GUNKUL : Annual Report 2012

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Concents

Gunkul Engineering Public Company Limited

1. MessagefromtheChairman 2

2. BoardofDirector 4

3. ExecutiveBoard 6

4. ManagementsTeam 8

5. FinancialHighlights 10

6. CorporateSocialResponsibility 14

7. ReportoftheAuditCommittee 25

8. CapitalStructure 27

9. ManagementStructure 29

10. DetailsoftheBoardofDirectorsandExecutives 61

11. GeneralInformation 77

12. NatureofBusiness 79

13. IndustryOverviewandCompetition 90

14. RiskFactors 100

15. CorporateGovernanceReport 106

16. InternalControl 107

17. RelatedTransactions 109

18. SummaryofFinancialStatements 134

19. ManagementDiscussionandAnalysis 144

20. BoardofDirectors’ResponsibilityforFinancialReporting 158

21. IndependentAuditor’sReport 159

22. ReferencedPurson 161

Smart Energy in Action �

�. Message from the Chairman

To : Shareholders of Gunkul Engineering Public Company Limited

As for Thai economy in the previous year, Thai government endeavored tostimulateeconomythroughadoptingseriesofmeasurestoincreasenationalincome,encourage spending, and reduce corporate tax that is aimed at boostingdomesticinvestments.Inthemeantime,thegovernmentiswellawareofthecontinuousriseinenergy demand to support the economic growth target, as seen from thegovernment’s actions to promote and maintain the policies that motivate privatesector to invest in renewable energy power plants such as wind and biomass,togetherwiththeinvestmentinsolarenergypowerplants.

Anotherthrough-provokingtopictowhichvariousgovernmentandprivateentitiespaid special attention is organizational preparation for the launch of the ASEANEconomicCommunity (AEC).GunkulEngineeringPublicCompanyLimited isoneofthe companies that recognizes the favorable business opportunity from thisforthcomingchanges.Atpresent,weareintheprocessofseekingforopportunitiestoexpandourbusinesspresenceandinvestmentsinASEANcountries,thankstoourextensive knowledge and experience at the regional level for more than 10 years.Ourinvestmentdecisionwillbemadebyprudentlyselectinginvestmentoptionsandexercisinggoodfinancialdiscipline,coupledwithourgreatfocusonhumanresourcedevelopmentinorderforustostaycompetitiveandachievesustainablegrowth.

Furthermore,inordertosupportthechangingcircumstances,wehavedevelopedour corporate vision to be concise, modern as well as reflect great care forenvironment.Thelanguage“SmartEnergy”meansthesmartgenerationofpowerthatalso helps preserve the environment. Thus, the phrase“Smart Energy in Action!”that is our new corporate sloganmeans our intention and commitment to take allnecessarystepsrequiredtoassumetheleadershippositionintherenewableenergyspace.In2013,wewillcontinueourparticipationingeneratingpowerfromrenewableenergyresources,coupledwiththeparticipationindevelopingelectricalsystemsbothinThailandandnearbycountries.

Regarding our 2012 operating performance, we have grown according to ourtarget,havingtotalrevenueof4,836.72millionbaht,increasingby660.25millionbahtor by 15.81%, when compared with that of the year 2011. 2012 net profit wasrecordedat643.18millionbahtorEarningsperShare(EPS)of1.46bahtpershare,increasingfrom0.86bahtpersharein2011.

As theChairmanofGunkulEngineeringPublicCompanyLimited, Iwould like torepresent the Company in extending thanks to shareholders, investors, financialinstitutions,businesspartnerscustomers,andallstakeholdersforconstantconfidence,trustandsupport.Appreciationalsogoesto the management and all employees who work devotedly,honestly and prudently toward the Company’s success asdesired. We are committed to undertake business with goodcorporate governance for the interest of all stakeholders,societyandtheenvironmenttoattainthecorporatevisionof “becoming Thailand’s number one manufacturer andprovider of equipment for electrical systems andrenewable energy systems that meet and satisfycustomers’needandconcurrentlymaximizestakeholders’return.”

BestRegards,

(Mr.GunkulDhumrongpiyawut)

Chairman

25February2013

ChairmanoftheBoardofDirectors.

�Gunkul Engineering Public Company Limited

�. Board of Directors

� Smart Energy in Action

Mr. Gunkul Dhumrongpiyawut ChairmanoftheBoard

Mr. Sathaporn Kotheeranurak IndependentDirector ChairmanoftheAuditandCorporateGovernanceCommittee MemberoftheRiskManagementCommittee

Pol. Maj. Gen. Visit Sukarasep IndependentDirector ChairmanoftheNominationandRemuneration Committee MemberoftheAuditandCorporateGovernance Committee

Mr. Sombat Santijaree IndependentDirector MemberoftheAudit andCorporateGovernance Committee

Mrs. Areewan Roonpraphan DirectorExecutiveDirector

Mr. Somboon Aueatchasai Director ExecutiveOffiecr ManagingDirector

�

Mr. Chaloempon Sricharoen DirectorExecutiveDirector

Miss Naruechon Dhumrongpiyawut Director ExecutiveDirector

Miss Sopacha Dhumrongpiyawut Director ChiefExecutiveOffiecr ChairmanoftheRiskManagementCommittee


3. Executive Committee

Miss Sopacha Dhamrongpiyawut ChiefExecutiveOfficer

Mr. Somboon AueatchasaiManagingDirector

Miss Naruechon Dhumrongpiyawut ExecutiveDirector


Mr. Chaloempon Sricharoen ExecutiveDirector

Mrs. Areewan Roonpraphan ExecutiveDirector


�. Managements Team


Miss Sopacha DhumrongpiyawutChiefExecutiveOfficer

Mr. Somboon AueatchasaiManagingDirector

Mrs. Areewan Roonpraphan SeniorVicePresident,Factory

Mrs. Somluk Kanuenghet SeniorVicePresident, TheOfficeof ManagingDirector

Mr. Papangkorn Sakulvorakan SeniorVicePresident, BusinessSupport


Miss Suttirat Tangnorakul

AccountingManager

Miss Naruechon Dhumrongpiyawut VicePresident,

Strategic&Investment

Mr. Phudis Triwilaskul VicePresident,Logistics

Mr. Phongsakorn Damnoen SeniorVicePresident,BusinessDevelopment&SpecialProject

Mr. Thamrong Chankraithong SeniorVicePresident,Sales&Marketing

Mr. Worathep Luangsirapornchai SeniorVicePresident,InternalAudit

�0 Smart Energy in Action

�. Financial Highlights

Smart Energy in Action

Unit:Baht

31 Dec 31 Dec 31 Dec 31 Dec 31 Dec

2012* 2011* 2010* 2009* 2008*

TotalAssets 6,958,270,551.41 5,539,779,609.30 1,789,712,321.23 856,998,776.50 1,051,362,621.35

TotalLiabilities 4,813,704,395.68 4,356,175,992.80 657,506,962.85 351,789,417.26 428,169,328.33

ShareholdersEquity 2,144,566,155.73 1,183,603,616.50 1,132,205,358.38 505,209,359.24 623,193,293.02

PaidupShareCapital 439,999,984.00 400,000,000.00 400,000,000.00 300,000,000.00 240,000,000.00

Revenue 4,763,886,359.16 2,668,698,269.54 1,298,071,881.11 873,001,715.66 1,383,000,470.82

NetProfit/Loss 779,555,495.28 89,524,765.12 123,175,999.14 53,660,741.73 123,011,252.10

NetProfit/Assets(%) 11.06 1.62 6.88 6.26 11.70

NetProfit/Shareholders 35.89 7.56 10.88 10.62 19.74

Equity(%)

NetProfitMargin(%) 16.15 3.35 9.49 6.15 8.89

Remarks *ConsolidatedFinancialStatements

��

Private and Construction segments have been taking turns as a major contributor to GUNKUL’s revenue

Government Private Foreign Electricity Construction

THBmn

Revence Breakdown by Type of Customer

% Revenue Breakdown by Type of Customer

3,000

2,000

1,000

02008 2009 2010 2011 2012

1,366

362

169(3.93%)

1,765(40.99%)

445(10.33%)

1,323(30.72%)

604(14.03%)

4,000

disposal of investment

285

719

864

164249451

1,288

600240448

2,651

449

1,368

73

487274

4,722

169

1,765

604

445

416

1,323



Proportion Revenue Breakdown by type of customer

in Year �0�� and Year �0��

THB mn

Smart Energy in Action

1,323

Margin%

3,000

2008

2,500

2,000

1,500

1,000

500

02009 2010 2011 2012

0

5

10

15

20

25

30

24.125.5

28.14

22.98 21.44

1,000

200

0

400

600

800

1,200

1,400

1,600

1,800

2,000

1,368

487445

274

604

73169

449

1,765


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Rev.from Trading & Construction Rev.from Manu Gross Margin (%)-RHS

3,500

4,000

4,500

THB mn

535831

458406 302

987

205

2,446

706

4,016

Revenue vs. Overall Gross Margin

Customers

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Net Profit Margin (%) Net Profit

Margin %

600

500

400

300

200

100

0 0

2

6

10

14

18

800

900

THB mn

700

4

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12

16

2009 2010 2011 2012 2012

Net Profit vs. Net Profit Margin

769.6

447.61

8912354

3.35

9.55

6.2

10.29

16.15

Included Gain from sale GPS

Unit : THB mn

Balance Sheet

Total Asset �,��.��

Total Asset �,�3�.��

Current Asset

Non Current Asset

Current Liabilities

Non Current Liabilities

Shareholders’ Equity

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As of Dec 3�, �0�� As of Dec 3�, �0��


Excluded Gain From sale GPS

�3

Gunkul Engineering Public Company Limited has realized the importance ofsocial responsibility for many years. The Company has employed corporategovernance and social responsibility with concerns on all related parties includingshareholders,tradingpartners,customers,employeesandsocietywithaimtocreatesustainablegrowthprospects.

Besides good corporate governance, the Company also helps and supportssociety and employees by donating educational supplies on the Children Day foryouth to improve learning skills, awarding scholarship to youth and employees’descendants, giving financial supports along with sports equipment and computerequipment to communities and government agencies, taking part in culturalconservationactivities,aswellasengaginginenvironmentalandsocialactivitiesetc.

In2012,theCompanyhonoredH.M.theKing’s84thAnniversaryandcelebratedthecommemorative yearofBuddhismbydonatingmoneyandsolar cell panels to“Alternative Energy: Robe Offering on Buddhajayanti 2600 Years” project of theDepartment of Alternative Energy Development and Efficiency. The Company alsoadoptedtheKing’sphilosophyregardingglobalwarmingbyencouragingtheuseofnatural alternative energy and undertaking social and environmental activities.Significantactivitiesin2012couldbesummarizedasfollows:-

�. Corporate Social Responsibility

Smart Energy in Action ��

Responsibility to society, neighboring communities and environment

GUNKULisdeterminedtoundertakebusinesswithsocialresponsibilityinorderto“betheleadingproducerofelectricalpowerfromrenewableenergyresources,aswellasmanufacturerandproviderofequipmentforelectricalsystemsthatmeetandsatisfy customer’s need and concurrently maximize stakeholders’ return.” GUNKULalso believes that, apart from good management and personnel development,business success is achieved through a proper balance of corporate socialresponsibility on all 3 dimensions, namely economic, social and environment.Goodcorporate governance and corporate social responsibility transparency will lead tosustainablebusinessandthewell-beingofThaisociety.

In2012,GUNKULcarriedoutactivitiesasfollows:-

Gunkul Engineering Public Company Limited ��


�. Projects for community and society

The Company’s pol icy oncommunity and environmentencourages community engagementand attaches importance to education,spor ts and the “col laborat ive”co-existence with community. It alsopromotesdevelopmentandstrengthofcommunity for the sustainable andgood quality of life, conservation andrestoration of local culture, as well asconservat ion and restorat ion ofenvironment for the equilibrium ofnatureandlife.

Since2006,theCompanyhasawardedscholarshipstoemployees’childrenandalsoneedystudentswithgoodperformanceandgood conduct every May, in order topromoteeducationandbetter lifequality ofyouthinneighboringcommunities.Thisyear,the Company awarded 50 scholarships tostudents (kindergarten to primary educationlevels)ofWatSawaswareeSrimaramschool,20 scholarships to students (secondaryeducation levels) of Wat Noi Noppakunschool.

TheCompanyalso sponsors sportsevent for Wat Sawaswaree SrimaramcommunityandNoenPoMunicipalOffice.

The Company gave computerequipment to Wat Phraya Krai PoliceStation to support its database work,donated money to Wat SawaswareeSrimaram elderly community, and offeredmoney to support goodwill activity ofPornwarinNutrawong,thenursetutorwith“volunteerspirit”ofWachiraHospital.


Scholarships for students in community schools and employees’ children

Donation and sports/computer equipment to neighboring communities and government agencies

Buddhism support and cultural conservation activities

TheCompanytakespartinconservingandrestoringlocalcultureandtraditionsonvariousoccasions,suchasSongkran festivalandtheElderlyDay,and joinsTakBatDevo,thefoodofferingceremony,ontheendoftheBuddhistLent.

Since2012wastheauspiciousyearbothasthe“Buddhajayanti:2600YearsofLordBuddha’sEnlightenment”andasthe“84thAnniversaryofH.M.KingBhumibol,”the Companymarked the occasion by giving donation and 36 140-watt solar cellpanels to the Department of Alternative Energy Development and Efficiency insupport of its “Alternative Energy: Robe Offering on Buddhajayanti 2600 Years”project.


The Company’s surroundingcommunities consist of Wat SawaswareeSr imaram school , Wat SawaswareeSrimaramcommunity,WatKaecommunity,NakornChaiseecommunity,Samsenpolicestation, and 11th army area (Rab 11).GUNKUL thus awards gifts to thesecommunities onChildrenDaywith aim toforwardhappinessandsmilestotheyouth.


Gift awards on Children Day for surrounding communities

Smart Energy in Action �0

Activities to raise social responsibility awareness

In 2012, GUNKUL kept pursuing the policy toward employees’ voluntaryparticipation in social activities. “Volunteer Spirit” activities were organized foremployees,e.g.bigcleaningdayatWatSawaswareeSrimaramonedaybefore theendofBuddhistLentasameritoriousactiontowardpeoplewhoattendedthefoodofferingceremony.Thisactivityhasbeencarriedouteveryyearsince2007.


In addition, theCompany has alsoarrangedactivitiestoraisevolunteerspiritand tighten relationship amongGUNKULemployees, forexamplemeritmakingonbirthdays at the Priest Hospital, givingluncheon and donation to Thai landAssociationof theBlind, donating thingsand money to HIV-positive patients atPhrabatnamputemple.


�. Projects for environment and income generation for communities surrounding the power plant

GUNKULpaysgreatattentiontoenvironmentalmanagementprocessfromthebeginning to the end, since pre-construction, between-construction and duringgeneration of power from renewable sources. All processes are done under legalframework,governmentpolicyandinternationalstandardwithaimtoprevent,controland solve anyproblems thatmayoccur from thepowergeneration. TheCompanyalsohascampaigntorehabilitateandpreservenaturalresourcesandenvironmentbygivingknowledgetosurroundingcommunitiesviafollowingactivities:-

Environment study project

TheCompanyhasconductedenvironmentalimpactanalysis(EIA)withfocusonevaluationonhealth,societyandsurroundingcommunities.In2012,theCompanygotpermission for 5 projects, namely power generation from renewable energy atWichienburi branch, Petchaboon province, at Buengsampun branches 1&2,Petchaboonprovince,atNoenPobranch,Pichitprovince,andatSriChulabranch,NakhonNayokprovince.

Gunkul Engineering Public Company Limited �3

Stakeholder participation and income generation for communities

GUNKULhasalways recognized thesignificanceofstakeholders’participationand comments. Before constructing power plant, the Company does the publichearing toget feedback fromsurroundingcommunities for itsenvironmental impactanalysis,inordertodeveloppublicunderstandingoftheproject,possibleimpactsaswellastoitsbenefitstocommunitiessuchasjobandwealthcreationforthelocals.By this, people in surrounding communities can participate in every steps of theproject,soastoachieveclearunderstandingandmutualbenefitofthepowerplantconstruction.

Environmental and social management of constructing renewable energy power plant

GUNKUL iswellawareof the importanceandseriousnessofglobalwarming,greenhouse gas and CO2 emission. It has therefore set the anti-global warmingcampaign as one of its missions to accomplish, by generating clean energy fromrenewable resources like solar cell and wind. With unvarying social responsibilitythroughout its 30 years of operations, the Company has made its power plantprojectsenvironmentally-friendlyandreadyfortheever-changingclimate.

Corporate Slogan

SmartEnergyinAction!

Honorable rewards

Mr.GunkulDhumrongpiyawut,ChairmanofGunkulEngineeringGroup,receivedtheGoldenBellCertificateSomdejPhraMahaRachaMangkalajarnandtheGoldenBellTrophyfromPrivyCouncillorGeneralPichitKullavanija.Theawardrepresentationceremonywasorganizedby theBroadcasterandJournalist’sAssemblyofThailandon25thJuly2012atthePublicRelationsDepartment.


25Gunkul Engineering Public Company Limited

�. Report of the Audit Committee

DearShareholdersofGunkulEngineeringPublicCompanyLimited,

The Audit and Corporate Governance Committee of Gunkul Engineering PublicCompany Limited consists of three independent directors which are Mr. SathapornKotheeranurak as Chairman of the Audit and Corporate Governance Committee, Pol. Maj.Gen. Visit Sukarasep and Mr. Sombat Santijaree as Audit and Corporate GovernanceCommittee.Duringtheyear2012,theBoardofDirectors’Meetingatno.7/2012onNovember9th, 2012 has appointed Mr. Sathaporn Kotheeranurak as Chairman of the Audit andCorporate Governance Committee and has appointedMr. Sombat Santijaree to become amember of the Audit and Corporate Governance Committee instead of Dr.EkapornRakkwamsuk,whoalreadyresigned,witheffectivedateofNovember9th,2012.

TheAuditCommitteeactsasassignedfromtheBoardofDirectorsinaccordancewithduties and responsibilities as defined in “Audit Committee Charter” which complies withguidelines andbest practices forAuditCommitteeof theStockExchangeof Thailand,Re:QualificationsandScopeofWorkoftheAuditCommittee,2008.

In2012, theAuditandCorporateGovernanceCommitteearranged fivemeetingsandarranged a meeting between the Audit and Corporate Governance committee and theAuditorswithoutmanagementinattendance.ThemeetingswereattendedbyalldirectorsofAuditCommittee,themanagementaswellasthecompany’sInternalAuditorDepartmentandExternalAuditor inorder to share information, commentsandgivesuggestionswhichwerebenefittoadministrationproposes.TheresultsofeachmeetingwerepresentedtotheBoardof Directors of the Company and the company’s subsidiaries. During past year, the AuditCommitteehadcarriedoutimportantactivities,whichcouldbesummarizedasfollows.

1. Inreviewingthefinancialstatements,theAuditCommitteehasaskedfortheaccuracyand completeness of the quarterly and annual separated financial statements andconsolidated financial statements. With the explanation from the management andauditor, the quarterly and annual separated financial statements and consolidatedfinancial statements are prepared in accordance with the legal requirements andgenerallyacceptedaccountingprinciplesbeforepresentingtotheBoardofDirectors.

2. In reviewing the internalcontrolsystem, theAuditCommittee incooperationwith theauditorsandtheinternalauditorshasaskedfortheinternalcontrolsystem.TheAuditCommittee is of the opinion that the company has adequate and suitable internalcontrolsintheacceptablecriteria.

26 Smart Energy in Action

3. Inreviewingtheinternalauditingplans,theAuditCommitteehasaskedandconsideredtheinternalauditingplanstoensurethattheinternalauditingplanshasbeenadjustedandbeenconsistentwithcurrentsituationformoreeffectivework.

4. In reviewing the riskmanagement, theAuditCommittee has asked riskmanagementplan in order to ensure that the risk has beenmanaged properly in the acceptablecriteria. The company has focused and developed Risk Management System byappointingRiskManagementCommittee inorder toset riskmanagement regulationsand policies. Because of that, the company has effectively managed the risk inaccordancewiththecompany’starget.Astheresultofreviewing,TheAuditCommitteeisoftheopinionthatthecompanyhasadequateandsuitabletheriskmanagement.

5. In reviewing the relatedparty transactions, theAuditCommittee has considered andaskedforthetransactionsthatmayhaveconflictsofrelatedpartytransactions.Astheresult of reviewing, the majority of the transactions between the company andsubsidiaries were normal commercial transaction in accordancewith good corporategovernance.

6. TheSecuritiesandExchangeCommissionLawandRegulations, theAuditCommitteehas preformed the full scope of authority set forth in the Charter of the AuditCommittee in compliance with the Securities and Exchange Commission Law andRegulations.

7. Inconsiderationofdetermining,selecting,nominatingandrecommendingremunerationof annual external auditor for year 2013, the Audit and Corporate GovernanceCommitteehadnominatedSPAuditCo.,Ltd.asExternalAuditorofthecompanyandthe company’s subsidiaries. The total remuneration of annual external auditor of thecompanyandthecompany’ssubsidiariesisTHB2,375,000.PartofTHB2,375,000wastheremunerationofannualexternalauditorof thecompanywhichwasTHB892,000.TheAuditandCorporateGovernanceCommitteealreadypresentedthisproposaltotheBoardofDirectorstoproposetotheshareholdersintheAnnualGeneralMeeting.

In conclusion, theAuditCommittee hasopinion that the consolidated and separatedfinancial statements of the company and its subsidiaries have presented fairly, sufficiently,completely inaccordancewithgeneral financial reportingstandard.The internalcontrolhasenough efficiency and effectiveness to control any frauds by separating authorization. ThecompanyanditssubsidiarieshaveoperatedbusinessesinaccordancewiththeSecuritiesandExchangeAct,StockExchangeofThailandActoranyrelatedlaws.

(Mr.SathapornKotheeranurak) ChairmanoftheAuditCommittee February25,2013


�. Capital Structure �.� Capital

AsofDecember31,2012,theCompanyhadregisteredcapitalof440,000,000bahtandhadpaid-upcapitalof439,999,984bahtdividedinto439,999,984sharesatparvalueof1.00baht.

�.� Shareholders

ToptenmajorshareholdersoftheCompanyasofJanuary24,2013,thelatestclosingdateofshareregistrationbookisasthefollowing.

No. Shareholder Name Number of Share Percentage

1. DhumrongpiyawutFamilyGroup

-GunkulGroupCompanyLimited 263,847,100 59.97%

-Mr.Gunkul Dhumrongpiyawut 130,240 0.03%

-MissNaruechonDhumrongpiyawut 22,000 0.01%

TotalNumberofShareHoldingby

DhumrongpiyawutFamilyGroup 263,999,340 60.00%

2. Mr.Chatree Taweepreechachart 11,455,110 2.60%

3. Mr.Supart Sujivarodom 11,020,110 2.50%

4. Mr.Khanaphat Jirakasemphong 11,000,110 2.50%

5. Mr.Yudhana Sitthimahachaikul 11,000,110 2.50%

6. MissNanpapatr Piyapootinun 10,110,100 2.30%

7. ThaiNVDRCo.,Ltd. 9,195,429 2.09%

8. Mr.Pongsathorn Siritham 5,832,150 1.33%

9. Mr.Charoen Aekudomsin 4,635,400 1.05%

10. Mr.Vichai Aekudomsin 4,380,000 1.00%

Total 342,627,859 77.88%

GunkulGroupCompanyLimitedistheholdingcompanywithpaid-upcapitalof110.00millionbahtasofDecember31,2012.MajorshareholderisDhumrongpiyawutfamilywith99.64%stakeinGunkulGroup.


No. Name Number of Share Percentage

1. DhumrongpiyawutFamilyGroup

1.1Mr.Gunkul Dhumrongpiyawut 254,000 23.09

1.2MissNaruechonDhumrongpiyawut 211,000 19.18

1.3Mr.Pawich Dhumrongpiyawut 211,000 19.18

1.4MissSopacha Dhumrongpiyawut 210,000 19.09

1.5MasterArpakornDhumrongpiyawut 210,000 19.09

2. Mr.Chaloempon Sricharoen 3,000 0.27

3. MissNanpapatr Piyapootinun 1,000 0.09

Total 1,100,000 100.00

�.3 Dividend Payment Policy

TheCompany hasdividendpayout ratio of at least 40%of net profit of theCompanyonly(unconsolidatedbasis)inwhichnetprofitisafterdeductingcorporatetax,legalreserveandotherreserves.However,theCompanymaypaydividendlessthan mentioned above if necessity i.e. more working capital required, aggressiveexpansion plan, or else. The board resolution on dividend payment is needed topropose to shareholders’ meeting for approval, except interim dividend in whichboardcangoaheadandreporttoshareholderslater.

TheCompany’ssubsidiariesalsohasdividendpayoutratioofatleast40%ofnetprofitafterdeductingcorporatetax,legalreserveandotherreserves.Thereareanotherfourfactors,cashflowanalysis,financialstatus,liquidityandexpansionplan,takingintoaccountonhowmuchdividendtopay.


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�. Management Structure

�.� Corporate Structure

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�.� Management Structure

TheCompany’smanagement structure comprises of Board of DirectorsandexecutivesinwhichBoardofDirectorscomesfromindependentdirectors,non-executive directors and executive directors. Independent directorsrepresentonethirdofboardofdirectors.

TheBoardofDirectorshasfivesub-committeeswhicharetheAuditandCorporate Governance Committee, Executive Committee, Nomination andRemuneration Committee, Risk management Committee and ManagementsTeam.

The Board of Directors determines that the Company’s Chairman,Chairman of audit committee and all directors in Audit and CorporateGovernanceCommitteeareindependentdirectors.

�) Board of Directors

As of December 31, 2012, board of directors comprised of ninepersonsasfollow;

Name Position

1.Mr.Gunkul Dhumrongpiyawut1) ChairmanoftheBoard2.Mr.SathapornKotheeranurak IndependentDirectors ChairmanoftheAuditandCorporateGovernance Committee MemberoftheRiskManagementCommittee 3.Pol.Maj.Gen.VisitSukarasep IndependentDirectors ChairmanoftheNominationandRemuneration Committee MemberoftheAuditandCorporateGovernance Committee 4.Mr.Sombat Santijaree2) IndependentDirectors MemberoftheAuditandCorporate GovernanceCommittee 5.MissSopachaDhumrongpiyawut Director ChiefExecutiveOfficer ChairmanoftheRiskManagementCommittee

�1Gunkul Engineering Public Company Limited

Name Position

6.Mr.Somboon Aueatchasai Director ExecutiveDirector ManagingDirector Secretaryofboardofdirectors 7.MissNaruechonDhumrongpiyawut Director ExecutiveDirector 8.Mr.ChaloemponSricharoen Director ExecutiveDirector 9.Mrs.Areewan Roonpraphan Director ExecutiveDirector

1) Mr.GunkulDhumrongpiyawutwasappointedaChairmanoftheBoardfromBoardofDirectorsmeeting

No.7/2012onNovember9,2012replaceDr.EkapornRakkwamsukhasresignationonOctober1,20122) Mr. Sombat Sarntijaree was appointed a director from Board of Directors meeting No.7/2012 on

November9,2012

Authorized Directors

AuthorizeddirectorwhocansigndocumentsthatwillhaveimpacttotheCompanyisMr.GunkulDhumrongpiyawutorMissSopachaDhumrongpiyawutorMissNaruechonDhumrongpiyawutgivessignaturetogetherwithanothertwosignatures fromMr. Somboon Aueatchasai or Mrs. Areewan Roonpraphan orMr.ChaloemponSricharoenandthengetstheCompany’sstamp.

Or Mrs.Areewan Roonpraphan, Mr.Chaloempon Sricharoen andMr.SomboonAueatchasaiallsigntheirnamesandgettheCompany’sstamp.

Scope of Authority of Board of Directors

1) Superviseanddeterminekeypoliciesrelatedtocoreoperations,finances,fundraisings,capitalmanagementandriskmanagement

2) Consider investmentregardinginvestmentbudgetfor investmentprojectsandmonitorthoseprojectstobeinlineasplanned

3) MonitortheCompany’soperationstomeetortoexceeditsgoalandsetsolutionstosolveproblemsifany

4) Reportgeneralandfinancialinformationtoshareholders,stakeholdersandgeneralinvestorsproperly,timelyandlegally.


5) Acknowledgeauditedreportsfromauditcommitteeandorinternalcontrolunits including accounting audit and advisors and propose solutions ifthereisanyproblem

6) ReviewtheCompany’sinternalcontrolandriskmanagement

7) Prepare process to select top management in accordance withsuccessionplan

8) Appointauditcommitteeandgiveauditcommitteethescopeofpower

9) Appointdirector(s)tobeastheCompany’srepresentativefromboardofdirectors.Representative,however,hasnopowertoapprovetransactionsthat representative or person thatmay have conflict (“person thatmayhave conflict” is the same definition as mentioned in Stock ExchangeCommissionregulation)mayhaveconflictofinterestwiththeCompanyortheCompany’ssubsidiaries.

Thisisanexceptionfortransactionthatgetsapprovalfromshareholders’meeting. Directororpersonwhomayhaveconflictof interestwhoapprovesthistransactionwillnothaverighttovoteonfollowingsubjects;

• Subjectthatisrequiredapprovalfromshareholders’meeting

• Transaction that is required by law to get approval from shareholders’meeting

• Moreover, the following transactions are needed to have approval fromboardofdirectors’meetingandshareholders’meetingbygainingatleastthreeforthoftotalvotingrightsinthemeeting.

- Sellortransferwholeorpartialbusinesstootherpersons

- Do, corrector stopcontract to rent thewholeorpartialbusiness toothers.Assignotherpeopletomanagebusinessortomergebusinesswithotherswithaimtoshareprofitandloss

- Issuenewsharestocreditorsonthedebt-to-equityplan

- Reduce registered capital by reducing number of shares or reducingparvalue

- Capital increase, capital reduction, debenture issuance, acquisition ordivestment

- Othersubjectsthatarerequiredbylaw

��Gunkul Engineering Public Company Limited

�) The Audit and Corporate Governance Committee �)

As of December 31, 2012, the Audit and Corporate GovernanceCommitteecomprisedofthreepersonsasfollow;

Name Position

1. Mr.Sataporn Kotheeranurak2) ChairmanoftheAuditandCorporateGovernanceCommittee

2. Pol.Maj.Gen.VisitSukarasep MemberoftheAuditandCorporateGovernanceCommittee

3. Mr.Sombat Sarntijaree MemberoftheAuditandCorporateGovernanceCommittee

1) theBoardofDirectorsNo.1/2013OnJanuary15,2013tochangethename.“TheAuditandCorporate

Governance Committee” to “The Audit Committee” and appointed “The Corporate Governance

Committee”formoreadditionalcommittee.2) AuditCommitteewhohasknowledgeandexperienceinauditingtheCompany’sfinancialstatements

Scope of Authority of the Audit and Corporate Governance Committee

1) Review and disclose financial statements by coordinating with externalauditorandcompanymanagementwithaimtoreportfinancialreportsonquarterlyandyearlybasis

2) Review internal control and internal audit systems to make it moreefficientlyandeffectivelybyreviewingwith internalandexternalauditors(if any) and consider the independence of internal audit department orotherdepartmentswhichinvolvesininternalaudit

3) Reviewcompanyoperations tobe in tandemwith rulesand regulationsfromStockExchangeofThailandorrelatedagencies

4) Select and appoint company auditor and pay proper compensation toauditorbasedonreliability,resourcesrequiredandexperienceandattendmeetingwithauditorwithouthavingmanagementteamparticipationforatleastonceayear

5) Consider related transactions or transactions that may have conflict ofinterest tocomplywith rulesand regulations setbyStockExchangeofThailandtomakesurethatthosetransactionsarereasonableandbesttotheCompany

6) Report activities of audit committee by disclosing on company annualreport in which this report is signed by chairman of audit committee.


Thisreportincludes; • Opinions on process of conducting and disclosing company

financialstatementsonreliabilityandaccuracybasis • Opinionsoncompanyinternalcontrolsystem • OpinionsonpracticescompliedwithStockExchangeofThailandor

relatedrules • Reasonsonproperauditor • Opinionsontransactionsthatmayhaveconflictofinterest • Number of audit committee meetings and number of meeting

participationsofeachauditdirector • Opinionsoroverallnotices thatauditcommitteegets fromcharter

operations • Other reports that audit committee thinks that shareholders

and general investors should know under scope of duty andresponsibilityassignedbyboardofdirectors

7) Proposed guidelines for good corporate governance to the Board ofDirectors. To advise the Board on matters of corporate governance aswell.

8) Theoperationsof theBoardandmanagementtotheprinciplesofgoodcorporategovernance.

9) Review of the principles of good corporate governance by comparisonwith the practice of international practice and present to the Board ofDirectors.

10) Thecorporategovernancepoliciesofthecompanyforworkinggroup.

11) ThepoliciesandpracticeswithCorporateSocialResponsibility

12) Tomonitor the implementation of the CSR and report to the Board ofDirectors.

13) TointroducetotheBoardconcerningthegoodcorporategovernance. 14) Implementotherjobsassignedbyboardofdirectorsundersupervisionof

audit committee l ike reviewing financial management and riskmanagement policy, reviewing business code of conduct, reviewingtogether with company management on significant reports that areneeded to report to public as per required by law i.e. managementanalysisreport.


Tomakegreatefficiencyofaudit committee, audit committeemaysearch forindependent opinions from other advisors (if necessity) and company will supportsuchexpense.

Qualifications of Audit Committee and Independent Directors

1. Holdsharesoflessthan1%oftotalsharesthathavevotingrightoftheCompany,parentcompany,subsidiaries,relatedcompaniesorcompaniesthatmayhaveconflictofinterest.Inthiscase,itcountssharesheldbypersonswhohaverelationshipwithindependentdirectorstoo.

2. Not or used to be company director who has management authority,employee, salary-based advisor or authorized person who manage theCompany,parentcompany,subsidiaries,relatedcompaniesorcompaniesthatmayhaveconflictofinterest.Anexceptioncomeswhentheyareoutofthatpositionforatleasttwoyearsbeforetakingthisposition.

3. Not apersonwhohasblood relationshipor law relationship in formoffather/mother, spouse, brother/sister, son/daughter including spouse ofchildofmanagement,majorshareholder,authorizedpersonorpersonwhoisnominee tobemanagementorauthorizedpersonof theCompanyorsubsidiary

4. Not or used to have business relationship with the Company, parentcompany, subsidiaries, related companies or companies that may haveconflictofinterestthatmayhaveimpacttoindependentdecision.Notorusedtobemajorshareholder,directorormanagementofpersonwhohasbusiness relationship with the Company, parent company, subsidiaries,relatedcompaniesor companies thatmayhaveconflict of interest. Anexceptioncomeswhentheyareoutofthatpositionforatleasttwoyearsbeforetakingthisposition.

5. NotorusedtobeauditoroftheCompany,parentcompany,subsidiaries,relatedcompaniesor companies thatmayhaveconflictof interest.Andnot or used to major shareholder, director, management or partner ofauditing firm whose auditor is hired as auditor of parent company,subsidiaries, related companies or companies thatmay have conflict ofinterest. Anexceptioncomeswhen theyareoutof thatposition foratleasttwoyearsbeforetakingthisposition.


6. Notorusedtobeprofessionalserviceproviderincludinglegaladvisororfinancialadvisorwhogetscompensationofovertwomillionbahtayearfrom the Company, parent company, subsidiaries, related companies orcompanies thatmayhaveconflict of interest. In case thatprofessionalservice provider is juristic person, it covers major shareholder, director,management or partner of professional service firm too. An exceptioncomeswhen theyareoutof thatposition forat least twoyearsbeforetakingthisposition.

7. Not a director who gets appointment to be representative for theCompany, major shareholder or shareholder who has relationship withmajorshareholder

8. Not to do similar business with aim to compete perfectly with theCompany or subsidiaries. Not be partner, director, employee, salary-based advisor or shareholder (havingmore than 1% of voting right) ofcompanywhohassimilarbusinessandcompeteswitheachother

9. Not have any character which may have impact to give independentopinionsoncompany’soperations

3) Executive Committee

As of December 31, 2012, executive committee comprised of fivepersonsasfollow;

Name Position

1. MissSopacha Dhumrongpiyawut1) ChiefExecutiveOfficer

2. Mr.Somboon Aueatchasai ExecutiveDirector

3. MissNaruechon Dhumrongpiyawut ExecutiveDirector

4. Mr.Chaloempon Sricharoen ExecutiveDirector

5. Mrs.Areewan Roonpraphan ExecutiveDirector

1) Mr. Gunkul Dhumrongpiyawut has resignation of Chief Executive Officer On November 8, 2012 by

Ms.SopachaDhumrongpiyawutappointmentChiefExecutiveOfficerfromBoardofDirectorNo.7/2012

onNovember8,2012

Scope of authority of executive committee

1) Have authority to make decision on the Company’s key operations bysetting scope, type, size, objective and policy of business as well as


supervising overall operations, production, customer relationship andresponsibilitytoboardofdirectors

2) Consider investment expansion and fixed asset acquisition and thenproposethistoboardofdirectors

3) Have authority to act and show as company representative to outsidepeopleinrelatedactivitiesandhavingbenefittocompany

4) Considerfundraisingtoproposetoboardofdirectors

5) Approvetheappointmentofnecessaryadvisorswhocanhelpcompany

6) Dogeneralmanagement

7) Approve plan of each depar tment and approve request of eachdepartmentthatisbeyonddepartmentauthority

Regarding assignment of authority and responsibility, person who get suchauthority will not have authority to approve transaction that such person orrelatedpersonthatmayhaveconflictofinterest(“personthatmayhaveconflictof interest” is defined by Stock Exchange of Thailand) to company orsubsidiaries.Approvalofsuchtransactionisneededtoproposetomeetingofboardofdirectorsand/ormeetingofshareholders.Anexceptioncomesfromtransaction regarding normal operations of company in line with rules andregulationssetbyboardofdirector.

�) The Nomination and Remuneration Committee

As of December 31, 2012, the Nomination and RemunerationCommitteecomprisedoffourpersonsasfollow;

Name Position

1. Pol.Maj.Gen.VisitSukarasep ChairmanoftheNominationandRemunerationCommittee

2. Mr.Decha Chooligorn MemberoftheNominationandRemunerationCommittee

3. Mr.Charan Lerththeerapoj MemberoftheNominationandRemunerationCommittee

4. Mrs.Somluk Kanuenghet MemberoftheNominationandRemunerationCommittee&

Secretary

Remark Board of Directors Meeting No. 7/2012 on November 9, 2012 with the appointment of the

NominationandRemunerationCommitteeset.


Scope of Authority of the Nomination and Remuneration Committee

1) Proposeremunerationplanandmethodtopayremuneration&benefittoboardofdirectorsandsub-committeesappointedbyboardofdirectors

2) Consider comments regarding remuneration and benefit payment basedondutyand responsibilityofpresidentandmanagementexecutivesandconsidercriteriaandevaluationtodetermineannualcompensation

3) Reviewstructureandcriteriaofremunerationpaymentbasedon1)and2)to make it fit with responsibility, company operations and marketenvironment

4) Consideroverallbudgetregardingsalaryhike,bonusandotherbenefitsofemployees

5) Review and propose scope of authority, duty and responsibility ofremunerationcommitteetomakeitfitwithcurrentcircumstance

6) Preparereporttoboardofdirectorsforatleastonceayear

7) Operateotherjobsassignedbyboardofdirectors

In order to make tasks done by remuneration committee efficient,remunerationcommitteeshouldinvitemanagementdepartmentorheadofeachdepartmenttoattendmeetingsoremunerationcommitteecandeclareorsendrelated documents. Remuneration committee may hire advisor and expensebelongstocompany.

�) The Risk Management Committee

AsofDecember31, 2012, riskmanagementcommitteecomprisedoffourpersonsasfollow;

Name Position

1. MissSopacha Dhumrongpiyawut ChairmanoftheRiskManagementCommittee

2. Mr.Sathaporn Kotheeranurak DirectoroftheRiskManagementCommittee

3. AVM.Dr.Pian Torarong DirectoroftheRiskManagementCommittee

4. Mr.Papangkorn Sakulvorakarn DirectoroftheRiskManagementCommittee&Secretary

Remark BoardofDirectorsMeetingNo.7/2012onNovember9,2012withtheappointmentoftheRisk

ManagementCommitteeset.


Scope of Authority of Risk Management Committee

1) Set policy and scope of risk management framework, set roles andresponsibilityandparticipatetosetcompanygoals

2) Supervise and support risk management to make it successful onenterprisewideriskmanagement”andincreaselevelofriskawarenessofeach factor into consideration in resource allocation and processmanagement

3) Considerkey risksandmanage themefficientlyandeffectively,promotecapacity in enterprise wide risk management and risk managementtechnique and combine risk management with company business planandothermanagementactivities

4) Prepare risk management language to be the same language used inorganizationandmeasurechancetohappen, impactandtypeof risk toshare

5) Giveconveniencetodepartmentmanagerstodevelopnewreportingrulesincluding upper and lower end on both qualitative and quantitativeanalysisandsupervisereportingprocess

6) Report to executive head on progress of riskmanagement and outliersandproposenecessarysuggestions

�) Executives

AsofDecember31,2012,therewere11executivesasfollow;

Name Position

1. MissSopacha Dhumrongpiyawut ChiefExecutiveOfficer

2. Mr.Somboon Aueatchasai ManagingDirector

3. Mrs.Areewan Roonpraphan SeniorVicePresident,Factory

4. Mrs.Somluk Kanunghet SeniorVicePresident,TheOfficeofManagingDirector

5. Mr.Papangkorn Sakulvorakarn SeniorVicePresident,BusinessSupport

6. Mr.Worathep Luengsirapornchai SeniorVicePresident,InternalAudit

7. Mr.Thamrong Chankraithong SeniorVicePresident,SalesandMarketing

8. Mr.PhongsakornDamnoen SeniorVicePresident,BusinessDevelopment&SpecialProject

9. Mr.Phudis Traivilassakul VicePresident,Logistics

10.MissNaruechon Dhumrongpiyawut VicePresident,Strategic&Investment

11.MissSuttirat Tangnorakul Manager,AccountingDepartment


Scope of Authority of Executive Management

1) Controlandsuperviseoperations/generalmanagement

2) Doasperpolicyset tomeetbudgetapprovedbyboardofdirectorsorexecutivecommitee

3) Haveauthoritytoapprovedisbursementbudgetforacquiringassetsandservicesthatwillhavebenefittocompanyinwhichsuchauthority isforgeneraltransactionontradewithlimitedbudgetsetbyboardofdirectors

4) Have authority to set order, rule, announcement and memorandum tomake things done accordingly to company policy, benefit and rules &regulations

5) Haveauthoritytodoandtoshowascompanyrepresentativetooutsidepersonstohandletaskthatisusefultocompany

6) Approveappointmentofnecessaryadvisors

7) Get assignment to manage company to be in line goal, rules &regulations,policy,announcement,resolutionsfromshareholders’meetingand/orresolutionsfromboardofdirectors’meeting

Regarding authority assignment tomanaging director and other authorityassignment done bymanaging director, this does not include authority and/orauthority assignment to approve transaction that managing director or relatedpersonsmayhaveconflictof interest (basedon rules fromStockExchangeofThailand) to company and/or subsidiaries. Above transaction is needed topropose to board of directors’ meeting and/or shareholders’ meeting forconsiderationandapprovaltobeinlinewithrulesandregulations.Anexceptioncomesfromgeneraltradetransactionsetbycompany’spolicyandcriteria.

Financial Budget Approval

Boardofdirectorshaspowertoapprovefinancialbudgetasfollow;

1. Executivecommitteehaspowertoapprovefinancialbudgettopurchasefinished goods, raw materials and services and has power to signcontractwithtradeandfinancialobligationsworthatmost300.00millionbaht. Executive committee also haspower to approve financial budgetworthatmost200.00millionbahtforacquiringandtransferringofassets.


2. Presidentofexecutivecommitteehaspowertoapprovefinancialbudgettopurchasefinishedgoods,rawmaterialsandservicesandhaspowertosign contract with trade and financial obligationsworth atmost 200.00millionbaht.Presidentalsohaspowertoapprovefinancialbudgetworthatmost100.00millionbahtforacquiringandtransferringofassets.

3. Managing director has power to approve financial budget to purchasefinished goods, raw materials and services and has power to signcontractwithtradeobligationworthatmost100.00millionbahtandwithfinancialobligationworthatmost50.00millionbaht. Managingdirectorhaspower toapprove financialbudgetworthatmost20.00millionbahtforacquiringandtransferringofassets.

Company Secretary

Boardofdirectors’meeting(13/2551)datedOctober27,2008,approvedappointment of Miss Chantra Jongjamareeseethong as Company Secretary,effective since October 27, 2008. Such person has education, knowledge,experienceandresponsibilitytodosecretaryjobwithaimtomakethingsdoneinlinewithrules&regulationsandcorporategovernance.

Scope of authority of company secretary

1. Coordinate tomakemeetings of company and shareholders in tandemwithcorporategovernanceandrules&regulationslikeStockExchangeofThailandActandPublicCompanyActPorSor2535.

2. RespondtoinformationdisclosureofcompanytocomplywithrulesfromStock Exchange of Thailand, Stock Exchange Commission and otherrelatedauthorities

3. Givebasicadvice toboardofdirectorsandmanagementexecutivesonthings to comply with rules from Stock Exchange of Thailand, StockExchangeCommissionandotherrelatedauthorities

4. Prepare and keep significant documents like director register, board ofdirectors’ meeting letter, board of directors’ report, company’s annualreport, shareholders’ meeting letter, shareholders’ meeting report andconflictofinterestreportbydirectorsandexecutives


5. Monitor board of directors’ activities to make things done effectively,efficientlyandbesttocompany

6. Coordinatetomakeresolutionsfromboardofdirectorsandshareholders’meetingfulfilled

7. Dootherjobsassignedbyboardofdirectors

Inaddition,withfocusoncorporategovernance,theCompanysentMissChantra Jongjamareeseethong to takeCompanySecretary Program (28/2008)and Effective Minute Taking-EMT Course (12/2008) held by Thai Institute ofDirectors(IOD).

�.3 Director Search

Though the Company doesn’t have director search committee, thecompany’s board of directors handles that job by using following criteria,knowledge, capability, experience, vision, creditability and perfect qualification(nobanmanner),toselectdirectorandthenproposetoshareholders’meetingforapproval.TheCompanysetskeycriteriafordirectorsearchasfollow;

1. Boardofdirectorscomprisesofatleastfivepersonsinwhichatleasthalfof that must have residence in Thailand and directors must havequalificationsaslawsaid

2. Director search by shareholders’ meeting is based onmajority vote asfollow;

2.1 Oneshareholderhasvotingrightequivalenttooneshare,onevote

2.2 Shareholdervotesdirectoronone-on-onebasis

2.3 Director search is based on highest-scored ranking. In the casethat qualified persons get same scores and exceed number ofdirectorsrequired,chairmanofmeetinghasfinaldecision.

3. Ineveryannualshareholdermeeting,onethirdofdirectorsarerequiredtoresign.Iftotaldirectorscan’tbedividendbythree,usecloseamountofdirectorstoresign.Directorswhoarerequiredtoresigninthefirstyearandsecondyearuseluckydrawtechnique.Forthefollowingyearsafterthat,directorswhoare inposition for the longestperiodhave to resign.However,directorswhoresignmaybeselectedagain.

4�Gunkul Engineering Public Company Limited

4. Directorhasrighttogetcompensationfromcompanyintermofreward,meeting fee,pension fund,bonusorothercompensationsasdefinedbyrules or resolution from shareholders’ meeting either in term of fixedamountorgeneralconcept.Moreover,directoralsogetsallowanceandfringe benefit on top of normal benefits like salary and bonus asemployee.

5. Directorwhowantstoresignsendsresignationformtocompany.Itwillbeeffectiveoncecompanyaccepts.Directormaygiveresignationnoticetoregisterperson.

6. In case that director position is vacant due to extra reasons (not termexpired), board of directors can select qualified personwith no bannedmanner as replacement director in next meeting of board of directors,exceptdirector’stermhaslessthantwomonthsleft.Suchreplacementdirectorwill be in the position for time equivalent to remaining term ofpreviousdirector.Thisresolutionfromboardofdirectorrequiresatleastthreefourthofremainingdirectors.

7. If shareholders want director to resign, it needs to get vote fromshareholders’ meeting of at least three fourth of total shareholdersattendingthemeetingandtotalvotingright.

8. Board of directors select a director to be chairman,while therewill beoneormoretoserveasdeputychairman.

Selection of Audit Committee/Independent Directors

Boardof directors or shareholders’meetingwill select persons tobe acommitteeinselectingauditcommitteeinwhichsuchcommitteemusthaveatleast three persons from audit committee by selecting from independentdirectors.Auditcommitteehastow-yeartermbutmaygetrenewalfromboardofdirectorsorshareholders’meeting.Amongauditcommittee,thereisatleastone person who has knowledge and experience in financial & accountingbackground,sohe/shecandofinancialstatementreview.


Selection of Executive Committee

Board of directors appoints executive committee in which executivecommittee comprises of three at least and five at most by selecting fromdirectors or employees or capable persons who are no audit committee.Executivecommitteehasresponsibilitytomanagecompanyasperassignmentfrom board of directors. Executive committee directly reports to board ofdirectors.

�.� Remuneration

�.�.� Cash Remuneration

(1) Remuneration for Directors and Meeting

The Company has clear and transparent pol icy onremunerationfordirectors.Remunerationcommitteewillconsiderand propose directors’ remuneration to board of directors andthen to shareholders’meeting for approval. Remunerationpaidhereiscompetitivecomparedtothatwithotherlistedcompaniesin energy sector. Directorwhogets assignment tobe in auditcommitteeandexecutivecommitteewillgetmorecompensationsasmoreworksloaded.

Remuneration for directors and sub-committee comprisesofmeetingfeeandannualcompensationdetailsareasfollow;


Remuneration

Audit and Nomination

Corporate and

Board of Governance Executive Risk Remuneration

Position Directors Committee Committee Management Committee

1.Chairman 20,000 20,000 7,500 7,500 7,500

2.Member 17,000 17,000 5,000 5,000 5,000

3.SecretaryofCommittee 5,000 5,000 - 3,000 3,000

Remark: IncasetheindependentdirectorshavebeenappointedasChairmanoftheBoard.Tobeeligible

forpaymentofmeetingfeeonlyonelocationineachofthetopposition.

Annual Compensation

Audit and Nomination

Corporate and

Board of Governance Executive Risk Remuneration

Position Directors Committee Committee Management Committee

1.Chairman 240,000 240,000 500,000 100,000 100,000

2.Member 200,000 200,000 200,000 50,000 50,000

3.SecretaryofCommittee 50,000 50,000 - 25,000 25,000

4.CompanySecretary 100,000 - - - -

Remark:IncasetheindependentdirectorshavebeenappointedasChairmanoftheBoard.Tobeeligible

forpaymentofannualcompensationonlyonelocationineachofthetopposition.

Board of Directors and sub-committees have scheduled meetingsthroughout the year, usually on a quarterly and and special meetings asnecessary. The agenda setting clear and sent notice of themeeting and theagendafortheBoardofDirectorsatleastsevendays,andthemeetingpriortothe Board of Directors have the adequate information before the meeting.Chairman made responsible for allocating sufficient time to present thedocument and informationmanagement is an important issue for discussion.Thequarterlymeetingthemajorityalsoattending,unlessitisanurgentmission.


BoardofDirectors

1Mr.Gunkul

Dhumrongpiyawut5

)7)

27October2008

12

12

8/8

9/9

17/17

16/16

2/2

1/1

2/2

-119,000.00

-119,000.00

367,794.00

598,636.00

966,430.00

2Mr.SathapornKotheeranurak5)

6)

27October2008

12

12

8/8

9/9

4/4

5/5

-1/1

336,000.00

268,000.00

604,000.00

353,000.00

309,035.00

662,035.00

3Pol.M

aj.Gen.VisitSukarasep

5)6)

16March2009

12

12

8/8

9/9

4/4

5/5

-1/1

336,000.00

268,000.00

604,000.00

353,000.00

306,981.00

659,981.00

4Mr.Sombat

Santijaree5)

6)

9November2012

-2

-3/3

-2/2

-79,962.00

62,962.00

142,924.00

5MsSopacha

Dhumrongpiyawut5

)7)

27October2008

12

12

8/8

9/9

17/17

16/16

2/2

2/2

2/2

-119,000.00

-119,000.00

353,000.00

350,945.00

703,945.00

6Mr.SomboonAueatchasai

5)7)

7May2010

12

12

8/8

9/9

17/17

16/16

2/2

1/1

154,000.00

-154,000.00

448,000.00

242,760.00

690,760.00

7MsNaruechon

Dhumrongpiyawut

27October2008

12

12

8/8

9/9

17/17

16/16

119,000.00

-119,000.00

353,000.00

200,000.00

553,000.00

8Mr.ChaloemponSricharoen

27October2008

12

12

8/8

9/9

17/17

16/16

119,000.00

-119,000.00

353,000.00

200,000.00

553,000.00

9Mrs.Areewan

Roonpraphan

27October2008

12

12

8/8

9/9

17/17

16/16

119,000.00

-119,000.00

353,000.00

200,000.00

553,000.00

10AVM.Dr.Pian

Torarong

5)6)

9November2012

-2

-1/1

--

12,241.00

12,241.00

11Mr.PapangkornSakulvorakarn

27October2008

12

12

2/2

2/2

--

83,000.00

83,000.00

12Mr.Decha

Chooligorn5)

6)

9November2012

-2

-1/1

--

12,241.00

12,241.00

13Mr.Charan

Lerththeerapoj5

)6)

9November2012

-2

-1/1

--

12,241.00

12,241.00

14Mrs.Somluk

Kanuenghet

27October2008

12

12

2/2

2/2

--

83,000.00

83,000.00

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For2011and2012thetotalremuneration2,677,000.00Bathand6,356,078.00Bathrespectively,thedetailsoftheremunerationandtheattendanceof

eachdirector.Summarizedasfollows.


1)

In2012,asaresolutionoftheBoardofDirectorsNo.1/2013onJanuary15,2013,tochangethenameof“TheAuditandCorporateGovernanceCommittee”to“TheAuditCommittee”andalsoappointedoneadditionalcommitteeas“TheCorporateGovernanceCommittee”.

2)

AstheRemunerationwillbepaidonetimeperyear,therefore,forremunerationof2012willbepaidintheyearof2013andforremunerationof2013willbepaidin2014.

3)

TobetheremunerationofmeetingfeeandannualcompensationthatpaidfortheBoardofDirectorsCommittee,however,the6executivedirectorswhoasdirectorsoftheBoardhaveintentiontonotgetthe2011annualcompensationinthetotalamountofTHB1,250,000.00.

4)

TobetheremunerationofmeetingfeeandannualcompensationthatpaidfortheMemberofthesub-committees,however,the9executivedirectorswhoasdirectoroftheCommitteehaveintentiontonotgetthe2011meetingfeeandannualcompensationinthetotalamountofTHB

2,774,500andalsonotgetthe2012meetingfeeinthetotalamountofTHB604,500.00

5)

TheListofdirectorswhoareappointedbytheBoardofDirectorsNo.7/2012onNovember9,2012asdetails:

-Mr.Gunkul

Dhumrongpiyawut

Takeapositionof

ChairmanoftheBoardofDirectors

-Mr.SatapornKotheeranurak

Takeapositionof

ChairmanoftheAuditandCorporateGovernanceCommittee

MemberoftheRiskManagementCommittee

-Pol.Maj.Gen.VisitSukarasep

Takeapositionof

ChairmanoftheNominationandRemunerationCommittee

MemberoftheAuditandCorporateGovernanceCommittee

-Mr.Sombat

Santijaree

Takeapositionof

IndependentDirectors(Intheyear2013,hasappointedtobeChairmanoftheCorporateGovernanceCommittee)

-Ms.Sopacha

Dhumrongpiyawut

Takeapositionof

ChiefExecutiveOfficer/ChairmanoftheRiskManagementCommittee

-Mr.SomboonAueatchasai

Takeapositionof

ManagingDirector

-AVM.Dr.Pian

Totarong

Takeapositionof

MemberoftheRiskManagementCommittee

-Mr.Decha

Chooligorn

Takeapositionof

MemberoftheNominationandRemunerationCommittee

-Mr.Charan

Lerththeerapoj

Takeapositionof

MemberoftheNominationandRemunerationCommittee

Rem

ark:*-

AstheresolutionoftheBoardofDirectorsNo.1/2013onJanuary15,2013,Mr.SombatSarntijareehasbeenappointedtoChairmanoftheCorporateGovernanceCommittee.

-AsresolutionoftheBoardofDirectorsNo.2/2013on25February2013,Mr.PhongthepThitapanandMrSomchaiTrairatanapiromhavebeenappointedtoMemberofCorporateGovernancecommittee.

-TheappointmentoftheChairmanandmemberofallcommitteesincludingkeyexecutivepositionshasbeenpassedaresolutionforapprovalbytheRemunerationandNominationCommitteepriortosubmissiontotheBoardofDirectors’considerationandappointment.

6)

TobeIndependentDirector/MemberoftheCommitteewhonotrelatedorasanyexecutivepositionintheCompany.

7)

Listofthedirectorswhoresignedduringtheyear2012

-Dr.Ekaporn

Rakkwamsuk

ResignedfromDirector/ChairmanoftheBoardandMemberoftheAuditcommittee/ChairmanoftheAuditcommitteeonOctober1,2012

-Mr.Gunkul

Dhumrongpiyawut

ResignedfromMember/ChairmanoftheRiskManagementandMember/ChairmanofTheNominationandRemunerationCommitteeonNovember8,2012

-MsSopacha

Dhumrongpiyawut

ResignedfromMemberofTheNominationandRemunerationCommittee,onNovember8,2012

-Mr.SomboonAueatchasai

ResignedfromMemberoftheRiskManagementonNovember8,2012

-Mr.ThamrongChankraithong

ResignedfromMemberoftheRiskManagementandMemberofTheNominationandRemunerationCommittee,onNovember8,2012

-Mr.PhongsakornDamnoen

ResignedfromMemberofTheNominationandRemunerationCommittee,onNovember8,2012

Remu

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Dire

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Directorswhoresignedduringtheyear2554-2555hasbeenpaid.

1Dr.Ekaporn

Rakkwamsuk7)

27October2008

12

98/8

6/6

4/4

3/3

400,000.00

320,000.00

720,000.00

300,000.00

240,000.00

540,000.00

2Mr.Thamrong

Chankraithong

7) 25May2009

12

10

2/2

1/1

2/2

1/1

--

--

85,520.00

85,520.00

3Mr.PhongsakornDamnoen

7) 11February2011

12

10

2/2

1/1

--

--

42,760.00

42,760.00

1,821,000.00

856,000.002,677,000.00

3,313,756.00

3,042,322.00

6,356,078.00


(2) Remuneration for Management Executive

In 2011, the Company had 11 executives, 4 wereexecutivesanddirectorsand7wereexecutivesonly.

In 2012, the Company had 11 executives, 4 wereexecut ives and directors and 7 were execut ives only .Remunerationpaymentisasfollow;

(Unit:Baht)

Executives and Directors Executive Only

2011 2012 2011 2012

Remuneration No. of No. of No. of No. of

to management persons Remuneration persons Remuneration persons Remuneration persons Remuneration

Totalsalary 4 8,605,955 4 7,676.133 7 7,100,770 7 8,051,754

Totalbonus 4 1,075,838 4 2,533,940 7 1,561,029 7 1,319,931

Total 4 9,681,793 4 15,727,887 7 8,661,799 7 3,853,871

9.4.2 Non-cash remuneration

-None-

�.� Corporate Governance

Board of directors focuses on systematic management and corporategovernance and uses this as guideline to run business. Board of directorsapprovedcorporategovernancepolicy in theboardofdirectors’meeting (13/2551)onOctober27,2008,asthe latest.TheCompanyhasalsoprovidedtohaveselfAppraisalbytheBoardandCEO&ManagingDirector’sperformandappraisal by the Board. Details of operations under corporate governanceprinciple in2011basedoncorporategovernanceprincipleofStockExchangeofThailandforlistedcompaniesin2006areasfollow;


1. Shareholder Right

TheCompanyhaspolicy to support andpromote shareholders tousetheirrightasfollow;

1. Give date, time, place,meeting agenda and other related data toshareholdersinadvance,sotheyhavetimetostudy.Companywillsend letter of shareholders’ meeting together with relateddocumentstoshareholdersforatleastsevendaysorfourteendaysin advance beforemeeting takes place. Company also publishesthisonnewspaperforatleastthreedaysinadvance.Moreover,itpostsinformationoncompany’swebsite,soshareholderscanreachandunderstand.

2. Sendproxytogetherwithletterofmeetingtosupportvotingrightincase shareholders are not available to be at the meeting bythemselves.

3. Give shareholders a chance to show opinions and questions inaheadofthemeeting

4. Giveshareholdersachancetoshowopinionsandquestionsonthemeetingdate

5. Require at least half of boardof directors to attend shareholders’meeting, so they can answer questions raised by shareholders.Atleastoneauditcommitteeisrequiredtoattendthemeetingtoo.

6. Requirechairmanofthemeetingtoexplainonvotingprocedureinwhich shareholderswho have conflict of interestwill not have novotingrightonthatsubject.

7. Prepare meeting report with full information involved includingquestionsfromshareholdersandanswersfromdirectors

8. Publishmeeting report via electronicmediaofStockExchangeofThailand and company’s website, so shareholders can checkwithouthavingofficialreportonhands.

In 2012, the Company held general shareholders’meeting for theyear2012datedApril10,2012,atSiamCityHotelatKamolthipBallroom,2ndFl,477SiAyuthayaRoad,Bangkok10400.Therewereeverydirector


of committee, Director, Executive, Secretary of every committee andsecretary of company Auditor representative of financial advisor andrepresentative of Lawyer participate total 28 directors andmanagementexecutivesparticipatingtoexplainmeetingagendaandanswerquestionsfromshareholders.TheCompanyassignedThailandSecuritiesDepositoryasregistrartosendletterofshareholdersmeetingandrelateddocumentsto shareholders for at least 20 days in advance before meeting takesplace. TheCompanyalsopublished letterof shareholdersmeetingandrelateddocuments via company’swebsite,www.gunkul.com, for at least23 days in advance, so shareholders can reach related informationregardingshareholders’meetingasconvenientandasquickaspossible.

Forregisteringandvoting,theCompanyusesbarcodesystemandprovidesrevenuestampforshareholderstosendproxytocompanywithaimtomakeitfastandconvenienttoshareholders.Inthemeeting,theCompany explains voting criteria before meeting starts and givesshareholders opportunity to express their opinions and raise questions.In addition, the Company also welcomes questions from shareholderssent in ahead of the shareholders meeting for the year 2013 duringOctober29,2011toJanuary14,2013.However,therewerenoquestionsraised.

2. Equivalent Treatment among Shareholders

TheCompanyhaspolicy tocreateequivalentamongshareholdersbothexecutiveshareholdersandnon-executiveonesaswellasminorityshareholdersandforeignshareholdersasfollow;

1. Publish information regarding shareholders meeting to keep allshareholders informed equivalently and not add special agendawithoutanynotice

2. Giveshareholderswhocan’tattendmeetingbythemselvestogiveproxytoothersasrepresentative

3. Give chance to all shareholders to propose opinions and to raisequestionsinaheadofandduringthemeeting


4. Givechancetoshareholderstovotedirectoronone-on-onebasis

5. Require shareholders who are directors or executives to discloseinformation that may have confl ict of interest and thoseshareholdershavenorighttovoteonthatsubject

6. Tell board of directors and management to know their task onreporting a change in holding of securities to Stock ExchangeCommitteebasedonarticle59ofSecuritiesandStockExchangeofThailandActPorSor2535

7. Require board of directors, executives or employees who haveinsideinformationnottodisclosesuchinformationtopublicandarebanned for securities trading of the Company’s stocks for onemonthbeforefinancialstatementspublished

3. Stakeholders Role

TheCompanyhaspolicytopromotecooperationbetweencompanyand all stakeholders including shareholders, bankers, customers, tradepartners,employees,andsurroundingcommunitieswithaimtoencouragethe Company’s operations and to create long-term sustainable growth.Besides realizing the importance of right of stakeholders by law, theCompany also has policy to take care all stakeholders equivalently asfollow;

Employee : Company treats employees equally, gives them propercompensationsandcreatesqualityworkingenvironment.

Partner : Companytreatstradepartnersfairlyandinlinewithtradecontractandhaspolicytocreateanddeveloprelationshipwithtradepartnerscontinuously.

Customer : Company has responsibility to customers by maintainingquality and standard of goods and services as well asreacting to customers’ need perfectly and completely tomaximizecustomersatisfactioninthelongrun.

Competitor: Company operates business along with fair competitionanddevelopsmarkettogrowformutualbenefitofindustry.


Creditor : Company complies with contract condition and givesinformationtocreditorsasperrequest.

Society : Companyhasresponsibilitytomonitoritsoperationsnottohurtenvironmentandsocietyandcomplieswithrulesandregulations. Company also has program on corporatesocial responsibility (CSR)bysupportingcreativeactivitiescontinuously andallocatingbudget todoCSRwith focusactivities regarding education, environment and youth. In2011,theCompanydonatedthingstoimprovelearningskillofyouthontheChildrenDay,awardedscholarshiptoyouthandemployees’children,supportedWhiteHeartProjectofWatPrabahtNampuuFoundationandhelpedvictims fromnatural disasters like earth quake, flood etc. In addition,company encourages employees for all levels to havesocial responsibility with aim to build good corporatecultureforever.

To make sure that all stakeholders are equally protected andtreated, the Company provides communication channels via company’swebsitewww.gunkul.com,soshareholdersandstakeholdershavechancetoexpresstheiropinionsandtocomplaindirectlytocompany’sboardofdirectorsincaseofunfairtreatmentorhavingtroubleswithcompany.Inaddition,theCompanyprovidesemployeeschannelstoconsultorinformdirectly toExecutiveOfficewhen it findssuspectactions thatare illegalorbreak“businesscodeofconduct”thatmayhaveimpacttoemployees,stakeholdersandcompany itself. ExecutiveOfficewill findout factandreport to internal audit committee and audit committee for furtherconsideration.Thisdatainformedwillbekeptsecret.

4. Leadership and Vision

Board of directors recommends company to have vision, mission,goal, policy, operational direction, long-term strategy and plan & annualbudget by assigning executive management to present and board ofdirectors to comment and discuss to get common agreement before


approval.Boardofdirectorsappointspresidentofexecutivestodevelopandimplementbusinessstrategy.Role,dutyandresponsibilityofboardof directors, sub-committee and executive committee are needed to beidentified.

5. Conflict of Interest

The Company is serious on banning directors, executives andemployeestousepositiontofindbenefit,soitincludesthissubjectintocompany’s business code of conduct. Directors, executives andemployees are required not to do related transaction that may createconflict of interest to company. In case it is the must to do thattransaction,pricingandconditionshavetobethesameasthatdonewithoutsideperson.Directorsoremployeeswhohavebenefitinthatprojectmust not have right to approve. Related transactions under StockExchange of Thailand Act are required to strictly follow the rules onprinciple,methodandinformationdisclosure.

In addition, board of directors also bans not to use insideinformation to find its own benefit and to compete business withcompany. It also requires not to use inside information for securitiestradingornottotellothersforinsidertrading.Incasethatexecutivesoremployeesparticipateinspecialtaskinwhichinformationisasecretandmayhaveimpacttocompanyshareprice,suchexecutivesoremployeesareneededtosignconfidentialityagreementwithcompanyuntilcompanydiscloses information to Stock Exchange of Thailand (SET) and StockExchangeCommittee(SEC).

6. Business Code of Conduct

Apart fromcorporategovernance,boardofdirectorshaspolicy tooperatebusinesswithaimtomaximizebenefitofshareholdersbysettingup goal and procedures to meet that goal. The Company provideswrittencodeofconductinwhichboardofdirectorsagreedandapprovedthe latest code of conduct in shareholders’ meeting (13/2551) datedOctober 27, 2008. In code of conduct, it comprises of company goal,


vision, mission, ideology, corporate value, corporate governance policyand regulationwith aim to provide clarity and convenience to directors,executivesandemployeestounderstandcompanystandardanddirectioninwhichinvolvesallstakeholderslikeemployees,shareholders,customers,partners,creditors,competitorsandsociety.

Directors, executives and all employees have to acknowledge,understand and implement the Company’s policy and regulations asmentioned in code of conduct. Regular meeting, public relation andcreativeactivityarerequiredtomakeemployeesinformedandunderstoodtheimportanceofbusinesscodeofconduct.Apartfrombusinesscodeofconduct,theCompanyalsohas“CorporateSharedValues”projecttocreatesharedcorporateculture.

7. Position Consolidation or Power Split

Board of directors sets that chairman of board is not the sameperson as chairman of executives by having divided role, authority andresponsibility with aim to create balance between management andcorporategovernance.

8. Directors and Executives Remunerations

Board of directors assigns remuneration committee to reviewstructure of remuneration system and proper compensation tomanagement executives based on task, duty, responsibility andperformance.Suchremunerationshouldbecompetitivewhencomparestoindustryandbeabletocreatemotivationtoworkeffectively.

Directors’ remunerat ion comprises of two par ts , annualcompensation and meeting fee. Remuneration payment to directors isrequiredapprovalfromshareholders’meeting.

TheRemunerationsdetailshasbeenmentionalonitems9-4


9. Board of Directors’ Meeting

Boardofdirectorsrequirestohavemeetingatleastonceaquarter,while extra meeting will be held if necessary. In the meeting, agendahavetobeclearandrelateddocumentshavetobeprovidedandsenttodirectors forat leastsevendays inaheadofmeeting,sodirectorshavetimetostudy.Incasethereisnewagendatoaddafterdocumentssent,it can do only on emergency and is needed to get approval fromchairmanofboardofdirectors.Alldirectorshavechancetodiscussandcommentopenlyandchairmanofboard isresponsibletomakemeetingconclusion.Incasedirectorhasconflictofinterestinthatsubject,suchdirectorhastowalkoutfromthemeeting.

Meeting report is inwritten form. After getting acknowledgementfrommeeting,alldocuments requireacknowledgement fromchairmanofboardandsecretaryofboard.Therearetwosetsofmeetingdocuments,originaloneandcopyone (sodirectorsand relatedpersonscanuse iteasily).Inaddition,meetingdocumentsarekeptinelectronicsfile.

10. Sub-committee

Board of directors appoints four sub-committees to help monitorbusiness.

1). Audit sub-committee comprises of independent directors for threepersonswithtermofthreeyearsatmost.

2). Executivesub-committeecomprisesofdirectorsandexecutivesforfivepersons.

3). Remuneration sub-committee comprises of executives for fourpersons.

4). Riskmanagement sub-committee comprises of executives for fourpersons.

Board of directors may appoint other sub-committee as pernecessity.Scopeofauthorityofeachsub-committeehastobeclearandspecific as sub-committee should be close to issue or problem thanothers.


11. Internal Control and Internal Audit

Boardofdirectorssetsinternalcontrolsystemcoveringaccounting,finance, operations, regulations, audit and check & balancewith aim toprotectshareholders’capitalandcompany’sassets. Internalauditofficemusthaveindependencyandreportdirectlytoboardofdirectorstomakesure that internal audit and internal control system is the key drivingmechanism to support long-term sustainable growth. Internal auditreviews internal control activities and give advice and suggestionregarding internal control and risk management to improve operationalefficiency to cope with growing business and changing economicenvironment.

12. Directors’ Report

Boardofdirectorsisresponsibleforreportingconsolidatedfinancialstatementsof theCompanyandsubsidiariesandfinancial information inannual report. That report is based on Thailand’s general accountingstandard by selecting the proper one and use it consistently. Auditcommitteeandaccountingauditwilltogetherconsiderproperaccountingstandard to use in financial report. Board of directors emphasizespersons who do report to have cautious judgment and to disclosesufficientinformationonfinancialnotes.

Boardofdirectorsassignsauditcommitteetorespondforqualityoffinancialreportandinternalcontrol.Commentsfromauditcommitteeonthissubjectareshowninauditcommitteereportandinannualreporttoo.

Boardofdirectorscomments that financial reportof theCompanyand its subsidiaries as of December 31, 2012, is right, sufficient andreliable.

13. Information Disclosure and Transparency

Boardofdirectorshaspolicyondisclosureofinformation,financialdataandbusinessoperationswithcreditabilityandreliabilitytoshowtrueoperationalandfinancialstatusandbusiness futurebysettingrulesand


regulationsregardinginformationdisclosurebasedonStockExchangeofThailandAct.In2011,theCompanydisclosedfollowinginformation;

• Reportfinancialandgeneralinformationtoshareholdersandgeneralinvestors and report board of directors’ responsibility on financialreporttogetherwithauditedreportinannualreport

• Repor t corporate governance policy and policy related toenvironmentandsocietyand implementationviadifferentchannelslikeannualreportandcompanywebsite

• Roles and responsibility of board of directors and sub-committee,number of meetings attended, number of directors participatedmeetingslastyear,anddirectors’opinions

• Remunerationpolicytodirectorsandexecutives

Apart from information disclosure as per required by StockExchange of Thailand Act, the Company also communicates withshareholdersandinvestorsviainvestorrelationsdepartmentascompanyrepresentative to directly contact with shareholders, investors, securitiesanalysts (both local and foreign ones), and corporate communicationsdepartment to publish information to shareholders, investors and publicviamassmediaandothermedias(bothlocalandinternationalones).

In 2012, the Company held four times of analyst meetings todiscuss about quarterly and yearly results to investors and analysts.Press release is used once company has investment and or businessactivity.

In addition, information disclosure is done via company websitewww.gunkul.com both in Thai and English so all stakeholders canparticipate.Ifinterested,youcancontactinvestorrelationsdepartmentattelephoneno.0-2242-5867and0-2242-5861facsimileno.0-2242-5878ore-mailchantra@[email protected]


�.� Inside Information

TheCompanyemphasizesoninformationdisclosureandtransparencybynot allowing directors and executives to use inside information to find theirbenefitsandforsecuritiestradingasfollow;

- Require directors and executives to report holding of securities ofthemselves, spouse, underage children to Stock Exchange CommissionandStockExchangeofThailandArticle59andpunishmentArticle275ofStockExchangeofThailandActPorSor2535

- Require management to report change in securities holding to StockExchangeCommissionandStockExchangeofThailandAct59PorSor2535andsendcopyofthisreporttocompanyonthesamedaythatsenttoStockExchangeCommission

- Requiredirectors, executivesoremployeeswhoknow inside informationnot to disclose information to outsiders or to persons who are notinvolved in thissubjectandnot todosecurities trading forat leastonemonthbeforeannouncementoffinancialstatementsandatleast24hoursafterannouncement

Companysetsdisciplinepunishmentforpersonwhofindsbenefitforitselfby using inside information to disclose until it hurts company. Disciplinepunishmentstartsfromverbalwarning,writtenwarning,probationandlayoff.

�.� Personnel

1. Total employees of the Company and subsidiaries as of December 31,2012

- Permanentemployees351persons

- Temporaryemployees102persons

2. Employeeremuneration

- In 2012, cash remuneration of employees of the Company andsubsidiariescomprisedofsalary,bonusandPensionfundmoneywithcombinedamountof124,268,329.50baht


Unit : baht 2011 2012

Salary 79,357,392.84 97,706,372.35

Bonus 7,893,119.62 21,563,510.37

Pensionfundmoney 1,158,890.83 4,998,446.78

Total 88,409,403.29 124,268,329.50

3. Labordisputeoverthepastthreeyears

-None-

4. Personneldevelopmentpolicy

TheCompanyhaspolicytodevelopstaffwithaimtosupportthemtogrowintheorganizationandrequirestafftoworkhappilysotheycancreateproductivitywhichisgoodtocompanyforsustainablegrowth.

The Company sets human resources development plan by usingcompetencyandKPIsasdatatosettrainingcoursetoimproveworkingskill.Followingsaretrainingcoursesprovidedtovariouslevelsofstaff;

- Management Company wants management to clearly understandcorporatemanagement,vision,andstrategy,sotheycanset up integrated corporate strategy for companyresulting in competitive advantagebyproviding trainingcoursesonplanning, strategyandmanagement for topexecutives.

- Dept.Head Company wants to create ski l l on prel iminarymanagement and job responsibi l i ty so head ofdepartment can fulfill corporate strategic plan and usethisskill tomanagecontrolee.Trainingcourses involveleadership, teamwork and basic management skill tohead of department so they can apply to use withemployees.

- Employee Company wants employees to have knowledge andunderstand their roles and responsibility so they canimprove their performance. Training courses focus on


operating skill and working environment like primarywork,presentationsuggestionandrulesandregulations.

On management structure policy, the Company group has policy topromoteonannualbasisforcapableemployeesinaccordancewithcareerpathpolicy.Inaddition,theCompanygroupalsosupportsemployeestoparticipatein sustainable quality development like expressing opinions to develop workand having skill test. For directors and top executives, the Company groupsupportsthemtoparticipatetrainingcoursesheldbyThaiInstituteofDirectors(IOD)andothers to improveunderstandingof roles, responsibilityandskill inmanagementasbeingcompanydirectorsandexecutives.


�0. Details of the Board of Directors and Executives

�0.�

Details of Directors and Executives

Shar

e

Hold

ing

Wor

king

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

1. D

r. Ek

apor

n

52-PH.D.inPublicAdministration

-None

2008-2012

ChairmanoftheBoardofDirector/

GunkulEngineeringPublicCompany

R

akkw

amsu

k

RamkhamhaengUniversity

ChairmanoftheAuditCommittee/

Limited

ChairmanoftheBoard

-Diplom

aofPoliticsandGovernance

IndependentDirector

ofDirectors

inDemocraticSystemsforExecutive

2002-PresentCommitteeoftheparliament/Program

WesternUniversity

ChairmanoftheAudit

Class4,KingPrajadhipok’sInstitute

Director/Directoroftheeducationcenter

Committee

-M

.A.inPoliticalScience,

2002-PresentSpeciallecturerinpoliticalscienceand

RamkhamhaengUniversity/Ubon

IndependentDirectors

ThammasatUniversity

publicadministration

RatchathaniUniversity

(ResignedonOctober

-Barrister-at-Law

2002-PresentSpeciallecturerinpoliticalscienceand

KrirkUniversity/SakonNakhon

1,2012)

-BachelorofLaw,Thammasat

publicadministration

RajabhatUniversity

University

2002-PresentPresident

VillageSchoolFoundation

-DirectorAccreditationProgram

1988-PresentDeputyMinisterofLaborandSocial

MinistryofLabour/Parliament

(DAP)77/2009

Welfare

ThaiInstituteofDirector(IOD)

1996

AssistantSecretarytotheMinisterof

MinistryofCommerceofThailand

-LeaderProgramNo.12,Capital

Commerce

M

arketAcademy

MemberoftheHouseRepresentative

Parliament,SakonnakhonProvince

President

President

UthaiPhim

jaichonFoundation

ConsultantforPrivatesectororganizationalMigrantworkerorganization

developmentinlaborsubject

Chairman

ParliamentaryCommitteeforDrafting

LaborLaw

Director

SocialScienceAssociationofThailand


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

2. M

r. Gu

nkul

57

-HonoraryMasterofEngineering

0.03

Husbandof2012-PresentChairmanoftheBoardofDirectors


D

hum

rong

piya

wut

WesternUniversity

MissSopacha

Lim

ited

DirectorwihAuthorityto

-LeaderProgram15/2012

Dhumrong1982-2012

President


signonbehalfofthe

CapitalMarketAcademy

piyawut

Limited

Company

-DirectorCertificationProgram(DCP)

andFather2009-PresentDirector

GunkulPowergenCompanyLimited

Chairmanofthe

111/2008

ofMiss

1993-2010

Director

K.N.P.SupplyCompanyLimited

BoardofDirectors


Naruechon1991-PresentDirector

GunkulGroupCompanyLimited

Director

-DirectorAccreditationProgram(DAP)

Dhumrong1996-PresentDirector

GunkulMarineLineCompanyLimited

70/2008

piyawut

2000-PresentDirector

GunkulEngineering(2000)Company


Limited

-M

anagingFinanceforBusiness


G.M.SupplyandConstruction

OwnersbyPeterHo

CompanyLimited

-SecretstoDoublingYourSales,

Productivity&Profits

3. M

r. Sa

thap

orn

56-M

asterofBusinessAdministration

-None

2012-PresentChairmanoftheAuditandCorporate/


K

othe

eran

urak

ChulalongkornUniversity

GovernanceCommittee/Independent

Limited


-Diplom

ainAuditing

Directors

ChairmanoftheAudit

ThammasatUniversity

2012-PresentRiskManagementCommittee/Director


andCorporate

-BachelorinAccounting

Limited

GovernanceCommittee

RajamangalaUniversityof

2012-PresentAuditCommittee/IndependentDirector

KasetThaiInternationalSugar

MemberoftheRisk

TechnologyThanyaburi

CorporationPublicCompanyLimited

ManagementCommittee

-CertifiedPublicAccountant

2008-2012

AuditCommittee/IndependentDirector


-CertifiedProfessionalInternalAuditor

Limited

-DegreeinWorPorOr.2005,


SuraponFoodsPublicCompany

NationalDefenseCollege

Limited


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

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e (Y

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Educ

atio

nal Q

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ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

3. M

r. Sa

thap

orn

-RoyalThaiArmyWarCollege


StarSanitarywarePublicCompany

K

othe

eran

urak

(Con

tinue

d)

Program44

Limited

InstituteofAdvancedMilitaryStudies

2011-PresentSub-CommitteeforAnti-Corruption

OfficeoftheNationalAnti-Corruption

-Diplom

ainhigherPorSorSor1,

ResearchStrategy2010-2014

Commission

PorRorMor1andPorPorRor1

2011-PresentExpertCommittee

FacultyofBusinessAdministration

KingPrajadhipok’sInstitute

Rajam

angala

-Diplom

ainSorJorVor81

2011-PresentArbitrator

CourtofJustice

AppliedPsychologyInstitute

2008-PresentActingCommittee

BureauofCorruptionPreventioninthe

-Diplom

aBorRorOr1

StateEnterprisesand

RoyalThaiPolice

2007-PresentEvaluationCommittee

TheThailandResearchFund


2005-PresentTreasuryDirectorandChairmanof

TheThailandChamberofCommerce

(DAP)35/2009

AccountingandFinanceGroup

andBoardoftradeofThailand


2005-PresentViceChairmanofAuditCommittee

TheThailandChamberofCommerce

andBoardoftradeofThailand


SungoraCompanyLimited


S.V.EvergreenCompanyLimited


SMEsCommitteeofThaiChamberof

Commerce

1993-PresentPresentPartner

SathapornAccountingOffice

1993-PresentManagingDirector

DBMTCompanyLimited


Sahaporn&CoCompanyLimited

1993-PresentPresident

InstituteoftheDevelopmentin

BusinessManaghementandTaxation

2010-2011

Sub-CommitteeforInternalAuditand

ThailandConventionandExhibition

Evaluation

Bureau


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

3. M

r. Sa

thap

orn

2009-2011

ChairmanofAuditCommittee/

InterlinkCommunicationPublic

K

othe

eran

urak

(Con

tinue

d)

IndependentDirector

CompanyLimited

2009-2009

Director

ThaiInvestorsAssociation

2006-2011

ExpertCommitteeoftax

Ministryoffinance,Compensation

Committee

2006-2009

ChairmanofAuditCommittee/IndependentAsiaFiberPublicCompanyLimited

Director

2005-2010

AssociatedJudge

TheCentralIntellectualPropertyand

InternationalTradeCourt

2005-2006

ChairmanofAuditCommittee

ThailandManagementAssociation

2002-2006

CommitteeofTaxandLawDepartment

TheFederationofThaiIndustries

1998

CommitteeoftheHouseofRepresentatives,ProfessionalforAccountancyAct

Parliament

4. P

ol.M

aj.G

en.

57-BachelorDegreeinPublic

-None

2012-PresentChairmanoftheNominationand


V

isit S

ukar

asep

Administration

RemunerationCommittee

Limited


RoyalPoliceDadetAcademy

2009-PresentMemberofAuditandCorporate


MemberofAuditand

-M

anagementCourseforHigher

GovernanceCommittee/Independent

Limited

CorporateGovernance

RankPolice28

Director

Committee

-CourseforSuperintendent31

2012-PresentCommander

AdministrativeandCivilAffairDivision,

Chairmanofthe


,

RoyalThaiPolice

Nominationand

(DAP)78/2009

2006-2012

DeputyCommander




RoyalThaiPolice

2005-2006

Superintendent


RoyalThaiPolice


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

4. P

ol.M

aj.G

en.

2000-2005

Superintendent(DisciplinaryDevelopment)

DisciplinaryDivision,RoyalThaiPolice

V

isit S

ukar

asep

(Con

tinue

d)

1998-2000

DeputySuperintendent(PenaltySolicitor)

DisciplinaryDivision,RoyalThaiPolice

1994-1998

DeputySuperintendent

NongyasaiDistrictProvincialPolice

Station,SupanburiProvince

1992-1994

ChiefofPolice

NongyasaiDistrictProvincialPolice

Station,SupanburiProvince

5. M

r. So

mba

t Sar

ntija

ree

62-M

asterDegreeinMechanical,

-None

2012-Present MemberofAuditandCorporateGovernanceGunkulEngineeringPublicCompany


EngineeringLamarUniversity,Texas,

Committee/IndependentDirector

Limited

MemberofAuditand

U.S.A.,1975

2012-PresentAppointedMember,BoardofDirector

ThaiIndustrialStandardsInstitute

CorporateGovernance

-BachelorofM

echanicalEngineering

2011-PresentAppointedMember,BoardofDirector

EnergyFundAdministrationInstitute

Committee

KasetsartUniversity,1971

2008-PresentAppointedMemberKasetsartUniversity

KasetsartUniversity

ChairmanofCorporate

-SeniorExecutiveDevelopment

Council

GovernanceCommittee

Program-1GE,U.S.A.2005

2010-2012

ChairmanofAuditCommittee/

PTTChemicalPublicCompany

-DirectorCertificationProgram

IndependentDirector

Limited

(DCP),59

2008-2012

BoardofCorruptionPreventioninState

OfficeoftheNationalAnti-Corruption


EnterprisesandthePrivateSector

Commission

-LeaderProgram,No.6Capital

2008-2009

ChairmanofBoardofDirector

RatchburiElectricityGeneratingHolding

M

arketAcademy

PublicCompanyLimited

-RoleoftheChairmanProgram,

2008-2009

Chairman

EGATInternationalCompanyLimited

21/2009ThaiInstituteofDirector(IOD)

2007-2009

Governor

ElectricityGenerationAuthority

-PublicAdministrationandPublic

ofThailand

LawProgram4KingPrajadhipok’s

2006-2007

DeputyGovernor-Generation

ElectricityGenerationAuthorityof

Institute

Thailand


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

5. M

r. So

mba

t Sar

ntija

ree

-ExecutiveProgram84,Instituteof

2005-2006

DeputyGovernor-Operationand


(C

ontin

ued)

SecurityPhychology

Maintenance

Thailand

2000-2005

AssistantGovernor-PowerPlant1


Thailand

1995-2000

DirectorofW

angnoiPowerPlant


Thailand

6. M

r. Ch

aran

53-M

asterofScience(MajorHROD)

-None

2012-PresentMemberoftheNominationand


L

erth

thee

rapo

j

NationalInstituteofDevelopment


Limited

MemberoftheNomination

Administration,2004

1996-PresentVicePresident

ItalthaiIndustryCompanyLimited

andRemuneration

-BachelorofArts.(General

1994-1997

TheLecturer.

QualityandSafetyCompanyLimited

Committee

M

anagement).

RajamangalaUniversityofTechnology

Thonburi,1990

-Safetyofficercourseinthe

professionallevelSafetyInstitute

-Thegametothecourse.

HRCenterCompanyLimited

7. M

r.Dec

ha C

hool

igor

n50-M

BAMarketingandFinance

-None

2012-PresentMemberoftheNominationand

GunkulEngineeringPublic

MemberoftheNomination

CaseWesternReserveUniversity,

RemumerationCommittee

CompanyLimited

andRemumeration

USAYear1988


IntegratedManagementConsultant

Committee

-BAEconomics,Thammasat

Co.,Ltd.

University

2003-2005

AsistantM

anaingDirector

ThaiRungUnionCarPublicCompany


Limited

(DCP)26/2003

2001-2003

DeputyManagingDirector

AdvancePowerSupplyPublic


CompanyLimited


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

7. M

r.Dec

ha C

hool

igor

n


(C

ontin

ued)


-KeytoSuccessinOrganizationRedesign

-EffectiveManagersProgram

-ProjectFinance

8. A

VM.D

r.Pian

Tota

rong

59-Ph.D.inElectricalEngineering

-None

2012-PresentMemberofTheRiskManagement


MemberofTheRisk

UniversityofPittsburgh,USA.

Committee

Limited

ManagementCommittee

(SupremeCommandHQScholarship)

2012-2013

Advisor(QualitySystemDevelopment)

FoodandDrugQualityControlCenter,

-M

.S.inElectricalEngineering,

MinistryofPublicHealth,LaoPDR

OhioUniversity,USA.(Supreme

2003-2011

DirectorofNationalInstituteofM

etrologyMinistryofScienceandTechnology

CommandHQScholarship)

(Thailand)

-B.Sc.(Honours)inPhysics

2001-2003

DirectorofScience&TechnologyR&D

MilitaryR&DCenter,Supreme

M

ahidolUniversity(M

inistryof

Division

CommandHQ

DefenceScholarship)

1997-2001DirectorofCommunication&Electronic

MilitaryR&DCenter,Supreme

-AirWarCollege,RoyalThaiAirForce,

R&DDivision

CommandHQ

ClassNo.31

-NationalDefenceCollege,

ClassNo.48


(DCP120/2009)ThailandInstitute

ofDirector(IOD)

-AdvancedDefenceManagement,

ClassNo.1AssociationofNational

DefenceCollege


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

9. M

iss S

opac

ha

46-BachelorofNurse

-Wifeof

2012-PresentChiefExecutiveOfficer

GunkulEngineeringPublic

D

hum

rong

piya

wut

SrinakharinwirotUniversity

Mr.Gunkul

CompanyLimited



Dhumrong1998-2012

ManagingDirector


signonbehalfofthe

(DCP)111/2008

piyawut

Limited

Company



GunkulPowergenCompany

ChiefExecutiveOfficer


Limited

ChairmanofRisk

(DAP)70/2008

2000-2010

Director


ManagementCommittee



G.K.AssemblyCompanyLimited

-M



G.K.PowerProductCompanyLimited

OwnersbyPeterHo


G-PowerSourseCompanyLimited



FutureElectricalControlCompany


Limited

-EffectiveSeniorManagercourse


GunkulTradingandAgencyCompany

-RoleofChairman21/2009

Limited


10. M

iss N

arue

chon

29-M

asterofBusinessAdministration

0.01

Daughterof2008-PresentDirector


D

hum

ronp

iyawut

BostonUniversityUSA.

Mr.Gunkul

Lim

ited


-M

asterofM

anagement

Dhumrong2012-PresentDirector

WindEnergyDevelopmentCompany

signonbehalfofthe

HarvardUniversityUSA.

piyawut

Limited

Company

-BachelorofEngineering

2011-PresentAssistantVicePresident

FinansaSecuritiesCompanyLimited

Director/ExecutiveDirector

ChulalongkornUniversity


NoppakunCompanyLimited

VicePresident,Strategic


2010-PresentSeniorAssociate

KasikornSecuritiesPublicCompany

andInvestment

(DAP)70/2008

Limited


2006-2007

ManagementTrainee



Limited


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

11. Mr.

Som

boon

42-M

asterinManagerialAccounting

-None


GunkulEngineeringPublicCo.,Ltd.

A

ueat

chas

ai

ThammasatUniversity




-Diplom

ainAuditing

Limited

signonbehalfofthe

ThammasatUniversity


WindEnergyDevelopmentCo.,Ltd.

Company

-BachelorinAccounting

2010-2012

DeputyManagingDirector



RajamangalaUniversityof

Limited

ManagingDirector

TechnologyPhraNakhon


G-PowerSourseCompanyLimited


2007-2010

AssistantManagingDirector,


(DCP)139/2011

BusinessSupport

Limited





2005-2007

FinancialConsultant

IntegratedManagementConsultant

(DAP)84/2010

CompanyLimited


2004-2005

AssistantGeneralManagerofOffice

ThaiRungUnionCarPublicCompany

-CertificatePrograminInternational

ofExecutive

Limited

TaxLaw,Class1ThaiBarAssociation


SeangunithaiLPGCompanyLimited

-Diplom

aincertifiedinternalauditor,

class1ChulalongkornUniversity

andTheinstituteofinternalauditors

ofThailand


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

12. M

r. Ch

aloe

mpo

n

43-BachelorofArts

-Brotherof2000-PresentDirector


S

richa

roen


Miss

Lim

ited



Sopacha

2008-2009

AssistantGeneralManagerofPrivateSalesGunkulEngineeringPublicCompany

signonbehalfofthe

(DAP) ร

นท 70/2009

Dhumrong

Lim

ited

Company


piyawut

2001-2007

PrivateSalesManager




Limited

-M




OwnersbyPeterHo


FutureElectricalControlCompany


Limited



JaraslutPattanaElectricityCompany

Limited

13. Mrs

. Are

ewan

43-Bachelor’sdegreeinAccounting

-None



R

oonp

raph

an

DhurakijBunditUniversity

Limited



2010-PresentSeniorVicePresident,Factory


signonbehalfofthe

(DAP)70/2008

Limited

Company








SeniorVicePresident,

2008-2010

AssistantGeneralManager,Logistics


Factory

Limited

2007-2008

AssistantGeneralManager,Factory


2003-2007

AccountingManager


1997-2003

AccountingSupervisor


Limited


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

14. Mr.

Papa

ngko

rn


-None

2010-PresentSeniorVicePresident,BusinessSupport


S

akul

vora

karn


Lim

ited

MemberofRisk

2006-2010

AssistantGeneralManager,


ManagementCommittee

BusinessSupport

Limited

SeniorVicePresident

2003-2005

Manager,AccountingDepartment


BusinessSupport

Limited

1997-2003

Manager,AccountingDepartment

UnionPropertyCompanyLimited

15. Mr.

Wor

athe

p


-None

2010-PresentSeniorVicePresident,InternalAudit


L

uang

sirap

ornc

hai


Lim

ited

SeniorVicePresident

-AuditCommitteeProgram(ACP)

2008-2010

AssistantGeneralManager,InternalAudit


InternalAudit

24/2008

Limited

SecretaryofAudit


2003-2008

Manager,InternalAudit


andCorporate

- M

onitoringoftheQualityofFinancial

Limited

GovernanceCommittee

Reporting(MFR)7/2009

1997-2002

AccountingManager



Limited

-M

onitoringoftheInternalAudit

Function(M

IA)4/2008


-M

onitoringoftheSystemofInternal

ControlandRiskManagement

RiskManagement5/2009,



Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

16. M

rs. S

omlu

k Ka

nuen

ghet47-BachelorofArts

-None

2010-PresentSeniorVicePresident,ExecutiveOffice


SeniorVicePresident

SrinakharinwirotUniversity

Limited

ExecutiveOffice




MemberofRemuneration

-PerformanceAppraisalbyBalance



andCompensation

ScoredCardcourse

2006-2010

GeneralManager,ExecutiveOffice


Committee

-CareerPlanning&Development&

Limited

SucessionPlanningcourse

2003-2008

Manager,HumanResourcesDepartment


-SalaryAdministrationforLine

Limited

M

anagercourse

1993-2002

Manager,HumanResourcesDepartment

Packlink(Thailand)Co.,Ltd.

-EffectiveTechniquesforJobAnalysis

&JobDescriptioncourse

-EffectiveTechniquesforJob

Evaluation&SalarySurveycourse

17. Mr.

Tham

rong

41-M

.Sc.(InformationTechnology)

-None

2010-PresentSeniorVicePresident,SalesandMarketingGunkulEngineeringPublicCompany

C

hank

raith

ong

KingMongkut’sInstituteof

Limited

SeniorVicePresident

TechnologyLadkrabang

2011-PresentDirector/SeniorVicePresident,


Sales&Marketing

-B.Sc.(AppliedPhysics)

SalesandMarketing

KingMongkut’sInstituteof

2008-2010

AssistantGeneralManager,


TechnologyLadkrabang

PublicSectorandInternational

Limited


1997-2007

Manager,PublicSector


(DCP)149/2011,

Limited


1995-1997

AssistantManager,PublicSector



Limited

Productivity&Profitscourse

1993-1995

Engineer

ThanarakCo.,Ltd.


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

17. M

r. Th

amro

ng

-Substation&TransmissionLine&

C

hank

raith

ong

(Con

tinue

d)

BuildingBaseConceptcourse

-StringingEquipmentsbyTEMA,Italy

-M

eterTrainingProgrambyGeneral

ElectricCo.,USA

-M

eterTestingEquipmentsby

ZERAElectric,Germany

-EnergyConservationforFactory

-BusinessOpportunitiesinMarketing

EnergyEfficiency

18. M

r. Ph

ongs

akor

n

35-M

.Sc.(ElectricalEngineering)

-None

2010-PresentSeniorVicePresident,Business


D

amno

en

HannoverUniversity,Germany

DevelopmentandSpecialProject

Limited

SeniorVicePresident

-B.Eng.(Telecommunication)


WindDevelopmentCompanyLimited

BusinessDevelopment&

RajamangalaUniversityofTechnology



SpecialProject

-FTTxTechnologycourseKorea


G-PowerSourceCompanyLimited

-RF&OpticalRepeaterforM

obile

2009-2010

Manager,BusinessDevelopmentand


NetworkcourseKorea

SpecialProject

Limited

-OpticalFiberCableQuality

2007-2009

Supervisor,BusinessDevelopmentand


Controlcourse

SpecialProject

Limited

PeopleRepublicofChina

2005-2007

SolutionManager

Jun(Thailand)CompanyLimited

-OpticalFiberCableSpecification

coursePeopleRepublicofChina


Sh

are

Ho

ldin

g

W

orking

Exp

erienc

e du

ring

the

Past

5 Y

ears

Ag

e

Perce

ntage

Nam

e-Su

rnam

e (Y

ear)

Educ

atio

nal Q

ualif

icat

ions

(%

) Re

latio

nshi

p Pe

riod

Posit

ion

Com

pany

18. Mr.

Phon

gsak

orn

-W

indTurbineTechnologycourse

D

amno

en (C

ontin

ued)

PeopleRepublicofChina

-PVConferenceJapan

-Biom

assConferenceUSA.

19. M

r. Ph

udis

Triw

ilask

ul


-None

2011-PresentVicePresident,Logistics


VicePresident

DhurakijBunditUniversity

Limited

Logistics

-SAPUserInterfaceTeamofSiam

2007-2010

Manager,Purchasing


CementGroup(M

odule:MM)

Limited

-EssentialKnowledgeforPurchasing

2005-2007

Manager,SourcingDepartment

L.V.TechnologyPublicCompany

Professionals

Limited

-OverseaPurchasingTechniques

1993-2005

PurchasingSuperviosr

SiamFibreCementCompanyLimited

-PurchasingKnowledgeforCost

Saving

-SelfCertificationScheme

-SupplyChain&Logistices

M

anagement

20. M

iss S

uttir

at

39-DegreeMasterofBusiness

-None

2012-PresentAccountingManager


T

angn

orak

ul

Administration

Limited

AccountingManager


2011-2012

ProjectAccountingManager


-Degree Bachelor’sDegree

Limited

(accounting)

2005-2007

AssistantAccount

KimChongHimTradingCompany


Limited

1999-2005

Bookkeeper

WattanasukInternationalCompany

Limited

1997-1998

AssistantAuditor

SuttithomGrouplawandaccounting

office


�0.� Details Position Titles of Directors in Subsidiary Companies

Nam

e G.K

. Ass

embl

y G.K

. Pow

er

K.N.P

. Sup

ply

Gun

kul P

ower

gen

Win

d En

ergy

Co.

,Ltd

. Pr

oduc

ts C

o.,L

td.

Co.

,Ltd

. Co.

,Ltd

. Dev

elop

men

t Co.

,Ltd

.

Mr.Gunkul

Dhumrongpiyawut

--

-X,I

-

MissSopacha

Dhumrongpiyawut

X,I

X,I

-I

Mr.Somboon

Aueatchasai

--

-I

I

MissNaruechonDhumrongpiyawut

--

--

I

Mr.ChaloemponSrichaloen

--

X,I

--

Mrs.Areewan

Roonpraphan

II

--

-

Mr.PhongsakornDamnoen3)

--

-I

I

Mrs.Somluk

Kanuenghet

II

-

-

Mr.Thamrong

Chankraithong

--

I-

-

Rem

ark

X=Presidnet

1)Mr.SomboonAueatchasai,electedasaDirectorofW

indEnergyDevelopmentCo.,Ltd.onMay15,2012

I=Director

2)MissNaruechonDhumrongpiyawut,electedasaDirectorofW

indEnergyDevelopmentCo.,Ltd.onMay15,2012

3)Mr.PhongsakornDamnoen,electedasaDirectorofW

indEnergyDevelopmentCo.,Ltd.onJUne16,2012

1)

2)


1.Dr.Ekaporn

Rakkwamsuk

1)

X,I,III

2.Mr.Gunkul

Dhumrongpiyawut2)

X.I

X,I,V

I,V

I

I

I

3.Mr.Sathaporn

Kotheeranurak

I,III

I

II

II

II

I

4.Pol.Maj.GenVisitSukarasep

I,III

5.Mr.Sombat

Sarntijaree

I,III

6.MissSopacha

Dhumrongpiyawut

I,II,VX,I,VX,I,V

I,V

I,V

I

I

7.MissNaruechonDhumrongpiyawut

I,II,V

I

8.Mr.Somboon

Aueatchasai

I,II,V

I,V

I,V

I9.Mr.ChaloemponSricharoen

I,II,V

I

I

I

10.Mrs.Areewan

Roonpraphan

I,II,VI,V

I,V

11.Mr.PapangkornSakulvorakarn

V

12.Mr.Worathep

Luangsirapornchai

V

13.Mrs.Somluk

Kanuenghet

VI,V

I,V

14.Mr.Thamrong

Chankraithong

V

I,V

15.Mr.PhongsakornDamnoen

V

I,V

I,V

16.Mr.Phudis

Triwilaskul

V

17.MissSuttirat

Tangnorakul

V

Rem

ark

1)

X=Chairman,President

1)EkapornRakkwamsukhasresignationfromdirectoronOctober1,2012

I=Director

2)Mr.GunkulDhumrongpiyawutwasappointedaChairmanoftheBoardfromBoardofDirectorsmeetingNo.7/2012onNovember9,

2012replaceDr.EkapornRakkwamsukเอกพรรกความ ขทลาออกเมอวนท1ตลาคม2555

II=ExecutiveDirector

3)Mr.SombatSarntijareewasappointedadirectorfromBoardofDirectorsmeetingNo.7/2012onNovember9,2012

III=AuditCommittee/IndependentDirector

V=Executive

Nane

�0.3 Details Position Titles of Directors and Managements

บรษท

บร

ษทยอ

ย บร

ษททเ

กยวข

อง

Gunkul Engineering PCL

G.K.Assembly Co.,Ltd.

G.K.Power Products Co.,Ltd.

K.N.P.Supply Co.,Ltd.

Gunkul Powergen Co.,Ltd.

Wind Energy Development Co.,Ltd.

Gunkul Group Co.,Ltd.

Future Electrical Control Co., Ltd.

Gunkul Trading and Agency Co., Ltd.

Kulnatee Co., Ltd.

Gunkul Engineering (2000) Co., Ltd. Gunkul Marine Line Co., Ltd.

Jaraslat Pattana Electrical Co., Ltd. G.M. Supply and

Construction Co., Ltd.

Sungora Co., Ltd.

DBMT Co., Ltd.

Interlink Communication Public Co., Ltd. Surapon Foods Public Co., Ltd.

Star Sanitaryware Public Co., Ltd.

Sahaporn and Co Co., Ltd.

S.V. Evergreen Co., Ltd.

Kaset Thai International Sugar Corporation PLC.

Sanguthai Gas LPG Co., Ltd.


��. General Information

��.� General Information

Company’s Name :GunkulEngineeringPublicCompanyLimited

Stock Quote :GUNKUL

Company Registration : 0107552000146

Head Office Address : 1038-1046NakornchaisriRoad,Nakornchaisri,Dusit

Bangkok10300

Telephone Number : 0-2242-5800

Fax Number : 0-2242-5818-9

Website : www.gunkul.com

Email : [email protected]

Type of Business :Manufacturingandsupplyingelectricalproducts&

renewableenergyproducts,Generatingelectrical

powerfromrenewableenergyresources.

Sector : Energy&Utilities

Industry : Resources

Type of Issued Shares : Commonshares

Registered Capital : 440,000,000.00Baht

Paid-up Capital : 439,999,984.00Baht

Par Value : 1Baht


��.� Subsidiaries

Type of

Registered Paid-up Holding % Company Name Capital

Capital Par Value Capital of

Business (Baht) (Share) (Baht) (Share) Holding

1.G.K.AssemblyCo.,Ltd. Manufacturing 200,000,000 2,000,000 100 1,999,998 99.99

(GKA) ElectricalProducts

2.G.K.PowerProducts Manufacturing 100,000,000 100,000 1,000 99,998 99.99

Co.,Ltd.(GKP) ElectricalProducts

3.K.N.P.SupplyCo.,Ltd. Supplying 50,000,000 500,000 100 499,998 99.99

(KNP) ElectricalProducts

4.GunkulPowergenCo.,Ltd. Generating 992,000,000 9,920,000 100 9,919,995 99.99

(GPG) ElectricalPower

5.WindEnergyDevelopment Generating 179,900,000 17,990,000 1012,592,998 70.00

Co.,Ltd.(WED) ElectricalPower

��.3 Joint Venture

Type of

Registered Paid-up Holding % Company Name Capital

Capital Par Value Capital of

Business (Baht) (Share) (Baht) (Share) Holding

1.G-PowerSourceCo.,Ltd. Manufacturing 930,000,000 9,300,000 100 3,719,998 40.00

(GPS) ElectricalProducts


��. Nature of Business

��.� Changes and Development of the Company and its subsidiaries are as follows:

Year1982 -Gunkul EngineeringCo., Ltd. foundedwith registered capital of 1.00millionbaht to importanddistributeproducts for theelectricalequipment. (Currentregisteredcapital:440millionbaht)

Year1992 -EstablishmentofG.K.AssemblyCo.,Ltdwithregisteredcapitalof2.00billionbahttoproduceequipmenttoassembletheelectricitygridandequipmentforstreet lamps, distributing to customers within the country and abroad.(Currentregisteredcapital:200millionbaht)

-Establishment of G.K. Power Product Co., Ltd. (formerly known as Kerney(Thailand) Co., Ltd.), with registered capital of 2.60 million baht, producingequipmentforsafetyandcontrolofthegridsystem,distributingtocustomers,bothdomesticallyandabroad.(Currentregisteredcapital:100millionbaht)

Year1993 -EstablishmentofK.N.P.SupplyCo.,Ltd.withregisteredcapitalof1.00millionbaht, to be a distributor of electrical products to government agencies.(Currentregisteredcapital:50millionbaht)

Year2009 -The companies restructured as a group holding company with the GunkulEngineering Company Limited acquiring 99.99% of shares in G.K. PowerProductCo.,Ltd.,G.K.AssemblyCo.,Ltd.,andK.N.P..SupplyCo.,Ltd.

-GunkulEngineeringCo.,Ltd.increaseditsregisteredcapitalfrom300millionbahtto400millionbahtandchangedtheparvalueofordinarysharesfrom100bahtpershareto1bahtpershare.

-Thecompany transformed intoapubliccompanyandchanged itsname to“GunkulEngineeringPublicCompanyLimited(PCL)”.

-Establishment of Gunkul Powergen Co., Ltd.With registered capital of 100million baht to produce and sell electricity from renewable energy. (Currentregisteredcapital:992millionbaht)

-The Company was appointed by the Shanghai Electric Wind PowerEquipment Company Limited as the sole distributor of wind turbines inThailand,MyanmarandLaos.


Year2010 -On11-13October2010,thecompanyopenedtothepublicforsharesales(Initial PublicOffering) of 100,000,000 shares representing 25.00 percent ofthetotalnumberof400,000,000ordinaryshareswithparvalueofBaht1persharesaleprice,soldat5.40bahtpershare.

-On October 15, 2010, The Stock Exchange of Thailand added GUNKULsecuritiesasnewsecuritiesontheStockExchangeofThailand.

-OnOctober19,2010,GUNKULsecuritiestradedontheStockExchangeforthefirstday(FirstDayTrade).

-On November 19, 2010 the Company acquired the common stock ofGPowerSourceCo.,Ltd.,whichoperatesintheproductionanddistributionofelectricity from solar energy and is a party to the Provincial ElectricityAuthority (PEA). The company has power purchase agreements of fourcontractsforatotalof26MWandhasreceivedsupportfromtheelectricalsection (Adder) 8 baht per unit, by the Company to purchasing ordinarysharesof9,898sharesat6,500bahtpersharetotalling64,337,000baht,or98.98 percent stake of the registered share capital 1million baht (Currentregisteredcapital:750millionbaht)

-Gunkul Powergen Co., Ltd. signed 5 contracts of power purchasingagreements with the Provincial Electricity Authority for the solar powersystem,totallingthesizeof30.9mwforaperiodof25years.Theprojectwillbenefit from the sale of electricity while gaining the additional cost frompowerpurchase(Adder)fromtheProvincialElectricityAuthorityof8bahtperunit for a period of 10 years, including such projects to benefit theinvestment promotion agency of the Board of Investment (BOI), with theprojectdetailsasfollows.

Size Place of project Expected to Project (MW). (Where applied for permit). distribute electricity

1 3.0 A.Chondaen,Phetchaboon January2011

4.4 A.Chondaen,Phetchaboon October2011 2 8.0 A.Srichula,NakhonNayok WithinMarch2013 3 8.0 A.WichianBuri,Phetchaboon WithinMarch2013 4 4.5 A.NoenPo,Phichit WithinMarch2013 5 3.0 A.Buengsampun,Phetchaboon* WithinMarch2013

* The relocation fromNoungsueDistrict, Pathumthani because of severe flooding

ontheyear2012.


Year2011 -On March 25, 2011, the Company signed a letter of intent to beginconstruction of 8 MW solar power plant. Supplying solar panels as thefoundation,selectionofappropriatetechnologyandinstallationofallsystemsthat will supply electricity to the system (To produce electricity from solarenergy in theSuphanBuriProvince),withSolartaCo., Ltd. (a joint venturebetween Yanhee Solar Power Co.,Ltd, and Ratchaburi Electricity GeneratingHolding Public Company Limited with the contract value of approximately752millionbaht.

-OnJune13,2011, thecompanysigned theSolarPowerPlantconstructioncontractof8MW(consistingof5MWcontract,2MWcontractand1MWcontract)withSolartaCo.,Ltd.With the contract value as abovementionedLetterofIntentsignedonMarch25,2011

-On September 1, 2011, the Company signed a letter of intent to beginconstruction of 8 MW solar power plant, to supply solar panels to thefoundation,selectionofappropriatetechnologyandinstallationofallsystemsthatcansupplyelectricitytothesystem(solarpowergenerationprojects intheprovinceofBuriRam)withtheCompany,C.K.andSunEnergy(Thailand)Ltd.,acontractvalueabout752millionbaht.

-OnJune6,2554,GPowerSourceCo.,Ltd.supportedacreditlinefromTiscoBankLimited,amountingto4,403.60millionbahtfortheconstructionofa26MWsolarpowerplant.

-September 22, 2011 Gunkul Powergen Co., Ltd. received support for thefacilityfromSiamCommercialBankPublicCompanyLimitedfortheamountof2.4358billionbahtfortheconstructionofa30.9MWsolarpowerplant.

-OnNovember2,2011theCompanysignedaMemorandumofUnderstandingon the 1000 MW Development of Wind Energy with the Department ofEnergy.Myanmar.StudyLocation isMonState,KayinStateandTanintharyiStateinMyanmar.

-G-PowerSourceCo.,Ltd.,whichhasapowerpurchaseagreementwiththeProvincial ElectricityAuthority including four contracts, totaling 26MW, hascompletedfourprojectswithdetailsasfollows:


Size Place of project Expected to Project (MW). (Where applied for permit). distribute electricity

1 6.5 A.BanphotPhisai,NakhonSawan March2012

2 6.5 A.BanphotPhisai,NakhonSawan March2012

3 6.5 A.Sankhaburi,ChaiNat March2012

4 6.5 A.Buengsampun,Phetchaboon* February2013

* TherelocationfromKlongluangDistrict,Pathumthanibecauseofseverefloodingon

theyear2012.

Year2012 -On 30 March 2012, the Company sold 4,500,000 common shares ofG-PowerSourcesCo.,Ltd.,toElectricityGeneratingPublicCo.,Ltd.foranamount of 629,92 million baht, or equal to 60% of 750.00 million bahtregisteredcapital.G-PowerSourcesundertakesbusinessofproducingandselling solar-based electricity is a contractual party of 4 electricity saleagreementswiththeProvincialElectricityAgency,totalcapacityof26mw,andeligibleforanaddersubsidyof8bahtkWh.

-On15May2012,theCompanybought5,460,000commonsharesofWindEnergyDevelopmentCo.,Ltd.fromImpactEnergyAsiaLtd.atthepriceof95.60baht/share,totaling522millionbaht,equivalentto70.00%ofthethen78.00 million baht registered capital (current registered capital is 179.90millionbaht).WindEnergyDevelopmentundertakesbusinessofproducingandsellingwind-basedelectricity,isacontractualpartyof3electricitysaleagreementswiththeProvincialElectricityAgency,totalcapacityof60mw,andeligibleforanaddersubsidyof3.5bahtkWh

-On 2 May 2012, G-Power Sources Co., Ltd. increased its capital from750.00millionbahtto930.00millionbaht.

- In July 2012, the Company launchedNapier grass demonstration plot forenergyutilization, focusingonattainingmaximumbenefit from the landofitswindenergyprojectaswellasgeneratingincomeforfarmersaroundtheproject. This activity also supported the government policy concerningNapiergrassplantinginThailand.

-On28September 2012,WindEnergyDevelopmentCo., Ltd. increased itscapitalfrom78.00millionbahtto179.90millionbaht.


��.� Business Structure

Perspective of the group business structure.

TheThaipowersystemconsistsoftwomaincomponents:

1. ElectricityProduction

2. Transmissionanddistribution

Thetransmissionofelectricity frompowerplantstoconsumersmustgothroughthevarioussub-systemsincludingthehighvoltagegrid,powerstationsystem, the distribution system, and underground cables, as shown in thediagrambelow.

Diagram show electric transmission and distribution system of Thailand

Gunkul Engineering Co., Ltd Group (PCL), the leading supplier ofequipment for power systems and renewable energy systems, covering in allstages of transmission and distribution of electricity from power plants toconsumers with goods. More than 5,000 items to meet the needs andcharacteristicsofthedifferentcustomergroups.Boththehouseholdleveltothemacro level of government, the Group has expanded its business into themanufactureandsaleofelectricity fromrenewableenergyaswell.TheGroupcomprisestheCompanyanditssubsidiarycompaniesasfollows:6.


1) Gunkul Engineering Public Company Limited : GUNKUL.

Providing and distributing equipment for electrical systems andrelated systems, including accessories for power generation fromrenewable energy, for distribution to the group of customers of thecompany. The products that the company distributes are manufacturedboth by the Group and produced by other operators, both locally andabroad. And, renewable energy power plant construction. TheCompanyhasatotalregisteredcapitalof440.00millionbaht.

2) G.K. Assembly Company Limited: GKA

Street lighting equipment and accessories such as handlingtransmission lines (Preformed), cable spacers, and hardware Includingproduction ofMountingStructure for the solar plant under the differentbrands of the Group, GUNKUL, GK, ZIMLUG, PIGMAN, TOPWELD andZIMTAP.TodistributetoGunkulEngineeringPublicCompanyLimitedandK.N.P.Supply Co., Ltd. with a current total registered capital of 200.00millionbaht.

3) G.K. Power Products Company Limited : GKP

Product ion of equipment and control systems for powertransmission and distribution lines under the the Group’s brands“GUNKUL” and “GK”.By focusingon the safety equipment and joiningsystems such as electrical wiring, fuses and switches to distribute toGunkul Engineering Public Company Limited and K.N.P.Supply Co., Ltd.withcurrenttotalregisteredcapitalof100.00millionbaht.

4) K.N.P. Supply Company Limited: KNP

Distribution of electrical system equipment and other systemsrelated to public sector customers directly. Acting as a contactor andparticipating in thebidding for theprocurementof thevariouscustomersegments. The main customers being the PEA and MEA, with a totalregisteredcapitalof50.00millionbaht.


5) Gunkul Powergen Company Limited: GPG

Theproductionanddistributionofelectricityfromrenewableenergyusing renewable solar energy. For distribution to the PEA. There are atotalregisteredcapitalof992.00millionbaht.

6) Wind Energy Development Company Limited : WED

The production and distribution of electricity from renewable energyusing renewableWind energy. For distribution to the PEA. There are atotalregisteredcapitalof179.90millionbaht.

The company’s products can be classified into five categories based on theusageasfollows:

1) Protection and transmission system control equipment and anddistribution lines includingpowercutswitch(DisconnectingSwitch), loadbreakswitches,gasswitches(SF6GasLoadBreakSwitch),andairbrakeswitch,transformerfusefusecut-out,SurgeArrester,LivepartcoverandGroundingsystem.

2) Transmissionanddistributionlinesequipmentincludingcables(Cable),toholdthelinepieces(Preformed)cablespacers(CableSpacer),connectordevice (Connector), device on the cable (Cable Termination), a cableconnection(CableSplicing),electricalinsulators(Insulator).

3) Tools and equipment including safety belts, electrical rubber gloves,industrialgloves,helmets,instrumentationandtestingequipment.

4) Streetlightingequipment, includingstreetlamps,controlswitches(PhotoControlSwitch) anda street light control relays (Street LightingControlRelay).

5) Groupofequipment for thesystemof renewableenergy, includingwindturbines,solarenergyequipmentandsolarcells,hydroturbine,generator,transformer,controlequipmentetc.


Diagram shows business conduct structure of the group of companies

1) Business to produce, supply and sell equipment for electrical system and alternative energy system

2) Business to produce and distribute electricity from renewable energy resources

3) Business to construct alternative energy power plant

Ä Ä Ä Ä

Ä Ä

Produce for sell Supply for sell

GKA GKP Produces of equlpment for electrical system KNP Sell Product Public Sector Private Sector Oversea Customers Customers Customers

Ä

Power Plant Owner

Producers of equipment Sub-Contractor Engineering Electrical System Consultants

Ä

Electricity Authority

Ä

Produce electricty from renewable energy resources

Sell electricity


ThediagramshowsthestructureofthebusinessoftheGroupsuggestingthattheGroup’scorebusinessisdividedintothreepartsasfollows.

1) Production and supply of equipment for power systems and renewableenergysystems.

2) Manufacture and sale of electricity generated from renewable energyresources.

3) Constructionofrenewableenergypowerplants.

Thecustomergroupisdividedintothreegroups including,publicsectorclients, private client group and international customers. Each group can bestructuredasfollows.

The revenue of the company by the business.

20101) 20111) 20121)

Million Million Million Type of income baht % baht % baht %

1. Incomefromproductionand

supplyofequipmentforpower

systemsandrenewableenergy

1.1 Provisionsfordistribution. 986.76 76.02 1,763.88 66.10 1,099.66 23.08

1.2 Productionforsale. 302.00 23.27 365.29 13.68 706.24 14.82

Total 1,288.76 99.08 2,129.17 79.78 1,805.90 37.91

2. Incomefromproductionandsale

ofelectricityfromrenewableenergy

- Manufactureandsaleof

electricityfromsolarenergy - - 72.50 2.72 168.81 3.54

3. Incomefromconstructionof

renewableenergyplants - - 449.84 16.86 2,318.06 48.66

Otherrevenues2) 9.31 0.92 17.19 0.64 471.11 9.89

Total revenue 1,298.07 100.00 2,668.70 100.00 4,763.88 100.00

1) Data from the Group’s consolidated financial statements as of December 31, 2012 with GunkulEngineeringPublicCompanyLimitedholdingsharesinG.K.AssemblyCo.,Ltd.,G.K,PowerProductsCo.,Ltd.,K.N.P.SupplyCo.,Ltd.,andGunkulPowergenCo.,Ltd.of99.99percentandholdingsharesandholdingsharesofWindEnergyDevelopmentof70percent.

2) Other income, including interest andprofit ondisposal of assets, foreignexchangeprofits, gainonsaleofscrapetc.


The revenue of the company by customers

20101) 20111) 20121)

Million Million Million Income baht % baht % baht %

1. Publicsectorclients

1.1 Revenuefromelectricity

andrenewableenergy

equipment 448.44 34.80 417.07 15.73 581.84 13.55

2. Privateclientgroup 239.96 18.62 866.62 32.68 3,107.06 72.38

3. Foreigncustomers 600.36 46.58 1,367.82 51.59 603.87 14.07

Total revenue 1,288.76 100.00 2,651.51 100.00 4,292.77 100.00

1) Data from the Group’s consolidated financial statements as of December 31, 2011 with GunkulEngineeringPublicCompanyLimitedholding shares inK.N.P.SupplyCo., Ltd.,G.K,PowerProductsCo.,Ltd.,G.K.AssemblyCo.,Ltd.,andGunkulPowergenCo.,Ltd.of99.99percentandholdingsharesinWindEnergyDevelopmentCo.,Ltd.of70percent.

Business Goals.

In2012,theCompanyaimstoconductbusinessdefinedasfollows.

1. Retain key customers, including the Provincial Electricity Authority,Metropolitan Electricity Authority, Electricity Generating Authority ofThailand,Privatebusinesses,bothdomesticallyandinternationallywiththePower Authority of the Union of Myanmar, Lao People’s DemocraticRepublic,MalaysiaAndVietnam.

2. Expand customer base, both domestic and internationally to increasemarketshare

3. Providenewproductstomeetcustomerneeds

4. Expansion of renewable energy, including the acquisition of the powerpurchase agreement, joint ventures with other operators who havecontractstosupplyelectricityorrenewableenergyconsultation.

5. To build solar power plant to be completed by the power purchaseagreementsmadewiththeProvincialElectricityAuthority

6. The construction of power plants and wind power, both within andoutsidethecountry


7. The study and construction of power plants, biomass and biogas. OfNapiergrass.InThailand.Anditsneighbors.

8. Implementationofrenewableenergyinvestmentsinneighbouringcountries

9. Addbusinesspartnerstoenhancebusinesssecurity

10. Enhanced functionality to support the expansion of business by theintroduction of advanced technology applications such as networking intheenterpriseinformationsystem,throughvideoconferencing

11. Developstaffabilitytokeeppacewiththegrowthofthecompany

12. IncreasetheCorporateSocialResponsibility(CSR)ofthecompany

Business Goals in 3-� years

Industrialpowersystems,bothathomeandabroadare likelyto increasedueto the recovery after the economic crisis.With awareness about renewable energy,which issupportedbyinvestmentfromtheprivatesectorandgovernmentagenciesinvolvedintheindustryincludingtheMinistryofEnergyandtheElectricityGeneratingAuthority of Thailand and the Provincial Electricity Authority. For this reason thecompany has a policy to expand the use of renewable energy to meet thegovernment’sbudget,focusingonrenewableenergy,solarenergyandwindpowerasthe main types. In addition to this, increasing the readiness of the company, it’sfinances, reliability and it’s potential. After being a company listed on the StockExchange of Thailand, the company has received interest from several investors.Management’s policy is to keep the plants within the company, developing newproducts for the electrical equipment under its own brand, Gunkul, to increase itscompetitiveness inthemarket forhighvoltageequipment.Thecompanyalsohasapolicy of expanding the market to supply electricity to other countries. Our mainfocus is to supply quality products from the factories under the company brandGUNKUL that will be tested in accordance with international standards. Thecompany’sgoalistobuildthebrandGUNKULtobeacceptedinothercountriesashavingproductsofgoodquality, reliable andcost-effective. Inorder toavoidpricecompetitionwithproducts fromothercountrieswherepotentialcostsandwages inmanufacturing are lower, such as China, India or Vietnam, the implementation ofthese policies will be implemented in conjunction with the development of humanresources, taking into account the principles of good governance and socialresponsibilityasbeinghighlyimportant.


�3. Industry overview and competition

Industry overview

• Overview of the Electricity System in Thailand

Parties involving in the industry of electrical power and systemproduction inThailandcanbedividedinto3maingroupsasfollows:-

1) Power producers

Manufacturers of electrical systems in Thailand can be divided into 6groups, i.e. theElectricityGeneratingAuthorityofThailand,major independentpower producers (IPP), small power producers (SPP), very small powerproducers (VSPP), other producers including government agencies like theDepartmentofEnergyandEnergyConservation thatproduceelectricalpowerfromsmallhydropowerdams,andtheimportofpowerfromforeigncountries.

The Electricity Generating Authority of Thailand (“EGAT”) serves as thecountry’s largest power producer, the largest purchaser of electrical powerproduced by othermanufacturers, as well as the importer of electricity fromneighboringcountries,namelyLaosandMalaysia.EGATdeterminestheamountof power eachpowerplant has to supply to national transmission system tomeettheelectricitydemandineachperiod.

2) Power suppliers

TheElectricityGeneratingAuthorityofThailandisthesupplierofelectricalpowerto2stateenterprises, i.e. theMetropolitanElectricityAuthority (“MEA”)and the Provincial Electricity Authority (“PEA”) that are responsible fordistribution of electricity to industrial sector, business sector and householdsector around the country. EGAT supplies electrical power directly to somecustomersaswell.

In electricity transmission frompower plants toMEA andPEA requires,thevoltagemustberegulated to reduceanypower lossduring long-distancetransmission of electricity. Then MEA and PEA transmit electricity to usersthrough the voltage transmission system. MEA is responsible for electricitytransmissioninBangkok,NonthaburiandSamutPrakan.PEAisresponsibleforelectricitytransmissiontoareasotherthe3provinces.Inelectricitytransmissiontoendusers,thevoltagemustbereducedtolevelsuitableforuse.


3) Consumers

Consumers consist of industrial sector, business sector and residentialusers,etc.

In2012,peakdemand forelectricity inEGATsystemwasat2.30p.m.on26April2012,at26,121.1mw, increasing from23,900.2mwpeakdemand in2011by2,220.9mworby9.24%.NetdemandofEGATelectricityforthefirst5yearsof2012(January-May)amountedto71,698.4millionunits,increasingby6,146.4millionunitsorby9.38%from65,552.0millionunitofnetdemandin2011.

According to forecast by the Office of the National Economic and SocialDevelopmentBoard(NESDB),economywastoexpandby5.5%duetoacceleratingdomestic demand, particularly higher household spending that corresponded tohigherincome,andeconomicstimulusmeasurelikethefirstcarpolicy.Inthisregard,the Energy Policy and Planning Office (EPPO) reported that national energyconsumption had increased, with total value of 2.129 trillion baht, increasing from1.947trillionbahtoflastyear’sconsumptionby9.4%.Consumptionofoilincreasedby6%,ofelectricityby16.3%,ornaturalgasby26.3%,ofligniteandpeatby5.1%,andofrenewableenergyby3.9%.

Concerningnationalelectricityproduction, installedgeneratingcapacity in2012was at 32,290mw, 47%ofwhichwas by EGAT, 39%by IPPs, 7%bySPPs, andanother7%byimportandexchange.ThePeakdemandwasat2.30p.m.on26April,at26,121.10mw,increasingby9.24%whencomparedtolastyear.Nationalelectricityconsumption totaled 161,500 kw per hour, increasing by 8.5% because of torridweather in April along with recovery of large-scale business sector and householdsector after late-2011 flood.Consumption inMEAareas increasedby8.7%, inPEAareasby8%andbydirectclientsofEGATby5.7%.Asforconsumptionaccordingtotypeofusers,consumptionforhouseholdincreasedby10.5%,forbusinesssectorby7.9%andforindustrialsectorby8%asaresultofpost-floodeconomicrecovery.FTcharges in 2012 improved from 0 satang/unit in early 2012 to 48 satang/unit inSeptember-Decemberinlinewiththeriseinfuelprices.

Source:TheEnergyPolicyandPlanningOffice,MinistryofEnergy

Source:www.thanonline.com


• Overview of electricity system in related private sector

The Company’s private sector clients related to electrical systems aregenerally adiversegroupof clients, e.g. companies in theconstructionof thepower system, public transport industry, electrical and telecommunicationsindustry. However, when considering only large private sector projects, it wasfounded that projects by big private sector related to or supported bygovernment. The government’s stimulus plan, especially investment instate-initiated infrastructures such as BTS and BRT projects, with a totalinvestmentofmorethan800,000millionbahtwithin20years,hasinfluencedtheprivatesectorinvolvedinsuchinvestments.Theseprivatecompaniesinvolvinginsuch investment are to increase their investments . The Company itself seeswindow of opportunities in providing electrical equipment related to powertransmissionstotherailsystem,forexample,electricalprotectiondevices,cableterminationequipmentandcableconnectingsets,equipmentgroundingsystemsandotherequipmentrelatedtothesupplyofelectricityelectricrailsystems.

• Overview of Electrical System of Myanmar

GunkulEngineeringPublicCompanyLimitedhasbeensupplyingelectricalequipment for substation system, transmission line system, distribution linesystemtoclientsintheUnionofMyanmarsince1997,totaling16years.Mostof its clients are government agencies, e.g. the Ministry of Electric Power,YangonElectricitySupplyBoardandWaterResourceUtilityDevelopment.TheCompany’ssalesvolumeamountstoapproximately110millionUSdollar.

IndoingbusinesswithMyanmargovernmentagencies,theCompanyhasprevented risks from foreign exchange by dealing transactions in foreigncurrencieslikedollarandeuro,whicharealsousedinpurchaseofgoods.TheCompany obtains letters of credit directly from government agencies, thusbearingnorisksofunsuccessfulcollection.

AfterMyanmarunderthedemocraticgovernmentofPresidentTheinSeinbecameopenfortradeandinvestmentandhasbeenvisitedbyleadersofthesuperpowers like the US and European nations that once boycotted thecountry, investorsfrommanycountrieshaveconfidence inMyanmar.Althoughitsregulationsconcerninginvestmentarenotcompletelyclear,thegovernmentiskeentoamendrelatedlawsandregulationstoencouragemoreinvestments.


Myanmar’sdemand forelectricityhas risenbecauseofgreater inflowofinvestments after the opening up to outside world. At present, the country’selectricitygeneratingcapacity isabout3,000mw,whichis9timeslowerthanThailandthathascomparablenumberofpopulation. Inaddition to insufficientgenerating capacity in the future, Myanmar government gives priority toexpansionandimprovementofsubstationsystem,transmissionlinesystemanddistributionlinesystem.

Outlook for power generation industry and electrical system in Thailand

Thailand Power Development Plan for 2012-2030 (Revision 3) has beenformulatedwithintheframeworkofnationalenergypoliciesasfollows:-

1) The20-YearEnergyEfficiencyPlan,whichtargetsto“reducetheratioofenergyconsumption to GDP by 25% within 20 years (2011-2030),” resulting inprojections of declining power demand of the country due to energyconservationschemeandenergyefficiencypromotion.

2) The 10-Year Alternative Energy Development Plan (AEDP 2012-2021), whichtargetsto“userenewableenergyandalternativeenergyinsteadoffossil fuelsby at least 25% within 10 years,” resulting in replacement of some powerplants that are based on fossil fuels, such as coal and natural gas, byrenewableenergypowerplants.

In addition, the government has policies to stimulate economy, causingthegrowthrateprojectionorGDPexpansionofThailandtoimprove.However,netpeakpowerdemand in2030 is forecast tobeapproximately52,256mw,decreasingfromthatofthepreviouseditionby3,494mwor6.27%.

Addedpowergeneratingcapacityduring2012-2030canbesummarizedasfollows:-

- TotalcapacityasofDecember2011 32,395mw

- Totaladdedcapacityduring2012-2030 55,130mw

- Totalretiredcapacityduring2012-2030 -16,839mw

- Grandtotalcapacityasof2030year-end 70,686mw


Power demand forecast based on national economic growth or GDPassumptionsfor2011-2030bytheNationalEconomicandSocialDevelopmentBoard dated 29 November 2011, which has also taken into account thegovernmenteconomicstimuluspolicyalongwiththeeffectsofthegreatfloodinlate2011,canbesummarizedasfollows:-

Table: Economic forecast for 2011-2030

Year 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

GDP 1.5 5.0 5.1 5.7 6.0 5.1 4.7 4.1 4.2 4.3

Year 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

GDP 4.2 4.1 4.0 4.0 4.0 4.0 3.9 3.9 3.8 3.8

With the government policy targeting on increasing the share ofrenewable energy and alternative energy instead of fossil fuel by 25%withinthe next 10 years, Thailand Power Development Plan has added in it therenewableenergypowerplantsof14,580.4MW.Whenincludethesaidcapacitytoexistingcapacityof6,340.2mwanddeductiblebyretiredcapacityof374.3mw,thenetelectricitygenerationfromrenewableenergyattheendoftheplanin 2030 will be 20,546.3 mw, accounting for 29% of total system capacity,dividedintodomesticrenewableenergyof13,688.30mwandrenewableenergyfromneighboringcountriesof6,858mw,asfollows:-

Type (unit : mw) 2012-2021 2022-2030

Solarpower 1,806.4 1,995.7

Windpower 1,774.3 199.4

Hydropower(domesticandimport) 3,061.4 2,742.5

Biomass 2,378.7 223.5

Biogas 22.1 24.1

Solidwaste 334.5 17.8

Total 9,377.4 5,203.0

Source:TheEnergyPolicyandPlanningOffice,MinistryofEnergy


The added power generating capacity during 2012-2030 will be 55,130mw,classifiedbytypesofpowerplantsasfollows:-

1) Renewable energy power plants 14,580 mw

-Domestic 9,481 mw

- Purchasedfromabroad 5,099 mw

2) Cogeneration power plants 6,476 mw

3) Combined cycle power plants 25,451 mw

4) Thermal power plants 8,623 mw

- Clean-coalpowerplants 4,400 mw

- Nuclearpowerplants 2,000 mw

- Gasturbinepowerplants 750 mw

- Purchasedfromabroad 1,473 mw

Total 55,130 mw

Overview of the business

• Business of electrical equipment

GrowthoftheCompany’sbusinessisdirectlyrelatedtotheexpansionoftransmission and distribution of electricity, which depend on the demand forandsupplyof electricalpowergeneration inThailand.Relatedagencies, suchasEGATandEPPO,areresponsibleforforecastingfutureelectricitydemandofthe country in the future and setting framework of the capacity developmentplan in order to support further planning of various development projects toaccommodate increasing demand for electricity in the future. Information ofelectricitysystemdevelopmentandexpansionportraysthegovernment’skeenandcontinual investmentselectricityprojects thatworthmore thanahundredbillionbaht.Asa result, theelectricalequipmentbusiness inThailand isonagrowingtrendaccordingtothepolicies.

TheelectricalequipmentbusinessintheCompany’smainexportmarkets,theUnionofMyanmar inparticular, tends togrowcontinuallyaswell.This iscontributed by construction of infrastructure and utilities for electricitymanufacturinganddistributioninordertosupportnationaleconomicexpansionduring 1985-2008. In this regard, the Union of Myanmar has invested in 21projectsofmulti-scalevoltagedistributionsystemswithtotaldistanceof1,946


kilometers,and12projectsofsubstationconstructionwithtotalproductionanddistribution capacity of 1,450 mega volt ampere. In addition, Myanmargovernment plans to expand electricity production and distribution to otherpartsofthecountrybymakingadditional investments in41projectsofmulti-scalevoltagedistributionsystemswithtotaldistanceof8,454kilometersand8projects of substation construction with total production and distribution of4,000megavoltampere in thenear future.Asa result,demand forelectricalsystemequipmentintheUnionofMyanmarisonasteadilygrowingtrend.

• Business of renewable energy equipment

Growth of the Company’s renewable energy equipment business isdirectly related to the renewable energy investment promotion of governmentsector. In thepast2-3years, thegovernmenthasbeensupporting renewableenergybusinessesthroughvariouspolicies,forexampletheAddersubsidyforpurchase of electricity generated by renewable energy and the addition ofelectricity-generatingmegawindturbineinstallationprojectinthe10thThailandPower Development Plan for 2010-2030, etc. As a result of government’ssupport and promotion of renewable energy business, the renewable energyequipmentisonagrowingtrend,withgovernmentsectorbeingtheleaderandsupporterofinvestment.

• Business of producing and slinging electricity generated by renewable energy

Trend in production and sale of electricity from renewable energy inThailand is in the same direction as renewable energy equipment business.However, it must rely on the government’s investment because the cost ofgeneratingelectricityfromrenewableenergyishigherthanelectricitygenerationfromotherfuels.Electricitygenerationfromsolarenergycostsashighas8-10bahtperunit,sotheproductionandsaleofelectricityfromrenewableenergyarenotworthinvesting.Theproductionofelectricityfromrenewableenergyinthe past was thus done by using waste materials such as solid waste, ricehusks, or bagassewhichwereof lower costs. The capacity is quite lowandsufficient just for limiteduse, so theelectricity of this kindwascommercially


produced for sale.However, the government’s supportive schemes, especiallythe 2009 Plan’s Adder subsidy for purchase of electricity generated fromrenewableenergy,havemadeelectricalpowerproducersandvariousbusinesssectors become more interested in investing in electricity generation fromrenewableoralternativeenergies,withaimtoproduceforsale togovernmentagenciesthathavepurchasingquotasforelectricitygeneratedfromrenewableenergy.

Asforproductionandsaleofelectricityfromsolarenergy,ThailandPowerDevelopment Plan for 2012-2021 shows that solar-based electricity underThailand’s electricity objectives is as high as 20% of the total 9,377.4 mwelectricity from renewableenergy,orequal to1,806.4mwcapacity.Moreover,Thailandisacountrythathasthepotentialtoproducequitehighamountsofsolar-basedelectricity,sinceitislocatedneartheequatorandexposedtothesun throughout theyear.With these factors,solar-basedelectricityproductionandsellingbusinesstendstogrowsteadilyinthefuture.

• Business of construction of renewable energy power plants

The government’s promotion of electricity from renewable energyincludingThailand’spotentialtoproduceelectricityfromrenewableenergyhaveattracted the interest of domestic and oversea companies to invest in thebusiness of producing electricity from renewable energy. Therefore, theCompany’s renewable energy power plant construction business will grow inline with sizes and quantities of such renewable energy power plants. Asmentionedabove,productionofelectricityfromrenewableenergyinThailandisstill in its infancy and will grow more extensively owing to Thailand PowerDevelopmentPlanfor2010-2030(Revision3).

Competition

• Businesses of manufacturing, supplying and selling equipment for electrical system and renewable energy system

TheCompany’smain clients are government agencies, state enterprisesand large private companies. In general, customers will set criteria forqualificationsoftheoperatorswhoattendprojectbiddingsaswellasconsider


the potential and experience of each bidder in supplying equipment forprojects.TheCompany’smanagementestimatesthatthereare8-10operatorsconsidered as bidding competitors, some of them have assorted productcategories.However,nooperatorshavecompetitivelyfull-rangeproductsastheCompanyand itssubsidiaries.Beingsupplieranddistributorofawidevarietyof products, the Company therefore has these operators as its businesspartners.

urthermore,electricalsystemisoneofthecountry’smaininfrastructures.Thegovernmentthusrecognizesthe importanceofcontinual investmenteveryyear. As a result, the total market value of the business has been growingsteadilyinlinewiththegovernment’sinvestmentpolicy.Inthemeantime,thereare a few new operators entering the business because they must rely onfundingand theability tosupplyproducts thatmeetcustomers’ requirementsboth in terms of quality and quantity. The competition in this business isthereforenotsevere.

TheCompany’sgroupisrenownedforproductqualityandvariety.Beinginbusiness for over 30 years has contributed to theCompany’s expertise inprocuringqualityproductsfromvarioustradepartnersbothlocallyandabroad.The Company’s manufacturing plants enable it to provide quality productsunderbettercostcontrolandthusoutperformotheroperatorswhodonotownmanufacturing plantswith flexibility of stocks that can be readily supplied tocustomers. The Group also seeks to fulfill varying needs of customers byfocusingonproductqualityandconstantresearchanddevelopment.Productsmanufactured by the Group’s plants are not only listed with the Ministry ofIndustry and certified for industrial standards, thereby making the Group tohave good relationships andwin the trust of customerswho have given theGroupall-timepatronage.

• Business of producing and selling electricity

Investing inprojectsof commercial productionof solar-basedelectricity,private companies is bound by terms and conditions of electricity purchaseagreements to produce and sell all the electricity to agencies related toelectricity.As theCompanygains revenue fromsellingallelectricityproducedtoPEA,thereisnocompetitioninitselectricitysalebusiness.


Upon entering this business, operators or investors of electricitygeneration forsale toelectricityagenciesmust initiallymeet thequalificationsspecifiedbysaidelectricityagenciesandtheMinistryofEnergy.Othertechnicalinformation will be taken into consideration before sale agreements withelectricity agencies are approved. Operators of this business require quite alarge sum of investment for power plant construction. Consequently, thecompetition in thebusinessofproducingandsellingsolar-basedelectricity isnot so intense. In addition, the PEA has postponed the acceptance ofapplication for solar-based and wind-based electricity selling projects fromVSPPs for the time being, and also reviewed the ratio of Adder subsidy forpurchaseofelectricity,makingitdifficultfornewoperatorstocompeteinthisbusiness.

• Business of construction of renewable energy power plants

At present, many construction companies, including those in overseas,havecompetedintheconstructionbiddings.TheGroupisnotonlyamongthefirsttobuildbothsolar-andwind-basedpowerplantsinThailand,butalsoownpowerplants,therebyhavingquiteahighbargainingpowerwithmanufacturersofsolarcellpanels,windturbinesandotherpowerplantequipment.Moreover,the Company has developed products and equipment for use in its ownrenewableenergypowerplants.AllthesegivetheCompanyabigadvantageinterms of construction cost s over other competitors, especially those fromoverseaswhohave tobear higher costsof hiring subcontractors in Thailand.TheCompanycanalsoprocesstheapplicationofvariouspermitsnecessaryforpowerplantconstructionsuchasBOIandfactorypermit,andcoordinatewithelectricity agencies and relevant government agencies, etc. Power plantoperatorsareprovidedwithconvenientandsmoothoperationswhenchoosingtheCompany’sservices.


��. Risk Factors

��.� Dependence on client risks

• Risk of dependence on government sector clients

Due to themain customers of the Company and its subsidiaries,being the government electricity agencies such as Provincial ElectricityAuthority,MetropolitanElectricityAuthority,andTheElectricityGeneratingAuthorityofThailand,whichhaveaproportionofabout9%ofthesalesrevenueof theCompanyand itssubsidiaries in2012.The revenue fromsales to these customers is based on the government’s budget forelectricity.Ifthegovernmentchangeditselectricityinvestmentpolicy,orifthecompanyisnotselectedintheauctionitmayresultinthecompanylosingofrevenuefromthesecustomers.

Investment in electricity is regarded as investment in basic publicinfrastructurethatgrowscontinually.Intimesofeconomicexpansion,thegovernment sector needs to expand its public utilities to support suchgrowthandthe increaseofpopulationandhouseholds.Onthecontrary,intimesofeconomicslowdown,thegovernmentsectorusuallyusesthepublicinvestmentininfrastructureasamechanismtostimulateeconomicrecovery. So it can be said that the risks arising from the change ofinvestmentpolicyinthegovernmentpowersectorisquitelow.Asforthebidsforgovernmentprojects,theauctionsaregenerallydividedaccordingtoproductgroups.Thecompany’sproductsarenotonlyofgreatvariety,butalsoendorsedbyqualitystandardslikeISO,TISIandguaranteedbythe testsof independent institutes, bothdomestically and internationally.SomeoftheproductsarealsolistedbytheOfficeofIndustrialStandards(TIS) in order to support sales to government agencies and stateenterprises.Therefore,theriskthatthecompanymaynotbeselectedinaprojectbidofanytypeislowaswell.

• Risk of dependence on large clients

In 2012, the company sold products to approximately 180 PEAoffices indifferentareasforthevalueof609.38millionbahtorequalto


13.53%ofthecompany’ssaleincomeaccordingtoconsolidatedfinancialstatements.

Majorcustomersof thecompanyare regularcustomerswhohavemaintainedcontactandbusinesswith thecompany fora long timeandhave a good relationship. Maintaining good standards of goods andservices quality for over 30 years, the company is confident that itwillcontinuetogaintrustofcustomers.However,thecompanyhasapolicytoreduceriskofdependenceonanyparticularcustomerineachmarket,byconstantlyseekingnewcustomersinordertoexpandcustomerbaseand to create more business opportunities and development of newproducts.

• Risk of dependence on revenue from Myanmar

In 2012, the Group had revenue from sales of equipment toMyanmarof595millionbaht,decreasingby55%from1,323millionbahtvolume in 2011, duemainly to the change of procurement policy fromusing foreign currencies to Myanmar currency. The company considersthatprocurementaccordingtothisnewpolicyhasariskofexchangerateuncertainty of Kyat, which is highly volatile. Therefore, the Groupundertakes businesses carefully by focusing on projects under foreigncurrency deals only. However, the Group plans to seek a long-termsolution to meet the changing procurement policy, and is studying thefeasibilityofsettingabranchinMyanmar.

In order to reduce dependence on revenue from Myanmar, theGrouphasapolicyofmarketexpansionintoneighboringcountries,suchasLaoPDR,Vietnam,CambodiaandMalaysia.Moreover,theGrouphasapolicy toundertake thebusinessofpowergeneration from renewableenergy sources and the business of power plant construction, both inMyanmar and Thailand. In this regard, the Group gains the trust ofMyanmargovernmentandisthusassignedtoconductafeasibilitystudyofwindpowerdevelopmentproject.So,theGroupbelievesthatitspolicycanreducetheriskofdependenceonrevenuefromMyanmar.

However,theGrouphasapolicytopreventriskofdependenceonany particular customer, by expanding customer base in public and


privatesectorclients, including inexportsegment inorder tosoftentheimpactofpossibledecreaseofpurchaseorders fromanysegment.Theproportion of goods sold to each segment would vary from period toperiod. The company would consider factors that might affect orderplacementsofeachsegment,suchaselectricitybudget,relatedindustrialcircumstance and economic situation of Thailand and of customercountries, etc, in order to set an appropriate marketing policy forconditionsineachperiodoftime.Forexample,whenthebudgetapprovalof government sector is slow, orders from customers in this sectorwilldrop,and theGroupwillmaintain its revenuesizeby focusingmoreonprivatesectorandoverseaclients.Ontheotherhand,whenprivatesectordecreasesinvestment,theGroupwillhaveordersfromoverseacustomersandalsogovernmentsectorcustomerswhousetheirbudgettostimulatetheeconomy.Therefore,diversificationofcustomersegmentscanreduceriskofdependenceonanysinglecustomergroup,enablingtheGrouptomaintainrevenuescaleineachperiodoftime.

��.� Risk of exchange rate fluctuation

As the nature of business of the Group involves export to and importfromforeigncountries,whicharepaidmostlyinUSdollaroreuros,theGroupmightbeaffectedbythefluctuationofexchangerates.Itmighthavegainsorlossesonexchangeratesifthedateofpurchaseorsale isdifferentfromthedateofthedeliveryorpayment.

However,astheGroupbothmakesimportandexportinforeigncurrency,itcanreduceriskofexchangeratefluctuationonanextent.Incasethedollaror euro is strong against baht, the Group will have increased income fromforeign deals when the payment is converted into baht, yet the cost ofimportedrawmaterialswillrise.Conversely,incasethedollaroreuroweakensagainstbaht, theGroupwill havedecreased income from foreigndeals uponcurrencyconversion,andthecostofimportedrawmaterialswilldrop.

The above characteristics bring a natural hedge against fluctuations inexchange rates by planning ordering and delivery. The company will have adeposit account in foreign currency when the payment or sale is in foreign


currency.WhentheGrouphastopayfor importedrawmaterials intheshortterm,thecompany’smanagementteamwillbeassignedtomonitorchangesinexchangeratesandusetheinformationtoplanthepurchaseofrawmaterialsanddeliveries thatarepaidor received ina foreigncurrency, tohelp reducetheriskofexchangerate(NaturalHedge).Inaddition,fortheforeigncurrencythatisleftoverinthebalancebyusingNaturalHedge,theGrouphasapolicytoreducetheriskbymakingsalescontracts inforeigncurrenciesbeforehand(ForwardContract)inapproximately30%-50%offoreigndebt.

In theyear2012 theGrouphad totalsales in foreigncurrenciesof595millionbaht,representing14%oftherevenuefromtotalsalesoftheGroupinthatperiod,respectively.Thepurchaseofrawmaterialsandgoodsfromforeigncountriestotaled1,172.96millionbaht,asaproportionrepresenting40.42%ofvalueofrawmaterialsandproductsoftheGroupduringthesameperiod.Asof 31 December 2012 the Group made a contract to buy foreign currencybeforehand,withthecontractendingwithinoneyear,anamountequalto77.11millionbaht.

��.3 Possible risks to the power generation and supply business

• Risk of power generation performance

Theabilitytogenerateelectricityofasolarpowerplantdependsontwomain parts, i.e. the quality of the solar panels and the amount oflossesincurredintheelectricitygenerationsystem.Topreventsuchrisks,theGroupusessolarpanelsfromthetopwell-knowncompaniessuchasSolarFrontier,K.K.(“SF”),WuxiSuntechPowerCo.,Ltd.(“Suntech”)etc.which is regarded as one of the best manufacturers of quality solarpanelsrecognizedaroundtheworld.

For the construction and installation of various electrical systemequipment,theGrouphasemployedSchneider(Thailand)Limited(cSFe),acompanyundertheSchneidergroupofFrancewhichisrecognizedforits experience and expertise in the field of electrical engineeringequipmentand installationofelectroniccontrol systemsaswell, to takecare of the task so as to prevent problems in the power generation


systemoftheGroupthatmayaffecttheabilitytoproduceelectricity. Inordertobuildconfidenceandpreventanypossiblerisks, theGrouphasenteredintoqualityguaranteeagreementswiththepartiesinvolved,eitherin the provision of solar panels or the construction of power plants, toguaranteetheefficiencyandtheabilitytoproduceelectricityaccordingtotheagreement.

• Risk of power supply

The Group has signed a power purchase agreement with PEA fordistribution of power at the amount specified in each contract. Thecontract isaNon-Firm type for reasons that in thegenerationof solar-base power, the amount of power generated each time cannot bespecificallycontrolled.Accordingtotheagreement,thePEAwillpurchaseall electricity produced by quantities specified for each project. Thecontract is five years from the date of signing the contract andautomaticallycontinuesforaperiodoffiveyears.ThePEAdoesnothavethe right to terminate the agreement as long as the company complieswith theconditionsspecified in thecontract.Due to thesaidconditionsandthecontractpartybeingagovernmentagency, it isconsideredthattheGrouphasnoriskfromtheinabilitytogenerateandsupplyelectricalpower,ortheinabilitytocollectpayments.

• Risk of failure to construct power plants in the future

TheGrouphassignedapowerpurchaseagreementwithPEA,withacapacity of 30.9 mw. Power plants under the first project, in phase 1sized 3.0 mw and phase 2 sized 4.4 mw in Chon Daen district ofPhetchaboonprovince,were completely constructed andbegan creatingrevenue from early January 2011 andOctober 2011 respectively. Powerplantsundertheremaining4projects,withtotalcapacityof23.5mw,areexpected to be complete and be in production by the first quarter of2013.

The above agreement is of Non-Firm type and does not have arequirement for theamountofpowerdelivery.Therefore, if theGroup isunabletoconstructpowerplantsofotherprojectsinadeterminedperiod,


The Company have permission to postpone. The company plans tocompletetheconstructionofallpowerplantsbythefirstquarterof2013.

• Risk of flood or natural disasters

InlateOctober2011,manyprovincesinThailandincludingareasinBangkok, Nonthaburi, Pathum Thani were badly affected by flood. TheGroup also suffered the flooding at its plants despite thoroughpreparationandmeasure.Althoughitsmachinerieswerenotdamaged,theplantshadtotemporarilyceaseoperationsbecauseemployeeswerecutoffby flood.Asa result, thecompanycouldnotsupplysome itemsasplanned and lost the revenue from sales of products produced by theplantsforthatperiod.

However,thecompanyhasdevelopedaprecautionaryplanagainstfloodinthelongterminordertoreducefutureriskofincomelossduetonaturaldisasters.Storageshelvesforequipment,rawmaterialsandgoodshavebeenelevated.Theplants’electricalanddrainagesystems,thetestrooms, and the surrounding areas have been improved into a moreappropriateconditionsagainstfloodinginthefuture.

��.� Risks from economic and political factors

Thailand’s economy in 2012 showed a high growth of gross domesticproduct (GDP). However, circumstance of the manufacturing factor was stilluncertain,largeinvestmentsweresloweddown,accompaniedbypoliticalunrestthatimpactedinvestmentdecisions.

The alternative energy business segment like solar-based power plant(solar farm)andwind-basedpowerplant (windpower)continue togrow.Thegovernmentshouldmakeaclearindicationaboutthesupportforinvestors.Thecompanyisexpectedtogainmoreincomebecauseithasbeenworkingontheaforementioned projects and is ready to take part in these projects either intermsof financialsupport,personnel,orequipmentand technology forpowerplantconstruction.

Political stability and disputes among people will remain critical factorsthatimpedeeconomicexpansion,eitherininvestmentorindustrialdevelopment.


��. Corporate Governance Report

The Company’s Board of Directors trusts that good corporate governance is acrucialfactorthatrepresentsefficient,transparentandaccountablemanagementsystemof the organization, thus securing confidence and trust of shareholders, investors,stakeholders and all related parties. For this reason, the Board is resolute in doingbusiness with business code of conduct, good corporate governance principle andcorporatesocialresponsibility(CSR),andalsoincompliancewithcodeofbestpracticeoftheStockExchangeofThailandaswellasgoverningregulationsoftheSecuritiesandExchangeCommission and theCapitalMarket Supervisory Board, in effort to achieveperformancethatalwaysmeetsinternationalstandards,efficientmanagementsystemandsustainablegrowthofthebusiness.

TheCompany’scorporategovernancepolicyissetbyfoursub-committeeincludingaudit committee, executive committee, compensation committee and risk managementcommittee.SuchpolicyinvolvesroleandresponsibilityoftheCompany’scommitteeandsub-committee, right of shareholders, equal treatment among shareholders, benefit of allstakeholders, information disclosure and transparency, related transaction policy, insideinformationcontrol, internalcontrolandriskmanagement,andbusinesscodeofconduct.This policy is needed to be reviewed and adjusted consistently in order to cope withchanging business environment and roles and regulations from Stock Exchange ofThailandorotherrelatedagencies.

Moreover,toencourageequaltreatmentamongshareholdersandstakeholders, in2012,theCompany’sboardofdirectorshaspreparednewwayforminorityshareholdersto participate shareholders’ meeting by proposing meeting agenda in advance and/orproposingnomineestobeboardofdirectorsviafacsimileand/orcompany’swebsite.

In 2013, the Company’s board of directors has resolved to segregate theCorporateGovernanceCommitteefromtheAuditCommitteeinordertoconformtogoodcorporate governance policy, to encourage improvement and enhancement of goodcorporate governance policy, and to enable appropriate and continual disclosure ofcorporategovernanceperformance.Thiswillnotonlyreflect theorganization’sefficient,transparent and ethical management, along with responsibility to society and theenvironment,butalsoestablishtrustoftheshareholders,investorsandallstakeholdersintheCompany..

(Mr.GunkulDhumrongpiyawut) (Mr.SathapornKotheeranurak) ChairmanoftheBoard ChairmanoftheAuditand February25,2013 CorporateGovernanceCommittee February25,2013


��. Internal Control The Company’s Board of Directors has appointed Audit and CorporateGovernance Committee comprising three independent directors who are not theCompany’s employees. Responsibilities are reviewing and auditing financialstatements, supervising internal control, complying with rules and regulations andpreventinganyconflictofintereststhatmayhappen.

TheCompanysetsupitsowninternalauditdepartmentwithaimtocheckandevaluate the internal control system of the Company and its subsidiaries. TheCompanypreparesbusinesscodeofconductsocalledworkbook, implements theKeyPerformance Indicator (KPI) to control andevaluate theCompany’s operationsand incorporates risk assessment based guidance from COSO (The Committee ofSponsoring Organization of Treachery Commission). Internal audit department willreporttheauditingresultsandcommentstoauditcommitteeandboardofdirectorsonquarterlybasis.

IntheBoardofDirectors’meeting2/2013datedFebruary25,2013,AuditandCorporate Governance Committee (three independent directors), management andinternal audit participated in this meeting. Following is the conclusion from themeetingregardinginternalcontrolsystemcoveringfiveareas;

1. Corporateandenvironment 2. Riskmanagement 3. Internalcontrolandoperations 4. Informationtechnologyandcommunicationsystem 5. Follow-upreport

BothBoardofDirectorsandAuditandCorporateGovernanceCommitteeagreewith internal audit department that the Company and its subsidiaries have goodefficientandproper internalcontrolsystem. We foundnoerroron theCompany’sinternal control system that can have significant negative impact on accuracy andreliability of the financial reports. Internal control also involves in checking thetransactionsbetweencompanyandmajorshareholders,directors,managementand/orrelatedpersons.


Audit and Corporate Governance Committee and management havecontinuously paid attention on corporate governance, internal control and riskmanagementwithaimtohavegoodcorporategovernance,efficient internalcontrol,acceptable riskmanagement, reliableaccountingand financial reports,andstraight-forwardrulesandregulations.


��. Related Transactions

��.� Summary of relationship between the Company, subsidiaries and related companies/persons

Type of Company Business Relationship

GunkulGroupCo.,Ltd. Holding

(GKG) company

G.K.AssemblyCo.,Ltd. Producing

(GKA) transmission

equipment

G.K.PowerProducts Producing

Co.,Ltd.(GKP) transmission

equipment

K.N.P.SupplyCo.,Ltd Distributing

(KNP) transmission

equipment

GunkulPowergen Producing

Co.,Ltd.(GPG) electricity

forsale

G-PowerSource Producing

Co.,Ltd.(GPS) electricity

forsale

-GKGismajorshareholderofGUNKULwith59.97%stake.

-GKGisheldbyDhumrongpiyawutfamilyat99.64andhasshared

directorwithGUNKULnamedMr.GunkulDhumrongpiyawut

-As of December 31, 2012, GUNKUL was major shareholder of

GKA for 99.99% stake. Shared directors between GKA and

GUNKUL are Mr. Gunkul Dhumrongpiyawut holding 0.00005%

stakeinGKA,MissSopachaDhumrongpiyawutandMrs.Areewan

Roonprapan.

-As of December 31, 2012, GUNKUL was major shareholder of

GKP for 99.99% stake. Shared shareholder between GKP and

GUNKUL isMr.GunkulDhumrongpiyawut holding 0.001%stake

in GKP. Shared directors between GKP and GUNKUL areMiss

SopachaDhumrongpiyawutandMrs.AreewanRoonprapan.

- As of December 31, 2012, GUNKUL was major shareholder of

KNP for 99.99% stake. Shared shareholder between KNP and

GUNKULisMr.GunkulDhumrongpiyawutholding0.0002%stake

inKNP.Shareddirector betweenKNPandGUNKUL is andMr.

ChaloemponSricharoen.

- As of December 31, 2012 GUNKUL was major shareholder of

GPG for 99.99% stake. Dhumrongpiyawut family holds 0.0005%

stake inGPG.ShareddirectorsbetweenGPGandGUNKULare

Mr. Gunkul Dhumrongpiyawut, Miss Sopacha Dhumrongpiyawut

andMr.SomboonAueatchasai.


GPS for 40.00% stake. Shared directors between GPS and

GUNKULareMissSopachaDhumrongpiyawutandMr.Somboon

Aueatchasai.




WED for 70.00% stake. Shared shareholder betweenWED and

GUNKULisMr.GunkulDhumrongpiyawutholding0.001%.Shared

directors between WED and GUNKUL are Ms. Naruechon

Dhumrongpiyawut, daughter of Mr.Gunkul Dhamrongpiyawut, Mr.

SomboonAueatchasai.ShareddirectorsbetweenGPGandGPS

isMr.SomboonAueatchasai.

-FEChas jointedmajorshareholderwithGUNKULwhich isGKG

and Co., Ltd. and Dhumrongpiyawut family by holding 95.00%

and 3.60% respectively. Shared directors between FEC

and GUNKUL are Miss Sopacha Dhumrongpiyawut and

Mr. Chaloempon Sricharoen. Previously, FEC was importer of

transmission equipment to sell to GUNKUL. Now FEC has

changed its business objective to contractor, while transmission

equipmentbusinesswasterminatedsince2008.

- GKT is held by Dhumrongpiyawut family, major shareholding of

GKG. Dhumrongpiyawut family holds 66.00% stake in GKT.

Shared director between GUNKUL and GKT is Miss Sopacha

Dhumrongpiyawut.

- Major shareholder of KNT is Sricharoen family holding 97.93%

stake. Sr icharoen fami ly is fami ly of Miss Sopacha

Dhumrongpiyawut.

-GML is held by Dhumrongpiyawut family for 97.00% stake.

Shared director between GML and GUNKUL is Mr.Gunkul

Dhumrongpiyawut.

-Joint venture between Sri-U-Thong and Future Electric Control

hasFECaspartnertodocontractingbusiness.

- GK2000 has Dhumrongpiyawut family as major shareholder for

76.00%Limited(GK2000)stake.ShareddirectorbetweenGK2000

andGUNKULisMr.GunkulDhumrongpiyawut.

GMShasDhumrongpiyawutfamilyasmajorshareholderfor98.00%

stake.Co., Ltd.ShareddirectorbetweenGK2000andGUNKUL is

Mr.GunkulDhumrongpiyawut.

WindEnergy Producing

DevelopmentCo.,Ltd. electricity

(WED) forsale

FutureElectrical Contractor

ControlCo.,Ltd.(FEC)

GunkulTrading& International

AgencyCo.,Ltd.(GKT) marine

transport

KunnateeCo.,Ltd. Marine

(KNT) transportin

Asianregion

GunkulMarineLine Operating

Co.,Ltd.(GML) Closed

Jointventurebetween Contractor

Sri-U-Thongand

FutureElectric

Control(JV-Sri&FEC)

GunkulEngineering Rental

(2000)(GK2000)

G.M.Supply& Rental

Construction

Co.,Ltd.(GMS)


-JointventurebetweenFECandSAChasFECaspartnertodo

contractingbusiness.

-P.M.AuditCo.,Ltd.hasabrotherofMr.GunkulDhumrongpiyawut

asadirector.

-G.E.S. Logistics (Thailand) Co., Ltd. has a sister of Mr.Gunkul

Dhumrongpiyawutasadirector.

Mr.GunkulDhumrongpiyawutand familyholds59.97%stake in

GKGwhich ismajor shareholderofGUNKUL.He isGUNKUL’s

president.

-MissSopachaDhumrongpiyawutisMr.Gunkul

Dhumrongpiyawut’swife.SheisGunkul’smanagingdirector.

-MissNaruechonDhumrongpiyawutisMr.Gunkul

Dhumrongpiyawut’sdaughter.SheisGunkul’sdirector.

-Mr.PavichDhumrongpiyawutisMr.Gunkul

DhumrongpiyawutisMr.GunkulDhumrongpiyawut’sson.

-Mr. ChaloemponSricharoen isMiss SopachaDhumrongpiyawut

‘sbrother.HeisGunkul’sdirector.

Jointventurebetween Contractor

FECandSAC

(JV-FEC&SAC)

P.M.AuditCo.,Ltd. AuditFirm

(PM)

G.E.S.Logistics International

Thailand)Co.,Ltd.(GES) Marine

Mr.Gunkul Director

Dhumrongpiyawut

MissSopacha Mr.Gunkul

Dhumrongpiyawut Dhumrongpiyawut’s

wife

MissNaruechon Director

Dhumrongpiyawut

Mr.Pavich Mr.Gunkul

Dhumrongpiyawut Dhumrongpiyawut’s

wife

Mr.Chaloempon Director

Sricharoen



M

r.Gun

kul a

nd M

s.Sop

acha

Dhu

mro

ngpi

yawut

Rentallandand

Totalrental0.69

Totalrentalpaid8.20mb

Sub-rentinglandand

Goods&Services

0.02mb

Contracting305mb

SellingGoods/Services

Sellingelectricity

➠ ➠

➠

➠ ➠

➠

➠

➠

GK2000

GMS

Rentalassets

GKA

GKP

GKE

GPG

GPS

จำหนาย นคา

ผลต นคา

Contractor

FEC

JV-Sri&FEC

JV

FEC&SAC

PEA

Marine

transpot

KNT

GKT

➠

Powerproducer

Selling

➠

GKEGroup

KNP

��.� Summary of related transactions ended 3� December �0��

Transportation

3.1mb

➠

GES


��.3 Summary of related transactions in �0�� and �0��

(1) Sales of goods and rendering of services

Size 2011 2012 Related Type of (million (million Company companies transaction baht) baht) Reason and necessity

GUNKUL GKP Saleofgoods 51.21 4.10 GUNKULsellsrawmaterialtoGKPoncostplus

Accountreceivables - 0.42 5-30%profit,forproductionoffinishedgoods.

KNP Saleofgoods 39.03 35.37 GUNKULsellsfinishedgoodstopublicsector

Accountreceivables 17.06 1.67 clientsoncostplus5-30%profit.

GKA Saleofgoods 17.08 1.76 GUNKULsellsrawmaterialtoGKAoncostplus

Accountreceivables 0.90 2.78 5-30%profit,forproductionoffinishedgoods.

FEC Saleofgoods 0.13 0.42 GUNKULsellsfinishedgoodstoFECforusein

contraction,FEC’scorebusiness,oncostplus

5-30%profitwhichiscomparabletootherclients.

JV-Sri Saleofgoods 0.69 - GUNKULsellsfinishedgoodstoJV-Sri&FEC

&FEC foruseincontractiononcostplus5-30%which

iscomparabletootherclients.

KNT Saleofgoods 0.07 0.02 GUNKULsellsfinishedgoodstoKNTforusein

Accountreceivables 0.00 - marinetransportoncostplus5-30%whichis

comparabletootherclients.

JV-FEC Saleofgoods 0.07 - GUNKULsellsfinishedgoodstoJV-Sri&SAC

&SAC Accountreceivables 0.08 - foruseincontractiononcostplus5-30%which

iscomparabletootherclients.

GPS Constructionof 1,747.88 784.53 GUNKULsignscontractagreementtosellsolar

powerplants panelequipmenttoGPSincludingconstruction

Accountreceivables 882.68 304.13 of426-mwsolarpowerplantsoncostplus

Unearnedrevenue 176.47 17.04 5-16.27%profit..Totalcontractisworth

Advanced - 3.61 2,938.13millionbaht.

constructionrevenue

Servicerevenue - 15.45 GUNKULsignscontractagreementworth111.60

Unearned - 13.64 millionbahttorenderpowerplantmaintenance

servicerevenue servicetoGPS.Termofcontractis6years,

from1March2012-28February2018.Service

feeischargedtoGPSsince1April2012-31

December2012atarateof300,000baht

permonth.


GPG Constructionof - 1,166.19 GUNKULsignscontractagreementworth

powerplants 1,450millionbahttoconstruct423.5-mwsolar

Unearnedrevenue - 0.03 powerplantsandotherconstructionworksfor

Accountreceivables - 92.67 GPGoncostplus5.16.27%profit.

-constructionwork

Accountreceivables - 68.83

-workguarantee

Advanced 89.35 66.55

constructionrevenue

GKA KNP Saleofgoods 18.14 28.06 GKAsellsfinishedgoodstoKNPandKNP

Accountreceivables 2.86 0.06 resellsthegoodstopublicsectorclientsoncost

plus5.35%.

GKP Saleofgoods 22.92 30.24 GKAsellsrawmaterialstoGKPoncostplus

Accountreceivables 2.91 17.75 5.35%,forproductionoffinishedgoods.

GPG Saleofgoods 1.90 - GKAsellsfinishedgoodstoGPGoncostplus

Accountreceivables 2.03 - 5-35%,foruseinconstructionofsolarpower

plants.

FEC Saleofgoods 26.66 168.76 GKAmanufacturesmetalpartsandrender

Servicerevenue 3.66 24.83 servicestoFEConcostplus15-35%with

Accountreceivables 22.27 92.55 advanceddepositpaidbyFEC.FECusesthe

Advancedrevenue 7.61 7.61 goodsforconstructionofsteelstructureofsolar

cellpanelsandEPCconstructionworks..

GKP KNP Saleofgoods 112.54 24.12 GKPsellsfinishedgoodstoKNPoncostplus

Accountreceivables 12.96 0.56 5-35%,KNPresellsthegoodstopublicsector

clients.



(2) Purchase of goods and taking of services


GUNKULGKP Purchaseofgoods 44.75 167.55 GUNKULbuysfinishedgoodsfromGKPtosell

Accountpayables 46.88 112.09 toGUNKUL’sclients.Pricesofgoodsarebased

oncostplus5-30%profit,andservicesfeesby

GKPareoncostplus15-20%profit.

Servicefee - 0.22 GUNKULhiresGKPtorenderelectrical

Accruedexpenses - 0.24 equipmenttestingserviceforpowerplant

projects,oncostplus15-20%profit.

GKA Purchaseofgoods 142.34 260.11 GUNKULbuysfinishedgoodsfromGKAoncost

Accountpayables 9.48 66.52 plus5-35%profittoselltoGUNKUL’sclients.

Servicefee - 0.82 GUNKULhiresGKAonmovingofsuppliesand

Accruedexpenses - 0.51 equipmentintoconstructionsiteandrepairwork

inpowerplantprojects,oncostplus15-20%

profit.

KNP Purchaseofgoods 12.35 13.96 GUNKULbuysfinishedgoodsfromKNPoncost

Accountpayables 6.36 10.29 plus5-30%profittoselltoGUNKUL’sclients.

Salesoperationfee - 0.15 GUNKULpaysconsiderationtoKNPforselling

Accruedexpenses - 0.16 goodstogovernmentsector,accordingto

mutuallyagreedcriteria.

FEC Construction/servicefee - 304.30 GUNKULsignscontractswithFECtoconstruct

Accountpayables - 29.50 powerstationsandutilitiessystemsforsolar

Retentionpayable - 37.16 powerplants,totalcontractualvalueis672.71

fromcontractor millionbaht.

Advancedpayment - 109.97

forconstruction

Maintenance - 0.93 GUNKULhiresFECtorepairpaintworkforsteel

expenses structureofsolarcellpanelsatpowerplantat

Accruedexpenses - 0.21 Bankluai,Petchaboonprovince.

G.E.S. Transportation/ 2.92 GUNKULusesshippingservicefromG.E.S.

servicefee Logistic,ofwhichasisterofMr.Gunkul

Accruedservice 0.04 Dhumrongpiyawutisashareholder.Thefeesare

expenses comparabletootherserviceproviders.



GKA GKP Purchaseofgoods 0.28 0.82 GKAbuysprefabricatedrawmaterialsfromGKP

Accountpayables 0.16 1.03 oncostplus5-35%profittoproducefinished

goods.

FEC Servicefee - 0.00 GKAhiresFECtorepairpaintworkforsteel

structureofsolarcellpanelsatpowerplantin

Buriramprovince.

GKP KNP Purchaseofgoods 0.20 - GKPbuysprefabricatedrawmaterialsfromKNP

oncostplus5-35%toproducefinishedgoods.

GPG FEC Constructionfee 59.95 1.16 GPGsignsacontractwithFECtoconstruct

solarpowerplantandcivilworksfor1stproject

phase2,capacityof4.4mw,atChonDaen

district,Petchaboonprovince.Contractualvalue

is59.95millionbaht,andconstructionfeeis

lowerthanthecontractualvaluewhencompared

totheconstructionfeeofphase1plantby

Schnider(Thailand)Co.,Ltd.In2012,GPGhires

FECforadditionalconstructionofsteelstructure

forsolarcellpanels,drainagesystem,concrete

floor,andrepairofpaintwork,valueof1.16

millionbaht.

G.E.S. Transportation/ - 0.18 GPGusesshippingservicefromG.E.S.Logistic,

servicefee ofwhichasisterofMr.GunkulDhumrongpiyawut

isashareholder.Thefeesarecomparableto

otherserviceproviders.

GPS FEC Constructionfee - 27.55 GPSsigns3contractswithFECtoconstruct

floodprotectionsystem,rainwaterwork,and

stoneflooring,totalvalueof33.46millionbaht.


(3). Acquisition and divestment of assets and rental


GUNKUL GKA Saleofassets 0.02 0.39 GUNKULsells12.5-ccIsuzupick-uptruck,year

2003,licenseplateno.ษค-8376,toGKAfor

internaluseatacomparablemarketprice.

Purchaseofassets - 0.00 GUNKULbuys1harddiskfromGKAforusein

thecompanyatapriceof3,198.38baht,based

onbookvalueoftheasset.

GK2000 Rental 5.60 5.60 GK2000rentslandandbuildingfrom

Mr.GunkulDhumrongpiyawutandthenre-rentit

toGUNKULtouseaswarehouse(Ruamjit)and

warehouse(Pichai)withthree-yearcontract

startingfromJuly1,2012toJune30,2015,at

averagerentalrateof328,000baht/monthor

79.43baht/sq.m.forlandandbuilding(average

rentalcalculatedfromaveragerentaltopremise

space)and139,000baht/monthor249.10baht/

sq.wahforland.Thisrentalrateisclosetorate

thatisappraisedbyindependentappraiser,

NoblePropertyCompanyLimited,at79.51baht/

sq.m.forRuamjitand248.33baht/sq.wahfor

Pichai.

GPG Saleofassets 0.02 - GUNKULsells13chairsand3meetingtablesto

GPGatpricesbasedonassetbookvalues.

PM Purchaseofassets - 0.60 GUNKULbuysToyotaHarrier,licenseplate

ภท-8884,year2000,aged12years,fromPM

Auditatcomparablemarketprice.PMAudithas

abrotherofMr.GunkulDhumrongpiyawutasa

shareholder.

GKA GKP Rentalincome 1.20 1.20 GKArentsmanufacturingbuildingtoGKPtouse

Unreceivedrental 0.10 0.10 forgoodsassembly,with3-yearcontract

income startingfrom1July2012-30July2015at

rentalrateof100,000baht/month.

FEC Purchaseofassets 0.74 0.01 GKAbuys1coatingthicknessmeterfromFEC

at13,573.75bahtforuseincoatedmetal

inspectionatconstructionsite.



Saleofassets 0.00 0.51 GKAsell1ToyotaVigo2.5,year2007,license

Otherpayables 0.00 - plateตษ-8675,withGPStoFECforuseinthe

companyatcomparablemarketprice.

Director Rental - 0.69 GKAsignsacontracttorentland,3,472sq.m.on

Unpaidrental - 0.23 2titledeeds,fromMr.GunkulDhumrongpiyawut

foruseassuppliesandgoodsstorage.Theland

islocatedatPlaibangroad,Mahasawat

subdistrict,Bangkruaidistrict,Nonthaburi

province,whichisnearGKAplant.Thetermof

thecontractis6month,from1January2012-

30June2012,withrenewalforfurther3years

from1July2012-30June2015atrentalrate

of57,800baht/monthor16.66baht/sq.m.,which

isclosetorentalrateasappraisedbyan

independentappraiser,ThaiSurveyor&Advisory

Co.,Ltd.,at16.66baht/sq.m.

GPG FEC Purchaseofassets 0.34 - GPGbuys1ISUZUDMAXSPACECAB2.5SLX,

licenseplateปท-5887,fromFECforuseinthe

company,atcomparablemarketprice.

Director Purchaseofassets - 31.19 GPGbuyslandontitledeedno.5657,no.48,

(land) areaof60raiatBungkasamdistrict,Nongsue

district,Pathumthaniprovince,asapprovedby

theBoardofDirectorsMeetingno.4/2012,for

powerplantconstruction,atappraisedpriceby

ThaiSurveyor&AdvisoryCo.,Ltd.,an

independentappraiser.

GKP GMS Rental 1.54 1.54 GMSrentslandandbuildingfromMr.Gunkul

Unpaidrental 0.13 0.13 Dhumrongpiyawutandre-letsthemtoGKPfor

useasoffice,testingbuildingandwarehouse.

Thetermofrentagreementis3yearsstarting

from1July2012-30June2015atrentalrate

of42,000baht/monthor49.41baht/sq.m.,which

isclosetorentalrateasappraisedbyNoble

Property,anindependentappraiser,at49.75



baht/sq.m.GMSwhorentsalandofabout5rai

fromMs.SopachaDhumrongpiyawutre-letsthe

landtoGKPforuseasparkingspaceandstaff

residence.Renewthetermofcontractis6months

startingfrom1July2012-31Dec2012atrate

of86,000baht/monthor41.61baht/sq.wah

whichisclosetorentalrateasappraisedby

NobleProperty,anindependentappraiser,at

41.67baht/sq.wah.

KNP GK2000 Rental 1.06 1.06 GK2000whorentslandandwarehouse

(Ratchaneekorn)fromMr.GunkulDhumrongpiyawut

re-letsthelandandwarehouse(Ratchaneekorn)

toKNPforuseasoffice,testingbuildingand

warehouse.Thetermofcontractis3yearsfrom

1July2012-30June2015attotalrentalrate

of88,500baht/month.Whencalculatingonly

rentalforheadofficebuilding,therentalrateis

83.33baht/monthandtherentalratefor

warehouse(Ratchaneekorn)is135.71baht/sq.m.

whichareclosetorentalratesasappraisedby

NobleProperty,anindependentappraiser,at

82.75baht/sq.m.and135.89baht/sq.m.

respectively.


(4) Financial aids


GUNKUL GKA Shorttermlending

Lending 2.00 - GUNKULlendsmoneytoGKAforworking

Payment (2.00) - capitalbyissuingpromissorynoteswith5.975-

Balance - - 6.1813%p.a.interest.Theinterestratesare

Interestincome 0.02 - mutuallyagreed.

Shorttermlending

Lending 3.00 - GUNKULlendsmoneytoGKAforworking

Payment (3.00) - capitalbyissuingpromissorynoteswith3%p.a.

Balance - - interest.Theinterestrateismutuallyagreed.

KNP Shorttermlending GUNKULlendsmoneytoKNPforworking

Lending 1.72 - capitalbyissuingpromissorynoteswith5.7563-

Payment (1.72) - 6.1818%p.a.interest.Theinterestratesare

Balance - - mutuallyagreed.

Shortterm

borrowing

Borrowing 18.45 41.65 GUNKULborrowsmoneyfromKNPforworking

Payment (18.45) (12.50) capitalbyissuingpromissorynoteswith5.763-

Balance - 29.15 6.1813%p.a.interest.Theinterestratesare

Interestexpense 0.19 0.82 mutuallyagreed.

Unpaidinterest - 0.82

GPG Shortterm

borrowing

Borrowing 52.07 46.97GUNKULlendsmoneytoGPGforworking

Payment (33.00) (46.97) capitalbyissuingpromissorynoteswith5.7563-.

Balance 19.07 - 6.1813%p.a.interest.Theinterestratesare

Interestincome 1.38 0.68 mutuallyagreed

Unreceivedinterest 1.29 -


GPS Shortterm

borrowing

Borrowing 249.18 382.51 GUNKULlendsmoneytoGPSforworking

Payment (92.10) (353.27) capitalbyissuingpromissorynoteswith5.7563-

Balance 157.08 29.24 6.1813%p.a.interest.Theinterestratesare

Interestincome 1.55 6.21 mutuallyagreed.

Unreceivedinterest 1.55 7.65

Allowance

Interim 1.02 - GUNKULsetsallowanceforGPSasexpenseto

Balance 1.02 - importsolarcellequipment.

GKG Shorttermlending GUNKULborrowsmoneyfromGKGforworking

Lending 3.05 - capitalbyissuingpromissorynoteswith3%p.a.

Payment (3.05) - interest.Theinterestrateismutuallyagreedand

Balance - - islowerthanborrowingratefromfinancial

Interestexpense 0.00 - institutions,whichcharge7.125-8.950p.a.

interest.

WED Otherborrowing - 0.05 GUNKULsetsallowanceforWEDas

miscellaneousexpenses.

GKA GKP Borrowingfrom

relatedpersonsand

relatedcompanies GKAborrowsmoneyfromGKPonshortterm

Borrowing 35.06 46.16 forworkingcapitalbyissuingpromissorynotes

Payment (3.90) (14.00) with3%p.a.interest.Theinterestrateis

Balance 31.16 32.16 mutuallyagreed.

Interestexpense 0.15 1.08

Unpaidinterest 0.14 1.18



KNP Borrowingfrom

relatedpersonsand

relatedcompanies GKAborrowsmoneyfromKNPonshortterm

Borrowing 2.00 2.00 forrevolvingcapitalbyissuingpromissorynotes

Payment - (2.00) with3%p.a.interest.Theinterestrateis

Balance 2.00 - mutuallyagreed.

Interestexpense 0.01 -

Unpaidinterest 0.01 -

GPS Mr. Allowance

Gunkul Forwardamount 0.20 - GPSdisbursesmoneyfromMr.Gunkul

Dhumr Interim (0.20) - Dhumrongpiyawut,director,foruseasguarantee

ongpiy Balance - - depositforpowersaleagreementwithProvincial

awut ElectricityAuthority,inwhichdirectorcharged

nothingonthis.

5). Other items


GUNKUL GKA Dividendincome 2.76 1.68 GUNKULgetsdividend,byDecember2012,

Unreceiveddividend 2.76 - fromGKAatrateof0.841baht/sharefor

income 1,999,998sharesheld(parvalue100.00baht

each),totaling1.68millionbaht.Thepaymentis

accordingtoresolutionof2012annualgeneral

shareholdersmeetingon27April2012.




GKP Dividendincome 9.83 8.61 GUNKULgetsdividend,byDecember2012,

Unreceiveddividend - - fromGKPatrateof86.10baht/sharefor

income 999,998sharesheld(parvalue1,000.00baht

each),totaling8.61millionbaht.Thepaymentis


shareholdersmeetingon27April2012

KNP Dividendincome 7.25 15.28 GUNKULgetsdividend,byDecember2012,

Unreceiveddividend - - fromKNPatrateof19.56baht/sharefor

income 499,998sharesheld(parvalue1,000bahteach),

totaling9.78millionbaht.Thepaymentis


shareholdersmeetingon26April2012.

AsresolutionoftheBoardsofDirectors

no.3/2555onOctober18,2012hadapproved

forinterimdividendpaymentasperformanceas

ofJune30,2012fromunappropriatedRetained

earningsTHB11.00pershareinthetotalanount

of5.50THBm/nandexpectedtopayin

October2012.

Opinions of audit committee on related transactions between the Company and subsidiaries

• TransactionsbetweenGUNKULandGKA,GKP,KNP,GPG,WEDandGPStakeplaceasnormalbusinesspracticeandbenefittheCompany’soperations.Asof31 December 2012, GUNKUL holds 99.99% stakes in GKA, GKP, KNP andGPG, itssubsidiaries,70%stake inWED, itssubsidiary,and40%inGPS, itsassociatedcompany.Therefore,thesetransactionsdonotposeanyconflictofinterestinthefuture.


Opinions of audit committee on related transactions between the Company and subsidiaries, associated companies, and related persons and companies

• Buy/sell transactions benefit the Company’s operations, are reasonable andhavenormaltradeconditions.

• Rental contracts between theCompany and subsidiaries and related personsduring1July2009to30June2012aremadeunderrentalcontractsandre-letcontracts to match with rates appraised by independent appraiser, NoblePropertyValuationCo.,Ltd,on23June2009.TheCompanyandsubsidiariesandrelatedpersonshaveextendthesecontracts fora further3-year,startingfrom1July2012-30June2015.Hence,theserentalandre-letcontractsbytheCompany’sgrouphaveconditionsandrentalrateswhicharecomparabletoothersandarereasonableandnecessary.

• RentaloflandbetweentheCompanyandsubsidiariesfrom1July2012to30June2015aremadeunderrentalcontractstomatchwithratesappraisedbyindependent appraiser, Thai Surveyor & Advisory Co., Ltd, on 20 July 2012.Hence, these rental contracts have conditions and rental rates which arecomparabletorentalwithathirdpartyandarereasonableandnecessary.

• The Group made solar power plant construction contracts, on part of civilworksandsteelstructureforsolarcellpanels,withrelatedcompaniesatpriceslower than those of solar power plant construction in the initial phase, andcomparable toconstructioncontractmadewithacompanyon thesamesite.Moreover, afterbeingaSET-listedcompany, theCompanymust complywithrulesonconnected transactionsof theSET. Ifsuch transactionsareconsidernot as “normal business” of the Group (details in “Manual of ListedCompanies” under connected transaction section) and the transaction size ismorethan1millionbahtor0.03%ofNTA, theCompanymustseekapprovalfromtheBoardofDirectorsmeetingortheshareholdersmeeting(dependingontransactionsize)beforehand.

• Assetacquisitionsfromrelatedpersonsandcompaniestouseforoperationarenecessary for andbenefit theCompany’soperation.Conditions andpricesoftheseacquisitionsarecomparabletoacquisitionsfromathirdparty.

• All borrowing transactions between the Group companies and relatedcompaniesarebasedon5.975-6.1813p.a.interestcharges.Suchinterestrates


are averagely close to or slightly lower than interest charges on borrowingsfromfinancialinstitutions.TheseborrowingsarenecessaryandreasonableandbenefittheCompany’soperations.

• All lendingtransactionsbetweentheGroupcompaniesandrelatedcompaniesare based on 5.975-6.1813 p.a. interest charges. Such interest rates areaveragelyclosetoorslightlyhigherthan interestratesof financial institutions.These lendings are necessary and reasonable and benefit the Company’soperations.

As of 31 December 2012, the Company got credit lines from 4 commercialbanksfortotalamountof6,377.00millionbaht.Detailsareasfollows:-

- Overdraftof20.00millionbaht, - Letterofcredit/trust receiptof665.00million, inwhichGKAandGKPcan

sharefor130.00millionbahtand40.00millionbahtrespectively, - Bankguaranteeof345.00millionbaht,inwhichKNPandGKAcansharefor

50millionbahtand180millionbahtrespectively, - Letterofguaranteeandletterofcredit/trustreceipt(Multi)of1,536.50million

baht,inwhichGKA,GKP,KNP,GPGandGPScansharefor1,536.50millionbaht,

- Shorttermcreditlineof2,169.00millionbaht, - Creditlineforforeignexchangeforwardcontractsof1,641.50millionbaht,in

whichGKAandGKPcanshare for5.00millionbahtand4.00millionbahtrespectively.

All these credit lines are guaranteed by the right to claim the Company’sdeposit, mortgages of land and buildings of the Company’s and subsidiaries’directors (details in 5.1 Operating fixed assets), collaterals by the Company’ssubsidiar ies, and col laterals by the Company’s directors - Mr.GunkulDhumrongpiyawutandMs.SopachaDhumrongpiyawut,andpledgeofGUNKULsharesheldbyGKG.


Related

companies/persons Relationship Summary Reason and necessity

1.Mr.Gunkul President Borrowingcollaterals, -BanksaskedMr.Gunkul

Dhumrongpiyawut totalvalueof1,135.00 Dhumrongpiyawuttoplace

millionbaht collateralforborrowingsasheis

amajorshareholderanddirector.

2.Ms.Sopacha Chairmanof Borrowingcollaterals, -BanksaskedMs.Sopacha

Dhumrongpiyawut ExecutiveDirectors totalvalueof900.00 Dhumrongpiyawuttoplace

millionbaht collateralforborrowingsassheis

amajorshareholderanddirector.

3.G.K.Assembly Subsidiary Borrowingcollaterals, -BanksasksGKAtoplace

Co.,Ltd. totalvalueof410.00 collateralforborrowingsasitisa

millionbaht subsidiaryandanownerof

collateralassets.

4.K.N.P.Supply Subsidiary Borrowingcollaterals, -BanksasksKNPtoplace


millionbaht subsidiary,anownerofcollateral

assets,andsharestheborrowing

amount.

5.G.K.PowerProducts Subsidiary Borrowingcollaterals, -BanksasksGKPtoplace


millionbaht subsidiary,sharestheborrowing

amount.

Notes:Incudingcreditlineforforeignexchangeforwardcontracts.

Opinion of audit committee : These transactions benefit the Company, and thepersons and subsidiaries have placed their assets as collateralswithout asking foranyreturn.

Asof31December2012,K.N.P.SupplyCo.,Ltd.,asubsidiary,gotcreditlinesfrom4 commercial banks, for total amount of 1,667.92million baht.Details are asfollows:-


- Letterofcredit/trustreceiptof15.00millionbaht,

- Promissorynotesof10.00millionbaht,

- Creditlineforforeignexchangeforwardcontractsof15.42millionbaht,

- Letter of guaranteeof 1,627.50millionbaht, 1,586.50million ofwhich is apartofthe1,716.50-million-bahtcreditlinegiventoGUNKUL.

Allthesecreditlinesareguaranteedbypledgesofthesubsidiary’sdepositandpromissory notes, collaterals by the parent company and its subsidiaries, andcollaterals by the company’s directors - Mr.Gunkul Dhumrongpiyawut and Ms.SopachaDhumrongpiyawut.

Related

companies/persons Relationship Summary Reason and necessity

1.Mr.Gunkul President Borrowingcollaterals, -BanksaskedMr.Gunkul

Dhumrongpiyawut totalvalueof65.42 Dhumrongpiyawuttoplace

millionbaht collateralforborrowingsasheis

thecompany’sdirector.

2.Ms.Sopacha Chairmanof Borrowingcollaterals, -BanksaskedMs.Sopacha

Dhumrongpiyawut ExecutiveDirectors totalvalueof81.42 Dhumrongpiyawuttoplace

millionbaht collateralforborrowingsassheis

thecompany’sdirector.

Notes :Incudingcreditlineforforeignexchangeforwardcontracts.

Opinion of audit committee : These transactions are reasonable as they areguarantees for a subsidiary, and the persons have placed collaterals for thesubsidiary’sborrowingwithoutaskingforanyreturn.

Asof31December2012,GunkulPowergenCo.,Ltd.,asubsidiary,gotcreditlinesfrom2commercialbanks,fortotalamountof3,131.10millionbaht.Detailsareasfollows:-

- Longtermcreditlineof2,347.10millionbaht,

- Currencyhedgecontractof828.00millionbaht.


All these credit lines are guaranteed by the right to claim the subsidiary’sdeposit,pledgesofdeposit accountof thesubsidiary,mortgagesof land,buildingsandequipmentofthesubsidiary,andpledgeofGUNKULsharesheldbyGKG.Note:Includingforeignexchangeforwardcontractandexcludingcurrencyhedgecontract.

Opinion of audit committee : These transactions are reasonable as they areguarantees for a subsidiary, and the said company has placed collaterals for thesubsidiary’sborrowingwithoutaskingforanyreturn.

Asof31December2012,G.K.PowerProductsCo.,Ltd.,asubsidiary,gotcreditlinesfrom2commercialbanks,whicharejointcreditlineswiththeparentcompany.Detailsareasfollows:-

- Letter of credit/trust receipt of 40.00million baht,which is a part of 390-million-bahtcreditlinegiventoGUNKUL,

- Letterofguaranteeof1,536.50millionbaht,whichisthesameas1,536.50-million-bahtcreditlinegiventoGUNKUL,

- Foreignexchangeforwardcontractsof4.00millionbaht,whichisapartof10.00-million-bahtforeignexchangeforwardcontractsgiventoGUNKUL.

All these credit lines are guaranteed by the parent company, andMr.GunkulDhumrongpiyawutandMs.SopachaDhumrongpiyawut,thecompany’sdirectors.

Opinion of audit committee : These transactions are reasonable as they areguarantees forasubsidiaryby theparentcompanyandpersonswithoutasking foranyreturn.

Asof31December2012,G.K.AssemblyCo.,Ltd.,asubsidiary,gotcreditlinesfrom 2 commercial banks, which are joint credit lines with the parent company.Detailsareasfollows:-

- Letterofcredit/trustreceiptof130.00millionbaht,whichisapartof1,375-million-bahtcreditlinegiventoGUNKUL,

- Letterofguaranteeof1,716.50millionbaht,whichisthesameas1,716.50-million-bahtcreditlinegiventoGUNKUL,


- Foreignexchangeforwardcontractsof5.00millionbaht,whichisapartof20.00-million-bahtforeignexchangeforwardcontractsgiventoGUNKUL.

All thesecredit linesareguaranteedby theparentcompany,andMr.GunkulDhumrongpiyawutandMs.SopachaDhumrongpiyawut,thecompany’sdirectors.

Opinion of audit committee : These transactions are reasonable as they areguarantees forasubsidiaryby theparentcompanyandpersonswithoutasking foranyreturn.

Asof31December2012,WindEnergyDevelopmentCo.,Ltd.,asubsidiary,gotacreditlinefrom1commercialbankintheformofborrowingof348.00millionbaht.Detailsareasfollows:-

- Shorttermcreditlineof348.00millionbahtforpurchaseofland.

This credit line is guaranteed by the mortgage of land, pledge of sharecertificateofthecompany,andpledgeofGUNKUL’ssharesheldbyGKG.

Opinion of audit committee :This transaction is reasonableas itsguaranteesaremadebyplacingthecompany’sassetsascollaterals.

Asof31December2012,G-PowerSourceCo.,Ltd.,anassociatedcompany,got credit lines from 2 commercial banks, in the form of borrowings of 3,921.40millionbahtintotal.Detailsareasfollows:-

- Letterofguaranteeof1,540.40millionbaht,

- Longtermcreditlineof205.74millionbahtforpurchaseoflandandprojectreserve,

- Longtermcreditlineof2,175.26millionbahtforpowerplantconstruction.

Allthesecreditlinesareguaranteedbymortgagesofthecompany’slandandbuildings, pledges of machinery and equipment, pledges of the company’s sharecertificateandpledgesofthecompany’sdeposit.

1�0 Smart Energy in Action

Opinion of audit committee :Thistransactionisreasonableastheguaranteesaremadebyplacingthecompany’sassetsascollaterals.

��.� Policy and procedure of related transaction approval

Related transactions between the Company and its subsidiaries and relatedcompanies/personsdependon reason, necessity andbenefit to theCompanyasawhole. Price has to be fair or equivalent to normal business condition and incompliancewith rulesand regulations.TheCompanysetsproceduresandstepsofapprovingsuchrelatedtransactionsbynotallowingmanagementorrelatedpersonswhohaveconflictofinterestinthattransactiontoparticipateintheapprovalprocess.Incasethistransactioninvolvesrelatedpersonwhomayhaveconflictofinterest,theCompanywillpropose it to theauditcommittee forconsideration. Incase that theaudit committee has no experience in that field, the Company may hire anindependentexpertortheCompany’sauditortogiveopinionsonthatdealandthenpropose the transaction to the board of directors or shareholders meeting forapproval.

TheCompany’sboardofdirectorshascompliedwithSecuritiesandExchangeActandotherrelatedrulesandregulations, includingcriteriaonrelatedtransactionsandacquisitionanddisposalofmaterialassetsoftheCompanyanditssubsidiaries,in order to avoid any conflict of interest and to create maximum benefit to allshareholders.

��.� Policy and trend to do related transactions in the future

1. Trend of related transactions with persons with possible conflict of interest

• K.N.P. SupplyCo., Ltd., G.K. AssemblyCo., Ltd. andG.K. Power ProductsCo.,Ltd.:TheCompanywillcontinuetohaverelatedtransactionswiththesesubsidiaries, which are purchase/sale of goods, purchase/sell of assets,lending/borrowing includingguaranteesof loans, and takingpledgesof thesubsidiaries’assetsfortheCompany’sloans.

1�1Gunkul Engineering Public Company Limited

• GunkulPowergenCo.,Ltd.andWindEnergyDevelopmentCo.,Ltd.:operateelectricity power production and selling business. Therefore, the Companyandthesubsidiariesmayhaverelatedtransactionsconstantly,whicharesaleofgoods,purchase/saleofassets,lending/borrowingincludingguaranteesofloans, and taking pledges of the subsidiaries’ assets for the Company’sloans.

• G-PowerSourceCo.,Ltd.:operateselectricitypowerproductionandsellingbusiness. Therefore, the Company and the associated companymay haverelated transactions constantly, which are sale of goods, purchase/sale ofassets,lending/borrowing,allofwhichwouldbedoneaccordingtonecessityandonanormalbusinesspractice.

• GunkulGroupCo.,Ltd.:BeingthemajorshareholderoftheCompany,ithasgiven the Company some financial supports such as loans and creditguarantees.After the successfuldebt restructuring,GUNKULwill seek lessfinancialsupportfromthiscompany.

• Future Electrical Control Co., Ltd., JV Sri-U-Thong & FEC, and JV FEC &SAC:AstheCompanyandthoseJVsareinconstructionbusinessforciviland systemworks, related transactions happens as usual like purchase ofgoodsorhiretoproducefinishedgoodsetc.SuchrelatedtransactionsarenecessaryandbasedonnormalbusinesspracticetosupporttheCompany’soperations.TheCompany,however,hasnopolicytosellitsproductstoJVsforanyotherpurpose,suchasforre-reselling,exceptforitscorebusiness.TheCompanyalsohasnopolicytogivefinancialaidsorguarantee/pledgetoJVs.

• GunkulMarineLineCo., Ltd. :GUNKULwill no longgive financial aids tothiscompany.

• Gun Natee Co., Ltd., and Gunkul Trading & Agency Co., Ltd. : Aftersuccessfuldebtrestructuringwithfinancialinstitutions,itisexpectedthattheCompanywillnolongerborrowmoneyfromthesecompany.

• GunkulEngineering(2000)Co.,Ltd.,andG.M.SupplyandConstructionCo.,Ltd.:AsthesetwocompaniesrentlandandbuildingswhichbelongtoMr.GunkulDhumrongpiyawutduring1July2009-30June2012andextendtherental for another 3 years from 1 July 2012 - 30 June 2015. So the


Companyhastosub-rentsuchlandandbuildingsfromthesecompaniesforuseinbusinessoperations.

• Jaraslut Patanakarn Electricity Co., Ltd. : The Company no longer hastransactionswiththiscompanyasithasceasedoperationsfordissolution.

• G.E.S.Logistics(Thailand)Co.,Ltd.:operatesshippingandinternationallinerbusiness. TheCompanywill continue to have related transactionwith thiscompany,whichisshippingofmerchandise.

• Mr.Gunkul Dhumrongpiyawut and Ms.Sopacha Dhumrongpiyawut : Onesubsidiary has signed a land lease contract with Mr.GunkulDhumrongpiyawut foruseasgoodsandequipmentstorage.Guaranteesofcreditlineanduseofthedirectors’assetsforloancollateralwillcontinue.

2. Policy on related transactions in the future

IftheCompanyhastodorelatedtransactionsbetweenpersonswhomayhaveconflictof interest, theCompanyhaspolicy to request theauditcommittee togiveopinionsonnecessityandsuitabilityofthetransaction.Incasetheauditcommitteehasnoexperienceonthatfield,theCompanywillhireindependentexpertorinternalauditor to give opinions on that transaction and then propose this to board ofdirectorsorshareholders.

Policyonrelatedtransactionsisclassifiedasfollows:-

• Normalpracticetransactionsandtransactionsinsupportofnormalbusinessinclude buy/sell goods and/or hiring to produce finished goods. TheCompanyhaspolicytoletauditcommitteetoconsiderandgiveopinionsonreasonandnecessityoftransaction.Pricing&tradeconditionsshouldbefairand have no conflict of interest involved. The Company has policy to letauditcommitteetoconsiderandgiveopinionsonthattransactiononreasonand necessity on quarterly basis and to comply with Securities andExchange Act and related rules and regulations including disclosure ofrelatedtransaction.

• Other transactions apart from normal transactions and transactions insupportofnormalbusinessincludesell/buyotherassetsorotherservicesorgiving/taking financial aids. The Company has policy to request the auditcommittee to consider and give opinions on reason and necessity of that

1��Gunkul Engineering Public Company Limited

transactionandcomplywithSecuritiesandExchangeActandotherrelatedrules and regulations including disclosure of related transaction aswell asthe acquisition and disposal ofmaterial of the Company and subsidiaries.TheCompany,however,hasnopolicytolendmoneytopersonwithconflictofinterestforuseindoingbusinessfortheCompany

The Company’s board of directors will comply with Securities and ExchangeAct and other related rules and regulations including disclosure of relatedtransactions as well as the acquisition and disposal of material assets of theCompany or subsidiaries, in order to prevent such transactions from posing anyconflict of interest and to create maximum wealth to shareholders. The Companydiscloses related transactions in its annual report and in the notes to the auditedfinancialstatements.


��. Summary of Financial Statements

Financial Statements

(1) Accounting Audit Report

• Thereportoftheaccountingauditorforthecompany’sfinancialstatementsand the consolidated financial statements for the company and itssubsidiariesfortheyears2010and2009,whichwereauditedbyMr.SomyotWiwatapinai,CertifiedPublicAccountant(Thailand)No.5476fromSPAuditCompany Limited, who expressed his unbiased opinion that the abovefinancialstatementsshowtheconsolidatedfinancialstatuson31December2010 and 2009; the consolidated business performance and consolidatedcash flow for the years ending 31 December 2010 and 2009 for thecompanyanditssubsidiaries;theseparatefinancialstatementsshowingthefinancial status on 31 December 2010 and 2009; the company’s businessperformance and cash flow for the years ending 31 December 2010 and2009 as being properly accurate in terms of relevant content and incompliancewithgenerallyacceptedaccountingprinciples.

• Thereportoftheaccountingauditorforthecompany’sfinancialstatementsand the consolidated financial statements for the company and itssubsidiariesfortheyears2011and2010,whichwereauditedbyMr.SomyotWiwatapinai,CertifiedPublicAccountant(Thailand)No.5476fromSPAuditCompany Limited, who expressed his unbiased opinion that the abovefinancialstatementsshowthecompany’sconsolidatedfinancialstatuson31December 2011 and 2010; the consolidated business performance andconsolidated cash flow of the company and its subsidiaries for the yearsending 31 December 2011 and 2010; the separate financial statementsshowingthefinancialstatuson31December2011and2010;thecompany’sbusinessperformanceforcashflowfortheyearsending2011and2010asbeingproperlyaccurateintermsofrelevantcontentandincompliancewithgenerallyacceptedaccountingprinciples.


• Thereportoftheaccountingauditorforthecompany’sfinancialstatementsand the consolidated financial statements for the company and itssubsidiariesfortheyears2012and2011,whichwereauditedbyMissSusanEiamvanicha,CertifiedPublicAccountant(Thailand)No.4306fromSPAuditCompany Limited, who expressed her unbiased opinion that the abovefinancialstatementsshowthecompany’sconsolidatedfinancialstatuson31December 2012 and 2011; the consolidated business performance andconsolidated cash flow of the company and its subsidiaries for the yearsending 31 December 2012 and 2011; the separate financial statementsshowingthefinancialstatuson31December2012and2011;thecompany’sbusinessperformanceforcashflowfor theyearsending2012and2011asbeingproperlyaccurateintermsofrelevantcontentandincompliancewithgenerallyacceptedaccountingprinciples.


(2)

Tabl

e Su

mm

ary

of F

inan

cial S

tate

men

ts

Gun

kul E

ngin

eerin

g Pu

blic C

ompa

ny L

imite

d &

Subs

idiarie

s Fi

nanc

ial S

tate

men

ts for

31

Dec

embe

r 20

10 -

201

2

Cons

olid

ated

Se

para

te F

inan

cial S

tate

men

ts

2012

1)

2011

2)

2010

3)

2012

20

11

2010

Desc

riptio

n M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t

Curre

nt A

sset

s

Cash&CashEquivalents

581.93

314.96

214.80

396.92

265.71

196.40

TradeandOtherAccountReceivables-Net

1,254.79

644.03

409.76

1,191.29

1,413.61

371.77

UnbilledReceivables–RelatedParties

17.06

--

17.09

176.47

-

DepositforPurchaseofGoods

10.67

60.45

54.52

5.88

60.45

44.65

Advancepaymentstosubcontractor

146.96

23.23

-146.96

23.23

-

ReceivablefromRevenueDepartment

37.71

140.95

11.17

--

-

Inventories

412.59

382.59

342.80

234.70

180.08

166.43

ConstructioninProgress

55.82

150.30

-55.82

808.54

-

Short-TermLoanstoRelatedParties

29.25

--

29.25

176.15

4.95

OtherCurrentAssets

--

2.18

--

2.16

To

tal C

urre

nt A

sset

s 2,54

6.78

1,71

6.51

1,03

5.23

2,07

7.91

3,10

4.24

78

6.36

FixedDepositsandbillofexchangepledged

ascollateral

605.17

493.90

163.34

259.18

143.06

113.04

Investmentsinassociate

321.41

--

383.19

--

Investmentsinsubsidiaries

--

-1,816.85

1,378.36

449.36

Investmentproperty

31.19

--

--

-

Property,PlantandEquipment-Net

2,763.89

3,243.47

505.42

46.53

26.70

18.54

IntangibleAssets–Net

681.50

66.05

66.58

0.07

0.19

0.31

RetentionReceivables

--

-68.83

--

OtherNon-CurrentAssets

8.33

19.85

19.14

0.65

0.47

0.51

To

tal F

ix As

sets

4,41

1.49

3,82

3.27

75

4.48

2,57

5.30

1,54

8.78

58

1.76

Tota

l Ass

ets

6,95

8.27

5,53

9.78

1,78

9.71

4,65

3.21

4,65

3.02

1,36

8.12


Co

nsol

idat

ed

Sepa

rate

Fin

ancial S

tate

men

ts

2012

1)

2011

2)

2010

3)

2012

20

11

2010

Desc

riptio

n M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t

Liab

ilities

and

Shar

ehol

ders

’ Equ

ity

Cu

rrent

Liabi

lities

BankOverdrafts&Short-TermLoansfrom

FinancialinSituations

1,686.25

2,572.45

247.81

1,231.78

2,552.22

82.31

TradeandOtherAccountsPayable–Net

879.21

446.77

180.05

1,028.14

533.45

221.51

AdvancesReceivedfromEmployersand

ConstructionRevenueinAdvance

3.45

225.33

-3.45

225.32

-

Payableforpurchasesharesofsubsidiary

92.36

--

92.36

--

AssetsPayable

246.09

35.98

177.00

--

57.90

PayabletoRevenueDepartment

10.84

12.30

1.29

6.30

10.09

-

CurrentPortionofObligationunder

FinanceLease

114.11

53.57

37.31

101.36

40.76

22.48

CurrentPortionofLong-TermLoans

4.79

5.19

3.16

3.97

4.81

2.65

Short-TermLoansfromRelatedParties&

Businesses

122.17

85.75

--

--

Provisionforsalesreturn

19.41

--

19.41

-

ProvisionforW

arranty

2.17

2.67

1.35

1.63

1.64

0.08

InvestmentsinSubsidiariesPayable

--

2.05

29.15

-7.65

OtherCurrentLiabilities

--

1.45

--

0.80

To

tal C

urre

nt L

iabi

lities

3,18

0.85

3,44

0.01

65

1.47

2,51

7.55

3,36

8.29

39

5.38


Co

nsol

idat

ed

Sepa

rate

Fin

ancial S

tate

men

ts

2012

1)

2011

2)

2010

3)

2012

20

11

2010

Desc

riptio

n M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t

Non-

Curre

nt L

iabi

lities

Payableforpurchasesharesofsubsidiary

172.50

--

172.50

--

ObligationunderFinanceLease

16.10

8.57

3.41

12.41

6.75

3.41

Long-TermLoansfromFinancialInstitutions

1,363.69

896.66

--

--

ProvisionforW

arranty

0.23

0.56

2.01

0.08

0.39

1.89

EmployeeBenefitObligation

7.29

6.62

-5.14

4.51

-

Retentionpayables

69.28

3.15

-69.28

--

OtherNon-CurrentLiabilities

3.77

0.62

0.62

0.62

0.62

0.62

To

tal N

on-C

urre

nt L

iabi

lities

1,63

2.86

91

6.18

6.04

26

0.03

12

.27

5.92

Tota

l Liabi

lities

4,81

3.71

4,35

6.19

65

7.51

2,77

7.58

3,38

0.56

40

1.30

Shareholders’Equity

AuthorizedShareCapital

440.00

400.00

400.00

440.00

400.00

400.00

Issued&PaidUpShareCapital

440.00

400.00

400.00

440.00

400.00

400.00

Premium

onShareCapital

425.12

425.12

425.12

425.12

425.12

425.12

SurplusfromReorganizationunder

CommonControl

93.62

93.62

93.62

-

-

AccruedProfit(Loss)

964.42

264.85

213.46

1,010.52

447.34

141.70

SubsidiaryShareholders’Equity

221.40

--

--

-

Tota

l Sha

reho

lder

s’ E

quity

2,14

4.56

1,18

3.59

1,13

2.20

1,87

5.64

1,27

2.46

96

6.82

Tota

l Liabi

lities

& Sh

areh

olde

rs

6,95

8.27

5,53

9.78

1,78

9.71

4,65

3.22

4,65

3.02

1,36

8.12

4)

4)


Gun

kul E

ngin

eerin

g Pu

blic C

ompa

ny L

imite

d &

Subs

idiarie

s Pr

ofit-

Loss

Sta

tem

ents

for

the

Yea

rs E

ndin

g 31

Dec

embe

r 20

10 -

201

2

Rem

arks:

1)Consolidatedfinancialstatementsattheyearending2010wherebyGunkulEngineeringPublicCompanyLimitedheldsharesinK.N.P.SupplyCo.,Ltd.,G.K.PowerProducts

Co.,Ltd.,G.K.AssemblyCo.,Ltd.andGunkulPowergenCo.,Ltd.ataproportionof99.99percent,andinG-PowerSourceCo.,Ltd.ataproportionof98.98percent.

2)Consolidatedfinancialstatementsattheyearending2011wherebyGunkulEngineeringPublicCompanyLimitedheldsharesinK.N.P.SupplyCo.,Ltd.,G.K.PowerProducts

Co.,Ltd.,G.K.AssemblyCo.,Ltd,GunkulPowergenCo.,Ltd.andG-PowerSourceCo.,Ltd.ataproportionof99.99percent.

3)Consolidatedfinancialstatementsattheyearending2012wherebyGunkulEngineeringPublicCompanyLimitedheldsharesinK.N.P.SupplyCo.,Ltd.,G.K.PowerProductsCo.,

Ltd.,G.K.AssemblyCo.,Ltd.andGunkulPowergenCo.,Ltd.ataproportionof99.99percent.andheldsharesinWindEnergyDevelopmentCo.,Ltd.ataproportionof70percent.

4)IssuedandPaidupCapitalisintheamountof439,999,984shares.

Co

nsol

idat

ed

Sepa

rate

Fin

ancial S

tate

men

ts

2012

1)

2011

2)

2010

3)

2012

20

11

2010

Desc

riptio

n M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t M

illion

Bah

t

SalesIncome

4,305.52

2,651.52

1,288.76

4,646.97

4,145.75

1,192.84

OtherIncome

458.36

17.19

9.31

189.75

30.72

2.83

To

tal I

ncom

e 4,76

3.88

2,66

8.71

1,29

8.07

4,83

6.72

4,17

6.47

1,19

5.67

CostofSales

3,235.96

2,006.12

922.15

3,689.02

3,390.00

938.36

Sales&AdministrativeExpenses

339.98

328.31

160.66

228.46

243.20

117.82

Financecost

103.77

57.16

6.69

47.52

41.85

6.33

Shareoflossfrominvestmentsinassociates

37.97

23.12

25.69

31.70

19.17

22.40

Shareoflossfrominvestmentsinassociates

(48.67)

-

--

-

Incometax

227.92

164.47

59.71

196.85

140.20

34.80

Tota

l com

preh

ensiv

e in

com

e fo

r the

per

iod

769.61

89

.53

123.17

64

3.17

34

2.05

75

.96

EquityholdersoftheCompany

779.56

89.53

643.17

342.05

Non-controllinginterestsofthesubsidiaries

(9.95)

-

--

Numberofweightedordinayshares

(Milionshare)

440.00

4)

400.00

321.92

440.00

4)

400.00

321.92


Gunkul Engineering Public Company Limited & Subsidiaries Statements of Cash Flow for the Years Ending 31 December 2010 - 2012

Separate Financial Consolidated Statements 2010 2011 2012 2010 2011 2012 Million Million Million Million Million Million

Description Baht Baht Baht Baht Baht Baht

Cash Flow from Operating NetProfit(Loss)beforeTax1) 182.89 254.00 1,007.48 110.76 482.26 840.02CashReceipt-PaymentAdjustmentsAffecting NetProfit(Loss) BadDebts&DoubtfulAccounts(Reversal) (0.53) 0.82 1.90 (0.53) 0.36 1.02 Unrealized(Profit)LossfromExchangeRates (0.63) 62.91 6.91 (0.71) 62.26 7.59 LossesfromProductDiscounts(Reversal) 2.71 5.76 25.55 0.80 (1.08) 17.82 Lossonimpairment - - 1.38 - - - Writenoffexpense - - 6.62 - - - OtherIncome (1.67) (0.68) - - (0.53) - DividendsReceivable - - - - (19.84) (25.57) Depreciation&AmortizationCosts 23.84 32.62 47.99 7.15 3.90 4.76 Profits(Losses)fromAssetSales (0.01) 0.03 (.97) (0.01) - (.81) IncomefromLong-TermCreditorAmortization - - - - - - ProductWarrantyEstimatedLiabilities 0.35 (0.13) (.83) (0.72) 0.07 (.31) Provisionforsalesreturn - - 19.42 - - 19.42 EstimatedEmployeeBenefitLiability - 1.03 1.03 - 0.63 0.63 Gainondisposalofinvestmentsinsubsidiary - - (416.22) - - (141.53) Shareoflossfrominvestmentsinassociates - - 48.67 - - - Intragroupprofitrecognisedinfixedassets - - (8.32) - - - Shareoflossofnoncontrolinginterest - - (9.94) - - - InterestReceivable (1.65) (11.94) (15.93) (1.34) (8.18) (11.12) InterestExpenses 6.69 57.15 103.74 6.33 41.85 47.52ProfitfromOperationsbeforeChangesinAssets& OperatingLiabilities 211.99 401.57 818.48 121.73 561.70 759.43 (Increase)DecreaseinTradeAccountsReceivable (179.40) (212.37) 769.08 (142.19) (1,195.51) 414.79 (Increase)DecreaseinDepositsonGoods-Net (42.27) (7.86) 49.78 (32.46) (15.80) 54.57 (Increase)DecreaseinAdvanceContractor Payments - (23.23) (123.72) - (23.23) (123.72) (Increase)DecreaseinRevenueDepartmentReceivable (11.05) (129.78) (15.27) (1.89) 2.01 - (Increase)DecreaseinInventory-Net (79.93) (45.32) (56.32) (20.56) (334.81) (72.45) (Increase)DecreaseinOtherCurrentAssets (2.06) - - (0.16) - -


(Increase)DecreaseinOngoingConstruction CostsaccordingtoContract - (150.30) 358.03 - (486.30) 752.72 (Increase)decreaseinconstructioninprogress - - 66.13 - - 0.45 (Increase)DecreaseinOtherNon-CurrentAssets (5.05) 2.97 0.88 1.66 0.04 (.19) Increase(Decrease)inTradeAccountsPayable 88.81 258.11 426.70 46.12 301.17 491.35 (Increase)DecreaseinRevenueDepartment AccountsPayable (5.34) 11.02 (1.46) (3.86) 10.09 (3.79) (Increase)DecreaseinConstructionWork AdvancePayments - 225.33 (221.88) - 225.33 (221.88) Increase(Decrease)inOtherCurrentLiabilities 0.05 - - (0.24) 9.00 - Increase(Decrease)inOtherNon-CurrentLiabilities - 3.15 3.15 - - - CashEmployeeBenefitsPayable - (2.54) (.36) - (2.54) -CashInterestReceivable 0.81 11.99 8.28 0.57 6.15 6.31CashInterestPayable (6.61) (58.69) (94.18) (5.80) (40.60) (43.68)CashJuristicPersonIncomeTaxPayable1) (41.41) (152.21) (167.22) (25.37) (121.93) (136.24)

Net Cash Gained from (Used) Operations Activities (67.34) 131.84 1,820.10 (62.13) (1,105.23) 1,877.67 Cash Flow from Investing Activities

Cashpaidforsharespayable - (57.90) - - (57.90) (7.64)Cashpaidforinvestmentsinassociate - - (57.60) - - (57.60)CashPayablefromInvestmentsinSubsidiaries (5.44) - (218.41) (81.43) (929.00) (979.98)Cashreceivedfromsaleofinvestment - - 594.82 - - 594.92CashReceivedfromDividends - - - - 17.08 28.33(Increase)decreaseinshort-termloanstorelated parties - - (29.25) 1.28 (171.20) 146.91Cashpaidforinvestmentproperty (32.57) Cashpaidforpurchaseofproperty,plantand equipmentandpayableforpurchaseofassets (218.73) (2,832.22) (1,194.03) (2.51) (2.43) (15.43)CashReceivedfromAssetSales 0.38 0.07 2.81 0.06 0.06 1.27(Increase)DecreaseinBankDepositswith GuaranteeObligations (129.71) (330.68) (419.98) (104.98) (30.02) (116.11)CashPayableforPurchasingIntangibleAssets (0.58) (0.11) (.23) - - Net Cash Gained from (Used) in Investing Activities (354.08) (3,220.84) (1,354.44) (187.58) (1.173.41) (405.33)




Cash Flow from Financing Activities Increase(Decrease)inOverdrafts&Short-Term Loans 221.35 2,243.96 (1,237.89) 67.23 2,389.88 (1,324.48)Proceedsfromlong-termloansfrombanks - 982.41 937.53 - - -Increase(Decrease)inShort-TermLoansfrom AssociatedPersons&Businesses (104.11) (2.05) 157.08 (102.89) (7.65) 29.15CashPayableLiabilitiesunderFinancialLeases (3.45) (4.28) (5.46) (2.41) (3.54) (4.68)CashPayableInterestunderFinancialLeases (0.57) (0.88) (1.35) (0.52) (0.74) (1.12)DividendsPayable (111.30) (30.00) (48.61) (111.30) (29.99) (40.00)CashGainedbyIncreasingCapital 525.12 - - 525.12 - -

Net Cash Gained from (Used) Financing Activities 527.04 3,189.16 (198.70) 375.23 2,347.96 (1,341.13)

Increase(Decrease)inNetCash&Depositsin FinancialInstitutions 105.62 100.16 266.96 125.52 69.32 131.21Cash&DepositsatFinancialInstitutionsat BeginningofPeriod 109.18 214.80 314.97 70.87 196.39 265.71Cash&DepositsatFinancialInstitutionsat EndofPeriod 214.80 314.96 581.93 196.39 265.71 396.92

Remarks: 1) Accounting standards effective after 1 January 2008 stipulate that the net profits before

incometaxbeusedincalculatingcashflowfromoperatingactivities.




(3) Table Showing Key Financial Ratios

Separate Financial

Consolidated Statements

Description 2010 2011 2012 2010 2011 2012

Liquidity Ratios

LiquidityRatio(equal) 1.59 0.50 0.80 1.99 0.92 0.83

QuickLiquidityRatio(equal) 1.06 0.34 0.65 1.57 0.55 0.55

CashFlowLiquidityRatio(equal) (0.01) 0.09 0.18 (0.16) 0.08 0.16

TradeAccountsReceivableTurnover(equal) 4.13 5.09 4.49 4.06 4.25 3.32

AverageCollectionPeriod(days) 88.45 71.66 81.21 89.84 85.89 109.90

InventoryTurnover(equal) 3.03 4.58 6.46 5.99 5.87 7.27

AverageSalesPeriod(days) 120.46 79.66 56.47 60.93 62.18 50.24

PayableTurnover(equal) 8.11 5.32 4.78 5.18 8.89 3.83

Credit(days) 45.01 68.59 76.30 74.60 41.05 95.28

CashCycle(days) 163.90 82.73 61.38 80.31 107.02 64.86

Profitability Ratios

GrossProfitMargin(%) 28.45 24.34 24.84 21.33 18.23 20.61

OperatingProfitMargin(%) 13.78 11.74 23.33 9.58 12.64 18.35

NetProfitMargin(%) 9.47 3.35 16.36 6.35 8.19 13.30

ReturnonEquity(%) 15.05 7.56 36.35 11.22 26.88 34.29

Efficiency Ratios

ReturnonAssets(%) 9.31 1.62 11.20 6.98 7.,35 13.82

ReturnofFixedAssets(%) 42.21 2.76 27.84 3.99 1,280.92 1,382.36

AssetTurnover(equal) 1.10 0.82 1.72 0.98 155.25 103.95

Financial Ratios

DebttoEquityRatio(equal) 0.58 3.68 2.24 0.42 2.66 1.48

InterestCoverageRatio(equal) 28.36 3.44 8.71 18.51 10.52 16.68

DividendPayout(%) N/A 0.34 N/A 0.09

Other Ratios

EarningsPerShare(baht)1) 0.38 0.22 1.77 0.24 0.86 1.46

BasicEarningsPerShare(baht)2) 0.31 0.22 1.77 0.19 0.86 1.46

BookValuePerShare(baht)2) 2.83 2.96 4.87 2.42 3.18 4.26

Remarks: 1) Earnings Per Share: Calculate with the number of all average weighted common shareswhichhavebeenpaidup.

2) BasicEarningsPerShareandBookValuePerShare:Calculatewiththetotalnumberofallpaidupcommonstocksattheendoftheperiodbyusingtheparvalueofthesharesat1baht/sharetobeusedforcomparison.


��. Management Discussion and Analysis

Performance

• Overall Past Performance

Gunkul Engineering Public Company Limited (“the company” or“GUNKUL”)and itssubsidiaries,namelyK.N.P.SupplyCo.,Ltd. (“KNP”),G.K.AssemblyCo.,Ltd.(“GKA”)andG.K.PowerProductCo.,Ltd.“GKP”),operatethebusinessofmanufacturing,procuringandsellingelectrical equipmentandthe business of procuring and selling equipment for renewable power tocustomers ingovernmentandprivatesectors.GUNKULGroup reorganized itsshareholding structure by holding 99.99% of registered capital of KNP, GKAand GKP in order to eliminate conflict of interest issue and to increasemanagementefficiency.Thereorganizationofsuchstructurewascompletedon30June2009andtheCompanyturnedpublicon10August2009.

On 11 December 2009, the Company set up a subsidiary, GunkulPowergenCo.,Ltd.(“GPG”)toundertakethebusinessofgeneratingandsellingelectrical power to the Provincial Electricity Authority. The Company holds a99.99%stake inGPG registeredcapital. Subsequently in 2010, theCompanypurchased common shares of G-Power Source Co., Ltd., core business ofwhich involvedgeneratingandsellingsolar-basedpower,andheld98.98%ofG-Power Source’s registered capital. In 2011, the Company increased itsinvestmentinG-PowerSourceanditsshareholdingincreasedto99.99%ofthetotalregisteredcapital.

On 30 March 2012, the Company sold 4,500,000 common shares ofG-PowerSourceCo.,Ltd.orequalto60.00%oftotalregisteredcapitalofsaidcompany, totaling 629.92 million baht, to the Electricity Generating PublicCompanyLimited.

On15May2012,theCompanypurchased5,460,000commonsharesoftheWindEnergyDevelopmentCo.,Ltd.orequalto70.00%oftotalregisteredcapitalofsaidcompanyat thepriceof95.60bahtpershare, totaling522.00million, from said company’s shareholder who had no relationship with the


Company. As a result, the Company had control over the Wind EnergyDevelopment Co., Ltd., which undertook business of generating and sellingwind-basedpower.TheCompanyaimedtotakepart indevelopmentofmorecleanenergypowerplants.

• Performance

Revenue

MainrevenueoftheGroupduring2010-2012wasfrom3mainsources,namely business of manufacturing, procurement and sale of equipment forelectrical systems, renewable power systems, and construction of renewableenergy power plants. Revenue from the business of procurement and saleaccounted for approximately 25.61%, business of manufacturing for saleaccounted for approximately16.46%,businessof renewableenergyelectricitygeneration and sale accounted for 3.94%, andbusiness of renewable energypower plant construction accounted for approximately 53.99% of total salerevenueoftheGroupin2012.

Accordingtotheconsolidatedfinancialstatements, revenuefromsaleofthe Group in 2012 was 4,305.22 million baht, increasing by 62.38% whencompared to sale revenue of 2,651.51 million baht in 2011. The increasedamount was from new sources of alternative energy either as the productmanufacturer which amounted to 96.31 million baht, or as the constructionoperator and seller of renewable power plants for non related companies orsubsidiaries which amounted to 1,868.22 million baht. Revenue from existingoversea tradedecreasedby763.95millionbahtand increased fromdomesticrevenueby372.22millionbaht.

Thedecreasedamountofoverseatradeof763.95millionbahtwasduetopricecompetitionandmonetarypolicyoftheUnionofMyanmar.


Revenue structure by product line

2010 2011 2012

Revenue type MB % MB % MB %

1.Revenuefrommanufacturing,procurementand

saleofequipmentforelectricalsystemsand

renewablepowersystems

1.1Procurementforsale

- Safetyandcontrolequipment 199.44 15.48 430.26 16.22 75.19 1.75

- Accessoryequipment 747.83 58.03 1,248.40 47.08 986.15 22.97

- Equipmentandinstruments 21.61 1.68 46.64 1.76 28.22 0.65

- Streetlightequipment 17.88 1.39 38.58 1.46 10.10 0.24

- Windturbineequipment - -

Total 986.76 76.58 1,763.88 66.52 1,099.66 25.61

1.2 Manufacturingforsale

- Safetyandcontrolequipment 101.38 7.87 78.61 2.96 353.16 8.23

- Accessoryequipment 190.87 14.81 279.20 10.53 298.93 6.97

- Equipmentandinstruments 2.14 0.17 1.66 0.06 3.17 0.08

- Streetlightequipment 7.50 0.58 5.82 0.22 50.98 1.18

Total 301.89 23.43 365.29 13.78 706.24 16.46

2.Revenuefromgenerationandsaleofpowerfrom

renewableenergy

-Generationandsaleofsolar-basedpower - - 72.50 2.73 168.81 3.94

3.Revenuefromconstructionofrenewableenergy

powerplant - - 449.84 16.97 2,318.06 53.99

Total revenue 1,288.65 100.00 2,651.51 100.00 4,292.77 100.00

The Group sold products to domestic and internationalmarkets, whererevenue fromdomestic salewas approximately 45-80%of total sale revenueduring 2010-2012. Main customers were both domestic and foreign stateagencies,aswellascustomersinbusinessofpowergenerationfromrenewableenergy.


Revenue structure by customer segment

2010 2011 2012

Revenue MB % MB % MB %

Statesectorcustomers

- Revenuefromsaleofequipmentforelectrical

systemsandrenewablepowersystems 448.44 34.80 344.57 13.00 413.03 9.63

- Revenuefromsaleofpower - - 72.50 2.73 168.81 3.94

Privatesectorcustomers

- Revenuefromsaleofequipmentforelectrical

systemsandrenewablepowersystems 239.96 18.62 416.78 15.72 789.00 18.38

- Revenuefrompowerplantconstruction - - 449.84 16.96 2,318.06 53.99

Foreigncustomers 600.36 46.58 1,367.82 51.59 603.87 14.06

Total revenue 1,288.76 100.00 2,651.51 100.00 4,292.77 100.00

In2011,revenuefromsalesaccordingtoconsolidatedfinancialstatementtotaled2,651.51millionbaht, increasingfrom2010by1,362.75millionbahtorby105.74%.Theincreasedamountwasfromrevenuefromrenewableenergy,the new business, which comprised 72.50 million from power manufacturingand449.84millionbahtfromconstructionofrenewableenergypowerplantsfornon-related companies or subsidiaries, revenue from existing oversea tradebusinesswhichincreasedby761.33millionbahtandincreasedfromdomesticdealsby79.08millionbaht.

Cost of sales and gross profit

Accordingtotheconsolidatedfinancialstatements,theGrouphadgrossprofit of 28.45%, 24.34% and 24.84% for 2010, 2011 and 2012 respectively.Thetrendofsaidprofitwas in thesamedirectionasthe increase inrevenuefromoutsourcedmanufacturingandprocurementforsalesandfromrenewableenergybusiness,inresponsetochangingmarketdemands.

Sales and administrative expenses

The Company’s sales and administrative expenses account forapproximately10.00-15.00%of total revenueof theGroup,anddifferunderaflexiblebudgetcontrol.


TheGroup’ssalesandadministrativeexpenses in2010,2011and2012were 189.05 million baht, 341.42 million baht and 377.95 million bahtrespectively,equal to14.53%,13.17%and7.93%oftotal revenue.Suchratiovaried according to sales volumes, expenses in business expansion, andaccountingstandards.

Net profit

TheCompany’snetprofitfor2012accordingtotheconsolidatedfinancialstatements was 769.61 million baht, increasing by 680.04 million baht whencompared to 2011 that registered net profit of 89.52 million baht, due toincrease in revenue from building contractor business which was 1,868.22million baht, revenue from sale of investmentwhichwas 416.22million baht.Revenuefromservicerenderedandgainonexchangerateincreasedby12.75and 13.14 million baht respectively. Financial costs for 2012 amounted to103.77million,increasingfrom57.16millionbahtin2011by46.61millionbahtorby81.54%becauseofinterestpayableonloanswithfinancialinstitutionsforuseindevelopingsolar-basedpowerprojectsoftheCompany.

Financial status

Total assets

TheCompany’stotalassetsatending2012,2011and2010accordingtoconsolidated financial statements were 6,958.27 million baht, 5,539.77 millionbahtand1,789.71millionbahtrespectively.Maincirculatingassetsweretradereceivablesandinventorywhichvariedaccordingtosalesvolumes,constructionof renewable energy power plants for third parties, the ability to collectpaymentsfromcustomers,increaseininvestmentinsubsidiaries,includingcashflow reserved for investment, operations and dividend payment. Main non-circulatingassetswerebuildingsandequipment, inwhich theGroup investedforhigherpowergeneratingproductivity.

Inmobilizing funds for use as revolving capital and investment in fixedassets, the Group obtained funding from increase of registered capital,borrowingsfromfinancialinstitutions,anddivestments.AsaresulttheGroup’sdebt to equity ratio according to the consolidated financial statements


decreasedto2.24times,3.68timesand0.58timesatending2012,2011and2010respectively.

Trade receivables

The Company and its subsidiaries have policy to grant credit tocustomers by considering their financial status, payment history, orderingfrequency and order value. Average credit terms are 60 days for private andstatesectorcustomersand90-120daysforoverseascustomers.

According to the consolidated financial statements, the Group’s tradereceivables (excluding receivables for construction, other items and bad debtallowance) at ending 2010, 2011 and 2012 were 398.18million baht, 617.51million baht and 1,169.76 million baht respectively, with average collectionperiodatrespectiveyear-endsof88days,71daysand81days.TheCompanyhad higher outstanding of trade receivables due to trade receivables-constructionofG-PowerSourceCo.,Ltd.of304millionbahtwasnotyetdue,andtradereceivables-constructionofothercompaniesunderDLCagreementsof298millionbaht.

Terms of the Group’s trade receivables are as follows:-

Tradereceivablesforrelatedbusinesses

2010 2011 2012

MB % MB % MB %

Notyetdue 1.31 43.95 0.08 0.35 400.88 97.69

Overdue

-3monthsorless 1.68 56.37 22.27 99.65 9.45 2.31

-3-6months - - - -

-6-12months - - - -

-Over12months - - - -

Total trade receivables 2.98 100.00 22.35 100.00 410.33 100.00

LessBaddebtallowance - - - - - -



Tradereceivablesforothercompanies

2010 2011 2012

MB % MB % MB %

Notyetdue 337.64 85.66 312.18 52.62 533.53 70.57

Overdue

-3monthsorless 49.15 12.47 176.57 29.76 181.62 24.01

-3-6months 7.75 1.96 103.77 17.49 40.28 5.32

-6-12months 0.03 - 1.66 0.27 2.29 0.30

-Over12months 0.63 0.15 0.97 0.16 1.71 0.22


LessBaddebtallowance (1.06) (0.27) (1.88) (0.31) (3.21) (0.42)


Inventory

Accordingtotheconsolidatedfinancialstatements,theGroup’sinventoryatending2010,2011and2012were366.08millionbaht,411.29millionbahtand467.60millionbahtrespectively.

2010 2011 2012

MB % MB % MB %

Rawmaterials 105.88 28.92 131.63 32.00 88.06 18.83

Productsinmanufacturing 46.23 12.63 46.34 11.26 63.74 13.63

Readymadeproducts 205.01 56.00 214.52 52.15 288.37 61.67

Productsenroute 8.96 2.45 18.80 4.57 27.43 5.87

Total 366.08 100.00 411.29 100.00 467.60 100.00

LessAllowanceforproductdevaluation (23.28) (6.36) (28.70) (6.97) (55.01) (11.76)

Net inventory 342.80 93.64 382.59 93.03 412.59 88.24

TheGrouphasapolicytosetallowancesfordevaluationofdegeneratedproducts,outdatedproductsandold-stockinventorybyconsideringconditionsofeachproduct.TheCompany’sproductsaregenerallyusedforinfrastructureelectrical systems in countries where technology is rarely changed, therebyenabling the Company’s products to be sold continually without becomingoutdated. However, the Group has set devaluation allowance for readymade


productsolderthan3yearsatarateof40%oftheproductvalueamountingto23.28millionbaht,28.70millionbahtand55.01millionbahtatending2010,2011and2012respectively.

The Company had average product sale periods of 120 days, 79 daysand56daysin2010,2011and2012respectively.Mostofthemwereproductsrelatingtoprocurementforsaleandforconstructionofsolar-basedpowerplantconstruction

Investments in subsidiaries and associated companies

TheCompanyhasaninvestmentstructureasfollows:-

Investment Cost method Dividend

Paid-up capital proportion (%) (thousand baht) (thousand baht)

Company 2012 2011 2012 2011 2012 2011 2012 2011

G.K.PowerProductCo.,Ltd. 100,000 100,000 100.00 100.00 80,425 80,425 8,610 2,760

G.K.AssemblyCo.,Ltd. 200,000 200,000 100.00 100.00 163,188 163,188 1,682 9,830

K.N.P.SupplyCo.,Ltd. 50,000 50,000 100.00 100.00 41,408 41,408 15,280 7,250

GunkulPowergenCo.,Ltd. 992,000 280,000 100.00 100.00 992,000 280,000 - -

WindEnergyDevelopment

Co.,Ltd. 103,475 - 70.00 - 539,832 - - -

G-PowerSourceCo.,Ltd. - 750,000 - 100.00 - 813,337 - -

Total 1,816,8531,378,358 25,572 19,840

Land, buildings and equipment

Offices and warehouse of the Company are on land sub-let from Mr.GunkulDhumrongpiyawut.TheCompanyhadbuildingsandequipmentwithnetworth equal to 18.54 million baht, 26.70 million baht and 46.53 million baht2010, 2011 and 2012 respectively. The Company did not significantly makeadditional investments inbuildingsandequipment,except inmorevehicles in2012foruseintheCompany’soperations.

Land, buildings and equipment according to the consolidated financialstatementsoftheGroupfortheyearsended2010,2011and2012equatedto505.42millionbaht,3,243.47millionbahtand2,763.89millionbahtrespectively.


Whencomparedtotheseparatefinancialstatements,theincreaseinnetland,buildings and equipment according to the consolidated financial statementswasveryhighduetoconsolidationofvaluesofland,buildingsandequipmentowned by 4 subsidiaries, especially G.K. Assembly Co., Ltd., which had landandbuildingsof itsown,whileanother2subsidiariesoperatedbusinessesonland sub-let fromMr. Gunkul Dhumrongpiyawut the Company did. Details ofland,buildingsandequipmentofsubsidiariesareasfollows:-

- Gunkul Powergen Co., Ltd.

In 2010, the Company purchased land for operating power plantbusinessatthepriceof20.10millionbaht. Ithadsolarpowerplantandmachinery under construction with a value of 312.59million baht. Saidsolarpowerplantwasoperationalin2011.

In 2011, constructionof solar powerplant, valueof 460.17millionbaht,wascompletedinthefourthquarter.TheCompanyboughtlandforfurther construction of power plant project at the price of 11.91millionbaht.

In 2012, there were 4 solar power plants and machineries underconstruction, value of 1,646.32 million and capacity of 23.5 mw. TheplantswereexpectedtobecomeoperationalinMarch2013.

- G-Power Source Co., Ltd.

In2012, theCompanysold4,500,000commonsharesofG-PowerSourceCo.,Ltd.,totaling629.92millionbahtorequalto60.00%oftotalregistered capital of said company, to the Electricity Generating PublicCompany Limited. As a result, investment in subsidiaries itemwas nowrecorded as investment in associated companies. Therefore, 2012consolidated financial statements did not included assets of 1,974.57millionbaht.

Total liabilities

According to the consolidated financial statement, the Company’s totalliabilities for the years ended2010, 2011and2012were651.46millionbaht,3,440.00millionbahtand3,180.85millionbahtrespectively.In2011,theGroup


had increased consolidated liabilities as compared to 2010 because theCompany’s exports had increased, and the Company and its subsidiarieslaunchedconstructionofsolarpowerplants, therebycausingtheCompanytorequire short- and long-term loanswith trust receiptspayable to support theaforementioned increases in exports and construction in 2011, including in2012.

AlmostalloftheCompany’stotalliabilitieswerecirculatingliabilities.Maincategoriesincludedoverdraftsandshort-termloansfromfinancialinstitutionsata rate of approximately 15-55% of the Group’s consolidated liabilities, tradepayables at a rate of approximately 10-30% of the Group’s consolidatedliabilities, and long-term loans at a rate of 15-20%of consolidated liabilities.TheCompanyusedthese4categoriesaboveassourcesoffundsforprovidingrawmaterials and trade credit, and for construction of solar power plants ofGunkulPowergenCo., Ltd., a subsidiary, andof thecustomers thatused theCompany’srenewableenergypowerplantconstructionservices.

The Group had liquidity ratios according to the consolidated financialstatements in2010-2012amounting to1.59 times,0.50 timesand0.80 timesrespectively.Quickliquidityratioswereequalto1.06times,0.28timesand0.65times.Averagedebtpaymentperiodswere45days,67daysand76days,whilecash cycles of the Group were 163 days, 83 days and 61 days. Whencompared to theGroup’scashcycles, the shorter trendof theGroup’scashcycle resulted from sales expansion and more circulating products as seenfromtheproductsaleperiodsof120days,79daysand56daysagainst thedebtcollectionperiodsof88days,71daysand81days.Mostpaymentsweremade and received through servicing systems of financial institutions whichwere subject to conditionsof longerperiods, thereby causing theCompany’scashcyclestodecrease.

In 2011, the Company mobilized money through loans and constantincrease of registered capital of subsidiaries in preparation for businessexpansion. Consequently, the Company’s consolidated financial statementsregistered increasingdebt toequity ratios,whichwere0.58 times, 3.68 timesand2.24timesin2009,2010and2011.


Shareholders’ equity

The Company’s shareholders’ equity was 966.82 million baht, 1,272.46million baht and 1,875.64 million baht at ending 2010, 2011 and 2012respectively.

As for the consolidated financial statements for the years ended 2010,2011and2012,theGrouphadtotalshareholders’equityamountingto1,132.20million baht, 1,183.60million baht and 2,144.57million baht respectively. Theincrease in the consolidated shareholders’ equity in 2010, 2011 and 2012 ascompared to separate financial statements was a result of the inclusion ofassets, liabilities and operating results of subsidiaries along with surplus ofcapital frommerger of business under single control, which was caused bydifferences between the acquisition costs of subsidiaries and net asset bookvaluesofsubsidiaries.Theconsolidatedshareholders’equityin2011increasedduetonetprofitsfromtaxes,whichwereprofitsfromconstructingsolarpowerplants for third parties and from sale of investments in subsidiaries to thirdparties.Non-controlling interestof subsidiesamounted to221.41millionbaht,derivedfromacquisitionofcontroloverasubsidiary(WindEnergyDevelopmentCo.,Ltd.).

Cash flow

Accordingtoconsolidatedfinancialstatementsfor2010,theGroup’scashflow fromnet operatingprofits decreasedby 67.32millionbecauseof highersales volumes in2010, especially sales to foreigncustomers.This resulted inincreasingcashflowsfromtradereceivablesandmerchandisedeposits.

Total net cash flow used in investment activities amounted to 354.09millionbahtduetoinvestmentsinsubsidiariesof5.42millionbaht,purchaseofassetsof218.73millionbaht,anddepositswithguaranteeobligationsof129.72million baht, all of which incurred from the use of cash flow in aforesaidoperationsandinvestments.

TheCompany’snetmobilizedfundsformanagementamountedto527.03millionbaht,derivedfromcashedgeneratedfromcapitalincreaseintheStockExchange of Thailand and increases in cash overdrafts and short-term loans


amounting to 221.35millionbaht.At the same time, theGroup repaid short-term loans from related persons and businesses amounting to 104.11millionbaht inordertorestructuretheGroup’sfinancialmanagement.Balanceofnetcapitalwas214.80millionbaht.

TheCompany’scashflowfromnormalbusinessoperationsin2011washigher than2010by199.10millionbaht.However, theCompanyhadalreadypaid2,832.22millionbahtforsuppliesandequipmentneededforconstructionsolar-basedpowerplants, andmade reserve for procurement of products forsales.

Therefore, the Company mobilized additional funds for the amount of3,226.37millionbaht in2011andpaiddividendfor2010performancefor theamountof29.99millionbaht.Cashflowavailable for2012was314.96millionbaht.

In 2012, the Company’s net cash flow generated from operations wasover 1,000million baht owing to higher revenue especially from constructionservices, higher debt collection of 769.07 million baht, increase in credit forprocurement of products and supplies for sales and construction of 850.77millionbaht.Despitecashflowpaidformainitemssuchastaxesandinterest,theCompanyhadremainingnetcashflowfromoperationsof1,820.09millionbaht.

Still, the Company had to use cash flow for investment activities, e.g.investments in subsidiaries and associated companies of 276.07million baht,purchaseof theGroup’sproductsanddepositswithguaranteeobligationsof5.42millionbaht,1,194.03millionbahtand419.98millionbaht,andotheritemsof 59.23 million baht. The Company obtained 594.82 million baht fromdivestments,andhadtopaynetinvestmentsof1,354.43millionbaht.

Therefore,theCompanysoughtadditionalfinancialsupportsfromfinancialinstitutions amounting to 937.53 million baht and from related persons andbusinesses amounting to 157.08million baht. Meanwhile, it had already paid1,237.89 million baht for debts incurred from funding, 48.60 million baht fordividends and8millionbaht for other obligations. TheCompanyhada cashflowof581.93millionbahtfor2013businessmanagement.


Auditor fee (for each company)

In 2010, 2011 and 2012, audit fees for the Company and subsidiariescomprisesannualauditfeeandauditfeesforthe3quarters,asperfollowingdetails:-

Gunkul G.K. G.K. Power K.N.P. Gunkul G-Power Wind

Audit fee Engineering Assembly Product Supply Powergen Source 1) Source

2) Total

2010 800,000.00 350,000.00 300,000.00 210,000.00 120,000.00 15,000.00 - 1,795,000.00

2011 850,000.00 350,000.00 300,000.00 230,000.00 250,000.00 230,000.00 - 2,210,000.00

2012 850,000.00 350,000.00 300,000.00 230,000.00 280,000.00 230,000.00 160,000.00 2,380,000.00

Notes: 1) On 30 March 2012, the Company sold common shares of G-Power Source Co., Ltd., accounting for

60.00%oftheregisteredcapital,totheElectricityGeneratingPublicCompanyLimited.2) On 15 May 2012, the Company bought common shares of the Wind Energy Development Co., Ltd.,

accountingfor70.00%oftheregisteredcapital.

Personsorbusinesses related toauditorsorauditoffice,whichwasSPAuditCo.,Ltd.,wasnotrelatedpersonorbusinessoftheCompany.

Factors and influence that may affect operations or financial status in the future

1. Because the Company sells products to customers who are primarilygovernmentagencies,itmaybesubjecttosignificantimpactsonrevenueand business performance in case the government sector changespoliciesof electricity investment, or in case theCompanydoesnotwinbiddings.Furthermore,theCompanyexportsmanyproductstotheUnionof Myanmar. There are possible serious impacts on the Company’sincomeandbusinessperformanceincasetheCompanycannotdeliveritsproducts to the Union of Myanmar (see details in Clause 15.1 :Dependenceonclientrisks).

2. TheCompany is at riskof exchange rate fluctuationbecause it derivesincomefromexportofproducts fordistribution in foreigncountries,andalso imports raw materials from foreign countries. The Company istherefore exposed to risks of volatile exchange rates,whichmay cause


theCompany tomakea losson exchange rates (seedetails inClause15.2:Riskofexchangeratefluctuation).

3. TheGroupfoundedGunkulPowergenCo.,Ltd.tooperatethebusinessofproductionandsaleofelectricity.Inthisregard,ithasappliedforsaleofsolarpowertotheProvincialElectricityAuthorityaccordingtotheprojectforpurchaseofpowerfromverysmallpowerproducers(VSPPs),withatotalproductioncapacityproposedforsaleof30.9megawatts.ItsProject1, Phase 1, capacity of 3.0mwhas been operational since early 2011,whileProject1,Phase2,capacityof4.4mwstarteddistributingelectricalpowerinlate2011.Alltheremainingprojects,withtotalcapacityof23.5mw are in the process of construction and expected to realize incomesince2013onwards.

Expansion of electricity generating and selling business will affect theCompany’s future financial status and business performance in 3 manners, i.e.incomestructure,investmentstructureandcashflow,asfollows:-

• TheGroupwillreceivehigherincomefromthesaleofelectricitywhichisproportional to theamountofelectricitysold, leading tochanges in theGroup’s future incomestructure.Theaforementioned incomefluctuationsdependontheCompany’scapacitytogenerateelectricity.

• TheCompanyhasobtainedinvestmentfundsforthepowerplantprojects,capacities of 3.0mwand 4.4mw, at Petchaboonprovince by incurringdebts,whichcanbecalculatedatadebttoequityratioofapproximately2.5-3.0 times. In the initial period of this investment, the debt toshareholder equity may change from the current ratio, with the liabilityratiobeing increased.Constructionof solarpowerplantswill require aninvestmentofapproximately100-120millionbahtper1mwofcapacity.

• As most expenses of the project are depreciations while realization ofincome from electricity sale is paid in cash, the Group’s cash flowgeneratedfromoperationstendstoincreaseinthefuture.


�0. Board of Directors’ Responsibility for Financial Reporting

TheBoardofDirectors is responsible forGunkulEngineeringPublicCompanyLimited’sfinancialstatementsandGunkulEngineeringPublicCompanyLimitedanditssubsidiaries’ consolidated financial statements, including the financial informationpresentedinthisannualreport.

The aforementioned financial statements are prepared in accordance withgenerally accepted accounting principles, using careful judgment and the bestestimation. Important information is adequately and transparency disclosed in thenotestofinancialstatementsfortheCompanyshareholdersandinvestors.

TheBoardofDirectorshasprovidedandmaintained riskmanagementsystemandappropriateandefficient internalcontrols toensure thataccounting recordsareaccurate,reliableandadequatetoprotect itsassetsanduncoveranyweaknessthatmaybepresentinorderpreventfraudormateriallyirregularoperations.

In this regard, theBoardofDirectorshasappointsanAuditCommittee toberesponsible for reviewing the accounting policy financial reports, review internalcontrols, internal audit and riskmanagement system.TheAuditCommitteehasalsoreviewedadisclosureofrelatedpartytransactions.AlltheircommentsontheseissueshaveincludedintheAuditCommitteeReport,whichpresentedinthisannualreport.

The financial statements of the Company and the consolidated financialstatements of Company and its subsidiaries have been examined by an externalauditor, SP Auditor Co., Ltd. To conduct the audits and express an opinion inaccordancewithgenerallyacceptedauditingstandards,theauditorwasprovidedwithalloftheCompany’srecordsandrelateddataasrequested.Theauditor’sopinionispresentedintheauditor’sreportaspartofthisannualreport.

TheBoardofDirectorsconsiderstheCompany’soverallinternalcontrolsystemsatisfactory and provides credibility and reliability to Gunkul Engineering PublicCompanyLimitedand itssubsidiaries’consolidated financial statements for theyearendedDecember31,2012.TheBoardofDirectorsalsobelievesthatallthesefinancialstatements have been prepared in accordance with generally accepted accountingprincipleandrelatedregulations.

(Mr.GunkulDhumrongpiyawut) ChairmanoftheBoard

February25,2013


��. Independent Auditor’s Report

To the Shareholders of Gunkul Engineering Public Company Limited

I have audited the accompanying consolidated and separate financialstatementsofGunkulEngineeringPublicCompanyLimitedanditssubsidiariesandofGunkul Engineering PublicCompany Limited,which comprise the consolidated andseparatestatementsof financialpositionasatDecember31,2012,and the relatedconsolidated and separate statements of comprehensive income, statements ofchanges in shareholders’ equity and statements of cash flows for the year thenended,andasummaryofsignificantaccountingpoliciesandotherexplanatorynotes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of thesefinancialstatementsinaccordancewithFinancialReportingStandards,andforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditor’s Responsibility

Myresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonmyaudit.IconductedmyauditinaccordancewithStandardsonAuditing.Thosestandardsrequirethat Icomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement. An audit involves performing procedures to obtain audit evidence about theamountsanddisclosuresinthefinancialstatements.Theproceduresselecteddependon the auditor’s judgment, including the assessment of the risks of materialmisstatement of the financial statements,whether due to fraud or error. Inmakingthoseriskassessments,theauditorconsidersinternalcontrolrelevanttotheentity’spreparationandfairpresentationofthefinancialstatementsinordertodesignauditprocedures that are appropriate in the circumstances, but not for the purpose ofexpressinganopinionon theeffectivenessof theentity’s internal control.Anaudit


also includes evaluating the appropriateness of accounting policies used and thereasonablenessofaccountingestimatesmadebymanagement,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

IbelievethattheauditevidenceIhaveobtainedissufficientandappropriatetoprovideabasisformyauditopinion.

Opinion

Inmy opinion, the consolidated and separate financial statements referred toabovepresentfairly, inallmaterialrespects,theconsolidatedandseparatefinancialpositionofGunkulEngineeringPublicCompanyLimitedand its subsidiariesandofGunkul Engineering Public Company Limited as at December 31, 2012, and itsconsolidated and separate financial performance and cash flows for the year thenendedinaccordancewithThaiFinancialReportingStandards.

Othermatter

The consolidated and separate financial statements of Gunkul EngineeringPublic Company Limited and its subsidiaries and of Gunkul Engineering PublicCompanyLimitedfortheyearendedonDecember31,2011wereauditedbyotherauditor in the same firm who expressed an unqualified opinion on these financialstatementinhisreportdateFebruary28,2012anddrawingattentiontotheCompanyanditssubsidiariesadoptedthenewandrevisedfinancialreportingstandardsissuedby theFederationofAccountingProfessions inpreparationandpresentationof thefinancialstatements. SPAuditCompanyLimited

(MissSusanEiamvanicha)

CertifiedPublicAccountant(Thailand)No.4306

Bangkok

February25,2013


STATEMENTS OF FINANCIAL POSITION GUNKULENGINEERINGPUBLICCOMPANYLIMITEDANDITSSUBSIDIARIES

ASATDECEMBER31,2012AND2011

(Unit:Baht)

Consolidated Separate financial statements

Notes 2012 2011 2012 2011

ASSETS

CurrentAssets

Cashandcashequivalent 581,932,818.58 314,963,736.25 396,915,264.53 265,709,067.14

Tradeandotherreceivable-

relatedparties 5.1,6 417,983,693.65 22,356,314.69 423,014,071.69 906,319,388.83

Tradeandotherreceivable-

thirdparties 7 836,805,204.67 621,670,414.40 768,286,391.95 507,285,378.80

Unbilledreceivables 8 17,060,967.27 - 17,088,550.59 176,469,389.82

Depositforpurchaseofgoods 10,669,542.20 60,450,685.65 5,881,464.93 60,450,685.65

Advancepaymentstosubcontractor 146,955,478.65 23,234,109.47 146,955,478.65 23,234,109.47

ReceivablefromRevenue

Department 37,710,854.35 140,949,189.88 - -

Inventories 9 412,590,503.10 382,586,586.23 234,704,904.32 180,075,310.37

Constructioninprogress 55,822,510.70 150,301,512.14 55,822,510.70 808,542,623.38

Short-termloanstorelated

parties 5.1 29,245,658.91 - 29,245,658.91 176,153,240.00

TotalCurrentAssets 2,546,777,232.081,716,512,548.712,077,914,296.273,104,239,193.46

Non-CurrentAssets Fixeddepositsandbillof

exchangepledgedascollateral 10 605,167,149.86 493,900,421.71 259,174,638.01 143,063,780.45

Investmentsinassociate 11 321,406,043.05 -383,194,800.00 -

Investmentsinsubsidiaries 3,12 - - 1,816,853,489.011,378,357,991.51

Investmentproperty 13 31,190,000.00 - - -

Property,plantandequipment 14 2,763,895,126.953,243,468,240.30 46,527,516.94 26,703,706.39

Intangibleassets 15 681,500,732.57 66,051,043.23 72,899.29 191,908.89

Retentionreceivables - - 68,827,686.23 -

Othernon-currentassets 16 8,334,266.90 19,847,355.35 650,173.10 464,145.12

TotalNon-CurrentAssets 4,411,493,319.333,823,267,060.592,575,301,202.581,548,781,532.36

TOTALASSETS 6,958,270,551.415,539,779,609.304,653,215,498.854,653,020,725.82

Notestofinancialstatementsareanintegralpartofthesefinancialstatements



STATEMENTS OF FINANCIAL POSITION (CONTINUED) GUNKULENGINEERINGPUBLICCOMPANYLIMITEDANDITSSUBSIDIARIES


(Unit:Baht)


Notes 2012 2011 2012 2011

LIABILITIESANDSHAREHOLDERS’EQUITYCurrentLiabilities Bankoverdraftsandshort-term loansfromfinancialinstitutions 17 1,686,248,892.332,572,447,739.06 1,231,783,763.082,552,220,051.56 Tradeandotherpayable- relatedparties 5.1,18 41,160,893.54 7,733,004.68 290,506,141.20 152,061,830.17 Tradeandotherpayable- thirdparties 19 838,051,055.31 439,042,033.91 737,626,186.52 381,385,550.94 Advancesreceivedfromemployers andconstructionrevenuereceived inadvance-thirdparties 20 3,445,098.84 225,325,703.66 3,445,098.84 225,325,703.66 Payableforpurchaseshares ofsubsidiary 12 92,357,500.00 - 92,357,500.00 - Payableforpurchaseofassets 246,093,767.95 35,976,059.70 - - PayabletoRevenueDepartment 10,838,745.74 12,301,672.33 6,301,150.74 10,086,743.97 Accruedincometaxpayable 114,108,774.79 53,567,712.64 101,361,574.68 40,757,251.81 Currentportionofobligation underfinancelease 21 4,790,440.65 5,191,595.07 3,967,476.70 4,807,469.41 Currentportionoflong-termloans 22 122,170,971.74 85,745,115.48 - - Provisionforsalesreturn 19,413,456.58 - 19,413,456.58 - Provisionforwarranty 23 2,168,708.51 2,671,608.27 1,632,620.03 1,643,854.92 Short-termloansfromrelatedparties 5.1 - - 29,146,966.57 - TotalCurrentLiabilities 3,180,848,305.98 3,440,002,244.80 2,517,541,934.94 3,368,288,456.44Non-CurrentLiabilities Payableforpurchaseshares ofsubsidiary 12 172,500,000.00 -172,500,000.00 - Obligationunderfinancelease 21 16,096,202.30 8,567,121.47 12,409,560.38 6,751,711.60 Long-termloansfromfinancial institutions 22 1,363,687,722.71 896,663,305.51 - - Provisionforwarranty 23 231,368.23 557,705.43 84,024.63 392,141.05 Employeebenefitobligation 24 7,290,657.98 6,618,112.98 5,143,323.00 4,512,746.00 Retentionpayables 69,282,635.87 3,148,931.94 69,282,635.87 - OtherNon-CurrentLiabilities 3,767,502.61 618,570.67 618,570.67 618,570.67 TotalNon-CurrentLiabilities 1,632,856,089.70 916,173,748.00 260,038,114.55 12,275,169.32 TOTALLIABILITIES 4,813,704,395.684,356,175,992.80 2,777,580,049.493,380,563,625.76



STATEMENTS OF FINANCIAL POSITION (CONTINUED) GUNKULENGINEERINGPUBLICCOMPANYLIMITEDANDITSSUBSIDIARIES


(Unit:Baht)


Notes 2012 2011 2012 2011

Shareholders’Equity

ShareCapital 25

Authorisedsharecapital

440,000,000ordinaryshares

ofBaht1each 440,000,000.00 -440,000,000.00 -


ofBaht1each -400,000,000.00 -400,000,000.00

Issuedandpaidupsharecapital


ofBaht1each 439,999,984.00 -439,999,984.00 -


ofBaht1each -400,000,000.00 -400,000,000.00

Premiumonsharecapital 425,120,000.00 425,120,000.00 425,120,000.00 425,120,000.00

Surplusfromreorganisation

undercommoncontrol 93,622,449.53 93,622,449.53 - -

Retainedearnings

Appropriated

Legalreserve 26 44,000,000.00 40,000,000.00 44,000,000.00 40,000,000.00

Unappropriated 920,416,662.25 224,861,166.97 966,515,465.36 407,337,100.06

Equityattributabletoowners

oftheCompany 1,923,159,095.781,183,603,616.501,875,635,449.361,272,457,100.06

Non-controllinginterestsofthe

subsidiary 221,407,059.95 - - -

Totalshareholders’equity 2,144,566,155.731,183,603,616.501,875,635,449.361,272,457,100.06

TOTALLIABILITIESAND

SHAREHOLDERS’EQUITY 6,958,270,551.415,539,779,609.304,653,215,498.854,653,020,725.82


STATEMENTS OF COMPREHESIVE INCOME GUNKULENGINEERINGPUBLICCOMPANYLIMITEDANDITSSUBSIDIARIES

FORTHEYEARENDEDONDECEMBER31,2012AND2011

(Unit:Baht)


Notes 2012 2011 2012 2011

Revenues

Revenuesfromconstructionservices 2,318,058,621.73 449,837,000.00 3,102,590,441.80 2,197,719,860.35

Salesofgoods 1,974,713,255.21 2,201,675,735.84 1,531,632,138.71 1,948,024,085.31

Serviceincome 12,750,000.00 - 12,750,000.00 -

Dividendincome - - 25,571,765.00 19,839,771.64

Gainonexchangerate 13,141,644.65 - 6,130,689.08 -

Gainondisposalofinvestment 416,221,998.33 - 141,525,150.00 -

Otherincome 29,000,839.24 17,185,533.70 16,523,333.67 10,884,868.27

Totalrevenues 4,763,886,359.16 2,668,698,269.54 4,836,723,518.26 4,176,468,585.57

Expenses Costofconstructionservices 1,755,408,420.55 402,979,071.22 2,358,000,079.70 1,860,731,602.75

Costofsales 1,475,629,611.36 1,603,138,307.88 1,326,099,041.33 1,529,269,498.44

Costofservice 4,918,680.00 - 4,918,680.00 -

Sellingexpenses 36,771,730.54 79,978,194.70 35,192,035.14 76,865,585.41

Administrativeexpenses 303,214,985.21 184,098,150.08 193,269,788.82 108,413,489.27

Lossonexchangerate - 64,231,062.24 - 57,918,168.61

Managementbenefitexpense 5.3 37,971,268.98 23,116,407.83 31,702,790.87 19,167,472.31

Financecost 103,771,517.54 57,159,100.77 47,516,805.63 41,845,116.58

Totalexpenses 3,717,686,214.18 2,414,700,294.72 3,996,699,221.49 3,694,210,933.37

Shareoflossfrominvestmentsin

associates (48,670,867.60) - - -

Netprofitbeforeincometax 997,529,277.38 253,997,974.82 840,024,296.77 482,257,652.20

Incometax (227,923,507.86) (164,473,209.70) (196,845,931.47) (140,205,152.38)

Totalcomprehensiveincomefortheperiod 769,605,769.52 89,524,765.12 643,178,365.30 342,052,499.82

Totalcomprehensiveincomeattributableto:

EquityholdersoftheCompany 779,555,495.28 89,524,765.12 643,178,365.30 342,052,499.82

Non-controllinginterestsofthe

subsidiaries (9,949,725.76) - - -

769,605,769.52 89,524,765.12 643,178,365.30 342,052,499.82

Basicearnings(loss)pershares 28 1.77 0.22 1.46 0.86

Numberofweightedordinayshares

(Unit:share) 440,000,000 400,000,000 440,000,000 400,000,000




CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

GUNKULENGINEERINGPUBLICCOM

PANYLIMITEDANDITSSUBSIDIARIES


(Unit:Baht)

Pa

rent

’s Sh

areh

older

s’ Eq

uity

Su

rplus

from

Re

taine

d ea

rning

s

Iss

ued

and

reor

ganis

ation

To

tal

Non-

cont

rollin

g

pa

id-up

Pr

emium

on

un

der

Appr

opria

ted

eq

uity

holde

r int

eres

ts o

f

Note

s sh

are

capit

al sh

are

capit

al co

mm

on c

ontro

l leg

al re

serv

e Un

appr

opria

ted

of th

e co

mpa

ny t

he s

ubsid

iary

Tota

l

BalanceasatJanuary1,2011

400,000,000.00425,120,000.00

93,622,449.5335,000,000.00170,335,351.851,124,077,801.38

-1,124,077,801.38

Changeinequityfortheyear

Legalreserve

-

-

-

5,000,000.00(5,000,000.00)

-

-

-

Dividendpaid

-

-

-

-(29,998,950.00)(29,998,950.00)

-(29,998,950.00)

Totalcomprehensiveincomefortheyear

-

-

-

-89,524,765.1289,524,765.12

-89,524,765.12

BalanceasatDecember31,2011

400,000,000.00425,120,000.00

93,622,449.5340,000,000.00224,861,166.971,183,603,616.50

-1,183,603,616.50


Increasefromincrementofcapital

39,999,984.00

-

-

-

-39,999,984.00

-39,999,984.00

Increasefromacquisitonofsubsidiary

-

-

-

-

-

-231,356,785.71

231,356,785.71

Legalreserve

26

-

-

-

4,000,000.00(4,000,000.00)

Cashdividendsandstockdividends

29

-

-

-

-(80,000,000.00)(80,000,000.00)

-(80,000,000.00)

Totalcomprehensiveincomefortheyear

-

-

--

779,555,495.28

779,555,495.28

(9,949,725.76)

769,605,769.52

BalanceasatDecember31,2012

439,999,984.00425,120,000.0093,622,449.5344,000,000.00920,416,662.251,923,159,095.78221,407,059.952,144,566,155.73


NotestofinancialstatementsareanintegralpartofthesefinancialstatementsNotestofinancialstatementsareanintegralpartofthesefinancialstatements

SEPARATE STATEMNTS OF CHANGES IN SHAREHOLDERS’ EQUITY GUNKULENGINEERINGPUBLICCOMPANYLIMITEDANDITSSUBSIDIARIES


(Unit:Baht)

Issued and Retained earnings

paid-up Premium on Appropriated

Notes share capital share capital legal reserve Unappropriated Total

BalanceasatJanuary1,2011 400,000,000.00425,120,000.00 35,000,000.00100,283,550.24960,403,550.24


Legalreserve - - 5,000,000.00(5,000,000.00) -

Dividendpaid - - - (29,998,950.00) (29,998,950.00)

Totalcomprehensiveincomefor

theyear - - - 342,052,499.82342,052,499.82

BalanceasatDecember31,2011 400,000,000.00425,120,000.00 40,000,000.00 407,337,100.061,272,457,100.06


Increasefromincrementof

capital 39,999,984.00 - - -39,999,984.00

Legalreserve 26 - - 4,000,000.00 (4,000,000.00) -

Cashdividendsandstock

dividends 29 - - - (80,000,000.00) (80,000,000.00)

Totalcomprehensiveincomefor

theyear - - - 643,178,365.30643,178,365.30

BalanceasatDecember31,2012 439,999,984.00425,120,000.00 44,000,000.00 966,515,465.36 1,875,635,449.36


STATEMENTS OF CASH FLOWS GUNKULENGINEERINGPUBLICCOMPANYLIMITEDANDITSSUBSIDIARIES


(Unit:Baht) Consolidated Separate financial statements Notes 2012 2011 2012 2011

CashFlowfromOperatingActivities

Netprofitbeforeincometax 1,007,479,003.14 253,997,974.82 840,024,296.77 482,257,652.20

Adjustmentstoreconcilenetprofitfor

cashreceived(used)fromoperations

Baddebtsanddoubtfuldebts 1,895,240.89 822,812.82 1,015,823.69 361,517.37

Unrealizedlossonexchangerate 6,909,549.91 62,905,237.40 7,593,140.80 62,261,971.65

Lossondiminutionsinthevalueof

inventories(reversal) 25,548,942.53 5,758,719.86 17,822,327.23 (1,082,138.99)

Lossonimpairment 1,382,545.00 - - -

Writenoffexpense 6,615,822.08 - - -

Otherinome - (684,642.47) - (529,000.00)

Dividendincome - - (25,571,765.00) (19,839,771.64)

Depreciationandamortisation 47,993,344.81 32,618,576.99 4,761,159.21 3,904,349.04

(Gain)lossfromdisposaloffixedassets (974,148.19) 33,378.45 (810,355.97) (9,783.05)

Provisionforwarranty(reversal) (829,236.96) (128,850.15) (319,351.31) 72,785.03

Provisionforsalesreturn 19,413,456.58 - 19,413,456.58 -

Provisionsforemployeebenefits 1,032,425.00 1,029,815.98 630,577.00 629,171.00

Gainondisposalofinvestmentsin

subsidiary (416,221,998.33) - (141,525,150.00) -

Shareoflossfrominvestmentsin

associates 48,670,867.60 - - -

Intragroupprofitrecognisedinfixedassets (8,324,142.18) - - -

Shareoflossofnoncontrolinginterest (9,949,725.76) - - -

Interestincome (15,930,564.96) (11,937,857.96) (11,122,680.23) (8,175,371.25)

Interestexpenses 103,771,517.98 57,159,100.77 47,516,805.63 41,845,116.58




STATEMENTS OF CASH FLOWS (CONTINUED) GUNKULENGINEERINGPUBLICCOMPANYLIMITEDANDITSSUBSIDIARIES


(Unit:Baht) Consolidated Separate financial statements

Notes 2012 2011 2012 2011

Netprofitbeforechangesinoperating

assetsandliabilities 818,482,899.14 401,574,266.51 759,428,284.40 561,696,497.94

(Increase)decreaseintradeandother

receivable-relatedparties 970,038,181.05 (19,367,398.97) 485,405,770.15 (849,972,955.65)

(Increase)decreaseintradeandother

receivable-thirdparties (183,900,624.88) (193,006,702.46) (230,009,045.32) (169,070,910.13)

(Increase)decreaseinunbilledreceivables (17,060,967.27) - 159,380,839.23 (176,469,389.82)

(Increase)decreaseindepositforpurchase

ofgoods 49,781,143.45 (7,857,432.28) 54,569,220.72 (15,798,817.54)

(Increase)decreaseinadvancespayment

tosubcontractors (123,721,369.18) (23,234,109.47) (123,721,369.18) (23,234,109.47)

(Increase)decreaseinreceivablefrom

RevenueDepartment (15,274,093.85) (129,779,396.48) - 2,013,731.68

(Increase)decreaseininventories (56,316,686.14) (45,315,357.36) (72,451,921.18) (334,805,762.24)

(Increase)decreaseinconstructionin

progress 358,026,426.84 (150,301,512.14) 752,720,112.68 (486,302,705.38)

CashFlowfromOperatingActivities(continued)

(Increase)decreaseinretentionreceivables - - (68,827,686.23) -

(Increase)decreaseinothernon-current

assets 879,700.11 2,970,983.51 (186,027.98) 44,375.00

Increase(decrease)intradeandother

payable-relatedparties 33,427,888.86 7,405,004.68 137,621,713.60 72,538,884.98

Increase(decrease)intradeandother

payable-thirdparties 393,276,046.81 250,703,424.91 353,729,773.11 237,637,672.13

Increase(decrease)inadvancesreceived

fromemployersandconstruction

revenuereceivedinadvance-

thirdparties (221,880,604.82) 225,325,703.66 (221,880,604.82) 225,325,703.66

Increase(decrease)inpayableto

RevenueDepartment (1,462,926.59) 11,015,948.49 (3,785,593.23) 10,086,743.97

Increase(decrease)inretentionpayables 66,133,703.93 - 69,282,635.87 -





(Unit:Baht) Consolidated Separate financial statements

Notes 2012 2011 2012 2011

Increase(decrease)innon-

currentliabilities 3,148,931.94 3,148,931.94 - -

Cashpaidforemployeebenefits (359,880.00) (2,539,260.00) - (2,539,260.00)

Cashgeneratedfromoperations 2,073,217,769.40 330,743,094.54 2,051,276,101.82 (948,850,300.87)

Cashreceivedfrominterstincome 8,279,059.80 11,985,821.84 6,308,860.98 6,150,631.41

Cashpaidforinterstexpenses (94,180,245.77) (58,694,659.55) (43,680,719.51) (40,597,588.40)

Cashreceivedforincometax 459,013.63 - - -

Cashpaidforincometax (167,684,053.59) (152,209,380.88) (136,241,608.60) (121,926,752.30)

NetCashProvided(used)from

OperatingActivities 1,820,091,543.47 131,824,875.95 1,877,662,634.69 (1,105,224,010.16)

CashFlowfromInvestingActivities

Cashpaidforsharespayable - (57,903,300.00) (7,642,500.00) (57,903,300.00)

Cashpaidforinvestmentsinassociate (57,600,000.00) - (57,600,000.00) -

Cashpaidforinvestmentsinsubsidiaries (218,407,146.47) - (979,982,497.50) (929,000,000.00)

Cashreceivedfromsaleofinvestment 594,823,147.93 - 594,917,350.00

Dividendincome - - 28,331,762.24 17,079,774.40

(Increase)decreaseinshort-termloans

torelatedparties (29,245,658.91) - 146,907,581.09 (171,203,240.00)

Cashpaidforinvestmentproperty (32,572,545.00) - - -

Cashpaidforpurchaseofproperty,

plantandequipmentandpayablefor

purchaseofassets (1,194,034,560.40) (2,832,216,090.13) (15,428,635.35) (2,428,438.69)

Proceedfromdisposalofproperty,

plantandequipment 2,809,230.41 66,523.80 1,270,180.69 58,230.85

(Increase)decreaseinfixeddeposits

andbillofexchangepledgedas

collateral (419,979,671.08) (330,681,852.69) (116,110,857.56) (30,020,186.87)

Cashpaidforpurchaseofintangible

assets (227,680.00) (105,350.00) - -

NetCashProvided(used)fromInvesting

Activities (1,354,434,883.52) (3,220,840,069.02) (405,337,616.39) (1,173,417,160.31)





(Unit:Baht) Consolidated Separate financial statements Notes 2012 2011 2012 2011

CashFlowfromFinancingActivities Increase(decrease)inbankoverdrafts

andshort-termloansfromfinancial

institutions (1,237,886,055.28) 2,243,962,832.26 (1,324,483,054.23) 2,389,875,866.21

Proceedsfromlong-termloansfrombanks 1,012,575,816.47 988,200,507.45 - -

Cashpaidforlong-termloansfrombanks (75,050,455.35) (5,792,086.46) - -

Increase(decrease)inshort-termloans

fromrelatedparties 157,083,240.00 (2,050,000.00) 29,146,966.57 (7,647,973.86)

Repaymentofobligationunder

financelease (5,459,223.13) (4,278,453.62) (4,679,293.47) (3,543,979.97)

Repaymentofinterest-obligationunder

financelease (1,348,892.69) (879,225.32) (1,111,432.14) (740,277.79)

Dividendpaid (48,602,007.64) (29,986,016.93) (39,992,007.64) (29,986,421.93)

NetCashProvided(used)fromFinancing

Activities (198,687,577.62) 3,189,177,557.38 (1,341,118,820.91) 2,347,957,212.66

NetIncrease(decrease)inCashand

CashEquivalent 266,969,082.33 100,162,364.31 131,206,197.39 69,316,042.19

CashandCashEquivalentatthe

BeginningoftheYear 314,963,736.25 214,801,371.94 265,709,067.14 196,393,024.95

CashandCashEquivalentatthe

EndoftheYear 30.1 581,932,818.58 314,963,736.25 396,915,264.53 265,709,067.14


NOTES TO FINANCIAL STATEMENTS GUNKUL ENGINEERING PUBLIC COMPANY LIMITED AND ITS SUBSIDIARIES

DECEMBER31,2012AND2011

�. General information

Gunkul Engineering Public Company Limited (“the Company”) is a publiclimited company and is incorporated in Thailand. The address of theCompany’s registered office is 1038-1046 Nakornchaisri Road, Nakornchaisri,Dusit,Bangkok.

Theprincipalactivitiesof theCompanyandsubsidiaries (“theGroup”) involvemanufacture, distribution and importation and exportation of electrical hardwareandequipmentincludinggenerateandsellelectricity.

�. Basis of preparation of financial statements

The consolidated and separate financial statements are presented in Thailanguage and Thai Baht, and in conformity with Thai generally acceptedaccounting principles under the Accounting Act B.E. 2543, being those ThaiAccountingStandards issuedunder theAccountingProfessionActB.E. 2547,and the financial reporting requirements of the Capital Market SupervisoryBoardundertheSecuritiesandExchangeActB.E.2535(or1992).

Theconsolidatedandseparatefinancialstatementshavebeenpreparedunderthe historical cost convention except as disclosed in the accounting policiesbelow.

The preparation of financial statements in conformity with Thai GenerallyAcceptedAccountingPrinciples requiresmanagement tomake estimates andassumptions that affect the reported amounts of assets and liabilities, thedisclosure of contingent assets and liabilities at the date of the financialstatementsandtheamountsofrevenuesandexpensesinthereportedperiods.Actual resultsmaydiffer fromthoseestimates.Althoughthemanagementhasmostwellpreparedthefiguresofestimationfromtheunderstandingofeventsandthethingsthathavebeendonepresently.


The financial statements issued for Thai report purposes are prepared in theThai language. This English translation of the financial statements has beenpreparedfortheconvenienceofreadersnotconversantwiththeThailanguage.

The Federation of Accounting Profession has notified to apply the followingfinancialreportingstandardstothefinancialstatementsinthefutureperiods.

Effectivedate

TFRSNo.8 OperatingSegments January1,2013

TAS No.12 IncomeTaxes January1,2013

TAS No.20 AccountingforGovernmentGrantsandDisclosureofGovernmentAssistance

(revised2009) January1,2013

TAS No.21 TheEffectsofChangesinForeignExchangeRates(revised2009) January1,2013

TSI No.10 GovernmentAssistance-NoSpecificRelationtoOperatingActivities January1,2013

TSI No.21 IncomeTaxes-RecoveryofRevaluedNon-DepreciableAssets January1,2013

TSI No.25 IncomeTaxes-ChangeintheTaxStatusofanEntityoritsShareholders January1,2013

GuidetoAccountingPractice:TransferandTransferredofFinancialAssets January1,2013

TFRI No.4 DeterminingwhetheranArrangementcontainsaLease January1,2014

TFRI No.12 ServiceConcessionArrangements January1,2014

TFRI No.13 CustomerLoyaltyProgrammes January1,2014

TSI No.29 ServiceConcessionArrangements:Disclosures January1,2014

TheGrouphasnotearlyadoptedsuchfinancialreportingstandardshavingtheeffective date to the financial statements on the future periods before theeffectivedates.Themanagementassessestheimpactofthefinancialreportingstandardshavinganeffectivedateinyear2013andbelievesthattheywillnothaveanysignificantimpactonthefinancialstatementsfortheperiodinwhichtheyareinitiallyadoptedexceptthefollowingaccountingstandards;

TAS12IncomeTaxes,whichstipulatesthattheGroupisrequiredtorecognizethe deferred tax liabilities or the deferred tax assets when the temporarydifferencebetweenthe taxbaseandthecarryingamountof theassetor theliability is occurred, however, the Group presently doesn’t recognize suchtransaction.TheGroupisrequiredtoapplytheretrospectiveapplicationtothefinancial statements for 2013in accordance with the requirement of theaccountingstandardwhentheGroupadoptssuchtheaccountingstandard in2012. The management assesses the impact on the Company’s financialstatementsfor2012,asfollows:


(Unit:Baht)

Statements of Financial Position

Consolidated financial statements Separate financial statements

As at

December 31, January 1, December 31, January 1, 2012 2012 2012 2012

Increaseindeferredtaxassets 68,561,977.32 72,821,778.75 12,665,094.96 4,378,735.03

Increaseinintangibleassets 170,196,244.63 19,415,584.42 - -

Increaseindeferredtaxliabilities 174,810,488.62 21,523,590.48 913,234.39 275,422.88

Increaseinretainedearnings 63,947,733.33 70,713,772.69 11,751,860.57 4,103,312.15

(Unit:Baht)

Statements of Comprehensive Income

Consolidated financial Separate financial statements statements

For the year ended on December 31, 2012

Increase(decrease)inincometaxexpense 6,766,039.36 (7,648,548.42)

Increase(decrease)intotalcomprehensiveincome (6,766,039.36) 7,648,548.42

Increase(decrease)inbasicearningspershare (0.0154) 0.0174

Themanagementiscurrentlyassessingtheimpactonthefinancialstatementsforthefinancialreportingstandardshavingeffectivedateinyear2014.

3. Principles of consolidation financial statements

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyand itssubsidiaries.Subsidiaries,whicharethoseentities inwhichthe Group has power to govern the financial and operating policies, areconsolidated. The existence and effect of potential voting rights that arepresently exercisable or presently convertible are considered when assessingwhether theGroupcontrolsanotherentity.Subsidiariesareconsolidated fromthe date on which control is transferred to the Group and are no longerconsolidatedfromthedatethatcontrolceases.


Acquisitionsofsubsidiariesareaccountedforusingtheacquisitionmethod.Theconsiderationtransferredforacquisitionismeasuredatthesumofthefairvalueoftheassetsgiven,theliabilitiesincurred,andequityinstrumentsissuedbytheGroup at the date of exchange. Acquisition-related costs are accounted asexpensesintheperiodinwhichthecostsareincurred.Theexcessofthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestintheacquiree, and the fair valueof theacquirer’spreviously held equity interest inthe acquiree (if any) over the fair value of the net identifiable assets of thesubsidiaryacquired is recognizedasgoodwilland tobe tested for impairmentannually. If, after reassessment, the sum of the consideration transferred, theamountofanynon-controllinginterestintheacquiree,andthefairvalueoftheacquirer’spreviouslyheldequityinterestintheacquiree(ifany)islessthanthefairvalueofthenetidentifiableassetsofthesubsidiaryacquired,thedifferenceisrecognizedinprofitorlossasabargainpurchasegain.

Acquisitionsofsubsidiariesundercommoncontrolareaccountedforusingthesimilartopoolingof interestmethod.Thecostofbusinesscombinationundercommoncontrolarethesumofthefairvalueoftheassetsgiven,theliabilitiesincurred,andequityinstrumentsissuedbytheGroupatthedateofexchange.The costs related to the business combination under common control areaccounted as expenses in the period in which the costs are incurred. Theexcessofthecostsrelatedtothebusinesscombinationundercommoncontroloverorunderthecarryingamountofthenetassetsofthesubsidiaryacquiredis recorded as “Surplus from reorganization under common control” in theconsolidatedfinancialstatements.

Related party transactions, balances and unrealized gains on transactionsbetweentheCompanyanditssubsidiariesareeliminated;unrealizedlossesarealsoeliminatedunlesscostcannotberecovered.Wherenecessary,accountingpolicies of subsidiaries have been changed to ensure consistency with thepoliciesadoptedbytheGroup.

Theconsolidated financial statements for the year endedDecember31, 2012and2011havebeenpreparedbyincludingthefinancialstatementsofGunkulEngineering Public Company Limited and subsidiaries after eliminate thesignificantrelatedpartybalancesandtransactions.ThepercentagedirectlyandindirectlyownedbytheCompanyasfollows:-


Percentage of

Country of shareholding

Name of subsidiaries Nature of business incorporation 2012 2011

G.K.PowerProductCo.,Ltd. Manufactureelectricalhardwareandequipment Thailand 100.00 100.00

G.K.AssemblyCo.,Ltd. Manufactureelectricalhardwareandequipment Thailand 100.00 100.00

K.N.P.SupplyCo.,Ltd. Import-exportelectricalhardwareandequipment Thailand 100.00 100.00

GunkulPowergenCo.,Ltd. Generatingandsellingelectricity Thailand 100.00 100.00

WindEnergyDevelopment Generatingandsellingelectricity Thailand 70.00 -

Co.,Ltd.

G-PowerSourceCo.,Ltd. Generatingandsellingelectricity Thailand 40.00 100.00

OnMarch 30, 2012, theCompanydisposed investment in ordinary shares ofG-PowersourceCo.,Ltd.toothercompanyaspermentionedinthenoteno.12. As a result, such company is no longer regarded as subsidiary of theCompanysincetheCompanyhasnopowertocontrolsuchsubsidiary.Asaresult,theconsolidatedstatementoffinancialpositionasatDecember31,2012didnotcombinestatementof financialpositionofsuchsubsidiary. However,the consolidated statement of comprehensive income for the year ended onDecember31,2012hasconsolidatedtheresultofoperationofsuchcompanyfromJanuary1,2012toMarch30,2012.

ThefinancialstatementsofthesubsidiariesarepreparedforthesamereportingperiodsastheCompanyandusingconsistentsignificantaccountingpolicies.

The non-controlling interest is measured at the non-controlling interest’sproportionateshareoftheacquiree’sidentifiablenetassets.

�. Accounting policies

4.1 Cash and cash equivalents

Forthepurposesofthecashflowstatement,cashandcashequivalentscomprisecashonhand,depositswithbanksandothershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessandfreefromrestrictions.


4.2 Trade account receivable

Tradeaccountreceivablearecarriedinthestatementoffinancialpositionat the amount expected to be collectible. Allowance for doubtfulreceivablesareestimatedbypercentageofaccountsreceivablewhich isassessed primarily on analysis of payment histories and review of alloutstandingamountsattheendofthereportingperiod.Theamountofthe allowance is the difference between the carrying amount of thereceivable and the amount expected to be collectible. Bad debts arewrittenoffduringtheyearinwhichtheyareidentified.

4.3 Inventories

Inventoriesare statedat the lowerof costornet realisable value. Thecost of purchase comprises both the purchase price and costs directlyattributabletotheacquisitionoftheinventory,suchasimportdutiesandtransportation charge, less all attributable discounts, allowances orrebates. The cost of finishedgoods andwork in process comprise rawmaterials, direct labor, other direct costs and related productionoverheads, the latter being allocated on the basis of normal operatingactivities.

Costsofinventoriesarecalculatedasthefollowmethod:-

Finishedgoods -FIFOmethod

Workinprocess -FIFOmethod

Rawmaterialandsupplies -FIFOmethod

TheGroupestimatesthenetrealisablevaluebyusingthesellingpriceintheordinarycourseofbusinesslesssellingexpenses.

TheGroupmakestheallowancefordiminutionsinthevalueofobsolete,defectiveorslow-movinginventories.


4.4 Investments

Investments in associates

Anassociate isanentityoverwhichtheGrouphassignificant influence.Significant influence is the power to participate in the financial andoperating policy decisions of the investee but is not control or jointcontroloverthosepolicies.

Investments in associates are accounting for using the costmethod ofaccounting in the separate financial statements less allowance forimpairmentinvestment(ifany).

Investments inassociatesareaccounted forusing theequitymethod inthe consolidated financial statements. Under the equity method, theinvestmentinanassociateisinitiallyrecognizedatcostandthecarryingamountisincreasedordecreasedtorecognizetheGroup’sshareoftheprofitor lossof the investeeafter thedateofacquisition. TheGroup’sshare of theprofit or loss of the investee is recognized in theGroup’sprofit or loss. Where necessary, accounting policies of associates havebeen changed to ensure consistency with the policies adopted by theGroup. The financial statementsof theassociatesareprepared for thesamereportingperiodsastheCompany.

Investments in subsidiaries

Investments in subsidiaries are reported by using the cost method ofaccounting in the separate financial statements less allowance forimpairmentinvestment.

4.5 Investment property

Investment property, which is property held to earn rentals and/or forcapitalappreciationismeasuredinitiallyatitscosts,includingtransactioncost.Subsequenttoinitialrecognition,investmentpropertyismeasuredatthecostmethodnetfromtheallowanceforimpairment(ifany).


4.6 Property, plant and equipment

Land and assets under construction held for use in the production orsupplyofgoodsorservices,orforadministrativepurposes,arestatedinthestatementoffinancialpositionattheirhistoricalcostlessaccumulatedimpairmentlosses(ifany).

Buildings and equipment held for use in the production or supply ofgoods or services, or for administrative purposes, are stated in thestatement of financial position at their historical cost less accumulateddepreciationandaccumulatedimpairmentlosses(ifany).

The cost of an item of asset comprises its purchase price, includingimport duties and non-refundable purchase taxes, after deducting tradediscountsandrebates,anycostsdirectlyattributabletobringingtheassettothelocationandconditionnecessaryforittobecapableofoperatinginthemanner intendedbymanagement, the initialestimateofthecostsofdismantlingandremovingtheitemandrestoringthesiteonwhichitislocated, and the borrowing costs directly attributable to the acquisition,constructionorproductionofaqualifyingasset.

TheGroup’sdepreciationiscalculatedonthestraight-linemethodtowriteoffthecostofeachasset,exceptforlandandassetsunderconstruction,totheirresidualvaluesovertheirestimatedusefullifeasfollows:

Buildingsandpowerplant 25-30years

Machineryandfactoryequipment 5-25years

Toolsandequipments 5years

Fixturesandofficeequipments 5yearsMotorvehicles(Includingvehicleunderleaseagreements) 5years

Theresidualvalue,theusefullifeandthedepreciationmethodofanassetwillbereviewedatleastateachfinancialyear-end.

The gain or loss arising on the disposal or retirement of an item ofproperty, plant and equipment is determined as the difference betweenthe sales proceeds and the carrying amount of the asset and isrecognizedinprofitorloss.


4.7 Intangible assets

Intangible assets with finite useful lives which the Group acquired arestated at historical cost less accumulated amortization and impairmentloss (as if). The Group’s amortisation is calculated on the straight-linemethodovertheirestimatedusefullifeasfollows:

Computersoftware 5years

Copyright 3-5years

Powerpurchaseagreementacquiredinabusinesscombinationisinitiallyrecognizedattheirfairvalueattheacquisitiondatewhichisregardedastheircostandamortizedovertheperiodofpowerpurchaseagreement.

4.8 Impairment of assets

ThecarryingamountsoftheGroup’sassetsandalsointangibleassetsarereviewedattheendofeachreportingperiodtodeterminewhetherthereisany indication of impairment. If any such indication that the carryingamountmaynotberecoverable.Animpairment loss isrecognizedfortheamountbywhichthecarryingamountoftheassetsexceedsitsrecoverableamountwhichisthehigherofanasset’snetsellingpriceandvalueinuse.For the purposes of assessing impairment, assets are grouped at thelowestlevelforwhichthereisseparatelyidentifiablecashflows.

TheGroupwillrecognizeimpairmentlossesinprofitorloss,orreducetherevaluation increment in assets in case that those assets arepreviouslyrevalued.Thereversalofimpairmentlosseswillberecognizedinprofitorlossorasa revaluation increment inassetswhen there isan indicationthattheimpairmentlossesarenolongerexistordecreased.

4.9 Loans from financial institutions

Loansfromfinancialinstitutionsareinitiallymeasuredatfairvalue,includingtransaction costsdirectly attributable to the issueof the loans.Andafterinitial recognition, the loans from financial institutions are subsequentlymeasuredatamortizedcost,usingtheeffectiveinterestmethod.


4.10 Accounting for leases

Where the Group is the lessee

Longtermleaseswhichsubstantiallytransferredalltherisksandrewardsof ownership are classified as finance leases. Finance leases arecapitalisedatthe inceptionofthe leaseatthe lowerofthefairvalueoftheleasedpropertyorthepresentvalueoftheminimumleasepayments.Each lease payment is allocated to the principal and to the financecharges so as to achieve a constant rate on the finance balanceoutstanding.Theoutstandingrentalobligations,netoffinancecharges,areincludedinotherlong-termpayables.Theinterestelementofthefinancecostischargedinprofitorlossovertheleaseperiodsoastoachieveaconstantperiodicrateofinterestontheremainingbalanceoftheliabilityfor each period. The assets acquired under finance leases whiledepreciationiscarriedthroughouttheusefullifeofleasedasset.However,if there is uncertainty in the right of ownership when the contract isterminated,depreciationiscarriedaccordingtousefullifeofleasedassetsorlifeofleasedcontractwhichevertheperiodislower.

Long term leases not transferring a significant portion of the risks andrewards of ownership to the lessee are classified as operating leases.Payments made under operating leases (net of any incentives receivedfromthelessor)arechargedinprofitorlossonastraight-linebasisovertheperiodofthelease.

When an operating lease is terminated before the lease period hasexpired, any payment required to be made to the lessor by way ofpenalty is recognized as an expense in theperiod inwhich terminationtakesplace.

Where the Group is the lesser

Operatingleases

Assets leasedoutunderoperating leasesare included inproperty,plantandequipmentinthestatementoffinancialposition.Theyaredepreciatedover their expecteduseful livesonabasis consistentwithother similarproperty,plantandequipmentownedbytheGroup.


4.11 Provisions

Provisions are recognized when the Group has a present legal orconstructiveobligationasa result ofpast events, it isprobable that anoutflowofresourceswillberequiredtosettletheobligation,andareliableestimate of the amount can be made. Where the Group expects aprovision to be reimbursed, the reimbursement is recognized as aseparateassetbutonlywhenthereimbursementisvirtuallycertain.

4.12 Revenue recognition

Sales are recognized on the delivery of goods or on customeracceptance.Salesareshownnetofsalestaxesanddiscounts.

Revenues fromconstructionshallcomprise the initialamountof revenueagreed in the contract and a claim collect from third parties arerecognized on a percentage of completion basis. The percentage ofcompletion is measured based on comparison of the completion of aphysical proportion of the contract work at the end of the reportingperiod and the total contract work surveyed by the engineer projectmanager. In case, it is probable that the total construction costs willexceed the total construction income, the expected foreseeable loss isimmediatelyrecognizedasanexpenseinprofitor loss.Therecognizedrevenuewhichisnotyetdueperthecontractshasbeenpresentedunderthecaptionof“Unbilledreceivables”inthestatementoffinancialposition.The unrecognized revenue which is due per the contracts has beenpresentedunder thecaptionof“Advances received fromemployersandconstructionrevenuereceivedinadvance-thirdparties”inthestatementoffinancialposition.

Serviceincomeisrecognizedwhenserviceshavebeenrendered.

Rentalincomeisrecognizedasincomeovertheleaseperiod.

Interestincomeisrecognizedusingtheeffectiveinterestmethod.

Otherincomeisrecognizedonanaccrualbasis.


4.13 Foreign currency transactions

The Group translates foreign currency transactions into Baht using theexchangerateprevailingatthedateofthetransaction.Monetaryassetsand liabilities at theendof the reportingperioddenominated in foreigncurrenciesaretranslatedintoBahtattheexchangerateprevailingatthatdate.Gainsandlossesresultingfromthesettlementofforeigncurrencytransactions and from the translation of monetary assets and liabilitiesdenominated in foreign currencies are recognized in profit or loss asincurred.

4.14 Borrowing costs

Borrowing costs directly attributable to the acquisition, construction orproductionofaqualifyingassets,whichareassetsthatnecessarilytakesasubstantialperiodof time toget ready for their intendeduseorsale,areaddedtothecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.

Investment income earned on the temporary investment of specificborrowings pending their expenditure on qualifying assets is deductedfromtheborrowingcostseligibleforcapitalization.

Allotherborrowingcostsarerecognizedinprofitorlossintheperiodinwhichtheyareincurred.

4.15 Employee benefits

Defined contribution plan

TheGroupoperatesaprovidentfundwhichisfundedbypaymentsfromemployees and by the Group. The assets for which are held in aseparatetrustfund.Contributionstotheprovidentfundarerecognizedinprofitorlossintheperiodinwhichtheyareincurred.

Defined benefit plan

TheGrouphas theemployeebenefitobligation incaseof retirementorterminationunderthelabor law.TheGrouphiresanactuarytocalculate


onanactuarial technique thesaidemployeebenefitobligation.Thesaidemployeebenefitobligation isdiscountedusing theprojectedunitcreditmethod by reference to an interest rate of a government bond todetermine the present value of the employee benefit obligation, relatedpastservicecostandcurrentservicecost.Allactuarialgainsandlossesarerecognizedimmediatelyinprofitorloss.

4.16 Corporate income tax

Income tax expense is calculated from taxable income and recordedbasedontaxpaidandaccruedfortheyear.

4.17 Segment information

Business segments provide products and services that are subject torisks and returns that are different from those of other businesssegments. Geographic segments provide products or serviceswithin aparticulareconomicenvironmentthat issubjecttorisksandreturnsthatare different from those of components operating in other economicenvironments.

Segment information ispresentedbybusinesssegmentsof theGroup’soperations.

4.18 Financial instruments

Financial assets and liabilities carried on the statement of financialposition include cash and cash equivalents, investment in equitysecurities,tradeandotherreceivables,tradeandotherpayables,andloanreceivables and payables. The accounting policies on recognition andmeasurement of these items are disclosed in the respective accountingpoliciesfoundinthisNote.

Forwardcontractsarecarriedatfairvalueandpresentedinothercurrentassetsorothercurrentliabilities.Unrealizedgainsorlossesonchangesinfairvaluearerecognizedinprofitorloss.


Interest rate swap contracts protect the Group from movements ininterest rates. Any differential to be paid or received on interest rateswap contracts is recognised as a component of interest expenses instatementofcomprehensiveincome.

4.19 The important accounting estimation, supposition and judgment application

Estimates and judgements are continually evaluated and are based onhistorical experience and other factors, including expectations of futureeventsthatarebelievedtobereasonableunderthecircumstances.

Plant, equipment and intangible assets

Managementdeterminestheestimatedusefullivesandresidualvaluesforthe Group’s plant, equipment and intangible assets. Management willrevisethedepreciationchargewhereuseful livesandresidualvaluesaredifferent to previously estimated, or its will write off or write downtechnicallyobsoleteorassetsthathavebeenabandonedorsold.

Financial lease/ Operation lease

The Group has entered into lease agreements for rental vehicle andequipment.TheGrouphasdetermined,basedonanevaluationontermsandconditionsofthearrangements,thattheleasetransfersownershipoftheseassetstothelessee,andsoaccountsforthecontractsasfinancialleases.

Estimated construction project costs

TheGroupestimatecostsofconstructionprojectsbasedondetailsoftheconstruction work, taking into account the volume and value ofconstructionmaterials tobeused in theproject, labourcostsandothermiscellaneouscosts tobe incurred tocompletionof service, taking intoaccount the direction of the movement in these costs. Estimates arereviewed regularly or whenever actual costs differ significantly from thefiguresusedintheoriginalestimates.


�. Related party transactions

Enterprises and individuals that directly, or indirectly through one or moreintermediaries,control,orarecontrolledby,orareundercommoncontrolwith,theCompany,includingholdingcompanies,subsidiariesandfellowsubsidiariesarerelatedpartiesoftheCompany.Associatesandindividualsowning,directlyor indirectly,an interest in thevotingpowerof theCompany thatgives themsignificant influenceover the enterprise, keymanagementpersonnel, includingdirectors and officers of the Company and close members of the family ofthese individuals and companies associated with these individuals alsoconstituterelatedparties.

Inconsideringeachpossible relatedparty relationship,attention isdirectedtothesubstanceoftherelationship,andnotmerelythelegalform.

Gunkul GroupCo., Ltd. is amajor shareholder, holding 59.97% of the sharecapitaloftheGunkulEngineeringPublicCo.,Ltd.Theprincipalshareholderofthe Company’s major shareholder is Dhumrongpiyawut family. Transactionsrelated to companies in which the Dhumrongpiyawut family is the principalshareholdersordirectorsarerecognizedasrelatedpartiestotheCompany.

The Company has transactions with related persons and companies for theyearendedonDecember31,2012and2011asfollows:

5.1 Inter-assets and liabilities

(Unit:Baht)

Consolidated Separate financial statement

2012 2011 2012 2011

Tradeaccountreceivable

G.K.AssemblyCo.,Ltd. - - 2,780,984.97 896,152.25

G.K.PowerProductCo.,Ltd. - - 419,386.50 -

K.N.PSupplyCo.,Ltd. - - 1,673,155.45 17,063,239.73

FutureElectricalControlCo.,Ltd. 92,552,793.71 22,274,098.62 - -

KulnateeCo.,Ltd. - 4,173.00 - 4,173.00

FEC&SACJointventure - 78,043.07 - 78,043.07

Total 92,552,793.71 22,356,314.69 4,873,526.92 18,041,608.05


(Unit:Baht)


2012 2011 2012 2011

Otherreceivable

G-PowerSourceCo.,Ltd. 13,642,500.00 - 13,642,500.00 -

WindEnergyDevelopmentCo.,Ltd. - - 46,631.00 -

FutureElectricalControlCo.,Ltd. 3,947.83 - - -

13,646,447.83 - 13,689,131.00 -

Constructionreceivable

G-PowerSourceCo.,Ltd. 304,132,391.35 - 304,132,391.35 882,679,542.03

GunkulPowergenCo.,Ltd. - - 92,666,961.66 -

304,132,391.35 - 396,799,353.01 882,679,542.03

Accrueddividend

G.K.AssemblyCo.,Ltd. - - - 2,759,997.24

Accruedreceivable

GunkulPowergenCo.,Ltd. - - - 1,288,534.81


7,652,060.76 - 7,652,060.76 2,838,241.51

Totaltradeandotherreceivable

- relatedparties 417,983,693.65 22,356,314.69 423,014,071.69 906,319,388.83

Unbilledreceivables


GunkulPowergenCo.,Ltd. - - 27,583.32 -

Total 17,036,723.56 - 17,064,306.88 176,469,389.82

Advancepaymentstosubcontractor

FutureElectricalControlCo.,Ltd. 109,967,548.57 - 109,967,548.57 -

Short-termloanstorelatedparties

G.K.AssemblyCo.,Ltd.

Beginningbalance - - - -

Addition - - - 2,000,000.00

Repayment - - - (2,000,000.00)

Endingbalance - - - -


(Unit:Baht)


2012 2011 2012 2011

K.N.PSupplyCo.,Ltd.


Addition - - - 1,717,520.42

Repayment - - - (1,717,520.42)


GunkulPowergenCo.,Ltd.

Beginningbalance - - 19,070,000.00 4,950,000.00

Addition - - 27,900,000.00 47,120,000.00

Repayment - - (46,970,000.00) (33,000,000.00)

Endingbalance - - - 19,070,000.00

G-PowerSourceCo.,Ltd.

Beginningbalance - - 157,083,240.00 -

Addition 382,514,506.37 - 225,431,266.37 249,183,240.00

Repayment (353,268,847.46) - (353,268,847.46) (92,100,000.00)

Endingbalance 29,245,658.91 - 29,245,658.91 157,083,240.00

Total 29,245,658.91 - 29,245,658.91 176,153,240.00

Disposalofproperty,plantandequipment

G.K.AssemblyCo.,Ltd. - - 390,395.89 18,527.32

GunkulPowergenCo.,Ltd. - - - 15,030.31

FutureElectricalControlCo.,Ltd. 512,328.74 2,500.00 - -

Total 512,328.74 2,500.00 390,395.89 33,557.63

Purchaseofproperty,plantandequipment

G.K.AssemblyCo.,Ltd. - 1,918,527.32 3,198.38 -

FutureElectricalControlCo.,Ltd. 13,573.75 338,317.76 - -

P.M.AuditCo.,Ltd. 600,000.00 - 600,000.00 -

Total 637,216.20 2,413,910.38 626,840.83 157,065.30


(Unit:Baht)


2012 2011 2012 2011

Purchaseofproperty,plantand

equipmentjointingownershipwith

director 31,190,000.00 - - -

Retentionreceivable


Tradeaccountpayable

G.K.AssemblyCo.,Ltd. - - 66,516,163.66 9,479,165.06

G.K.PowerProductCo.,Ltd. - - 112,087,898.15 46,876,291.74

K.N.PSupplyCo.,Ltd. - - 10,293,031.48 6,356,559.62


Total 29,503,281.20 - 218,400,374.49 62,712,016.42

Advancesreceivedfromcustomers

underconstructioncontracts



Total 3,607,407.66 - 70,159,669.28 89,349,813.75

Advancereceivedforgoods

FutureElectricalControlCo.,Ltd. 7,605,004.68 7,605,004.68 - -

Accruedinterestpayable

K.N.PSupplyCo.,Ltd. - - 822,597.43 -

Accruedexpenses

G.K.AssemblyCo.,Ltd. - - 513,600.00 -

G.K.PowerProductCo.,Ltd. - - 235,400.00 -

K.N.PSupplyCo.,Ltd. - - 160,500.00 -

FutureElectricalControlCo.,Ltd. 214,000.00 - 214,000.00 -

G.M.SupplyandConstructionCo.,Ltd. - 128,000.00 - -

Director 231,200.00 - - -

Total 445,200.00 128,000.00 1,123,500.00 -

Totaltradeandotherpayable

- relatedparties 41,160,893.54 7,733,004.68 290,506,141.20 152,061,830.17


(Unit:Baht)


2012 2011 2012 2011

Retentionpayable.


Short-termloansfromrelatedparties

G.K.AssemblyCo.,Ltd.


Addition - - - 3,000,000.00

Repayment - - - (3,000,000.00)


K.N.PSupplyCo.,Ltd.

Beginningbalance - - - 5,597,973.86

Addition - - 41,646,966.57 12,848,270.06

Repayment - - (12,500,000.00) (18,446,243.92)

Endingbalance - - 29,146,966.57 -

Short-termloansfromrelatedparties(Continued)

GunkulGroupCo.,Ltd.

Beginningbalance - 2,050,000.00 - 2,050,000.00

Addition - 1,000,000.00 - 1,000,000.00

Repayment - (3,050,000.00) - (3,050,000.00)


Total - - 29,146,966.57 -

As at December 31, 2012, the Group constitutes loans to and loans fromrelated parties. Such inter-loan is in form of promissory note, at call andinterestiscarriedbytherateof3.00%-6.1813%perannum.


5.2 Inter-revenue and expenses

(Unit:Baht)


2012 2011 2012 2011

Salesofgoods



K.N.PSupplyCo.,Ltd. - - 35,374,926.74 39,035,290.22

FutureElectricalControlCo.,Ltd. 169,184,017.28 26,794,363.86 422,143.28 132,344.46

KulnateeCo.,Ltd. 17,850.00 71,814.20 17,850.00 71,814.20

Sri-UthongandFutureElectrical

ControlJointventure - 685,847.95 - 685,847.95

FEC&SACJointventure - 72,937.45 - 72,937.45

Total 169,201,867.28 27,624,963.46 41,683,490.67 108,231,485.69

Revenuesfromconstructionservices

G-PowerSourceCo.,Ltd. 1,166,189,746.74 - 1,166,189,746.741,747,882,860.35


Total 1,562,825,770.17 - 3,028,327,662.911,747,882,860.35

Serviceincome

G-PowerSourceCo.,Ltd. 15,450,000.00 - 15,450,000.00 -

Otherincome

FutureElectricalControlCo.,Ltd. 1,469,520.00 - - -

Interestincome

G.K.AssemblyCo.,Ltd. - - - 22,153.43

GunkulPowergenCo.,Ltd. - - 681,178.96 1,379,070.01


Total 6,206,304.13 - 6,887,483.09 2,950,930.16

Dividendincome



K.N.PSupplyCo.,Ltd. - - 15,280,000.00 7,249,971.00

Total - - 25,572,000.00 19,839,771.64


(Unit:Baht)


2012 2011 2012 2011

Purchaseofgoodsandservice



K.N.PSupplyCo.,Ltd. - - 13,962,775.92 12,353,659.78

Total - - 441,629,557.98 199,444,763.67

Costofconstructionservice


Transportationandservicefee

G.E.S.Logistics(Thailand)Co.,Ltd. 3,097,492.00 157,065.30 2,915,000.00 157,065.30

Office,warehouseandlandrentalfee

GunkulEngineering(2000)Co.,Ltd. 6,666,000.00 6,666,000.00 5,604,000.00 5,604,000.00

G.M.SupplyandConstructionCo.,Ltd. 1,536,000.00 1,536,000.00 - -

Director 693,600.00 - - -

Total 8,895,600.00 8,202,000.00 5,604,000.00 5,604,000.00

Maintenanceexpense

FutureElectricalControlCo.,Ltd. 932,800.00 - 932,800.00 -

Interestexpense

K.N.PSupplyCo.,Ltd. - - 822,597.43 187,366.60

KulnateeCo.,Ltd. - 4,471.23 - 4,471.23

Total - 4,471.23 822,597.43 191,837.83

5.3 Management benefit expenses

(Unit:Baht)


2012 2011 2012 2011

Short-termemployeebenefits 37,651,819.98 22,877,024.82 31,429,116.87 18,966,818.31

Post-employmentbenefits 319,449.00 239,383.01 273,674.00 200,654.00

37,971,268.98 23,116,407.83 31,702,790.87 19,167,472.31


5.4 Pricing policies

TradingTransaction PricingPolicy

Salesandpurchaseofgoods Costpriceplus5%to30%

Maintenanceservice Marketpriceplus65%

Interestincomeandexpenses Interestrateequaltointerestrateofloan

fromfinancialinstitution

Rental Referwiththeappraisalvalueby

independentappraiser

Salesandpurchaseofassets Netbookvalue

Purchaseofland Nearbybookvalueortheappraisalvalue

byindependentappraiser

Constructionexpense Marketpriceplus5%to16%

5.5 Commitments with related parties

AsatDecember31,2012,theCompanyhasperformedleasedcontractofland plus property in one contract with one related company for theperiod of 3 years with option to renew. The Company constitutesobligationcommitment thathas to repay leased feebyBaht467,000.00permonth.

As at December 31, 2012, one subsidiary has performed the subletcontractof landplusproperty inonecontractwitha subsidiary for theperiod of 3 year with option to renew. The subsidiary constitutesobligationcommitment thathas to repay leased feebyBaht100,000.00permonth.

AsatDecember31,2012,onerelatedcompanyhasperformedthesubletcontract of land plus property in 2 contracts with a subsidiary for theperiod of 3 years with option to renew. The subsidiary constitutesobligation commitment that has to repay leased fee by Baht 42,000.00andBaht86,000.00permonth.

AsatDecember31,2012,onerelatedcompanyhasperformedthesubletcontractoflandpluspropertyinonecontractwithsubsidiaryfortheperiodof 3 years with option to renew. The subsidiary constitutes obligationcommitmentthathastorepayleasedfeebyBaht88,500.00permonth.


As at December 31, 2012, one subsidiary has performed the subletcontractoflandpluspropertyinonecontractwithdirectorfortheperiodof3yearwithoptiontorenewtheappraisalofanindependentappraiser.ThesubsidiaryconstitutesobligationcommitmentthathastorepayleasedfeebyBaht57,800.00permonth.

As at December 31, 2012, a subsidiary has used of property of theCompany inorder touseas factoryandoperate relatedbusinesswhiledoesnotchargeinter-leasedfee.

AsatDecember31, 2012, twosubsidiaries and twodirectorswith landplus buildings of one subsidiary as collateral against credits that theCompanyhasreceivedfromacommercialbankinamountofBaht410.00million.

As at December 31, 2012, one director with his land plus building ascollateral against credits that the Company has received from onecommercialbankinamountofBaht235.00million.

AsatDecember31,2012,onesubsidiaryandtwodirectorswithlandplusbuildingofonedirectorascollateralforagainstcreditsthattheCompanyhasreceivedfromacommercialbankinamountofBaht490.00million.

As at December 31, 2012, two directors of the Company with fixeddepositofonesubsidiaryascollateralagainstcreditsthatsuchsubsidiaryhasreceivedfromacommercialbankinamountofBaht56.00millionandamountofUSD0.50million.

As at December 31, 2012, one director of the Company with bill ofexchange of one subsidiary as collateral against credits that suchsubsidiaryhasreceivedfromacommercialbankinamountofBaht10.00million.

As at December 31, 2012, the Company has pledged a subsidiary’sordinaryshares,which theownershipbelongs to theCompany, togetherwith land plus buildings, machinery and deposits of one subsidiary ascollateral against credits that such subsidiary has received from onecommercialbankinamountofBaht2,347.10million.


As at December 31, 2012, the Company has pledged an associate’sordinaryshares,which theownershipbelongs to theCompany, togetherwith land plus property, land leasehold right, machine and equipment-during-installationandbankdepositofthesaidassociateforjointlyofferthe collateral for the credit facilities the associate received from acommercialbankatthecreditlineofBaht2,384.90million.

As at December 31, 2012, the Company has mortgaged land plusbuildingwhichtheownershipbelongstotwodirectorsoftheCompanyascollateral against credits that the Company has received from acommercialbankinamountofUSD100.00million.

As atDecember 31, 2012, one subsidiary hasmortgaged land of themand has pledged the ordinary shares of the Company, which theownershipbelongs toGunkulGroupCo.,Ltd.offer thecollateral for thecreditfacilitiesoftheonesubsidiaryreceivedfromacommercialbankatthecreditlineofBaht348.00million.

AsatDecember31,2012,theCompanyhaspledgedtheordinarysharesoftheCompany,whichtheownershipbelongstoGunkulGroupCo.,Ltd.,offer thecollateral for thecredit facilities theCompany received fromacommercialbankatthecreditlineofBaht2,169.00million

AsatDecember31,2012,theCompanyhasenteredintotheconstructioncontractwithonerelatedcompanytoperformtheinfrastructureworkandpavingstoneswhichhasthevalueinamountofBaht45.33million.AsatDecember 31, 2012, such the Company had outstanding commitmentstotalingapproximatelyBaht11.18million

AsatDecember31,2012,onesubsidiaryenteredintoasolarpowerplantconstructionandcivilworksin4contractswiththeCompany.SuchtheconstructioncontractpricewasinamountofBaht1,450.03million.AsatDecember 31, 2012, such subsidiary had outstanding commitmentstotalingapproximatelyBaht665.52million.

As at December 31, 2012, one associate has entered into theconstructioncontractandcivilworkswith theCompany forconstructingfloodprotectionsystem,waterdrainagesystemandpavingstoneswhichhas the value in amountofBaht 1,224.02million. AsatDecember31,


2012,suchassociatehadoutstandingcommitmentstotalingapproximatelyBaht41.09million

As at December 31, 2012, one associated entered into a power plantservice and maintenance agreement with the Company for the period6years.Thecontractualamount isBaht111.60million.AsatDecember31,2012, suchassociate’soutstandingobligation remainsatBaht98.85million.

As at December 31, 2013, one associated entered into constructionagreements for flood protection system, storm drainage system andadditionalpavingandbuildingstonepathways.ThecontractualamountisBaht 33.46 million. As at December 31, 2012, such associate’soutstandingobligationremainsatBaht5.91million.

5.6 Relationship

Company Relationship GunkulGroupCo.,Ltd. Themajorityshareholder G.K.AssemblyCo.,Ltd. Commondirectorsanddirectshareholding G.K.PowerProductCo.,Ltd. Commondirectorsanddirectshareholding K.N.PSupplyCo.,Ltd. Commondirectorsanddirectshareholding GunkulPowergenCo.,Ltd. Commondirectorsanddirectshareholding WindEnergyDevelopmentCo.,Ltd. Commondirectorsanddirectshareholding G-PowerSourceCo.,Ltd. Commondirectorsanddirectshareholding GunkulTradingandAgencyCo.,Ltd. Commondirectors BE-FECJointventure Commondirectors Sri-UthongandFutureElectrical ControlJointventure Commondirectors FEC&SACJointventure Commondirectors G.M.SupplyandConstructionCo.,Ltd.Commondirectors GunkulEngineering(2000)Co.,Ltd. Commondirectors FutureElectricalControlCo.,Ltd. Commondirectors GunkulMarineLineCo.,Ltd. Holdingbythedirector KulnateeCo.,Ltd. Holdingbycloserelativeofadirector P.M.AuditCo.,Ltd. Holdingbycloserelativeofadirector G.E.S.Logistics(Thailand)Co.,Ltd. Holdingbycloserelativeofadirector


�. Trade and other receivable - related parties

Outstandingtradereceivable-relatedpartiescanbeagedasfollows:(Unit:Baht)


2012 2011 2012 2011


Withincreditterm 400,882,409.82 82,216.07 412,647,774.03 17,363,040.30

Overdue1monthto3months 9,445,275.24 22,274,098.62 599,108.25 22,882,914.81

Overdue3monthsto6months - - 528,666.03 860,475,194.97

Overdue6monthsto12months - - 861,263.87 -

Overdueover12months - - 678,567.75 -

Total 410,327,685.06 22,356,314.69 415,315,379.93 900,721,150.08

Otherreceivable 7,656,008.59 - 7,698,691.76 5,598,238.75

Total 417,983,693.65 22,356,314.69 423,014,071.69 906,319,388.83

�. Trade and other receivable - third parties

Consistedof:-(Unit:Baht)


2012 2011 2012 2011


Postdatedcheques 52,484,953.42 17,682,692.19 51,770,009.74 15,819,675.44

Tradereceivable 407,381,568.81 550,372,215.38 358,816,168.51 448,192,678.93

Returnedchequesreceivable 987,142.65 1,092,952.44 987,142.65 1,092,952.44

Constructionreceivable 298,578,676.54 26,012,004.84 298,578,676.54 26,012,004.84

Total 759,432,341.42 595,159,864.85 710,151,997.44 491,117,311.65

Less Allowancefordoubtfuldebts (3,215,511.17) (1,886,731.52) (2,298,670.97) (1,700,551.52)

Totaloftradereceivable 756,216,830.25 593,273,133.33 707,853,326.47 489,416,760.13

Otherreceivables 55,622,750.56 26,088,352.48 41,779,111.11 16,993,671.66

Suspenseinputtax 25,192,739.07 2,387,286.80 18,732,312.58 953,305.22

Less Allowancefordoubtfuldebts (227,115.21) (78,358.21) (78,358.21) (78,358.21)

Net 836,805,204.67 621,670,414.40 768,286,391.95 507,285,378.80


Outstandingtradeaccountreceivable-thirdpartiescanbeagedasfollows:(Unit:Baht)


2012 2011 2012 2011

Withincreditterm 533,530,611.62 312,180,834.49 495,193,191.88 230,542,322.21

Overdue1monthto3months 181,616,212.63 176,574,396.51 174,870,384.79 154,542,715.59

Overdue3monthsto6months 40,287,522.42 103,765,423.87 37,404,942.42 103,765,423.87

Overdue6monthsto12months 2,292,353.33 1,662,923.92 1,497,000.93 1,290,563.92

Overdueover12months 1,705,641.42 976,286.06 1,186,477.42 976,286.06

Total 759,432,341.42 595,159,864.85 710,151,997.44 491,117,311.65

Less Allowancefordoubtfuldebts (3,215,511.17) (1,886,731.52) (2,298,670.97) (1,700,551.52)

Net 756,216,830.25 593,273,133.33 707,853,326.47 489,416,760.13

Themovementofallowancefordoubtfuldebts-tradeaccountreceivablethirdpartiesfortheyearendedofDecember31,2012and2011isasfollows:

(Unit:Baht)


2012 2011 2012 2011

Openingbalance (1,886,731.52) (1,063,918.70) (1,700,551.52) (1,063,918.70)

Allowanceincreasedduringtheyear (2,586,107.62) (2,502,621.28) (1,855,447.42) (1,845,641.28)

Collectedduringtheyear 1,257,327.97 1,679,808.46 1,257,327.97 1,209,008.46

Endingbalance (3,215,511.17) (1,886,731.52) (2,298,670.97) (1,700,551.52)

Themovementofallowancefordoubtfuldebts-otherreceivablesfortheyearendedofDecember31,2012and2011isasfollows:

(Unit:Baht)


2012 2011 2012 2011

Openingbalance (78,358.21) (78,358.21) (78,358.21) (78,358.21)

Allowanceincreasedduringtheyear (148,757.00) - - -

Collectedduringtheyear - - - -

Endingbalance (227,115.21) (78,358.21) (78,358.21) (78,358.21)


�. Unbilled receivables and construction revenue received in advance



2012 2011 2012 2011

Unbilledreceivables:

Valueofcontract 4,269,331,008.44 - 5,539,520,382.44 2,203,138,026.00

Revenuerecognisedon

percentageofcompletionbasis 4,233,377,242.33 - 5,009,559,062.40 1,747,882,860.35

LessValueofcontractbilled (4,216,316,275.06) - (4,992,470,511.81) (1,571,413,470.53)

Unbilledreceivables 17,060,967.27 - 17,088,550.59 176,469,389.82

Constructionrevenuereceivedinadvance:

Valueofcontract 304,936,879.00 470,000,000.00 484,774,358.00 470,000,000.00

Valueofcontractbilled 282,414,512.59 666,625,226.28 290,764,512.59 666,625,226.28

LessRevenuerecognised

onpercentageofcompletionbasis (282,406,481.09) (449,837,000.00) (290,750,940.12) (449,837,000.00)

Constructionrevenuereceivedinadvance 8,031.50 216,788,226.28 13,572.47 216,788,226.28

Theadditionaldataofconstructionareasfollow:

(Unit:Baht)


2012 2011 2012 2011

Costofconstructionandgainare

recognized(lesslossarerecognized)

untilpresent 4,515,783,723.42 449,837,000.00 5,300,310,002.522,197,719,860.35

LessValueofcontractbilled (4,498,730,787.65) (666,625,226.28) (5,283,235,024.40)(2,238,038,696.81)

17,052,935.77(216,788,226.28) 17,074,978.12 (40,318,836.46)

AmountoftheCompanyhasauthority

fromemployer(customer)forconstruction

beregardedasassets/liabilities

Unbilledreceivables 17,060,967.27 - 17,088,550.59 176,469,389.82

Constructionrevenuereceivedin

advance (8,031.50) (216,788,226.28) (13,572.47) (216,788,226.28)

17,052,935.77(216,788,226.28) 17,074,978.12 (40,318,836.46)


�. Inventories


Consolidated

2012 2011

Allowance for Allowance for

diminution in diminution in

value of value of

Cost inventory Net Cost inventory Net

Finishedgoods 288,373,023.43(41,878,933.61) 246,494,089.82 214,527,628.55 (19,885,713.81) 194,641,914.74

Workinprocess 63,740,127.08 (3,697,506.14) 60,042,620.94 46,339,261.39 (1,564,460.38) 44,774,801.01

Rawmaterials 83,248,386.80 (9,055,533.85) 74,192,852.95 131,631,789.19 (7,085,190.03) 124,546,599.16

Supplies 4,823,813.40 (379,995.18) 4,443,818.22 4,487,838.90 (278,679.66) 4,209,159.24

Goodsintransit 27,417,121.17 - 27,417,121.17 14,414,112.08 - 14,414,112.08

Total 467,602,471.88 (55,011,968.78) 412,590,503.10 411,400,630.11 (28,814,043.88) 382,586,586.23

(Unit:Baht)

Separate financial statement

2012 2011

Finishedgoods 265,496,345.85 182,915,105.51

Goodsintransit 3,641,610.15 13,770,929.31

Total 269,137,956.00 196,686,034.82

Less Allowancefordiminutionsinvalueofinventories (34,433,051.68) (16,610,724.45)

Net 234,704,904.32 180,075,310.37

ThemovementofallowancefordiminutionsofinventoriesfortheyearendedonDecember31,2012and2011isasfollows:

(Unit:Baht)


2012 2011 2012 2011

Openingbalance (28,814,043.88) (23,284,190.28) (16,610,724.45) (17,692,863.44)

Allowanceincreasedduringtheyear (27,398,385.37) (7,710,541.35) (17,822,327.23) -

Allowancereversalduringtheyear 1,200,460.47 2,180,687.75 - 1,082,138.99

Endingbalance (55,011,968.78) (28,814,043.88) (34,433,051.68) (16,610,724.45)


FortheyearsendedonDecember31,2012,thecostsofinventoriesrecognizedas expenses are Baht 1,425.02 million and Baht 1,308.28 million in theconsolidatedandseparatefinancialstatement,respectively.

FortheyearsendedonDecember31,2012,theGrouphasreversedallowancefordiminutionsinthevalueofinventoriesinamountofBaht1.20millionintheconsolidated

As at December 31, 2012, the some inventorieswith the carrying amount ofBaht 112.53 million in the consolidated financial statement and Baht 83.18millionintheseparatefinancialstatement,respectively,areexpectedtobesoldmorethantwelvemonthsafterthereportingperiod.

�0. Fixed deposits and bill of exchange pledged as collateral

As atDecember 31, 2012and2011, thebankdeposits andbill of exchangethatequippedwithguaranteeburdenoftheGroup,hasbeenpledgedassuretyagainst credit facility that one subsidiary company receives from financeinstitutes and letter of guarantee that issued by banks in order to use inbusinessoperation.

��. Investments in associate

Name of Nature of Country of (Unit :’000 Baht) Percentage (Unit :’000 Baht)

company business incorporation Paid-up capital % of holding Equity Method Cost Method

2012 2011 2012 2011 2012 2011 2012 2011

G-PowerSource Generating Thailand 894,000 - 40.00% - 321,406 - 383,195 -

Co.,Ltd. andselling

electricity


Thefinancialinformationoftheassociatecanbesummarizedasfollows:(Unit:Baht)

As at December 31,

2012 2011

Totalassets 3,244,248,009.662,220,592,416.04

Totalliabilities 2,275,891,106.901,478,263,967.08

Netassets 968,356,902.76 742,328,448.96

(Unit:Baht)

For the year ended on December 31

2012 2011

Totalrevenues 293,656,624.52 2,636,394.18

Totalcomprehensiveincomefortheperiod 82,028,453.80 (7,663,071.86)

��. Investments in subsidiaries

The nature and carrying value of investment in subsidiaries in the separatefinancialstatementcanbesummarisedasfollows:

Paid-up capital Investment portion Cost method Dividends Name of subsidiary (‘000 Baht) (%) (‘000 Baht) (‘000 Baht)

2012 2011 2012 2011 2012 2011 2012 2011

G.K.PowerProductCo.,Ltd. 100,000 100,000 100.00 100.00 80,425 80,425 8,610 2,760

G.K.AssemblyCo.,Ltd. 200,000 200,000 100.00 100.00 163,188 163,188 1,682 9,830

K.N.PSupplyCo.,Ltd. 50,000 50,000 100.00 100.00 41,408 41,408 15,280 7,250

GunkulPowergenCo.,Ltd. 992,000 280,000 100.00 100.00 992,000 280,000 - -

WindEnergyDevelopment

Co.,Ltd. 103,475 - 70.00 - 539,832 - - -

G-PowerSourceCo.,Ltd. - 750,000 - 100.00 - 813,337 - -

Total 1,816,8531,378,358 25,572 19,840

Regarding to the resolution of the Gunkul Powergen’s Board of DirectorMeeting 3/2012 held on March 6, 2012, the meeting has approved the 4thpaymentof increasesharecapital fromtheCompany inamountofBaht8.00


pershare from3,000,000shareswhichhas totalamountequal toBaht24.00million. The total paid-up share capital until now is equal to Baht 68.00 pershare.

Regarding to the resolution of the Gunkul Powergen’s Board of DirectorMeeting 5/2012 held on April 2, 2012, the meeting has approved the 5thpaymentofincreasesharecapitalfromtheCompanyinamountofBaht32.00pershare from3,000,000shareswhichhas totalamountequal toBaht96.00million.Thetotalpaid-upsharecapitaluntilnowisequaltoBaht100pershare.

Regarding to the Extra-ordinary Shareholder Meeting No.1/2012 on April 10,2012ofWindEnergyDevelopmentCo.,Ltd.themeetinghasapprovedtoraiseregisteredcapitalof thesaidcompany fromBaht52.00million toBaht78.00million by allotment 2,600,000 new common shares to Impact Energy AsiaPacific Ltd which has value equal to Baht 10.00 per share. which has totalamountequaltoBaht26.00millionandpaid-upsharecapitaltotally.

Regarding to the Extra-ordinary Shareholder Meeting No.1/2012 on May 15,2012 of Gunkul Powergen Co., Ltd. the meeting has approved to raiseregisteredcapitalofthesaidcompanyfromBaht400.00milliontoBaht660.00millionbyallotment2,600,000newcommonsharestotheCompanywhichhasvalue equal to Baht 100.00 per share. The meeting has also approved thepaymentofsharecapitalincreaseinamountofBaht25.00persharewhichhasfirstpaymentofincreasesharecapitalequaltoBaht65.00million.

Regarding to the Extra-ordinary Shareholder Meeting No.2/2012 on July 10,2012ofGunkulPowergenCo.,Ltd,themeetinghadtheresolutiontoincreasetheregisteredcapitalfrom660.00millionbahtto785.00millionbahtbymakingallotment in the number of 1,250,000 shares in amount of 100.00 baht persharetotheCompanyandcallingthepaymentofincreasecapitalinamountof25.00bahtpershare.Thetotalfirstpaymentofincreasedcapitalisinamountof31.25millionbaht.

Regarding to the Extra-ordinary Shareholder Meeting No.3/2012 on July 27,2012ofGunkulPowergenCo.,Ltd.,themeetinghadtheresolutiontoincreasetheregisteredcapitalfrom785.00millionbahtto880.00millionbahtbymakingallotmentinthenumberof950,000sharesinamountof100.00bahtpersharetotheCompanyandcallingthepaymentofincreasecapitalinamountof25.00


baht per share. The total first payment of increased capital is in amount of23.75millionbaht.

Regarding to the resolution of theWindEnergyDevelopment’s Extra-ordinaryShareholders Meeting 4/2012 held on September 28, 2012, the meeting hasapproved to raise registered capital of the said company from Baht 78.00million toBaht 179.90millionby allotment 7,132,999newcommon shares totheCompanyandallotment3,057,000sharetoImpactEnergyAsiaLimitedand1share toMr.GunkulDhumrongpiyawutwhichhasvalueequal toBaht10.00per share. The meeting has also approved the payment of share capitalincrease in amount of Baht 2.50 per share which has total first payment ofincreasesharecapitalequaltoBaht25.48million.

Regarding to the resolution of the Gunkul Powergen’s Board of DirectorMeeting21/2012heldonNovember1,2012,themeetinghasapprovedthe2ndpaymentofincreasesharecapitalfromtheCompanyinamountofBaht75.00persharefrom4,800,000shareswhichhastotalamountequaltoBaht360.00million.

Regarding to theExtra-ordinaryShareholderMeetingNo.4/2012onDecember17, 2012 of Gunkul Powergen Co., Ltd. the meeting has approved to raiseregisteredcapitalofthesaidcompanyfromBaht880.00milliontoBaht992.00millionbyallotment1,120,000newcommonsharestotheCompanywhichhasvalue equal to Baht 100.00 per share. The meeting has also approved thepaymentofsharecapitalincreaseinamountofBaht25.00persharewhichhastotal first payment of increase share capital equal to Baht 28.00million andapproved thepaymentofsharecapital increase inamountofBaht75.00persharethefullypaidupcapitalinamountofBaht84.00million.

OnMarch30,2012,theCompanysold4,500,000commonsharesofG-PowerSource Company Limited (“GPS”) to Electricity Generating Public CompanyLimited(“ECGO”)whichrepresents60.00%ofGPS’sregisteredsharesat thetotal selling price of Baht 629.92millionwhere the Company recognized thegain on disposal of subsidiary in amount of Baht 416.22 million and Baht141.53 million in the consolidated and separate financial statements,respectively. The Company had already received the first payment of Baht594.92million onMarch 30, 2012 and the remaining payment of Baht 35.00


million will be made when the 4th power plant starts selling the electricitycommerciallytothePEA.(OnFebruary1,2013,thepowerplantcommentstosellelectricity).Intheeventthatthe4thpowerplantcansellelectricitybeforeDecember1,2012,EGCOagreestoincreasethepaymentattherateofBaht8,900.00 per MW per day. However, if the commercial operation date isextendedbeyondDecember1,2012, theCompanyagreestoreceivea lesserpayment at the same rate mentioned above. However, the Company’smanagements expect the 4th power plant will sell electricity commercially atanygiventime.

For the year ended on December 31, 2012, the Company recognized suchpenaltyinthestatementofcomprehensiveincomeatanamountof3.59millionBahtbecausetheCompanyestimatesthatthe4thpowerplantsellselectricitylaterthantheplan.

Information concerning the gain from disposal of investment in subsidiary inamount of Baht 416.22millions in the consolidated financial statement is asfollows:

(Unit:Baht)

Consolidated

Fairvalueofconsiderationreceived

Cash 594,917,350.00

Receivablefromdisposalofinvestmentinsubsidiary 35,000,000.00

629,917,350.00

Fairvalueofresidualinterest 304,152,768.47

934,070,118.47

Less Carryingamountofnetassets (517,848,120.14)

Gainfromdisposalofinvestmentinsubsidiary 416,221,998.33

The gain from disposal of investment in subsidiary in the amount of Baht416.22millionintheconsolidatedfinancialstatementhadincludedtheportionofgainrecognizedfromtheinvestmentremainedintheformersubsidiaryatitsfairvalueatthedatewhencontrolislostintheamountof97.01millionisasfollows:


(Unit:Baht)

Consolidated

Fairvalueofresidualinterest 304,152,768.47

Less 40%ofcarryingamountofnetassets (207,139,248.06)

PortionofGainarisingfromrecognizedfromtheinvestmentremained 97,013,520.41

OnMay15,2012, theCompanypurchased5,460,000ordinaryshares inWindEnergy Development Co., Ltd. at Baht 95.60 per share, totaling Baht 522.00million from the former shareholder of such company which there norelationshipwiththeCompany,equivalenttoproportionof70.00%ofthewholeregistered capital of such. It results that the Company has power to controlsuchsubsidiary.WindEnergyDevelopmentCo.,Ltd.’sprincipalactivitiesinvolvegenerate and sell wind energy electricity. The reason for purchase of suchsharesisthattheCompanywishestobeasignificantparticipanttoencouragethecleanpowerplant.TheCompanyrepayssharesubscriptionfeeasfollows:-

(Unit:Baht)

Considerationforbusinesscombination

Cashpaid 249,500,000.00

Accountpayable** 272,500,000.00

Totalconsiderationforbusinesscombination 522,000,000.00

1st payment in amount of Baht 100.00 million, the transaction will be madewhen receiving financialsupport todevelop10MWWindPowerPlant (withinMarch 31, 2013), during 2012 the Company has partial paid outstandingbalanceofBaht92.36million.

2nd payment in amount of Baht 172.50 million, the transaction will be madewhen receiving financialsupport todevelop50MWWindPowerPlant (withinSeptember30,2014)


Theamountsoftheassetsacquiredandliabilitiesassumedwereasfollow:-

(Unit:Baht)

Cashonhandandcashatbank 31,092,853.53

Otherreceivable 4,590.28

Othercurrentassets 960,698.67

Advancepaymentforpurchasingland 30,000,000.00

Equipment 3,873,444.67

Powerpurchaseagreement*** 680,784,978.53

Otherpayable (1,000,863.00)

Othercurrentliabilities (1,416.97)

Non-controllinginterest (223,714,285.71)

NetAsset 522,000,000.00

***PowerPurchaseAgreement isagreementselling60megawattswindenergyelectricity to theElectricityGeneratingAuthorityofThailand (“EGAT”)and theProvincial Electricity Authority (“PAE”) for 5 years and renew automatically 5yearswhereassuchagreement receives the financial support fromEGATandPAEintherateofBaht3.50perkilowattfor10years.

FortheyearperiodendedonDecember31,2012,theCompanyrecognizedtheacquisition-related costs in the amount of Baht 4.23 Mill ion as theadministrativeexpenseinthestatementofcomprehensiveincome.

The consolidated statement of comprehensive income for the year ended onDecember31,2012hadincludedtherevenueandprofit(loss)ofWindEnergyDevelopmentCo.,Ltd.fromMay15,2012,asfollows:

(Unit:Baht)

Revenues 147,093.95

Profit(loss) (33,165,752.55)


If the business combination is made on January 1, 2012, The consolidatedstatementofcomprehensiveincomefortheyearendedonDecember31,2012will be included the revenue and profit (loss) of Wind Energy DevelopmentCo.,Ltd.fromJanuary1,2012,asfollows:

(Unit:Baht)

Revenues 147,093.95

Profit(loss) (37,838,209.51)

�3. Investment property


Consolidated

2012 2011

Cost:

AsatJanuary1 - -

Purchase 32,572,545.00 -

AsatDecember31 32,572,545.00 -

Accumulatedimpairmentlosses:

AsatJanuary1 -

Increase (1,382,545.00) -

AsatDecember31 (1,382,545.00) -

Netbookvalue

AsatDecember31 31,190,000.00 -

For theyear2012, theappraisalhasappraisedmarketpricesmethod(MarketApproach)themarketvalueoflandisinamountofBaht31.19million.


��. Property, plant and equipments

Consistedof:-

(Unit:Baht)

Co

nsol

idat

ed

Build

ing a

nd

Powe

r plan

t and

M

otor

W

ork

in

La

nd

impr

ovem

ent

equip

men

ts

vehic

les

cons

truct

ion

Tota

l Cost:-

AsatJanuary1,2012

212,385,535.97

112,774,860.30

888,958,470.70

44,409,173.44

2,167,020,611.89

3,425,548,652.30

Addition

362,052,425.00

-9,017,872.22

11,718,023.06

1,391,078,294.22

1,773,866,614.50

Increasefromacquisitionofsubsidiary

--

4,600,724.38

--

4,600,724.38

Transferin

30,000,000.00

-16,773,545.03

-27,958.50

46,801,503.53

Disposal

--

(1,451,281.14)

(4,313,421.47)

-(5,764,702.61)

Transferout

--

--

(16,858,502.84)

(16,858,502.84)

Transferouttoworkinprocess

--

--

(738,881,873.17)

(738,881,873.17)

Decreasefromdisposalofsubsidiary

(77,064,623.42)

-(4,335.09)

-(1,422,353,983.25)

(1,499,422,941.76)

Write-off

--

(1,249,256.34)

--

(1,249,256.34)

AsatDecember31,2012

527,373,337.55

112,774,860.30

916,645,739.76

51,813,775.03

1,380,032,505.35

2,988,640,217.99

Accumulateddepreciation:-

AsatJanuary1,2012

-(42,105,721.46)

(114,264,085.85)

(25,481,738.43)

-(181,851,545.74)

Depreciationcharge

-(3,564,282.66)

(41,536,774.78)

(2,329,318.18)

-(47,430,375.62)

Increasefromacquisitionofsubsidiary

--

(727,279.71)

--

(727,279.71)

Disposal

--

1,559,844.27

2,576,272.01

-4,136,116.28

Decreasefromdisposalofsubsidiary

--

490.53

--

490.53

Write-off

--

1,132,628.79

--

1,132,628.79

AsatDecember31,2012

-(45,670,004.12)

(153,835,176.75)

(25,234,784.60)

-(224,739,965.47)

Allowanceforimpairment:-

AsatJanuary1,2012

--

(228,866.26)

--

(228,866.26)

Reverse

--

223,740.69

--

223,740.69

AsatDecember31,2012

--

(5,125.57)

--

(5,125.57)

Netbookvalue:-

AsatDecember31,2012

527,373,337.55

67,104,856.18

762,805,437.44

26,578,990.43

1,380,032,505.35

2,763,895,126.95

DepreciationinthestatementsofcomprehensiveincomefortheyearsendedonDecember31,2012

47,430,375.62


(Unit:Baht)

Co

nsol

idat

ed

Build

ing a

nd

Tool

and

Fix

ture

and

offi

ce

Mot

or

Wor

k in

Land

im

prov

emen

t eq

uipm

ents

eq

uipm

ents

ve

hicles

co

nstru

ctio

n To

tal

Cost:-

AsatJanuary1,2011

103,305,889.05

95,928,901.54

85,676,337.94

26,723,334.27

31,913,994.18

313,223,271.86

656,771,728.84

Addition

109,079,646.92

16,652,669.41

29,345,216.76

3,326,072.45

12,520,179.26

2,599,438,158.21

2,770,361,943.01

Transferin

-193,289.35

745,424,107.23

78,202.80

--

745,695,599.38

Disposal

--

(39,481.14)

(1,477,041.81)

(25,000.00)

-(1,541,522.95)

Transferout

--

(98,277.80)

--

(745,640,818.18)

(745,739,095.98)

AsatDecember31,2011

212,385,535.97

112,774,860.30

860,307,902.99

28,650,567.71

44,409,173.44

2,167,020,611.89

3,425,548,652.30


AsatJanuary1,2011

-(38,427,385.14)

(66,922,254.63)

(21,435,077.38)

(24,569,209.18)

-(151,353,926.33)

Depreciationcharge

-(3,678,336.32)

(24,369,281.61)

(2,999,044.24)

(937,527.15)

-(31,984,189.32)

Transferin

--

-(1,505.53)

--

(1,505.53)

Disposal

--

38,376.38

1,424,701.06

24,998.00

-1,488,075.44

AsatDecember31,2011

-(42,105,721.46)

(91,253,159.86)

(23,010,926.09)

(25,481,738.33)

-(181,851,545.74)

Allowanceforimpairment:-

AsatJanuary1,2011

--

--

--

-

Addition

--

(217,535.05)

(11,331.21)

--

(228,866.26)

AsatDecember31,2011

--

(217,535.05)

(11,331.21)

--

(228,866.26)

Netbookvalue:-

AsatDecember31,2011

212,385,535.97

70,669,138.84

768,837,208.08

5,628,310.41

18,927,435.11

2,167,020,611.89

3,243,468,240.30

DepreciationinthestatementsofcomprehensiveincomefortheyearsendedonDecember31,2011

31,984,189.32


(Unit:Baht)

Se

para

te fi

nanc

ial s

tate

men

t

Bu

ilding

and

To

ol a

nd

Fixtu

re a

nd o

ffice

M

otor

im

prov

emen

t eq

uipm

ents

eq

uipm

ents

ve

hicles

W

ork

in co

nstru

ctio

n To

tal

Cost:-

AsatJanuary1,2012

32,521,545.38

2,705,845.87

15,433,593.05

30,614,826.89

-81,275,811.19

Addition

-207,632.50

1,878,354.08

10,231,626.1712,608,172.14

24,925,784.89

Transferin

--

--

--

Disposal

-(27,383.48)

(470,247.66)

(2,530,785.95)

-(3,028,417.09)

Transferout

--

--

--

AsatDecember31,2012

32,521,545.38

2,886,094.89

16,841,699.47

38,315,667.1112,608,172.14

103,173,178.99


AsatJanuary1,2012

(25,425,657.47)

(2,421,715.37)

(11,256,192.78)

(15,468,539.18)

-(54,572,104.80)

Depreciationcharge

(899,887.03)

(138,669.73)

(1,747,449.39)

(1,856,143.47)

-(4,642,149.62)

Transferin

--

--

--

Disposal

-27,382.48

582,021.17

1,959,188.72

-2,568,592.37

Transferout

--

--

--

AsatDecember31,2012

(26,325,544.50)

(2,533,002.62)

(12,421,621.00)

(15,365,493.93)

-(56,645,662.05)

Netbookvalue:-

AsatDecember31,2012

6,196,000.88

353,092.27

4,420,078.47

22,950,173.18

12,608,172.14

46,527,516.94

DepreciationinthestatementofcomprehensiveincomefortheyearendedonDecember31,2012

4,642,149.62


(Unit:Baht)

Se

para

te fi

nanc

ial s

tate

men

t

Bu

ilding

and

To

ol a

nd

Fixtu

re a

nd o

ffice

M

otor

im

prov

emen

t eq

uipm

ents

eq

uipm

ents

ve

hicles

To

tal

Cost:-

AsatJanuary1,2011

32,452,190.28

2,669,325.28

14,027,630.10

21,608,696.05

70,757,841.71

Addition

69,355.10

126,104.53

2,795,651.96

9,006,130.84

11,997,242.43

Transferin

--

78,202.80

-78,202.80

Disposal

-(11,381.14)

(1,467,891.81)

-(1,479,272.95)

Transferout

-(78,202.80)

--

(78,202.80)

AsatDecember31,2011

32,521,545.38

2,705,845.87

15,433,593.05

30,614,826.89

81,275,811.19


AsatJanuary1,2011

(24,230,612.26)

(2,306,537.41)

(10,850,973.66)

(14,829,467.18)

(52,217,590.51)

Depreciationcharge

(1,195,045.21)

(127,764.63)

(1,823,457.60)

(639,072.00)

(3,785,339.44)

Transferin

--

(1,505.53)

-(1,505.53)

Disposal

-11,081.14

1,419,744.01

-1,430,825.15

Transferout

-1,505.53

--

1,505.53

AsatDecember31,2011

(25,425,657.47)

(2,421,715.37)

(11,256,192.78)

(15,468,539.18)

(54,572,104.80)

Netbookvalue:-

AsatDecember31,2011

7,095,887.91

284,130.50

4,177,400.27

15,146,287.71

26,703,706.39

DepreciationinthestatementofcomprehensiveincomefortheyearendedonDecember31,2011

3,785,339.44


AsatDecember31,2012,certainplantandequipmentitemsoftheGrouphavebeenfullydepreciatedbutarestill inuse.Theoriginalcost,beforedeductingaccumulateddepreciation,ofthoseassetsamountedtoBaht85.78million.

AsatDecember31,2012,onesubsidiaryhaspledgedthelandpluspropertyinoriginal cost of Baht 139.05 million to guarantee against credit facility of theCompanythatreceivesfromacommercialbankinamountofBaht410.00million.

AsatDecember31,2012,onesubsidiaryhaspledgedthelandplusproperty,machineryandequipmentinoriginalcostofBaht2,512.83milliontoguaranteeagainstcreditfacilityofitssubsidiarythatreceivesfromacommercialbankinThaiBahtamountingofBaht3,131.10million.

AsatDecember31,2012,onesubsidiaryhaspledgedthelandinoriginalcostofBaht378.00milliontoguaranteeagainstcreditfacilityoftheCompanythatreceivesfromacommercialbankinamountofBaht348.00million

Machinesandvehiclesunderfinance leases,wheretheGroupare lesseewithnetbookvalueasatDecember31,2012ofBaht22.43millioninconsolidatedfinancialstatementsandBaht19.95millionintheseparatefinancialstatements.

��. Intangible assets


Consolidated Computer Power purchase software Copyright agreement Total

Cost:- AsatJanuary1,2012 2,245,975.00 1,208,445.00 65,000,000.00 68,454,420.00 Purchase 227,680.00 - - 227,680.00 Increasefromacquisitionofsubsidiary - - 680,784,978.53 680,784,978.53 Disposal - - (65,000,000.00) (65,000,000.00) AsatDecember31,2012 2,473,655.00 1,208,445.00 680,784,978.53 684,467,078.53Accumulatedamortization:- AsatJanuary1,2012 (1,336,493.28) (1,066,883.49) - (2,403,376.77) Amortizationcharge (423,966.67) (139,002.52) - (562,969.19) AsatDecember31,2012 (1,760,459.95) (1,205,886.01) - (2,966,345.96)Netbookvalue:- AsatDecember31,2012 713,195.05 2,558.99 680,784,978.53 681,500,732.57

Amortizationchargesinstatementsofcomprehensiveincome fortheyearendedonDecember31,2012 562,969.19


(Unit:Baht)

Consolidated

Computer Power purchase

software Copyright agreement Total

Cost:-

AsatJanuary1,2011 2,140,625.00 1,208,445.00 65,000,000.00 68,349,070.00

Purchase 105,350.00 - - 105,350.00

AsatDecember31,2011 2,245,975.00 1,208,445.00 65,000,000.00 68,454,420.00

Accumulatedamortization:-

AsatJanuary1,2011 (943,794.62) (825,194.48) - (1,768,989.10)

Amortizationcharge (392,698.66) (241,689.01) - (634,387.67)

AsatDecember31,2011 (1,336,493.28) (1,066,883.49) - (2,403,376.77)

Netbookvalue:-

AsatDecember31,2011 909,481.72 141,561.51 65,000,000.00 66,051,043.23

Amortizationchargesinstatementsofcomprehensiveincome

fortheyearendedonDecember31,2011 634,387.67

(Unit:Baht)

Separate financial statements

Computer software

2012 2011

Cost:-

AsatJanuary1 595,048.00 595,048.00

Purchase - -

AsatDecember31 595,048.00 595,048.00

Accumulatedamortization:-

AsatJanuary1 (403,139.11) (284,129.51)

Amortizationcharge (119,009.60) (119,009.60)

AsatDecember31 (522,148.71) (403,139.11)

Netbookvalue:-

AsatDecember31 72,899.29 191,908.89

Amortizationchargesinstatementsofcomprehensiveincome

fortheyearendedonDecember31 119,009.60 119,009.60


��. Other non - current assets



2012 2011 2012 2011

Retentionfee 8,313,766.78 9,315,225.12 650,173.10 464,145.12

Prepaidwithholdingtax 1,796,188.82 12,025,276.25 1,796,188.82 1,796,188.82

Others 20,500.00 303,042.80 - -

Total 10,130,455.60 21,643,544.17 2,446,361.92 2,260,333.94

Less Allowancefordoubtfuldebts-

prepaidwithholdingtax (1,796,188.70) (1,796,188.82) (1,796,188.82) (1,796,188.82)

Net 8,334,266.90 19,847,355.35 650,173.10 464,145.12

��. Bank overdrafts and short-term loans from financial institutions

Consistedof:-

(Unit:Baht)


2012 2011 2012 2011

Short-termloans 1,426,812,293.28 849,473,240.00 1,054,748,700.00 849,473,240.00

Trustreceiptpayable 259,436,599.051,722,974,499.06 177,035,063.081,702,746,811.56

Total 1,686,248,892.332,572,447,739.06 1,231,783,763.082,552,220,051.56

As at December 31, 2012, the Group held bank overdraft, trust receipt, andletters of credit facilities from several financial institutions in Thai BahtamountingofBaht3,227.00million,USDollaramountingofUSD50.00million.Interestrateis1.850%-7.000%perannum.

AsatDecember31,2012and2011,theGroupconstitutesimportantprocedureto comply with the loan contract which is specified in the loan contract asfollows:

- It is determined that the Company and subsidiaries have to maintainproportionofsome financial issue inaccordancewith thedeterminationofthosespecifiedintheloancontract.


- Itisdeterminedtoforbidthatsubsidiariesguaranteetoanyoneorcauseanyobligationwithoutexceptthebankwillconsentthatoperation.

- Itisdeterminedthatthedividendpaidofsubsidiariesissubjecttothetermsofthecontract.

SuchcreditfacilitylineispledgedbymortgagedregisteroflandpluspropertyoftheGroup,machineryandequipmentofonesubsidiary,landpluspropertyoftwodirectors,includingfixeddepositoftheCompanyandasubsidiary.

��. Trade and other payable - related parties



2012 2011 2012 2011

Tradepayable 29,503,281.20 - 218,400,374.49 62,712,016.42

Advancesreceivedfromcustomers

underconstructioncontracts 3,607,407.66 - 70,159,669.28 89,349,813.75

Advancesreceivedforgoods 7,605,004.68 7,605,004.68 - -

Accruedexpenses 445,200.00 128,000.00 1,946,097.43 -

Total 41,160,893.54 7,733,004.68 290,506,141.20 152,061,830.17

��. Trade and other payable - third parties



2012 2011 2012 2011

Tradepayable 296,936,192.73 133,210,392.50 208,112,516.74 83,230,535.70

Subcontractorspayable 402,165,354.58 267,319,696.69 434,306,550.73 273,149,001.36

Accruedexpenses 88,411,311.57 13,137,414.35 32,739,131.02 13,125,942.56

Otherpayable 19,654,107.18 23,541,701.06 32,804,008.51 10,060,547.34

Suspenseoutputtax 30,884,089.25 1,832,829.31 29,663,979.52 1,819,523.98

Total 838,051,055.31 439,042,033.91 737,626,186.52 381,385,550.94


�0. Advances received from employers and construction revenue received in advance - third parties



2012 2011 2012 2011

Advancesreceivedfromemployers 3,445,098.84 8,537,477.38 3,445,098.84 8,537,477.38

Revenuereceivedinadvance - 216,788,226.28 - 216,788,226.28

Total 3,445,098.84 225,325,703.66 3,445,098.84 225,325,703.66

��. Obligation under finance lease

Obligationunderfinancelease-minimumleasepayments:(Unit:Baht)

Consolidated financial statements

2012 2011

Obligation Deferred Obligation Deferred under finance under finance finance lease lease charges Net finance lease lease charges Net

Notlaterthan1year 6,365,410.20(1,574,969.55) 4,790,440.65 6,113,816.28 (922,221.21) 5,191,595.07

Laterthan1year

butnotlaterthan

5years 18,796,150.28(2,699,947.98) 16,096,202.30 9,965,308.69 (1,398,187.22) 8,567,121.47

Total 25,161,560.48(4,274,917.53) 20,886,642.95 16,079,124.97 (2,320,408.43) 13,758,716.54

(Unit:Baht)


2012 2011 Obligation Deferred Obligation Deferred under finance under finance finance lease lease charges Net finance lease lease charges Net

Notlaterthan1year 5,114,278.20(1,146,801.50) 3,967,476.70 5,541,304.28 (733,834.87) 4,807,469.41

Laterthan1year

butnotlaterthan

5years 14,321,495.23 (1,911,934.85) 12,409,560.38 7,826,494.64 (1,074,783.04) 6,751,711.60

Total 19,435,773.43(3,058,736.35) 16,377,037.08 13,367,798.92 (1,808,617.91) 11,559,181.01


As at December 31, 2012, the Group performs the contract of long termfinancial leasedwith several leasing companies so as to leasemachines andvehiclesbynumberof20contracts.Theleasedcontractsdetermineleasedfeerepayment asmonthly installment fromBaht 4,777.50 toBaht 137,600.00permonth. The leased period is carried from 4 years to 5 years. Such leasedcontractcomprises theGroup’s shareholdersanddirectorsasguarantors. Inaddition,ownershipofsuchmachinesandvehicleswilltransfertoownershipoftheGroupwhen theGrouppays the final installment in accordancewith theleasedcontract.

TheGroupamortizedtheinterestaccordingtothefinancialleasedcontractfortheyearendedonDecember31,2012intheamountofBaht1.35millionintheconsolidatedfinancialstatementandBaht1.11millionintheseparatefinancialstatements which was recorded as “Finance cost” in the statement ofcomprehensiveincome.

��. Long-term loans from financial institutions

Consistedof:(Unit:Baht)

Consolidated

2012 2011

Long-termloansfromfinancialinstitutions 1,485,858,694.45 982,408,420.99

Less Currentportion (122,170,971.74) (85,745,115.48)

Net 1,363,687,722.71 896,663,305.51

As at December 31, 2012, the one subsidiary held long-term loans of creditfacilitiesofBaht2,347.10millionsoas torepay for loans(Refinance)andforthe construction to power plant, the interest is charged by referring frominterestrateof4.935%-5.060%perannum,itisdeterminedthattheprincipleand interest are quarter repayable. The first installment is repayable onJanuary,2012.AsatDecember31,2012,theoutstandingcommitmentremainthetotalingapproximatelyBaht1,485.86million.

- It is determined that one subsidiary have to maintain proportion of somefinancialissueinaccordancewiththedeterminationofthosespecifiedintheloancontract.


- It isdetermined that thedividendpaidofonesubsidiary is subject to thetermsofthecontract.

- Itisdeterminedtoforbidthatonesubsidiaryguaranteetoanyoneorcauseanyobligationwithouttheconsentthatoperationfrombank.

Such credit facility line is guaranteed by mortgaging of land plus property,machines and equipment in progress of one subsidiary asmentioned in thenoteNo.14anditsdepositaccountsopenedwiththesaidfinancialinstitution,as well as pledging the subsidiary’s ordinary shares which the ownershipbelongstotheCompany.

Long-termloans-minimumloanpayments:(Unit:Baht)

Consolidated

2012 2011

Notlaterthan1year 122,170,971.74 85,745,115.48

Laterthan1yearbutnotlaterthan5years 663,851,483.81 400,320,223.03

Laterthan5years 699,836,238.90 496,343,082.48

Total 1,485,858,694.45 982,408,420.99

�3. Provision for warranty

As at December 31, 2012, the provision of Baht 2.40 million and Baht 1.72million in theconsolidatedandseparate financialstatements, respectively,hasbeen recognized for expected warranty claims on products sold to thecustomers.TheGroupisexpectedthatthemajorityofthisexpenditurewillbeincurredinthenextfinancialyear,andallwillbeincurredwithin1-5yearsofthebalancesheetdate.

Themovementofprovision forwarranty for theyearendedonDecember31,2012and2011isasfollows:

(Unit:Baht)


2012 2011 2012 2011

AsatJanuary1 3,229,313.70 3,358,163.85 2,035,995.97 1,963,210.94

Additions 1,892,359.45 802,159.65 1,366,543.13 107,956.75

Unusedamountsreversed (2,721,596.41) (931,009.80) (1,685,894.44) (35,171.72)

AsatDecember31 2,400,076.74 3,229,313.70 1,716,644.66 2,035,995.97


Provisionforwarranty-minimumpayments:

(Unit:Baht)


2012 2011 2012 2011

Within1year 2,168,708.51 2,671,608.27 1,632,620.03 1,643,854.92

Within2years-3years 142,880.10 510,537.82 - 364,947.42

Within4years-5years 88,488.13 47,167.61 84,024.63 27,193.63

Total 2,400,076.74 3,229,313.70 1,716,644.66 2,035,995.97

��. Employee benefit obligation

As at December 31, 2012, theGroup has the employee benefit obligation incase of retirement or termination under the labor law. The Group hires anactuary to calculate on an actuarial technique the said employee benefitobligation. The said employee benefit obligation is discounted using theprojectedunitcreditmethodbyreferencetoan interestrateofagovernmentbondtodeterminethepresentvalueoftheemployeebenefitobligation,relatedpastservicecostandcurrentservicecost.

As at December 31, 2012, the Group recognizes the employee benefitobligationastheliabilityinamountofBaht7.29millionandBaht5.14millionintheconsolidatedandseparatestatementsoffinancialposition,respectively.

Changes in the present value of the employee benefit obligation as atDecember31,2012and2011areasfollows:

(Unit:Baht)


2012 2011 2012 2011

Openingdefinedbenefit 6,618,112.98 8,127,557.00 4,512,746.00 6,422,835.00

Currentservicecost 787,224.00 769,215.00 459,094.00 433,349.00

Interestcost 245,201.00 260,600.98 171,483.00 195,822.00

Benefitpaid (359,880.00) (2,539,260.00) - (2,539,260.00)

Closingdefinedbenefit 7,290,657.98 6,618,112.98 5,143,323.00 4,512,746.00


Principal actuarial assumptions as at December 31, 2012 and 2011 are asfollows:

(Unit:Baht)


2012 2011 2012 2011

Discountrateatendofyear 3.8% 3.8% 3.8% 3.8%

Futuresalaryincrease 5.0%-6.0% 5.0%-6.0% 5.0%-6.0% 5.0%-6.0%

Proportionofemployeesoptingfor

earlyretirement 0.0%-30.0% 0.0%-30.0% 0.0%-30.0% 0.0%-30.0%

��. Share capital

ThemovementofsharecapitalfortheyearendedonDecember31,2012and2011areasfollows:

Number of share Amount

(Unit : share) (Unit : Baht)

Registeredsharecapital(Baht1.00pershare)

AsatJanuary1,2011 400,000,000 400,000,000.00

Incrementofcapital - -

AsatDecember31,2011 400,000,000 400,000,000.00

Incrementofcapital 40,000,000 40,000,000.00

AsatDecember31,2012 440,000,000 440,000,000.00

Number of share Amount

(Unit : share) (Unit : Baht)

Issuedandpaid-upsharecapital(Baht1.00pershare)

AsatJanuary1,2011 400,000,000 400,000,000.00

Incrementofcapital - -

AsatDecember31,2011 400,000,000 400,000,000.00

Incrementofcapital 39,999,984 39,999,984.00

AsatDecember31,2012 439,999,984 439,999,984.00


OnApril10,2012,theAnnualGeneralMeetingoftheCompany’sshareholdershasresolvedto increaseoftheCompany’sregisteredsharecapital fromBaht400,000,000.00 to Baht 440,000,000.00 by issuing new 40,000,000 ordinaryshares with a par value of Baht 1.00 each. The objective of the capitalincrease is toreserveshares forstockdividendpayment.TheCompanyhadregisteredthecapitalwiththeDepartmentofBusinessDevelopment,MinistryofCommerce,effectiveonMay2,2012.

Thecapitalmanagement

TheGroupconstitutespurposewithrespecttocapitalmanagementinordertoremainforabilityinthecontinuedoperationandabilitytoappropriatelyprovideremuneration to various group of participating interest while the Group willmaintaincapitalinthelevelwiththeleastrisk.

Inorder tomaintainoradjust thecapitalstructure, theGroupmayadjust theamountofdividendspaidtoshareholders,returncapitaltoshareholders,issuenewsharesorsellassetstoreducedebtobligations.

��. Legal reserve

Under the provisions of the Public Company Limited Act B.E. 2535, theCompanyisrequiredtosetasideasalegalreserveatleast5%ofitsnetprofitafteraccumulateddeficitbrought forward (ifany)until the reserve isnot lessthan 10%of the registered capital. This reserve is not available for dividenddistribution.

Asat31December2012,theCompanyhasappropriatednetincomeinamountofBaht4.00millionstothelegalreserve.

��. Income tax

The corporate income taxed of the Company and subsidiaries for the yearended onDecember 31, 2012 have been calculated at the rates of 23%onprofitbefore incometax,afteraddingadjustedtransaction inaccordancewiththeRevenueCodewhichismainlyconcerningtolossfromdeclininginvalueofinventories,depreciationofvehiclesfortheexcesscostfromBaht1,etc.


��. Earnings per share

Basicearningspersharearecalculatedbydividingthenetprofitattributabletoshareholders by the weighted average number of ordinary shares in issueduringtheyear.

��. Dividend paid

Inaccordancewiththeannualordinarygeneralmeetingofshareholdersof2012withheldonApril10,2012, it isresolvedtopaydividendstotheCompany’sshareholdersfromtheoperationsfortheyear2011.Thedividendistobepaidasstockdividendinthenumberof40,000,000ordinaryshares,withparvalueofBaht 1.00 each, at a ratio of 10 existing ordinary shares to receive stockdividendof1share,witha totalamountofnotexceedBaht40.00million,orequivalent to the dividend of Baht 0.10 per share. In the case of anyshareholderwitha fractionof thesharesafter thestockdividenddistribution,willbeentitledtoreceivecashdividendattherateofBaht0.10pershare.Inaddition the Company will pay a cash dividend at Baht 0.10 per share, orequivalent toamountofnotexceedBaht40.00million.Totalannualdividendpayment in form of cash and stock dividend equal to Baht 0.20 per share,equivalenttoBaht80.00million.TheCompanypaidsuchdividendinMay2012.

30. Supplemental disclosures of cash flow information

30.1 Cash and cash equivalents consist of :-

(Unit:Baht)


2012 2011 2012 2011

Cashonhandandtaxcoupon 600,904.58 381,758.50 423,338.91 281,566.00

Cashdeposits-Savingaccounts 256,970,577.50 231,290,596.57 176,429,954.38 185,832,230.75

Cashdeposits-Currentaccounts 142,328,149.21 82,505,992.15 38,028,873.95 79,562,733.46

Fixeddepositsnotexceeding3months 33,187.29 785,389.03 33,187.29 32,536.93

Billofexchangenotexceeding3months 182,000,000.00 - 182,000,000.00 -

Total 581,932,818.58 314,963,736.25 396,915,264.53 265,709,067.14


30.2 Non-cash items are as follows:-

(Unit:Baht)


2012 2011 2012 2011

Purchasefixedassetsbutnotyetpaid 594,723,409.15 35,976,056.70 - -

Purchaseassetsbyleased 12,587,149.54 11,464,585.80 9,497,149.54 9,039,803.74

Transferinventoriestoproperty,plantand

equipment 32,378.50 - - -

Transferothernon-currentassetsto

property,plantandequipment 30,000,000.00 - - -

Transferproperty,plantandequipment

toconstructioninprogress 263,547,425.40 - - -

Accrueddividendpayables - - 8,008.36 -

Stockdividend 39,999,984.00 - 39,999,984.00 -

Purchaseinvestmentsinsubsidiaries

butnotyetpaid - - 264,857,500.00 -

Disposalinvestmentsinassociatebutnot

yetreceived - - 35,000,000.00 -

Transferwithholdingtaxtoothernon-current

assets 5,191,708.13 - - -

30.3 Losing control of subsidiary

During the year ended on December 31, 2012, the Company sellsG-Power Source Co., Ltd. to the other company. The information onlosingcontrolofsubsidiaryisasfollow:-

(Unit:Baht)

Cashandcashequivalent 94,202.07

Otherreceivable 3,092,233.90

Othercurrentassets 119,367,714.29

Propertyplantandequipment 1,974,756,408.47

Othernon-currentassets 309,135,485.73

Powerpurchaseagreement 65,000,000.00

Otherpayables (1,358,490,463.51)

Currentportion (25,898,130.27)


(Unit:Baht)

Loansfromrelatedparties (158,632,946.72)

Othercurrentliabilities (2,399,426.43)

Long-termloansfrombank (408,176,957.39)

Netassets 517,848,120.14

Gainfromdisposalofinvestmentinsubsidiary 416,221,998.33

934,070,118.47

LessFairvalueofresidualinterest (304,152,768.47)

Fairvalueofconsiderationreceived 629,917,350.00

Less considerationstillnotreceived(receivablefromsaleofinvestmentofsubsidiary) (35,000,000.00)

Considerationreceivedbycash 594,917,350.00

Less Cashandcashequivalentsofsubsidiarydisposed (94,202.07)

Cashreceivedfromloseofcontrolnetofcashdisposed 594,823,147.93

30.4 Obtaining control of subsidiary

During theyearendedonDecember31,2012, theCompanypurchases“Wind Energy Development Co., Ltd.” from the other company. Theinformationonobtainingcontrolofsubsidiaryisasfollow:-

(Unit:Baht)

Cashandcashequivalent 31,092,853.53

Otherreceivable 4,590.28

Othercurrentassets 960,698.67

Advancepaymentforpurchasingland 30,000,000.00

Equipment 3,873,444.67

Powerpurchaseagreement 680,784,978.53

Otherpayables (1,000,863.00)

Othercurrentliabilities (1,416.97)

Non-controllinginterest (223,714,285.71)

Totalpurchaseprice 522,000,000.00

Less payablefrompurchaseofinvestmentofsubsidiary (272,500,000.00)

Less Cashandcashequivalentsofsubsidiaryacquired (31,092,853.53)

Cashpaidtoobtaincontrolnetofcashacquired 218,407,146.47


3�. Employee benefit

31.1 Provident fund

FortheyearendedonDecember31,2012,theGrouprecognizesastheemployee benefit expense for the payment of contribution into theprovidentfundattheamountofBaht1.24millionandBaht0.66millioninconsolidatedandseparatefinancialstatement,respectively.

31.2 Retirement employee benefit

For the year ended on December 31, 2012 and 2011, the Grouprecognizes the employee benefit expense in case of retirement orterminationunderthelaborlaw,asfollows:

(Unit:Baht)


2012 2011 2012 2011

Currentservicecost 787,224.00 769,215.00 459,094.00 433,349.00

Interestcost 245,201.00 260,600.98 171,483.00 195,822.00

Total 1,032,425.00 1,029,815.98 630,577.00 629,171.00

An itemof theemployeebenefitexpense incaseof retirementor terminationunder the labor law for theyearendedonDecember31,2012and2011areinclusivelypresentedinthelineitems,asfollows:

(Unit:Baht)


2012 2011 2012 2011

Costofsales 105,327.00 121,960.97 - -

Administrativeexpenses 607,649.00 668,472.00 356,903.00 428,517.00

Managementbenefitexpenses 319,449.00 239,383.01 273,674.00 200,654.00

Total 1,032,425.00 1,029,815.98 630,577.00 629,171.00


3�. Expenses by nature

Thefollowingexpenditureitemsofexpensehavebeenclassifiedbynature:

(Unit:Baht)


2012 2011 2012 2011

Changeinfinishedgoodsand

workinprocess (91,246,260.57) 9,625,517.39 (82,581,240.37) 7,759,823.59

Purchasedfinishedgoods 798,127,347.64 1,115,544,966.42 1,262,274,187.00 1,350,055,173.77

Costofconstructionservices 1,755,408,420.55 - 2,358,000,079.70 -

Rawmaterialandsuppliedused 307,624,035.53 181,891,893.05 - -

Managementbenefitexpenses 37,971,268.98 23,116,407.83 31,702,790.87 19,167,472.31

Employeebenefit 112,866,784.46 85,112,560.97 42,137,931.08 32,044,767.59

Depreciationandamortizationexpenses 47,993,344.81 32,618,579.99 4,761,159.21 3,904,349.04

Lossfordiminutionofinventories 25,458,942.53 5,758,719.86 17,822,327.23 (1,082,138.99)

Transportationexpense 7,092,728.59 7,815,331.19 6,623,385.08 7,747,256.19

Projectconsultantfee 99,067,184.60 25,458,884.02 49,969,990.22 2,976,937.00

Outsourcefee 68,921,880.42 17,557,498.10 - -


33. Segment Information

TheCompanyanditssubsidiariesoperatesthemainbusinesswithrespecttoproduction,distributionandimport-exportof

electronicapplianceandassemblyofmerchandisewhileclassifiedaccordingtosectorasdomesticsaleandinternationalsale.

ThedataclassifiedaccordingtosectoroftheGroupfortheyearendedonDecember31,2012and2011constitutesasfollows:-

(Unit:MillionBaht)

Co

nsoli

date

d

Fo

r the

yea

r end

ed o

n De

cem

ber 3

1,

Ma

nufac

turin

g an

d dis

tribu

tion

Gene

ratin

g an

d se

lling

of

elec

trica

l har

dwar

e ele

ctric

ity

Cons

truct

ion s

ervic

e El

imina

ted

Tota

l

20

12

2011

20

12

2011

20

12

2011

20

12

2011

20

12

2011

Netlocalsales

1,767.80

1,222.14

168.81

72.50

3,115.34

2,197.72(1,350.30)

(2,208.66)

3,701.65

1,283.70

Costoflocalsales

1,466.02

1,028.82

50.96

20.54

2,362.92

1,860.73(1,165.36)

(1,925.34)

2,714.54

984.75

Localsegmentoperations

301.78

193.32

117.85

51.96

752.42

336.99

(184.94)

(283.32)

987.11

298.95

Netexportsales

603.87

1,367.81

--

--

--

603.87

1,367.81

Costofexportsales

521.42

1,021.36

--

--

--

521.42

1,021.36

Exportsegmentoperations

82.45

346.45

--

--

--

82.45

346.45

Otherincome

458.36

17.18

Sellingexpenses

(36.77)

(79.98)

Administrativeexpenses

(303.21)

(248.33)

Managementbenefitexpense

(37.97)

(23.12)

Financecost

(103.77)

(57.16)

Shareoflossfrominvestm

entinassociates

(48.67)

(48.67)

Incometax

(227.92)

(164.47)

Netprofit

769.61

89.52

TheGroup’sfixedassets

2,763.90

3,243.47

TheGroup’sliabilities

4,813.70

4,356.18

Depreciationandamortization

47.99

32.62


3�. Financial instruments

TheprincipalfinancialrisksfacedbytheGroupareinterestraterisk,creditriskandforeigncurrency.TheGroupdidnotspeculate inorengage in tradingofanyderivativefinancialinstruments.

34.1 RisksfromInterestRates

Riskfrominterestratesisderivedfromfluctuationofmarketinterestrateinthefuturewhichaffectuponoperatingresultandcashflow.Riskfrominterestratesremainsduetobankdeposit,loanstorelatedparties,creditfacilitiesowing to thecommercialbankandrelatedparties. Due to thefactthatsuchfinancialassetsandliabilitiesconstituteinterestrateswhichare always closed to market interest rate; as a result, the Groupanticipatesofnonmaterialriskfrominterestrates.

Consolidated

Amount (Unit : Million Baht) Interest rate per annum (%)

2012 2011 2012 2011

Savingaccounts 256.97 231.29 0.0100-2.2500 0.5000-2.5000

Fixeddeposits 0.03 0.79 1.7500-2.0500 2.0000-2.2000

Billofexchange 182.00 - 0.5000-3.1250 3.0000-3.3500

Fixeddepositspledgedascollateral 605.17 493.10 0.7500-2.7500 0.8700-2.2500

Loanstorelatedparties 29.25 - 3.0000 -

Short-termloansfrombank 1,686.25 2,572.44 4.9350-7.1250 2.1750-3.9006

Long-termloansfrombank 1,485.86 982.41 4.9350-5.0600 4.3504-5.7563



Amount (Unit : Million Baht) Interest rate per annum (%)

2012 2011 2012 2011

Savingaccounts 176.43 185.83 0.0100-1.4000 0.7500-2.5000

Billofexchange 182.00 - 0.5000-3.1250 -

FixeddepositsandBillofexchange

pledgedascollateral 259.17 143.06 0.7500-2.2500 0.8700-2.2500

Loanstorelatedparties 29.25 176.15 5.7563-6.1130 5.9750-6.1813

Short-termloansfrombank 1,231.79 2,552.22 1.8500-7.0000 2.1750-6.1813

Short-termloansfromrelatedparties 29.15 - 3.0000 -

Interestrateswapcontracts

Duringtheyear2011,theGroup’shasenteredintointerestrateswapcontractsforloansfrombank.TheinterestratehasbeenconvertedfromTHB-THB-FIX-Reuters per annum to fixed rates of 5.70%per annumand repayment everythreemonthsstartingfromNovember1,2011toJuly2,2020.

Duringtheyear2012,thesubsidiaryenteredintointerestrateswapcontractforloansfrombank.TheinterestratehasbeenconvertedfromMLR+2.065%perannumtofixedrateof6%perannumandrepaymentevery1monthstartingfromNovember1,2012,December14,2012andJune15,2013toNovember1,2022.

Thenet fair valuesof interest rate swapcontractsat thebalancesheetdatewas:

(Unit:Baht)

Consolidated

2012 2011

Unfavourableinterestrateswapcontracts 22,119,389.73 11,640,423.41

Fair values of interest rate swap contracts have been calculated using theinformationfromthefinancialinstitutionsoftheGroupasifthecontractswereterminatedattheendofthereportingperiod.


34.2 Credit risk

TheGroupdoesnotexposetheriskfromcreditprovision inconnectiontotradereceivablemostfromthesaleofgoodswhosecapabilityisgoodat debt repayment. TheGroup has dealt with these clients for a longtimetherefore, it isanticipatedofnonriskderived fromnon-paymentofthosetradereceivable

34.3 Foreign currency risk

The Group constitutes material risk from exchange rates in overseacurrencieswhichhasbeencashatbank,tradereceivable,tradepayableandtrustreceiptthatareforeigncurrency.Themanagementhasmanagedrisk from exchange rates by performing the forward foreign currenciescontractdependentoneachcase.

AsatDecember31,2012and2011,thesignificantoutstandingbalancesof the Group’s financial assets and liabilities denominated in foreigncurrenciesareasfollow:

As at December 31, 2012

Consolidated Separated financial statement

Foreign currency Assets Liabilities Assets Liabilities

USD 3,768,589.71 12,934,948.86 3,768,589.71 3,169,627.66

EURO 1,199.94 4,561,291.64 1,124.65 4,533,892.64

YEN - 1,790,770.00 - 1,790,770.00

SGD 493,821.60 - 493,821.60 -

As at December 31, 2011

Consolidated Separated financial statement

Foreign currency Assets Liabilities Assets Liabilities

USD 9,237,115.76 53,600,781.30 9,237,115.76 52,526,166.38

EURO 5,683,028.44 2,268,417.31 5,680,153.44 2,268,417.31

YEN - 1,430,400.00 - 1,430,400.00

Forwardforeigncurrenciescontracts

As at December 31, 2012 and 2011, the Group has performed theforward foreign currencies contract which holds the contract life notexceedingoneyearasfollows:


Consolidated/Separated financial statement

2012 2011

Buying forward foreign exchange contracts BuyingforwardforeignexchangecontractsinUSDcurrency AmountUSD2.52millionataveragerateBaht30.8246perUSdollar 77,562,361.53 1,202,890,000.00(2011:AmountUSD38.00millionataveragerate Baht31.655perUSdollar)

BuyingforwardforeignexchangecontractsinEUROcurrency - 44,474,166.32(2011:AmountEURO1.08millionataveragerate Baht41.02perEURO)

Fair value of buying forward foreign exchange contracts USdollarcurrencies 77,105,166.13 1,204,987,600.00EUROcurrencies - 44,568,336.45

Buyingforeignexchangeoption

AsatDecember31,2012, theGrouphasperformed thebuying foreignexchangeoptioncontractinamountofUSD10.00millionwhichholdsthecontractlifenotexceedingoneyearisasfollows:


2012 2011 2012 2011

Buying foreign exchange option contracts Buyingforeignexchangeoptioncontracts inUSDcurrency 305,000,000.00 371,443,064.32 305,000,000.00 371,443,064.32

Fair value of buying foreign exchange option contracts Buyingforeignexchangeoptioncontracts inUSDcurrency 302,223,894.00 381,256,619.52 302,223,894.00 381,256,619.52 34.4 Fair value

The carrying amounts of the following financial assets and liabilitiesapproximate to their fair values : cash and cash equivalent, short-terminvestments,tradereceivableandpayable,otherreceivableandpayable,loanstoandloanfromrelatedpartiesandobligationunderfinancialleaseduetotheshortmaturityperiod.

The carrying amounts of long-term loans to and from related partiesapproximatefairvalueduetofloatinginterestrate.


3�. Promotional privileges

ASubsidiaryhasbeengrantedpromotionalprivilegesundertheInvestmentPromotionActB.E.2520(or1977)bytheBoard

ofInvestmentundercertainsignificantconditions.Significantprivilegesgrantedtothesubsidiaryaresummarizedbelow.

De

tails

1.PromotioncertificateNo.

1801(1)/25531537(1)/2554

1765(1)/2555

1766(1)/25552279(1)/2555

2382(1)/25552808(1)/2555

2809(1)/2555

2.Promotionalprivilegesfor

Electricity

Electricity

Electricity

Electricity

Electricity

Electricity

Windenergy

Windenergy

from

from

from

from

from

from

solarenergy

solarenergy

solarenergy

solarenergy

solarenergy

solarenergy

3.Significantprivilegesinclude:

Granted

Granted

Granted

Granted

Granted

Granted

Granted

Granted

3.1Exemptionofcorporateincometaxonnet

profitfor8years.Incaseswherethebusiness

incursalossduringthatperiodofexemption,

thelossincurredinsuchperiodcanbetaken

asadeductionfromnetprofitoftheyears

aftertheperiodofexemption,notexceeding

fiveyears.

3.2Exemptionofimportdutyonmachineryas

Granted

Granted

Granted

Granted

Granted

Granted

Granted

Granted

approvedbytheBoard.

3.3Exemptionofincometaxondividendspaid

Granted

Granted

Granted

Granted

Granted

Granted

Granted

Granted

fromtheprofitofthepromotedoperation

overtheabovecorporateincometax

exemptionperiod.

2��Gunkul Engineering Public Company Limited

De

tails

3.4Anallowanceoffiftypercentofthenormal

Granted

Granted

Granted

Granted

Granted

Granted

Granted

Granted

rateofcorporateincometaxonnetprofitfor

aperiodoffiveyearsaftertheexpirydate

ofthecorporateincometaxexemptionperiod

asdescribedin3.1)above.

3.5Permissiontodeductdoublethecostof

Granted

Granted

Granted

Granted

Granted

Granted

Granted

Granted

transportation,electricityandwatersupply

forcorporateincometaxpurposeforaperiod

oftenyearscommencingfromthedateof

earningoperatingincome.

3.6PermissiontodeductthecostofinstallationorGranted

Granted

Granted

Granted

Granted

Granted

Granted

Granted

constructionofpublicutilitiesattherateof

twenty-fivepercentinadditiontonormal

depreciationcharges.

3.7Havebeengrantedauthorizationforexportof

--

--

--

Granted

Granted

foreigncurrencies.

4.Dateoffirstearningoperatingincome

January4,

October1,

Notstarted

Notstarted

Notstarted

Notstarted

Notstarted

Notstarted

2011

2011

tousedyet

tousedyet

tousedyet

tousedyet

tousedyet

tousedyet

5.Dateofexpiredprivileges

January3,

September30,

Notstarted

Notstarted

Notstarted

Notstarted

Notstarted

Notstarted

2019

2019

tousedyet

tousedyet

tousedyet

tousedyet

tousedyet

tousedyet


3�. Obligation and contingent liabilities

36.1 AsatDecember31,2012,theGrouphascommitmentsrelatingtolettersofcreditwhichhasbeenwithdrawninamountofUSD3.53million.

36.2 AsatDecember31,2012,theGroupconstitutescontingent liabilityfromissuanceofguaranteeletterofthebankbyamountofBaht321.41million,amount of USD 0.17 million and amount of EURO 1.92 million in theconsolidatedfinancialstatementandBaht282.89million,amountofUSD0.17million and amount of EURO 1.80million in the separate financialstatements.

36.3 AsatDecember31,2012,theCompanyhasappointedonecompanyinUnion of Myanmar to be distribution representative of the Companymerchandise including marketing, sale promotion contact and providingvarious customers service within the Union of Myanmar. The contractconstitutes the period of two years and life can be automaticallyrenewable when it is matured. The Company constitutes obligationcommitment to repay such service fee in the rate of 5%-10% ofmerchandisesales.

36.4 As at December 31, 2012, the Company constitutes obligationcommitmentofpowerplantfromthesolarenergyagreementandserviceareasfollows:-

(Unit:Baht)

Consolidated Separated

financial statement financial statement

Totalvalueofconstructionagreements 4,574,267,887.44 6,024,294,740.44

Totalrevenuefromconstruction (4,498,730,787.65) (5,283,235,024.40)

Balance 75,537,099.79 741,059,716.04


Theobligationcommitmentofconstructionisasfollows:-

(Unit:Baht)

Consolidated Separated

financial statement financial statement

Totalvalueofconstructionagreements 3,666,482,974.66 4,747,660,574.46

Totalcostfromconstruction (3,558,578,521.49) (4,129,028,984.49)

Balance 107,904,453.17 618,631,589.97

36.5 As at December 31, 2012, one subsidiary entered into an advisorycontract related with credit carbon project with one company whereasthere is value according to contract being amount of Baht 5.55million.AsatDecember31,2012,theCompanyconstitutesoutstandingobligationaccordingtocontractbeingamountofBaht3.94million.

36.6 As at December 31, 2012, one subsidiary constitutes obligationcommitmentinmoldcontractagainstvariouscompanybyamountofBaht0.51million.

36.7 As at December 31, 2012, two subsidiaries entered into the PowerPurchase Agreement with Provincial Electricity Authority (“PEA”) are asfollow:-

Agreement date Power electricity size Sell electricity within Term

June28,2010 3.0Megawatts November30,2011 5yeas/renewautomatically5years

June28,2010 4.4Megawatts May31,2012 5yeas/renewautomatically5years

July16,2010 8.0Megawatts February3,2013 5yeas/renewautomatically5years



July16,2010 3.0Megawatts May31,2013 5yeas/renewautomatically5years

November23,2011 50.0Megawatts September1,2016 5yeas/renewautomatically5years

July10,2012 8.0Megawatts November1,2015 5yeas/renewautomatically5years

July10,2012 2.0Megawatts November1,2015 5yeas/renewautomatically5years


36.8 As at December 31, 2012, the Company and one subsidiary werecommitted the consultant fee to prepare environmental impact reportsand engineering feasibility studies. As at December 31, 2012, thesubsidiary had outstanding commitments being amount of Baht 11.46millionandamountofAUD0.006million

36.9 AsatDecember31,2012,theGrouphasenteredintoleaseandrelatedservice agreements with the third parties for the period 1 year. TheGroup is committed topay for the rental in amountofBaht 1,250.00 -920,100.00permonth.

36.10 As at December 31, 2012, the Company has constitutes obligationcommitment in topurchasegoodsand installment contractwith severalcompanies. As at December 31, 2012, the Company constitutesoutstandingobligationaccordingtocontractbeingamountofBaht26.92million.

36.11As at December 31, 2012, the Company has constitutes obligationcommitmentintoanadvisorycontractwiththeforeigncompany.WhereasthereisvalueaccordingtocontractbeingamountofUSD4.20million.AsatDecember31,2012,theCompanyconstitutesoutstandingobligationaccordingtocontractbeingamountofUSD3.30million.

36.12AsatDecember31,2012,onesubsidiaryhasobligationcommitment inhiringthecontractor to installsteelstructuretosupportsolar inamountofBaht12.96million.

36.13As at December 31, 2012, the Company has obligation commitment inhiringtheengineertodesignserviceandconstructionsolarpowerplantswithonecompanyinamountofBaht5.40million.

36.14As at December 31, 2012, one subsidiary company has constructionagreement’s obligation from a construction agreement entered intowithone company. As at December 31, 2012, the subsidiary company’soutstandingobligationremainsatBaht2.75million.

3�. Prosecuted Cases

In 2008, the Company constitutes prosecuted case in number of one casewhich is civil case of the Civil Court, black case number at 2933/2008, redcase number at 700/2009while theCompany is defendant in the subject of


purchasing selling, infringement, damaged fee claimant in capital amount ofBaht8,969,821.12ThePrimaryCourthasadjudicatedthatthedefendantrepaysamount of Baht 1,533,721.12 plus interest in the rate of 7.50% per annumcommencedfromtheprosecuteddateforwardsuntilitwillcompletelyrepaytotheplaintiffandtheCompanyrepayschargefeesinreplacementoftheplaintiff.TheCompany has requested for appeal to dismiss. For the time being, thecaseinunderhearingoftheAppealCourtandtheCompanyanticipatesthatitshouldwinthecasefinally.

3�. Events after the reporting period

OnFebruary25,2013,BoardofDirector’sMeetingNo.2/2013oftheCompanypassedthefollowingresolutions:

- The resolution to pay dividends to the Company’s shareholders from theoperationsfortheyear2012.Thedividendistobepaidasstockdividendinthenumberof220,000,000ordinaryshares,withparvalueofBaht1each,ataratioof2existingordinarysharestoreceivestockdividendof1share,withatotalamountofnotexceedBaht220.00million,orequivalenttothedividend of Baht 0.50 per share. In the case of any shareholder with afractionofthesharesafterthestockdividenddistribution,willbeentitledtoreceive cashdividend at the rate ofBaht 0.50per share. In addition theCompanywillpayacashdividendatBaht0.06pershare,orequivalenttoamountofnotexceedBaht26.40million.TotalannualdividendpaymentinformofcashandstockdividendequaltoBaht0.56pershare,equivalenttoBaht246.40million.

- The resolution to increase of theCompany’s registered share capital from220,000,000.00 ordinary shares to Baht 440,000,000.00 by issuing new660,000,000ordinaryshareswithaparvalueofBaht1each.Theobjectiveofthecapitalincreaseistoreservesharesforstockdividendpayment.

3�. Approval of financial statements

These consolidated and separated financial statements were authorized forissuebytheCompany’sboardofdirectorsonFebruary25,2013.


��. Other References

Regulator TheSecuritiesandExchangeCommission,Thailand 93/1GPFWitthayuBuilding,WirelessRoad, Lumpini,Patumwan,Bangkok10330,Thailand Tel. 0-2695-9999,0-2263-6499 Fax.0-2256-7711Regulator TheStockExchangeofThailand 62TheStockExchangeofThailandBuilding, RachadapisekRoad,Klongtoey,Bangkok10110,Thailand Tel. 0-2229-2000,0-2654-5656 Fax.0-2229-2030,0-2654-5649Share Registrar ThailandSecuritiesDepositoryCompanyLimited 62TheStockExchangeofThailandBuilding, RachadapisekRoad,Klongtoey,Bangkok10110,Thailand Tel. 0-2229-2800 Fax.0-2359-1259Auditor SPAuditCompanyLimited 503/2112thFloor,K.S.L.Tower,SriayudhyaRoad, Phyathai,Ratchathewi,Bangkok10400 Tel. 0-2642-6172-4 Fax.0-2642-6253Legal Advisor Weerawong,Chinnavat&PeangpanorCompany 540MercuryTower,22ndFloor,PloenchitRoad, Lumpini,Pathumwan,Bangkok10330 Tel. 0-2264-8000 Fax.0-2657-2222

Documents

GUNKUL : Annual Report 2012