ANNUAL REPORT 2014 by TJ Tussmaster J

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. 2 Annual Report 2014

Content Company Background Vision / Mission Summary Financial Information Message from the Chairman Board of Directors General Information Nature of Business Risk Factors Shareholders and Management Related Party Transactions Corporate Governance Internal Control Report of the Audit and Corporate Governance 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 Sustainability Report

Thai Rung Union Car Public Company Limited

04 05 06 09 11 19 24 28 33 52 55 69 72 75 76 77 81 83 134

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

4 Annual Report 2014

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

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

Thai Rung Union Car Public Company Limited

Summary Financial Information

(Unit : Million Baht) 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 Shareholders' Equity Per Share Data (Unit: Baht) Earnings (loss) per Share (EPS) Dividend per Share * Book Value per Share Financial Ratios (Unit : %) Net Earnings margin Return on Equity (ROE) Return on Asset (ROA)

2014

2013

2012

2,255.10 2,449.94 2,271.71 178.23

3,138.30 3,374.10 2,955.19 419.62

3,499.58 3,780.84 3,097.31 683.53

152.41

353.69

555.79

1,065.42 3,636.27 424.82 3,211.45

1,088.18 3,629.00 475.97 3,153.03

1,751.44 3,858.89 769.40 3,089.49

0.26

0.72

0.15 5.26

0.40 6.20

1.13 0.60 6.08

6.22 4.95 4.91

10.48 11.70 11.21

14.70 20.01 19.92

Remark * Payment of the dividend payment is subject to approval by the 2015 Annual General Shareholdersâ&#x20AC;&#x2122; Meeting.

6 Annual Report 2014

(Unit : Million Baht)

3,374.10

Total Revenues 2013 2012

3,780.84

2,449.94

2014

(Unit : Million Baht)

555.79 353.69

152.41

2012

2014

2013

Net Earnings (loss) attributable to equity holders of the parent 3,858.89

2012

(Unit : Million Baht) 3,629.00

3,636.27

2013

2014

Total Assets

Thai Rung Union Car Public Company Limited

8 Annual Report 2014

Message from the Chairman Message from the Chairman Thailand’s total vehicle production in 2014 was 1.88 million units, down by 23% on the previous year. Of this total, 1.13 million units were exported, close to the previous year’s figure, while domestic sales, at 0.88 million units, were down by 34% on the previous year as a result of weakening purchasing power, together with political problems and the fact that the domestic economy has still not recovered. For 2015 we expect the Thai automotive industry to produce approximately 2.15 million units, 14% more than in 2014, as the country’s economy and those of the main export markets are on an improving trend. In the longer term, prospects for the Thai automotive industry are still outstanding, as it is the most important production base in ASEAN. The opening up of the ASEAN Economic Community (AEC) free market in 2016, plus the introduction of new excise tax rates in Thailand and the start of Phase 2 of the eco-car project promoting the production of low CO2 emission cars in accordance with world demand should lead to Thailand’s being able to boost auto exports. As for the results of the Thai Rung group of companies in 2014, total consolidated revenues were Bt.2,450 million, and net income was Bt.152.41 million. The fall in earnings compared with 2013 was due to the domestic auto market’s being depressed by the economic situation and the country’s political problems. The Company therefore had to place great emphasis on controlling costs and boosting operating efficiency, as well as on reducing the risks associated with its dependence on a single sector. In this latter regard during 2014 the Company increased its investment in other sectors by setting up two new joint venture companies: Trex Thairung Co. Ltd., to expand its business into various kinds of trucks, such as dump-trucks, cargo vans, trailers, concrete mixer trucks and refrigerated trucks, and Kyowa Thairung Co. Ltd., to diversify into industrial machinery, excavators, construction equipment, agricultural machinery and tractors, etc., for sale both in Thailand and in export markets. In both cases the market looks set to continue growing in the future. The Company is always open to discussions with 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.

Thai Rung Union Car Public Company Limited

The Company strives to carry on its activities 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 Companyâ&#x20AC;&#x2122;s sustainable success, and in 2014 the Company announced its intention of joining Thailand's Private Sector Collective Action Coalition Against Corruption, with a view to confirming confidence in the transparent, fair and ethical conduct of the its business and its determination to combat all forms of corruption. On behalf of the Companyâ&#x20AC;&#x2122;s Board of Directors, I should like to thank our customers, our shareholders, the various organisations and departments both governmental and private, our business partners and also our executives and employees for their constant support, which is a driving force. All the Directors and I will strive wholeheartedly to lead the Company constantly forward and develop and expand its business in a sustainable manner.

Pranee Phaoenchoke Chairman

10 Annual Report 2014

Board of Directors

1 Dr.Pranee Phaoenchoke Chairman of the Board of Directors & President

Mr.Pricha Attavipach

3 Mr.Sompong Phaoenchoke

Ms. Kaewjai Phaoenchoke

Independent Director, Deputy Chairman, Chairman, Audit & Corporate Governance Committee, Chairman, Nomination & Remuneration Committee

Director

Director & Managing Director

Mr. Wuttichai Phaoenchoke Director

Thai Rung Union Car Public Company Limited

6 Mr. Somkiat Nimrawee

Mr. Suvait Theeravachirakul

Independent Director, Audit & Corporate Governance Committee, Nomination & Remuneration Committee, Risk Management Committee

Independent Director, Audit & Corporate Governance Committee, Risk Management Committee

8 Mr. Damri Tunshevavong

9 Mr.Thavorn Chalassthien

Independent Director, Nomination & Remuneration Committee

12 Annual Report 2014

Independent Director, Risk Management Committee

Education and Training

76 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 IOD'S Courses : - none -

Age (years)

13 Report Annual2014 Report 2014 13 Annual

2. Mr.Pricha Attavipach 77 Academic qualifications: Independent Director, Deputy Chairman, Bachelor's Degree in industrial engineering Chairman, Audit & Corporate Governance Committee Chulalongkorn University Chairman, Nomination & Remuneration Committee Master's Degree (MS) in engineering (Industrial Engineering & Management) Number of years in office: 10 Oklahoma State University, USA. Start of term of office: 28 April 2004 National Defence College of Thailand, Class of 1989 IOD'S Courses : Director Certification Program 39/2004 : IOD Finance for Non-Finance Directors 8/2004 : IOD Director Accreditation Program 107/2014 : IOD

Number of years in office: 21 Start of term of office: 26 November 1993

1. Dr.Pranee Phaoenchoke (1) Chairman of the Board of Directors & President

Name-surname/position

The background and designation details of the Board of Directors as of December 31, 2014

Profiles of Directors of the Company

72,000

shares 118,405,725

0.012%

Increase (Decrease)

60,000 0.012%

Note Position

Number of posts occupied in listed companies: 1 1993 - Present Chairman of the Board of Directors & President

Period

Thai Rung Union Car Plc.

Working Experience Company

ThaiUnion RungCar Union CarCompany Public Company Thai Rung Public LimitedLimited

Number of posts occupied in unlisted companies: 18 1960 - Present Director & Chairman Chaicharoenkij Motors Co., Ltd. 1987 - Present " Thai V.P. Corporation Co., Ltd. 1989 - Present " Thai Rung Tools and Dies Co., Ltd. 1991 - Present " Thai V.P. Auto Service Co., Ltd. 1992 - Present " Thai Ultimate Car Co., Ltd. 1992 - Present " V.P. Auto Enterprise Co., Ltd. 1993 - Present " Sinthoranee Property Co., Ltd. 1993 - Present " First Part Co., Ltd. 1994 - Present " Isuzu Chaicharoenkij Motors Co., Ltd. 2001 - Present " Thai Auto Pressparts Co., Ltd. 2002 - Present " Europe-Thai Carrent Co.,ltd. 2004 - Present " Biz Motor Co., Ltd. 2004 - Present " Lexus Auto City Co., Ltd. 2006 - Present " V.P.K. Auto Co., Ltd. 2007 - Present Director Delta-Thairung Co.,Ltd. 2013 - Present " Asia Wealth Securities Co.,Ltd. 2013 - Present " Asia Wealth Holding Co.Ltd. 2014 - Present " Trex Thairung Co.,Ltd. Number of posts occupied in other institutions: none Number of posts occupied in businesses that compete with or are related to that of the Company: none 12,000 1. Indirect held by Mrs.Sriwan Number of posts occupied in listed companies: 5 Attavipach (wife) 2004 - Present Independent Director, Deputy Chairman, Thai Rung Union Car Plc. 2. Increased from stock Chairman, Audit & Corporate Governance dividend only Chairman, Nomination & Remuneration Committee 1999 - Present Director and Audit Committee Siam Cement Plc. 2008 - Present Chairman Thai Sugar Terminal Plc Present " T.S. Flour Mill Plc " " Kaset Thai International Sugar Corporation Plc Number of posts occupied in unlisted companies: 9 2000 - Present Chairman Ruamkijaungthong Warehouse Co., Ltd. 2000 - Present " Pan-Paper 1992 Co., Ltd. 2004 - Present " Ekaratpattana Co., Ltd. Present " T.S.G. Assets Co., Ltd. " " T.S. Oil Industry Co., Ltd. " " Thai Identity Sugar Factory Co., Ltd. " " Ruamphol Enterprise Nakorn Sawan Co., Ltd. 1993 - Present Director H.C. Starck (Thailand) Co., Ltd. 2008 - Present " Siam P.P. International Co., Ltd.

shares (%) during the year. 246,387,500 50.04% (127,981,775)

28 Jan. 2014

Number of shares held TRU by directors and executives

(%) 20.04%

30 Jan. 2015

Profile of Director's of the Company Profile of Director's of the Company

none

Illegal Record

14 Annual Report 2014 14 Annual Report 2014

Number of years in office: 21 Start of term of office: 26 November 1993

3. Mr.Sompong Phaoenchoke Director & Managing Director

2. Mr. Pricha Attavipach (Con't)

Name-surname/position

Education and Training

54 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 (class of 2010) Course in high level security management and administration IOD'S Courses : Director Certification Program 26/2003 : IOD

Age (years)

64,932,825

*62,232,825 2,700,000

10.99%

10.53% 0.46%

(%)

29,872,000 6.07%

27,622,000 5.61% 2,250,000 0.46%

28 Jan. 2014 Note Period

Position

Working Experience Company

Thai Rung Union Car Public Company Limited Thai Rung Union Car Public Company Limited

Number of posts occupied in other institutions: 6 Present Chairman Khunying Phancheun Reunsiri Foundation " " Ajarn Lai-arj Phamarapa Foundation 2001 - Present Specialist Senior Engineering Council of Engineers, Industrial Engineer 2002 - Present Law Councillor Ministry of Labour 2004 - Present Academic Director of the Safety and The Engineering Institute of Thailand Health Vocational Management System 1999 - Present Chairman of the Council Chao Phraya University Number of posts occupied in businesses that compete with or are related to that of the Company: none 34,610,825 Direct held, * at 18 Mar. 2015 Number of posts occupied in listed companies: 2 1993 - Present Indirect held by Mrs. 450,000 Director & Managing Director Thai Rung Union Car Plc. Keawkaow Phaoenchoke (wife) Chairman, Risk Management Committee 2013 - Present 35,060,825 Total Independent Director & Audit Committee The Brooker Group Plc. Number of posts occupied in unlisted companies: 16 2014 - Present Director & Chairman Kyowa Thairung Co.,Ltd. 1987 - Present Director & Vice Chairman Thai V.P. Corporation Co., Ltd. 1992 - Present " Thai Ultimate Car Co., Ltd. 1992 - Present " V.P. Auto Enterprise Co., Ltd. 1993 - Present " First Part Co., Ltd. 1994 - Present " Isuzu Chaicharoenkij Motors Co., Ltd. 2004 - Present " Biz Motor Co., Ltd. 2004 - Present " Lexus Auto City Co., Ltd. 2007 - Present " Delta Thairung Co., Ltd. 2014 - Present " Trex Thairung Co.,Ltd. 1989 - Present Director & Managing Director Thai Rung Tools and Dies Co., Ltd. 1991 - Present " Thai V.P. Auto Service Co., Ltd. 2001 - Present " Thai Auto Pressparts Co., Ltd. 1986 - Present Director Chaicharoenkij Motors Co., Ltd. 1996 - Present " Sinthoranee Property Co., Ltd. 2004 - Present " Thai Auto Conversion Co., Ltd. Number of posts occupied in other institutions: 5 Present Director Thai Listed Companies Association " " Thai Automotive Industry Association " " Thai Auto-parts Manufacurers Association " " Thammasat University Commerce and Accountancy Alumni ( T.C.A.A.) " Vice President Thai Automobile Dealers Association Number of posts occupied in businesses that compete with or are related to that of the Company: none

during the year.

Increase (Decrease)

Number of shares held TRU by directors and executives

(%)

30 Jan. 2015

none

Illegal Record

15 Annual Report 2014

Number of years in office: 18 Start of term of office: April 1996

5. Mr. Wuttichai Phaoenchoke Director

Number of years in office: 14 Start of term of office: 20 April 2000

4. Ms. Kaewjai Phaoenchoke Director

Name-surname/position

Education and Training

45 Academic qualifications: Master's degree in Automotive Engineering, Coventry University, U.K. IOD'S Courses : - none 96,528,225

16.34%

31,201,500 6.34%

shares (%) 32,639,450 6.63%

28 Jan. 2014

65,326,725

during the year. 65,614,315

Increase (Decrease)

Number of shares held TRU by directors and executives

(%) 16.63%

30 Jan. 2015

shares 50 Academic qualifications: 98,253,765 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 Education Program "Leadership" No.1, University of Cambridge, England Positive Psychology : YPO (Thailand) Strategic Human Resource Management No.3 Thammasat University The Boss Executive Educational Program No. 38 Management and Psychology National Defence College Class of 2013 IOD'S Courses : Director Certification Program 29/2003 : IOD

Age (years) Note Period

Position

Company

Thai Rung Union Car Public Company Limited

Number of posts occupied in listed companies: 1 2000 - Present Director & Executive Board Thai Rung Union Car Plc. Number of posts occupied in unlisted companies: 15 1992 - Present Director & Chief Executive Officer Thai Ultimate Car Co., Ltd. 1993 - Present " Thai V.P. Corporation Co., Ltd. 1993 - Present " First Part Co., Ltd. 1994 - Present " Isuzu Chaicharoenkij Motors Co., Ltd. 1996 - Present " V.P. Auto Enterprise Co., Ltd. 2004 - Present " Biz Motor Co., Ltd. 2006 - Present " V.P.K. Auto Co., Ltd. 1988 - Present Director Chaicharoenkij Motors Co., Ltd. 1991 - Present " Thai V.P. Auto Service Co., Ltd. 1991 - Present " Thai Rung Tools and Dies Co., Ltd. 1993 - Present " Sinthoranee Property Co., Ltd. 2001 - Present " Thai Auto Pressparts Co., Ltd. 2013 - Present " Asia Wealth Securities Co.,Ltd. 2013 - Present " Asia Wealth Holding Co.Ltd. 2014 - Present " Trex Thairung Co.,Ltd. Number of posts occupied in other institutions: 1 Present Advisory Board Thai Car Rental Association Number of posts occupied in businesses that compete with or are related to that of the Company: none Number of posts occupied in listed companies: 1 1996 - Present Director Thai Rung Union Car Plc. Number of posts occupied in unlisted companies: 11 1994 - Present Director & Managing Director Isuzu Chaicharoenkij Motors Co., Ltd. 2002 - Present " Sinthoranee Property Co., Ltd. 2002 - Present " Chaicharoenkij Motors Co., Ltd. 2004 - Present " Biz Motor Co., Ltd. 2003 - Present Director & Deputy Managing Director Thai V.P. Auto Service Co., Ltd. 1997 - Presnt Director Thai Ultimate Car Co., Ltd. 2001 - Present " Thai Auto Pressparts Co., Ltd. 2002 - Present " Thai V.P. Corporation Co., Ltd. 2002 - Present " Thai Rung Tools and Dies Co., Ltd. 2002 - Present " V.P. Auto Enterprise Co., Ltd. 2014 - Present " Kyowa Thairung Co.,Ltd. Number of posts occupied in other institutions: none Number of posts occupied in businesses that compete with or are related to that of the Company: none

Working Experience

none

Illegal Record

Education and Training shares 96,000

(%) 0.016%

30 Jan. 2015

16 Annual Report 2014 16 Annual Report 2014

8. Mr. Damri Tunshevavong 61 Academic qualifications: Independent Director Becheor's degree in electrical engineering, Chulalongkorn University Member, Nomination & Remuneration Committee Advanced Management Program Harvard University, USA. Capital Market Academy (class of 2009) Number of years in office: 2 IOD'S Courses : Start of term of office: 28 February 2012 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 -

Increase (Decrease)

15,012 0.003%

3,002

shares (%) during the year. 80,000 0.016% 16,000

28 Jan. 2014 Note

Increased from stock dividend only

Number of shares held TRU by directors and executives

7. Mr. Suvait Theeravachirakul 55 Academic qualifications: 18,014 0.003% Independent Director Bachelor's degree in Business Administration, Accounting, Ramkhamhaeng University Member, Risk Management Committee Master's degree in MBA, Wagner College, New York NY, U.S.A. Member, Audit & Corporate Governance Committee Capital Market Academy No.10 Anti-Corruption Strategic Management Number of years in office: 9 course for Senior Executives, Class 5 Start of term of office: 11 August 2005 Sanya Dharmasakti Anti-Corruption Institute IOD'S Courses : Director Certification Program 9/2001 : IOD Audit Committee Program 15/2006 : IOD Successful Formulation & Execution of Strategy (SFE) 2010 : IOD

6. Mr. Somkiat Nimrawee 63 Academic qualifications: Independent Director Bachelor's degree in Finance & Accounting, Member, Audit & Corporate Governance Committee Thammasart University Member, Nomination & Remuneration Committee Member, Risk Management Committee IOD'S Courses : Director Accreditation Program 10/2004 : IOD Number of years in office: 21 Start of term of office: 26 November 1993

Name-surname/position

Age (years) Period

Position

Company

Thai Rung Union Car Public Company Limited Thai Rung Union Car Public Company Limited

Number of posts occupied in listed companies: 1 1993 - Present Independent Director Thai Rung Union Car Plc. Member, Risk Management Committee Member, Audit & Corporate Governance Committee Member, Nomination & Remuneration Committee Number of posts occupied in unlisted companies: 3 2004 - Present Managing Director Dan-Thai Equipment Co., Ltd. 2004 - Present " Dan-Thai Handing System Co., Ltd. 2006 - Present " Dan-Thai Engineering Co., Ltd. Number of posts occupied in other institutions: none Number of posts occupied in businesses that compete with or are related to that of the Company: none Number of posts occupied in listed companies: 6 2005 - Present ndependent Director, Member, Risk Management CommitteeThai Rung Union Car Plc. Member, Audit & Corporate Governance Committee 2002 - Present Director and CEO MBK Plc. President & Member, Executive Committee 2011 - Present Independent Director and Member, Audit Committee Golden Lime Plc. 2007 - Present Independent Director & Member, Audit Committee IFS Capital (Thailand) Plc. 2009 - Present Vice Chairman of the Executive Committee Patum Rice Mill and Granary Plc. 2000 - Present Member of the Executive Committee Royal Orchid Hotel (Thailand) Plc. Number of posts occupied in unlisted companies: 67 1994 - Present Director Vachirachat Co.,Ltd. Present Chairman of the Board of Directors and Director The subsidiaries and associates of MBK Plc. total 66 companies Number of posts occupied in other institutions: 1 Present President NASSET Property Fund 1 Number of posts occupied in businesses that compete with or are related to that of the Company: none Number of posts occupied in listed companies: 3 2012 - Present Independent Director Thai Rung Union Car Plc. Member, Nomination & Remuneration Committee Present Director Thai Cane Paper Plc. Present Advisor to the President & CEO Siam Cement Group Plc. Number of posts occupied in unlisted companies: none Number of posts occupied in other institutions: 1 " Director Iron and Steel Institute of Thailand Number of posts occupied in businesses that compete with or are related to that of the Company: none

Working Experience

none

Illegal Record

Education and Training

62 Academic qualifications: Bachelor of Industrial Technology (Mechanical Technology) Rajamangala University of Technology Krungthep IOD'S Courses : - none -

Age (years)

17 Annual Report 2014

Note (1) Dr. Pranee - Mother of Mr. Sompong, Mrs. Kaewjai and Mr. Wuttichai Phaoenchoke (2) Mr. Sompong - Child of Dr. Pranee and brother of Mrs. Kaewjai and Mr. Wuttichai Phaoenchoke

(3) Mrs. Kaewjai - Child of Dr. Pranee and Sister of Mr. Sompong and Mr. Wuttichai Phaoenchoke (4) Mr. Wuttichai - Child of Dr. Pranee and brother of Mr. Sompong and Mrs. Kaewjai Phaoenchoke

Number of years in office: 1 Start of term of office: 22 April 2013

9. Mr.Thavorn Chalassthien Independent Director Risk Management Committee

Name-surname/position shares -

shares -

(%)

28 Jan. 2014 during the year. -

Increase (Decrease)

Number of shares held TRU by directors and executives

(%)

30 Jan. 2015 Note Position

Company

Illegal Record

Thai Rung Union Car Public Company Limited

Number of posts occupied in listed companies: 1 none 2013 - Present dependent Director & Member, Risk Management CommitteThai Rung Union Car Plc. Number of posts occupied in unlisted companies: 1 Present Senior Advisor, Administrative Division Denso (Thailand) Co.Ltd. Number of posts occupied in other institutions: 18 Present Executive Board & Deputy Secretary The Federation of Thai Industrie " Honorary Chairman of Auto-Part Industry Club The Federation of Thai Industrie " Senior Vice President Thai Automotive Industry Association " Vice President Thai Auto-parts Manufacurers Association " Vice President Organizational Perfoemance Management Technology Promotion Association (Thai-Japan) The Strategy and Labour Development Subcommitee, Automotive " Chairman and Parts Industrial Ministry of Labour " Board of Director Thai-Nichi Institute of Technology " Qualified member Thailand Professional Qualification Institute (Public Organization) " Board of Director Office of the Vocational Education Commission, Ministry of Education " Board of Director Thai - German Institute " Director The Association of QC Headquaters of Thailand " " Academic Honorary, Rajamangala University of Technology, Bangkok " " Academic Honorary, Rajamangala University of Technology, Thanya Buri " " Mould Industrial Development, Ministry of Industry " " Department of Skill Development, Ministry of Labour " " Pathumwan Institutite of Technology " Advisor Automotive Engineers Thailand " " Thai - Nichi Institute of Technology Number of posts occupied in businesses that compete with or are related to that of the Company: none

Period

Working Experience

General Information General Information Listed Company

Thai Rung Union Car Public Company Limited Companies Register Number 0107536001435

Registered share capital

Bt. 590,847,356 divided into 590,847,356 ordinary shares of Bt.1 each.

Paid-up share capital

Bt. 590,846,931

Business Activities

- Product design, research and development - Manufacture of dies and jigs - Manufacture of automotive parts and seats - Contract vehicle painting and assembly, vehicle modification

Address

304 Macharoen Road, Nong Khang Phlu, 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

Website

http://www.thairung.co.th

Securities Registration

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

Auditors

Mr Atipong Atipongsakul CPA No. 3500 and/or Mr Vichai Ruchitanont CPA No. 4054 and/or Mr Sathien Vongsnan CPA No. 3495 and/or Ms Kulthida Pasurakul CPA No. 5946 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

Thai Rung Union Car Public Company Limited

Group Structure of Thai Rung Union Car Public Company Limited and subsidiaries as at 31 December 2014 Thai Rung Union Car Plc. (TRU)

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

Thai Auto Conversion Co., Ltd. 20%

Thai Auto Pressparts Co., Ltd. 91% Thai V.P. Auto . Service Co., Ltd. 94% Thai Ultimate Car Co., Ltd. 99.53 %

Delta Thairung Co., Ltd. 30% Kyowa Thairung Co., Ltd. 49% Trex Thairung Co., Ltd. 40%

General Information on Subsidiaries and Joint Venture Companies Subsidiary Companies ď&#x201A;ˇ 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

304/1 Macharoen Road, Nong Khang Phlu, Nong Khaem, Bangkok 10160 Tel: 0-2431-0071-2, 0-2431-0065, 0-2420-0076 Fax: 0-2814-5030, 0-2420-3664

20 Annual Report 2014

 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

 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., Nong khang phlu, Nong Khaem, Bangkok 10160 Tel: 0-2420-6708, 0-2420-4823, 0-2812-1445-6 Fax: 0-2420-1601

Website

www.trservice.in.th

 Thai Ultimate Car Co., Ltd. Registered share capital

Bt.25,000,000 issued and fully paid up, divided into 25,000 ordinary shares of Bt.1,000 each

Business Activities

Providing automotive, consulting and general administrative and organisational services

Address

304/1 Macharoen Road, Nong Khang Phlu, Nong Khaem, Bangkok 10160 Tel: 0-2431-0071-2, 0-2431-0065, 0-2420-0076 Fax: 0-2812-1992

Thai Rung Union Car Public Company Limited

Joint Venture Companies ď&#x201A;ˇ 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

ď&#x201A;ˇ 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

22 Annual Report 2014

ď&#x201A;ˇ Trex Thairung Co., Ltd. Registered share capital

Bt.550,000,000 issued and fully paid up, divided into 5,500,000 ordinary shares of Bt.100 each (as at 10 March 2015)

Business Activities

Manufacture of various kinds of trucks body, such as dump-trucks, cargo vans, trailers, concrete mixer trucks and refrigerated trucks, etc. and after-sale service

Address

10/95-97 Sukhumvit Soi 13, Khlong Toei Nuea, Wattana, Bangkok 10110 Tel: 0-2646-2525 Fax: 0-2168-7744

ď&#x201A;ˇ Kyowa Thairung Co., Ltd. Registered share capital

Bt.20,000,000 issued and fully paid up, divided into 200,000 ordinary shares of Bt.100 each

Business Activities

Manufacture of cabins and parts for industrial machinery, excavators, construction equipment, agricultural machinery and tractors, etc.

Address

304 Macharoen Road, Nong Khang Phlu, 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

Thai Rung Union Car Public Company Limited

Nature of Business 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 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 automobile customers, the industrial and agricultural machinery sectors, and modification of vehicles for multi-purpose vehicles and special purpose vehicles such as TR Transformer, Military Utility Vehicle 4 (MUV4) and rapid response rescue vehicles.  Thai Rung Tools and Dies Co Ltd (TRT) makes dies and jigs. It has received BOI promotional privileges for investments.  Thai Auto Pressparts Co Ltd (TAP) started business in June 2002 at its factory at Amata City Industrial Estate, Amphoe Pluak Daeng, Rayong Province, thus considerably expanding the group’s parts production capacity. Thai Auto Pressparts, which has been granted BOI promotional privileges for its investments, supplies automotive parts to the customer group formed by auto and motorcycle manufacturers in the Eastern Seaboard and surrounding areas, and also caters to the export market. The new factory in Rayong province started commercial operation in 2012.

24 Annual Report 2014

 Thai V.P. Auto Service Co Ltd (TVS) provides after-sales service for Thai Rung’s multi-purpose vehicles. In 2005 it expanded its activities to include plastic accessories under the name “Parto”. In 2008 it extended its range of services to include the installation of LPG and CNG vehicle conversion units. In 2012, The Company started paint work to cater to the growth in customer demand.  Thai Ultimate Car Co Ltd (TUC) a subsidiary of TVS which it acquired in 2001. Its current activity consists of providing automotive consulting and general administrative and organisational services.  Thai Auto Conversion Co Ltd (TAC) is a joint venture with the Toyota Motor Group for product development and fitting of accessories for special purpose vehicles.  Delta Thairung Co Ltd (DTC) is a joint venture with Delta Kogyo of Japan, newly established in 2007 to manufacture auto seats and parts and other equipment for vehicles. Its factory is at Amata City Industrial Estate, Amphoe Pluak Daeng, Rayong Province.  Kyowa Thairung Co Ltd (KTR) is a joint venture with Kyowa Sangyo of Japan, newly established in 2014 to manufacture of cabins and parts for industrial machinery, excavators, construction equipment, agricultural machinery and tractors, etc.  Trex Thairung Co Ltd (TTR) is a joint venture with 3 partners, Nippon Trex and Kyokuto Kaihatsu Kogyo of Japan and Mitsiam International Co. Ltd., newly established in 2014 to manufacture various kinds of trucks body, such as dump-trucks, cargo vans, trailers, concrete mixer trucks and refrigerated trucks, etc. and after-sale service. Its factory is at Amata City Industrial Estate, Amphoe Pluak Daeng, Rayong Province.

The Company’s group policy is for each subsidiary to strive to operate profitably in its own right and to be self-sufficient in its particular activities within the overall policy of the parent.

Thai Rung Union Car Public Company Limited

3.1 Breakdown of Total Revenues, Thai Rung Union Car Plc and Subsidiaries, 2012-2014 Unit: Million Bt.

Sales and service

Performed % of by shares held

2014

2013

2012

Million Bt

Revenue from the production of TRU, TAP, 91, 94 1,448.44 vehicle manufacturing equipment TRT Revenue from vehicle assembly and TRU 679.36 other vehicle-related contract work Revenue from sales of vehicles and TRU, TVS, 94, 127.31 from service centres TUC 99.53* Total revenue from Sales & 2,255.11 service Other income 194.83 Total Revenues 2,449.94

2,045.54

2,100.68

984.71

1,280.34

108.05

118.56

3,138.30

3,499.58

8 100

236.51 3,374.81

7 100

281.26 3,780.84

7 100

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

- Industry trends and future competitive situation The dynamic of the automotive industry and the global economic centre is shifting from West to East. Asia plays an increasingly important role as a significant and growing market and a major global production base. Apart that , the coming into force of the ASEAN Economic Community (AEC) in 2016 will stimulate growth in this industry as well as the relocation of more automakers from Japan and Europe to this region. As a result, business operators must adapt themselves to cater to the growth and intense competition. The Companyâ&#x20AC;&#x2122;s management strategy in 2015 will continue to focus on OEM, contract assembly and painting and vehicle modification, as well as expanding parts making for agricultural machinery. The

26 Annual Report 2014

2014 when it successfully set up two new joint venture companies with Japanese partners, to expand its business into various kinds of trucks, such as dump-trucks, cargo vans, trailers, concrete mixer trucks and refrigerated trucks, and to diversify into industrial machinery, excavators, construction equipment, agricultural machinery and tractors, etc., for sale both in Thailand and in export markets. In both cases the market looks set to continue growing in the future given the continuing high demand for trucks and the opening up of the ASEAN Economic Community (AEC) free market in 2016 which will lead to further growth in transport requirements in the region and a greater role being played by trucks in the automotive industry. 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. Apart from this the Company is also committed to contributing to taking care of the environment, as shown by its ISO 9001:2008, ISO/TS 16949:2009 and ISO 14001:2004 certification, and to manufacturing in accordance with customersâ&#x20AC;&#x2122; needs, in a timely manner, keeping its costs within targets and using appropriate technology in the design and production processes, by means of efficient management, and raising the level of knowledge and capability of employees at all levels in order to keep in step with changes in the outside world, while at the same time ensuring a good working environment, safety at work, respect for the environment and social responsibility. In terms of corporate governance, the Company conducts its business at the level of its Board of Directors, its management and employees in line with the corporate governance guidelines of the SET.

Thai Rung Union Car Public Company Limited

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 Companyâ&#x20AC;&#x2122;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 throughoutthe 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 Companyâ&#x20AC;&#x2122;s risk management systems as being adequate and appropriate for the conduct of the organisationâ&#x20AC;&#x2122;s business and the achievement of its objectives. In 2014 the Company succeeded in increasing the efficiency with which it controlled the risks associated with possible effects of both atmospheric and noise pollution, investing 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 brings import duty down to zero, increasing opportunities for foreign brands to establish themselves in the Thai market, which would increase competition, especially with the implementation of free trade under the AEC in late 2015. 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:

28 Annual Report 2014

The Company focuses on the area of multi-purpose vehicle research and development, striving for modern features and quality in line with its target customer groupsâ&#x20AC;&#x2122; needs. The Company has also conducted studies on developing a business for various kinds of special purpose vehicles such as TR Transformers, 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 opened two new showrooms of its own, on Phetkasem Road and Vibhavadi Road, 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 brings import duty down to zero and thus increases manufacturersâ&#x20AC;&#x2122; options in terms of importing parts instead of having them made in Thailand. Thai auto parts makers are faced with tougher competition on price and quality, from both domestic and foreign producers. In order to spread the risk and mitigate any effect that might arise from the various risk factors in the parts making and contact assembly business the Company has established guidelines as follows: - The Company continues to foster its relationships with its long-standing major customers, whilst at the same time seeking new customers from other sectors such as premium level motorcycles, which is a niche market with high added value, parts for construction tools, industrial and agricultural machinery, or other businesses beyond the auto industry such as electronic components, and also to broaden the customer base to other countries such as China, India and Australia so as to spread the risks in terms of sources of work. It also arranges programmes of marketing activities aimed at enhancing customer relations in general throughout the year, as well as establishing new target customer groups every year. - We provide a one stop service for plastic parts, painting, contract assembly and modification work from research and design through to finished parts. - The Company is always on the look-out for possible foreign business alliances with a view to increasing its know-how in the areas of production technology and more efficient machinery so as to prepare for the future, and to joint investment and expanding into additional related businesses, its policy being to seek work with high added value.

Thai Rung Union Car Public Company Limited

1.3 Dies and Jigs In 2014 the volume of die and jig making work slightly increased from the new models, however, to reduce the uncertainty of the future, 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 and big trucks. In order to spread the risk and mitigate any effect that might arise from the various risk factors in the die and jig making business the Company has established guidelines as follows: - The Company has carried out investments to improve the efficiency of the production process so as to meet the many and varied customer requirements and at the same time to improve chances of winning the big size of die that have the high value added and less competitor. - The Company has a project to increase automation of the production process so as to lessen the impact of shortages of skilled labour, and has also arranged training courses aimed at enhancing personnel capability. - To build dies and jigs on a tier-two basis for tier-one suppliers overseas, e.g. Europe, America, who need to outsource work to countries with lower production costs. - To provide a one stop service for research, design, modification, right through to dies, jigs and other production equipment. - Boost level of die and jig design and production for turn-key projects through alliance with foreign partner so as to be able to enter more overseas tenders - Build up a network of business allies in Thailand so as to cater to the volume of new projects coming on stream, increase production capacity and be able to take on turn-key projects overseas Nevertheless in order to spread the risks in all three business units, the Company also strives to diversify its business, both to reduce the risk of business concentration and to broaden the revenue base. Examples are: - Expanding the business to include the production and sale of vacuum mould plastic parts including plastic accessories under the name â&#x20AC;&#x153;Partoâ&#x20AC;?, a proprietary brand owned by the Company, including growing sales on an OEM basis, so as to respond comprehensively to customersâ&#x20AC;&#x2122; needs. - 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 - In 2014, the Company increased its investment in other sectors by setting up two new joint venture companies, to expand its business into various kinds of trucks, such as dump-trucks, cargo vans,

30 Annual Report 2014

trailers, concrete mixer trucks and refrigerated trucks, and to diversify into industrial machinery, excavators, construction equipment, agricultural machinery and tractors, etc. 2. Financial Risks 2.1 Credit risk The Group is exposed to credit risk primarily with respect to trade accounts receivable, loans, and other receivables. The Group manages 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. 2.2 Interest rate risk The Groupâ&#x20AC;&#x2122;s exposures to interest rate risk relate primarily to their cash at banks, current investments and short-term loans. However, since most of the Groupâ&#x20AC;&#x2122;s financial assets and liabilities have been repaid within one year, the interest rate risk is expected to be minimal. 3. Legal risk This concerns the risk of being sued for damages by consumers under product liability legislation as result of unsafe or poor quality products made by the Company The Company takes this risk seriously and has accordingly announced a policy on product safety, establishing a working committee and assigning it the duty and responsibility of ensuring compliance with the law, arranging training for management and employees on the law and making compliance mandatory for all employees. For the law as it relates to automotive industrial factories a special unit will be responsible for ensuring strict compliance with the law. 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 peopleâ&#x20AC;&#x2122;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

Thai Rung Union Car Public Company Limited

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 also 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.

32 Annual Report 2014

Shareholders and Management Shareholders and Management ď&#x201A;ˇ

Shareholders

Major Shareholders as at 30 January 2015, last date on which the share register was closed. No. 1. 2. 3. 4. 5. 6. 7. 8. 9.

Name

Dr Pranee Phaoenchoke Ms Kaewjai Phaoenchoke Mr Wuttichai Phaoenchoke Mr Sompong Phaoenchoke* CITIBANK NOMINEES SINGAPORE PTE LTD-S.A PBG CLIENTS SG Tisco Securities Co Ltd Mr Theerapong Namto The Thailand Securities Depository Co Ltd, for the depositor Mr Pattanasorn Phaoenchoke

% of total shares

118,405,725 98,253,765 96,528,225 94,932,825 27,926,310 10,800,000 8,512,100 8,485,100 7,278,240

20.04% 16.63% 16.34% 16.07% 4.73% 1.83% 1.44% 1.44% 1.23% 10. Mr Korrawut Phaoenchoke 1.22% 7,200,000 TOTAL 478,322,290 86.96% Note * Mr Sompong Phaoenchoke holds 92,232,825 shares, his wife Mrs Kaewkao Phaoenchoke holds 2,700,000 shares.

ď&#x201A;ˇ 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:

Thai Rung Union Car Public Company Limited

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

34 Annual Report 2014

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. The authorisation of any transaction in which a Director is an interested party or has a conflict of interest, which requires approval by a meeting of shareholders.

2) Powers and duties of the Audit 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.

Thai Rung Union Car Public Company Limited

12. To hold quarterly meetings to monitor the Company’s results in the area of corporate governance and make recommendations for improvements. 13. To perform such other tasks as may be assigned by the Company’s Board of Directors and accepted by the Committee. 3) Powers and Duties of the Executive Committee 1. To control and take care of the general conduct of the Company’s business and perform duties assigned to it by the Company’s Board of Directors in order to achieve the Company’s objectives. 2. To direct and monitor the successful implementation of policies and working plans assigned by the Company’s Board of Directors to the various administrative departments. 3. To examine, consider and authorise important and urgent business within the scope of its powers and duties and monetary limitation determined by the Company’s Board of Directors but in any case not exceeding Bt.400m. 4. To establish financial policies and supervise and monitor the administration of all financial work, including all business conducted with financial institutions, with a view to optimising efficiency. 5. To consider and authorise transactions within the Company’s scope of business. 6. To perform such other duties as may be assigned by the Company’s Board of Directors. The scope of the powers and duties mentioned shall not extend to the authorisation of any transaction in which the executive board or an individual is an interested party or involving a conflict of interest on the part of the executive board or an individual, nor any related party transaction nor the acquisition or disposal of listed Company’s assets, in accordance with the regulations of the Stock Exchange of Thailand 4) Powers and duties of the Risk Management Committee 1. To establish a policy and framework for managing the Company's overall risk situation, covering the various risks that might affect the Company's results and reputation. 2. To establish strategies which are in accordance with the Company's overall risk management policy and which enable risks to be gauged, monitored, taken care of and kept at appropriate levels, including the setting up of advance warning systems.

36 Annual Report 2014

3. To review the adequacy and effectiveness of risk management policies and systems and monitor adherence to those policies on an ongoing basis so as to enhance the prudence, security and efficiency of the Company's overall risk management. 4. The Risk Management Committee has the power to establish and define the roles of sub-committees and working committees for managing the various kinds of risk as it sees fit, and all such committees shall report directly to the Risk Management Committee. 5. The Committee is empowered to call for documents and information and to require individuals to provide facts for consideration so as to be able to achieve its objectives. 6. To communicate with the Audit Committee in order to ensure that risk management systems are in line with internal controls and in accordance with policies and strategies that have been established. 7. To report to the Board on risks and risk management. 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.

Thai Rung Union Car Public Company Limited

1.2 List of names of Company Directors 1) Board of Directors As at 31 December 2014 all nine positions on the Board of Directors were occupied as follows. Name Position 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. Somkiat Nimrawee Independent Director 7. Mr. Suvait Theeravachirakul Independent Director 8. Mr. Damri Tunshevavong Independent Director 9. Mr. Thavorn Chalassthien* Independent Director Mr. Sakchai Komgris Company Secretary and Secretary to the Board of Directors * Note: Mr. Thavorn Chalassthien was appointed an Independent Director on 24 February 2015. Quorum for Board Meetings 1. A quorum for a meeting of the Board of Directors is constituted by not less than half the total number of Board of Directors. 2. Resolutions are passed by a simple majority of votes by Directors present, each Director having one vote. 3. At each Annual General Meeting of the Company at least one third of the Directors, or if the number of Directors is not divisible by three then the nearest number to one third, must retire, the longest serving Directors retiring first. Directors retiring by rotation may be re-appointed for a further term of office. 2) Audit and Corporate Governance Committee As at 31 December 2014 the Companyâ&#x20AC;&#x2122;s Audit and Corporate Governance Committee was composed of three independent directors as follows: Name Position 1. Mr. Pricha Attavipach Chairman of the Audit and Corporate Governance Committee /1 2. Mr. Suvait Theeravachirakul Member of the Audit and Corporate Governance Committee 3. Mr. Somkiat Nimravee Member of the Audit and Corporate Governance Committee /2 Mr. Anucha Sinsawat Secretary to the Audit and Corporate Governance Committee

38 Annual Report 2014

Note

Mr. Suvait Theeravachirakul who has knowledge and experience in auditing the financial statements of the company. /2 Mr. Anucha Sinsawat was appointed a Secretary to the Audit and Corporate Governance Committee on 24 February 2015

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 2014 the Company’s Executive Committee consisted of four Directors, as follows: Position Name 1. Dr. Pranee Phaoenchoke President 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 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. 4) Risk Management Committee As at 31 December 2014 the Company’s Risk Management Committee was composed of six members, as follows:

1. 2. 3. 4. 5. 6.

Name Mr. Sompong Phaoenchoke Mr. Somkiat Nimrawee Mr. Suvait Theeravachirakul Mr. Thavorn Chalassthien Mr. Sakchai Komgris Mr. Phakkawat Suwanmajo

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

6. Mr. Phakkawat Suwanmajo

Member of and Secretary to the Risk Management Committee

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 2014 the Company’s Nomination and Remuneration Committee was composed of three independent directors as follows: Position Name 1. Mr. Pricha Attavipach Chairman of the Nomination and Remuneration Committee 2. Mr. Damri Tanshevavong Member of the Nomination and Remuneration Committee 3. Mr. Somkiat Nimrawee Member of the Nomination and Remuneration Committee Mr. Sakchai Komgris Secretary to the Nomination and Remuneration Committee Members of the Nomination and Remuneration Committee serve terms of two years. A quorum for a meeting of the Remuneration Management Committee is constituted by not less than half the total number of Members. Resolutions are carried by the affirmative votes of not less than half the total number of Members present. 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: Dr. Pranee Phaoenchoke Mr. Sompong Phaoenchoke Ms. Kaewjai Phaoenchoke Mr. Wuttichai Phaoenchoke

40 Annual Report 2014

1.3 Criteria for Appointment of Independent Directors The selection process for Independent Directors can be seen in the heading concerning criteria for selection of Directors and Administrators. Independent Directors must have qualities in accordance with the Company’s definition of Independent Director which in turn is in accordance with that of the SEC, as follows. Characteristics and definition of independent director of Thai Rung Union Car Plc 1. Does not hold more than 1% of the total number of voting shares in the parent Company, or of any of its subsidiaries or joint venture companies or in any entity likely to give rise to a conflict of interest, shares held by related persons to be included in the calculation in accordance with directive 258 of the Securities Act. 2. Does not take part in administering the work, is not a contractor or an employee or consultant in receipt of a regular salary and is not in a position to exert control over the Company, its subsidiaries, joint ventures or fellow-subsidiaries or on any entity likely to give rise to a conflict of interest (at present, and in the two years prior to his appointment.) 3. Does not have business dealings with the Company: 3.1 Is not an auditor of the Company. 3.2 Does not provide other professional services to the Company such as legal or financial consultancy or appraisal worth more than Bt.2m per year. 3.3 Does not have habitual related party transactions by way of rent or lease, whether as lessor or lessee, of real estate, or concerning assets/services or the receipt or provision of financial assistance with a value exceeding Bt.20m or 3% of NTA, whichever is the lower, including transactions carried out in the one year prior to the carrying out of any given transaction. He must not have business relations as defined in 3.1 to 3.3 above at present, nor in the two years prior to his appointment except where there is necessary and proper reason and in any case not continuously or constantly. An Independent Director or Audit Committee Member may have relations that go beyond those stipulated while performing his office, but only after obtaining the unanimous prior approval of the Company’s Board of Directors and subject to the relationship being disclosed per Form 56-1, in the Annual Report and in the letter of invitation to the Shareholders’’ Meeting in the event that the Shareholders' Meeting is to be asked to renew the term of office of the Independent Director or Audit Committee Member concerned.

Thai Rung Union Car Public Company Limited

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 fellowsubsidiaries or entities likely to have a conflict of interest on a collective decision basis 1.4 Number of Board Meetings held and individual Directors’ attendance record The following table shows a summary of the number of meetings held in 2014 – Board meetings, meetings of Board Committees and Meetings of Shareholders - and individual Directors’ attendance record. Meetings attended / Meetings held Nomination & Risk Company Executive Audit & Attendance Board of Committee Corporate Remuneration Management at Name Directors Governance Committee Committee Shareholder Committee s’ Meetings 1. Dr. Pranee Phaoenchoke 5/6 3/3 1/1 2. Mr. Sompong Phaoenchoke 6/6 3/3 4/4 1/1 3. Ms. Kaewjai Phaoenchoke 6/6 3/3 1/1 4. Mr. Wuttichai Phaoenchoke 5/6 3/3 1/1 5. Mr. Pricha Attavipach 6/6 4/4 2/2 1/1 6. Mr. Somkiat Nimrawee 6/6 4/4 1/2 4/4 1/1 7. Mr. Thavorn Chalassthien 6/6 4/4 1/1 8. Mr. Damri Tunshevavong 4/6 1/2 0/1 9. Mr. Suvait Theeravachirakul 6/6 4/4 4/4 1/1 10. Mr. Sakchai Komgris (Secretary) 6/6 3/3 2/2 4/4 1/1 11. Mr. Phakkawat Suwanmajo 4/4 4/4 -

42 Annual Report 2014

1.5 Company Administrators As at 31 December 2014 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. Takashi Tajima Senior Deputy Managing Director 4. Mr. Wuttichai Phaoenchoke Assistant Managing Director, Research & Development 5. Mr Sakchai Komgris Assistant Managing Director, Administration and Company Secretary 6. Mr. Lim Wee Ern Assistant Managing Director, Export sales department 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

Thai Rung Union Car Public Company Limited

Organization

Thai Rung Union Car Public Company Limited

Audit and Corporate Governance Committee

Board Of Directors

Risk Management Committee

Executive Committee President Managing Director

Health, Safety and Environment Committee

Business Line

Administration Line

Sales, Marketing & Business Development Line Business Development Department

Internal Audit & Quality System Department

Business

Human Resourse

Sales & Marketing

Procurement Department

Human Resource Department

OEM Sales & Export Department

Accounting & FinanceDepartment

Training & Human Development Department

Sales & Marketing Department

InformationTechnology Department

General Affairs Department

44 Annual Report 2014

Company Secretary

Nomination and Remuneration Committee

Assistant Managing Director

Factory Line

Factory Productivity Improvement

Office of Managing Director Department

Research & Development Department

Production Planning & Control Department Quality Assurance Department Production Department Production Engineering Department Facility Engineering Department Part Production Department

"as at 1 March 2015"

Thai Rung Union Car Public Company Limited

1.6 Business dealings or professional services between Independent Directors and the Company During the year 2014 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 (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 Appointment 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.

46 Annual Report 2014

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.

3. Directors’ and Senior Managers’ Remuneration The Company has established an appropriate and fair remuneration policy for Directors and Senior Managers. The Nomination and Remuneration Committee has the duty of reviewing and considering the appropriateness of remuneration to the scope of duties and responsibilities of each director and the Company’s financial situation and its comparability with remuneration in other companies in the same sector. 3.1 Monetary remuneration (a) Board of Directors Total remuneration received by all nine Directors from the Company in their capacity as Directors by way of Directors’ stipends and meeting fees in 2014 a total of Bt. 5,010,000. Details are as follows: 2014 2013 Director’s Name (Baht) (Baht) 1. Dr. Pranee Phaoenchoke 700,000 820,000 2. Mr. Sompong Phaoenchoke 630,000 710,000 3. Ms. Kaewjai Phaoenchoke 570,000 650,000 4. Mr. Wuttichai Phaoenchoke 520,000 620,000 5. Mr. Pricha Attavipach 755,000 815,000 6. Mr. Suvait Theeravachirakul 460,000 490,000 7. Mr. Somkiat Nimrawee 460,000 525,000 8. Mr. Damri Tunshevavong 455,000 510,000 9. Mr. Thavorn Chalassthien 460,000 440,000 10.Mr. Kavee Vasuvat 50,000 Total 5,010,000 5,630,000

Thai Rung Union Car Public Company Limited

(b) Administrators (excluding Directors) 2014 Number of Total Amount persons (Baht)

2013 Number of Total Amount persons (Baht)

Salaries* 7 15,358,806 7 15,408,816 * Annual remuneration 5 1,980,694 6 3,070,951 Living Allowances 6 669,500 7 643,022 Company Secretary’s position allowance 1 84,000 1 84,000 Total 18,093,054 19,206,789 Notes The monthly and annual remuneration of the President and the Managing Director have been considered by the Nomination and Remuneration Committee and approved by the Company’s Board of Directors. 3.2 Non-monetary remuneration (a) Directors None (b) Administrators Company car

 Dividend Policy of Company and Subsidiaries (a)

Payment of dividends by the Company to Shareholders TRU's dividend policy is to pay a dividend each year of approximately 40% of its consolidated net earnings of the previous year, subject to TRU and its affiliates' cash flow and investment plans, and other future considerations as to necessity and appropriateness.

48 Annual Report 2014

Record of dividend payments to shareholders Year 2010 2011 2012 EPS 0.38 0.38 1.13 Dividend per share 0.25 0.25 0.60 Dividend payout ratio (%) 66.05 66.10 53.15 Note: *The dividend for 2014 is subject to approval by Shareholders (b)

Unit: Baht 2013 2014* 0.72 0.26 0.40 0.15 55.68 58.15 the Annual General Meeting of

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.

ď&#x201A;§ Auditorsâ&#x20AC;&#x2122; Remuneration a) Audit fees Audit fees paid to ANS Audit Co Ltd by the Company and its subsidiaries in 2014 were as follows, with comparative figures for 2013.

Company Thai Rung Union Car Plc. Thai V.P. Auto Service Co Ltd Thai Rung Tools and Dies Co Ltd Thai Auto Pressparts Co Ltd Thai Ultimate Car Co Ltd Total

2014 1,102,100 227,910 267,500 430,140 219,350 2,247,000

Baht 2013 1,030,000 213,000 250,000 402,000 205,000 2,100,000

b) Non-audit fees Non-audit fees paid to ANS Audit Co Ltd by the Company and its subsidiaries in 2014 were as follows, with comparative figures for 2013.

Thai Rung Union Car Public Company Limited

Baht Item Payer 2014 2013 * Other service charges Company 333,951 94,310 Other service charges* Subsidiaries 187,661 215,398 Special service fees in accordance Thai Auto Pressparts Co Ltd 53,000 50,000 with BOI instructions Thai Rung Tools and Dies Co Ltd 45,000 Total 619,612 359,708 Notes Other service charges such as travelling, accommodation, telephone and photocopying expenses, cost of binding for Financial Statements, files, etc., invoiced as incurred.

50 Annual Report 2014

Related Party Transactions Related Party Transactions Related Party Transactions

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

(Baht: millions) (Baht: millions)

Related company Related company

Main type of Business Thai Rung Group Related Party Transactions 2014 Balance sheet item Main type of Business Thai Counterparty Rung Group Related Party Transactions 2014 Balance sheet item Counterparty Isuzu dealer TRU, TVS, TUC, TAP Purchase of spares, vehicle repairs 0.01 Trade debtors 4.00 Isuzu Chaicharoenkij Motor Co Isuzu 0.010.02Trade Isuzu Chaicharoenkij Motor Co spares,andvehicle repairs debtors Sale ofdealer spare parts TRU, TVS, TUC, TAP Purchase Repairofvehicle services Trade creditors4.000.04 SaleAfter-sales of spare parts Repair vehicle creditors service Income fromand utilityservices charges and administartion fees 0.020.39Trade Other creditors 0.040.12 0.398.39Other creditors 0.12 After-sales service Income fromfrom utilityadministartion charges andfees administartion fees Income 8.396.43 Trade debtors 0.21 from administartion feesrepairs V.P. Auto Enterprise Co Ltd Ford dealer TVS, TUC Income Purchase of spares, vehicle 6.43 Trade V.P. Auto Enterprise Co Ltd Ford TVS, TUC Purchase of spares, vehicle repairs debtors Sale ofdealer spare parts Other debtors 0.210.05 SaleAfter of spare Other debtors salesparts service Trade creditors0.051.01 sales service creditors 0.51Trade Thai V.P. Corporation Co Ltd AfterVehicle rental TRU, TRT, TAP, TVS, Repair vehicle and services Trade debtors 1.010.42 0.515.86Trade Thai V.P. Corporation Co Ltd Vehicle rental TRU, TRT, TAP, vehicle and services debtors TUCTVS, Repair Vehicle rental Other debtors 0.420.10 5.860.03Other TUC Vehicle debtors Sale rental of goods Trade creditors0.100.16 0.030.02Trade SaleIncome of goods creditors from administartion fees Other creditors 0.160.78 0.022.02Other fromfrom administartion feesand showroom creditors Lexus Auto City Co Ltd Lexus dealer TRU,TUC Income Income rental of land Trade debtors 0.780.33 2.02 Trade Lexus Auto City Co Ltd Lexus dealer TRU,TUC Income from rental of land and showroom debtors Other creditors 0.330.17 Note Other creditors 0.17

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

TRT TRTTAP TAP

Thai V.P. Auto Service Co. Ltd. TVS Thai Auto Service Ltd. TVSTUC ThaiV.P.Ultimate Car Co.Co.Ltd. Thai Ultimate Car Co. Ltd. TUC

Nature of relationships Nature of relationships 1. TRT, TVS and TAP are subsidiaries of TRU, in which the Phaoenchoke group hold directorships and are 1. TRT, andshareholders. TAP are subsidiaries of TRU, in which the Phaoenchoke group hold directorships and are theTVS major the major shareholders. 2. TUC is a subsidiary of TVS, which holds 99.53% of the shares, the Phaoenchoke group holding the 2. TUC is a subsidiary remaining 0.47%. of TVS, which holds 99.53% of the shares, the Phaoenchoke group holding the remaining 0.47%.

Thai Rung Union Car Public Company Limited

3. The above listed companies having possible conflicts of interest are related companies in which members of the Phaoenchoke group are both directors and major shareholders as follows

Related Companies

Shares held by Phaoenchoke Group

Isuzu Chaicharoenkij Motor Co Ltd V.P. Auto Enterprise Co Ltd Thai V.P. Corporation Co Ltd Lexus Auto City Co Ltd

Directorship held in Related Companies

TVP

Other

D,MD

100.00%

0.20% 99.80%

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

100.00%

D,MD

96.67%

3.33%

D,MD

Note 1. â&#x20AC;&#x153;Phaoenchoke Groupâ&#x20AC;? consist of Dr.Pranee Phaoenchoke, Mr.Sompong Phaoenchoke, Ms.Kaewjai Phaoenchoke and Mr.Wuttichai Phaoenchoke. 2. TVP = Thai V.P. Corporation Co.,Ltd. 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.

52 Annual Report 2014

The above Related Party Transactions were considered with regard to their necessity, appropriateness and overall benefit to the Company and its shareholders. Most of them were normal business transactions or were in support of such normal business transactions, and they were conducted on normal commercial terms, without giving rise to any profit diversion, and were conducted at arm’s-length prices and on similar terms to those applied to non-related parties. The non-executive Directors’ opinion does not differ in any respect from the relevant resolutions of the Board of Directors.

(3) 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.

Thai Rung Union Car Public Company Limited

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. 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 seventh year running in the 2014 joint SEC-TIA (Thai Investors Association) ‘AGM check-list’ and ‘Good’ in 2014, due to the intense evaluation criteria, and ‘Very Good’ for the fifth year (2009-2013) in a row by the Thai Institute of Directors’ ‘Corporate Governance Report of Thai Listed Companies.’ The Company’s policy is to continue improving the standard of corporate governance. In 2014 the Company announced its intention of joining Thailand's Private Sector Collective Action Coalition Against Corruption, with a view to confirming confidence in the transparent, fair and ethical conduct of the its business and its determination to combat all forms of corruption.

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 54 Annual Report 2014

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 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. Thai Rung Union Car Public Company Limited

(4) Control and Management of Risk The Company attaches importance to the implementation of internal controls and audits, and has accordingly established an internal audit department to ensure that basic working practices and important financial transactions are conducted in accordance with established guidelines and in an efficient manner, reporting direct to the Audit 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 14 days in advance and posted on the Company’s website at least 30 days in advance 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 policy is to treat all its shareholders impartially. It 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. It sends investors proxy forms in advance of the AGM, and it has adopted the barcode system to speed up the processes of registering attendants and counting votes and prepares revenue stamps for shareholders’ use in granting proxies for their greater convenience. 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

56 Annual Report 2014

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 published on the Company’s website so that shareholders unable to attend the meeting can view it subsequently. 5. The Company’s Board of Directors attaches great importance to shareholders’ meetings, and all Directors endeavour to attend every such meeting, particularly the Chairman 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. 6. After each meeting the Company discloses the resolutions passed together with clear details of the voting on each agenda item to the SET and on its website on the following business day and sends a full report of the meeting to the SET within 14 business days, also publishing this report in its website for shareholders to examine.

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,

Thai Rung Union Car Public Company Limited

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 within 3 days, 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 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.  Employees 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

58 Annual Report 2014

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. 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

Thai Rung Union Car Public Company Limited

appropriate welfare benefits such as buses to transport workers to and from the factory, a canteen, uniforms, accident a clinic workers and a library. appropriate welfareinsurance, benefits annual such ashealth buseschecks, to transport to and from the factory, a canteen, accident insurance, annual health checks, clinicemployees’ and a library. 5. uniforms, The Company strives to combat corruption and to araise awareness and ensure that they all their duties and withand integrity. 2014 the Company announced intention of 5. perform The Company strives transparently to combat corruption to raiseIn employees’ awareness and ensureits that they all joining Thailand's Private Sector Collective Coalition Against Corruption,announced with a viewitstointention confirming perform their duties transparently and withAction integrity. In 2014 the Company of confidence in the Private transparent, and ethical conduct of theAgainst its business and itswith determination combat joining Thailand's SectorfairCollective Action Coalition Corruption, a view to to confirming all forms of incorruption. confidence the transparent, fair and ethical conduct of the its business and its determination to combat 6. The Company has made arrangements for channels of communication to enable it to receive opinions and all forms of corruption. suggestions all stakeholder groups, with a view to improving and developing products, services 6. The Companyfrom has made arrangements for channels of communication to enable it to its receive opinions and and organisation, making it stable,groups, able with to compete on term. its Oneproducts, exampleservices is the suggestions from all stakeholder a view tosuccessfully improving inandthedeveloping employee suggestion scheme, in which each employee has a target 12 term. suggestions per year,is and and organisation, making it stable, able to compete successfully in theof on One example the suggestionssuggestion go straightscheme, from the suggestion to the has Managing Director. is the for employee in which eachbox employee a target of 12 Another suggestions per facility year, and customers, shareholders, or the publicbox to submit and recommendations suggestions go straight from thegeneral suggestion to the suggestions Managing Director. Another is thethrough facility the for Company’s shareholders, website. customers, or the general public to submit suggestions and recommendations through the 7. Any stakeholder wishing to report anything or to register a complaint can do so by contacting the Company’s website. Company’s Audit wishing and Corporate Governance direct:a complaint can do so by contacting the 7. Any stakeholder to report anythingCommittee or to register Chairman of Audit and Corporate Governance Committee Company’s Audit and Corporate Governance Committee direct: 304 Macharoen road, Khang Governance Phlu, Chairman of Audit andNong Corporate Committee NongMacharoen Khaem, Bangkok 10160Khang Phlu, 304 road, Nong e-mailKhaem, auditcommittee@thairung.co.th Nong Bangkok 10160 tel. 0-2420-0076 ext. 387, e-mail auditcommittee@thairung.co.th 8. The Company protectsext. the387, anonymity of informants and complainants, who indeed do not even have to tel. 0-2420-0076 reveal their names to the do not wish do so, and thewho Company information 8. The Company protects theCompany anonymityif they of informants andtocomplainants, indeed keeps do nottheeven have to confidential. Informants this feelifconfident thatwish there be and no repercussions The reveal their names to thecan Company they do not to will do so, the Companyfrom keepstheir the actions. information Company charges the Audit andfeelCorporate Committee to investigate information or confidential. Informants can this confidentGovernance that there will be no repercussions fromthetheir actions. The complaint charges and report the Corporate Board for appropriate to be decided on. Company thedirect Audittoand Governanceaction Committee to investigate the information or complaint and report direct to the Board for appropriate action to be decided on.

4. Disclosure and Transparency 4. TheDisclosure Company’sand policyTransparency as established by the Board of Directors is one of transparency and of complete and timely disclosurepolicy to allasinterested correct, readily accessible, consistent, reliable checkable The Company’s establishedparties by theof Board of Directors is one of transparency and of and complete and information, whether financial or non-financial. timely disclosure to all interested parties of correct, readily accessible, consistent, reliable and checkable 1. The Company has financial set up aor‘Share Register and Investor Relations Department’ within the Office of the information, whether non-financial. Managing Director, whose is to disclose correct,Relations complete, transparentwithin information, 1. The Company has set up a duty ‘Shareit Register and Investor Department’ the Officewhether of the Managing Director, whose duty it is to disclose correct, complete, transparent information, whether

60 Annual Report 2014

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. Structure of Company’s Board of Directors 1.1 The Board of Directors of the Company consists of nine persons, at least one third of whom must be independent directors. At present the Company has five independent directors or 56% of total Board member. 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 Thai Rung Union Car Public Company Limited

appropriately qualified in a branch of professional activity that is relevant to the conduct of the Company’s business. 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 2.1 The Board of Directors has established four other boards and committees: the Audit and Corporate Governance 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) 2.2 The Chairman of the Board of Directors of the Company cannot be a chairman or member of any other board or committee. The majority of members of other boards and committees are independent directors, including the chairmen of the Audit and Corporate Governance Committee and of the Nomination and Remuneration Committee, so as to ensure transparency and independence in carrying out their duties.

62 Annual Report 2014

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 reviewing it at least once every five years, 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 and Board of Director meeting. 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 great importance to Board meetings and endeavour always to attend. In 2014 the Bard met six times. The overall attendance rate for the year was 93%. Letters of invitation are sent at least seven days in advance clearly setting out the agenda and the Office of the Managing Director sends the Board papers for Directors to study not less than five days before each meeting. 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. Thai Rung Union Car Public Company Limited

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, which is divided into six sections as follows: 1. Structure and characteristics of the board 2. Roles and responsibilities of the board 3. Board meetings 4. The board’s performance of duties 5. Relationship with management 6. Self-development of directors and executive development The Board carries out an overall self-assessment every February, and the Office of the Managing Directors collates the information and presents a summary report to the Board. The result of Board assessment for 2013 was “Good” (Total score 3.65 out of 4, up by 3% from 2012). The Board discusses the results of the assessment and seeks ways to improve its efficiency. 6. Remuneration The Company has established a Nomination and Remuneration Committee, which is chaired by an independent director and is charged with setting policies, methodology and criteria for establishing the remuneration of Directors, the President and the Managing Director fairly, transparently, in consonance with the Company’s results and each individual’s performance, in line with industry norms, and sufficient to reward directors having the desired characteristics. Directors’ remuneration is subject to approval by a meeting of shareholders of the Company and to disclosure in the Company’s Annual Report and in Form 56-1 as required by the SEC. (For details please refer to Directors’ and Administrators’ Remuneration.)

64 Annual Report 2014

7. Development of Directors and Administrators 7.1 The policy of the Company’s Board of Directors is to facilitate and support training and study for Directors by way of regular attendance of various courses run by the Institute of Directors (IOD). At present 67% of Directors have attended these courses. Details are as follows.

Name 1. Mr. Sompong Phaoenchoke 2. Ms. Kaewjai Phaoenchoke 3. Mr. Somkiat Nimrawee 4. Mr. Pricha Attavipach

5. Mr. Suvait Theeravachirakul 6. Mr Damri Tunshevavong

Course Director Certification Program 26/2003 Director Certification Program 29/2003 Director Accreditation Program 10/2004 Director Certification Program 39/2004 Finance for Non-Finance Directors 8/2004 Director Accreditation Program 107/2014 Director Certification Program 9/2001 Audit Committee Program 15/2006 Director Certification Program 106/2008 Audit Committee Program 24/2008 Role of the Chairman Program 22/2009 Role of Compensation Committee 10/2010

In the year 2014, Mr. Pricha Attavipach, Deputy Chairman, attended the Director Accreditation Program run by the Institute of Directors (IOD). 7.2 The Company arranges induction programmes for new Directors. The Managing Director introduces the nature of the Company’s business and its basic orientation and the role, duties and responsibilities of the Directors, the reporting of Directors’ shareholdings to the Company and the SET and the annual declaration of Directors’ interest to the Company, Director’ remuneration, meetings of the various Board Committees for the year and the setting of the AGM, and encourages Directors to go on training courses, at the Company’s expense, to improve their knowledge and understanding in performing their duties in line with principles of good corporate governance. 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.

Thai Rung Union Car Public Company Limited

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. The Board of Directors has resolved that Directors and Administrators of the Company and the Manager of Accounting & Finance Department, together with their spouses, parents, children and siblings, must refrain from buying or selling securities from at least five working days before the Company discloses its financial Statements to the stock exchange. The Company has also informed them of their obligation to report their shareholdings in the Company and those of their spouses and of any children who are still minors, including the reporting of any changes in their shareholdings to the SEC and the SET in accordance with article 59, subject to penalties for non-compliance as per article 275 of the Securities and Stock Exchange Act 1992, and has assigned the Share Register and Investor Relations Department to inform them in advance of the periods during which they should refrain from trading in securities each quarter. The Company has set out the basic principles of control of internal information in the form of an article in the Companyâ&#x20AC;&#x2122;s code of business ethics, to ensure that all employees adhere to them. The Board of Directors has resolved that Directors and Administrators who are obliged by law to report their shareholdings must submit these reports to the Companyâ&#x20AC;&#x2122;s secretary within three days, each time, and further determined that shareholdings of Directors and Administrators be reported every quarter to the Board of Directors. Additionally, the Companyâ&#x20AC;&#x2122;s Board of Directors requires Directors and senior executives to submit a Form for Reporting Interests of Directors and Executives, reporting to the company any interests of their own or of related persons that relate to their administration or management of the business of the Company or its subsidiaries, pursuant to Section 89/14 of the Securities and Exchange Act of 2008 and SEC Announcement Thor Jor 2/2009. The report must be submitted whenever there is a change in circumstances and in any case annually as at 1 July, the information to be sent each time to the Company Secretary with copies of the report to the Chairman and to the Chairman of the Audit and Corporate Governance Committee 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

66 Annual Report 2014

Internal Control Internal control

From board meetings during 2014 which were attended by all members of the audit and corporate governance committee, the companyâ&#x20AC;&#x2122;s board of directors and the audit and corporate governance committee are of the opinion that the companyâ&#x20AC;&#x2122;s internal control systems are adequate and appropriate. The following is a summary. Organisational 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. Additionally, the company has established a policy and working plan focused on product quality and price and fair service to customers. It has written procedures that serve as guidelines aimed at producing ordered work according to standards, and there are mechanisms for inspecting and monitoring working practices in the fields of finance and purchasing, administration generally, production and marketing in order to provide assurance that working practices are in accordance with established policies and that there are no practices likely to damage the companyâ&#x20AC;&#x2122;s reputation or interests. Risk management The company attaches importance to managing risks that can affect its business, and has a risk committee to oversee and assess risk factors and possible sources of risk as well as analysing the consequences of such risks and alerting administrators or operatives and together establishing measures and guidelines to protect against such risks, monitoring compliance with such measures so as to keep risks at acceptable levels. Management control activities The company has established the scope and powers and duties and monetary limits in writing for each level of the administrative departments. There is clear division and separation of duties, approvals, recording of transactions and safeguarding of assets.

Thai Rung Union Car Public Company Limited

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 companyâ&#x20AC;&#x2122;s duly authorised auditors in their reports. Monitoring system The company arranges regular quarterly board meetings, with special ad hoc meetings of senior executives on an ongoing basis to consider and follow up on managementâ&#x20AC;&#x2122;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 companyâ&#x20AC;&#x2122;s rules and regulations and a report on any significant deficiencies is submitted to the audit committee and the board of directors at a meeting which is arranged to coincide with the quarterly board meeting, for them to decide on any corrective and follow-up measures. Any event of misconduct or illegal act is reported immediately to the board of directors.

68 Annual Report 2014

Thai Rung Union Car Public Company Limited

Report of the Audit and Corporate Governance Committee Report of the Audit and Corporate Governance Committee In 2014, 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 2014. The Committee met four times during 2014, all its members being present on each occasion. The main activities can be summarised as follows: 1. Examination of financial reporting systems Having examined the Company’s consolidated quarterly and annual financial statements for 2014, which were drawn up in accordance with financial reporting standards, focusing on the most important items as well as non-recurring items, andhavingreceived assurances from the auditors, the head of the accounting department and senior managementthat 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 2014 the auditors made no material observationsanddetected 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 70 Annual Report 2014

reporting to the SET. 3.Examination of the Company’s risk assessment and management systems TheCommitteeexamined 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 2014 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 examinedtheappropriateness 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. 5.Examination of the Company’s anti-corruption procedures 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. However, in 2014 Company doesn’t complaints about corruption applicable of significant. And the Company announced its intention of joining Thailand's Private Sector Collective Action Coalition Against Corruption

Thai Rung Union Car Public Company Limited

6.Proposed appointment of auditors for 2013 and establishment of auditors’ remuneration The Committee proposed to the Board of Directorsthat ANS Audit Co., Ltd. be appointed as the Company’s auditors. The Audit and Corporate Governance Committee considered their work andindependence, and the appropriateness of their remuneration, and found it appropriate that Mr AtipongAtipongsakul Mr VichaiRuchitanont Mr SathienVongsnan Ms KulthidaPasurakul

CPA No. 3500 and/or CPA No. 4054 and/or CPA No. 3495 and/or CPA No. 5946

all from ANS AuditCo., Ltd. be appointed and their remuneration established at Bt.1.13 million for the year. (2013: Bt.1.03 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.

PrichaAttavipach Chairman of the Audit and Corporate Governance Committee

72 Annual Report 2014

Nomination and Remuneration Nomination and Remuneration Committee's Report Committee's Report 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 The Nomination Remuneration composed of three non-executive independent proper and transparent and manner, includingCommittee, from among any names proposed by shareholders, forDirectors, onward issubmission charged with selecting individuals with appropriate qualities for occupying the position of Company Director in a to the Company’s Board of Directors and in turn to the shareholders for their approval, and with proper transparent manner, including fromtoamong any names proposed by shareholders, selectingand persons with characteristics appropriate the position of President and Managing Director infortheonward event submission to the Company’s Board of Directors and in turn to the shareholders for their approval, and witha of their being a vacancy, for nomination to the Board of Directors for their consideration, and to prepare selecting withsenior characteristics of President Managing Director in the event successionpersons plan for executive appropriate positions. Ittois the alsoposition responsible for the and setting policies, methodology and of their being a vacancy, for nomination to the Board of Directors for their consideration, and to prepare criteria for establishing, and for considering and reviewing the establishment of remuneration of Directors, thea succession plantheforManaging senior executive positions. It is alsoand responsible for the policies, methodology and President and Director fairly, transparently in consonance withsetting the Company’s results and each criteria for establishing, for considering and reviewing the establishment Directors, theis individual’s performance.and It reports independently to the Board of Directors so ofas remuneration to ensure thatofremuneration President Managing fairly, transparently in consonance withwhilst the Company’s results and each establishedandinthe a way that Director is appropriate and fair to and all interested parties safeguarding shareholders' individual’s It reports independently to the Boardcorporate of Directors so as to ensure that remuneration is interests, in performance. accordance with the Company's principles of good governance. 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 2014 the Nomination and Remuneration Committee met to consider the following matters of and remuneration for Committee the year 2014 monthlytheremuneration for 2015 for the In 1.2014Establishment the Nomination Remuneration metand to consider following matters President and the Managing Director 1. Establishment of remuneration for the year 2014 and monthly remuneration for 2015 for the 2. President Establishment of remuneration for the year 2014 for individual Company Directors based on the and the Managing Director performance of the Company and the duties and responsibilities and performance of each 2. Establishment of remuneration for the year 2014 individual Company Directors based on the individual Director within an overall monetary limit for to be approved by the shareholders. performance of the Company and the duties and responsibilities and performance of each 3. Directors’ remuneration foroverall 2015 monetary for proposal to betheapproved Company’s of Directors and individual Director within an limit to by theBoard shareholders. subsequently to the General Meeting of Shareholders for their approval, the Nomination and 3. Directors’ remuneration 2015 forthatproposal to theremuneration Company’s was Board of with Directors and Remuneration Committee for considering the proposed in line the scope subsequently to the GeneralofMeeting of Shareholders for their approval, the Nomination and of duties and responsibilities the Directors and with remuneration paid in comparable industries. Remuneration Committee thatCommittee the proposed in line with the by scope In summary, the Nomination and considering Remuneration fullyremuneration discharged itswas duties as assigned the 4. of Theduties appointment of a new Director to replace a Director resigning from his position for submission and responsibilities the Directors with remuneration paid in comparable Company’s Board of Directors. Shareholdersof may this restand assured that the nomination of Directorsindustries. and the to the Board of Directors and in turn to the general meeting of shareholders. establishment remuneration was carried in a proper, appropriate and in 4. ofThetheir appointment of a new Directorout to replace a Director resigning and fromtransparent his position manner for submission In summary, the Nomination and Remuneration Committee fully discharged its duties as assigned by the accordance withtothe principles governance. theCompany’s Board of Directors andofingood turn corporate to the general meeting of shareholders. Company’s Board of Directors. Shareholders may this rest assured that the nomination of Directors and the establishment of their remuneration was carried out in a proper, appropriate and transparent manner and in accordance with the Company’s principles of good corporate governance.

Pricha Attavipach Chairman of the Nomination and Remuneration Committee Pricha Attavipach Thai Rung Union Car Public Company Limited Chairman of the Nomination and Remuneration Committee

Board of Directors' Responsibility forBoardFinancial Reports 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. 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 2014

Dr. Pranee Phaoenchoke Chairman of the Board

74 Annual Report 2014

Mr. Sompong Phaoenchoke Managing Director

Management's Discussion and Analysis Management’s Discussion and Analysis (Based on Consolidated Financial Statements as at 31 December 2014)

In 2014, 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. Thai Rung Union Car Plc posted consolidated revenues of Bt.2,450 million for 2014, down by 27%, and net income attributable to owners of the parent company of Bt.152 million, down by 57% on 2013, 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 4.9%, or 6.3% down from the previous year, and return on equity (ROE) was 4.95%, down from the previous year’s 6.75% 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 87% 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, 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 expanding to the Trucks market which continuing high demand in the truck market together with the coming into force of the AEC in 2015 which will lead to increased transport requirements in the region, with trucks and trailers playing a greater role in industry.

Thai Rung Union Car Public Company Limited

Financial results Revenues In 2014, total consolidated revenues for the year 2014 amounted to Bt.2,415 million, representing a decrease of Bt.904 million or 27% on the previous year, as follows: Revenue

2014 Million Bt

Revenue from vehicle assembly and other vehicle-related contract work Revenue from the production of vehicle manufacturing equipment Revenue from sales of vehicles and from service centres Total revenue from Sales & service Other Income Profit sharing from associated company Total Revenes

2013 %

Million Bt

Increase ( Decrease) %

Million Bt

1,448.44

59%

2,045.54

61%

(597.10)

-29%

679.36

28%

984.71

29%

(305.35)

-31%

127%

108.05

19.26

18%

2,255.11

92%

3,138.30

93%

(883.19)

-28%

160.06

180.74

(20.68)

-11%

34.77

55.77

(21.00)

-38%

2,449.94

100%

3,374.81

100%

(924.87)

-27%

Share in profits from investments in associates Share in profits from investments in joint venture companies, at Bt.35 million, was down by Bt.21 million or 38% on 2013, reflecting the general downturn in the automotive industry, for which the joint venture companies concerned make equipment such as window regulators and seats. Cost of sales; expenses Consolidated cost of sales and service for the year, at Bt.1,983 million, was down by Bt.646 million or 25% compared with the previous year. As a proportion of sales and service revenue for the year, the cost of sales and service was 88%, compared with 84% in the previous year, the increase being due to shifts in the product mix. Net income The Company posted net income attributable to owners of the parent company of Bt.152 million for 2014, representing 8% of sales and service revenue and a decrease of Bt.201 million or 57% on the previous yearâ&#x20AC;&#x2122;s result, due to lower overall revenues and the fall in the proportion of parts making and contract assembly work.

76 Annual Report 2014

Analysis of Consolidated Balance Sheet as at 31 December 2014 compared with 31 December 2013 The financial position of the Company and its subsidiaries as at 31 December 2014 and 2013 is shown in the following table. THB Millions

Consolidated Balance Sheet 31 Dec. 2014

31 Dec. 2013

Change

1,065

1,088

(23)

-2%

Investments in associates

427

287

140

49%

Invesments property, net

167

239

(72)

-30%

Property, plant & equipment, net

1,841

1,823

Other non-current assets, net

136

193

(57)

-30%

3,636

3,629

Current liabilities

357

406

(49)

12%

Non-current liabilities

(3)

Total Liabilities

424

476

(52)

11%

Attributable to owners of the parent company

3,107

3,053

Non-controlling interests

105

100

Total Equity

3,212

3,153

Total Liabilities and Equity

3,363

3,629

Assets Current assets

Total Assets Liabilities and Equity

Equity

Thai Rung Union Car Public Company Limited

Assets Total consolidated assets as at 31 December 2014 and 31 December 2013 stood at Bt.3,636 million and Bt.3,629 million respectively, representing an increase of Bt.7 million or 0%. Current assets decreased by Bt.23 million, mainly due to trade and other receivables, which fell as a result of the lower sales volumes, while investments in associates increased by Bt.140 million, mainly due to additional investments of Bt.130 million in two joint venture companies. Liabilities Total consolidated liabilities as at 31 December 2014 and 31 December 2013 stood at Bt.424 million and Bt.476 million respectively, representing a decrease of Bt.52 million or 11%, mainly due to the decrease in trade payables. Equity Consolidated equity as at 31 December 2014 and 31 December 2013 stood at Bt.3,212 million and Bt.3,153 million respectively, representing an increase of Bt.59 million or 2%.

Cash flow statement The Companyâ&#x20AC;&#x2122;s consolidated cash situation for the year ended 31 December 2014 showed a net increase of Bt.8 million, with a year-end cash position of Bt.306 million. Details are shown in the following talble THB millions 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

78 Annual Report 2014

334 (214) (112) 8 298 306

Net cash from operating activities increased thanks to a subsidiaryâ&#x20AC;&#x2122;s VAT rebate of Bt.58 million and for the rest to collections of receivables. Net cash used in investing activities was Bt.214 million, mainly consisting of Bt.130 million of investment in two new joint venture companies, Bt.104 million of capital expenditure on new machinery and equipment and factory improvements and Bt.20 million in dividends received from existing joint ventures. Net cash used in financing activities, Bt.112 million, relates mainly to the payment of a dividend.

Thai Rung Union Car Public Company Limited

Auditor' Report AUDITOR’S REPORT To the Board of Directors and Shareholders of 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, 2014, 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, 2014, 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. 80 Annual Report 2014

I 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 The Companyâ&#x20AC;&#x2122;s consolidated financial statements as at December 31, 2014, and for the year then ended, included investments in five associated companies accounted for under the equity method. Some of these investments amounting to Baht 417.16 million and shares of profit from these companies amounting to Baht 35.01 million (as discussed in Note 8 to the financial statements) represented investments in four associated companies. These were recorded based on financial statements prepared by the management of such four associated companies, which were not audited by their auditors. Qualified Opinion In my opinion, except for the possible effects on the financial statements of the matter as mentioned in the basis for qualified opinion paragraph, the financial statements referred to above present fairly, in all material respects, the financial position of Thai Rung Union Car Public Company Limited and its subsidiaries and of Thai Rung Union Car Public Company Limited as at December 31, 2014, and their financial performance and cash flows for the year then ended in accordance with Thai Financial Reporting Standards. Other Matter The consolidated financial statements of Thai Rung Union Car Public Company Limited and its subsidiaries and separate financial statements of Thai Rung Union Car Public Company Limited for the year then ended December 31, 2013 which have been presented herewith for comparative purposes were audited by another auditor of our firm, whose report dated February 25, 2014, expressed a qualified opinion related to investments in three associated companies were recorded based on financial statements which were not audited by their auditors.

Sathien Vongsnan Certified Public Accountant Registration Number 3495 ANS Audit Company Limited Bangkok, February 24, 2015

Thai Rung Union Car Public Company Limited

Financial Statement THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Thai Rung UnionOFCarFINANCIAL Public Company Limited And Its Subuisduaries STATEMENT POSITION

STATEMENT OF2014FINANCIAL POSITION AS AT DECEMBER 31, As at December 31, 2014

Notes 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 - net Other non-current assets - net Total non-current assets TOTAL ASSETS

5 4, 6 4 7

8 9 10 11 12 13 14

Unit: Baht Consolidated financial statements Separate financial statements 2014 2013 2014 2013

306,161,197 440,600,596 96,817,690 221,837,960 1,065,417,443

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

426,721,662 167,427,351 1,836,570,393 3,958,395 15,164,608 121,008,614 2,570,851,023 3,636,268,466

287,065,272 238,615,158 1,820,578,615 2,447,266 16,701,996 175,408,385 2,540,816,692 3,628,997,332

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

82 Annual Report 2014

73,356,601 270,840,659 41,641,838 94,000,000 120,154,455 599,993,553

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

239,300,000 114,100,000 412,880,000 412,880,000 995,494,266 1,023,899,545 2,352,308 1,571,264 8,757,482 8,853,879 122,712,222 171,241,453 1,781,496,278 1,732,546,141 2,381,489,831 2,490,141,905

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF FINANCIAL POSITION Thai Rung Union Car Public Company Limited And Its Subuisduaries AS AT DECEMBER 31, 2014

STATEMENT OF FINANCIAL POSITION As at December 31, 2014

Notes 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 Employee benefit obligations 18 Total non-current liabilities TOTAL LIABILITIES SHAREHOLDERS' EQUITY Share capital 19 Authorized 793,326,495 ordinary shares, Baht 1 par value 590,847,356 ordinary shares, Baht 1 par value Issued and paid up 492,372,797 ordinary shares, Baht 1 per share 590,846,931 ordinary shares, Baht 1 par value Premium on shares Premium on ordinary shares Retained earnings Appropriated 21 Legal reserve - the Company - Subsidiaries Unappropriated Total shareholders' equity of the Company Non-controlling interests TOTAL SHAREHOLDERS' EQUITY TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

Unit: Baht Consolidated financial statements Separate financial statements 2014 2013 2014 2013

346,718,321 10,455,250 52,840 357,226,411

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

248,685,762 4,455,132 253,140,894

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

5,297,590 62,290,871 67,588,461 424,814,872

13,550,311 56,409,366 69,959,677 475,967,198

3,269,600 38,944,796 42,214,396 295,355,290

8,258,374 35,455,067 43,713,441 398,900,499

793,326,495

793,326,495 590,847,356

590,847,356

590,846,931

492,372,797 -

590,846,931

492,372,797 -

713,782,739

57,168,019 16,793,902 1,728,177,338 3,106,768,929 104,684,665 3,211,453,594 3,636,268,466

52,499,649 16,793,902 1,777,385,882 3,052,834,969 100,195,165 3,153,030,134 3,628,997,332

57,168,019 52,499,649 724,336,852 832,586,221 2,086,134,541 2,091,241,406 2,086,134,541 2,091,241,406 2,381,489,831 2,490,141,905

The accompanying notes are an integral part of the financial statements. Thai Rung Union Car Public Company Limited

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF COMPREHENSIVE INCOME Thai Rung Union Car Public Company Limited And Its Subuisduaries FOR THE YEAR ENDED DECEMBER 31, 2014

STATEMENT OF COMPREHENSIVE IN COME For the year ended December31, 2014

Notes Revenues 4, 29 Sales of goods Rendering of services Total revenues Cost 4, 18, 23, 24 Cost of sales Cost of rendering of services Total cost Gross profit Dividend income 4, 8, 9 Other income 4, 11, 22 Selling expenses 4, 18, 23, 24 Adminstrative expenses 4, 11, 18, 23, 24 Financing cost 4 Share of profit from investments in associated companies 8 Profit before income tax expenses Income tax expenses 25 Profit for the year Other comprehensive income for the year Total comprehensive income for the year Profit and total comprehensive income attributable to Equity holders of the Company Non-controlling interests

Earnings per share 27 Earnings per share Profit attributable to equity holders of the Company (Baht) Weighted average number of ordinary shares (shares)

Unit: Baht Consolidated financial statements Separate financial statements 2014 2013 2014 2013

1,793,315,310 461,787,165 2,255,102,475

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

1,058,125,733 331,099,484 1,389,225,217

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

(1,578,730,106) (404,725,389) (1,983,455,495) 271,646,980 160,066,173 (68,524,776) (219,725,518) (1,231,915) 34,767,754 176,998,698 (17,512,253) 159,486,445 159,486,445

(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) 55,767,861 418,404,895 (53,649,823) 364,755,072 364,755,072

(904,730,144) (301,851,957) (1,206,582,101) 182,643,116 57,911,365 77,678,363 (65,704,305) (149,524,486) (997,082) 102,006,971 (8,639,651) 93,367,320 93,367,320

(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

152,408,145

353,686,570

93,367,320

276,506,222

7,078,300

11,068,502

159,486,445

364,755,072

0.26

0.59

0.16

0.47

590,846,931

The accompanying notes are an integral part of the financial statements. 84 Annual Report 2014

Thai Rung Union Car Public Company Limited

9 28

98,474,134 590,846,931

21 9 28 19

47,950,454 -

(47,950,454)

Treasury shares

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

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

501,589,497

492,372,797

share capital

Paid-up

Notes

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

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, 2013 Changes in equity for the year : Statutory reserve Dividend paid by subsidiaries Dividend paid Increase in capital from a payment of stock dividend Total comprehensive income for the year Balance as at December 31, 2014

FOR THE YEAR ENDED DECEMBER 31, 2014

For theSTATEMENT year ended December31, 2014 EQUITY OF CHANGES IN SHAREHOLDER'S

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

Premium

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

727,144,000

713,782,739

on ordinary

Unit: Baht Consolidated financial statements

52,499,649

4,668,370 57,168,019

52,499,649

The Company

16,793,902

Subsidiaries

Statutory reserve

Appropriated

(47,950,454) -

47,950,454

The Company

Treasury share reserve

Retained earnings

Equity attributable to equity holders of the Company

STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY

Thai Rung Union Car Public Company Limited And Its Subuisduaries

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

(295,418,098)

1,696,539,449

(4,668,370) (98,474,185) (98,474,134) 152,408,145 1,728,177,338

1,777,385,882

Unappropriated

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

(295,418,098)

2,994,566,497

(98,474,185) 152,408,145 3,106,768,929

3,052,834,969

Total

11,068,502 100,195,165

(5,801,200) -

94,927,863

(2,588,800) 7,078,300 104,684,665

100,195,165

interests

Non-controlling

Total

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

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

3,089,494,360

(2,588,800) (98,474,185) 159,486,445 3,211,453,594

3,153,030,134

equity

shareholder's

86 Annual Report 2014

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY (CONTINUE) FOR THE YEAR ENDED DECEMBER 31, 2014

98,474,134 590,846,931

21 28 19

28 20

Balance as at December 31, 2012 Changes in equity for the year : Dividend paid Decrease in capital from treasury stock dividend Total comprehensive income for the year Balance as at December 31, 2013

accompanying notes are anare integral part of thepart financial statements. TheTheaccompanying notes an integral of the financial statements.

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

501,589,497

492,372,797

Notes

Paid-up share capital

Balance as at December 31, 2013 Changes in equity for the year : Statutory reserve Dividend paid Increase in capital from a payment of stock dividend Total comprehensive income for the year Balance as at December 31, 2014

For the year ended December31, 2014

47,950,454 -

(47,950,454)

Treasury shares

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

727,144,000

713,782,739

52,499,649

4,668,370 57,168,019

52,499,649

(47,950,454) -

47,950,454

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

STATEMENT OF CHANGES IN SHAREHOLDER'S EQUITY (CONTINUE)

Thai Rung Union Car Public Company Limited And Its Subuisduaries

(295,418,098) 22,577,961 276,506,222 832,586,221

828,920,136

(4,668,370) (98,474,185) (98,474,134) 93,367,320 724,336,852

832,586,221

Unappropriated

(295,418,098) 276,506,222 2,091,241,406

2,110,153,282

(98,474,185) 93,367,320 2,086,134,541

2,091,241,406

Total shareholder's equity

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CASH FLOWS Thai Car Public Company Limited And Its Subuisduaries FORRung THE Union YEAR ENDED DECEMBER 31, 2014

STATEMENT OF CASH FLOWS For the year ended December31, 2014

Unit: Baht Consolidated financial statements 2014 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 allowance for diminution in value of inventories Write-off other current assets Share of profit from investments in associates Reversal allowance for devaluation of fixed assets Depreciation and amortization Amortisation of leasehold rights Employee benefit expense (Gain)loss on sales of fixed assets Write-off investment property Compensation income from investment property 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 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 2014 2013

176,998,698

418,404,895

102,006,971

316,729,440

842,215 (12,142,612) 260,161 (34,767,754) (69,302) 163,136,282 523,303 10,598,065 1,433,884 8,415,435 (7,905,816) (2,538,310) 1,231,915

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

(2,048,933) (69,302) 71,862,725 7,516,289 61,006 (57,911,365) (4,508,433) 997,082

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

306,016,164

504,463,470

117,906,040

266,380,107

25,042,293 (6,191,085) (43,760,624) 50,667,606

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

9,648,581 (15,140,346) (28,625,838) 52,887,172

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

(48,465,728) 283,308,626 (1,231,915) 77,289,377 (4,716,560) (21,074,593) 333,574,935

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

(78,919,598) 57,756,011 (1,003,247) 8,721,805 (4,026,560) (10,623,184) 50,824,825

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

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

Thai Rung Union Car Public Company Limited

87 8

THAI RUNG UNION CAR PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES STATEMENT OF CASH FLOWSCompany Limited And Its Subuisduaries Thai Rung Union Car Public FOR THE YEAR ENDED DECEMBER 31, 2014

STATEMENT OF CASH FLOWS For the year ended December31, 2014

Unit: Baht Consolidated financial statements 2014 2013 Cash flows from investing activities Increase in short-term loans to related parties Proceeds from short-term loans to related parties Proceeds from sales of fixed assets Interest received Dividend from associated companies and subsidiary company Acquisition of fixed assets and intangible assets Land deposit Land deposit returns Investment in associated companies Cash received from investment from associated company Cash received from compensation from investment property Net cash flows from (used in) investing activities Cash flows from financing activities Increase in short-term loans from financial institution Re-payment on short-term loans from financial institution Increase in short-term loans from related party Re-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 2014 2013

(20,000,000) 20,000,000 5,696,684 2,534,178 20,311,365 (121,918,146) (70,000,000) 66,529,625 (129,800,000) 4,600,000 7,905,816 (214,140,478)

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

(123,500,000) 267,500,000 5,161,064 4,898,520 57,911,365 (48,864,465) (70,000,000) 66,529,625 (129,800,000) 4,600,000 34,436,109

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

20,000,000 (20,000,000) (10,438,519) (98,474,185) (2,588,800) (111,501,504) 7,932,953 298,228,244 306,161,197

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

20,000,000 (20,000,000) 164,000,000 (184,000,000) (7,443,604) (98,474,185) (125,917,789) (40,656,855) 114,013,456 73,356,601

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

3,009,940 59,040,071 10,558,149

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

5,592,854 -

14,641,543 19,000,000 -

Supplemental cash flow information Non-cash transactions Vehicle obtained under hire purchase agreement Transfer investment property to property, plant and equipment Increase in payable for purchasing of fixed assets Transfer deposit for purchasing of fixed assets to fixed assets Transfer non-current assets to current assets

The accompanying notes are an integral part of the financial statements. 88 Annual Report 2014 The accompanying notes are an integral part of the financial statements.

ThaiTHAI Rung RUNG Union Car Public Company And ItsLIMITED Subuisduaries UNION CAR PUBLICLimited COMPANY AND ITS SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the year ended December 31, 2014 FOR THE YEAR ENDED DECEMBER 31, 2014

NOTE TO CONSOLIDATE FINANCECIAL STATEMENTS 1. GENERAL INFORMATION

Thai Rung Union Car Public Company Limited (“The Company”) is a public company incorporated and domiciled in Thailand. The Company is principally engaged in car assembly and modification, and the manufacture and distribution of parts and mold. Its registered address is located at 28/6 Moo 1, Petchakasem Road, Khwaeng Nongkangploo, Khet Nongkaem, Bangkok. The Company has subsidiaries as follows: 1. Thai V.P. Auto Service Company Limited is a limited company incorporated and domiciled in Thailand. The company is principally engaged in the sales of car’s accessories and spare parts including repair services. Its registered office is located at 151, Marcharoen Road, Kwaeng Nongkangploo, Khet Nongkaem, Bangkok and branch office located at 32, Soi Intramara 26, Suthisarnvinijchai Road, Kwaeng Din Daeng, Khet Din Daeng, Bangkok and 9/28 Moo 8 Soi Phechakaseam 77, Phechakaseam Road, Kwaeng Nongkangploo, Khet Nongkaem, Bangkok. 2. Thai Rung Tools and Dies Company Limited is a limited company incorporated and domiciled in Thailand. The company is principally engaged in the manufacture of molds and jigs include electricity systems services. Its registered address is located at 28/22 Moo 1, Soi Petchakasem 81, Khwaeng Nongkangploo, Khet Nongkaem, Bangkok. 3. Thai Auto Pressparts Company Limited is a limited company incorporated and domiciled in Thailand.The company is principally engaged in the manufacture of vehicle’s body parts and mold. Its registered address is 28/6 Moo 1, Petchkasem Road, Khwaeng Nongkangploo, Khet Nongkaem, Bangkok. Its branch is located at 7/122 Amata City Industrial Park, Rayong Province, Moo 4 Chachoengsao-Sattaheep Road, Tumbon Mabyangporn, Amphur Puakdang, Rayong Province. 4. Thai Ultimate Car Company Limited is a limited company incorporated and domiciled in Thailand. The company is principally engaged in the sales of car, car’s accessories and spare parts including decorate and repair services and legal service, accounting, commercial, industrial and also such services and other services which related to business administration for tax management of the large organization.The company major shareholder is Thai V.P. Auto Service Company Limited. Its registered address is located at 28/22 Moo 1, Soi Petchakasem 81, Khwaeng Nongkangploo, Khet Nongkaem, Bangkok. On May 22, 2014, the Company and its subsidiary changed registered address as follows: -

From 28/6 Moo 1 Phechakaseam Road, Kwaeng Nongkangploo, Khet Nongkaem, Bangkok to 304 Marcharoen Road, Kwaeng Nongkangploo, Khet Nongkaem, Bangkok. From 28/22 Moo 1 Phechakaseam Road, Kwaeng Nongkangploo, Khet Nongkaem, Bangkok to 304/1 Marcharoen Road, Kwaeng Nongkangploo, Khet Nongkaem, Bangkok.

Thai Rung Union Car Public Company Limited 1089

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS The accompanying financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”) including related interpretations and guidelines promulgated by the Federation of Accounting Professions (“FAP”) and applicable rules and regulations of the Thai Securities and Exchange Commission. 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 financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 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”) Company’s name

Nature of business

Subsidiaries directly held by the Company Thai V.P. Auto Service Co., Ltd. Sales of accessories, 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

90 Annual Report 2014

Incorporation

of shareholding 2014 2013 Percent Percent

Thailand

Thailand Thailand

94 91

94 91 11

Company’s name

Nature of business

Incorporation

Subsidiaries held by Thai V.P. Auto Service Co., Ltd. Thai Ultimate Car Co. Ltd. Sales of cars, spare parts and accessories, and management service

Thailand

of shareholding 2014 2013 Percent Percent

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. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance. Upon loss of control, the Company derecognized the assets and liabilities of the subsidiaries, the carrying amount of non-controlling interests and any components of other comprehensive income attributable to those subsidiaries. The Company recognized profit or loss arising on the loss of control in income statement. Any investment retained in the former subsidiaries shall be accounted for fair value from the date when control is lost. New and revised Thai Financial Reporting Standards Below is a summary of accounting standards that became effective in the current accounting year and those that will become effective in the future. Accounting standards that became effective in the current accounting year a) b)

The Conceptual financial Reporting Standards (revised 2014) Thai Accounting Standards (“TAS”), Thai Financial Reporting Standards (“TFRS”), Thai Accounting Standard Interpretations (“TSIC”), Thai Financial Reporting Standard Interpretations (“TFRIC”) and Accounting Treatment Guidance as follows: TAS/TFRS/TFRI/TI Topic TAS 1 (revised 2012) TAS 7 (revised 2012) TAS 12 (revised 2012) TAS 17 (revised 2012) TAS 18 (revised 2012)

Presentation of Financial Statements Statement of Cash Flows Income Taxes Leases Revenue

Thai Rung Union Car Public Company Limited

TAS/TFRS/TFRI/TI

Topic

TAS 19 (revised 2012) TAS 21 (revised 2012) TAS 24 (revised 2012) TAS 28 (revised 2012) TAS 31 (revised 2012) TAS 34 (revised 2012) TAS 36 (revised 2012) TAS 38 (revised 2012) TFRS 2 (revised 2012) TFRS 3 (revised 2012) TFRS 5 (revised 2012) TFRS 8 (revised 2012) TSIC 15 TSIC 27

Employee Benefits The Effects of Changes in Foreign Exchange Rates Related Party Disclosures Investments in Associates Interests in Joint Ventures Interim Financial Reporting Impairment of Assets Intangible Assets Share-based Payment Business Combinations Non-current Assets Held for Sale and Discontinued Operations Operating Segments Operating Leases - Incentives Evaluating the Substance of Transactions Involving the Legal Form of a Lease TSIC 29 Service Concession Arrangements: Disclosures TSIC 32 Intangible Assets - Web Site Costs TFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities TFRIC 4 Determining whether an Arrangement contains a Lease TFRIC 5 Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds TFRIC 7 Applying the Restatement Approach under TAS 29 Financial Reporting in Hyperinflationary Economies TFRIC 10 Interim Financial Reporting and Impairment TFRIC 12 Service Concession Arrangements TFRIC 13 Customer Loyalty Programmers TFRIC 17 Distributions of Non-cash Assets to Owners TFRIC 18 Transfers of Assets from Customers Accounting Treatment Guidance for Stock Dividend These accounting standards were amended primarily to align their content with the corresponding International Financial Reporting Standards. Most of the changes were directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of the accounting standards. The management of the Company has assessed that the above standards do not have any significant impacts on the financial statements. 92 Annual Report 2014

Accounting standards that will become effective in the future The Federation of Accounting Professions has issued a number of revised and new accounting standards that become effective for fiscal years beginning on or after January 1, 2015. These accounting standards were aimed at alignment with the corresponding International Financial Reporting Standards, with most of the changes directed towards revision of wording and terminology, and provision of interpretations and accounting guidance to users of accounting standards. The management of the Company believes they will not have any significant impact on the financial statements in the year in which they are adopted. However, some of these accounting standards involve changes to key principles, as discussed below: TAS 19 (revised 2014) Employee Benefits This revised standard requires that the entity recognize actuarial gains and losses immediately in other comprehensive income while the existing standard allows the entity to recognise such gains and losses immediately in profit or loss, or in other comprehensive income, or to recognise them gradually in profit or loss. At present, the Company and its subsidiaries immediately recognize actuarial gains and losses in profit or loss in the period in which they occur. The assessment of the management of the Company and its subsidiaries is that when the revised standard is applied in 2015 and the method of recognizing those gains and losses is changed to immediately recognize them in other comprehensive income, there will be no impact to provision for long-term employee benefit liabilities and brought forward retained earnings in the financial statements. TFRS 10 Consolidated Financial Statements TFRS 10 prescribes requirements for the preparation of consolidated financial statements and replaces the part dealing with consolidated financial statements as included in TAS 27 Consolidated and Separate Financial Statements. This standard changes the principles used in considering whether control exists. Under this standard, an investor is deemed to have control over an investee if it has rights, or is exposed, to variable returns from its involvement with the investee, and it has the ability to direct the activities that affect the amount of its returns, even if it holds less than half of the shares or voting rights. This important change requires the management to exercise a lot of judgement when reviewing whether the Company and its subsidiaries have control over the investees and determine which entities have to be included for preparation of the consolidated financial statements. The management of the Company and its subsidiaries believes that the standards will not have any significant impact on the Company and its subsidiariesâ&#x20AC;&#x2122; financial statements. TFRS 12 Disclosure of Interests in Other Entities This standard stipulates disclosures relating to an entityâ&#x20AC;&#x2122;s interests in subsidiaries, joint arrangements and associates, including structured entities. This standard therefore has no financial impact to the financial statements of the Company and its subsidiaries.

Thai Rung Union Car Public Company Limited

TFRS 13 Fair Value Measurement This standard provides guidance on how to measure fair value and stipulates disclosures related to fair value measurements. Entities are to apply the guidance under this standard if they are required by other accounting standards to measure their assets or liabilities at fair value. The effect of the change from the adoption of this standard is to be recognised prospectively. Based on the preliminary analysis, the management of the Company and its subsidiaries believes that this standard will not have any significant impact on the Company and its subsidiariesâ&#x20AC;&#x2122; financial statements. 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 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 by weight average method) 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 by weight average method) and net realisable value and are charged to production costs and cost of services whenever consumed. Spare parts of car service centers are valued at the lower of cost (moving average method) and net realisable value. Cars purchased for sales are valued at the lower of cost (specific identification method) and net realisable value. Allowance for diminution in value of inventories is recorded by considering old, slow-moving and obsolete inventories. 15 94 Annual Report 2014

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale. Investments Investments in subsidiaries and associates Investments in subsidiaries and associates in the separate financial statements of the Company are accounted for using the cost method net of allowance for loss on diminution in value (if any). Investments in associates in the consolidated financial statements are accounted for using the equity method. Investment properties Investment properties are properties which are held to earn rental income, for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are stated at cost less accumulated depreciation and less allowance for impairment loss (if any). 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. Reclassification to property, plant and equipment When the use of a property changes such that it is reclassified as property, plant and equipment, its fair value at the date of reclassification becomes its cost for subsequent accounting. Property, plant and equipment Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses of assets (if any). Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and capitalised borrowing costs. Cost also may include transfers from other comprehensive income of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. 16

Thai Rung Union Car Public Company Limited

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. 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 Office equipment Straight-line method 5 Motor vehicles Straight-line method 5 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. 17

96 Annual Report 2014

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. Other intangible assets Intangible assets that are acquired are stated at cost less accumulated amortization 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 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. Thai Rung Union Car Public Company Limited18 97

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. 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 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. Treasury shares When share capital recognised as equity is repurchased, the amount of consideration paid, including directly attributable costs, is classified as treasury shares and recognised as a deduction from equity. 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. 19

98 Annual Report 2014

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. 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 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 20 Thai Rung Union Car Public Company Limited

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. 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. 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. 4. RELATED PARTY TRANSACTIONS 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, 2014 and 2013 with related parties and director were as follows:

100 Annual Report 2014

Unit: Million Baht Consolidated Separate financial statements financial statements 2014 Transactions with subsidiaries Purchases of goods and services Purchases of fixed assets Electricity expense Rental Transportation expense Management fee Credit note for management fee Commission and promotion expenses Fines from damaged delivery Sales of goods Sales of fixed asset Sales of oil Land and office rental income Management service income Consulting income Service income Utilities, transportation income and sales of supplies Dividend income Interest income Transactions with associates Sales of goods Management service income Dividend income Service 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

2013

2014

Transfer pricing policy

2013

184 6 20

256 Cost plus margin 40 As agreed 28 Cost and cost plus gross profit margin not more than 5% - Contract price 21 As agreed without contract 65 Contract price (21) As agreed credit note 4 Contract price 2 Contract price 53 Cost plus margin - As agreed 5 Cost plus margin 4 Contract price 6 Contract price 1 As agreed 9 As agreed 4 Cost plus margin

2 32 3 104 7 2 4 4

38 3

85 As declared 5 1.6% - 2.5% p.a. (2013: 2 â&#x20AC;&#x201C; 2.5% p.a.)

9 1 1

11 1 -

8 1 20 -

7 1 14 -

7 1 1

- Cost plus margin 1 Cost plus margin - Contract price

6 2 3

3 1 1

1 Contract price - Cost plus margin - Contract price

Cost plus margin As agreed without contract As declared As agreed

22 Thai Rung Union Car Public Company Limited

101

Unit: Million Baht Consolidated Separate financial statements financial statements 2014 2013 2014 2013 Service income Utilities, transportation income and sales of supplies Interest income

Transfer pricing policy

8 1

6 1

- As agreed - Cost plus margin

1 3.60% - 3.70% p.a.

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 Key management personnel compensation for the years ended December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial Separate statements financial statements 2013 2014 2013 2014 Short-term benefits 44,463,947 46,186,796 22,611,102 22,649,854 Post-employment benefits 2,680,194 (1,418,413) 132,201 (1,828,456) Total key management personnel compensation 47,144,141 44,768,383 22,743,303 20,821,398 4.3 As at December 31, 2014 and 2013, the balances of the accounts between the Company and related companies are as follows: Unit : Baht Consolidated financial Separate financial statements statements 2013 2014 2013 2014 Trade accounts receivable - related parties Subsidiaries Thai Rung Tools and Dies Co., Ltd. 3,952 806,865 Thai V.P. Auto Service Co., Ltd. 2,764,559 734,149 Thai Auto Pressparts Co., Ltd. 5,229,518 147,981 - 10,673,250 7,496,420 Thai Ultimate Car Co., Ltd. - 12,362,245 15,494,449

102 Annual Report 2014

Unit : Baht Separate financial Consolidated financial statements statements 2013 2014 2013 2014 Associated companies Kyowa Thairung Co.,Ltd 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. Center Use Car Co., Ltd. Total trade accounts receivable - related parties 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 Thai V.P. Auto Service Co., Ltd Thai V.P. Corporation Co., Ltd. Total amounts due from related parties

125,506 1,565,443 25,763 1,716,712

676,399 16,189 692,588

125,506 414,921 25,763 566,190

470,490 16,188 486,678

4,004,464 417,431 210,442 330,750 21,400 4,984,487 6,701,199

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

21,400 21,400 12,949,835

5,778 5,778 15,986,905

13,784,112 791,640 3,541,314 18,117,066

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

98,975

51,699

95,500 147,199 246,174

50,235 50,235 149,210

18,216,041

19,426,640

24 Thai Rung Union Car Public Company Limited

103

Unit : Baht Separate financial Consolidated financial statements statements 2013 2014 2013 2014 Short-term loans to related parties Subsidiaries Thai Rung Tools and Dies Co., Ltd. Thai Auto Pressparts 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.

Associated companies Thai Auto Conversion Co., Ltd. Kyowa Thairung Co.,Ltd Delta Thairung Co.,Ltd.

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. Total trade accounts payable - related parties

104 Annual Report 2014

94,000,000 94,000,000

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

11,573,732 6,779,723 18,353,455

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

4,121,727 53,255 4,174,982

3,390 3,390

4,121,727 4,121,727

3,390 3,390

36,434 156,382 1,012,330 5,350 1,210,496 5,385,478

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

22,475,182

30,630,133

Unit : Baht Separate financial Consolidated financial statements statements 2013 2014 2013 2014 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 Accrued project costs to related party Subsidiary Thai Rung Tools and Dies Co., Ltd. Total accrued project cost to related party Short-term loans from related party Subsidiaries Thai V.P. Auto Service Co., Ltd. Total short-term loans from related party

1,896,753 8,446,662 5,273,437 15,616,852

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

7,910

9,033

7,909

9,033

117,786 778,251 123,000 5,694 173,118 1,197,849 1,205,759

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

99,079 37,557 123,000 5,694 173,118 438,448 16,063,209

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

25,658,582 25,658,582

23,259,830 23,259,830

20,000,000 20,000,000

Thai Rung Union Car Public Company Limited 105 26

4.4. During the year of 2014, movements of short-term loans to and loans from related parties were as follows: January 1, 2014 Short-term loans to related parties Consolidated financial statements Related companies Thai V.P. Corporation 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 company Thai V.P. Corporation Co., Ltd. Short-term loans from related party Separate financial statements Subsidiary companies Thai V.P. Auto Service Co., Ltd. Thai Auto Pressparts Co., Ltd.

Unit: Million Baht During the period December Increase Decrease 31, 2014

Interest rate

(20)

3.50% p.a., due in May 23, 2014.

78 160 -

68 25 10

(52) (185) (10)

94 -

(20)

3.50% p.a., due in May 23, 2014.

20 -

108 56

(128) (56)

1.6 â&#x20AC;&#x201C; 2.25% p.a., at call 1.6% p.a., at call

1.6% - 2.5% p.a., at call 2.0% - 2.5% p.a., at call 1.6% p.a., at call

During the year 2014 and 2013 the Company had short-term loans to related parties as promissory notes of Baht 20 million and Baht 124 million, respectively. These loans are guaranteed by the directors of each borrower company. As at December 31, 2014 and 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, 2014 and 2013 the Company has outstanding guarantee obligations of Baht 135 million in respect of its guarantee of credit facilities provided by local banks to Thai Rung Tools and Dies Co., Ltd. (a subsidiary).

106 Annual Report 2014

5. CASH AND CASH EQUIVALENTS Cash and cash equivalents as at December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements 2014 2013 Cash on hand Current accounts Saving accounts Current investments Total

Separate financial statements 2014 2013

219,162 2,651,377 212,816,064 90,474,594

3,127,140 32,958,223 216,772,188 45,370,693

80,000 20,305,655 52,496,352 474,594

2,903,691 32,219,529 78,519,543 370,693

306,161,197

298,228,244

73,356,601

114,013,456

6. TRADE AND OTHER RECEIVABLES - NET Trade and other receivables as at December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements 2013 2014 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 unrelated party Amounts due to related parties Input tax refundable Input tax suspense Prepayment Withholding tax Others Total other receivables Total trade and other receivables - net

Separate financial statements 2014 2013

381,869,049 6,701,199 (482,718) 388,087,530

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

204,780,009 12,949,835 217,729,844

237,234,595 15,986,905 253,221,500

613,365 23,763,618 246,174 17,268,730 3,374,784 5,235,884 4,712 2,005,799 52,513,066 440,600,596

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

613,365 23,763,618 18,216,041 3,603,095 2,400,056 3,500,462 1,014,178 53,110,815 270,840,659

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

Thai Rung Union Car Public Company Limited 28107

The balances of trade accounts receivable as at December 31, 2014 and 2013, aged on the basis of due dates, are summarised below. Unit: Baht Consolidated financial Separate financial statements statements 2013 2014 2013 2014 Trade accounts receivable - unrelated parties Age of receivables Not yet due 289,083,094 352,884,061 189,087,324 201,996,401 Past due Up to 3 months 89,499,144 85,297,656 15,646,270 35,238,194 3 - 6 months 2,782,639 51,256 46,415 6 - 12 months 99,950 Over 12 months 504,172 1,613,542 Total 381,869,049 439,946,465 204,780,009 237,234,595 Less: Allowance for doubtful accounts (482,718) (482,718) Total trade accounts receivable - unrelated parties net Trade accounts receivable - related parties Age of receivables Trade accounts receivable - subsidiaries Not yet due Past due Up to 3 months Total trade accounts receivable - subsidiaries Trade accounts receivable - associates Not yet due Past due Up to 3 months Total trade accounts receivable - associates

381,386,331

439,463,747

204,780,009

237,234,595

10,848,195

15,601,795

1,514,050 12,362,245

(107,346) 15,494,449

1,715,727

692,588

565,205

486,678

985 1,716,712

692,588

985 566,190

486,678

108 Annual Report 2014

Unit: Baht Consolidated financial statements 2014 2013 Trade accounts receivable - related companies Not yet due Past due Up to 3 months Total trade accounts receivable â&#x20AC;&#x201C; related companies Total trade accounts receivable - related parties

Separate financial statements 2014 2013

4,413,439

1,740,285

21,400

5,778

571,048 4,984,487 6,701,199

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

21,400 12,949,835

5,778 15,986,905

7. INVENTORIES - NET Inventories as at December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements Stock obsolescence

Cost 2014

2014

2013

Raw materials

107,162,584 80,741,525 56,499,894 43,882,291 85,326,935 118,174,513

(12,193,861) (1,326,649) (13,630,943)

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

Total

248,989,413 242,798,329

(27,151,453)

(38,451,850)

Finished goods Work in process

2013

Cost 2014 Finished goods Work in process Raw materials Total

28,435,426 41,524,227 61,866,799

2013

17,830,371 20,885,313 77,970,422 131,826,452 116,686,106

Unit: Baht Separate financial statements Stock obsolescence 2014 2013

(900,000) (300,000) (10,471,998) (11,671,998)

(1,385,596) (957,279) (11,378,056) (13,720,931)

Inventory-net 2014

94,968,723 55,173,245 71,695,992

2013

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

221,837,960 204,346,479

Inventory-net 2014 2013

27,535,427 41,224,227 51,394,801

16,444,775 19,928,034 66,592,366 120,154,455 102,965,175

Thai Rung Union Car Public Company Limited

109 30

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

Company

Nature of business

Delta-TR Co., Ltd.

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 Manufacture of all Kyowa Thairung Co.,Ltd. large machinery including spareparts Assemble all motor Trex Thairung Co.,Ltd. vehicle Total investments in associated companies

Country of incorporation

Shareholding percentage

Unit: Baht Consolidated financial Separate financial statements statements Carrying amounts based on equity method Cost

2013 % 46

2014

2013

2014

2013

Thailand

2014 % 46

3,423,335

8,606,708

4,600,000

9,200,000

Thailand

83,030,844

66,551,133

14,900,000 14,900,000

Thailand

211,133,962

211,907,431

90,000,000 90,000,000

Thailand

9,561,782

9,800,000

Thailand

119,571,739

120,000,000

426,721,662

287,065,272

239,300,000 114,100,000

According to minute of the Companyâ&#x20AC;&#x2122;s board of directors meeting no.2/2014 held on February 25, 2014, the meeting approved to invest in 2 new associates: 1) Kyowa Thairung Company Limited with share capital of Baht 20 million consisted of 200,000 shares, Baht 100 each. The Company holds 49% of the registered share capital and the Company had paid for share subscription in April 2014. 2) Trex Thairung Company Limited with share capital of Baht 300 million consisted of 3,000,000 shares, Baht 100 each. The Company holds 40% of the registered share capital and the Company had paid for share subscription in June 2014. According to the annual general meeting of the shareholders for the year 2014 of Thai Auto Conversion Co., Ltd. held on June 6, 2014, the meeting approved to pay dividend from 50% of net profit after tax for the year 2013, of Baht 356.47 per share. The Company holds 14,900 shares thus the Company has received dividend income in the amount of Baht 5.31 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. The Company holds 14,900 shares thus the Company has received dividend income amount of Baht 13.6 million. 31

110 Annual Report 2014

According to the annual general meeting of the shareholders of Delta Thairung Co., Ltd. held on April 16, 2014, the meeting approved to pay dividend in totaling Baht 50 million. The Company holds 30% of its share capital thus the Company has received dividend income in the amount of Baht 15 million. In October 2014, Delta â&#x20AC;&#x201C; TR Co.,Ltd. which is on process of liquidation, has issued a notification to pay back 50% of its paid up share capital of Baht 20 million, thus the Company has received Baht 4.6 million. 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 Consolidated financial statements Separate financial statements Share of profit (loss) from investments in Company associates during the year Dividend received during the year 2014 2013 2014 2013 Delta-TR Co., Ltd. (583,373) Thai Auto Conversion Co., Ltd. 21,791,076 22,953,404 5,311,365 13,596,995 Delta ThaiRung Co., Ltd. 14,226,531 32,814,457 15,000,000 Kyowa Thairung Co., Ltd. (238,218) Trex Thairung Co., Ltd. (428,262) 34,767,754

Total

55,767,861

20,311,365

13,596,995

Financial information of the associated companies is summarised below.

Company

Paid-up capital as at December 31, 2014

Delta-TR Co., Ltd. Thai Auto Conversion Co., Ltd. Delta ThaiRung Co., Ltd. Kyowa Thairung Co., Ltd. Trex Thairung Co., Ltd.

10 75 300 20 300

2013

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,

2014

2013

2014

909 1,226 8 1

1,207 918 -

18 531 906 21 302

2013

19 443 811 -

116 201 2 3

2013

111 105 -

2013

(1) 109 57 (1) (1)

116 107 -

Shares of profit (loss) from investments in four associated companies and three associated included in the consolidated statements of comprehensive income for the year 2014 and 2013, amounting to Baht 35.01 million and Baht 55.77 million, respectively, were calculated based on financial statements prepared by the management of those companies and not audited by their auditors.

Thai Rung Union Car Public Company Limited

111

9. INVESTMENTS IN SUBSIDIARIES Details of investments in subsidiaries as presented in separate financial statements are as follows: Unit: Baht Companyâ&#x20AC;&#x2122;s name

Paid up capital 2014

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

2013

Million Million Baht Baht 25 25 27 400

27 400

Shareholding percentage 2014

2013

Dividend received during the year

Cost 2014

2013

2014

2013

23,500,000

37,600,000

84,600,000

94 91

25,380,000 364,000,000 412,880,000

25,380,000 364,000,000

412,880,000

37,600,000

84,600,000

According to the annual general meeting of the shareholders of Thai V.P. Auto Service Co., Ltd. held on May 7, 2014, the meeting approved to pay dividend from its retained earnings of the year 2013 of Baht 160 per share, totaling 250,000 shares, in the total amount to 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 2014 of Thai Ultimate Car Co., Ltd. held on May 7, 2014, the meeting approved to pay dividend from its retained earnings of the year 2013 of Baht 1,600 per share, totaling 25,000 shares, in the total amount of Baht 40 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, 2014 and 2013 consisted of:

Investment in LP Land and Housing Development Co., Ltd. Less: Allowance for impairment Other long-term investment - net

112 Annual Report 2014

Unit: Baht 2014 24,000 (24,000) -

2013 24,000 (24,000) -

11. INVESTMENT PROPERTIES - NET Investment properties as at December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements Building Building improvement

Land Cost As at December 31, 2012

Total

214,995,500 -

77,452,806 -

48,267,635 -

340,715,941 -

214,995,500

77,452,806

48,267,635

340,715,941

(53,240,000) -

(31,760,000) (12,467,526)

(22,729,695) (4,365,271)

(107,729,695) (16,832,797)

161,755,500

33,225,280

21,172,669

216,153,449

(61,875,096) (2,475,760)

(35,675,211) (2,074,716)

(97,550,307) (4,550,476)

As at December 31, 2013 Depreciation for the year Transfer out Write â&#x20AC;&#x201C; off

(64,350,856)

(37,749,927)

(102,100,783)

(1,984,748) 30,051,173 6,201,795

(1,747,552) 18,638,450 2,215,567

(3,732,300) 48,689,623 8,417,362

As at December 31, 2014 Net book value

(30,082,636)

(18,643,462)

(48,726,098)

As at December 31, 2013

214,995,500

13,101,950

10,517,708

238,615,158

As at December 31, 2014

161,755,500

3,142,644

2,529,207

167,427,351

Increase As at December 31, 2013 Increase Transfer out Write - off As at December 31, 2014 Accumulated depreciation As at December 31, 2012 Depreciation for the year

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. As at December 31, 2014 and 2013, subsidiariesâ&#x20AC;&#x2122; 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.

34 Thai Rung Union Car Public Company Limited 113

The subsidiary transferred the partial of land and building from investment properties to property, plant and equipment because a lease agreement with third party had already terminated and the subsidiary plan to use such assets within its group. The subsidiary had written off building that located on lease land because lease agreement had already terminated. Therefore, the subsidiary recorded loss from building written off in the amount of Baht 8.4 million under “Administrative expenses” account and compensation revenue in the amount of Baht 7.9 million under “Other income” account in Consolidated financial statements for the year ended December 31, 2014. As at December 31, 2014, 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, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements Land and Buildings Machinery, factory land and building equipment Office Motor and tools equipment vehicles improvement improvement Cost December 31, 2012 Acquisitions Transfer in (transfer out) Disposals December 31, 2013 Acquisitions Transfer in (transfer out) Disposals December 31, 2014 Accumulated depreciation December 31, 2012 Depreciation for the year Disposals December 31, 2013 Depreciation for the year Transfer in Disposals December 31, 2014 Allowance for impairment December 31, 2012 Increase

551,445,453 107,832,915 659,278,368 9,175,165 53,240,000 721,693,533

624,531,588 113,841,513 7,246,293 745,619,394 3,402,867 54,489,695 (389,708) 803,122,248

1,918,574,167 48,736,327 156,325,070 (132,864,368) 1,990,771,196 70,085,523 132,857,377 (49,020,465) 2,144,693,631

175,747,921 11,557,246 754,500 (38,239,735) 149,819,932 4,873,161 (2,284,495) 152,408,598

(8,866,478) (328,120,338) (1,445,027,422) (160,409,644) (160,970) (22,809,021) (89,011,941) (5,377,552) 127,392,206 38,141,074 (9,027,448) (350,929,359) (1,406,647,157) (127,646,122) (162,270) (27,284,733) (107,572,873) (6,451,856) - (48,689,623) 389,706 43,003,152 2,252,582 (9,189,718) (426,514,009) (1,471,216,878) (131,845,396) -

(2,445,265) (2,000,000)

Work in progress

Total

94,857,511 80,344,691 39,875,144 212,150,157 1,923,858 (166,249,721) (2,348,804) (4,697,732) 134,307,709 121,547,395 13,428,824 21,112,544 - (132,857,377) (5,474,546) (1,051,090) 142,261,987 8,751,472 (72,433,432) (13,443,871) 2,069,262 (83,808,041) (16,593,380) 5,444,296 (94,957,125) (476,000) -

3,445,501,331 533,993,302 (178,150,639) 3,801,343,994 122,078,084 107,729,695 (58,220,304) 3,972,931,469

- (2,014,857,314) - (130,803,355) 167,602,542 - (1,978,058,127) - (158,065,112) (48,689,623) 51,089,736 - (2,133,723,126) -

(2,921,265) (2,000,000)

114 Annual Report 2014

Amortization December 31, 2013 Amortization December 31, 2014 Net book value December 31, 2013 December 31, 2014

Land and Buildings land and building improvement improvement -

Unit: Baht Consolidated financial statements Machinery, factory equipment Office Motor and tools equipment vehicles 2,214,013 (2,231,252) (476,000) 69,302 (2,161,950) (476,000)

Work in progress -

Total 2,214,013 (2,707,252) 69,302 (2,637,950)

650,250,920

394,690,035

581,892,787

22,173,810

50,023,668

121,547,395

1,820,578,615

712,503,815

376,608,239

671,314,803

20,563,202

46,828,862

8,751,472

1,836,570,393

Depreciation for the year 2014 and 2013 included in manufacturing cost of Baht 126 million and Baht 110 million, respectively, remaining amount included in administrative expense. Unit: Baht

Separate financial statements Land and Buildings Machinery, factory Land and building equipment Office Motor and tools equipment vehicles improvement improvement Cost December 31, 2012 Acquisitions Transfer in (transfer out) Disposals December 31, 2013 Acquisitions Transfer in (transfer out) Disposals December 31, 2014 Accumulated depreciation December 31, 2012 Depreciation for the year Disposals December 31, 2013 Depreciation for the year Disposals December 31, 2014 Allowance for impairment December 31, 2012 Amortization

473,652,926 107,832,914 581,485,840 8,275,165 589,761,005

1,235,884,232 17,079,907 29,222,093 (120,650,439) 1,161,535,793 26,458,744 19,675,815 (40,250,718) 1,167,419,634

87,827,735 7,809,895 454,500 (4,751,974) 91,340,156 3,617,513 (2,229,066) 92,728,603

73,558,574 37,450,816 1,923,858 (919,033) 112,014,215 13,350,574 (15,582,062) 109,782,727

(8,866,478) (228,753,792) (1,096,475,722) (160,970) (10,581,586) (33,989,245) 120,409,333 (9,027,448) (239,335,378) (1,010,055,634) (162,270) (14,308,791) (39,514,147) 389,706 37,439,824 (9,189,718) (253,254,463) (1,012,129,957)

(80,260,529) (3,013,678) 4,682,596 (78,591,611) (3,898,743) 2,218,949 (80,271,405)

(60,668,448) (7,735,621) 917,627 (67,486,442) (13,029,819) 7,425,991 (73,090,270)

(476,000) -

342,803,281 111,961,919 7,015,200 461,780,400 295,000 (389,708) 461,685,692

(2,445,265) 2,214,013

Work in progress

Total

14,810,830 47,096,341 (38,615,651) (2,344,614) 20,946,906 2,470,367 (19,675,815) (1,051,090) 2,690,368

2,228,537,578 329,231,792 (128,666,060) 2,429,103,310 54,467,363 (59,502,644) 2,424,068,029

- (1,475,024,969) (55,481,100) 126,009,556 - (1,404,496,513) (70,913,770) 47,474,470 - (1,427,935,813) -

(2,921,265) 2,214,013

Thai Rung Union Car Public Company Limited

115

Unit: Baht Separate financial statements Land and Buildings Machinery, factory Land and building equipment Office improvement improvement and tools equipment

Motor vehicles

Work in progress

Total

December 31, 2013 Amortization December 31, 2014

(231,252) 69,302 (161,950)

(476,000) (476,000)

(707,252) 69,302 (637,950)

Net book value December 31, 2013

572,458,392

222,445,022

151,248,907

12,748,545

44,051,773

20,946,906

1,023,899,545

December 31, 2014

580,571,287

208,431,229

155,127,727

12,457,198

36,216,457

2,690,368

995,494,266

Depreciation for the year 2014 and 2013 included in manufacturing cost of Baht 45 million and Baht 39 million, respectively, remaining amount included in administrative expense. As at December 31, 2014 and 2013, 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, in consolidated financial statement and Baht 1,154 million and Baht 1,208 million, respectively, in separate financial statements. 13. DEFERRED TAX Deferred tax as at December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements 2013 2014 Deferred tax assets Deferred tax liabilities Net

18,968,606 (3,803,998) 15,164,608

Separate financial statements 2014 2013

20,113,838 (3,411,842) 16,701,996

10,255,749 (1,498,267) 8,757,482

9,981,450 (1,127,571) 8,853,879

Movements in deferred tax assets and deferred tax liabilities during the year were as follows: Unit: Baht Consolidated financial statements December Profit December 31, 2013 (loss) 31, 2014 Deferred tax assets Allowance for decline in value of inventory Allowance for impairment of investment

Separate financial statements December Profit December 31, 2013 (loss) 31, 2014

7,690,370

(2,260,079)

5,430,291

2,744,187

(409,787)

2,334,400

4,800

116 Annual Report 2014

Unit: Baht

Allowance for decline in value of fixed assets Allowance for bad debt

Consolidated financial statements December Profit December 31, 2013 (loss) 31, 2014 541,450 (13,860) 527,590 96,543

96,543

11,281,873

1,176,301

12,458,174

451,208 47,594 20,113,838

(47,594) (1,145,232)

Deferred tax liabilities Depreciation

(3,411,842)

Total

(3,411,842)

Provision for employee benefit liabilities Provision for liabilities Loss carry forward Total

Separate financial statements December Profit December 31, 2013 (loss) 31, 2014 141,450 (13,860) 127,590 -

7,091,013

697,946

7,788,959

451,208 18,968,606

9,981,450

274,299

10,255,749

(392,156)

(3,803,998)

(1,127,571)

(370,696)

(1,498,267)

(392,156)

(3,803,998)

(1,127,571)

(370,696)

(1,498,267)

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

130,949

7,690,370

2,744,187

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

451,208 589,571 17,932,587

(541,977) 2,181,251

451,208 47,594 20,113,838

8,894,349

1,087,101

9,981,450

Deferred tax liabilities Depreciation

(3,261,683)

(150,159)

(3,411,842)

(1,157,398)

29,827

(1,127,571)

Total

(3,261,683)

(150,159)

(3,411,842)

(1,157,398)

29,827

(1,127,571)

Thai Rung Union Car Public Company Limited 117 38

14. OTHER NON-CURRENT ASSETS - NET Other non-current assets as at December 31, 2014 and 2013 consisted of:

Unit: Baht

Consolidated financial statements 2013 2014 Land and building leasehold rights - net Withholding tax deducted at source Deferred cost of dies - net Land deposit Other non-current assets Total

784,812 10,154,224 35,071,594 70,000,000 4,997,984 121,008,614

1,308,114 20,019,657 77,107,557 66,529,625 10,443,432 175,408,385

Separate financial statements 2014 2013 887,566 47,780,793 70,000,000 4,043,863 122,712,222

94,340,144 66,529,625 10,371,684 171,241,453

As at December 31, 2014 and 2013, deposits for land consist of - Land deposit in the amount of Baht 66.53 million represents the payment according to land Sell and Purchase agreement of the total Baht 133.06 million. The remaining balance will be paid within May 2014. - According to minute of the Company's board of director meeting no.3/2014 on June 26, 2014, the meeting approved to terminate the above land Sell and Purchase agreement, and the Company will switch to buy another land. In October 2014, the Company received the refunded deposit in amount of Baht 66.53 million according to the termination agreement of land Sell and Purchase agreement dated on June 27, 2014. - On October 17, 2014, the Company has entered into a new land Sell and Purchase agreement of the total Baht 122 million with Amata City Company Limited and paid the first payment in amount of Baht 70 million according to the condition of agreement and the remaining balance will be paid on the date of asset transfer within December 2015. 15. BANK FACILITIES As at December 31, 2014 and 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 subsidiaries.

39 118 Annual Report 2014

16. TRADE AND OTHER PAYABLES Trade and other payables as at December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements 2013 2014 258,284,988 293,560,214 1,554,485 5,385,478 263,670,466 295,114,699 16,600,839 21,857,705 1,205,759 1,738,457 3,714,579 26,531,369 25,932,916 1,258,192 14,226,054 3,510,020 6,382,858 3,949,150 4,252,890 18,738,641 15,530,732 11,253,885 6,433,160 83,047,855 100,069,351 346,718,321 395,184,050

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

Separate financial statements 2014 2013 146,351,590 161,643,365 22,475,182 30,630,133 168,826,772 192,273,498 7,411,049 11,596,411 16,063,209 76,150,414 16,731,356 15,590,663 2,946,002 236,558 2,889,937 2,665,343 4,643,860 25,658,582 23,259,830 3,514,995 5,838,808 79,858,990 135,338,027 248,685,762 327,611,525

17. FINANCE LEASE LIABILITIES Finance lease liabilities as at December 31, 2014 and 2013 consisted of:

Unit : Baht Consolidated financial statements

2014

Within one year After one year but within five years Total

2013

Future minimum lease payments 10,878,989 5,489,606

Interest (423,739) (192,016)

Present value of minimum lease payment 10,455,250 5,297,590

16,368,595

(615,755)

15,752,840

Future minimum lease payments 10,659,569 14,182,455

Interest (1,028,461) (632,144)

24,842,024

(1,660,605)

Present value of minimum lease payments 9,631,108 13,550,311 23,181,419

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Unit : Baht Separate financial statements 2014

Within one year After one year but within five years Total

Future minimum lease payments 4,769,208 3,403,324 8,172,532

2013

Interest (314,076) (133,724)

Present value of minimum lease payment 4,455,132 3,269,600

Future minimum lease payments 7,028,922 8,655,747

Interest (645,752) (397,373)

Present value of minimum lease payments 6,383,170 8,258,374

(447,800)

7,724,732

15,684,669

(1,043,125)

14,641,544

18. EMPLOYEE BENEFITS OBLIGATION Employee benefits obligation in the statements of financial position as at December 31, 2014 and 2013 consisted of: Unit: Baht Post-employment benefit plan Consolidated financial statements Separate financial statements 2014 2013 2014 2013 Present value of obligation

62,290,871

56,409,366

38,944,796

35,455,067

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, 2014 and 2013 as follows: Unit: Baht Post-employment benefit plan Consolidated financial Separate financial statements statements 2013 2014 2013 2014 Employee benefits obligation as at January 1, Current service cost Interest cost Benefit paid Employee benefits obligation as at December 31,

56,409,366 9,063,442 1,534,623 (4,716,560) 62,290,871

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

35,455,067 6,451,496 1,064,793 (4,026,560) 38,944,796

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

120 Annual Report 2014

Employee benefit expenses in the statements of comprehensive income for the years ended December 31, 2014 and 2013 consisted of: Unit: Baht Post-employment benefit plan Consolidated financial Separate financial statements statements 2013 2014 2013 2014 Current service cost 9,063,442 10,769,706 6,451,496 6,259,243 Interest from obligation 1,534,623 2,405,704 1,064,793 1,390,277 Benefits paid (4,716,560) - (4,026,560) Total employee benefits expenses 5,881,505 13,175,410 3,489,729 7,649,520 Employee benefit expenses for the years ended December 31, 2014 and 2013 as shown in the statements of comprehensive income are as follows: Unit: Baht Post-employment benefit plan Consolidated financial Separate financial statements statements 2013 2014 2013 2014 Cost of sales 1,919,822 14,450,011 1,267,417 9,930,771 Selling expenses 738,515 (269,555) 743,738 (526,915) Administrative expenses 3,223,168 (1,005,046) 1,478,574 (1,754,336) Total employee benefit expenses 5,881,505 13,175,410 3,489,729 7,649,520 Principal actuarial assumptions as at December 31, 2014 and 2013 (expressed as weighted averages) as follows: 2556 2557 Consolidated and separate financial statements Discount rate at December 31 3.5% - 3.7% 5% Future salary increases 4% 4% Mortality rate Mortality table year 2008 Mortality table year 2008 The actuarial assumption of discount rate is estimated from weighted average of yield rate of government bonds as at the end of reporting date that reflects the estimated timing of benefit payments. The actuarial assumption of mortality rate for reasonable estimation of probability of retirement in the future is estimated from mortality table. 19. SHARE CAPITAL Thai Rung Union Car Public Company Limited

43 121

According to the shareholders’ annual general meeting of the Company held on April 29, 2014, the meeting approved to decrease share capital 300,953,698 shares with a par value of Baht 1 which originally issued on General Mandate procedure by reduces share capital from Baht 793,326,495 to Baht 492,372,797. The Company has already registered with the Ministry of Commerce. In addition, the meeting approved to increase authorized share capital from Baht 492,372,797 to Baht 590,847,356 by issuing 98,474,559 ordinary shares with a par value of Baht 1 in order to allocate to the existing shareholders to be reserved for dividend distribution and in order to have more volume of its stock in the market. The Company registered this increase share capital with the Ministry of Commerce on May 14, 2014. On May 26, 2014, the Company paid stock dividend with the total of 98,474,134 shares (As discussed in note 28). 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. 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 44

122 Annual Report 2014

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 501,589,497 to Baht 492,372,797. The difference between cost of treasury stocks and par value of common shares, amounting to Baht 38,733,754, is presented by deducting to premium on ordinary shares and inappropriate retained earnings in amount of Baht 13,361,261 and Baht 25,372,493, respectively. Moreover, the Company reversed the appropriation of retained earnings as a reserve for treasury share to inappropriate retained earnings. 21. RESERVES 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, 2014 and 2013 consisted of: Unit: Baht

Scrap sales Interest income Utilities, transportation service and sales of supplies Rental fee Compensation from cancellation of agreement Compensation income Others Total

Consolidated financial statements 2014 2013 97,520,560 134,693,842 2,538,310 8,285,019 4,419,439 5,594,000 22,208,993 7,905,816 19,879,055 160,066,173

10,516,426 6,906,000 20,338,910 180,740,197

Separate financial statements 2014 2013 31,213,988 43,097,664 4,508,433 12,205,088 10,251,942 2,275,440 22,208,993 7,219,567 77,678,363

16,290,601 4,282,320 7,861,300 83,736,973 45

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123

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 2014 and 2013, the Group contributed Baht 9 million to the funds. 24. EXPENSE BY NATURE Significant expenses by nature are as follows: Unit: Baht

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

Consolidated financial statements 2013 2014

Separate financial statements 2014 2013

442,446,626 552,591,407 163,659,585 138,129,511 1,528,694,286 2,029,073,893

247,244,952 323,628,699 71,862,725 56,832,571 848,858,800 1,086,105,681

(39,038,662)

(5,099,233)

(31,243,969)

(7,479,747)

25. INCOME TAX EXPENSES Income tax expenses for the years ended December 31, 2014 and 2013 consisted of: Unit: Baht Consolidated financial statements Separate financial statements 2014 2013 2014 2013 Current tax expense Current period 15,974,865 55,680,915 8,543,254 41,340,146 Deferred tax expense Movements in temporary differences Benefit of tax losses recognised Total

1,489,794 47,594 1,537,388 17,512,253

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

96,397 96,397 8,639,651

(1,116,928) (1,116,928) 40,223,218 46

124 Annual Report 2014

Reconciliation of effective tax rate Consolidated financial statements 2014 Rate (%)

Unit: Baht

Profit before total income tax expense Income tax using the corporate tax rate Effect from promoted activities Tax effect from equity method Expenses not deductible for tax purposes Effect from credit notes of management fee Effect from eliminate transactions Total

2013 Rate (%)

Unit: Baht

176,998,698 20

35,399,739 (10,846,419) (6,953,551) (575,388) 487,872 17,512,253

9.89

418,404,895 20

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

12.82

Separate financial statements 2014 Rate (%) Profit before total income tax expense Income tax using the corporate tax rate Income not subject to tax Expenses not deductible for tax purposes Effect from credit notes of management fee Total

8.47

2013 Unit: Baht 102,006,971 20,401,394 (11,582,273) (179,470) 8,639,651

Rate (%) 20

12.70

Unit: Baht 316,729,440 63,345,888 (19,639,399) 697,251 (4,180,522) 40,223,218

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 20% on net profit for the accounting periods beginning on January 1, 2013 to December 31, 2014. According to the Royal Decree No. 577 B.E. 2557 dated November 10, 2014, the corporate income tax rate will be continue at 20 % on net profit for the accounting periods beginning on January 1, 2015 to December 31, 2015. 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 year 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 untilised during the period to set-off against the current year's tax charge. Thai Rung Union Car Public Company Limited 125 47

Two subsidiaries have been granted the promotional privileges discussed in Note 26, including exemption from corporate income tax on net income from promoted activities. 26. PROMOTIONAL PRIVILEGES Two subsidiaries were granted investment promotional privileges by the Board of Investment (BOI). Major privileges are summarised below: Thai Auto Pressparts Co., Ltd. Subsidiary has received promotional privileges from the Board of Investment pursuant to the promotion certificate No. 1453 (1)/2544 dated on July 10, 2001 for manufacture of metal vehicle body parts, plastic and fiber glass vehicle parts, and the manufacture and maintenance of molds and jigs and also the promotion certificate No. 1610 (2)/2554 dated on March 22, 2011 for body parts and mold under certain conditions, the privileges include: -

Exemption from corporate income tax for a period of 8 years from the revenue commencement date of the promoted operations (June 3, 2002) for the promotion certificate No. 1453 (1)/2544 and exemption from corporate income tax for a period of 8 years from the revenue commencement date of the promoted operations (April 2, 2012), but not exceed the capital investment excluding the cost of land and working capital at its start-up date for the promotion certificate No. 1610 (2)/2554. Reduction for 50% of corporate income tax on profit derived from the promoted activities for a period of 5 years after the tax-exemption period end.

Revenue of sale for the year ended December 31, 2014 and 2013 which are derived from BOI promoted activities, are in the amount of Baht 891 million and Baht 1,293 million, respectively. Thai Rung Tools and Dies Co., Ltd. Subsidiary has received promotional privileges from the Board of Investment pursuant to the promotion certificate No. 1867(2)/2555 dated on June 6, 2012 for manufacture and maintenance of molds and jigs. The privileges include exemption from corporate income tax for a period of 8 years from the revenue commencement date of the promoted operations. In case of the Company has loss from operation during the tax exemption period, such losses can be deducted from taxable profit derived from the promoted activity for a period of 5 years after the tax-exemption period end and also include other promotional privileges which was imposed in the promotion certificate. The Company has obtained the promotional privileges since May 8, 2012. The subsidiary has commenced its revenue on July 31, 2014. Its services revenue for the year ended December 31, 2014 which is derived from BOI promoted activities, is in the amount of Baht 27.62 million.

126 Annual Report 2014

27. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the net profit for the year by the weighted average number of ordinary shares in issue during the year, after adjusting the number of ordinary shares in proportion to the change in the number of shares as a result of the increase in share capital arising from the issue of a stock dividend of 98.47 million shares on May 14, 2014. The number of ordinary shares of the prior period has been adjusted as if the stock dividend had been issued at the beginning of the earliest period reported. The number of ordinary shares and the paid-up share capital are restated as follows: Issued and paid-up share capital (Restated )

Unit : Shares

As at December 31, 2012 Decrease in capital from treasury stock in the fourth quarter of 2013 Increase in capital from a payment of stock dividend at May 14, 2014 As at December 31, 2013 (Restated)

501,589,497 (9,216,700) 98,474,134 590,846,931

The following table sets forth the computation of basic earnings per share: Net profit 2014

2013

(Thousand Baht) Basic earnings per share Net income attributable to equity holders

(Thousand (Thousand shares) (Thousand shares) Baht) (Restated)

152,408

353,687

Net profit 2014 (Thousand Baht) Basic earnings per share Net income attributable to equity holders

93,367

Consolidated financial statements Weighted average number of ordinary shares 2014 2013

2013

590,847

Separate financial statements Weighted average number of ordinary shares 2014 2013

(Thousand (Thousand shares) (Thousand shares) Baht) (Restated) 276,506

590,847

Earnings per share 2014

2013

(Baht)

(Baht) (Restated)

0.26

0.59

Earnings per share 2014

2013

(Baht)

(Baht) (Restated)

0.16

0.47

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28. DIVIDENDS PAID According to the annual general meeting of the shareholders of the Company held on April 29, 2014, the meeting approved the appropriation of dividend for the year 2013 of Baht 0.40 per share by cash and its share as follow : - Pay by cash of Baht 0.20 per share, in total amount not exceed of Baht 98,474,559.40 - Pay by ordinary share of the Company not exceed 98,474,559 shares, Baht 1 per share in the portion of 1 new share for each 5 shares held, equivalent to dividend distribution of Baht 0.20 per share. The Company has already paid all dividends on May 2014. 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. 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, 2014 and 2013 of the Group segment.

128 Annual Report 2014

Unit : Million Baht Car assembly and other related car services 2013 2014 Revenue from external customers 679 985 Intersegment revenues 22 20 Total revenues 701 1,005 Segment income 114 260 Unallocated income and expenses: Other income Selling expenses Administrative expenses Share of profit from investments in associated companies Corporate income tax Comprehensive income Investment property–net Property, plant and equipment-net Unallocated assets Total assets

532

535

Manufacture of equipment for production of car accessories 2014 2013

1,449 2,045 193 272 1,642 2,317 136 237

Sales of cars and car service centre 2014 2013

127 85 212 22

108 49 157 17

Other 2014 2013

64 64 20

Elimination of inter-segment revenues 2014 2013

104 (364) (445) 104 (364) (445) 35 (20) (41)

Consolidation 2014 2013

2,255 2,255 272

3,138 3,138 508

160 (69) (221)

181 (78) (248)

(18) 159

(54) 365

167 1,837 1,632 3,636

239 1,820 1,570 3,629

1,113

1,189

167 148

239 110

(14)

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.

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129

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 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. 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. 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 and factory, motor vehicles and machinery and equipments. As at December 31, 2014 and 2013, future minimum lease payments required under these operating lease contracts were as follows. Unit: Million Baht Consolidated financial statements 2013 2014 Payable Within 1 year 0.73 1.21 1 to 5 years 0.19 1.11 31.2 Bank guarantees As at December 31, 2014 and 2013, the Group has outstanding bank guarantees issued by banks as follows: Separate financial statement Consolidated financial statement Unit: million Unit: million Unit: million Unit: million Yen Dollars Baht Baht December 31, 2014 Import custom 0.18 Guarantee for the performance 0.11 0.35 0.35 contract 52 130 Annual Report 2014

Guarantee for tax refund Electricity use, among others December 31, 2013 Import custom Purchase of fixed assets Guarantee for tax refund Electricity use, among others

Consolidated financial statement Unit: million Unit: million Unit: million Yen Dollars Baht 58.55 9.55 73.00 -

0.46 -

Separate financial statement Unit: million Baht 3.12

4.96 58.55 14.59

3.16

32. CONTINGENT LIABILITIES As at December 31, 2014, the Group has contingent liabilities as follows: 1) 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 countered claim of diseasing for the amount of Baht 100,000,000 with interest rate at 7.5% per annum. At the present, the court dismiss Thairung Union Car Public Company Limited and order litigant to pay to the Company for the amount of Baht 1.63 million with interest charge 7.5% per annum and the compensation amount of Baht 0.13 million per day with interest charge 7.5% per annum commencing from October 24, 2013 until December 31, 2013 after that the compensation amount will be Baht 0.4 million per day with interest charge 7.5% per annum until the court judgement has been achieved. 2) 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 3,348,582 with interest rate at 7.5% per annum from due date. The Civil Court had the judgement that Thai Rung Tools and Dies Co., Ltd. has to pay damage to 4 litigants. Currently, such subsidiary appeals against judgement. 3) 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 15,658,000 with interest rate at 7.5% per annum from due date, the court appoint to investigate the witness in February 2015. 4) 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 final in the year 2014 and subsidiary has received compensation amount of Baht 7.8 million.

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131

33. CAPITAL MANAGEMENT The primary objective 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, 2014 and 2013, the Group’s debt-to-equity ratio was 0.13:1 and 0.15:1, respectively, and the Company’s was 0.14:1 and 0.19:1, respectively. 34. RECLASSIFICATION OF ACCOUNTS Certain accounts in the statement of financial position as at December 31, 2013, which are included in the 2014 financial statements for comparative purposes, have been reclassified to conform to the presentation in the 2014 financial statements. Unit: Baht Consolidated financial statements Before Reclassify After reclassify reclassify Statement of financial position As at December 31, 2013 20,113,838 (3,411,842) 16,701,996 Deferred tax assets 3,411,842 (3,411,842) Deferred tax liabilities -

Before reclassify Statement of financial position As at December 31, 2013 Deferred tax assets Deferred tax liabilities

9,981,450 (1,127,571)

Unit: Baht Separate financial statements Reclassify

(1,127,571) (1,127,571) -

After reclassify

8,853,879 -

35. APPROVAL OF FINANCIAL STATEMENTS These financial statements were authorised for issue by the Company’s Board of Directors on February 24, 2015. 54 132 Annual Report 2014

Sustainability Report

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133

Sustainability Report Sustainability Report 2014 1. Economic Operation Thai Rung Union Car Plc posted consolidated revenues of Bt.2,450 million for 2014, down by 27%, and net income attributable to owners of the parent company of Bt.152 million, down by 57% on 2013, in line with Thai automotive industry had been slowdown.

2. Environmental Operation 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 Companyâ&#x20AC;&#x2122;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 2014 it was assessed three times, twice by its own Internal Audit department and once by an external firm, Bureau Veritas (Thailand) Ltd, the results showing that the Companyâ&#x20AC;&#x2122;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. The Company uses technology to mitigate air pollution from the EDP paint dipping process, having developed a system (activated carbon filter)

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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.

3. Society Operation • Corporate Social Responsibility Policy • Health and Safety • Corporate Social Responsibility Activities Corporate Social Responsibility Policy 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. 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.

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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.

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, In 2014 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 2014 the Company had 250,800 hours (33 days) of uninterrupted accident-free 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:

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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.

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 2014 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 but not least, the Company’s

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employees, whom it particularly sought to involve in activities for the benefit of society. The activities can be broken down as follows. 1) Care of Community and Society 2) Support for youth education 3) Activities to promote charitable deeds

Care of Community and Society In 2014 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 2014 were as follows.

Community Relations 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 for young people’s studies Support for classical music concert tickets for secondary students of Nong Khaem Temple School The Company has a policy of providing tickets to world-class classical music concerts for students and teachers in Nong Khaem and Bang Khae districts, aimed at giving them the opportunity to see classical music concert by world-class orchestras. It also supports

concerts

Mahidol

University’s

Duriyangkhasin Orchestra with a view to promoting creativity and imaginative ideas among young people and introducing them to the gentler joys of classical music. The value of the tickets was over Bt.50,000.

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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 305 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.610,000.

• 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 to work together with the Company. Dr. Pranee Phaoenchoke and Directors of the Company therefore establish a budget for scholarships for children of employees. Since 2005 the scholarships have been presented on 18 March every year, this being the anniversary of the death of Mr. Vichien Phaoenchoke, the founder of Thai Rung. In 2014 the Company granted 92 scholarships to children of employees, totalling Bt.323,000. Since 2005 the Company has granted 1,614 scholarships to children of employees, totalling Bt.4,747,000.

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“Thai Rung sharing and caring” social assistance programme The Company arranged a social assistance activity under the “Thai Rung sharing and caring” programme, involving the donation of dolls and general requirements to children for a total value of over Bt.40,000 to the Pak Kret Infants’ Home for poor children and orphans.

Support for activities for the public benefit In support of activities for the common good, the Company set aside the necessary budget, materials and equipment to be able to carry out activities for the benefit of society throughout the year. During 2014 the Company devoted a total budget of Bt. 820,862 to activities of public benefit for a number of different organisations - educational institutions, government and private sector entities and various charities. Activities to promote good deeds Thai Rung encouraged all its employees to lead their lives in accordance with its philosophy of “Think right, do right, talk right”, promoting the following good deeds: • 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 2014:

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1) Donations and construction of a sports field for Ban Huai I Chin School,Ban Huai Pong Nam Branch, Lom Kao District, Phetchabun 2) Lunch and donations at Ban Tub BeukRuamjai School,Na Sa Ung Branch, Lom Kao District, Phetchabun 3) Donation of playground equipment to Kapong School, Kapong District, Phangnga 4) Donation of money to Luang Phor Tavesak Hospital charitable foundation 5) Breakfast with elderly people at Chalerm Ratchakumaree nursing home, NakornChaisri District, under the patronage of LuangPhor 6) Ceremonial tree planting inKaengKrachan National Park, KaengKrachan District,Phetchaburi

ď&#x201A;ˇ Good Deed for Father project

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• 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.

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