.54 persons

Baht 66.03 Million

Other remuneration (Provident fund contributions by TTA)

10 persons/7.37 persons

Baht 6.21 million

8 persons/7.54 persons

Baht 5.63 million

Note: There are total ten (10) executives in financial year 2013. One executive resigned during the financial year.

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Remuneration of the directors and executives of four core subsidiaries being Thoresen Shipping Singapore Pte. Ltd., Mermaid Maritime Public Company Limited, Unique Mining Services Public Company Limited, and Baconco Co., Ltd. are shown below. 4.2 Thoresen Shipping Singapore Pte. Ltd. (1) Remuneration in cash a) No cash remuneration paid to directors of Thoresen Shipping Singapore Pte. Ltd. b) Total cash remuneration to two executives of Thoresen Shipping Singapore Pte. Ltd. for the financial year ended on 30 September 2013 consisted of salary and bonus amounted to SGD 750,474 (2) Other remuneration Other remuneration of directors None Other remuneration of executives None 4.3 Mermaid Maritime Public Company Limited (1) Remuneration in cash a) Total remuneration of eight directors of Mermaid Maritime Public Company Limited for the financial year ended on 30 September 2013 Unit: Baht Board of Directors

Name

Standard Remuneration

1. Mr. Prasert Bunsumpun 2. Mr. Chalermchai Mahagitsiri 3. M.L. Chandchutha Chandratat 4. Mr. Chia Wan Huat Joseph 5. Mr. Surasak Khaoroptham* 6. Mr. Ng Cher Yan 7. Mr. Toh Wen Keong Joachim 8. Dr. Jean Paul Thevenin ** Total Note :

900,000 600,000 500,000 645,000 645,000 406,452 3,696,452

Attendance Fees

Risk Total Audit Executive Nomination Remuneration Management (Standard and Bonus Committee Committee Committee Committee Committee attendance fees) - 420,000 - 675,000 - 450,000 265,000 - 1,810,000

720,000 480,000 1,200,000

138,000 150,000 225,000 87,071 600,071

138,000 225,000 150,000 87,071 600,071

7,475 4,983 12,458

1,620,000 1,783,475 500,000 1,695,000 1,470,000 850,577 7,919,052

Travel Allowance (Only foreign directors) 660,000 660,000 1,320,000

* Mr. Surasak Khaoroptham resigned from the Board of Directors in July 2013. **Dr. Jean Paul Thevenin was appointed as a director in January 2013.

b) Total remuneration of four executives for the financial year ended on 30 September 2013 consisted of salary and bonus amounted to Baht 19,127,680.- (2) Other remuneration Other remuneration of directors None Other remuneration of executives The Company provides provident funds to one executive with the contribution from the Company amounted to 7% of his based salary or Baht 318,150 for the financial year ended on 30 September 2013.

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4.3 Unique Mining Services Public Company Limited (1) Remuneration in cash a) remuneration in cash of nine directors for the financial year ended on 30 September 2013 2013 Attendance Fees (Baht/Year) Remuneration (Baht/Year)

Board of Directors

Nomination and Audit Remuneration Committee Committee

Name

Position

1. Pol. Gen. Chidchai Vanasatidya

Chairman of the Board

No director fee as he receives salary in the executive position of the Company

2. Mr. Chalermchai Mahagitsiri

Vice Chairman

No director fee as he receives salary in the executive position of the Company

3. Mr. Somporn Chitphentom*

Director

4. Mr. Chia Wan Huat Joseph

Chairman of Nomination and Remuneration Committee/Director

No director fee as he receives salary in the executive position of the Company

5. Ms. Ausana Mahagitsiri

Member of Nomination and Remuneration Committee/ Director

240,000

90,000

15,000

6. Mr. Ekavaj Amornvivat

Chairman of Audit Committee/ Independent Director

240,000

135,000

180,000

7. Mr. Suchart Thammapitagkul

Member of Audit Committee/ Member of Nomination and Remuneration Committee/ Independent Director

240,000

105,000

150,000

15,000

8. Pol.Lt.Gen. Kamrob Panyakaew* Member of Audit Committee/ Independent Director

180,000

90,000

105,000

9. Mr. Taratorn Wongprasat*

180,000

90,000

Independent Director

No director fee as he was appointed as director on 6 November 2013

Note: - Pol. Lt.Gen. Kamrob Panyakaew was appointed as an independent director and an audit committee member from 24 January 2013 - Mr. Taratorn Wongprasat was appointed as an independent director and an audit committee member from 24 January 2013. - Mr. Somporn Chitphentom replaced M.L. Chandchutha Chandratat as a director from 6 November 2013.

b) Total remuneration of eight executives for the financial year ended on 30 September 2013 consisted of salary amounted to Baht 18,186,166.66. Bonus was paid in December 2013 and is not included in this period. (2) Other remuneration Other remuneration of directors None Other remuneration of executives The Company provides provident funds to employees at the contribution rate 5%, 7% and 10%. In the financial year ended on 30 September 2013, none of the executives was member of Provident Fund of the Company. 4.4 Baconco Co., Ltd. (1) Remuneration in cash a) No cash remuneration paid to directors of Baconco Co., Ltd. b) Total cash remuneration to six executives of Baconco Co., Ltd. for the financial year ended on 30 September 2013 consisted of salary and bonus amounted to Baht 11,229,443. (2) Other remuneration Other remuneration of directors None Other remuneration of executives None THORESEN THAI AGENCIES PLC.

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Income Structure

Group of Business

Generated Company’s by Stake (%)

Revenue 2013

2012

2011

Transport Group

Shipping

100

4,937,883,434

3,740,694,553

5,685,562,845

Energy Group

Mermaid

57.14

8,349,682,130

5,687,063,854

5,479,585,371

UMS

88.68

1,931,065,483

3,427,649,084

3,275,623,527

Baconco

100

3,229,389,323

3,375,802,043

2,970,482,153

GTL/CMSS

51/100

269,794,242

245,423,364

265,758,037

312,560,107

315,369,280

1,696,842,460

19,030,374,719 100 16,792,002,178 100 19,373,854,393

100

Coal/Infrastructure Group Fertiliser/Infrastructure Group Others/Infrastructure Group Other income Total

Audit Fees Audit fees

Non-audit fees

The Company and its subsidiaries paid audit fees to audit firms for the last financial year of Baht 19,449,934.

The Company and its subsidiaries paid non-audit fees to audit firms for the last financial year of Baht 5,353,782, primarily relating to auditing the subsidiaries’ compliance to the conditions in the Approved International Shipping Enterprise (“AIS”) scheme, BOI’s certificates, tax filling and tax advice.

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RISK FACTORS Risk Management TTA focuses on the following risk categories: strategic, operational, compliance, and financial risks. The risk overview highlights the main risks known to TTA, which could hinder it in achieving its strategic and financial objectives. Some risks not yet known to TTA, or currently believed not to be material, could in the future have a major impact on TTA’s businesses, objectives, revenues, income, assets, liquidity, or capital resources. Risk management forms an integral part of the business planning and review cycle. The Company integrates risk analysis and controls into its daily operations, and management is responsible for identifying the critical business risks and for the implementation of fit-for-purpose risk responses. Taking risks is an inherent part of the business, so a structured risk management process encourages management to take risks in a controlled manner. Strategic risks and opportunities may affect TTA’s strategic ambitions. Operational risks include adverse unexpected developments resulting from internal processes, people and systems, or from external events that are linked to the actual running of each business. Compliance risks cover unanticipated failures to implement, or comply with, appropriate policies and procedures. Within the area of financial risks, TTA identifies risks related to foreign exchange, interest rate, and counterparty.

Strategic Risks TTA’s global operations are exposed to economic and political developments in countries in which it operates or trades.

For example, the high degree of unemployment in certain countries and the sustainable level of commodities demand growth in China directly affect the different businesses. Numerous other factors, such as fluctuation of energy and raw material prices, as well as global political conflicts, including the Middle East and other regions, could continue to impact macroeconomic factors and the international capital and credit markets. TTA may encounter difficulty in planning and managing operations due to unfavourable political factors including unexpected legal or regulatory changes, such as foreign exchange import or export controls, increased marine regulations, or restrictions on repatriation of returns from foreign investments. As emerging markets are becoming increasingly important in TTA’s operations, the above-mentioned risks are also expected to grow and could have an adverse impact on TTA’s financial condition and operating results. TTA manages this risk through ongoing periodic review of the strategic plans defined by each business unit. Such review focuses on preserving or enhancing competitiveness, indentifying additional growth opportunities, and responding to industry, regulatory, or macroeconomic changes or trends, which impact each business. In addition to the internal resources, management also consults industry and financial experts and frequently interacts with a number of reliable institutions and other sources to check information creditability and analyse differences among various assumptions. This ongoing review enables corrective actions to be taken well in advance of significant changes, which might impact the performance of the Group.

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As a number of our businesses are highly capital intensive, the timing, nature, pricing, and financing of investments in both existing businesses and new activities is critical. Rigorous investment criteria have been established and are closely followed in the course of any new investment discussions. Risks in connection with investment decisions are minimised by the use of detailed guidelines and multi-level review of all significant investments. As the Group has grown and added activities both domestically and internationally, the complexity of our operations and the skills required to effectively manage such operations has grown as well. The Group now has both majority-owned subsidiaries and associate companies, with a number of them listed on various stock markets. In addition to the regulatory and compliance risks (which are addressed below), the continuing growth of the Group, both in its existing businesses and through new investments, will create ongoing challenges to manage the various businesses and to ensure high quality human resources are in place to provide such oversight. To mitigate this risk, TTA has significantly increased efforts in the recruitment, training and development, and retention programmes to meet our anticipated personnel needs.

Operational Risks Transport group Risks relating to shipping business The dry bulk shipping company is exposed to risks of marine disaster, environmental mishaps resulting in substantial claims, cargo/property loss or damage, and business interruptions due to accidents or other events caused by mechanical failure, human error, political action in various countries, labour strikes, piracy, adverse weather conditions, and other such circumstances and events. This could result in increased costs or loss of revenues. However, to cover against most of these risks, which are standard for an international ship owner/operator, insurance covers are available in the international insurance industry. Accordingly, the dry bulk company is adequately covered against such aforesaid circumstances and events, although insurance premiums do vary with a company’s perceived THORESEN THAI AGENCIES PLC.

exposure to these risks. The operations of the Company are subject to extensive and changing regulations. Non-compliance with these regulations may result in the detention of ships leading to loss of revenues or claims from charterers, significant expenses for ship modifications or changes in operating procedures. However, the Company is vigilant on these issues and maintains operations in compliance with internationally prescribed safety and technical standards. The operations of the ships require skilled personnel to be employed as crew to operate its ships. Likewise, management requires skilled managers at the corporate level with appropriate technical knowledge and experience. Sourcing and retaining such personnel is crucial for the business operations of the dry bulk company. However, due to the adoption of fair and reasonable staffing policies, the Company has been successful in sourcing and retaining highly skilled and qualified personnel. As the dry bulk company increases its level of contracts of affreightment (“COA”), the exposure to changes in the oil price also rises. To mitigate this risk, the Company actively hedges bunker requirements for its COA’s. The shipping industry and market is cyclical, experiencing volatility in profitability, vessel values, and freight rates, resulting from changes in the supply of and demand for shipping capacity. In the Company’s opinion, given the uncertainty and the extreme volatility in the market where rates can shoot up or collapse very quickly, it is always prudent to secure future earnings, at reasonably high freight rates whenever possible, as a cushion against a sudden and, more particularly, a sustained collapse of the freight rates in the spot market. To limit this volatility, the Group’s objective is a diversified and balanced fleet employment. The Company employs a certain percentage of the fleet on period time charters, which are supplemented by COA’s and tramp services. The demand side of the Company’s business is generated by the quantity of cargo its vessels are required to transport. Severe depression in growth and trade could reduce the demand for ships. As with any commercial enterprise, the dry bulk company is exposed to counterparty risk. This is particularly true in times of financial hardship.

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However, the Company is always conscious of the counterparty risk associated with its period charters and takes appropriate evaluative steps before engaging in charters. Furthermore, regardless of credit-worthiness, the dry bulk company maintains rigid payment standards. It is for this reason that through the depressed market of the last year, the Company did not suffer any significant losses on account of defaults by charterers. The Company is not exposed to any risk of concentration of its business with any one customer and any loss of business from one such customer shall not have any significant impact on the Company’s business and will not result in sudden and significant loss of revenues. World events could affect the Company’s results and financial condition. In the past, political conflicts have resulted in attacks on vessels, mining of waterways, and other efforts to disrupt international shipping. Acts of piracy have also affected vessels trading in regions, such as the Middle East and South China Sea. Any of these occurrences could have a material adverse impact on the Company’s operating results and financial condition. The continued level of piracy attacks and our experience over the last three years have led it to provide significant additional passive deterrents, preparations, drills, procedures, and training of sea staff prior to entering and during transit of piracy-affected areas. These additional measures include full 360 degree razor wire fencing, accommodation and bridge protection, military level personal body and head protection, and mandatory use of patrolled sea corridors. Furthermore, we have purchased additional insurance coverage for protection against kidnap and ransom liabilities.

Energy Group Risks relating to the Group’s Offshore Services Business Mermaid provides offshore services to the oil and gas industry, and its business is affected by fluctuations in the prices of oil and gas, which impact the level of activity in oil and gas exploration, development, and production.

Depending on the market price of oil and gas, oil and gas companies may cancel or reduce their activities, thus reducing the demand for Mermaid’s offshore services. Demand for the Group’s offshore business is highly competitive and subject to periods of high demand, short supply, and high rates often followed by periods of low demand, excess supply, and low rates. The entry into the market of newly constructed, upgraded, or reactivated drilling or subsea engineering vessels will increase market supply and may inhibit the increase of rates or reduce them. Mermaid’s offshore services assets may be idle, or Mermaid may have to enter into lower rate contracts in response to market conditions in the future. In addition, as most of Mermaid’s subsea engineering services contracts are short-term in nature, changes in market conditions can quickly affect business. Further, as Mermaid’s offshore services business is project-based, its cash flow may not always be predictable and may be uneven. As a result of fluctuation in demand, its results of operations may be volatile. Mermaid’s strategy is to secure a number of different assets on long-term contracts. This provides a guaranteed earnings stream that is not affected by spot market conditions and provides a hedge against market volatility. The Group’s offshore services business is subject to a number of operating risks. Mermaid’s offshore services business is subject to various risks inherent in the oil and gas industry, such as fires, natural disasters, adverse weather condition, explosions, and encountering formations with abnormal pressures, blowouts, cratering, pipeline ruptures, and spills. A number of these risks could have severe consequences, including loss of human life or serious injury, significant damage to Mermaid’s or its clients’ assets and equipment, environmental pollution, personal injury litigation, political consequences, and damage to Mermaid’s reputation. Mermaid’s offshore services business is also subject to equipment failure risks, which may require long periods to repair and result in loss of revenue.

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A major system failure could result in substantial loss of life and or serious injury, damage to or loss of vessels and equipment and protracted legal or political disputes and damage to Mermaid’s reputation. Mermaid constantly invests substantial capital in the fleet, and insists upon a comprehensive maintenance and repair schedule, that minimises the risk of equipment failure. Furthermore, Mermaid maintains a high focus on safety at all times, with a comprehensive safety management system in place, with clear safety guidelines and detailed safety training and awareness programs. In addition, clients also regularly inspect the fleet and provide their input to ongoing repair and maintenance programs. There are a limited number of potential clients, particularly for the drilling business, and a limited number of projects available in the niche markets that Mermaid’s offshore services business operates in. Mermaid faces competition for both contracts and resources. Most contracts are generally awarded on a competitive bid basis, with price being the primary factor in determining contract award, the availability and capability of equipment and experience of the contractor may also be considered in determining the award. In any given year, a small number of contracts and projects account for a significant portion of Mermaid’s revenues and profitability. The loss of any single existing client for the drilling business could thus have a material adverse impact on the drilling business and potentially Mermaid’s revenues and profitability as a whole, if Mermaid is unable to secure new clients to replace such a client. Mermaid works hard to maintain good relationships and its good reputation with all its major clients, nor has Mermaid ever been technically disqualified from bidding for new contracts by clients with whom it has worked previously.

Infrastructure group Risks Relating to the Group’s Coal Logistics Business Transport related risks UMS imports coal from Indonesia regularly. The modes used are dry bulk vessels or ocean going

THORESEN THAI AGENCIES PLC.

barges. There are two potential risks related to this - availability of vessels and fluctuations in freight rates during any given period. UMS is well aware of these situations and addresses them through either fixed long term contracts with carriers and/or spot contracts. In the meantime, the Company’s dry bulk shipping business provides weekly updates and analysis on freight rate movements, allowing UMS to make fast and informed decisions. Risk related to coal procurement Major factors that affect procurement and cost are: i) Availability of supply at required specification/ quality ii) Prices of required specification/quality iii) Exchange rates Risks related to supply availability include mine capacity and demand requirements from major importers. UMS is also exposed to specification and quality risks that occur in Indonesia on a regular basis. UMS identifies on an annual basis its import volume requirements, as well as the desired specifications and quality. While the volumes may not be at the levels of the major import countries mentioned, the major Indonesian suppliers do participate in our bids of 50% of the volume or more. At the same time, specifications and quality requirements are managed strictly through the coal sourcing agreements that include rejection limits and penalties. From a pricing perspective, most of the coal indices are tied to world market rates. The price of coal will fluctuate based on global supply and demand. UMS closely monitors coal price indexes and through a balanced long term fixed and spot coal sourcing agreements is able to manage the cost of goods sold. Approximately 90 percent of UMS’ cost of goods sold is denominated in US dollars, while all of its revenues are in Thai Baht. Therefore, there is potential foreign exchange risk. When the Thai Baht depreciates, UMS’ cost of imported raw materials will be higher. UMS manages this risk through a policy of using forward contracts for all costs of imports and is therefore able to considerably mitigate foreign exchange rate risk.

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Risk from new competitors New competitors continue to enter the coal distribution market in Thailand. Previously it was seen that coal trading requires relatively minimal investment in terms of equipment and machinery. Increased competition has resulted in price undercutting and overall narrowing of gross margins for coal traders. UMS continues to retain its key strategies in order to differentiate its products from competitors. For example, UMS provides consultative recommendations to customers on the quality of coal to match each type of boiler by industry type, as well as provide advice to customers on technical and other services related enquiries. In essence, UMS screens and improves coal quality to be optimal for each type of boiler that is used by small and medium sized manufacturers. This ensures high efficiency for customers. More recently, with increasing community concerns related to coal processing, many local and provincial government bodies are strictly enforcing or adding additional protection requirements to protect communities and the environment. UMS upgrades its facilities on an ongoing basis to meet and exceed the requirements. UMS is ISO 14001 certified. Risk from substitute products and market expansion In general, primary energy resources used by domestic industries are fuel oil, natural gas, and coal. Fuel oil was the most popular choice among manufacturing companies due to its availability and ease of use (ease of maintenance). Natural gas is another choice for industry given its lower cost compared to fuel oil. Coal use as an energy source is still not widespread. While coal is a viable low cost source, many manufacturers are also looking to other sources such as palm husks, wood chips, and other bio mass fuels. Risk from communities and related environmental impacts Coal is classified into many types including anthracite, bituminous, sub bituminous, and lignite. Currently, UMS imports bituminous and sub-bituminous coal that generates low sulphur (sulphur content is in the range of 0.1-1.5% while sulphur content in fuel oil is

in the range of 0.1-3.0%). This creates less impact to the environment. To minimise negative perceptions and the potential for adverse environmental impact to communities, UMS engages in a closed manufacturing process that complies with government regulations. Specifically, UMS reduces particulate dispersion with a closed storage system, covering coal stockyards with plastic sheets, spraying water on coal stockpiles, building high fences around the warehouse, and planting trees around the land perimeter to trap particulates. UMS also covers trucks with plastic sheets and washes the truck tires prior to dispatch in order to prevent coal falling onto roads. Risks Relating to the Groupâ&#x20AC;&#x2122;s Fertiliser & Warehousing Business in Vietnam Risk related fertiliser raw material prices Global and domestic fertiliser raw material prices can be volatile. While this volatility cannot be completely eliminated, it is mitigated and minimised through two approaches: a) Maintain low inventories, therefore limiting exposure in a market down turn situation and b) Firm pricing and discount policies together with customer management based on superior quality and cash sales. Risk of fertiliser raw material procurement Baconco purchases raw materials from both domestic and overseas sources. In general, supply is balanced with a 50/50 split domestic and foreign. With Baconcoâ&#x20AC;&#x2122;s strategic policies of low inventory and just-in-time purchase of raw materials, it may be exposed to a higher probability of raw material shortage when global supply is tight. Baconco has established long term relations with a number of large and medium sized suppliers internationally. These suppliers continue to be very supportive of the company based on its quality commitments, adherence to contractual obligations, and prompt payment for materials. Domestic competition for fertiliser Vietnam is a highly competitive market for fertilisers and agrochemicals. There is currently an overcapacity of NPK production in Vietnam (bulk blending and

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granulation). In the next several years, more projects are being planned. Baconco has chosen a strategy of differentiation and concentrates on specialised products to limit exposure to competition. Overall, Baconco engages in over 50 different fertiliser formulas from generic market blends to highly specialised types. This is to ensure that Baconco stays ahead of the competition, which in general produces 10-15 product types. Baconco also engages in multiple production processes, as well as value adding its products with some unique processes such as compaction, USP, and bio coating of fertilisers. Through this approach, Baconco is able to maintain its high quality reputation and brand image. On-time delivery of fertiliser With Baconcoâ&#x20AC;&#x2122;s just-in-time production policy, finished products inventory is low. This could lead to a higher probability of delivery delays to customers. Baconco manages this risk with a good supply chain approach. The factory knows several weeks in advance about the incoming orders. Combined with a preventative maintenance program for machineries and equipment, production capacities are consistently maintained. Finally through automated bagging lines and loading processes, product is delivered to customers without delays. Foreign currency risks Baconco purchases half of its raw materials in USD and sells finished goods domestically in VND. Given there are constant devaluations of the VND by the Vietnamese government, foreign exchange risks exist. This foreign exchange risk may be managed by maintaining low inventories (based on the companyâ&#x20AC;&#x2122;s strategic policies) and a cash sales/payment policy resulting in zero customer debt. This approach has permitted Baconco to pay suppliers promptly and reduce USD exposure. Baconco is also engaged in exporting some of its production, thereby generating USD income, which is used to pay raw material suppliers.

THORESEN THAI AGENCIES PLC.

Risks related to regulatory compliance The Vietnamese government establishes specific standards for fertiliser formulas in order to protect consumers and penalties are enforced if products are not manufactured based on tested specifications. Baconco imports raw materials from reliable foreign and domestic suppliers and already has the reputation as a high quality producer of fertiliser. With the direction calls for innovation of production formulas, Baconcoâ&#x20AC;&#x2122;s products are always in compliance or above government stated standards.

Compliance Risks Risk from Regulatory Changes in Countries where TTA has investments TTA takes all possible measures to protect its own legal position and prevent legal risks from arising. The core of the programme is the TTA Code of Conduct, which defines ethical behaviour guidelines. This is complemented by training and testing programs, and a Whistle Blower Line for reporting compliance violations. Insofar as possible and practical, the Company limits liability and damage risks through insurance coverage, the type and scope of which is continually adjusted to meet current requirements. Environment, Occupational Health, Safety and Security Risk TTA adherence to high technical standards and rules of conduct minimises potential damage and thus ensures the continuity of plant and equipment. TTA updates these preventive measures regularly. We systematically conduct health and environmental safety audits at all locations. Through inspections and consultation, we minimise the risks to people and the environment. Risk from Social and Community Impacts To address these risks, TTA monitors and analyses the impacts of changes in environmental and safety laws and regulations on our operations. We closely coordinate with government agencies, apply available information to develop work plans and response measures, and ensure ongoing community relations activities in operating areas with a constant focus on community participation.

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Financial Risks The principal financial risks are foreign exchange risk, interest rate risk, and counterparty risk. The Group uses instruments such as cross currency and interest rate swap contracts, foreign currency forward contracts, bunker swap contracts, and freight forward agreements to manage various financial risks. The objective in using these financial instruments is to reduce the uncertainty over future cash flows. It is our policy not to enter into any derivative transactions for speculative purposes. Foreign Exchange Risk International maritime, offshore services, third-party logistics, and fertiliser businesses utilise the US dollar as the major currency for commercial transactions and asset acquisitions. Additionally, US dollar denominated loan facilities have been obtained to fund these US dollar generating businesses and investment. The Groupâ&#x20AC;&#x2122;s primary objective is to maximise the operating revenues and minimise costs in US dollars. This ensures an appropriate balance of foreign currency revenues against foreign currency commercial expenditures, asset acquisitions, and loan obligations. Residual exchange rate risks are managed through financial instruments, such as forward and swap contracts and foreign-currency deposits.

The Group has executed derivatives such as cross currency and interest rate swaps to fix our financial costs. Cross currency and interest rate swap contracts protect the Group from movements in exchange rates and interest rates. (Please see details in Financial Notes no. 31) Interest Rate Risk The Group seeks to manage its exposure to interest rate volatility and minimise its interest costs. Interest rate volatility is mitigated through actively managing the mix of fixed and floating interest rates on our borrowings and through the use of derivatives, such as interest rate swaps, on our longer-term borrowings. Furthermore, we actively manage the overall tenor of our loan portfolio to match with cash flows from operation. Counterparty Risk Most of our dry bulk freight income is normally paid by clients in advance, or prior to the corresponding cargoes being released to them. Most of our offshore services income comes from top-tier national or multinational oil and gas companies. As for coal sales, the largest customers are well-established public companies in Thailand and coal sales to each SME client are not significantly large. Almost all fertiliser sales are done in cash. We do not believe that counterparty risk is significant and that the cost of hedging such risk would outweigh the possible benefit. We therefore have not entered into any derivative contracts relating to this risk.

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Shareholdings by Directors/Executives Shareholdings by Directors as of 30 September 2013 (No. of Shares) As of Changes 30 Sept. 12 During the Year

Name 1. Mr. Prasert Bunsumpun

As of 30 Sept. 13

20,000

9,484

29,484

100,313,700

55,367,688

155,681,388

871,857

252,173

1,124,030

Spouse

4. Mr. Chia Wan Huat Joseph

Spouse

5. Mr. Krish Follett

Spouse

6. Mr. Santi Bangor

Spouse

27,417,100

12,966,840

40,383,940

Spouse

10. Mr. Yves Babieux (2)

Spouse

11. Mr. Cherdpong Siriwit (1)

Spouse

128,622,657

68,596,185

197,218,842

Spouse 2. Mr. Chalermchai Mahagitsiri 3. M.L. Chandchutha Chandratat

7. Ms. Ausana Mahagitsiri 8. Mr. Ghanim Saad M Alsaad Al-Kuwari 9. Mr. Mohammed Rashed Ahmad M.Alnasseri

Total

(1)

Note : (1) Mr. Mohammed Rashed Ahmad M.Alnasseri and Mr. Cherdpong Siriwit became directors on 30 January 2013. (2) Mr. Yves Babieux became a director on 12 July 2013.

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Shareholdings by Executives as of 30 September 2013

(No. of Shares) As of Changes 30 Sept. 12 During the Year

Name 1. Mr. Chalermchai Mahagitsiri

As of 30 Sept. 13

100,313,700

55,367,688

155,681,388

871,857

252,173

1,124,030

138,681

(138,681)

4. Mr. Krailuck Asawachatroj

Spouse

5. Mr. Somporn Chitphentom(2)

Spouse

17,274

(17,274)

7. Mr. Prithayuth Nivasabutr

60,340

(60,340)

8. Ms. Urai Pluemsomran

94,370

61,706

156,076

9. Mrs. Thitima Rungkwansiriroj

16,177

(16,000)

177

101,512,399

55,449,272

156,961,671

2. M.L. Chandchutha Chandratat Spouse 3. Mr. David Lawrence Ames Spouse (1)

6. Mr. Vichai Chuensuksawadi Spouse

Total

Note: (1) Mr. Krailuck Asawachatroj became an executive officer on 16 July 2013. (2) Mr. Somporn Chitphentom became an executive officer on 1 October 2013.

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Shareholding Structure Major Shareholders Thoresen Thai Agencies Public Company Limited As of 29 November 2013 (The latest share register book closing date) No.

Shareholders

Number of Shares

Percentage

155,681,388

15.67

Mr. Chalermchai Mahagitsiri

Raffles Resources 1 Ltd.

52,293,275

5.26

Ms. Ausana Mahagitsiri

40,383,940

4.06

Thai NVDR Co., Ltd.

28,153,597

2.83

Mr. Prateep Tangmatitham

20,982,460

2.11

State Street Bank Europe Limited

15,748,604

1.59

East Fourteen Limited-Dimensional Emer Mkts Value FD

14,900,427

1.50

Mr. Nurak Mahatana-anon

10,838,500

1.09

State Street Bank And Trust Company

8,259,500

0.83

Nortrust Nominees Ltd.

8,166,900

0.82

Total

355,408,591

35.76

Other shareholders

638,187,900

64.24

Total of shares

993,596,491

100.00

Number of shareholders

Number of Shares

Percentage

20,427

866,019,033

87.16

106

127,577,458

12.84

20,533

993,596,491

100.00

10.

Proportion of Shareholding Thoresen Thai Agencies Public Company Limited As of 29 November 2013 (The latest share register book closing date) Share Distribution by Nationality Thai Foreign Total of Shareholders

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Dividend Policy The timing and amount of dividends, if any, will depend on our operational results, financial condition, cash requirements and availability, restrictions in financing agreements, and other factors deemed relevant by our Board. Because we are a holding company with no material assets other than the shares of our subsidiaries and affiliates, our ability to pay dividends on the common shares depends on the earnings and dividend distributions of our subsidiaries and affiliates. TTA has established a policy to distribute dividends of at least 25% of the consolidated net profit after tax but excluding unrealised foreign exchange gains or losses, subject to the Company’s investment plans and other relevant factors. The Board may review and revise the dividend policy from time to time to reflect the Company’s future business plans, the needs for investment, and other factors, as the Board deems appropriate. However, dividend distributions may not exceed the retained earnings reported in the financial statements of the Company only.

The declaration and payment of dividends will always be subject to Thai law. For example, Thai law prescribes that the declaration and payment of dividends is subject to the discretion of the AGM on the recommendation of the Board (for final dividends) or at the discretion of the Board (for any interim dividends). Furthermore, Thai law generally prohibits the payment of dividends other than from profits (net profits plus retained earnings less any accumulated losses) and provided that the company first maintains a minimum reserve fund of 10% of the capital of the company, or higher if determined by company regulations, and cannot be made while a company is insolvent or would be rendered insolvent by the payment of such a dividend. Most of our subsidiaries have adhered to a policy to pay dividends to TTA at not less than 70% of their net profit, except for the smaller shipping services companies, Mermaid, and UMS. As listed companies on the SGX-ST and MAI, respectively, their Board of Directors must apply the same level of care and judgement when recommending dividends as the TTA Board. Mermaid’s and UMS’s possible dividend payments will depend on various factors, including return on equity and retained earnings, expected financial performances, projected level of capital expenditures and other investment plans, and restrictions on payment of dividends that may be imposed by its financing arrangements.

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Corporate Governance Report Corporate Governance is a structure and process of relationships between a company’s shareholders, board of directors, and management with an underlying objective to enhance its long-term competitiveness and shareholder value. At the Board of Directors’ meeting on 21 December 2011, the Board established a Corporate Governance Committee (the “CGC”) to review corporate governance practices and the Code of Conduct and to monitor compliance of the practices so that it remains within an ethical framework. The CGC reviewed the Company’s Corporate Governance Policy, which was approved by the Board of Directors on 24 December 2012. TTA’s corporate governance principles are as follows:  Rule

of law: Management and operations shall be in line with relevant laws, charters, regulations, and board resolutions  Accountability:

all concerned parties have to be aware of their duties and responsibilities  Transparency:

Business activities and operations shall be auditable and transparent  Participation:

Recognition of the rights of shareholders and stakeholders to participate in company activities

 Value

for money: All investments and resource utilisation must meet targeted financial and economic returns The main components of TTA’s Corporate Governance Policy are set in accordance with the guidelines of the Stock Exchange of Thailand are as follows: 1. Rights and Equitable Treatment of Shareholders 2. Rights of Stakeholders

THORESEN THAI AGENCIES PLC.

3. Information Disclosure and Transparency 4. Structure and Responsibilities of the Board of Directors 5. Business Ethics and Code of Conduct The CGC has reviewed this report and is of the opinion that TTA has generally followed the corporate governance practices discussed herein. The CG practices in the 2013 financial year were as follows:

1. Rights and Equitable Treatment of Shareholders (A) GENERAL RIGHTS AND EQUALITY TTA is accountable to its shareholders in terms of information disclosure, accounting methods, use of insider information, and conflict of interest. TTA recognises the duty to ensure fair treatment to all shareholders. TTA has a duty to protect shareholders’ benefits and rights, which include, among other things, the rights to receive dividends and obtain relevant and adequate information from the Company on a regular and timely basis. TTA also has a duty to disseminate transparent information and ensure management accountability through shareholders’ meeting arrangements. Each shareholder shall receive, prior to any shareholders’ meeting, complete and sufficient information concerning the proposed agenda attached to the meeting notification. All shareholders are given proxy forms, allowing them to appoint their authorised representative or select an independent director to attend and vote at the meetings on their behalf.

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To increase communication channels and shareholder interaction, the Board has implemented a policy to give shareholders an opportunity to propose agenda items for future shareholders’ meetings. Shareholders are able to send their questions to us and propose agenda items to the Board for consideration via our website prior to any shareholders’ meetings. Guidelines that allow shareholders to nominate directors are also posted on our website. TTA allows shareholders to submit agenda items and director nominations through 30 September of each year to provide sufficient time to consider all agenda items. The policy to include agenda items and recommend director nominations is posted in TTA’s website under Investor Relations.

(B) SHAREHOLDERS’ MEETINGS TTA conducts shareholders’ meetings in accordance with applicable laws and generally accepted practices, which allow shareholders to exercise their rights fully and in an informed manner. Within four (4) months after our financial year-end, TTA organises an Annual General Meeting of Shareholders (“AGM”). The meeting is conducted in accordance with applicable laws and SET requirements, from the calling of the meeting, the notification of the meeting agendas, the dispatch of meeting materials, the conduct of the meeting, and the distribution of minutes. In addition, TTA publishes the notice of each meeting in at least one Thai language and one English language in a daily newspaper for three consecutive days no later than three (3) days prior to each AGM. We also publish the meeting notice on our website. In FY 2013, TTA held two shareholders’ meeting, namely the 1/2013 Extraordinary General Meeting of Shareholders (the “1/2013 EGM”) held on 14 December 2012 and the 1/2013 Annual General Meeting of Shareholders (the “1/2013 AGM”) held on 30 January 2013. Procedures for the Shareholders’ meeting were as follows: (i) Procedures prior to the meetings The 1/2013 EGM was held on 14 December 2012 at 9:00 A.M. at the the Plaza Athenee Bangkok. The 1/2013 AGM was held on 30 January 2013 at 1:30 P.M. the Imperial Queen’s Park Hotel, Bangkok.

The meeting venues are easily accessible through public transportation systems and convenient for shareholders to travel to them. The Company informed shareholders of the date, time, place, and meeting agendas together with the rationales or details of all Board resolutions on each agenda via SET’s ELCID on the following day after the Board resolved to call the shareholders’ meetings. TTA uses the shareholders record date to ensure sufficient time to scrutinise meeting notices or request additional information ahead of the meeting. The notice and relevant documents to the 1/2013 EGM was sent to shareholders and the SET on 4 December 2012. The notice and relevant documents to the 1/2013 AGM was sent to shareholders and the SET on 8 January 2013, which was at least fourteen (14) days prior to the meeting. Going forward, the Company will make best efforts to send all meeting notices to shareholders more than 14 days prior to the meeting as per the SET’s best practices. The notice was also made available on TTA’s website in advance so that shareholders have sufficient time to study the information to make their decisions. Each agenda included the opinion of the Board. The Company encourages all shareholders to attend the Company’s shareholders’ meetings. Apart from direct mailings, the Company notified its shareholders via SET’s ELCID that the 1/2013 EGM’s meeting notice and relevant documents were available to download on the Company’s website on 6 December 2012. The 1/2013 AGM’s meeting notice and relevant documents were available to download on the Company’s website on 10 January 2013. The Company also advertised the meeting notice in at least one Thai language and one English language in a daily newspaper for three consecutive days no later than three (3) days prior to the shareholders’ meeting date. The notice of the 1/2013 EGM and AGM were advertised on 8-10 December 2012, and on 21-23 January 2013, respectively. In addition, details such as time and place of the meeting, the meeting agendas with rationale and opinion of the Board on each agenda item in the notice of the annual general meeting or extraordinary general meeting, proxy forms, and a list of documents required for attending the meeting were distributed to shareholders in advance of meetings to assist them in exercising their rights and casting their votes on each agenda item. THORESEN THAI AGENCIES PLC.

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(ii) At the shareholders’ meeting

2. Rights of Stakeholders

In the shareholders’ meetings, TTA facilitated registration by separating lines between shareholders and proxy holders. TTA used a bar code system to register meeting attendees and to countvotes. Envelopes were made readily available for shareholders to mail their proxy forms. The e-voting programme of the Thailand Securities Depository Co., Ltd. (“TSD”) was also used in the registration and vote count, increasing efficiency and transparency.

TTA acknowledges the importance of all stakeholder groups. Recognising their contribution to our competitiveness and profitability, the Company takes into consideration the interests of both internal stakeholders, namely shareholders, employees, and management and external stakeholders such as creditors, suppliers, clients, communities, government agencies, and other related organisations. To safeguard their rights, TTA complies with all applicable laws and regulations and has established adequate internal controls and auditing systems to monitor compliance.

(iii) During the meeting The Chairman of the Board of Directors presides over the meetings of shareholders. For shareholders’ convenience and clarification, multimedia presentations are shown during all meetings. TTA conducts the meeting in accordance with the agenda and offers an equal opportunity for each shareholder to cast their vote. In the 1/2013 EGM and AGM meetings, legal advisors from HNP Counsellors Limited were engaged to act as independent inspectors to monitor the registration and the counting of votes, and the Chairman asked for two shareholders to bear witness to the vote counting, with two shareholders nominating themselves as witnesses, to ensure the meetings ware transparent and complied with applicable laws. TTA was rated “excellent” (scores ranging between 90-99) from the Corporate Governance Report of Thai Listed Companies for the quality of AGM organisation in 2007-2013. The assessment results were based on the assessment form of the SEC in conjunction with the Listed Companies Association and Thai Investors Association. (iv) Procedures following the meeting The Company submitted to the SET the resolutions of the shareholders’ meetings with details of voting results of each agenda through the SET’s ELCID and also posted the resolutions immediately in TTA’s website at http://www.thoresen.com. The Company prepared and submitted the minutes of the shareholders’ meetings to the SET and the Business Development Department, Ministry of Commerce within the required time frame after the meeting. The minutes were also posted on our website. THORESEN THAI AGENCIES PLC.

(A) ANTI-CORRUPTION EFFORTS TTA conducts business with strong ethics and responsibility for all concerned parties. The Company’s Code of Conduct was published in 2010 to provide guidelines in line with TTA’s business philosophies. The Company has clear guidelines on receiving gifts and entertainment. No gift, favour, or entertainment should be accepted or given, if it obligates or might be perceived as an attempt to influence fair judgement. No director, manager, employee, and their family members should accept or receive a gift or entertainment if it is (i) not consistent with customary business practices, (ii) extravagant in value, (iii) can be construed as a kickback, bribe, or payoff in violation of any laws, and (iv) violates any other laws or regulations. The Company set up a Procurement Policy to protect fraud by outlining procurement procedures and authorities of purchasing officers and Purchasing Committee. Purchasing Committee and Acceptance Committee shall not be the same group of people. The Company has established notification channels via TTA’s website and via TTA’s P.O. Box No. 33 to report any concerns, misconduct, fraudulent act, or corruption to the Audit Committee and to provide protection for any person who files a complaint or cooperates in the investigation of the charge (the “Whistleblower Policy”).

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(B) SHAREHOLDERS TTA always makes an effort to maximise shareholders’ long-term benefits through careful consideration of business risks. All information shall be disclosed fairly and transparently in a timely manner and use our best efforts to protect our assets and reputation.

(C) EMPLOYEES Employees are regarded as valuable assets of the Company. We continually seek to recruit and retain capable and experienced employees in accordance with our strategic and operating plans. We emphasise the importance of employees’ development at all levels by the implementation of Individual Development Plans that allow employees to create development plans concerning their individual needs. We strongly believe that improvement of our employees’ capabilities will ultimately increase our competitiveness in the long run.

(D) COUNTERPARTIES TTA conducts business affairs with our partners, competitors, creditors, suppliers, etc. according to the contracted terms and conditions in a fair and ethical manner.

(E) CLIENTS

TTA encourages employees to improve their office environments and their communities. TTA’s O c c u p a t i o n a l H e a l t h a n d S a fe t y Wo r k i n g Environmental Committee was established to improve the office environments. Details on our responsibility to the community, society, and environment can be reviewed from the Corporate Social Responsibility Policy in this annual report.

3. Information Disclosure and Transparency TTA has strong determination to reveal timely and updated information, both financial and general information related to the Company’s business. Such information is disclosed to shareholders, investors, and any related parties via SET’s ELCID, the Company’s website (www.thoresen.com), press releases, the Company’s Annual Information Disclosure Form 56-1, and the Company’s Annual Report. TTA actively participates in “Opportunity Days” arranged by SET on a quarterly basis. In FY 2013, we met and provided information to interested parties on various occasions as follows: 1. One-on-one meetings with shareholders, creditors, and analysts (48 meetings) 2. Quarterly meetings with analysts to discuss our most recent financial performance (3 meetings)

TTA recognises that clients are crucial to the success of our operations. Accordingly, we ensure our clients’ satisfaction by offering high-quality services that meet their needs and expectations in a fair and professional manner.

3. Investor conferences (10 conferences)

(F) INTELLECTUAL PROPERTY

6. Disclosure of periodic reports, such as financial statements, quarterly financial statements, annual report, the Company’s Annual Disclosure Form (Form 56-1), and quarterly financial results (14 disclosures)

TTA aims to comply with legal requirements on intellectual property and copyrights. TTA has issued an Information Technology Policy that requires proper licenses for all installed software on the Company’s computers.

(G) RESPONSIBILITY TO THE COMMUNITY, SOCIETY, AND ENVIRONMENT TTA aims to achieve consistently high standards of behaviour towards society and the environment. We will manage the business with the goal to alleviate the adverse effects on the environment and ensure compliance with environmental laws and regulations.

4. Road shows (3 road shows) 5. Quarterly presentation at the SET’s Opportunity Day (4 presentations)

7. Disclosure of non-periodic reports, such as the notification of general meeting of shareholders and its resolutions, asset acquisitions, and investments (40 disclosures) 8. Press releases (22releases) 9. Distribution of news and photo releases about the Company’s activities (6 releases) 10. Media relations activities (15 local media interviews and 14 international media interviews)

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4. Structure and Responsibilities of the Board of Directors (A) BOARD STRUCTURE The size of the TTA’s Board complies with Public Limited Companies Act B.E. 2535 and the Company’s Articles of Association. All directors have a number of duties and responsibilities as specified in the Articles of Association. In conducting the Company’s business, a director shall perform his duty with responsibility, due care and loyalty, and shall comply with all laws, the objectives, the articles of association, and the resolutions of the shareholders’ meetings. (i) Independent Director An independent director is a director who does not manage TTA or any of its subsidiaries, is independent

from management and major shareholders, and has no business dealings with TTA, which may compromise our interests and/or the shareholders’ interests. The main qualifications of an independent director are as per the definition of the Notification of the Capital Market Supervisory Board. The definition of an independent director is also available on the Company’s website. (ii) Members of the Board of Directors TTA has eleven (11) directors on the Board, which consists of two (2) executive directors (18% of the total number of directors), nine (9) non-executive directors (82% of the total number of directors), and five (5) independent directors (45% of the total number of directors). The Board as of 30 September 2013 consisted of the following persons:

Members of the Board of Directors as of 30 September 2013 Name

Position

1. Mr. Prasert Bunsumpun

Chairman of the Board/Chairman of Executive Committee

2. Mr. Chalermchai Mahagitsiri Executive Vice Chairman/Member of Executive Committee/Member of Risk Management Committee/President & Chief Executive Officer (effective on 1 January 2013) 3. M.L. Chandchutha ChandratatPresident & Chief Executive Officer (resigned, effective on 31 December 2013)/ Member of Executive Committee 4. Mr. Chia Wan Huat Joseph

Member of Executive Committee/ Member of Corporate Governance Committee

5. Mr. Krish Follett

Chairman of Audit Committee/Chairman of Risk Management Committee/ Independent Director

6. Mr. Santi Bangor

Chairman of Nomination and Remuneration Committee/ Chairman of Corporate Governance Committee/ Member of Audit Committee/Independent Director

7. Ms. Ausana Mahagitsiri

Member of Nomination and Remuneration Committee/ Member of Corporate Governance Committee/Non-Executive Director

8. Mr. Ghanim Saad M. Alsaad Al-Kuwari

Independent Director

9. Mr. Mohammad Rashed Ahmad M. Alnasseri

Member of Nomination and Remuneration Committee

10. Mr. Yves Barbieux

Director

11. Mr. Cherdpong Siriwit

Member of Audit Committee/Independent Director

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(iii) Segregation of Positions

(i) Company Secretary

The Board elects one of its non-executive directors as Chairman. The Chairman and President & Chief Executive Officer are two separate individuals. The Chairman oversees the implementation of policies and guidelines pursuant to the strategies established by the Board and management and ensures that Board meetings are successfully conducted. During each meeting, all directors are encouraged to actively participate and raise essential questions.

The Board appointed Ms. Mantanee Surakarnkul as the Company Secretary on 14 August 2008 to take responsibility for matters connected with meetings of the Board and the shareholders and to contribute to best corporate governance practices. She also serves as the secretary of the Board and Corporate Governance Committee to coordinate subsequent actions under the Board’s resolutions.

The authorities of the Board and management are clearly defined and segregated. At the same time, the Board stays away from routine tasks or business activities under management responsibility. (iv) Directors’ Term of Service on Board Duration of Each Term Under the Articles of Association, at every Annual General Meeting of Shareholders, one-third of the Board, or if the number is not a multiple of three, the number nearest to one-third, shall retire from office. In choosing those directors who retire, length of service on the Board should be considered, so that those who have served the longest are most eligible to retire. The term of each director is approximately 3 years. A retiring director is eligible for re-election. Number of Consecutive Terms of a Director is Permitted to Serve The Company believes that each of its elected directors is a highly qualified individual who is respected for being knowledgeable, moral, and effective. If shareholders show confidence in a director by re-electing him or her, the Board will honour that decision. Therefore, the Company does not set a limit on consecutive terms of service by a director. However, the Board of Directors will consider suitable solutions regarding consecutive terms of directors and independent directors in due course.

(B) COMPANY SECRETARY AND BOARD COMMITTEES The Board has appointed the Company Secretary and five (5) committees, namely the Audit Committee, the Nomination and Remuneration Committee, Executive Committee, Risk Management Committee, and Corporate Governance Committee.

The Company Secretary’s duties and responsibilities include:  To provide advice pertaining to TTA’s regulations and

Articles of Association, to monitor new laws and regulations on a regular basis, and to report any significant changes to the Board;  To arrange meetings of shareholders and the Board

in accordance with applicable laws and regulations;  To

prepare minutes of shareholders’ and Board meetings and to monitor execution of such resolutions on a regular basis;  To ensure that all public information disclosure is in accordance with laws and the SEC’s and SET’s regulations;  To facilitate the Board’s activities, including director

orientation; and  To

file and keep records of TTA’s key documents, such as directors’ registration, notice to the meetings, minutes of meetings, annual reports, notice to shareholders’ meetings, and reports on directors’ and management’s interest. Details of the Company Secretary’s functions are available on the Company’s website and in the Company’s Annual Information Disclosure Form (Form 56-1). The Company encourages the Company Secretary to attend courses relating to company secretarial functions, including the Director Certification Program, Company Secretary Program, and Effective Minutes Taking. (ii) Audit Committee The Audit Committee (“AC”) is comprised of at least three (3) independent directors. The AC has full-delegated authority from the Board to perform its tasks. An audit plan and meeting

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schedule are set each year to allow the AC to monitor management on the key risks identified in TTA’s annual business plan. As of 30 September 2013, the Audit Committee (“AC”) included Mr. Krish Follett (Chairman), Mr. Santi Bangor, and Mr. Cherdpong Siriwit. All AC members are independent directors. During FY 2013, the Audit Committee convened 14 meetings. Appointment of the Auditors and Fixing the Auditing Fee The Board assigned the AC to consider and propose the appointment of the external auditors and the auditing fee to shareholders for approval at every AGM. At the 2013 AGM, the shareholders approved the following items: 1. The appointment of Mr. Veerachai Ratanajratkul, CPA No. 4323, Mrs. Siripen Sukcharoenyingyong, CPA No. 3636, Mr. Charoen Phosamritlert, CPA No. 4068, or Ms. Pornthip Rimdusit, CPA No. 5565, of KPMG Phoomchai Audit Ltd. as auditors for the 2013 financial year. 2. The audit fee in the amount of Baht 3.20 million to review and audit TTA’s financial statements and consolidated financial statements. The AC advised the Board of its assessment and recommendation for the appointment of the external auditors and the auditing fee. The AC has proposed to appoint KPMG Phoomchai Audit Ltd. as external auditors of the Company to our shareholders at the next AGM to be held on 30 January 2014. (iii) Nomination and Remuneration Committee The Nomination and Remuneration Committee (“NRC”) comprises at least three (3) non-executive directors. At the Board of Directors meeting held on 13 May 2011, the Board approved the Nomination and Remuneration Committee Charter. As of 30 September 2013, the NRC included Mr. Santi Bangor (Chairman), Ms. Ausana Mahagitsiri, and Mr. Mohammad Rashed Ahmad M. Alnasseri.

THORESEN THAI AGENCIES PLC.

The NRC’s main tasks include the determination of the process and criteria for the selection and qualification of candidates nominated in accordance with the Board’s recommended structure, size, and composition. It reviews and opines on all candidates nominated (whether by the Board, shareholders, or otherwise) for appointment to the Board. The NRC is authorised by the Board to assess the performance of top executives, including the President & CEO and Executive Vice Presidents on an annual basis in order to determine their remuneration before proposing to the Board for approval. The NRC will also consider the remuneration of non-executive directors and propose it to the Board to recommend to the Company’s shareholders for approval. The Board sets the level of remuneration for all non-executive directors within the limits approved by shareholders and in line with the Thai Institute of Directors Association guidelines regarding Director Compensation Best Practices (September 2006). (iv) Risk Management Committee At the Board of Directors meeting held on 14 May 2010, the Board approved the appointment of the Risk Management Committee (“RMC”) and on 14 December 2010, the Board approved the Risk Management Committee Charter. The RMC members comprise a minimum of four (4) members from the Company’s directors and executives. As of 30 September 2013, the RMC included Mr. Krish Follett (Chairman), Mr. Chalermchai Mahagitsiri, the President & Chief Executive Officer, and Executive Vice President, Corporate Finance & Accounting. The Executive Vice President, Corporate Risk, and Compliance acts as secretary of the RMC. There were 2 (two) RMC meetings in FY 2013. The RMC’s main tasks include reviewing the effectiveness of the enterprise risk management system and be assured that material risks are identified and appropriate risk management processes are in place, including the formulation and subsequent updating of appropriate group wide policies.

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(v) Corporate Governance Committee

At the Board of Directors meeting held on 28 November 2011, the Board approved the appointment of the Corporate Governance Committee (“CGC”) and on 21 December 2011, the Board approved the Corporate Governance Charter. The Corporate Governance Committee (the “CGC”) comprises a minimum of three (3) non-executive directors.

(i) Potential Conflict of Interest Transactions and Inter-Company Transactions

As of 30 September 2013, the CGC included Mr. Santi Bangor (Chairman), Ms. Ausana Mahagitsiri, and Mr. Chia Wan Huat Joseph. During FY 2013, the CGC convened 3 meetings. The CGC’s main tasks include reviewing the Corporate Governance Policy and the Code of Conduct and to monitor compliance, so that TTA operates within an ethical framework and to monitor ongoing improvements. In 2012, the CGC reviewed the Corporate Governance Policy and evaluated Board performance through a self assessment process. The CGC has also developed guidelines of representative directors. (vi) Executive Committee At the Board of Directors meeting held on 14 February 2012, the Board approved the appointment of the Executive Committee (“EC”) and on 15 March 2012, the Board approved the Executive Committee Charter. The Executive Committee (the “EC”) comprises a minimum of four (4) members from the Company’s directors and executives. As of 30 September 2013, the EC included Mr. Prasert Bunsumpun (Chirman), Mr. Chalermchai Mahagitsiri, M.L. Chandchutha Chandratat, and Mr. Chia Wan Huat Joseph. During FY 2013, the EC convened 12 meetings. The EC’s main tasks include considering the Company’s business plans and annual budget for presentation to the Board, considering overall investment and financing strategies, and approve transactions within its delegated authorities.

Since 2009, directors and executives have been required to submit a report that summarises their related persons’ interests and securities ownership in other companies. This information is filed with TTA and used to monitor potential related party or connected transactions. New TTA directors and senior executives shall submit this report within thirty (30) days after being appointed. In case there are changes in related persons and close relatives, directors and executives shall submit a revised report to TTA within fourteen (14) days after changes occur. Directors, executives, and employees must refrain from any transactions that may lead to a conflict of interest with TTA. Any interested directors, executives, and employees are not allowed to participate in the decision-making process. In particular, directors are prohibited from considering or casting their votes on matters in which they may have a potential conflict of interest. (ii) Monitoring Insider Trading The Board prohibits directors, executives, and employees from using an opportunity or information acquired while working in their positions to seek personal benefit or to establish a competing or related business with TTA. This includes a complete prohibition against using material insider information to buy or sell TTA’s shares and securities for their own interest and against giving insider information to other persons or entities to buy or sell TTA’s shares and securities. Directors and executives are required to report trading transactions in TTA’s shares and securities and their ownership position whenever changes occur. The Company prohibits all directors and senior executives to trade in TTA’s shares and securities during the period of three (3) weeks prior to the release of our quarterly and annual financial results (the “Blackout Period”). This prohibition applies to entities in which our directors have a beneficial interest, are employed by, or act as a representative thereof. The Company Secretary will remind directors and executives about this restriction at least seven (7) days in advance of the Blackout Period. THORESEN THAI AGENCIES PLC.

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(D) INTERNAL CONTROL The Company has defined internal control as a process that is influenced by the Board, the AC, the President & Chief Executive Officer, management, and other employees and is formulated to provide reasonable assurance that the Company achieves effectiveness of its business activities, reliable financial reporting, and compliance with applicable laws and regulations. The internal control structure consists of organisational arrangements with clearly defined lines of responsibility and delegations of authority, and comprehensive systems and control procedures. The Internal Audit Department (“IAD”) is an independent department that reports directly to the AC. The IAD assists the AC and the Board by performing regular assessments and evaluations on the Company’s internal controls control environment, financial and accounting matters, compliance, business and financial risk management policies and procedures, and ensuring that internal controls are adequate to meet the Company’s requirements. The findings are discussed with the relevant parties and, when necessary, improvements are made. The follow-up of these agreements is reported to the AC and the Board. The Company has internal control and risk management systems based on the framework of the Committee of Sponsoring Organisations of the Treadway Commission (“COSO”) governing business operations and management processes. The Company has focused on five main components as follows; 1. Organisational Control Environment The Company encourages and promotes a good working environment by setting policies, and planning, executing, controlling, and monitoring all business activities. The Company has also established a suitable organisational structure and adheres to its business philosophies and ethics. The Company expects all management to be honest and ethical and act as role models for all employees. All stakeholders are treated with fairness and respect and in such a way that adheres to good corporate governance principles.

THORESEN THAI AGENCIES PLC.

The Board has appointed the AC to oversee matters concerning the monitoring of the Company’s financial reporting and the efficiency of internal controls in relation to the financial reporting. Employee authorities and responsibilities are also clearly determined at each level. The fundamental values described in the Code of Conduct apply to every employee. The Code of Conduct creates a climate rooted in focus on the customer, achievement, mutual respect, teamwork, and trust. In addition, business goals have been formulated for employees to follow and have been closely monitored. Moreover, the Company defines all job descriptions, job specifications, and assigned suitable authorities and responsibilities. The Company recognises that a proper control environment will lead to work efficiency and effectiveness. 2. Risk Assessment The Company’s management has reviewed its risk policies, frameworks, and plans. Management and staff have been trained on the importance of risk management so that everyone is prepared to mitigate or resolve identified risks in a timely fashion. The Company is promoting a risk awareness culture, in which risk management is everyone’s responsibility. A risk management structure has been systematically created. Risk management plans and measures have been formulated where both internal and external risk factors possibly affecting the Company’s businesses and operations are assessed. The risk assessment also results in control targets for how risks are to be managed through various control structures. Risk management monitoring plans are carefully reviewed before being reported to the Board .The Board appointed the RMC to review the risk management framework and structure and provide recommendations that align with strategic business directions and plans, while supervising, monitoring, and reviewing key outcomes of risk management reporting to ensure their alignment with standards and prevailing circumstances. 3. Control Activities Authority and approval assignments have been defined for each department and are monitored regularly. The transactions amongst the Company and its

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related parties have been carefully controlled by upholding its best interests as if the Company were dealing with outside parties on an arm’s length basis and conform to SEC and SET requirements. In addition, the Company recognises the importance of internal control systems on an operational level to ensure that operations are conducted efficiently. Powers and duties of operations and management level personnel are laid down clearly, including proper segregation of duties between the operations units, control units, and assessment units for the purpose of maintaining appropriate checks and balances. There is a proper level of control maintained on the utilisation and valuation of our property/assets. 4. Information and Communication Information technology has been developed to ensure efficient business operations and to serve management’s needs. The Company recognises the importance of accuracy, reliability, and prompt information and communication. The primary objective is the provision of accurate and timely data for decision-making. It also has an effective information security system, including a contingency plan to protect the information system when there are serious incidents that may cause system failure. Furthermore, the Company deploys an audit trail system that can track back and review historical data. An internal control system for the financial and accounting functions is clearly set up, which allows adequate reporting to the relevant management. The Company complies with the Computer Offense Act and computer traffic data as required by the Ministry of Information and Communications Technology. The Company also has invested in an effective communication system, including internal and external channels. The internal communication manages through various channels such as quarterly town hall meetings, the Company’s intranet, and email. The accounting records conform to generally accepted accounting standards, and the accounting files are updated regularly.

5. Monitoring Since the existing systems provide prompt and reliable information on a regular basis, management and the Board can therefore achieve proper monitoring over relevant financial reports in an effective manner and support key business objectives. At the same time, they can also perform an accurate review and assessment, and suggest improvements over existing business plans, supported by effective internal supervision carried out by the IAD throughout the year. The internal audit works according to an annual audit plan that is approved and monitored by the AC. The plan prioritises companies, business areas, and processes. The results of the performed audits and following up observations are reported to the AC. No significant control deficiencies have been reported to date. However, recommendations regarding internal controls have been provided in some areas. The IAD also reviews whether key operations and financial activities are conducted efficiently and legally.

(E) BOARD MEETINGS Board meetings shall be held once at least every three (3) months specified in the Company’s Articles of Association. Special meetings are convened as necessary to address specific needs. In FY 2013, there were twelve (12) Board meetings. Principal meeting agendas were: consideration of TTA’s strategic direction, annual business plan and budget, quarterly financial reports, and significant acquisition and disposal of assets. The Board requires all members to devote sufficient time to the work of the Board, to perform the duties and responsibilities of Directors, and to use their best endeavours to attend meetings. All directors are encouraged to attend at least 75% of all Board meetings held during the year.

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Details of Directors’ Attendance Record in 2013 Financial Year Meeting Attendance in 2013 Nomination and Corporate Risk Board of Audit Executive Remuneration Governance Management Directors Committee Committee Committee Committee Committee (Total 12) (Total 14) (Total 12) (Total 9) (Total 3) (Total 2)

Name 1. Mr. Prasert Bunsumpun

11/12

12/12

2. Mr. Chalermchai Mahagitsiri

12/12

11/12

2/2

3. M.L. Chandchutha Chandratat

12/12

11/12

2/2

Appointment during the year

4. Mr. Chia Wan Huat Joseph

12/12

3/3

5. Mr. Krish Follett

12/12

14/14

2/2

6. Mr. Santi Bangor

12/12

13/14

5/5

3/3

7. Ms. Ausana Mahagitsiri

10/12

9/9

2/3

8. Mr. Ghanim Saad M. Alsaad Al-Kuwari

1/12

9. Mr. Mohammad Rashed Ahmad M. Alnasseri

7/7

5/5

- Board member on 30 Jan 2013 - NRC member on 14 February 2013

10. Mr. Yves Barbieux

2/2

- Board member on 12 July 2013

11. Mr. Cherdpong Siriwit

6/7

8/10

- Board member on 30 Jan 2013 - AC member on 12 Feb 2013

Details of Directors’ Attendance Record who resigned during the 2013 Financial Year Meeting Attendance in 2013 Board of Directors (Total 12)

Audit Committee (Total 14)

Nomination and Remuneration Committee (Total 9)

Risk Management Committee (Total 2)

1. Dr. Pichit Nithivasin

4/4

resigned from the Board of Directors on 30 January 2013

2. Mr. Oral Wilson Dawe

4/4

1/1

resigned from the Board of Directors on 26 December 2012

3. Mr. Peter Stokes

2/4

3/3

resigned from the Board of Directors on 30 January 2013

Name

Resignation during the year

Note: A total of 12 Board of Directors meetings took place during the year: 6 regular meetings and 6 special meetings.

(F) BOARD ASSESSMENT The Board conducted a formal evaluation of its own performance for the year that ended on 30 September 2013. The evaluation process was led by the Chairman of the CGC and was conducted by sending a board assessment form to each Director. The responses to the form were collated by the Company Secretary and the Chairman of the CGC reported the result to the Board of Directors. There were six (6) main areas of evaluation namely: 1. Structure and Characteristics of the Board 2. Roles and Responsibilities of the Board 3. Board of Directors Meetings THORESEN THAI AGENCIES PLC.

4. Board of Directors’ Performance of Duties 5. Relationship with Management 6. Self-development of Directors In 2013, the assessment results as a whole were very good. The Board discussed the results and possible improvements and asked different committees to propose measures to improve the efficiency of the Board.

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(G) DIRECTOR ORIENTATION AND DEVELOPMENT The Company prepares a handbook for directors, which includes a summary of the Company’s information, policies, charters, and structure and distributes it to all directors as basic information. The Company established a Director Induction Program for new Board members to facilitate their prompt performance of duties. The President & Chief Executive Officer normally gives orientation meetings for new Board members. In these meetings, briefings on TTA’s policies and key business operations are given. Moreover, new Board members will also meet with different executives to understand the business units in greater detail. In addition, TTA encourages directors to attend courses or join activities aimed at improving their

performance on the Board and Board committees. Eight (8) directors have participated in the Thai Institute of Directors’ (“IOD”) director training programmes, including the Role of Chairman Program (“RCP”), the Director Accreditation Program (“DAP”), the Director Certification Program (“DCP”), the Finance for Non-Finance Director Program (“FND”), the Role of the Compensation Committee Program (“RCC”), the Audit Committee Program (“ACP”), and 4M; Monitoring Fraud Risk Management (MFM 9/2013), Monitoring the System of Internal Control and Risk Management (MIR 14/2013), Monitoring the Internal Audit Function (MIA 14/2013), Monitoring the Quality of Financial Reporting (MFR 17/2013). TTA encourages directors who have not participated in the above training programmes to participate at the Company’s expense.

List of key courses in IOD which TTA’s directors attended Courses

No. of participants

The Role of Chairman

The Director Accreditation Program

The Director Certification Program

The Finance for Non-Finance Director Program

The Role of the Compensation Committee Program

The Audit Committee Program

5. Business Ethics and Code of Conduct (A) TTA’S ETHICAL AND OPERATIONAL GUIDELINES TTA has the following ethical and operational guidelines: (i) Fairness We believe in being fair to all parties having a business relationship with us and conscientiously avoid favouritism or a conflict of interest situation. (ii) Professionalism We carry out our responsibilities in a professional manner and are determined to achieve excellence by continuously increasing performance levels through new methods and technologies.

(iii) Proactiveness We are responsive to client needs and social, technical, and economic changes and adapt to the circumstances. (iv) Discipline and Compliance We pursue business affairs with discipline and ethical principles and ensure that our undertakings comply with laws, rules, and regulations.

(B) CODE OF CONDUCT The Board has approved a Core Values, Mission and Vision (“VMV”) framework to guide business operations. A Code of Business Conduct was approved by the Board on 12 February 2010 to implement the VMV framework, emphasising our four Core Values.

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TTA has arranged Code of Conduct training to all employees to ensure that they understand good practices and has included the Code of Conduct training as part of the orientation for new employees.

(iii) Team Spirit: We care for our clients, employees, and suppliers and behave in ways that build a spirit of teamwork and collaboration and show deep respect for one another.

The four Core Values are:

(iv) Commitment: We are passionate about the future of this Company and feel accountable for business results and success.

(i) Integrity: We are open, honest, and ethical, deliver on our promises, and build and nurture trust in our relationships. (ii) Excellence: We set high standards of quality, safety, environment, security, and service, are always prepared for challenges, and conduct our business professionally.

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INSIDE INFORMATION CONTROL Directors and management are required to submit securities holding reports to TTA on the same day as when they submit the reports to the SEC and the SET in accordance with the SEC and SET Notifications regarding reports of securities holding. They are also required to follow the SET Guidelines on Insider Trading, which require Directors and executives refraining from securities trading before the disclosure of financial statements or other important information that may affect the price of the securities. For further details, please review our Corporate Governance Report.

THORESEN THAI AGENCIES PLC.

Thoresen Vinama Agencies Co., Ltd.

Zamil Mermaid Offshore Services Co. (LLC)

1. Baconco Co., Ltd.

2. Subtech Ltd.

Companies

Related Party Companies/Entities

Price agreed (No transaction between in 2012) Subtech Ltd. and Zamil Mermaid Offshore Services Co (LLC) which is normal price charged to a third party 1,540,000,137 (Recorded as service income)

Zamil Mermaid Offshore Services Co. (LLC) engaged Subtech Ltd. for offshore services to Saudi Aramco

TTA holds a 57.14% stake in Mermaid Maritime Plc. and Mermaid Maritime Plc. holds a 100% stake in Subtech Ltd. and a 40% stake in Zamil Offshore Services Co. (LLC).

Approximate market price

7,656,180 (Recorded as rental income)

17,293,428 (Recorded as rental income)

Pricing Policy

Baconco Co., Ltd. rent out factory area to Thoresen Vinama Agencies Co., Ltd.

30 Sept 2012

30 Sept 2013

Transaction Amount (Baht)

TTA holds a 100% stake in Soleado Holdings Pte. Ltd. and Soleado Holdings Pte. Ltd. holds a 100% stake in Baconco Co., Ltd. TTA also holds a 50% stake in Thoresen (Indochina) S.A. and Thoresen (Indochina) S.A. holds a 49% stake in Thoresen Vinama Agencies Co., Ltd. Both companies are indirectly held by TTA.

Relationship

Description of Transactions

Related party transactions between TTA and its subsidiaries or between subsidiaries and subsidiaries are shown in the notes to the consolidated financial statements. Major related party transactions between TTA and its subsidiaries with associates or joint ventures or a transaction with a company or persons that may have conflicts of interest are shown as follows:

Related Party Transactions

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194

THORESEN THAI AGENCIES PLC.

6. Mermaid Maritime Plc. Gulf Agency Company (Thailand) Ltd.

Same price as 3,773,128 normally charged (Recorded as to a third party account payable to related parties) Mermaid Maritime Plc. engaged Gulf Agency Company (Thailand) Ltd. for courier services.

5,339,066 (Recorded as account payable to related parties)

TTA holds a 57.14% stake in Mermaid Maritime Plc. and a 51% stake in Gulf Agency Company (Thailand) Ltd.

Price agreed (No transaction between Subtech Ltd. and Zamil in 2012) Mermaid Offshore Services Co. (LLC) which is normal price charged to a third party 1,043,583,599 (Recorded as account receivables)

Zamil Mermaid Offshore Services Co. (LLC) engaged Subtech Ltd. for offshore services to Saudi Aramco.

TTA holds a 57.14% stake in Mermaid Maritime Plc. and Mermaid Maritime Plc. holds a 100% stake in Subtech Ltd . and a 40% stake in Zamil Offshore Services Co. (LLC).

Zamil Mermaid Offshore Services Co. (LLC)

5. Subtech Ltd.

Price as agreed between two parties

15,558,394 (Recorded as administrative expenses)

17,822,560 (Recorded as administrative expenses)

Same price as normally charged to a third party

Pricing Policy

Soleado Holdings Pte. Ltd. engaged Thoresen (Indochina) S.A. for management services of Baconco Co., Ltd.

24,316,792 (Recorded as offshore expenses)

30 Sept 2012

TTA holds a100% stake in Soleado Holdings Pte. Ltd. and holds a 50% stake in Thoresen (Indochina) S.A.

Thoresen (Indochina) S.A.

4 Soleado Holdings Pte. Ltd.

30 Sept 2013

Transaction Amount (Baht)

23,846,878 (Recorded as offshore expenses)

Description of Transactions Mermaid Maritime Plc. engaged Gulf Agency Company (Thailand) Ltd. for customs clearance of goods, transportation.

TTA holds a 57.14% stake in Mermaid Maritime Plc. and a 51% stake in Gulf Agency Company (Thailand) Ltd.

Relationship

3. Mermaid Maritime Plc. Gulf Agency Company (Thailand) Ltd.

Companies

Related Party Companies/Entities

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195

THORESEN THAI AGENCIES PLC.

PM Telecom Co., Ltd.

1. Thoresen Thai Agencies Plc.

2. Mermaid Maritime Plc., Mermaid Offshore Services Ltd., Mermaid Drilling Ltd.

Companies

Related Party Companies/Entities

Description of Transactions

THORESEN THAI AGENCIES PLC.

TTA holds a 57.14% stake in Mermaid Maritime Plc., Mermaid Maritime Plc. holds a 100% in Mermaid Offshore Services Ltd. and Mermaid Maritime Plc. holds a 95% stake in Mermaid Drilling Ltd. Those companies have common director with PM Telecom Co., Ltd. being Mr. Chalermchai Mahagitsiri.

Mermaid Maritime Plc., Mermaid Offshores Services Ltd. and Mermaid Drilling Ltd. bought mobile phones from PM Telecom Co., Ltd.

TTA and PM Telecom TTA bought mobile Co., Ltd. have common phones from PM directors being Telecom Co., Ltd. Mr. Chalermchai Mahagitsiri, Ms. Ausana Mahagitsiri and Mr. Chia Wan Huat Joseph. Mr. Chalermchai Mahagitsiri is major shareholder in both companies.

Relationship

Transactions with Persons who May Have Conflicts of Interest

(Recorded as fixed assets)

754,794.86

Same price as normally (No transaction charged by a in 2012) third party

Pricing Policy

30 Sept 2012

52,900.00

30 Sept 2013

Transaction Amount (Baht)

Annual Report 2013

196

Annual Report 2013

197

Necessity and Rationale of Related Party Transactions In case TTA or its subsidiary signs an agreement or conducts a related party transaction with a subsidiary company, affiliated company and/or third party, TTA or a subsidiary will consider the necessity and rationale of such agreement based mainly on TTAâ&#x20AC;&#x2122;s interests.

Approval Measures or Procedures of Related Party Transactions If TTA or its subsidiary is to execute an agreement or if there is any related party transaction between TTA and its subsidiary, affiliated company, related company, third party and/or anyone with possible conflict of interests, the Board of Directors requires TTA or a subsidiary, for the purpose of its benefits, to comply with the rules and regulations of the SET and the SEC regarding disclosure of information of listed companies concerning connected transactions. Prices and other conditions shall be on an armâ&#x20AC;&#x2122;s length basis and are conducted in the best interests of TTA and all shareholders. Directors, executives, or employees having an interest in such transaction are not allowed to participate in the decision-making process and in any approval process.

Policy for Future Related Party Transactions The Audit Committee and TTA will jointly consider and review any related party transactions that may arise in the future to ensure their necessity and fair price basis.

THORESEN THAI AGENCIES PLC.

Annual Report 2013

198

Company Investments Investments in other companies exceeding 10% of other companiesâ&#x20AC;&#x2122; shares as of 30 September 2013 are as follows: No.

Name of Company

Type of Shares

# of Issued Shares

# of Invested Shares

% of Holding

Par Value

Ordinary Preference

9,470,000 3,030,000

9,470,000 3,029,994

99.9/1

Transport Group Type of Business : Ship Management 1. Thoresen & Company (Bangkok) Limited 26/26-27 Orakarn Building, 8th Floor Chidlom Road, Lumpinee, Pathumwan Bangkok 10330 Tel. : +66 (0) 2250-0569

Type of Business : International Maritime Transportation 2. Thor Jupiter Shipping Co., Ltd.

Ordinary

974,000

973,993

99.9

100

3. Thor Wind Shipping Co., Ltd.

Ordinary

2,000,000

1,999,993

99.9

100

4. Thor Wave Shipping Co., Ltd.

Ordinary

2,000,000

1,999,993

99.9

100

5. Thor Harmony Shipping Co., Ltd.

Ordinary

3,500,000

3,499,993

99.9

100

6. Thor Dynamic Shipping Co., Ltd.

Ordinary

3,600,000

3,599,993

99.9

100

7. Thor Integrity Shipping Co., Ltd.

Ordinary

3,850,000

3,849,993

99.9

100

8. Thor Enterprise Shipping Co., Ltd.

Ordinary

6,300,000

6,299,993

99.9

100

9. Thor Energy Shipping Co., Ltd.

Ordinary

10,000,000

9,999,993

99.9

100

10. Thor Endeavour Shipping Co., Ltd.

Ordinary

11,000,000

10,999,993

99.9

100

11. Thor Merchant Shipping Co., Ltd.

Ordinary

200,000

199,994

99.9

100

12. Hermes Shipping Co., Ltd.

Ordinary

270,000

269,994

99.9

100

13. Thor Star Shipping Co., Ltd.

Ordinary

300,000

299,993

99.9

100

14. Thor Skipper Shipping Co., Ltd.

Ordinary

300,000

299,993

99.9

100

15. Thor Sailor Shipping Co., Ltd.

Ordinary

300,000

299,993

99.9

100

16. Thor Mariner Shipping Co., Ltd.

Ordinary

350,000

349,994

99.9

100

17. Thor Sun Shipping Co., Ltd.

Ordinary

400,000

399,993

99.9

100

18. Thor Spirit Shipping Co., Ltd.

Ordinary

400,000

399,993

99.9

100

19. Thor Sky Shipping Co., Ltd.

Ordinary

400,000

399,993

99.9

100

20. Thor Sea Shipping Co., Ltd.

Ordinary

400,000

399,993

99.9

100

21. Thor Trader Shipping Co., Ltd.

Ordinary

450,000

449,993

99.9

100

THORESEN THAI AGENCIES PLC.

Annual Report 2013

199

Type of Shares

# of Issued Shares

# of Invested Shares

% of Holding

Par Value

22. Thor Traveller Shipping Co., Ltd.

Ordinary

450,000

449,993

99.9

100

23. Thor Orchid Shipping Co., Ltd.

Ordinary

472,500

472,493

99.9

100

24. Thor Confidence Shipping Co., Ltd.

Ordinary

500,000

499,993

99.9

100

25. Thor Nautilus Shipping Co., Ltd.

Ordinary

500,000

499,993

99.9

100

26. Thor Mercury Shipping Co., Ltd.

Ordinary

600,000

599,994

99.9

100

27. Thor Triumph Shipping Co., Ltd.

Ordinary

600,000

599,993

99.9

100

28. Thor Lotus Shipping Co., Ltd.

Ordinary

630,000

629,993

99.9

100

29. Thor Jasmine Shipping Co., Ltd.

Ordinary

700,000

699,993

99.9

100

30. Thor Champion Shipping Co., Ltd.

Ordinary

750,000

749,993

99.9

100

31. Thor Venture Shipping Co., Ltd.

Ordinary

750,000

749,993

99.9

100

32. Thor Guardian Shipping Co., Ltd.

Ordinary

750,000

749,993

99.9

100

33. Thor Nautica Shipping Co., Ltd.

Ordinary

753,000

752,993

99.9

100

34. Thor Pilot Shipping Co., Ltd.

Ordinary

800,000

799,993

99.9

100

35. Thor Navigator Shipping Co., Ltd.

Ordinary

990,000

989,993

99.9

100

36. Thor Transit Shipping Co., Ltd.

Ordinary

1,000,000

999,993

99.9

100

37. Thor Alliance Shipping Co., Ltd.

Ordinary

1,060,000

1,059,993

99.9

100

38. Thor Commander Shipping Co., Ltd.

Ordinary

1,150,000

1,149,993

99.9

100

39. Thor Tribute Shipping Co., Ltd.

Ordinary

1,170,000

1,169,993

99.9

100

40. Thor Neptune Shipping Co., Ltd.

Ordinary

1,380,000

1,379,993

99.9

100

41. Thor Captain Shipping Co., Ltd.

Ordinary

1,530,000

1,529,994

99.9

100

42. Thor Nexus Shipping Co., Ltd.

Ordinary

1,857,000

1,856,993

99.9

100

43. Thor Master Shipping Co., Ltd.

Ordinary

1,880,000

1,879,993

99.9

100

44. Thor Transporter Shipping Co., Ltd.

Ordinary

2,000,000

1,999,993

99.9

100

45. Thor Nereus Shipping Co., Ltd.

Ordinary

2,128,000

2,127,993

99.9

100

46. Thor Nectar Shipping Co., Ltd.

Ordinary

2,541,000

2,540,993

99.9

100

No.

Name of Company

Note : The registered office address of companies in items No. 2-46 is 26/32 Orakarn Building, 10th Floor, Soi Chidlom Ploenchit Road, Lumpinee, Pathumwan, Bangkok 10330 Tel. : +66 (0) 2250-0569

Type of Business : International Maritime Transportation 47. Thoresen Chartering (HK) Limited Suite B, 12th Floor, Two Chinachem Plaza 135 Des Voeux Road Central, Hong Kong

Ordinary

500,000

499,999

99.99

HKD 1

48. Thoresen Shipping Singapore Pte. Ltd. 3 Church Street, #22-06 Samsung Hub Singapore 049483 Tel. : +65 6578-7000

Ordinary

294,353,800

100.0

SGD 1

49. Thoresen Shipping Germany GmbH Stavendamm 4a, 28195 Bremen, Germany Tel. : 421 336 52 22

Ordinary

25,000

100.0

Euro 1

THORESEN THAI AGENCIES PLC.

Annual Report 2013

200

Type of Shares

# of Issued Shares

# of Invested Shares

% of Holding

Par Value

50. PT Perusahaan Pelayaran Equinox Globe Building 4th & 5th floor Jalan Bancit Raya Kav.31-33, Jakarta Indonesia 12740 Tel. : +6221 7918 7006

Ordinary

24,510

12,010

49.0

1,000,000 Rupiah

51. Thoresen Shipping Denmark ApS Tuborg Boulevard 12, 3. 2900 Hellerup, Denmark

Ordinary

80,000

100.0/1

DKK 1

52. Thoresen Shipping and Logistics Ltd. 26/26-27 Orakarn Building, 8th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2254-0266

Ordinary

500,000

245,000

49.0

100

53. Gulf Agency Company (Thailand) Ltd. 26/30-31 Orakarn Building, 9th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2650-7400

Ordinary

22,000

11,215

51.0

1,000

54. Thoresen Shipping FZE 1901-19th Floor, Golden Tower Opp. Marbella Resort, Al Buhairah Corniche Road, Sharjah, UAE. Tel. : 971-6-574 2244

Ordinary

100.0

550,550 Dirhams

55. Thoresen (Indochina) S.A. 17th Floor, Petroland Tower 12 Tan Trao Street, Tan Phu Ward, District 7 Ho Chi Min City, Vietnam Tel. : +84 8 5411 1919

Ordinary

2,500

1,250

50.0

USD 100

56. Fearnleys (Thailand) Ltd. 26/55 Orakarn Building, 15th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2253-6160

Ordinary

135,000

66,144

49.0

100

57. Thoresen Chartering (Pte) Ltd. 3 Church Street, #22-06 Samsung Hub Singapore 049483 Tel. : +65 6578-7000

Ordinary

100,000

100.0

SGD 1

No.

Name of Company

Type of Business : Ship Agency

Type of Business : Ship Brokerage

THORESEN THAI AGENCIES PLC.

Annual Report 2013

201

Type of Shares

# of Issued Shares

# of Invested Shares

% of Holding

Par Value

Ordinary

1,259,350,452

503,740,176

40.0/4

1 Philippines Peso

Ordinary

1,412,545,923

590,000,000 217,145,813/1

57.14

60. Merton Group (Cyprus) Ltd. Nikou Kranidioti 7D, Tower 4, 3rd Floor Flat/Office 302, Egkomi, PC 2411 Nicosia, Cyprus

Ordinary

33,288

8,704

26.15/4

USD 1

61. Qing Mei Pte. Ltd. 24 Duxton Hill Singapore 089607

Ordinary

12,600,000

4,200,000

33.33/4

USD 1

No.

Name of Company

Type of Business : Oil and GasTankering 58. Petrolift Inc. 6th Floor, Mapfre Insular Corporate Center Madrigal Business Park I, 1220 Acacia Avenue, Ayala Alabang Muntinlupa City, Philippines

Energy Group Type of Business : Offshore Services 59. Mermaid Maritime Public Company Limited 26/28-29 Orakarn Building, 9th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2255-3115-6 Type of Business : Coal Mining

Infrastructure Group Type of Business : Ship Supplies, Logistics, Ship Stevedoring and Transportation 62. Chidlom Marine Services & Supplies Ltd. 26/22-23 Orakarn Building, 7th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2250-0569

Ordinary

700,000

699,993

99.9

100

63. GAC Thoresen Logistics Ltd. 26/30-31 Orakarn Building, 9th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 3818-5090-2

Ordinary

750,000

382,496

51.0

100

64. Sharjah Ports Services LLC P.O.Box 510, Port Khalid Sharjah, United Arab Emirates Tel. : 971-6-528 1327

Ordinary

26,000

12,740

49.0/2

100 Dirhams

65. Baria Serece Phu My Borough, Tan Thanh District Baria Vung Tau Province, Vietnam Tel. : +84.64.3876603

Ordinary

2,039,080

407,816

20.0/4

100,000 VND

Type of Business : Port Operations

THORESEN THAI AGENCIES PLC.

Annual Report 2013

202 No.

Type of Shares

# of Issued Shares

# of Invested Shares

% of Holding

Par Value

Ordinary

153,454,064

136,083,041

88.68/3

0.50

100.0/5

Name of Company

Type of Business : Coal Logistics Business 66. Unique Mining Services Public Company Limited 36/83 P.S. Tower Building, 24th Floor Soi Sukhumvit 21, Sukhumvit Road Klongtoey, Wattana, Bangkok 10110 Tel. : +66 (0) 2664-1701-8 Type of Business : Fertilisers Business 67. Baconco Co., Ltd. Phu My I Industrial Park, Tan Thanh Town Baria Vung Tau Province, Vietnam Tel. : 064.893 400

Charter capital is VND 377,072,638,790

Holding Group Type of Business : Holding Company 68. Soleado Holdings Pte. Ltd. 3 Church Street, #22-06 Samsung Hub Singapore 049483 Tel. : +65 6578-7000

Ordinary

130,000,000

100.0

SGD 1

69. Athene Holdings Ltd. 26/32 Orakarn Building, 10th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2254-8437

Ordinary

1,000,000

999,993

99.9

100

70. PM Thoresen Asia Holdings Ltd. 26/22-23 Orakarn Building, 7th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2254-8437

Ordinary

1,000,000

99,998

99.9

10.0

Ordinary

60,000,000

599,993

99.9

100

Others Type of Business : Service Provider 71. Thoresen Services Center Ltd. 26/22-23 Orakarn Building, 7th Floor Soi Chidlom, Ploenchit Road, Lumpinee Pathumwan, Bangkok 10330 Tel. : +66 (0) 2254-8437

Note: /1 indirectly held by Thoresen Shipping Singapore Pte. Ltd. /2 indirectly held by Thoresen Shipping FZE /3 indirectly held by Athene Holdings Ltd. /4 indirectly held by Soleado Holdings Pte. Ltd. /5 indirectly held by PM Thoresen Asia Holdings Ltd.

THORESEN THAI AGENCIES PLC.

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203

Glossary

The following are definitions of key terms used in this annual report.

Glossary of Maritime Terms: BHSI

The Baltic Handysize Index is a measure of the strength of smaller dry bulk vessel spot freight earnings (basis 28,000 dwt bulk carriers). It was established on a trial basis in May 2006 and was formally launched in January 2007.

BSI

The Baltic Supramax Index (BSI) (basis 52,000 dwt bulk carriers) was officially launched in January 2006.

Bulk Vessels/Carriers

Vessels which are specially designed and built to carry large volumes of cargo in bulk cargo form.

Charter

The hire of vessel or drilling rig for a specified period of time or in the case of bulk carriers to carry cargo for a fixed fee from a loading port to a discharging port. The contract for a charter is called a charterparty.

Charterer

The individual or company hiring a vessel.

Charter Hire Rate

A sum of money paid to the vessel or drilling rig owner by a charterer under a charterparty for the use of a vessel or drilling rig.

Classification Society

An independent organisation which certifies that a vessel or drilling rig has been built and maintained in accordance with the rules of such organisation and complies with the applicable rules and regulations of the country of such vessel or drilling rig and the international conventions of which that country is a member.

Deadweight Tonne (“dwt”)

A unit of a vessel’s capacity for cargo, fuel oil, stores and crew, measured in metric tons of 1,000 kilograms. A vessel’s dwt, or total deadweight, is the total weight the vessel can carry when loaded to a particular load line.

Deepwater

For dive support vessels, this refers to water depths beyond 300 metres. For drilling, this comprises “5th Generation Deepwater”, which refers to the latest generation of semisubmersible rigs and drillships possessing the latest technical drilling capabilities and the ability to operate in water depths in excess of 7,000 feet. “Other Deepwater” refers to semisubmersible rigs and drillships that possess the ability to drill in water depths greater than 4,500 feet.

Dive Support Vessel

Specially equipped vessel that performs services and acts as an operational base for divers, remotely operated vehicles, and specialised equipment.

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204

Double-hulled

A double hull is a ship hull design and construction method where the bottom and sides of the ship have two complete layers of watertight hull surface: one outer layer forming the normal hull of the ship, and a second inner hull which is some distance inboard, typically by a few feet, which forms a redundant barrier to seawater in case the outer hull is damaged and leaks.

DP-2

Dynamic position 2- redundancy allows the vessel to maintain position even with failure of one component or subsystem, required for vessels which support manned diving operations.

Dry Bulk

Non-liquid cargoes of commodities shipped in an unpackaged state.

Dry-docking

The removal of a vessel or drilling rig from the water for inspection and / or repair of submerged parts.

Dynamic Position (“DP”)

Computer-directed thruster systems that use satellite-based positioning and other positioning technologies to ensure the proper counteraction to wind, current, and wave forces enabling the vessel to maintain its position without the use of anchors.

Freight Rates

A price at which a certain cargo is delivered from one point to another. The price depends on the form of the cargo, the mode of transport (truck, ship, train, aircraft), the weight of the cargo, and the distance to the delivery destination. Many shipping services, especially air carriers, use dimensional weight for calculating the price, which takes into account both weight and volume of the cargo.

Gross Tonne

Unit of 100 cubic feet or 2.831 cubic meters used in arriving at the calculation of gross tonnage.

Handymax

A dry bulk carrier of approximately 35,000 to 60,000 dwt.

Handysize

A dry bulk carrier having a carrying capacity of up to approximately 35,000 dwt.

Hull

The shell or body of a vessel.

International Maritime Organisation (“IMO”))

A United Nations agency that issues international trade standards for shipping.

Metric Tonne

A unit of measurement equal to 1,000 kilograms.

Newbuilding

A newly constructed vessel.

Orderbook

A reference to currently placed orders for the construction of vessels or drilling rigs (e.g., the Handymax orderbook).

Panamax

A dry bulk carrier of approximately 60,000 to 80,000 dwt of maximum length, depth and draft capable of passing fully loaded through the Panama Canal.

Remotely Operated Vehicles (“ROV”)

Robotic vehicles used to complement, support, and increase the efficiency of diving and sub-sea operations and for tasks beyond the capability of manned diving operations.

Scrapping

The disposal of old or damaged vessel tonnage by way of sale as scrap metal.

Short-Term Time Charter

A time charter which lasts less than approximately twelve months.

THORESEN THAI AGENCIES PLC.

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205

Supramax

A bulk carrier with a capacity less than 60,000 dwt. Supramax vessels are relatively bigger in size with 50,000 to 60,000 DWT It is well suited for small ports with length and draught restrictions, or ports lacking transshipment infrastructure.

Tender Rig

A tender rig is a purpose-built self-erecting drilling tender barge with a flat bottom, raked sterns, and raked bow hull shape. It is designed as a cost-efficient and flexible drilling system for development scenarios involving multiple well slot fixed offshore platforms whereby the rig moves from platform to platform using its own drilling equipment set which is lifted by its own crane. Lifting operations can be made onto platforms up to a height of 90 feet above sea level.

Time Charter

Contract for hire of a vessel. A charter under which the vessel owner is paid charter hire rate on a per day basis for a certain period of time, the vessel owner being responsible for providing the crew and paying operating costs while the charterer is responsible for paying the voyage costs. Any delays at port or during the voyages are the responsibility of the charterer, save for certain specific exceptions such as loss of time arising from vessel breakdown and routine maintenance.

TOE

Tonne of Oil Equivalent. A unit of energy: the amount of energy released by burning one tonne of crude oil, approximately 42 GJ. TOE is sometimes used for large amounts of energy, as it can be more intuitive to visualise, say, the energy released by burning 1000 tonnes of oil than 42,000 billion joules (the SI unit of energy).

Voyage Charter

Contract for hire of a vessel under which a vessel owner is paid freight on the basis of moving cargo from a loading port to a discharge port. The vessel owner is responsible for paying both operating costs and voyage costs. The charterer is typically responsible for any delay at the loading or discharging ports.

Glossary of Coal Terms: Anthracite

Coals with a volatile-carbon ratio equal to 0.12 or less. It has a bright black luster and is coal of the highest rank.

Bituminous Coal

A general term descriptive of coal intermediate in rank between sub bituminous and semi-anthracite and including coking coals. Bituminous coals may be either bright or dull and are usually banded in appearance.

BTU

British Thermal Unit. The quantity of heat required to raise the temperature of one pound of distilled water 1째F at its point of maximum density.

Calorific Value

Quantity of heat produced when a unit weight of coal burns. Calorific value is measured in British thermal units per pound or calories per gram.

Coal Dust

Particles of coal that can pass a No. 20 sieve.

Coal Mine

An area of land and all structures, facilities, machinery, tools, equipment, shafts, slopes, tunnels, excavations and other property, real or personal, placed upon, under or above the surface of such land by any person, used in, or to be used in, or resulting from the work of extracting in such area bituminous coal, lignite, or anthracite from its natural deposits in the earth by any means or method and the work of preparing the coal so extracted and includes custom coal preparation facilities. THORESEN THAI AGENCIES PLC.

Annual Report 2013

206

Coal Reserve

The economically mineable part of the coal resource, as defined in the JORC Code. It includes diluting materials and allowances for losses.

Calorific Value basis (GAD, NAR, or GAR).

Lignite

A brownish-black coal composed of vegetable matter which has been altered more than in peat, but less than in sub-bituminous coal.

Calorific Value

The energy in kilocalories released per kg of coal burned.

Sub-bituminous

Sub-bituminous coals may be dull, dark brown to black, soft and crumbly at the lower end of the range, to bright jet-black, hard, and relatively strong at the upper end. They contain 15-30% inherent moisture by weight and are non-coking (undergo little swelling upon heating).

Sulphur

Forms sulphur dioxide during coal combustion.

Thermal Coal

Coals which are normally used for the generation of heat for steam raising and other general industry applications. These coals generally do not exhibit any coking properties and therefore would not make coke in a conventional coke oven. However, thermal coals can be used as PCI Coals provided they have levels of ash, moisture, volatile matter and sulphur which make them suitable for the production of blast furnace pig iron.

Glossary of Fertiliser Terms: Urea

The most common nitrogen fertiliser in the world. Formula CO(NH2)2, can be prilled or granular, and obtained by chemical process (natural gas into ammonia, and then urea).

NPK

Stands for “Nitrogen Phosphorus Potassium”, used to mention the compound fertilisers associating the three main fertilising nutrients, to be differentiated from the single fertilisers.

Blending

Or “bulk blending” is a physical process mixing single fertilisers together to obtain NPK fertilisers.

Granulation

Process using steam, water and heat to manufacture NPK fertilisers, thereafter called granulated fertilisers.

Compaction

Process using heat and pressure to manufacture NPK fertilisers, thereafter called compacted fertilisers.

THORESEN THAI AGENCIES PLC.

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207

The Company As of 30 September 2013 Name of Company

: Thoresen Thai Agencies Public Company Limited

Registration No.

: 0107537002737

Date of Establishment

: 16 August 1983

Date of Conversion to Public Company Limited : 15 December 1994 Date of Listing Ordinary Shares in SET

: 25 September 1995

Address

: 26/26-27 Orakarn Building, 8th Floor Soi Chidlom, Ploenchit Road Bangkok 10330,Thailand Telephone : +66 (0) 2254-8437 Website: http://www.thoresen.com

Type of Business

: Holding company with 3 lines of business: Transport, Energy, and Infrastructure

Ordinary Shares Registered Capital

: Baht 1,132,807,060

Paid up Capital

: Baht 991,837,961

No. of Issued Shares

: 991,837,961 ordinary shares

Par Value

: Baht 1 per share

Warrants (TTA-W3) Number of Warrants issued

: 141,600,882 units

Number of Warrants Unexercised

: 140,968,458 units

Exercise Price

: Baht 17.00 per share

Term of Warrants

: 30 months or 2.5 years from the warrants issue date, 11 March 2013

Domestic Debentures Issued Domestic Debentures

: Tranche 1: Baht 2,000,000,000, with 5-year term Tranche 2: Baht 2,000,000,000, with 7-year term

Date of Listing Domestic Debentures in Thai Bond Market Association

: 9 July 2010

THORESEN THAI AGENCIES PLC.

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208

Securities Registrar of Ordinary Shares

: Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey Bangkok 10110, Thailand Telephone : +66 (0) 2229-2800

Auditor

: Mr. Veerachai Ratanajaratkul Certified Public Accountant Registration No. 4323 KPMG Phoomchai Audit Ltd. 48th - 51st Floors, Empire Tower 195 South Sathorn Road Yannawa, Sathorn Bangkok 10120, Thailand Telephone : +66 (0) 2677-2000

Legal Advisor

: Baker & McKenzie Ltd. 5th Floor, 22nd - 25th Floor, Abdulrahim Place 990 Rama IV Road, Srilom, Bangrak, Bangkok 10500, Thailand Telephone : +66 (0) 2636-2000 : Watson, Farley & Williams Asia Practice LLP 6 Battery Road #28-00 Singapore 049909 Telephone : +65 6532 5335

Remark: Investors can study additional details of the issuer from the Company’s Annual Information Disclosure Form (Form 56-1) on the SEC’s website at http://www.sec.or.th or on the Company’s website at http://www.thoresen.com.

THORESEN THAI AGENCIES PLC.