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Annual Report 2016 the Bangchak Petroleum Public Company Limited

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Annual Report 2016 the Bangchak Petroleum Public Company Limited Annual Report 2016 The Bangchak Petroleum Public Company Limited To be the Leading Asian Greenovative Group, founded on Good Corporate Governance, through Inclusiveness and Sustainability Table of Contents 002 Message from the Chairman 085 • Report of the Audit Committee 088 • Report of the Nomination and 004 Financial Highlights Remuneration Committee 089 • Changes in the Securities Portfolios 005 Policy and Business Overview of the Board and the Executive 005 • Vision, Missions, Objectives 090 Bangchak and Sustainability and Goals, and Business Strategies 007 • Shareholding Structure 091 Internal Control 012 • Transition and milestone development 094 Risk Management 014 • Awards of 2016 097 Connected Transactions 017 Business Description 017 • Revenue Structure 111 Financial Status and 018 • Product and Service Features Operational Results 023 • Marketing and competition 111 • Management’s Discussion and Analysis for Business Operations 032 Shareholder Structure 136 • Declaration of the Directors’ Responsibility for the Financial 035 Management Structure Statements 036 • Board of Directors 137 • Report of Certified Public Accountant 050 • Executive Management 141 • Financial Statements 152 • Notes to the Financial Statements 073 Corporate Governance 082 • Report of the Corporate Governance 241 General Information and Other Key Committee Information 084 • Report of the Enterprise-wide Risk 241 • Company Information Management Committee 246 • Information on Reference Persons Vision : To be the Leading Asian Greenovative Group, founded on Good Corporate Governance, through Inclusiveness and Sustainability Mission : BCP commits in bringing Disruptive and Inclusive Greenovation to Delight our customers, being a trusted partner and Value Creator for all Stakeholders, and promoting Sustainable Development to Society. We emphasize Inclusive and Sustainable business, pursue Domestic and Overseas expansion, embrace Good Corporate Governance principles, and nurture a High- performance, Learning culture and Happy Core : Values B C P Innovation Agility & Mobility Beyond Continuous Pursuit of Expectation Development Sustainability Corporate Culture : Sustainable Innovative Business Development in Harmony with the Environment and Society Employee Culture : To be virtuous, knowledgeable, and contributive to others 002 Annual Report 2016 For 32 years Bangchak has developed sustainable innovative business in harmony with the environment and society The Bangchak Petroleum Public Company Limited 003 Message from the Chairman BCP commits in bringing Disruptive and accommodating current lifestyles of Thais of leading a life Inclusive Greenovation while looking after the environment. We also unveiled to Delight our customers. SPAR, a leading supermarket brand from the Netherlands Being a trusted partner under a “SPAR ‘FRESH & EASY FOOD MARKET’” concept, and Value Creator for all Stakeholders. to serve customers with differentiation like fresh food, while promoting community products by developing them and We emphasize Inclusive housing them for sale under the SPAR brand. and Sustainable business. As for green businesses, in September we listed subsidiary BCPG PCL on the Stock Exchange of Thailand (SET) and Under the “Thailand 4.0” national strategy, The Bangchak ventured into the solar farm business in Japan while Petroleum Public Company Limited’s business management relentlessly growing the biofuel and bioethanol businesses. focuses on applying innovations to extend business operating Late this year, Bangchak acquired 50 million more capital efficiency together with competitiveness, strengthening the in Lithium Americas Corporation for further investment in organization, while expressing socio-environmental a lithium mining business in Argentina. responsibility for sustainable development—Bangchak’s For the past 32 years, Bangchak has valued sustainable legacy corporate culture for the past 32 years. business operation in parallel with socio-environmental This year we modified our vision to keep pace with business responsibility through its own projects, whereas today we growth for future goals. The vision now reads: have passed on and extended our culture to affiliates and “To be the Leading Asian Greenovative Group, founded all stakeholders. Whether they are business partners, on Good Corporate Governance, through Inclusiveness customers, or suppliers, they have a role in socio- and Sustainability” environmental stewardship. A case in point is the Green Partnership Project, under which Bangchak service station We value research and development (R&D) by upgrading operators initiated environmental stewardship activities or our research tasks to Bangchak Initiative Innovation Center projects to benefit communities in areas where they did (BIIC) to examine work on assorted internal and institutional business while ensuring contented employees. research findings and strive to grow new businesses, including a bio-products project and a project to We also set up Oam Suk Social Enterprise Co., Ltd., a administer energy consumption through energy storage. full-fledged social enterprise designed to encourage farmers in Chiang Rai to grow rice and engage in organic This year, Bangchak and subsidiaries posted Baht 144.705 farming to add value to their produce while upgrading billion in revenue from sales and services, EBITDA of Baht their quality of life. 11.363 billion, and a net profit attributable to owners of the Company of Baht 4.773 billion, which translated into With our commitment to business development in tandem Baht 3.47 in earnings per share, a 15% rise from last year. with socio-environmental stewardship, joint contribution to better Thai lives and to supplement overall economic Our refinery business achieved some 110,000 barrels per values at the same time, Bangchak has won acclaim in day in capacity, which was fairly stable thanks to sound the forms of prestigious social and environmental refining plans and sound refining logistical management, achievement awards, granted by numerous domestic and resulting in a basic refining margin of US$5.99 per barrel. international entities, including recognition of corporate With the recovering crude oil price toward the year-end, governance and investor relations work. the business saw Baht 590 million in inventory gain together with Baht 112 million in forward purchases of oil I therefore wish to express our collective thanks to all our and oil products. The bottom line is that our refinery stakeholders—employees, business partners and business posted a 13% rise in EBITDA over last year. suppliers, customers, investors, public and private agencies, among others—for their invaluable contribution Our marking business boasted a total sales volume of to Bangchak’s secure and sustainable growth. 5,789 million liters, a 7% rise over last year, thanks to the healthy domestic demand for fuels (both retail and industrial markets). The gross marketing margin stood at (Signed) Pichai Chunhavajira Baht 0.79 per liter. In November, we unveiled “Bangchak (Mr. Pichai Chunhavajira) Greenovative Experience”, a new format of service station Chairman 004 Annual Report 2016 Financial Highlights Consolidated Financial Statements 2016 2015 2014 Statement of Income (Million Baht) Sales and service revenue 144,705 151,140 183,016 Gross profit (loss) 11,896 11,454 4,543 EBITDA 11,363 11,081 5,162 Profit (loss) from futures crude and product contracts 107 (407) 499 Profit (loss) from foreign exchange and futures 276 22 758 foreign-currency trading Net profit 1/ 4,773 4,151 696 Statement of Financial Position (Million Baht) Total assets 101,783 81,942 76,966 Total liabilities 57,874 45,959 43,000 Shareholders’ equity 43,909 35,983 33,966 Share capital • Registered share capital 1,377 1,377 1,532 • Issued & fully paid-up share capital 1,377 1,377 1,377 Financial Ratios (%) EBITDA / sales and service revenue 7.85 7.33 2.82 Net profit / sales and service revenue 3.27 2.71 0.41 Rate of return on assets 7.51 8.04 2.29 Debt with interest payable to equity 2/ 0.86 0.94 0.92 Net IBD to Equity 2/ 0.38 0.59 0.67 Operating outcomes per share (Baht) Net earnings per share 3.47 3.01 0.51 Book value per share 28.72 25.77 24.19 Note: 1/ Net profit (loss) for the owners of the Company 2/ Only the equity of the Company The Bangchak Petroleum Public Company Limited 005 Policy and Business Overview Vision, Mission, Objectives and Goals, and Business Strategies This year Bangchak revised its vision, mission, and values as annually practiced to ensure that they are in line with business and investment directions, as well as the business environment, that have changed. The details are as follows: Vision Evolving Greenovation To be the leading Asian Greenovation group, founded on good governance, through inclusiveness and sustainability Mission Bangchak is committed to bringing disruptive and inclusive Greenovation to delight our customers, being a trusted partner and value creator for all stakeholders, and promoting sustainable development of society. We emphasize inclusive and sustainable business, pursue domestic and overseas expansion, embrace good corporate governance principles, and nurture a high-performance, learning culture, and happy workplace. Objectives and goals Bangchak is determined to be a Thai energy entity that conducts business with concern for the environment and society. It aims to strike a good balance between worth and value, with contribution to a better quality of life of the Thai people. Valuing sustainable growth
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