Annual Report 2013 EN by sarunya dareephat

Annual Report 2013 รายงานประจำ�ปี 2556

ONE STOP SERVICE FOR AUTOMOTIVE INDUSTRY

บริษัท ไทยรุ่งยูเนี่ยนคาร์ จำ�กัด (มหาชน) Thai Rung Union Car Public Company Limited

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Contents ประวัติความเป็นมาของบริษัท

วิสัยทัศน์องค์กร

Company Background Vision Mission

สรุปข้อมูลทางการเงิน

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

06 08 13 24 27 30 34 49 52 61 62 64 66 67 72 74

Company Background

02 Annual Report 2013

Thai Rung Union Car Public Company Limited

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 operatorin 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.

TO BE AT THE PINNACLE OF THE THAI AUTO INDUSTRY, DEVLOPING, DESIGNING AND PRODUCING A COMPREHENSIVE RANG 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.

VISION TO BE AT THE PINNACLE OF THE THAI AUTO INDUSTRY, DEVLOPING, DESIGNING AND PRODUCING A COMPREHENSIVE RANG OF PRODUCTS; WITH OUR OWN BRAND, TO BUILD OPTIMUM CUSTOMER SATISFACTION THROUGH WORLD-CLASS QUALITY AND SERVICE.

Significant Financial Data

Summary Financial Information

Unit: Million Bt.

2012

2011

3,138.30 3,374.80 2,955.20 419.60 353.70

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

1,088.20 3,632.40 479.40 3,153.00

1,770.44 3,862.20 772.67 3,089.49

1,083.10 3,004.26 362.18 2,642.08

0.72 0.40 6.20

1.13 0.60 6.11

0.38 0.25 5.20

10.48 11.70 11.20

14.70 20.01 19.91

8.23 7.32 8.91

2012 3,780.84 2011 2,263.10

(Million Bt)

2013 353.70 2012 555.80 2011 186.22

(Million Bt)

2013 3,632.40

Total Assets

Total Revenues

2013 3,374.80

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

Remark * Payment of the dividend payment is subject to approval by the 2013 Annual General Shareholdersâ&#x20AC;&#x2122; Meeting.

2012 3,862.20 2011 3,004.26

(Million Bt)

05 Annual Report 2013

2013

Thai Rung Union Car Public Company Limited

Consolidated, as at 31st December Operating Performance Sales and Service Income Total Revenues Total Expenses Earnings (loss) before financing cost and income tax Net Earnings (loss) attributable to equity holders of the parent Financial Position Current Assets Total Assets Total Liabilities Shareholdersâ&#x20AC;&#x2122; 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)

Message From the Chairman

06 Annual Report 2013

Thai Rung Union Car Public Company Limited

Dr. Pranee Phaoenchoke Chairman With total vehicle production of 2.46 million units in 2013, Thailand edged up to ninth position in the world ranking. Of this total, 1.33 million units were sold in the domestic market, which was down by 7% on the previous year due to the ending of the government’s “first car” excise tax rebate scheme, and 1.13 million were exported, representing an increase of 10% on 2012. For 2014 we expect the domestic vehicle market to fall a little further, but in the longer term the Thai automotive industry is still outstanding, and the most important production base in ASEAN. The opening up of the ASEAN Economic Community (AEC) free market will stimulate demand for vehicles in the region, so it has become a target for carmakers from all over the world, who will increasingly try to enter these markets and produce here. As for the results of the Thai Rung group of companies in 2013, consolidated revenues were Bt.3,375 million, and net income Bt.354 million. The fall in comparison with 2012 was due to the domestic auto market’s being depressed in the latter half of the year by the economic situation and the country’s political problems. The Company therefore had to place great emphasis controlling costs, boosting efficiency and reducing the risk associated with its dependence

on the automotive industry, which it did by expanding its customer base to take in other sectors such as industrial tooling, construction equipment, agricultural machinery and premium grade motorcycles, a high added value niche market. Apart from this, the Company also invested in acquiring new machines and modernising existing ones for parts and die making, as well as buying land and a factory at Hemaraj Industrial Estate, Bowin, Rayong Province, for future expansion. At the beginning of 2014 the Company successfully negotiated an agreement to establish a joint venture with Kyowa Sangyo of Japan, under the name Kyowa Thairung Co Ltd, with a view to expanding its business base to include industrial, construction and agricultural machinery for both the domestic and export markets. In 2014 the Company expects to agree on the establishment of another joint venture company, to expand its business base to take in trucks of various kinds, such as dump trucks, cargo vans and trailers, the market for which looks set to continue growing in the future. The Company is also in discussions with several groups of investors who are interested in investing jointly with the Thai Rung group to expand into various areas related to its current business, including

research and development of new high added value products to increase its market share and generate extra revenue for the Company in the future. The Company was very proud and honoured to receive the SET Best Performance Award 2013 for listed companies with market capitalisations of between Bt.2 billion and Bt.10 billion, this being a joint award of the SET with the Money & Banking Magazine recognising the Company’s efforts to conduct its business in accordance with policies of good corporate governance, attaching 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 Company’s sustainable success. On behalf of the Company’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.

Annual Report 2013

Thai Rung Union Car Public Company Limited

the Companyâ&#x20AC;&#x2122;s efforts to conduct its business in accordance with policies of good corporate governance, attaching importance to its responsibilities towards society, community, the environment and all stakeholder

Board of Directors

08 Annual Report 2013

Thai Rung Union Car Public Company Limited

Dr. Pranee Phaoenchoke

Chairman of the Board of Directors & President

Age : 75 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%)

Mr. Pricha Attavipach

Independent director, Deputy chairman & Chairman of the Board of Directors, Audit Committee Age : 76 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)

Ms. Kaewjai Phaoenchoke

Age : 53

Age : 49

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)

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%)

Director & Managing Director

Director

Annual Report 2013

Mr. Sompong Phaoenchoke

Thai Rung Union Car Public Company Limited

Mr. Wuttichai Phaoenchoke 10

Director Age : 44

Annual Report 2013

Thai Rung Union Car Public Company Limited

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%)

Mr. Somkiat Nimrawee Independent Director

Age : 62 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%)

Age : 61

Academic Qualifications Bachelor of Industrial Technology (Mechanical Technology) Rajamangala University of Technology Krungthep Present Position Director, Member of Risk Management Committee of Thai Rung Union Car Plc. Senior Advisor Administrative Division of Denso (Thailand) Co.Ltd. Executive Board & Deputy Secretary of The Federation of Thai Industries Honorary Chairman of Auto-Part Industry Club, The Federation of Thai Industries Senior Vice President of Thai Automotive Industry Association Vice President of Thai Auto-parts Manufacurers Association Vice President Organizational Perfoemance Management of Technology Promotion Association (Thai-Japan) Board of Director of Thai-Nichi Institute of Technology Qualified member of Thailand Professional Qualification Institute (Public Organization) Board of Director of Office of the Vocational Education Commission, Ministry of Education Board of Director of Thai - German Institute Director of The Association of QC Headquaters of Thailand Director of Department of Skill Development, Ministry of Labour Director of Pathumwan Institutite of Technology Advisor of Society of Automotive Engineers Thailand Advisor of Thai - Nichi Institute of Technology Shareholding None

Mr. Suvait Theeravachirakul Mr. Damri Tunshevavong Independent Director & Member, Audit Committee Age : 55

Independent Director Age : 60

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

11 Annual Report 2013

Director

Thai Rung Union Car Public Company Limited

Mr.Thavorn Chalassthien

Thai Rung Union Car Public Company Limited

Annual Report 2013

AUTOMATION TECHNOLGY

Thai Rung Union Car Plc Corporate Social Responsibility Report 2013 Thai Rung Union Car Plc Corporate Social Responsibility Report 2013

    

Corporate Social Responsibility Policy Environmental Activities and Pollution Control Health and Safety Corporate Social Responsibility Activities Awards

Corporate Social Responsibility Policy

1. Conduct business ethically and transparently so as to build the confidence of all parties concerned, aiming to develop and expand the Company, while at the same time developing the quality of life of its employees and of the community and wider society in which it operates, and taking care of benefits to stakeholders in accordance with the vision and mission established by the Company. 2. Promote and impart knowledge of corporate social responsibility to employees at all levels of the Company, with a view to involving them so that responsibility towards society is taken by the entire organisation. 3. Support projects and activities for society by using the Company’s potential and resources to achieve success in accordance with objectives. 4. Ensure communication and disclosure of the Company’s CSR information such that stakeholders understand the conduct of the Company’s business and review CSR policy at appropriate intervals. 5. The Company strives to conduct its business equitably and ethically, conscientiously conforming to the law and respecting social rules and conventions while remaining politically neutral. Care of the Environment

Environmental Activities and Pollution Control Thai Rung Union Car Plc continuously takes care of the environment and the community, and has expanded the coverage of its activities as follows: Environmental management evaluation in accordance with ISO 14001:2004 standard In order to ensure that the quality and standard of the Company’s environmental management is continuously maintained, with due attention being paid to corporate social responsibility and the environment, Thai Rung Union Car Plc subjects itself to annual environmental management evaluations in accordance with the ISO 14001:2004 standard. In 2013 it was assessed three times, twice by its own Internal Audit department and once by an external

Annual Report 2013

To ensure that this policy is adhered to, the Company has established the following CSR policy guidelines for conducting its business successfully and in a manner that is acceptable to all parties concerned.

13 Thai Rung Union Car Public Company Limited

Thai Rung Union Car Plc’s policy is to conduct its business in accordance with principles of corporate social responsibility (CSR), aiming to build good relations based on mutual acceptance and trust, taking account of its possible effects on all stakeholder groups, attaching importance to activities in support of society and conscientiously taking care of the community in which it operates, while at the same time cultivating an attitude and corporate culture such that its employees play an active part in implementing its corporate social responsibility policy.

firm, Bureau Veritas (Thailand) Ltd, the results showing that the Company’s environmental management conformed to the ISO 14001:2004 standard.

1. Management of hazardous waste In the paint-spraying process, rotating water curtains are used to capture hazardous waste in the form of paint particles and waste water with paint sediment, which is sent to the waste removal company to be treated correctly in accordance with relevant standards and laws. 2. Control of atmospheric pollution The Company attaches importance to combating air pollution that may result from its production process and services and affect people living near the Company, and has taken steps to improve its paint dipping and spraying systems so as to reduce pollution and to build confidence on the part of its business partners in the limited environmental impact of those systems.

Annual Report 2013

Thai Rung Union Car Public Company Limited

The Company uses technology to mitigate air pollution from the EDP paint dipping process, having developed a system (activated carbon filter) to mitigate odour, while for the paint spraying area the water curtain technology is used to combine the airborne particles with the water before releasing the treated air through a vent, with the liquid waste (paint or paint mixed with water) being sent for treatment.

3. Control of water pollution Waste water arises from the production process, both waste water mixed with chemicals and contaminated water from the Company’s paint dipping and spraying processes, The Company has put in place systems for mitigating waste water in accordance with the standards set by the Department of Industrial Works, using chemical degreasing and detackifying agents. Waste water mitigation is controlled by the Company’s factory engineering department, and the quality of the water is examined by an outside service provider after mitigation and before release into the atmosphere, to ensure that it is in accordance with the law. The Company also retains this data for use in improving its systems for mitigating pollution and increasing the neighbouring community’s confidence in the environmental effects of the factory.

Health and Safety Apart from taking care of the environment, the Company also attaches great importance to the health and safety of all its employees, as valuable resources of the organisation and the basic factor enabling it to achieve its objectives. In terms of health, safety and the environment it therefore works to international standards and strictly in accordance with the personnel policy that the Company has established,

3. Employees’ Health and Safety  The Company has established a programme of annual medical examinations for employees, to keep a watch on the health of employees exposed to risks in the workplace and to use the information for reducing these risks  The Company carried out activities aimed at promoting safety at work for employees at all levels and seeking to involve them, such as holding a “safety week” and surveying and improving personal protective equipment. Corporate Social Responsibility Activities In 2013 the Company initiated activities for society with the involvement of its stakeholders the Company, its group companies, business partners and local government entities and, last

15 Annual Report 2013

1. Health and Safety Training  Training for new employees on safety in the workplace and training for all employees concerned, to review the safety at work rules, safety rules for specific types of work and safety rules as laid down by law, to ensure that all employees know the rules and abide by them.  Safety officers examined and assessed risks to persons and property, including environmental impacts and established measures to prevent and mitigate any possible impact of the work before authorising outside contractors to work at the Company’s premises. 2. Readiness for emergencies  Regular training sessions are held and monthly fire drills and fire alarm tests carried out, as are annual evacuation drills including first aid and evacuation of injured persons.

Thai Rung Union Car Public Company Limited

In 2013 the Company worked on the prevention and control of accidents in the workplace, meaning both the areas used for the production process and those occupied by the Company in general. In 2013 the Company had 1,782,691 hours (149 days) of uninterrupted accidentfree work. To raise employees’ awareness of the value and importance of safety in the workplace, for themselves, others around them and the organisation, the Company organised a number of activities promoting safety:

but not least, the Company’s employees, whom it particularly sought to involve in activities for the benefit of society. The activities can be broken down as follows. 1) 2) 3) 4)

Care of Community and Society Support for youth education Activities to promote charitable deeds Preservation of local traditions and culture

Care of Community and Society In 2013 the Company focused particularly on the community living around the factory, including encouraging local public bodies to be vigorous and show their potential in looking after and providing service to the population of Nong Khaem and Bang Khae, which is where the Thai Rung Group’s businesses are established. The activities in 2013 were as follows.

Community Relations

Annual Report 2013

Thai Rung Union Car Public Company Limited

Because Thai Rung Union Car Plc’s parts making and vehicle assembly factory is adjacent to a residential area, to monitor and control any pollution that might arise from the paint dipping and spraying production process and affect nearby residents, the Company set up a community relations working team to maintain constant contact with the community, acting as a channel of communication and receiving any complaints so that they can be urgently addressed.

Support in providing essential medical equipment for hospitals The Company attaches great importance to healthcare and health services, which form an essential basis for the population’s quality of life. The Company’s investigations revealed that hospitals in the vicinity of the Thai Rung Union Car Plc group of companies have large numbers of patients in both Nong Khaem and Bang Khae as well as neighbouring provinces such as Samut Sakorn and Nakorn Pathom and that as a result the hospitals do not have sufficient medical equipment to attend to them all. The Company therefore organised a ceremonial presentation of robes to monks to raise funds to buy medical equipment for Luang Pho Taweesak Chutinataro, Rachaphiphat and Thammasat Chalermprakiat Hospitals, in which it was assisted by employees in the Thai Rung Group of companies and its business partners, who together donated money to buy dialysis machines, infusion pumps, defibrillators and laser eye surgery instruments for a total value of Bt.2,550,000. The money was presented to the representatives of all three hospitals on 29 October 2013 in Thai Rung Union Car Plc’s Promprieng Room by Dr. Pranee Phaoenchoke on behalf of the Thai Rung Group.

As well as paying attention to the promotion of healthcare services for the local community, the Company also gives priority to promoting education which is another important factor affecting the population’s standard of living. The Company accordingly sets aside a budget for scholarships to enable young people to study and as an incentive for them to study diligently and with perseverance.  Scholarships for young people in Nong Khaem and Bang Khae The Company, together with the Bang Khae 2 local education authority and schools in Nong Khaem and Bang Khae, selected 283 diligent and well-behaved but financially deprived pupils and children of officers from Nong Khaem and Phetchkasem police stations, to receive scholarships of Bt.2,000 each from Dr. Pranee Phaoenchoke and Directors of the Thai Rung Group, for a total of Bt.566,000.



Scholarships for children of Thai Rung employees

Apart from granting scholarships to young people in Nong Khaem and Bang Khae, the Company also attaches importance to the education of its employees’ children who need support for their studies and as an incentive to employees who are parents to encourage them

Annual Report 2013

Granting of youth scholarships

Thai Rung Union Car Public Company Limited

to workk together with w the Com mpany. Dr. Pranee Phaaoenchoke and a Directoors of the Company C thereforre establishh a budget for scholaarships for children of employeees. Since 2005 2 the scholarsships have been presen nted on 18 March everry year, this being the anniversarry of the death of Mr. Vichiien Phaoencchoke, the ffounder of Thai T Rung. In 2013 thee Company granted 74 schoolarships to children off employees , totalling Bt.278,000. B Supporrt for activiities for thee public ben nefit In suppport of activvities for th he common good, the Company C set aside thee necessary budget, materiaals and equippment to bee able to carrry out activ vities for thee benefit off society thrroughout the yeaar. During 2013 2 the Co ompany devvoted a totaal budget off Bt. 2,441,0000 to activ vities of public bbenefit for a number of o different organisatio ons - educattional instituutions, gov vernment and privvate sector entities e and d various chaarities.

Activitiies to prom mote good deeds d

Annual Report 2013

Thai Rung Union Car Public Company Limited

Thai Ruung encouraaged all its employees to lead their lives in accordance a w with its phiilosophy of “Thinnk right, doo right, talk right”, prom moting the following f good deeds:  Thai Rung R “Love your Birth hplace” pro oject With a view to givving employ yees the oppportunity of o developin ng their birt rthplaces deepending p orr real needss of each lo ocality, the Company organised the t Thai on the particular problems Love your Birthplace”” project, inn which emp ployees were invited tto submit prroposals Rung “L for projects to resoolve local prroblems or m meet local needs, n with the emphassis on invollving the local coommunity, for the Co ompany’s B Board to co onsider. Selected projeects meetin ng these conditioons would be b awarded a grant forr the employ yees concerrned to use in developiing their birthplaaces duringg the long g break ovver the Neew Year. In I 2013 the Company y granted Bt.10,000 each to three t such projects: p 1) Projject for insttalling and conditionin ng a playgro ound at the Ban Mueaang Suea Infaants Development Centtre, Phayakk khaphum Phisai Districct, Maha Saarakham Provvince; 2) Rennovation pro oject for buuilding of Ban B Nong Hua H Wua Scchool, Phran n Kratai Disttrict, Kamphaeng Phet Province; 3) Projject to instaall bookshellves and reaading tables and to buy more librarry books for Ban Nak kae School, Phibun Mangsahan M Ubon Rach hathanee District, U Provvince.

 Thai Rung volunteer development camp project As well as promoting activities and good deeds within the Company Thai Rung also supported employees’ work on behalf of the public, by supporting group of employees who volunteered to carry out charitable activities under the Thai Rung volunteer development camp which carried out the following activities in 2013: 1) Donation of money and develop playground and playground equipment for infants development centre, Nam Phrae, Phrao District, Chiang Mai Province; 2) Donation of money to acquire a water-powered generator, dining tables and educational equipment for the Ban Mae Omki School, Kreki Branch, Mae Waluang, Tha Song Yang District, Tak Province; 3) Donation of money and consumer necessaries to the Ruampanya Association for the Disabled, Sai Noi District, Nonthaburi Province; 4) Granting scholarships to pupils of Umphang Withayakom School, Umphang District, Tak Province; 5) Making an artificial salt-lick for wild animals in Khao Chamao National Park, Chamao District, Rayong Province.

19 Annual Report 2013

Thai Rung Union Car Public Company Limited

 Dhamma Sawasdee project The Company organised an activity called “farewell old year, welcome new year” to give employees a chance to hear some talks on dhamma and reflect on some ideas to apply in their daily lives.

20 Annual Report 2013

Thai Rung Union Car Public Company Limited

ď&#x201A;ˇ Thai Rung Project The Company aims to instil in all its employees values of self-sacrifice and sharing and awareness of the need to use resources as effectively as possible. The Thai Rung Sharing Project therefore aims to impart knowledge about separating out waste materials for recycling and to involve employees in bringing used drink cartons and old calendars to donate for onward delivery to the Fibre Pattana recycling centre for the benefit of the Thai Foundation for the Blind in Thailand under the Royal Patronage of H.M. the Queen.

Preserving traditions and culture The Company regularly joins forces with the local community in organising activities on religious holidays, providing both financial support and the necessary equipment for use in the activities and sending representatives from the Company to take part in the activities.

Annual Report 2013

Thai Rung Union Car Public Company Limited

 Good Deed for Father project This activity involved employees of the Company using the opportunity of H.M. the King’s birthday, 5 December, which is a public holiday and also Father’s Day in Thailand, to join forces to clean the public area surrounding the factory, as a good deed and a mark of respect towards His Majesty.

Awards The Company strives, with the wholehearted support of its Directors and employees at every level, to achieve its vision, and as a result regularly receives awards from various government bodies. Those received in 2013 included:  



Annual Report 2013

Thai Rung Union Car Public Company Limited



Certificate from the Department of Industrial Works, Ministry of Industry, that the Company passed an inspection of transfer of factory technology in the field of safety for 2012. 2013 Outstanding Workplace Award in the category Labour Relations and Welfare. Certificate from the Department of Labour Protection and Welfare that the Company passed the standard for the prevention and solution of drug-related problems in the workplace for 2013. The SET Awards 2013 in the category Best Company Performance Awards by the Stock Exchange of Thailand together with Money & Banking Magazine

Annual Report 2013

Thai Rung Union Car Public Company Limited

General Information General Information Listed Company Registered share capital Paid-up share capital Business Activities

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Thai Rung Union Car Public Company Limited

Address

Website Securities Registration

Auditors

Thai Rung Union Car Public Company Limited Companies Register Number 0107536001435 Bt.793,326,495 divided into 793,326,495 ordinary shares of Bt.1 each. Bt.492,372,797 - 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

Group Structure Thai Rung CarCar Public Limited Group of Structure of Thai Union Rung Union Public Company Company Limited and subsidiaries as at 31asDecember 20132013 and subsidiaries at 8 March Thai Rung Union Car Plc.

Thai Rung Union Car Plc. (TRU) (TRU)

Thai Auto Pressparts Co ., Ltd.

Thai Auto Pressparts 91 Co., Ltd. % 91%

20%

Delta Thairung Co., Ltd. Delta Thairung Co.,30%Ltd.

30%

Thai V .P . Auto Thai V. P. Auto Service Co.,Service Ltd.Co., Ltd. 94% 94%

Thai Ultimate Co.,CarLtd. ThaiCar Ultimate Co ., Ltd. 99.53% 99.53%

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

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94%Co., Ltd. Thai Rung Tools and Dies 94%

Thai Auto Conversion Co ., Ltd. % Ltd. Thai Auto Conversion20Co.,

Thai Rung Union Car Public Company Limited

Thai Rung Tools and Dies Co ., Ltd.

• 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

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Thai Rung Union Car Public Company Limited

• 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

Nature of Business

• 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.

Annual Report 2013

• Thai Rung Union Car Plc. has three business units as follows; o Product design, research and development and contract research, design and modification of various types of vehicles for domestic and overseas customers. o 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. o 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.

27 Thai Rung Union Car Public Company Limited

Nature of Business • General Business Overview of the Company, its Subsidiaries and Joint Ventures 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 V.P. Auto Service Co Ltd (TVS) provides after-sales service for Thai Rung’s multi-purpose vehicles. • 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 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 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. Company starts paint work to cater the growth of customer demand. • Thai Ultimate Car Co Ltd (TUC) a subsidiary of TVS which it acquired in 2001. Its current activity • 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. consists of providing automotive consulting and general administrative and organisational services.

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Thai Rung Union Car Public Company Limited

• •ThaiThai AutoAuto Conversion Co Ltd (TAC) is a isjoint venture withwith the the Toyota Motor Group forfor product Conversion Co Ltd (TAC) a joint venture Toyota Motor Group product development and and fitting of accessories for special purpose vehicles. development fitting of accessories for special purpose vehicles.

ภาษาอังกฤษ

• •DeltaDelta Thairung Co Ltd (DTC) is a isjoint venture withwith Delta Kogyo of Japan, newly established in 2007 to to Thairung Co Ltd (DTC) a joint venture Delta Kogyo of Japan, newly established in 2007 manufacture autoauto seatsseats and and partsparts and and otherother equipment for for vehicles. Its factory is atis Amata CityCity Industrial manufacture equipment vehicles. Its factory at Amata Industrial Estate, Amphoe Pluak Daeng, Rayong Province. Estate, Amphoe Pluak Daeng, Rayong Province.

ใสตารางดานลางในหนา 28 คะ

The The Company’s groupgroup policy is foris each subsidiary to strive to operate profitably in its ownown right andand to be Company’s policy for each subsidiary to strive to operate profitably in its right to be self-sufficient in itsinparticular activities within the the overall policy of the parent. self-sufficient its particular activities within overall policy of the parent. 3.1 3.1 Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2010-2012 Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2010-2012 2011-2013 Unit: Million Bt.Bt. Unit: Million Unit: Million Bt. % of shares Performed Performed % of shares SalesSales and and service 2010 2011 2012 service 2011 2012 2013 by by heldheld Million Bt Bt % % Million Bt Bt % % Million Million Million MillionBtBt % % Revenue fromfrom vehicle TRU 1,116.10 52 49 1,116.10 2,100.68 4956 2,100.68 2,045.54 5661 Revenue the assembly productionandofother vehicle TRU, TAP, 91, 94 1,123.26 vehicle-related contract work TRT manufacturing equipment Revenue fromfrom the production of vehicle 91, 94 584.82 TRU 1,280.34 3434 1,280.34 vehicle assembly 763.67 27 34 763.67 984.71 3429 Revenue and other TRU, TAP, manufacturing equipment TRT vehicle-related contract work Revenue fromfrom salessales of vehicles and and fromfrom TRU, TVS,TVS, 94, 94, 99.53* Revenue of vehicles TRU, 99.53* 262.13 175.01 12 8 175.01 118.56 8 3 118.56 108.05 3 3 service centres TUCTUC service centres TotalTotal revenue fromfrom SalesSales & service 1,970.21 3,499.58 9193 3,499.58 revenue & service 2,054.78 92 91 2,054.78 3,138.30 9393 OtherOther income 178.82 income 208.32 8 9 208.32 281.26 9 7 281.26 236.51 7 7 TotalTotal Revenues 2,149.03 Revenues 2,263.10 3,780.84 3,374.81 2,149.03 100100 2,263.10 2,263.10 100100 3,780.84 3,780.84 100100 * TRU holdsholds 94%94% of theof shares in TVS, which in turn holds 99.53% of the shares in TUC. * TRU the shares in TVS, which in turn holds 99.53% of the shares in TUC.

- Industry trends and future competitive situation 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.

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Thai Rung Union Car Public Company Limited

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.

Risk Factors 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 establishing a risk management plan which is continuously aligned with the Company’s 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 incentivizing employees and boosting efficiency

- all of which are aimed at building confidence in the Company’s risk management systems as being adequate and appropriate for the conduct of the organisation’s business and the achievement of its objectives.

Annual Report 2013

Thai Rung Union Car Public Company Limited

In 2013 the Company succeeded in increasing the efficiency with which it controlled the risks associated with possible effects of both atmospheric and noise pollution, investing to improve its paint dipping and spraying systems 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. Business Risks 1.1 Multi-purpose vehicles The Company has competitors in the form of several major 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, with this type of vehicle continuing to be popular among consumers. 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. fluctuating and generally higher oil prices, and the continuing unsettled political situation, have a braking effect on the car market and could have an impact on the pick-up truck market and the Company’s multi-purpose vehicle business. 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 groups’ 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 and accelerated the appointment of new dealers in the North, North-east, East and South of Thailand to present its products and 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 is always on the look-out for possible foreign business alliances with a view to increasing its knowhow 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 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 presents opportunities for the Company to win additional contract assembly and painting work. The Company is therefore likely to expand its production capacity further to cater to the growing volume of work. 1.3 Dies and Jigs In 2013 the volume of domestic die and jig making work began to decrease in line with the smaller number of new models, so the Company accelerated its search for business 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:

31 Annual Report 2013

We provide a one stop service for plastic parts, painting, contract assembly and modification work from research and design through to finished parts.

Thai Rung Union Car Public Company Limited

The Company continues to foster its relationships with its long-standing major customers, whilst at thesame 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.

Expanding the business to include the production and sale of vacuum mould plastic parts including plastic accessories under the name “Parto”, a proprietary brand owned by the Company, including growing sales on an OEM basis, so as to respond comprehensively to customers’ needs. 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 2. Financial Risks 2.1 Credit risk

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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 are due within one year, the interest rate risk is 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. Legal risk 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. 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. 4. Safety, environmental and community risks 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 2013

Thai Rung Union Car Public Company Limited

Shareholders and Management Shareholders and Management • Shareholders Major Shareholders as at 28 January 2014, last date on which the share register was closed. No.

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Thai Rung Union Car Public Company Limited

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 Mr. Wongwaris Phaoenchoke Tisco Securities Co Ltd Mr. Teerapong Namto Mr. Pattanasorn Phaoenchoke TOTAL

Shares 246,387,500 35,872,000 32,639,450 31,201,500 23,271,925 16,326,100 12,000,000 9,000,000 6,930,000 6,065,200 419,693,675

% of total shares 50.04% 7.29% 6.63% 6.34% 4.73% 3.32% 2.44% 1.83% 1.41% 1.23% 85.24%

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.

• Management 1. Management Structure 1.1 Structure of Company's Board of Directors The Company has the following five boards and committees: Board of Directors, Audit and Corporate Governance Committee, Executive Committee, Risk Management Committee and Nomination and Remuneration Committee, each committee having the powers and duties as follows: 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.

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.

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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.

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2) Powers and duties of the Audit and Corporate Governance Committee 1. To ensure that the Company’s financial reporting is accurate and adequate. 2. To ensure that the Company’s internal control and audit systems are appropriate, efficient and to assess the independence of the internal audit department and to give its approval to the appointment or dismissal of the head of the department. 3. To ensure that the Company acts in accordance with the rules of the SEC and the SET and all laws applying to its business. 4. To consider, select, review and propose independent persons for appointment as the Company’s auditors and to propose their remuneration, as well as attending meetings with the auditors without the presence of management at least once a year. 5. To consider related party transactions and transactions likely to give rise to conflicts of interest so as to ensure that they are carried out in accordance with the law and the rules of the SET and are fitting and proper and of the greatest possible benefit to the Company. 6. To draw up a report of the Audit and Corporate Governance Committee for publication in the Company’s Annual Report, said report to be signed by the Chairman of the Committee. 7. To propose and review the Company’s and group companies’ policies on principles of corporate governance and corporate social responsibility to the Board of Directors of the Company for adoption as the basis of its corporate governance. 8. To ensure that the Company acts in accordance with the Company’s principles of corporate governance and SEC and SET rules. 9. To keep the Company’s corporate governance and CSR policies under constant review. 10. To promote the dissemination of the Company’s corporate governance, CSR and sustainable development culture throughout all levels of the organization so as to ensure that it is universally understood and implemented. 11. To evaluate the Company’s performance against the principles of corporate governance and CSR it has established. 12. To hold quarterly meetings to monitor the Company’s results in the area of corporate governance and make recommendations for improvements. To perform such other tasks as may be assigned by the Company’s Board of Directors and accepted by the Committee.

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.

Annual Report 2013

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

37 Thai Rung Union Car Public Company Limited

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.

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.

38 Annual Report 2013

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 2013 all nine positions on the Board of Directors were occupied as follows. Position Name 1. Dr. Pranee Phaoenchoke Chairman of the Board 2. Mr. Pricha Attavipach Independent Director and Deputy Chairman of the Board 3. Mr. Sompong Phaoenchoke Director 4. Ms. Kaewjai Phaoenchoke Director 5. Mr. Wuttichai Phaoenchoke Director 6. Mr. Thavorn Chalassthien* Director 7. Mr. Suvait Theeravachirakul Independent Director 8. Mr. Somkiat Nimrawee Independent Director 9. Mr. Damri Tunshevavong Independent Director Mr. Sakchai Komgris Company Secretary and Secretary to the Board of Directors

Members of the Audit and Corporate Governance Committee serve for a term of two years. A quorum for a meeting of the 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 2013 the Companyâ&#x20AC;&#x2122;s Executive Committee consisted of five Directors, as follows: Position Name 1. Dr. Pranee Phaoenchoke Chairman of Executive Committee 2. Mr. Sompong Phaoenchoke Managing Director 3. Ms. Kaewjai Phaoenchoke Member of Executive Committee 4. Mr. Wuttichai Phaoenchoke Member of Executive Committee Mr. Sakchai Komgris Secretary to the Executive Committee

Annual Report 2013

2) Audit and Corporate Governance Committee On 3 October 2013 the Board resolved to assign additional powers and duties in the field of corporate governance to the existing members of the Audit Committee, and to change its name to the Audit and Corporate Governance Committee. It has the following three members, all of whom are independent directors: Position Name 1. Mr. Pricha Attavipach Chairman of the Audit and Corporate Governance Committee 2. Mr. Suvait Theeravachirakul Member of the Audit and Corporate Governance Committee 3. Mr. Somkiat Nimravee Member of the Audit and Corporate Governance Committee Mr. Phakkawat Suwanmajo Secretary to the Audit and Corporate Governance Committee

39 Thai Rung Union Car Public Company Limited

* Note: Mr. Thavorn Chalassthien was appointed a Director to replace Mr. Kavee Vasuvat, who resigned from his position as Director effective 22 April 2013. 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.

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.

40 Annual Report 2013

Thai Rung Union Car Public Company Limited

4) Risk Management Committee As at 31 December 2013 the Companyâ&#x20AC;&#x2122;s Risk Management Committee was composed of six members, as follows: Position Name 1. Mr. Sompong Phaoenchoke Chairman of the Risk Management Committee 2. Mr. Somkiat Nimrawee Member of the Risk Management Committee 3. Mr. Suvait Theeravachirakul Member of the Risk Management Committee 4. Mr. Thavorn Chalassthien Member of the Risk Management Committee 5. Mr. Sakchai Komgris Member of the Risk Management Committee 6. Mr. Phakkawat Suwanmajo Member of and Secretary to the Risk Management Committee * Note Mr. Thavorn Chalassthien was appointed with effect from 22 April 2013. 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 2013 the Companyâ&#x20AC;&#x2122;s Nomination and Remuneration Committee was composed of three independent directors as follows: Position Name Mr. Pricha Attavipach Chairman of the Nomination and Remuneration Committee Mr. Damri Tanshevavong* Member of the Nomination and Remuneration Committee Mr. Somkiat Nimrawee Member of the Nomination and Remuneration Committee Mr. Sakchai Komgris Secretary to the Nomination and Remuneration Committee * Note: Mr. Damri Tanshevavong effective 22 April 2013.

was appointed a Director to replace Mr Kavee Vasuvat who resigned from his position as Director

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.

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. 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.

41 Annual Report 2013

Thai Rung Union Car Public Company Limited

Dr. Pranee Phaoenchoke Mr. Sompong Phaoenchoke Ms. Kaewjai Phaoenchoke 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

42 Annual Report 2013

Thai Rung Union Car Public Company Limited

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 Companyâ&#x20AC;&#x2122;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 Shareholdersâ&#x20AC;&#x2122;â&#x20AC;&#x2122; 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. 4. 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. 5. Has not been appointed to represent a Director or major shareholder or other shareholder that is a related party to a major shareholder. 6. Does not have any other characteristic limiting his independence. 7. 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 fellow-subsidiaries 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. Meetings attended / Meetings held Audit & Corporate Governance Committee

Nomination and Remuneration Committee

Risk Manageme nt Committee

Attendance at Shareholder s’ Meetings

10/10

3/3

0/1

10/10

3/3

4/4

1/1

10/10

3/3

1/1

10/10

3/3

1/1

9/10

1/5

0/1

10/10

3/4

5/5

4/4

1/1

10/10

4/4

5/5

1/1

4/10

1/4

2/5

0/1

8/10

3/4

0/1

2/4

5/10 9/10

3/3

4/5

4/4

0/1

4/4

* Note: 1 Mr. Thavorn Chalassthien was appointed a Director to replace Mr Kavee Vasuvat who resigned from his position as Director effective 22 February 2013.

1.5 Company Administrators As at 31 December 2013 The Company’s Administrators as per the SEC definition were as follows: Name Position 1. Dr. Pranee Phaoenchoke President 2. Mr. Sompong Phaoenchoke Managing Director 3. Mr. Somchai Kirtitilaka Deputy Managing Director 4. Mr. Wuttichai Phaoenchoke Assistant Managing Director, Research & Development 5. Mr Sakchai Komgris Assistant Managing Director, Administration and Company Secretary General Manager for export sales 6. Mr. Lim Wee Ern

43 Annual Report 2013

1. Dr. Pranee Phaoenchoke 2. Mr. Sompong Phaoenchoke 3. Ms. Kaewjai Phaoenchoke 4. Mr. Wuttichai Phaoenchoke 5. Mr. Damri Tunshevavong* 6. Mr. Somkiat Nimrawee 7. Mr. Pricha Attavipach 8. Mr. Kavee Vasuvat 9. Mr. Suvait Theeravachirakul 10. Mr. Thavorn Chalassthien* 11. Mr. Sakchai Komgris (Secretary) 12. Mr. Phakkawat Suwanmajo

Executive Committee

Thai Rung Union Car Public Company Limited

Name

Company Board of Directors

44 Annual Report 2013

Thai Rung Union Car Public Company Limited

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. 1.6 Business dealings or professional services between Independent Directors and the Company During the year 2013 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. Nomination of Directors and Administrators 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

3. Directors’ and Administrators’ Remuneration 3.1 Monetary remuneration

45 Annual Report 2013

Thai Rung Union Car Public Company Limited

(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.

46 Annual Report 2013

Thai Rung Union Car Public Company Limited

(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 2013 a total of Bt. 5,630,000. Details are as follows: 2013 2012 Director’s Name (Baht) (Baht) 1. Dr. Pranee Phaoenchoke 820,000 940,000 2. Mr. Sompong Phaoenchoke 710,000 780,000 3. Ms. Kaewjai Phaoenchoke 650,000 635,000 4. Mr. Wuttichai Phaoenchoke 620,000 600,000 5. Mr. Pricha Attavipach 815,000 835,000 6. Mr. Suvait Theeravachirakul 490,000 530,000 7. Mr. Somkiat Nimrawee 525,000 530,000 8. Mr. Damri Tunshevavong 510,000 430,000 9. Mr. Thavorn Chalassthien 440,000 10.Mr. Kavee Vasuvat 50,000 545,000 11.Mr. Anthony Farquhar McDonald 20,000 Total 5,630,000 5,845,000

* 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. Mr. Thavorn Chalassthien was appointed a Director to replace Mr. Kavee Vasuvat, who resigned from his position as Director effective 22 February 2013.

(b) Administrators (excluding Directors)

Salaries* Annual remuneration* Living Allowances Company Secretary’s position allowance Total

2013 2012 Number of Total Amount Number of Total Amount persons (Baht) persons (Baht) 7 15,408,816 8/2 15,982,792 /2 8 5,413,405 7 643,022 8/2 619,431 1 84,000 1 84,000 22,099,628

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 Companyâ&#x20AC;&#x2122;s Board of Directors.

2. One Administrator took up his position on March 2012 and one administrator retired on October 2012

3.2 Non-monetary remuneration (a) Directors None (b) Administrators Company car

Record of dividend payments to shareholders Unit: Baht Year EPS Dividend per share Dividend payout ratio (%)

2009 (0.22) (passed) -

2010 0.38 0.25 66.05

2011 0.38 0.25 66.10

2012 1.13 0.60 53.15

2013* 0.72 0.40 55.68

Note: *The dividend for 2013 is subject to approval by the Annual General Meeting of Shareholders

(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.

Annual Report 2013

ď&#x201A;§ 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.

Thai Rung Union Car Public Company Limited

48 Annual Report 2013

Thai Rung Union Car Public Company Limited

ď&#x201A;§ Auditorsâ&#x20AC;&#x2122; Remuneration a) Audit fees Audit fees paid to ANS Audit Co Ltd by the Company and its subsidiaries in 2013 were as follows, with comparative figures for 2012. Baht Company 2013 2012 Thai Rung Union Car Plc. 1,030,000 592,800 Thai V.P. Auto Service Co Ltd 213,000 235,000 Thai Rung Tools and Dies Co Ltd 205,000 205,200 Thai Auto Pressparts Co Ltd 402,000 270,000 Thai Ultimate Car Co Ltd 205,000 361,000 Total 2,100,000 1,664,000 b) Non-audit fees Non-audit fees paid to ANS Audit Co Ltd by the Company and its subsidiaries in 2013 were as follows, with comparative figures for 2012. Baht Item Payer 2013 2012 94,310 76,516 Company * Other service charges Other service charges

Special service fees in accordance with BOI instructions Total Notes

Subsidiaries

215,398

118,100

Thai Auto Pressparts Co Ltd

50,000

41,600

359,708

236,216

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

Related Party Transactions Related Party Transactions

(1) Related Party Transaction with entities having a possible conflict of interest Transactions during the past year with parties having possible conflicts of interest

Isuzu Chaicharoenkij Motor Co Ltd

Isuzu dealer Sale of spare parts After-sales service

V.P. Auto Enterprise Co Ltd

Ford dealer Sale of spare parts After sales service

VPK Auto Co Ltd

Thai V.P. Corporation Co Ltd

Ford dealer Sale of spare parts After sales service Vehicle rental

Phothiphoom Co Ltd V.P. Capital Asset Co Ltd Lexus Auto City Co Ltd

Real estate Real estate Lexus dealer

Biz Motors Co Ltd

Mazda dealer

Thai Rung Group Related Party Transactions 2013 Counterparty TRU, TVS, TUC, TAP Purchase of spares, vehicle repairs Repair vehicle and services Cost of leasing land Vehicle rental TVS, TUC Purchase of spares, vehicle repairs Repair vehicle and services Sale of goods Income from rental of land and showroom Income from administartion fees Income from utility charges and administartion fees Interest income TRU Income from administartion fees

Balance sheet item 0.06 0.93 1.13 6.35 6.81 0.01 0.01 0.24 0.06 0.83 0.17 0.02

Trade debtors Trade creditors Other creditors

1.45 0.00 0.22

Trade debtors Trade creditors

0.11 1.54

Trade creditors

0.01

TRU, TRT, TAP, TVS Vehicle rental Sale of goods Income from rental of land and showroom Income from administartion fees Income from utility charges and administartion fees Interest income TUC Cost of leasing land TRU Interest income TRU,TVS,TUC Repair vehicle and services Interest income TRU Repair vehicle and services

2.81 0.06 0.60 0.04 0.21 0.19 1.20 0.15 0.16 0.03 0.01

Trade debtors Other debtors Other creditors

0.08 0.05 1.38

Other creditors Other creditors Trade debtors Other creditors

0.10 0.01 0.32 0.02 -

Note Thai Rung Tools and Dies Co. Ltd. Thai Auto Pressparts Co. Ltd.

TRT TAP

Thai V.P. Auto Service Co. Ltd. Thai Ultimate Car Co. Ltd.

TVS TUC

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%.

49 Annual Report 2013

Main type of Business

Thai Rung Union Car Public Company Limited

Related company

(Baht millions)

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

Directorship held in Related Companies

Annual Report 2013

Thai Rung Union Car Public Company Limited

Phaoenchoke ICCK TVP Others Dr. Pranee Mr. Sompong Ms.Kaewjai Mr. Wuttichai group Isuzu Chaicharoenkij Motors Co., Ltd. 100.00% C D D D,MD V.P. Auto Enterprise Co., Ltd. 0.20% 99.80% C D D,MD D VPK Auto Co., Ltd. 0.00% 82.00% 18.00% C D,MD Thai V.P. Corporation Ltd 100.00% C D D,MD D Phothiphoom Co., Ltd. 100.00% C D D D,MD V.P. Capital Assets Co., Ltd. 100.00% C D D D,MD Lexus Auto City Co., Ltd. 96.67% 3.33% C D D,MD D Biz Motors Co., Ltd. 100.00% C D D,MD D 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

(2) Necessity and Propriety of Related Party Transactions 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. 4. Interest of loans to related companies is charged at the average of the five major commercial banksâ&#x20AC;&#x2122; one-year fixed deposit rates plus 1%. 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 armâ&#x20AC;&#x2122;s-length prices and on similar terms to those applied to non-related parties. The non-

51 Annual Report 2013

Thai Rung Union Car Public Company Limited

executive Directors’ opinion does not differ in any respect from the relevant resolutions of the Board of Directors. (3) Policy and approach with regard to future Related Party Transactions 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.

Corporate Governance 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.

52 Annual Report 2013

Thai Rung Union Car Public Company Limited

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 this the Company was assessed as ‘Excellent’ for the sixth year running in the joint SEC-TIA (Thai Investors Association) ‘AGM check-list’ and as ‘Very Good’ for the fifth year in a row by the Thai Institute of Directors’ ‘Corporate Governance Report of Thai Listed Companies 2013.’ 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, customers, trading partners, competitors, joint venture partners, the public and the environment. 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. The Company strives to combat corruption and to raise employees’ awareness and ensure that they all perform their duties transparently and with integrity. (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. 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 functions, 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 and Corporate Governance 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 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 and Corporate Governance 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. 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.

Annual Report 2013

(4) Control and Management of Risk

53 Thai Rung Union Car Public Company Limited

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.

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.

Annual Report 2013

Thai Rung Union Car Public Company Limited

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. 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 a copy of these reports to the Company’s Board of Directors every time there is a change, and that shareholdings of Directors and Administrators must 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 is confident that its employees constitute the organisation’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 individuals’ 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 has proper systems in place for selecting trading partners and contractors and 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. Joint venture Partners The Company respects the rights of its joint venture partners, deals with them fairly in all respects and cooperates fully with a view to ensuring that the joint venture achieves its objectives. 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 Company’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.

Annual Report 2013

Employees

55 Thai Rung Union Car Public Company Limited

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.

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 strives to combat corruption and to raise employees’ awareness and ensure that they all perform their duties transparently and with integrity.

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Thai Rung Union Car Public Company Limited

6. 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 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. 7. Any stakeholder wishing to report anything or to register a complaint can do so by contacting the Company’s Audit and Corporate Governance Committee direct: Internal Audit Dept., tel. 0-2420-0076 ext. 387, e-mail auditcommittee@thairung.co.th The Company protects the anonymity of informants and complainants: the Audit and Corporate Governance Committee investigates the information or complaint and reports direct to the Board for appropriate action to be decided on. 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 1 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. 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.

1.2 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. The Company Secretary must be a person whom the Board find suitable, with the necessary legal knowledge and competence and the ability to conduct corporate secretarial matters in accordance with the law, Articles of Association and other relevant regulations and to take responsibility for taking care of corporate governance matters. 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 2.1The 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.)

57 Annual Report 2013

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). Every independent director must be appropriately qualified in a branch of professional activity that is relevant to the conduct of the Company’s business.

Thai Rung Union Car Public Company Limited

1. Structure of Company’s Board of Directors

2.2The 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. 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 and Corporate Governance Committee.

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Thai Rung Union Car Public Company Limited

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 and Corporate Governance Committee. (For details please refer to Internal Control.) 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 total number of meetings not to be fewer than six during the year. 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 greatimportance 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.

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 2012 was “Good” (Total score 3.53 out of 4, up by 4% from 2011) 6. Remuneration

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. Name

Course

1. Mr. Sompong Phaoenchoke

Director Certification Program 26/2003

2. Ms. Kaewjai Phaoenchoke

Director Certification Program 29/2003

3. Mr. Somkiat Nimrawee

Director Accreditation Program 10/2004

4. Mr. Pricha Attavipach

Director Certification Program 39/2004 Finance for Non-Finance Directors 8/2004

5. Mr. Suvait Theeravachirakul

Director Certification Program 9/2001 Audit Committee Program 15/2006

6. Mr. Kavee 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

7. Mr Damri 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 2013

7. Development of Directors and Administrators

59 Thai Rung Union Car Public Company Limited

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.)

7.2 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 of internal information

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.

Annual Report 2013

Thai Rung Union Car Public Company Limited

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 Company’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 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. Additionally, the Company’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 shareholder

Internal Control

From Board Meetings during 2013 which were attended by all members of the Audit and Corporate Governance Committee, the Company’s Board of Directors and the Audit and Corporate Governance Committee are of the opinion that the Company’s internal control systems are adequate and appropriate. The following is a summary. Organizational Control and Environmental Measures The Company has clear business objectives with ongoing assessment of results, and has adapted its organisational structure to bring it into line with the growing volumes of business so as to support management and enable it to work efficiently.

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 analyzing 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. 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 Company’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 management’s work 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 Company’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 2013

Risk Management

61 Thai Rung Union Car Public Company Limited

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 Company’s reputation or interests.

Report of the Audit and Corporate Governance Committee Report of the Audit and Corporate Governance Committee In 2012, The Audit and Corporate Governance Committee carried out its duties as assigned by the Company’s Board of Directors and in accordance with the Committee’s Regulations, notably examination of the Company’s financial statements, its corporate governance, its risk assessment and management systems and internal control and audit systems and anti-corruption measures, as well as proposing the appointment of auditors for 2013. The Committee met four times during 2013, all its members being present on each occasion. The main activities can be summarised as follows: 1. Examination of financial reporting systems

62 Annual Report 2013

Thai Rung Union Car Public Company Limited

Having examined the Company’s consolidated quarterly and annual financial statements for 2013, which were drawn up in accordance with financial reporting standards, focusing on the most important items as well as non-recurring items, and having received assurances from the auditors, the head of the accounting department and senior management that they had been prepared in accordance with the provisions of the law and with financial reporting standards and regarding the adequacy of information disclosed in the notes thereto, the Audit and Corporate Governance Committee approved said financial statements. Apart from this, the Committee also met with the Company’s auditors, without the presence of company officers, to confer independently on major points relating to the preparation of the financial statements and the disclosure of information in accordance with financial reporting standards and so as to be of benefit to users of the financial statements, and on any questionable conduct. In 2013 the auditors made no material observations and detected no questionable conduct that might be expected to have a material effect on the preparation, reliability, transparency or auditability of the Company’s financial statements or the consolidated financial statements of the group. 2. Examination of the Company’s corporate governance The Committee was able to confirm that the Company’s management and employees conducted its business in strict compliance with ethical principles and principles of good corporate governance, and the Board of Directors consistently promoted employee awareness of the importance ethical practices at every level. Additionally, it confirmed that the Company complied strictly with the regulations of the SEC and the SET and with applicable legislation, particularly as regards related party transactions or transactions likely to involve a conflict of interest, Directors’ related party transactions and timely and accurate reporting to the SET. 3. Examination of the Company’s risk assessment and management systems The Committee examined the Company’s risk assessment and management systems, considering both internal and external risk factors, probability, impact and measures for controlling risks at acceptable levels. Major risks in 2013 were paint-related atmospheric pollution and odour arising from the production process, factory waste water quality and waste water disposal, any of which three risks could bring business to a halt. However, management had assessed these risks in advance, and managed them by taking preventive measures to cope with any situation that might arise, including the establishment of a plan to improve the production process and the setting up of a working team to control these risks and report on a regular quarterly basis to the Risk Management Committee.

4. Examination of the Company’s internal control and internal audit systems The Committee examined the Internal Audit Department’s quarterly evaluation reports on the Company’s internal control systems, which it found to be appropriate to the Company’s business, without detecting any significant omissions or defects likely to affect the Company’s financial statements. As regards internal audit, the Committee examined the activities of the internal audit department by reference to the approved annual working plan and found that it had attained its objectives and key performance indicators, and also examined the appropriateness of the organisational structure and adequacy of manpower of the internal control and audit functions, finding them in accordance with internal auditing standards, and confirming that the internal audit department attaches appropriate importance to developing its human and physical resources to international professional internal auditing standards.

In 2013 there were three denunciations, two of which came under the heading of dishonest practices or corruption. These were investigated, found not to be material, and reported to management for consideration of additional protective measures. 6. Proposed appointment of auditors for 2013 and establishment of auditors’ remuneration The Committee proposed to the Board of Directors that ANS Audit Co., Ltd. be appointed as the Company’s auditors. The Audit and Corporate Governance 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.1.03 million for the year. (2012: Bt.0.59 million). In conclusion the Audit and Corporate Governance Committee carried out its duties as assigned by the Company’s Board of Directors and in accordance with its charter, and is of the opinion that the Company reports its financial and business information accurately, in a transparent and reliable manner, conducts its business in accordance with principles of good corporate governance, has risk assessment and management systems and adequate and appropriate internal control systems in place.

Pricha Attavipach Chairman of the Audit and Corporate Governance Committee

Annual Report 2013

The Committee examined the quarterly inspection reports on corruption and the measures and guidelines in place to prevent corruption in the various working systems so as to ensure that they were in accordance with risk assessment standards and the latest investigative systems and constantly appropriate to the Company’s business situation at any given time.

63 Thai Rung Union Car Public Company Limited

5. Examination of the Company’s anti-corruption procedures

Nomination and Remuneration Committee’s Report

64 Annual Report 2013

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 2013 the Nomination and Remuneration Committee met to consider the following matters 1. Establishment of remuneration for the year 2013 and monthly remuneration for 2014 for the President and the Managing Director 2. Establishment of remuneration for the year 2013 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 2014 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 Companyâ&#x20AC;&#x2122;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 Companyâ&#x20AC;&#x2122;s principles of good corporate governance.

65 Annual Report 2013

Thai Rung Union Car Public Company Limited

Pricha Attavipach Chairman of the Nomination and Remuneration Committee

Board of Directors’ Responsibility for Financial Reports Board of Directors’ Responsibility for Financial Reports 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.

66 Annual Report 2013

Thai Rung Union Car Public Company Limited

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 and Corporate Governance Committee consisting of non-executive directors, which is responsible for monitoring the quality of financial reports and internal control systems. The Audit and Corporate Governance Committee’s opinion on these matters appears in the Report of the Audit and Corporate Governance 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

Management’s Discussion and Analysis Management’s Discussion and Analysis (Based on Consolidated Financial Statements as at 31 December 2013)

Thai Rung Union Car Plc posted consolidated revenues of Bt.3,375 million for 2013, down by 11%, and net income attributable to owners of the parent company of Bt.354 million, down by 36% on 2012, due to a decrease in revenues from contract vehicle assembly and painting, which have different margins in the product mix, as result of which the ratio of cost of sales to sales revenues increased compared with the previous year. The return on assets (ROA) was 11.2%, down from the previous year’s figure of 8.7%, and return on equity (ROE) was 11.7%, down from the previous year’s 8.3% due to lower profit as a proportion of revenue and higher capital expenditure. In any case the Company’s strategy continues to focus on boosting revenue from OEM parts making and contract assembly and painting work, which together currently account for approximately 85% of consolidated revenues. In addition, the Company has a strategy of expanding its customer business base to take in other sectors such as industrial, construction and agricultural machinery and premium grade motorcycles, a high added value niche market and expanding the market for multi-purposes vehicles to various regions worldwide, a market which looks set to grow in the future, in order to reduce the risks associated with its dependence on a single industry. The Company also continues to seek commercial partners to expand its existing business and introduce new business lines so as to develop the potential market for the Company’s new products. For example there is a plan to expand the Company’s truck body assembly business through a joint venture with a truck company from Japan – a new brand that has yet to enter the Thai market. This is against the background of continuing high demand in the truck market together with the coming into force of the AEC in 2015 which

67 Annual Report 2013

Thai Rung Union Car Public Company Limited

In 2013, the Thai automotive industry produced fewer vehicles than had been forecast, due to the end of the government’s “first car” excise tax rebate scheme and the slowdown in the domestic market as a consequence of the economic situation and higher costs resulting from the increase in the legal minimum daily wage to Bt.300, fluctuating prices, the appreciation of the Thai baht and the depressed global economy, as well as fierce competition in the industry, both domestically and in the ASEAN region. However, both management and employees of the Company continued to work determinedly, with confidence in the Company’s solidity and many years of successful business experience, and established appropriate strategies to create opportunities for expansion so as to enable the Company to overcome any obstacles that might arise.

will lead to increased transport requirements in the region, with trucks and trailers playing a greater role in industry. Apart from this the Company also has opportunities of winning parts making orders for Chinese, Korean and Indian automakers which are increasingly setting up production bases in Thailand. Financial results Revenues In 2013, total consolidated revenues for the year 2013 amounted to Bt.3,374.81 million, representing a decrease of Bt.406.03 million or 11% on the previous year, as follows:

68 Annual Report 2013

Thai Rung Union Car Public Company Limited

Revenue

2012 Increase ( Decrease) 2013 Million Bt % Million Bt % Million Bt % Revenue from vehicle assembly and other vehicle-related contract wor 2,045.54 61% 2,100.68 56% (55.14) -3% Revenue from the production of vehicle manufacturing equipment 984.71 34% 1,280.34 34% (295.63) -23% Revenue from sales of vehicles and from service centres 108% 3% 118.56 3% (10.51) -9% Total revenue from Sales & service 3,138.30 93% 3,499.58 93% (361.28) -10% Other Income 180.74 5% 202.72 5% (21.98) -11% Profit sharing from associated company 55.77 2% 78.54 2% (22.77) -29% Total Revenes 3,374.81 100% 3,780.84 100% (406.03) -11%

Share in profits from investments in associates Share in profits from investments in joint venture companies, at Bt.56 million, was down by Bt.23 million or 29% on 2012, reflecting the general downturn in the automotive industry, to which the joint venture companies belong and for which they make equipment such as window regulators and seats. Cost of sales; expenses Consolidated cost of sales and service for the year, at Bt.2,630 million, was down by Bt.203 million or 7% compared with the previous year. As a proportion of sales and service revenue for the year, the cost of sales and service was 84%, compared with 81% in the previous year, the increase being due to a fall in revenue from contract assembly and painting work, which have different profit margins in the product mix, as a result of which fixed costs were a higher proportion of total cost of sales than in the previous year. At the same time, selling and administrative expenses for 2013 amounted to Bt.325 million, up by Bt.61 million or 23% on the previous year, mainly due to a partial reversal of a provision for dead stock in a subsidiary company.

Net income The Company posted a net profit of Bt.353 million for 2013, representing 11% of sales and service revenue and an decrease of Bt.202 million or 36% on the previous yearâ&#x20AC;&#x2122;s result, due to lower gross margins as a result of different margins on items of the product mix and differing production costs, as well as higher selling and administrative expenses. 2. Analysis of Consolidated Balance Sheet as at 31 December 2013 compared with 31 December 2012

Consolidated Balance Sheet Assets Current assets Investments in associates Investment property, net Property, plant & equipment, net Other non-current assets, net Non-current assets Total Assets Liabilities and Equity Current liabilities Non-current liabilities Total Liabilities

THB millions 31 Dec. 2013 1,088 287 239 1,821 198 2,544

31 Dec. 2012 1,751 245 243 1,428 195 2,111

Change (663) 42 (5) 393 3 434

% -38% 17% -2% 28% 2% 21%

3,632

3,862

(230)

-6%

406 73 479

725 47 773

(319) 26 (293)

-44% 55% -38%

69 Annual Report 2013

Thai Rung Union Car Public Company Limited

The financial position of the Company and its subsidiaries as at 31 December 2013 and 2012 is shown in the following table.

Equity Attributable to owners of the parent company Non-controlling interests Total Equity

3,053 100 3,153 3,153

2,995 95 3,089 3,089

58 5 64 64

2% 6% 2% 2%

Total Liabilities and Equity

3,632

3,862

(230)

-6%

Annual Report 2013

Thai Rung Union Car Public Company Limited

Assets Total consolidated assets as at 31 December 2013 and 31 December 2012 stood at Bt.3,632 million and Bt.3,862 million respectively, representing a decrease of Bt.230 million or 6%, due mainly to the decrease in current assets, notably trade and other receivables which were down by Bt.663 million. Gross inventories of Bt.242.8 million, less an impairment provision of Bt.38.4 million, giving a net balance of Bt.204.3 million as at 31 December 2013, representing a 14.1% decrease from the previous year in line with lower sales, are shown under current assets. Other non-current assets include a deposit of Bt.66.5 million on a land purchase agreement payable in instalments for a contract value of Bt.133.1 million, the remainder being due at the end of May 2014. Liabilities Total consolidated liabilities as at 31 December 2013 and 31 December 2012 stood at Bt.479 million and Bt.773 million respectively, representing a decrease of Bt.293 million or 38%, mainly due to a decrease of Bt.319 million in current liabilities (trade payables paid as they fell due, and lower production), while noncurrent liabilities increased by Bt.26 million. Equity Consolidated equity as at 31 December 2012 and 31 December 2011 stood at Bt.3,089 million and Bt.2,642 million respectively, representing an increase of Bt.447 million 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. Cash flow statement

The Companyâ&#x20AC;&#x2122;s consolidated cash situation for the year ended 31 December 2013 showed a net decrease of Bt.233 million, with a year-end cash position of Bt.298 million. THB millions

Annual Report 2013

Net cash from operating activities of Bt.590 million came mainly from collection of trade receivables. Net cash used in investing activities was Bt.520 million, consisting mainly of capital expenditure on new machinery and equipment, and also to the purchase of land for the future construction of a new factory. Net cash used in financing activities, Bt.304 million, relates mainly to the payment of a Bt.295 million dividend to shareholders.

71 Thai Rung Union Car Public Company Limited

Net cash from operating activities Net cash used in investing activities Net cash used in financing activities Net increase (decrease) in cash & cash equivalents in the period Cash & cash equivalents at start of period Cash & cash equivalents at end of period

Auditor’s Report AUDITOR’S REPORT

To the Board of Directors and Shareholders of Thai Rung Union Car Public Company Limited

72 Annual Report 2013

Thai Rung Union Car Public Company Limited

I have audited the accompanying consolidated financial statements of Thai Rung Union Car Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at December 31, 2013, and the consolidated statement of comprehensive income, statement of changes in shareholders’ equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information. I have also audited the accompanying separate financial statements of Thai Rung Union Car Public Company Limited which comprise the separate statement of financial position as at December 31, 2013, and the separate statement of comprehensive income, statement of changes in shareholders’ equity and statement 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.

Atipong Atipongsakul Certified Public Accountant Atipong Atipongsakul Registration Number 3500 Certified Public Accountant Registration Number 3500 ANS Audit Company Limited Bangkok, 2014 ANS AuditFebruary Company25,Limited Bangkok, February 25, 2014

73 Annual Report 2013

Thai Rung Union Car Public Company Limited

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit Iopinion. believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified audit opinion. Basis for Qualified Opinion Basis for Qualified Opinion The Company’s consolidated financial statements as at December 31, 2013, and for the year then ended, included investments in three associated financial companiesstatements accountedasforatunder the equity methodand amounting million and The Company’s consolidated December 31, 2013, for the toyearBahtthen287.07 ended, included shares of profit from associated these companies amounting to Baht (as discussed in Note 8 to the investments in three companies accounted for 55.77 undermillion the equity method amounting Bahtfinancial 287.07 statements). million and These were recorded basedcompanies on financialamounting statementstoprepared by million the management of such associated which were shares of profit from these Baht 55.77 (as discussed in Note 8 to thecompanies, financial statements). not audited their auditors. These were by recorded based on financial statements prepared by the management of such associated companies, which were not audited by their auditors. Opinion Opinion In my opinion, except for the possible effects on the financial statements of the matter as mentioned in the basis for qualified opinionexcept paragraph, thepossible financialeffects statements referred to above presentoffairly, in all material respects, the basis financial In my opinion, for the on the financial statements the matter as mentioned in the for position ofopinion Thai paragraph, Rung UniontheCar Publicstatements Company referred Limitedtoand its present subsidiaries of material Thai Rung UniontheCarfinancial Public qualified financial above fairly,andin all respects, CompanyofLimited as at Union December 2013,Company and theirLimited financialandperformance and cash the year position Thai Rung Car 31, Public its subsidiaries and offlows ThaiforRung UnionthenCarended Publicin accordanceLimited with Thai Reporting Standards. Company as Financial at December 31, 2013, and their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards. Emphasis of Matter Emphasis of Matter ลายเซ็นต์์ภI าษาไทย draw an attention to Note 4 to financial statements which described the Company has transactions with its related parties. effects of thesetotransactions were reflected in thewhich financial statements on the basis the its Company the IThe draw an attention Note 4 to financial statements described the Company hasdetermined transactionsbywith related and parties. related partyofconcerned. Our opinion not qualified respect ofstatements this matter. The effects these transactions wereisreflected in theinfinancial on the basis determined by the Company and the related party concerned. Our opinion is not qualified in respect of this matter. Other Matter Other Matter The consolidated financial statements of Thai Rung Union Car Public Company Limited and its subsidiaries and separate financial statements of Thaistatements Rung Union Car Public Company for the year then ended 31,and 2012separate which The consolidated financial of Thai Rung Union Car Limited Public Company Limited and itsDecember subsidiaries have beenstatements presentedofherewith for comparative purposes were audited of ourDecember firm, whose dated financial Thai Rung Union Car Public Company Limitedbyforanother the yearauditor then ended 31, report 2012 which ลายเซ็นภภาษาอั ง กฤษ February 2013, expressed qualified opinionpurposes related towere investments three associated recorded have been22,presented herewithafor comparative audited byin another auditor ofcompanies our firm,were whose report based dated on financial which were not audited by related their auditors. February 22,statements 2013, expressed a qualified opinion to investments in three associated companies were recorded based on financial statements which were not audited by their auditors.

Statement Financial Position THAI RUNG UNION CARof PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

STATEMENT OF FINANCIAL POSITION Thai Union 31,Car2013Public Company Limited and Its Subsidiaries AS ATRung DECEMBER

As At December 31, 2013

Unit: Baht Notes

74 Annual Report 2013

Thai Rung Union Car Public Company Limited

ASSETS CURRENT ASSETS Cash and cash equivalents Trade and other receivables - net Unbilled receivable Short-term loans to related parties Inventories - net Total current assets NON-CURRENT ASSETS Investments in associated companies Investments in subsidiaries Other long-term investment - net Investment property - net Property, plant and equipment - net Intangible assets - net Deferred tax assets Other non-current assets - net Total non-current assets TOTAL ASSETS

5 4, 6 4 7

8 9 10 11 12 13 14

Consolidated financial statements 2013 2012

Separate financial statements 2013 2012

298,228,244 532,548,851 53,057,066 204,346,479 1,088,180,640

531,601,418 946,698,682 35,240,368 237,902,347 1,751,442,815

114,013,456 289,601,133 13,016,000 238,000,000 102,965,175 757,595,764

375,665,108 702,798,980 180,000,000 100,915,867 1,359,379,955

287,065,272 238,615,158 1,820,578,615 2,447,266 20,113,838 175,408,385 2,544,228,534 3,632,409,174

244,894,405 243,165,634 1,427,722,752 2,696,421 17,932,587 174,310,484 2,110,722,283 3,862,165,098

114,100,000 412,880,000 1,023,899,545 1,571,264 9,981,450 171,241,453 1,733,673,712 2,491,269,476

114,100,000 412,880,000 750,591,344 2,120,110 8,894,349 163,568,094 1,452,153,897 2,811,533,852

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

Statement Financial Position THAI RUNG UNION CARof PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

STATEMENT OF FINANCIAL POSITION Thai Union 31, Car2013Public Company Limited and Its Subsidiaries AS ATRung DECEMBER

As At December 31, 2013

Unit: Baht

395,184,050 9,631,108 1,192,363 406,007,521

677,039,222 2,501,047 45,783,285 725,323,554

327,611,525 6,383,170 20,000,000 1,192,363 355,187,058

626,634,340 45,783,285 672,417,625

13,550,311 3,411,842 56,409,366 73,371,519 479,379,040

851,545 3,261,683 43,233,956 47,347,184 772,670,738

8,258,374 1,127,571 35,455,067 44,841,012 400,028,070

1,157,398 27,805,547 28,962,945 701,380,570

793,326,495

793,326,495 524,996,497

524,996,497 492,372,797 -

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

492,372,797 -

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

713,782,739

727,144,000

713,782,739

727,144,000

52,499,649 16,793,902 1,777,385,882 3,052,834,969 100,195,165 3,153,030,134 3,632,409,174

52,499,649 16,793,902 47,950,454 1,696,539,449 2,994,566,497 94,927,863 3,089,494,360 3,862,165,098

52,499,649 832,586,221 2,091,241,406 2,091,241,406 2,491,269,476

52,499,649 47,950,454 828,920,136 2,110,153,282 2,110,153,282 2,811,533,852

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

75 Annual Report 2013

LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Trade and other payables 4, 16 Current portion of liabilities under finance leases 17 Short-term loans from related party 4 Current income tax payable Total current liabilities NON-CURRENT LIABILITIES Long-term liabilities under finance leases 17 Deferred tax liabilities 13 Employee benefit obligations 18 Total non-current liabilities TOTAL LIABILITIES SHAREHOLDERS' EQUITY Share capital 19, 20, 21 Authorized 793,326,495 ordinary shares, Baht 1 par value 524,996,497 ordinary shares, Baht 1 par value Issued and paid up 492,372,797 ordinary shares, Baht 1 per share 501,589,497 ordinary shares, Baht 1 par value Treasury shares Premium on shares Premium on ordinary shares Retained earnings Appropriated Legal reserve - the Company - Subsidiaries Treasury share reserve Unappropriated Total shareholders' equity of the Company Non-controlling interests TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

Separate financial statements 2013 2012

Thai Rung Union Car Public Company Limited

Notes

Consolidated financial statements 2013 2012

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES Statement of Comprehensive Income STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2013

Thai Rung Union Car Public Company Limited and Its Subsidiaries For the year ended December 31, 2013 Notes

76 Annual Report 2013

Thai Rung Union Car Public Company Limited

Revenues Sales of goods Rendering of services Total revenues Cost Cost of sales Cost of rendering of services Total cost Gross profit Dividend income Other income Selling expenses Adminstrative expenses Financing cost Share of profit from investments in associated companies Profit before income tax expenses Income tax expenses Profit for the year Other comprehensive income for the year Total comprehensive income for the year

4 2,398,460,289 739,841,080 3,138,301,369

2,479,432,641 1,020,143,939 3,499,576,580

1,404,120,251 575,495,310 1,979,615,561

1,323,171,626 847,852,858 2,171,024,484

(2,124,728,169) (505,213,922) (2,629,942,091) 508,359,278 180,740,197 (78,494,698) (246,761,017) (1,206,726) 55,767,861 (53,649,823) 364,755,072 364,755,072

(2,167,254,122) (665,783,275) (2,833,037,397) 666,539,183 202,720,961 (67,296,421) (196,977,701) (807,322) 78,543,329 682,722,029 (111,197,146) 571,524,883 571,524,883

(1,230,012,846) (374,747,289) (1,604,760,135) 374,855,426 98,196,995 83,736,973 (79,793,668) (159,773,411) (492,875) 316,729,440 (40,223,218) 276,506,222 276,506,222

(1,180,181,029) (450,895,144) (1,631,076,173) 539,948,311 50,728,712 114,198,660 (113,629,172) (147,259,835) (710,411) 443,276,265 (90,028,554) 353,247,711 353,247,711

353,686,570

555,789,082

276,506,222

353,247,711

11,068,502

15,735,801

364,755,072

571,524,883

0.72

1.13

0.56

0.72

492,372,797

4, 18, 23, 24

4, 8, 9 4, 8, 22 4, 18, 23, 24 4, 18, 23, 24 8 25

Profit attributable to Equity holders of the Company Non-controlling interests

Earnings per share Earnings per share Profit attributable to equity holders of the Company (Baht)

Unit: Baht Consolidated financial statements Separate financial statements 2013 2012 2013 2012

Weighted average number of ordinary shares (Shares)

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

Statement of Changes In Shareholderâ&#x20AC;&#x2122;s Equity THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY

Thai Rung Public31,Company Limited and Its Subsidiaries FOR THE YEARUnion ENDED Car DECEMBER 2013 For the year ended December 31, 2013 Unit: Baht Consolidated financial statements Equity attributable to equity holders of the Company Retained earnings

Balance as at December 31, 2012 Changes in equity for the year : Dividend paid by subsidiaries Dividend paid Share capital reduction from treasury shares cancellation Total comprehensive income for the year Balance as at December 31, 2013 Balance as at December 31, 2011 Changes in equity for the year : Dividend paid by subsidiary Dividend paid Total comprehensive income for the year Balance as at December 31, 2012

on ordinary

share capital 501,589,497

9 28 20

9 28

Treasury shares (47,950,454)

shares 727,144,000

Treasury share reserve

Statutory reserve The Company 52,499,649 -

Subsidiaries 16,793,902 -

The Company 47,950,454 -

Unappropriated

Total

Non-controlling

shareholder's

interests

equity

1,696,539,449

2,994,566,497

94,927,863

3,089,494,360

(295,418,098)

(5,801,200) -

(5,801,200) (295,418,098)

(9,216,700) 492,372,797

47,950,454 -

(13,361,261) 713,782,739

52,499,649

16,793,902

(47,950,454) -

22,577,961 353,686,570 1,777,385,882

353,686,570 3,052,834,969

11,068,502 100,195,165

364,755,072 3,153,030,134

501,589,497

(47,950,454)

727,144,000

52,499,649

16,793,902

47,950,454

1,263,840,816

2,561,867,864

80,212,062

2,642,079,926

501,589,497

(47,950,454)

727,144,000

52,499,649

16,793,902

47,950,454

(123,090,449) 555,789,082 1,696,539,449

(123,090,449) 555,789,082 2,994,566,497

(1,020,000) 15,735,801 94,927,863

(1,020,000) (123,090,449) 571,524,883 3,089,494,360

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

77 Annual Report 2013

Paid-up Notes

Total

Appropriated

Thai Rung Union Car Public Company Limited

Premium

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY (CONTINUE) FOR THE YEAR ENDED DECEMBER 31, 2013

Statement of Changes In Shareholderâ&#x20AC;&#x2122;s Equity (Continue) Thai Rung Union Car Public Company Limited and Its Subsidiaries For the year ended December 31, 2013

Unit: Baht Separate financial statements

Notes

78 Annual Report 2013

Thai Rung Union Car Public Company Limited

Balance as at December 31, 2012 Changes in equity for the year : Dividend paid Share capital reduction from treasury shares cancellation Total comprehensive income for the year Balance as at December 31, 2013 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

Paid-up share capital

Treasury shares

501,589,497 9 28 20

(47,950,454) -

Premium on ordinary shares 727,144,000 -

Retained earnings Appropriated statutory reserve Treasury share reserve Unappropriated 52,499,649 -

47,950,454 -

Total shareholder's equity

828,920,136

2,110,153,282

(295,418,098)

(9,216,700) 492,372,797

47,950,454 -

(13,361,261) 713,782,739

52,499,649

(47,950,454) -

22,577,961 276,506,222 832,586,221

276,506,222 2,091,241,406

501,589,497

(47,950,454)

727,144,000

52,499,649

47,950,454

598,762,874

1,879,996,020

501,589,497

(47,950,454)

727,144,000

52,499,649

47,950,454

(123,090,449) 353,247,711 828,920,136

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

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

Statement of Cash Flows

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CASH FLOWS FOR THERung YEAR Union ENDED DECEMBER 2013 Thai Car Public31,Company Limited and Its Subsidiaries

For the year ended December 31, 2013 Unit: Baht

418,404,895

682,722,029

316,729,440

443,276,265

4,695,209 (4,040,466) (55,767,861) 137,606,209 523,302 13,175,410 (3,054,935) (8,285,019) 1,206,726

278,206 (24,588,969) (78,543,329) (3,556,822) (9,317,766) 110,694,669 1,961,222 523,302 2,256,039 (5,101,568) 1,793,880 (3,697,080) (3,899,551) 807,322

(2,214,012) 56,832,571 7,649,520 (2,708,204) (98,196,995) (12,205,088) 492,875

278,206 (5,278,206) (9,317,766) 49,033,175 (798,457) 2,167,639 (15,600,300) (50,728,712) (10,892,283) 710,411

504,463,470

672,331,584

266,380,107

402,849,972

424,602,403 30,901,126 (17,816,698) 39,990,575

(623,296,606) (12,220,884) 308,445,891 (17,749,556)

421,153,692 (2,049,308) (13,016,000) 29,090,364

(486,066,700) 3,574,300 (9,254,585)

(285,569,754) 696,571,122 (1,206,726) 3,458,188 (108,337,435) 590,485,149

369,392,930 696,903,359 (807,322) 5,545,116 (924,550) (60,502,113) 640,214,490

(299,028,979) 402,529,876 (486,711) (85,931,068) 316,112,097

349,772,026 260,875,013 (710,411) 4,624,246 (263,500) (39,562,228) 224,963,120

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

79 Annual Report 2013

Cash flows from operating activities Net profit before income tax expenses Adjustments to reconcile net profit before tax to Net cash provided (used in) operating activities: Allowance for diminution in value of inventories Reversal 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 amortization Write-off investment property Amortisation of leasehold rights Provision for liabilities (Reversal) employee benefit expense Loss (gain) on sales of fixed assets Gain on sales of investment Dividend income Interest income Interest expense Profit from operating activities before changes in operating assets and liabilities Operating assets (increase) decrease Trade and other receivable -net Inventories Unbilled receivables Other non-current assets Operating 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

Separate financial statements 2013 2012

Thai Rung Union Car Public Company Limited

Consolidated financial statements 2013 2012

Statement of Cash Flows

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CASH FLOWS FORThai THERung YEAR ENDED 2013 Union DECEMBER Car Public31,Company Limited and Its Subsidiaries

For the year ended December 31, 2013 Unit: Baht Consolidated financial statements 2013 2012

80 Annual Report 2013

Thai Rung Union Car Public Company Limited

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 company and subsidiary companies Acquisition of fixed assets and intangible assets Land deposit 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 fianancial institution Payment on short-term loans from fianancial institution 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 years Cash and cash equivalents at end of years

Separate financial statements 2013 2012

(124,000,000) 124,000,000 2,008,106 8,357,704 13,596,995 (477,390,471) (66,529,625) (519,957,291)

7,393,625 3,841,558 34,748,712 (227,829,659) (19,000,000) 23,050,300 (177,795,464)

(815,000,000) 757,000,000 3,021,636 15,015,145 98,196,995 (294,049,802) (66,529,625) (302,345,651)

(447,000,000) 622,500,000 6,474,224 10,096,183 50,728,712 (81,530,133) (19,000,000) 23,050,300 165,319,286

130,000,000 (130,000,000) (2,681,734) (295,418,098) (5,801,200) (303,901,032) (233,373,174) 531,601,418 298,228,244

(2,402,250) (123,090,449) (1,020,000) (126,512,699) 335,906,327 195,695,091 531,601,418

130,000,000 (130,000,000) 50,000,000 (30,000,000) (295,418,098) (275,418,098) (261,651,652) 375,665,108 114,013,456

20,000,000 (20,000,000) (123,090,449) (123,090,449) 267,191,957 108,473,151 375,665,108

22,510,561 19,000,000 3,714,579

3,352,592 -

14,641,543 19,000,000 -

Supplemental cash flow information Non-cash transactions Vehicle obtained under hire purchase agreement Transfer deposit for purchasing of fixed assets to fixed assets Increase in payable for purchasing of fixed assets

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

Notes Consolidated Financial THAI RUNGto UNION CAR PUBLIC COMPANY LIMITED ANDStatements ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Thai Rung Union Car Public Company Limited and Its Subsidiaries FOR THE YEAR ENDED DECEMBER 31, 2013 For the year ended December 31, 2013 1. GENERAL INFORMATION

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 and the following subsidiary companies (together referred to as the “Group”)

Annual Report 2013

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

81 Thai Rung Union Car Public Company Limited

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.

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

82 Annual Report 2013

Thai Rung Union Car Public Company Limited

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 2013 2012 Percent Percent

Thailand

Thailand Thailand

94 91

Thailand

99.53

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. Adoption of new and revised TFRS The Federation of Accounting Professions issued Thai Accounting Standards (“TAS”), Thai Financial Reporting Standard (“TFRS”), Thai Interpretations (“TI”) and Accounting Guidance which are effective for fiscal years beginning on or after January 1, 2013 as follows: TAS/TFRS/TI/FAP’s Announcement TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) TFRS 8 TI 10 TI 21

Topic

Income Taxes Accounting for Government Grants and Disclosures of Government Assistance The Effects of Changes in Foreign Exchange Rate Operating Segments Government Assistance – No Specific Relation to Operating Activities Income Taxes – Recovery of Revalued Non-Depreciable Assets 11

TAS/TFRS/TI/FAP’s Announcement TI 25 No. 34/2555

Topic Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders Accounting Guidance for Transfer and Transferred of Financial Assets

New and revised Thai Financial Reporting Standards not yet effective The Company has not yet adopted the new and revised Thai Financial Reporting Standards as follows:

83 Annual Report 2013

Thai Accounting Standards (“TAS”), Thai Financial Reporting Standards (“TFRS”), Thai Financial Reporting Interpretation (“TFRI”) and Thai Interpretation (“TI”) which are effective for the financial statements for the period beginning on or after January 1, 2014 as follows: TAS/TFRS/TFRI/TI Topic TAS 1 (revised 2012) Presentation of Financial Statements TAS 7 (revised 2012) Statement of Cash Flows TAS 12 (revised 2012) Income Taxes TAS 17 (revised 2012) Leases TAS 18 (revised 2012) Revenue TAS 19 (revised 2012) Employee Benefits TAS 21 (revised 2012) The Effects of Changes in Foreign Exchange Rate TAS 24 (revised 2012) Related Party Disclosures TAS 28 (revised 2012) Investments in Associates TAS 31 (revised 2012) Interests in Joint Venture TAS 34 (revised 2012) Interim Financial Reporting TAS 38 (revised 2012) Intangible assets TFRS 2 (revised 2012) Share-based Payment TFRS 3 (revised 2012) Business Combinations TFRS 5 (revised 2012) Non-current Assets Held for Sale and Discontinued Operations TFRS 8 (revised 2012) Operating Segments TFRI 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities TFRI 4 Determining whether an Arrangement contains a Lease TFRI 5 Rights to Interests arising from Decommission, Restoration and Environmental Rehabilitation Funds TFRI 7 Applying the Restatement Approach under TAS 29 Financial Reporting in Hyperinflationary Economies TFRI 10 Interim Financial Reporting and Impairment

Thai Rung Union Car Public Company Limited

TFRI 12 TFRI 13 TFRI 17 TFRI 18 TI 15 TI 27

TAS/TFRS/TFRI/TI

TI 29 TI 32

Topic

Service Concession Arrangements Customer Loyalty Programmes Distributions of Non-cash Assets to Owners Transfers of Assets from Customers Operating Leases-Incentives Evaluating the Substance of Transactions Involving the Legal Form of a Lease Disclosure-Service Concession Arrangements Intangible Assets-Web Site Costs

Annual Report 2013

Thai Rung Union Car Public Company Limited

The management of the Company is assessing the impacts of these standards and interpretations on the financial statements for the year in which they are initially applied. b)

Thai Financial Reporting Standard (TFRS) which is effective for the financial statements for the period beginning on or after January 1, 2016 as follows: Topic TFRS TFRS 4 Insurance Contracts The management of the Company is assessing the impacts of this standard on the financial statements for the year in which it is 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 shortterm 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. 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 13

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.

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). Depreciation Depreciation is computed by the straightâ&#x20AC;&#x201C;line method based on the useful lives of assets of 30 years or, if shorter, over the remaining period of the lease. Depreciation is included in determining operating result and no depreciation is provided on land and property in progress. Repairs and maintenance are charged in profit or loss 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.

Annual Report 2013

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.

85 Thai Rung Union Car Public Company Limited

Allowance for diminution in value of inventories is recorded by considering old, slow-moving and obsolete inventories.

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).

86 Annual Report 2013

Thai Rung Union Car Public Company Limited

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 Group 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 capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the profit or loss. Subsequent costs The cost of replacing a part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Depreciation Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value. 15

No depreciation is provided on land or assets under construction. Depreciation 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. Amortization of land leasehold rights is calculated by reference to their costs on a straight-line basis over the periods of lease agreements. Amortization is included in determining income. Intangible assets Research and development Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes. Development 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 Group 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. Other development expenditure is recognised in profit or loss as incurred. 16

87 Annual Report 2013

Thai Rung Union Car Public Company Limited

Depreciation 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: Depreciation method Useful life (years) Land improvement Straight-line method 20 Factory and building improvement Straight-line method 5 - 20 Office buildings and building improvement Straight-line method 30 Machinery, factory equipment and tools Straight-line method 5 - 20 (excluded molds and jigs) Machinery, factory equipment and tools Declining method 5 acquired before 1999 and molds and jigs (Double declining method) Office equipment acquired before July 2007 Declining method 5 (Double declining method) Office equipment Straight-line method 5 Motor vehicles acquired before July 2007 Declining method 5 (Double declining method) Motor vehicles Straight-line method 5

Other intangible assets Intangible assets that are acquired are stated at cost less accumulated amortisation and losses on decline in value. Amortization

Amortization 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: Amortization method Useful life (years) Software Straight-line method 5

Annual Report 2013

Thai Rung Union Car Public Company Limited

Impairment The carrying amounts of the Groupâ&#x20AC;&#x2122;s 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. An 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. Employee benefits Short-term benefits The Group recognize salaries, wages, bonus and social security contribution as expenses on an accrual basis. Post-employment benefits - defined contribution plan The Group has 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 in profit or loss in the period to which they relate. Post-employment benefits - defined benefit plan 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 Unit Credit Method. 17

When the employee benefits are improved, the portion of the increased benefit relating to past service rendered by employee is recognized in profit or loss on a straight-line basis over the average period until the benefits become vested. When the actuarial assumptions are changed, the Group recognize actuarial gains or losses in the profit or loss in the period in which they arise. Provisions

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. An 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 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. Surpluses 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. Revenue Revenue excludes value added taxes and is arrived at after deduction of trade discounts and volume rebates. Sale of goods and services rendered Revenue is recognised in profit or loss when the significant risks and rewards of ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service revenue is recognised when services have been rendered taking into account the stage of completion. Rental income Rental 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.

Annual Report 2013

Treasury shares

89 Thai Rung Union Car Public Company Limited

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

Dividend income Dividend income is recognised in profit or loss on the date the Groupâ&#x20AC;&#x2122;s right to receive payments is established. Interest income Interest income is recognised in profit or loss as it accrues. Lease payment Payments made operating leases are recognised in profit or loss on a straight line basis over the term of the lease. Income tax

90 Annual Report 2013

Thai Rung Union Car Public Company Limited

Income 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. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Deferred 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. In determining the amount of current and deferred tax, the Group take into account the impact of uncertain tax positions and whether additional taxes and interest may be due. The Group 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. New information may become available that causes the Group 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. Deferred 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. A 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. Deferred 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. Earnings per share The Company and its subsidiaries presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS 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. 19

Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss.

Related parties are those parties linked to the Group and the Company as shareholders or by common 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. 4.1 Significant transactions for the years ended December 31, 2013 and 2012 with related parties and director were as follows: Unit: Million Baht Consolidated Separate financial statements financial statements 2013 2012 2013 2012 Transactions with subsidiaries Purchases of goods and services Purchases of fixed assets Electricity expense Transportation expense Management fee Credit note for management fee Commission and promotion expenses Fines from damaged delivery Sales of goods Sales of oil Land and office rental income Management service income Consulting income Service income Utilities, transportation income and sales of supplies

 40 28

21 65 (21) 4        

Transfer pricing policy

204 Cost plus margin 10 As agreed without contract 31 Cost and cost plus gross profit margin not more than 5% 37 As agreed without contract 79 Contract price - As agreed credit note 2 Contract price - Contract price 46 Cost plus margin 11 Cost plus margin 4 Contract price 5 Contract price - As agreement 5 As agreement 5 Cost plus margin

Annual Report 2013

4. RELATED PARTY TRANSACTIONS

91 Thai Rung Union Car Public Company Limited

Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions.

Dividend income Interest income

Transactions with associated companies Purchases of goods and services Purchases of fixed assets Sales of goods Management service income

Annual Report 2013

Thai Rung Union Car Public Company Limited

Dividend income Transactions with related companies Purchases of goods and services Vehicles maintenance expense Land rental expense and amortisation of leasehold rights Car rental expense Sales of goods Land and showroom rental income Service income Utilities, transportation income and sales of supplies Interest income

Unit: Million Baht Consolidated Separate financial statements financial statements Transfer pricing policy 2013 2012 2013 2012  16 As declared  8 2% - 2.5% p.a. (2012: 1.25% - 4.3% p.a.) Cost plus margin As agreed without contract Cost plus margin As agreed without contract (2012: Contract price) 35 As declared

 

12 4 18 3

 

12 3 11 2



  

2 1 2

 -

- Cost plus margin 1 Cost plus margin - Contract price

3    

3 1 4 2 -

 -

1 -

- 3.60% - 3.70% p.a.

Contract price Cost plus margin Contract price As agreement Cost plus margin

During the year 2013, the Company received credit note to reduce management expense which has been charged since the year 2011 amount of Baht 21 million from Thai Ultimate Car Co., Ltd. The Company recorded such credit note in the financial statements for the year ended December 31, 2013.

4.2 Key management personnel compensation

Associated companies Delta-Thairung Co.,Ltd. Thai Auto Conversion Co., Ltd. Related companies Isuzu Chaicharoenkij Motor Co., Ltd. Thai V.P. Corporation Co., Ltd. V.P. Auto Enterprise Co., Ltd. Lexus Auto City Co., Ltd. Total trade accounts receivable - related parties

676,399 16,189 692,588

1,174,834 31,314 1,206,148

470,490 16,188 486,678

548,475 31,314 579,789

1,445,207 79,634 110,218 315,000 1,950,059 2,642,647

975,417 12,619 63,789 157,500 1,209,325 2,415,473

5,778 5,778 15,986,905

17,421,323 22

Annual Report 2013

4.3 As at December 31, 2013 and 2012, the balances of the accounts between the Company and related companies are as follows: Unit : Baht Separate financial Consolidated financial statements statements 2013 2012 2013 2012 Trade accounts receivable - related parties Subsidiaries Thai Rung Tools and Dies Co., Ltd. 3,952 126,134 Thai V.P. Auto Service Co., Ltd. 2,764,559 1,556,387 Thai Auto Pressparts Co., Ltd. 5,229,518 1,698,213 7,496,420 13,460,800 Thai Ultimate Car Co., Ltd. - 15,494,449 16,841,534 -

93 Thai Rung Union Car Public Company Limited

Key management personnel compensation for the years ended December 31, 2013 and 2012 consisted of: Unit: Baht Consolidated financial Separate statements financial statements 2013 2012 2013 2012 Short-term benefits 46,186,796 38,097,383 22,649,854 20,869,925 Post-employment benefits (1,418,413) (6,526,382) (1,828,456) (1,930,788) Total key management personnel compensation 44,768,383 31,571,001 20,821,398 18,939,137

Unit : Baht Separate financial Consolidated financial statements statements 2013 2012 2013 2012

94 Annual Report 2013

Thai Rung Union Car Public Company Limited

Amounts due from related parties Subsidiaries Thai Rung Tools and Dies Co., Ltd. Thai V.P. Auto Service Co., Ltd. Thai Auto Pressparts Co., Ltd. Thai Ultimate Car Co., Ltd. Associated company Delta-Thairung Co.,Ltd. Related companies Isuzu Chaicharoenkij Motor Co., Ltd. Thai V.P. Corporation Co., Ltd. Total amounts due from related parties Short-term loans to related parties Subsidiaries Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts Co., Ltd. Thai V.P. Auto Service Co., Ltd. Total short-term loans to related parties Trade accounts payable - related parties Subsidiaries Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts Co., Ltd.

11,316,896 1,126,800 6,883,969 19,327,665

36,307,200 2,192 2,760,000 1,046,178 40,115,570

98,975

85,641

98,975

85,641

1,071,605 174,405 1,246,010 1,331,651

19,426,640

40,201,211

- 78,000,000 - 160,000,000 - 238,000,000

172,000,000 8,000,000 180,000,000

1,926 78,917,296 78,919,222

50,235 50,235 149,210

1,610,906 29,015,837 30,626,743

Associated company 23

Total trade accounts payable - related parties Amounts due to related parties Subsidiaries Thai Rung Tools and Dies Co., Ltd. Thai Ultimate Car Co., Ltd. Thai V.P. Auto Service Co., Ltd. Associated company Thai Auto Conversion Co., Ltd. Related companies Isuzu Chaicharoenkij Motor Co., Ltd. Thai V.P. Corporation Co., Ltd. Sinthoranee Co., Ltd. V.P. Auto Enterprise Co., Ltd. Phothiphumi Co. Ltd. V.P. Capital Asset Co.,Ltd Lexus Auto City Co., Ltd. Total amounts due to related parties

1,093 1,544,652 5,350 1,551,095 1,554,485

53,385 72,921 729,101 5,350 860,757 860,757

30,630,133

78,919,222

1,836,214 65,504,894 8,139,732 75,480,840

3,645,984 161,302,329 3,763,264 168,711,577

9,033

219,401 1,380,521 95,000 12,135 22,367 1,729,424 1,738,457

302,461 2,528,326 108,979 3,527 95,000 5,206 78,410 3,121,909 3,121,909

219,401 406,638 12,135 22,367 660,541 76,150,414

197,074 2,095,651 5,206 78,410 2,376,341 171,087,918

95 Annual Report 2013

Related companies Isuzu Chaicharoenkij Motor Co., Ltd. Thai V.P. Corporation Co., Ltd. V.P. Auto Enterprise Co., Ltd. V.P.K. Auto Co., Ltd.

Thai Rung Union Car Public Company Limited

Thai Auto Conversion Co., Ltd.

Unit : Baht Separate financial Consolidated financial statements statements 2013 2012 2013 2012 3,390 3,390

Unit : Baht Separate financial Consolidated financial statements statements 2013 2012 2013 2012 Accrued project costs to related party Subsidiary Thai Rung Tools and Dies Co., Ltd.

Total accrued project cost to related party

Annual Report 2013

Thai Rung Union Car Public Company Limited

Short-term loans from related party Subsidiaries Thai V.P. Auto Service Co., Ltd. Total short-term loans from related party

23,259,830 23,259,830

26,401,728 26,401,728

20,000,000 20,000,000

4.4. During the year of 2013, movements of short-term loans to and loans from related parties were as follows: Unit: Million Baht During the period December Increase Decrease 31, 201ď&#x20AC;ł

January 1, 201ď&#x20AC;ł Short-term loans to related parties Consolidated financial statements Related companies V.P. Auto Enterprise Co., Ltd. Thai V.P. Corporation Co., Ltd. Lexus Auto City Co., Ltd. Biz Motors Co., Ltd. Separate financial statements Subsidiary companies Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts Co., Ltd. Thai V.P. Auto Service Co., Ltd. Related companies V.P. Auto Enterprise Co., Ltd. Thai V.P. Corporation Co., Ltd. Lexus Auto City Co., Ltd. Biz Motors Co., Ltd.

(60)

24 10 30

(24) (10) (30)

172 8

241 425 25

(335) (265) (33)

(60)

24 10 30

(24) (10) (30)

Interest rate

- 3.60 - 3.70% p.a., due in November 25, 2013. - 3.70% p.a., due in November 21, 2013. - 3.70% p.a., due in October 3, 2013. - 3.70% p.a., due in October 21, 2013.

78 1.25% - 2.25% p.a., at call 160 2.0% - 4.3% p.a., at call - 2.0% p.a., at call - 3.60 - 3.70% p.a., due in November 25, 2013. - 3.70% p.a., due in November 21, 2013. - 3.70% p.a., due in October 3, 2013. - 3.70% p.a., due in October 21, 2013.

(30)

20 2.25% p.a., at call

During the year 2013, the Company had short-term loans to related parties as promissory notes of Baht 124 million for short-term loans. These loans are guaranteed by the directors of each borrower company. As at December 31, 2013, all related parties had repaid such short term loan to the Company. The Company and such related companies have relationships by common shareholders and directors. 4.5 Guarantee Obligations with related parties As at December 31, 2013 and 2012 the Company has outstanding guarantee obligations with subsidiaries and associate as follows: Year 2013 a)

The Company has obligations of Baht 135 million in respect of its guarantee of credit facilities provided by a local banks to Thai Rung Tools and Dies Co., Ltd. (a subsidiary).

Year 2012 a) b) c) d)

The Company has obligations of Baht 25 million in respect of its guarantee of credit facilities provided by a local bank to Thai V.P. Auto Service Co., Ltd. (a subsidiary). The Company has obligations of Baht 160 million in respect of its guarantee of credit facilities provided by two local banks to Thai Rung Tools and Dies Co., Ltd. (a subsidiary). The Company has obligations of Baht 70 million in respect of its guarantee of credit facilities provided by a local bank to Thai Auto Pressparts Co., Ltd. (a subsidiary). The Company has obligations of Baht 110 million in respect of its guarantee of credit facilities provide by a local bank to Thai Ultimate Car Co., Ltd. (a subsidiary) together with personal guarantee by directors in 2012. The Company has obligations of Baht 75 million, in respect of its guarantee of credit facilities provide by a local bank to Delta Thairung Co., Ltd. (an associated).

The Company has not charged a guarantee fee to its subsidiaries and associates.

97 Annual Report 2013

Short-term loans from related party Separate financial statements Subsidiary companies Thai V.P. Auto Service Co., Ltd.

Interest rate

Thai Rung Union Car Public Company Limited

January 1, 201ď&#x20AC;ł

Unit: Million Baht During the period December Increase Decrease 31, 201ď&#x20AC;ł

5. CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, 2013 and 2012 consisted of: Unit: Baht Consolidated financial statements 2012 2013

98 Annual Report 2013

Thai Rung Union Car Public Company Limited

Cash on hand Current accounts Saving accounts Current investments Total

Separate financial statements 2013 2012

,, 32,958,223 216,772,188 ,,

,, ,, ,, ,,6

,, ,, ,, ,

, ,, ,, ,,

,,

,,8

,,

,,

6. TRADE AND OTHER RECEIVABLES - NET Trade and other receivables as at December 31, 2013 and 2012 consisted of: Unit: Baht Consolidated financial statements 2012 2013 Trade accounts receivable – unrelated parties Trade accounts receivable – related parties Less: Allowance for doubtful accounts Total trade accounts receivable – net Other receivables Pledged bank deposits within one year Amounts due to related parties Input tax refundable Input tax suspense Prepayment Withholding tax Accrued interest income Others Total other receivables Total trade and other receivables - net

Separate financial statements 2013 2012

439,946,465 2,642,647 (482,718) 442,106,394

,, 2,415,473 (482,718) ,,

2,, 15,986,905 253,221,500

636,269,646 17,421,323 653,690,969

600,000 149,210 71,179,750 1,811,792 4,734,052 10,208,893 1,758,760 90,442,457 532,548,851

1,331,651 35,823,634 14,342,243 5,192,877 72,685 2,414,731 59,177,821 946,698,682

600,000 19,426,640 3,343,197 322,969 3,044,809 8,721,805 920,213 36,379,633 289,601,133

40,201,211 5,195,161 2,911,644 72,685 727,310 49,108,011 702,798,980 27

Total trade accounts receivable - unrelated parties, net 439,463,747 Trade accounts receivable - related parties Age of receivables Trade accounts receivable - subsidiaries Not yet due Past due Up to 3 months 6 - 12 months Over 12 months Total trade accounts receivable - subsidiaries Trade accounts receivable - associates Not yet due Total trade accounts receivable - associates

885,105,388

237,234,595

636,269,646

15,601,795

9,740,821

(107,346) 15,494,449

4,425,513 1,348,200 1,327,000 16,841,534

692,588 692,588

1,206,148 1,206,148

486,678 486,678

579,789 579,789

99 Annual Report 2013

Thai Rung Union Car Public Company Limited

The balances of trade accounts receivable as at December 31, 2013 and 2012, aged on the basis of due dates, are summarised below. Unit: Baht Consolidated financial Separate financial statements statements 2012 2013 2012 2013 Trade accounts receivable - unrelated parties Age of receivables Not yet due 352,884,061 ,, 201,996,401 571,054,164 Past due Up to 3 months 35,238,194 65,148,521 85,297,656 129,953,524 3 - 6 months 2,447,930 66,961 51,256 6 - 12 months 11,875,007 99,950 Over 12 months 768,983 1,613,542 Total 439,946,465 885,588,106 237,234,595 636,269,646 Less: Allowance for doubtful accounts (482,718) (482,718) -

Unit: Baht Consolidated financial statements 2012 2013 Trade accounts receivable - related companies Not yet due Past due Up to 3 months Total trade accounts receivable – related companies

100

Total trade accounts receivable - related parties

Separate financial statements 2013 2012

1,740,285

1,200,359

5,778

209,774 1,950,059 2,642,647

8,966 1,209,325 2,415,473

5,778 15,986,905

17,421,323

Annual Report 2013

Thai Rung Union Car Public Company Limited

7. INVENTORIES - NET Inventories as at December 31, 2013 and 2012 consisted of: Unit: Baht Consolidated financial statements Stock obsolescence

Cost

Inventory-net

2012 65,880,739 53,643,844 156,174,871

2013

2012

Raw materials

2013 80,741,525 43,882,291 118,174,513

(16,773,165) (3,019,509) (18,659,176)

(20,813,631) (1,876,660) (15,106,816)

63,968,360 40,862,782 99,515,337

45,067,108 51,767,184 141,068,055

Total

242,798,329

275,699,454

(38,451,850)

(37,797,107)

204,346,479

237,902,347

Finished goods Work in process

Cost Finished goods Work in process Raw materials Total

Unit: Baht Separate financial statements Stock obsolescence 2013 2012

2013

2012

Inventory-net 2013 2012

2013

2012

17,830,371 20,885,313 77,970,422

,,9 21,816,128 83,400,861

(1,385,596) (957,279) (11,378,056)

16,444,775 19,928,034 66,592,366

8,034,213 20,858,849 72,022,805

116,686,106

114,636,798

(13,720,931)

102,965,175

100,915,867

8. INVESTMENTS IN ASSOCIATED COMPANIES Details of associates consisted of: Unit: Baht

Manufacture of vehicle parts Thai Auto Conversion Co., Ltd. Manufacture of vehicle parts Delta ThaiRung Co., Ltd. Manufacture of auto seats and parts and other equipment for vehicles Total investments in associated companies

Shareholding percentage

Carrying amounts based on equity method

Cost

2013

2012

2013

2012

2013

2012

Thailand

% 46

,,

8,606,708

9,200,000

9,200,000101

Thailand

,551,133

57,194,724 14,900,000 14,900,000

Thailand

211,907,431

179,092,973 90,000,000 90,000,000

287,065,272

244,894,405 114,100,000 114,100,000

Country of incorporation

Annual Report 2013

Delta-TR Co., Ltd.

Separate financial statements

Thai Rung Union Car Public Company Limited

Company

Nature of business

Consolidated financial statements

In the first quarter 2012, the Company sells 7,450 ordinary shares in Thai Auto Conversion Co., Ltd. representing 10% of the registered shares at a price of Baht 3,094 per share, giving a total of Baht 23.05 million to Toyota Auto Body 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 Baht 3.70 million and Baht 15.60 million in consolidated financial statements and separate financial statements, respectively. In consequence from the sales of shares, the Company still hold 20% of the registered share capital of Thai Auto Conversion Co., Ltd. According to the minute of the shareholders general meeting for the year 2012 of Delta-TR Co., Ltd. dated on February 2, 2012, the meeting approved to pay dividend from its retained earnings of the year 2011 of Baht 145 per share, totalling 200,000 shares, in the total amount of Baht 29 million, the Company has 46% shareholding thus the Company has dividend income in the amount of Baht 13.34 million. On February 24, 2012, the Company had received dividend amount of Baht 5.52 million, and the remaining balance of Baht 7.82 million had received on April 27, 2012. In addition, according to the minute of the extraordinary shareholders meeting no. 1/2012 of Delta-TR Co., Ltd. held on February 22, 2012, the meeting approved the Company’s dissolution. Currently, it is in the process of liquidation. According to the minute of the shareholders general meeting for the year 2012 of Thai Auto Conversion Co., Ltd. dated on June 7, 2012, the meeting approved to pay dividend from unappropriated retained earnings as at December 31, 2011 to shareholders in the total amount of Bath 32.04 million. The Company has 20% shareholding, so the Company has dividend income in the total amount of Baht 6.41 million. The Company already received such dividend on July 27, 2012. 30

According to the minute of director meeting of Delta Thairung Co., Ltd. dated on April 24, 2012, the meeting approved to pay dividend to shareholders in the total amount of Baht 50 million. The Company has 30% shareholding, so the Company has dividend income in the total amount of Baht 15 million. According to the annual general meeting of the shareholders for the year 2013 of Thai Auto Conversion Co., Ltd. held on June 7, 2013, the meeting approved to pay dividend from 50% of net profit after tax for the year 2012 of Baht 912.55 per share, holding of the Company are 14,900 shares thus the Company has receive dividend income amount of Baht 13.6 million.

102 Annual Report 2013

Thai Rung Union Car Public Company Limited

During 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: Unit: Baht Separate financial statements Consolidated financial statements Share of profit (loss) from investments in Company associates during the year Dividend received during the year 2013 2012 2013 2012 Delta-TR Co., Ltd. (1,765,565) 13,340,000 Thai Auto Conversion Co., Ltd. 22,953,404 24,822,866 13,596,995 6,408,712 Delta ThaiRung Co., Ltd. 32,814,457 55,486,028 15,000,000 Total 78,543,329 34,748,712 55,767,861 13,596,995 Financial information of the associated companies is summarised below.

Company

Paid-up capital as at December 31, 2013

Delta-TR Co., Ltd. Thai Auto Conversion Co., Ltd. Delta ThaiRung Co., Ltd.

20 75 300

2012 20 75 300

Total assets as at December 31,

Total liabilities as at December 31,

Total revenues for the years ended December 31,

Unit: Million Baht Net profit for the years ended December 31,

2013

19 443 811

2012 19 469 733

111 105

2012 184 136

1,207 918

2012 27 1,452 1,271

2012

116 107

(4) 124 185

Shares of profit from investments in three associated companies, included in the consolidated statements of comprehensive income for the year 2013 and 2012, amounting to Baht 55.77 million and Baht 78.54 million, respectively, were calculated based on financial statements prepared by the management of those companies and not audited by their auditors.

9. INVESTMENTS IN SUBSIDIARIES Details of investments in subsidiaries as presented in separate financial statements are as follows: Unit: Baht

27 400

Cost 2013

2012

23,500,000

84,600,000

15,980,000 103

94 91

25,380,000 364,000,000

412,880,000

84,600,000

15,980,000

According to the annual general meeting of the shareholders of Thai V.P. Auto Service Co., Ltd. held on April 27, 2012, approved to pay dividend from inappropriated retained earnings as at December 31, 2011 to shareholders of Bath 68 per share, totaling number of share 250,000 shares which amounting to Bath 17 million. According to the annual general meeting of the shareholders for the year 2013 of Thai V.P. Auto Service Co., Ltd. held on April 24, 2013, the meeting approved to pay dividend from its retained earnings of the year 2012 of Baht 360 per share, totaling 250,000 shares, in the total amount of Baht 90 million According to the annual general meeting of the shareholders for the year 2013 of Thai Ultimate Car Co., Ltd. held on April 24, 2013, the meeting approved to pay dividend from its retained earnings of the year 2012 of Baht 3,400 per share, totaling 25,000 shares, in the total amount of Baht 85 million. 10. OTHER LONG-TERM INVESTMENT - NET Other long-term investment as at December 31, 2013 and 2012 consisted of: Unit: Baht Investment in LP Land and Housing Development Co., Ltd. Less: Allowance for impairment Other long-term investment - net

2013 24,000 (24,000) -

2012 24,000 (24,000) -

Annual Report 2013

Thai V.P. Auto Service Co., Ltd. and its subsidiaries Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts Co., Ltd. Total investments in subsidiaries

Paid up capital 2013 2012 Million Million Baht Baht 25 25

Dividend received during the year 2013 2012

Thai Rung Union Car Public Company Limited

Companyâ&#x20AC;&#x2122;s name

Shareholding percentage 2013 2012 % %

11. INVESTMENT PROPERTIES - NET Investment properties as at December 31, 2013 and 2012 consisted of: Unit: Baht Consolidated financial statements Building Building improvement

Land

104 Annual Report 2013

Thai Rung Union Car Public Company Limited

Cost As at December 31, 2011 Write – off As at December 31, 2012 Increase As at December 31, 2013 Accumulated depreciation As at December 31, 2011 Depreciation for the year Write – off As at December 31, 2012 Depreciation for the year As at December 31, 2013 Net book value As at December 31, 2012 As at December 31, 2013 Depreciation for the years 2012 2013

Total

214,995,500 214,995,500 214,995,500

86,493,852 (,,6) 77,452,806 77,452,806

49,721,226 (1,453,591) 48,267,635 48,267,635

351,210,578 (10,494,637) 340,715,941 340,715,941

(68,114,690) (1,128,272) 7,367,866 (61,875,096) (2,475,760) (64,350,856)

(36,030,731) (810,029) 1,165,549 (35,675,211) (2,074,716) (37,749,927)

(104,145,421) (1,938,301) 8,533,415 (97,550,307) (4,550,476) (102,100,783)

214,995,500 214,995,500

15,577,710 13,101,950

12,592,424 10,517,708

243,165,634 238,615,158 1,938,301 4,550,476

Investment property comprises a number of commercial land and building that are leased to third parties. Each of the leases contains an initial non-cancellable period of 1-3 years. Subsequent 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. As at December 31, 2013 and 2012, subsidiaries’ company certain investment properties have been fully depreciated but are still in use. The original cost of those assets amounted to approximately Baht 0.2 million.

As at December 31, 2012, a subsidiary’s (Thai Ultimate Car Co., Ltd.) land and building constructed thereon at net book value of Baht 56.33 million has been mortgaged with a bank to secure the subsidiary’s credit facilities of Baht 80 million as granted by the bank. As at December 31, 2013, the Company’s management has not yet assessed fair value of such assets because the value of investment properties according to the management’s long-term plan will be considered insignificant. 12. PROPERTY, PLANT AND EQUIPMENT - NET Property, plant and equipment as at December 31, 2013 and 2012 consisted of: Unit: Baht Consolidated financial statements

105

Office equipment

Motor vehicles

Work in progress

Total

Annual Report 2013

Cost December 31, 2011 Acquisitions Transfer in (transfer out) Disposals December 31, 2012 Acquisitions Transfer in (transfer out) Disposals December 31, 2013 Accumulated depreciation December 31, 2011 Depreciation for the year Depreciation on disposals December 31, 2012 Depreciation for the year Depreciation on disposals December 31, 2013 Allowance for impairment December 31, 2011 Write off December 31, 2012 Increase Amortization December 31, 2013 Net book value December 31, 2012

Buildings Machinery, factory and building equipment improvement and tools

Thai Rung Union Car Public Company Limited

Land and land improvement 547,607,328 5,929,000 (2,090,875) 551,445,453 107,832,915 659,278,368

514,261,064 4,554,241 106,163,776 (447,493) 624,531,588 113,841,513 7,246,293 745,619,394

1,755,204,883 63,400,514 248,100,248 (148,131,478) 1,918,574,167 48,736,327 156,325,070 (132,864,368) 1,990,771,196

174,505,009 8,044,210 11,440 (6,812,738) 175,747,921 11,557,246 754,500 (38,239,735) 149,819,932

86,393,884 10,252,146 (1,788,519) 94,857,511 39,735,373 1,923,858 (2,209,033) 134,307,709

300,408,722 135,427,788 (354,275,464) (1,216,355) 80,344,691 212,150,157 (166,249,721) (4,697,732) 121,547,395

3,378,380,890 227,607,899 (160,487,458) 3,445,501,331 533,853,531 (178,010,868) 3,801,343,994

(10,634,720) (322,631) 2,090,873 (8,866,478) (160,970) (,,)

(308,004,535) (20,562,039) 446,236 (328,120,338) (22,809,021) (,,9)

(1,512,894,846) (72,335,530) 140,202,954 (1,445,027,422) (89,109,559) ,, (,,,7)

(162,676,864) (4,515,021) 6,782,241 (160,409,644) (5,720,892) ,, (,,)

(64,808,744) (9,402,335) 1,777,647 (72,433,432) (,,1) 2,069,262 (83,808,041)

(2,059,019,709) (107,137,556) 151,299,951 (2,014,857,314) (,,3) 168,043,500 (,8,058,127)

(11,763,031) 9,317,766 (2,445,265) (2,000,000) ,,3 (2,,)

(476,000) (476,000) (476,000)

(12,239,031) 9,317,766 (2,921,265) (2,000,000) ,,3 (2,,2)

542,578,975

296,411,250

471,101,480

15,338,277

21,948,079

80,344,691

1,427,722,752

650,250,920 394,690,035 581,892,787 22,173,810 December 31, 2013 Depreciation for the years 2012 (Baht 89 million included in manufacturing cost, and the balance in administrative expenses)

50,,668

121,547,395

1,820,578,615

2013 (Baht 110 million included in manufacturing cost, and the balance in administrative expenses)

Unit: Baht

107,137,556

34131,244,313

2012 (Baht 89 million included in manufacturing cost, and the balance in administrative expenses)

107,137,556

2013 (Baht 110 million included in manufacturing cost, and the balance in administrative expenses)

131,244,313

Unit: Baht Separate financial statements

106 Annual Report 2013

Thai Rung Union Car Public Company Limited

Land and land improvement

Buildings Machinery, factory and building equipment improvement and tools

Office equipment

Motor vehicles

Cost December 31, 2011 Acquisitions Transfer in (transfer out) Disposals December 31, 2012 Acquisitions Transfer in (transfer out) Disposals December 31, 2013

469,814,801 5,929,000 (2,090,875) 473,652,926 107,832,914 581,485,840

338,452,405 4,371,800 426,569 (447,493) 342,803,281 111,961,919 7,015,200 461,780,400

1,475,390,577 47,843,423 10,092,859 (297,442,627) 1,235,884,232 17,079,907 29,222,093 (120,650,439) 1,161,535,793

87,464,924 4,533,304 (4,170,493) 87,827,735 7,809,895 454,500 (4,751,974) 91,340,156

70,021,437 4,707,777 (1,170,640) 73,558,574 37,450,816 1,923,858 (919,033) 112,014,215

12,055,134 14,144,829 (10,519,428) (869,705) 14,810,830 47,096,341 (38,615,651) (2,344,614) 20,946,906

2,453,199,278 81,530,133 (306,191,833) 2,228,537,578 329,231,792 (128,666,060) 2,429,103,310

Accumulated depreciation December 31, 2011 Depreciation for the year Depreciation on disposals December 31, 2012 Depreciation for the year Depreciation on disposals December 31, 2013

(10,634,720) (322,631) 2,090,873 (,,) (160,970) (9,027,448)

(219,725,116) (9,474,91) 446,237 (,,) (10,581,586) (239,335,378)

(1,357,103,806) (29,059,085) 289,687,169 (,,,) (33,645,905) 120,065,993 (1,010,055,634)

(82,014,982) (2,411,470) 4,165,923 (,,) (3,357,018) 5,025,936 (78,591,611)

(55,567,450) (6,260,768) 1,159,770 (,,8) (7,735,621) 917,627 (67,486,442)

(1,725,046,074) (47,528,867) 297,549,972 (,,,) (55,481,100) 126,009,556 (1,404,496,513)

(476,000) (476,000) (476,000)

(12,239,031) 9,317,766 (2,921,265) 2,214,013 (707,252)

7,567,206

12,414,126

14,810,830

750,591,344

572,458,392 222,445,022 151,248,907 12,748,545 December 31, 2013 Depreciation for the years 2012 (Baht 33 million included in manufacturing cost, and the balance in administrative expenses) 2013 (Baht 39 million included in manufacturing cost, and the balance in administrative expenses)

44,051,773

20,946,906

1,023,899,545

Allowance for impairment December 31, 2011 Amortization December 31, 2012 Amortization December 31, 2013 Net book value December 31, 2012

(11,763,031) 9,317,766 (2,445,265) 2,214,013 (231,252)

464,786,448

114,049,489

136,963,245

Work in progress

Total

47,528,867 55,481,100

As at December 31, 2013 and 2012, certain plant and equipment items have been fully depreciated but are still in use. The original cost of those assets amounted to approximately Baht 1,442 million and Baht 1,475 million, respectively, in consolidated financial statement and Baht 1,208 million and Baht 1,214 million, respectively, in separate financial statements. 35

13. DEFERRED TAX Deferred tax as at December 31, 2013 and 2012 consisted of: Unit: Baht

107

Movements in deferred tax assets and deferred tax liabilities during the year were as follows: Unit: Baht Consolidated financial statements January Profit December 1, 2013 (loss) 31, 2013

Separate financial statements January Profit December 1, 2013 (loss) 31, 2013

7,559,421

939,042

8,498,463

2,744,187

4,800

(808,093)

(803,293)

4,800

584,253

(42,803)

541,450

584,253

(442,803)

141,450

Deferred tax assets Allowance for decline in value of inventory Allowance for impairment of investment Allowance for decline in value of fixed assets Allowance for bad debt Provision for employee benefit liabilities Provision for liabilities Loss carry forward Total

96,543 8,646,791

2,635,082

96,543 11,281,873

5,561,109

1,529,904

7,091,013

, 589,571 17,,

(541,977) 2,181,251

, 47,594 20,113,838

8,894,349

1,087,101

9,981,450

Deferred tax liabilities Depreciation

(,,)

(150,159)

(3,411,842)

(1,157,398)

29,827

(1,127,571)

Total

(,,)

(150,159)

(3,411,842)

(1,157,398)

29,827

(1,127,571)

Annual Report 2013

Deferred tax assets Deferred tax liabilities

Separate financial statements 2013 2012 9,981,450 8,894,349 (1,127,571) (1,157,398)

Thai Rung Union Car Public Company Limited

Consolidated financial statements 2013 2012 20,113,838 17,, (3,411,842) (3,261,683)

Unit: Baht

108

Consolidated financial statements January Profit December 1, 2012 (loss) 31, 2012

Separate financial statements January Profit December 1, 2012 (loss) 31, 2012

12,573,522

(5,014,101)

7,559,421

3,744,187

(1,000,000)

2,744,187

4,800

584,253

Annual Report 2013

Thai Rung Union Car Public Company Limited

75,433 9,852,015

21,110 (1,205,224)

96,543 8,646,791

5,773,500

(212,391)

5,561,109

12,197,170 34,702,940

451,208 (11,607,599) (16,770,353)

451,208 589,571 17,932,587

3,488,766 13,011,253

(3,488,766) (4,116,904)

8,894,349

Deferred tax liabilities Depreciation

(1,774,914)

(1,486,769)

(3,261,683)

(591,260)

(566,138)

(1,157,398)

Total

(1,774,914)

(1,486,769)

(3,261,683)

(591,260)

(566,138)

(1,157,398)

14. OTHER NON-CURRENT ASSETS - NET Other non-current assets as at December 31, 2013 and 2012 consisted of: Unit: Baht

Land and building leasehold rights - net Withholding tax deducted at source Deferred cost of dies - net Land deposit Other non-current assets Total

Consolidated financial statements 2013 2012 1,308,114 1,831,416 20,019,657 18,146,397 77,107,557 119,115,528 66,529,625 ,000,000 10,443,432 16,217,143 175,408,385 174,310,484

Separate financial statements 2013 2012 10,765,903 94,340,144 130,256,866 66,529,625 19,000,000 10,371,684 3,545,325 171,241,453 163,568,094

As at  December 2013 and 2012, deposits for land consist of - Deposit for land of Baht 66.53 million to pay as payment term under the contract for buy the land. The value of the land under contract is equal to Baht . million and the remaining is due within May 2014. 37

- Deposit for land of Baht 19 million to purchase in land and building. On October 2, 2013, the Company has remaining paid for such land and building totaling of Baht 2.10 million and received the transferring ownership aforesaid land and buildings. 15. BANK FACILITIES As at December 31, 2013, the Group has bank overdraft facilities and other short-term loan facilities amounting to Baht 98 million and Baht 1,108 million, respectively, in consolidated financial statements and Baht 48 million and Baht 805 million, respectively, in separate financial statements which are guaranteed by the Company and its directors, and secured by the mortgage of land with structures thereon of the subsidiary.

Trade and other payables as at December 31, 2013 and 2012 consisted of: Unit: Baht

Trade accounts payable – unrelated parties Trade accounts payable – related parties Total trade accounts payable Other payables – unrelated parties Other payables – related parties Fixed assets payable Accrued expenses Accounts payable – Revenue Department Advance from customers Output tax suspense Accrued project costs – unrelated parties Accrued project costs – related party Others Total other payables Total trade and other payables

Consolidated financial statements 2013 2012 293,560,214 528,585,475 1,554,485 860,757 295,114,699 529,446,232 21,857,705 29,136,193 1,738,457 3,121,909 ,, ,, 40,697,261 ,, 9,082,205 ,,8 5,360,515 ,, 27,439,572 ,, 16,794,887 ,, 15,960,448 ,,51 147,592,990 ,,50 677,039,222

Separate financial statements 2013 2012 161,643,365 284,369,052 30,630,133 78,919,222 192,273,498 363,288,274 11,596,411 10,004,601 76,150,414 171,087,918 15,590,663 25,328,348 8,910,599 236,558 1,245,465 2,665,343 15,500,040 23,259,830 26,401,728 5,838,808 4,867,367 135,338,027 263,346,066 327,611,525 626,634,340 38

Annual Report 2013

16. TRADE AND OTHER PAYABLES

109 Thai Rung Union Car Public Company Limited

As at December 31, 2012, the Group has bank overdraft facilities and other short-term loan facilities amounting to Baht 123 million and Baht 1,183 million, respectively, in consolidated financial statements and Baht 48 million and Baht 805 million, respectively, in separate financial statements which are guaranteed by the Company and its directors, and secured by the mortgage of land with structures thereon of the subsidiary.

17. FINANCE LEASE LIABILITIES Finance lease liabilities as at December 31, 2013 and 2012 consisted of: Unit : Baht Consolidated financial statements 2013

110

Within one year After one year but within five years Total

2012

Future minimum lease payments ,, 14,182,455

Interest (,,) (632,144)

Present value of minimum lease payment ,, 13,550,311

24,842,024

(1,660,605)

23,181,419

Future minimum lease payments 2,638,734 872,101

Interest (137,687) (20,556)

Present value of minimum lease payments 2,501,047 851,545

3,510,835

(158,243)

3,352,592

Annual Report 2013

Thai Rung Union Car Public Company Limited

Unit : Baht Separate financial statements 2013

Within one year After one year but within five years Total

2012

Future minimum lease payments ,, 8,655,747

Interest (,) (397,373)

Present value of minimum lease payment ,, 8,258,37

15,684,669

(1,043,125)

14,641,544

Future minimum lease payments -

Present value of minimum lease payments -

Interest

18. EMPLOYEE BENEFITS OBLIGATION Employee benefits obligation in the statements of financial position as at December 31, 2013 and 2012 consisted of:

Present value of obligation

Unit: Baht Post-employment benefit plan Consolidated financial statements Separate financial statements 2012 2013 2012 2013 ,, 43,233,956 35,455,067 27,805,547

The Group 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 10 years to receive severance payment not less than 300 days or 10 months of the last month salary. Movement of the present value of employee benefits obligation for the years ended December 31, 2013 and 2012 as follows:

Unit: Baht Post-employment benefit plan Consolidated financial Separate financial statements statements 2013 2012 2013 2012 49,260,074 (3,508,188) (1,593,380) (924,550) 43,233,956

27,805,547 6,259,243 1,390,277 35,455,067

28,867,504 (545,888) (252,569) (263,500) 27,805,547

Employee benefit expenses in the statements of comprehensive income for the years ended December 31, 2013 and 2012 consisted of: Unit: Baht Post-employment benefit plan Consolidated financial Separate financial statements statements 2013 2012 2013 2012 Current service cost 10,769,706 (3,508,188) 6,259,243 (545,888) Interest from obligation 2,405,704 (1,593,380) 1,390,277 (252,569) Total employee benefits expenses 13,175,410 (5,101,568) 7,649,520 (798,457) Employee benefit expenses for the years ended December 31, 2013 and 2012 as shown in the statements of comprehensive income are as follows: Unit: Baht Post-employment benefit plan Consolidated financial Separate financial statements statements 2013 2012 2013 2012 Cost of sales 14,450,011 968,982 9,930,771 740,681 Selling expenses (269,555) (152,419) (526,915) 62,533 Administrative expenses (1,005,046) (5,918,131) (1,754,336) (1,601,671) Total employee benefit expenses 13,175,410 (5,101,568) 7,649,520 (798,457) 40

111 Annual Report 2013

43,233,956 10,769,706 2,405,704 56,409,366

Thai Rung Union Car Public Company Limited

Employee benefits obligation as at January 1, Current service cost Interest cost Benefit paid Employee benefits obligation as at December 31,

Principal actuarial assumptions as at December 31, 2013 and 2012 (expressed as weighted averages) as follows: Consolidated and separate financial statements Discount rate at December 31 5% Future salary increases 4% Mortality rate Mortality table year 2008

112

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.

Annual Report 2013

Thai Rung Union Car Public Company Limited

The actuarial assumption of mortality rate for reasonable estimation of probability of retirement in the future is estimated from mortality table. 19. SHARE CAPITAL According to the shareholders’ annual general meeting of the Company held on April 22, 2013, the meeting approved to decrease share capital 23,407,000 shares with a par value of Baht 1 which originally issued to be reserved for exercise of the warrants by reduces share capital from Baht 524,996,497 to Baht 501,589,497 on May 8, 2013. According to the shareholders’ annual general meeting of the Company held on April 22, 2013, the meeting approved to increase authorized share capital on General Mandate from Baht 501,589,497 to Baht 802,543,195 by issuing 300,953,698 ordinary shares with a par value of Baht 1 on May 9, 2013. (Paid up share capital for this increasing should not exceed 30% of paid up share capital which equal to 150,476,849 shares) According to the board of directors’ meeting of the Company No.10/2013 held on November 27, 2013, the Company wrote off all treasury stocks 9,216,700 shares with a par value of Baht 1 by reducing the registered share capital of the Company by Baht 9,216,700 which was registered with the Ministry of Commerce on December 17, 2013. 20. TREASURY SHARES According to the board of directors’ meeting of the Company No.2/2010 held on May 4, 2010, the Company’s directors resolved to approve the share repurchase program for financial management purpose in accordance with the Section 66/1(2) of the Public Limited Company Act (No. 2) B.E. 2544 in the amount not exceeding Baht 150 million. The number of ordinary shares to be repurchased is not exceeding 50.16 million shares (par value of Baht 1 per share); equal to 10% 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 Stock Exchange of Thailand during the period from May 27, 2010 to November 26, 2010, the Company determine the share resale procedures through the Stock Exchange of Thailand, or by public offering and the period for share resale within 3 years and 6 months after the date of completion of repurchase.

The Company repurchased a total of 9,216,700 ordinary shares during the period from May 27, 2010 to November 26, 2010, for a total consideration of Baht 47.95 million and during the same period the Company appropriated Baht 47.95 million from its retained earnings as a treasury shares reserve for the repurchased shares.

Reserves comprise: Appropriations of profit and/or retained earnings Legal reserve Section 116 of the Public Companies Act B.E. 2535 Section 116 requires that a public company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The 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 Company’s own shares held by the Company. The treasury shares reserve is not available for dividend distribution. 22. OTHER INCOME Other income for the years ended December 31, 2013 and 2012 consisted of: Unit: Baht

Scrap sales Interest income Utilities, transportation service and sales of supplies

Consolidated financial statements 2013 2012 134,693,842 163,839,107 8,285,019 3,434,819 10,516,426

8,487,993

Separate financial statements 2013 2012 43,097,664 52,171,362 12,205,088 10,892,283 16,290,601

23,311,199 42

Annual Report 2013

21. RESERVES

113 Thai Rung Union Car Public Company Limited

According to the board of directors’ meeting of the Company No.10/2013 held on November 27, 2013, (the end of the program) the Company had not disposed of the treasury stocks, and therefore wrote off all treasury stocks 9,216,700 shares with a par value of Baht 1 by reducing the registered share capital of the Company by Baht 9,216,700 which was registered with the Ministry of Commerce on December 17, 2013. As a result, the issued and paid up share capital decreased from Baht ,, to Baht ,,. The difference between cost of treasury stocks and par value of common shares, amounting to Baht ,,, is presented by deducting to premium on ordinary shares and unappropriated retained earnings in amount of Baht 13,361,261 and Baht ,,, respectively. Moreover, the Company reversed the appropriation of retained earnings as a reserve for treasury share to unappropriated retained earnings.

Unit: Baht

Rental fee Gain on sales of investment in associated company Others Total

114

Consolidated financial statements 2013 2012 6,906,000 7,283,674 20,338,910 180,740,197

3,697,080 15,978,288 202,720,961

Separate financial statements 2013 2012 4,282,320 4,378,794 7,861,300 83,736,973

15,600,300 7,844,722 114,198,660

Annual Report 2013

Thai Rung Union Car Public Company Limited

23. PROVIDENT FUND The Group and their employees have jointly established a provident fund in accordance with the Provident Fund Act B.E. 2530. The funds are monthly contributed to by employees at the rates of 3-5 percent of their salaries, and by the Group at the rates of 0-100 percent of the employeesâ&#x20AC;&#x2122; contribution. The fund is managed by CIMB Thai Bank Public Company Limited, except that of a subsidiary (Thai Ultimate Car Co., Ltd.) is managed by Kasikorn Asset Management Co., Ltd. The funds will be paid to the employees upon termination in accordance with the rules of the funds. During the year 2013 and 2012, the Group contributed Baht 9 million and Baht 8 million, respectively, to the funds. 24. EXPENSE BY NATURE Significant expenses by nature are as follows: Unit: Baht Consolidated financial statements 2013 2012 Salary and wages and other employee benefits Depreciation and amortization Raw materials and consumables used Changes in inventories of finished goods and work in process

Separate financial statements 2013 2012

552,591,407 511,338,869 350,183,502 303,339,087 138,129,511 111,217,971 56,832,571 49,033,175 2,029,073,893 2,205,892,337 1,086,105,681 1,111,344,801 (5,099,233)

17,337,484

(7,479,747)

8,835,538

25. INCOME TAX EXPENSES Income tax expenses for the years ended December 31, 2013 and 2012 consisted of: Unit: Baht Consolidated financial statements Separate financial statements 2013 2012 2013 2012 Current tax expense Current period (55,680,915) (92,940,024) (41,340,146) (85,345,512)

2,573,069 (541,977) 2,031,092 (53,649,823)

(6,649,523) (11,607,599) (18,257,122) (111,197,146)

1,116,928 1,116,928 (40,223,218)

(1,194,276) (3,488,766) (4,683,042) (90,028,554)

Reconciliation of effective tax rate Consolidated financial statements 2013 Rate (%) Profit before total income tax expense Income tax using the corporate tax rate Effect from difference of tax rate Effect from promoted activities Tax effect from equity method Expenses not deductible for tax purposes Effect from credit notes of management fee Recognition of previously unrecognised tax losses Effect from eliminate transactions Total

2012 Unit: Baht

Rate (%)

418,404,895 20%

12.82%

83,680,979 (17,058,879) (11,153,572) (1,150,225) (2,768,088) 2,099,608 53,649,823

Unit: Baht 682,722,029

23%

16.29%

157,026,067 2,767,060 (24,773,582) (18,064,966) (6,729,223) 140,984 830,806 111,197,146

Annual Report 2013

Total

115 Thai Rung Union Car Public Company Limited

Deferred tax expense Movements in temporary differences Benefit of tax losses recognised

Separate financial statements 2013 Rate (%)

116 Annual Report 2013

Thai Rung Union Car Public Company Limited

Profit before total income tax expense Income tax using the corporate tax rate Effect from difference of tax rate Income not subject to tax Expenses not deductible for tax purposes Effect from credit notes of management fee Recognition of previously unrecognised tax losses Total

20%

2012 Unit: Baht 316,729,440 63,345,888

Rate (%) 23%

(19,639,399) 697,251 (4,180,522) 12.70%

40,223,218

20.31%

Unit: Baht 443,276,265 101,953,541 (2,166,265) (10,145,742) 178,351 208,669 90,028,554

Income tax reduction Royal Decree No. 530 B.E. 2554 dated December 14, 2011 grants a reduction in the corporate income tax rate from 30% to 23% on net profit for the accounting period beginning on or after January 1, 2012, and will be reduced to 20% on net profit for the two consecutive accounting periods beginning on or after January 1, 2013 onwards. 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) A significant portion of subsidiariesâ&#x20AC;&#x2122; profit was derived from promoted activities for which concessionary tax rates apply. (b) A subsidiary has 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. A subsidiary has been granted the promotional privileges discussed in Note 26, including exemption from corporate income tax on net income from promoted activities. 26. PROMOTIONAL PRIVILEGES A subsidiary was granted investment promotional privileges by the Board of Investment (BOI). Major privileges are summarised below: Exemption from 50% reduction of corporate income tax rate for 5 years commencing from June 3, 2010 for the manufacture of metal vehicle body parts, plastic and fiber glass vehicle parts, and the manufacture and maintenance of molds and jigs. As from March 22, 2011, a subsidiary has received promotional privileges from the Board of Investment for the manufacture of assembly parts pursuant to the promotion certificate No. 1610 (2)/2011 issued on May 27, 2011. Such subsidiary has started generating revenues since April 2, 2012. 45

27. EARNINGS PER SHARE

28. DIVIDENDS PAID According to the annual general meeting of the shareholders of the Company on April 22, 2013, the shareholders approved the appropriation of dividend for the year 2012 of Baht 0.60 per share, amounting to Baht 295.42 million. The dividend was paid to shareholders within May 20, 2013. According to the annual general meeting of the shareholders of the Company on April 26, 2012, the shareholders approved the appropriation of dividend for the year 2011 of Baht 0.25 per share, amounting to Baht 123.09 million. 29. SEGMENT INFORMATION Segment information is presented in respect of the Group’s business segment which is based on the Group’s management and internal reporting structure. Segment results and assets include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise corporate assets, other income, selling expenses, administrative expenses and finance costs. The Group’s business operations involve three principal segments: (1) car assembly and other related car services (2) 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 (3) sales of cars, car service centre business. These operations are mainly carried on in Thailand. Below is the consolidated financial information for the years ended December 31, 2013 and 2012 of the Group segment.

117 Annual Report 2013

Weighted average number of shares outstanding during the years ended December 31, 2013 and 2012 are 492,372,797 shares.

Thai Rung Union Car Public Company Limited

Basic 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. Unit :Baht Consolidated Separate financial statements financial statements 2013 2012 2013 2012 Profit for the years attributable to equity holders of the Company 353,686,570 555,789,082 276,506,222 353,247,711

Unit : Million Baht Car assembly and other related car services 2013 Revenue from external customers Intersegment revenues

Sales of cars and car service centre

2013

2012

2013

2012

Elimination of inter-segment revenues

Consolidation

2012

2013

2012

2013

Other

2012

985 20

1,280 9

2,045 272

2,101 249

108 49

117 49

104

2 165

(445)

(472)

3,138 -

3,500 -

1,005

1,289

2,317

2,350

157

166

104

167

(445)

(472)

3,138

3,500

Segment income 260 467 Unallocated income and expenses: Other income Selling expenses Administrative expenses Share of profit from investments in associated companies Corporate income tax Net profit

237

189

(41)

(69)

508

666

181 (78) (248) 56 (54) 365

202 (67) (197) 79 (111) 572

239 1,820 1,573

243 1,428 2,191

3,632

3,862

Total revenues

118

2012

Manufacture of equipment for production of car accessories

Annual Report 2013

Thai Rung Union Car Public Company Limited

Investment property–net Property, plant and equipment-net Unallocated assets

535

464

1,189

899

239 110

243 72

Total assets

- - (14) (7)

The Group’s transfer prices between business segments are described in Note 4. 30. FINANCIAL INSTRUMENTS 30.1 Financial risk management The Group’s financial instruments, as defined under Thai Accounting Standard No. 32 “Financial Instruments: Disclosure and Presentations”, principally comprise cash and cash equivalents, 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. Credit risk The Group is exposed to credit risk primarily with respect to trade accounts receivable, loans, and other receivables. The Group manage the risk by adopting appropriate credit control policies and procedures and therefore does not expect to incur material financial losses. In addition, the Group 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 Statement of financial position.

Interest rate risk The Group’s exposures to interest rate risk relate primarily to their cash at banks, current investments and short-term loans. However, since most of the Group’s financial assets and liabilities have been repaid within one year, the interest rate risk is expected to be minimal. 30.2 Fair values of financial instruments

31. COMMITMENTS 31.1 Operating lease commitments The Group has entered into several lease agreements in respect of the lease of land, office building space, motor vehicles and equipment. As at December 31, 2013 and 2012, future minimum lease payments required under these operating lease contracts were as follows. Unit: Million Baht Consolidated financial statements 2013 2012 Payable Within 1 year 1.21 1.20 1 to 5 years 1.11 1.80 31.2 Bank guarantees As at December 31, 2013 and 2012, the Group has outstanding bank guarantees issued by banks as follows: Separate financial Consolidated financial statement statement Unit: million Unit: million Unit: million Unit: million Yen Dollars Baht Baht December 31, 2013 4.96 Import custom . .46 Purchase of fixed assets 58.55 Guarantee for tax refund 48

Annual Report 2013

A 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. The fair value 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.

119 Thai Rung Union Car Public Company Limited

Since the majority of the Group’s financial instruments are short-term in nature, and current 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 Statement of financial position.

Consolidated financial statement Unit: million Unit: million Unit: million Yen Dollars Baht Electricity use, among others December 31, 2012 Purchase of goods Electricity use, among others

120

Separate financial statement Unit: million Baht

14.59

.

1.68

13.39

2.81

32. CONTINGENT LIABILITIES

Annual Report 2013

Thai Rung Union Car Public Company Limited

As at December 31, 2013, the Group has contingent liabilities as follows: 1) 2)

The Company was sued for the prosecution claim in amount of Baht 240,000. Such case is in process of reconciliation which will be concluded on March 26, 2014 by the court. The Company was sued from the default on contract revocation for the amount of Baht 230,000,000 with interest rate at 7.5% per annum and prosecution claim of Baht 300,000 per day. The Company is on process counter claim of disseisin for the amount of Baht 100,000,000 with interest rate at 7.5% per annum. Such case is in process of reconciliation. Thai Rung Tools and Dies Co., Ltd. (a subsidiary) was sued on 4 cases from breach of the agreements in the total amount of Baht 3,385,002 with interest rate at 7.5% per annum from due date. Such cases are in process of reconciliation and preparing testimony. Thai Rung Tools and Dies Co., Ltd. (a subsidiary) was sued from the breach on employment contract under labour protection in the amount of Baht 15,528,000 with interest rate at 7.5% per annum from due date. The court appoint for hearing defendant’s witness in July 2014. Thai Ultimate Car Co., Ltd. (a subsidiary) was sued by The Crown Property Bureau from breach of the agreement in the amount of Baht 3,878,058 and sued for prosecution claim of Baht 29,518,904 with interest rate 7.5% per annum from due date. Such case is in process of reconciliation.

33. CAPITAL MANAGEMENT The primary objectives 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. According to the Statements of financial position as at December 31, 2013 and 2012, the Group’s debt-to-equity ratio was 0.15:1 and 0.25:1, respectively, and the Company’s was 0.19:1 and 0.33:1, respectively. 34. RECLASSIFICATION OF ACCOUNTS

According to the Statements of financial position as at December 31, 2013 and 2012, the Group’s debt-to-equity ratio was 0.15:1 and 0.25:1, respectively, and the Company’s was 0.19:1 and 0.33:1, respectively. 34. RECLASSIFICATION OF ACCOUNTS Certain accounts in the statement of financial position as at December 31, 2012, which are included in the 2013 financial statements for comparative purposes, have been reclassified to conform to the presentation in the 2013 financial statements. 49

965,698,682 155,310,484

Before reclassify Statement of financial position As at December 31, 2012 Trade and other receivables – net Other non-current assets-net

,, ,,4

(19,000,000) 19,000,000 Unit: Baht Separate financial statements Reclassify

(19,000,000) 19,000,000 -

946,698,682 174,310,484

After reclassify

,, ,,4

35. APPROVAL OF FINANCIAL STATEMENTS These financial statements were authorised for issue by the Company’s Board of Directors on February 25, 2014.

Annual Report 2013

Statement of financial position As at December 31, 2012 Trade and other receivables – net Other non-current assets-net

121 Thai Rung Union Car Public Company Limited

Unit: Baht Consolidated financial statements Before Reclassify After reclassify reclassify

บริษัท ไทยรุ่งยูเนี่ยนคาร์ จำ�กัด (มหาชน)

28/6 หมู่ 1 ซ.เพชรเกษม 81 ถ.เพชรเกษม แขวงหนองค้างพลู เขตหนองแขม กรุงเทพฯ 10160 โทรศัพท์ 0-2814-5034-7, 0-2814-5056-62, 0-2431-0071-2, 0-2420-0076 โทรสาร 0-2814-5030, 0-2814-5033