Information Memorandum Eastern Polymer Group Public...
Transcript of Information Memorandum Eastern Polymer Group Public...
Disclaimer: The English translation of this document is prepared solely for reference for non-Thai shareholders of the Company. It should neither be relied
upon as the definitive nor the official document of the Company. The Thai version is the official document and shall prevail in all respects in the event of any
inconsistency with the English translation.
Information Memorandum
Eastern Polymer Group Public Company Limited (EPG)
Head Office 770 Theparak Road, Theparak sub-district, Mueang district, Samut
Prakan 10270
Tel: 02-383-6599
Fax: 02-383-6532
Website: www.epggroups.com
Production Plants IPP industrial estate, rayong Thailand and Tumbon Makhamkoo
Nikompattana Rayong, Thailand
Listing Date 24 December 2014 (First Trading Day: 24 December 2014)
Listing Securities Number of common shares 2,800,000,000 shares, Par value per share
of THB 1 Total value of THB 2,800 mm , the number of new shares
offered to the public is 700,000,000 shares or equivalent to 25.0% of
number of total paid-up shares after Initial Public Offering (IPO)
Capital As at 24 December 2014 (Trading commencement)
Registered capital, common shares of THB 2,800 mm
Paid-up capital, common shares of THB 2,800 mm
Secondary Market Stock Exchange of Thailand (SET)
Offering Price 5.80 THB per share
Offering Date 17 – 19 December 2014
Objectives and Plans for Utilizing the Capital Increase
Use of Proceed Amount*
(THB mm)
% Estimate
timing
Working Capital and Business Expansion 3,000 75.8 By FS 2015
Payment to loan from financial institution 960 24.2 By FS 2014
Note: *net off cost of IPO issuance
Green Shoe Option -None-
Types of Business and Nature of Operation
Types of Business and Service
Eastern Poly Group Public Company Limited (the “Company” or “EPG”) is holding company and mainly investing in
innovative polymer and plastic convertor company, which is consisting of (1) The insulator business (2) car
accessories business (3) plastic packaging business (4) other supporting business (5) research and development and
(6) joint venture (JV)
Eastern Polymer Group Public Company Limited‘s company structure (EPG)
All production businesses which the Company has invested (1) insulator business (2) car accessories business
and (3) plastic packaging business are unique and different from the competitors as well as owned amount of patents
and technology which has been developed by the Company itself,
1. Insulation Business
EPG is engaged in thermal insulation business through Aeroflex Co.Ltd (AFC), wholly owned by EPG. AFC has
developed a special type of insulator which made of Ethylene Propylene Diene Methylene (EPDM) and various
synthetic polymers. Presently, the Company has many products with patented and distributes them over 100
countries worldwide.
AFC’s superior technology provides several advantages over their competitors. AFC‘s insulation rubber can
withstand temperature range from -200 oC to 125
oC and strong humidity. Furthermore, it is eco-friendly. AFC’s
insulators are widely used in air-conditioning system and chilled water cooling system to be used to protect the
water condensation and sound protection
Presently, AFC is the world 3rd largest insulator manufacturers and distributors with approximately 10% of the
total market share. Aeroflex USA (AUS) and Aeroflex Polymer Technology (Shianghai) (APT) wholly owned by
Eastern Polymer Group Plc
Aeroflex
(AFC)
Aeroflex USA
(AUS)
APS
(APS)
Aerocell Construction Material (Jiangsu)
(ACM)
Aeroflex Europe
(AEU)
Eastern Polypack
(EPP)
Aeroklas
(ARK)
Aeroklas USA(ARK-USA)
Aeroklas Australia
(ARK-AU)
Aeroklas Shanghai
(ARK-SH)
EPG Innovation Center
(EIC)
Aeroflex Polymer
Technology (Shanghai)
(APT)
Zeon Advanced Polymix
(ZAP)
Tokai Eastern Rubber
(Thailand) (TER)
40.0%
100.0%
40.0%
40.0%
100.0%
100.0%
100.0%
20.0%
27.0%
100.0% 100.0% 100.0%100.0% 100.0%
ALP Aeroflex India
(AAI)
60.0%
Aeroklas Europe
(ARK-EU)74.9%
Insulator Business Car Accessories Business Joint VentureOther Supporting
BusinessPlastic Packaging
Business
Research and
Development
THB 600.0mm
THB 384.8mm
THB 3.0mm
THB 90.1mm
THB 180.0mm
THB 184.0mm
THB 1,200.0mm
THB 31.8mm
THB 30.0mm
THB 127.4mm
THB 21.4mm
THB 700.0mm THB 259.2mm THB 50.0mmTHB 152.5mm
THB 100.0mm
THB 2,100mm
AFC, are established to support the growing demand and to reduce transportation cost in both USA market and
China market. Normally AFC will export the compound mix (intermediate product) to Aeroflex USA (AUS) and
Aeroflex Polymer Technology (Shanghai) (APT) to continue the remaining production process and distribute
finished product directly to the customer. By doing this AFC can protect it recipes and chemical formula as
secrete.
There are additional plants in China, India, and Germany with 40% share owned by AFC through JV with the
local partners since AFC does not familiar with the market. AFC will send JVs only the compound mix in order
to protect chemical formula as the Company’s secrete.
Apart from the subsidiaries and associate companies, AFC also has presence in Switzerland and Russia in a
form of licensing. The Company provides Prefoam Tube and Sheet to local manufacturers to produce and
distribute the finished product directly to the customer
Despite the production capacity of EPDM being approximately 15,000 tons per year, Aeroflex also invested in
Aerocel construction material (Shiangshu) (ACM) in China, APL Aeroflex India (AAI) in India, and Aeroflex
Europe (AEU) in German to produce an economical type of insulator made from Nitrile Butadiene Rubber
(NBR). The production capacity for NBR is approximately 14,000 tons per year.
Apart from insulators, AFC additionally provide related products such as tape, rigid foam, and flexible duct etc.
Patents
As of 30 September 2014, AFC owns a total of 7 patents in thermal insulation business
Production capacity
The table below displays the production capacity from 2012 through 2015
Units
FY2012
(Apr 2011 –
Mar 2012)
FY2013
(Apr 2012 –
Mar 2013)
FY2014
(Apr 2013 –
Mar 2014)
1H2015
(Apr 2014 –
Sept 2014)
Mixture Production
Maximum capacity (ton) 10,000 10,000 15,000
15,000
Actual production (ton) 7,500 8,000 8,700 4,300
Efficiency (%) 75% 80% 58% 57%
Prefoam Tube and Sheet Production
Maximum capacity /1
(ton)
1,200 1,200 1,200 1,200
Actual production (ton) 395 300 320 175
Efficiency (%) 33% 25% 27% 29%
Finished Goods Production
Maximum capacity (ton) 8,000 10,000 12,000 12,000
Actual production (ton) 5,200 6,000 6,500 3,536
Efficiency (%) 65% 60% 54% 59%
Note: 1/ Classified as for sale 1,200 tons and to produce finished product 10,800 tons
2. Car Accessories Business
EPG is engaged in auto parts business through Aeroklas Co.Ltd (ARK), wholly owned by EPG. ARK
manufactures and distributes extensions for trucks such as Bed Liner, Deck Cover, Canopy, and Side Step. The
extensions are applicable to Single Cab, Space Cab, and Double Cap and can be assembled on every leading
brand of trucks (Ford, Toyota, Mazda, Isuzu, Nissan, Mitsubishi, Honda, etc.)
ARK is one of a few Thai manufacturers which do not operate solely as OEM (Original Equipment
Manufacturer). The company additionally operates as ODM (Original Design Manufacturer) and REM
(Replacement Equipment Manufacture), giving several benefits to the company.
ARK is one of the world’s largest manufacturers of Bed Liner with advanced technology allows convenient
installation; the Bed Liner can be installed without drilling into the car body. ARK has two manufacturing sites in
Thailand and China with the production capacity being more than 800,000 pieces per year.
The company patented the Twin Sheet ABS technology and implements it in producing Deck Cover and
Canopy. This technology enhances the durability of the products making them superior to competitors. The
production capacity for Deck Cover and Canopy are 24,000 per year and 20,000 set per year respectively.
ARK invented Side Step for SUV cars using Plastic Composite supplied by one of the largest local car
manufacturers. Using plastic instead of metal would reduce the overall weight of the car and thus more safe.
Patent/Petty Patent
As of 30 September 2014, ARK possesses 19 patents for 20 years and addition of 125 petty patents for 10
years regarding auto parts business.
Production Capacity and Efficiency
ARK has 2 main manufacturing sites located in Rayong, Thailand and Shanghai, China. Several subsidiaries
located in USA and Australia act as distributors to nearby countries. The following table display ARK’s
production capacity
Products Current
production
capacity
FY2012
(Apr 2011 –
Mar 2012)
FY2013
(Apr 2012 –
Mar 2013)
FY2014
(Apr 2013 –
Mar 2014)
1H2015
(Apr 2014 –
Sept 2014)
Bed Liner 800,000
units/year 62.9% 75.9% 59.6% 57.0%
Products Current
production
capacity
FY2012
(Apr 2011 –
Mar 2012)
FY2013
(Apr 2012 –
Mar 2013)
FY2014
(Apr 2013 –
Mar 2014)
1H2015
(Apr 2014 –
Sept 2014)
Canopy 24,000
units/year 77.0% 66.5% 51.1% 62.0%
Deck Cover 24,000
units/year 71.2% 76.1% 57.6% 63.0%
Side Step1 100,000
pairs/year
- - - -
Note: 1 Side Step production commences 3Q15
3. Plastic Packaging Business
EPG has engaged packaging business through Eastern Polypack Company Ltd. (EPP), wholly owned by EPG.
EPP is one of the largest manufacturers in Southeast Asia. The products possess higher quality and more
sophisticated design compared to general containers. EPP produces from all kinds of plastic, including (PP)
Polystyrene (PS) Polyethylene Terephthalate (PET) and Polylactic Acid (PLA)
EPP is the expertise in manufactures and design plastic cup with unique design and handy shape under its own
brand “EPP”. In addition, EPP plastic cup are made from high quality plastic enhancing durability and
convenient to use. Presently, EPP’s product is widely used and is recognized by well-known restaurant food
chain such as EPP is one of a few South East Asia suppliers for the world’s best franchise like Mcdonald.
Apart from plastic cup, EPP is popular for its microwavable plastic food packaging. The products are widely
used in convenience stores for ready-made food. A special kind of plastic that can withstand microwave and can
respond to today’s fast-paced and demanding environment.
Other notable products from EPP includes instant-noodle cup, design to optimize shelf life, fruit juice packaging,
yogurt containers, and etc. EPP’s products are eco-friendly and are made to be recycled. Today, the production
capacity for plastic container and plastic sheets are approximately 24,000 tons per year and 5,000 tons per year
respectively.
Patent
As of 30 September 2014, EPP possess 34 patents and in addition of 50 more patents pending.
Production Capacity
There is only 1 manufacturing site located in Rayong, Thailand. The maximum capacity of plastic container is
approximately 24,000 tons per year. The following table displays the production capacity.
Products unit
FY2012
(Apr 2011 –
Mar 2012)
FY2013
(Apr 2012 –
Mar 2013)
FY2014
(Apr 2013 –
Mar 2014)
1H2015
(Apr 2014 –
Sept 2014)
Plastic container
Production capacity Tons/year 14,000.0 15,000.0 20,000.0 24,000.0
Actual production Tons/year 10,000.0 10,800.0 12,300.0 12,100.0
Efficiency % 77.0% 72.0% 61.5% 50.41/1
Sheet plastic
Production capacity Tons/year none 5,000.0 5,000.0 5,000.0
Actual production Tons/year none 2,750.0 3,000.0 2,500.0
Efficiency % none 55.0% 60.0% 50.02%/2
Note: 1/ calculated from 1H2015 (Apr – Sept 2014) at 12,000 tons
2/ calculated from 1H2015 (Apr – Sept 2014) at 2,500 tons
During 2012 2013 2014 and 1H2015, EPP has continuously improved the production capacity to respond to the
growing demand.
4. Other Supporting Business
EPG has set up the supporting business operated by Aeroflex Polymer Technology (Shanghai) to serve and
support 3 production businesses of the group such as saucing product for trading business like paper cup,
plastic spoon and fork and partly support AFC to manufacture insulation as well
5. Research and Development
To have continuously competitive advantage above the competitors by continuously developed and research
new product to serve demand from customer, EPG has established Eastern Polymer Innovation Center (“EIC”).
EIC is one of the modernist polymer develop and research center in Thailand and also is certified by various
well-known international standards organization that develops and publishes voluntary consensus technical
standards for a wide range of materials, products, systems, and services such as ASTM, DIN, ISO, JIS, and EN
etc. Currently, EIC has capability to test and experiment more than 300
flammability test, freezing point test, and wind duration test under control of more than 14 material
2 polymer expertise
6. Joint Venture
(6.1) Manufacturer & distributor
Rubber (Thailand))
Apart from 5 main businesses, EPG Eastern Polymer Group has joined with
world largest anti-vibration manufacturer and distributor, to establish anti
Thailand under joint venture company “Tokai Eastern Rubber (Thailand)
voting right and a 20% profit sharing of TER net profit.
As of now EPG hold a 30% TER stakeholder (Excluding Prefers stock) but has the voting right and profit
sharing of 20% since Tokai Rubber Industry (TRI) own 25,000
sharing 30 times of common stock.
Tokai Eastern Rubber (Thailand) (TER) is the manufacturer and distributor of anti
automotive industry. Today TER distributes its products to well
has production base in Thailand as well as export some to Tokai Rubber Industry (TRI)
largest anti-vibration manufacturer in South East Asian with production capacity of 120 million tons per year.
Currently, TER has partnered with TRI to establish production base in India.
(6.2) Manufacturer & distributor rubber compound (Investing through Zeon Advance Polymix)
EPG Eastern Polymer Group has joined with
group” to establish rubber compound production base in Thailand under Zeon Advance Polymix (ZAP) with a
27% of stakeholder.
EIC has capability to test and experiment more than 300 cases such as corrosion test,
flammability test, freezing point test, and wind duration test under control of more than 14 material
anti-vibration and hose in automotive industry (Investing through Tokkai Eastern
main businesses, EPG Eastern Polymer Group has joined with Tokai Rubber Industry (TRI), the
vibration manufacturer and distributor, to establish anti-vibration and hose
Thailand under joint venture company “Tokai Eastern Rubber (Thailand)” (TER). Currently EPG has
ing right and a 20% profit sharing of TER net profit.
As of now EPG hold a 30% TER stakeholder (Excluding Prefers stock) but has the voting right and profit
sharing of 20% since Tokai Rubber Industry (TRI) own 25,000 of prefers stock, in which voting righ
sharing 30 times of common stock.
Tokai Eastern Rubber (Thailand) (TER) is the manufacturer and distributor of anti-vibration and sea horse for
automotive industry. Today TER distributes its products to well-known automotive manufacturer compa
has production base in Thailand as well as export some to Tokai Rubber Industry (TRI)
vibration manufacturer in South East Asian with production capacity of 120 million tons per year.
with TRI to establish production base in India.
Manufacturer & distributor rubber compound (Investing through Zeon Advance Polymix)
EPG Eastern Polymer Group has joined with Japanese company “Zeon Corporation Group” and “Toyota Tsusho
establish rubber compound production base in Thailand under Zeon Advance Polymix (ZAP) with a
cases such as corrosion test,
flammability test, freezing point test, and wind duration test under control of more than 14 material expertise and
in automotive industry (Investing through Tokkai Eastern
Tokai Rubber Industry (TRI), the
hose production base in
(TER). Currently EPG has both 20%
As of now EPG hold a 30% TER stakeholder (Excluding Prefers stock) but has the voting right and profit
of prefers stock, in which voting right and profit
vibration and sea horse for
known automotive manufacturer company which
has production base in Thailand as well as export some to Tokai Rubber Industry (TRI) in Japan. TER is the
vibration manufacturer in South East Asian with production capacity of 120 million tons per year.
Manufacturer & distributor rubber compound (Investing through Zeon Advance Polymix)
Group” and “Toyota Tsusho
establish rubber compound production base in Thailand under Zeon Advance Polymix (ZAP) with a
ZAP is a synthetic rubber compound and natural rubber compound manufacturer and distributor. ZAP’s product
is widely used in various industries for both domestic and oversea countries. More than 70% of ZAP’s rubber
compound is used in automotive industry for producing anti-vibration and window and door seal rubber.
Currently ZAP is the one of the largest rubber compound producer in Thailand with production capacity of
47,000 tons per year
Revenue Structure
Revenue structure of the company for fiscal year (FY) 2012-2014 and 1H2015 (April 2014-Setptember 2014) is
illustrated in the table below
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
THB mm % THB mm % THB mm % THB mm %
Aeroflex 1,946.4 34.6 2,043.9 30.3 2,133.6 32.4 1,156.7 33.4
Aeroklas 1,961.8 34.9 2,590.2 38.4 2,281.5 34.6 1,214.9 35.1
Eastern Polypack 1,719.6 30.6 2,116.1 31.3 2,176.7 33.0 1,093.7 31.6
Total 5,627.8 100.0 6,750.2 100.0 6,591.8 100.0 3,465.4 100.0
Major source of EPG’s revenue comes from 3 production businesses (1) Insulation business “Aeroflex” (AFC) (2) Car
Accessories business “Aeroklas” (ARK) and (3) Plastic Packaging Business “Eastern Polypack” (EPP). In FY 2014
insulation business, car accessories business and plastic packaging business contributes 32.4%, 34.6% and 33.0% of
total revenue respectively.
Apart from classification revenue structure of EPG by operating business, the table below displays revenue structure
of the company in FY 2012-2014 and 1H2015 classifies by SET sector.
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
THB
mm %
THB
mm %
THB
mm %
THB
mm %
Construction Material
- Insulation Business (Operating
by AFC)
1,946.4 34.6 2,043.9 30.3 2,133.6 32.48 1,156.7 33.4
- Related business (Operating
by ARK)
87.0 1.5 117.0 1.7 98.0 1.5 27.5 0.8
Insulation Business and related
business 2,033.4 36.1 2,160.9 32.0 2,231.6 33.9 1,184.3 34.2
Automotive
Car Accessories Business
(Operating by ARK)
1,874.8 33.3 2,473.2 36.6 2,183.5 33.1 1,187.4 34.3
Packaging
Plastic packaging Business
(Operating by ARK)
1,719.6 30.6 2,116.1 31.3 2,176.7 33.0 1,093.7 31.6
Total Revenue 5,627.8 100.0 6,750.2 100.0 6,591.8 100.0 3,465.4 100.0
In FY 2014 the company had revenue contribution from construction material business and related business the most
at 33.4%, following by automotive business and packaging business at 33.1% and 33.0% respectively
In addition, the company also has profit sharing from Joint Venture Company, which is summarized in the table below
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
THB mm THB mm THB mm THB mm
Tokai Eastern Industry (Thailand)
(TER) 198.9 308.9 230.9 74.1
Zeon Advance Polymix (ZAP) 8.6 24.6 60.1 23.2
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
THB mm THB mm THB mm THB mm
AFC’s joint ventures company 3.5 3.7 14.7 2.3
Total Profit Sharing 211.0 337.2 305.7 99.6
During FY 2012-2014 and 1H2015, the Company had consistency profit sharing from TER and ZAP equal to THB
211.0 mm - THB 337.2 mm and THB 99.6 mm respectively or over 30% of net profit from TER and over 20% of net
profit from ZAP. However there are only a few of profit sharing from AFC’s joint ventures company since they need
cash to fund their expansion plan in oversea countries.
Gross Profit Structure
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
THB mm % THB mm % THB mm % THB
mm %
Insulation Business 686.1 43.5 580.0 31.8 771.3 44.8 422.7 47.6
Car Accessories Business 570.8 36.2 715.1 39.2 497.0 28.9 265.6 29.9
Plastic Packaging Business 322.0 20.4 531.2 29.1 453.3 26.3 199.2 22.4
Total Gross Profit 1,579.0 100.0 1,826.4 100.0 1,721.6 100.0 887.6 100.0
FY in 2012, 2013, 2014, and 1H2015, the company had gross profit of THB 1,579.0 mmm, THB 1,826.4 mm THB
1,721.6 mm and THB 887.6 mm respectively. The Company has gross profit contribution from insulation business the
most which is equal to 43.5%, 31.8%, 44.8% and 47.6% in 2012, 2013, 2014, and 1H2015. However, only in FY
2013 car accessories business contributed the largest gross profit to the Company at 39.2% of total gross profit
because of the first car policy. For gross profit contribution from plastic packaging business in 2012, 2013, 2014, and
1H2015 equal to 20.4%, 29.1%, 26.3% and 22.4% respectively
Target Customer Groups
1. Thermal insulator business ( Aeroflex Co Ltd. and other subsidiaries)
Clients in insulator business are classified into three groups (1) wholesalers, (2) contractors, and (3) international
clients.
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
% % % %
Domestic
- wholesalers 24.6 18.3 17.6 16.9
- contractors 14.1 15.9 13.1 12.2
Total domestic 38.7 34.2 30.7 29.1
International
-international clients 61.3 65.8 69.3 70.9
Total 100.0 100.0 100.0 100.0
Wholesalers
AFC’s revenue mainly derives from wholesalers. Between 2012 to 1H2015, AFC has recognized revenue from
wholesale group approximately 16.9%-24.6%. Normally AFC will distribute its product through selling agents in
each region to the end users, which most of selling agents are in air-conditioning business. Currently there are
over 100 local wholesalers.
Contractors
Between 2012 to 1H2015, contractors have shared more than 12.2%-15.9% of AFC total revenue. Most of
AFC’s clients are prominent contractors in Thailand, namely, Italiain-thai Development Plc.,
CH-Karnchang Plc., Sino-Thai Engineering & Construction Public Company Limited, Power Line Engineering
Public Company Limited, EMC Public Company Limited, Jardine Schindler (Thailand) and Taikisha (Thailand)
International Clients
There are more than 78 selling agents across 100 countries around the world representing AFC. The Company
does not allow agents to compete among themselves to avoid price competition among each agent. AFC
supports its agents in various ways including marketing and technology. Nowadays revenue from international
clients takes up 61.3%-70.9% of total revenue.
Moreover to better serve demand of the customer, AFC had considered the alternative to run the business
through selling the production license to some agents, which currently there are two production bases in form of
licensing in both Russia and Switzerland.
2. Auto-parts business
Clients in auto parts business are classified into four groups (1) Automotive Original Design Manufacturer (ODM),
(2) Automotive Original Equipment Manufacturer (OEM), (3) Replacement Equipment Manufacturer (REM), and
(4) international clients
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
% % % %
Domestic
ODM 26.3 33.1 32.1 24.7
OEM 0.5 0.7 0.6 0.5
REM 32.8 25.4 22.1 21.1
International clients
Export and international
clients
40.4 40.8 45.2 53.7
Total 100.0 100.0 100.0 100.0
ODM (Original Design Manufacturer)
In ODM, ARK designs and produces auto parts under clients’ brands. Ford, Toyota, Isuzu, Mazda, Mitsubishi, and
Volkswagen are ARK major clients.
Revenue recognition relies on the life cycle of each car model, 5-7 years, creating stable income. Minimum risk is
involved in ODM since ARK has the rights over the design, making the company a sole producer of each specific part.
Between 2012 to 1H2015, 24.7%-33.1% of total revenue is ODM.
OEM (Original Equipment Manufacturer)
There are numbers of OEMs in Thailand, creating intense competition in the market. Clients commonly have contracts
with more than one OEM at a time to diversify their risk. Thus, the profit margin from this type of customer group is
minimal. However ARK‘s revenue from OEM is quite small, in between 2012 to 1H2015, OEM occupied only 0.5%-0.7%
of total revenue.
REM (Replacement Equipment Manufacturer)
In REM, ARK designs and produces under its own brand. The company distributes their products to retailers, car
showrooms and auto parts which currently there are over 300 local retailers and 100 international retailers cooperating
with ARK. One of the advantages of REM is about creating brand awareness. Clients who purchase products from
retailers can later place orders directly on ARK. Between 2012 to 1H2015, 21.1%-32.8% of total revenue is REM.
International Clients
ARK exports their products to international agents. Having significant portion of international revenue, 40.4%-53.75% of
total revenue, diversifies domestic risks.
3. Packaging business
During 2012 to 1H2015, Eastern Polypack’s (EPP) clients can be classified into three groups: (1) wholesalers, (2)
Made-to-order clients, and (3) international clients.
FY2012
(Apr 2011 – Mar
2012)
FY2013
(Apr 2012 – Mar
2013)
FY2014
(Apr 2013 – Mar
2014)
1H2015
(Apr 2014 – Sept
2014)
% % % %
Domestic
Wholesalers 54.9 53.9 54.5 53.9
Made-to-order (ODM) 31.3 32.6 32.5 31.2
International
Exports 13.8 13.5 13.0 14.9
Total 100.0 100.0 100.0 100.0
Wholesalers
EPP merchandise their products to over 200 wholesalers across Thailand, which then distribute to local retails
such as coffee shops, bakery, restaurants, and etc. Between 2012 to 1H 2015, 53.9%-54.9% of total revenue is
from wholesalers. Moreover, EPP places their products in modern trade entity such as Makro.
Industrial clients
World’s leading f&b companies, namely, Mcdonald, KFC, Coca-Cola, Pepsi and Thai leading’s brand such as
YumYum, MaMa, S&P, Mk, and other prominent companies, all purchases packaging goods from EPP.
Between 2012 to 1H2015, Industrial clients occupied more than 31.2% - 32.6% of total revenue.
International clients
EPP’s major international client is one of the largest coffee franchises in Korea. Up to 13.0%-14.9% of total
revenue is from international clients
Distribution Channels
1. Insulation Business (Operates by Aeroflex Company Limited and its associates and subsidiaries)
The distribution channels for insulation business can be divided into 2 principal categories including 1)
Domestic customers and 2.) International customers
FY2012
(Apr 11 – Mar
12)
FY2013
(Apr 12 – Mar
13)
FY2014
(Apr 13 – Mar
14)
1st Half FY2015
(Apr 14 – Sep
14)
% % % %
Domestic 38.7 34.2 30.7 29.1
International 61.3 65.8 69.3 70.9
Total 100.0 100.0 100.0 100.0
2. Car Accessories Business (Operates by Aeroklas Company Limited and its subsidiaries)
The distribution channels for car accessories business can be divided into 2 principal categories
including 1) Domestic customers and 2.) International customers
FY2012
(Apr 11 – Mar
12)
FY2013
(Apr 12 – Mar
13)
FY2014
(Apr 13 – Mar
14)
1st Half FY2015
(Apr 14 – Sep
14)
% % % %
Domestic 59.6 59.2 54.8 46.3
Exports and International 40.4 40.8 45.2 53.7
Total 100.0 100.0 100.0 100.0
3. Plastic Packaging Business (Operates by Eastern Polypack Company Limited)
The distribution channels for plastic packaging business can be divided into 2 principal categories
including 1) Domestic customers and 2.) International customers
FY2012
(Apr 11 – Mar
12)
FY2013
(Apr 12 – Mar
13)
FY2014
(Apr 13 – Mar
14)
1st Half FY2015
(Apr 14 – Sep
14)
% % % %
Domestic 86.2 86.5 87 85.1
International 13.8 13.5 13.0 14.9
Total 100.0 100.0 100.0 100.0
Sources of Supply
1. Insulation Business (Operates by Aeroflex Company Limited and its associates and subsidiaries)
Compound
Compound used in production of Aeroflex’s insulator composes of various types of chemical, which
mainly consist of EPDM or Ethylene Propylene Diene Methylene as a main component for over 30 to 32
percent. The EPDM is produced from Aeroflex’s own mixing formula which mostly composes of
synthetic rubber, additives, fire retardant chemicals, and other chemicals. As for the procurement of
such substances, Aeroflex purchase from various suppliers for example Mitsui Chemical and Albaman.
In FY2012 – FY2014, Aeroflex did not purchase from any single supplier more than 30 percent of total
cost of compound.
Other than the above mentioned compound, the production of Aeroflex’s insulator also needs other
essential compound, for example, blowing agent. For procurement of blowing agent, Aeroflex will
purchase in the amount that is enough for production of no longer than 3 months. However, if the
blowing agent price increases, Aeroflex may consider using other compound or other supplier instead.
In this regards, material or supplier switching will not affect the essential properties of the insulator.
As for procurement of raw materials during FY2012 – FY2014, Aeroflex purchased raw material from
overseas suppliers and local suppliers for 60 – 70 percent and 30 – 40 percent, respectively, exposing
Aeroflex to exchange rate risk. However, as the Company has proportion of raw material sourcing
related expenses in foreign currency that is in line with revenues in foreign currency, thus the
Company’s exposure to exchange rate risk is not as much.
Other products used in conjunction with insulators or in installation of insulators
As Aeroflex does not have policy to produce products in this category itself, therefore in order to provide
high quality products for consumers, Aeroflex purchases or orders from other manufacturers who have
expertise in this kind of products. In this regards, Aeroflex will set the standard and quality of the
products. In each purchase, Aeroflex has policy to order the stock for sales period of 1 – 2 months.
2. Car Accessories Business (Operates by Aeroklas Company Limited and its subsidiaries)
Plastic resin pellets
Being the main raw materials in production of Aeroklas’s products, Aeroklas uses various types of
plastic resin pellets including HDPE, ABS, PC, PC/ABS and DCPD in manufacturing of its products.
During FY 2012 – FY 2014 and 1st half of FY 2015 (Apr. – Sep 2014), Aeroklas incurred cost of plastic
resin pallets and additives at 41 – 44 percent of production cost. Therefore, in order to effectively
manage the cost, Aeroklas explores and surveys the raw material price from worldwide before every
purchase. As a result, at present, Aeroklas orders plastic resin pellets from overseas and local
suppliers by considering from quality, price and delivery. In this regards, the raw materials for
manufacturing of bed liner may be sourced from suppliers in Asian countries when pricing is
competitive. At the same time, Aeroklas purchases from many local suppliers, for example, PTT Global
Chemical Plc., IRPC Plc., Siam Cement Group Plc., Bayer Co.,Ltd., and some other importers of plastic
resin pellets.
However, as plastic resin pellet is derived from oil refinery, thus its production cost is based on global
crude oil price. Therefore, if the global crude oil price increases, Aeroklas will be inevitably affected.
Furthermore, as there is no financial instrument in Thailand that can protect risk from volatility of plastic
resin price presently, thus Aeroklas exposes to this risk inevitably. Nevertheless, although Aeroklas
cannot control all of the production cost, Aeroklas can manage the risk by price adjustment or passing-
through the raw material cost to its customers.
Other components
Aeroklas purchases other components, for example, hook, polymer-alloy, mirror, choke and other
installation sets to be uses as components in its products. During FY 2012 – FY 2014 and 1st half of
FY 2015 (Apr. – Sep 2014), Aeroklas incurred cost of purchasing other components at 13.0 – 15.0
percent of production cost. In this regards, Aeroklas will purchase other components from
manufacturers or suppliers who have expertise and are able to deliver products at price and quality that
Aeroklas requires.
Nevertheless, there may be some components that Aeroklas purchases from single supplier during
some period because this particular supplier offers better business deal than others. However, Aeroklas
does not rely on this particular supplier. If the supplier breaches the agreement, Aeroklas is able to
source raw materials or products from other suppliers in a timely manner.
3. Plastic Packaging Business (Operates by Eastern Polypack Company Limited)
Plastic resin pellets
Being the main raw materials in production of Eastern Polypack’s products, various types of plastic resin
pellets are used in manufacturing of its products, both plastic packaging and plastic sheet. During FY
2012 – FY 2014 and 1st half of FY 2015 (Apr. – Sep 2014), Eastern Polypack incurred cost of plastic
resin pellets at approximately 55 – 62 percent of production cost. Plastic resin pellets that Eastern
Polypack uses in production mostly are PP, PS, PET and ABS. As for procurement of plastic resin
pellets, Eastern Polypack will consider the purchase itself from both overseas and local suppliers,
depending on price, quality and suitability of each type of plastic resin. During FY 2012 – FY 2014,
Eastern Polypack mainly purchased plastic resin pellets from domestic, in which Eastern Polypack did
not purchase from any single supplier more than 30 percent of its total cost of raw materials. In order
to have bargaining power, Eastern Polypack will decide on quantity of plastic resin pellets in each
purchase by considering customers’ orders and forecasted amount of products to be sold in the future.
Since plastic resin pallet price fluctuates with crude oil price, Eastern Polypack has exposure to risk of
price volatility of its main raw material. In this regards, Eastern Polypack has policy to hedge the risk
from plastic resin pellet price fluctuation. As for industrial customers, the contract will have clause that
allows Eastern Polypack to adjust the selling price when raw material cost increases more than 10
percent. In addition, the purchase of plastic resin pellets in bulk will result in better price or lower price
than market price in general. As for pricing of products for distribution through various channels of
Eastern Polypack itself, price adjustment is more difficult because Eastern Polypack needs to consider
market mechanism and competitors before adjusting the price each time. Therefore, Eastern Polypack
has set policy to consider sourcing or using other raw material that has lower price as a substitution
when the price of original raw material increases. In this regards, the switching of raw material will not
affect the essential properties of the product. Nevertheless, as Eastern Polypack does not have policy
in purchasing large quantity of raw materials to be kept as inventory, therefore the exposure to the risk
of raw material price fluctuation is not significant. In this regards, Eastern Polypack has policy to keep
raw materials in inventory not more than 45 days.
Other products
Eastern Polypack purchases paper cups and other related products such as straws and other plastic
cutlery for selling to its customers. In this regards, Eastern Polypack purchases good quality paper
cups from APT, a company under EPG located in China. As for other products, Eastern Polypack will
purchase from manufacturers or suppliers who have expertise in that particular product and are able to
deliver quality products at suitable price. In this regards, because these products are just a
complementary product to the main products of Eastern Polypack, therefore there is no policy to
establish its own manufacturing plant for these products. During FY 2012 – FY 2014, Eastern Polypack
did not purchase from any single supplier more than 30 percent of its total cost of purchase of other
products, therefore Eastern Polypack does not have risk of having too much dependency on any single
vendor of other products. In addition, in each purchase, Eastern Polypack has policy to order in a
quantity that is enough for selling in period of not more than 60 days only, in order to maintain financial
liquidity and prevent inventory shortage.
Competition
1. Insulation Business (Operates by Aeroflex Company Limited and its associates and subsidiaries),
the Group’s Core Business
At present, there are 3 key operators in “Elastometric Thermal Insulation” industry including 1) Armacell
2) K-Flex and 3) Aeroflex. In this regards, Aeroflex is considered to be only major EPDM insulator
operator in the world who can manufacture and sell EPDM insulator that can compete in the global
market. Nevertheless, market share of Aeroflex in the world market is still relatively low at
approximately 10 percent because NBR insulators which are produced by major players, such as
Armacell and K-Flex, are widely known in Europe and America. In addition, the market expansion of
insulators which are bulky and require space in transportation, resulting in relatively high logistic cost, an
obstacle in distribution of products of this type. As a result, expansion of manufacturing base is very
essential for market expansion in this business.
Although prefoam tube and sheet technology of Aeroflex can mitigate the above mentioned problem, the
market expansion of Aeroflex’s products still require both marketing strategy and manufacturing base
expansion to be key drivers in increasing Aeroflex’s share in the world market. In this regards, at
present, Aeroflex has invested in research and development in order to bring compound mixtures and
prefoam tube and sheet into production in other countries worldwide in the future.
Armacell K-Flex Aeroflex (AFC)
Number of
Manufacturing Sites 17 9 6 + 2 Licensing
Manufacturing Site’s
Location
- Asia Australia, China (2 sites),
India, Saudi Arabia, South
China, India, Malaysia and
United Arab Emirates
China (2 sites), India and
Thailand
Armacell K-Flex Aeroflex (AFC)
Korea and Thailand
- North America USA (2 sites) - อเมรกิา
- South America Brasil
- -
- Europe Belgium, England,
Germany, Italy, Poland,
Spain and Switzerland
Italy, Poland, Russia and
Turkey
Germany, Russia and
Switzerland
Estimated Capacity
(Tons/Year)
80,000** 40,000
** 29,000
*
2013 Estimated Market
Share (%)
40.0 15.0 10.0***
Source: Strategy Department of the Company and Websites of Other Operators
Remark: * Combined capacity of subsidiaries and associates
** Estimated capacity from total sales
*** Total market share including market share of associates
Presently, Armacell has the highest number of manufacturing sites of 17 manufacturing sites in India,
China, Germany, Switzerland, USA, South Korea, Thailand, Saudi Arabia, Poland, England, Australia,
Belgium, Brazil, Italy and Spain. As a result, Armacell has the highest world market share at 40
percent. K-Flex, who has the second highest world market share at 15 percent, has in total 9
manufacturing bases in Italy, China, India, Malaysia, Turkey, Poland, Russia and United Arab Emirates.
However, market share of these two companies is projected to decrease because both companies
produce NBR insulators, therefore there is relatively great price competition especially in markets that
are highly sensitive to price such as China and India.
As for Aeroflex, its market share has steadily increased as a result of unique product quality and
continuing expansion of manufacturing base. In this regards, the market share of Aeroflex increased
from 8 percent in 2007 to 10 percent in 2013. Furthermore, due to high quality of Aeroflex’s product,
many of the world leading buildings such as Fukushima Daiichi Nuclear Power Plant, Burj Khalifa, and
Suvarnabhumi Airport selected Aeroflex’s insulator. In addition, the trend of focusing more in health
wellbeing and safety in fire accident has positively affected Aeroflex’s product, which is well qualified in
the mentioned field, has tendency to have higher market share.
2. Car Accessories Business (Operates by Aeroklas Company Limited and its subsidiaries)
The automotive industry structure consists of various types of operator which can be divided into 4
categories including (1) automotive manufacturer (2) automotive parts manufacturer (3) automotive
accessories manufacturer and (4) distributor, in which all operators are driven by car demand.
By considering the structure of the automotive industry as mentioned above, Aeroklas is considered to
be in category of automotive parts manufacturer and automotive accessories manufacturer.
Automotive Parts Manufacturer
Automotive parts manufacturer for passenger and commercial car is a producer of component parts for
automotive manufacturer. Most of the automotive parts manufacturers will manufacture various parts of
automotive according to design or model set by the automotive manufacturer. In addition, most of the
automotive parts manufacturers will have manufacturing base nearby automotive manufacturer’s
manufacturing site in order to save logistic cost and increase flexibility in production of automotive
manufacturer. In this regards, automotive parts manufacturer can be divided into two forms as follows.
First Tier Automotive Parts Manufacturer
This type of automotive parts manufacturer produces automotive parts and directly delivers to automotive
company to assemble into the car. Most of producers of this type are big company with high production
capacity and usually will provide production service of all parts.
Second Tier Automotive Parts Manufacturer
This type of automotive parts manufacturer produces automotive parts for the first tier automotive parts
manufacturer, in which parts that is produced by this kind of manufacturer are less complex than those
produced by the first tier manufacturer. In addition, parts produced by the second tier manufacturer
may not be a finished part and therefore needs to be assembled further by the first tier manufacturer
before delivery to the automakers.
Automotive Accessories Manufacturer
Automotive accessories manufacturer for passenger and commercial car are different. The automotive
accessories manufacturer for passenger car produces parts that will enhance the beauty or performance
of the car, for example, spoiler, front bumper and mag wheel.
On the other hand, the automotive accessories manufacturer for commercial car produces parts that will
enhance the performance or increase application features of the commercial car, for example, bed liner,
canopy and deck cover.
The automotive accessories manufacturer consists of 6 major manufacturers, who compete among
themselves with technology and
automotive accessories manufacturer itself, without having design or blueprint from the automotive
company. In this regards, most of the automotive accessories manufacturers will produ
parts including bed liner, deck cover, canopy and side step, which there are only Aeroklas and Maxliner
that can produce all of 4 types.
Operator
Country
Aeroklas
Thailand
Vandapac
Thailand
EGR
Australia
Pro-Form
New Zealand
International Liner
USA
PandaForm
USA
Source: Operators’ Websites
3. Plastic Packaging Business
If we consider the usage of plastic cup in Asia, we can see that there is a correlation between the uses
of premium plastic cup to the income of the people in that country. As indicated in the diagram below
The automotive accessories manufacturer consists of 6 major manufacturers, who compete among
themselves with technology and design of external appearance. The design will be carried out by the
automotive accessories manufacturer itself, without having design or blueprint from the automotive
company. In this regards, most of the automotive accessories manufacturers will produ
parts including bed liner, deck cover, canopy and side step, which there are only Aeroklas and Maxliner
that can produce all of 4 types.
Parts and Accessories for Commercial Car
Bed Liner Deck Cover Canopy Side Step
� � � �
� � � �
- � � -
New Zealand � � - -
� - - -
� - - -
(Operates by Eastern Polypack Company Limited
If we consider the usage of plastic cup in Asia, we can see that there is a correlation between the uses
of premium plastic cup to the income of the people in that country. As indicated in the diagram below
The automotive accessories manufacturer consists of 6 major manufacturers, who compete among
design of external appearance. The design will be carried out by the
automotive accessories manufacturer itself, without having design or blueprint from the automotive
company. In this regards, most of the automotive accessories manufacturers will produce 4 important
parts including bed liner, deck cover, canopy and side step, which there are only Aeroklas and Maxliner
Side Step Others
� �
� �
- �
- �
- -
- �
)
If we consider the usage of plastic cup in Asia, we can see that there is a correlation between the uses
of premium plastic cup to the income of the people in that country. As indicated in the diagram below
that most of the countries, that have higher beverage consumption per Capita and GDP per Capita,
usually use premium plastic cup. This correlation can be seen in Japan, South Korea, Taiwan,
Singapore and Hong Kong. Since there are many world renowned food and beverage stores who need
to maintain a premium appearance located in these countries therefore, the majority of these restaurant
and coffee shop choose to use a premium plastic cup rather than a general plastic cup. The majority of
these premium plastic cups are imported from nearby countries rather than producing it themselves
domestically, since the cost of the wages in those countries is not worthwhile to invest in premium
plastic cup manufacturing facility.
Relationship between GDP per Capita and Beverage Consumption per Capita in 2013
Source: Research department of the Company
In developing countries such as Thailand, Malaysia and China there is an increasing use of premium
and general plastic cup, which the market share of these two type of plastic cup are fairly close. The
consumption of premium plastic cup is driven by the higher purchasing power of the people in that
country as well as the popularity of the premium food and beverage store that is currently expanding
its outlet throughout those countries i.e. Starbucks, Coffee Bean and Coffee Club. These outlets
expansion of both local and international operators can create a high tendency for those operators to
use more premium plastic cup.
The procurement of these premium plastic cups depends on the production capability in each country.
In some country the food and beverage operators are able to procure premium plastic cup
Cambodia
MyanmarIndia
The Philippines
VietnamLao
Indonesia
Thailand
ChinaMalaysia
Taiwan
South KoreaHongkong
Japan
Singapore
GDP per Capita 2013
(USD)
Bev
erag
e C
on
sum
pti
on
per
Cap
ita
2013
(US
Dฯ
)
Countries that consume general
plastic cups
Countries that consume both premium
and general plastic cups
Countries that consume premium plastic cups
1,000 2,000 3,000 4,000 5,000 7,000 9,000 20,000 30,000 40,000 50,0000 60,000
0
50
100
150
200
250
300
350
550
750
950
1,150
1,350
1,550
11,000
domestically since the local operators have the capability to produce premium plastic cup i.e. Thailand
but for other countries, the food and beverage operators need to import premium plastic cup from
other nearby countries.
For the country that have relatively low GDP per Capita i.e. India, Indonesia, Philippine, Laos,
Cambodia, Vietnam and Myanmar, there is very limited growing popularity of premium food and
beverages operators that uses premium plastic cup. These developing countries still use a general
plastic cup. Nevertheless, these consumer behaviors are subject to change and with the expansion
within Asia, making these developing countries that consume general plastic cup have a higher
potential to consume premium plastic cup in the near future. The competitive landscape of this
industry consists of multiple small businesses which have limited production capacity and the premium
plastic cup which most of the country need to imported from the nearby countries.
Structure of Asian major manufacturer in food and beverage plastic packaging industry
Thermoforming Plastic Cup Producer in Asia, June 2014
Operator Country
Type of Plastic
PP PS GPPS PET
Eastern Polypack Thailand � � � �
Toyo Seikan Group Holdings (Tokan Kogyo) Japan � �
Honor Plastic Industrial Taiwan �
Greiner Packaging International The Philippines �
Kingfa Hongkong � �
Source: Company
Since premium plastic cup is in the industry that required advanced technology as well as high
technology machinery. Therefore, there is only a few numbers of major manufacturers since the
market size considered to be relatively small. In Asia there are a total of 5 key manufacturers which
consist of Eastern Polypack, Tokyo Group, Honor Plastic Industry, Greiner Packaging International and
Kingfa. These companies dominated 30% – 40% of the thermoforming plastic cup industry in which,
Eastern Polypack dominated 15% of the Asian market.
Thermoforming Plastic Cup and Injection Moulding Manufacturer in Thailand, June 2014
Operator Country
Type of Plastic
PP PS GPPS PET
Eastern Polypack Thailand � � � �
Thai Elephant Cup Thailand � �
Vandapac Thailand � � �
Srithai Superware (Injection Moulding) Thailand �
C.P. Packaging Industry (Injection Moulding) Thailand �
Source: Company
For the market in Thailand, the company predicted that all of the 5 major manufacturers of
Thermoforming and Injection Moulding will be 70% of the market share and for Eastern Polypack, it
will be the dominant player and gain 35% of the total marketing share in Thailand.
In this regards, Eastern Polypack is considered as the only major manufacturer in Asia that has the
ability to produce every form of plastic cup, since other manufacturers do not have the capability or
the production capacity to produce every form of plastic cup. In addition, major producer in each
country, especially high income countries, is facing with the problem that there is not enough
production capacity to export because of high domestic consumption. Currently, only Eastern
Ploypack Company is large enough to export every categories of its product.
Environmental Impact: None
Summary of Agreement
Joint Venture Agreement
Tokai Eastern Rubber (Thailand) Co., Ltd.
Board of directors and
company’s general
management and
administration
� Board of directors, who is responsible for general management of the company,
consists of 9 directors, in which each shareholder can send its representatives as
follows,
o Tokai Rubber Industries, Ltd. – 5 representatives
o Eastern Polymer Group Plc. – 2 representatives
o Sumipol Co., Ltd. – 1 representative
o Toyota Tsusho (Thailand) Co., Ltd. – 1 representative
� At least 7 directors are required to attend in each board of directors' meeting.
� Board of directors does not have authority to consider in every agenda, especially the
agenda that is important to operation of Tokai Eastern Rubber (Thailand) Co., Ltd.
This type of agenda requires approval from shareholders’ meeting. These important
agenda are including,
o Preparation of annual financial statements, appropriation of profit or loss and
considerations on dividends
o Approval of the annual budget
o Establishment or dissolution of manufacturing plant or affiliated company
o Purchase of land, plant, or any other assets with value higher than 5 millions
baht
o Transfer, sale, lease, or any other transaction that relates to land, plant, and
assets with value higher than 10 millions baht.
o Borrowing of amount more than 20 millions baht
o Decision to enter into important contract
Shareholders’ meeting � In each board of directors’ meeting, shareholders with combined shareholding of at
least 2/3 of total outstanding shares are required to attend the meeting.
� The approval of general meeting requires majority vote to approve these agenda,
except for important agenda, which is required approval from shareholders’ meeting of
at least 81 percent, as follows,
o Increase and reduction of capital
o Issuance of new shares in addition to common shares at the par value
o Amendment of the memorandum and articles of association
o The amalgamation with another company
o Dissolution of the company
o Decision to enter into important contract
� As for voting in the shareholders’ meeting, rights of common shareholders and
preferred shareholders are as following,
o Common shares – 1 voting rights per 1 share
o Preferred shares – 30 voting rights per 1 share
Restrictions on transfer
of shares
� In the event of trading of shares, delivery of shares, using shares as collateral or any
other transaction involving the company’s shares, there shall be letter to the board of
directors for notification and consent before proceeding.
� Price for trading of the company’s shares shall be determined by an independent
appraisal appointed by the board of directors.
� In the event that a shareholder wishes to sell the company’s shares, other shareholders
have the rights to buy such shares within 50 days. After a specified period, the
shareholder, who wishes to sell the shares, shall sell the shares to a third party.
� Tokai Rubber Industries, Ltd. and Eastern Polymer Group Plc. have the rights to trade
or transfer the company’s shares to the affiliates without having to pass restrictions on
transfer of shares.
Dividend policy � Dividends from the company’s profits will be allocated to preferred shareholders at
dividends per share amount that is equal to 30 times of dividends per share paid to
common shareholders. In the event of non-payment of dividends in any year, the
dividends shall not be carried forward to next year.
� Dividends shall be allocated to each shareholder within 60 days after shareholders’
meeting.
Termination and
amendment
� This agreement shall be immediately terminated when the government of Thailand or
any authority or authorized person cancels permission of place of business or any
operation of the company by any reason.
� Any amendment or addition to agreement must be unanimously approved by all
shareholders.
Zeon Advanced Polymix Co., Ltd.
Board of directors and
company’s general
management and
administration
� Board of directors, who is responsible for general management of the company,
consists of 7 directors, in which each shareholder can send its representatives as
follows,
o Zeon Corporation – 3 representatives
o Toyota Tsusho (Thailand) Co., Ltd. – 2 representatives
o Eastern Polymer Group Plc. – 2 representatives
� At least 61 percent of total directors are required to attend in each board of directors'
meeting.
� Board of directors does not have authority to consider in every agenda, especially the
agenda that is important to operation of Zeon Advance Polymix Co., Ltd. This type of
agenda requires approval from shareholders’ meeting. These important agenda are
including,
o Amendment of the memorandum and articles of association
o Transfer, sale, or guarantee provision, or management of key business or key
assets
o The amalgamation with another company or investment in other company
o Establishment of branch, plant and affiliate
o Increase and reduction of capital
o Approval on transfer or sale of the company’s shares
o Issuance of new shares in addition to common shares at the par value
o Decision to enter into important contract
o Preparation of annual financial statements, appropriation of profit or loss and
considerations on dividends
o Dissolution of the company
o Approval of the annual budget
o Capital increase through purchase of shares and payment of newly issued
shares of the company according to proportion of shares that the shareholder
holds.
Shareholders’ meeting � In each board of directors’ meeting, shareholders with combined shareholding of at
least 2/3 of total outstanding shares are required to attend the meeting.
� The approval of general meeting requires majority vote to approve these agenda,
except for important agenda, which is required approval from shareholders’ meeting of
at least 75 percent, as follows,
o Consideration of annual financial statements, appropriation of profit or loss,
dividends, reserves and unallocated amount of the company’s profit that have
not yet been paid as dividends
o Amendment of the memorandum and articles of association
o The amalgamation with another company
o Increase and reduction of capital
o Issuance of new shares in addition to common shares at the par value
o Dissolution of the company
� As for voting in the shareholders’ meeting, all common shares have equal voting
rights.
Restrictions on transfer
of shares
� Shareholder shall not sell, transfer, deliver, or use as collateral or engage in any
transaction involving the company’s shares.
� In the event that a shareholder wishes to sell the company’s shares, other shareholders
have the rights to buy such shares first. If more than one shareholder are interested in
buying the shares, the shares will be allcoated to each interested shareholder
according to proportion of existing shareholdings.
� In the event that transaction between shareholders cannot be agreed upon, the seller
can sell shares to a third party with consent of board of directors.
� Trading price of the company’s share shall be determined from the latest financial
statements of the company. In the case that the trading price cannot be agreed upon,
the trading price shall be determined by an independent appraisal which has been
agreed by seller and buyer.
Dividend policy � The company shall pay dividend not less than 20 percent of net profit. However, in the
event that the company incurs accumulated loss, no dividend shall be paid.
Termination and
amendment
� Any amendment or addition to agreement must be unanimously approved by all
shareholders.
Feasibility Study None
Management and Technical Assistance None
Future Project
The Company has policy to maintain leadership in every invested business by continuing research for new
products. The Company research budget is approximately 1.0% of its total revenue. In addition, the Company
shall continue expanding its business in other untapped area to strengthen its business. The details of
expansion in 2 – 3 years (fiscal year 2015 – 2017) shown below
Summary of the Company Investment Plan in 2 – 3 years (fiscal year 2015 – 2017)
Business Project
Investment Amount
(THB mm)
Investment Period
Insulation business Expansion of USA capacity THB 300 mm Fiscal year 2016
(Apr 15 – Mar 16)
Expansion of europe capacity THB 300 mm Fiscal year 2017
(Apr 16 – Mar 17)
Car accessory Distribution channel project THB 700 mm Fiscal year 2016
Business Project
Investment Amount
(THB mm)
Investment Period
business (Apr 15 – Mar 16)
Expansion of deck cover and
canopy capacity
THB 300 mm Fiscal year 2016
(Apr 15 – Mar 16)
Expansion of side step capacity THB 100 mm Fiscal year 2017
(Apr 16 – Mar 17)
Plastic container
business
Expansion of PET cup capacity THB 100 mm Fiscal year 2015
(Apr 14 – Mar 15)
Expansion of plastic sheet
capacity
THB 100 mm Fiscal year 2016
(Apr 15 – Mar 16)
Expansion of fully equiped PET
cup capacity
THB 400 - 500 mm Fiscal year 2017
(Apr 16 – Mar 17)
Related Party Transaction (“RPT”)
The Audit Committee no.5/2014 held on 15 August 2014 has considered the related party transactions of the Company in fisical year 2014 (April 2013 – March 2014)
and first half of fisical year 2015 (April – September 2015) with a discussion with managements and related juristic person. As the notes to audited financial statements
reviewed by the Audit Committee, RPT is under the Company’s normal business in accordance with the general business terms and on the arm’s length basis.
Moreover, there is no transfer of interests and benefits between the Company and conflict person. RPT for fiscal year 2014 and first half of fiscal year 2015 are as
follows;
Conflict Person
Juristic person/company who might have conflict of interest Nature of Business Relationship
Vitoorapakorn Group
- � Vitoorapakorn Group holds 100% share in the Company before offering
IPO shares to public, and after IPO Vitoorapakorn Group holds 75%
share in the Company
� Vitoorapakorn Group has 5 board seats in the Company including (1)
Pawat Vitoorapakorn (2) Teerawat Vitoorapakorn (3) Chamnarn
Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Ekawat Vitoorapakorn
Vitoorapakorn Holding Co., Ltd.
(“Holding”)
Investing Business � Vitoorapakorn Group holds 100% share in the Holding
� Vitoorapakorn Group has 6 board seats in Holding including (1) Pawat
Vitoorapakorn (2) Teerawat Vitoorapakorn (3) Chamnarn Vitoorapakorn
(4) Chalieo Vitoorapakorn (5) Ea Vitoorapakorn and (6) Tanawat
Vitoorapakorn
Eastern Syntec Co., Ltd.
(“Syntec”)
Manufacture of other fabricated metal duct for
air venculation system and energy saving
lamp
� Vitoorapakorn Group holds 100% share directly and indirectly in Syntec
� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Syntec
including (1) Pawat Vitoorapakorn (2) Teerawat Vitoorapakorn (3)
Chamnarn Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Ekawat
Vitoorapakorn
Juristic person/company who might have conflict of interest Nature of Business Relationship
I.P.P. (Thailand) Co., Ltd.
(“IPP”)
Industrial estate business including property
for sale, space rental, utilities and other
services
� Vitoorapakorn Group holds 100% share directly and indirectly in IPP
� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in IPP
including (1) Pawat Vitoorapakorn (2) Teerawat Vitoorapakorn (3)
Chamnarn Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Ekawat
Vitoorapakorn
Hayakawa Eastern Rubber Co., Ltd. (“Hayakawa”) Kindergarden mat manufacturing business
� Vitoorapakorn Group holds 35% share directly and indirectly in
Hayakawa
� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in
Hayakawa ( Chamnarn Vitoorapakorn)
� In addition, Mr. Charin Varintaraporn, management of the Company, is
the board member of Hayakawa
Abric Eastern International Co., Ltd. (“Abric”) Metal and plastic safty seal manufacturing
business
� Vitoorapakorn Group holds 25% share directly and indirectly in Abric
� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Abric
including (1) Pawat Vitoorapakorn (2) Teerawat Vitoorapakorn (3)
Chamnarn Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Ekawat
Vitoorapakorn
Dynamic Eastern Garment Co., Ltd.
(“Dynamic”)
Leather and garment business � Vitoorapakorn Group holds 74% share directly and indirectly in
Dynammic
� As of 31 March 2014, Vitoorapakorn Group has 2 board seats in
Dynamic including (1) Ratiporn Chaiyangyuen and (2) Chalieo
Vitoorapakorn
Patton Aero Co., Ltd.
(“Patton”)
Aircondition manufacturing business
� Vitoorapakorn Group holds 40% share directly and indirectly in
Dynammic
� As of 31 March 2014, Vitoorapakorn Group has 2 board seats in
Dynamic including (1) Pawat Vitoorapakorn and (2) Chalieo
Vitoorapakorn
Juristic person/company who might have conflict of interest Nature of Business Relationship
Siam Inter Air Supply Co., Ltd. (“Siam Inter”) Aircondition manufacturing business
� Vitoorapakorn Group holds 40% share directly and indirectly in Siam
Inter
� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in Siam
Inter (Ratiporn Vitoorapakorn)
Four-S (2007) Co., Ltd.
(“Four-S”)
Office building space rental business and
hostel business
� Vitoorapakorn Group holds 100% share directly and indirectly in Four-S
� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Four-S
including (1) Pawat Vitoorapakorn (2) Teerawat Vitoorapakorn (3)
Chamnarn Vitoorapakorn (4) Chalieo Vitoorapakorn and (5) Eakwat
Vitoorapakorn
Best Architechtural Lighting Co., Ltd. (“Best”)
Lighting and equipment business � Vitoorapakorn Group holds 40% share directly and indirectly in Best
� As of 31 March 2014, Vitoorapakorn Group has 3 board seats in Best
including (1) Naowarat Vitoorapakorn (2) Kanyarat Vitoorapakorn and (3)
Rungravee Vitoorapakorn
B.N.C.-1 Partnership
(“BNC.1”)
Land building and office rental business � BNC.1 was set up by Vitoorapakorn Group
BNC. 4 Partnership
(“BNC. 4”)
Land building and office rental business � BNC.4 was set up by Vitoorapakorn Group
Group of Person T & C Land and House (“T&C”)
Group of Person P & C Land and House (“P&C”)
Group of Person PRV (“PRV”)
Land building and office rental business � T&C, P&C and PRV were set up by Vitoorapakorn Group
Juristic person/company who might have conflict of interest Nature of Business Relationship
FARAERO OTO, SANTIC A.S.
(“Faraero”)
Van liner manufacturing business in Turkey � Vitoorapakorn Group holds 40% share directly and indirectly in Faraero
� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in
Faraero including (Ekawat Vitoorapakorn)
Siam BR Service Co., Ltd.
(“Siam BR”)
Airconidtion business including both sale and
repairing
� Vitoorapakorn Group holds 51% share directly and indirectly in Siam BR
� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in Siam
BR (Ratiporn Vitoorapakorn)
Eastern Polytech Co., Ltd.
(“EPT”)
Metal and plastic profile manufacturing
business
(Discontinue business after the flooding in
2012)
� Vitoorapakorn Group holds 100% share in the EPT
� Vitoorapakorn Group has 6 board seats in EPT including (1) Pawat
Vitoorapakorn (2) Teerawat Vitoorapakorn (3) Chamnarn Vitoorapakorn
(4) Chalieo Vitoorapakorn (5) Ekwat Vitoorapakorn and (6) Tanawat
Vitoorapakorn
All-outt Co., Ltd.
(“All-outt”)
Learning center business including physical,
and social, and trading hair related product
business
� Vitoorapakorn Group holds 88.25% share directly and indirectly in Best
� As of 31 March 2014, Vitoorapakorn Group has 1 board seat in Best
including (Supawadee Vitoorapakorn)
Sanki Eastern (Thailand) Co., Ltd. (“Sanki”) Manufacturing parts for camera and lighting
system business
� Vitoorapakorn Group holds 30% share directly and indirectly in Sanki
� As of 31 March 2014, Vitoorapakorn Group has 5 board seats in Sanki
including (1) Pawat Vitoorapakorn and (2) Chamnarn Vitoorapakorn
Details of RPT of fisical year 2014 (April 2013 – March 2014) and first half of fisical year 2015 (April – September 2015)
Unit: THB mm
Details of the Transaction
Transaction value
Opinion of Audit Committee Fisical year
2014
(Apr13–Mar 14)
half of fisical
year 2015
(Apr – Sep 15)
Revenue 131.908 15.227
1. Service and consultation revenue
1.1. IT service revenue from Syntec
1.2. Consultation revenue from Syntec
1.3. Utilities revenue from IPP
1.4. Service revenue from Abric, Patton, Syntec, Sanki, Best and
Hayakawa
4.776 2.419 Transactions is appropriated as the Company has no impact to its operation
from providing such services and having income higher than its expense
2. Revenue from space rental
2.1. Office space rental revenue from Abric
0.135 0.090 The Company rent 20. sq.m. office to Abric at 750 THB/sq.m./month which is
not less than rental rate in nearby location of 700 THB/sq.m./month
3. Revenue from selling finish goods
3.1. Seling insulator to Syntec, IPP, Hayakawa, Patton, Siam Inter,
Four-S, and EPT
3.2. Seling plastic packaging to Syntec and IPP
3.3. Seling plastic sheet to Faraero
17.437 9.779 Transactions are done under the general business terms and on the arm’s
length basis with the price not less than other customers
4. Revenue of other goods
4.1. Selling consumable goods to Syntec
4.2. Selling papers boxes to Abric
106.639 2.939 Transactions are done under the general business terms and on the arm’s
length basis at the same selling price as other customers
Details of the Transaction
Transaction value
Opinion of Audit Committee Fisical year
2014
(Apr13–Mar 14)
half of fisical
year 2015
(Apr – Sep 15)
4.3. Selling assets to Faraero, All-outt and IPP
4.4. Selling Faraero shares to EPT
4.5. Selling boat to IPP, Holding, Vitoorapakorn Group
5. Other Revenue
5.1. Management revenue from IPP
5.2. Interest revenue from Holding
2.921 - Transactions are done under the general business terms and on the arm’s
length basis at the same selling price as other customers. In addition, the
Company has adequate resource to complete the transactions without impact
to the Company’s operation.
Expense 175.221 76.084
1. Rental expense (Land, building, and equipment)
1.1. Space rental expense paid to Syntec and IPP
1.2. Space rental expense paid to BNC1., BNC 4., T&C, P&T, and
PRV
14.583 7.292 The Company rent land building and equipment from Syntec, IPP, to BNC1.,
BNC 4., T&C, P&T, and PRV for their operation. The transactions are ingregal
to the Company’s opereation. The rental rates are on the arm length basis
and closed to market rate and nearby location rental rate
2. Rental expense (Vehicle)
2.1. Truck rental expense paid to Syntec
2.2. Vehicle rental expense paid to IPP
19.107 3.825 The Company rents truck and other vehicles for operation, as department of
land transport does not allow the Company to buy addition trucks. However
the rental rates are on the arm length’s basis and less than other truck
providers
Details of the Transaction
Transaction value
Opinion of Audit Committee Fisical year
2014
(Apr13–Mar 14)
half of fisical
year 2015
(Apr – Sep 15)
3. Uilities and other expenses
3.1. Utilities expense paid to IPP
3.2. Other expense paid to IPP
29.293 13.503 The Company and its subsidiaries have factories located in IPP so the
Company and subsidiaries required to use utilizes in industrial estate which
provided by IPP. In addition, the rates are not higher than market rate.
4. Finished goods expense
4.1. Finished goods and raw materials expense paid to Syntec,
Abric, Dynamic and EPT
36.309 21.887 Buying finished goods and raw materials are considered as the normal
operating business on the arm length basis. The price is not higher than the
rate that Syntec, Abric, Dynamic and EPT charged others
5. Expense for land building and equipment
5.1. Expense of buying vehicles from IPP
5.2. Expense of buying equipment from Siam Inter
5.3. Expense of buying assets from EPT
36.309 21.887 The Company and subsidiaries required to acquire those assets from conflict
persons for operation as the price is appropriated and is the same rate as the
market rate
6. Other Expense
6.1. Other expense paid to Syntec
6.2. Uniform expense paid to Dynamics
6.3. Repair expense paid to Siam Inter
6.4. Hostel rental expense paid to Four-S
6.5. Maintenance expense paid to Siam BR
6.6. Other expense paid to Hayakawa
6.7. Interest expense paid to Holding and Vitoorapakorn Group
22.154 8.597 Other expense such as uniform, maintenance, hostel rental, interest expense
and service expense are done at appropriated rate which does not higher
than market rate.
Risk Factors
1. Operational Risk
1.1.1 Risk related to the Company
Risk of procurement and fluctuation of raw materials
Plastic including syntetic rubber (“polymer”) is the major cost of the Company for operation. In fiscal
year 2014, Aeroflex, Aeroklas, and Eastern Polypack’ polymer cost is 30% – 32%, 41% - 44%, and
55% - 62% of total operational cost. In addition, polymer cost shares 22% and 40% of total cost of
TER and ZAP respectively. Polymer shares the largest portion of the Company’s cost. If the Company
cannot procure sufficient amount of polymer, it may cease its operation.
However, the Company takes this risk into consideration by having conservative risk mitigation policy.
In term of volume, the Company maintains good relationship with all of the suppliers and diversifies
risk by using global sourcing through 40 suppliers in local and overseas.
In term of price voluntarily, the Company could manage price risk by pass through mechanism to the
customers, since the contract secured with the customer partly allowing the Company to adjust price
according to polymer price. In addition, the Company could switch materials or using other materials to
reduce cost to maintain profit margin.
Risk from changing technology
Since the Company operates plastic conversion business by using mixing and compounding,
extruding, injection, thermal forming, blow molding and reaction injection molding (R.I.M.), if new
technology invented by competitors, the Company might lose competition advantage. In addition, the
Company could not adapt to the new technology on time, it will cease the Company’s operation.
However the Company takes this risk into consideration by investing in EPG Innovation Center Co.,
Ltd. (“EIC”) to research and focus on the new products for the Company. In addition, EIC is fully
equipped and considered one of the most recent technology research centers in South East Asia. In
addition, EIC also hires highly experience researchers to join EIC for developing products.
Risk of in the event of an emergency, accident and natural disaster in relation to the factory or
the machine of the Company
Factory and machinery are integral parts for operating core business of the Company, the subsidiary
and the associate companies. In the case of emergency, accident or natural disaster take place and
damage the factories including machinery, will cause the Company, subsidiary and associate
companies business interruption resulting in poor performance and forgone some of important
customers. Since these customers require new suppliers to continue operating their business without
depending only on the Company and to taking back these customers might not be possible. In
addition, repairing or investing in the new machinery and factory would require large amount of capital
expenditure to continue the Company’s business.
However, the subsidiary and associate company take into consideration of this risk as taking place of
these events would cause major damage to the Company, so the Company has protected this risk by
entering into insurance contact for the event of accident, disaster and natural disaster.
Risk from the expiring patents
Currently the Company’s revenue mainly comes from the patterns accounting for more than 30% of
total core revenue. The Company products or revenue are protecting by the law from the patterns
which competitors cannot copy and duplicate. However, once these patents expire, the protection from
law will be uplifted resulting in poorer performance or loss operation.
However, the Company takes into the account of this risk by consulting highly experience lawyer to
monitor on this risk. In addition, the Company also registers more patterns and extending the patterns
to prolong the existing patterns to additional 10 to 20 years
1.1.2 Risk of thermal insulator business
Risk of price war from the competitors
In elastomeric thermal insulator business of Aeroflex has few players in the market such as Amacell
(USA), K-Flex (Italy) and Aeroflex (Thailand). From the past, the competitions between all the players
are considered medium to high depending on the regions. Sometime, Aeroflex uses the pricing
strategy to complete in the competition resulting in lower the price and lower profit from operation.
However, the Company products have superior quality comparing to the products of the competitors in
term of thermal insulation, service temperature, condensation and flammability. With the superior
quality would be secured price insensitive customers which not sensitive to pricing policy or any
discount from the competitors as the competitors’ products do not have similar quality comparing to
the Company. In addition, Aeroflex is the product that certified and required by the engineers who
specify products for each building. Aeroflex also launch another brand “Celflex” which has lower
quality to compete with the competitors.
Risk from dependence on the construction and real estate business
Insulator is considered one of the construction materials which directly related to the construction
activities, construction and real estate industry. In addition, once the construction industry slows down
as happened in 1997 – 1999, resulting to Aeroflex performance. However both industries do not have
significatnt impact to the Company, as 20%-30% of Aeroflex’s products are also being used in the
replacement market or using for maintenance building.
In addition, Aeroflex also develop new products such as roof-insulator and acoustic board to diversify
company risk from both industries.
Risk from investing and expanding into overseas
Logistic cost is considered major cost of the Company account for 15% - 20% of total cost of the
Company during fiscal year 2012 – 2014, so Aeroflex is expanding to overseas to reduce such cost
and improving logistic cost and logistic time. However inadequate international experience in each
location would result the Company to suffer loss from operation and the Aeroflex’s formula could be
released to the competitors.
Aeroflex concerns on this risk and invests under the conservative basis by investing in the form of
associate companies, licensing with business partners which resulting in risk mitigation. Having the
business partner in overseas would assist the Company on business expansion resulting in faster
succession. For the investing plan, the Company would slowly invest and not invest in fully scale
manufacturer in overseas (overseas plant can produce only Prefoam Tube and Sheet or Compound)
to prevent secretly formula to be released to competitors. In addition, the production plant of the
wholly owned subsidiaries is not fully equipped factories as well since Aeroflex would like to reduce
the risk from investing activities. Currently wholly owned subsidiary in USA performance is profitable
and continuously improve.
1.1.3 Risk of car accessories business
Risk of termination of existing contact or non-continuing the contact with key customers
Aeroklas commences ODM production business for world leading automotive companies such as
Toyota Ford Isuzu Nissan and Mitsubishi. In fiscal year 2012 – 2014, ODM business contributes 40% -
50% of total revenue to ARK. To do such business, ARK is required to enter into contract with leading
automotive companies which some contacts are short term contract (1-2 years), so ARK would face
the risk of discontinue or renewal ODM contract from many events such as relocation the leading
automotive companies.
However, leading automotive companies generally do not change their supplier until the new model
launched, each of the model shall survive for 5 – 8 years. To select the new suppliers would require
additional time and would pending the production process, generally selecting new suppliers required
3 – 36 months. In addition, relocating for new location is difficult to take place as Thailand has many
expreinced workers and having research center with supporting from government would secure
leading automotive companies for long time.
In addition, ARK holds many patterns of revenue product which protecting copy or duplicate from
competitors, ARK holds the bargaining power from having monopolistic advantage over the leading
automotives which protecting the Company from termination contract from the leading automotive
companies. Furthermore, to prevent such risk, the Company use and service group of the companies
closely.
Risk from dependence on the automotive industry
ARK operates business from depending on the automotive industries as fiscal year 2012 – 2014, the
Copany performance declined 80% - 85% of total ARK revenue as the automotive industry slows
down and due to other economics factor decline. This factor could result in loss from operation and
poor performance.
As the automotive is important to human being, since 2009 automotive industry has average growth
rate of 6.9% per annum. In addition 64% of automotive businesses in Thailand have been supported
by the government by providing various incentives such as tax benefit and first car policy to become
Detriot of Asia. During the 2009 - 2012, automotive industries continue growth at rate of 31.57% per
annum.
In addition, due to the fierce competition in automotive industry, the leading automotive renew and
launching new model more offent, this event providing opportunities to ARK to introduce new products
to the market to maintain its revenue.
Furthermore, commercial cars or pick-ups are widely used for business resulting less voluntarily to
ARK revenue comparing to passenger car business
1.1.4 Risk of plastic packaging business
Risk of termination of existing contact or non-continuing the contact with key customers
Estern Polypack Co., Ltd. (EPP) operates plastic packaging business by having 31% - 33% revenue
come from ODM business. ODM business requires EPP to do contact with leading f&b companies
such as McDonald, CPall, and Yum Yum. Some of the contacts do not specify the tenor of the contact
or exact order, entails risk of terminating contact to EPP once the contact expire. The leading f&b
companies would decide to discontinue the contact resulting in poor performance of EPP.
However, to award the contact to new comer would not be simple as the leading f&b companies would
not terminate contact until found the satisfy suppliers who able to service in term of price and quality.
Terminating contact by the leading f&b companies could result in business interruption of the f&b
companies. In addition, selecting process of leading f&b companies would require period of time to
ensure the quality. For example, to achieve certificate from Mcdonald, the Company requires 3 years.
Risk of dependence on domestic consumption
Majority of EPP revenue come from domestic, during fiscal year 2012 – 2014, EPP has domestic
revenue more than 85%. If Thailand economic crisis take place, slowdown or any of natural disasters,
contagion and terrorist take place in Thailand, EPP performance would be affected directly from lower
domestic consumption. Especially, these events prolong for periods of time, EPP could possible loss
from the events.
The Company takes into the consideration of this risk by reduction of domestic consumption, as total
of the Group exporting 40% and EPP products are directly related to daily consumption so EPP
performance should not decline during the crisis.
2. Financial Risk
Risk from fluctuations in currency exchange rates
Subsidiary companies and associate companies have revenue and expense in form of foreign
currency such as revenue from selling product to customer in overseas, polymer expense, machinery
expense and the overseas employee expense. Fisical year 2014, Aeroflex, Aeroklas, and Eastern
Polypack have revenue and expense in term of foreign currency 33% of revenue and 25% of the
expense respectively.
In addition, TER and ZAP have revenue and expense in term of foreign currency 10% of revenue and
20% of the expense respectively.
The exchange rate is depended on Thailand economic and global economic which beyond the
Company, subsidiaries, and associated companies’ controlling power or beyond the estimation. Once
the exchange rate changes into the unfavorable trend, the Company could have impact to its
performance.
The Company has risk policy to mitigate such fluctuation of the currency by setting up the hedging
policy for risk mitigation only. The policy has limited the hedging ratio and limited the tenor period.
In addition, the advantage of the Company is the consolidated hedging or group hedging and the
Company position is natural hedge, these 2 factors could mitigate exchange rate risk.
3. Management Risk
Risk of having major shareholder holding more than 75% after the IPO
Vitoorapakorn Group currently holds 100% in the Company and after 25% newly issued shares
allocation in the IPO, the Vitoorapakorn Group will dilute upto 75% of total issued shares. By holding
75% shares, the Vitoorapakorn Group still has control over the Company can direct companies in
almost the agendas including the agendas which required ¾ vote from shareholders. The minority
shareholders might not able to accumulate the vote to block or balance the power of the
Vitoorapakorn Group.
In addition, the Company board seats are consists of 4 independent directors from 9 directors. These
4 directors would doing monitoring, reviewing and balancing the power of the major shareholders.
In addition, to do the connected transaction, the company has to follow the process of SET and SEC
accordingly
Risk of depending on key management (executive officer) or the specialize
The success depends to a significant extent upon the continued services, vision, and expertise of our
executive officers, especially Vitoorapakorn Group, the experience in insulator, car accessory and
plastic packaging business. The loss of any of the executive officers and other key management
personnel or failure to recruit suitable or comparable replacements could have an adverse effect on
the Company.
The business also requires having highly-skilled and dedicated engineer, and other stuffs. The loss of
significant number of highly-skilled persons or failure to recruit suitable or comparable replacements
could have an adverse effect on the Company.
Company has concerned on this issue and has set up the sub-committee to manage and direct
business plan and strategy. In addition, the Company has trained and well developed staff regulary.
The Company believe that the Company could secure talent to continue business accede to the
existing executive officers. In addition, the Company has compensated the employee which in relation
to the period of work. During fiscal year 2012 – 2014 employees has resigned from the Company 3
persons (2.5% per year excluding retired employees).
Legal Dispute -None-
No. of Employee
The number of employee of the company and its subsidiary are displayed in table below
As of 31
March 2012
As of 31
March 2013
As of 31
March 2014
As of 30 June
2014
1. Insulation Business (Aeroflex) 788 760 693 698
2. Car Accessories Business (Aeroklas) 1,099 1,320 1,048 1,091
3. Plastic Packaging Business (Eastern
Polypack)
673 822 835 893
4. Headquarter - - 64 63
5. Other Business 56 48 55 55
Total 2,616 2,950 2,695 2,800
Company Background
Eastern Polymer Group Public Limited Company
Year Event
1978 � Incepted Eastern Polymer Industries Co, Ltd. to operate insulator business
� Relocated factory base to Samutprakarn with a total area of 1,500 square meters and manufactured
“Aeroflex” insulators
1994 � Incepted Aeroflex International Co, Ltd.to expand manufacturing base of insulator and its related products
internationally
� Started manufacturing automotive accessories under Aeroflex International Co, Ltd.
1995 � Jointly invested with Zeon Corporation and Toyota Tsusho to incorporate Zeon Advance Polymix to
manufacture compound rubber for other rubber production
� Jointly invested with Tokai Rubber Industries Co, Ltd. to incorporate Tokai Eastern Rubber (Thailand) to
produce anti-vibration rubber products for automotive, CD players and in-car sound proofing
2001 � Incepted Eastern Polypack Co, Ltd. to acquire Thai Modern Plastic Industry Plc’s assets, in which run
plastic packaging business
2008 � Restructured Aeroflex International Co, Ltd (hereafter renamed “Aeroklas”) to solely operate automotive
accessories by transferring insulator business unit to Eastern Polymer Industries Co, Ltd.
2010 � Incorporated EPG Innovation Center Co, Ltd (EIC) to run a research and development especially for
polymer, composite and metal products
2012 � Restructured Eastern Polymer Industries Co, Ltd. to be the holding company for the purpose of listing in
Stock Exchange of Thailand by transferring insulator business to Aeroflex Co, Ltd (Aeroflex is purposefully
set up, in 2013, for running insulator business) and purchasing Aeroklas’s and Eastern Polypack’s shares
back from the Vitoorapakorn
2013 � Renamed Eastern Polymer Industries Co, Ltd. to Eastern Polymer Group Public Company Limited and
converted to public company for listing in the Stock Exchange of Thailand
Investment in subsidiary/Associated/Related Companies
Company Ownership
percentage1/
(%)
Business
Insulation Business
1. Aeroflex Co.Ltd AFC 100.0 Manufacturer and distributor of EPDM
synthetic rubber insulation, compound
mix, and intermediate product
Investment in subsidiary/Associated/Related Companies
1.1 Aeroflex USA Co.Ltd AUS 100.0 Manufactures rubber insulation and
distributes in USA
1.2 APS Co.Ltd APS 60.0 Manufacturer and distributor of seal
rubber for automotive industry
1.3 ALP Aeroflex India Co. Ltd AAI 40.0 Manufactures rubber insulation and
distributes in India and nearby countries
1.4 Aerocel Construction Material
(Shaingshu) Co.Ltd
ACM 40.0 Manufactures rubber insulation and
distributes in China and nearby
countries
1.5 Aeroflex Europe Co.Ltd AEU 40.0 Manufactures rubber insulation and
distributes in German and nearby
European countries
Car Accessories Business
2. Aerklas Co.Ltd ARK 100.0 Manufacturer and distributor of Bed
line, deck cover, and other related
products and construction material
related product
Investment in subsidiary/Associated/Related Companies
2.1 Aerklas USA Co.Ltd ARK-USA 100.0 Manufacturer and distributor of Bed
line, deck cover, and other related
products in USA
2.2 Aerklas Australia Co.Ltd ARK-AU 100.0 Manufacturer and distributor of Bed
line, deck cover, and other related
products in Australia
2.4 Aeroklas Shianghai Co.Ltd ARK-SH 100.0 Manufacturer and distributor of Bed
line, deck cover, and other related
products in China
2.5 Aeroklas Europe Co.Ltd ARK-EU2/
74.9 Manufacturer and distributor of Bed
line, deck cover, and other related
products in German and European
countries
Plastic Packaging Business
3. Eastern Ploypack Co.Ltd EPP 100.0 Manufacturer and distributor of plastic
cup and packaging
Other Supporting Business
4. Aeroflex Polymer Technology
(Shianghai) Co.Ltd
APT 100.0 Manufacturer and distributor of rubber
insulation in China and provide
sourcing service in China to support
other business
Research and Development
5. Eastern Polymer Innovation Center
Co.Ltd
EIC 100.0 Research and Development
Note: 1/ Direct and indirect % of shareholding of Vitoorapakorn Group
2/ In the process of settlement and expect to be done in October 2014
Company Ownership
percentage1/
(%)
Business
Joint Venture
6.1 Tokai Eastern Rubber (Thailand)
Co.Ltd
TER 20.03/ Manufacturer and distributor of anti-
vibration and sea horse rubber for
automotive industry
6.2 Zeon Advance Polymix Co.Ltd ZAP 27.0 Manufacturer and distributor Rubber
Compound for automotive industry
Note:3/The Company hold 30,0% of common share in TER, however the Company has rights to receive dividend and voting right only 20% as there is 25,000
preferred shares holding by TRI, which the preferred shares have rights to vote and receive dividend 30 times of common shares. In addition, the Company has
reserve matters on TER as stated in the shareholder agreement and article of association that important agenda required at least 81% favorable vote
Change in Capital in the last 3 years
Unit: THB mm
Date Capital
Increase/(Decrease)
Post-capital
Increase/(Decrease) Objectives
7 August 2013 700.0 2,800.0 Initial Public Offering of 700 million
shares with par value of THB 1.0 per
share and selling price of THB 5.8 per
share. The company’s objectives of this
fund raising is to use for business
expansion and paid back debt
Accounting Period
1 April to 31 March
Auditor Mr. Sudwin Khantipanyawong
PricewaterhouseCooper (Thailand) (“PwC”)
Registrar Thailand Securities Depository Co., Ltd
Financial Advisor The Siam Commercial Bank Public Company Limited
Lead Underwriter SCB Securities Co., Ltd
Dividend Policy
Company
The Company has a policy to pay dividend by considering the capability of paying dividend from
accumulated the company net profit, in which the company will pay at not less than 30% of net profit of
consolidated financial statement after tax and legal reserve. The decision of the dividend payment is based
primarily on benefits to the shareholders regarding, for instance, the Company financial position or reserve of
funds for future investments as decided by board of director
Subsidiary
All of the company’s subsidiaries have a policy to pay dividend to the shareholders not least than 50% of net
profit of separated financial statement after tax and legal reserve. The decision of the dividend payment is
based primarily on benefits to the shareholders regarding, for instance, the Company financial position or
reserve of funds for future investments as decided by board of director. The dividend payment shall not
affect the Company normal operation.
B.O.I. Certificates
Business No. of B.O.I.
Certificates
Starting date – Expired date
Insulation Business 1233/อ./255 19 January 2012 – 18 January 2017
1232(2)/อ./2556 9 June 2014 – 8 June 2022
9 June 2022 – 8 June 2027
Car Accessories Business 1389/2542 12 January 2001 – 11 January 2014
2083(2)/2548 7 January 2010 – 6 January 202
178 (2)/2549 Not Generate Revenue yet
1014(2)/2554 Not Generate Revenue yet
1902(2)/2556 Not Generate Revenue yet
Plastic Packaging Business 1588/2544 20 September 2003 – 19 September 2011
1139(2)/2552 26 October 2011 – 25 October 2019
1652(2)/2554 8 April 2014 – 7 April 2107
Research and Development 2023(4)/2549 14 September 2010 – 13 September 2018
No. of Shareholders As of 22 December 2014 No, of
Shareholder
No. of
Shares
% of paid up
capital
1. Strategic shareholders
1.1 Directors, manager, and executive management
Including related persons and associated persons
17 2,100,000,000 75.0
1.2 Shareholders who have a holding of above 5%
Including related persons
- - -
1.3 Controlling Shareholders - - -
2. Non-strategic shareholders hold > 1 trading unit 6,612 700,000,000 25.0
3. Non-strategic shareholders hold < 1 trading unit - - -
Total Shareholders 6,629 2,800,000,000 100.0
Major Shareholders As of 22 December 2014
Shareholders Pre IPO Post IPO
No.of Shares % No.of Shares %
1 Vitoorapakorn Group
Vitoorapakorn Holding Co., Ltd*
Mr. Pawat Vitoorapakor
Mr. Teerawat Vitoorapakorn
Mr. Chumnan Vitoorapakorn
Mr. Chalieo Vitoorapakorn
Mr. Ekawat Vitoorapakorn
Mr. Tanawat Vitoorapakorn
Miss Rungravee Vitoorapakorn
Miss Naowarat Vitoorapakorn
Miss Warapin Vitoorapakorn
Miss Ratipin Vitoorapakorn
Mrs. Tia Siu Buai
Miss Ratiporn Chaiyangyuen
Miss Wariya Theerajaruwat
Miss Nisna Theerajaruwat
Mr. Pawit Theerajaruwat
Mr. Tawin Theerajaruwat
2,100,000,000
1,679,999,800
92,400,100
63,000,100
58,800,000
54,600,000
50,400,000
29,400,000
14,700,000
14,700,000
8,400,000
8,400,000
8,400,000
8,400,000
2,100,000
2,100,000
2,100,000
2,100,000
75.0
60.0
3.3
2.3
2.1
2.0
1.8
1.1
0.5
0.5
0.3
0.3
0.3
0.3
0.1
0.1
0.1
0.1
2,100,000,000
1,679,999,800
92,400,100
63,000,100
58,800,000
54,600,000
50,400,000
29,400,000
14,700,000
14,700,000
8,400,000
8,400,000
8,400,000
8,400,000
2,100,000
2,100,000
2,100,000
2,100,000
100.0
80.0
4.0
3.0
2.8
2.6
2.4
1.4
0.7
0.7
0.4
0.4
0.4
0.4
0.1
0.1
0.1
0.1
Shareholders Pre IPO Post IPO
No.of Shares % No.of Shares %
2 Social Security Office 10,298,800 0.37 - -
3 Provident Fund of the EGAT 10,011,300 0.36 - -
4 MFC Dividend Mutual Fund 8,643,800 0.31 - -
5 Mr. Sompong Chonkadeedhumrong 8,080,000 0.29 - -
6 Thai Value Focus Dividend Mutual Fund 7,634,000 0.27 - -
7 Krung Sri Long Term Dividend Fund 7,020,200 0.25 - -
8 Thai Life Insurance Co., Ltd. 6,909,200 0.25 - -
9 Provident Fund of the PEA (Provincial
Electricity Authority) 6,881,200 0.25 - -
10 SCB Equity for living Mutual Fund 6,281,900 0.22 - -
11 Other 628,239,600 22.4 - -
Total 2,800,000,000 100.0 2,100,000,000 100.0
Note : List of Vitoorapakorn Holding’s Shareholder consists of Mr. Pawat Vitoorapakorn, Mr. Teerawat Vitoorapakorn, Mr. Chumnan
Vitoorapakorn, Mr. Chalieo Vitoorapakorn, Mr. Ekawat Vitoorapakorn, Mr. Tanawat Vitoorapakorn, Miss Rungravee Vitoorapakorn, Miss
Naowarat Vitoorapakorn, Miss Warapin Vitoorapakorn, Miss Ratipin Vitoorapakorn, Mrs. Tia Siu Buai, Miss Ratiporn Chaiyangyuen, Miss
Wariya Theerajaruwat, Miss Nisna Theerajaruwat, Mr. Pawit Theerajaruwat and Mr. Tawin Theerajaruwat
Foreign Shareholders
As of 22 December 2014, the Company has 40 foreign shareholders, totaling 26,667,900 shares 0.95% of total paid
up capital).
Note: The Company has the restriction regarding shareholding of foreigners in compliance with clause 10 of the Company’s regulation,
which states that share of the Company can be liberally transferred without constraint and shares hold by non-Thai individuals at any time
must not exceed forty-nine percent (49%) of total shares of the Company. Any shares transfer that may cause the proportion of
shareholding by non-Thai persons to exceed the limit of the percentage mentioned, the Company has the right to refuse such transfer of
the Company.
Board of Directors
As of 14 November 2013, the Board of Directors comprise of 9 directors as follow
Member of Board of
Directors
Position
(EPG)
Date of
Appointment
(EPG)
AFC ARK EPP
1. Mr. Vachara
Tuntariyanond
Chairman of the board of
director/ Independent
director/ Chairman of Risk
Management Committee
8 August 2013 - - -
2. Dr. Pawat
Vitoorapakorn
Vice-Chairman of the board
of director/ Chairman of
Executive Committee/ CEO
8 August 2013 Director Director Director
3. Mr. Teerawat
Vitoorapakorn
Director/ Member of
Executive Committee/
Nomination and
Remuneration Committee
8 August 2013 Director Director Director/ CEO
4. Mr. Chumnan
Vitoorapakorn
Director/ Member of
Executive Committee
/Member of Risk
Management Committee
8 August 2013 Director/
CEO Director Director
5. Assoc.Prof.Dr. Chalieo
Vitoorapakorn
Director/ Member of
Executive Committee/
Nomination and
Remuneration Committee
8 August 2013 Director Director Director
6. Mr. Ekawat
Vitoorapakorn
Director/ Member of
Executive Committee
/Member of Risk
Management Committee
8 August 2013 Director Director/ CEO Director
7. Mr. Chaiwat
Atsawintarangkun
Chairman of Audit
Committee/ Independent
director/ Member of Risk
Management Committee/
Chairman of Nomination and
Remuneration Committee
8 August 2013 - - -
8. Mr. Thanachai
Santichaikul
Audit Committee/
Independent director/
Nomination and
Remuneration Committee
8 August 2013 - - -
9. Mr. Panchai
Wattanachai
Audit Committee/
Independent director/
Nomination and
Remuneration Committee
8 August 2013 - - -
Note: The board of directors meeting No. 11/2013 held on 4 December 2013 passed a resolution appointing Miss Rungravee Vitoorapakorn as corporate
secretary
Audit Committee
As of 8 August 2013, the board of directors pass a resolution appointing the audit committee as follow
Members of the audit committee
1. Mr. Chaiwat Atsawintarangkun Chairman of Audit Committee
2. Mr. Thanachai Santichaikul Audit Committee
3. Mr. Panchai Wattanachai Audit Committee
Secretary to the audit committee: Mrs.Yaowaporn Ranorm
Scope of duties and responsibilities:
Shareholder Extraordinary Meeting No. 1/2013 held on 8 August 2013 passed a resolution appointing the scope
of duties and responsibilities of audit committee as follow
1.To verify that the Company has an accurate and adequate financial statements
2.To verify that the Company has proper and effective internal control and internal audit system and to
review the independence of internal audit function of the Company. To approve the appointment,
transfer or eliminate the head of internal audit function responsible for the internal audit of the
Company.
3.To review the company’s compliance with the law on securities and exchange, the regulations of the
Stock Exchange of Thailand, and the laws relating to the company’s business
4.To consider, select, propose an appointment, and propose remuneration to auditors of the Company
and meeting with the auditor without management attendance at least once a year
5.To consider related party transaction complying with the laws regarding securities and The Stock
Exchange of Thailand and regulations of The Stock Exchange of Thailand.
6.To prepare, and disclose in the company’s annual report, an Audit Committee’s report which must be
signed by the Chairman of the Audit Committee and consist of at least the following information:
a. an opinion on the accuracy, completeness and credibility of the company’s financial report;
b. an opinion on the adequacy of the company’s internal control system;
c. an opinion on the compliance with the law on securities and exchange, the regulations of the
Stock Exchange of Thailand, or the laws relating to the company’s business;
d. an opinion on the suitability of an auditor;
e. an opinion on the transactions that may lead to conflicts of interests;
f. the number of the Audit Committee meetings, and the attendance at such meetings by each
committee member;
g. an opinion or overview of comments received by the Audit Committee from its performance of
duties in accordance with the charter; and
h. Other transactions which, according to the Audit Committee’s opinion, should be known to the
shareholders and general investors
7.Perform any other act as assigned by the company’s board of directors, with the approval of the Audit
Committee. Audit Committee will directly report to the Board of Directors of the Company
The Number of year in duty
� Chairman of Audit Committee 3 years
� Audit Committee 3 years
Listing Condition None
Silent Period
Shareholders, who own common shares before the Company’s public offering, holding 1,540,000, 000 shares or 55% of
paid up capital after the initial public offering certify to the Stock Exchange of Thailand that their shares will not be sold
for the period of one year from the first trading date. Upon the expiry of 6 months period of the prescribed time, those
shareholders will be allowed to sell 25% of the total amount of shares prohibited for sale and the rest after one year.
Relaxation from the Stock
Exchange
None
Statistic Summary
Financial Year End
(End
31 Mar)
Revenue
(THB mm)
Profit
(Loss)
(THB
mm)
EPS(Loss)
(THB/Share)
Dividend
(THB/Share)
Par value per
share*
(THB/Share)
Payout
Ratio
(%)
2012 5,627.7 480.3 0.2 0.2 1.65 94.9
2012 6,750.1 787.2 0.4 1.1 1.12 286.6
2014 6,591.8 630.4 0.3 0.0 1.35 0.0
1H2015 (End 31 Sept
2014) (Reviewed) 3,465.4 301.8 0.1 0.1 1.40 66.1
Note: Par value 1.00 THB/share calculated from paid up capital of 2,800 million shares
The Securities and Exchange Commission
Eastern Polymer Group Public Company Limited
Statement of Financial Position
For the Year Ended 30 April 2011 to 31 March 2014 and For the Half Year Ended 30 September 2014
In FY 2012, the Company had restructured the holding of its company under control and form the holding company;
therefore, the Company prepares performa financial statement to simulate a current holding structure since 1 April
2011. Financial Statement for FY 2012-2014 and 1H2015 are reviewed by Mr. Sudwin Panyawong, SEC listed auditor
no. 3534 of Pricewaterhouse Cooper ABAR
FY 2012
(Apr 11 - Mar 12)
FY 2013
(Apr 12 - Mar 13)
FY 2014
(Apr 13 - Mar 14)
1H2015
(Apr 14 - Sept 14)
THB mm % THB mm % THB mm % THB mm %
Assets
Current assets
Cash and cash equivalents 1,197.2 10.8 103.6 1.0 140.5 1.3 138.1 1.2
Short-term loan to related parties 107.0 1.0 0.0 0.0 0.0 0.0 0.0 0.0
Trade and other accounts receivable (net) 1,248.0 11.2 1,351.2 12.6 1,145.7 10.5 1,191.6 10.7
Inventories (net) 1,776.0 16.0 1,767.2 16.5 1,782.4 16.4 1,909.6 17.2
Value added tax 45.4 0.4 137.4 1.3 22.2 0.2 43.7 0.4
Current portion of land leasehold right
(net)
0.2 0.0 0.2 0.0 0.2 0.0 0.2 0.0
Other current assets 6.4 0.1 3.9 0.0 3.4 0.0 5.3 0.1
Available for sale associated companies 242.8 2.2 0.0 0.0 0.0 0.0 0.0 0.0
Total current assets 4,623.1 41.6 3,363.5 31.5 3,094.4 28.4 3,288.6 29.6
Non-current assets
Restricted deposits at financial institutions 429.9 3.9 444.8 4.2 464.5 4.3 460.0 4.2
Available-for-sale investments 0.1 0.0 0.1 0.0 0.0 0.0 0.1 0.0
Investments in associates 1,280.1 11.5 1,460.3 13.7 1,576.0 14.5 1,596.3 14.4
Investments in subsidiaries 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other long term investment 3.7 0.0 0.0 0.0 0.0 0.0 20.4 0.2
Long-term loan to related parties 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Property, plant and equipment (net) 4,418.7 39.7 5,132.9 48.0 5,475.8 50.2 5,463.0 49.2
Intangible assets (net) 108.8 1.0 82.3 0.8 71.5 0.7 68.1 0.6
Land leasehold right (net) 7.8 0.1 7.4 0.1 7.8 0.1 7.8 0.1
Deferred income tax assets (net) 226.5 2.0 177.3 1.7 175.4 1.6 158.2 1.4
Other non-current assets 18.9 0.2 18.2 0.2 33.6 0.3 34.2 0.3
Total non-current assets 6,494.6 58.4 7,323.4 68.5 7,804.6 71.6 7,808.1 70.4
FY 2012
(Apr 11 - Mar 12)
FY 2013
(Apr 12 - Mar 13)
FY 2014
(Apr 13 - Mar 14)
1H2015
(Apr 14 - Sept 14)
THB mm % THB mm % THB mm % THB mm %
Total assets 11,117.7 100.0 10,686.9 100.0 10,898.9 100.0 11,096.7 100.00
Liabilities and shareholders’ equity
Current liabilities
Bank overdrafts and short-term loans from
financial institutions
3,689.4 33.2 4,818.4 45.1 4,425.3 40.6 3,006.1 27.1
Trade and other accounts payable 828.8 7.5 878.0 8.2 744.2 6.8 864.0 7.8
Short-term loan from related parties 844.4 7.6 13.3 0.1 27.0 0.2 24.8 0.2
Current portions of long-term loans from
financial institutions
202.6 1.8 339.9 3.2 431.3 4.0 440.5 4.0
Current portions of finance lease liabilities
(net)
0.5 0.0 2.0 0.0 4.2 0.0 4.9 0.0
Accrued income tax 3.2 0.0 11.1 0.1 22.3 0.2 12.1 0.1
Value added tax 0.0 0.0 0.0 0.0 2.0 0.0 1.0 0.0
Other current liabilities 8.3 0.1 11.8 0.1 9.1 0.1 13.9 0.1
Total current liabilities 5,577.1 50.2 6,074.5 56.8 5,665.4 52.0 4,367.4 39.4
Non-current liabilities
Long-term loans from financial institutions 869.6 7.8 1,421.8 13.3 1,359.3 12.5 2,712.0 24.4
Finance lease liabilities (net) 0.8 0.0 2.9 0.0 4.6 0.0 4.0 0.0
Employee benefit obligations 48.3 0.4 64.2 0.6 87.3 0.8 90.0 0.8
Total non-current liabilities 918.8 8.3 1,489.0 13.9 1,451.1 13.3 2,806.0 25.3
Total liabilities 6,495.9 58.4 7,563.5 70.8 7,116.5 65.3 7,173.4 64.6
Shareholders’ equity
Share capital 2,100.0 18.9 2,100.0 19.7 2,800.0 25.7 2,800.0 25.3
Issued and fully paid-up share capital 2,100.0 18.9 2,100.0 19.7 2,100.0 19.3 2,100.0 18.9
Retained earnings
- Appropriated – legal reserve 36.7 0.3 50.0 0.5 50.0 0.5 50.0 0.5
- Unappropriated 1,824.1 16.4 341.7 3.2 909.3 8.3 1,011.5 9.1
Surplus from business combination under
common control
638.7 5.7 638.7 6.0 701.7 6.4 701.7 6.3
Other components of shareholders’ equity 22.3 0.2 -7.0 -0.1 20.5 0.2 59.0 0.5
Equity attributable to owners of the parent 4,621.8 41.6 3,123.4 29.2 3,781.5 34.7 3,922.2 35.4
Non-controlling interests - - - - 0.9 0.0 1.1 0.0
Total shareholders’ equity 4,621.8 41.6 3,123.4 29.2 3,782.5 34.7 3,923.3 35.4
Total liabilities and shareholders’ equity 11,117.7 100.0 10,686.9 100.0 10,898.9 100.0 11,096.7 100.00
Eastern Polymer Group Public Company Limited
Statements of Comprehensive Income
For the Year Ended 30 April 2011 to 31 March 2014 and For the Half Year Ended 30 September 2013 and 2014
FY 2012
(Apr 11 - Mar 12)
FY 2013
(Apr 12 - Mar 13)
FY 2014
(Apr 13 - Mar 14)
1H2015
(Apr 14 - Sept 14)
FY 2012
(Apr 11 - Mar 12)
THB mm % THB mm % THB mm % THB mm % THB mm %
Revenue from sales of goods 5,627.7 100.0 6,750.1 100.0 6,591.8 100.0 3,360.0 100.0 3,465.37 100
Revenue from services - - 0.0 0.0 1.9 0.0 0.4 0.0 0.9 0
FY 2012
(Apr 11 - Mar 12)
FY 2013
(Apr 12 - Mar 13)
FY 2014
(Apr 13 - Mar 14)
1H2015
(Apr 14 - Sept 14)
FY 2012
(Apr 11 - Mar 12)
THB mm % THB mm % THB mm % THB mm % THB mm %
Cost of goods sold (4,048.7) (71.9) (4,923.8) (72.9) (4,870.2) (73.9) (2449.5) (72.9) (2,577.8) (74.4)
Cost of services - - (2.1) (0.0) (1.5) (0.0) (0.3) 0.0 (0.6) 0
Gross profit 1,579.0 28.1 1,824.3 27.0 1,722.1 26.1 910.6 27.1 887.8 25.6
Profit sharing from the associate
companies
- - 117.2 1.7 0.0 0.0 0.0 0.0 0.0 0.0
Other income 20.8 0.4 50.0 0.7 63.2 1.0 50.8 1.5 15.7 0.5
Profit before expenses 1,599.9 28.4 1,991.5 29.5 1,785.2 27.1 963.7 28.6 903.6 26.1
Selling expenses (471.3) (8.4) (571.2) (8.5) (552.7) (8.4) (273.2) (8.1) (279.8) (8.1)
Administrative expenses (709.2) (12.6) (630.8) (9.3) (592.8) (9.0) (291.1) (8.7) (248.9) (7.2)
Other gains (losses) – net gain (loss)
on exchange rate
56.1 1.0 (31.5) -0.5 96.8 1.5 62.1 1.8 (12.2) (0.4)
Other expenses (4.9) (0.1) (4.2) (0.1) (1.3) 0.0 0.0 0.0 (6.6) (0.2)
Finance cost (252.4) (4.5) (239.9) (3.6) (356.2) (5.4) (189.0) (5.6) (122.5) (3.5)
Share profit from investments in
associates
211.0 3.7 337.2 5.0 305.7 4.6 170.4 5.1 99.6 2.9
Profit (loss) before income tax 429.1 7.6 851.1 12.6 684.6 10.4 440.7 13.1 333.1 9.6
Income tax 51.2 0.9 (63.9) (0.9) (54.2) (0.8) (25.2) (0.8) (31.3) (0.9)
Net profit (loss) for the period 480.3 8.5 787.2 11.7 630.4 9.6 415.5 12.4 301.8 8.7
Eastern Polymer Group Public Company Limited
Statement of Cash Flows
For the Year Ended 30 April 2011 to 31 March 2014 and For the Half Year Ended 30 September 2013 and 2014
FY 2012
(Apr 11 - Mar
12)
FY 2013
(Apr 12 - Mar
13)
FY 2014
(Apr 13 - Mar
14)
1H2015
(Apr 14 - Sept
14)
FY 2012
(Apr 11 - Mar
12)
THB mm. THB mm. THB mm. THB mm. THB mm.
Cash flows from operating activities:
Profit (loss) before income tax 429.1 851.1 684.6 440.7 333.1
Adjustments 0.0 0.0 0.0 0.0 0.0
(Reversal of) allowance for doubtful accounts 13.9 5.1 5.9 6.0 2.7
(Reversal of) allowance for obsolete and slow moving
inventories
0.0 0.0 19.4 17.5 3.2
(Reversal of) allowance for inventories cost in excess of net
realizable value
4.6 7.0 6.7 - (0.3)
Allowance for impairment of other long term investment 1.7 3.3 0.0 0.0 0.0
Net (gain) loss on exchange rates – unrealized 7.7 (59.2) 29.5 28.3 3.6
Net gain on sales of investment in associates 0.0 0.0 (26.8) (26.8) 0.0
Profit from divesting other long term investment 0.0 (1.1) 0.0 0.0 0.0
Share of (profit) from investments in associates (211.0) (337.2) (305.7) (170.5) (99.6)
Profit from divesting stake in associated companies 0.0 (117.2) 0.0 0.0 0.0
Depreciation 269.0 344.5 421.5 199.8 233.2
Amortization 18.0 14.0 19.1 9.2 8.8
Net loss on written-off of property, plant and equipment 0.1 13.7 1.3 - 6.6
Net (gain) loss on disposals of property, plant and equipment 1.8 (10.7) (7.9) (7.5) 0.2
Employee benefit obligations 9.1 15.9 24.5 5.3 7.8
Dividend income 0.0 0.0 0.0 0.0 0.0
Interest income (12.5) (15.4) (11.1) (6.2) (4.8)
Finance cost 244.7 299.1 326.8 160.7 118.9
Profit (loss) before income tax after adjustments 776.2 1,013.0 1,187.9 656.6 613.3
Change in operating assets and liabilities
Increase (decrease) in operating assets
Trade and other accounts receivable (225.8) (109.6) 172.3 132.8 (78.2)
Inventories (376.8) 1.8 (41.3) (115.5) (130.1)
Value added tax (33.4) (91.9) 117.2 104.8 (22.5)
Other current assets (5.0) 2.6 0.5 3.3 (2.0)
Other non-current assets 1.0 0.7 (0.6) (9.1) (0.7)
Increase (decrease) in operating liabilities 0.0 0.0 0.0 0.0 0.0
Trade and other accounts payable (123.7) (5.4) (136.3) (52.4) 112.4
Other current liabilities 5.3 3.5 (2.6) (7.9) 4.8
Employee benefit obligations paid (3.8) 0.0 (2.1) - (5.1)
Cash generated from (used in) operating activities before
interest income received, finance cost paid and income tax paid
14.0 814.7 1,294.9 712.7 492.1
Interest income received 8.2 16.6 11.6 8.7 1.1
Finance cost paid – interest expense (234.4) (304.0) (360.2) (196.1) (121.7)
Income tax paid 1.5 (6.6) (30.9) (25.4) (24.5)
Net cash generated from (used in) operating activities (210.6) 520.7 915.4 499.9 347.0
FY 2012
(Apr 11 - Mar
12)
FY 2013
(Apr 12 - Mar
13)
FY 2014
(Apr 13 - Mar
14)
1H2015
(Apr 14 - Sept
14)
FY 2012
(Apr 11 - Mar
12)
THB mm. THB mm. THB mm. THB mm. THB mm.
Cash flows from investing activities
(Increase) decrease in restricted deposits at financial institutions (12.5) (14.9) (19.7) (11.5) 4.5
Cash received from divesting stake in subsidiaries 0.0 0.0 0.0 0.0 0.0
Cash paid for maintaining stake in subsidiaries (15.0) (31.0) 0.0 0.0 0.0
Dividend received from associated companies which available
for sale
0.0 52.5 0.0 0.0 0.0
Cash received from divesting associated companies which
available for sale
0.0 338.5 0.0 0.0 0.0
Cash received from divesting long term investment 24.5 1.5 0.0 0.0 0.0
Cash paid for purchase of investments in associates (38.1) (23.1) (35.5) (12.7) (12.8)
Cash paid for the companies under common control basis (712.8) 0.0 0.0 0.0 0.0
Cash paid for purchase of property, plant and equipment (889.2) (1,694.5) (735.9) (425.9) (232.4)
Cash paid for purchase of intangible assets (4.3) (0.7) (8.0) (1.5) (5.5)
Cash received from disposals of property, plant and equipment 168.7 691.9 39.1 41.2 19.2
Short-term loan to subsidiaries 0.0 0.0 0.0 0.0 0.0
- Proceeds (78.0) (12.0) (127.0) (111.0) 0.0
- Repayments 13.0 119.0 127.0 0.0 0.0
Cash paid for long-term lending to related partiesเ 0.0 0.0 0.0 0.0 0.0
Dividend receipts from investments in associates 323.2 163.8 220.2 215.3 111.0
Profit sharing from long-term investment 0.0 0.0 0.0 0.0 0.0
Net cash (used in) generated from used in investing
activities
(1,220.5) (409.1) (539.8) (305.1) (116.1)
Cash flows from financing activities
Increase (decrease) in bank overdrafts and short-term loans
from financial institutions
740.5 1,188.2 (393.1) (217.7) 9.8
Short-term loans from related parties 0.0 0.0 0.0 0.0 0.0
- Proceeds 1,539.5 1,840.4 37.2 0.0 0.0
- Repayments (948.9) (2,670.2) (25.3) (13.3) (2.4)
Long-term loans from financial institutions – Proceeds 232.2 1,351.4 396.3 227.1 136.2
Long-term loans from financial institutions – Repayments (222.1) (660.0) (372.2) (157.3) (202.8)
Finance lease liabilities payments (1.8) (1.4) (4.3) (3.8) (2.3)
Cash receive from capital increase 1,700.0 0.0 0.0 0.0 0.0
Dividends paid (455.7) (2,256.3) 0.0 0.0 (199.5)
Cash receive from non-controlling interest 0.0 0.0 1.2 0.0 0.0
Net cash (used in) financing activities 2,583.7 (1,208.0) (360.3) (165.0) (261.0)
Translation differences 2.2 2.8 21.5 7.3 27.6
Net increase (decrease) in cash and cash equivalents 1,154.7 (1,093.6) 36.9 37.0 (2.4)
Cash and cash equivalents at the beginning of the period 42.5 1,197.2 103.6 140.5 177.5
Cash and cash equivalents at the end of the period 1,197.2 103.6 140.5 177.5 175.1
Prepared by Siam Commercial Bank Public Company Limited
Eastern Polymer Group Public Company Limited
Teerwat Vitoorapakorn Chumnarn Vitoorapakorn
Mr. Teerawat Vitoorapakorn Mr. Chumnarn Vitoorapakorn
Director Director