Annual TPIPL 2019 E.1Forpdf

Annual TPIPL 2019 E.1Forpdf

C o n t e n t s Message from the Board of Directors 167 Corporate Development in 2019 209 Financial Highlights 169 Operating Results and Financial Status in 2019 217 Corporate Profile 171 Inter-Company Transaction 226 Awards that Make us Proud 174 Risk Management 228 Audit Committee’s Report for the year 2019 176 Financial Structure 229 Sustainable Development 177 Shareholding Structure & Dividend Payment Policy 230 TPI Polene and Social Responsibility 184 The Management 231 TPI Polene, its Quality, Safety, Hygiene and Environment 193 Corporate Governance 251 Overview of Business Operations 195 Report of the Board of Directors’ Responsibilities Business Structure of the Group 196 for Financial Statements 257 Nature of Business 197 Auditor’s Report 258 Affiliated Companies 206 Consolidated Financial Statements 262 Revenues Structure 208 Investors can access the information of the Company that issued security, from the annual report (form 56-1) of the Company through the website at www.sec.or.th We Build the Future The Company has consistently developed production efficiency to create competitive advantages in the organization as well as consistently developed corporate efficiency in all aspects of the business to keep pace with modern technology dynamics and new innovation. This is part of our policy to sustain financial stability and to consistently develop product innovations to be environmentally friendly with a focus on good corporate governance with social responsibility with an aim to create sustainability of return on investment. We build the future together. Annual Report 2019 166 TPI Polene Public Company Limited Message from the Board of Directors To: Shareholders Dear Sirs, The year 2019 and early 2020 have been times of challenges for TPI Polene Group, which was affected by the slowdown of the economy in the country and in the global market. These challenges included the China-United States trade war, the fluctuation of Thai Baht, the strict measurements and policies of Thai financial institutions in providing home loans for real estate purchases, and an ongoing outbreak of the Coronavirus disease 2019 (COVID-19), which first originated in China and has since been carried to other countries, including Thailand. All of these factors have directly affected Thailand’s purchasing power in the real estate sector and in the construction industry. TPI Polene understands that improving the working process to be in line with economic conditions and the dynamics of technological advances and new innovation are crucial in business today. Therefore, the Company has consistently improved the efficiency of our production process to create competitive advantages and maximize our investment potential so as to create sustainability within the Company Group. However, with the full cooperation of all members of the Company’s staff and management team, the Company successfully pursued its business operations and achieved its objectives as planned. Our Bright Operating Results in 2019 In 2019, the Company and its subsidiaries reported total revenues from sales of Baht 37,041 million compared with Baht 34,993 million in 2018, an increase of 5.85%. Total consolidated income in 2019 was Baht 39,268 million compared with Baht 37,315 million in 2018, an increase of 5.24%. In 2019, the Company and its subsidiaries registered a profit for the year of Baht 2,765 million compared with the same in 2018 of Baht 1,425 million, an increase in profit of 94.05%, reflecting the Company’s bright operating results in 2019. New Products Development and Consistent Creation of New Products Innovation TPI Polene still focuses on new product development to correspond to the wide-ranging effect of modern technology through online sales and modern trade centers. The Company also used modern technology to consistently respond to customers’ demands in the market. This included tough board, as its properties are equivalent to natural wood and its weight is 40% lighter than traditional fiber cement. With a distinctly durable character, tough board can be cut, screwed or completely fill the pinholes/space on fiber cement sheets without erosion or cracks as it has better properties than traditional fiber cement. The fiber cement sheets can be suitably used to replace wood stiles, doors and windows, as well as in a variety of furniture work as fiber cement is manufactured to be long-lasting and saves costs and is more available as compared to wood. It is manufactured to ensure moisture endurance, flexibility, freedom from termites and insect infestation. Most importantly, TPIPL lightweight tough boards are toxic-free and safe for human beings. The Company has also successfully developed and launched organic products to be used for households and in industries, such as high quality grease remover, dishwasher , hygienic soap, liquid hand soap, Biosan and Pro-vita, healthy beverage, etc. Reduction of its paid-up capital by writing off the Company’s unsold repurchase shares On 24 July 2019, TPI Polene reduced its paid-up capital by writing off the Company’s 19,180,500,000 unsold repurchase shares under the share repurchase scheme for financial management purpose. After the registration of the above changes, the Company’s new registered capital reduced from Baht 20,190,000,000 to Baht 19,180,500,000, and was divided into 19,180,500,000 common shares, at the par value of Baht 1 each. Share Repurchase Scheme In 2020 The Company’s Board of Directors meeting no. 1/2563, held on 30 January 2020, passed a resolution to approve the Share Repurchase Scheme for Financial Management Purpose. The number of shares to be repurchased under the Scheme will be 383,610,000 shares, representing 2% of total issued and paid-up shares, with the maximum amount for the share repurchase of not greater than Baht 800,000,000. The repurchase period will be from 14 February 2020 to 13 August 2020. Interim Dividend Payment of Baht 0.03 per share With the Company’s consistently improved operating performance and established sustainable return on investment to ensure share- holders’ confident, the Company’s Board of Directors meeting no. 11/2562, held on 28 November 2019, passed a resolution to approve the interim dividend payment from the Company’s unappropriated retained earnings, at Baht 0.03 per share, totaling Baht 575,415,000 and the dividend payment date was scheduled for 26 December 2019. 167 Assigned Corporate Credit Rating as “BBB+” with a rating outlook revised upward to “Positive” from “Stable” On 10 April 2019, TRIS Rating affirmed the Company rating on TPIPL as “BBB+” with a “Positive” outlook from “Stable”. The ratings also incorporated TRIS Rating’s expectation on an improving financial profile when all new power plants of TPI Polene Power achieve full-year operations. The current credit rating reflected TPIPL’s strong market position in the Thai cement market, diversified sources of revenue, and stable cash flows from the power generation business of TPI Polene Power. Success of the Offering for Sale of Baht 17,930 million Debentures During 2019-January 2020, TPI Polene Group successfully completed fund raising through the issuance and sale offering of debentures in total amount of Baht 17,930 million, with the TRIS affirmed credit rating of such debentures at BBB+, with an upward trend revised to a “Positive” outlook. The proceeds from the fund raising was utilized to refinance the matured debentures of Baht 10,750 million and for prepayment of outstanding debt for cement line 4 of Euro 107,683,591.41 (or an equivalent of Baht 3,700 million) in July 2019. The remaining Baht 3,480 million has been utilized for efficiency improvements of factories in power plants, the cement business and for working capital. To this end, TPI Polene Group has a policy to maintain financial stability in order to enhance stability and to constantly keep pace with economic and financial instability. Consistently awarded the Industrial certificates The current achievements in business operations of the Group has been reflected in the Company’s awards and certificates in 2019, such as the “Efficient Energy Saving Label” from the Department of Renewable Energy and Energy Conservation, and the Ministry of Energy and CSR-DIW Continuous Award 2019 (Standard for Corporate Social Responsibility from Department of Industrial Work), which we received for the 3rd consecutive year. These awards confirm TPI Polene Group’s strong commitment to consistently protect the surrounding environment while creating public well-being in surrounding communities. The Company’s current success has been one of our proudest achievements as a Thai Corporation to be able to be competitive internationally. On behalf of the Company, the Company’s Board of Directors would like to take this opportunity to thank all related parties for a well-coordinated effort and their ongoing trust in the Company to create unswerving progress for the organization. It is a major goal of the management team and all levels of the Company’s staff to move the business forward to overcome obstacles to achieve the goal. We strengthened our growth potential so as to create sustainability within the group, to create stability for the organization, and to enhance the economic strength of the country. To this end, the Company realized the importance of conducting business operations by emphasizing the balanced consideration of all related parties, the fair treatment of all parties concerned, while supporting public well-being and consistently protecting the surrounding

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