Annual Report 2012 EN by sarunya dareephat

Contents Company Background Vision Mission Summary Financial Information Message from the Chairman Board of Directors Corporate Social Responsibility General Information Nature of Business Risk Factors Shareholders and Management Related Party Transactions Corporate Governance Internal Controls Corporate Governance Report on Audit Committee Nomination and Remuneration Committee’s Report Board of Director’s Responsibility for Financial Report Management’s Discussion and Analysis Auditor’s Report Financial Statement

1 2 4 8 12 15 18 23 37 40 50 52 54 55 56 60 62

Company Background

Thai Rung Union Car Plc has long been established as a maker of auto body parts and a vehicle assembler. Originally founded as a limited partnership under the name Thai Engineering in 1967 by Mr. Vichien Phaoenchoke, its business success eventually led to its become a listed company on the Stock Exchange of Thailand in 1994 under the current name, Thai Rung Union Car Public Company Limited. For 45 years Thai Rung Union Car Plc., a Thai-owned company, has been a fully integrated and highly flexible operator in the automotive industry, quickly meeting customer demands that range from product design and development, through die and jig production and manufacture of metal and plastic auto parts and seats, to contract painting and assembly and the production of modified multi-purpose and special purpose vehicles, all based on the skills and capabilities of its Thai workforce and using advanced technology. At present, adapting its strategy in line with the rapid growth of the Thai automotive industry, the Company focuses mainly on OEM parts, contract assembly and painting, and on expanding its market for parts and bodies to various regions around the world, as well as seeking alliances to expand its existing business and develop new ones. Furthermore the Company has boosted its potential, both by continuously developing production processes and by applying innovative technology to the production process in order to increase efficiency, reduce costs and increase future profits as well as developing human resources to cater to the coming into force of the AEC in 2015 and any other international trade and investment. The Company is confident that, thanks to its all-round production capabilities and flexibility in responding quickly to customer requirements, as well as its close relationships with customers at home and abroad, it will benefit from the many opportunities that lie ahead in the automotive industry. We are thus confident that the Companyâ&#x20AC;&#x2122;s results will continue to grow rapidly in step with the Thai automotive industry.

Vision Mission Vision To be at the pinnacle of the Thai auto industry, developing, designing and producing a comprehensive range of products; with our own brand, to build optimum customer satisfaction through world-class quality and service.

Mission 1. To be a leader in the design, development and production of innovative automotive products: multi-purpose and specialty vehicles, parts, dies, jigs and accessories. 2. To maximise customer satisfaction by providing world-class quality, price, delivery and service. 3. To focus on continuous improvement in product and service quality through the efficient use of flexible, speedy production and management processes and up-to-date engineering technology. 4. To build own brand image and loyalty. 5. To establish and expand marketing and sales networks at home and abroad. 6. To pay close attention to the development and welfare of our human resources, so as to enable them to compete at world level and to be happy and proud to work for the organisation. 7. Continuously to enhance the stability of the organisation by making profits and providing fair remuneration for shareholders, business partners and employees. 8. To ensure that products, production and work processes all take due account of our responsibilities towards environment, community and society through principles of good corporate governance.

Significant Financial Data Summary Financial Information

Unit: Million Bt.

Consolidated, as at 31st December

Operating Performance Sales and Service Income Total Revenues Total Expenses &BSOJOHT MPTT CFGPSF ųOBODJOH DPTU BOE JODPNF UBY Net Earnings (loss) attributable to equity holders of the parent Financial Position Current Assets Total Assets Total Liabilities Shareholders’ Equity Per Share Data (Unit: Baht) Earnings (loss) per Share (EPS) Dividend per Share * Book Value per Share Financial Ratios (Unit : %) Net Earnings margin Return on Equity (ROE) Return on Asset (ROA)

2012

2011

2010

3,499.58 3,780.84 3,097.31 683.53 555.80

2,054.78 2,263.10 1,996.30 266.80 186.22

1,970.21 2,149.03 1,925.29 223.74 186.37

1,770.44 3,862.16 772.67 3,089.49

1,083.10 3,004.26 362.18 2,642.08

1,285.69 2,987.51 384.49 2,603.02

1.13 0.60 6.11

0.38 0.25 5.20

0.38 0.25 5.13

14.70 20.01 19.91

8.23 7.32 8.91

8.67 7.78 8.04

Remark * Payment of the dividend payment is subject to approval by the 2013 Annual General Shareholders’ Meeting.

2010 2011 2012

3,862.16

3,004.26

Total Assets (Million Bt)

2,987.51

555.80

186.22

Net Earnings (loss) attributable to equity holders of the parent (Million Bt) 186.37

3,780.84

2,263.10

2,149.03

Total Revenues (Million Bt)

2010 2011 2012

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Message from the Chairman

In 2012, the Thai automotive industry posted all-time record production of 2.4 million units, representing an increase of 68% relative to 2011 and putting Thailand in the world’s top ten automakers. Domestic sales, at 1.43 million units, showed an increase of 80%, largely thanks to the government’s economic stimulus package. Despite being faced in 2012 with a stagnant global economy, an increase in the Thai minimum legal daily wage to Bt.300, fluctuating fuel prices, a strengthening Baht and fierce competition both domestically and at ASEAN level, the Company was able not only to overcome all obstacles, thanks to the determined efforts of management and employees, who trust in the Company’s sound status based on many years of experience, but also to develop appropriate strategies for seeking opportunities for expansion. Thai Rung Union Car Plc posted consolidated revenues of Bt.3,781 million for 2012, up by 67%, and net income attributable to owners of the parent company of Bt.556 million, up by 199% on 2011. Growth in the Company’s revenues outstripped that of the automotive industry as a whole, thanks to its adjusting its strategy to place more stress on OEM parts making and contract assembly and painting work, which together now account for about 80% of consolidated revenues, and also to its success in expanding the customer base to take in new segments such as industrial and construction equipment, agricultural machinery and premium motorcycles, which is a high added value niche market, thus helping to reduce the risk of over-concentration. In 2013 we expect Thailand’s vehicle production to reach 2.8 million units, up by 15% on 2012, since all automakers in Thailand have invested in increasing their production capacity to cater to continuously growing consumer demand at home and abroad, especially for pick-up trucks and eco-cars. The government’s policy of promoting Thailand as a leading world automotive production base will also play a role, as will the coming into force of the ASEAN Economic Community (AEC) in 2015, which will stimulate growth in the industry.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

These trends provide significant opportunities for the Company to obtain both metal and plastic parts-making work, as well as contract assembly and painting work, which constitute the Companyâ&#x20AC;&#x2122;s main sources of revenue. Furthermore, the Company has taken steps to prepare for increasing its capabilities both by boosting production capacity and efficiency by investing in new machinery and technology and by developing its workforce, as well as managing its risks in advance so as to cater to any foreign trade and investment opportunities. Additionally, the new parts making factory in Rayong province has been working at full efficiency since the beginning of 2013, to cater to growing customer demand. The Company also has plans for further investment in all areas, to cater to the growing volumes of customer orders. It is pleasing to note that several groups of investors have expressed interest in joint investments with Thai Rung to expand its business base in various areas related to its existing business, and to conduct research and development of new, high added value products so as to increase its market share and generate extra revenue in the future. The Company will also continue to boost production efficiency and to make determined efforts to reduce costs in various areas, for the good of the Company and in accordance with principles of good corporate governance, and to attach importance to its responsibilities towards society, community, the environment and all stakeholder groups, in accordance with principles of corporate social responsibility, conducting its business in an ethical manner so as to ensure the Companyâ&#x20AC;&#x2122;s sustainable success. On behalf of the Companyâ&#x20AC;&#x2122;s Board of Directors, I should like to thank our customers, our shareholders, the various organisations and departments both governmental and private, our business partners and also our executives and employees for their constant support, which is a driving force. All the Directors and I will strive wholeheartedly to lead the Company constantly forward and develop and expand its business in a sustainable manner.

Dr. Pranee Phaoenchoke Chairman

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Board of Directors

Dr. Pranee Phaoenchoke

C a r an o t e Boar o D re tor

Age : 74

Pre ent

Academic Qualifications Honorary doctorate in Business Administration, American Coastline University, U.S.A. Honorary doctorate in Industrial Engineering, Ramkhamhaeng University Honorary Master’s Degree in Commerce and Accountancy Thammasart University Present Position Chairman of the Board of Directors & Chairman of the Executive Committee of Thai Rung Union Car Plc. Director & Chairman of Thai Rung Tools and Dies Co., Ltd. Thai V.P. Auto Service Co., Ltd. Thai Auto Pressparts Co., Ltd. Thai Ultimate Car Co., Ltd. Isuzu Chaicharoenkij Motors Co., Ltd. Thai V.P. Corporation Co., Ltd. Chaicharoenkij Motors Co., Ltd. Lexus Auto City Co., Ltd. Biz Motor Co., Ltd. V.P. Auto Enterprise Co., Ltd. V.P.K. Auto Co., Ltd. First Part Co., Ltd. Sinthoranee Property Co., Ltd. Director of Delta Thairung Co., Ltd. Shareholding as of 5 February 2013: 246,387,500 shares (49.12%)

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Mr. Pricha Attavipach

In epen ent re tor Deput a r an C a r an o t e Boar o D re tor Au t Co Age : 75

ttee

Academic Qualifications Bachelor’s Degree in industrial engineering Chulalongkorn University Master’s Degree (MS) in engineering (Industrial Engineering & Management) Oklahoma State University, U.S.A. National Defence College of Thailand, Class of 1989 Director Certification Program 39/2004: IOD Finance for Non-Finance Directors 8/2004: IOD Present Position Deputy Chairman of the Board of Directors Independent director, Deputy chairman & Chairman of the Board of Directors, Audit Committee and Nomination & Remuneration Committee of Thai Rung Union Car Plc. Director and Member of the Audit Committee, Siam Cement Plc. Chairman of Thai Sugar Terminal Plc Ruamkijaungthong Warehouse Co., Ltd. Pan-Paper 1992 Co., Ltd. Ekaratpattana Co., Ltd. T.S.G. Assets Co., Ltd. T.S. Flour Mill Plc. T.S. Oil Industry Co., Ltd. Ruamphol Enterprise Nakorn Sawan Co., Ltd. Kaset Thai Sugar Co., Ltd. Thai Identity Sugar Factory Co., Ltd. Director of H.C. Starck (Thailand) Co., Ltd. Siam P.P. International Co., Ltd. Specialist Senior Engineering (Industrial Engineer), Council of Engineers Law Councillor, Ministry of Labour Academic Director of the Safety and Health Vocational Management System, The Engineering Institute of Thailand Chairman of the Council, Chao Phraya University Chairman, Khunying Phancheun Reunsiri Foundation Chairman, Ajarn Lai-arj Phamarapa Foundation Chairman, Industrial Development Foundation Shareholding as of 11 February 2013: 60,000 shares (0.01%) (including shareholdings of related persons as per Section 258 of the SEC Act)

Mr. Sompong Phaoenchoke

Ms. Kaewjai Phaoenchoke

Age : 52

Age : 48

D re tor Mana n D re tor

Academic Qualifications Master’s degree in Industrial Engineering, Keio University, Japan National Defence College Class of 2006 Capital Market Academy No.8 National Defence College Course in high level security management and administration (class of 2010) Director Certification Program 26/2003: IOD Present Position Director & Managing Director, Chairman of Risk Management Committee of Thai Rung Union Car Plc. Director & Vice President of Thai Ultimate Car Co., Ltd. Delta Thairung Co., Ltd. Isuzu Chaicharoenkij Motors Co., Ltd. Thai V.P. Corporation Co., Ltd. First Part Co. Ltd. V.P. Auto Enterprise Co. Ltd. Biz Motor Co. Ltd. Lexus Auto City Co., Ltd. Director & Managing Director of Thai Rung Tools and Dies Co., Ltd. Thai V.P. Auto Service Co., Ltd. Thai Auto Pressparts Co., Ltd. Director of Thai Auto Conversion Co., Ltd. Chaicharoenkij Motors Co., Ltd. Sinthoranee Property Co., Ltd. Shareholding as of 5 February 2013: 35,872,000 shares (7.15%) (including shareholdings of related persons as per Section 258 of the SEC Act)

D re tor

Academic Qualifications Bachelor Degree in Financial Administration University of New England Australia Executive Program “Owner/President Management Program” No. 42 Harvard Business School, USA Winning with Strategy :YPO (Thailand) Secret of Effective Business : YPO (Thailand) Cambridge-Thammasat Executive Education Program “Leadership” No.1 University of Cambridge, England Positive Psychology : YPO (Thailand) Strategic Human Resource Management Thammasat University Director Certification Program 29/2003: IOD The Boss Executive Educational Program No.38 Management and Psychology National Defence College Class of 2013 Present Position Director & Executive Board of Thai Rung Union Car Plc. Director & Chief Executive Officer of Thai V.P. Corporation Co., Ltd. Thai Ultimate Car Co., Ltd. Isuzu Chaicharoenkij Motors Co., Ltd. First Part Co., Ltd. Biz Motor Co., Ltd. V.P. Auto Enterprise Co., Ltd. V.P.K. Auto Co., Ltd. Director of Thai V.P. Auto Service Co., Ltd. Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts Co., Ltd. Chaicharoenkij Motors Co., Ltd. Sinthoranee Property Co., Ltd. Shareholding as of 5 February 2013: 32,639,450 shares (6.51%)

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Mr. Wuttichai Phaoenchoke D re tor Age : 43

Academic Qualifications Master’s degree in Automotive Engineering, Coventry University, U.K. Present Position Director and Executive Board of Thai Rung Union Car Plc. Director & Managing Director of Isuzu Chaicharoenkij Motors Co., Ltd. Chaicharoenkij Motors Co., Ltd. Sinthoranee Property Co., Ltd. Director & Deputy Managing Director of Thai V.P. Auto Service Co., Ltd. Director of Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts Co., Ltd. Thai Ultimate Car Co., Ltd. V.P. Auto Enterprise Co., Ltd. Thai V.P. Corporation Co., Ltd. Biz Motor Co., Ltd. Shareholding as of 5 February 2013: 31,201,500 shares (6.22%)

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Mr. Somkiat Nimrawee In epen ent D re tor

Age : 61

Academic Qualifications Bachelor’s degree in Finance & Accounting, Thammasart University Director Accreditation Program 10/2004: IOD Present Position Independent Director, Member of Risk Management Committee, Executive Board and Nomination & Remuneration Committee of Thai Rung Union Car Plc. Managing Director of Dan-Thai Equipment Co., Ltd. Dan-Thai Handing System Co., Ltd. Dan-Thai Engineering Co., Ltd. Shareholding as of 5 February 2013: 80,000 shares (0.02%)

Mr. Kavee Vasuvat

Mr. Suvait Theeravachirakul Mr. Damri Tunshevavong In epen ent D re tor Me er Au t Co ttee Age : 54

In epen ent D re tor Age : 59

Academic Qualifications Bachelor’s degree in Electrical Engineering, Royal Melbourne Institute of Technology, Australia Director Forum Program 1/2000 : IOD Director Accreditation Program 23/2004 : IOD Director Certification Program 58/2005 : IOD Finance for Non-Finance Directors 18/2005 : IOD Audit Committee Program 10/2005 : IOD Present Position Independent Director & Member, Audit Committee and Nomination & Remuneration Committee of Thai Rung Union Car Plc. Independent Director & Chairman Audit Committee and Member Remuneration Committee of Thai Steel Cable Plc. Chairman of Q.E.D. Creation Co., Ltd. Shareholding as of 5 February 2013: None

Academic Qualifications Bachelor’s degree in Business Administration, Accounting, Ramkhamhaeng University Master’s degree in MBA, Wagner College, New York NY, U.S.A. Capital Market Academy No.10 Director Certification Program 9/2001: IOD Audit Committee Program 15/2006: IOD Present Position Independent Director & Member, Audit Committee and Risk Management Committee of Thai Rung Union Car Plc. Director & President of MBK Plc. Director of Royal Orchid Hotel (Thailand) Plc. Director of IFS Capital (Thailand) Plc. Executive Director of Patum Rice Mill and Granary Plc. Executive Director of Siam Piwat Co., Ltd. Director of Vachirachart Consultant Co., Ltd. Shareholding as of 5 February 2013: 15,012 shares (0.003%)

Academic Qualifications Becheor’s degree in electrical engineering, Chulalongkorn University Advanced Management Program Harvard University, USA. Capital Market Academy (class of 2009) Director Certification Program 106/2008 : IOD Audit Committee Program 24/2008 : IOD Role of the Chairman Program 22/2009 : IOD Role of Compensation Committee 10/2010 : IOD Present Position Independent Director of Thai Rung Union Car Plc. Advisor to the President & CEO of Siam Cement Group Plc. Vice Chairman of Aira Capital Plc. Director of Thai Cane Paper Plc. Director of Yamato Kogyo Plc. (Japan) Director of Iron and Steel Institute of Thailand Shareholding as of 5 February 2013: None

In epen ent D re tor Me er Au t Co ttee Age : 77

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Corporate Social Responsibility

Thai Rung attaches importance to conducting its business in a socially and environmentally responsible manner and contributing towards the sustainability of the country’s economy and society, instilling moral and ethical values in its employees in line with the Company’s philosophy “Think right, do right, talk right”, encouraging them to live their lives in accordance with the philosophy of the sufficiency economy, raising their awareness of social responsibility in the interests of a mutually beneficial relationship between the Company and society and ensuring the sustainability of its business. Thai Rung is committed to supporting society through volunteer work and charitable activities.

Yout an E u at onal A t t e The Company has always recognised education as an essential element of the country’s progress and development. Thus the Company supports youth and educational activities on an ongoing basis, with a view to instilling healthy attitudes in today’s younger generation. Here are some of the activities of the past year. 1. Dr. Pranee Phaoenchoke Chairman, Mr. Sompong Phaoenchoke Managing Director of Thai Rung Union Car Plc together with other senior executives presented scholarships to children of employees of the Thai Rung group of companies as they have done every year since 1985, latterly on 18 March every year, Thai Rung Day, the anniversary of the death of Mr. Vichien Phaoenchoke, the founder of Thai Rung. 2. The Company attaches great importance to children, who will grow up to be the future of the nation, and accordingly supports and encourages employees wishing to volunteer by means of the Thai Rung Group Development Volunteers Association, which cooperates with government and private sector organisations. This project is carried out every year in an effort to supply basic essentials to underprivileged schoolchildren in remote areas.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

o al an En ron ental A t t e Every year Thai Rung supports a wide range of charitable, social and environmental causes in the community. The Company is dedicated to working with charitable organisations that share our goal of helping communities to improve through donations and sponsorships. We provide significant support to local communities in the areas of health, culture, education and sports. Activities were as follows: 3 The Company recognizes the importance of community where Thai Rung is located. Therefore senior executive has established community relations project that aims to assist and develop community together and continue support for public charities every year such as the following : Providing scholarships to promising poor pupils at schools in the Nong Khaem community. Promoting anti-drug campaign in the organization and community. Donating medical equipment to other many hospitals for example respirator equipment to Luang Pho Taweesak Hospital and etc . Providing financial support to the family of a Nong Khaem policeman killed in the line of duty. 4 The Company also has projects to help society in general, the senior executives and employees engage in activities including fund raising and budget allocation for medical and public health services such as the following; Providing scholarships for unprivileged children, through various charitable organizations such as the Phra Dabos Foundation and others. Donating medical support and equipment for nationwide hospitals and a VIP ward for Thammasat University Hospital Rangsit. Donating essential supplies and financial support to Baan Bangkae Elderly House.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

5 Mangrove forest project in Bang Khun Thien district aims to commemorate His Majesty The King’s Birthday on 5 December.

6. The Company also concerns, not only environment but also the wide animal. Therefore the Company organizes the walking rally for helping Thai elephant.

Rel ou A t t e The Company is convinced that a liveable and sustainably developing Thai society needs to be firmly underpinned by religion. The following are examples of the religious activities which it organised over the course of the year to promote goodness and virtue. 7. Senior executives and employees make merit together by giving food to monks and listen to a sermon at the beginning of each New Year. So that they start the year’s work with a positive attitude. Employees are also given the opportunity to make merit together on a regular basis.

8. The Company attaches great importance to this area, and therefore launched the “Mens Sana in Corpore Sano” project, which brings together employees and members of the local community for a session of meditation and to hear a sermon by a monk on a different theme each week.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

9. Given the importance of religion to Thai society, the Company consistently supports the traditions of Buddhism and other major religions. The Company has continued to arrange many activities together with charitable organizations and Buddhism associations as follow: Every year the Company co-hosts a ceremony of offerings for a sermon on the incarnation of Lord Buddha with the National Office of Buddhism. Hosting the vegetarian festival at the Guanyin shrine in Nong Khaem every year. Donating essential supplies and financial support to poor convents in various provinces every year.

Ot er A t t e 10. Senior executives of the Thai Rung Union Car Plc received the Outstanding Workplace Award in the category Labour Relations and Welfare from the Department of Labour Protection and Welfare at the Santimaitree Building, Government House. This was the seventh successive year (2006- 2012) that the Company has won this award, and Thai Rung Tools and Dies Co Ltd also won the same award, for the fifth successive year (2008-2012).

11. Thai Rung Union Car Plc received the â&#x20AC;&#x153;President Awardâ&#x20AC;? from Bangkok Komatsu Co Ltd (BKC).

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

General Information

Listed Company Companies Register Number Registered share capital Paid-up share capital Business Activities

Address

Website Securities Registration

Auditors

Thai Rung Union Car Public Company Limited 0107536001435 Bt.524,996,497 divided into 524,996,497 ordinary shares of Bt.1 each. Bt.501,589,497 Product design, research and development Manufacture of dies and jigs Manufacture of automotive parts and seats Contract vehicle painting and assembly, vehicle modification 28/6 Moo 1, Phetkasem Road Soi 81, Nongkhangplu, Nong Khaem, Bangkok 10160 Tel: 0-2431-0071-2, 0-2431-0065, 0-2420-0076 Fax: 0-2812-0844, 0-2814-5030, 0-2420-3664 http://www.thairung.co.th Thailand Securities Depository Company Limited 62, Stock Exchange of Thailand Building, Rachadaphisek Road, Klong Toey, Bangkok 10110 Tel: 0-2229-2800, 0-2654-5599 Fax: 0-2359-1259 Mr. Atipong Atipongsakul CPA No. 3500 and/or Mr. Prawit Viwanthananut CPA No. 4917 and/or Mr. Bunjong Pichayaprasat CPA No. 7147 and/or Mr. Vichai Ruchitanont CPA No. 4054 and/or Mr. Sathien Vongsnan CPA No. 3495 ANS Audit Co., Ltd. 100/72, 22nd Floor, 100/2 Vongvanij Building B, Rama 9 Road, Huaykwang Bangkok 10310 Tel: 0-2645-0109 Fax: 0-2645-0110

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Group tru ture o T a Run Un on Car Pu l Co pan L and subsidiaries as at 31 December 2012

Thai Rung Union Car Plc. TRU

T a Run Tool an D e Co Lt

T a Auto Con er on Co Lt 20

T a Auto Pre part Co Lt 1

Delta T a run Co Lt 30

P Auto er e Co Lt

T a Ult ate Car Co Lt 3

General Information on Subsidiaries and Joint Venture Companies Subsidiary Companies

Thai Rung Tools and Dies Co., Ltd.

Registered share capital Bt.27,000,000 issued and fully paid up, divided into 270,000 ordinary shares of Bt.100 each Business Activities Manufacture of dies and jigs. Address 28/22 Moo 1, Phetkasem Rd. Soi 81, Nongkhangplu, Nong Khaem, Bangkok 10160 Tel: 0-2431-0071-2, 0-2431-0065, 0-2420-0076 Fax: 0-2814-5030, 0-2420-3664

Thai Auto Pressparts Co., Ltd.

Registered share capital Bt.400,000,000 issued and fully paid up, divided into 4,000,000 ordinary shares of Bt.100 each Business Activities Manufacture of automotive body parts Address Amata City Industrial Estate 7/122 Moo 4, National Highway 331, Tambol Marpyarngphorn, Amphoe Pluak Daeng, Rayong 21140 Tel: (038) 956-156, 956-239-42 Fax: (038) 956-169 Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Thai V.P. Auto Service Co., Ltd.

Registered share capital Bt.25,000,000 issued and fully paid up, divided into 250,000 ordinary shares of Bt.100 each Business Activities Sale of spare parts and accessories, after-sales service centre, installation of LPG and CNG vehicle conversion units. Address 151 Macharoen Rd., Nongkhangplu, Nong Khaem, Bangkok 10160 Tel: 0-2420-6708, 0-2420-4823, 0-2812-1445-6 Fax: 0-2420-1601 Website www.trservice.in.th

Thai Ultimate Car Co., Ltd.

Registered share capital Bt.25,000,000 issued and fully paid up, divided into 25,000 ordinary shares of Bt.1,000 each Business Activities Providing automotive, consulting and general administrative and organisational services Address 28/22 Moo 1, Phetkasem Rd. Soi 81, Nongkhangplu, Nong Khaem, Bangkok 10160 Tel: 0-2431-0071-2, 0-2431-0065, 0-2420-0076 Fax: 0-2812-1992 Joint Venture Companies

Thai Auto Conversion Co., Ltd.

Registered share capital Bt.74,500,000 issued and fully paid up, divided into 74,500 ordinary shares of Bt.1,000 each Business Activities Product development and fitting of special accessories for special purpose vehicles. Address 159, Moo 16, Thaeparak Road, Tambol Bang Sao Thong, Amphoe Bang Sao Thong, Samut Prakarn Province 10540 Tel: 0-2313-1371-8 Fax: 0-2313-1380

Delta Thairung Co., Ltd.

Registered share capital Bt.300,000,000 issued and fully paid up, divided into 3,000,000 ordinary shares of Bt.100 each Business Activities Manufacture of auto seats and parts and other equipment for vehicles Address Amata City Industrial Estate 7/150 Moo 4, Tambol Marpyarngphorn, Amphoe Pluak Daeng, Rayong 21140 Tel: (038) 650-398-400 Fax: (038) 650-400

Note: Delta-TR Co., Ltd. a joint venture, filed for dissolution with the Department of Business Development of the Ministry of Commerce on 6 March 2012.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Nature of Business

General Bu ne O er e o t e Co pan t u

ar e an o nt enture

Thai Rung Union Car Public Co., Ltd. is in the motor vehicle industry. Its main business activities are product design, research and development, manufacture of tools, dies and jigs, manufacture of metal and plastic parts, contract vehicle painting and assembly and modification of vehicles, including multi-purpose vehicles and special purpose vehicles such as TR Transformer, Military Utility Vehicle 4 (MUV4) and rapid response rescue vehicles. The Company has six subsidiary and joint venture companies, which are engaged in related or supporting businesses and which enable the group to provide a full range of services as well as spreading the business risks. Details are as follows.

Thai Rung Union Car Plc. has three business units as follows; Product design, research and development and contract research, design and modification of various types of vehicles for domestic and overseas customers. Pressed metal and plastic parts and seats for car, truck and motorcycle manufactures, parts for construction tools, industrial and agricultural machinery, or other businesses beyond the auto industry such as electronic components, as well as for use in its own internal production processes. Paint work and contract assembly for the automobile customers, the industrial and agricultural machinery sectors and modification of vehicle for multi-purpose vehicles and special purpose vehicles such as TR Transformer, Military Utility Vehicle 4 (MUV4) and rapid response rescue vehicles.

Thai Rung Tools and Dies Co., Ltd. (TRT) makes dies and jigs. It has received BOI promotional privileges for investments.

Thai Auto Pressparts Co., Ltd. (TAP) started business in June 2002 at its factory at Amata City Industrial

Estate, Amphoe Pluak Daeng, Rayong Province, thus considerably expanding the group’s parts production capacity. Thai Auto Pressparts, which has been granted BOI promotional privileges for its investments, supplies automotive parts to the customer group formed by auto and motorcycle manufacturers in the Eastern Seaboard and surrounding areas, and also caters to the export market. In 2012 , the new factory in Rayong province has already started commercial operation.

Thai V.P. Auto Service Co., Ltd. (TVS) provides after-sales service for Thai Rung’s multi-purpose vehicles.

In 2005 it expanded its activities to include plastic accessories under the name “Parto”. In 2008 it extended its range of services to include the installation of LPG and CNG vehicle conversion units. In 2012, The Company starts paint work to cater the growth of customer demand. Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Thai Ultimate Car Co., Ltd. (TUC) a subsidiary of TVS which it acquired in 2001. Its current activity consists

of providing automotive consulting and general administrative and organisational services.

Thai Auto Conversion Co., Ltd. (TAC) is a joint venture with the Toyota Motor Group for product development and fitting of accessories for special purpose vehicles.

Delta Thairung Co., Ltd. (DTC) is a joint venture with Delta Kogyo of Japan, newly established in 2007

to manufacture auto seats and parts and other equipment for vehicles. Its factory is at Amata City Industrial Estate, Amphoe Pluak Daeng, Rayong Province.

The Companyâ&#x20AC;&#x2122;s group policy is for each subsidiary to strive to operate profitably in its own right and to be self-sufficient in its particular activities within the overall policy of the parent.

Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2010-2012 Sales and service

2010 2011 2012 shares Performed by % ofheld Million Bt % Million Bt % Million Bt %

Revenue from vehicle TRU assembly and other vehicle-related contract work Revenue from the produc- TRU, TAP, tion of vehicle manufacturTRT ing equipment Revenue from sales of TRU, TVS, vehicles and from service TUC centres

1,123.26 52 1,116.10 49 2,100.68 56 91, 94

584.82 27

763.67 34 1,280.34 34

94, 99.53*

262.13 12

175.01 8

118.56 3

Total revenue from Sales & service Other income

1,970.21 92 2,054.78 91 3,499.58 93 178.82 8 208.32 9 281.26 7

Total Revenues

2,149.03 100 2,263.10 100 3,780.84 100

* TRU holds 94% of the shares in TVS, which in turn holds 99.53% of the shares in TUC.

Unit: Million Bt.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

In u tr tren an uture o pet t e tuat on The dynamic of automotive Industry which the global economic center is shifting from West to East. Asia plays an increasingly important role as an increasingly important market and a major global production base. Apart that, the coming into force of the ASEAN Economic Community (AEC) in 2015 will stimulate growth in this industry as well as the relocation of more automakers from Japan and Europe to this region. As a result, the business operators must adapt themselves to cater the growth and intense competition. The Companyâ&#x20AC;&#x2122;s management strategy in 2013 will continue to focus on OEM, contract assembly and painting and vehicle modification, as well as expanding parts making for agricultural machinery. The Company will also continue to seek alliances to expand its existing business and develop new ones. Furthermore the Company has boosted its potential, both by increasing production capacity and by improving efficiency by investing in new machines and introducing innovative technology to the production process, as well as developing human resources to cater to any foreign trade and investment.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Risk Factors

The Company attaches importance to applying the principles of risk management as a tool in managing the organisation to world standards. A Risk Management Committee is responsible for overseeing and controlling compliance with risk management policies and rules, monitoring any significant risks that arise and taking steps to ensure that the organisation has in place risk management systems that are adequate and appropriate to its business and enable it to meet its objectives. The Company has established a risk management plan which is continuously aligned with its strategic and business plans, examples being the revision of practical manuals to keep them up to date and thus able to support improvement drives throughout the organisation, the establishment and review of clear roles, duties and responsibilities of executives and employees and continuous performance evaluation aimed at incentivising employees and boosting efficiency. In 2012 the Company had to increase its production capacity to cater to the greatly increased volumes of work, particularly for contract vehicle assembly, EDP dip and painting of Nissan pick-ups. The Company paid attention to the risks associated with possible effects of both atmospheric and noise pollution and made determined efforts to solve these problems, establishing a policy to invest several million baht in improving the efficiency of the EDP and painting processes and installing systems to protect against paint dust and odour in accordance with international standards. The Company has obtained, and maintains, ISO 14001 quality certification, which involves regular checks by a government-approved company on the various kinds of pollution associated with the production process. The Company also has a system of checks, improvements, repairs and maintenance for its machinery and production systems at regular intervals. Accordingly the Company is confident that the production systems in the paint dip and paint shop facilities are efficient and will not cause environmental problems.

1 Bu ne R 1.1 Multi-purpose vehicles Brand owners who already produce multi-purpose vehicles, and new entrants attracted into the market by the high value of the station wagon type segment. the implementation of free trade under AFTA coming into effect from 1 January 2010 brings import duty down to zero, increasing opportunities for foreign brands to establish themselves in the Thai market, which would increase competition. higher oil prices have increasingly focused the marketâ&#x20AC;&#x2122;s attention on small cars that use alternative energy sources and/or are fuel efficient, which could have an impact on the pick-up truck market and the Companyâ&#x20AC;&#x2122;s multi-purpose vehicle business.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

In order to spread the risk and mitigate any effect that might arise from the various risk factors in the multi-purpose vehicle business the Company has established guidelines as follows: The Company focuses on the area of multi-purpose vehicle research and development, striving for modern features and quality in line with its target customer groupsâ&#x20AC;&#x2122; needs. The Company has also conducted studies on developing a business for various kinds of special purpose vehicles such as TR Transformers, TR exclusive limousine Military Utility Vehicle 4 (MUV4), rapid emergency vehicles in order to expand its market and its target customer groups, taking advantage of its flexibility in terms of adapting its production processes. The Company held events and road shows in various provinces to present its products and public relations through various media in order to increase sales opportunities. Apart from this emphasis was also given to sales to government departments. The Company put additional measures in place throughout the organisation to reduce costs and save on expenses, both in the factory and in sales and support areas, so as to streamline costs so as to be able to compete and survive the economic crisis. 1.2 Auto Parts and Contract Assembly The implementation of free trade under AFTA coming into effect from 1 January 2010 brings import duty down to zero and thus increases manufacturersâ&#x20AC;&#x2122; options in terms of importing parts instead of having them made in Thailand. Thai auto parts makers are faced with tougher competition on price and quality, from both domestic and foreign producers. In order to spread the risk and mitigate any effect that might arise from the various risk factors in the parts making and contact assembly business the Company has established guidelines as follows: The Company continues to foster its relationships with its long-standing major customers, whilst at the same time seeking new customers from other sectors such as premium level motorcycles, which is a niche market with high added value, parts for construction tools, industrial and agricultural machinery, or other businesses beyond the auto industry such as electronic components, and also to broaden the customer base to other countries such as China, India and Australia so as to spread the risks in terms of sources of work. It also arranges programmes of marketing activities aimed at enhancing customer relations in general throughout the year, as well as establishing new target customer groups every year. We provide a one stop service for plastic parts, painting, contract assembly and modification work from research and design through to finished parts. The Company is always on the look out for possible foreign business alliances with a view to increasing its know-how in the areas of production technology and more efficient machinery so as to prepare for the future, and to joint investment and expanding into additional related businesses, its policy being to seek Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

work with high added value. The Company is constantly developing new products and production processes in response to government policy and growing customer requirements. As a result of the rapid growth in the Thai automotive industry, many automakers find themselves with insufficient capacity. This present opportunities for the Company to win additional contract assembly and painting work. The Company has therefore decided to expand its production capacity further. And is currently studying the possibility of investing to build a new paint shop to cater to the growing demand 1.3 Dies and Jigs We expect the domestic die and jig making business to improve in 2013 in view of the various forthcoming new models. However the Company still aims to find work from overseas, from automakers moving their production bases to Thailand, and from new customers such as makers of construction, industrial or agricultural machinery. In order to spread the risk and mitigate any effect that might arise from the various risk factors in the die and jig making business the Company has established guidelines as follows: The Company has carried out investments to improve the efficiency of the production process so as to meet the many and varied customer requirements and at the same time to improve chances of winning the big size of die that have the high value added and less competitor. The Company has a project to increase automation of the production process so as to lessen the impact of shortages of skilled labour, and has also arranged training courses aimed at enhancing personnel capability. To build dies and jigs on a tier-two basis for tier-one suppliers overseas, e.g. Europe, America, who need to outsource work to countries with lower production costs. To provide a one stop service for research, design, modification, right through to dies, jigs and other production equipment. Boost level of die and jig design and production for turn-key projects through alliance with foreign partner so as to be able to enter more overseas tenders Build up a network of business allies in Thailand so as to cater to the volume of new projects coming on stream, increase production capacity and be able to take on turn-key projects overseas Nevertheless in order to spread the risks in all three business units, the Company also strives to diversify its business, both to reduce the risk of business concentration and to broaden the revenue base. Examples are: Expanding the business to include the production and sale of vacuum mould plastic parts including plastic accessories under the name â&#x20AC;&#x153;Partoâ&#x20AC;?, a proprietary brand owned by the Company, including growing sales on an OEM basis, so as to respond comprehensively to customersâ&#x20AC;&#x2122; needs.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

The Company is a leader in the design and development of flat deck cargo boxes for pick-up trucks, which it sells to a number of truck makers for distribution in the domestic market ad overseas. Expanding the business of product design and development to various automakers at home and abroad

nan al R

2.1 Credit risk The Company and subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, loans, and other receivables. The Company and subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore do not expect to incur material financial losses from granting credit. In addition, the Company and its subsidiaries do not have high concentrations of credit risk since they have a large customer base. The largest possible amount that the Company and its subsidiaries could lose from granting credit is the sum of the carrying amounts of customer receivables, lending and other receivables as shown in the balance sheet. 2.2 Interest rate risk The Company’ and subsidiaries’ exposures to interest rate risk relate primarily to their cash at banks, current investments and short-term loans. However, since most of the Company’s and subsidiaries’ financial assets and liabilities have been repaid within one year, the interest rate risk is expected to be minimal. 2.3 Exchange rate risk A subsidiary has significant exposure to exchange rate risk arising from sales or purchases denominated in foreign currency. The subsidiary has managed this risk by putting forward exchange contracts in place, the majority of them at terms of not more than one year. Please refer to details in Note 28 to the Financial Statements for the year ended 31 December 2012.

3 Le al r This concerns the risk of being sued by consumers on grounds of product quality and possibly having to pay damages under product liability legislation as result of auto parts made by the Company being used to assemble vehicles for sale domestically or abroad. A customer could sue a distributor for damages caused by a faulty vehicle, and if it could be shown that the problem was caused by a defective part made by the Company, we could in turn be sued for damages, and depending on the court’s decision might suffer loss as a result.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

The Company takes this risk seriously and consequently trains senior executives and personnel on points of law and enforces strict compliance with the ISO/TS 16946 quality standard so as to ensure that production processes are efficient, traceable and auditable, right up to pre-delivery inspection so as to guarantee that customers receive quality product. The target claim rate is zero.

a et en ron ental an o

un t r

The Company attaches importance to its human resources and stakeholders, striving to manage its business in such a way as to reduce all kinds of risks that affect people’s quality of life, as well as fulfilling its responsibilities towards society and building good relations with its neighbouring community, through the following measures: Annual review of safety and environmental policies and quarterly activity meetings to inform supervisors of monitoring results Stress on employee awareness of and attention to safety and environmental issues, all employees being obliged to follow the CCCF (Completely Check, Completely Find Out) procedure and the ISO14001 environmental management standard, as well as other activities such as “White Factory” “Drive Safely”, “Don’t Drink and Drive” and “Give up Alcohol for Lent”. Annual scholarship awards to children of employees who achieve a certain standard. The Company supports society by donating money, supporting various departments and the local community, for example donating medical equipment to hospitals, granting scholarships to pupils of various schools, arranging volunteer programmes in support of underprivileged communities in various parts of the country, volunteer traffic activities, anti-drugs campaigns, cooperation with government departments, etc.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Shareholders and Management

are ol er Major Shareholders as at 5 February 2013, last date on which the share register was closed. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Name Dr. Pranee Phaoenchoke Mr. Sompong Phaoenchoke* Ms. Kaewjai Phaoenchoke Mr. Wuttichai Phaoenchoke Citibank Nominees Singapore Pte Ltd.-S.A. PBG Clients SG Mr. Arnan Tantijarascheb Thai Rung Union Car Plc. Tisco Securities Co., Ltd. Mr. Wongwaris Phaoenchoke Mr. Pattanasorn Phaoenchoke TOTAL

% of total shares

246,387,500 35,872,000 32,639,450 31,201,500 24,771,925 15,150,000 9,216,700 9,000,000 9,000,000 8,657,100

49.12% 7.15% 6.51% 6.22% 4.94% 3.02% 1.84% 1.79% 1.79% 1.73%

421,896,175

84.11%

Note * Mr. Sompong Phaoenchoke holds 27,622,000 shares, his wife Mrs. Kaewkao Phaoenchoke holds 2,250,000 shares and his minor child Mr. Korrawut Phaoenchoke holds 6,000,000 shares.

Mana e ent 1 Mana e ent tru ture 1.1 Structure of Companyâ&#x20AC;&#x2122;s Board of Directors The Company has the following five boards and committees: Board of Directors, Audit Committee, Executive Committee, Risk Management Committee and Nomination and Remuneration Committee, each committee having the powers and duties as follows:

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

1) Powers and Duties of the Board of Directors 1. To carry out its duties in accordance with the Company’s laws, objectives and regulations, including resolutions of shareholders’ meetings, in accordance with the law, with integrity, ethically, prudently and with due regard to the Company’s best interests. 2. To arrange for a shareholders’ meeting to be held at least once a year, to report to shareholders on the Company’s performance and to seek shareholders’ approval for matters which exceed the authority or duties of the board of directors. 3. To hold a meeting of the Board of Directors at least once every three months. 4. To take all necessary steps to ensure that financial and other information provided to shareholders is at all times correct, complete and transparent. 5. To ensure that the Company has efficient internal control and audit systems in place. 6. To consider and make decisions on important matters such as policies, business plans, administrative powers, large investment projects, related party transactions, acquisitions or disposals of assets of the listed company as covered by the regulations of the Stock Exchange of Thailand, and any other matters stipulated by law. 7. To ensure that the Company’s business dealings are carried out in an ethical manner. 8. The Board of Directors may delegate its powers and duties to one of more Directors or to other individual (s) as it sees fit, authorizing such person or persons to act on its behalf with whatever powers and duties it may chose to assign. 9. The Board of Directors has the power to appoint and to change authorised signatories empowered legally to bind the Company on its behalf. 10. To consider the payment of interim dividends to shareholders. 11. To establish the Company’s policies and working guidelines and to monitor administrative departments’ efficient and effective implementation of such policies with a view to maximizing growth and economic value for shareholders. 12. To give advice to the Managing Director on administration and on decisions likely to have important consequences for the Company. 13. To avoid conflicts of interest amongst Company stakeholders.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

The scope of the powers and duties mentioned shall not extend to: 1. Matters subject by law to a resolution of a shareholders’ meeting, such as capital decrease or increase or amendments to the Company’s Memorandum or Articles of Association. 2. The authorisation of any related party transaction or acquisition or disposal of listed Company’s assets, which require approval by a meeting of shareholders in accordance with the regulations of the Stock Exchange of Thailand. 3. The authorisation of any transaction in which a Director is an interested party or has a conflict of interest, which requires approval by a meeting of shareholders. 2) Powers and duties of the Audit Committee 1. To ensure that the Company’s financial reporting is accurate and adequate. 2. To ensure that the Company’s internal control and internal audit systems are appropriate and effective, to consider the independence of the Internal Audit department and to give its opinion on the appointment, transfer or dismissal of the Head of the Internal Audit Department or such other department as has responsibility for internal audit. 3. To ensure that the Company operates in accordance with the law relating to securities and the stock exchange and with regulations of the Stock Exchange and laws relating to the Company’s business. 4. To consider the selection and nomination of independent individuals to perform duties as the Company’s auditors, and to propose their remuneration; to attend meetings with the auditors, without management departments being present, at least once a year. 5. To consider related party transactions and transactions likely to give rise to a conflict of interest so as to ensure that they are conducted in accordance with the law and with regulations of the Stock Exchange of Thailand so as to provide confidence that such transactions are fitting and proper and in the Company’s best interests. 6. To deliver a report on the Audit Committee’s activities for publication in the Company’s Annual Report, such report to be signed by the Chairman of the Audit Committee and must contain at least the following information (a) Its opinion on the accuracy, completeness and reliability of the Company’s financial statements (b) Its opinion on the adequacy of the Company’s internal control systems (c) Its opinion on the Company’s compliance with the law relating to securities and the stock exchange and with regulations of the Stock Exchange and laws relating to the Company’s business (d) Its opinion on the suitability of the auditors (e) Its opinion on likely to give rise to a conflict of interest (f) The number of times the Audit Committee has met, together with individual attendance details (g) Its opinion or general observations based on the performance of its duties as per its charter (h) Any other matters that it considers shareholders and investors generally should know within the scope of action, duties and responsibilities assigned to it by the Company’s Board of Directors. Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

7. To carry out any other duties assigned to it by the Company’s Board of Directors with the agreement of the Audit Committee 3) Powers and Duties of the Executive Committee 1. To control and take care of the general conduct of the Company’s business and perform duties assigned to it by the Company’s Board of Directors in order to achieve the Company’s objectives. 2. To direct and monitor the successful implementation of policies and working plans assigned by the Company’s Board of Directors to the various administrative departments. 3. To examine, consider and authorise important and urgent business within the scope of its powers and duties and monetary limitation determined by the Company’s Board of Directors but in any case not exceeding Bt.400m. 4. To establish financial policies and supervise and monitor the administration of all financial work, including all business conducted with financial institutions, with a view to optimising efficiency. 5. To consider and authorise transactions within the Company’s scope of business. 6. To perform such other duties as may be assigned by the Company’s Board of Directors. The scope of the powers and duties mentioned shall not extend to the authorisation of any transaction in which the executive board or an individual is an interested party or involving a conflict of interest on the part of the executive board or an individual, nor any related party transaction nor the acquisition or disposal of listed Company’s assets, in accordance with the regulations of the Stock Exchange of Thailand 4) Powers and duties of the Risk Management Committee 1. To establish a policy and framework for managing the Company’s overall risk situation, covering the various risks that might affect the Company’s results and reputation. 2. To establish strategies which are in accordance with the Company’s overall risk management policy and which enable risks to be gauged, monitored, taken care of and kept at appropriate levels, including the setting up of advance warning systems. 3. To review the adequacy and effectiveness of risk management policies and systems and monitor adherence to those policies on an ongoing basis so as to enhance the prudence, security and efficiency of the Company’s overall risk management. 4. The Risk Management Committee has the power to establish and define the roles of sub-committees and working committees for managing the various kinds of risk as it sees fit, and all such committees shall report directly to the Risk Management Committee. 5. The Committee is empowered to call for documents and information and to require individuals to provide facts for consideration so as to be able to achieve its objectives. 6. To communicate with the Audit Committee in order to ensure that risk management systems are in line with internal controls and in accordance with policies and strategies that have been established. 7. To report to the Board on risks and risk management.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

5) Powers and duties of the Nomination and Remuneration Committee 1. To select persons with characteristics appropriate to the position of Company Director using transparent criteria and considering any names put forward by shareholders for nomination to the Board of Directors. 2. To select persons with characteristics appropriate to the position of Chairman of the Executive Committee and Managing Director in the event of their being a vacancy, for nomination to the Board of Directors for their consideration, and to prepare a succession plan for senior executive positions. 3. To set policies, methodology and criteria for establishing Directors’ remuneration fairly and in consonance with the Company’s results and with each individual’s performance. 4. To consider, review and present proposals for establishing Directors’ remuneration. 5. To present reports and proposals of the Nomination and Remuneration Committee to meetings of the Company’s Board of Directors for their consideration. 6. To perform such other duties as the Company’s Board of Directors may from time to time assign to it. 1.2 List of names of Company Directors 1) Board of Directors As at 31 December 2012 all nine positions on the Board of Directors were occupied as follows. Name 1. 2. 3. 4. 5. 6. 7. 8. 9.

Dr. Pranee Mr. Pricha Mr. Sompong Ms. Kaewjai Mr. Wuttichai Mr. Kavee Mr. Suvait Mr. Somkiat Mr. Damri Mr. Sakchai

Phaoenchoke Attavipach Phaoenchoke Phaoenchoke Phaoenchoke Vasuvat Theeravachirakul Nimrawee Tunshevavong* Komgris

Position Chairman of the Board Independent Director and Deputy Chairman of the Board Director Director Director Independent Director Independent Director Independent Director Independent Director Company Secretary and Secretary to the Board of Directors

* Note: Mr. Damri Tunshevavong was appointed a Director to replace Mr. Anthony Farquhar McDonald who resigned from his position as Director effective 28 February 2012

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Quorum for Board Meetings 1. A quorum for a meeting of the Board of Directors is constituted by not less than half the total number of Board of Directors. 2. Resolutions are passed by a simple majority of votes by Directors present, each Director having one vote. 3. At each Annual General Meeting of the Company at least one third of the Directors, or if the number of Directors is not divisible by three then the nearest number to one third, must retire, the longest serving Directors retiring first. Directors retiring by rotation may be re-appointed for a further term of office. 2) Audit Committee As at 31 December 2012 the Companyâ&#x20AC;&#x2122;s Audit Committee was composed of three independent directors as follows: Name 1. Mr. Pricha 2. Mr. Kavee 3. Mr. Suvait Mr. Phakkawat

Attavipach Vasuvat Theeravachirakul Suwanmajo

Position Chairman of the Audit Committee Member of the Audit Committee Member of the Audit Committee Secretary to the Audit Committee

Members of the Audit Committee serve for a term of two years. A quorum for a meeting of the Audit Committee is constituted by not less than half the total number of Committee Members. Resolutions are carried by the affirmative votes of not less than half the total number of Members present. 3) Executive Committee As at 31 December 2012 the Companyâ&#x20AC;&#x2122;s Executive Committee consisted of five Directors, as follows: Name 1. 2. 3. 4. 5.

Dr Pranee Mr Sompong Ms Kaewjai Mr Wuttichai Mr Somkiat Mr. Sakchai

Phaoenchoke Phaoenchoke Phaoenchoke Phaoenchoke Nimrawee Komgris

Position Chairman of Executive Committee Managing Director Member of Executive Committee Member of Executive Committee Member of Executive Committee Secretary to the Executive Committee

Directors on the Executive Committee serve for a term of three years. A quorum for a meeting of the Executive Committees is constituted by not less than half the total number of Directors. Resolutions are carried by the affirmative votes of not less than half the total number of Directors present.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

4) Risk Management Committee As at 31 December 2012 the Companyâ&#x20AC;&#x2122;s Risk Management Committee was composed of six members, as follows: Name 1. 2. 3. 4. 5. 6.

Mr. Sompong Mr. Somkiat Mr. Suvait Mr. Sakchai Mr. Chawan Mr. Phakkawat

Phaoenchoke Nimrawee Theeravachirakul Komgris Ngamwongsakolert* Suwanmajo

Position Chairman of the Risk Management Committee Member of the Risk Management Committee Member of the Risk Management Committee Member of the Risk Management Committee Member of the Risk Management Committee Member of and Secretary to the Risk Management Committee

* Note: Chawan Ngamwongsakolert was appointed a Director to replace Mrs. Kaewkao Phaoenchoke who resigned from her position as committee, effective 13 November 2012.

Members of the Risk Management Committee serve terms of two years. A quorum for a meeting of the Risk Management Committee is constituted by not less than half the total number of Members. Resolutions are carried by the affirmative votes of not less than half the total number of Members present. 5) Nomination and Remuneration Committee As at 31 December 2012 the Companyâ&#x20AC;&#x2122;s Nomination and Remuneration Committee was composed of three independent directors as follows: Name 1. Mr. Pricha 2. Mr. Kavee 3. Mr. Somkiat Mr. Sakchai

Attavipach Vasuvat Nimrawee Komgris

Position Chairman of the Nomination and Remuneration Committee Member of the Nomination and Remuneration Committee Member of the Nomination and Remuneration Committee Secretary to the Nomination and Remuneration Committee

Members of the Nomination and Remuneration Committee serve terms of two years. A quorum for a meeting of the Remuneration Management Committee is constituted by not less than half the total number of Members. Resolutions are carried by the affirmative votes of not less than half the total number of Members present.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Directors’ signing powers Directors’ signatory powers to bind the Company as recorded in the Company’s registry. At present such powers are as follows: Any one of the following Directors, acting alone, may bind the Company with his or her signature and the Company seal: 1. Dr. Pranee Phaoenchoke 2. Mr. Sompong Phaoenchoke 3. Ms. Kaewjai Phaoenchoke 4. Mr. Wuttichai Phaoenchoke (Memorandum of Association amended 16 March 2012) 1.3 Criteria for Appointment of Independent Directors The selection process for Independent Directors can be seen in the heading concerning criteria for selection of Directors and Administrators. Independent Directors must have qualities in accordance with the Company’s definition of Independent Director which in turn is in accordance with that of the SEC, as follows. Characteristics and definition of independent director of Thai Rung Union Car Plc. 1. Does not hold more than 1% of the total number of voting shares in the parent Company, or of any of its subsidiaries or joint venture companies or in any entity likely to give rise to a conflict of interest, shares held by related persons to be included in the calculation in accordance with directive 258 of the Securities Act. 2. Does not take part in administering the work, is not a contractor or an employee or consultant in receipt of a regular salary and is not in a position to exert control over the Company, its subsidiaries, joint ventures or fellow-subsidiaries or on any entity likely to give rise to a conflict of interest (at present, and in the two years prior to his appointment.) 3. Does not have business dealings with the Company: 3.1 Is not an auditor of the Company. 3.2 Does not provide other professional services to the Company such as legal or financial consultancy or appraisal worth more than Bt.2m per year. 3.3 Does not have habitual related party transactions by way of rent or lease, whether as lessor or lessee, of real estate, or concerning assets/services or the receipt or provision of financial assistance with a value exceeding Bt.20m or 3% of NTA, whichever is the lower, including transactions carried out in the one year prior to the carrying out of any given transaction.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

4. 5. 6. 7.

He must not have business relations as defined in 3.1 to 3.3 above at present, nor in the two years prior to his appointment except where there is necessary and proper reason and in any case not continuously or constantly. An Independent Director or Audit Committee Member may have relations that go beyond those stipulated while performing his office, but only after obtaining the unanimous prior approval of the Company’s Board of Directors and subject to the relationship being disclosed per Form 56-1, in the Annual Report and in the letter of invitation to the Shareholders’’ Meeting in the event that the Shareholders’ Meeting is to be asked to renew the term of office of the Independent Director or Audit Committee Member concerned. Is not related by blood or marriage to (i.e. is not the father, mother, spouse, sibling or child of or the spouse of a child of an Administrator, major shareholder or other person in a position of authority or candidate as Administrator or person in a position of authority of the Company or any of its subsidiaries. Has not been appointed to represent a Director or major shareholder or other shareholder that is a related party to a major shareholder. Does not have any other characteristic limiting his independence. An Independent Director having the characteristics set out in points 1 to 6 above may be given powers by the Board of Directors to decide on matters involving the Company, its subsidiaries, its joint ventures or fellowsubsidiaries or entities likely to have a conflict of interest on a collective decision basis

1.4 Number of Board Meetings held and individual Directors’ attendance record The following table shows a summary of the number of meetings held in 2012-Board meetings, meetings of Board Committees and Meetings of Shareholders-and individual Directors’ attendance record. Meeting attended / Meeting Held Attendance Nomination Risk Company Executive Shareand Audit Name Board of Committee Committee Remuneration Management atholders’ Directors Committee Committee Meetings 1. Dr. Pranee Phaoenchoke 4/4 3/3 0/1 2. Mr. Sompong Phaoenchoke 4/4 3/3 4/4 1/1 3. Ms. Kaewjai Phaoenchoke 1/4 3/3 1/1 4. Mr. Wuttichai Phaoenchoke 2/4 3/3 1/1 5. Mr. Damri Tunshevavong/1 2/3 1/1 6. Mr. Somkiat Nimrawee 3/4 3/3 2/2 3/4 1/1 7. Mr. Pricha Attavipach 4/4 4/4 2/2 1/1 8. Mr. Kavee Vasuvat 4/4 4/4 2/2 1/1 9. Mr. Suvait Theeravachirakul 4/4 3/4 4/4 1/1 2/3 10. Mrs. Kaewkao Phaoenchoke/2 11. Mr. Sakchai Komgris (Secretary) 4/4 3/3 2/2 4/4 1/1 12. Mr. Phakkawat Suwanmajo 4/4 * Note: 1. Mr. Damri Tunshevavong was appointed a Director to replace Mr. Anthony Farquhar McDonald who resigned from his position as Director effective 28 February 2012. 2. Mrs. Kaewkao Phaoenchoke resigned from member of the risk management committee, effective 12 November 2012 Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

1.5 Company Administrators As at 31 December 2012 The Company’s Administrators as per the SEC definition were as follows: Name

Position

Dr. Pranee

Phaoenchoke

President

Mr. Sompong

Phaoenchoke

Managing Director

Mr. Somchai

Kirtitilaka

Deputy Managing Director

Mr. Wuttichai

Phaoenchoke

Assistant Managing Director, Research & Development line

Mr. Sakchai

Komgris

Assistant Managing Director, Administration line and Company Secretary

Mr. Chawan

Ngamwongsakollert

General Manager for Accounting and Finance

Mr. Lim Wee Ern

General Manager for export sale

Managing Director’s Powers and Duties 1. To control and oversee the pursuance of the Company’s business in general and to perform duties assigned by the Company’s Board of Directors or Executive Committee, ensuring that objectives are met. 2. To follow up and monitor the implementation of policies and working plans, ensuring that the administrative departments concerned duly perform the various tasks assigned them by the Company’s Board of Directors or Executive Committee, with the desired results. 3. To consider and, if appropriate, approve important and urgent transactions within the scope of his powers and duties and such monetary limits as the Company’s Board of Directors may establish, up to a maximum of Bt.200 million. 4. To control and oversee financial administration, including dealings with financial institutions, ensuring that it is in accordance with financial policies and as efficient as possible in accordance with assignments from the Company’s Board of Directors or Executive Committee. 5. To consider and, if appropriate, approve business transactions within the Company’s authorised areas of business. 6. To perform such other duties as may be assigned by the Company’s Board of Directors or Executive Committee. The scope of the powers and duties mentioned shall not extend to the authorisation of any transaction in which the Managing Director or an individual with a possible conflict of interest is an interested party or where there is a conflict of interest regarding the benefits of a related party transaction, or the acquisition or disposal of the listed Company’s assets, in accordance with the regulations of the Stock Exchange of Thailand.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

1.6 Business dealings or professional services between Independent Directors and the Company During the year 2012 no Independent Director had any business relations with or provided professional services to the Company, its subsidiaries or joint ventures or juristic persons with possible conflicts of interest for a value exceeding that stipulated in the SEC’s recent announcement regarding application for and granting of authorisation to offer new shares for sale.

2 No nat on o D re tor an A

n trator

The Company appointed a Nomination and Remuneration Committee on 13 August 2009, assigning additional powers and duties relating to nomination to the members of the existing Remuneration Committee (details of scope of powers and duties of the Committee can be seen under the heading Structure of Company Boards and Committees.) In the process for selecting individuals to be appointed as Directors includes, Independent Director and Company Administrators consideration of a number of characteristics including skills, experience and capability, especially in areas that are of the greatest benefit to the Company, and integrity. In fairness to shareholders Independent Directors must have qualities in accordance with the Company’s definition of Independent Director which in turn is in accordance with that of the SEC (details of the Company’s definition of Independent Director can be seen under the heading concerning criteria for selection of Independent Directors) each individual should be able to dedicate the necessary time to attending board meetings on a regular basis, and thus no individual should hold directorships of several listed companies at same time. Finally the individual must not possess any of the qualities or characteristics prohibited by the Listed Companies Act. The Company has extended the opportunity to shareholders to put forward suitable names to be considered for nomination as Directors of the Company in advance, in accordance with criteria laid down by the Company and published through the SET and the Company’s website, for the Nomination and Remuneration Committee to first consider the qualities of those put forward as possible Directors or Independent Directors of the Company, prior to submitting selected names to the Company’s Board of Directors, which in turn proposes appointments to the General Meeting of Shareholders. Approval is by simple majority of votes of those shareholders present or duly represented at the meeting and in possession of voting rights, as follows: 1. Each share confers the right to one vote. 2. Each shareholder who votes must use all his votes as per (1) above for a single individual or for a number of individuals together, but may not allocate votes individually. 3. The individuals receiving the highest number of votes will be selected in descending order for appointment as Directors of the Company depending on the number of Directors to be appointed on each occasion. In the event that two candidates receive the same number of votes and that appointing them both would lead to exceeding the required number of Directors, the Chairman of the meeting shall exercise a casting vote. Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

3 D re tor an A

n trator Re unerat on

3.1 Monetary remuneration (a) Board of Directors Total remuneration received by all ten Directors from the Company in their capacity as Directors by way of Directors’ stipends and meeting fees in 2012 a total of Bt.5,845,000 Details are as follows: Director’s Name 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Dr. Pranee Mr. Sompong Ms. Kaewjai Mr. Wuttichai Mr. Pricha Mr. Kavee Mr. Suvait Mr. Somkiat Mr. Damri Mr. Anthony

Phaoenchoke Phaoenchoke Phaoenchoke Phaoenchoke Attavipach Vasuvat Theeravachirakul Nimrawee Tunshevavong Farquhar McDonald Total

2012 (Baht)

2011 (Baht)

940,000 780,000 635,000 600,000 835,000 545,000 530,000 530,000 430,000 20,000 5,845,000

720,000 560,000 490,000 440,000 710,000 390,000 400,000 420,000 340,000 4,470,000

* Note: Mr. Damri Tunshevavong was appointed a Director to replace Mr. Anthony Farquhar McDonald who resigned from his position as Director effective 28 February 2012.

(b) Administrators (excluding Directors) 2012 Number of Total Amount (Baht) Number of persons persons 8/2 15,982,792 7 Salaries/1 Annual remuneration/1 8/2 5,413,405 7 Living Allowances 8/2 619,431 7 Company Secretary’s position allowance 1 84,000 1 Total

22,099,628

2011 Total Amount (Baht) 14,805,860 3,389,395 602,460 84,000 18,881,715

Notes: 1. The monthly and annual remuneration of the President and the Managing Director have been considered by the Nomination and Remuneration Committee and approved by the Company’s Board of Directors. 2. One Administrator starts his position on March 2012 and one administrator retired on October 2012

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

3.2 Non-monetary remuneration (a) Directors None (b) Administrators Company car Dividend Policy of Company and Subsidiaries (a) Payment of dividends by the Company to Shareholders TRU’s dividend policy is to pay a dividend each year of approximately 40% of its consolidated net earnings of the previous year, subject to TRU and its affiliates’ cash flow and investment plans, and other future considerations as to necessity and appropriateness (b) Payment of dividends by Subsidiaries to the Company Subsidiary companies Thai Rung Tools and Dies Co., Ltd. Thai V.P. Auto Service Co., Ltd. Thai Auto Pressparts Co., Ltd. and Thai Ultimate Car Co., Ltd. consider their policy year by year in light of their investment requirements and other circumstances as appropriate. Auditors’ Remuneration a) Audit fees Audit fees paid to ANS Audit Co., Ltd. by the Company and its subsidiaries in 2012 were as follows, with comparative figures for 2011 Baht Company Thai Rung Union Car Plc. Thai V.P. Auto Service Co., Ltd. Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts Co., Ltd. Thai Ultimate Car Co., Ltd. Total

2012

2011

592,800 235,000 205,200 270,000 361,000 1,664,000

570,000 230,000 200,000 250,000 350,000 1,600,000

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

b) Non-audit fees Non-audit fees paid to ANS Audit Co., Ltd. by the Company and its subsidiaries in 2012 were as follows, with comparative figures for 2011. Baht Item Payer 2012 2011 Other service charges* Other service charges* Special service fees in accordance with BOI instructions Total

Company Subsidiaries Thai Auto Pressparts Co., Ltd.

76,516 118,100 41,600

67,560 61,710 40,000

236,216

169,270

Notes: Other service charges such as travelling, accommodation, telephone and photocopying expenses, cost of binding for Financial Statements, files, etc., invoiced as incurred.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Related Party Transactions

1 Relate Part Tran a t on t ent t e a n a po

le on l t o ntere t

Transactions during the past year with parties having possible conflicts of interest Related company Main type of Business

Thai Rung Group Counterparty

Isuzu Isuzu dealer Sale of Chaicharoenkij spare parts After-sales Motor Co., Ltd. service

TRU, TVS, TUC TVS TVS

Chaicharoenkij Motors Co., Ltd. Firstpart Co., Ltd. Sale of spare parts & accessories, Auto repair & maintenance V.P. Auto Ford dealer Enterprise Sale of spare parts Co., Ltd. After sales service

TUC TVS

TVS, TUC TVS TUC TVS, TUC

VPK Auto Co., Ltd. Thai V.P. Corporation Co., Ltd.

Ford dealer Sale of spare parts After sales service Vehicle rental

TRU TRU TRU, TRT, TAP, TVS TVS TUC TRU, TVS, TUC

Phothiphoom Co., Ltd. Lexus Auto City Co., Ltd.

Real estate

TUC

Lexus dealer

TUC TVS TRU

Note: Thai Rung Tools and Dies Co., Ltd. TRT Thai Auto Pressparts Co., Ltd. TAP

Related Party Transactions 2012 (Baht millions)

Balance sheet item (Baht millions)

Purchase of spares,vehicle repairs Sale of spare parts Public utlity charge and administration fee Cost of leasing land

1.16 Trade debtors 0.56 other debtors 1.91 Trade creditors Other creditors 0.28

Purchase of spares, vehicle repairs

0.03

Purchase of spares and payment for service Sale of spare parts Income from rental of land and showroom Income from utility charges and administartion fees Cost of leasing land Public utlity charge and administration fee Vehicle rental Sale of spare parts Income from rental of land and showroom Income from utility charges and administartion fees Cost of leasing land

1.64 Trade debtors

Income from lease of land and showroom Income from utility charges and administartion fees Repair vehicle

0.98 0.62 0.05 0.30

0.06

0.01 Trade creditors 0.73 0.60 Other creditors 0.52 0.20 Trade creditors 0.03

0.01

3.46 Trade debtors 0.04 Other debtors 1.78 Trade creditors Other creditors 0.74

0.01 0.17 0.07 2.53

1.20 other creditors

0.10

1.89 Trade debtors 0.16 Other creditors 0.08 0.01 0.14

Thai V.P. Auto Service Co., Ltd. TVS Thai Ultimate Car Co., Ltd. TUC Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Nature of relationships 1. TRT, TVS and TAP are subsidiaries of TRU, in which the Phaoenchoke group hold directorships and are the major shareholders. 2. TUC is a subsidiary of TVS, which holds 99.53% of the shares, the Phaoenchoke group holding the remaining 0.47%. 3. The above listed companies having possible conflicts of interest are related companies in which members of the Phaoenchoke group are both directors and major shareholders as follows: Related Companies

Shares held by

Phaoenchoke ICCK group

Directorship in Related Companies

TVP

Others

Dr. Pranee Mr.Sompong Ms.Kaewjai Mr.Wuttichai

Isuzu Chaicharoenkij Motors Co., Ltd.

100.00%

D,MD

Chaicharoenkij Motors Co., Ltd.

100.00%

D,MD

Firstpart Co., Ltd.

100.00%

D,MD

V.P. Auto Enterprise Co., Ltd.

0.20%

99.80%

D,MD

VPK Auto Co., Ltd.

0.00%

82.00% 18.00%

D,MD

Thai V.P. Corporation Ltd.

100.00%

D,MD

Phothiphoom Co., Ltd.

100.00%

D,MD

90.00%

10.00%

Lexus Auto City Co., Ltd.

Note: 1. “Phaoenchoke group” consist of Dr. Pranee Phaoenchoke, Mr. Sompong Phaoenchoke, Ms. Kaewjai Phaoenchoke and Mr. Wuttichai Phaoenchoke 2. ICCK = Izusu Chaicharoenkij Motor Co., Ltd., TVP = Thai V.P. Corporation Ltd. 3. C = Chairman of the Board D = Director MD = Managing Director or CEO

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

2 Ne e t an Propr et o Relate Part Tran a t on 1. Buying and selling accessories and spare parts and providing and receiving vehicle repair services are all normal business transactions of the Company, performed at cost plus a profit margin. 2. The leasing of land and office and showroom space together with utilities is at prices stipulated in mutual contracts, which are in line with actual or estimated market prices. 3. Vehicles rented from a related company are for use in the business. Rates and terms are similar to those applied to unrelated parties. The above Related Party Transactions were considered with regard to their necessity, appropriateness and overall benefit to the Company and its shareholders. Most of them were normal business transactions or were in support of such normal business transactions, and they were conducted on normal commercial terms, without giving rise to any profit diversion, and were conducted at arm’s-length prices and on similar terms to those applied to non-related parties. The non-executive Directors’ opinion does not differ in any respect from the relevant resolutions of the Board of Directors.

3 Pol

an approa

t re ar to uture Relate Part Tran a t on

As regards any future Related Party Transactions the Company will act in accordance with all relevant laws, and with all relevant orders, proclamations and regulations of the Stock Exchange of Thailand, including regulations regarding the disclosure of information on Related Party Transactions and on the acquisition or disposal of significant assets by the Company or its subsidiaries. The Company’s Board of Directors has established guidelines for the consideration of related party transactions and of acquisitions and disposals of Company assets as follows In the event that, the size of the transaction having been calculated in accordance with Stock Exchange of Thailand criteria it transpires that the transaction requires approval by the Company’s Board of Directors, then the transaction must be submitted to the Board of Directors for their consideration. In the event that the Audit Committee disagrees, the proposal can nevertheless be placed before the Board and an appropriate record made in the minutes. In the event that, the size of the transaction having been calculated in accordance with Stock Exchange of Thailand criteria, it transpires that the transaction requires approval by a meeting of shareholders, then the transaction must first be submitted to the Audit Committee for consideration and, if approved, onward submission to the Board of Directors who in turn will, if approved, propose it to a meeting of shareholders

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Corporate Governance

Principles of corporate governance are guidelines for doing business and administering organisations, which are becoming more and more widely known and accepted. In accordance with these principles the Board of Directors has a very important role to play in running the organisation, by focusing on responsibilities towards all parties with which it has dealings, both inside and outside the organisation, and by emphasizing the importance of ethical dealings, transparency, efficiency, adequate disclosure of information that can be examined, the protection of shareholders’ rights and attention to their remuneration, and responsibilities towards society and the nation. The Company is very well aware of the importance of these guidelines and adheres to them strictly, so as to inspire confidence in shareholders and everyone with whom it has dealings and to form a solid base for the growth of the business. The Company is committed to applying the principles of corporate governance on an ongoing basis to the running of the Company’s business. Thanks to which the Company was assessed as ‘Excellent’ for the fifth year running in the joint SEC-TIA (Thai Investors Association) ‘AGM check-list’ and as ‘Very Good’ for the fourth year in a row by the Thai Institute of Directors’ ‘Corporate Governance Report of Thai Listed Companies 2012.’ The Company’s policy is to continue improving the standard of corporate governance.

1. Shareholders’ Rights The policy laid down by the Company’s Board of Directors is to look after shareholders’ basic rights. The Board considers the equitable safeguarding of the interests of all groups of shareholders to be an important duty and responsibility, in order to ensure that shareholders are treated fairly and that they have confidence in how business is conducted by the Company and its Directors. 1. The Company’s Board of Directors has established a corporate governance policy in writing, which must be strictly adhered to, as follows. (1) Rights and equitable treatment of Shareholders and other Stakeholders The Company deals fairly and impartially with shareholders and other stakeholders such as employees and contractors, trading partners, the public, competitors, and creditors. The Company endeavours to arrange shareholders’ meetings at the most convenient times possible for shareholders and to give shareholders equal opportunities to voice their opinions and ask questions. (2) Board of Directors - structure, role, duties and responsibilities, independence The Board of Directors should play a leading role, have vision, and be independent in its decision making, for the overall maximum benefit of the Company and its shareholders. The Board of Directors, management and shareholders should consider prudently how best to solve problems arising through any conflict of interest, with sincerity and integrity, rationally and independently within the framework of best ethical practice.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

At least one third of the total number of Directors, but in any case not less than three, shall be Independent Directors. The Board of Directors and the management team have agreed a system for the clear sharing of function, duties and responsibilities, and the Board has established a number of committees to help it study and scrutinise work in light of policies and to provide clear monitoring and follow-up. Committees currently include the Executive Committee, the Audit Committee, the Risk Management Committee and the Nomination and Remuneration Committee. The Board may consider setting up further committees as and when appropriate. Directors are expected to attend all Board meetings. Each year the Company fixes such meeting in advance, at least one every three months, with additional, special meetings being called as and when necessary. The Company discloses the number of meetings attended by each Director in its Annual Report. (3) Disclosure and Transparency The Board shall perform its duties with transparency, such that its actions can be examined, and shall disclose of correct and complete information, in a timely manner, to all interested parties. The Company has appointed the persons to be responsible for communicating with shareholders, institutional investors, stock analysts, and relevant government departments. The Company has established a Nomination and Remuneration Committee whose duty is to seek out people with appropriate qualities to occupy the position of Director, Chairman of the Executive Committee and Managing Director in the event of a vacancy and to establish Directors’ remuneration fairly and reasonably. The establishment of Directors’ remuneration is subject to approval by a general meeting of shareholders, and is published in the Company’s Annual Report. (4) Control and Management of Risk The Company attaches importance to the implementation of internal controls and audits, and has accordingly established an internal audit department to ensure that basic working practices and important financial transactions are conducted in accordance with established guidelines and in an efficient manner, reporting direct to the Audit Committee. (5) Business Ethics The Company has issued to all Directors, administrators, managers and employees a written code of ethics to which they must adhere in performing their duties. 2. The Company’s Board of Directors has determined that an Annual General Meeting of Shareholders be held each year within four months of the close of business of the previous accounting year, and that the Company inform time, place and agenda of the meeting and provide relevant information and give Directors’ opinion as regards each agenda item in the letter of invitation to the shareholders’ meeting, which shall be in both Thai and English, and attach a form of proxy together with explanations as to registration for the meeting and granting of proxy are sent to shareholders at least fourteen days in advance and posted on the Company’s website beforehand, so as to give shareholders sufficient opportunity to study the information in advance of the meeting. Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

3. The Company’s Board of Directors has established criteria and procedures for extending the opportunity to minority shareholders to put forward names of suitable individuals to be considered for nomination as Directors of the Company and to propose agenda items for ordinary general meetings of shareholders in advance, in the period from October to December each year, in accordance with the criteria laid down by the Company and published through the SET Community Portal (SCP) and the Company’s website. In addition to this, the Company gives shareholders the opportunity of querying information relating to agenda items or of submitting questions to the Company in advance of the meeting by e-mail or fax, to promote shareholders’ opportunities to express their opinions to the Company. 4. The Company’s Board of Directors treats all its shareholders impartially, endeavours to arrange shareholders’ meetings at convenient and appropriate venues and opens for registration well before the meeting starts, while shareholders who are unable to attend in person can appoint another person as proxy and can also choose to appoint one of the Company’s independent directors to act as proxy. Before the meeting starts, all rules and procedures governing the meeting are announced and clearly explained, including the method used to count shareholders’ votes on each agenda item. The Company hands out voting registration cards for each agenda item, while for any proposed appointment of Directors there is a card for each individual candidate, allowing shareholders to vote on each individual separately if they so wish. Throughout the meeting shareholders are welcome to express their opinions and to ask questions, all of which are answered. Complete and accurate minutes are taken of each meeting, which is also recorded on video, and are made available for shareholders’ inspection. 5. The Company’s Board of Directors attaches great importance to shareholders’ meetings, and all Directors endeavour to attend every such meeting, particularly the President of the Board of Directors and the Chairmen of the various committees, so as to facilitate questions and answers on matters relating to each one.

2. Equitable Treatment of Shareholders The policy of the Company’s Board of Directors is to treat all shareholders equally and fairly so as to safeguard their basic rights. 1. The Company’s Board of Directors accommodates shareholders who are unable to attend meetings in person, enabling them to vote by proxy. The Company also makes available the name of at least one independent Director whom shareholders have the option of appointing as their proxy, and provides as part of the letter of invitation to the meeting, information on each one, comprising name, age, address, positions held, academic record, work experience, shareholding in the Company and whether the Director is an interested party with regard to any particular agenda items. The Company makes available a form of proxy which enables shareholders to give instructions on how votes are to be cast on each item; however shareholders are free to use any form that complies with the criteria published by the Department of Business Development of the Ministry of Commerce.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

2. The Company’s Board of Directors arranges for voting registration cards to be handed out for each agenda item, while for any proposed appointment of Directors there is a card for each individual candidate, allowing shareholders to vote on each individual separately if they so wish, and facilitating transparency and ease of examination in the event of any subsequent dispute. Information on individuals to be proposed for appointment as Directors is disclosed in the letter of invitation to the shareholders’ meeting, the information comprising name, photograph, age, academic record and Directors’ training courses, work experience and shareholding in the Company, for shareholders to study before reaching a decision. 3. In meetings of the Board of Directors or of shareholders, any Director, Administrator or shareholder who is an interested party in any agenda item must disclose to the meeting information on his or her own interest and those of related parties, and will not be entitled to vote on that particular agenda item, so that the meeting can consider transactions that might involve conflicts of interest and reach decisions in the overall best interests of the Company. 4. A shareholder who is also an Administrator may not raise any additional agenda item at a meeting of shareholders unless such item has been communicated in advance, even if the item is not so important as to require shareholders to spend time studying it before reaching a decision. 5. The Company’s Board of Directors attaches great importance to the safekeeping and protection of confidential internal information and has therefore established written guidelines for guarding against the use of internal information for personal benefit. For details please refer to Control of Internal Information. 6. The Board of Directors has resolved that Directors and Administrators who are obliged by law to report their shareholdings must submit these reports to the Company’s Board of Directors each time. The Board of Directors has further determined that shareholdings of Directors and Administrators be reported every quarter to the Board.

3. Stakeholders The Company attaches importance to dealing with all its stakeholders, including shareholders, customers, trading partners and creditors, competitors, employees, the environment, the community and society with sincerity, honesty and impartiality. 1. The Company’s Board of Directors has produced and issued to all Directors, Administrators and employees a written Code of Ethics or Statement of Business Conduct to which they must adhere in performing their duties in accordance with the Company’s mission, as follows. Shareholders The Company attaches great importance to its shareholders and other stakeholders, and carries on its business with sincerity, integrity and fairness, treating all parties concerned equitably, for the greater benefit of all concerned.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Employees The Company is confident that its employees constitute the organisationâ&#x20AC;&#x2122;s most valuable resource, and is therefore determined to recruit and look after good people with know-how, capability and integrity, and also focuses on developing individualsâ&#x20AC;&#x2122; potential to help employees advance, while providing them with appropriate and fair remuneration and various welfare benefits aimed at promoting a cooperative work atmosphere in which initiative and creativity can thrive to the benefit of the organisation. Customers The Company is devoted to and responsible to its customers, supplying them with quality standard goods, and respecting their confidentiality. Trading Partners The Company can demonstrate that its procurement practices are in accordance with commercial conditions and that its financial borrowings, repayments and guarantee transactions are all in accordance with terms and conditions agreed with creditors. Competitors The Company operates within a framework of fair competition, adhering to best practice principles and avoiding any unethical practices aimed at harming competitors. Community and Society The Company cares about the environment, and takes steps to reduce and avoid creating pollution in its production processes that could affect the environment or the community, promotes community relations activities, helps society consistently to the best of its ability, and is always ready to listen to warnings or suggestions from the community so as to be more environmentally friendly, to improve the state of the environment and make it more liveable. 2. The Company attaches importance to playing a useful role as regards the community, society and religion, for example through financial or material donations in support of various charitable organisations, granting scholarships every year to children of the Companyâ&#x20AC;&#x2122;s employees and pupils of schools located near the Company, supporting the Buddhist religious clubs in the Company, arranging important religious activities in the Company on an ongoing basis throughout the year. 3. The Company pays close attention to the health and safety of all its employees concerning its policies on safety and health at work and the work environment, for all employees to cooperate in strict observance. 4. The Company attaches great importance to its employees, who constitute one of its most important resources. It has a policy of looking after its employees consistently, and has arranged to provide various appropriate welfare benefits such as buses to transport workers to and from the factory, a canteen, uniforms, accident insurance, annual health checks, a clinic and a library. 5. The Company has made arrangements for channels of communication to enable it to receive opinions and suggestions from all stakeholder groups, with a view to improving and developing its products, services and organisation, making it stable, able to compete successfully in the on term. One example is the employee Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

suggestion scheme, in which each employee has a target of six suggestions per year, and suggestions go straight from the suggestion box to the Managing Director. Another is the facility for customers, shareholders, or the general public to submit suggestions and recommendations through the Company’s website.

4. Disclosure and Transparency The Company’s policy as established by the Board of Directors is one of transparency and of complete and timely disclosure to all interested parties of correct, readily accessible, consistent, reliable and checkable information, whether financial or non-financial. 1. The Company has set up a ‘Share Register and Investor Relations Department’ within the Office of the Managing Director, whose duty it is to disclose correct, complete, transparent information, whether financial or of a general nature, as well as being responsible for communicating with outside parties such as shareholders, institutional and other investors, analysts and relevant government departments in a fair and equitable manner. Investors can request further information about the Company by contacting: Share Register & Investor Relations Department, Office of the Managing Director Tel: 0-2420-0076 ext. 321 or 359, Fax: 0-2812-0844 e-mail: naiyana@thairung.co.th or omd_ir@thairung.co.th or by visiting the Company’s website: http://www.thairung.co.th 2. The Company has disclosed information in accordance with the criteria established using the Stock Exchange of Thailand’s SET Community Portal (SCP) system by way of Form 56-1 for the disclosure of annual information, as well as submitting its Annual Report and disclosing important information in both Thai and English on the Company’s website. 3. The Board of Directors has disclosed the roles and duties of the Board and of the various Committees and the number of times each board and committee met during the year and individual attendance records in Form 56-1 for annual information and in the Company’s Annual Report. (For details please refer to Structure of Company’s Board of Directors and Number of Board Meetings held and individual Directors’ attendance record) 4. In accordance with Section 89/14 of the Securities and Exchange Act and SEC Announcement Thor Jor 2/2009 which came into force on 1 July 2009, the Company requires its Directors and senior executives to report to the Company any interests of their own or of related persons that relate to their administration or management of the business of the Company or its subsidiaries in every times that have changed information and at least once a year, on 1st July of every year, so that the Company shall have the necessary information for proceeding in accordance with rules regarding related party transactions where conflicts of interest might arise to the detriment of the Company and its subsidiaries.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

5. Responsibilities of the Board of Directors The Company’s Board of Directors is well aware of the important role it plays in controlling and monitoring business for the greatest possible good of the Company, and of its answerability to shareholders for the consequences of its actions in carrying out its duties. It operates independently from management. Details are as follows. 1. Structure of Company’s Board of Directors 1.1 The Board of Directors of the Company consists of nine persons, at least one third of whom must be independent directors. At present the Company has five independent directors. The characteristics of independent directors are as defined by the Company. (details as per heading re criteria for appointment of Independent Directors) 1.2 The Chairman is not the same person as the Managing Director, and the Board of Directors of the Company has clearly defined the Managing Director’s powers and duties so that no single person has unlimited power. (For details please see re Company Administrators) This arrangement makes for better checks and balances and control. 1.3 The Company’s Board of Directors appointed a Company Secretary on 15 May 2008 to perform the duties of setting up and maintaining a register of Directors, arranging letters calling Board meetings, minutes of Board meetings, letters of invitation to and minutes of shareholders’ meetings and to keep records of Directors’/ Administrators’ interests and perform such other duties as may be established by securities legislation. 1.4 The Board of Directors of the Company has not so far established on how many company boards each director can sit, nor has it established clear policies or guidelines on the question of seats on boards of other companies being occupied by the Managing Director and senior Administrators of the Company. The Company’s Board of Directors will consider these matters in due course. 2. Other Boards and Committees 2.1 The Board of Directors has established four other boards and committees: the Audit Committee, the Executive Committee, the Risk Management Committee and the Nomination and Remuneration Committee in order to help study details and scrutinise work as necessary according to the situation, to lighten the workload of the Board of Directors, to provide clear arrangements for the consideration of each particular type of subject, and to accord with good corporate governance practices. (For names of members, powers and duties and other information on each board and committee please refer to headings re structure of the Company’s Board of Directors and list of names of Company Directors) The Company does not have a nomination committee but it does have a process for the selection of directors and administrators in accordance with established methods and criteria. (For details please see Nomination of Directors and Administrators.) 2.2 The Chairman of the Board of Directors of the Company cannot be a chairman or member of any other board or committee. The majority of members of other boards and committees are independent directors, including the chairmen of the Audit Committee and of the Nomination and Remuneration Committee, so as to ensure transparency and independence in carrying out their duties. Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

3. Role, Duties and Responsibilities of the Board of Directors 3.1 The Board of Directors plays a part in establishing the Company’s vision, mission and business strategies and also in ensuring independently that administrative departments proceed in accordance with work plans efficiently and effectively for the overall benefit of the Company and its shareholders. In addition the Board establishes internal control systems and an effective internal audit, and constantly monitors them though meetings of the Audit Committee. 3.2 The Board of Directors has established written corporate governance policies and a Code of Ethics or Statement of Business Conduct (see details as per the section headed Corporate Governance, paragraph 1, shareholders’ rights), and it reviews these policies and monitors compliance with them consistently. 3.3 The Company’s Board of Directors has established guidelines for the careful consideration of transactions involving possible conflicts of interest for the Company and its shareholders, whereby anyone having an interest in any agenda item must disclose such interest to the meeting, and foregoes the right to take part in taking a decision on that item. The Company’s Board of Directors has established guidelines for the consideration of related party transactions and of acquisitions and disposals of Company assets, details as per the Policy and approach with regard to future related party transactions. 3.4 The Company’s Board of Directors attaches considerable importance to risk control and management systems, and has accordingly established a Risk Management Committee to establish duties and policies and a framework for managing the Company’s overall risk situation, covering the various risks that might affect the Company’s results and reputation, as well as establishing an internal audit department to ensure that basic working practices and important financial transactions are conducted in accordance with established guidelines and in an efficient manner. In order to make sure that the internal audit department can perform properly and independently, the Board has instructed it to report direct to the Audit Committee. (For details please refer to Internal Controls.) 4. Board Meetings 4.1 The Company’s Board of Directors establishes a schedule of Board meetings in advance for each year. Meetings take place at least once a quarter, with additional special meetings being held as and when necessary. The Company informs all Directors in advance of the schedule of meetings referred to above so as to enable them to plan their time and make themselves available for the meetings. Directors attach great importance to Board meetings and endeavour always to attend. Letters of invitation are sent at least seven days in advance clearly setting out the agenda. Each Director is free to suggest topics for the agenda, and to request additional information from the Managing Director or the Secretary to the Board of Directors. 4.2 At meetings of the Company’s Board of Directors, the President of the Board ensures that sufficient time is made available for Directors to discuss important problems thoroughly together, and the Managing Director always invites senior Administrators to attend Board meetings in order to provide additional detailed information to the extent that it is directly relevant to problems. One of the items on the agenda at all regular quarterly meetings of the Board is the following up of outstanding issues. Directors can express their opinions openly and freely. A written record is made of each meeting and, once the minutes have been approved by the Board, they are kept available for Directors and other concerned parties to examine. Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

5. Board Self-Assessment In 2008 the Company’s Board made a start with assessing its own overall performance, using the form provided by the Listed Companies Supervision Development Centre of the Stock Exchange of Thailand, to allow all members of the board to consider the board’s performance and solve any problems they may have, and arranged for the self-assessment to take place on a regular annual basis. The result of Board assessment in 2011 is at level “ Good” (Total score 3.37 out of 4 which increased 2% from 2010) 6. Remuneration The Company has established a Nomination and Remuneration Committee, which is chaired by an independent director and is charged with setting policies, methodology and criteria for establishing the remuneration of Directors, the President and the Managing Director fairly, transparently, in consonance with the Company’s results and each individual’s performance, in line with industry norms, and sufficient to reward directors having the desired characteristics. Directors’ remuneration is subject to approval by a meeting of shareholders of the Company and to disclosure in the Company’s Annual Report and in Form 56-1 as required by the SEC. (For details please refer to Directors’ and Administrators’ Remuneration.) 7. Development of Directors and Administrators 7.1 The Company’s Board of Directors facilitates and supports training and study for Directors and members of the Audit Committee by way of regular attendance of various courses run by the Institute of Directors (IOD). At present 78% of Directors have attended these courses. Details are as follows.

1. 2. 3. 4.

Name Mr. Sompong Phaoenchoke Ms. Kaewjai Phaoenchoke Mr. Somkiat Nimrawee Attavipach Mr. Pricha

5. Mr. Suvait 6. Mr. Kavee

7. Mr Damri

Course Director Certification Program 26/2003 Director Certification Program 29/2003 Director Accreditation Program 10/2004 Director Certification Program 39/2004 Finance for Non-Finance Directors 8/2004 Theeravachirakul Director Certification Program 9/2001 Audit Committee Program 15/2006 Vasuvat Director Forum Program 1/2000 Director Accreditation Program 23/2004 Director Certification Program 58/2005 Finance for Non-Finance Directors 18/2005 Audit Committee Program 10/2005 Tunshevavong Director Certification Program 106/2008 Audit Committee Program 24/2008 Role of the Chairman Program 22/2009 Role of Compensation Committee 10/2010

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

7.2 The Company introduced new Directors to the nature of its business and guidelines for conducting its affairs. 7.3 With regard to the preparation of a plan for developing and testing the work of the Managing Director and top level Administrators, no action has yet been taken, however the Nomination and Remuneration Committee will consider this matter on due course.

Control o nternal n or at on The Company is acutely aware of the importance of safeguarding the confidentiality of internal information and therefore has strict policies guarding against the use by Directors and employees of internal information for their personal benefit. Important internal information is revealed only to individuals directly concerned, such as auditors or legal counsel. The Company releases information to shareholders only as and when appropriate. The Board of Directors has resolved that Directors and Administrators of the Company and the Manager of Accounting & Finance Department, together with their spouses, parents, children and siblings, must refrain from buying or selling securities from at least five working days before the Company discloses its financial statements to the stock exchange. The Company has also informed them of their obligation to report their shareholdings in the Company and those of their spouses and of any children who are still minors, including the reporting of any changes in their shareholdings to the SEC and the SET in accordance with article 59, subject to penalties for non-compliance as per article 275 of the Securities and Stock Exchange Act 1992, and has assigned the Share Register and Investor Relations Department to inform them in advance of the periods during which they should refrain from trading in securities each quarter. The Company has set out the basic principles of control of internal information in the form of an article in the Companyâ&#x20AC;&#x2122;s code of business ethics, to ensure that all employees adhere to them. The Board of Directors has resolved that Directors and Administrators who are obliged by law to report their shareholdings must submit these reports to the Companyâ&#x20AC;&#x2122;s Board of Directors each time. The Board of Directors has further determined that shareholdings of Directors and Administrators be reported every quarter to the Board. Additionally, the Companyâ&#x20AC;&#x2122;s Board of Directors requires Directors and senior executives to submit a Form for Reporting Interests of Directors and Executives, reporting to the company any interests of their own or of related persons that relate to their administration or management of the business of the Company or its subsidiaries, pursuant to Section 89/14 of the Securities and Exchange Act of 2008 and SEC Announcement Thor Jor 2/2009. The report must be submitted whenever there is a change in circumstances and in any case annually as at 1 July to provide assurance that Directors and senior executives are performing their duties with due care and integrity (fiduciary duties) and taking decisions without being interested parties, whether directly or indirectly and discharging their duties in the best interests of the Company and its shareholders.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Internal Controls

From Board Meetings during 2012 which were attended by all members of the Audit Committee, the Companyâ&#x20AC;&#x2122;s Board of Directors and the Audit Committee are of the opinion that the Companyâ&#x20AC;&#x2122;s internal control systems are adequate and appropriate. The following is a summary.

Organizational Control and Environmental Measure The Company has clear business objectives with ongoing assessment of results, and has adapted its organisational structure to make it appropriate to current business conditions so as to support the administration department and enable it to work efficiently. Additionally, the Company has established a policy and working plan focused on product quality and price and fair service to customers. It has written procedures that serve as guidelines aimed at producing ordered work according to standards, and there are mechanisms for inspecting and monitoring working practices in the fields of finance and purchasing, administration generally, production and marketing in order to provide assurance that working practices are in accordance with established policies and that there are no practices likely to damage the Companyâ&#x20AC;&#x2122;s reputation or interests.

Risk Management Measure The Company attaches importance to managing risks that can affect its business, and has a Risk Committee to oversee and assess risk factors and possible sources of risk as well as analysing the consequences of such risks and alerting Administrators or operatives and together establishing measures and guidelines to protect against such risks, monitoring compliance with such measures so as to keep risks at acceptable levels.

Management Control Activities The Company has established the scope and powers and duties and monetary limits in writing for each level of the administrative departments. There is clear division and separation of duties, approvals, recording of transactions and safeguarding of assets. Business dealings with major shareholders, Directors, Administrators or related parties are duly authorised, being considered by Independent Directors who are not interested parties, and monitored for compliance with terms and conditions. Investments in subsidiaries or joint ventures are monitored and overseen on an ongoing basis. With regard to the operation of the various departments, audits by the internal audit department have found that operations in general are in accordance with the rules and working systems established, with no instances of illegal or irregular conduct being detected.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Information and Communication Measure For each regular Board meeting the Company prepares documentary information of various kinds to support the agenda items so as to enable the Directors to have sufficient information on which to base their decisions. Resolutions are summarised and adequately recorded in minutes which are available for inspection at all times. Recording of accounting entries is in accordance with generally accepted principles and supporting documentation is gathered together in categories and properly stored for the legally established periods. There is also a procedure for fully following up on improvements recommended by the Companyâ&#x20AC;&#x2122;s duly authorised auditors in their reports.

Monitoring System The Company arranges regular quarterly Board Meetings, with special ad hoc meetings of senior executives on an ongoing basis to consider and follow up on the work of the administration departments to ensure that it is in line with objectives or, if it is not, to establish corrective guidelines. As for internal control, a plan is established for the examination of working practices to ensure that they are consistently in accordance with the Companyâ&#x20AC;&#x2122;s rules and regulations and a report on any significant deficiencies is submitted to the Audit Committee and the Board of Directors at a meeting which is arranged to coincide with the quarterly Board meeting, for them to decide on any corrective and follow-up measures. Any event of misconduct or illegal act is reported immediately to the Board of Directors.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Corporate Governance Report on Audit Committee

In 2012, The Audit Committee which is composed of three non-executive Independent Directors carried out their duties in accordance with the Audit Committee Regulations and the guidelines of the SET in examining the efficiency and adequacy of the Company’s internal control systems, and made various recommendations to administrative departments with a view to maximising working efficiency and effectiveness. It also monitored compliance with principles of good corporate governance and risk management, so as to enhance the value of the organisation to its shareholders and other stakeholders. The main items can be summarised as follows: 1. Examination of the Company’s quarterly and annual financial statements for 2012 by seeking explanations from administrators concerning their accuracy and completeness and adequacy of information disclosed. The Audit Committee is of the opinion that the said financial statements are accurate in all material respects in accordance with generally accepted accounting principles. 2. Examination of the Company’s internal control systems in accordance with guidelines laid down by the SEC. The Audit Committee is of the opinion that the Company has adequate, appropriate and efficient mechanisms for supervising and controlling its work processes. 3. Monitoring compliance with securities legislation, stock exchange regulations and other legislation relevant to the Company’s business. The Audit Committee is of the opinion that the Company correctly and appropriately complies with the aforementioned laws and regulations. 4. Considering the organisational structure and manpower of the Internal Audit Department, which reports directly to the Audit Committee, giving its opinion on the mission, scope of duties, responsibilities, independence and reporting of the Internal Audit Department to the Audit Committee and approving the annual audit plan. 5. Meeting with the Company’s auditors, ANS Audit Co Ltd without the presence of company officers, to confer on major points relating to financial statements and ensure that the auditors’ accounting and financial reports are comprehensive and detailed. 6. Selection and establishment of Company’s external auditors for 2012. We proposed to the Board of Directors that ANS Audit Co., Ltd. be appointed as the Company’s auditors. The Audit Committee considered their work and independence, and the appropriateness of their remuneration, and found it appropriate that Mr Atipong Atipongsakul, CPA No. 3500 and/or Mr Prawit Viwanthananut, CPA No. 4917 and/or Mr Bunjong Pichayaprasat, CPA No. 7147 and/or Mr Vichai Ruchitanont, CPA No. 4054, and/or Mr. Satien Wongsanan, CPA No. 3495 all from ANS Audit Co., Ltd. be appointed and their remuneration established at Bt.0.57m for the year. (unchanged from last year)

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

7. During 2012 the Audit Committee met four times. The last 3 meetings, all members of the Audit Committee were present. At the first meeting, two of three were present, one being excused due to a business engagement. 8. In the course of the past year the Company carried out related party transactions or transactions likely to involve a conflict of interest as per the stipulations of the SET and the SEC. The Audit Committee is of the opinion that the aforementioned transactions were proper and appropriate and fully and accurately disclosed. In conclusion the Audit Committee generally carried out its duties in accordance with the Audit Committeeâ&#x20AC;&#x2122;s charter as approved by the Companyâ&#x20AC;&#x2122;s Board of Directors. The Audit Committee is of the opinion that the Company reports financial and business information accurately, that it has internal control systems and that it complies fully with the law concerning the disclosure of related party transactions and with rules for good corporate governance in a transparent and reliable manner.

Pricha Attavipach Chairman of the Audit Committee

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Nomination and Remuneration Committee’s Report

The Nomination and Remuneration Committee, composed of three non-executive independent Directors, is charged with selecting individuals with appropriate qualities for occupying the position of Company Director in a proper and transparent manner, including from among any names proposed by shareholders, for onward submission to the Company’s Board of Directors and in turn to the shareholders for their approval, and with selecting persons with characteristics appropriate to the position of President and Managing Director in the event of their being a vacancy, for nomination to the Board of Directors for their consideration, and to prepare a succession plan for senior executive positions. It is also responsible for the setting policies, methodology and criteria for establishing, and for considering and reviewing the establishment of remuneration of Directors, the President and the Managing Director fairly, transparently and in consonance with the Company’s results and each individual’s performance. It reports independently to the Board of Directors so as to ensure that remuneration is established in a way that is appropriate and fair to all interested parties whilst safeguarding shareholders’ interests, in accordance with the Company’s principles of good corporate governance. In 2012 the Nomination and Remuneration Committee met to consider the following matters 1. Establishment of remuneration for the year 2012 and monthly remuneration for 2013 for the President and the Managing Director 2. Establishment of remuneration for the year 2012 for individual Company Directors based on the performance of the Company and the duties and responsibilities and performance of each individual Director within an overall monetary limit to be approved by the shareholders. 3. Directors’ remuneration for 2013 for proposal to the Company’s Board of Directors and subsequently to the General Meeting of Shareholders for their approval, the Nomination and Remuneration Committee considering that the proposed remuneration was in line with the scope of duties and responsibilities of the Directors and with remuneration paid in comparable industries. 4. The appointment of a new Director to replace a Director resigning from his position and the appointment of Directors to replace those retiring by rotation, for submission to the Board of Directors and in turn to the general meeting of shareholders. In summary, the Nomination and Remuneration Committee fully discharged its duties as assigned by the Company’s Board of Directors. Shareholders may this rest assured that the nomination of Directors and the establishment of their remuneration was carried out in a proper, appropriate and transparent manner and in accordance with the Company’s principles of good corporate governance.

Pricha Attavipach Chairman of the Nomination and Remuneration Committee Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Board of Directors Responsibility for Financial Report

The Company’s Board of Directors is responsible for the consolidated financial statements of Thai Rung Union Car Public Co., Ltd. and its subsidiaries and for the financial information which appears in the Annual Report. The financial statements were prepared in accordance with generally accepted accounting standards, applying appropriate and consistent accounting policies and with careful, prudent consideration and best possible estimates, making adequate disclosure of information by way of notes to the financial statements. The Board of Directors has put in place and maintains effective internal control systems which provide reasonable assurance that the recording of transactions in the Company’s books is correct and complete, as well as adequately protecting the Company’s assets and ensuring that any weak points can be detected and any misconduct or significant abnormal occurrence thus prevented. The Company’s Board of Directors has appointed an Audit Committee consisting of non-executive directors, which is responsible for monitoring the quality of financial reports and internal control systems. The Audit Committee’s opinion on these matters appears in the Report of the Audit Committee. The Board considers that the Company’s internal control systems are at an appropriate level and provide sufficient assurance in terms of the reliability of the financial statements of the Company and its subsidiaries as at 31 December 2012

Dr. Pranee Phaoenchoke Chairman of the Board

Mr. Sompong Phaoenchoke Managing Director

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Management’s Discussion and Analysis

In 2012, the Thai automotive industry posted all-time record production of 2.4 million units, representing an increase of 68% relative to 2011 and putting Thailand in the world’s top ten automakers. Domestic sales, at 1.43 million units, showed an increase of 80%, largely thanks to the government’s economic stimulus package. Despite being faced in 2012 with an increase in the Thai minimum legal daily wage to Bt.300, fluctuating fuel prices, a strengthening Baht, a stagnant global economy and fierce competition both domestically and at ASEAN level, the Company was able not only to overcome all obstacles, thanks to the determined efforts of management and employees, who trust in the Company’s sound status based on many years of experience, but also to develop appropriate strategies for seeking opportunities for expansion. Thai Rung Union Car Plc. posted consolidated revenues of Bt.3,781 million for 2012, up by 67%, and net income attributable to owners of the parent company of Bt.556 million, up by 199% on 2011. Growth in the Company’s revenues outstripped that of the automotive industry as a whole, thanks to its adjusting its strategy to place more stress on OEM parts making and contract assembly and painting work, which together now account for about 85% of consolidated revenues, and also to its success in expanding the customer base to take in new segments such as industrial and construction equipment, agricultural machinery and premium motorcycles, which is a high added value niche market. The Company also opened up new markets for multi-purpose vehicles in various parts of the world. This business should grow in the future and help reduce the risk of over-concentration in OEM business.

nan al re ult Revenues In 2012 , total consolidated revenues for the year 2012 amounted to Bt.3,781 m, representing an increase of Bt.1,518 m or 67% on the previous year, as follows:

Revenues Revenue from vehicle assembly and other vehicle-related contract work Revenue from the production of vehicle manufacturing equipment Revenue from sales of vehicles and from service centres Total revenue from Sales & service Other Income Profit sharing from associated company Total Revenes Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

2012

2011

Increase (Decrease)

Million Bt % Million Bt % Million Bt % 2,100.68 56% 1,116.10 49% 1,280.34 118.56 3,499.58 202.72 78.54 3,780.84

984.58 88%

34% 763.67 34% 516.67 3% 175.01 8% (56.45) 93% 2,054.78 91% 1,444.80 5% 150.57 7% 52.15 2% 57.75 3% 20.79 100% ,263.10 100% 1,517.74

68% -32% 70% 35% 36% 67%

Share in profits from investments in associates Share in profits from investments in joint venture companies, at Bt.79m, was up by Bt.21m or 36% on 2011, reflecting the fact that the joint venturesâ&#x20AC;&#x2122; business - making equipment such as window regulators and car seats for automotive assemblers-saw growth in line with that of the sector as a whole.

Cost of sales; expenses Consolidated cost of sales and service for the year, at Bt.2,833m, was up by Bt.1,113m or 65% compared with the previous year, in line with higher sales and service revenues, particularly from contract assembly and other auto-related contract work and the production of vehicle manufacturing equipment. As a proportion of sales and service revenue for the year, the cost of sales and service was 81%, down by 3% on the previous year since costs grew by less than sales thanks to management and control of production costs and efficiency measures. At the same time, selling and administrative expenses for 2012 amounted to Bt.264m, down by Bt.12m or 4% on the previous year.

Net income The Company posted a net profit of Bt.556m for 2012, representing 16% of sales and service revenue and an increase of Bt.370m or 199% on the previous yearâ&#x20AC;&#x2122;s result, thanks to increased sales and service revenue and to costs and expenses being kept well under control through efficiency measures.

Anal

o Con ol ate Balan e eet as at 31 December 2012 compared with 31 December 2011

The financial position of the Company and its subsidiaries as at 31 December 2012 and 2011 is shown in the following table. Consolidated Balance Sheet Assets Total Current assets Investments in associates Investment property, net Property, plant & equipment, net Total Other non-current assets, net Total Assets Liabilities and Equity Current liabilities Non-current liabilities Total Liabilities

31 Dec. 2012 31 Dec. 2011 Change 1,770 1,083 687 245 220 24 243 247 (4) 1,428 1,307 121 176 147 29 3,862 3,004 858

THB millions % 63% 11% -2% 9% 20% 29%

725 47

308 54

418 (7)

136% -13%

773

362

410

113%

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Assets Equity Attributable to owners of the parent company Non-controlling inte rests Total Equity Total Liabilities and Equity

31 Dec. 2012 31 Dec. 2011 Change

2,995 95

2,562 80

433 15

17% 18%

3,089 3,862

2,642 3,004

447 858

17% 29%

Assets Total consolidated assets as at 31 December 2012 and 31 December 2011 stood at Bt.3,862m and Bt.3,004m respectively, representing an increase of Bt.858m or 29%, due mainly to increases in current assets, specifically trade receivables and inventories in line with higher sales volumes, and to a lesser extent to an increase in property, plant and equipment due to capital expenditure on a second plant in Rayong province and ongoing investment in machinery and equipment aimed at boosting production capacity and efficiency.

Liabilities Total consolidated liabilities as at 31 December 2012 and 31 December 2011 stood at Bt.773m and Bt.362m respectively, representing an increase of Bt.410m or 113%, due to an increase in trade payables in line with higher volumes of purchases of raw materials reflecting increased production volumes in line with growing sales. None of these trade payables were yet due as at reporting date. Apart from this, current income tax payable increase by Bt.46m compared with the previous year, the Company having applied all its available (maximum five-year) carry-forward tax losses during 2012. During the year a subsidiary was granted eight-year investment-promoting tax privileges.

Equity Consolidated equity as at 31 December 2012 and 31 December 2011 stood at Bt.3,089m and Bt.2,642m respectively, representing an increase of Bt.447m or 17% as a result of higher net profit. As at 31 December 2012 the Company thus had consolidated liabilities of Bt.773m and equity of Bt.3,089m, giving a net debt to equity ratio or gearing of 0.25:1, compared with 31 December 2011 when gearing stood at 0.14:1, the difference being 0.11 times, due to increased trade payables in line with higher production volumes.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Cash flow statement The Companyâ&#x20AC;&#x2122;s consolidated cash situation for the year ended 31 December 2012 showed a net increase of Bt.336m, with a year-end cash position of Bt.531.6m. Details are shown in the following tables. THB millions Net cash from operating activities 621 (159) Net cash used in investing activities Net cash used in financing activities (127) Net increase (decrease) in cash & cash equivalents in the period 336 Cash & cash equivalents at start of period 196 Cash & cash equivalents at end of period 532 Liquiity ratios Current ratio Cash ratio Account receivable turnover Average collection period for receivables Cash cycle

time time time day day

2012 2.44 1.20 5.55 65.79 37.21

2011 3.52 0.34 6.15 59.33 47.06

Net cash from operating activities increased thanks to improved profit. Net cash used in investing activities was Bt.159m as a result of Bt.228m of capital expenditure on expanding the second factory in Rayong province and buying machinery, net of Bt.23m proceeds from the sale of part of the Companyâ&#x20AC;&#x2122;s shareholding in a joint venture company and of Bt.35m in dividends received from joint venture and other associated companies. Net cash used in financing activities was mainly due to payment of a dividend of Bt.123m to shareholders.

Annual Report 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Auditor’s Report To the Board of Directors and Shareholders of Thai Rung Union Car Public Company Limited I have audited the accompanying consolidated and separate financial statements of Thai Rung Union Car Public Company Limited and its subsidiaries and of Thai Rung Union Car Public Company Limited, respectively, which comprise the consolidated and separate statements of financial position as at December 31, 2012, the consolidated and separate statements of comprehensive income, consolidated and separate statements of changes in shareholders’ equity and consolidated and separate statements of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion.

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Basis for Qualified Opinion The Companyâ&#x20AC;&#x2122;s consolidated financial statements as at December 31, 2012, and for the year then ended, included investments in three associated companies accounted for under the equity method amounting to Baht 244.89 million and shares of profit from these companies amounting to Baht 78.54 million (as discussed in Note 7 to the financial statements). These were recorded based on financial statements prepared by the management of such associated companies, which were not audited by their auditors. Opinion In my opinion, except for the effects on the financial statements of the matter as mentioned in the basis for qualified opinion paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of Thai Rung Union Car Public Company Limited and its subsidiaries and of Thai Rung Union Car Public Company Limited as at December 31, 2012, and their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards.

Sathien Vongsnan Certified Public Accountant Registration Number 3495 ANS Audit Company Limited Bangkok, February 22, 2013

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Statements of Financial Position Thai Rung Union Car Public Company Limited and its subsidiaries As at 31 December 2012 and 2011 Unit Baht Notes CURR NT ASS TS Cash and cash equivalents Trade and other receivables net Unbilled receivable Short term loans to related parties Inventories net Total current assets N N CURR NT ASS TS Investments in associated companies Investments in subsidiaries ther long term investment net Investment property net Property, plant and equipment net Intangible assets net Deferred tax assets ther non current assets net Total non current assets O

Consolidated financial statements 2012 2011

4, 5

195, 95,091 342,344,083 343, 8 ,2 0

7 8 9 10 11 12 13

The accompanying notes are an integral part of the financial statements. ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

531, 01,418 9 5, 98, 82 35,240,3 8 237,902,347 1,770,442,815

201,370,700 1,083,09 ,134

244,894,405

220,453,009

243,1 5, 34 1,427,722,752 2, 9 ,421 17,932,587 155,310,484 2,091,722,283 3,8 2,1 5,098

247,0 5,157 1,307,122,150 4,093,471 34,702,940 107,727,150 1,921,1 3,877 3,004,2 0,011

Separate financial statements 2012 2011

375, 5,108 721,798,980

108,473,151 234,93 ,180

180,000,000 100,915,8 7 1,378,379,955

355,500,000 99,490,1 8 798,399,499

114,100,000 412,880,000

121,550,000 412,880,000

750,591,344 2,120,110 8,894,349 144,5 8,094 1,433,153,897 2,811,533,852

715,914,173 3, 24,418 13,011,253 120,937,754 1,387,917,598 2,18 ,317,097

Statements of Financial Position Thai Rung Union Car Public Company Limited and its subsidiaries As at 31 December 2012 and 2011 Unit Baht Notes

Consolidated financial statements 2012 2011

Separate financial statements 2012 2011

O CURR NT LIABILITI S Trade and other payables 4, 15 Current portion of liabilities under finance leases Current income tax payable Total current liabilities N N CURR NT LIABILITI S Long term liabilities under finance leases Deferred tax liabilities 12 mployee benefit obligations 1 Total non current liabilities T TAL LIABILITI S S AR LD RS UIT Share capital Authori ed 524,99 ,497 ordinary shares, Baht 1 par value Issued and paid up 501,589,497 ordinary shares, Baht 1 per share Treasury shares 18 Additional paid in capital Premium on ordinary shares Retained earnings Appropriated Legal reserve the Company 19 Subsidiaries Treasury share reserve 19 Unappropriated Total shareholders equity of the Company Non controlling interests T TAL S AR LD RS UIT O O

77,039,222 2,501,047 45,783,285 725,323,554

305,390,255 2,402,250

2 , 34,340

27 ,8 2,313

307,792,505

45,783,285 72,417, 25

27 ,8 2,313

851,545 3,2 1, 83 43,233,95 47,347,184 772, 70,738

3,352,592 1,774,914 49,2 0,074 54,387,580 3 2,180,085

1,157,398 27,805,547 28,9 2,945 701,380,570

591,2 0 28,8 7,504 29,458,7 4 30 ,321,077

524,99 ,497

501,589,497 (47,950,454)

727,144,000

52,499, 49 1 ,793,902 47,950,454 1, 9 ,539,449 2,994,5 ,497 94,927,8 3 3,089,494,3 0 3,8 2,1 5,098

52,499, 49 1 ,793,902 47,950,454 1,2 3,840,81 2,5 1,8 7,8 4 80,212,0 2 2, 42,079,92 3,004,2 0,011

52,499, 49

47,950,454 828,920,13 2,110,153,282

47,950,454 598,7 2,874 1,879,99 ,020

2,110,153,282 2,811,533,852

1,879,99 ,020 2,18 ,317,097

The accompanying notes are an integral part of the financial statements. ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Statements of Comprehensive Income Thai Rung Union Car Public Company Limited and its subsidiaries For the years ended December 31 2012 and 2011

n Sales of goods Rendering of services Total revenues Cost Cost of sales Cost of rendering of services Total cost o p oi Dividend income ther income Selling expenses Adminstrative expenses Financing cost Share of profit from investments in associated companies o i o in o pn Income tax expenses oi o ther comprehensive income for the year o o p n i in o o oi i o quity holders of the Company

Notes 4, 24

4, 7, 8 7, 19 4, 1 4, 1 7 12, 21

eighted average number of ordinary shares (shares)

The accompanying notes are an integral part of the financial statements. ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

2,479,432, 41 1,020,143,939 3,499,57 ,580

1,49 ,253,530 558,522,955 2,054,77 ,485

1,323,171, 2 847,852,858 2,171,024,484

875,921,492 34 ,051,823 1,221,973,315

(2,1 7,254,122) ( 5,783,275) (2,833,037,397) ,539,183

(1,314,473,011) (405,734,132) (1,720,207,143) 334,5 9,342

202,720,9 1 ( 7,29 ,421) (19 ,977,701) (807,322) 78,543,329 82,722,029 (111,197,14 ) 571,524,883

150,571,825 (81,482,130) (194, 09,433) (238,211) 57,753,123 2 ,5 4,51 (75, 93,598) 190,870,918

(1,180,181,029) (450,895,144) (1, 31,07 ,173) 539,948,311 50,728,712 114,198, 0 (113, 29,172) (147,259,835) (710,411)

(737,725,7 4) (230,71 ,720) (9 8,442,484) 253,530,831 91,907,0 2 115,038,741 (10 ,341,092) (154, 75,39 ) (153,408)

443,27 ,2 5 (90,028,554) 353,247,711

199,30 ,738 (34,987,03 ) 1 4,319,702

571,524,883

190,870,918

353,247,711

1 4,319,702

555,789,082

18 ,218,794

353,247,711

1 4,319,702

15,735,801

4, 52,124

571,524,883

190,870,918

1.13

0.38

0.72

0.33

492,372,797

4, 1

Non controlling interests

nin p arnings per share Profit attributable to equity holders of the Company (Baht)

Unit Baht Consolidated financial statements Separate financial statements 2012 2011 2012 2011

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

501,589,497

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

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

Dividend paid by subsidiary

Dividend paid

Changes in equity for the year

Balance as at anuary 1, 2011

ffects of changes in accounting policies

Balance after restated as at December 31, 2010

501,589,497

Balance as at December 31, 2010

ffects of deferred tax accounting

501,589,497

(47,950,454)

727,144,000

on ordinary Treasury shares

paid up

share capital

Total comprehensive income for the year Balance as at December 31, 2012

Dividend paid

Dividend paid by subsidiary

Changes in equity for the year

Balance as at December 31, 2011

Notes

Premium

Issued and

Unit Baht Consolidated financial statements

52,499, 49

The Company

1 ,793,902

Subsidiaries

Statutory reserve

Appropriated

47,950,454

The Company

Treasury share reserve

Retained earnings

18 ,218,794 1,2 3,840,81

(123,092,449)

1,200,714,471

(25,425,031)

1,22 ,139,502

88, 23,53

1,137,515,9

555,789,082 1, 9 ,539,449

(123,090,449)

1,2 3,840,81

Unappropriated

18 ,218,794 2,5 1,8 7,8 4

(123,092,449)

2,498,741,519

(25,425,031)

2,524,1 ,550

88, 23,53

2,435,543,014

555,789,082 2,994,5 ,497

(123,090,449)

2,5 1,8 7,8 4

Total

4, 52,124 80,212,0 2

(2,400,000)

77,959,938

(892,42 )

78,852,3 4

3,348,920

75,503,444

15,735,801 94,927,8 3

(1,020,000)

80,212,0 2

interests

Non controlling

190,870,918 2, 42,079,92

(123,092,449)

(2,400,000)

2,57 ,701,457

(2 ,317,457)

2, 03,018,914

91,972,45

2,511,04 ,458

571,524,883 3,089,494,3 0

(123,090,449)

(1,020,000)

2, 42,079,92

equity

shareholder s

Total

Thai Rung Union Car Public Company Limited and its subsidiaries For the years ended December 31 2012 and 2011 quity attributable to equity holders of the Company

Statements of Changes in Shareholderâ&#x20AC;&#x2122;s Equity

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Notes

(47,950,454)

501,589,497

(47,950,454)

501,589,497

(47,950,454)

Treasury shares

501,589,497

Issued and paid up share capital

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

Balance as at December 31, 2010 ffects of deferred tax accounting Balance after restated as at December 31, 2010 ffects of changes in accounting policies Balance as at anuary 1, 2011 Changes in equity for the year Dividend paid Total comprehensive income for the year Balance as at December 31, 2011

Balance as at December 31, 2011 Changes in equity for the year Dividend paid Total comprehensive income for the year Balance as at December 31, 2012

727,144,000

52,499, 49

47,950,454

(123,092,449) 1 4,319,702 598,7 2,874

530, 21,374 41,259,194 571,880,5 8 (14,344,947) 557,535, 21

(123,090,449) 353,247,711 828,920,13

598,7 2,874

Unit Baht Separate financial statements Premium Retained earnings Appropriated on ordinary shares statutory reserve Treasury share reserve Unappropriated

(123,092,449) 1 4,319,702 1,879,99 ,020

1,811,854,520 41,259,194 1,853,113,714 (14,344,947) 1,838,7 8,7 7

(123,090,449) 353,247,711 2,110,153,282

1,879,99 ,020

Total shareholder s equity

Thai Rung Union Car Public Company Limited and its subsidiaries For the years ended December 31 2012 and 2011

Statements of Changes in Shareholderâ&#x20AC;&#x2122;s Equity (Continue)

Statements of Cash Flows Thai Rung Union Car Public Company Limited and its subsidiaries For the years ended December 31 2012 and 2011 Unit Baht Consolidated financial statements 2012 2011 Cash flows from operating activities Net profit before income tax expenses Ad ustments to reconcile net profit before tax to Net cash provided (used in) operating activities Allowance for diminution in value of inventories rite off inventories Share of profit from investments in associates (Reversal) allowance for devaluation of dies and deferred cost of dies Reversal allowance for devaluation of fixed assets Depreciation and amorti ation rite off investment property rite off fixed assets Amortisation of leasehold rights Provision for liabilities (Reversal) employee benefit expense ( ain) loss on sales of fixed assets ain on sales of investment Dividend income Interest income Interest expense Profit from operating activities before changes in operating assets and liabilities perating assets (increase) decrease Trade and other receivable net Inventories Unbilled receivables ther non current assets perating liabilities increase (decrease) Trade and other payables Cash flows from operating activities Cash paid for interest expense Cash received from income tax refund Cash paid for employee benefit Cash paid for corporate income tax Net cash flows from operating activities

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

82,722,029

278,20 (24,588,9 9) (78,543,329) (3,55 ,822) (9,317,7 ) 110, 94, 9 1,9 1,222 523,302 2,25 ,039 (5,101,5 8) 1,793,880 (3, 97,080)

2 ,5 4,51

12,944, 78

Separate financial statements 2012 2011 443,27 ,2 5

199,30 ,738

278,20 (5,278,20 )

3,120,000

(57,753,123) 7, 9 ,822 82,803,028

4,140,000 (9,317,7 ) 49,033,175

42,410,439

55,410 523,304 12,804,497 (1,321,312)

55,410

(3,899,551) 807,322

(5,719,834) 238,211

(798,457) 2,1 7, 39 (15, 00,300) (50,728,712) (10,892,283) 710,411

72,331,584

318,83 ,197

402,849,972

152,599,288

( 23,29 , 0 ) (12,220,884) 308,445,891 (3 ,749,55 )

7,297,448 (28,993,850) (127,050,112) (30,772,498)

(48 ,0 ,700) 3,574,300

4, 03,897 (1 ,578,010)

(28,254,585)

(14,888,787)

3 9,392,930 77,903,359 (807,322) 5,545,11 (924,550) ( 0,502,113) 21,214,490

(7 ,730,350) 122,58 ,835

349,772,02 241,875,013 (710,411) 4, 24,24 (2 3,500) (39,5 2,228) 205,9 3,120

73,52 ,241 259,2 2, 29 (371,345) 12, 15,25

15,852,408 (1,140,791) (19,815,34 ) 117,483,10

8,374,723 (5,390,521) (91,907,0 2) (7, 3,847) 153,408

(10,7 5,954) 2 0,740,58

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Statements of Cash Flows (Continue) Thai Rung Union Car Public Company Limited and its subsidiaries For the years ended December 31 2012 and 2011 Unit Baht Consolidated financial statements 2012 2011 Cash flows from investing activities Increase in short term loans to related parties Proceeds from short term loans to related parties Proceeds from sales of fixed assets Interest received Dividend from associated companies and subsidiary company Acquisition of fixed assets and intangible assets Cash received from sales investment from associated company Net cash flows from (used in) investing activities Cash flows from financing activities Increase in short term loans from related party Payment on short term loans from related party Finance lease liabilities payment Dividend paid Dividend paid by subsidiaries to non controlling interests Net cash flows used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

The accompanying notes are an integral part of the financial statements. ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

7,393, 25 3,841,558 34,748,712 (227,829, 59) 23,050,300 (158,795,4 4)

(10,000,000) 5 ,500,000 1,4 ,139 ,508, 58 54,307,0 2 (330,355,992) (221,574,133)

Separate financial statements 2012 2011 (447,000,000) 22,500,000 ,474,224 10,09 ,183 50,728,712 (81,530,133) 23,050,300 184,319,28 20,000,000 (20,000,000)

(2,402,250) (123,090,449) (1,020,000) (12 ,512, 99) 335,90 ,327 195, 95,091 531, 01,418

(1,709,520) (123,092,449) (2,400,000) (127,201,9 9) (231,292,99 ) 42 ,988,087 195, 95,091

(344,500,000) 77,500,000 5,540, 78 5,900, 38 91,907,0 2 (54,147,082) (217,798,704)

(123,090,449)

7,000,000 (53,000,000) (135,035) (123,092,449)

(123,090,449) 2 7,191,957 108,473,151 375, 5,108

(1 9,227,484) (12 ,285, 02) 234,758,753 108,473,151

Note to Consolidated Financial Statements Thai Rung Union Car Public Company Limited and its subsidiaries For the years ended December 31 2012 and 2011 1. GENERAL INFORMATION Thai Rung Union Car Public Company Limited (“The Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in car assembly and modification, and the manufacture and distribution of parts and mold. Its registered address is located at 28/6 Moo 1, Petchakasem Road, Khwaeng Nongkangploo, Khet Nongkaem, Bangkok. 2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The accompanying financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) in conformity with generally accepted accounting principles in Thailand. The presentation of the financial statements has been made in compliance with the stipulations of the Notification of the Department of Business Development dated September 28, 2011, issued under the Accounting Act B.E. 2543. The accompanying financial statements have been prepared in Thai language and expressed in Thai Baht. Such financial statements have been prepared for domestic reporting purposes. For the convenience of the readers not conversant with the Thai language, an English version of the financial statements has been provided by translating from the Thai version of the financial statements. The preparation of the financial statements in conformity with Thai Financial Reporting Standards (“TFRS”) requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying amounts of assets and liabilities that are not readily apparent from other sources. Subsequent actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, and in the period of the revision and future periods, if the revision affects both current and future periods Basis of consolidation The consolidated financial statements include the financial statements of Thai Rung Union Car Public Company Limited (“the Company”) and the following subsidiary companies (“the subsidiaries”):

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Company’s name

Nature of business

Subsidiaries directly held by the Company Thai V.P. Auto Service Co., Ltd. Sales of cars, spare parts and car service centers Thai Rung Tools and Dies Co., Ltd. Mold making service Thai Auto Pressparts Co., Ltd. Manufacture of vehicle’s body parts Subsidiaries held by Thai V.P. Auto Service Co., Ltd. Thai Ultimate Car Co. Ltd. Sales of cars, spare parts and accessories and car service centers

Incorporation

of shareholding 2012 2011 Percent Percent

Thailand

Thailand Thailand

94 91

Thailand

99.53

On February 15, 2011, Thai Ultimate Car Co., Ltd. (Subsidiary held by Thai V.P. Auto Service Co., Ltd.) had registered to engage more services operation which are the services in legal, accounting, commercial, industrial, and such services and others related to business and tax administration of large organization. All significant intercompany transactions and accounts were eliminated in preparing the consolidated financial statements. Subsidiary is an entity controlled by the Company. Control exists when the Company has the power, directly or indirectly through other subsidiaries, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of the subsidiary are included in the consolidated financial statements from the date that control commences until the date that control ceases. The preparations of the consolidated financial statements have been based on the same accounting policies for the same or similar accounting transactions or accounting events. The changes in accounting policies as at January 1, 2011 In the year 2011, the Company and its subsidiaries has adopted new and revised TFRS which such transition affected the financial statements reflected from the adoption of TAS 12 Income Taxes, TAS No. 16 (revised 2009) “Property, Plant and Equipment” and TAS No. 19 “Employee Benefits”. New and revised Thai Financial Reporting Standards not yet effective The Company and its subsidiaries have not yet adopted the new and revised Thai Financial Reporting Standards as follows:

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

a) Thai Accounting Standards (TAS), Thai Financial Reporting Standards (TFRS), Thai Interpretation (TI) and guidelines which are effective for the financial statements for the period beginning on or after January 1, 2013 as follows: TAS/TFRS/TI/FAP’s Announcement Topic TAS 20 (revised 2009) Accounting for Government Grants and Disclosures of Government Assistance TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rate TFRS 8 Operating Segments TI 10 Government Assistance – No Specific Relation to Operating Activities TI 21 Income Taxes – Recovery of Revalued Non-Depreciable Assets TI 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders No. 34/2555 Accounting Guidance for Transfer and Transferred of Financial Assets The management of the Company and its subsidiaries are assessing the impacts of these standards, interpretations and guideline on the financial statements for the period in which they are initially applied. b) Thai Financial Reporting Interpretations (TFRI) and TI which are effective for the financial statements for the period beginning on or after January 1, 2014 as follows: Topic TFRI/TI TFRI 4 Determining whether an Arrangement contains a Lease TFRI 12 Service Concession Arrangements TFRI 13 Customer Loyalty Programmes TI 29 Service Concession Arrangements: Disclosures The Company and its subsidiaries are assessing the impacts of these interpretations on the financial statements for the year in which they are initially applied. 3. SIGNIFICANT ACCOUNTING POLICIES 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 with an original maturity of three months or less and not subject to withdrawal restrictions. Bank overdrafts that are repayable on demand are a component of financing activities for the purpose of the statement of cash flows. Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful accounts.

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

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. 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 and is calculated using standard cost adjusted to approximate average cost. Finished goods and work in process are valued at the lower of standard cost (which approximates actual cost) and net realisable value. Standard cost includes all production costs and attributable factory overheads. Raw materials and parts are valued at the lower of standard cost (which approximates actual cost) and net realisable value and are charged to production costs and cost of services whenever consumed. Spare parts of car service centers are valued at the lower of cost (moving average method) and net realisable value. Cars purchased for sales are valued at the lower of cost (specific identification method) and net realisable value. Allowance for diminution in value of inventories is recorded by considering old, slow-moving and obsolete inventories. 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. Investments Investments in subsidiaries and associates Investments in subsidiaries and associates in the separate financial statements of the Company are accounted for using the cost method net of allowance for loss on diminution in value (if any). Investments in associates in the consolidated financial statements are accounted for using the equity method. Investment properties Investment properties are properties which are held to earn rental income, for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are stated at cost less accumulated depreciation and less allowance for impairment loss (if any).

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Depreciation Depreciation is computed by the straightâ&#x20AC;&#x201C;line method based on the useful lives of assets of 30 years Depreciation is included in determining operating result and no depreciation is provided on land and property in progress. Repairs and maintenance are charged to the statement of income during the financial years in which they are incurred. The cost of major renovations is included in the carrying amount of the asset when it is probable that future economic benefits in excess of the originally assessed standard of performance of the existing asset will flow to the Group. Major renovations are depreciated over the remaining useful life of the related asset. Reclassification to property, plant and equipment When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting. Property, plant and equipment Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses of assets (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. Cost also may include transfers from other comprehensive income of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and 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 in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings. Leased assets Leases in terms of which the Company and its subsidiaries substantially assume all the risk and rewards of ownership are classified as finance leases. Property, plant and equipment acquired by way of finance leases is capitalized at the lower of its fair value and the present value of the minimum lease payments at the inception of

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

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. inance charges are charged directly to the profit or loss. se e t sts 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 Company and its subsidiaries, 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 profit or loss as incurred. e e at epreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. epreciation is charged to profit or loss 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 epreciation method seful life (years) Land improvement traight-line method actory and building improvement traight-line method ffice buildings and building improvement traight-line method achinery, factory equipment and tools traight-line method (excluded molds and jigs) achinery, factory equipment and tools eclining method acquired before and molds and jigs ( ouble declining method) ffice equipment acquired before uly eclining method ( ouble declining method) ffice equipment traight-line method otor vehicles acquired before uly eclining method ( ouble declining method) otor vehicles traight-line method o depreciation is provided on land or assets under construction. epreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Land leasehold rights Land leasehold rights are stated at cost less accumulated amortization. mortization of land leasehold rights is

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

calculated by reference to their costs on a straight-line basis over the periods of lease agreements. mortization is included in determining income. ntangible assets esea

a d de e

xpenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred. evelopment activities involve a plan or design for the production of new or substantially improved products and processes. evelopment expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Company and its subsidiaries intend to and have sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour, overhead costs that are directly attributable to preparing the asset for its intended use, and capitalised borrowing costs. ther development expenditure is recognised in profit or loss as incurred. t e ta

e assets

ntangible assets that are acquired are stated at cost less accumulated amortisation and losses on decline in value. t at mortization is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangible assets, from the date that they are available for use. The estimated useful lives for the current and comparative periods are as follows mortization method seful life (years) oftware traight-line method mpairment The carrying amounts of the Companyâ&#x20AC;&#x2122;s and its subsidiariesâ&#x20AC;&#x2122; assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assetsâ&#x20AC;&#x2122; recoverable amounts are estimated. n impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. The impairment loss is recognised in profit or loss unless it reverses a previous revaluation credited to equity, in which case it is charged to equity. Trade and other accounts payable Trade and other accounts payable are stated at cost. ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

mployee benefits t te

e e ts

The Company and its subsidiaries recognize salaries, wages, bonus and social security contribution as expenses on an accrual basis. st e

e t e e ts de ed

The Company and its subsidiaries have established a provident fund that is a defined contribution plan. The assets of which are held in a separate trust fund. The provident fund is funded by the contribution from employees and the Group. Contributions to the provident fund are charged to the statement of income in the period to which they relate. st e

e t e e ts de ed e e t a

The employee benefits liabilities in relation to the severance payment under the labor law and is recognised as a charge to results of operations over the employeeâ&#x20AC;&#x2122;s service period. It is calculated by the estimation of the amount of future benefit to be earned by the employee in return for the service provided to the Group through the service period up to the retirement age and the amount is discounted to determine the present value. The reference discount rate is the yield rate of government bonds as at the reporting date. The calculation is based on the actuarial technique using the Projected nit Credit ethod. When the employee benefits are improved, the portion of the increased benefit relating to past service rendered by employee is recognized in the statement of income on a straight-line basis over the average period until the benefits become vested. When the actuarial assumptions are changed, the Company and its subsidiaries recognize actuarial gains or losses in the profit or loss in the period in which they arise. Provisions provision is recognised if, as a result of a past event, the Company and its subsidiaries have 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. The unwinding of the discount is recognised as finance cost. Treasury shares When share capital recognised as equity is repurchased, the amount of consideration paid, including directly attributable costs, is classified as treasury shares and recognised as a deduction from equity. n equal amount is appropriated from retained earnings and taken to a reserve for treasury shares within equity. When treasury shares are sold, the amount received is recognised as an increase in equity by crediting the cost of the treasury shares

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

sold, calculated using the weighted average method, to the treasury shares account and transferring the equivalent amount back from reserve for treasury shares to retained earnings. urpluses on the sale of treasury shares are taken directly to a separate category within equity, â&#x20AC;&#x2DC;Surplus on treasury sharesâ&#x20AC;&#x2122;. Net deficits on sale or cancellation of treasury shares are debited to retained earnings after setting off against any remaining balance of surplus on treasury shares. evenue evenue excludes value added taxes and is arrived at after deduction of trade discounts and volume rebates. ae

ds a d se

es e de ed

evenue is recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer. o 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. ervice revenue is recognised when services have been rendered taking into account the stage of completion. e ta

ental income from investment property is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income over the term of lease. Contingent rentals are recognised as income in the accounting period in which they are earned. de d

ividend income is recognised in the statement of income on the date the Company and its subsidiariesâ&#x20AC;&#x2122; right to receive payments is established. te est

nterest income is recognised in the statement of income as it accrues. ncome tax ncome tax expense for the year comprises current and deferred tax. Current and deferred tax are recognised in profit or loss. 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. eferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes.

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

eferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. n determining the amount of current and deferred tax, the Company and its subsidiaries take into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Company and its subsidiaries believe 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. ew information may become available that causes the Company and its subsidiaries to change their 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. eferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. eferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that the related tax benefit will be realised. arnings per share The Company and its subsidiaries presents basic and diluted earnings per share ( P ) data for its ordinary shares. asic P is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company and its subsidiaries by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. oreign currencies e

t a sa t s

Transactions in foreign currencies are translated to Thai aht at the foreign exchange rates ruling at the dates of the transactions. onetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai aht at the foreign exchange rates ruling at that date. oreign exchange differences arising on translation are recognised in profit or loss. on-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai aht using the foreign exchange rates ruling at the dates of the transactions. 4. RELATED PARTY TRANSACTIONS elated parties are those parties linked to the Company and its subsidiaries as shareholders or by common

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices. . ignificant transactions for the years ended ecember ,

and

with related parties were as follows

nit illion aht Consolidated eparate financial statements financial statements Transactions with subsidiaries Purchases of goods and services Purchases of fixed assets lectricity expense

Transportation expense anagement fee Commission and promotion expenses ales of goods ales of oil Land and office rental income anagement service income

ervice income tilities, transportation income and sales of supplies ividend income nterest income

Transactions with associated companies Purchases of goods and services Purchases of fixed assets ales of goods ervice income Consulting service income

Transfer pricing policy

Cost plus margin s agreement Cost and cost plus gross profit margin not more than s agreement without contract s agreement without contract Contract price Cost plus margin Cost plus margin Contract price s agreement without contract ( Contract price) - s agreement Cost plus margin s declared . - . p.a. ( . - .

actory rental income anagement service income

tilities, transportation income and sales of supplies

p.a.)

Cost plus margin - s agreement Cost plus margin - Cost plus margin s agreement without contract ( Contract price) Contract price s agreement without contract ( Contract price) Cost plus margin

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit illion aht Consolidated eparate financial statements financial statements -

ividend income Transactions with re ated companies Purchases of goods and services ehicles maintenance expense Land rental expense and amortisation of leasehold rights Car rental expense ales of goods Land and showroom rental income ervice income tilities, transportation income and sales of supplies nterest income

Transfer pricing policy

s declared -

Cost plus margin - Cost plus margin Contract price

Contract price Cost plus margin Contract price s agreement Cost plus margin

- .

p.a.

. ey management personnel compensation ey management personnel compensation for the years ended ecember , Consolidated financial statements hort-term benefits Post-employment benefits Total key management personnel compensation . s at ecember , are as follows

and

, , (, , ) , ,

, , , , , ,

and nit aht

consisted of eparate financial statements

, , (, , ) , ,

, , , , , ,

, the balances of the accounts between the Company and related companies

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit aht Consolidated financial statements Trade accounts recei ab e re ated parties ubsidiaries Thai ung Tools and ies Co., Ltd. Thai .P. uto ervice Co., Ltd. Thai uto Pressparts Co., Ltd. Thai ltimate Car Co., Ltd. ssociated companies elta-T Co., Ltd. elta-Thairung Co.,Ltd. Thai uto Conversion Co., Ltd. e ated companies suzu Chaicharoenkij otor Co., Ltd. suzu otor Co., Ltd. Thai .P. Corporation Co., Ltd. Center Car ent Co., Ltd. .P. uto nterprise Co., Ltd. Lexus uto City Co., Ltd. Total trade accounts receivable - related parties mounts due rom re ated parties ubsidiaries Thai ung Tools and ies Co., Ltd. Thai .P. uto ervice Co., Ltd. Thai uto Pressparts Co., Ltd. Thai ltimate Car Co., Ltd.

eparate financial statements

, , , , ,

, , , , , ,

, , , ,

, , , , ,

, , , , , ,

, , , , -

, , ,

, , , , , , , ,

, ,

, , , , , , , , ,

, , ,

, ,

, , , , ,

, , , , , , ,

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit aht Consolidated financial statements ssociated companies elta - T Co., Ltd. elta-Thairung Co.,Ltd. e ated companies suzu Chaicharoenkij otor Co., Ltd. Thai .P. Corporation Co., Ltd. Center Car ent Co., Ltd. Total amounts due from related parties

, , , , , , , , ,

Total short-term loans to related parties Trade accounts pa ab e re ated parties ubsidiaries Thai ung Tools and ies Co., Ltd. Thai uto Pressparts Co., Ltd. ssociated compan elta - T Co., Ltd. e ated companies suzu Chaicharoenkij otor Co., Ltd. Thai .P. Corporation Co., Ltd. Chaicharoenkij otor Co., Ltd. .P. uto nterprise Co., Ltd.

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

, ,

, , , , ,

, ,

, , , ,

, , , , ,

, ,

, , , , ,

, , , , , -

hort term oans to re ated parties ubsidiaries Thai ung Tools and ies Co., Ltd. Thai uto Pressparts Co., Ltd. Thai .P. uto ervice Co., Ltd.

eparate financial statements

, ,

, , , ,

nit aht Consolidated financial statements .P. . uto Co., Ltd. inthoranee Property Co., Ltd. Total trade accounts payable - related parties

, , ,

mounts due to re ated parties ubsidiaries Thai ung Tools and ies Co., Ltd. Thai ltimate Car Co., Ltd. Thai .P. uto ervice Co., Ltd. e ated companies suzu Chaicharoenkij otor Co., Ltd. Thai .P. Corporation Co., Ltd. inthoranee Co., Ltd. Chaicharoenkij otor Co., Ltd. .P. uto nterprise Co., Ltd. Phothiphumi Co. Ltd. .P. Capital sset Co.,Ltd Lexus uto City Co., Ltd. Total amounts due to related parties ccrued pro ect costs to re ated part ubsidiar Thai ung Tools and ies Co., Ltd. Total accrued project cost to related party

, , , ,

eparate financial statements , ,

, ,

, , , ,

, , , , , , , ,

, , , ,

, , ,

, , , , , ,

, , , ,

, , , , , ,

, , , , ,

, , , ,

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

uring the year of

, movements of short-term loans to and loans from related parties were as follows anuary ,

hort term oans to re ated parties eparate inancia statements ubsidiaries Thai ung Tools and ies Co., Ltd. Thai uto Pressparts Co., Ltd. Thai .P. uto ervice Co., Ltd. hort term oans rom re ated part eparate inancia statements ubsidiaries Thai .P. uto ervice Co., Ltd.

nit illion aht ecember , uring the year ncrease ecrease

nterest rate

( ) ( .) -

. - . p.a., at call . - . p.a., at call . p.a., at call

( )

p.a., at call

. Guarantee bligations with related parties s at ecember , and the Company has outstanding guarantee obligations with subsidiaries and associate as follows a) The Company has obligations of aht million and aht million in respect of its guarantee of credit facilities provided by a local bank and two local banks, respectively, to Thai .P. uto ervice Co., Ltd. (a subsidiary). b) The Company has obligations of aht million and aht million in respect of its guarantee of credit facilities provided by two local banks and three local banks, respectively, to Thai ung Tools and ies Co., Ltd. (a subsidiary). c) The Company has obligations of aht million and aht million in respect of its guarantee of credit facilities provided by a local bank and two local banks, respectively, to Thai uto Pressparts Co., Ltd. (a subsidiary). d) The Company has obligations of aht million in respect of its guarantee of credit facilities provide by a local bank to Thai ltimate Car Co., Ltd. (a subsidiary) together with personal guarantee by directors in . f) The Company has obligations of aht million, in respect of its guarantee of credit facilities provide by a local bank to elta Thairung Co., Ltd. (an associated). The Company has not charged a guarantee fee to its subsidiaries and associates.

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Trade and other receivables as at ecember ,

and

consisted of nit aht Consolidated financial statements

Trade accounts receivable unrelated parties Trade accounts receivable related parties Less llowance for doubtful accounts Total trade accounts receivable - net ther receivables mounts due to related parties nput tax refundable nput tax suspense Prepayment ccrued income ccrued interest income thers Total other receivables Trade and other receivables - net

eparate financial statements

, , , , ( , ) , ,

, , , , ,

, , , ,

, , , , , , , , , , , ,

The balances of trade accounts receivable as at ecember , summarised below.

, , , ,

, , , , -

, ,

, , -

, , , , , , , and

, , , ,

, , , , , , , , , , , ,

, , , , , , , , ,

, aged on the basis of due dates, are nit aht

Consolidated financial statements Trade accounts recei ab e unre ated parties e o recei ab es ot yet due Past due p to months - months - months ver months Total

eparate financial statements

, ,

, , , , , , , , ,

, , , , , , , ,

, , ,

, , , -

, ,

, , ,

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit aht Consolidated financial statements Less llowance for doubtful accounts Total trade accounts receivable - unrelated parties, net

( , ) , ,

, ,

, , , , , , , ,

Trade accounts recei ab e re ated parties e o recei ab es Trade accounts recei ab e subsidiaries ot yet due Past due p to months - months - months ver months Total trade accounts receivable - subsidiaries Trade accounts recei ab e associates ot yet due Past due p to months Total trade accounts receivable - associates Trade accounts recei ab e re ated companies ot yet due Past due p to months - months - months ver months Total trade accounts receivable related companies Total trade accounts receivable - related parties

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

eparate financial statements

, ,

, , ,

, ,

, , , ,

, , , , , ,

, ,

, , ,

nventories as at ecember ,

and

consisted of nit aht Consolidated financial statements tock obsolescence

Cost

nventory-net

inished goods Work in process aw materials

, , , , , ,

( , , ) ( , , ) (, , ) (, , ) ( , , ) ( , , )

, , , , , ,

Total

, ,

( , , ) ( , , )

, ,

nit aht eparate financial statements tock obsolescence

Cost inished goods Work in process aw materials Total

, ,

, , , , , ,

(, , )

nventory-net

(, , )

, ,

, , , ,

( , ) ( , ) ( , , ) ( , , )

, , , ,

, ,

( , , ) ( , , )

, ,

etails of associates consisted of nit aht

Company

elta-T Co., Ltd. Thai uto Conversion Co., Ltd. elta Thai ung Co., Ltd.

eparate financial statements

ature of business

Country of incorporation

anufacture of vehicle parts anufacture of vehicle parts anufacture of auto seats and parts and other equipment for vehicles

Thailand

, ,

Thailand

, ,

Thailand

, ,

Total investments in associated companies

hareholding percentage

Consolidated financial statements Carrying amounts based on equity method

Cost

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

n the first quarter , the Company sells , ordinary shares in Thai uto Conversion Co., Ltd. representing of the registered shares at a price of aht , per share, giving a total of aht . million to Toyota uto ody Co., Ltd. This price was calculated using the discounted cash flow method as mutual agreed by both parties. The Company had gain on sales of common stock which was recorded in other income in the amount of aht . million and aht . million in consolidated financial statements and separate financial statements, respectively. n consequence from the sales of shares, the Company still hold of the registered share capital of Thai uto Conversion Co., Ltd. ccording to the minute of the shareholders general meeting for the year of elta-T Co., Ltd. dated on ebruary , , the meeting approved to pay dividend from its retained earnings of the year of aht per share, totalling , shares, in the total amount of aht million, the Company has shareholding thus the Company has dividend income in the amount of aht . million. n ebruary , , the Company had received dividend amount of aht . million, and the remaining balance of aht . million had received on pril , . n addition, according to the minute of the extraordinary shareholders meeting no. of elta-T Co., Ltd. held on ebruary , , the meeting appro ed the Companyâ&#x20AC;&#x2122;s dissolution. Currently, it is in the process of liquidation. ccording to the minute of the shareholders general meeting for the year of Thai uto Conversion Co., Ltd. dated on une , , the meeting approved to pay dividend from inappropriated retained earnings as at ecember , to shareholders in the total amount of ath . million. The Company has shareholding, so the Company has dividend income in the total amount of aht . million. The Company already received such dividend on uly , . ccording to the minute of director meeting of elta Thairung Co., Ltd. dated on pril , , the meeting approved to pay dividend to shareholders in the total amount of aht million. The Company has shareholding, so the Company has dividend income in the total amount of aht million. uring the year, the Company has recognised its share of net profit from investments in associated companies in the consolidated financial statements and dividend income in the separate financial statements as follows

Company elta-T Co., Ltd. Thai uto Conversion Co., Ltd. elta Thai ung Co., Ltd. Total

nit aht Consolidated financial statements eparate financial statements hare of profit (loss) from investments in ividend received during the year associates during the year (, , ) , , , , , ,

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

(, , ) , , , , , ,

, , , , , ,

, ,

inancial information of the associated companies is summarised below.

Company

Paid-up capital as at ecember ,

Total assets as at ecember ,

Total liabilities as at ecember ,

elta-T Co., Ltd. Thai uto Conversion Co., Ltd. elta Thai ung Co., Ltd.

nit illion aht et profit for the years ended ecember ,

Total revenues for the years ended ecember ,

()

, ,

hares of profit from investments in three associated companies, included in the consolidated statements of comprehensive income for the year and , amounting to aht . million and aht . million, respectively, were calculated based on financial statements prepared by the management of those companies and not audited by their auditors. T

etails of investments in subsidiaries as presented in separate financial statements are as follows nit aht Companyâ&#x20AC;&#x2122;s name

Paid up capital illion aht

hareholding percentage

ividend received during the year

Cost

illion aht

Thai .P. uto ervice Co., Ltd. and its subsidiaries Thai ung Tools and ies Co., Ltd. Thai uto Pressparts Co., Ltd. Total investments in subsidiaries

, ,

, , , , , ,

, ,

, , -

, ,

ccording to the annual general meeting of the shareholders of Thai .P. uto ervice Co., Ltd. held on pril , , approved to pay dividend from inappropriated retained earnings as at ecember , to shareholders of ath per share, totaling number of share , shares which amounting to ath million. T

ther long-term investment as at ecember ,

T and

consisted of nit aht

nvestment in LP Land and ousing evelopment Co., Ltd.

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit aht Less llowance for impairment ther long-term investment - net T

( , ) T

nvestment properties as at ecember ,

consisted of nit aht Consolidated financial statements uilding uilding improvement

Land Cost s at ecember , ncrease Write - off s at ecember , ccumulated depreciation s at ecember , epreciation for the year Write - off s at ecember , et book value s at ecember , s at ecember , epreciation for the years

( , ) -

, ,

, , -

, , , , , ,

, , -

Total , ,

, ) , ,

(, , ) , ,

( , , ) , ,

( , , ) (, , ) , , ( , , )

( , , ) ( , ) , , ( , , )

( , , ) (, , ) , , ( , , )

, , , ,

, , , , , , , ,

nvestment property comprises a number of commercial land and building that are leased to third parties. ach of the leases contains an initial non-cancellable period of - years. ubsequent renewals are negotiated with the lessee. The subsidiaries transferred building from property, plant and equipment to investment properties because the buildings were no longer used by the subsidiaries and as such it was decided that the building would be leased to the third party. s at ecember , , subsidiariesâ&#x20AC;&#x2122; company certain in estment properties ha e been fully depreciated but are still in use. The original cost of those assets amounted to approximately aht . million ( aht . million).

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

s at ecember , , a subsidiary’s hai ltimate Car Co., td. land and building constructed thereon at net book value of aht . million has been mortgaged with a bank to secure the subsidiary’s credit facilities of aht million as granted by the bank. s at ecember , , the Company’s management has not yet assessed fair alue of such assets as they believe that fair value has no significant difference from book value. T

Property, plant and equipment as at ecember ,

consisted of nit aht Consolidated financial statements

Land and uildings land and building improvement improvement ost ecember , cquisitions Transfer in (transfer out) isposals ecember , ccumu ated depreciation ecember , epreciation for the year epreciation on disposals ecember , owance or impairment ecember , ncrease mortization ecember , et boo a ue ecember , ecember , epreciation or the ears

, , , , (, , ) , ,

, , , , , , ( , ) , ,

achinery, factory equipment and tools , , , , ( , , ,

, , , , ) ,

ffice equipment

otor vehicles

, , , , , (, , ) , ,

( , , ) ( , , ) (, , , ) ( , , ) ( , ) ( , , ) ( , , ) (, , ) , , , , , , , (, , ) ( , , ) (, , , ) ( , , ) -

( , , ) , , (, , )

Work in progress

Total

, , , ,

, , , , - ( , , ) (, , ) (, , ) , , , ,

( , , ) (, , ) , , ( , , )

, , , , , ( , , ) , , ,

- (, , - ( , , - (, ,

( , ) ( , )

, ) , ) , , )

( , , ) , , (, , )

, ,

, , ,

, ,

, , ,

( aht million included in manufacturing cost, and the balance in administrative expenses)

, ,

( aht million included in manufacturing cost, and the balance in administrative expenses)

, ,

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit aht eparate financial statements Land and uildings achinery, factory land and building equipment ffice otor improvement improvement and tools equipment vehicles ost ecember , cquisitions Transfer in (transfer out) isposals ecember , ccumu ated depreciation ecember , epreciation for the year epreciation on disposals ecember , owance or impairment ecember , ncrease mortization ecember , et boo a ue ecember ,

, , , ,

, , , , , ( , ) , ,

, ) ,

(, , ) , ,

( , , ) ( , , ) (, , , ) ( , ) ( , , ) ( , , ) , , , , ,

( , , ) (, , ) , ,

(, , , ) ( , , ) , ,

( , ) ( , )

( , , ) , , (, , )

, , , , -

( , , ) , , (, , )

, ,

, , ,

Total

, , , , (, , ) , ,

(, , ) , ,

, , , , ( , , ,

Work in progress

, ,

, , , , , , , , ecember , epreciation or the ears ( aht million included in manufacturing cost, and the balance in administrative expenses)

, , , , ( , , ) ( , ) , ,

, , , , , ( , , ) , , ,

, ,

, , , , , ,

( aht million included in manufacturing cost, and the balance in administrative expenses)

s at ecember , , certain plant and equipment items have been fully depreciated but are still in use. The original cost of those assets amounted to approximately aht , million ( aht , million) ( eparate financial statements aht , million, ( aht , million)). T eferred tax as at ecember ,

and

consisted of nit aht Consolidated financial statements eparate financial statements

eferred tax assets eferred tax liabilities

, , (, , )

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

, , (, , )

, , ( , )

ovements in deferred tax assets and deferred tax liabilities during the year were as follows nit aht Consolidated financial statements anuary Profit ecember , (loss) , eferred tax assets llowance for decline in value of inventory llowance for impairment of investment llowance for decline in value of fixed assets llowance for bad debt Provision for employee benefit liabilities Provision for liabilities Loss carry forward Total eferred tax liabilities epreciation Total

eparate financial statements anuary Profit ecember , (loss) ,

, ,

(, , )

, ,

(, , )

, ,

, , ,

( , )

(, , ) -

, , -

, , ,

, , , ,

( , , ) ( , , )

, , , ,

(, , )

( , )

(, , )

( , )

(, , )

, , , ,

(, , ) (, , )

, ,

nit aht Consolidated financial statements anuary Profit ecember , (loss) , ( estated) eferred tax assets llowance for decline in value of inventory llowance for impairment of investment llowance for bad debt Provision for employee benefit liabilities Loss carry forward Total eferred tax liabilities epreciation Total

eparate financial statements anuary Profit ecember , (loss) , ( estated)

, ,

(, , )

, ,

( , )

, ,

(, )

, ,

(, , )

, , ,

, , , ,

( , , ) ( , , )

, , , ,

(, , ) (, , )

, ,

( , )

, ,

, , , ,

( , , ) ( , , )

, , , ,

( , ) ( , )

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

ther non-current assets as at ecember ,

and

consisted of nit aht Consolidated financial statements

Land and building leasehold rights - net Withholding tax deducted at source eferred cost of dies - net ther non-current assets Total

, , , , ,

eparate financial statements , , , , ,

, , , ,

T s at ecember , , the Company and its subsidiaries have bank overdraft facilities and other short-term loan facilities amounting to aht million and aht , million, respectively ( eparate financial statements aht million and aht million, respectively) which are guaranteed by the Company and its directors, and secured by the mortgage of land with structures thereon of the subsidiary. T

Trade and other payables as at ecember ,

and

consisted of nit aht

Trade accounts payable unrelated parties Trade accounts payable related parties Total trade accounts payable ther payables related parties ther payables unrelated parties ccrued expenses ccounts payable evenue epartment dvance from customers utput tax suspense ccrued project costs unrelated parties ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

Consolidated financial statements

eparate financial statements

, , , , , , , , , , , , , , , , , , ,

, , , , , , , , ,

, , , , , , , , , , , , , , , , , , ,

, , , , , , , , ,

, , , , , , , , , , , , , , , -

nit aht Consolidated financial statements ccrued project costs related party thers Total other payables Total trade and other payables T

, , , , , ,

eparate financial statements -

, , , , , ,

, , , ,

mployee benefits obligation in the statements of financial position as at ecember , of

and

consisted

nit aht Post-employment benefit plan Consolidated financial statements eparate financial statements Present value of obligation

, ,

The Company and its subsidiaries made defined benefit plan in accordance with severance payment as the labor law which entitled retired employee within work service period in various rates, such as more than years to receive severance payment not less than days or months of the last month salary. ovement of the present value of employee benefits obligation for the years ended ecember , as follows

and

nit aht Post-employment benefit plan Consolidated financial statements eparate financial statements mployee benefits obligation as at anuary , enefit paid Current service cost nterest cost mployee benefits obligation as at ecember ,

, , ( , ) (, , ) (, , ) , ,

, , (, , ) , , , , , ,

, , ( , ) ( , ) ( , ) , ,

, , , , , , , ,

mployee benefit expenses in the statements of comprehensive income for the years ended ecember , and consisted of

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit aht Post-employment benefit plan eparate financial statements Consolidated financial statements Current service cost nterest from obligation Total employee benefits expenses

(, , ) (, , ) (, , )

mployee benefit expenses for the years ended ecember , comprehensive income are as follows

, , , , , , and

( , ) ( , ) ( , )

, , , , , ,

as shown in the statements of

nit aht Post-employment benefit plan eparate financial statements Consolidated financial statements Cost of sales elling expenses dministrative expenses Total employee benefit expenses Principal actuarial assumptions as at ecember ,

iscount rate at ecember uture salary increases ortality rate

, ( , ) (, , ) (, , ) and

, ( , ) , , , ,

, , (, , ) ( , )

, ( , ,

, ) , ,

(expressed as weighted averages) as follows Consolidated and separate financial statements

ortality table year

The actuarial assumption of discount rate is estimated from weighted average of yield rate of government bonds as at the end of reporting date that reflects the estimated timing of benefit payments. The actuarial assumption of mortality rate for reasonable estimation of probability of retirement in the future is estimated from mortality table. T ccording to the board of directorsâ&#x20AC;&#x2122; meeting of the Company No. held on ay , , the Companyâ&#x20AC;&#x2122;s directors resolved to approve the share repurchase program for financial management purpose in accordance with the ection ( ) of the Public Limited Company ct ( o. ) . . in the amount not exceeding aht

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

million. The number of ordinary shares to be repurchased is not exceeding . million shares (par value of aht per share) equal to of the total number of paid-up share capital of the Company. The Company shall repurchase its ordinary shares through the main board of the tock xchange of Thailand during the period from ay , to ovember , , the Company determine the share resale procedures through the tock xchange of Thailand, or by public offering and the period for share resale within years and months after the date of completion of repurchase. The Company repurchased a total of , , ordinary shares during the period from ay , to ovember , , for a total consideration of aht . million and during the same period the Company appropriated aht . million from its retained earnings as a treasury shares reserve for the repurchased shares.

eserves comprise at s

ta d

eta ed ea

Legal reserve ection of the Public Companies ct . . ection requires that a public company shall allocate not less than of its annual net profit, less any accumulated losses brought forward, to a reser e account legal reser e , until this account reaches an amount not less than of the registered authorised capital. he legal reserve is not available for dividend distribution. Treasury shares reserve The treasury shares reserve represents the amount appropriated from retained earnings equal to the cost of the Companyâ&#x20AC;&#x2122;s own shares held by the Company. he treasury shares reser e is not a ailable for di idend distribution. T ther income for the years ended ecember ,

and

consisted of nit aht

Consolidated financial statements crap sales nterest income tilities, transportation service and sales of supplies ental fee Consulting fee Gain on sales of investment in associated company

eparate financial statements

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ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

nit aht Consolidated financial statements

eparate financial statements

thers

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Total

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T ignificant expenses by nature are as follows nit aht Consolidated financial statements eparate financial statements alary and wages and other employee benefits epreciation and amortization aw materials and consumables used Changes in inventories of finished goods and work in process

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T ncome tax expenses for the years ended ecember ,

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consisted of nit aht

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econciliation of effective tax rate

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

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arious rate

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eparate financial statements ate ( ) Profit before total income tax expense ncome tax using the corporate tax rate ffect from difference of tax rate ncome tax reduction - deferred ncome not subject to tax xpenses not deductible for tax purposes ecognition of previously unrecognised tax losses Total

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e ta ed t oyal ecree o. .. dated ecember , grants a reduction in the corporate income tax rate from to on net profit for the accounting period beginning on or after anuary , , and will be reduced to on net profit for the two consecutive accounting periods beginning on or after anuary , onwards. oyal ecree o. . . dated ugust grants companies listed on the tock xchange of Thailand a reduction in the corporate income tax rate from to for taxable profit not exceeding aht million for the three consecutive accounting periods beginning on or after anuary , . ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

The current tax expense in the statement of comprehensive income is less than the amount determined by applying the corporate tax rate to the accounting profit for the period principally because (a) significant portion of subsidiariesâ&#x20AC;&#x2122; profit was deri ed from promoted acti ities for which concessionary tax rates apply. (b) The Company and its subsidiaries have unutilised tax losses brought forward from the previous year which have been utilised during the period to set-off against the current year s tax charge. subsidiary has been granted the promotional privileges discussed in ote corporate income tax on net income from promoted activities.

, including exemption from

T subsidiary was granted investment promotional privileges by the oard of nvestment ( are summarised below

). ajor privileges

xemption from reduction of corporate income tax rate for years commencing from une , for the manufacture of metal vehicle body parts, plastic and fiber glass vehicle parts, and the manufacture and maintenance of molds and jigs. s from arch , , a subsidiary has received promotional privileges from the oard of nvestment for the manufacture of assembly parts pursuant to the promotion certificate o. () issued on ay , . uch subsidiary has started generating revenues since pril , .

asic earnings per share is calculated by dividing net profit for the year by the weighted average number of ordinary shares in issue during the year. nit aht Consolidated eparate financial statements financial statements Profit for the years attributable to equity holders of the Company , , , , , , , , Weighted average number of shares outstanding during the years ended ecember , follows

100

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

and

calculated as

nit Thousand shares Consolidated financial statements

eparate financial statements

t anuary , Weighted average number of treasury shares outstanding during the years Weighted average number of ordinary shares outstanding during the years

, -

(, )

, -

(, )

he Companyâ&#x20AC;&#x2122;s and its subsidiariesâ&#x20AC;&#x2122; business operations involve three principal segments ( ) car assembly and other related car services ( ) manufacture of equipment for production of car accessories (comprising the manufacture of molds and jigs and manufacture and sales of car accessories and spare parts) and ( ) sales of cars, car service centre business. These operations are mainly carried on in Thailand. elow is the consolidated financial information for the years ended ecember , and of the Company and its subsidiaries by segment. nit Car assembly and other related car services evenue from external customers ntersegment revenues Total revenues

anufacture of equipment for production of car accessories

, ,

ales of cars and car service centre

illion aht

ther

limination of intersegment revenues ( ) ( ) ( ) ( )

egment income nallocated income and expenses ther income elling expenses dministrative expenses hare of profit from investments in associated companies Corporate income tax

Consolidation ,

, -

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et profit nvestment property Property, plant and equipment nallocated assets Total assets

()

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

101

he Company’s and its subsidiaries’ transfer prices between business segments are described in ote . n ebruary , , Thai ltimate Car Co., Ltd. ( ubsidiary held by Thai .P. uto ervice Co., Ltd.) had registered to engage more services operation which are the services in legal, accounting, commercial, industrial, and such services and others related to business and tax administration of large organization. T The Company and its subsidiaries and their employees have jointly established a provident fund in accordance with the Provident und ct . . . The funds are monthly contributed to by employees at the rates of percent of their salaries, and by the Company and its subsidiaries at the rates of - percent of the employees’ contribution. The fund is managed by C Thai ank Public Company Limited, except that of a subsidiary (Thai ltimate Car Co., Ltd.) is managed by asikorn sset anagement Co., Ltd. The funds will be paid to the employees upon termination in accordance with the rules of the funds. uring the year , the Company and its subsidiaries contributed aht million ( aht million) to the funds.

ccording to the annual general meeting of the shareholders of the Company on pril , , the shareholders approved the appropriation of dividend for the year of aht . per share, amounting to aht . million. ccording to the annual general meeting of the shareholders of the Company for the year held on pril , , the shareholders approved the appropriation of dividend for the year of aht . per share, amounting to aht . million. The dividend was paid to shareholders within ay , . T .

perating lease commitments

The Company and its subsidiaries have entered into several lease agreements in respect of the lease of land, office building space, motor vehicles and equipment. s at ecember , , future minimum lease payments required under these operating lease contracts were as follows. nit million aht Consolidated eparate financial financial statements statements Payable Within year . to years . -

102

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

ank guarantees

s at ecember , follows

, the Company and its subsidiaries have outstanding bank guarantees issued by banks as Consolidated financial eparate financial statements statements ( nit million ollars) ( nit million aht) ( nit million aht)

Purchase of goods lectricity use, among others T .

. -

inancial risk management

he Company’s and its subsidiaries’ financial instruments, as defined under hai ccounting Standard o. inancial nstruments isclosure and resentations , principally comprise cash and cash equi alents, trade accounts receivable, other receivables, loans, investments, trade accounts payable and other payables. The financial risks associated with these financial instruments and how they are managed is described below. ed t s The Company and subsidiaries are exposed to credit risk primarily with respect to trade accounts receivable, loans, and other receivables. The Company and subsidiaries manage the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. n addition, the Company and its subsidiaries do not have high concentration of credit risk since they have a large customer base. The maximum exposure to credit risk is limited to the carrying amounts of receivables, loans, and other receivables as stated in the tatement of financial position. te est ate s he Company’ and subsidiaries’ e posures to interest rate risk relate primarily to their cash at banks, current investments and short-term loans. owe er, since most of the Company’s and subsidiaries’ financial assets and liabilities have been repaid within one year, the interest rate risk is expected to be minimal. e e s subsidiary’s e posures to foreign currency risk arise mainly from trading transactions that are denominated in foreign currencies. The subsidiary seeks to reduce this risk by entering into forward exchange contracts when it considers appropriate. Generally, the forward contracts mature within one year. .

air values of financial instruments

Since the ma ority of the Company’s and subsidiaries’ financial instruments are short-term in nature, and current ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

103

investments and loans bear interest at rates close to market rate, their fair value is not expected to be materially different from the amounts presented in the tatement of financial position. fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arm’s length transaction. he fair alue is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument. T

he primary ob ecti es of the Company’s capital management is to ensure that it has an appropriate financing structure and preserves the ability to continue its business as a going concern. ccording to the tatement of financial position as at ecember , , the Company’s and its subsidiaries’ debt-to-equity ratio was . . and the Company’s was . . . T

Certain accounts in the statement of financial position as at ecember , and the statement of comprehensive income for the year ended ecember , , which are included in the financial statements for comparative purposes, have been reclassified to conform to the presentation in the financial statements. nit aht Consolidated financial statements efore eclassify fter reclassify reclassify 6WDWHPHQW RI ILQDQFLDO SRVLWLRQ Property, plant and equipment - net ntangible assets - net 6WDWHPHQW RI FRPSUHKHQVLYH LQFRPH Cost of sales Cost of rendering of services elling expenses dministrative expenses

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

, , , -

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nit aht eparate financial statements eclassify

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hese financial statements were authorised for issue by the Companyâ&#x20AC;&#x2122;s oard of irectors on ebruary ,

ANNUAL REPORT 2012 THAI RUNG UNION CAR PUBLIC COMPANY LIMITED

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