ANNUAL REPORT 2018 ANNUAL REPORT 2018 LOXLEY PUBLIC COMPANY LIMITED LOXLEY PUBLIC COMPANY LIMITED 102 Na Ranong Road, Klong Toey, Bangkok 10110, Thailand Phone : (66) 0-2348-8000 Fax : (66) 0-2348-8001 E-mail : [email protected] ANNUAL REPORT 2018 LOXLEY PUBLIC COMPANY LIMITED LOXLEY PUBLIC COMPANY LIMITED 102 Na Ranong Road, Klong Toey, Bangkok 10110, Thailand Phone : (66) 0-2348-8000 Fax : (66) 0-2348-8001 E-mail : [email protected] Contents Vision, Mission 1 Activities in Areas of Corporate Social 49 Background, Major Changes and 2 Responsibility Milestones Risk Factors 56 Corporate Goals and Strategy 4 Legal Disputes 58 Message from 5 Details of the Company 59 Chairman of the Board of Directors Capital Structure 60 2018 Activities 6 Details of Ownership in Loxley 62 Financial Summary 8 Subsidiaries, Associates, and Revenue Structure 9 Joint Ventures Organization Structure 10 Management 69 as of 31 December 2018 Executive Remuneration 81 New Organization Structure 2019 11 Corporate Governance 83 Board of Directors 12 Personnel 94 Executive Board 14 Information of Company Executives 97 Management Board 16 Information of Directors’ Positions 123 List of Department Management 18 in the Related Parties (Year 2018) Information of Directors’ Positions 126 Directors in the Subsidiaries Directly 19 in the Subsidiaries Owned by Loxley as of 31 Internal Control and Audit 129 December 2018 Report of Board’s Responsibility for 131 Information Technology SBG 21 Financial Report Food Services & Distribution SBG 24 Report of the Audit Committee 132 Energy SBG 28 Related Transactions 134 Network Solutions SBG 32 Management Discussion and Analysis 141 Services SBG 37 Related to the Results of Business Special Project Businesses 39 Operations Joint Venture Business 43 Independent Auditor’s Report 150 Support Unit 46 Statement of Financial Position 156 Other Parties 246 Vision “Inspired Choice for Customers, Business Partners and Investors” Mission 1. We seek to provide greater value in products and services to ensure complete customer satisfaction. 2. We strive to keep ahead of market changes and foster a climate of business innovation. 3. We seek to maintain our leadership in the area of information technology for our business progress. 4. We seek to continually strengthen our financial and human resources. 5. We shall adhere to the fair conduct of business for our shareholders, employees, and society. 2 Background, Major Changes and Milestones Loxley Public Company Limited has operated its business for over 80 years. It was founded on 15 January 1939 under the name Loxley Rice Company (Bangkok) Limited as a joint venture between Ng Yuk Long Lamsam and Andrew Beattie of W.R. Loxley Company of Hong Kong. Initially, the Company’s main activities were exports of agricultural products of Thailand, including rice and timbers. For over eight decades, the business has grown from strength to strength. In 1957, the Company’s name was changed to Loxley (Bangkok) Company Limited and expanded its export businesses as well as distribution of foreign products including industrial products and advanced technology products. Due to its outstanding performance, the Company had attracted a huge number of leading local and foreign corporations, many of which later became the company’s business partners. By the year 1988, with an aim to meet the ever-changing market demands, the Company expanded its business to cover technology. On 1 April 1993, the Company was transformed into a public company, being listed on the Stock Exchange of Thailand under the name of Loxley Public Company Limited. Our shares began to be traded on 25 January 1994 under the designation “LOXLEY” in the commercial group of stocks. LOXLEY PUBLIC COMPANY LIMITED 3 The Company has always committed to operating its business with a comprehensive range of products and services, focusing on sustainable growth in order to cater clients’ needs and to manage our assets in accordance with the value-added principle for maximum benefits of shareholders, employees, and the society. Four eras of Loxley’s 80-year development The First Era : from 1939 to 1952 The Company commenced its operation by exporting agricultural products, including rice and timbers, prior to expansion of imports of products after the World War II. The Second Era : from 1953 to 1987 Most of the Company’s imported products, which included machines, electrical appliances, and motors, were from England. Later, various categories of products were imported from Asian and other western countries, such as motors from Japan, cosmetics from Korea, Olivetti typewriter from Italy. The Company’s experience in advanced technology products in this era has contributed to unrivalled expertise in the area of technology in later years. The Third Era : from 1988 to 2010 Loxley has expanded the business to cover public utility infrastructure, telecommunication, energy, information technology and communications, as well as consumer products and services. It has not only developed its own working systems and products, but also been distributors and joint ventures of internationally-recognized products and technology. The Company has presently met consumers’ demands with a wide range of products. The Fourth Era : from 2011 to Present In the 8th decade of existence, the Company may, indeed, be called a conglomerate richly endowed with expertise in a number of areas with the strength of unity and individuality in such diversity through inter-related synergy. The heart to manage its operations as a conglomerate is to spread out the power to various executives at various levels in order to vest them with the decision-making authority. Besides being able to handle its core operations on a continuous basis over the years, the Company also continues to give great importance to environmentally-friendly businesses in the process of its operations which is not only reflective of its social responsibility but also adds to and reinforces its corporate value on a sustainable basis. 4 Corporate Goals and Strategy The Company has operated under a new business Increasing competitive capacity structure since 2018. The transformation, which focuses with focus on businesses that have on the businesses with strengths and competitive 1 the competitive potential and edge that can accommodate a market shift as well as profit-generating capacity. the economic, political and social changes, will lead to a sustainable development of the Company. Business transformation will also create several positive reinforcements to the Company. It helps wipe away the previous image of the Company, operating Developing human resources in a multitude of businesses with both profit and loss. 2 capabilities and building up the Moreover, it helps the Company to refocus solely on Corporate Culture with focus on the profit-oriented businesses that are in the growing maximizing the enhancement and industries. Also, the synergies among each strategic allocation of its resources. business groups’ operating units can beignited to build the strengths to generate additional revenue, enhance the potential competitive edge, as well as reduce the duplicate operating expenses. The synergies will Increasing the numerical operating not only increase the revenue but also decrease capacities for both revenue and profits the expenses. The main goals of this business 3 to reduce risks and increase returns transformation for sustainable development can be for the Company’s stakeholders. summarized into 3 dimensions as follows: LOXLEY PUBLIC COMPANY LIMITED 5 Message from Chairman of the Board of Directors After its re-structure in early 2018, Loxley Public Company Limited witnessed gradual improvements in its operations with its business lines separated into 5 main segments, each segment comprising proximate business lines and common strong points to add on-top to their business plans for maximal efficacy. Efforts were made by every segment to develop their modus oprandi and to reach towards the same goal and achieve the targets. In conducting the Company’s operations, importance is given to Corporate Good Governance as expected by the Stock Exchange and all relevant parties, and also to social and environmental responsibilities as can be seen from the Company’s continuous efforts for several years to locate businesses in the area of alternative energy and to promote activities in support of the disabled which have succeeded in bringing fame to the country. 2019 marked a joyous occasion with the Company’s 80th anniversary. Even though, throughout times past, the Company has had to counter various obstacles, both large and small with the diligence, determination and unity of both minds and efforts from every Loxley staff who tried to adjust their strategy to go on forward in their endeavours and faced the competition, the Company, however, was able to stride over the various obstacles in good grace. On the occasion of its 80th Anniversary, all Loxley staff and affliates stand proud to say that the Company has been able to fight through and overcome various crises on a number of occasions by strongly adhering throughout to the principles of Corporate Governance and Corporate Ethics hand-in-hand with action taken on its social responsibilities. The Company will always continue its conduct along this line for the Company’s prosperity in the long-term. Finally, in the name of the Board, may I take this opportunity to thank shareholders, customers, trading partners and business allies right through to every employee