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♦♦♦♦Annual Report Annual Report Annual Report Annual Report 2012201220122012♦♦♦♦
CONTENTCONTENTCONTENTCONTENT PagesPagesPagesPages CORPORATE INFORMATIONCORPORATE INFORMATIONCORPORATE INFORMATIONCORPORATE INFORMATION
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CHAIRMAN’S STATEMENTCHAIRMAN’S STATEMENTCHAIRMAN’S STATEMENTCHAIRMAN’S STATEMENT
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GOOD CORPORATE GOVERNANCE REPORTGOOD CORPORATE GOVERNANCE REPORTGOOD CORPORATE GOVERNANCE REPORTGOOD CORPORATE GOVERNANCE REPORT
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SHAREHOLDER STRUCTURESHAREHOLDER STRUCTURESHAREHOLDER STRUCTURESHAREHOLDER STRUCTURE
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COMMITTEES AND MANAGEMENT STRUCTURECOMMITTEES AND MANAGEMENT STRUCTURECOMMITTEES AND MANAGEMENT STRUCTURECOMMITTEES AND MANAGEMENT STRUCTURE
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MARKET AND MARKET AND MARKET AND MARKET AND BUSINESS CONDITIONSBUSINESS CONDITIONSBUSINESS CONDITIONSBUSINESS CONDITIONS
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RISK FACTORSRISK FACTORSRISK FACTORSRISK FACTORS
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AUDIT COMMITTEE’S REPORTAUDIT COMMITTEE’S REPORTAUDIT COMMITTEE’S REPORTAUDIT COMMITTEE’S REPORT
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FINANCIAL PERFORMANCE AND FINANCIAL INFORMATIONFINANCIAL PERFORMANCE AND FINANCIAL INFORMATIONFINANCIAL PERFORMANCE AND FINANCIAL INFORMATIONFINANCIAL PERFORMANCE AND FINANCIAL INFORMATION
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REPORT REGARDING THE RESPONSIBILITY OF REPORT REGARDING THE RESPONSIBILITY OF REPORT REGARDING THE RESPONSIBILITY OF REPORT REGARDING THE RESPONSIBILITY OF THE BOARD OF DIRECTORS FOR FIANCIAL REPORTTHE BOARD OF DIRECTORS FOR FIANCIAL REPORTTHE BOARD OF DIRECTORS FOR FIANCIAL REPORTTHE BOARD OF DIRECTORS FOR FIANCIAL REPORT
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AUDITORS’ REPORTAUDITORS’ REPORTAUDITORS’ REPORTAUDITORS’ REPORT 59595959
♦♦♦♦Corporate InformationCorporate InformationCorporate InformationCorporate Information♦♦♦♦ ♦♦♦♦Annual Report 2012Annual Report 2012Annual Report 2012Annual Report 2012♦♦♦♦
Pages 1 Back to Back to Back to Back to ContentContentContentContent
♦Corporate Information♦
The Board of DirectorsThe Board of DirectorsThe Board of DirectorsThe Board of Directors Mr. Yuth Vorachattarn Tengku Dato’ Zafrul Bin Tengku Abdul Aziz Mr. Ronald Anthony Ooi Thean Yat Mr. Montree Sornpaisarn Mrs.Hamidah Binti Moris Ms. Boonporn Boriboonsongsilp Mr. Pusit Kaewmongkolsri Assoc.Prof.Dr. Paiboon Sareewiwatthana Assoc.Prof.Dr. Preecha Jarungidanan
Corporate SecretaryCorporate SecretaryCorporate SecretaryCorporate Secretary Mr. Waranchai Jensiriwanich
AuditorAuditorAuditorAuditor Ernst & Young Office LimitedErnst & Young Office LimitedErnst & Young Office LimitedErnst & Young Office Limited
1. Ms. Ratana Jala Certified Public Accountant,
Registration No.3734 2. Ms. Somjai Khunapasut Certified Public Accountant,
Registration No.4499 3. Ms. Phuphun Charoensuk Certified Public Accountant, Registration
No.4950
33rd Floor, Lake Rajada Office Complex 193/136-137 New Rajadapisek Road Klongtoey, Bangkok 10110 Thailand Tel : 66 (0) 2264 0777 Fax : 66 (0) 2264 0789 - 90
Email:[email protected]
Head OfficeHead OfficeHead OfficeHead Office 999/9 The Offices at Central World, Fl.20th-21st, 24th Rama 1 Road, Patumwan, Pathumwan, Bangkok 10330 Tel: 66 (0) 2658 6300 Fax: 66 (0) 2658 6301
Company Registration No.Company Registration No.Company Registration No.Company Registration No. Bor Mor Jor 0107545000314
HomepageHomepageHomepageHomepage www.maybank-ke.co.th
Securities RegistrationSecurities RegistrationSecurities RegistrationSecurities Registration Thailand Securities Depository Thailand Securities Depository Thailand Securities Depository Thailand Securities Depository (Thailand) Co., Ltd.(Thailand) Co., Ltd.(Thailand) Co., Ltd.(Thailand) Co., Ltd. 62 The Stock Exchange of Thailand Building, Rachadapisek Road, Klongtoey, Bangkok 10110 Tel: 66 (0) 2359 1200
Company OfficesCompany OfficesCompany OfficesCompany Offices • Bangkok and VicinitiesBangkok and VicinitiesBangkok and VicinitiesBangkok and Vicinities
Head OfficeHead OfficeHead OfficeHead Office 999/9 The Offices at Central World, 20th-21st, 24th Fl., Rama I Road, Patumwan, Pathumwan, Bangkok 10330 Tel: 66 (0) 2658 6300 Fax: 66 (0) 2658 6301
Ngamwongwan BranchNgamwongwan BranchNgamwongwan BranchNgamwongwan Branch 30/39-50 The Mall Ngamwongwan Office Tower 14th Fl., Ngamwongwan Rd., Bang Khen, Nonthaburi 11000 Tel : 0-2550-0577 Fax : 0-2550-0566
Seacon Square BranchSeacon Square BranchSeacon Square BranchSeacon Square Branch 55 Seacon Square Tower G Fl., Room 1005, Srinakarin Rd., Nongbon, Pravej, Bangkok 10260 Tel : 0-2320-3600 Fax : 0-2320-3610
Yada BranchYada BranchYada BranchYada Branch 56 Yada Tower 5th Fl., Silom Rd., Suriyawong, Bangrak, Bangkok 10500 Tel : 0-2632-8341 Fax : 0-2632-8395
Thapra BranchThapra BranchThapra BranchThapra Branch 99 The Mall Thapra Office Tower 12 Fl., Ratchadapisek-Thapra Rd., Bukkaloe, Thonburi, Bangkok 10600 Tel : 0-2876-6500 Fax : 0-2876-6531 Thaniya BranchThaniya BranchThaniya BranchThaniya Branch 52 Thaniya Plaza Tower 20th Fl., Silom Rd., Suriyawong, Bangrak, Bangkok 10500 Tel : 0-2231-2700 Fax : 0-2231-2130
♦♦♦♦Corporate InformationCorporate InformationCorporate InformationCorporate Information♦♦♦♦ ♦♦♦♦Annual Report 2012Annual Report 2012Annual Report 2012Annual Report 2012♦♦♦♦
Pages 2 Back to Back to Back to Back to ContentContentContentContent
Bangkhae BranchBangkhae BranchBangkhae BranchBangkhae Branch 275 Moo 1 The Mall Bangkhae Tower 8th Fl., Petchkasaem Rd., North Bangkae, Bangkae, Bangkok 10160 Tel : 0-2804-4235 Fax : 0-2804-4251 Pratunam BranchPratunam BranchPratunam BranchPratunam Branch 831 City Complex Building, 5th Fl., Petchburi Rd., Ratchathavee, Bangkok 10400 Tel : 0-2250-6192 Fax : 0-2250-6199 Pinklao BranchPinklao BranchPinklao BranchPinklao Branch 7/129 Central Pinklao Tower 3rd Fl. Room 302, Baromratchonni Rd., Arunamarin, Bangkok Noi, Bangkok 10700 Tel : 0-2884-9847 Fax : 0-2884-6920 Phahurad BranchPhahurad BranchPhahurad BranchPhahurad Branch 125, 125/1-6, 125/19-25 The Old Siam Plaza 3rd Fl. Pahurad Rd., Wangburapapirom, Pranakorn, Bangkok 10200 Tel : 0-2225-0242 Fax : 0-2225-0523 Fortune BranchFortune BranchFortune BranchFortune Branch 5 Fortune Town Building, Basement Fl., Ratchadapisak Rd., Dindaeng, Bangkok 10400 Tel : 0-2641-0977 Fax : 0-2641-0966
Future Park Rangsit BranchFuture Park Rangsit BranchFuture Park Rangsit BranchFuture Park Rangsit Branch 94 Future Park Rangsit Tower, Room 091-92 GF Fl., Phaholyothin Rd., Prachatipat, Pathumthani 12130 Team 1 ; Tel : 0-2958-0592 Fax : 0-2958-0420 Team 2 ; Tel : 0-2958-0992 Fax : 0-2958-0590 Fashion Island BranchFashion Island BranchFashion Island BranchFashion Island Branch 587,589, Fashion Island Shopping Center BF Fl., Ramintra Rd., Khan Na Yao, Bangkok 10230 Tel : 0-2947-5800-5 Fax : 0-2519-5040 Kasetsart University BranchKasetsart University BranchKasetsart University BranchKasetsart University Branch 50 Faculty of Business Adminstration 1st Floor Ngamwongwan Road Lat Yao Chatuchak, Bangkok 10900 Tel: 0-2579-9880 Fax: 0-2579-9840
United United United United Center BranchCenter BranchCenter BranchCenter Branch 323 United Center Building, 17th Fl., Silom Rd., Bangrak, Bangrak, Bangkok 10500 Tel : 0-2680-4340 Fax : 0-2680-4355
Yaowaraj BranchYaowaraj BranchYaowaraj BranchYaowaraj Branch 215 Grand China Tower 4th Fl., Yaowaraj Rd., Samphantawong, Bangkok 10100 Tel : 0-2622-9412 Fax : 0-2622-9383 Lat Phrao BranchLat Phrao BranchLat Phrao BranchLat Phrao Branch 1693 Central Lat Phrao Tower 11th Fl. Phaholyothin Rd., Lat Phrao, Chatuchak, Bangkok 10900 Tel : 0-2541-1411 Fax : 0-2541-1108 Sri Nakarin BranchSri Nakarin BranchSri Nakarin BranchSri Nakarin Branch 1145 Moo 5 Akepailin Tower 3rd Fl., Srinakarin Rd., North Samrong, Samut Prakan 10270 Tel : 0-2758-7003 Fax : 0-2758-7248
Silom Branch Silom Branch Silom Branch Silom Branch 62 Thaniya Building 4th Fl., Silom Rd, Suriyawong, Bangrak, Bangkok 10500 Tel : 0-2231-2700 Fax : 0-2231-2130
Sathon Nakorn BranchSathon Nakorn BranchSathon Nakorn BranchSathon Nakorn Branch 92/10 Sathonthani Tower 2 7th Fl. North Sathon Rd., Silom, Bangrak, Bangkok 10500 Tel : 0-2636-7550-5 Fax : 0-2636-7565
Amarin Branch Amarin Branch Amarin Branch Amarin Branch 496-502 Amarin Plaza, 8th Fl. Ploenchit Rd., Lumpinee, Pathumwan, Bangkok 10330 Tel : 0-2256-9373 Fax : 0-2256-9374
♦♦♦♦Corporate InformationCorporate InformationCorporate InformationCorporate Information♦♦♦♦ ♦♦♦♦Annual Report 2012Annual Report 2012Annual Report 2012Annual Report 2012♦♦♦♦
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Asoke BranchAsoke BranchAsoke BranchAsoke Branch 159 Sermmit Tower 25th Fl., Soi Sukumvit 21, Asoke Rd., North Khlong Toei, Watthana, Bangkok 10110 Tel : 0-2665-7000 Fax : 0-2665-7050 The Emporium BranchThe Emporium BranchThe Emporium BranchThe Emporium Branch 622 The Emporium Tower 14th Fl., Sukhumvit Rd., Klong Tun, Khlong Toei, Bangkok 10110 Tel : 0-2664-9800 Fax : 0-2664-9811 The Nine BranchThe Nine BranchThe Nine BranchThe Nine Branch 999/3 The Nine Neighborhood Center, 3rd Fl., Rama9 Road, Suanluang, Bangkok 10250 Tel : 0-2716-7816 Fax : 0-2716-7815 Bangkapi BranchBangkapi BranchBangkapi BranchBangkapi Branch 3105 N-Mark Plaza 3rd Fl. Ladpraw Rd. Klongchun Bangkapi, Bangkok 10240 Tel: 02-378-1144 Tel: 02-378-1323 The Dhurakij Pundit University The Dhurakij Pundit University The Dhurakij Pundit University The Dhurakij Pundit University BranchBranchBranchBranch 110/1-4 Building 10, 1st Fl., Prachachen Rd., Laksi, Bangkok 10210 Tel : 0-2831-4600 Fax : 0-2580-3643
The Chaengwattana BranchThe Chaengwattana BranchThe Chaengwattana BranchThe Chaengwattana Branch 99/9 Moo2 Central Plaza Chaengwattana Office Tower 14th Fl., Unit 1401 Chaengwattana Rd., Bangtarad, Pakkret, Nonthaburi 11120 Tel : 0-2835-3283 Fax : 0-2835-3280 Thanya ParkThanya ParkThanya ParkThanya Park 735/5 Thanya Shopping Park, E Building, 2th Floor, Srinakarin Road, Suanlaung, Prakhanong, Bangkok 10260 Tel. 0-2108-6300 Fax. 0-2108-6301 • Other ProvincesOther ProvincesOther ProvincesOther Provinces Chanthaburi BranchChanthaburi BranchChanthaburi BranchChanthaburi Branch 351/8, Tha Chalaep Road, Talad, Mueang, Chanthaburi 22000 Tel : 039-332-111 Fax : 039-332-444
Chiangmai 1 BranchChiangmai 1 BranchChiangmai 1 BranchChiangmai 1 Branch 244 Chiang Mai Golf Driving Range Building, 2nd-3rd Fl. Wowlai Rd. Haiya, Mueang Chiangmai 50100 Tel : 053-284-000 Fax : 053-284-019 Chiangmai 2 BranchChiangmai 2 BranchChiangmai 2 BranchChiangmai 2 Branch 201/3 Mahidol Rd., Haiya, Mueang, Chiangmai 50100
Tel : 053-284-138-47 Fax : 053-202-695
Chonburi Branch Chonburi Branch Chonburi Branch Chonburi Branch 57/1-2 Paspetra Rd.,
Bangplasroy, Mueang, Chonburi 20000 Tel : 038-792-479 Fax : 038-792-493
Nakon Ratchasima BranchNakon Ratchasima BranchNakon Ratchasima BranchNakon Ratchasima Branch 7th Floor, Room A3, Mittrapap Road, Nai-Mueang, Mueang, Nakhon Ratchasima 30000 Tel. 044-288-455 Fax. 044-288-466 044-288-696
Phuket BranchPhuket BranchPhuket BranchPhuket Branch 22/39-40 Wanich Plaza Building, Laung Por Wat Chalong Rd., Talad Yai, Maung Phuket 83000 Tel : 076-355-730-6 Fax : 076-355-730 ext.119
Yala BranchYala BranchYala BranchYala Branch 18 Song Phee Nong Rd., Sateng, Mueang, Yala 95000 Tel : 073-255-494-6 Fax : 073-255-498
Rayong BranchRayong BranchRayong BranchRayong Branch 180/1-2 Samaphan Building, 2rd Fl., Sukumvit Rd., Cherng Nern, Mueang, Rayong 21000 Tel : 038-862-022-9 Fax : 038-862-043
Rayong 2 BranchRayong 2 BranchRayong 2 BranchRayong 2 Branch TSK PARK, 1st Fl., Sukumvit Rd., Nuarn Pra, Mueang, Rayong 21000 Tel : 038-807-459 Fax : 038-807-841
♦♦♦♦Corporate InformationCorporate InformationCorporate InformationCorporate Information♦♦♦♦ ♦♦♦♦Annual Report 2012Annual Report 2012Annual Report 2012Annual Report 2012♦♦♦♦
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Lampang BranchLampang BranchLampang BranchLampang Branch 319 Central Plaza 3rd Fl., Highway Lampang-Ngao Road, Suan Dok , Mueang , Lampang 52100 Tel. 054-811-817 Fax. 054-811-816 Surin BranchSurin BranchSurin BranchSurin Branch 137/5-6 Sirirat Rd., Nai Mueang, Mueang, Surin 32000 Tel : 044-531-600-3 Fax : 044-519-378 Samut Sakhon BranchSamut Sakhon BranchSamut Sakhon BranchSamut Sakhon Branch 322/91 Ekachai Rd., Mahachai, Mueang, Samut Sakhon 74000 Tel : 034-837-190 Fax : 034-837-610 Samut Songkram BranchSamut Songkram BranchSamut Songkram BranchSamut Songkram Branch 74/27-28 Soi Bangjakreng 4, Rama 2 Rd., Mae Klong, Maung, Samut Songkram 75000 Tel : 034-724-062-4 Fax : 034-724-068 Surat Thani BranchSurat Thani BranchSurat Thani BranchSurat Thani Branch 216/3 Moo 4 Chonkasem Rd., Makhamtea Rd., Mueang, Surat Thani 84000 Tel : 077-205-460 Fax : 077-205-475 Hat Yai 1 BranchHat Yai 1 BranchHat Yai 1 BranchHat Yai 1 Branch 1, 3, 5 Soi Juti Uthit 3, Juti Anusorn Rd. Hat Yai, Songkhla 90110 Tel : 074-346-400-5 Fax : 074-239-509
Ubon Ratchathani BranchUbon Ratchathani BranchUbon Ratchathani BranchUbon Ratchathani Branch 191, 193 Aupparaj Rd., Nai Mueang, Mueang, Ubon, Ratchathani 34000 Tel : 045-265-633 Fax : 045-265-639 Aranyaprathet BranchAranyaprathet BranchAranyaprathet BranchAranyaprathet Branch 44/4 Bamrungraj Rd., Aranyprathet, Sa Kaeo 27120 Tel : 037-226-347-8 Fax : 037-266-34
♦Message from the Chairman♦ ♦♦♦♦2012 Annual Report2012 Annual Report2012 Annual Report2012 Annual Report♦♦♦♦
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♦Message from the Chairman♦
The Year 2012 is a great year for stock investors and securities companies in Thailand. The SET Index reaches the highest point at 1,391.3. Total trading value for the entire year is THB 15.83 trillion, with an average daily trading value of THB 32,304 million. This represents an increase from the Year 2011 in which total trading value for the entire year is THB 14.38 trillion, with an average daily trading value of THB 29,473 million.
The Year 2012 is the year in which the Company could maintain its leadership in the domestic brokerage business for 11 consecutive years, with total market share of 11.86 %. Total revenue rises from THB 3,191.81 million in the Year 2011 to THB 3,233.32 million in the Year 2012. Total net profit increases from THB 672.18 million in the Year 2011 to THB 720.66 million in the Year 2012, an increase by 7.21 % on a year-to-year basis. The Company’s EPS rose from THB 1.18 in the Year 2011 to THB 1.26 in the Year 2012. With sound financial performance & condition coupled with supports from Maybank Group, the Company could still make dividend payment at the payout ratio of 99 %, or THB 1.25 per share.
Receivables from margin loans rise from THB 4,404.76 million at the end of 2011 to THB 8,776.28 million at the end of 2012, an almost 100 % increase. Thus, total assets rise from THB 7,196.20 million at the end of 2011 to THB 13,983.48 million at the end of 2012. The Company could extend greater amount of margin loans due to financial supports from the Maybank Group and its strong credit rating which has helped to facilitate it in obtaining loans from financial institutions. Apart from supports from the Maybank Group, some other factors that have played an important role in supporting success of the Company in the Year 2012 includes:
1. Continuous trust and support from clients 2. Quality of research reports and investment banking services which have created substantial
benefits for clients 3. Innovative brokerage services including allowing brokerage clients to engage in foreign stock
investment via KE World, allowing brokerage clients to open their securities trading accounts within 30 minutes via the Internet, allowing brokerage clients to engage in Internet trading via mobile phone and tablet PC, KE live TV and etc
4. Continuous upgrading and improvement of information technology and trading services to facilitate clients trading
The Company’s management and staffs have worked hard to maintain its long-term competitiveness
and excellence. The Company has also expressed its social responsibility by creating organizational culture aimed to promote sense of good citizenship and business moral among all staffs. In the Year 2012, the Company participated in 20 social & charitable activities including monetary and non-monetary donations to help victims of the flood which occurred in Quarter 4 of 2011. The Company also provided training courses aimed to create financial literacy among students and investors in many occasions.
♦Message from the Chairman♦ ♦♦♦♦2012 Annual Report2012 Annual Report2012 Annual Report2012 Annual Report♦♦♦♦
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Last but not least, I would like to express my deepest thanks to all the Company’s clients and
patronages, the Maybank Group, all shareholders and domestic financial institutions that continue to provide good support to the Company. I would also like to thank all management and staff who have worked hard and dedicated themselves for the success of the Company.
♦♦♦♦Good Corporate Governance Report♦ ♦Annual Report 2012♦♦♦♦
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♦Good Corporate Governance Report♦
The Board of Directors of Kim Eng Securities (Thailand) Plc. has long put emphasis on good corporate governance. The Board of Directors believes that good corporate governance would help to prevent potential serious damages caused by the lack of a good internal control system. Good corporate governance also plays an important role in enhancing management efficiency and improving the utilization of resources. This will lead to sustainable growth for the Company and create value for all shareholders and stakeholders.
For the Year 2012, the Company urged its employees to emphasize on instituting a good corporate governance system in the organization. This was an ongoing activity from the Year 2008 that was the “Year of Good Corporate Governance in KIM ENG”. The Company had urged all of its employees to act with thoroughness, care and integrity. The Company had also urged its management to set up an efficient, transparent and checkable management system. All of these have created confidence among shareholders, investors, stakeholders and all involved persons. Thus, in the Year 2009, 2010 and 2011, the Company was rated “4-Star” for its good corporate governance.
Evaluation of the Company’s compliance with good corporate governance practices in the Year 2012 indicates that the Company complied with almost all of the good corporate governance practices except that in the area of shareholders’ meeting. This was because some foreign directors did not attend the shareholders’ meeting. Nevertheless, the Chairman, the Chief Executive Officer, the Chair of the Audit Committee, the Chair of the Remuneration Committee, the Chair of the Nomination Committee and the Chair of the Good Corporate Governance Committee attended the shareholders’ meeting.
Details of the Company’s compliance with good corporate governance practices are as follows:
Section 1 Shareholders’ RightsSection 1 Shareholders’ RightsSection 1 Shareholders’ RightsSection 1 Shareholders’ Rights The Board of Directors formulated a written corporate governance policy comprising policies on
protecting the shareholders’ rights and encouraging shareholders to utilize their rights, including basic rights and extra rights, such as the rights to: receive profit contribution in the form of dividends; obtain accurate, adequate and transparent information for making investment decisions; vote on major issues related to the Company; express opinions in the shareholders’ meeting; participate in making decisions regarding major changes in the Company; and electing directors. For the Year 2012, the Company fulfilled the rights of shareholders as follows:
1. Right to Receive Dividends
For the Year 2012, the Company made an interim dividend payment at the rate of Baht 0.35 per share, or a half year payout ratio of 54 %. Such payout ratio exceeded its specified dividend payout policy of at least 40 % of the Company’s earnings after deducting all required legal reserves. For the Year 2011, the Company made a total dividend payment at the rate of Baht 1.17 per share, or a payout ratio of 99.07 %.
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2. Right to Attend the Shareholders’ Meeting 2.1 The Company allowed its shareholders to propose meeting agendas at least 3
months prior to the date of the shareholders’ meeting via the Company’s website. 2.2 The Company allowed its shareholders to submit questions approximately 1 month
prior to the date of the shareholders’ meeting via its website. 2.3 The Company notified shareholders of the resolutions from the meetings of the
Board of Directors regarding date, time, place and meeting agendas 48 days prior to the date of general shareholders’ meeting via the SET ELCID system.
2.4 The Company informed its shareholders via the SET ELCID System that it posted notice of its shareholders’ meeting on its website 32 days prior to the date of each meeting for thorough consideration. In addition, the clarifications and reasons of each agenda will be stated in the notice of shareholders’ meeting. The Company posted notice of the shareholders’ meeting, including relevant information such as date, time, place, and meeting agendas, via its website 32 days prior to the date of meeting as the place for shareholders’ meeting has been prepared for the shareholders’ convenience of transport. In 2013, the Company arranged the place at Anoma Hotel, Rachadamri Road, Bangkok.
2.5 The Company asked Thailand Securities Depository Co., Ltd. (TSD), acting as the Company’s securities registrar, to mail notices of general shareholders’ meetings to all shareholders 15 days prior to the date of each meeting and relevant documents are prepared both Thai and English versions to be enclosed with the Thai version of notice of shareholders’ meeting.
2.6 The Company continually updated information on its website for thorough consideration by its shareholders.
2.7 The Board of Directors facilitated the shareholders’ rights to attend the shareholders’ meeting by prohibiting any acts that may limit or restrict shareholders’ access to Company information or the general shareholders’ meeting. No immediate changes in information provided during the meeting are to be made or ad-hoc meeting agendas proposed. Shareholders who arrive late will be allowed to attend the shareholders’ meeting.
2.8 The chair of the meeting allowed shareholders convenient and adequate time to explain the process of voting and a mean to indicate the result before the meeting will be conducted including offer the opportunities to the shareholders to raise their issues or question. Moreover, there will be the record of questions – answers and the result of voting for each agenda In addition, the meeting allowed shareholders to express their opinion on each agenda item and ask questions at the shareholders’ meeting. The Company disclosed minutes of the meeting for the shareholders’ review via its website. Details of the meeting could also be accessed via video posted on the Company’s website.
2.9 The Board of Directors supports the adoption of technology for the meeting. Consequently, the meeting is conduct rapidly, accurately, and precisely, for example Barcode scanner is used for the registration for shareholders.
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2.10 In the shareholders’ meeting, the chairman of each sub-committee, namely the Chair of the Audit Committee, the Chair of the Nomination Committee, the Chair of the Remuneration Committee and the Chair of the Good Corporate Governance Committee, attends the meeting. Shareholders are allowed to ask questions on relevant issues. The Company had disclosed the minutes of the meeting for the shareholders’ review via its website. Details of the meeting can also be accessed via video posted on the Company’s website.
3. Right to Receive Information and News about the Company.
The Company has long emphasized on disseminating information and news about the Company to its shareholders so that they would know the progress and activities related to the business of the Company for their consideration. The Company disseminated information and news about its operation via the ELCID System and its website. The Company disseminated accurate, quick, fair, reliable and timely information to all stakeholders.
Section 2 Fair and Equal Treatment to ShareholdersSection 2 Fair and Equal Treatment to ShareholdersSection 2 Fair and Equal Treatment to ShareholdersSection 2 Fair and Equal Treatment to Shareholders In the Year 2012, the Company emphasized on the equal treatment of all shareholders with no discrimination against any shareholders. The Company followed the SEC & the SET guidelines of good corporate governance practices. The Company’s general shareholders’ meeting #1/2012 was held on March 30, 2012 details as follows:
Before the MeetingBefore the MeetingBefore the MeetingBefore the Meeting
1. The Company asked Thailand Securities Depository Co., Ltd. (TSD), acting as the Company’s securities registrar, to mail notices of general shareholders’ meetings to all shareholders 15 days prior to the date of each meeting and relevant documents are prepared both Thai and English versions to be enclosed with the Thai and English version of notice of shareholders’ meeting.
2. The Board of Directors formulated a policy allowing minority shareholders who hold no more than 2% of total paid-up shares to propose additional meeting agenda items and names of persons to be elected as the Company’s directors, which is better than SET guidelines that allow only shareholders with a 5% stake to do so, via its website 3 months prior to the date of the general shareholders’ meeting. For 2012, the Company allowed minority shareholders to propose additional meeting agenda items and names of persons to be elected as Company directors via the Company website during the period between February 27, 2012 to March 29, 2012.The Company posted the news on the SET ELCID System on October 17, 2011.
3. In the event that minority shareholders propose additional meeting agenda items; the Board of Directors will include such agenda(s) items in the shareholders’ meeting when it deems that such agenda(s) will benefit most shareholders. However, for the 2012 AGM, no minority shareholders proposed additional meeting agenda items.
4. In cases where the minority shareholders propose the name of a person to be nominated as a director, the Nomination Committee will consider the qualifications of the proposed person in
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accordance with the specified guidelines. In the Year 2012, none of the minority shareholders proposed the name of a person to be nominated as a director.
5. The Board of Directors allowed shareholders to submit questions in advance via the Company’s website prior to the date of the shareholders’ meeting. For the Year 2012, shareholders were allowed to submit questions from October 15, 2011 to January 15, 2012. Nevertheless, no questions were submitted by shareholders.
6. In cases where the shareholders cannot attend the meeting, the Company allows them to appoint a person or an independent director to vote on their behalf as a proxy. For the 2012 AGM, 146 shareholders delegated authority to vote on their behalf.
7. The Company notified resolutions of the BOD meetings regarding date, time, place and meeting agendas 49 days prior to the date of the general shareholders’ meeting via the SET ELCID system.
8. The Company informed its shareholders via the SET ELCID System that it has posted the notice of the shareholders’ meeting on its website 32 days prior to the date of the meeting for their thorough consideration.
9. The Company publicized the shareholders’ meeting information, including the date, time, place, and meeting agenda via its website 32 days prior to the date of the general shareholders’ meeting.
10. The Company asked Thailand Securities Depository (Thailand) Co., Ltd. (TSD), acting as the Company’s securities registrar, to mail the notice of the shareholders’ meeting to the shareholders 15 days prior to the date of the general shareholders’ meeting.
11. The Company posted a newspaper advertisement for at least three consecutive days prior to the date of the shareholders’ meeting to inform shareholders of the meeting.
On the Date of the MeetingOn the Date of the MeetingOn the Date of the MeetingOn the Date of the Meeting
1. The Company facilitates the meeting registration by using a computerized system to aid the registration process.
2. The Company holds the shareholders’ meeting on the date, at the time and in the place that is convenient for shareholders to attend specified in the notice of the shareholders’ meeting. There will be no short notice in relation to changes in the meeting place to avoid shareholders not being able to attend the meeting.
3. The meeting chairman clarifies the quorum, explains the voting, vote-counting and balloting procedures and clearly discloses voting results on each agenda item.
4. There shall be no ad-hoc meeting on agenda items to be proposed by shareholders, who are the Company’s executives.
5. The chair of the meeting will convene the meeting in accordance with the order as specified in the notice of the shareholders’ meeting.
6. The chair of the meeting will allow shareholders to ask questions or express their views in a reasonable and adequate way.
7. The chair of the meeting will urge the use of balloting cards in each meeting agenda item for transparency in vote-counting results.
8. Each shareholder is allowed to exercise his/her rights in electing directors on an individual basis.
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After the MeetingAfter the MeetingAfter the MeetingAfter the Meeting 1. The Company’s Secretary will be responsible for preparing the minutes of the shareholders’ meeting
with opinions of and questions from shareholders. The minutes of shareholders’ meeting would be re-checked for accuracy by the Company’s executives and the Chairman.
2. The Company will publicize the minutes of the shareholders’ meeting in both paper and video formats via its website 7 days after the date of the meeting, so that shareholders who did not attend the meeting, can check and acknowledge details of the meeting on an equal basis.
Preventive Policy regarding Use of Confidential InformationPreventive Policy regarding Use of Confidential InformationPreventive Policy regarding Use of Confidential InformationPreventive Policy regarding Use of Confidential Information
1. The Company has long realized that the use of confidential information by insiders is unfair to shareholders. Thus, the Company formulated a formal policy and asked for cooperation from its directors, management and employees that may be exposed to the Company’s non-public financial information not to trade the Company’s securities 30 days prior to public dissemination of the Company’s quarterly financial performance. In the Year 2012, no directors, management and employees who may be exposed to the Company’s non-public financial information violated the Company’s securities trading policy.
2. Directors and management are required to prepare disclosure reports of their securities holdings and changes in such holdings to the Office of the SEC in accordance with Section 59 of the Securities and Exchange Act. Directors and management are also required to submit such disclosure reports to the Board of Directors. In the Year 2012, all directors and management were in full compliance with such reporting requirements.
3. Any directors and management with any potential conflict of interest with the Company are required to disclose such conflicts to the Board of Directors immediately. No directors or management with potential conflict of interest are allowed to attend the meeting approving the transaction which the Company will enter into with its interested persons. In the Year 2012, none of the directors and management had any potential conflict of interest with the Company.
Section 3 Rights and Roles of StakeholdersSection 3 Rights and Roles of StakeholdersSection 3 Rights and Roles of StakeholdersSection 3 Rights and Roles of Stakeholders 1. The Company shall treat all stakeholders including shareholders, employees, clients, competitors,
creditors, the society and the environment fairly in accordance with applicable laws and mutual agreements they have with the Company, taking into account their basic legal rights.
� Shareholders: Shareholders: Shareholders: Shareholders: The Company put emphasis on generating profitability to provide good
investment returns to all shareholders. The Company’s dividend payment policy is to pay out at least 40% of net profit. The Company has encouraged shareholders to exercise their legal rights and will treat all shareholders equitably. Shareholders shall have the right to receive accurate and updated information on the Company’s operations via its website on a regular basis. The Company’s dividend payout ratio was 54 % for the half of Year 2012 and 99.07 % for the Year 2011; both of which exceeded its specified dividend payment policy.
� Clients:Clients:Clients:Clients: The Company put emphasis on equal and fair treatment of all clients. The Company has provided high-quality services to its clients, keeping their information confidential, and disseminated sufficient, accurate and timely information to them. The Company has provided a
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variety of products and services and continued to improve and develop them to satisfy clients’ needs. In providing services, the Company takes into account the best interests of clients. The Company’s securities trading officers urged their clients to trade with care and thoroughness and consider all relevant information carefully and thoroughly prior to making their investment decisions, not emphasizing their trading volume. This helps to prevent them from investing in manipulated stocks.
� Competitors:Competitors:Competitors:Competitors: The Company treated all of its competitors fairly and equally, and strictly complied with mutual agreements and member agreements as applicable under the relevant SEC and SET rules and regulations and ASCO agreements.
� Creditors:Creditors:Creditors:Creditors: The Company fully complied with all conditions and terms under loan agreements and other agreements it entered into. The Company will never take advantage of, and try to build trust and support with all stakeholders.
� Employees:Employees:Employees:Employees: The Company provided fair and equal treatment and fair compensation, taking into account its operating performance and macroeconomic conditions, to its employees. The Company has provided its employees with good and safe working environments. The Company regularly provides its employees with knowledge on new products and services. Back and front office employees are equipped with knowledge on new financial products and services so that they could continue to provide good services and products to clients.
� Society and environment:Society and environment:Society and environment:Society and environment: The Company regularly contributes to the good of the society and the environment. Regarding contributions to the society, the Company has regularly provided knowledge on investment and savings so that a solid financial foundation could be created for the Thai society. In regards to contributing to the environment, the Company engaged in many activities aimed to protect the environment and to support social and religious activities.
In the Year 2012, the Company complied with its policy to support social and environmental
activities as follows: A. A. A. A. Social ActivitiesSocial ActivitiesSocial ActivitiesSocial Activities
1.1 The Faculty of Law, Thammasat University visited the Company at the Board of Directors’
meeting room 20th floor and Trading Room 21st floor on February 29, 2012. 1.2 The Faculty of Law, Mahasarakham University visited the Company at the Board of Directors’
meeting room 20th floor and Trading Room 21st floor on May 14, 2012. 1.3 Arranged the seminar for investors in the topic of Analysis for Basic elements for Investors at
University of Thai Chamber of Commerce on 29 July 2012. 1.4 The Faculty of Law, the University of the Thai Chamber of Commerce visited the Company at
the Board of Directors’ meeting room 20th floor and Trading Room 21st floor on May 14, 2012. 1.5 Arranged the seminar for investors in the topic of Strategic for Investors coordinated with the
project of Kasetsart University on 30 August 2012. 1.6 Pursue of dream and sharing of love to children who suffer from cancer (Trip to Sattahip
Beach and Khaw Khaew Open Zoo, Chonburi)
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1.7 Arranged the seminar for investors in the topic of Derivatives Warrants by Derivative Department at Dhurakij Pundij University on 12 September 2012
1.8 Charitable activities for students at Bansang School, Phranakorn Sri-Ayutthaya. 1.9 The company’s managements and staffs donated books and bookshelves to children at Wat
Thong Srong Dham School (Sammakkinarumitr) Phranakorn Sri-Ayutthaya together with “SET Volunteer funds for helping flood victims” on 1 November 2012.
1.10 Arranged the seminar for investors in the topic of “Strategic of Investment” together with Faculty of Dentistry, Khon Khaen University at Nithipawee Srisuk Conference Room on 14 November 2012.
1.11 Restoration and Painting Project for the building and toilet for Bansang (Sumrit Phungernanusorn) School, Wang Noi, Phranakorn Sri-Ayutthaya on 2 December 2012.
1.12 Arranged the seminar for investors in the topic of Derivatives Warrants by Derivative Department at University of Thai Chamber of Commerce on 12 December 2012.
1.13 The company’s managements and staffs together with Nanmeebooks donated 20,000 Baht for building the book shelves and donated books for the children in rural areas on 13 December 2012.
1.14 Maybank Kim Eng Securities (Thailand) as a member of the Fund “SET Volunteer funds for helping flood victims” donated bookshelves and children books to Wat Klang Kret school.
B. B. B. B. Human Supporting AcHuman Supporting AcHuman Supporting AcHuman Supporting Activitiestivitiestivitiestivities
2.1 The company’s management together with staff donated blood in a charity drive held by CENTRAL Group of Companies with the National Blood Donor Center, Thai Red Cross Society No.1/2012 on February 9, 2012.
2.2 The company’s management and staff donated blood for a charity held by CENTRAL Group of Companies together with the National Blood Donor Center, Thai Red Cross Society No.2/2012 on May 11, 2012.
2.3 The company’s management and staff donated blood for a charity held by CENTRAL Group of Companies together with the National Blood Donor Center, Thai Red Cross Society No.3/2011 on August 7, 2012.
2.4 The Company’s management and staff donated money for Maybank Kim Eng Philippines staffs and people facing flood in Philippines on August 25, 2102.
2.5 The Company’s management and staff donated drinking water for flood victims in Aranyaprathet on September 21, 2012.
2.6 The Company’s management together with staff donated blood for a charity held by CENTRAL Group of Companies together with the National Blood Donor Center, Thai Red Cross Society No.4/2012 on November 1, 2012.
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C. Environment C. Environment C. Environment C. Environment In the Year 2012, the Company had no disputes with any group of stakeholders and was
in full compliance with its operating policy.
2. The Board of Directors has formulated and implemented clear policies and procedures regarding potential fraudulent activities. Anyone who faces or sees potential fraudulent activities must inform the Compliance Department of these and they will in turn report them to the Audit Committee. All complaints will be kept confidential and the names of persons who make complaints will not be publicly disclosed. However, in Year 2012 there were no complaints in this area.
Section 4 Information Disclosure and TransparencySection 4 Information Disclosure and TransparencySection 4 Information Disclosure and TransparencySection 4 Information Disclosure and Transparency The Company put emphasis on disclosing accurate, sufficient and timely financial data and other
necessary information to the public and all stakeholders on a fair and equal basis via various channels. In doing so, the Company did as follows:
1111.... Efficiency ofEfficiency ofEfficiency ofEfficiency of Information Disclosure Process in accordance with the Rules of Listed Companies Information Disclosure Process in accordance with the Rules of Listed Companies Information Disclosure Process in accordance with the Rules of Listed Companies Information Disclosure Process in accordance with the Rules of Listed Companies The Company has disclosed information in accordance with relevant rules via the SET ELCID System, 56-1 Form, 56-2 Form (Annual Report) and its website in both Thai and English. The Company continually updates such information. For the Year 2012, the Company strictly complied with relevant disclosure rules and was not penalized or sanctioned by relevant regulatory bodies due to improper disclosure of information.
2222.... Quality of FQuality of FQuality of FQuality of Financial Reportsinancial Reportsinancial Reportsinancial Reports The Board of Directors prepared the Report regarding the Responsibility of the Board of Directors for Financial Reports that was accompanied by the Auditor’s Report in the Annual Report. This report is signed by the Chairman, the Chief Executive Officer and the Chief Operating Officer. The Company has disclosed such information on the Company’s website.
3. Investor Relations3. Investor Relations3. Investor Relations3. Investor Relations
3.1 The Board of Directors has set up an Investor Relations Unit that is under the direct control of the Corporate Communications Department. The Investor Relations Unit is responsible for disseminating accurate, complete and timely data and news regarding the Company’s activities to its shareholders, investors, securities analysts and the general public via various forms of media such as brochures, newspaper, radio, television, meetings and the website. The Investor Relations Unit also assists shareholders in case they have difficulty contacting the Company. Investors can contact the Investor Relations Unit at Phone No.0-2658-6300 ext. 7401 - 7402 or by E-mail: [email protected]
3.2 In the Year 2012, the Company’s executives and the Investor Relations Unit provided the Company’s information via 4-5 meetings with local and foreign institutional investors, 5 meetings with investors, securities analysts and mass media during operating results
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periods and 3 times in the annual operating plan announcements, public interview 6 times, as well as in 24 phone conversations.
Section 5 Responsibilities of the Board of DirectorsSection 5 Responsibilities of the Board of DirectorsSection 5 Responsibilities of the Board of DirectorsSection 5 Responsibilities of the Board of Directors 1111.... Composition of the Board of DirectorsComposition of the Board of DirectorsComposition of the Board of DirectorsComposition of the Board of Directors
1.1 The Board of Directors has 9 members comprising of: � 3 executive directors � 6 non-executive directors (3 of whom are independent directors)
The Company has long realized the importance of the appropriate composition of the Board of
Directors, and nominates its directors in such a manner that there is a balance of power between executive and non-executive directors. The composition of the Board of Directors is such that independent directors will work together with directors who represent the major shareholders and executive directors. The number of independent directors accounts for one-third of the total no. of directors, thus being in line with the good corporate governance principles as prescribed by the SET. The Chairman is also an independent director. The number of non-executive directors (6 persons) is higher than that of the executive directors (3 persons), so that independent directors can freely express their opinion and make decisions, and the Board of Directors can perform their duties effectively.
The Board of Directors appoints one secretary to the Board of Directors and one company secretary. The names of directors, and duties and responsibilities of the Board of Directors are shown in the topic “the Board of Directors and Management Structure”
1.2 The Board of Directors consists of experts in many fields who possess a variety of knowledge, capability, professional experience, business moral and loyalty. They are willing to dedicate themselves to the good of the Company.
1.3 Each independent director has terms of holding office of 3 years each. Each independent director cannot hold more than three terms, or more than 9 years. There is an exception to the rule when it is deemed by the shareholders or the Board of Directors that some directors play important roles in the growth and success of the Company. In such cases, the terms of office of such directors can be extended as appropriate. The Company policy regarding directors’ terms of office is clearly specified in its corporate governance policy.
1.4 The Board of Directors have specified qualifications of “Independent Directors” that are in line with new rules and stricter that those required by the SEC and the SET. They are as follows: � Holding shares of not more than 0.5% of all voting rights of the Company, any
companies in the Kim Eng Group or its associated companies; � Not being a member of management, employee, staff member or advisor who receives
a regular compensation from the Company, or controlling person of the Company, any company in the Kim Eng Group and its associated companies, or person with potential conflict of interest for at least one year prior to nomination;
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� Having no business relationship or direct or indirect potential conflict of interest in terms of financial and general management of the Company, any company in the Kim Eng Group, its associated companies and other persons with potential conflict of interest that may interrupt his independent discretion or opinion on the Company’s operations;
� Not being a person who has any legal registered relationship in the form of close relatives, major shareholders or controlling person of the Company, any company in the Kim Eng Group, its associated companies, persons with potential conflict of interest, or persons who are nominated to take care of the interest of major shareholders.
1.5 No directors of the Company can hold a directorship in more than 5 other listed companies including its affiliates which may be unlisted. In case it is necessary for any director of the Company to hold a directorship in more than 5 other listed companies, he must obtain approval from the Board of Directors beforehand. Details regarding holding directorships of directors are disclosed in the topic “the Board of Directors and Management Structure” on P.xxx For 2012, no directors of the Company held directorships in more than 5 other listed companies including its affiliates which may be unlisted.
1.6 There has been a separation of the position between the Chairman and the Chief Executive Officer to create a check and balance mechanism, so that no one has absolute power. The Company has clearly specified roles, powers and duties of each person; the Chairman shall be an independent director and the leader in policy and corporate governance, and the Chief Executive Officer shall be the leader in corporate and business management.
1.7 In case of an expiry in terms for holding office of any director, the Company allows minority shareholders to propose name(s) or person(s) to be nominated as a director (s), provided that such person(s) has the qualifications in line with the Company’s rules. When complete information about the person(s) proposed to be the Company’s director(s) is obtained, the Nomination Committee will consider their qualifications prior to proposing at the shareholders’ meeting for nomination. For the Year 2012, no minority shareholders had proposed the name(s) of person(s) to be nominated as the Company’s director(s).
2222.... The SubThe SubThe SubThe Sub----CommitteesCommitteesCommitteesCommittees
For transparency and independence in performing their duties, most members of the sub-committees are independent directors. Independent directors are appointed as the chair of each sub-committee. Details regarding sub-committees are stated under the section titled “the Board of Directors and Management Structure”
3333.... Roles, Duties and Responsibilities of the Board of Directors Roles, Duties and Responsibilities of the Board of Directors Roles, Duties and Responsibilities of the Board of Directors Roles, Duties and Responsibilities of the Board of Directors 3.1 In the Year 2012, the Board of Directors considered and approved important matters in
relation to the Company’s operations such as formulation of its vision, mission, strategy, financial objective, risk, operation plan and budget. The Board of Directors supervised, controlled and monitored the management to ensure they have run the Company in accordance with the specified policy and plan efficiently and effectively to enhance sustainable economic value for the Company, its shareholders and all stakeholders. Result
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of evaluation of the Company’s performance indicates that it could still maintain a market share of not less than 10 %.
3.2 The Board of Directors communicated the Company’s strategy, objectives and operating results to directors/executives/staff throughout the organization. The Company held a meeting to communicate its strategy, objectives and operating results to executives and management so that they could communicate the message to the departments under their supervision. The Company also communicated important messages via its Intranet System (Keplanet) and E-mail system.
3.3 The Board of Directors also formulated and approved the Company’s written policy on corporate governance. In October 2006, the Board of Directors reviewed said policy. Evaluation of the Company’s compliance with good corporate governance principles indicated that the Company complied with most of the principles, with details as discussed earlier.
3.4 The Board of Directors formulated a written business ethics and professional conduct to be used as reference by directors, executives and staff in managing the Company’s business. Compliance with such written business ethics and professional conduct is closely monitored. For the Year 2011, no market officers were found to have violated the specified Code of Conduct.
3.5 The Board of Directors developed and implemented a clear policy regarding conflict of interest. Good corporate governance policy shall be fully adhered to and accurate information shall be disclosed.
3.6 The Board of Directors developed and implemented a risk management policy for the entire organization. Risk management team shall monitor relevant risk factors and report to the Board of Directors every month, including risk review and assessment at least once a year.
3.7 The Board of Directors developed and implemented internal control and audit systems. The Board of Directors assigned and authorized Internal Audit Department and Compliance Department to conduct audits and report results of the audits to the Audit Committee prior to reporting to the Board of Directors.
4444.... Meeting of the Board of DirectorsMeeting of the Board of DirectorsMeeting of the Board of DirectorsMeeting of the Board of Directors
4.1 The Company’s secretary sets up a meeting schedule for the whole year in advance and informs each director of the meeting schedule so that they can arrange their time to attend the meetings.
4.2 In the Year 2012, the Board of Directors’ meetings were held 6 times. Details of the Board meetings are stated under the topic “the Board of Directors and Management Structure”
4.3 The Chairman and the Chief Executive Officer will co-determine meeting agenda items to be proposed for the Board of Directors’ meeting. Each director could propose a meeting agenda item independently. Each director may propose a meeting agenda to the Chairman via the company secretary or may propose a meeting agenda to the Board of Directors prior to the meeting.
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4.4 Related documents will be sent to all members of the Board of Directors at least 3 days prior to the date of the meeting. For especially important agendas, the relevant documents shall be submitted to directors prior to the meeting in adequate time for their consideration.
4.5 The Board of Directors can invite any relevant executive or personnel for inquiry during the meeting. In the Year 2012, it was found that executive directors are the persons who were in charge of the matters and knowledgeable of all relevant information. Thus, the Board of Directors inquired directly from the executive directors in charge of the matter.
4.6 After the Board of Directors’ meeting, the corporate secretary will arrange the minutes of the meeting and notify the related functions for their further action and report the result of such actions to the Board again for their acknowledgement.
4.7 In each meeting, the Chairman allows each director to express his opinion extensively and freely. Thus, each director may express his opinion extensively and listen to others’ opinions. Each decision is made based on sound rationale and thorough deliberation. Although the Chairman allows each director to express his opinion in the meeting extensively, each director presents his opinion concisely. Thus, it normally takes no more than 3 hours on average to run the meeting, which the Board of Directors views as sufficient to consider each meeting agenda item thoroughly.
4.8 Good corporate governance reports must be approved by the Board of Directors. On October 18, 2007, the Board of Directors’ meeting reached a resolution to establish the Corporate Governance Committee that is responsible for formulating good corporate governance principles, monitoring, evaluating and promoting compliance with the Company’s good corporate governance principles. Thus, the Good Corporate Governance Committee regarded the Year 2008 as “KIM ENG’s good corporate governance year.” The good corporate governance campaign was initiated by various activities to persuade employees to be in compliance with good corporate governance principles.
5555.... SelfSelfSelfSelf----Evaluation by the Board of Directors Evaluation by the Board of Directors Evaluation by the Board of Directors Evaluation by the Board of Directors 5.1 The Board of Directors conducts self-evaluation once a year. Such self-evaluation will be
conducted on an overall basis rather than a person-by-person one. Evaluation will be conducted on the following areas:
• Structure and Qualifications of the Board of Directors • Roles, duties and responsibilities of the Board of Directors • The Meeting of the Board of Directors • Performance of Duties by the Board of Directors • Relationship with Management • Self-Development of Directors and Management Development
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The company secretary is responsible for summarizing the results of evaluation before providing them to the Chairman. The Chairman will inform the results to the meeting of the Board of Directors and consult with all of the directors to correct and improve any deficiencies or weaknesses found from the evaluation.
5.2 For the Year 2012, the Board of Directors conducted self-evaluation on February 7, 2013. Each area is evaluated by each director on a “fair” to “good” level.
6666.... Remuneration and CompensationRemuneration and CompensationRemuneration and CompensationRemuneration and Compensation
6.1 Directors’ remuneration and compensation are determined based on 4 criteria, namely 1) Comparison with the level of remuneration and compensation made to directors of other firms in the securities brokerage business 2) Role and responsibility of each director 3) the Company’s overall operating performance and 4) Dividend payments made to shareholders. Director remuneration shall be considered by the Remuneration Committee and proposed to the Board of Directors and meeting of shareholders. Details of remuneration and compensation made to directors are shown in the topic “the Board of Directors and Management Structure”
6.2 Compensation and remuneration made to the Chief Executive Officer, is determined based on his duties, responsibilities, performance and the Company’s operating performance, to be considered and approved by the Board of Directors. The Board of Directors evaluates the performance of the Chief Executive Officer by comparing the stated operating goals and objectives on an annual basis. During any operating year, the Management will compare the Company’s actual operating performance with the stated operating goals and objectives, and present the result of the comparison in each Board of Directors’ meeting and prior to preparing operating budgets for the next year. The Board of Directors will evaluate the performance of the Chief Executive Officer on an annual basis.
7777.... Corporate Governance Policy and Business EthicsCorporate Governance Policy and Business EthicsCorporate Governance Policy and Business EthicsCorporate Governance Policy and Business Ethics The Board of Directors has emphasized on good corporate governance. The Good Corporate Governance Committee was established to determine and specify monitoring and evaluation guidelines and to promote implementation of, and compliance with, good corporate governance policies. The good corporate governance policies can be classified into 5 sections as follows:
• Shareholders’ Rights • Equal Treatment to Shareholders • Roles of Stakeholders • Disclosure and Transparency • Responsibilities of the Board of Directors
The Company has disseminated its good corporate governance policies via its website to show its intent to operate under the good corporate governance practices to ensure its operation transparency. Employees are given a written good corporate governance manual and urged to work ethically and be in compliance with good corporate governance policies.
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In the Year 2012, compliance with good corporate governance policies was evaluated. The results of evaluation indicate that the Company was in compliance with most of the specified guidelines and policies, except in the area of shareholders’ meeting. This was because some foreign directors did not attend the shareholders’ meeting. However, the Chairman, the Chief Executive Officer, the Chair of the Audit Committee, the Chair of the Remuneration Committee, the Chair of the Nomination Committee and the Chair of the Good Corporate Governance Committee attended the meeting.
8888.... Internal Control and Audit SystemInternal Control and Audit SystemInternal Control and Audit SystemInternal Control and Audit System The Board of Directors has put emphasis on having an efficient and effective internal control system. Approval and operation authorities are developed in written form. Operations of the back and the front office are clearly segregated. The compliance unit, which is under the direct control of the Audit Committee, shall monitor and ensure that the Company has and is in compliance with the prescribed policies and guidelines regarding operating control, financial reporting, information technology as well as applicable rules and regulations as required by competent authorities. The compliance unit shall determine an audit plan that fully covers operations of all functions, and the plan shall be evaluated at least once a year. Sufficiency of internal control systems shall also be evaluated at least once a year as well. In the Year 2011, the Company was in full compliance with its operating policies and applicable rules, regulations and guidelines as prescribed by the relevant authorities.
9999.... Conflict of InterestConflict of InterestConflict of InterestConflict of Interest
The Board of Directors set up a clear policy regarding consideration and approval of matters that may cause conflict of interest. Directors shall disclose their conflict of interest prior to the meeting, if any. Directors are not allowed to attend or vote in the meeting should there be a conflict of interest. In case there may be any transactions or matters with material conflict of interest, the Board of Directors may assign the Audit Committee to consider and propose their opinion to the Board of Directors. In case the Audit Committee has no expertise in considering and providing their opinion regarding the transaction, the Board of Directors may assign an independent expert or the auditor to provide their opinions is regarding the transaction for final consideration and approval by the Board of Directors or the shareholders’ meeting as the case may be. In the year 2012, there was 1 related transaction, and such transactions had been considered by the Audit Committee prior to submitting the proposal to the Board of Directors for consideration. Such related transactions were disclosed in the financial statements. 10101010.... Risk Management PolicyRisk Management PolicyRisk Management PolicyRisk Management Policy The Company may face both internal and external business risks in its operation. To deal with such risks, the Company has continually developed and implemented risk management systems as follows:
Overview of Risk Management Overview of Risk Management Overview of Risk Management Overview of Risk Management
• Risk management at both policy and operating level shall be under the responsibility of each sub-committee.
• Operation of the Company is under the organizational structure, with check and balance mechanisms.
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• Risk management policies and guidelines in each area are in written form for reference by management and employees.
The risk management system is developed on the basis of care and continual improvement, taking into account the best interests of shareholders, clients, employees and the society.
Credit RiskCredit RiskCredit RiskCredit Risk
• Authority to extend margin loans is assigned to some authorized persons and committees. Margin loan extensions will be evaluated on an annual and case-by-case basis.
• Create a unit that is independent from the Front Office to create check and balance mechanisms;
• In extending securities margin to trading clients, the Company will take into account the clients’ financial positions as well as collateral the clients put with the Company;
• The Company will not extend securities margin to risky clients. The Company developed and
implemented clear policies in evaluating and selecting the clients to whom securities margin will be
extended. Policies regarding initial margin and marginable securities are also clearly specified.
• The Company has put emphasis on debt collection.
Market RiskMarket RiskMarket RiskMarket Risk: : : : They can be classified into three categories, namely:
Price RiskPrice RiskPrice RiskPrice Risk
• This is the risk that the value of the Company’s investment portfolio may decline due to decline in the value of debt and equity securities the Company invests in. To deal with this kind of risk, the Company has developed and implemented the so-called “Risk Risk Risk Risk Management Policies and GuidelinesManagement Policies and GuidelinesManagement Policies and GuidelinesManagement Policies and Guidelines----Market RiskMarket RiskMarket RiskMarket Risk” with the aim to specify clear policies regarding securities investment and market risk management. Such policies have specified roles, duties and responsibilities of directors and management regarding investment management, policies regarding securities investment, investment risk diversification, investment loss limit and etc.
• The Company has also developed and implemented the so-called “risk ceiling level”, level of warning signs and stop-loss trigger actions.
Interest Rate RiskInterest Rate RiskInterest Rate RiskInterest Rate Risk • This is the risk caused by a mismatch between the time gap before interest rates can
be reset (for floating-rate contracts) and the term of contracts (for fixed-rate contracts). To deal with this risk, the Financial Department shall be responsible for monitoring changes and movements in interest rates, as announced by many financial institutions, and report to the Chief Financial Officer and other involved officers. This will allow the Company to reset its interest rates in line with changes in market interest rates.
Exchange Rate RiskExchange Rate RiskExchange Rate RiskExchange Rate Risk • The Company has no material assets or liabilities denominated in foreign currencies.
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Liquidity RiskLiquidity RiskLiquidity RiskLiquidity Risk
• In regard to management of liquidity risk, it is realized that NCR is an important tool for measuring and monitoring the Company’s liquidity risk. NCR is also used in specifying the scope of transactions. Thus, the Risk Management Department is assigned to be responsible for closely monitoring NCR figures as prepared by the Accounting Department.
Operational RiskOperational RiskOperational RiskOperational Risk
• As operational risk is embedded in every kind of risk, the Company thus put emphasis on this kind of risk and has developed and implemented some measures to deal with it.
• The organizational structure with clear scope of authority and responsibility of each department and check and balance mechanisms are implemented.
• Standard working procedures in written form are developed and implemented, with the independent Compliance Unit, under the direct control of the Audit Committee, responsible for auditing tasks.
• Creation and implementation of Business Continuity Management (BCM) and Business Continuity Planning (BCP)
The Company has also mitigated and transferred operating risks via insurance policies initiated with
well-known insurance firms with strong financial positions. 11111111.... Development of Directors and ExecutivesDevelopment of Directors and ExecutivesDevelopment of Directors and ExecutivesDevelopment of Directors and Executives
11.1 In the Year 2012, there were changes to the Board. The Company’s secretary prepared the relevant documents and information that are important and necessary for the newly appointed director in acting in the capacity of directorship such as articles of association, rules and regulations regarding roles and duties of directors as specified by competent authorities. Information related to the Company’s business characteristics and operating philosophies would be provided to the newly appointed director so that she can understand her role and duty as a director and overview of the Company’s operations and scope of business.
11.2 The Company has prepared a succession plan for the Chairman and the Chief Executive Officer on both ad-hoc and permanent basis. On an ad-hoc basis, other executives will act in such capacities on a temporary basis. On a permanent basis, the Nomination Committee will consider and appoint qualified personnel later.
11.3 The Company encourages and facilitates training and development for its staff. In 2012, it sent the Company’s secretary, legal officers and compliance officers to attend a training course regarding corporate governance. The Company urged its directors to attend classes aimed at improving and developing their knowledge and understanding the roles, duties and responsibilities of directors.
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♦ Shareholder Structure ♦
1111.... Share Capital of the CompanyShare Capital of the CompanyShare Capital of the CompanyShare Capital of the Company
As at December 31, 2012, the Company had a total registered share capital of Baht 2,861,250,000 with total paid-up capital of Baht 2,854,072,500 comprised of 570,814,500 ordinary shares at par value Baht 5 each. In the Year 2008, the Company established a Treasury Stock plan. As of April 10, 2012, the Company sold out the Treasury Stock.
2222.... ShareholdersShareholdersShareholdersShareholders
The Company’s major shareholder is Maybank Kim Eng Holdings Limited which holds 83.25 % of the Company’s total paid-up capital. The details on the Company’s shareholders as at August 24, 2012 being the latest book closing date are as follows:
No.No.No.No. NameNameNameName No. of Shares No. of Shares No. of Shares No. of Shares HeldHeldHeldHeld
%%%%
1. MAYBANK KIM ENG HOLDINGS LIMITED 475,182,790 83.25 2. MS.PIYASRI TANTIWATTANA 6,846,000 1.20 3. THAI NVDR CO.,LTD 4,120,033 0.72 4. MAYBANK KIM ENG SECURITIES PTE. LTD. 1,440,800 0.25 5. MR.PRASART MAHAKIJSIRI 1,418,000 0.25 6. MR.THITIKORN SEARTRIKRID 1,300,000 0.23
7. MRS.NANTHAYA APITHANOTHAI 1,244,500 0.22
8. MR.THAWAT THEAWATTANASUK 1,000,000 0.18 9. MR.CHEARN DUANPATTRA 840,000 0.15 10. MR.CHUWIT CHITSAKUL 792,000 0.14 11. OTHERS 76,629,577 13.42
TotalTotalTotalTotal 570,814,500570,814,500570,814,500570,814,500 100100100100....00000000
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As at December 31, 2012, Maybank Kim Eng Holdings Limited is a wholly-owned subsidiary of MAYBAN IB HOLDINGS SDN BHD
MAYBAN IB HOLDINGS SDN BHD is a company incorporated in Malaysia and is a wholly-owned subsidiary of MALAYAN BANKING BERHAD.
As at December 31, 2012, MALAYAN BANKING BERHAD has 10,000,000,000 registered shares and paid up 8,440,046,735 common shares. Its top-10 major shareholders as at 31 December 2012 are as follows:
No.No.No.No. NameNameNameName No. of Shares HeldNo. of Shares HeldNo. of Shares HeldNo. of Shares Held %%%%
1. AmanahRaya Trustees Berhad (B/O : Skim Amanah Saham Bumiputera) 3,425,319,993 40.58
2. Citigroup Nominees (Tempatan) Sdn Bhd (B/O : Employees Provident Fund Board) 1,189,509,324 14.09
3 Permodalan Nasional Berhad 428,411,518 5.08 4. Lembaga Kemajuan Tanah Persekutuan (FELDA) 178,039,898 2.11 5. Kumpulan Wang Persaraan (Diperbadankan) 149,377,476 1.77
6. AmanahRaya Trustees Berhad (B/O : Amanah Saham Wawasan 2020)
137,994,435 1.63
7. Cartaban Nominees (Asing) Sdn Bhd (B/O : Exempt AN for State Street Bank & Trust Company (West Clt OD67))
128,615,893 1.52
8. AmanahRaya Trustees Berhad (B/O : Amanah Saham Malaysia)
102,900,000 1.22
9. HSBC Nominees (Asing) Sdn Bhd (B/O : BBH and Co Boston for Vanguard Emerging
Market Stock Index Fund) 78,968,488 0.94
10. Cartaban Nominees (Tempatan) Sdn Bhd (B/O : Exempt AN for Eastpring Investment Berhad)
64,198,919 0.76
Total top 10 major shareholdersTotal top 10 major shareholdersTotal top 10 major shareholdersTotal top 10 major shareholders 5555,,,,883,335,944883,335,944883,335,944883,335,944 69.7069.7069.7069.70 Remark: AmanaRaya Trustees Berhad holds the legal title to the Malayan Banking Berhad share as trustee for several
unit trust funds. Investors in those unit trust funds comprise the Malaysian public.
3333.... Dividend Payment PolicyDividend Payment PolicyDividend Payment PolicyDividend Payment Policy
The Company has the policy of making dividend payment at a rate not less than 40% of its net profit after deduction of all reserves as specified by the Company. Dividend payment made each year depends upon the Company’s investment plan, necessity and situation in the future. The Board of Directors can propose the final dividend payment during its board meeting and present to shareholders during a shareholders’ meeting for approval. The Board of Directors is authorized to decide an interim dividend payment, but needs to inform the shareholders at the next shareholders’ meeting.
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♦ Committees and Management Structure♦
The Company’s management structure is comprised of the Board of Directors, the Executive Committee, the Audit Committee and the Risk Management Committee. All of the Company’s directors and management are qualified in accordance with Section 68 of the Public Limited Companies Act B.E.2535 and the Notification of the Securities & Exchange Commission No. Kor Jor 12/2543 regarding Obtaining for Approval and Approval for Issuance of Ordinary Shares dated March 22, 2000. The Company’s management structure consists of the following sub-committees:
1111.... The Board of DirectorsThe Board of DirectorsThe Board of DirectorsThe Board of Directors As at December 31, 2012, the Company’s Board of Directors comprised of 9 directors as follows:
NameNameNameName TitleTitleTitleTitle 1. Mr. Yuth Vorachattarn Chairman and Member of the Audit Committee 2. Tengku Dato’ Zafrul Bin Tengku Abdul Aziz* Director 3. Mr. Ronald Anthony Ooi Thean Yat Director 4. Mr. Montree Sornpaisarn Director 5. Mr. Pusit Kaewmongkolsri Director 6. Mrs. Hamidah Binti Moris* Director 7. Ms. Boonporn Boriboonsongsilp Director 8. Assoc.Prof.Dr. Paiboon Sareewiwatthana Director and Chairman of the Audit Committee 9. Assoc.Prof.Dr. Preecha Jarungidanan Director and Member of the Audit Committee * Approved by the SEC on February 16, 2012. Tengku Dato’ Zafrul Bin Tengku Abdul Aziz and Mrs. Hamidah
Binti Moris replaced Mr. Judd Clark Kinne and Mr. Tan Pei-San, who resigned from directorship effective from February 16, 2012.
Mr. Waranchai Jensiriwanich acts as the Corporate Secretary.
Authorized Directors who can sign on behalf of the CompanyAuthorized Directors who can sign on behalf of the CompanyAuthorized Directors who can sign on behalf of the CompanyAuthorized Directors who can sign on behalf of the Company The Authorized directors who can sign on behalf of the Company are any two of the following five directors, provided that they jointly sign with the Company’s seal affixed: Mr. Ronald Anthony Ooi Thean Yat or Tengku Dato’ Zafrul Bin Tengku Abdul Aziz or Mr. Montree Sornpaisarn or Mr. Pusit Kaewmongkolsri or Mrs. Boonporn Boriboonsongsilp.
Scope of Power and Duties of the Board of DirectorsScope of Power and Duties of the Board of DirectorsScope of Power and Duties of the Board of DirectorsScope of Power and Duties of the Board of Directors
1. To manage the Company’s operations to ensure compliance with the objectives and articles of association of the Company and resolutions of the Company’s meeting of shareholders with honesty and due care for the interests of the Company.
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2. To set goals, guidelines, policies, operating plans and budget of the Company, control and supervise the administration of the Executive Committee to ensure the management has performed competently and in compliance with the policies prescribed in an efficient manner. Exceptions to this are transactions such as increase/decrease of capital, issuance of debentures, selling or transferring the business of the Company in whole or in major part, buying or taking control of other companies, amending the memorandum of association or articles of association, and giving benefits to directors. In such matters, the Board of Directors needs to obtain approval from a shareholders meeting prior to carrying out such transactions.
3. The Board of Directors may, as deemed appropriate, elect some directors and management as members of the Management Committees, provided that they shall have power and duties to conduct the Company’s business as delegated and authorized by the Board of Directors. The Board of Directors shall elect one member of the Management Committee as Chairman of the Management Committee.
In the year 2012, the Board of Directors held 6 meetings. In line with the Company’s best practice, there
must be at least two-thirds of the Board of Directors’ members attending each session.
Details of the Board of Directors’ Meeting.Details of the Board of Directors’ Meeting.Details of the Board of Directors’ Meeting.Details of the Board of Directors’ Meeting.
NameNameNameName Number of AttendanceNumber of AttendanceNumber of AttendanceNumber of Attendance 1. Mr. Yuth Vorachattarn 6 / 6 2. Tengku Dato’ Zafrul Bin Tengku Abdul Aziz 2 / 6 3. Mr. Ronald Anthony Ooi Thean Yat 2 / 6 4. Mr. Montree Sornpaisarn 6 / 6 5. Mr. Pusit Kaewmongkolsri 6 / 6 6. Mrs. Hamidah Binti Moris 3 / 6 7. Ms. Boonporn Boriboonsongsilp 6 / 6 8. Assoc.Prof.Dr. Paiboon Sareewiwatthana 6 / 6 9. Assoc.Prof.Dr. Preecha Jarungidanan 6 / 6
Scope of Duties and Responsibilities of the Corporate SecretaryScope of Duties and Responsibilities of the Corporate SecretaryScope of Duties and Responsibilities of the Corporate SecretaryScope of Duties and Responsibilities of the Corporate Secretary
1. Prepare and maintain the following documents: a. Directors' Registry b. Notices for the Board of Directors' Meetings, Minutes of the Board of Directors’ Meetings
and Annual Report of the Board of Directors c. Notices for the Shareholders' Meetings and Minutes of the Shareholders’ Meetings
2. Maintain the Report on Stake Holdings of Directors and Management. 3. Carry out other tasks as assigned by the Board of Directors.
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2222.... The Executive Committee (EXCO)The Executive Committee (EXCO)The Executive Committee (EXCO)The Executive Committee (EXCO) As at December 31, 2012, the Company’s Executive Committee is comprised of 8 members as
follows:
NameNameNameName TitleTitleTitleTitle 1. Mr. Montree Sornpaisarn Chairman of the Executive Committee 2. Ms. Boonporn Boriboonsongsilp Member of the Executive Committee 3. Mrs. Hamidah Binti Moris Member of the Executive Committee 4. Mr. Shahrul Nazri Abdul Rahim Member of the Executive Committee 5. Mrs. Eunice Ho Member of the Executive Committee 6. Mr. Pusit Kaewmongkolsri Member of the Executive Committee 7. Mr. Keat Jin Goh Member of the Executive Committee 8. Mr. Giles Ong Member of the Executive Committee
Scope of Power and Duties of the Executive CommitteeScope of Power and Duties of the Executive CommitteeScope of Power and Duties of the Executive CommitteeScope of Power and Duties of the Executive Committee
The EXCO shall function as the highest management approving authority of Thailand’s Management
Committees. Its key functions, activities and authorities shall include but not be limited to the following:
1. To provide the strategic direction of critical projects and future business growth.
2. To review and endorse planning and resource allocation activities in support of critical initiatives
including investment commitments and procurement activities.
3. To review and endorse business plans / proposals of the respective business units.
4. To approve the development and launch of new products and / or services.
5. All financial matters of Thailand, within its authority, including capital management.
6. To consider and / or participate in business partnerships, joint ventures, mergers and acquisitions for
Thailand.
7. Procurement activities for purchases of assets, services, resources etc., in excess of delegated
country and/or individual authorities.
8. Divestment of assets and investments in excess of delegated country and/or individual authorities.
9. Internal restructuring, dissolution and / or amalgamation activities of both the business and
operational functions of Thailand.
10. Human resource related matters including the recruitment, removal, reassignment, etc of senior
management and office bearers in excess of delegated country and/or individual authorities.
11. To participate in setting and reviewing significant key performance indicators in order to monitor the
quality and performance of Thailand’s businesses and operations.
12. Remuneration and compensation packages for senior staff and office bearers in excess of delegated
country and/or individual authorities.
13. Maybank Kim Eng Group related matters, impacting Thailand.
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14. Deliberate and monitor the resolution progress and / or closure of both supervisory concerns and
internal audit / review findings.
15. Organization of public relations and / or marketing campaigns in excess of delegated country and /
or individual authorities.
16. Oversight of country’s management committees and Terms of Reference.
17. Any other matters as instructed by the Board.
The EXCO does not have the power to approve any transactions or matters where there is a conflict of interest with the Company or its subsidiary (if any). Disclosure of transactions with conflict of interest must be made to the Board of Directors for consideration.
Scope of Power and Duties of the EXCO is in accordance with guidelines for granting power by the Board of Directors that was authorized by the Board of Directors’ meeting no. 2/2012 held on May 3, 2012.
Any matters that are beyond the scope as specified above will not be under the EXCO’s responsibility unless so authorized by the Board of Directors on a case-to-case basis.
For the Year ended December 31, 2012, the EXCO held 6 meetings, and in each meeting, at least two-thirds of the Management Committee members attended the meeting.
3333.... Audit CommitteeAudit CommitteeAudit CommitteeAudit Committee
The Audit Committee comprises of 3 directors as follows:
NameNameNameName TitleTitleTitleTitle 1. Assoc.Prof. Dr. Paiboon Sareewiwatthana Chairman of the Audit Committee
2. Assoc.Prof. Dr. Preecha Jarungidanan Member of the Audit Committee 3. Mr. Yuth Vorachattarn Member of the Audit Committee
Scope of Duties and Responsibilities of the Audit Committee Scope of Duties and Responsibilities of the Audit Committee Scope of Duties and Responsibilities of the Audit Committee Scope of Duties and Responsibilities of the Audit Committee
1. Review the Company’s financial reports to ensure their accuracy and sufficient disclosure of information by coordinating with external auditors and management responsible for preparing quarterly and yearly financial reports. The Audit Committee may suggest issues or matters to be included for review or audit by the external auditors while auditing of the Company is proceeding;
2. Review adequacy and effectiveness of internal control system and internal audit function, consider independence of internal audit function and approve nomination, transfer and relinquishment of position of head of internal audit function or other functions related to internal audit;
3. Review the Company’s compliance with the Securities and Stock Exchange Act, rules and regulations of the Stock Exchange of Thailand or other laws relating to securities businesses;
4. Consider and advise on appointment of the external auditor of the Company, including the audit fee by considering the credibility, the adequacy of existing resources, the firm’s performance and experience of its professional staff. The Audit Committee has to participate in meeting with the external auditor without management participation at least once a year;
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5. Consider connected transactions or other transactions with potential conflict of interest to ensure they are conducted properly in accordance with relevant SET rules for the best interest of the Company;
6. Conduct any other matters assigned by the Board of Directors and agreed by the Audit Committee such as reviewing the Company’s financial and risk management policies, reviewing compliance with the Code of Conduct by the management and reviewing all important reports in conjunction with the management to be disclosed to the public as required by law (e.g. management report and management, discussion and analysis (MD&A));
7. Report activities of the Audit Committee in the Company’s annual report signed by the Chairman of the Audit committee. Such reports should include the following information:
- Opinion on accuracy, completeness and reliability of the Company’s process of reporting and disclosing financial information;
- Opinion on sufficiency of the Company’s internal control system; - Supporting reasons whether or not the Company’s external auditors should be re-appointed; - Opinion on the Company’s compliance with the Securities and Stock Exchange Act, rules and
regulations of the Stock Exchange of Thailand or other laws relating to its businesses; - Other reports deemed appropriate to be disclosed to shareholders and general investors as
assigned by the Board of Directors.
In 2011, the Audit Committee held 8 meetings, with details as follows:
MeetingMeetingMeetingMeeting Assoc.Prof.Dr.Assoc.Prof.Dr.Assoc.Prof.Dr.Assoc.Prof.Dr. Paiboon Paiboon Paiboon Paiboon
SareewiwatthanaSareewiwatthanaSareewiwatthanaSareewiwatthana
Assoc.Prof.Dr.Assoc.Prof.Dr.Assoc.Prof.Dr.Assoc.Prof.Dr. Preecha Preecha Preecha Preecha
JarunggidananJarunggidananJarunggidananJarunggidanan
Mr.Yuth Mr.Yuth Mr.Yuth Mr.Yuth VorachattarnVorachattarnVorachattarnVorachattarn
AuditorAuditorAuditorAuditor No.No.No.No. Date of Date of Date of Date of MeetingMeetingMeetingMeeting
1/2012 30/01/2012 � � � �(Auditing 2011
Financial Statements)
2/2012 21/03/2012 � � � -
3/2012 25/04/2012 � � � �(Reviewing
Q1/12 Financial Statements)
4/2012 13/06/2012 � � � -
5/2012 25/07/2012 � � � �(Reviewing
Q2/12 Financial Statements)
6/2012 12/09/2012 � � � -
7/2012 29/10/2012 � � � �(Reviewing
Q3/12 Financial Statements)
8/2012 18/12/2012 � � � -
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4444.... The Nominating CommitteeThe Nominating CommitteeThe Nominating CommitteeThe Nominating Committee The Nominating Committee was set up in accordance with the resolution of the Board of Directors’
meeting No.2/2549 held on February 21, 2006. The Nominating Committee is comprised of 5 directors as follows: NameNameNameName TitleTitleTitleTitle
1. Assoc.Prof.Dr. Preecha Jarungidanan Chairman of the Nominating Committee and Independent Director
2. Assoc.Prof.Dr. Paiboon Sareewiwatthana Member of the Nominating Committee and Independent Director
3. Mr. Yuth Vorachattarn Member of the Nominating Committee and Independent Director
4. Tengku Dato’ Zafrul Bin Tengku Abdul Aziz* Member of the Nominating Committee 5. Mrs. Hamidah Binti Moris* Member of the Nominating Committee
* Was appointed as member since February 16, 2012
Scope of Duties and Responsibilities of the Nominating CommitteeScope of Duties and Responsibilities of the Nominating CommitteeScope of Duties and Responsibilities of the Nominating CommitteeScope of Duties and Responsibilities of the Nominating Committee
1. To nominate qualified candidates as new directors or CEO.
2. To determine the procedures and criteria for nomination of Company’s directors or CEO and ensure the procedures are made on a transparent basis.
In 2012, the Nominating Committee held 1 meeting, with details as follows:
NameNameNameName No.1/2012 No.1/2012 No.1/2012 No.1/2012 on on on on February 8, 201February 8, 201February 8, 201February 8, 2012222
Assoc.Prof.Dr. Preecha Jarungidanan �
Assoc.Prof.Dr. Paiboon Sareewiwatthana �
Mr. Yuth Vorachattarn �
Tengku Dato’ Zafrul Bin Tengku Abdul Aziz -
Mrs. Hamidah Binti Moris -
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5555.... Other CommitteesOther CommitteesOther CommitteesOther Committees 5.1 The Compensation Committee5.1 The Compensation Committee5.1 The Compensation Committee5.1 The Compensation Committee
The Company’s Compensation Committee is comprised of 5 directors as follows:
NameNameNameName TitleTitleTitleTitle
1. Assoc.Prof.Dr. Paiboon Sareewiwatthana Chairman of the Compensation Committee and Independent Director
2. Assoc.Prof.Dr. Preecha Jarungidanan Member of the Compensation Committee and Independent Director
3. Mr. Yuth Vorachattarn Member of the Compensation Committee and Independent Director
4. Tengku Dato’ Zafrul Bin Tengku Abdul Aziz* Member of the Compensation Committee 5. Mrs. Hamidah Binti Moris* Member of the Compensation Committee * Was appointed as member since February 16, 2012
The Compensation Committee is responsible for formulating the Company’s policies with regard to employment and compensation for employment or termination of employment to be granted or awarded to the Company’s employees or directors, and determining the level of compensation and other remunerations to be granted to employees and directors.
Scope of Power and Duties of the Compensation CommitteeScope of Power and Duties of the Compensation CommitteeScope of Power and Duties of the Compensation CommitteeScope of Power and Duties of the Compensation Committee
� To determine and set fair and clear compensation of any kind to be granted or awarded to directors and employees of the Company:
� To consider granting or awarding compensation of any kind to management as appropriate, including payment of bonus and payment in the form of securities granting:
� To conduct any activities deemed necessary and appropriate in conforming with compensation policy regarding form, procedures and details about allocating of securities to employees.
The Chairman of the Compensation Committee would be responsible for providing any information necessary for conducting research in regard to employment to external advisors freely.
The Compensation Committee would be responsible for controlling expenses incurred to employ such independent external advisors as well as considering and reviewing appropriate compensation rate, taking into account all relevant factors.
The Compensation Committee would specify compensation base, increase in compensation and the overall compensation policy. The Compensation Committee will report such matters directly to the Board of Directors and provide opinion on the compensation to be made to senior management.
The Compensation Committee would accept and listen to opinion as provided by the CEO and the COO, and provide recommendations to the Board of Directors for approval.
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In the year 2012, the Compensation Committee held two meetings, with details as follows:
NameNameNameName No.1/2012 on No.1/2012 on No.1/2012 on No.1/2012 on February 8, 2012February 8, 2012February 8, 2012February 8, 2012
No.2/2012 on No.2/2012 on No.2/2012 on No.2/2012 on July 30, 2012July 30, 2012July 30, 2012July 30, 2012
Assoc.Prof.Dr. Paiboon Sareewiwatthana � �
Assoc.Prof.Dr. Preecha Jarungidanan � �
Mr. Yuth Vorachattarn � �
Tengku Dato’ Zafrul Bin Tengku Abdul Aziz - �
Mrs. Hamidah Binti Moris - �
5.2 The Good Corporate Governance Committee5.2 The Good Corporate Governance Committee5.2 The Good Corporate Governance Committee5.2 The Good Corporate Governance Committee The Good Corporate Governance Committee was set up in accordance with the resolution of the
Board of Directors’ meeting No.6/2007 held on November 18, 2007. The Good Corporate Governance Committee consists of the members as follows:
NameNameNameName TitleTitleTitleTitle
1. Mr. Yuth Vorachattarn Chairman of the Good Corporate Governance Committee
2. Assoc.Prof.Dr. Preecha Jarungidanan Member of the Committee 3. Assoc.Prof.Dr. Paiboon Sareewiwatthana Member of the Committee 4. Mr. Montree Sornpaisarn Member of the Committee 5. Mr. Waranchai Jensiriwanich Secretary of the Committee
Scope of Duties and Responsibilities of the Good Corporate Governance Committee Scope of Duties and Responsibilities of the Good Corporate Governance Committee Scope of Duties and Responsibilities of the Good Corporate Governance Committee Scope of Duties and Responsibilities of the Good Corporate Governance Committee
1. Determine good corporate governance principles and business ethics & professional conducts of directors, executives and employees;
2. Monitor, evaluate the result of conformance with good corporate governance principles and business ethics & professional conduct by of directors, executives and employees and provide any suggestions regarding such matters;
3. Arrange any activities to encourage directors, executives and employees to understand more about good corporate principles and realize the necessity to conform to specified business ethics and professional conduct;
4. To ensure full and fair disclosure of conformance with good corporate governance principles in the Company’s annual report.
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ManagementManagementManagementManagement
As of December 31, 2012, the Company has 10 members of management as follows:
NameNameNameName TitleTitleTitleTitle
1. Mr. Montree Sornpaisarn Chief Executive Officer 2. Mrs. Boonporn Boriboonsongsilp Chief Executive Officer Retail Business Development 3. Mr. Pusit Kaewmongkolsri Chief Operating Officer Acting Chief Financial Officer 4. Mr. Vichet Pornsinsiriruk* Chief Information & Technology Officer 5. Mr. Kosit Boonroungkaw Managing Director, Securities Retail Business 6. Mr. Andrew Stotz Managing Director, International Business 7. Mr. Vikas Chandra Kawatra Managing Director, Foreign Institution Sales Department 8. Mr. Sukit Udomsirikul** Managing Director, Research Department 9. Ms. Aim-On Pinthawiruth Senior Vice President, Accounting Department 10. Ms. Kanokwan Preuksathamakovit*** Vice President, Finance Department
Management who are not under SEC definition
1. Mrs. Pei Nai Ho Member of the Executive Committee 2. Mr. Shahrul Nazri Bin Abdul Rahim Member of the Executive Committee 3. Mr. Keat Jin Goh Member of the Executive Committee 4. Mr. Giles Ong Kah Pin Member of the Executive Committee
* Mr. Vichet Pornsinsiriruk is in the position of Chief Information & Technology Officer since July 16, 2012. ** Mr. Sukit Udomsirikul is in the position of Managing Director, Research Department since October 1, 2012. ** Ms. Kanokwan Preuksathamakovit is in the position of Vice President since August 1, 2012.
NameNameNameName TitleTitleTitleTitle
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1111.... Management CompensationManagement CompensationManagement CompensationManagement Compensation
A. Monetary CompensationA. Monetary CompensationA. Monetary CompensationA. Monetary Compensation
Director’s Compensation
Director’s compensation was determined on a fair and reasonable basis. The Remuneration Committee reviewed director’s compensation, taking into account responsibility of each director, the Company’s financial condition as well as level of compensation paid relative to those made by other companies in the same industry. Director’s compensation consists of meeting allowance and gratuity that were authorized and approved by the shareholders’ meeting.
For the year 2012, the Company’s Board of Directors comprised of 9 directors, and the Company made compensation to all directors in the form of meeting allowances in the total amount of THB 3,600,000 and a director’s gratuity (for the company performance year 2011) a total amount of THB 5,000,000. For the total amount of director’s gratuity, a total of THB 5,000,000 was only paid to 3 members of the Audit Committee. Details of director’s compensation are as follows:
Unit: Unit: Unit: Unit: THBTHBTHBTHB
Compensation for the Compensation for the Compensation for the Compensation for the Year 201Year 201Year 201Year 2012222
Gratuity for the Year Gratuity for the Year Gratuity for the Year Gratuity for the Year 2012012012011111
1. Mr. Yuth Vorachattarn 2,400,000 2,200,000
2. Tengku Dato’ Zafrul Bin Tengku Abdul Aziz - - 3. Mr. Ronald Anthony Ooi Thean Yat - - 4. Mr. Montree Sornpaisarn - - 5. Ms. Boonporn Boriboonsongsilp - - 6. Mr. Pusit Kaewmongkolsri - - 7. Mrs. Hamidah Binti Moris - - 8. Assoc.Prof.Dr. Preecha Jarunggidanan 600,000 1,400,000
9. Assoc.Prof.Dr. Paiboon Sareewiwatthana 600,000 1,400,000
10. Mr. Judd Clark Kinne - -
11. Mr. Tan Pei-San - -
TotalTotalTotalTotal 3,600,003,600,003,600,003,600,000000 5,000,0005,000,0005,000,0005,000,000 * Mr. Judd Clark Kinne and Mr. Tan Pei-San resigned as director in 2012
Management’s Compensation
For the year 2012 ended December 31, 2012, the Company made compensation to 8 management (under the SEC definition) (excluding Senior Vice President of the Accounting Department and the Finance Department) and Mr. Ong Cheow Kheng (as a Advisor) in the form of salary and bonus for the total amount of THB 203.10 million and contribution to the provident fund for a total amount of THB 1.29 million.
B.B.B.B. Other CompensationOther CompensationOther CompensationOther Compensation
No other compensation was paid.
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2222.... Corporate GovernanceCorporate GovernanceCorporate GovernanceCorporate Governance
The Board of Directors has a policy to adhere strictly to the Code of Best Practices for Directors of Listed Company as prescribed by the Stock Exchange of Thailand.
The Company applies Principles of Good Corporate Governance throughout the organization. It has also set up good corporate governance culture starting by providing knowledge and understanding of good corporate governance to employees through various means so that the employees will realize the importance of such culture and integrate them in their work practices to ensure transparency and standardization. This will be a basic principle before moving on to further development. The Company’s progress in implementing good corporate governance practices will be evaluated periodically.
3333.... Protection of Usage of Inside InformationProtection of Usage of Inside InformationProtection of Usage of Inside InformationProtection of Usage of Inside Information The Company has a policy to prohibit management from using inside information regarding its
operation result and financial condition yet to be disclosed to the public for securities trading and for their own interests. The Company informed its management of their obligations in regard to disclosure of their holdings of securities of the Company in accordance with Section 59 and penalties as set out in Section 275 of the SEC Act B.E. 2535
Further to this, the Company has also implemented other preventive measures with regard to usage of inside information including:
1. The Compliance Department will closely check and monitor Investment Banking Department Staffs (IB Staffs) possessing material nonpublic information yet to be disclosed to the public. Names of the clients’ firms which possess sensitive information and will be put under the “Watch List”. In addition, any IB staffs whom possess material nonpublic information regarding their corporate clients are prohibited from divulging such information to outsiders and trading on such securities (in case corporate clients are listed firms).
2. In case the Company acting as the financial advisor for public offering of shares or for acquiring listed firms, names of client firms will be notified to the Compliance Department, and all IB staff will be prohibited from trading securities of such client firms.
3. The Company has a policy to put a “Chinese Wall” between the Investment Banking Department and other departments. IB staffs are prohibited from divulging non-public information regarding corporate clients to securities marketing officers and securities research staff prior to an appropriate time.
4. In case where the Research Department has prepared research reports based on interviews with listed firms’ management, the Compliance Department will add the names of listed firms for which the Research Department has prepared research reports under a “Watch List” to check whether any involved persons is taking advantage of inside information.
5. In case the Research Department has prepared research reports for any listed firms, the Compliance Department will put the names of listed firms for which the Research Department has prepared research reports under “Restricted List”, and all the Company’s staff will be prohibited from trading such securities three days prior to public dissemination of such reports.
♦Committees and Management Structure♦ ♦♦♦♦Annual Report 2012♦♦♦♦
Pages 36 Back to ContentBack to ContentBack to ContentBack to Content
6. The Company’s management are required to disclose their holdings of securities of the Company in accordance with Section 59 and penalties as set out in Section 275 of the SEC Act B.E. 2535
7. Any Company’s management or departments who obtain inside information regarding the Company are prohibited from divulging such information to outsiders or non-related persons, and from trading in the Company’s securities one month prior to public dissemination of the Company’s financial statements.
♦Committees and Management Structure♦ ♦♦♦♦Annual Report 2012♦♦♦♦
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• Personal Data of the Company’s Directors and ManagementPersonal Data of the Company’s Directors and ManagementPersonal Data of the Company’s Directors and ManagementPersonal Data of the Company’s Directors and Management Board of DirectorsBoard of DirectorsBoard of DirectorsBoard of Directors
Name andName andName andName and
Position at the CompanyPosition at the CompanyPosition at the CompanyPosition at the Company
AgeAgeAgeAge EducationEducationEducationEducation % of Share % of Share % of Share % of Share Holding Holding Holding Holding
as of Dec 31, as of Dec 31, as of Dec 31, as of Dec 31, 2012* 2012* 2012* 2012*
(Change in No. of (Change in No. of (Change in No. of (Change in No. of Shares Held Shares Held Shares Held Shares Held
during the Year)**during the Year)**during the Year)**during the Year)**
Family Relationship Family Relationship Family Relationship Family Relationship among among among among
managementmanagementmanagementmanagement
Work ExperiencesWork ExperiencesWork ExperiencesWork Experiences
PeriodPeriodPeriodPeriod Position and CompanyPosition and CompanyPosition and CompanyPosition and Company
1. Mr. Yuth Vorachattarn Chairman and Member of the Audit Committee
64 Master Degree in Economics, (Good Honor) Thammasat University Bachelor Degree in Economics (English Program), Thammasat University The Thai Institute of Directors Association: DCP #0
-
None Oct.02-present Nov. 09-present Jul.03 - present Jul.04 - present Jul.05 - present April 11 - present Aug.02 – 2005 Jul. 01 - Mar.02
Chairman and Member of the Audit Committee, Maybank Kim Eng Securities (Thailand) Plc. Chairman and Chairman of the Audit Committee, Kim Eng Asset Management Co.,Ltd Chairman, Siam Panich Leasing Plc. Chairman, Preecha Group Plc. Chairman of the Audit Committee, Saha Thai Steel Pipe Plc. Chairman of the Audit Committee, Taokaenoi Food&Marketing Co.,Ltd. Chairman, Family Know How Co., Ltd. Managing Director, Bangkok Metropolitan Bank.
♦Committees and Management Structure♦ ♦♦♦♦Annual Report 2012♦♦♦♦
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Name andName andName andName and
Position at the CompanyPosition at the CompanyPosition at the CompanyPosition at the Company
AgeAgeAgeAge EducationEducationEducationEducation % of Share % of Share % of Share % of Share Holding Holding Holding Holding
as of Dec 31, as of Dec 31, as of Dec 31, as of Dec 31, 2012* 2012* 2012* 2012*
(Change in No. of (Change in No. of (Change in No. of (Change in No. of Shares Held Shares Held Shares Held Shares Held
during the Year)**during the Year)**during the Year)**during the Year)**
Family Relationship Family Relationship Family Relationship Family Relationship among among among among
managementmanagementmanagementmanagement
Work ExperiencesWork ExperiencesWork ExperiencesWork Experiences
PeriodPeriodPeriodPeriod Position and CompanyPosition and CompanyPosition and CompanyPosition and Company
2. Mr. Ronald Ooi Thean Yat Authorized Director
59 Certified Public Accountant, The Institute of Chartered Accountants. Bachelor of Economics, University of New England, Australia
-
None Aug. 98-present 2012-present Jan. 89- 2012
Director, Maybank Kim Eng Securities (Thailand) Plc. Advisor, Maybank Investment Bank Group Director, Maybank Kim Eng Holdings Limited.
3. Mr. Montree Sornpaisarn Chief Executive Officer and Authorized Director
48 Chartered Financial Analyst (CFA) MBA (Finance), Thammasat University Bachelor Degree in Engineering, Chulalongkorn University The Thai Institute of Directors Association: DAP #21/2004
-
None Oct.01 - present Mar. 08 – Jun. 11 Apr. 07 – April 11 May 05 – Jan 10 Feb.00 - Sept.01 Sept.98 - Jan.00
Director and Chief Executive Officer, Maybank Kim Eng Securities (Thailand) Plc. Director and Member of Audit Committee, WAVE Entertainment Plc. Director, Thailand Listed Companies Association Executive Director, Association of Securities Companies Managing Director (Investment Banking), Vickers Ballas (Thailand) Ltd. SVP, Investment Banking, SG Asia Finance and Securities Company Plc.
♦Committees and Management Structure♦ ♦♦♦♦Annual Report 2012♦♦♦♦
Pages 39 Back to ContentBack to ContentBack to ContentBack to Content
Name andName andName andName and
Position at the CompanyPosition at the CompanyPosition at the CompanyPosition at the Company
AgeAgeAgeAge EducationEducationEducationEducation % of Share % of Share % of Share % of Share Holding Holding Holding Holding
as of Dec 31, as of Dec 31, as of Dec 31, as of Dec 31, 2012* 2012* 2012* 2012*
(Change in No. of (Change in No. of (Change in No. of (Change in No. of Shares Held Shares Held Shares Held Shares Held
during the Year)**during the Year)**during the Year)**during the Year)**
Family Relationship Family Relationship Family Relationship Family Relationship among among among among
managementmanagementmanagementmanagement
Work ExperiencesWork ExperiencesWork ExperiencesWork Experiences
PeriodPeriodPeriodPeriod Position and CompanyPosition and CompanyPosition and CompanyPosition and Company
4. Tengku Dato’ Zafrul bin
Tengku Abdul Aziz Authorized Director
39 Master of Finance & Management, University of Exeter. United Kingdom
-
None Feb 12 - present Jun 10 - present Jan. 09 – Jun 10 Mar.07 – Dec. 08 Apr.06 – Mar. 07
Director, Maybank Kim Eng Securities (Thailand) Plc. Group CEO, Maybank Kim Eng Group Director, K&N Kenanga Holdings Berhad CEO, Tune Money Sdn Bhd Director, Head of Investment Banking, Citibank Group
5. Ms. Boonporn Boriboonsongsilp Chief Executive Officer and Authorized Director
56 Master Degree in Statistics, Chulalongkorn University Bachelor Degree in Mathematics, Chulalongkorn University The Thai Institute of Directors Association: DCP #137/2010
-
None Jan. 03 – present March 98-Dec 02 1989-1993
Director and Chief Executive Officer, Maybank Kim Eng Securities (Thailand) Plc. Managing Director, Local Securities Clients 1, Kim Eng Securities (Thailand) Plc. Assistant Director, Marketing Asia Credit Co.,ltd.
♦Committees and Management Structure♦ ♦♦♦♦Annual Report 2012♦♦♦♦
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Name andName andName andName and
Position at the CompanyPosition at the CompanyPosition at the CompanyPosition at the Company
AgeAgeAgeAge EducationEducationEducationEducation % of Share % of Share % of Share % of Share Holding Holding Holding Holding
as of Dec 31, as of Dec 31, as of Dec 31, as of Dec 31, 2012* 2012* 2012* 2012*
(Change in No. of (Change in No. of (Change in No. of (Change in No. of Shares Held Shares Held Shares Held Shares Held
during the Year)**during the Year)**during the Year)**during the Year)**
Family Relationship Family Relationship Family Relationship Family Relationship among among among among
managementmanagementmanagementmanagement
Work ExperiencesWork ExperiencesWork ExperiencesWork Experiences
PeriodPeriodPeriodPeriod Position and CompanyPosition and CompanyPosition and CompanyPosition and Company
6. Mr. Pusit Kaewmongkolsri Chief Operating Officer, Acting Chief Financial Officer, Authorized Director
50 Master Degree in MIS, West Coast University. USA. Bachelor Degree in Accounting, Chulalongkorn University The Thai Institute of Directors Association: DAP #11/2004
-
None Jan. 03. - present Apr. 10 - present Jul. 98 – Jul. 02 1982 – Feb. 98
Director and Chief Operating Officer, Maybank Kim Eng Securities (Thailand) Plc. Director, Kim Eng Asset Management Co.,Ltd Director, DBS Vickers (Thailand) Co.,Ltd AVP, Cmic Finance and Securities Co.,Ltd
7. Mrs.Hamidah binti Moris Director
52 Master of Arts, University of Essex, United Kingdom
-
None Feb. 12 - present Apr. 09 - present Jan. 08 - present
Director, Maybank Kim Eng Securities (Thailand) Plc. Regional Head, Equities Maybank Investment Bank Berhad Head, Institution Dealing K&N Kenanga Berhad
♦Committees and Management Structure♦ ♦♦♦♦Annual Report 2012♦♦♦♦
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Name andName andName andName and
Position at the CompanyPosition at the CompanyPosition at the CompanyPosition at the Company
AgeAgeAgeAge EducationEducationEducationEducation % of Share % of Share % of Share % of Share Holding Holding Holding Holding
as of Dec 31, as of Dec 31, as of Dec 31, as of Dec 31, 2012* 2012* 2012* 2012*
(Change in No. of (Change in No. of (Change in No. of (Change in No. of Shares Held Shares Held Shares Held Shares Held
during the Year)**during the Year)**during the Year)**during the Year)**
Family Relationship Family Relationship Family Relationship Family Relationship among among among among
managementmanagementmanagementmanagement
Work ExperiencesWork ExperiencesWork ExperiencesWork Experiences
PeriodPeriodPeriodPeriod Position and CompanyPosition and CompanyPosition and CompanyPosition and Company
8. Assoc.Prof.Dr. Paiboon Sareewiwatthana Director and Chairman of the Audit Committee
58 Ph. D in Finance, University of Mississippi, USA. The Thai Institute of Directors Association: DCP #12/2001
-
None Oct.02-present Feb.01-present 1984 – present
Director and Chairman of Audit Committee, Maybank Kim Eng Securities (Thailand) Plc. Member of the Audit Committee, Team Precision, Plc. Professor Level 9, NIDA
9. Assoc.Prof.Dr. Preecha Jarungidanan Director and Audit Committee Member
66 Ph. D in Economics, University of Missouri-Columbia, USA.
Master of Economics, California State University, Long Beach, USA.
Bachelor of Economics, Thammasat University
The Thai Institute of Directors Association: DAP #9/2004
-
None Oct.02 - present Nov. 09 - present Present Mar.01 - present
Director and Audit Committee Member, Maybank Kim Eng Securities (Thailand) Plc. Director and Audit Committee Member, Director, Kim Eng Asset Management Co.,Ltd Director and Audit Committee Member Thai-German Products Plc., Stars Microelectronics (Thailand) Plc. LumSoon (Thailand). Expert in Business Economic, NIDA
*Determined based on the no. of shares outstanding after taking into account the no. of repurchase shares. **Change in no. of shares outstanding during the year does not include new shares from exercising share warrants.
♦ Market and Business Conditions♦ ♦♦♦♦Annual Report 2012Annual Report 2012Annual Report 2012Annual Report 2012♦♦♦♦
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♦ Market and Business Conditions♦
����Brokerage BusinessBrokerage BusinessBrokerage BusinessBrokerage Business
In 2012, the Thai equity market performance beat market estimates and closed at 1,391.93 points on 28 Dec 2012, up over 35.77% since the of 2011, generating the highest yield compared to other Asian markets. Market capitalization thus surged to THB11.83 trillion, higher than the nation’s GDP of THB11.36 trillion, for the first time in history. Internal support factors were the recovering economy and listed company earnings after the flood crisis in 4Q 2011. The economy grew at 6.4%, higher than estimated at 5.5%, while listed company earnings expanded 15% on average. Moreover, Thai politics showed more stability. External factors were the easing EU debt crisis, the recovering Chinese economy and the postponement of a US ‘Fiscal Cliff’ plan deadline. However, in our opinion, the most important factor was the maintenance of the QE program with a greater asset purchasing allowance of US$85bn per month, starting from January 2013 with an unlimited time period expected to remain until the unemployment numbers moved below 6.5% or inflation remained above 2.5%. Thailand saw foreign investors as net buyers of THB 76.388 billion vs. THB5.119 billion in 2011, while local institutions and retail investors were net sellers of THB 53.451 billion and THB 26.38 billion, respectively.
In 2012, the brokerage business improved along with the better market sentiment. However, the price competition continued. The average daily trading volume was THB 31.304 billion, up 9.60% from 2011, which was a 4-year high. The Investment business also grew well as there were 8 IPOs for new companies coming into market versus 5 companies last year. The IPO stocks generated very impressive yields.
The company remained the top broker with a market share of 11.86% in 2012, the same as in 2011. In 2012, there was a slight change in investor structure, as retail investors increased to 54% (similar to 2011), proprietary trades stayed at 13%, local institutions accounted for 8% and foreign investors rose to 25% from 23% in 2011.
����The Business of The Business of The Business of The Business of Debt Issuance and TradingDebt Issuance and TradingDebt Issuance and TradingDebt Issuance and Trading
For the primary market, total value of new debt issuance registered with ThaiBMA for the year 2012 was THB 10.33 trillion, a decrease by 17.91% when compared with that in the Year 2011. Total outstanding amount of domestic debt instruments registered with ThaiBMA as of 28 December, 2012 was THB 8.58 trillion, an increase by 20.64% when compared with that at the end of 2011. Debt securities with the highest outstanding amount was BOT bond with the total outstanding value of THB 3.12 trillion. This represents a growth of 18.12% compared to that of the previous year. The second and third outstanding of debt securities with highest outstanding amount were Government Bond with outstanding value of THB 3.03 trillion or an increase by 15.07% and Long-Term Corporate Bond and Commercial Paper with total outstanding value of THB 1.65 trillion, an increase by 28.99%.
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����Financial Advisory and Securities Underwriting BusinessFinancial Advisory and Securities Underwriting BusinessFinancial Advisory and Securities Underwriting BusinessFinancial Advisory and Securities Underwriting Business The fund raising via primary market (IPO) substantially improved both in terms of issues and
funding amount in both the SET and the MAI totally 25 companies (including property fund) worth a total funding of THB 12.13 billion, an increase of 144.42% compared to that in the year 2011, with 5 companies listed on the SET and 7 companies listed on the MAI. As of 31 December, 2012, total listed companies on the SET and the MAI were 477 and 81 companies respectively. For the Year 2012, the company acted as Financial Advisor and Lead Underwriter of CPN Commercial Growth the amount of THB 4,394 million, Financial Advisor and Lead Underwriter of on the Initial Public Offering of Srivichai Vejvivat Public Company Limited the amount of THB 168.90 million, Lead Underwriter for Public Offering of Universal Absorbents and Chemical Plc. of THB 191.97 million and Independent financial advisor on asset acquisition and connected transaction , with total value of THB 9 billion. The Investment Banking Department total income for the Year 2012 was THB 57.93 million, an increase by 72.26% from that of THB 33.63 million in the Year 2011.
����The Derivatives Agent BusinessThe Derivatives Agent BusinessThe Derivatives Agent BusinessThe Derivatives Agent Business
The Company was granted by the Ministry of Finance a license to operate business as a derivatives agent in accordance with the Derivatives Act B.E. 2546 (2003). As a derivatives agent, the Company has serviced individual clients and institutional clients since the launch of Thailand Futures Exchange (TFEX) on 28 April 2006. Currently, TFEX offers 9 exchanged-traded derivatives products, namely, SET50 Index Futures, SET50 Index Options, Single Stock Futures, Gold Futures, Silver Futures, Brent Crude Oil Futures, Interest Rate Futures, USD Futures and Sector Futures.
For the Year 2012, the total volume on TFEX was 10,457,928 contracts. The average daily volume of SET50 Index Futures in the year was 16,467 contracts, a decrease of 6.9% compared with that of 2011 for 17,690 contracts per day. For SET50 Index Options, the average daily volume was 221 contracts, a decrease of 50.1% compared with that of 2011 for 443 contracts per day. For Single Stock Futures, the average daily volume was 8,849 contracts, an increase of 36.8% compared with that of 2011 for 6,468 contracts per day. For Gold Futures, the average daily volume was 14,868 contracts, a decrease of 9.1% compared with that of 2011 for 16,350 contracts per day. For Silver Futures, the average daily volume was 60 contracts, a decrease of 74.7% compared with that of 2011 for 236 contracts per day. For Brent Crude Oil Futures, the average daily volume was 603 contracts, an increase of 845% compared with that of 2011 for 64 contracts per day. For the new product, namely USD Futures and Sector Futures, average daily volume was 2,751 and 4 contracts per day, respectively. For Interest Rate Futures with low trading volume, the volume was just 27 contracts for the whole year. Overall, investors in the derivatives market compose of domestic individual investors that accounted for 53.39% of total volume, domestic institutional investors that accounted for 38.87% of total volume and foreign institutional investors that accounted for 7.74% of total volume.
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For 2012, the Company ranked No. 2 for derivatives trading in term of market shares that accounted for 6.83% of the total volume in the derivatives market. The total volume for derivatives traded via the Company was 1,427,961 contracts. The majority of the company’s volume is from operating derivatives agent business on behalf of the clients.
The Company has long emphasized expanding its investor base in the derivatives market. It has continuously provided a variety of training courses related to derivatives instruments to its clients and general investors. This is because the Company has always been aware that its long-term success in the derivatives business depends upon investors’ knowledge and understanding in derivatives trading strategies, return & risk related to derivatives investment and their abilities to apply derivatives instruments for investing and hedging purposes. The Company aims to grow concurrently with continuous expansion in the number of investors and client bases. Relating to derivatives investment strategies, the Company continues to produce and publicize daily derivatives research papers for technical analysis three times a day before morning session, before afternoon session and before night session. The recommendations of derivatives investment strategies are broadcasted in visual and audio forms via KELIVE TV which the clients can access via the Internet and the clients can watch a morning live program on every business day or can access a recorded program later.
Derivative Warrant (DW)Derivative Warrant (DW)Derivative Warrant (DW)Derivative Warrant (DW)
The company – Maybank Kim Eng Securities (Thailand) Plc, - has a credit rating “AA” by Fitch
Ratings (Thailand) and is one of the first brokerage houses issuing Derivative Warrant (DW) in Thailand via direct listing method in 2010. In 2011, the company had issued 73 DWs that earned good responses from investors.
Nevertheless, the company recognizes that DW is a new product, hence, we have continuously
provided a variety of training courses to the clients and general investors along with producing and publicizing daily DW research papers called “Derivative Warrant Strategy Update”. In addition, the recommendations and investment strategies are broadcasted in visual and audio forms via KELIVE TV which clients can access via the internet to watch the program and to educate the investors and marketing representatives for new knowledge and up-to-date situation.
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����Asset Management BusinessAsset Management BusinessAsset Management BusinessAsset Management Business
The situation of the Thai asset management business as of December 28, 2012 is summarized as below:
Type of Mutual Fund NAV (THB) Number of Asset
Management Firms
Number of Funds
Mutual Fund 2,614,402,733,752.58 24 1,399
Source: AIMCSource: AIMCSource: AIMCSource: AIMC
For the Year 2012, the asset management business grew significantly compared with the previous year, with total NAV growing by approximately 25.53% relative to that in 2011. Fixed-income funds accounted for 60.28% of total NAVs whereas equity funds accounted for 21.89% of total NAVs. It is noted that asset management firms that are affiliates of domestic commercial banks have had higher asset size under management thanks to their advantages in terms of distribution channel and client base which they can share with their parent companies.
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♦ Risk Factors ♦
1111.... Fluctuations in the conditions of international and domestic economies, money markets Fluctuations in the conditions of international and domestic economies, money markets Fluctuations in the conditions of international and domestic economies, money markets Fluctuations in the conditions of international and domestic economies, money markets and capital markets could materially affect the Companyand capital markets could materially affect the Companyand capital markets could materially affect the Companyand capital markets could materially affect the Company’s revenue.s revenue.s revenue.s revenue.
The Company�s major source revenue is brokerage fees from the securities and derivatives business that
has been directly related to macroeconomic condition, movements of money and capital markets, trading volume on the Stock Exchange of Thailand (SET) and investor confidence, all of which are factors that are beyond control of the Company. In the Years 2009, 2010 and 2011, average daily trading values of the SET were THB 18,226, 29,066 and 29,473 million consecutively. For the Year 2012, average daily trading value of the SET was THB 32,304 million, an increase by 9.60 % compared to that in the Year 2011. All factors, including internal and external ones, substantially increase investor�s confidence. For the Years 2010, 2011
and 2012, the Company�s total brokerage fees were THB 2,500, 2,624 and 2,521 million consecutively.
Fluctuations in the economy, the money market and the capital market may be caused by a large number of factors that are beyond control of MBKET, including civil unrest in the three most southern provinces of Thailand, domestic political uncertainties and global economic crisis in the US and Europe . Such factors would negatively affect confidence of both domestic and foreign investors and, as a consequence, may adversely affect the volume of trading on the SET and the MAI, including the amount of funds to be raised and the number of new listings on the SET and the MAI. This could have a material adverse effect on MBKET�s business, financial condition and result of operation.
MBKET has mitigated such risk by providing some parts of compensation made to marketing officers and securities traders that vary with trading volume on the SET to control its fixed operating costs, expanding its brokerage client base to include both individual and institutional clients and generating revenue from a variety of financial advisory services including securities offering, M & A, business takeovers, project feasibility studies, business valuation and securities underwriting. MBKET also engages in other businesses to generate additional sources of revenue such as asset management, private fund management, securities borrowing & lending (SBL) and the derivatives business.
2222.... Risk due to Intense Competition in the Securities BusinessRisk due to Intense Competition in the Securities BusinessRisk due to Intense Competition in the Securities BusinessRisk due to Intense Competition in the Securities Business
Securities business has been a quite highly competitive business, especially in the area of securities brokerage that has long been the Company�s major source of revenue. The Stock Exchange of Thailand
(SET) has changed the brokerage fee structure, specifying a minimum brokerage fee at the rate of 0.25 % of total trading value for the period between January 14, 2002 and January 13, 2007. Later on December 25, 2006, the SET extended the period in which a minimum brokerage fee is still applied for another 5 years. The period is classified into 1) For the first 3 years (January 1, 2007 to December 31, 2009) in which a minimum brokerage fee of 0.25 % is still applied and 2) For the next 2 years (January 1, 2010 to December 31, 2011) in which the brokerage fee is determined on a sliding scale basis. In other words, for the period
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between January 1, 2010 and December 31, 2011, the higher the trading value, the lower the applied rate of the brokerage fee. For year 2012, calculation for the brokerage fee is deliberated. Thus, from the Year 2010 on, the securities brokerage business will be a highly competitive business in terms of securities brokerage fee. To cope with the increasing level of competition in the securities brokerage business, the Company has put extra efforts in improving every area of its service quality, especially Internet trading service. This is because the brokerage fee applied to Internet trading has still been lower than that applied to traditional trading service (Internet trading brokerage fee is 60 % of that applied to traditional trading service). Internet trading has thus drawn strong interest from a lot of securities investors. The Company has long focused on providing high-quality services with the aim to maintain and expanding the existing client base. The Company has done so by increasing the quality of research publications, improving and developing skills and capabilities of staff in providing services and recommendations to clients. The Company has continuously upgraded its information system to respond to and satisfy fast-changing client needs. All of these have enabled the Company to be in a good position and well prepared for liberalization of the securities brokerage fee structure that will be effective on January 1, 2012, and thus intensifying competition in the securities brokerage industry.
Financial advisory and investment banking services and fees have also been competitive in terms of both service quality and advisory fee levels. MBKET has provided a variety of financial advisory services including securities offering, independent financial advisory, fund raising, M & A, business takeovers, business valuations etc, focusing on provisions of high-quality services. The Company has continuously developed and upgraded advisory skills of its IB staff, and this enables it to provide high-quality financial advisory services to clients on a continuous basis.
MBKET was also granted a license to operate its business as a derivatives agent in accordance with the Derivatives Act B.E. 2546. It was selected as a member of Thailand Futures Exchange (TFEX) that was launched on April 28, 2006 and Thailand Clearing House (TCH) to operate its business as a derivatives agent. This has helped to expand the Company�s source of revenue.
3333.... In its securities brokerage business, the In its securities brokerage business, the In its securities brokerage business, the In its securities brokerage business, the Company is highly dependent on a small number Company is highly dependent on a small number Company is highly dependent on a small number Company is highly dependent on a small number of large clients.of large clients.of large clients.of large clients.
The Company’s top 10 trading clients accounted for 23.07 %of total securities brokerage fee income in the year 2011 and 24.59 % in 2012. Had MBKET lost such big trading clients, its securities brokerage fees for 2010 and 2011 would have fallen by 7.74% and 5.56 %, respectively. However, one of the Company’s top 10 trading clients was the Maybank Kim Eng Holdings Group that is also the major shareholder. Thus, it is quite unlikely that it will lose such a client. As MBKET has long realized concentration risks, it has thus aimed to increase the number of trading accounts in order to expand its client base. For the year ended December 31, 2011 and 2012, the total number of MBKET’s client trading accounts was 106,000 and 119,000, respectively. For 2012, 95.25% of the Company’s securities brokerage fees were from retail trading business and the remainder from local and foreign institutions. Another source of the Company’s operating revenue was from Investment Banking business (financial advisory and securities underwriting businesses) that generated total revenue of THB 57.93 million, a decline of 72.26 % from the 2011 level. This has helped to generate another source of operating revenue for the Company and allowed it to rely less on securities brokerage business.
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4444.... Clients may default or delay payment fClients may default or delay payment fClients may default or delay payment fClients may default or delay payment for or transfer of securities and collateral for taking or or transfer of securities and collateral for taking or or transfer of securities and collateral for taking or or transfer of securities and collateral for taking position in futuresposition in futuresposition in futuresposition in futures
For the year ending December 31, 2012, the Company’s securities brokerage receivables totaled THB 11,878.05 million, consisting of clients’ accounts of THB 2,772.64 million, margin loans of THB 8,776.28 million, securities borrowing and lending accounts of THB 82.27 million, there and other receivables of THB 246.85 million, with unearned interest revenue of THB 54.03 million. In addition, the Company had derivatives business receivables amounting THB 6.33 million outstanding. It classified such securities and derivatives brokerage receivables as doubtful debt in the amount of THB 261.75 million, accounting for 2.20 % of its total securities and derivatives brokerage receivables. Of the total amount of doubtful debt, THB 256.08 million of which belonged to Nithiphat Securities Co., Ltd., was incurred prior to acquisition of the ordinary shares of that company by Kim Eng Holdings Limited in 1998, and THB 5.67 million of which was incurred after the share acquisition by Maybank Kim Eng Holdings Limited. The Company tries to collect all doubtful debts as fast as possible, and if it cannot do so, it will file a lawsuit against the defaulting receivables.
For the total doubtful debt of THB 261.75 million, THB 9.68 and 252.07 million of which were classified as substandard and doubtful debts. The Company established an allowance for doubtful debt in the total amount of THB 261.53 million, or 100% of the total doubtful debt.
In the derivatives agent business, the Company may face the risk that collateral clients put up may not be sufficient to satisfy their debt obligations with TCH. Thus, MBKET, as a derivatives agent, is obligated to follow and collect more collateral from clients to satisfy debts incurred as a result of loss from holding a position in futures. Nevertheless, MBKET has implemented many policies aimed to mitigate default risk as a result of securities and derivatives trading. It has done so by focusing on selecting high-quality clients and specifying trading limits for securities and derivatives that well correspond to securities collateral amount, clients� financial status, their abilities to repay debts, liquidity conditions and investment experience. MBKET
has regularly reviewed and closely monitored the receivables� status.
5555.... Risk Associated with Margin Account under the Credit Balance SystemRisk Associated with Margin Account under the Credit Balance SystemRisk Associated with Margin Account under the Credit Balance SystemRisk Associated with Margin Account under the Credit Balance System In extending margin loans to securities trading clients, the Company may face the risk that margin clients may default their repayments, especially in the case that value of securities put as collateral falls below their outstanding margin amount. Normally, such repayment default will not occur under the credit balance system as margin clients are required to maintain their maintenance margin in accordance with conditions as prescribed by the Company and relevant regulators. If the proportion of collateral to outstanding margin amount falls below the prescribed ratio, the procedures related to call margin and force sell will apply respectively. Nevertheless, some adverse abnormal situation may occur, thus leading to a sharp decline in the value of securities put as collateral, such that the system of maintenance margin cannot cope with it. To manage this risk, the Company formulates and applies clear and stringent policies in selecting securities allowed to be traded under the margin system as well as prescribing initial margin for such securities. The
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Company does not allow its clients to trade risky/speculative securities under the margin system. The Company also prescribes ceiling margin amounts for each client in trading particular securities. Margin loans amounts as of December 31, 2010, 2011 and 2012 were THB 4,355.98, 4,404.76 and 8,776.28 million respectively. Margin loans amount outstanding may vary each year, depending upon trading activities on the SET. For the period that margin loans amount outstanding sharply increases, the Company realizes the potential risk associated with margin account. The Company complies with policies/measures in dealing with this risk as described in the previous paragraph stringently. In the past, the Company never faced serious damage due to extending margin loans.
6666.... Any failure in computer systems may disrupt the CompanyAny failure in computer systems may disrupt the CompanyAny failure in computer systems may disrupt the CompanyAny failure in computer systems may disrupt the Company’’’’s securities brokerage business s securities brokerage business s securities brokerage business s securities brokerage business operationsoperationsoperationsoperations
To operate its securities brokerage business, the Company relies heavily on its computer systems. Main computer systems that have supported the Company�s operation of securities trading are comprised of 1)
HiTrade that is connected to the SET for securities trading on a real-time basis. It enables securities marketing officers and clients to closely monitor share price movement, to submit trading orders and check trading order status. HiTrade is connected to the Internet, thus allowing clients to monitor share price movement and submit trading orders via the Internet as well. 2) The computer system that is connected to TFEX and enables securities marketing officers to submit trading orders for futures contracts on behalf of their clients, and the computer system that is connected to SET Trade that allows clients to submit their trading orders via the Internet. 3) Share settlement systems for transactions between clients and TSD, namely the Securities Back Office Automation, or SBA. If the Company�s computer systems fail, the
operation of the Company in the securities brokerage service will be materially affected.
To mitigate such risk, the Company set up a backup system as well as back up of important information, both of which enable the Company to operate smoothly in case of a failure of the main system. To connect the main office�s computer system and those of the branch offices, the Company has a back up leased line
that can switch when the leased-line fails. Also, the Company has a contingency plan that allows the use of a back-up computer system when contingency plans are implemented.
7777.... As an underwriter, the Company is required to subscribe for unsubscribed securities that As an underwriter, the Company is required to subscribe for unsubscribed securities that As an underwriter, the Company is required to subscribe for unsubscribed securities that As an underwriter, the Company is required to subscribe for unsubscribed securities that may expose it to large lossesmay expose it to large lossesmay expose it to large lossesmay expose it to large losses
In relation to investment banking business in which the Company acts as an underwriter, it assumes an underwriting risk that may require it to purchase any unsubscribed securities for its own account. This may be due to inappropriate pricing and fluctuations in both money and capital markets. If, in the future, the Company is required to purchase underwritten securities for its own account, it may result in significant losses that could have a material adverse effect on its financial condition, particularly the net capital ratio, and its results on operations.
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To mitigate this risk, prior to participating as an underwriter for any securities, the Company conducts a study and analysis of the business potential of issuers as well as client interest, and the Company will act as underwriter for securities only with minimal risk of securities under subscription. In case the Company acts as underwriter for securities at significant amounts, approval for securities underwriting from the Underwriting Committee needs to be obtained prior to the Company�s acting as underwriter. In acting as
underwriter and/or financial advisor, the Company has put emphasis on selecting clients. Prior to accepting any new clients, the Company will conduct a preliminary assessment and due diligence on the business potential as well as financial performance of the clients. The Company�s IB staff are well accustomed to
relevant applicable law and regulations, and this enables them to provide high-quality and accurate services to clients.
8888.... The CompanyThe CompanyThe CompanyThe Company ‘‘‘‘s business may be affected by an error or the misconduct of an employee s business may be affected by an error or the misconduct of an employee s business may be affected by an error or the misconduct of an employee s business may be affected by an error or the misconduct of an employee that is difficult to check andthat is difficult to check andthat is difficult to check andthat is difficult to check and preventpreventpreventprevent
The Company�s business is highly dependent upon its reputation and the trust of its clients. Employees are
regularly in direct contact with clients and have knowledge of, or access to, the clients� assets or information.
Accordingly, when an employee does not carry out his or her duties in accordance with a client�s orders or
acts beyond his or her authority or does not act in compliance with the Company�s rules and regulations
including its compliance manual or commits misconduct in managing client�s assets or uses the client�s
information without permission or other actions that may harm client interests, the Company�s reputation and
the trust of other clients may be adversely affected. The Company may also become liable for the losses incurred by the clients in question.
In addition, certain actions may be made in breach of relevant laws or regulations and may result in the Company becoming liable to pay fines, losing its license or being subject to litigation, all of which may have a materially adverse effect on the Company�s financial condition and result of operations. To deal with
this risk, the Company has regularly monitored working activities of employees and will punish any employee who violates these Company�s rules. Also, the Company established clear working rules, actions and
procedures that its employees have to follow. In the Year 2012, there were no cases where the Company�s
staff failed to comply with or violated applicable rules and regulations that may cause detrimental effects to the Company�s operation.
9999.... The Company operates its businesses under stringent laws and regulations, including The Company operates its businesses under stringent laws and regulations, including The Company operates its businesses under stringent laws and regulations, including The Company operates its businesses under stringent laws and regulations, including regulations that impose liability on its operations that could have an adverse effect on its regulations that impose liability on its operations that could have an adverse effect on its regulations that impose liability on its operations that could have an adverse effect on its regulations that impose liability on its operations that could have an adverse effect on its results of operations and financial conditionresults of operations and financial conditionresults of operations and financial conditionresults of operations and financial condition
The securities business is strictly controlled by laws and regulations from government authorities, the Office of the SEC and the SET. As a result, any establishment or change of government policy or of the supervisory roles of the relevant regulatory bodies may affect the Company�s goals, competitiveness and
business and could have a materially adverse effect on the business, financial condition and result of operations of the Company. Moreover, the Company may incur liabilities resulting from the operation of its business, such as from mistakes arising from the performance of its duties as financial advisor or underwriter
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or from its failure to comply with steps in accepting securities purchase or sales orders from clients. The Company cannot ensure that if the Company became liable, it would not face serious liability or a possible business license risk, either of which could have serious a material effect on its business and its reputation.
To mitigate this risk, the Company�s Internal Audit Department has closely monitored changes in laws and
regulations relevant to the Company�s businesses, and will closely control and check operations of each
department in the Company to ensure they are in conformance with applicable laws and regulations. It will inform of changes in relevant regulations to all involved departments.
In the Year 2012, there were no cases where the Company�s staff failed to comply with or violated applicable
rules and regulations that may cause detrimental effects to the Company�s operation.
10101010.... The Company is highly dependent on staffThe Company is highly dependent on staffThe Company is highly dependent on staffThe Company is highly dependent on staff
The Company relies on experienced, knowledgeable and skilled employees in its business operations. At present, in a highly competitive business, with a limited number of experienced and skilled staff, there is intense competition to recruit appropriate qualified staff. Should the Company be unable to retain these staff, the Company�s business continuity may be affected to the detriment of its financial condition and result of
operations.
To counter this risk, the Company has provided its staff with good employee welfare, and long put emphasis on providing training courses for employees with the aim of enhancing employee skills. In addition, the Company has allocated warrants for staff in order to attract a very qualified workforce to continue working for the Company over the long term. In the Year 2011, the Company faced no problems regarding significant turnover of its staff.
11111111.... The CompanyThe CompanyThe CompanyThe Company’’’’s operations are under the control of the major shareholders operations are under the control of the major shareholders operations are under the control of the major shareholders operations are under the control of the major shareholder
As at October 31, 2012, Maybank Kim Eng Holdings Limited, the Company�s major shareholder, held a
83.49% equity stake in the Company�s total paid-up shares. Thus, Maybank Kim Eng Holdings Limited
remains able to control shareholders� resolutions in relation to key matters that are required by laws or
articles of association of the Company to be passed by a majority vote of shareholders attending the meetings and entitled to vote, except for matters that are required by laws or articles of association of the Company to be passed by a three-fourths vote of shareholders. Therefore, other shareholders may not obtain sufficient votes to balance those of Maybank Kim Eng Holdings Limited. Nevertheless, the Company has appointed three independent directors that account for 33% of the Company�s Board of Directors. They
are responsible for monitoring and providing advice on the Company�s operations to ensure it has operated
transparently and accurately.
Moreover, as a subsidiary of Kim Eng Holdings that has long been well known for its securities business with subsidiaries in Asia, Europe and the United States, MBKET has been widely accepted by retail and institutional trading clients for its expertise and experience in the securities business.
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Nevertheless, in the Year 2011, there was a major change in the shareholding structure of Kim Eng Holdings Limited. Mayban IB Holdings Sdn Bhd which has been a part of Malayan Banking Berhad from Malaysia conducted a tender offer for a 100 % stake in Kim Eng Holdings Limited. Such change, however, had no effect on management policy and all staff of the Company.
12121212.... The Effect from the Flood Crisis in the Last Quarter of 2011The Effect from the Flood Crisis in the Last Quarter of 2011The Effect from the Flood Crisis in the Last Quarter of 2011The Effect from the Flood Crisis in the Last Quarter of 2011 The Company, however, has put emphasis on managing any casualties that might occur with its branches and clients. The Company developed and implemented plans related to safety standards. It also purchased casualty insurance that could cover any casualties resulted from many disasters with the amount of THB 150 million. For the emergency situations such as the flood crisis in 2011, some of the Company’s branches located in the areas affected by the flood crisis were temporarily closed. To deal with this problem, the Company implemented a business continuity plan by relocating all staff who worked in the area affected by the flood crisis to work at the Company’s headquarters. This allowed the Company to provide trading services to its clients continuously.
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♦ Audit Committee’s Report ♦
The Audit Committee of Maybank Kim Eng Securities (Thailand) Plc., appointed by the Board of Directors, comprises of 3 independent directors, all of whom possess qualifications in line with the requirements of the Stock Exchange of Thailand (SET). They include; NameNameNameName TitleTitleTitleTitle
1. Assoc.Prof.Dr. Paiboon Sareewiwatthana Chairman of the Audit Committee 2. Assoc.Prof.Dr. Preecha Jarungidanan Member of the Audit Committee 3. Mr. Yuth Vorachattarn Member of the Audit Committee
For the Year 2011, the Audit Committee held 8 meetings to review the Company’s operating
performance and other activities as designated by the Board of Directors. All members of the Audit Committee participated in every meeting. Details of attendance are as follows:
MeetingMeetingMeetingMeeting AssocAssocAssocAssoc....ProfProfProfProf....Dr.Dr.Dr.Dr. Paiboon Paiboon Paiboon Paiboon
SareewiwatthanaSareewiwatthanaSareewiwatthanaSareewiwatthana
AssocAssocAssocAssoc....ProfProfProfProf....Dr.Dr.Dr.Dr. Preecha Preecha Preecha Preecha
JarungidananJarungidananJarungidananJarungidanan
Mr.Yuth Mr.Yuth Mr.Yuth Mr.Yuth VorachattarnVorachattarnVorachattarnVorachattarn
AuditorAuditorAuditorAuditor No.No.No.No. Date of Date of Date of Date of MeetingMeetingMeetingMeeting
1/2012 30/01/2012 � � � �(Auditing 2011
Financial Statements)
2/2012 21/03/2012 � � � -
3/2012 25/04/2012 � � � �(Reviewing
Q1/12 Financial Statements)
4/2012 13/06/2012 � � � -
5/2012 25/07/2012 � � � �(Reviewing
Q2/12 Financial Statements)
6/2012 12/09/2012 � � � -
7/2012 29/10/2012 � � � �(Reviewing
Q3/12 Financial Statements)
8/2012 18/12/2012 � � � -
In particular meetings of the Audit Committee, the Management and/or external auditors were invited to attend such meetings. The results from the meetings were reported to the Board of Directors. Major activities of the Audit Committee in the year 2012 were as follows:
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- The Audit Committee reviewed 2011 audited financial statements, Q1/2012 reviewed financial statements, Q2/2012 reviewed financial statements and Q3/2012 reviewed financial statements. The Audit Committee and Ernst & Young Office Limited, the Company’s external auditor, held a meeting to review and discuss the audit result. The audit result indicates that the Company’s financial statements were prepared in accordance with generally accepted accounting principles and provided adequate disclosure. The Company’s external auditor provided independent opinion and suggestion about the matters the Company needs to improve and develop.
- The Audit Committee reviewed and approved the internal audit plan for the Year 2012. The Audit
Committee gave comments regarding the audit observation and provided guidelines for good corporate governance practices.
- The Audit Committee evaluated the Company’s internal control system for completeness,
acknowledged and monitored the audit results. The Audit Committee was satisfied with the Company’s internal audit program. All departments gave full cooperation to the audit program. The Management fully supported the internal audit program and asked all departments to rectify weaknesses, and as a result, the Company’s operational effectiveness improved.
- The Audit Committee reviewed the Company’s compliance with the rules, regulations and
requirements of the SEC and the SET and the Company’s operating policies. The Audit Committee found no material deficiencies in relation to compliance with applicable regulations and the Company’s operating policies.
- The Audit Committee reviewed the Company’s audited financial statements for the Year 2011,
reviewed Q1/2012, Q2/2012 and Q3/2012 financial statements. The Audit Committee, together with the external auditor (E&Y), evaluated the audit results in relation to generally accepted accounting principles to ensure accuracy, completeness, and adequacy of the financial statements. The external auditor also provided the opinion on areas for improvement.
- The Audit Committee asked the Company to conduct risk assessment based on the Risk-Based
Approach (RBA) in the area of general operation, information system, risk monitoring and etc. The Audit Committee verified the Company’s compliance with relevant securities & exchange regulations and evaluated the Company’s related party transactions to ensure they were conducted fairly and transparently. The Audit Committee reported the audit results to the Board of Directors on a regular basis.
- The Audit Committee selected and appointed an independent external auditor that has no business
relationship or interests with the Company, its subsidiary, its management, its major shareholder or any of their related persons. The Audit Committee proposed the external auditor for consideration by the Board of Directors prior to being nominated by the meeting of shareholders. The Audit Committee and the external auditor held a meeting to consider and approve the Company’s financial statements with no management participating in such meetings.
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- The Audit Committee reviewed and provided opinions regarding connected transactions and transactions with potential conflict of interest in accordance with the requirement of the SEC and the SET. It is the opinion of the Audit Committee that those transactions are fair and conducted on an arm’s length basis and sufficient disclosure was provided in the Company’s notes to financial statements.
- The Audit Committee managed information disclosure about the Company, the Management and
major events via the Company’s website (http://www.maybank-ke.co.th) for investors and interested general public. This is to support good corporate governance principles of the Company.
- The Audit Committee inspected potential fraudulent activities or actions in accordance with Section
89/25 of the Securities & Exchange Commission Act B.E.2535 that requires the auditor to report directly to the Audit Committee in case any potential fraudulent activities or actions exist. The Audit Committee is required to provide initial investigation results to the SEC and the auditor within 30 days from the date on which the auditor reports potential fraudulent activities or actions to the Audit Committee. For the Year 2011, the auditor found no potential fraudulent activities or actions.
It is the opinion of the Audit Committee that the Company complied with the accounting standards as prescribed by the Association of Thai Accountants and regulations of the Stock Exchange of Thailand. The Audit Committee closely monitored the Company�s operation to ensure transparency, which is consistent with
good corporate governance practices. The Audit Committee ensured the Company has built and maintained appropriate internal control systems. The Audit Committee found no material deficiencies in the Company�s
operation and internal controls and systems, and this is consistent with the external auditor�s opinion. The
Company provided sufficient information to all shareholders and interested persons and emphasized on developing internal control systems and audits to ensure maximum benefits to all shareholders and stakeholders.
Paiboon SareewiwattanaPaiboon SareewiwattanaPaiboon SareewiwattanaPaiboon Sareewiwattana
Chairman of the Audit Committee
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♦ Financial Performance and Condition ♦
For the Year 2012, from 1 January to 31 December 2012, the Company achieved a net profit of THB 738.40 million, or an EPS of THB 1.29, an increase by 12.87 % from the Year 2011, where the Company achieved a net profit of THB 654.18 million, or an EPS of THB 1.15. For the Year 2012, the Company earned a total brokerage fee of THB 2,521.07 million, a decrease by THB 103.33 million or 3.94 % from THB 2,624.40 million during Year 2011. In the Year 2012, the Company maintained its highest market share 11.86% in the domestic securities brokerage business, for eleven consecutive years. For the Year 2012, the Company’s fee and services income was THB 80.40 million, an increase from THB 45.39 million in Year 2011. In the Year 2012, the Company’s interest and dividend revenue was THB 582.63 million, an increase from THB 450.01 million in the Year 2011.
As of December 31, 2012, the Company’s total assets were THB 13,973.13 million, an increase by 94.99 % from December 31, 2011, where the Company’s total assets stood at THB 7,166.20 million. The majority of the Company’s assets were securities and derivatives receivables that may vary according to securities trading volume over the last three trading days of each year. Securities and derivatives receivables accounted for 83.57 % of the Company’s total assets as of December 31, 2012. Another major component of the Company’s assets was receivables from clearing house that accounted for 8.92 % of the Company’s total assets as of December 31, 2012.
As of December 31, 2011, the Company’s sources of capital included liabilities of THB 9,456.12 million and shareholders’ equity of THB 4,517.01 million. The Company’s debt-to-equity ratio as at December 31, 2012 stood at 2.09 times, an increase from that as of December 31, 2011 which was 0.62 times. The majority of the Company’s liabilities were securities and derivatives payables that may vary according to the trading situation in the SET. The Company’s debt-to-equity ratio, without taking into account securities and derivatives payables, as of December 31, 2010, 2011 and 2012 were 0.37, 0.31 and 1.22 times respectively.
The Company’s ROEs for the Years 2010, 2011 and 2012 were 17.58, 14.45 and 16.52 %, consecutively. In the 2011 and 2012, the Company made a total dividend payment of THB 666.03 and 713.52 million, respectively. This represents a dividend payout ratio of 99.07 % and 99.01 % consecutively.
For the Year 2012 ended December 31, 2012, the Company had a net cash used in operating activities of THB 3,682.79 million, due mainly to an increase securities and derivatives receivables of THB 5,789.28 million and receivables from clearing house of THB 1,085.48 million. The Company had a net cash flow provided by investing activities of THB 450.53 million in the Year 2012 as the Company invested in computer software and equipment of THB 11.82 and 75.46 million consecutively and cash received from interest of THB 537.09 million. For the Year 2012, the Company had a net cash flow from financing activities of THB 3,096.59 million.
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Financial SummaryFinancial SummaryFinancial SummaryFinancial Summary � Summary of Financial Statements
Unit: Millions of Baht 2010 2011 2012 Total Assets 9,036,571 7,166,201 13,973,132 Total Liabilities 4,399,841 2,746,120 9,456,119 Total Shareholders’ Equity 4,636,730 4,420,082 4,517,013 Securities Brokerage & Derivatives Brokerage Receivables 7,105,547 5,870,371 11,676,878 Total Revenue 3,111,784 3,192,941 3,235,559 Net Profit 805,593 654,181 738,404 EPS (THB) 1.42 1.15 1.29
� Financial Ratios 2010 2011 2012 Profitability Ratio Gross profit margin (%) 93.14 89.49 87.02 Net profit margin (%) 25.89 20.49 22.82 ROE (%) 17.58 14.45 16.52 Return on Investment (%) 50.19 65.97 55.76 Efficiency Ratio Return on Assets (%) 9.97 8.07 6.99 Total Assets Turnover (x) 0.39 0.39 0.31 Financial Policy Ratio) Liquid Assets to Total Assets Ratio (%) 13.22 6.35 2.57 Earning Assets to Total Assets Ratio (%) 89.36 86.37 84.82 Debt –to-Equity Ratio (x) 0.95 0.62 2.09 Other Ratios Investment to Total Assets Ratio (%) 1.51 0.49 0.54 NCR (%) (calculated in accordance with SEC’s rules) 96.22 146.06 44.75
♦ Report regarding the Responsibility of the Board of Directors for Financial Report The Board of Directors of Maybank Kim Eng Securities (Thailand) Plc. is responsible for the financial statements and financial information, as shown in its annual report for the year 2012. The Company’s financial reports and information are prepared in compliance with the Generally Accepted Accounting Principles, with due care and carefimportant information in the notes to financial statements for the benefit of shareholders and general investors. For the purpose of preparing reliable and accurate financial statements and informaDirectors has set up a risk management system to ensure accurate, complete and sufficient recording of accounting data, for the purpose of asset custody and prevention of any fraud and unusual activities. Also, the Company set up an Audit Committee to review its accounting policies, sufficiency of the internal control systems, auditing and disclosure of financial data to ensure accurate, reliable and reasonable data regarding its financial status, revenue, expenses and cash flow. The Company’s financial statements were audited by and the management provided data and documents necessary for the auditor to perform the auditing tasks and provide opinions, in accordance with applicable audiappears on the Company’s annual report. It is the Board of Directors’ opinion that the financial statements of Maybank Kim Eng Securities (Thailand) Plc. ending December 31, 2012 are prepared in line with generelevant rules and regulations.
Yuth VorachattarnYuth VorachattarnYuth VorachattarnYuth Vorachattarn Chairman
♦♦♦♦ Report regarding the Responsibility of the Board of Directors for
♦Annual Report 201
Pages 58
Report regarding the Responsibility of the Board of Directors Financial Report ♦
The Board of Directors of Maybank Kim Eng Securities (Thailand) Plc. is responsible for the financial statements and financial information, as shown in its annual report for the year 2012. The Company’s financial reports and information are prepared in compliance with the Generally Accepted Accounting Principles, with due care and carefulness. The Company has provided sufficient disclosure of important information in the notes to financial statements for the benefit of shareholders and general
For the purpose of preparing reliable and accurate financial statements and informaDirectors has set up a risk management system to ensure accurate, complete and sufficient recording of accounting data, for the purpose of asset custody and prevention of any fraud and unusual activities. Also,
t Committee to review its accounting policies, sufficiency of the internal control systems, auditing and disclosure of financial data to ensure accurate, reliable and reasonable data regarding its financial status, revenue, expenses and cash flow.
pany’s financial statements were audited by Ernst & Young Office Limited. The Board of Directors and the management provided data and documents necessary for the auditor to perform the auditing tasks and provide opinions, in accordance with applicable auditing standards. The auditor’s opinion already appears on the Company’s annual report.
It is the Board of Directors’ opinion that the financial statements of Maybank Kim Eng Securities (Thailand) Plc. ending December 31, 2012 are prepared in line with generally accepted accounting principles and relevant rules and regulations.
Montree SornpaisarnMontree SornpaisarnMontree SornpaisarnMontree Sornpaisarn Pusit KaewmongkolsriPusit KaewmongkolsriPusit KaewmongkolsriPusit Kaewmongkolsri Chief Executive Officer Chief Operating Officer
Report regarding the Responsibility of Financial Report ♦
Annual Report 2012♦
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Report regarding the Responsibility of the Board of Directors
The Board of Directors of Maybank Kim Eng Securities (Thailand) Plc. is responsible for the Company’s financial statements and financial information, as shown in its annual report for the year 2012. The Company’s financial reports and information are prepared in compliance with the Generally Accepted
ulness. The Company has provided sufficient disclosure of important information in the notes to financial statements for the benefit of shareholders and general
For the purpose of preparing reliable and accurate financial statements and information, the Board of Directors has set up a risk management system to ensure accurate, complete and sufficient recording of accounting data, for the purpose of asset custody and prevention of any fraud and unusual activities. Also,
t Committee to review its accounting policies, sufficiency of the internal control systems, auditing and disclosure of financial data to ensure accurate, reliable and reasonable data regarding
. The Board of Directors and the management provided data and documents necessary for the auditor to perform the auditing tasks
ting standards. The auditor’s opinion already
It is the Board of Directors’ opinion that the financial statements of Maybank Kim Eng Securities (Thailand) rally accepted accounting principles and
Pusit KaewmongkolsriPusit KaewmongkolsriPusit KaewmongkolsriPusit Kaewmongkolsri Chief Operating Officer
Maybank Kim Eng Securities (Thailand) Public Company Limited and its subsidiary Report and financial statements 31 December 2012
Independent Auditor's Report
To the Shareholders of Maybank Kim Eng Securities (Thailand) Public Company Limited
I have audited the accompanying consolidated financial statements of Maybank Kim Eng
Securities (Thailand) Public Company Limited and its subsidiary, 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 Maybank
Kim Eng Securities (Thailand) Public Company Limited for the same period.
Management's Responsibility for the Financial State ments
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with Thai Financial Reporting Standards, and for such internal control
as management determines is necessary to enable the preparation of financial statements that
are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
My responsibility is to express an opinion on these financial statements based on my audit. I
conducted my audit in accordance with Thai Standards on Auditing. Those standards require
that I comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation and fair presentation of the
financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity's internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the financial statements.
2
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 Maybank Kim Eng Securities (Thailand) Public Company Limited and its
subsidiary and of Maybank Kim Eng Securities (Thailand) 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.
Other matters
The consolidated financial statements of Maybank Kim Eng Securities (Thailand) Public
Company Limited and its subsidiary and the separate financial statements of Maybank Kim Eng
Securities (Thailand) Public Company Limited for the year ended 31 December 2011 were
audited by another auditor who, under her report dated 8 February 2012, expressed an
unqualified opinion on those statements.
Ratana Jala
Certified Public Accountant (Thailand) No. 3734
Ernst & Young Office Limited
Bangkok: 7 February 2013
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Statement of Financial Position
As at 31 December 2012
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2012 2011 2012 2011
Assets
Cash and cash equivalents 7 301,264,070 436,944,122 271,776,475 373,414,466
Deposits at financial institutions 8 3,450,759 3,446,674 3,450,759 3,446,674
Receivables from Clearing House 9 1,245,125,890 178,179,476 1,245,125,890 178,179,476
Securities and derivatives business receivables10 11,676,878,218 5,870,370,914 11,676,878,218 5,870,370,914
Investment 13 74,757,822 35,001,067 74,757,822 35,001,067
Investments in subsidiary 14 - - 50,693,137 99,999,980
Loans to employees under welfare program 35 289,116,853 323,156,809 289,116,853 323,156,809
Equipment 15 154,576,496 142,622,806 150,404,326 139,991,453
Intangible assets 16 31,628,981 23,792,302 28,506,351 21,697,875
Property foreclosed 9,886,500 9,886,500 9,886,500 9,886,500
Deposits 41,222,123 39,446,015 41,214,739 39,426,740
Other assets 17 145,223,800 103,354,882 141,671,428 101,631,117
Total assets 13,973,131,512 7,166,201,567 13,983,482,498 7,196,203,071
The accompanying notes are an integral part of the financial statements.
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Statement of Financial Position (continued)
As at 31 December 2012
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2012 2011 2012 2011
Liabilities and shareholders' equity
Liabilities
Borrowings from financial institutions 18 2,170,000,000 594,000,000 2,170,000,000 594,000,000
Payables to Clearing House 451,884,582 - 451,884,582 -
Securities and derivatives business payables 19 3,956,161,311 1,354,730,346 3,956,161,311 1,354,730,346
Derivatives liabilities 12 24,287,154 5,951,432 24,287,154 5,951,432
Debt issued and borrowings 20 2,007,423,532 - 2,007,423,532 -
Provisions 21 83,729,320 57,765,356 83,025,535 57,428,948
Accrued bonus 305,799,373 480,784,004 305,099,373 480,259,440
Income tax payable 131,393,646 133,493,250 131,393,646 133,493,250
Accrued expenses 103,738,259 75,446,194 102,015,150 74,993,205
Liabilities under financial lease agreements 23 17,569,177 16,518,166 16,072,114 14,806,825
Dividend payable 167,230,381 916,404 167,230,380 916,404
Other liabilities 36,902,005 26,514,884 36,450,451 26,371,726
Total liabilities 9,456,118,740 2,746,120,036 9,451,043,228 2,742,951,576
Shareholders' equity
Share capital
Registered
572,250,000 ordinary shares of Baht 5 each 2,861,250,000 2,861,250,000 2,861,250,000 2,861,250,000
Issued and fully paid-up
570,814,500 ordinary shares of Baht 5 each 2,854,072,500 2,854,072,500 2,854,072,500 2,854,072,500
Share premium 523,570,729 523,570,729 523,570,729 523,570,729
Premium on treasury shares 25 19,218,670 5,347,943 19,218,670 5,347,943
Retained earnings
Appropriated - statutory reserve 26 286,125,000 286,125,000 286,125,000 286,125,000
Appropriated - treasury shares reserve 25 - 11,260,973 - 11,260,973
Unappropriated 834,025,873 750,965,359 849,452,371 784,135,323
Less: Treasury shares 25 - (11,260,973) - (11,260,973) Less: Treasury shares 25 - (11,260,973) - (11,260,973)
Equity attributable to equity holders of the Compan y 4,517,012,772 4,420,081,531 4,532,439,270 4,453,251,495
Non-controlling interests of the subsidiary - - - -
Total shareholders' equity 4,517,012,772 4,420,081,531 4,532,439,270 4,453,251,495
Total liabilities and shareholders' equity 13,973,131,512 7,166,201,567 13,983,482,498 7,196,203,071
- - - -
The accompanying notes are an integral part of the financial statements.
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Statement of comprehensive income
For the year ended 31 December 2012
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2012 2011 2012 2011
Income
Brokerage fee 28 2,521,071,118 2,624,404,256 2,521,071,118 2,624,404,256
Fee and service income 29 80,397,019 45,393,007 78,668,049 44,948,582
Loss on investments 13.2 (68,836,286) (84,095,285) (68,836,286) (84,095,285)
Gain on derivatives 12.1 94,988,209 133,539,282 94,988,209 133,539,282
Interest and dividends 239,221,115 212,606,461 237,925,856 210,736,550
Interest on margin loans 343,412,557 237,397,319 343,412,557 237,397,319
Other income 25,305,392 23,696,513 26,088,277 24,884,765
Total income 3,235,559,124 3,192,941,553 3,233,317,780 3,191,815,469
Expenses
Financial costs 209,683,038 145,128,619 209,573,748 145,110,677
Fee and service expenses 207,420,719 202,951,487 206,333,894 202,239,240
Operating expenses
Personnel expenses 31 1,253,137,693 1,433,478,819 1,231,090,315 1,421,665,712
Premises and equipment expenses 305,022,622 288,471,862 302,125,962 287,342,915
Taxes and duties 15,011,415 9,595,374 14,974,540 9,563,506
Directors' remuneration 30 8,600,000 13,500,000 8,600,000 13,500,000
Information and technology 39,964,798 37,631,681 34,982,621 33,537,901
Other expenses 205,094,146 114,828,356 202,448,630 113,500,915
Total operating expenses 1,826,830,674 1,897,506,092 1,794,222,068 1,879,110,949
Reversal of bad debt and doubtful accounts 11 (405,578) (15,075,904) (405,578) (15,075,904)
Loss from impairment of investment - - 49,306,843 -
Total expenses 2,243,528,853 2,230,510,294 2,259,030,975 2,211,384,962
Profit before income tax expenses 992,030,271 962,431,259 974,286,805 980,430,507
Income tax expenses 33 (253,626,461) (308,250,076) (253,626,461) (308,250,076)
Profit for the year 738,403,810 654,181,183 720,660,344 672,180,431
Other comprehensive income:
Other comprehensive income for the year - - - - Other comprehensive income for the year - - - -
Total comprehensive income for the year 738,403,810 654,181,183 720,660,344 672,180,431
Profit attributable to:
Equity holders of the Company 738,403,810 654,181,183 720,660,344 672,180,431
Non-controlling interests of the subsidiary - -
738,403,810 654,181,183
The accompanying notes are an integral part of the financial statements.
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Statement of comprehensive income (continued)
For the year ended 31 December 2012
(Unit: Baht)
Consolidated financial statements Separate financial statements
Note 2012 2011 2012 2011
Total comprehensive income attributable to:
Equity holders of the Company 738,403,810 654,181,183 720,660,344 672,180,431
Non-controling interests of the subsidiary - -
738,403,810 654,181,183
Earnings per share of equity holders of the Company 34
Basic earnings per share 1.29 1.15 1.26 1.18
The accompanying notes are an integral part of the financial statements.
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Cash flow statements
For the year ended 31 December 2012
(Unit: Baht)
Consolidated financial statements Separate financial statements
2012 2011 2012 2011
Cash flows from operating activities
Profit before income tax 992,030,271 962,431,259 974,286,805 980,430,507
Adjustments to reconcile profit before income tax to net
cash provided by (paid for) operating activities:
Depreciation and amortisation 71,697,625 59,430,112 70,325,608 58,637,425
Reversal of bad debt and doubtful accounts (405,578) (15,075,904) (405,578) (15,075,904)
Unrealised gains on revaluation of investments (1,439,394) (2,371,264) (1,439,394) (2,371,264)
Unrealised losses on revaluation of derivatives liabilities 8,798,024 6,059,709 8,798,024 6,059,709
Unrealised losses on revaluation of foreign borrowings 7,423,581 - 7,423,581 -
Unrealised losses on revaluation of foreign receivables and payables19,397,595 - 19,397,595 -
Losses from impairment of investment - - 49,306,843 -
(Gains) losses on sales and written-off of premises
and equipment 842,273 (1,567,414) 594,214 (1,567,414)
Retirement benefit 25,963,964 21,672,995 25,596,587 21,336,587
Financial cost 208,598,709 143,989,990 208,598,709 143,989,990
Amortised interest expense of financial lease 1,084,329 1,138,629 975,039 1,120,687
Reversal of doubtful accounts - other receivables (100,000) - (100,000) -
Interest income (587,708,782) (453,011,580) (586,413,523) (451,141,669)
Cash paid for interest (210,201,712) (133,503,433) (210,092,422) (133,485,492)
Cash paid for income tax (255,791,346) (420,904,738) (255,726,065) (420,904,738)
Profit from operating activities before
changes in operating assets and liabilities 280,189,559 168,288,361 311,126,023 187,028,424
Decrease (increase) in operating assets
Deposits at financial institutions (4,085) (2,097,917) (4,085) (2,097,917)
Receivables from Clearing House (1,085,475,985) (56,974,735) (1,085,475,985) (56,974,735)
Securities and derivatives business receivables (5,789,275,254) 1,253,178,796 (5,789,275,254) 1,253,178,796
Investments (38,317,361) 103,869,384 (38,317,361) 103,869,384
Loans to employees under welfare program 34,039,956 (5,361,064) 34,039,956 (5,361,064) Loans to employees under welfare program 34,039,956 (5,361,064) 34,039,956 (5,361,064)
Deposits (1,776,108) 520,549 (1,787,999) 537,114
Other assets (7,908,766) 106,552 (6,058,159) 192,129
Increase (decrease) in operating liabilities
Payables to Clearing House 451,872,298 (495,175,561) 451,872,298 (495,175,561)
Securities and derivatives business payables 2,600,575,988 (1,324,963,149) 2,600,575,988 (1,324,963,149)
Derivative liabilities 9,537,698 (44,707,737) 9,537,698 (44,707,737)
Provisions - (2,750,000) - (2,750,000)
Accrued bonus (174,984,631) 23,565,511 (175,160,067) 23,040,947
Accrued expenses 28,344,885 2,151,820 27,074,765 2,802,502
Other liabilities 10,387,121 (13,373,293) 10,078,725 (12,977,623)
Net cash flows used in operating activities (3,682,794,685) (393,722,483) (3,651,773,457) (374,358,490)
The accompanying notes are an integral part of the financial statements.
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Cash flow statement (continued)
For the year ended 31 December 2012
(Unit: Baht)
Consolidated financial statements Separate financial statements
2012 2011 2012 2011
Cash flows from investing activities
Cash received from interest 537,086,677 449,994,855 535,704,135 448,333,012
Proceeds from disposals of equipment 728,456 4,303,442 719,508 4,303,442
Cash paid for purchases of equipment (75,461,752) (79,856,362) (72,583,706) (79,753,985)
Cash paid for purchases of intangible assets (11,824,099) (7,392,682) (10,504,100) (7,292,682)
Net cash flows from investing activities 450,529,282 367,049,253 453,335,837 365,589,787
Cash flows from financing activities
Cash received from borrowings 104,812,000,000 56,972,000,000 104,812,000,000 56,972,000,000
Cash paid for borrowings (103,236,000,000) (56,378,000,000) (103,236,000,000) (56,378,000,000)
Cash received from foreign borrowings 1,999,999,951 - 1,999,999,951 -
Cash received from other borrowings - 496,288,035 - 496,288,035
Cash paid to other borrowings - (825,500,000) - (825,500,000)
Cash received from treasury shares 25,131,700 - 25,131,700 -
Cash paid on principal of long-term lease (4,256,007) (5,193,090) (4,041,729) (5,162,329)
Dividend paid (500,290,293) (870,829,029) (500,290,293) (870,829,029)
Net cash flows from (used in) financing activities 3,096,585,351 (611,234,084) 3,096,799,629 (611,203,323)
Net decrease in cash and cash equivalents (135,680,052) (637,907,314) (101,637,991) (619,972,026)
Cash and cash equivalents as at 1 January 436,944,122 1,074,851,436 373,414,466 993,386,492
Cash and cash equivalents as at 31 December 301,264,070 436,944,122 271,776,475 373,414,466
- -
The accompanying notes are an integral part of the financial statements.
(Unit: Baht)
Retained earnings
Appropriated -
Premium on Appropriated - treasury shares
Share capital Share premium treasury shares statutory reserve reserve Unappropriated Treasury shares Total
Balance as at 31 December 2010 2,854,072,500 523,570,729 5,347,943 284,170,171 11,260,973 984,738,750 (11,260,973) 4,651,900,093
Total comprehensive income for the year - - - - - 672,180,431 - 672,180,431
Statutory reserve - - 1,954,829 - (1,954,829) - -
Dividend paid (Note 27) - - - - - (870,829,029) - (870,829,029)
Balance as at 31 December 2011 2,854,072,500 523,570,729 5,347,943 286,125,000 11,260,973 784,135,323 (11,260,973) 4,453,251,495
Balance as at 31 December 2011 2,854,072,500 523,570,729 5,347,943 286,125,000 11,260,973 784,135,323 (11,260,973) 4,453,251,495
Premium on treasury shares - - 13,870,727 - - - - 13,870,727
Decrease in treasury shares - - - - - - 11,260,973 11,260,973
Total comprehensive income for the year - - - - - 720,660,344 - 720,660,344
Statement of changes in shareholders' equity (conti nued)
For the year ended 31 December 2012
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Separate financial statements
Treasury shares reserve - - - - (11,260,973) 11,260,973 - -
Dividend paid (Note 27) - - - - - (666,604,269) - (666,604,269)
Balance as at 31 December 2012 2,854,072,500 523,570,729 19,218,670 286,125,000 - 849,452,371 - 4,532,439,270
The accompanying notes are an integral part of the financial statements.
(Unit: Baht)
Retained earnings Total equity
Appropriated - attributable to Non-controlling
Premium on Appropriated - treasury shares equity holders interests
Share capital Share premium treasury shares statutory reserve reserve Unappropriated Treasury shares of the Company of the subsidiary Total
Balance as at 31 December 2010 2,854,072,500 523,570,729 5,347,943 284,170,171 11,260,973 969,568,034 (11,260,973) 4,636,729,377 - 4,636,729,377
Total comprehensive income for the year - - - - - 654,181,183 - 654,181,183 - 654,181,183
Statutory reserve - - - 1,954,829 - (1,954,829) - - - -
Dividend paid (Note 27) - - - - - (870,829,029) - (870,829,029) - (870,829,029)
Balance as at 31 December 2011 2,854,072,500 523,570,729 5,347,943 286,125,000 11,260,973 750,965,359 (11,260,973) 4,420,081,531 - 4,420,081,531
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Statement of changes in shareholders' equity
For the year ended 31 December 2012
Consolidated financial statements
Equity attributable to equity holders of the Company
Balance as at 31 December 2011 2,854,072,500 523,570,729 5,347,943 286,125,000 11,260,973 750,965,359 (11,260,973) 4,420,081,531 - 4,420,081,531
Balance as at 31 December 2011 2,854,072,500 523,570,729 5,347,943 286,125,000 11,260,973 750,965,359 (11,260,973) 4,420,081,531 - 4,420,081,531
Premium on treasury shares - - 13,870,727 - - - - 13,870,727 - 13,870,727
Decrease in treasury shares - - - - - - 11,260,973 11,260,973 - 11,260,973
Total comprehensive income for the year - - - - - 738,403,810 - 738,403,810 - 738,403,810
Treasury shares reserve - - - - (11,260,973) 11,260,973 - - - -
Dividend paid (Note 27) - - - - - (666,604,269) - (666,604,269) - (666,604,269)
Balance as at 31 December 2012 2,854,072,500 523,570,729 19,218,670 286,125,000 - 834,025,873 - 4,517,012,772 - 4,517,012,772
The accompanying notes are an integral part of the financial statements.
1
Maybank Kim Eng Securities (Thailand) Public Compan y Limited and its subsidiary
Notes to financial statements
For the year ended 31 December 2012
1. General information
Maybank Kim Eng Securities (Thailand) Public Company Limited (“the Company”) is a
public limited company incorporated and domiciled in Thailand. Its parent company is
Maybank Kim Eng Holdings Limited, which is incorporated in Singapore. The parent
company of the Group is Mayban IB Holdings Sdn Bhd, which is incorporated in
Malaysia. The Company has licenses for securities business, which are brokering,
trading, underwriting, investment advisory, corporate finance advisory, securities
registrant, TFEX and securities borrowing and lending.
The Company's registered office is located on 999/9 the Offices at Central World,
20th - 21st and 24th Floor, Rama 1 Road, Pathumwan, Bangkok. As at 31 December
2012, the Company has 45 branches in Bangkok and upcountry (31 December 2011:
44 branches).
2. Basis for the preparation
The financial statements have been prepared in accordance with accounting standards
enunciated under the Accounting Professions. B.E. 2547 and are presented in
compliance with the requirement of the notification of the Office of the Securities and
Exchange Commission relating to the format of the financial statements of securities
companies No. Sor. Thor. Kor. Nor. 53/2553 dated 15 December 2010.
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 such financial statements in Thai language.
The financial statements have been prepared on a historical cost basis except where
otherwise disclosed in the accounting policies.
2
3. Basis for the preparation of the consolidated f inancial statements
a) The consolidated financial statements include the financial statements of
Maybank Kim Eng Securities (Thailand) Public Company Limited (“the
Company”) and the following subsidiary company (“the subsidiary”):
Company’s name Nature of business
Country of
incorporation
Percentage of
shareholding
2012 2011
Percent Percent
Kim Eng Asset
Management
(Thailand)
Company Limited
Fund management Thailand 99.99 99.99
b) Subsidiary is 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 subsidiary are prepared using the same
significant accounting policies as the Company.
d) Material balances and transactions between the Company and its subsidiary
company have been eliminated from the consolidated financial statements.
4. New accounting standards 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 Income Taxes
TAS 20 (revised 2009) Accounting for Government Grants and Disclosure of
Government Assistance
TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates
Financial Reporting Standard:
TFRS 8 Operating Segments
Accounting Standard Interpretations:
SIC 10 Government Assistance - No Specific Relation to Operating Activities
SIC 21 Income Taxes - Recovery of Revalued Non-Depreciable Assets
SIC 25 Income Taxes - Changes in the Tax Status of an Entity or its Shareholders
3
The Company’s management believes that these accounting standards will not have
any significant impact on the financial statements for the year when they are initially
applied, except for TAS 12 Income Taxes.
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 recognise 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 increase profit for the year 2012 by Baht 5 million
(0.01 Baht per share) and increase brought-forward retained earnings of the year 2012
by Baht 21 million (0.04 Baht per share) (separate financial statements: increase profit
for the year 2012 by Baht 15 million (0.03 Baht per share) and increase brought-
forward retained earnings of the year 2012 by Baht 21 million (0.04 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
1 January 2013
Accounting Standard Interpretation:
SIC 29 Service Concession Arrangements:
Disclosures
1 January 2014
Financial Reporting Standard Interpretations:
TFRIC 4 Determining whether an Arrangement
contains a Lease
1 January 2014
TFRIC 12 Service Concession Arrangements 1 January 2014
TFRIC 13 Customer Loyalty Programmes 1 January 2014
The management of the Company and its subsidiary are 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.
4
5. Significant accounting policies
5.1 Revenue recognition
a) Brokerage fees
Brokerage fees on securities and derivatives business are recognised as income
on the transaction date.
b) Fees and service income
Fees and service income are recognised when services have been rendered
taken into account to the stage of completion.
c) Gain (loss) on investments and derivatives
Gain (loss) on investments and derivatives are recognised as income/expense on
the transaction date.
d) Interest and dividend
Interest is recognised on an accrual basis based on an effective rate. Dividend is
recognised when the right to receive the dividend is established.
(e) Interest on credit balance loans
Interest is recognised over the term of the loans based on the amount of principal
outstanding. No accrual has been made for certain loans which, under
Notification No. Kor. Thor. 5/2544 dated 15 February 2001 of the Office of the
Securities and Exchange Commission, are not qualified for recognition of interest
on an accrual basis and consideration of other relevant factors.
5.2 Expense recognition
a) Interest on borrowings
Interest on borrowings is charged to expenses on an accrual basis.
b) Fees and service expenses
Fees and service expenses are charged to expenses on an accrual basis.
5.3 Cash and cash equivalents
Cash and cash equivalents include cash on hand and all bank deposit accounts
maturing within 3 months or less from the date of acquisition, and including certificate
of deposit maturing within 3 months or less from the date of acquisition and not subject
to withdrawal restrictions.
5
5.4 Recognition and amortisation of customers’ asse ts
Assets which customers have placed with the Company for securities trading, in term
of cash accounts and credit balance accounts, including amounts which customers
have placed as security for derivative trading, are recorded as assets and liabilities of
the Company for internal control purpose. At the financial position date, the Company
writes off those amounts which there are no guarantee obligations from both assets
and liabilities and presents only those assets which belong to the Company.
5.5 Borrowing and lending of securities
The Company is engaged in securities borrowing and lending, whereby the Company
acts as a principal or an agent of the borrowers and lenders of securities.
The Company records its obligations to return borrowed securities which it has lent as
“Securities borrowing payables” and securities lent to customers are recorded as
“Securities borrowing receivables” in the statement of financial position. At the end of
the year, the balance of securities borrowing payables and securities borrowing
receivables are adjusted based on the latest offer price quoted on the Stock Exchange
of Thailand of the last working day of the year. Gains or losses arising from such
adjustment are included in part of profit or loss in the statement of comprehensive
income. The Company records cash paid as collateral for securities borrowing as
“Guaranteed deposit receivables” and cash received as collateral for securities lending
as “Guarantee deposit payable”. Fees from borrowing and lending are recognised on
an accrual basis over the term of the lending.
5.6 Investments
a) Investments in securities held for trading are determined at fair value. Changes in
the fair value of these securities are recorded as profit or loss in the statement of
comprehensive income.
b) Investments in available-for-sale securities are stated at fair value. Changes in
the fair value of these securities are recognised as gain (loss) on changes in
value of investments as part of other comprehensive income in the statement of
comprehensive income, and will be recognised as part of profit or loss when the
securities are sold.
c) Held to maturity debt securities are initially recognised at purchase price plus
transaction costs and subsequently accounted for at amortised cost using
effective interest method less allowance for impairment loss (if any).
d) Investments in non-marketable equity securities which the Company classified as
other investments, are stated at cost net of allowance for impairment loss (if any).
6
e) Investments in subsidiary are accounted for in the separate financial statements
using the cost net of allowance for impairment loss (if any).
f) The fair value of marketable securities is based on the latest bid price of the last
working day of the year as quoted on the Stock Exchange of Thailand. The fair
value of debt instruments is determined based on required rate of return or the
yield rates quoted by the Thai Bond Market Association.
g) The weighted average method is used for computation of the cost of investments.
On disposal of an investment, the difference between net disposal proceeds and
the carrying amount of the investment is recognised as part of profit or loss in the
statement of comprehensive income.
h) Impairment loss (if any) is included in part of profit or loss in the statement of
comprehensive income when there is a factor indicating that such investments
might be impaired.
5.7 Receivables from/payables to Clearing House
Receivables from/payables to Clearing House comprise the net balance of receivables
from/payables to Thailand Clearing House in respect of settlements for securities
trades and derivative instruments. They include amounts pledged with Thailand
Clearing House as security for derivatives trading the and the net balance of amounts
receivable from/payable to foreign securities companies in respect of securities trades
settled overseas through foreign securities companies.
5.8 Securities and derivatives business receivables and allowance for doubtful
accounts
Securities and derivatives business receivables comprise the net securities business
receivables and derivatives business receivables, after deducting allowance for
doubtful accounts and adding related accrued interest receivables.
In addition, securities business receivables comprise the net receivable balances of
cash accounts, credit balance receivables for which the securities purchased are used
as collateral, securities borrowing and lending receivables and guarantee deposit
receivables (which comprise cash placed as guarantee for borrowers of securities) as
well as other receivables such as overdue cash customers accounts and receivables
which are subject to legal proceedings, are undergoing restructuring or are settling in
installments.
7
The Company provides allowance for doubtful accounts based on a review of the
debtor’s ability to make payment, taking into consideration recovery risk and the value of
the collateral. Such debt classifications and provisions are made in accordance with the
guideline laid down in the Notification No. Kor. Thor. 5/2544 dated 15 February 2001 of
the Office of the Securities and Exchange Commission (SEC), and consideration of other
relevant factors.
5.9 Premises and Equipment/Depreciation
Premises and equipment are stated at cost less accumulated depreciation and
allowance for impairment loss (if any). Depreciation of premises and equipment is
calculated by reference to their cost on a straight-line basis over the following
estimated useful lives:
Building improvement 5 years
Furniture, fixtures and equipment 3 and 5 years
Vehicles 5 years
No depreciation is provided on assets under installation.
Depreciation is included in determining income.
An item of premises 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 is included in profit or loss when the asset is derecognised.
5.10 Intangible assets and amortisation
Expenditure on acquisitions of intangible assets is capitalised and amortised using the
straight-line method over their useful lives, generally over 5 years, with the exception of
TFEX member fees and fund license, which are not amortised.
Such intangible assets are not revalued. The carrying amount of each intangible asset
is reviewed annually and adjusted for impairment where it is considered necessary.
5.11 Property foreclosed
Property foreclosed consists of immovable properties, and is stated at the lower of cost
or net realisable value. Loss on impairment is included in determining income. Gains or
losses on disposals of such properties are recognised in the statement of
comprehensive income at the date of disposal.
8
5.12 Loans to employees under welfare program
Loans to employees under welfare program are recognised initially at the amount
granted to the employees and are subsequently stated at amortised cost, based on the
contractual interest rate. Returns are recognised in the statement of comprehensive
income over the term of loan.
5.13 Borrowings and debt issued
Borrowings and debt issued are recognised initially at the fair value of the proceeds
received. Borrowings are subsequently stated at amortised cost, using the effective
yield method; any difference between proceeds and the redemption value is
recognised in the statements of comprehensive income over the period of the
borrowings.
5.14 Long-term lease
Leases of equipment which transfer substantially all the risks and rewards of
ownership to the lessee are classified as finance leases. Finance leases are
capitalised at the lower of the fair value of the leased assets and the present value of
the minimum lease payments. The outstanding rental obligations, net of finance
charges, are recorded as liabilities, while the interest element is charged to profit or
loss over the lease period. The assets acquired under finance leases is depreciated
over the useful life of the asset.
Operating lease payments are recognised as an expense in profit or loss on a straight
line basis over the lease term.
5.15 Securities and derivatives business payables
Securities and derivatives business payables are the obligations of the Company in
respect of its securities and derivatives business with outside parties, such as the net
payable balances of cash accounts, securities delivery obligations as a result of short
sales or securities borrowing, and obligations to return assets held by the Company as
collateral for securities lending.
5.16 Provisions
Provisions are recognised when the Company and its subsidiary have a present
obligation as a result of a past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation, and a reliable
estimate can be made of the amount of the obligation.
9
5.17 Treasury stocks
The consideration paid in case where the Company purchases back ordinary share of
the Company, including any attributable incremental external costs net of income
taxes, is deducted from total owners’ equity as treasury shares until the treasury
shares are cancelled. It such shares are subsequently sold or reissued, any
consideration received is included in owners’ equity.
5.18 Related party transactions
Related parties comprise enterprises and individuals that control, or are controlled by,
the Company and its subsidiary, whether directly or indirectly, or which are under
common control with the Company and its subsidiary.
They also include associated companies and individuals which directly or indirectly
own a voting interest in the Company and its subsidiary that gives them significant
influence over the Company and its subsidiary, management personnel, directors and
officers with authority in the planning and direction of the operations of the Company
and its subsidiary.
5.19 Foreign currencies
Transactions in foreign currencies are translated into Baht at the exchange rate ruling
at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated into Baht at the exchange rate ruling at the end of reporting date.
Gains and losses on exchange are included in determining income.
5.20 Impairment of assets
The Company and its subsidiary assess at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or when annual
impairment testing for an asset is required, the Company and its subsidiary realise loss
on impairment when the asset’s recoverable amount is less than the book value. An
asset’s recoverable amount is the higher of an asset’s fair value less cost to sell and its
value in use. Fair value less cost to sell reflects the amount that the Company and its
subsidiary could obtain from the disposal of the asset in an arm’s length transaction
between knowledgeable, willing parties, after deducting the cost of disposal. In
assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time
value of money and the risks specific to the asset.
Impairment losses are recognised in part of profit or loss in the statement of
comprehensive income.
10
At the reporting date, an assessment is made whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased.
If such indication exists, the Company and its subsidiary estimate the asset’s
recoverable amount and impairment loss recognised in prior periods is reversed.
5.21 Employee benefits
a) Short-term benefits
Salaries, wages, bonuses, contribution to the social security fund and provident fund
and annual leave benefits are recognised as expenses when the employees
performed the service.
b) Post-employment benefits (Defined contribution plans)
The Company and its subsidiary and the employees have jointly established a
provident fund. The fund is monthly contributed by employees and by the Company
and its subsidiary. The fund’s assets are held in a separate trust fund and the
Company and its subsidiary’ contributions are recognised as expenses when
incurred.
c) Post-employment benefits (Defined benefit plans)
The Company and its subsidiary have obligations in respect of the severance
payments they must make to employees upon retirement under labor law. The
Company and its subsidiary 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, using the projected unit credit method. Such
determination is made based on various assumptions, including discount rate,
future salary increase rate, staff turnover rate, mortality rate, and inflation rates.
For the first-time adoption of TAS 19 Employee Benefits, the Company and its
subsidiary elected to recognise the transitional liability, which exceeds the liability
that would have been recognised at the same date under the previous accounting
policy, as an expense on a straight-line basis over up to five years from the date
of adoption.
5.22 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.
11
5.23 Derivatives
Forward exchange contracts
Forward exchange contracts are recorded at fair value. Unrecognised gains or losses
on revaluation are included in determining income.
Futures contracts
The Company initially recognises future contracts at fair value. Obligations under
derivatives business and cash collateral amounts pledged as security for derivatives
trading are recorded as receivable at Thailand Clearing House. Subsequently, as at
the date of the statements of financial position, the futures contracts are presented at
their fair value, with the fair value of marketable future contracts being calculated with
reference to the last bid/offer prices quoted on the Stock Exchange of Thailand on the
last business day of the year. Unrealised gains or losses resulting from changes in the
fair value of futures contracts are included in the statements of comprehensive income.
Derivative warrants
The Company initially recognises the fair value of derivative warrants as financial
liabilities. Subsequently, on the statement of financial position date, derivative warrants
are presented at fair value, with the fair value of marketable derivative warrants being
calculated with reference to the last offer price quoted on the Stock Exchange of
Thailand on the last business day of the year. Unrealised gains or losses resulting from
changes in the fair values of derivative warrants are included in the statement of
comprehensive income.
6. Significant accounting judgments and estimates
The preparation of financial statements in conformity with financial reporting standards
at time requires management to make subjective judgments and estimates regarding
matters that are inherently uncertain. These judgments and estimates affect reported
amounts and disclosure, and actual results could differ from these estimation. The
significant accounting judgments and estimates are as follow:
12
6.1 Allowances for doubtful accounts for securities and derivatives business
receivables
Allowances for doubtful accounts for securities and derivatives business receivables
are intended to adjust the values of receivables for probable credit losses. The
management uses the SEC’s regulations regarding the provision of allowance for
doubtful accounts and judgment to establish reserves for estimated losses for each
outstanding receivable when there is any doubt about the receivable’s capability to
repay the debt. The allowances for doubtful accounts are determined through a
combination of specific reviews, probability of default and the value of the securities
used as collateral.
6.2 Fair value of financial instruments
In determining the fair value of financial instruments that are not actively traded and for
which quoted market prices are not readily available, the management exercised
judgment, using valuation techniques. The input to these models is taken from
observable markets, and includes consideration of liquidity, correlation and long-term
volatility of financial instruments.
6.3 Allowance for impairment of investments
The Company and its subsidiary treat other investments as impaired when there has
been a significant or prolonged decline in the fair value below their cost or where other
objective evidence of impairment exists. The determination of what is “significant” or
“prolonged” requires judgment of the management.
6.4 Building improvement and equipment/Depreciation
In determining depreciation of building improvement and equipment, the management
is required to make estimates of the useful lives and salvage values of the Company’s
premises and equipment and to review estimate useful lives and salvage values when
there are any changes.
In addition, the management is required to review premises and equipment for
impairment on a periodical basis and record impairment losses in the period when it is
determined that their recoverable amount is lower than the carrying cost. This requires
judgments regarding forecast of future revenues and expenses relating to the assets
subject to the review.
13
6.5 Recognition and derecognition of assets and lia bilities
In considering whether to recognise or to derecognise assets or liabilities, the
management is required to make judgment on whether significant risk and rewards of
those assets or liabilities have been transferred, based on their best knowledge of the
current events and arrangements.
6.6 Leases
In determining whether a lease is to be classified as an operating lease or finance
lease, the management is required to use judgment regarding whether significant risk
and rewards of ownership of the leased asset has been transferred, taking into
consideration terms and conditions of the arrangement.
6.7 Employee benefit
The obligation under the defined benefit plan is determined based on actuarial
techniques. Such determination is made based on various assumptions, including
discount rate, future salary increase rate, staff turnover rate and mortality rate.
6.8 Litigation
The Company has contingent liabilities as a result of litigation. The management has
used judgment to assess of the results of the litigation cases and recorded provision for
contingent liabilities as at the financial statement date. In case where they believe that
there will be no loss, they will not provide contingent liabilities as of the end of reporting
period.
7. Cash and cash equivalents
(Unit: Baht)
Consolidated
financial statements
Separate
financial statements
2012 2011 2012 2011
Cash on hand 550,251 545,213 545,298 540,241
Current accounts and savings accounts 1,759,457,181 1,107,793,920 1,758,974,539 1,106,769,236
Fixed accounts 3,024,000,000 34,000,000 3,000,000,000 -
Promissory notes 5,000,000 7,028,500,000 - 7,000,000,000
Total cash and cash equivalents 4,789,007,432 8,170,839,133 4,759,519,837 8,107,309,477
Less: Cash deposits held for customers (4,487,743,362) (7,733,895,011) (4,487,743,362) (7,733,895,011)
Net cash and cash equivalents 301,264,070 436,944,122 271,776,475 373,414,466
14
8. Deposits at financial institutions
(Unit: Baht)
Consolidated and
separate financial statements
2012 2011
Over 3 months -
1 year
Over 3 months -
1 year
Fixed deposits 3,100,013,668 9,583
Deposits with restriction 3,437,091 3,437,091
Total deposits at financial institutions 3,103,450,759 3,446,674
Less: Cash deposits held for customers (3,100,000,000) -
Net deposits at financial institutions 3,450,759 3,446,674
As at 31 December 2012 and 2011, fixed deposits of Baht 3 million are pledged as
collateral to a local bank for letter of guarantees as described in Note 37.2 to the
financial statements.
9. Receivables from Clearing House
(Unit: Baht)
Consolidated and
separate financial statements
2012 2011
Receivables from Clearing House 1,406,135,298 350,281,137
Receivables from foreign securities company 1,306,085,544 -
Less: Receivables from Clearing House held for customers (1,467,094,952) (172,101,661)
Net receivables from Clearing House 1,245,125,890 178,179,476
15
10. Securities and derivatives business receivables
(Unit: Baht)
Consolidated and
separate financial statements
2012 2011
Securities business receivables
Cash accounts 2,772,635,962 1,125,242,311
Credit balance accounts 8,776,277,837 4,404,761,020
Receivables under securities borrowing and lending
business
- Guarantee deposit receivables - 59,956,320
- Securities borrowing receivables 82,273,325 257,182,395
Other receivables
- Overdue customers’ accounts 246,858,898 247,136,388
Total securities business receivables 11,878,046,022 6,094,278,434
Add: Accrued interest receivables 54,034,972 37,207,737
Less: Allowance for doubtful accounts (261,379,208) (261,784,786)
Securities business receivables and accrued interest
receivables - net 11,670,701,786 5,869,701,385
Derivative business receivables
Derivative business receivables 6,330,142 823,239
Less: Allowance for doubtful accounts (153,710) (153,710)
Derivative business receivables - net 6,176,432 669,529
Total securities and derivatives business receivables - net 11,676,878,218 5,870,370,914
16
10.1 As at 31 December 2012, the Company had other receivables with book values
(including accrued interest receivables) totaling Baht 262 million from which it has
ceased recognising income (31 December 2011: Baht 262 million).
10.2 As at 31 December 2012 and 2011, the Company has classified securities business
receivables and derivative business receivables, in accordance with the relevant
notification issued by the Office of the Securities and Exchange Commission. The
classification is as follows:
(Unit: Baht)
Consolidated and separate financial statements
31 December 2012
Debt balance
Allowance for
doubtful
accounts
Debt balance net of
allowance for
doubtful accounts
Normal Debt 11,676,657,853 - 11,676,657,853
Sub-standard Debt 9,678,539 (9,458,174) 220,365
Doubtful Debt 252,074,744 (252,074,744) -
Total 11,938,411,136 (261,532,918) 11,676,878,218
(Unit: Baht)
Consolidated and separate financial statements
31 December 2011
Debt balance
Allowance for
doubtful
accounts
Debt balance net of
allowance for
doubtful accounts
Normal Debt 5,870,278,637 - 5,870,278,637
Sub-standard Debt 9,470,138 (9,377,861) 92,277
Doubtful Debt 252,560,635 (252,560,635) -
Total 6,132,309,410 (261,938,496) 5,870,370,914
17
11. Allowance for doubtful accounts
(Unit: Baht)
Consolidated and separate financial statements
For the years ended 31 December
2012 2011
Balance - beginning of the year 261,938,496 277,014,400
Add: Doubtful accounts 118,450 175,986
Less: Repayment (524,028) (15,172,220)
Reversal of doubtful accounts - (79,670)
Balance - end of the year 261,532,918 261,938,496
12. Derivatives assets and derivatives liabilities
(Unit: Baht)
Consolidated and separate financial statements
2012
Fair value Notional amount
Assets Liabilities Assets Liabilities
Trading derivatives
Derivatives warrants - 16,313,112 - 51,005,900
Forward exchange contract - 7,974,042 - 1,997,062,277
Total derivatives assets and
derivatives liabilities - 24,287,154 - 2,048,068,177
(Unit: Baht)
Consolidated and separate financial statements
2011
Fair value Notional amount
Assets Liabilities Assets Liabilities
Trading derivatives
Derivatives warrants - 5,951,432 - 13,439,550
Total derivatives assets and
derivatives liabilities - 5,951,432 - 13,439,550
18
12.1 Gain on derivatives
(Unit: Baht)
Consolidated and separate financial statements
For the years ended 31 December
2012 2011
Realised gain on trading in derivatives
Derivative warrants 95,812,191 139,598,991
Unrealised loss on revaluation of derivatives
Derivative warrants (823,982) (6,059,709)
Total gain on derivatives 94,988,209 133,539,282
13. Investments
(Unit: Baht)
Consolidated and separate financial statements
2012 2011
Cost value/
amortised cost Fair value
Cost value/
amortised cost Fair value
Trading securities
Equity securities
Listed securities 56,606,139 57,629,162 18,288,779 17,872,407
Total 56,606,139 57,629,162 18,288,779 17,872,407
Add (less): allowance for revaluation 1,023,023 (416,372)
Net trading securities 57,629,162 17,872,407
Other investments
Other securities - ordinary shares 31,791,160 31,791,160
Less: allowance for impairment (14,662,500) (14,662,500)
Net other investments 17,128,660 17,128,660
Total investments - net 74,757,822 35,001,067
13.1 Investments subject to restrictions
(Unit: Baht)
Consolidated and separate financial statements
2012 2011
Cost value/
amortised cost Fair value
Cost value/
amortised cost Fair value
Securities placed with court to stay execution 7,622,000 15,509,541 7,622,000 11,563,060
Total 7,622,000 15,509,541 7,622,000 11,563,060
19
13.2 Gain (loss) on investments
(Unit: Baht)
Consolidated and separate financial statements
For the years ended 31 December
2012 2011
Realised loss on trading securities (70,275,191) (86,466,549)
Unrealised gain on revaluation of trading securities 1,438,905 2,371,264
Total loss on investments (68,836,286) (84,095,285)
14. Investments in subsidiary
As at 31 December 2012 and 2011, investments in subsidiary as presented in separate
financial statements are as follows:
Company’s name Business
Type of
Relations Paid-up capital
Shareholding
percentage Cost
Allowance for
impairment loss
Dividend received
during the year
2012 2011 2012 2011 2012 2011 2012 2011 2012 2011
Million
Baht
Million
Baht
Percent Percent Million
Baht
Million
Baht
Million
Baht
Million
Baht
Million
Baht
Million
Baht
Subsidiary company included in
consolidated financial statements
Kim Eng Asset Management
(Thailand) Company Limited
Fund
management
Shareholding 100 100
99.99 99.99 100 100 (49) - - -
15. Equipment
(Unit: Baht)
Consolidated financial statements
2012
Building
improvement
Furniture
Fixtures and
equipment
Asset under
financial lease
Construction
in process Total
Cost
31 December 2011 173,459,949 493,763,391 26,224,116 828,671 694,276,127
Additions 15,194,112 47,573,312 5,307,018 10,255,668 78,330,110
Transfer in (out) 9,711,785 1,133,275 - (10,845,060) -
Disposals/written-off (7,708,913) (69,614,268) - - (77,323,181)
31 December 2012 190,656,933 472,855,710 31,531,134 239,279 695,283,056
Accumulated depreciation
31 December 2011 132,735,798 406,842,500 12,075,023 - 551,653,321
Depreciation for the year 13,357,057 46,111,483 5,337,556 - 64,806,096
Disposals/written-off (6,191,855) (69,561,002) - - (75,752,857)
31 December 2012 139,901,000 383,392,981 17,412,579 - 540,706,560
Net book value
31 December 2011 40,724,151 86,920,891 14,149,093 828,671 142,622,806
31 December 2012 50,755,933 89,462,729 14,118,555 239,279 154,576,496
Depreciation charge for the years ended 31 December
2011 53,235,522
2012 64,806,096
20
(Unit: Baht)
Consolidated financial statements
2011
Building
improvement
Furniture
Fixtures and
equipment
Motor
Vehicles
Asset under
financial
lease
Construction
in process Total
Cost
31 December 2010 163,044,307 460,647,486 288,205 30,798,972 1,639,812 656,418,782
Additions 21,881,238 60,935,780 - 1,742,101 10,530,480 95,089,599
Transfer in (out) 10,309,889 1,031,732 - - (11,341,621) -
Disposals/written-off (21,775,485) (28,851,607) (288,205) (6,316,957) - (57,232,254)
31 December 2011 173,459,949 493,763,391 - 26,224,116 828,671 694,276,127
Accumulated depreciation
31 December 2010 141,263,522 398,248,152 236,909 13,166,058 - 552,914,641
Depreciation for the year 11,256,227 37,211,542 31,882 4,735,871 - 53,235,522
Disposals/written-off (19,783,951) (28,617,194) (268,791) (5,826,906) - (54,496,842)
31 December 2011 132,735,798 406,842,500 - 12,075,023 - 551,653,321
Net book value
31 December 2010 21,780,785 62,399,334 51,296 17,632,914 1,639,812 103,504,141
31 December 2011 40,724,151 86,920,891 - 14,149,093 828,671 142,622,806
(Unit: Baht)
Separate financial statements
2012
Building
improvement
Furniture
Fixtures and
equipment
Asset under
financial lease
Construction
in process Total
Cost
31 December 2011 172,890,022 492,645,521 24,482,014 828,671 690,846,228
Additions 13,450,280 46,439,098 5,307,018 10,255,668 75,452,064
Transfer in (out) 9,711,785 1,133,275 - (10,845,060) -
Disposals/written-off (7,138,986) (69,590,529) - - (76,729,515)
31 December 2012 188,913,101 470,627,365 29,789,032 239,279 689,568,777
Accumulated depreciation
31 December 2011 132,479,823 406,358,000 12,016,952 - 550,854,775
Depreciation for the year 13,102,801 45,633,939 4,989,136 - 63,725,876
Disposals/written-off (5,869,362) (69,546,838) - - (75,416,200)
31 December 2012 139,713,262 382,445,101 17,006,088 - 539,164,451
Net book value
31 December 2011 40,410,199 86,287,521 12,465,062 828,671 139,991,453
31 December 2012 49,199,839 88,182,264 12,782,944 239,279 150,404,326
Depreciation charge for the years ended 31 December
2011 52,731,446
2012 63,725,876
21
(Unit: Baht)
Separate financial statements
2011
Building
improvement
Furniture
Fixtures and
equipment
Motor
Vehicles
Asset under
financial
lease
Construction
in process Total
Cost
31 December 2010 162,474,380 459,631,994 288,205 30,798,972 1,639,812 654,833,363
Additions 21,881,238 60,833,403 - - 10,530,480 93,245,121
Transfer in (out) 10,309,889 1,031,732 - - (11,341,621) -
Disposals/written-off (21,775,485) (28,851,608) (288,205) (6,316,958) - (57,232,256)
31 December 2011 172,890,022 492,645,521 - 24,482,014 828,671 690,846,228
Accumulated depreciation
31 December 2010 141,121,532 398,095,674 236,909 13,166,058 - 552,620,173
Depreciation for the year 11,142,242 36,879,521 31,882 4,677,801 - 52,731,446
Disposals/written-off (19,783,951) (28,617,195) (268,791) (5,826,907) - (54,496,844)
31 December 2011 132,479,823 406,358,000 - 12,016,952 - 550,854,775
Net book value
31 December 2010 21,352,848 61,536,320 51,296 17,632,914 1,639,812 102,213,190
31 December 2011 40,410,199 86,287,521 - 12,465,062 828,671 139,991,453
As at 31 December 2012 and 2011, certain 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 423 million
and Baht 466 million, respectively (separate financial statements: Baht 423 million and
Baht 466 million, respectively).
16. Intangible assets
(Unit: Baht)
Consolidated financial statements
Cost Accumulated amortisation
Useful
lives
1 January
2012 Increase
Transfer in
(transfer
out) Written-off
31
December
2012
1 January
2012 Increase Written-off
31
December
2012
Net
intangible
assets
Computer software 5 years 75,801,352 11,689,185 2,015,543 (101,500) 89,404,580 57,599,940 6,891,529 (101,093) 64,390,376 25,014,204
Software under
installation - 1,270,342 2,539,430 (2,015,543) - 1,794,229 - - - - 1,794,229
Deferred expenses
of membership
fee - Thailand
Futures
Exchanges - 5,000,000 - - - 5,000,000 1,679,452 - - 1,679,452 3,320,548
Deferred expenses
of fund license - 1,000,000 500,000 - - 1,500,000 - - - - 1,500,000
Total 83,071,694 14,728,615 - (101,500) 97,698,809 59,279,392 6,891,529 (101,093) 66,069,828 31,628,981
22
(Unit: Baht)
Separate financial statements
Cost Accumulated amortisation
Useful
lives
1 January
2012 Increase
Transfer in
(transfer
out) Written-off
31
December
2012
1 January
2012 Increase Written-off
31
December
2012
Net
intangible
assets
Computer software 5 years 74,346,352 11,689,185 2,015,543 (101,500) 87,949,580 57,239,367 6,599,732 (101,093) 63,738,006 24,211,574
Software under
installation - 1,270,342 1,719,430 (2,015,543) - 974,229 - - - - 974,229
Deferred expenses
of membership
fee - Thailand
Futures
Exchanges - 5,000,000 - - - 5,000,000 1,679,452 - - 1,679,452 3,320,548
Total 80,616,694 13,408,615 - (101,500) 93,923,809 58,918,819 6,599,732 (101,093) 65,417,458 28,506,351
As at 31 December 2012 and 2011, certain computer software items have been fully
amortised but are still in use. The gross carrying amount (before deducting
accumulated amortisation) of those intangible assets amounted to approximately Baht
48 million and Baht 46 million, respectively (separate financial statements: Baht 48
million and Baht 46 million, respectively).
17. Other assets
(Unit: Baht)
Consolidated
financial statements
Separate financial
statements
2012 2011 2012 2011
Clearing fund 74,415,694 64,522,254 74,415,694 64,522,254
Accrued income 39,093,090 7,981,466 38,926,404 7,845,194
Prepaid expenses 13,911,268 14,920,626 12,655,659 14,573,102
Others 17,803,748 15,930,536 15,673,671 14,690,567
Total 145,223,800 103,354,882 141,671,428 101,631,117
18. Borrowings from financial institutions
As at 31 December 2012 and 2011, borrowings from financial institutions comprising
only domestic borrowings in Baht currency are classified as follows:
(Unit: Baht)
Consolidated and separate financial statements
2012
Interest rate per annum Remaining period to maturity
(percent) At call Within 1 year Total
Financial institutions
Promissory notes 2.86 - 3.00 1,995,000,000 175,000,000 2,170,000,000
Total borrowings from
financial institutions 1,995,000,000 175,000,000 2,170,000,000
23
(Unit: Baht)
Consolidated and separate financial statements
2011
Interest rate per annum Remaining period to maturity
(percent) At call Within 1 year Total
Financial institutions
Promissory notes 3.3, 3.4 - 594,000,000 594,000,000
Total borrowings from
financial institutions - 594,000,000 594,000,000
19. Securities and derivatives business payables
(Unit: Baht)
Consolidated and
separate financial statements
2012 2011
Cash accounts 3,581,245,998 1,097,547,951
Payables under securities borrowing and lending business 82,449,545 257,182,395
Guarantee deposit payables 292,465,768 -
Total securities and derivatives business payables 3,956,161,311 1,354,730,346
20. Debt issued and borrowings
As at 31 December 2012, debt issued and borrowings are classified as follows:
(Unit: Baht)
Consolidated and Separate financial statement
31 December 2012
Interest rate per annum Remaining period to maturity
(percent) At call Within 1 year Total
Other borrowings and debt issued
Borrowings from related company
- borrowing from Maybank Kim Eng
Holdings Limited 79,396,584 SGD 0.90 - 2,007,423,532 2,007,423,532
Total other borrowings and debt
issued - 2,007,423,532 2,007,423,532
Borrowings from Maybank Kim Eng Holdings Limited are short-term borrowings which
will mature in January 2013
24
21. Provisions
(Unit: Baht)
Consolidated
financial statements
Separate
financial statements
2012 2011 2012 2011
Balance - beginning of the year 57,765,356 34,453,333 57,428,948 34,453,333
Increase during the year 25,963,964 23,312,023 25,596,587 22,975,615
Balance - end of the year 83,729,320 57,765,356 83,025,535 57,428,948
As at 31 December 2012 and 2011, the provision comprised the obligations of the
Company to Nithipat Capital Public Co., Ltd., (“Nithipat”), the former parent company,
of approximately Baht 11 million in the event that Nithipat is unable to collect securities
debts that have not been transferred as mentioned in the Asset Transfer Letter dated
14 August 1996. Additional provision is set up for the anticipated liability in respect of
the notice that the group received from a securities trading customer of Yuanta
Securities (Thailand) Limited, demanding the Company pay damages of approximately
Baht 16 million for an infringement that occurred before the customer was transferred
to the Company.
As at 31 December 2012, the Company and its subsidiary recorded post employment
benefits, payable to employees under the Thai labor law in the consolidated financial
statements amounting to Baht 53 million (separate financial statements: Baht 52
million), as described in Note 22 to the financial statements. In addition, the Company
and its subsidiary have set aside provisions for dismantling costs amounting to Baht 4
million (separate financial statements: Baht 4 million).
22. Provisions for long-term employee benefits
As at 1 January 2011, the Company and its subsidiary have changed their accounting
policies to bring them in line with TAS 19 Employee Benefits. This accounting standard
requires employee benefits to be recognised as an expense in the period in which
service is performed by the employee. In particular, an entity has to evaluate and make
provision for post-employment benefits using actuarial techniques.
The Company and its subsidiary have changed this accounting policy in the year 2011
and recognise the liability in the transition period as an expense on a straight-line basis
over up to five years from the date of adoption.
As at 31 December 2012, the Company and its subsidiary recognised Baht 23 million
of such long-term employee benefit liabilities (separate financial statements: Baht 23
million) and Baht 34 million remains unrecognised (separate financial statements: Baht
34 million) as a result of gradual recognition of liability in the transition period over the
five-year period as mentioned above.
25
Provision for long-term employee benefits as at 31 December 2012 and 2011, was as
follows: (Unit: Baht)
Consolidated financial statements Separate financial statements
2012 2011 2012 2011
Defined benefit obligation at beginning of
year 72,361,106 64,766,043 71,793,225 64,476,702
Current service cost 14,636,032 10,345,063 14,326,523 10,066,523
Benefits paid during the year - (2,750,000) - (2,750,000)
Defined benefit obligation at end of year 86,997,138 72,361,106 86,119,748 71,793,225
Unrecognised transitional provisions (33,983,797) (45,311,729) (33,810,192) (45,080,256)
Provisions for long-term employee
benefits at end of year 53,013,341 27,049,377 52,309,556 26,712,969
Long-term employee benefit expenses included in the profit or loss for the years ended
31 December 2012 and 2011 was as follows:
(Unit: Baht)
Consolidated
financial statements
Separate
financial statements
2012 2011 2012 2011
Current service cost 14,636,032 10,345,063 14,326,523 10,066,523
Transitional liability recognised
during the year 11,327,932 11,327,932 11,270,064 11,270,064
Total 25,963,964 21,672,995 25,596,587 21,336,587
The Company and its subsidiary recognised these expenses in operating expenses.
The principal actuarial assumptions used to calculate the defined benefit obligations as
at actuarial date are summarised below.
(% per annum)
Discount rate 4
Average future salary increase 4
Average turnover rate 7
Amount of defined benefit obligation for the current and previous two periods are as
follows:
(Unit: Baht)
Defined benefit obligation
Consolidated
financial statements
Separate
financial statements
Year 2012 86,997,138 86,119,748
Year 2011 72,361,106 71,793,225
Year 2010 64,766,043 64,476,702
26
23. Liabilities under finance lease agreements
(Unit: Baht)
Consolidated
financial statements
Separate
financial statements
2012 2011 2012 2011
Liabilities under finance lease agreements 19,565,181 18,682,709 17,797,024 16,590,984
Less : Deferred interest expenses (1,996,004) (2,164,543) (1,724,910) (1,784,159)
Total 17,569,177 16,518,166 16,072,114 14,806,825
Less : Portion due within one year (5,437,686) (3,934,969) (5,208,444) (3,720,691)
Liabilities under finance lease agreements
- net of current portion 12,131,491 12,583,197 10,863,670 11,086,134
The Company and its subsidiary have entered into the finance lease agreements with
leasing companies for rental of motor vehicles for use in its operation, whereby it is
committed to pay rental on a monthly basis. The terms of the agreements are generally
5 years.
Future minimum lease payments required under the finance lease agreements were as
follows:
(Unit: Baht)
Consolidated financial statements
As at 31 December 2012
Less than 1
year
1-5 years
Over 5
years
Total
Future minimum lease payments 6,339,970 13,225,211 - 19,565,181
Deferred interest expenses (902,284) (1,093,720) - (1,996,004)
Present value of future minimum lease
payments 5,437,686 12,131,491 - 17,569,177
(Unit: Baht)
Consolidated financial statements
As at 31 December 2011
Less than 1
year
1-5 years
Over 5
years
Total
Future minimum lease payments 4,883,561 13,799,147 - 18,682,708
Deferred interest expenses (948,592) (1,215,950) - (2,164,542)
Present value of future minimum
lease payments 3,934,969 12,583,197 - 16,518,166
27
(Unit: Baht)
Separate financial statements
As at 31 December 2012
Less than 1
year
1-5 years
Over 5
years
Total
Future minimum lease payments 6,016,403 11,780,621 - 17,797,024
Deferred interest expenses (807,959) (916,951) - (1,724,910)
Present value of future minimum
lease payments 5,208,444 10,863,670 - 16,072,114
(Unit: Baht)
Separate financial statements
As at 31 December 2011
Less than 1
year
1-5 years
Over 5
years
Total
Future minimum lease payments 4,559,993 12,030,991 - 16,590,984
Deferred interest expenses (839,302) (944,857) - (1,784,159)
Present value of future minimum lease
payments 3,720,691 11,086,134 - 14,806,825
24. Capital management
The primary objectives of the Company’s capital management are to maintain the
Company’s ability to continue as a going concern and to maintain net capital in
accordance with the rules laid down by the Office of the Securities and Exchange
Commission.
25. Treasury shares
During the year ended 31 December 2012, the Company sold 1,645,200 treasury
shares with a cost value of Baht 11.26 million. The accounts relating to the
purchase/sale of treasury shares are presented below:
Consolidated and separate financial statements
For the year ended 31 December 2012
Number of
shares
Premium on
treasury
shares
Appropriated
retained
earnings -
treasury
shares reserve
Treasury
shares
(Shares) (Baht) (Baht) (Baht)
Balance at the beginning of year 1,645,200 5,347,943 11,260,973 (11,260,973)
Sold treasury shares (1,645,200) 13,870,727 (11,260,973) 11,260,973
Balance at end of year - 19,218,670 - -
28
The Baht 11.26 million decrease in appropriated retained earnings - treasury shares
reserve during the year represents the value of treasury shares sold during the year.
26. Statutory reserve
Pursuant to Section 116 of the Public Limited Companies Act B.E. 2535, the Company
is required to set aside a statutory reserve at least 5% of its net income, after
deducting accumulated deficit brought forward (if any), until the reserve reaches 10%
of its registered capital. The statutory reserve is not available for dividend distribution.
27. Dividends
During the years ended 31 December 2012 and 2011, the Annual General Meeting of
the Company’s shareholders approved the payment of dividend as follows:
Dividends Approved by Total dividends Dividend per share
(Million Baht) (Baht)
Dividends for earnings
from 1 January 2012 to
30 June 2012
Board of Directors’ meeting
on 8 August 2012
200 0.35
Dividends for the year 2011 Annual General Meeting of
the shareholders on
30 March 2012
467 0.82
Dividends for earnings
from 1 January 2011 to
30 June 2011
Board of Directors’ meeting
on 11 August 2011
199 0.35
Dividends for the year 2010 Annual General Meeting of
the shareholders on
30 March 2011
672 1.18
28. Brokerage fee
(Unit: Baht)
Consolidated and separate
financial statements
For the years ended 31 December
2012 2011
Brokerage fee from securities business 2,256,096,462 2,286,929,444
Brokerage fee from derivatives business 264,974,656 337,474,812
Total brokerage fee 2,521,071,118 2,624,404,256
29
29. Fees and service income
(Unit: Baht)
Consolidated
financial statements
Separate
financial statements
For the years ended
31 December
For the years ended
31 December
2012 2011 2012 2011
Underwriting fee 34,931,463 164,793 34,931,463 164,793
Financial advisory 22,718,734 21,580,006 22,718,734 21,580,006
Securities borrowing and lending 13,765,303 10,841,589 13,765,303 10,841,589
Fund management 2,579,290 444,425 - -
Others 6,402,229 12,362,194 7,252,549 12,362,194
Total fees and service income 80,397,019 45,393,007 78,668,049 44,948,582
30. Directors’ remuneration
Directors’ remuneration represents the benefits (exclusive of salaries, bonus, and
related benefits payable to executive directors) paid to directors of the Company and
its subsidiary in accordance with Section 90 of the Public Limited Companies Act.
Directors’ remuneration of the current year included adjustments made by reversing
remuneration of directors for the year 2011. As at 31 December 2011, the Company
estimated and recorded directors’ remuneration based on the amounts approved for
the year 2010 and subsequently adjusted it when the amounts approved by the Annual
General Meeting of shareholders were know.
31. Management’s remuneration
Benefits paid to management of the Company and its subsidiary, which presented as
part of “Personnel expenses”, were as follows:
(Unit: Baht)
Consolidated
financial statements
Separate
financial statements
For the years ended
31 December
For the years ended
31 December
2012 2011 2012 2011
Management’s remuneration
Short-term employee benefits 220,484,665 234,543,545 204,684,435 230,189,600
Post-employment benefits 4,549,868 4,293,986 4,279,552 4,044,295
225,034,533 238,837,531 208,963,987 234,233,895
30
32. Provident fund
The Company, its subsidiary and their employees have jointly established a provident
fund in accordance with the Provident Fund Act B.E. 2530. Employees contributed to
the fund monthly at the rate of 3 percent of basic salary and the Company and its
subsidiary contributed to the fund monthly at the rate of 2-8 percent. The funds of the
Company and its subsidiary are managed by Krung Thai Asset Management Public
Company Limited. The funds will be paid to employees upon termination in accordance
with the rules of the fund. During the years ended 31 December 2012 and 2011, Baht
26 million and Baht 25 million, respectively were contributed to the fund by the
Company and its subsidiary (separate financial statements: Baht 26 million and Baht
25 million, respectively).
33. Income tax
Income tax was calculated on profit before income tax for the current year, after adding
back expenses and deducting income which are disallowable for tax computation
purposes.
34. Earnings per share
Basic earnings per share is calculated by dividing the net earnings for the year by the
weighted average number of ordinary shares held by outside shareholders in issue
during the year, net from the treasury shares held by the Company.
Consolidated
financial statements
Separate
financial statements
For the years ended
31 December
For the years ended
31 December
2012 2011 2012 2011
Beginning balance of the year - weighted average
number of ordinary shares (shares) 569,169,300 569,169,300 569,169,300 569,169,300
Weighted average number of treasury shares sold
during the year (shares) 1,355,084 - 1,355,084 -
Ending balance of the year - weighted average
number of ordinary shares (shares) 570,504,384 569,169,300 570,504,384 569,169,300
Profit for the year (Baht) 738,403,810 654,181,183 720,660,344 672,180,431
Earnings per share (Baht/share) 1.29 1.15 1.26 1.18
31
35. Related party transactions
During the years ended 31 December 2012 and 2011, the Company and its subsidiary
had significant business transactions with the following related parties.
Company’s name and related person Relationship
Kim Eng Asset Management (Thailand) Co., Ltd. The Company’s subsidiary which is 99.99% held by the
Company
Maybank Kim Eng Holdings Limited Parent company
Mayban IB Holdings Sdn Bhd Shareholder of parent company
Maybank Kim Eng Securities Pte. Ltd. Fellow subsidiary
Kim Eng Securities (Hong Kong) Limited Fellow subsidiary
Maybank Kim Eng Investment Limited Fellow subsidiary
Such related parties transactions have been concluded on commercial terms and bases
agreed upon in the ordinary course of businesses between the Company, the subsidiary
and those related parties. Below is a summary of those transactions.
(Unit: Million Baht)
Consolidated financial
statements
Separate financial
statements
For the years ended
31 December
For the years ended
31 December Pricing policies
2012 2011 2012 2011
Transactions with subsidiary company
(Eliminated from the consolidated
financial statements)
Rental and service income In accordance with service agreements
Kim Eng Asset Management
(Thailand) Co., Ltd.
- - 2 2
Transactions with related parties
Brokerage fee income At normal rate charged to other clients,
in accordance with SET’s and SEC’s
notification
Maybank Kim Eng Securities
Pte. Ltd.
29 23 29 23
Kim Eng Securities (Hong Kong)
Limited
3 4 3 4
Fee and service income In accordance with service agreements
Mayban IB Holdings Sdn Bhd - 4 - 4
32
(Unit: Million Baht)
Consolidated financial
statements
Separate financial
statements
For the years ended
31 December
For the years ended
31 December Pricing policies
2012 2011 2012 2011
Transactions with related parties
(continued)
Information technology service
expenses
At the price agreed upon by both parties
referencing the market price.
Maybank Kim Eng Holdings Limited 3 3 3 3
Brokerage expenses In accordance with agreement
Maybank Kim Eng Securities Pte.
Ltd.
2 - 2 -
Interest expenses on borrowings In accordance with borrowings
agreement
Maybank Kim Eng Holdings Limited 4 - 4 -
Consulting service fee In accordance with service agreements
Maybank Kim Eng Securities Pte.
Ltd.
3 3 3 3
Dividend paid As declared
Maybank Kim Eng Holdings Limited 556 483 556 483
Maybank Kim Eng Investment
Limited
2 2 2 2
Mayban IB Holdings Sdn Bhd - 56 - 56
33
As at 31 December 2012 and 2011, the outstanding balances of the above
transactions, as presented in the statements of financial position are as follows:
(Unit: Million Baht)
Consolidated financial statements Separate financial statements Pricing Policies
2012 2011 2012 2011
Subsidiary company
(Eliminated from the consolidated
financial statements)
Other receivables No interest charged
Kim Eng Asset Management
(Thailand) Co., Ltd.
- - 0.4 0.2
Related company
Securities business receivables No interest charged
Maybank Kim Eng Securities Pte.
Ltd.
59 - 59 -
Kim Eng Securities (Hong Kong)
Limited
1 - 1 -
Foreign securities company
receivables
No interest charged
Maybank Kim Eng Securities Pte.
Ltd.
58 - 58 -
Foreign deposits receivables No interest charged
Maybank Kim Eng Securities Pte.
Ltd.
1,248 - 1,248 -
Prepaid consulting fee In accordance with service agreement
Maybank Kim Eng Securities Pte.
Ltd.
4 7 4 7
Borrowings
Maybank Kim Eng Holdings Limited 2,007 - 2,007 - Differential between the local cost of
borrowing and the SGD/THB swap
cost
Securities business payables No interest charged
Maybank Kim Eng Securities Pte.
Ltd.
134 106 134 106
Kim Eng Securities (Hong Kong)
Limited
4 - 4 -
Foreign securities company payables No interest charged
Maybank Kim Eng Securities Pte.
Ltd.
1 - 1 -
Dividend payable As declared
Maybank Kim Eng Holdings Limited 166 - 166 -
34
Loans from related parties
As at 31 December 2012, the balance of loans between the Company and the related
company and the movement are as follows:
(Unit: Million Baht)
Consolidated and separate financial statements
Balance as at Increase Decrease Balance as at
Loans from related parties Related by 31 December 2011 during the year during the year 31 December 2012
Maybank Kim Eng Holdings
Limited Parent company - 2,007 - 2,007
Total - 2,007 - 2,007
On 1 July 2003, the Company signed the information technology service agreement
with the parent company in Singapore for a period of 1.5 years and has been
committed to pay fee at the rate specified in the agreement. If no termination is made
by either party when due, the agreement is automatically renewed for another year.
The Company and its subsidiary entered into a rental agreement for office and services
since 31 December 2010. The contract expiration is on 30 June 2012.
As at 31 December 2012, Maybank Kim Eng Holdings Ltd. guaranteed the overdraft
facilities amounting to Baht 330 million (31 December 2011: Baht 330 million). There is
no overdraft outstanding balance as at 31 December 2012.
As at 31 December 2012, the Company had loans to employees under welfare
program amounting to Baht 289 million. The loans charged interest at rate of 2.50, 3.30
percent per annum.
36. Segment information
The Company’s operation mainly involves securities and derivatives brokering and
carried on in Thailand. Accordingly, no business/ geographical area segment
information is presented.
35
37. Commitments and contingent liabilities
37.1 Significant contingent liabilities as at 31 December 2012 and 2011 are as follows:
1) As at 31 December 2012 and 2011, the Company and its subsidiary have
significant outstanding commitments under office space, office equipment, and
other service agreements as follows:
(Unit: Million Baht)
Consolidated financial statements
As at 31 December
2012 2011
Payable:
In up to 1 year 83 74
In over 1 and up to 5 years 41 75
(Unit: Million Baht)
Separate financial statements
As at 31 December
2012 2011
Payable:
In up to 1 year 82 73
In over 1 and up to 5 years 39 74
2) As at 31 December 2012 and 2011, future minimum lease payments required
under the finance lease agreements were as follows:
(Unit: Million Baht)
Consolidated financial statements
As at 31 December 2012
Less than
1 year
1-5 years
Total
Future minimum lease payments 7 13 20
Deferred interest expenses (1) (1) (2)
Present value of future minimum lease payments 6 12 18
(Unit: Million Baht)
Consolidated financial statements
As at 31 December 2011
Less than
1 year
1-5 years
Total
Future minimum lease payments 5 14 19
Deferred interest expenses (1) (1) (2)
Present value of future minimum lease payments 4 13 17
36
(Unit: Million Baht)
Separate financial statements
As at 31 December 2012
Less than
1 year
1-5 years
Total
Future minimum lease payments 6 12 18
Deferred interest expenses (1) (1) (2)
Present value of future minimum lease payments 5 11 16
(Unit: Million Baht)
Separate financial statements
As at 31 December 2011
Less than
1 year
1-5 years
Total
Future minimum lease payments 5 12 17
Deferred interest expenses (1) (1) (2)
Present value of future minimum lease payments 4 11 15
37.2 As at 31 December 2012 and 2011, there were outstanding bank guarantees of
approximately Baht 3 million issued by a bank on behalf of the Company in respect of
certain performance bonds as required in normal course of business. The bank
guarantees were secured by the pledge of the Company’s bank deposits, as described
in Note 8 to the financial statements.
38. Financial instruments
Financial instruments are any contract which gives rise to both a financial asset of one
entity and a financial liability or equity instrument of another entity in the meantime.
38.1 Financial risk management
Financial instruments of the Company and its subsidiary principally comprise cash and
cash equivalents, deposits at financial institutions, derivative assets, investments,
receivables from and payables to Clearing House, borrowings from financial
institutions, securities and derivatives business receivables and payables, derivative
liabilities and debt issued and borrowings. The financial risks associated with these
financial instruments and how they are managed is described below.
37
38.2 Credit risk
The Company is exposed to credit risk primarily with respect to securities and futures
business receivables. The Company manages the risk by establishing trading credit
approval limit for client, performing credit review and increasing credit limit at both of
committee and individual level subject to credit level. In addition, the Company
assigns Credit Committee to control and monitor the credit risk. Therefore, the
Company does not expect to incur material financial losses. In addition, the Company
does not have high concentration of credit risk since it has a large customer base. The
maximum exposure to credit risk is limited to the book value of securities and
derivatives business receivables, derivative assets and receivables from foreign
securities company as stated in the statement of financial position.
38.3 Market risk
Market risk is the risk that changes in interest rates, foreign exchange rates and
securities prices may have an effect on the Company’s position and investment status.
As such, market risk consists of interest rate risk, foreign exchange risk and
equity/commodities position risk.
a) Interest rate risk
Interest rate risk is the risk that the value of financial assets and liabilities will
fluctuate due to changes in market interest rates. However, since most of the
Company’s financial assets and liabilities will mature in 1 year or has floating
interest rate, the Company’s interest rate risk is expected to be low.
As at 31 December 2012 and 2011, significant financial assets and liabilities
classified by type of interest rates are summarised in the table below. (Unit: Million Baht)
Consolidated financial statements
Outstanding balance of financial instruments as at 31 December 2012
Fixed interest rates
Interest rate
(% p.a.)
Remaining period to the
contractual repricing date or
maturity date
Floating
interest rate
Within
1 year 1 - 5 years
Over 5
years
Without
interest
Non-
performing
debts Total
Floating
interest rate
Fixed
interest rate
Financial assets
Cash and cash equivalents 76 24 - - 201 - 301 0.25 - 2.50 3.05
Deposits at financial institutions - 3 - - - - 3 - 1.70 - 2.10
Receivable from Clearing House - - - - 1,245 - 1,245 - -
Securities and derivatives business
receivables 8,776 82 - - 2,779 247 11,884 5.42 - 5.50 5.50, 8.50
Loans to employees under welfare program 289 - - - - - 289 2.50, 3.30 -
Financial liabilities
Borrowings from financial institutions 2,170 - - - - - 2,170 2.86 - 3.00 -
Payable to Clearing House - - - - 452 - 452 - -
Securities and derivatives business payables 293 82 - - 3,581 - 3,956 1.90 3.00 , 5.50
Derivative liabilities - - - - 24 - 24 - -
Debt issued and borrowings - 2,007 - - - - 2,007 - 0.90
Liabilities under financial lease agreements - 6 12 - - - 18 5.20 - 11.25 -
38
(Unit: Million Baht)
Consolidated financial statements
Outstanding balance of financial instruments as at 31 December 2011
Fixed interest rates
Interest rate
(% p.a.)
Remaining period to the contractual
repricing date or maturity date
Floating
interest
rate
Within 1
year 1 - 5 years Over 5 years
Without
interest
Non-
performing
debts Total
Floating
interest rate
Fixed
interest rate
Financial assets
Cash and cash equivalents 257 34 - - 146 - 437 0.25 - 3.00 3.20
Deposits at financial institutions - 3 - - - - 3 - 1.75 - 2.12
Receivable from Clearing House - - - - 178 - 178 - -
Securities and derivatives business
receivables 4,405 257 - - 1,186 247 6,095 5.54 - 5.60 5.50, 8.50
Loans to employees under welfare
program 323 - - - - - 323 3.00, 3.65 -
Financial liabilities
Borrowings from financial
institutions 594 - - - - - 594 3.30 - 3.40 -
Securities and derivatives business
payables - 257 - - 1,098 - 1,355 - 3.00, 5.50
Derivative liabilities - - - - 6 - 6 - -
Liabilities under financial lease
agreements - 4 13 - - - 17 - 5.95 - 11.25
(Unit: Million Baht)
Separate financial statements
Outstanding balance of financial instruments as at 31 December 2012
Fixed interest rates
Interest rate
(% p.a.)
Remaining period to the contractual
repricing date or maturity date
Floating
interest
rate
Within 1
year 1 - 5 years Over 5 years
Without
interest
Non-
performing
debts Total
Floating
interest rate
Fixed
interest rate
Financial assets
Cash and cash equivalents 71 - - - 201 - 272 0.25 - 2.50 -
Deposits at financial institutions - 3 - - - - 3 - 1.70 - 2.10
Receivable from Clearing House - - - - 1,245 - 1,245 - -
Securities and derivatives business
receivables 8,776 82 - - 2,779 247 11,884 5.42 - 5.50 5.50, 8.50
Loans to employees under welfare
program 289 - - - - - 289 2.50, 3.30 -
Financial liabilities
Borrowings from financial
institutions 2,170 - - - - - 2,170 2.86 - 3.00 -
Payable to Clearing House - - - - 452 - 452 - -
Securities and derivatives business
payables 293 82 - - 3,581 - 3,956 1.90 3.00, 5.50
Derivative liabilities - - - - 24 - 24 - -
Debt issued and borrowings - 2,007 - - - - 2,007 - 0.90
Liabilities under financial lease
agreements - 5 11 - - - 16 5.95 - 11.25 -
39
(Unit: Million Baht)
Separate financial statements
Outstanding balance of financial instruments as at 31 December 2011
Fixed interest rates
Interest rate
(% p.a.)
Remaining period to the contractual
repricing date or maturity date
Floating
interest
rate
Within 1
year 1 - 5 years Over 5 years
Without
interest
Non-
performing
debts Total
Floating
interest rate
Fixed
interest rate
Financial assets
Cash and cash equivalents 228 - - - 145 - 373 0.25 - 2.40 -
Deposits at financial institutions - 3 - - - - 3 - 1.75 - 2.12
Receivable from Clearing House - - - - 178 - 178 - -
Securities and derivatives business
receivables 4,405 257 - - 1,186 247 6,095 5.54 - 5.60 5.50, 8.50
Loans to employees under welfare
program 323 - - - - - 323 3.00, 3.65 -
Financial liabilities
Borrowings from financial
institutions 594 - - - - - 594 3.30 - 3.40 -
Securities and derivatives business
payables - 257 - - 1,098 - 1,355 - 3.00, 5.50
Derivative liabilities - - - - 6 - 6 - -
Liabilities under financial lease
agreements - 4 11 - - - 15 - 5.95 - 11.25
b) Foreign exchange risk
Foreign exchange risk is the risk that changes in foreign exchange rates may
result in changes in the value of financial instruments, and fluctuations in revenues
or the values of financial assets and liabilities.
The balance of financial assets and liabilities denominated in foreign currencies
are summarised below.
Foreign currency
Financial assets
as at 31 December
Financial liabilities
as at 31 December
Exchange rate
as at 31 December 2012
2012 2011 2012 2011 Buying Selling
(Million) (Million) (Million) (Million) (Baht per 1 foreign currency unit)
Hong Kong dollar 270 - 270 - 3.9207 3.9813
Singapore dollar 8 - 87 - 24.7844 25.2835
US dollar 1 - 1 - 30.4857 30.7775
Forward exchange contracts outstanding at 31 December 2012 are summarised
below.
Foreign currency Bought amount
Contractual exchange rate
Bought
Contractual maturity
date
(Baht per 1 foreign currency unit)
Singapore dollar 79,396,584 25.1530 11 January 2013
40
38.4 Liquidity risk
Liquidity risk is the risk that the Company and its subsidiary will be unable to liquidate
financial assets and/or procure sufficient funds to discharge obligations in a timely
manner, resulting in a financial loss.
The maturity dates of financial instruments held as of 31 December 2012 and 2011,
counting from the financial position date, are as follows.
(Unit: Million Baht)
Consolidated financial statements
As at 31 December 2012
At call
Within 1
year 1 - 5 years
Over 5
years
No
maturity
Non-
performing
debts Total
Financial assets
Cash and cash equivalents 277 24 - - - - 301
Deposits at financial institutions - 3 - - - - 3
Receivable from Clearing House - 1,245 - - - - 1,245
Securities and derivatives business
receivables 82 2,779 - - 8,776 247 11,884
Loans to employees under welfare program - 43 122 124 - - 289
Financial liabilities
Borrowings from financial institutions 1,995 175 - - - - 2,170
Payable to Clearing House - 452 - - - - 452
Securities and Derivatives business payables 375 3,581 - - - - 3,956
Derivative liabilities - 24 - - - - 24
Debt issued and borrowings - 2,007 - - - - 2,007
Liabilities under financial lease agreements - 6 12 - - - 18
(Unit: Million Baht)
Consolidated financial statements
As at 31 December 2011
At call
Within 1
year 1 - 5 years
Over 5
years
No
maturity
Non-
performing
debts Total
Financial assets
Cash and cash equivalents 403 34 - - - - 437
Deposits at financial institutions - 3 - - - - 3
Receivable from Clearing House - 178 - - - - 178
Securities and derivatives business
receivables 317 1,126 - - 4,405 247 6,095
Loans to employees under welfare program - 31 116 176 - - 323
Financial liabilities
Borrowings from financial institutions 594 - - - - - 594
Securities and derivatives business payables - 1,355 - - - - 1,355
Derivative liabilities - 6 - - - - 6
Liabilities under financial lease agreements - 4 13 - - - 17
41
(Unit: Million Baht)
Separate financial statements
As at 31 December 2012
At call
Within 1
year 1 - 5 years
Over 5
years
No
maturity
Non-
performing
debts Total
Financial assets
Cash and cash equivalents 272 - - - - - 272
Deposits at financial institutions - 3 - - - - 3
Receivable from Clearing House - 1,245 - - - - 1,245
Securities and derivatives business
receivables 82 2,779 - - 8,776 247 11,884
Loans to employees under welfare program - 43 122 124 - - 289
Financial liabilities
Borrowings from financial institutions 1,995 175 - - - - 2,170
Payable to Clearing House - 452 - - - - 452
Securities and derivatives business payables 375 3,581 - - - - 3,956
Derivative liabilities - 24 - - - - 24
Debt issued and borrowings - 2,007 - - - - 2,007
Liabilities under financial lease agreements - 5 11 - - - 16
(Unit: Million Baht)
Separate financial statements
As at 31 December 2011
At call
Within 1
year 1 - 5 years
Over 5
years
No
maturity
Non-
performing
debts Total
Financial assets
Cash and cash equivalents 373 - - - - - 373
Deposits at financial institutions - 3 - - - - 3
Receivable from Clearing House - 178 - - - - 178
Securities and derivatives business
receivables 317 1,126 - - 4,405 247 6,095
Loans to employees under welfare program - 31 116 176 - - 323
Financial liabilities
Borrowings from financial institutions 594 - - - - - 594
Securities and derivatives business payables - 1,355 - - - - 1,355
Derivative liabilities - 6 - - - - 6
Liabilities under financial lease agreements - 4 11 - - - 15
42
38.5 Fair value of financial instruments
Fair value represents the amount for which an asset could be exchanged or a liability
settled between knowledgeable, willing parties in an arm’s length transaction. The
Company and its subsidiary have estimated the fair value of financial instruments as
follows:
a) Financial assets
The method used for determining the fair value is dependent upon the
characteristics of the financial instruments. The fair values of financial assets
including cash and cash equivalents, receivables from Clearing House and
securities and derivatives business receivable are considered to approximate
their respective carrying values since the financial instruments are predominantly
subject to market interest rates or will be due in a short period. The fair values of
financial instruments that have standard terms and conditions and are traded on
an active and liquid market, such as investments, are determined based on the
quoted market price.
b) Financial liabilities
Borrowings from financial institutions, payables to Clearing House and securities
and derivatives business payables are presented at their book value since they
mature in the short-term.
As of 31 December 2012, there are no material differences between the book value of
financial instruments and their fair value.
39. Event after the reporting period
On 21 January 2013, the Company’s Board of Directors approved the disposal of
shares of Kim Eng Asset Management (Thailand) Company Limited (“the subsidiary”)
to a subsidiary of the parent company of the Group. The Company is in the process of
requesting approval of the transaction from the Securities and Exchange Commission.
40. Approval of financial statements
These financial statements were authorised for issue by the Company’s Board of
Directors on 7 February 2013.