sat: annual report 2010 eng

2010 | Somboon Advance Technology Public Co., Ltd. | 1

Contents

2 Financial Highlights3 Board of Directors’ Report4 Vision & Mission5 Company’s General information6 Nature of Business Operation8 Market Share9 SBG and sustainable development27 Competition and Industrial Trend29 Risk Factors33 Major Changes and Developments in Past 3 Years 38 Major Shareholders39 Organization Chart40 Management Structure49 Board of Directors and Management57 Shareholding of the Board of Directors and Management58 Remuneration of the Board of Directors and Management62 Internal Control66 Related Transactions70 Report of the Nomination and Compensation Committee71 Report of the Board of Directors’ Responsibility in the Financial Statements72 Report of the Audit and Corporate Governance Committee75 Management’s Discussion and Analysis79 Report of Independent Auditor80 Financial Statements and Notes

2 | Annual Report | 2010

Fianancial Highlight

2010 2008 20062009 2007 2005

For the Fiscal year ended December 31

Consolidated FinancialStatements

Separate FinancialStatements

Fianancial Highlight

Stock Data

Par value (Baht)

Book value (Baht)

Earning per share (Baht) *

Operating

Sales revenue

Total income

Net profit

Balance Sheet (Thousand Baht)

Current assets

Total assets

Current liabilities

Total liabilities

Paid-up capital

Shareholders’ equity

Financial Ratio

Returns on shareholders’ equity (%)

Returns on fixed assets (%)

Returns on assets (%)

Gross profit (%)

Current assets ratio to items of current (times)

Liquidity ratio to liabilities (times)

Debt ratio to shareholders’ equity (times)

Note: * In year 2010 the use of the weighting average ordinary share numbers of 311.047 million shares In year 2009 the use of the weighting average ordinary share numbers of 300 million shares In year 2008 the use of the weighting average ordinary share numbers of 300 million shares

1.00

9.56

1.05

4,295,430

4,347,778

314,438

1,594,717

6,191,911

1,601,149

3,323,735

300,000

2,868,176

11.58%

17.74%

5.01%

17.86%

1.00

0.73

1.16

1.00

6.76

0.67

1,437,608

1,636,154

202,264

930,349

3,901,455

564,600

1,874,405

300,000

2,027,050

10.50%

27.79%

5.18%

23.24%

1.65

0.80

0.92

1.00

6.09

1.10

2,007,280

2,219,994

330,838

873,618

3,902,408

793,128

2,076,055

300,000

1,826,353

18.97%

41.38%

8.67%

25.59%

1.10

0.51

1.14

1.00

8.54

2.12

5,814,397

5,934,810

634,677

1,829,774

6,360,469

2,105,530

3,799,627

300,000

2,560,842

27.55%

26.62%

10.93%

19.94%

0.87

0.53

1.48

1.00

12.28

2.48

6,263,137

6,416,331

771,343

2,758,444

8,077,170

1,760,952

3,901,988

339,923

4,175,183

21.90%

27.26%

10.81%

19.82%

156.65%

1.21

0.93

1.00

8.85

1.40

2,172,200

2,386,046

436,569

1,302,920

4,312,917

522,982

1,305,951

339,923

3,006,966

17.34%

51.27%

10.63%

27.74%

2.49

1.62

0.43


Board of Directors’ Report

In 2010, Somboon Advance Technology Public Company Limited possessed outstanding performance compared with previous year’s due to world’s economic recovery which resulted in continuous growth of Thailand’s automobile and spare parts industries. Total cars’ manufacturing stood at 1,645,304 units, or increasing 64.63 percent from 2010. Manufacturing for sale in domestic market stood at 749,449 units, or increasing 61.59 percent from previous year’s. Manufacturing for export were 895,855 units, or increasing 67.26 percent. The Company’s

total sales escalated 46 percent.

Based on overall economic recovery in 2010, it resulted in the Company’s performance improving from previous year. It earned net profit amounting to Baht 771 million, increasing at a record 145 percent. Under continuous growing of the business, the Company’s Board of Directors emphasized on business operation to ensure sustainable growth with transparency, fairness, responsibility and maintaining benefit of all interested groups, including overall society. Meanwhile, in 2010, the Company participated in survey and develop listed companies project in term of good governance, belonging to the Stock Exchange of Thailand, in cooperation with Tris Corporation Ltd.. The Company expressed intention to participate in the project as the first listed Company. It was a thing to ensure that the Organization’s business operation in term of Organization’s good governance has led to seriously concrete practice.

With determination to be Organization’s good governance, it resulted in the Company being awarded with various important awards, such as championship award as outstanding Organization, or NACC Integrity Awards for private business Organization, from Office of the National Anti-Corruption Commission. (NACC), SET Awards 2010 for Top Corporate Governance Report Awards. From the Stock Exchange of Thailand, for 2 consecutive years. The Company was assessed for survey of corporate governance project, from Thai Institute of Directors, as “excellent” for 3 consecutive years etc.

Under possible current volatile economic situation, the Company’s Board of Directors is not at ease to emphasize on monitoring the situation. It realizes on changes which may arise and affect business operation. The Company has adopted principle of sustainable business operation under balance in terms of performance and paying attention to environment, society, community, and adopting international standard risk management as guidelines for business operation to create immunity preventing uncertainty. The Company is also prepared for changes from both external and internal factors. Moreover, the Company has set social target in connection with sustainable development, creating equality and fairness for society, personnel development to be competent and behaved people with virtue, ethics and better living condition, together with development of favorable work environment.

On behalf of the Company’s Board of Directors, we express appreciation for all interested persons, as well as the Company’s employees and executives. You are assured that the Company’s Board of Directors will cling to

corporate governance to continuously grow with balanced and sustainable Organization in long term.

(Mr. Weerayuth Kitapanich) President

(Mr. Sansern Wongcha-um)Chairman

Board of Directors’ Report


Vision & Mission

VisionTo be a leader in quality automotive parts manufacturing in the ASEAN region, to provide end-to-end services, and to grow together with customers

Mission�� !�� "�� !�� "��

control system, and corporate social system are in place

Vision & Mission


Symbol : SATRegistered Capital : 300 Million BahtBusiness : Motor vehicle part manufacturing. The major

products are axle shaft for selling to “OEM” (Original Equipment Manufacturer) inside and outside the kingdom and to invest in other companies who are engaging in the motor vehicle part manufacturing for more product diversification

Head Office and plant : 129 Moo 2, 15th KM. Bangna-Trad Road, Bangchalong Sub-district, Bangplee District, Samutprakarn

: 300/100 Moo 1 Eastern Seaboard Industrial Park, Tasit Sub-district, Plueak Daeng District, Rayong

Company’s registration No. : PCL. 0107574700660Website : www.satpcl.co.thTelephone : 02-728-8500Fax. : 02-728-8513, 02-728-8517

Company’s General Information

Company’s General Information


Nature of Business Operation

The Company and subsidiaries has been engaging in the manufacturing of the parts of motor vehicle industry such as passenger car, pick-up, trucks and electric appliance industry. The main major customers are the original equipment manufacturer (“OEM”) with the long term purchase contract and the replacement equipment manufacturer (“REM”)

The operation of each company in the group has the policy to growing together with customers, focus on creating values to the organization and stakeholder with differential products. In term of operation, each company shall operate its business like the business unit (“BU”) of the organization. The Company’s Directors shall act to set up the overall policy to enable each company in the group, meaning to SAT, SBM, BSK and ICP and the all vice president have to report on their performances to the president. Each company had fixed goal, strategy and together following up the performance through the joint regular meetings of the executive committee.

The shareholding structure of the Companyas at March 15, 2011

Suchiyoshi Somboon Coated Sand Co., Ltd.*

21.25%

Somboon Advance Technology Public Co., Ltd.

(SAT)

99.99%

Somboon Malleable IronIndustrial Co., Ltd.

(SBM)

99.99%

International CastingProducts Co.,Ltd.

(ICP)

Bangkok SpringIndustrial Co., Ltd

(BSK)

99.99%

100%

25.49% 24.44% 50.07%

Note: * No interest persons are holding shares in the related companies exceeding 10%


Yanada Somboon Co., Ltd.*

Nishinbo Somboon Automotive Co., Ltd.*

Somboon Somic Manufacturing Co. Ltd .*

20.0%2.90%1.80%

Somboon Holding Co., Ltd. Small Individual ShareholdersKitaphanich Family


Income Structure divided in accordance with productsThe income structures of the Company and subsidiaries divided into major products in 2008, 2009 and 2010 can be classified as following;

Note: * Other products such as spring shaft, valve, push rod, brackets and other products

Axle shaft SAT 2,080 32 1,376 32 1,846 31

Leaf Spring BSK 99.99 570 9 461 11 643 11

Disc& Drum Brake SBM 99.99 615 10 471 11 700 12

Stabilizer Bar BSK 99.99 491 8 331 8 383 6

Coil Spring BSK 99.99 500 8 310 7 388 7

Exhaust Manifold SBM 99.99 234 4 152 3 251 4

Fly wheel& Comp SBM 99.99 387 6 263 6 418 7

Agricultural engine parts SBM 99.99 491 8 234 5 - -

Others* 895 13 698 16 1,185 20

Total income from sale 6,263 98 4,296 99 5,814 98

Other incomes 153 2 52 1 121 2

Total income 6,416 100 4,348 100 5,935 100

Products%of

shareholding

Balance Sheet2010

Balance Sheet2009

Balance Sheet2008

Income % Income % Income %

Operatedby



Market Share of Major Products

Market Share of Major Products


SBG and sustainable development


The Company’s director aims for the “good governance organization” and gives important on sustainable business, with transparency and responsibility to the stakeholders and society at large as well as develops the workforce to be moral and promote the knowledge and good quality of life as well as develop the better environment in accordance with the business direction.

1. Corporate Governance

The Company’s director applies the sufficient economic for the sustainable business as a guideline on business operation to create the protection for business operation in accordance with the guideline on good governance and truly a good organization. The Company promotes the knowledge and awareness of good, careful and honest business conduct to the employee at all level by providing the training course “CG and the participate for sustainable” for 3 consecutive years.

The Company’s director also specifies the policy on good governance in the handbook “Policy on Corporate Governance” Business Ethics and Good Practice handbook to be used as a guideline for directors, executives and employees as well as publicized in the Company’s website.

In 2010, the Company had participated in the important projects as follow;

1. Participate in the investigate and develop the registered company in terms of good governance for 2010 arranged by the Stock Exchange of Thailand cooperate with the Tris Corporation Co., Ltd. The Company was the first company accepted to participate in this project to raise the level of corporate governance to be more concrete. The issue from the investigation was complied in the “Policy on Corporate Governance” handbook and Business Ethics and Good Practice handbook. The Company’s directors have already approved of using these handbooks and they were effective since January 1, 2011.

Revised issues were such as the presentation of information and authorized person for

the information presentation, prevention of corruption regarding accepting bribes, exercise of the political rights, channel and process on making claims and suggestion and discipline in the “Business Ethics” handbook.

2. Participate in Collective Action Coalition organized by Thai private sectors. The Company was one of 27 companies with the intention to protect against bribery together with the government sector, National Anti Corruption Commission (NACC), Thai Institute of Directors, Thai Chamber of Commerce, Foreign Chamber of Commerce, Thai Listed Companies Association, Thai Banker’s Association and Federal of Thai Capital Markets Association.



The business practices in accordance with the good corporate governance guideline has resulted in the Company to receive the following award in 2010

SOMBOON GROUP

1. Best Organization for the integrity in private sector from NACC Integrity Award 2010 which was held for the first year by the National Anti Corruption Commission

2. Top Corporate Governance Report Awards from SET Award 2010, which the Companies won for two years consecutively.

3. Top evaluation score of 100 point from the shareholders’ meeting 2010

4. Become 1 of 70 listed companies receiving the

Excellent CG Scoring from the corporate

governance reporting by listed companies in 2010 which was the third consecutive years. The Company received the excellent score from every categories

and when compared with the top score and average score in terms of both overall and each categories

with 480 companies in total, the Company ’ score is at the above average level.

5. Receive the award from complying with CSR-DIW from Department of Industrial Work, the Ministry of

Industry.

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In 2010, the Company complied with the corporate governance in 5 categories namely, shareholders’ right, fair shareholders practices, Stakeholders’ role, information presentation and transparency, and directors’ responsibility as details follow;

1. Shareholders’ right: The Company gave the opportunity to the shareholders to participate in the corporate governance and share their opinion on business operation. This year, the Company added the good conduct on publicizing on the shareholders’ meeting report in order to provide the information to shareholders and enabling them to investigate the correctness via SET channel and Company’s website within 14 days from the meeting date as well as conduction on shareholders’ rights for sustainability on the following matters�� #�� !��

during October to December 2008 and send the questions regarding ordinary shareholder’s meeting agenda for 2010 during March 19, 2010 to April 9,2010. The shareholders was notified by the news system of the SET as well as announced the rules and processes in the company’s website at www.satpcl.co.th in the investor relations section under shareholders’ meeting topic.

�� $�� '�� the voting card.

�� '�� as well as present the policy and guideline on remuneration specification.

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information the shareholders in the ordinary shareholders’ meeting for 2010. The Company also provided the opportunity for shareholders to question and give opinion at the meeting. The details were recorded in the shareholders’ meeting report.

2. Fair shareholders practice: The Company had the policy for fair shareholders’ practice on both major and minor shareholders, institutional investor or foreign shareholders to create the true fairness such as arrange the shareholders’ meeting, specify the process to facilitate shareholders to join the meeting easily, protect shareholders’ from being exploited and providing the control power to shareholder, etc. The Company practiced the shareholders’ practices for sustainability on the following matters�� >� �!�� ?��!��

2010 by announcing the information in the SET news channel and announcing the process on www.satpcl.co.th in the investor relation under shareholder’s meeting.

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independently for each period with the appointment letter in order for unavailable shareholders to give the power of attorney to others to join and vote as well as publicizing these in the Company’s website so that shareholders could easily download.



�� $�<XZX�� <��'�� '�� meeting on April 22,2010 and Extra ordinary shareholder’s meeting on July, 20 2010. Ten directors in total had joined the meeting and assigned the Thailand Securities Depositories Co., Ltd which was the Company’s registrar to process on delivering invitation to shareholders 21 days prior and publicized it in both Thai and English on the Company’s website 30 days prior to the meeting for the shareholders to study.

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from being in the position of director, executive or employee for private use or for competing with the Company or related business as well as not applying the internal information for stock trading purpose. The director and executive must report their shares holding at first and report the changes in shares according to the section 59 of Stock and Stock Market Act B.E. 2551 (A.D. 2008)

�� +��'�� subsidiaries and executive to report their equity and related person’s equity according to the section 89/14 of Stock and Stock Market Act B.E. 2551 (A.D. 2008). They are also required to revise the report within January each year and/or every time the information is changed by submitting to the Company’s secretary within 7 working days. The guideline is also extended to be enforced on the employee at the management level of the Company and subsidiaries from the department manager and above and related employees below the manager level. The deputy director of the section agrees on reporting according to the policy. In 2010, there were 74 reports and 1 transaction with the Company’s equity by the employee at the head worker level. It was also registered and report to the chairman and the chairman of the corporate governance.

3. Stakeholders’ role: The Company gives a high importance on the responsible to the environment and society as well as other stakeholders. The Company is aware of role and importance of every stakeholder. In 2010, the Company had added the good conduct by developing the policy on preventing the executive and employee to use the pirate software, copying the copyright software, violate the human right, as well as guideline on anit-fraud and no bribery for the Company’s benefit. The Company also promotes the efficiency energy consumption, safety and environmentally friendly practices to the employee, develop the community and society to the stakeholders and adhere to and develop the fair stakeholder practices such as�� ?�� [� ��

partner, environment and society in the Business Ethics handbook and desired working practices as well as giving importance on different social activities.

�� !�� \trade partner/debtor environment and shareholder.

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�� \� �� committee as well as specifying the channel to receive the complaints regarding corporate governance from employees through the Company’s secretary by reporting the corporate governance to the audit committee quarterly.

4. Presentation of information and transparency: The Company gives important on the presentation of significant information of the Company regarding their correct, timely and transparent manner such as shareholder’s structure, business operation, financial results, governance, business policy, investigation and control process and various channels for the presentation of information. In 2010, the Company included the details on presentation of directors and executive’s information such as name, position, education background, shares held, working experience and picture. The Company also improved the website by categorized the presentation, rules and guideline on good governance according to the law, regulation, and SET and Securities and Exchange Commission’s regulation such as presentation of agenda for the shareholders’ meeting, guideline on nominating the director and submitting the questions regarding the shareholder’s meeting agenda under the same category, and separate from the news for shareholders and stakeholders to be able to easily access information as well as presentation of information and transparency for sustainability in the following matters:�� ]�!�� ]�� "��'�� \�] ��

Exchange of Thailand within the specified period of time and no transaction reported with condition by the auditor.

�� !�� statement, policy on corporate governance and business ethics, social responsibility policy, analysis from the analyst from many institution, business type, annual report, annual report presentation form, shareholder’s meeting, names of major shareholders, announcement from the SET and publication.

�� +�� !�� !��able to access the information via the investor relations as a contact channel and communicate various information such as organizing the analyst meeting and publicizing the operating result quarterly as well as organizing the Road Show domestically and internationally.

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specify the guideline on directors and executives share purchasing to the chairman every time via the Company’s secretary.

�� of interests as followa. The directors and executives needs to report on their equity every time the transaction

is made and assign the Company’ s secretary to investigate the transaction regarding the directors and executives’ equity at least once a year and report to the president and chairman of the auditor committee.



b. The manager at the department manager level and above needs to report the equity every time the transaction is made and assign the Company’ s secretary to investigate the transaction regarding the manger’ equity at least once a year and report to the president and chairman of the auditor committee.

�� @�� !�� ] ��"��+��]�� Exchange Commission.

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5. Directors’ responsibility: The Company gives high important on directors’ role and responsibility to protect the shareholders and stakeholders’ interests such as create the business strategy, investigate business operation, conduct the transparency business. However, the Company is conducting on the following matters in order to create the sustainability:�� +��'�� Q�+��

specified the number of the directors appropriated with the business size. Currently, the Company has 10 directors, 3 of them are the Company’s executives, and 7 of non executives. One out of seven non-executives is the nominator, and 5 out of 7 are independent committee. Each of them takes the position for 3 years and does not have the restriction period.

�� !�� but do not restrict the period. All 10 committees can take the position in the listed companies not exceed 5 companies according to the guideline on corporate governance.

�� +��'�� !�� !�� to be in accordance with the business direction in writing and applied as a operation guidelines from January 1, 2011 as follows;1. The chairman of the director can take the position at other company with the approval from

the Company’s directors. 2. Establish the channel for claim for suggestion on any matters as well as report on the action

that violates the law. The employee and stakeholder can give their opinion independently and apply the opinion to the management process. They can also complain to the independent committee directly by e-mail or post to the Company’s secretary.

3. The business ethic handbook is enforced on the director, executive and all employees to seriously comply with. If violating, it is accounted for violating discipline according to the regulation on human resources management

4. Create the policy on conflict of interests in the business ethic manual to prevent the self-benefit action. a. No record on violating the Securities and Exchange Commission’s regulation/ Stock

Exchange of Thailand.b. Clearly separate the roles, authority and duty of the president and chairman of the committee

as they are different person. Also, assign the president, managing director and sub-committeec. Organize the informal meeting without management to get the independent opinion to

improve the managing process



d. The Company’s director together with the management team creates the vision, mission, strategy, goal, business plan and budget. The opinion can be expressed freely in the workshop for the Company’s directors and top executives to direct the Company during September, 23-24 2010.

e. The Company’s director creates the internal control system covering from financial dimension, operation in accordance with the law, rules and regulations, the appropriated risk management, as well as creating the effective investigation mechanism and balance to protect the assets. The Company also initiates the internal control department which is the independent organization reporting directly to the audit and corporate governancecommittee as well as compiling the quality report and submit to the audit committee consisted of complete set of necessary information and clearly specifies the risk management policy.

�� Risk management: The Company’s director fosters the Company to have the necessary risk management and follow up frequently. Therefore, the directors has set up the Enterprise Risk Management Committee to evaluate the appropriated risk management and assigned to follow up, supervise, and analyze the risk management at the operating level through Risk Champion and report the result to the Company’s director quarterly.

�� Corporate Governance: The Company’s director and audit committee has established the CG Committee by assigning the Company’s secretary as a chairman to follow up on the corporate governance task and report it to the Company’s director quarterly.- Nominate the Company’s secretary since 2006 to be responsible for the director’s meeting

and shareholder’ s meeting, create the meeting agenda, draft the invitation and minute of meeting , meeting documents and necessary documents keeping such as directors registration, equity report as well as advise the directors on law and regulation specified by Securities and Exchange Commission and the Stock Exchange of Thailand.

- The Company’s director appointed the sub-committee namely; corporate governance management and audit committee, nomination and remuneration committee, and risk management committee. The responsibility of each committee has been clearly specified.

�� Director’s meeting: The Company’s director plans the meeting one year prior and will organize at least 6 meetings a year as well as arrange the special meeting as necessary. At each meeting, both acknowledge and consideration agenda are clearly set, the document is well-prepared and delivered to the directors 7 days prior to the meeting so that the director can study the information before the meeting. In the meeting, everybody can freely discuss. The chairman will analyze the suggestion and conclusion from the meeting. Minute of meeting is recorded by the secretary. After the approval from the meeting, the information will be stored in the shelf on the 2nd floor, 11th building at the head office for the directors and related person to examine. In 2010, there were 11 Company’s director meetings, 17 managing executives meetings, 5 audit and corporate governance committee meetings and 3 nomination and remuneration meetings.



�� Self-evaluation of the director: The Company’s director evaluated themselves at least once a year in order to review the appropriateness of governance and/or execution. This information will be used to improve/develop the management to be at most effective. The evaluation will be conducted using form adapted from the self-evaluation form by the Stock Exchange of Thailand as appropriated and in line with the Company’s director’s characteristic. The evaluation result will be informed to the Company’s directors and make the analysis for the management team.

�� President’s function evaluation: The Company’s director arrange the president’s function evaluation every year by applying the goal and guideline on evaluation linked to the success of the strategy to consider the appropriated remuneration and commission.

�� Director and executive development- Orientation The Company’s director organizes the orientation for every person to create the

understanding in business and practices to prepare the directors. At the same time, policy to foster the knowledge and vision to the director in terms of corporate governance, industry condition, technology business and new innovation to support the effectiveness operation. The Company’s secretary is responsible for the following:1. Acknowledged matter: business structure and director structure, scope of authority, and law. 2. Business information operation guideline and manufacturing process 3. Arrange the discussion section with the chairman, and managing director for the

in-depth information on business operation.

Moreover, the Company supports the directors and top executives to participate in the seminar that will benefit their function as well as exchange the idea with the Company’s directors. The Company’s secretary will coordinate with the director to participate in the courses provided by Thai Directors Institute such as Directors Certification Program (DCP) Directors Accreditation Program (DAP) Audit Committee Program (ACP) and apply those experiences to their function.

- Knowledge development The Company’s director promotes and supports the director, executive and Company’s

secretary to participate in the seminar arranged by the Thai Directors Institute, Stock Exchange of Thailand, Securities Exchange Commission or other independent organization to extend their knowledge, improve their working process and benefit their function.

In 2010 the Company’s Board of Directors hosted a seminar to promote knowledge jointly with Thaipat Institute on a course entitled “CSR ….and Strategy to Sustainably Build up Organization” on 20 July 2010 for the Company’s Board of Directors and executives so as to lead to effectively mapping out of strategy for organization.



�� Making plan succeeding President and Vice President positions to ensure that the Company possesses executives with sufficient competency for operation as follow: 1. The Company’s Board of Directors works out plan to develop executives’ potentiality to

succeed their positions, comprising President and Vice Presidents in all fields. 1. Recruitment Committee and Remuneration stipulates competency and experiences of each

position to single out executives with qualification in line with stipulation. They can be able to succeed works of each position.

2. President evaluates operation and competency of executives with qualification equivalent to desired competency so as to map out plan to develop individual executive to reduce competency gap.

3. Assign Executive Human Resource Committee to monitor training and development of competency of successors of Vice President position.

4. President arranges rotation of duty and responsibility of executives with coincident qualification and assigns Vice Presidents to attend Board of Directors’ meetings so as to understand, experience and be prepared to administer Organization in the future.

5. President reports result of operation and development, in accordance with plan to develop individual executive with coincident qualification, to Recruitment and Remuneration Committee twice annually.

6. Recruitment and Remuneration Committee regularly reviews and concludes result of plan succeeding Present and Vice Presidents and reports to Company’s Executive Directors twice annually.

�� Recruitment of directors and executives: to be in line with good governance policy, the Company’s Board of Directors, consequently, stipulates policy, regulation, and method to recruit the Company’s directors and high ranking executives by assigning Recruitment and Remuneration Committee to recruit suitable persons to enter into screening process. The suitable persons will be chosen by the Recruitment and Remuneration Committee who will work out screening regulation and method, depending on situation and the Company’s situation during that very period.

2. Business operations with fairness

The Company’s Board of Directors stipulates practices for trading partners with equality and fairness based on fair return for both sides. To be fair for business operation without taking into account other benefit from incorrect operation based on good business operation and good governance. Consequently, executives are assigned as follow: 1. Regularly and continuously Arrange distributors’ meeting to publicize recruitment and procurement

policies for trading partners so that the Company’s sales representatives have channel to acknowledge policy, information, operation in terms of recruitment and procurement with equality and fairness. It is also opportunity to jointly try to understand business execution and operation in accordance with the Company’ policy annually. It also provides channel to file grievance



for the Company’s distributors if they are not treated fairly when running business operation with the Company, or are threatened, or are demanded with bribe by the Company’s officials, such as directly from independent directors’ website.

2. Strictly and fairly comply with conditions agreed upon with distributors and creditors according to obligation and agreements reached for mutual business operation.

3. Promote operation in term of distributors’ social responsibility and create opportunity for distributors to continuously participate directly and indirectly in the Company’s operating activities for society. For example jointly developing, repairing and improving education places in various areas which need assistance, or development, improvement, construction residence for the poor who need assistance. Either distributors or trading partners can participate in the project, either directly by labour volunteer, or indirectly by funding or distributing stuffs according to distributors’ capability.

4. Prohibit employees from receiving or distributing any stuffs to any other benefits from persons with duty or business relating to Organization, including distributors, subcontractors, contractors. Clear guidelines of the matter are stipulated to prevent problems of non-transparency and non-fairness of trade between distributors, dishonesty, and non-fairness of business operation from occurring.

3. Human rights and fair practice towards labour

Respect for human rights is foundation of taking care of and developing personnels which plays important part in building up added value and increasing product. The Company realizes well that employees are very valuable resource of the Organization. Consequently, it emphasizes improvement of environment at work, promotes good quality of lives of the Organization’s employees, extends opportunity for employees to participate in expressing their views and opportunity of learning and development, so as to sustainably promote their progress. The Company has given utmost weight to regularly communication through various channels and cover all areas in the Organization, both from top to bottom and vice versa with various activities favorable to opening up opportunity for employees to participate so as to create relationship, unity and feeling of the Organization’s well wishing towards employees and their families. The Company is determined to take such care of employees when appropriate opportunity exists. 3.1 Take care of return and welfare: Apart from basic welfare as that being stipulated by laws,

the Company is determined to pay return and welfare as it sees fit and as the case may be by regularly comparing with the market’s rate. In 2010, the Company increased contributions to provident fund accounting for 1-2 percent in accordance with employees’ working period so as to encourage saving among employees. They could choose saving rates in accordance with their working period while the Company would contribute in the same amount which they chose.

3.2 Personnels development: The Company implements personnels development policy via developing their competency in line with each department’s demand so as to create the Organization’s competitiveness in terms of products’ quality, competitive costs, on time delivery, knowledge in connection with production engineering and management so as to respond to satisfaction of the Organization’s customers and interested persons (Q C D E M).



3.2.1 Develop and upgrade potentiality in line with the Organization’s strategy by emphasizing personnels development in accordance with strategy via distributing for all positions as well as paying attention to strategic positions to be able to be source of driving force to respond to the Organization’s strategy both in short and long terms, based on a concept to create SBG’s DNA under following slogan: “Work by creating value with happiness, having fun with continuous development ” by creativity of quality at work so as to respond to customers’ satisfaction and expectation, based on following concept: 1. Smile @ Change 2. Best Quality 3. Growth by Team Learning so as to achieve objective to be competitive in the future, and, for supervisory positions, emphasize on development to create leadership, management, planning, work’s assignment and monitoring, as well as creating atmosphere at work favorable to innovative thinking so as to respond to plan connecting the Organization’s strategy to achieve the Organization’s target in term of Q C D E M.

3.2.2 Development of preparedness in terms of management and leadership: by aiming to concentrate on upgrading leadership of all levels of executives, as well as assignment of power distribution process for rapidity of strategic management and possessing constructive ideas, in addition to preparing to develop potentiality of executives, both high and middle levels, to be prepared for change which may arise from both internal and external factors.

Moreover, regarding high and middle executives (including managers, general managers,

and Vice Presidents), they receive succession plan by evaluating under Performance Management System (PMS) to discover executives who are talent people and access to Management Development Program. Under this program, executives will be developed in terms of knowledge in management, studying and observation both domestically and internationally, as well as coaching by role model executives under Mentoring Program. Successors’ qualification must be evaluated under Succession Plan with 1-3 Succession Frame Work out of 9 Frame Work.

3.2.3 Personnels development under Knowledge Management: so as to lead to be Learning Organization creating exchange, transfer knowledge within internal Organization, and keep knowledge under the Organization’s production system by concentrating on process affecting products’ Key Process and Safety Process towards users, especially the Organization’s Product Champion, through creating activities as follow:(1) Work out structure of knowledge management and collect, classify, keep and transfer

the knowledge under Knowledge Management.(2) Develop and promote learning through libraries and KM Website.(3) Develop learning process under Team Based Learning by concentrating on building up

knowledge and transfer it to operators. The system is designed to create both Team Based Learning and Cross Functional Team.

(4) Self assessment through Knowledge Management Assessment to add process of knowledge management as a part of the Organization’s strategy.



3.2.4 Process stipulating personnels development: Stipulation training needs of personnels development to be in line with the Organization’s strategy and competency of Organization Standard. The needs will be analyzed and worked out as personnels development according to Individual Development Plan (IDP), dividing into levels of competency according to responsibility or positions in line with the Organization’s Competency Model).

Moreover, the Company also emphasizes on personnels development under On the Job

Training System so as to develop potentiality of preliminary supervisors’ leadership and emphasize developing employees’ skills and professional competency to be prepared for responding to customer’s needs in term of QCD. All employees’ levels will be developed based on learning capability towards suitable knowledge and skills for professional practice. And finally, they will be developed to possess sufficient potentiality and experiences to be promoted to higher rankings.

Every year, test of knowledge and assessment of competency according to Competency Model will be held so as to find out gap to develop competency of all levels of employees, which is a process to be systematically and continuously developed to ensure stable growth and sustainability of the Organization.

4. Responsibility towards consumers

The Company’s Board of Directors implements a policy to respond to customers’ satisfaction so as to lead to success of the Company’s business by strictly, fairly and systematically abiding by conditions agreed with customers. Customers’ filing grievance process in connection with safety or products and services as well as products’ warranty within suitable duration is available.

In 2010, the company received no significant grievance from use of the Company’s products, or defying Product Liability Law. In addition, it extended correct and sufficient information to customers to create benefit towards management both for manufacturers and consumers.

The Company also paid attention to products’ development and manufacturing monitoring process by establishing test centre of products’ development and manufacturing process at the Company’s Head Quarters in Samut Prakarn province. The centre can test brakes, shafts, spring coils, leaf spring, stabilizer bar control, and spare parts of agriculture machines. The test covers selection of raw materials to suit each type of product. Test during all manufacturing process is to find out the best manufacturing parameter. And test of finished products via testing equipments emulated from virtual use and test during specified period. On the whole, these tests aim to ensure that designed and developed products offer good quality and can respond to customers’ needs.



5. Operation on environment

The Company’s Board of Directors implement a policy to operate business based on environment’s consciousness, aiming to strictly abide by laws, regulations, standards, and requirements relating to environment and is ready to seriously develop and continuously improve management process within the Organization to ensure the most worthiness use of resources and least causing waste from the Organization’s activities which may adversely affect environment. The Company, consequently, has hosted activities relating to environment as well as measure environment’s quality in operation areas. It has also been conduct testing of environment’s quality to continuously watch out impact of environment towards surrounding communities. For example, cancellation of use of foam box within Somboon Group of the Company, measuring weather’s and waste water’s quality etc. Moreover, the Company hosted research and development to continuously improve manufacturing process to reduce impact on environment. Reduction of waste rubbish from manufacturing process by adopting suitable technology to the areas and source of toxic waste to use with the Organization, such as dust entrapping system, waste water treatment system and recycling waste materials. The operations are equipped with continuously efficiency testing process.

In 2010, the Company operated environment related activities. It could cancel (1) bringing foam from outside into the Company accounting for 100%, (2) reduce the Company’s industrial wastes by about 16.2% (3) reduce electricity consumption by 243,600 KWh, or accounting for around 130.8 Ton Co2e etc.

To ensure continued operation of environment and reflect the business’ sustainability, the Company assessed impact of environment from manufacturing process to be collected as vital environment issue arising from manufacturing process for correction and prevention purpose through project’s implementation or handbook clearly controlling work and to ensure that environment policy leading to serious practice. The Company’s executives, consequently, stipulated assessment of Management Shop Floor every month as to extend suggestion to improve operation and ensure that every operation process is under control and prevention. Moreover, the Company has implemented a policy to work out project to reduce energy consumption with objective to reduce energy consumption by looking for alternative sources of energy. It is studying details of solar car park project.


6. Jointly developing communities and societies

The Company’s Board of Directors have realized that the Organization’s development to grow and create sustainability, the Company must play role to support the country’s development by promoting communities and societies to be sustainably better off. The Company emphasizes on promoting people’s development o be good citizens with improved virtue, ethics and quality of life, as follow:

6.1 Development and assisting society The Company’s Board of Directors is determined

to support employees to be good people for both the Organization and society by following the Royal Father’s footprint. It uses spare time to assist and develop communities and societies surrounding the Company. It has cooperated with local agencies in Bangna district and Rayong province areas to develop local surrounding communities

and societies with better living.

The Company has cooperated with local administration organization to operate “Houses Hournoring the King” project to

repair and improve 4 houses of the underprivileged in the communities, hosting interest practice activity by developing 3 community schools, jointly

with schools and business trading partners. Moreover, it also hosted activity lending happiness to children at Rangsit Infants Foster Home.

6.2 Education support and development hygienic practice for the youths The Company has allocated education fund and support youths’ activities

as follow: 1. “Education for Father’s Kids” was distributing education

fund to employees’ sons and daughters as well as needy students with proven education record in local communities. The Company has continuously lent support of education fund annually for over 13 years. In 2010, there were altogether 85 funds worth a combined over Baht 457,000.

2. Distributing Children’s Day presents to schools and agencies arranging Children Day’s activities. The Company has set over 300 sets of presents to children.


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3. Arrange “Coordinate Relationship of SBG for Beloved Offspring” project to promote out of class learning during closing of semesters for employees’ sons and daughters twice annually. This year, the Company brought employees’ offspring to Phra Dabos Foundation project to learn hydroponic growing plant, producing renewable energy and field trip seeking knowledge at Vajira Benja Thas Park, butterflies’ museum.

6.3 Promoting local traditions and developing homelands: The Company has paid attention to co-existence with surrounding societies by participating

in developing communities, societies, continuously promoting local traditions and cultures supporting arranging of Receiving Lotus tradition, Saluting Khong Ptech God Shrine, Continuing Songkran Festival by hosting activities for employees to realize importance of Thai cultures. Moreover, there is Loving Homeland Fund project to promote employees for their conscious of loving homeland and participate in developing homeland communities. This year, the Company developed Wat Don Po Sri School project, Chainat province. The project was suggested by employees residing in Chainat province.

6.4 Good health promotion among people in communities The Company has emphasized good health among people in communities surrounding the Company.

In 2010, the Company cooperated with Tambon administration organizations hosting health check for elderly in local communities. Medical equipments were also given, including ears, eyes, neck, nose checking set, pressure measurement set, diabetes checking set and digital clinical thermometer for health related agencies and community hospitals to make use of the sets.

7. Research and development from operating of social responsibility

For sustainable development to the Organization so as to develop products’ quality and continuously increase efficiency in manufacturing process so as to increase competitiveness, the Company has invested in constructing test centre and products’ development. The Development of Manufacturing Process and Products’ Development is directly responsible for this project. Apart from development of products’ quality, the Company has also simultaneously developed knowledge and understanding skills among personnels. Experienced foreign experts of designing and products’ development have jointly trained the Company’s personnels.

In 2010, the Company was operating research and development to design brake discs and half shafts to be prepared for change in automobile manufacturing technology in the future to respond to customers’ demand in the future and has registered a patent already.

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The Company’s Board of Directors implements a policy aiming to develop people to be good people with virtue, ethics and better quality of life. Consequently, it has encouraged employees’ participation through “98,480 Goodness” project which is benefaction project following the Royal Father’s Footprint to encourage employees to be good people and spend leisure time to assist society. It is 4 years continuous project (2008-2011) to offer as contribution to Royal initiated projects commemorating auspicious occasion of His Majesty the King’s 84th birthday anniversary in 2011 and Her Majesty the Queen’s 80th birthday anniversary in 2012. Up to 2010, there were 77,760 goodness performed so far though various channels as follow:

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1st Channel: Practicing interest for society and environment The Company has hosted practicing interest activity with

participation of employees to develop community in cooperation with government agencies and local

administration organizations through various projects, such as: - "Rehabilitate Forest with Royal Glory" forest plantation: Project to jointly planting at the Centre for Natural Studies, Royal Thai Army to commenmorate 72nd Anniversary of Her Majesty the Queen, Bangpoo Resort.

- “Houses Honouring the King” project to repair and improve houses of the underprivileged in

local communities for better living condition.

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8. Employees’ participation through “89,480 Goodness, SBG Follows the Royal Father’s Footprint”



- Practicing interest for local community schools by painting buildings, repair toilets, improve and repair playgrounds, improve wards.

- “1 Bottle of Kindness: Elder Brother (Sister) Contributes to Younger Brother (Sister)” project, Rangsit Infant Foster Home. The Company’s all employees jointly make merit by dropping coins in unused bottles for collection and bring the collected money to host game playing activity and distribute Christmas presents to youngsters.

2nd Channel: Merit making for religion To promote Buddhism, polish mind and encourage employees to be good people, the Company hosted merit making of rice and dried foods in various important occasions of Buddhism, such as First Day of the Buddhist Lent etc. While employees play joint hosts to present robes to monks at the end of Buddhist Lent, an annual event of temples in local communities.

3rd Channel: Money contributionThe Company encourages employees to do merit

making by jointly contribute money according to their financial status in various activities, which is

a part of performing goodness for society. Outstanding balance of contribution in 2010 from the Organization’s executives, employees, trading partner alliances, shareholders and contribution by the Company was over Baht 900,000.

4th Channel: Stuffs contributionThe Company acts as intermediary

of contributions, stuffs, second hand clothes, second hand books,

as well as necessary stuffs for the needy in various places. It is another channel to do goodness, such as contributing x-ray films to do bullet proof armour, contributing for waste’s recycling to help reducing global warming.


5th Channel: Behaving as good peopleHosting activity to polish mind and encourage employees to be good people through various activities such as stop drinking alcohol beverages during the first day of the Buddhist Lent project, receiving blood donation from the Company’s executives, employees and general public in nearby communities by cooperating with blood donation receiving unit, the Thai Red Cross Society, hosting regular activity receiving blood donation annually, 4 times per year. (3 months/ 1 time) In 2010, there

were 4 times of the activity with outstanding blood donation

accounting for 400 persons.

6th Channel: Self performing of goodness Goodness can be done everywhere, every time and can be performed by oneself. The Company has attempted to instill and make campaign for employees to perform goodness when opportunity

exists, including merit making, donation, jointly supporting Buddhism activities, such as performing

merit making, offering robes to Buddhist monks at monastery, presenting robes to the Buddhist monks at

the end of the Buddhist Lent, and participating in activities for society with external agencies. Employees can jointly record for their goodness according to the mentioned whole projects as well.well.

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Competition and Industrial Trend

Trends on Market Situation in Auto Parts IndustryIn 2010, the Tha i economy recovered s ign i f i cant ly . The count ry ’ s GDP increased 7-8 percent from 2009. Even though there were political instability as well as drought and flood in many provinces in 2010, the economy could recovers in a short period resulting from the world economy’s recovery in many countries from their economic stimulus measures. As a result, Thai economy expanded in line with the world’s economic recovery especially in the export sector.

From the economic recovery and other supporting factors, the automotive industry in 2010 grew rapidly. The automotive production reached 1,645,304, which is the highest in the history increased by 64.63 percent from 2009. The automotive production for domestic sale was at 749,499 increased by 61.5 percent and for export at 895,855 vehicles increased by 67.26 percent. The automotive assembly in Thailand can be summarized in Table1


Source: Thai Automotive Industry Association

2005 277,603 822,867 24,846 847,713 1,125,316 21.25

2006 298,819 866,990 22,235 889,225 1,188,044 5.57

2007 315,444 948,388 23,514 971,902 1,287,346 8.36

2008 401,309 974,642 17,791 992,433 1,393,742 8.26

2009 313,442 670,737 15,199 685,936 999,378 -28.29

2010 554,387 1,066,759 24,158 1,090,917 1,645,304 64.63

YearPassenger

Car(Car)

Growth Rate(%)

Total(Car)

Other Commercial Purpose Car

(Car)

Total Commercial

Purpose(Car)

1-Ton Pick Up Truck(Car)

Table 1 Statistics of automotive assembly in Thailand


Economic trend in 2011 is expected to expand at 3-5 percent providing a good effect on the domestic automotive market to expand continuously. Also, many car producers have continuously launched Eco-car which is a supporting factor to stimulate the domestic market. At the same time, the recovery in the world’s economy has resulted in the expansion in the export market. The production in the automotive industry in 2011 is expected to grow at 9.07 percent year over year. The automotive production is 1,794,486 vehicles divided into 834,059 cars for domestic market and 960,428 for export. However, the Thai economy is still at risk from the fragile economy in the world as USA, Europe and Japan still have so significant sign of recovery. Moreover, the Chinese government is applying the measure to slow down the economy as well as the internal political situation can caused the uncertainty providing the negative effect to the economy next year.

Situation in the automotive industry in 2011 tends to have more competition from the shift of automotive part manufacturing plant from Japan to Thailand, the economic slowdown and appreciation of Yen resulting in the cost competition to be more fiercely. Thai manufacturers need to specify the strategy to reduce cost to be able to compete in the market. On the other hand, other costs are also risen continuously such as interest rate, exchange rate or even labor cost which is also increased every year. Furthermore, lack of skill labor in the industry becomes the significant problem that government and private sector together need to find the solution for Thai operators to survive in the market.



Risk Management and Risk Factors

The company is aware of the importance in adopting the risk management for use as a tool in the organizational management under the international risk management frame level with the Risk Management Committee responsible for monitoring controls and supervisions on the developments and implementations in accordance with the risk management frame, making follow-ups on the important risks and the operations in order to ensure that the organization has availed the adequate and proper risk management system. The Company has taken steps in accordance with the Development Plan and uplifting the level of Risk Management Roadmap to be in concordance with the Company’s Strategic Plan and Business Plan continuously which are the stipulations of Risk Management Policy, the review of Standard Operating Procedures Manual and the adoption for implementations throughout the organization including the clear designations of the roles, duties and responsibilities of the Management and staffs which eventually link to the operational result assessment. There is a continuous risk follow-up development and report monitoring system in order to cause the increase in more quality and efficiency in practical operations on risk management ranging from the analysis and, assessments, plan making, follow-ups and evaluations.

In 2010, the Company is firmly determined to develop working system for connection with the risk management process to be harmoniously compatible with the making of the Strategic Plan. The strategy has been specified under the risk appetite by carefully considering the return and risk , allocating the resources in accordance with business trend and competencies as well as expanding the risk management systematically to the project and investment management.

Risk factors in 2010The Company conquered the obstacle from the economic crisis by planning by considering risk management and created the prevention method ahead of time. The Company could recovery to the normal condition even though the Company had been affected on investment, and capital resources to support the cash flows. Due to the characteristic of automotive part industry and swiftly changes in business condition, the Company could not escape from certain risks that may significantly affect the achievement in business target or the Group operation. The Company had planned and managed the risk continuously and systematically. From the risk management in the previous year, the major risks were categorized as follows; 1. Strategic Risk

�� From the world economic crisis, the Company had remained the operating results at the

automotive industry rate resulting from the dispersing the investment which was not relies on only on customer as well as increasing the portion of revenue from non-auto parts. In 2010, the Company had revenue from non-auto parts at 8 percent and 2009 at 5 percent.




The total sales revenue increased 46 percent from 2009 when crisis occurred. The application of strategy assured that in the middle and long-term investment, the Company could expand steadily.

The estimation of 2011 in which the world economic conditions still fragile in the USA, EU and Japan although there are signal of recovery, it is on the uncertainly foundation. Moreover, oil price, unemployment rate and economic stimulus policies not create the confidence has resulted in some countries to extend the stimulus policy. In addition, the political conflict in the Middle East is expected to evolve to the world economic crisis if the situation is out of control. The new rise in Asia especially China is still growing strongly and needs the strict control to force the economic system to grow at the appropriated rate. The different in growth rate among two groups of countries may result in the unusual movement of investment which may affect Thai economy. Moreover, the political trend and situation is still uncertain which may provide either good or bad effect on Thai economy. If the political situation is intense, it may result in lack of confidence to invest. On the other hand, if the political situation is at ease, it may create the confidence to invest and consume which is benefit to the economy.

Furthermore, as the Company has applied the sufficient economy philosophy as a operational guideline to achieve the target on the adequate basis that is be cautious, adequate, reasonable and protectable by giving importance to the balance in financial, customer, operation process and organizational management. The Company considers the possibility, reasons, sufficiently balance and acceptable risk. From this management philosophy, it becomes an immune to the organization in the future.

2. Financial Risk�� The Company’s investment expansion has consequently required the Company to import

machineries and equipments from a foreign country including raw materials (steels) where the orders for the purchases on those are placed through both the domestic distributing agent and directly to the foreign country which, in this connection, the Company may be affected on the aspect of the cost derived from currency exchange rate fluctuation. In 2010, the Company imported the machinery, tool and metal amounted to 40 percent of total purchasing value. It increased from the previous year amount of 20 percent. The increase was mainly from the import of machinery and tool for the new investment project. Therefore, to reduce the effect on the assets and liabilities balance which was in the foreign currency, the Company had the policy to manage the risk from the exchange rate by using forward contract as well as analyzing and following the trend on exchange rate. The Company also had the policy to increase sales revenue by exporting to the countries that could help reduce the risk from exchange rate. In 2010, the Company had gain from exchange rate amounted to 17 million baht. However,



the fluctuation of exchange rate is an uncontrollable factor and is accounted for business risk needed to be managed and follow up closely.

3. Operational Risk3.1 Risk derived from price fluctuation and source of raw materials Because of the reason that the main raw materials used in the manufactures of the Company’s

products are steels calculated to be thirty-four percents (34%) of the total cost of sales and that approximately eighty-five percents (85%) of the values of the steel totally placed on order for the purchases are imported from foreign countries due to the reason that the steels cannot be manufactured in the country, therefore, if the price of the steels should be adjustably increased, the production costs and the Company’s competitiveness will definitely be affected. In 2010, the apparent steel price was risen approximately 20-22 percent year-over-year from the global demand had been risen from the automotive industry in China and India. Both countries are major steel manufacturer in the world.

From trend of steel in the global market tends to rise, the Company applies the marketing information to support price prediction to be used as a guideline for the management and purchasing strategy, as well as sourcing to reduce the risk from fluctuating price of raw materials. The Company found that the price raw material sourced by the Company had been increased continuously at the average of 10-15 percent which was below the average increase in price in the global market which was at the rate of 20-22 percent. In 2011, the Company estimates that the price of steel is still at the rise in accordance with the demand from India and China, although China has announced the policy to slow down its economic growth. However, the catastrophe in Australia who is a major exporter of steel will lead to the shortage of mineral and coal which are the raw materials for steel manufacturing at the beginning of 2011. This situation will result in the highly fluctuated price but it is expected to adjust to the normal rate in the 2nd quarter. However, the Company still applies the policies on following on the news and movement of the global steel price, and analysis of demand and production capacity at different period. The Company can apply that information to support the decision making or price negotiation or specifying the price of raw material to purchase better. Moreover, the Company plans to find other raw material suppliers to gain the quality steel at the competitive cost to reduce the risk from cost.

3.2 Risk on the aspect of a compliance with the Regulations

��

As the automotive parts manufactured by the Company has been used in the car assembly which is distributed domestically and internationally, therefore if the part is defected, it may affect the end user and the end user can claim for the damage at the manufacturer under



Product Liability Act. If it found that the damage is caused by which manufacturer, the manufacturer needs to be fine under the court decree. The value of penalty depends on the value of the damage. Currently, the Act is applied to many countries in the world as well as Thailand.

With the reason that it is unacceptable effect to the Company, the Company gives important on the strategy at the organizational level that every employees needs to comply with the quality assurance system namely; ISO/TS 16949 strictly, manage the manufacturing process to be able to investigate, final checking before deliver to the customer to assure the high quality product at the least defect rate specified by the customer as well as targeting on zero claim from customer. Currently, the Company is on the process of sourcing the insurance company to insure the risk.

�� Risk on the aspect of safety, environment and community Stakeholders, therefore the Company aims to manage to reduce the risk to the quality

of lives of all personnel along with improving for the organizational excellent. In 2010, the Company had 3 main activities which were;

1. Revise and create the policy on occupational health and safety for the year by focusing on the employee involvement to reduce the risk and prevent the accident through the Completely Check Completely Find out or CCCF activity which was arranged twice a year. It had resulted on reducing more than 300 risk spots.

2. Plan on creating the good sense to the employee through many activities such as safety week, drive safety, drive don’t drive, no alcohol during Buddhist rent, safety magazine as well as safety training. These could reduce the accident from reckless. Last, revise and conduct the activity according to customer’s demand such as CCCF activity, SPI as well as according to the regulations such as checking on electrical appliances, lifting car, crane, steam boiler, annual check up, and environmental check. It had resulted in gaining the excellent level from customer’s evaluation and 100 percent complying with the law.


Major Changes and Developments in Past 3 Years

��!"## 1) SAT2 received the certificate on complying with the CSR guidance for operator from the Department of Industrial Work.

2) SAT and BSK received the CSR-DIW Continuous Award 2010 for CSR guidance for operator from the Department of Industrial Work.

�� $��!"#" SAT received the Bronze Award- KANO Quality Award from Technology Promotion Association (Thailand-Japan)

�� !"#" 1) SAT received the National Best Co-operative Education Award from the Office of the National Education Commission

2) The Company’s directors had resolutions approving the following subjects: 2.1 Approve ICP to increase the productivity of 2,500 tons/month (Phase

1= 450 tons/month, Phase 2 = 2,500 tons/month). The approximate investment is 1,203 million baht (One thousand two hundred and three million baht). The Company will construct a new molding plant at Amata City Industrial Estate, Rayong province to support the current purchase order and new purchase order for the product in the automotive sector and part for agricultural machinery.

2.2 Approve SAT and its subsidiaries to reimburse all the credit facility owing to Ayuddhaya Bank (pcl) and receive the new credit facility from the new financial institution for the new investment project according to the company investment plan.

2.3 Approve issuing the transferable subscription rights of 25,000,000 units free of charge to distribute to the present shareholders at the ratio of 12 current shares per 1 transferable subscription right.

2.4 Approve to increase the company’s share capital of 40,000,000 baht by issuing 40,000,000 common shares at 1 baht each. The previous share capital of 300,000,000 baht increased to 340,000,000 baht can be divided into 340,000,000 common shares at 1 baht each. The memorandum of association, clause 4 was revised in accordance with the increase in share capital.

2.5 Approve to allocate 40,000,000 equity shares at 1 baht each with details as follows:

2.5.1 Allocate 25,000,000 equity shares to support the excising of pre-emptive right to buy the transferable subscription right.

2.5.2 Allocate 15,000,000 equity shares to sell at the same or different time to the Private Placement.

�� !"#" BSK received the National Best Operator in Occupational Safety, Health and Environment award.




�� %��!"#" 1) Three companies in Somboon Group, SAT, SBM and BSK were chosen by Department of Labour Protection and Welfare as the Best Practice Workplace in Labor Relations and Welfare 2010 and Best Practice Workplace in Labor Relations and Welfare for 5 years.

2) BSK received Bronze Award - Thailand Kaizen Award 2010 from the Technology Promotion Association (Thailand-Japan).

3) SAT, SBM and BSK received the certificate on the Best AIDS and TB management (ASO-T), Bronze Award from the Department of Labour Protection and Welfare, the Ministry of Labour.

�� &�� !"#" SBM and ICP received the certificate on the Best Practice Workplace in AIDS and TB management (ASO-T) from the Department of Labour Protection and Welfare, the Ministry of Labour.

�� ' ��!"#" 1) The Company won the NACC Integrity Award for Private Sector for 2010 from the National Anti-Corruption Commission.

2) The Company received the Top Corporate Governance Report Awards from SET Awards 2010 which was the second years in a role from Stock Exchange of Thailand with the Journal of Banking and Finance.

3) The Company’s directors approved the Company to increase the capital in ICP to maintain the shareholder portion.

4) The Company received the “Skill Labour in the Workplace Standard” mark from the Ministry of Labour.

5) BSK received the certificate from “TCC HRD (Toyota Co-operation Club)” HDR Activity 2010.

�� +��!"#" ICP increased the registered capital from 185,000,000 baht to 785,000,000 baht. The total increase was 60,000,000 baht to invest in investment project in expand the molding production capacity, reimburse the debt owing to the Company and reserve as working capital.

Awards from Customers for 2010�� ]��?$�� <XZX��?$��]�+<�� ?�� ||+��]�+�� ]��]�� +��@>��]V|�

�� /��!""; 1. The board of directors of the company approved BSK to invest in the testing machine for coil spring to enhance the competitiveness with the budget of 60 million baht and to invest in the project on manufacturing of rotary blade with the budget of 135 million baht for Siam Kubota Industry Co., Ltd. The production started in November 2009.



2. The board of directors of the company approved to the Company and its subsidiaries to pending project investment due to economic downturn which had affected to automotive industry.

2.1 The new investment project for iron casting plant at Amata City Industrial Estate, Rayong province, with a total investment of Baht 1,219 million which the board had approved project and disclosed to the SET on August 14, 2008.

2.2 The joint venture project with Kuse Iron Works Co., Ltd. (Kuse), Japanese, for establishing a new firm with a total investment of Baht 19.60 million which the board had approve project and disclosed to the SET on November 13, 2008.

�� $��!""; The board of directors of the company made a resolution to approve that SAT could invest in the axle shaft manufacturing project for the trucks/ agricultural engines parts for Kubota Tractor Co., Ltd. with a total investment of Baht 81 million. The production process will be expectation to start in February 2010.

�� !"";� 1) The board of directors of the company made a disclosure to the Stock Exchange of Thailand on the extension of the repayment term to the financial institute for one year and the grace period starting from July 31, 2009 to July 30 2010 with the dividend payment condition during the grace period to maintain the liquidity of the company during the economic crisis and the prepare for the prospective investment projects.

�� %��!""; 1) Mr. Sap Bandarn, an employee of BSK, was granted with Golden Award - Thailand Kaizen Award 2009 from Technology Promotion Association (Thai-Japan).

2) SBM was granted with a Bronze Award (no accident from the work until there is a work suspension from 1,000,000 – 2,999,999 working hours from the Labor Ministry.

�� <��!""; 1) The board of directors of the company made a resolution to approve that SBM to invest in production of bracket injection pump for 42 million baht for Nissan Motor Thailand Co., Ltd. and to invest in enhancement of machining production capacity of the parts of tractors for 228 million baht for Kubota Tractor Co., Ltd. Both projects were anticipated to start the production in May 2010.

2) SAT, SBM and BSK were selected by the Department of Labor Welfare and Protection the outstanding business premise on labor relations and welfare.

3) SAT and BSK were granted with the certificate on responsibility standard of the manufacturing entrepreneurs toward the society, B.E. 2552 (CSR-DIW) from the Department of Industrial Works

�� &�� !""; The companies in Somboon Group received an honor shield for management system in quality work life (MS-QWL) continuously since 2006 until present.



�� ' ��!""; 1) The board of directors of the company made a resolution to approve the investment of 121.20 million baht by SBM in Assy Front & Rear Line for Kubota Tractor Co., Ltd. The production was anticipated to start the operation in September 2010 and to invest in the factory building in Rayong for 52 million baht to facilitate the growth. The new factory building was anticipated to be completed in March 2010.

2) The company was granted awards from the SET and Bank& Finance magazine in the field of Top Corporate Governance Report Awards, IR Excellence Award and outstanding listed company certificate on CSR in SET Awards 2009.

3) The Company’s board of directors received the outstanding Board of the Year 2008/2009 for Distinctive Practices arranged by Thai Institute of Director Association in conjunction with the Stock Exchange of Thailand, Federation of Thai Industries, Thai Banks Association, Thai Listed Companies Association and Thai Capital Market Business Council.

4) SAT, SBM and BSK, received certification on Thai labor standard (Mor Ror Thor 8001-2546) Level Perfect, Initiative Step from the Department of Labor Welfare and Protection.

Awards granted by customers in year 2009�� $�� {�Z� ��+�� !��V]�� +��<� �� <XX��+�� >�� !��V]�� {�"�� || ��V]�� {�"�� || ��]�+�

�� /��!""= The Board of Directors resolved to approve the Company’s expansion of its axle shaft manufacture (in the part of Machine Line H) at Eastern Seaboard Industrial Park, Rayong, with an investment fund Baht 269.60 million, already commencing on December 2008.

�� $��!""= The Board of Directors resolved for BSK’s investment in the construction of a new plant to expand coil spring production capacity at Amata City Industrial Park, Rayong, with an investment fund of Baht 286 million, already commencing on February 2009.

�� $��!""= The Board of Directors resolved for ICP’s purchase of land in Amata City Industrial Park, Rayong, to accommodate the expansion of production capacity in the future with an investment fund Baht 104 million.

�� $��!""= The Board of Directors resolved for SBM’s investment in the establishment of a testing and supply center of brake discs and brake drum at its headquarters in Samutprakan province, with an investment fund Baht 55 million, expected for an initial trial use in 3rd quarter of 2009.



�� $��!""= The Board of Directors resolved to approve the Company’s expansion of its axle shaft manufacture (in the part of Forging Line) at Eastern Seaboard Industrial Park, Rayong, with an investment fund of Baht 163 million, expected to manufacture by end of 2009.

�� %��!""= The Board of Directors resolved to approve SBM’s investment the construction of a warehouse at Amata City Industrial Park, Rayong, with an investment fund of Baht 21.5 million.

�� $��!""= The Board of Directors resolved to approve the Company’s installation of an ERP (Enterprise Resource Planning) with an investment fund of Baht 47.75 million.

�� $��!""= The Board of Directors resolved to approve the Company’s expansion of its axle shaft manufacture for big truck at Eastern Seaboard Industrial Park, Rayong, with an investment fund of Baht 259.76 million. After project review, partial investment in machinery was allowed, and the investment in machine line should be delayed until the automotive industrial situations have a good trend.

�� $��!""= The Board of Directors resolved to approve the SBM’s expansion of Hub Front’s production capacity at its headquarters in Samutprakan province, with an investment fund of Baht 14.18 million.

�� $��!""= The Company received an award for outstanding, provincial establishment in terms of safety.

�� <��!""= The Board of Directors resolved to approve SBM’s investment in the manufacture of new products - Differential Case and Differential Case Bearing - at Amata City Industrial Park, Rayong, with an investment fund of Baht 104 million.

�� <��!""= Somboon Group’s three companies i.e. SAT, SBM and BSK have been award by the Department of Welfare and Labor Protection to be an establishment with outstanding labor relations and labor welfare.

�� &�� !""= The Company was conferred an outstanding social activities honor plaque for 2008 from the Ministry of Social Development and Human Security.

Awards granted by customers in year 2008 �� V�� ?�� ?��$��]V|�� {�"�� ||+��V]�� {�"�� ||+��]�+�


Major Shareholders

Major Shareholders

The top ten list of shareholders as shown in the registration book as at March 15, 2011 are as following:

Remarks:. - Fund’s major shareholders consist of Internatioal Finance Corporation (IFC), California Public

mployees’ Retirement System (CalPERS), Asian Development Bank (ADB), the Ministry of Finance etc.

Limited of Foreigner ShareholderThe foreign shareholders cannot hold shares of the company more than 49 percent of the outstanding and paid-up shares on March 15, 2011, and they held shares of the company for 19.09 percent.

1. SOMBOON HOLDING COMPANY LIMITED 86,665,800 25.49

2. KITAPHANICH FAMILY 83,079,348 24.44

3. SOMPONG CHOLKADEEDAMRONGKUL 17,583,500 5.17

4. SOMER (U.K.) LIMITED 12,551,208 3.69

5. NORBAX INC., 13 11,403,100 3.35

6. MR.KENNETH RUDY KAMON 10,651,008 3.13

7. MR.SUTTIPONG VESVARUT 10,450,000 3.07

8. THAILAND EQUITY FUND 10,296,400 3.02

9. AMERICAN INTERNATIONAL ASSURANCE COMPANY, LIMITED-APEX 9,858,533 2.90

10. THAI NVDR CO., LTD 6,442,667 1.89

Shareholders PercentageNo. of shares hold


Organization chart

Org

aniz

atio

n ch

art

Prod

uct D

evelop

men

t SA

T&SB

M&I

CP

Gro

wth

Ra

te(%

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tal

(Car

)

Tota

l C

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Ope

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Busin

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Ope

ratio

n

Castin

g Ope

ratio

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Proc

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Hum

an R

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Fina

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Inform

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logy

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R

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Pre

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Vice

Pre

siden

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Mac

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(Aut

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Mac

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Pre

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ittee

Pres

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Nom

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ion

and

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Nom

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Management Structure


The Company’s management structure consists of 5 groups of committee are the board of directors, the executive board, the audit and corporate governance committee, and the nomination and remuneration committee the name listed by duty as following.

Board of Directors consists of

Mr. Thanakit Permpoonkantisuk is a Company Secretary

Authorized Directors Directors authorized to sign in binding the company consist of Mr. Yongyuth Kitaphanich, Mr. Verayut Kitaphanich Mr. Yongkiat Kitaphanich and Ms. Napatsorn Kitaphanich. Any two out of these four Directors shall commonly sign and affix the company common seal.

Powers and Duties of the Company’s Board of DirectorsThe Board of Directors is responsible for shareholders in relation with the Company’s business operation and supervision of the management to be in accordance with the policy, guidelines and objectives with the maximum benefit to the shareholders and within the frame of good ethics and morality and to take the interest of all interested parties into account.

The Board of Directors has the duties to act in compliance with laws, objectives and articles of Association of the Company and the meeting of shareholders’ resolutions with honesty and care for the shareholders’ interests, at the present and in the long term, including the acting in compliance with the criteria and regulations of the Stock Exchange of Thailand and the Securities and Exchange Commission of Thailand.

1. Mr. Sansern Wongcha-um Independent Director/ Chairman

2. Mr. Yongyuth Kitaphanich Director/ Vice Chairman

3. Mr. Panja Senadisai Independent Director

4. Mr. Sobson Ketsuwan Independent Director

5. Mr. Ajarin Sarasas Independent Director

6. Mr. Paitoon Taveebhol Independent Director

7. Mr. Verayut Kitaphanich Director

8. Mr. Yongkiat Kitaphanich Director

9. Ms. Napatsorn Kitaphanich Director

10. Mr. Surasak Khaoroptham Director

TitleFirstname - Lastname



In performing their duties, the Board of Directors shall appoint the president to be responsible for the Company’s business operation.

In supervising all the Company’s business, the Board of Directors has determined the following matters to be the authority and responsibility of the Board of Directors who shall consider for the approval.

1. Policy, business conducts strategy guidelines, targets, plans and annual budget of the company and subsidiaries.

2. The Company’s monthly and quarterly business performances comparing to the plan and budget and the consideration of the further trends of the year.

3. The investment in the annual non-budgetary project.4. Spending on the investment capital at 5% in excess of the investment budget in the approved project

and 10% in excess of the other investment budgets that are not the project investment budget.5. The purchase and sale of assets, the purchase of business and the participation in the co-investment

project that is not contradicted to the Stock Exchange of Thailand’s criteria and not exceeding in values authorized to the President.

6. The transaction or any actions that shall result in the major impact against the Company’s financial status, debt burden, business operation strategy and reputation.

7. Any contract execution that is not related to the normal business operation and the contract related to the major regular business operation.

8. Inter-related transaction between the Company, subsidiaries, associated companies and the related persons in part of the transactions that are not meet with the requirements of the Stock Exchange and the Securities and Exchange Commission.

9. Any transactions effecting the Company’s capital structure at the debt ratio against the capital that is exceeding 1.5:1.

10. Payment of the interim dividends.11. The charge of policy and practical methods with the significance related to the accounting,

risk management and internal audit.12. Employment of the President and senior executives.13. Determination and change of the approval authority conferred to the President and senior executives.14. Approval of the amount of salaries and bonuses or bonus formula adjustment or the formula of

the annual remuneration adjustment of the executives and employees.15. The appointment proposal and the termination of the Company’s Directors and secretary status.16. Authorization of power and duties to any of the Company’s President or Director, including

the revision of the said power and duties authorization, however, this must not be in contradiction with the criteria and requirements of the Stock Exchange and Securities and Exchange Commission.

17. The appointment and the determination of authority of the Sub-committee.18. Arrangement and supervision for having the management available in accordance with the good

corporate governance principle.



19. The appointment of Directors in the subsidiaries.20. Any other actions to be in accordance with laws, objectives, Articles of Association and resolutions

of the meeting of shareholders.

Executive Board consists of Chairman who is an independent director

Mr. Thanakit Permpoonkantisuk is a Secretary to the Executive BoardThe Executive Director holds a term of three years.

Powers and Duties of the Executive Board1. Audit

- Policy, direction, business strategies and management structure,as well as business operational criteria of the Company are screened in alignment wit the economic conditions and competitions

- Business plan and annual budget- Every Investment project

2. Approve or not approve- Investment project in the capital not exceeded 100 million baht which should be involved

the main business of the company and IRR not less than 15% excepted investment for maintenance, improve efficiency or machinery compensate.

- Open and Close the account of the Company in other Financial Institute- Written-off assets- Sell non-operation assets not more than of 10 million baht

3. Follow and Supervisory the operations- Strategy, plan and project including in annual business plan which have to approved by

the Board of Directors- Financial performance of the Company- Risk Management performance of the Company

4. Report to Board of Directors- Monthly of financial performance of the Company- The lists of Executive Board approved or not approved

5. Perform any acts designated by the board of directors

1. Mr. Sobson Ketsuwan Chairman

2. Mr. Yongyuth Kitaphanich Director






Audit and Corporate Governance Committee consists of all Independent Director

Mr. Witsarut Boonto is a secretary to the Audit& CG Committee.The Audit Committee holds a term of three years.

Powers and Duties of Audit and Corporate Governance Committee1. Review financial reports against the accounting standard and ensure adequate disclosure.2. Review the internal control and internal audits to ensure suitability and effectiveness; consider

independency of the Internal Audit Unit.3. Review the Company’s performance against the law on securities and stock exchange, Stock

Exchange’s requirements, or applicable laws.4. Review related-party transactions or any actions with potential conflicts of interests against

applicable rules and ordinances.5. Review the suitability and adequacy of risk management of the Company.6 Consider, select, nominate, appoint and propose Company auditor emolument; determine auditor

independency; hold a meeting with auditors at least once a year without management participation.7. Concur with appointment, transfer and laurels of the Chief of Internal Control Unit; consider

concurring with plans, budgets and manpower of the Unit.8. Furnish a corporate governance report of the Audit Committee inside the Company’s annual

report, signed by the Chairman of Audit Committee and containing at least the following key attributes:(1) Accuracy and reliability of the financial report.(2) Adequacy of the internal control.(3) Compliance with the law on securities, SET requirements or applicable laws.(4) Auditors’ fitness.(5) Transactions with potential conflicts of interests.(6) Audit Committee meetings and attendance of individual members.(7) Opinions or notices arising out of performing duties. (8) Any other matters the shareholders and general investors should know.

9. In performing its duties, the Audit Committee is empowered to invite the management or pertaining staff of the Company to give opinions, join a meeting, or submit documents deemed relevant ornecessary.

10. Have power to hire a consultant or third parties to provide opinions or consultancy in case of necessity, the expenses borne by the Company.

1. Mr. Panja Senadisai Chairman

2. Mr. Ajarin Sarasas Director

3. Mr. Paitoon Taveebhol Director



11. Consider and review the scope of powers and duties and responsibilities and evaluate the Audit Committee’s performance regularly on a yearly basis.

12. Perform any acts designated by the Board of Directors.13. Report the Audit Committee’s performance to the Board of Directors every quarter.14. Conduct an audit and report the preliminary audit to the SEC Office and auditors. In case the Audit

Committee is informed by the auditors of any reasonably suspicious events, action must be taken within 30 days from its receipt of such notification.

15. Acknowledge a copy of report of Company directors and executives regarding their or other related persons’ conflicts of interests in relation to the business management of the Company or its subsidiaries, subject to the criteria, conditions and methods stipulated under the Capital Market Commission‘s notifications.

16. Review the corporate governance policy and business ethics; monitor compliance with the policy regularly at least once a year.

17. Consider appointing working groups to undertake supporting corporate governance and business ethics as appropriate.

Nomination and Remuneration Committee consists of Chairman who is an independent director

Mr. Thanit Viriyarat is a Secretary to the Nomination and Compensation Committee Note: - Mr. Mr. Thanit Viriyarat is a Secretary to the Nomination and Compensation Committee

replacing Mr. Wasant Chawajaroenpan from January 13, 2011The Compensation Committee holds a term of three years.

Powers and Duties of the Nomination and Remuneration Committee1. To formulate policies for submission to the board of directors of the company as follows.

1.1 Policy, criteria and method for selection of the directors and managing director1.2 Policy, criteria and method for payment of remunerations and other benefits to the board

of directors of the company, subcommittees and managing directors.2. To select and nominate the persons with suitable qualifications to the board of directors of

the company as follows.2.1 Directors

1. Mr. Sobson Ketsuwan Chairman

2. Mr. Yongyuth Kitaphanich Director






2.2 Subcommittee members of various sub-committee assigned with authority, duty and responsibility directly from the board of directors of the company.

2.3 Managing director and deputy managing director. For the deputy managing director position, the managing director is required to make an initial screen before submission is made to the selection committee for approval and to the board of directors for consideration.

3. To supervise the board of directors of the company to ensure that its size and components are suitable to the organization, including adjustment in response to the changing environment

4. To supervise directors and managing director to ensure that their remuneration is suitable to their duties and responsibilities assigned.

5. To determine guideline, present and approve the performance evaluation on the directors and managing director for adjustment of remuneration and bonus payment annually.

6. To monitor the preparation of the succession plan for the positions of the managing director and deputy managing director for submission to the board of director of the company for consideration at least twice a year.

7. To submit a performance report to the board of directors of the company once a year.8. Perform any acts designated by the board of directors.

Risk Management Committee consists of

Mr. Thanit Viriyarat is a Secretary to the Nomination and Compensation Committee

Powers and Duties of the Risk Management Committee 1. To supervision of the other sections in the formulation and implementation of risk management plan.2. To advice and approve the principles of planing for risk management of the organization and

adequate control measures 3. To responsible for the preparation of risk assessment and oversight of the implemention of risk

management plan in corporate risk.

1. Mr. Verayut Kitaphanich Chairman

2. Mr. Yongkiat Kitaphanich Director

3. Ms. Napatsorn Kitaphanich Director

4. Mr. Worapote Chutchaikulsiri Director

5. Mr. Wasant Chawajaroenpan Director

6. Mr. Phakorn Thongcharoen Director

7. Mr. Wichai Srimavon Director

8. Mrs. Jiraporn Srisomwong Director

9. Mr. Thanit Viriyarat Director




4. To submit the matter to the Executive committee or the Board of Directors to determine the direction of management, the risk management strategy and the risks acceptable for review and approval.

5. To held a meeting to review the implementation of risk management system with reporting to the Executive committee or the Board of Directors.

Management consists of

Powers and Duties of the President1. To prepare the policy, business conduct strategy guidelines, target, work plan and annual budget

of the company and subsidiaries submitted to the Board of Directors for the approval.2. To undertake in accordance with the policy, business conduct strategy guidelines, target, work plan

and annual budget of the company and subsidiaries as approved by the Board of Directors.3. To report the monthly and quarterly business performance of the company and subsidiaries

in comparison of the plan and budget to the Company’s Board of Directors together with the recommendations.

4. To approve the expenses and investment capital that are not in the annual budget for not exceeding one million baht on each occasion but the report has to be made to the Board of Directors for acknowledgement.

5. Other matters assigned by the board of directors. In this regard, the exercise of power of the President is not included (Must not be contradicted with

the Security and Exchange Commission’s Criteria) the power in approving the transaction causing the President or contradicted persons to have the interest or may have the conflict of interest in otherwise manners with the company and subsidiaries including the transaction provided to have the approval of the meeting of the Board of Directors or shareholders such as the inter-related transactions or acquisition or disposal of the assets of the Company and subsidiaries.

1. Mr. Verayut Kitaphanich President

2. Mr. Yongkiat Kitaphanich Executive Vice President

3. Ms. Napatsorn Kitaphanich Vice President - President Office

4. Mr. Worapote Chutchaikulsiri Vice President - Finance& Accounting

5. Mr. Wasant Chawajaroenpan Vice President-Operation SBM/ ICP

6. Mr. Phakorn Thongcharoen Vice President-Operation SAT/ BSK

7. Mr. Wichai Srimavon Vice President - Procurement and Quality Development

8. Mrs. Jiraporn Srisomwong Vice President - Information Technology

9. Mr. Thanit Viriyarat Vice President - Human Resources and Administration




Evaluating President’s Resulting PerformanceThe Board of Directors requires the President’s resulting performance to be evaluated regularly on a yearly basis against the goals and evaluation criteria linked to the success of the strategic plan in order to determine appropriately his remuneration and incentive reward.

Structure of Board of Directors and its ElementThe number of Board members should fit the size of the business. Currently, there are 10 directors, 7 of which are non-executive directors and the remaining 3 are not. The Company has 5 independent directors.

Independent Director is 50% of the Board of Directors, consists of;

The Company definition of Independent Director as following;

1. A person holding no more than 0.5% of paid-up capital of the Company, its subsidiaries or affiliates companies, this shall include shares held by relating persons.

2. A non-executive directors in the management of the Company, its subsidiaries, affiliates or major shareholders, a person who is not an authorized director, an employee or consultant regularly receiving monthly salary from the Company, its subsidiaries, affiliates or major shareholders.

3. A director with no direct or indirect benefit or interest in financial or in management aspects of the Company.

4. A director who is not the auditor of the Company, any subsidiary company, affiliates or juristic person that may have conflicts.

5. A director who is not any professional service provider who receives the service charge of more than 2 million baht per annum from the Company, any subsidiary company, associated company or juristic person that may have conflicts.

6. A director who is neither relsted or nor be a closed relative of the Company’s excutives or major shareholders.

7. A director not appointed as a representative to maintain the interests of the Company’s directors or major shareholders

8. A person who is able to perform duties, express opinions or report results of performances based on his duties entrusted by the Board of Directors independently.

1. Mr. Sansern Wongcha-um

2. Mr. Panja Senadisai

3. Mr. Sobson Ketsuwan

4. Mr. Ajarin Sarasas

5. Mr. Paitoon Taveebhol

Firstname - Lastname



Nominating of Directors and ExecutivesTo make it to be conformed to the corporate governance policy, the Company’s board of directors has set up the policy, criteria and methods of the recruitment of the Company’s directors and high ranking executives, assigning the nomination and remuneration committee to recruit the qualified persons to be directors of the Company. The qualified persons shall be selected by the nomination and remuneration committee who set up the criteria and procedures for the recruitment, however, depending on the Company’s situation during that time.

Directors and Executives DevelopmentBoard of directors has promoted, supported, provided the training and knowledge relating to the directors and executives to have them continuously improved. For examples, to promote the meeting between directors and high executives for the exchange of each other’s ideas and opinions, to encourage the preparation of the potential development plan of the president, vice president by assigning the nomination and remuneration committee to pursue the preparation of the plan to succeed the positions of president and vice president to guarantee that the Company has employed the executives with sufficient knowledge and competency to perform their duties as follows:

1. The Company’s board of directors has determined to provide the executive potential development plan to perform succession plan consisting of president and all vice president.

2. The nomination and remuneration committee shall set up the knowledge, competency and experiences of each position in order to recruit the qualified executives as required who are able to inherit the words of each position.

3. President shall assess the performance and knowledge of executives with comparable qualifications to the required competency in order to prepare the individual development plan to reduce the competency gap.

4. Human resources executive is assigned to supervise and follow up the training and development of knowledge and competency of the successors of the vice president positions.

5. President shall arrange for the work flow, responsibility of executives with comparable qualifica-tions and to assign the vice president to attend the meeting of the executive board for gaining experiences and be ready for the organizational management in the future.

6. The president shall report the operation and development performances according to the individual development plan of executives with comparable qualification to the nomination and remuneration committee twice a year.

7. Nomination and remuneration committee shall regularly review and conclude the result of the succession plan consisting of president and vice president and report to the Company’s Board of Directors for acknowledgement on twice a year basis.



The Board of Directors and Management

Mr. Sansern Wongcha-um Age 63 Independent Director/ Chairman of the Board

Mr. Yongyuth Kitaphanich Age 59 Director/ Vice Chairman Executive Board Authorized Director Education

Mini MBA, Thammasart University Bachelor: Commerce and Accountancy,

Chulalongkorn University Academic of National Defense College of Thailand, 9

Training Program Director Certification Program (DCP) 2/2000 Role of the Chairman (RCP) 7/2000

Share held 2.22%

Work experience in the last 5 years 2004 – Present Vice Chairman/ Executive Board, Somboon Advance Technology Public Company Limited1998 – Present Vice Chairman, Tsuchiyoshi Somboon Coated Sand Co.,Ltd.1998 – Present Director, Yamada Somboon Company Limited1994 – Present Director, Somboon Malleable Iron Industrial Company Limited1994 – Present Director, Bangkok Spring Industrial Company Limited

Education Master of Business Admin,

University of Bridgeport, USA Bachelor of Economic,

Thammasart University Academic of National Defense College of Thailand, 37

Training Program Role of the Chiarman Program (RCP) 8/2003 Finance for Non-Finance Directors (FND) 17/2005 Director Accreditation Program (DAP) 42/2005

Share held None

Work experience in the last 5 years 2008 – Present Chairman/Independent Director, Somboon Advance Technology Public Company Limited2008 – Present Chairman, Bualuang Securities Public Company Limited2008 – Present Chairman of the audit committee/Independent Director, The Erawan Group Public Company Limited2008 – Present Chairman of the nomination and remuneration committee/

Independent Director, Deves Insurance Public Company Limited2006 – 2008 Deputy Minister of Transport, Transportation Ministry2003 – 2006 Honorary Director, National Institute of Development Administration



Mr. Panja Senadisai Age 62 Independent Director Chairman of the Audit & CG Committee Member of the Nomination & Remuneration

Committee

Mr. Sobson Ketsuwan Age 65 Independent Director Chairman of the Executive Board

Education Master of Business Administration Suffolk University (USA)

Training Program Director Certification Program (DCP) 20/2002 Audit Committee Program (ACP) 2/2004 Role of Compensation Committee (RCC) 2/2007

Share held None

Work experience in the last 5 years 2007 – Present Member of the Nomination & Remuneration Committee, Somboon Advance Technology Public Company Limited2006 – Present Chiarman of the Audit& CG Committee, Somboon Advance Technology Public Company Limited2005 – Present Director/ Chairman of the Audit Committee, Pylon Public Company Limited2004 – Present - Independent Director, Somboon Advance Technology Public Company Limited - Chiarman, Deva Property Public Conpany limited2003 – Present Director/ Member of the Audit Committee Rasa Properties Development Public Company Limited2002 – Present Director/ Member of the Audit Committee/ Chairman of the Compensation

Committee, Trinity Wattana Public Company Limited1983 – Present Director, KCE Electronics Public Company Limited2006 – 2009 Director/ Executive Board/ Remuneration Committee, Government Saving Bank2004 – 2007 Chairman of the Remuneration Committee, Somboon Advance Technology Public Company Limited2004 – 2006 Member of the Audit Committee, Somboon Advance Technology Public Company Limited1999 – 2006 Director/ Advisor/ Member of the Compensation Committee, CVD Entertainment Public Company Limited1993 – 2007 Director/ Member of the Compensation Committee, SMC Motors Public Company Limited

Education B.Eng. (Honors) Industrial Eng,

Chulalongkorn University, 1996 M.A.B. General Management,

University of Southern California M.S. Industrial & System Engineering,

U of Southern California International Senior Management Program (ISMP),

Harvard Business School

Training Program Finance for Non-Finance Directors (FND) 37/2007 Audit Committee Program (ACP) 19/2007 Director Certification Program (DCP) 97/2007

Share held None

Work experience in the last 5 years 2008 – Present Chairman of the Executive Board, Somboon Advance Technology Public Company Limited2007 – Present Independent Director, Somboon Advance Technology Public Company Limited2009 – Present Advisor, Noritake (Thailand) Company Limited2003 – 2007 Advisor to the Management, The Siam Cement Public Company Limited2002 – 2004 Chairman, The Siam Cement Industry Association/The Federation of Thai Industries

Committee



Mr. Ajarin Sarasas Age 67 Member of the Audit and CG Committee Independent Director

Mr. Paitoon Taveebhol Age 60 Chairman of the Nomination & Remuneration Committee Member of the Audit & CG Committee Independent Director

Education Honorary Doctor of Business Administration Industrial Management

Kensington University, USA Academic of National Defense College of Thailand, 1 Diploma/License Engineer: Industrial Engineering Degree

Training Program Director Certification Program (DCP)

Share held None

Work experience in the last 5 years2009 – Present Member of the Audit& CG committee/ Independent Director, Somboon Advance Technology Public Company LimitedPresent TQM Promotion ConsultantPresent Quality Control Promotion LecturerPresent Honorary Chairman, Automotive Industry Club, Federationof Thai IndustryPresent Advisor to Board of Directors, Thailand Automotive InstitutePresent Chairman, Steering Committee, Skill Certification System Thailand Automotive InstitutePresent Advisor, Technological Promotion Association (Thai-Japan)Present Advisor, Thai Automotive Industry AssociationPresent Advisor, Cobra International Group2006 – 2009 Operation Director, Summit Auto Seat Industry Company Limited2004 – 2006 Managing Director, Summit Auto Body Industry Company Limited

Education M.B.A., Kasetsart University B.A. (Accounting), Ramkhamhaeng University Certificate in Auditing, Thammasat University

Training Program Director Accreditation Program (DAP) 4/2003 Director Certification Program (DCP) 38/2003 Audit Committee Program (ACP) 6/2005 Role of the Chairman (RCP) 11/2005 Chartered Director Program of the Audit Committee Monitoring Fraud Risk Management

Share held None

Work experience in the last 5 year 2009 – Present Chairman of the Nomination & Remuneration Committee, Somboon Advance Technology Public Company Limited2008 – Present Independent Director/ Member of the Audit& CG Committee, Somboon Advance Technology Public Company Limited2008 – Present Audit and Evaluation Committee, Walailak University2004 – Present President, Mater Dei Institute2002 – Present Chairman of the Audit Committee/ Independent Director, Central Pattana Public Company Limited2003 – 2005 Managing Director, BT Business Consulting Company Limited1991 – 2005 President& Secretary General, The ASEAN Federation of Accountants

p



Mr. Verayut Kitaphanich Age 53 Director Executive Board Authorized Director President

Mr. Yongkiat Kitaphanich Age 48 Director Authorized Director Executive Vice President

Education Bachelor of Mechanical Eng.,

Eckert Technology Institute (Germany)

Training Program Director Accreditation Program (DAP) 29/2004

Share held 2.95%

Work experience in the last 5 year 2004 – Present Director/ Executive Board/ President, Somboon Advance Technology Public Company Limited1994 – Present Director/ President, Somboon Malleable Iron Industrial Company Limited1994 – Present Director/ President, Bangkok Spring Industrial Company Limited1994 – Present Director/ Vice President, Nisshinbo Somboon Automotive Company Limited1994 – Present Director/ Vice President, Somboon Somic Manufacturing Company Limited

Education M.B.A., National Institute of Development Administration Master of Industrial Engineering, Waseda University (Japan) Bachelor of Mechanical Engineering, King Mongkut’s Institute Technology Ladkrabang

Training Program Director Accreditation Program (DAP) 28/2004 Finance for Non-Finance Directors (FND) 15/2005 Director Certification Program (DCP) 53/2005

Share held 2.12%

Work experience in the last 5 year 2007 – Present Executive Vice President, Somboon Advance Technology Public Company Limited Somboon Malleable Iron Industrial Company Limited Bangkok Spring Industrial Company Limited2007 – Present Chairman, International Casting Products Company Limited2006 – 2007 Senior Vice President – Operation, Somboon Advance Technology Public Company Limited2005 – 2006 Senior Vice President, Somboon Advance Technology Public Company Limited2004 – 2005 Vice President – Operation, Bangkok Spring Industrial Company Limited2009 – Present Executive Director, Technology Promotion Association (Thai-Japan)2007 – Present Honorary President, Thai Auto-Parts Manufacturers Association2006 – Present Senior Vice President, Thai Automotive Industry Association2000 – Present Advisor, Thai-Nichi Institute of Technology



Ms. Napatsorn Kitaphanich Age 47 Director Authorized Director Vice President – President Office

Mr. Surasak Khaoroptham Age 45 Director Executive Board Member of the Nomination & Remuneration Committee

Education M.B.A., Sasin Graduate Institute of Business Administration of

Chulalongkorn University Bachelor of Business Administration in Finance and Management (BBA),

Simon fraser University (Canada)


Share held 1.65%

Work experience in the last 5 year2007 – Present Vice President - President Office, Somboon Advance Technology Public Company Limited2007 – Present Director, International Casting Products Company Limited2007 – Present Director/ Executive Director/ Member of the Nomination &

Remuneration Committee, Thai Listed Companies Association2004 – Present Director, Somboon Advance Technology Public Company Limited1997 – Present Director, Bangkok Spring Industrial Company Limited2004 – 2006 General Manager - Marketing Business Development, Somboon Advance Technology Public Company Limited

Education Master of Business Administration, University of Pennsylvania (USA) Master of Science, Operation Research, University of Michigan (USA) Bachelor of Electrical Engineering,

King Mongkut’s Institute Technology Ladkrabang


Share held None

Work experience in the last 5 year 2008 – Present Director, SNC Former Public Company Limited2008 – Present Director, Asiasoft Corporation Public Company Limited2007 – Present Member of the Nomination& Remuneration Committee, Somboon Advance Technology Public Company Limited2006 – Present Executive Board, Somboon Advance Technology Public Company Limited2006 – Present Chairman, Asia Books Company Limited2006 – Present Director, Mermaid Maritime Public Company Limited2006 – Present Director, Easy Buy Public Company Limited2004 – Present Director, Somboon Advance Technology Public Company Limited2003 – Present Managing Director, Altus Advisory Company Limited



Mr. Thanit Viriyarat Age 56 Vice President Human Resources & Administration

Mr. Worapote Chutchaikulsiri Age 53 Vice President Finance& Accounting

Education M.A. Public and Private Management National Institute

of Development Administration (NIDA) B.A. Public Administration - Major in Personnel,

Chulalongkorn University, Faculty of Political Science

Share held None

Work experience in the last 5 year Present Vice President - Human Resources & Administration, Somboon Advance Technology Public Company Limited2010 – Present Independent Consultant of Human Resources Management2008 – 2010 Head of Management and Services Department, American International Assurance Co., Ltd.2006 – 2008 Vice President - Human Resources, Dusit Thani Public Company Limited2003 – 2005 Duty Project Manager, Management Solutions International Co., Ltd.

Education M.A. Executive Master of Accountancy,

Chulalongkorn University Bachelor of Commerce and Accountancy,

Thammasat University

Share held None

Work experience in the last 5 year 2007 – Present Director, International Casting Products Company Limited2004 – Present Vice President - Finance&Accounting, Somboon Advance Technology Public Company Limited2004 – 2006 Vice President - Finance&Administration, Somboon Advance Technology Public Company Limited2002 – 2004 Executive Director, Bangkok Spring Industrial Company Limited



Mr. Wichai Srimavon Age 49 Vice President Procurement & Quality Development

Mr. Wasant Chawajaroenpan Age 47 Vice President Operation SBM/ ICP

Education Master of Education in Quality Management,

Suan Sunandha Rajabhat University Bachelor of Public Administration, Sukhothai University

Share held None

Work experience in the last 5 year2008 – Present Vice President - Procurement& Quality Development, Somboon Advance Technology Public Company Limited2007 – 2008 Vice President - Procurement& Logistics, Somboon Advance Technology Public Company Limited2005 – 2006 General Manager Corporate Planning, Somboon Advance Technology Public Company Limited2004 – 2005 General Manager Quality Development, Somboon Advance Technology Public Company Limited2000 – 2004 Director - Research&Development, Bangkok Spring Industrial Company Limited

Education Master of Science in Business and Administration,

Strayer College (USA) Bachelor of Science,

Chiangmai University

Share held None

Work experience in the last 5 year 2008 – Present Vice President Operations SBM/ ICP, Somboon Advance Technology Public Company Limited2007 – Present Director, International Casting Products Company Limited2007 – 2008 Vice President – Human Resources& Administration, Somboon Advance Technology Public Company Limited2002 – 2006 Managing Director, Somboon Malleable Iron Industrial Company Limited



Mr. Phakorn Thongcharoen Age 49 Vice President Operation SAT/ BSK

Mrs. Jiraporn Srisomwong Age 44 Vice President Information Technology

Education Bachelor of Mechanical Engineering,

King Mongkut’s Institute Technology Ladkrabang

Mini MBA,

Eastern Asia University

Share held None

Work experience in the last 5 year

2008 – Present Vice President Operation SAT/ BSK,

Somboon Advance Technology Public Company Limited

2004 – 2008 Factory Manager,

Polymatech (Thailand) Company Limited

Education M.B.A.,

University of San Francisco, USA

Bachelor of Commerce and Accountancy,

Chulalongkorn University

Share held None

Work experience in the last 5 year

2008 – Present Vice President Information Technology,

Somboon Advance Technology Public Company Limited

2004 – 2008 Country IT Manager (Thailand and Malaysia),

Tyco Electronics (Thailand) Company Limited


Shareholding of the Board of Directors and Management

Shareholding of the Board of Directors and Management as at December 30, 2010

1. Mr. Sansern Wongcha-um - - -

2. Mr. Yongyuth Kitaphanich 7,215,975 7,215,975 6,660,900 6,660,900 -

3. Mr. Panja Senadisai - - - 20,000 (20,000)

4. Mr. Sobson Ketsuwan - - - - -

5. Mr. Ajarin Sarasas - - - - -

6. Mr. Paitoon Taveebhol - - - - -

7. Mr. Verayut Kitaphanich 10,009,274 10,909,274 10,070,100 10,410,100 (400,826)

8. Mr. Yongkiat Kitaphanich 7,215,975 7,215,975 6,660,900 6,660,900 -

9. Mrs. Napatsorn Kitaphanich 5,612,641 5,612,641 5,180,900 5,180,900 -

10. Mr. Surasak Khaoroptham - - - - -

11. Mr. Worapote Chutchaikulsiri - - - - -

12. Mr. Wasant Chawajaroenpan - - - - -

13. Mr. Wichai Srimavon - - - - -

14. Ms. Jiraporn Srisomwong - - - - -

15. Mr. Phakorn Thongcharoen - - - - -

16. Mr. Thanit Viriyarat - - - - -

Name

Ordinary sharesAugust 4, 2010Capital

Increase

December 30, 2010

June 29, 2010

December 30, 2009

Increase (Decrease)

- Information from report on securities holding of the Board of Directors as at December 30, 2010- Registered capital of the company was 300 million Baht as at December 30, 2009- On August 3, 2010, the Company has added another 40 million; total registered capital is 340

million Baht by offering warrants to buy new shares to be transferred to existing shareholders on the ratio of 12 shares for 1 warrants of 25 million shares. The Company offered Newly Issued Shares of 15 million shares to the private placement. So., the ownership of the Board of Directors; Mr. Yongyuth Kitaphanich, Mr. Verayuth Kitaphanich, Mr. Yongkiat Kitaphanich and Ms. Napatsorn Kitaphanich increased as at 4 August 2553.


Remunerations

The director remuneration policy has been clearly and transparently established by the Board of Directors, with the Nomination and Compensation Committee considering the policy for such directors and top management as President and Vice President. The final policy will then be proposed to the Board of Directors for consideration before presenting to the shareholders meeting for consideration and approval.

1. The Remuneration of Directors Policy and Payment Criteria The remunerations of directors determined by the Board of Directors comprise 1) yearly director

bonus 2) monthly paid remuneration and 3) remuneration paid as meeting allowance with regard to the tasks, responsibilities and performance of directors being beneficial to the Company, compared to other companies of comparable size and nature of business. Directors will receive remuneration commensurate with more duties and responsibilities assigned.

2. The Remuneration of Management Policy and Payment Criteria The Nomination and Compensation Committee will consider and review the President’s remuneration

and propose it to the Board of Directors for consideration and approval. Such remuneration will be appropriately fixed based on the remuneration structure of the Company and compared to 1) surveyed information about remuneration payment by recognized institutes, organizations and entities 2) the growth rate of the gross domestic product, inflation rate and net profits 5 years backward, including his performance and consistency with the duties and responsibilities assigned.

The President will consider the suitability of determining remunerations and adjusting yearly wages

of the Vice President, with consideration of his performance and Company results of operations and his attainment to the pre-defined goals.

Remunerations


Remunerations

Remunerations of Directors

1. Monthly compensation and meeting allowance

Board of DirectorsChairman 18,000 Baht/ Month and 27,000 Baht/ MeetingVice Chairman 12,500 Baht/ Month and 18,750 Baht/ MeetingOther Board members 10,000 Baht/ Month and 15,000 Baht/ Meeting

Sub Committee1. Executive Board Chairperson 45,000 Baht/ Month Other Board members 30,000 Baht/ Month who are not Company’s executive2. Audit and Corporate Governance Committee Chairperson 22,500 Baht/ Meeting Other Board members 15,000 Baht/ Meeting3. Nomination and Remuneration Committee Chairperson 22,500 Baht/ Meeting Other Board members 15,000 Baht/ Meeting

2. Bonus The Remuneration of Board of Directors in form of allowances and remuneration totally Baht

6,743,249.60 are as following;


Note:1. Mr. Ajarin Sarasas is an independent director and member of the audit & corporate governance

committee from December 16, 20092. Bonus was calculated from the 2009 Company’s business performance but was paid in the year 2010

Remunerations of Board of Directors by individual in year 2010 are as following;

Name Total

Ordinary shares

Nom

inat

ion&

Rem

uner

ation

Co

mm

ittee

Audi

t& C

GCo

mm

ittee

SBM

BSK

BSK

Boar

d of

DIre

ctors

Exec

utive

Boa

rd

Bonu

s of 2

008

1. Mr. Sansern Wongcha-um 249,441.77 513,000 - - - - - - 762,441.77

2. Mr. Yongyuth Kitaphanich 173,223.45 356,250 360,000 - - 48,000 48,000 - 985,473.45

3. Mr. Panja Senadisai 138,578.76 285,000 - 112,500 45,000 - - - 581,078.76

4. Mr. Sobson Ketsuwan 138,578.76 255,000 540,000 - - - - - 933,578.76

5. Mr. Ajarin Sarasas1 6,005.08 285,000 - 75,000 - - - - 366,005.08

6. Mr. Paitoon Taveebhol 138,578.76 285,000 - 75,000 67,500 - - - 566,078.76

7. Mr. Verayut Kitaphanich 138,578.76 285,000 - - - 48,000 48,000 - 519,578.76

8. Mr. Yongkiat Kitaphanich 138,578.76 285,000 - - - 48,000 48,000 60,000 579,578.76

9. Ms. Napatsorn Kitaphanich 138,578.76 285,000 - - - - 48,000 48,000 519,578.76

10. Mr. Surasak Khaoroptham 138,578.76 285,000 360,000 - 45,000 - - - 828,578.76

Director who had no longer be a director but duly received remuneration in year 2009

11. Mr. Rangsin Suebsaeng 101,277.98 - - - - - - - 101,277.98

Total 6,743,249.60

Remunerations


Remunerations of Directors

1. Remuneration in cash for the Company’s executives in the form of salary and bonus

Note:- Year 2010 consists of 9 managements are Mr. Verayut Kitaphanich, Mr. Yongkiat Kitaphanich,

Mr. Yoshitaka Obayashi (resigned during 2010), Mr. Worapote Chutchaikulsiri, Mr. Wasant Chawajaroenpan, Mr. Wichai Srimavon, Ms. Napatsorn Kitaphanich, Mrs. Jiraporn Srisomwong and Mr. Phakorn Thongcharoen

- Year 2009 consists of 9 managements are Mr. Verayut Kitaphanich, Mr. Yongkiat Kitaphanich, Mr. Yoshitaka Obayashi, Mr. Worapote Chutchaikulsiri, Mr. Wasant Chawajaroenpan, Mr. Wichai Srimavon, Ms. Napatsorn Kitaphanich, Mrs. Jiraporn Srisomwong and Mr. Phakorn Thongcharoen

2. Other remunerations

Contributions to the Provident Fund

Note: - Year 2010 consists of 8 managements are Mr. Verayut Kitaphanich, Mr. Yongkiat Kitaphanich,

Mr. Worapote Chutchaikulsiri, Mr. Wasant Chawajaroenpan, Mr. Wichai Srimavon, Ms. Napatsorn Kitaphanich, Mrs. Jiraporn Srisomwong and Mr. Phakorn Thongcharoen

- Year 2009 consists of 8 managements are Mr. Verayut Kitaphanich, Mr. Yongkiat Kitaphanich, Mr. Worapote Chutchaikulsiri, Mr. Wasant Chawajaroenpan, Mr. Wichai Srimavon, Ms. Napatsorn Kitaphanich, Mr. Phakorn Thongcharoen and Mrs. Jiraporn Srisomwong

- Adjusted rate of Provident Fund Contribution from 3% to 3-5% base on year of service.

Salary 9 26,633,850.00 9 26,132,933.33

Bonus 9 6,716,858.28 9 5,552,857.16

Total 33,350,708.28 31,685,790.49

20092010Units :BahtNumber of executives

Number of executives

Provident Fund 8 917,384.20 8 621,196.50

2009Person2010PersonUnits :Baht

Remunerations


Internal Control

The Board meeting No. 3/2011 held on February 24, 2011 was joined by the audit& corporate governance committee to give comments about the adequacy and suitability of the internal control system with reference to the “Internal Control System Adequacy Assessment Form” of the Office of Securities and Exchange Commission.

The Audit Committee considered and reviewed the audit report and gave suggestions about the internal control, focusing on making the operating audit continuously effective and efficient and continuously report to the Company’s directors. Regarding assets, the Company has such a good protection system that no fraud or misuse of assets was found in the Company. The result from the review is in accordance with the specified guideline, regulation by the government sector and corporate governance. From the consultation with the auditor, it is advisable that the Company has prepared the financial statements in accordance with the accounting standards, and had the sufficient internal control on organization, environment, risk management, and operation control, information system and communication. The follow-up results led to the believe that there were no significant mistakes as summarized below

1. Organization and environment The company has set it business goals by determining the business plan and budget for the year

2010 and key performance indicator to increase financial liquidity and strength and business stability in response to the needs of the customers for maximum satisfaction, efficient pro-cess development throughout the supply chain, including personnel development in response to the changes in the business, wage adjustment and incentive payment for the year 2010. In addition, the performance assessment has been improved as part of the assessment on competence and compliance of behavior of the employees with the corporate culture in coordination with the corporate culture to ensure greater benefits on quality performance development.

Structure of command was defined based on function lines which are consistent with the business operation strategies and corporate governance, with the Internal Audit Department being an independent unit reporting directly to the audit and corporate governance committee. Achievement evaluation was improved in the part of employee competency and behavioral evaluation based on corporate culture consistently with corporate behaviors to benefit better operating performance development. The corporate governance policy and business ethics were promoted by the Company to be clear and transparent. Policies and operating plans were established with regard to fairness toward employees, customers, partners, and responsibility toward the shareholders, society and environment. The Corporate Governance Policy and Business Ethics and Working Practice Handbooks and corporate social responsibility were made available

Internal Control


Internal Control

emphasizing on an equitable preservation of interests of investors and all stakeholder parties. Disclosure with accuracy, completeness, transparency and timeliness, effective and adequate internal control system, and standard and effective risk management system were announced for use on January 1, 2011, with employees trained to have accountability toward being an organization with governance. The Company required reporting on the conduct of corporate governance and business ethics to the Audit Committee at least 4 times a year.

The Company is committed to developing its manufacturing processes for standard products which are internationally recognized and put heavy emphasis on environmental preservation. ISO/TS 16949 and ISO 14001 certified, the Company has an independent unit separated from its production line and undertaking inspection and monitoring for compliance with requirements. For financial transactions, purchasing and hiring, the Company put in place a “Power of Implementation” and “Purchasing/Hiring Control” Handbooks describing criteria conditions and authority to approve payments and execute purchase/hiring contracts on a prudent fashion in order to prevent fraudulently financial transactions.

2. Risk management As risk management policy is important, a risk management committee was appointed by

the Company consisting of directors and line management who undertake the assessment of external risk factors including economic conditions, state policies, and varying prices of raw materials and such internal factors as having an impact over the Company’s goals and business operation. Persons responsible for risks in units were fixed. Risk management was declared to be the responsibility of all executives. Risk management was planned and risk management measures were established. Risk factors with possible impact to the Company’s goals and business operation were assessed. Risk management by units within the organization was monitored. Reports by the risk management committee have been submitted to the board of director on a continual basis. Adequacy and suitability of the risk management have been closely inspected by the audit committee. The Company will provide a risk management plan focusing mainly on being consistent with its strategic plans, and equip staff at every level with more knowledge, understanding and awareness toward risk management.

3. Operational control of the executives The Board of Directors formed 3 sub-committees consisting of the Executive Board, the Audit and

Corporate Governance Committee, the Nomination and Remuneration Committee, all performing under the scope of powers and duties assigned. (1) Scope of powers and duties and approvable authority limits of management in all

departments and in all levels have been clearly defined in writing, with authorized positions empowered to approval budgets, direct, incur debts, and settle debts specified in writing, and suitability review at least once a year.



(2) Perform systems of operations and approval power and duties have been established following business description and organization.

(3) Listing regulations or article of association which concerning the Company’s business to ensure that every working unit has strictly complied with the laws

In addition, the Audit Committee considering, reviews and approves the annual audit plan so as to cover every high-risk performance process and expectations of Company-related individuals. As a result, the Company is confident that units have an internal control adequately in their performance to respond to risks in all areas including finance, performance, and compliance with laws, regulations, ordinance and rules. Also, main issues and problems discovered through the audits of internal and external auditors are addressed, closely monitored, and reported to the management and managerial person of the units involved for corrective actions and establishing protective measures to prevent reoccurrences.

In the event of transaction made with a corporate or an individual related to the Company possibly leading to a conflict of interest between the Company and that corporate or individual, such transaction must go through the same approval process based on Company ordinances as a typical transaction does. The transaction-related persons undertake to consider whether the transaction is reasonable, normal and lawful with regard to the maximum benefits of the Company and its shareholders as if it was made with an outside individual. and the person with the conflict of interest is not allowed to cast a vote.

4. Information System and communication To support its decision making, the board of directors is provided with important information in

the form of an analytic report containing principle and reason comparison and supporting documents delivered 7 days in advance. The Company secretary contributes to giving advices about article of association and rules of the SET, SEC and others that the Board needs to know, overseeing board activities, coordinating to ensure compliance with board resolutions, and acting as a center of making and filing documentation, such as director registry, notices of board meetings, minutes of board meetings, notices and minutes of shareholders meetings in a systematic way, so the shareholders and able to examine the suitability of the performance of the directors.

In addition, supporting documents for accounting records and accounts are fully kept by categories for transparency and as operational information.



The audit and corporate governance committee, auditors, internal audit department and connected person jointly considered the making of the Company financial statements every quarter to ensure that the generally accepted accounting standard had been used and fits the nature of the Company businesses, including appropriate disclosure.

During 2009-2010, the information system was developed by way of implementing an Enterprise Resource Planning (ERP) system to develop the resource planning system for maximum benefits throughout the organization so as to advance the Company’s information technology potential in response to business demands which finished in system installation as plan.

5. Monitoring System With 9 board meetings held in 2010, the results of performance were monitored as to whether

it met the goals set. What also in place is a hierarchical performance monitoring system that monitors the board of directors, executive board and management in order to follow up the goals and supervise implementations based upon strategic plans, work plans and projects contained in the annual business plan approved by the board of directors regularly on a monthly basis and to solve potentially arising problems and adjust the operational plan in line with the changing situations. If the results of implementation deviate from the goals set, the persons in charge are required to provide a performance review report and analyze the causes and join the consideration to approve a problem solving plan, with subsequent performance reported on a continual basis.

The Company caused to be conducted, a regular check of compliance with the internal control by The internal control is responsible for the internal control, following the plan as well as independently reporting to the Audit Committee. In 2010, the Audit Committee had 5 meetings in total.


Description of important items Conditions of price/ Necessity

2009 2010

Total amountremaining

(Million Baht)

List of ordinary transactions

1. SAT sold scraps material to SBM

2. SAT was the long-term loan lender to

SBM

3. SAT was the short-term loan lender of

SBM

4. SAT received interest of loan from SBM

5. SAT paid utilities fee for SBM

6. SAT received utilities payment from SBM

7. SAT received management fee from

SBM

0.59

265.64

90.00

16.76

0.02

13.70

68.53

2.06

-

310.00

14.70

0.03

21.74

68.84

Market price/ to increase income to SAT

by selling scraps material which was normal

loss from the production

According to loan agreement/ as a result

from re-structure of the group of Company

(See details in the notes for financial

statement)

According to loan agreement

Charged interest at the fixed rate, MLR- fixed

rate a year and MMR a year

Price was close to the Cost/ SAT used utilities

of SBM

Price was close to the Cost/ SBM used

utilities of SAT

Price was close to the Cost/ Services for SBM

The Company and its subsidiaries related transactions with person(s) who would have been involved in the dispute during the year 2009 and 2010 were as follows;

Somboon Malleable Iron Industrial Co., Ltd. (SBM)

Related Transaction

Remark: Item 1 - 7 are the items indicated in the notes for financial statement.

Related Transaction


Bangkok Spring Industrial Co., Ltd. (BSK)


2009 2010


(Million Baht)


1. SAT bought Jig Fixture from BSK

2. SAT was the loan lender to BSK


ICP

4. SAT received interest of loan from BSK

5. SAT paid utilities fee for BSK

6. SAT received utilities payment from BSK

7. SAT received management fee from BSK

1.94

263.00

50.00

15.12

1.25

0.98

45.62

2.57

-

-

9.70

1.47

2.61

49.52

Price was close to the Cost (Year 2008: Cost

plus additional profit of 15-20% on average)

/ SAT needed to utilize Jig Fixture in

production process continuously and BSK

must to have capability to support SAT’s

demand

According to loan agreement/ as a result of

re-structural of the group of companies (See

details in the notes for financial statement)


Charged interest at the fixed rate, MLR- fixed

rate a year and MMR a year

Price was close to the Cost/ SAT used utilities

of BSK

Price was close to the Cost/ BSK used

utilities of SAT

Price was close to the Cost / Services for

BSK


Related Transaction


International Casting Products Co., Ltd. (ICP)


2009 2010


(Million Baht)


1. SAT sold scraps material to ICP


ICP

3. SAT received interest of loan from ICP

4. SAT received utilities payment from ICP

1.99

123.00

2.38

0.02

4.61

-

4.76

0.76

Market price/ to increase income to SAT by

selling scraps material which was normal loss

from the production


Charged interest at the rate of MMR a year

Price was close to the Cost/ ICP used utili-

ties of SAT


Related Transaction


Kitaphanich Group is the directors, executives and shareholders of the Company


2009 2010


(Million Baht)


1. BSK got income from selling Leaf Spring

to Yong Kee (1995) Co., Ltd.

2. SAT got income from selling Axle Shaft

to Yong Kee (1995) Co., Ltd.

3. ICP purchased sand from TSC

92.93

6.49

4.64

199.9

11.3

9.59

Pricing of goods sold to Yong Kee (1995)

Co., Ltd. was set up price plus primary

profit considered by the Audit Committee

as a transaction item in performing ordinary

business of the Company of which is pricing

condition was the same as for general

persons/ It was an expansion of customer

base of the group of company as the

mentioned company is the leader of

business operation on the market of REM

Sold at the market price in comparison

with other companies/ the characteristic of

selling was from time to time to mentioned

company which is the leader of business

operation on the market of REM

Purchased at the market price/ the

characteristic of selling was from time to

time to use in operation.

Related Transaction


Nomination and remuneration committee comprises of 2 out of 3 independent committees. The chairman is the independent committee Mr. Paitoon Taveebhol, Mr. Panja Senadisai and Mr. Surasak Khaoroptham with the period of 3 years effective from May 1, 2008 onwards.

In 2010, the nomination and remuneration committee arranged 3 meetings altogether and all 3 committee members attended the meeting to follow up and consider the important topics assigned by the directors as details summarized as follow:-

(1) Specify the guideline, recruiting process, selection and appointment of managers, deputy director human resources and administrative department to support the management team for the management effectiveness.

(2) Specify the guideline for the management remuneration in terms of monthly salary, attendance fee, commission, to the company’s directors to get the approval at the ordinary shareholder’s meeting.

(3) Revise the remuneration of the subsidiaries to get the approval at the board of director’s meeting.(4) Specify the indicator for the commission and adjusting the salary of the year for the executive

director.(5) Specify the policy and guideline for the commission for the employees and managers suitable for

the Company’s operating result and in accordance with the remuneration of the other’s company in the same industry.

(6) Specify the policy, guideline for the yearly wage adjustment in line with the overall economic condition and trend in the automotive sector.

(7) Consider for the policy and guideline for the job succeeding for the executive director level and deputy director sales and marketing department.

(8) Consider to insure the responsibility of the directors and executives with the insurance company to protect the responsibility to perform directors and executives’ duties.

Report of the Nomination and Remuneration Committee

Nomination Report

(Mr. Paitoon Taveebhol)Chairman of the nomination and remuneration committee


The management has prepared the financial statement ended on December 31, 2010 according to the generally certified accounting standard by choosing to use the appropriate and regularly used policy including using judgment carefully and reasonably in preparation of financial statement and disclose the important information adequately in the remarks of the financial statement.

The board of directors realized the responsibility for supervising the financial report to be efficient by appointing an audit and corporate governance committee consisting of qualified persons to be responsible for supervision of the quality of the financial report to be accurate and complete, using appropriate and regularly used policy including validation to have the company got sufficient and appropriate internal control system and participation in evaluation of risk for the company. In order to protect and reduce risks which may occur from fraudulent or abnormal operation significantly and adequacy to maintain the company asset.

From the practical methods and supervision mentioned above, the committee agreed that the financial of Somboon Advance Technology Public Company Limited as at December 31, 2010 has shown the financial statement and operational results correctly, reliably, compliance with the generally certified accounting standard and practiced in accordance with the laws and related regulations.

Board of Directors’ Responsibility for Financial Reporting

Board' s Responsibility for FS

(Mr. Weerayuth Kitapanich) President

(Mr. Sansern Wongcha-um)Chairman


Report of the Audit Committee

Dear Shareholders of Somboon Advance Technology PCL

The Audit Committee consisting of three independent committee members, one of which is competent and has experience in accounting has performed its duties within the scope assigned by the board of directors of the company in accordance with the notification of the Capital Market Supervision Committee and the requirements of the Stock Exchange of Thailand.

In 2010, the Audit Committee arranged five meetings altogether and prepared a performance report to the board of directors every quarter. Each committee member attended the meetings according to the following details.

Mr. Panja Senadisai Chairman of the Audit Committee attending 5/5 meetingsMr. Paitoon Thaweepol Member of the Audit Committee attending 5/5 meetingsMr. Ajarin Sarasas Member the Audit Committee attending 5/5 meetings

In some meetings, the Audit Committee discussed with the managing director, the management, the auditor, the internal auditor on suitable agenda and the Audit Committee independently made a report with opinions and recommendations in every meeting which could be concluded as follows.

Correctness, completeness and reliability of the financial statementsThe quarterly financial statements and the annual financial statements have been jointly reviewed with the management and the auditor to provide an opinion on the financial statements whether they are prepared correctly in material matters in accordance with generally accepted accounting principles and reviewed whether the key information, intercompany transactions and transactions possibly causing a conflict of interest have been completely, sufficiently and reliably disclosed, including specific discussion with the auditor in absence of the management to learn of the issues and problems found during the examination and to consider and provide opinions on the audit plan and examination outcomes of the auditor before submission to the board of directors for consideration.

However, in the previous year, the Audit Committee has investigated and considered the suggestion to improve the accounting guidelines to be in line with the Thai Financial Reporting Standard (TFRS) believed to affect the Group’s financial statements for the year 2011.

Report of the Audit and Corporate Governance Committee



Internal control system and internal auditThe Audit Committee has supervised the internal audit work in accordance with the professional standard through risk assessment and internal control system in accordance with COSO standard, provided approval on the annual audit plan and examination report, provided recommendations to the internal audit division and the management for further improvement of the work and provided support on manpower and continued personnel development.

The Audit Committee has considered the examination outcome on the material issues in accordance with the annual audit plan with remarks for further action proposed to the management for improvement of the work on the issues found by the internal auditors.

Compliance with related requirements and lawsThe Audit Committee has reviewed whether the company had complied with the law on securities and the Stock Exchange of Thailand, the requirements of the Stock Exchange of Thailand and laws related to the businesses of the company in a consistent manner and has an opinion that the transactions that the company is required to undertake in accordance with the law on securities and the Stock Exchange of Thailand, the requirements of the Stock Exchange of Thailand and laws r elated to the businesses reviewed were sufficient and has had the management follow up the major issues of the notification of the Securities and the Stock Exchange of Thailand Act (No. 4), B.E. 2551, with report to be submitted for further acknowledgement and close consideration.

Disclosure of inter-company transactionsThe Audit Committee has examined the inter-company transactions and disclosure of inter-company transactions in notes to financial statements made annually and quarterly with independent opinion on acquisition and disposal of assets invested in major projects of the company and the subsidiaries.

Selection of the auditor for appointmentThe Audit Committee has examined the operating result of KPMG Poomchai (KPMG) auditing the Company and subsidiaries for the first year and found that it was satisfied. From the meeting, the auditor reported the errors of the internal control found by audit process quarterly and suggested to get the approval from the shareholders’ meeting to appoint KPMG Poomchai Audit Co., Ltd with Mr. Eakkasit Chuthammasathid, Mr. Charoen Poosamritlert and Mr. Veerahai Rattanacharatkul as the auditor for the Company and subsidiaries for 2011. The remuneration when combining with the subsidiaries is totaling to Baht 3.5 million. The auditor does not provide the service to other companies in the Group.



(Mr. Panja Senadisai)Audit and Corporate Governance Committee

Corporate governanceThe Audit Committee has consistently encouraged and monitored the progress of the corporate governance development process and the social responsibility, consider to revise CG and Code of Conduct and provided guidelines and recommendations necessary to the development. The company is granted with NACC Integrity Award 2010 the SET Awards 2010 on Top Corporate Governance Report Awards for two years in a role.

Risk managementThe Audit Committee has reviewed whether the risk management system of the company is suitable and sufficient or not to ensure that the risk management process has been sufficiently undertaken systematically in accordance with the standard with efficiency and effectiveness. The opinion on the risk management of the company in the preceding year has been made on the risk of the possibility of the economic recession which may affect turnover, fluctuation in the exchange rate, price of raw materials, warranty claim and risk on safety, environment and community.

Opinion on duties performed in accordance with the rules of the Audit CommitteeRegarding the evaluation on self assessment of the Audit Committee in 2010 on February 21, 2011, the Audit Committee evaluated the components on the Audit Committee, training and resources, meetings and activities, relations with the internal auditor chief, the auditor and the management, as well as roles of the Audit Committee in the future, and the evaluation has come to a conclusion that the performance is in a satisfactory level.

The Audit Committee has opinion that the company has a process to prepare and disclose information in the financial statements in a suitable and reliable manner and the risk management and internal control system are sufficient with continued development to support the sustainability of the good governance in the company.


MD&A

Overview of Business in 2010The company and its subsidiaries have operated the business of vehicular components with the main revenue from selling half shafts, leaf springs, brake discs, brake drums, torsion bars and coil springs, etc. They were sold to domestic original equipment manufacturers (OEM) in the country mostly. During the year, the automotive industry growth significantly comparing to last year from the recovery in the domestic and export market which increased tremendously in accordance with the economic stimulus policies from many countries in the world. As a result, the Company’s operating result are obviously benefited with 65 percent production growth in line with the overall automotive industry.

Profit and Loss AnalysisRevenue AnalysisIn 2010 the company had the total revenue equal to 6,416 million baht, increased from the previous year by 2,068 million baht, or 48 percent, divided into the revenue from selling goods of 6,263 million baht and other revenues by 153 million baht.

While the company had the revenue from increased sales as a result from the vehicle industry increased the production quantity resulted in the volume of purchasing the increased purchased orders domestically and internationally.

In the financial statement found the revenue in the product line in 2010 and 2009 had revenues from the sales of goods of Somboon Advance Technology PCL came from selling of half shafts mostly amounted to 2,172 and 1,438 million baht respectively. The revenues from selling of goods of Somboon Steel Foundry Industry Ltd came from the sale of brake discs and brake drums mostly totaled 2,320 and 1,593 million baht respectively. And the revenues from sales of goods at Bangkok Spring Industrial came from selling mostly leaf springs amounted 1,814 and 1,244 million baht respectively.

Cost and Expense AnalysisCost of Sales and ServicesIn 2010 the company had the cost of goods sold by 5,022 million baht, increased from the previous year by 1,494 million baht, or 42 percent proportional to the increased sales. When considered the cost to sales ratio of 2010 was 80 percent, an decrease from the previous year by 2 percent due to fix costs reduced from volumn of production increment and benefited from saving in manufacturing scale. Selling and Administrative ExpensesThe company had the sales and administrative expense in 2010 equal to 426 million baht by increasing from the previous year by 76 million baht, or 22 percent due to the company had goods shipping

Management’s Discussion and Analysis of the Consolidated Financial Statements


MD&A

expenses and vehicle rental related with sales volumn. Included expenses for increment of research and product development along with research project and major product development

Financial ExpenseThe company had the financial cost in 2010 equal to 111 million baht, little reduced by 3 million baht, or 3 percent.

Corporate Income TaxIn 2010 the company paid the corporate income tax by 117 million baht, an increment from the previous year by 67 million baht or 132 percent, due to the operations highly adjusted according to industrial sector importantly.

Operating ProfitThe company had a profit from the operations without including the profit sharing from the investment in the affiliates. The financial expense and income tax in 2010 amounted to 968 million baht with the increase from the previous year by 479 million baht, or 47 percent from heavily reduced sales of our main products.

Net ProfitIn 2010 the company had the net profit of 771 million baht, or 12 percent of the income from sales of goods higher than 2009 with the net profit of 314 million baht, or 7 percent of the income came from the goods sold. The profit ratio to the income from the goods sold was increased by 145 percent due to 2010 gained benefit from sales volume increases and cost of sales decreased from the benefits of saving in manufacturing scale.

Financial Standing AnalysisAssetsWhen considered from the consolidated financial statement of the company, it had the consolidated assets on December 31, 2010 and December 31, 2009 equal to 8,077 million baht and 6,192 million baht (respectively) increased by 1,885 million baht, or 30 percent caused by the main reason from increment of Land, building and materials in new project to support volumn sales growth.

Account ReceivablesThe company had the net total debtors on December 31, 2010 was equal to 1,135 million baht and equal to 974 million baht on December 31, 2009. increased from the value of sales rose from last year according to customer orders, with the net trade debtor on December 31, 2010 reflected the average debt collection by about 61 days, due to the major customers had increased sales with the group of vehicle assembly plants had the credit terms were rather certain.

�� Investment Fund When consider the consolidated financial statement on December 31, 2010 the company had the net


MD&A

investment in the related companies for 167 million baht, which is the investment in Yamada Somboon Ltd., Nichinbo Somboon Automotive Ltd., Somboon Somic Manufacturing Ltd. And Sushiyoshi Somboon Kotet Sand Co., Ltd. with the capital investment in these companies equaled to 73 million baht.

�� Property, Plant and Equipment Land, buildings and equipment of the company on December 31, 2010 were valued at 4,620 million

baht, while in 2009 was at 4,254 million baht an increase of 366 million baht, or 9-percent increase resulted from the construction of buildings and plants and new machinery to expand the increased production at Rayong plant, so the company has increased its permanent assets.

The company had the excess funds from its asset assessment and the subsidiaries in the part of the shareholders on December 31, 2010 and December 31, 2009 were equal to 614 and 625 million baht respectively, while the excess capital from the asset assessment had the depreciation of the assets of each type, in which during 2010 the excess fund was disposed from the assessment of its assets and the subsidiaries totaled 11 million baht.

LiabilitiesOn December 31, 2010 the company had the total debt of 3,902 million baht by dividing into short-term debts equal to 1,761 million baht and long-term debts equal to 2,141 million baht, which was higher than the previous year by 578 million baht, or 17 percent. Since the trade creditors were increased by 359 million and the creditors purchased the assets from the investment in the permanent assets so the liabilities were increased by 58 million baht, the short-term loans from importing raw materials were reduced by 189 million baht. During 2010, the Company and subsidiary entered into a credit restructuring contract with a domestic financial institution. This comprised of long-term credit facility and short-term loan to be used as a working capital and invest in the new project in the future. The new credit facility is totaling to 3,804 million baht. The Company has already paid the long-term loan owing to the former bank to close the long-term credit facility.

Shareholders’ Equity�� Capital Structure The Company’s shareholders’ equity as of December 31, 2010 equals to 4,175 million baht

increased by 1,307 million baht or 46 percent year-over-year from issuing 40 millions equity shares with par value of 1 baht each. Twenty five millions of each is allocated at 14 baht each to support the excising of pre-emptive right to buy the transferable subscription right. Another fifteen millions shares at 21.80 baht each are to sell to the Private Placement. The total cash received from issuing equity share after expenses is amounted to 677 million baht.

On July 20, 2010 the directors’ meeting had a resolution to pay the interim dividend at 0.40 baht per share totaling to 120 million baht. The Company paid the dividend on August 19, 2010.


MD&A

However, on December 31, 2010 the company had the capital structure comprising the total debt of 3,902 million baht and the net worth of 4,175 million baht, or the debt to net worth ratio was about 0.93 times.

Cash Flow AnalysisIn the consolidated financial statements ended December 31, 2010 and December 31, 2009 the company had the net cash flow from the operations by 1,389 and 1,009 million baht respectively. The cash flow paid out from the investment activities by 1,078 and 517 million baht respectively, caused by building construction and new machinery at Rayong province in 2010 amounted to 739 million baht and in 2009 amounted to 521 million baht mainly to support the expansion in the various projects. Also there was cash flow from the activity in procuring money in 2010 amounted to 494 million baht. This resulted from cash received from issuing equity share amounted to 667 million baht and paid dividend amounted to 210 million baht. During 2010, the Company and its subsidiary entered into a credit restructuring contract with a domestic financial institution. This comprised of long-term credit facility and short-term loan to be used as a working capital and invest in the new project in the future. The new credit facility is totaling to 3,804 million baht. The Company has already paid the long-term loan owing to the former bank to close the long-term credit facility.

Major Factors and Influences Potentially Affecting Future Operations or Financial StandingThe continuously economic recovery has resulted in the growth in the automotive sector. Thailand becomes the manufacturing base for the pickup truck exported to many countries around the world. The government sector also has the policy to support the manufacturing of Eco-car introduced to the market last year and it has been so popular. With those factors, the overall automotive production for domestic demand and export in 2011 is expected to grow 10% year over year. The Company has projected the growth on automotive parts at 10-12%. The Company has expanded molding line in Rayong province as well as other production line to support the increase in purchasing order. The Company is also able to apply the investment privilege (BOI), and creates the strategy on cost effectiveness by developing the value added products, improving the production capacity, increasing the engineering design competency, research and development, increase and/or changes in the raw material usage effectiveness and becoming acceptable part manufacturer in the world’s automotive manufacturers’ minds. Moreover, the Company also has a plan to support the price of raw materials which tends to be increased to prevent its effect on the operation. The previous year, the Company succeeded in increasing the capital and adjusted the financial structure to create the financial strength that is able to support the business expansion in the future, upgrade customer’s relations and satisfaction, develop the organization to become acceptable to stakeholders by conducting on the corporate governance and corporate social responsibility as well as constantly improving the management policy according to the SET’s new guideline.


Audit report

To the Shareholders of Somboon Advance Technology Public Company Limited

I have audited the accompanying consolidated and separate balance sheets as at 31 December 2010, and the related statements of income, changes in equity and cash flows for the year then ended of Somboon Advance Technology Public Company Limited and its subsidiaries, and of Somboon Advance Technology Public Company Limited, respectively. The Company’s management is responsible for the correctness and completeness of information presented in these financial statements. My responsibility is to express an opinion on these financial statements based on my audits. The consolidated and separate financial statements of Somboon Advance Technology Public Company Limited and its subsidiaries, and of Somboon Advance Technology Public Company Limited, respectively, for the year ended 31 December 2009 were audited by another auditor whose report dated 26 February 2010 expressed an unqualified opinion on those statements.

I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion.

In my opinion, the consolidated and separate financial statements referred to above present fairly, in all material respects, the financial position as at 31 December 2010 and the results of operations and cash flows for the year then ended of Somboon Advance Technology Public Company Limited and its subsidiaries, and of Somboon Advance Technology Public Company Limited, respectively, in accordance with generally accepted accounting principles.

Ekkasit Chuthamsatid

(Ekkasit Chuthamsatid)Certified Public Accountant Registration No. 4195

KPMG Phoomchai Audit Ltd.Bangkok24 February 2011

Audit Report of Certified Public Accountant


Audit report

Somboon Advance Technology Public Company Limited and its Subsidiaries

Balance sheetsAs at 31 December 2010 and 2009

AssetsConsolidated financial

statements (in Baht)Separate financial

statements (in Baht)

2010 20102009 2009

Current assets

Cash and cash equivalents

Trade accounts receivable

Other receivables - related parties

Short-term loans to subsidiaries

Current portion of long-term loans to

subsidiaries

Inventories

Other current assets

Total current assets

Non-current assets

Investments in subsidiaries

Investments in associates

Other long-term investments

Long-term loans to subsidiaries

Property, plant and equipment

Deposits for purchase of land and

machinery

Assets not used in operations

Goodwill on business combination

Intangible assets

Other non-current assets

Total non-current assets

194,644,923

973,700,695

128,400

-

-

364,184,628

62,058,201

1,594,716,847

-

114,466,554

26,651,146

-

4,254,332,103

24,756,182

106,773,600

17,934,556

23,354,112

28,926,225

4,597,194,478

6,191,911,325

391,227,783

417,580,172

36,076,602

310,000,000

-

137,250,378

10,784,685

1,302,919,620

1,852,018,452

-

-

-

1,125,887,397

-

-

-

22,918,585

9,172,931

3,009,997,365

4,312,916,985

104,390,313

340,874,940

7,971,879

263,000,000

107,750,000

98,336,408

8,025,584

930,349,124

1,252,018,452

-

-

420,885,600

1,278,022,270

1,313,182

-

-

11,371,166

7,495,081

2,971,105,751

3,901,454,875

Note

999,795,158

1,134,567,455

128,400

-

-

531,030,117

92,922,583

2,758,443,713

-

140,555,375

26,651,146

-

4,620,461,369

318,117,635

103,645,000

17,934,556

62,518,282

28,843,372

5,318,726,735

8,077,170,448

5

4, 6

4

4

4

7

8

9

10

4

11

13

12


Consolidated financial statements (in Baht)

Separate financial statements (in Baht)

2010 20102009 2009Note

Audit report



Liabilities and equity

Current liabilities

Bank overdrafts and short-term loans

from financial institutions

Short-term loans from financial institutions

- trust receipts

Trade accounts payable

Other payable - related parties

Current portion of long-term loans

from financial institutions

Current portion of finance lease liabilities

Accounts payable - purchase of assets

Income tax payable

Other current liabilities

Total current liabilities

Non-current liabilities

Long-term loans from financial institutions

Finance lease liabilities

Account payable for land purchase

Other non-current liabilities

Total non-current liabilities

Total liabilities

22,736

215,427,125

705,421,354

-

428,817,622

13,283,679

84,343,591

28,414,221

125,418,798

1,601,149,126

1,644,192,768

45,587,445

29,477,000

3,328,689

1,722,585,902

3,323,735,028

-

-

348,529,024

334,601

94,413,989

1,094,019

599,471

16,649,644

61,361,317

522,982,065

778,556,985

19,640

-

4,391,865

782,968,490

1,305,950,555

-

-

250,148,690

336,415

258,606,000

1,445,055

-

14,111,307

39,952,802

564,600,269

1,305,174,487

1,016,258

-

3,613,650

1,309,804,395

1,874,404,664

860,612

26,520,363

1,064,783,896

-

255,995,639

16,709,580

141,884,671

54,463,375

199,733,484

1,760,951,620

2,083,737,164

41,552,960

11,354,000

4,391,865

2,141,035,989

3,901,987,609

14

14

4, 15

4

14

14

16

14

14


Financial statements





2010 20102009 2009Note��

?��

Share capital

Authorised share capital

Issued and paid-up share capital

Additional paid-in capital

Unrealised surplus

Revaluation surplus on assets - the Company

Revaluation surplus on assets - subsidiaries

Retained earnings

Appropriated

Legal reserve

Unappropriated

@ ��

@ ��

17

18

18

300,000,000

300,000,000

84,562,861

64,260,576

560,961,582

30,000,000

1,828,391,278

2,868,176,297

6,191,911,325

340,000,000

339,923,287

711,432,209

60,815,488

-

34,000,000

1,860,795,446

3,006,966,430

4,312,916,985

300,000,000

300,000,000

84,562,861

64,260,576

-

30,000,000

1,548,226,774

2,027,050,211

3,901,454,875

340,000,000

339,923,287

711,432,209

60,815,488

553,277,582

34,000,000

2,475,734,273

4,175,182,839

8,077,170,448




Statements of incomeAs at 31 December 2010 and 2009



2010 20102009 2009Note

4

4

4

21

9

22

24

4,295,429,812

1,457,501

6,227,301

44,663,733

4,347,778,347

3,528,267,393

67,225,706

239,477,446

43,502,094

-

3,878,472,639

9,837,233

479,142,941

(114,435,496)

364,707,445

(50,268,942)

314,438,503

1.05

2,172,199,743

32,701,133

-

181,144,696

2,386,045,572

1,569,685,480

21,460,696

210,774,257

41,140,531

439,427

1,843,500,391

-

542,545,181

(67,226,041)

475,319,140

(38,750,468)

436,568,672

1.40

1,437,608,128

35,435,289

579,041

162,531,660

1,636,154,118

1,103,536,157

22,495,890

168,088,778

43,260,094

-

1,337,380,919

-

298,773,199

(76,088,754)

222,684,445

(20,419,700)

202,264,745

0.67

6,263,137,203

4,569,870

17,300,298

131,323,576

6,416,330,947

5,022,095,400

72,040,368

311,996,166

41,896,531

-

5,448,028,465

30,618,821

998,921,303

(110,750,515)

888,170,788

(116,827,793)

771,342,995

2.48

Revenues

Revenue from sale of goods

and rendering of services

Interest income

Net foreign exchange gain

Other income

Total revenues

Expenses

Cost of sale of goods and rendering of services

Selling expenses

Administrative expenses

Management benefit expenses

Net foreign exchange loss

Total expenses

Share of profit of associates

Profit before finance costs

and income tax expense

Finance costs

Profit before income tax expense

Income tax expense

Profit for the year

Basic earnings per share (Baht)



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1 Jan

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Unre

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1 Jan

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Balanc

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31 De

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0

25 17

2,56

0,84

2,16

1

(7,104

,367

)

(7,104

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)

314,43

8,50

3

2,86

8,17

6,29

7

2,86

8,17

6,29

7

(11,12

9,08

8)

(11,12

9,08

8)

771,34

2,99

5

760

,213

,907

-

(120

,000

,000

)

666,79

2,63

5

4,17

5,18

2,83

9

84,562

,861

-

-

-

84,562

,861

84,562

,861

-

-

-

-

-

-

626,86

9,34

8

711,43

2,20

9

566,49

8,88

1

(5,537

,299

)

(5,537

,299

) -

560,96

1,58

2

560,96

1,58

2

(7,684

,000

)

(7,684

,000

) -

(7,684

,000

) -

-

-

553,27

7,58

2

65,827

,644

(1,567

,068

)

(1,567

,068

) -

64,260

,576

64,260

,576

(3,445

,088

)

(3,445

,088

) -

(3,445

,088

) -

-

-

60,815

,488

300,00

0,00

0 -

-

-

300,00

0,00

0

300,00

0,00

0 -

-

-

-

-

-

39,923

,287

339,92

3,28

7

30,000

,000

-

-

-

30,000

,000

30,000

,000

-

-

-

-

4,000

,000

-

-

34,000

,000

Lega

l re

serv

e

1,51

3,95

2,77

5 -

-

314,43

8,50

3

1,82

8,39

1,27

8

1,82

8,39

1,27

8 -

-

771,34

2,99

5

771

,342

,995

(4,000

,000

)

(120

,000

,000

) -

2,47

5,73

4,27

3


Statements of changes in equityFor the years ended 31 December 2010 and 2009




Statements of changes in equityFor the years ended 31 December 2010 and 2009

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Balanc

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Amor

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Balanc

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Balanc

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31 De

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0

25 17

1,82

6,35

2,53

4

(1,567

,068

)

(1,567

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)

202,26

4,74

5

2,02

7,05

0,21

1

2,02

7,05

0,21

1

(3,445

,088

)

(3,445

,088

)

436,56

8,67

2

433

,123

,584

-

(120

,000

,000

)

666,79

2,63

5

3,00

6,96

6,43

0

84,562

,861

-

-

-

84,562

,861

84,562

,861

-

-

-

-

-

-

626,86

9,34

8

711,43

2,20

9

1,34

5,96

2,02

9 -

-

202,26

4,74

5

1,54

8,22

6,77

4

1,54

8,22

6,77

4 -

-

436,56

8,67

2

436

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(4,000

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)

(120

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,000

) -

1,86

0,79

5,44

6

65,827

,644

(1,567

,068

)

(1,567

,068

) -

64,260

,576

64,260

,576

(3,445

,088

)

(3,445

,088

) -

(3,445

,088

) -

-

-

60,815

,488

300,00

0,00

0 -

-

-

300,00

0,00

0

300,00

0,00

0 -

-

-

-

-

-

39,923

,287

339,92

3,28

7

30,000

,000

-

-

-

30,000

,000

30,000

,000 -

-

-

-

4,00

0,00

0

-

-

34,000

,000

Shar

epr

emiu

m

Addi

tiona

l pa

id-i

n ca

pita

l

Una

ppro

pri-

ated

Lega

l re

serv

e

Tota

leq

uity


314,438,503

433,585,370

895,286

17,580,925

(721,038)

113,699,033

478,661

(615,824)

(299,993)

1,840,228

(9,837,233)

50,268,942

921,312,860

11,363,501

114,474

226,886,923

62,799,504

14,278,771

(162,287,158)

-

(28,566,686)

32,875,341

(70,260,872)

1,008,516,658

436,568,672

179,643,697

-

-

(32,701,133)

67,226,041

(394,524)

409,238

(287,806)

-

-

38,750,468

689,214,653

(76,782,234)

(28,104,723)

(38,519,446)

(2,759,101)

(1,777,850)

98,048,098

(1,814)

21,674,665

2,156,857

(37,590,773)

625,558,332

202,264,745

158,985,521

-

5,478,750

(35,435,289)

76,088,754

910,778

(100,035)

-

901,067

-

20,419,700

429,513,991

15,736,096

2,014,747

29,527,456

44,283,970

5,417,557

(39,316,645)

(3,571,646)

(20,314,882)

2,775,611

(20,828,030)

445,238,225

771,342,995

438,388,052

-

425,532

(4,569,870)

110,750,515

(11,928)

2,340,637

(1,139,269)

-

(30,618,821)

116,827,793

1,403,735,636

(160,736,793)

-

(166,833,561)

(30,864,382)

(17,147)

358,298,106

-

74,771,307

2,441,818

(92,157,281)

1,388,637,703




2010 20102009 2009

Cash flows from operating activities

Profit for the year

Adjustments for

Depreciation and amortisation

Bad debts

Fixed assets and other assets written-off

Interest income

Finance costs

Set up (reversal of) allowance for

decline in value of inventories

Unrealised (gain) loss on exchange

Gain on disposal of assets

Amortisation of fee for adjustment of interest rate-net

Share of profit of associates

Income tax expense

Changes in operating assets and liabilities


Other receivables - related parties

Inventories

Other current assets

Other non-current assets


Other payables - related parties

Other current liabilities

Other non-current liabilities

Income tax paid

Net cash provided by operating activities


Statements of cash flowsAs at 31 December 2010 and 2009




2010 20102009 2009

Cash flows from investing activitiesInterest receivedDividends received from associates Cash payment for purchase of other long-term investmentsCash payment for investment in subsidiaryIncrease in short-term loans to subsidiariesDecrease in long-term loans to subsidiariesDecrease in other long-term loans(Increase) decrease in deposits for purchases of land and machineryPurchase of property, plant and equipmentSale of property, plant and equipmentPurchase of intangible assetsSale of assets not used in operationsIncrease in accounts payable purchase of property, plant and equipmentNet cash used in investing activities Cash flows from financing activitiesFinance costs paidDividends paid Increase (decrease) in bank overdrafts and short-term loans from financial institutionsDecrease in short-term loans from financial institutions - trust receiptsDecrease in finance lease liabilitiesProceeds from issue of ordinary sharesProceeds from long-term borrowingsRepayment of long-term borrowingsNet cash provided by (used in) financing activities'��Cash and cash equivalents at beginning of year Q�� Supplemental disclosures of cash flow information - Non-cash itemsAmortisation of revaluation surplus on assetsPurchases of assets that have not yet been paid Purchases of assets under sale and leaseback agreementsTransfer fixed assets to other assets

1,457,501 6,291,000

(1,146) - - -

2,000,000

13,425,697 (521,395,554)

300,000 (19,154,971)

-

- (517,077,473)

(118,070,269) -

(75,902,642)

(93,184,067) (2,288,741)

- 172,160,222

(304,582,000) (421,867,497)

69,571,688125,073,235194,644,923

7,104,367 84,343,591 56,409,812 17,580,670

32,701,133

- -

(600,000,000) (47,000,000) 528,635,600

-

1,313,182 (27,507,917)

4,673 (14,610,281)

-

599,471 (125,864,139)

(67,651,065) (120,000,000)

-

- (1,188,780) 666,792,635 935,495,974

(1,626,305,487) (212,856,723)

286,837,470104,390,313391,227,783

3,445,088 - - -

35,435,289 - - -

(193,000,000) 107,750,000

2,000,000

8,177,977 (173,743,683)

- (5,753,594)

-

- (219,134,011)

(78,215,788)

-

- (1,915,589)

- 108,765,931

(185,902,000) (157,267,446)

68,836,76835,553,545

104,390,313

1,567,067 - - -

4,569,870 4,530,000

- - - - -

(293,361,453) (804,621,616)

14,689,137 (46,352,318)

3,580,000

39,418,080 (1,077,548,300)

(114,606,228) (120,000,000)

837,876

(190,016,125) (15,669,739) 666,792,635

2,328,029,544 (2,061,307,131)

494,060,832805,150,235194,644,923999,795,158

11,129,088 - - -



Statements of cash flowsAs at 31 December 2010 and 2009


Notes

These notes form an integral part of the financial statements.The financial statements were authorised for issue by the Board of Directors on 24 February 2011.

1. General information

Somboon Advance Technology Public Company Limited “the Company”, is incorporated in Thailand and has its registered office at 129 Moo 2, Bangna-Trad Road, Tambon Bangchalong, Amphur Bangplee, Samutprakarn.

The Company was listed on the Stock Exchange of Thailand in January 2005.

The major shareholders during the financial year were Somboon Holding Company Limited (25.50% shareholding), which incorporated in Thailand and Kitaphanich family (22.58% shareholding). The principal businesses of the Company are manufacture of pick-up axles and truck trunnion shafts. Details of the Company’s subsidiaries as at 31 December 2010 and 2009 were as follows:

2. Basis of preparation of the financial statements

The financial statements issued for Thai reporting purposes are prepared in the Thai language. This English translation of the financial statements has been prepared for the convenience of readers not conversant with the Thai language.

The financial statements are prepared and presented in Thai Baht. All financial information presented in Thai Baht has been rounded in the notes to the financial statements to the nearest thousand unless otherwise stated. They are prepared on the historical cost basis except as stated in the accounting policies.

Somboon Malleable Iron Industrial Company Limited

Bangkok Spring Industrial Company Limited International Casting Products Company Limited

Manufacture and sale of auto partsManufacture and sale of auto partsManufacture and sale of auto parts

Thailand

Thailand

Thailand

100

100

100

100

100

100

Name of the entity Type of businessOwnership interest (%)Country of

incorporation2010 2009

Notes


The financial statements are prepared in accordance with Thai Financial Reporting Standards (“TFRS”); guidelines promulgated by the Federation of Accounting Professions (“FAP”); applicable rules and regulations of the Thai Securities and Exchange Commission; and with generally accepted accounting principles in Thailand.

During 2010, the FAP announced the re-numbering of the following TFRS.

The Group has adopted the revised Framework for the Preparation and Presentation of Financial Statements (revised 2009), which was issued by the FAP during 2010 and effective on 26 May 2010. The adoption of the revised framework does not have any material impact on the consolidated or separate financial statements.

The FAP has issued during 2010 a number of new and revised TFRS which are not currently effective and have not been adopted in the preparation of these financial statements. These new and revised standards and interpretations are disclosed in note 29.

The preparation of financial statements in conformity with TFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which estimates are revised and in any future periods affected.

Notes

TAS 11 TAS 101 Doubtful Account and Bad Debts

TAS 26 TAS 102 Income Recognition For Real Estate Business

TAS 27 TAS 103 Disclosures in the Financial Statements of Banks and Similar Financial Institutions

TAS 34 TAS 104 Accounting for Troubled Debt Restructuring

TAS 40 TAS 105 Accounting for Investment in Debt and Equity Securities

TAS 42 TAS 106 Accounting for Investment Companies

TAS 48 TAS 107 Financial Instruments Disclosure and Presentation

Former no. Revised no. Topic


Notes

3. Significant accounting policies(a) Basis of consolidation The consolidated financial statements relate to the Company and its subsidiaries (together referred

to as the “Group”) and the Group’s interests in associates

Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the Group has the power,

directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group.

Associates Associates are those entities in which the Group has significant influence, but not control, over

the financial and operating policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another entity. The consolidated financial statements include the Group’s share of the income, expenses and equity movements of associates, from the date that significant influence commences until the date that significant influence ceases. When the Group’s share of losses exceeds its interest in an associate, the Group’s carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income or expenses arising from

intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with associates are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

(b) Foreign currencies Foreign currency transactions Transactions in foreign currencies are translated to Thai Baht at the foreign exchange rates ruling at

the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to Thai Baht at the foreign exchange rates ruling at that date. Foreign exchange differences arising on translation are recognised in the statement of income.


Notes

Non-monetary assets and liabilities measured at cost in foreign currencies are translated to Thai Baht using the foreign exchange rates ruling at the dates of the transactions.

(c) Derivative financial instruments Derivative financial instruments are used to manage exposure to foreign exchange, interest rate

arising from operational, financing and investment activities. Derivative financial instruments are not used for trading purposes. However, derivatives that do not qualify for hedge accounting are accounted for as trading instruments.

The Group is party to financial instruments that reduce exposure to fluctuations in foreign currency exchange and interest rate. These financial instruments, which mainly comprise forward foreign exchange contracts and interest swap contract are not recognised in the financial statement on inception.

(d) Cash and cash equivalents Cash and cash equivalents in the statements of cash flows comprise cash balances, call deposits

and highly liquid short-term investments. Bank overdrafts that are repayable on demand are a component of financing activities for the purpose of the statement of cash flows.

(e) Trade and other accounts receivable Trade and other accounts receivable are stated at their invoice value less allowance for doubtful

accounts.

The allowance for doubtful accounts is assessed primarily on analysis of payment histories and future expectations of customer payments. Bad debts are written off when incurred.

(f) Inventories Inventories are stated at the lower of cost and net realisable value.

Cost of finished goods and works in process are calculated using the average cost principle. Raw materials, spare parts and factory supplies are calculated using the first in first out principle. Cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. In the case of manufactured inventories and work-in-progress, cost is calculated using standard cost adjusted to approximate average cost including an appropriate share of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs to complete and to make the sale.


Notes

(g) Investments Investments in subsidiaries and associates Investments in subsidiaries and associates in the separate financial statements of the Company

are accounted for using the cost method. Investments in associates in the consolidated financial statements are accounted for using the equity method.

Investments in other debt and equity securities Debt securities and marketable equity securities held for trading are classified as current assets and

are stated at fair value, with any resultant gain or loss recognised in the statement of income.

Debt securities that the Group has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-to-maturity investments are stated at amortised cost, less any impairment losses. The difference between the acquisition cost and redemption value of such debt securities is amortised using the effective interest rate method over the period to maturity.

Debt securities and marketable equity securities, other than those securities held for trading or intended to be held to maturity, where these investments are derecognised the cumulative gain or loss previously recognised directly in equity is recognised in the statement of income. Where these investments are interest-bearing, interest calculated using the effective interest method is recognised in the statement of income.

Equity securities which are not marketable are stated at cost less any impairment losses.

Disposal of investments On disposal of an investment, the difference between net disposal proceeds and the carrying

amount together with the associated cumulative gain or loss that was reported in equity is recognised in the statement of income.

If the Group disposes of part of its holding of a particular investment, the deemed cost of the part sold is determined using the weighted average method applied to the carrying value of the total holding of the investment.

(h) Property, plant and equipment Owned assets Property, plant and equipment are stated at cost less accumulated depreciation and impairment

losses except for land and buildings which are stated at their revalued amounts. The revalued amount is the fair value determined on the basis of the property’s existing use at the date of revaluation less any subsequent accumulated depreciation and impairment losses.


Notes

Leased assets Leases in terms of which the Group substantially assumes all the risk and rewards of ownership

are classified as finance leases. Property, plant and equipment acquired by way of finance leases is capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly to the statement of income.

Revalued assets Revaluations are performed by independent professional valuers with sufficient regularity to

ensure that the carrying amount of these assets does not differ materially from that which would be determined using fair values at the reporting date.

Any increase in value, on revaluation, is credited to equity under the heading ‘revaluation surplus’ unless it offsets a previous decrease in value recognised in the statement of income in respect of the same asset. A decrease in value is recognised in the statement of income to the extent it exceeds an increase previously recognised in equity in respect of the same asset. Upon disposal of a revalued asset, any remaining related revaluation surplus is transferred from equity to retained earnings and is not taken into account in calculating the gain or loss on disposal.

Depreciation Depreciation is charged to the statement of income on a straight-line basis over the estimated useful

lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:

Buildings and other constructions 20 - 40 years Machinery and equipment 5 - 18 years Furniture, fixtures and office equipment 3 - 5 years Vehicle 5 years

Depreciation attributed to the surplus portion is deducted against revaluation surplus in sharehold-ers’ equity

No depreciation is provided on freehold land or assets under construction.


Notes

(i) Intangible assets Goodwill Goodwill in a business combination represents the excess of the cost of acquisition over the fair

value of the Group’s share of the identifiable net assets acquired. Negative goodwill in a business combination represents the excess of the fair value of the Group’s share of the identifiable net assets acquired over the cost of acquisition.

Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment as described in note 3(j). Negative goodwill is recognised immediately in the statement of income.

Other intangible assets Other intangible assets that are acquired by the Group, which have finite useful lives, are stated at

cost less accumulated amortisation and impairment losses. Other intangible assets are amortised in the statement of income on a straight-line basis over their estimated useful lives from the date that they are available for use. The estimated useful lives are as follows:

Software licences 3 - 5 years (j) Impairment The carrying amounts of the Group’s assets are reviewed at each reporting date to determine

whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. For goodwill, the recoverable amount is estimated at each reporting date, and as and when indicators of impairment are identified.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is recognised in the statement of income unless it reverses a previous revaluation credited to equity, in which case it is charged to equity.

When a decline in the fair value of an available-for-sale financial asset has been recognised directly in equity and there is objective evidence that the value of the asset is impaired, the cumulative loss that had been recognised directly in equity is recognised in the statement of income even though the financial asset has not been derecognised. The amount of the cumulative loss that is recognised in the statement of income is the difference between the acquisition cost and current fair value, less any impairment loss on that financial asset previously recognised in the statement of income.

Calculation of recoverable amount The recoverable amount of available-for-sale financial assets is calculated by reference to the fair

value.


Notes

The recoverable amount of a non-financial asset is the greater of the asset’s value in use and fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Reversals of impairment An impairment loss in respect of a financial asset is reversed if the subsequent increase in recoverable

amount can be related objectively to an event occurring after the impairment loss was recognised. For financial assets carried at amortised cost and available-for-sale financial assets that are debt securities, the reversal is recognised in the statement of income. For available-for-sale financial assets that are equity securities, the reversal is recognised directly in equity.

An impairment loss in respect of goodwill is not reversed. Impairment losses recognised in prior periods in respect of other non-financial assets are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that wouldhave been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(k) Interest-bearing liabilities Interest-bearing liabilities are recognised initially at fair value less attributable transaction charges.

Subsequent to initial recognition, interest-bearing liabilities are stated at amortised cost with any difference between cost and redemption value being recognised in the statement of income over the period of the borrowings on an effective interest basis.

(l) Trade and other accounts payable Trade and other accounts payable are stated at cost.

(m) Employee benefits Defined contribution plans Obligations for contributions to defined contribution pension plans are recognised as an expense

in the statement of income as incurred.

(n) Provisions A provision is recognised when the Group has a present legal or constructive obligation as a result

of a past event, and it is probable that an outflow of economic benefits will be required to settle


Notes

the obligation and a reliable estimate can be made of the amount of the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

(o) Revenue Revenue excludes value added taxes and other sales taxes and is arrived at after deduction of

trade discounts.

Sale of goods and services rendered Revenue is recognised in the statement of income when the significant risks and rewards of

ownership have been transferred to the buyer. No revenue is recognised if there is continuing management involvement with the goods or there are significant uncertainties regarding recovery of the consideration due, associated costs or the probable return of goods. Service income is recognised as services are provided.

Rental, interest and dividend income Rental and interest incomes are recognised in the statement of income as it accrues. Dividend income

is recognised in the statement of income on the date the Group’s right to receive payments is established.

(p) Expenses Lease payments Payments made under operating leases are recognised in the statement of income on a straight

line basis over the term of the lease. Lease incentives received are recognised in the statement of income as an integral part of the total lease payments made. Contingent rentals are charged to the statement of income for the accounting period in which they are incurred.

Finance costs Interest expenses and similar costs are charged to the statement of income for the period in which

they are incurred, except to the extent that they are capitalised as being directly attributable to the acquisition, construction or production of an asset which necessarily takes a substantial period of time to be prepared for its intended use or sale. The interest component of finance lease payments is recognised in the statement of income using the effective interest rate method.

(q) Income tax Income tax on the profit or loss for the year comprises current tax. Current tax is the expected tax

payable on the taxable income for the year, using tax rates enacted at the reporting date, and any adjustment to tax payable in respect of previous years.


4. Related party transactions and balances

Related parties are those parties linked to the Group and the Company as shareholders or by common shareholders or directors. Transactions with related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices.

Relationships with related parties that control or jointly control the Company or are being controlled or jointly controlled by the Company or have transactions with the Group were as follows:

Significant transactions for the years ended 31 December 2010 and 2009 with related parties were as follows:

Notes

Somboon Malleable Iron Industrial Company Limited Thailand Subsidiary, 100% shareholding

Bangkok Spring Industrial Company Limited Thailand Subsidiary, 100% shareholding

International Casting Products Company Limited Thailand Subsidiary, 100% shareholding

Name of entities Country of incorporation/ nationality Nature of relationships

Subsidiaries

Facilities income Approximates cost 18.3 13.4

Interest income Contractually agreed price 29.2 34.3

Management fee income Contractually agreed price 118.4 114.1

Sales of scraps Market prices 7.4 3.9

Purchases of goods Approximates market prices 2.6 1.9

Facilities expense Approximates cost 1.4 1.2

Other related parties

Sales of goods Approximates market prices 11.3 6.5

Pricing policiesSeparate financial statements

(in million Baht)

2010 2009


Sales of goods Approximates market prices 199.9 99.5

Pricing policiesConsolidatedfinancial statements

(in million Baht)2010 2009


Notes

Balances as at 31 December 2010 and 2009 with related parties were as follows:

Subsidiaries

Somboon Malleable Iron Industrial Company Limited - - 767 639

International Casting Products Company Limited - - 737 539


Yongkee (1995) Company Limited 80,503 49,983 4,997 2,288

Automotive Product Import and

Export Center Company Limited - 1,326 - -

Total 80,503 51,309 6,501 3,466


Separate financial statements(in thousand Baht)

Consolidatedfinancial statements(in thousand Baht)

20102010 20092009

Subsidiaries

Somboon Malleable Iron Industrial Company Limited - - 17,820 4,359

Bangkok Spring Industrial Company Limited - - 13,708 1,778

International Casting Products Company Limited - - 4,549 1,835

Other related party

Yongkee (1995) Company Limited 128 128 - -

Total 128 128 36,077 7,972

Other receivables from related parties



20102010 20092009

Notes


Movements during the years ended 31 December 2010 and 2009 of loans to related parties were as follows:

Short-term loans to subsidiaries carry interest at MMR (Money Market Rate) per annum.

Subsidiaries

Somboon Malleable Iron Industrial Company Limited 310,000 90,000

Bangkok Spring Industrial Company Limited - 50,000

International Casting Products Company Limited - 123,000

Total 310,000 263,000

Short-term loans to subsidiariesSeparate financial statements

(in thousand Baht)

2010 2009

Subsidiaries

Somboon Malleable Iron Industrial Company Limited - 265,636

Bangkok Spring Industrial Company Limited - 263,000

Total - 528,636

Less current portion - (107,750)

Net - 420,886

Long-term loans to subsidiariesSeparate financial statements

(in thousand Baht)

2010 2009

Short-term loans to subsidiaries

At 1 January 263,000 70,000

Increase 1,034,000 856,000

Decrease (987,000) (663,000)

At 31 December 310,000 263,000

Long-term loans to subsidiaries

At 1 January 528,636 636,386

Increase - -

Decrease (528,636) (107,750)

At 31 December - 528,636


2010 2009

Notes


Notes

On 30 July 2009, the Company agreed to amend its long-term loan agreements with Somboon Malleable Iron Industrial Company Limited. Under these amendments, there are one year grace periods for payment of principal, from 31 July 2009 to 30 July 2010, and then payment is to be made in accordance with the existing conditions, such that the due date of the final installment will be extended in line with the grace period. After this revision, the outstanding loan of Baht 175 million is to be repaid on a quarterly basis over 9 years, from June 2004 until September 2012, however, the subsidiary made a repayment of principle amounting to Baht 4.7 million during the second quarter of 2010. The outstanding loan of Baht 91 million is to be repaid on a monthly basis over 6 years, from January 2007 until September 2012. These loans carry interest at a rate of MLR minus an applicable margin per annum, payable on a monthly basis.

On 30 July 2009, the Company agreed to amend its long-term loan agreement with Bangkok Spring Industrial Company Limited. Under this amendment, there is one year grace period for payment of principal, from 31 July 2009 to 30 July 2010, and then payment is to be made in accordance with the existing condition; such that the due date of the final installment will be extended in line with the grace period. After this revision, the outstanding loan of Baht 263 million is to be repaid on a quarterly basis from September 2010 until September 2013. The loan carries interest at a rate of MLR minus an applicable margin per annum, payable on a monthly basis.

On 23 September 2010, At the Board of Directors’ meeting of the Company, the Board of Directors approved the termination of long-term loan agreements with Somboon Malleable Iron Industrial Company Limited and Bangkok Spring Industrial Company Limited and repayment of the loans was fully made in September 2010.


Notes

5. Cash and cash equivalents

Associate

Tsuchiyoshi Somboon Coated Sand Company Limited 2,348 - - -

Other related party

Yongkee (1995) Company Limited 542 122 - -

Total 2,890 122 - -

Trade account payable - related parties



20102010 20092009

Cash on hand 277 275 90 90

Cash at banks – current accounts 2,601 2,112 314 1,322

Cash at banks – savings accounts 626,917 192,258 220,824 102,978

Highly liquid short-term investments 370,000 - 170,000 -

Total 999,795 194,645 391,228 104,390



20102010 20092009

Subsidiaries

Somboon Malleable Iron Industrial Company Limited - - 20 1

Bangkok Spring Industrial Company Limited - - 315 335

Total - - 335 336

Other payables to related parties



20102010 20092009

Cash and cash equivalents of the Group and the Company as at 31 December 2010 and 2009 were denominated entirely in Thai Baht.


Notes

Related parties 4 80,503 51,309 6,501 3,466

Other parties 1,054,064 927,794 411,079 337,409

1,134,567 979,103 417,580 340,875

Less allowance for doubtful accounts - (5,402) - -

Net 1,134,567 973,701 417,580 340,875

Bad and doubtful debts expense for the year - 895 - -



20102010 20092009

Not

e

Related parties

Within credit terms 80,503 51,296 6,501 3,466

Overdue:

Less than 3 months - - - -

3-12 months - 13 - -

Over 12 months - - - -

80,503 51,309 6,501 3,466

Less allowance for doubtful accounts - - - -

80,503 51,309 6,501 3,466

Other parties

Within credit terms 1,041,173 912,351 406,705 335,726

Overdue:

Less than 3 months 11,770 6,514 3,902 1,683

3-12 months 1,121 4,205 472 -

Over 12 months - 4,724 - -

1,054,064 927,794 411,079 337,409

Less allowance for doubtful accounts - (5,402) - -

1,054,064 922,392 411,079 337,409

Net 1,134,567 973,701 417,580 340,875



20102010 20092009

The normal credit term granted by the group is 30-90 days

6. Trade accounts receivable

Aging analyses for trade accounts receivable were as follows:


Notes

The currency denomination of trade accounts receivable as at 31 December was as follows:

7. Inventories

Thai Baht (THB) 1,112,729 961,125 407,984 336,264

United States Dollars (USD) 12,739 5,547 9,596 4,611

Yen (JPY) 9,099 7,029 - -

Total 1,134,567 973,701 417,580 340,875



20102010 20092009

Finished goods 122,771 51,092 41,369 16,502

Work in process 74,412 79,333 3,321 12,306

Raw materials 136,330 108,059 24,984 21,092

Spare parts and factory supplies 168,528 114,701 71,1057 49,580

Goods in transit 45,162 27,184 16 2,796

547,203 380,369 140,795 102,276

Less allowance for decline in value (16,173) (16,184) (3,545) (3,940)

Net 531,030 364,185 137,250 98,336



20102010 20092009


8. Investments in subsidiaries

Investments in subsidiaries as at 31 December 2010 and 2009, and dividend income from those investments for the years then ended were as follows:

At the board of directors’ meeting of the Company held on 12 November 2010 approved to increase the authorized share capital of International Casting Products Company Limited from Baht 185 million to Baht 785 million by issuing 60 million new ordinary shares of Baht 10 par value. The Company had registered the increase of shares capital with the Ministry of Commerce on 3 December 2010. 9. Investments in associates

Notes

At 1 January 1,252,018 1,252,018

Acquisitions 600,000 -

At 31 December 1,852,018 1,252,018


2010 2009

Separate financial statements

Ownership interest

(%)Paid-upcapital

Costmethod

Dividend income

2010 2009 2010 20092010 2009 2010 2009Subsidiaries

Somboon Malleable Iron Industrial Company Limited 100 100 160,000 160,000 535,995 535,995 - -

Bangkok Spring Industrial Company Limited 100 100 130,000 130,000 519,989 519,989 - -

International Casting Products Company Limited 100 100 785,000 185,000 796,034 196,034 - -

Total 1,852,018 1,252,018 - -

(in thousand Baht)

At 1 January 114,467 110,920

Share of net profit of investments - equity method 30,619 9,838

Dividend income (4,531) (6,291)

At 31 December 140,555 114,467

Consolidated financial statements(in thousand Baht)

2010 2009


Notes

Investments in associates as at 31 December 2010 and 2009, and dividend income from those investments for the years then ended were as follows:

The investment in Tsuchiyoshi Somboon Coated Sand Company Limited, accounted for under the equity method as at 31 December 2010, was calculated based on audited financial statements of that company for the year ended 31 March 2010 and unaudited/unreviewed financial statements of the company for the nine-month period ended 31 December 2010 prepared by its management.

The investment in Yamada Somboon Company Limited, accounted for under the equity method as at 31 December 2010, was calculated based on audited financial statements of that company for the six-month period ended 30 June 2010 and unaudited/ unreviewed financial statements of the Company for the six-month period ended 31 December 2010 prepared by its management. 10. Other long-term investments

Consolidated financial statements

Ownership Interest

(%)

2010 2009 2010 20102010 20102009 20092009 2009

Associates

Tsuchiyoshi Somboon Coated

Sand Company Limited 21.25 21.25 72,000 72,000 15,300 15,300 32,143 30,003 (1,531) -

Yamada Somboon Company

Limited 20.00 20.00 150,000 150,000 30,807 30,807 108,412 84,464 (3,000) (6,291)

Total 46,107 46,107 140,555 114,467 (4,531) (6,291)

Paid-upcapital

Dividend income

Costmethod

Equitymethod

(in thousand Baht)


Name of the entity Type of businessOwnership

Interest(%)

2553 2552 2553 2552

Cost(in thousand

Baht)

Paid-upcapital

UWXZ[\W]^_

Nisshinbo Somboon Automotive Manufacture and sale of

Company Limited auto parts and brake systems 732,600 2.90 2.90 21,250 21,250

Somboon Somic Manufacturing Manufacture and sale of

Company Limited auto parts 300,000 1.80 1.80 5,401 5,401

Total 26,651 26,651


Notes

11. Property, plant and equipment

Consolidated financial statements (in thousand Baht)

Land Machinery and

factory equipment

VehiclesBuildings and other construc-

tions

Office furniture,

fixtures and equipment

Assets under construction

andinstallation

Total

Cost / revaluation

At 1 January 2009 897,389 893,508 4,296,593 88,838 31,651 478,321 6,686,300

Additions 47,600 1,043 24,21 8 2,903 543 455,592 531,899

Transfers - 81,802 445,742 93 - (527,637) -

Disposals - (419) (26,596) (302) (550) (855) (28,722)

At 31 December 2009 and

1 January 2010 944,989 975,934 4,739,957 91,532 31,644 405,421 7,189,477

Additions 13 22,893 44,114 13,384 189 794,334 874,927

Transfers - 99,235 572,375 7,767 754 (680,131) -

Disposals - (256) (143,492) (4,320) (1,860) - (149,928)

At 31 December 2010 945,002 1,097,806 5,212,954 108,363 30,727 519,624 7,914,476

Depreciation

At 1 January 2009 - 202,833 2,214,864 70,208 21,652 - 2,509,557

Depreciation charge for the year - 41,427 371,177 10,011 4,240 - 426,855

Transfers - - - - - - -

Disposals - (52) (330) (302) (583) - (1,267)


1 January 2010 - 244,208 2,585,711 79,917 25,309 - 2,935,145


Transfers - - - - - - -

Disposals - (155) (8,833) (4,299) (1,857) - (15,144)

At 31 December 2010 - 320,346 2,868,038 78,904 26,727 - 3,294,015


Notes

Net book value

At 1 January 2009

Owned assets 897,389 690,675 2,081,729 18,630 - 478,321 4,166,744

Assets under finance leases - - - - 9,999 - 9,999

897,389 690,675 2,081,729 18,630 9,999 478,321 4,176,743


1 January 2010

Owned assets 944,989 731,726 2,096,100 11,615 - 405,42 4,189,851

Assets under finance leases - - 58,146 - 6,335 - 64,481

944,989 731,726 2,154,246 11,615 6,335 405,42 4,254,332

At 31 December 2010

Owned assets 945,002 777,460 2,279,310 29,459 - 519,62 4,550,855

Assets under finance leases - - 65,606 - 4,000 - 69,606

945,002 777,460 2,344,916 29,459 4,000 519,62 4,620,461


Land Machinery and

factory equipment


tions

Office furniture,



andinstallation

Total


Separate financial statements (in thousand Baht)

Land Machinery and

factory equipment


tions

Office furniture,



andinstallation

Total

Notes

Cost / revaluation

At 1 January 2009 106,598 172,465 1,485,227 35,683 18,576 273,965 2,092,514

Additions - 190 8,579 1,225 - 104,196 114,190

Transfers - 80,601 25,218 - - (105,819) -

Disposals - - - - - - -


1 January 2010 106,598 253,256 1,519,024 36,908 18,576 272,342 2,206,704

Additions - 44 13,215 6,821 23 6,020 26,123

Transfers - 30,345 217,970 27 753 (249,095) -

Disposals - (272) (82) (1,184) - - (1,538)

At 31 December 2010 106,598 283,373 1,750,127 42,572 19,352 29,267 2,231,289

Depreciation

At 1 January 2009 - 38,863 703,435 18,393 9,746 - 770,437


Transfers - - - - - - -

Disposals - - - - - - -


1 January 2010 - 48,257 842,138 24,999 13,288 - 928,682


Transfers - - - - - - -

Disposals - (20) (80) (1,169) - - (1,269)

At 31 December 2010 - 62,738 996,140 30,498 16,026 - 1,105,402


The gross amount of the Company’s fully depreciated property, plant and equipment that was still in use as at 31 December 2010 amounted to Baht 930.8 million (2009: Baht 1,219.9 million).

As at 31 December 2010, land of subsidiaries valued at Baht 123.7 million comprises land of which the legal ownership has yet to be transferred to the subsidiaries, which is in accordance with the agreements to purchase and to sell the land.

As at 31 December 2010, subsidiaries have machines under sales and financial lease-back agreements with net book values totalling Baht 65.6 million (2009: Baht 58 million).

The Company and its subsidiaries have mortgaged a majority of their land with structures thereon and machineries as collateral for credit facilities granted by commercial banks. During 2010, the subsidiaries capitalised interest amounting to Baht 4.1 million (2009: Baht 2.2 million) to the costs of plant construction and machinery installation the Company capitalised interest were borrowing costs of loans obtained for general purposes but utilised for this specific project. The weighted average rates used to determine the amount of borrowing costs eligible for capitalisation were 3.01% - 4.99% per annum. (2009: 2.2% - 4.8% per annum).

Net book value

At 1 January 2009

Owned assets 106,598 133,602 781,792 17,290 - 273,965 1,313,247


106,598 133,602 781,792 17,290 8,830 273,965 1,322,077


1 January 2010

Owned assets 106,598 204,999 676,886 11,909 - 272,342 1,272,734


106,598 204,999 676,886 11,909 5,288 272,342 1,278,022

At 31 December 2010

Owned assets 106,598 220,635 753,987 12,074 - 29,267 1,122,561


106,598 220,635 753,987 12,074 3,326 29,267 1,125,887


Land Machinery and

factory equipment


tions

Office furniture,



andinstallation

Total

Notes


12. Intangible assets


Software under

installation

Software licences

Total

Cost

At 1 January 2009 21,789 16,240 38,029

Additions 6,231 12,924 19,155

Transfers - - -

Disposals - (16,910) (16,910)

At 31 December 2009 and 1 January 2010 28,020 12,254 40,274

Additions 10,075 36,276 46,351

Transfers 23,546 (23,546) -

Disposals - - -

At 31 December 2010 61,641 24,984 86,625

Amortisation

At 1 January 2009 12,260 - 12,260

Amortisation charge for the year 4,660 - 4,660

Disposals - - -

At 31 December 2009 and 1 January 2010 16,920 - 16,920


Disposals - - -

At 31 December 2010 24,107 - 24,107

Net book value

At 1 January 2009 9,529 16,240 25,769


A31 December 2010 37,534 24,984 62,518

Notes


13. Assets not used in operations

Assets not used in operations represent land of its subsidiaries, which have been placed as collateral for credit facilities of the subsidiary.

Notes

Cost

At 1 January 2009 10,016 5,124 15,140

Additions 3,969 1,785 5,754

Disposals - (5,479) (5,479)


Additions 2,395 11,794 14,189

Disposals - - -

At 31 December 2010 16,380 13,224 29,604

Amortisation

At 1 January 2009 1,836 - 1,836


At 31 December 2009 and 1 January 2010 4,044 - 4,044


Disposals - - -

At 31 December 2010 6,686 - 6,686

Net book value

At 1 January 2009 8,180 5,124 13,304


At 31 December 2010 9,694 13,224 22,918


Software under

installation

Software licences

Total


14. Interest-bearing liabilities

Notes

Current

Bank overdrafts

secured - 23 - -


- promissory notes

unsecured 861 - - -

Bank overdrafts and short-term loans

from financial institutions 861 23 - -


- trust receipts

secured - 80,444 - -

unsecured 26,520 134,983 - -

26,520 215,427 - -

Current portion of long-term loans from

financial institutions

secured 255,996 428,817 94,414 258,606

Current portion of finance lease liabilities 16,710 13,284 1,094 1,445

Total 300,087 657,551 95,508 260,051

Non-current

Long-term loans from financial institutions

secured 2,083,737 1,644,193 778,557 1,305,174

Finance lease liabilities 41,553 45,587 20 1,016

2,125,290 1,689,780 778,577 1,306,190

Total 2,425,377 2,347,331 874,085 1,566,241



20102010 20092009


The periods to maturity of interest-bearing liabilities, excluding finance lease liabilities, as at 31 December were as follows:

The bank overdrafts are secured by the mortgage of the majority of the Company’s and a subsidiaries’ land with premises and part of their machineries.

Short-term loans from financial institutions - trust receipts carry interest at rates of 2.18% to 2.85% per annum, and are secured by the pledge of inventories of two subsidiaries, the mortgage of the majority of the Company’s and its two subsidiaries’ land with premises and part of their machineries.

On 30 July 2009, the Company and a subsidiary agreed to amend their loan agreements with a bank. Under these amendments, there are one year grace periods for payment of principal, from 30 July 2009 to 30 July 2010, and then payment is to be made in accordance with the existing conditions, such that due date of the final installment will be extended consistent with the grace period. During the grace period, the Company and its subsidiary must continue to comply with the conditions regarding maintenance of certain financial ratios and dividend payment. The Company and its subsidiary fully paid the loans in September 2010.

Long-term credit facility of a subsidiary company contain certain covenants such as dividend payment, pertaining to matters such as there shall be no effect on the total debt to equity ratio, loan repayment ability, and other conditions stipulated by the bank

On 28 September 2010, the Company and its subsidiaries had entered into the loan agreements with new domestic bank regarding the financial supports in term of short-term and long-term credit facilities, which comprise of working capital facility and to expand future investment projects. Credit facilities are totalling in the amount of Baht 3,804 million and agreement term is 8 years. As at 30 September 2010, the Company and its subsidiaries had paid the existing term loan by refinancing loan to close the long-term loan agreements.

Notes

Within one year 283,377 644,267 94,414 258,606

After one year but within five years 1,528,066 1,644,193 560,114 1,305,174

After five years 555,671 - 218,443 -

Total 2,367,114 2,288,460 872,971 1,563,780



20102010 20092009


On 26 August 2010, the Company has entered into interest rate swap agreement amounting to Baht 500 million and agreement term is 8 years in order to manage the risk of finance cost of the Company’s long-term loan of Baht 901 million. The agreement has been effective on 29 September 2010.

As at 31 December 2010, the long-term credit facilities of the Company and its subsidiaries which have not yet been drawn down amounted to Baht 894 million.

The agreements are mortgaged by a majority of the land with premises and machinery of the Company and its subsidiaries.

Due to the new loan agreement, the Company and its subsidiaries must be complied with certain conditions while utilising the credit facility, pertaining to matters, such as the maintenance of certain financial ratios stipulated by the agreement.

Finance lease liabilities

Finance lease liabilities as at 31 December were payable as follows:

Notes

Within one year 16,710 2,945 19,655 13,284 3,637 16,921

After one year but within five years 41,553 3,897 45,450 45,587 6,842 52,429

After 5 years - - - - - -

Total 58,263 6,842 65,105 58,871 10,479 69,350

2010 2009


Principal PrincipalInterest InterestPayments Payments

Within one year 1,094 155 1,249 1,445 212 1,657

After one year but within five years 20 3 23 1,016 158 1,174

After 5 years - - - - - -

Total 1,114 158 1,272 2,461 370 2,831

2010 2009


Principal PrincipalInterest InterestPayments Payments


The Company and its subsidiaries have entered into the finance lease agreements with leasing companies for rental of vehicles for use in their operation, whereby they are committed to pay rental on a monthly basis. The terms of the agreements are generally between 4 and 5 years. Finance lease agreements are non-cancelable.

Interest-bearing liabilities of the Group and the Company as at 31 December 2010 and 2009 were denominated entirely in Thai Baht. 15. Trade accounts payable

The currency denomination of trade accounts receivable as at 31 December was as follows:

16. Other current liabilities

Notes

Thai Baht (THB) 938,314 603,736 329,980 241,312

United States Dollars (USD) 80,077 28,483 4,010 6,356

Yen (JPY) 46,393 73,202 14,539 2,481

Total 1,064,784 705,421 348,529 250,149



20102010 20092009

Related parties 4 2,890 122 - -

Other parties 1,061,894 705,299 348,529 250,149

Total 1,064,784 705,421 348,529 250,149



20102010 20092009

Not

e

Accrued operating expenses 196,847 120,770 61,361 39,953

Deposits and advances received 2,886 4,649 - -

Total 199,733 125,419 61,361 39,953



20102010 20092009


Notes

17. Share capital

At the Extraordinary General Meeting of Shareholders held on 20 July 2010, the shareholders passed resolutions to increase the authorized share capital from Baht 300 million to Baht 340 million by issuing 40 million new ordinary shares of Baht 1 par value, which allocate 25 million new ordinary shares to be reserve for the exercise of TSRs and 15 million new ordinary shares to be offer for private placement. There were 24.92 million shares of TSRs was exercised at Baht 14 per share and issued 15 million shares at Baht 21.80 per share for the private placement. The Company had registered the increase of shares capital with the Ministry of Commerce on 22 September 2010.

18. Additional paid-in capital and reserves

Share premium Section 51 of the Public Companies Act B.E. 2535 requires companies to set aside share subscription monies received in excess of the par value of the shares issued to a reserve account (“share premium”). Share premium is not available for dividend distribution.

Legal reserve Section 116 of the Public Companies Act B.E. 2535 Section 116 requires that a company shall allocate not less than 5% of its annual net profit, less any accumulated losses brought forward, to a reserve account (“legal reserve”), until this account reaches an amount not less than 10% of the registered authorised capital. The legal reserve is not available for dividend distribution.

Authorised

At 1 January - Ordinary shares 1 300,000 300,000 300,000 300,000

Increase of new shares 1 40,000 40,000 - -

At 31 December ordinary shares 1 340,000 340,000 300,000 300,000

Issued and paid-up

At 1 January - Ordinary shares 1 300,000 300,000 300,000 300,000

Issue of new shares 1 39,923 39,923 - -

At 31 December ordinary shares 1 339,923 339,923 300,000 300,000

25522553Par valueper share(in Baht) NumberNumber Baht Baht

(in thousand Baht)


Notes

19. Segment information

Business segmentsManagement considers that the Group operates in a single line of business, namely manufacture and sale of auto parts, and has, therefore, only one major business segment.

Geographic segmentsManagement considers that the Group operates in a single geographic area, namely in Thailand, and has, therefore, only one major geographic segment. 20. Provident fund

The defined contribution plan comprise provident fund established by the Group for its employees. Membership to the fund is on a voluntary basis. Contributions are made monthly by the employees at rates ranging from 3% to 5% of their basic salaries and by the Group at rates ranging from 3% to 5% of the employees’ basic salaries. The provident fund is registered with the Ministry of Finance as juristic entity and is managed by a licensed Fund Manager.

21. Expenses by nature

The statements of income include an analysis of expenses by function. Expenses by nature disclosed in accordance with the requirements of various TFRS were as follows:

Salary and wages and employee benefit expenses 886,044 612,606 292,845 232,074

Depreciation and amortisation expense 438,389 433,585 179,619 158,985

Raw materials and consumables used 2,353,254 1,884,774 1,062,495 657,684

Changes in inventories of finished goods

and work in process 66,758 59,030 16,875 12,504

Others 1,703,583 888,478 291,666 276,134

Total cost of sales of goods, selling expenses

and administrative expenses 5,448,028 3,878,473 1,843,500 1,337,381



20102010 20092009


22. Income tax expense

Income tax reductionRoyal Decree No. 387 B.E. 2544 dated 5 September 2001 and No. 421 B.E. 2547 dated 11 October 2004 grants companies listed on the Stock Exchange of Thailand, which registered their stocks not later than 31 December 2005 a reduction in the corporate income tax rate from 30% to 25% for taxable profit for five consecutive accounting periods beginning on or after enactment.

The current tax expense in the consolidated and separate statements of income is less than the amount determined by applying the Thai corporation tax rate to the accounting profit for the year principally because:

(a) a significant portion of the Company's profit was derived from promoted activities for which concessionary tax rates apply;

(b) of the different treatment for accounting and taxation purposes of certain items of income and expenses; and

23. Promotional privileges

By virtue of the provisions of the Industrial Investment Promotion Act of B.E. 2520, the Group has been granted privileges by the Board of Investment relating to The privileges granted significantly include:

(a) exemption from payment of import duty on machinery approved by the Board; (b) exemption from payment of income tax for certain operations for a period of eight years from

the date on which the income is first derived from such operations, to the extent that the amount of tax exemptions do not exceed investment capital exclusive of land and working capital;

(c) a 50% reduction in the normal income tax rate on the net profit derived from certain operations for a period of five years, commencing from the expiry date in (b) above; and

As promoted companies, the Company and its subsidiaries must comply with certain terms and conditions prescribed in the promotional certificates.

Notes


Summary of revenue from promoted and non-promoted businesses:

24. Basic earnings per share

The calculations of basic earnings per share for the years ended 31 December 2010 and 2009 were based on the profit for the years attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding during the years as follows:

Notes


2010 2009

Export sales 52,361 11,599 63,960 1,022 31,432 32,454

Local sales 1,290,957 815,111 2,106,068 895,106 510,048 1,405,154

Other income 17,203 198,815 216,018 16,466 182,080 198,546

Total Revenue 1,360,521 1,025,525 2,386,046 912,594 723,560 1,636,154

Total TotalPromotedbusinesses

Promotedbusinesses

Non-promoted businesses

Non-promoted businesses

Export sales 52,361 157,942 210,303 1,022 263,972 264,994

Local sales 3,066,279 4,016,535 7,082,814 2,748,240 2,011,427 4,759,667

Eliminate (875,704) (1,082) (876,786) (668,455) (8,428) (676,883)

Total Revenue 2,242,936 4,173,395 6,416,331 2,080,807 2,266,971 4,347,778


2010 2009Total TotalPromoted

businessesPromoted

businessesNon-promoted

businessesNon-promoted

businesses

� ��

the Company (basic) 771,343 314,439 436,569 202,265

Number of ordinary shares outstanding at 1 January 300,000 300,000 300,000 300,000

Effect of shares issued on 22 September 2010 11,047 - 11,047 -

Weighted average number of ordinary

shares outstanding (basic) 311,047 300,000 311,047 300,000

Earnings per share (basic) (in Baht) 2.48 1.05 1.40 0.67

Separatefinancial statements


20102010 20092009

(in thousand Baht / thousand shares)


25. Dividend

At the Board of Directors’ meeting of the Company held on 20 July 2010, the Board of Directors approved the payment of interim dividend at the rate of Baht 0.40 per share, totaling Baht 120 million from the first half year of 2010 promoted business (BOI). The dividend was paid to shareholder on 19 August 2010

26. Financial instruments

Financial risk management policiesThe Group is exposed to normal business risks from changes in market interest rates and currency exchange rates and from non-performance of contractual obligations by counterparties. The Group does not hold or issue derivative financial instruments for speculative or trading purposes.

Risk management is integral to the whole business of the Group. The Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. The management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved.

Capital management The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Board monitors the return on capital, which the Group defines as result from operating activities divided by total shareholders’ equity, excluding non-controlling interests and also monitors the level of dividends to ordinary shareholders. Interest rate risk Interest rate risk is the risk that future movements in market interest rates will affect the results of the Group’s operations and its cash flows because loan interest rates are mainly fixed. The Group is primarily exposed to interest rate risk from its borrowings (Note 14). The Group mitigates this risk by ensuring that the majority of its borrowings are at fixed interest rates and uses derivative financial instruments, principally interest rate swaps, to manage exposure to fluctuations in interest rates on specific debt securities and borrowings.

Notes


The interest rates of loans receivable as at 31 December and the periods in which the loans receivable mature or re-price were as follows:

The effective interest rates of interest-bearing financial liabilities as at 31 December and the periods in which those liabilities mature or re-price were as follows:

Notes

2010

Current

Short-term loans to subsidiaries 2.9 - 3.6 310,000 - - 310,000

Total 310,000 - - 310,000

2009

Current

Short-term loans to subsidiaries 2.9 - 3.6 263,000 - - 263,000

Total 263,000 - - 263,000

Separate financial statements (in thousand Baht)Interestrate(%

per annum)

After 1 year but

within 5 years

After5 years

Within 1 year

Total

2010

Current

Loans from financial institutions FDR.3M + fixed 283,377 - - 283,377

Non-current

Loans from financial institutions FDR.3M + fixed - 1,528,066 555,671 2,083,737

Total 283,377 1,528,066 555,671 2,367,114

2009

Current

Loans from financial institutions MLR - fixed 644,267 - - 644,267

Non-current

Loans from financial institutions MLR - fixed - 1,644,193 - 1,644,193

Total 644,267 1,644,193 - 2,288,460

Consolidated financial statements (in thousand Baht)Interestrate(%

per annum)

After 1 year but

within 5 years

After5 years

Within 1 year

Total


Notes

Foreign currency risk The Group is exposed to foreign currency risk relating to purchases and sales which are denominated in foreign currencies. The Group primarily utilizes forward exchange contracts with maturities of less than one year to hedge such financial assets and liabilities denominated in foreign currencies. The forward exchange contracts entered into at the reporting date also relate to anticipated purchases and sales, denominated in foreign currencies, for the subsequent period

At 31 December, the Group and the Company were exposed to foreign currency risk in respect of financial assets and liabilities denominated in the following currencies:

2010

Current

Loans from financial institutions FDR.3M + fixed 94,414 - - 94,414

Non-current

Loans from financial institutions FDR.3M + fixed - 560,114 218,443 778,557

Total 94,414 560,114 218,443 872,971

2009

Current

Loans from financial institutions MLR - fixed 258,606 - - 258,606

Non-current

Loans from financial institutions MLR - fixed - 1,305,175 - 1,305,175

Total 258,606 1,305,175 - 1,563,781

Separate financial statements (in thousand Baht)Interestrate(%

per annum)

After 1 year but

within 5 years

After5 years

Within 1 year

Total

United States Dollars

Trade accounts receivable 6 12,739 5,547 9,596 4,611

Trade accounts payable 15 (80,077) (28,483) (4,010) (6,356)

Gross balance sheet exposure (67,338) (22,936) 5,586 (1,745)

Currency forwards - 5,214 - -

Net exposure (67,338) (17,722) 5,586 (1,745)



20102010 20092009

Not

e


Notes

Credit risk Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial and contractual obligations to the Group as and when they fall due.

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. At the reporting date there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet. However, due to the large number of parties comprising the Group’s customer base, Management does not anticipate material losses from its debt collection.

Liquidity riskThe Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows.

Determination of fair valuesA number of the Group’s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. The fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s length transaction. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Since the majority of financial assets and financial liabilities of the Company and its subsidiaries are short-term in nature, interest rates of loans and borrowings are approximate to the market rate, the fair value of financial assets and financial liabilities are presented as the amount stated in the balance sheet.

Fair value of interest swap contract as at 31 December 2010 has net value in amounting of Baht 500.48 million.

Yen

Trade accounts receivable 6 9,099 7,029 - -

Trade accounts payable 15 (46,393) (73,202) (14,539) (2,481)

Gross balance sheet exposure (37,294) (66,173) (14,539) (2,481)

Currency forwards - 5,214 - -

Net exposure (37,294) (35,915) (14,539) (2,481)



20102010 20092009

Not

e


Notes

27. Commitments with non-related parties

Capital commitments

Contracted but not provided for

Land 55.4 65.7 - -

Machineries and equipments 303.7 3.7 - -

Intangible assets 0.3 21.6 0.3 5.8

Building constructions 144.4 - 1.6 -

Total 503.8 91.0 1.9 5.8


(in million Baht)

Consolidatedfinancial statements

(in million Baht)

20102010 20092009

Non-cancellable operating lease commitments

Within one year 23.2 43.1 15.6 16.4

After one year but within five years 24.8 28.4 18.2 26.2

After five years - - - -

Total 48.0 71.5 33.8 42.6

Other commitments

Forward contracts - 35.5 - -

Bank guarantees 48.0 42.9 13.3 12.3

Total 48.0 78.4 13.3 12.3


(in million Baht)

Consolidatedfinancial statements

(in million Baht)

20102010 20092009


Notes

The Company has entered into a technical assistance agreement with a foreign company covering the machining process, whereby the Company is to pay fees at a rate of 1.5% of the cost of the machining process minus material cost of products. The agreement is for 5 years, expiring in 2010 and is renewable for a further 5 years.

The Company has entered into a technical assistance agreement with another foreign company covering the forging process whereby the Company is to pay fees at a rate of 3% of the forging process minus material costs of products. The agreement is for 5 years, expiring in 2014 and is renewable for a further 5 years.

A subsidiary has entered into a technical assistance agreement with a foreign company regarding the process of machining, whereby the subsidiary is to pay a fee at 1.5% of the cost of the machining process minus material costs of products. The agreement is for 5 years, expiring in the year 2014, and is renewable for a further 5 years.

Another subsidiary company has entered into a technical assistance agreement with a foreign company regarding the process of casting, whereby the subsidiary is to pay a monthly fee of Yen 1 million. The agreement is for 5 years, expiring in the year 2010, and is renewable for a further 5 years.

As at 31 December 2009, the Group had outstanding forward exchange contracts to hedge accounts payable amounting to approximately U.S. Dollars 5.2 million and Yen 30.3 million.

As at 31 December 2010, the Company had an interest rate swap agreement to maintain interest rate of long term loan amounting to Baht 487.5 million from floating rate to fixed rate as stipulated by the agreement.

28. Events after the reporting period

At the Board of Directors’ meeting of the Company held on 24 February 2011, the Board of Directors approved the payment of annual dividend at the rate of Baht 0.90 per share, totaling Baht 290 million from the profit of the promoted business (BOI). The interim dividend was paid to shareholder on 19 August 2010 at the rate of Baht 0.40 per share, totaling Baht 120 million. Therefore, there is the remaining of Baht 0.50 per share, totaling Baht 170 million. The dividend will be paid on 18 May 2011.


Notes

29. Thai Financial Reporting Standards (TFRS) not yet adopted

The Group has not adopted the following new and revised TAS/TFRS that have been issued as of the reporting date but are not yet effective. The new and revised TAS/TFRS are anticipated to become effective for annual financial periods beginning on or after 1 January in the year indicated.

TAS 1 (revised 2009) Presentation of Financial Statements 2011

TAS 2 (revised 2009) Inventories 2011

TAS 7 (revised 2009) Statement of Cash Flows 2011

TAS 8 (revised 2009) Accounting Policies, Changes in Accounting Estimates and Errors 2011

TAS 10 (revised 2009) Events after the Reporting Period 2011

TAS 12 Income Taxes 2013

TAS 16 (revised 2009) Property, Plant and Equipment 2011

TAS 17 (revised 2009) Leases 2011

TAS 18 (revised 2009) Revenue 2011

TAS 19 Employee Benefits 2011

TAS 21 (revised 2009) The Effects of Changes in Foreign Exchange Rates 2013

TAS 23 (revised 2009) Borrowing Costs 2011

TAS 24 (revised 2009) Related Party Disclosures 2011

TAS 27 (revised 2009) Consolidated and Separate Financial Statements 2011

TAS 28 (revised 2009) Investments in Associates 2011

TAS 31 (revised 2009) Interests in Joint Ventures 2011

TAS 33 (revised 2009) Earnings per Share 2011

TAS 34 (revised 2009) Interim Financial Reporting 2011

TAS 36 (revised 2009) Impairment of Assets 2011

TAS 37 (revised 2009) Provisions, Contingent Liabilities and Contingent Assets 2011

TAS 38 (revised 2009) Intangible Assets 2011

TFRS 2 Share-based Payment 2011

TFRS 5 (revised 2009) Non-current Assets Held for Sale and Discontinued Operations 2011

TAS/TFRS YeareffectiveTopic

Management expects to adopt and apply these new TFRS in accordance with the FAP’s announcement and is presently considering the potential initially impact on the consolidated and separate financial statements.


However, instances where application of a new or revised standard or standards will clearly have a material impact on the Company and management will have initially made an assessment of the potential impact of these standards on the Company’s financial statements are as follow;

TAS 16 (revised 2009) – Property, plant and equipment

The principal changes introduced by the revised TAS 16 and affecting the Group/Company are that (i) costs of asset dismantlement, removal and restoration have to be included as asset costs and subject to annual depreciation; (ii) the depreciation charge has to be determined separately for each significant part of an asset; and (iii) in determining the depreciable amount, the residual value of an item of property, plant and equipment has to be measured at the amount estimated receivable currently for the asset if the asset were already of the age and in the condition expected at the end of its useful life. Furthermore, the residual value and useful life of an asset have to be reviewed at least at each financial year-end.

The revised TAS 16 permits as a transitional provision that these changes may be introduced prospectively from the year of introduction. Management intends to adopt this transitional provision and accordingly the introduction of the revised TAS 16 from 1 January 2011 has no impact on the financial statements of 2010 or prior years. Management is currently reviewing the impact on the financial statements of introducing the revised TAS 16 from 1 January 2011.

TAS 19 – Employee benefits

There is currently no Thai accounting standard covering employee benefits and the Group/Company does not presently account for the costs of post-employment benefits under defined benefit plans; other long-term employee benefits; and termination benefits until such costs are incurred. The new TAS 19 includes the requirements to recognise and account for such costs in the period in which the service is performed. The requirements are complex and require actuarial assumptions to measure the obligation and expense. Moreover, the obligations are measured on a discounted basis because they may be settled many years after the employees render the related service. The transitional provisions of TAS 19 permit the transitional liability to be recognised and accounted for in one of four different ways:

(i) retrospectively; (ii) immediately in equity (retained earnings) at the transition date; (iii) immediately in profit or loss at the transition date; (iv) as an expense on a straight-line basis over up to five years from the transition date.

Management has determined that the transitional liability as at 1 January 2011 for post-employment benefits is Baht 102.4 million for the Group and Baht 46.6 million for the Company. Management intends to adopt transitional provision (i) to recognise and account for this liability.


Notes

30. Reclassification of accounts

Certain accounts in the 2009 financial statements have been reclassified to conform to the presentation in the 2010 financial statements as follows:

The reclassifications have been made because, in the opinion of management, the new classification is more appropriate to the Group’s business.

Balance sheet


- related parties 51,309 (51,309) - 3,466 (3,466) -

Net trade accounts receivable

- unrelated parties 922,392 (922,392) - 337,409 (337,409) -

Trade accounts receivable - 973,701 973,701 - 340,875 340,875


- related parties 122 (122) - - - -


- unrelated parties 705,299 (705,299) - 250,149 (250,149) -

Trade accounts payable - 705,421 705,421 - 250,149 250,149

- -

2009



Reclass. Afterreclass.

Afterreclass.

Reclass.Beforereclass.

Beforereclass.

sat: annual report 2010 eng

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