Carabao Group Pubilc Company Limited

Transcription

1
VISION
MISSION
To be a leading energy drink business in Thailand
and the CLMV region. (Cambodia, Laos, Myanmar
and Vietnam)
The company seeks to create c ustomer satisfaction
through proactive marketing innovations.
The company seeks to maintain a quality
management system, using know-how to drive its
business as well as being responsible towards
its community and society
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Table of
Contents
3
6
8
14
15
16
20
24
38
41
62
64
71
72
76
78
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Annual Report 2014
VISION / MISSION
MESSAGE FROM CHAIRMAN OF THE BOARD
DIRECTOR OF THE COMPANY
EXECUTIVE SUMMARY
FINANCIAL HIGHLIGHT
GENERAL INFORMATION
MAJOR DEVELOPMENT OF THE GROUP
RISK FACTORS
NATURE OF BUSINESS OPERATION
BUSINESS OPERATION OF EACH PRODUCT LINE
RESEARCH AND DEVELOPMENT
ASSETS USED IN BUSINESS OPERATION
FUTURE PLAN
INFORMATION ON THE SECURITIES AND SHAREHOLDERS
DIVIDEND POLICY
MANAGEMENT STRUCTURE
92
100
108
110
114
134
145
208
210
211
218
CORPORATE GOVERNANCE POLICY
NOMINATION AND APPOINTMENT OF DIRECTOR AND
TOP-LEVEL EXECUTIVES
INTERNAL CONTROL AND RISK MANAGEMENT
CORPORATE SOCIAL RESPONSIBILITY
RELATED PARTY TRANSACTIONS
FINANCIAL STATUS AND COMPANY PERFORMANCE
FINANCIAL STATEMENT
REPORT OF THE AUDIT COMMITTEE
REPORT OF THE RISK MANAGEMENT COMMITTEE
DETAILS OF THE DIRECTORS, EXECUTIVES, CONTROLLING
PERSONS AND COMPANY SECRETARY
POSITION HOLDING BY DIRECTORS AND EXECUTIVES IN THE
COMPANY, SUBSIDIARIES AND RELATED COMPANIES
5
“The Group employs an
innovative and efficient
marketing system to
maintain and expand our
consumers’ base through
distribution coverage (Push
Strategy) and stimulate
demand among consumers
(Pull Strategy)”
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Annual Report 2014
Message from Chairman
of the Board
Carabao Group has been operating under the
concept of “Fighting Spirit” for more than a decade.
Manufacturing of energy drink under “Carabao Dang”
brand has been the main business from the beginning.
The concept of “Fighting Spirit” reflects lifestyle of
hardworking people in Thailand who fight for a better
life. It is also embedded into the mindset of every
employees in the organization. Our Brand Ambassador,
Mr. Aed Carabao, the founder and lead singer of the
“songs for life” music band, “Carabao”, that is one of
the most successful Thai bands of all time. As his music
also conveys the concept of fighting spirit, Mr. Aed
become the brand ambassador who has personality
that truly matches with our product , so our energy
drink “Carabao Dang” quickly succeeded in gaining
customer recognition.
In term of marketing, The Group employs an innovative
and efficient marketing system to maintain and expand
our consumers’ base through distribution coverage (Push
Strategy) and stimulate demand among consumers
(Pull Strategy). We have our own in house on ground
marketing event team known as “Bao Dang Girls”
who are effectively trained and managed as a
marketing tool. They are responsible to comprehensively
communicate brand’s messages and marketing activities
directly to target consumers. These teams wil work under
strategy and goal that is correspondent to consumers’
behavior in each areas. The objective is to create
opportunity for product trials and brand experiences to
enhance relationship between our brand and consumers
that wil eventually lead to consumers’ satisfaction and
long term brand loyalty.
The total revenues in 2014 were 7,448.4 mil ion Baht, an
increase of 586.5 mil ion Baht (8.5 %), and net profits
were 1,011.7 mil ion Baht, an increase of 385.3 million
Baht (61.5 %). In 2014 we have launched a new
product, “Start Plus”, which is an electrolyte drink with
zinc. Additionally, Our new glass bottle manufacturing
plant, A.P.G. has also begun to operate in August which
wil reduce our dependency on third-party sourcing
and improve our profitability.
As the Chairman of the Board, I assure the shareholders
that the Board of Directors and the management team
are determined to bring prosperity to the Company
with aggressive and innovative marketing strategies. The
Company aims to be leader in energy drink industry
in Thailand and within the CLMV regions (comprising
of Cambodia, Laos, Myanmar and Vietnam). Moreover,
The Company remains committed to CSR activities in
order to deliver under the corporate governance within
the concept of “Value for Life”. We wil maximize our
consumers’ satisfaction and continuously develop our
organization, on knowledged-based, to be a world-class
standard to ensure sustainability.
Sathien Sethasit
Chairman of the Board
7
Director of the Company
2.
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Annual Report 2014
1.
3.
1. Mr. Sathien Setthasit
Chairman of the Board of Directors
Educational Qualifications/
Work Experience
Training
2014 – Present
Chairman of the Executive Committee, Chairman of the Nomination and
Remuneration Committee, and Chief
Executive Officer
Carabao Group Public Company Limited
2014 – Present
Asia Pacific Glass Co., Ltd
2014 – Present
Chairman of the Board of Director
Tawandang DCM Co., Ltd.
- B.A. (Political Science), Sukhothai
Thammathirat Open University
- Director Accreditation Program (DAP),
Institute of Directors (IOD)
2013 – Present
2002 – Present
Director /Chairman of the Board of
Directors
Carabao Tawandang Co., Ltd.
2. Miss Nutchamai Thanombooncharoen
Vice Chairman of the Board of Directors
Work Experience
2014 – Present
Vice Chairman of the Executive Commit- B.A. (Social Sciences), Silpakorn University tee, Vice Chairman of the Risk Management Committee, Member of the
- M.A. (Commerce and Accountancy),
Nomination and Remuneration Committee,
Thammasat University
and Managing Director
- Director Certification Program (DCP),
Institute of Director (IOD)
- Financial Statements for Directors (FSD), 2014 – Present
- Risk Management Committee Program Asia Pacific Glass Co., Ltd.
2013 – Present
(RMP, Institute of Directors (IOD)
2013 – Present
Managing Director
Training
2012 – Present
Managing Director
2002 – Present
Director
2002 – 2013
Deputy Managing Director
1999 – Present
Director and member of the Executive
Committee
Tawandang Brewery Co., Ltd.
1999 - Present
Director and member of the Executive
Committee
Tawandang German Brewery Co., Ltd.
3. Mr. Yuenyong Opakul
Director
Training
- Honorary Doctorate (Liberal Arts),
Bangkok Thonburi University
- Honorary Doctorate (Thai Popular Music), Thammasat University
Work Experience
2014 – Present
Senior Deputy Managing Director
2014 – Present
Director
Asia Pacific Glass Co., Ltd.
2014 – Present
Director
2002 – Present
Director
2002 - Present
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4. Mr. Paiboon Kujareevanich
Director
Training
- B.A. (Commerce and Accountancy),
Chulalongkorn University
- M.B.A., Thammasat University
Work Experience
2014 – Present
Director, member of the Executive
Committee, Deputy Managing Director,
Accounting and Finance and Company
Secretary
2014 – Present
Director
2014 – Present
Director and Deputy Managing Director,
Accounting and Finance
2014 – Present
Director and Deputy Managing Director,
Accounting and Finance
2013 – Present
Deputy Managing Director, Accounting
and Finance
2007 – 2013
Deputy Managing Director and Company
Secretary
Oishi Group Public Company Limited
5. Mrs. Saowanee Kamolbutr
Chairman of the Audit Committee
Training
- B.A. in Political Science (Public
Administration), Thammasat University
- M.A. in Political Science (Public
Administration, Thammasat University
- Certificate, National Defence College of
Thailand
- Certificate (Class 7), Top Management
Program, Capital Market Academy
- Senior Executive Program Kellogg –
Sasin Graduate Institute of Business
Administration of Chulalongkorn University
- The Management Development,
Wharton School
- Director Certification Program (DCP),
Institute of Directors (IOD), Class 69
- Role of the Compensation Committee
(RCC), Institute of Directors (IOD)
- Role of the Chairman Program (RCP),
- Financial Institutions Governance Program (FGP), Institute of Directors (IOD)
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Annual Report 2014
Work Experience
2014 – Present
Independent Director, Chairman of the
Audit Committee and Vice Chairman
of the Nomination and Remuneration
Committee
2013 – Present
Independent Director, and member of
the Audit Committee
Interlink Communication Co., Ltd.
2012 – Present
Independent Director and Chairman of
the Audit Committee
T.K.S. Technology Public Company Limited
2012 – 2013
Chairman of the Executive Committee
Retail Business Group, Thai Automobile
Co., Ltd.
2009 – 2013
Chairman of the Board of Director
Thai Military Bank Public Company Limited
2009 – 2013
Director
Don Muang Tollway Public Company
Limited
2009 – 2012
Deputy Permanent Secretary for Finance,
Chief of the Revenue Cluster
Ministry of Finance
6. Mr. Boonnaris Suwannapool
Member of the Audit Committee
Training
- B.A. (Law), Ramkamhaeng University
- M.A. (Political Science), National
Institute of Development Administration
- Director Accreditation Program (DAP),
Work Experience
2014 – Present
Independent Director, Member of the
Audit Committee and Member of the
Nomination and Remuneration Committee
2013 Member of the Committee on
Commercial Science
Senate
2012 Member of the Agricultural Research
Development Committee
Ministry of Agriculture and Cooperatives
2012 Chairman of the Foreign Business
Commission
Department of Business Development
2012 Chairman of the Patent Board
Department of Intellectual Property
2012 Member of the Asset Management
Committee
Anti-Money Laundering Office
2011 Member of the Special Case
Committee
Department of Special Investigation
2011 Member of the Cane and Sugar Fund
Management Committee
Ministry of Industry
2011 Member of the Government Representative Committee in the Wage Committee
(No. 18)
Ministry of Labour
2011 News Advisor, National Intelligence
Council
Office of the Prime Minister
2010 Member of the National Health Security
Committee
Ministry of Public Health
7. Mr. Distorn Vajarodaya
Member of the Audit Committee
Training
- B.A. (Accounting), University of
the Thai Chamber of Commerce
- MBA, Kasetsart University
- Ph.D. (Management), Rattana
Bundit University
- Director Accreditation Program
(DAP), Institute of Directors (IOD)
Work Experience
2014 – Present
Independent Director, Member of the
Audit Committee and Member of the
Nomination and Remuneration Committee
2013 – Present
Director
Thai Insurance Public Company Limited
2011 – Present
Independent Director and Member of the
Audit Committee
Asia Aviation Public Company Limited
2011 – Present
Grand Chamberlain
Bureau of the Royal Household
2007
Assistant Grand Chamberlain
1999
Director
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8. Mr. Kanit Patsaman
Independent Director
Training
- Bachelor of Economics, Ramkamhaeng University
- MBA, National Institute of Development Administration
- Director Certification Program
(DCP), Institute of Directors (IOD)
Work Experience
2014 - Present
2013
Director Thai Credit
Guarantee Corporation
2005 - 2013
Advisor to liquidation directors and
authorized representative of liquidation
directors Thai Asset Management Corporation
9. Mr. Sanchai Jullamon
Training
- B.A. (Law), Ramkamhaeng University
- M.A. (Law), Thammasat University
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Annual Report 2014
Work Experience
2014 - Present
2014 - Present
Independent Lawyer
2014 - 2013
Director of the Zoological Park Organization
under the Royal Patronage of His Majesty
the King Ministry of Natural Resources and
Environment
2013 - 2002
Partner C&K Law office
2002 - 1984
Litigation manager
TMB Bank Public Company Limited
Executive Committee
Chairman of Executive Committee
2. Ms. Nutchamai Thanombooncharoen
Vice Chairman of Executive Committee
1.
2.
3.
Member of Executive Committee
4. Mrs. Wongdao
Thanombooncharoen
5. Mr. Kamoldist Smuthkochorn
6. Mr. Surasak Prokkati
4.
5.
6.
Audit Committee
Chairman of Audit Committee
Member of Audit Committee
Member of Audit Committee
1.
2.
3.
Management
Risk Management Committee
Chairman of Risk Management Committee
Vice Chairman of Risk Management
Committee
Member of Risk Management Committee
4. Mrs. Wongdao Thanombooncharoen
7. Mr. Anupong Pongsuwan
Nomination and Remuneration
Committee
Chairman of Nomination and Remuneration
Commiittee
Vice Chairman of Nomination and
Remuneration Commiittee
Member of Nomination and Remuneration
Commiittee
Commiittee
Commiittee
1. 2.
3.
4.
5
6.
7.
Chief Executive Officer
Ms. Nutchamai Thanombooncharoen
Managing Director
Mr. Yuenyong Opalkul
Mrs. Wongdao Thanombooncharoen
Senior Deputy Managing Director Marketing Operations
Mr. Kamoldist Smuthkochorn
Deputy Managing Director - Marketing
Mr. Paiboon Kujareevanich
Deputy Managing Director - Accounting
and Finance
Mr. Surasak Prokkati
Deputy Managing Director - Production
Miss Suporn Samakkabutr
Director of Accounting Department
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Executive Summary
In 2014, the Group had revenues from domestic business of 5,357.8 million baht, a 0.9 %
increase from previous year which was in line with the industry growth of 1.0%, however, such
a growth was lower than those of the past three years at 8% CAGR, due to the political
unrest and adverse economic situation.
The international business in 2014 had revenues of 2,090.6 million baht, an increase from
last year by 34.7% as a result of successful market penetration in CLMV region in particular
Cambodia, Myanmar and Vietnam, such a growth was higher than the previous 3-year CAGR
of 23.4%.
COG to sales in 2014 was 66.3% which was lower than last year of 69.8%, due mainly to
the decrease costs in packaging materials. The Group expects another cost improvement in
2015 due to the usage of own-produced glass bottles.
The total revenues were 7,574.6 million baht and net profits were 1,011.7 million baht,
which represent the increases from last year of 9.3% and 61.5% respectively.
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Annual Report 2014
Financial Highlight
15
General Information
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Annual Report 2014
1 General Information
Name of Issuer
Type of Business
: Carabao Group Public Company Limited
: Holding Company, with shares in companies that are engaged
Principle place of business
:
Company Registration Number
Telephone
Fax
Website
Registered capital
Paid-up capital
:
:
:
:
:
:
in the fully integrated complete business of manufacturing,
marketing, selling and managing distribution of energy drinks
and other beverages.
393, 393 Silom Building, 7-10th floor, Silom Road, Silom
Sub-District, Bangrak District, Bangkok 10500, Thailand
0107557000268
+66 2636 6111
+66 2636 7951
www.carabaogroup.com
Baht 1,000,000,000 (Par Baht 1)
Baht 1,000,000,000
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The Company’s subsidiary as of December 31, 2014
Company
Nature of Business
Conducts the business
1. Carabao
Tawandang Co., of manufacturing,
marketing, and
Ltd.
2. Tawandang
DCM Co., Ltd.
3. Asia Pacific
Glass Co., Ltd.
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Annual Report 2014
CBG’s Shareholding
Registered Number
%
of Shares Shareholding
Capital
(Million
(Million baht) (Million
Shares)
Shares)
Common
300.00
3.00
2.99
99.99
Stock
Type of
stock
selling energy drinks
under Carabao Dang
trademark, electrolyte drinks under Start
Plus trademark and
other beverages which
the Group plans to
manufacture and sell in
the future.
Conducts the business Common
of managing distribution Stock
of the Company’s
products domestically
through traditional trade
and modern trade.
Conducts the business Common
of manufacturing,
Stock
and procuring glass
bottles as raw materials
for producing energy
drinks and other
beverages.
100.00
1.00
0.99
99.99
450.00
4.50
4.49
99.99
Reference
Securities
Registration
Thailand Securities Depository Co., Ltd.
62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey,
Bangkok 10110, Thailand
Tel. +66 2229 2800
Fax: +66 2359 1259
Auditor
E Y OFFICE COMPANY LIMITED
33ND Floor, Lake Rajada Office Complex, 193/136-137 New Rajadapisek Road, Khlong Toei,
Tel. +66 2264 0777,+66 2661 9190
Lawyer
Baker & McKenzie Ltd.
990 Abdulrahim Place Rama IV Road, Bangkok 10500, Thailand
Tel. +66 2636 2000
Investor
Relations
Miss Nutchanok Vongswat
393, 393 Silom Building, 7-10th floor, Silom Road, Silom Sub-District, Bangrak District,
Tel. +66 2636 6111
E-mail : [email protected]
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Major Development of the Group
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Annual Report 2014
2. Major Developments of the Group
Year Incidents
2001 : CBD was incorporated with the initial registered capital of Baht 1.0 mil ion, consisting of 10,000.0
ordinary shares with the par value of Baht 100.0 each. The company was a joint investment
among Mr. Sathien Setthasit, Miss Nutchamai Thanombooncharoen, and Mr. Yuenyong Opakul
(Aed Carabao) to operate the business of manufacturing, marketing, and selling energy drinks.
: CBD commenced the installation of machines in its energy drink manufacturing factory.
2002 : CBD increased its registered capital by Baht 99.0 mil ion by issuing 990,000.0 ordinary shares with
the par value of Baht 100.0 each, resulting in an increase of registered capital from Baht 1.0
million to Baht 100.0 mil ion. There was another increase of capital by Baht 30.0 mil ion, divided
into 300,000.0 ordinary shares, each at a par value of Baht 100.0. The registered capital was
thus increased from Baht 100.0 mil ion to Baht 130.0 mil ion. The objective of the capital increase
was to purchase machines required in the manufacturing of energy drinks and to be used as
working capital.
: The Carabao Dang manufacturing factory is located in Bangpriang Sub-district, Bangbo District,
Samut Prakan Province. The factory commenced its commercial operations having three production
lines, with a maximum production capacity of 275 mil ion bottles per year.
: In October, CBD launched an energy drink under the “Carabao Dang” trademark. At that time,
CBD appointed a local distributor to be the exclusive domestic distributor of Carabao Dang.
2003 : CBD increased its registered capital by Baht 70.0 mil ion by issuing 700,000.0 ordinary shares with
the par value of Baht 100.0 each, causing the registered capital to increase from Baht 130.0
million to Baht 200.0 mil ion in order to expand its production capacity by installing an additional
three production lines, totaling a maximum production capacity of 273 mil ion bottles per year.
As a result, CBD has increased its maximum capacity from originally 275 mil ion bottles per year
to 548 mil ion bottles per year.
: The Group won the Media & Marketing Magazine Asian Brand Marketing Effective Awards and
Popular Vote from Marketing Association of Thailand for the television advertisement campaign
used in the launch of Carabao Dang in 2002.
2004 : CBD installed a can packaging conveyor with a maximum production capacity of 117 million
cans per year
: CBD started export of energy drinks.
2010 : CBD added another can packaging conveyor, resulting in an additional maximum production capacity
of 88 mil ion cans per year, or an increase from the maximum production capacity of 117 million
cans per year to 205 mil ion cans per year.
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2011
2012
2013
:
:
:
:
:
22
Annual Report 2014
: CBD added two bottle packaging conveyors, totaling a maximum production capacity of 182
million bottles per year, or an increase in the maximum production capacity from 548 million
bottles per year to 730 mil ion bottles per year.
: DCM was incorporated with the initial registered capital of Baht 1 mil ion, divided into 10,000.0
ordinary shares, with the par value of Baht 100.0 per share. Subsequently, the registered capital
was increased by Baht 99.0 mil ion, divided into 990,000.0 shares, with the par value of Baht 100.0
per share, resulting in an increase of registered capital of DCM from Baht 1.0 mil ion to Baht
100.0 mil ion in order to operate the core business of managing domestic distribution of drinks.
: CBD official y appointed DCM as the distribution manager for all of CBD’s products in place
of third party distributors.
CBD installed two additional bottle packaging conveyors, totaling a maximum production capacity
of 120 mil ion bottles per year, thus resulting in an increase of maximum capacity from previously
730 million bottles per year to 850 mil ion bottles per year. The increase was to support the growth
of its business of manufacturing, marketing and selling energy drinks.
CBD installed one can packaging conveyor, resulting in an increase of maximum production capacity by 145 mil ion cans per year, or an increase from 205 mil ion cans per year to 350 million
cans per year.
The shareholders recognize the importance of procuring amber glass bottles. As a result, APG,
which was a company established by the existing shareholders on 23 September 2005, was used
to operate the business of manufacturing, and procuring glass bottles. APG’s registered capital was
increased from the initial registered capital of Baht 100.0 mil ion, divided into 1.0 mil ion ordinary
shares with the par value of Baht 100.0 each to Baht 450.0 mil ion, divided into 4.5 mil ion ordinary
shares with the par value of Baht 100.0 each. The registered capital of Baht 450 mil ion was fully
paid up in 2014. APG is the owner of a title over a land in Bang Samak Phimpa Sub-District,
Bang Pakong District, Chacheungsao Province. APG wil use such land in the construction of its
amber glass bottle manufacturing factory.
APG obtained a Promotion Certificate No. 2326 (4)/2556 from the BOI, under which APG is entitled to tax benefits and other benefits for the manufacture of glass bottles as specified in such
Promotion Certificate.
CBD increased its registered capital by Baht 100.0 mil ion by issuing 1.0 mil ion new ordinary shares,
each with a par value of Baht 100.0, resulting in an increase in the registered capital from Baht
200.0 mil ion to Baht 300.0 mil ion.
2013
: In order to prepare to be listed on SET, the shareholders, Mr. Sathien Setthasit, Miss Nutchama
Thanombooncharoen and Mr. Yuenyong Opakul, incorporated Carabao Group Co., Ltd. (the
“Company” or “CBG”) as a holding company on 28 August 2013 with the initial registered capital
of Baht 1.0 mil ion, divided into 10,000.0 ordinary shares with the par value of Baht 100.0 each.
Subsequently, the Company carried out the restructure of the Group by continuously increased its
registered capital for acquiring shares in all three subsidiaries, namely CBD, DCM, and APG from
the existing shareholders of each subsidiary at that time at the par value for 70%, 100% and
100% respectively. As a result, as of 31 December 2013, the Company’s registered capital was
Baht 620.0 mil ion, divided into 6.2 mil ion ordinary shares, each with a par value of Baht 100.0.
2014 : CBD installed a Krones production line with a maximum production capacity of 350 mil ion bottles
per year, resulting in an increase of maximum production capacity from 850 mil ion bottles per
year to 1,200 mil ion bottles per year.
: CBD readjusted two existing bottle packaging conveyors that have a maximum production capacity of 120 mil ion bottles per year to be used for the packaging of electrolyte drinks. This resulted in
CBD has the remaining production capacity of bottled energy drinks was 1,080 mil ion bottles per
year and the maximum production capacity for electrolyte drinks was 120 mil ion bottles per year.
In May, CBD launched its electrolyte drinks under the “Start Plus” trademark in Thailand.
Prior to the initial public offering, the board of directors meeting No. 6/2014 held on 30 June 2014
resolved to approve the payment of interim dividend to existing shareholders of the Company in
the amount of Baht 279.0 mil ion.
The Company increased its registered capital by Baht 230.0 mil ion by issuing 2.3 mil ion ordinary
: shares, each at a par value of Baht 100.0. Thus, registered capital of the Company was increased
from Baht 620.0 mil ion to Baht 850.0 mil ion. The objectives of the capital increase were to (1)
the Group’s restructuring by acquiring additional 30 percent of shares in CBD thus resulting in the
Company holding 100 percent of shares in CBD and (2) to pay up the capital of APG in an
amount of Baht 140.0 mil ion for the construction of the amber glass bottle manufacturing factory.
Carabao Group Co., Ltd. was converted to a public limited company and changed its name to
: “Carabao Group Public Company Limited”. The par value of the shares has been changed from
Baht 100.0 per share to Baht 1.0 per share. The Company also decided to issue no more than
150.0 mil ion new ordinary shares for public offering
In August, APG’s amber glass bottle factory commenced its commercial operation.
: In November 21, Carabao Group began trading in Stock Exchange of Thailand (SET) under the
: symbol “CBG”, mobilizing 4.2 bil ion baht in proceeds from the sale of 250 mil ion shares at the
IPO price of 28 baht, of which 150 mil ion shares are newly issued and 100 mil ion are from
existing shareholder with initial capital of 850 mil ion shares.
: The Group won Best Equity Deal of The Year in Southeast Asia from the 8th Annual Alpha
Southeast Asia Deal and Solution Awards 2014.
23
Risk Factors
24
Annual Report 2014
3. Risk Factors
Risk factors for the Group can be categorized into risks associated with the Company, risks
associated with its subsidiaries: CBD, APG and DCM, and other risks. Details are as follows:
3.1 Risks Associated with the Company
3.1.1 Risk resulting from the operation as a holding company
The Company operates as a holding company which is a company having its revenues mainly
derived from the shares held in other companies and having no business operation of its own which
can generate material income. Therefore, the Company’s turnover depends upon the performance and
the capability to pay dividends of its subsidiaries. Consequently, potential risks are those relating to the
business operation and capability to pay dividends of its subsidiaries. At present, the revenues from its
subsidiaries account for 100% of the Company’s net income. As a result, the performance of its subsidiaries
is material to the Company’s overall profits. Therefore, if the subsidiaries experience operating difficulties,
the Company’s overall operation results will also be directly affected. The subsidiaries of the Company
have a policy to pay dividend to shareholders at the rate of not less than 40.0 percent of net profit
after income tax under the separate financial statements of the subsidiaries and the allotment of a legal
reserve. The rate of dividend payment is subject to their operating results, financial conditions, liquidity,
investment requirements, additional investments, business expansion, conditions and restrictions provided
under loan agreements and other factors relating to their management as their Board of Directors and/
or shareholders may consider appropriate. However, the dividend payment must not be in excess of
the retained earnings under the subsidiaries’ separate financial statements, and must be in accordance
with the relevant law.
Furthermore, the dividends, which the Company will pay to its shareholders, will be paid out of
its net profit shown in its non-consolidated financial statements, which depend upon its subsidiaries’ ability
to pay dividends. Due to the fact that the dividends paid by its subsidiaries account for substantial y
all income in the Company’s non-consolidated financial statements, if the subsidiaries are unable to pay
dividends to the Company according to their dividend policies due to their negative operation results
during that period of time or any other business reasons, such as the need for a capital reserve for
business expansion or loan repayment, etc., the Company’s ability to pay dividend will be affected.
At present, it is the Company’s policy to pay dividends of not less than 40 percent of the net
profit, under the consolidated financial statements, after the deduction of income tax, but not including
unrealized profits or loss from the exchange rate, and after the allocation of capital reserves. In this
regard, the dividend payment rate depends on the investment plan, conditions and limitations under
loan agreements or other relevant agreements (if any), financial condition and operation results, and
other related factors. The board of directors may review and revise the dividends payment policy from
time to time in order to reflect the Company’s future plan of business growth, demand for investment
fund and working capital, and other factors as deemed appropriate. Payment of dividends shall not
25
exceed the accumulated profits that appear in the Company’s separate financial statements, and shall
be in accordance with relevant laws, namely the Public Limited Companies Act, and other conditions
such as actual cash flow, profit, financial condition, and demand for capital of the Company, and
other factors that the board of directors may deem relevant. However, the Company cannot give a
warranty whether the Company will make profits in any given year or whether the board of directors
wil pay dividends despite the Company making profits. Pursuant to the Public Limited Companies Act,
if a company stil suffers accumulated loss, the company cannot pay dividends even if the company
has net profit in that year.
3.2 Risks Associated with CBD
3.2.1 Risk relating to the competition in the business of energy drinks and
other beverages
Energy drinks and electrolyte drinks are highly competitive products among both existing market
players and newcomers. Due to significantly high competition in the energy drinks market in Thailand,
there has been no significant price adjustment in the past. At present, a 150 ml energy drink is sold at
a retail price of Baht 10 per bottle. Therefore, in order to maintain or increase their market shares, each
market players, including CBD, need to conduct marketing activities as well as utilizing budget allocated
for advertising and public relations in a regular and continuous manner. These material competitors
of CBD may have better capital capacity and more efficiency in their production and in conducting
successful marketing activities than CBD does. As a result of this intense competition, CBD might be
unable to maintain its market share or may incur significant marketing expenses, which could have a
material adverse effect on the businesses, operation results and financial condition of the Group.
3.2.2 Risk relating to CBD’s main income deriving from only type of product which
is Carabao Dang
As of the fiscal year ended 31 December 2013 and 2014, main source of revenue of CBD is
from the sale of Carabao Dang, representing 99.0 percent and 98.4 percent of total revenue of CBD.
Therefore, should the consumers’ behaviors change and Carabao Dang is not popular among the
consumers, or if the regulations or government policies applicable to the manufacturing, marketing and
selling of Carabao Dang significantly change and the costs in complying with such changed regulations
or government policies increase, there could be a material adverse effect on the businesses, operation
results and financial condition of the Group.
3.2.3 Risk resulting from the launch of new products
CBD anticipates the importance of launching new products in the market. In launching a new
product each time, CBD has to invest substantial amounts of funding for product development, design,
manufacturing and marketing, including advertisement, public relations and sales promotion to make
the products well known, attract consumers’ positive response, and achieve a satisfactory sales volume
for such new products. CBD has potential risk from such investment if the new product is not well
accepted or favoured by consumers especially in a highly competitive business environment. If CBD is
26
Annual Report 2014
not successful in launching a new product, there could be material adverse impact on the Group’s
businesses, operation results and financial condition.
3.2.4 Risk relating to the reliance on Mr. Yuenyong Opakul (Aed Carabao) as the
presenter and brand ambassador for the Group’s products and the reliance of
the image of the Carabao Band
At present, CBD has an agreement to engage Mr. Yuenyong Opakul to be an exclusive presenter
and brand ambassador of CBD to perform the duties of public relations and promotion of image for
the “Carabao Dang” trademark or products. Such public relations and advertising agreement has a
term of five years and can be automatically extended for another five years. The fee for the first five
years is fixed at Baht 10 million per year and for the extended five-year period is at Baht 12 mil ion
per year. In this regard, the Group can propose an adjustment of the fee as to be appropriate and
conform to the market price
Therefore, CBD relies on the good image and reputation of Mr. Yuenyong Opakul in its marketing
activities. As a result, should there be any significant change in image and reputation of Mr. Yuenyong
Opakul, the image of “Carabao Dang” brand might be materially affected and CBD may lose its existing
target customers. These could have a material adverse impact on the Group’s businesses, operation
results and financial condition.
In addition, as the “Carabao Dang” trademark is associated with the Carabao songs-for-life
band, it thus has to rely on the good image and reputation of the Carabao songs-for-life band. As
a result, should there be any significantly negative change in image and reputation of the Carabao
songs-for-life band, the image and products of “Carabao Dang” brand might be materially affected
and CBD may lose its existing target customers. These could have a material adverse impact on the
Group’s businesses, operation results and financial condition.
3.2.5 Risk relating to CBD’s using importers, agents and/or local distributors
to sell its products abroad
As of the fiscal year ended 31 December 2014, the Group has income from international
sales of Carabao Dang amounting to Baht 2,090.6 million or 28.1 percent of the total sales revenue In
exporting its products to foreign countries, CBD must rely on importers, agents and/or local distributors
in each country where CBD operates business. CBD has no policies to enter into long-term agreements
with these importers, agents and/or local distributors, although CBD has extensive business relationship
with such importers, agents and/or local distributors. The conduct of business operation in this manner
is a general practice of the industry in which CBD operates its business.
Therefore, CBD cannot assure that all of its importers, agent and local distributors will continue
to maintain the business relationship with it in the future. In addition, CBD cannot yet assure that these
importers, agents and/or local distributors will distribute the products according to the targets set by CBD.
If several importers, agents and/ or local distributors decide to terminate their business relationship with
CBD or fail to meet the targets, CBD may be adversely affected by the delay in its negotiations and
agreements with other importers, agents and/ or local distributors, or there may be difficulties in operating
business or distributing products abroad. In addition, CBD cannot assure that the importers, agents and/or
27
local distributors will be able to fully comply with the local government rules and regulations applicable
to the operation of business abroad, and CBD may not be able to reach an agreement with new
importers, agents and/or local distributors within appropriate timing, or may not be able to find new
importers, agents and/or local distributors altogether. In such case, there could be a material adverse
effect on the Group’s businesses, business opportunities, operation results and financial condition.
3.2.6 Risks relating to marketing team and sales force of the Group
The marketing teams, especially CBD’s Bao Dang Girl team and sales force, face a number of
risks, including:
(1)inability to efficiently conduct advertisement, marketing and sales promotion activities to
maintain market share and increase awareness in the Company’s trademark and products;
(2)inability to efficiently implement marketing strategies to compete with other companies in
the industry; and
(3)inability to respond to the changing demands of customers in a timely manner.
The foregoing circumstances could materially and adversely affect the Group’s businesses, business
opportunities, operation results and financial condition.
3.2.7 Risk resulting from volatility of raw material prices and shortage of raw
materials
The main materials used in manufacturing the products are glass bottles and sugar which. CBD
procures these materials from local suppliers.
(1) Glass bottles
CBD uses glass bottles as the main raw materials for packaging CBD’s products. At present,
most of the glass bottle supply agreements made with suppliers have a term of one year. The number
of glass bottles and prices are agreed upon in advance. However, CBD cannot assure that these
bottle glass manufacturers will be able to supply glass bottles to CBD in the number required by the
agreements due to circumstances beyond the control of bottle glass manufacturers or CBD. Furthermore,
CBD cannot assure that if CBD wishes to renew these glass bottle supply agreements when they expire,
CBD wil be able to obtain the prices and commercial terms that are suitable for it. If the prices of
glass bottles are higher upon the renewal of these agreements, CBD cannot assure that it will be able
to pass on the increased cost to consumers, which could have a material adverse effect on the Group’s
businesses, operation results and financial condition.
In addition, although the amber glass factory of APG commenced its commercial operations
in August 2014, CBD cannot assure that APG will be able to procure and/or manufacture amber glass
bottles which are the main raw materials for packaging CBD’s products in an amount that is sufficient
for the manufacture of energy drinks, which could result in the CBD’s loss of business opportunity.
(2)
Sugar
This raw material is commodity product and its price is volatile depending on the market demand
and supply and the government policies. If there is any increase in the price of such raw material,
CBD cannot assure that it will be able to pass on the increase in costs to its consumers, which may
28
Annual Report 2014
create material adverse effect on the Group’s businesses, operation results and financial condition.
CBS uses 2 kinds of sugar for its products:
(a)Sugar for products sold domestically
The price of sugar used for products sold in Thailand is controlled by the Ministry
of Commerce. If the Ministry of Commerce changes its policy and increases the price
of sugar, there could be a material adverse effect on the Group’s businesses, operation
Furthermore, should the Government change sugar pricing policy or decide to
remove pricing restrictions in relation to sugar in the future to support the liberalization
of the ASEAN Economic Community (AEC), the price of sugar could be volatile and
this may affect the production cost for CBD.
(b)Sugar for exported products
The price of sugar used for manufacturing export products is subject to sugar
prices in global markets, which are, in turn, subject to the demand and supply of sugar.
The demand and supply of sugar are affected by weather condition which could
be favorable or unfavorable to cultivation in each country, government’s promotion,
intervention, export and import policies of the sugar industry, especially in developed
countries. In addition, sugar prices are also correlated with fuel prices, because cane
juice and molasses are used to produce ethanol for use in blending automotive fuel.
As a result, sugar prices in global market are highly volatile and this could possibly
have an impact on the production cost of CBD.
3.2.8 Risk arising from changes in government’s policies, rules and regulations
relating to the Group’s businesses
The business of producing, marketing and selling “Carabao Dang” of CBD is governed by
certain statutes and regulations of concerned agencies, i.e. Food Act B.E. 2522 (1979) (as amended)
and relevant notifications and rules of the Ministry of Public Health. These statutes impose restrictions on
advertisement and marketing of energy drink products, for example, restrictions on the advertisement of
product properties and sale promotion activities and the requirement of daily consumption limit warning
on labels. In addition, the business of producing energy drinks of CBD is subject to the requirements
of the laws and regulations relating to environments such as the Factory Act, B.E. 2535, the Act on
the Promotion and Preservation of Environment Quality, B.E. 2535. These restrictions and requirement are
significant factors which CBD must take into account when making decisions relating to its marketing and
sales promotion activities. Therefore, if the government authorities change the policies, rules or regulations
relating to energy drink business to be more stringent, there could be an impact on the marketing
activities and strategies of CBD. If CBD is unable to change these policies and strategies to comply with
the relevant rules and regulations, or incur increased burden in complying with the changed rules, there
could be a material adverse effect on the Group’s businesses, operation results and financial condition.
29
3.2.9 Risk relating to protection under intellectual property law
(1)
Trademark
CBD’s policy is to register and maintain trademarks over which it has proprietorship in the countries
where its products are sold. In this regard, CBD has sought protection for its trademarks under the
trademark protection law in Thailand and other countries. At present, CBD has more than 61 registered
trademarks in Thailand. However, due to lengthy process of trademark registration and renewal and
the registration is subject to discretion of concerned authorities in each relevant country, the Company
cannot assure that CBD will be able to submit an application to register or an application to renew its
trademarks to relevant authorities in all countries. Also, the Company cannot assure that any pending
trademark registration application or trademark renewal application, or any future trademark registration
application to be filed by CBD will be approved.
The Company cannot assure that the Group will obtain protection or commercial benefits in the
future in relation to the registration of trademarks, and the scopes of protection of registered trademarks
in different countries may vary. Furthermore, the trademark registration application or trademark renewal
application, and the registered trademarks may be opposed, invalidated or made subject to restrictions,
which may result in loss of business opportunity and material adverse impact on the Group’s businesses,
operation results and financial condition.
In addition, in countries where our products are sold, there could be other operators who use
parts of our registered trademarks without the right to do so, and such an unauthorised use of our
registered trademarks could be considered an infringement of the trademarks of the Group under the
applicable laws of such country. The Company cannot assure that the intellectual property law of such
country would provide it with appropriate protection for the intellectual property, which may result in
loss of business opportunity and material adverse impact on the Group’s businesses, operation results
and financial condition.
(2) Trade secrets
At present, the Group has developed know-how, technologies, self-compiled trade data, as well
as energy drink and electrolyte drink production formulas, all of which are significant trade secrets of
the Group that enable it to maintain competitiveness in business.
The Company cannot assure that these trade secrets will not be divulged to any third party or
that the Group will be adequately remedied for such divulge of trade secrets. Enforcement of claims
against its employees or other parties who unlawfully divulge or illegitimately exploit trade secrets is
complicated, costly and time-consuming. The outcomes of lawsuits are not predictable. The procedures
of Thai and foreign courts, including the jurisdiction of foreign courts could be unfavorable for the protection of rights in trade secrets.
If any trade secrets of the Group is lawfully acquired by any person or is developed by a
trade competitor, the Group cannot prohibit such competitor from using that technology or information in
competition with it. If any trade secrets of the Group is divulged or developed by a business competitor,
there could be material adverse impact on the competitiveness, operation results, financial condition
and business prospects of the Group.
30
Annual Report 2014
3.2.10 Risk in relation to CBD’s inability to register and renew registration
of its products in the countries where they are sold
To sell its products both domestically and internationally, CBD has to register such products with
the relevant regulatory authorities. If CBD is unable to register or renew registration of its products in
any country, CBD might be unable to sell its products in that country and there could be material
adverse impact on the competitiveness, operation results, financial condition and business opportunities
of the Group.
3.2.11 Risk from adjustment of excise tax
Energy drinks and electrolyte drinks are categorized as products which the Excise Department
collects excise taxes as they are non-blended beverages which contain no alcohol under the Excise Tax
Tariff Act B.E. 2527 (1984), whereby they are taxed at the ad valorem tax rate of 20% of ex-factory
selling price or the specific tax rate of 0.37 baht per 440 cubic centimeters (a fraction of 400 cubic
centimeters is counted as 440 cubic centimeters), whichever is higher. If the government has a policy
to adjust the excise tax rates and CBD cannot pass on the increased burden to consumers, there could
be a material adverse effect on the Group’s businesses, operation results and financial condition.
3.2.12 Risk relating to safe consumption of and confidence in the Group’s
products
(1) Risk from the production of products
CBD is exposed to certain risks in the production, packaging and sale of products. These risks
may arise from (1) products of inferior quality, (2) defective products, (3) contaminated products, or (4)
mislabeling or inadequate or incorrect product warning, thereby causing consumers to suffer damage
and exercise a claim against CBD for its liability and compensation therefore, or resulting in recall of
CBD’s products or suspension or stoppage of its operations by an order of the concerned regulatory
authority. As a result, there could be a material adverse effect on the Group’s businesses, operation
(2) Risk from consumption of products
Although CBD has provided warnings as prescribed in Notification of the Ministry of Public Health
(No. 194) B.E. 2543 (2000) re: Labels and Notification of the Ministry of Public Health (No. 182), B.E. 2541
(1998) re: Nutritional Labels including statements, for example, for Carabao Dang, “Do not drink more
than 2 bottles a day to avoid rapid heartbeat or sleeplessness”. “Children and pregnant women should
not consume.” If you have a medical condition, consult your doctor before use.” on product labels,
CBD remains exposed to risks relating to consumption of “Carabao Dang” energy drinks if the consumers
fail to comply with the warning on labels. This may cause the injured consumers to exercise a claim
against CBD, or CBD’s products may be recalled from the market or its operations may be suspended
or stopped by an order of the concerned authority. Such circumstance, if any, could material y and
adversely affect the Group’s businesses, operation results and financial condition.
In addition, if there is an allegation that CBD’s products are harmful, although such allegation is
31
not based on facts, CBD may suffer a decrease in consumers’ demand for the products under its
trademarks and a recall of these products. A recall of any products, irrespective of whether it is lawful,
could have material adverse impact of the Group’s reputation, businesses, operation results and financial
condition.
3.2.13 Risk arising from counterfeit and imitated products
Energy drink products currently sold in some retail markets may be manufactured without license
or lawful permission, and/or may be knowingly mislabeled and unlawfully misrepresent the ingredients
and/or name of producer. In general, these products are counterfeit products sold at lower prices than
genuine products due to their lower production cost. These counterfeit products are sometimes similar to
CBD’s “Carabao Dang” energy drinks, and may or may not contain the same chemical constituents as
“Carabao Dang” energy drinks. In this regard, the rules and regulations relating to counterfeit products
in the markets where CBD currently conducts its businesses may not be effectively implemented, thereby
making it impossible to absolutely eliminate the production and sale of counterfeit products. As a result,
any unlawful use of CBD’s trademark on counterfeit products may cause injury to consumers who
consume such counterfeit products, and may result in these consumers taking legal actions against the
Group for they misunderstand these counterfeit products as the Group’s products. In addition, the sales
of Carabao Dang, which is the real product of CBD, could be affected by such incidents and they
may also impair the Group’s reputation or cause it to be subject to a fine or the penalty. CBD may
also be subject to lawsuit in its capacity as a producer and there could be a material adverse effect
on the Group’s businesses, operation results and financial condition.
3.3 Risks Associated with APG
3.3.1 Risks relating to price volatility, shortage of raw materials, glass cullet
and natural gas
(1) Glass cullet
Glass cullet is the main material for manufacturing amber glass bottles. APG has entered into a
short-term agreement with a term of approximately one year to source glass cullet from cullet suppliers.
APG also plans to issue purchase orders for glass cullet to at least two or three cullet suppliers, in
accordance with a common market practice. However, APG cannot assure that the suppliers wil be
able to supply sufficient quantity of glass cullet and at reasonable price. Hence, APG may incur higher
production cost for the glass bottles as APG may have to adjust its production formula by using other
materials with higher cost than glass cullet such as increased use of glass sand and soda ash etc. This
may cause adverse material impact on the Group’s businesses, operation results and financial condition.
(2) Natural gas
Natural gas is an important raw material used in the production of amber glass bottles of APG.
APG has entered into a gas supply agreement with PTT Public Company Limited (“PTT”) for a term of
approximately five years. The price structure consists of (1) gas price which is variable according to
the price of fuel oils in Singapore, currency exchange rates of Baht per US dollars and estimated use
32
Annual Report 2014
of natural gas per day and (2) the demand charge which is a fixed cost, specified according to the
agreed quantity of natural gas and to be adjusted according to the actual use in every six months.
Therefore, there is a risk where the price of natural gas could increase according to the change
of the fuel oil price in Singapore, the USD-THB exchange rates volatility and the quantity of natural gas
used per day. The increase of natural gas prices may result in the higher cost for APG.
In addition, if PTT does not have sufficient amounts of natural gas, PTT may not be able to
supply the gas to APG in the agreed amount. This may result in insufficient gas for APG in the production
of amber glass bottles to meet the amount in the production plan, and APG may have to stop the
operation of the amber glass bottle manufacturing factory. Warming furnace after the cessation of
manufacturing in order to resume operations could incur high cost.
If the above risks materialize, there could be an adverse impact on the Group’s businesses,
operation results and financial condition.
3.3.2 Risk relating to efficiency and continuity of the APG’s manufacturing factory
in the production of amber glass bottle
APG’s amber glass bottle manufacturing factory has the glass bottle furnace with a maximum
production capacity of 310 tonnes of molten glass per day or a maximum production capacity of 650
mil ion amber glass bottles per year. However, the success of APG relies on the efficient production of
amber glass bottles on a 24-hour basis throughout the life cycle of glass bottle furnace. If APG is unable
to efficiently operate its amber glass bottle manufacturing factory on a continuing basis according to
the projected production plan during the initial stage, there could be a material adverse effect on the
Group’s business opportunities, businesses, operation results and financial condition.
3.3.3 Risk relating to loss of tax privileges granted by the Office of the Board
of Investment (“BOI”)
The business of manufacturing amber glass bottles benefits from tax privileges from the Board of
Investment (“BOI”), which is the authority in charge of promoting investment in Thailand for projects that
are beneficial to national economy, society and stability. The additional rights and privileges granted by
the BOI are subject to certain specific conditions.
If APG is unable to comply with all the terms and conditions prescribed by the BOI, it may
result in APG losing its tax privileges and other rights and benefits granted by the BOI. The loss of these
rights and privileges may cause material adverse impact on the Group’s businesses, operation results
3.4 Risks Associated with DCM
3.4.1 Risks from failure to achieve distribution to target markets
Currently, DCM manages distribution of the Group’s products through domestic distribution channels
via traditional trade and modern trade. If DCM fails to manage the agents’ networks and /or networks
of domestic distributors to ensure a full coverage of product distribution to consumers as planned, the
Group may lose business opportunities and this may cause material adverse impact on the Group’s
businesses, operation results, and financial condition.
33
3.5 Other risks
3.5.1 Risks from reliance upon personnel, especially key management
The Group’s operation of business requires the knowledge, expertise and experience of key
personnel, particularly of high-level management. If the Company is unable to retain such key management,
or cannot find a replacement that is equally qualified, this could materially and adversely affect the
Group’s businesses, In addition, operation results, and financial condition.
If any of the key personnel of the Group joins the Group’s competitors, or establishes a company
to compete with the Group, there could be an adverse impact on the Group’s businesses, operation
results, and financial condition.
3.5.2 Financial risks from fluctuation in exchange rates
CBD generates revenue from the sales of Carabao Dang in foreign countries. For the fiscal year
ended 31 December 2013 and 2014, export revenue made up of 22.6 percent and 28.1 percent of
the total sales revenue, respectively. Some of the exports are sales in US dollars currency, while almost
all raw materials are procured domestically which, at present, the Group does not use any financial
instruments to prevent such exchange rate fluctuation, posing risks from fluctuation in exchange rates
for CBD. If the exchange rate is volatile, CBD’s pricing and sales may be affected. If Thai Baht has
the tendency to appreciate, CBD’s export revenue, when converted to Baht, would decrease. This may
cause material adversely affect the businesses, operation results, and financial condition of the Group.
In addition, if in the future the Group has additional investment in foreign currency, the Group could
be exposed to the risk associated with such currency exchange rates.
3.5.3 Economic condition, politics, society, and policy of the government in
certain important markets, may significantly affect the Group’s businesses,
business opportunities, operation results, and financial condition
For the fiscal year ended 31 December 2013 and 2014, the Group’s export revenue made up
of 22.4 percent and 28.1 percent of the total sales revenue of the Group. Most export revenue comes
from developing countries that are the target of the Group, namely Myanmar, Vietnam, Cambodia,
Afghanistan and Yemen (“high-risk markets”). Therefore, the financial condition, operation results, and
growth of businesses of the Group will be significantly affected by developments in the economy, politics,
and law of each market. The risks from operating business in such markets that may significantly affect
the Group’s business operation can be summarized as follows:
(1) political instability with no definite conclusion, war, uprising, and conflict in some countries
and regions in which the Group operates or will operate business;
(2) under developed legal systems;
(3) economic uncertainty in foreign markets;
(4) inflation impacts;
(5) natural disasters;
34
Annual Report 2014
(6) inaccessibility to human resources in foreign countries;
(7) changes to the general law and regulations, such as control of the exchange rate and
difficulties in enforcing rights under agreements;
(8) restriction on investment in some countries;
(9) change in global trade policy, such as boycott and trade ban imposed by the US or other
countries; and
(10)registration of trademarks, protection under intellectual property law and associated disputes.
Despite changing of the high-risk markets’ from economies strictly controlled by their governments
to more market-oriented economies, most assets in the operation of business in these high-risk markets
are generally owned by the government. Governments of high-risk markets also control the growth of
the economy by way of resource allocation, control of settlement in foreign currency, financial policy,
and privileges granted to some types of business or company.
Recently, the government of each high-risk market country has implemented measures of different
levels to benefit from market mechanisms in order to reform the economy, reduce the ownership of
the government in property used in business operations, and create good corporate governance. These
economic reform measures may be changed, adjusted, or implemented to different extents in each
type of business, or in different regions of the country. Therefore, some of these measures may benefit
the economy as a whole, but may adversely affect the businesses of the Group.
Generally, there are uncertainties in legal system of high-risk market countries. This could result
in limited legal protection for the Group, particularly the protection for the trademarks and business of
the Group (including counterfeit products). The Group may face difficulties in taking legal actions and
enforcing court judgments against any breach of contracts or any breach of laws, or against those
who infringe the Group’s trademarks and licenses.
3.5.4 Risks from failure to fully comply with the conditions of licenses
The operation of the Group’s businesses is governed by various government agencies. Such
agencies have the authority to supervise the compliance with license conditions, and to prescribe the
Group to comply with industrial standards and to ensure that its personnel, having responsibility related to
licenses, is qualified according to the qualifications specified by the agency. The employees’ qualifications
might include maintenance of necessary machinery and equipment, implementation of quality control
systems, supervision of work, marketing activities, recording and storage of accurate information, and
submission of accurate information to relevant agencies upon request. These tasks may incur expenses,
and the Group may require time in order to make implementations to comply with such conditions. As
a result, the Group’s operation of business may suffer delay. Furthermore, there are other factors that
may affect the consideration of relevant agencies regarding compliance with rules concerning licenses,
and with the conditions of the licenses, and such consideration may lead to suspension or cancellation
of the licenses, and may result in the liability of the Group under criminal law, civil law, or administration
law.
If the Group fails to fully comply with the conditions of licenses or terms or orders of the relevant
government agencies, there could be material adverse effect on the Group’s businesses, operation results,
35
3.5.5 Risks relating to strikes or the formation of trade union
Labour strikes of our employees or other work stoppages could affect the Group’s business
operations and operation results. If the employees of the Group and/or its subsidiaries strike or organise
a work stoppage, or if the Company and/or its subsidiaries cannot negotiate an end to such a work
stoppage, the Group could experience a disruption of operations and increased operation costs as a
result of higher wages or benefits paid to union members, which could have a material adverse impact
on the Group’s businesses, operation results, and financial condition.
In addition, although none of our employees are currently members of any labour union and
we are not a party to any collective bargaining agreements, this may change in the future. If the
Company’s employees join labour unions and it is not able to successfully negotiate union contracts
with favourable terms, or if the Group experiences any interruption of operations or labour difficulties at
any of our production facilities, there could be a material adverse impact on the Group’s businesses,
operation results, and financial condition.
3.5.6 Risk from insufficient coverage under the Group’s insurance
Although it is the Group’s policy to take up insurance related to the operation of the Group’s
businesses, in order to reduce risks arising from loss of and/or damage to the Group’s core assets,
and the Company still faces risks arising from the policies not covering all consequential loss and/or
damage such as damage from wars and terrorist acts, or if the value of the damage is higher than
the sum insured. The Group also risks the insurance company’s inability to pay the claim specified in
the insurance policy. Moreover, The Group may face the risk from its inability to renew the insurance
policy at a reasonable price if the price of the insurance policy increases. These risks may affect the
operation results and financial condition of the Group.
3.5.7 Risks from interruption of the Group’s business operation
The Group uses its factories and warehouses for producing, marketing, and distributing energy
drinks and other beverages. In the events of natural disasters such as storms, fires, earthquakes, or other
serious events not expected by the Company, such as a disruption to the electrical system, shortage
of water supply, terrorist acts, and wars, such events may significantly affect the ability of the Group to
produce products and operate the business, which may create material adverse impact on the business,
operation results, and financial condition of the Group.
3.5.8 Risks from transportation disruption
The Group’s business operation relies on transport of raw materials from the source of the raw
materials to the factories or warehouses of the Group, and transport of goods from the factories or
warehouses to customers by way of land and water transport. If the Group is unable to use these
regular transportation channels due to natural disasters, weather conditions, or other events such as
protests and accidents, and the Group cannot resolve the problem in a timely manner, this may cause
material adverse effect on the Group’s businesses, operation results, and financial condition.
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Annual Report 2014
3.5.9 Risks from accidents
The production process and the operation of factories of the Group are at some risks from
mistakes or accidents that may cause damage to the production unit and may interrupt or delay
production, thus causing a significant negative impact on the businesses, operation results, and financial
condition of the Group. Moreover, accidents may cause damage to buildings or structures nearby, which
may lead to expenses in compensating for damage sustained by other businesses and the surrounding
community.
3.5.10 Risks from the vote control of major shareholders in the general meeting of shareholders
Following the initial public offering of shares by the Company, Mr. Sathien Setthasit Group, Miss
Nutchamai Thanombooncharoen Group and Mr. Yuenyong Opakul Group will hold approximately 34.3
percent, 26.6 percent, and 14.2 percent of total issued shares of the Company, respectively.
In addition, Mr. Sathien Setthasit and Miss Nutchamai Thanombooncharoen will hold the positions
of management and authorised directors of the Company. These two major shareholders have the
control over the management of the Company and can jointly control voting at the general meeting
of shareholders in almost all matters such as the appointment of directors, or matters which require
majority votes from shareholders. Furthermore, the shareholding percentage of Mr. Sathien Setthasit Group
or Miss Nutchamai Thanombooncharoen Group will be sufficient to constitute a veto against important
matters which, pursuant to the law or the Company’s Articles of Association, which requires at least
three-fourths approval from shareholders who are present and are entitled to vote at the general
meeting of shareholders.
37
Nature of Business Operation
Business Operation of Each Product Line
Research and Development
38
Annual Report 2014
4.Nature of Business Operation
The Group operates a fully integrated complete business cycle of manufacturing, marketing, selling
and managing the distribution of energy drinks and other beverages. The Group’s energy drinks are
under the “Carabao Dang” trademark and the slogan “Carabao Dang creating value for life”. The
Group’s business can be summarized by the following diagram:
Domestic
Sale
CBD
2. Business of
manufacturing
and supplying
glass bottles
1. Business of
manufacturing
marketing and
distribution of
energy drinks
and other
beverages
(Modren Trade)
Retail Shop
(Traditional Trade)
DCM
3. Business
of managing
distribution
APG
(Modern Trade)
Agent
Sub-Agent
Sub-Sub-Agent
Marketing Support
International
Sale
Importers/Agents/Local
Distributors abroad
Shop abroad
The Group’s business can be categorized into three sub-businesses as follows:
(1)Business of manufacturing, marketing, and selling energy drinks and other
beverages
Carabao Tawandang Co., Ltd., or CBD, which is a subsidiary of the Company, manufactures, markets and sells energy drinks under the “Carabao Dang” trademark, electrolyte drinks under “Start Plus”
trademark and other beverages which the Group plans to manufacture and sell in the future.
CBD produces two types of Carabao Dang: (1) a 150 ml glass bottle, and (2) a 250 ml aluminum
can. The maximum production capacity of CBD for energy drinks is 1,080 million bottles per year and
350 mil ion cans per year. The Group mainly sells bottled Carabao Dang domestically and only sells
canned Carabao Dang internationally. Currently, Start Plus only comes in 250 ml bottles with a maximum
production capacity of 120 million bottles per year. Start Plus is only sold domestically.
For domestic sales of Carabao Dang and Start Plus, CBD sells the products to DCM, which is a
subsidiary of the Company. DCM sells CBD’s products to 1) agents, for sales to traditional trade, and
2) modern trade. For international sales of Carabao Dang, CBD sells its product to importers, agents, or
local distributors to import, sell, and distribute such products to shops in foreign countries.
39
(2)Business of manufacturing and procuring glass bottles
Asia Pacific Glass Co., Ltd. or APG, which is a subsidiary of the Company, manufactures and
procures glass bottles for the manufacturing of energy drinks and other beverage of the Group. APG
procures glass bottles from third party suppliers, and owns an amber glass bottle manufacturing plant
with a furnace maximum production capacity of 310 tonnes of molten glass per day which commenced
the commercial operation in August 2014. APG will be capable of producing a maximum of 650 mil ion
amber glass bottles per year to partially replace the glass bottles that are purchased from third parties.
The total cost of such investment is around Baht 1,600 million. At present, APG sells all bottles procured
and /or manufactured to CBD.
(3) Business of managing distribution
Tawandang DCM Co., Ltd. or DCM, which is a subsidiary of the Company, manages distribution of
the Company’s products to domestic sales channels via traditional and modern trade. At present, DCM
has a sales team of more than 160 salespersons. As at 31 Demcember 2014, DCM manages distribution
for the Group only. However, when business opportunities arise, DCM is prepared to manage distribution
for third parties. The business structure of DCM can be summarized as follows:
(a) Traditional Trade
DCM manages, facilitates, contacts, and accepts purchase orders from a network of agents who
deal with traditional trade, and orders products from CBD for delivery such products to agents
and distributing the Group’s products to traditional trade.
(b) Modern Trade
DCM manages, facilitates and directly contacts modern trade such as convenience stores,
supermarkets and hypermarkets, to sell the Group’s products, and accepts purchase orders from
modern trade. The sales team will order products from CBD and will process with the delivery of
such products to the distribution center or warehouse for modern trade.
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Annual Report 2014
5.Business Operation of Each Product Line
5.1 Products or Services
At present, the Group manufactures, markets, sells, and manages the distribution of two types
of products, namely: (1) energy drink under the “Carabao Dang” trademark, and (2) electrolyte drinks
under the “Start Plus” trademark.
5.1.1 Bottled Carabao Dang
Bottled Carabao Dang, a non-carbonated energy drink, is sold in
a 150 ml bottles at the general retail shops price of Baht 10 in Thailand.
The Group mainly sells bottled Carabao Dang domestically. In addition,
the Group also exports bottled Carabao Dang to overseas markets where
bottled energy drinks are popular among consumers.
Bottled Carabao Dang is the first energy drink in Thailand to
conduct its marketing efforts by displaying vitamin B12 on the label,
which is one of marketing strategies in conducting product positioning
in order to differentiate bottled Carabao Dang. The Company believes
that such strategy has led to the success of bottled Carabao Dang in
Thailand.
5.1.2 Canned Carabao Dang
Canned Carabao Dang, a non-carbonated energy drink, is sold
in 250 ml cans. The Group only sells canned Carabao Dang abroad. The
ratio of main ingredients in canned Carabao Dang sold in each country
may differ slightly depending on the behavior and preference of the
consumers as well as the applicable legal regulations in each country.
The Group currently sells canned Carabao Dang in foreign countries such
as Cambodia, Afghanistan, Yemen, Myanmar, Vietnam and a number of
other countries globally.
5.1.3 Start Plus
Start Plus, an electrolyte drinks, is sold in 250 ml glass bottles at
a general retail shops price in Thailand of Baht 10. The Group started
marketing, and selling Start Plus in Thailand in May 2014. The Group
differentiates Start Plus from its competitors by including zinc as its key
ingredients.
41
5.2 Marketing and Competition
5.2.1 Target Customer
Carabao Dang and Start Plus have different characteristics, purposes, tastes, ingredients and
benefits. The target customer for these two products can be summarized as follows:
Product
Characteristics of Target Customer
• For the domestic market, the Group’s target customers is the
Carabao Dang
working population across all occupational groups who are in need
of energy and refreshment during working and are mainly in the
low to moderate income bracket.
• For the international market, the Group’s target customer is different
in each country in which the Group conducts its business.
• At present, the majority of the income from Carabao Dang is
derived from domestic sales. However, the Group plans to increase
the income derived from international sales as well
Start Plus
• The Group’s target customers range from teenagers to middle-aged
persons who look after themselves and need to rejuvenate for their
work and outdoor activities, including compensating their perspiration
loss from exercise.
• At present, the target customers of Start Plus is only domestic
consumers.
5.2.2Marketing Policy and Sales Promotion
For the domestic market, the Group conducts marketing activities, through a variety of media
channels, with the target customer with the objective of creating consumption needs of the Group’s
products. The Group typically budgets for a marketing activities of approximately 10 percent of total
annual sales. The Group’s marketing operation focuses on above-the-line marketing (marketing through
media channels with a wider consumer coverage area) and below-the-line marketing (marketing that
reaches the target customer in a specific area). Details are as follows:
5.2.2.1 Above-the-line marketing (Marketing through media channels with a wider consumer coverage area)
Above-the-line marketing comprises advertising through
a variety of media channels with a wider consumer coverage
area such as television, printed media, commercial billboards,
and other media channels. The Group presents the Carabao
Dang trademark along with the image of the Group’s
presenter and brand ambassador, namely Mr. Yuenyong
Opakul or Aed Carabao. Aed Carabao is the lead singer
of Carabao music band which the Company believes to be
a band that is well-known throughout neighboring countries.
Sample of the media advertising of the Group with Mr.
Yuenyong Opakul as the presenter and brand ambassador
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Annual Report 2014
5.2.2.2 Below-the-line marketing (Marketing that reaches the target customer in a specific area)
Below-the-line marketing consists of marketing activities that directly engages consumers, such
as giving product samples to the consumers to test, circulating leaflets and arranging on-site product
exhibitions for public relation purposes.
The Group conducts marketing field activities through the Bao Dang Girls Team which has
strong familiarity, knowledge, expertise, and relationships with various levels of Agents, retail shops, and
consumers in each area. The objectives of the Bao Dang Girls Team’s marketing activities are to directly
promote the Group’s products to its target customer as well as to reach the group of customers who
have not yet consumed the Group’s products. As at 31 December 2014, The Bao Dang Girls Team has
more than 500 members or more than 70 teams, covering most of the important marketing areas over
Thailand. The Company believes that the Bao Dang Girls Team is the largest marketing team for energy
drinks in Thailand. Moreover, as the Group develops the Bao Dang Girls Team by itself, the team wil
gain knowledge of, and confidence in, the products of the Group and further strengthen their loyalty
towards the Group.
Example of marketing activities of the Group to reach specific group of consumers
For international marketing, the Group selects agents which have expertise and experience in
selling consumer goods in foreign countries as well as having the ability to distribute products nationally
within those selected countries in order to sell the Group’s products. In this regard, the marketing strategy
and sales promotion activities will be adjusted depending on its appropriateness in each selected country.
The Group and agents, focus on conducting above-the-line marketing activities (marketing through
media channels with a wider consumer coverage area) to create demand for the Group’s products. In
the past, the Group jointly marketed in Cambodia with the local distributor by adopting similar marketing
activities used in Thailand. Such activities included supporting boxing competitions, organizing concert tours
for the Carabao music band, together with providing the Group’s product samples for consumers to
test. Moreover, the Carabao concerts are also broadcasted on television for the purposes of advertising
the Group’s products and indirectly creating brand awareness for the Carabao Dang trademark and
Carabao music band.
43
5.2.3Distribution Channels
The Group has channels for distributing its products domestically and internationally as follows:
Traditional Trade Channel
Tier 1 Agent
The
Group
Tier 2 Agent
Tier 3 Agent
Retail Shop
Customer
Modern Trade Channel
Modern Stores such as Convenient Stores,
Supermarkets and Hypermarkets
Domestic
International
Importers / Distributors / International Dealers
Customer
5.2.3.1 Domestic Market
The Group sells its products domestically through two distributing channels which are traditional
trade and modern trade. • Traditional Trade: the Group focuses on the product distribution to cover target areas all over Thailand.
Therefore, the Group distributes products through network of agents managed by the Group.
The Group will select Agent in each province and select efficient Tier 2 Agent and Tier 3 Agent
to be parts of network of the Group’s product distribution. Structure of network of the Group’s product
distribution can be summarized as follows:
- The Group will select efficient Agent in each province;
- The Group and Agent will together select efficient Tier 2 Agent to distribute products
in a district level;
- The Group and Tier 2 Agent will together select efficient Tier 3 Agent to distribute
products in each target area and thoroughly distribute the products to retail shops at sub-district level;
- Sales teams and Bao Dang Girls Team conduct marketing activities to introduce the
products to retail shops.
For the distribution through traditional trade, the Group will sell the products to the Agent
without a buy back policy. In addition, the Group has a policy where the Agent has to make advance
payment before the delivery of the products to the Agent.
Modern Trade: at present, the Group sells its products to modern trade such as
convenience stores, supermarkets, and hypermarkets directly.
For the distribution through modern trade, the Group will sell the products to the
modern trade without a buy back policy. In addition, the Group has a policy to grant a credit term
of approximately 30-60 days to such modern trade.
•
5.2.3.2 International Market
The Group distributes its products internationally through trading partners which are importers,
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Annual Report 2014
agents or local distributors in other countries to distribute the products to consumers in countries which
are primary market. In this regard, the Group has a policy to have only one trading partner if such
partner has a capability to distribute the Group’s products. For other countries which are not the primary
market, the Group will consider selling the products to multiple importers, agents or local distributors as
appropriate for the conduct of business in such countries. In this regard, the Group has appointed an
international sale team to be specifically responsible for managing and creating good relationships with
overseas trading partners.
For the distribution overseas, the Group will sell the products to importers, agents or overseas
distributors without a buy back policy. In addition, the Group has a policy where the importers, agents
or overseas distributors have to make advance payment before the delivery of the products.
5.3 Overview of the drinks market in Thailand
5.3.1 Overview of the non-alcohol drinks market in Thailand
The soft drinks market consists of bottled water, carbonates, concentrates, juice, RTD coffee, RTD
tea as well as sports and energy drinks. The details of each kind of soft drinks could be summarized
to the following: : carbonated, flavored, functional and still bottled water
Bottled water
: cola (original and low calorie) and non-cola carbonates (lemonade,
Carbonates
mixers, orange and others)
: liquid concentrates and powder concentrates
Concentrates
: 100% juices, cereal/pulse-based drinks, fruit flavored drinks, juice drinks
Juice
(up to 24% juice) and nectars drinks (25 – 99% juice)
RTD Coffees
: still RTD teas and carbonated RTD teas
RTD Teas
Sports and Energy drinks : energy drinks and sports drinks
5.3.2 Overview of the energy drinks market and competitive landscape
According to Nielsen’s evaluation, the energy drinks market in Thailand has grown at a CAGR of
5.4% between 2011 and 2014
The Group believes that the consumer of energy drinks in Thailand has characteristics. They are
mainly the lower to middle income population. They prefer energy drinks which are non-carbonated and
sweeter than energy drinks consumed in other countries. Furthermore, considering on Thai’s consumption
behavior, Thai prefers consuming bottled energy drinks than canned energy drinks. Therefore, the Group
believes that these unique characteristics of Thai consumers make it more difficult for international
companies to compete in Thailand. Such market characteristics are reflected in the market’s competitive
landscape of the energy drinks market in Thailand which the majority market share is belong to Thai
companies (according to Nielsen’s data).
According to Nielsen, sports and energy drinks are distributed via two major distribution channels.
For the Energy drinks market, the traditional trade represents the largest route to market, with 77% of
the total sales in 2014. The remainder is distributed through the modern trade,
45
Although the Group just entered into the business of production, marketing and sale of energy
drinks in 2002, which is a short time compared to its competitors, the Group’s trademark has strong
brand awareness among consumers across Thailand. According to a trademark study by Nielsen, Carabao
Dang trademark enjoys the second strongest brand recognition for energy drinks in Thailand. The Group’s
trademark is associated with leadership, social responsibility and modern image. The typical consumers
of Carabao Dang are working adults between 26 and 45 years of age.
The energy drinks market in Thailand has highly competitive market. Thus, effective marketing
activities and advertisement campaigns have become an important tool to gain the loyalty of consumers,
spur sales volumes and capture market share. Generally, the entrepreneurs use marketing activities and
advertisements which are sales promotion activities and marketing campaigns carried out through both
channels which could access to broad consumers (Above the Line) and channels which could access
to specific consumer target (Below the Line).
5.4 Procurement of Product or Service
5.4.1Manufacturing Factory and Production Capacity
(a) Manufacturing Factory
The Group has two manufacturing factories, (a) a Carabao Dang and Start Plus manufacturing
and packaging factory; and (b) an amber glass bottle manufacturing factory. Details of these two
factories are as follows:
• Carabao Dang and Start Plus manufacturing and packaging factory
At present, CBD is the manager and operator of the Carabao Dang and Start Plus manufacturing
and packaging factory located at 261-263 Moo 2, Panwithee Road, Bang Priang, Bangbo, Samut Prakan.
The manufacturing lines of the factory are as follows: (1) nine production lines for bottled Carabao
Dang consisting of eight normal production lines and one express production line (Krones), which is the
leading packaging technology from Germany, with a maximum production capacity of 1,080 mil ion
bottles per year; (2) two production lines for Start Plus, with a maximum production capacity of 120
mil ion bottles per year; and (3) three production lines for canned Carabao Dang, with a maximum
production capacity of 350 million cans per year. • Amber glass bottle manufacturing factory:
In August 2014, APG commenced its commercial operation of its amber glass bottle manufacturing
factory located at 88, 88/1 Moo 2, Pimpavas-Sanpudas Road, Pimpa Sub-District, Banpakong District,
Chachoengsao Province. The factory manufactures 150 ml bottles to be used as containers for bottled
Carabao Dang.
APG’s factory has a furnace with a maximum molten glass production capacity of 310
tonnes of molten glass per day. The Group expects that APG will be able to manufacture amber glass
bottles, which wil be used as containers for bottled Carabao Dang, with maximum production capacity
of 650 mil ion bottles per year.
(b) Production Capacity
The maximum production capacity and the actual production for the Carabao Dang manufacturing
and packaging factory for the fiscal years ended 31 December 2011, 2012, 2013 and 2014 is as follows:
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Annual Report 2014
Bottled Carabao Dang
Maximum production capacity1
(mil ion bottles per year)
Actual production (million bottles per year)
Percentage of use of capacity2 (percent)
Fiscal years ended 31 December
2011
2012
2013
2014
730.0
730.0
850.0
1,080.0
488.6
66.9
593.4
81.3
753.8
88.7
743.3
68.8
Remarks1. The maximum production capacity is calculated based on the maximum production capacity of machinery
for 20.5 hours per day and 300 days per year less an estimated typical loss from production.
2. The percentage of use of capacity is calculated based on the ratio of actual production to the production
capacity.
Canned Carabao Dang
Maximum production capacity1
(mil ion cans per year)
Actual production (million cans per year)
Percentage of use of capacity2 (percent)
Fiscal years ended 31 December
2011
2012
2013
2014
205.0
205.0
350.0
350.0
116.9
57.0
138.7
67.6
183.4
52.4
252.9
72.3
Remarks 1. The maximum production capacity is calculated based on the maximum production capacity of
machinery for 20.5 hours per day and 300 days per year less an estimated typical loss from production.
2. The percentage of use of capacity is calculated based on the ratio of actual production to the
production capacity.
Moreover, the Group also manufactures Start Plus with a maximum production capacity of 120
mil ion bottles per year. The Group started the production of Start Plus in March 2014.
5.4.2 Raw Material Procurement
The Group’s policy is to procure its main raw materials from at least two to three suppliers, as
the Group prefers not to rely too heavily on one particular supplier and to increase bargaining power
for the Group. The Group plans to purchase raw materials in accordance with the annual sale and
production plan. The central procurement department has a duty to contact raw material suppliers in
order to purchase raw materials for production. Generally, the Group enters into short-term agreements
with the suppliers with a term of approximately 12 months. The Group visits each supplier on a yearly
basis in order to inspect the major raw material suppliers’ production process and to ensure the raw
materials received meet the Group’s quality standards.
Raw materials used for the production of Carabao Dang and Start Plus
The main raw materials used in manufacturing Carabao Dang and Start Plus are: (1) white
refined sugar, (2) glass bottles, (3) cans and lids, and (4) other raw materials, as follows:
(a)White refined sugar White refined sugar is the main ingredient for manufacturing Carabao Dang and Start Plus.
47
The Group prepares an annual purchase plan for white refined sugar based on the annual
production plan and enters into short-term agreements for a term of approximately one year.
The agreement specifies the amount purchased and the initial price in Thai Baht. The price may
change if the authority increases or reduces the price of sugar. The Group has longstanding
and good relationships with sugar suppliers and has not experienced a shortage of such raw
material in the past.
(b) Glass bottles
Glass bottles are the main raw materials used for containing the Company’s beverages,
including its 150 ml amber glass bottles for bottled Carabao Dang and its 250 ml clear glass
bottles for Start Plus. The Group prepares an annual purchase plan for glass bottles based on
the annual production plan. The glass bottles are purchased from three domestic suppliers under
short-term agreements, each with a term of one year, which specifies the amount purchased
and the fixed price in Thai Baht. At present, APG procures glass bottles for CBD. APG’s amber
glass bottle manufacturing factory commenced its commercial operation in August 2014.
APG’s amber glass bottle manufacturing factory was established for mainly containing
Carabao Dang. Therefore, the preparation of purchase plan of raw materials and production of
glass bottles of APG is in accordance with the annual production plan of CBD. APG’s production
department purchases raw materials through the central procurement department to contact and
order raw materials from raw materials suppliers. The central procurement department’s procures
raw materials from various suppliers. APG reserves the main raw materials for production for a
period of seven to ten days as per the size of the warehouse. Such reserved raw materials are
sufficient to ensure the continued operation of the manufacture of amber glass bottles.
The main raw materials used for manufacturing glass bottles are (1) glass cullet, (2) glass
sand, (3) soda ash, (4) natural gas and (5) other raw materials, as follows:
• Glass cullet
Glass cullet is the main raw material for manufacturing amber glass bottles, Normally, the
Group purchases glass cullet from local cullet sorting plant, which gather used glass packages,
and then ground them to cullet, remove contaminants, and deliver the cullet to glass bottle
manufacturers. APG purchases glass cullet from glass cullet suppliers by entering into short-term
agreements with a term of one year
• Glass sand
Glass sand is the second main raw material for manufacturing glass bottles after glass
cullet, After being melted, glass sand turns into the main structure of glass. APG purchases most
of its glass sand from glass sand suppliers in Rayong, by using purchase orders which stipulate
purchase price and order quantity in advance for a period of approximately six months.
• Soda ash
Soda ash is the main raw material for manufacturing amber glass bottles, amounting. It
is used to reduce the temperature in the glass melting process. Soda ash is mostly found in
Kenya and China. APG purchases soda ash from various importers using purchase order which
is in line with normal market practice.
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Annual Report 2014
• Natural gas
Natural gas is the main fuel used for manufacturing APG’s amber glass. APG has entered
into a natural gas supply agreement with PTT Public Company Limited (“PTT”) for a period of
five years • Other raw materials
Other raw materials in the manufacture of an amber glass bottles include limestone, feldspar,
sodium sulfate, charcoal powder, selenium, rust, and other raw materials. Generally, APG purchases
these raw materials from local suppliers. The procurement department has a policy to purchase
each raw material from two to three suppliers in order to avoid relying too heavily on one
particular supplier and to increase bargaining power in terms of the price and quality of the
raw materials.
The proportion of raw materials for manufacturing amber glass bottles may be adjusted and
one material may replace another as appropriate, depending on the ability to procure each
type of raw material at a particular time.
(c) Cans and lids
Cans and lids are main raw materials used in packaging of 250 ml canned Carabao Dang.
The costs of cans and lids amount to approximately 55.0 - 60.0 percent of the production cost
of Carabao Dang. The Group prepares an annual purchase plan for cans and lids based on
the annual production plan. It purchases the cans from two to three suppliers using purchase
orders specifying a fixed price and the number of cans for one year in advance.
(d) Other raw materials
Other raw materials used for manufacture of Carabao Dang include taurine, caffeine,
inositol, nicotinamide, dexpanthenol, vitamin B6, and vitamin B12. Other raw materials used for
manufacture of Start Plus include sodium chloride, potassium chloride, and zinc gluconate. The
Group generally prepares an annual raw material purchase plan with their raw material suppliers
based on the annual production plan in order to determine the tentative quantity of raw materials
required for the year. After the production department prepares a monthly production plan, the
procurement department purchases raw materials on a monthly basis. Other raw materials are
purchased from raw material suppliers using purchase orders which specify a fixed price and
quantity.
5.4.3Production Process
The Group’s production process can be summarized as follows.
(a) Carabao Dang Production Process
CBD manufacturing Carabao Dang with the production process presented in the following diagram:
49
Step 1
Preparing raw materials
Step 2
Mixing and Boiling
Step 3
Preparing for packaging
Step 4
Packaging in bottles or cans
Step 5
Packing
Each production step can be summarized as follows.
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Annual Report 2014
Step 1: Preparing raw materials
CBD prepares the raw materials obtained from suppliers which have
passed quality inspection conducted by CBD. The main raw materials
for the production of Carabao Dang consist of taurine, caffeine, inositol,
nicotinamide, dexpanthenol, vitamin B6 and vitamin B12. The raw materials
are premixed and packed into sets ready for mixing and boiling.
Step 2: Mixing and boiling
Staff in mixing room prepares the syrup by boiling water with
white refined sugar, using water which has passed the reverse osmosis
process at 100 degrees Celsius. The syrup is then left alone for sterilization.
The water is then added to reduce the temperature of the syrup. The
premixed sets prepared in step 1 are then added to the syrup and
mixed well. The quality inspection department performs random quality
tests by examining the taste and quality of the energy drink in the lab.
After ensuring that the quality meets the standard specified by CBD, the
drink is then filtered by a high-performance filter to remove residue and
sediment. The energy drink is then bottled or canned in the next step.
Step 3: Preparing for packaging
CBD washes bottles or cans for containing Carabao Dang using
a washing machine with 80 degree Celsius water. The washing machine
turns and tilts the bottles or cans for thorough cleaning and to pour
rinsed water out of bottles or cans. The bottles and cans are then used
as containers for Carabao Dang.
Step 4: Packaging in bottles or cans CBD fills the cleaned bottles or cans from step 3 with the Carabao
Dang from step 2. The filled bottles or cans are inspected to ensure
correct weight, volume, and pressure for cans, and the bottles or cans
are then closed with lids.
Step 5: Packing
CBD packs bottled and canned Carabao Dang in two steps: (1)
wrapping with plastic film, and (2) packing in cardboard boxes, as follows:
(1) Carabao Dang is wrapped with plastic film into packs, with
10 bottles per pack and 6 cans per pack. The packs are then inspected
by a machine to ensure the correct number of cans or bottles per pack.
If it is incorrect, the bottles or cans are reentered into the system for
plastic wrapping.
(2) Bottled and canned Carabao Dang which has been wrapped
in plastic film is sent to the cardboard box packing machine. One box
contains five packs of bottled Carabao Dang or 50 bottles, or four packs
of canned Carabao Dang, or 24 cans.
Quality Management
CBD manages and controls the quality of each production step in accordance with good
manufacturing practice (GMP) certified by the Thai Food and Drug Administration. CBD has obtained
certification for its production process and quality control in accordance with the standards of quality
management system as follows:
1. HACCP (Hazard Analysis and Critical Control Point): This certification, given by the Thai Industrial
Standards Institute and the Thai Food and Drug Administration, is used as a quality management system in
terms of safety, ensuring a food production process which is free of risks from microorganisms, chemicals
and contaminants.
2. Halal: This certification, given by the Central Islamic Council of Thailand, is to certify that the
production process complies with Islamic principles.
3. ISO 22000:2005 (E): This certification, given by Bureau Veritas Certification (Thailand) Limited,
is a food safety management certification which meets international standards.
(b) Start Plus Production Process
The production process of Start Plus is similar to that for Carabao Dang, consisting of preparing
raw materials, mixing/boiling, preparing for packaging, packaging in bottles, and packing. However, the
51
packaging process of Start Plus is longer, as the volume of Start Plus is 250 ml per bottle compared
to the volume of Carabao Dang of 150 ml per bottle.
(c) Glass Bottle Production Process
The glass bottle production process is a continuous process. It continues 24 hours a day throughout
the year. The production process is presented in the following diagram:
STEP 1
Preparing raw materials
STEP 2
Mixing raw materials
STEP 3
Melting
STEP 4
Forming
STEP 5
Annealing
STEP 6
Inspecting quality
STEP 7
Packing
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Annual Report 2014
Each production step can be summarized as follows.
Step 1: Preparing raw materials
Upon delivery at the amber glass bottle manufacturing factory, the raw material trucks must
be weighed to ensure that the amount of raw materials is consistent with the purchase order. APG
randomly selects raw materials and sends to quality inspection department for analyzing the quality
of the raw materials. Raw materials that meet the quality standards specified by APG will be stored
separately by type at the warehouse.
Step 2: Mixing raw materials
Raw materials including glass sand, soda ash, limestone, feldspar, and other raw materials are
transported to the silo in the raw material mixing factory for weighing in accordance with the formula
specified using the computer system. The raw materials are then transported to the mixer in order to
mix all raw materials together. The mixed raw materials and glass cullet are sent to another silo which
is prepared for a melting process.
Step 3: Melting
The mixed raw materials in step 2 are then fed into the glass melting furnace with a temperature
of 1,600 degrees Celsius. The raw materials melt into molten glass containing air bubbles. The molten
glass is then transported to the glass chamber and transparent glass tray to adjust the temperature and
allow bubbles to rise out of the molten glass, which takes about 10 hours.
Step 4: Forming
Molten glass is transported to a production line and cut into pieces called “gobs” in accordance
with the size, shape, and weight needed. Then, each gob is put into mold no. 1 to form the opening,
body and bottom of a bottle. Then a blower is used to blow air into the bottle to create space
inside. The bottles are then sent to mold no. 2 in order to blow air into the bottle again to achieve
the desired thickness and shape
Step 5: Annealing
Glass bottles are transported to the annealer to cool down or as known as releasing stress in
the glass bottles. The annealer reduces the temperature of the glass bottles from 565 degrees Celsius
to about 50 degrees Celsius over a period of approximately one hour. Then, the cooled glass bottles
are transported on the conveyor and sprayed with coating to strengthen and smoothen the surface,
increased lubricity for reducing friction and ensuring the bottles are abrasion resistance to prevent
scratches when transporting the bottles on the conveyors.
Step 6: Inspecting quality
Quality inspection steps can be classified into two types as follows:
(1) Quality inspection by machine: The bottles are fed through the Side Wall Inspection
machine to detect any defect in the side wall, including stones, bubbles, and cracks. Then, the bottles
are transported to a Finish Inspection machine to detect any defects at the opening, including size of
the opening, smoothness of the opening, crack at the opening, screw threads, bottle neck, etc.
53
(2) Visual quality inspection: APG’s team randomly inspects the glass bottles on the conveyor
by shining a light on the bottles to check for bubbles, defects in shape, scratches, cracks, etc.
APG has a quality assurance department which is responsible for inspecting the physical properties of
the glass bottles on a random basis such as thickness, size, weight, stress, and resistance to impact,
pressure, chemicals, sudden change in temperature, etc.
Step 7: Packing
Glass bottles which have passed the quality inspection are transported on the conveyors to be
packed in palletizers in accordance with the quantity specified. Employees will separate each level of
bottles with paper trays. Then, the forklift truck will move the pallet to the conveyor and the pallet wil
be wrapped in plastic for cleanliness and prevention of cracks. The pallets are then lined up in the
warehouse to await delivery to customers.
5.4.4 Environmental Impact
The production of CBD’s beverages and APG’s amber glass bottles are governed by laws, rules
and regulations relating to environment, which are applicable at the national, provincial and district
levels. laws, rules and regulations relating to the environment which are applicable to manufacturers
of beverages and amber glass bottles include provisions relating to the control of air emissions, water
pollutions, prevention and treatment of waste water and gas emissions, including management and
disposal of hazard substances and wastes. However, the volume of air emissions, waste water and other
wastes from the manufacture of CBD’s beverages and APG’s amber glass bottles are complied with
prescribed standards and is in accordance with all applicable laws, rules and regulations relating to
environment.
The Company believes that to date CBD and APG have complied with all laws, rules and
regulations relating to environment that are applicable to manufacturing factories of CBD and APG at
the national, provincial and district level.
CBD and APG have never had any legal actions against them in connection with non-compliance
with environmental law (both in the past and at present). However, the Company cannot anticipate
whether the Group would be impacted by any unpredictable environmental events, or by any new
or amendment to laws, rules and regulations which could have an impact on the Group or on the
manufacturing factories of CBD and APG in the future.
5.5 Work in Progress
- None -
5.6 Regulations governing the business operation
(1) Food Act, B.E. 2552 (as amended) (the “Food Act”)
Under the Food Act, “food” is defined to include edible items or those which sustain life
consumed by human beings by way of eating, drinking, keeping in one’s mouth or taking into body
by any means or in any forms. The Office of Food and Drug Administration is responsible for ensuring
compliance with the Food Act.
The Food Act provides the Recommended Daily Intake (RDI) which comprises intake level of
vitamin, minerals and/or other nutrients recommended for each day. In addition, the order of the Food
and Drug Administration No. 185/2534 re: amendment to ingredients for caffeinated energy drinks requires
54
Annual Report 2014
that caffeinated beverages distributed in Thailand can contain no more than 50 mg of caffeine per
unit.
Currently, main regulations that are applicable to the Group’s products are as follows: (a)Licensing, manufacturing and using of labels Under the Food Act, food business operators must be licensed to produce food. In
obtaining such license, the food manufacturer is required to submit a construction plan for the
manufacturing factory for approval from the Food and Drug Administration. Then, the Food
and Drug Administration will inspect the manufacturing factory. Licenses will be approved if
the manufacturing factory is in compliance with the criteria set out by the Food and Drug
Administration. The license requires renewal every three years.
In addition, certain products may be subject to the requirements regarding nutrition labeling.
The Ministry of Public Health also requires food manufacturers, as stipulated in its rules, to comply
with the GMP standards.
The Group has been in compliance with the above regulations and requirements and has
received a GMP certificate which represents that the equipment and devices used in the Group’s
manufacture are in compliance with the Ministry of Public Health’s practice. Such practice sets
out general requirements for food hygiene.
(b)Registration and Types of Food
There are four types of food registration in Thailand:
• Type 1: Specific Controlled Food
Specific controlled foods are food items required to be registered. Manufacture of specific
controlled food must be in accordance with the requirements regarding food quality standards,
food packaging and labeling, including other requirements relating to good manufacturing
practice.
• Type 2: Quality/Standard Controlled Food
Quality/Standard controlled foods are food items which the quality and labels must be
in accordance with the requirements regarding quality standards. However, this type of food is
not required to have a food registration. Generally, this type of food is manufactured locally
by small-sized industry or cottage industry.
• Type 3: Food Requiring Labels
Foods requiring labels include food items which present a low risk of harm to the health
of consumers. Rules and regulations that are applicable to this type of food focus on the use
of labels for food to avoid misunderstanding or deception (such as food irradiation, chewing
gum, sweet, bread and soft drinks in sealed containers)
• Type 4: General Food
General foods are food items that cannot be categorized into the above types. This type
of food may include raw food, cooked food, processed food or unprocessed food. This type
of food does not require registration. However, the manufacture of general food is controlled
and inspected to ensure hygiene, safety, use of labels and advertisements.
Carabao Dang and Start Plus are categorized as Quality/ Standard Controlled Food
(Type 2) under the Food Act. Therefore, the export, manufacture and marketing of the Group’s
products must be in compliance with the requirements under the Food Act.
55
(c)Inspection
The Office of Food and Drug Administration frequently inspects factories and places where
food items are manufactured, and takes samples of food for laboratory inspection. Any breach
of the requirements under the Food Act may result in legal actions against manufacturers or
recall of products.
(d)Use of Labels and Advertisements
In Thailand, in addition to the control on the application for licensing and manufacturing,
there are regulations regarding the use of labels on products. Any products having the following
characteristics must be labeled according to certain standards of label relating to nutrition: (1)
food items with a nutritional claim; (2) food items that are promoted based on the nutritional
value; (3) food items that are promoted based on specific group of consumers; or (4) other
food items pursuant to the notification of the Office of Food and Drug Administration by
approval from the Food Commission. The use of labels must also be in accordance with other
relevant laws and notifications.
Notification of the Office of Food and Drug Administration regarding the advertisement of
caffeinated beverages provides the following criteria and conditions:
(1)Advertisements that induce consumption or make claim about properties of caffeinated
beverages are prohibited. Only advertisements to promote corporate image are permitted.
(2)The following manners of advertisements are considered to induce consumption or make
claim about properties of caffeinated beverage, either directly or indirectly:
(a.) Advertisements that promote an attitude that caffeinated beverages will give
energy that makes one become energetic, tireless, not sleepy, staying awake at all
time or successful in social life or sexual life;
(b.) Advertisements that use athletes or laborers as a presenter;
(c.) Advertisements that use movie stars, singers or actors with the age of below 18
years as a presenter. The status of a movie star, a singer or an actor is considered
as of the date of first broadcast;
(d.) Advertisements that induce or convince consumers to buy or to consume and
the proceeds from the sale will be used for charity.
(3)The following warnings must be shown in advertising caffeinated beverages through media
in which images of products are displayed:
(a.) “Do not drink more than two bottles per day. Children and pregnant women
should not drink”;
(b.) Presentation of warning:
• For radio broadcast, the warning should be pronounced clearly in each
syllable. The length of such warning should not less than three seconds;
• For warnings in letters, the warning must be displayed for at least five
seconds using white letters. The font must not be smaller than 1/25 of the height
of monitor and must be displayed in a dark frame which shows clear contrast
with the background color. The size of the frame must be 1/10 of the height
of monitor. The fonts must be easy to read and clear. The warnings must be
placed on either top or bottom of the advertisement area.
• For warnings in published materials or outdoor media, the warning must
be in fonts in white color. The height of the letters must not be less than 1/25
56
Annual Report 2014
of the height of the advertisement area. The letters must be in font that is
easy to read and clear and must be placed on either top or bottom of the
advertisement area.
Electrolyte drinks are also subject to the requirements under the Notification of the Ministry of
Public Health regarding the electrolyte drinks which provide details relating to the use of labels or other
relevant criteria.
In addition to the compliance with the Food Act, B.E. 2552, advertisements of food are subject
to other relevant laws such as the Consumer Protection Act, B.E. 2522, and the Radio and Television
Broadcast, B.E. 2498.
(2) Excise Act, B.E. 2527 (as amended) (the “Excise Act”) and the Excise Tariff Act, B.E. 2527
(as amended) (the “Excise Tariff Act”)
The Excise Tariff Act provides that energy drinks and electrolyte drinks are products for which
manufacturers are required to pay excise tax to the Excise Department according to value or quantity
of the products as per the attachment to the Excise Tariff Act i.e. 20 percent of selling price at the
factory or Baht 0.37 per 440 cm3. Such rates may be subject to change according to the rate prescribed
by relevant agency. Under the Excise Act, manufacturers are required to pay excise tax at the time
of bringing the products out of the factory or the warehouse which is located outside of the factory
and is approved by the Director-General of the Excise Department to store products without having to
pay tax (“Bonded Warehouse”). However, the export of products which are subject to excise tax or
the import of such products into an excise free zone will be eligible for excise exemption, refund or
reduction in accordance with criteria, method and conditions prescribed under the ministerial regulations.
In addition, manufacturers must register with the Excise Department and display the excise
registration certificate at a conspicuous place in factories or Bonded Warehouses in accordance with
the method prescribed under the Excise Act.
(3) Investment Promotion Act, B.E. 2520 (the “Investment Promotion Act”)
The objective of the Investment Promotion Act is to provide tax and other economic incentives
for both Thai and foreign companies to promote investment in Thailand.
The Investment Promotion Act is implemented by the Board of Investment. Generally, the Board
of Investment provides support and grants BOI certificates to projects that stimulate Thai economy (or
other areas that are specified), projects that create job opportunities, reduce environmental impacts and
improve Thailand’s infrastructure. The Board of Investment also has the authority to approve financial
incentives and other benefits in various forms. Details of benefits and promoted period, granted by the
Board of Investment for projects, will be indicated in the BOI certificate.
APG was granted a BOI certificate No. 2326(4)/2556, dated 24 September 2013 to promote glass
bottles manufacturing business. Details of important benefits approved for APG under the BOI certificate
are as follows:
(1) Exemption from import duties for machines;
(2) Exemption from corporate income tax for net profits derived from the promoted project for
a period of six years from the date on which there is an income from the business;
(3) Exemption from including dividend received from business that is exempted from corporate
income tax pursuant to section 31 in the calculation of income tax throughout the period which APG
is exempted from corporate income tax.
57
APG is required to comply with the following conditions to preserve its benefits under the BOI
certificate:
(1) To prepare accounts on income and expense for the promoted project. Such accounts
must be separated from other parts of APG’s business which may or may not be promoted.
The objective of this separate account is for the calculation of net profit that will be exempted
from corporate income tax;
(2) To increase its registered capital by at least Baht 350 million which must be no less
than Baht 450 million when determined together with current capital. The capital must be fully
paid-up prior to the date of commencement of business;
(3) To comply with the significant conditions of promoted project as follows:
• Type of product: glass bottles;
• Size of business: annual production capacity of approximately 113,150 tonnes (or
approximately 808,215,000 bottles) (calculation based on 24 hours/ day and 365 days/
year which is the maximum production capacity according to the BOI certificate. The
actual maximum production capacity may differ from the information on such BOI
certificate)
(4) To submit an application to request for rights and benefits of corporate income tax
exemption, and report operating results which are audited by certified public auditor to the
Office of the Board of Investment for its approval within 120 days from the end of each
accounting period in order to obtain rights and benefits of corporate income tax exemption
for such particular accounting period.
(5) To incur expenses in supporting the development of technology and personnel approved
by the Board of Investment. The expenses must not be less than three percent of total sales
in the first three years, or shall not be less than Baht 450 million, whichever is lower.
(6) To obtain ISO 9000 or ISO 14000 certifications, or such other equivalent international
standards within two years from the commencement of operation. If such standards cannot be
obtained within the specified time, rights and tax benefits of corporate income tax exemption
wil be revoked for one year.
5.7 Competitive Strengths
5.7.1 Strong brand recognition and consumer perception arising from the
Group’s association with Thailand’s legendary for-life-music band “Carabao”
The Group’s Carabao Dang trademark is associated with one of most successful “for-life-music”
bands of all time in Thailand, “Carabao”, which the Company believes to be popular across the neighboring
countries. The lead singer of the band, Mr. Yuenyong Opakul, also known as “Aed Carabao”, co-founded
the Group in 2001 to manufacture, market and distribute an energy drink by using the band’s name
and logo and integrated with the trademark. As a result, the Group’s trademark is connected with the
Carabao band. Carabao band’s image fits the Group’s product as its image appeals to working class,
which is the Group’s target customer. The Group believes that the sustainable success of the Group
not only lies in consumers’ fondness of Carabao band, but also the brand positioning that fits with the
target customer’s way of life. The Group determines the position and image of Carabao trademark
including the marketing activities with the target consumers under the concept of being an energy drink
58
Annual Report 2014
that creates the value for life. The Group continually takes parts in social activities including;
(a) “Dontree Sang Khunka Cheewit” campaign which supports teenagers in displaying their
musical talents. This campaign is in the form of a music competition that provides a stage for teenagers,
students, college students, and music-lovers to showcase their musical talents and team work. Moreover,
the campaign also helps building the Group’s brand awareness. As at 31 Deccember 2014, the Group
has conducted this campaign for five years; and
(b)“Tambon Khong Noo” campaign which awards sponsorships to primary school students
winning the essay competition as well as providing funding to the winner’s sub-district to support nature
and environmental preservation activities;
The “Carabao” for-life-music band was formed in 1981 by Mr. Yuenyong Opakul and two other
band members. The Carabao, which blends rock, country and folk song styles in creating their music, is
an important page in Thailand’s for-life-music history. Carabao’s songs generally reflect social and political
issues, demand for social justice, and the Thai way of life. Carabao band widely succeeds and has
been popular among Thai nationals due to the meaning and content of its songs which are easy to
reach. In addition, Carabao band’s songs are unique, didactic and reflective of Thai society. Thus, the
Carabao band has received mass popularity from people of all gender and age not specific neither
to any particular group nor only to for-life-music listeners. Carabao band is considered to be Thailand’s
“legend of for-life-music” with producing over 28 albums. The band’s fifth album, “Made in Thailand”, is
one of Thailand’s most sold album of all time, selling approximately 5 million records. In addition to their
music, movies and TV-series about the Carabao band have been produced. Moreover, Mr. Yuenyong
Opakul was awarded Thailand’s prestigious National Artist award for modern Thai music in 2013.
5.7.2 A leading energy drinks manufacturer in Thailand with a broad regional
footprint
Since the launch of Carabao Dang in 2002, the Group’s business has grown to become one
of the leading energy drink manufacturers in Thailand. As at 31 December Carabao Dang was the
second largest energy drink in market share in Thailand. According to Nielsen’s research, Carabao Dang
has achieved continual market share growth commanding 15.9 percent, 17.5 percent, 21.1 percent and
21.5 percent in 2011, 2012, 2013 and 2014, respectively, of the energy drinks market.
In addition to its success in Thailand, the Group exports its products to more than 20 countries
worldwide. The Group actively seeks to increase its market share and to penetrate new markets continually.
For the financial years ended 31 December, 2011, 2012, and 2013, and 2014, overseas sales contributed
23.9 percent, 23.7 percent, 22.6 percent and 28.1 percent, respectively, of the Group’s total sales.
5.7.3 Leader in innovative marketing for trademark and product
Marketing is an important strategy of the Group. The Group believes that their effective and
innovative marketing strategies differentiate the Group’s product from its competitors and has significantly
contributed to the continuous growth of the Group’s business and market share. The Group believes
that their significant marketing innovation includes;
(a)Being Thailand’s only fast moving consumer goods company to employ its own marketing
operation team, specifically, the Bao Dang Girls Team with over 500 members or more than 70 teams
initiating more than 400,000 activities per year nationwide to create products demand and full coverage
product distribution;
59
(b)Differentiated product positioning by positioning the energy drink product from the competitors’
same priced products, the Group adds vitamin B12 into Carabao Dang. The Group focuses on
communicating the additional of vitamin B12 in Carabao Dang. This communication aims to publicize
to consumers and distribution channels in order to raise awareness among consumers and to urge
consumers to try Carabao Dang;
(c)Differentiating the electrolyte drink product from the competitors’ same priced products
by adding Zinc into Start Plus. The Group communicates the importance of zinc, which is lost with
perspiration, to the consumers.
The Group’s marketing campaign to launch Carabao Dang in 2003 won a gold and silver
medal at Media & Marketing Magazine Asian Brand Marketing Effectiveness Awards and Popular Vote
prize from the Marketing Association of Thailand for the marketing through television channel of the
Group in order to launch Carabao Dang in 2002.
Going forward, the Group emphasizes the importance of investment in the development of
innovative marketing campaigns to further develop its energy drink market leading position.
5.7.4 Vertically integrated business model which shall cause the cost
synergies, raw material supply stability and quality control capability
The Group is the manufacturer and engages in marketing and sale of energy drinks and other
beverages which shall constitute the complete business. The Group is capable of producing glass bottles,
energy drinks and electrolyte drinks, and managing the distribution of products domestically by its own
personnel. The Group believes that this provides the Group with a competitive edge as it will enable the
Group to better control costs structure, the manufacturing process, and product quality to meet the needs
of consumers. Moreover, the Group’s capabilities to produce its own glass bottles will help the Group
to improve the risk management from the fluctuation of glass bottle supply, and decrease the Group’s
dependence on third party glass bottle manufacturers. Additionally, DCM, which was established in 2012,
plays an important part in the Group’s distribution strategy in completely managing the distribution of
products that shall facilitate the Group to gain in-depth access to traditional trade distribution channels.
The success of the Group’s strategy has been proven by market share growth and distribution channel
penetration.
Nielsen reported an increasing trend in the distribution of Carabao Dang from 79 percent in
February 2013 to 84 percent in March 2014. While during the same period, major competitors reported
little change in their distribution. Since the start of DCM’s operation in October 2012, the Group’s
market share grew from 17.5 percent in 2012 to 21.5 percent in 2014 With the capability to manage
the distribution of products by itself, the Group gains access to the target customers and distribution
channels more efficiently. The Group believes that the aforesaid capability will support the Group to
become flexible in operating the business and enhance its competitiveness including market penetration,
market development and/or new product development in the future.
5.7.5 State-of-the-art production facility supportive of domestic and regional
business expansion
In March 2014, the Group installed an express bottling line (Krones) which is a new advanced
technology from Germany. The Krones has maximum production capacity up to 350 million bottles per
year. The investment in the new bottling line will support the business expansion of Carabao Dang in
60
Annual Report 2014
Thailand. As at 31 December 2014, the Group operated 14 production lines consisting of 9 Carabao
Dang bottling lines, 3 Carabao Dang canning lines and 2 Start Plus bottling lines which operates 24 hours
a day, 6 days a week with a total production capacity of 1,200 million bottles per year (an energy
drink production capacity of 1,080 million bottles per year and electrolyte drink production capacity of
120 mil ion bottles per year) and 350 million cans per year.
5.7.6 Experienced management team and determination to succeed in business
The Group is managed by a team of highly experienced and competent food and beverage
industry veterans with more than 20 years of experience. The well-established experience offers the
Group’s management team an in-depth understanding of the food and beverage industry and the
energy drinks market.
The management team has been a significant part in developing, operating and managing
the organization to be more efficient in order to drive sustainable growth of the business. Under the
management of the management team, the Group has rapidly enhanced its domestic growth and
market share position. The Group believes that the management team has experience and operational
results which prove that they could support the Group to further efficiently develop their domestic and
regional competitive position.
5.7.7 Consistent revenue and profit growth
For the financial years ended 31 December 2011, 2012, 2013 and 2014, the Group had total
revenue of Baht 4,309.2. million, Baht 5,008.7 million, Baht 6,929.4 million, and Baht 7,597.6 million,
respectively, increasing Baht 699.5 million or 16.2 percent in 2012 and soaring Baht 1,920.7 million or 38.3
percent in 2013 and continued its healthy increase of Baht 645.2 million or 9.3 compared to the same
period of 2014.
For the financial years ended 31 December 2011, 2012, 2013 and 2014, the Group had net profit
of Baht 204.5 million, Baht 187.8 million, Baht 626.4 million, and Baht 1,011.7 million respectively, equivalent
to net profit margin of 4.7 percent, 3.7 percent, 9.0 percent, and 13.6 percent, respectively. Although
the Group’s net profit margin decreased for the financial year ended 31 December 2012 due to the
depreciation increased from investing in the new production line and marketing expenses from managing
distribution by itself instead of using third parties distributors, net profit margin materially increased for
the financial year ended 31 December 2013 and 2014. The increased net profit highlights the success
of the Group’s vertically integrated business model, management’s ability and capable personnel.
61
6.Research and Development
The Group perpetually conducts research and development in its products with focus on the research
and development of new types of products to respond to the consumers’ demands in target markets.
The Group also recognizes the importance of expanding production lines for existing products to ensure
diversification of products. The major part of the research and development expenses was spent on the
research on markets for energy drinks and electrolyte drinks. In this regard, the Group emphasizes on the
use of the permanent employees, especially those in the marketing team, the marketing operation team,
sales team, and manufacturing team, to work collaboratively in the research and development of the
Group’s products. Based on the aforementioned fact, the expense for the research and development
of the Group was not relatively high. For the financial years ended 31 December 2011, 2012, 2013 and
2014 the Group’s expenses for the research and development amounted to Baht 1.0 million, Baht 1.1
mil ion, Baht 1.7 million, and Bath 3.3 million, respectively.
Research and development of the Group’s products can be described as follows:
Market Research
Step 1
Study information from
the Group’s
marketing team
Step 2
Study industry
information from
external sources
Identify business opportunities
Step 3
Devise marketing strategy
Step 4
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Annual Report 2014
Develop a product
Launch products
and evaluate
Step 1: Market Research
The marketing team, the marketing operation team and the sales team of the Group conduct
market research to identify business opportunities by:
(1) Studying information, provided by the Group’s marketing team, in relation to products which
present business opportunities and by analyzing consumer demand and behaviors in order to assess
market conditions.
(2) Studying industry information on market conditions from external sources using information in
relation to market conditions from research reports of reliable external institutions to assess competitions
and analyze tendencies of consumer behaviors
Step 2: Identify business opportunities
Following the market research, the Group’s marketing team, marketing operation team and the sales
team wil work together to identify business opportunities such as the potential target consumers, and
product, which the Group anticipates that it could respond to the demand of such target consumers.
Step 3: Devise marketing strategies and develop products
The Group devises its marketing strategies, pricing strategies, sales promotion plans and distribution
promotion plans through distribution channels along with product development to prepare for the launch
of new products to target market.
Step 4: Launch new products
Following the devising marketing strategies and product development phase, the Group launches new
products to the market and evaluates the sales of such products. The Group sets a clear timeframe
for such evaluation.
The Group analyzes responses from target consumers and assesses sales of such products which are
launched via distribution channels. If the Group finds that the response for such products does not meet
the Group’s estimation, the Executive Committee of the Company may delay or suspend the sale of
such new products and continue with the development of new products.
63
Assets Used in Business Operation
64
Annual Report 2014
7. Assets Used in Business Operation
7.1 Fixed assets used in business operation
Net Book Value as
Type/Description of Asset
of 31 December
2014 (Million Baht)
1. Land and land improvement
2,648.8
2. Building and building
improvements
3. Machinery and equipment
4. Furniture, fixtures and office
equipment
5. Vehicles
6. Assets under construction and
installation
Total
Type of
Ownership
Encumbrance
Owner
Please see the details in
7.1.1
7.1.2
7.1.3
None
657.9
Owner
1,325.6
Owner
32.8
Owner
74.9
13.8
Owner
Owner
None
7.1.6
4,753.8
Fixed assets of the Company and its subsidiaries which are shown above can be categorized
by type of assets and companies as follows:
7.1.1 Land
Location and Area
Owner (Rai-Ngan-Square
Wah)
CBD
Land in Silom area
Silom Sub-district,
Bangrak District,
Bangkok
(total of 6 plots)
area: 5-2-33.5
Purpose of
Possession
Site of head
office building
of the Group,
and seeking
of commercial
benefits
Net Book
Value
as of 31
Type of December
Encumbrance
Ownership
2014
(Million
Baht)
Owner
2,154.9 The land and building thereon, as
specified in 7.1.2,
are mortgaged as
security with financial
institutions, for the
mortgage value of
Baht 2 billion.
65
and Area
Owner (RaiLocation
-Ngan-Square Wah)
CBD
Land in Bangbo area
Bangpriang Sub-district,
Bangbo District, Samut
Prakan Province
(total of 84 plots)
CBD
area: 23-0-63
Land in Cha-am area
Purpose of
Possession
Net Book
Value
as of 31
Type of December
Ownership
2014
(Million
Baht)
Encumbrance
Site of
manufacturing
factory for energy
drinks and other
beverages
Owner
116.2 The land and building
thereon, as specified
in 7.1.2, 42 plots are
mortgaged as security
with financial institutions,
for the mortgage value
of Baht 471.0 mil ion.
Guesthouse
Owner
16.5 None.
Site of
manufacturing
factory for amber
glass bottles
Owner
361.2 The land is mortgaged
as security with financial
institutions for the
mortgage value of Baht
1,631.1 mil ion
(only the 15 plots are
mortgaged. The other
plot with the area of
10-1-50 is free from any
encumbrances.)
Cha-am Sub-district,
Cha-am District, Petchburi
Province
(total of 1 plot)
APG
area: 0-2-59.4
Land in Bangpakong
area
Bangsamak Pimpa
Sub-district, Bangpakong
District, Chachoengsao
Province
(total of 15 plots)
area: 119-1-30 /
(total of 1 plot)
area: 10-1-50
Total
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Annual Report 2014
2,648.8
7.1.2Buildings and Building Improvements
Type of
Ownership
Owner
Description and Area Purpose of Possession
CBD
Head office and
commercial building
Silom Sub-district,
Bangrak District,
Bangkok
Head office building
of the Group, which
is also used as a
commercial building
Owner
CBD
Factory
Manufacturing factory
for energy drinks
Bangpriang Sub-district, and other beverages
Bangbo District, Samut
Prakan Province
Owner
CBD
Guesthouse
Cha-am Sub-district,
Cha-am District,
Petchburi Province
Factory
Owner
APG
7.1.3
Guesthouse
Manufacturing factory
for ember glass
manufacturing
Total
Machinery and Equipment Purpose of
Possession
Owner
407.1 None.
657.9
Type of
Ownership
Owner
Asset
CBD
Machinery and
Equipment
Production
Owner
APG
Machinery and
Equipment
Production
Owner
Total
Net Book
Value as of
31 December
Encumbrance
2014 (Million
Baht)
71.4 The building and the
land, on which it is
situated, as specified in
7.1.1, are mortgaged
as security with
financial institutions, for
the mortgage value of
Baht 2 billion.
173.0 The factory and the
land, on which it is
situated, as specified in
7.1.1, are mortgaged
as security with
financial institutions, for
the mortgage value of
Baht 471.0 million.
6.4 None.
Net Book
Value as of
31 December
Encumbrance
2014
(Million Baht)
454.9 The parts of
production
machinery are
mortgaged
as security with financial institutions, for the
mortgage value of
Baht 100.0 million.
870.7 None
1,325.6
67
7.1.4
Furniture, fixtures and office equipment
Owner
CBD
DCM
APG
Purpose of
Possession
Asset
Furniture, fixtures and Supporting business
office equipment
operation
office equipment
operation
office equipment
operation
Total
Type of
Ownership
Owner
Net Book
Value
as of 31
Encumbrance
December
2014
(Million
Baht)
26.6 None
Owner
2.3 None
Owner
3.9 None
32.8
7.1.5 Vehicles
Owner
CBD
Cars
CBD
Vehicles used in
factories
Cars
Vehicles used in
factories
DCM
APG
Purpose of
Possession
Asset
Employee and
executive cars
Factory vehicles
Owner
Owner
13.0 None
Employee cars
Factory vehicles
Owner
Owner
16.9 None
5.9 None
Total
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Annual Report 2014
Type of
Ownership
Net Book
Value
as of 31
Encumbrance
December
2014
(Million
Baht)
39.1 None
74.9
7.1.6
Assets under construction and installation
Owner
CBD
CBD
APG
APG
Purpose of
Possession
Asset
Office building
improvement
Head office building
of the Group, which
is also used as a
commercial building
Express production Bottling
line (Krones)
Factory building Installation site of
machinery and
equipment for
manufacturing amber
glass bottles
Machinery and Manufacturing amber
equipment
glass bottles
Total
Type of
Ownership
Owner
Net Book
Value
as of 31
Encumbrance
December
2014
(Million
Baht)
0.8 None
Owner
10.9 None
Owner
1.3 None
Owner
0.8 The assets are
mortgaged with
financial institutions
for the mortgage
value of Baht
1,631.1 million.
13.8
7.2 Intangible assets
Asset
1. Trademark
Purpose of Possession
As of 31 December 2014, 61 trademarks which have been registered
with the Ministry of Commerce are used for operating the business of
manufacturing, marketing and selling energy drinks and other beverages.
Furthermore, for the international sales of the Group’s products, the Group
has a policy to register and maintain trademark in foreign countries where
they distribute the products.
2. Computer programs The computer programs are used for general operations of the Group,
such as accounting system program, management reporting system
program, warehouse management accounting program, and general
operating system.
69
7.2.1Trademarks
In operating its business of manufacturing, marketing and selling energy drinks and other
beverages, as of 31 December 2014, the Group has proprietorship in 61 trademarks which are registered
with the Ministry of Commerce. The Group also has a policy to register and maintain trademarks in
foreign countries where they distribute the products.
CBD wil renew these trademarks when they expire, and will, as appropriate, register new
trademarks upon launching products under new brands.
7.3 Policy to invest in subsidiaries
As at 31 December 2014, the Company invests in its subsidiaries up to 100% as set out below.
Company
CBD
Investment Proportion (%)
100.0
DCM
100.0
APG
100.0
Nature of Business Operation
Manufacturing, marketing and selling energy
drinks and other beverages
Managing the distribution of the Company’s
products
Manufacturing and procuring glass bottles
The Company has a policy to invest in its subsidiaries or associated companies to support their
respective business operations, if such investment would be of joint benefit and profitable. Before deciding
to invest in any projects, the Company will take into account the size of its intended investment,
projected profit, possible risks and financial condition of the entity to be invested in. Such investment
decision must also be approved by its board of directors meeting or shareholders meeting (as the
case may be) of the Company. Furthermore, the Company will appoint its qualified and experienced
representatives to join the boards of directors of these subsidiaries or associated companies in order to
direct their significant policies and oversee the operations.
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Annual Report 2014
8. Future Plan
In addition to (1) the expansion of energy drink production capacity of CBD by installing an express
production line, Krones, which is an advanced technology from Germany and (2) the construction of
an amber glass bottle manufacturing factory of APG, the Group has a plan to invest in some future
projects such as installing another production line for canned Carabao Dang which will double the
capacity from 350 million cans to 700 million cans per year, and also modify the existing canning line
to be able to produce carbonated energy drink.
71
Information on the Securities and
Shareholders
72
Annual Report 2014
9. Information on the Securities and Shareholders
9.1Capital
As of 31 December 2014, The Registered capital and paid-up capital of the company is 1,000
mil ion baht. (Par baht 1). Total of shares are traded in Stock Exchange of Thailand
9.2Shareholder
follow;
No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
9.2.1 The shareholding and percentage of Top 10 of shareholder as of January 15, 2015 is as
Shareholders’ name
Sathientham Holding Co.,Ltd.
Ms. Nutchamai Thanombooncharoen
Mr. Yuenyong Opakul
Mr. Sathien Setthasit
Northend Investment Limited
Thai NVDR Co., Ltd.
Mrs. Linjong Opakul
Mrs. Wongdao Thanombooncharoen
Mr. Thaweerat Proongpattanasakul
Mr. Sirisak Sonsopol
Number of share
250,064,500
240,000,000
115,480,000
47,774,100
45,161,400
33,414,600
26,020,000
25,500,000
14,000,000
11,270,000
Shareholding
Percentage
25.01%
24.00%
11.55%
4.78%
4.52%
3.34%
2.60%
2.55%
1.40%
1.13%
9.2.2. The major shareholders who are significant for controlling the company are as follow;
9.2.2.1 The shareholding structure of Sathientham Holding Co., Ltd. is as follow: Mr. Sathien
Setthasit holds shares at 55.0 percent, Mrs. Dararat Setthasit holds shares at 15.0 percent,
Mr. Veeratham Setthasit holds shares at 10.0 percent, Mr. Romtham Setthasit holds shares at
10.0 percent, and Miss Tientham Setthasit holds shares at 10.0 percent of the total paid-up
capital of Sathientham Holding Co., Ltd.
9.2.2.2 A shareholder of Northend Investment Ltd. is Autumn Gold Capital Ltd. (incorporated
under the law of the British Virgin Islands). A shareholder of Autumn Gold Capital Ltd. is
Allshores Corporation Pte. Ltd. (incorporated under the law of Singapore), which operates
business of providing service of processing and liaising in order to incorporate companies
under various countries’ law with Mr. Sathien Setthasit as a beneficiary.
73
9.3 The Subsidiaries
At present, the shareholding structure of the Company’s subsidiaries could be summarized as
follows.
9.3.1CBD
Name of Major Shareholders
1. The Company
3. Mr. Veeratham Setthasit
Total
Number of Shares
2,999,990.0
5.0
5.0
3,000,000.0
Shareholding Percentage
99.9
0.0
0.0
100.0
Total
Number of Shares
999,980.0
10.0
10.0
1,000,000.0
99.9
0.0
0.0
100.0
Total
Number of Shares
4,499,980.0
10.0
10.0
4,500,000.0
99.9
0.0
0.0
100.0
9.3.2DCM
1. The Company
9.3.3
APG
1. The Company
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Annual Report 2014
9.4 Shareholders Agreement
- None. -
75
Dividend Policy
76
Annual Report 2014
10.Dividend Policy
10.1 Dividend Policy of the Company
The Company has a policy to pay dividends at the rate of not less than 40.0 percent of net
profit after income tax under the consolidated financial statements and the allotment of a legal reserve. The rate of dividend payment is subject to the investment plan, the conditions and restrictions
as specified in the loan agreements, or other relevant agreements (if any), the financial condition and
operating results as well as other relevant factors of the Company and its subsidiaries. The Board of
Directors may reconsider and amend the dividend policy from time to time to be consistent with the
Company’s and its subsidiaries’ future business growth plans, investment capital and working capital requirements, and other factors as considered appropriate. However, the dividend payment must not be
in excess of the retained earnings under the Company’s separate financial statements, and must be in
accordance with the relevant law.
The Company is a holding company and its main assets are investments in its subsidiaries.
Therefore, the Company’s ability to pay dividends is dependent upon the operating results of and dividend payment of its subsidiaries.
10.2 Dividend Policy of the Subsidiaries
The subsidiaries of the Company have a policy to pay dividend to shareholders at the rate of
not less than 40.0 percent of net profit after income tax under the separate financial statements of
the subsidiaries and the allotment of a legal reserve. The rate of dividend payment is subject to their
operating results, financial conditions, liquidity, investment requirements, additional investments, business
expansion, conditions and restrictions provided under loan agreements and other factors relating to their
management as their Board of Directors and/or shareholders may consider appropriate. The dividend
payment shall be in accordance with the Company’s policy. However, the dividend payment must not
be in excess of the retained earnings under the subsidiaries’ separate financial statements, and must
be in accordance with the relevant law.
77
Management Structure
78
Annual Report 2014
11.1.1 Organization Structure
11.1Management Structure of the Company
11.Management Structure
11.1.2
Board of Directors
Board of Directors of the Company
The Board of Directors of the Company comprises of 9 directors as follows:
Name
Position
1. Mr. Sathien Setthasit1
Chairman of the Board of Directors / Chairman of Executive
Committee / Chairman of Nomination and Remuneration
Committee
2. Miss Nutchamai
Thanombooncharoen1
Vice-Chairman of the Board of Directors / Vice-Chairman of
Executive Committee / Vice-Chairman of Risk Management
Committee / Member of Nomination and Remuneration
Committee
3. Mr. Yuenyong Opakul1
Director
Director / Member of Executive Committee / Member of Risk
Management Committee
Director / Chairman of Audit Committee / Chairman of Risk
Management Committee / Vice Chairman of Nomination and
Remuneration Committee / Independent Director
Director / Member of Audit Committee / Member of Nomination
and Remuneration Committee / Independent Director
7. Mr. Distorn Vajarodaya2
Director / Member of Audit Committee / Member of Nomination
and Remuneration Committee / Independent Director
8. Mr. Kanit Patsaman3
Director / Independent Director
9. Mr. Sanchai Jullamon3
Remark:
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Annual Report 2014
Miss Raewadee Rassameesangpetch acts as the secretary to the Board of Directors.
1 Mr. Sathien Setthasit, Miss Nutchamai Thanombooncharoen and Mr. Yuenyong Opakul were the Company’s
directors before the date of Extraordinary Meeting of Shareholders No. 1/2014 on 18 March 2014.
2 Mr. Distorn Vajarodaya was appointed by a resolution of Extraordinary Meeting of Shareholders No. 2/2014, held
on 30 June 2014, to hold the positions of director, independent director, Audit Committee member, and Nomination
and Remuneration Committee member in place of the director who resigned on 13 June 2014.
3 Mr. Kanit Patsaman and Mr. Sanchai Jullamon were appointed by resolution of the Extraordinary General Meeting
of Shareholders of the Company No. 3/2014 on 1 October 2014 to be Director and Independent Director.
(1) Authorized Director
The Company’s authorized directors to sign to bind the Company are Mr. Sathien Setthasit,
or Mr. Yuenyong Opakul, or Miss Nutchamai Thanombooncharoen, or Mr. Paiboon Kujareevanich. Any
two out of four of such authorized directors jointly sign with the Company’s seal affixed in order to
bind the Company, except for certification of documents or copies of documents, which shall require
the signature of any one of these four authorized directors with the Company’s seal affixed.
(2)
Board of Directors meetings
Number of Meetings Attended/
Total Number of Meetings
Name of Director
Remark
For the fiscal
year ended 31
December 20131
For the fiscal
year ended 31
December 2014
1/1
12/12
2. Miss Nutchamai
Thanombooncharoen
1/1
12/12
1/1
8/12
4. Mrs. Wongdao
Thanombooncharoen
-
8/8
Resigned from
directorship on
19 September 2014
5. Mr. Supote Teerawatanachai
-
8/8
Resigned from
directorship on
19 September 2014
-
10/10
-
10/10
-
10/10
9. Mr. Preecha Songwattana
-
2/3
Resigned
from directorship on
13 June 2014
-
5/6
Became a director on
30 June 2014
11. Mr. Kanit Patsaman
-
2/2
1 October 2014
-
2/2
1 October 2014
Remark: 1 The fiscal year ended 31 December 2013 is from the date of incorporation (28 August 2013) to 31 December 2013
81
11.1.3Executives
The Company’s organization structure, consists of 8 executives as follows:
Name
Position
Chief Executive Officer
Managing Director and
Acting Deputy Managing Director, Sales
Senior Deputy Managing Director, Marketing Operations
Deputy Managing Director, Marketing
Deputy Managing Director, Accounting and Finance
Deputy Managing Director, Production
8. Miss Suporn Samakkabutr
Director, Accounting
11.1.4
Company Secretary
Board of Directors Meeting No. 3/2014, held on 22 April 2014, approved the appointment of
Mr. Paiboon Kujareevanich as the Company secretary, in order to comply with section 89/15 of the
Securities and Exchange Act. 1. The duties and responsibilities of the Company secretary are as follows:
(1)to prepare and keep the following documents:
a) directors register;
(b) notices of Board of Directors meetings, minutes of Board of Directors meetings,
annual reports of the Company, and preparing supporting details and documents for
Board of Directors meetings; and
(c) notices of shareholders meetings, minutes of shareholders meeting, and preparing
supporting details and documents for shareholders meetings;
(2)to keep reports on the interests as reported by the directors and executives;
(3)to perform other acts as prescribed by the Capital Market Supervisory Board; and
(4)to send copies of reports on the interests under section 89/14, as prepared by the
directors and executives, to the chairman of the Board of Directors and the chairman of
the Audit Committee within 7 business days from the receipt thereof by the Company.
The Company Secretary must perform the aforementioned duties in a responsible, careful, and
honest manner, and comply with the laws, the Company’s objectives and Articles of Associations, and
the resolutions of the Board of Directors and shareholders meetings.
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Annual Report 2014
11.1.5
Remuneration of the directors and executives
(1) Remuneration of the directors
(a) Monetary remuneration
Refer to Board of Directors Meeting No. 5/2014, held on 12 June 2014, the Extraordinary
General Meeting of Shareholders No. 2/2014, held on 30 June 2014, the directors’ remuneration was
approved as follows:
• the directors’ remuneration not more than 5.0 Million Baht per year
• non-executive directors
- salary of chairman of the Board of Directors or chairman of committee
- Baht 45,000 per month;
- salary of director – Baht 30,000 per month;
- meeting allowance – Baht 20,000 per meeting (adjusted from Baht 10,000
per meeting since 12 June 2014)
• executive directors
- the Company has no policy to pay remuneration to directors who hold
executive positions.
For the fiscal year ended 31 December 2013, the Company had no director remuneration
expenses because three directors held executive positions.
For the Year 2014, the Company has director remuneration expenses as follows.
Name
Position
Total
1.Mrs. Saowanee Kamolbutr
Director / Chairman of Audit Committee / Chairman
of Risk Management Committee / Vice Chairman
of Nomination and Remuneration Committee /
Independent Director Committee/independent director
885,000
2.Mr. Boonnaris Suwannapool
Director / Member of Audit Committee / Member
680,000
3.Mr. Preecha Songwattana1
Director/ Member of Audit Committee / Member of
Nomination and Remuneration Committee /Independent
Director
170,000
4.Mr. Distorn Vajarodaya2
Director / Member of Audit Committee / Member
Independent Director member/independent director
350,000
5.Mr. Kanit Patsaman3
100,000
6.Mr. Sanchai Jullamon
100,000
Total
2,285,000
Remark:1 Mr. Preecha Songwattana resigned on 13 June 2013.
2 Mr. Distorn Vajarodaya was appointed by Extraordinary Meeting of Shareholders No. 2/2014, held on 30 June 2014, to
be a director, independent director, Audit Committee member, and Nomination and Remuneration Committee member
in place of the director who resigned on 13 June 2014.
3 Mr. Kanit Patsaman and Mr. Sanchai Jullamon were appointed by resolution of the Extraordinary General Meeting of
Shareholders of the Company No. 3/2014 on 1 October 2014 to be Director and Independent Director.
83
(b) Non-monetary remuneration
None.
(2) Remuneration of the executives
(a) Monetary remuneration
Type of Remuneration
For the fiscal year ended
31 December 2013
No. of
Executives
Value
(Baht)
No. of
Executives
Value
(Baht)
Salary and bonus
6
73,230,000
8
115,750,883
Provident fund and social
security contributions
6
603,000
8
2,441,200
Total
(b) Non-monetary remuneration
None.
84
31 December 2014
Annual Report 2014
73,833,000
118,192,033
(1)CBD
11.2.1 Organization Structure of the Subsidiaries
11.2Management Structures of the Subsidiaries
(2)APG
(3)DCM
11.2.2 Board of Directors of the Subsidiaries
(1) Boards of Directors of CBD, APG, and DCM
As of 31 December 2014, the Boards of Directors of the three subsidiaries, viz. CBD, APG and
DCM, consist of 5 directors as follows:
Name
Position
Director
Director
Director
(2) Authorized director of the subsidiaries
The authorized directors of the three subsidiaries, i.e. CBD, APG, and DCM are any two directors,
who shall jointly sign with the seal affixed in order to bind such three subsidiaries, except for certification
of documents and/or copies of documents, which shall require the signature of any one director with
each subsidiary’s seal affixed.
11.2.3 Management of the subsidiaries
As of 31 December 2014, the management of the three subsidiaries, i.e. CBD, APG, and DCM,
consists of eight executives as follows:
Name
Position
Company
CBD
APG
DCM
Chief Executive Director



2. Miss Nutchamai
Thanombooncharoen
Managing director



Acting Deputy Managing Director, Sales
88


4. Mrs. Wongdao
Thanombooncharoen
Senior Deputy Managing Director,
Marketing Operations


Deputy Managing Director, Marketing


Annual Report 2014

Name
Position
Company
CBD
APG
DCM




Deputy Managing Director, Accounting
and Finance


8. Miss Suporn Samakkabutr
Director, Accounting

11.3 Personnel of the Group
11.3.1 Number of personnel and remuneration
For the fiscal year ended 31 December 2013 and 2014 the Group had a total number of
employees (excluding management) of 1,367 and 1,775 respectively. Below is a summary of remuneration.
31 December 2013
Type of Remuneration
No. of Employee
Value
(Baht)
31 December 2014
No. of Employee
Value
(Baht)
Salary and bonus
1,367
304,073,592
1,775
379,005,817
Provident fund and social
security contributions
1,367
10,026,991
1,775
17,175,454
Total
314,100,583
396,181,271
11.3.2 Dispute on laboring issues
During the past three years ended 31 December 2014, the Group was not a party to any legal
dispute on laboring issues that may have materially affected their business operation.
89
11.3.3 Personnel development policy
The Group emphasizes development of knowledge and the capabilities of all employees. As all
employees are considered to be part of the Group’s success, personnel development is a long-term
investment and must be done on a consistent basis. Personnel are the most valuable resources of
an organization. Therefore, personnel development is necessary for all employees to be able to apply
knowledge to their responsible functions and become part of the Group’s business success, and for the
Group to be able to achieve its goals and sustainable growth in business.
The Group has designed a personnel development structure that consists of five programs as set
out below.
(1) Orientation Program
This program is organized for new employees with a view to introducing the Group,
the nature of the work, and other information necessary for the performance of duties.
New employees will be proud to become part of the Group, and will become familiar
with their work and colleagues.
(2) Core Competency Training Program
The purpose of this program is to develop employees’ core competency, to enable
them to maximize their efficiency in supporting the organization’s businesses, and driving
its achievement and sustainable growth.
(3) Job Competency Development Program
This program is intended to develop employees’ knowledge and capabilities that are
necessary for their job, as well as their ability to use such knowledge in the performance
of duties in an efficient manner.
(4) Functional Competency Development Program
This program is intended for developing specific skills, capabilities, or techniques that
employees must possess in the performance of their duties, so as to achieve targets,
such as knowledge in the production process, specific techniques, or field of work, etc.
(5) Managerial Competency Development Program
The purpose of this program is to enhance knowledge, skills, managerial characteristics,
and leadership of management personnel, to enable them to achieve goals.
The Group categorizes their employees for personnel development purposes into four groups, i.e.
Sales Team, Sao Bao Dang Team, Factory Team and Supporting Team, based on the nature of the
organization and development structure.
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Annual Report 2014
(1) Sales Team
The Group has a training system to provide its Sales Team with knowledge in the
management of agents, extensive distribution of products, and sales management
techniques.
(2) Bao Dang Girls Team
The Bao Dang Girls Team is in charge of communications, sales promotion activities, and
introduction of the Group’s new products to target groups for testing. To ensure the
achievement of these objectives, the Group provide to its team with the development
of various skills, such as hosting, acting, attracting consumers, and communicating skil s.
(3) Factory Team
In developing the Factory Team, the Group emphasizes on production, product quality,
cost reduction, increase in productivity, and work process, to be consistent with the
main objectives of the factory, i.e. increase in productivity, cost reduction, and management of the quality systems, such as GMP system, HACCP system, and ISO 22000
system. Employees are also provided with training on techniques and development of
other soft skills.
(4) Supporting Team
Development of the Supporting Team is significant for business operations in order to
achieve the organization’s goals. The Group provides development to their Supporting
Team as if they were business partners. Supporting Team is provided with development
of knowledge and abilities from its actual work, in-house training, the advice of experienced persons in each field, and training by third-party organizations.
91
Corporate Governance Policy
92
Annual Report 2014
12. Corporate Governance Policy
The Company, through its directors, executives, and staff, commits and adheres to good corporate
governance principles in operating the Company, and regards good corporate governance principles as
an important factor in promoting the overall success of the Company. The Company’s good corporate
governance policy is in line with the Principles of Good Corporate Governance for Listed Companies,
2012, specified by the SET. The policy, covering principles related to rights of shareholders, equitable
treatment of shareholders, roles of stakeholders, disclosure and transparency, and responsibilities of the
board of directors, can be categorized into five categories as follows:
(1)
Category 1: The Rights of Shareholders
The Company recognizes and values basic rights of shareholders, namely rights to sell, buy, or
transfer shares, right to shares in the business profit, rights to sufficiently receive information about the
business, rights to attend shareholders meetings to exercise the rights to vote in the appointment or
removal of directors, appointment of auditors, and matters affecting the Company such as allocation
of dividends, specification or amendment of Articles of Association and Memorandum of Association,
reduction or increase of capital, and approval of special transactions, etc.
A shareholders meeting is an important channel where the Company’s shareholders can exercise
their rights as shareholders. For this reason, the Company holds shareholders meetings in accordance
with the guidelines specified by the SET in order to promote and facilitate the exercise of rights of
shareholders, as follows:
(a) In order to provide the shareholders with an opportunity to study the Company’s information
related to shareholders meetings, the Company will send the notice of shareholders meeting and
supporting documents to the shareholders at least seven days in advance (or such other period required
by law). The notice shall contain the details on the date, time, venue, and agenda of the meeting,
with explanation and reason for each agenda item or each resolution sought, as well as the opinion
of the board of directors, proxy form specified by the Ministry of Commerce and list of independent
directors to allow shareholders to authorize proxies to attend the meeting, and map of the meeting
location.
(b) The Company allows shareholders to send their questions to the Company prior to the
meeting date. The criteria for advance questions will be clearly determined and the shareholders wil be
notified of the same in the notice of shareholders meeting. Also, the Company will publish the criteria
for submitting the questions on the Company’s website.
(c) If a shareholder cannot attend the meeting, the Company allows the shareholder to appoint
an independent director or any person as their proxy to attend the meeting on their behalf by submitting
a proxy form sent with the notice of shareholders meeting by the Company.
(d) In each meeting, the chairman will notify the meeting of the rules applicable to the meeting
and the voting process, and allocate sufficient time for the meeting.
(e) During the meeting, the chairman will give equal opportunity to each shareholder to fully
ask questions, and give opinions and suggestions. The relevant directors and executives will attend the
meeting to answer questions and listen to opinions and suggestions of shareholders for appropriate
consideration or further process.
93
(f) The Company will appoint an independent party to count and validate votes at a shareholders
meeting. The votes will be disclosed to the meeting and recorded in the minutes.
(g) The Company will use voting cards for important agenda items such as related party
transactions, or acquisition or disposal of assets, for the sake of transparency and traceability in the
case of subsequent objection.
(h) When the meeting ends, the Company will prepare accurate and complete minutes of the
meeting within fourteen days from the date of the meeting and send the same to the relevant agency
within the period specified.
(2)
Category 2: Equitable Treatment for Shareholders
It is the Company’s policy to equitably and fairly treat and protect the rights of all
shareholders, whether executive or non-executive shareholders, Thai or non-Thai, major or minor. After
the public offering, and after becoming a listed company on the SET, the Company aims to provide
additional channels for shareholders who cannot attend the meeting themselves to authorize independent directors or other persons as proxies who may attend the meeting and vote on behalf of the
shareholders. Minor shareholders will also be given the opportunity to nominate candidates for directors
in advance at reasonable time and to add any agenda item before the date of the shareholders
meeting in accordance with the rules to be specified by the board of directors and notified to the
shareholders.
The meeting will be conducted in accordance with the Company’s Articles of Association based
on the order of the agenda. The details and supporting information for each agenda item wil be
presented fully. Unless necessary, no agenda item shall be added without prior notice to the shareholders,
especial y important one which requires considerable time for the shareholders to consider the matter
before making a decision.
The board of directors has determined the procedures to prevent the improper use of inside
information (insider trading) by related persons, including directors, executives, staff and employees, as
well as a spouse and minor children of such persons. Disciplinary measures with regard to disclosure or
use of information of the Company for personal interest have also been determined in accordance with
the policy on prevention of exploitation of inside information. Directors and executives of the Company
have also been informed of their duties and responsibilities in reporting the holding of the Company’s
securities by them, their spouses, and their minor children, as well as the change in such holdings, to
the Office of the SEC in accordance with section 59 and penalties under the SEC Act.
(3)
Category 3: Roles of Stakeholders
The Company values the rights of stakeholders and treats all relevant parties equitably. The Company’s
stakeholders are shareholders, staff, customers, trade competitors, community, and society.
(a) Shareholders
The Company is committed to being a good representative of the shareholders in operating the
business for the highest benefit of shareholders and wil transparently and credibly disclose information to
shareholders.
(b) Staff
The Company recognizes the importance of all staff of the Company, whose roles are to drive the
Company to develop the Company’s business operation. Therefore, the Company is committed to continuously
94
Annual Report 2014
develop capacity, knowledge, ability, and skil s of the staff, including to consider appropriate remuneration
in accordance with knowledge and ability of each staff, and to maintain good working environment, taking
into account the quality of life and occupational safety. The Company treats all staff equitably and fairly.
The Company is always responsible for maintaining a working environment to ensure safety of life
and property of the staff and strictly adheres to the labour laws.
The Company values privacy of staff and does not disclose personal data such as salary, medical
history, and family to third parties or irrelevant persons, unless such data is required to be disclosed to a
relevant third party in accordance with the law.
(c) Customers and trade competitors
The Company operates its business in accordance with the relevant laws and adheres to code of
conduct and good corporate governance principles in order for the Company’s customers to gain the best
interest from the Company’s goods and products. The Company also follows good competition rules and
the relevant laws, maintains the norm of competition best practices, and avoids using dishonest methods
to harm competitors.
(d) Community and society
As a Thai company, the Company recognizes and appreciates the generosity of the nation and its
part in society. The Company is committed to social responsibility by helping society, supporting activities of
the localities in which the Company operates its business, taking into account the effect on the environment. Furthermore, the Company consistently focuses on instil ing awareness of responsibility toward community
and society in the Company, supports activities beneficial to society as a whole, and avoids any il egal or
unlawful action.
In order to effect the policy on equitable treatment of stakeholders set out above, the Company
wil adhere to best practices of the SET, as follows:
(1) the Company wil clearly determine the policy on treatment of each group of stakeholders
covering at least the principles specified in the SET’s Principles of Good Corporate Governance for Listed
Companies, 2012; and
(2) the Company wil implement procedures and channels for accepting and managing complaints
of stakeholders, which wil be published on the Company’s website.
(4)
Category 4: Disclosure and Transparency
The Company is committed to disclosing accurate, complete, and transparent information, both
in terms of financial reports and general information, in accordance with the rules of the SEC and
the SET, as well as essential information that impacts the price of the Company’s shares, which affects
the decision-making process of investors and stakeholders of the Company so that all relevant persons
equally acknowledge such information. After this public offering and after being listed on the SET, the
Company wil disclose information to shareholders and the public through the channels and media of
the SET through a mechanism that ensures that all information disclosed to investors is accurate, would
not cause any misunderstanding and is adequate for decision-making by the investors.
Apart from disclosure of information in accordance with the rules specified and through the
channels of the SET, the annual registration statement (Form 56-1), and the annual report, the Company
wil disclose the information, in Thai and English, through other channels, such as the Company’s website,
consistently and regularly, and present up-to-date information. The information on the Company’s website
wil contain at least the information specified in the SET’s Principles of Good Corporate Governance for
Listed Companies, 2012.
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The board of directors recognizes its responsibility in providing accurate, complete, true, and
reasonable financial statements which are prepared in accordance with generally accepted accounting
standards. The Company regularly applies appropriate accounting policies and carefully exercises its
discretion. The Company also provides adequate information in the notes to the financial statements.
The Company wil prepare Management Discussion and Analysis (MD&A) to support the disclosure of
financial statements for every quarter so that the investors are aware and understand changes in the
financial status and operating results of the Company in each quarter more clearly than looking at only
the figures in the financial statements.
Furthermore, the board of directors arranges maintenance of effective internal control to reasonably
ensure that accounting data is accurately, completely, and adequately recorded to maintain assets,
and to determine weaknesses in order to prevent misconduct or significantly irregular practices. The
Company wil also appoint an audit committee consisting of directors not holding managerial positions,
whose duty is to examine the financial reports, related party transactions, and internal control system.
The audit committee will report directly to the board of directors.
(5) Category 5: Responsibilities of the Board of Directors
(a) Board structure
The Company’s board of directors is comprised of directors who possess management-level
knowledge, ability, and experience from a variety of organizations so that they can apply the experience,
knowledge, and ability in effectively developing and determining the direction of the Company’s business
operation for the best interests of the Company and its shareholders. The board of directors has an
important role in determining the policies and overall image of the organization and in governing,
inspecting, and monitoring the performance of the management, and evaluating the Company’s operation
based on the plan set.
Not less than one-third of the Company’s board of directors shall be independent
directors. As of 1 October 2014, the Company has nine directors, consisting of four executive directors,
and five non-executive directors, including three audit committee directors. Such board structure allows
for balance in voting in the consideration of matters. The board of directors also appoints committees
to supervise the Company’s business, as follows:
(b) Committees
• Executive committee
The Company’s executive committee consists of six members. The executive committee determines the policy and strategy in operating the business in accordance with the goal set
by the board of directors to ensure effective management.
• Audit committee
The Company’s audit committee, consisting of three members, is appointed to perform
specific tasks and propose matters to the board of directors for consideration and acknowledgement.
The audit committee’s rights and duties are specified in the audit committee charter. At least one
audit committee member shall possess sufficient knowledge and experience in accounting to be able
to inspect the credibility of the Company’s financial statements.
• Risk management committee
The Company’s risk management committee, consisting of seven members, has the
duty of identifying risks related to operation of the Company’s business, determining preventive measures,
and monitoring appropriate compliance with such measures.
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• Nomination and remuneration committee
The Company’s nomination and remuneration committee, consisting of five members, has the
duties of determining policies with respect to nomination of directors and top-level executives, and
screening persons with appropriate qualifications before proposing the list to the board of directors or
the shareholders meeting for appointment. The nomination and remuneration committee also plays an
important role in considering the criteria for determining the appropriate remuneration of the directors
and top-level executives that are appropriate and reflect performance of directors and executives based
on the goals specified.
The board of directors has appointed the Company’s secretary, whose duties and
responsibilities are in accordance with the SEC Act.
(c) Roles, duties, and responsibilities of the board of directors
The Company requires the board of directors to comply with the code of best practice
in accordance with the guidelines of the SET. The directors must understand and recognize their roles,
duties, and responsibilities, and perform their duties in accordance with the law, the Company’s objectives
and the Articles of Association, shareholders’ resolutions, the charter of the board of directors, and
the Company’s corporate governance policy with integrity and honesty, with priority given to the best
interests of the Company and its shareholders. The board of directors determines the policies, business
goals, business plans, and the budget of the Company, and governs the management division to ensure
compliance with the policies, plans, and budget specified with efficiency and effectiveness, for the best
interests of the Company and its shareholders.
(d) Board of directors meeting
The Company follows the rules regarding board of directors meetings specified in the
PLCA and the Company’s Articles of Association. The Company sets its meeting schedule and agenda in
advance and notifies each director of such schedule and sends supporting documents to the directors
at least five days before the date of the meeting.
The number of board meetings will depend on the duties and responsibilities of the board
of directors and the nature of operation of the Company’s business, but will not be less than six times
per year.
(e) Board of directors self-evaluation
The Company wil require the board of directors and committees to conduct self-evaluation
at least once a year to jointly consider the performance and problems in order to determine appropriate
improvement and solution. The self-evaluation will be conducted both on the group and individual basis.
The Company will appoint an external consultant to set a guideline and advice on a board assessment
at least once every three years. The criteria, process, and overall results of the self-evaluation wil be
provided in the annual report.
(f) Remuneration
The remuneration for the board of directors will be comparable to the industry level in
which the company operates and reflect the experience, duties, accountability and responsibility, and
expected contribution of each director. The remuneration of the managing director and the top-level
executives wil be in accordance with the principles and policies specified by the board of directors
under the scope approved by the shareholders meeting, taking into account the best interests of the
Company. The salaries, bonuses, and incentives will correspond to the performance of each executive,
taking into consideration the benefits obtained by the shareholders.
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The Company will require the nomination and remuneration committee to determine the
remuneration of the managing directors and top-level executives, both in monetary and non-monetary
form, for appropriateness and fairness, and propose the same to the board of directors meeting and/
or shareholders meeting for consideration and approval.
(g) Development of directors and executives
The Company encourages training and knowledge sharing for all parties related to
corporate governance such as directors, members of the audit committee, executives, company secretary,
etc. to promote continuous performance improvement. Trainings and knowledge sharing may be held
internally by the Company or provided by external institutions such as courses provided by Thai Institute
of Directors Association (IOD).
Social Responsibility
The Group operates their business with morality and ethics, taking into account the stakeholders,
economy, society, and the environment. In order to secure the confidence of shareholders, investors,
employees, customers, stakeholders, and all relevant persons, the Group also adheres to good corporate
governance principles to ensure the integrity, transparency, and equitability of the business, recognizing
the negative effects on the economy, society, natural resources, and the environment. The Group’s
corporate social responsibility policy is as follows:
(1) Fair business operation
The Group places emphasis on honest and fair business operation in accordance with
the competition rules under relevant laws and regulations, taking into account the benefits and the
effect of the operation of the business by the Group on stakeholders, namely shareholders, employees,
customers, partners, investors, creditors, and the surrounding community. The Group has determined the
relevant guidelines as follows:
• to operate the business strictly in accordance with the applicable laws, regulations,
and rules, and to cooperate with the authorities; and
• to create awareness among employees regarding the importance of compliance
and fair competition.
(2) Anti-corruption efforts
It is the Group’s policy to combat corruption by promoting morality, ethics, and
transparency in operating the business, in accordance with the Group’s code of conduct, and to
operate the business using effective management systems with transparency and traceability. The Group
also encourages training and creating awareness among employees of possible corruption, and supervises
anti-corruption efforts in accordance with the following guidelines:
• Employees shall avoid accepting gifts, rewards, entertainment, and other benefits
of distributors, to ensure independence in procuring goods from distributors. If an employee is found to
accept benefits that exceed customary practice, or takes any action that compromises the employee’s
independence in performing his or her duty, the employee may be subject to investigation or allegation,
and punishment in accordance with the work regulations or other rules of the Group.
(3) Respect for human rights
The Group operates their business in respect of human rights, by promoting and protecting
rights, freedom, and equitable treatment, which is the foundation of human resources management
and development. It is not the Group’s policy to discriminate on the grounds of race, gender, age or
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disability. The Group has determined the following guidelines in this regard:
• The Group hires persons with disability to perform work for the Group, with
commitment to equitable treatment, in order to create job opportunities and income for such persons.
(4) Equitable treatment of employees
The Group believes that personnel are the heart of sustainable development. With
commitment to the quality of life of employees, the Group provides a good working environment,
implement a human resources management system that is based on fairness, and promote development
of personnel by providing training and on-the-job trainings based on the needs and suitability of each
staff member, in order to increase work efficiency and create career progress. The Group has determined
the following guidelines in this regard:
• The Group categorizes their employees into four groups, namely the Sales Team,
Sao Bao Dang Team, Factory Team, and the support staff, and provide training to each group as
appropriate for their duties;
• The Group focuses on providing an orderly working environment for occupational
safety, and implement systems for a hygienic cafeteria, clean toilets, safe transportation, and efficient
infirmary, in accordance with the law; and
• The Group will ensure fairness in hiring new employees, transferring employees,
and determining remuneration for employees, taking into account qualifications, suitability for the position,
nature of work, and performance.
(5) Responsibility toward consumers
The Group is committed to producing and developing quality products to satisfy the
needs of consumers, from choosing quality raw materials to using manufacturing processes with advanced
standardized technology for cleanliness and safety, with GMP certification, HACCP certification, and
approval by food and drug administrations at an international level. The Group has already obtained
ISO 22000.
(6) Maintenance of the environment
The Group strictly complies with the laws and regulations concerning environmental
management, and implement preventive and corrective measures for environmental impact caused by
the operation of the Group. The Group also uses resources efficiently and economically, implements an
effective production waste treatment system, and assesses their environmental management system. The
Group has determined the following guidelines in this regard:
• The Group manages factory waste by engaging a third-party juristic person to
manage waste in the factory. The Group’s employees place waste in designated areas. Then, the
juristic person disposes of the waste outside the factory. The Group will apply for permission from the
Department of Industrial Works to remove waste from the factory.
• The Group engages a third-party juristic person to measure environment quality,
in terms of particulate matter, noise level within the factory, heat, sufficiency of lighting, and quality of
water and air, and prepare an environmental monitoring report.
(7) Development of community and society
Recognizing the importance of contributing to society, the Group regularly conducts
projects for development of society, focusing on music activities, education, creating occupations, and
encouraging self-reliance. The Group has held the following activities for the benefit of the community
and society
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Nomination and Appointment of
Directors and Top-Level Executives
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13. Nomination and Appointment of Directors and
Top-Level Executives
(1) Board of directors
The composition, nomination, appointment, removal or retirement of directors of the Company
are specified in the charter of the board of directors approved by Board of Directors Meeting No.
3/2014 held on 22 April 2014. The charter specifies the qualifications of the Company’s directors, which
can be summarized as follows:
(a) The Company’s directors need not hold shares in the Company. A director must possess
knowledge, ability, experience beneficial to the operation of the Company’s business, honesty, integrity,
morality in operating the business, and sufficient time to dedicate his or her knowledge and ability, and
must be able to fully perform their duties for the Company. Furthermore, a director must possesses all
qualifications required and must not possess any prohibited characteristics under the law governing public
limited companies and the law governing securities and exchange. A director must not possess any trait
that reflects lack of suitability to be trusted with managing a business of which the public hold the
shares, as specified by the SEC. A director must be listed in the database of directors and executives
of securities issuing companies under Notification of the Capital Market Supervisory Board Re: Rules for
Listing Names of Persons on Database of Directors and Executives of Securities Issuing Companies.
(b) The board of directors shall consist of no fewer than five directors and at least one half
of the total number of directors shall be domiciled in Thailand.
(c) There shall be at least three independent directors and the number of independent directors
shall constitute at least one-third of the Company’s board of directors. Independent directors must be
independent from the control of major shareholders and shall not have any financial or operational
relation or interest. Independent directors shall also possess all qualifications under the rules prescribing
qualifications of independent directors prescribed in Notification of the Capital Market Supervisory Board No.
TorJor. 28/2551 Re: Application and Approval for New Shares (“Notification TorJor. 28/2551”) as amended.
(d) The board of directors shall include no fewer than three audit directors. The audit directors
must possess all qualifications required under Notification TorJor. 28/2551, and shall have the authority,
duty and responsibility in accordance with the scope specified by the SET.
(e) The board of directors may elect one director to be the chairman of the board of
directors. If the board of directors deems it appropriate, they may appoint one or more directors as
vice chairman.
(2)
Independent directors
The nomination and remuneration committee will consider the qualifications of the persons
appointed as independent directors by considering the qualifications and prohibited characteristics
prescribed in the PLCA, the SEC Act, notifications of the Capital Market Supervisory Board, and other
relevant notifications, regulations and/or rules. Furthermore, the board of directors will consider selecting
persons with qualifications, experience and suitability to be the Company’s independent directors and
propose them to the shareholders meeting for consideration and appointment as Company’s directors.
It is the Company’s policy to ensure that the number of independent directors shall constitute at least
one-third of the Company’s board of directors and not fewer than three members. The board of directors
has specified the qualifications of an independent director, as follows:
(a) an independent director must not hold shares exceeding one percent of the total shares
with voting rights of the Company, the parent company, the subsidiaries, the associate companies,
major shareholders, or controlling persons of the Company. Such percentage shall include shares held
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by related persons of such independent director;
(b) an independent director shall not be or have been an executive director, employee, staff
and consultant who receives a regular salary or a controlling person of the Company, the parent
company, the subsidiaries, the associate companies, the same-level subsidiaries, major shareholders, or
controlling persons of the Company, unless the director has not held such position for at least two years
before the date of submission of the application to the Office of the SEC;
(c) an independent director shall not be related by blood or legal registration as father, mother,
spouse, sibling, or child, including spouse of a child of another director, executive, major shareholder,
controlling person to be nominated as an executive director or controlling person of the Company or
the subsidiaries;
d) an independent director shall not have or have had a business relationship with the Company,
the parent company, the subsidiaries, the associate companies, major shareholders or controlling persons
of the Company in the manner that may prevent free judgment, and shall not be or have been a
significant shareholder or controlling person of a person related to the business of the Company, the
parent company, the subsidiaries, the associate companies, major shareholders, or controlling persons of
the Company, unless such relationship ended at least two years before the date of submission of the
application to the Office of the SEC;
(e) an independent director shall not be or have been an auditor of the Company, the
parent company, the subsidiaries, the associate companies, major shareholders, or controlling persons
of the Company, and shall not be a significant shareholder, controlling person of or a partner in the
auditing office in which the auditor of the Company, the parent company, the subsidiaries, the associate
companies, major shareholders, or controlling persons of the Company works, unless the director has
not held such position for at least two years before the date of submission of the application to the
Office of the SEC;
(f) an independent director shall not be or have been a provider of any professional service,
including legal advisory or financial advisory service receiving more than Baht two million of service
charges per year from the Company, the parent company, the subsidiaries, the associate companies,
major shareholders, or controlling persons of the Company, and shall not be a significant shareholder,
controlling person or a partner of the service provider, unless the director has not held such position for
at least two years before the date of submission of the application to the Office of the SEC;
(g) an independent director shall not be a director appointed as the agent of the directors
of the Company, major shareholders, or shareholders related to a major shareholder;
(h) an independent director shall not operate a business of the same nature with and in
competition with the business of the Company or the subsidiaries and shall not be a significant partner
in a partnership, or be an executive director, employee, staff and consultant who receives a regular
salary, or hold shares exceeding one percent of the total shares with voting rights, of another company
operating a business of the same nature with and in competition with the business of the Company
or the subsidiaries.
(i) an independent director shall not possess any other characteristics that prevent them from
freely giving an opinion regarding the Company’s operation.
(3)
Audit committee
The components and nomination, appointment, removal, or retirement of audit directors are
specified in the charter of the audit committee approved by Board of Directors Meeting No. 2/2014,
held on 10 March 2014.
(a) The board of directors selects and appoints the Company’s audit committee, which shall
consist of at least three members. An audit director shall be an independent director of the Company
who possesses the qualifications required under the law governing securities and exchange and the
notifications, regulations and/or rules of the SET.
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(b) At least one member of the audit committee shall possess knowledge and experience
in verifying the accuracy of the financial statements, and such qualifications shall be set out in the
certificate and biography of audit committee members to be submitted to the SET and in the filing
forms, Form 56-1 and Form 56-2.
(c) Upon expiration of the term of an audit committee member or if an audit committee
member vacates the office before the term expires, causing the number of members to be lower than
three, the board of directors will appoint replacement members within three months from the date on
which the number of members becomes lower than three for continuity in the performance of the
audit committee.
(d) The Company’s head of audit shall be the secretary of the audit committee.
(e) The term of each member of the audit committee is three years.
(4) Executive committee
The components and nomination, appointment, removal, or retirement of executive directors
are specified in the charter of the executive committee approved by Board of Directors Meeting No.
3/2014, held on 22 April 2014, which can be summarized as follows:
(a) The executive committee consists of at least three members.
(b) The board of directors will appoint one member as the chairman of the executive
committee. If the board of directors deems it appropriate, they may appoint one or more members as
vice chairman of the executive committee.
(5) Risk management committee
Board of Directors Meeting No. 3/2014, held on 22 April 2014, passed a resolution appointing a risk
management committee, consisting of directors and/or executives who possess appropriate qualifications, in
order to determine policies related to risk management covering the whole organization, ensure that
the company implements risk management systems or processes to control risks and minimize impact
on the Company’s business. The main duties of the risk management committee include identification
of risks related to the operation of the business of the Company, determination of preventive measures,
and monitoring compliance with such measures. The purpose of the charter is to ensure that the risk
management committee members understand their roles, duties, and responsibilities and use the charter
as a guideline for their performance.
The risk management committee is appointed by the board of directors. The term of office is
three years from the date of appointment. A retiring member of risk management committee is eligible
for reappointment.
(6) Nomination and remuneration committee
Board of Directors Meeting No. 3/2014, held on 22 April 2014, passed a resolution appointing a
nomination and remuneration committee consisting of directors and executives who possess appropriate
qualifications, in order to determine policies related to nomination of persons to be directors and
top-level executives, and screening of persons with appropriate qualifications and proposing the same
to the board of directors or shareholders meeting for appointment. The nomination and remuneration
committee also plays an important role in considering criteria in determining appropriate remuneration
of directors and top-level executives that reflect the performance of directors and top-level executives,
based on the goals specified.
The nomination and remuneration committee consists of no fewer than three directors and
executives. The board of directors will appoint one member as the chairman of the nomination and
remuneration committee. The term of the nomination and remuneration committee, appointed by the
board of directors, is three years from the date of appointment. A retiring member of nomination and
remuneration committee is eligible for reappointment.
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Governance of Operation of Subsidiaries and Associate Companies
The Company is a holding company with no significant business of its own. Therefore, in order
for the Company to govern and be responsible for the operation of the subsidiaries as though they are
a part of the Company and in order to maintain the interest of the Company’s investment, Board of
Directors Meeting No. 3/2014, held on 22 April 2014, passed a resolution approving the policy on control
of and mechanism for governing the business in which the Company invests in order to determine the
mechanism for governing subsidiaries and the measures for monitoring the operation of the subsidiaries to
ensure compliance with the rules prescribed in Notification TorJor. 28/2551. Furthermore, the Extraordinary
General Meeting of Shareholders No. 3/2014, held on 1 October 2014, passed a resolution approving the
amendment of the Articles of Association of The Company and the subsidiaries to be in compliance
with the rules prescribed in Notification TorJor. 28/2551.
The details of governing the operation of the subsidiaries and associate companies in
accordance with the policy on control of and mechanism for governing the business in which the
Company invests are as follows.
(1) Exercise of voting rights by the Company’s representative in the
shareholders meetings of the subsidiaries and associate companies
The Company has determined the guidelines on exercise of voting rights by the Company’s representative in the shareholders meetings of the subsidiaries with respect to certification of minutes of ordinary
and/or extraordinary general meetings of shareholders, certification of annual financial statements, election
of directors and determination of remuneration, appointment of auditors and determination of remuneration,
allocation of profit, approval of other matters, and consideration of other matters not specified in advance
in the agenda in order to comply with the guidelines on good corporate governance and to maintain the
best interests of the Company, the subsidiaries and other shareholders as a whole.
(2) Structure of management of subsidiaries
The Company has determined the structure of management of subsidiaries in order to control
the management and be responsible for the operation of the subsidiaries as though they are a part of
the Company. The Company also implements measures for monitoring management of the subsidiaries
in order to maintain the interest of the Company’s investment, as follows.
(1) Nomination of directors of subsidiaries
The Company will nominate persons approved by the board of directors meeting as directors
of the subsidiaries in a number reflecting the shareholding proportion of the Company in the respective
subsidiary. The nominated director shall have the required qualifications, role, duty, and responsibility, and
shall not possess untrustworthy characteristics as prescribed in the notifications of the SEC concerning
determination of untrustworthy characteristics of directors and executives of a company.
(2) Determination of scope of duty and responsibility of directors and executives of subsidiaries
The directors appointed by the resolution of the board of directors meeting as a director of
subsidiaries shall observe the scope of duty and responsibility specified in the Articles of Association of
the subsidiaries specified by a resolution passed by the Extraordinary General Meeting of Shareholders
of the Company No. 3/2014, held on 1 October 2014. The objective of the Articles of Association is to
ensure that the boards of directors of the Company and the subsidiaries understand their roles, duties,
and responsibilities toward the shareholders of the Company and the subsidiaries, and that they wil
perform their duties efficiently and effectively with transparency. More importantly, the board of directors
of the subsidiaries must perform their duties in accordance with the policy on control of and mechanism
for governing the business in which the Company invests, and the policy of corporate governance
specified by the Company.
The Company shall ensure that the subsidiaries have internal control system, risk management
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system, fraud prevention system which are appropriate, efficient and adequate, ensuring that the
operations of the subsidiaries are in compliance with the Company’s policy, the Articles of Association
of the subsidiaries, Chapter 5: “the management for the compliance with the controlling policy and
corporate governance mechanism of the company in which the Company invests”, as well as, law and
notifications regarding good corporate governance of listed companies, including relevant notifications,
regulations and rules of the Capital Market Supervisory Board, the Office of the SEC and the SET. The
Company shall also procure a clear arrangement to demonstrate that the subsidiaries have a sufficient
system for disclosing significant transactions in accordance with prescribed rules with continuity and
accountability, allowing directors and executives of the Company to have access to the information of
the subsidiaries for the purpose of effectively monitoring operating results and financial conditions, related
party transactions between the subsidiaries and directors and executives of subsidiaries and significant
transactions of the subsidiaries. In addition, the Company shall have mechanism for auditing the said
system of the subsidiaries by ensuring that the internal audit team and independent directors of the
Company have direct access to such information and also the result of the system audit is reported to
directors and executives of the Company, ensuring that the subsidiaries constantly comply with the system.
(3) Disclosure of data of directors and executives of the subsidiaries
(a) A director and executive of a subsidiary must disclose and submit data on their interest and involvement in any transaction that can be expected to create a conflict of interest with the
Company and a subsidiary to the board of directors of the subsidiary or the person assigned by the
board of directors of the subsidiary within the period specified by the subsidiary. The board of directors
of the subsidiary has the duty to notify the board of directors of the Company of the matter within
the period specified by the Company so that such data can be used to support any consideration or
approval. The board of directors will consider the matter, taking into account the best interest of the
subsidiary and the Company. The directors and executives of the subsidiary shall not be involved in the
approval of any matter in which they have an interest or conflict of interest.
(b) A director and executive of a subsidiary, including persons related to the director
and executive, have the duty to notify the board of directors of the subsidiary of their relationship
and transaction with the subsidiary in a manner that may cause a conflict of interest, and shall avoid
making any transaction that may create a conflict of interest with such subsidiary. The board of directors
of the subsidiary has the duty to notify the Company of such matter.
The following actions, which cause a director, executive, or person related to the director
or executive to gain other financial interests apart from those normally receivable by them, or cause
damage to the subsidiary shall be assumed as actions that materially conflict with the interest of the
subsidiary:
• a transaction made between the subsidiary and a director, executive, or related person
not in accordance with the rules concerning related party transactions;
• use of data of the Company and the subsidiary which such person has obtained, unless
such data has been disclosed to the public; or
• use of property or a business opportunity of the Company and the subsidiaries in a manner
that violates the rules or general practices prescribed by the Capital Market Supervisory
Board.
(4) Disclosure of information of subsidiaries
(a) It is the duty of a subsidiary to disclose accurate and complete information on its
financial status and operating results, transactions made between the subsidiary and a connected person, acquisition or disposal of assets, or other important transactions of the subsidiary, and to apply the
rules concerning disclosure and transactions of a nature similar to the rules of the Company.
(b) A subsidiary must report its business operation plan, business expansion, investment in
large projects, and joint investment with other business operators to the Company through a monthly performance report. The Company is entitled to invite the subsidiary to provide an explanation or
105
submit supporting documents for consideration, and the subsidiary shall strictly comply with such request
immediately. If the Company finds any significant issue, the company may request that the subsidiary
provide an explanation and/or submit documents for consideration by the Company.
(5) Use of inside information of subsidiaries
No director, executive, staff, employee, or designated persons of the subsidiaries, including
spouse or minor child of the aforementioned persons shall use the inside information of the Company
and the subsidiaries, whether obtained in accordance with their duty or otherwise, in a manner that
significantly affects or may affect the Company and/or the subsidiaries for their own or others’ interest
whether directly or indirectly, or whether any benefit is gained from such use.
(6) Transactions made by the directors, executives, or persons related to subsidiaries
The director, executive, or related person of a subsidiary may enter a transaction only when
such transaction has been approved by the Company’s board of directors or shareholders meeting,
depending on the size of the transaction, calculated based on the rules prescribed in the related
party transaction notification, unless such transaction is a commercial agreement of a nature which a
reasonable person would enter with a general party under similar circumstances without any influence as
a director, executive, or related person, as the case may be. The commercial terms of such transactions
must be approved by the board of directors or in accordance with the criteria previously approved
by the board of directors.
(3) Financial control of subsidiaries
(1) A subsidiary has the duty to submit monthly operating results and reviewed quarterly financial
statements, as well as data supporting the preparation of such financial statements of the subsidiary
and associate company to the Company, and agrees that the Company may use such data for
preparation of financial statements or annual or quarterly reports of the Company’s operating results,
as the case may be.
(2) A subsidiary has the duty to prepare estimates of operating results and a summary of
comparison of operating results with the actual operation plan on a quarterly basis, monitor the operating
results to ensure compliance with the plan, and notify the Company of the same.
(3) A subsidiary has the duty to report significant financial issues to the Company upon discovery
or request by the Company to investigate and report such issues.
Control of Internal Information
The Company operates its business based on good corporate governance practices, taking into
account the importance of and responsibility toward its shareholders and stakeholders. The Company
supervises the use of inside information in accordance with good corporate governance principles and
sets out rules concerning use of internal information in its corporate governance policy approved by the
resolution of Board of Directors Meeting No. 3/2014 held on 22 April 2014, which can be summarized
as follows.
(1) Guidelines on disclosure of inside information
The Company has determined the confidentiality level of trade secrets, disclosure of which
to third parties must be prevented. Confidentiality level is determined based on its importance, i.e.
non-confidential data, concealed data, confidential data, and strictly confidential data. Use of inside
information shall be under the scope of duty and responsibility assigned.
106
Annual Report 2014
Confidential information may be disclosed to the public only when consent is given by the
managing director, subject to consideration by the executive committee. Significant data may be disclosed
to the public by the unit responsible for disclosure as assigned by the Company. Data related to third
parties or other stakeholders may be disclosed upon consent of the third parties or stakeholders. The
center with duty to disclose information to the public is the investor relations and business development
section under the investment management department.
With respect to giving an opinion to third parties, the Company’s personnel shall not answer
questions or give opinions to any third parties unless appointed or assigned to do so.
(2) Guidelines on use of insider trading
The Company recognizes the importance and responsibility towards shareholder and stakeholders
of the Company in accordance with the principles of good corporate governance. Therefore, to
improve the confidence of shareholders, investors and relevant parties, the Company has determined
the procedures to prevent the improper use of inside information (insider trading) by personnel of the
Company, including board of directors, managers, responsible operators, executives, auditors, staff, and
spouse and minor children of such persons. The purpose of this measure is to create equality and
fairness in using inside information of the Company in order to create confidence for shareholders,
investors and relevant parties. The Company prohibits the aforesaid persons of the Company, including
family members of such persons who obtain inside information of the Company which is significant for
the change of the price of shares and has not been disclosed to the public, to sell or purchase the
shares or persuade others to purchase, sell, make an offer, or offer for sales of the Company’s shares,
whether directly or through a broker and whether for their own or others’ interest.
In addition, the Company also prohibits the aforesaid persons and their family members from
disclosing the information which is significant for the change of the price of shares and has not been
disclosed to the public to other persons to use the information on their behalf for the benefit of the
person disclosing the information.
The Company and the SET will consider the wrongful use of inside information to sell or purchase
the securities in the Company as the sale or purchase of securities in order to speculate or create
advantages for specific groups which is a wrongful act pursuant to the law of securities and exchange.
In this regards, the Company has set a policy and informed the directors and executives of the period
during which the securities in the Company ceased to be sold or purchased, i.e. 21 days before each
of the meeting of the board of directors.
(3) Guidelines on prevention of insider trading
The Company limits access to non-disclosed data by reserving access for top-level executives
as much as possible, and disclosing the same to the Company’s staff to the extent necessary, and
informing the staff of its confidentiality and restriction on use. The Company has implemented a workplace
security system to protect data files and confidential documents. The owner of data that has not been
disclosed to the public shall instruct relevant persons to strictly observe the security process.
Moreover, the Company imposes regulations that prohibit directors, executives, employees, staff,
or persons authorized by the Company, and spouses and minor children of such person, from using
the inside information of the Company and the subsidiaries obtained in the course of their duty or
otherwise that has or may have a significant impact on the Company and the subsidiaries, for their
own or others’ business, directly or indirectly, and whether or not benefits are obtained. Those violating
the regulations will be subject to disciplinary action, including written warning, allowance cut, pay cut,
suspension without pay, or dismissal, depending on the seriousness of the violation, and may be subject
to legal punishment, on a case-by-case basis.
107
Internal Control and Risk
Management
108
Annual Report 2014
14.Internal Control and Risk Management
14.1 Board of Directors’ and Audit Committee’s Opinions on the Group’s
Internal Control System
The Board of Directors has assigned the Audit Committee to review the appropriateness and
efficiency of the internal control system, so as to ensure that the Group’s internal control system is
appropriate and adequate and complies with the internal control principles of the Committee of Sponsoring
Organization of the Treadway Commission (COSO), and covers management control, operational control,
accounting and financial control and compliance control.
Board of Directors
The Board of Directors arranges that the Internal Control Department, at the level of department,
has power and duty to conduct an independent audit and directly report the audit outcome to the
Audit Committee. The Board of Directors has prescribed the duties and responsibilities of the Internal
Control Department in the Company’s regulations. Such duties and responsibilities have already been
considered and approved by the Audit Committee.
In Audit Committee Meeting No. 4/2014, held on 4 July 2014, at which all the three Audit
Committee members were in attendance, the adequacy of the Company’s and its subsidiaries’ internal
control system was evaluated by the Audit Committee using the adequacy assessment form for internal
control system (including risk management), and information from inquiries with the management in order
to evaluate the internal control system of the Company in five areas, namely:
1. Organization Control and Environment Measures;
2. Risk Management Measures;
3. Management Control Activities;
4. Information and Communication Measures; and
5.Monitoring.
The Audit Committee and the Board of Directors were of the view that the Company had
adequate internal control system and number of personnel to efficiently comply therewith, including the
monitoring of its subsidiaries’ operations to prevent exploitation of the Company’s and its subsidiaries’
assets through improper or unauthorized use thereof by the directors or executives. The Board of Directors
was also of the view that the Company had adequate and appropriate internal control in other areas.
14.2 Operation in Relation to the Company’s Internal Control System
The Company has the Audit Committee which has the duty to review the internal control
system and internal audit system to ensure their appropriateness and efficiency, as well as to audit the
Company’s operations to ensure its compliance with the law on securities and exchange, the regulations
of the SET, and the laws relating to the Company’s business. The Audit Committee will hold meetings
at least on a quarterly basis to consider and ensure the existence of an accurate financial report as
well as complete and adequate disclosure of information, including the consideration of related party
transactions or transactions that may cause conflict of interest to ensure compliance with the laws and
regulations of the Office of the SEC and the SET.
109
Corporate Social Responsibility
110
Annual Report 2014
15. Corporate Social Responsibility
“The Group works under the “Value for Life” philosophy. The aims of the Group’s projects are
to give something back to the public and society and also to help lay the foundation of sustainability
within society
a. Music for Life Project.
The “Music for Life” project is organized by the Carabao Foundation and Carabaodang. It’s utilizes
“song and music” to add value to their lives and take most benefit ot their time to stay away from
drugs. This is achieved through a “music for life band” that truly reflects life values within society and
includes the transfer / passing of the knowledge and experience of the music industry from Aed Carabao
and Carabao band to the children and youth in order to develop their capacity to be a top musician.
This project is organized and held every year and around 500 bands comprising of young people
aged between 15 – 22 years old apply. The Facebook page, “Music For Life” has more than 1 mil ion
members. The band that wishes to be recruited has to respond with a demo recording to publications
put in the television and online media. After that, the ground committee selects the appropriate bands
before they go on to perform on stage in order to showcase their ability to the public.
The first round of the contest covers the entire nation on over 20 stages and around 100 bands
have a chance to perform on stage. A commentator will judge the contestant and also give guidance
on their music to teach them to improve and develop their musical skills for future performances.
The band that has won at the provincial level will then be given the opportunity to attend
workshop activities where Aed Carabao and the Carabao band give the benefit of their experience in
order to inspire the young bands to create great music and strengthen their capacity.
111
After the provincial competition cuts, the bands that pass through then go on to play at the
championship level, where they have an opportunity to play a concert with the Carabao band. They
must perform and show their musical ability to the public. Aed Carabao provides guidance, tactics and
musical knowledge.
There is a charity concert, “Music for life”, where bands representing each region play a concert
with Aed and the Carabao band. This is an honour and also provides invaluable experience for the
young bands. Revenue from the concert is donated to senior artists who are experiencing life problems.
112
Annual Report 2014
b. My Tambon Project.
My Tambon Project has been ongoing since it was first established in 2547 in order to create
consciousness and encourage children to conserve nature and protect the environment.
“My Tambon Project”, gives primary school students an opportunity to submit essays on “Nature
and a Good Environment, for the quality of Life in My Tambon”, sharing stories about nature and the
environment in their tambon, their pride in local values and also how to give back to their community.
The project’s objective is to instill a love of nature and the environment among young people.
The best essays each month are picked by the committee and the winning student receives an education grant worth 5000 THB and a certificate. The tambon about which the student writes receives 10000
THB to go towards nature support and environmental preservation activities. Media relations has made
this project public knowledge through online media and also running a two minute program every week
on television in order to publicize the winning essays.
113
Related Party Transactions
114
Annual Report 2014
115
• Engaging in the business of wholesale
stores and convenience stores
4. C.J. Express Group Co., Ltd.
• Engaging in the business of real estate
development
• Engaging in the business of (1)
producing and selling beer; (2) selling food
and beverages; and (3) being the owner of
Tawandang German Brewhouse
3. Tawandang German Brewery
Co., Ltd.
5. The City Co., Ltd.
• Engaging in the business of (1)
producing and selling beer; (2) selling food
and beverages; and (3) being the owner of
Tawang dang Brewhouse
2. Tawandang Brewery Co., Ltd.
16.1. Person Who May Have Conflict of Interest
Person Who May Have Conflict of
Nature of Business
Interest
1. Mongol Co., Ltd.
• Engaging in the businesses of
manufacturing and selling audio tapes, CDs
and VCDs, and composing music
16.Related Party Transactions
• One joint director, i.e. Mr. Sathien Setthasit
• Three joint shareholders, i.e. Mr. Sathien Setthasit, Mr. Veeratham
Setthasit and Mrs. Dararat Setthasit who hold 93.0%, 7.0% and 0.0% of
shares, respectively, in the City Co., Ltd.
• Two joint directors, i.e. Mr. Sathien Setthasit and Miss Nutchamai
Thanombooncharoen
• Three joint shareholders, i.e. Mr. Sathien Setthasit, Miss Nutchamai
Thanombooncharoen and Mr. Veeratham Setthasit who hold 40.0%,
40.0% and 0.0% of shares, respectively, in Tawandang German Brewery
Co., Ltd.
• Two joint directors, i.e. Mr. Sathien Setthasit and Mrs. Wongdao
Thanombooncharoen
• One joint shareholder, i.e. Mr. Sathien Setthasit who holds 30.0%
of shares in C.J. Express Group Co., Ltd.
• Two joint directors, i.e. Mr. Sathien Setthasit and Miss Nutchamai
Thanombooncharoen
• Two joint shareholders, i.e. Mr. Sathien Setthasit and Miss Nutchamai Thanombooncharoen who hold 30.0% and 15.0% of shares, respectively, in Tawandang Brewery Co., Ltd.
• One joint director, Mr. Yuenyong Opakul
• Two joint shareholders, Mr. Yuenyong Opakul and Mrs. Linjong
Opakul who hold 40.0% and 7.5% of shares, respectively, in
Mongol Co., Ltd.
Nature of Relationship With the Company
116
Annual Report 2014
1. Mongol Co.,
Ltd. (engaging in
the businesses of
manufacturing and
selling audio tapes,
CDs and VCDs,
and composing
music)
Person/Juristic
Person Who May
Have Conflict of
Interest
Nature of Transaction
•Advertising expense
CBD entered into an
agreement with Mongol
Co., Ltd. to engage Mr.
Yuenyong Opakul to be a
presenter of Carabao Dang
energy drink.
Nature of Relationship
•One joint director, Mr.
Yuenyong Opakul
•Two joint shareholders,
Mr. Yuenyong Opakul
and Mrs. Linjong Opakul
10,000,000.0
Fiscal Year
Ended 31
December
2013
Necessity and
Reasonableness
10,000,000.0 •On 1 January 2014, CBD
entered an agreement
with Mongol Co., Ltd. to
engage Mr. Yuengyong
Opakul to be a presenter
of Carabao Dang energy
drink (the same conditions
as the agreement which
the Company previously
made with Mongol Co.,
Ltd.).
Fiscal Year
Ended 31
December
2014
Transaction Value (Baht)
•This transaction supported
the Company’s normal
business operation. The
engagement was on an
arm’s-length basis.
Audit Committee’s Opinion
16.2. Related Party Transactions
Below is a summary of the related party transactions between the Group and persons who may have conflicts of interest during the fiscal year ended
31 December 2013 and 2014.
117
Person/Juristic Person
Who May Have
Conflict of Interest
•Accrued expense
Mongol Co., Ltd. is CBD’s
trade creditor as a result
of the engagement of Mr.
Yuenyong Opakul to be
its presenter:
- beginning of period
- change
- end of period
21,400,000.0
(11,400,000.0)
10,000,000.0
Necessity and
Reasonableness
•On 1 July 2014, CBD
amended the conditions
of the agreement and
entered a long-term
agreement with Mongol
Co., Ltd. Below is a
10,000,000.0 summary of its conditions.
(10,000,000.0) - CBD engages Mongol
0.0 Co., Ltd. to hire
Mr.Yuenyong Opakul to be
a presenter of Carabao
Dang energy drink as well
as other beverages and
products of CBD. The term
of the agreement is five
years, from 1 January 2014
to 31 December 2018. The
remuneration is Baht 10.0
million per annum, whereby
the payment will be made
on 31 December of every
year.
Fiscal Year
Fiscal Year
Ended 31
Ended 31
December 2013 December 2014
118
Annual Report 2014
Who May Have
Fiscal Year
Fiscal Year
Ended 31
Ended 31
- Such agreement will
be automatically renewed
for another five years,
from 1 January 2019 to
31 December 2023, with
remuneration of Baht 12.0
million per annum. CBD
has the right to adjust the
remuneration as suitable
and consistent with the
market price, as well as
to terminate the agreement if the image of Mr.
Yuengyong Opakul fails
to meet the intent of the
agreement.
Necessity and
Reasonableness
119
2. Tawandang
Brewery Co., Ltd.
(engaging in the
business of (1)
producing and
selling beer, (2)
selling food and
beverages, and (3)
being the owner
of Tawangdang
Brewhouse at No.
462/61 Rama III
Road, Chongnontri
Sub-district, Yannawa
District, Bangkok)
Who May Have
•Office rent
CBD leased an office
building from Tawandang
Brewery Co., Ltd.
•Other payable
Tawandang Brewery Co.,
Ltd. was CBD’s other payable on account of the
rent of office building:
- change
- end of period
•Two joint directors,
i.e. Mr. Sathien Setthasit
and Miss Nutchamai
Thanombooncharoen
•Two joint shareholders,
i.e. Mr. Sathien
Setthasit and Miss
Nutchamai
Thanombooncharoen
-
50,000.0
(50,000.0)
-
600,000.0
50,000.0
50,000.0
Fiscal Year
Fiscal Year
Ended 31
Ended 31
•CBD leased an office
building from Tawandang
Brewery Co., Ltd., with the
rental rate and conditions
as agreed upon between
the parties.
•CBD moved its office to
building No. 393 Silom on
1 July 2013. CBD still kept
its assets in and leased
such office building until 31
December 2013.
•After 31 December 2013,
the Group has taken step
to ensure that no future
transaction of this type will
occur.
Necessity and
Reasonableness
•This transaction was the
lease of immovable property
by CBD, with the rental rate
and conditions as agreed
upon between the parties.
However, after 31 December
2013, the Group has taken
step to ensure that no future
transaction of this type will
occur.
120
Annual Report 2014
Who May Have
•Other expenses
CBD paid the prices of
food and beverages and
gift cards to Tawandang
Brewery Co., Ltd.
•Other payable
Tawandang Brewery Co.,
Ltd. was CBD’s other
payable on account of
the prices of food and
beverages and gift cards:
- change
- end of period
1,102,890.1
26,233.0
90,058.0
116,291.0
431,301.9
58,929.0
(32,696.0)
26,233.0
Fiscal Year
Fiscal Year
Ended 31
Ended 31
•CBD entertained its
business partners, organized
sales promotion events,
and organized activities for
employees of the Group at
Tawandang Brewhouse, with
a discount of 20.0% off
food and beverages, and
with prices and commercial
terms as normally offered
to significant customers.
•CBD purchased food
and beverage gift cards
from Tawandang Brewhouse
as New Year presents for
its business partners, with
prices and commercial
terms as normally offered
to significant customers.
Necessity and
Reasonableness
•This transaction was on an
arm’s length basis. A 20.0%
discount was normally offered
to significant customers of
121
Necessity and
Fiscal Year
Fiscal Year
Reasonableness
Ended 31
Ended 31
•Two joint directors,
3. Tawandang
2,751,375.5
2,458,921.3 •CBD organized
•Other expenses
i.e. Mr. Sathien Setthasit CBD paid the cost of
German Brewery
its employees’ and
Co., Ltd. (engaging and Miss Nutchamai
executives’ New Year
its employees’ New Year
in the business of Thanombooncharoen
party, organized sales
party, organizing sales
•Three joint shareproducing and
promotion events, and
promotion events, and
holders, i.e. Mr. Sathien entertaining its business
selling beer, (2)
entertained its business
Setthasit, Miss Nutchamai partners, to Tawandang
selling food and
partners, at Tawandang
beverages, and (3) Thanombooncharoen and German Brewery Co., Ltd.
German Brewhouse, with
Mr. Veeratham Setthasit •Other payable
being the owner
a discount of 20.0% off
of Tawandang
food and beverages
Tawandang German
German Brewhouse
and with prices and
Brewery Co., Ltd. was
at No. 645, 647
commercial terms as
CBD’s other payable on
Praditmanutham
normally offered to
account of the cost of
Road, Ladprao
significant customers.
CBD’s New Year party:
Sub-district, Ladprao
56,878.2
121,549.0
District, Bangkok)
- change
64,670.8
543,385.0
- end of period
121,549.0
664,934.0
Who May Have
•This transaction was
on an arm’s-length
basis. A 20.0% discount
was normally offered
to significant customers
of Tawandang German
Brewery Co., Ltd.
Audit Committee’s
Opinion
122
Annual Report 2014
4.C.J. Express Group
Co., Ltd. (engaging
in the business of
wholesale stores and
convenience stores)
Who May Have
•Two joint directors, i.e.
Mr. Sathien Setthasit and
Mrs. Wongdao
Thanombooncharoen
•One joint shareholder,
i.e. Mr. Sathien Setthasit
Necessity and
Fiscal Year
Fiscal Year
Reasonableness
Ended 31
Ended 31
18,971,944.0
18,431,406.6 •DCM supplied Carabao
•Income from sale of
Dang energy drink to C.J.
products to C.J. Express
Express Group Co., Ltd.
Group Co., Ltd.
for sale in its convenience
DCM supplied Carabao
stores in Thailand, based
Dang energy drink to C.J.
on the same prices and
Express Group Co., Ltd. for
commercial terms as
sales in its convenience
offered on the market.
stores.
•Trade account
receivable from C.J.
Express Group Co., Ltd.
1,257,601.0
- change
1,257,601.0
1,572,001.2
- end of period
1,257,601.0
2,829,602.2
•Other receivable from
C.J. Express Group Co.,
Ltd.
Ltd. was DCM’s other
receivable on account of
DCM’s office equipment
- change
31,487.0
- end of period
31,487.0
a normal business
transaction of DCM, and
was on an arm’s-length
basis.
Audit Committee’s
Opinion
123
Who May Have
Necessity and
Fiscal Year
Fiscal Year
Reasonableness
Ended 31
Ended 31
170,683.9
146,695.3 •DCM paid sales
•Sales promotion
promotion expenses to
expenses
DCM paid sales promotion
Ltd. for organizing a sales
expenses to C.J. Express
promotion campaign
Group Co., Ltd.
and preparing public
•Other payable
relations leaflets, based
on the same prices and
Ltd. was DCM’s other
commercial terms as ofpayable on account of
fered on the market.
DCM’s sales promotion
expense
7,892.0
- change
7,892.0
66,861.0
- end of period
7,892.0
74,753.0
a normal business
transaction of DCM, and
was on an arm’s-length
basis.
Audit Committee’s
Opinion
124
Annual Report 2014
Who May Have
•Office rent and service
CBD leased an office
space on 5th and 6th
floor of the 393 Silom
Building to C.J. Express
Group Co., Ltd. to use as
its office.
•Other payable
Ltd. was CBD’s other
payable on account of
CBD’s office rental deposit
- change
- end of period
3,410,662.5
988,200.0
988,200.0
-
-
Fiscal Year
Fiscal Year
Ended 31
Ended 31
Audit Committee’s
Opinion
the lease of immovable
property by CBD, with
the rental rate and
conditions based on
the same rates and
conditions as offered on
the market.
Necessity and
Reasonableness
•C.J. Express Group Co.,
Ltd. leased office space
on 5th and 6th floor
for total space of 1,098
square meters in the
building owned by CBD
to use as its office at the
rental rate with service
fee included of Baht
450.0 per square meter
whereby such rental rate
and conditions are based
on the same rates and
conditions as offered on
the market. Rental rates
with service fee included
of the buildings in the
nearby area are between
Baht 400.0-480.0 per
square meter.
125
5.Mr. Sathien
Setthasit
Who May Have
•A director and
majority shareholder of
the Company
•Interest received
•Accrued interest
receivable
•Loan debtor
DCM extended a loan to
- loans drawn during the
period
- payment during the
period
- end of period
(329,000,000.0)
2,031,484.9
-
(220,000,000.0)
329,000,000.0
12,815,060.3
5,780,731.5
329,000,000.0
549,000,000.0
-
Fiscal Year
Fiscal Year
Ended 31
Ended 31
•DCM extended a loan
to Mr. Sathien Setthasit,
with interest at 4.3% per
annum.
•On 31 March 2014,
repaid such loan.
•The Group will ensure
that no future transaction
of this type will occur.
Necessity and
Reasonableness
financial assistance to
the director. Interest was
charged at the rate
of 4.3% per annum.
However, the Group will
ensure that no future
transaction of this type
will occur.
Audit Committee’s
Opinion
126
Annual Report 2014
16.3 Guarantees and Mortgages
Below is a summary of the guarantees and mortgages between the Company and its subsidiaries and the
year ended 31 December 2014.
For the Fiscal Year
Ended
31 December 2014
Credit Limit
Nature
of
Relationship
Details
of
Credit
Limit
Guarantor
(Million Baht)
Recipient
Available
Used
Limit
Amount
375.0
1. CBD
• The City Co., • One joint director, i.e. • Short-term promissory
Ltd. (engaging
note in the amount
in the business
• Three joint shareholders, of Baht 350.0 million,
of real estate
i.e. Mr. Sathien Setthasit, overdraft in the
development)
Mr. Veeratham Setthasit amount of Baht 5.0
and Mrs. Dararat Setthasit million, and letter
of guarantee in the
amount of Baht 20.0
million
200.0
• Long-term loan in
the amount of Baht
200.0 million
2. Directors,
• The Group
• Directors and
2,000.0
shareholders
the amount of Baht
shareholders of the
and related
2.0 bil ion, due on 30
Company
persons
November 2015
• The long term loan
balance was paid
in November 2014
and the account was
automatically closed
• This transaction has
already taken place.
After this listing on the
Exchange, the Group will
ensure that there will not
be any such transaction
in the future.
• This transaction has
already taken place,
and was necessary for
and beneficial to the
Company’s business
operation. No fee was
charged for such guarantee
and mortgage.
• CBD provided a
guarantee for the full
amount in the name of
the juristic person.
• The guarantee was
discharged on 30 April
2014.
• Mr. Sathien Setthasit
and Miss Nutchamai
Thanombooncharoen
provided a guarantee in
their personal capacity.
• All personal guarantees
were revoked in
November 2014
Details of Guarantee/ Audit Committee’s Opinion
Mortgage Collateral
persons who may have conflict of interest for the fiscal
127
Guarantor
Credit Limit
Recipient
For the Fiscal Year
Ended
31 December 2014
Nature of Relationship Details of Credit Limit
(Million Baht)
Mortgage Collateral
Available
Used
Limit
Amount
265.0
- • Mr. Sathien Setthasit
the amount of Baht
and Miss Nutchamai
265.0 mil ion, due on 21
Thanombooncharoen
February 2022
381.0
- their personal capacity.
the amount of Baht
• The bank is in the
381.0 mil ion, due on 28
process of personal
March 2022
guarantees cancellation.
• The long term loan
balance was paid in
November 2014 and
the account was
automatically closed.
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Guarantor
Credit Limit
Recipient
For the Fiscal Year
Ended
31 December 2014
Nature of Relationship Details of Credit Limit
(Million Baht)
Mortgage Collateral
Available
Used
Limit
Amount
985.1
40.05 • Mr. Sathien Setthasit and
• Overdraft in the
amount of Baht 30.0
Miss Nutchamai Thanommillion; letter of credit,
booncharoen provided a
trust receipt and
guarantee in their personal
long-term loan in the
total amount of Baht
capacity.
700.0 million; letter of
The bank is in the process
credit, trust receipt,
of personal guarantees
letter of guarantee,
cancellation.
domestic letter of
credit and note in
the total amount of
Baht 164.0 million;
letter of guarantee
in the amount of
Baht 56.0 million, and
foreign exchange
agreement in the
amount of Baht 35.1
million
• All short term loan
balances were paid
in November 2014.
The remaining THB
40.05 million is only
the Bank Guarantee
balance.
129
Guarantor
Credit Limit
Recipient
• Promissory note and/
or letter of credit and/
or trust receipt in the
amount of Baht 240.0
mil ion, overdraft in
the amount of Baht
25.0 mil ion, and letter
of guarantee in the
amount of Baht 6.0
mil ion
• All short term loan
balances were paid in
November 2014. The
remaining THB 2.51
mil ion is only the Bank
Guarantee balance.
Details of Credit Limit
For the Fiscal Year
Ended
31 December 2014
(Million Baht)
Mortgage Collateral
Available
Used
Limit
Amount
271.0
2.5 • Mr. Sathien
Setthasit and
Miss Nutchamai
Thanombooncharoen
their personal capacity.
• All personal
guarantees were revoked
in November 2014.
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Guarantor
Credit Limit
Recipient
Nature of
Relationship
• Promissory note in the
amount of Baht 300.0
mil ion
the amount of Baht
200.0 mil ion
• Promissory note in
the amount of Baht
300.0 mil ion, overdraft
in the amount of Baht
5.0 mil ion, foreign
exchange agreement
in the amount of Baht
200.0 mil ion, and letter
of guarantee in the
amount of Baht 5.0
mil ion
• Promissory note in
300.0
200.0
- • Mr. Sathien Setthasit provided
a guarantee in his personal
capacity.
• The personal guarantee by Mr.
Sathien Setthasit was revoked in
November 2014.
- • Mr. Sathien Setthasit,
Mr. Veeratham Setthasit, Mr.
Romtham Setthasit, Miss Thientham
Setthasit and Miss Nutchamai
Thanombooncharoen provided a
guarantee in their personal
capacity, along with the
mortgage of the land and
structure owned by Mr. Sathien
For the Fiscal Year
Ended
31 December 2014
Details of Guarantee/Mortgage Audit Committee’s Opinion
(Million Baht)
Collateral
Available
Used
Limit
Amount
510.0
- • Mr. Sathien Setthasit and Miss
Nutchamai Thanombooncharoen
provided a guarantee in their
personal capacity.
• The bank is in the process of
personal guarantees cancellation.
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Guarantor
Credit Limit
Recipient
Nature of
Relationship
For the Fiscal Year
Ended
31 December 2014
(Million Baht)
Available
Used
Limit
Amount
Setthasit, i.e. land under Title
Deed No. 56610 in Lamsai
Sub-district, Lamlukka District,
Pathumthani Province and land
under Title Deed No. 86874 in
Laksong Sub-district, Nongkham
District, Bangkok, as well as the
mortgage of three condominium
units owned by Mr. Veeratham
Setthasit, Mr. Romtham
Setthasit and Miss Thientham
Setthasit, respectively, i.e. units No.
17/40 -17/42 on Floors 21 and 22,
building No. 1, Le Raffin Jambu
Dvipa, Condominium Registration
No. 22/2551, in Klongton Nua
Sub-district, Vadhana District,
Bangkok.
• The bank is in the process of
personal guarantees cancellation.
Details of Guarantee/Mortgage Audit Committee’s Opinion
Collateral
16.4 Necessity and Reasonableness of the Related Party Transactions
Audit Committee Meeting No. 2/2014 and No. 1/2015, held on 27 May 2014 and 25 February
2015 respectively, considered the Company’s related party transactions for the fiscal year ended 31
December 2013 and 2014 as well as information obtained from the Company’s management, reviewed
the information in the notes to financial statements audited by the Company’s auditor, and was of the
view that these related party transactions for the fiscal year ended 31 December 2013 and 2014 were
for the Company’s normal business operation and on an arm’s-length basis.
16.5 Related Party Transaction Approval Measures or Process
Board of Directors Meeting No. 4/2014, held on 29 May 2014, has considered and approved the
related party transaction approval policy and process in order to ensure that related party transactions
between the Group and persons or juristic persons who may have conflict of interest are transparent
and in the interest of the Company. Below is a summary of such policy and process.
The Group’s related or connected transactions must be in accordance with the rules under the
Securities and Exchange Act, Notification of the Capital Market Supervisory Board No. TorChor. 21/2551
re: Rules on Connected Transactions, and Notification of the Board of Governors of the Exchange re:
Disclosure of Information and other Acts of a Listed Company Concerning Connected Transactions,
including the relevant rules of the Office of the SEC and/or the SET. These transactions are also subject
to compulsory disclosure in the notes to financial statements audited by the Company’s auditor and
the annual registration statement (form 56-1).
If the law provides that the Company must obtain approval from its board meeting or shareholders
meeting before entering a related party transaction, the Company must cause its Audit Committee to
audit and give an opinion on such transaction. The Audit Committee’s opinion will be submitted to the
Company’s board meeting or shareholders meeting, as the case may be, in order to ensure that the
proposed transaction is in the best interest of the Company.
If there are related party transactions between the Group and persons who may have interest
or conflict of interest, either for the time being or in the future, the Audit Committee will provide an
opinion on the necessity of these transactions and the reasonableness of their prices, based on various
conditions according to the nature of normal business operation in the industry and a comparison with
third-party or market prices. If the Audit Committee has no expertise on any related party transaction
that may take place, the Company may ask an independent specialist or the Company’s auditor
to provide an opinion on such related party transaction to support decision-making by the Board of
Directors, the Audit Committee, or shareholders, as the case may be. Directors who have an interest
in such transactions may not vote thereon. Related party transactions must also be disclosed in the
notes to financial statements audited or reviewed by the Company’s auditor.
In principle, management may approve these transactions if they are on an arm’s-length basis
132
Annual Report 2014
and free of their influence in their capacity as directors, executives or related persons, provided that
the Company must prepare a summary report on these transactions and make a report to the next
board meeting.
16.6 Policy on or Likelihood of Future Related Party Transactions
After the public offering of shares in the Company, connected transactions or transactions between
the Group and persons who may have interest or conflict of interest, either for the time being or in
the future, must be in accordance with the applicable rules of the SET or the SEC.
If the Company wishes to enter any connected or related party transactions between the
Group and persons who may have interest or conflict of interest either for the time being or in the
future, the Company must strictly adhere to the foregoing policy and process. The Audit Committee wil
provide guidelines for the consideration of these transactions, based on their necessity for the Company’s
operation, the prices of comparable transactions made with third parties (if any), and the significance
of the transaction sizes.
If the Company will enter a related party transaction, the Company will cause its Audit Committee
to provide an opinion on the reasonableness of such transaction. If the Audit Committee has no expertise
on the transaction, the Company will seek an opinion from a knowledgeable person or specialist, such
as an independent auditor or valuer. The opinion of the Audit Committee or such knowledgeable person
or specialist will be used to support decision-making by the Board of Directors or shareholders, as the
case may be, so as to ensure that such transaction is not a manipulation or transfer of benefits by
the Company or its shareholders, but is in the best interest of all shareholders.
133
Financial Status and the
Company Performance
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Annual Report 2014
17. Financial Status and the Company Performance
17.1 Financial Statements
Summary of the auditor’s report
The auditor’s report in 2014 was audited by Mr. Wichart Lokatekrawee from EY Office Limited
who gave an opinion that the financial statements present fairly, in all material respects, the financial
position of Carabao Group Public Company Limited and its subsidiaries and of Carabao Group Public
Company Limited as at 31 December 2014, and their financial performance and cash flows for the year
then ended, in accordance with Thai Financial Reporting Standards
17.2 The auditor’s fee
• Audit fee
The company and subsidiaries pay audit fee baht 2,770,000 in 2014.
• Other fees
Other fees are baht 3,692,500
135
17.3 Financial highlight
Statement of financial position
(Unit : Thousand Baht)
Consolidated financial statement
2014
2013
2012
528,084
900,100
308,444
317,990
65,282
2,119,901
485,566
250,784
329,000
205,597
43,883
1,314,830
500,244
221,783
274,633
41,965
1,038,625
7,567
135,661
4,753,772
17,343
25,409
3,859
4,943,611
7,063,511
7,420
139,033
3,798,727
11,330
33,4556
4,953
3,994,919
5,309,749
3,116,386
12,804
9,499
2,262
3,140,951
4,179,576
Assets
Current Assets
Cash and cash equivalents
Current investment
Trade and other receivables
Short-term loans to related parties
Inventories
Other current assets
Total current assets
Non-current Assets
Restricted bank deposits
Investment properties
Property , plant and equipment
Intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
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Annual Report 2014
2014
2013
2012
Liabilities and shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans from financial
institutions
Trade and other payables
Current portion of long-term loans
Current portion of liabilities under finance lease
agreements
Income tax payable
Liabilities under cross currency interest rate swap
contracts
Other current liabilities
Total current liabilities
Non-current liabilities
Long-term loans - net of current portion
Liabilities under finance lease agreements - net of
current portion
Provision for long-term employee benefits
Deposits received for rental
Total non-current liabilities
Total liabilities
797,133
-
664,247
970,055
174,000
508,173
877,769
116,000
105,294
111,397
13,702
31,615
30,444
38,290
971,162
40,704
71,953
2,032,356
17,352
25,294
1,589,905
-
2,074,674
1,884,000
52,914
10,814
63,728
1,034,891
46,756
8,231
2,129,661
4,162,017
11,837
32,839
1,928,676
3,518,581
137
2014
2013
2012
Liabilities and shareholders’ equity (Con’t)
Shareholders’ equity
Share capital
Registered
Issued and fully paid up
Share premium
Retained earnings (deficit)
Appropriated - statutory reserve
Retained earnings before business restructuring
Retained earnings (deficit) - Unappropriated
Other components of shareholders’ equity
Surplus on business combination under common
control
Surplus on change in percentage of
shareholding in a subsidiary
Equity attributable to owners of the Company
Non-controlling interrest of the subsidiaries
Total shareholders’ equity
Total liabilities and shareholders’ equity
138
Annual Report 2014
1,000,000
1,000,000
3,962,980
620,000
620,000
-
265,000
265,000
-
51,000
582,466
(330)
244,205
-
323,216
323,216
-
108,959
6,028,621
6,028,621
7,063,511
942,886
204,846
1,147,732
5,309,749
509,205
151,790
660,995
4,179,576
Income Statement
Sales
Other income
Total revenues
Cost of sales
Selling expenses
Administrative expenses
Other expenses
Total expenses
Priofit before Income tex expenses
Finance cost
Profit before become tax expenses
Income tax expanses
Profit fot the year
Profit attributation to
Equity holders of the Company after business
restructuring
Equity holders of the Company before business
restructuring
Non-controlling interrest of the subsidiaiaries
Basic earnings (loss) per share
Profit (Loss) after business restructuring
Profit before business restructuring
Weighted average number of ordinary shares (share)
Consolidated
2014
7,448,434
126,209
7,574,643
financial statement
2013
2012
6,862,949
4,963,226
66,468
45,442
6,929,417
5,008,668
4,938,649
972,852
301,737
6,213,239
1,361,404
(111,622)
1,249,782
(238,130)
1,011,653
4,793,115
955,775
225,950
32,645
6,007,485
921,932
(136,404)
785,528
(159,080)
626,448
3,502,232
1,039,825
182,750
17,352
4,742,159
266,509
(16,684)
249,825
(62,031)
87,794
913,142
(330)
-
98,511
1,011,653
512,401
114,377
626,448
140,871
46,923
187,794
1.22
749,616
(0.0008)
1.19
429,164
0.65
16,781
139
Statement of Cash Flows
Net
Net
Net
Net
140
cash flows from operating activities
cash flows used in investing activities
cash flows from financing activities
increase (decrease) in cash and cash equivalets
Annual Report 2014
2014
2013
2012
793,223
989,940
463,904
(1,685,609) (1,248,827) (2,836,027)
934,904
244,209 2,639,097
42,518
(14,678)
266,974
Important Financial Ratio
Liquidity Ratio
Current ratio
Quick ratio
Cash flow liquidity ratio
Account receivables turnover ratio
Collection period
Inventory turnover ratio
Average day sales
Account payables turnover ratio
Payment period
Cash cycle
Profitability Ratio
Gross profits
Operating profits
Other profits
Cash to earning
Net profits
Efficiency Ratio
Earnings per share (EPS)
Return on assets
Return on fixed assets
Assets cycle
Financial Policy Ratio
Debts to equity ratio
Interest Bearing Debt to Equity
Interest coverage ratio
EBITDA Coverage Ratio
Dividend payout ratio
2014
2013
2012
Time
Time
Time
Time
Day
Time
Day
Time
Day
Day
2.2
1.8
0.5
29.1
12.4
18.9
19.1
8.6
41.9
(10.4)
0.6
0.4
0.5
32.2
11.2
20.0
18.0
8.5
42.5
(13.3)
0.7
0.5
0.4
17.2
21.0
18.8
19.1
7.9
45.6
(5.5)
%
%
%
%
%
33.7%
16.6%
1.7%
64.2%
13.4%
30.2%
12.9%
0.5%
111.5%
9.0%
29.4%
4.8%
0.6%
194.6%
3.7%
%
%
%
Time
28.2%
16.4%
26.9%
1.2
69.3%
13.2%
20.8%
1.5
31.1%
6.8%
15.2%
1.8
Time
Time
Time
Time
%
0.2
0.0
10.1
0.2
60.0%
3.6
2.5
9.1
0.6
-
5.3
3.8
36.3
0.2
-
141
Operating Results of the year ended 31 December 2013 and 2014
For the year ended 31 December 2013 and 2014, the Group’s total revenues amounted to Baht
6,929.4 mil ion and Baht 7,574.6 million, respectively, an increase of Baht 645.2 million or 9.3% with the
main reasons as specified below.
(1) The Group’s domestic sales of Carabao Dang amounted to Baht 5,310.9 million and Baht
5,276.0 million, respectively, a decrease of Baht 34.9 million or 0.7%. The decrease in domestic
sales of Carabao Dang was mainly due to a decrease in sales volume through traditional
trade as, during such period, consumers reduced their spending, resulting from the unrecovered
economic conditions as a consequence of the political instability in the first half of 2014.
(2) The Group’s overseas sales of Carabao Dang amounted to Baht 1,552.0 million and Baht
2,090.6 million, respectively, an increase of Baht 538.6 million or 34.7%. Such increase in sales
was mainly due to the growth in overseas sales volume of products in the Group’s existing
overseas markets, especially, Cambodia, Myanmar and Vietnam. This growth was in line with
the Group’s strategy to expand their export markets to the CLMV region.
(3) For the year ended 31 December 2014, the Group’s sales of Start Plus amounted to Baht
81.8 million. Start Plus is the Group’s electrolyte drinks, the sales of which began in Thailand
in May 2014.
(4) The Group’s other income amounted to Baht 66.5 mil ion and Baht 126.2 mil ion, respectively, an
increase of Baht 59.7 million or 89.8 %. Such increase was mainly due to (1) an increase in
retal and service income of Baht 25.0 million from the rent of office space in the Group’s
head office building which began in August 2013, (2) an increase in profit from asset sales
of Baht 8.5 million which was a result of the Group’s sale of inutilized inventory and assets
to third parties, (3) profit from changes in fair value of cross currency and interest rate
swap contracts of Baht 10.3 million which was a result of the Group’s prevention of risk
from US Dollar currency and interest of long-term loan from financial institutions by entering
into cross currency and interest rate swap contract with a financial institution and (4) an
increase in profit from currency exchange of Baht 21.5 million which was mainly due to the
Group’s gradual change of borrowed foreign currencies to Thai Baht pursuant to terms and
conditions under the loan agreements. Such loans are in a form of trust receipt which is
used for purchasing equipment and machinery of APG from abroad.
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Annual Report 2014
For the year period ended 31 December 2013 and 2014, the Group’s gross profit amounted
to Baht 2,069.8 million and Baht 2,509.8 million, respectively, an increase of Baht 440.0 million or 21.3%.
The gross profit margin amounted to 30.2% and 33.7%, respectively. The Group’s change in gross profit
margin was mainly due to the reasons set out below.
Domestic
market – The Group’s domestic gross profit amounted to Baht 1,529.8 mil ion
and Baht 1,785.7 million, respectively, an increase of Baht 255.9 million or 16.7%. The gross
profit margin amounted to 28.8% and 33.3%, respectively. The increase in gross profit and
gross profit margin resulted from improved average selling price compared to last year
and decreased costs of raw materials and packaging per unit.
Overseas
market – The Group’s overseas gross profit amounted to Baht 539.9 mil ion and
Baht 724.1 million, respectively, an increase of Baht 184.2 million or 34.1%. The gross profit
margin has seen a slight decrease of 2 point from 34.8% to 34.7%.
For
the year periods ended 31 December 2013 and 2014, the Group’s net profit amounted
to Baht 626.4 million and Baht 1,011.7 million, respectively, an increase of Baht 385.2 mil ion
or 61.5%. The net profit margin amounted to 9.0% and 13.4%, respectively. In 2014, the
Group’s net profit increased significantly. Such significant growth of net profit was mainly
due to (1) increased gross profit and gross profit margin and (2) significant increased
rental and service income. (3) The ratio of costs of sales and administrative expenses to
total revenue of the Group decreased from last year. Moreover, the Group had lower
financial costs due to decreased loan from financial institutes from the loan repayment
in December 2014.
Financial Condition of the year period ended 31 December 2014
For the fiscal year ended 31 December 2013 and 2014, the Group’s total assets amounted to
Baht 5,309.7 million and Baht 7,063.5 million, respectively, an increase of Baht 1,753.8 million or 33.0%.
The increase in total assets was mainly a result of:
1. the increase of cash, cash equivalents and temporary investment due to gain from IPO.
2. an increase in property, plant and equipment from an investment in (1) net
machinery, factory equipment, tools and equipment used in support of manufacturing process of amber
glass bottles, Carabao Dang and Start Plus, the construction of APG’s amber glass bottle manufacturing
factory and CBD’s Carabao Dang manufacturing and bottling line expansion and (2) net buildings and
buildings improvement from the investment in APG’s amber glass bottle manufacturing factory and CBD’s
warehouse.
143
For the fiscal year ended 31 December 2013 and 2014, the Group’s total liabilities amounted to
Baht 4,162.0 mil ion and Baht 1,034.9 million, respectively, a decrease of Baht 3,127.1 million or 75.1%.
For the year period ended 31 December 2014, the Group’s liabilities were primarily comprised of (1)
trade and other payables decreased from last year, (2) no outstanding balance of both short-term and
long-term loans from the loan repayment in December 2014.
For the fiscal year ended 31 December 2013 and 2014, the Group’s shareholders’ equity
amounted to Baht 1,147.7 million and Baht 6,028.6 million, respectively, an increase of Baht 4,880.9 mil ion
or 425.3% from increase in share capital.
17.4 Key drivers which could affect future operations and
financial status
144
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Annual Report 2014
and its subsidiaries
Report and consolidated financial statements
For the year ended 31 December 2014
145
Independent Auditor’s Report
To the Shareholders of Carabao Group Public Company Limited
I have audited the accompanying consolidated financial statements of Carabao Group Public
Company Limited and its subsidiaries, which comprise the consolidated statement of financial position
as at 31 December 2014, and the related consolidated statements of income, comprehensive income,
changes in shareholders’ equity and cash flows for the year then ended, and a summary of significant
accounting policies and other explanatory information, and have also audited the separate financial
statements of Carabao Group Public Company Limited for the same period.
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 judgement,
including the assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the
entity’s preparation and fair presentation of the financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by management, as
well as evaluating the overall presentation of the financial statements.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a
basis for my audit opinion.
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Annual Report 2014
Opinion
In my opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of Carabao Group Public Company Limited and its subsidiaries and of Carabao Group
Public Company Limited as at 31 December 2014, and their financial performance and cash flows for the
year then ended, in accordance with Thai Financial Reporting Standards.
Emphasis of matters
I draw attention to Note 1.2 to the financial statements. Before the restructuring Carabao Tawandang
Co., Ltd., Tawandang DCM Co., Ltd and Asia Pacific Glass Co., Ltd. were under the common control of a
group of shareholders, most of whom subsequently established Carabao Group Public Company Limited for the
purpose of holding shares in all three companies. Following the restructuring, most of these shareholders continue
to exercise control over the group of companies through their shareholdings in Carabao Group Public Company
Limited. The restructuring is therefore considered to be a restructuring under common control. The presentation
of consolidated financial statements for the year ended 31 December 2013, for comparative purpose, reflects
the financial position, operating results and cash flows of the group of companies under common control on
the basis of economic substance, as if the companies had operated as a single economic entity since 1
January 2013, even though the form of the legal relationship of the companies was established subsequent to
1 January 2013. I do not qualify my opinion with respect to this matter.
Wichart Lokatekrawee
Certified Public Accountant (Thailand) No. 4451
EY Office Limited
Bangkok: 26 February 2015
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Report of the Audit Committee
The Audit Committee of Carabao Group Public Company Limited as appointed by the Board
of Directors consists of three independent directors, namely, Mrs. Saowanee Kamolbutr, Chairman of
the Audit Committee, Mr. Boonnaris Suwannapool and Mr. Distorn Vajarodaya, (replacing Mr.Preecha
Songwattana who tendered his resignation from the Audit Committee), Audit Committee members.
The Audit Committee members are considered by the Company to be qualified, knowledgeable
and experienced persons. Their qualifications fully comply with the requirements of the Company’s
Charter of Audit Committee.
In 2014, 8 meetings were held by the Audit Committee. The record of meeting attendance is as
follow:
8 of 8 meetings
8 of 8 meetings
3. Mr.Preecha Songwattana
2 of 3 meetings
3 of 5 meetings
The Audit Committee has performed its task upon roles and responsibilities entrusted by the
Board of Directors with its expertise and independence to access all information as stated in the
Stock Exchange of Thailand (SET)’s requirements. The Audit Committee also provides advice in
related matters through sound collaboration with the management, internal auditor and the Company’s auditor.
The followings are principal performances carried out by the Audit Committee in 2014 :
1. To review the quarterly financial statements and the 2014 financial statements
1.1 The Audit Committee inquired and received explanations concerning the accuracy of
financial statements and the adequacy of information disclosure from executives and auditor. It
agreed with the auditor that the financial statements fairly presented the Company’s financial
positions in all material aspects and were reliable in accordance with the Generally-Accepted
Accounting Principles (GAAP).
1.2 Furthermore, a joint meeting was held between the Audit Committee and the statutory
auditors in compliance with the Practice Guidance issued by the Stock Exchange of Thailand,
allowing both parties to discuss any issue of interests to the two sides without participation of the
Management.
2. To review and express opinions regarding connected transactions or those with possible conflict
of interest
The Audit Committee found that transactions undertaken by the Company were reasonable and
208
Annual Report 2014
done for the best interest of its business. Besides, they were transparent with related information
fully and accurately disclosed.
3. To review the internal auditing
The Audit Committee examined missions, scopes of work, roles and responsibilities and independence
of the Internal Audit Department to ensure that they accorded with the internal auditing guidelines
of the SET. The Audit Committee also approved appointments of both the Internal Audit Department’s
manager and secretary to the Audit Committee. The Committee was of the opinion that the
Company indeed had adequate and appropriate internal audit system
4. To review operation information and internal control
This refers to attempts to assess adequacy and effectiveness of the internal control system to
ensure that the business objective can be fulfilled. The assessment therefore was done by reviewing
an internal audit report based on an approved action plan covering the Company’s major operation. So far, no material defect has been found. The Company indeed had proper mechanisms
to oversee its property, to comply with the laws on securities and exchange, the SET’s requirements and other laws and regulations relating to its business, to grant authorization and approval
based on required criteria that corresponded to best practices on internal control, to materialize
transparent corporate governance and, finally, to effectively adapt to changing circumstances.
5. To review auditor’s performance and to appoint auditor
The Audit Committee reviewed the auditor’s performance based mainly on his/her reliability,
competency and advice on accounting standards, auditing and certifying given in a timely fashion
before proposing to the Board who will subsequently seek approval from the Shareholders’ Meeting.
As such, the Committee has proposed Mr. Wichart Lokatekrawee or Ms. Kamontip Lertwitworatep
or Ms. Siriwan Surathepin of Ernst and Young Office Limited as the Company’s auditor and also
proposed annual audit fee in 2014.
In short, having thoroughly performed its tasks as defined in the Audit Committee’s Charter
approved by the Board of Directors, the Audit Committee is of the view that the Company fairly
reported its financial information and operation. It not only had an internal control system and
internal auditing in place but it also complied with relevant laws, rules and regulations. Connected transactions were duly disclosed and the Company’s performance indeed corresponded with
corporate governance (CG) practice in an adequate, transparent and reliable manner. Besides,
the Company constantly refined its operation for a better quality and to reflect evolving business
environment.
Mrs. Saowanee Kamolbutr
Chairman of the Audit Committee
209
Report of the Risk Management Committee
The Risk Management Committee of Carabao Group Public Company Limited as appointed by the Board of Directors to oversee the efficiency of the Company’s risk management. The
Committee consists of 7 members, who are also board members and the executives from various
departments as follows:
1.Mrs. Saowanee Kamolbutr
Chairman
2.Miss. Nutchamai Thanombooncharoen
Vice Chairman
3.Mrs. Wongdao Thanombooncharoen
Director
4.Mr. Kamoldist Smuthkochorn
Director
5.Mr. Paiboon Kujareevanich
Director
6.Mr. Anupong Pongsuwana
Director
7.Mr. Surasak Prokkati
Director
The Risk Management Committee performs duties entrusted by the Board of Directors, within
the purview of power and responsibility as defined in the Risk Management Committee Charter.
During the year 2014, the Committee held four meetings with the following results:
1. Prepare the risk management policy and prepare risk management plan by evaluating from
the risk factors that might affect the operation of the Company. Develop risk management system
that covers all aspect of the organization. Prepare risk management plan for all levels by brainstorming with the executives, as well as the employees from various departments.
2. Encourage the executives and the employees to realize the significance of the risk management, and minimize those risks that might obstruct the personnel to reach their goals. Support
and push forward the plan of risk management for all levels of the organization, include it in the
policy, and make it the organizational culture.
3. Follow up on the progress of risk management in related divisions, and constantly arrange the
risk evaluation.
4. Reported regularly to the Board of Directors on the significant risks and their responses.
5. Review the significant risks and develop efficient risk management system and supervise the
appropriate risk management for the Company.
6. Proposed the necessary appointment on the Committee and related person for the achievement
of corporate objectives.
According to the issues and tasks mentioned above, the Risk Management Committee has
considered that the corporate risk factors have been set-up, covering the core businesses and the
risk management method, have also been identified adequately, appropriately and efficiently. In
addition, these complied with the good corporate governance principles, the internal control, as
well as related laws, rules and regulations.
Mrs. Saowanee Kamolbutr
Chairman of the Risk Management Committee
2014
210 Annual Report
Attachment 1. Details of the Directors, Executives, Controlling Persons and Company Secretary
1. Mr. Sathien Setthasit / Chairman of the Board of Director and Chief Executive Officer
Age(years)
60
-B.A. (Political Science), Sukhothai Thammathirat Open University
Educational
-Director Accreditation Program (DAP), Institute of Directors (IOD)
Qualifications/Training
34.30 (Included Sathientham Holding and Northend)
Percentage of
Shareholding in the
Company
-NoneFamily Relationship
Among Directors and
Executives
Work Experiencew
2014 – Present Chainman of the Board of Directors
Chairman of the Executive Committee, Chairman of the
Nomination and Remuneration Committee, and Chief
Executive Officer Carabao Group Public Company Limited
2014 – Present Chairman of the Board of Directors
Asia Pacific Glass Co., Ltd
2002 – Present Director /Chairman of the Board of Directors
2. Miss Nutchamai Thanombooncharoen / Director and Managing Director
Age(years)
52
Educational
-B.A. (Social Sciences), Silpakorn University
-M.A. (Commerce and Accountancy), Thammasat University
-Director Certification Program (DCP), Institute of Director (IOD)
-Financial Statements for Directors (FSD), Institute of Directors (IOD)
-Risk Management Committee Program (RMP, Institute of Directors (IOD)
24.00 (Specifically for Miss Nutchamai Thanombooncharoen)
Percentage of
Shareholding in the
Company
Elder sister of Mrs. Wongdao Thanombooncharoen
Family Relationship
Among Directors and
Executives
Work Experience
2014 - Present Vice Chairman of the Executive Committee, Vice Chairman
of the Risk Management Committee, Member of the
Nomination and Remuneration Committee, and Managing
Director Carabao Group Public Company Limited
2014 - Present Vice Chairman of the Board of Director
211
2013 - Present
2013
2012
2002
2002
1999
-
Present
Present
Present
2013
Present
1999 - Present
Age(years)
Educational
Percentage of
Shareholding in the
Company
Family Relationship
Among Directors and
Executives
Work Experience
Vice Chairman of the Board of Director
Managing Director Carabao Tawandang Co., Ltd.
Managing Director Tawandang DCM Co., Ltd.
Director Carabao Tawandang Co., Ltd.
Deputy Managing Director Carabao Tawandang Co., Ltd.
Director and member of the Executive Committee
Director and member of the Executive Committee
/ Director
60
-Honorary Doctorate (Liberal Arts), Bangkok Thonburi University
-Honorary Doctorate (Thai Popular Music), Thammasat University
-Director Accreditation Program (DAP) Institute of Directors (IOD)
14.15 (included Mrs. Linjong Opakul - wife)
-None2014 - Present Senior Deputy Managing Director
2014 - Present Director Asia Pacific Glass Co., Ltd.
2014 - Present Director Tawandang DCM Co., Ltd.
2013 - Present Director Carabao Group Public Company Limited
2002 - Present Director Carabao Tawandang Co., Ltd.
2002 - Present Director and Senior Deputy Managing Director
4. Mr. Paiboon Kujareevanich / Director
Age(years)
57
-B.A. (Commerce and Accountancy), Chulalongkorn University
Educational
-M.B.A., Thammasat University
-Director Accreditation Program (DAP) Institute of Directors (IOD)
-NonePercentage of
Shareholding in the
Company
Among Directors and
Executives
212
Annual Report 2014
Work Experience
2014 - Present
2014 - Present
2014 - Present
2014 - Present
2007 - 2013
Director, member of the Executive Committee, Deputy
Managing Director, Accounting and Finance and
Company Secretary Carabao Group Public Company
Limited
Director and Deputy Managing Director, Accounting and
Finance. Carabao Tawandang Co., Ltd.
Finance. Asia Pacific Glass Co., Ltd.
Finance. Tawandang DCM Co., Ltd.
Deputy Managing Director and Company Secretary
Oishi Group Public Company Limited
5. Mrs. Saowanee Kamolbutr / Chairman of Audit Committee and Independent Director
Age(years)
62
-B.A. in Political Science (Public Administration), Thammasat University
Educational
-M.A. in Political Science (Public Administration, Thammasat University
-Certificate, National Defence College of Thailand
-Certificate (Class 7), Top Management Program, Capital Market Academy
-Senior Executive Program Kellogg – Sasin Graduate Institute of Business
Administration of Chulalongkorn University
-The Management Development, Wharton School
-Director Certification Program (DCP), Institute of Directors (IOD), Class 69
-Role of the Compensation Committee (RCC), Institute of Directors (IOD)
-Role of the Chairman Program (RCP), Institute of Directors (IOD)
-Financial Institutions Governance Program (FGP), Institute of Directors (IOD)
Percentage of
-NoneShareholding in the
Company
Family Relationship
-NoneAmong Directors and
Executives
Work Experience
2014 - Present Independent Director, Chairman of the Audit
Committee and Vice Chairman of the Nomination
and Remuneration Committee Carabao Group Public
Company Limited
2013 - Present Independent Director, and member of the Audit
Committee Interlink Communication Public Company
Limited
2012 - Present Independent Director and Chairman of the Audit
Committee T.K.S. Technology Public Company Limited
2012 - 2013
Chairman of the Executive Committee Retail Business
Group, Thai Automobile Co., Ltd.
2009 - 2013
Chairman of the Board of Director Thai Military Bank
Public Company Limited
2009 - 2013
Director Don Muang Tollway Public Company Limited
2009 - 2012
Deputy Permanent Secretary for Finance, Chief of the
Revenue Cluster Ministry of Finance
213
6. Mr. Boonnaris Suwannapool / Member of Audit Committee and Independent Director
Age(years)
61
-B.A. (Law), Ramkamhaeng University
Educational
-M.A. (Political Science), National Institute of Development Administration
-NonePercentage of
Shareholding in the
Company
Among Directors and
Executives
Work Experience
2014 - Present Independent Director, Member of the Audit Commit
tee and Member of the Nomination and Remuneration
Committee, Carabao Group Public Company Limited
2013 Member of the Committee on Commercial Science, Senate
2012 Member of the Agricultural Research Development Committee
Ministry of Agriculture and Cooperatives
2012 Chairman of the Foreign Business Commission, Department of
Business Development
2012 Chairman of the Patent Board, Department of Intellectual Property
2012 Member of the Asset Management Committee Anti-Money
Laundering Office
2011 Member of the Special Case Committee, Department of Special
Investigation
2011 Member of the Cane and Sugar Fund Management Committee,
Ministry of Industry
2011 Member of the Government Representative Committee in the
Wage Committee (No. 18), Ministry of Labour
Advisor, National Intelligence Council, Office of the
2011 News
Prime Minister
2010 Member of the National Health Security Committee, Ministry of
Public Health
Age(years)
Educational
Percentage of
Shareholding in the
Company
Family Relationship
Among Directors and
Executives
214
Annual Report 2014
/ Member of Audit Committee and Independent Director
51
-B.A. (Accounting), University of the Thai Chamber of Commerce
-MBA, Kasetsart University
-Ph.D. (Management), Rattana Bundit University
-None-None-
Work Experience
2014 - Present Independent Director, Member of the Audit Committee
and Member of the Nomination and Remuneration
Committee, Carabao Group Public Company Limited
2013 - Present Director, Thai Insurance Public Company Limited
2011 - Present Independent Director and Member of the Audit
Committee, Asia Aviation Public Company Limited
2011 - Present Grand Chamberlain, Bureau of the Royal Household
2007
Assistant Grand Chamberlain, Bureau of the Royal
Household
1999
Director Bureau of the Royal Household
8. Mr. Kanit Patsaman / Independent Director
Age(years)
52
-Bachelor of Economics, Ramkamhaeng University
Educational
-MBA, National Institute of Development Administration
-Director Certification Program (DCP), Institute of Directors (IOD)
-NonePercentage of
Shareholding in the
Company
Among Directors and
Executives
Work Experience
2014 - Present Independent Director, Carabao Group Public Company
Limited
2013
Director, Thai Credit Guarantee Corporation
2005 - 2013
Advisor to liquidation directors and authorized
representative of liquidation directors, Thai Asset
Management Corporation
Age(years)ุ
Educational
Percentage of
Shareholding in the
Company
Family Relationship
Among Directors and
Executives
/ Independent Director
54
-B.A. (Law), Ramkamhaeng University
-M.A. (Law), Thammasat University
-None-None-
215
Work Experience
2014 - Present
2014 - Present
2014 - 2013
2013 - 2002
2002 - 1984
Independent Director Carabao Group Public Company
Limited
Independent Lawyer
Director of the Zoological Park Organization under the
Royal Patronage of His Majesty the King Ministry of
Natural Resources and Environment
Partner C&K Law office
Litigation manager TMB Bank Public Company Limited
10. Mrs. Wongdao Thanombooncharoen / Senior Deputy Managing Director - Marketing Operations
Age(years)
52
-B.A. (Journalism and Mass Communication), Thammasat University
Educational
-Financial Statements for Directors (FSD), Institute of Directors (IOD)
-Risk Management Committee Program (RMP), Institute of Directors (IOD)
2.55 (Specifically for Mrs. Wongdao Thanombooncharoen)
Percentage of
Shareholding in the
Company
-Younger sister of Miss Nutchamai Thanombooncharoen
Family Relationship
Among Directors and
Executives
Work Experience
2014 - Present Director, Member of the Executive Committee, member
of the Risk Management Committee, and Senior Deputy
Managing Director, Marketing Operations Carabao Group
Public Company Limited
2014 - Present Director and Senior Deputy Managing Director, Marketing
Operations, Carabao Tawandang Co., Ltd.
Operations Tawandang DCM Co., Ltd.
OperationsAsia Pacific Glass Co., Ltd.
2008 - 2013
Head of Marketing Operations Carabao Tawandang Co.,
Ltd.
11. Mr. Kamoldist Smuthkochorn / Duputy Managing Director - Marketing
Age(years)
54
-Bachelors of Technology (Hons.) Computing Studies University of Bradford
Educational
-NonePercentage of
Shareholding in the
Company
Among Directors and
Executives
216
Annual Report 2014
Work Experience
Age(years)
Educational
Percentage of
Shareholding in the
Company
Family Relationship
Among Directors and
Executives
Work Experience
2014 – Present Member of the Executive Committee, Member of the
Risk Management Committee and Deputy Managing
Director, Marketing,
2014 – Present Deputy Managing Director, Marketing
2014 – Present Deputy Managing Director, Marketing
Tawandang DCM Co.,Ltd.
2002 - 2013
Director of Marketing
/ Deputy Managing Director - Production
53
-Bachelor of engineering, King Mongkut’s University of Technology Thonburi
-None-None2014 - Present
2014 - Present
2005 - 2013
General Manager Summit Autoseats Industry Co,. Ltd
13. Miss Suporn Samakkabutr / Head of Accounting
Age(years)
54
Educational
-B.A. (Accounting), Bangkok University
-M.B.A. (General Management), Texas Woman’s University
Percentage of
Shareholding in the
Company
Family Relationship
Among Directors and
Executives
Work Experience
-None-None2014 - Present Head of Accounting
2014 - Present Head of Accounting Asia Pacific Glass Co., Ltd.
2014 - Present Head of Accounting Tawandang DCM Co., Ltd.
2013 - Present Head of Accounting Carabao Tawandang Co., Ltd.
2003 - 2013
Manager, Cost Accounting
Molnlycke Health Care (Thailand) Co., Ltd.
217
218
Annual Report 2014
Company
C, IV,VI,XI
Subsidiaries
Carabao Tawandang Co., Ltd
C,XI
C,XI
C,XI
Parent Companies
Sathientham Holding Co., Ltd.
I
Northend Investment Ltd.
Related Companies
The City Co., Ltd.
I
Sahamit Power Co., Ltd.
I
Sahamit Sugar Co., Ltd.
I
Siam Metal Recycle Co., Ltd.
I
Siam Metal Recycle Holding Co., Ltd.
I
Eco Inn Co., Ltd.
I
Red Sun Tawandang Co., Ltd.
I
Sakon Nakhon Electricity Generating Co., Ltd.
I
I
I
C.J. Express Group Co., Ltd.
I
Comfort Living Co., Ltd.
I
Setthatham Co., Ltd.
I
Mongol Co., Ltd.
Krabue & Co Co., Ltd.
Interlink Communication Co., Ltd.
T.K.S. Technology Public Company Limited
Exotic Food Public Company Limited
Thai Insurance Co., Ltd.
Asia Aviation Public Company Limited
Remark: C – Chairman of the Board of Directors
II – Chairman of the Audit Committee
I,XI
I
I
-
I,XI
I,XI
I,XI
-
-
I, XI
I, XI
I, XI
I,IV,XI
Mr. Paiboon
Kujareevanich
-
-
II,V,VI, X
Mrs. Saowanee
Kamolbutr
I
I
I
I,X
I,X
I
I
I
III
II
IV – Member of the Executive Committee
I – Director
VI – Member of the Nomination and Remuneration Committee
I,XI
I,IV,V,VI,XI
Mr. Sathien
Miss Nutchamai
Mr. Yuenyong
Setthasit Thanomboon charoen
Opakul
I
-
-
-
-
III,VI, X
Mr. Distorn
Vajarodaya
-
-
X
Mr. Kanit
Patsaman
-
-
X
Mr. Sanchai
Jullamon
-
I,XI
I,XI
I,XI
I,IV,V,XI
Mrs. Wongdao
Thanomboon
charoen
I
III
V – Member of the Risk Management Committee
III – Member of the Audit Committee
X - Executive
III,VI, X
Mr. Boonnaris
Suwannapool
Position Holding by Directors and Executives in the Company, Subsidiaries and Related Companies
-
-
XI
-
XI
Mr. Surasak
Prokkati
-
-
XI
XI
XI
IV,V,XI
Mr. Kamoldist
Smuthkochorn
-
-
XI
XI
XI
XI
Miss Suporn
Samakkabutr

Carabao Group Pubilc Company Limited

Transcription

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