ANNUAL DISCLOSURE OF INFORMATION / ANNUAL REPORT 2020 OF INFORMATION ANNUAL DISCLOSURE ANNUAL DISCLOSURE OF INFORMATION / ANNUAL REPORT 2020 Vinythai Public Company Limited, PVC Resins, Chlor-Alkali and Epichlorohydrin Producer RESPONSIBILITY TOWARDS RESPONSIBILITY TOWARDS Annual Disclosureนf Information / Annual Report 2019 Annual Report 2018 Annual Report 2017 Annual Report 2016 Annual Report 2020 Annual Report 2015 Annual Report 2014 Annual Report 2013 Annual Report 2012 Annual Report 2011 Annual Report 2010 Annual Report 2009 Annual Report 2008 Annual Report 2007 Annual Report 2006 Annual Report 2005 Annual Report 2004 Annual Report 2003 Annual Report 2002 Annual Report 2001 Annual Report 2000 Annual Report 1999 Annual Report 1998 Annual Report 1997 Annual Report 1996 Vinythai Public Company Limited BKK Office: No. 944 Mitrtown Office Tower, 14th Floor, Rama 4 Road, Wangmai Sub-District, Pathumwan District, Bangkok 10330 Tel: (66) 0-2030-6800 Fax: (66) 0-2030-6801-2 Head Office (Plant): No. 2, I-3 Road, Map Ta Phut Industrial Estate, Map Ta Phut Sub-District, Mueang Rayong District, Rayong Province 21150 Tel: (66) 0-3892-5000 Fax: (66) 0-3868-3048 Website: www.vinythai.co.th, www.vinythaicoral.org RESPONSIBILITY TOWARDS ANNUAL DISCLOSURE OF INFORMATION / ANNUAL REPORT 2020 VINYTHAI PUBLIC COMPANY LIMITED CONTENTS FINANCIAL HIGHLIGHTS 4 MESSAGE FROM THE CHAIRMAN 6 BUSINESS AND PERFORMANCE 8 Business Structure and Operation 9 Risk Management and Mitigation 30 Sustainability Management 36 Management Discussion and Analysis (MD&A) for the Year 2020 66 General Information and Other Information 71 CORPORATE GOVERNANCE 74 Corporate Governance Policy 75 Corporate Governance Structure and Information about the Board of Directors, Committees, Management and Employees 88 Corporate Governance Report 104 Internal Control 119 2020 Significant Related Transactions 123 FINANCIAL REPORT 125 ATTACHMENT 200 ATTACHMENT 1 Information of Directors, Management, Empowered Persons and Company Secretary ATTACHMENT 2 Information of Director’s Position in Subsidiary Company ATTACHMENT 3 Information of Head of Internal Audit and Corporate Governance Officer ATTACHMENT 4 Assets Used in Business Operation ATTACHMENT 5 Corporate Governance & Business Code of Conduct ATTACHMENT 5.1 Corporate Governance ATTACHMENT 5.2 Business Code of Conduct: ATTACHMENT 6 Audit Committee Report SOCIAL CONTRIBUTION AND AWARDS & RECOGNITIONS 2020 201 4 Vinythai Annual Report 2020 Financial Highlights Unit: Million Baht 2018# 2019# 2020# Sales Revenues 19,946 18,605 16,907 Total Revenues 20,171 18,871 17,074 Gross Profit 4,297 4,418 3,590 Profit from Operating Activities 3,261 3,232 2,480 Net Profit 3,059 3,635 2,173 Depreciation 1,241 1,282 1,503 Cash Flow from Operating Activities 3,952 4,872 4,050 Capital Expenditures 620 489 710 Total Assets 21,596 23,558 26,401 Total Liabilities 1,828 1,718 4,045 Total Loan - - - Shareholders’ Equity 19,768 21,840 22,356 Persons Employed as of Year End 506 514 525 Information per Share & Financial Ratio Unit: Baht 2018# 2019# 2020# Earning per Share 2.58 3.07 1.83 Book Value per Share 16.68 18.43 18.86 Dividend per Share (baht/share) 1.300 1.400 0.900 Net Profit Margin 15.2% 19.3% 12.7% Return on average equity (ROE) 16.3% 17.5% 9.8% Return on average assets (ROA) 15.8% 14.4% 9.9% # Information above were extracted from consolidated financial statements. * The Board of Directors’ Meeting resolved to propose the Annual Ordinary General Meeting of Shareholders to consider and approve in April 2021. Vinythai Public Company Limited 5 Total Assets 30,000 26,401 25,000 23,558 21,596 20,000 15,000 MTHB 10,000 5,000 0 2018 2019 2020 Sales by Products 10,000 PVC Resins 9,046 9,299 9,000 8,981 Caustic Soda VCM 8,000 Others 7,000 ECH 6,000 5,348 5,000 5,230 4,192 MTHB 4,000 4,022 3,000 2,753 2,000 2,015 1,492 1,450 1,333 1,000 126 0 102 68 2018 2019 2020 Gross Profit and Net Profit 4,418 4,500 4,297 4,000 3,635 3,590 3,500 3,059 3,000 Gross Profit 2,500 Net Profit 2,173 MTHB 2,000 1,500 1,000 500 0 2018 2019 2020 MESSAGE FROM THE CHAIRMAN Vinythai Public Company Limited 7 GROWTH AMBITIONS REMAIN UNCHANGED In 2020, a novel coronavirus emerged as an invisible enemy including ECH debottlenecking and maximizing Chlor-alkali that upended people’s lives around the world. The COVID-19 production. The establishment of a PVC pilot plant and AGC pandemic not only posed a tremendous threat to human SEA Production Technology Center are in progress. Moreover, existence and life way but also economic security. our plan for production capacity expansion was well accepted Vinythai was naturally also affected by all this. In response, by the concerned local authorities and communities at the 3rd the company triggered the Business Contingency Plan (BCP), public hearing and preparations are progressing. put in place policies and issued preventive measures against Another high priority resolutely pursued is compliance. COVID-19 to ensure every employee stayed safe while enabling On this score, we have succeeded in achieving CAC our customers to continue their businesses by delivering Recertification as assessed by Thailand’s Private Sector our products as ordered. Collective Action Against Corruption. Although the pandemic has negatively affected our performance, our growth ambitions remain unchanged. Utmost Our social programs have also proceeded well. Of particular efforts continue to be exerted to maintain our existing operation. note at this time are the 1,000 pieces of PVC protective coveralls First and foremost, safe and stable operations as ever carry and more than 20 kiloliters of sodium hypochlorite we have the highest priorities. Evidence of our success with this takes donated to responsible authorities and the 100 sets of PVC many forms, not least our record of 12 million work hours partitions we have donated to two local schools to help fight without lost time accident, and rigorous implementation of the the spread of Covid-19. “Vinythai Coral Cultivation Project” and eight pillars of TPM (Total Productive Management) that form “Noenphra-Vinythai Super Minimarathon” has also continued to the basis of stable operation. One might also point to is installation expand, thanks to great collaboration with local communities. of fatigue detectors in our transporters’ trucks to reduce It was also pleasing this year to see our reputation further the incidence of accidents on the road, as well as inauguration enhanced by awards and accolades. Most notable among of salt transportation by rail. these are: Zero Accident Campaign 2020 Silver Award; Good Secondly, cost and quality have made us more competitive Environmental Governance and Social Responsibility Award; and as we could deliver higher levels of customer satisfaction. This ESG 100 (Environmental, Social and Governance) Certificate results from our successful efforts at cost reduction, production for the fourth consecutive year. mix optimization, product quality improvement, development of new grades of products, and sales strategies under tough Given the uncertain conditions caused by COVID-19, market conditions. Lastly, also of great benefit has been our we will simply continue our efforts to do what we do best with our human resources development program, with the inauguration proven spirit of “One Team” and the vision of “Growing with You”. of a new Technical Learning Center and rolling out of several On behalf of the company, I would like to thank all production and non-production training courses. our stakeholders for your much-valued support throughout In parallel, we have been preparing for growth. Several the year. We will continue trying our best to develop the company measures to increase production capacity have been taken, further for the future. (Mr. Kazuaki Koga) Chairman of the Board of Directors BUSINESS AND PERFORMANCE Vinythai Public Company Limited 9 BUSINESS STRUCTURE AND OPERATION BUSINESS OVERVIEW The Vinythai Public Company Limited’s (“Company”) (“Vinythai”) production facilities are located at Map Ta Phut Industrial Estate in Rayong Province. They include two PVC plants (emulsion and suspension resins), one Vinyl Chloride Monomer (VCM) plant, one Ethylene Dichloride (EDC) plant, and one Chlor-Alkali (CA) plant. The company’s production facilities are fully integrated plant from CA to PVC, so that the company can rely as much as possible on locally- purchased raw materials and utilities, including ethylene from PTT Global Chemical Public Company Limited, salt from Pimai Salt Company Limited (PSC), and electricity from Glow Energy Public Company Limited. Also with the objective of ensuring availability of raw materials, the company holds a minority shareholding in PSC. In addition to chlorine, which is utilized in downstream production processes, the company’s Chlor-Alkali plant produces significant quantities of Caustic Soda as well as Hydrogen and Sodium Hypochlorite. These products are sold in the domestic market. The company’s facilities are also equipped to import EDC and VCM as the need arises. Advanced Biochemical (Thailand) Co., Ltd. (Subsidiary) Advanced Biochemical (Thailand) Co., Ltd. (“ABT”) manufactures and sells Bio-Based Epichlorohydrin, a chemical substance mainly used in the Epoxy Resin production. It operates a plant located at Map Ta Phut Industrial Estate in Rayong Province, in the site of its parent company (Vinythai). The main raw materials of this process are Glycerin, Hydrochloric Acid and Caustic Soda. The Glycerin is procured from domestic suppliers and import, Hydrochloric Acid and Caustic Soda are procured from its parent company (Vinythai). 10 Vinythai Annual Report 2020 VISION Growing with You - As a Trusted and Innovative Partner Vinythai grows its business on its solid operating foundations, continuous innovation, and the trust it earns from its stakeholders. The company prides itself on always acting ethically and responsibly towards environment and its stakeholders.