STOCK

Treasury stock is a �nancial instrument, a tool for liquidity management at the time when the company’s share price is below its fundamental value while its retained earnings and �nancial liquidity are high and the company has no need for fund raising during that period when treasury stock is being acquired.

The company has positive retained earnings: Share repurchasing can be conducted by less than the amount of total retained earnings. Part of the �rm’s retained earnings should be allocated as a reserve equivalent to the amount paid for share repurchasing. The reserve should be maintained until all repurchased shares are resold, or the company reduces capital by reducing shares unsold, as the case may be.

The company has excess liquidity, so that over the next six months, the company is able to repurchase shares without any impact on its debt servicing ability.

The company’s free �oat shares are equal to or higher than SET requirements: That is, the free �oat shares are not less than 15 percent of paid-up capital and 150 retail shareholders.

Treasury stock

Quali�cations checklist

Shares repurchase methods

Share resale methods

1

2

Repurchase via the main board: The repurchase price must not be over 115 percent of the average closing price of the previous �ve trading days. (Under this method, shares repurchased must not be over 10 percent of paid-up capital.)

Repurchase via a general o�er (GO); this is more �exible in terms of o�ering price and quantity, as market prices are not under the �rm’s control. Using general o�er method, the company can set up the repurchase project size more or less than 10 percent of the paid-up capital.

The company must disclose their treasury stock program at least 14 days prior to implementation. If the program is processed via SET’s main board, it must be completed within six months. If the program is processed via general o�er, it must be conducted for at least 10 days and not over 20 days.

1

2

Resale via the main board: The resale price must not be lower than 85 percent of the average closing price of the previous �ve trading days.

Resale via a public o�ering (PO): This method requires the approval from the Securities and Exchange Commission (SEC).

The company must disclose the company board resolution at least 14 days prior to the resale.

1

23

�

�

�

�

�

�

�

Issues for consideration / FAQ

Does a treasury stock program require shareholders’ meeting resolution?

If the company needs to repeat the treasury stock program, what should they do?

If several treasury stock programs implemented one after another, how can the accumulated amount of repurchased share be calculated?

Yes, share repurchase program needs the approval from shareholders. However, the company

When must the company avoid share repurchases?

If the company is undergoing a treasury stock program, can it increase capital?

Repurchasing/resale limitations include:

Cannot be done when the company is disclosing information that is sensitive to price movement or may impact its share price or shareholder bene�ts, e.g., before disclosure of �nancial statements, before paying dividends, being taken over or when there are facts showing that the company is going to be taken over.

Cannot be conducted with connected persons.

Cannot be sent through Big Lot. (Currently, Big Lot method is now called Trade Report)

The company can repeat the program one year after the end of the previous program.

The total number of share repurchased from di�erent programs should be combined in carrying out calculations.

The company has to ensure that it does not need a capital increase while it is conducting the treasury stock project, as regulations do not allow a capital increase during that time; the �rm must resell all repurchased shares before a new capital increase. Additionally, the program may reduce stock trading liquidity in the stock market, decreasing free �oat shares.

which has indicated in the company’s articles of association can start the repurchase program by using only board resolution. The program approved by board must not exceed 10% of paid-up capital. As such, it is more �exible to specify or make adjustmentin articles of association beforehand.

1

2

3

Bene�ts of treasury stockFor the

Company

ForShareholders

Adds demand for the company’s shares, which could boost the company share price.

Reduces the number of free �oat shares, consequently increasing earnings per share.

Can be a �nancial instrument in giving returns to shareholders by e�ective �nancial liquidity.

Generates capital gain for the company. If the company’s management is con�dent of futureperformance and believes that the company’s share price is signi�cantly lower than its fundamental value, share resale in a proper time will generate pro�table returns.

Boosts earnings per share and return on equity (ROE). After the listed company repurchases shares,its number of free �oat shares will decline. The repurchased shares will not be counted in earningsper share calculation.

Boosts dividends per share because repurchased shares are not included in dividend per share

calculation.

The higher earnings per share may accordingly boost share prices at the current price-to-earningsratio (P/E).

Key procedures

Treasury stock report If repurchase via SET: within 9:00 am. of the business day following share repurchase/ resale date If via GO: within 5 business days from repurchase/ resale date

Repurchasing period Via SET main board: ≤ 6 months Via GO: ≥10 days but ≤ 20 days

Disclose board resolution to SETwithin the date of resolution, orbefore 9:00 am. of the nextbusiness day.

Disclose at least 14 days before actualrepurchase.

Resale price ≥ 85 %of average closing price

of previous 5 trading days

Disclosure the resolution toSET within the resolution date or9:00 am. of the next business day

The �rm can start the new treasury stockprogram again after 1 year after the endof the latest program.

Disclose board resolution at least 14 daysbefore resale of repurchased shares

≤ 7 days following registeringcapital reduction at MOC

Not exceeding 10% Exceeding / Not Exceeding 10%

Repurchase price ≤ 115% of average closing price of previous 5 trading days

�

�

��

Seek shareholders’ resolution approved(unless the company’s article of associationspecify that share repurchasing can be done

using a board resolution alone, and therepurchase is ≤10% of paid-up capital)

The company disclosestreasury stock program.

Repurchasecommencement date

Board of directorsresolves to resell

repurchased stocks

Share resalecommencement date

The date that all shares areresold / End of resale period

Register changed registered capital withMinistry of Commerce (MOC)

Disclose capital reduction registrationto SET

Program completed

The company reports capitalreduction + reduces the

unsold repurchased shares.

The end of sharesrepurchasing

(the last date ofrepurchasing period)

Repurchase from SET’smain board

Resell on SETmain board

Resell via PublicO�ering withSEC approval

General o�ering (GO)

Company submitsrepurchase o�er to

shareholders and SET.≥ 10 days

After 6 months

Within 3 years

Sold out

Not sold out

≤ 14 days

��

Issues for consideration / FAQ (continued)

How can we manage capital gains from treasury stock programs?

Capital gains from treasury stock cannot be booked in the income statement. However, a surplus between the share resale and repurchase values will be added to shareholders’ equity as a surplus in repurchase, while a de�cit between these two values will be deducted from retained earnings

How do companies usually conduct treasury stock programs?

During 2001-2013, listed companies generally conducted treasury stock programs through SET’s main board, where transaction �exibility is high.

“We conducted our treasury stock program while we had a high amount of cash and retained earnings, but this value was not re�ected in our stock price. We studied several alternatives and �nally chose a treasury stock program to add value over time and reduce excessive liquidity. When the program ended, our stock price rose, while retail shareholders were pleased about the outcome.”

Anant KaewruamvongsChief Executive O�cer and Managing Director

CS Loxinfo PCL

“Our company decided to carry out a treasury stock program in 2008 while the economy was su�ering from the economic crisis. At that time, the SET index was on a downward trend. Our business was doing �ne but our stock price did not re�ect the company’s actual value, with a price to book value of 0.69x, while the average price to book value of SET was 1.5x. The company wanted our stock to re�ect its fundamental value and sought to restore investor con�dence by choosing this �nancial tool. As a result, the company’s share price increased close to SET’s average price. About three years later, our shares were resold at higher prices than our repurchasing cost, generating higher returns for all shareholders.”

Viriya AmpornapakulPresident

Paci�c Pipe PCL

Related laws/regulations• Public Limited Companies Act (B.E. 2535) and ministerial regulations, 2001 Noti�cation of the Board of Governors of The Stock Exchange of Thailand, No. Bor.Jor./Por.11-04 Re: Disclosure of Information and Other Acts of a Listed Company Repurchase Their Own Shares and Disposes of Such Repurchased Shares, 2001.

62 The Stock Exchange of Thailand Building Ratchadapisek road, Klongtoey, Bangkok 10110 2014, January

STOCK

Treasury stock is a �nancial instrument, a tool for liquidity management at the time when the company’s share price is below its fundamental value while its retained earnings and �nancial liquidity are high and the company has no need for fund raising during that period when treasury stock is being acquired.

The company has positive retained earnings: Share repurchasing can be conducted by less than the amount of total retained earnings. Part of the �rm’s retained earnings should be allocated as a reserve equivalent to the amount paid for share repurchasing. The reserve should be main tained until all repurchased shares are resold, or the company reduces capital by reducing shares unsold, as the case may be.

The company has excess liquidity, so that over the next six months, the company is able to repurchas shares without any impact on its debt servicing ability.

The company’s free �oat shares are equal to or higher than SET requirements: That is, the free �oat shares are not less than 15 percent of paid-up capital and 150 retail shareholders.

Treasury stock

Quali�cations checklist

Shares repurchase methods

Share resale methods

1

2

Repurchase via the main board: The repurchase price must not be over 115 percent of the average closing price of the previous �ve trading days. (Under this method, shares repurchased must not be over 10 percent of paid-up capital.)

Repurchase via a general o�er (GO); this is more �exible in terms of o�ering price and quantity, as market prices are not under the �rm’s control. Using general o�er method, the company can set up the repurchase project size more or less than 10 percent of the paid-up capital.

The company must disclose their treasury stock program at least 14 days prior to implementation. If the program is processed via SET’s main board, it must be completed within six months. If the program is processed via general o�er, it must be conducted for at least 10 days and not over 20 days.

1

2

Resale via the main board: The resale price must not be lower than 85 percent of the average closing price of the previous �ve trading days.

Resale via a public o�ering (PO): This method requires the approval from the Securities and Exchange Commission (SEC).

The company must disclose the company board resolution at least 14 days prior to the resale.

1

23

�

�

�

�

�

�

�

Issues for consideration / FAQ

Does a treasury stock program require shareholders’ meeting resolution?

If the company needs to repeat the treasury stock program, what should they do?

If several treasury stock programs implemented one after another, how can the accumulated amount of repurchased share be calculated?

Yes, share repurchase program needs the approval from shareholders. However, the company

When must the company avoid share repurchases?

If the company is undergoing a treasury stock program, can it increase capital?

Repurchasing/resale limitations include:

Cannot be done when the company is disclosing information that is sensitive to price movement or may impact its share price or shareholder bene�ts, e.g., before disclosure of �nancial statements, before paying dividends, being taken over or when there are facts showing that the company is going to be taken over.

Cannot be conducted with connected persons.

Cannot be sent through Big Lot. (Currently, Big Lot method is now called Trade Report)

The company can repeat the program one year after the end of the previous program.

The total number of share repurchased from di�erent programs should be combined in carrying out calculations.

The company has to ensure that it does not need a capital increase while it is conducting the treasury stock project, as regulations do not allow a capital increase during that time; the �rm must resell all repurchased shares before a new capital increase. Additionally, the program may reduce stock trading liquidity in the stock market, decreasing free �oat shares.

which has indicated in the company’s articles of association can start the repurchase program by using only board resolution. The program approved by board must not exceed 10% of paid-up capital. As such, it is more �exible to specify or make adjustmentin articles of association beforehand.

1

2

3

Bene�ts of treasury stockFor the

Company

ForShareholders

Adds demand for the company’s shares, which could boost the company share price.

Reduces the number of free �oat shares, consequently increasing earnings per share.

Can be a �nancial instrument in giving returns to shareholders by e�ective �nancial liquidity.

Generates capital gain for the company. If the company’s management is con�dent of futureperformance and believes that the company’s share price is signi�cantly lower than its fundamental value, share resale in a proper time will generate pro�table returns.

Boosts earnings per share and return on equity (ROE). After the listed company repurchases shares,its number of free �oat shares will decline. The repurchased shares will not be counted in earningsper share calculation.

Boosts dividends per share because repurchased shares are not included in dividend per share

calculation.

The higher earnings per share may accordingly boost share prices at the current price-to-earningsratio (P/E).

Key procedures

Treasury stock report If repurchase via SET: within 9:00 am. of the business day following share repurchase/ resale date If via GO: within 5 business days from repurchase/ resale date

Repurchasing period Via SET main board: ≤ 6 months Via GO: ≥10 days but ≤ 20 days

Disclose board resolution to SETwithin the date of resolution, orbefore 9:00 am. of the nextbusiness day.

Disclose at least 14 days before actualrepurchase.

Resale price ≥ 85 %of average closing price

of previous 5 trading days

Disclosure the resolution toSET within the resolution date or9:00 am. of the next business day

The �rm can start the new treasury stockprogram again after 1 year after the endof the latest program.

Disclose board resolution at least 14 daysbefore resale of repurchased shares

≤ 7 days following registeringcapital reduction at MOC

Not exceeding 10% Exceeding / Not Exceeding 10%

Repurchase price ≤ 115% of average closing price of previous 5 trading days

�

�

��

Seek shareholders’ resolution approved(unless the company’s article of associationspecify that share repurchasing can be done

using a board resolution alone, and therepurchase is ≤10% of paid-up capital)

The company disclosestreasury stock program.

Repurchasecommencement date

Board of directorsresolves to resell

repurchased stocks

Share resalecommencement date

The date that all shares areresold / End of resale period

Register changed registered capital withMinistry of Commerce (MOC)

Disclose capital reduction registrationto SET

Program completed

The company reports capitalreduction + reduces theunsold

repurchased shares.

The end of sharesrepurchasing

(the last date ofrepurchasing period)

Repurchase from SET’smain board

Resell on SETmain board

Resell via PublicO�ering withSEC approval

General o�ering (GO)

Company submitsrepurchase o�er to

shareholders and SET.≥ 10 days

After 6 months

Within 3 years

Sold out

Not sold out

≤ 14 days

��

Issues for consideration / FAQ (continued)

How can we manage capital gains from treasury stock programs?

Capital gains from treasury stock cannot be booked in the income statement. However, a surplus between the share resale and repurchase values will be added to shareholders’ equity as a surplus in repurchase, while a de�cit between these two values will be deducted from retained earnings

How do companies usually conduct treasury stock programs?

During 2001-2013, listed companies generally conducted treasury stock programs through SET’s main board, where transaction �exibility is high.

“We conducted our treasury stock program while we had a high amount of cash and retained earnings, but this value was not re�ected in our stock price. We studied several alternatives and �nally chose a treasury stock program to add value over time and reduce excessive liquidity. When the program ended, our stock price rose, while retail shareholders were pleased about the outcome.”

Anant KaewruamvongsChief Executive O�cer and Managing Director

CS Loxinfo PCL

“Our company decided to carry out a treasury stock program in 2008 while the economy was su�ering from the economic crisis. At that time, the SET index was on a downward trend. Our business was doing �ne but our stock price did not re�ect the company’s actual value, with a price to book value of 0.69x, while the average price to book value of SET was 1.5x. The company wanted our stock to re�ect its fundamental value and sought to restore investor con�dence by choosing this �nancial tool. As a result, the company’s share price increased close to SET’s average price. About three years later, our shares were resold at higher prices than our repurchasing cost, generating higher returns for all shareholders.”

Viriya AmpornapakulPresident

Paci�c Pipe PCL

Related laws/regulations• Public Limited Companies Act (B.E. 2535) and ministerial regulations, 2001 Noti�cation of the Board of Governors of The Stock Exchange of Thailand, No. Bor.Jor./Por.11-04 Re: Disclosure of Information and Other Acts of a Listed Company Repurchase Their Own Shares and Disposes of Such Repurchased Shares, 2001.

62 The Stock Exchange of Thailand Building Ratchadapisek road, Klongtoey, Bangkok 10110 2014, January

STOCK

Treasury stock is a �nancial instrument, a tool for liquidity management at the time when the company’s share price is below its fundamental value while its retained earnings and �nancial liquidity are high and the company has no need for fund raising during that period when treasury stock is being acquired.

The company has positive retained earnings: Share repurchasing can be conducted by less than the amount of total retained earnings. Part of the �rm’s retained earnings should be allocated as a reserve equivalent to the amount paid for share repurchasing. The reserve should be maintained until all repurchased shares are resold, or the company reduces capital by reducing shares unsold, as the case may be.

The company has excess liquidity, so that over the next six months, the company is able to repurchase shares without any impact on its debt servicing ability.

The company’s free �oat shares are equal to or higher than SET requirements: That is, the free �oat shares are not less than 15 percent of paid-up capital and 150 retail shareholders.

Treasury stock

Quali�cations checklist

Shares repurchase methods

Share resale methods

1

2

Repurchase via the main board: The repurchase price must not be over 115 percent of the average closing price of the previous �ve trading days. (Under this method, shares repurchased must not be over 10 percent of paid-up capital.)

Repurchase via a general o�er (GO); this is more �exible in terms of o�ering price and quantity, as market prices are not under the �rm’s control. Using general o�er method, the company can set up the repurchase project size more or less than 10 percent of the paid-up capital.

The company must disclose their treasury stock program at least 14 days prior to implementation. If the program is processed via SET’s main board, it must be completed within six months. If the program is processed via general o�er, it must be conducted for at least 10 days and not over 20 days.

1

2

Resale via the main board: The resale price must not be lower than 85 percent of the average closing price of the previous �ve trading days.

Resale via a public o�ering (PO): This method requires the approval from the Securities and Exchange Commission (SEC).

The company must disclose the company board resolution at least 14 days prior to the resale.

1

23

�

�

�

�

�

�

�

Issues for consideration / FAQ

Does a treasury stock program require shareholders’ meeting resolution?

If the company needs to repeat the treasury stock program, what should they do?

If several treasury stock programs implemented one after another, how can the accumulated amount of repurchased share be calculated?

Yes, share repurchase program needs the approval from shareholders. However, the company

When must the company avoid share repurchases?

If the company is undergoing a treasury stock program, can it increase capital?

Repurchasing/resale limitations include:

Cannot be done when the company is disclosing information that is sensitive to price movement or may impact its share price or shareholder bene�ts, e.g., before disclosure of �nancial statements, before paying dividends, being taken over or when there are facts showing that the company is going to be taken over.

Cannot be conducted with connected persons.

Cannot be sent through Big Lot. (Currently, Big Lot method is now called Trade Report)

The company can repeat the program one year after the end of the previous program.

The total number of share repurchased from di�erent programs should be combined in carrying out calculations.

The company has to ensure that it does not need a capital increase while it is conducting the treasury stock project, as regulations do not allow a capital increase during that time; the �rm must resell all repurchased shares before a new capital increase. Additionally, the program may reduce stock trading liquidity in the stock market, decreasing free �oat shares.

which has indicated in the company’s articles of association can start the repurchase program by using only board resolution. The program approved by board must not exceed 10% of paid-up capital. As such, it is more �exible to specify or make adjustmentin articles of association beforehand.

1

2

3

Bene�ts of treasury stockFor the

Company

ForShareholders

Adds demand for the company’s shares, which could boost the company share price.

Reduces the number of free �oat shares, consequently increasing earnings per share.

Can be a �nancial instrument in giving returns to shareholders by e�ective �nancial liquidity.

Generates capital gain for the company. If the company’s management is con�dent of futureperformance and believes that the company’s share price is signi�cantly lower than its fundamental value, share resale in a proper time will generate pro�table returns.

Boosts earnings per share and return on equity (ROE). After the listed company repurchases shares,its number of free �oat shares will decline. The repurchased shares will not be counted in earningsper share calculation.

Boosts dividends per share because repurchased shares are not included in dividend per share

calculation.

The higher earnings per share may accordingly boost share prices at the current price-to-earningsratio (P/E).

Key procedures

Treasury stock report If repurchase via SET: within 9:00 am. of the business day following share repurchase/ resale date If via GO: within 5 business days from repurchase/ resale date

Repurchasing period Via SET main board: ≤ 6 months Via GO: ≥10 days but ≤ 20 days

Disclose board resolution to SETwithin the date of resolution, orbefore 9:00 am. of the nextbusiness day.

Disclose at least 14 days before actualrepurchase.

Resale price ≥ 85 %of average closing price

of previous 5 trading days

Disclosure the resolution toSET within the resolution date or9:00 am. of the next business day

The �rm can start the new treasury stockprogram again after 1 year after the endof the latest program.

Disclose board resolution at least 14 daysbefore resale of repurchased shares

≤ 7 days following registeringcapital reduction at MOC

Not exceeding 10% Exceeding / Not Exceeding 10%

Repurchase price ≤ 115% of average closing price of previous 5 trading days

�

�

��

Seek shareholders’ resolution approved(unless the company’s article of associationspecify that share repurchasing can be done

using a board resolution alone, and therepurchase is ≤10% of paid-up capital)

The company disclosestreasury stock program.

Repurchasecommencement date

Board of directorsresolves to resell

repurchased stocks

Share resalecommencement date

The date that all shares areresold / End of resale period

Register changed registered capital withMinistry of Commerce (MOC)

Disclose capital reduction registrationto SET

Program completed

The company reports capitalreduction + reduces the

unsold repurchased shares.

The end of sharesrepurchasing

(the last date ofrepurchasing period)

Repurchase from SET’smain board

Resell on SETmain board

Resell via PublicO�ering withSEC approval

General o�ering (GO)

Company submitsrepurchase o�er to

shareholders and SET.≥ 10 days

After 6 months

Within 3 years

Sold out

Not sold out

≤ 14 days

��

Issues for consideration / FAQ (continued)

How can we manage capital gains from treasury stock programs?

Capital gains from treasury stock cannot be booked in the income statement. However, a surplus between the share resale and repurchase values will be added to shareholders’ equity as a surplus in repurchase, while a de�cit between these two values will be deducted from retained earnings

How do companies usually conduct treasury stock programs?

During 2001-2013, listed companies generally conducted treasury stock programs through SET’s main board, where transaction �exibility is high.

“We conducted our treasury stock program while we had a high amount of cash and retained earnings, but this value was not re�ected in our stock price. We studied several alternatives and �nally chose a treasury stock program to add value over time and reduce excessive liquidity. When the program ended, our stock price rose, while retail shareholders were pleased about the outcome.”

Anant KaewruamvongsChief Executive O�cer and Managing Director

CS Loxinfo PCL

“Our company decided to carry out a treasury stock program in 2008 while the economy was su�ering from the economic crisis. At that time, the SET index was on a downward trend. Our business was doing �ne but our stock price did not re�ect the company’s actual value, with a price to book value of 0.69x, while the average price to book value of SET was 1.5x. The company wanted our stock to re�ect its fundamental value and sought to restore investor con�dence by choosing this �nancial tool. As a result, the company’s share price increased close to SET’s average price. About three years later, our shares were resold at higher prices than our repurchasing cost, generating higher returns for all shareholders.”

Viriya AmpornapakulPresident

Paci�c Pipe PCL

Related laws/regulations• Public Limited Companies Act (B.E. 2535) and ministerial regulations, 2001 Noti�cation of the Board of Governors of The Stock Exchange of Thailand, No. Bor.Jor./Por.11-04 Re: Disclosure of Information and Other Acts of a Listed Company Repurchase Their Own Shares and Disposes of Such Repurchased Shares, 2001.

62 The Stock Exchange of Thailand Building Ratchadapisek road, Klongtoey, Bangkok 10110 2014, January

STOCK

Treasury stock is a �nancial instrument, a tool for liquidity management at the time when the company’s share price is below its fundamental value while its retained earnings and �nancial liquidity are high and the company has no need for fund raising during that period when treasury stock is being acquired.

The company has positive retained earnings: Share repurchasing can be conducted by less than the amount of total retained earnings. Part of the �rm’s retained earnings should be allocated as a reserve equivalent to the amount paid for share repurchasing. The reserve should be main tained until all repurchased shares are resold, or the company reduces capital by reducing shares unsold, as the case may be.

The company has excess liquidity, so that over the next six months, the company is able to repurchas shares without any impact on its debt servicing ability.

The company’s free �oat shares are equal to or higher than SET requirements: That is, the free �oat shares are not less than 15 percent of paid-up capital and 150 retail shareholders.

Treasury stock

Quali�cations checklist

Shares repurchase methods

Share resale methods

1

2

Repurchase via the main board: The repurchase price must not be over 115 percent of the average closing price of the previous �ve trading days. (Under this method, shares repurchased must not be over 10 percent of paid-up capital.)

Repurchase via a general o�er (GO); this is more �exible in terms of o�ering price and quantity, as market prices are not under the �rm’s control. Using general o�er method, the company can set up the repurchase project size more or less than 10 percent of the paid-up capital.

The company must disclose their treasury stock program at least 14 days prior to implementation. If the program is processed via SET’s main board, it must be completed within six months. If the program is processed via general o�er, it must be conducted for at least 10 days and not over 20 days.

1

2

Resale via the main board: The resale price must not be lower than 85 percent of the average closing price of the previous �ve trading days.

Resale via a public o�ering (PO): This method requires the approval from the Securities and Exchange Commission (SEC).

The company must disclose the company board resolution at least 14 days prior to the resale.

1

23

�

�

�

�

�

�

�

Issues for consideration / FAQ

Does a treasury stock program require shareholders’ meeting resolution?

If the company needs to repeat the treasury stock program, what should they do?

If several treasury stock programs implemented one after another, how can the accumulated amount of repurchased share be calculated?

Yes, share repurchase program needs the approval from shareholders. However, the company

When must the company avoid share repurchases?

If the company is undergoing a treasury stock program, can it increase capital?

Repurchasing/resale limitations include:

Cannot be done when the company is disclosing information that is sensitive to price movement or may impact its share price or shareholder bene�ts, e.g., before disclosure of �nancial statements, before paying dividends, being taken over or when there are facts showing that the company is going to be taken over.

Cannot be conducted with connected persons.

Cannot be sent through Big Lot. (Currently, Big Lot method is now called Trade Report)

The company can repeat the program one year after the end of the previous program.

The total number of share repurchased from di�erent programs should be combined in carrying out calculations.

The company has to ensure that it does not need a capital increase while it is conducting the treasury stock project, as regulations do not allow a capital increase during that time; the �rm must resell all repurchased shares before a new capital increase. Additionally, the program may reduce stock trading liquidity in the stock market, decreasing free �oat shares.

which has indicated in the company’s articles of association can start the repurchase program by using only board resolution. The program approved by board must not exceed 10% of paid-up capital. As such, it is more �exible to specify or make adjustmentin articles of association beforehand.

1

2

3

Bene�ts of treasury stockFor the

Company

ForShareholders

Adds demand for the company’s shares, which could boost the company share price

Reduces the number of free �oat shares, consequently increasing earnings per share

Can be a �nancial instrument in giving returns to shareholders by e�ective �nancial liquidity

Generates capital gain for the company. If the company’s management is con�dent of futureperformance and believes that the company’s share price is signi�cantly lower than its fundamental value, share resale in a proper time will generate pro�table returns.

Boosts earnings per share and return on equity (ROE). After the listed company repurchases shares,its number of free �oat shares will decline. The repurchased shares will not be counted in earningsper share calculation.

Boosts dividends per share because repurchased shares are not included in dividend per share

calculation.

The higher earnings per share may accordingly boost share prices at the current price-to-earningsratio (P/E).

Key procedures

Treasury stock report If repurchase via SET: within 9:00 am. of the business day following share repurchase/ resale date If via GO: within 5 business days from repurchase/ resale date

Repurchasing period Via SET main board: ≤ 6 months Via GO: ≥10 days but ≤ 20 days

Disclose board resolution to SETwithin the date of resolution, orbefore 9:00 am. of the nextbusiness day.

Disclose at least 14 days before actualrepurchase.

Resale price ≥ 85 %of average closing price

of previous 5 trading days

Disclosure the resolution toSET within the resolution date or9:00 am. of the next business day

The �rm can start the new treasury stockprogram again after 1 year after the endof the latest program.

Disclose board resolution at least 14 daysbefore resale of repurchased shares

≤ 7 days following registeringcapital reduction at MOC

Not exceeding 10% Exceeding / Not Exceeding 10%

Repurchase price ≤ 115% of average closing price of previous 5 trading days

�

�

��

Seek shareholders’ resolution approved(unless the company’s article of associationspecify that share repurchasing can be done

using a board resolution alone, and therepurchase is ≤10% of paid-up capital)

The company disclosestreasury stock program.

Repurchasecommencement date

Board of directorsresolves to resell

repurchased stocks

Share resalecommencement date

The date that all shares areresold / End of resale period

Register changed registered capital withMinistry of Commerce (MOC)

Disclose capital reduction registrationto SET

Program completed

The company reports capitalreduction + reduces theunsold

repurchased shares.

The end of sharesrepurchasing

(the last date ofrepurchasing period)

Repurchase from SET’smain board

Resell on SETmain board

Resell via PublicO�ering withSEC approval

General o�ering (GO)

Company submitsrepurchase o�er to

shareholders and SET.≥ 10 days

After 6 months

Within 3 years

Sold out

Not sold out

≤ 14 days

��

Issues for consideration / FAQ (continued)

How can we manage capital gains from treasury stock programs?

Capital gains from treasury stock cannot be booked in the income statement. However, a surplus between the share resale and repurchase values will be added to shareholders’ equity as a surplus in repurchase, while a de�cit between these two values will be deducted from retained earnings

How do companies usually conduct treasury stock programs?

During 2001-2013, listed companies generally conducted treasury stock programs through SET’s main board, where transaction �exibility is high.

“We conducted our treasury stock program while we had a high amount of cash and retained earnings, but this value was not re�ected in our stock price. We studied several alternatives and �nally chose a treasury stock program to add value over time and reduce excessive liquidity. When the program ended, our stock price rose, while retail shareholders were pleased about the outcome.”

Anant KaewruamvongsChief Executive O�cer and Managing Director

CS Loxinfo PCL

“Our company decided to carry out a treasury stock program in 2008 while the economy was su�ering from the economic crisis. At that time, the SET index was on a downward trend. Our business was doing �ne but our stock price did not re�ect the company’s actual value, with a price to book value of 0.69x, while the average price to book value of SET was 1.5x. The company wanted our stock to re�ect its fundamental value and sought to restore investor con�dence by choosing this �nancial tool. As a result, the company’s share price increased close to SET’s average price. About three years later, our shares were resold at higher prices than our repurchasing cost, generating higher returns for all shareholders.”

Viriya AmpornapakulPresident

Paci�c Pipe PCL

Related laws/regulations• Public Limited Companies Act (B.E. 2535) and ministerial regulations, 2001 Noti�cation of the Board of Governors of The Stock Exchange of Thailand, No. Bor.Jor./Por.11-04 Re: Disclosure of Information and Other Acts of a Listed Company Repurchase Their Own Shares and Disposes of Such Repurchased Shares, 2001.

62 The Stock Exchange of Thailand Building Ratchadapisek road, Klongtoey, Bangkok 10110 2014, January