CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY

CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED
AND ITS SUBSIDIARY COMPANIES
REPORT AND FINANCIAL STATEMENTS
31 DECEMBER 2002 AND 2001
Report of Independent Auditor
To The Board of Directors and Shareholders of
Cal-Comp Electronics (Thailand) Public Company Limited
I have audited the accompanying consolidated balance sheets of Cal-Comp Electronics
(Thailand) Public Company Limited and its subsidiaries as at 31 December 2002 and 2001,
and the related consolidated statements of earnings, changes in shareholders’ equity and
cash flows for the years then ended; and the separate financial statements of Cal-Comp
Electronics (Thailand) Public Company Limited for the same years. These financial
statements are the responsibility of the Company’s management as to their correctness and
the completeness of the presentation. My responsibility is to express an opinion on these
financial statements based on my audits. I did not audit the financial statements of Logistar
International Holding Co., Ltd. and Cal-Comp Electronics (Suzhou) Co., Ltd., two overseas
subsidiary companies, which are included in the consolidated financial statements for the
years ended 31 December 2002 and 2001. These subsidiaries’ financial statements show
total assets as at 31 December 2002 and 2001 of Baht 3,006 million and Baht 621 million,
respectively, revenues for the years then ended totalling Baht 9,321 million and Baht 978
million, respectively and net earnings for the years then ended of Baht 70 million and Baht
146 million, respectively. In addition, the financial statements of the Company only include
its investments in its subsidiaries presented under the equity method, amounting to Baht 378
million and Baht 148 million, as at 31 December 2002 and 2001, respectively, and its share
of the profits of its subsidiaries for the years then ended, amounting to Baht 70 million and
Baht 146 million, respectively. The financial statements of the subsidiary companies were
audited by other auditors, whose reports I have received, and my opinion, insofar as it
relates to the amounts of the various transactions of Logistar International Holding Co., Ltd.
and Cal-Comp Electronics (Suzhou)
Co., Ltd. included in the consolidated financial
statements and the financial statements of Company only, is based on those auditors’
reports.
-2-
I conducted my audits in accordance with generally accepted auditing standards. Those
standards require that I plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement
presentation. I believe that my audits, together with the report of other auditors discussed in
the first paragraph, provide a reasonable basis for my opinion.
As discussed in Note 11 to the financial statements, the Company recorded its investment in
an overseas associated company under the equity method, based on information provided by
that company’s management which was unaudited by its external auditor.
In my opinion, based on my audits and the report of other auditors, except for the effect on
the financial statements of the matter described in the preceding paragraph, the financial
statements referred to above present fairly, in all material respects, the financial position of
Cal-Comp Electronics (Thailand) Public Company Limited and its subsidiary companies
and of Cal-Comp Electronics (Thailand) Public Company Limited as at 31 December 2002
and 2001, and the results of their operations and cash flows for the years then ended in
accordance with generally accepted accounting principles.
I draw attention to Note 7 to the financial statements that the Company presents significant
product sales and raw material purchase transactions in the financial statements at prices
mutually agreed among the Company, its subsidiary and related companies.
Rungnapa Lertsuwankul
Certified Public Accountant (Thailand) No. 3516
Ernst & Young Office Limited
Bangkok : 22 January 2003
-3-
CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES
BALANCE SHEETS
AS AT 31 DECEMBER 2002 AND 2001
Note
ASSETS
Current assets
Cash and cash equivalents
Short-term investments
Trade accounts receivable
Trade accounts receivable under agreements assigning
rights of claim
Less : Allowance for doubtful accounts
Trade accounts receivable, net
Trade accounts receivable - related parties
Trade accounts receivable - related parties under
agreements assigning rights of claim
Less : Allowance for doubtful accounts
Trade accounts receivable - related parties, net
Short-term loans to related parties
Amount due from related parties
Inventories, net
Goods in transit
Advances payment for raw materials
Value added tax refundable
Other receivables
Other current assets
Total current assets
Non-current assets
Investments accounted for under equity method
Other long-term investments
Property, plant and equipment, net
Intangible assets
Deferred assets
Land occupancy rights
Other non-current assets
Molds and spare parts
Others
Total non-current assets
TOTAL ASSETS
The accompanying notes are an integral part of the financial statements.
CONSOLIDATED
2002
2001
(Unit : Baht)
THE COMPANY ONLY
2002
2001
832,719,330
45,364,025
3,224,811,326
982,524,375
111,722,400
2,883,959,552
66,912,555
45,364,025
1,570,178,993
520,386,272
111,722,400
2,883,959,552
(58,752,779)
3,166,058,547
1,403,467,743
572,814,847
(44,674,178)
3,412,100,221
929,986,621
(58,752,779)
1,511,426,214
3,383,443,779
572,814,847
(44,674,178)
3,412,100,221
1,036,613,949
(4,723,239)
1,398,744,504
266,647,679
48,681,308
3,790,164,115
23,625,350
214,890,365
42,392,616
455,219,503
276,957,809
10,561,465,151
(1,629,000)
928,357,621
88,167,200
4,036,602,020
285,041,087
245,830,547
48,356,236
616,586,626
164,418,918
10,919,707,251
203,244,138
(4,723,239)
3,581,964,678
94,031,697
3,790,164,115
23,625,350
214,890,365
42,392,616
455,219,503
54,963,745
9,880,954,863
(1,629,000)
1,034,984,949
88,167,200
56,213,241
4,036,602,020
285,041,087
245,830,547
48,356,236
616,586,626
62,830,372
10,518,821,171
11
12
13
123,766,062
78,276,326
2,719,141,248
6,536,226
158,969,034
2,815,638,346
411,259,708
49,458,332
2,654,500,114
153,943,759
102,755,793
2,815,638,346
14
9,977,650
68,554,665
7,281,921
-
9,977,650
-
7,281,921
-
167,232,043
23,770,797
3,190,718,791
13,752,183,942
294,970,118
7,000,106
3,290,395,751
14,210,103,002
167,232,042
23,770,797
3,316,198,643
13,197,153,506
294,970,118
7,000,106
3,381,590,043
13,900,411,214
4
6
5
6
5,7
7
7
8
9
10
CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES
BALANCE SHEETS (Continued)
AS AT 31 DECEMBER 2002 AND 2001
Note
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Short-term loans from financial institutions
Trade notes payable
Liabilities under agreements assigning rights of claim
Trade accounts payable
- Related parties
- Others
Total trade accounts payable
Advance from and amount due to related parties
Corporate income tax payable
Accrued interest expenses
Accrued expenses
Other payable
Other current liabilities
Total current liabilities
Non-current liabilities
Convertible debentures
Total non-current liabilities
Total liabilities
Shareholders' equity
Share capital
Authorised share capital
378,000,000 ordinary shares of Baht 10 each
(2001 : 320,000,000 ordinary shares of Baht 10 each)
Issued and fully paid share capital
302,000,000 ordinary shares of Baht 10 each
Additional paid-in capital
Premium on common stocks
Other deficits
Convertible debentures - equity component
Currency translation differences
Retained earnings
Appropriated - legal reserve
Unappropriated
Total shareholders' equity
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
15
6
7
7
16
17
18,7
CONSOLIDATED
2002
2001
(Unit : Baht)
THE COMPANY ONLY
2002
2001
971,505,366
105,522,651
474,041,700
2,343,392,079
150,174,954
-
971,505,366
105,522,651
-
2,343,392,079
150,174,954
-
144,502,238
2,536,796,286
2,681,298,524
405,693,218
2,675,135
4,309,300
232,479,690
205,730,832
291,980,840
5,375,237,256
9,778,041
3,816,069,764
3,825,847,805
1,087,377,561
14,296,862
190,102,294
254,215,871
234,808,664
8,100,216,090
143,351,638
2,536,796,286
2,680,147,924
409,906,225
2,675,135
4,309,300
231,543,604
201,515,790
213,080,825
4,820,206,820
9,778,041
3,816,069,764
3,825,847,805
823,827,347
14,296,862
188,110,160
254,215,871
190,659,224
7,790,524,302
2,075,669,898
2,075,669,898
7,450,907,154
8,100,216,090
2,075,669,898
2,075,669,898
6,895,876,718
7,790,524,302
3,780,000,000
3,200,000,000
3,780,000,000
3,200,000,000
3,020,000,000
3,020,000,000
3,020,000,000
3,020,000,000
636,000,000
(145,851,474)
3,000,653
(1,489,041)
636,000,000
(98,588,488)
761,867
636,000,000
(145,851,474)
3,000,653
(1,489,041)
636,000,000
(98,588,488)
761,867
378,000,000
2,411,616,650
6,301,276,788
13,752,183,942
0
294,550,927
2,257,162,606
6,109,886,912
14,210,103,002
0
378,000,000
2,411,616,650
6,301,276,788
13,197,153,506
0
294,550,927
2,257,162,606
6,109,886,912
13,900,411,214
0
19
18
20
The accompanying notes are an integral part of the financial statements.
DIRECTORS
CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES
STATEMENTS OF EARNINGS
FOR THE YEARS ENDED 31 DECEMBER 2002 AND 2001
Note
REVENUES
Sales
Share of profit from investments accounted for under equity method
Gain on exchange
Reversal of allowance for diminution in the value of investment
Other income
- Service income
- Others
Total revenues
Expenses
Cost of sales
Selling and administrative expenses
Share of loss from investments accounted for under equity method
Loss on exchange
Directors' remuneration
Total expenses
Earnings before interest expenses and income tax
Interest expenses
Corporate income tax
Net earnings for the year
21
7
21
22
23
Basic earnings per share
Net earnings
Weighted average number of ordinary shares (million shares)
Diluted earnings per share
Net earnings
Weighted average number of ordinary shares (million shares)
The accompanying notes are an integral part of the financial statements.
(Unit : Baht)
THE COMPANY ONLY
2002
2001
CONSOLIDATED
2002
2001
32,364,007,357
27,185,399
52,310,872
32,314,344,967
136,290,902
-
32,377,109,343
93,109,366
52,310,872
32,297,537,420
88,856,036
1,337,986
-
59,042,140
32,502,545,768
61,902,993
32,512,538,862
249,397,003
26,863,649
32,798,790,233
59,075,428
32,446,806,870
30,055,401,976
715,553,747
25,079,789
24,000,000
30,820,035,512
1,682,510,256
(79,660,204)
(5,946,935)
1,596,903,117
29,717,319,352
889,409,420
56,746,990
18,000,000
30,681,475,762
1,831,063,100
(209,547,888)
(7,184,582)
1,614,330,630
30,055,401,976
660,926,645
385,629,465
24,000,000
31,125,958,086
1,672,832,147
(69,982,095)
(5,946,935)
1,596,903,117
29,717,319,352
883,453,634
18,000,000
30,618,772,986
1,828,033,884
(206,518,672)
(7,184,582)
1,614,330,630
5.29
5.35
5.29
5.35
302
302
302
302
5.23
5.35
5.23
5.35
306
302
306
302
24
CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER 2002 AND 2001
CONSOLIDATED
2002
2001
Cash flows from operating activities
Net earnings for the year
Adjustments to reconcile net earnings to net cash
provided by (paid from) operating activities :(Gains) loss on sales of investments
Depreciation and amortisation
Allowance for doubtful accounts
Loss on disposal of equipment
Share of (profit) loss from investments accounted for under equity method
Allowance for diminution in value of investments (reversal)
Provision for obsolete inventories (reversal)
Amortisation of discounts on convertible debentures
Unrealised loss on exchange
Earnings from operating activities before change in
operating assets and liabilities
Operating assets (increase) decrease
Trade accounts receivable
Trade accounts receivable - related parties
Amount due from related parties
Inventories
Goods in transit
Advances payment for raw materials
Value added tax refundable
Other receivables
Other current assets
Other assets
Operating liabilities increase (decrease)
Trade notes payable
Trade accounts payable
Trade accounts payable - related parties
Corporate income tax payable
Accrued interest expenses
Accrued expenses
Other payable
Other current liabilities
Net cash from operating activities
The accompanying notes are an integral part of the financial statements.
(Unit : Baht)
THE COMPANY ONLY
2002
2001
1,596,903,117
1,614,330,630
1,596,903,117
1,614,330,630
(10,956,128)
555,415,480
17,172,840
1,392,497
(27,185,399)
(52,310,872)
(637,017)
83,351
55,043,229
570,782,992
46,303,178
5,425,556
56,746,990
105,000,000
139,869,377
18,886,851
1,180,734
555,415,480
17,172,840
1,392,497
(102,858,366)
(52,310,872)
(637,017)
83,351
55,043,229
570,782,992
46,303,178
5,425,556
(88,856,036)
105,000,000
139,869,377
48,564,841
2,134,921,098
2,557,345,574
2,071,384,993
2,441,420,538
219,338,118
(466,957,699)
(48,681,308)
247,069,845
261,415,737
33,709,433
5,963,620
169,746,312
(112,415,931)
(12,228,092)
310,597,497
284,328,855
659,589,969
(98,366,122)
(122,057,362)
22,005,965
(412,505,364)
(150,009,958)
-
1,873,970,450
(2,543,550,544)
(37,818,456)
247,069,845
261,415,737
33,709,433
5,963,620
169,746,312
7,989,588
(12,228,092)
310,597,497
177,701,527
659,589,969
(98,366,122)
(122,057,362)
22,005,965
(468,718,605)
(47,975,915)
-
(44,652,303)
(1,279,913,870)
135,175,430
2,675,135
(9,987,562)
42,994,943
(98,583,131)
25,582,001
1,205,171,776
(35,616,568)
521,584,149
(4,005,608)
(16,674,977)
16,700,784
104,256,784
155,649,177
3,792,822,795
(44,652,303)
(1,289,691,911)
143,802,871
2,675,135
(9,987,562)
44,021,481
(102,798,173)
(9,139,063)
811,883,361
(35,616,568)
521,584,149
(4,005,608)
(16,674,977)
14,708,650
104,286,779
81,821,748
3,540,301,665
CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES
STATEMENTS OF CASH FLOWS (Continued)
FOR THE YEARS ENDED 31 DECEMBER 2002 AND 2001
2002
2001
(Unit : Baht)
THE COMPANY ONLY
2002
2001
66,358,375
-91,225,172
97,877,457
-178,480,479
-2,250,908
-256,920,994
-79,511,527
13,387,601
-68,554,665
-16,770,691
-516,091,003
-111,722,400
4,199,000
1,430,114
-443,466,729
-201,532,952
31,901,873
-8,368,166
-727,559,260
66,358,375
-155,638,318
58,345,347
88,167,200
-2,250,908
-192,279,860
-79,511,527
13,387,601
-16,770,691
-220,192,781
-111,722,400
58,132,241
1,430,114
-443,466,729
-201,532,952
31,901,873
-8,368,166
-673,626,019
-1,402,783,773
474,041,700
2,083,008,000
-634,151,745
-1,359,000,000
-838,885,818
-149,805,045
982,524,375
832,719,330
-2,007,499,618
-480,541,036
-162,898,500
-392,543,190
-3,043,482,344
21,781,191
960,743,184
982,524,375
-1,402,783,773
2,083,008,000
-366,388,524
-1,359,000,000
-1,045,164,297
-453,473,717
520,386,272
66,912,555
-2,007,499,618
-744,091,250
-162,898,500
-392,543,190
-3,307,032,558
-440,356,912
960,743,184
520,386,272
89,647,766
3,271,800
192,691,910
19,731,889
79,969,657
3,271,800
223,193,649
19,731,889
-
47,262,986
56,213,244
4,399,000
20,311,765
CONSOLIDATED
Cash flows from investing activities
(Increase) decrease in short-term investments
Increase in investments accounted for under equity method
Decrease in long-term investments
(Increase) decrease in short-term loans to related parties
(Increase) decrease in currency translation differences
Increase in property, plant and equipment
Increase in molds and spare parts
Proceeds from sales of equipment
Increase in land occupancy rights
Increase in deposits
Net cash used in investing activities
Cash flows from financing activities
Decrease in short-term loans from financial institutions
Increase in liabilities under agreements assigning rights of claim
Increase in convertible debentures
Decrease in advance from and amount due to related parties
Decrease in long-term loan
Dividends paid
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Supplemental cash flows information :Cash paid during the year for :Interest expenses
Corporate income tax
Non-cash items consist of :Sold investment to a related party that has not yet been collected
Sold investment to other receivable that had yet been collected
Unrealised loss on change in the value of investment
The accompanying notes are an integral part of the financial statements.
47,262,986
4,399,000
20,311,765
CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED AND ITS SUBSIDIARY COMPANIES
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED 31 DECEMBER 2002 AND 2001
(Unit : Baht)
Balance - beginning of year 2001
Unrealised loss on change in the value of investment
Currency translation adjustment
Unrealised transactions in earnings statement
Net earnings for the year 2001
Transferred to legal reserve
Dividends paid
Balance - end of year 2001
Unrealised loss on change in the value of investment
Issuing convertible debentures during the year
Currency translation adjustment
Unrealised transactions in earnings statement
Net earnings for the year 2002
Transferred to legal reserve
Dividends paid (Note 26)
Balance - end of year 2002
The accompanying notes are an integral part of the financial statements.
Issued and fully
paid share capital
3,020,000,000
3,020,000,000
3,020,000,000
Premium on
common stocks
636,000,000
636,000,000
636,000,000
CONSOLIDATED AND THE COMPANY ONLY
Convertible
Currency
debentures translation
Retained earnings
Other deficits
equity component
differences
Appropriated
Unappropriated
-78,276,723
-668,247
213,834,395
1,116,148,508
-20,311,765
1,430,114
-20,311,765
1,430,114
1,614,330,630
80,716,532
-80,716,532
-392,600,000
-98,588,488
761,867
294,550,927
2,257,162,606
-47,262,986
3,000,653
-2,250,908
-47,262,986
3,000,653
-2,250,908
1,596,903,117
83,449,073
-83,449,073
-1,359,000,000
-145,851,474
3,000,653
-1,489,041
378,000,000
2,411,616,650
Total
4,907,037,933
-20,311,765
1,430,114
-18,881,651
1,614,330,630
-392,600,000
6,109,886,912
-47,262,986
3,000,653
-2,250,908
-46,513,241
1,596,903,117
-1,359,000,000
6,301,276,788
CAL-COMP ELECTRONICS (THAILAND) PUBLIC COMPANY LIMITED
AND ITS SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2002 AND 2001
1. GENERAL INFORMATION
On 4 December 1989, Cal-Comp Electronics (Thailand) Public Company Limited was
incorporated as a limited company under Thai laws. Its major shareholder is Kinpo Electronics,
Inc., a company incorporated in Taiwan. The Company operates its business in Thailand and its
principal activity is the manufacture of electronic products in three sectors, such as computer and
computer peripheral, telecommunication equipment and automation equipment. Its registered
office is 191/54, 191/57 18th Floor, CTI Tower, Rachadapisek Road, Klongtoey, Bangkok 10110.
The Company has 2 branches in Thailand located at Samutsakorn and Petchaburi province.
In 2000, the Company opened a branch in Taiwan to purchase raw materials and finished goods,
to coordinate between the Company and its overseas customers, and to facilitate the Company’s
business operations.
2. BASIS OF CONSOLIDATION
During the second quarter of 2001, the Company established a 100% owned subsidiary, Logistar
International Holding Co., Ltd., incorporated in the British Virgin Islands with an authorized
capital of USD 50,000. The subsidiary purchases components for consumer electronics,
communication products and personal information products, solely from the Company and sells
them to Kinpo Electronics, Inc. and others.
During the third quarter of 2002, the Company established a 100% owned subsidiary, Cal-Comp
Electronics (Suzhou) Co., Ltd., incorporated in The People’s Republic of China with an
authorized capital of USD 10 million. This subsidiary has not yet commenced its operations and
therefore no earning statement has been prepared. This subsidiary is in the process of
constructing its plant and expects to start its operation in 2003.
-1-
The consolidated financial statements include the financial statements for the years ended
31 December 2002 and 2001 of Cal-Comp Electronics (Thailand) Public Company Limited
(hereinafter called “the Company”) and its subsidiary companies, Logistar International Holding
Co., Ltd. and Cal-Comp Electronics (Suzhou) Co., Ltd., which were incorporated and operated
their businesses in overseas (hereinafter call “the subsidiaries”). The financial statements of the
subsidiaries were prepared by the management of the subsidiaries and audited by its auditor
overseas.
The Company has subsidiary companies as follows :Revenue
Subsidiaries’ name
Cal-Comp Management Information
System Co., Ltd.
Logistar International Holding Co., Ltd.
Cal-Comp Electronics (Suzhou) Co.,
Ltd.
Investment proportion
2002
2001
%
-
%
62
100
100
100
-
Country of
incorporation
Thailand
British Virgin
Islands
The People’s
Republic of
China
Nature of
business
Computer training
services
Company’s
distributor
Manufacture
For the periods ended
31 December
Total assets
2002
2001
2002
2001
Million Baht
-
Million Baht
9
Million Baht
-
Million Baht
5
2,842
621
9,321
978
164
-
-
-
In 2001, the Company has excluded the financial statements of Cal-Comp Management
Information System Co., Ltd. in the consolidated financial statements because the financial
statements of this subsidiary company are of insignificant value. In addition, in 2002 this
company registered the dissolution as discussed in Note 11.
All intercompany balances and significant intercompany transactions have been eliminated from
the consolidated financial statements.
The financial statements of the branch office and subsidiaries incorporated overseas are translated
into Thai Baht at the closing exchange rate for assets and liabilities, and at the average exchange
rate for revenues and expenses. The resultant difference is shown under the caption of “Currency
translation differences” in shareholders’ equity.
3. SIGNIFICANT ACCOUNTING POLICIES
The financial statements have been prepared in accordance with accounting standards
pronounced by the Institute of Certified Accountants and Auditors of Thailand which are
effective under the Accounting Act B.E. 2543.
-2-
Significant accounting policies adopted by the Company and its subsidiary companies are
summarised below :3.1 Revenue and expense recognition
Sales and service income represent the invoiced value, excluding value added tax, of goods
sold and delivered after deducting discount and allowance and services rendered.
Expenses are recognised on an accrual basis.
3.2 Inventories
Inventories are valued at the lower of cost (first-in, first-out method) or net realisable value.
Provision for obsolete stocks is made for damaged, slow-moving and obsolete stock.
3.3 Trade accounts receivable and other receivables
Trade accounts receivable and other receivables are recognised and carried at original
invoice amount less an allowance (if any) for any uncollectible amounts. An estimate for
doubtful debts is made when collection of the full amount is no longer probable.
3.4 Investments
a)
Investments in unit trusts in overseas, which are held as short-term investments, are
determined at fair value. Gains or losses arising from change in value is included in
determining earnings.
b)
Investments in marketable equity securities, which are held as available-for-sale
securities, are determined at fair value. Gains or losses arising from changes in value
have been separately shown in shareholders’ equity under the caption of “Other
deficits”.
c)
Investments in non-marketable equity securities, which the Company hold as, other
investments, are valued at cost. Loss on impairment (if any) of investments in
available-for-sale securities and other investments is included in determining
earnings.
d)
Investments in subsidiary and associated companies are valued under the equity
method.
-3-
3.5 Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated depreciation.
Depreciation of buildings, building improvements and equipment are calculated by
reference to their costs on a straight-line basis over the estimated useful lives as follows :Buildings and building improvements
Machinery and factory equipment
Office furniture and equipment
Motor vehicles
Miscellaneous equipment and research and development equipment
-
11 - 41 years
9 years
5, 11 years
5, 9 years
2 - 3 years
No depreciation is provided for land, land improvement, construction in progress,
equipment under installation and fixed assets in transit.
3.6 Intangible assets
Deferred assets are stated at cost and amortised on a straight-line basis over 3 years.
Land occupancy rights are stated at cost and amortised on contract period of 50 years.
3.7 Deferred expenses
Deferred expenses are calculated by reference to their costs and amortised on a straight-line
basis at the following rates :
Convertible debentures issued expenses
Molds and spare parts
3 years
- 1, 2, 5 years
3.8 Foreign currencies
Foreign currency transactions incurred during the year are translated into Baht at the rates
ruling on the transaction dates. Monetary assets and liabilities denominated in foreign
currency outstanding at the balance sheet date are translated into Baht at the rates ruling on
the balance sheet date.
Exchange gains and losses are included in determining earnings.
-4-
3.9 Foreign exchange contracts
Foreign exchange contracts are accounted for as hedge against exposure to the foreign
currency risk related to the Company and its subsidiary’s purchases and sales to overseas in
the normal course of business. Premium paid for forward exchange contracts are
recognised as liabilities or assets and are amortised over the period of contracts and
included in determining earnings.
3.10 Cash and cash equivalents
Cash and cash equivalents are cash and deposits at banks, excluded deposits at banks with
an original maturity over 3 months and cash secured as collateral.
3.11 Interest rate swap
The notional amounts of interest rate swap agreements of its subsidiary are not recognised
in the financial statements since the agreements do not require the settlement of such
notional amounts. The amounts receivable or payable under the agreements resulting from
the difference in the interest rates are recognised as interest income or interest expense at
the balance sheet dates and at settlement dates.
3.12 Foreign currency option
The notional amounts of the foreign currency option contracts of its subsidiary are not
recognised as either assets or liabilities on the contract dates. However, amounts received
on options written are recognised as liabilities, and amounts paid on options bought are
recognised as assets. Such amounts are amortised using the straight-line method over the
terms of contracts and charged to current income. Gains or losses on the exercise of the
options are charged to current income.
3.13 Provident fund
The Company and its employees jointly established a provident fund as approved by the
Ministry of Finance in accordance with the Provident Fund Act B.E. 2530. The fund is
contributed by both employees at the rate of 2 percent and the Company at the rate of 2
percent.
-5-
3.14 Basic earnings per share
Basic earnings per share is calculated by dividing net earnings for the year by the weighted
average number of ordinary shares held by outside shareholders outstanding during the
year.
Diluted earnings per share is calculated by dividing net earnings for the year by the total
sum of the weighted average number of ordinary shares held by outside shareholders
outstanding during the year plus the weighted average number of ordinary shares to issue
for conversion of all dilutive potential ordinary shares into ordinary shares.
3.15 Use of accounting estimates
Preparation of financial statements in conformity with generally accepted accounting
principles in circumstances requires management to make estimates and assumptions that
affect amounts reported in the accompanying financial statements and notes thereto. Actual
results could differ from these estimates.
4. SHORT-TERM INVESTMENTS
(Unit : Baht)
CONSOLIDATED
2002
2001
Trading securities
Unit trusts
45,364,025
111,722,400
THE COMPANY ONLY
2002
2001
45,364,025
111,722,400
As at 31 December 2002 and 2001, the above short-term investments are investment in openended mutual fund overseas purchased by Taipei branch. The fair value of these investments is
immaterially higher than their cost and the Company has therefore recorded the short-term
investments at cost.
-6-
5. TRADE ACCOUNTS RECEIVABLE / TRADE ACCOUNTS RECEIVABLE - RELATED
PARTIES
The outstanding balances of trade accounts receivable is aged as follows :(Unit : Thousand Baht)
Not yet due
Overdue
Less than 1 month
1 – 2 months
2 – 3 months
3 – 6 months
6 – 12 months
Over 12 months
Total
Less : Allowance for doubtful accounts
Net
CONSOLIDATED
2002
2001
2,612,981
3,139,416
THE COMPANY ONLY
2002
2001
1,042,263
3,139,416
228,044
7,987
95,222
48,917
63,022
168,638
3,224,811
(58,753)
3,166,058
183,057
7,972
66,272
38,955
63,022
168,638
1,570,179
(58,753)
1,511,426
91,050
54,291
5,500
5,689
156,673
4,155
3,456,774
(44,674)
3,412,100
91,050
54,291
5,500
5,689
156,673
4,155
3,456,774
(44,674)
3,412,100
The outstanding balances of trade accounts receivable - related parties is aged as follows :(Unit : Thousand Baht)
Not yet due
Overdue
Less than 1 month
1 – 2 months
2 – 3 months
3 – 6 months
6 – 12 months
Over 12 months
Total
Less : Allowance for doubtful accounts
Net
CONSOLIDATED
2002
2001
981,438
659,721
317,110
53,140
400
12,210
38,213
957
1,403,468
(4,723)
1,398,745
-7-
3,514
750
481
63,877
154,994
46,649
929,986
(1,629)
928,357
THE COMPANY ONLY
2002
2001
2,963,191
766,349
408,487
66,196
87,930
21,767
38,160
957
3,586,688
(4,723)
3,581,965
3,514
750
481
63,877
154,994
46,649
1,036,614
(1,629)
1,034,985
The Company’s management believes that allowance for doubtful accounts set aside is adequate
in the present situation.
6. TRADE ACCOUNTS RECEIVABLE UNDER AGREEMENTS ASSIGNING RIGHTS OF
CLAIM
As at 31 December 2002, the Company has assigned its rights of claim over trade receivables
amounting to Baht 677 million (2001 : Baht 1,958 million) to banks, whereby the trade
receivables have agreed in writing to make their payment against all invoices issued by the
Company directly to these banks. The Company, as the assignor has surrendered control over
these debts, and the banks, as the assignee, have sole rights of claim over the trade receivables.
The Company has recorded the transactions as sales to the banks. The Company has received
payment of Baht 474 million (2001 : Baht 1,385 million) from the banks and recorded the amount
as a deduction from the trade accounts receivable balance. The remaining Baht 203 million
(2001 : Baht 573 million), for which no payment has yet been received from the banks, has been
presented as “Trade accounts receivables under agreements assigning rights of claim” in the
balance sheet.
The Company has provided a guarantee to the banks to cover any defaults on payment by these
accounts receivable. However, no allowance has been set up against these assigned trade
receivables since the Company believes that they are financially strong.
7. RELATED PARTY TRANSACTIONS
During the years, the Company had significant business transactions with its overseas related
companies (related by way of having certain shareholders and/or directors in common). They are
in connection with sales of goods, hire of manufacturing and purchases of raw materials. Such
transactions, which have been concluded on the terms and bases agreed between the Company
and those companies, are summarised below :CONSOLIDATED
2002
2001
Transactions with subsidiary
(Eliminated from consolidated financial statements)
Sales
Service income
Transactions with related parties
Sales
- Kinpo Electronics, Inc.
6,687,198
- Others
1,224,564
Purchases of raw materials
312,782
Interest income
9,976
Interest expenses
25,180
-
THE COMPANY ONLY
2002
2001
8,937,511
249,397
5,749,395
132,324
77,442
25,645
41,161
-8-
3,604,058
1,224,564
312,782
6,362
25,180
(Unit : Thousand Baht)
Pricing policy
827,177 Gross profit margin + about 2%
USD 725,000 per month
4,908,783
132,324
77,442
25,645
41,161
Gross profit margin + about 2%
Gross profit margin + about 2%
Nearly market price
0-3.5%, 9% per annum
2.46-2.63% per annum
The outstanding balances of the above transactions have been presented in the balance sheets as
follows :(Unit : Thousand Baht)
Relationship
Trade accounts receivable - related parties
Subsidiary company
(eliminated from consolidated financial statements)
- Logistar International Holding Co., Ltd. Subsidiary company
Related companies
- Kinpo Electronics, Inc.
Parent company
- Afreey Inc.
Shareholder
- Telian Corporation
Common directors
- Wide Telecom, Inc.
Shareholder
- Others
Total
Less : Allowance for doubtful accounts
Short-term loans to related parties
Related companies
- Wise Sigma International Holding
Co., Ltd.
- Telian Corporation
Associated company
Common directors
Amount due from related parties
Subsidiary company
(eliminated from consolidated financial statements)
- Logistar International Holding Co., Ltd. Subsidiary company
Related companies
- Kinpo Electronics, Inc.
Parent company
- Telian Corporation
Common directors
- Wide Telecom, Inc.
Shareholder
- Others
Trade accounts payable - related parties
Related companies
- Kinpo Electronics, Inc.
- Wide Telecom, Inc.
- Telian Corporation
- Others
Parent company
Shareholder
Common directors
-9-
CONSOLIDATED
2002
2001
-
-
THE COMPANY ONLY
2002
2001
2,379,940
106,628
170,415
286,646
747,632
2,055
1,206,748
(4,723)
1,202,025
3,581,965
659,948
25,661
244,377
929,986
(1,629)
928,357
1,034,985
367,135
286,646
747,632
2,055
1,403,468
(4,723)
1,398,745
1,398,745
659,948
25,661
244,377
929,986
(1,629)
928,357
928,357
266,648
266,648
88,167
88,167
-
-
-
45,351
56,213
19,101
21,251
2,465
5,864
48,681
48,681
-
19,101
21,251
2,465
5,864
48,681
94,032
56,213
14,632
125,528
3,192
143,352
6,298
14,632
125,528
3,192
1,150
144,502
6,298
2,301
1,179
9,778
88,167
88,167
2,301
1,179
9,778
(Unit : Thousand Baht)
Relationship
Advance from and amount due to related parties
Subsidiary company
(eliminated from consolidated financial statements)
- Logistar International Holding Co., Ltd. Subsidiary company
Related companies
- Kinpo Electronics, Inc.
Parent company
- Wide Telecom, Inc.
Shareholder
- Telian Corporation
Common directors
Convertible debentures
Related company
- Kinpo Electronics, Inc.
Cost (par value) 4,000 units
Less : Discount on convertible debentures
to be realised as interest expenses
in the future
Convertible debentures, net
Parent company
CONSOLIDATED
2002
2001
THE COMPANY ONLY
2002
2001
-
-
4,213
-
363,073
919
41,701
405,693
1,087,378
1,087,378
363,073
919
41,701
409,906
823,827
823,827
173,215
-
173,215
-
(243)
172,972
-
(243)
172,972
-
A part of advances from and amounts due to related parties of Baht 325 million as of
31 December 2002 was charged interest at the rate of 2.495 percent per annum.
The movements of short-term loans to related parties during the year are as follows :(Unit : Thousand Baht)
CONSOLIDATED
31 December 2001
Short-term loans to related parties
Wise Sigma International Holding Co., Ltd.
Telian Corporation
Additional loans
Repayment
31 December 2002
88,167
362,874
-
(96,226)
(88,167)
266,648
-
88,167
362,874
(184,393)
266,648
(Unit : Thousand Baht)
THE COMPANY ONLY
31 December 2001
Short-term loan to related party
Telian Corporation
88,167
Additional loans
Repayment
-
(88,167)
31 December 2002
-
Short-term loans to Wise Sigma International Holding Co., Ltd. and Telian Corporation were
denominated in US dollar currency and interest was charged at the rate of 0 – 3.5 percent and 9
percent per annum, respectively.
Net foreign currency assets and liabilities has been included in Note 31.3.
- 10 -
8. INVENTORIES
(Unit : Baht)
Finished goods
Work in process
Raw materials
Raw materials outside contract
Total
Less : Provision for obsolete inventories
Inventories, net
CONSOLIDATED
THE COMPANY ONLY
2002
2001
2002
2001
430,204,580
416,008,370
430,204,580
416,008,370
16,985,808
5,206,994
16,985,808
5,206,994
3,568,161,654
3,775,695,441 3,568,161,654 3,775,695,441
106,484,443
40,968,284
106,484,443
40,968,284
4,056,320,326
4,303,395,248 4,056,320,326 4,303,395,248
(266,793,228) (266,156,211) (266,793,228)
(266,156,211)
3,790,164,115
4,036,602,020 3,790,164,115 4,036,602,020
The Company’s management believes that allowance for obsolete inventories set aside is
adequate in the present situation.
9. ADVANCES PAYMENT FOR RAW MATERIALS
Included in the balances as at 31 December 2002 and 2001 mainly consist of :a)
Short-term loans of Baht 124 million (2001 : Baht 149 million) provided to local suppliers
for use as working capital in agreed production of raw materials, on which interest is
charged at the rate of 7 percent per annum.
b)
Advance payment of Baht 91 million to overseas suppliers (2001 : Baht 97 million) for the
purchase of molds and raw materials. The remaining balances is to be paid upon the
completion of molds (please refer to Note 30.4).
10. OTHER RECEIVABLES
The balances as at 31 December 2002 and 2001 represent suspense accounts receivable set up for
inventories to which engineering or component changes have been made of which the expense
can be passed on to customers or vendors and for raw materials which were purchased from
suppliers and the orders later cancelled. The Company sets up these suspense account while
awaiting the return of the raw materials to the creditors.
- 11 -
11. INVESTMENTS ACCOUNTED FOR UNDER EQUITY METHOD
Company's name
Nature of
business
Country of
incorporation
Investment in subsidiary company
Cal-Comp Management
Computer training Thailand
Information System Co., Ltd. services
Investments in associated companies
Telian Corporation
Mobile phone
Korea
Paid up capital
2002
2001
-
Baht 10
Million
KW 2,871
Million
KW 1,997
Million
Investments
proportion
2002
2001
%
%
-
62
-
6,200
-
5,540
27.8
40
57,825
57,825
32,456
-
45
45
97,198
996
91,310
996
155,023
65,021
123,766
6,536
Wise Sigma International
Holding Co., Ltd.
Holding company British
Virgin
Islands
Total investments accounted for under equity method
Company's name
Nature of
business
Country of
incorporation
Investments in subsidiary companies
Cal-Comp Management
Computer training Thailand
Information System Co., Ltd. services
Logistar International Holding Company’s
British
Co., Ltd.
distributor
Virgin
Islands
Cal-Comp Electronics
Manufacturing The People’s
(Suzhou) Co., Ltd.
Republic of
China
Investment in associated company
Telian Corporation
Mobile phone
Korea
Paid up capital
2002
2001
-
Baht 10
Million
USD 50,000 USD 50,000
Investments
proportion
2002
2001
%
%
-
62
100
100
-
USD 10
Million
-
100
KW 2,871
Million
KW 1,997
Million
27.8
Total investments accounted for under equity method
(Unit : Thousand Baht)
CONSOLIDATED
Investments
Cost method
Equity method
2002
2001
2002
2001
40
(Unit : Thousand Baht)
THE COMPANY ONLY
Investments
Cost method
Equity method
2002
2001
2002
2001
-
6,200
-
2,280
214,812
148,404
162,328
-
163,992
-
57,825
57,825
32,456
-
222,433
66,305
411,260
153,944
2,280
5,540
This consolidated financial statements exclude the financial statements of Cal-Comp
Management Information System Co., Ltd., a subsidiary, due to the immateriality of its accounts.
The Company instead reflected its interest in this company in the “Investments” account in the
consolidated financial statements. In any case, on 27 November 2002, this company registered
its dissolution with the Ministry of Commerce and returned capital to its shareholders on
27 December 2002. Its liquidation was registered with the Ministry of Commerce on 9 January
2003.
On 2 January 2003, the Company invested USD 6.2 million in Cal-Comp Electronics (Suzhou)
Co., Ltd., which is equal to the subsidiary company’s registered capital.
- 12 -
As at 31 December 2002 and 2001, the Company respecitvely recognised a Baht 32 million share
of profit for 2002 and a Baht 57 million share of loss for 2001, from its investment in Telian
Corporation, an associated company. The figures were recorded based on the information
provided by that company’s management, which was not audited by the company’s external
auditor as time constraints meant that the company’s management was unable to arrange for the
information to be audited in time. The Company received the audited financial statement of this
associated company for the year 2001 in 2002 and there was no material difference.
In the year 2002, this associated company increased and decreased its capital but the Company
did not increase its investment in this company. As a result, the Company’s holding has been
diluted from 40 percent to 27.8 percent, and the shareholders’ equity of the associated company,
which was in deficit in the year 2001 has returned to surplus in the year 2002.
In addition to the above, as at 31 December 2002 the Company granted a USD 1.5 million
corporate guarantee to this associated company.
12. OTHER LONG-TERM INVESTMENTS
Company's name
Nature of business
Investments in other companies
Wide Telecom, Inc.
Pagers
Less : Unrealised loss on change
in the value of investment
Afreey Inc.
Power Digital Card Co., Ltd.
Power Digital Communication
Co., Ltd.
Country of
incorporation Investments proportion
2002
2001
%
%
Korea
12
Producing of CD ROM
Taiwan
Electronic parts
Taiwan
Trading of
communication apparatus Taiwan
Less : Allowance for diminution
in the value of investments
Total other long-term investments
- 13 -
(Unit : Thousand Baht)
CONSOLIDATED
Investments
Cost method
Fair value
2002
2001
2002
2001
14
171,247
171,247
7
-
7
8
(145,852)
25,395
76,752
-
(98,589)
72,658
76,752
56,213
4.7
9
28,818
105,570
58,345
191,310
(52,689)
52,881
78,276
(105,000)
86,310
158,968
25,395
72,658
Company's name
Nature of business
Investments in other companies
Wide Telecom, Inc.
Pagers
Less : Unrealised loss on change
in the value of investment
Afreey Inc.
Power Digital Communication
Co., Ltd.
Country of
incorporation Investments proportion
2002
2001
%
%
Korea
12
Producing of CD ROM
Taiwan
Trading of
communication apparatus Taiwan
(Unit : Thousand Baht)
THE COMPANY ONLY
Investments
Cost method
Fair value
2002
2001
2002
2001
14
171,247
171,247
7
7
(145,852)
25,395
76,752
(98,589)
72,658
76,752
-
9
76,752
58,345
135,097
(52,689)
24,063
49,458
(105,000)
30,097
102,755
Less : Allowance for diminution
in the value of investments
Total other long-term investments
25,395
72,658
In 2001, the Company sold its investment in Power Digital Card Co., Ltd. to its overseas
subsidiary company at cost. As at 31 December 2001, the Company has not yet received the
money from its subsidiary company. The Company has therefore recorded in “Amount due from
related parties” in 2001 balance sheet. During the first quarter of 2002, the subsidiary company
sold this investment to third party.
During the first quarter of 2002, the Company sold its investment in Power Digital
Communication Co., Ltd. to its overseas subsidiary company at cost.
13. PROPERTY, PLANT AND EQUIPMENT
(Unit : Baht)
CONSOLIDATED
Construction in
progress, equipment
under installation
and fixed
Motor vehicles assets in transit
Land and land
improvements
Buildings
and buildings
improvements
Machinery
and factory
equipment
Cost
31 December 2001
Acquisitions
Disposals
Transfer in (out)
107,810,251
400,000
1,371,060,248
(22,608)
5,045,594
2,370,234,140
(19,505,590)
172,284,902
173,963,526
2,199,301
(8,396,270)
7,697,609
9,116,528
11,263,383
6,693,926
258,723,729
(196,691,488)
4,038,878,619
260,923,030
(27,924,468)
-
31 December 2002
108,210,251
1,376,083,234
2,523,013,452
175,464,166
20,379,911
68,726,167
4,271,877,181
- 14 -
Office furniture
and equipment
Total
(Unit : Baht)
CONSOLIDATED
Land and land
improvements
Buildings
and buildings
improvements
Machinery
and factory
equipment
Office furniture
and equipment
Construction in
progress, equipment
under installation
and fixed
Motor vehicles assets in transit
Total
Accumulated depreciation
31 December 2001
Depreciation for the year
Disposals
-
228,808,633
61,055,558
(16,518)
931,833,067
261,233,601
(7,928,158)
58,249,198
18,629,111
(5,451,035)
4,349,375
1,973,101
-
-
1,223,240,273
342,891,371
(13,395,711)
31 December 2002
-
289,847,673
1,185,138,510
71,427,274
6,322,476
-
1,552,735,933
Net book value
31 December 2001
107,810,251
1,142,251,615
1,438,401,073
115,714,328
4,767,153
6,693,926
2,815,638,346
31 December 2002
108,210,251
1,086,235,561
1,337,874,942
104,036,892
14,057,435
68,726,167
2,719,141,248
Depreciation charged in the earnings statements
2001
323,155,279
2002
342,891,371
A part of depreciation of 2002 amounting to Baht 334 million (2001 : Baht 316 million) for the
consolidated has been charged to cost of sales and the remaining part of Baht 9 million
(2001 : Baht 7 million) has been charged to selling and administrative expenses.
(Unit : Baht)
THE COMPANY ONLY
Construction in
progress, equipment
under installation
and fixed
Motor vehicles assets in transit
Land and land
improvements
Buildings
and buildings
improvements
Machinery
and factory
equipment
Cost
31 December 2001
Acquisitions
Disposals
Transfer in (out)
107,810,251
400,000
1,371,060,248
(22,608)
5,045,594
2,370,234,140
(19,505,590)
172,284,902
173,963,526
2,134,085
(8,396,270)
7,697,609
9,116,528
11,263,383
6,693,926
194,147,811
(196,691,488)
4,038,878,619
196,281,896
(27,924,468)
-
31 December 2002
108,210,251
1,376,083,234
2,523,013,452
175,398,950
20,379,911
4,150,249
4,207,236,047
Office furniture
and equipment
Total
Accumulated depreciation
31 December 2001
Depreciation for the year
Disposals
-
228,808,633
61,055,558
(16,518)
931,833,067
261,233,601
(7,928,158)
58,249,198
18,629,111
(5,451,035)
4,349,375
1,973,101
-
-
1,223,240,273
342,891,371
(13,395,711)
31 December 2002
-
289,847,673
1,185,138,510
71,427,274
6,322,476
-
1,552,735,933
- 15 -
(Unit : Baht)
THE COMPANY ONLY
Construction in
progress, equipment
under installation
and fixed
Motor vehicles assets in transit
Land and land
improvements
Buildings
and buildings
improvements
Machinery
and factory
equipment
Net book value
31 December 2001
107,810,251
1,142,251,615
1,438,401,073
115,714,328
4,767,153
6,693,926
2,815,638,346
31 December 2002
108,210,251
1,086,235,561
1,337,874,942
103,971,676
14,057,435
4,150,249
2,654,500,114
Office furniture
and equipment
Total
Depreciation charged in the earnings statements
2001
323,155,279
2002
342,891,371
A part of depreciation of 2002 amounting to Baht 334 million (2001 : Baht 316 million) for the
Company only has been charged to cost of sales and the remaining part of Baht 9 million (2001 :
Baht 7 million) has been charged to selling and administrative expenses.
As at 31 December 2002, the gross carrying amount of fully depreciated machinery and factory
equipment and office equipment of the Company still in use amounts to Baht 108 million.
14. LAND OCCUPANCY RIGHTS
The balance as at 31 December 2002 represents the land occupancy rights of its subsidiary in the
People’s Republic of China. These rights are for 50 years.
15. SHORT-TERM LOANS FROM FINANCIAL INSTITUTIONS
Short-term loans from financial institutions of the Company and its subsidiary consist of loans
from both local banks and overseas financial institutions in both local currency and foreign
currency. The loans are mainly repayable within 3 months, and carry interest rates of 0.97 -2.75
percent per annum.
The Company has considered the foreign currency risk pertaining to the above loans. These
loans which are not hedged with derivative financial instruments are included in note 31.3.
- 16 -
16. OTHER PAYABLE
The outstanding balance as at 31 December 2002 and 2001 represents trade accounts payable
suspense for goods purchases which there are subject to changes in price, specifications and other
components. The Company has recorded the suspense account separately from normal trade
accounts payable.
17. OTHER CURRENT LIABILITIES
The balance as at 31 December 2002 and 2001 consist of :(Unit : Thousand Baht)
CONSOLIDATED
2002
2001
Advances received from customers
- for purchase of molds
- for preparation of production line
Money received from customers
pending for clear
Other payables
Other payable – forward contracts
Others
Total
THE COMPANY ONLY
2002
2001
55,231
2,961
13,907
55,231
2,961
13,907
66,885
53,812
72,477
40,615
291,981
56,203
68,550
40,233
55,916
234,809
66,885
6,665
72,477
8,862
213,081
56,203
68,550
40,233
11,766
190,659
18. CONVERTIBLE DEBENTURES
On 25 March 2002, the Company’s Annual General Meeting of shareholders approved the issue
and offering of not more than Baht 2,500 million of unsecured convertible debentures, or the
equivalent amount in any foreign currency, with a maturity of not more than 7 years. The offer
price is to be determined later and will depend upon the market situation at the time the
debentures are issued and offered for sale to institutional investors or specific groups of investors
in accordance with the Notification of the Securities and Exchange Commission.
- 17 -
On 6 December 2002, the Company issued 48,000 convertible debentures of USD 1,000 each,
amounting to USD 48 million, maturing in 3 years, redeemable on 6 December 2005, with the
following terms are conditions.
-
-
-
-
-
Description of convertible debenture
Form
Unsecured convertible debentures
Type
Debentures with registered holders
Maturity period
3 years from the date of issuance convertible debentures
Issue date
6 December 2002
Maturity date
6 December 2005
Offering value
USD 48 million
Offering amount
48,000 units
Face value
USD 1,000 per unit
Offering price
USD 1,000 per unit
Coupon rate
None
Conversion rate
1 convertible debenture can convert to 1,211.9444 ordinary shares
Right to convert into shares Convertible from 6 March 2003 to 6 November 2005 at a
conversion price of Baht 36 per share (at a fixed rate of
conversion of Baht 43.63 per USD 1).
Periodic redemption at the Annually. Redeemable at a price of 102.01% of principal on 6
option of the debenture
December 2003 and at 104.06% of principal on 6 December
holders
2004.
Redemption at the option of Redeemable within 2 years after the issue at a closing price of the
the issuer
shares on the Stock Exchange of Thailand for each of 30
consecutive trading days, which is at least 130 percent of the
convertible price.
Yield to maturity
2 percent per annum.
Rights, benefits, and other 1. The redemption is to be made at maturity date.
conditions
2. The debenture holders have the right to authorise the
Company to redeem the debentures before the maturity date
if there is a change in authorisation.
Alternative market
N/A
- 18 -
19. SHARE CAPITAL
On 25 March 2002, the Company’s Annual General Meeting of shareholders approved the
reduction of registered share capital from Baht 3,200 million to Baht 3,020 million, comprising
shares with a par value of Baht 10 and approved the increase registered share capital from Baht
3,020 million to Baht 3,780 million, comprising shares with a par value of Baht 10, for the
purpose of the conversion of the convertible debentures as described in Note 18.
On 26 April 2002, the Company registered the increase in its share capital with the Ministry of
Commerce. Registered share capital is Baht 3,780 million.
20. LEGAL RESERVE
Pursuant to section 116 of the Public Limited Companies Act B.E. 2535, 5 percent of the net
earnings has been set aside as part of the statutory reserve in order to increase the amount of the
reserve to the level of 10 percent of the registered share capital. The statutory reserve could not
use for dividend payment.
21. EXCHANGE GAINS (LOSSES)
(Unit : Thousand Baht)
Realised exchange gains (losses)
Unrealised exchange losses
Exchange gains (losses) – net
FOR THE YEARS ENDED 31 DECEMBER
CONSOLIDATED
THE COMPANY ONLY
2002
2001
2002
2001
29,963
155,178
(330,586)
49,903
(18,887)
(55,043)
(48,565)
(55,043)
(25,080)
136,291
(385,629)
1,338
The unrealised exchange losses for the year 2002 included a Baht 10 million gains which is the
result of netting the Company’s unrealised exchange losses against the subsidiary’s unrealised
exchange gains from translation under forward contracts using the exchange rate at the balance
sheet date. These forward contracts were made for square hedge purpose between the Company
and its subsidiary.
- 19 -
22. DIRECTOR’S REMUNERATION
Directors’ remuneration represents the benefits paid to the Company’s directors in accordance
with section 90 of the Public Limited Companies Act, exclusive of salaries and related benefits
payable to Executive Directors.
23. CORPORATE INCOME TAX
Corporate income tax has been calculated at the rate of 25 percent (2001 : 30 percent) on the nonBOI promoted earnings after adding back provisions and certain expenses which are disallowable
for tax computation purposes.
24. RECONCILIATION OF DILUTED EARNINGS PER SHARE
Basic earnings per share
Net earnings for the year of ordinary shareholders
Effect of dilute potential ordinary shares
Convertible debentures
Diluted earnings per share
Net earnings for the year of ordinary sharesholders
assuming the conversion of diluted potential
ordinary shares
Net earnings
Million Baht
2002
Weighted average
number of ordinary shares
Million share
1,596.9
302.0
3.5
4.1
1,600.4
306.1
Earnings
per share
Baht
5.29
5.23
25. NUMBER OF EMPLOYEES AND RELATED COSTS
2002
6,345
935,593
Number of employees at the end of year
Employee costs (Thousand Baht)
2001
6,716
894,961
26. DIVIDEND
On 25 March 2002, the Company’s Annual General Meeting of shareholders approved the
payment of dividend of Baht 3 per share from its earnings for the year 2001 to the Company’s
shareholders, totalling Baht 906 million. The Company paid dividend on 22 April 2002.
- 20 -
On 30 September 2002, the Company’s Board of Directors Meeting approved the payment of
interim dividend of Baht 1.5 per share from its earnings for the six-month period ended 30 June
2002 to the Company’s shareholders, totalling Baht 453 million. The Company paid dividend on
30 October 2002.
27. PROVIDENT FUND
The Company and its employees jointly established a provident fund as approved by the Ministry
of Finance in accordance with the Provident Fund Act B.E. 2530. The fund is contributed by
both employees at the rate of 2 percent and the Company at the rate of 2 percent and managed by
TISCO Securities Company Limited. The fund will be paid to the employees upon termination in
accordance with the rules of the fund. Total contributions of the Company for the current year
amounted to Baht 1.1 million (2001 : Baht 1.2 million).
28. BOARD OF INVESTMENT PRIVILEGES
The Company was granted the following tax privileges by the Board of Investment for certain
specified categories of products, under the Investment Promotion Act B.E. 2520 :28.1 Exemption from corporate income tax on net profit for periods of 3 to 8 years commencing
as from the date of first earning operating income.
28.2 Dividends paid from the promoted operations which are exempt from corporate income tax
are in turn exempted from inclusion in the determination of corporate income tax.
28.3 Exemption from import duty on the raw and essential materials imported for use
specifically in producing for export.
28.4 Exemption from import duty on items imported for re-export.
28.5 Exemption from import duty on machinery as approved by the Board.
28.6 An allowance of five percent of the increment in export income over that of the preceding
year is deductible from taxable income for a period of ten years commencing as from the
date of earning operating income.
28.7 A fifty percent reduction of the normal rate of corporate income tax on net profit, of for a
period of 5 years after the expiry of the corporate income tax exemption period.
- 21 -
To be entitled to these rights and privileges, the Company must comply with conditions specified
in the promotional certificates.
The Company’s operating revenues for the year ended 31 December 2002 are below divided
according to whether the revenues are from promoted and non-promoted activities :(Unit : Million Baht)
Promoted
Non-promoted
Total
Revenues
Sales
Local
507
5
512
Overseas
29,870
1,995
31,865
Total
30,377
2,000
32,377
29. FINANCIAL INFORMATION BY SEGMENT
The Company’s operations involve the single industry segment of manufacturing and distributing
electronic equipment.
Information for the years ended 31 December 2002 and 2001 is below presented by geographic
segment :(Unit : Million Baht)
Local sales
2002
2001
Sales
- external
- related parties
512
-
878
-
512
878
For the years ended 31 December 2002 and 2001
Overseas sales
Total
Elimination
2002
2001
2002
2001
2002
2001
23,940
16,849
40,789
25,554
6,706
32,260
Earnings from operations
Other income
Expenses and interest expenses
Corporate income tax
Net earnings
24,452
16,849
41,301
26,432
6,706
33,138
(8,937)
(8,937)
(824)
(824)
Grand total
2002
2001
24,452
7,912
32,364
2,309
138
(844)
(6)
1,597
26,432
5,882
32,314
2,597
199
(1,175)
(7)
1,614
The Company used the gross profit margin + 2% basis to set transfer prices between the
geographic segment.
- 22 -
(Unit : Million Baht)
2002
2001
As at 31 December 2002 and 2001
Overseas
Total
2002
2001
2002
2001
5,094
3,788
4,448
4,036
1,911
2
73
1
7,005
3,790
4,521
4,037
(2,440)
-
(180)
-
4,565
3,790
4,341
4,037
2,645
1,634
13,161
2,805
2,458
13,747
74
1,191
3,178
11
764
849
2,719
2,825
16,339
2,816
3,222
14,596
(147)
(2,587)
(206)
(386)
2,719
2,678
13,752
2,816
3,016
14,210
Local
Assets
- Trade accounts receivable, net
- Inventories, net
- Property, plant and equipment,
net
- Others
Total assets
Elimination
2002
2001
Grand total
2002
2001
30. COMMITMENT AND CONTINGENT LIABILITIES
30.1 Financial derivatives
a)
Forward foreign exchange contracts
As at 31 December 2002, the Company and its subsidiary had outstanding forward
foreign exchange contracts outstanding for the purchase of USD 100 million at
ranging from Baht 42.47 to Baht 44.215 per USD 1 (2001 : USD 123 million) and the
sale of USD 110 million at ranging from Baht 42.50 to Baht 44.60 per USD 1 (2001 :
USD 138 million). These foreign exchange contracts generally have maturities of
less than 1 year and the counterparties to the transactions are financial institutions.
b)
Interest Rate Swap Transaction Agreement
A subsidiary of the Company has entered into USD 15 million Interest Rate Swap
Transaction Agreement with an oversea bank. The contract is for a period of 1 year,
maturing in April 2003. At the maturity date, the subsidiary is required to pay
interest to the bank at 12 month LIBOR (as at 31 December 2002, the 12 month
LIBOR was 1.48625 percent per annum) and the bank is required to pay interest to
the subsidiary at a fixed rate of 4.53 percent per annum.
c)
Option agreements
As at 31 December 2002, a subsidiary of the Company has outstanding option
contracts under which it will pay USD 180 million and receive Baht 7,900 million on
maturity dates between 17 January 2003 and 18 June 2003.
- 23 -
The fair value of the option contracts was USD 179.9 million. Such fair value was
based on forward exchange rate quoted by banks.
As at 31 December 2002, the exchange rate announced by the BOT is as following :Currency
USD
Average buying rate
(Baht per 1 USD)
43.0947
Average selling rate
(Baht per 1 USD)
43.3039
30.2 Guarantees
a)
As at 31 December 2002, there were outstanding bank guarantees of approximately
Baht 97.4 million (2001 : Baht 102 million) issued by banks on behalf of the
Company in respect of certain performance bonds as required in the normal course of
the Company’s business. Its parent company has issued a letter of awareness to a
bank for credit facilities.
b)
As at 31 December 2002, the Company has issued a letter of guarantee of USD 16.9
million (2001 : USD 25.4 million) to a financial institution to secure against credit
facilities as granted by those financial institutions to a subsidiary company and a
related company.
30.3 Sale of collection rights over trade accounts receivable
As discussed in Note 6, as at 31 December 2002 the Company had contingent liabilities to
banks amounting to Baht 474 million (2001 : Baht 1,385 million) as a result of its sale of
collection rights over trade accounts receivable are unable to repay their debt to the banks.
30.4 Agreements for hire of production of molds
As at 31 December 2002, the Company had outstanding commitments of Baht 32.1 million
with overseas suppliers in respect of agreements for hire of production of molds.
30.5 Sales and marketing services agreement
As at 31 December 2002, a subsidiary company had an outstanding commitment of SGD
1.2 million under a sales and marketing services agreement.
- 24 -
30.6 Commitment
As at 31 December 2002, its subsidiary had outstanding commitments of approximately
RMB 57.3 million in respect of agreements to construct a plant in the People’s Republic of
China.
31. FINANCIAL INSTRUMENTS
31.1 Financial risk management and policies
The Company and its subsidiaries are exposed to risks from changes in market interest rates
and in currency exchange rates and from nonperformance of contractual obligations by
counter parties. The Company and its subsidiary use derivative instruments, as and when
it, considers appropriate, to manage such risks.
31.2 Credit Risk
It is the Company and its subsidiary’s policy to enter into financial instruments with
creditworthy counterparties. Therefore the Company and its subsidiary do not expect any
material losses to arise from the counterparties’ failure to perform their obligations under
the financial statements. The Company’s and its subsidiary’ revenues are generated in the
technology industry, which is characterised by short product life cycles and rapid advances
in manufacturing technologies. The maximum exposure to credit risk is the carrying
amount of the financial assets less provision for losses as stated in the balance sheets.
With respect to off-balance sheet derivative financial instruments, it is the Company’s and
its subsidiary’s policy to enter into financial instruments with creditworthy counterparties.
Therefore, the Company and its subsidiary do not expect any material losses to arise from
the counterparties’ failure to perform their obligations under the financial instruments.
31.3 Foreign currency risk
The Company and its subsidiary’s exposure to foreign currency risk relates primarily to its
receivable, payable, loans and convertible debentures which are denominated in foreign
currencies.
- 25 -
As at 31 December 2002 and 2001, the Company’s net foreign currency assets and
liabilities that were not hedged by derivative financial instruments were as follows.
Million YEN
2002
2001
Foreign currency assets
- Due within one year
- Over one year
Foreign currency liabilities
- Due within one year
Net foreign currency assets (liabilities)
5
3
(91)
(86)
Million USD
2002
2001
(2,842)
(2,839)
116
Million NTD
2002
2001
-
-
149
-
16
-
(31)
85
(11)
138
(48)
(32)
(48)
(48)
Million EURO
2002
2001
6
(1)
5
(0.6)
(0.6)
Million SGD
2002
2001
0.4
0.6
0.2
-
0.4
0.8
31.4 Interest rate risk and liquidity
The interest rate risk is the risk that future movements in market interest rates will affect
the results of operations of the Company and its subsidiary and their cash flows. The
Company’s and its subsidiary’s exposure to interest rate risk related primarily to their
deposits at banks, short-term investments, loans to related parties and loans from financial
institutions. The majority of these financial assets and liabilities carry interest rates which
vary in line with market rates. However, one subsidiary of the Company has entered into
interest rate swap agreements to hedge such interest rate risk, as discussed in note 30.1 b).
The cash flow requirements related to the Company and its subsidiary’s forward contracts
and interest rate swap are limited to the net differences between the contracted forward rate
and the spot rates prevailing at their settlement dates, and the net differences between the
floating rate and fixed rate at the maturity date, respectively.
Cash and cash equivalents as at 31 December 2002 and 2001 are as follows :-
Cash on hand
Cash at banks
CONSOLIDATED
2002
2001
0.4
0.3
982.2
832.3
832.7
982.5
- 26 -
(Unit : Million Baht)
THE COMPANY ONLY
Interest rate
2002
2001
0.4
0.3
66.5
520.1
Market rate
66.9
520.4
31.5 Fair value
Fair value is defined as the amount at which the instrument could be exchanged in a current
transaction between knowledgeable willing parties in an arm’s length transaction. Fair
values are obtained from quoted market prices, discounted cash flow models or net asset
value as appropriate.
The following methods and assumptions are used to estimate the fair value of each class of
financial instruments.
Cash on hand and at banks, current investments, accounts and notes receivable - the
carrying values approximate their fair values due to the relatively short-term maturity of
these financial instruments.
Investment in shares - the fair values of publicly traded instruments are estimated based on
the last bidding price of the Stock Exchange of Thailand, all other instruments for which
there are no quoted market prices, a reasonable estimate of fair value has been calculated
based on the underlying net asset base for such investment, which approximates their
carrying values.
Accounts payable - the carrying amounts of these financial liabilities approximates their
fair values due to the relatively short-term maturity of these financial instruments.
32. PRESENTATION
The presentation of these financial statements have been made in compliance with the
stipulations of the notification of the Commercial Registration Department dated 14 September
2001 as empowered under the Accounting Act. B.E. 2543.
Certain amounts in the financial statements for the year ended 31 December 2001 have been
reclassified to conform to the current year classifications, with no effect on previously reported
net earning or shareholders’ equity.
33. APPROVAL OF FINANCIAL STATEMENTS
These financial statements have been approved by the Company’s directors.
- 27 -