Documente Academic
Documente Profesional
Documente Cultură
ENERGY
ENVIRONMENT
CONTENTS
10 12 14 15 Message from Chairman of the Board of Directors Audit Committee Report for Shareholders Vision, Mission and Corporate Value Special Articles Workforce focus to organizational Sustainability Tap Water Management : Key principle for development of sustainable city 18 21 25 32 38 40 42 43 44 45 56 57 60 62 75 76 79 81 82 83 Financial Highlights Operation Result Analysis and Report Good Corporate Governance Report Social, Community and Environmental Activites General Information of the Company Nature of Business Characteristics TTW and Its Subsidiaries Structure List of Subsidiaries Shareholding Structure Management Structure Divend Policy Risk Factors Internal Audit Board of Director and Management Profile Number of Shareholding by Directors and Mangement Compensation Paid to Directors, Management and All Employees Related Transactions Report on the Board of Directors Responsibility on the Financial Report Independent Auditors Report Financial Statements
WATER
We provide full service of water management and wastewater treatment which could balance water life cycle and lead to the most benefit and equality to everyone in the society.
WATER
MANAGEMENT
Water Water is the vital natural resource to humanity. To obtain suitable clean water for consumption and Industrys production, Thai Tap Water Supply Plc. has committed on water quality improvement which we complied with International standard by following 3 main principles : Cleanness, Sufficiency and Continuousness . Everyone could trusts in our tap water and use water with the most maximum benefit.
Cleanness:
Sufficient:
Continuousness:
We have implemented computer system to control the waters production and transmission so that we could control our waters quality at all times, and also have been tested and verified the quality by Department of Health, Ministry of Public Health. So we are confident that our distributed tap water is clean and drinkable quality grade.
We established the tap waters production system with maximum capacity of 440,000 cubic meters per day together with five water storage tanks to contain water of total 150,000 cubic meter, spread into different locations to ensure that each supplied area has sufficiency of tap water quantity and water compression at all times.
We have designed and installed production units and water pumps as reserved units in case of emergency, and implemented computer system in administration and maintenance to continuously support water distribution to consumers for 24 hrs.
WATER
ENERGY
ENVIRONMENT
QUALITY OF LIFE
WATER
ENERGY RENEWABLE ENVIRONMENT RESPONSIBILITY
MANAGEMENT
RENEWAL ENERGY
We have studied the alternative energy and solar energy projects in order to expand our business to all alternative energies, such as wind farm energy and renewable energy in various types which could bring balance to the environment.
At the present, the air pollution and global warming are mainly caused by exhausted emission from fuel combusted. As a consequence, these problems could be solved by energy sector, have to take considered on future sufficient energy factor in to account. Thai Tap Water Supply Plc. has aware of the problem thus we have studied, invested in innovation and prepared ourselves to use renewal energy properly.
ENERGY
RENEWABLE
Solar energy Thailand is located in tropical zone, with high potential to produce solar power electricity. Currently, the solar power electricity can be generated by solar cell technology which is eco-friendly technology and also reduces carbon dioxide emission in the atmosphere. The company, therefore, focuses to invest in this business for the first priority and believe it could enhance Energy Security in the country.
Wind Energy
Wind energy comes from natural source which could be used unlimited. The company is interested in and also conducts the feasibility studies. Although wind farm has been operated in several countries but, its only in the beginning state in Thailand. As the result, the company would like to be the first pioneer of wind energy producer in Thailand.
Besides solar energy and wind energy, the company also pay attention and would like to develop other kinds of energy, especially Biomass. As Thailand is the agricultural country with abundance of natural raw materials such as husk, bagasse, coconut palm, corncob, firewood, grass and others. This is a good opportunity for the company to study and collect data for investment in related business including waste to energy. As the expansion of the urban area and consumption increasing, these factors lead to the rise in communitys waste in every year. Additionally, the company is aware of the environmental problem from waste, so the company has studied and looked for opportunity to build waste to energy electricity , not only to reduce waste amount but also to feed electricity into the system without importing the fossil fuel .
WATER
ENERGY
ENVIRONMENT
SUSTAINABILITY
ENERGY
WATER MANAGEMENT ENVIRONMENT RESPONSIBILITY
RENEWABLE
ENVIRONMENT
We walk together with environmental consciousness and awareness. Meanwhile we support in all environmental problem solving for better living society and our organization sustainable growth.
ENVIRONMENT
RESPONSIBILITY
Thai Tap Water Supply Plc.is committed to operate business with environmental protection, pollution control and environmental improvement to enhance the well- being of everyone in the society and sustainable growth simultaneously by following these guidelines:
1
Strictly be complying with Environmental Law and Regulations and be having business policy to encourse the effective consumption on natural resources, raw materials, and energy. Meanwhile be cooperating in environmental protection.
2
Be supporting our cooperation on environmental activities to all communities.
3
Be applying eco-friendly businesss policy in the companys business plan, such as communities waste water treatment and waste to energy.
WATER
ENERGY
ENVIRONMENT
HAPPINESS
ENVIRONMENT
WATER MANAGEMENT ENERGY RENEWABLE
RESPONSIBILITY
10
WATER
ENERGY
ENVIRONMENT
11
IN 2012
Thai Tap Water Plc. has been engaging in tap water production and distribution business for almost a decade. We are committed to become Thailands leading company in water supply, energy and environment businesses. Our successful performance and continuing growth during the past years have proved our best effort in conducting business for the benefit of both the company and the Thai society.
To ensure peoples access to clean and high quality water, we have planned to expand the production capacity in our existing service areas of Nakhonpathom, Samutsakhon and Pathumthani. In addition, we set our new goal by shifting from tap water-oriented business to be Thailands leading public utility company. In this regard, the company has firstly entered into energy business by investing in CK Power Co.,Ltd., a shareholder of a hydroelectric company generating power from Nam Ngum 2 Dam in Lao PDR. Furthermore, we have conducted a number of feasibility studies for the investment in other businesses. In 2013, in order to ensure our secured presence in the SET50, together with high quality growth and good corporate governance, we continue to improve our service quality to reach international standards with the goal to meet the most satisfaction of our stakeholders. By doing so, we place high priority to the proactive teamwork approach, professionalism, and consistent self-improvement. Besides, we are well aware of our mission in building up good value to the Thai society. With the collaboration of the Wildlife and Plant Conservation Department, Ministry of Natural Resources and Environment, we have initiated the-five-year-One-Million Trees Planting Project with the objective to afforest trees in Thong Pha Phum National Park, Kanchanaburi Province. The area is water sources of Mae Klong River and Tha Chin River. On behalf of the Board of Directors, the management and the staff of Thai Tap Water Plc., I would like to take this opportunity to sincerely thank all of you for your confidence and support. Let me repeat that we are ready to the steady, consistent and sustainable growth during the year to come.
12
Techapit Sangsingkeo
WATER
ENERGY
ENVIRONMENT
13
The Audit Committee has performed the duties independently within scopes and responsibilities as assigned by the Board of Directors. The Audit Committee has given opinions and advices to ensure equal benefits of all stakeholders in line with good principles and guidelines for the Audit Committee. The Audit Charter of the Audit Committee has been determined and approved by the Chairman of the Board of Directors, provided that the scopes of responsibilities have been stipulated to notifications of the Stock Exchange of Thailand.
The Audit Committee of Thai Tap Water Supply Company Limited (the Company) has been assigned by the Board of Directors. The Audit committee comprises 3 independent directors having various experiences such as management, finance, accounting, economic, and law. The Chairman of the Audit Committee is Mr. Techapit Sangsingkeo, and 2 members of the Audit Committee are Mr. Phairuch Mekarporn and Mr. Somnuk Chaidejsuriya. The Head of Internal Audit Division acts as the secretary of the Audit Committee. In the year 2012, four meetings of the Audit Committee were held, including the meetings with the management, internal audit offers and auditors of the Company. The Audit Committee reported the meeting results and performance to the meeting of the Board of Director quarterly. Accordingly, the Audit Committee performed all of the duties as set in the Audit Charter. Key performances are summarized as follows. Review the accuracy, completeness, reliability, transparency and sufficient disclosure of the quarterly financial statements and 2012 financial statements of the Company and its subsidiaries before submission to the Board of Directors.
Review the sufficiency of the internal audit systems of the Company whether it is able to efficiently and effectively prevent or reduce faults, damages or frauds. Review the compliance with securities and stock exchange laws, regulations of the Stock Exchange of Thailand, and other relevant laws. Review an internal audit function and give opinions on annual audit plans. Acknowledge audit results and give advices on monitoring reports and amendment to ensure the proper and effective operation of the internal audit. Select and appoint an auditor, and propose an audit fee to the Board of Directors. The Audit Committee proposed the Board of Directors to appoint Miss Siraporn Ouaanunkun, the Certified Public Accountant No. 3844 and/ or Mr. Supachai Phanyawattano, the Certified Public Accountant No. 3930 and/ or Mr. Khitsada Lerdwana, the Certified Public Accountant No. 4958 of Ernst & Young Office Ltd., to be the auditor of the Company in 2012. The aforementioned persons have reliable qualifications and conduct duties in line with auditing professional standards. The audit fee of, not exceeding, 1,235,000 Baht is proposed to the meeting of the Board of Directors for consideration, and to the meeting of the shareholders for approval. In summary, in the opinions of the Audit Committee, the 2012 financial statements of the Company and subsidiaries are prepared in line with the generally accepted accounting principles. The information is disclosed sufficiently, accurately, completely and reliably. The internal audit systems are set efficiently and effectively. The operation of the Company and subsidiaries are in compliance with securities and stock exchange laws, regulations of the Stock Exchange of Thailand, and other related laws.
Techapit Sangsingkeo
14
VISION
TO BE THAILANDS LEADING COMPANY IN WATER, ENERGY AND ECO-FRIENDLY BUSINESSES.
MISSION
TO GROW ON A FIRM, CONTINUOUS AND SUSTAINABLE BASIS IN ORDER TO ACCOMPLISH OUR VISION THROUGH THE BALANCE OF INTERESTS AMONG CUSTOMERS, EMPLOYEES, BUSINESS PARTNERS, SHAREHOLDERS, COMMUNITIES AND ENVIRONMENTS. CONTINUOUS IMPROVEMENT PROACTIVE & INITIATIVE AND TEAMWORK
CORPORATE VALUES
RUNNING BUSINESS TO FULFILL OUR VISION AND MISSION ON THE BASIS OF SHARING HIGHEST SATISFACTION AND BENEFITS AMONG STAKEHOLDERS BY MEANS OF:
WATER
ENERGY
ENVIRONMENT
15
SPECIAL ARTICLES
Workforce focus to organizational Sustainability
Thailands Leading Company in Water, Energy and Eco-Friendly Businesses.
TTW has created properly human resource management system in line with leadership system. The below picture shows the human resource management system of TTW.
With a vision to be
Vision
Strategy Formulation
Strategy Implementation
Mission
Business Target
Review and Follow - up and Evaluation
Business Strategy
Revision
TTW believes that the success of the organization obviously depends on the knowledge, skills, ability, creativity and motivation of the employees. Therefore, TTW intend to build Employee Satisfaction, which play a significant role in defining organizational success, by various methods such as providing the employees with career development opportunities, providing the employees appropriate training and development programs, providing the employees a safe and pleasant working environment and also providing the employees the creative activities to foster positive employee relation etc. At the present, the human resource management system of TTW can be divided into two main following aspects.
16
1. Employees ability management, consists of 1.1 Identifying the skills, knowledge and behavior necessary to perform the job effectively in the job description (JD) and the job specification (JS) clearly. 1.2 Defining and developing a competency framework by linking individual competencies to TTW core competencies. 2. Developing human resource management system 2.1 The recruitment and selection process TTW believes that Putting the right man on the right job at the right time is the key factor for organizational success. Thus, TTW pay special attention on conducting the recruitment process carefully from start to finish in order to ensure that the organization get the best, qualified candidate most closely matched the qualifications specified in the job description and job specification. According to the TTW recruitment policy, the vacancy at chief level or above is filled by promoting an appropriate candidate from the organization and subsidiaries first. This because the company trusts in the employees capabilities. If there is no qualified candidate, the external sources of recruitment (such as campus recruitment, advertising, internet etc.) are then a channel used for attracting and selecting a qualified candidate for a vacant position. 2.2 Employee training and development It is critical to the success of the organization to create a culture that encourages, supports, and invests in the short- and long-term organizational development of their employees. TTW has implemented the Individual Development Plan (IDP) as a significant instrument for enhancement the employees performances and capabilities. In this regard, each employee has the primary responsibility or working closely with their supervisor to develop and monitor their IDP. At the same time, supervisors are responsible for assisting each of their employees in the development of their IDP and supporting developmental activities outlined in the IDP. It can be concluded that the IDPs can be a win/win strategy because they benefit both the employee and the organization. Employees benefit, because implementing an IDP helps
them improve their knowledge, skills, and experiences. Improved competencies help them achieve personal and career goals. The organization benefits by developing improved employee capabilities can make the organization more effective. 2.3 Performance appraisal Performance appraisal of TTW is linked with company vision and company target. In the others word, the employees at all level have to work to meet the standards set by the organization. Job performance of the organization is evaluated twice a month through management meeting in order to share the division performance. Moreover, executive committee is conducted quarterly for reporting and evaluating the organization performance. 2.4 Compensation and benefit management Its seem reasonable to believe that a well-designed compensation and benefits plan assists to attract, motivate and retain talent in the organization. With the belief, TTW provides the employees a comprehensive, competitive, remuneration package that include both finance (e.g. a competitive and fair base salary and an annual bonus based on employee and company performance targets etc.) and non-finance rewards (e.g. praise or recognition, job promotion, job rotation etc.) At TTW, there are several awards provided the employees for employee recognition such awards as, Thai Tap Award, Rooky Award, Thai Tap Innovation Award etc. The employee recognition method was performed and reviewed by Human Resource & Administration Division.
WATER
ENERGY
ENVIRONMENT
17
we should incite the government to concentrate on the proper way to manage water in each area in order to gain the maximum benefit because water is an important part of city development.
the amount of the water in The Tha Chin River is sufficient to produce tap water each year.
the amount of the water in The Tha Chin River
As both local and foreign institutional Investors frequently ask the company during the meeting regarding cleanness and sufficiency of raw water to produce tap water covering the duration of Water Sales Agreement with PWA indicating Investors concern about the feasible risk of the companys performance. The Company therefore provides Investors additional information for the purpose of improving their confidence. The Tha Chin River, an important branch of the Chao Phraya River, is separated at Singh District, Chainat Province. It flows through Suphanburi, Nakhonpathom and drains to the Gulf of Thailand at Bangyaprek Sub-District, Muang District, Samuthsakorn Province. The total length is about 325 kilometers. The Tha Chin River has many regional names. After it is split from Chao Phraya River at Chainat, its called Makham Thao River; while passing Suphan Buri, its called the Suphan River; while passing Nakhon Pathom, it becomes the Nakhon Chai Si River. Also its called the Tha Chin River while passing Samut Sakhon. Normally, the river water level is higher in the fourth quarter but lower from March to May. The fluctuation is based on normal seasonal changes such as rainfall in the third quarter and hot weather from March to May. Although waters level in the Tha Chin River from March to May 2553, 2554 and 2555 is the the lowest level comparing with other period of time in the same year, It still remains at approximate 7 mil. cubic meters per day for the least amount in 2553 and about 20 mil. cubic meters per day for the most amount in 2554. Its evident that the amount of the water in The Tha Chin River is sufficient to produce tap water each year. However, the improper water management by draining the huge amount to the Gulf of Thailand may cause the drought or the mega flood sometime occurred in Thailand. Therefore, we should incite the government to concentrate on the proper way to manage water in each area in order to gain the maximum benefit because water is an important part of city development. Water is also considered as basic utilities for life. If we dont realize that water management is as important as transportation and electrical power systems improvements, the water will not be adequate for daily life as recently occurred in some areas.
about 20 mil. remains at approximate cubic meters 7 mil. cubic meters per day for the per day for the least most amount amount
18
FINANCIAL HIGHLIGHTS
WATER
ENERGY
ENVIRONMENT
19
20
(Unit : Million Baht) Separate Financial Statements For the year ended December 31 2012 2011 2010 23,994 13,792 10,202 3,245 4,141 870 190 2,375 2,124 2.56 0.53 21,348 11,395 9,954 3,017 3,746 748 167 2,269 2,063 2.49 0.52 21,167 11,876 9,291 2,968 3,554 762 135 2,206 1,959 2.33 0.49
Financial Ratio
Description Profitability ratios Gross profit margin (%) Net profit margin (%) Return on equity (%) Efficiency Ratios Return on assets (%) Return on fixed assets (%) Debt service coverage ratio Debt / Equity (times) Dividend Yield (%) Consolidated Financial Statements For the year ended December 31 2012 2011 2010 69.64 45.92 23.21 10.44 19.47 1.30 77.45 70.90 45.59 21.54 9.78 19.22 1.14 66.07 70.56 46.67 22.77 9.70 18.59 1.27 61.84 Separate Financial Statements For the year ended December 31 2012 2011 2010 72.20 51.30 22.40 10.10 16.23 1.35 88.29 74.97 55.06 21.40 9.70 15.62 1.14 67.67 73.11 55.11 21.89 9.32 16.54 1.28 64.21
WATER
ENERGY
ENVIRONMENT
21
22
Expense analysis
Expenses Cost of sales and services Administrative expenses Financial expenses Corporate income tax Total 2012 1,495.4 262.3 608.2 259.5 2,625.4 2011 1,323.0 222.0 518.0 210.9 2,273.9 Change 172.4 40.3 90.2 48.6 351.5
Administrative Expenses
In 2011 and 2012, the company and its subsidiaries had administrative expenses of 222.00 Million Bah and 262.3 Million Baht respectively, a growth rate of 40.3 Million Baht or 18.1% due to higher insurance expenses, legal and advisory service fee.
Financial Expenses
Financial expenses in 2011 and 2012 were at 222.0 and 262.3 Million Baht, an increase of 90.2 Million Baht or 17.4% due to interest payment of 74.4 Million Baht from long-term loan of 2,760 Million Baht for investment in CKP, representing 30 percent of the registered capital of CKP.
WATER
ENERGY
ENVIRONMENT
23
Net Profit
In 2011 and 2012, the company and its subsidiaries gained the net profit of 2113.0 Million Baht or 45.6% and 2,421.3 Million Baht or 45.9%, respectively, an increase of 308.3 Million Baht or 14.6%.
Analysis of assets
Main assets of the company and its subsidiaries comprised land, buildings and equipment for tap water production, which rights shall be transferred by expiration of agreements, rights to produce and distribute tap water, right on waste water treatment (net) and rights to produce and distribute tap water (net). As of 31 December 2012, the company and its subsidiary have total assets of 24,670.39 Million Baht, increasing from the last year by 2,942.09 Million Baht, due to additional investment in the company and its subsidiaries of 2,746.50 Million Baht.
Analysis of liabilities
Major liabilities of the company and its subsidiaries included corporate bond, long-term loans and long-term loans due in 1 year. As of 31 December 2012, the company and its subsidiary have the total liabilities of 13,927.3 Million Baht, increasing from the last year by 2,390.7 Million Baht due to long-term loan of 2,760 Million Baht for investment in associated companies. However, the company has already paid back the capital of 470 Million Baht.
24
Audit Fee
In 2012, according to the resolution of the 2012 Annual Meeting of Shareholders on 16 March 2012, Ernst and Young Co., Ltd., was selected as the companys auditor. The audit fee was 1,235,000 Baht.
WATER
ENERGY
ENVIRONMENT
25
The Board of Directors has assigned the Corporate Governance Committee to take charge of corporate governance matters as well as to consider trends and movements at the international level in order to find areas for improvement. The Board of Directors, moreover, specifies corporate governance as one of the main items on the agenda at the Board of Directors meeting. The company also publishes and distributes booklets of Code of Conduct to its employees to create the corporate governance guidelines to ensure effective practice, details shown on companys website, www.thaitap.com TTW sees its corporate governance and code of conduct as essential guidelines for the organization; therefore, the emphasis is strongly laid upon principles and practices concerning responsibility and fairness towards all stakeholders. The principles include a clear outline of the structure, components, duties, independence and the performance of the Board of Directors, transparency of information disclosure, a strict auditing system and risk management policies. These build trust and create additional value among the shareholders. TTW has disclosed related information through various media, for example, the annual report, 56-1 form, websites of the Stock Exchange of Thailand (SET) and of TTW. In addition, the stakeholders have the opportunity to participate in improving the companys operating results through communications with the Investor Relation via e-mail, ir@thaitap.com. All suggestions will be carefully considered prior to reporting to TTWs executives and the Board of Directors for acknowledgement and consideration.
26
4. Prior to the 2012 Annual Ordinary General Meeting of Shareholders, one or several shareholders holding 1 year consecutive in aggregate at least 0.050 % of all issued shares of the Company have the right to suggest issues to be included in the agenda of the Annual Ordinary General Meeting of Shareholders for 2012. The Company provided the proposed form to shareholders and they were allowed to exercise
WATER
ENERGY
ENVIRONMENT
27
this right three months in advance between 1 October - 31 December 2011, so that the Nomination and Remuneration Committee could screen the issues before presenting them to the Board of Directors for consideration. However, no shareholder proposed any agenda item or candidate prior to the Meeting. 5. On the date of the meetings, the company uses the barcode system for registration to ensure convenience of shareholders as each reference number is already included in the registration form. In addition, for each agenda, the company will collect the ballot paper from the shareholders who vote disapprove or abstain in order to deduct the votes from the total entitled voting rights. The company applies the e-voting system to perform the calculation in order to ensure immediate voting results prompt for announcement right after the end of each agenda. Shareholders are entitled to verity each voting result after the meeting. 6. At the meetings, shareholders are allowed to freely express their opinions, give suggestions, and raise questions on any agenda item before casting votes to ensure that shareholders have sufficient detailed information on the matters. Should shareholders have questions or inquiries, specialists in specific fields are available to answer queries under the responsibility of the Boards. 7. An agenda on the Boards remuneration is included to inform the shareholders of the amount and type of remuneration received by each director including meeting allowance and the Boards bonus. The detailed information can be found in the companys annual report on page 76. 8. The agenda of the 2012 Annual Ordinary General Meeting of Shareholders was considered chronologically as it appeared in the invitation letter submitted to shareholders prior to the Meeting, without any changes in order or request for the Meeting to consider any agenda item other than those specified in the invitation letter.
28
Shareholders :
Employees :
Society :
Environment :
WATER
ENERGY
ENVIRONMENT
29
6. Disclose detailed information on the operation and investment structure in subsidiaries and associate companies. 7. Disclose information on the remuneration each director receives as a member of the committee. In addition, the Company has a policy not to support any violation of intellectual property rights or copyright. It represents the spirit of the Company to conduct business with fairness. The guidelines are as follows : 1. The work of the compliance function is an intellectual property of the Company. 2. Effect or a right of any third party information received or to be used within the Company must be checked to ensure that it will not infringe the copyright or intellectual property rights of others. Monitoring system from the procurement process, installation to use software and database of various computer programs active in the organization currently. To ensure compliance with the Computer Acts related offenses in 2007.
30
The Company intends to supply goods and services to the highest standards and ethics operates under the following principles. a) b) c) d) a competitive bidding and selection of an appropriate and fair, the criteria for evaluation and selection of suppliers and contractors, make a reasonable contract, to provide for management and monitoring to ensure that the operating conditions, of the contract in its entirety in order to prevent fraud, misconduct at all stages of the procurement process.
The Companys operations depends on the natural environment, awareness of the business with commitment to engage with environmental responsibility. Reduce resource use and waste, added ability to use resources effectively. Cultivate participation in health care and environmental responsibility to the employees. The approach recognizes that all employees have a total impact on the environment. 1) Would comply with environmental laws and regulations, 2) Promote employee knowledge, understanding about the need to protect the environment both education and training. 3) Exchange of knowledge and experience with both internal and external agencies as well as the companies listed on the Stock Exchange. The goals is to prevent a negative impact on the environment. Employees to perform continuously and can track their progress regularly.
All stakeholders can contact/ report to the Board of Directors or the Audit Committee directly
The channel for all stakeholders have complained to the secretary of the Audit Committee. To report directly to the Audit committee by contacting the secretary of the Audit Committees website at ia@thaitap.com
WATER
ENERGY
ENVIRONMENT
31
The company has provided a communication channel for stakeholders to contact the Secretary to the Audit Committee who directly reports to the Audit Committee via website: ia@thaitap.com The company places great importance upon transparency and full disclosure of significant financial, operational, and other relevant information. In addition to fulfill legal and SET reporting requirement, the company has established its own broad infrastructure of dissemination channels to reach related parties. These communication channels include. 1. Availability of Investor Relation Department (IR) for direct communication with local and international investors, 2. Arrangement of Press Conferences on an annual basis to announce operating results and regularly press briefings to announce significant investment projects and activities, 3. Arrangement of analyst meeting to announce semi-annually operating results to investors and stakeholders, 4. Arrangement of activities to meet both local and international investors and other stakeholders, 5. Arrangement of company visit and plant tour for stakeholders, analysts, NGOs, communities, media and other stakeholders, 6. Distribution to the media of press releases, such as captioned photographs, news stories and advertisements, 7. Arrangement of publication and media, such as annual report, sustainability report, TTWs E-News Letter journal, 8. Distribution to employees of press releases via electronic media, such as intranet and e-mail, 9. Disclosure relevant information on companys website: www.thaitap.com.
32
SOCIAL
COMMUNITY AND ENVIRONMENTAL ACTIVITIES
In 2012
the company had participated in various social, community and environmental activities as follows;
WATER
ENERGY
ENVIRONMENT
33
Social Activites
Community Activities
Environmental Activities
Thai Tap Junior Water Prize (TTJWP) Robes Offering Ceremony (THOT KATHIN) Tapasa Foundation or Moonnithi Phradabos
Childrens Day Celebration Dredging of Madua canal (Klong Madua) Contribution for Water Conservative Conference
34
WATER
ENERGY
ENVIRONMENT
35
To inheritance good practice of Thai tradition and culture, TTW group annually oraganize TTWs Kathin ceremony which were participated by its management and employees presenting Kathin robes to scarce temples or which are under renovation. In 2012, TTW group presented the robes to Wat Thamaprasit, Klongkhon sub-district, Samutsakorn province in good cooperation with the communities surrounding the temple.
The companies granted the support to Phradabos School in the southern boarder province for renovation and expansion of the building and surrounding area due to the restoration and annually increase of students causing the insufficiency of school building and dormitory.
36
WATER
ENERGY
ENVIRONMENT
37
38
WATER
ENERGY
ENVIRONMENT
39
General Information
Ticker TTW Registered No. 0107549000114 (The Original No. 1325/2543) Head Office 30/130 Moo 12 Buddhamonthon 5 Road, Tambol Rai Khing, Sam Phran, Nakhon Pathom Province 73210 Business Production and distribution of tap water for the Provincial Waterworks Authority Registered Capital Baht 3,990,000,000 Ordinary Shares 3,990,000,000 shares Par Value Baht 1 per share Paid-up Capital Baht 3,990,000,000 First Trade Date May 22, 2008 Homepage http://www.thaitap.com Contact Head Office Telephone (+662) 811-7526, (+662) 811-7528, (+662) 811-8369, (+662) 811-7685-6, (+662) 811-8100 Facsimile (+662) 420-6064 Office of Managing Director Corporate Governance and Secretary Telephone (+662) 811-7528 Ext. 1106 Investor Relations Telephone (+662) 811-7528 Ext. 1108 e-mail : ir@thaitap.com
Reference
Auditor : Ernst & Young Office Limited 193/136-137, 33rd Floor, Lake Rajada Office Complex, New Rajadapisek Road, Bangkok 10110 Telephone (+662) 264-0777, (+662) 661-9190 Facsimile (+662) 264-0789-90, (+662) 661-9192 The Legists Limited 990 Abdulrahim Place, 9th Floor Rama IV Road, Silom Subdistrict, Bangrak District, Bangkok 10500 Telephone (+662) 636-1111 Facsimile (+662) 636-0000
Legal Counsel :
40
WATER
ENERGY
ENVIRONMENT
41
42
30%
THAI TAP WATER SUPPLY PUBLIC COMPANY LIMITED Registered Capital 3,990 mil.Bt. Paid-up Capital 3,990 mil.Bt.
98%*
PATHUM THANI WATER COMPANY LIMITED Registered Capital 1,200 mil.Bt. Paid-up Capital 1,200 mil.Bt.
Remarks : *2% holding by PWA
32%
68%
THAI TAP WATER SUPPLY PUBLIC COMPANY LIMITED PATHUM THANI WATER COMPANY LIMITED THAI WATER OPERATIONS COMPANY LIMITED C.K. POWER COMPANY LIMITED
THAI WATER OPERATIONS COMPANY LIMITED Registered Capital 60 mil.Bt. Paid-up Capital 60 mil.Bt.
WATER
ENERGY
ENVIRONMENT
43
LIST OF SUBSIDIARIES
44
SHAREHOLDING STRUCTURE
Thai Tap Water Supply Public Company Limited
Shareholding
CH. Karnchang Public Company Limited Mitsui Water Holdings (Thailand) Company Limited Bangkok Expressway Public Company Limited Bangkok Life Assurance Public Company Limited Thai NVDR Company Limited HSBC (SINGAPORE) NOMINEES PTE LTD Bangkok Bank Public Company Limited Mr. Min Tieanworn THE BANK OF NEW YORK (NOMINEES) LIMITED AMERICAN INTERNATIONAL ASSURANCE COMPANY LIMITED-TIGER
Number of Shares
1,198,777,400 1,036,500,000 368,750,000 170,130,700 148,420,065 84,277,657 73,895,000 68,683,000 44,066,924 40,500,000
Shareholding (%)
30.04% 25.98% 9.24% 4.26% 3.72% 2.11% 1.85% 1.72% 1.10% 1.02%
WATER
ENERGY
ENVIRONMENT
45
MANAGEMENT STRUCTURE
Thai Tap Water Supply Public Company Limited
46
MANAGEMENT STRUCTURE
Organization Chart
WATER
ENERGY
ENVIRONMENT
47
totaling at least five persons, but no more than 15 persons, provided that not less than one half of the total number of directors shall be non-executive directors, and at least three persons or one-third of the total number of directors shall be independent directors. The Companys management structure comprises six committees, namely, the Board of Directors, the Executive Committee, the Audit Committee, the Nomination and Remuneration Committee, the Corporate Governance Committee and the Risk Management Committee, as well as the executive management. The Board of Directors has four independent directors who have the following qualifications: The directors shall have such qualifications and have no prohibited characteristics as set forth in the Public Limited Companies Act, with a three-year term of office. The appointment of directors shall be transparent and comply with the Companys Articles of Association as well as the criteria and procedures as established by the Nomination and Remuneration Committee. Names and backgrounds of candidates nominated for appointment as directors shall be submitted through the Nomination and Remuneration Committee and the Board of Directors for consideration to seek approval from the shareholders meeting. The said nomination process shall also allow the minority shareholders to nominate candidates for consideration and selection.
Board of Directors
As at December 31, 2012, the Board of Directors comprises twelve directors as follows: 1. Dr. Thanong Bidaya 2. Mr. Plew Trivisvavet 3. Mr. Techapit Sangsingkeo 4. Mr. Phairuch Mekarporn 5. Mr. Somnuk Chaidejsuriya 6. Mr. Narong Sangsuriya 7. Mr. Prasert Marittanaporn 8. Mr. Ryotaro Sumi 9. Mr. Suvich Pungchareon 10 Dr. Sombat Kitjalaksana 11. Mr. Tomonori Susuki 12. Mr. Sompodh Sripoom Chairman of the Board of Directors and Independent Director Vice-Chairman Independent Director, Chairman of Audit Committee, Chairman of Risk Management Committee and Corporate Governance Committee Independent Director, Chairman of Nomination and Remuneration Committee, Corporate Governance Committee and Audit Committee Independent Director, Chairman of Corporate Governance Committee and Audit Committee Director and Chairman of Executive Committee Director, Nomination and Remuneration Committee and Risk Management Committee Director and Nomination and Remuneration Committee Director and Executive Committee Director and Executive Committee Director, Executive Committee and Risk Management Committee Director, Executive Committee, Risk Management Committee, Corporate Governance Committee and Managing Director
48
The term of office is three years each. At every Annual Ordinary General Meeting, one-third of the total number of directors shall retire, provided that those retiring directors for the first and second years after the Companys incorporation shall be drawn by lots, and for subsequent years, such directors with the longest term of office shall retire. Retiring directors may be re-elected for appointment as directors.
5) Considering approval for budget for investment and budget for the Companys annual business operations, including monitoring the use of the Companys resources. 6) Providing complete, correct and sufficient reports on financial information, data and general information which are important for shareholders, and affirming the certification of the reported information. 7) Arranging for the Company to have an efficient internal control and audit system as well as appropriate and adequate risk management measures, including following up on such matters on a regular basis. 8) Considering clearly determining and separating roles, duties and responsibilities among the Board of Directors, the Executive Committee, subcommittees and the management, with regular communication regarding such roles, duties and responsibilities to the Board of Directors, the Executive Committee, subcommittees, the management and staff of the Company. 9) Supervising the Executive Committee, subcommittees and the management to comply with the specified policies. 10) Considering performance evaluation, determination of salaries, wages, welfare, bonus, allowance and other remuneration, including expenses and facilities of the Managing Director, as well as determining backup plan for nominating personnel to hold major office of the management should the management become unable to perform the duties. 11) Considering revision of the scope of powers, duties, responsibilities and roles of the Executive Committee, subcommittees and the management as appropriate.
Executive Committee
As at December 31, 2012, the Executive Committee comprises five members as follows: 1. Mr. Narong Sangsuriya 2. Mr. Suvich Pungchareon 3. Dr. Sombat Kitjalaksana 4. Mr. Tomonori Susuki 5. Mr. Sompodh Sripoom Chairman of the Executive Committee Member Member Member Member
WATER
ENERGY
ENVIRONMENT
49
Audit Committee
As at December 31, 2012, the Audit Committee comprises three independent directors as follows: 1. Mr. Techapit Sangsingkeo Chairman of the Audit Committee 2. Mr. Somnuk Chaidejsuriya Member 3. Mr. Phairuch Mekarporn Member
1) Reviewing the Companys financial reports to ensure the correctness and adequate disclosure. 2) Reviewing the internal control and internal audit systems of the Company to ensure the suitability and efficiency. 3) Reviewing the Companys operation to ensure its compliance with the laws on securities and exchange, the regulations of the Stock Exchange, or such laws, rules and regulations and policies relating to the business of the Company. 4) Considering the Companys disclosure in respect of related party transactions or such transactions which may give rise to conflict of interest, to ensure the accuracy, completeness and timeliness. 5) Considering, selecting, nominating for appointment and proposing remuneration for the Companys auditor to the Board of Directors for further submission to seek approval of the shareholders. 6) Preparing the Audit Committees corporate governance report to be disclosed in the Companys annual report, whereby such report shall be signed by the Chairman of the Audit Committee. 7) Performing other duties as delegated by the Board of Directors and with approval of the Audit Committee.
50
2) Considering the criteria and procedures for recruiting person qualified to take office as the Managing Director, including nominating and selecting such person in accordance with the specified nomination procedures for submission to the Board of Directors for consideration and appointment. 3) Arranging for Succession Plan for key positions in management or persons eligible to take office of high level executive, with regular review of such Plan. 4) Determining the criteria for consideration of remuneration for directors and the Managing Director. 5) Considering proposing remuneration of directors to the Board of Directors for approval and submission to the shareholders meeting for further consideration and approval. 6) Considering proposing salary and adjustment of salary rate, including other remuneration of the Managing Director to the Board of Directors for consideration and approval. 7) Performing other duties as delegated by the Board of Directors. In 2013, The Company has the policy to appoint an Independent Director in the group of the Nomination and Remuneration Committee. The Committee then has consisted of two Independent Directors, equivalent to fifty percent (50%) of the total committees.
WATER
ENERGY
ENVIRONMENT
51
52
Executive Management
As at December 31, 2012, the Companys Executive Management comprises nine executives as follows: Name Position 1. Mr. Sompodh Sripoom Managing Director 2. Mr. Chutchawan Tienprasertkij Manangement Information System Director 3. Mr. Sompol Krisadasima Business Development Director 4. Mr. Somkiat Accounting and Finance Pattamamongkolchai Director 5. Miss Pathida Chaiyasen Accounting and Finance Director 6. Miss Sudarat Chiamchan Director, Office of Managing Director 7. Mr. Sivar Nagdhary Management Information System Director 8. Mr. Hongthong Artit Acting Customer Service Director 9. Mr. Nattapon Klinhawharn Acting Engineering and Constructions Director
4) Having power to appoint any person or group of persons to operate the business of the Company under the supervision of the Managing Director, or authorizing such person to take actions as the Managing Director deems appropriate, and also having power to change, amend, cancel or revoke such authorization. 5) Having power for adjustment, transfer, closure and merger or expansion of the organization structure at such levels lower than the Divisional Level, as appropriate, as long as the Company still has six divisions and the total number of staff not exceeding 111 persons. 6) Having power to determine salary rates and other remunerations, including expenses and facilities of the Division Directors or equivalent and higher, to seek approval of the Executive Committee. 7) Having power to determine the structure of salary rates and other remunerations of staff at such levels lower than the Division Directors or equivalent, provided that the salary rates (excluding other remunerations and benefits), in both 6) and 7), shall altogether not exceed one percent of the Companys revenue. 8) Having power to employ, appoint, impose disciplinary action, terminate, dismiss, remove, determine salary, bonus, welfare, and other remunerations, including expenses and facilities of the Companys staff who receive salary at the rate (only the salary rate, excluding any other benefits received) of not exceeding Baht 150,000 per month, and/or the Companys staff in such positions lower than the Division Directors or equivalent. Apart from those mentioned, the Managing Director shall seek approval of the Executive Committee. In this regard, the authority to take the following actions may be delegated, either in whole or in part, to workgroups, the Board of Directors, the management, group of persons or any manager, as appropriate. 9) Having duty to supervise all businesses of the Company to ensure compliance with resolutions and policies of the Board of Directors. 10) Having duty to submit balance sheets, financial statements and income statements of the Company to the Board of Directors for approval. 11) Having duty to propose significant issues to the Board of Directors or the shareholders meeting for consideration and approval or for any other purposes as appropriate.
WATER
ENERGY
ENVIRONMENT
53
12) Having duty to conduct feasibility studies on new projects and having power to approve such projects, as delegated by the Executive Committee. 13) In case the Managing Director is unable to perform duties, the Managing Director shall appoint a Division Director or another person to act for and on behalf of the Managing Director from time to time, whereby such person shall have the powers and duties equivalent to the Managing Director. 14) Performing other duties as delegated by the Board of Directors from time to time. However, the Managing Director or the person authorized by the Managing Director has no power to approve any matters or transactions in which the Managing Director or persons who may have conflict, have interest or may have conflict of interest in any other manner, would enter into with the Company or its subsidiaries, as defined by the Securities and Exchange Commission.
4. Shall not have any direct or indirect conflicts of interest against the management of the company and its subsidiaries, and its associated companies for the period of not less than one year prior to nomination except the Board of Director was attentively considered that such conflict of interest not affecting the operation and have independent decisionmaking of Independent directors; 5. Shall not be a director who has been appointed as representative of the companys director, major shareholder or shareholders who are related to the major shareholder; 6. Shall be independently perform the duties and give the opinion or report on the result of duties as assigned by the Board of Directors, uncontrolled by the management or major shareholders and related person or relative of such person; 7. Shall be able to attend meetings of the Board of Directors and make independent judgment; 8. Shall not operate any business which has the same nature as and is in significant competition with the business of the company or it subsidiaries, or not being a principal partner in any partnership, or not be an executive director, employee, staff, or advisor regularly earing the salaries; or holding shares not exceeding one percent of the total number of voting right of any other company operating business which has the same as and is in significant competition with the business of the company or its subsidiaries; 9. Shall not have any characteristics which make him/her incapable of expressing independent opinion with regard to the companys business affairs; 10. Shall be able to look after the interests of all shareholders equally; 11. Shall be able to prevent conflicts of interest; 12. Shall not have been convicted of violating security or stock exchange laws, financial institution laws, life insurance laws, general insurance laws, anti-money laundering laws or any other financial law of a similar nature, whether Thai or foreign, by an agency with authority under that certain law. Such wrongful acts include those involved with unfair trading in shares or perpetration of deception, fraud, or corruption;
54
1. Dr.Thanong Bidaya 2. Mr. Plew Trivisvavet 3. Mr. Narong Sangsuriya 4. Mr. Prasert Marittanaporn 5. Dr. Sombat Kitjalaksana 6. Mr. Sompodh Sripoom 7. Mr. Jun Aketa * 8. Mr. Ryotaro Sumi ** 9. Mr. Tomonori Susuzi 10. Mr. Techapit Sangsingkeo 11. Mr. Phairuch Mekarporn 12. Mr. Somnuk Chaidejsuriya 13. Mr. Suvich Pungchareon Note:
1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1 1/1
5/5 4/5 5/5 5/5 4/5 5/5 1/4 0/1 5/5 5/5 5/5 4/5 5/5
4/4 4/4
4/4 4/4
* Mr. Jun Aketa resigned on 14 November 2012 ** Mr. Ryotaro Sumi was appointed on 15 November 2012
WATER
ENERGY
ENVIRONMENT
55
56
DIVIDEND POLICY
Dividend
(Unit : Baht/Share)
2012
2011
2010
2009
2008
To maintain a consistent dividend payment, and the benefit of the shareholders, the Company has set dividend payment policy as follow: The Company will priorities the financial needs for the next five years and the maintenance of the appropriate level of the debt-equity ratio. In case of considering that it is possible to pay dividend, the Company will consider paying dividend to the shareholders as the highest rate as its available cash and cash flow allow. However, such rate shall not be less than 50% of its net profit after corporate income tax, statutory reserve, and other reserves required by terms of relevant agreements.
(unit : Baht/Share)
2012 (First Half) 2011 2010 2009 2008
Dividend
0.22
0.40
0.35
0.28
0.20
WATER
ENERGY
ENVIRONMENT
57
RISK FACTORS
The Company has recognized the importance of the risk management on business operation. The risk management plays a key role in all of our business processes. Accordingly, the management is responsible for revising risks and risk management plans. Changing environments affecting the Companys operation are taken into consideration. To closely control risks, the management also monitors operating performance according to the risk management plans and report to the Risk Management Committee quarterly.
In 2012, the Company had two significant risks as stipulated in the organization risk list as follows:
58
1. Risk concerning current tap water business 1.1 New tap water producers selling water in distribution areas of the Company The demand on tap water is estimated to increase approximately 10 million cubic meters. It is divided into the growth of the east of Tachin River, of approximately 8 million cubic meters supplied by Banglen Water Treatment Plant and the growth of the west Tachin River, of approximately 2 million cubic meters supplied by Photharam Water Filling Plant. Such growth has no affect on the Companys water supply growth to main distribution areas. However, Nakhon Samutsakhon Municipality is constructing its water treatment plant, a capacity of 48,000 cubic meters per day at Ban Paew District, Samutsakhon Province. The construction will finish in the second quarter of 2013. Provincial Waterworks Authority will lose distribution areas in Nakhon Samutsakhon Municipality, of approximately 2 million cubic meters per annum. To reduce an effect of Nakhon Samutsakhon Municipalitys water treatment plant, the Company will directly distribute water from our water distribution station to Nakhon Samutsakhon Municipality. The Company will gain benefit from 1) selling water reserve if Nakhon Samutsakhon Municipalitys water treatment plant fails to produce water from time to time; and 2) increasing water supply to Nakhon Samutsakhon Municipality, especially industrial customers located in Nakhon Samutsakhon Municipality.
1.3 Change in water charges for private-serviced areas by Provincial Waterworks Authority After Provincial Waterworks Authority increased water charges since August 2011, such change has no effect on the quantity of water sold of the Company. The demand of the 50 largest customers continues to increase. Customers of industrial sectors have high demand on water which is a key component of production process due to poor quality of groundwater. 1.4 Waste water treatment technology Presently, several entrepreneurs are interested in water treatment and quality adjustment technologies. Used water is recycled to reduce water quantity and production cost. The Company has revised costs of recycling used water and monitored a membrane technology in Thailand. Potential use of a membrane technology by large customers has been closely monitored. 1.5 Insufficient quality and quantity of raw water The Company has in place a monitoring process on the quantity of raw water at dams and water gates. Information of raw water quality is kept and raw water quality is checked before production process. Insecticide contamination has been checked as well. Further than by an internal laboratory, water quality is tested by an external laboratory. 1.6 Lack of production factors due to natural disasters The Company makes annual chemical purchase agreements. Key chemical substances used in production process are alum and chlorine. The same prices are offered to the Company and subsidiaries. In addition, other supplies are put in place in case of necessary.
1.2 Change in public policies regarding groundwater The Company has studied a long-term demand on tap water and collected information of enterprise users using both systems. The study covers an effect of decreased water demand or of proportion of water demand and ground water demand in case of reduction or cancellation of ground water conservation fee from 8.50 Baht per cubic meter to 4.50 Baht per cubic meter which came into force on 1 October 2012. The Company has been monitoring use of water from both sources whether the proportion of water demand and ground water demand changes. However, the proportion remains unchanged.
WATER
ENERGY
ENVIRONMENT
59
1.7 Agreement termination or condition change The Company has maintained standards of water production to ensure quality, cleanliness and sufficiency, including consistent water pressure in line with standards as set in agreements. Agreements, made by and between the Company and Provincial Waterworks Authority, are set clearly and comprehensively in line with legal process. The Company has channels to communicate such agreements to external organizations. In a long term, the Company has planed to study and expand a second water filing plant to match with the water demand. The second water filing plant will be located in an area with high demand to save operating costs and unit costs, including selling prices. 2. Risks concerning new business (other businesses than tap water business) 2.1 Insufficient capability of personnel The Company has established a personnel development framework in line with our directions. As a personnel development tool, the Individual Development Plan (IDP) has been applied. Personnel development goals have been set. To achieve operational goals, the Company has class trainings and other development methods such as project assignment, job enrichment and consultancy, etc. 2.2 Incorrect selection of business partners To select business partners, the company will study their background and past performance, including their capabilities and ownership on key operating factors. Business partners should have qualifications as set. The Company sets communication channels to meet with business partners to ensure mutual understanding and collaboration, as well as to evaluate work relationship and operating culture. Accordingly, the Company has developed criteria on business partner selection more clearly. The criteria are based on international selection processes, past experiences and current market conditions.
2.3 Lack of resource and other key factors To submit project proposal, the Company has studied and gathered information on related businesses and technologies, cost and feasibility so that the Company will have adequate information for business operation. In addition to the key risks listed, the Company will take into consideration potential events, not limited to damages. Related factors identifying the Companys risks under changing circumstances will be considered. To achieve objectives reasonably and effectively, the risk management process will be designed to identify potential events affecting the organization; and to manage such risk within an acceptance level.
60
INTERNAL AUDIT
The Board of Directors gives priority to the establishment of the internal audit system Control Risk and internal auditing. Environment Assessment The Board of Directors has assigned the Audit Committee, a total of 3 members, to supervise the Companys internal audit. This aims to ensure the efficiency, transparency, accuracy, reliability The Board of Directors plays an important To ensure efficiency of the internal audit and compliance with the good role in setting clear visions, missions, system, the Company has determined corporate governance policies and strategic plans as guidelines risk management officers to provide
The key principles and main points of evaluating the internal audit system cover 5 controls as follows. for the operations of the management and employees. Operating performance has been regularly reviewed to achieve the Companys goals. information and risk reports to the Risk Management Committee and the Board of Directors. Changing environmental factors are taken into consideration. Accordingly, the Company has prepared organization risk levels comprising risk factors, risk controls and risk management plans. The details are mentioned in Risk Factor.
WATER
ENERGY
ENVIRONMENT
61
3
Control
4
Informationand Communication
5
Monitoring and Evaluation
The company has clearly set scopes of authorities and responsibilities of each function. Four sub-committees have been established i.e. the Audit Committee, the Corporate Governance Committee, the Risk Management Committee and the Nomination and Remuneration Committee. The sub-committees work efficiently to ensure check and balance. Separately from the management, the Audit Committee has set internal audit plans independently, and monitored performance of each function. The Audit Committee also provides advices to ensure sufficient and efficient internal control in line with the good internal control principles. Accordingly, the Company has supervised operations and performances in compliance with related laws, rules and regulations.
The Company has continued to develop an information system and an internal database system. Employees are able to use such systems as communication channels and to access operating information. In the same time, information is published on the Companys website so shareholders and investors are able to easily access the Companys information all the time. In addition, the Company discloses information on the Stock Exchange of Thailands system, holds analyst meetings in every 6 months as well as holds press conferences.
The Company has been monitoring operating performance as stipulated in annual operating plans continuously. Reports on operating progress are proposed to the Executive Board and, then, to Board of Directors meetings quarterly.
The Company has comprehensively emphasized on the internal audit. With regard to setting audit plans, information of risk assessment and financial statement analysis are taken into consideration. The sufficiency and effectiveness of the internal audit system have been focused. In addition, the Company has in place monitoring systems based on quality and environmental monitoring systems of international standards i.e. ISO 9001 : 2008 and ISO 14001 : 2004.
62
WATER
ENERGY
ENVIRONMENT
63
Previous Experience Minister of Finance Minister of Commerce Chairman National Economic and Social Development Board (NESDB) Chairman Thai Airways International Public Company Limited President TMB Bank Public Company Limited Seminar and Training 2004 Directors Accreditation Program (DAP) 25/2004 Thai Institute of Directors Association
Xayaburi Power Company Limited King Mongkuts Institute of Technology Ladkrabang Chairman of the Board of Directors Chairman of Executive Committee Chairman of Nomination and Remuneration Committee Bangkok Metro Public Company Limited Chairman of Executive Bangkok Expressway Public Company Committee Limited President and Chief CH. Karnchang Public Company Limited Executive Officer Previous Experience Chairman CK Power Company Limited Chairman of the Board of Directors Thai Tap Water Supply Public Company Limited Seminar and Training 2007 Senior Executive Program, 4/2007 Capital Market Academy 2004 Director Certificate Program (DCP) 50/2004 Thai Institute of Directors Association 1993 Diploma 366/2007 National Defence College
64
Positions in the Company Director Chairman of Executive Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director CK Power Company Limited Director Bangpa-in Cogeneration Limited Director Nam Ngum 2 Power Company Limited Executive Director Director Southeast Asia Energy Limited Director CH. Karnchang Public Company Limited Executive Director Nomination and Remuneration Committee Senior Executive Vice President - Operations Group Previous Experience Deputy Project Manager Thai-Obayashi Corporation Project Manager Bang-On Construction Company Limited Seminar and Training 2005 Directors Certification Program (DCP) 54/2005 Thai Institute of Directors Association
WATER
ENERGY
ENVIRONMENT
65
Previous Experience Managing Director Siam Kraft Industry Company Limited Managing Director Thai Kraft Paper Industry Company Limited Managing Director TIP Fibre-Cement Company Limited Seminar and Training 2007 Audit Committee Program (ACP) 17/2007 2006 Directors Certification Program (DCP) 81/2006 Thai Institute of Directors Association 1995 Advanced Management Program : The International Senior Managers Program Harvard University, Graduate School of Business Administration, U.S.A
66
Positions in the Company Director Risk Management Committee Nomination and Remuneration Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Director Director and Senior Executive Vice President Administration Group CK Power Company Limited Nam Ngum 2 Power Company Limited Southeast Asia Energy Limited Southeast Asia Energy Limited CH. Karnchang Public Company Limited
Positions in the Company Director Executive Committee Thai Tap Water Supply Public Company Limited Other Current Positions Advisor Bangkok Expressway Public Company Limited
Previous Experience Accountant Pan Asia (1981) Company Limited Assistant Auditor Chaiyos Office Company Limited Seminar and Training 2005 Directors Certification Program (DCP) 54/2005 Thai Institute of Directors Association
Previous Experience Managing Director Bangkok Expressway Public Company Limited Managing Director Northern Bangkok Expressway Company Limited General Manager Bangkok Expressway Public Company Limited Thai Industrial Forging & Siam Nawaloha Foundry The Siam Cement Public Company Limited Seminar and Training 2004 Politics and Governance in Democratic Systems for Executives Course Class 8/2004 King Prajadhipok Institute 2003 Management of Public Economy for Executives Course Class 1/2003 King Prajadhipok Institute 2003 Director Certification Program (DCP) 37/2003 Thai Institute of Directors Association 1984 Mini MBA, Berkeley University, U.S.A.
WATER
ENERGY
ENVIRONMENT
67
Positions in the Company Director Executive Committee Thai Tap Water Supply Public Company Limited Other Current Positions Director Bangkok Metro Network Company Limited Bangkok Metro Public Company Limited
Director Vice Chairman of the Executive Committee Director CH.Karnchang Public Company Limited
Previous Experience Managing Director Bangkok Metro Public Company Limited Director Pathum Thani Water Company Limited Senior Director (Business Foreign Section) CH. Karnchang Public Company Limited Head of Division (Construction Standard) The Electricity Generating Authority of Thailand Seminar and Training 2006 Directors Certification Program (DCP) 81/2006 2005 Directors Accreditation Program (DAP) 36/2005 Thai Institute of Directors Association
Previous Experience SVP & Divisional Operating Officer, Infrastructure Projects Business Division Asia Pacific Business Unit, Mitsui & Co (Asia Pacific) PTE. Ltd. (Singapore) Project Director Second Power Project Development Div., Infrastructure Projects Business Unit Project Director First Projects Development Div. Infrastructure Projects Business Unit Director Mitsui Brasilaira IMP. E exp. S.a (Brasil) Seminar and Training -
68
Positions in the Company Director Executive Committee Corporate Governance Committee Risk Management Committee Managing Director Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Managing Director CK Power Company Limited Thai Water Operations Company Limited Pathum Thani Water Company Limited
Previous Experience Advisor Bangkok Metro Public Company Limited Deputy Managing Director Bangkok Metro Company Limited Seminar and Training 2011 Building New Business in Established Organizations, U.S.A 2006 Directors Certification Program (DCP) 73/2006 Thai Institute of Directors Association
WATER
ENERGY
ENVIRONMENT
69
MANAGEMENT
As at December 31, 2012, the Companys management comprises nine executives as follows:
70
Positions in the Company Management Information System Director Thai Tap Water Supply Public Company Limited Previous Experience Marketing Director Thai Tap Water Supply Public Company Limited Senior Business Development Manager Operation Support Manager Bangkok Metro Company Limited Management information Manager CKET Blue Line Project Manager IT department Manager Siam Kayaba Company Limited Seminar and Training 2011 what does it take to be an MD of a listed company?
Positions in the Company Director Executive Committee Corporate Governance Committee Risk Management Committee Managing Director Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Managing Director CK Power Company Limited Thai Water Operations Company Limited Pathum Thani Water Company Limited
Previous Experience Advisor Bangkok Metro Public Company Limited Deputy Managing Director Bangkok Metro Company Limited Seminar and Training 2011 Building New Business in Established Organizations, U.S.A 2006 Directors Certification Program (DCP) 73/2006 Thai Institute of Directors Association
WATER
ENERGY
ENVIRONMENT
71
Positions in the Company Business Development Director Thai Tap Water Supply Public Company Limited Previous Experience Director, Managing Director Thai Water Operations Company Limited Managing Director BJT Water Company Limited Director of Operations and Business Development Department Pathum Thani Water Company Limited Seminar and Training 2011 What does it take to be an MD of a listed company? 2008 Directors Certification Program (DCP) 110/2008 Thai Institute of Directors Association
Positions in the Company Investment Analysis Director Thai Tap Water Supply Public Company Limited Previous Experience Management Information System Director Thai Tap Water Supply Public Company Limited Executive Vice President, Funding Finance and Securities Group Apex Development Public Company Limited Executive Vice President, Finance & MIS Suntech Group Public Company Limited Seminar and Training 2011 What does it take to be an MD of a listed company? 2006 Directors Certification Program (DCP) 73/2006 Thai Institute of Directors Association
72
Positions in the Company Accounting and Finance Director Thai Tap Water Supply Public Company Limited Other Current Positions Director Director Director Bangkhenchai Company Limited Thai Water Operations Company Limited Pathum Thani Water Company Limited
Previous Experience Director CK Power Company Limited Assistant Audit Manager Ernst & Young Office Limited Seminar and Training 2011 What does it take to be an MD of a listed company? 2009 Directors Certification Program (DCP) 121/2009 Thai Institute of Directors Association 2009 Directors Accreditation Program (DAP) 79/2009 Thai Institute of Directors Association
Previous Experience Human Resource Manager Bangkok Microbus Company Limited Senior Human Resource Officer Thanachart Capital Company Limited Seminar and Training 2011 What does it take to be an MD of a listed company?
WATER
ENERGY
ENVIRONMENT
73
Positions in the Company Engineering and Construction Director Thai Tap Water Supply Public Company Limited Previous Experience Project Operation Department Manager Thai Water Operations Company Limited Maintenance Chief Water Flow Company Limited Project Manager Tyco Earth Tech (Thailand) Company Limited Seminar and Training -
Previous Experience Accounting and Finance Manager Pathum Thani Water Company Limited Accounting and Finance Manager Index International Group Company Limited Seminar and Training 2012 Effective Minutes Taking (EMT) 24/2012 2011 What does it take to be an MD of a listed company? 2011 Company Secretary Program (CSP) 43/2011 2011 Company Reporting Program (CRP) 2/2011 Thai Institute of Directors Association
74
Positions in the Company Customer Service Director Thai Tap Water Supply Public Company Limited Previous Experience Operation Department Manager Pathum Thani Water Company Limited Engineering and Construction chief Thai Tap Water Supply Public Company Limited Pipeline Site Manager Joint Venture TWCK Engineering Manager Thai Crane International Company Limited / SVS Consultant Seminar and Training -
WATER
ENERGY
ENVIRONMENT
75
76
The 2012 Annual Ordinary General Meeting held on 16 March 2012 passed resolution to approve of Directors Remuneration for the year 2012 in the amount of 6,436,500 Baht and Bonus for the 2011 in the amount of 12,129,600 Baht. Rule and Determination of Remuneration procedure details as follow : 1. The remuneration shall be proper and sufficient to persuade and retain qualified directors as required, in avoidance of unreasonably high payments. 2. The remuneration shall comprise three portions as follows a. Retainer Fee shall be taken into account the results of operation and the ability to meet the target. b. Meeting Allowance shall be paid to directors who attend the meeting. c. Bonus shall be paid to the directors once a year, based on value generated to the shareholders, such as, profits of the Company or dividend paid to the shareholders.
472,000
119,000
591,000
1,129,058 1,720,058
6 7 8
987,550
1,490,300
WATER
ENERGY
ENVIRONMENT
77
No. 9
Position Director, Executive Committee and Risk Management Committee Director and Executive Committee Director and Executive Committee Director and Nomination and Remuneration Committee Director and Nomination and Remuneration Committee Director and Nomination and Remuneration Committee
Remu- Meeting neration Allowance 389,000 330,000 330,000 28,125 226,375 99,000 63,000 84,000 7,375 43,875 -
10 Dr. Sombat Kitjalaksana 11 Mr. Suvich Pungchareon 12 Mr. Ryotaro Sumi 13 Mr. Jun Aketa 14 Mr. Koichi Wakana
Total
Remarks Mr. Koichi Wakana resigned on 30 July 2011 Mr. Jun Aketa was appointed on 31 July 2011 and resigned on 14 November 2012 Mr. Ryotaro Sumi was appointed on 15 November 2012
78
Other Compensation
TTW has instituted employee welfare and other compensation apart from salary, bonus and provident fund contribution for management and all employees to reflect domestic economic conditions, cost of living, and other standard for peer companies.
WATER
ENERGY
ENVIRONMENT
79
RELATED TRANSACTIONS
In order to undertake related transactions correctly and in accordance with good governance principles between TTW, its groups of companies and related parties, the company has a policy to disclose sufficient information to investors, shareholders and to abide by the rules and regulations of the Securities Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). Moreover, every related transactions between the company, its subsidiaries and related parties were examined scrupulously by the Audit Committee to ensureno conflict of interest. For the fiscal yearsas of December 31, 2012 and 2011, the company disclosed information regarding related transactions in the notes of the financial statements which inspected by the auditor of the company. The following list provides detailed information on related transactions in 2012. Value of related transactions for the year ended 31 December 2012 (Million Baht) Consolidated Separate financial financial statement statement 224
Related Companies
Relationship
Major shareholder (30.04% holding by TTW) Joint Director with TTW : 1. Mr. Plew Trivisvavet 2. Mr. Narong Sangsuriya 3. Mr. Prasert Marittanaporn CK pay expense to TTW for any service.
80
Related Companies
Relationship
2. Bangkok Expressway Public Company Limited (BECL) 3. Pathum Thani Water Company Limited (PTW)
Major shareholder (9.24% holding by TTW) Joint Director with TTW is Mr. Plew Trivisvavet BECL pay expense to TTW for any service. Subsidiaries companies (98% holding by TTW) Joint Director with TTW : 1. Mr. Phairuch Mekarporn 2. Mr. Techapit Sangsingkeo Director of TTW who take the position in PTW : 1. Mr. Sompodh Sripoom 2. Mr. Somkiat Pattamamongkolchai PTW pay expense to TTW for any service. Subsidiaries companies (68.50% holding by TTW) Director of TTW who take the position in TWO : 1. Mr. Sompodh Sripoom 2. Mr. Somkiat Pattamamongkolchai TWO pay expense to TTW for any service. Associated companies (30% holding by TTW) Joint Director with TTW : 1. Dr. Thanong Bidaya 2. Mr. Plew Trivisvavet 3. Mr. Narong Sangsuriya 4. Mr. Prasert Marittanaporn 5. Mr. Techapit Sangsingkeo Director of TTW who take the position in CKP is Mr. Sompodh Sripoom
Value of related transactions for the year ended 31 December 2012 (Million Baht) Consolidated Separate financial financial statement statement 3 3
Dividend income Interest income Long-term loans to related party accrued interest
Cost of sales and service Rental income Trade payable related parties Retention - subsidiary
Investment in associate
2,730,000
2,730,000
WATER
ENERGY
ENVIRONMENT
81
The Board of Directors is responsible for the financial statements of Thai Tap Water Supply Company Limited and subsidiaries. The Board of Directors observes the provisions of the Public Limited Companies Act B.E. 2535 (1992), the Accounting Act B.E. 2543 (2000), the Securities and Exchange Act B.E. 2535 (1992) and notifications of the Securities and Exchange Commission on regulations, conditions and methods to disclose financial status and performance of companies issuing securities. The company prepares the financial statements to disclose financial status, performance and cash flow accurately, reasonably and transparently, to benefit to shareholders and general investors. In this regard, the Board of Directors has supervised and developed the good corporate governance. The risk management and internal audit system have been established and maintained to ensure accurate and comprehensive financial records on a timely basis to maintain assets and prevent fraud or significantly unusual operation. To ensure the efficiency and effectiveness, the Board of Directors has appointed the Audit Committee comprising independent directors to supervise the financial statements as well as assess internal control and internal audit. The opinions of the Audit Committee are presented in the Audit Committee Report Section of the Annual Report.
The Board of Directors believes that, with the internal control system and internal audit of the Company, the financial statements of Thai Tap Water Supply Company Limited and subsidiaries present fairly, in all material respects, the financial position, the performance and the cash flow. In addition, significant information is sufficiently disclosed in the notes to financial statements. Accordingly, Ernst & Young Office Ltd., as the Companys auditor, audited and examined the aforementioned financial statements and gave opinions without condition.
(Sompodh Sripoom)
Managing Director
82
To the Shareholders of Thai Tap Water Supply Public Company Limited I have audited the accompanying consolidated financial statements of Thai Tap Water Supply Public Company Limited and its subsidiaries, which comprise the consolidated statement of financial position as at 31 December 2012, and the related consolidated statements of comprehensive income, changes in shareholders equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information, and have also audited the separate financial statements of Thai Tap Water Supply Public Company Limited for the same period. Managements Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with Thai Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with Thai Standards on Auditing. Those standards require that I comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors 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 entitys 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 entitys 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 financial statements referred to above present fairly, in all material respects, the financial position of Thai Tap Water Supply Public Company Limited and its subsidiaries and of Thai Tap Water Supply Public Company Limited as at 31 December 2012, and their financial performance and cash flows for the year then ended, in accordance with Thai Financial Reporting Standards.
Khitsada Lerdwana
Certified Public Accountant (Thailand) No. 4958 Ernst & Young Office Limited Bangkok: 30 January 2013
WATER
ENERGY
ENVIRONMENT
83
FINANCIAL STATEMENTS
Thai Tap Water Supply Public Company Limited
84
7 8 6, 9 6 11
2,676,865,367 3,096,567,482 452,063,407 23,643,137 57,362,109 6,306,501,502 200,000,000 2,771,312,856 8,869,866,014 3,088,456,680
2,098,390,696 3,096,567,482 295,968,223 311,163,219 15,007,441 49,046,961 5,866,144,022 1,782,500,000 3,466,752,588 2,766,100,000 8,800,099,977 -
1,405,182,127 2,965,962,319 290,594,552 310,681,575 15,562,833 38,704,463 5,026,687,869 2,092,500,000 3,688,853,569 36,100,000 9,161,560,146 -
10 6 12 13 14 15 16 17 18
1,304,160,808 1,333,829,201 1,304,160,808 1,333,829,201 2,104,305,081 2,299,299,214 11,346,387 13,009,775 14,443,749 22,951,997 8,493,321 8,672,654 18,363,891,575 16,293,350,801 18,128,106,694 16,321,515,570 24,670,393,077 21,728,298,911 23,994,250,716 21,348,203,439
WATER
ENERGY
ENVIRONMENT
85
6,19 20 21
110,122,682 490,000,000 159,374,662 139,717,275 82,844,671 982,059,290 5,940,000,000 6,990,471,485 14,780,026 12,945,251,511 13,927,310,801
91,035,029
112,380,651 76,390,390 4,358,354,923 3,670,000,000 3,496,207,735 12,065,745 7,178,273,480 11,536,628,403
6 20 21 22
5,000,000
5,940,000,000 6,990,471,485 6,577,096 12,942,048,581
5,000,000
3,670,000,000 3,496,207,735 4,998,922 7,176,206,657
13,791,978,752 11,394,625,903
86
(600,362,866) (600,362,866) 10,707,233,516 10,161,212,803 10,202,271,964 9,953,577,536 35,848,760 30,457,705 10,743,082,276 10,191,670,508 10,202,271,964 9,953,577,536 24,670,393,077 21,728,298,911 23,994,250,716 21,348,203,439
WATER
ENERGY
ENVIRONMENT
87
27 12 26
12 16 17
13
26, 27
0.53
0.52
88
WATER
ENERGY
ENVIRONMENT
89
Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012 (Unit: Baht)
Consolidated financial statements Equity attributable to the parents shareholders Retained earnings
Issued and Appropriated paid-up Share statutory Appropriated share capital premium reserve other reserve 3,990,000,000 2,637,769,601 399,000,000 320,984,674 Unappropriated 2,697,352,562 (1,396,500,000) 2,112,968,832 (195,875,116) 3,217,946,278 (600,362,866) 2,637,769,601 2,637,769,601 399,000,000 2,637,769,601 206,268,496 723,128,286 399,000,000 516,859,790 3,217,946,278 - (1,875,300,000) - 2,421,320,713 (206,268,496) 3,557,698,495 399,000,000 516,859,790 195,875,116 10,161,212,803 (600,362,866) 10,161,212,803 - (1,875,300,000) - 2,421,320,713 (600,362,866) 10,707,233,516
Equity Total attributable to equity non-controlling attributable to interests owners of of the the Company subsidiaries 9,444,743,971 29,593,394 (1,396,500,000) 2,112,968,832 11,652,311 (10,788,000) 30,457,705
Total shareholders equity 9,474,337,365 (1,396,500,000) 2,124,621,143 (10,788,000) 10,191,670,508 30,457,705 10,191,670,508 - (1,875,300,000) 17,771,055 2,439,091,768 (12,380,000) 35,848,760 (12,380,000) 10,743,082,276 -
Balance as at 1 January 2011 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Decrease in non-controlling interests of the subsidiary from dividend payment Balance as at 31 December 2011
3,990,000,000
3,990,000,000 -
Balance as at 1 January 2012 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Decrease in non-controlling interests of the subsidiary from dividend payment of the subsidiary Balance as at 31 December 2012
3,990,000,000
WATER
Thai Tap Water Supply Public Company Limited and its subsidiaries For the year ended 31 December 2012
ENERGY ENVIRONMENT
Balance as at 1 January 2011 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Balance as at 31 December 2011
Balance as at 1 January 2012 Dividend paid (Note 31) Total comprehensive income for the year Unappropriated retained earnings transferred to other reserve (Note 24) Balance as at 31 December 2012
91
92
1. Corporate information
Thai Tap Water Supply Public Company Limited (the Company) was incorporated as a limited company under the Civil and Commercial Code on 11 September 2000 and registered the change of its status to a public company limited under the Public Limited Companies Act B.E. 2535 on 6 July 2006. The Company operates in Thailand and its major shareholder is CH. Karnchang Public Company Limited, which was also incorporated in Thailand. The Company is principally engaged in the production and sale of treated water to the Provincial Waterworks Authority (PWA) in the Amphur Nakorn Chaisri, Amphur Sam Pran, and Amphur Budha Monthon areas of Nakhon Pathom and the Amphur Muang and Amphur Kratumban areas of Samut Sakhon, under the Water Purchase Agreement made with the PWA dated 21 September 2000 (An amendment agreement dated 29 December 2008), which covers a period of 30 years as from the Actual Commencement Date (21 July 2004), and under the Concession to operate treated water granted by the Ministry of Natural Resources and Environment (the Concessionaire) for a period of 25 years commencing on 11 March 2005. The Company has to comply with certain conditions as stipulated in the Water Purchase Agreement and the Concession. The terms of the Concession include certain significant conditions, such as that when the Company has completed half of the concession period, if the government or the local government agency wish to purchase the water production business of the Company, the Concessionaire is entitled to cancel the concession in order to purchase it, or permit the relevant local government agency to purchase it, at market price. However, it must provide the Company with advance notice of six months of such action. The Companys registered address is 30/130 Moo 12, Budha Monthon 5 Road, RaiKhing, Sam Pran, Nakhon Pathom.
2. Basis of preparation
2.1 The financial statements have been prepared in accordance with accounting standards enunciated under the Accounting Profession Act B.E. 2547 and their presentation has been made in compliance with the stipulations of the Notification of the Department of Business Development dated 28 September 2011, issued under the Accounting Act B.E. 2543. The financial statements in Thai language are the official statutory financial statements of the Company. The financial statements in English language have been translated from the Thai language financial statements. The financial statements have been prepared on a historical cost basis except where otherwise disclosed in the accounting policies. 2.2 Basis of consolidation a) The consolidated financial statements include the financial statements of Thai Tap Water Supply Public Company Limited (the Company) and the following subsidiary companies (the subsidiaries):
WATER
ENERGY
ENVIRONMENT
93
Nature of business
Production and sale of treated water in Pathumthani Thai Water Operations Company Limited Operating and maintenance of (31.5 percent held by Pathum Thani Water water supply project Company Limited)
b) Subsidiaries are fully consolidated, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. c) The financial statements of the subsidiaries are prepared using the same significant accounting policies as the Company. d) Material balances and transactions between the Company and its subsidiary companies have been eliminated from the consolidated financial statements. e) Non-controlling interests represent the portion of profit or loss and net assets of the subsidiaries that are not held by the Company and are presented separately in the consolidated profit or loss and within equity in the consolidated statement of financial position. 2.3 The separate financial statements, which present investments in subsidiaries and associate under the cost method, have been prepared solely for the benefit of the public.
3. New accounting standards issued during the years not yet effective
The Federation of Accounting Professions issued the following new/revised accounting standards that are effective for fiscal years beginning on or after 1 January 2013. Accounting standards: TAS 12 TAS 20 (revised 2009) TAS 21 (revised 2009) Financial Reporting Standard: TFRS 8 SIC 10 SIC 21 SIC 25 Operating Segments Government Assistance - No Specific Relation to Operating Activities Income Taxes - Recovery of Revalued Non-Depreciable Assets Income Taxes - Changes in the Tax Status of an Entity or its Shareholders Accounting Standard Interpretations: Income Taxes Accounting for Government Grants and Disclosure of Government Assistance The Effects of Changes in Foreign Exchange Rates
The Companys management believes that these accounting standards will not have any significant impact on the financial
94
statements for the year when they are initially applied, except for the following accounting standards. TAS 12 Income Taxes This accounting standard requires an entity to identify temporary differences, which are differences between the carrying amount of an asset or liability in the accounting records and its tax base, and to recognize deferred tax assets and liabilities under the stipulated guidelines. The effect of the adoption to the financial statements of the Company and its subsidiary will be to decrease profit for the year 2012 by Baht 81 million (0.0203 Baht per share) and increase brought-forward retained earnings of the year 2012 by Baht 1 million (0.0003 Baht per share) (separate financial statements: decrease profit for the year 2012 by Baht 80 million (0.0202 Baht per share) and increase brought-forward retained earnings of the year 2012 by Baht 17 million (0.0042 Baht per share)). In addition, the Federation of Accounting Professions has issued Notification No. 30/2555 - 34/2555, published in the Royal Gazette on 17 January 2013, mandating the use of accounting treatment guidance and accounting standard interpretations as follows. Effective date Accounting Treatment Guidance for Transfers of Financial Assets Accounting Standard Interpretation: SIC 29 TFRIC 4 TFRIC 12 TFRIC 13 Service Concession Arrangements: Disclosures Determining whether an Arrangement contains a Lease Service Concession Arrangements Customer Loyalty Programmes 1 January 2014 1 January 2014 1 January 2014 1 January 2014 Financial Reporting Standard Interpretations: 1 January 2013
The management of the Company is evaluating the first-year impact to the financial statements of the accounting treatment guidance and accounting standard interpretations and has yet to reach a conclusion.
WATER
ENERGY
ENVIRONMENT
95
Cash and cash equivalents consist of cash in hand and at banks, and all highly liquid investments with an original maturity of three months or less and not subject to withdrawal restrictions.
4.3 Trade accounts receivable Trade accounts receivable are stated at the net realisable 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 experience and analysis of debt aging. 4.4 Raw materials and supplies Raw materials and supplies are valued at the lower of cost (first - in, first - out method) and net realisable value and are charged to treated water production costs whenever consumed. 4.5 Investments a) Investments in securities held for trading are stated at fair value. Changes in the fair value of these securities are recorded in profit or loss. b) Investment in associate is accounted for in the consolidated financial statements using the equity method. c) Investment in associate is accounted for in the separate financial statements using the cost method. The fair value of marketable securities is based on the latest bid price of the last working day of the year. The fair value of debt instruments is determined based on yield rates quoted by the Thai Bond Market Association. The fair value of unit trusts is determined from their net asset value.
4.6 Investments in subsidiaries Investments in subsidiaries are accounted for in the separate financial statements using the cost method. Investment costs of subsidiaries are the values paid for their acquisition. The subsidiary is engaged in business under the agreement for the production and sale of treated water with the Provincial Waterworks Authority and concessions granted by state enterprises or government agencies, which have defined fixed periods of operation, as stipulated in the agreement and concessions; and the subsidiary has committed to transfer most of its assets used in the operation to the Provincial Waterworks Authority. Hence, parts of the investment cost are deemed to be investments in the acquisition of rights to operate business under the agreement and concessions, and are amortised on a straight-line basis over the remaining periods of the agreements, commencing from the date of investment in the subsidiary. This amortised amount is presented as amortisation of investments in subsidiary, and recognised as an expense in profit or loss. In addition, parts of the investment cost in the subsidiary to which the Company transferred most of its operations after investment, in order to reduce future operating costs, was amounts paid for acquisition of such operations. These are amortised on a straight-line basis over the remaining period of the Water Purchase Agreement made between the Company and the Provincial Waterworks Authority, commencing from the date of investing in the subsidiary, and presented as amortisation of investments in subsidiary. The amortised amount is recognised as expense in profit or loss.
96
4.7 Property, plant and equipment/Depreciation Land is stated at cost. Building and equipment are stated at cost less accumulated depreciation and allowance for loss on impairment of assets (if any). Depreciation for assets is generally calculated by reference to their costs on the straight-line basis over estimated useful lives of 3, 5 and 10 years. However depreciation of the Companys assets used for production of treated water is calculated using the unitsof-production method, based on the following formula: Depreciation for the period Percentage of treated water produced in the period = = Net assets for production of treated water at the beginning of period x Percentage of treated water produced in the period Current periods actual production of treated water (Actual production of treated water for the period + Projected total production of treated water over the remaining term of the Water Purchase Agreement) Total assets for production of treated water - Accumulated depreciationas at the beginning of the period
Net assets for production of treated water as at the beginning of the period
Assets for production of treated water consist of costs of construction of a water treatment plant and distribution system, and related interest expenses and financial costs. Depreciation is included in determining income. No depreciation is charged for land and construction in progress. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on disposal of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss when the asset is derecognised.
4.8 Assets for production of treated water that must be transferred at end of concession and amortisation Assets for production of treated water of Pathum Thani Water Company Limited that must be transferred to the Provincial Waterworks Authority at the end of the concession to produce and sell treated water (land, water treatment plant and distribution system) are stated at cost less accumulated amortisation and any impairment losses. Amortisation of assets for production of treated water is calculated using the units-of-production method, based on the following formula: Amortisation for the period Percentage of treated water produced in the period = = Net assets for production of treated water that must be transferred at end of concession as at the beginning of period x Percentage of treated water produced in the period Current periods actual production of treated water (Actual production of treated water for the period + Projected total production of treated water over the remaining term of concession for production and sale of treated water) Total assets for production of treated water that must be transferred at end of concession - Accumulated amortisation as at the beginning of the period
Net assets for production of treated water that must = be transferred at end of concession as at the beginning of the period
WATER
ENERGY
ENVIRONMENT
97
Amortisation is included in determining income. Construction in progress is stated at cost and is not amortised.
4.9 Rights to produce and sell treated water and treat waste water and amortisation The Company recorded cost of rights to produce and sell treated water and treat waste water (Operation rights) at cost as at the acquisition date, and allocated such cost in line with forecasted revenues calculated as at the acquisition date. a) Rights to produce and sell treated water Rights to produce and sell treated water are stated at cost less accumulated amortisation and any impairment losses. Amortisation of the rights is calculated using the units-of-production method, based on the following formula: Amortisation for the period Percentage of treated water produced in the period = = Net rights to produce and sell treated water as at the beginning of period x Percentage of treated water produced in the period Current periods actual production of treated water (Actual production of treated water for the period + Projected total production of treated water over the remaining term of operation rights) Net rights to produce and sell treated water as at beginning of the period Amortisation is included in determining income. b) Rights to treat waste water Rights to treat waste water are stated at cost less accumulated amortisation and any impairment losses. Amortisation of the rights is calculated using the units-of-production method, based on the following formula: Amortisation for the period Percentage of waste water treated in the period = = Net rights to treat waste water as at the beginning of period x Percentage of waste water treated in the period Current periods actual treatment of waste water (Actual treatment of wasted water for the period + Projected total treatment of waste water over the remaining term of operation rights) Net rights to treat waste water as at beginning of the period Amortisation is included in determining income. = Total rights to treat waste water - Accumulated amortisation as at the beginning of the period = Total rights to treated water - Accumulated amortisation as at the beginning of the period
98
4.10 Rights to produce and sell treated water and amortisation Rights to produce and sell treated water, which arose as a result of the acquisition of ordinary shares in Pathum Thani Water Company Limited being made at a cost higher than the fair value of this subsidiary, is regarded as an intangible asset with a definite life. It is carried at cost less any accumulated amortisation and any impairment losses. The Company amortises it on a straight-line basis over the remaining period of the subsidiarys agreement for the production and sale of treated water, starting from the acquisition date, (approximately 16 years) and tested for impairment whenever there is an indication that it may be impaired. The amortisation period and the amortisation method for rights to produce and sell treated water are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss.
4.11 Intangible assets The intangible assets (assets from which the subsidiary obtained the maintenance and management project) of the subsidiary are carried at cost less any accumulated amortisation and any accumulated impairment losses. Intangible assets with finite lives are amortised on a systematic basis over the economic useful life (5 years) and tested for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method of such intangible assets are reviewed at least at each financial year end. The amortisation expense is charged to profit or loss.
4.12 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 Companys operations.
4.13 Long-term leases Operating lease payments are recognised as an expense in profit or loss on a straight line basis over the lease term. 4.14 Impairment of assets At the end of each reporting period, the Company and its subsidiaries perform impairment reviews in respect of the property, plant and equipment and other intangible assets whenever events or changes in circumstances indicate that an asset may be impaired. The Company also carries out annual impairment reviews in respect of rights to produce and sell treated water. An impairment loss is recognised when the recoverable amount of an asset, which is the higher of the assets fair value less costs to sell and its value in use, is less than the carrying amount. An impairment loss is recognised in profit or loss.
WATER
ENERGY
ENVIRONMENT
99
4.15 Employee benefits Short-term employee benefits Salaries, wages, bonuses and contributions to the social security fund are recognised as expenses when incurred. Post-employment benefits Defined contribution plans The Company, its subsidiaries and its employees have jointly established a provident fund. The fund is monthly contributed by employees and by the Company and its subsidiaries. The funds assets are held in a separate trust fund and the Company and its subsidiaries contributions are recognised as expenses when incurred. Defined benefit plans The Company and its subsidiaries have obligations in respect of the severance payments it must make to employees upon retirement under labor law. The Company and its subsidiaries treat these severance payment obligations as a defined benefit plan. The obligation under the defined benefit plan is determined by a professionally qualified independent actuary based on actuarial techniques, using the projected unit credit method. Actuarial gains and losses arising from other long-term benefits are recognised immediately in profit or loss. The defined benefits liability comprises the present value of the defined benefit obligation less unrecognised past service cost and unrecognised actuarial gains or losses. For the first-time adoption of TAS 19 Employee Benefits in 2011, the Company elected to recognise the transitional liability, which exceeds the liability that would have been recognised at the same date under the previous accounting policy, through an adjustment to the beginning balance of retained earnings in 2011.
4.16 Income tax 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.
100
2,730
2 36
28 Contract price 121 Minimum Loan Rate minus stipulated margin per annum - Contract price 529 As declared 2 Agreed between the parties 36 Contract price
As at 31 December 2012 and 2011, the balances of the accounts between the Company and those related companies are as follows: (Unit: Thousand Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011 Other receivables - related parties (Note 9) (related by shareholders or committees) Trade and other payables - related parties (Note 19) Subsidiary Related companies (related by shareholders or committees) Total trade and other payables - related parties Retention - subsidiary 238 238 100 100 62 62 1,205 1,205 238 238 2,658 100 2,758 5,000 5,000 62 62 3,346 1,205 4,551 5,000 5,000
WATER
ENERGY
ENVIRONMENT
101
Long-term loans to related party As at 31 December 2012 and 2011, the balance of long-term loans between the Company and a related party and the movement are as follows: (Unit: Thousand Baht) Separate financial statements Increase Decrease Balance as at Balance as at during the during the 31 December Loans to related party Related by 1 January 2012 year year 2012 Pathum Thani Water Company Limited Loan Interest Total Subsidiary 2,402,500 682 2,403,182 116,061 116,061 Consolidated financial statements 2012 2011 Long-term loans to related party and accrued interest Pathum Thani Water Company Limited Loan Interest Total Less Current portion and accrued interest Long-term loans to related party, net of current portion (310,000) (115,580) (425,580) 2,092,500 1,163 2,093,663
Long-term loans to related party were subject to interest at the Minimum Loan Rate minus a stipulated margin per annum. Repayment is to be made in quarterly installments and due in full within September 2019. Directors and managements benefits During the years ended 31 December 2012 and 2011, the Company and its subsidiaries had employee benefit expenses payable to their directors and management as below. (Unit: Million Baht) Consolidated Separate financial statements financial statements 2012 2011 2012 2011 66 59 45 39 Short-term employee benefits Post-employment benefits Total 1 67 1 60 1 46 1 40
102
(Unit: Thousand Baht) Separate financial statements 2012 2011 105 2,098,286 2,098,391 65 1,405,117 1,405,182
interests between 0.1 and 3.50 percent per annum (2011: between 0.25 and 2.50 percent per annum).
8. Current investments
The balances of current investments represent investments in trading securities and the six-month period to twelve-month period fixed deposits, carrying interest between 2.28 and 5.25 percent per annum (2011: between 2.50 and 5.25 percent per annum). (Unit: Thousand Baht) Consolidated / Separate financial statements 2012 2011 Fixed Deposit Investments in trading securities at fair value Government and state enterprise bonds State enterprise securities Private sector debt securities Marketable equity securities Total current investments 1,769,990 1,769,990 682,762 514,678 129,137 1,326,577 3,096,567 1,633,827 1,633,827 724,445 30,063 502,938 74,689 1,332,135 2,965,962
WATER
ENERGY
ENVIRONMENT
103
(Unit: Thousand Baht) Separate financial statements 2012 2011 5,016 9,991 15,007 5,303 10,260 15,563
1,200,000 1,200,000
(1,211,557)
(989,456)
606,606
528,600
During the first quarter of the year 2012, the Company received dividend from Pathum Thani Water Company Limited amounting to Baht 303 million, in accordance with a resolution of the Annual General Meeting of Pathum Thani Water Company Limited held on 6 March 2012. During the third quarter of the year 2012, the Company received dividend from Pathum Thani Water Company Limited amounting to Baht 304 million, in accordance with a resolution of Board of Directors meeting of Pathum Thani Water Company Limited held on 26 July 2012. Thai Water Operations Company Limited did not pay dividend during the year ended 31 December 2012.
104
Total
Total
WATER
ENERGY
ENVIRONMENT
105
13.2 Share of profit / loss and dividend received During the years, the Company has recognised its share of profit / loss from investment in the associate in the consolidated financial statements as follows: (Unit: Thousand Baht) Consolidated financial statements Share of profit / loss from investment Companys name in associate during the year 2012 2011 CK Power Limited 16,505 (11,292) Total 16,505 (11,292) During the year 2012, such associated company did not pay dividend.
13.3 Summarised financial information of associate Financial information of the associated company is summarised below.
Paid-up capital as at 31 December 2012 2011 9,200 100 Total assets as at 31 December 2012 2011 45,154 6,499 Total liabilities as at 31 December 2012 2011 22,881 6,437 Total revenues for the year ended 31 December 2012 2011 2,578 1
Companys name
CK Power Limited
In May 2012, CK Power Limited increased its registered share capital from Baht 100 million to Baht 9,200 million through the issuance of 910 million new ordinary shares of Baht 10 each, with such new shares to be allocated to the existing shareholders in proportion to their shareholding and the Company has already made payment for the shares of such company in proportion to its shareholding, amounting to Baht 2,730 million. In May 2012, the Company agreed to provide sponsor support to CK Power Limited whereby it will provide financial support to a subsidiary of CK Power Limited in the proportion to its shareholding (30 percent), or a total of not more than Baht 154 million, should the subsidiary be unable to comply with its obligations under the Financing Documents or default on loan repayment.
Land 88,090 10,277 (229) 966 99,104 6,882 (821) 2,919 108,084 58,258 11,207 (178) 69,287 12,938 (802) 81,423 29,817 26,661 22,592 8,416 (5,172) 25,836 8,308 (1,702) 32,442 27,496 20,493 17,329 1,899 19,228 946 20,174 2,556 1,946 47,410 11,749 (5,827) 53,332 2,040 (2,437) 52,935 20,615 1,169 21,784 336 22,120
Assets for production of treated water Construction in progress Tools Total 11,455,059 73,465 (6,056) 11,522,468 13,778 (6,462) 11,529,784 1,950,985 344,800 (5,350) 2,290,435 371,987 (2,504) 2,659,918 9,232,033 8,869,866 344,800 371,987 Motor vehicles
Cost: 1 January 2011 480,681 10,798,002 9,202 11,059 Additions 1,221 49,049 Disposals Transfer in (out) (42,466) 41,500 31 December 2011 480,681 10,799,223 15,785 52,559 Additions 4,027 493 Disposals (3,204) Transfer in (out) (2,919) 31 December 2012 480,681 10,799,223 13,689 53,052 Accumulated depreciation: 1 January 2011 1,847,642 2,621 Depreciation for the year 320,657 3,186 Depreciation on disposals 31 December 2011 2,168,299 7,785 Depreciation for the year 346,609 3,186 Depreciation on disposals 31 December 2012 2,514,908 10,971 Net book value: 31 December 2011 480,681 8,630,924 15,785 44,774 31 December 2012 480,681 8,284,315 13,689 42,081 Depreciation for the year 2011 (Baht 332 million included in cost of sales of treated water and service, and the balance in administrative expenses) 2012 (Baht 357 million included in cost of sales of treated water and service, and the balance in administrative expenses)
WATER
Land
Assets for production of treated water Construction in progress Tools Total Motor vehicles
ENERGY ENVIRONMENT
1,889,279 339,020 (3) 2,228,296 366,010 (2,115) 2,592,191 9,161,560 8,800,100 339,020 366,010
Cost: 1 January 2011 425,949 10,798,002 9,202 11,059 Additions 1,221 49,049 Disposals Transfer in (out) (42,466) 41,500 31 December 2011 425,949 10,799,223 15,785 52,559 Additions 4,027 493 Disposals (3,204) Transfer in (out) (2,919) 31 December 2012 425,949 10,799,223 13,689 53,052 Accumulated depreciation: 1 January 2011 1,847,642 5,164 Depreciation for the year 320,657 2,621 Depreciation on disposals 31 December 2011 2,168,299 7,785 Depreciation for the year 346,609 3,186 Depreciation on disposals 31 December 2012 2,514,908 10,971 Net book value: 31 December 2011 425,949 8,630,924 15,785 44,774 31 December 2012 425,949 8,284,315 13,689 42,081 Depreciation for the year 2011 (Baht 329 million included in cost of sales of treated water and service, and the balance in administrative expenses) 2012 (Baht 354 million included in cost of sales of treated water and service, and the balance in administrative expenses)
As at 31 December 2012, certain plant and equipment items have been fully depreciated but are still in use. The gross carrying amount before deducting accumulated depreciation of those assets amounted to approximately Baht 77 million (2011: Baht 68 million) (The Company only: Baht 24 million, 2011: Baht 20 million).
107
108
15. Assets for production of treated water that must be transferred at end of concession
(Unit: Thousand Baht) Consolidated financial statements Water treatment plant andlocal distribution Construction treated water system in progress 5,940,786 177 30,698 5,971,661 5,971,661 2,541,641 265,229 2,806,870 261,776 3,068,646 3,164,791 2,903,015 2,067 28,631 (30,698) -
Land Cost: 1 January 2011 Additions Transfer in (out) 31 December 2011 31 December 2012 Accumulated amortisation: 1 January 2011 Amortisation for the year 31 December 2011 Amortisation for the year 31 December 2012 Net book value: 31 December 2011 31 December 2012 Amortisation for the year 2011 2012 418,088 418,088 418,088 198,414 17,045 215,459 17,187 232,646 202,629 185,442
Total 6,360,941 28,808 6,389,749 6,389,749 2,740,055 282,274 3,022,329 278,963 3,301,292 3,367,420 3,088,457 282,274 278,963
Assets for production of treated water of Pathum Thani Water Company Limited will be transferred to the Provincial Waterworks Authority after the end of the 25-year concession to produce and sell treated water.
16. Rights to produce and sell treated water and treat waste water
(Unit: Thousand Baht) Consolidated / Separate financial statements 2012 2011 1,410,075 (105,914) 1,304,161 1,410,075 (76,246) 1,333,829
Rights to produce and sell treated water and treat waste water Less Accumulated amortisation of rights to produce and sell treated water and treat waste water Rights to produce and sell treated water and treat waste water, net
WATER
ENERGY
ENVIRONMENT
109
(Unit: Thousand Baht) Consolidated financial statements 2012 2011 3,169,109 (1,064,804) 2,104,305 3,169,109 (869,810) 2,299,299
Rights to produce and sell treated water Less Accumulated amortisation of rights to produce and sell treated water Rights to produce and sell treated water, net
The net book value of intangible assets as at 31 December 2012 and 2011 is presented below.
(Unit: Thousand Baht) Consolidated financial statements 2,493 11,611 14,104 14,104 1,095 1,095 1,663 2,758 13,009 11,346
Cost: 1 January 2011 Additions 31 December 2011 31 December 2012 Accumulated amortisation: 1 January 2011 Amortisation for the year 31 December 2011 Amortisation for the year 31 December 2012 Net book value: 31 December 2011 31 December 2012
110
(Unit: Thousand Baht Separate financial statements 2012 2011 2,577 33,270 181 819 3,090 10,775 31,028 81,740 2,612 33,883 1,939 9,885 3,542 5,993 26,609 84,463
1,240,000 2,430,000
1,350,000 2,790,000
1,240,000 2,430,000
1,350,000 2,790,000
Long-term loan in No.2 and No.3 requires the Company to follow certain financial terms such as to maintain financial ratios.
WATER
ENERGY
ENVIRONMENT
111
21. Debentures
Debentures 1 2 3 4 5 Life 3 years 5 years 7 years 7 years 10 years Date of issue 26 February 2009 26 February 2009 26 February 2009 22 February 2012 22 February 2012 Maturity date 26 February 2012 26 February 2014 26 February 2016 22 February 2019 22 February 2022 Interest rate (% per annum) 4.00 4.75 5.35 4.40 4.60
(Unit: Thousand Baht) Consolidated / separate financial statements 2012 2011 1,700,000 1,800,000 1,500,000 2,000,000 7,000,000 (9,529) 6,990,471 3,500,000 1,700,000 1,800,000 7,000,000 (3,500,000) (3,792) 3,496,208
Total Less Current portion of debentures Less Deferred debenture issuing costs Debentures, net of current portion
All debentures of the Company are unsecured, senior debentures with trustees and with a par value of Baht 1,000 each. The interest is payable every 6 months throughout the life of the debentures. The Company is required to maintain certain financial ratios.
112
Long-term employee benefit expenses included in the profit or loss was as follows: Consolidated financial statements 2012 2011 Current service cost Interest cost Total expense recognized in profit or loss Line items under which such expenses are included in profit or loss Cost of sales and service Administrative expenses 2,760 483 3,243 2,436 370 2,806
(Unit: Thousand Baht) Separate financial statements 2012 2011 1,378 200 1,578 1,231 145 1,376
1,266 1,977
1,088 1,718
148 1,430
125 1,251
Principal actuarial assumptions at the valuation date were as follows: Consolidated financial statements 2012 2011 Discount rate Future salary increase rate (depending on work performance) Staff turnover rate 4.0 1.5 - 7.0 0 - 14.0 4.0 1.5 - 7.0 0 - 14.0 Separate financial statements 2012 2011 4.0 5.0 0 - 14.0 4.0 5.0 0 - 14.0
Amounts of defined benefit obligation for the current and previous three periods are as follows: (Unit: Thousand Baht) Defined benefit obligation Consolidated Separate financial statements financial statements Year 2012 Year 2011 Year 2010 Year 2009 14,780 12,065 9,259 6,501 6,577 4,999 3,623 2,408
WATER
ENERGY
ENVIRONMENT
113
114
During the first quarter of the current year, the subsidiary receives a letter concerning appeal decision from the Board of Appeals of the Revenue Department which states that the subsidiary can use for tax loss brought forward as previously submitted. According to the letter of appeal decision, the subsidiary has had corporate income tax obligations since the third quarter of the year 2011 totaling Baht 86 million. In this regard, the subsidiary has right to receive refund from the corporate income tax paid from the year 2008 to 2010. The subsidiary is in a process of refunding the corporate income tax for 2008 to 2010 that was paid totaling Baht 386 million. Currently, the refund is being considered by Area Revenue Office, Pathum Thani 1. However, the subsidiary already reversed Baht 91 million overrecorded income tax payable for 2011 to other income in the statement of comprehensive income of the first quarter of the current year. In addition, in September 2012, the subsidiary received a notification letter from the Area Revenue Office regarding the refund of corporate income tax for 2008 amounting to Baht 62 million. The subsidiary recorded such transaction as other income in the statement of comprehensive income in the current period.
WATER
ENERGY
ENVIRONMENT
115
116
31. Dividends
Dividends Approved by Total dividends (Thousand Baht) Dividend per share (Baht)
Dividends from the earnings of the promoted Annual General Meeting of the operations for July to December 2010 to the Companys shareholders for shareholders listed in the share register book the year 2011 on 7 March as at 16 February 2011 2011 Interim dividends from the earnings of the Board of Directors Meeting promoted operations for January to June 2011 No.3/2011 on 29 July 2011 to the shareholders listed in the share register book as at 16 August 2011 Total dividends for 2011 Dividends from the earnings of the promoted Annual General Meeting of the operations for July to December 2011 to the Companys shareholders for shareholders listed in the share register book the year 2012 on 16 March as at 14 February 2012 2012 Interim dividends from the earnings of the Board of Directors Meeting promoted operations for January to June 2012 No.3/2012 on 26 July 2012 to the shareholders listed in the share register book as at 10 August 2012 Total dividends for 2012
798,000
0.20
598,500 1,396,500
0.15 0.35
997,500
0.25
877,800 1,875,300
0.22 0.47
WATER
ENERGY
ENVIRONMENT
117
32.4 Bank guarantees As at 31 December 2012, there were outstanding bank guarantees of approximately Baht 265 million (2011: Baht 262 million) issued by banks on behalf of the Company and its subsidiaries in the normal course of business. These included letters of guarantee amounting to Baht 210 million (2011: Baht 212 million) required under the Water Purchase Agreement with the Provincial Waterworks Authority and Baht 55 million (2011: Baht 50 million) to guarantee electricity use (Separate financial statement: Baht 50 million (2011: Baht 52 million) under the Water Purchase Agreement with the Provincial Waterworks Authority and Baht 37 million (2011: Baht 31 million) to guarantee electricity use).
118
32.5 Litigation Pathum Thani Water Company Limited In August 2004, a person filed submitted a dispute to the Thai Justice Arbitration Institute for a decision in relation to a complaint against Pathum Thani Water Company Limited (second defendant) and the Provincial Water Authority (first defendant), claiming compensation totaling approximately Baht 64.5 million for a tort against this person in the course of the construction of a water treatment plant. On 24 October 2006, the Arbitral Tribunal ordered the dismissal of the dispute. Subsequently, on 20 December 2006, the person filed suit with the Administrative Court seeking to overturn the order of the Arbitral Tribunal dismissing the dispute. However, no provision for loss from that dispute was set aside in the account since the management of Pathum Thani Water Company Limited believes that there is no material financial damage that will be arise as a result of this dispute.
WATER
ENERGY
ENVIRONMENT
119
(Unit: Million Baht) As at 31 December 2012 Consolidated financial statements Fixed interest rates Floating NonWithin 1-5 Over interest interest 1 year years 5 years rate bearing Total Financial assets Cash and cash equivalents Current investments Trade and other receivables Other long-term investment Financial liabilities Trade and other payables Long-term loans Debentures 1,264 2,967 4,231 200 200 3,497 3,497 3,493 3,493 1,399 1,399 6,430 6,430 14 129 452 595 110 110 2,677 3,096 452 200 6,425 110 6,430 6,990 13,530
Effective interest rate (% per annum) 0.10 - 3.50 2.28 - 5.25 4.00 3.9813 - 5.125 4.00 - 5.35
(Unit: Million Baht) As at 31 December 2011 Consolidated financial statements Fixed interest rates Floating NonWithin 1-5 interest interest 1 year years rate bearing Total Financial assets Cash and cash equivalents Current investments Trade and other receivables Financial liabilities Trade and other payables Long-term loans Debentures 603 2,891 3,494 3,500 3,500 3,496 3,496 1,084 1,084 4,140 4,140 280 75 431 786 109 109 1,967 2,966 431 5,364 109 4,140 6,996 11,245
Effective interest rate (% per annum) 0.25 - 2.50 2.50 - 5.25 3.625 - 5.125 4.00 - 5.35
120
(Unit: Million Baht) As at 31 December 2012 Separate financial statements Fixed interest rates Within 1 year Financial assets Cash and cash equivalents Current investments Trade and other receivables Long-term loans to related party Financial liabilities Trade and other payables Long-term loans Debentures 1,089 2,967 4,056 1-5 years 3,497 3,497 Over 5 years 3,493 3,493 Floating interest rate 1,003 2,094 3,097 6,430 6,430 Noninterest bearing 6 129 296 431 82 82 Effective interest rate (% per annum) 0.375 - 3.50 2.28 - 5.25 5.00 - 5.25 3.9813 - 5.125 4.00 - 5.35 (Unit: Million Baht) As at 31 December 2011 Separate financial statements Fixed interest rates Within 1 year Financial assets Cash and cash equivalents Current investments Trade and other receivables Long-term loans to related party Financial liabilities Trade and other payables Long-term loans Debentures 164 2,891 3,055 3,500 3,500 1-5 years 3,496 3,496 Floating interest rate 967 2,403 3,370 4,140 4,140 Noninterest bearing 274 75 291 640 84 84 Effective interest rate (% per annum) 0.25 - 2.50 2.50 - 5.25 3.75 - 5.125 3.625 - 5.125 4.00 - 5.35
WATER
ENERGY
ENVIRONMENT
121
Foreign currency risk The Company and its subsidiaries do not consider themselves exposed to foreign currency risk because they have no significant foreign currency transactions.
33.2 Fair values of financial instruments A fair value is the amount for which an asset can be exchanged or a liability settled between knowledgeable, willing parties in an arms length transaction. The fair value is determined by reference to the market price of the financial instrument or by using an appropriate valuation technique, depending on the nature of the instrument. The methods and assumptions used by the Company and its subsidiaries in estimating the fair value of financial instruments are as follows: a) For financial assets and liabilities which have short-term maturity, including cash and cash equivalents, current investments, trade and other receivables, trade and other payables, their carrying amounts in the statements of financial position approximate their fair value. b) For other long-term investment, long-term loans to related party and long-term loans carrying interest approximate to the market rate, their carrying amounts in the statements of financial position approximates their fair value. c) For fixed rate debentures, their fair value is estimated by discounting expected future cash flow by the current market interest rate of the loans with similar terms and conditions. The approximate fair value is estimated to be close to the carrying amounts in the statements of financial position. As at 31 December 2012, fair value of significant financial instruments are estimated to be close to the carrying amounts in the statements of financial position, with no material differences.