trusted the best service-minded - tbsp

1

SERVICE-MINDED

THAI BRITISH SECURITY PRINTING PUBLIC COMPANY LIMITED

ANNUAL REPORT 2010

TRUSTED

PROFESSIONAL

THE BEST

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4 Vision 5-6 Financial Highlights 7 Income Structure 8 Business Structure 9 Message from the Board of Directors 10-11 Operating Results 12 Background and Development 13-21 Company Products 22-23 Risk Factors 24-25 Environment and Social Activities

Contents

26 Report of the Board of Directors’ Responsibilities for Financial Statement 27-28 Audit Committee’s Report 30-75 Financial Statements 76 Auditor’s Remuneration 77 Company Information 78 Major Shareholders 79-94 Management Structure 95-97 Connected Transactions 98 Management Discussion and Analysis of Financial Status and Performance 99-104 Corporate Governance

THAI BRITISH SECURITY PRINTING PUBLIC COMPANY LIMITED ANNUAL REPORT 2010 3

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Mission 1. Develop high value added products & services beyond customer’s expectation. 2. Strengthen international trade both exporting and sourcing. 3. Improve overall productivity. 4. Focus on people development to fit with TBSP’s values.

Values

• Trusted • The Best • Service-minded • Professional

“Being a world class Security Solutions Provider in terms of Quality, Services and Productivity”

Vision


** TO EQUITY HOLDERS OF THE PARENT

68

86

0

20

40

60

80

100

2006 2007 2008 2009 2010

45

6974

(Baht in Million)PROFIT (LOSS) ATTRIBUTABLE**

2009*

891

69

782

110

665

6.25

4.50

70.72

2007*

881

74

778

110

627

6.75

4.75

67.16

* Year 2007, 2008,2009 and 2010 = Consolidated ** Proposed for approval

* AND RENDERING OF SERVICES

*** TO THE COMPANY’S SHAREHOLDERS

2006

950

86

746

110

610

7.78

5.25

67.48

2008*

936

68

782

110

643

6.20

4.25

68.38

2010*

885

45

786

110

660

4.05

4.10**

100.00

(BAHT IN MILLION)

0

1

2

3

4

5

6

7

8

2006 2007 2008 2009 2010

4.05

6.256.206.75

7.78

EARNINGS PER SHARE(Baht)

0

200

400

600

800

1000

2006 2007 2008 2009 2010

885891936

881950

REVENUE FROM SALE OF GOODS*(Baht in Million)

610

0

100

200

300

400

500

600

700

800

2006 2007 2008 2009 2010

660665643627

TOTAL EQUITY ATTRIBUTABLE***(Baht in Million)

Revenue from sale of goods and rendering of services

Profit (loss) attributable to Equity holders of the parent

Total Assets

Authorised shares capital

Total equity attributable to the Company’s shareholders

Earnings per Share (Baht)

Dividends per Share (Baht)

Dividends Payout Ratio on net profit (%)

Financial Highlights

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Financial Ratio

11,000,000

10.00

59.96

4.05

4.10*

100.00

5.04

6.73

5.69

16.31

0.17

21.23

11,000,000

10.00

60.41

6.25

4.50

70.72

7.72

10.52

8.80

21.50

0.15

12.92

2009 (Baht’000)

2010 (Baht’000)

Total number of shares issued (Shares)

Par value (Baht)

Book Value per Share (Baht)

Earnings per share (Baht)

Dividends per share (Baht)

Dividends payout ratio on net profit (%)

Return on revenue from sale of goods and rendering of services (%)

Return on equity (%)

Return on total assets (%)

EBITDA on total assets (%)

Debt to equity ratio (Times)

Price earnings ratio (Times)**

*Proposed for approval **Price is the year ended price at which a security is traded in the local board of SET

890,991

899,233

681,263

217,971

127,886

168,073

68,774

476,613

781,713

96,500

103,722

110,000

110,000

677,991

664,533

884,753

896,503

695,277

201,226

142,722

127,824

44,562

515,523

785,593

107,209

113,683

110,000

110,000

671,910

659,595

Data from the Financial Statement 2009 (Baht’000)

2010 (Baht’000)

Revenue from sale of goods and rendering of services

Total revenues

Cost of Sales

Gross Profit

Operating Expenses

Profit before income tax, finance costs, depreciation and amortization (EBITDA)

Profit (loss) attributable to Equity holders of the parent

Total current assets

Total Assets

Total current liabilities

Total liabilities

Authorised shares capital

Issued and paid-up share capital

Total shareholders’ equity

Total equity attributable to the Company’s shareholders

Summary Report on the Company’s Financial Status


Plastic Card& Bureau Service

29.58%

Business Forms

13.90%

SecurityDocuments

26.41%

Cheques

10.33%

Export

4.09%

Trading

7.01%

Commercial

8.68%

In 2010, the Company realized total sales of 885 million Baht, a decreased of 6 million Baht or 1% decrease from 2009.

Of this figure, 849 million Baht was generated by domestic sales, with export contributing 36million Baht.

Products Portion

10.33%

26.41%

13.90%

8.68%

29.58%

7.01%

4.09%

100.00%

(Baht’000)

91,428

233,633

122,987

76,759

261,707

62,035

36,205

884,753

Portion

10.02%

22.38%

11.91%

8.73%

39.22%

4.61%

3.12%

100.00%

(Baht’000)

89,288

199,435

106,137

77,781

349,478

41,036

27,836

890,991

2009 2010

Cheques

Security Documents

Business Forms

Commercial

Plastic Card & Bureau Service

Trading

Export Sale

Total

2010

Cheques

Security Documents

Business Forms

Commercial

Plastic Card & Bureau Service

Trading

Export Sale

Income Structure

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The management structure as at January 25, 2011

The Board of Directors 1. Mr. Roongrote Rangsiyopash Chairman*

2. Mr. Krit Umpote Director

3. Mr. Kuasak La-orsuwan Director

4. Mrs.Nuanchan Boonpoijanasoontorn Director

5. Mr. Prasert Wongwaiwit Director

6. Mr. Poonpipat Aungurigul Director

7. Mr. Richard David Han Director

8. Mr. Somchart Baramichai Director

9. Mr. Somboon Chuchawal Director

10. Ms. Suvannee Lee Director

11. Mr. Suchai Korprasertsri Director

The Audit Committee 1. Mrs.Nuanchan Boonpoijanasoontorn** Chairman

2. Mr. Krit Umpote Audit Committee Member

3. Mr. Kuasak La-orsuwan Audit Committee Member

4. Mr. Poonpipat Aungurigul Audit Committee Member

The Nomination Committee 1. Mr. Krit Umpote Chairman

2. Mr. Richard David Han Nomination Committee Member

3. Mr. Somchart Baramichai Nomination Committee Member

The Remuneration Committee 1. Mr. Somboon Chuchawal Chairman

2. Mr. Prasert Wongwaiwit Remuneration Committee Member

3. Mr. Poonpipat Aungurigul Remuneration Committee Member

The Executive Committee 1. Mr. Somboon Chachuwal Chairman

2. Mr. Somchart Baramichai Executive Committee Member

3. Mr. Suchai Korprasertsri Executive Committee Member

Management

1. Mr. Suchai Korprasertsri Managing Director

2. Mr. Pracha Ekawaravong Technical R&D/IT Director

3. Mr. Pornchai Nimitmongkol Plant Director – Poochao Factory

4. Mr. Panu Ratanasingha Plant Director – Bangpoo Factory

5. Mrs. Wunwisa Tantivejakul Financial Controller

6. Mr. Apichart Prasittimaporn Human Resources Director

Secretary to the Board of Directors and Company Secretary 1. Mrs. Pornpen Namwong

* Being elected as Director and appointed as Chairman of the Board in replacement for Mr. Chaovalit Ekabut since January 7, 2011 **The director who has knowledge understanding and experience in accounting and financial to review the Company’s financial statement.

Business Structure

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However, the economic situation has offered limited

possibilities for expansion due to political instability, natural

disasters, fluctuation in oil price and increasing interest rates.

These factors as well as fierce competition have had impact on the

counterfeit-free printing business, causing a decrease in the

Company’s turnover last year. The Company’s turnover in 2010

reached the sales volume of 885 million baht, a decrease of 1%

with a net profit of 45 million baht, accounting for a decrease of

35%. The major products are fraud prevention instruments, credit

cards, and Thai postage stamps.

In 2011, in order to increase the efficiency of management

and strengthen the company to become the market leader at the

international level, the Company predicts greater turnover than

the previous year by improving service provision to customers,

fortifying coordination with business alliances in enhancing and

developing new products and services to enter the market,

expanding products to the international market as well as

improving organizational structure.

The Board of Directors wishes to express sincere gratitude

to all shareholders, customers, staff, trading partners, and other

stakeholders for their continued support. The Board hopes to have

your confidence and trust that the Company will conduct itself in

accordance with the principles of good corporate governance in

the highest interests of all shareholders and stakeholders and will

do its best to keep your trust and support in the years ahead.

(Mr. Suchai Korprasertsri)

Managing Director

In 2010, owing to the rapid recovery of the world economy coupled with the government’s policies regarding the observance of financial discipline and credible monetary policy, the Thai economy as a whole exceeded expectations.

(Mr. Roongrote Rangsiyopash)

Chairman

Message from the Board of Directors

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Operating Results

> The goal was achieved. The Company invested in machinery to increase production capacity as well as improved the efficiency of the internal information system by using new technology.

> The goal was achieved. The Company operated ongoing activities to build its relationship with its customers and the process of developing the CRM database to better answer their needs is still ongoing.

> The goal was achieved. The Company provided Document and Service Management Service to Financial Institutes.

> The goal was achieved. The Company expanded the printing market and prevented counterfeiting.

Based on the target goals in 2010

1. Expand the printing market and prevent counterfeiting at national and international levels by offering complete service.

4. Improve printing and internal factory management system, emphasizing investment in modern technology and management for greater efficiency.

3. Develop customer relationship management database to create greater acceptance and satisfaction on the customer’s part.

2. Emphasize the development of a variety of new products and allow new products to enter the market properly.

Operating Results


Target goals for 2011

1. To enhance the Company’s internal management to reach Operation Excellence in every aspect. 2. To highlight the development of the customers’ database to improve products and services to suit customers’ needs. 3. To expand the printing market, prevent counterfeiting and provide complete service regarding information management to customers as a Total Solution Provider.

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1978 Company was established as a joint venture between The British Printing and Communications

Corporation (Europe’s largest printing group) and four Thai banks, Thai Farmers Bank, Siam Commercial Bank,

Bank of Asia and Thai Danu Bank, to produce cheques and bank documents.

1982 Four more Thai banks joined the company, Bangkok Metropolitan Bank, Bank of Ayudhya, Union Bank of

Bangkok and Thai Military Bank.

1983 A second line of business was established to produce continuous security documents, business forms and

computer stationery.

1989 The company entered new markets with the production of the Thai passport and preprinted stamp postcards.

1992 The foreign shares were bought by the local banks and at the same time the company started plastic card

production for ATM, credit and smart cards.

1994 A ninth bank Krung Thai Bank became a shareholder and TBSP was transformed into a Public Company.

1995 The registered capital was increased to Baht 110 million, there was an Initial Public Offer and the company

applied for a listing on the Stock Exchange of Thailand.

1996 TBSP started trading on the Stock Exchange of Thailand on March 13, 1996. Started production, in the

second Factory at Bangpoo Industrial Estate on March 1, 1996. Printed both VISA and MASTERCARD.

Produced Hologram stamp for His Majesty the King’s Jubilee.

1997 Started contactless card production. Printed lottery tickets. Started export department.

1998 Company became cash positive and paid off all loans. Developed “Coil type” contactless card. Formed

audit committee.

1999 Company recovered from recession and resumed capital investment. Achieved ISO 14001 and became

one of the world’s leaders in Contactless Smart Card production.

2000 Sales increased by 19% during a difficult year and investment in new plant continued while remaining debt free.

New products developed for Security Documents and the company received the Certificate of Honour from The

Institute of Internal Auditors of Thailand in connection with the Best Practices on Corporate Governance.

2001 Won Good Governance Award for SMEs in Thailand.

2002 Bangpoo factory expanded. Thai banks sold their shares in TBSP to Siam Pulp and Paper Public Company

Limited. (recently changed the company’s name to the SCG Paper Public Company Limited)

2004 Achieved VISA Certificate for the manufacture and personalization of chip cards.

2005 Certified from VISA and MASTERCARD for card personalization of EMV.

2006 Expanded export market and gained trust from Thai banks and financial institutions to produce EMV cards.

2007 Strategic Partner Development in Printing and Data System Development under a new company namely

THAI BRITISH DPOST COMPANY LIMITED.

2008 The first card manufacturer to produce E-Purse systems using contactless card technology in Thai universities.

2009 Developed new printing products and innovations for use with security document printing and plastic cards to

add value for customers and the Company

2010 Became the first printing house in Thailand to obtain ISO/IEC 27001:2005 and CWA (Cen Workshop Agreements).

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Background and Development

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Company Products

The International Leader in Card and Security Document Printing

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Cheques Cheques

As cheques are important documents, meticulous

attention needs to be paid to every detail in order to prevent

fraud starting from a selection of laser grade printing papers

(CBS1) printed with magnetic ink character recognition, either

with watermarks or for use in combination with other fraud

prevention methods.

At present, TBSP has developed a complete system for the

production of cheques. To provide greater convenience for

banking institutions, the company has initiated the Fast Cheque

Service in which banks can readily place online orders via the

E-Ordering system, thereby saving time and money. In addition,

a special delivery service of cheques to differing branches of the

banks ensures security and the prompt delivery of cheques to

customers.

Company Products


Plastic Cards

TBSP has developed sophisticated printers and peripherals

as well as a high level of security environment, enabling the

company to manufacture all types of excellent quality plastic

cards. In addition to ATM and credit cards, the company’s wide

range of plastic cards includes EMV chip cards, complying with the

Visa and MasterCard standards, and different time of smart cards,

integrated photo ID cards, and barcode member cards or chips. Its

service also extends to providing supporting documents and

packing cards in envelopes to send to different channels.

Plastic Cards

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Security Documents

Security documents are important and valuable. It is,

therefore, extremely crucial to be fraud-free. TBSP commits itself

to providing solutions to customers in need of protecting their

products from illegal duplication or counterfeiting. The Company

focuses on enhancing the quality of its products, adopting

advanced printing techniques and a broad array of anti-

counterfeiting technologies including fluorescent ink,

three-dimension holograms, packaging security seals, invisible

images, postage stamps, and special coupons. The state-of-the-art

technology is combined with excellent quality service to better

address customers’ demands and expectations.

Therefore, the Company gains trust from the leading

financial institutes, both national and international, as well as the

public and private sectors to manufacture fraud-free documents.

Security Documents

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Company Products


Commercial Printing

Nowadays, products with high value being duplicated or

counterfeited cause a great deal of damage to manufacturers,

especially consumer goods necessary for everyday life. Bearing

this in mind, TBSP realizes the importance of fraud prevention

labels and uses an advance printing technique in combination

with a wide array of fraud prevention technology for absolute

confidence in products on the parts of the manufacturer and

consumers.

Commercial Printing

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Business forms

With innovative machine and printing equipment, TBSP is

able to provide a printing service for business forms such as

various continuous forms, commercial printing, brochures,

one-part mailer, payroll slips and other commercial documents.

Business Forms

Company Products

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Services

Data Printing, Enveloping and Mailing Service The Company has jointly developed data printing and

enveloping capabilities with Thai British DPost Co., Ltd (TBDP), a

joint venture between Thai British Security Printing Plc and

DataPost Pte Ltd. of Singapore who specialize in data printing and

mailing to provide a complete efficient service for individual data

printing and mailing such as a statements, advertising letters, etc.

Service starts from data pick up-delivery from clients, data check,

and security data printing. This data is treated confidentially.

Service also includes selecting data and mailing it to recipient

clients. The joint venture company also offers consultancy on the

techniques and programs suitable for each type of business by

foreign experts, allowing customers to enjoy the benefits of the

world’s cutting-edge technologies at reasonable prices.

Mailing


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Document and Solution Management Service (DSMS)

It is inevitable that a large business needs a great deal of

documents and forms resulting in a tremendous use of personnel

and equipment resources in providing service. Therefore, in order

to minimize work burdens that are not part of the Company’s

main mission, DSMS offers one-stop services such as

management, document, forms, and stationary, starting from

printing consultancy, printing design, manufacturing, purchasing,

provision, quality control, storing, database storing, product

delivery, destroying important documents and list making. The

Company applies a modern IT system in printing management so

that customers can benefit from easy and fast service at reduced

total cost. With the complete database system, customers will find

it easy to follow and make decisions.

1. Complete service to enhance efficiency in document

and printing management.

2. Reduce expense on renting a warehouse.

3. Reduce expense on provision, storage, product delivery

and manpower.

4. Flexibility and convenience owing to advance service.

Document Management

Services


RFID Solutions

Radio Frequency Identification is technology that

identifies individual data belonging to men, animals, things or

products, using radio frequency to read data from a distance, to

transmit and receive data at high speed without relying on

visibility or connecting to identification equipment. The

technology is now used in cash cards, staff identification cards,

travel cards, and product labels.

The Company has an expert team specialized in

developing the system for use with RFID as well as providing

hardware that is suitable to the purpose of the work such as smart

cards or E-Purse, access system, pay system and sales promotion

system. At present, a great number of large educational institutes

and companies have selected the system developed by TBSP.

RFID

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1. Economic Conditions

TBSP has a wide variety of products which serve different

markets with efficient service. With this good product mix of

successful products TBSP can maintain sales during a down-turn

in the market.

2. Sources of Raw Materials

TBSP has a policy of purchasing from many vendors both

local and abroad which is consistently applied in order to avoid

raw material shortage. Import substitution policy is followed in

some areas of business. Inventory Management is another crucial

factor.

3. New Technology communication may have some effect on Card and

Cheque Printing markets. The company has assessed these risks

and will develop its manufacturing capability to produce new

products for future markets.

The company maintains that its success factors are closely related to the internal control processes including corporate and other risks which are taken into account at management and operational level. Some of the risk factors are as follows.

Risk Factors


4. Financial Risk The Company is exposed to normal business risks from

changes in market interest rates and currency exchange rates

and from non-performance of contractual obligations by

counterparties. The Company does not hold or issue derivative

financial instruments for speculative or trading purposes.

4.1 Interest rate risk TBSP has no significant risk from fluctuations in interest

rates.

4.2 Foreign currency risk TBSP is exposed to foreign currency risk relating to

purchases and sales which are denominated in foreign currencies.

The Company primarily utilizes forward exchange contracts with

maturities of less than one year to hedge such financial liabilities

denominated in foreign currencies. The forward exchange

contracts entered into at the balance sheet date also relate to

anticipated purchases, denominated in foreign currencies, for the

subsequent period.

4.3 Credit risk Credit risk is the potential financial loss resulting from the

failure of a customer or a counterparty to settle its financial and

contractual obligations to the Company as and when they fall

due.

Management has a credit policy in place and the exposure

to credit risk is monitored on an ongoing basis. Credit evaluations

are performed on all customers requiring credit over a certain

amount. At the balance sheet date there were no significant

concentrations of credit risk. The maximum exposure to credit risk

is represented by the carrying amount of each financial asset in

the balance sheet. However, due to the large number of parties

comprising the Company’s customer base, Management does not

anticipate material losses from its debt collection.

4.4 Liquidity risk TBSP monitors its liquidity risk and maintains a level of

cash and working capital deemed adequate by management to

finance the Company’s operations and to mitigate the effects of

fluctuations in cash flows.

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1. The company has a policy of supporting education

by offering scholarships to local students.

The participating schools are:

(1) Wat Suansom School

(2) Wat Bang Hue Sue School

(3) Wat Bang Prong School

(4) Wat Bang Fai School

(5) Nilrat Anusorn School

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Environment and Social Activities

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3. TBSP staff and their families in unison made an off

season offering of robes and money to the abbot of the Suansom

Temple to build monk living quarters. Concurrently, they

presented money to build the playground for Wat Suansom

School.

2. On National Children’s Day, the company donated TBSP

products to 20 schools in support of Thai education.


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(Mr. Roongrote Rangsiyopash)

Chairman

(Mr. Suchai Korprasertsri)

Managing Director

Report of the Board of Directors’

Responsibilities for Financial Statement

The Board of Directors of Thai British Security Printing Public Company Limited is responsible for the financial statements of the

Company and its subsidiary which have been prepared in accordance with generally accepted accounting standards in Thailand,

notification of the Securities and Exchange Commission regarding the preparation and presentation of financial statement and in line

with the Stock Exchange of Thailand. The accounting policies pursued are deemed appropriate and applied consistently with adequate

disclosure of important information in the notes to the financial statements.

The Board has appointed an Audit Committee which consisted of independent members to provide effective overseeing on

finances and internal control system to ensure that accounting records are accurate, complete and timely, to prevent fraud and material

irregular operations. The opinions of the Audit Committee are reported in the Audit Committee’s report in the Company’s annual report.

The Board is confident that the internal control system of Thai British Security Printing Public Company Limited and its subsidiary

presents the financial position, operational results and cash flows accurately.


Audit Committee’s Report The Audit Committee of the Thai British Securities Printing Public Company Limited performed its duties as assigned by the

Board. They included reviewing the Company’s financial statements and disclosing the financial information in accordance with the

stipulated accounting standards to ensure they were transparent, accurate, adequate, and met international accounting standards. Their

duties also extended to reviewing the Company’s internal control system and internal audit system, reviewing corporate governance,

reviewing conflicts of interest between related parties, assessing risk management and appointing auditors for 2011.

The Audit Committee held a total of six meetings in 2010. Their performance of duties can be summarized as follows:

1. Review of quarterly and annual financial statements for 2010 of the Company and subsidiaries The Audit Committee reviewed essential issues as regards the quarterly and

annual financial statements of the Company and its subsidiaries and received explanations and evidence in relation to the issues

indicating that the financial statements were drawn up in compliance with the requirements as stated by law, accounting standards as

well as the rules promulgated by the Office of Securities and Exchange Commission (SEC) and the Stock Exchange of Thailand (SET). In

addition, remarks of the financial statements were provided adequately, as specified by the accounting standards, by the auditor,

management division and audit supervisor. The auditor reviewed, examined and made comments without conditions as regards the

statements which were approved.

The Audit Committee met with the auditors without the presence of the management to freely discuss the essential information

regarding the making of the financial statements and the disclosure of information complying with the standards beneficial to those

who spend the budget. Moreover, they discussed behavior lending itself to corruption according to the Securities and Exchange Act BE

2535 (1992). In 2010, the auditor neither made any major observations nor found any such behavior. In order to confirm the absence of

any acts of corruption, the Audit Committee, therefore, resolved that the managing director write a report on suspicious behavior

according to Article 89/25 of the Securities and Exchange Act (No.4) BE 2551 (2008) for submission to the Audit Committee in the last

meeting of the year 2010. There was no indication that the Board and the Executive Directors of the Company behaved in any suspicious

manner contrary to Article 89/25.

After reviewing the readiness in preparing financial statements according to the accounting standards referring to International

Financial Reporting Standards (IFRS),the Audit Committee found that the accounting method for each topic was clearly specified, the

request for a change of accounting principles was submitted to the Board to come into effect from 1 January 2011. In addition, as a trial,

the financial statements were drawn up according to such principles for comparison with those of 2011.

2. Review of corporate governance The Audit Committee conducted a review and monitoring to ensure compliance With the Company’s rules and regulations as

well as SEC and SET regulations, pertinent laws and good corporate governance principles. Apart from the proper disclosure of

information and connected transactions, complying with the rules promulgated by SEC and SET, the Committee ensured that the

Company carried out business with transparency and fairness to all concerned parties for the best interests of the Company.

Furthermore, the Audit Committee assessed its overall operating results and carried out self evaluation for the year 2010

according to SEC and SET guidelines. The result of the evaluation was at a highly satisfactory level similar to last year. The evaluation

covered the readiness of the Committee, risk management, financial report, the meetings, and performance of the audit supervisor and

secretary.

3. Review of risk management The Audit Committee approved the assessment of risk management and reviewed, on aquarterly basis, the Company’s report on

risk warning signals as well as reviewing the assessment criteria for risk management and practice guidelines for the Audit Committee in

assessing risk management. In so doing, risk management can reflect the actual view of the Company enabling them to prioritize risk

accurately and systematically for the accurate and timely prevention and solution of any problems.

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4. Monitoring of internal control and internal audit After the Audit Committee conducted a review to ensure that the Company had an effective internal control system in

accordance with the principles of good corporate governance, it was found that the internal control system is suitable for the business

operation. Control Self-Assessment (CSA) was also implemented to ensure the business functions rigorously followed the established

internal control system, allowing them to work faster, more efficiently and more accurately. In 2010, CSA was developed through a web

application on the topic of credit management (eCSA-Credit Management). The Audit Committee conducted a review to ensure the

execution of the annual internal audit plan which was reviewed bi-annually to reflect the changing business. The IT audits were also

incorporated to promote and develop aproactive work control process with the focus on the participatory involvement of employees

who control and follow up tasks under their responsibilities.

5. Review of conflicts of interest of related parties On a quarterly basis, the Committee reviewed the transactions between related Parties whose interests were deemed to be in

possible conflict with those of the Company or trade agreements made with the Board, the executive Directors or parties involved with

SET rules and pertinent laws. The Company strictly conducted itself under such rules and laws. Relevant items and those likely to incur

conflict of interest in particular were reviewed and required a relevant transaction report as well as accurately and promptly declaration

to the Stock Exchange of Thailand (SET).

6. Appointing the auditor for 2011 The Audit Committee considered the appointment of the Company’s external auditors for 2011 taking into account their

readiness, scope of auditing service, performance, competency, the competitiveness of the audit fee, and qualifications of the auditors in

relation to the regulations of SEC. Based on the review, the Audit Committee recommended the Company’s Board of Directors seek

approval at the ordinary general shareholders’ meeting for the appointment of Mr. Winid Silamongkol, Certified Public Accountant

Registration No. 3378, and/or Mr. Charoen Phosamritlert, Certified Public Accountant Registration No. 4068, and/or Ms. Sureerat

Thongarunsang, Certified Public Accountant Registration No. 4409,of KPMG Phoomchai Audit Limited as the Company’s auditors for

2011.

On behalf of the Audit Committee

(Nuanchan Boonpoijanasoontorn)

Chairperson of the Audit Committee

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Financial Statement


To the Shareholders of Thai British Security Printing Public Company Limited

Audit Report of Certified Public Accountant

32

The accompanying notes are an intergral part of these financial statements.

Thai British Security Printing Public Company Limited and its Subsidiary

As at 31 December 2010 and 2009

Balance sheets




As at 31 December 2010 and 2009

Balance sheets

34


For the years ended 31 December 2010 and 2009

Statements of income


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ecem

ber

2010 a

nd 2

009

Sta

tem

ents

of

changes

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quit

y




Statements of cash flows


38



Statements of cash flows





Notes to the financial statements

40




42




44




46




48




50




52




54




56




58




60




62




64




66




68

For Accounting Period ended December 31, 2010

Audit Fee For this fiscal year, the company and its subsidiary paid the audit fee to the company where the auditors are working, the details are as

follows:

Audit Fee of the Company (TBSP) Audit Fee (Baht)

1. Separate Financial Statements

Reviewed Annual Financial Statements 538,000

Reviewed Quarterly Financial Statements 340,000

Total Separate Financial Statements 878,000

2. Consolidated Financial Statements

Reviewed Annual Financial Statements 82,000*

Reviewed Quarterly Financial Statements 155,000*

Total Consolidate Financial Statements 237,000*

Total Separate Financial Statements and Consolidate Financial Statements 1,115,000

Remark: *The audit fee for reviewing balance sheets of the Company’s subsidiary named Thai British DPost Co., Ltd. (TBDP), which is a joint venture company between the

Company and DataPost Pte. Ltd., Singapore registered on August 1, 2007, for the Company’s consolidated financial statements as required by SEC as stipulated in

the announcement Gor.Jor. No. 40/2540 (1997).

Audit Fee of the Company’s Subsidiary (TBDP) Audit Fee for the year 2010 was 225,000 Baht.

Non-Audit Fee The audit fee paid by the Company and its subsidiary to the audit firm in this fiscal year was solely for the audit services, exclusive of any

non-audit services.

Auditor’s Remuneration


Company’s Name Thai British Security Printing Public Company Limited

Stock Code TBSP Registration No. 0107537002311 (Former No. Bor.Mor.Jor.478) Head Office Poochao Factory 41/1 Moo 10, Soi Wat Suansom, Poochaosaming Prai Road, Samrongtai, Phrapradaeng, Samutprakan 10130 Tel: 0-2754-2650 Fax: 0-2183-2763 1st Branch Sales Office 12th Floor CTI Tower, 191 Ratchadapisek Road, Klongtoey, Klongtoey, Bangkok 10110 Tel : 0-2261-5215-20, 0-2261-5089-90 Fax : 0-2261-9580 2nd Branch Bangpoo Factory Bangpoo Industrial Estate, 837 Moo 4, Soi 12, Pattana 1 Road, Praksa, Muang, Samutprakan 10280 Tel: 0-2709-4201-9 Fax: 0-2709-4200 Type of Business Security Printing Registered Capital 110 Million Baht Paid-up Capital 110 Million Baht Par Value Common share 11,000,000 shares, 10 Baht/Share Preferred share - nil - Registrar Thailand Securities Depository Co., Ltd. 62 The Stock Exchange of Thailand Building, 4th Floor Ratchadapisek Road, Klongtoey, Bangkok 10110, Thailand Tel: 0-2229-2800 Fax: 0-2359-1259 Auditor of the company Mr. Winid Silamongkol C.P.A.(Thailand) No.3378 and its subsidiary Mr. Charoen Phosamritlert C.P.A.(Thailand) No.4068 Ms. Siripen Sukcharoenyingyong C.P.A.(Thailand) No.3636 KPMG Phoomchai Audit Ltd. 48th Floor, Empire Tower 195 South Sathorn Road Yannawa, Sathorn, Bangkok 10120 Tel: 0-2677-2000 Fax: 0-2677-2222 Legal Advisor SCG Legal Counsel Limited 1 Siam Cement Road, Bangsue, Bangkok 10800 Tel: 0-2586-5777 0-2586-5888 Fax: 0-2586-2976

Company Information

70

49.79

19.89

4.93

4.93

4.85

4.85

2.27

1.05

0.87

0.70

% Shares

As at February 10, 2011

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Rank Major Shareholders No. Of Share

5,476,724

2,187,981

542,000

542,000

534,000

534,000

249,791

115,332

95,700

77,100

Remarks *Major shareholders and subsidiary of The Siam Cement Public Company Limited

SCG Paper Public Company Limited*

T.K.S. Technology Public Company Limited

Mrs. Nantiya Santikan

Mr. Krissana Suwanpraipattana

Ms. Patcharin Tuangsithisombut

Mr. Ek Tantavichien

Ms. Patchana Tuangsithisombut

Mr. Prasert Wongwaiwit

Mr. Prachuab Kunsongkiat

Mr. Ronnachai Kongboonma

Major Shareholders


The Management structure of Thai British Security Printing Public Company Limited comprises one Board of Directors and four sub-

committees including, Audit Committee, Nomination Committee, Remuneration Committee and Executive Committee.

1. Board of Directors The Board of Directors has 11 members, only one of whom is from management i.e. Managing Director and 5 directors has the

qualifications of the independent director according to those of the Securities and Exchange Commission, Thailand.

Director’s Term At each Annual General Meeting of the Company, one-third of the directors, or, if their number is not a multiple of three, then the

number nearest to one-third must retire from office. A retiring director is eligible for re-election.

Duly Authorized Directors Two of the three directors, namely, Mr. Roongrote Rungsiyopash or Mr. Somchart Baramichai or Mr. Suchai Korprasertsri jointly signed

their names with the company’s seal.

Scope of authority of the Company’s Board of Directors 1. The Board is responsible for establishing corporate vision and the mission statement as well as the policy and strategy to

align and sustain the interests of all stakeholders.

2. The Board is responsible for reviewing the operating plan and ensuring maximum competitiveness in global level.

3. The Board shall oversee and review the performance of the company as well as evaluating the performance of top

executive e.g. managing director.

4. The Board maintains proactive risk management systems as well as overseeing and reviewing corporate governance to

ensure compliance with internationally accepted practice.

5. The Board must devote their time and efforts to the company without seeking personal benefits, and shall not act inconflict

with the interests of or in competition with the company.

6. The Board manages and directs the company’s operations in compliance with all laws, the objectives, the Articles of

Association and the resolution of shareholders’ meetings in good faith and with care to preserve the interests of the

company.

7. The Board conducts the company’s business in line with corporate governance as well as the SET Code of Best Practice for

Directors of Listed Companies and Guidelines of Securities and Exchange Commission in pursuit of business excellence.

8. The Board is responsible for overseeing and monitoring the performance of the company. The Board ensures that the

company’s operation reporting conform to an agreed standard while establishing a corporate policy for the development of

the company operations and personnel development.

9. The Board promotes awareness of the importance of business ethics among employees at all levels. It also promotes

internal controls and internal audits to ensure corporate integrity is maintained and to prevent any fraudulent practices.

10. The Board treats all shareholders equally with regard to information and protects those rights equitably.

2. The Audit Committee The Audit Committee consisted of 4 persons as follows:

(1) Mrs.Nuanchan Boonpoijanasoontorn Chairman of the Audit Committee

(2) Mr. Krit Umpote Audit Committee

(3) Mr. Kuasak La-orsuwan Audit Committee

(4) Mr. Poonpipat Aungurigul Audit Committee

Scope of Authority of the Audit Committee The Audit Committee is authorizes to fulfill the following duties:

1. Review and ensure that the company has appropriate financial reporting system and the company regularly disclosed its

financial statements in accordance with the legally defined accounting principle with transparency and adequacy.

2. Support the establishment of financial report development in compliance with the international accounting standards.

3. Review and ensure that the company has appropriate and effective internal control and internal audit systems that comply

with international accepted approaches and standards.

4. Review and ensure that the company has in place proactive operation systems to enhance operating effectiveness and

efficiency.

5. Review corporate risk management system.

Management Structure As at January 25, 2011

72

6. Review and ensure that the company is in full compliance with the laws on Securities and the Stock Exchange, and other

laws relating to the company’s business.

7. Review the report on dishonesty and establish preventive measures.

8. Review the righteousness and effectiveness of the information technology system relating to the internal control system,

financial reports and risk management and suggest an up-to-date improvement occasionally.

9. Consider the connected transaction or factor that might constitute any conflicts of interest to be in compliance with law

and regulations specified by the SET.

10. Review and ensure that the assessment of the entire Audit Committee’s performance and the self-assessment of each

individual member’s performance take place annually.

11. Review and comment on the operation of the Audit Office and also cooperate with the company’s auditor.

12. Prepare reports on the supervision of activities of the Audit Committee with disclosure on the company’s annual report

which is duly signed by the chairman of Audit Committee and also include the committee’s opinions on the matters

required by SET.

13. Consider, select, propose the appointment and remuneration of the company’s auditor, and assess the auditor’s

independence and performance.

14. Arrange the meeting with the external auditor without the presence of the company’s management.

15. Review and ensure that the evaluation of the Audit Office is in compliance with international standards.

16. Consider and approve the budgets and manpower of the Internal Audit Office to select the internal auditor as in the case of

outsourcing.

17. Consider the appointment, removal, transfer or dismissal of the employment of the Audit Office Head or change the

internal auditor as in the case of outsourcing.

18. Consider the independence of the Audit Office based on its performance, reports and inline of command.

19. Take other actions in compliance with the law or assignments by the Board of Directors.

In actions thereof, the Audit Committee is authorized to call for and order management, heads of offices, or employees

concerned to present opinions, attend meetings or submit the necessary documents. In addition, the Committee may seek external

consultations and professional advice from independent consultants or specialists, as deemed appropriate, at the company’s expenses.

The Audit Committee performs duties within the authority and responsibility under the order of the Board of Directors. The

Board is responsible for the company’s operations and is directly accountable to shareholders, stakeholders and the public.

3. The Nomination Committee The Nomination Committee consisted of 3 persons as follows:

(1) Mr. Krit Umpote Chairman of the Nomination Committee

(2) Mr. Richard David Han Member of the Nomination Committee

(3) Mr. Somchart Baramichai Member of the Nomination Committee

Scope of Authority of the Nomination Committee The Nomination Committee is authorized to fulfill the following duties:

1. Review independency of the Board of Directors and the issues of conflicts of interest.

2. Should there be a few alterations made to the directors qualifications, the Committee shall review the appropriateness for

directorship.

3. Regularly make a progress report on the results of performance and submit it to the Board of Directors after the meetings of

the Nomination Committee.

4. Specify qualifications of a person to be nominated for directorship and lay down the director nomination process to replace

the retiring director, considering and eligible candidate with skills, experiences and expertise.

5. Identify qualified candidates to replace directors retiring at the end of their terms, or for other reason, and submit a list of

nominees to the Board of Directors’ and/or shareholders’ meeting for resolution.

6. Recommend the succession plan of the Company’s Managing Director and Executives to the Board.

7. Should there be any alteration to the Charter of the Nomination Committee. The Committee shall review and recommend

appropriate improvements, revisions to the Board of Directors for its resolution in keeping it up-to-date and applicable.

Management Structure


8. Perform other duties as assigned by the Board of Directors.

To fulfill its duties under the scope of authority, the Nomination Committee is authorized to call for and order the management,

head of offices or employees concerned to give opinions, attend the meetings or submit the necessary documents. In addition, the

Committee may seek external consultants and professional advice from independent consultants or specialists, as deemed appropriate,

at the company’s expenses.

4. The Remuneration Committee The Remuneration Committee consisted of 3 persons as follows:

(1) Mr. Somboon Chuchawal Chairman of the Remuneration Committee

(2) Mr. Prasert Wongwaiwit Member of the Remuneration Committee

(3) Mr. Poonpipat Aungurigul Member of the Remuneration Committee

Scope of Authority of the Remuneration Committee The Remuneration Committee is authorized to fulfill the following duties:

1. Propose guidelines and methods of payment of remuneration, including bonus and attendance fee, to the Board of

Directors and the Sub-committees appointed by the Board.

2. Propose policy on management incentives, including salary and bonus, in line with the company’s operating results, and

the performance of each executive, and whenever it deems appropriate, the Committee shall consider the hiring of

consulting firms to advise on project implementation.

3. Prior to the submission of the managing director’s remuneration for the Board of Directors’ approval, the Remuneration

Committee shall assess the managing director’s performance on an annual basis.

4. Consider, before presenting to the Board of Directors, the budget for the salary increase, change of wage/remuneration and

bonus of the senior executives.

5. Regularly review, study and track the changes and trends in remuneration for the Board of Directors and the executives and

report its findings to the Board for approval.

6. Consider the annual remuneration for the Board of Directors, as compared to the remuneration offered by other listed

companies operating in the same business, to ensure that the company retains its leadership in that industry and to

motivate them to foster the continuing development of the Company.

7. Regularly make a progress report on the results of performance and submit it to the Board of Directors after the meetings of

the Remuneration Committee.

8. Assess the Remuneration Committee’s performance and report the results to the Board of Directors.

9. Should there be any alternation to the Charter of the Remuneration Committee. The Committee shall review and

recommend appropriate improvements, revisions to the Board of Directors for its resolution in keeping it up-to-date and

applicable.

10. Perform other duties as assigned by the Board of Directors.

To fulfill its duties under the scope of authority, the Remuneration Committee is authorized to call for and order the

management, head of offices or employees concerned to give opinions, attend the meetings or submit the necessary documents. In

addition, the Committee may seek external consultants and professional advice from independent consultants or specialists, as deemed

appropriate, at the company’s expenses.

5. The Executive Committee The Executive Committee consisted of 3 persons as follows:

(1) Mr. Somboon Chuchawal Chairman

(2) Mr. Somchart Baramichai Executive Committee

(3) Mr. Suchai Korprasertsri Executive Committee Scope of Authority of the Executive Committee Manage and supervise all the Company’s business in accordance with the Company’s policy, the scope stipulated by Law,

Objects, the Company’s Articles of Association and resolutions of the Board.

As at January 25, 2011

74

Mr. Roongrote Rangsiyopash Chairman of the Board of Directors

Mrs. Nuanchan Boonpoijanasoontorn Director and Chairman of the Audit Committee

(Independent Director)

Mr. Krit Umpote Director, Member of the Audit Committee and Chairman of the Nomination Committee (Independent Director)

Mr. Kuasak La-Orsuwan Director and Member of the Audit Committee


Board of Directors


Mr. Roongrote Rangsiyopash Age 48 Years Nationality Thai Education • 1985 B.E. (Mining), Chulalongkorn University • 1987 M.E.(Industrial Engineering), University of Texas (Arlington), U.S.A. • 1993 Master of Business Administration, Harvard Business School, U.S.A Seminar • Thai Institute of Directors Association - 2004 Director Accreditation Program (DAP) 2004 Current Position in TBSP Chairman of the Board of Directors Tenure in Directorship - Other Current Positions (Director/Executive) • Listed Companies - Since 2008 Director, Thai-German Ceramic Industry Public Company Limited - Since 2010 Director, Quality Construction Products Public Company Limited - Since 2011 Chairman of the Board of Directors and Executive Committee, Thai Cane Paper Public Company Limited • Other Business (Non-Listed Companies) - Since 2011 President, SCG Paper Public Company Limited •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 1996-1997 Vice President - Production, Tile Cera Inc., U.S.A. • 1997-2000 President, Tile Cera Inc., U.S.A. • 2000-2005 Corporate Planning Director The Siam Cement Public Company Limited • 2005-2010 Director, PTT Chemical Public Company Limited • 2005-2011 Director, Cementhai Ceramics Co., Ltd Forbidden qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year. Remark: Being elected as Director and appointed as Chairman of the Board in replacement for Mr. Chaovalit Ekabut since January 7, 2011.

Mr. Kuasak La-Orsuwan (Independent Director) Age 62 Years Nationality Thai Education • 1974 B.A. Economics, University of Commerce • 1978 MBA (Management), University of West LA, U.S.A. Seminar - Current Position in TBSP Director and Member of the Audit Committee Tenure in Directorship 10 Years 2 Months Other Current Positions (Director/Executive) • Listed Companies - None • Other Business (Non-Listed Companies) - None •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 2002-2004 Senior Vice President General Administration Department, Thai Military Bank Public Company Limited • 2004-2006 Executive (N-2) Chief of General Administration, Thai Military Bank Public Company Limited • 2006-2009 Senior Vice President, Thai Military Bank Public Company Limited Meeting Attendance • Board of Directors Meetings: 4/4 times • Audit Committee Meetings: 6/6 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

Mr. Krit Umpote (Independent Director) Age 71 Years Nationality Thai Education • 1965 B.A.(Commerce), Thammasat University • 1966 B.A. (Accounting), Thammasat University • 1969 Master of Public Administration, NIDA • 1975 M.S.B.A., Indiana University, U.S.A. • 1994 Strategic Human Resource Management, Harvard Business School • 1996 Advance Management Program, Harvard Business School Seminar • Thai Institute of Directors Association - 2000 Director Certification Program (DCP) 0/2000 - 2010 Advanced Audit Committee Program (AACP) 3/2010 Current Position in TBSP Director, Member of the Audit Committee and Chairman of the Nomination Committee Tenure in Directorship 15 Years 4 Months Other Current Positions (Director/Executive) • Listed Companies - Since 2007 Director, Member of the Audit Committee and Member of the Nomination and Remuneration Committee, MFC Asset Management Public Company Limited • Other Business (Non-Listed Companies) - Since 2000 Vice President for Training and Development, Dhurakij Pundit University •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 1996-2000 Senior Executive Vice President Krung Thai Bank Public Company Limited • 1999-2001 Chairman, Krung Thai Asset Management Company Limited Meeting Attendance • Board of Directors Meetings: 4/4 times • Audit Committee Meetings: 6/6 times • Nomination Committee Meetings: 2/2 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

Mrs. Nuanchan Boonpoijanasoontorn (Independent Director) Age 66 Years Nationality Thai Education • 1968 B.A. (Accounting), Chulalongkorn University • 1970 Diploma, Faculty of Commerce and Accountancy, Chulalongkorn University • 1971 Certified Public Accountant Seminar • Thai Institute of Directors Association - 2001 The Role of the Chairman Program (RCP) 5/2001 Current Position in TBSP Director and Chairman of the Audit Committee Tenure in Directorship 20 Years 10 Months Other Current Positions (Director/Executive) • Listed Companies - None • Other Business (Non-Listed Companies) - Since 1991 Associate Judge, The Nontaburi Provincial Court-Juvenile and Family Section •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 1990-1999 Senior Vice President, DBS Thai Danu Bank Public Company Limited • 1991-2004 Director and Honorary Treasurer, Head of Administration, Foundation for the Blind in Thailand Meeting Attendance • Board of Directors Meetings: 4/4 times • Audit Committee Meetings: 6/6 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

The Company’s Board of Directors as at January 25, 2011 comprised 11 directors as follows:

76

Mr. Richard David Han Director and Member of the Nomination Committee

Mr. Poonpipat Aungurigul Director, Member of the Audit Committee and the Remuneration Committee


Mr. Prasert Wongwaiwit Director and Member of the Remuneration

Mr. Somchart Baramichai Director, Member of the Nomination Committee and Executive Committee

Board of Directors


Mr. Prasert Wongwaiwit Age 51 Years Nationality Thai Education • 1983 Bachelor of Architecture, Chulalongkorn University • 1984 Master of Public Administration (Public Personnel), University of Southern California, U.S.A. Seminar • Thai Institute of Directors Association - 2005 Director Accreditation Program (DAP) 40/2005 Current Position in TBSP Director and Member of the Remuneration Committee Tenure in Directorship 8 Years 2 Months Other Current Positions (Director/Executive) • Listed Companies - None • Other Business (Non-Listed Companies) - Since 1994 Managing Director, Baan Yaowapha Company Limited •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 1994-2001 Marketing Director, Lang Suan Property Company Limited Meeting Attendance • Board of Directors Meetings: 4/4 times • Remuneration Committee Meetings: 1/1 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

Mr. Richard David Han Age 54 Years Nationality Dutch Education • 1980 BA (Business Administration), Westminster University, London, United Kingdom • 1981 MBA (Marketing), City University, London, United Kingdom Seminar • Thai Institute of Directors Association - 2006 Director Accreditation Program (DAP) 57/2006 - 2006 Understanding the Fundamental of Financial Statements (UFS) 4/2006 Current Position in TBSP Director and Member of the Nomination Committee Tenure in Directorship 12 Years 5 Months Other Current Positions (Director/Executive) • Listed Companies - Since 1989 Executive Vice Chairman & CEO, Hana Microelectronics Public Company Limited • Other Business (Non-Listed Companies) - None •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 1982-1989 Founder & Managing Director, Hana (U.K.) Meeting Attendance • Board of Directors Meetings: 3/4 times • Nomination Committee Meeting: 2/2 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

Mr. Poonpipat Aungurigul (Independent Director) Age 64 Years Nationality Thai Education • 1965 Diploma, Thonburi Commercial College • 1967 Diploma, Rajamagala Institute of Technical Bangkok Technical Campus • 1994 Management Program, Harvard University, U.S.A. Seminar • Thai Institute of Directors Association - 2005 Director Accreditation Program (DAP) 37/2005 Current Position in TBSP Director, Member of the Audit Committee and the Remuneration Committee Tenure in Directorship 11 Years 2 Months Other Current Positions (Director/Executive) • Listed Companies - Since 2000 Director, Phathra Leasing Public Company Limited • Other Business (Non-Listed Companies) - None •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 1993-2000 Executive Vice President, Kasikornbank Public Company Limited • 2000-2010 Executive Vice President, Kasikornbank Public Company Limited Meeting Attendance •Board of Directors Meetings: 4/4 times •Audit Committee Meetings: 6/6 times •Remuneration Committee Meetings: 1/1 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

Mr. Somchart Baramichai Age 60 Years Nationality Thai Education • 1974 B.E. (Sanitary), Chulalongkorn University • 1976 M.E.(Sanitary), Delft university of Technology, Netherlands • 1986 M.B.A, Thammasat University • 2007 Advanced Management Program (AMP) at Wharton, University of Pennsylvania, U.S.A. Seminar • Thai Institute of Directors Association - 2004 Director Accreditation Program (DAP) 2004 - 2009 Director Certification Program (DCP) 2009 Current Position in TBSP Director, Member of the Nomination Committee and Executive Committee Tenure in Directorship 5 Years Other Current Positions (Director/Executive) • Listed Companies - None • Other Business (Non-Listed Companies) - Since 2007 Chairman, Thai British DPost Company Limited •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 2004-2005 Managing Director, Phoenix Pulp and Paper Public Company Limited • 2005-2009 Managing Director, Thai Containers Group Company Limited Meeting Attendance • Board of Directors Meetings: 4/4 times • Nomination Committee Meeting: 2/2 times • Executive Committee Meetings: 13/13 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

The Company’s Board of Director as at January 25, 2011 comprised 11 persons as follows:

78

Mr. Suchai Korprasertsri Director, Member of the Executive Committee and Managing Director

Miss Suvannee Lee Director (Independent Director)

Mr. Somboon Chuchawal Director, Chairman of the Remuneration Committee and Executive Committee

Board of Directors


Mr. Somboon Chuchawal Age 66 Years Nationality Thai Education • 1968 B.E. (Civil Engineering), Second Class Honours, Chulalongkorn University • 1970 M.S. (Logistics Engineering), Asian Institute of Technology •1991 Advanced Management Program (AMP), Harvard University, U.S.A. Seminar • Thai Institute of Directors Association - 2003 Director Accreditation Program (DAP) 6/2003 - 2008 Director Certification Program (DCP) 109/2008 Current Position in TBSP Director, Chairman of the Remuneration Committee and Executive Committee Tenure in Directorship 8 Years 2 Months Other Current Positions (Director/Executive) • Listed Companies - Since 2005 Director, Member of the Remuneration Committee and Executive Committee, Thai Cane Paper Public Company Limited • Other Business (Non-Listed Companies) - None •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 2001-2005 President, The Siam Pulp and Paper Public Company Limited* • 2002-2005 Director, Phoenix Pulp and Paper Public Company Limited • 2003-2005 Chairman, Thai British Security Printing Public Company Limited • 2005 Chairman, Phoenix Pulp and Paper Public Company Limited Meeting Attendance • Board of Directors Meetings: 4/4 times • Remuneration Committee Meetings: 1/1 times • Executive Committee Meetings: 13/13 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year. *Remark: Recently changed the company’s name to SCG Paper Public Company Limited

Mr. Suchai Korprasertsri Age 44 Years Nationality Thai Education • 1989 Bachelor of Engineering, Chulalongkorn University • 1994 Master of Business Administration, Thammasat University •2004 Certificate of Executive Development Program, Columbia Business School, U.S.A. Seminar • Thai Institute of Directors Association - 2010 Director Accreditation Program (DAP) 87/2011 - 2011 Director Certification Program (DCP) 141/2011** Current Position in TBSP Director, Member of the Executive Committee and Managing Director Tenure in Directorship 3 Months Other Current Positions (Director/Executive) • Listed Companies - None • Other Business (Non-Listed Companies) - Since 2010 Managing Director, Thai British DPost Company Limited •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 2005-2008 Vice President Marketing, United Pulp and Paper Co., Inc., Philippines, • 2008-2010 General Manager, Thai Container (TCC) Co., Ltd. (Plant Patumthani) Meeting Attendance • Executive Committee Meetings: 13/2 times* Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year. Remark: * Being elected as Director and appointed Managing Director effective on November 1, 2010. ** To attend the seminar between January 15, – March 15, 2011

Miss Suvannee Lee (Independent Director) Age 47 Years Nationality Thai Education • 2002 B.A. (Business Administration), Suan Sunandha Rajabhat University • 2006 Master of Public Administration, Chulalongkorn University Seminar • Thai Listed Companies Association - 2009 Executive Development Program (EDP) 4 Current Position in TBSP Director Tenure in Directorship 6 Years 9 Months Other Current Positions (Director/Executive) • Listed Companies - Since 2007 Executive Vice President (Marketing and Marketing Communication) Synnex (Thailand) Public Company Limited • Other Business (Non-Listed Companies) - None •Holding directorship in other companies which compete directly/have any related business, which is material to the Company - None Previous Experiences • 2000-2002 Sales and Marketing Director, T.K.S. Technologies Public Company Limited • 2002-2004 Sales and Marketing Director, Synnex (Thailand) Company Limited • 2005-2006 Marketing and Communication Director, Synnex (Thailand) Company Limited Meeting Attendance • Board of Directors Meetings: 4/3 times Forbidden Qualification 1. No dishonestly committing an offence against property. 2. Not entering into any transaction which may cause conflict of interest against the Company during the year.

The Company’s Board of Director as at January 25, 2011 comprised 11 persons as follows:

80

Remarks: 1. Thai British Security Printing Public Company Limited has a registered capital of 110,000,000 Baht with 11,000,000 ordinary shares.

2. According to the Public Limited Companies Act, an “affiliated company” means a public limited company with a relationship to a private company

or with any public limited company, or with any companies in the following manners:

- Any company that the authority to control the appointment and removal of directors with full management authority.

- Holds more than 50% of issued shares.

3. *The Siam Cement Public Company Limited

4. The Shareholdings may be changed if the directors and spouse or minor children trade the securities after the above indicated date.

5. Mr. Somchart Baramichai holds 500 shares of SCC through Tisco Asset Management Co., Ltd.

Own holding

Own holding

Own holding

Increase (decrease)

during Jan-Dec 2010

Increase (decrease)

during Jan-Dec 2010

Increase (decrease)

during Jan-Dec 2010

Common Share (Number of shares held)

Common Share (Number of shares held)

Debenture (Number of shares held)

TBSP

1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

11.

Mr. Chaovalit Ekabut

Mr. Krit Umpote

Mr. Kuasak La-orsuwan

Mrs. Nuanchan Boonpoijanasoontorn

Mr. Prasert Wongwaiwit

Mr. Poonpipat Aungurigul

Mr. Richard David Han

Mr. Somchart Baramichai

Mr. Somboon Chuchawal

Miss Suvannee Lee

Mr. Suchai Korprasertsri

-

-

-

-

115,332

-

-

-

-

-

-

-

-

3,100

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

(18,000*)

-

-

-

-

-

-

500*

-

-

-

-

-

-

-

-

-

-

500*5

-

-

-

-

-

-

-

-

14,000*

-

4,000*

-

-

-

-

-

-

-

-

-

-

-

-

-

-

AFFILIATED COMPANY

Spouse’s or minor children’s holding

No. Name

ซีเคียวริตี้ พริ้นติ้ง จำกัด (มหาชน)

Changes in Directors’ Shareholding Report

As at December 31, 2010


Mee

ting

Att

enda

nce

Chai

rman

Nam

e

Mr.

Chao

valit

Eka

but

Mr.

Chao

valit

Eka

but

Boar

d of

Dire

ctor

s (1

1 d

irect

ors)

Mrs

. Nua

ncha

n Bo

onpo

ijana

soon

torn

Audi

t Com

mitt

ee

(4 m

embe

rs)

Mr.

Krit

Um

pote

Nom

inat

ion

Com

mitt

ee

(3 m

embe

rs)

Mr.S

ombo

on C

huch

awal

M

r.Som

boon

Chu

chaw

al

Exec

utiv

e Co

mm

ittee

(3

mem

bers

)

Shar

ehol

ders

’ M

eetin

g (1

1 m

embe

rs)

- 6/6

6/6

6/6 - 6/6 - - - - - -

- 2/2 - - - - 2/2

2/2 - - - -

4/4

4/4

4/4

4/4

4/4

4/4

3/4

4/4

4/4

3/4

4/4 -

- - - - - - -

13/1

3

13/1

3

-

11/1

1

2/2

1/1

1/1

1/1

1/1

1/1

1/1

1/1

1/1

1/1

1/1

1/1 -

- - - - 1/1

1/1 - - 1/1 - - -

1.

Mr.

Chao

valit

Ek

abut

2.

Mr.

Krit

Um

pote

3.

Mr.

Kuas

ak

La-O

rsuw

an

4.

Mrs

. Nua

ncha

n Bo

onpo

ijana

soon

torn

5.

Mr.

Pras

ert

Won

gwai

wit

6.

Mr.

Poon

pipa

t Au

ngur

igul

7.

Mr.

Rich

ard

Dav

id

Han

8.

Mr.

Som

char

t Ba

ram

icha

i

9.

Mr.

Som

boon

Ch

ucha

wal

10.

Ms.

Suva

nnee

Le

e

11.

Mr.

Bunn

Ka

sem

sup

12.

Mr.

Such

ai

Korp

rase

rtsr

i*

Rem

uner

atio

n Co

mm

ittee

(3

mem

bers

)

Rem

arks

: N

o. 2

,3,4

,6 a

nd 1

0, 5

per

sons

, wer

e in

depe

nden

t dire

ctor

s

*

Bein

g ap

poin

ted

as D

irect

or, E

xecu

tive

Com

mitt

ee a

nd M

anag

ing

Dire

ctor

in re

plac

emen

t for

Mr.

Bunn

Kas

emsu

p si

nce

Nov

embe

r 1, 2

010

List

of D

irec

tors

and

num

ber o

f the

ir m

eeti

ng a

tten

danc

e in

201

0

82

Mr. Suchai Korprasertsri Managing Director

Mr. Panu Ratanasingha Plant Director - Bangpoo Factory

Mr. Pracha Ekawaravong Technical R&D / IT Director

Mrs. Wunwisa Tantivejakul Financial Controller

Mr. Apichart Prasittimaporn Human Resources Director

Mr. Pornchai Nimitmongkol Plant Director - Poochao Factory

Management


Mr. Suchai Korprasertsri Age 44 Years Position Managing Director Education • 1989 B.E. (Industrial Engineering), Chulalongkorn University • 1995 M.B.A., Thammasat University • 2004 Magement Development Program, Wharton School, Pennsylvania University, U.S.A. • 2007 Executive Development Program, Columbia Business School Previous Experiences • 2005-2008 Vice President - Marketing, United Pulp and Paper Co.,Inc. Philippine • 2008-2010 Executive General Manager, Thai Container (TCC) Co., Ltd. (Plant Patumthani)

Mr. Pracha Ekawaravong Age 50 Years Position Technical R&D/IT Director Education • 1982 B.E. (Electrical Engineering) Honor, Chulalongkorn University • 1992 Bachelor Degree of Economics, Sukhothai Thammathirat Open University • 1995 Bachelor Degree of Communication Arts, Sukhothai Thammathirat Open University Previous Experiences •2002-2005 IT & Quality System Manager, Thai CRT Company Limited

Mr. Pornchai Nimitmongkol Age 55 Years Position Plant Director - Poochao Factory Education • 1979 Bachelor Degree of Printing, Chulalongkorn University • 2000 Master of Public Administration, Chulalongkorn University • 1989 Mini MBA, Chulalongkorn University Previous Experiences • 1981-1985 Production Supervisor, Chulalongkorn University Printing Factory

Mr. Panu Ratanasingha Age 40 Years Position Plant Director - Bangpoo Factory Education • 1992 B.E. Electrical Engineering, Prince of Songkla University • 2007 Management Development Program(MDP) Wharton School University of Pennsylvania Previous Experiences • 2002-2003 Plant Deputy Manager, Thai CRT Company Limited • 2003-2005 Process Engineering Manager, Thai CRT Company Limited • 2005-2006 Manufacturing Manager, Thai CRT Company Limited • 2006 Production Division Manager, Thai British Security Printing Public Company Limited

Mrs. Wunwisa Tantivejakul Age 46 Years Position Financial Controller Education • 1986 B.A. Accounting, Chulalongkorn University Previous Experiences •2003-2007 Business Analysis and Reporting Manager, Paper Business, The Siam Pulp and Paper Public Company Limited*

*Remark: Recently changed the company’s name to SCG Paper Public Co., Ltd.

Mr. Apichart Prasittimaporn Age 43 Years Position Human Resources Director Education • 1990 B.A., Political Science, Chulalongkorn University • 1999 Master of Public Administration, Chulalongkorn University Previous Experiences • 1997-2004 Labour Relations Section Manager, Thai Kraft Industry Company Limited • 2005-2006 Personnel Administration Section Manager, Thai Kraft Industry Company Limited.

As at January 25, 2011, the Company’s Management comprised 6 persons as follows:

84

As at December 31, 2010

Remarks: 1. Thai British Security Printing Public Company Limited has a registered capital of 110,000,000 Baht with 11,000,000 ordinary shares.

2. In reference with the Notification of the Capital Market Supervisory Board No. Tor Jor 23/2551 “Management” shall mean directors, managers or the first

4 persons in the management level next below the manager, all persons who hold positions equivalent to the fourth person in the management level, including

persons in the management level and be in charge of accounting and finance who hold positions next above the department managers or equivalent.

3. The shareholding may be changed if the directors and spouse of minor children trade the securities after the above indicated.

Own holding

Common Share (number of shares held)

1.

2.

3.

4.

5.

6.

Mr. Suchai Korprasertsri

Mr. Pracha Ekawaravong

Mr. Pornchai Nimitmongkol

Mr. Panu Ratanasingha

Mrs. Wunwisa Tantivejakul

Mr. Apichart Prasittimaporn

Increase (decrease) during Jan-Dec 2010

Spouse’s or minor children’s holding

Name

-nil-

-nil-

-nil-

-nil-

-nil-

-nil-

-nil-

-nil-

600

-nil-

-nil-

-nil-

-nil-

-nil-

2,500

-nil-

-nil-

-nil-

No.

Changes in Management’s Shareholding Report


Remuneration of the Board of Directors The Annual General Meeting of Shareholders for the year 2004 held on March 19, 2004 approved the directors’ remuneration as follows: Chairman of the Board of Directors receives the attendance fee of 30,000 Baht per meeting. Directors receive the attendance fee of 15,000 Baht per meeting. Should there be profit in any fiscal year, the annual remuneration payable to directors shall be 2% of net profit of such fiscal year which shall be distributed amongst the directors in such manner as they may themselves determine. This remuneration shall be effective from the date of approval until the Shareholders Meeting resolves otherwise.

Remunication of the Subcommittee The Annual General Meeting of Shareholders for the year 2007 held on March 26, 2007 approved the subcommittees’ remuneration of the subcommittees such as Audit Committee, Nomination Committee, Remuneration Committee and Executive Committee on the basic of attendance fee. This remuneration shall be effective from the date of approval until the Shareholders Meeting

resolves otherwise. The details are as follows:

For Accounting Period ended December 31, 2010, the remuneration of 11 directors are as follows: Annual Fee Baht 902,880 Attendance Fee Baht 690,000 and the Remuneration for Subcommittees Baht 1,350,000 Total Baht 2,942,880.

Attendance Fee (Baht/person/time)

Annual Fixed Fee (Baht/person/year) Position Sub-Committee

Chairman

Director

Chairman

Director

Chairman

Director

Chairman

Director

- - - - - - - -

30,000

15,000

20,000

10,000

20,000

10,000

30,000

15,000

The Audit Committee

The Nomination Committee

The Remuneration Committee

The Executive Committee

86

120,

000

60,0

00

60,0

00

60,0

00

60,0

00

60,0

00

45,0

00

60,0

00

60,0

00

45,0

00

60,0

00 -

690,

000

-

90,0

00

90,0

00

180,

000 -

90,0

00 - - - - - -

450,

000

-

40,0

00 - - - -

20,0

00

20,0

00 - - - -

80,0

00

- - - - - - - - - - - - -

- - - - - - - - - - - - -

- - - - - - - - - - - - -

- - - - - - - - - - - - -

- - - -

10,0

00

10,0

00 - -

20,0

00 - - -

40,0

00

- - - - - - -

195,

000

390,

000 -

165,

000

30,0

00

780,

000

150,

480

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

62,6

70

12,5

70

902,

880

150,

480

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

75,2

40

62,6

70

12,5

70

902,

880

120,

000

190,

000

150,

000

240,

000

70,0

00

160,

000

65,0

00

275,

000

470,

000

45,0

00

225,

000

30,0

00

2,04

0,00

0

270,

480

265,

240

225,

240

315,

240

145,

240

235,

240

140,

240

350,

240

545,

240

120,

240

287,

670

42,5

70

2,94

2,88

0

The

Rem

uner

atio

n fo

r the

Boa

rd o

f Dir

ecto

rs in

201

0

Nam

e

1.

Mr.

Chao

valit

Ek

abut

2.

Mr.

Krit

Um

pote

3.

Mr.

Kuas

ak

La-O

rsuw

an

4.

Mrs

. Nua

ncha

n Bo

onpo

ijana

soon

torn

5.

Mr.

Pras

ert

Won

gwai

wit

6.

Mr.

Poon

pipa

t Au

ngur

igul

7.

Mr.

Rich

ard

Dav

id

Han

8.

Mr.

Som

char

t Ba

ram

icha

i

9.

Mr.S

ombo

on

Chuc

haw

al

10.

Ms.

Suva

nnee

Le

e

11.

Mr.

Bunn

Ka

sem

sup

12.

Mr.

Such

ai

Korp

rase

rtsr

i**

Tota

l

(BA

HT)

Boar

d of

Dire

ctor

A

udit

Com

mitt

ee

Nom

inat

ion

Com

mitt

ee

Rem

uner

atio

n Co

mm

ittee

Ex

ecut

ive

Com

mitt

ee

Tota

l Rem

uner

atio

n

Ann

ual

Dire

ctor

s’ Fe

e*

Ann

ual

Dire

ctor

s’ Fe

e

Ann

ual

Dire

ctor

s’ Fe

e

Ann

ual

Dire

ctor

s’ Fe

e

Ann

ual

Dire

ctor

s’ Fe

e

Ann

ual

Dire

ctor

s’ Fe

e*

Att

enda

nce

Fee

Att

enda

nce

Fee

Att

enda

nce

Fee

Att

enda

nce

Fee

Att

enda

nce

Fee

Att

enda

nce

Fee

Tota

l

Tota

l 2,

942,

880

Rem

uner

atio

n of

the

Man

agem

ent E

xecu

tive

For A

ccou

ntin

g Pe

riod

ende

d D

ecem

ber 3

1, 2

010,

the

rem

uner

atio

n an

d be

nefit

s pa

id to

the

8 M

anag

emen

t Exe

cutiv

e w

as 2

0,43

5,69

0 Ba

ht

incl

udin

g sa

lary

and

bon

us. C

ompa

ny’s

cont

ribut

ion

to th

e pr

ovid

ent f

und

for m

anag

emen

t exe

cutiv

e w

as in

the

amou

nt o

f 1,3

23,1

93 B

aht

Div

iden

d Pa

ymen

t Pol

icy

Th

e Co

mpa

ny’s

divi

dend

pay

men

t is

base

d on

the

Com

pany

’s an

nual

ope

ratin

g pe

rfor

man

ce, i

nves

tmen

t pla

n an

d ot

her r

elat

ed m

atte

rs a

s de

emed

app

ropr

iate

.

Rem

arks

: *2

% o

f net

pro

fit a

s at

Dec

embe

r 31,

201

0

**

Bei

ng a

ppoi

nted

as

Dire

ctor

, Exe

cutiv

e Co

mm

ittee

and

Man

agin

g D

irect

or in

repl

acem

ent f

or M

r. Bu

nn K

asem

sup

sinc

e N

ovem

ber 1

, 201

0


Related parties are those parties linked to the Group and the Company by common shareholders or directors. Transactions with

related parties are conducted at prices based on market prices or, where no market price exists, at contractually agreed prices.

The following are relationships between the related parties that control the Company or are being controlled by the Company or

have transactions with the Group.

Name of entities

Siam Cement Public Company Limited

SCG Paper Public Company Limited

SCG Networks Management Co., Ltd.

SCG Accounting Services Co., Ltd.

SCG Distribution Co., Ltd.

SCG Logistics Management Co., Ltd.

SCG Performance Chemicals Co., Ltd.

SCG Trading Co., Ltd.

SCG Legal Counsel Limited

IT One Co., Ltd.

Thai Paper Company Limited

Phoenix Pulp and Paper Public Company Limited

Thai Cane Paper Public Company Limited

InfoZafe Co., Ltd.

Country of incorporation

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Thailand

Nature of relationships

The ultimate parent of the group

The major shareholder, 49.79%

A subsidiary of Siam Cement Public Company Limited







An Assosiates of Siam Cement Public Company Limited

A subsidiary of SCG Paper Public Company Limited




Transactions

Sale of goods or rendering of services

Purchases of raw materials or services

Rental income

Other income

Service fee

Sale of property, plant and equipment

Pricing policies

Market price

Market price

Contractually agreed price equivalent to market prices

Market price

Contractually agreed price

Market price

The pricing policies for particular types of transactions are explained further below:

Connected Transactions

88

Consolidated financial statements

Other related parties

Sale of goods or rendering of services

Purchases of raw materials

Service fee

Directors’ remuneration

2010

2,761

63,235

5,262

2,943

2009

3,193

50,222

5,128

3,449

Balances as at 31 December 2010 and 2009 with related parties were as follows:

Significant transactions for the years ended 31 December 2010 and 2009 with related parties were as follows:

Trade accounts receivable from related parties


Ultimate parent of the Group



SCG Performance Chemicals Co., Ltd.

SCG Networks Management Co., Ltd.

InfoZafe Co.,Ltd.

SCG Trading Co., Ltd.

SCG Distribution Co., Ltd.

SCG Logistics Management Co., Ltd.

Thai Cane Paper Public Company Limited

Others

Total

2010

69

-

44

-

39

14

51

46

20

283

2009

83

63

17

384

-

-

-

-

13

560

(in thousand baht)

(in thousand baht)

Connected Transactions





Major shareholder

SCG Paper Public Company Limited


SCG Accounting Services Co., Ltd.

SCG Legal Counsel Limited

Total

2010

491

228

281

14

1,014

2009

485

215

134

-

834



Thai Paper Co., Ltd.

Phoenix Pulp and Paper Public Company Limited

IT One Co., Ltd.

Others

Total

2010

7,058

1,650

274

134

9,116

2009

10,632

1,149

-

120

11,901




2010

11

2009

-

Other receivables from related parties

Trade accounts payable from related parties

Other payables to related parties

(in thousand baht)

(in thousand baht)

(in thousand baht)

90

Operating Results and Financial Status

Total revenues decreased by 1% to Baht 885 million (2009: Baht 891 million). Net profit decreased by 35% to Baht 45 million

(2009: Baht 69 million). Earning per share decreased to Baht 4.05 (2009: Baht 6.25 per share).

Financial Ratio

Current ratio was 4.81times (2009:4.94 times). Current ratio decreased from last year due to the increase in overdue. Net profit

margin was 4.97% (2009: 7.65%) The return on equity decreased by 6.73% (2009: 10.52%). Debt per equity was 0.17 times (2009: 0.15

times). Book value per share was Baht 59.96 (2009: Baht 60.41).

Management Discussion and Analysis of Financial Status and Performance


Principles of Good Corporate Governance

Thai British Security Printing Public Company Limited (TBSP) considers good corporate governance a part of its business policy.

Therefore, the emphasis is strongly laid upon principles and practices concerning responsibility and fairness towards all stakeholders.

The principles include a clear outline of the structure, components, duties, independence and the performance of the Board of Directors,

transparency of information disclosure, a strict auditing system and risk management policy. These build trust and create additional

value among the shareholders in accordance with the changing economic and social situation.

The Rights of Shareholders

TBSP ensures that the shareholders are entitled to all basic rights at acceptable and trusted standards: the rights of investors in

the Stock Exchange of Thailand and the rights of owners of the company; for instance, the rights to buy new shares, sell or transfer their

own shares, the rights to receive dividends from the company, the rights to attend the Shareholders Meeting, the right to express

opinions freely, the right to make decisions on important affairs of the company e.g. the election of Directors. However, shareholders of

the Company have the right to vote at meetings according to the number of shares owned by each shareholder, whereby one share is for

one vote. There is no share with privilege to limit the rights of other shareholders.

Apart from the abovementioned rights of the shareholders, TBSP has carried out the following tasks to encourage and facilitate

shareholders to exercise their rights.

1. Provide essential, clear and up-to-date information for shareholders regarding the Company’s business through the Stock

Exchange of Thailand.

2. Prior to a meeting, each shareholder will receive significant and sufficient detailed information concerning the date and the

agenda of the meeting. This will be posted on the Company’s website one months before sending out the documents. Shareholders’

right to attend the meeting and the right to vote on resolutions will be clearly explained in the notice to shareholders.

3. In cases where the shareholders are unable to attend the meeting, they are entitled to appoint a representative e.g. an

independent director or a natural person to act as their proxy by using any proxy forms attached to the notice of the meeting. These

forms can also be downloaded from TBSP’s website.

4. Last year, for shareholders’ convenience, the Company provided an electronic system for registration to speed up the process

on the date of the meetings. The barcode showing each shareholder’s reference number appeared in the proxy form. In addition, the

PDA (Personal Digital Assistant) was provided for voting and vote counting in each agenda. After the meeting, shareholders are entitled

to verify the result.

5. In the Annual General Meeting of Shareholders, one third of the Directors will finish their terms; hence, the election will take

place on the day of the meeting. Shareholders are entitled to freely propose the name of an individual as candidate for the Company’s

director.

6. At the meeting, shareholders are entitled to freely express their opinions, suggest or raise questions on any agenda. Before

calling for a vote on a resolution, sufficient detailed information is given to shareholders. Should shareholders have questions on any

agenda issues, the Management in charge of the issues are available to answer those questions under the responsibility of the Board.

7. In each agenda of the meeting, shareholders can request for secret vote if shareholder makes a proposal, five other

shareholders agree with the proposal and the meeting resolves accordingly.

8. In addition, information regarding the amount and type of compensation received by each Director of the Board is disclosed to

the shareholders and also included on the agenda. The said compensation is divided into annual remuneration and attendance fee for

the Board of Directors and sub-committee members.

9. Prior to the meeting, one or several shareholders holding in aggregate of not less than five percents of the total number of

TBSP’s ordinary shares which have the right to vote at the meeting and being a shareholder not less than 1 year until the proposed day is

entitled to propose agenda in advance for consideration in the Annual General Meeting of Shareholders. The said issue can be proposed

from November 2, 2009 until December 1, 2009 for consideration by the Board of Directors. Should the proposed issue be included on

the meeting agenda, the Company shall specify in the notice of the meeting that the agenda item was proposed by a shareholder.

However, in case the proposed issue is rejected, the Company shall inform shareholders of the reasons at the ordinary general meeting

of shareholders.

Corporate Governance

92

The Equitable Treatment of Shareholders Providing the equitable treatment to every individual shareholder, every group of shareholders, major or minor shareholders,

institutions or foreign investors is considered as great challenge. TBSP realizes its significance and makes every effort to find tools to

enhance equality, particularly, in minor shareholders. For instance:

1. The Board of Directors has established the following measures to control the usage and prevent the misuse of internal

information (insider trading) for personal benefit of a person concerned, namely the Board of Directors, the Management and personnel

working in the related department (including their spouses and minor children):

- Prohibit all persons concerned from trading the Company’s shares for a 2-week period prior to and a 24-hour period after the

release of the Company’s quarterly and annual financial statements (blackout period).

- Should they have knowledge of confidential information that could have any impact on the Company’s share price, they would

be prohibited from trading the company shares until after a 24-hour period of the public disclosure.

2. For the Annual General Meeting of Shareholders, the Company sends the shareholders proxy forms, the contents of which

agree with the specifications defined by the Ministry of Commerce, along with the notice of the meeting. The shareholders who are

unable to attend the meeting are entitled to appoint a representative. Furthermore, the shareholders who arrive after the meeting

commences have the right to vote on the agenda being discussed at that time and be considered part of the quorum from that agenda

onwards unless the meeting sees otherwise.

The Role of Stakeholders in Corporate Governance

TBSP conducts business with the highest responsibility to ensure sustainable and mutual benefits to all related parties. Corporate

administration and business operations ensure that the Company acknowledges the rights of stakeholders, both as stated by law and as

clearly written in good corporate governance principles. The Company also ensures that those rights are protected and the

shareholders, employees, those who use the products and services and those related in terms of business are treated equally.

Shareholders The Company respects and realizes the basic rights of shareholders and the rights stipulated by the laws and the

Company’s Regulations, such as the rights to request a verification of the number of shares, the rights to receive share certificates, the

rights to attend the shareholders meetings, the rights to vote at the meeting, the rights to freely express opinions at the shareholders

meeting, the rights to make suggestions and comments on the Company’s affairs, and the rights to receive an appropriate return as

being the owner of the Company.

Employees TBSP truly believes that employees are the most valuable assets and is determined that every employee be proud

of and trust the organization. In the previous year, TBSP organized activities to promote a good work environment to achieve

innovations and support business expansion. The Company also places emphasis on good health, work environment and safety.

Customers It is of great concern to TBSP that customers be provided with the maximum benefits in terms of quality and price,

and the Company is determined to develop and maintain sustainable relationships with customers. The Company has also set up a

support office of engineers to provide product information, solve problems and receive complaints in order to ensure total customers’

satisfaction.

Business Partners TBSP operates its business within a competitive context by strictly following promises and commitments to

trading partners with the policy focusing on quality products and on-time delivery.

Competitors TBSP operates its business within a competitive context by being fair and closely following the laws. No dispute

with competitors arises during the previous year.

Society and Environment TBSP organizes, in the communities surrounding the Company’s plants, a range of activities to

promote society quality, especially those that increase opportunities for the better education and environment. In addition, the



Company has continuously given scholarship to the community for a long time. The Company believes that the sustainable

achievement of the Company depends on the Company’s operation as well as realization on the importance of the nearby communities’

needs in terms of society, environment, occupational hygiene, safety and tradition. TBSP has invested heavily in preserving the

environment and has drawn up a definite policy on environmental conservation with a regular monitoring and assessment system.

Disclosure and Transparency

TBSP realizes the importance of information disclosure as it greatly affects the decision-making of investors and stakeholders. It

is, therefore, necessary to control and define measures concerning the legal disclosure of information, both financial and non-financial.

Information disclosed via Annual report and the Stock Exchange of Thailand’s SET Community Portal shall be complete, sufficient,

reliable and up-to-date, written both in Thai and in English.

TBSP is committed to obeying the law, regulations and obligations mandated by the Securities and Exchange Commission, the

Stock Exchange of Thailand and other related government sectors. Regular amendment takes place to ensure that the law, regulations

and obligations TBSP abides by are up-to-date and to guarantee transparency in conducting business, for example:

1. Reveal accurate, complete and timely financial information and non-financial information.

2. Prepare the report of the Board’s responsibility for financial statements and present it along with the Audit Committee report

in an annual report.

3. Require the Company’s Directors and executives to disclose their interests in connection with those of TBSP and the persons

involved in the Company’s interests.

4. Reveal the nomination of Directors.

5. Disclose the performance and attendance record of each member of the sub-committee.

6. Reveal information on remuneration each Director receives as a member of the Subcommittee.

7. Disclose the policy on remuneration for Directors and top executives, including form, type and amount of remuneration for

each member of the sub-committees.

The Responsibilities of the Board, Structure, and the Sub-committee Structure of the Board of Directors The Board of Directors comprises knowledgeable and competent persons who are responsible for determination of corporate

policy in the field of finance, risk management and the organization overview. The Board shall play an important role in overseeing,

monitoring and assessing the performance of the Company and the top executives on an independence basis.

The current Board of Directors comprises of 11 persons. The Board of Directors comprises 10 non-executive directors, which

included 5 Independent Directors and 1 Executive Director, being the Company’s Managing Director. The independent directors have

qualifications of independent directors as required by SEC.

Moreover, to enhance the shareholders belief that the Company has prudently operated its business, the Board has established

the following committees, Audit Committee, Nomination Committee, Remuneration Committee and Executive Committee to be

responsible for their specific areas and report directly to the Board for its consideration.

The Audit Committee consists of four Company’s Independent Directors, all of them have a full understanding of and

experience in accounting or finance. Their duties include checking if the operation has been carried out in accordance with the

Company’s Regulations as well as the laws, code of practice and the Compliance Unit’s regulations. Moreover, they are committed to

promoting the development of the financial and accounting report system to meet international standards and to ensure that the

Company has an appropriate, new and efficient internal controls system, an internal audit system and a concise risk management

system. The Audit Committee acts and expresses opinions freely, with the Company’s Internal Audit Unit acting as an operation unit

directly reporting to the Audit Committee. The Audit Committee also works regularly with an auditor.

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The Nomination Committee consists of three Company’s Directors, all of them do not come from TBSP’s top executive, and

the Chairman of the Nomination Committee is an Independent Director. The Committee is also in charge of the nomination of persons

qualified as members of the Board of Directors to replace those who finish their terms or end their Directorship because of other reasons.

The Remuneration Committee comprises three Company’s Directors. The Committee is responsible for the monitoring and

study of changes and trends in the remuneration of the Board of Directors and sub-committees and to suggest remuneration to be

further proposed for the Board’s consideration.

The Executive Committee consists of three Company’s Directors. The Committee is responsible for managing and

supervising all the Company’s business in accordance with the Company’s policy, the scope stipulated by law, Objects, the Company’s

Articles of Association and resolution of the Board.

Nonetheless, each sub-committee has the rights and duties as specified by each committee’s regulations. An evaluation of work

performance and a revision of operation results of sub-committees are conducted annually, at least once a year. The Board of Directors,

moreover, are entitled to form ad hoc sub-committees suitable for changing situations.

The Company has made the unambiguous separation of the roles and responsibilities of the Board of Directors and the

Management. The Board shall be responsible for establishing the policies and overseeing the Management’s implementation of those

policies. The Management, on the other hand, shall be responsible for implementing the policies formulated by the Board, and ensuring

that these are carried out as planned. Therefore, the Chairman and the Managing Director of the Company shall not be the same

person, providing that both are nominated and elected by the Board.

Board of Directors Meeting It is the duty of every member of the Board to constantly attend the Board Meeting to acknowledge and make decisions on the

corporate operations. The Board holds at least four scheduled meetings per year, providing that the agendas are set clearly in advance

prior to each meeting. The Board members may be summoned to specific meeting to consider and determine on the urgent matters.

Chairman and the Managing Director of the Company jointly determine on which items on the agendas to be proposed for

consideration of the Board Meeting. Every individual member of the Board is entitled to propose at will the agenda items.

There are at least four regular meetings per year with a specific with a specific agenda provided ahead of time for each. Special

meetings are convened to consider urgency or important matters. In 2009, the Board held four scheduled meetings. Prior to each

meeting, all members received the agendas and supporting documents well in advance to allow adequate time for preparation.

When considering the matters presented to the Board, Chairman of the Board presides over and duly conducts the meeting. All

members of the Board are allowed to express their opinions freely. Resolutions are passed with a majority vote, providing that one

director is eligible for one vote. The director with any interest in the issue under consideration or the director ineligible to vote is

excused and to be absent during voting. In case the last person in that respective order and the person next to him have equal votes,

the Chairman of the meeting shall have a casting vote.

The Management is encouraged to attend the Board Meeting to provide updated information to the Board, and to learn directly

about the Board’s initiatives and policies for effective implementation. However, the Management is not allowed to attend the Board

exclusive meeting, inclusive of non-executive directors in certain cases, to ensure independence and uninhibited discussion.

After the meeting, the Company Secretary is responsible for preparing the minutes, and sending the certified copies to directors.

The minutes must then be approved at the following Board Meeting, where the directors may make comments, corrections, or additions

to ensure the greatest accuracy and completeness.

After approval, minutes of the meeting are stored securely in the Company Secretary Office together with all related documents

backed up electronically to facilitate data searches.



Remuneration for the Board of Directors and the Management TBSP sets remuneration for members of the Board and the top executives at the rates comparable to the listed companies or

other top companies in the same industries. Remuneration for the top executives is set by the Board of Directors, based on their

responsibilities, performance, and the operating results of the Company.

Details of remuneration for the Board of directors, both annual remuneration and attendance fee, and sub-committees as

approved by the Shareholders Meeting in 2009 are reported on an individual basis on page 94 of the annual report.

Internal Control The Board of Directors sets up the internal control regulations summarized as follows:

- Building organization culture by means of creating organizational structure and authority empowerment to enable

independent counterchecking, selecting qualified employees and regularly developing them to foster their responsibility and

consciousness to internal controls.

- Conducting control activities refers to written segregation of duties, work manual, rules and regulations and approval

authority manual covering scope of duty and responsibility by function based on the principles of authority delegation in

order to enhance and standardized working efficiency. They also include systematic risk management and control self

assessment.

- Following-up internal control is continuously conducted and developed to fit the Company’s business environment.

Knowledge management is also carried out to enable accurate and complete job transfer so as to boost up efficient and

effective job assignment. The Board of Directors receives regular reports through Internal Audit Office to ensure that good

corporate governance is followed.

Internal Audit The Company assigns the Audit Office to evaluate internal controls according to the rules and regulations determined by the

Board of Directors with the policy focusing on preventive and useful audit. Internal audit program is set up to review and ensure the

accuracy of financial reports and sufficient disclosure and transparency of information based on international standard. It is of concern

to TBSP that a modern and proactive auditing guideline be promoted to create confidence in organizational management as follows:

- Audit Management The main audit policy is preventive internal audit aims to concrete benefits to the organization. The

emphasis has been placed on investigating actual causes of problems in order to propose useful improvement as agreed by

working units.

- Control Self-Assessment: CSA CSA is a part of preventive audit using as operational tool in controlling operations within

the organization to achieve the target and to appropriately improve the performance to concretely comply with the business.

It is continuously developed and improved to create internal control responsibility of the executives/supervisor of each

working unit so that they can access to information and problem in due time. As a result, performance improvement and

follow-up of problem solving can be efficiently carried out.

- Key Performance Indicators (KPI) of Internal Audit KPI is mutually accepted among the auditors as a target and apart

of quality assurance. It is specified as working standard regarding work quality, personnel and satisfaction of those being

audited.

- Knowledge Management It enables the auditors/users to share and exchange knowledge and experience via convenient,

timely and efficient information system management.

- Web Base It is developed as a medium between working units and the Audit Office to provide consultation system allowing

accurate work performance that fits rules and regulations, and business environment as well as giving solution concerning

internal controls, rules and regulations.

Risk Management The Audit Committee has set the policy of systematic preventive measurement and risk management. Risk management is

adopted in each business unit of the Company including the follow-up and analysis. The Company regularly reports the progress of this

matter for acknowledgment of the Board of Directors.

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Performance Appraisal and Knowledge Enhancement To enhance capabilities of the Board’s and the subcommittees’ members, the Company requires continuous assessment of

performance as a whole, except the Audit Committee that involved 2 kinds of assessment, self-assessment by each individual director

and assessment of the entire committee as a whole. The results of assessment are reviewed with the intention of finding ways for

continual improvement of the Board’s performance.

TBSP prepared a manual for members of the Board, which includes the summary of law, rules and regulations related to the

Directors. The manual is distributed to all current Directors for their basic information.

Moreover, TBSP encourages all members of the Board and the top executives to attend various seminars and courses benefited to

their responsibilities, allowing them to constantly meet and exchange opinions with members of the Board and the top executives of

different organizations. Some of these courses are organized by learning center, and some are by the governmental agencies or by the

independent organizations, such as Thai Institute of Directors Association. SEC requires directors of all listed companies to complete at

least one of the following training courses: Directors Certification Program (DCP), Directors Accreditation Program (DAP) or Audit

Committee Program (ACP). Experiences gained from these courses are useful for TBSP’s growth and development.

To support the Board’s responsibilities, TBSP has appointed the Secretary to the Board to work in coordination with the Board and

the top executives. In addition, the Secretary to the Board is also responsible for overseeing legal matters, relevant standard practices

and activities of the Board to ensure the implementation of the Board’s resolutions.

Nomination of Board Members The Nomination Committee is responsible for selecting qualified candidates to replace the directors retiring on rotation at the

end of their terms, whatever the case may be, and proposing a list of nominees to the Board for resolution at the following shareholders

meeting. The Nomination Committee selects the candidates with credentials in wide range of professions, great leadership, breadth of

vision, a proven record of ethical and integrity, and ability to express opinions freely.

Assessing the Managing Director’s Performance The Board works in conjunction with the Remuneration Committee to assess the performance of the Managing Director, based

on the Company’s operating results and on implementing Board policies, taking into account economic and social circumstances as a

whole. The Remuneration Committee will then consider the appropriate compensation corresponding to his performance and propose

to the Board of Directors for approval.
