23 May Notification of the rights to subscribe for Newly Issued ordinary shares

Transcription

1 23 May 2013 Subject: Notification of the rights to subscribe for Newly Issued ordinary shares To: The Shareholders of SiS Distribution (Thailand) Public Company Limited Enclosure 1. Certificate of Subscription Entitlement 2. Share Subscription Form 3. Information Memorandum for the Allotment of Newly Issued Ordinary Shares 4. Power of Attorney 5. Map of the Venue for Subscription and Payment Reference is made to the Annual General Meeting No.1/2013 of SiS Distribution (Thailand) Public Company Limited (the Company ) on April 26 th, 2013 which approved the capital increase of the company with details as follows: - Approved the increase of registered capital of the Company from the previous registered capital of Baht 233,465,770 to be the new registered capital of Baht 350,198,655 divided into 350,198,655 shares at par value of Baht 1 per share by issuing the new ordinary shares at the amount of 116,732,885 shares at par value of Baht 1 per share and the amendment to Clause 4 of the Company s Memorandum of Association regarding the registered capital to reflect the increase of the Company s registered capital. - Approved the new ordinary shares that will be allotted to the existing shareholders of the Company in proportion to their shareholding ratio (Right Offering) at the rate of 2 existing ordinary share per 1 Newly Issued ordinary shares at the offer price of Baht 3.25 (Three Baht and Twenty-five Satang), whereby any fraction of share shall be disregarded. Existing shareholders shall have the right to oversubscribe for Newly Issued ordinary shares based on the ratio specified above. Shareholders may oversubscribe and oversubscription shares may be allocated to such oversubscribing shareholders only when there are share left after allocation to all shareholders who have subscribed for shares proportionately to their shareholding percentage. Such allocation of oversubscription shares shall be in proportionate to their existing shareholding percentage and shall be subject to the foreign shareholding limit as prescribed under the Articles of Association of the Company which currently provide that foreign shareholders may hold shares in the Company up to 49 percent of total issued shares of the Company. The Company will allocate and offer the Newly Issued ordinary shares to the shareholders whose names are in the register book on the record date fixed for determining the shareholders entitled to subscribe for the Newly Issued ordinary shares which is scheduled on May 13, The share register book will be closed on May 14, 2013 to collect shareholders names under Section 225 of the Securities and Exchange Act B.E.2535 (as amended). The subscription dates for such securities are from June 2013 from hours.

2 The Company would like to hereby notify you of your right to subscribe for the Newly Issued ordinary shares as per the number indicated in the Certificate of Right to Subscribe for Newly Issued Ordinary Shares, issued by Thailand Securities Depository Co., Ltd. (Enclosure 1). Details of Subscription Entitlement appear in the Information Memorandum for the Allotment of Newly Issued Ordinary Shares of SiS Distribution (Thailand) Public Company Limited (Enclosure 3). Please be informed accordingly. Sincerely yours, Mr.Somchai Sittichaisrichart Managing Director

3 Information Memorandum for the Allotment of Newly Issued Ordinary Shares of SiS Distribution (Thailand) Public Company Limited ( the Company )

4 Enclosure 3 Part 1 Information on the Allocation of Newly Issued Ordinary Shares 1. Name and Address of Listed Company Name SiS Distribution (Thailand) Public Company Limited (the Company ) Address 9 Pakin Building, 9 th Floor, Room No.901, Rachadaphisek Road, Din Daeng, Bangkok Date and Number of the Board of Directors Meeting and Shareholders Meeting that Approved the Allocation of Newly Issued Ordinary Shares Board of Directors Meeting No. 1/2013, dated 1 March 2013 Annual General Meeting of Shareholders No. 1/2013, dated 26 April Details of the Allocation of Newly Issued Ordinary Shares The Annual General Meeting of Shareholders No.1/2013 held on 26 April 2013 passed a resolution to approve the increase of registered capital of the Company from the previous registered capital of Baht 233,465,770 to be the new registered capital of Baht 350,198,655 divided into 350,198,655 shares at par value of Baht 1 per share by issuing the new ordinary shares at the amount of 116,732,885 shares at par value of Baht 1 per to be offered for sale to existing shareholders in proportion to their shareholding (Right Offering) at the ratio of 2 existing ordinary shares to 1 Newly Issued ordinary share. The offering price of Newly Issued ordinary share is Baht 3.25 per share. Any fractions of such Newly Issued shares resulting from the ratio calculations shall be disregarded. 13 May 2013 is determined to be the record date on which the existing shareholders whose name are in the share register book shall be entitled to subscribe for the Newly Issued shares (Record Date). The share register book shall be closed on 14 May 2013 to collect shareholders names under Section 225 of the Securities and Exchange Act B.E (as amended). The subscription dates for the Newly Issued shares are from 10 to 13 June from hours. The terms and conditions of the offering and allotment are as follows: 1

5 Type of Shares : Ordinary Shares Existing Paid-up : Baht 233,465,770 Capital Paid-up Capital to : Baht 116,732,885 be increased Number of shares : 116,732,885 Shares offered Offering Price : Baht 3.25 Subscription Ratio : 2 existing ordinary shares to 1 Newly Issued ordinary share. Any fractions of such Newly Issued shares resulting from the ratio calculations shall be disregarded. Existing shareholders shall have the right to oversubscribe their entitlements Allocation Method : To offer for sale to existing shareholders in proportion to their shareholding (Right Offering) at the ratio of 2 existing ordinary shares to 1 Newly Issued ordinary share. Any fractions of such Newly Issued shares resulting from the ratio calculations shall be disregarded : In the case of shares remaining from the allotment to the existing shareholders in accordance with their shareholding proportion in the first round, the Company will allocate such remaining shares to the shareholders who express their intention to subscribe to Newly Issued ordinary shares in excess of their entitlements in proportion to their shareholding until fully allocated by multiplying such shareholder s existing shareholding proportion of the Company (as used to determine such shareholder s pro rata subscription entitlement set forth in their Certificate of subscription entitlement) by the number of remaining Newly Issued ordinary shares (with any fraction of a share disregarded for the purpose of such allocation). : In no event shall Newly Issued ordinary shares be allocated to any shareholder in the Rights Offering in excess of the number of subscribing shares specified in his, her or its Share Subscription Form (Enclosure 2). : In the case of shares remaining from the allotment to the existing shareholders in accordance with their shareholding proportion in the first round and the number of remaining is greater than the demand of all such oversubscribing shareholders, the Company shall allocate such remaining unsubscribed shares to investors by Private Placement and/or institution investors categorized under the Notification of the Capital Supervisory Board No. Tor Jor 28/2551 re: the Application and Permission for Offering Newly Issued Shares, provided that such persons are not connected persons of the Company and offer in entirely or to portion and offer in lots from time to time as deemed appropriate at the price than that as offer to the existing shareholders and not lower than 90% of the market price calculated by average closing price of 14 days before the offer Method for : In the case that there is a fraction, such fractions shall be rounded off Fraction of Shares and combined with the remaining unsubscribed shares as a result of certain shareholders waiving their rights to subscribe for shares, failure to make payment, forego their rights, or for any other reasons whatsoever (collectively referred to as the Remaining Shares ). The Remaining Shares shall be allocated to shareholders who have expressed their intentions to subscribe for shares in excess of their entitlements, in proportion to their shareholdings 2

6 Other Conditions of Subsription 3.1 In the case that a shareholder subscribes to the Newly Issued ordinary shares pursuant to his/her right or less than his/her right to receive the allocation thereof, such shareholder, who expresses an intention to subscribe to the Newly Issued ordinary shares pursuant to his/her right or less than his/her right to receive the allocation thereof, will receive the allocation of all Newly Issued ordinary shares that he/she subscribes to. 3.2 In the case that the shareholder expresses his/her intention to subscribe for the Newly Issued ordinary shares in excess of his/her right, such shareholder shall subscribe for the Newly Issued ordinary shares pursuant to his/her right in full amount prior to obtaining the right to oversubscription. The shareholder shall completely and clearly provide details specified in the Share Subscription Form (Enclosure No. 2) and make full payment for the subscription pursuant to his/her right and the oversubscribed portion by cheque, or cashier cheque, or bank draft, or money transfer. 3.3 Any shareholder who subscribes to the shares and has already made payment for the subscription cannot cancel the subscription or request for refund. 3.4 In the case that the payment of the subscription amount is made by cheque, the payment of such subscription amount will be deemed complete once the bank has cleared the amount specified in the cheque. 3.5 If any shareholder, who subscribes to the Newly Issued ordinary shares, fails to pay for the subscription, or the Company is unable to collect the payment for the subscription, either wholly or partly, within the specified subscription period, regardless of the cause which is not the fault of the Company or if any shareholder who subscribes to the Newly Issued ordinary shares incompletely or unclearly fills in the details in the Share Subscription Form, or subscribes to the Newly Issued ordinary shares by any method other than those specified in this Information Memorandum for the Allotment of Newly Issued Shares of the Company, the Company will consider that such shareholder waives his/her right to subscribe to the Newly Issued ordinary shares. In this regard, the Company hereby reserves the right to not allocate the Newly Issued ordinary shares to such shareholder. Please be informed that, in making payment for the subscription, each shareholder is advised to examine the subscription method and proceed with the subscription according to the specified conditions and methods. If the shareholder fails to comply with the methods for the payment of the subscription or fails to proceed with the subscription according to the specified conditions and methods, which prevents the subscription payment from being collected within the period for the subscription, the Company will consider that such shareholder waives his/her right to subscribe to the Newly Issued ordinary shares. In this regard, the Company hereby reserves the right to not allocate the Newly Issued ordinary shares to such shareholder. 3.6 If the allocation of the Newly Issued ordinary shares, whether pursuant to each respective shareholder s right or in excess of right, causes the foreign shareholding of the Company to exceed 49% of the paid-up capital of the Company, the Company, hereby reserves the right to not allocate the Newly Issued ordinary shares to the foreign shareholder; thus, such foreign shareholder may not be allocated or only be partially allocated the Newly Issued ordinary shares. 3.7 The Company hereby reserves the right to make adjustment to the subscription method, the terms and conditions of the subscription or any information regarding the subscription of the Newly Issued ordinary shares as deemed necessary in case of problematic events, obstacles, or limitation in execution of the subscription for the benefit of the subscription process of the Company s Newly Issued ordinary shares. 3

7 4. Record date to determine the name of shareholders who have the rights to subscribe for Newly Issued ordinary shares The Company set 13 May 2013 as the Record Date to determine shareholders who are entitled to subscribe for the Newly Issued ordinary shares to purchase the Newly Issued ordinary shares (Record Date). The share register book will be closed on 14 May 2013 to collect the names of the shareholders in accordance with Section 225 of the Securities and Exchange Act B.E (as amended). 5. Subscription and Payment Schedule of Newly Issued Ordinary Shares 5.1 Subscription and Payment Period of Newly Issued Ordinary Shares From 10 to 13 June 2013, from hour (Lunch hours) 5.2 Location for Subscription and Payment of Newly Issued Ordinary Shares Shareholders who wish to subscribe for the Newly Issued ordinary shares may contact at SiS Distribution (Thailand) Public Company Limited 9 Pakin Building, 9 th Floor, Room No.901 Ratchadaphisek Road, Din Daeng Bangkok Tel For shareholders holding shares of the Company via scripless system, please contact the broker that the shareholders have the trading account and have the Company s shares deposited with. Please arrange with the broker to collect all necessary documents and submit to the Company for Rights Offering of the Company. The Company does not accept any subscription by post. 5.3 Method of Subscription and Payment The shareholders who intend to subscribe to the Newly Issued ordinary shares must clearly and accurately complete and sign the Share Subscription Form with specific subscription amount pursuant to their rights as specified in the Certificate of Subscription Entitlement and in excess of their rights in one Share Subscription Form per a subscriber, and make payment for such subscription in full for both the subscription amount pursuant to rights and the portion subscribe in excess of rights (if any) by cheque, or cashier cheque, or bank draft, or money transfer at the subscription location. In case that any shareholder intends to subscribe for the Newly Issued ordinary shares in excess of their rights, the shareholders are required to subscribe in full of entitled shares pursuant to their rights before being eligible to subscribe for the remaining entitled shares in excess of such shareholder s rights. The subscribers or their proxies shall submit the subscription documents required as follows (1) Share Subscription Form which is clearly and accurately completed and signed by the Subscriber. Each subscriber, in any case, shall submit 1 Share Subscription Form per 1 Certificate of Subscription Entitlement only; (2) Certificate of Subscription Entitlement (if any) issued and delivered, along with this notice, via registered mail to the shareholders by Thailand Securities Depository Company Limited ( TSD ), the share registrar of the Company; (3) Proofs of payment, including the original Pay in slip (in the case of money transfer) or personal cheque or cashier cheque or bank draft, specifying first name, last name and contact number of the subscriber on the back of such proof of payment; Payment Made by Personal Cheque or Cashier Cheque or Bank Draft 4

8 The shareholders who would like to make the payment with personal cheque or cashier cheque or bank draft shall subscribe from 9.00 a.m p.m. of 10 and 11 June, The personal cheque or cashier cheque or bank draft shall be dated within the subscription period but no later than 12 June, 2013 and shall be collectible within the next business day by the same clearing house. The payment with personal cheque or cashier cheque or bank draft shall be crossed A/C Payee Only and made payable to SiS Distribution (Thailand) Public Company Limited. Each subscriber, in any case, shall submit 1 personal cheque or cashier cheque or bank draft per 1 Share Subscription Form only. Payment Made by Money Transfer The shareholders who would like to make the payment with money transfer shall subscribe from 9.00 a.m p.m. of June, 2013 and must attach Pay-in slip herewith. Payment with money transfer shall be payable to SiS Distribution (Thailand) Public Company Limited Kasikorn Bank, Current Account, Asoke Din Daeng Branch, A/C Number The Company does not accept any subscription payment in cash. The subscriber shall make the full payment at once and be responsible for any related expenses and bank s fees (if any) besides the payment of subscription. (4) Required Documents for Identification Thai Individual A certified true copy of Thai National ID Card that is not expired or, in case there is no identification card, a certified true copy of house registration containing the 13-digit identification number or a certified true copy of any other official document containing the 13-digit identification number shall be submitted. In the case of change of first name/last name, which causes a non-similarity to the name of shareholders as displayed in the share register book as of 14 May, 2013 or in the Certificate of Subscription Entitlement, a certified true copy of other relevant official documents illustrating the change of first name/last name shall be submitted for authentication, such as marriage certificate, divorce certificate or certificate of change of first name/last name, together with a certified true copy thereof. The signature on all certified true copies must be identical to the signature endorsed on all relevant documents for the subscription. Foreign Individual A certified true copy of alien certificate or passport that is not expired. The signature on all certified true copies must be identical to the signature endorsed on all relevant documents for the subscription. Juristic Person Incorporated in Thailand A copy of the affidavit issued by the Ministry of Commerce for not more than 6 months prior to the subscription date, a copy of tax ID card (if any) certified by the authorized person(s) and affixed with the seal of such juristic person (if any) together with a certified true copy of Thai National ID Card, alien certificate or passport (as the case may be) of such authorized person(s) of the juristic person. The signature on all certified true copies must be identical. Juristic Person Incorporated Outside Thailand A copy of the certificate of incorporation and corporate affidavit issued for not more than 6 months prior to the subscription date by the relevant agency of the country where such juristic person is domiciled, 5

9 enclosed with a certified true copy of identification card, identification card of government officer, identification card of state enterprise officer, alien certificate or valid passport (as the case may be) of the authorized director(s) of such juristic person. Each of above documents must be notarized by a Notary Public or authenticated by the Thai Embassy or the Thai Consulate in the country where the documents were prepared or certified. (5) For shareholders who subscribe in excess of their rights and wish to receive the refund from any unallocated portion of the share subscription or of the subscription of shares in excess of his/her subscription entitlements via Automatic Transfer System, they shall attach a certified true copy of the front page of a savings or current account book (only with Bangkok Bank, Kasikorn Bank, Krung Thai Bank, Siam Commercial Bank), provided that the name which appears in such bank account book shall be the same as that of the subscriber. (6) A power of attorney (Enclosure No.4) affixed with Baht 30 stamp duty (in the case of appointment of a proxy) together with certified true copies of identification cards of the subscriber and his/her proxy. 5.4 Refund of Subscription Payment for Un-allocated Portion In the case of refund of subscription payment, the Company shall be as follows: In the case that the shareholders who have subscribed for the Newly Issued ordinary shares do not receive the allocation of the Newly Issued ordinary shares or receive allocated shares less than the number of shares that such shareholders intend to subscribe in excess of their rights, the Company will cause a refund of the subscription payment in the part of share that have not been allocated by using any of the methods that the shareholder specifies in the Share Subscription Form, within 14 days starting from the last date of the subscription and payment period. Nevertheless, in the case of the inability to return the subscription payment for un-allocated shares by using the method for the transfer of the money via automatic transfer system to the bank account of the subscriber as specified in the subscription form, regardless of the cause beyond the control of the Company, the Company shall cause a refund of the subscription payment for un-allocated shares by issuing a crossed cheque payable to the subscriber and delivering such cheque via registered mail to the address that appears in the list of shareholders as of May In case of a refund made via cheque, the subscriber will be responsible for the fee charged by the different Clearing House or the fee charged in relation to the bank s cheque (if any). In this regard, in any case, if there is a transfer of the subscription payment for un-allocated shares via automatic transfer system to the bank account of the subscriber, as specified in the subscription form, or via the cheque payable to the subscriber delivered via registered mail to the address as displayed in the list of shareholders, it shall be deemed that the subscriber has duly received the refunded subscription payment for the un-allocated shares; and the subscriber shall no longer be able to claim interest and/or damages from the Company. 5.5 Allocated Shares Delivery Process The subscriber could ask the Company to implement one of the following processes: 1. In the case that the subscriber would like to receive the share certificate in the name of that subscriber, the registrar of the Company, TSD, will deliver the share certificate with the allocated share amount to the subscriber via registered mail to the address that appear in the register book within 15 business days after the last date of the subscription and payment period. In such a case, the subscriber cannot sell the allocated shares in the Stock Exchange of Thailand ( SET ) until the subscriber received the share certificate which might be after the first trading day of the allocated shares. 6

10 2. In the case that the subscriber does not wish to receive the share certificate, but would like to employ TSD service without an account with TSD. In other word, the subscriber would like to deposit the allocated shares with TSD under the account of SiS Distributition (Thailand) Public Company Limited account number 600. The Company shall deposit the allocated shares with TSD. TSD shall record those shares under the account of SiS Distribution (Thailand) Public Company Limited account number 600 within 7 business days starting from the last date of the subscription and payment period and issue confirmation of share deposit to the subscriber within 15 business days starting from the last date of the subscription and payment period. When the share-allocated subscribers would like to sell the allocated shares, they must withdraw those shares from the account number 600 by requesting the securities companies, with potential fees applicable as indicated by the TSD and/or such securities company. After the SET approves the Newly Issued ordinary shares to be traded in the SET, the share-allocated subscribers could sell those shares in SET in the first trading day of the allocated shares and have already withdrawn those shares from the account number In the case that the subscriber does not wish to receive the share certificate, but would like to employ TSD service with an account with TSD. In other word, the subscriber would like to deposit the allocated shares in their trading account. In this case, the Company shall deposit allocated shares under the name of Thailand Securities Depository Company Limited for Depositor. TSD shall record the allocated shares deposited with TSD and shall issue a confirmation of share deposit to the subscriber within 7 business days from the last date of the subscription and payment period. At the same time, the securities company shall record the allocated shares to the subscribers. The share-allocated subscribers could sell those shares on the first trading day of the Newly Issued ordinary shares. In the case that the subscribers choose to proceed as 5.5 (3), the name of the subscriber in the Share Subscription Form must be the same with the name of the assigned trading account for the share deposited in the securities company only. Otherwise, the Company reserves the right to deliver those shares issued under the name of Thailand Securities Depository Company Limited for Depositor and deposit those shares with TSD under the account of SiS Distribution (Thailand) Public Company Limited account number 600. After the SET approves the Newly Issued ordinary shares to be traded in the SET, the share-allocated subscribers could sell those shares in SET in the first trading day of the Newly Issued ordinary shares by withdrawing those shares from the account number 600 with fees applicable as indicated by the TSD and/or such securities company (if any). Shareholders subscribing to shares must correctly specify the participant number (as listed on the back of the Share Subscription Form) that the shareholder has the securities trading account and the securities trading account number, which the shareholder wants the allocated shares to be transferred. In the case of incorrect identification participant number or securities trading account number, which may cause an inability to transfer the subscribed shares to the securities trading account, the Company will not be responsible for any loss or delay in receiving the shares. In the case that the shareholder incompletely provides the required details, the Company reserves the right to issue shares in the name of Thailand Securities Depository Company Limited for Depositor and deposit those shares with TSD under the account of SiS Distribution (Thailand) Public Company Limited account number 600. After the SET approves the Newly Issued ordinary shares to be traded in the SET, the shareallocated subscribers could sell those shares in SET in the first trading day of the Newly Issued ordinary shares and have already withdrawn those shares from the account number 600 with fees applicable as indicated by the TSD and/or such securities company (if any). In the case that the subscriber does not choose any options above in the Share Subscription Form, the Company reserves the right to those shares under the account of the Company who issued the securities with account number 600 as per clause 5.5 (2) to the subscribers. 5.6 Other Important Information for the Subscription of the Newly Issued Ordinary Shares 1) Each shareholder subscribing to shares will receive a receipt issued by the Company as evidence for the subscription. The subscription would be completed when the Company collects the subscription payment. 7

11 2) The Company will assume that the shareholder who does not exercise the subscription right has waived his/her subscription right for this Rights Offering, and the Company hereby reserves the right to not allocate the Newly Issued ordinary shares to such shareholder. 3) If the number of shares specified in the Share Subscription Form is more than the amount of payment received by the Company, the Company reserves the right to allocate the shares according to the subscription payment. 4) If the number of shares specified in the Share Subscription Form is less than the amount of payment received by the Company, the Company reserves the right to allocate the shares to each shareholder as it deems appropriate. 6. Objective for the Capital Increase and Plans for Utilizing Proceeds Received From the Capital Increase To utilize proceeds received from the capital increase as working capital of the Company and to improve Total Debt to Equity ratio to be within Bank covenants 7. Benefits Which the Company Will Receive From the Capital Increase/Share Allotment After the implementation of its capital increase plan, the benefit that the Company could potentially achieve would include: 7.1 To increase the Company s Liquidity 7.2 To improve the strengthen in financial position 7.3 To expand in various business 8. Benefits Which the Shareholders Will Receive From the Capital Increase/Share Allotment 8.1 The Company has established a dividend policy to pay not less than 40 percent of the net profit of each year. 8.2 Subscribers of new shares issued for this capital increase will be entitled to receive dividends from the Company s business operations starting when the aforesaid persons have been registered as the shareholders of the Company 9. Other Details Necessary for Shareholders to Consider in Subscribing for the Capital Increase/Share Allotment -None- 8

12 Part 2 Information of SiS Distribution (Thailand) Public Company Limited 1. Name and Address of Listed Company Name SiS Distribution (Thailand) Public Company Limited (the Company or SIS ) Address 9 Pakin Building, 9 th Floor, Room No.901, Rachadaphisek Road, Din Daeng, Bangkok Nature of Operation and Characteristics of Primary Business of the Company The Company is a distributor of IT products for 70 leading manufacturers and distributed to more than 5,000 dealers. 2.1 Business Overview SiS Distribution (Thailand) Public Company Limited is incorporated as IT Distributor by trading in computer, software, peripherals and office automation in Thailand since 1998 and The Company was listed on the Stock Exchange of Thailand in During 2009, the Company has set up a subsidiary company named SiS Venture Co., Ltd., whose business is to invest in other companies by held 99.99%. During 2010, the Company has set up a subsidiary company named Qool Distribution (Thailand) Co., Ltd.,whose business is IT, Smartphone and Services to dealers by held 99.99%. In 2012, the Company is a leading distributor of more than 70 vendors and has a customer base of retail store, corporate reseller, system integrator and computer manufacturers under their own trademards, etc. more than 5,000 dearlers. Characteristics of products and services Currently, The Company has entrusted from leading manufacturers in the world to be distributor for various products such as Apple, APC, Acer, BlackBerry, EMC, HP, HTC, IBM, Lenovo, Motorola, Philips, Samsung, Sandisk, Toshiba, Western Digital, etc. and in 2012, the Company has been a distributor of several items such as LG and Brother, totally more than 70 manufacturers in 2012 The Company has divided our business of Computer, Peripherals and Office Automation based on main categories as follows: 1) System System represents all types of computer hardware from Server, Desktop, Notebook, Tablet, Hybrid (Notebook+Tablet) exclude Smart Phone. The company was appointed from 10 vendors as 1) Acer 2) Apple 3) Asus 4) Fujitsu 5) HP 6) IBM 7) Lenovo 8) MSI 9) Samsung 10) Toshiba 2) Peripheral This represents peripheral and others that not classified to be above computer hardware, and services such as Supply, Monitor, Projector, Scanner, Printer, Hard Disk, Software, Memory, Keyboard, Mouse, Bag, Network, etc. The company was appointed from various vendors as 3Com, Avermedia, Axis, APC, Brocade, BlueTrek, Barkan, Commy, Cisco, Case-Mate, Cheval, Double-Take, D-Link, EMC, Emerson, Fortinet, Golla, Huawei, igo, Infocus, IOMEGA, Imation, Juniper, Linksys, LG, Microsoft, Nuforce, Norton, Nikon, OKI, Philips, Panasonic, PC-Tools, QNAP, Ricoh, Radware, Symantec, Sandisk, Sanyo, Sangfor, Targus, VMware, Xerox, Western Digital, ZTE, Zyxel. 9

13 3) Smart Phone This represents Smart phone. In 2012, the company has distribute Smart Phone from 6 vendors as 1) Acer 2) Asus 3) Blackberry 4) HTC 5) Motorola 6) Samsung 2.2 IT Industry Outlook The International Data Corporation (IDC), a research firm, reported PC market survey result on January 10, 2013 ( #. UUfKBhxvWAi) that the fourth quarter of 2012 the total of PC delivered from worldwide manufacturers was 89.9 Million units, which decreased by 6.4% compared to the same quarter of It also showed that the whole year shipments was Million units, which decreased by 3.2% from last year, according to the growth of the smartphone and Tablet market which had been replacing the need in PC. In addition, the PC market had been shrinking due to the introduction of Microsoft's new operating system Windows 8 in the end of 2012, there was an alternative way for the users with the touching screen system instead of using the former mouse. This might delay some consumers decisions in purchasing PC. The contraction of the world PC market claimed to be the first time in more than 10 years as in the past, the PC market continuously grew. It was believed that the PC sales would be picked up in 2013, since the entrepreneurs had gradually introduced PC with Windows 8 to market. IDC reported about the smartphone market in 2012, that there were the deliveries of smartphones about Million units in the fourth quarter of 2012, which increased by 36.4% compared to the same quarter of 2011 and it was a 45.5% share of the total mobile phone market. This was the highest proportion ever since. The smartphone shipments were Million units in 2012, which increased from 2011 for 44.1% ( For the tablet market, IDC reported that the worldwide shipments in the fourth quarter of 2012 was at 52.5 Million units, which increased by 75.3% compared to the same quarter of 2011 ( containerid = prus #. UUfm9hxvWAg). In terms of the use of information and communication technology in households, the survey by the Office for National Statistics, Ministry of Information and Communication Technology,( showed that the percentage of households with computers increased from 24.7% in 2011 to 26.9% in 2012, along with other statistics in the table below. Percentage of households with computers usage Percentage of households with internet usage Percentage of population aged over 6 years and use computer Percentage of population aged over 6 years and use computer n/a Apart from the low rate in having computers in each household which offered chances in expanding continually, there were the other factors that could support the IT market to grow, as showed below: Windows 8 and the new form of PC Microsoft has introduced Windows 8 to the market in the late Windows 8 was an operating system that could be used with CPU both from Intel and ARM by using the small power. There was also a user interface which was able to use both the mouse and the touch screen. From this increased capability, PC makers introduced a new form of computer that integrated between a notebook and a tablet to meet the needs of the 10

14 user. If Windows 8 was popular, there would be a huge amount of demands in new PC with Window 8 and this would help expanding the IT market in The expansion of the smartphones The smartphone has been growing continuously in the market share for each operating system. IDC's survey found that in 2012, Android operating system was the most popular in the world market with a share market increased by 49.2% from 2011 to 68.8% in Operating System Units (Million Units) 2012 Market Share 2012 Android % ios % BlackBerry % Symbian % Windows Phone/ Windows Mobile % Others % Total % The growth of the tablet market Apart from the popularity of ipad in the tablet market, the project of the Tablet PC for Education in Thailand provided approximately eight hundred thousand of tablet PC for Grade 1 school children, in This made the Android OS grown a lot in The government continued this project and aimed to extend providing tablet to both Grade 1 and Grade 7 at the same time. So the amount of the tablet which had to be offered for this project would be about 1.6 Million units this year. This helped increasing in tablet demand in the market. Besides from the tablet in ios and Android, in 2013 from the introduction of Windows 8, it was expected that tablet with Windows 8 system would be more popular especially in the enterprise market. 3G Services From the auction of spectrum 2100 MHz for data communication speed wireless (3G) ended. It was expected that the company would start their service in mid The PC, tablet, and smartphone users would gain benefits from the use of such devices, which could be connected to the internet all the time. This would extend the use of the communication things and helped supporting the IT industry to grow further. Cloud Computing According to the increased popularity of computer applications, the cloud, which let the users to have the option in using a computer system without having to purchase a computer or program. The cloud system had been more popular both in terms of public cloud and private cloud which many organizations started improving their own data center to be up to date, more convenience and expanded their own capability faster by using the technology of cloud computing trends. The cloud computing enables businesses to improve their system to make self-organization in the IT industry to grow further. 2.3 Competition In many years ago, the company has grown on total revenue consistently every year. In 2012, total revenue of the Company was 22,091 Million Baht. Although the company will have total revenues down 2.7% in 2012, but the decrease caused from 3 Smart Phone Vendors which could not compete in Smart Phone Market. Sales from 3 Smart Phone Vendors decreased from 8,270 Million Baht in 2011 to 5,061 Million Baht or decreased by 3,209 Million Baht while sales of IT products, exclude Smart Phone from 3 Smart Phone Vendors, increased by 17%, which represents the growth of IT industry and the competitiveness of the company. 11

15 Total Revenues Total Revenues (Million Baht) 25,000 20,000 15,000 10,000 5, Total Revenues 5,688 6,752 8,760 9,295 10,492 12,087 13,950 16,584 22,713 22,091 Improvement of Basic Infrastructure Since 2011 to 2012, the company has improved 4 main infrastructures as follows: 1) Implement and Upgrade of new SAP version from 4.6C to ECC6 with added capabilities in many areas. This is an ongoing project to improve SAP over the next few years. 2) To Relocate and Expansion of main warehouse from 4,000 square meters to 10,000 square meters. After expansion, the company has to invest in other equipment and rework more to the appropriate warehouse with more space. 3) To Relocate and Expansion of Head Office from 1,800 square meters to square meters and 4) Expansion of 2 more Branches to 6 Branches. This improvement of basic infrastructure, expenses will be increased at first, but in the long term, they will be the basis of the company to expand continuously. Business Unit Management Apart from the improvement of basic infrastructures, the company has tried to reorganize company s business into business units. The business units are divided into sub units like subsidiary companies by focus in different type of products and services. There are 6 business units that are several differences as follows: Business Unit Products Strength Channel Commercial BU Consumer BU Phone BU Value Added Commercial BU Value Added Consumer BU Apple BU APC, HP, IBM, Infocus, Lenovo, OKI, Ricoh, Xerox Acer, Asus, Brother, HP, Samsung, Toshiba, Zyxel Acer, Asus, BlackBerry, HTC, Samsung, Sharp, ZTE Brocade, EMC, HP, Juniper, Symantec, VMware igo, Norton, Nikon, Olympus, Sandisk, Targus imac, Macbook, ipod, ipad Efficiency, Cost Advantage, Speed, Work Process Improvement, Provide Customer Financing Efficiency, Cost Advantage, Speed, Work Process Improvement Efficiency, Cost Advantage, Speed, Work Process Improvement Solution sales, Having skilled salesperson to help customers, Technical support after sales Display Products, Provide sales promoter, Inventory Management Display Products, Provide sales promoter, Inventory Management 12 Corporate Reseller, System Integrator IT Retailer Phone Retailer Selected Corporate Resellers, System Integrator Selected IT Retailer Apple Authorized Reseller

16 For Phone Business Unit in 2013, the company has appointed from more Smart Phone Vendors by focus low cost products into new market. In the first quarter of 2013, Smart Phone from ZTE and Sharp are launched with starting price at 4,900 Baht. In addition, the company will set up Consumer Electronic Business Unit to distribute other product group, not IT group such as Smart TV and Digital Music. The company is in the process of seeking the proper products. Consumer Electronic Group will focus on 2 new channels, that is, Consumer Electronics and Premium Audio Channels. Market Coverage The company has widely dealer networks. In 2012, the company distributed to more than 5,000 dealers. With a huge number of dealers, it caused of stability in sales and it is very essential to the company to expand its business by procure more products and distribute to these dealers that always purchase products from the Company. The diversification of products for sale The company has been trusted by leading IT product manufacturers more than 70 companies and appointed as their distributor in Thailand and has been contacted more from several manufacturers to appoint as distributor. The diversification of product group supported the company to supply products to customers continuously. In the year of 2013, the company will set up one more Consumer Electronic Business Unit to test market for Consumer Electronic Products by start with Smart TV and Digital Music system that is believed to be more popular. This system has to be connected to networks which the company can use the existing channels to distribute our products easily or can sell our products as a solution to Consumer Electronics channel with more advantages. Working system and corporate culture The Company s working system is efficient and continuously improved. The company has invested in several system to boost work effectiveness such as SAP ERP, Lotus Notes Electronic Workflow, Avaya s Call center, IBM s E-Learning, etc. The company also has become corporate education which enhances the company s competitiveness as well as helps the company to adjust to any change that may occur. Recognition in the importance of Good Corporate Governance The company has recognized in the importance and has adopted the principals of Good Corporate Governance in 5 categories namely, 1) Rights of Shareholders 2) Equitable Treatment of Shareholders 3) Role of Stakeholders 4)Disclosure and Transparency 5) Board Responsibilities. From the survey of 2009 to 2012 Good Corporate Governance of listed company from IOD, the company s assessment was in excellent, highest level. That represents the emphasis of Good Corporate Governance which supports sustainable growth as well. Having Qualified Employees The company has a reputation for having qualified employees that have always been needed from both vendors and competitors. The company has a good process for human resource management by starting from recruitment with knowledge testing, good academic, interviewing and Reference Checking, Training and Development, Appropriate compensation that varied to company goal, adequate supply of high quality equipment and effective office solutions, providing the career opportunity for employees to work and grow, Having the fairness Policy with other parties, Encourage employee to participate in decision making, Disclosure about facts to employees, Internal communicate widely, etc, Those things are built for a long time that cause of having qualified and dedicated employees which is the essential resources to develop our business growth. 13

17 2.4 Revenue Structure In 2012, the total revenues from sales of the company were Baht 21,852 Million, decreased by 2.5% from previous year which can be categorized in 3 product groups. The sales in the past five years were shown in table below: 25,000 Sales (Million Baht) 20,000 15,000 10,000 5, Smartphone 1,127 1,312 3,253 8,256 5,590 Peripheral 5,546 6,045 6,422 6,453 8,022 System 5,223 6,435 6,678 7,705 8,240 The proportion of each categories and its changes were shown below System Peripheral Smartphone Total Sales ,223 5,546 1,127 11,895 Proportion 43.9% 46.6% 9.5% ,435 6,045 1,312 13,793 Proportion 46.7% 43.8% 9.5% Changes 23.2% 9.0% 16.4% 15.9% ,678 6,422 3,253 16,354 Proportion 40.8% 39.3% 19.9% Changes 3.8% 6.2% 147.9% 18.6% ,705 6,453 8,256 22,414 Proportion 34.4% 28.8% 36.8% Changes 15.4% 0.5% 153.8% 37.1% ,240 8,022 5,590 21,852 Proportion 37.7% 36.7% 25.6% Changes 6.9% 24.3% -32.3% -2.5% System System represents all types of computer hardware from Server, Desktop, Notebook, Tablet, Hybrid (Notebook+Tablet) exclude Smart Phone. Peripheral This represents peripheral and others that not classified to be above computer hardware, and services such as Supply, Monitor, Projector, Scanner, Printer, Hard Disk, Software, Memory, Keyboard, Mouse, Bag, Network, etc. Smartphone This represents Smart phone. 14

18 2.5 Risk Factors 1) Risk from reliance few vendors In 2009, the company had share from the biggest vendor at 41% of total sales. The company has entrusted from other vendors to be distributor more, that was a result to reduce share from the biggest vendor to 17.5% in Although risk from reliance on vendor will be reduce but 42% of total sales were from only 3 vendors of totally over 70 vendors which the company still manage this risk continually as follows: Sales from the biggest vendors to Total sales 41% 31% 26% 18% Maintain a good relationship with Manufacturers The Company has several investments to improve efficiencies. To be a good partner with vendors, the company is a major customer with vendors also. Our relation is two-ways relation which both are important partner of each other. Portfolio expansion The Company continually expands our portfolio with other products. In 2012, the company is appointed from essential vendors, which are Brother, LG. Moreover, the company will continue to increase more and more in 2013 onward Improvement to work effectively The company has continually improved to be an important corporate and key in the IT industry. For example: Market Coverage In 2012, the Company has dealer network that consists of over 5,000 dealers in the IT sector, all of which have opened accounts and purchased products from the company (In 2009, there are 4,450 dealers and increased to 4,804 dealers in 2010, over 5,000 dealers from 2011 onwards respectively). The company can assist vendors to distribute more quickly to over 5,000 dealers with efficiency. Product storage and distribution The Company has an effective and excellent inventory system. The abilities to store product for manufacturers and quick distribute product to the customer from a little amount to the large amount. In Bangkok area, orders before am the product will be delivered within a same day while its will be delivered on the next day for orders after am as well as cities out of Bangkok. These bring a lower cost than each manufacturer delivers their own products. Management of small dealers Our Credit teams are able to manage small dealers effectively and now more than 2,500 dealers having credit lines used for purchasing our products immediately. This will supports vendors providing credit and selling to small dealers more quickly. From above, many vendors would like to appoint company to be their distributor more and more including with existing and new vendors. The company has a policy to expand business by increase new products to reduce risk from reliance on few vendors. 2) Risk from changes in technology which impact on inventory As our core products are computers and peripherals which have fast change in term of technology, the company has faced to a risk of obsolete inventory which could damage the business. The company has the following steps to manage risk as follows: Inventory management to be low level The Company has a policy to keep inventory in a range from 15 to 30 days by product type. The high risk products will keep no more than 15 days and the low risk products can store up to 30 days that was a limited risk of inventory. If the company faced the problem of fewer sales, the company can solve it quickly because of not much product left on hand. Inventories compared with sales are as follows: 15

19 Inventory (M.Baht) ,152 3,171 1,191 Average Day Sales (Days) Delegate to Specialize Product Manager The Company delegates Product Manager to manage its product in terms of ordering, inventory management and marketing. This has provided specialist to focus on individual product brands. When the problem occurred, it can be solved quickly. The company realizes that inventory management is key factor in the evaluation of Product Manager. Inventory Reserve for obsolete stock The Company monthly sets an allowance for obsolete and defective stock by reviewing the aging of inventory. This reserve is sufficient. When there is inventory on hand, reserve is provided by reviewing the aging of inventory. So, profit that shown in financial statement is always deducted from inventory burden. Data System The Company has invested in warehouse management system on SAP ECC6 that can be provided inventory information accurately and quickly with various reports to manage inventory effectively such as Inventory Aging report by items, inventory turnover by items, etc. Besides, systems can alert long outstanding inventory in database and each product manager has to record the action plan to solve problems. Totally, the operators and related person realize accurate information of inventory at all times. Management Our management team has been focusing on the regularly inventory management. The top management has conducted the weekly meeting with the product manager to review the value of total inventory and inventory aging. These allow the company to spot the trends of the industry and be able to set immediately the solutions for the coming changes that leads to the reductions of the damage of the inventory. Besides, these strategies could be built as one of the company cultures in term of the inventory prioritization. 3) Risk from foreign currency The company imports some of products in USD currency while the products will distribute in the country in Baht currency. To protect exchange rate risk, the company purchases forward contract at least 50% of purchase orders by receiving advice from the relevant financial institutions on a regular basis how much forward contract be purchased. 4) Risk from competition and low gross margin It Distributor is highly competitive and its margin is low but IT industry is large and high growth. In the past several years, growth is more than 10% at all times. In this industry, price may be used as a primary strategy in the competition. If it happens, the company may have to reduce price to compete which may affect company s performance. The company is trying to mitigate this risk by increasing our product range, which in turn diversifies our sales. If the problems occur, the impact would be confined to certain areas. Moreover, the Company tries to focus on the development and promotion of products for which the markets are not particularly large but which offer high profits and low competition to help sustain profits overall. At the same time, the Company has sold to many dealers that over 5,000 dealers results in a diversification of sales. Because It distributor requires a lot of funds, there are few opportunities for the newcomers enter into. Conversely, the Company believes that some distributors that are not competed will be out of the market or merge among distributors. In 2012, the Company has reorganized our business structure by setting up 6 Business Units that could be differently managed. Two of the six are Value Added business units that manage high margin products by increase value added services in. From the expansion in this area will reduce risk from price competition. 5) Risk from Accounts Receivable The company has mostly the credited sales. The majority of our dealers could not provide collateral covered all their debts including many dealers are small companies which not much more funding. If our accounts 16

20 receivable are nonperforming and unable to pay on scheduled, it may effects our liquidity, working capital or the result of the operation. However, the company thoroughly reviews credit status before credit given to our dealers and credit control department is separate from sales to ensure that credit is considered independently. In order to reduce the risk of bad debt, in 2012,, the company has bough trade insurance to cover some part of debts and also set an allowance of doubtful accounts in order to accurately reflect financial status. 6) Risk from working capital From the structure of IT distribution, cash cycle is the range of 30 to 50 days. Working capital always requires more if the company s revenue growth increase more than 15% which is our risk and burden to provide more working capital also. As of December 31, 2012, the company has short term loan from financial institutes in amount of 2,610 Million Baht. If all financial institutes call loan back simultaneously, the company may face financial problem. From being to be listed company, the Company has options to increase more working capital. Moreover, the Company has diversified in lending from several financial institutions to reduce risk of reliance on any one major financial. 7) Risk from reliance on staff IT is a business which requires IT knowledge staff to join with. Besides, the Company recruits experienced staff to join with the Company, the Company still have training continuously to maximize the effectiveness of our customer services. If capable and skillful staff resign from the company, it may impact to business operations and ability to expand in short term and additional cost required in training new staff for replacement and issues the warrants for the employees to purchase stock option at special price by exercisable based on the service period to motivate the feeling of the ownership which leads to the better performance and longer service period. Besides, the company uses many strategies to manage the risk of the dependency on human resources. For example, the company separates sale department off marketing department which allows the customers contact with 2 division instead of 1 to avoid the risk of the dependency on human resources. Also, the company has improved the working system by applying more the information systems such as ERP system of SAP ECC6 and the Electronic Workflow of Lotus Notes., This leads to the smoothly, speedy and accurately working structure with the warning system for the errors and reduce some reliance on the human resources. Additionally, the company has set the management structure by diversifying the responsibility to many executives and substituting the work with the similar employees performance in many levels to support the decrease of the reliance of human resources 2.6 Operating Assets 2.6.1) Equipment Type of Assets Ownership (Own/Lease) Leasehold Improvements Own Net Book Value (M.Baht) Computer&Office equipment Own Fixture&Fixtures Own Vehicles Own/Lease Total Less Accumulated Depreciation (125.20) Net Equipment Note: The above net assets are M.Baht under the ownership of the Company and 2.32 M.Baht under financial lease which are not any collateral or obligation and no assets that are not performed. 17

21 2.6.2) Intangible Assets Type of Assets Ownership (Own/Lease) Software licenses Own Total Less Accumulated Amortisation (34.63) Net Intangible Assets Note: The Company has no patents, copyright, and trademark 3. History of Capital Increases and Dividends Payment for the Past Three Years 3.1) History of Capital Increases for the Past Three Years Net Book Value (M.Baht) Date Previous New Registered Paid-up Registered Paid-up Jan ,000, ,174,100 Apr ,000, ,174, ,174, ,174,100 Apr ,174, ,174, ,174, ,174,100 Jun ,174, ,174, ,174, ,795,850 Dec ,174, ,795, ,174, ,543,175 Jun ,174, ,543, ,174, ,172,150 Dec ,174, ,172, ,174, ,183,625 May ,174, ,183, ,000, ,183,625 May ,000, ,183, ,000, ,301,970 Jun ,000, ,301, ,000, ,267,820 Dec ,000, ,267, ,000, ,465, ) Dividend Payout Policy The Company has established a policy to distribute dividends at a rate of approximately 40 percent of net profit after tax and legal reserve. The Board has authority to consider the exemption or changes to such policies from time to time under such conditions that the operation would be most beneficial to the shareholders as a reserve for loan repayment, funding for the expansion of the Company or in the situation of market changes which may affect the Company s future business. The Company has not determined the dividend payout ratio of the subsidiaries. The dividend payment will depend on the performance of each company year by year. 3.3) History of Dividend Payments for the past three years Date of Payment Type of Dividends Dividend Amount (Per share) 29 April 2010 Cash Dividend May 2011 Cash Dividend May 2012 Cash Dividend May 2012 Stock Dividend

22 4. Board of Directors, Management and Top 10 Major Shareholders 4.1 Board of Directors and Subcomittees Board of Directors Chairman : Mr.Suwit Chindasanguan Director : Mr. Somchai Sirivichayakul Rojanasak Chomvilailuk, PhD Mr.Lim Hwee Hai Mr. Lim Kia Hong Mr. Somchai Sittichaisrichart Mr. Sombati Pungsrinont - Independent Director - Independent Director - Independent Director - Non-Executive Director - Non-Executive Director - Executive Director - Executive Director Audit Committee Chairman : Director : Rojanasak Chomvilailuk, PhD Mr. Somchai Sirivichayakul Mr.Suwit Chindasanguan - Independent Director - Independent Director - Independent Director Remuneration and Nomination Committee Chairman : Mr. Somchai Sirivichayakul Director Rojanasak Chomvilailuk, PhD Mr.Lim Hwee Hai Mr. Somchai Sittichaisrichart Risk Management Committee Chairman : Mr.Lim Hwee Hai - Independent Director - Independent Director - Non-Executive Director - Executive Director - Non-Executive Director Director : Management 4.2 Management Mr. Sombati Pungsrinont Rojanasak Chomvilailuk, PhD Mr. Somchai Sittichaisrichart Mr. Sombati Pungsrinont - Executive Director - Independent Director - Managing Director - Executive Director List of Management as of 30 April, 2013 are as follows: 1) Mr.Somchai Sittichaisrichart Managing Director 2) Mr.Sombati Pungsrinont Executive Director 3) Ms.Suwathip Pornsuwannapha Financial Controller 4) Ms.Wareeporn Sittichaisrichart Operation Manager 5) Mr.Thanawat Pringwanich General Manager of Commercial Division 6) Mr.Panit Srikrekkrit General Manager of Movie & Music Division 7) Mr.Thana Thanapase General Manager of Consumer Division 8) Mr.Kaival Boonsaith General Manager of Value Added Commercial Division 19

23 4.3 Top 10 Major Shareholders List of top 10 major shareholders as of 31 December 2012 are as follows: Number Name of Shareholder Shareholding % of Shares SIS TECHNOLOGIES (THAILAND) PTE. 109,725, % 1 LTD. Total Shares of Sittichaisrichart's Family are 34,023, % 2 comprised of - Somchai Sittichaisrichart (Managing 6,266,130 Director) - Wareeporn Sittichaisrichart (spouse) 6,242,160 - Pete Sittichaisrichart (son) 8,314,790 - Ploy Sittichaisrichart (daughter) 13,200,000 Total Shares of Pungsrinont's Family are 22,773, % 3 comprised of - Sombati Pungsrinont (Executive 13,966,020 Director) - Suranee Pungsrinont (spouse) Chanont Pungsrinont (son) 4,126,300 - Thanakorn Pungsrinont (son) 3,850,000 - The Body of Person Suthana by Suranee 830,940 Pungsrinont 4 Sompong Cholkadeedumrongkul 8,070, % 5 Thai NVDR Co.,Ltd. 2,548, % 6 Synnex (Thailand) Public Company Limited 2,647, % 7 CITIBANK NOMINEES SINGAPORE PTE 2,702, % LTD-UBS AG LONDON BRANCH-NRBS IPB CLIENT SEG 8 Viroj Kosoltanawong and Rakchanok 2,147, % Lumadokpan by Viroj Kosoltanawong 9 Viparat Lertsiwaporn 1,796, % 10 Wisut Sirowet 1,700, % Total Shares of top 10 major shareholders 188,133, % Total Shares 233,465,770 Remark SiS Technologies (Thailand) Pte. Ltd. is a Investment Holding Company by Mr.Lim Hwee Hai and Mr.Lim Kia Hong are directors and both are directors of SiS Distribution (Thailand) Public Company Limited. 20

24 A. Summary of Financial Statement Statement of financial position Part 3 Historical Financial Information for the past 3 years Unit: in Thousand Baht 31 December December December 2010 Amount Percent Amount Percent Amount Percent Assets Current Assets Cash and cash equivalents 77, , , Trade accounts receivable 2,596, ,836, ,017, Inventories 1,191, ,170, ,151, Other current assets 476, , , Total current assets 4,340, ,754, ,339, Non-current assets Other long-term investments 8, , , Long-term trade account 29, , receivable Equipment 141, , , Intangible assets 42, , , Other non-current assets 11, , , Total non-current assets 232, , , Total assets 4,573, ,018, ,473, Liabilities Current Liabilities Bank overdrafts and shortterm loans 2,610, ,242, , Trade accounts payable 1,190, ,274, , Current portion of finance 1, , , lease liabilities Other payables 35, , , Income tax payable 21, , , Other current liabilities 165, , , Total current liabilities 4,025, ,711, ,228, Non-current liabilities Finance lease liabilities - 1, , Provision for cost of assets 3, , dismantlement Employee benefit obligations 27, , Total non-current liabilities 31, , , Total liabilities 4,057, ,739, ,231, Equity Issued and paid-up share capital 233, , , Share premium 176, , , Retained earnings- 21, , , Appropriated Retained earnings- 84, , , Unappropriated Total equity 516, ,279, ,242, Total liabilities and equity 4,573, ,018, ,473,

25 Statement of comprehensive income Unit: in Thousand Baht Amount Percent Amount Percent Amount Percent Income Revenue from sale of goods 21,851, ,413, ,405, Revenue from rendering of 40, , , services Other income 199, , , Total income 22,091, ,712, ,584, Expenses Cost of sale of goods 21,211, ,378, ,451, Cost of rendering of services 18, , , Selling expenses 445, , , Administrative expenses 978, , , Financial costs 100, , , Total expenses 22,754, ,440, ,161, Profit(loss) before income tax (662,801) (3.00) 272, , expense Income tax expense 75, , , Profit(loss) and (738,663) (3.34) 143, , comprehensive income for the year Basic earnings(loss) per share (Baht) (1) (3.17) Note: (1) Basic earnings per share is calculated by dividing net profit for the year by the weighted average number of common shares in issue during the year. Statement of cash flows Cash flows from operating activities Unit: in Thousand Baht Profit (loss) for the year (738,663) 143, ,282 Adjustments for Depreciation and amortisation 35,470 28,631 17,468 Interest income (7,209) (2,629) (25,240) Finance costs 100,860 58,116 38,588 Unrealised (gain) loss on exchange (1,084) 55, (Gain) loss on disposal of equipment 315 2,130 (147) Loss on impairment of other long-term investments - 51,030 - Bad debts and doubtful debts expense 611,512 35,314 43,541 Allowance for obsolete and defective stocks (reversal) (54,427) 118,554 (7,584) Provision for defined benefit obligation 4,547 3,951 - Income tax expense 75, , ,445 27, , ,041 23

26 Statement of cash flows (Cont) Unit: in Thousand Baht Changes in operating assets (Increase) Decrease Trade accounts receivable (771,468) 145,524 (237,364) Inventories 2,033,831 (2,137,608) (224,833) Finance Lease - - 1,626 Other currents assets (513,151) (434,348) (57,409) Long-term trade accounts receivable 28,206 (57,425) - Other non-current assets 2,830 (4,639) 9,806 Changes in operating liabilities Increase (Decrease) Trade accounts payable (1,081,275) 1,248,395 89,865 Other payables 3,754 1,077 (26,707) Other current liabilities 23,867 (32,092) 80,693 Income tax paid (59,231) (186,543) (95,575) Net cash provided by (used in) operating activities (305,454) (835,244) 30,143 Cashflows from investing activities Interest received 7,209 2,629 25,240 Net cash outflow on acquisition of other long-term investment - (8,571) - Purchase of equipment (44,127) (104,573) (23,412) Sale of equipment Purchase of intangible assets (6,225) (6,522) (20,076) Net cash provided by (used in) investing activities (42,888) (116,924) (17,869) Cashflows from financing activities Interest paid (99,193) (58,083) (38,404) Dividends paid to owners of the Company (31,678) (104,244) (81,270) Net proceeds from bank overdraft and loan from financial institutions 366,559 1,241,735 68,472 Finance lease payments (1,640) (1,635) (906) Proceeds from issue of ordinary shares 17,036 17,036 28,784 Net cash provided by financing activities 240,991 (1,094,809) (23,324) Net increase (decrease) in cash and cash equivalents (107,351) 142,641 (11,050) Cash and cash equivalents at beginning of year 185,252 42,611 53,661 Cash and cash equivalents at end of year 77, ,252 42,611 24

27 B. Financial Ratio Liquidity Ratio Current Ratio (time) Quick Ratio (time) Cash Ratio (time) (0.07) (0.24) 0.01 Account Receivable Turnover (time) Average Collection Period (day) Inventory Turnover (time) Average Day Sales (day) Account Payable Turnover (time) Average Payment Period (day) Cash Cycle (day) Profitability Ratio Gross Profit Margin from Sales (1) (%) Gross Profit Margin (%) Operating Profit Margin (%) (2.57) Net Profit Margin (%) (3.34) Operating Cash Flows to Operating Profit Ratio (%) (252.96) 6.53 Return of Equity (%) (82.27) Efficiency Ratio Return on Assets (%) (13.95) Return on Fixed Assets (%) (382.42) Total Assets Turnover (time) Leverage Ratio Total Debt to Equity Ratio (time) Total Debt to Total Assets (time) Interest Coverage (time) (3.03) (14.37) 0.78 Cash Flow Coverage (Cash Basis) (time) (0.18) Dividend Payout (%)

28 Enclosure 4 Power of Attorney For subscription of the Newly Issued ordinary shares of SiS Distribution (Thailand) Public Company Limited Written at Date Month Year I, (the Authorizer )Nationality Identification number/ Passport Number/ Tax registration number Residing at No. Road Subdistrict District Province Postal code as a shareholder of SiS Distribution (Thailand) Public Company Limited (the Company ) holding a total number of shares and is entitled to subscribe for the Company s Newly Issued ordinary shares in the Rights Offering in the amount of shares according to the Certificate of Subscription Entitlement issued by the Share Registrar of the Company, hereby authorize the following person Age Years Identification number/ Passport Number Residing at No. Road Subdistrict District Province Postal code (the Attorney ) as my attorney as authorized by law to act for and on behalf of the Authorizer to conduct the subscription of the Newly-Issued ordinary shares of the Company in the amount of shares and to perform any necessary and appropriate actions in relation to the subscription of the Newly-Issued ordinary shares. Any action performed by the Attorney in accordance with this Power of Attorney shall be deemed as if performed by I, the Authorizer, myself. Signed Authorizer ( ) Signed Attorney ( )

29 Enclosure 5 Map of the Vanue for Subscription and Payment for Newly Issued Ordinary Shares SiS Distribution (Thailand) Public Company Limited