Vision “To be a leading investment company that serves customers with heartfelt service, dedication to ongoing development and social contribution values.” Mission • To invest in high-potential business. • To increase satisfaction of the supporting trades and services. • To develop industrial parks to an international standard level. Dr.Thiam Chokwatana’s • To incorporate good corporate governance Philosophical principles, as well as, promote ongoing personnel development in terms of business expertise, moral and ethics, and social and environmental awareness. “ To conduct a good business, you must disregard self-interest and adhere to ethical Target practices ” To achieve sustainable business growth. 2 SAHA PATHANA INTER-HOLDING PUBLIC COMPANY LIMITED Content Financial Highlights 4 Report of the Board of Directors 5 Report of the Audit Committee 6 Business Operations • The Policy and Overview of Company’s Business Operation 8 • Vision, Objective, Gold and Operational strategies 9 • Background and Significant Development 10 • Shareholding Structure of the Group Company 18 • Nature of Business 21 • The Risk Factors 43 • Legal Dispute 47 Management • Securieies and Shareholders 48 • Management Structure 50 Good Corporate Governance • Corporate Governance Policies 68 • Subcommittees 112 • Nomination and Appoinment Company’s Director and Executives 125 • Corporate Governance of Subsidiaries and Jointed Venture 132 • Control of Internal Data Usage 132 • Auditor’s Fee 133 • Compliance with Other Principle Good Corporate Governance Principles in Other Matters 133 Internal Control and Risk Management 136 Accounting Internal Control System Report 141 Related Transaction 142 Explanation and Analysis of Financial Position and 153 Operating Performance of the Management Report on the Board of Directors Responsibiliy for Financeial Statement 158 Auditor’s Report 159 Financial Statements 161 Financial Statements and Financial Ratios 216 Synopsis Operations 217 Corporate Profile and Any Other Significant Matters 218 • Investment 220 Board of Directors and Executive Board • Board of Directors 223 • Executive Board 225 • Information of The Directors Executives, Controlling Persons and Company Secretry 226 • Company Directors who seats in related Companies 237 Corporate Social Responsibility 239 Investors are able to access more information of securities issuer from the annual report (From 56-1) of Company on www.sec.or.th or Company’s website. www.spi.co.th ANNUAL REPORT 2015 3 FINANCIAL HIGHLIGHTS (UNIT : 1,000 Baht) 2015 2014 2013 Total Income 4,210,735 4,209,136 4,176,691 Net Profit 1,317,087 1,150,142 1,299,971 Basic Net Profit Per Share (Baht) 2.67 2.33 2.63 Dividend Payment 113,628 113,628 113,628 Dividends Payout Ratio (%) n.a. 9.88 8.74 Share Capital, Fully Paid 494,034 494,034 494,034 Premium on Share Capital 1,041,358 1,041,358 1,041,358 Shareholders' Equity 20,357,248 19,353,640 17,576,696 Book Value per Share (Baht) 41.21 39.17 35.58 Investment 17,923,734 17,260,932 15,664,382 Total Assets 23,087,821 21,854,248 19,999,817 Total Revenue and Profit Total Assets and Shareholders’ Equity 2011 68 (Unit : Million Baht) 2015 182 2012 202 4,210,735 Industrial park 4,176,691 4,209,136 business 2014 2011 171 2015 1,930 2,410 1,299,971 1,150,142 1,317,087 2013 Invesments 304 Rent and business and others service business 2012 2014 2,253 2013 2014 2015 2,611 2013 Total Revenue and Profit 2,469 2011 2015 1,210 23,087,821 1,619 (Unit : Million Baht) 21,854,248 19,999,817 20,357,248 Invesments 19,353,640 2012 business and others 1,449 17,576,696 2014 1,351 Invesments 2013 business and others 1,404 2013 2014 2015 4 SAHA PATHANA INTER-HOLDING PUBLIC COMPANY LIMITED Report of the Board of Directors Thailand’s economy in 2015 expanded from the previous year with the amount of total investment rising by 4.7%, mainly as a result of the investment from the public sector which has expanded to 29.8 %; household consumption grew by 2.1 %, as a consequence of the growing significance of the tourism and the construction sectors. In addition, in 2015 Thailand progressed into a new long-term economic era of normality or “New Normal”, which has meant substantial changes to various dimensions of the economy. International trade is slowing down. Inflation is low. The global financial system is linked more closely to Thailand and fluctuations from overseas can mean rapid changes. The demography of Thai society is showing an aging population. The Board of Directors recognizes these challenges and remains aware and proactive in stimulating and encouraging development with the goal of increasing the competitiveness of the Company’s business. In 2015 the company’s revenue stood at 4,211 million Baht, a rise of 0.04 %. By considering these factors, the Utility income had decreased 9.73 %, the electricity and steam business was also down significantly as a result of the declining oil prices which were factors that were beyond the company’s control. However, revenues from consulting services increased by 5.23 %. The income from equity investments in associated companies under the equity methods increased 12.07 %, and dividend income increased 24.81 % respectively due to following up existing investments, promoting trade, and increasing distribution channel enhancement, both domestically and internationally, of invested companies. The result of such aggressive action and the adaptation of strategies in response to the “New Normal” of the Thai economy coupled with cost control led to enhanced profitability. As a result, in 2015, the Company’s profits have increased to 1,317 million Baht, an increase of 14.52 % upon 2014. Additionally, the Company continues to maintain a corporate credit rating of AA stable outlook by TRIS Rating Co., Ltd., which reflected well on its management and its efforts to achieve the principles of good corporate governance. In 2016, a year into the country becoming part of the ASEAN Economic Community, the Company’s focus will be on the development and investment in special economic zones, in response to government policy, especially in Mae Sot, Tak Province. This has lead to a strategic advantage and the development of Saha Group Industrial Park toward an environmentally friendly and sustainable area for growth. The Company has shown ongoing continual action in the importance of operating under the principles of good corporate governance, ethical conduct and transparency in the conduct of business. The Company signed a declaration of intent called the “Collective Action Coalition” as part of the project of Thailand’s Private Sector Collective Action Coalition Against Corruption, as well as to adhere to the spirit and responsibilities to society as a whole. Moreover, the company has a policy against corruption and abides by this core policy and has issued a practical guide and ongoing training to reinforce its code of ethics and to allow communication with the organization and its stakeholders. On behalf of the Board of Directors, we would like to thank all employees, as well as all shareholders, customers, suppliers, business partners, financial institutions, the Government and the private sector for all the trust given to our company. This support and cooperation has led to the smooth running of the business. The Company will continue to adhere to the practice of “good people, good products, good society” to allow sustainable growth in the future. ANNUAL REPORT 2015 5 ReportReport of the of theAudit Audit Committee Committee Dear Shareholders of Saha Pathana Inter-Holding Public Company Limited, DearThe Shareholders Audit Committee of of Saha Saha Pathana Inter-Holding Inter-Holding Public Public Company Company Limited Limited, was appointed by the Board of Directors The Audit Committee of Saha Pathana Inter-Holding Public Company Limited was appointed by the Board onof May Directors 14th, 2015 on May with 14th,three independent,2014 with non-executivethree independent, members: non-executive Mr. Nophorn Bhongsvej members: as Mr. Chairman, Nophorn Pol. Bhongsvej Lt. Gen. as AmarinChairman, Niemskul Pol. and Lt. Mr.Gen. Krish Amarin Follett Niemskulas Audit Committee and Mr. Krishwith a Follettterm of as one Audit year. Committee The committee with has a termheld eighteenof one year. meetingsThe committee in 2015. Mr. has Nophorn held thirteen Bhongsvej, meetings Mr. Krish in Follett2014. and Mr. Pol.Nophorn Lt. Gen. Bhongsvej, Amarin Niemskul Mr. Krish attended Follett all meetings. and Pol. Lt. Gen. Amarin Niemskul attended all meetings. TheThe Audit Audit Committee Committee has performed has performed their duties their within duties the withinauthority the and authority the responsibilities and the responsibilities entrusted by the entrusted Board by ofthe Directors Board asof follows:Directors as follows: 1. 1.To To review review the the quarterly quarterly financial financial statements statements and and those those for for the the accounting accounting year year 2015. 2014. The The financial financial statementsstatements are areprepared prepared in accordance in accordance with generally with generally accepted accepted accounting accounting standards standards with explaining with explaining from thefrom auditor the and auditor the executives and the executives of accounting of accounting department departmentin order to ensure in order correct to ensure and complete correct disclosure and complete of disclosureinformation. of information. 2. To review related transactions and disclosure of information on related transactions