2013 annual report - 56-1.com · production capacity of cassava starch products at the company’s...

Annual Report

2013 Annual Report

21/59,21/63-64 Thai Wah Tower 1, 20 - 21 Floor, South Sathorn Road,Thungmahamek, Sathorn, Bangkok 10120Tel : 02-285-0040 Fax : 02-285-0270E-mail : [email protected] Home Page : http://www.thaiwah.com

Thai Wah Starch Public Company Limitedth st

Annual Report

Thai Wah Starch Public Com

pany Limited Thai Wah Starch Public Company Limited

Message from the Management 3

Financial Highlights 5

Management Discussion and Analysis (MD&A) 8

Board of Directors and Managements of the Company 12

Details of Position of Directors and Executives 19

Abbreviation 21

Policy and Business Overview 22

Subsidiaries or Related Companies in which the Company

has shareholdings exceeding 10 percent 25

Nature of the Business 31

Risk Factors 36

Contents

General Information 38

Major Shareholders 39

Dividend Payment Policies and Remuneration Policy 40

Management 41

Corporate Governance 48

Corporate Social Responsibility 59

Internal Control and Risk Management 64

Opinion of the Board of Directors on

the Company’s Internal Control 67

Report of the Audit Committee 68

Board of Directors’ Responsibilities for

the Company’s Financial Statements 70

Financial Statements 72

Persons with Mutual Interest and

Connected Transactions 120

Reference 124

� Annual Report �013

3THAI WAH STARCH PUBLIC COMPANY LIMITED

2013 was a very challenging year for the Company; its

business was carried out in unfavourable circumstances

including, for instance, a global economic slowdown,

fluctuations in the strength of the Baht and an increase

in the cost of key raw materials caused by a decline in

the volume of cassava roots distributed to the market

and the Thai Government’s price intervention policy. The

Company was also affected by a shortage in the water

supply used in its manufacturing process caused by

severe nationwide droughts which were far worse than

previously experienced, especially in the north-eastern

part of Thailand. Large dams had a decrease in their

water reserves and many parts of the country were

announced as drought-affected areas. This had a direct

impact on the Company’s manufacturing activities

especially at its factory in Kalasin province to such an

extent that the factory had to temporarily close down

during the second quarter of the year because of

the shortage of water, the core component in

the manufactur ing procedure. In spite of these

uncontrollable events, the Company made a profit of

Baht 323 million, a slight decrease of 5% compared to

the previous year. With its vast experience in this

industry, the Company could prepare itself to tackle

these unexpected situations and achieved satisfactory

results in the end. In summary of the operating results in

2013, the Company had a net income of Baht 251

million, a decrease of 19% compared to the previous

year. Such a decrease was mainly due to the decrease

in transactions not related to the Company’s ordinary

business, for example the Company had profits from

debt restructuring and from the reversion of a loss from

land depreciation in 2012.

In 2013, the Company had sales revenue of Baht 3,362

million, a slight decrease of 6% against the previous

year, although the factory at Kalas in province

suspended its manufacturing activities in the second

quarter of 2013. The export price of cassava starch from

Thailand in 2013 rose by an average of 4% compared

to the previous year, which was consistent with the

Message from Management

market-oriented pricing mechanism. China’s demand for

the Company’s products declined during the first half of

the year because of the economic slowdown which

increased again in the third quarter of the year.

Meanwhile, the export price of cassava starch from

Vietnam was higher. These factors caused an increase

in the price of cassava starch.

With its vision to become the leading manufacturer and

exporter of good-quality cassava starch in ASEAN, the

Company has committed itself to regularly maintaining

a quality standard of product by running a quality

control system throughout the manufacturing procedure,

starting from the selection of raw materials until the last

stage of the process from which the finished products

are made. Using state-of-the-art technology, the

Company can better control the quality of its products

as well as increase its production efficiency. The

Company has strongly adhered to punctuality in delivery

in order to provide the best service possible and satisfy

its customers. In recognition of the importance of the

Company’s product quality and integrity in doing

business over the past 67 years, the products carrying

the “Rose” logo have always been a favourite choice

for consumers and are widely recognised for their

quality in the cassava starch industry, both locally and

abroad.

Increasing production capacity is another key mission for

the Company so that it can expand its customer and

manufacturing bases in ASEAN by first increasing the

production capacity of cassava starch products at the

Company’s local factories in the Udonthani, Kalasin and

Nakhon Ratchasima provinces. This commitment is

expected to be fulfilled at the end of 2016. In regards

to its long-term prospects, the Company is looking for

an opportunity to grow its footprint in other countries in

ASEAN, in addition to its existing manufacturing base in

Vietnam.


Ms. Pinyada Viriya Mr. Umnad Sukprasongphol

Chairman of the Board Joint Managing Director

The Company foresees that many external factors may

affect its operating results in 2014, for instance, the

national political uncertainty and the potential drought

that may affect the volume of fresh cassava roots in

the market and the Company’s production capacity.

However, the Company expects to see positive factors

too, for example. economic recovery in its key importer,

China, and the anticipated devaluation of the Baht

which wi l l enhance the Company’s pr ic i ng

competitiveness in the world market. In the light of its

experience in this industry and the strong commitment

of its management, coupled with the dedication and

collaboration of all of its staff members, the Company

will be able to achieve its goals and overcome any

difficulties.

The Board of Directors has resolved to propose the

payment of dividends for the year 2013 at Baht 2 per

share, representing a dividend pay-out rate of 71.68%

against net income. The dividend payment requires

approval f rom the Annual General Meet ing of

shareholders to be held on 23 April 2014.

On behalf of the Board of Directors of the Company, I

would like to thank all stakeholders and business

partners for their support and confidence in us, as well

as all executives and employees for their devotion in

performing their duties, resulting in the Company’s

continued success. We are expecting to expand our

business and engage in social, community and

environmental development activities at the same time

to ensure our sustainable growth.

In relation to the development of the Company as an

organisation, the Company has continued to improve

the performance of its staff members across all

departments by setting performance standards and

incorporating the use of computer systems in various

parts of its operations. Human resources and labour skill

developments have also been promoted to ensure that

employee competitiveness and growth are on the same

track as the organisation’s development.

The Company recognises that, to ensure sustainable

growth, the growth of its organisation must involve

environmental and social improvement. The Company is

installing an additional biogas system at its factory in

Nakhon Ratchasima province after completing the

installation of biogas systems at its factories in Udonthani

and Kalasin provinces in 2013. The biogas system was

first introduced in the Company’s factory in Vietnam in

2011. The system reduces not only air pollution caused

by the smell of wastewater treatment ponds but also

greenhouse gas emissions. Biogas, as a substitute for

furnace oil in the manufacturing procedure, is an

energy-saving alternative which enables the most cost-

efficient use of resources. The Company also has a

policy to improve nearby farmers’ knowledge of

cassava plantation by educating them about the

varieties of cassava seedlings and suggesting pesticide

methods. In 2013, Thai Nam Tapioca Company Limited,

a subsidiary of the Company, received an honourable

award for its corporate social responsibility standards

from the Ministry of Industry of Thailand.

�THAI WAH STARCH PUBLIC COMPANY LIMITED

Financial Highlights Information from Consolidated Financial Statement

(Unit: Million Baht)

2013 2012 2011

(restated) (restated)

Total current assets 1,580 1,455 1,486

Total non-current assets 1,044 967 810

Total Assets 2,624 2,422 2,297

Total current liabilites 222 180 306

Total non-current liabilites 82 73 61

Total Liabilities 304 253 367

Total Shareholders’ equity 2,320 2,169 1,930

Sales 3,362 3,582 3,364

Dividend income 4 3 294

Gain on debt restructuring - 16 1,254

Share of gain from investments in associated companies - 11 88

Reversal of an impairment loss for investment property - 19 -

Total revenues 3,451 3,683 5,098

Cost of sales 2,784 2,916 2,690

Total expenses 3,124 3,310 3,389

Operating profit 323 338 428

EBITDA 361 417 1,730

Earnings before finance cost and income tax expense 327 392 1,709

Finance cost 2 - 81

Income tax expense 74 83 55

Net profit for the year 251 309 1,573

Net profit attributable to non-controlling interest 32 33 39

Net profit attributable to equity holders of the Company 219 276 1,534

Otherinformation

Earnings Per Share (Baht) 2.79 3.52 19.53

Dividend Per Share (Baht) *2.00 1.00 -

Book Value Per Share (Baht) 29.54 27.62 24.58

Remark : * To be considered and approve during the Annual General Meeting


Financial Ratios

2013 2012 2011

(restated) (restated)

Profitabilityratio

Gross profit margin (%) 17 19 20

Operating profit ratio (%) 10 9 13

Other income ratio (%) 0.12 1.47 25.12

Cash to operating profit ratio (%) 49 88 89

Return on Total Revenue (%) 7 8 31

Return on Total Equity (%) 11 15 151

Efficiencyratio

Return on Total Assets (%) 10 13 49

Return on fixed assets ratio (%) 54 85 573

Assets turnover ratio (times) 1.37 1.56 1.58

Liquidityratio

Liquidity ratio (times) 7 8 5

Quick liquidity ratio (times) 5 6 4

Cash flow liquidity ratio (times) 0.79 1.23 0.18

Average collection period (day) 35 36 46

Average Sale period (day) 39 31 34

Average payment period (day) 4 4 5

Cash cycle (day) 71 63 75

Financialpolicyratio

Debts to equity ratio (times) 0.13 0.12 0.19

Interest coverage ratio (times) 163 850 6

Repayment ability ratio (cash basis) (times) 0.67 1.20 0.44

Dividend payout ratio (%) 72 28 -


Sales of the company in Vietnam

Sales of the companies in Thailand

Sales Revenue (Unit: Million Baht)

4,000 3,500 3,000 2,500 2,000 1,500 1,000

500 0

2011 2012 2013

Sales portion of the companies in Thailand

3,000

2,500

2,000

1,500

1,000

500

0

2011 2012 2013

Statements of Financial Position

3,364 3,582 3,362 702 21%

2,662 79%

676 19%

2,906 81%

765 23%

2,597 77%

Domestic sales Export sales

27%

73%

26%

74%

22%

78%

Total 2,662 million Baht Total 2,906 million Baht Total 2,597 million Baht

Loan and accrued interest Account payables and other liabilities Total Equity

Liabilities and equity

Working capital Other asset Property, Plant and Equipment

Asset

Asset Asset Asset Liabilities and equity



529

1,457

311

1,930

300 67

537

1,409

476

2,169

253

521

1,531

572

2,320

269 35


2011 2012 2013


Management Discussion and Analysis (MD&A) Overview of operations

In 2013, the Company was affected by various external

factors, i.e. drought in the North-Eastern part of Thailand

that affected the agricultural sector, fluctuations in the Baht,

and the Thai Government’s price intervention policy that

caused an increase in the cost of raw materials.

Notwithstanding those effects, the Group had sales of

Baht 3,362 million, a slight decrease of 6% compared to

the previous year. The Group’s net income was Baht

251 million, a decrease of Baht 58 million or 19%, which

was mainly due to a decrease in transactions not

related to the ordinary business by Baht 50 million,

whereas, the operating profit decreased by Baht 16

million or 5%. This table shows details of the operating

results of the Group, both in Thailand and Vietnam.

Unit: Baht million

Operating Sales Operating

results revenue % profit %

Thailand 2,596 77 219 68

Vietnam 766 23 104 32

Total 3,362 100 323 100

Operating results in Thailand

The Group had sales revenue of Baht 2,596 million, a

decrease of 11% compared to the previous year, which

was due to the temporary suspension of manufacturing

activities at the factory in the Kalasin province because

of a shortage in water supply caused by drought. As a

result, the sales volume of cassava starch dropped by 19%.

Considering that drought is an external factor beyond its

control, the Group has set up measures to alleviate any

contingent impact by planning to construct additional

reservoirs. In addition, the Group is now studying and

improving the machinery and manufacturing procedure to

reduce the use of water and recycle the used water.

The export selling price of cassava starch rose by 5%

compared to the previous year was due to market-

oriented pricing mechanisms and the higher offering

price of cassava starch exported by Vietnam because

of a shortage in raw materials.

In 2013, the Company and its subsidiaries in Thailand had

an operating profit of Baht 219 million, which was close

to the previous year’s amount of Baht 220 million,

although the Group were affected by the following: (i)

drought that led to a decrease in sales volume, and (ii) a

10% increase in the cost of raw materials due to the

reduced volume of fresh cassava roots in the market and

the Thai Government’s price intervention policy. On the

contrary, the Group’s selling and administrative expenses

decreased by 13%, which was mainly due to a decrease in

the freight and transportation expenses. In addition, the

Company had an increase in foreign earnings caused by

the depreciation of the Baht in the second half of the

year. As a result, the operating profit generated by the

Company and its subsidiaries in Thailand was close to the

previous year.

Operating results in Vietnam

Tayninh Tapioca Company Limited had sales revenues of

Baht 766 million, an increase of 13% compared to the

previous year. This was due to a 26% increase in the

sales volume of glucose products arising from a growing

demand for glucose products in Vietnam caused by the

expansion of the customer’s production capacities.

However, the sel l ing pr ice of glucose products

decreased by 2% due to price competition in the

Vietnamese market as a result of the growing number

of competitors.

For the starch business in Vietnam in year 2013, a

shortage in fresh cassava roots led to a decrease in the

sales volume of starch of Tayninh Tapioca Limited, while

the cost of raw materials increased. All of these brought

about a decrease in the overall operating profit

compared to the year 2012.

Tayninh Tapioca Company Limited had an operating

profit of Baht 104 million, a decrease of 12% compared

to the previous year. This was mainly due to a 20%

increase in the cost of raw materials arising from the

shortage in fresh cassava roots in Vietnam. Also,

the selling and administrative expenses increased by

24% because of the expansion of its customer base for

glucose products in Vietnam.


Profits not related to the ordinary business

In 2013, the Group had profits not related to the

ordinary business of Baht 4 million, a decrease of

Baht 50 million or 93% compared to the previous year.

The profits not related to the ordinary business consisted

of the following:

• Gain on a reversion of an impairment loss for

investment property decreased by Baht 19 million

because the newly assessed price of land in 2012

was higher than the previous recorded book value

and, therefore, the impairment loss was reversed.

• Gain on debt restructuring decreased by Baht 16 million

because there remained only one tranche of creditors

under the debt restructuring scheme in 2012 after

the majority of debt had been restructured in 2011.

Financial position of the Company

Assets

As at 31 December 2013, the Group had total assets of

Baht 2,624 million, which consisted of the following key

components: cash and cash equivalents of Baht 770

million (accounting for 29%), trade accounts receivable and

other accounts receivable of Baht 346 million (accounting

for 13%), inventory of Baht 420 million (accounting for

16%), and property, plant, equipment and investment

property of Baht 752 million (accounting for 29%).

Total assets increased from the previous year by Baht

202 million or 8%, which was mainly due to a 40%

increase in inventory resulting from the production and

storage of finished products waiting for sale in the

following quarter. In addition, there was an increase in

capital expenditure relating to: (i) the replacement of

old machinery in order to improve the production

efficiency, and (ii) investments in biogas systems for

energy saving and efficient use of resources.

• Cashandcashequivalents

The Group’s balance of cash and cash equivalents

as at 31 December 2013 was Baht 770 million, which

consisted of cash held by Thai Wah Starch Public

Company Limited and its subsidiaries. The starch

business requires an adequate amount of cash to be

used as working capital during the manufacturing

season.

• Trade accounts receivable and other accounts

receivable

Most trade accounts receivable were settled

according to the normal credit term. The average

debt collection period was 35 days. The results of

debt collections were close to the previous year.

• Inventory

Finished products accounted for 85% of the

inventory. The turnover period of inventory was

approximately 39 days, which was close to the

previous year.

• Capitalexpenditure

Property, plant and equipment increased from the

previous year by Baht 96 million or 20%. The increase

was mainly due to an increase in investment in

biogas system instal lations at the Company’s

factories in Udonthani and Kalasin provinces, which

were completed in 2013. There were also expenses

for replacing old machinery and equipment used in

the Company’s factories to improve production

efficiency. The biogas system installation at the

factory in Udonthani was financed by loans from

financial institutions, while the replacement of

machinery and equipment was supported by the

Company’s cash balance.

Security collaterized against the restructured debt

was completely redeemed on 28 February 2013 and

all outstanding legal claims relating to that debt

were dismissed by the court’s orders.

• Sourceoffunds

As at 31 December 2013, the debt to equity ratio of

the Group was 0.13 times, which was close to the

previous year. The interest coverage ratio was

163 times as the Group had sufficient cash flow from

operating activities to pay interest. Liabilities relating

to the Company’s ordinary business formed a major

part of total l iabil it ies. They consisted of the

following: trade accounts payable and other

accounts payable accounting for 48%, provisions for

employees’ benefits according to Accounting

Standard No.19 accounting for 18%, and loans

granted to the subsidiaries from financial institutions

10 Annual Report �013

accounting for 12%. Total liabilities increased from

the previous year by Baht 51 million, which was

mainly due to an increase in loans granted to the

subsidiaries to invest in the biogas system installation.

The shareholders’ equity was Baht 2,320 million, an

increase of Baht 151 million from the previous year,

which was mainly due to an increase in net income

in 2013, offset with dividends paid by the Company

and its subsidiaries.

Liquidity

Cashflow

The cash flow received from operating activities of the

Group was Baht 159 million, while the operating profit

was Baht 323 million. The difference of Baht 164 million

resulted largely from an investment in inventory of

Baht 122 million which was carried out in order to

create an increased stock of products at the end of

2013 for sale in the following quarter which were being

covered by forward contracts. The net cash flow used

in investing activities of Baht 123 million constituted cash

payments to acquire assets for the biogas systems and

to replace old machinery and equipment in order to

improve production efficiency. The net cash flow used in

financing activities was Baht 74 million, which was

mainly due to the dividends paid by the Company and

its subsidiaries, net of the receipt and repayment of

loans by its subsidiaries during the period. The Group

had cash balance of Baht 765 mi l l ion as at

31 December 2013 for use to support its operations in

the following year.

Keyliquidityratios

The l iqu id i ty rat io and the qu ick rat io as at

31 December 2013 were 7 t imes and 5 t imes,

respectively, which was close to the previous year. These

figures indicate that the Company has maintained high

liquidity and a stable financial position.

CrucialfactorsthatmayaffecttheGroup’soperationsor

financialconditioninthefuture

The factors that may affect the Group’s operations in

2014aresetoutasfollows:

• From an analysis of trends in the economy in 2014

conducted by the Office of Agricultural Economics,

there is a forecast that the volume of cassava

products will drop, which is consistent with the results

of the last survey conducted on 12 December 2013

by four associations (the Thai Tapioca Trade

Association, the Association of Thai Tapioca Product

Factories, the Association of Tapioca Manufacturers

in the North-Eastern Part of Thailand and the Thai

Tapioca Starch Association). The volume of fresh

cassava roots in 2014 is expected to decrease to

26 million tons, while the previous survey suggested

that the annual volume would be 28.7 million tons.

The Company predicts that droughts, climate

change and pest outbreaks may cause a decrease

in the volume of fresh cassava roots in the market.

Therefore, the shortage in fresh cassava roots is

expected to have a continued impact in 2014.

• Considering that the shortage in the water supply

caused by droughts may affect the volume of

production, the Company intends to cushion such

impact by constructing additional reservoirs and is

now studying improvements to machinery and

manufacturing procedure that will reduce the use of

water.

• The proceeds in US dollars derived from the export

of starch form a substantial part to the Company’s

revenues. Therefore, the foreign exchange rate

fluctuations may directly affect its revenues, including

its revolving cash flow. Taking into account this issue,

the Company has entered into the contracts to

hedge against the foreign exchange rate risk.

1� Annual Report �013

Ms. Pinyada Viriya* Chairman 40Years

Highest Educational Background/Director Certificate Program

๐ Master of Accounting, Chulalongkorn University

๐ Certified Public Accountant of Thailand

๐ New Role of the Chairman under Globalization - 2012

Thai Institute of Directors Association (IOD)

๐ Director Accrediation Program (DAP) - Class 70/2008,


Percentage of Shareholding in the Company

๐ 0.14% (108,700 Shares)

Family Relation between Management

๐ No relation

Working Experiences for the Past 5 years

Present

๐ Chairman

Joint Managing Director (Corporate & Finance)

Nomination and Remuneration Committee Member

Thai Wah Starch Public Company Limited

๐ Director

Subsidiaries and associated companies

of Thai Wah Starch Public Company Limited

2003-2011

๐ Financial Controller

Thai Wah Food Products Public Company Limited

Board of Directors As at 31 December 2013

Mr. Umnad Sukprasongphol* Director 50Years


๐ Master of Business Administration,

Central State University

(Current name is University of Central Oklahoma)

๐ Director Certification Program (DCP) - Class 15/2011,



๐ 0.10% (79,700 Shares)


๐ No relation


Present

๐ Director

Joint Managing Director (Business Operation)


๐ Director



๐ Secretary General - Board of Executive Committee

The Thai Tapioca Trade Association (TTTA)

Remark: * Authorized directors of the Company according to the Affidavit


Ms. Tawiratt Narasuj IndependentDirector 38Years


๐ Bachelor of Accounting,

Chulalongkorn University




๐ None


๐ No relation


Present

๐ Independent Director

Audit Committee Chairman


๐ Accounting Manager

Thaicom Public Company Limited

2009-2011

๐ Accounting and Finance Manager

Fujitsu Systems Business (Thailand) Limited

2007-2009

๐ Accounting and Finance Manager

True Fitness Company Limited

Mr. Somchai Towiwat IndependentDirector 58Years



Thammasat University


๐ None


๐ No relation


Present


Audit Committee Member

Nomination and Remuneration Committee Chairman


1989-Present

๐ Managing Director

Artivat Company Limited


Ms. Sirivan Skulkerevathana* Director 57Years



Indiana University, USA




๐ None


๐ No relation


Present

๐ Director

Senior Assistant Vice President - Finance


๐ Director



๐ Director

Platinum Enterprise Limited

๐ Director

Tapioca Starch Limited

2008-2012

๐ Senior Assistant Vice President - Finance

Company Secretary

Laguna Resorts & Hotels Public Company Limited

2001-2012

๐ Director

Certain related companies of Laguna Resorts

& Hotels Public Company Limited

Mr. Teerawut Charoensuk IndependentDirector 45Years




๐ Internal Control over Financial Reporting,

The Stock Exchange of Thailand


๐ None


๐ No relation


Present


Audit Committee Member

Nomination and Remuneration Committee Member


๐ Engineer 8

Industrial Estate Authority of Thailand


1�THAI WAH STARCH PUBLIC COMPANY LIMITED

Remark : * Authorized directors of the Company according to the Affidavit

** Current name is Thai Wah Starch Public Company Limited

(1) Mr. Hwee Liang Tee has resigned from his directorship in the Company with effect from April 29, 2013 and the Board of

Directors’ meeting of the Company has approved the appointment of Mr. Ariel P Vera, a new director of the

Company, to replace Mr. Hwee Liang Tee with effect from August 14, 2013

Mr. Thawan Petchlawlian* Director 35Years


๐ Bachelor of Accounting,

Kasetsart University

๐ Role of the Nomination and Governance

Committee (NGC) - Class 1/2011,





๐ 0.00% (100 Shares)


๐ No relation


Present

๐ Director


๐ Financial Controller


2009-2012

๐ Joint Managing Director (Corporate and Finance)

Universal Starch Public Company Limited**

2007-2012

๐ Director

Subsidiaries and Associated Companies

of Universal Starch Public Company Limited**

2007-2009

๐ Senior Accounting Manager

Universal Starch Public Company Limited**

Mr. Ariel P Vera* 1

Director 61Years



National University of Singapore

๐ Bachelor of Science in Business Administration,

University of the East, Philippines

๐ Certified Public Accountant of Philippines


๐ 0.07% (70,000 Shares)


๐ No relation


Present

๐ Director


๐ Director ๐


and certain related companies

๐ Director


๐ Group Managing Director / Director

Banyan Tree Holdings Limited

๐ Chairman / Director

Certain related companies of Banyan Tree

Holdings Limited

๐ Director

ICD (HK) Limited


Ms. Manee Lueprasert* Director 48Years



Thammasat University

๐ Corporate Secretary Development Program,

Thai Listed Companies Association

๐ Fundamental Practice for Corporate Secretary 18

(FPCS 18),

Thai Listed Companies Association and Thai

Company Secretary Club


๐ 0.10% (78,100 Shares)


๐ No relation


Present

๐ Director

Senior Finance Manager

Company Secretary


๐ Director





6 Mr. Chainarong Chimchan SeniorITManager Age(Years)49


๐ Bachelor Degree in Computer

Chandrakasem Rajabhat University


๐ 0.10% (79,800 shares)


๐ No relation


Present

๐ Senior IT Manager


1997-2013

๐ Senior Manager - Technical Support


5 Mr. Chalermkeit Chalermpronkit SeniorOperationManager Age(Years)45


๐ Bachelor Degree in Business Administration -

Sukhothai Thammathirat Open University


๐ 0.01% (10,000 shares)


๐ No relation


Present

๐ Senior Operation Manager


1997-2013

๐ General Director / Sales & Marketing Manager

Tay Ninh Tapioca Company Limited

Management and Company Secretary as at 31 December 2013

1 Ms. Pinyada Viriya Joint Managing Director (Corporate & Finance)

2 Mr. Umnad Sukprasongphol Joint Managing Director (Business Operation) Profile as shown in the section of “Board of Directors as at

3 Ms. Sirivan Skulkerevathana 31 December 2013”


4 Ms. Manee Lueprasert Senior Finance Manager


7 Ms. Dhitirat Makepoowadol* AccountingManager Age(Years)44


๐ Master of Accounting


๐ Executive Financial Management,

The faculty of Economics


๐ CFO Certificate Program 15 - Federation

of Accounting Professions under the

Royal Patronage of His Majesty The King


๐ None


๐ No relation


Present



2007-2009


G Steel Public Company Limited

Remark : * Promoted to Senior Accounting Manager with effect January 1, 2014


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Mr.

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ai Tow

iwat

ID, A

C, N

RCC

- -

- -

- -

- -

- -

- -

- -

Ms.

Man

ee Lue

pras

ert

/,E

/ /

/ /

/ /

/ /

/ /

/ /

/ /

Ms.

Dhitir

at M

akep

oowad

ol

E -

- -

- -

- -

- -

- -

- -

- Mr.

Cha

inaron

g Chimch

an

E -

- -

- -

- -

- -

- -

- -

- Mr.

Cha

lerm

keit

Cha

lerm

pron

kit

E -

- -

- -

- -

- -

- -

- -

- Mr.

Nam C

hitdee

chai

- -

- -

- -

- -

- -

- -

- -

- Mr.

Paito

on B

enjarit

- -

/ -

- -

- -

- -

- -

- -

- Ms.

Sudjai K

eeratirat

-

- /

- -

- -

- -

- -

- -

- -

Ms.

Orawan

Cha

roen

patcha

yaku

l -

- -

- -

- -

- -

- -

- -

- -

Mr.

Sretse

i Saitta

garoon

-

- -

- -

- -

- -

- -

- -

- -

Mr.

Surapo

n Su

prat

ya

- -

- -

- -

- -

- -

- -

- -

- Mr.

Tran

Can

h La

c -

- -

- -

- -

- -

- -

- -

- -

Mr.

Vo D

ong

Giang

(2)

- -

- -

- -

- -

- -

- -

- -

- Mr.

Nguy

en Thi P

huc

- -

- -

- -

- -

- -

- -

- -

-

AD

P BE

BN

PD

BPT

BT5

BT6

BT7

CSL

DI

L2

MCL

MHS

L PN

R RP

D

Remark :

X

= Cha

irman

AC

=

Audit Com

mittee

Mem

ber

//

= Man

aging

Director

V

=

Vice

Cha

irman

NR

CC

= No

minat

ion

and

Remun

erat

ion

Com

mittee

Cha

irman

E

= Ex

ecutive

acc

ording

to

the

defin

ition

of the

Sec

uritie

s Exch

ange

Com

mission

ID

= Inde

pend

ent Director

NRC

= No

minat

ion

and

Remun

erat

ion

Com

mittee

Mem

ber

- =

None

AC

C

= Au

dit Com

mittee

Cha

irman

/

= Director

(1)

Mr.

Hwee

Liang

Tee

has

res

igne

d fro

m h

is directorship in

the

Com

pany

with

effe

ct from A

pril 29

, 20

13 a

nd the

Boa

rd o

f Directors’

mee

ting

of the

Com

pany

has

app

rove

d the

appo

intm

ent of M

r. Ar

iel P

Vera, a

new

director o

f the

Com

pany

, to

replac

e Mr.

Hwee

Liang

Tee

with

effe

ct from A

ugust 14

, 201

3

(2)

Mr.

Nguy

en Tha

nh H

a ha

s resig

ned

from h

is directorship in

the

Com

pany

with

effe

ct from N

ovem

ber 1, 2

013

and

the

Board

of D

irectors’

mee

ting

of the

Com

pany

has

the

app

ointmen

t of M

r. Vo

Don

g Giang

, a

new

director o

f the

Com

pany

, to

replac

e Mr.

Nguy

en Tha

nh H

a with

effe

ct from N

ovem

ber 1, 2

013

(3)

Mr.

Pina

i Wan

icha

rat ha

s resig

ned

from h

is directorship in

the

Com

pany

with

effe

ct from N

ovem

ber 1, 2

013

and

the

Board

of D

irectors’

mee

ting

of the

Com

pany

has

the

app

ointmen

t of M

s. Siriva

n Skulke

reva

than

a, a

new d

irector o

f the

Com

pany

, to

replac

e Mr.

Pina

i Wan

icha

rat with

effe

ct from Jan

uary 1

, 201

4

�0 Annual Report �013

Na

me

List

Subs

idiar

ies

Com

pany

Deta

ils o

f Pos

ition

of D

irect

ors

and

Exec

utive

s As at

31st

Dec

embe

r 20

13

Ms.

Piny

ada

Viriy

a /

/ /

/ /

/ /

/ /

/ /

/ /

/ /

Mr.

Umna

d Su

kpraso

ngph

ol

/ /

/ /

/ /

/ /

/ /

/ /

/ /

/ Mr.

Thaw

an P

etch

lawlia

n -

- -

- -

- -

- -

- -

- -

- -

Mr.

Ariel P

Vera

(1)

- -

- -

- -

- -

- -

- -

- -

- Ms.

Siriva

n Skulke

reva

than

a (3)

- -

- -

/ -

- -

- -

- -

- -

- Ms.

Tawira

tt Na

rasuj

- -

- -

- -

- -

- -

- -

- -

- Mr.

Teeraw

ut C

haroen

suk

- -

- -

- -

- -

- -

- -

- -

- Mr.

Somch

ai Tow

iwat

-

- -

- -

- -

- -

- -

- -

- -

Ms.

Man

ee Lue

pras

ert

/ /

/ /

/ /

/ /

/ /

/ /

/ /

/ Ms.

Dhitir

at M

akep

oowad

ol

- -

- -

- -

- -

- -

- -

- -

- Mr.

Cha

inaron

g Chimch

an

- -

- -

- -

- -

- -

- -

- -

- Mr.

Cha

lerm

keit

Cha

lerm

pron

kit

- -

- -

- -

- -

- -

- -

- -

- Mr.

Nam C

hitdee

chai

- -

/ /

- -

- -

- -

- -

- -

- Mr.

Paito

on B

enjarit

- -

- -

- -

- -

- -

- -

- -

- Ms.

Sudjai K

eeratirat

-

- -

- -

- -

- -

- -

- -

- -

Ms.

Orawan

Cha

roen

patcha

yaku

l -

- -

- -

- -

- -

- -

- -

/ /

Mr.

Sretse

i Saitta

garoon

-

- -

- X

- -

- -

- -

- -

- -

Mr.

Surapo

n Su

prat

ya

- -

- -

/ -

- -

- -

- -

- -

- Mr.

Tran

Can

h La

c -

- -

- V

- -

- -

- -

- -

- -

Mr.

Vo D

ong

Giang

(2)

- -

- -

/ -

- -

- -

- -

- -

- Mr.

Nguy

en Thi P

huc

- -

- -

/ -

- -

- -

- -

- -

-

TM

S L2

TN

TN

1 TN

T TO

C

TS19

89

TTL

TW6

TWAS

TW

MS

TWRF

TW

RL

MJ

W1

Remark :

X

= Cha

irman

AC

=

Audit Com

mittee

Mem

ber

//

= Man

aging

Director

V

=

Vice

Cha

irman

NR

CC

= No

minat

ion

and

Remun

erat

ion

Com

mittee

Cha

irman

E

= Ex

ecutive

acc

ording

to

the

defin

ition

of the

Sec

uritie

s Exch

ange

Com

mission

ID

= Inde

pend

ent Director

NRC

= No

minat

ion

and

Remun

erat

ion

Com

mittee

Mem

ber

- =

None

AC

C

= Au

dit Com

mittee

Cha

irman

/

= Director

(1)

Mr.

Hwee

Liang

Tee

has

res

igne

d fro

m h

is directorship in

the

Com

pany

with

effe

ct from A

pril 29

, 20

13 a

nd the

Boa

rd o

f Directors’

mee

ting

of the

Com

pany

has

app

rove

d the

appo

intm

ent of M

r. Ar

iel P

Vera, a

new

director o

f the

Com

pany

, to

replac

e Mr.

Hwee

Liang

Tee

with

effe

ct from A

ugust 14

, 201

3

(2)

Mr.

Nguy

en Tha

nh H

a ha

s resig

ned

from h

is directorship in

the

Com

pany

with

effe

ct from N

ovem

ber 1, 2

013

and

the

Board

of D

irectors’

mee

ting

of the

Com

pany

has

the

app

ointmen

t of M

r. Vo

Don

g Giang

, a

new

director o

f the

Com

pany

, to

replac

e Mr.

Nguy

en Tha

nh H

a with

effe

ct from N

ovem

ber 1, 2

013

(3)

Mr.

Pina

i Wan

icha

rat ha

s resig

ned

from h

is directorship in

the

Com

pany

with

effe

ct from N

ovem

ber 1, 2

013

and

the

Board

of D

irectors’

mee

ting

of the

Com

pany

has

the

app

ointmen

t of M

s. Siriva

n Skulke

reva

than

a, a

new d

irector o

f the

Com

pany

, to

replac

e Mr.

Pina

i Wan

icha

rat with

effe

ct from Jan

uary 1

, 201

4

�1THAI WAH STARCH PUBLIC COMPANY LIMITED

Abbreviation Name

ADP Architrave Design & Planning Company Limited

BE Business Evolution Company Limited

BNPD Bangna Property Development Company Limited

BPT Bangpakong Turakij Company Limited

BT5 Bang Thao (5) Company Limited



CSL Chiang Saen Land Company Limited

DI DI Company Limited

L2 Laguna (2) Company Limited

MCL Mae Chan Land Company Limited

MHSL Mae Hong Son Land Development Limited

MJ Mae Joe Land Company Limited

PNR Phang Nga Resorts Limited

RPD Ratchada Property Development Company Limited

TMS Thai Modified Starch Company Limited

TN Thai Nam Tapioca Company Limited

TN1 Thai Nam Tapioca (1) Company Limited

TNT Tay Ninh Tapioca Company Limited

TOC Thai Ongkarak Company Limited

TRL Tropical Resorts Limited

TS1989 Thai Sin Tapioca (1989) Company Limited

TTL Tha Thungna Land Company Limited

TW6 Thai Wah (6) Company Limited

TWAS Thai Wah Alpha Starch Company Limited

TWMS Thai Wah Marketing Services Limited

TWRF Thai Wah Rice Flour Company Limited

TWRL Thai Wah Realty Limited

Abbreviation

�� Annual Report �013

Policy and Business Overview Background Thai Wah Starch Public Company Limited (originally

known as Thai Wah Co., Ltd.) (the “Company”) was

incorporated in Thailand on February 26, 1947 to initially

export minerals to the US and Europe pr ior to

expanding into an agribusiness. In 1952, the Company

started producing and exporting tapioca starch by

setting up the first tapioca starch factory with the most

sophisticated machines and production process in

Chonburi province. As the production kept expanding,

the firm finally opened several large and highly

sophisticated factories producing tapioca starch in the

northeastern region of Thailand. Its “Rose Brand” tapioca

starch is widely known as a quality product and highly

recognized by international customers. The Company

was also the first to start producing alpha starch in

Thailand. At present, the factory, which is located at

Nakhon Ratchasima Province, is operated by Thai Wah

Alpha Starch Company Limited and produces alpha

starch widely used in the industries of aquatic animal

feeds, mosquito repellent, incense and packaging.

On December 16, 1985 the Company was approved for

l ist ing in the Stock Exchange of Thai land (SET).

Subsequently, in early 1993, the Company expanded

the business by investing in the ordinary shares of

Laguna Resorts & Hotels Public Company Limited (“LRH”)

and Thai Wah Food Products Public Company Limited

(“TWFP”) for a total of 17.7% and 42.1%, respectively.

However, in 2011, the Company transferred its ordinary

shares i n LRH and TWFP as a means of debt

repayments to the creditors. As a result of those share

transfers, the Company’s shareholding in LRH and TWFP

was reduced to 2.1% and 5.0% of the total paid-up

capital of each company, respectively

In 1994, the Company started expanding its production

base to Vietnam by collaborating with a Vietnamese

state-owned enterprise to set up Tay Ninh Tapioca

Company Limited (“TNT”), a joint venture company in

which it holds 70% stake to produce tapioca starch for

domestic and export sales. In October 2000, TNT

officially unveiled its glucose factory to produce glucose,

a product derived from tapioca starch, thanks largely to

demands from Vietnam’s booming economy.

In October 2007, the Company’s Extraordinary General

Meeting of Shareholders resolved to change the

Company’s name to “Universal Starch Public Company

Limited” to reflect its main business of producing and

distributing tapioca starch to customers worldwide.

However, due to its long-established reputation over

more than 60 years for producing a variety of quality

tapioca products, traditionally under the name “Thai Wah”

especially in relation to tapioca starch which is its main

product, although the name was changed to Universal

Starch Public Company Limited, customers were still

looking for tapioca starch under the name “Thai Wah”.

Therefore, the Company decided to change its name

once again to “Thai Wah Starch Public Company

Limited” pursuant to the resolution approved at the 2013

Annual General Meeting of Shareholders. The new

name effectively reflects the Company’s high-quality

tapioca starch products.

Vision To be the leader in manufacturing and exporting of

good quality tapioca starch in the ASEAN region.

Mission To produce good quality products and to deliver in a

timely manner in order to meet our customers’

expectations.

The Company is a leader in the production and export

of quality tapioca starch in ASEAN. The business extends

to cover production and export of tapioca-based

products; namely, sago (or tapioca pearls) and Alpha

starch. The products distributed under the “Rose Brand”

trademark have been widely recognized by domestic

and overseas customers especially in relation to its

quality and on-time delivery. The Board of Directors will

review and approve the Company’s vision and mission

at least once every 5 year.


Significant Events Following an official notification of the Baht float policy

on July 2, 1997, the Company was adversely affected in

the same manner as other companies in Thailand which

caused the Company’s USD loans, for working capital

and investments in its real property business purposes, to

increase after currency conversion (i.e. the original

amount of Baht 2,908 million increased to Baht 4,795

million). Considering the condition of its normal business

operations at such time, the Company could not

generate sufficient profits to pay the substantial increase

in its debts, making it necessary to file a petition for

business rehabilitation with the Central Bankruptcy Court.

On August 21, 2000, the Central Bankruptcy Court issued

an order a l lowing the Company to enter the

rehabilitation proceedings and approved the Company’s

rehabilitation plan on February 14, 2001. Subsequently,

during the same year, the Stock Exchange of Thailand

(SET) declared that the Company had become subject

to the criteria for possible delist ing because its

shareholders’ equity was negative, and prohibited the

trading of the Company’s shares until the date of its

release from the delisting criteria as well as classified its

securities in the Non-Performing Group. In 2007, the

Central Bankruptcy Court ordered the termination of the

Company’s business rehabilitation process because the

time limit for implementing the Plan had expired, but

the business rehabilitation had not yet been completed

pursuant to the Plan. However, the Company had still

conducted its core business which continuously

generated an increase in its operating revenues. Apart

from this, the Company was able to negotiate debt

restructurings with most of the creditors of the Company

and fully settle its debts to the creditors in May 2012. As

a result of fully debt settlement, the Company has no

outstanding restructured debts and is free of all legal

disputes among itself and its creditors at the moment.

Shareholding Structure of the Group The Company’s core business is to manufacture tapioca

products for local and international distribution, which is

managed by the Company itself and its subsidiaries. The

Company also invests in ordinary shares of various

companies which conduct business other than the

tapioca product business in order to diversify the

Company’s business risks. Additionally, the Company

invests in real property. A number of quality land plots

are held by the Company and its subsidiaries.

The Company’s business can be divided into three

segments as follows:

1. Agribusiness

The Company has conducted its core business of

manufactur ing tapioca products for local and

international distribution for more than 50 years. This

business is managed by the Company itself and its

subsidiaries, namely Thai Nam Tapioca Company

Limited, D I Company Limited, Thai Wah Alpha Starch

Company Limited, and Tay Ninh Tapioca Company

Limited. The agricultural products produced by the

Company includes tapioca starch, alpha starch and

sago (tapioca pearls).

2. Investmentinordinaryshares

The Company has invested in the ordinary shares of

LRH, TWFP, and Tropical Resort Limited and is currently

holding 2.1%, 5.0%, and 19.8% of the total paid-up

capital of each company, respectively. The purpose of

investing in these non-agribusiness companies is to

diversify the Company’s business risks. By investing in

such ordinary shares, the Company expects to derive

returns in the form of dividend.

3. Investmentinrealproperty

The Company and its subsidiaries have invested in real

property by possessing many pieces of land with great

investment prospects in almost all regions of Thailand,

i.e. in the north, upper part of the northeast, middle

part, east, and west. Land investment represents less

risks than investment in other assets because land in

itself is unlikely to depreciate. The Company expects to

derive returns from a higher selling price which is

expected to increase in the future according to the

improvement in Thailand’s economy. Currently, the

Company has no development plans on such property.


TN

BE

TNT

W1

MJ BNPD RPD

TN1

TWMS*

MHSL

ADP*

TWRL

TW6

BT6

TTL

TOC

TMS*

BT7*

L2*

TS1989

PNR

BT5

MCL

CSL

BPT

TWRF*

TWAS

DI

LRH

TWFP

TRL


Shareholding Structure as at December 31, 2013

TWS

Investment in real property Investment in

ordinary shares Agribusiness

99.9%

99.9%

83.3%

70.0%

69.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.9%

99.8%

99.9%

99.4%

99.3%

94.6%

84.9%

79.9%

69.9%

49.9%

29.9%

19.8%

5.0%

49.9%

Remark * = Dormant

49.8%

2.1%

��THAI WAH STARCH PUBLIC COMPANY LIMITED

TropicalResortsLimited Resort investment USD 21,000,000 USD 1 USD 21,000,000 19.8

22nd Floor, Man Hing Commercial Building, and development

79-83 Queen’s Road Central, Hong Kong

Tel. (65) 6849 5888

Fax. (65) 6849 5713

DICompanyLimited Manufacture of 10,000,000 1,000 10,000,000 99.93

21st Floor Thai Wah Tower 1 tapioca starch

21/63-64 South Sathorn Road, Tungmahamek,

Sathorn, Bangkok 10120 Thailand

Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiNamTapiocaCompanyLimited Manufacture of 86,600,000 100 86,600,000 70

21st Floor Thai Wah Tower 1 tapioca starch



Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiWahAlphaStarchCompanyLimited Manufacture of 18,000,000 100 18,000,000 99.99

21st Floor Thai Wah Tower 1 alpha starch



Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiWahRiceFlourCompanyLimited Dormant 30,000,000 100 30,000,000 83.33

21st Floor Thai Wah Tower 1



Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

TayNinhTapiocaCompanyLimited Manufacture of USD 4,900,000 USD 4,900,000 70.0

Tan Binh Hamlet, Hoa Thanh District, tapioca starch,

Tay Ninh Province, Vietnam glucose and candy

Subsidiaries or Related Companies in which the Company has shareholding exceeding 10 percent

COMPANY TYPEOFBUSINESS REGISTERED PARVALUE PAID-UPCAPITAL SHAREHOLDING

CAPITAL(BAHT) (BAHT/SHARE) (BAHT) PROPORTION

(DIRECT+INDIRECT)(%)


ThaiModifiedStarchCompanyLimited Dormant 40,000,000 1,000 10,000,000 94.62




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

RachadaPropertyDevelopmentCompanyLimited Holding Company 162,000,000 100 162,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiWahMarketingServicesLimited Dormant 40,000,000 100 20,000,000 80




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

Laguna(2)CompanyLimited Dormant 100,000 100 100,000 99.4




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

BangTao(5)CompanyLimited Landholding 1,000,000 100 250,000 99.93




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

BangTao(6)CompanyLimited Landholding 21,500,000 100 21,500,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271





BangTao(7)CompanyLimited Dormant 100,000 100 25,000 99.3




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

BangnaPropertyDevelopmentCompanyLimited Holding Company 28,145,000 100 28,145,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiNamTapioca(1)CompanyLimited Landholding 1,000,000 100 1,000,000 69.95




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ChiangSaenLandCompanyLimited Landholding 75,000,000 100 75,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiSinTapioca(1989)CompanyLimited Landholding 5,000,000 100 5,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

MaeChanLandCompanyLimited Landholding 15,000,000 100 15,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271





MaeHongSonLandDevelopmentLimited Landholding 2,000,000 100 2,000,000 84.97




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiWah(6)CompanyLimited Landholding 29,000,000 100 29,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

MaeJoeLandCompanyLimited Landholding 3,000,000 100 3,000,000 50




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiOngkarakCompanyLimited Landholding 4,000,000 100 4,000,000 99.98




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaThungnaLandComoanyLimited Landholding 15,000,000 100 15,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ArchitraveDesign&PlanningCompanyLimited Dormant 500,000 100 500,000 99.88




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271





PhangNgaResortsLimited Landholding 1,000,000 100 1,000,000 99.93




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

BangpakongTurakijCompanyLimited Landholding 91,000,000 100 91,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

ThaiWahRealtyLimited Property development 100,000,000 1,000 100,000,000 99.99




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

TheWalon(1)CompanyLimited Landholding 1,000,000 100 1,000,000 29.9




Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 02719

BusinessEvolutionCompamyLimited* Not yet commenced 100,000 100 100,000 99.70

21st Floor Thai Wah Tower 1 Operation



Tel. 66 (0) 2285 0040

Fax. 66 (0) 2285 0271

Remark : * Indirect held by 2 subsidiaries since April 7, 2010





Nature of Business Revenue Structure

The Company’s revenue structure of the sale and services to the third party are descriped as follows:-


2013 2012 2011

Products/Services Revenue Revenue Revenue

MillionBaht % MillionBaht % MillionBaht %

Agriculturalbusiness

- Tapioca Starch 2,659 77 3,006 82 2,790 55

- Thai 2,371 69 2,720 74 2,436 48

- Vietnam 288 8 286 8 354 7

- Pearl - Thai 225 6 186 5 227 4

- Glucose - Vietnam 478 14 390 10 347 7

Investmentinsecurities

- Dividend 4 - 3 - 294 6

- Share of gain from investments in associates - - 11 - 88 2

- Gain on reclassification of investment in associates - - - - 22 -

Investmentproperties

- Rental income 7 - 6 - 6 -

Otherincome

- Gain on exchange 20 1 - - - -

- Gain on debt restructuring - - 16 1 1,254 24

- Other income 58 2 65 2 70 2

Total 3,451 100 3,683 100 5,098 100

2013 2012 2011

6%

14% 3%

77% 82% 55%

5%

10% 3%

34%

7% 4%

Tapioca Starch Pearl Glucose Other income apart from agricultaral business


1. Agricultural Products Thai Wah Starch Public Company Limited (the

Company) and its subsidiaries has operated in

agricultural products business for over half a century

and the Company possesses expertise and experience

as a true market leader, maintaining its status as a

major producer and exporter of tapioca starch

products in Thailand. Products across its network are

classified as follows:

• Tapiocastarch

Tapioca starch is a product derived from cassava

roots. Apart from direct consumption, tapioca

starch has many other uses in the food industry

such as seasoning powder (MSG) and sweetener

products, as well as uses in other industries

including paper and textile.

The Company have 4 factories for manufacturing

tapioca starch scattered among various regions

in Thailand, all having ISO 9001:2008 certification

for quality management systems, as well as GMP

(Good Manufacturing Practice), HACCP (Hazard

Analysis and Critical Control Points), HALAL and

KOSHER certifications.

In addition to its local manufacturing, the

Company also jointly invested with a state

enterprise in the Socialist Republic of Vietnam to

manufacture tapioca starch for local and

international export. This joint venture is called

Tay Ninh Tapioca Company Limited (TNT) located

in Tay Ninh, Socialist Republic of Vietnam.

• AlphaStarch

Alpha Starch is a type of modified tapioca

starch using physical modification process which

is widely used in the aquatic animal feed,

mosquito repellent and metal casting industries.

Thai Wah Alpha Starch Company Limited (TWAS),

a subsidiary of the Company, manufactures and

distributes alpha starch products, with the main

Nature of the Business

markets being Japan and Taiwan. Currently, TWAS

has placed much importance on improvement and

development of its product quality and researching

methods for manufacturing new products to

satisfy the market needs. Furthermore, TWAS also

has the capability to manufacture alpha starch

according to the chemical formula requirements

specif ic to each industry with recognized

standards. This will increase exports, both in terms

of volume and value.

• Sago

Sago is another food product derived from

tapioca starch, which is widely popular among

consumers both locally and in other Asian

countries such as China and Taiwan because it

can be used in cooking both savory dishes as

well as desserts, thus providing sago consumption

a continually upward trend.

Currently, the Company has further developed

sago products in order to provide more variety,

producing Roselle sago as well as Pandanus sago

into the market and allowing consumers the

opportunity to select from products that are new

and different. Furthermore, new recipes were

developed for both savory and dessert dishes in

order to recommend consumers to use sago with

more variety, convenience and speed. Examples

of new recipes include boi led sago pork

dumplings instead of traditional method of

steaming, tapioca pearls mixed with coriander

roots, garlic and pepper, the jade pearls and the

sea pearls, all of which are savory dishes that

use large sago pearls for preparation.

Separately, the Company has further developed

sago products in another variation known as tiny

pearls that are easily cooked simply by immersing

in hot water for approximately 5 minutes. These are

suitable for using as ingredients in breakfast dishes

or mixing with sausage products to add texture.


The Company’s factory for manufacturing sago

products has been awarded ISO 9001

certification for quality management systems,

GMP (Good Manufacturing Practice), HACCP

(Hazard Analysis Critical Control Points), and

HALAL certification, which can assure customers

of the Company’s product quality.

• GlucoseSyrup

Glucose syrup is a type of product made from

hydrolysis of starch with the characteristic of

vicious sticky, slightly sweet and colorless. It is

used as an ingredient in many food products

such as candy, toffees, jam, juice powder, ice

cream, creamer and other beverages, which are

manufactured by TNT, a subsidiary of the

Company located in Tay Ninh, Socialist Republic

of Vietnam. TNT’s glucose product are widely

recognized and trusted by consumers for its

quality and product standard. Furthermore the

factory has been awarded ISO 9001 for quality

management systems, HACCP (Hazard Analysis

Critical Control Points) and HALAL certification.

• TapiocaChipsandTapiocaPellets

Tapioca chips and tapioca Pellets are another

variety of products derived from tapioca starch

which serves as ingredients in animal feed as

well as raw materials in the manufacturing of

alcohol and citric acid.

2. Investment in Ordinary shares The Company has invested in ordinary shares of

Laguna Resorts and Hotels Public Company Limited

(LRH), Thai Wah Food Products Public Company

Limited (TWFP) and Tropical Resort Limited (TRL), with

its current shareholdings at 2.1%, 5.0% and 19.8% of

the total paid-up capital of each company,

respect ively. Such investments represent the

investment in ordinary shares of other companies

that operate in businesses other than agricultural

product business in order to mitigate business risk

and allowing the Company to receive return on

investment in the form of dividend payments.

3. Investment in property The Company and its subsidiaries invested in

property, holding investment quality land dispersed in

various regions including the Northern, upper part of

the Northeast, Central, Eastern and Western parts of

the country. Investment in land poses less investment

risk than investing in other types of assets, as the

state of property does not depreciate. The Company

anticipates that it will benefit from the return on its

future sales price, which is seen as being on an

upward trend in line with the improving economy of

the country. Currently, the Company and its

subsidiaries has no development plans on such

property.

Marketing and Competition

Target Customers The Company’s tapioca products are distributed both

locally and internationally where direct sales accounts

for 30% of sales revenue and distribution through dealers

or traders accounts for 70%. The classifications of

customers are set out as follows:

1. Tapiocastarch

Tapioca products are exported to several countries

around the world, including the People’s Republic of

China, Japan, Taiwan, Singapore, United States of

America and European regions under the “Rose

Brand” trademark. Some part of this product is also

distributed locally.

2. Alphastarch

Alpha starch are also dist r ibuted to several

international countries such as Japan, Europe and

Taiwan as well as distributed locally.

3. Sago

This product is mainly distributed to Asian countries

such as the People’s Republic of China, Philippines

and the Republic of Indonesia. However some of the

products are distributed to Europe and the United

States of America, as well as locally distributed.

4. TapiocachipsandTapiocapellets

The main market for this product is the People’s

Republic of China and Taiwan.


Product Distribution Channel Marketing of tapioca products: In the previous year, the

Company’s marketing activities focused on the food

industry, instead of the paper and textile industries

because of the higher pricing in the food industry than

the other two industries. Local sales accounts for

approximately 30% of sales revenues while export

accounts for approximately 70%.

Regarding distribution channels, the Company directly

exports its products to food manufacturers. Some

products were indirectly sold through local dealers in

the importing countries.

Competition Nowadays, competition in international markets is quite

intense. In addition to local competitors, the Company

also have to compete with foreign manufacturers in

ASEAN countries such as Socialist Republic of Vietnam,

Kingdom of Cambodia, and Laos which have the

advantage of lower costs when compared to Thailand.

However, the Company focuses on markets which prefer

consistent quality rather than lower prices.

Condition of competition: In the previous year, there

were 5-6 competitors whose capacity was equal to or

greater than the Company’s. While the competitors

adopted the competit ive pricing strategies, the

Company still pursued the strategy of quality and

punctuality of delivery, which was very important in the

international markets. The Company’s strengths included

its reputation, quality, and punctuality of delivery,

including the “Rose brand” which has been well

recognised in the food industry particularly in Taiwan

and China.

Trend of industry and market competition: In spite of the

stagnant economy, demand for tapioca starch in the

global market remains great. This can be seen from the

quantity of Thai exports for tapioca starch which

increase approximately by 10% each year, i.e., from

3.08* million tons in 2012 export for tapioca starch

increased to 3.34* million tons in 2013, representing a

8.5%* increase in export volume and value of exports of

tapioca starch increased by 10.4%. Some contribution to

the increase in export volume also comes from the

decrease in tapioca export volume in Vietnam in 2012

to approximately 314,000 tons **.

Not only does the Company need to compete with the

private sectors but also have to compete with the

government mortgage schemes, which carries out a

pricing intervention policy under the pledging scheme

by proposing the purchase price of fresh cassava roots

higher than the market price. In the meantime, the

Company must compete with the government to sell

the tapioca starch, while the government’s proposed

selling price is lower than the market price.

Production policy The production process of the Company depends upon

the availability of raw materials. The Company will

maximize production capacity during the harvest season

(when farmers dig out the cassava roots to sell), which

falls during the period October - April every year. During

such harvest period, the price of cassava roots are

relatively low compared to other seasons, which means,

the Company would step up production in order to

produce the maximum amount which can either be

sold to customers or stored for future sales throughout

the year. Towards the end of harvest season, the price

for fresh cassava roots will increase. In the event that

orders are continuously being placed, and the profit

margin remains at a satisfactory level, the Company will

continue its production for as long as possible.

Production capacity and quantity The Company and its subsidiaries has a total of five

manufacturing plants of tapioca products, four of which

are in Thailand and the other one is in Socialist Republic

of Vietnam. The four plants in Nakhon Ratchasima,

Kalasin, Udonthani, and Kampaengpetch have an

aggregate production capacity of 300,000 tonnes per

year and the capacity utilization rate is approximately

60 percent. As for the factory in Vietnam, the

aggregate production capacity is 40,000 tonnes per

year and the capacity utilization rate is approximately

75 percent of production capacity per year.


Procurement of products and services The core element of raw materials used in the

manufacturing process is the locally grown fresh cassava

roots that are purchased directly from the farmers.

Movement in the price of fresh cassava roots depends

on the demand and supply, while the selling price of

the finished goods increase or decrease depends on

the cost of the raw materials.

Raw materials and suppliers Movement in the price of fresh cassava roots depends

on the demand and supply, while the selling price of

the finished goods increases or decreases depends on

the cost of cassava roots. In 2012, the average

purchasing price of fresh cassava roots for the group in

Thailand was Baht 2,250-2,550 per tonne while for the

company in Vietnam was Baht 2,620-3,300 per tonne,

respectively.

The Company will purchase the majority of its fresh

cassava roots directly from farmers, while the remainder

will be purchased from the cassava markets. Where the

amount of cassava roots available within the areas

close to the plant is not sufficient, the Company will

purchase cassava roots from cassava markets in the

nearby province in order to make up for the shortfall in

the amount requested for production.

Environmental impact During the manufacturing process of tapioca starch,

wastewaters are discharged from the washing of fresh

tapioca roots and starch, which may adversely impact

the environment and disturb the surrounding local

communities. With great concern over the impact this

may cause, the Company established a wastewater

treatment system which uses the LAGOONING technique

that are designed by certified engineers. The lagooning

system consists of an anaerobic pond and an oxidation

pond. As a result the wastewater discharged after the

lagooning treatment met the criteria set out by the

Environment Division, Ministry of Industry. Throughout its

many years of operations, the Company has never had

any record of offence related to the environment.

Furthermore, the Company also has great concern over

the quality of the environment; thereby initiating the

installation of a biogas system at the manufacturing

plant of its subsidiary in Vietnam. This was completed in

2011. Presently in 2013 the Company has already

implemented the biogas system at its plant in Kalasin

province and at a subsidiary’s plant in Udonthani

province, which are the main bases of manufacturing

activities. Due to this system, biogases that are derived

from the treatment ponds can be used as a substitute

for furnace oil in the manufacturing procedure. Biogas is

an energy-saving and the most effective alternative for

the consumption of natural resources. Using biogas can

reduce the amount of greenhouse gas emitted into the

atmosphere and minimise pollution caused by the smell

from wastewater treatment ponds that could affect the

environment of the surrounding local communities.

Currently, the Company is constructing the biogas

system at the factory located in Phimai, Nakorn

Ratchasima province. Project completion has been

expected to be in January 2015.

Remark * : the information from Association of Thailand

tapioca and customs department.

** : the Information from the Socialist Republic of

Vietnam customs department.


Risk factors

1. Risk relating to fluctuations in the costs of raw materials

The Company manufactures and distributes products made from cassava and the key raw material used in the manufacturing activities is fresh cassava roots, which accounts for approximately 70% of the total manufacturing cost. The prices of fresh cassava roots fluctuate up and down seasonally, depending on the demand and supply in the market, the climate and the quantity based on seasonal production. On the grounds that these factors are beyond the control, the Company faces risk relating to the projections of cost of raw materials and the selling price of finished products, including management of inventor ies, which would directly impact the Company’s financial position and operating results.

Therefore in order to prevent and minimise the risks

resulting from such fluctuations, the Company is closely monitoring the market situation for the raw materials, surveying the cultivation of sources in Thai land, Vietnam, Laos and Cambodia and exchanging information and knowledge with other cassava manufacturers in Thailand and other countries as well as with other organizations related to cassava business etc., focusing mainly on procuring the raw materials during the peak period for large supply to the market while the prices are low, and cemented good relationships with local farmers. This way, the Company will be able to receive good input and forecast on the market trend for raw materials which will help for further planning and better management.

2. Risk relating to fluctuations in the foreign

exchange rate Since the Company’s products are mainly exported

to other countries, most of its income is principally linked to the US dollar. As such, the Company may face risk relating to the fluctuation in the foreign exchange rate, which is caused by the conversion of its sales income denominated in the US Dollar into the Thai Baht. The downside risk occurs when the US Dollar depreciates against the Thai Baht, resulting in a decrease in the income to be received in Thai Baht. On the contrary, the Company may obtain an increase in the value of

income if the US Dollar appreciates against the Thai Baht. During April and May 2013, the Thai Baht appreciated against the US Dollar which made it difficult to export tapioca starch since the Company had to compete with the exporters in Vietnam, who had relatively stable currencies against the US Dollars. However later on during the end of the year, the Thai Baht depreciated resulting in an advantage for Thai exporters.

The Company has entered into currency forward

contracts and regularly monitors the movement of the foreign exchange rate. Other appropriate financial instruments have also been used to minimise this risk. However, a currency forward contract is not an assurance that the Company will be able to manage the risk and obtain better yields than the market rate because the future currency rate is naturally unpredictable at the time of entering into such contracts.

3. Risk relating to the government’s price

intervention policy In 2011-2012, the government implemented a policy

to intervene in the price of tapioca products. The government proposed the purchase price of fresh cassava roots higher than the market rate which kept on increasing monthly throughout the term of the policy. This constitute as a factor that had caused the price of raw materials to deviate from the market pr ice leading to the Company’s manufacturing costs to increase and its purchasing power in the market to decline. In the past, the government released their tapioca starch stock, by government to government selling schemes where the selling prices were always unclear. This has impacted the normal trade for the Company and other cassava manufacturers. Thus the government’s intervention policy has become an additional risk factor affecting the Company’s profitability, which is beyond the Company’s control.

The Company has carried out risk management to

mitigate the impact of this risk by closely monitoring the market situation and the raw materials situation, exchanging information and knowledge with other cassava manufacturers in Thailand and other countries


as well as with other organizations related to cassava business etc., so that the Company is able to assess the situation and prepare for any crisis that may occur in the future in order to ensure that its finished products bear competitive costs and generate profits for the Company

4. Risk relating to an offshore investment The Company has entered into an agribusiness joint

venture in Vietnam. Offshore investment is usually exposed to the possible risks relating to the change in political conditions, laws and foreign exchange rates and economical situation of the relevant country in which the investment has been made. Therefore if such event occur, this could adversely impact the Company’s business in such country, and could result in the income and profit from the operation of its foreign business to miss the expected target.

The Company is aware of the above risk and as a

result closely monitors news information related to Vietnam and the areas nearby and also exchanges information on a timely basis about the market situation, with other cassava manufacturers in Thailand and other countries as well as with other organizations related to cassava business etc., Furthermore the Company has sent a team of its executives to supervise the business management at its subsidiary’s plant in Vietnam and a report on the operating results are required to be submitted to the head office in Thailand on a monthly basis.

5. Risk relating to shareholding structure Due to the Company’s investment in various

companies wi th cross - sharehold ing in those companies, it may be difficult for retail investors to inspect the Company’s interests in those companies and the Group’s members. Therefore in order to support the investor’s decision, the information relating to the shareholding structure of the Company and other members of the Group, its interests and control in those entities and connected party transactions has been disclosed in full in the Company’s audited financial statements and annual report form, which has been done in accordance to the applicable regulations of the Stock Exchange of Thailand.

6. Risk relating to the world’s economic recession

The Company’s major income derives from exports. In the past due to the Europe debt crisis combined with economic slowdown in the United States of America that affected the economies of other countries and consequently lead to a diminishing impact on the buying power of consumers, especially China, the largest market for tapioca products. However recently the world economy as well as the economy in other developed countries including China has shown signs of improving, resulting in the prospect of export for agricultural products to expand further in the year 2014, especially for China where the demand for tapioca starch has been expected to increase. This however depends on the reasonable price.

The Company has put in place policies to improve

cost and production management to maximize efficiency and effectiveness of production, and has established the objective to open up new markets with the aim to avoid over reliance on its operation in any particular country.

7. Risk relating to the climate change Due to global warming over the past years resulting

in the change of the climate conditions to be very unseasonable, leading to various forms of natural disasters such as drought and flood. In 2013, Thailand experienced drought in the upper east region, which affected the quantity of cassava roots since there was lack of sufficient water supply for the Company’s production process. During the dry season, the Company’s factory located in the Kalasin province, had been impacted by the lack of sufficient water supply for production for 2 months period. As for the cassava plantation areas, it also faced with the spread of mealy bugs and other pesticides while other areas suffered from flooding. All of the above are risk factors affecting the quantity of cassava roots which is the Company’s main raw material.

The Company has taken measures to reduce the

impact of such risks. Currently the Company has been conducting a study on the method of reusing the waste water from the production process and also improving the production system to reduce the amount of water used in order to minimize the impact of drought and water shortage.


Company

Thai Wah Starch Public Company Limited or “TWS”

HeadOffice

21/59, 21/63-64 Thai Wah Tower I, 20th-21st Floor,

South Sathorn Road, Tungmahamek Sub-District,

Sathorn District, Bangkok 10120

Telephone: 66 (0) 2285 0040

Facsimile: 66 (0) 258 0268, 285 0270-1

Home page: http://www.thaiwah.com

Branches

Branch (1) 76 Moo 3 Sukhumvit (Saikao) Road,

Thakham Sub-District, Bangpakong District,

Chachoengsao

Branch (2) 87 Moo 3 Sukhumvit (Saikao) Road,

Thakham Sub-District, Bangpakong District,

Chachoengsao

Branch (3) 2 Moo 2 Sukhumvit (Saikao) Road, Thakham

Sub-District, Bangpakong District,

Chachoengsao

Branch (4) 301 Moo 8 Phimai-Huai Thalaeng Road,

Naimueang Sub-District, Phimai District,

Nakhonratchasima

Branch (5) 136 Moo 12 Natal Sub-District, Thakhantho

District, Kalasin

General Information

TypeofMajorBusiness

Agribusiness

CorporateRegistrationNumber

0107536000951 (Former: Bor Mor Jor. 169)

RegisteredCapital

Baht 787,500,000

Paid-upCapital

Baht 785,360,380 Divided into 78,536,038 ordinary shares,

at par value Baht 10 per share

ForeignLimit

Not exceeding 49 percent of total issued and paid-up

shares of the Company

PercentageallowedforThaiTrustFund

-None-

TotalEmployees

761 employees (Only employees employed by the

Company as at December 31, 2013)

Remark : Investers can further view information related to the issuing Company in Form 56-1 which can be

accessed at www.sec.or.th or the Companys website.


Major Shareholders As at December 27, 2013*

Name of Shareholders No. of Total No. of % of Shares Held Shares Held Shareholding

1. Mrs. Ho Lienfung Group 15,947,940 20.31

• Mrs. Ho Lienfung 2,602,740

• Chang Fung Company Limited 1 9,967,690

• Li-Ho Holdings (Private) Limited 2 3,377,510

2. Laguna Resorts & Hotels Public Company Limited 3 12,775,406 12,775,406 16.27

3. Mr. Somchai Limsirivilai 2,899,243 2,899,243 3.69

4. Mr. Sumruang Manoonpol 2,108,600 2,108,600 2.68

5. Mr. Ho Kwon Ping 1,945,800 1,945,800 2.48

6. International Commercial Development Company Limited 4 1,805,200 1,805,200 2.30

7. Ms. Nathathai Maeta 1,800,000 1,800,000 2.29

8. Mr. Phitak Boonpojanasoontorn 1,566,700 1,566,700 2.00

9. Bangkok Bank Public Company Limited 5 911,628 911,628 1.16

10. Deutsche Bank AG, London Prime Brokerage 6 906,161 906,161 1.15

Other Minority Shareholders 35,869,360 35,869,360 45.67

Total 78,536,038 78,536,038 100.00

Remark:

* As at the latest book closing date.

1 General investment business with 100% shareholdings by Mrs. Ho Lien Fung and family

2 Investment Holding business with 100% shareholdings by Mrs. Ho Lien Fung and family

3 Listed on the Stock Exchange of Thailand as a hotel and property development business

4 Register in Thailand as property rental business

5 Listed on the Stock Exchange of Thailand as banking business

6 Company registered overseas, contact address : Deutsche Bank AG, Thailand Branch No. 63, 27th Floor, Athenee Tower, Wireless

Road, Lumpini, Pathumwan, Bangkok, 10330.


Company’s dividend policy The Company’s dividend policy to be distributed to the

shareholders is considered based on the consolidated

net profit but excluding unrealized foreign exchange

gains or losses and not exceeding the retained earnings

reported in the financial statements of the Company

only. However, the dividend payment is subjected to

the discretion of the Board of Directors and must be

approved by the shareholders’ meeting.

Subsidiaries’ dividend policy The subsidiary’s dividend policy is subject to the

discretion of the Board of Directors of the Company

and each subsidiary in consideration of available cash

funds af te r tak ing into account main capi ta l

expenditures and debt repayment agreements in

subsequent years.

Dividend Payment Policy

Remuneration Policy Employees’ Remuneration The Company’s remuneration policy is built on a

transparent appraisal system and formulated to drive

performance of the employees, who are its most

important asset. The objective of the Company’s

remuneration policy is to attract, motivate, reward and

retain qualified staff. The typical compensation package

for employees comprises basic salary, bonus, employee’s

provident funds and other benefits. Payment of bonus is

based on the annual performance of the Company as

well as the performance of each individual employee.

In regard to the remuneration of the Company’s senior

executives, the aim is to motivate them to achieve the

Company’s annual and long-term goals and to ensure

that they are aligned with the shareholders’ interests. In

determining the composition of the package for the

senior executives, market standard of the same industry,

as well as experience, duties, roles and responsibilities

along with potential benefits gained from each

executive are taken into consideration. Furthermore

senior executives who are assigned with additional tasks

shall be entit led to an increase in the level of

remuneration as deemed appropriate.

Directors’ Remuneration The fees for the directors reflect the scope and extent

of a director’s responsibilities and obligations. They are

measured against the industry benchmarks and are

competit ive. The Nomination and Remunerat ion

Committee will consider and recommend annually the

proper director’s remuneration to the Board of Directors

to be proposed for shareholders’ approval at the

Annual General Meeting (“AGM”).

Remuneration paid to Board of Directors and Executives

in 2013 are disclosed in the Company’s 2013 Annual

report and Form 56-1 under the section “Directors’ and

Executives’ Remuneration”.


Committee Structure

The Company’s organizational structure consists of three

committees, namely:

1. Board of Directors The Board of Directors comprises 9 directors, 3 of

whom serve as independent directors. Details of the

independent director are further described under the

heading “Corporate Governance” in Form 56-1 and

in the Company’s 2013 Annual Report and Form 56-1.

Name Position

1 Ms. Pinyada Viriya Chairman of the Board

2 Mr. Umnad Sukprasongphol Director

3 Ms. Tawiratt Narasuj Independent Director

4 Mr. Somchai Towiwat Independent Director

5 Mr. Teerawut Charoensuk Independent Director

6 Ms. Sirivan Skulkerevathana Director

7 Mr. Ariel P Vera* Director

8 Mr. Thawan Petchlawlian Director

9 Ms. Manee Lueprasert Director

Remark: * Mr. Hwee Liang Tee has resigned from his directorship

in the Company with effect from April 29, 2013 and

the Board of Directors’ meeting of the Company

has approved the appointment of Mr. Ariel P Vera,

a new director of the Company, to replace

Mr. Hwee Liang Tee with effect from August 14, 2013

DutiesandResponsibilitiesoftheCompany’sBoardof

Directors

The Board of Directors has a duty to determine the

Company’s policies and overall strategies, as well as

eff iciently supervise the management of the

Company’s business operation. In addition to the

specified duties, responsibilities of the Board of

Directors also include the following:

1. To formulate and approve the overall financial

pol ic ies, st rategies and object ives of the

Company;

2. To rev iew f inancia l per formance and be

respons ib le for the Company’s f i nanc ia l

statements;

Management

3. To supervise and approve major initiatives, annual

budgets, major investments, and decisions on the

Company’s capital;

4. To ensure that the sufficiency of the Company’s

internal control is regularly revised and evaluated;

5. To approve nominations for members of the

Board of Directors and appointments for various

committees;

6. To take responsibility for good governance; and

7. To approve the Audit Committee and the

Nomination and Remuneration Committee Charter

in order to clearly define the scope of duties

and responsibilities of the Audit Committee and

the Nomination and Remuneration Committee.

The Board of Directors may discharge the above-

mentioned duties either directly or through the

various committees which have been set up,

primarily the Audit Committee and the Nomination

and Remuneration Committee. The practice of

granting the Board of Directors’ power to the

committees allows the Board of Directors to function

efficiently by giving the committees authority to

make decisions within the scope of authority and

duties specified while exercising control over the

policies and major decisions.

Termofoffice

The term of office of a Director of the Board shall

be 3 years. A Director of the Board who vacates

his/her office by rotation may be re-appointed.

In assuming the position of Director and/or Independent

Director, each director will receive all important

information about the Company, along with Articles

of Association of the Company related to the roles

and responsibilities of the Board of Directors, as well

as advice concerning the laws, rules, regulations and

conditions related to being a Director of a listed

company on the Stock Exchange of Thailand. The

person will also receive an orientation of the

Company’s bus i ness fo r them to have the

knowledge and better understanding of the

Company’s business.


2. Audit Committee The Audit Committee comprises of 3 Independent

Directors of the Company as follows:

Name Position

1 Ms. Tawiratt Narasuj Chairman

2 Mr. Teerawut Charoensuk Member

3 Mr. Somchai Towiwat Member

Ms. Tawiratt Narasuj, the Chairman of the Audit

Committee, has adequate expertise and experience

to review the creditability of the financial reports.

DutiesandResponsibilitiesoftheAuditCommittee

1. To review the Company’s financial reporting

process to ensure that it is accurate and

adequate;

2. To review the Company’s internal control system

and internal audit system to ensure that they are

suitable and efficient, to determine an internal

audit unit’s independence, as well as to approve

the appointment, transfer and dismissal of the

chief of an internal audit unit or any other unit in

charge of an internal audit;

3. To review the Company’s compliance with the

law on securities and exchange, the Exchange’s

regulations, and the laws relating to the Company’s

business;

4. To consider, select and nominate an independent

person to be the Company’s external auditor,

and to propose such person’s remuneration, as

well as to attend a non-management meeting

with an external auditor at least once a year;

5. To review the connected transactions, or the

transactions that may lead to confl icts of

interests, to ensure that they are in compliance

with the laws and the Exchange’s regulations,

and are reasonable and for the highest benefit

of the Company;

6. To prepare, and to disclose in the Company’s

Annual Report, an Audit Committee’s report which

must be signed by the Audit Committee’s Chairman

and consist of at least the following information:

a) an opinion on the accuracy, completeness and

creditability of the Company’s financial report,

b) an opinion on the adequacy of the Company’s

internal control system,

c) an opinion on the compliance with the law

on securities and exchange, the Exchange’s

regulations, or the laws relating to the

Company’s business,

d) an opinion on the suitability of an auditor,

e) an opinion on the transactions that may lead

to conflicts of interests,

f) the number of the Audi t Commit tee

meetings, and the attendance of such

meetings by each committee member,

g) an opinion or overview comment received by

the Audit Committee from its performance of

duties in accordance with the charter, and

h) other transactions which, according to the

Audit Committee’s opinion, should be known

to the shareholders and general investors,

e) subject to the scope of duties and responsibilities

assigned by the Company’s Board of Directors;

7. To perform any other act as assigned by the

Company’s Board of Directors, with the approval

of the Audit Committee;

8. To report the activities of the Audit Committee to

the Board of Director;

9. To review and oversee the Company’s practice

of good corporate governance;

10. In performing the duty of the Audit Committee, if

there is a transaction or any of the following acts

which may materially affect the Company’s

financial condition and operating results:

a) a transaction which causes a conflict of

interest;

b) any fraud, irregularity, or material defect in

an internal control system; or

c) an infringement of the law on securities and

exchange, regulations of the Stock Exchange

of Thailand or the laws relating to the

business of the Company

the Audit Committee shall report such transaction

or act to the Board for rectification within the

period of time that the Audit Committee thinks

fit. If the Board or management fails to make a

rectification within such period of time, any Audit

Commit tee member may repor t on such

transaction or act to the Office of the Securities

and Exchange Commission or the Stock Exchange

of Thailand, and


11. To investigate and report the preliminary result to the

Office of the Securities and Exchange Commission

and the external auditor within 30 days upon receipt

of the fact from the external auditor in relation to

any suspicious circumstance that the director,

manager or any person responsible for the operation

of the Company commits an offence under the law

on securities and exchange.

Termofoffice

The term of office of a member of the Audit

Committee shall be 3 years. A member of the Audit

Committee who vacates his/her office by rotation

may be re-appointed.

In the case of any vacancy occurring in the Audit

Committee otherwise than by rotation, the Board of

Directors of the Company shall appoint a fully-qualified

person to be a director in order that the Audit

Committee reaches the full number stipulated by the

Board of Directors of the Company. The person

replacing an Audit Committee member shall remain in

office for the period of time which the Audit Committee

member, whom he or she replaces, is entitled.

3. Nomination and Remuneration Committee The Nomination and Remuneration Committee

comprises of 3 members, 2 of whom are Independent

Directors as follows:

Name Position

1 Mr. Somchai Towiwat Chairman

2 Mr. Teerawut Charoensuk Member

3 Ms. Pinyada Viriya Member

Duties and Responsibilities of the Nomination and

RemunerationCommittee

1. To propose gu ide l i nes and make broad

recommendations for the annual salary increment

and bonus policies for the Company;

2. To review and award the bonus, salary increment

and incentives of the Company’s Chairman and

his relatives who are employees of the Company;

3. To review and approve the expense claims of

the Company’s Chairman;

4. To review and if necessary, propose changes to

the remuneration of the Company’s directors

serving on the Board of Directors, Audit Committee

and Nomination and Remuneration Committee;

5. To review and if necessary, propose changes or

additions to senior management welfare, benefit

(such as employee stock options and other

employee welfare allowances, subsidies and

schemes), salary increment and bonus policies.

The emolument of individual employees shall be

determined by the management of the Company;

6. To establish criteria for Board membership;

7. To formulate a standard and transparent process

for the selection of directors;

8. To propose and/or evaluate directorial candidates

and Board committee members for consideration

by the Board when there is a vacancy;

9. To assess independent directors to identify if the

independence of any is compromised and if

new independent directors are required under

the Board’s policy;

10. To inform the Board of the names of directors

and Board committee members who are retiring

by rotation and make recommendations to the

Board as to whether the Board should support

the renomination of those retiring directors and

committee members;

11. To review the Committee charter at least once a

year and recommend modifications to the Board

of Directors as needed; and

12. To report to the Board of Directors on the

Committee’s activities and findings.

TermofOffice

The term of office of a member of the Nomination and

Remuneration Committee shall be 2 years. A member of

the Nomination and Remuneration Committee who

vacates his/her office by rotation may be re-

appointed.

In the case of any vacancy occurring in the

Committee otherwise than by rotation, the Board of

Directors of the Company shall appoint a qualified

person to be a committee member in order that the

committee reaches the full number stipulated by the

Board of Directors of the Company. The person

replacing a committee member shall remain in

office for the period of time which the committee

member whom he/she replaces is entitled.


Nomination of Directors and Executives Appointment and removal of directors of the Company

shall conform to the Company’s Articles of Association,

which stipulate the following:

Appointment of Directors 1. The Company’s Board of Directors shall consist of no

fewer than 5 directors, more than half of whom shall

reside in the Kingdom of Thailand.

2. Directors shall be elected by the meeting of shareholders.

In voting, it shall be deemed that one share represents

one vote. Each shareholder shall exercise all of his/

her votes as per paragraph one. Shareholders may

vote to choose one person or more as director or

directors. Voting rights, however, may not be divided.

Persons who receive the most votes, in descending

order, shall be elected directors as per the number

of directors required or to be elected at that time.

In case the persons in the subsequent orders receive

an equal number of votes and the number of such

persons exceeds the number of directors required or

to be elected at that time, the chairman shall have

the casting vote.

3. Should a position of director become vacant due to

any reasons other than expiration of the term of office,

the committee shall select a person who has all the

required qualifications and is not prohibited pursuant

to Article 68 of the Public Company Act B.E. 2535 as

director, in the next committee meeting. However, if

the remaining term of directorship is less than 2

months, a replacement is not required. The person

appointed as replacing director shall serve only for the

remaining term of the director whom he/she replaces.

Should the number of the remaining directors not

constitute a quorum owing to vacancies, the

remaining directors may act on behalf of the

committee only to hold a shareholders’ meeting in

order to elect replacements for the vacant

directorship positions.

Such shareholders’ meeting held for the purpose of

electing replacements for vacant directorship

positions shall be arranged within 1 month from the

day when the number of the remaining directors

fails to constitute a quorum.

Removal of Directors 1. At each Annual General Meeting, one-third of the

directors shall retire from office. In case the number

of total directors does not permit it to be divided

into 3, the number of directors to retire shall be the

closest number possible to one-third. A retiring

director shall be eligible for re-election.

2. In addition to retirement due to expiration of the term

of office, the term of directorship shall end when:

a) a director dies;

b) a director resigns;

c) a director lacks a qualification or is prohibited

pursuant to Article 68 of the Public Company Act

B.E. 2535;

d) the shareholder’s meeting passes a resolution to

remove a director; or

e) the court orders a director to resign.

A resolution of a shareholders’ meeting to remove a

director prior to the end of the term of directorship

shall require no less than three-fourths of the votes of

the shareholders present who have voting rights and

whose shares in the aggregate represent no less

than one-half of the shares held by the shareholders

who are present and have voting rights.

Managements of the Company

As at December 31, 2013, the Company’s Management

consists of 7 personnel as follows:

Name Position

Ms. Pinyada Viriya Joint Managing Director

(Corporate & Finance)

Mr. Umnad Sukprasongphol Joint Managing Director

(Business Operation)

Ms. Sirivan Skulkerevathana Senior Assistant Vice

President - Finance

Ms. Manee Lueprasert Senior Finance Manager

Mr. Chalermkeit Chalermpronkit Senior Operation Manager

Mr. Chainarong Chimchan Senior IT Manager

Ms. Dhitirat Makepoowadol * Accounting Manager

Remark : * Promoted to Senior Accounting Manager with

effect January 1, 2014.

The names and qualif ications of the Company’s

Management are disclosed under the heading “Details

of pos i t ion of D i rector and Execut ives as at

31 December, 2013” in the Company’s 2013 Annual

Report and Form 56-1.


Company Secretary

The Board of Directors appointed Ms. Manee Lueprasert

as the Company Secretary as at August 27, 2008, as

appeared under the section “Details of position of

Directors and Management as at 31 December 2013” in

the Company’s 2013 Annual report and Form 56-1.

Directors’ and Executives’ Remuneration

MonetaryRemuneration

A. Directors:

Monetary remuneration was paid to 10* directors of

the Board for the 12 months ended December 31,

2013 in the total amount of Baht 6,163,450.

Organization Chart

Joint Managing Director

Business Operation

Board of Directors

Nomination & Remuneration Committee

Audit Committee

Internal Audit Manager

SAVP Finance

Senior Finance Manager

Senior IT Manager

Senior Accounting Manager

Senior Operation Manager

Accounting Manager**

Management Account Manager

HR Manager

Purchasing & Administration

Manager

Q.C. Manager

Export Manager

Sales & Marketing Manager

Factory Managers*

Operation Manager

Remarks * Factory Managers - Bangpakong Plant, Phimai Plant and Thakhantho Plant ** Promoted to Senior Accounting Manager with effect January 1, 2014.

Joint Managing Director

Corporate and Finance


(1) MonetaryRemuneration

Remuneration and other benefits of the Directors during the year 2013

Director’sRemuneration(Baht)

Audit Nomination

Name Position Board Committee and Total

Remuneration

Committee

Ms. Pinyada Viriya Chairman and Nomination and

Remuneration Committee Member 1,011,000 - 27,000 1,038,000

Mr. Umnad Sukprasongphol Director 606,000 - - 606,000

Ms. Tawiratt Narasuj Independent Director and

Audit Committee Chairman 606,000 171,600 - 777,600

Mr. Somchai Towiwat Independent Director,

Audit Committee Member and

Nomination and Remuneration

Committee Chairman 606,000 105,600 44,400 756,000

Mr. Teerawut Charoensuk Independent Director,

Audit Committee Member and

Nomination and Remuneration

Committee Member 606,000 105,600 27,000 738,600

Ms. Sirivan Skulkerevathana Director 606,000 - - 606,000

Mr. Hwee Liang Tee* Director 202,000 - - 202,000

Mr. Ariel P Vera Director 227,250 - - 227,250

Mr. Thawan Petchlawlian Director 606,000 - - 606,000

Ms. Manee Lueprasert Director 606,000 - - 606,000

Total 5,682,250 382,800 98,400 6,163,450 Remark: * Mr. Hwee Liang Tee has resigned from his directorship in the Company with effect from April 29, 2013 and the Board of

Directors’ meeting of the Company approved the appointment of Mr. Ariel P Vera as a new director of the Company,

to replace Mr. Hwee Liang Tee with effect from August 14, 2013.

B. ExecutivesoftheCompany:

Monetary remuneration comprising of salaries and

bonus was given to 7** management (including

Accounting Manager) in 2013 in the total amount of

Baht 17,209,090.

(2) Non-monetaryRemuneration

A. Directors:

-None-

B. ExecutivesoftheCompany:

• Provident fund payment

The Company has established a provident fund

for the management and employees of the

Company in the ratio of 5 percent of their

salary. In 2013, the Company contributed a fund

of total Baht 670,632 for the 7 Management.


• Employee’s benefits

Employee’s benefits such as medical expenses,

life & health insurance, etc. were given to 7**

management (including Accounting manager) in

2013 in the total amount of Baht 1,258,519.

Remark:

** During the first quarter of the year 2013, there were 5

management in the Company. However 2 were promoted

during the second quarter of 2013, therefore increasing the

number of management to be 7 in total.

HumanResources

The Group has a total of 1,459 employees out of which

761 are employed by Thai Wah Starch Public Company

Limited and 698 are employed by its subsidiaries. As at

December 31, 2013 employee’s benefits was paid in

terms of welfare equivalent to Baht 287,230,222 which

comprised of salary, overtime, car allowance, bonus,

social security, provident fund, medical expenses and

Life & health insurance, etc.,

Detailsoftheemployee’sbenefitsasseenbelow:

2013 ThaiWahStarchPublic Subsidiaries*** Total

CompanyLimited

Direct labor (person) 625 624 1,249

Indirect labor (person) 79 68 147

Head office employee (person) 57 6 63

Total (person) 761 698 1,459

Employee Benefit (Baht) 176,112,504 111,117,718 287,230,222

Remark: *** Subsidiaries companies include Thai Nam Tapioca Company Limited, DI Company Limited, Thai Wah (6) Company

Limited and Tay Ninh Tapioca Company Limited.


Corporate Governance The Company is committed to developing an efficient and

transparent administrative and management system in

order to gain the confidence of shareholders, investors and

all others involved. The Company’s Board of Directors

and Executives never cease in attempting to strengthen

the Company’s governance. For this reason, various

principles have been adopted and applied to suit the

Company’s circumstances, details as shown below:

1. Rights of Shareholders The Company recognizes the importance of

shareholders’ rights and has always acted in

compliance with the stipulations of the laws. In 2013,

the Company’s Annual General Meeting was held

on April 19, 2013 where all shareholders had the

same voting rights, based on the proportion of their

holding in the Company’s shares.

• The Company has assigned Thailand Securities

Depository Company Limited, which is the

Company’s share registrar, to distribute the notice

and agenda of the Annual General Meeting to

the shareholders at least 10 days prior to the

meeting. The meeting documents also include the

facts and rationales, opinions of the Board as well

as other information relating to the agenda items

such as information on the persons nominated for

election as directors, auditors’ profiles, the part of

the Company’s Articles of Association that relates

to the shareholders’ meeting, map to the venue of

the shareholdings’ meet ing convenient for

attendance, proxy forms, documents and evidence

of entitlement to attend the meeting, etc., This is

to enable shareholders to prepare themselves for

the meeting. In addition, the notice of the

shareholders’ meeting will be advertised in the

press, all information contained in the meeting

documents will also be posted on the Company’s

website (www.thaiwah.com) at least 1 month prior

to the meeting. Moreover, shareholders are always

invited to register at least 1 hour before the

meeting begins.

• At each shareholders’ meeting, the Company

always arranges for legal advisors to examine the

registration process before the meeting, the

counting of shareholders, proxies for shareholders

and shares of shareholders present, and the

vote-counting procedure for each agenda item,

in order to ensure that the Company proceeds in

accordance with relevant laws and regulations.

• On the date of the meeting, the Company

prov ides an e lect ron ic sys tem for the

convenience of the shareholders, which helps to

speed up the registration process. Furthermore

the barcode wil l show each shareholder’s

reference number which is included in the proxy

form. In addition, for every vote, the Company

will collect the ballot paper from the shareholder

in order to calculate the result of the vote.

• Not only does the Company adhere strictly to

the laws, but it also attempts to conduct

meetings appropriately and transparently. The

Chai rman of the meet ing a lways of fe r s

shareholders opportunities to express their views

and pose questions about issues concerning the

agenda of the meeting, before concluding the

resolution for each agenda item.

• All shareholders have the same basis and rights

in the casting of votes at meetings and the

receipt of dividends when declared by the

Company. These are calculated based on their

respective shareholding in the Company.

• At every shareholders’ meeting, shareholders are

given the right to approve important matters

such as election of directors (shareholders can

elect directors individually), directors’ remuneration,

appointment of auditors and dividend payment, etc.,

• The Company also does not invite the minority

shareholders to nominate their own candidates

to be appointed as the Company’s director’s

head of the meeting. This is because the

Company already gives all shareholders an

opportunity to nominate their own candidates


(who meet the requirements under the Public

L imited Companies Act) and to vote for

candidates at the shareholders’ meeting.

• Before the start of every shareholder’s meeting,

the Company Secretary will explain the voting

methodology to shareholders. A team of legal

counsels from a leading international law firm is

invited to verify the registration procedure before

the Chairman of the meeting announces to the

shareholders, the number of shareholders and

proxy holders present at the meeting and the

number of shares held by them. The legal

counsels also verify the vote counting procedure

in respect of each agenda item before the votes

are announced as resolution of the shareholders’

meeting. Shareholders may verify the detailed

results of the vote of each agenda item at the

end of each meeting. The same results and a

summary of questions from shareholders will also

be included in the minutes of the meeting which

are accurately and completely documented in

all material aspects and will be sent to all

shareholders for their review prior to the following

meeting.

• The Company’s policy in conducting shareholders’

meet i ngs i s not on ly to meet a l l legal

requirements but to also provide a platform and

opportunity for shareholders to communicate their

views and ask the directors and the management

questions regarding matters affecting the Company.

The Chairman allocates appropriate time for

discussion and encourages the shareholders to

express their opinions and ask questions related to

the Company’s operation. In addition, to facilitate

shareholders in protecting their rights, shareholders

who have any questions that require the Company’s

clarification during the meeting may send their

questions to the Company in advance at

“[email protected]” or fax them to 66 (0) 2285 0268.

• Apart from the external auditor who will attend

the Annual General Meeting, the Chairman of the

Board, the Chairman of the Audit Committee and

the Chairman of the Nomination and Remuneration

Committee, and all of the Company’s Directors will

also endeavor as far as reasonably practicable

to be present at the shareholders’ meeting in

order to assist the Board in addressing queries

raised by the shareholders. The Company also invites

its legal counsels from a leading international law

firm to attend the meeting in case a legal

question requiring clarification arises during the

meeting. Furthermore, the Company provides a

professional translator to be present at the

meeting to assist shareholders and the Board to

communicate more effectively in English and Thai.

At the previous 2013 Annual General Meeting, 8

out of total 9 directors were present at the

Meeting, comprising the Chairman of the Board,

the Chairman of the Audit Committee, the

Chairman of the Nomination and Remuneration

Committee, and other directors. Details of their

names are stated in the minutes of the 2013

Annual General Meeting.

• Any shareholders who arrive at the meeting after

the meeting has begun are still entitled to vote on

the agenda items that are still under consideration

and have not been voted upon.

• News and information relating to the Company is

disseminated through the Company’s website

(www.thaiwah.com), which includes information

such as the resolutions of the Company’s Board

of Directors on important matters, resolutions of

the shareholders’ meetings, financial information,

information which may affect the Company’s

share price, Annual Report, etc.,

2. Equal Treatment of Shareholders The Company is well aware of its duty to treat

shareholders fairly in order to ensure the equality of

shareholders’ rights and benefits. Thus, the Company

follows the procedures below:

• For shareholders who are unable to attend a

meeting in person, the Company provides

opportunity for such shareholders to appoint

another person as proxy to attend the meeting

on their behalf by using proxy form B sent by the

Company. Proxy form B is one of the forms

prescribed by the Ministry of Commerce which

allow shareholders to make voting directions.

Moreover, the Company provides opportunity for


shareho lders to appoint the Company’s

independent director as proxy to undertake proxy

voting on behalf of shareholders who are unable

to attend the meeting. The name of the

independent director is provided in the proxy

forms , together wi th the prof i le of that

independent director who have been given

proxy to vote on behalf of shareholders that are

unable to attend the meeting, all of which are

attached as part of the meeting documents.

• Any director or management who has an interest

in, or is related to, any transaction between the

Company and an interested or related person

will not participate in the decision making

process involving such transaction. The Company

has disclosed and strictly followed the procedures

on such transaction in accordance with the

regulations of the SET and notification of the

Capital Market Supervisory Board.

• The Company ensures that di rectors and

management are aware of their duty to report a

change in their holding of the Company’s

securities to the SEC within 3 business days, in

accordance with the Securities and Exchange

Act. The securities holding report is also included

in the agenda of the Board meeting for the

Board’s acknowledgment once every 3 months.

• The Company has formulated a Code of Business

Conduct to provide guidelines for the Board,

senior management and employees of all levels

to comply with. The Statement includes the

prohibit ion on the improper use of insider

information for personal benefit or to benefit

others. Additionally, the Board approved the

policy on dealing in securities of the Company

which prohibits the dealing in the Company’s

shares whi le in possess ion of unpubl ished

confidential and price-sensitive information during

the “Embargo Period”. There has been no

violation of the policy found during 2013.

3. Roles of Stakeholders The Company realizes the importance of rights of all

groups of stakeholders and conducts its operations

fairly and strictly in compliance with all laws, rules

and regulations.

Shareholders: The Board of Directors is committed

to performing its duties honest ly,

transparently and diligently in the best

interest of all its shareholders in order

to preserve and enhance long-term

shareholder va lue. A l l important

information which may have an impact

on the Company’s share price and/or

shareholders decisions are fully disclosed

on a timely manner.

Employees: The Company is committed to its policies

and observes the regulations regarding

human resource management and

employment. All operations of the

Company conform to the labor laws.

To boost a sense of pride in their work,

all employees are treated fairly and

without discr iminat ion or double

standards, and also adhering to not

taking any actions that would violate

the human rights. Additionally, the

Company provides its employees a

safe, hygienic and conducive working

environment and a provident fund.

Fur thermore, the Company a l so

encourages its employees to attend

training courses related to their lines of

work i n order to broaden the i r

knowledge and sharpen their skills.

Customers: The Company st r ives to achieve

customer satisfaction by providing

quality products and prompt delivery.

Competitors: The Company believes in fair business

competition and therefore avoids any

actions that may prevent, obstruct or

discourage potential competitors from

entering the market in which the

Company operates in. Furthermore the

Company wil l not engage in any

fraudulent act to violate or obtain

competitors’ trade secrets.

Society and The Company is committed to caring for

environment: the society by ensur ing that the

Company’s manufacturing processes does

not cause harm to the environment.


Suppliers: The Company strives to forge long-term

business relationships with its suppliers

and therefore has the policy to always

give a fair profit to its suppliers and to

respect payment terms and conditions.

In addition, in selecting its suppliers,

the Company gives all suppliers an

equal opportunity to propose their bid.

4. Disclosures and Transparency The Company realizes the importance of disclosing

essential information related to the Company. The

Company accurately and adequately disclosed

general information, financial information and

information which might affect investors. Such

information are reliable and in accordance with

specifications of the office of the Securities and

Exchange Commission. The distributions of such

information are made through the Stock Exchange

of Thailand in order for the Company’s shareholders

and stakeholders to have equal access to the

information.

• Each of the Directors and Executives of the

Company has filed with the Company a report

covering his interest or his related person’s

interest in relation to management of the

Company or its subsidiaries in accordance with

the criteria and procedures as specified in the

notification of the Capital Market Supervisory

Board and has updated and filed with the

Company within 30 days should there be any

change in the report. Such report is also

included in the agenda of the Board meeting for

the Board’ acknowledgment once every 3

months.

• In the previous year, the Company disclosed all

general and financial information as well as

information which may affect the price of the

Company’s securities correctly, completely,

transparently and on a timely manner, in

accordance with the rules and regulations of the

SEC and the SET. All information is communicated

to investors, shareholders and relevant sectors

through the channels of the SET and the

Company’s website (www.thaiwah.com).

• Individual investors, shareholders, stock analysts

and state agencies may contact the Company

through the Company Secretary at telephone

number 66 (0) 2285 0040 or at [email protected].

• The Company’s financial statements contain

accurate and complete information and are

prepared in accordance wi th genera l ly

accepted Accounting Standards. In addition,

they are audited/ reviewed by auditors from a

wel l known audi t i ng f i rm (cur rent ly DIA

International Audit Company Limited) and are

approved by the Company’s Audit Committee

and Board before being disclosed through the

SET. The information relating to the “Board of

Directors’ Responsibi l ity for the Company’s

F inancia l Statements” i s avai lable in the

Company’s Annual Repor t . In 2013, the

Company’s quarterly and annual financial

statements were certified unconditionally from the

auditor.

• In 2013, the Company made full disclosure of

information within the time frame specified in the

regulations of the SET and the SEC. In addition,

neither the SET nor the SEC challenged that the

Company had fai led to comply with any

disclosure requirement.

• The Company wishes to refer the following

matters to the disclosure made in other places:

a) The name of directors and the scope of the

powers, duties and responsibilities of the

Board and other committees are detailed

under the heading “Management” in the

Company’s 2013 Annual Report and Form 56-1.

b) The professional experience of the directors

and members of other committees is detailed

in Attachment 1 to Form 56-1 and under the

heading “Board of Directors and Management”

in the Company’s 2013 Annual Report.

c) The number of Board meetings held and the

number of Board meetings attended by each

director in 2013 are detailed under the

heading: “Meeting of the Board and Sub-

Committee” in the Company’s 2013 Annual

Report and Form 56-1.

d) The performance of the Audit Committee in

the past year is detailed in Attachment 3 to


Form 56-1, and under the heading “Report of

the Audit Committee” in the Company’s 2013

Annual Report.

e) The performance of the Nomination and

Remuneration Committee in the past year is

detailed in Attachment 4 to Form 56-1.

f) The remuneration for directors and management

is detailed under the heading “Directors’ and

Executives’s Remuneration” the Company’s

2013 Annual Report and Form 56-1.

5. Responsibilities of the Board of Directors 5.1BoardofDirectorsStructure

5.1.1CompositionoftheBoardofDirectors

The shareholder’s meeting decided that the

Company’s Board of Directors would

comprise of 9 members, 3 of whom would

be Independent Directors namely Ms.

Tawiratt Narasuj, Mr. Teerawut Charoensuk and

Mr. Somchai Towiwat. These independent

directors shall independently pose questions,

express opinions or disagree in case there

are conflicting views on issues which affect

shareholders’ or stakeholders’ interests.

5.1.2Definitionof“IndependentDirector”

“An independent director” is defined as a

person who has all the required qualifications

and is independent pursuant to the

specifications prescribed by the Office of

the Securities and Exchange Commission.

The foregoing specifications are as follows:

a) holding shares not exceeding 1% of the

total number of voting rights of the

company, i t s parent company,

subsidiary, affiliate or juristic person

which may have conflicts of interest,

including the shares held by related

persons of the independent director;

b) neither being nor having been an

executive director, employee, staff, or

advisor who receives salary, or a

controlling person of the company, its

parent company, subsidiary, affiliate,

same-level subsidiary or juristic person

who may have conflicts of interest

unless the foregoing status has ended

not less than two years;

c) not being a person related by blood or

registration under laws, such as father,

mother, spouse, sibl ing, and child,

i nc lud ing spouse of the chi ld ren,

execut ives , major shareho lders ,

controlling persons, or persons to be

nominated as executive or controlling

persons of the company or its subsidiary;

d) not having a business relationship with

the company, its parent company,

subsidiary, affiliate or juristic person who

may have conflicts of interest, in the

manner which may interfere with his

independent judgment, and neither

be ing nor hav ing been a major

shareholder, non-independent director or

executive of any person having business

relationship with the company, its parent

company, subsidiary, affiliate or juristic

person who may have confl icts of

interest unless the foregoing relationship

has ended not less than two years.

The term ‘bus i ness re lat ionsh ip’

aforementioned under paragraph one

includes any normal business transaction,

rental or lease of immovable property,

transaction relating to assets or services

or grant or receipt of financial assistance

through receiving or extending loans,

guarantee, providing assets as collateral,

including any other similar actions,

which result in the applicant or his

counterpar ty be ing sub ject to

indebtedness payable to the other party

in the amount of 3% or more of the net

tangible assets of the applicant or Baht

20 million or more, whichever is lower.

The amount of such indebtedness shall


be calcu lated accord ing to the

calcu lat ion method for value of

connected transact ions under the

Notification of the Board of Governors of

the Stock Exchange of Thailand Re:

Disclosure of Information and Act of

L is ted Companies Concerning the

Connected Transactions mutatis mutandis.

The combination of such indebtedness

shall include indebtedness taking place

during the course of 1 year prior to the

date on which the business relationship

with the person commences;

e) neither being nor having been an

auditor of the company, its parent



i n teres t , and not be ing a major

shareholder, non-independent director,

executive or partner of an audit firm

which employs auditors of the company,

its parent company, subsidiary, affiliate

or juristic person who may have conflicts

of i n teres t un less the foregoing

relationship has ended not less than 2

years;

f) neither being nor having been any

professional advisor including legal

advisor or financial advisor who receives

an annual service fee exceeding Baht 2

million from the company, its parent



interest, and neither being nor having

been a major shareho lder , non-

independent director, executive or

partner of the professional advisor unless

the foregoing relationship has ended not

less than 2 years;

g) not being a director who has been

appointed as a representative of the

company’s director, major shareholder

or shareholders who are related to the

company’s major shareholder;

h) not having any characteristics which

make him incapable of expressing

independent opinions with regard to the

company’s business affairs.

After having been appointed as independent

director with qualifications complying with the

criteria under (a) to (h) of paragraph one,

the independent director may be assigned by

the Board of Directors to take part in the

business decision of the company, its parent

company, subsidiary, affiliate, same-level

subsidiary or juristic person who may have

conflicts of interest on the condition that

such decision must be a collective one.

5.1.3NominationofDirectors

Firstly any candidate being nominated as

the Company’s directorship must have all

the required qualifications as prescribed by

the Stock Exchange of Thailand, the SEC

and the Public Company Act.

When appointing a new candidate to the

Board, the Nomination and Remuneration is

responsible for the selection and the

screening of the individuals to ensure that

they are qualified under the Articles of

Association of the Company, as well as

taking into consideration the nature of

business and future plans of the Company

in order to obta in profess iona l and

diversified individuals. The candidate must

also possess direct experience with the

requ i rements of the Company. The

Nomination and Remuneration Committee

will also review the structure, size and

composition of the Board of Directors

before suggesting appropriate changes to

the Board for consideration and subsequent

approval from the shareholders.


The criteria of appointment of the Board of

Directors by the Shareholders’ meeting are

as follows:

1. D i rectors sha l l be e lected in the

shareholders’ meeting, with regard to

voting, shareholders shall have vote

equaling to the number of shares held

by each of them or one share is

entitled to one vote.

2. Each shareholder may exercise all the

votes he or she has to elect one or

several persons as directors, but may not

allot his or her votes to any person at

any number.

3. The persons who received the highest

votes in their respective order of the

votes shall be elected as directors until

a l l of d i rector pos i t ions that the

Company may have or that are to be

elected at such meeting are filled.

Where the votes cast for candidates in

descending order are tied, which would

otherwise cause the number of directors

to be exceeded, the Chairman of the

meeting shall have a casting vote.

If any vacancy occurs in the Board of

Directors other than by rotation, the Board

of Directors shall elect another person who

is qualified and has not been prohibited by

Section 68 of the Public Limited Company

Act. B.E. 2535 to be a director for the next

directors’ meeting, except when the period

of office for the vacating director is less

than 2 months, it is then not necessary to

appoint any new director. The appointed

person shall stay in office for the remaining

per iod of the vacating director. The

resolution of the Board of Directors for the

above shall not be less than three-fourths of

the remaining directors.

The appointment of the Board of Directors

by the Shareholders’ Meeting shall be in

accordance to the Company’s articles of

association as disclosed under the heading

“Management” in the Company’s 2013

Annual Report and Form 56-1.

5.2Sub-committees

The Board approved the establishment of two

sub-committees to assist the Board in screening

details in order to achieve operational efficiency

as follows:

5.2.1AuditCommittee

The Audit Committee comprises of 3

Independent Directors, all of whom have

been appointed to oversee certain issues in

various areas within the scope of power,

duties and responsibilities assigned to them

by the Board of Directors. The Audit

Committee reports the results of its each

meeting to the Board of Directors’ meeting.

Furthermore the Chairman of the Audit

Committee has adequate expertise and

experience in reviewing the creditability of

the financial reports. The members and the

scope of duties and responsibilities of the

Audit Committee have been disclosed under

the heading “Management” i n the

Company’s 2013 Annual Report and From

56-1.

5.2.2NominationandRemunerationCommittee

The Nomination and Remuneration Committee

comprises of 3 members, all of whom have

been appointed to oversee the nomination

of directors, executives including determine

the remuneration for such persons The

Nomination and Remuneration Committee

also reports the results of its each meeting

to the Board of Directors’ Meeting. The

members and the scope of duties and

responsibi l it ies of the Nomination and

Remunerat ion Committee have been

d i sc losed under the heading

“Management” in the Company’s 2013

Annual Report and Form 56-1.

5.3Roles, Duties and Responsibilities of the Board of

Directors

5.3.1RolesandDutiesoftheBoardofDirectors

The Board of Directors has a significant duty

to supervise the Company’s administration

to ensure that it meets the objectives and


follows the prescribed strategies. The Board

of Directors cont inuously fol lows and

evaluates the Company’s performance to

ensure transparency and maximum benefit

fo r shareho lders and a l l g roups of

stakeholders. The Board of Directors also

oversees the Company’s operation to

ensure its effectiveness and efficiency.

Details of the Board scope of duties and

responsibilities have been disclosed under

the heading “Management” i n the

Company’s 2013 Annual Report and Form

56-1.

5.3.2CorporateGovernance

The Board of Directors has a significant duty

to supervise the Company’s administration

to ensure that it meets the objectives

strategies and plans that have been

approved by the Board. In order to achieve

maximum benefit to the Company and all

of its stakeholders; the Board of Directors

has delegated its authority and responsibility

to the management clearly.

In addition the Board of Directors also

controls the management and the business

operations of the Company’s subsidiaries

and associated companies in order to

maintain the benefits of the Company’s

investments in those subsidiar ies and

associated companies. Furthermore the

Company’s management are represented

as directors and management in those

subsidiaries and associated companies at

least in the proportion of shares held by the

Company. The nominated management

that are representing the Company must

perform their duties in the best manner that

would benefit the subsidiary and associated

company, which must also be approved by

the Company’s Board prior to the vote on

significant matters that are in the same

level as the Company’s matters. In addition,

the Company also needs to check the

regulations of the subsidiary related to

connected transactions, acquisition and

disposal of assets or any other significant

corporate transactions are complete and

accurate and the disclosure of such

transactions are made on arm’s length

basis, similar to that of the Company.

Moreover the Company also needs to

moni to r the f i l i ng and record ing of

documents, so that the Company may use

the information for review and preparation

of the consolidated financial statement in a

timely manner.

5.3.3CodeofBusinessConduct

The Company holds strongly to the belief

that good business ethics is one of the key

elements for sustainable growth. To protect

the interest of all stakeholders and in the

interest of promoting and advocating good

business ethics throughout the organization,

the Company has adopted the Code of

Business Conduct, approved by the Board

of Directors and communicated to the

di rectors , execut ives and employees

throughout the organization in order to

understand and to strictly adhere to the

Code accordingly.

5.3.4ConflictsofInterest

The Board of Directors gives great attention

to issues related to conflicts of interest.

Considerable efforts have been made to

prevent directors, executives and employees

from reaping personal benefits through their

pos i t ions as d i rector s , execut ives or

employees. Business transactions which may

lead to conflicts of interest are considered

by the Audit Committee and the Board of

Directors, where stakeholders are excluded

from the decision making process.

The Board of Directors closely supervises the

disclosure method to ensure that it fully

complies with the specifications, regulations


and procedures concerning disclosure of

information which may cause conflicts of

interest. All connected transactions are

disclosed clearly and accurately. Details are

further descr ibed under the heading

“Connected Transactions” in the Company’ s

2013 Annual Report and Form 56-1.

5.3.5 InternalAuditandControl

• Internal Control

The Company realizes the significance

of effective system of control, such as

Standard Operat i ng Procedures ,

par t icu lar ly i n management and

operations. Hence, the duties and

responsibilities of the employees and the

management are clearly defined.

• Internal Audit

Internal audit is an independent function

within the Company which reports

directly to the Audit Committee on

audit matters and to the Managing

Director on administrat ive matters.

Internal audits are performed to assist

the Board and Management in the

discharge of their corporate governance

responsibil it ies and to improve and

promote effective and efficient business

processes within the Company. The

internal auditor plans its internal audit

schedules annually in consultation with,

but independent of, Management and

its plans are submitted to and approved

by the Audit Committee. The Audit

Committee reviews the activities of the

internal auditors on a quarterly basis.

5.3.6 InternalAuditandControl

In the interes t of good governance

practice, the Company uses the Code of

Business conduct to guide the use of inside

information which is announced to all the

di rectors , execut ives and employees

throughout the organization for them to

understand and is encourage complying with.

The Company has notified the Board of

Directors and Executives in regard to the

announcement of the SEC that requires the

directors and executives to report changes

in their holdings of securities to the SEC

under Section 59 of the Securities Exchange

Commission Act of 2535 within 3 days,

should there be any changes to their

holdings. In addition, the Board of directors

and executives are also required to notify

the Company Secretary in order for the

changes to be recorded and summary of

each director’s and executive officers’

security can be presented to the upcoming

board meetings. The Board of Directors and

Executives officers are also informed of

the penalt ies in case of violat ion or

non-compliance with such requirements.

The Company has taken measures to

prevent the use of inside information (Insider

Trading). Board of directors, management

and employees, regardless of rank, are

prohibited from disclosing confidential and

price-sensitive corporate information or

dealing in the Company’s shares during the

Embargo period which includes 2 weeks

before and up to the date of the

announcement of results for each of the

first three quarters and 1 month before and

up to the date of the announcement of

results of the full - year financial results

respectively. The Company Secretary will

inform clearly 1 week in advance regarding

the blackout period to the Directors,

management and employees.

As such the above guidelines have been

approved by the Board of Directors.

5.3.7RemunerationoftheAuditors

• Audit’s Fee

The Company and its subsidiaries paid a

total audit’s fee of Baht 3,024,000 to the

audit firm for the fiscal year 2013, details

as below:


Company Audit’sfee(Baht)

Company Baht 983,000

26 subsidiary companies Baht 2,041,000

Total Baht 3,024,000

• NonAuditFees

-N/A-

5.4MeetingsoftheBoardandSub-committees

TheBoardofDirectors

The Company conducts regular Board meetings

in order to closely fol low the Company’s

performance. Additional meetings are also

convened as and when the circumstances

warrant. Throughout the year 2013, a total of 6

Board of Directors’ meetings was held. At each

meeting, the Company would inform the Board

of directors in advance so that they could

manage their t ime and could attend the

meetings. In addition, the Board of directors

would receive the agendas and the supporting

documents in advance to study before attending

the meeting.

The details of attendance of the Directors for

2013 are as follows:

BoardofDirectors No.ofAttendance

Ms. Pinyada Viriya 6

Mr. Umnad Sukprasongphol 6

Ms. Tawiratt Narasuj 6

Mr. Somchai Towiwat 6

Mr. Teerawut Charoensuk 6

Ms. Sirivan Skulkerevathana 6

Mr. Tee Hwee Liang* -

Mr. Ariel P Vera -

Mr. Thawan Petchlawlian 6

Ms. Manee Lueprasert 6 Remark: * Mr. Hwee Liang Tee has resigned from his

directorship in the Company with effect from

April 29, 2013 and the Board of Directors’

meeting of the Company has approved the

appointment of Mr. Ariel P Vera, a new

director of the Company, to replace Mr. Hwee

Liang Tee with effect from August 14, 2013.

During the meetings, the Chairman of the Board

would preside over and duly conduct the

meetings. All the members of the Board are

allowed to express their opinions freely. The

resolutions are passed with a majority vote,

providing that one director is eligible for one

vote. The director with any interest in the issue

under consideration or the director ineligible to

vote is excused and to be absent during voting.

TheAuditCommittee

In 2013, the Company conducted 4 Audit

Committee’s meetings, and each Audit Committee

members attended the meetings as follows:

Name No.ofAttendance

Ms. Tawiratt Narasuj 4



The Chairman of the Audit Committee allotted

suf f ic ient amount of t ime to a l low the

management to present information and the

members of the Audit Committee to discuss

important issues in great depth. Additionally,

when the Company’s financial statements were

reviewed, the Company’s auditor from DIA

International Audit Company Limited was asked

to attend the meeting. The Audit Committee has

the absolute right to participate in an inspection

or request cooperation from the management of

the Company. The Audit Committee has the

absolute discretion to request a director or a

senior executive to attend a meeting. In

addition, in 2013, the Audit Committee attended

one non-management meeting with the external

auditor to deliberate accounting approaches

and audit plans.

TheNominationandRemunerationCommittee

In 2013, the Company conducted 2 Nomination

and Remuneration Committee meeting and each

Nominat ion and Remunerat ion Committee

members attended the meetings as follows:


Name No.ofAttendance



Ms. Pinyada Viriya 2

The Chai rman of the Nominat ion and

Remuneration Committee allotted sufficient

amount of time to allow the members of the

Nomination and Remuneration Committee to

discuss important issues in great depth in order to

consider the nominat ion of the directors,

executives, and determine the remuneration in

appropriate. Including other agendas related to

the duties and responsibilities of the Nomination

and Remuneration Committee.

5.5BoardofDirectors’Report

FinancialReports

The Board of Directors has responsibil ity to

shareholders for the consolidated financial

statements of the Company and its subsidiaries,

as well as financial information which appears in

the Annual Report. Such financial statements are

prepared in accordance with the generally

accepted Accounting Pr inciples, and the

quarterly financial statements are reviewed every

quarter by an audit firm which also thoroughly

audits the annual financial statements. Essential

information related to the financial statements is

disclosed clearly and in full in the notes to

financial statements.

MinutesoftheMeeting

After the meeting, the Company Secretary is

responsible for preparing the minutes, and

sending the certified copies to the directors. The

minutes must then be approved at the following

Board’s Meeting, where the directors may make

comments, corrections, or additions to ensure the

greatest accuracy and completeness.

Minutes of the meetings of the Board of Directors

and other sub-committees are well recorded and

correctly detail all important issues in full,

including opinions and questions of directors. All

meeting minutes and other documents related to

the meetings are systematically stored in a safe

place.

5.6DevelopmentofDirectorsandManagements

The Company constantly encourages its directors,

executives and employees to develop their

knowledge and ski l ls by attending various

seminars and training programs offered by

relevant organizat ions, such as the Stock

Exchange of Thailand, the Office of the Securities

and Exchange Commission, etc. Furthermore the

Company also distributes relevant information to

the directors and executives of the Company in

order to keep them abreast of lates t

developments that will enable them to make

informed decisions which will contribute to the

efficiency and effectiveness of their work.

5.7Orientation

The Company has provided information on the

business of the Company and other information

related to the operations of the Company to the

new directors. Such materials are useful for them

in performing their duties as directors of the

Company.


Corporate Social Responsibility The Group commits itself to conducting its business with

accountability to social communities, the environment

and stakeholders by practis ing the principle of

corporate social responsibility (CSR) as a guideline to

doing business. In a bid to protect all stakeholders’

interests, the Company’s code of business conduct

approved by the Board of Directors applies. This focuses

on integrity, transparency, corporate governance and

social ethics to maintain the Group’s sustainable growth.

The code of business conduct has been disseminated

to the senior management and staff members of the

Group so that they can use it as guidance on the

performance of their duties.

1. Fair conduct Faircompetition

The Company recognises the importance of equal

and fair treatment of its counterparties by taking the

following actions:

• providing correct and adequate information and

advice in a timely manner to ensure their proper

knowledge of our products and services;

• clearly stating the terms and conditions of each

sale and purchase transaction and strictly

complying with those provisions;

• delivering good quality products that have fair

prices and meet the customer’s requirements;

and

• appointing a procurement committee responsible

for implementing the bidding procedure in

relation to any transactions worth more than one

mill ion baht, so that all information in the

proposals will be reviewed by the committee to

promote fairness.

Respectofothers’property

To recognise the importance of the property rights of

others, the Company has established a policy

applicable to the senior management and staff

members. Under this policy, senior management must

prevent the Company from violating any legal rights

of s takeho lders , i nc lud ing i t s employees ,

counterpart ies , socia l communit ies , bus iness

competitors and creditors, through any acts or

decisions made. The Company also has an anti-

piracy policy.

Supplychainmanagement

To recognise the importance of supply chain

management , the Company has drawn up

guidance on the performance of duties by the

senior management and staff members to ensure

collaboration between the Company and various

stakeholders in a bid to enhance the Company’s

sustainable wealth and growth.

2. Anti-corruption The Company’s Board and senior management

comply with the code of business conduct relating

to anti-corruption by:

• dealing with a conflict of interest in a careful,

honest, fair and independent manner to best

benefit the Company; and

• establishing and maintaining the internal audit

and control system relating to finance, operations

and compliance. Given there is an emphasis on

signalling an alert in relation to any irregularities,

the internal audit and control system should be

implemented along with risk management.

3. Respect of human rights Respecting human rights is one of the Company’s

concerns, which is incorporated into its code of

business conduct. Under this code, the Board of

Directors and senior management must recognise

the value of the Company’s human resources by

offering them reasonable remuneration in order to

motivate and retain high-performing employees, and

treating all employees fairly and equally, free of bias.

Each individual’s rights and freedom must be

respected. The Board of Directors and senior


management are responsible for ensuring the

Company’s business is managed in such a manner

that does not involve violation of human rights. All

employees are free to submit a written complaint to

their supervisors . I f an employee commits a

wrongdoing, the Company applies its review

procedure that promotes fairness.

4. Fair labour treatment Employmentandlabourrelations

The Company has a policy to employ legal labour,

free of discrimination based on gender, race, religion

or sexual orientation. Hiring forced labourers or child

labourers (under the age of 18 years old) is

prohibited. Disabled persons are given employment

opportunities for any suitable positions to improve the

quality of their lives.

The employment conditions, working conditions and

fringe benefits are well managed in compliance with

labour law on the basis of fairness, social ethics and

transparency. The nominat ion, select ion and

appointment procedure of Company personnel is of

great importance. The Company’s key considerations

when hiring are a candidate’s knowledge, ability,

experience, and suitability for the relevant job

position. These requirements will also be taken into

account for determining the employee’s wages and

reviewing their job promotion. The Company provides

various fringe benefits and facilities, including

medical expenses, accident insurance, recreation

facilities, internal and external training courses, to

improve the quality of its employees’ working

conditions.

Occupationalhealthandsafety

The Company promotes continuous training and

development to develop its employees’ ski l ls,

knowledge and ability, and to prepare them for

their future careers. The training and development

places particular emphasis on building team spirit, as

well as promoting environmental and occupational

health and safety. In relation to the latter, the

Company provides training to its employees on

environmental and occupational health and safety,

ISO 9001:2008 qual ity management, personal

healthcare, factory sanitat ion and the GMP

certification standards. The purpose of such training

is to enhance the employee’s morale, stability, and

quality of working conditions, as well as to improve

their leadership and commitment to the Company

as an organisation.

On account of the Company’s continued campaign

to minimise accidents in the workplace, the rate of

work-related accidents has decreased. There have

been no records of death or severe accidents in the

Group’s manufacturing factories. These factories

joined with a government campaign for an award

of excellence in environmental and occupational

health and safety, launched by the Welfare and

Labour Protection Department and Ministry of

Labour. The objective of the campaign was to

promote employee alertness on this issue, work

discipline, compliance with safety measures, and

cooperation in preventing work-related accidents.

5. Responsibility to consumers Consumerhealthandsafety

All staff members are encouraged to recognise the

impor tance of safety at a l l s tages of the

manufacturing procedure. The Company operates

an efficient reverse examination system that can

prove the manufacturing procedure through a

scientific method using standard and advanced

technology equipment. It aims to make food

products using the food safety management system

according to the HACCP and GMP standards, to

control against any hazards and to comply with laws

and regulations relating to food safety applicable in

Tha i land and other count r ies i n which the

counterpar t ies operate. The Company’s

organisational procedure has been continuously

improved to manage the clear disclosure of

complete and correct information to all relevant

parties.


The Company has a policy to produce good quality

and high standard products using state-of-the-art

technology, and maintains a quality control system

covering all stages of its manufacturing procedure.

The Company’s products have won awards for the

following international standard certifications: ISO

9001:2008, Good Manufacturing Practice (GMP),

Hazard Analysis Critical Control Point (HACCP),

KOSHER and Halal.

Marketingcommunicationsandcustomer’sprivacy

The Company commits itself to producing good

quality and clean food products and punctual

delivery so as to satisfy consumer requirements. The

Company continuously improves its manufacturing

quality control system to ensure it meets international

standards. The Company’s 2013 customer survey

results revealed 96.40% of customers are satisfied with

the Company’s products and service. This result

reflects the Company’s sound business performance,

and serves as a benchmark for further improvement

of its products and services.

6. Environmental care Sustainableuseofresources

In the present day, energy use is one of the key

factors in economic improvement. Greater demand

for energy arising from economic expansion and the

worsening cr is i s of energy costs alerted the

Company to the importance of sustainable energy

use. The Company has put energy preservation and

alternative energy sources into action by installing a

system to generate biogas from waste water

released from its factories. Biogas is used as a fuel in

generating thermal energy, which substitutes for

furnace oil in the manufacturing procedure of

cassava starch. In addition to the direct benefit that

the Company and its subsidiaries obtain from cost

reductions, the biogas system also brings about a

decrease in greenhouse gas emissions.

The biogas system was first introduced into the

factories of the Company and its subsidiaries in 2013

to replace the furnace oil in the manufacturing

procedure. The generating volume of biogas was

5,390,000 cubic metres*, which substituted for

2,919,000 litres* of furnace oil.

Remark: * based on information collected from February 2013

to December 2013.

Preventionandmitigationofpollution

To carry out the biogas project to replace the

furnace oil with biogas, the Group uses the covered

lagoon bio reactor (CLBR) technology, which

incorporates in itself the advancements, high

capacity and stability and carries the low cost of

quality control. The CLBR technology has dual

function both in biogas generation and waste water

treatment. In addition to producing benefits in the

form of cost reductions, the biogas project efficiently

assists in environmental management. The benefits in

respect of mitigating environmental effects are as

follows:

• Quality of discharged water: After the waste

water passes the CLBR system, the concentration

value of organic compounds will reduce to

96.45%. Subsequently, the waste water enters the

open treatment system, which is the original

sys tem used by the factory that meets

applicable standards of the Department of

Industrial Works.

• Reduction ingreenhousegas emissions: Methane

is a type of greenhouse gas that produces 21

times harsher effects than carbon dioxide.

Reducing methane emissions into the atmosphere

by reusing it as a source of energy can also

reduce the emission of carbon dioxide.


In 2013, the year in which the CLBR system was

f i r s t launched; greenhouse gas emiss ions

decreased by not less than 30,000 tons

equivalent to carbon dioxide (tCO2e). The

Company expects this rate to grow in 2014 when

the CLBR system will become fully operational.

The installation of the biogas system at the

Company’s other factor ies is part of the

Company’s future plan.

• Smell: The CLBR system assists in eliminating the

unpalatable smell of waste water discharged

from the manufacturing procedure by using a

close-covering system.

• Sanitary condition of the Company’s employees

andlocalcommunities: The cause of the problem

wi l l be so lved in the manner that the

unpalatable smell and waste discharged from

the manufacturing procedure will be eliminated.

7. Social and community development Roleinthemarketandjobcreation

The Company and its subsidiaries have always

recognised the importance of improving the quality

of life of local communities by participating in social

and community development for sustainable growth

as follows:

• Mushroom farming in local schools: Soil remnants

and cassava peels left from the manufacturing

procedure are used in mushroom farming at

local schools. This encourages students, whose

parents are employed by the Company, to gain

knowledge for potential future careers. The

practice of farming also generates income to

benefit local communities. Field trip budgets, raw

materials procurement, and the establishment of

farming facilities are sponsored by the Company.

Each school may prepare lunches for the

students using the mushrooms, or sell them to

local customers at a cheaper price throughout

the year. In addition, this programme implants a

hard-working sprit in the local students, and

imparts knowledge to them that can be applied

to support their families in the future.

• The cassava farmers suffered a decline in crop

volume, affecting the volume of fresh cassava

roots - a key raw material of the Company’s

manufacturing activities. This problem was caused

by poor crop rotation practices where farmers

failed to use proper methods of improving

deteriorated soil in the plantations of cassava

and sugarcane for long periods of time. In

response, the Company launched a programme

“to promote growing varieties of beans to serve

as green manure to improve deteriorated soil”.

The object ive of th i s programme was to

encourage the farmers to use natural fertilisers

(as opposed to chemical fertilisers) to improve soil

qual i ty. In col laborat ion with government

authorities and local community leaders, the

Company has campaigned to educate farmers

by organising tutorial sessions, distributing fact

sheets, and distributing leaflets inviting the

farmers to sel l their cassava crops to the

Company. This programme is expected to resolve

the problem relating to soil deterioration, which

will in turn reduce manufacturing costs and

increase crop volume.


Participationinlocalcommunity

The Group emphasises cooperating with local

communities and other organisations in economic

and social development activities. The objective is to

promote strong and sustainable development of

local communities. The Group has played its role in

tackling social issues and joining social improvement

activities as follows:

• In response to an outbreak of mealybugs causing

damage to cassava planters’ crops, the Group

launched a programme “to raise and breed

parasit ic wasps and pinkish mealybugs” in

a laboratory of the Company’s factory. The goal

was to eventually release the wasps to the farm

to eradicate the mealybugs. In addition to

coping with the outbreak of mealybugs, the

objectives of this programme were to encourage

farmers to eradicate pests using natural methods,

minimise the use of chemical substances, and

reduce the cost of cassava plantation. The

Company has transformed the lessons of this

programme into tangible pieces of knowledge

and advice, and provided them to local farmers

and the public.

• A site survey of agricultural areas revealed that

the farmers were pumping water to cultivate their

plantations during the dry season, and thus

incurring significant fuel costs. As a result, the

Company sponsored the construction of spillways

to keep a suff ic ient reserve of water for

agricultural use.

In 2013, the Company and its subsidiaries donated

money, labour, and general necessities to the local

communities, corporate entities, government bodies

and organisations to improve the well-being of local

communities. This included:

• Excavation of a canal near the Koke Sa-ard

Community at Koke Sa-ard sub-district, Muang

district, Udonthani province;

• Maintenance of roads leading to the Huay

Luang reservoir and to the Koke Sa-ard Village at

Koke Sa-ard sub-district, Muang district, Udonthani

province;

• Assisting in a campaign to plant a mangrove

forest and gather garbage by working with the

youth and the elderly at Koh Nok, Thakham sub-

district, Bangpakong district, Chachoengsao

province;

• Assist ing in a campaign with the Nakhon

Ratchasima Industrial Division to prevent the

catastrophic flooding at Muang Pimai by sending

volunteers and bulldozers to build the barriers at

Pimai National Museum; and

• Assisting in a campaign run by the Department

of Industrial Works to enhance the industrial

factor ies ’ potent ia l fo r corporate soc ia l

development (CSR-DIW for Beginners).


Internal Control and Risk Management

The Company’s Board of Directors recognizes the

importance and assesses the internal control system

annually by inquiring from management based on the

guidelines for evaluating the adequacy of internal

controls as set out by The Securities and Exchange

Commission. Furthermore, the Board of Directors has

determined the standard operating procedure and

practice for internal control and risk management

based on the guidelines of COSO (The Committee of

Sponsoring Organization of the Treadway Commission).

This also includes the establishment of internal audit

department for auditing, reviewing, assuring and

reporting directly to the Audit Committee. The Board of

Directors also recognizes the importance of planning for

risk management to include risks that are either caused

by external factors (inherent risks) and risks caused by

internal factors (control risks), which may impact the

business operations to include only acceptable level of

risks or impacts that are immaterial. Additionally,

adequacy and appropriate controls are in place for

subsidiaries and connected transactions. With an

effective internal control system, the Company may

operate effectively and efficiency by meeting its target

with financial reports that are correct and reliable.

Below are the internal control and risk management

based on the COSO guidelines:

Control Environment: Board of Directors have provided

management system and set up organizational chart

that are apparent, independent and practical which

have been communicated efficiently. In order to

achieve the Company’s success, targets and policies

have been implemented such as the policies related to

good corporate governance, business ethics and code

of business conduct for all the management and

employees. So that all the business operations are

carried out with transparency and fairness to the

Company and other individuals.

Risk management: Board of Directors analyzed and

evaluated factors that may cause risk to the Company

for determining the control for these risk factors.

Controlactivity: Board of Directors have determined the

segregation of duty, operation practice explicitly, level

of authority, responsibility and defined the standard

operating procedure to ensure that the operation is

correct and appropriate.

Information system and communications: Board of

D i rectors has g iven utmost importance to the

information system and data communications by

establishing information technology department that

regulates and continuously develop the system so that

communication and work operation can run accurately

and up to date. Furthermore the information system

allows important information to be communicated to

management within reasonable period in order for

business decisions to be made effectively. Apart from

this, the Board has also established policies based on

the laws of Computer Related Crime Act to govern the

use of sensitive information and Company’s other

equipments. Information, documentation and other

announcements are communicated wi th in the

organization via channels such as email and intranet to

the employees.

Monitoring: Board of Directors and Audit Committee

organize meeting once each quarter in order to

analyze, evaluate and summarize performance to

ensure that business targets are being met. And also

plan and improve business performance by tracking and

fixing any inaccuracies that may occur.

The Board of Directors has assessed the Company’s

i n terna l cont ro l sys tem by inqu i r i ng f rom the

management and relying on the Audit Committee’s


report. The Board of Directors is of the opinion that the

Company’s internal control system, comprising of 5

components namely cont ro l env i ronment , r i sk

assessment , cont ro l act iv i t ies , i n fo rmat ion &

communication and monitoring activities, is adequate

with suff icient personnel to conduct the system

efficiently and that no material weaknesses were found

in the Company’s internal control system. This also

includes the internal control system to monitor the

operations of its subsidiaries to ensure that the assets of

the Company and its subsidiaries are protected and not

misused by directors or management. In addition, the

internal control system in regard to entering into

connected transactions were also adequate.

Head of internal audit The Audi t Commit tee meet ing had appointed

Mr. Narupon Wuttichai to be the head of the internal

audit department base on his qualifications, knowledge

and his abilities to perform the tasks. He has attended

several training courses of internal audit by The Institute

of Internal Auditors of Thailand. He also has experience

in auditing and reviewing financial statements of other

enterprises which can be applied in his practice.

Mr. Narupon has full understanding of the Company’s

processes and procedures. Overall, the Audit Committee

is satisfied with the appointment of Mr. Narupon as the

head of internal audit and believes that he has full

ability in performing his role.

The appointment, transfer and dismissal of the head of

internal audit of the Company must be approved by

the Audi t Commit tee. Fur ther deta i l s on the

qualifications of the head of internal audit can be seen

in Attachment 3 to Form 56-1, and under the heading

“Profile of the Head of Internal Audit Unit” in the

Company’s 2013 Annual Report.


Profile of the Head of Internal Audit Unit

Name: Mr. Narupon Wuttichai

Age: 31 Years

EducationalBackground: • Bachelor of Accounting, Bangkok University

• Certified Public Accountant No. 10419

• Cooperative Auditor in Thailand No. 10395

Experience: • 2012 - Present

Internal Audit Manager,


• 2011 - 2012

Audit Manager,

Marzars Limited

• 2004 - 2011

Audit Manager,

KPMG Phoomchai Audit Ltd.

TrainingandSeminar: • Skill for New Auditor In-Charge, The Institute of Internal Audit

• Risk Assessment of Internal Control COSO, ERM by function

• TFRS & IFRS


Opinion of the Board of Directors on the Company’s Internal Control

The Board of directors has assessed the Company’s

i n terna l cont ro l sys tem by inqu i r i ng f rom the

management and relying on the Audit Committee’s

report. The board of directors is of the opinion that the

Company’s internal control system, comprising of 5

components namely cont ro l env i ronment , r i sk

assessment , cont ro l act iv i t ies , i n fo rmat ion &

communication and monitoring activities, is adequate

with suff icient personnel to conduct the system

efficiently and that no material weaknesses are found in

the Company’s internal control system. This also includes

the internal control system to monitor the operations of

its subsidiaries to ensure that the assets of the Company

and its subsidiaries are protected and not misused by

directors or management. In addition, the internal

control system in regard to entering into the connected

transactions is also adequate.

(Ms. Pinyada Viriya)

Chairman of the Board


The Audit Committee of Thai Wah Starch Public

Company Limited comprises of 3 independent directors

namely Ms. Tawiratt Narasuj as the Chairman of

the Audit Committee, Mr. Somchai Towiwat and

Mr. Teerawut Charoensuk as members of the Audit

Committee.

In 2013, the Audit Committee held 4 meetings with 100%

attendance of its members. The Company’s senior

management, internal and external auditors were also

present during the meeting for the appropriate items of

the agenda. Summaries from each meeting were

presented to the Board of Directors.

The Audit Committee carried out all its duties within the

limitations as delegated by the Board of Directors of the

Company and in accordance with the regulations of

Thai Wah Starch Public Company Limited. Under its

scope of authority and responsibilities, which is in

conformance with the regulations as set forth by the

Stock Exchange of Thailand, the Audit Committee

addressed the following areas:

Reviewofthequarterly,2013annualfinancialstatements,

andconsolidated financial statements of the Company

to assure that they have been prepared according to

the generally accepted accounting standards and the

2004 Accounting Act as well as the applicable rules,

regulations and announcements of the Stock Exchange

of Thailand and the Securities Exchange Commission,

including adequate disclosure of financial information

and t imely preparat ion. In addit ion, the Audit

Committee had held 1 meeting with the auditors

without the presence of the Company’s executive

officer to determine the course plan of the audit.

Report of the Audit Committee

ReviewandevaluationoftheInternalControl

The Audit Committee reviewed the internal control

system of the Company and its subsidiaries which

follows the internal control framework as set out by

COSO (The Committee of Sponsoring Organization of

the Treadway Commission) comprising of 5 components

namely control environment, risk assessment, control

activities, information & communication and monitoring

activities. The Audit Committee is satisfied that the

Company’s and its subsidiaries’ internal control is both

sufficient and appropriate to support the business

operations. The Company has established an internal

audit department where the officer in chief has

adequate knowledge and experience in auditing

financial statements of various businesses including

attending training courses and seminars related to the

practice of internal audit provided by the Association of

Internal Auditors of Thailand. The Audit Committee

made recommendations on certain aspects to the

internal audit team to be in line with the auditing

standards on internal controls . Addit ional ly, an

assessment was made jointly with the auditors on the

Company’s internal control who are of the opinion that

no significant issues or material weaknesses were found

in the internal control, concluding that the Company

internal control is adequate and effective.

Transactionswithrelatedparties

The Audit Committee made an assessment of transactions

between the Company and its subsidiaries to assure

that the Company carr ied out the transactions

according to normal conditions in operating the

business and made full and sufficient disclosure.


GoodCorporateGovernancePolicy

The Company places importance on managing with

good governance and superv i s ion to maintain

transparency and good ethics for bolstering the

confidence of related parties.

ConsiderationfortheAppointmentofAuditorsfor2014

Due consideration and agreement was given for

appointing D.I.A. International Audit Company Limited,

with Ms. Vilairat Rojnuckarin, Certified Public Accountant

No. 3104 and/or Ms. Somjintana Pholhirunrat, Certified

Public Accountant No. 5599 as auditors of Thai Wah

Starch Public Company Limited for the year 2014 to be

proposed to the Board of Di rectors for further

consideration and approval at the 2014 Annual

Shareholders Meeting.

In 2013, the Audit Committee has performed its duties

prudently and independently and issued its opinion for

the benefit of the company, receiving information,

resources and cooperation from management without

exception. From the review and supervision under

the scope of responsibilities in the aforementioned

topics, it can be summarized that the efficiency and

appropriateness of internal control, administrative

management and corporate governance practices are

adequate and transparent. In addition, the Company

has continuously improved its auditing system to be

effective and suitable to the business environment. All

relevant information with materiality has been sufficiently

disclosed in the Notes to the financial statements in

accordance to related regulations.

(Ms. Tawiratt Narasuj)

Chairman of the Audit Committee

12 February 2014


On behalf of the Board

Thai Wah Starch Public Co., Ltd.

(Ms. Pinyada Viriya)

Chairman of the Board

(Ms. Pinyada Viriya) (Mr. Umnad Sukprasongphol)

Joint Managing Director Joint Managing Director

Board of Directors’ Responsibilities for the Company’s Financial Statements

TheBoardofDirectors is responsible for theCompany’s

financial statements including thenotes to the financial

statements.

In its review of the financial statements, the Board of

Directors has rel ied upon the reports and work

performed by the Company’s external auditors, D.I.A.

Internat ional Audi t Company L imi ted, and the

Company’s Audit Committee which has carried out

extens ive discuss ions with management of the

Company. The Board has also satisfied itself that there is

no material weaknesses in the Company’s internal

accounting controls, internal control system and

standard operating procedures.

The Board of Directors is therefore able to conclude that

the financial statements for the year ended 2013 have

been prudently prepared in accordance with generally

accepted accounting principles to give a correct and

complete presentation, in all material aspects, the

financial position of the Company.


Biogas pond


THAI WAH STARCH PUBLIC COMPANY LIMITED

AND SUBSIDIARY COMPANIES FINANCIAL STATEMENTS

AS AT DECEMBER 31, 2013


AUDITOR’S REPORT

TotheShareholder’sofThaiWahStarchPublicCompanyLimited

I have audited the accompanying consolidated and separate financial statements of Thai Wah Starch Public

Company Limited and its subsidiary and of Thai Wah Starch Public Company Limited, which comprise consolidated

and separate statements of financial position as at December 31, 2013, consolidated and separate statements of

comprehensive income, consolidated and separate statements of changes in shareholders’ equity, and consolidated

and separate statements of cash flows for the year then ended, including notes of summary of significant

accounting policies and other explanatory information.

Management’sResponsibilityfortheFinancialStatements

Management is responsible for the preparation and fair presentation of these financial statements in accordance

with the 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 of

error.

Auditor’sResponsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in

accordance with standards on auditing. Those standards require that we comply with ethical requirements and plan

and perform the audit to obtain reasonable assurance about whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,

the auditor considers internal control relevant to the entity’ s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of

expressing an opinion on the effectiveness of the entity’ s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the financial statements.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit

opinion.


Opinion

In my opinion, the consolidated and separate financial statements present fairly, in all material respects, the

consolidated and separate financial position of Thai Wah Starch Public Company Limited and its subsidiary and of

Thai Wah Starch Starch Public Company Limited as at December 31, 2013, and their financial performance and cash

flows for the year then ended in accordance with the financial reporting standards.

EmphasisofMatter

Without qualifying my opinion, I draw attention to notes 3 and 4 to the financial statements describing the result of

the Company’s adoption of Thai Accounting Standard 12 Income Taxes and the restatement of the financial

statements in connection with the reclassification of investments.

D I A International Audit Co., Ltd.

(Mrs. Suvimol Krittayakiern)

C.P.A. (Thailand)

Registration No. 2982

February 27, 2014


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

THAI WAH STARCH PUBLIC COMPANY LIMITED AND SUBSIDIARY COMPANIES

STATEMENTS OF FINANCIAL POSITION AS AT DECEMBER 31, 2013

(Unit : Baht)

Consolidated Separate

Assets Note December31,December31, January1, December31,December31, January1,

2013 2012 2012 2013 2012 2012

(Restated) (Restated) (Restated) (Restated)

Currentassets

Cash and cash equivalents 7 765,464,083 797,740,874 734,475,295 447,333,111 458,679,285 348,056,379

Temporary investments 4,082,112 - - - - -

Trade and other receivables 8 346,159,394 312,064,197 403,516,373 327,619,896 297,425,020 399,877,900

Short-term loans to related companies 6 - - - 95,455,172 78,809,172 67,781,172

Inventories 9 419,544,937 299,307,009 318,721,163 241,546,839 176,749,098 185,408,468

Other current assets 44,464,098 45,801,018 29,548,852 23,290,629 35,025,516 18,540,791

Totalcurrentassets 1,579,714,624 1,454,913,098 1,486,261,683 1,135,245,647 1,046,688,091 1,019,664,710

Non-currentassets

Available-for-sale investments 10 194,485,900 200,320,850 238,161,400 194,485,900 200,320,850 238,161,400

Investments in associated companies 11 388,575 390,948 - 299,200 299,200 299,200

Investments in subsidiary companies 12 - - - 572,254,310 568,140,259 566,770,110

Investment property 14 179,811,682 179,811,682 160,597,565 504,000 504,000 504,000

Property, plant and equipment 15 572,489,859 476,367,050 311,448,023 196,587,135 152,597,162 71,725,397

Land use right 16 3,846,223 3,985,953 4,495,909 - - -

Deposits at financial institutions subject

to restrictions 17 70,763,000 85,625,000 81,077,000 61,028,000 64,000,000 64,000,000

Deferred tax assets 22 16,233,341 13,456,792 11,152,673 10,395,451 8,210,186 4,827,717

Other non-current assets 6,071,661 7,258,549 3,562,658 1,924,980 5,138,941 2,610,480

Totalnon-currentassets 1,044,090,241 967,216,824 810,495,228 1,037,478,976 999,210,598 948,898,304

Totalassets 2,623,804,865 2,422,129,922 2,296,756,911 2,172,724,623 2,045,898,689 1,968,563,014


Currentliabilities

Bank overdrafts and short-term loan from

financial institution 18 7,446,296 - - - - -

Trade and other payables 19 145,523,682 141,042,072 192,130,420 97,622,631 119,633,210 153,878,955

Defaulted debts from restructuring - - 62,924,538 - - 62,924,538

Current portion of long-term loan 20 20,040,000 - - - - -

Short-term loan from related company 2,510,936 - - - - -

Income tax payable 36,087,712 23,445,643 32,260,576 30,699,893 12,780,576 3,614,827

Accrued interest expense - 5,975,137 10,022,195 - - 4,047,058

Other current liabilities 10,295,989 9,700,524 8,163,714 428,679 131,167 55,117

Totalcurrentliabilities 221,904,615 180,163,376 305,501,443 128,751,203 132,544,953 224,520,495

Non-currentliabilities

Long-term loans and advances from

related companies - - 20,785 - - 25,841,150

Long-term loan from financial institutions 20 5,340,000 - - - - -

Employee benefit obligations 21 54,805,732 52,110,920 34,550,804 39,402,868 38,050,928 23,614,286

Deferred tax liabilities 22 18,785,467 17,597,419 23,528,126 16,625,329 16,704,674 23,455,136

Other non-current liabilities 3,218,191 3,204,421 3,084,053 626,500 626,500 626,500

Totalnon-currentliabilities 82,149,390 72,912,760 61,183,768 56,654,697 55,382,102 73,537,072

Totalliabilities 304,054,005 253,076,136 366,685,211 185,405,900 187,927,055 298,057,567



STATEMENTS OF FINANCIAL POSITION (Cont.) AS AT DECEMBER 31, 2013

(Unit : Baht)


Liabilitiesandshareholders’equity Note December31,December31, January1, December31,December31, January1,

2013 2012 2012 2013 2012 2012



Shareholders’equity

Sharecapital

Registered

78,750,000 ordinary shares

of Baht 10 each 787,500,000 787,500,000 787,500,000 787,500,000 787,500,000 787,500,000

Issued and paid-up

78,536,038 ordinary shares

of Baht 10 each 785,360,380 785,360,380 785,360,380 785,360,380 785,360,380 785,360,380

Premium on share capital 177,462,623 177,462,623 177,462,623 177,462,623 177,462,623 177,462,623

Retained earnings

Appropriated - statutory reserve 23 78,750,000 78,750,000 65,100,000 78,750,000 78,750,000 65,100,000

Unappropriated 1,227,346,574 1,071,861,658 822,227,745 1,012,673,461 878,658,412 675,958,866

Other components of equity (74,848,943) (78,244,607) (42,834,230) (66,927,741) (62,259,781) (33,376,422)

Equity attributable to Company’s shareholders 2,194,070,634 2,035,190,054 1,807,316,518 1,987,318,723 1,857,971,634 1,670,505,447

Non-controlling interests 125,680,226 133,863,732 122,755,182 - - -

Totalshareholders’equity 2,319,750,860 2,169,053,786 1,930,071,700 1,987,318,723 1,857,971,634 1,670,505,447

Totalliabilitiesandshareholders’equity 2,623,804,865 2,422,129,922 2,296,756,911 2,172,724,623 2,045,898,689 1,968,563,014



STATEMENTS OF FINANCIAL POSITION (Cont.) AS AT DECEMBER 31, 2013

(Unit : Baht)


Liabilitiesandshareholders’equity(cont.) Note December31,December31, January1, December31,December31, January1,

2013 2012 2012 2013 2012 2012



Sales 3,362,208,574 3,581,825,963 2,479,234,337 2,781,422,552

Cost of sales (2,783,856,986) (2,916,022,835) (2,129,150,829) (2,366,073,382)

Gross profit 578,351,588 665,803,128 350,083,508 415,349,170

Dividend income 4,014,025 3,340,400 66,665,005 73,997,603

Gain on debt restructuring - 15,557,318 - 15,557,318

Reversal of an impairment loss for investment property - 19,214,117 - -

Other income 29 84,429,965 71,081,000 70,550,090 55,740,766

Profit before expenses 666,795,578 774,995,963 487,298,603 560,644,857

Selling expenses (172,621,513) (221,215,762) (117,369,581) (157,219,330)

Administrative expenses (167,310,530) (172,356,307) (120,345,645) (127,499,551)

Profit before share of gain from investment in

associated companies, finance costs and

income tax expenses 326,863,535 381,423,894 249,583,377 275,925,976

Share of gain (loss) from investment in associated

companies (2,373) 11,153,172 - -

Profit before finance costs and income tax expenses 326,861,162 392,577,066 249,583,377 275,925,976

Finance costs (1,436,645) (450,153) (96,595) (450,153)

Profit before income tax expenses 325,424,517 392,126,913 249,486,782 275,475,823

Income tax expenses 22 (74,221,575) (83,293,016) (37,088,395) (47,648,234)

Netprofitfortheyear 251,202,942 308,833,897 212,398,387 227,827,589

(Unit : Baht)


Note 2013 2012 2013 2012

(Restated) (Restated)



STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED DECEMBER 31, 2013


Othercomprehensiveincome(loss)

Unrealized loss on fair value changes on investment (4,667,960) (28,962,859) (4,667,960) (28,962,859)

Reclassification adjustments relating to sales

and transfer available - for - sale investment

under debt restructuring - 79,500 - 79,500

Currency translation differences of subsidiary 11,519,463 (9,324,311) - -

Defined benefit plan actuarial loss - (13,742,097) - (11,478,043)

Othercomprehensiveincome(loss)fortheyear 6,851,503 (51,949,767) (4,667,960) (40,361,402)

Totalcomprehensiveincomefortheyear 258,054,445 256,884,130 207,730,427 187,466,187

Netprofitattributableto:

Equity holders of the Company 219,123,941 276,471,057 212,398,387 227,827,589

Non - controlling interests 32,079,001 32,362,840

251,202,942 308,833,897

Totalcomprehensiveincomeattributableto:

Equity holders of the Company 222,519,605 227,873,536 207,730,427 187,466,187

Non - controlling interests 35,534,840 29,010,594

258,054,445 256,884,130

Basicearningspershare(Baht) 24

Net profit attributable to equity holders of the Company 2.79 3.52 2.70 2.90

(Unit : Baht)


Note 2013 2012 2013 2012




STATEMENTS OF COMPREHENSIVE INCOME (Cont.) FOR THE YEAR ENDED DECEMBER 31, 2013


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,808

) (75,30

9,35

1)

1,82

1,26

5,36

6 12

1,44

5,62

5 1,94

2,71

0,99

1 Cum

ulat

ive e

ffect o

f the

chan

ge in

acco

untin

g po

licy

- Inco

me

tax

4.1

- -

- 9,45

4,57

4 (23,40

3,42

2)

- (23,40

3,42

2)

(13,94

8,84

8)

1,30

9,55

7 (12,63

9,29

1)

Cum

ulat

ive e

ffect o

f the

reclas

sificat

ion

of in

vestm

ent

4.2

- -

- (55,87

8,54

3)

55,878

,543

-

55,878

,543

-

- -

Balanc

easa

tJa

nuary1,2012(Restated)

785,36

0,38

0 17

7,46

2,62

3 65

,100

,000

82

2,22

7,74

5 (33,37

6,42

2)

(9,457

,808

) (42,83

4,23

0)

1,80

7,31

6,51

8 12

2,75

5,18

2 1,93

0,07

1,70

0 Cha

nges

during

the

year

Divid

end

paid b

y subs

idiary c

ompa

ny

to n

on-con

trollin

g interests

- -

- -

- -

- -

(17,90

2,04

4)

(17,90

2,04

4)

To

tal c

ompreh

ensiv

e inco

me

(loss)

for the

yea

r (Res

tated)

-

- -

263,28

3,91

3 (28,88

3,35

9)

(6,527

,018

) (35,41

0,37

7)

227,87

3,53

6 29

,010

,594

25

6,88

4,13

0

Unap

prop

riated

reta

ined

earning

s tra

nsfer t

o sta

tutory re

serve

- -

13,650

,000

(13,65

0,00

0)

- -

- -

- -

Balanc

easa

tDe

cembe

r31,2

012

78

5,36

0,38

0 17

7,46

2,62

3 78

,750

,000

1,07

1,86

1,65

8 (62,25

9,78

1)

(15,98

4,82

6)

(78,24

4,60

7)

2,03

5,19

0,05

4 13

3,86

3,73

2 2,16

9,05

3,78

6 Ba

lanc

easa

tJa

nuary1,2013

78

5,36

0,38

0 17

7,46

2,62

3 78

,750

,000

1,11

6,66

5,83

1 (101

,596

,131

) (15,98

4,82

6)

(117

,580

,957

) 2,04

0,65

7,87

7 13

2,75

5,52

0 2,17

3,41

3,39

7 Cum

ulat

ive e

ffect o

f the

chan

ge in

acco

untin

g po

licy

- Inco

me

tax

4.1

- -

- 10

,568

,408

(16,03

6,23

1)

- (16,03

6,23

1)

(5,467

,823

) 1,10

8,21

2 (4,359

,611

) Cum

ulat

ive e

ffect o

f the

reclas

sificat

ion

of in

vestm

ent

4.2

- -

- (55,37

2,58

1)

55,372

,581

-

55,372

,581

-

- -

Balanc

e as

at Ja

nuary

1, 2

013

(Res

tated)

785,36

0,38

0 17

7,46

2,62

3 78

,750

,000

1,07

1,86

1,65

8 (62,25

9,78

1)

(15,98

4,82

6)

(78,24

4,60

7)

2,03

5,19

0,05

4 13

3,86

3,73

2 2,16

9,05

3,78

6 Cha

nges

during

the

year

Gain

(loss)

on

chan

ges in the

sta

tus of in

vestm

ent fro

m

asso

ciat

ed c

ompa

ny to

subs

idiary c

ompa

ny

-

- -

14,744

,313

-

- -

14,744

,313

(16,86

7,92

6)

(2,123

,613

)

Divid

end

paid to

shareh

olde

rs of the

Com

pany

25

-

- -

(78,38

3,33

8)

- -

- (78,38

3,33

8)

- (78,38

3,33

8)

Divid

end

paid b

y subs

idiary c

ompa

ny

to n

on-con

trollin

g interests

- -

- -

- -

- -

(26,85

0,42

0)

(26,85

0,42

0)

To

tal c

ompreh

ensiv

e inco

me

(loss)

for the

yea

r

- -

- 21

9,12

3,94

1 (4,667

,960

) 8,06

3,62

4 3,39

5,66

4 22

2,51

9,60

5 35

,534

,840

25

8,05

4,44

5 Ba

lanc

easa

tDe

cembe

r31,2

013

78

5,36

0,38

0 17

7,46

2,62

3 78

,750

,000

1,22

7,34

6,57

4 (66,92

7,74

1)

(7,921

,202

) (74,84

8,94

3)

2,19

4,07

0,63

4 12

5,68

0,22

6 2,31

9,75

0,86

0


The

acco

mpa

nying

notes are

an in

tegral p

art of the

finan

cial sta

temen

ts.

THAI W

AH STA

RCH

PUBL

IC C

OMPA

NY LIM

ITED A

ND SUB

SIDIARY

COMPA

NIES

STAT

EMEN

TS O

F CH

ANG

ES IN

SHA

REHO

LDER

S’ E

QUI

TY (C

ont.)

FO

R TH

E YE

AR E

NDED

DEC

EMBE

R 31

, 20

13

(Unit : Ba

ht)

Se

parate

Unrealize

dga

in

Issue

dan

d

Retaine

dea

rning

s(lo

ss)o

nfair

paid-up

Prem

iumo

nStatutory

Retaine

dva

luec

hang

es

No

te

share

capital

share

capital

reserve

ea

rning

son

inve

stmen

tTotal

Balanc

easa

tJa

nuary1,2012

78

5,36

0,38

0 17

7,46

2,62

3 65

,100

,000

60

6,53

0,74

6 54

,679

,117

1,68

9,13

2,86

6

Cum

ulat

ive e

ffect o

f the

chan

ge in

acc

ounting

polic

y - Inco

me

tax

4.1

- -

- 4,77

6,00

3 (23,40

3,42

2)

(18,62

7,41

9)

Cum

ulat

ive e

ffect o

f the

reclas

sificat

ion

of in

vestm

ent

4.2

- -

- 64

,652

,117

(64,65

2,11

7)

-

Balanc

e as

at Ja

nuary

1, 2

012

(Res

tated)

785,36

0,38

0 17

7,46

2,62

3 65

,100

,000

67

5,95

8,86

6 (33,37

6,42

2)

1,67

0,50

5,44

7

Cha

nges

during

the

year

To

tal c

ompreh

ensiv

e inco

me

(loss)

for y

ear (Res

tated)

- -

- 21

6,34

9,54

6 (28,88

3,35

9)

187,46

6,18

7

Un

approp

riated

reta

ined

earning

s tra

nsfer to sta

tutory re

serve

- -

13,650

,000

(13,65

0,00

0)

- -

Balanc

easa

tDe

cembe

r31,2

012

78

5,36

0,38

0 17

7,46

2,62

3 78

,750

,000

87

8,65

8,41

2 (62,25

9,78

1)

1,85

7,97

1,63

4

Balanc

easa

tJa

nuary1,2013

78

5,36

0,38

0 17

7,46

2,62

3 78

,750

,000

80

7,04

9,95

5 17

,843

,164

1,86

6,46

6,12

2

Cum

ulat

ive e

ffect o

f the

chan

ge in

acc

ounting

polic

y - Inco

me

tax

4.1

- -

- 7,54

1,74

3 (16,03

6,23

1)

(8,494

,488

)

Cum

ulat

ive e

ffect o

f the

reclas

sificat

ion

of in

vestm

ent

4.2

- -

- 64

,066

,714

(64,06

6,71

4)

-

Balanc

easa

tJa

nuary1,2013(Restated)

785,36

0,38

0 17

7,46

2,62

3 78

,750

,000

87

8,65

8,41

2 (62,25

9,78

1)

1,85

7,97

1,63

4

Cha

nges

during

the

year

Divid

end

paid

25

- -

- (78,38

3,33

8)

- (78,38

3,33

8)

To

tal c

ompreh

ensiv

e inco

me

(loss)

for the

yea

r

- -

- 21

2,39

8,38

7 (4,667

,960

) 20

7,73

0,42

7

Balanc

easa

tDe

cembe

r31,2

013

78

5,36

0,38

0 17

7,46

2,62

3 78

,750

,000

1,01

2,67

3,46

1 (66,92

7,74

1)

1,98

7,31

8,72

3




STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2013

(Unit : Baht)

Consolidated Separate 2013 2012 2013 2012

Cash flows from operating activities

Net profit for the year attributable to equity

holders of the Company 219,123,941 276,471,057 212,398,387 227,827,589

Adjustments to reconcile net profit to net cash

provided by (used in) operating activities:

Profit attributable to non-controlling interests 32,079,001 32,362,840 - -

Depreciation and amortization 34,529,271 24,512,001 16,102,193 12,076,169

Doubtful accounts 1,925,496 357,078 3,399,758 1,918,456

Loss on inventory devaluation 2,222,884 - 2,222,884 -

Interest income (14,639,064) (20,237,558) (15,181,901) (18,567,871)

Dividend income (4,014,025) (3,340,400) (66,665,005) (73,997,603)

Gain from sales of assets (29,107) (1,508,523) (450,074) (557,014)

Gain on debt restructuring - (15,557,318) - (15,557,318)

Loss on from sales of investment - 53,050 - 53,050

Gain from sales of investment in subsidiary - - (3,247) -

Realized gain on exchange rate from loan payment - (1,559,872) - (1,559,872)

Realized gain on exchange rate from dividend income - - (4,717,020) (691,693)

Unrealized (gain) loss on exchange rate (4,762,880) 6,401,405 (5,676,423) 6,373,376

Reversal loss on impairment of investment in subsidiaries - - (4,126,464) (1,370,148)

Reversal of an impairment loss of investment property - (19,214,117) - -

Share of (gain) loss from investments in associates 2,373 (11,153,172) - -

Provisions for employee benefit obligations 5,664,156 4,890,816 3,885,803 3,614,556

Income tax expenses 74,221,575 83,293,016 37,088,395 47,648,234

Finance costs 1,436,645 450,153 96,595 450,153

Profit from operating activities before changes in

operating assets and liabilities 347,760,266 356,220,456 178,373,881 187,660,064



Changes in operating assets and liabilities

Trade and other receivables (31,257,813) 84,693,693 (20,405,157) 103,442,514

Inventories (122,460,812) 19,414,154 (67,020,625) 8,659,370

Other current assets 1,451,091 (16,252,164) 11,734,887 (16,484,725)

Deposits at financial institutions subject to restrictions 14,862,000 (4,548,000) 2,972,000 -

Other non-current assets (1,145,084) (2,554,049) 1,473,273 (3,041,420)

Trade and other payables 17,417,813 (44,454,064) (15,559,926) (39,539,818)

Other current liabilities (4,415,964) 1,125,920 1,018,455 (70,051)

Employee benefit obligations (2,969,343) (4,518,758) (2,533,863) (3,525,467)

Other non-current liabilities 2,368,808 1,556,852 1,087,645 616,729

Income tax paid (62,919,891) (91,679,819) (20,266,698) (38,319,144)

Net cash provided by operating activities 158,691,071 299,004,221 70,873,872 199,398,052

Cash flows from investing activities

Interest received 14,639,064 20,237,558 7,668,847 9,286,405

Increase in temporary investments (4,082,112) - - -

Decrease in short-term loans to subsidiary companies - - (16,646,000) (11,028,000)

Increase in cash on changes in the status of investment

from associated company to subsidiary company 224,172 - - -

Purchases of property, plant and equipment (138,809,139) (198,393,807) (67,119,581) (88,299,334)

Cash received from sales of property, plant and equipment 1,328,142 2,134,881 958,936 1,183,364

Cash received from sales of investment - 1,536,950 - 1,536,950

Cash received from sales of investment in

subsidiary company - - 15,660 -

Dividend received from subsidiary companies - - 67,368,000 60,586,672

Dividend received from related companies 4,014,025 14,102,624 4,014,025 14,102,624

Net cash used in investing activities (122,685,848) (160,381,794) (3,740,113) (12,631,319)

(Unit : Baht)



STATEMENTS OF CASH FLOWS (Cont.) FOR THE YEAR ENDED DECEMBER 31, 2013


Cash flows from financing activities

Interest paid (1,436,645) - (96,595) -

Cash received short-term loan from bank 7,446,296 - - -

Cash paid for defaulted debts from restructuring - (50,302,677) - (50,302,677)

Cash received from long-term loan from financial institutions 43,750,000 - - -

Cash paid for long-term loan from financial institutions (18,370,000) - - -

Increase (decrease) in long-term loans and

advances from related companies 61,189 (20,785) - (25,841,150)

Dividend paid to shareholders of the Company (78,383,338) - (78,383,338) -

Dividend paid by subsidiary companies to non-controlling interests (26,850,420) (17,902,044) - -

Net cash used in financing activities (73,782,918) (68,225,506) (78,479,933) (76,143,827)

Effect of exchange rate change 5,500,904 (7,131,342) - -

Net increase (decrease) in cash and cash equivalents (32,276,791) 63,265,579 (11,346,174) 110,622,906

Cash and cash equivalents at beginning of year 797,740,874 734,475,295 458,679,285 348,056,379

Cash and cash equivalents at end of year 765,464,083 797,740,874 447,333,111 458,679,285


(Unit : Baht)



STATEMENTS OF CASH FLOWS (Cont.) FOR THE YEAR ENDED DECEMBER 31, 2013


1. GENERAL INFORMATION Thai Wah Starch Public Company Limited (Formerly name Universal Starch Public Company Limited), (“the

Company”), is a public company incorporated and domiciled in Thailand and listed in the Stock Exchange of

Thailand on September 16, 1985. The Company and its subsidiary companies operate their businesses in

Thailand, except for one subsidiary company which operates in Vietnam. The Company and its subsidiary

companies are principally engaged in the manufacture and distribution of tapioca products. The Company’s

registered address, which is the head-office, is 21/59, 21/63-64 Thai Wah 1 Bldg., 20th - 21st Floor, South

Sathorn Road, Tungmahamek, Sathorn, Bangkok.

On June 20, 2006, the Company received a letter from the Stock Exchange of Thailand (SET) informing it that

because the Company’s security has been classified by the SET for delisting since March 12, 2001, the SET

removed the Company’s security from the trading board and transfer it into the Non-Performing Group,

effective July 3, 2006. Later, on September 20, 2013, the Company has requested the Stock Exchange of

Thailand to approve share trading resumption in stock market, because the Company has considered that it

has met qualifications in accordance with the SET’s requirements for resolving the delisting grounds. Then on

October 21, 2013, the SET removed cause of possible delisting of the Company’s securities and resumes its

trading from October 31, 2013 onwards.

On April 19, 2013, the shareholder’s meeting approved the changing of the Company’s name to “Thai Wah

Starch Public Company Limited”. The Company registered to change its company name with the Ministry of

Commerce on April 22, 2013.

2. BASIS OF PREPARATION OF CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS The financial statements have been prepared in conformity with the financial reporting standards principles

enunciated under the Accounting Professions Act B.E. 2547 and presented in accordance with the notification

of Department of Business Development by Ministry of Commerce dated September 28, 2011 regarding the

condensed form should be included in the financial statements B.E. 2554 and the regulation of the Securities

and Exchange Commission regarding the preparation and presentation of the financial reporting under the

Securities and Exchange Act B.E. 2535.

The consolidated and separate financial statements have been prepared under the historical cost convention

except as disclosed in the accounting policies.

An English version of the consolidated and separate financial statements have been prepared from the

statutory financial statements that are in the Thai language. In the event of a conflict or a difference in

interpretation between the two languages, the Thai language statutory financial statements shall prevail.


NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2013


The consolidated financial statements include the financial statements of Thai Wah Starch Public Company

Limited and the following subsidiaries:

(Unit: percent) Assets as a Revenues as a

percentage percentage to the

to the consolidated consolidated total

Country of Percentage total assets revenues for the years

Company’s name Nature of business incorporation of shareholding as at 31 December ended 31 December

2013 2012 2013 2012 2013 2012

Thai Wah Alpha Starch Company Limited Manufacture of alpha Thailand 99.99 99.99 1.17 1.26 0.61 0.63

starch

DI Company Limited Manufacture of tapioca Thailand 99.93 99.93 2.94 2.71 2.42 3.62

starch

Thai Wah Rice Flour Company Limited Dormant Thailand 83.33 83.33 0.41 0.46 0.01 -

Tay Ninh Tapioca Company Limited Manufacture of tapioca Vietnam 70.00 70.00 10.48 11.22 22.22 18.45

starch, glucose and

candy

Thai Nam Tapioca Company Limited Manufacture of tapioca Thailand 70.00 70.00 11.25 9.05 1.17 0.39

starch

Thai Wah Realty Limited Property development Thailand 99.99 99.99 2.45 2.66 - 0.28

Bangna Property Development Company Holding company Thailand 99.99 99.99 1.24 1.31 0.03 0.02

Limited

Rachada Property Development Holding company Thailand 99.99 99.99 6.09 6.45 0.13 0.11

Company Limited

Bangpakong Turakij Company Limited Landholding Thailand 99.99 99.99 3.45 3.73 - -

Chiang Saen Land Company Limited Landholding Thailand 99.99 99.99 1.42 1.54 - 0.17

Thai Wah (6) Company Limited Landholding Thailand 99.99 99.99 1.41 1.39 0.14 0.13

Bang Thao (6) Company Limited Landholding Thailand 99.99 99.99 0.81 0.88 - -

Mae Chan Land Company Limited Landholding Thailand 99.99 99.99 0.58 0.63 - -

Tha Thungna Land Company Limited Landholding Thailand 99.99 99.99 0.29 0.31 - 0.03

Thai Sin Tapioca (1989) Company Limited Landholding Thailand 99.99 99.99 0.19 0.20 - -

Thai Ongkarak Company Limited Landholding Thailand 99.98 99.98 0.71 0.77 - -

Mae Hong Son Land Development Limited Landholding Thailand 84.97 84.97 0.31 0.34 - 0.04

Thai Nam Tapioca (1) Company Limited Landholding Thailand 69.95 69.95 0.05 0.05 - -

Laguna (2) Company Limited Dormant Thailand 99.40 99.40 - - - -

Bang Thao (7) Company Limited Dormant Thailand 99.30 99.30 - - - -

Phang Nga Resorts Limited Landholding Thailand 99.93 99.93 - - - -

Bang Thao (5) Company Limited Landholding Thailand 99.93 99.93 - - - -

Thai Modified Starch Company Limited Dormant Thailand 94.62 94.62 0.30 0.32 0.01 -

Architrave Design & Planning Company Dormant Thailand 99.88 99.88 - - - -

Limited

Thai Wah Marketing Services Limited Dormant Thailand 80.00 80.00 0.16 0.17 - -

Business Evolution Company Limited Not commenced operation Thailand 99.70 99.70 - - - -

(indirect held by 2 subsidiaries)

Mae Joe Land Company Limited Dormant Thailand 49.99 49.99 0.01 - - -

The financial statements of the overseas subsidiary company are translated to Thai Baht at the average

closing exchange rate as to assets and liabilities, and at the monthly average exchange rate applying during

the year for revenues and expenses. The resultant difference has been shown under the caption of “Currency

translation differences” in the shareholders’ equity.


The financial statements of the overseas subsidiary company were audited by its auditor overseas.

Outstanding balance between the Company and subsidiary companies and significant intercompany

transactions are eliminated from the consolidated financial statements.

The Company has had to reclassify Mae Joe Land Company Limited from an associated company to

subsidiary company since the Company has the control over such company. The effects of reclassification

were increase in equity holders of the Company amounting to Baht 14.74 million and decrease in Non-

controlling interests amounting to Baht 16.87 million in the consolidated financial statements.

3. APPLICATION OF NEW ACCOUNTING STANDARDS The Federation of Accounting Professions issued the following accounting standards, financial reporting

standard, accounting standard interpretations and accounting treatment guidance that are effective for fiscal

years beginning on or after January 1, 2013.

AccountingStandards

TAS 12 Income Taxes

TAS 20 (Revised 2009) Accounting for Government Grants and Disclosure of Government Assistance

TAS 21 (Revised 2009) The Effects of Changes in Foreign Exchange Rate

FinancialReportingStandard

TFRS 8 Operating Segments

AccountingStandardInterpretations

TSIC 10 Government Assistance-No Specific Relation to Operating Activities

TSIC 21 Income Taxes-Recovery of Revalued Non-depreciable Assets

TSIC 25 Income Taxes-Changes in the Tax Status of an Enterprises or its Shareholders

Accounting Treatment Guidance for Transfers of Financial Assets

These accounting standards, financial reporting standard, accounting standard interpretations and accounting

treatment guidance do not have any significant impact on the financial statements, except for the following

accounting standard.

TAS12IncomeTaxes

This accounting standard requires an entity to identify temporary differences arising from differences between

the carrying amount of an asset or liability in the statement of financial position and its tax base in order to

recognise the tax effects as deferred tax assets or liabilities subjecting to certain recognition criteria. The

Company and its subsidiary companies have changed this accounting policy in this current period and

restated the prior year’s financial statements, presented as comparative information, as though the Company

and its subsidiary companies had initially recognised the tax effects as deferred tax assets or liabilities. The

cumulative effect of this change in accounting policy has been presented in Note 4 to the financial

statements.

Newaccountingstandardsissuedduringtheperiodandnotyeteffective

During the year, the Federation of Accounting Professions has issued notifications, already published in the

Royal Gazette, mandating the use of Accounting Standard, Financial Reporting Standard, Accounting

Standard Interpretation and Financial Reporting Standard Interpretations as follows.


Effective date

Accounting Standard

TAS 1 (Revised 2012) Presentation of Financial Statements January 1, 2014

TAS 7 (Revised 2012) Statement of Cash Flows January 1, 2014

TAS 12 (Revised 2012) Income Taxes January 1, 2014

TAS 17 (Revised 2012) Leases January 1, 2014

TAS 18 (Revised 2012) Revenue January 1, 2014

TAS 19 (Revised 2012) Employee Benefits January 1, 2014

TAS 21 (Revised 2012) The Effects of Changes in Foreign Exchange Rate January 1, 2014

TAS 24 (Revised 2012) Related Party Disclosures January 1, 2014

TAS 28 (Revised 2012) Investments in Associates January 1, 2014

TAS 31 (Revised 2012) Interests in Joint Venture January 1, 2014

TAS 34 (Revised 2012) Interim Financial Reporting January 1, 2014

TAS 38 (Revised 2012) Intangible assets January 1, 2014

Financial Reporting Standard

TFRS 2 (Revised 2012) Share - Based Payments January 1, 2014

TFRS 3 (Revised 2012) Business Combinations January 1, 2014

TFRS 4 Insurance Contracts January 1, 2016

TFRS 5 (Revised 2012) Non-current Asset Held for Sale and Discontinued Operations January 1, 2014

TFRS 8 (Revised 2012) Operating Segments January 1, 2014

Accounting Standard Interpretation

TSIC 15 Operating Leases-Incentives January 1, 2014

TSIC 27 Evaluating the Substance of Transactions Involving January 1, 2014

the Legal Form of a Lease

TSIC 29 Service Concession Arrangements: Disclosures January 1, 2014

TSIC 32 Intangible Assets-Web Site Costs January 1, 2014

Financial Reporting Standard Interpretations

TFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities January 1, 2014

TFRIC 4 Determining whether an Arrangement contains a Lease January 1, 2014

TFRIC 5 Rights to Interests arising from Decommissioning, January 1, 2014

Restoration and Environmental Rehabilitation Funds

TFRIC 7 Applying the Restatement Approach under TAS 29 January 1, 2014

Financial Reporting in Hyperinflationary Economies

TFRIC 10 Interim Financial Reporting and Impairment January 1, 2014

TFRIC 12 Service Concession Arrangements January 1, 2014

TFRIC 13 Customer Loyalty Programmes January 1, 2014

TFRIC 17 Distributions of Non-cash Assets to Owners January 1, 2014

TFRIC 18 Transfers of Assets from Customers January 1, 2014

The management of the Company and its subsidiary companies is presently considering the first-year impact

on financial statements of the Company and has yet to reach a conclusion.


4. CUMULATIVE EFFECT OF THE CHANGE IN ACCOUNTING POLICIES AND RESTATEMENT OF THE FINANCIAL STATEMENTS IN CONNECTION WITH RECLASSIFICATION OF INVESTMENT 4.1 Change in accounting policy During the year, the Company and its subsidiary companies made the change described in Note 3 to

the financial statements to its significant accounting policies, as a result of the adoption of TAS 12

Income Taxes. The cumulative effect of the change in the accounting policies has been separately

presented in the statements of changes in shareholders’ equity.

The amounts of adjustments affecting the statements of financial position and the statements of

comprehensive income are summarized below.

(Unit: Thousand Baht)

Consolidated Separate December December January December December January

31,2013 31,2012 1,2012 31,2013 31,2012 1,2012

Statementsoffinancialposition

Increase in deferred tax assets 15,737 13,237 10,884 10,395 8,210 4,828

Increase in deferred tax liabilities 18,784 17,597 23,523 16,625 16,704 23,455

Decrease in other components of equity (14,869) (16,036) (23,403) (14,869) (16,036) (23,403)

Increase in non-controlling interest 832 1,108 1,309 - - -

Increase in unappropriated retained earnings 10,990 10,568 9,455 8,639 7,542 4,776



FortheyearendedDecember31, FortheyearendedDecember31, 2013 2012 2013 2012

Statementsofcomprehensiveincome

Decrease in defined benefit plan actuarial loss - 3,438 - 2,870

Increase in unrealized gain on fair value changes

on available-for-sale investments 1,167 7,367 1,167 7,367

Increase (decrease) in income tax expenses (146) 2,533 (1,098) 104

Decrease in profit attributable to non-controlling interest (276) (241) - -

Increase (decrease) in profit attributable to equity holders

of the Company 422 (2,185) 1,098 (104)

Increase (decrease) in basic earnings per shares (Baht) 0.01 (0.03) 0.01 -

4.2 Restatement of the financial statements in connection with the reclassification of investment Pursuant to the amendment by the Federation of Accounting Professions to the Thai Accounting

Standard (“TAS”) No.28 (Revised 2009): Investment in Associates, the entity is required to record the fair

value of investment as at the date of reclassification (reclassification due to change in the

proportionate of investment) and the difference between the fair value and the book value of

investment is recognised to profit or loss. Such practice differs from the procedure set out in TAS

No.105: Accounting for Investment in Debt and Equity Securities, which the entity is required to record

the fair value of investment as at the date of reclassification and the difference between the fair

value and the book value of investment is recognised to shareholders’ equity. In compliance with TAS

No.28 (Revised 2009), the Company has retrospectively adjusted the reclassification of investment in the

prior year’s financial statement presented as comparative information. The effects of the adjustment

are summarized below:



Consolidated Separate December January December January

31,2012 1,2012 31,2012 1,2012

Statementsoffinancialposition

Increase (decrease) in other components of equity 55,373 55,879 (64,066) (64,652)

Increase (decrease) in unappropriated retained earnings (55,373) (55,879) 64,066 64,652


Consolidated Separate Fortheyearended Fortheyearended

December31,2012 December31,2012

Statementsofcomprehensiveincome

Increase (decrease) in other income 506 (585)

Increase (decrease) in reclassification adjustments relating to

available-for-sale investments disposal in the period (506) 585

5. SIGNIFICANT ACCOUNTING POLICIES 5.1 Revenue recognition

5.1.1 Revenues from sales of goods

Sales of goods are recognized when the significant risks and rewards of ownership of the goods

have passed to the buyer. Sales are the invoiced value, excluding value added tax, of goods

supplied after deducting sales return discounts and allowances.

5.1.2 Revenues from rental and services

Rental income is recognized over the rent period and services income are recognized when

services have been rendered taking into account the stage of completion.

5.1.3 Interest income and dividend income

Interest income is recognized on an accrual basis based on the effective interest rate. Dividend

income is recognized when the right to receive the dividend is established.

5.2 Cash and cash equivalents Cash and cash equivalents consist of cash on hand, cash at bank, and all highly liquid investments

with an original maturity of three months or less and not subject to withdrawal restrictions.

5.3 Trade and other receivables Trade and other receivables are stated at the net realizable value. Allowance for doubtful accounts is

provided for the estimated losses that may be incurred in collection of receivables. The allowance is

generally based on collection experiences and analysis of debtor aging.

5.4 Inventories Inventories are valued at the lower of cost and net realizable value. Cost is determined by the

weighted average method except for factory supplies, the cost of which determined by the first-in,

first-out method.


The cost of purchase comprises both the purchase price and costs directly attributable to the

purchase of the inventory, such as transportation charges, less all attributable discounts, allowances

and rebates. The cost of finished goods and work in process comprise raw materials, direct labor, other

direct costs and related production overheads, the latter being allocated on the basis of normal

operating activities. Net realizable value is the estimate of the selling price in the ordinary course of

business, less the costs of completion and selling expenses.

Allowance for stock obsolescence is set up for obsolete, slow-moving and defective inventories.

5.5 Investments Investments in subsidiaries and associated companies presented in separate financial statements are

recorded under the cost net of allowance for impairment.

Investments in associated companies presented in consolidated financial statements are recorded at

equity method.

Investment in available-for-sale security is carried at fair value less allowance for impairment of

investment. The differences between book value and fair value are presented as other comprehensive

income (loss) in statement of comprehensive income and unrealized gain (loss) on fair value changes

on investment in the shareholders’ equity.

Investment in non-marketable equity security which the Company classifies as other investment, is

valued at cost net of allowance for impairment (if any).

Cost of short-term and long-term investments sold during the year were computed by the weighted average

method. Gain or loss of those investment sales are stated in the statement of comprehensive income.

5.6 Investment properties Investment properties are properties which are held to earn rental income, for capital appreciation or

for both, but not for sale in the ordinary course of business, use in the production or supply of goods

or services or for administrative purposes.

Investment properties are stated at cost less accumulated depreciation and impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the investment property. The

cost of self-constructed investment property includes the cost of materials and direct labour, and other

costs directly attributable to bringing the investment property to a working condition for its intended

use and capitalised borrowing costs.

5.7 Property, plant and equipment and depreciation Property, plant and equipment are stated at cost less accumulated depreciation and allowance for

impairment of assets (if any).

When parts of an item of property, plant and equipment have different useful lives, they are

accounted for as separate items (major components) of property, plant and equipment.

Depreciation is calculated based on the depreciable amount, which is the cost of an asset, or other

amount substituted for cost, less its residual value.


Depreciation of plant and equipment is calculated by reference to their costs on a straight-line basis

(except for assets acquired prior to 1986, for which the declining balance basis is used) over the

following estimated useful lives: -

Buildings and buildings improvement 10 - 45 years

Machinery and factory equipment 5 - 20 years

Office furniture, fixtures, equipment and motor vehicles 3 - 15 years

Depreciation is included in determining income.

No depreciation has been provided for land and construction in progress.

Expenditures for additions, renewals and improvements are capitalized. Repair and maintenance costs

are recognized as expenses when incurred.

Depreciation methods, useful lives and residual values are reviewed at each financial year-end and

adjusted if appropriate.

5.8 Land use right and amortization Land use right of an overseas subsidiary company is stated at cost less accumulated amortization.

Amortization is calculated by reference to cost on a straight-line basis over the expected future period,

for which the assets are expected to generate economic benefit for 30 years.

The amortization is included in determining income.

5.9 Long-term leases Leases which transfer substantially all the risks and rewards of ownership are classified as finance leases.

Finance leases are capitalised at the lower of the fair value of the leased assets and the present

value of the minimum lease payments. The outstanding rental obligations, net of finance charges, are

included in other long-term payables, while the interest element is charged to profit or loss over the

lease period. The equipment acquired under finance leases is depreciated over the shorter of the

useful life of the asset and the lease period.

Operating lease payments are recognised as an expense in profit or loss on a straight line basis over

the lease term.

5.10 Related party transactions Related parties comprise enterprises and individuals that control, or are controlled by, the Company,

whether directly or indirectly, or which are under common control with the Company.

They also include associated companies and individuals which directly or indirectly own a voting

interest in the Company that gives them significant influence over the Company, key management

personnel, directors and officers with authority in the planning and direction of the Company’s

operations.

5.11 Foreign currencies The consolidated and separate financial statements are presented in Thai Baht which is functional

currency of the Company. Items of each entity included in the consolidated financial statements are

measured using the functional currency of that entity.


Foreign currency transactions are translated into Baht at the rates ruling on the transaction dates.

Assets and liabilities in foreign currency outstanding on the statements of financial position date are

translated into Baht at the rates ruling on the statements of financial position date.

Gains and losses from the change of foreign exchange rate are included in determining income.

5.12 Impairment of asset The Company and its subsidiaries assess at each reporting date whether there is an indication that an

asset may be impaired. If any such indication exists, the Company and its subsidiaries make an

estimate of the asset’s recoverable amount. Where the carrying amount of the asset exceeds its

recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Impairment losses are recognized in the statement of comprehensive income. (An asset’s recoverable

amount is the higher of fair value less costs to sell or value in use).

5.13 Employee benefits Definedcontributionplans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed

contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.

Obligations for contributions to defined contribution pension plans are recognised as an employee

benefit expense in profit or loss in the periods during which services are rendered by employees.

Short-termemployeebenefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as

the related service is provided.

Post-employmentbenefitsandotherlong-termemployeebenefits

The Company and subsidiary companies provide a post-employment benefit obligations, payable to

employees under the Thai Labor Protection Act, and other long-term employee benefits. These

obligations are determined by a qualified independent actuary based on actuarial techniques, using

the projected unit credit method. The present value of the defined benefits obligation is determined

by discounting estimated future cash flows using yields on the government bonds which have terms to

maturity approximating the terms of related liability. The estimated future cash flows shall reflect

employee salaries, turnover rate, length of service and other.

Any actuarial gain and loss arising from post-employment benefits that are recognised in other

comprehensive income will be recognised immediately in retained earning.

Any actuarial gain and loss from other long-term employee benefits are recognised in profit and loss.

5.14 Directors’ and management’s remuneration Directors’ remuneration represents the benefits paid to the Company’s directors in accordance with

Section 90 of the Public Company Limited Act, exclusive of salaries and related benefits.

Remuneration to management is salaries, remuneration and other benefits to their directors and

management, in accordance with the definitions in the notification of the Securities and Exchange

Commission. Management under such definition includes a chief executive officer, the next four

executive levels immediately below the chief executive officer and all persons in positions comparable

to those fourth executive levels.


5.15 Income tax Income tax expense represents the sum of corporate income tax currently payable and deferred tax.

Currenttax

Current income tax is provided in the accounts at the amount expected to be paid to the taxation

authorities, based on taxable profits determined in accordance with tax legislation.

Deferredtax

Deferred income tax is provided on temporary differences between the tax bases of assets and

liabilities and their carrying amounts at the end of each reporting period, using the tax rates enacted

at the end of the reporting period.

The Company and its subsidiary companies recognise deferred tax liabilities for all taxable temporary

differences while they recognise deferred tax assets for all deductible temporary differences and tax

losses carried forward to the extent that it is probable that future taxable profit will be available

against which such deductible temporary differences and tax losses carried forward can be utilised.

At each reporting date, the Company and its subsidiary companies review and reduce the carrying

amount of deferred tax assets to the extent that it is no longer probable that sufficient taxable profit

will be available to allow all or part of the deferred tax asset to be utilised.

The Company and its subsidiary companies record deferred tax directly to shareholders’ equity if the

tax relates to items that are recorded directly to shareholders’ equity.

5.16 Provision for liabilities The Company and its subsidiaries recognize a provision for liabilities when an entity has a present legal

or constructive obligation as a result of a past event. It is probable that an outflow of economic

benefits resources will be required to settle the obligation and reliable estimate can be made of the

amount of the obligation.

5.17 Use of accounting estimates Preparation of financial statements in conformity with the financial reporting standards principles

required the management to make several estimation and assumption which affect the reported

amounts in the financial statements and notes related thereto. Consequent actual results may differ

from those estimates.

Estimates and assumptions are continually evaluated and are based on historical experience and other

factors, including expectations of future events that are believed to be reasonable under the

circumstances.

The Company and its subsidiaries make estimates and assumptions concerning the future. The resulting

accounting estimates will, by definition, seldom equal the related actual results. The estimates and

assumptions that may have a risk of causing an adjustment to the carrying amounts of assets within

the next financial year relate primarily to allowance for doubtful accounts, allowance for impairment of

assets, allowance for stock obsolescence, depreciation of plant and equipment, amortization of land

use right and employee benefit obligation. All other estimates mentioned above are further detailed in

the corresponding disclosures.


6. RELATED PARTY TRANSACTIONS 6.1 Significant transactions with related parties During the years, the Company has significant business transactions with its subsidiary companies,

associated companies and related companies (related by way of shareholding or common

shareholders and/or directors). Related party transactions for the years ended December 31, 2013 and

2012 are summarized as follows: -



Transactiontype Payee Payer 2013 2012 2013 2012 Pricepolicy Rental and service TWS TDC 1.86 1.13 1.86 1.13 Agreement (1.3 and 1.4)

TW6 TDC 4.91 4.70 - - Agreement (1.3)

TWPL TWS 9.89 9.13 9.89 9.13 Agreement (1.1)

Others Others - - 6.30 5.90 Agreement and agreed

basis (1.2, 1.5, 1.6 and 1.7)

Interest TWS TWRL - - 5.37 6.64 Agreement (2.1)

TWS DI - - 1.50 1.49 Agreement (2.1)

Others Others - - 2.14 2.46 Agreement (2.1 and 2.2)

Trading of goods and TWS TWFP 52.78 37.63 52.78 37.63 Market price

supplies TWS TDC 51.10 69.75 51.10 69.75 Market price

TDC TWS 54.78 56.18 54.78 56.18 Market price

TWS CT 191.14 717.65 191.14 717.65 Market price

(USD 6.49 (USD 23.22 (USD 6.49 (USD 23.22

million) million) million) million)

VTC TAY 6.08 20.46 - - Market price

(VND (VND

4,276 13,731.52

million) million)

TN TWS - - 1,050.76 1,128.08 Agreed basis (3.1)

TWS DI - - - 8.08 Agreed basis (3.1)

TWAS TWS - - 9.59 14.01 Agreed basis (3.1)

TWS TWAS - - 11.65 22.45 Agreed basis (3.1)

TWS TAY - - - 1.57 Agreed basis (3.1)

Others Others - - 0.83 2.76 Agreed basis (3.1)

Dividend TWS TAY - - 62.65 41.77 As declared

(USD 2.10 (USD 1.38

million) million)

TWS TW6 - - - 18.12 As declared

TWS TWFP 3.58 3.34 3.58 3.34 As declared

TWS LRH 0.44 - 0.44 - As declared

TWS WL - - - 10.76 As declared

Abbreviation

TWS = Thai Wah Starch Public Company Limited

Subsidiaries

TN = Thai Nam Tapioca Company Limited

TWAS = Thai Wah Alpha Starch Company Limited

DI = DI Company Limited

TW6 = Thai Wah (6) Company Limited

TAY = Tay Ninh Tapioca Company Limited

TWRL = Thai Wah Realty Limited


Associatedcompany

WL = The Walon (1) Company Limited

Relatedcompanies

(Related by share holding or common shareholders and/or directors)

TWFP = Thai Wah Food Products Public Company Limited

TWPL = Thai Wah Plaza Limited

TDC = Tapioca Development Corporation Limited

LRH = Laguna Resorts & Hotels Public Company Limited

CT* = Chungman Trading Company Limited

Others = More than one Subsidiary, Associated and Related companies

* Since April 29, 2013, there was no common directors which caused Chungman Trading Company Limited to be no longer a related company.

Price policy 1. These transactions relate to:

1.1 Rental and service fee for office space at Thai Wah Tower I are approximately Baht 400 - 550

per square metre per month. Rental and service fee are charged at the rate within the range

charged to other non related tenants in Thai Wah Tower I and also within the market rental

range of office buildings that are similar quality and location. Other expenses and utility are

reimbursed at cost. These are normal course of business. The agreement is effective till April 17,

2015.

1.2 Reimbursement of office expenses such as photocopy expenses, telephone charges and other

utility charges are reimbursed at cost.

1.3 Land rental for factory as per co-investment agreement of which period is 30 years will be

expired in 2019. Rental rate is charged at 7.5% of the current appraised value of the land and

will be revised every three years. The present rate is Baht 698,750 per month charged by TWS

and TW6 of Baht 255,000 per month and Baht 443,750 per month, respectively. The rental rate is

within the range charged in the market.

1.4 Warehouse rental charges are at Baht 0.75 - 30 per bag per month which depend on size of

bag.

1.5 Land rental for factory premise charge is Baht 302,000 per year.

1.6 Land rental for factory premise charge is Baht 627,000 per year.

1.7 Warehouse rental charges for 2 locations are Baht 30,000 per month and Baht 3,500 per month.

2. These transactions relate to:

2.1 Interest charged is at the monthly average of finance costs plus 1 percent per annum.

2.2 Interest charged is at fixed deposit rate.

3. These transactions relate to:

3.1 Selling price is cost plus margin of each type of product.


The outstanding balances of related party transactions have been separately shown in the statements of

financial position as follows: -

6.2 Trade receivables - related companies (Unit: Thousand Baht)


Tradereceivables-subsidiarycompanies

DI Company Limited - - - 154

Thai Wah Alpha Starch Company Limited - - 27,215 28,786

Total trade receivables - subsidiary companies - - 27,215 28,940

Tradereceivables-relatedcompany

Thai Wah Food Products Public Company Limited 4,802 3,459 4,802 3,459

Chungman Trading Company Limited - 147,981 - 147,981

Total trade receivables - related company 4,802 151,440 4,802 151,440

Total 4,802 151,440 32,017 180,380

6.3 Short-term loans to related companies (Unit: Thousand Baht)

Separate

December Duringtheyear December

31,2012 Increase Decrease 31,2013

Short-termloans-subsidiarycompanies

Bang Thao (6) Company Limited 935 - - 935

Chiang Saen Land Company Limited 7,755 - - 7,755

DI Company Limited 53,265 102,646 (86,000) 69,911

Mae Chan Land Company Limited 831 - - 831

Mae Hong Son Land Development Limited 1,635 - - 1,635

Thai Ongkarak Company Limited 13,998 - - 13,998

Tha Thungna Land Company Limited 390 - - 390

Total short-term loans - subsidiary companies 78,809 102,646 (86,000) 95,455

Short-termloans-associatedcompany

Mae Joe Land Company Limited 8,048 - - 8,048

Less: Allowance for doubtful accounts (8,048) - - (8,048)

Total short-term loans - associated company, net - - - -

Total 78,809 102,646 (86,000) 95,455

Short-term loans to related companies are unsecured. The loans are repayable within one year and

carry interest at the rates of 3.23 - 6.88 percent per annum.


6.4 Other receivables - related companies (Unit: Thousand Baht)


Otherreceivables-subsidiarycompanies

Bang Thao (6) Company Limited - - 1,472 1,433

DI Company Limited - - 193 128

Chiang Saen Land Company Limited - - 10,773 10,323

Thai Wah (6) Company Limited - - 20 -

Mae Chan Land Company Limited - - 1,733 1,644

Mae Hong Son Land Development Limited - - 2,988 2,849

Thai Nam Tapioca Company Limited - - 104 -

Thai Ongkarak Company Limited - - 19,236 18,732

Thai Wah Alpha Starch Company Limited - - 721 201

Tha Thungna Land Company Limited - - 1,448 1,369

Thai Wah Realty Limited - - 177,448 172,073

Architrave Design & Planning Company Limited - - 6,859 6,555

Bang Thao (5) Company Limited - - 9,684 9,296

Phang Nga Resorts Limited - - 15,337 14,803

Laguna (2) Company Limited - - 621 587

Bang Thao (7) Company Limited - - 373 337

Mae Joe Land Company Limited - - 23,849 -

Less: Allowance for doubtful accounts - - (222,159) (197,015)

Total other receivables - subsidiary companies, net - - 50,700 43,315

Otherreceivables-associatedcompany

Mae Joe Land Company Limited - 23,557 - 23,557

Less: Allowance for doubtful accounts - (23,557) - (23,557)

Total other receivables - associated company, net - - - -

Otherreceivables-relatedcompanies

Tapioca Development Corporation Limited 403 187 403 187

International Commercial Development

Company Limited 20 - 20 -

Total other receivables - related companies 423 187 423 187

Total 423 187 51,123 43,502


6.5 Long-term loans to subsidiary companies (Unit: Thousand Baht)

December Duringtheyear December

31,2012 Increase Decrease 31,2013

Long-termloanstosubsidiarycompanies

Architrave Design & Planning Company Limited 7,413 - - 7,413

Bang Thao (5) Company Limited 6,839 - - 6,839

Phang Nga Resorts Limited 11,161 - - 11,161

Thai Wah Realty Limited 148,325 - - 148,325

Total long-term loans to subsidiary companies 173,738 - - 173,738

Less: Allowance for doubtful accounts (173,738) - - (173,738)

Long-term loans to subsidiary companies, net - - - -

Long-term loans to subsidiary companies are unsecured. The loans carry interest at the rates of 3.23 -

6.88 percent per annum.

6.6 Trade payables - related companies (Unit: Thousand Baht)


Tradepayables-subsidiarycompanies

Thai Wah Alpha Starch Company Limited - - 1,243 -

Thai Nam Tapioca Company Limited - - 31 26,322

Total trade payables - subsidiary companies - - 1,274 26,322

Tradepayables-relatedcompany

Tapioca Development Corporation Limited 16,739 21,634 16,739 21,634

Total trade payables - related company 16,739 21,634 16,739 21,634

Total 16,739 21,634 18,013 47,956

6.7 Short-term loan from related company Short-term loan from related company is the balance of loan which Mae Joe Land Company loaned

from International Commercial Development Company Limited. The loan carries interest at the rates of

2.88 - 3.00 percent per annum and is repayable at call.

6.8 Directors and management’s remuneration During the year ended December 31, 2013 and 2012, the Company and its subsidiary companies had

employee benefit expenses of their directors and management as follow:



Short - term employee benefits 25,988 21,219 25,396 20,040

Post - employment benefits 372 143 372 143

Other long - term employee benefits 12 18 12 18

Total 26,372 21,380 25,780 20,201


7. CASH AND CASH EQUIVALENTS (Unit: Thousand Baht)


Cash 18,963 8,025 4,214 1,856

Cash at banks - current accounts 17,686 7,060 12,559 4,351

Cash at banks - saving accounts 281,885 216,758 196,053 161,110

Cash at banks - fixed deposits not over 3 months 446,930 565,898 234,507 291,362

Total 765,464 797,741 447,333 458,679

8. TRADE AND OTHER RECEIVABLES Trade and other receivables are aged as follows: -


Consolidated Separate Ageofreceivables Note 2013 2012 2013 2012

Tradereceivables-relatedcompanies

Not yet due 4,366 151,440 6,663 153,144

Past due

Up to 3 months 436 - 4,280 8,963

3 - 6 months - - 3,185 18,273

6 - 12 months - - 4,678 -

Over 12 months - - 13,211 -

Totaltradereceivables-relatedcompanies 6.2 4,802 151,440 32,017 180,380

Tradereceivables-others

Not yet due 295,439 133,779 238,226 56,985

Past due

Up to 3 months 40,622 23,035 4,445 12,935

6 - 12 months 3,174 - - -

Over 12 months 3,659 3,657 3,623 3,623

Totaltradereceivables-others 342,894 160,471 246,294 73,543

Less: Allowance for doubtful accounts (1,960) (34) (1,814) -

Tradereceivables-others,net 340,934 160,437 244,480 73,543

Otherreceivables-relatedcompanies 423 187 51,123 43,502

Totalotherreceivables-relatedcompanies 6.4 423 187 51,123 43,502

Totaltradeandotherreceivables 346,159 312,064 327,620 297,425


9. INVENTORIES (Unit: Thousand Baht)


Finished goods 364,765 238,052 216,918 149,298

Raw materials 2,056 7,510 - -

Packing materials 12,538 14,541 11,400 14,078

Factory supplies 37,651 35,282 16,844 14,876

Others 11,055 10,147 2,259 2,219

Total inventories 428,065 305,532 247,421 180,471

Less : Allowance for stock obsolescence (8,520) (6,225) (5,874) (3,722)

Inventories-net 419,545 299,307 241,547 176,749

For the year ended December 31, 2013 and 2012, inventories recognised as an expense in cost of

sales are Baht 2,784 million and Baht 2,916 million, respectively in the consolidated financial statements

(separate financial statements : Baht 2,129 million and Baht 2,366 million, respectively).

10. AVAILABLE - FOR - SALE INVESTMENTS (Unit: Thousand Baht)

ConsolidatedandSeparate 2013 2012

Investmentinsecurities

Equity securities

Laguna Resorts & Hotels Public Company Limited 174,010 174,010

Thai Wah Food Products Public Company Limited 72,534 72,534

Total 246,544 246,544

Less: Unrealized loss on fair value changes on investment (52,058) (46,223)

Totalavailable-for-saleinvestments(presentedatfairvalue) 194,486 200,321

11. INVESTMENTS IN ASSOCIATED COMPANIES

Percentageofholding

Paid-upcapital (directandindirect)

Natureofbusiness 2013 2012 2013 2012

MillionBaht MillionBaht Percent Percent

Investmentsinassociatedcompanies

Mae Joe Land Company Limited Land rental - 3.00 - 50.0

The Walon (1) Company Limited Land holding 1.00 1.00 29.9 29.9




Investmentsatequitymethod Investmentsatcostmethod

2013 2012 2013 2012

Investmentsinassociatedcompanies

Mae Joe Land Company Limited - - - 1,500

The Walon (1) Company Limited 389 391 299 299

Total 389 391 299 1,799

Less: Allowance for impairment of investments - - - (1,500)

Investmentsinassociatedcompanies,net 389 391 299 299

The following summarized financial information of associated companies

Totalassets Totalliabilities 2013 2012 2013 2012

ThousandBaht ThousandBaht ThousandBaht ThousandBaht

Mae Joe Land Company Limited - 338 - 34,067

The Walon (1) Company Limited 1,311 1,323 12 16

Totalrevenues Netprofit(loss) 2013 2012 2013 2012

ThousandBaht ThousandBaht ThousandBaht ThousandBaht

Mae Joe Land Company Limited - 1 - (438)

The Walon (1) Company Limited 7 222 8 197


12. INVESTMENTS IN SUBSIDIARY COMPANIES

Paid-upcapital Percentageofholding Investmentsatcostmethod 2013 2012 2013 2012 2013 2012

MillionBaht MillionBaht Percent Percent ThousandBaht ThousandBahtInvestmentsinsubsidiarycompanies

Agriculturalbusiness

Thai Wah Alpha Starch Company Limited 18.00 18.00 99.99 99.99 17,999 17,999

DI Company Limited 10.00 10.00 99.93 99.93 9,409 9,409

Thai Wah Rice Flour Company Limited 30.00 30.00 83.33 83.33 24,999 24,999

Tay Ninh Tapioca Company Limited 124.13 124.13 70.00 70.00 86,876 86,889

Thai Nam Tapioca Company Limited 86.60 86.60 70.00 70.00 60,620 60,620

Landholdingandothers

Thai Wah Realty Limited 100.00 100.00 99.99 99.99 119,012 119,012

Bangna Property Development

Company Limited 28.14 28.14 99.99 99.99 32,000 32,000

Rachada Property Development

Company Limited 162.00 162.00 99.99 99.99 161,999 161,999

Bangpakong Turakij Company Limited 91.00 91.00 99.99 99.99 90,999 90,999

Chiang Saen Land Company Limited 75.00 75.00 99.99 99.99 74,999 74,999

Thai Wah (6) Company Limited 29.00 29.00 99.99 99.99 28,999 28,999

Bang Thao (6) Company Limited 21.50 21.50 99.99 99.99 21,499 21,499

Mae Chan Land Company Limited 15.00 15.00 99.99 99.99 14,999 14,999

Tha Thungna Land Company Limited 15.00 15.00 99.99 99.99 14,999 14,999

Thai Sin Tapioca (1989) Company Limited 5.00 5.00 99.99 99.99 4,999 4,999

Thai Ongkarak Company Limited 4.00 4.00 99.98 99.98 3,999 3,999

Phang Nga Resorts Limited 1.00 1.00 99.93 99.93 999 999

Bang Thao (5) Company Limited 0.25 0.25 99.93 99.93 250 250

Laguna (2) Company Limited 0.10 0.10 99.40 99.40 100 100

Bang Thao (7) Company Limited 0.03 0.03 99.30 99.30 25 25

Thai Modified Starch Company Limited 10.00 10.00 94.62 94.62 9,462 9,462

Mae Hong Son Land Development Limited 2.00 2.00 84.97 84.97 1,699 1,699

Thai Nam Tapioca (1) Company Limited 1.00 1.00 69.95 69.95 700 700

Architrave Design & Planning

Company Limited 0.50 0.50 99.88 99.88 500 500

Thai Wah Marketing Services Limited 20.00 20.00 80.00 80.00 16,000 16,000

Mae Joe Land Company Limited 3.00 - 49.99 - 1,500 -

Total 799,641 798,154

Less: Allowance for impairment

of investments (227,387) (230,014)

Investmentinsubsidiarycompanies,net 572,254 568,140

All subsidiary companies are incorporated and operated in Thailand except for Tay Ninh Tapioca Company

Limited, which is incorporated and operated in Vietnam. This subsidiary company is a joint venture in the form

of a limited liability company between the Company and a Vietnamese Government Agency engaging in

the manufacture and sale of tapioca products. Such join venture has a period of operation for 30 years since

January 31, 1994 and can be extend.


In 2013, the Company has recorded dividend income from Tay Ninh Tapioca Company Limited amounting to

Baht 62.65 million in the separate financial statements.

13. OTHER LONG-TERM INVESTMENT Investment in related company

Natureof Countryof Percentage ConsolidatedandSeparate

business incorporation ofholding 2013 2012

Percent ThousandBaht ThousandBaht

Ordinaryshares

Tropical Resorts Limited Holding Hong kong 19.8 45,703 45,703

Less: Allowance for impairment company

of investment (45,703) (45,703)

Other long-term investment, net - -

14. INVESTMENT PROPERTY (Unit: Thousand Baht)


Land - cost 248,003 248,003 504 504

Less: Allowance for impairment of assets (68,191) (68,191) - -

Investmentproperty,net 179,812 179,812 504 504

The appraised value of investment property determined by independent appraisers using comparative method

is approximately Baht 398.06 million in the consolidated financial statements and Baht 138.50 million in the

separate financial statements.


15. PROPERTY, PLANT AND EQUIPMENT (Unit: Thousand Baht)

Consolidated

Officefurniture,

Buildings Machineryand fixtures,

andbuildings factory equipmentand Construction

Land improvement equipment motorvehicles inprogress Total

Cost:

As at January 1, 2012 132,806 282,362 522,401 139,779 39,509 1,116,857

Purchase/Transfer in - 5,120 47,770 26,668 130,525 210,083

Disposal/Transfer out - - (5,462) (11,083) (18,342) (34,887)

Translation adjustment - (2,160) (7,320) (454) - (9,934)

As at December 31, 2012 132,806 285,322 557,389 154,910 151,692 1,282,119


Disposal/Transfer out - (12,437) (10,379) (54,225) (226,094) (303,135)

Translation adjustment - 4,442 17,393 1,188 - 23,023

As at December 31, 2013 132,806 352,304 743,305 115,264 10,215 1,353,894

Accumulateddepreciation:

As at January 1, 2012 - 220,211 462,182 116,191 - 798,584

Depreciation for the year - 5,605 11,290 7,253 - 24,148

Depreciation on disposal - - (4,926) (10,992) - (15,918)

Translation adjustment - (1,688) (5,810) (389) - (7,887)

As at December 31, 2012 - 224,128 462,736 112,063 - 798,927


Depreciation on disposal - (12,008) (9,991) (53,744) - (75,743)

Translation adjustment - 3,615 12,734 875 - 17,224

As at December 31, 2013 - 222,509 484,661 67,389 - 774,579

Allowanceforimpairment:

As at December 31, 2012 - 6,825 - - - 6,825

As at December 31, 2013 - 6,825 - - - 6,825

Netbookvalue:

As at December 31, 2012 132,806 54,369 94,653 42,847 151,692 476,367

As at December 31, 2013 132,806 122,950 258,644 47,875 10,215 572,490

Depreciationfortheyear:

2012 (Baht 15.1 million included in manufacturing cost, and the balance in selling and administrative expenses) 24,148




Separate

Officefurniture,

Buildings Machineryand fixtures,

andbuildings factory equipmentand Construction

Land improvement equipment motorvehicles inprogress Total

Cost:

As at January 1, 2012 8,757 159,834 167,935 90,571 7,000 434,097

Purchase/Transfer in - 980 8,863 22,335 67,073 99,251

Disposal/Transfer out - - (3,015) (9,305) (5,677) (17,997)

As at December 31, 2012 8,757 160,814 173,783 103,601 68,396 515,351


Disposal/Transfer out - (12,109) (7,464) (52,369) (102,949) (174,891)

As at December 31, 2013 8,757 187,829 236,954 62,123 8,347 504,010

Accumulateddepreciation:

As at January 1, 2012 - 131,926 152,811 77,635 - 362,372


Depreciation on disposal - - (2,479) (9,215) - (11,694)

As at December 31, 2012 - 135,648 153,574 73,532 - 362,754


Depreciation on disposal - (11,831) (7,349) (52,253) - (71,433)

As at December 31, 2013 - 127,632 152,307 27,484 - 307,423

Netbookvalue:

As at December 31, 2012 8,757 25,166 20,209 30,069 68,396 152,597

As at December 31, 2013 8,757 60,197 84,647 34,639 8,347 196,587

Depreciationfortheyear:



As at December 31, 2013 and 2012, the net book value of plant and equipment acquired before 1986, which

are depreciated on the declining balance method, is Baht 8.3 million and Baht 9.0 million, respectively

(separate financial statement: Baht 8.3 million and Baht 9.0 million, respectively).

As at December 31, 2013 and 2012, certain plant and equipment of the Company and its subsidiary

companies have been fully depreciated but are still in use. The original cost of those assets amounting to

Baht 680.4 million and Baht 735.6 million, respectively (separate financial statement: Baht 262.0 million and

Baht 305.5 million, respectively).

Land and construction thereon owned by the Company and certain subsidiaries are mortgaged to secure the

credit facilities from financial institution.

The appraised value of land determined by independent appraisers using comparative method is

approximately Baht 564.96 million in the consolidated financial statements and Baht 135.40 million in the

separate financial statements.


16. LAND USE RIGHT (Unit: Thousand Baht)

Consolidated

Cost:

January 1, 2013 10,789

Translation adjustment 654

December 31, 2013 11,443

Accumulatedamortization:

January 1, 2013 6,803

Amortization for the year 359

Translation adjustment 435

December 31, 2013 7,597

Netbookvalue:

January 1, 2013 3,986

December 31, 2013 3,846

Amortizationexpensesincludedinthestatementsofcomprehensiveincomefortheyear:

2012 364

2013 359

17. DEPOSITS AT FINANCIAL INSTITUTIONS SUBJECT TO RESTRICTIONS As at December 31, 2013 and 2012, deposits at financial institutions in the consolidated and separate

financial statements which are subject to restrictive conditions for bank overdrafts, letter of credit and letter of

guarantee facilities amount to Baht 70.8 million and Baht 85.6 million, respectively in the consolidated financial

statements and Baht 61.0 million and Baht 64.0 million respectively in the separate financial statements.

18. SHORT-TERM LOAN FROM FINANCIAL INSTITUTIONS Short-term loan from financial institution is an unsecured loan of a subsidiary company under credit facilities of

Vietnamese Dong 15,000 million with the interest rate of 10% per annum.

19. TRADE AND OTHER PAYABLES (Unit: Thousand Baht)


Note 2013 2012 2013 2012

Trade payables - related companies 6.6 16,739 21,634 18,013 47,956

Trade payables - others 9,997 5,913 5,341 -

Advance receipts from customers 6,731 3,872 6,563 3,793

Other payables 112,057 109,623 67,706 67,884

Total 145,524 141,042 97,623 119,633


20. LONG-TERM LOAN FROM FINANCIAL INSTITUTIONS (Unit: Thousand Baht)

Consolidated

December31,2013

Long-term loan 25,380

Less: Current portion of long-term loan (20,040)

Long-term loan, net of current portion 5,340

Movements in long-term loan account during the year ended December 31, 2013 are summarized below:


Consolidated

Borrowings 43,750

Less: Repayment (18,370)

Balance as at December 31, 2013 25,380

A long-term loan of a subsidiary company under credit facilities of Baht 60 million are monthly repaid totaling

36 installments of Baht 1.67 million each. The loan carries interest at a rate of MLR-1.90% per annum.

The loan is secured by the mortgage of the subsidiary’s land and construction thereon.

21. EMPLOYEE BENEFIT OBLIGATIONS The Company and its subsidiary companies pay post-employment benefit and pension based on the

requirement of the Thai Labour Protection Act B.E. 2541 (1998) to provide retirement benefits and other long

term benefit to employees based on pensionable remuneration and length of service.

Employee benefit obligations in statements of financial position



Post-employment benefits - Legal severance payment plan 43,083 40,771 32,880 31,448

Other long-term employee benefits 11,723 11,340 6,523 6,603

Total 54,806 52,111 39,403 38,051

Movement in the present value of the defined benefit obligations



For the year ended December 31,

Employee benefit obligations as at January 1, 52,111 34,551 38,051 23,614

Current service costs and interest 5,664 3,608 3,886 2,104

Benefits paid during the years (2,969) (4,519) (2,534) (3,525)

Defined benefit plan actuarial loss - 18,471 - 15,858

Employee benefit obligations as at December 31, 54,806 52,111 39,403 38,051


Expense recognised in profit or loss




Current service costs 3,862 2,067 2,710 1,207

Interest on obligations 1,802 1,541 1,176 897

Defined benefit plan actuarial loss - 1,283 - 1,510

Total 5,664 4,891 3,886 3,614

The expense is recognised in the following line items in the profit or loss:




Cost of sales 3,479 2,352 1,891 1,008

Selling expenses 209 255 209 255

Administrative expenses 1,976 2,284 1,786 2,351

Total 5,664 4,891 3,886 3,614

Recognised in other comprehensive income




Actuarial loss - 17,188 - 14,348

Total - 17,188 - 14,348

Principal actuarial assumption at the reporting date :

ConsolidatedandSeparate

Discount rate 3.50% (Thailand), 10.00% (Vietnam)

Salary increase rate 4.00% - 10.00%

Mortality rate 75% of TMO2008


22. Income tax Income tax expenses for the year ended December 31, 2013 and 2012 are made up as follows:




Currentincometax:

Income tax 74,640 80,723 38,186 47,544

Deferredtax:

Relating to origination and reversal of

temporary differences (418) 2,570 (1,098) 104

Incometaxexpensereportedinthe

statementsofcomprehensiveincome 74,222 83,293 37,088 47,648

Impact of tax income (expense) to component of other comprehensive income for the year ended

December 31, 2013 and 2012 are as follows:-



Actuarial loss - 3,438 - 2,870

Unrealized loss on fair value changes

in available-for-sale investment 1,167 7,367 1,167 7,367

Total 1,167 10,805 1,167 10,237

Reconciliation of income tax expenses and the result of the accounting profit multiplied by the income tax

rates for the years ended December 31, 2013 and 2012 are as follows:-

Consolidated

2013 2012 Taxrate(%) (ThousandBaht) Taxrate(%) (ThousandBaht)

Profit before tax 325,425 392,127

Income tax using relating income tax rate 0 - 25 72,645 0 - 25 84,789

Expenses not deductible for tax purpose 2,962 3,431

Addition income for tax purpose 1,586 922

Addition expenses deductible for tax purpose (2,996) (8,729)

Loss carry forward (7) (1,133)

Currenttax 74,190 79,280

Adjustments in respect of prior year 450 1,443

Movement in temporary differences (418) 2,570

Incometaxexpenses 23 74,222 21 83,293


Separate

2013 2012 Taxrate(%) (ThousandBaht) Taxrate(%) (ThousandBaht)

Profit before tax 249,487 275,476

Income tax using relating income tax rate 20 49,897 23 63,359

Expense not deductible for tax purpose 639 806

Addition income for tax purpose 1,581 932

Addition expenses deductible for tax purpose (13,931) (17,752)

Currenttax 38,186 47,345

Adjustments in respect of prior year - 199

Movement in temporary differences (1,098) 104

Incometaxexpenses 15 37,088 17 47,648

As at December 31, 2013 and 2012, the components of deferred tax assets and deferred tax liabilities are as

follows:



Deferred tax assets 16,233 13,457 10,395 8,210

Deferred tax liabilities 18,785 17,596 16,625 16,704

The movements in deferred tax assets and liabilities during the years are as follows:


Consolidated

Charged/creditedto Asat Statement Other Asat

January ofincome comprehensive December

1,2013 income 31,2013

Deferredtaxassets

Employee benefit obligations 10,626 515 - 11,141

Profit resulting from intragroup transactions in inventories 1,392 (774) - 618

Others 1,439 3,035 - 4,474

Total 13,457 2,776 - 16,233

Deferredtaxliabilities

Unrealized gain on fair value changes in

available-for-sale investments 16,036 - (1,167) 14,869

Difference depreciation for tax purpose 1,543 2,354 - 3,897

Others 18 1 - 19

Total 17,597 2,355 (1,167) 18,785



Consolidated



1,2012 income 31,2012

Deferredtaxassets

Employee benefit obligations 7,205 (17) 3,438 10,626

Profit resulting from intragroup transactions in inventories 2,478 (1,086) - 1,392

Others 1,470 (31) - 1,439

Total 11,153 (1,134) 3,438 13,457




Difference depreciation for tax purpose 120 1,423 - 1,543

Others 5 13 - 18

Total 23,528 1,436 (7,367) 17,597


Separate



1,2013 income 31,2013

Deferredtaxassets

Employee benefit obligations 7,610 271 - 7,881

Others 600 1,914 - 2,514

Total 8,210 2,185 - 10,395




Difference depreciation for tax purpose 668 1,088 - 1,756

Total 16,704 1,088 (1,167) 16,625



Separate



1,2012 income 31,2012

Deferredtaxassets

Employee benefit obligations 4,828 (88) 2,870 7,610

Others - 600 - 600

Total 4,828 512 2,870 8,210




Difference depreciation for tax purpose 52 616 - 668

Total 23,455 616 (7,367) 16,704

Income tax reduction Royal Decree No. 530 B.E. 2554 dated 21 December 2011 grants a reduction in the corporate income tax

rate for the three accounting periods 2012, 2013 and 2014; from 30% to 23% for the accounting period 2012

which begins on or after 1 January 2012 and to 20% for the following two accounting periods 2013 and 2014

which begin on or after 1 January 2013 and 2014, respectively.

23. STATUTORY RESERVE Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company is required to set aside

to a statutory reserve at least 5 percent of its net income after deducting accumulated deficit brought

forward (if any), until the reserve reaches 10 percent of the registered capital. The statutory reserve is not

available for dividend distribution.

24. BASIC EARNINGS PER SHARE The calculation of basic earning per share for the years ended December 31, were based on the profit for

the year attributable to equity holders of the parent (excluding other comprehensive income) and the

weighted average number of ordinary shares in issue during the year as follow :


Profit for the year attributable to equity holders of

the Company (Thousand Baht) 219,124 276,471 212,398 227,828

Weighted average number of ordinary shares (Thousand share) 78,536 78,536 78,536 78,536

Basic earning per share (Baht) 2.79 3.52 2.70 2.90

25. DIVIDENDS Annual General Meeting of shareholders of the Company held on April 19, 2013 resolved to approve the

dividends of Baht 1.00 per share, amounting to Baht 78.54 million. The dividend was paid to the shareholders

on May 17, 2013.


26. EXPENSES BY NATURE Significant expenses by nature are as follows:



Changes in finished goods (increase) decrease (123) 24 (68) 13

Salary, wages and employee benefits 292 240 179 143

Depreciation 34 24 16 12

Raw materials and consumables used 2,507 2,668 1,021 1,079

Purchase of goods 347 56 1,081 1,198

27. PROVIDENT FUND The Company and subsidiary companies and their employees have jointly established a provident fund in

accordance with the Provident Fund Act B.E. 2530. Both employees and the Company and subsidiary

companies contributed to the fund monthly at the rate of 5 percent of basic salary. The fund, which is

managed by The MFC Asset Management Public Company Limited will be paid to employees upon

termination in accordance with the fund rules. Total contributions of the Company and subsidiary companies

for the years are as follows: -



Contributions 3.61 2.42 2.36 1.99

28. FINANCIAL INFORMATION BY SEGMENT Operating segment information is reported in a manner consistent with the internal reports that are regularly

reviewed by the chief decision maker in order to make decisions about the allocation of resources to the

segment and assess its performance.

The operations of the Company and subsidiary companies principally involve the manufacturing and trading

of agricultural products which are carried on in two geographic areas of Thailand and Vietnam. The financial

information of the Company and subsidiary companies by geographical segment for the years ended

December 31, 2013 and 2012 are as follows:



Consolidated

Thailand Vietnam Total

2013 2012 2013 2012 2013 2012

Revenues

- Local 570 766 761 673 1,331 1,439

- Export 2,027 2,140 4 3 2,031 2,143

Total revenues 2,597 2,906 765 676 3,362 3,582

Segments income 187 216 103 112 290 328

Unallocated income (expenses):

Dividend income 4 3

Other revenues 15 22

Gain on debt restructuring - 16

Reversal of an impairment loss for

investment property - 19

Share of gain from investments in

associated companies - 11

Administrative expenses (3) (4)

Gain (loss) on exchange rate 20 (4)

Finance costs (1) -

Income tax expenses (74) (83)

Profit attributable to non-controlling interests (32) (32)

Net profit attributable to equity holders

of the Company 219 276

Property, plant and equipment, net 476 397 96 79 572 476

Unallocated assets 1,873 1,753 179 193 2,052 1,946

Total assets 2,349 2,150 275 272 2,624 2,422

Revenues from major customer of the Company and subsidiary companies approximately Baht 692 million for

the year 2013 (2012: Revenues from two customers present approximately Baht 1,092 million).

29. OTHER INCOME (Unit: Million Baht)


Interest income 14.64 20.24 15.18 18.57

Gain on exchange rate 19.91 - 20.83 -

Other income 49.88 50.84 34.54 37.17

Total 84.43 71.08 70.55 55.74


30. COMMITMENTS AND CONTINGENT LIABILITIES (Unit: Million Baht)


Capital commitments

Plant, machinery and equipment 95.84 64.96 88.86 34.27

Non-cancellable operating lease commitments

Within one year 3.46 7.09 3.46 6.92

After one year but within five years 0.15 6.97 0.15 6.97

Total 3.61 14.06 3.61 13.89

Other commitments

Service agreements 20.01 25.08 11.24 10.61

Bank guarantees and other commitments 27.79 47.04 16.11 12.06

Total 47.80 72.12 27.35 22.67

31. PENDING LAWSUITS In 2002, a subsidiary company of the Company was sued by a lender for payment of interest and penalties

on the grounds that the subsidiary company had defaulted on a loan agreement. In 2006, the Administrative

Court of First Instance dismissed the case. Subsequently, the plaintiff appealed against the judgment of the

Administrative Court of First Instance. The Supreme Administrative Court dismissed the judgment of the

Administrative Court of First Instance and return the case to the Administrative Court of First Instance to

process further. The Administrative Court of First Instance judged the subsidiary company, defendant, has to

pay Baht 2.2 million together with interest to be calculated at 7.5% per annum of principal of Baht 1.9 million

from the day following the date of filing the plaint, to the date of repayment. Subsequently, a subsidiary

company appealed against the judgment of the Supreme Administrative Court. During the current period, the

Supreme Administrative Court judged a subsidiary company has to pay Baht 2.2 million together with interest to

be calculated at 7.5% per annum of principal of Baht 1.9 million from the day following the date of filing until

payment is made in full. The subsidiary company paid the amount as the Court judged on March 20, 2013.

32. FINANCIAL INSTRUMENTS 32.1 Financial risk management and policies The Company and its subsidiary companies are exposed to risks from changes in market interest rates

and currency exchange rates. The Company and its subsidiary companies use derivative instruments as

and when they consider appropriate to manage such risks. They do not hold or issue derivative

financial instrument for speculative or trading purposes.

32.2 Interest rate risk The interest rate risk is the risk that future movements in market interest rates will affect the Company

and its subsidiary companies’ operations and their cash flows. The Company and its subsidiary

companies exposure to interest rate risk relate primarily to their deposits at financial institutions, loans to

related companies, loan from related company and loans from financial institutions. Most of the

Company’s financial assets and liabilities bear floating interest rates or fixed interest rate.


Significant financial assets and liabilities as at December 31, 2013 and 2012 classified by type of

interest rates are summarized in the table below, with those financial assets and liabilities that carry

fixed interest further classified based on the maturity date, or the repricing date (if this occurs before

the maturity date).

Consolidated

AsatDecember31,2013

Fixedinterestrates Floating

Within Over interest Non-interest Fixed

1year 1-5years 5years rate bearing Total interestrate

(MillionBaht) (%p.a.)

Financialassets

Cash and cash equivalents 447 - - 282 37 766 0.50 - 3.10

Temporary investments 4 - - - - 4 2.00

Trade and other receivables - - - - 346 346

Deposits at financial institutions subject to restrictions 71 - - - - 71 1.45 - 2.00

522 - - 282 383 1,187

Financialliabilities

Short-term loan from financial institution 7 - - - - 7 10.00

Trade and other payables - - - - 145 145

Short-term loan from related company - - - 3 - 3 2.88

Long-term loan from financial institution - - - 25 - 25 4.98

7 - - 28 145 180

Consolidated

AsatDecember31,2012





Financialassets




652 - - 217 327 1,196



Accrued interest expense - - - - 6 6

- - - - 147 147


Separate

AsatDecember31,2013





Financialassets

Cash and cash equivalents 234 - - 196 17 447 0.50- 2.45


Short-term loans to subsidiaries - - - 95 - 95 3.23 - 6.88


295 - - 291 345 931



- - - - 98 98

Separate

AsatDecember31,2012





Financialassets



Short-term loans to subsidiaries - - - 79 - 79 3.24 - 6.23


356 - - 240 303 899



- - - - 120 120

The Company and its subsidiary companies do not use derivative financial instruments to hedge such

risk.

32.3 Foreign currency risk The Company and its subsidiary companies’ exposure to foreign currency risk relate primarily to their

receivables and loans which are denominated in foreign currency. In addition to those transaction

exposures, the Company is also exposed to foreign exchange movements on their investment in foreign

subsidiary company, which currently are not hedged by any derivative financial instrument.


Below was the summary of the Company and subsidiary companies’ foreign currency-denominated

assets as at December 31, 2013 and 2012 which were not hedged by forward exchange contracts or

similar hedging instruments.

(Unit: Million)


Foreigncurrency Assets Assets 2013 2012 2013 2012

US dollar 7.9 8.0 7.8 7.6

32.4 Credit risk The Company and its subsidiary companies are exposed to credit risk primarily with respect to trade

accounts receivable. However, the Company and subsidiary companies have a policy to enter into

financial instruments with credit worthy counterparties, therefore the Company and its subsidiary

companies do not anticipate material losses from providing credit.

32.5 Fair value of financial instruments Since financial assets and liabilities of the Company and subsidiary companies are short-term in nature,

their fair value is not expected to be materially different from the amounts presented in statements of

financial position.

A fair value is the amount for which an asset can be exchanged or liability settle between

knowledgable, willing parties in an arm’s length transaction. The fair value is determined by reference

to the market price of the financial instrument or by using an appropriate valuation technique,

depending on the nature of instrument.

33. CAPITAL MANAGEMENT The primary objectives of the Company’s and subsidiary companies’ capital management are to maintain

their abilities to continue as a going concern and to maintain an appropriate capital structure.

34. EVENTS AFTER THE REPORTING PERIOD On February 11, 2014, the Board of Directors’ meetings of two subsidiary companies passed the resolutions to

propose to the shareholders for the liquidation of such subsidiary companies. The liquidations of such subsidiary

companies will not have any significant impact to the Company’s financial statements.

35. APPROVAL OF FINANCIAL STATEMENTS These financial statements were authorized for issue by the Company’s authorized directors on February 27,

2014.

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ld b

e so

ld to

repa

y the

Com

pany

,

plus, M

J’s shareh

olde

rs’ e

quity

remains n

egat

ive.

Th

erefore, the

Com

pany

had

set a

side

an

allowan

ce for d

oubt

ful d

ebt in re

spec

t of the

tota

l amou

nt o

f the

outst

anding

loan

owed

by

MJ.

TN

TN1

0.80

-

0.05

Av

erag

e co

st of fun

d

Jitde

echa

i Fam

ily

Com

mon

- TN

1 is

the

owne

r of la

nd w

hich

has

bee

n (a

,b a

nd c

)

plus 1

% pe

r an

num.

shareh

olde

rs leas

ed b

y TN

for c

arrying

on fac

tory. S

ince

Ms.

U-Ho

r Com

mon

- TN

1 lack

s of w

orkin

g ca

pita

l, so

TN1

nee

ds

Sa

e Chu

eng

shareh

olde

rs fin

ancial a

ssista

nce

from TN.

US

Com

mon

-Dire

ctor

PN

V Com

mon

-Dire

ctor

ML

Com

mon

-Dire

ctor

TW

S Major sha

reho

lders

1�1THAI WAH STARCH PUBLIC COMPANY LIMITED

Am

ountin

Na

me

of

Reason

tha

tsuch

person

Pa

yee

Paye

rDe

tailofTransac

tion/

Pricing

Policy

Million

Bah

tPe

rsonsw

ith

Relatio

nship

Nece

ssitya

ndRea

sona

blen

essofTransac

tions

(Sha

reho

lder>5%

)

Con

tract

Mutua

lInterest

shareh

olde

rinste

ado

f

shareh

olde

rinthe

Co

mpa

nyd

irectly

(Table1

)

Trad

ing,

Ren

tal e

xpen

ses

and

Serv

ice

Inco

me

Tran

sact

ions

with

Rel

ated

Com

pani

es

Purcha

sesoffinish

edg

oods

TWS

TWFP

Pu

rcha

ses of finish

ed g

oods

Marke

t Price

52.78

SSK

Com

mon

-Dire

ctor

Sellin

g of tap

ioca

sta

rch

and

tapioc

a pe

arl

(a)

Rece

ivable

balanc

e

4.80

prod

ucts

to TWFP

for d

istrib

ution

to the

final

co

nsum

er.

TWS

CT

Purcha

ses of finish

ed g

oods

Marke

t Price

191.14

HL

T Com

mon

-Dire

ctor

Sellin

g of tap

ioca

sta

rch

prod

ucts

to C

T who

is

Rece

ivable

balanc

e

-

a

major tap

ioca

produ

ct im

porte

r in Taiwan

.

1�� Annual Report �013

Am

ountin

Na

me

of

Reason

tha

tsuch

person

Pa

yee

Paye

rDe

tailofTransac

tion/

Pricing

Policy

Million

Bah

tPe

rsonsw

ith

Relatio

nship

Nece

ssitya

ndRea

sona

blen

essofTransac

tions

(Sha

reho

lder>5%

)

Con

tract

Mutua

lInterest

shareh

olde

rinste

ado

f

shareh

olde

rinthe

Co

mpa

nyd

irectly

(Table1

)

TWPL

US

C

Rental a

nd Servic

es

Rental a

nd Servic

es

9.89

LR

H Com

mon

- It

is the

loca

tion

of the

Hea

d Office

and

it is

(d

)

expe

nses

for o

ffice

at

Expe

nses

at the

rate o

f

Sh

areh

olde

rs loca

ted

in a

goo

d co

mmercial a

rea

completing

Bank

ok a

nd d

ocum

ent

Baht 4

00-550

/sq

m./m

onth.

with

pub

lic u

tilitie

s.

store (tota

l area

of 1

,179

Re

ntal rat

e an

d se

rvice

sqm.)

at Tha

i Wah

Tow

er 1

. ex

penses

are in

line

with

marke

t rate if

com

pared

to

the

same

build

ing

in a

sim

ilar loca

tion. Terms an

d

Leas

e Ag

reem

ent for

cond

itions in

the

agree

men

t

1-3

years fro

m Jan

uary 1

, are

simila

r to

othe

r customer

2012

to

April

17, 2

015

and

the

marke

t.

Other p

ublic

utilitie

s

Other p

ublic u

tilitie

s ex

penses

Other p

ublic

utilitie

s ex

penses

are c

harged

as

expe

nses

collected

as pe

r co

llected

as pe

r ac

tual

ac

tual e

xpen

ses,

which

are in

line

with

other

actual e

xpen

ses.

expe

nses

.

tena

nts.

Outsta

nding

balanc

e

0.09

Rentala

ndServic

ese

xpen

ses

1�3THAI WAH STARCH PUBLIC COMPANY LIMITED

Table 1 - Reason that such person (Shareholder>5%) shareholder instead of shareholder in the Company directly

Reference Relationship Reasons

(a) TWS holding TWS is carrying on the main business of manufacturing and export of

- 2.09% in LRH tapioca products and stakeholder in Hotel and Resort business and

- 5.02% in TWFP other business by investment in LRH. Moreover, the other stakeholder

- 49.99% in MJ of TWS includes commercial property development (by investment in

- 70.00% in TN MJ and TN1) and manufacture of tapioca products (by investment in

- 69.95% in TN1 TN) and consumer products (by investment in TWFP)

(b) Ms. U-Hor Sae Chueng holding

- 12.42% in TN

- 15.00% in TN1

(c) Chitdeechai family holding

- 15.46% in TN

- 15.00% in TN1

(d) LRH holding

- 16.27% in TWS

- 100% in TWRH

- 100% in TWPL through TWRH

Procedures for Approving Related Transaction The entering into the related party transactions between the Company or its subsidiaries and the persons with

mutual interest will be reviewed by the Management and proposed to the Audit Committee to opine and express

their opinion that the transactions are on normal commercial terms and at arms’ length basis. Once recommended

by the Audit Committee, the transaction will be further proposed to the Board of Directors or the Board of Directors

and shareholders for approval depending on the nature and size of the transactions in accordance with the

requirements of the SET and the SEC, Interested directors do not take part in approving the transactions.

Abbreviations LRH = Laguna Resorts and Hotels Public Company Limited

MJ = Mae Joe Land Company Limited

TN = Thai Nam Tapioca Company Limited

TN1 = Thai Nam Tapioca (1) Company Limited

TWS = Thai Wah Starch Public Company Limited

TWFP = Thai Wah Food Products Pubilc Company Limited

TWPL = Thai Wah Plaza Limited

TWRH = TWR - Holdings Limited

CT = Chungman Trading Company Limited

US = Mr. Umnad Sukprasongphol

PNV = Ms. Pinyada Viraya

ML = Ms. Manee Lueprasert

HLT = Mr. Hwee Liang Tee

SSK = Ms. Sirivan Skulkerevathana

1�� Annual Report �013

References

Registrars

• TheStockExchangeofThailand

The Stock Exchange of Thailand Building

62 Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand

Tel. 66 (0) 2229 2000, 66 (0) 2229 2222

Fax. 66 (0) 2654 5607-8

• ThailandSecuritiesDepositoryCompanyLimited

The Stock Exchange of Thailand Building, 4th, 7th Floor

62 Ratchadaphisek Road, Klongtoey, Bangkok 10110, Thailand

Tel. 66 (0) 2229 2800, 66 (0) 2229 2888

Fax. 66 (0) 2359 1259

Auditor

• OfficeofDIAInternationalAuditing

By Ms. Suvimol Krittayakiern C.P.A. No. 2982 and/or Ms. Vilairat Rojnuckarin C.P.A. No 3104

316/32 Sukhumvit 22 (Soi Sainumtip) Sukhumvit Road, Klongtoey, Bangkok 10110, Thailand

Tel. 66 (0) 2259 5300-2, 66 (0) 2258 2799

Fax. 66 (0) 2260 1553

Legal Counselors

• Allen@Overy(Thailand)Co.,Ltd.

Sinthorn Tower 3, 22nd Floor

130-132 Wireless Road, Lumpini, Pathumwan, Bangkok 10330, Thailand

Tel. 66 (0) 2263 7600

Fax. 66 (0) 2263 7699

• JakkrapongLawOfficeCo.,Ltd.

195 Soi Sannibattesaban, Rachadapisek Road, Chandrakasem, Jatujak, Bangkok 10900, Thailand

Tel. 66 (0) 2930 0123

Fax. 66 (0) 2513 6011

Financial Institutions

• United Overseas Bank (Thai) Public Company Limited, Thai Wah Tower Branch

• Citibank, N.A. Bangkok Branch

• Government Saving Bank Tungmahamek Branch

Annual Report

2013 Annual Report

21/59,21/63-64 Thai Wah Tower 1, 20 - 21 Floor, South Sathorn Road,Thungmahamek, Sathorn, Bangkok 10120Tel : 02-285-0040 Fax : 02-285-0270E-mail : [email protected] Home Page : http://www.thaiwah.com

Thai Wah Starch Public Company Limitedth st

Annual Report

Thai Wah Starch Public Com

pany Limited Thai Wah Starch Public Company Limited

2013 annual report - 56-1.com · production capacity of cassava starch products at the company’s...

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